GBP/USD rose to 1.3403 on Wednesday, with British politics taking centre stage for investors.
The market is assessing the upcoming change of prime minister, with Andy Burnham set to take office on 20 July. Of additional interest is the potential candidate for the new Chancellor of the Exchequer. In betting markets, Ed Miliband is considered the favourite, whom investors perceive as a supporter of more active fiscal spending.
At the same time, market participants are monitoring escalating tensions in the Middle East, rising oil prices, and increased inflation risks. The United States has continued its strikes on Iran following Donald Trump’s restoration of a naval blockade on Iranian shipping and his proposal for a 20% fee to cover the costs of securing the Strait of Hormuz.
Against this backdrop, markets have strengthened expectations of further rate hikes from the Bank of England. Investors are now almost fully pricing in two rate increases in 2026, with a September hike already largely reflected in quotes.
In the US, weaker-than-expected inflation data for June has eased pressure on the Federal Reserve. However, Christopher Waller warned that the regulator could tighten policy again if inflation remains above the 2% target.
Technical Analysis
On the H4 GBP/USD chart, the market is shaping a growth wave towards 1.3451. A wide consolidation range is practically forming around the 1.3393 level. An upside breakout from this range would open potential for the wave to continue to 1.3453. A downside breakout would suggest the potential for the wave to continue to 1.3333, with the prospect of the trend extending to 1.3090. Technically, this scenario is confirmed by the MACD indicator, whose signal line is above the zero level and pointing strictly downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3400 level, currently extending down to 1.3370. An increase to 1.3451 is expected, followed by a decline to 1.3330. Technically, this scenario is confirmed by the Stochastic oscillator, with its signal line below the 80 level and pointing strictly downwards to 20.
Conclusion GBP/USD has edged higher as markets focus on the upcoming UK political transition, with Andy Burnham set to become prime minister on 20 July. The potential appointment of Ed Miliband as Chancellor-seen as favouring more active fiscal spending-adds an element of intrigue. Meanwhile, geopolitical tensions in the Middle East, including renewed US strikes on Iran and a proposed 20% fee for securing the Strait of Hormuz, have pushed oil prices higher and reinforced Bank of England tightening expectations. Markets are now pricing in two rate hikes for 2026, with September already priced in. In the US, softer inflation data has eased pressure on the Fed, though officials remain vigilant. Technically, the pound may see further upside towards 1.3451 before a potential pullback, with the broader direction hinging on UK political developments and geopolitical risks.
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By the time the Bank of Canada announces its policy decision today, the Canadian Dollar has already built a powerful foundation for further gains. USD/CAD has fallen to its lowest level in nearly a month, supported not by a single catalyst but by three reinforcing forces: a broad retreat in the US Dollar after softer inflation data, higher oil prices that strengthen Canada’s export outlook, and growing expectations that the Bank of Canada may sound more hawkish than markets anticipated only a week ago.
The first two drivers have already reshaped the currency outlook. June’s weaker-than-expected US CPI prompted investors to scale back Federal Reserve tightening expectations, weighing on the Dollar across major currency pairs. At the same time, Brent crude has surged above $86 as renewed US-Iran hostilities threaten energy supplies through the Strait of Hormuz. For Canada, rising oil prices are more than just a global inflation story—they improve the country’s terms of trade and typically provide direct support for the Canadian Dollar, helping explain why the Loonie has outperformed most of its peers following the inflation data.
The Bank of Canada now has an opportunity either to reinforce or challenge that momentum. Economists overwhelmingly expect a sixth consecutive hold at 2.25%, making the decision itself unlikely to surprise. The more important question is whether Governor Tiff Macklem adjusts his message in response to oil’s renewed surge. His previous characterization of policy as balancing weaker growth against energy-driven inflation was formed before Brent’s latest rally, meaning the Monetary Policy Report may already understate current inflation risks. Markets will therefore pay closer attention to Macklem’s live assessment than to the published projections.
That leaves the accompanying statement and Macklem’s press conference as the key market events. Investors will focus on whether the Governor continues to describe policy as a balanced dilemma or acknowledges that the renewed energy shock has tilted inflation risks higher. Any discussion of the ongoing CUSMA trade review will also be closely watched, as it remains an important downside risk to Canada’s growth outlook. Even without signaling an imminent rate increase, a modestly more hawkish tone could encourage markets to further increase expectations of tightening in early 2027, where pricing is already becoming increasingly balanced.
Technically, USD/CAD is approaching an important inflection point. While the decline from 1.4247 has accelerated, it is still viewed as a correction within the broader uptrend from 1.3480. Strong support is expected between former resistance at 1.3965 and 38.2% retracement of 1.3480 to 1.4247 at 1.3954. Break of 1.4159 minor resistance will indicae that the correction has completed.
However, a decisive break below 1.3954/65 would suggest the advance from 1.3480 has completed as a three-wave corrective rebound after failing near 61.8% retracement of 1.4791 to 1.3480 at 1.4290. Such a development would shift the near-term technical outlook decisively in favour of further Canadian Dollar strength.
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GBP/JPY trades in a narrow range on Tuesday as market sentiment remains fragile amid escalating tensions between the US and Iran, which are driving Oil prices higher once again. At the time of writing, the cross trades around 217.10 as the Japanese Yen (JPY) remains broadly weak.
Higher Oil prices are weighing on the Yen as Japan relies heavily on imported energy. At the same time, the inflationary impact of rising energy costs is reinforcing expectations that major central banks, including the Bank of England (BoE), may need to raise interest rates.
The BoJ remains on a tightening path but continues to lag behind its global peers, with wide interest rate gaps giving the British Pound (GBP) an advantage over the Yen and keeping GBP/JPY tilted to the upside.
Still, traders remain cautious about chasing GBP/JPY higher amid the growing risk of intervention by Japanese authorities as USD/JPY hovers near 40-year highs above 160.
Technical analysis: 4-hour chart
On the four-hour chart, GBP/JPY is retesting immediate resistance at the Bollinger Bands’ middle band near 217.09 while holding comfortably above the lower band at 216.41.
Momentum is moderating from recent overbought extremes, with the Relative Strength Index (RSI) near 54, while the Moving Average Convergence Divergence (MACD) indicator stays slightly negative, hinting at a slower but still constructive upside phase rather than a strongly impulsive rally.
On the upside, a clear break above the Bollinger Bands’ middle band would expose the upper band at 217.77. On the downside, initial support lies at the lower band at 216.41. A deeper pullback could expose the horizontal support levels at 215.50, 214.50, 213.50 and 212.50.
Technical analysis: Daily chart
On the daily chart, GBP/JPY maintains a bullish structure, forming a series of higher highs and higher lows. The cross trades above the Bollinger Bands’ middle band at 215.19 and holds above the nearby horizontal support at 216.50, keeping the broader upside bias intact.
The Relative Strength Index (RSI) stands at 61, reflecting firm positive momentum without entering overbought territory, while the Moving Average Convergence Divergence (MACD) remains positive, suggesting that buyers retain control.
On the upside, immediate resistance is seen at the upper Bollinger Band near 218.43, where gains could face some resistance. On the downside, initial support lies at 216.50, followed by the middle Bollinger Band at 215.19. A break below these levels could expose the lower Bollinger Band at 211.94, ahead of the horizontal support at 210.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen Price Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.21%-0.28%-0.16%-0.34%-0.36%-0.88%-0.40%EUR0.21%-0.07%0.06%-0.13%-0.15%-0.66%-0.18%GBP0.28%0.07%0.13%-0.05%-0.06%-0.59%-0.12%JPY0.16%-0.06%-0.13%-0.18%-0.22%-0.74%-0.27%CAD0.34%0.13%0.05%0.18%-0.04%-0.54%-0.07%AUD0.36%0.15%0.06%0.22%0.04%-0.52%-0.04%NZD0.88%0.66%0.59%0.74%0.54%0.52%0.48%CHF0.40%0.18%0.12%0.27%0.07%0.04%-0.48% 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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
ING’s Francesco Pesole argues that the EUR/USD short-term rate differential is currently supporting the Euro as Gulf tensions rise, helped by a recovery in EUR front-end rates. However, he doubts this can last if Oil and Gas prices keep climbing, given limited scope for more ECB hikes and worsening eurozone terms of trade. ING warns that EUR/USD could risk a move toward 1.10 under higher energy prices.
Euro buoyed by rates for now"The EUR:USD short-term rate differential is – for now – helping to keep EUR/USD afloat in this Gulf re-escalation. The two-year swap rate gap has re-tightened around 15bp since the start of July, primarily because the rebound in oil prices happened at a time when ECB hike bets were dwindling, leaving more upside room to recover for EUR front-end rates."
"We aren’t convinced this rate gap can offer sustainable support to EUR/USD if energy prices continue to rise though."
"Markets may find it harder to price in more than two ECB hikes by year-end (now, 46bp) considering the less hawkish stance by ECB officials of late, and the medium-term negative implications of an energy crisis – combined with Fed tightening – for the EUR, tend to outweigh the positive of EUR hikes."
"The spike in gas prices is particularly concerning, as it weighs on the eurozone’s terms of trade more than oil."
"In a scenario where Brent returns to $90-100/bl and TTF around €55-60/MWh, a move to 1.10 becomes a tangible risk in EUR/USD."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Escalating tensions between the US and Iran have once again pushed crude oil prices higher, providing further support for the US dollar. The greenback has performed particularly well against lower-yielding currencies, such as the Swiss franc, as investors seek both safety and higher returns while reassessing the inflation outlook. Although the euro has held up better than some of its peers, thanks to expectations that the European Central Bank may have to tighten its policy further, the balance of risks remain for the downside. If oil prices continue climbing, energy costs are likely to become a more powerful driver of FX markets than interest rate differentials, leaving the EUR/USD forecast increasingly bearish.
Oil-driven inflation fears revive the dollar Following that weak US jobs report, the dollar lost some momentum but it had now regained it as markets begin to price in the growing risk that renewed disruptions in the Gulf could tighten global energy supplies. Brent crude has climbed to around $87 a barrel, but current pricing still suggests investors are not fully convinced a major supply shock is imminent.
That leaves scope for both oil and the dollar to extend their gains should tensions escalate further. If you recall, oil prices reached north of $110 at the height of the crisis a few months ago, and spent majority of that time around the $100 level.
But unlike earlier in the year, the Fed is now not offering any forward guidance following its hawkish shift in June. That has encouraged markets to speculate more freely about additional policy tightening, with traders now assigning a meaningful probability to a rate increase before the end of the summer.
Warch or CPI unlikely to cause fireworks Attention now turns to Chair Kevin Warsh’s testimony before Congress, although he is expected to maintain his preference for avoiding strong policy signals. Several other Fed officials are also due to speak, while the latest US inflation figures could reinforce expectations that policymakers may have to tighten policy. Even if headline inflation eases because of earlier declines in energy prices, sticky core inflation is unlikely to provide much reassurance. What’s more, the latest upsurge in oil prices will shift inflation expectations higher for the coming months.
So, markets may not pay too much attention to a small miss in CPI, if we get one. Anyway, the headline figure is expected to print 3.8% year-on-year for June, down from 4.2% in May. Core CPI is seen easing modestly to 2.8% from 2.9%.
Euro supported by yields, but energy remains a headwind The euro has avoided sharper losses largely because eurozone bond yields have risen alongside US Treasury yields, preventing a significant widening in transatlantic rate differentials.
Markets continue to expect further ECB tightening this year, although policymakers have adopted a more cautious tone recently. That leaves limited room for expectations to become significantly more hawkish from here.
Meanwhile, the outlook for Europe is becoming increasingly complicated by higher energy prices. Rising natural gas costs pose a much greater challenge for the eurozone economy than for the United States. Should Brent crude climb towards the $100 area, the negative impact on Europe’s economy could easily outweigh any support generated by higher ECB rates, increasing the likelihood of a deeper EUR/USD decline.
Technical EUR/USD forecast: Bearish pattern points to further weakness The technical picture also continues to favour the bears. The EUR/USD remains confined within a bearish flag formation following its recent correction. A decisive break beneath the lower boundary of that pattern would strengthen the case for another leg lower, initially exposing the recent swing low around 1.1324.
Source: TradingView.com Below there, the 1.1300 area becomes the next key objective for the EURUSD chart. That level also coincides with the 127.2% Fibonacci extension of the March-to-April rally, making it an important technical support zone.
Given the combination of rising energy prices, improving dollar sentiment and the prospect of further Fed tightening, rallies may continue to attract sellers.
On the upside, initial resistance is located around 1.1450, with a stronger barrier between 1.1480 and 1.1500.
With the eurozone economic calendar relatively light in the days ahead, the EUR/USD forecast is tilted to the downside. The pair is likely to remain driven primarily by developments in oil markets, geopolitical headlines and evolving expectations for US monetary policy rather than domestic European data.
The Canadian Dollar (CAD) trades higher against its major currency peers, except antipodeans, during the European trading session on Tuesday. The USD/CAD pair declines 0.25% to near 1.4120 at the time of writing as the Loonie gains amid improvement in the appeal of currencies from economies, such as Canada, which are net Oil exporters.
The United States (US) economy is also a net energy exporter, but the US Dollar faces selling pressure ahead of the Consumer Price Index (CPI) data for June release at 12:30 GMT.
At press time, the WTI Oil price trades 2.73% higher to near $80.00, the highest level seen in almost a month. Oil prices have increased significantly as US President Donald Trump claims that Washington is the rightful recipient of toll fees near the Strait of Hormuz.
On the domestic front, investors await the Bank of Canada’s (BoC) monetary policy announcement due on Wednesday, in which it is expected to leave interest rates unchanged at 2.25%. Investors will pay attention to comments regarding the outlook on inflation and the economy.
Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% lower to near 101.18.
USD/CAD technical analysis
Bias: USD/CAD trades lower at around 1.4120, retaining a mildly bearish near-term bias as it remains capped by the 20-day exponential moving average (EMA) at 1.4136.
Momentum: Price action sits just under this dynamic resistance, hinting at a consolidation phase after the recent pullback, while the Relative Strength Index (RSI) around 52 on the daily chart suggests neutral momentum rather than strong directional conviction.
Resistance: On the topside, immediate resistance is located at the 20-day EMA at 1.4136, and a daily close above this barrier would ease current downside pressure and open the way for a more constructive recovery. Looking up, the major barrier would be the yearly high at around 1.4248.
Support: On the downside, the pair could extend its decline towards the June 18 low at 1.4095; below that, the downside momentum could accelerate, and the pair could fall towards the psychological level of 1.4000.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator BoC Interest Rate Decision The Bank of Canada (BoC) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoC believes inflation will be above target (hawkish), it will raise interest rates in order to bring it down. This is bullish for the CAD since higher interest rates attract greater inflows of foreign capital. Likewise, if the BoC sees inflation falling below target (dovish) it will lower interest rates in order to give the Canadian economy a boost in the hope inflation will rise back up. This is bearish for CAD since it detracts from foreign capital flowing into the country.
The Pound to Canadian Dollar (GBP/CAD) exchange rate slipped on Monday as renewed conflict between the US and Iran lifted oil prices and supported the commodity-linked Canadian Dollar.
At the time of writing, GBP/CAD was trading at CA$1.8931, down around 0.2% on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.891014 (-0.36%)
Euro to Canadian Dollar (EUR/CAD): 1.611545 (-0.28%)
Dollar to Canadian Dollar (USD/CAD): 1.41364 (-0.15%)
DAILY RECAP:
The crude-linked Canadian Dollar (CAD) firmed on Monday as escalating tensions in the Middle East triggered a rise in global oil prices.
After a lull in the fighting on Friday, hostilities between the US and Iran resumed on Sunday following an Iranian strike on a container ship in the Strait of Hormuz. The US responded by attacking Iranian targets, with Tehran further retaliating by targeting US allies in neighbouring Gulf states.
Markets are growing increasingly concerned that the conflict could intensify further, limiting shipping in the region. As a result, oil prices rose around 4% at the open on Monday. Although crude trimmed some of these gains as the session went on, CAD remained supported.
Meanwhile, the Pound (GBP) was mixed on Monday as a lack of UK economic data left the currency rudderless.
Sterling was able to avoid steep losses against the rising Canadian Dollar thanks to ongoing political optimism in the UK, with GBP investors remaining confident that the political uncertainty that has dogged the Pound over the past year was coming to an end.
Near-Term GBP/CAD Forecast: BoE Comments to Impact the Pound? Looking forward, Tuesday’s session starts with a speech from Bank of England (BoE) Governor Andrew Bailey.
Bailey has stuck to a cautious tone in recent weeks, arguing that the bank ought to wait and see how inflation plays out before considering adjusting policy. However, with global energy prices rising amid renewed US-Iran tensions, the Pound could tick higher if the BoE chief strikes a more hawkish chord.
Meanwhile, oil price dynamics are likely to drive the ‘Loonie’. CAD could remain supported if crude continues to climb amid escalating tensions in the Middle East.
The GBP/USD pair retreated from a multi-week peak of 1.3452 toward following a sudden flare-up of US-Iran conflict The escalating geopolitical risk revived global safe-haven demand for the US dollar and pushed crude oil prices sharply higher While near-term technicals point to range-bound consolidation, the medium-term path remains tied to UK GDP growth and central bank divergence. The GBP/USD pair reached a high of approximately 1.3452 last week, its strongest performance since mid-June, driven by increased economic optimism in the UK. However, this upward trend paused at the start of the new trading week.
Geopolitical tensions between the United States and Iran, specifically concerning shipping lanes in the Middle East, caused a significant market reaction. This led to a decline in the GBP/USD pair, bringing it back to around 1.3383 and raising concerns about the durability of sterling’s recent gains.
How Did We Get Here? Sterling’s upward movement last week was primarily influenced by expectations regarding the Bank of England’s monetary policy. Market participants have factored in at least one interest rate increase anticipated for later in 2026, with a possibility of a second, reflecting ongoing inflation concerns. Additionally, political transitions, including the recent resignation of Keir Starmer and the expected leadership of Andy Burnham, contributed to a more stable market sentiment.
However, market sentiment has recently shifted. The weekend saw significant missile and drone exchanges between US and Iranian forces. Reports indicate that Iran launched attacks on American installations in the Gulf and potentially closed the Strait of Hormuz.
This development led to a jump in Brent crude prices of around 3-4% as trading commenced in Asia. According to Reuters, this combination of rising oil prices and inflation fears, coupled with a move towards safe-haven assets, strengthened the US dollar globally.
During periods of heightened military tension, the US dollar typically serves as a primary safe-haven asset. This often prompts institutional investors and corporate treasuries to quickly reallocate capital away from riskier assets and into more liquid U.S. Treasury securities.
The Dollar Has The Upper Hand In The Near-Term In the near term, the GBP/USD exchange rate will probably see some selling, and the pair will likely be range-bound. While the geopolitical situation is causing some choppiness now, it probably won’t change the overall direction for the long term. Typically, during these kinds of crises, investors flock to the dollar for safety. However, this effect usually doesn’t last if tensions ease or talks begin again.
Looking further ahead, though, this conflict probably won’t drastically change the bigger economic picture. The British pound is in a stronger position than it was in past years. The UK economy has shown consistently positive surprises in its data, and the upcoming GDP numbers are expected to show a good recovery.
How Should Investors Position Themselves? Investors should be careful right now. If you hold British pound assets, you might want to consider protecting yourself against the dollar getting stronger, perhaps by using options or spreading out your currency holdings.
For traders, a more sensible move is to see dips as opportunities to buy rather than signs of a major downturn. While at it, be sure to pay close attention to the Consumer Price Index (CPI) report coming out on Tuesday. Also, keep an eye out for any indications that the Strait of Hormuz might be disrupted for a long time, as that would be a real threat to this outlook.
The Canadian Dollar (CAD) trades firmly against its major currency peers, but is flat at around 1.4160 against the US Dollar (USD) during the European trading session on Monday.
The Loonie outperforms as Oil prices have increased significantly, following the announcement that Iran has closed the Strait of Hormuz, a vital passage to almost one-fifth of the global energy supply, again. As of writing, the WTI Oil price is up 3.75%, above $74.00. Given that Canada is a net energy exporter, higher oil prices bode well for the Canadian Dollar.
Canadian Dollar Price Today The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Australian Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.09%0.14%0.32%0.06%0.34%0.01%0.03%EUR-0.09%0.06%0.22%-0.03%0.26%-0.04%-0.04%GBP-0.14%-0.06%0.17%-0.10%0.22%-0.08%-0.06%JPY-0.32%-0.22%-0.17%-0.27%0.03%-0.27%-0.23%CAD-0.06%0.03%0.10%0.27%0.30%0.02%0.04%AUD-0.34%-0.26%-0.22%-0.03%-0.30%-0.26%-0.24%NZD-0.01%0.04%0.08%0.27%-0.02%0.26%0.03%CHF-0.03%0.04%0.06%0.23%-0.04%0.24%-0.03% 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 Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Over the weekend, Iran announced that the Hormuz would now be closed “until further notice”, as part of retaliation against several attacks from United States (US) military forces on various regions in Iran.
While the Canadian currency outperforms its major peers, it trades sideways against the US Dollar, as the safe-haven demand for the latter has improved amid renewed aggression in the Middle East. In the European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.12% higher to near 101.10.
Going forward, investors will focus on the US Consumer Price Index (CPI) data for June and the Bank of Canada’s (BoC) monetary policy announcement.
USD/CAD technical analysis
USD/CAD trades at 1.4163, holding a constructive near-term bias as it trades above the 20-day Exponential Moving Average (EMA) at 1.4139. The pair is consolidating near recent highs, and the Relative Strength Index (RSI) at around 62 has eased out of overbought territory on the daily chart, suggesting the latest pause is more a cooldown than a clear reversal at this stage.
On the downside, immediate support is seen at the 20-day EMA around 1.4139, which coincides with the November 2025 high that used to be a major resistance for the pair earlier; below that, the June 18 low at 1.4095 is the key support zone. On the upside, the pair could revisit its yearly high at 1.4248 if it breaks above 1.4200.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Crude oil prices rose at the start of the week after President Trump said the ceasefire was over and fighting had started again. Stock markets fell, while USD/JPY moved back toward recent highs. Later in the week, the U.S. agreed to continue talks with Iran, which caused oil prices to fall again.
There was little major economic data during the week, so markets focused on the Federal Reserve meeting minutes. The minutes showed that a few officials thought interest rates could be raised, but they still supported keeping rates unchanged. This was close to what markets expected, so the reaction was limited.
In Japan, Finance Minister Katayama said the government may encourage the GPIF and other pension funds to invest more in Japanese assets. She also spoke about gradual interest rate rises and more government bond products for households. These comments supported the yen and Japanese stocks, while higher-than-expected producer prices showed that inflation remains a concern.
Markets This Week U.S. Stocks The Dow fell from record highs early in the week as oil prices rose after fighting restarted in the Middle East. However, the uptrend stayed in place as the U.S. and Iran continued talks, helping the index close above its 10-day moving average. Buying short-term dips may remain the easier strategy, although higher-than-expected U.S. inflation data could create a chance to sell this week. Resistance levels are at 53,000, 53,500 and 54,000. Support is seen at 52,000, 51,000, 50,000, 49,500 and 49,000.
Japanese Stocks The Nikkei continued to move lower as investors took profits and higher oil prices worried the market. However, the index recovered late in the week after Finance Minister Katayama encouraged more investment in Japanese stocks. With selling pressure still strong near 70,000, range trading may remain the best approach this week. Resistance is seen at 70,000, 71,000, 72,000, 73,000, 74,000 and 75,000, while support is at 67,500, 66,500 and 65,000.
USD/JPY USD/JPY tested recent highs early in the week as oil prices moved higher. The pair then fell after the Japanese government called for pension funds to invest more in domestic assets, raising the possibility of less investment overseas. The close below the 10-day moving average is bearish, but higher U.S. interest rates should continue to support the pair unless Japanese authorities intervene. Range trading still appears to offer the best opportunities in the short and medium term. Resistance is at 162.00, 162.50, 163.00 and 165.00, while support is seen at 161.00, 160.50, 160.00, 159.00, 158.00, 157.00, 156.00, 155.50 and 155.00.
Gold Gold struggled to move higher early in the week as a stronger U.S. dollar weighed on the market. Prices later returned to the 10-day moving average, which provided support. With U.S. inflation data due this week, gold may stay volatile, creating range-trading opportunities between $4,000 and $4,200. Resistance is at $4,200, $4,300, $4,400, $4,500, $4,600 and $4,665, while support is at $4,100, $4,050, $4,000, $3,900, and $3,800.
Crude Oil Oil rose quickly after President Trump announced renewed fighting with Iran, but the market still expects a positive result from negotiations. Resistance held near $75, and although the recent downtrend has ended, large gains still look unlikely. Range trading between $67.50 and $75 may be the best short-term strategy. Resistance is at $75, $80, $85, $90, $95 and $100, while support is at $67.50, $65, and $60.
Bitcoin Bitcoin continued its recent recovery as buyers returned to the market. Resistance held near $65,000 and volatility remained low, but with the 10-day moving average now rising, buying on weakness may be a better strategy than range trading this week. Resistance is at $65,000, $75,000, $80,000, $85,000, and $90,000, while support is at $60,000, $55,000 and $50,000.
This Week’s Focus Monday: U.S. OPEC Meeting Tuesday: Australia NAB Business Confidence, Japan Industrial Production, China Trade Balance, U.S. CPI Wednesday: Japan Reuters Tankan Index, China GDP, Industrial Production and Chinese Unemployment Rate, E.U. Industrial Production, U.S. PPI and Beige Book Thursday: U.K. GDP and Industrial Production, E.U. Trade Balance, U.S. Retail Sales and Pending Home Sales Friday: E.U. Current Account and CPI, U.S. Housing Starts, Industrial Production and Michigan Consumer Sentiment Several important U.S. reports are due this week, including CPI, PPI, retail sales and consumer confidence. Traders will watch them for clues about when U.S. interest rates may rise. News about talks between the U.S. and Iran will also be important for oil and other markets, while traders will watch for more action from Japan to support the yen.
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Oil is back in the driver’s seat, and both the pound and the aussie are feeling its grip. The Bank of England held rates at 3.75% in June, but with UK inflation at 2.8% and crude oil climbing on renewed Middle East tensions, markets now lean towards a hike before year-end. Down under, the Reserve Bank of Australia held its cash rate at 4.35% after three straight increases, with core inflation stuck at 3.6%, keeping the door open for further tightening. Two hawkish central banks, one shared inflationary culprit—yet it’s the existing 60-basis-point rate gap in Australia’s favour that is giving GBP/AUD its current shape, with the pair holding firm near the 1.93 handle as traders watch which bank blinks first.
Technical Outlook
GBP/AUD pits two currencies backed by hawkish central banks against each other. After a sharp downtrend, the pair found a floor in May 2026 and has since reversed into a medium-term uptrend as sterling claws back ground against the aussie. Price is now testing a key resistance zone that has previously capped upside attempts, making the coming sessions pivotal.
Bullish Scenario
Several sessions of strong bullish momentum have kept sterling supported. The pair is testing a crucial resistance zone at 1.9350–1.9400, which has rejected price before.
A confirmed break above could open the path towards the next resistance at 1.9520–1.9550.
Such a breakout would likely require fundamental support, such as further escalation in the Middle East or an even more hawkish BoE.
Bearish Scenario
Price could reject the resistance zone once again, reinforcing it as a key barrier.
A bearish RSI divergence on the 4H chart adds weight to this scenario, with price posting higher highs while the RSI prints lower highs—a sign of fading momentum.
The ascending trendline is now the nearest relevant support; a break below could expose the intermediate zone at 1.9080–1.9120, where price may pause and consolidate.
Should tensions ease or fresh UK political developments emerge, sterling could lose ground, breaking below this zone to test the next support at 1.8780–1.8820.
Ultimately, GBP/AUD’s next move will hinge on geopolitical and macroeconomic developments, alongside these key technical levels. Which of the two currencies will show greater strength in the sessions ahead?
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U.S. Dollar Pulls Back As Demand For Safe-Haven Assets Declines
DXY 090726 4h Chart U.S. Dollar Index is losing some ground as traders react to the Initial Jobless Claims report and focus on the pullback in the oil markets.
The Initial Jobless Claims report indicated that 215,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 218,000.
Today, traders also focused on the Existing Home Sales report. The report showed that Existing Home Sales decreased by -2.4% month-over-month in June, compared to analyst consensus of +0.7%.
Oil prices pulled back by -4% despite escalation in the Middle East. Falling oil prices put pressure on the American currency as demand for safe-haven assets declined.
In case U.S. Dollar Index settles below the 100.80 level, it will head towards the support at 100.50 – 100.65. On the upside, a successful test of the resistance at 101.15 – 101.30 will open the way to the test of the next resistance level at 101.80 – 101.95.
EUR/USD Tests Resistance At 1.1420 – 1.1435 EUR/USD 090726 4h Chart EUR/USD gained some ground as traders focused on Germany’s Exports report. The report indicated that Exports increased by +0.9% month-over-month in May, compared to analyst forecast of -0.3%.
If EUR/USD manages to settle above the resistance at 1.1420 – 1.1435, it will head towards the next resistance level at 1.1500 – 1.1515. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Tests Multi-Week Highs GBP/USD 090726 4h Chart GBP/USD continues to move higher as traders focus on general weakness of the U.S. dollar and monitor dynamics of the oil markets.
If GBP/USD stays above the 1.3400 level, it will head towards the resistance level at 1.3450 – 1.3465. On the support side, a move below the support at 1.3335 – 1.3350 will open the way to the test of the next support level at 1.3250 – 1.3265.
USD/CAD 090726 4h Chart USD/CAD is moving lower as traders react to the strong rebound in precious metals markets. Other commodity-related currencies are also moving higher in today’s trading session.
The nearest support level for USD/CAD is located in the 1.4125 – 1.4140 range. A successful test of this level will open the way to the test of the next support at 1.4010 – 1.4025.
USD/JPY Moves Lower As Treasury Yields Fall USD/JPY 090726 4h Chart USD/JPY is losing some ground as traders react to the pullback in Treasury yields, which was triggered by falling oil prices. The yield of 2-year Treasuries declined towards the 4.15% level, while the yield of 10-year Treasuries pulled back towards the 4.53% level.
There are no signs of interventions from the Bank of Japan, and it looks that BoJ is not ready to provide additional support to the Japanese yen at current levels.
If USD/JPY pulls back below the support at 161.50 – 162.00, it will head towards recent lows near the 160.50 level. On the upside, a move above 162.80 will push USD/JPY towards the 165.00 level. It should be noted that USD/JPY has not traded at 165.00 since June 1986.
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The pound has ben strengthening all week, and despite a renewed flare-up in geopolitical tensions between the US and Iran, which pushed crude oil prices sharply higher, the cable has barely flinched. But if the situation deteriorates, and oil prices remain elevated for longer, this will prompt investors to reassess the outlook for US monetary policy, which, in turn, could negatively impact the GBP/USD forecast. For now, side-ways trading is likely to dominate the agenda, with the US dollar likely to find dip buyers ahead of US CPI next week.
While the reaction in foreign exchange has so far been relatively restrained compared with moves in energy markets, the implications for monetary policy are becoming increasingly difficult to ignore. Higher oil prices threaten to slow the disinflation process that has underpinned expectations for easier central bank policy this year. If energy prices remain elevated, the Federal Reserve may find itself keeping interest rates higher for longer, and perhaps deliver some rate hikes later this year.
That remains supportive for the US dollar, particularly against currencies where domestic fundamentals are becoming less convincing.
Not much for US dollar until CPI release next week With little fresh guidance from the minutes of the FOMC’s June meeting, attention now shifts to next week’s US CPI report and Fed Chair Kevin Warsh’s testimony before Congress. Both events have the potential to reshape expectations for the remainder of the year. Against a backdrop of firmer energy prices, the balance of risks arguably favours a more hawkish interpretation of incoming inflation data, which should continue to provide underlying support for the greenback. Today’s US jobless claims data pointed to a healthy jobs market.
GBP/USD forecast: Political uncertainty could cap sterling’s recovery Sterling has been one of the stronger-performing major currencies in recent weeks, helped in part by the immediate reduction of uncertainty about Keir Starmer after he stepped down. But this doesn’t mean political uncertainty is over. Far from it. Attention is gradually shifting towards the expected change in UK leadership later this month. Investors will be watching closely for the appointment of the next Chancellor, particularly given growing speculation that fiscal policy could take a more expansionary direction.
The challenge for any incoming government is that public finances remain under considerable strain. With limited room for additional spending without raising taxes, expectations for meaningful fiscal stimulus may ultimately prove difficult to deliver.
At the same time, markets are no longer expecting the Bank of England to tighten policy further this year. That leaves sterling increasingly reliant on external factors, particularly oil prices and developments in the US dollar, rather than domestic monetary support.
Technical GBP/USD forecast: Cable reaches 200-day MA Source: TradingView.com From a technical analysis perspective, the GBP/USD forecast continues to favour the downside despite the impressive gains it has made in the last couple of weeks. If we see a sharp reversal around the point of origin of the last breakdown from around the 1.3400 region, where we also have the 200-day average converging, resulting in the breakdown of the short-term bullish trend line, then a return to support at 1.3270ish could be on the way. Otherwise, a slow drift towards 1.3500 could be the outcome if oil falls back.
Looking ahead, a stronger-than-expected US inflation report next week could accelerate downside momentum by reinforcing expectations that the Federal Reserve will maintain a restrictive policy stance. Conversely, any easing in Middle East tensions or signs that inflation pressures are once again moderating could allow sterling to recover some lost ground. For now, however, the path of least resistance appears to favour a firmer dollar, leaving the near-term GBP/USD forecast tilted modestly to the downside.
British Pound strengthens to near 1.3400 as UK political risk fadesThe GBP/USD pair gathers strength near 1.3395 during the Asian trading hours on Thursday, bolstered by fading domestic political uncertainty. However, hawkish minutes from the Federal Reserve (Fed) and renewed tensions between the US and Iran might support the US Dollar (USD) and cap the upside for the major pair.
Following the resignation of Keir Starmer in late June, UK political risk has eased significantly, lifting the Cable. The formal race to replace outgoing Prime Minister Keir Starmer begins on July 9. Frontrunner Andy Burnham is widely expected to become Prime Minister by July 20. Read more...
British Pound Sterling wins the day and stays stuck in the same trapGBP/USD trades just below 1.3400 on Wednesday, up around a quarter of a percent and once again leaning on the 200-day Exponential Moving Average (EMA) that has repelled every advance since the pair clawed back from its mid-June washout. Cable has recovered roughly two big figures from the 1.3150 area in under two weeks, and the reward for the effort is a ceiling it cannot break and a floor it refuses to leave.
The Pound's bid is not homegrown: Fresh US strikes on Iran sent Crude Oil surging more than 6% and dragged Bank of England (BoE) tightening expectations up with it. Markets now fully price a 25-basis-point hike by year-end, up from roughly three-quarters odds before President Trump declared the Versailles ceasefire over, and a November move trades better than even. The June hold at 3.75% already carried two dissenters voting for 4.00%, so the hawkish bloc only needs the energy shock to persist, and the Strait of Hormuz is supplying persistence daily. Read more...
Key Points:EUR/USD pulled back as traders reacted to the strong rally in the oil markets. USD/CAD moved lower despite the pullback in precious metals markets. USD/JPY gained ground, supported by rising Treasury yields.
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U.S. Dollar Moves Higher As Oil Prices Gain 5%
DXY 080726 4h Chart U.S. Dollar Index gains ground as traders prepare for the release of FOMC Minites and react to rising tensions in the Middle East.
President Trump said that U.S. could launch strikes against Iran and resume the blockade of country’s ports. Oil prices are up by more than 5% as traders react to the surprising escalation between U.S. and Iran. Rising oil prices could force Fed to be more hawkish, which is bullish for the American currency.
Currently, U.S. Dollar Index is trying to settle above the resistance at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will head towards the next resistance level, which is located in the 101.80 – 101.95 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in the near term.
EUR/USD Retreats Amid Worries About Hawkish Fed EUR/USD 080726 4h Chart EUR/USD is losing ground as traders focus on the strong rally in the oil markets. Demand for risk assets declined amid inflation fears, which was bearish for the European currency.
EUR/USD settled below the 50 MA at 1.1414 and is trying to settle below the 1.1400 level. If EUR/USD settles below 1.1400, it will head towards the support level, which is located in the 1.1350 – 1.1365 range.
GBP/USD Rebounds From Session Lows GBP/USD 080726 4h Chart GBP/USD is swinging between gains and losses as traders focus on geopolitical tensions and evaluate their next moves.
In case GBP/USD manages to settle above the support level at 1.3335 – 1.3350, it will head towards the next resistance, which is located in the 1.3450 – 1.3465 range.
USD/CAD 080726 4h Chart USD/CAD is losing some ground despite the strong pullback in precious metals markets. Gold is down by -1.5%, while silver pulled back by -4%. Other commodity-related currencies are mixed in today’s trading session.
In case USD/CAD stays below the 50 MA at 1.4203, it will head towards the nearest support level, which is located in the 1.4125 – 1.4140.
On the upside, a move above the 50 MA will push USD/CAD towards the resistance at 1.4225 – 1.4240. In case USD/CAD climbs above the 1.4240 level, it will head towards the next resistance, which is located in the 1.4335 – 1.4350 range.
USD/JPY Gains Ground As Treasury Yields Rise USD/JPY 080726 4h Chart USD/JPY is moving higher as traders focus on rising Treasury yields. The yield of 2-year Treasuries moved above the 4.23% level, while the yield of 10-year Treasuries settled above 4.58%. Treasury yields are rising as traders react to recent developments in the Middle East and bet on hawkish Fed. In case oil prices continue to move higher, the Japanese yen will find itself under additional pressure.
From the technical point of view, USD/JPY settled above the resistance at 161.50 – 162.00 and is moving towards multi-decade highs near 162.80. In case USD/JPY settles above the 162.80 level, it will head towards the 165.00 level. It remains to be seen whether the Bank of Japan is ready to intervene as yen’s fundamentals are extremely bearish. Previous attempts to support the yen yielded no results.
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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.
EUR/USD forecast remains uncertain as renewed US-Iran tensions sends oil higher FOMC minutes coming up but market’s attention is on developments in the Middle East again EUR/USD selling contained relative as it holds inside bear flag Oil returns to the forefront of currency markets The EUR/USD edged only slightly lower, showing surprising resilience for now while European equity markets took the brunt of the sell-off, as tensions in the Middle East made an unwelcome return with renewed intensity. A sharp rebound in crude oil prices has quickly become the dominant market theme again, overshadowing economic data and forcing investors back into defensive positions.
Will tensions de-escalate quicker this time? Well, it is tough to say. Already, Trump has announced they will probably strike Iran again tonight. There will be retaliation from Tehran and things could get quite messy very quickly. Trump’s latest comments certainly don’t point to any de-escalation after he effectively dashed hopes that recent diplomatic progress could continue, reviving concerns over potential disruptions to global energy supplies.
Whether events develop into a prolonged confrontation remains uncertain. There is still scope for political rhetoric to soften over the coming days, but for now traders are once again having to price in geopolitical risk. That naturally favours the US dollar while simultaneously weighing on risk-sensitive assets, including European equities and the euro. Europe also relies heavily on energy imports, which makes the euro even more vulnerable.
The prospect of renewed disruption around the Strait of Hormuz also keeps stagflation risks firmly on investors’ radar. Higher energy prices would complicate the outlook for central banks at a time when many had been preparing for a more benign inflation environment.
EUR/USD forecast: US rates expectations remain supportive for dollar Against this backdrop, the publication of the latest Federal Reserve meeting minutes may struggle to attract its usual level of attention. Markets already have a fairly clear understanding of the Fed’s position, with policymakers remaining cautious about inflation risks.
If oil prices remain elevated, inflation expectations could become more persistent, giving the Fed more reason to keep policy restrictive for longer, and deliver some rate hikes later this year. That view continues to support US Treasury yields, maintaining one of the dollar’s strongest advantages over its major counterparts. This explains why, despite relatively resilient European economic data, investors have continued to favour the greenback lately.
EUR/USD technical analysis: bear flagging From a technical perspective, the EUR/USD forecast continues to point lower, even if we haven’t seen an immediate drop amid the geopolitical uncertainty yet. But with the pair showing a potential bear flag in the making, the pressure remains.
Source: TradingView.com The 1.1400 area remains an important near-term support level to watch on the daily EUR/USD chart. A decisive break beneath that zone would expose the 1.1300 handle.
On the upside, resistance around 1.1450 continues to cap advances. A sustained move above that level would shift attention towards the psychological 1.1500 mark, with 1.1575 representing the next significant upside objective.
In summary For the time being, however, the fundamental backdrop offers little justification for a sustained recovery. Unless incoming US economic data begins to weaken convincingly or expectations surrounding Fed policy changes materially, say as a result of significantly weaker oil prices (again, unlikely), the dollar’s combination of higher yields and safe-haven demand is likely to keep rallies in EUR/USD relatively limited. That leaves the broader EUR/USD forecast cautiously bearish over the near term.
HomeTechnical AnalysisIntraday Analysis 08.07.2026 Gold hits another roadblock
Intraday analysis covering GBPUSD , XAUUSD (The Gold) , and USOIL , highlighting recent price movements, key technical levels, and short-term momentum shifts across major markets.
GBPUSD hits resistance
Cable had a July to remember, with price action jumping over 200 pips since the beginning of the month.
The market mood has remained positive despite a slight retracement after hitting the 1.3400 zone. 1.3340 is needed if a full reversal is to happen, before a move towards the lower region of 1.3300. On the upside, a break above 1.3400 will lead to a continuation towards 1.3460. XAUUSD looking for direction
XAUUSD (The Gold)is looking to continue its trajectory even after hitting some resistance.
As the price now struggles to secure a move past 4150, the recent double bottom around 4120 is a critical floor to stabilise sentiment. A breach at the said level could trigger a round of liquidation, with the psychological level of 4000 as a potential target. If prices can remain above 4120, then 4190 will be on the radar for buyers as sentiment shifts once again. USOIL going nowhere
Oil is stuck and going nowhere since the previous sell-off.
Only a twist in the Middle Eastern tensions would cause a spike in prices, but for now, no news means no movement. Prices remain in consolidation between 68.00 and 70.00 with the RSI slowly creeping into the neutral zone. A break at one of those levels would see the next phase for the black gold as global tensions simmer. 72.50 is a potential target, with 64.00 being a critical support.
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The USD/CAD pair loses traction to near 1.4175 during the early European trading hours on Wednesday. Renewed US military strikes against Iran have boosted crude oil prices and provide some support to the commodity-linked Canadian Dollar (CAD) strengthens against the US Dollar (USD).
Reuters reported on Wednesday that the Islamic Revolutionary Guard Corps (IRGC) said they attacked US military sites in Bahrain and Kuwait after the US launched a wave of strikes against Iran in response to attacks on tankers in the Strait of Hormuz. It is worth noting that Canada is a major oil-exporting country, and high crude oil prices generally have a positive impact on the Loonie.
"For now, the market is keeping to the playbook that Tehran and Washington are still in a high-stakes game to gain leverage during the temporary truce, and that Tuesday’s incident would not descend back into a full-scale war," DBS analysts wrote in a research report.
Technical Analysis:In the daily chart, USD/CAD retains a bullish near-term bias as spot holds above the Bollinger Bands’ 20-period middle simple moving average and comfortably over the 100-day moving average. The pair is advancing along the upper half of the Bollinger envelope, while the Relative Strength Index (14) around 66 stays in positive territory but shy of overbought, suggesting firm upside pressure with some room for further gains before stretched conditions become acute.
On the topside, the first upside barrier emerges at the June 24 high of 1.4248. The next notable resistance is the Bollinger Bands’ upper band, coming in around 1.4315 and marking the immediate cap for the current advance.
On the downside, initial support is located at the Bollinger middle band at 1.4145. The crucual contention level is seen at the 1.4000 psychological level ahead of a deeper cushion at the lower band near 1.3975, with the 100-day moving average at 1.3827 reinforcing the broader bullish structure as long as USD/CAD holds above it.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar FAQs The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
USD/CAD edges lower on Tuesday even as the US Dollar (USD) holds firm, with the Canadian Dollar (CAD) drawing support from a modest rebound in crude Oil prices following renewed attacks on commercial vessels near the Strait of Hormuz. At the time of writing, the pair is trading around 1.4188.
West Texas Intermediate (WTI) crude Oil is trading around $70.30, up nearly 2.50% on the day.
Meanwhile, the US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is treading water near 101.00.
However, diverging monetary policy expectations between the Federal Reserve (Fed) and the Bank of Canada (BoC) could limit further gains in the Canadian Dollar (CAD).
Markets continue to expect the Fed to raise interest rates later this year to bring inflation back to its 2% target, even as softer-than-expected US labor market data have reduced expectations of a near-term rate hike.
The BoC is widely expected to leave interest rates unchanged for the remainder of the year, while keeping the door open to rate cuts if inflation continues to ease.
Technically, the broader outlook remains bullish, with USD/CAD consolidating in a two-week range near levels last seen in April 2025.
Technical Analysis:On the daily chart, USD/CAD holds well above the 100-day and 200-day Simple Moving Averages (SMAs), which reinforces a bullish near-term bias. Price is also holding over prior horizontal support at 1.4000 and the more immediate floor at 1.4150, keeping the pair well-supported despite a mild loss of momentum signaled by the Relative Strength Index (RSI) easing from overbought territory near 68 and a softening Moving Average Convergence Divergence (MACD) line slipping modestly below zero.
On the downside, initial support is seen at 1.4150, with a stronger structural cushion at the 1.4000 horizontal level. Below these, the 200-day SMA at 1.3845 and the 100-day SMA at 1.3822 form a deeper demand zone that would likely underpin any more pronounced pullback while the broader bullish structure remains intact.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar FAQs The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
The Pound to Canadian Dollar (GBP/CAD) exchange rate climbed to its strongest level in around a decade on Monday as persistently weak oil prices continued to undermine the commodity-linked Canadian Dollar.
At the time of writing, GBP/CAD was trading at CA$1.8971, having eased back slightly after touching a session high of CA$1.8980.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.89894 (+0.16%)
Euro to Canadian Dollar (EUR/CAD): 1.623308 (-0.04%)
Dollar to Canadian Dollar (USD/CAD): 1.42169 (+0.12%)
DAILY RECAP:
The Canadian Dollar (CAD) found itself under pressure on Monday, as weaker oil prices continued to weigh heavily on the commodity-linked currency.
Crude has fallen sharply since the US and Iran agreed an interim peace agreement, allowing shipping to resume through the Strait of Hormuz.
Brent crude – the global benchmark for oil – remains below $72 per barrel, its lowest levels since before the war began in late February and down from its mid-war peak of $113.
This sharp decline in crude has dragged the Canadian Dollar lower in recent weeks, with subdued prices continuing to pressure CAD on Monday.
Meanwhile, the Pound (GBP) enjoyed modest support on Monday as markets continued to unwind the political risk premium that has burdened Sterling in recent weeks.
MP Andy Burnham is largely expected to become the next Prime Minister, without a drawn-out leadership contest unsettling investors.
Burnham has sought to soothe markets since announcing his bid for Labour leader, committing to the government’s existing fiscal rules and laying out ambitious plans for the economy.
GBP investors have responded positively to Burnham’s rhetoric, helping GBP rally as political anxiety eases.
Near-Term GBP/CAD Forecast: Canadian PMI to Aid the ‘Loonie’? Looking forward, Canada’s latest Ivey PMI is due out on Tuesday afternoon. The survey is expected to reveal another acceleration in economic activity in June, with the index forecast to reach its highest level since September 2025, when it hit a 15-month peak.
If the PMI prints as anticipated, the Canadian Dollar could catch bids.
Meanwhile, oil price movements could continue to influence the commodity-linked ‘Loonie’. If crude prices remain subdued, this could offset the potential upside from the PMI results.
As for the Pound, UK data is in short supply on Tuesday, potentially leaving the British currency to trade without a clear direction.
Oil Rises as Hormuz Risks Offset Saudi Price Cuts and Higher OPEC+ Supply but Bearish Picture Remains Oil prices are rising on Tuesday, recovering from a four-month low near $67 a barrel as renewed concerns over shipping security in the Strait of Hormuz temporarily outweigh expectations of stronger global crude supplies.
Crude rebounded after reports that a tanker transiting the Strait of Hormuz was struck off the coast of Oman, highlighting that security risks remain elevated despite the reopening of the strategic shipping route.
While the Strait has resumed operations, shipping volumes remain below pre-conflict levels and investors remain alert to any disruption that could threaten global energy supplies. As a result, a modest geopolitical risk premium has returned to the market.
However, the broader outlook for oil remains bearish as attention shifts back to rising supply.
Saudi Aramco cut the August official selling price of its flagship Arab Light crude for Asian buyers, signalling intensifying competition for market share at a time when regional supply is recovering.
The move follows OPEC+'s decision to increase August production targets, reinforcing expectations that additional barrels will return to the market during the second half of the year. Combined with improving export flows from the Gulf, the supply outlook continues to point towards a better-supplied oil market, limiting the scope for any sustained recovery in prices.
Oil Forecast – Technical Analysis
Oil broke below its symmetrical triangle pattern and the 200-day SMA, falling to a four-month low near $67 before finding support. The RSI has moved into oversold territory, suggesting the recent sell-off may pause before the next directional move.
While prices have rebounded towards $70, the broader trend remains bearish.
Sellers will look for a break below $67 to expose the February low around $62.50, followed by the psychological $60 level.
Any recovery would first need to reclaim the 200-day SMA near $74. A move above there would bring $80 into focus.
GBP/USD rises for an eigth day, testing a key resistance GBP/USD has climbed to a three-week high near 1.34 as the U.S. dollar weakens following softer U.S. economic data and a moderation in Federal Reserve rate hike expectations.
The dollar has remained under pressure since last week's weaker-than-expected payrolls report, which showed slower job creation across April, May and June than markets had anticipated.
Yesterday's ISM Services PMI reinforced that narrative. While activity remained firmly in expansion territory at 54.0, broadly in line with expectations, the Prices Paid component fell sharply from 71.3 to 67.7, suggesting inflationary pressures continue to ease. At the same time, the employment index improved to 51.2, pointing to a labour market that is cooling gradually rather than deteriorating sharply.
Taken together, the data support the view that inflation may continue to moderate without a significant slowdown in economic activity, reducing the urgency for further Federal Reserve tightening.
Markets now see a 41% probability that the Fed will leave interest rates unchanged in September, up from 32% a week ago, weighing on the U.S. dollar.
However, sterling's upside may also prove limited as investors have similarly scaled back expectations for further Bank of England tightening. Markets are now pricing around a 70% probability of a single 25-basis-point rate hike this year, compared with expectations for two increases just a few weeks ago.
Bank of England Governor Andrew Bailey recently reiterated that inflation is expected to return to the Bank's 2% target, although the process may take longer than previously anticipated.
Looking ahead, the UK economic calendar is relatively quiet. The focus will be on the Bank of England's Financial Stability Report. Any indication that policymakers are becoming more concerned about financial conditions or economic risks could reinforce expectations for a cautious policy approach and weigh on sterling.
GBP/USD Forecast – Technical Analysis
GBP/USD has rebounded from the 1.3200 support zone, rising to test resistance around 1.3400, where the 50-day and 200-day SMAs converge.
The RSI has moved above 50, indicating improving bullish momentum.
A sustained break above the moving averages would expose 1.3500, where falling trendline resistance and the May swing high converge. A move above that level would create a higher high and open the door towards 1.3650.
Failure to break above the moving averages could see the pair drift back towards support at 1.3330. A break below there would expose the 1.3200 support zone once again.
GBP/USD started a recovery wave and surpassed the 1.3320 resistance. A key contracting triangle is forming with support at 1.3290 on the 4-hour chart. EUR/USD struggled to extend its recovery wave above the 1.1475 resistance. WTI Crude Oil prices are under pressure below the $72.50 pivot level. GBP/USD Technical Analysis The British Pound started a recovery wave above 1.3200 against the US Dollar. GBP/USD gained pace after it settled above 1.3250.
Looking at the 4-hour chart, the pair surged above the 100 simple moving average (red, 4-hour) and 1.3320. However, the bears defended the 1.3385 resistance and the 200 simple moving average (green, 4-hour).
A high was formed at 1.3384, and the pair started consolidating gains. There was a minor decline below 1.3350. If there is another decline, the pair might find support near 1.3290. Besides, there is a key contracting triangle forming with support at 1.3290.
The first major support could be near 1.3250. A downside break and close below 1.3250 might send the pair toward 1.3220. Any more losses could open the doors for a test of 1.3150.
On the upside, the bears might remain active near 1.3385. The next major resistance might be 1.3400. A close above 1.3400 could spark a sharp increase. In the stated case, the bulls could aim for a move to 1.3500.
Looking at EUR/USD, the bulls attempted a recovery wave, but they need a daily close above 1.1475 for upside continuation.
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British Pound gains as easing Fed hike bets weigh on US DollarGBP/USD continues its winning streak for the ninth consecutive day, trading around 1.3390 during the Asian hours on Tuesday. The currency pair rises as the US Dollar (USD) faces headwinds as market participants scale back expectations for Federal Reserve (Fed) rate hikes this month and in September. This shift in sentiment followed a cooling employment report that revealed fewer jobs added across April, May, and June than Wall Street had anticipated.
Furthermore, a recent drop in crude oil prices, driven by an OPEC+ production boost and a US-Iran peace deal, has alleviated broader inflationary pressures, softening the urgency for an aggressive Fed policy outlook. Read more...
Pound Sterling rallies into its own coronationGBP/USD has quietly put together eight consecutive higher daily closes, a grind from near 1.3150 that has delivered the pair directly onto its 200-day Exponential Moving Average (EMA), with the 50-day EMA just beneath it and the 1.3400 handle immediately overhead. Monday added another modest gain: Cable based near 1.3350 through the London morning, then climbed all afternoon to stall just shy of 1.3400.
The interesting part is what did not stop it. A hawkish Federal Reserve (Fed) governor was on the wires mid-afternoon, US services data came in warm enough to keep the hike debate alive, and the pair rallied through all of it, which suggests Monday was less about fresh good news for the Pound and more about a Dollar that has run out of new arguments. Read more...
