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The New Zealand Dollar extends losses against the US Dollar (USD) on Tuesday, weighed by the risk-off mood amid escalating tensions in the Middle East and rising Oil prices. The NZD/USD extends its reversal from the 0.5900 area on Friday, reaching session lows at 0.5836, below the key 200-day Simple Moving Average (SMA) which lies at the 0.5850 area.

Market sentiment remains subdued as tensions between the US and Iran escalate further, pushing back hopes of a negotiated end to the conflict. Tehran threatened to strike US Gas and Oil interests in Gulf countries if Iran is attacked again, following another round of hostilities over the weekend.

Meanwhile, traffic through the Strait of Hormuz, which carried about 20% of global Oil supply before the war, remains limited to a trickle, which is pushing prices higher. Brent Oil is trading above $97.00 per barrel on Tuesday's European session, accumulating a nearly 9% appreciation so far in September, and 38% above July lows. These prices increase the exposure of New Zealand’s economy to another Energy shock.

Earlier on the day, data from China revealed that the trade surplus increased in August, although imports missed expectations, which suggests that the country's domestic demand remains weak. The data failed to provide any noticeable support to the China-proxy NZD.

Technical Analysis: Approaching the trendline of a bearish H&S

NZD/USD trades at 0.5843, holding a bearish near-term tone as it slips just below the 200-day simple moving average (SMA) at 0.5854 and draws closer to the neckline of a bearish Head & Shoulders (H&S) pattern, between 0.5800 and 0.5820. Momentum indicators show a growing bearish trend, as the Relative Strength Index (RSI) eases toward the low-40s and the Moving Average Convergence Divergence (MACD) line sits below zero with a negative histogram.

A break of the 0.5800 level would confirm an H&S pattern, adding pressure towards the late July lows, near 0.5765 and the July 13 low, at 0.5745. The H&S's measured target is below the June 26 low at 0.5626.

On the topside, Bulls should break Friday's high at the 0.5900 area to ease bearish pressure and shift the focus toward the late August highs at the 0.5990 area.

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

New Zealand Dollar Price Today The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHFUSD0.09%0.11%-0.14%-0.09%0.13%0.63%0.25%EUR-0.09%0.01%-0.23%-0.17%0.02%0.55%0.16%GBP-0.11%-0.01%-0.25%-0.19%0.00%0.54%0.15%JPY0.14%0.23%0.25%0.07%0.28%0.80%0.42%CAD0.09%0.17%0.19%-0.07%0.21%0.73%0.35%AUD-0.13%-0.02%-0.01%-0.28%-0.21%0.53%0.14%NZD-0.63%-0.55%-0.54%-0.80%-0.73%-0.53%-0.38%CHF-0.25%-0.16%-0.15%-0.42%-0.35%-0.14%0.38% 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 New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

US CPI – GoldAll eyes are on Friday's US CPI report, which will dictate the Federal Reserve’s September 16 rate decision. While August’s 162,000 payroll rebound raised the chances of a rate hike to 59%, central bank leaders stress that inflation data will decide the outcome. A higher-than-expected inflation figure would lock in a quarter-point increase and boost the US dollar, while a cooler reading could keep interest rates on hold and weaken the greenback.

Meanwhile, gold fell toward 4,400 as higher bond yields and rate-hike expectations weighed on non-yielding metals, leaving gold prices equally dependent on the incoming CPI data. A sell-off beneath the 50-day simple moving average (SMA) at 4,350 and, more importantly, below the 4,310 strong support would increase speculation of further decreases toward 4,200.  

ECB rate decision – EUR/USDMarkets broadly expect the European Central Bank to raise borrowing costs by a quarter-point to 2.5% this Thursday as rising energy expenses push inflation beyond 3%. While investors anticipate another potential move by December, economists expect this to be the final increase to avoid damaging economic growth, especially with wage expansion slowing and broader inflation remaining muted. The euro's reaction will depend heavily on Christine Lagarde’s press conference, any signal of a December hike could lift EURUSD, whereas a focus on economic risks could push the single currency lower.

Currently, EUR/USD is fluctuating within the 20- and 200-day SMA, slightly above the 1.1600 handle. A successful climb beyond it would endorse another bullish wave, heading toward the 1.1710 barrier. On the other hand, a slide below the 50-day SMA may switch the short-term outlook to negative.

Escalating US-Iran conflict drives oil higher – WTI Crude OilRising Middle East conflict drove crude oil past 92.00 level today, extending last week’s momentum as reciprocal strikes between American and Iranian forces sparked fears of enduring regional supply bottlenecks. US naval forces targeted Iranian oil tankers following missile launches directed at warships, prompting Tehran to declare restricted shipping routes near the critical Strait of Hormuz waterway. In response, OPEC+ chose to halt its monthly output increases by keeping October production levels unchanged, even as prolonged transit hazards forced the cartel to lower its current-year global demand growth forecast to 580,000 barrels daily.

WTI crude oil is ticking marginally higher above the 92.00 region with the next strong resistance coming from the 94.60 barrier. A step up could open the way for a touch of the 99.00 psychological mark, raising the likelihood of a bullish outlook. Alternatively, only a drop below the 200-day SMA at 80.40 could endorse the bearish outlook.

Pound-Canadian Dollar could extend its decline if UK GDP disappoints, while higher oil prices may provide further support for the Loonie. The Pound to Canadian Dollar (GBP/CAD) exchange rate retreated last week as fears that a rise in borrowing costs could pose a risk to the UK's upcoming Autumn budget.

At the time of writing, the GBP/CAD exchange rate traded at CA$1.8718. Down around 0.5% from the start of last week’s session.

Latest — Exchange Rates:

Pound to Canadian Dollar (GBP/CAD): 1.87 (-0.02%)

Euro to Canadian Dollar (EUR/CAD): 1.605723 (-0.08%)

Dollar to Canadian Dollar (USD/CAD): 1.38328 (-0.03%)

DAILY RECAP:

Pound (GBP) struggled to make headway last week, with Sterling bearing the brunt of the turbulence sweeping through global bond markets.

UK gilts were among the hardest hit, with the 10-year gilt yield breaking above 5.25% and striking a 19-year high, while yields on 30-year gilts climbed to their highest levels since 1998.

Although the sharp rise in yields formed part of a broader sell-off in government bonds, concerns that higher borrowing costs could eat further into the limited fiscal headroom available to Chancellor John Healey ahead of his first Autumn Budget, meant there was a disproportionate impact on Sterling.

The Canadian dollar (CAD) got off to an underwhelming start last week, with CAD demand being undermined by lingering concerns about a potential US-Canada trade war.

However, the 'Loonie' then received a shot in the arm in mid-week trade following the Bank of Canada's (BoC) latest interest rate decision.

While the BoC kept interest rates on hold as forecast, its guidance warned of upside risks to inflation, which investors interpreted as a hawkish nod to a potential need to tighten monetary policy in the future.

The end of the week then saw the publication of Canada's latest jobs report, with the 'loonie' coming under pressure, following a shock contraction in employment growth last month.

Near-Term GBP/CAD Forecast: Slowdown in UK GDP to Weigh on Sterling? Looking ahead to this week's session, the Pound to Canadian Dollar (GBP/CAD) exchange rate may extend its losses as markets digest the UK's latest GDP figures.

Economists expect month-on-month economic growth to have slowed in July, with a soft reading potentially likely to drag on Sterling if it is seen as weakening the odds of a Bank of England (BoE) rate hike later in the year.

Meanwhile, in the absence of any notable domestic data, movement in the 'loonie' may be tied to oil price dynamics, with further uncertainty in the Middle East potentially propelling the commodity and CAD exchange rates higher.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

Why Brent’s break above $97 is failing to lift Dollar, and why Japan, not oil, is setting today’s currency direction What’s happening: USD/JPY broke decisively through 157.99 to around 156, bringing the 155 area back into range, as Yen’s rally gathers fresh momentum from speculation that Japan’s roughly $2 trillion GPIF could raise its domestic bond allocation, on top of an already-hawkish BoJ repricing. At the same time, Brent climbed to an intraday high around $97.62, its strongest level in six weeks, as the US-Iran conflict shows signs of extending well beyond 2026.

Why it matters: Brent above $97 and a conflict that could extend into 2027 would normally form a potent Dollar-supportive combination through inflation and rates. Instead, Dollar is broadly weaker because Japan has taken control of the FX narrative. Oil is still setting global inflation risk, but today, Japan is setting currency direction.

Yen Takes Over as GPIF Speculation Adds to BoJ Repricing Yen extended its powerful rally on Thursday, sending USD/JPY decisively through 157.99 to around 156 and putting the 155 area back within reach. Latest leg appears to have received fresh fuel from speculation surrounding Japan’s roughly $2 trillion Government Pension Investment Fund. GPIF held an unusual management committee meeting on August 21, its first August meeting since 2019, and revisited discussion around its basic portfolio only five months after a March assessment concluded that a review was unnecessary.

Market interest centers on whether GPIF could eventually raise its strategic allocation to domestic assets, particularly government bonds. Domestic bonds currently carry a 25% target allocation, alongside 25% each for domestic equities, foreign bonds and foreign equities. The timing is significant because Japan’s 10-year government bond yield has climbed roughly one percentage point since March and briefly reached 3.015% this week, highest since 1996. Higher domestic yields are already changing relative attractiveness of Japanese assets, with Japanese investors reducing overseas bond exposure this year. A larger GPIF domestic allocation would reinforce that repatriation theme and potentially relieve some upward pressure on JGB yields.

That speculation is adding to a much broader Yen-positive repricing already underway. BoJ officials have become increasingly explicit about further tightening, with markets now focused not only on a possible September hike but on a faster cycle over coming year. Japan’s top currency diplomat Atsushi Mimura added another layer of caution Thursday, saying he was “neither satisfied nor reassured” by recent Yen developments and that authorities remained on “a state of heightened alert.” He declined to confirm whether officials had conducted a rate check. Traders nevertheless continue to attribute Yen strength primarily to BoJ tightening expectations rather than fresh intervention.

The 155 level is critical. USD/JPY is approaching the same territory reached after July’s record intervention campaign, which cost Japan roughly $96.5bn and included rare US participation. The 155.22 area marks July’s post-intervention low, while 155.01 provides nearby technical support. This time, however, pair is approaching those levels organically rather than through any confirmed official Yen buying.

Why the 155 Level Matters Japan’s 10-year JGB yield: briefly reached 3.015% this week, highest since 1996. July’s record intervention: cost roughly $96.5bn, included rare US participation. 155.22: July’s post-intervention low. 155.01: nearby technical support. Mimura: “neither satisfied nor reassured,” authorities on “a state of heightened alert.” July’s Intervention-Driven Move vs. Today’s Organic Approach to 155 July’s Intervention Today How USD/JPY reached this territory Record intervention, cost roughly $96.5bn, included rare US participation Approaching organically, no confirmed official Yen buying Key levels 155.22 (post-intervention low), 155.01 (support) Same levels now back within reach Attributed driver Direct official Yen buying BoJ tightening expectations and GPIF speculation Dollar Weakens Even as Oil Sends a Normally Bullish Signal Yen’s surge has become dominant force in FX, with Dollar lower against all major counterparts despite a backdrop that would normally be considerably more supportive. In Dollar index specifically, Yen’s sizeable weighting means its appreciation directly pulls index lower. More broadly, modest easing in Treasury yields has allowed Dollar weakness to spread across EUR, GBP and CHF as traders focus on Japanese policy repricing rather than extending this week’s US rates trade.

That creates today’s most counterintuitive cross-asset signal. Brent has broken above $97 to fresh six-week highs as US-Iran conflict intensifies, yet Dollar is falling. Earlier this week, higher oil transmitted relatively cleanly through inflation fears into higher Treasury yields and firmer expectations for Fed tightening. That channel has not disappeared, but it is being overshadowed in FX by Yen’s much larger independent move and the pause in US yields.

Wednesday’s softer ADP report, with private payrolls rising only 38K, contributed to that pause in further hawkish repricing, but it is not the principal driver of Thursday’s Dollar move. Initial jobless claims subsequently matched expectations at 206K, offering little additional direction. Markets still attach substantial probability to September Fed hike, leaving Friday’s NFP as decisive test. For now, more revealing question is not simply why Dollar is weaker, but why Brent above $97 has failed to make Dollar stronger. Answer lies in Japan: Yen and BoJ repricing have become larger currency-market forces today.

Oil Story Shifts From Escalation to Duration Brent meanwhile climbed to an intraday high around $97.62, extending this week’s rally and reaching its strongest level in six weeks. But narrative is beginning to shift. Earlier phases of renewed fighting were dominated by immediate questions over each US strike, Iranian retaliation and potential disruption to Strait of Hormuz. Markets are now considering a more difficult possibility: conflict and impaired regional energy flows could persist into 2027. Recent market commentary has explicitly moved toward that longer time horizon, with Capital Economics expecting restoration of Middle East energy flows to be delayed until early next year and forecasting Brent around $100 by end-2026.

That matters more for inflation than another isolated military exchange. A conflict measured in additional months rather than days would prolong pressure on shipping, inventories and refined-product markets, increasing chances that energy inflation becomes persistent enough to influence central-bank decisions. Iranian retaliation has also widened geographically, while US officials continue to signal that military pressure could intensify again even as Washington tries to limit escalation ahead of November elections. Reuters reported that administration officials see possibility of more intense attacks after midterms, underscoring absence of a clear near-term exit from a war now in its seventh month.

The closing contradiction is therefore striking. Brent above $97 and rising concern that US-Iran conflict could extend into 2027 would normally form a potent Dollar-supportive combination through inflation and rates. Instead, Dollar is broadly weaker because Japan has taken control of FX narrative. Oil is still setting global inflation risk, but today, Japan is setting currency direction.

Related Coverage Yen & Precious Metals Deep Dives Read why Silver’s rebound from 63.27 still depends on holding 62.54-62.92 to keep its five-wave recovery from 54.77 alive ahead of Friday’s NFP: Silver’s Correction Has Reached Its Line in the Sand — What Happens Next?. See why Friday’s NFP creates an asymmetric setup for USD/JPY, with weak data opening a clearer path toward 155 than strong data does above 160: USD/JPY Tumbles Under the Shadow of Intervention, Faces Asymmetric NFP Test. US Data Deep Dive Read why jobless claims matching expectations at 206K still leaves Friday’s NFP as the clearer labor-market signal: US Initial Jobless Claims Rise from 204K to 206K. Global Inflation Deep Dives See why Eurozone PPI’s swing to +1.6% m/m was driven largely by a 5.6% jump in energy prices, with annual producer inflation accelerating to 5.8%: Eurozone PPI Surges 1.6% M/M as Energy Drives Renewed Producer Inflation (full Eurostat release). Read why Swiss CPI’s jump to 0.8% was driven mostly by energy and imported prices, with core inflation holding at 0.4%: Swiss CPI Jumps to 0.8%, but Energy Drives Much of Inflation Surprise. Global PMI Round-Up See why UK services hitting a four-month high still came with employment falling for a 23rd straight month: UK PMI Services Hits Four-Month High as Cost Pressures Reaccelerate. Read why Eurozone’s composite PMI holding at an eight-month high alongside stalled disinflation is strengthening the case for ECB tightening: Eurozone PMI Composite Holds Firm as Sticky Prices Strengthen ECB Tightening Case. See why Japan’s record composite selling-price inflation is adding to the case for another BoJ hike even as growth accelerates: Japan PMI Growth Accelerates as Record Selling Prices Strengthen BoJ Hike Case. Read why Australian services confidence hit a six-month high even as fuel and wage costs kept input inflation elevated: Australia PMI Services Holds Firm at 53.2 as Confidence Rises but Costs Stay High. See why China’s services and composite PMI gains reflect stronger domestic demand and sustained hiring: China RatingDog PMIs Strengthen as Services and Employment Gain Momentum. Frequently Asked Questions Q: Why is Dollar falling even though oil just broke above $97? A: Because Yen’s much larger, independent move is overwhelming the usual oil-to-Dollar transmission channel. Higher oil normally supports Dollar through inflation fears feeding into higher Treasury yields and firmer Fed tightening expectations, and that channel hasn’t disappeared. But Yen’s sizeable weighting in the Dollar index, combined with a pause in US yields, means Japanese policy repricing is currently the bigger force in FX. The real question today isn’t why Dollar is weaker, it’s why Brent above $97 hasn’t made it stronger, and the answer is Japan.

Q: What is GPIF and why does speculation about it matter for Yen? A: GPIF is Japan’s roughly $2 trillion Government Pension Investment Fund. It held an unusual management committee meeting on August 21, its first August meeting since 2019, revisiting its basic portfolio just five months after concluding in March that no review was needed. Markets are watching whether GPIF could raise its 25% target allocation to domestic bonds. A larger domestic allocation would reinforce the repatriation trend already underway as Japanese investors reduce overseas bond exposure, adding further support to Yen and potentially easing some upward pressure on JGB yields.

Q: How is this approach to 155 different from July’s intervention? A: July’s move to the 155 area came from a record, roughly $96.5bn intervention that included rare US participation. This time, USD/JPY is approaching the same 155.22 and 155.01 levels organically, with no confirmed official Yen buying. Traders are attributing the move to BoJ tightening expectations and GPIF speculation rather than direct intervention, even though currency diplomat Mimura says authorities remain on “a state of heightened alert.”

Key Takeaways USD/JPY broke through 157.99 to around 156: Bringing the 155 area back into range for the first time since July’s intervention. GPIF speculation is adding fresh fuel to Yen’s rally: Markets are watching whether Japan’s roughly $2 trillion pension fund raises its 25% domestic bond allocation after an unusual August 21 committee meeting. Japan’s 10-year JGB yield briefly hit 3.015% this week: The highest since 1996, up roughly one percentage point since March. Currency diplomat Mimura kept intervention rhetoric alive: Saying he’s “neither satisfied nor reassured,” though traders still attribute Yen strength to BoJ tightening expectations, not intervention. Brent climbed to a six-week high around $97.62: As the oil narrative shifts from immediate escalation questions to concern the conflict could extend into 2027. Reuters reported officials see possible intensified attacks after the US midterms: Underscoring no clear near-term exit from a conflict now in its seventh month. Dollar is broadly weaker despite a combination that would normally support it: Brent above $97 and extended conflict risk usually mean higher inflation and rates support for Dollar, but Japan has taken control of the FX narrative instead. Unlike July, today’s approach to 155 is organic: No confirmed official Yen buying, unlike July’s roughly $96.5bn intervention with rare US participation. What to Watch Next Friday’s US nonfarm payrolls report is the decisive near-term test for Dollar, following a softer ADP print and in-line jobless claims. Watch whether USD/JPY breaks below 155, further signals on GPIF’s portfolio review, and whether Brent extends toward $100 as Capital Economics and others push their Middle East normalization timelines further into 2027.

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AUD/USD

Sell AUD/USD. Higher odds of both RBA and Fed hikes push the market toward tighter USD policy and less room for AUD to rally; strong Aussie data is already “priced,” while the article flags elevated inflation and renewed oil/energy pressure that can keep both central banks hawkish. Technicals also point to a bearish reversal (rising wedge convergence, PPO bearish crossover, RSI rolling over). Target 0.700 support.

Key Risk: A sharp risk-off move that weakens the USD (or a surprise dovish Fed/RBA shift) that drives AUD/USD back above 0.7207.

Brent-linked AUD

Sell AUD exposure via AUD/JPY (or AUD futures). The news ties the hawkish rate repricing to higher oil after US-Iran activity; that supports global growth but also keeps inflation sticky, which tends to keep JPY relatively supported versus high-beta AUD when rates are uncertain. With AUD/USD set up to break lower, AUD/JPY should follow on the same rate-and-risk repricing.

Key Risk: Oil spikes further and triggers a broad commodity/risk rally that lifts AUD/JPY despite the wedge/oscillator bearish setup.

The Australian dollar held firm today, September 3rd, as investors adjusted their RBA and Federal Reserve expectations for the year. The AUD/USD pair was trading at 0.7165, a few points below the August high of 0.7207. 

Traders are bracing for interest rate hikes from the Federal Reserve and the Reserve Bank of Australia (RBA) happening as soon as this month.

Polymarket gives the odds of RBA’s rate hike happening in September rose to 67%. These odds jumped after the US and Iran resumed their kinetic activity, which led to higher oil prices. 

Australia has also published strong macro numbers this week. An S&P Global report showed that the services PMI came in at 53.2 in August, higher than the expected 52.9. A PMI reading of 50 and above is usually a sign that a sector is growing. The composite PMI came in at 52.7, also higher than the expected 52.50.

Another report released on Wednesday showed that the Australian economy expanded by 2.1% in the second quarter, higher than the expected 1.8%. It grew by 0.4% in Q2 after growing by 0.3% in Q1 on a QoQ basis. 

This growth happened even as the Reserve Bank of Australia (RBA) became the most hawkish central banks this year. It has already delivered three rate hikes this year, with officials leaving the door open for more hikes.

A key concern is that Australia’s inflation has remained at an elevated level in the past few months. This trend will likely continue now that the US and Iran have restarted their kinetic activity, leading to higher energy prices. Brent, the global benchmark, rose to $95.68, while the West Texas Intermediate (WTI) rose to $91.

The same situation is happening in the US, where odds that the Fed will hike rates this month have jumped to 55% on Polymarket. These odds soared after Kevin Warsh delivered a highly hawkish statement at the Jackson Hole Symposium.

In it, he hinted that the bank was concerned about the state of inflation, which has remained above the 2% target in the past five years.

Focus now shifts to the upcoming US nonfarm payrolls (NFP) report that will provide color on the labor market. Economists expect the data to show that the economy created over 80k jobs in August this year.

AUDUSD chart | Source: TradingView

The daily chart shows that the AUD/USD pair may be on the verge of a bearish reversal in the coming days. For one, it has formed a rising wedge pattern whose two lines are about to converge. 

Also, the two lines of the Percentage Price Oscillator (PPO) have made a bearish crossover, while the Relative Strength Index is pointing downwards.

Therefore, the most likely scenario is where the AUD/USD pair falls, potentially to the key support of 0.700.

Preview: Westpac sees RBNZ hiking OCR to 2.75% tomorrow, data dependent from thereMOF official: Katayama, Bessent talks covered FX intervention, fiscal policyJapan finmin Katayama and Bessent affirm need for orderly yen movesChina private PMI beats forecast, longest upturn in five years. AUD support.China data: RatingDog Manufacturing PMI (August 2026) 51.5 vs. expected 50.9, prior 50.9TD Securities sees gold risk to 4200 near term, 5350 target by 2027UBS says 3 reasons the Venezuela oil deal wont move prices much, Hormuz still keyJapan manufacturing PMI hits 54.9 as new orders surge most since 2018New report shows scale of China's state-backed equity market support, State capital and buybacksPBOC sets USD/ CNY central rate at 6.7809 (vs. estimate at 6.7170)Oil Shock Pushes Yields Higher as Bitcoin Resists and Gold WeakensGoldman CEO flags Middle East, tariffs as headwinds to solid US growthDark transits and tanker relays: Oil producers workarounds to keep oil moving past HormuzBessent met Ueda, Katayama at G20, pushed for BOJ hikes, NHK reportsInflation? You want inflation? UK shop prices rise at fastest pace since 2024Tanker struck by three projectiles exiting Strait of Hormuz, UKMTO warnsMonday catch up in preparation for Asia open: Oil surges on Iran strikes, hawkish Warsh lifts dollar, yields, hike oddsUS Army Secretary Driscoll resigns after months of friction with HegsethExplainer: China's four PMIs, why they don't always agree, and how to trade themICYMI: Bessent lists reasons Fed could skip a September hike despite Warsh remarksinvestingLive Americas FX news wrap 31 Aug: The USD moves lower. USD corrects after Warsh's hawkish speech at Jackson HoleUS broader indices close lower on the day. Nasdaq 100 closes marginally higherSummary:

Oil remains underpinned after Monday's gains, with President Trump vowing to hit Iran hard in response to its retaliation, and reports of a Saudi VLCC halted after being struck by projectiles in the Strait of Hormuz.US Army Secretary Dan Driscoll has resigned after months of tension with Defense Secretary Pete Hegseth, according to the Wall Street Journal.Gold is little changed below USD 4,450/oz following a quiet prior session and amid recent upside in yields.China's RatingDog Manufacturing PMI rose to a two-month high of 51.5 in August from 50.9 in July, with new orders and exports accelerating, a ninth straight month of expansion and a positive signal for AUD as a China proxy.Japan's S&P Global Manufacturing PMI rose to 54.9 in August from 54.5 in July, an eighth straight month of improvement, with new orders growing at their fastest pace in over eight and a half years on AI and semiconductor demand, though this missed the 55.1 forecast.South Korea's S&P Global Manufacturing PMI eased to 52.3 in August from 53.1 previously.Australia's net exports contributed 0.1 percentage points to Q2 GDP, following separate data showing underlying government demand and inventories contributed 0.33 percentage points to Q2 growth.Treasury Secretary Bessent said he believes Japan will act to strengthen the yen and that markets are pricing in a BOJ hike, after meeting BOJ Governor Ueda and Japan's Finance Minister Katayama at the G20; USDJPY stood near 159.75, close to the 160 level associated with intervention risk.Katayama separately confirmed with Bessent that orderly yen and FX rates are crucial for global financial stability and that joint intervention remains significant, while declining to comment on current yen levels.The US dollar held slightly higher against most major currencies.A new report showed the scale of China's state-backed equity market support, with SASAC and Chengtong raising A-share holdings by more than 60 billion yuan in 2026, part of a wider buyback push covering 1,051 listed companies with proposed buybacks exceeding 220 billion yuan, according to the China Association for Public Companies.The Nikkei 225 traded off earlier lows and briefly turned positive, with headwinds from higher yields. The KOSPI declined mildly amid light newsflow and indecisive performance among tech heavyweights. The Hang Seng fell around 1% while the Shanghai Composite rose 0.2%, with mainland shares cushioned by the stronger than expected China PMI data. Middle East news flow was relatively light through the session, though oil prices remained underpinned after Monday's gains, when a US strike on Iranian rocket launchers and a subsequent Iranian retaliation drove crude higher. President Trump has vowed to respond forcefully to Iran's retaliation, and further support came from reports that a Saudi VLCC was halted after being struck by projectiles in the Strait of Hormuz, extending the pattern of tanker incidents in the waterway.

Separately, US Army Secretary Dan Driscoll has resigned following months of tension with Defense Secretary Pete Hegseth, according to the Wall Street Journal.

Gold was little changed below the USD 4,450 an ounce level, following an uneventful prior session and alongside the recent upside in bond yields.

It was a busier day for economic data, with the focus on China's private sector manufacturing survey. The RatingDog China General Manufacturing PMI rose to a two-month high of 51.5 in August from 50.9 in July, with new orders and export growth both accelerating. The reading marked a ninth consecutive month of expansion and was seen as a positive signal for the Australian dollar given its role as a China proxy currency.

In Japan, the S&P Global Manufacturing PMI rose to 54.9 in August from 54.5 in July, an eighth consecutive month of improvement, with new orders expanding at their fastest pace in more than eight and a half years on strong AI and semiconductor related demand, though the reading fell short of the 55.1 forecast. South Korea's equivalent survey eased to 52.3 in August from 53.1 previously.

In Australia, net exports contributed 0.1 percentage points to second quarter GDP, following data released a day earlier showing underlying government demand and inventories contributed a further 0.33 percentage points to growth over the same period.

On the currency side, Treasury Secretary Scott Bessent said he believes Japan will act to strengthen the yen and that markets are pricing in a Bank of Japan rate hike, following meetings with BOJ Governor Kazuo Ueda and Japan's Finance Minister Satsuki Katayama at the G20 in Asheville. USDJPY stood near 159.75, close to the 160 level that has previously been associated with a heightened risk of intervention. Katayama separately confirmed with Bessent that orderly yen and broader FX rates are crucial for the stability of global financial markets, and that the two sides share an understanding on the significance of joint intervention, while declining to comment on whether she considers current yen levels to be in order. The US dollar held slightly higher against most major currencies through the session.

A new report also highlighted the scale of state-backed support flowing into Chinese equities, with the State-owned Assets Supervision and Administration Commission and China Chengtong Holdings Group having raised their combined A-share holdings by more than 60 billion yuan so far in 2026. That figure sits within a broader buyback push covering 1,051 listed companies with proposed buybacks exceeding 220 billion yuan, according to a report from the China Association for Public Companies.

Regional equity markets were mixed. The Nikkei 225 traded off its earlier lows and briefly turned positive, despite headwinds from higher yields. The KOSPI declined mildly amid light news flow and indecisive performance among the index's tech heavyweights. In Hong Kong and mainland China, the Hang Seng fell around 1% while the Shanghai Composite rose 0.2%, with mainland shares cushioned by the stronger than expected Chinese manufacturing PMI data released earlier in the session.

Summary:

The USD/INR will trade as an interplay between the US Treasury's bond buyback program and the geopolitical scenarios. Current Setup and Live Chart With the US Dollar entering the week with negative sentiment, USD/INR’s upside may be capped or limited. This is because the rupee has significant exposure to the current geopolitical environment in the Middle East. This factor poses a substantial upside risk for the rupee.

USD/INR is mildly bearish at the moment. But significant oil-related upside risk means the pair’s direction could be driven more by the rupee’s response to oil prices than by the USD’s response to the local fiscal environment.

Last week brought news of the US Treasury’s intention to double its bond buyback program. Under this arrangement, the US Treasury will double the maximum limit of its 10–30-year liquidity-support buybacks from $2 billion to $4 billion per operation, with commencement set for 9 September 2026. The announcement caused a drop in US long-term yields and weakened the dollar’s yield advantage. But any geopolitical escalation puts the rupee on the back foot, meaning the pair could resume the upside even if the greenback is broadly weak.

USD/INR Forecasts: Key Scenarios This Week The scenarios that will determine the USD/INR forecasts are straightforward:

US Dollar ↓ + oil stable → USD/INR ↓ (mildly bearish) Dollar ↓ + oil ↑ sharply → USD/INR could still rise. Dollar ↑ + oil ↑ → strongly bullish for USD/INR. There are asymmetric risks to the USD/INR pair. In other words, any fresh escalation of the US-Iran conflict, particularly regarding the Strait of Hormuz, will quickly override any weakness from the US Treasury buyback intervention.

Macro Drivers for the USD/INR right now 1) The Treasury Buyback Program

The US Treasury’s long-end buybacks are set to increase to at least $4 billion per operation and will cover 10–30-year securities. This has reduced the USD’s yield advantage.

Although this move aims to improve liquidity and reduce pressure on the long end of the U.S. Treasury curve, it could reduce the appeal of USD-denominated assets. This impact is already being felt across several emerging market FX pairs.

2) Oil prices

Elevated oil prices remain the rupee’s biggest threat. India is the world’s third-largest economy, and elevated oil prices hurt the rupee. India’s structural dependence on imported crude means higher prices risk importing inflation into India and keeping import bills high. The accompanying deterioration in the trade balance puts pressure on the local currency. Indeed, persistently high oil prices could weaken the rupee enough to offset any losses the USD suffers from Treasury intervention.

3) Geopolitical risk

The conflict around Iran and the Strait of Hormuz creates three channels of pressure. The first is from higher crude prices, which raise import costs. The second is from higher freight and insurance costs incurred from using longer alternative oil shipping routes. The third is the exit of portfolio funds from emerging markets due to risk aversion. India’s current growth provides some buffer, but it does not reduce the risk premium that hits the rupee amid geopolitical escalation. risk

4) The RBI as a Manager of Rupee Volatility

The Reserve Bank of India (RBI) typically steps in to manage excessive rupee volatility. One way it does this is by deploying some of its external reserves to defend the rupee and prevent a disorderly, outsized depreciation.

USD/INR Price Catalysts 1) Brent crude direction: For the rupee, this is the most important variable right now. Lower Brent crude prices reduce India’s import bill and favor a USD/INR downside. A sharp rise in Brent crude raises import costs and supports the pair. As prices approach $100, this factor becomes more important.

2) US Treasury Yields: The bond buyback program is basically an intervention that determines the yields on long-term US borrowing costs. They were introduced to stabilize the bond market at the long end. If US Treasury yields decline as a result, the US Dollar also declines, and this supports the rupee. Ultimately, this is meant to cap the upside in the USD/INR. The reverse is also the case. If the program fails to curtail the rise in bond yields, we would see the USD regaining lost ground. Rising oil prices are bullish for the USD/INR.

3) Foreign portfolio flows: A decline in US bond yields and a weaker dollar improve the appeal of emerging-market FX such as the rupee. It would favor an influx of foreign portfolio funds into the Indian market. These funds need to convert into the local currency to participate in the Indian market; this is bullish for the rupee. Conversely, a global risk-off episode (such as a geopolitical escalation) could send these portfolio funds fleeing to safety and out of the Indian markets. This is a rupee-negative scenario.

USD/INR Technical Outlook The ascending trendline support is under threat, as the daily candle has violated it. We need to see the 95.24 support level (30 March high) break down for a push lower toward the 94.04 support and the 61.8% Fibonacci retracement of the 8 April – 20 May upswing. Below this level, additional support is seen at 93.25.

Fig 1: USD/INR daily chart showing key price levels (snapshot: 25 August 2026) Conversely, recovery above the trendline maintains its integrity. The bulls would need to force a bounce from there to aim for the 96.99 resistance as the next upside target. However, there is a potential for a pitstop at the most recent high seen on 24 July at 96.67. Only if this point is surpassed can we see a reclaim of 96.99.

The Pound-Canadian Dollar rate could remain under pressure if Canadian GDP rebounds strongly and lifts Bank of Canada rate hike expectations. The Pound to Canadian Dollar (GBP/CAD) exchange rate ticked lower last week as a fresh rise in oil prices bolstered the 'Loonie'.

At the time of writing, the GBP/CAD exchange rate traded at CA$1.8754. Down around 0.2% from the start of last week’s session.

Latest — Exchange Rates:

Pound to Canadian Dollar (GBP/CAD): 1.878441 (-0.10%)

Euro to Canadian Dollar (EUR/CAD): 1.607534 (-0.20%)

Dollar to Canadian Dollar (USD/CAD): 1.3767 (-0.11%)

DAILY RECAP:

The Canadian dollar (CAD) edged higher last week with the commodity-linked currency drawing support from a renewed surge in oil prices.

Brent crude rose to around $94 a barrel last week as the 60-day memorandum of understanding between Washington and Tehran expired without a final peace deal or an agreed extension, reinforcing concerns that the disruption to energy supplies could persist.

In terms of domestic data, the Canadian Dollar was seemingly unfazed by a stronger-than-expected inflation print and sizable contraction in Canadian retail sales.

The Pound (GBP) put in a mixed performance last week, with the currency fluctuating against most of its rivals amid a flurry of high-impact UK economic data.

A mixed batch of releases left investors struggling to gauge the next move from the Bank of England (BoE). Weaker employment figures followed by an unexpected acceleration in inflation weighed on Sterling during the first half of the week, as the conflicting signals complicated the outlook for interest rates.

The Pound then attempted to regain ground, only for the recovery to falter after a sharp decline in UK retail sales and a shock rise in UK government borrowing last month.

Near-Term GBP/CAD Forecast: Rebound in Canadian GDP to Boost the 'Loonie'? Looking to the week ahead, the primary catalyst of movement for the Pound to Canadian Dollar (GBP/CAD) exchange rate is likely to be the publication of Canada's latest GDP data.

Consensus estimates predict Canadian GDP will have rebounded strongly in the second quarter, lifting the country out of the technical recession it slipped into in the first quarter of the year.

This in turn could improve the odds of the Bank of Canada (BoC) delivering an interest rate hike later in the year, boosting the appeal of the 'Loonie'.

Meanwhile, a relatively quiet UK economic calendar should leave Sterling largely dependent on wider risk appetite and developments across global markets.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

TL;DR: Canada is facing 50% US tariffs after trade talks collapsed, yet USD/CAD’s muted reaction — with oil, bonds, and the Dollar all failing to confirm a Canada-specific stress trade — suggests markets see this as a narrower, contained shock rather than an economy-wide one.

Why Isn’t the Canadian Dollar Falling Harder? Canada entered the week with two apparently bearish developments already in place. US trade talks had collapsed, new 50% tariffs were in force, and oil was retreating from recent highs. Yet USD/CAD’s response has been restrained rather than disorderly. The pair recovered from 1.3730, but has so far failed to produce the kind of upside acceleration that headline severity might suggest. That muted reaction is important: the FX market appears to be distinguishing an unusually aggressive trade action from an immediate economy-wide shock.

Part of the explanation is scope. The 50% tariff rate is eye-catching, but duties apply to roughly C$28bn, or about US$20bn, of Canadian exports — not the entire Canada-US trade relationship. Timing also matters. US measures took effect Saturday, so Monday’s session is digesting an outcome known since late Friday rather than reacting to a fresh intraday surprise. Canada’s promised dollar-for-dollar retaliation isn’t scheduled to begin until September 8, leaving roughly two weeks before the full two-way tariff confrontation reaches the real economy.

How a Near-Deal Collapsed The breakdown was nevertheless abrupt. US President Donald Trump temporarily postponed implementation last week as negotiations appeared close, and Canada’s trade minister Dominic LeBlanc held lengthy talks with USTR Jamieson Greer as both sides continued trying to bridge differences. Talks then failed late Friday, allowing 50% duties to take effect shortly after midnight Saturday.

Canadian Prime Minister Mark Carney subsequently called the tariffs a “miscalculation” and said the US side had introduced last-minute changes Canada considered unfair and uneconomic. Washington has framed the dispute differently, focusing in part on Canada’s refusal to remove retaliatory restrictions imposed during earlier tariff rounds, including provincial bans on sales of some US alcohol.

The accounts aren’t necessarily mutually exclusive: what Ottawa describes as a late change could be the same demand Washington viewed as an unresolved condition. Neither side has released the full draft agreement, leaving the exact final sticking point uncertain and giving Canada’s opposition another opening to press Carney for disclosure. The escalation is also notable because Trump used Section 338 of the Tariff Act of 1930, an extraordinary provision that had not previously been used by a US president to impose tariffs.

Oil and Bonds Aren’t Confirming a Canada Stress Trade Oil adds another nominally bearish input for CAD, but the current decline is weaker as a signal than the headline suggests. Crude retreated after two consecutive weekly gains as traders took profits ahead of Treasury Secretary Scott Bessent’s expected Iran sanctions announcement today. That’s different from an oil selloff driven by collapsing demand expectations or a fresh deterioration in global growth. For a commodity-sensitive currency such as CAD, that distinction matters.

Canadian rates are also not showing a parallel stress signal. Canada’s 10-year yield has stayed firm rather than reflecting a clear growth or capital-flight repricing. More importantly, the USD itself isn’t providing the reinforcing half of the trade. The DXY is flat to slightly softer, while the broader Dollar downtrend over the past month is still intact. USD/CAD tends to move most aggressively when Canada-specific weakness is paired with broad Dollar strength — that combination is missing so far.

ActionForex’s Technical View on USD/CAD Technically, a temporary low should be in place at 1.3730, and some consolidation above that level is likely first. But upside should be limited by 1.3927, the 38.2% retracement of the decline from 1.4247 to 1.3730. That level now carries added macro significance: a firm break would suggest Canada-specific trade risk is becoming strong enough to overpower the broader bearish Dollar structure, opening a stronger recovery toward 1.4002 support turned resistance.

For now, the larger outlook is unchanged. The rebound from 1.3480 appears to have completed as a three-wave corrective move at 1.4247. A break below 1.3730 would resume the decline toward 1.3480.

If USD/CAD can’t clear 1.3927 despite 50% tariff headlines and weaker oil, the market’s message would be difficult to ignore: the immediate Canada risk premium is still contained, while the Dollar side of the pair continues to exert greater influence. September 8, when Canada’s retaliation is scheduled to begin, is the next obvious test of whether that judgment holds.

Key Takeaways USD/CAD’s recovery from 1.3730 has stayed restrained despite 50% tariffs, signaling markets see this as a contained shock rather than an economy-wide one. The tariffs apply to roughly C$28bn of exports, not Canada’s entire trade relationship, and Canada’s retaliation doesn’t begin until September 8, delaying the full economic impact. Trump invoked Section 338 of the Tariff Act of 1930, a provision no US president had used before, underscoring how unusual this escalation is even with its narrower economic scope. Oil’s decline reflects profit-taking ahead of an Iran sanctions announcement, not a demand-driven selloff, while Canadian yields and the Dollar aren’t confirming a Canada-specific stress trade. 1.3927 is the key resistance test; failure to clear it despite the tariff headlines would confirm the Canada risk premium remains contained, while a break would open a run toward 1.4002.

ActionForex

ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.

Hey everyone, I hope you're doing well. In this article, I want to discuss crude oil and USDCAD.

As you know, crude oil is still in a very nice recovery mode. In fact, we can see that crude oil has room for further strength here since it completed an ABC pullback at around $74.50, and it looks like more upside is in the cards, at least towards $95, maybe even the $100 area.

crude oilSo while energy is trading to the upside, we know that the Canadian dollar could do pretty well, and this is even more important for the bearish trend on USDCAD, especially if we consider the recent strong leg down in the dollar across the board.

When looking at USDCAD, we therefore anticipate more weakness. In fact, looking at the subdivisions, it seems like we are still in the middle of this bearish impulsive cycle, so there could be opportunities on the short side after a fourth-wave rebound. Looking at some key levels, maybe wave three is coming to an end down here at the 161.8% extension, but resistance on a rebound is at 1.3840–1.3911, which could be quite an interesting and attractive area to look for potential opportunities on the short side while the market trades below the important 1.4000 round figure.

USDCADGet Full Access To Our Premium Elliott Wave Analysis For 14 Days. Click here.

The US Dollar (USD) resumes its broader bearish trend with the Canadian Dollar (CAD) drawing support from higher Oil prices and a deal with the US to pause 50% tariffs on Canadian exports. The USD/CAD pair returns to levels below 1.3880, following rejection at the 1.3900 area, with bears eyeing the support zone at 1.3850.

US and Canada reached a last-minute deal earlier on Wednesday to delay imposing new tariffs on a wide range of Canadian goods for three days, as negotiations towards a trade agreement advance.

Beyond that, Oil prices, Canada’s main export, keep growing as the US-Iran peace process remains stalled and markets brace for an extended closure of the Strait of Hormuz. Brent Oil appreciated beyond 6% over the last three days, returning to the $90.00 area, which hints at higher trade revenues for Canada.

Technical Analysis: Support at the 200-day SMA is on focus

USD/CAD trades at 1.3876, retaining a mildly bearish near-term bias with momentum indicators in the daily chart deeply into bearish territory. The daily Relative Strength Index (RSI) hovers near 32, just above oversold levels, and the Moving Average Convergence Divergence (MACD) is well below zero, highlighting solid downside pressure.

Dips have been supported at the confluence of the 200-day Simple Moving Average (SMA) and the bottom of the descending channel, in the 1.3850 area, but the rejection at 1.3900 confirmed that bears are in charge. Further down, the next target would be the late May lows in the 1.3770 area.

On the topside, the 1.3900 level should be broken to ease bearish pressure and clear the path towards a previous support area and the channel top, near the 1.4000 level.

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

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.

USDEURGBPJPYCADAUDNZDCHFUSD-0.16%-0.13%-0.27%-0.17%0.24%0.11%-0.15%EUR0.16%0.01%-0.11%0.03%0.38%0.24%0.02%GBP0.13%-0.01%-0.11%-0.01%0.39%0.24%-0.02%JPY0.27%0.11%0.11%0.11%0.49%0.35%0.10%CAD0.17%-0.03%0.00%-0.11%0.38%0.24%-0.01%AUD-0.24%-0.38%-0.39%-0.49%-0.38%-0.13%-0.37%NZD-0.11%-0.24%-0.24%-0.35%-0.24%0.13%-0.24%CHF0.15%-0.02%0.02%-0.10%0.00%0.37%0.24% 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).

TL;DR: Brent’s break above $90 is doing double duty for CAD/JPY — strengthening Canada’s terms of trade while pushing global bond yields higher and deepening Yen funding pressure — and this time Canada’s own data are contributing too, unlike June’s Yen-only rally.

CAD/JPY Has Found a Rare Double Tailwind Brent’s break above $90 is doing more than lifting Canadian Dollar. It is also pushing global inflation expectations and bond yields higher, adding pressure to Yen. For CAD/JPY, that creates an unusually clean setup: same US-Iran shock strengthens one side of cross while weakening other.

June 17 ceasefire framework formally expired on August 17 without renewal, leaving no clear diplomatic settlement in sight. Higher oil improves Canada’s terms of trade and supports petro-currency, while renewed energy and freight inflation keeps global yields elevated. For Yen, still one of market’s principal funding currencies, wider yield differentials reinforce carry pressure. Instead of two separate narratives, CAD strength and JPY weakness are being driven by same underlying shock.

This Time Canada Is Contributing Too That is important because CAD/JPY has rallied on Yen weakness before. Late-June advance eventually stalled because Canadian Dollar itself offered limited independent support. Current move starts from a stronger domestic backdrop.

May GDP rose 0.3% m/m, beating 0.2% forecast and expanding across 13 of 20 sectors. July labor data then surprised decisively, with employment jumping 75K against 15K expected and unemployment dropping to a two-year low of 6.4%. July CPI followed with headline inflation accelerating from 2.8% to 3.0% y/y, above 2.9% consensus, while Trimmed and Median CPI firmed to 1.9% and 2.0% respectively.

Gasoline was a substantial part of headline inflation surge, rising 25.7% y/y, and part of that effect is linked to tax treatment that rolls off in September. That argues against treating CPI as proof that BoC has already returned to a tightening path. But combined with stronger growth and employment, data have at least reopened hike discussion after it had largely disappeared. For CAD, that is enough to distinguish current rally from June’s mostly Yen-driven move.

Oil Shock Is Also Hurting Yen Through Bonds Global bond market supplies second leg. US 30-year yield has climbed to around 5.31%, highest in 19 years, while 10-year is near 4.74%. Germany’s 10-year Bund has reached about 3.22%, highest since 2011, and Canada’s 10-year recently touched 3.75%, a 26-month high.

Current rise in yields carries a stagflationary flavor rather than a straightforward growth signal. Hormuz disruptions and higher energy and freight costs are lifting inflation concerns and encouraging investors to price restrictive rates for longer. That is exactly environment in which Yen’s yield disadvantage becomes harder to ignore.

BoJ normalization may eventually narrow that gap, but global yields are moving higher in meantime. Until Japanese rates catch up more substantially, higher overseas yields continue to reinforce Yen-funded carry trades. Brent above $90 therefore creates a double effect for CAD/JPY: stronger Canadian terms of trade and greater funding pressure on Yen.

Brent Consolidation Will Tell Us Whether CAD Strength Is Real Best test of this rally may come when oil stops rising.

If Brent consolidates around $90–91 and CAD/JPY continues holding or extending gains, that would be strong evidence that Canadian Dollar’s domestic improvement is doing meaningful work. GDP, employment and CPI would then be providing enough support for CAD to carry rally even without another daily oil breakout.

If CAD/JPY instead stalls immediately whenever crude stops climbing, move would look more like June again: predominantly Yen weakness with limited independent CAD follow-through.

That gives current trade a falsifiable fundamental test. A durable move toward 120 should increasingly survive without requiring Brent to make new highs every session.

Japan Can Still Interrupt the Trade Main risk does not currently come from Canada. It comes from Japan.

USD/JPY is moving back toward 160 intervention-sensitive zone, reviving possibility of verbal or direct action from Japanese authorities. September 18 BoJ meeting also approaches with substantial probability of another rate increase already priced.

Either development could hit CAD/JPY even if oil remains high. Actual intervention would likely trigger broad Yen buying across crosses, while a BoJ hike would challenge carry mechanism more fundamentally.

That makes 120 a plausible target, but not a low-volatility one. Stronger oil and global yields are pushing Yen in exactly direction that increases likelihood of Japanese response.

ActionForex’s Technical View on CAD/JPY: Break of 117.50 Would Put 120.86 on Map Technical structure supports bullish case. CAD/JPY has decisively reclaimed 55-day EMA around 114.52, adding to argument that correction from 117.50 ended at 110.82 in a three-wave structure. That low held around 111.28, 38.2% retracement of larger rise from 101.24 to 117.50, preserving medium-term uptrend.

Near-term bias stays higher while 113.86 holds. 116.45 is first resistance and a firm break would strengthen case that rebound has enough momentum to retest 117.50. Decisive break of 117.50 would be more important, signaling likely resumption of broader uptrend and opening 120 psychological level, followed by 120.86, 61.8% projection of 101.24 to 117.50 from 110.82.

Break below 113.86 would postpone that bullish scenario and suggest correction from 117.50 is extending. But while oil stays elevated, Canadian data remain firm and global yields keep Yen under pressure, CAD/JPY has a stronger foundation than during June’s failed advance. This time, both sides of cross are helping.

Key Takeaways Brent’s break above $90 is strengthening CAD/JPY from both sides: improving Canada’s terms of trade while pushing global yields higher and pressuring the Yen’s carry-funding role. Unlike June’s Yen-only rally, Canada’s own data are now contributing, with a 75K jobs beat, firmer May GDP, and CPI reopening the BoC hike discussion. Global bond yields are rising with a stagflationary character, with the US 30-year at a 19-year high and German and Canadian yields at multi-year highs. Brent stabilizing around $90-91 is a falsifiable test: continued CAD/JPY strength without new oil highs would confirm the domestic Canadian story is real. 117.50 is the key resistance for a run toward 120 and then 120.86, but USD/JPY nearing the 159.6-160.6 intervention zone and the September 18 BoJ meeting remain the main risks to that path.

ActionForex

ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.

Indian rupee intervention returns as USD/INR hovers near all-time highUKMTO report a vessel hit by a projectile while sailing out of the Strait of Hormuz.Analysts say that a surprise China LPR cut cannot be ruled out this weekBHP CEO plays down Canada uranium talk, stays focused on four pillarsWestpac says dollar's structural headwinds outweigh recent resilience, see EUR/USD and GBP/USD higherING says heavy tone in Treasuries has further to run as truce lapsesICYMI: ETF flows return to gold as Saxo flags 289-tonne central bank demandAustralian consumer sentiment rises 6% to 88.9 but stays deep in pessimismPBOC sets USD/ CNY reference rate for today at 6.7905 (vs. estimate at 6.7452)Goldman calls September Fed hike very unlikely as inflation easesChina unveils nine-department plan to boost county-level consumptionPBOC seen shifting to overnight reverse repos as core liquidity toolICYMI: Wells Fargo cuts 2026 gold target to $4,900-5,100, still bullish overallGold nears $4,500 resistance as central bank buying meets fading Fed hike betsJoint US-Japan intervention loses grip as USD/JPY climbs back above 159Morgan Stanley targets EUR/AUD at 1.53, backs Aussie dollar carry tradeUBS stays constructive on equities as Fed hike case weakens on soft dataJackson Hole hype outruns Warsh playbook of saying as little as possibleOil up, a packed 24 hours. Iran shifts to fully offensive posture as Trump threatens to bomb Oman over Hormuz.US stock indices closed lower on the day. Declines are led by the S&P/DowinvestingLive Americas FX news wrap 17 AugSummary:

UKMTO reported a vessel was struck while transiting the Strait of Hormuz, sustaining engine room damage and a crew casualty; further detail on the attack, including attribution and the extent of casualties, remains unconfirmedThe US diesel crack, the premium of diesel futures over WTI, hit a record $102.20 a barrel, with agricultural and shipping demand adding to strain from Iran and Ukraine-linked supply disruptionsThe 10-year JGB yield rose to around 2.945%, its highest level since September 1996; the 5-year yield was also reported up, to 2.18% and its highest ever.Foreign holdings of US Treasuries fell to $9.299 trillion in June, led by declines from Japan, the UK and ChinaThe RBI is seen selling US dollars to support the rupee as USD/INR trades near record highsAsian equities were mixed, with Japan's Nikkei and Topix under pressure and Chinese mainland indices reported lower into the midday break; South Korea's KOSPI move needs confirmation given conflicting reports on directionOil markets found renewed support Monday after UKMTO reported a vessel was struck while transiting the Strait of Hormuz, sustaining damage to its engine room and a crew casualty. The incident adds to an already fragile picture in the strait following the lapse of the 60-day US-Iran memorandum of understanding, with the market continuing to price a lack of near-term de-escalation.

The US diesel crack, the premium of diesel futures over West Texas Intermediate crude, hit a record $102.20 a barrel, as global supply disruptions tied to the wars in Iran and Ukraine collided with peak agricultural consumption season. Refining margins at that level typically flow through to broader costs over time, with agriculture and shipping both reliant on diesel-powered equipment and heating oil demand set to add further pressure heading into winter. Higher refining costs are expected to filter through to consumers and businesses via transport and logistics costs in the coming weeks and months.

Elevated bond yields remained a global theme beyond the US. Japan's 10-year government bond yield rose to around 2.95%, its highest level since September 1996, while the 5-year yield was also reported higher on the session, extending a recent run of multi-decade highs across the JGB curve. In the US, data released after regular trading hours showed foreign holdings of Treasuries fell to $9.299 trillion in June, led by declines from Japan, the UK and China. The data series is volatile month to month, but the latest reading adds to the case, at the margin, for continued upward pressure on yields.

Major currencies traded relatively steadily. NZD was heqavy, with wekaer China data yesterday cited. The Reserve Bank of India is seen selling US dollars to support the rupee, with USD/INR trading near record highs, extending a pattern of periodic intervention through 2026 amid persistent foreign equity outflows, elevated oil prices, and ongoing US tariff friction tied to India's Russian oil purchases.

Asian equities were mixed. Japan's Nikkei and Topix indices slid, while South Korea's KOSPI showed early strength before a later pullback. Chinese mainland benchmarks were reported lower into the midday break, with the Shanghai Composite, Shenzhen Component and ChiNext all pointing to a weaker session.

Commodity markets have been unusually active over the past week, but the reasons behind the moves differ considerably from one market to another.

Copper is being driven largely by physical tightness and the movement of inventories into the United States. Gold has responded to weaker US labour-market data and changing expectations for Federal Reserve policy. Platinum continues to reflect a combination of precious-metal flows and a structurally tight physical market, while crude oil remains dominated by geopolitical risk and disruption around the Strait of Hormuz.

For traders, the important point is that these markets cannot be analysed through one common macro lens. Each commodity is responding to a different mix of supply, demand, monetary policy and geopolitical risk.

Copper: Tight supply is more important than strong growthCopper has remained exceptionally firm, trading around $6.65 per pound in the US and close to $14,400 per tonne on the London Metal Exchange.

COMEX copper reached a record closing price of $6.703 per pound on 5 August, but the strength in the market is not simply a story of accelerating global growth.

The more important development is the tightening physical market outside the United States.

More than 200,000 tonnes of copper arrived in the US during July, the largest monthly inflow in at least 12 years. US-based COMEX and LME warehouses have consequently accumulated more than 740,000 tonnes of copper.

By late July, CME warehouses alone held around 58% of visible global exchange inventories.

The reason is largely related to expectations surrounding possible US tariffs on refined copper. Traders have had an incentive to move metal into the United States before any change in tariff policy, effectively pulling available copper away from other parts of the world.

That geographical shift matters.

LME copper inventories fell from around 238,350 tonnes on 4 August to approximately 214,550 tonnes by 11 August. That is a fall of close to 10% in just one week.

The futures curve is also reinforcing the same message.

LME cash copper has been trading around $208 per tonne above the three-month contract. This is known as backwardation and is normally associated with tight immediate supply. Buyers are willing to pay more for copper today than for copper delivered several months from now.

Chinese exchange inventories have also fallen sharply from their March highs, although the demand picture in China is not entirely bullish. Manufacturing activity remains relatively soft, meaning the current copper strength is not being driven by a straightforward boom in Chinese industrial growth.

There are also continuing supply risks.

The Democratic Republic of Congo has introduced restrictions on exports of some copper concentrates, while production problems at major operations such as Grasberg remain part of the broader supply story.

Meanwhile, long-term demand remains supportive.

Electricity grids, electric vehicles, renewable energy infrastructure and the rapid expansion of AI data centres all require significant amounts of copper.

The overall picture is therefore unusual: global growth signals remain mixed, yet the physical copper market is tight.

For traders, that makes inventory levels, exchange spreads and the location of physical metal particularly important.

Gold: Weak US employment changes the rate storyGold has also had a strong week, but for very different reasons.

Spot gold is trading around $4,390 per ounce, compared with roughly $4,086 on 4 August. That represents a gain of more than 7% in just over a week.

The main catalyst has been a change in expectations for US monetary policy.

July's US employment report was significantly weaker than expected. Nonfarm payrolls were forecast to increase by around 80,000, but instead fell by 23,000.

May and June payroll figures were also revised down by a combined 103,000 jobs.

The unemployment rate remained relatively low at 4.1%, but the broader message from the report was that employment growth is losing momentum.

Markets responded by reducing expectations for another Federal Reserve rate increase.

Immediately after the jobs report, the probability of a September rate increase fell from around 57% to approximately 44%.

That matters enormously for gold.

Gold produces no yield, so when markets expect lower interest rates and lower bond yields, the opportunity cost of holding gold falls. A weaker US dollar can provide an additional tailwind because gold becomes cheaper for buyers using other currencies.

Geopolitical uncertainty has added another layer of support.

The continuing situation around Iran and the Strait of Hormuz has maintained demand for safe-haven assets, although the relationship is not entirely straightforward.

Higher geopolitical risk can support gold directly, but if the same risk drives oil prices significantly higher, it can also increase inflation expectations. If higher inflation forces the Federal Reserve to remain restrictive, Treasury yields could rise and create a headwind for gold.

Central-bank demand remains another important part of the picture.

China added around 20 tonnes of gold to its official reserves during July, while global gold-backed ETFs attracted roughly $3 billion of net inflows during the month. ETF holdings increased by approximately 23 tonnes.

This means investment demand is improving at the same time that central banks remain active buyers.

The next major psychological level is around $4,500 per ounce.

The broader gold story, however, remains centred on the Federal Reserve.

If US data continues to weaken without a corresponding acceleration in inflation, the environment remains supportive for gold. If inflation stays high enough to force further tightening, the market could become more vulnerable.

Platinum: A precious metal with an industrial supply problemPlatinum has been another strong performer, trading around $1,760 to $1,770 per ounce after gaining 7.1% in a single session on 4 August.

Platinum is more complicated than gold because it sits between the precious-metals and industrial-metals markets.

It can benefit from lower interest-rate expectations and a weaker dollar, but it is also heavily influenced by automotive demand, industrial activity and physical supply.

The physical market remains structurally tight.

Current forecasts suggest platinum demand of around 7.674 million ounces in 2026 against supply of approximately 7.377 million ounces.

That leaves an expected deficit of roughly 297,000 ounces.

If realised, this would mark the fourth consecutive annual platinum deficit.

Above-ground inventories are forecast to fall to around 1.747 million ounces by the end of the year, equivalent to less than three months of global demand.

That leaves the market relatively exposed to further supply disruption.

South Africa remains central to the platinum story, producing roughly 70% of global mine supply. This geographical concentration means any operational, labour or power-related disruption can have an outsized impact on the market.

Automotive demand remains one of platinum's most important demand sources.

Around 2.959 million ounces of demand is expected to come from the automotive sector this year. Hybrid vehicle production is forecast to rise by roughly 12%, which is important because hybrids still require catalytic converters.

Battery electric vehicles remain a longer-term risk because they do not use conventional exhaust systems and therefore do not require traditional autocatalysts.

Industrial demand is another supportive factor, with consumption forecast to increase by around 9%.

Jewellery is the weaker part of the picture. Global platinum jewellery demand is expected to decline by around 12%, with Chinese demand particularly soft.

Longer term, hydrogen technologies and potential AI-related PGM applications could create additional demand, although these areas should still be viewed as developing themes rather than dominant current drivers.

For now, the most important point is that platinum combines improving macro conditions with a physical market that remains in deficit.

That makes it very different from gold, where monetary policy dominates the discussion.

Crude Oil: Hormuz is driving the marketCrude oil is currently the most headline-sensitive of the major commodity markets.

WTI is trading around $84 per barrel, while Brent is close to $90.

The central issue is Iran and the Strait of Hormuz.

Roughly one-fifth of global petroleum flows normally pass through the Strait, making it one of the most strategically important shipping routes in the world.

WTI fell to around $75.77 on 4 August when markets became more optimistic that progress towards a US-Iran agreement could reduce regional tensions and restore more normal shipping conditions.

That optimism faded quickly.

As doubts over an agreement increased, oil recovered above $80 and WTI subsequently traded as high as approximately $84.60.

The physical disruption is significant.

Around 5.5 million barrels per day of Middle Eastern oil production was estimated to have been offline on average during July. That is more than 5% of global oil consumption.

Around 600,000 barrels per day of regional production could also remain offline through 2027, according to current projections.

This is why oil has been reacting so aggressively to every development surrounding Iran and Hormuz.

The market is not simply pricing political uncertainty. It is pricing whether crude can physically reach global consumers.

The US inventory picture provides an important bearish counterweight.

The latest official EIA data showed commercial crude inventories increasing by around 2.5 million barrels to approximately 407 million barrels.

Cushing inventories also rose by around 2.4 million barrels.

More recent preliminary API data indicated an even larger build of around 9.1 million barrels, although that figure should be treated as preliminary until confirmed by official government data.

Refined products tell a different story.

US distillate inventories are around 107.2 million barrels, close to a 30-year seasonal low. Tight diesel availability and refinery disruptions have therefore helped keep refined-product markets firm even while headline crude inventories have increased.

OPEC+ is another bearish consideration.

The group has agreed to an additional production adjustment of around 188,000 barrels per day from September.

In normal conditions, extra OPEC+ supply would place downward pressure on crude prices.

The problem today is that additional production does not fully resolve a logistics crisis. Producing more oil is of limited benefit if shipping routes remain heavily disrupted.

That is why geopolitical risk continues to outweigh some of the more conventional bearish supply signals.

The longer-term risk is demand destruction.

If oil prices remain elevated for long enough, higher fuel costs can weaken consumer demand, increase business costs and eventually slow economic activity. At that point, the same price increase caused by a supply shortage can begin to reduce demand.

Four commodities, four different storiesThe recent moves across commodities demonstrate why traders need to understand the underlying transmission mechanism rather than simply watching whether prices are rising or falling.

Copper is being driven by tightening physical availability, falling non-US inventories and structural demand from electrification and technology.

Gold is being driven by weaker US employment, changing Federal Reserve expectations, the dollar, central-bank buying and geopolitical risk.

Platinum is being supported by repeated market deficits, limited inventories and resilient industrial and automotive demand.

Crude oil is dominated by physical Middle Eastern supply disruption and the Strait of Hormuz, with rising US inventories and additional OPEC+ production acting as the main bearish counterweights.

The common lesson is that commodity markets rarely move for one reason alone.

The strongest trading opportunities often emerge when several drivers begin to point in the same direction. Equally, the greatest risks often appear when price momentum looks strong but the underlying fundamentals start to diverge.

For traders, the task is therefore not simply to ask whether a commodity is bullish or bearish.

The more useful question is:

What is driving the move, and is that driver getting stronger or weaker?

Market moving news for Asian trading on Tuesday, August 11, 2026

Singapore doubles 2026 growth outlook to 4.5-5.5% on tech cycle upgradeRupee set to open weaker as oil pressure builds, RBI support in focusSources: BoJ could raise rates again at September 17-18 meetingSouth Korea: Kospi rises for second day as Samsung Electronics jumps circa 3.6%Australian business conditions edge higher in July but confidence stays fragileNZ PM Luxon calls urgent caucus meeting to address leadership speculationPBOC sets seven-day reverse repo volume at ZERO on Tuesday, citing primary dealer demandGold hits two-month high as markets await US inflation data this weekUK data: Barclaycard spending rises 2.0% in July as consumer confidence hits 21-month highPBOC sets USD/ CNY central rate at 6.7900 (vs. estimate at 6.7497)Yen strength still hinges on BOJ hike, not capital repatriation (or intervention!), Goldman saysIntel plans to sell $15 billion worth of stock after it has risen 400% in a yearYen support looks fragile; Tokyo opts for passive strategy, missed chance to press intervention advantageRBA set to hold rates today, but markets will be watching the fine printPreview: RBA to stay in pause and observe mode, TD Securities says ahead of today's decisionICYMI - Cleveland Fed's Hammack says Fed should already be raising rates, more than one hike neededUNCONFIRMED - Incoming report of further cruise missile launches from Sirik, IranMUFG opens long AUDJPY at 111.20, targets 114.50 as yen intervention debate buildsWhat'd I miss? Trump counters Iran reparations demand, pushing Hormuz deal further out of reach.Summary:

Oil stays supported as Hormuz deal hopes dim further on tit-for-tat reparations demands from Iran and TrumpLibya's NOC declares force majeure at Zawiya refinery after armed clashes and storage tank fires, threatening El Sharara outputRussia's Komsomolsk refinery in Khabarovsk Krai attacked, over 6,500km from UkraineFX subdued; AUD in focus ahead of RBA decision (2:30pm Sydney), hawkish hold expectedKospi up circa 0.6% for a second day on Samsung strength; won stronger, foreigners net buyersJapan closed for holiday; media reports firm September 18 BoJ hike expectations, yen little moved regardlessSingapore Q2 GDP beats at 5.9% y/y, 2026 growth forecast raised to 4.5-5.5% on AI boom; MAS says policy stance remains appropriateOil remained supported in the absence of a Strait of Hormuz deal and with efforts to reopen the waterway dampened by tit-for-tat demands by Iran and US President Trump for reparations.

Further, Libya's NOC declares force majeure at Zawiya refinery after clashes. Libya's state-owned National Oil Corporation (NOC) declared force majeure at its 120,000 b/d Zawiya refinery following clashes between armed groups. The refinery experienced fires after storage tanks were hit, multiple times, threatening production at the El Sharara oil field.

Russia's Komsomolsk Oil Refinery in Khabarovsk Krai came under attack. This is 6,500+ kms from Ukraine.

FX traded in subdued ranges. AUD traders are awaiting the RBA at 2:30pm Sydney time / 0430 GMT / 0030 US Eastern time, with Reserve Bank of Australia Governor Bullock's press conference following an hour later. A hawkish hold is expected.

RBA preview: Analysts see cash rate on hold at 4.35% TuesdayRBA preview - Westpac says soft Q2 CPI gives RBA room to hold at 4.35%Preview: RBA meet Tuesday. CBA expects RBA to hold rates through the rest of 2026

MUFG opens long AUDJPY at 111.20, targets 114.50 as yen intervention debate buildsPreview: RBA to stay in pause and observe mode, TD Securities says ahead of today's decisionRBA set to hold rates today, but markets will be watching the fine printSouth Korea's Kospi rose for a second straight day, up around 0.6%, as Samsung Electronics jumped circa 3.6% while SK Hynix and LG Energy Solution slipped. Foreigners were net buyers and the won strengthened, even as broader sentiment stayed cautious on the Middle East conflict.

Japanese markets were closed for a holiday. Reports from Japanese media, citing unnamed sources, firmed expectations for a Bank of Japan September (18th) interest rate hike. The yen fell regardless, though only in a small range.

Singapore's economy grew 5.9% year on year in Q2, beating forecasts, as the government raised its 2026 growth outlook to 4.5-5.5% from 2.0-4.0%, citing a stronger than expected AI investment boom offsetting a less severe than feared Middle East war impact. An official from Singapore's central bank, the Monetary Authority of Singapore, said the country's monetary policy stance remains appropriate.

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Singapore doubles 2026 growth outlook to 4.5-5.5% on tech cycle upgradeinvestingLive Asia-Pacific Financial Market news: Oil and gold stay near highs Rupee set to open weaker as oil pressure builds, RBI support in focusSources: BoJ could raise rates again at September 17-18 meetingSouth Korea: Kospi rises for second day as Samsung Electronics jumps circa 3.6%Australian business conditions edge higher in July but confidence stays fragileNZ PM Luxon calls urgent caucus meeting to address leadership speculationPBOC sets seven-day reverse repo volume at ZERO on Tuesday, citing primary dealer demandGold hits two-month high as markets await US inflation data this weekUK data: Barclaycard spending rises 2.0% in July as consumer confidence hits 21-month high

Persistent shifts in sentiment surrounding a potential US-Iran agreement continue to reinforce, rather than eliminate, geopolitical risks. As a result, both crude oil and the US Dollar Index (DXY) have regained ground, with the DXY holding above its 2026 uptrend support near 99.30 and WTI crude remaining firmly above the $70 mark.

The unresolved security framework surrounding the Strait of Hormuz—including future navigation and transit arrangements—remains one of the key obstacles preventing the conflict from transitioning into a durable ceasefire and the full resumption of shipping flows through the strait. Alongside the broader nuclear negotiations that remain central to any lasting resolution, these issues require a long-term political framework before markets can confidently price a sustained geopolitical de-escalation.

As discussed in my previous article, Crude Oil Outlook: What the 1973 Oil Embargo Tells Us About the 2026 Hormuz Crisis, the current environment may resemble historical episodes such as the 1973 oil embargo, when geopolitical uncertainty kept energy risk premiums elevated until durable security and political frameworks were established, supporting decades of stability in global energy markets. Similar conditions have yet to emerge in the 2026 Strait of Hormuz conflict.

The recent market reaction continues to reinforce this intermarket framework:

The Dow Jones was the first major index to rally to fresh record highs before broader equity markets followed, while simultaneously testing a major higher-timeframe resistance zone. Dow Jones Outlook The US Dollar Index (DXY) corrected only to its 2026 uptrend support near 99.30, maintaining its broader bullish structure. DXY Outlook  WTI and Brent crude oil continue to hold above their respective geopolitical risk premium zones near $66 and $70, suggesting markets have yet to fully price a lasting de-escalation. Markets reward trends far more consistently than geopolitical headlines. Headlines may trigger volatility, but sustained trends require confirmation through price action. Current intermarket relationships continue to favor caution. Equity indices are testing major long-term resistance, Bitcoin remains unable to confirm the broader risk-on move, the US dollar continues to respect its 2026 bullish structure, and USD/JPY remains resilient despite persistent intervention risks. Together, these signals suggest that markets continue to price geopolitical uncertainty, elevated Treasury yields, and expectations for a more hawkish Federal Reserve as the dominant macro narrative.

Crude Oil Price Outlook: Weekly Time Frame – Log Scale

Source: TradingView

WTI crude oil's latest pullback found support near $72, corresponding with the 78.6% Fibonacci retracement of July's advance. Persistent US-Iran tensions helped stabilize prices above that level, reinforcing the broader bullish structure.

Price action continues to hold above the $70–72 support zone, maintaining the geopolitical risk premium embedded in oil prices. A sustained move above $77—the multi-month support level from March 2026 that has since turned into resistance—would expose the next Fibonacci extension levels derived from July's advance:

$80.40 – 27.2% Fibonacci extension $83.30 – 38.2% Fibonacci extension $86.50 – 50% Fibonacci extension $89.60 – 61.8% Fibonacci extension, representing a major area where pullback risks may emerge as it aligns with the long-term trendline extending from the lower boundary of the March-June consolidation that preceded July's decline from $93 to $77. Such a move would likely coincide with persistent tensions surrounding the Strait of Hormuz and continued disruptions to crude oil refining and supply chains. A sustained move into the $86.50–89.60 region would suggest markets are pricing another phase of geopolitical escalation, increasing broader market drawdown risks.

Bearish Scenario

Should WTI crude oil fall back below $72, attention would immediately shift to the $68–66.50 support zone.

This area continues to define the broader escalation versus de-escalation narrative for 2026, having repeatedly acted as both support and resistance since 2019. A weekly close below $66.50 would expose the 2026 lows near $55, signalling that markets are beginning to price a longer-term geopolitical de-escalation scenario. Such a development would likely improve global risk sentiment while easing inflationary pressures.

USD/JPY Outlook: Weekly Time Frame – Log Scale

Source: TradingView

The USD/JPY pullback from the 164.00 confluence zone—a resistance area aligning with both the midpoint of the April 2025–July 2026 channel and the broader 2022–2026 channel—found support near 155.00.

Current support aligns with:

The 38.2% Fibonacci retracement of the April 2025–July 2026 advance. Oversold daily momentum, last seen in 2024. A breakdown below the 2025–2026 ascending channel. Should the current rebound stabilize above 159.50, bullish momentum could return, allowing the pair to retest 161.00, 161.80, and eventually 164.00.

These former support levels may now act as resistance during another test of price levels not seen since the 1980s. A sustained break above 164.00 would expose the upper boundary of the broader channel near 170, following a significant rebuilding of upside momentum.

Conversely, a close below 155.00 would expose the next key support levels at 152.00 and 149.00. This remains a critical region, aligning with the lower boundary of the 2022–2026 channel and defining the longer-term bullish versus bearish outlook for the US dollar—not only against the Japanese yen but across broader financial markets.

The broader outlook continues to favour a bullish bias unless a durable framework governing Middle East shipping routes is established, US Treasury yields begin to decline, and expectations for further Federal Reserve tightening continue to fade.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves

Summary:

USD/CAD climbed toward weekly highs as falling oil prices weakened the Canadian dollar despite strong domestic trade data. Canada's trade surplus reached a four-year high, but the positive economic data was overshadowed by the sharp decline in crude oil prices. Markets are reassessing Federal Reserve expectations, limiting gains in the US dollar after weaker-than-expected US economic data. USD/CAD rises as oil prices pressure the Canadian dollar The USD/CAD exchange rate extended its gains on Wednesday, climbing toward the 1.4080 level as another sharp decline in oil prices continued to pressure the Canadian dollar.

The move came despite encouraging economic data from Canada, where the country’s merchandise trade surplus expanded to its highest level in four years during June. Under normal market conditions, stronger trade figures would support the loonie. However, investors remained focused on the collapse in crude oil prices, which has become the dominant driver of the Canadian currency this week.

Canada is one of the world’s largest crude exporters, meaning movements in oil prices often have a direct impact on the value of the Canadian dollar. With Brent crude slipping below $80 per barrel as hopes for a diplomatic breakthrough between the United States and Iran improved, traders reduced exposure to the loonie in anticipation of weaker export revenues.

Lower oil prices offset stronger Canadian economic data The Canadian dollar struggled to capitalize on stronger-than-expected domestic economic data as falling crude oil prices remained the dominant driver of market sentiment. Canada reported a merchandise trade surplus that climbed to a four-year high in June, reflecting resilient exports and healthy external demand. Under normal circumstances, such data would provide support for the loonie by reinforcing confidence in the country’s economic outlook.

However, investors largely overlooked the upbeat trade figures as oil prices extended their recent decline. Brent crude slipped below $80 per barrel, marking its lowest level in several weeks, after growing optimism that diplomatic negotiations between the United States and Iran could ease tensions in the Middle East and reduce the risk of supply disruptions. Expectations that global oil supplies could stabilize prompted traders to unwind part of this year’s geopolitical risk premium.

Because crude oil is Canada’s largest export, movements in energy prices have a significant impact on the country’s trade balance, corporate earnings and economic growth prospects. The latest decline in oil prices therefore outweighed the positive impact of Canada’s stronger trade data, leaving the loonie under pressure as investors continued to favor the US dollar.

Softer US data caps US dollar gains While USD/CAD continued to move higher, gains in the US dollar remained limited as investors reassessed the outlook for Federal Reserve policy following a fresh batch of weaker-than-expected US economic data. The greenback initially found support from broad risk sentiment but struggled to build sustained momentum as markets questioned whether the Fed would have enough justification to continue tightening monetary policy.

Recent economic releases painted a mixed picture of the US economy. JOLTS job openings fell by more than economists had anticipated, suggesting labor demand is beginning to cool after months of resilience. Meanwhile, factory orders unexpectedly declined, pointing to softer business investment and moderating manufacturing activity. Together, the data reinforced expectations that economic momentum is slowing, reducing pressure on the Fed to raise interest rates aggressively in the near term.

As a result, traders scaled back expectations for another interest rate hike, with market-implied odds of a September increase easing from the previous session. Lower rate expectations tend to weigh on the US dollar by narrowing its interest-rate advantage over other major currencies.

Despite this, USD/CAD remained supported because weakness in the Canadian dollar proved more significant than softness in the greenback. Falling crude oil prices continued to undermine the loonie, allowing the pair to edge higher even as US dollar gains were capped by expectations of a less hawkish Federal Reserve.

USD/CAD outlook The USD/CAD outlook remains cautiously bullish while the pair trades above the psychological 1.4000 support level. Buyers are now testing resistance around 1.4090, a key technical barrier that has capped recent advances. A decisive breakout above this level could expose 1.4125, with the yearly high near 1.4250 becoming the next major upside target.

However, if oil prices recover or expectations for further Federal Reserve tightening continue to fade, the Canadian dollar could regain some ground, potentially pulling USD/CAD back toward 1.4000.

Why is USD/CAD rising today?

USD/CAD is rising mainly because falling oil prices are weakening the Canadian dollar, while the US dollar remains relatively stable despite softer US economic data.

What is the next key level for USD/CAD?

The immediate resistance level is around 1.4090. A sustained move above this level could open the door for a test of 1.4125, followed by the 2026 highs near 1.4250.

Why do oil prices affect the Canadian dollar?

Canada is a major oil exporter. Lower crude prices reduce export revenues and typically weaken the Canadian dollar, while higher oil prices generally support the currency.

TL;DR: AUD/USD is rallying on improving risk sentiment and a softer Dollar, but the same falling oil prices driving that optimism are also weakening two of Australia’s own fundamental supports — explaining why the pair has lagged the broader market risk momentum.

A Rally That Looks Surprisingly Restrained AUD/USD has staged a rally over the past two days, benefiting from a broad improvement in global risk sentiment, a softer US Dollar, and surging industrial commodity prices. Yet the Aussie’s momentum has looked surprisingly restrained. Wall Street has pushed to fresh record highs, Asian equities have rebounded, and copper has climbed to another record — but AUD/USD has merely edged toward resistance rather than breaking decisively higher.

The contrast suggests the market is weighing two very different implications of the same geopolitical story. Optimism that the Strait of Hormuz could reopen is undoubtedly supporting risk assets globally, but it’s also lowering oil prices in a way that weakens some of Australia’s own fundamental supports. The result is a currency pair caught between powerful global tailwinds and equally meaningful domestic headwinds.

Risk Appetite Is Providing Plenty of Support There’s little doubt the global backdrop has become more supportive for growth-sensitive currencies. The Dow Jones Industrial Average climbed to another record high overnight, while both Japan’s Nikkei and South Korea’s KOSPI surged more than 3.5%, reflecting a broad-based improvement in investor confidence rather than isolated strength in individual markets. Such an environment has traditionally favored the Australian Dollar, often treated as a high-beta proxy for global growth expectations.

Commodity markets have reinforced that narrative. Copper has climbed to fresh record highs this week, supported by structural demand from AI-related infrastructure investment and ongoing supply constraints in China. For Australia, this is particularly significant — copper isn’t merely another commodity but an important contributor to the country’s terms of trade, meaning sustained gains normally translate into stronger support for the Australian Dollar.

At the same time, the US Dollar has weakened as markets rapidly scaled back expectations for further Federal Reserve tightening. The probability of the Fed leaving rates unchanged in September has risen sharply over the past two days, as hopes of a Strait of Hormuz reopening reduced fears of another energy-driven inflation shock. Lower Treasury yields have weighed broadly on the Dollar, providing AUD/USD with an additional lift even without any improvement in Australia’s own economic outlook.

The Same Oil Story Is Working Against Australia The complication is that the very catalyst supporting global markets is simultaneously creating domestic headwinds for the Australian Dollar.

Lower oil prices reduce imported inflation pressures, reinforcing recent market repricing that the Reserve Bank of Australia can comfortably remain on hold after softer inflation and cooling labor market data. Markets had already moved toward expecting a prolonged pause in the RBA’s tightening cycle; falling energy prices only strengthen that conviction by reducing one of the principal upside risks to inflation.

Oil also matters to Australia through a less obvious but equally important channel. A large share of Australia’s LNG exports is priced against Japanese Customs-Cleared Crude benchmarks. As Brent declines, Australia’s export revenues from LNG become less supportive for the country’s terms of trade. In other words, the same fall in oil prices that boosts global equities also removes one of the Australian Dollar’s traditional sources of fundamental support.

This explains why AUD/USD has lagged behind the broader improvement in market sentiment. The global risk environment argues for a stronger Australian Dollar, but Australia’s own interest rate outlook and export dynamics are pulling in the opposite direction.

ActionForex’s Technical View on AUD/USD Technically, AUD/USD’s rebound from 0.6864 resumed by breaking through temporary top today. For now, further rally is expected as long as 0.6983 minor support holds. The next target is the 100% projection of 0.6864 to 0.7026 from 0.6921, at 0.7021. A decisive break there would argue the rebound is an impulsive move — and, more importantly, add to the case that it’s reversing the whole fall from 0.7277. In that scenario, further rally should be seen to the 161.8% projection at 0.7183 next.

However, rejection at or below 0.7021, followed by a break of 0.6983, will turn focus back to 0.6921. A firm break there would argue the rebound has completed as a corrective move, in turn suggesting the fall from 0.7277 is ready to resume through the 0.6864 low.

Key Takeaways AUD/USD has lagged Wall Street’s record highs, a 3.5%+ Asian equity surge, and record copper prices despite the same optimism driving all three. Falling oil prices, tied to Strait of Hormuz reopening hopes, are cutting two ways: supporting global risk assets while reducing Australia’s imported inflation and LNG export revenue. Markets are increasingly confident the RBA can stay on hold, and falling energy prices reinforce that view by removing a key upside inflation risk. A softer US Dollar, driven by fading Fed tightening expectations, is providing AUD/USD support independent of any change in Australia’s own outlook. 0.7021 is the key resistance for confirming an impulsive rebound toward 0.7183; a break of 0.6921 would instead point to a resumed fall toward 0.6864.

ActionForex

ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.

The US Dollar (USD) appreciates for the fourth consecutive day against a weaker Canadian Dollar (CAD) on Wednesday, with the USD/CAD pair pushing against weekly highs at 1.4080 at the time of writing. The CAD is struggling as hopes of a negotiated breakthrough in Iran have sent Oil prices tumbling, although soft US data and fading hopes of immediate Federal Reserve (Fed) rate hikes are keeping the USD from appreciating further.

Crude Oil, Canada's main export, accelerated its decline on Tuesday, with the barrel of Brent Oil trading at three-week lows below $80, amid hopes that diplomacy will find its way to resolve the US-Iran conflict. The decline in Oil prices has offset the impact of the bright Canadian Merchandise Trade Surplus, which reached a four-year high in June.

In the US, recent macroeconomic figures have contributed to cool hopes of Fed tightening in the coming months. JOLTS Job Openings showed a larger-than-.expected decline in June, and Factory Orders contracted against expectations. Against this background, expectations of a Fed rate hike in September have dropped to 58%, from 67% on Tuesday, according to data by the CME Group's FedWatch Tool, which is posing a significant weight for US Dollar rallies.

Technical Analysis: Approaching the top of a triangle pattern

USD/CAD trades at 1.4072, with immediate price action showing a constructive stance and momentum indicators turning bullish. The 4-hour Relative Strength Index (RSI) has climbed above 58, and the Moving Average Convergence Divergence (MACD) holds marginally in positive territory with a flat histogram, hinting at a steady but moderate bullish tone rather than an impulsive breakout.

Bull's confidence, however, is likely to be tested at the top of the descending triangle pattern now at the 1.4090 area. A confirmation above here would clear the path towards the July 27 highs, at the 1.4125 area, ahead of the year-to-date (YTD) highs in the area of 1.4250.

On the downside, the triangle bottom, now around 1.4000, is likely to challenge bears. Further down, the 1.3920 area (June 9 low) and the 1.3865 area (May 28 high, June 5 low) emerge as the next bearish targets.

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

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 New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD-0.04%-0.07%0.00%0.06%0.05%0.50%0.01%EUR0.04%-0.03%0.05%0.10%0.07%0.51%0.05%GBP0.07%0.03%0.06%0.12%0.10%0.56%0.08%JPY0.00%-0.05%-0.06%0.06%0.05%0.48%0.00%CAD-0.06%-0.10%-0.12%-0.06%-0.02%0.45%-0.04%AUD-0.05%-0.07%-0.10%-0.05%0.02%0.45%-0.03%NZD-0.50%-0.51%-0.56%-0.48%-0.45%-0.45%-0.46%CHF-0.01%-0.05%-0.08%-0.01%0.04%0.03%0.46% 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).

Why confirmed US-Japan intervention pushed Yen strength into the crosses instead of breaking USD/JPY below 155 What’s happening: Japan and the US jointly confirmed last week’s coordinated Yen-buying intervention, the first since 2011, and did so unusually fast, extending the Yen’s rally into Monday’s session. Yet USD/JPY stalled just above the key 155 support level as buyers emerged, and Yen strength instead squeezed into the crosses, hitting AUD/JPY, NZD/JPY, GBP/JPY, CAD/JPY and CHF/JPY hardest. Why it matters: The pattern suggests traders don’t yet believe intervention was designed to force USD/JPY meaningfully below 155, just to prevent a rapid return above 160. Whether that adjustment mechanism, squeezing carry trades in the crosses, continues, or USD/JPY eventually breaks 155 outright, is one of the more important themes to watch this week.

Also today:

Oil gapped lower again to as low as $81.55 as the US cancelled planned strikes and Trump signaled talks with Iran, though Tehran says no direct negotiations are planned yet. A week of top-tier US data begins today with ISM Manufacturing, building toward Friday’s non-farm payrolls, which will shape the Fed’s flexibility heading into next week’s CPI report rather than settle September policy on its own. Confirmed Intervention Marks a Break From Japan’s Usual Playbook The week’s opening session was dominated by an unusually explicit display of currency cooperation between Washington and Tokyo. Both governments confirmed they had jointly intervened to support the Yen last week, marking the first coordinated operation since 2011. More striking than the intervention itself was the speed of the confirmation. Rather than adhering to Japan’s long-standing strategy of refusing to comment on intervention, officials on both sides moved quickly to acknowledge the operation, reinforcing the message that they stand ready to act again if necessary. The shift suggests policymakers are placing greater value on intervention credibility than on strategic ambiguity.

USD/JPY Stalls at 155 as Yen Strength Squeezes Into the Crosses That message initially extended last week’s Yen rally, pushing USD/JPY lower in early trading. Yet the decline stalled just ahead of the key 155 support area, where buyers emerged before the pair could test the level decisively. The price action is notable because it suggests traders remain reluctant to challenge what has become an important technical level. For now, the market still appears to believe the objective of last week’s intervention was to prevent another rapid return above 160 rather than engineer a sustained move below 155.

Instead of forcing USD/JPY through support, demand for the Japanese currency found another outlet. Yen strength was effectively squeezed into the crosses, with high-yielding currencies bearing the brunt of the adjustment. AUD/JPY led losses, followed by NZD/JPY, while GBP/JPY, CAD/JPY and CHF/JPY also declined sharply. The pattern points to a broader reduction in Yen-funded carry trades rather than outright Dollar weakness. Whether this remains the preferred adjustment mechanism, or whether USD/JPY eventually breaks below 155, will be one of the more interesting themes to watch in the days ahead.

Crosses Under Pressure AUD/JPY: led losses among Yen crosses NZD/JPY: second-sharpest decline GBP/JPY, CAD/JPY, CHF/JPY: also declined sharply

Oil Gaps Lower Again as Diplomatic Signals Conflict Oil markets also began the week with another sharp gap lower. Brent crude, which closed above $90 last week, briefly fell to as low as $81.55 before stabilizing around the $83 area. As in recent weeks, the move reflected hopes of easing tensions in the Middle East after the US cancelled planned military strikes over the weekend. President Donald Trump said negotiations with Iran would begin on Monday, again raising expectations of a diplomatic breakthrough.

Tehran, however, continued to offer a far more cautious assessment. Iranian Foreign Ministry spokesperson Esmail Baghaei said there were no immediate plans for direct negotiations with Washington, reiterating that discussions remain limited to Omani mediation over the Strait of Hormuz. The conflicting narratives have become a familiar feature of this crisis. Markets appear reluctant to react aggressively to political statements alone, preferring to wait for tangible evidence of changes in shipping conditions or energy flows before reassessing geopolitical risk.

A Week Packed With Top-Tier US Data Attention now shifts firmly to a week packed with top-tier US economic data. ISM Manufacturing kicks things off today, followed by ISM Services, ADP employment and Friday’s non-farm payrolls. Fed funds futures continue to price a little over a 60% probability of a September rate hike, indicating markets still lean toward further tightening but without strong conviction.

That makes this week’s data particularly important, not because they are likely to determine September policy on their own, but because they will shape how much flexibility the Federal Reserve has heading into next week’s CPI report. A strong run of data would reinforce confidence in the economy and leave policymakers well positioned to tighten again should inflation remain sticky. Conversely, softer readings would raise the bar for another hike.

This Week’s US Data Calendar Today: ISM Manufacturing This week: ISM Services, ADP employment Friday: Non-farm payrolls Fed funds futures: a little over 60% probability of a September hike Currency Performance Today For the day so far, Yen is currently the strongest, followed by Euro, and then Dollar. Aussie is the worst, followed by Kiwi, and the Swiss Franc. Sterling and Loonie are positioning in the middle.

Related Coverage Yen & Precious Metals Deep Dives Read the deeper dive into why Japan and the US broke decades of strategic ambiguity to confirm intervention this fast, and what holding above 155 would signal: Why Did Japan and the US Confirm Intervention So Fast? Can USD/JPY Hold 155?. See why Gold has stopped reacting to oil, yields and the Dollar, and what could finally break its trading range: Why Gold Ignores Oil, Yields and Dollar, and What Could Finally Break the Range. Global Manufacturing PMI Roundup Read why the UK’s softer PMI headline masks the fastest factory output growth in almost two years: UK PMI Manufacturing at Four-Month Low, but Faster Output Growth Points to Resilient Recovery. See why Eurozone factory output hit a 52-month high, and why the recovery still isn’t being driven by fresh demand: Eurozone PMI Manufacturing at Three-Month High, but Recovery Still Lacks Fresh Demand. Read how AI and semiconductor demand are offsetting Middle East-related cost pressures in Japan’s factory sector: Japan PMI Manufacturing Finalized at 54.5, AI Demand Offsets Middle East Headwinds. See why Australia’s manufacturing rebound to a six-month high still comes with a fragility warning: Australia Manufacturing PMI Finalizes at Six-Month High, Yet Inflation and Supply Risks Limit Confidence. Read the three encouraging trends inside China’s slower manufacturing expansion: China’s Manufacturing Expansion Slowed, but Three Trends Offer Encouragement. Inflation Data See why Swiss inflation’s slip to 0.4% is concentrated in imported goods, not domestic price pressures: Swiss CPI Slips to 0.4% in July on Lower Fuel and Airfare Costs. Frequently Asked Questions Q: Why did USD/JPY stall at 155 instead of continuing lower after confirmed intervention? A: Buyers emerged just ahead of the 155 support area before the pair could test it decisively, suggesting traders remain reluctant to challenge what has become an important technical level. The market still appears to believe last week’s intervention was aimed at preventing a rapid return above 160, not at engineering a sustained move below 155.

Q: Why is Yen strength showing up in crosses like AUD/JPY instead of pushing USD/JPY lower? A: Instead of forcing USD/JPY through support, demand for the Japanese currency found another outlet in the crosses. AUD/JPY led losses, followed by NZD/JPY, GBP/JPY, CAD/JPY and CHF/JPY, a pattern that points to a broader reduction in Yen-funded carry trades rather than outright Dollar weakness.

Q: Why did Brent gap lower again despite Iran signaling no immediate direct talks with the US? A: The gap reflected hopes of easing tensions after the US cancelled planned military strikes over the weekend and President Trump said negotiations with Iran would begin Monday. Iran, however, offered a more cautious assessment, with its Foreign Ministry saying discussions remain limited to Omani mediation over the Strait of Hormuz. Markets have grown reluctant to react aggressively to political statements alone, preferring tangible evidence of changes in shipping conditions or energy flows.

Key Takeaways Confirmed intervention marks a real shift in strategy: Japan and the US jointly confirmed last week’s coordinated Yen-buying operation, the first since 2011, and did so far faster than Japan’s usual practice of strategic ambiguity. USD/JPY is defending 155, not breaking it: The pair stalled just ahead of the support zone as buyers emerged, suggesting markets see intervention’s goal as capping a return above 160, not forcing a sustained move below 155. Yen strength got squeezed into the crosses instead: AUD/JPY, NZD/JPY, GBP/JPY, CAD/JPY and CHF/JPY all fell sharply, pointing to a broader unwind of Yen-funded carry trades rather than Dollar weakness. Oil’s gap lower reflects hope, not confirmation: Brent fell as low as $81.55 on prospects of US-Iran talks, but Iran’s Foreign Ministry says no direct negotiations are planned yet, just Omani mediation, keeping the conflicting-narrative pattern intact. This week’s US data matters more for Fed flexibility than for a September verdict: ISM Manufacturing, ISM Services, ADP and Friday’s payrolls will shape how much room the Fed has heading into next week’s CPI report, with Fed funds futures currently pricing just over 60% odds of a September hike. What to Watch Next Whether USD/JPY eventually breaks below 155 or continues bleeding out through the Yen crosses is one of the week’s key technical questions. On the data side, today’s ISM Manufacturing kicks off a run of releases culminating in Friday’s non-farm payrolls, all of which will help determine how much flexibility the Fed has heading into next week’s CPI report.

ActionForex

ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.

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.

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

The USD/CAD pair trades marginally lower to near 1.4113 during the European trading session on Tuesday. The Loonie pair edges down as the Canadian Dollar (CAD) outperforms its major currency peers. However, the strength is expected to be temporary, as oil prices have declined further due to continued negotiations between the United States (US) and Iran to adhere to the peace agreement after recent violations.

In European trade, the WTI Oil price posts a fresh weekly low, trading 2.2% lower to near $79.40. Currencies from economies, such as Canada, which are net energy exporters, tend to lose their appeal when oil prices start declining.

Meanwhile, the US Dollar trades flat after a strong Monday, awaiting the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. 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%.

On Monday, US President Donald Trump urged Fed Chairman Kevin Warsh to cut interest rates in the Wednesday meeting. To support his view, Trump said that there was a good inflation report recently, costs were falling rapidly, and that prices should drop significantly once the Gulf War ends.

USD/CAD technical analysis

USD/CAD trades slightly lower at around 1.4113. The pair wobbles near the 20-day exponential moving average (EMA), which is at 1.4103, suggesting a sideways trend.

The Relative Strength Index (RSI) at 53.7 has drifted back toward neutral territory, hinting that upside momentum has cooled but not reversed, leaving scope for a gradual grind higher while the price stays supported by the short-term EMA.

On the downside, the area between 1.3962 and 1.4001 would be the key demand zone for the pair. Looking up, the pair needs a decisive break above the July 14 high at 1.4157 to revisit the yearly high at 1.4248.

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

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

USD/CAD edges higher on Monday, paring earlier losses as the US Dollar (USD) rebounds after opening the week with a bearish gap. The Greenback initially weakened as a temporary pause in attacks between the United States (US) and Iran improved risk sentiment. At the time of writing, the pair trades around 1.4114 after bouncing from an intraday low of 1.4070.

Oil prices have erased most of last week’s gains in response to the pause, weighing on the commodity-linked Canadian Dollar (CAD). West Texas Intermediate (WTI) trades near $82.70 per barrel after hitting an intraday low of $81.28, but is still down more than 7% on the day.

Despite Monday’s decline, Oil prices remain elevated. However, the Loonie has received only limited support from higher Oil prices since the US-Iran war began, as USD/CAD remains driven mainly by US Dollar flows and monetary policy expectations amid heightened energy-driven inflation risks.

Markets see the Federal Reserve (Fed) as more likely to raise interest rates than the Bank of Canada (BoC). Against this backdrop, the near-term outlook for USD/CAD remains tilted to the upside, with technical indicators also pointing to easing selling pressure following the pullback from June’s high near 1.4250.

Technical analysis

On the daily chart, USD/CAD holds a constructive near-term bias as it trades above the 50-day and 100-day Simple Moving Averages (SMAs) at 1.4030 and 1.3883, respectively.

The pair is testing nearby horizontal resistance at 1.4120, while the Relative Strength Index (RSI) around 54 suggests neutral-to-firm momentum, and the Moving Average Convergence Divergence (MACD) indicator, still slightly negative but improving, hints at waning downside pressure.

A clear break above 1.4120 could open the door toward the June high near 1.4250. On the downside, the 50-day SMA near 1.4030 closely aligns with the psychological 1.4000 mark, making this area an important support zone. The 100-day SMA at 1.3883 would provide deeper support if selling pressure picks up.

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

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 British Pound.

USDEURGBPJPYCADAUDNZDCHFUSD-0.03%0.18%-0.08%0.15%-0.16%0.12%0.06%EUR0.03%0.16%-0.07%0.15%-0.16%0.15%0.07%GBP-0.18%-0.16%-0.24%-0.00%-0.32%-0.05%-0.09%JPY0.08%0.07%0.24%0.20%-0.09%0.19%0.15%CAD-0.15%-0.15%0.00%-0.20%-0.29%-0.02%-0.07%AUD0.16%0.16%0.32%0.09%0.29%0.31%0.22%NZD-0.12%-0.15%0.05%-0.19%0.02%-0.31%-0.08%CHF-0.06%-0.07%0.09%-0.15%0.07%-0.22%0.08% 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).

GBP/CAD could recover towards 1.8900 this week, although the Bank of England decision, UK fiscal concerns and volatile oil prices will determine whether the rebound can hold. The Pound to Canadian Dollar exchange rate (GBP/CAD) opened the new week near CA$1.8820, having recovered from last week’s three-week low around CA$1.8740.

GBP/CAD nevertheless ended the previous week approximately 0.4% lower, as UK fiscal concerns weighed on Pound Sterling while rising oil prices supported the commodity-linked Canadian Dollar.

Latest — Exchange Rates:

Pound to Canadian Dollar (GBP/CAD): 1.8819 (+0.20%)

Euro to Canadian Dollar (EUR/CAD): 1.608296 (+0.35%)

Dollar to Canadian Dollar (USD/CAD): 1.4096 (+0.01%)

Image: GBP/CAD Technical Outlook Ahead of the Bank of England Decision Near-term momentum has improved after GBP/CAD moved back above the 1.8800 area.

The 15-minute chart shows the pair holding above its short-term moving average and session VWAP, while the relative strength index remains positive without signalling an extreme overbought position.

Initial resistance is located around 1.8830. A sustained break above this level could open the way towards 1.8870 and then the psychologically important 1.8900 area.

On the downside, 1.8800 is the first support to watch. A break beneath 1.8780 would weaken the recovery and expose last week’s low near 1.8740.

Near-Term GBP/CAD Forecast: Bank of England Holds the Key Thursday’s Bank of England decision will provide the week’s main test for Sterling.

The Bank is widely expected to leave interest rates unchanged at 3.75%, meaning the vote split, updated forecasts and guidance on future tightening will be more important than the decision itself.

At the previous meeting, two Monetary Policy Committee members voted for an immediate increase to 4.00%.

Further concern about the inflationary impact of elevated energy prices could therefore reinforce expectations that the Bank may raise rates later this year.

A relatively hawkish decision, particularly one that keeps a September increase under consideration, would support a GBP/CAD move through 1.8830 and towards 1.8900.

However, Pound Sterling could retreat if the Bank emphasises weaker growth, softer headline inflation or the risk that higher energy costs will damage demand rather than create persistent domestic inflation.

UK political and fiscal developments will remain an additional risk.

The Pound struggled last week after Prime Minister Andy Burnham appointed John Healey as Chancellor and investors questioned how the government’s proposed tax reductions would be funded.

This political uncertainty overshadowed stronger-than-expected UK retail sales and business activity figures, preventing Sterling from making a sustained recovery.

Oil Prices and Canadian GDP Could Support the Loonie For the Canadian Dollar, oil prices are likely to remain at least as important as domestic data.

Crude prices surged last week following attacks on Saudi tankers and infrastructure around the Red Sea, but fell sharply on Monday as a pause in US-Iran attacks encouraged hopes of renewed diplomacy.

Shipping disruption through the Bab el-Mandeb Strait means the risk premium has not disappeared, leaving CAD sensitive to further geopolitical headlines.

A renewed rise in Brent crude would probably favour the Canadian Dollar and could push GBP/CAD back towards 1.8780.

Conversely, a continued oil-price correction would remove an important source of CAD support.

Friday’s Canadian GDP report will provide the main domestic event.

Statistics Canada will publish May’s GDP figures alongside an advance estimate for June, following April’s 0.5% expansion.

Stronger growth would reinforce the downside risk for GBP/CAD.

Nevertheless, the central forecast is for the pair to remain supported above 1.8780, with a hawkish Bank of England outcome potentially driving a recovery towards 1.8870–1.8900.

Ceasefire headlines trigger familiar Monday playbook Brent may now influence escalation risks Light calendar on Monday leaves geopolitics in control Charts suggest rallies remain opportunities to sell Donald Trump has delivered another Sunday TACO, triggering a familiar market reaction as Globex reopened for the week. Energy futures that spiked last week tumbled in early Asian trade, while equity futures jumped and the euro and British pound strengthened against the US dollar. Whether those moves extend into the European session will largely depend on the news flow from the Middle East. As this conflict has repeatedly shown, sentiment can turn very quickly.

Another Sunday TACO Almost inevitably, we're back here again early on Monday morning in Asia with a risk-on tone, sparked by another barrage of positive headlines out of the Middle East. After spending the weekend worrying about a major escalation, traders have once again been handed a de-escalation headline just before Globex reopened, amplifying the initial reaction in extremely illiquid conditions.

Zooming out to 40,000 feet, it seems Brent crude may no longer be just a barometer of geopolitical risk. Repeated moves below $70 a barrel during the conflict have been followed by renewed escalation. Conversely, the latest de-escalation arrived with Brent trading above $100 a barrel, a level that risks fuelling inflation and lifting gasoline prices at a politically awkward time for Trump ahead of November's midterm elections.

It's entirely speculative on my behalf, but both sides appear to have developed an implicit reaction function around Brent since the conflict began. Prices below $70 a barrel seem to invite renewed escalation, while moves above $100 have so far been met with efforts to de-escalate.

Europe Wins, For Now

Source: TradingView

The latest headlines have provided Europe an immediate release valve. Natural gas and Brent crude, shown on the left and right respectively above, have fallen sharply, drowning out renewed trade concerns after Trump threatened additional tariffs on Europe in response to the EU's antitrust fine against Alphabet. Whether those moves last will depend almost entirely on where the news flow heads next. 

EUR/USD: Downtrend Still Intact

Source: TradingView

Despite the pop higher on the ceasefire headlines, the EUR/USD H4 chart suggests this remains a sell-on-rallies play for now, with the string of lower highs and lower lows in place since the middle of July still intact.

The price remains trapped within a well-defined range between 1.1364 and 1.1397. Bulls have already failed twice to break above the upper end of that structure, including earlier today when EUR/USD briefly pushed through 1.1400 before retreating. That leaves a clear range to work with.

The oscillators suggest downside momentum is ebbing but has yet to trigger an outright bullish signal. RSI (14) has lifted but remains below the neutral 50 level, while MACD is on the cusp of a bullish crossover despite remaining in negative territory, placing greater emphasis on price action around the range extremes.

Should buyers finally break above 1.1397 and hold there, attention shifts to the former uptrend from the June 24 low, which comes in around 1.1415 today, followed by the July 7 swing high at 1.1436. On the downside, a break beneath 1.1364 would expose the June 24 swing low at 1.1325, with little meaningful technical support in between.

As long as the positive news flow from the Middle East continues, there may be scope for further upside. But the broader technical picture still favours selling rallies. The daily chart shows EUR/USD remains below its 50, 100 and 200-day moving averages, all of which continue to slope lower, suggesting the medium-term downtrend remains intact.

GBP/USD: Breakout Fading

Source: TradingView

GBP/USD looks much the same as EUR/USD on the H4 timeframe. The pair is attempting to break the downtrend that's been in place since the middle of July, although it's already given back a sizeable chunk of the gains seen earlier in the session.

The daily chart, shown in the right-hand pane, suggests rallies should still be treated with caution. The 50-day moving average is found at 1.3368, but it's the 100 and 200-day moving averages around 1.3400 that are of greater interest. The pair stalled beneath those levels last week, making them an important resistance zone should the current bounce extend.

On the H4 chart, support emerged around 1.3300 late last week, while 1.3360 is the first level overhead to watch, having acted as support earlier in the month. Outside of that range, 1.3263 is the next level of note on the downside, while 1.3400 and 1.3413 provide additional resistance above.

The oscillators suggest downside momentum is ebbing but has yet to trigger an outright bullish signal. RSI (14) continues to climb towards the neutral 50 level, while MACD has crossed above its signal line but remains below zero, placing greater emphasis on price action around these key technical levels.