Track market-moving stories before they get noisy

The pound just closed its strongest week against the dollar in months, ending July up more than 1% and holding just below $1.35. Two factors are driving the move. First, political risk has faded: the UK appointed its seventh prime minister in a decade, and the new government’s pledge of fiscal discipline has reassured markets. Second, the Bank of England surprised with a more hawkish tone than expected—policymakers voted 6-3 to hold rates steady, but three members pushed for a hike, a stronger signal of resolve than markets had priced in.

The dollar, meanwhile, has had a rough few sessions. Following the Fed’s decision to hold rates for a fifth consecutive meeting, Chair Kevin Warsh offered little clarity on the path ahead, leaving investors questioning whether the central bank is doing enough to bring inflation back to target. The dollar index posted its worst weekly performance in three months as a result, though roughly two-thirds of the market still expects a September hike.

With both central banks striking cautiously hawkish tones but offering little forward guidance, GBP/USD’s next move looks set to hinge on incoming US labor data.

Technical Analysis of GBP/USD

As the GBP/USD chart shows, the pair has been compressing into a broad symmetrical triangle since January’s highs, with price now converging near the 0.382 Fibonacci retracement around 1.3427, exactly where the two trendlines meet. This narrowing structure suggests a decisive breakout may be approaching after months of range-bound trading.

Bullish Scenario

Should buyers push through the descending trendline and reclaim the 0.5 Fibonacci retracement near 1.3510, the path would open toward the 0.618 level around 1.3594, with a stronger move potentially targeting the 1.3865 highs from January if fundamental momentum aligns.

Bearish Scenario

Conversely, a break below the ascending trendline would expose the 1.3200 support zone, with a more significant breakdown risking a retest of the 1.3155 low that anchored this entire triangle formation.

With price coiled right at the apex of this multi-month triangle, and both the Fed and incoming labor data serving as potential catalysts, GBP/USD looks primed for its next major directional move—will the pound extend its recent strength, or is the dollar poised for a comeback?

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United Overseas Bank’s (UOB) Quek Ser Leang notes GBP/USD reversed after an overbought spike to 1.3506, closing lower at 1.3434. The strategist sees scope for the pullback to extend but mainly within a 1.3400–1.3475 range, with a sustained drop below 1.3400 unlikely. Over 1–3 weeks, strong momentum still suggests upside, though odds of a break above 1.3555 have diminished.

Overbought rally gives way to range"24-HOUR VIEW: While we indicated yesterday that the sharp rise in GBP from last Friday “has scope to extend,” we pointed out that “overbought conditions could limit any gains to a test of 1.3520.” We were also of the view that “the major resistance at 1.3555 is not expected to come into view.” However, after popping to a high of 1.3506 on the open, GBP pulled back to a low of 1.3418. GBP closed 0.35% lower at 1.3434. This time around, 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. In other words, a sustained drop below 1.3400 is unlikely."

"1-3 WEEKS VIEW: GBP rose sharply last week. Yesterday (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.” We added, “to sustain the momentum, GBP must hold above the ‘strong support’ level, currently at 1.3385.” While we continue to hold the same view, after the subsequent pullback, the odds of GBP rising to 1.3555 have diminished."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

The British pound (GBP) faces selling pressure against its major currency peers, trading 0.1% lower at around 1.3420 against the US Dollar (USD) during the European trading session on Tuesday.

Pound Sterling Price Today The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD0.03%0.08%0.35%0.12%-0.22%0.13%-0.01%EUR-0.03%0.03%0.36%0.08%-0.26%0.08%-0.02%GBP-0.08%-0.03%0.32%0.06%-0.29%0.04%-0.06%JPY-0.35%-0.36%-0.32%-0.25%-0.58%-0.27%-0.25%CAD-0.12%-0.08%-0.06%0.25%-0.33%-0.01%-0.11%AUD0.22%0.26%0.29%0.58%0.33%0.33%0.19%NZD-0.13%-0.08%-0.04%0.27%0.01%-0.33%-0.09%CHF0.00%0.02%0.06%0.25%0.11%-0.19%0.09% 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).

Pound struggles for support as BoE hawkish split meets dovish Bailey toneAnalysts at Rabobank highlight that “GBP net shorts bounced higher last week ahead of the BoE policy meeting,” underscoring renewed speculative pressure on the Pound. They note that, “despite a more hawkish voting split than the market had expected from the MPC, Governor Bailey’s tone was dovish,” which in their view “suggest[ed] little support for the pound from the BoE.” This combination of positioning and communication leaves Sterling lacking clear policy backing despite the ostensibly firmer stance implied by the vote split.

In BoE Bailey’s last week's press conference, he said, “Please do not leave this room thinking that the Bank of England is edging towards a hike, because frankly, there’s nothing in what I said, and I think any of us have said, along those lines,” Reuters reported.

The selling pressure in the GBP/USD pair is also driven by the higher US Dollar. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly higher to near 100.05. The USD Index recovered sharply on Monday after posting a fresh two-week high at 99.42.

The Greenback extends Monday’s recovery further as investors turn cautious ahead of key United States (US) economic releases.

Investors will pay close attention to the US Nonfarm Payrolls (NFP) data for July on Friday to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy. Fed’s new policy “say no to so-called forward-guidance” has increased investors’ dependency on economic releases to project the Fed’s next policy move.

Later in the day, investors will focus on the US JOLTS Job Openings data for June, which will be published at 14:00 GMT. The data is expected to arrive at 7.45 million fresh jobs, slightly lower than 7.594 million in May.

GBP/USD technical analysis

GBP/USD trades slightly lower at around 1.3423, but is holding above the 20-day exponential moving average (EMA) at 1.3389 and retaining a mildly bullish near-term bias. The pair has reclaimed short-term trend support, while the downward resistance trend line, with a key break reference at 1.3473, now caps the topside.

The Relative Strength Index (RSI) at roughly 54 leans constructive without signaling overbought conditions, suggesting scope for further gains while acknowledging nearby overhead supply.

On the topside, immediate resistance is seen at the trend-line break area near 1.3473, ahead of the psychological level at 13500. On the downside, initial support is provided by the 20-day EMA at 1.3389, which should act as a cushion on pullbacks; a daily close back below this level would weaken the current bullish tone and expose it to the July 28 low at 1.3274.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

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.

The Pound Sterling (GBP) retreats some 0.27% on Monday as the Greenback recovers some ground amid a pause in US strikes on Iran, while both parties are expected to resume negotiations aimed at securing a rapid deal. The GBP/USD pair trades at 1.3439, after reaching a daily high of 1.3506. Read More...

British Pound eases to 1.3450 area following downwardly revised Manufacturing PMI dataThe British Pound (GBP) is trimming previous gains against the US Dollar (USD) on Monday, returning to the mid-range of the 1.3400s down from fresh seven-week highs, above 1.3500 earlier on the day. Weaker-than-expected UK manufacturing data added pressure on the Pound, which rallied at the Asian session opening, amid news of a halt to the hostilities in Iran. Read More...

British Pound struggles despite easing risk aversionGBP/USD holds losses after three days of gains, trading around 1.3470 during the Asian hours on Monday. The currency pair may regain its footing as the US Dollar (USD) struggles under easing risk aversion, driven by hopes of a diplomatic breakthrough between the United States (US) and Iran following reports that US President Donald Trump held off on planned strikes. Read More...

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United Overseas Bank’s (UOB) Quek Ser Leang highlights GBP/USD’s volatile session, with a spike from 1.3401 to 1.3481 and scope for further gains toward 1.3520, though overbought conditions may cap upside. For the next 1–3 weeks, he sees strong momentum but questions whether the pair can break and hold above 1.3555, with support around 1.3385.

Upside momentum tempered by overbought"24-HOUR VIEW: GBP traded in a relatively volatile manner last Friday, dropping to a low of 1.3401 before rising sharply to close at 1.3481 (+0.13%). While the sharp rise has scope to extend, overbought conditions could limit any gains to a test of 1.3520. The major resistance at 1.3555 is not expected to come into view. Support is at 1.3450; a breach of 1.3425 would indicate that the current upward pressure has eased."

"1-3 WEEKS VIEW: GBP broke above the significant resistance at 1.3400 last week and soared to 1.3494. While strong momentum suggests further upside, it remains to be seen whether GBP can break and hold above the next significant resistance at 1.3555. To sustain the momentum, GBP must hold above the ‘strong support’ level, currently at 1.3385"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

MUFG analysts say the Bank of England’s hawkish hold is supportive for Pound Sterling, but Governor Bailey’s pushback against an imminent rate hike limits how far GBP/USD can rise. The Pound to US Dollar (GBP/USD) exchange rate ended July at 1.3482, up 1.75% over the month after recovering sharply from lows near 1.3220.

The pair gained in each of the final three sessions, including a 0.70% rise on 30 July and a further 0.16% advance on Friday.

MUFG’s reading of the Bank of England meeting is supportive, but not outright bullish.

Its sentiment analysis describes the decision as a “hawkish hold”, with policymakers still focused on inflation persistence, second-round effects and the risk that higher energy prices feed into domestic inflation.

At the same time, Governor Andrew Bailey made clear that the Bank was not preparing markets for an immediate rate rise.

That leaves Pound Sterling with some support from a still-restrictive policy stance, but less room to rally on expectations of rapid tightening.

MUFG Finds the MPC Modestly Hawkish, but Bailey Pushes Back Against a Near-Term Hike

MUFG analysed both the written contributions from Monetary Policy Committee members and the Governor’s press conference using its own textual sentiment framework.

The written material produced a score of 23.3, compared with 17.0 for the press conference, where minus 100 represents the strongest dovish conviction and plus 100 the strongest hawkish conviction.

That gap matters.

The statement itself leaned hawkish, but Bailey’s remarks were more restrained.

“The latest member contributions point to a hawkish hold stance,” MUFG says.

“While members acknowledged softer growth dynamics and a gradually easing inflation backdrop, members remained focused on inflation persistence, second-round effects and the potential inflationary consequences of higher energy prices and geopolitical risks.”

The split across the Committee was also clear.

MUFG assigned Catherine Mann a hawkish score of 80, followed by Huw Pill at 71 and Megan Greene at 65.

At the other end of the spectrum, Swati Dhingra scored minus 28 and Alan Taylor minus 33.

The remaining members sat closer to neutral, leaving the Committee “modestly hawkish overall”.

The most notable shift came from Mann, whose contribution placed greater emphasis on energy-price volatility, geopolitical uncertainty and the inflation risks coming from the Middle East.

Yet the press conference softened the overall message.

“Importantly, however, the press conference delivered a more balanced message than the written statement,” MUFG says.

“Governor Bailey pushed back against any interpretation that the Bank was preparing to raise rates, explicitly stating that markets should not leave the meeting believing the MPC was ‘edging towards a hike’.”

That line is the central one for the Pound.

We think MUFG’s analysis points to a policy stance that can stop Sterling from falling sharply, but may struggle to generate another sustained leg higher.

The Bank remains worried about inflation, which keeps rate cuts off the immediate agenda.

But it is also unwilling to validate the idea of a near-term hike.

For GBP/USD, that removes some of the upside surprise that would normally be needed to drive the pair decisively above recent highs.

The written statement therefore offers Sterling support through relative rates, while Bailey’s remarks cap the extent to which markets can price a more aggressive tightening cycle.

MUFG sums up the balance neatly:

“For GBP, the communication remains supportive, but the deliberate pushback against rate hike expectations limits the scope for upside.”

That is consistent with the price action.

GBP/USD finished July strongly, but the exchange rate remains below the month’s high at 1.3558 and below the May peak near 1.3658.

The pair has recovered most of the late-July decline, yet it has not broken free of the broader three-month range.

GBP/USD Recovery Has Improved the Technical Picture, but 1.3550-1.3650 Still Caps the Advance

The three-month chart shows a clear recovery from the late-June low near 1.3140.

GBP/USD climbed back through 1.3300 in early July, briefly reached above 1.3500 in mid-month and then recovered again into the close of July.

The latest price near 1.3482 is above both the rising 20-day moving average and the 50-day average, which has started to flatten.

That is constructive.

It suggests the pair has moved out of the weakest phase of the June decline and is attempting to rebuild a broader upward structure.

We would nevertheless stop short of calling this a full breakout.

The first important resistance area is 1.3500-1.3550.

A sustained move above there would open the way towards 1.3600 and the May high around 1.3650.

That is the zone which would need to break before a more durable bullish case could take shape.

On the downside, initial support is located around 1.3400.

Below that, the 20-day moving average near 1.3380 and the 50-day average around 1.3360 provide the next areas to watch.

A break beneath both would weaken the recovery and bring 1.3300 back into view.

Image: GBP/USD three-month chart showing resistance at 1.3550 and 1.3650, with support around 1.3400 and 1.3360 We think MUFG’s policy interpretation fits the chart well.

The Pound has enough support to hold above the moving averages and retest 1.3500, but the BoE message does not yet provide a convincing reason for GBP/USD to break through the May highs.

A stronger move would probably require one of two things: a renewed increase in UK rate expectations, or a broader weakening of the US Dollar.

Without either, the most likely outcome is further consolidation with a mild upward bias rather than a clean breakout.

The July close at 1.3482 leaves GBP/USD in better shape than it was a week earlier, but the pair is still trading inside a wide 1.3140-1.3650 range.

For now, we would treat 1.3550 as the first upside test and 1.3650 as the level that would confirm a more meaningful advance.

Failure below those levels would leave MUFG’s conclusion intact: the BoE’s hawkish hold supports the Pound, but Bailey’s restraint limits how far it can run.

August Forex Seasonality Key Points GBP/USD has, on average, seen its worst monthly performance in August, with average returns of around -0.5% since 1971. For USD/JPY, the key question will be how serious Japan and the US are about providing ongoing support to the yen, rather than long-term seasonal tendencies. A bearish move in AUD/USD, in line with the seasonal track record, could create an 8-month head-and-shoulders topping pattern on the pair with a neckline in the 0.6850 zone The beginning of a new month marks a good opportunity to review the seasonal patterns that have influenced the forex market over the 50+ years since the Bretton Woods system was dismantled in 1971, ushering in the modern foreign exchange market.

As always, these seasonal tendencies are just historical averages, and any individual month or year may vary from the historic average, so it’s important to complement these seasonal leans with alternative forms of analysis to create a long-term successful trading strategy. In other words, past performance is not necessarily indicative of future results.

Euro Forex Seasonality – EUR/USD Chart Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.

Historically, August has been a mixed month for EUR/USD, with the world’s most widely-traded currency pair sporting an average return of -0.1% over the last 50+ years. In July, EUR/USD spent most of the month consolidating above 1.1360 support before rallying into the close of the month following a less-hawkish-than-hoped FOMC meeting. With the conflict in the Middle East back in play, headlines from that region and relative economic divergences should set the tone this month.

British Pound Forex Seasonality – GBP/USD Chart

Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.

Looking at the above chart, GBP/USD has, on average, seen its worst monthly performance in August, with average returns of around -0.5% since 1971. Like the euro, the British pound bounced against the Greenback last month, navigating the new Prime Minister relatively smoothly. For this month, the key level to watch will be the confluence of the July high and 78.6% Fibonacci retracement of the May-June drop; as long as that level holds, the seasonal tendency hints at the potential for weakness.

Japanese Yen Forex Seasonality – USD/JPY Chart

Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.

August has historically been a bearish month for USD/JPY, with the pair falling -0.3% on average since the Bretton Woods agreement. USD/JPY spent most of last month grinding higher before suspected intervention, supported by the US, led to a sharp drop over the final two days. For August, the key question will be how serious Japan and the US are about providing ongoing support to the yen. Continued rate checks and verbal intervention would likely be enough to support the bearish seasonal tendency in USD/JPY.

Australian Dollar Forex Seasonality – AUD/USD Chart

Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.

Turning our attention Down Under, AUD/USD has historically traded lower in August, with an average return of -0.6% going back to 1971. Last month, the Aussie edged higher against the world’s reserve currency, taking it back above the psychologically significant 0.7000 level after the aforementioned FOMC meeting. A bearish move in line with the seasonal track record could create an 8-month head-and-shoulders topping pattern on the pair with a neckline in the 0.6850 zone.

Canadian Dollar Forex Seasonality – USD/CAD Chart

Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.

Last but not least, August has been a modestly positive month on average for USD/CAD, with an average historical return of +0.2%. The North American pair ultimately finished last month lower, defying the long-term seasonal tendency. As we head through August, the 6-year “joint review” of the USMCA will be a key event risk for the pair, with President Trump expressing skepticism toward the trade deal from his first term. Additional uncertainty around the trade relationship between the US and Canada could weigh on both currencies, but the impact on the Canadian Dollar would likely be larger, potentially supporting the pair in line with the longer-term seasonal tendency.

As always, we want to close this article by reminding readers that seasonal tendencies are not gospel – even if they’ve tracked relatively closely so far this year – so it’s important to complement this analysis with an examination of the current fundamental and technical backdrops for the major currency pairs.

-- Written by Matt Weller, Global Head of Research

Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX

Key Points:EUR/USD rebounded from session lows as traders reacted to inflation data from the EU. USD/CAD gained ground as precious metals markets pulled back.USD/JPY was extremely volatile after BoJ intervention.

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U.S. Dollar Retreats From Session Highs

DXY 310726 4h Chart U.S. Dollar Index is swinging between gains and losses as traders react to the final reading of Michigan Consumer Sentiment report. The report indicated that Consumer Sentiment increased from 49.5 in June to 55.2 in July, compared to analyst forecast of 54.0.

Currently, U.S. Dollar Index is trying to settle below the support at 99.85 – 100.00. If U.S. Dollar Index manages to settle below the 99.85 level, it will head towards the next support, which is located in the 99.25 – 99.40 range. RSI has recently moved back into moderate territory, so there is enough room to gain additional downside momentum in the near term.

EUR/USD Rebounds Above The 1.1500 Level

EUR/USD 310726 4h Chart EUR/USD rebounded from session lows as traders remained focused on inflation data from the EU. Euro Area Inflation Rate increased from 2.8% in June to 2.9% in July, in line with analyst estimates. Euro Area Core Inflation Rate increased from 2.4% to 2.5%, while analysts expected that it would remain unchanged at 2.4%.

From the technical point of view, EUR/USD continues its attempts to settle above the resistance level at 1.1510 – 1.1525. If EUR/USD manages to settle above the 1.1525 level, it will move towards the next resistance at 1.1600 – 1.1615.

GBP/USD Tests Resistance At 1.3465 – 1.3480 GBP/USD 310726 4h Chart GBP/USD is mostly flat as traders react to the UK Nationwide Housing Prices report. The report showed that housing prices increased by +0.1% month-over-month in July, in line with analyst consensus.

Currently, GBP/USD attempts to settle above the resistance at 1.3465 – 1.3480. In case this attempt is successful, GBP/USD will head towards the next resistance level, which is located in the 1.3550 – 1.3565 range.

USD/CAD 310726 4h Chart USD/CAD is moving higher as traders react to the pullback in precious metals markets. Gold pulled back below the $4050 level, while silver declined below $57.50. Other commodity-related currencies are losing some ground in today’s trading session.

If USD/CAD manages to settle below the support at 1.4010 – 1.4025, it will head towards the next support level at 1.3920 – 1.3935.

USD/JPY Stays Volatile After BoJ Intervention

USD/JPY 310726 4h Chart USD/JPY is jumping back and forth in volatile trading after yesterday’s intervention from the Bank of Japan. According to Bloomberg’s estimate, Japan spent about $53 billion to provide support to the national currency. It should be noted that Japanese officials did not confirm the intervention.

Today, traders also focused on BoJ Interest Rate Decision. Normally, the rate decision would be the key event of the week, but the massive intervention served as a more important catalyst.

The Bank of Japan left the interest rate unchanged at 1%, in line with analyst estimates. One board member voted for a hike.

In case USD/JPY settles below the support at 159.50 – 160.00, it will head towards the next support level at 157.50 – 158.00. BoJ may try to intervene again as the yen is fundamentally weak. The currency requires additional support to break the current trend. In case BoJ does not intervene, USD/JPY bulls may calm down and push USD/JPY back above the 160.00 level.

If you’d like to know more about how to trade forex, please visit our educational area.

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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.

Dollar Index Price Chart – Source: Tradingview The Dollar Index has developed the bearish Shark harmonic pattern, and a breakdown below the long-term ascending trendline and both the 50-EMA (100.98) and the 100-EMA (100.99) has occurred. The impulse has been strongly bearish, and the RSI has declined to the low thirties and in the vicinity of the oversold region. With the trendline broken, the outlook remains bearish despite the potential for a counter trend rally.

To the downside, the first key support is at 99.86, with 99.40 following. The downside resistance is at 100.40, and 100.99 and 101.47 offer the most significant resistance. Until the trendline and moving averages are retaken, any rise will meet selling pressure.

The outlook remains bearish as long as DXY is below 100.99, and the recent breakdown has increased selling pressure to 99.86.

GBP/USD Technical Analysis: Sterling Holds Breakout Above Key Resistance Ahead of BoE

British Pound falls as US Dollar receives from internal FOMC policy splitGBP/USD loses ground after three days of gains, trading around 1.3450 during the Asian hours on Friday. The pair depreciates as the US Dollar (USD) gains support from a hawkish pause by the Federal Reserve (Fed) and an internal FOMC policy split. Read more...

British Pound Sterling rallies on a hawkish vote the Bank of England immediately talked downThe Bank of England held Bank Rate at 3.75% for a fifth straight meeting on Thursday, and the Monetary Policy Committee (MPC) got there on a 6-3 vote, with three members backing an immediate quarter-point increase against a consensus that had looked for 7-2. GBP/USD trades above 1.3450, up 0.71%, roughly 130 pips above the European morning low short of 1.3350. The advance cut straight through the 50-day and 200-day Exponential Moving Averages (EMA), which have converged just below 1.3400 and have been advertising a range rather than defending one.

The dissent bloc grew by one from June, and the swing factor is not in dispute. Energy prices remain volatile and well above pre-conflict levels, June's Consumer Price Index (CPI) reading of 2.6% is expected to turn higher as those costs pass through, and the dissenters argue that the longer the shock persists, the greater the risk of second-round effects in wage and price setting. Read more...

British Pound surges on BoE hawkish hold, Yen intervention crushes USDThe Pound Sterling registers gains versus the US Dollar after the Bank of England decided to hold rates unchanged, in a 6-3 vote, while suspected intervention to propel the Japanese Yen weakened the Greenback against most G8 currencies. The GBP/USD trades at 1.3430, up 0.40%.

The foreign exchange markets are experiencing a volatile session as the USD/JPY pair tumbles by over 400 pips so far on Thursday. Consequently, the US Dollar Index (DXY), which tracks the performance of the American currency against six other currencies, collapses by over 0.60%, reaching a 30-day low. Read more...

The Pound Sterling registers gains versus the US Dollar after the Bank of England decided to hold rates unchanged, in a 6-3 vote, while suspected intervention to propel the Japanese Yen weakened the Greenback against most G8 currencies. The GBP/USD trades at 1.3430, up 0.40%. Read More...

British Pound drops against its peers after BoE’s monetary policy decisionThe British Pound (GBP) drops against its major currency peers after the Bank of England’s (BoE) monetary policy decision. The GBP/USD pair edges lower from its intraday high of 1.3405 to near 1.3380; however, the initial reaction from the pair was slightly positive. Read More...

British Pound declines as Fed hawkish rate holds boost US Dollar, BoE rate decision loomsThe GBP/USD pair attracts some sellers to near 1.3345 during the early European trading hours on Thursday. The US Dollar (USD) edges higher against the British Pound (GBP) amid hawkish Federal Reserve (Fed) signals and escalating Middle East tensions. The Bank of England (BoE) interest rate decision will take center stage later on Thursday. Read More...

The US dollar suffered its sharpest fall in the last two weeks following Kevin Warsh’s intention to shift the Fed’s responsibility for bringing inflation back to the 2% target onto the financial markets. The new Fed Chair emphasised that the rally in Treasury yields is tightening financial conditions and holding back price growth. Inflation expectations remain at acceptable levels.

Investors interpreted this rhetoric as an intention to extend the pause and avoid tightening monetary policy for as long as possible. The probability of a federal funds rate hike in September has fallen from 75% to 65%, and the likelihood of two hikes in 2026 has dropped from 51% to 44%. This led to a weakening of the US dollar against major peers, despite falling stock indices, a rally in Treasury bond yields and rising oil prices against the backdrop of the escalating conflict in the Middle East.

However, Commerzbank believes that the rally in Brent crude will not necessarily weigh on the EURUSD and GBPUSD. It is leading to a rise in inflation expectations in Europe and to an increased likelihood of policy tightening by the ECB and the Bank of England. At the same time, inflation expectations in the US are not rising, nor is the likelihood of Fed monetary tightening. According to DBS Group, Kevin Warsh’s withdrawal of his forward guidance is leaving US markets and the dollar stumbling in the dark. By contrast, the euro and the pound may benefit from central banks maintaining their guidance on the future path of interest rates.

In this regard, the BoE meeting could provide sterling support. Investors do not expect a rise in the repo rate but anticipate hawkish rhetoric amid the escalating conflict in the Middle East and rising energy prices. Oil and gas prices are higher than they were at the time of the Committee’s previous meeting.

Despite the Bank of England holding rates for a fifth consecutive meeting, the futures market is pricing in a 65% chance of a hike in September and nearly two increases by the end of this year. Bloomberg experts forecast that only two of the nine MPC members will vote for a rate hike. If the number is higher, GBPUSD could rise. 

Summary: GBPUSD may rise if the BoE holds rates but signals a hawkish policy stance, while a dovish Fed outlook pressures the US dollar. 

The Pound-Dollar rate could remain under pressure unless the Bank of England delivers a sufficiently hawkish message after an inconclusive Federal Reserve decision. The Pound to US Dollar (GBP/USD) exchange rate weakened on Thursday morning as markets turned their attention to the Bank of England following a divided Federal Reserve policy decision.

GBP/USD retreated towards $1.3345 during early European trading, extending its recovery from Wednesday’s pre-Fed lows but remaining under pressure from renewed safe-haven demand for the US Dollar.

Latest — Exchange Rates:

Pound to Dollar (GBP/USD): 1.333627 (-0.23%)

Euro to Dollar (EUR/USD): 1.144507 (-0.19%)

Dollar to Yen (USD/JPY): 163.59918 (+0.17%)

Federal Reserve Holds Rates but Offers Little Guidance The Federal Reserve left interest rates unchanged at 3.50%–3.75% on Wednesday, in line with the majority of economists’ forecasts.

The decision was nevertheless more divided than expected, with three policymakers voting for an immediate 25-basis-point rate increase because of persistent inflation risks.

Fed Chair Kevin Warsh reaffirmed the central bank’s commitment to returning inflation to its 2% target but provided few firm clues over the timing of any future policy move.

Warsh indicated that further tightening could be required if inflation pressures remained elevated, although he resisted offering the explicit forward guidance markets had become accustomed to under previous Fed leadership.

The initial market response was mixed. Short-term Treasury yields declined as investors reduced expectations of a September rate rise, while long-term yields climbed sharply amid concerns that the Fed was not acting decisively enough to contain inflation.

The Dollar initially weakened following the announcement but recovered during Asian trading as renewed US attacks on Iranian targets increased demand for defensive assets.

Pound Sterling Awaits Bank of England Guidance Attention now turns to Thursday’s Bank of England interest-rate announcement.

The Monetary Policy Committee is widely expected to leave Bank Rate unchanged at 3.75%, placing the focus on the vote split, updated economic forecasts and Governor Andrew Bailey’s comments.

UK inflation fell to 2.6% in June, but policymakers continue to face uncertainty over the impact of elevated oil and gas prices on household costs and inflation expectations.

Markets have priced a meaningful risk of higher UK interest rates during the coming year, although economists remain divided over whether the Bank will ultimately need to tighten policy.

A hawkish vote split or a warning that renewed energy-price pressures could make inflation more persistent would offer the Pound support.

Sterling could struggle, however, if the Bank emphasises weak domestic growth, slowing private-sector wages or the risk that tighter financial conditions will weigh on the economy.

Near-Term GBP/USD Forecast: BoE Tone to Determine Next Move The near-term Pound-Dollar outlook is likely to depend heavily on whether the Bank of England validates or pushes back against expectations for future rate increases.

A hawkish BoE announcement could allow GBP/USD to recover towards the $1.3400–$1.3430 area.

A move above this zone would ease immediate downside pressure and potentially bring $1.3480 back into view.

Conversely, a cautious policy statement or a less hawkish vote than markets expect could drive the Pound back towards $1.3300.

A sustained break below $1.3300 would expose the recent lows around $1.3220.

The Dollar will also remain sensitive to developments in the Middle East, with any further escalation likely to increase safe-haven demand and maintain upward pressure on global energy prices.

Later in the week, the latest US GDP figures could also influence the pair. Stronger-than-expected second-quarter growth would reinforce expectations that the US economy can withstand elevated interest rates and could provide additional support for the Dollar.

British Pound retreats from weekly high vs firmer USD as focus shifts to BoE, US dataThe GBP/USD pair struggles to capitalize on the previous day's strong move up to the weekly high and drifts lower during the Asian session on Thursday. Spot prices currently trade around mid-1.3300s, down over 0.10% for the day, and, for now, seem to have stalled the recovery move from a nearly four-week low, touched on Tuesday.

The US Dollar (USD) regains some positive traction following the previous day's post-FOMC slide to an over one-week low and turns out to be a key factor exerting downward pressure on the GBP/USD pair. As was widely expected, the US Federal Reserve (Fed) held interest rates steady at the end of a two-day meeting on Wednesday. The central bank, however, refrained from adopting a more aggressive stance on monetary policy, which, in turn, weighed heavily on the Greenback. Read more...

British Pound Sterling rents a rally it has to pay for in the morningThe Federal Reserve (Fed) held its target range at 3.50% to 3.75% at 18:00 GMT on a 9-3 vote, with three voting members preferring an immediate quarter-point increase, and Sterling rallied through the 1.3300 shelf it lost last week to trade just above 1.3350. None of that is a British story. The pair held a 30-pip band around 1.3300 for the whole London session and did all of its work after the American headline.

Sterling has not traded its own economy for a fortnight. June Retail Sales beat against an expected decline, the business surveys returned to growth, and household confidence reached a six-month high. None of it moved the currency off a broken shelf. What moved it today was a Fed that produced its most hawkish vote record of the cycle and then refused to say what the vote meant. Read more...

British Pound: Policy risk with range-bound trade against US Dollar – ScotiabankScotiabank strategists Shaun Osborne and Eric Theoret highlight that GBP/USD is flat around 1.33, supported by stronger United Kingdom (UK) lending data and stabilizing Bank of England (BoE) expectations. They stress that UK fiscal narratives remain important for sentiment toward government debt. The Monetary Policy Committee (MPC) is expected to deliver a hawkish hold at 3.75%, while technically the British Pound (GBP) trades in a June range between 1.3150 and 1.3550, with near‑term moves seen between 1.3250 and 1.3350.

"The pound is also quiet and also entering Wednesday’s NA session flat vs. the USD as it also consolidates within a remarkably tight range—around 1.33. The fundamental release calendar has included the latest lending and money supply data, offering a notable beat on both mortgage approvals and a sizeable jump in lending." Read more...

Key Points:EUR/USD pulled back as traders focused on the strong rally in the oil markets. GBP/USD moved lower as traders prepared for Fed decision. USD/JPY remained stuck near the 164.00 level.

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U.S. Dollar Moves Higher As Traders Wait For Fed Interest Rate Decision

DXY 290726 4h Chart U.S. Dollar Index gains ground as traders prepare for Fed Interest Rate Decision, which will be released soon.

Analysts expect that Fed will leave the federal funds rate unchanged. Interestingly, FedWatch Tool indicates that there is a 33.7% chance for a rate hike. As usual, forex traders are cautious ahead of the key event of the week.

U.S. Dollar Index failed to settle below the support level at 101.15 – 101.30 and rebounded towards the 101.50 level. In case U.S. Dollar Index manages to settle above 101.50, it will head towards the nearest resistance level, which is located in the 101.80 – 101.95 range.

EUR/USD Pulls Back Amid Rally In The Oil Markets EUR/USD 290726 4h Chart EUR/USD is losing ground as traders react to the strong rally in the oil markets. Oil prices are up by more than 7% as Iran attacked a U.S. base in Jordan. High oil prices will put additional pressure on the European economy and may force the Fed to be more hawkish, which is bearish for the European currency.

The nearest support level for EUR/USD is located in the 1.1350 – 1.1365 range. A successful test of this level will push EUR/USD towards the next support at 1.1285 – 1.1300. RSI is in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge.

GBP/USD Retreats Ahead Of Fed Decision GBP/USD 290726 4h Chart GBP/USD is moving lower as traders wait for Fed decision and focus on the rally in the oil markets. Traders are not ready for big moves ahead of Fed’s announcement.

In case GBP/USD settles below the 1.3280 level, it will head towards the support at 1.3250 – 1.3265. A move below the 1.3250 level will push GBP/USD towards the next support level at 1.3170 – 1.3185.

USD/CAD 290726 4h Chart USD/CAD is losing some ground despite the pullback in precious metals. Other commodity-related currencies have found themselves under pressure in today’s trading session.

If USD/CAD declines below the 50 MA at 1.4081, it will head towards the nearest support level, which is located in the 1.4010 – 1.4025 range. On the upside, a move above the resistance level at 1.4125 – 1.4140 will open the way to the test of the next resistance at 1.4235 – 1.4250.

USD/JPY Looks Ready To Test The 164.00 Level USD/JPY 290726 4h Chart USD/JPY continues its attempts to settle above the key resistance level as traders react to rising Treasury yields. The yield of 2-year Treasuries climbed above the 4.33% level, while the yield of 10-year Treasuries settled near 4.65%. Traders should note that USD/JPY will be extremely sensitive to Fed decision and comments from Fed Chair Warsh.

In case USD/JPY manages to settle above the 164.00 level, it will gain additional upside momentum and head towards the 165.00 level. USD/JPY has not tested the 165.00 level since 1986. It remains to be seen whether Bank of Japan would try to defend the yen as the Japanese currency is fundamentally weak and any attempts to break the current trend may waste reserves.

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GBP/USD continued to consolidate at 1.3283 on Wednesday. The British pound hit a near one-month low in the previous session as investors monitored developments in the Middle East, while the dollar drew support from expectations that the Federal Reserve could raise rates today.

The suspension of US strikes on Iran contributed to a decline in oil prices and somewhat eased inflationary risks. However, US government bond yields fell only modestly, reflecting cautious market sentiment.

Attention is now turning to the Bank of England meeting on Thursday. The regulator is expected to hold rates at 3.75%, a view supported by fresh inflation data. In June, consumer price growth slowed to 2.6% on an annual basis – a 15-month low and below the Bank’s own expectations.

The rise in wholesale energy prices has not yet been fully reflected in regulated tariffs for British households. This has kept UK inflation below that of the US and the eurozone, where markets still anticipate rate hikes in September or October.

Technical analysis

On the H4 GBP/USD chart, the market is forming a downward move towards 1.3267. A wide consolidation range around the 1.3310 level is taking shape. An upside breakout would open the way for a move towards 1.3375, while a downside breakout would suggest a move towards 1.3260, with scope for the trend to extend to 1.3190. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downwards.

On the H1 chart, the market has formed a compact consolidation range around the 1.3309 level, currently extending down to 1.3272. A move higher towards 1.3310 is expected, followed by a decline to 1.3260. The Stochastic oscillator confirms this scenario, with its signal line below 80 and pointing downwards towards 20.

ConclusionGBP/USD has fallen to its lowest level in nearly a month as the dollar remains supported by expectations of a potential Fed rate hike. While the suspension of US strikes on Iran has helped lower oil prices and ease inflationary pressures, cautious sentiment persists as markets await the outcome of the Federal Reserve’s policy meeting later today. Attention will then shift to the Bank of England’s decision on Thursday, where rates are expected to remain unchanged at 3.75%, supported by softer UK inflation data. Technically, sterling appears poised for further downside towards 1.3260 and potentially 1.3190, with the near-term outlook heavily dependent on central bank guidance and geopolitical developments.

The British Pound (GBP) is marginally higher at around 1.3300 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair edges up as the US Dollar ticks lower ahead of the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.

In the European session, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades marginally lower to near 101.30.

Investors will pay close attention to the Fed’s interest rate decision as traders are not aggressively confident that the central bank will leave interest rates unchanged again. The CME FedWatch tool shows that the odds of the Fed leaving interest rates unchanged in the range of 3.50%-3.75% are 69.5%. In the last four policy meetings, the Fed didn’t execute any monetary policy adjustment and left policy rates steady.

Financial markets will also focus on the monetary policy statement and Fed Chair Kevin Warsh’s press conference to get fresh cues regarding inflation and the economic outlook in the wake of ongoing military aggression in the Middle East.

On Thursday, investors will focus on the Bank of England’s (BoE) monetary policy announcement. The BoE is expected to keep interest rates steady at 3.75%, with a 7-2 majority.

Analysts at Rabobank also said in a note that, “for now, the market is expecting steady policy from the MPC,” even as “hawkish dissenters will keep the market debating the risk of policy tightening from the BoE.” They argue that this debate is unlikely to translate into action in the near term, given “the backdrop of soft activity indicators and uncertainty about the autumn budget,” and conclude that RaboResearch “expects steady policy through to the end of the year.”

GBP/USD technical analysis

GBP/USD trades marginally higher at around 1.3300, but is retaining a near-term bearish bias as it holds beneath the 20-day exponential moving average (EMA) at 1.3353 and below the broken downward resistance trend line that now caps the market around 1.3489.

The Relative Strength Index (14) hovers near 44, hinting at subdued upside momentum and suggesting that recent rebounds remain corrective while the pair trades under these overhead technical barriers.

Strategists at Scotiabank have also described the short-term technical backdrop for GBP/USD as "bearish," noting that the "RSI is drifting further into bearish territory and threatening a push below 40." They highlight that the "local range is bound between the late June low in the mid-1.31s and the mid-July high in the mid-1.35s," with "near-term support at 1.3250" and "near-term resistance at 1.3350." This configuration, they suggest, underscores a market that remains vulnerable within a defined range as momentum indicators continue to deteriorate.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator BoE MPC Vote Rate Unchanged Interest rates are set by the Bank of England’s (BoE) Monetary Policy Committee (MPC). The MPC sets an interest rate it judges will enable the BoE’s inflation target to be met. It is comprised of nine members – the Governor, the three Deputy Governors, the Bank's Chief Economist and four external members appointed directly by the Chancellor. Investors look at each member’s vote in order to seek cues over how unanimous was the decision on interest rates.

Read more.

Next release: Thu Jul 30, 2026 11:00

Frequency: Irregular

Consensus: 7

Previous: 7

Source: Bank of England

Key Points:Today's Federal Reserve decision and forward guidance are expected to drive volatility across DXY, EUR/USD and GBP/USD.The dollar remains supported by resilient U.S. economic data, safe-haven demand and expectations for higher interest rates.DXY continues holding above key moving averages, with $101.69 acting as the next major breakout resistance.EUR/USD remains capped below descending trendline resistance as policy divergence continues to favour the U.S. dollar.GBP/USD stays under pressure ahead of the Bank of England meeting as traders assess the outlook for UK interest rates.

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Dollar Strength Anchored by Fed Outlook as Euro and Sterling Face Policy Divergences The dollar index was supported recently by the possibility that the Fed might increase rates when it announces its decision due Wednesday, July 29. Traders have given the US central bank a decent probability of hiking rates this year, with chances of a move in July hovering around 33 percent and a higher chance of a move in September, consistent with stronger-than-expected US economic data, energy-related upside inflation risk and a more hawkish stance implied by the Fed’s June projections under Chair Kevin Warsh. Relative growth outperformance against other developed nations, foreign capital flows into US assets, and periodic safe-haven inflows stemming from geopolitical risk associated with the situation in the Middle East have also added to the dollar’s appeal against a basket of currencies.

In contrast, the euro was weighed down by the widening interest rate differential between the United States and the European Union. In June, the European Central Bank increased its key deposit facility rate to 2.25 percent, which was its first increase in three years, before keeping rates unchanged in its latest meeting on July 23. Growth in the euro area is sluggish, as the ECB staff projection was revised lower in June and energy prices stemming from the ongoing war in the region continued to feed into overall inflationary pressures.

Officials at the ECB have not sounded too urgent about hiking rates further, but the gap between interest rate policy in the euro area and the United States still favors the dollar even though some market participants anticipate a possible narrowing in rate expectations later this year.

Meanwhile, the main catalyst for the British pound in the coming session will be the Bank of England’s rate decision on Thursday. Bank Rate is at 3.75 percent after two consecutive hold decisions by the Monetary Policy Committee. This time around, policymakers appear split between those fearful of second-round inflationary effects and those concerned about softer labor market conditions as well as weaker than expected readings from the most recent consumer price data release.

UK growth is likely to decelerate this year as the economy grapples with high energy prices and tighter financial conditions, although further fiscal austerity is likely to remain a concern going forward. Relative rate expectations as well as domestic political or budgetary developments may drive the pair this week.

Market participants will closely scrutinize the Fed’s statement and accompanying news conference for clues as to how policymakers view the interplay between the persistence of inflation and weakness in economic activity. The statement could ultimately determine whether the dollar’s recent uptrend continues or if narrowing rate differentials could lead to gains for the euro and sterling in the short term.

U.S. Dollar Index (DXY) Technical Analysis: Uptrend Holds Despite Rejection at Major Resistance Dollar Index Price Chart – Source: Tradingview Despite selling pressure near 101.69, the USD Index is still maintaining its medium-term upward trend, staying above the ascending trendline as well as the 50-EMA (101.24) and 100-EMA (101.10). RSI has dropped to 46. Key resistance levels are located at 101.69, 102.06 and 102.42. On the flip side, support levels are seen at 100.96, 100.50 and 99.90.

As long as the USD Index is holding above 100.96, the uptrend should remain intact. A move above 101.69 could spark a fresh rally towards 102.06, while a break below 100.96 could see the index drop towards 100.50 and 99.90.

GBP/USD Technical Analysis: Bears Defend Former Channel Support

GBP/USD Price Chart – Source: Tradingview GBP/USD is still trading below the broken ascending channel after failing to reclaim former support. Price is also trading below the 50-EMA (1.3347) and 100-EMA (1.3360), while the RSI is around 40. Key resistance levels are located at 1.3349, 1.3416 and 1.3482. On the flip side, support levels are seen at 1.3272, 1.3210 and 1.3140.

As long as GBP/USD is holding below 1.3349, the outlook remains on the bearish side. If the pair breaks above 1.3349, the focus could turn towards 1.3416, while a move below 1.3272 would likely send the pair down to 1.3210.

EUR/USD Technical Analysis: Descending Trendline Continues to Cap Recovery EUR/USD Price Chart – Source: Tradingview Failing to reclaim the broken ascending trendline, EUR/USD is now moving below the 50-EMA (1.1399) and 100-EMA (1.1413), while the descending trendline continues to act as resistance. The pair is staging a recovery from the 1.1364 support area, though upside gains remain constrained by the descending trendline. RSI is at 54. Key resistance areas are located at 1.1410, 1.1443 and 1.1481. On the flip side, support levels are seen at 1.1364, 1.1328 and 1.1294.

Since the EUR/USD is trading below 1.1410, the bias remains on the sell side. If the pair manages to rise above 1.1410, the focus could turn towards 1.1443, or if 1.1410 rejects price, the EUR/USD may retrace towards 1.1364.

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US Dollar Talking Points: The US Dollar retains a bullish look but the big question here is whether the rate hike odds that have priced in remain after tomorrow’s Fed meeting. While newly installed Fed Chair Kevin Warsh taking a hawkish approach makes sense up to this point the bigger question is whether he’ll push the envelope with stocks showing relative weakness, which would also possibly expose President Trump’s choice in the nomination process.

It’s one of those weeks where the range of possible outcomes is far and wide. As we go into tomorrow’s Fed meeting there’s a peculiar degree of indecision, as there’s an approximate 30% probability of rates being hiked tomorrow.

To this point, the Fed has often used messaging and media interviews to telegraph their actions to avoid unsettling market participants and, in turn, inviting volatility. But that’s not the case for tomorrow and this gives some potential for price movements.

CME Fedwatch Rate Probabilities for July FOMC Data taken from CME Fedwatch Going out to the end of the year shows a near 90% chance of at least one rate hike, with a 50% chance of at least two rate hikes.

If this were to happen, it would make President Trump’s choice to lead the Fed appear as through he’s directly refuting the President’s desire for rate cuts, especially considering this is into the lead-in to the US election in November.

This also helps to give some context to the US Dollar move of strength, as it was the last Fed meeting, on June 17th, where the USD broke out and ran to its current high. This also sets a very high bar for continued USD strength as not only will Warsh need to sound very hawkish tomorrow, but he’ll have to sound concerned that inflation isn’t going in the right direction which would lead to expectation for even more hawkishness down the road.

CME Fedwatch Rate Probabilities into End of 2026 Data taken from CME Fedwatch US Dollar – Is That All? The last Fed meeting in June was important as it was a quarterly rate decision, so we got updated guidance and projections, unlike tomorrow’s, which is just an announcement and a press conference. This puts even more emphasis on Kevin Warsh, but when we heard from the bank and the Summary of Economic Projections last month, DXY put in a massive breakout that pushed the USD up to a fresh yearly high, until resistance showed at the Fibonacci level of 101.80.

From there – profit taking showed in an orderly fashion in the form of a bull flag, and that led to the reaction from two weeks ago when below-expected CPI and PPI prints provided a dip with which buyers could react. I looked into those in the webinar at the time and bulls reacted in a big way, sparking a bullish trend that lasted for the next week and change.

More recently, however, the move has stalled ahead of that 101.80 level and given how aggressively rate hikes have priced-in as seen from the above two tables, it would seem the Fed would really have to shock the market to continue this rally in the Dollar.

Also notable – and addressed below – is the US Dollar from the perspective of counterparts and what could lead to a reliably stable trend in the DXY basket.

US Dollar Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview USD Structure At this point a simple move of less-hawkishness can help to inspire a pullback and I think from Warsh’s perspective that would probably be the optimal outcome, especially considering the matter in USD/JPY and what could possibly happen to Treasury rates on the long-end of the curve if markets become unsettled.

As looked at coming into this week, there’s short-term bullish structure to match the long-term backdrop. So far, the ‘s1’ level has held support, but into tomorrow, the ‘s2’ zone is also viable, running from 100.86-100.99, with 100.65 and 100.36-100.44 below that.

US Dollar Four-Hour Price Chart Chart prepared by James Stanley; data derived from Tradingview USD/JPY

There’s another ascending triangle in USD/JPY and with rate decisions from both economies this week that can present a dangerous scenario.

As I said in the video I’d be surprised if a visit to 165.00 doesn’t bring some kind of reaction from policymakers, either in the form of an actual intervention or perhaps just a threat of one. The bigger question is whether that’ll work as anything more than a pullback and until the Bank of Japan sounds more concerned about inflation I have a hard time getting too aggressive on reversal scenarios in the pair, particularly with markets so amped up for US rate hikes into the end of this year.

I think this could have an outsized impact on the USD because that carry trade can be truly difficult to gauge in size. JPY is a mere 13.6% allocation of the USD basket but like we saw back in July of 2024, if that massive carry trade begins to unwind the Dollar selling could show in pairs even without the Japanese Yen, such as EUR/USD.

At this point there’s another ascending triangle setting up in USD/JPY and so far bulls haven’t been able to push beyond 164, which I think echoes that expectation of something happening around 165. But if we see Warsh show calm and perhaps Ueda sound a bit more hawkish, we could get a pullback that could allow for trend continuation.

USD/JPY Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD

The Euro is 57.6% of the DXY basket and despite those high odds for rate hikes in the US later this year, the pair has been rather unmoved of late – even with a wide open door for bears to make a push.

Last week saw a dovish ECB produce a bearish engulf on the daily to break a bear flag. A day later, the pullback saw sellers show up at prior support of 1.1402.

But now, not only is there no fresh low there’s a build of a falling wedge pattern. If we do hear Warsh as less-hawkish tomorrow this could give shorts excuse to pare positions and that could lead to a counter-trend move. Whether that becomes anything more than a pullback could, paradoxically, dial back to the argument around the Japanese Yen. But until there’s a closed body break on the daily above the 1.1500 level this market has a bearish big picture bias.

EUR/USD Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD When it comes to the Dollar I always try to retain some degree of balance, because, after all, it is a basket of underlying currencies rather than a market traded completely in a vacuum. GBP/USD still retains a bearish look and there’s a BoE rate decision on Thursday morning, less than 24 hours after the Fed.

The 1.3300 level remains a problematic spot but there’s a similar falling wedge that’s developed here, and if Warsh and perhaps even the BoJ can successfully tilt a pullback in the US Dollar and USD/JPY, there may be something to work with in Cable. First – bulls would need to take out 1.3325-1.3343, and then the 1.3390 area would be the next spot for them to encounter. But – at that point we can look for a higher-low and that’s something that could possibly lead-in to reversal scenarios in the pair.

GBP/USD Four-Hour Price Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro

U.S. Dollar Retreats As CB Consumer Confidence Drops

DXY 280726 4h Chart U.S. Dollar Index is losing ground as traders focus on the weak CB Consumer Confidence report and react to the strong pullback in the oil markets.

CB Consumer Confidence decreased from 92.2 in June (revised from 91.2) to 90.8 in July, compared to analyst forecast of 92.3.

Today, traders also had a chance to take a look at the Case-Shiller Home Price Index report for May. The report showed that home prices increased by +1.6% on a year-over-year basis, compared to analyst consensus of +1.3%.

Oil prices pulled back by -5% amid signs of de-escalation in the Middle East. Falling oil prices pushed Treasury yields lower, which was bearish for the American currency.

Currently, U.S. Dollar Index is trying to settle below the support level at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will head towards the next support, which is located in the 100.50 – 100.65 range.

EUR/USD Rebounds As Oil Markets Dive EUR/USD 280726 4h Chart EUR/USD gains ground, supported by the strong sell-off in the oil markets. Falling Treasury yields provided additional support to EUR/USD. The yield of 2-year Treasuries pulled back towards the 4.26% level, while the yield of 10-year Treasuries settled below 4.60%.

EUR/USD failed to settle below the support at 1.1350 – 1.1365 and rebounded towards the 50 MA at 1.1406. In case EUR/USD settles above the 50 MA, it will get to the test of the nearest resistance level at 1.1420 – 1.1435. A move above the 1.1435 level will push EUR/USD towards the next resistance at 1.1485 – 1.1500.

GBP/USD Moves Away From Weekly Lows GBP/USD 280726 4h Chart GBP/USD is moving higher as traders focus on general weakness of the American currency.

In case GBP/USD manages to settle above the 1.3300 level, it will head towards the nearest resistance at 1.3335 – 1.3350. A move above 1.3350 will push GBP/USD towards the 50 MA at 1.3380. If GBP/USD climbs above the 50 MA, it will head towards the resistance at 1.3450 – 1.3465.

USD/CAD Pulls Back As Traders Take Some Profits Off The Table Ahead Of Fed Decision USD/CAD 280726 4h Chart USD/CAD is losing ground as traders monitor commodity markets and prepare for Fed decision, which will be released tomorrow. FedWatch Tool indicates that there is a 71.7% chance that Fed will leave the federal funds rate unchanged.

If USD/CAD stays below the 1.4100 level, it will head towards the 50 MA at 1.4073. A move below the 50 MA will push USD/CAD towards the nearest support level at 1.4010 – 1.4025.

USD/JPY Remains Stuck Below 164.00 USD/JPY 280726 4h Chart USD/JPY continues its attempts to settle above the resistance level at 163.50 – 164.00 despite falling Treasury yields. Traders ignore intraday dynamics of Treasury markets and focus on hawkish Fed policy outlook. The strong pullback in the oil markets did not provide support to the Japanese yen, which was a bearish sign for the currency.

A successful test of the resistance at 163.50 – 164.00 will push USD/JPY towards the 165.00 level. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

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The British Pound (GBP) extends its decline against the US Dollar (USD) to near 1.3277 during the European trading session on Tuesday, the lowest level seen in over three weeks. The GBP/USD pair faces selling pressure as the US Dollar rises further, with investors turning cautious ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD0.03%0.06%0.11%-0.12%0.35%0.09%0.03%EUR-0.03%0.03%0.09%-0.13%0.32%0.08%0.00%GBP-0.06%-0.03%0.07%-0.15%0.31%0.06%0.00%JPY-0.11%-0.09%-0.07%-0.23%0.24%-0.01%-0.05%CAD0.12%0.13%0.15%0.23%0.49%0.20%0.17%AUD-0.35%-0.32%-0.31%-0.24%-0.49%-0.23%-0.32%NZD-0.09%-0.08%-0.06%0.00%-0.20%0.23%-0.05%CHF-0.03%-0.01%0.00%0.05%-0.17%0.32%0.05% 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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

In European trade, the US Dollar Index (DXY), which gauges the Greenback's value against six major currencies, posts a fresh monthly high at 101.64.

According to the CME FedWatch tool, traders see a 62% chance that the Fed will leave interest rates unchanged in the range of 3.50%-3.75% in the policy announcement on Wednesday. Investors will closely track the policy announcement and Fed Chairman Kevin Warsh’s press conference to know whether the central bank’s decision will lean towards United States (US) President Donald Trump’s economic agenda.

On Monday, US President Trump urged Fed Chair Warsh to lower interest rates, adding that there was a good inflation report recently, costs were falling rapidly, and that prices should drop significantly once the Gulf War ends.

On the Pound Sterling front, investors await the Bank of England’s (BoE) monetary policy announcement on Thursday. The BoE is expected to leave interest rates unchanged at 3.75%, with a 7-2 majority. The major focus of financial markets will be on commentary on inflation and the economic outlook.

Economic Indicator Fed Interest Rate Decision The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).

Read more.

Next release: Wed Jul 29, 2026 18:00

Frequency: Irregular

Consensus: 3.75%

Previous: 3.75%

Source: Federal Reserve

The British Pound (GBP) trades with caution at around 1.3300 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair is marginally higher, but is broadly under pressure, with investors turning cautious ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

Investors expect the Fed to leave interest rates unchanged in the range of 3.50%-3.75% and warn of upside inflation risks. However, United States (US) President Donald Trump said on Monday that Fed Chairman Kevin Warsh should lower interest rates, adding that there was a good inflation report recently, costs were falling rapidly, and that prices should drop significantly once the Gulf War ends.

On the contrary, the CME FedWatch tool reflects traders seeing the monetary policy adjustment on the hawkish side. There is an 80.8% chance that the Fed will deliver an interest rate hike in September, the tool shows.

This week, investors also await the Bank of England’s (BoE) monetary policy announcement on Thursday, in which it is expected to keep interest rates steady at 3.75%, with a 7-2 majority.

GBP/USD technical analysis

GBP/USD trades marginally higher at around 1.3300, but is holding a bearish near-term bias as it remains capped beneath the 20-period Exponential Moving Average (EMA) at 1.3358 and below the broader descending resistance trend line that projects from the 1.3862 area.

The Relative Strength Index (14) near 43 stays below the midline, hinting that downside pressure persists rather than signaling an oversold condition, while the pair consolidates closer to underlying trend-line support than to the overhead resistance cluster.

On the topside, initial resistance is located at the 20-day EMA around 1.3360, with further supply expected near the prior resistance trend-line break zone at 1.3487. On the downside, the market finds structural support around the horizontal support of the Descending Triangle formation, where a sustained break would likely open the door to the psychological level of 1.3000.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator BoE Interest Rate Decision The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.

Read more.

Next release: Thu Jul 30, 2026 11:00

Frequency: Irregular

Consensus: 3.75%

Previous: 3.75%

Source: Bank of England

British Pound softens as Fed rate uncertainty supports US DollarGBP/USD edges lower after opening at a bullish gap, remaining within positive territory and trading around 1.3290 during the Asian hours on Tuesday. The currency pair is under pressure as the US Dollar (USD) stabilizes, driven by market caution ahead of the upcoming Federal Reserve policy decision due on Wednesday.

According to the CME FedWatch Tool, markets are pricing in nearly a 38% chance of a rate hike in July, an unusually high level of uncertainty so close to a meeting. Citadel Securities expects the Fed to deliver a rate increase to solidify Chairman Kevin Warsh’s inflation-fighting credibility following his repeated promises to restore price stability. Looking further ahead, the probability of at least a 25-basis-point hike in September currently sits at approximately 81.4%. Read more...

Britain's best data week of the summer sends British Pound Sterling to a four-week lowBritish Pound Sterling trades beneath 1.3300 against the Dollar on Monday, roughly 0.3% lower on the day and back at ground it last held in the opening days of July. It gets there at the end of the strongest run of British data since the spring, which is the part worth sitting with. The Dollar itself did close to nothing all session.

The past week handed Britain the sort of data run its currency has been waiting for. Retail sales rose 1% in June against expectations of a small decline, helped by warm weather and World Cup spending. Consumer confidence climbed to a six-month high in July, and preliminary business activity surveys put the private sector back into expansion ahead of forecasts. Read more...

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The de-escalation of the Middle East conflict is a relief for major central banks as Oil prices slide as the US paused attacks on Iran over the weekend. The US President Donald Trump warned of further military action if negotiations between Washington and Tehran fail. He said that attacks would be “very powerful.” Read more...

The Pound Sterling retreats by 0.13% even though the Greenback is flat during the day, as risk appetite shifted sour on news that a Chinese state-backed company is producing chipmaking machines, prompting a sell-off in ASML, the Dutch-based company.  The GBP/USD trades at 1.3305, after reaching a high of 1.3363. Read More...

British Pound strengthens beyond mid-1.3300s vs weak USD amid fresh Iran diplomacy hopesThe GBP/USD pair builds on Friday's modest bounce from a three-week low and gains strong follow-through positive traction at the start of a new week. This marks the second straight day of a positive move and lifts spot prices above mid-1.3300s during the Asian session amid a broadly weaker US Dollar (USD). Read More...

British Pound rises as Oil slide softens USD, Fed hike bets increaseThe Pound Sterling advances by some 0.20% on Friday as Oil prices tumble, weighing on the US Dollar, while the US-Iran conflict signals a further escalation, which market participants ignored. Despite registering daily gains, the GBP/USD is poised to finish the week with losses of nearly 0.70%. Read More...