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Key takeaways Sterling stays firm: GBP/USD remains in a short-term uptrend above 1.3479 after breaking above its medium-term descending trendline post-NFP. US CPI is the key catalyst: A hotter-than-expected core CPI could revive Fed-hike bets and pressure GBP/USD, while softer inflation may extend sterling’s rally. 1.3479 is pivotal support: Holding above it keeps 1.3547, 1.3580 and 1.3643 in focus; a break below exposes 1.3440 and 1.3400. The sterling pound has been one of the best-performing major currencies against the US dollar in the past five trading sessions.
The USD/GBP cross rate has tumbled by 0.38% (a 0.38% gain for GBP against USD) at the time of writing, slightly above USD/CAD, which recorded a 0.56% loss over the same period (see Fig. 1).
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Macro divers: inflation trajectory versus Fed pricing Market sentiment remains closely tied to incoming inflation data as investors gauge whether the Federal Reserve will resume rate hikes later this year. Following recent mixed labour market signals, pricing for the September FOMC decision sits close to a coin toss (based on latest data from the CME FedWatch tool, the Fed funds futures market is only pricing in a 48.1% chance of a 25-bps hike, down from around 70% chance a week ago).
Hot CPI scenario (Core YoY > 2.5%): A surprise to the upside, driven by core goods price pass-throughs, would likely trigger a hawkish repricing in US short-term Treasury yields. This would provide a strong tailwind for the US Dollar Index, exposing GBP/USD to a rapid downward repricing toward the 1.3400 psychological level (also near the 20- and 200-day moving averages). Soft CPI scenario (Core YoY ≤ 2.5%): Confirmation of easing services inflation and softer shelter costs would give the Fed breathing room. A softer dollar would reinforce risk appetite, pushing GBP/USD above near-term hurdles toward multi-month highs. Let’s now decipher the near-term (1 to 3 days) outlook on the GBP/USD from a technical analysis perspective
Oscillating within minor ascending channel after a bullish breakout ex-post NFB Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
The price action of GBP/USD has cleared a significant medium-term hurdle after staging a bullish breakout ex-post the US NFP release (a major risk event on Friday, 7 August 2026), above its former descending trendline resistance from the 28 January 2026 high/52-week high.
In addition, it continues to oscillate within a minor ascending channel in place since the 29 July 2026 low of 1.3279, with a current bullish momentum reading on the hourly RSI (see Fig. 2).
These observations suggest that GBP/USD is oscillating within a short- to medium-term uptrend.
Watch the 1.3479 key short-term pivotal support to maintain a near-term bullish bias for the next intermediate resistances to come in at 1.3547, 1.3580 and 1.3643 (also a Fibonacci extension).
On the flip side, a failure to hold and an hourly close below 1.3479 invalidates the minor bullish impulsive up-move sequence, triggering a minor corrective decline towards the next intermediate supports at 1.3440 and 1.3400.
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Key takeaways Sterling stays firm: GBP/USD remains in a short-term uptrend above 1.3479 after breaking above its medium-term descending trendline post-NFP.US CPI is the key catalyst: A hotter-than-expected core CPI could revive Fed-hike bets and pressure GBP/USD, while softer inflation may extend sterling’s rally.1.3479 is pivotal support: Holding above it keeps 1.3547, 1.3580 and 1.3643 in focus; a break below exposes 1.3440 and 1.3400. The sterling pound has been one of the best-performing major currencies against the US dollar in the past five trading sessions.
The USD/GBP cross rate has tumbled by 0.38% (a 0.38% gain for GBP against USD) at the time of writing, slightly above USD/CAD, which recorded a 0.56% loss over the same period (see Fig. 1).
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Macro divers: inflation trajectory versus Fed pricing Market sentiment remains closely tied to incoming inflation data as investors gauge whether the Federal Reserve will resume rate hikes later this year. Following recent mixed labour market signals, pricing for the September FOMC decision sits close to a coin toss (based on latest data from the CME FedWatch tool, the Fed funds futures market is only pricing in a 48.1% chance of a 25-bps hike, down from around 70% chance a week ago).
Hot CPI scenario (Core YoY > 2.5%): A surprise to the upside, driven by core goods price pass-throughs, would likely trigger a hawkish repricing in US short-term Treasury yields. This would provide a strong tailwind for the US Dollar Index, exposing GBP/USD to a rapid downward repricing toward the 1.3400 psychological level (also near the 20- and 200-day moving averages).Soft CPI scenario (Core YoY ≤ 2.5%): Confirmation of easing services inflation and softer shelter costs would give the Fed breathing room. A softer dollar would reinforce risk appetite, pushing GBP/USD above near-term hurdles toward multi-month highs.Let’s now decipher the near-term (1 to 3 days) outlook on the GBP/USD from a technical analysis perspective
Oscillating within minor ascending channel after a bullish breakout ex-post NFB
Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. The price action of GBP/USD has cleared a significant medium-term hurdle after staging a bullish breakout ex-post the US NFP release (a major risk event on Friday, 7 August 2026), above its former descending trendline resistance from the 28 January 2026 high/52-week high.
In addition, it continues to oscillate within a minor ascending channel in place since the 29 July 2026 low of 1.3279, with a current bullish momentum reading on the hourly RSI (see Fig. 2).
These observations suggest that GBP/USD is oscillating within a short- to medium-term uptrend.
Watch the 1.3479 key short-term pivotal support to maintain a near-term bullish bias for the next intermediate resistances to come in at 1.3547, 1.3580 and 1.3643 (also a Fibonacci extension).
On the flip side, a failure to hold and an hourly close below 1.3479 invalidates the minor bullish impulsive up-move sequence, triggering a minor corrective decline towards the next intermediate supports at 1.3440 and 1.3400.
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
Key Points:U.S. CPI is the primary FX catalyst as traders assess whether inflation will alter expectations for the Fed's September decision.UK second-quarter GDP is another important catalyst for GBP/USD and expectations surrounding Bank of England policy.DXY remains technically vulnerable below its key moving averages while defending rising trendline support near 99.42.EUR/USD is testing long-term resistance near 1.1556, with a breakout potentially strengthening its bullish structure.GBP/USD remains constructive above its rising trendline and moving averages while buyers challenge 1.3516 resistance.
In this article:GBP/USD
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GBP/USD ForecastEUR/USD
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EUR/USD ForecastUS Dollar News: CPI Test Puts Fed, Euro and Pound in Focus The U.S. dollar begins the week with July CPI due out later today. The data release may dictate whether the Federal Reserve pauses its interest rate hike cycle or continues to hike in September. Team Reuters forecasts 0.1% month over month increase in headline CPI after the June reported drop of 0.4% with expected annual inflation coming in at 3.4%. Forecasts expect a 0.2% month over month increase in core CPI and a 2.5% year over year increase. Given recent market action, most expect the Fed to stay on hold in September. Thus, today’s CPI number may have some consequence.
The Falling U.S. July employment numbers combined with the current geopolitical situation has the Fed in a tricky spot. Atlanta Fed interim President says very high inflation and the uncertainty of energy flows out of the Middle East are significant issues the Fed is facing. Three of the Fed board members urged a rate hike in the July meeting.
The euro is in the same dilemma of growth versus inflation as the Fed. The ECB recently said the Ukraine-Russia conflict disrupted eurozone household spending; however, recent manufacturing numbers for July showed factory output was the best it has been in nearly four and a half years. The ECB has expressed some concern that the growing AI industry in Europe will help counter the downturn of the economy that is caused by trade and geopolitical uncertainty.
The Pound has its focus on the Thursday release of UK Q2 GDP. Forecasts currently put the number at 0.4% for the quarter following Q1’s 0.6% gain. The Bank of England is expected to keep interest rates at their current level and remain focused on inflation so the BoE will be watching the economy closely in case the focus shifts to falling growth.
For all three currencies, U.S. CPI is the primary concern of the moment. Lighter CPI would lessen the likelihood of another Fed hike. Conversely, a steepening CPI would give more weight to a Fed hike for this year.
U.S. Dollar Index Technical Analysis: DXY Holds Rising Trendline but $100.06 Still Caps Recovery Dollar Index Price Chart – Source: Tradingview Currently, the USD Index is at $99.87 and is trading right above the rising trendline and the key support area of $99.42. There have been signs of buyers coming in around the rising trend line, but the price still has a long way to go to reach the 50-day moving average (MA) at $100.30, 100-day moving average at $99.91, and is currently resting just below the rising trend line and the 50-day moving average. The recovery has not begun until these averages are crossed.
The Relative Strength Index (RSI) is at 41, and although it has begun to show a reversal as momentum has started to slow, there is still a strong bearish trend and it is still below 50. Immediate resistance is at $100.06 before $100.36 and $100.82. If the price can sustainably trade above these levels, then it will confirm a short-term bullish view and retest $101.62.
If there is a break down to the support of $99.42, then the rising trend line will also fall and provide a break to the support of $98.76. Until the price has the potential to test $100.36-$100.06, the USD Index is a cautious recovery scenario above $99.42.
GBP/USD Price Chart – Source: Tradingview GBP/USD is currently trading at $1.3508, with bulls defending the $1.3515 support level. Pound bulls display impressive momentum as price continues to trend above the moving average convergence divergence (MACD) and the lower trendline. A combination of a series of higher lows and the bullish MACD support a strong upward price move. The MACD, currently at 61, is approaching overbought territory, however it does indicate a solid bullish momentum.
The identified resistance levels are $1.3515, $1.3559 and $1.3601. In case of a breakdown, bulls should base their defense at the $1.3437 low, $1.3401 low, and $1.3343 levels. The trendline will continue to act as an important structural support line. From my perspective, if bulls are able to successfully defend the trendline, a run towards $1.3559 is expected. However, if bulls fail to defend the trendline, a significant part of the bullish structure will be lost.
EUR/USD Technical Analysis: Euro Compresses Beneath Descending Trendline Near $1.1540 EUR/USD Price Chart – Source: Tradingview The pair is at $1.1537, consolidating beneath the long-term descending trendline limiting bullish momentum. EUR/USD is above the 50-period and 100-period EMAs at the $1.1523 and $1.1495 levels, respectively, keeping the short-term structure positive, with resistance above. Smaller candlesticks are forming between $1.1530 and $1.1540, suggesting consolidation rather than a reversal.
The RSI is at around 49, showing neutral momentum after the recent rally. $1.1569 is the next resistance level followed by $1.1621 and $1.1674. Support is found at $1.1532, with major support at $1.1516 and $1.1500 and $1.1456. In my opinion, if the pair breaks above $1.1569, it is a clear bullish sign. If price breaks the descending trendline, it has potential to break out of the consolidation.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
UOB’s Quek Ser Leang and Lee Sue Ann highlight that GBP/USD closed marginally higher near 1.3510, with price action confined to a narrow 1.3493–1.3515 range. Intraday, they see scope for the Pound to edge higher but still capped within 1.3490–1.3535. Over 1–3 weeks, GBP can test 1.3555, though a sustained rise above that level is viewed as unlikely.
Pound strength seen but constrained"24-HOUR VIEW: After GBP rose to a high of 1.3530 on Monday, we indicated yesterday that “while GBP could rise further, the combination of slowing momentum and overbought conditions suggests any advance is likely to be contained within a 1.3490/1.3535 range.” The subsequent price movements did not unfold as expected. GBP traded in a narrow sideways range of 1.3493/1.3515, closing marginally higher by 0.01% at 1.3509. Despite the quiet price action, the underlying tone appears to be firm, and there is a chance for GBP to edge higher. However, we continue to hold the view that any advance is likely to be contained within a 1.3490/1.3535 range."
"1-3 WEEKS VIEW: We have held a positive GBP view since last Monday. Yesterday (11 Aug, spot at 1.3510), we indicated that while GBP “could test 1.3555, based on the prevailing momentum, a continued rise above this level appears unlikely.” We also indicated that “to keep the momentum going, GBP must hold above 1.3460 (‘strong support’ level).” There is no change in our view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The British Pound (GBP) remains in a limited range at around 1.3500 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair is expected to remain sideways, with investors awaiting the United States (US) Consumer Price Index (CPI) data for July in the North American session and the United Kingdom (UK) Q2 Gross Domestic Product (GDP) data on Thursday.
Investors expect the US CPI data to have a meaningful impact on Federal Reserve (Fed) interest rate expectations, as comments from Chairman Kevin Warsh in the July policy meeting press conference signaled heightened concerns regarding upside inflation risks.
Analysts at Danske Bank highlight that “today's most important data release will be the US July CPI,” with the bank forecasting “headline inflation at 0.2% MoM SA, 3.4% YoY (prior: -0.4% MoM, 3.5% YoY) and core inflation at 0.2% MoM SA, 2.5% YoY (prior: 0.0% MoM, 2.6% YoY).” The projections point to a modest month-on-month rebound in both headline and core price pressures, alongside slightly lower annual rates compared with June.
On Thursday, the UK Q2 GDP data is expected to arrive lower at 0.4% from 0.6% in the first quarter this year. On an annualized basis, the GDP growth is seen at 1.1%, faster than the previous reading of 0.9%.
GBP/USD Technical Analysis
GBP/USD trades at around 1.3500 above the 20-day exponential moving average (EMA) at 1.3437 and has broken through the downward resistance trend line, now offering support around 1.3465, which together suggests a constructive bullish bias while price consolidates near recent highs.
The Relative Strength Index (14) at about 60 keeps upward momentum intact without yet entering overbought territory, hinting that buyers still control the near-term direction as long as spot remains anchored above these supports.
On the downside, initial support is seen at the former trend-line break level near 1.3465, followed by the 20-day EMA at 1.3437, where a deeper pullback would be expected to attract dip-buying interest. Below the 20-day EMA, the pair would be exposed to the July 28 low at 1.3273. Looking up, the pair could advance towards 1.3600 if it rebounds above the August 10 high at 1.3530.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Gross Domestic Product (QoQ) The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
The euro and pound are holding their ground against the US dollar, although the momentum in European currencies has become more subdued following their previous gains. Market participants are reluctant to establish new positions ahead of the release of the July US inflation report, which could alter expectations for the Federal Reserve’s future policy. Recent labour market data is also encouraging caution: a weak ADP report and a decline in the ISM employment component have added to signs of a gradual cooling in the US labour market.
Today, the main focus will be on the US Consumer Price Index (CPI). According to forecasts, annual inflation may slow to 3.4% from 3.5%, while monthly prices are expected to rise by 0.1% after falling 0.4% a month earlier. Core CPI is forecast at 2.5% year-on-year and 0.2% month-on-month. Weaker-than-expected figures could strengthen expectations of monetary policy easing by the Fed and put additional pressure on the dollar. If inflation comes in above forecasts or proves more persistent, the US currency could receive fresh support. Final inflation figures for Germany and Italy will also be released in Europe, although their impact is likely to remain limited in the absence of significant deviations from preliminary estimates. Therefore, US inflation data is likely to be the main driver for EUR/USD and GBP/USD during today’s session.
EUR/USD In recent trading sessions, EUR/USD has been moving within a relatively narrow range of 1.1500–1.1580. Technical analysis suggests the possibility of another test of the lower boundary, as a Dark Cloud Cover pattern has formed on the daily timeframe. If sellers manage to establish a position below 1.1500, the pair could resume its downward move towards 1.1430–1.1460. Conversely, weaker-than-expected US inflation data could push the price towards 1.1600–1.1620.
Key events for EUR/USD:
today at 09:00 (GMT+3): German Consumer Price Index (CPI); today at 11:00 (GMT+3): Italian Harmonised Index of Consumer Prices (HICP); today at 15:30 (GMT+3): US Consumer Price Index (CPI).
GBP/USD GBP/USD buyers managed to push the pair to a new local high around 1.3500. Technical analysis indicates the possibility of further gains towards 1.3540–1.3560 if the 1.3480–1.3500 area is established as support. Stronger-than-expected US inflation data could support the dollar and trigger another test of the 1.3400 level in GBP/USD.
Key events for GBP/USD:
tomorrow at 09:00 (GMT+3): UK GDP; tomorrow at 14:00 (GMT+3): NI’s monthly GDP tracker; tomorrow at 21:00 (GMT+3): US federal budget execution report.
Overall, EUR/USD and GBP/USD are holding their ground after their previous gains, but their next direction will largely depend on today’s US inflation report. Weaker CPI data could strengthen expectations of Fed easing and put additional pressure on the dollar, creating room for further gains in European currencies. If inflation comes in above forecasts, however, the US currency could receive fresh support, increasing the likelihood of EUR/USD and GBP/USD returning to their nearest support levels.
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Scotiabank strategists Shaun Osborne and Eric Theoret observe that the British Pound (GBP) is consolidating gains near the top of its one-month and multi-month ranges, with price action closely tied to fading downside risk reversals. Improved United Kingdom (UK) political risk perception and slightly more constructive yield spreads support GBP/USD, while technicals point to resistance around 1.3600–1.36s and support in the mid/lower 1.34s.
Sterling consolidates near recent highs"The pound is quiet, consolidating its recent gains toward the upper end of both its local (one month) and medium term (multi-month) range."
"Price action continues to be driven by sentiment as we note the GBP’s tight correlation to risk reversals, which continue to fade their premium for protection against downside movement."
"The recovery is important, reflecting an overall improvement in the market’s assessment of UK (specifically political) risk and offers scope for further near-term strength for the pound."
"The release calendar is limited ahead of Thursday’s Q3 GDP (2nd), as well as the trade and industrial production figures for June. Yield spreads are also looking slightly more constructive for the pound as well, showing signs of a renewed recovery following their modest mid/late July pullback."
"Bullish – the overall technical setup remains constructive as the GBP recovers back toward its mid-July peak in the mid-1.35s, as well as the upper end of its range since mid-February."
"We note the potential for additional near-term resistance closer to 1.3600 and the May peaks in the mid-1.36s. We see support in the mid/lower 1.34s, and look to a near-term range bound between 1.3450 and 1.3550."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Key Points:GBP/USD is mostly flat as traders react to BRC Retail Sales Monitor report from the UK. USD/CAD moves lower amid falling Treasury yields. USD/JPY stays below the resistance at 159.50 - 160.00.
In this article:EUR/USD
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EUR/USD ForecastGBP/USD
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GBP/USD ForecastUSD/CAD
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USD/CAD ForecastUSD/JPY
+0.09%
USD/JPY Forecast
U.S. Dollar Is Little Changed As Existing Home Sales Miss Analyst Estimates
DXY 110826 4h Chart U.S. Dollar Index is mostly flat as traders focus on the Existing Home Sales report. The report indicated that Existing Home Sales decreased by -1.7% month-over-month in July, compared to analyst forecast of -0.7%.
U.S. Dollar Index continues its attempts to settle above the resistance level at 99.85 – 100.00. In case U.S. Dollar Index manages to settle above the 100.00 level, it will move towards the next resistance, which is located in the 100.50 – 100.65 range.
EUR/USD Pulled Back Below The 1.1550 Level
EUR/USD 110826 4h Chart EUR/USD is swinging between gains and losses as traders wait for geopolitical news from the Middle East. Defense Minister of Pakistan has recently said that U.S. and Iran were close to some kind of a deal despoite aggressive rhetoric from both sides. In case U.S. and Iran reach a temporary deal, oil prices will dive, providing support to the European currency.
If EUR/USD climbs back above the 1.1550 level, it will head towards the resistance level at 1.1600 – 1.1615. On the support side, a successful test of the support at 1.1510 – 1.1525 will push EUR/USD towards the next support level at 1.1435 – 1.1450.
GBP/USD Moved Away From Weekly Highs GBP/USD 110826 4h Chart GBP/USD is little changed as traders focus on the BRC Retail Sales Monitor report from the UK. The report showed that Retail Sales increased by +1% year-over-year in July, compared to analyst forecast of +1.5%.
The nearest support level for GBP/USD is located in the 1.3465 – 1.3480 range. If GBP/USD manages to settle below the 1.3465 level, it will head towards the next support at 1.3335 – 1.3350. On the upside, a move above the 1.3520 level will push GBP/USD towards the resistance level at 1.3550 – 1.3565.
USD/CAD Tests New Lows USD/CAD 110826 4h Chart USD/CAD is losing ground as traders focus on falling Treasury yields. The yield of 2-year Treasuries declined towards the 4.22% level, while the yield of 10-year Treasuries settled below 4.70%. Other commodity-related currencies are also moving higher despite the pullback in precious metals markets.
Currently, USD/CAD attempts to settle below the support level at 1.3920 – 1.3935. If USD/CAD manages to settle below the 1.3920 level, it will move towards the next support, which is located in the 1.3825 – 1.3840 range.
USD/JPY Is Mostly Flat As Traders Take Some Profits After The Strong Rebound
USD/JPY 110826 4h Chart USD/JPY is stuck below the resistance level at 159.50 – 160.00 as traders ignore the pullback in Treasury yields. Falling Treasury yields did not put pressure on USD/JPY as traders believe that BoJ will be forced to maintain its ultra-dovish policy. The major difference in yields between U.S. and Japan serves as the key bearish catalyst for the Japanese currency.
In case USD/JPY climbs above the 160.00 level, it will head towards the next resistance level at 161.50 – 162.00. RSI is in the moderate territory, so there is plenty of room to gain upside momentum in case the right catalysts emerge. It remains to be seen whether BoJ is ready to intervene in case USD/JPY tests the 162.00 level.
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The Pound Sterling (GBP) holds firm against the US Dollar (USD) on Tuesday following the release of softer-than-expected US jobs data, while investors await US inflation data on Wednesday and UK GDP releases on Thursday. At the time of writing, the GBP/USD pair trades at 1.3508, nearly unchanged. Read More...
British Pound consolidates around 1.3500 vs USD; looks to US CPI, UK GDP for fresh impetusThe GBP/USD pair seesaws between tepid gains and minor losses through the early European session on Tuesday, though it remains close to the highest level since July 16 set the previous day. Spot prices currently trade around the 1.3500 psychological mark, nearly unchanged for the day, as traders opt to wait for this week's important macro releases from the US and the UK. Read More...
British Pound clings to gains against US Dollar, US CPI in focusThe British Pound (GBP) holds onto two-day gains marginally at around 1.3500 against the US Dollar (USD) during the Asian trading session on Tuesday. The GBP/USD pair remains firm as the British Pound outperforms despite financial markets pricing out the possibility of an interest rate hike by the Bank of England (BoE) in the near term. Read More...
The GBP/USD pair trades marginally lower at around 1.3500 during the European trading session on Tuesday. The Cable edges down as the US Dollar (USD) ticks up; however, financial markets doubt the slight recovery move seen this week, with traders paring hawkish Federal Reserve (Fed) bets for the September policy meeting due to weak United States (US) Nonfarm Payrolls (NFP) data for July.
Economists at ING describe the July US jobs report as "surprisingly weak," noting that nonfarm payrolls "fell 23k" on the month. They highlight that the softness was compounded by "103K of downward revisions to the past two months' data," which has dragged the "3M average" gain in payrolls down to just "20,000." ING argues that this combination of an outright monthly decline and sizeable revisions paints a notably softer picture of underlying labour market momentum. Read more...
British Pound consolidates around 1.3500 vs USD; looks to US CPI, UK GDP for fresh impetusThe GBP/USD pair seesaws between tepid gains and minor losses through the early European session on Tuesday, though it remains close to the highest level since July 16 set the previous day. Spot prices currently trade around the 1.3500 psychological mark, nearly unchanged for the day, as traders opt to wait for this week's important macro releases from the US and the UK.
The crucial US Consumer Price Index (CPI) report will be released on Wednesday, followed by the preliminary UK Q2 GDP figures on Thursday and the US Producer Price Index (PPI). In the meantime, the US-Iran standoff, along with bets that the US Federal Reserve (Fed) will adopt a more hawkish stance amid inflation risks stemming from volatile oil prices, supports the safe-haven US Dollar (USD) and caps GBP/USD. Read more...
British Pound clings to gains against US Dollar, US CPI in focusThe British Pound (GBP) holds onto two-day gains marginally at around 1.3500 against the US Dollar (USD) during the Asian trading session on Tuesday. The GBP/USD pair remains firm as the British Pound outperforms despite financial markets pricing out the possibility of an interest rate hike by the Bank of England (BoE) in the near term.
Strategists at Rabobank point out that “for the UK, the market is currently pricing in a reduced expectation of a rate hike by the end of the year. Read more...
The GBP/USD pair trades marginally lower at around 1.3500 during the European trading session on Tuesday. The Cable edges down as the US Dollar (USD) ticks up; however, financial markets doubt the slight recovery move seen this week, with traders paring hawkish Federal Reserve (Fed) bets for the September policy meeting due to weak United States (US) Nonfarm Payrolls (NFP) data for July.
US payrolls stumble as July jobs data disappointsEconomists at ING describe the July US jobs report as "surprisingly weak," noting that nonfarm payrolls "fell 23k" on the month. They highlight that the softness was compounded by "103K of downward revisions to the past two months' data," which has dragged the "3M average" gain in payrolls down to just "20,000." ING argues that this combination of an outright monthly decline and sizeable revisions paints a notably softer picture of underlying labour market momentum.
According to the CME FedWatch tool, the odds of the Fed holding interest rates steady in the September meeting have increased to 50% from 30.4% seen a month ago.
Going forward, investors will focus on the US Consumer Price Index (CPI) data for July and the United Kingdom (UK) Q2 and June Gross Domestic Product (GDP) data, which will be released on Wednesday and Thursday, respectively.
GBP/USD Technical Analysis
GBP/USD trades around 1.3501, holding a bullish near‑term bias as spot remains above the 20-period exponential moving average (EMA) at 1.3429 and the downward-sloping border of the Descending Triangle pattern offering support near 1.3455.
The pair is thus supported by both dynamic and structural levels, while the Relative Strength Index (14) at about 60 points to firm but not overextended bullish momentum, suggesting buyers still control the near-term direction.
On the downside, initial support is seen at the former resistance trend line turned floor around 1.3455, followed by the 20-period EMA at 1.3429, where dip buyers may re-emerge if corrective pressure unfolds. Looking up, the pair could advance towards 1.3600 if it manages to extend the advance sustainably above the July 15 high at 1.3558.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Consumer Price Index (YoY) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.
The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
Both WTI and Brent have returned to inflated levels again as traffic in the Strait of Hormuz grinds to a halt.
There seems to be no end in sight to the war, and many economies are reporting diminishing reserves of crude.
In today’s Market Outlook, let’s take a look at Forex trading on GBPUSD, Gold, XAUUSD, Silver, XAGUSD, AUDUSD, USDCAD, USDJPY, WTI and Brent Crude Oil.
We see some technical signs on WTI with price at the upper trend line in this bearish channel and the stochastic oscillator overbought.
But this is by no means a technical trade, as only peace talks and negotiations about the passage of tankers will affect the price of crude oil.
All JPY pairs are turning bullish as the intervention by the US Treasury only seems to have had a short-term effect, as we discussed in an earlier video:
Why USDJPY Suddenly Fell | US Intervention Explained | Will the NASDAQ Catch Up? #marketoutlook.
But, as we pointed out, Scott Bessent said he might buy a few more billion dollars worth of yen, if necessary, so we may get to witness temporary JPY strength and bearish price action on pairs like USDJPY.
Check all your favourite JPY pairs as they all look roughly the same.
Last week the US saw a dreadful Non-Farm Payrolls report, meaning that the US Federal Reserve will likely not raise interest rates next month, driving USD weaker.
The Canadian figures, on the other hand, were much better than analysts’ expectations, driving CAD stronger.
These factors, with the rising price of crude, saw price action on USDCAD falling to a key level with bearish technicals.
We will now watch for a break below support and a long way to fall before the next key levels.
Be aware that tomorrow we have US CPI, which is the key measure of inflation for the Fed, so anything can happen.
Another USD pair we will be watching is AUDUSD, which has retraced from the news and has fallen to this lower trend line on the 4-hour.
The weaker USD has gold and silver climbing again, but our stochastic oscillator looks like it might turn down; keep an eye on the economic and geopolitical news.
We are seeing a descending triangle in the UK’s FTSE100 index, and price is stalled at support.
A fall in crude oil prices may also have a negative effect on the FTSE, and GBP will usually influence it.
We can see on the GBP charts that the Pound has short-term strength against all others except CAD and NZD.
That’s all for now.
CFDs and FX are leveraged products, and your capital may be at risk.
Key Points:U.S. CPI is the primary FX catalyst as traders assess whether inflation will alter expectations for the Fed's September decision.UK second-quarter GDP is another important catalyst for GBP/USD and expectations surrounding Bank of England policy.DXY remains technically vulnerable below its key moving averages while defending rising trendline support near 99.42.EUR/USD is testing long-term resistance near 1.1556, with a breakout potentially strengthening its bullish structure.GBP/USD remains constructive above its rising trendline and moving averages while buyers challenge 1.3516 resistance.
US Dollar News: CPI Test Puts Fed and FX Policy in Focus As we enter August 11, attentions are on the anticipated July CPI data to be released on Wednesday. The result of this CPI data will ultimately decide if the Fed continues its pause on rate increases or if it resumes tightening in September. Economists expect a 0.2% month-on-month increase in the core CPI. Pocket appreciations, consistent with that forecast, would likely reflect inflation returning to the Fed’s 2% target. In June, the Fed’s preferred core inflation measure was reported at 3.3% with an increase from the previous year at 2.8%.
Prior expectations around interest rates have become unpredictable as the persistent inflation and regional energy shocks challenge Chair Warsh’s decision to keep rates the same in the last meeting, despite the three dissents for a rate increase. Additionally, President Trump’s Larry-Kudlow-like policies to undermine the Fed’s deliberations and autonomy by targeting a Fed Governor have added to the already increasing fundamental risks of the dollar.
There are also many uncertainties for the euro. Recent news out of Washington indicate that the yen was propped up by the recent dollar selling done by the U.S. Treasury. This has also sparked questions around currency coordination and if the U.S. Treasury was working to support the dollar while avoiding pressure on the bond market. For the ECB, that equates to staying the course for now following their last policy meeting in July.
Sterling is focusing on this week’s second-quarter UK GDP data. Most economists say the economy grew by around 0.4% in Q2. This would follow Q1’s 0.6% growth. Despite the challenges of the Iran situation and supply chain issues, activity remained resilient. The data will matter for the Bank of England as stronger data means the bank can keep an eye on inflation risks. The data will also affect the U.S. dollar, euro, and pound. Weaker figures would mean the BoE would do more to fight inflation. For now, U.S. CPI is the most important data for the currency markets. PPI and retail sales data are also important this week.
U.S. Dollar Index Technical Analysis: DXY Holds Rising Trendline but Remains Below Key EMAs Dollar Index Price Chart – Source: Tradingview The US Dollar Index currently trades at $99.88. The index is currently trading slightly above the rising trendline and a key horizontal support at $99.42. Although the index trades above the rising trendline and horizontal support, the index is currently trading below the 50-day EMA ($100.32) and the 100-day EMA ($99.91) and therefore bears still control the index. Buying pressure is apparent from the most recent candles defending the rising trendline. This, however, is not enough to be considered a bullish trend, and is currently lacking confirmation.
The RSI is currently at 41, which indicates that the selling pressure has diminished, however the RSI is still below the neutral mark at 50. Resistance for the index is expected at $100.36, $100.82, and $101.62. In the event the index falls, support is expected at $99.42. Below $99.42 is expected support at $98.76 and $98.18.
GBP/USD Technical Analysis: Sterling Tests Rising Trendline Near $1.3500 GBP/USD Price Chart – Source: Tradingview GBP/USD is trading around $1.3499, and is still trading above the rising trendline which supported the recovery since late July. The price is also still above the 50-period EMA at $1.3456 and the 100-period EMA at $1.3427, and although the price has been consolidating, the structure is still Bullish. Smaller bodies around the $1.3500 area suggest hesitation.
They are not large enough to indicate a reversal. The RSI is at 58, suggesting there is bullish momentum, which is healthy, but still not overbought. The areas of resistance for this momentum are $1.3516, $1.3559 and $1.3601. Moving in the other direction, support for this momentum is $1.3437, $1.3401 and $1.3343. In my opinion, if the GBP/USD is able to trade above the rising trendline, the Bullish setup is intact. I also believe that a break above $1.3516 could extend the move toward $1.3559.
EUR/USD Technical Analysis: Euro Stalls Below Long-Term Trendline at $1.1556
EUR/USD Price Chart – Source: Tradingview EUR/USD currently stands at $1.1534. Price activity shows the Euro trading along the long term falling trendline from where multiple attempts to move higher have been capped. The 50 day moving average (MA) stands at $1.1496, while the 100 day MA stands at $1.1542, and the EUR/USD is positioned below the 50 day MA indicating recent resistance.
Recent price movement has shown that the buyers could be losing steam after the strong bounce from $1.1357, and resistance has been built at $1.1556. The RSI (relative strength index) has an open bullish setup at 58, although a clean break above is what is called for.
In the short term, $1.1556 is the first resistance level, followed by $1.1674 and then $1.1790. In the short term, $1.1455 is the first major support level with the next support level standing firmly at $1.135
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that GBP/USD extended last week’s rally, but overbought conditions should confine intraday moves to a 1.3490–1.3535 band. On a 1–3 week horizon, the British Pound (GBP) could test 1.3555, though a sustained break above is seen as unlikely, with strong support now at 1.3460.
Pound upside persists but gains seen limited"24-HOUR VIEW: GBP soared last Friday and continued to rise yesterday, closing 0.10% higher at 1.3507. While GBP could rise further, the combination of slowing momentum and overbought conditions suggests any advance is likely to be contained within a 1.3490/1.3535 range."
"1-3 WEEKS VIEW: We turned positive on GBP last Monday (03 Aug, spot at 1.3485), but we indicated that “it remains to be seen whether it can break above 1.3555.” On Wednesday (05 Aug, spot at 1.3450), we indicated that “upward momentum has since eased, but there is still a chance, albeit not a high one, for GBP to rise toward 1.3555.” Last Friday, GBP rose sharply, and yesterday, it rose further and printed a high of 1.3530. Upward momentum has improved slightly, and GBP could test 1.3555. Based on the prevailing momentum, a continued rise above this level appears unlikely. To keep the momentum going, GBP must hold above 1.3460 (‘strong support’ level previously at 1.3410)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The British Pound (GBP) holds onto two-day gains marginally at around 1.3500 against the US Dollar (USD) during the Asian trading session on Tuesday. The GBP/USD pair remains firm as the British Pound outperforms despite financial markets pricing out the possibility of an interest rate hike by the Bank of England (BoE) in the near term.
Pound Sterling Price This week The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Japanese Yen.
USDEURGBPJPYCADAUDNZDCHFUSD0.08%-0.18%0.89%-0.14%0.08%0.12%0.29%EUR-0.08%-0.27%0.79%-0.29%-0.06%-0.06%0.11%GBP0.18%0.27%1.01%-0.03%0.21%0.23%0.36%JPY-0.89%-0.79%-1.01%-0.71%-0.47%-0.59%-0.39%CAD0.14%0.29%0.03%0.71%0.25%0.12%0.47%AUD-0.08%0.06%-0.21%0.47%-0.25%0.00%0.14%NZD-0.12%0.06%-0.23%0.59%-0.12%-0.00%0.15%CHF-0.29%-0.11%-0.36%0.39%-0.47%-0.14%-0.15% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Strategists at Rabobank point out that “for the UK, the market is currently pricing in a reduced expectation of a rate hike by the end of the year,
This week, the major trigger for the British currency will be the preliminary United Kingdom (UK) Q2 and the June month Gross Domestic Product (GDP) data, which will be released on Thursday. In the April-June period, the UK economy is expected to have grown at a moderate pace of 0.4% vs. the previous reading of 0.6%. On a monthly basis, the GDP is seen contracting by 0.1%.
Meanwhile, the US Dollar Index (DXY) trades almost flat at press time, holding onto Monday’s recovery move at around 99.80. The USD Index is expected to remain sideways as investors await the United States (US) Consumer Price Index (CPI) data for July, which will be released on Wednesday.
US inflation seen firming but not reaccelerating in JulyBrown Brothers Harriman’s Elias Haddad expects the upcoming US July CPI report to show inflation "firm modestly but stop short of signaling a renewed acceleration in inflation." He notes that "headline CPI is expected to rise +0.1% m/m vs. -0.4% in June and ease to 3.4% y/y vs. 3.5% in June," while "core CPI is expected to rise +0.2% m/m vs. 0.0% in June and ease to 2.5% y/y vs. 2.6% in June." The data are due Wednesday and, in Haddad’s view, should confirm a gradual cooling in underlying price pressures rather than a renewed upswing.
The US inflation data will have a significant impact on the Federal Reserve's (Fed) interest rate expectations, as the July monetary policy statement showed heightened concerns among policymakers toward upside inflation risks.
Lately, traders have priced out the possibility of a Fed interest rate hike in the September meeting after the release of weak US Nonfarm Payrolls (NFP) data for July.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3500, retaining a bullish near-term tone as spot holds above the 60-day exponential moving average (EMA) at 1.3403 and the broken downward resistance trend line now offering support around 1.3456. The Relative Strength Index (14) at 61.1 leans into positive territory, suggesting buyers remain in control while momentum is not yet stretched into overbought conditions.
On the downside, immediate support emerges at the former trend-line cap turned floor near 1.3456, followed by the 60-day EMA at 1.3403, where a deeper pullback would be expected to attract fresh demand. As long as GBP/USD defends these layers of underlying support, the pair would likely continue to favor the topside, with bulls eyeing further gains above the recent 1.3509 close in the sessions ahead.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Consumer Price Index (YoY) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.
The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
The Pound Sterling (GBP) advances during the North American session on Monday, up 0.2% as markets digest developments in the Middle East and await crucial inflation data in the United States (US). The GBP/USD pair trades at 1.3520 after bouncing off daily lows of 1.3483. Read More...
British Pound tests 1.3500 as US Dollar struggles to shake off NFP shockGBP/USD trades around 1.3495 on Monday at the time of writing, up a modest 0.04% on the day. However, the pair struggles to hold firmly above the psychological 1.3500 level after benefiting on Friday from a decline in the US Dollar (USD) triggered by disappointing United States (US) employment data. Read More...
British Pound outperforms at the start of the UK Q2 GDP data weekThe British Pound (GBP) trades higher against its major currency peers and is marginally up at around 1.3500 against the US Dollar (USD) during the European trading session on Monday. The outperformance in the British currency seems unlikely to sustain as traders seem confident that the Bank of England (BoE) will not hike interest rates in the near term despite rising oil prices prompting global inflation expectations. Read More...
Key Points:EUR/USD settled near the 1.1550 level as traders focused on the strong rally in the oil markets. USD/CAD pulled back as precious metals markets moved higher. USD/JPY climbed towards the 159.00 level amid rising Treasury yields.
U.S. Dollar Rebounds As Oil Markets Rally
DXY 100826 4h Chart U.S. Dollar Index gains some ground as traders focus on the strong rally in the oil markets. Oil prices are up by +5% as U.S. and Iran did not reach any deal over the weekend. President Trump signaled that he would use economic pressure to force Iran back to negotiations.
High oil prices may push inflation towards higher levels and force the Fed to raise rates at the next meeting in September, which will be bullish for the American currency.
The nearest resistance level for U.S. Dollar Index is located in the 99.85 – 100.00 range. In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance, which is located in the 100.50 – 100.65 range.
EUR/USD Moves Away From Multi-Week Highs EUR/USD 100826 4h Chart EUR/USD moved lower as traders took some profits off the table near multi-week highs. There are no important economic reports scheduled to be released in the EU today, so traders will stay focused on general market sentiment.
The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. If EUR/USD declines below the 1.1510 level, it will head towards the next support at 1.1435 – 1.1450. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
GBP/USD Tests New Highs GBP/USD 100826 4h Chart GBP/USD climbed above the 1.3500 level as traders ignored rising oil prices and bet on dovish Fed.
In case GBP/USD stays above 1.3500, it will head towards the nearest resistance level at 1.3550 – 1.3565. A move above the 1.3565 level will push GBP/USD towards the 1.3650 level.
On the support side, a move below the support at 1.3465 – 1.3480 will open the way to the test of the 50 MA at 1.3444. If GBP/USD manages to settle below the 50 MA, it will head towards the next support level at 1.3335 – 1.3350.
USD/CAD Attempts To Settle Below The Support At 1.3920 – 1.3935
USD/CAD 100826 4h Chart USD/CAD pulls back as traders focus on rising precious metals markets. Gold climbed above the $4350 level, while silver settled above $65.00. Other commodity-related currencies are mostly flat in today’s trading session.
Currently, USD/CAD is trying to settle below the support at 1.3920 – 1.3935. If USD/CAD manages to settle below the 1.3920 level, it will head towards the next support level, which is located in the 1.3825 – 1.3840 range.
USD/JPY Moves Higher As Treasury Yields Rise USD/JPY 100826 4h Chart USD/JPY gains ground as the yen continues to lose ground after interventions. Rising Treasury yields provide additional support to USD/JPY. The yield of 2-year Treasuries climbed above the 4.23% level, while the yield of 10-year Treasuries settled near 4.70%.
At this point, forex traders are not worried that BoJ would intervene again to support the yen. Fundamentally, the yen remains weak due to the difference in interest rates in U.S. and Japan.
If USD/JPY settles above the 50 MA at 158.84, it will head towards the resistance level at 159.50 – 160.00. A move above the 160.00 level will push USD/JPY towards the 162.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
GBP/USD enters the week of 10–14 August near 1.3500 – its highest level since 15 July. Sterling is building on the momentum from a sharp decline in the dollar following a weak US labour market report, which reduced expectations of a Federal Reserve rate hike in September. Further support has come from the drop in oil prices: cheaper energy is easing inflation risks and reducing pressure on the UK economy.
Geopolitics remains a key factor. Donald Trump announced progress in negotiations between Iran and Oman regarding the Strait of Hormuz, although no final agreement has yet been reached. A further decline in oil prices would reinforce expectations that the Bank of England can maintain a gradual approach to monetary policy. At its last meeting, the regulator left rates unchanged, and Andrew Bailey confirmed that the disinflation process continues.
The main event for sterling this week will be Thursday’s preliminary GDP estimate for the second quarter. The economy is expected to grow by 0.2% quarter-on-quarter, down from 0.6% previously, with the annual rate projected at 1.6% versus 0.9%. June GDP is forecast to rise by 0.1%. Stronger-than-expected data would support GBP/USD, while a marked slowdown could put renewed pressure on the pound.
On the US side, the key release will be July inflation data on Wednesday, with core CPI expected at 2.5% year-on-year and headline CPI at 3.4%. Thursday brings PPI, followed by retail sales and the University of Michigan’s preliminary consumer sentiment index on Friday. Weak inflation and consumer figures could weigh heavily on the dollar and support further GBP/USD gains, while sustained price pressures would strengthen the case for Fed tightening.
Technical Analysis
On the H4 GBP/USD chart, a wide consolidation range is forming around the 1.3470 level. An upside breakout would open the way for a move towards 1.3522 and then 1.3535. A downside breakout would suggest a move towards 1.3436, and a break below this level would open the way for the trend to extend to 1.3190. The MACD indicator supports this scenario, with its signal line above zero and pointing downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3470 level, currently extending between 1.3434 and 1.3500. A move lower towards 1.3470 is expected, followed by a move higher to 1.3535. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing downwards. In the short term, a decline towards 20 is expected, followed by a rise towards 80.
Conclusion GBP/USD has started the week on a strong footing, trading near its highest level since mid-July. The pound has benefited from a weaker dollar following soft US labour market data and falling oil prices, which have eased inflation concerns and reduced expectations of aggressive Fed tightening. Geopolitical progress regarding the Strait of Hormuz has also supported risk sentiment. Markets will now focus on UK GDP data on Thursday and US inflation figures on Wednesday, both of which will provide important clues about the policy outlook for the BoE and Fed. Technically, the pair appears poised for further upside towards 1.3535, with near-term direction hinging on this week’s key data releases. A break below 1.3436 would shift the outlook to bearish, exposing the 1.3190 level.
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GBP/USD enters the week of 10–14 August near 1.3500 – its highest level since 15 July. Sterling is building on the momentum from a sharp decline in the dollar following a weak US labour market report, which reduced expectations of a Federal Reserve rate hike in September. Further support has come from the drop in oil prices: cheaper energy is easing inflation risks and reducing pressure on the UK economy.
Geopolitics remains a key factor. Donald Trump announced progress in negotiations between Iran and Oman regarding the Strait of Hormuz, although no final agreement has yet been reached. A further decline in oil prices would reinforce expectations that the Bank of England can maintain a gradual approach to monetary policy. At its last meeting, the regulator left rates unchanged, and Andrew Bailey confirmed that the disinflation process continues.
The main event for sterling this week will be Thursday’s preliminary GDP estimate for the second quarter. The economy is expected to grow by 0.2% quarter-on-quarter, down from 0.6% previously, with the annual rate projected at 1.6% versus 0.9%. June GDP is forecast to rise by 0.1%. Stronger-than-expected data would support GBP/USD, while a marked slowdown could put renewed pressure on the pound.
On the US side, the key release will be July inflation data on Wednesday, with core CPI expected at 2.5% year-on-year and headline CPI at 3.4%. Thursday brings PPI, followed by retail sales and the University of Michigan’s preliminary consumer sentiment index on Friday. Weak inflation and consumer figures could weigh heavily on the dollar and support further GBP/USD gains, while sustained price pressures would strengthen the case for Fed tightening.
Technical analysis
On the H4 GBP/USD chart, a wide consolidation range is forming around the 1.3470 level. An upside breakout would open the way for a move towards 1.3522 and then 1.3535. A downside breakout would suggest a move towards 1.3436, and a break below this level would open the way for the trend to extend to 1.3190. The MACD indicator supports this scenario, with its signal line above zero and pointing downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3470 level, currently extending between 1.3434 and 1.3500. A move lower towards 1.3470 is expected, followed by a move higher to 1.3535. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing downwards. In the short term, a decline towards 20 is expected, followed by a rise towards 80.
ConclusionGBP/USD has started the week on a strong footing, trading near its highest level since mid-July. The pound has benefited from a weaker dollar following soft US labour market data and falling oil prices, which have eased inflation concerns and reduced expectations of aggressive Fed tightening. Geopolitical progress regarding the Strait of Hormuz has also supported risk sentiment. Markets will now focus on UK GDP data on Thursday and US inflation figures on Wednesday, both of which will provide important clues about the policy outlook for the BoE and Fed. Technically, the pair appears poised for further upside towards 1.3535, with near-term direction hinging on this week’s key data releases. A break below 1.3436 would shift the outlook to bearish, exposing the 1.3190 level.
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Dollar Index Price Chart – Source: Tradingview Currently, the U.S. Dollar Index is showing a quotation of $99.63. After the most recent sharp sell-off, it has been able to defend a long-term rising trendline and the key support zone of $99.42. The price is under both the 50-day EMA at $100.33 and the 100-day EMA at $99.91. This is keeping the broader short-term structure at risk, even after the most recent consolidation.
The most recent price action has shown smaller bodies of the candlesticks with respect to support, showing the momentum for selling is diminishing, but with no signs of a reversal. The RSI is currently at 37. It is close to the oversold region, meaning that there is a possibility of a technical rebound.
The first line of resistance is at $100.36, with subsequent resistance at $100.82 and $101.62. If the trendline holds, the move will reach towards those levels. If support at $99.42 is broken, the new targets will be $98.76 and $98.18.
The pair gained momentum following the release of the US labour market report for July 2026 on 7 August. Non-farm employment fell by 23,000 jobs, compared with a forecast for an increase of 80,000 jobs among economists surveyed by Reuters. Employment data for May and June were also revised downwards, according to the Bureau of Labor Statistics. The dollar responded with broad-based weakness. Earlier, on 30 July, the Bank of England kept its interest rate at 3.75% by a six-to-three vote, with three members of the committee voting for a rate hike. The regulator’s decision also highlighted inflation risks associated with volatility in energy prices.
Technical Analysis of GBP/USD
After a sharp rise from around 1.3280 towards 1.3500 in late July, the pair entered a narrowing range between the upper and lower boundaries of the current profile at 1.3483 and 1.3440, respectively. The two boundaries gradually converged, forming a pattern resembling a contracting triangle. The green impulse candle subsequently broke above the pattern’s upper boundary, while the price is attempting to establish itself above both the trendline and the profile boundary. If the bullish scenario develops, the price could move towards the red resistance level at 1.3555.
If the current breakout from consolidation proves to be false and the price returns inside the profile, the POC at 1.3465 and the lower profile boundary at 1.3440 will regain their importance for market participants. Below these levels lies the green support area at 1.3420. The RSI + MAs indicator shows three readings of 61, 57 and 57. All three values are above the neutral zone, while the moving averages are coloured green. It is also worth noting that vertical volume has declined compared with the late-July impulse.
Summary The attempt to break above the triangle’s upper boundary could open the way towards a test of the red resistance area at 1.3555, but the sustainability and potential of the move may also depend on the flow of further US economic data.
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The Pound Sterling edges higher by some 0.29%, yet it remains trading sideways, unable to decisively crack 1.3500 after reaching a weekly peak of 1.3506, and has retreated to the 1.3490 area.
GBP/USD Price Forecast: Technical outlookThe technical picture shows that GBP/USD is consolidating, yet it is slightly tilted to the upside after clearing the 200-day Simple Moving Average (SMA) at 1.3406. Market structure suggests the uptrend might resume once buyers reclaim the July 15 swing high at 1.3558, opening the door to a test of 1.3600.
In that scenario, the next area of interest for GBP/USD would be the May 11 swing high at 1.3653, followed by 1.3700.
On the flip side, if GBP/USD remains below 1.3500, look for a pullback towards August’s 3 low of the day (LOD) at 1.3417. A breach of the latter will expose the convergence of the 100- and 200-day SMAs at 1.3406/05, followed by the 50-day SMA At 1.3365.
GBP/USD Price Chart – Daily
GBP/USD daily chart Pound Sterling Price This week The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD-0.12%-0.01%0.24%-0.54%-0.38%0.13%0.13%EUR0.12%0.11%0.38%-0.41%-0.15%0.28%0.26%GBP0.01%-0.11%-0.06%-0.53%-0.27%0.14%0.14%JPY-0.24%-0.38%0.06%-0.72%-0.48%-0.01%-0.02%CAD0.54%0.41%0.53%0.72%0.25%0.72%0.68%AUD0.38%0.15%0.27%0.48%-0.25%0.40%0.40%NZD-0.13%-0.28%-0.14%0.00%-0.72%-0.40%0.00%CHF-0.13%-0.26%-0.14%0.02%-0.68%-0.40%-0.00% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Key Points:EUR/USD climbed above the 1.1550 level as traders focused on U.S. job market data. USD/CAD moved lower as precious metals markets rallied. USD/JPY pulled back amid falling Treasury yields.
U.S. Dollar Is Under Pressure After Disappointing NFP Report
DXY 070826 4h Chart U.S. Dollar Index is losing ground as traders focus on the surprising Non Farm Payrolls report. The report indicated that U.S. economy lost -23,000 jobs in July, compared to analyst forecast of +80,000.
Unemployment Rate declined from 4.2% in June to 4.1% in July as Participation Rate decreased from 61.5% to 61.4%.
The weak Non Farm Payrolls report put significant pressure on the American currency as traders reduced bets on hawkish Fed. FedWatch Tool indicates that there is a 58.1% chance that Fed will keep rates unchanged at the next meeting in September.
The nearest support level for U.S. Dollar Index is located in the 99.25 – 99.40 range. In case U.S. Dollar Index manages to settle below the 99.25 level, it will head towards the next support level at 98.60 – 98.75.
EUR/USD Tests New Highs As Traders Focus On NFP Data EUR/USD 070826 4h Chart EUR/USD gained ground as traders reacted to U.S. job market data. In the EU, traders focused on Germany’s Exports report. The report indicated that Exports increased by +0.9% month-over-month in June, compared to analyst consensus of +0.2%.
In case EUR/USD settles above the 1.1550 level, it will head towards the resistance level at 1.1600 – 1.1615. A move above the 1.1615 level will push EUR/USD towards the next resistance at 1.1685 – 1.1700.
GBP/USD Tests The 1.3500 Level GBP/USD 070826 4h Chart GBP/USD moved higher as traders focused on dovish changes in Fed policy outlook and reacted to Lloyds House Price Index report from the UK. The report indicated that house prices increased by +0.1% year-over-year in July, compared to analyst consensus of +0.4%.
GBP/USD moved above the resistance at 1.3465 – 1.3480 and is trying to settle above the 1.3500 level. In case this attempt is successful, GBP/USD will head towards the next resistance at 1.3550 – 1.3565. RSI remains in the moderate territory, so there is plenty of room to gain additional momentum in the near term.
USD/CAD Tests Support At 1.3920 – 1.3935
USD/CAD 070826 4h Chart USD/CAD pulled back as traders reacted to the strong rally in precious metals markets. Gold climbed above the $4300 level, while silver settled above $63.00. Other commodity-related currencies are also moving higher in today’s trading session.
Traders also focused on the Unemployment Rate report from Canada. The report showed that Unemployment Rate declined from 6.5% in June to 6.4% in July, compared to analyst consensus of 6.5%.
Currently, USD/CAD is trying to settle below the support level at 1.3920 – 1.3935. If USD/CAD manages to settle below the 1.3920 level, it will head towards the next support level at 1.3825 – 1.3840.
USD/JPY Retreats As Treasury Yields Fall USD/JPY 070826 4h Chart USD/JPY moved lower as traders focused on falling Treasury yields. The yield of 2-year Treasuries declined towards the 4.20% level, while the yield of 10-year Treasuries settled near 4.65%.
If USD/JPY settles below the 157.00 level, it will move towards the support level at 154.50 – 155.00. On the upside, a successful test of the resistance at 157.50 – 158.00 will push USD/JPY towards the next resistance level, which is located in the 159.50 – 160.00 range.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Stronger US Treasury yields and pre-NFP position adjustments boosted dollar demand, outweighing reduced safe-haven interest following Middle East diplomatic progress With no Bank of England meeting until September, sterling is trading reactively to US data, especially the closely watched July nonfarm payrolls report Market participants can capitalize on current range-bound conditions between key technical levels or await breakout opportunities following critical economic data The British pound (GBP) ended July strongly against the U.S. dollar, surpassing the 1.3500 mark after a three-day rally. However, August has presented a more volatile trading period for GBP/USD. In the first five trading days of August, the pair only managed two positive closes, returning to the 1.3440 level.
Traders were caught off guard by the dollar’s sudden dip. Global demand for safe havens relaxed, as talk of war in the Middle East quieted down thanks to diplomatic discussions about the Strait of Hormuz. So, why is the dollar still so strong despite this?
The Dollar’s Comeback Isn’t About Fear Anymore The dollar’s surprising strength right now is what’s really noteworthy, especially since a classic safe-haven driver, the risk of Middle East war, is actually fading. Iran and Oman have made good headway on a plan to reopen the Strait of Hormuz. In fact, reports this week even point to an agreed-upon shipping route.
This proposed deal would have ships moving through routes controlled by both Iran and Oman, which could undo months of disruption in a waterway that handles about a fifth of the world’s oil.
Normally, such de-escalation would reduce demand for the dollar as investors move away from safe-haven assets. However, the dollar’s resilience suggests other factors are at play. The primary reason for sterling’s weakness is a widening yield differential.
U.S. Treasury yields have remained stable due to consistent hawkish commentary from the Federal Reserve, while U.K. gilt yields have declined amid concerns about sluggish domestic economic growth.
Reports indicate Federal Reserve Chair Kevin Warsh is still considering a September rate hike if new inflation data stays stubborn. That’s pushed Treasury yields higher and backed the dollar. Markets are now paying more attention to the chance of tighter policy rather than just an extended pause.
Meanwhile, institutional investors reduced their short-dollar positions in anticipation of key U.S. economic data releases, including Non-Farm Payrolls (NFP) and ISM services figures.
On the UK side, the pound has its own headwinds. The Bank of England maintained its interest rate at 3.75% on July 30 and does not have another meeting scheduled until September 17. This leaves sterling largely influenced by U.S. economic data rather than having its own domestic drivers this month.
What to Expect In the Coming Weeks and Months for GBPUSD In the short term, GBPUSD will probably keep reacting to U.S. data and what the Fed says. The pair has been moving between 1.32 and 1.36. To break out of this range, either up or down, we’ll need clearer signals from American economic indicators.
If payrolls and upcoming inflation numbers are strong, the dollar might continue its slight comeback and push the pound towards the lower end of that 1.32–1.36 range. On the other hand, if the jobs report is significantly weaker, it would quickly bring back the idea that the Fed might be more patient, and the pound could test the 1.35 level again.
For now, it seems like the market is stuck in a range and reacting to specific events, rather than moving in a clear trend.
Why is the US dollar getting stronger against the sterling pound despite easing Middle East tensions?
Hawkish Fed signals under Chair Kevin Warsh, including rising odds of a September rate hike, are outweighing reduced safe-haven demand from cooling Iran-related risks.
How are interest rate differentials currently affecting the performance of the British pound against the U.S. dollar?
U.K. gilt yields softened faster than U.S. Treasury yields, reducing sterling’s relative yield advantage and encouraging capital flows back into dollars.
How does the pair’s near-term outlook look?
It remains likely to keep trading range-bound between roughly 1.32 and 1.36, with US labour and inflation data likely to dictate the next directional move.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that GBP/USD has been confined to tight ranges around 1.3455, with a slight increase in near-term downside momentum. They expect any intraday decline to stay within 1.3430–1.3475. On a 1–3 week view, momentum has eased and a break of 1.3410 would confirm that the previously eyed 1.3555 resistance is unlikely to be tested soon.
Range-bound trade with softer momentum"24-HOUR VIEW: Two days ago, GBP edged higher to 1.3486 before closing at 1.3469 (+0.12%). When GBP was at 1.3470 in the early Asian session yesterday, we indicated that “while upward momentum has picked up slightly, it is more likely to result in GBP trading within a higher range of 1.3445/1.3495 rather than signaling the start of a sustained advance.” GBP subsequently traded within a relatively tight range of 1.3449/1.3479. This time around, there has been a slight increase in downward momentum, but any decline is likely to be contained within a range of 1.3430/1.3475."
"1-3 WEEKS VIEW: On Monday (03 Aug, spot at 1.3485), we indicated that “while strong momentum suggests further upside, it remains to be seen whether GBP can break and hold above the significant resistance at 1.3555.” After GBP struggled to extend its advance, we highlighted two days ago (05 Aug, spot at 1.3450) that “upward momentum has since eased, but there is still a chance, albeit not a high one, for GBP to rise toward 1.3555.” Upward momentum continues to ease, and from here, a breach of 1.3410 (no change in ‘strong support’ level) would mean that 1.3555 is not coming into view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
British Pound remains weaker as UK-US yields narrow, US Dollar strengthensGBP/USD extends its losses for the second consecutive day, trading around 1.3450 during the Asian hours on Friday. The pair depreciates as the British Pound (GBP) softens even as United Kingdom (UK) political risk fades.
Analysts at Scotiabank observe that "fundamentals appear to be somewhat less supportive for the GBP, as we note the renewed softening in yield spreads," tempering the near-term backdrop for the currency. However, they also highlight that "sentiment continues to improve" as "market participants continue to fade politically-motivated concerns following the recent political transition and arrival of PM Burnham." In their view, "the new PM’s commitment to fiscal responsibility appears to be much stronger than expected," helping to offset the drag from softer yield differentials and underpinning a more constructive tone toward the Pound. Read more...
British Pound steadies despite strong US jobs data ahead of NFPThe Pound Sterling (GBP) holds firm against the US Dollar (USD) during the North American session on Thursday, after US jobs data reinforces the thesis that the labor market remains solid ahead of Friday’s Nonfarm Payrolls report. The GBP/USD pair trades at 1.3466, after bouncing off daily lows of 1.3404.
The US Department of Labor reported that Initial Jobless Claims for the week ending August 1 came in at 199K, exceeding the prior week’s print but below estimates of 202K. Earlier, the Challenger job cuts showed that planned layoffs tumbled 27% to 33.429K in July, its lowest level since July 2024. Read more...
The Pound Sterling (GBP) holds firm against the US Dollar (USD) during the North American session on Thursday, after US jobs data reinforces the thesis that the labor market remains solid ahead of Friday’s Nonfarm Payrolls report. The GBP/USD pair trades at 1.3466, after bouncing off daily lows of 1.3404. Read More...
British Pound treads water above 1.3450 with markets awaiting US employment figuresThe British Pound (GBP) holds marginal losses against the US Dollar (USD) on Thursday, trading at 1.3460 at the time of writing, down from Wednesday's highs at 1.3486. This leaves the GBP/USD pair hovering within a 100-pip range, with bulls capped below 1.3500 while a weak US Dollar keeps downside attempts supported above the 1.3400 area. Read More...
British Pound loses ground to near 1.3450 as traders await possible US-Iran dealThe GBP/USD pair drifts lower to near 1.3460 during the early European trading hours on Thursday. Conflicting rhetoric from the US and Iranian officials about a potential deal fuels market concerns, dragging the British Pound (GBP) lower against the US Dollar (USD). The US Initial Jobless Claims report will be released later on Thursday. Read More...
Key Points:EUR/USD pulled back as traders focused on the disappointing Euro Area Retail Sales report.USD/CAD gained ground amid falling demand for commodity-related currencies. USD/JPY climbed towards the 158.50 level amid rising Treasury yields.
U.S. Dollar Gains Ground As Oil Prices Rally 4%
DXY 060826 4h Chart U.S. Dollar Index is moving higher as traders react to the Initial Jobless Claims report. The report indicated that 199,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 202,000.
Traders also react to the strong rally in the oil markets. Oil prices are up by +4% as Houthis attacked Saudi-backed forces in Yemen. Rising oil prices raised demand for safe-haven assets, which was bullish for the American currency.
Currently, U.S. Dollar Index is trying to settle above the resistance level at 99.85 – 100.00. In case this attempt is successful, U.S. Dollar Index will move towards the 50 MA at 100.35. A move above the 50 MA will push U.S. Dollar Index towards the resistance at 100.50 – 100.65.
EUR/USD Retreats As Euro Area Retail Sales Miss Estimates EUR/USD 060826 4h Chart EUR/USD pulled back as traders focused on the disappointing Euro Area Retail Sales report. The report indicated that Euro Area Retail Sales decreased by -0.3% month-over-month in June, compared to analyst forecast of +0.1%.
Traders also had a chance to take a look at the Factory Orders report from Germany. The report showed that Factory Orders increased by +3.1%, compared to analyst consensus of +0.3%.
EUR/USD attempts to settle below the support level at 1.1510 – 1.1525. If EUR/USD manages to settle below the 1.1510 level, it will move towards the 50 MA at 1.1479. A move below the 50 MA will push EUR/USD towards the support level at 1.1420 – 1.1435.
GBP/USD Remains Stuck Near Resistance At 1.3465 – 1.3480 GBP/USD 060826 4h Chart GBP/USD continues its attempts to settle above the resistance level at 1.3465 – 1.3480 despite rising oil prices. In the UK, traders focused on the Construction PMI report. The report indicated that UK Construction PMI improved from 38.4 in June to 44.7 in July, compared to analyst forecast of 40.
A successful test of the resistance at 1.3465 – 1.3480 will open the way to the test of the next resistance level at 1.3550 – 1.3565. RSI is in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
USD/CAD Attempts To Rebound
USD/CAD 060826 4h Chart USD/CAD gains some ground as traders focus on the pullback in precious metals markets. Other commodity-related currencies are losing ground in today’s trading session.
If USD/CAD settles above the 1.4025 level, it will head towards the 50 MA at 1.4055. In case USD/CAD climbs above the 50 MA, it will move towards the resistance level at 1.4125 – 1.4140.
USD/JPY Moves Higher As Treasury Yields Rise USD/JPY 060826 4h Chart USD/JPY gained ground as traders focused on rising Treasury yields. The yield of 2-year Treasuries settled near the 4.25% level, while the yield of 10-year Treasuries climbed above 4.67%. Rising Treasury yields are bullish for USD/JPY due to the ultra-dovish policy of the BoJ.
From the technical point of view, USD/JPY attempts to settle above the resistance level at 157.50 – 158.00. If USD/JPY settles above the 158.00 level, it will head towards the next resistance level at 159.50 – 160.00. It remains to be seen whether BoJ is ready to provide additional support to the Japanese yen in the near term.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
The US Dollar remains under pressure ahead of Friday's US Nonfarm Payrolls report. EUR/USD and GBP/USD are approaching major technical resistance levels after recent rallies. Payrolls data could determine whether the Federal Reserve keeps rates unchanged or signals another hike. US Dollar awaits Nonfarm Payrolls as markets reassess Fed outlook The US Dollar remained in focus on Thursday as traders positioned ahead of the July Nonfarm Payrolls report, widely regarded as the week’s most important economic release. Following a string of softer US economic indicators, investors have reduced expectations for another Federal Reserve rate increase, leaving Friday’s labour market data as the next major test for the greenback.
Recent declines in JOLTS job openings, weaker factory orders and softer private-sector hiring have fuelled speculation that the US labour market may finally be cooling after months of resilience. While Federal Reserve officials continue to insist that policy decisions remain data dependent, markets are increasingly looking for evidence that inflation pressures are easing enough to allow interest rates to remain unchanged.
A stronger-than-expected payrolls report would likely revive demand for the US Dollar by supporting higher Treasury yields and reinforcing expectations that the Fed could maintain a restrictive stance for longer. Conversely, another disappointing employment report could increase pressure on the dollar as investors scale back expectations for additional policy tightening.
EUR/USD Price Forecast: Euro Holds Near Seven-Week High as German Factory Orders Beat Forecasts EUR/USD remains one of the most closely watched currency pairs ahead of Friday’s US Nonfarm Payrolls report, with the euro holding near the 1.1550 level after mixed economic data from the Eurozone. Germany’s factory orders unexpectedly rose 3.1% in June, comfortably beating market expectations and signalling that Europe’s largest economy continues to show resilience despite elevated borrowing costs and global uncertainty. However, the positive manufacturing data was partly offset by weaker Eurozone retail sales, which fell 0.3% in June, highlighting that consumer demand remains fragile.
The mixed data has done little to derail the euro’s recent recovery, as investors continue to trim expectations for aggressive Federal Reserve tightening. With EUR/USD trading near its highest level since mid-June, markets are now looking to Friday’s US jobs report to determine whether the pair can extend gains toward the 1.1600 psychological level or retreat as the dollar attempts to recover.
GBP/USD Price Forecast: Pound Holds Firm Ahead of US Nonfarm Payrolls Report Sterling continues to outperform against the US dollar, with GBP/USD remaining close to recent highs as traders balance a resilient UK economy against growing uncertainty over US monetary policy. The Bank of England’s cautious approach to interest rates, combined with easing expectations for further Federal Reserve tightening, has provided steady support for the pound in recent sessions. Investors are also monitoring incoming UK economic data, including construction activity and labour market indicators, for fresh clues on whether the BoE will need to keep policy restrictive for longer.
However, the biggest catalyst for GBP/USD remains Friday’s US Nonfarm Payrolls report, which is expected to shape expectations for the Fed’s September meeting. A softer-than-expected payrolls reading could weaken the US dollar further and allow sterling to challenge the 1.3500 resistance zone, while stronger employment data may trigger a pullback across major currency pairs.
US Dollar Outlook: Nonfarm Payrolls Set to Decide the Dollar’s Next Move The US dollar remains the primary focus across global currency markets as investors position ahead of Friday’s closely watched Nonfarm Payrolls (NFP) report, the final major economic release before traders reassess the Federal Reserve’s September interest-rate outlook. The US Dollar Index (DXY) continues to trade below the psychologically important 100.00 level after retreating from recent highs, reflecting growing uncertainty over whether the Fed will need to tighten policy further to contain inflation. While Chair Kevin Warsh reiterated that policymakers remain committed to restoring price stability, recent economic data has painted a more mixed picture, prompting markets to dial back expectations for another immediate rate hike.
Recent labour market indicators have weakened the dollar’s momentum. ADP private payrolls growth slowed sharply in July, while JOLTS job openings and factory orders also disappointed, suggesting that hiring demand and business activity are beginning to cool. Investors will now look to Friday’s official employment report for confirmation on whether the slowdown is broadening across the US economy. A stronger-than-expected payrolls reading could revive expectations for another Fed rate increase and lift the dollar, while softer employment data would reinforce expectations that policymakers are nearing the end of the current tightening cycle.
Beyond the labour market, Treasury yields and broader risk sentiment remain key drivers of the greenback. The recent decline in oil prices following progress in US-Iran negotiations has eased inflation concerns, reducing pressure on the Federal Reserve to keep policy restrictive for longer. At the same time, improving investor appetite for risk has limited demand for the US dollar’s traditional safe-haven appeal. With the DXY sitting near a key technical support zone and major currency pairs approaching important resistance levels, Friday’s Nonfarm Payrolls report is widely expected to determine the next major direction for the US dollar and the broader foreign exchange market.
Why is the US Dollar in focus today?
The US Dollar is in focus ahead of the July US Nonfarm Payrolls report, which could significantly influence expectations for the Federal Reserve’s next interest rate decision.
Why is the Nonfarm Payrolls report important?
The monthly US employment report provides one of the clearest indicators of labour market strength and often influences Federal Reserve policy expectations, making it one of the biggest market-moving events each month.
What could move GBP/USD higher?
A weaker-than-expected US jobs report or stronger UK economic data could help GBP/USD break above key resistance near 1.3500.
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Pound-Dollar could extend its rally if Friday's US payrolls disappoint, while improving risk sentiment continues to weigh on the safe-haven US Dollar. The Pound to US Dollar (GBP/USD) exchange rate strengthened on Wednesday as softer US economic data and improving market sentiment reduced demand for the US Dollar.
At the time of writing, GBP/USD was trading around $1.3479, up approximately 0.2% on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.34616 (+0.08%)
Euro to Dollar (EUR/USD): 1.154449 (+0.11%)
Dollar to Yen (USD/JPY): 157.69239 (-0.02%)
DAILY RECAP:
The US Dollar (USD) weakened as improving market sentiment reduced demand for the safe-haven currency.
Investor confidence improved amid growing optimism that the US, Iran and Oman were moving closer to an agreement to reopen the Strait of Hormuz, with reports suggesting a deal could be announced within days.
The Greenback also came under additional pressure following another disappointing batch of US economic data.
The latest ADP employment report showed private-sector payrolls increased by just 44,000 in July, reinforcing expectations that Friday's non-farm payrolls report could also disappoint.
This was followed by a weaker-than-expected ISM services PMI, which suggested activity across the US services sector is beginning to lose momentum after a prolonged period of resilience.
Meanwhile, the Pound (GBP) edged higher after revised business survey data pointed to stronger-than-expected activity across the UK economy.
S&P Global's final services PMI for July was revised above the preliminary estimate, confirming a solid rebound in Britain's dominant services sector after June's slowdown.
The stronger survey encouraged investors to believe a more resilient private sector could give the Bank of England greater flexibility to tighten monetary policy later this year if required.
Near-Term GBP/USD Forecast: Looming US Payrolls Report to Drive the Next Move? Looking ahead, trading in the Pound to US Dollar exchange rate may become increasingly subdued as investors await Friday's US non-farm payrolls report.
The employment figures are expected to play a crucial role in shaping Federal Reserve interest rate expectations.
Another weak labour market report could further reduce expectations for a September rate hike and place additional pressure on the US Dollar.
Meanwhile, with little UK economic data scheduled before the weekend, Sterling is likely to take its lead from broader market sentiment, with an improving risk backdrop potentially offering further support.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Key Points:Friday's U.S. Nonfarm Payrolls report remains the week's biggest catalyst for FX markets.Traders are closely watching labor market data for clues on the Fed's September policy outlook.EUR/USD is testing long-term trendline resistance after recent gains.GBP/USD remains above key moving averages but needs a break above $1.3507 to extend higher.DXY is testing major trendline support below 100.00, with payrolls likely to determine the next move.
US Dollar News: Payrolls Countdown and Global Central Banks Shape FX Outlook The U.S. dollar’s value continues to fluctuate in anticipation of the U.S. Nonfarm Payrolls (NFP) report, the final significant market mover before all the markets take another look at the Federal Reserve’s overall policy outlook. Focused on NFP, is the most derived initial assessment of the potential impact on U.S. labor markets. A positive U.S. Nonfarm Payrolls report, coupled with positive detailed U.S. labor market employment data, will reinforce the viewpoint that the U.S. Federal Reserve will adopt a more accommodating monetary policy stance later this year. Based on the latest Reuters real-time reporting, markets are now primarily focused on U.S. labor market data after last week’s Federal Reserve meeting.
The U.S. dollar is stabilizing following Friday’s European Central Bank meeting in which it kept its main interest rate on overnight deposits at 2.25%, and repeated its data-dependent stance. Investors are now waiting on German industrial production and eurozone retail sales statistics, all of which will give insight into the potential for a recovery in domestic demand within eurozone countries, particularly in light of the first part of the year being subdued. In their recent meetings, various policymakers have continued to underline the fact that inflation is approaching the European Central Bank’s target of 2% and that further tightening of eurozone monetary policy appears to be warranted; although, at this juncture still may be upside risks to be concerned with.
Sterling is digesting last week’s Bank of England decision. Bank Rate was left at 3.75%. Investors are anxious to see what new data will show about the UK economy. In the lead up to this data, investors will be studying data related to labor market activity, consumer spending, and business activity, to get insight on whether easing inflation is sustainable without a sharper slowdown in growth. Alongside the collection of domestic indicators, early Friday’s U.S. payrolls report will remain the major driving force behind foreign exchange sentiment for the week ahead.
US Dollar Index (DXY) Technical Analysis: Dollar Index Tests Trendline Support Below 100.00 Dollar Index Price Chart – Source: Tradingview The US Dollar Index (DXY) continues dropping, currently trading at 99.76. It has been harshly rejected by 101.52, and has dropped below the psychological 100.00 zone and is currently challenging a key ascending trendline that can be found at 99.42. The index currently sits below the 50-day EMA ($100.38) while just holding above the 100-day EMA ($99.92), reflecting diminishing bullish sentiments. RSI has fallen to 36, moving into oversold territory, indicating that downside price momentum is losing speed.
A decisive break below 99.42 would expose 98.91 and 98.27, reinforcing a bearish outlook. However, if bears defend the trendline, the DXY could stage a recovery toward 100.36 and 100.82. For now, the larger bias remains cautiously bearish while the index trades below 100.00.
GBP/USD Technical Analysis: Sterling Consolidates After Strong Recovery Toward $1.3500 GBP/USD Price Chart – Source: Tradingview The GBP/USD is trading around $1.3459, holding within a consolidation range after rebounding sharply from $1.3274. The pair remains above both the 50-Day EMA ($1.3421) and the 100-Day EMA ($1.3400), suggesting the medium-term trend continues to favor buyers. Price is currently hovering near the 23.6% Fibonacci resistance at $1.3452, while RSI near 57 points to steady but moderating bullish momentum.
A breakout above $1.3507 would reinforce the bullish structure and expose $1.3559. On the downside, immediate support rests at $1.3417, followed by $1.3391 and $1.3363. Holding above the moving averages keeps the recovery intact, although a decisive move above $1.3507 is needed to confirm the next leg higher.
EUR/USD Technical Analysis: EUR/USD Bulls Challenge Major Trendline Resistance EUR/USD Price Chart – Source: Tradingview The EUR/USD pair, on the other hand, has been trying to rebound from its July base, and has been able to move past the 61.8% Fibonacci retracement level at 1.1501. For the time being, the EUR/USD pair is trying to test a key descending trendline near 1.1559, while trading comfortably above the 50-day EMA ($1.1490) and holding marginally beneath the 100-day EMA ($1.1543). RSI has strengthened to 62, confirming improving bullish momentum.
It must be noted, however, that the EUR/USD pair is still trading below the 1.1500 level. A sustained break below this level would expose the crucial support zone at the 1.1470 level. The critical descending trendline comes into the picture at the 1.1450 level. As long as the EUR/USD pair remains comfortably above the critical descending trendline, around the 1.1450 level, the bias is expected to shift to a bullish bias for the pair.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report GBP/USD edged higher to 1.3469 after briefly touching 1.3486, with short-term momentum only slightly firmer. The pair is expected to trade in a higher 1.3445–1.3495 range rather than embark on a strong rally. Over 1–3 weeks, there is still limited scope for a move toward 1.3555 as long as support at 1.3410 holds.
Pound holds gains within tight band"24-HOUR VIEW: Yesterday, we expected GBP to “consolidate between 1.3425 and 1.3470.” However, GBP edged higher to 1.3486 before closing slightly higher at 1.3469 (+0.12%). While upward momentum has picked up slightly, it is more likely to result in GBP trading within a higher range of 1.3445/1.3495 rather than signaling the start of a sustained advance."
"1-3 WEEKS VIEW: On Monday (03 Aug, spot at 1.3485), we indicated that “while strong momentum suggests further upside, it remains to be seen whether GBP can break and hold above the significant resistance at 1.3555.” Yesterday (05 Aug, spot at 1.3450), we indicated that “upward momentum has since eased, but as long as 1.3385 (no change in ‘strong support’ level) is not breached, there is still a chance, albeit not a high one, for GBP to rise toward 1.3555.” We continue to hold the same view, but we are revising the ‘strong support’ level to 1.3410 from 1.3385."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The British Pound (GBP) trades marginally lower at around 1.3460 against the US Dollar (USD) during the European trading session on Thursday. The GBP/USD pair is expected to trade sideways as investors await the United States (US) Nonfarm Payrolls (NFP) data for July, which will be released on Friday.
US payrolls seen posting modest July gain as Deutsche Bank flags participation risksEconomists at Deutsche Bank expect Friday’s July payrolls report to show a further, if modest, improvement in hiring. They look for "employment growth of +65k, modestly above June’s +57k reading".
On the labor market’s slack, Deutsche Bank forecasts that "the unemployment rate is forecast to remain at 4.2%, although risks are skewed towards a rounding up to 4.3% if labor force participation rebounds after last month’s sharp decline." Wage and hours data are expected to be steady, with "average hourly earnings… expected to increase by +0.3% month-on-month, unchanged from June, while average hours worked are forecast to hold at 34.3 hours."
Investors will pay close attention to the US NFP data as it will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook.
Ahead of the US NFP data for July, the ADP Employment Change data remained weaker-than-projected. On Wednesday, the ADP reported that the private sector created 44K jobs in July, fewer than estimates of 70K and the prior release of 98K.
Technical Analysis
GBP/USD trades at around 1.3460, keeping a mildly bullish near-term bias as spot holds above the 20-day exponential moving average (EMA) at 1.3404, but struggles to achieve a decisive breakout of the downward-sloping border of the Volatility Contraction Pattern (VCP) at around 1.3471.
The Relative Strength Index (RSI) around 57 shows constructive but not overextended momentum, suggesting scope for further gains as long as price stays supported on dips above the EMA.
On the topside, immediate resistance is located at the former trend line break price at 1.3471, and a decisive move above this barrier would open the way for a continuation of the recent upside. Looking up, the July 15 high at 1.3558 is the key hurdle. On the downside, initial support is seen at the 20-day EMA at 1.3404, followed by the July 28 low at 1.3274.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Nonfarm Payrolls FAQs Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
Scotiabank strategists Shaun Osborne and Eric Theoret note the British Pound (GBP) is slightly firmer versus the US Dollar (USD), with modestly better PMIs but a fading fundamental backdrop as 2-year spreads give back gains since late June. With limited data before the August 13 Q2 GDP release, they remain medium-term bullish, expecting GBP/USD to trade between 1.3420 and 1.3520 near term within a broader 1.31–1.35 range.
Sterling steady with medium-term bullish bias"The pound is entering Wednesday’s NA session with a fractional 0.1% gain vs. the USD. The Final services and composite PMI’s for July saw fractional improvements while indicating marginal growth overall."
"The release calendar is limited over the next week or so with no major data scheduled ahead of the preliminary Q2 GDP print on August 13."
"The fundamental picture for the GBP looks to have faded since mid-July, with 2Y spreads relinquishing much of their recovery from late June."
"The options market offers some reassurance, likely reflecting a continued improvement in sentiment towards the UK’s political situation."
"Neutral/bullish—the RSI is slightly above the neutral threshold at 50 and looks to have found a more solid footing in the aftermath of last week’s gains."
"The local range remains bound between late June support in the mid1.31s and mid-July resistance in the mid-1.35s. We remain medium-term bulls and look to a near-term range bound between 1.3420 and 1.3520."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Pound Sterling (GBP) advances some 0.12% on Wednesday as the US Dollar (USD) registers back-to-back days of losses, after US jobs data was softer than expected, even though business activity in the services sector continues to expand solidly. The GBP/USD pair trades at 1.3467. Read More...
British Pound grinds higher above 1.3450 ahead of US ADP Employment releaseThe GBP/USD pair posts modest gains near 1.3455 during the early European session on Wednesday, bolstered by softer US economic data and cooling US-Iran tensions. Traders brace for the US ADP Employment and ISM Services Purchasing Manager Index (PMI) reports, which are due on Wednesday. Markets might turn cautious later this week ahead of the US July jobs data. Read More...
British Pound weakens as US Dollar gains despite easing safe-haven demandGBP/USD edges lower after registering modest gains in the previous day, trading around 1.3450 during the Asian hours on Wednesday. The currency pair came under selling pressure as the US Dollar (USD) gained momentum, bolstered by a rebound in the benchmark 10-year US Treasury yield, which had dipped toward 4.61% on Tuesday. That initial slide in yields was driven by falling energy prices, which helped cool inflation fears and tempered expectations of a hawkish response from the Federal Reserve (Fed). Read More...
U.S. Dollar Moves Lower As Traders Focus On Job Market Data
DXY 050826 4h Chart U.S. Dollar Index pulls back as traders react to the weaker-than-expected ADP Employment Change report. The report indicated that private businesses added 44,000 jobs in July, compared to analyst forecast of 70,000.
Traders also had a chance to take a look at the ISM Services PMI report for July. The report showed that ISM Services PMI improved from 54.0 in June to 54.1 in July, compared to analyst consensus of 54.5. Numbers above 50 show expansion.
U.S. Dollar Index failed to settle above the resistance level at 99.85 – 100.00 and pulled back towards the 99.75 level. In case U.S. Dollar Index settles below 99.75, it will head towards the nearest support, which is located in the 99.25 – 99.40 range.
EUR/USD Tests The 1.1550 Level EUR/USD 050826 4h Chart EUR/USD is moving higher as traders focus on U.S. economic data. Rising oil prices did not put pressure on EUR/USD as traders believe that U.S. and Iran will reach a temporary deal soon.
EUR/USD moved above the resistance at 1.1510 – 1.1525 and is trying to settle above the 1.1550 level. In case EUR/USD manages to settle above 1.1525, it will head towards the next resistance, which is located in the 1.1600 – 1.1615 range. RSI is close to the overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge.
On the support side, a move below the 1.1500 level will push EUR/USD towards the 50 MA at 1.1460. If EUR/USD declines below the 50 MA, it will head towards the next support at 1.1420 – 1.1435.
GBP/USD Gains Ground As Rebound Continues GBP/USD 050826 4h Chart GBP/USD is trying to settle above the resistance level at 1.3465 – 1.3480 as traders focus on general weakness of the American currency.
In case GBP/USD manages to settle above the 1.3480 level, it will move towards the resistance at 1.3550 – 1.3565. On the support side, a move below the 1.3420 level will push GBP/USD towards the 50 MA at 1.3385.
USD/CAD Tests Support At 1.4010 – 1.4025
USD/CAD 050826 4h Chart USD/CAD is losing ground as traders focus on the strong rally in precious metals markets. Gold and silver are up by +4% amid rising demand for precious metals. Other commodity-related currencies are mixed in today’s trading session.
Currently, USD/CAD is trying to settle below the support level at 1.4010 – 1.4025. If USD/CAD manages to settle below 1.4010, it will head towards the next support at 1.3920 – 1.3935.
On the upside, USD/CAD needs to settle above the 50 MA at 1.4064 to gain upside momentum in the near term. In this case, USD/CAD will head towards the resistance level at 1.4125 – 1.4140.
USD/JPY Stays Below The 158.00 Level USD/JPY 050826 4h Chart USD/JPY remains stuck near resistance at 157.50 – 158.00 as traders are cautious after recent interventions from BoJ. Treasury yields are moving higher, but this move does not provide sufficient support to USD/JPY.
If USD/JPY manages to settle above the 158.00 level, it will head towards the next resistance, which is located in the 159.50 – 160.00 range. A move above the 160.00 level will push USD/JPY towards the 50 MA at 160.84.
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The currency markets have no major announcements to focus on today, so ranges are likely to be watched by most.
EUR/USD Technical Analysis
EURUSD trades around 1.15462, extending its climb to fresh highs above both the 50-period and 200-period EMAs. Source: TradingView. The euro looks like it is testing the 1.1560 level, an area that had been important previously on a swing high, so we’ll have to see if we can break above there. It certainly looks like it’s struggling, but I also recognize that recently the 1.15 level had been support. Typically speaking, this is a pretty choppy pair, and when we zoom out on the longer-term charts, we start to see that we are approaching an area that historically has seen a lot of chop and noise. So a little bit of a pullback here would not be surprising to me at all. Certainly, we are seeing interest rates in America try to turn back around to the upside during the early part of the session, so something worth keeping an eye on.
USD/CHF Technical Analysis USDCHF trades around 0.80930, holding below the 0.81000 level and both its 50-period and 200-period EMAs. Source: TradingView. Currently, the US dollar and the Swiss franc seem to be very consolidated, and this is typical for this pair. But the interest rate differential most certainly favors the US dollar, and carry traders will be attracted to the wide spread here that they collect at any close of the day, especially with a lot of traders on Wednesday getting triple swap. Looks like the area right around 0.81 continues to be a magnet for price.
GBP/USD Technical Analysis
GBPUSD trades around 1.34708, pushing back toward its recent high above both the 50-period and 200-period EMAs. Source: TradingView. And finally, the British pound is stretching towards the 1.35 level. This is a lot like the euro in the sense that we had reached close to a swing high and failed a bit. Rates in the United States climbing a little bit early may provide a little bit of a headwind as well. 1.35 being broken would obviously be a strong headline because of the large round psychological number. It could bring in more buyers; we’d have to wait and see.
Currently, the 1.3435 level or so looks to be support. Could be range-bound. Today has no major economic announcements of any serious consequence. And with that, it would make sense if traders were a little bit range-bound and indecisive.
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GBP/USD Price Forecast: Trades around 1.3450; bulls retain control above 100-hour SMAThe GBP/USD pair gains follow-through positive traction for the second straight day and sticks to modest intraday gains through the first half of the European session on Wednesday. Spot prices, however, lack bullish conviction and currently trade just above mid-1.3400s, up less than 0.10% for the day.
The latest optimism over a diplomatic resolution to end the five-month-old war in the Middle East and the reopening of the Strait of Hormuz dragged crude oil prices to a four-week low, easing inflation fears. Traders were quick to react and trimmed their bets for an imminent Fed rate hike. This, in turn, undermines the safe-haven US Dollar (USD), which is seen acting as a tailwind for the GBP/USD pair. Read more...
British Pound grinds higher above 1.3450 ahead of US ADP Employment releaseThe GBP/USD pair posts modest gains near 1.3455 during the early European session on Wednesday, bolstered by softer US economic data and cooling US-Iran tensions. Traders brace for the US ADP Employment and ISM Services Purchasing Manager Index (PMI) reports, which are due on Wednesday. Markets might turn cautious later this week ahead of the US July jobs data.
The US JOLTS Job Openings declined to 7.359 million in June, compared to the 7.537 million openings reported in May, the US Bureau of Labor Statistics showed on Tuesday. This figure came in below the market expectation of 7.4 million. Read more...
British Pound weakens as US Dollar gains despite easing safe-haven demandGBP/USD edges lower after registering modest gains in the previous day, trading around 1.3450 during the Asian hours on Wednesday. The currency pair came under selling pressure as the US Dollar (USD) gained momentum, bolstered by a rebound in the benchmark 10-year US Treasury yield, which had dipped toward 4.61% on Tuesday. That initial slide in yields was driven by falling energy prices, which helped cool inflation fears and tempered expectations of a hawkish response from the Federal Reserve (Fed).
However, the Greenback may face further challenges due to easing safe-haven demand amid building diplomatic momentum around a potential agreement to reopen the Strait of Hormuz. Qatari officials announced on Tuesday that an interim proposal had been drafted, with both Washington and Tehran signaling tangible progress toward restoring access to the critical maritime transit route. This diplomatic breakthrough follows US President Donald Trump’s decision to suspend planned military strikes against Iran, choosing instead to give negotiations space while maintaining his call for the immediate reopening of the waterway. Read more...
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The GBP/USD pair gains follow-through positive traction for the second straight day and sticks to modest intraday gains through the first half of the European session on Wednesday. Spot prices, however, lack bullish conviction and currently trade just above mid-1.3400s, up less than 0.10% for the day.
The latest optimism over a diplomatic resolution to end the five-month-old war in the Middle East and the reopening of the Strait of Hormuz dragged crude oil prices to a four-week low, easing inflation fears. Traders were quick to react and trimmed their bets for an imminent Fed rate hike. This, in turn, undermines the safe-haven US Dollar (USD), which is seen acting as a tailwind for the GBP/USD pair.
Investors, however, seem hesitant to place aggressive directional bets and opt to wait for further developments surrounding the US-Iran conflict. Furthermore, the closely watched US Nonfarm Payrolls (NFP) report on Friday would be looked for more cues about the Fed's policy path. The outlook, in turn, will play a key role in influencing the near-term USD price dynamics and providing fresh impetus to the GBP/USD pair.
From a technical perspective, spot prices keep the near-term tone constructive while above the 200-hour Simple Moving Average (SMA). Moreover, momentum indicators are mildly supportive, with the Relative Strength Index (RSI) near 55 and the Moving Average Convergence Divergence (MACD) marginally positive near the zero line. This suggests steady bullish pressure as long as the GBP/USD pair remains above the underlying average.
Hence, any corrective pullback is more likely to attract fresh buyers near the 1.3400 mark, which should limit the downside near the 200-period SMA pivotal support around 1.3379. A convincing break below, however, would weaken the bullish bias and open the way to deeper losses. On the top side, bulls may look to the weekly top, around the 1.3500 psychological mark, as a reference point for potential resistance should the GBP/USD pair extend its advance.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD 1-hour chart
Pound Sterling FAQs The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann analysts report GBP/USD traded quietly between 1.3423 and 1.3456 after a prior spike to 1.3506. They expect near‑term consolidation in a 1.3425–1.3470 band. Over 1–3 weeks, momentum has eased but a move toward 1.3555 is still possible as long as 1.3385 holds, while the broader 1–3 month view remains for range trading between 1.3210 and 1.3655.
Range trade with residual upside risk"24-HOUR VIEW: Two days ago, GBP rose to 1.3506 and then pulled back sharply. Yesterday, when GBP was at 1.3430, we highlighted that “the pullback has scope to extend but given that there has been no clear increase in downward momentum, any decline is likely part of a lower range of 1.3400/1.3475.” The subsequent price movements did not unfold as expected. GBP traded in a relatively quiet manner between 1.3423 and 1.3456. The price movements are likely part of a range-trading phase. Today, we expect GBP to trade between 1.3425 and 1.3470."
"1-3 WEEKS VIEW: Our most recent narrative was from Monday (03 Aug, spot at 1.3485), when we indicated that “while strong momentum suggests further upside, it remains to be seen whether GBP can break and hold above the significant resistance at 1.3555.” Upward momentum has since eased, but as long as 1.3385 (no change in ‘strong support’ level) is not breached, there is still a chance, albeit not a high one, for GBP to rise toward 1.3555."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Key Points:Markets are focused on Friday's U.S. Nonfarm Payrolls report for fresh Fed policy clues.ADP employment, jobless claims, and labor market data will shape September rate expectations.Softer U.S. economic data has reduced expectations for additional Fed tightening.EUR/USD watches eurozone data as traders assess the ECB's policy outlook.GBP/USD remains supported ahead of key UK labor and growth data while DXY tests major technical support.
US Dollar News: NFP Forecasts and Fed Outlook Drive FX Markets Changes in Federal Reserve policy are the primary drivers of U.S. Dollar trading as market participants analyze upcoming U.S. Labor market data in advance of the July non-Farm Payrolls. This week’s data points include the release of the ADP private sector employment report on Wednesday, the weekly jobless claims report due out on Thursday, and the Friday release of the Payrolls report.
Current estimates suggest the U.S. economy added approximately 95,000 jobs in July, down from 121,000 in June, and the unemployment rate is likely to increase to 4.4% from 4.3%. Earlier this week the job openings data from the JOLTS report for June fell and added evidence that Labor market demand is cooling. Given the recent softer data and lower oil prices, the futures market pegged the likelihood of a Fed rate hike in September at 59% down from the 67% probability earlier this week.
The Euro is benefitting from waning concerns regarding imported inflation in the Eurozone after a dip in energy prices. Market focus is still on the ECB’s decision to leave the deposit rate at 2.25% last month, but market participants are looking to the German release of Industrial Production and Eurozone Retail Sales data for indications on the possible stabilization of the economy. ECB officials stress a meeting by meeting focus as inflation nears the 2% target with the possible re-ignition of price inflation from geopolitical concerns. Economic data of a Eurozone negative growth signal would also support the case for a rate pause.
Sterling is drawing support from falling energy prices after a recent positive engagement between the United States, Iran, and Qatar, which has eased concern about protracted supply disruptions across the Middle East. With the Bank of England having decided on leaving the Bank Rate at 3.75% last week, the focus has now turned to the upcoming UK labour market and growth data.
Investors are watching the UK data to see if inflation is trending down without a substantial negative effect on activity, while the general sentiment in the markets is being influenced by the US Payroll data due on Friday and the changing outlook on US Federal Reserve policy.
US Dollar Index (DXY) Technical Analysis: Bears Eye Trendline Breakdown Below 99.95 Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Index (DXY) is trading at 99.84, below the 50-day EMA at 100.41, and supports the long-term ascending trendline at 99.42. The Index has recently attempted to recover the 100.27-100.53 Fibonacci resistance zone. This suggests that price action remains in a downtrend.
The 100-day EMA is located at 99.92, and has offered support. A daily close below the 99.42 long-term trendline support suggests stronger price action to the downside, with 98.76 and 97.95 as potential price targets. Bullish price action would require price action to close above 100.27. Further price targets would then be 100.80 and 101.17.
The RSI is presently at 37 and suggests that price action on the DXY is in a downtrend. Until the Index closes above 100.27, the RSI suggests that price action will continue to favor the downside.
GBP/USD Technical Analysis: Bulls Retain Control Above Key Fibonacci Support
GBP/USD Price Chart – Source: Tradingview After a strong bounce from the 1.3274 swing low, GBP/USD is consolidating near 1.3456. The bullish structure is further strengthened by the GBP/USD pair trading above the 50-EMA and 100-EMA, which are presently at 1.3409 and 1.3392, respectively.
Currently, price action is maintaining a bullish structure as it is above the 23.6% Fibonacci level at 1.3452. Price action above there opens the possibility of a move higher toward 1.3506, with a break above opening up 1.3559. Price action below there opens the possibility of a move toward 1.3418, then 1.3390, and finally 1.3363. Losing any of these levels would be a negative development for the current bullish structure.
RSI is near 58, indicating positive momentum without overbought conditions. While the pair may consolidate after its recent rally, holding above 1.3418 keeps the broader bias tilted to the upside.
EUR/USD Technical Analysis: Bullish Recovery Faces Major Trendline Resistance EUR/USD Price Chart – Source: Tradingview EUR/USD is currently trading around 1.1534, from where a significant bullish momentum pushed price to the 50 day MA, and now it is trading in a portion of the resistance zone at 1.1510-1.1559. Currently, price is also testing the lower boundary of the descending trendline from early 2026.
1.1559 will be the next level of resistance, and after that 1.1622 and 1.1668 will be next. Bulls will eventually need to overcome the trendline to confirm a bullish reversal, which would then create a path to the 1.1703 level. The lower boundary of the resistance zone is at 1.1510, followed by 1.1474 and then the strong level of support at 1.1439.
The bullish momentum has been confirmed by the RSI, which has recently broken above 60. As long as the price is trading above.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
US Dollar Talking Points: The carry trade in USD/JPY has been building for more than five years now and the Japanese Yen weakness that’s seen the pair rise by more than 50% over that time is a large point of imbalance across global foreign exchange markets. The Bank of Japan has no dire need for near-term rate hikes, as Japanese inflation is currently at 1.6-1.7%. They also have an inflation target of 2% but unlike the US, inflation is currently subdued below that waypoint. Nonetheless, US Treasury Secretary Scott Bessent hinted that Japanese officials should look to tighter policy following the posture around interventions last week after the FOMC and BoJ rate decisions.
It’s truly a conundrum for the Bank of Japan. On one hand, they’d probably prefer it if the Japanese Yen didn’t weaken dramatically against global currencies, like the US Dollar. But on the other, there’s no pressing demand for a rate hike as their inflation levels remain below the bank’s 2% target.
Allowing the currency to fall rapidly runs the risk of bringing on unsavory levels of inflation, which would require rate hikes and, in-turn, a threat to Japanese growth. And for a country with an aging and declining population who spent decades struggling with deflation and disinflation, risking that growth is a pretty unsavory concept particularly when there’s not a massive current demand for such.
On the part of the United States, however, there’s a couple of reasons that they would want to see some form of action. The USD/JPY spot rate sits near recently-established 40-year highs. As the second largest component of the DXY basket, the significant JPY weakness of the past five years has kept the value of DXY elevated, which makes trade a more difficult venture for the United States as exported products are more expensive and imports are relatively cheaper.
But perhaps the biggest risk – is that if Japanese policymakers wanted to continue to try to have their cake and eat it too, by using interventions to run stops on market participants while trying to draw some artificial line in the sand, without hiking rates to address the fundamental divergence between the two economies rate policies – that would probably entail Japan selling US Treasuries. And that would mean even higher US Treasury yields, and we’ve already seen the 30-year bond push up to a fresh 19-year high.
So this is really a story wrapped in intrigue and it can have repercussions far and wide depending on how aggressively it spins out of control.
That global carry trade is, in essence, a form of leverage. We saw what happens when just some of that leverage gets taken out back in July of 2024, when the BoJ intervened on the morning of a US CPI print and despite markets finally getting the confirmation they needed that rate cuts were on the way, the Nasdaq 100 put in a bearish engulf and then sold off with aggression over the next few weeks.
The reason was some of that leverage brought upon by the carry trade was taken out as USD/JPY unwound, and that hit levered markets like high flying AI tech stocks until calm started to return on the morning of August 5th.
We’re not at that point yet, but if Scott Bessent has his way the situation could produce unwelcome and unexpected repercussions fairly soon.
Where this matters for the US Dollar – it’s been obvious for some time that the current administration would like a weaker USD. Trump has said as much, extolling the benefit of a weak currency for exporting goods while making domestic goods more competitive on a cost basis. Those efforts have largely fallen flat over the past year-and-change as the USD is roughly flat since last April, and a big reason why is the run in USD/JPY which extended after last year’s election of Sanae Takaichi, thereby putting both central banks in a precarious spot.
For now, it’s difficult to get too excited about USD/JPY above 160.00 as that’s the type of level that may evoke another intervention or a threat of such. Meanwhile, the fundamental bias remains tilted to the long side of the pair and thusly, for the US Dollar as a whole, there’s a lean towards trend strategies for short-term strength and breakout strategies for broader weakness.
US Dollar Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview USD/JPY
Last week was one of the largest red bars in USD/JPY since that July 2024 episode, and already for this week it looks like bulls are starting to make a return. It’s still too early to say that the dust has settled but it also highlights what I was talking about in the weekend video, where interventions at or around that 155.00 level seem to make little sense. Thus, we’ve seen buyers return to bid the dip but what remains to be seen is whether there is another swing of intervention above 158 or perhaps upon a test of the 160.00 handle.
USD/JPY Weekly Price Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD Despite the Euro being a 57.6% allocation of the DXY basket it really does feel like the larger currency pair is along for the ride.
This makes sense if we consider that USD/JPY is up more than 50% over the past five years – and given that the only thing that can actually push price in a real market is demand it highlights that there’s still an imbalance of longs v/s shorts. And when that comes into question, even just a little bit, that USD-selling could happen across currency pairs and not just against the Japanese Yen.
I talked about this in last week’s webinar and I reiterated it this week. At this point it’s the 1.1500 level in EUR/USD that’s held the lows now for two consecutive days and there’s bullish structure in place down to the Friday swing low of 1.1455.
EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD Cable built in a similar falling wedge into the Fed last week, and the response there was perhaps even more emphatic as buyers pounced on the bullish reversal. The challenge now for the pair is that 1.3500 level but there’s higher-low support potential around 1.3390 for bullish continuation scenarios.
GBP/USD Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview USD/CAD USD/CAD looks somewhat calm on a relative basis, following last week’s test and hold a the 1.4000 level. Following that test on Thursday, we’ve had higher lows, illustrating an element of bullish anticipation as buyers have stepped in with a bit more aggression over the past couple of days. This keeps the door open for short-term strength and for those looking for USD-strength, this may be a less chaotic backdrop than what showed in USD/JPY and perhaps a bit cleaner than EUR/USD or perhaps even GBP/USD which are vying for possible bullish trend scenarios.
USD/CAD Daily Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
Scotiabank’s Global FX Strategy team notes that Sterling remains modestly firmer, with GBP/USD continuing to pivot around long-term moving averages near 1.34. Short-term technicals are described as neutral to bullish, with last week’s rise and trend oscillators hinting at upside potential toward 1.3555/1.3560, while support is identified around 1.3390/1.3400.
Sterling holds near key averages"Sterling is modestly firmer on the session but trading is limited, with no UK data reports this morning to drive volatility. UK Gilts are underperforming European bonds somewhat but EUR/GBP is largely stable."
"Neutral/bullish—Sterling continues to chop around the 100- and 200-day moving averages (both close to 1.34) as the flat, broad range trade in place over the past few months continues to play out."
"A solid rise in Cable last week and bullish leaning (but still weak) trend oscillators suggest some upside potential for the pound, however."
"Gains through the low 1.35 zone should allow spot to retest the recent peak around 1.3555/60. Support is 1.3390/00."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Pound Sterling (GBP) recovers some ground against the US Dollar (USD) on Tuesday, up 0.14%, as US jobs data was softer than expected but confirmed the strength of the labor market, with layoffs being little changed. The GBP/USD pair trades at 1.3451 after rebounding from 1.3419. Read More...
British Pound finds footing at 1.3420 with markets awaiting US Job Openings dataThe British Pound (GBP) edges higher against the US Dollar (USD) on Tuesday, reaching session highs above 1.3440 after finding support at the 1.3420 area earlier on the day. A mild risk appetite amid market hopes of a negotiated breakthrough in Iran and investors’ cautiousness ahead of key US labour market releases are keeping US Dollar bulls subdued on Tuesday. Read More...
British Pound weakens below 1.3450 as US-Iran uncertainty boosts safe-haven US DollarThe GBP/USD pair loses ground to near 1.3425 during the early Asian session on Tuesday. Uncertainty surrounding US-Iran talks drives traders toward a safe-haven currency such as the US Dollar (USD) against the British Pound (GBP). All eyes will be on the US July jobs data, which is due later on Friday. Read More...
Key Points:EUR/USD gained ground as traders focused on U.S. job market data. GBP/USD moved higher, supported by falling Treasury yields. USD/JPY made an attempt to settle above the 158.00 level as the market stabilized after recent intervention.
U.S. Dollar Moves Lower As JOLTs Job Openings Miss Estimates
DXY 040826 4h Chart U.S. Dollar Index is losing ground as traders react to the weaker-than-expected JOLTs Job Openings report. The report indicated that JOLTs Job Openings declined from 7.537 million (revised from 7.594 million) to 7.359 million, compared to analyst forecast of 7.4 million.
In case U.S. Dollar Index pulls back below the 99.85 level, it will head towards the nearest support, which is located in the 99.25 – 99.40 range. On the upside, a move above the 100.00 level will push U.S. Dollar Index towards the resistance at 100.50 – 100.65.
EUR/USD Tests The 1.1525 Level
EUR/USD 040826 4h Chart EUR/USD gains ground as traders focus on U.S. job market data and react to U.S. Factory Orders report. The report showed that Factory Orders decreased by -0.3% month-over-month in June, compared to analyst consensus of +0.2%. The weaker-than-expected report put additional pressure on the American currency.
EUR/USD continues its attempts to settle above the resistance level at 1.1510 – 1.1525. In case EUR/USD manages to settle above the 1.1525 level, it will head towards the next resistance at 1.1600 – 1.1615.
GBP/USD Gains Ground As Treasury Yields Fall GBP/USD 040826 4h Chart GBP/USD is moving higher as traders focus on the strong pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.20% level, while the yield of 10-year Treasuries settled below 4.63%.
The nearest resistance level for GBP/USD is located in the 1.3465 – 1.3480 range. A successful test of this level will push GBP/USD towards the next resistance level at 1.3550 – 1.3565. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
USD/CAD Moves Higher As Rebound Continues USD/CAD 040826 4h Chart USD/CAD continues to rebound despite the better-than-expected Manufacturing PMI report from Canada. The report showed that Manufacturing PMI improved from 53.0 in June to 53.5 in July, while analysts expected that it would drop to 50.2. Numbers above 50 show expansion.
Currently, USD/CAD is trying to settle above the 50 MA at 1.4067. In case this attempt is successful, USD/CAD will move towards the nearest resistance level at 1.4125 – 1.4140.
On the support side, a successful test of the support at 1.4010 – 1.4025 will push USD/CAD towards the next support level at 1.3920 – 1.3935.
USD/JPY Tests Resistance At 157.50 – 158.00 USD/JPY 040826 4h Chart USD/JPY is moving away from recent lows as the market stabilizes after major intervention. Treasury Secretary Scott Bessent said that a stable yen was important for the U.S. and for the entire region of Asia. He added that U.S. was in close contact with Japan.
From the technical point of view, USD/JPY attempts to settle above the resistance level at 157.50 – 158.00. If USD/JPY manages to settle above 158.00, it will head towards the next resistance level at 159.50 – 160.00. A move above the 160.00 level will push USD/JPY towards the 50 MA at 161.57. It remains to be seen whether Bank of Japan is ready for another intervention in the near term.
On the support side, USD/JPY needs to settle below the support at 154.50 – 155.00 to gain additional downside momentum in the near term. RSI has recently moved back into moderate territory, so there is enough room to gain momentum.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
