Track market-moving stories before they get noisy

The Canadian Dollar (CAD) outperforms a majority of its currency peers on Friday, with the USD/CAD pair trading 0.32% lower at around 1.3888. The Canadian currency gains on hopes of a United States (US)-Canada interim deal.

A Canadian government source directly familiar with trade negotiations ‌with the United States said on Thursday that talks were progressing well and Washington also wanted an agreement before a new US tariff deadline on August 19, Reuters reports.

Meanwhile, weakness in the US Dollar due to receding fears of a Federal Reserve (Fed) interest rate hike in the September meeting has also weighed on the Loonie pair. At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.23% lower to near 99.70.

Fed patience holds as US inflation trend improves but remains above targetAnalysts at Wells Fargo observe that “inflation remains elevated, but the trend is improving,” noting that “while inflation remains above target, the recent upturn appears narrow rather than broad-based.” Against this backdrop, they judge that “the Fed remains stuck on hold,” with policymakers reluctant to shift policy until they see clearer evidence that price pressures are durably contained.

Commerzbank’s Bernd Weidensteiner similarly highlights that the inflation data for July “indicated only moderate inflationary pressure; consumer prices excluding food and energy rose by 0.2% from the previous month, while the year-over-year rate fell slightly to 2.5%.” He adds that, although this outcome was broadly in line with expectations, “these figures, combined with the unexpectedly weak jobs data, eased the pressure on the Fed to raise its key interest rates anytime soon.” Together, the banks’ commentary underscores a picture of gradually improving but still above-target US inflation, reinforcing the case for the Fed to remain on hold for now.

USD/CAD Technical Analysis

USD/CAD trades lower at around 1.3888, keeping a bearish near‑term tone as spot holds under the 100‑day simple moving average (SMA) at 1.3920 and the 50.0% Fibonacci retracement at 1.3902. The pair has retreated from recent highs toward the middle of the prior upswing range, while the Relative Strength Index (14) at 29.95 slips into oversold territory, hinting that downside momentum is stretched but not yet reversed.

On the topside, immediate resistance is located at the 50.0% retracement of the latest move at 1.3902, followed by the 100‑day SMA at 1.3920; a sustained break above this band would ease the current bearish pressure and expose the 38.2% level at 1.3984 and then the 23.6% retracement at 1.4085. On the downside, initial support is seen at the 61.8% Fibonacci retracement at 1.3819, ahead of the 78.6% level at 1.3702, while deeper losses would bring the structural swing low region near the 100.0% retracement at 1.3553 into focus.

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

Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

The US dollar strengthened against commodity currencies following the release of July US inflation data. The annual Consumer Price Index (CPI) came in at 3.4%, exactly in line with forecasts and down from the previous 3.5%, while prices rose by 0.1% month-on-month. Core inflation also matched expectations, at 0.2% month-on-month and 2.5% year-on-year. Despite the continued easing in price pressures, the report did not deliver any additional disinflationary surprise to the market. Inflation is gradually moving towards the Fed’s target, but the current pace of decline is still insufficient to significantly strengthen expectations of an imminent easing of monetary policy. Against this backdrop, the US dollar managed to recover some of its earlier losses.

USD/CAD In USD/CAD, a bullish engulfing pattern is forming after a test of the key support level around 1.3900. Technical analysis of USD/CAD points to the possibility of a move higher towards 1.3980–1.4000. A break below yesterday’s low could trigger a resumption of the downtrend, with potential targets in the 1.3770–1.3840 area.

Key events for USD/CAD:

today at 15:30 (GMT+3): US Producer Price Index (PPI); today at 15:30 (GMT+3): US initial jobless claims; today at 15:40 (GMT+3): speech by Thomas Barkin, member of the US Federal Open Market Committee (FOMC).

AUD/USD AUD/USD buyers attempted to test the key resistance level around 0.7100 today. The attempt failed, with the price retreating sharply from the level and forming a doji pattern. The appearance of a doji near resistance indicates buyer indecision and increases the likelihood of a corrective decline towards 0.7020–0.7040. The bearish scenario would be invalidated by a firm break and close above 0.7100.

Key events for AUD/USD:

tomorrow at 02:30 (GMT+3): speech by Reserve Bank of Australia Governor Michele Bullock; tomorrow at 04:30 (GMT+3): Australian housing finance data; tomorrow at 15:30 (GMT+3): US core retail sales.

Overall, the inflation data allowed the US dollar to recover some of its earlier losses, but did not provide the market with sufficient grounds for a new sustained move. The further dynamics of AUD/USD and USD/CAD will depend on today’s US producer-price and labour-market data. Stronger-than-expected figures could support the US dollar and increase pressure on commodity currencies, while weaker data could revive expectations of a more dovish Fed policy and limit the dollar’s recovery.

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HomeTechnical AnalysisIntraday Analysis 12.08.2026 Gold Pushes for $4500

USDCAD continues lower

The American dollar continued its journey lower as the sell-off shows no signs of stopping.

The pair is struggling to stay afloat at the 1.3900 zone as sellers pile on the pressure. Buyers attempted to get back into the game after a brief consolidation. Failure to hold the 1.4000 level has now become a firm resistance. 1.3970 is the first resistance, with 1.4080 the target higher.

NZDUSD(New Zealand dollar) spikes lower

The NZDUSD(New Zealand dollar) looks to break out of the recent consolidation.

A brief pullback after hitting 0.5900 gives hope for the greenback to turn around. The pair turns its attention towards the first support at 0.5850. A breach here could trigger a new round of liquidation towards 0.5780. 0.5900 remains the resistance to break as the RSI creeps lower. XAUUSD waiting for the next signal

Gold continues to grind higher to push for another fresh high after falling short at 4400.

The price is still in bullish mode after jumping over $300 since the start of the month. An overbought RSI could see a limited pullback, but all eyes are on a rally past 4400. A fall below the fresh support of 4320 would open the door to a move towards 4240.
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Summary:

Robust Canadian economic data and broad U.S. dollar weakness outweighed falling crude oil prices, pushing USD/CAD down toward two-month lows Key upcoming catalysts include Wednesday's US CPI release and new 50% US tariffs on Canadian goods effective August 19, both pivotal for direction Holding U.S. dollars carries risks from Federal Reserve rate cuts, whereas Canadian dollar exposure remains vulnerable to falling energy prices and trade friction Oil prices have fallen notably in recent weeks due to changing dynamics in the Middle East and evolving supply expectations. Despite this, the Canadian dollar has strengthened against the US dollar more than anticipated, with USD/CAD trading around 1.393, a level not seen in approximately two months.

This divergence suggests that oil prices are not the sole driver of the Canadian dollar’s performance. Other factors are providing more substantial support for the Canadian currency in the current market conditions.

Oil Is Down, But That’s Not the Story Right Now WTI crude’s been on a bumpy ride lately. After hitting a late July high near $86.89, it fell to about $74.30 in early August, though it’s since found its footing in the upper $70s. This dip came as Middle East tensions eased, partly due to a U.S.-Iran memorandum that calmed fears about Strait of Hormuz disruptions. Record U.S. output and expected inventory surpluses also played a part.

Ordinarily, a drop like that would hurt the loonie. But the currency has mostly shrugged it off.

Several key macro factors are insulating the Loonie from the recent slide in oil prices. For one, Canada’s own economic data has given the currency a lot of support. Strong domestic job numbers and steady GDP growth have boosted confidence in the country’s economic health.

Interest rate differences still favor the US dollar, as the Federal Reserve’s policy rate is higher than the Bank of Canada’s 2.25% target. While the Fed remains cautious, commentary from Vantage Markets suggests the Bank of Canada’s policy rate has reassured investors, signaling that Canadian rates have stabilized.

What to Watch in the Coming Weeks A few things could quickly change this situation. For one, everyone will be watching Wednesday’s US CPI release. A hot inflation number there could bring back Fed rate-hike expectations and give the dollar another boost.

Additionally, new U.S. tariffs of 50% on approximately $20 billion of Canadian goods are set to take effect on August 19. Unlike previous measures, these tariffs will apply even to goods that typically receive preferential treatment under the CUSMA trade agreement.

This presents a significant challenge for Canadian exporters and could exert downward pressure on the Canadian dollar once the tariffs are fully implemented.

Furthermore, the Bank of Canada’s interest rate decision on September 2 is approaching. The consensus among most analysts is that the bank will maintain its current rate of 2.25% as it continues to assess the impact of the tariffs.

Risks in Holding Either Currency If you hold Canadian dollars, you’re exposed to how commodity prices move. If oil prices fall for a while, it would hurt export earnings and the Canadian dollar. Trade uncertainty or weak Canadian economic news could also undo recent gains.

On the other side, the US dollar remains susceptible to weaker US economic indicators or a shift in Federal Reserve policy towards a more accommodative stance. Geopolitical risks can sometimes support the dollar as a safe-haven asset, while at other times, they can boost oil prices and the Canadian dollar.

Speculative positioning adds another wrinkle. Traders have been betting against the Canadian dollar more heavily than almost any other major currency. This means if something good happens for Canada, those bets could quickly unwind, causing sharp, exaggerated moves in the Canadian dollar in either direction.

Why has the Canadian dollar gained despite softer oil periods?

Stronger Canadian July jobs data, lower unemployment and relative US dollar softness have outweighed oil weakness in supporting the loonie recently.

What’s the risk of holding US dollars right now?

A weakening labor market and softer inflation data could deepen Fed rate-cut expectations, extending recent dollar weakness against major currencies including CAD.

What is the main risk for the Canadian dollar?

A sustained decline in oil prices, weaker domestic data or escalated trade tensions could reverse recent CAD strength against the US dollar.

Key Points:EUR/USD settled near the 1.1550 level as traders focused on the strong rally in the oil markets. USD/CAD pulled back as precious metals markets moved higher. USD/JPY climbed towards the 159.00 level amid rising Treasury yields.

U.S. Dollar Rebounds As Oil Markets Rally

DXY 100826 4h Chart U.S. Dollar Index gains some ground as traders focus on the strong rally in the oil markets. Oil prices are up by +5% as U.S. and Iran did not reach any deal over the weekend. President Trump signaled that he would use economic pressure to force Iran back to negotiations.

High oil prices may push inflation towards higher levels and force the Fed to raise rates at the next meeting in September, which will be bullish for the American currency.

The nearest resistance level for U.S. Dollar Index is located in the 99.85 – 100.00 range. In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance, which is located in the 100.50 – 100.65 range.

EUR/USD Moves Away From Multi-Week Highs EUR/USD 100826 4h Chart EUR/USD moved lower as traders took some profits off the table near multi-week highs. There are no important economic reports scheduled to be released in the EU today, so traders will stay focused on general market sentiment.

The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. If EUR/USD declines below the 1.1510 level, it will head towards the next support at 1.1435 – 1.1450. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

GBP/USD Tests New Highs GBP/USD 100826 4h Chart GBP/USD climbed above the 1.3500 level as traders ignored rising oil prices and bet on dovish Fed.

In case GBP/USD stays above 1.3500, it will head towards the nearest resistance level at 1.3550 – 1.3565. A move above the 1.3565 level will push GBP/USD towards the 1.3650 level.

On the support side, a move below the support at 1.3465 – 1.3480 will open the way to the test of the 50 MA at 1.3444. If GBP/USD manages to settle below the 50 MA, it will head towards the next support level at 1.3335 – 1.3350.

USD/CAD Attempts To Settle Below The Support At 1.3920 – 1.3935

USD/CAD 100826 4h Chart USD/CAD pulls back as traders focus on rising precious metals markets. Gold climbed above the $4350 level, while silver settled above $65.00. Other commodity-related currencies are mostly flat in today’s trading session.

Currently, USD/CAD is trying to settle below the support at 1.3920 – 1.3935. If USD/CAD manages to settle below the 1.3920 level, it will head towards the next support level, which is located in the 1.3825 – 1.3840 range.

USD/JPY Moves Higher As Treasury Yields Rise USD/JPY 100826 4h Chart USD/JPY gains ground as the yen continues to lose ground after interventions. Rising Treasury yields provide additional support to USD/JPY. The yield of 2-year Treasuries climbed above the 4.23% level, while the yield of 10-year Treasuries settled near 4.70%.

At this point, forex traders are not worried that BoJ would intervene again to support the yen. Fundamentally, the yen remains weak due to the difference in interest rates in U.S. and Japan.

If USD/JPY settles above the 50 MA at 158.84, it will head towards the resistance level at 159.50 – 160.00. A move above the 160.00 level will push USD/JPY towards the 162.00 level.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

USD/CAD stabilizes at 1.3948 near the 0.382 Fibonacci retracement at 1.3985, with 1.3950 as support and 1.4000 above. Source: TradingView The U.S. dollar is rising a bit against the Canadian dollar after forming a bit of a double bottom. This is a market that has been rounding from a huge move to the upside. We are currently at the 38.2% Fibonacci retracement level, followed by the 50% retracement level, trying to find some type of floor. Ultimately, this is a market that is an interest rate differential play as well. There are some traders out there that are off to the races when it comes to the idea of the U.S. employment situation dropping, but one errant report really doesn’t make a trend.

Furthermore, unfortunately, the Canadian jobs numbers, although really hot this month, are notorious for being horribly wrong and corrected the next time. So, we can’t read too much into one report, and I think we’re starting to see people question that. The interest rate differential pays traders to hold the U.S. dollar versus the Canadian dollar. I think eventually that comes back into play, especially with a 55% chance of the Federal Reserve raising rates in September.

Key Points:EUR/USD climbed above the 1.1550 level as traders focused on U.S. job market data. USD/CAD moved lower as precious metals markets rallied. USD/JPY pulled back amid falling Treasury yields.

U.S. Dollar Is Under Pressure After Disappointing NFP Report

DXY 070826 4h Chart U.S. Dollar Index is losing ground as traders focus on the surprising Non Farm Payrolls report. The report indicated that U.S. economy lost -23,000 jobs in July, compared to analyst forecast of +80,000.

Unemployment Rate declined from 4.2% in June to 4.1% in July as Participation Rate decreased from 61.5% to 61.4%.

The weak Non Farm Payrolls report put significant pressure on the American currency as traders reduced bets on hawkish Fed. FedWatch Tool indicates that there is a 58.1% chance that Fed will keep rates unchanged at the next meeting in September.

The nearest support level for U.S. Dollar Index is located in the 99.25 – 99.40 range. In case U.S. Dollar Index manages to settle below the 99.25 level, it will head towards the next support level at 98.60 – 98.75.

EUR/USD Tests New Highs As Traders Focus On NFP Data EUR/USD 070826 4h Chart EUR/USD gained ground as traders reacted to U.S. job market data. In the EU, traders focused on Germany’s Exports report. The report indicated that Exports increased by +0.9% month-over-month in June, compared to analyst consensus of +0.2%.

In case EUR/USD settles above the 1.1550 level, it will head towards the resistance level at 1.1600 – 1.1615. A move above the 1.1615 level will push EUR/USD towards the next resistance at 1.1685 – 1.1700.

GBP/USD Tests The 1.3500 Level GBP/USD 070826 4h Chart GBP/USD moved higher as traders focused on dovish changes in Fed policy outlook and reacted to Lloyds House Price Index report from the UK. The report indicated that house prices increased by +0.1% year-over-year in July, compared to analyst consensus of +0.4%.

GBP/USD moved above the resistance at 1.3465 – 1.3480 and is trying to settle above the 1.3500 level. In case this attempt is successful, GBP/USD will head towards the next resistance at 1.3550 – 1.3565. RSI remains in the moderate territory, so there is plenty of room to gain additional momentum in the near term.

USD/CAD Tests Support At 1.3920 – 1.3935

USD/CAD 070826 4h Chart USD/CAD pulled back as traders reacted to the strong rally in precious metals markets. Gold climbed above the $4300 level, while silver settled above $63.00. Other commodity-related currencies are also moving higher in today’s trading session.

Traders also focused on the Unemployment Rate report from Canada. The report showed that Unemployment Rate declined from 6.5% in June to 6.4% in July, compared to analyst consensus of 6.5%.

Currently, USD/CAD is trying to settle below the support level at 1.3920 – 1.3935. If USD/CAD manages to settle below the 1.3920 level, it will head towards the next support level at 1.3825 – 1.3840.

USD/JPY Retreats As Treasury Yields Fall USD/JPY 070826 4h Chart USD/JPY moved lower as traders focused on falling Treasury yields. The yield of 2-year Treasuries declined towards the 4.20% level, while the yield of 10-year Treasuries settled near 4.65%.

If USD/JPY settles below the 157.00 level, it will move towards the support level at 154.50 – 155.00. On the upside, a successful test of the resistance at 157.50 – 158.00 will push USD/JPY towards the next resistance level, which is located in the 159.50 – 160.00 range.

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

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

Editors’ Picks

Why weak payrolls broke the week’s stalemate, and why Hormuz, Saudi warnings and US-China tensions mean the move isn’t a simple green light for risk What’s happening: July nonfarm payrolls unexpectedly fell -23K against expectations for an 85K gain, while May and June were revised down by a combined 103K and wage growth slowed. Markets responded by cutting September Fed hike odds to around 42%, sending the Dollar broadly lower, Gold decisively above $4,300 and Silver toward $65, while USD/JPY reversed back toward 155.Why it matters: This is the catalyst markets had been waiting for all week, but equities responded far more cautiously than the Dollar or precious metals, since outright payroll contraction alongside heavy downward revisions raises real growth concerns, not just rate-cut hopes. Markets may be approaching the point where bad economic news is still good for rates, but not automatically good for risk assets.Also today: Hormuz talks are progressing, but reported Iranian draft terms, barring US and Israeli vessels and threatening restrictions on countries deemed to have harmed Iran, look far more conditional than a genuine reopening. Saudi Arabia signed a new defense pact with Pakistan and Turkey while warning of possible coordinated attacks from Iran-aligned groups, raising the risk that diplomatic progress and military escalation are running on separate tracks at once. The US imposed a new 15% duty on polysilicon imports, extending US-China strategic competition into solar, semiconductor and AI-infrastructure supply chains just as China’s chip exports surged 117% year-over-year. NFP Delivers the Shock Markets Were Waiting For The US jobs report finally gave markets the catalyst they had been waiting for, sending the Dollar sharply lower and precious metals surging as traders scaled back expectations for another Fed rate hike. Nonfarm payrolls unexpectedly fell -23K in July, compared with expectations for an 85K increase, but the headline shock was only part of the story. May payroll growth was revised down from 129K to 63K and June from 57K to just 20K, wiping 103K from previously reported employment gains. Average hourly earnings also slowed from 0.3% to 0.1% month-over-month, adding to evidence that the labor market is losing momentum. The unemployment rate unexpectedly dipped from 4.2% to 4.1%, but the accompanying decline in participation from 61.5% to 61.4% made that improvement less reassuring.

July NFP Breakdown Headline NFP: -23K, against expectations for +85K May payrolls: revised down from 129K to 63K June payrolls: revised down from 57K to 20K (103K wiped from prior reports combined) Average hourly earnings: slowed from 0.3% to 0.1% m/m Unemployment rate: dipped to 4.1% from 4.2%, though participation fell from 61.5% to 61.4% Why the Hawkish Case Just Got Harder Markets responded by quickly cutting the probability of a September Fed hike to around 42%. That represents a significant challenge to the hawkish case put forward by several Fed officials this week. Kashkari argued that the Fed should begin raising rates gradually, while Musalem said policymakers should be prepared to surprise markets rather than allow prevailing pricing to dictate policy. But their argument partly rests on the economy and labor market being resilient enough to absorb additional tightening. Negative payroll growth, substantial downward revisions and softer wages raise that hurdle considerably. Inflation remains too high for the Fed to declare victory, particularly with energy risks unresolved, but the latest employment report strengthens the majority case for waiting rather than tightening pre-emptively.

Dollar Reaction Was Broad, and USD/JPY Is the Story to Watch The Dollar reaction was broad. EUR/USD and AUD/USD broke to fresh highs for the week, while USD/JPY reversed much of its rebound and headed back toward 155. That move is particularly notable after last week’s rare US-Japan intervention. As discussed ahead of payrolls, intervention had created an asymmetric setup: traders chasing USD/JPY toward 160 after strong data would have to contend with renewed intervention risk, while a data-driven fall toward 155 would face no equivalent official deterrent. July NFP delivered precisely that downside scenario.

The Canadian Dollar performed even better after Canada simultaneously reported a 75.1K employment surge against expectations for 17.8K, while unemployment fell from 6.5% to 6.4%. USD/CAD therefore faced pressure from both sides, weak US employment and unexpectedly strong Canadian hiring.

Gold and Silver Break Higher as Fed Hike Risk Fades The reaction in precious metals was immediate. Gold decisively cleared 4,300, a level that had capped its rebound earlier this week, and accelerated above 4,350. Silver simultaneously surged toward $65. Both moves reinforce the case that recent precious-metals rallies are developing into something more substantial than corrective rebounds. Lower Fed hike expectations reduce pressure from real yields and the Dollar, while geopolitical uncertainty provides another layer of support.

Gold’s break is particularly significant because 4,300 had represented the 38.2% retracement of the decline from 4889.24 to 3942.23, near 4303.98. Earlier attempts to clear that area had stalled as Treasury yields and Brent awaited confirmation of progress on reopening the Strait of Hormuz. NFP has now supplied a separate catalyst. If Gold can sustain the breakout, attention should increasingly shift toward medium-term trend line resistance around 4,500.

Key Technical Levels Gold: cleared 4,300 (the 38.2% retracement of the 4889.24-3942.23 decline, near 4303.98) and accelerated above 4,350 Silver: surging toward $65 Next resistance: medium-term trend line around 4,500 Equities Show Restraint: Good for Rates, Not Automatically Good for Risk Equities delivered a more restrained response. Dow futures rose around 170 points, leaving the index within reach of another challenge to the record set earlier this week, but the reaction was nowhere near as forceful as the moves in Dollar or precious metals. That restraint is understandable. Weaker employment reduces the probability of additional Fed tightening, which supports valuations, but outright payroll contraction accompanied by substantial downward revisions also raises questions about underlying growth. Markets may therefore be approaching the point where bad economic news is still good for rates, but no longer automatically good for risk assets.

Hormuz Talks Progress, but the Details Complicate the Optimism That caution is reinforced by increasingly complicated developments in the Middle East. Iran and Oman continue working toward an arrangement defining shipping routes through the Strait of Hormuz, but despite expectations earlier this week that an agreement could arrive quickly, no final deal has yet been announced. The latest reports suggest inbound traffic could travel through Iranian waters while outbound vessels use Omani waters. Yet the reported Iranian draft terms raise questions over how closely any arrangement would resemble a genuine normalization of shipping.

Under the apparent draft proposal, US and Israeli vessels would be barred from using the Strait, while countries deemed to have harmed Iran could face restrictions until compensation is paid. Such conditions would make the proposed arrangement substantially different from an unconditional reopening. It also remains unclear how the temporary framework would evolve into a durable settlement. Markets have spent much of the week pricing falling geopolitical risk through lower oil and stronger equities, but the details now matter more than general expectations of a deal.

Diplomatic Rhetoric Turns More Hostile Diplomatic rhetoric is simultaneously becoming more hostile. Iran’s chief negotiator accused US President Donald Trump of engaging in “theater diplomacy,” highlighting conflicting accounts from Washington and Tehran over bilateral contacts. More importantly, progress over Hormuz is occurring alongside signs that regional military risks may be increasing rather than disappearing.

Saudi Warnings Add a New Escalation Risk Saudi Arabia, Pakistan and Turkey signed a joint defense agreement in Mecca on Friday as Riyadh warned of possible coordinated attacks from Iran-aligned groups. A senior Saudi official said intelligence from Saudi Arabia, the US and other regional countries pointed to potential attacks from Iraqi militias to the north and Houthis in Yemen to the south, potentially targeting civilian and economic infrastructure including energy facilities, ports and airports.

Particularly important was the Saudi official’s suggestion that possible attacks could reflect “a power struggle within Iran itself” and might be intended to derail negotiations that had otherwise been “heading in the right direction.” If that assessment proves accurate, it complicates the assumption that diplomatic progress automatically translates into lower geopolitical risk. Negotiations over Hormuz could advance at the government level while other actors simultaneously attempt to undermine them through military escalation.

Two Middle East Stories on Separate Tracks That creates two Middle East stories moving on separate tracks. One is diplomatic: Iran and Oman are trying to establish a framework that could restore more normal shipping through the Strait. The other is military: Gulf states are preparing for the possibility that regional attacks could intensify even while those negotiations continue. Brent’s recent inability to extend decisively below $78 and subsequent rebound above $83 increasingly looks consistent with that uncertainty.

US-China Competition Intensifies on Another Front Geopolitics is also moving beyond the Middle East. The Trump administration imposed a new 15% duty on polysilicon products on Thursday and introduced minimum prices for some related imports, explicitly framing the measure as an effort to protect US solar and semiconductor supply chains from Chinese competition. Polysilicon sits at the intersection of several strategic priorities, solar power, semiconductors, AI infrastructure and energy security, making the move another example of economic policy becoming inseparable from great-power competition.

The timing is notable given China’s strong July trade figures. Chinese exports rose 23.9% year-over-year, beating expectations, while chip exports surged 117% as global AI infrastructure demand continued to power high-tech manufacturing. Washington’s latest action therefore comes precisely as advanced technology becomes an increasingly important source of Chinese export growth. That suggests trade tensions are shifting further toward sectors viewed as strategically important rather than simply those generating large bilateral deficits.

What This Means Heading Into the Weekend For markets, the immediate driver remains the US employment shock. The Dollar has broken lower, Gold has cleared $4,300, Silver is approaching $65 and September Fed hike expectations have retreated sharply. But heading into the weekend, weaker payrolls cannot be treated as a straightforward invitation to extend risk-on positions. The Hormuz agreement remains unfinished, regional military threats are increasing, and US-China strategic competition is intensifying. NFP has broken this week’s market stalemate; whether those moves survive next week may depend increasingly on what happens outside the economic calendar.

Related Coverage Jobs & Trade Data Deep Dives Read the full NFP breakdown showing how deep the downward revisions cut into prior job gains: US Non-Farm Payrolls Contract -23k. Revisions Expose Deeper Labor Market Weakness. See the full Canada jobs report, including why wage growth cooling to 2.8% still reduces pressure for more BoC support: Canada Jobs Surge 75K as Unemployment Falls to Two-Year Low. Read why China’s export beat still raises sustainability questions once tariff front-loading fades: China Exports Rise 23.9% YoY as High-Tech Demand Defies Tariffs. Frequently Asked Questions Q: Why did equities react more cautiously than the Dollar and Gold to the NFP miss? A: Weaker employment reduces the probability of additional Fed tightening, which normally supports valuations. But outright payroll contraction, combined with substantial downward revisions to May and June, also raises questions about underlying growth. Markets may be approaching the point where bad economic news is still good for rates but no longer automatically good for risk assets, which is why Dow futures rose a modest 170 points while the Dollar and precious metals moved far more forcefully.

Q: Why does USD/JPY’s move back toward 155 matter after last week’s intervention? A: Last week’s coordinated US-Japan intervention created an asymmetric setup: traders pushing USD/JPY back toward 160 on strong data would face renewed intervention risk, while a data-driven fall toward 155 would face no equivalent official deterrent. July’s NFP delivered exactly that downside scenario, reversing much of USD/JPY’s prior rebound with no offsetting pushback expected from Japanese authorities.

Q: Does progress on Hormuz shipping talks mean geopolitical risk is actually falling? A: Not necessarily. Reported draft terms would bar US and Israeli vessels from the Strait and threaten restrictions on countries deemed to have harmed Iran until compensation is paid, conditions that make any arrangement substantially different from an unconditional reopening. At the same time, Saudi Arabia has warned of possible coordinated attacks from Iran-aligned groups, which a Saudi official suggested could reflect a power struggle within Iran aimed at derailing the negotiations. That means diplomatic progress and military escalation risk could be running on separate tracks simultaneously.

Key Takeaways NFP delivered a genuine shock: Headline payrolls fell -23K against expectations for +85K, while May and June were revised down by a combined 103K and wage growth slowed to 0.1% m/m. September Fed hike odds were cut to around 42%: The report significantly raises the hurdle for the hawkish case made by Kashkari and Musalem this week, since it rested on the economy being resilient enough to absorb more tightening. Dollar, Gold and Silver moved far more forcefully than equities: Gold cleared 4,300 and accelerated above 4,350, and Silver pushed toward $65, but Dow futures rose a more modest 170 points, since weak payrolls raise growth questions even as they support the case for a Fed pause. USD/JPY’s reversal toward 155 fits last week’s intervention asymmetry: A data-driven move lower carries no equivalent official deterrent to the one traders would face pushing the pair back toward 160. Hormuz progress comes with complicating conditions: Reported draft terms barring US and Israeli vessels and threatening restrictions on other countries look far more conditional than a genuine reopening, while Saudi Arabia’s new defense pact and attack warnings suggest military risk could be rising even as talks continue. US-China tensions are extending into strategic technology supply chains: The new US polysilicon tariff lands just as China’s chip exports surged 117% year-over-year, pointing to trade friction shifting toward strategically important sectors. What to Watch Next Whether this week’s moves hold into next week may depend less on the economic calendar than on developments outside it: whether the Hormuz framework firms into something closer to an unconditional reopening, whether Saudi Arabia’s escalation warnings materialize, and whether US-China tensions extend further into strategic technology sectors.

ActionForex

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Key Points:EUR/USD pulled back as traders focused on the disappointing Euro Area Retail Sales report.USD/CAD gained ground amid falling demand for commodity-related currencies. USD/JPY climbed towards the 158.50 level amid rising Treasury yields.

U.S. Dollar Gains Ground As Oil Prices Rally 4%

DXY 060826 4h Chart U.S. Dollar Index is moving higher as traders react to the Initial Jobless Claims report. The report indicated that 199,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 202,000.

Traders also react to the strong rally in the oil markets. Oil prices are up by +4% as Houthis attacked Saudi-backed forces in Yemen. Rising oil prices raised demand for safe-haven assets, which was bullish for the American currency.

Currently, U.S. Dollar Index is trying to settle above the resistance level at 99.85 – 100.00. In case this attempt is successful, U.S. Dollar Index will move towards the 50 MA at 100.35. A move above the 50 MA will push U.S. Dollar Index towards the resistance at 100.50 – 100.65.

EUR/USD Retreats As Euro Area Retail Sales Miss Estimates EUR/USD 060826 4h Chart EUR/USD pulled back as traders focused on the disappointing Euro Area Retail Sales report. The report indicated that Euro Area Retail Sales decreased by -0.3% month-over-month in June, compared to analyst forecast of +0.1%.

Traders also had a chance to take a look at the Factory Orders report from Germany. The report showed that Factory Orders increased by +3.1%, compared to analyst consensus of +0.3%.

EUR/USD attempts to settle below the support level at 1.1510 – 1.1525. If EUR/USD manages to settle below the 1.1510 level, it will move towards the 50 MA at 1.1479. A move below the 50 MA will push EUR/USD towards the support level at 1.1420 – 1.1435.

GBP/USD Remains Stuck Near Resistance At 1.3465 – 1.3480 GBP/USD 060826 4h Chart GBP/USD continues its attempts to settle above the resistance level at 1.3465 – 1.3480 despite rising oil prices. In the UK, traders focused on the Construction PMI report. The report indicated that UK Construction PMI improved from 38.4 in June to 44.7 in July, compared to analyst forecast of 40.

A successful test of the resistance at 1.3465 – 1.3480 will open the way to the test of the next resistance level at 1.3550 – 1.3565. RSI is in the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

USD/CAD Attempts To Rebound

USD/CAD 060826 4h Chart USD/CAD gains some ground as traders focus on the pullback in precious metals markets. Other commodity-related currencies are losing ground in today’s trading session.

If USD/CAD settles above the 1.4025 level, it will head towards the 50 MA at 1.4055. In case USD/CAD climbs above the 50 MA, it will move towards the resistance level at 1.4125 – 1.4140.

USD/JPY Moves Higher As Treasury Yields Rise USD/JPY 060826 4h Chart USD/JPY gained ground as traders focused on rising Treasury yields. The yield of 2-year Treasuries settled near the 4.25% level, while the yield of 10-year Treasuries climbed above 4.67%. Rising Treasury yields are bullish for USD/JPY due to the ultra-dovish policy of the BoJ.

From the technical point of view, USD/JPY attempts to settle above the resistance level at 157.50 – 158.00. If USD/JPY settles above the 158.00 level, it will head towards the next resistance level at 159.50 – 160.00. It remains to be seen whether BoJ is ready to provide additional support to the Japanese yen in the near term.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

HomeTechnical AnalysisIntraday Analysis 06.08.2026 USD begins retracing

USDCAD hits major resistance

The greenback fell further as traders continue to digest the ongoing peace negotiations in the Middle East.

The pair progressed lower, breaking through the 1.4050 level, ensuring that the bear run remained intact. A slide below the immediate support at 1.4000 could indicate more sellers trading the pair. 1.4080 is a critical top to break to develop a sharp turnaround, and move towards the recent top at 1.4120. NZDUSD looks for reprieve

The US dollar is attempting to gain some traction against the Kiwi as a choppy consolidation continues.

The pair previously met stiff selling pressure at the psychological level of 0.5900 as bulls closed some profits. However, more buyers could join the game as the RSI’s pressured condition could lead to a brief pullback. 0.5840 is an important support, and its breach could begin a decline in the medium-term to test 0.5780. UK 100(FTSE) continues chopping grind

The UK 100(FTSE), along with most global equities, found relief in sustained signs of peace deals.

The index remains heightened as energy prices are expected to fall further. A combination of short-covering and buying-the-dips has helped the price recover some lost ground. The first real test comes at the recent false spike towards 11000, and a bullish breakout would attract those who are still indecisive. Otherwise, the index could fall back towards 10840 and lower.
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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.

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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).

Over the last few sessions, the USD/CAD has seen a slight appreciation of nearly 0.3% in favor of the US dollar. However, beyond this mild bias, the broader chart picture reflects a prolonged consolidation. Central bank dynamics, bond market behavior, and geopolitical caution in the Middle East are keeping volatility in check. As long as these catalysts remain in play, sideways trading could continue to dominate the pair's short-term swings.

How Are Central Bank Dynamics Holding Up? A key factor here is the interest rate differential. While the benchmark rate in the United States holds steady at 3.75%, Canada's remains stable at 2.25%. This gap has been a major driver behind the Canadian dollar's depreciation over the past few months, simply because US dollar-denominated assets remain much more attractive to investors.

Meanwhile, the Bank of Canada isn't signaling any surprise pivots. Following its latest decision, the central bank acknowledged a slight economic improvement that rules out any drastic shifts in monetary policy. In fact, the market is pricing in an 80% probability that the rate will stay put at 2.25% during the September meeting, reflecting expectations of a neutral stance with no major short-term adjustments.

In the United States, while the odds of aggressive hikes have also cooled off, the picture looks a bit different. According to CMEGROUP, there is still a 56.9% chance that the Federal Reserve will opt for a rate hike in September, pushing the benchmark rate toward the 4.00% zone. This keeps the prospect alive that the US central bank could turn out to be more hawkish than its Canadian counterpart in the coming months.

Source: CMEGROUP

Given the caution from both institutions, bond market dynamics in the two countries have largely converged. Over the last few sessions, the 10-year bond yield in the United States has dropped from the 4.7% area, while Canada is seeing a similar slide from its peak of 3.66%. Moving in the same direction, neither market offers the kind of standout appeal that would trigger a massive capital flow into either currency. Still, the yield spread continues to favor the United States, which keeps a lid on any sustained rally for the Canadian dollar.

Source: TradingEconomics

All in all, the cross remains stuck in a cautious holding pattern. The lack of bond market catalysts and the conservative tone from central banks suggest that consolidation could continue to dominate the USD/CAD. That said, if the Federal Reserve adopts a more hawkish tone, the rate differential would widen, making it harder for the Canadian dollar to recover and potentially reigniting buying pressure on the pair in the coming weeks.

Is the Middle East Becoming Relevant Again?

The geopolitical backdrop is also playing a major role. The US government, under President Trump, decided to pause strikes and resume negotiations in the Middle East, with countries like Qatar announcing progress in the talks. This de-escalation has pushed WTI crude back below the $80 mark, easing the global risk premium.

Rather than giving the USD/CAD a clear direction, this event has actually deepened the sideways trend. On one hand, lower risk aversion cuts down the demand for the US dollar as a safe haven, which would theoretically favor the Canadian dollar. On the flip side, cheaper oil hurts Canada, where crude exports make up nearly 20% of its trade balance. This drop weighs on the country's economic outlook for 2026 and dampens confidence in its currency.

Bottom line, geopolitical tensions are breeding more caution than aggressive moves. As long as negotiations keep rolling without any major hiccups, indecision could keep setting the pace for the USD/CAD, at least until a heavier macroeconomic data release manages to grab the market's attention.

USD/CAD Technical Outlook

Source: StoneX, Tradingview

Lack of clear direction becoming evident: Despite recent recovery attempts, the broader USD/CAD picture remains trapped in indecision. Price action is failing to define a clear trend, paving the way for a potential sideways range. Until a stronger directional push emerges, this consolidation could remain the dominant theme on the chart.
  RSI: The indicator is hovering near the neutral 50 level and showing a noticeable flattening. This reflects a balance between buying and selling momentum over the last few sessions. If this behavior persists, it could continue to highlight a potential phase of sideways trading or relevant neutrality on the chart.
  MACD: The histogram sits right near the neutral 0 line, suggesting a balance in short-term moving average momentum. This technical reading reinforces the expectation that indecision could remain a key feature in the upcoming trading sessions.
  Key Levels:

1.42132 (Key Resistance): The 2026 high zone and the chart's main bullish barrier. A sustained move toward this level could reignite the bullish bias and open the door to reclaiming the uptrend line that dominated a few weeks back.
  1.41266 (Nearby Barrier): Aligns with recent highs and acts as a key retracement zone. If the price fails to break cleanly away from this level, it could exacerbate the sideways chop and confirm a short-term consolidation range.
  1.39926 (Crucial Support): A major support level matching recent lows below the 50-period moving average. A breakdown below this point could trigger a sharper bearish phase and activate a short-term downtrend line.
  Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

The US dollar continues to fight back against several currencies, as the latest PMI numbers were hotter than expected.

USD/JPY Technical Analysis

USDJPY trades around 157.493, pulling back sharply toward the 155.000 level after slipping below its 50-day EMA. Source: TradingView. The US dollar has rallied a bit against the Japanese yen as we are trying to break above the 200-day EMA. The market breaking above the 200-day EMA on a close, I think, would be a very bullish turn of events. The hammer from the previous session on Monday does suggest that there is real support here, especially near the 155-yen level, but if we were to break down below there, it could really open the floodgates. Keep in mind that the Bank of Japan and the Federal Reserve intervened, that’s what caused this chaos, but the interest rate differential will continue to entice carry traders to hold the dollar against the yen, as they get paid at the end of the day.

USD/CAD Technical Analysis USDCAD trades around 1.40630, holding above the 1.40000 level and both its 50-day and 200-day EMAs. Source: TradingView. The US dollar has rallied against the Canadian dollar during the session as we are in the midst of forming a double bottom. Ultimately, this is a market that continues to see a lot of noisy behavior, but a push towards the upside, maybe towards 1.4150 again, could be possible. The 50-day EMA offering support comes into the picture as well, and the 38.2% Fibonacci retracement level has been tested twice and found supportive. This is an area that a lot of people seem to be watching.

USD/CHF Technical Analysis

USDCHF trades around 0.80920, easing from the 0.81500 level while holding above both its 50-day and 200-day EMAs. Source: TradingView. The US dollar slightly negative against the Swiss franc, but only barely so, and it looks like it’s in the midst of forming some type of double bottom as well. In fact, it looks very much like the US dollar Canadian dollar pair. And with that, this is a market that seems to be attracted to the 0.8150 level. The Swiss National Bank is very interested in keeping the Swiss franc weak, therefore that helps the carry traders here in this market.

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Key Points:EUR/USD pulled back as Germany's Retail Sales missed analyst estimates. USD/CAD gained ground amid falling demand for commodity-related currencies. USD/JPY moved away from session lows as traders reacted to recent interventions.

U.S. Dollar Moves Higher As Traders React To ISM Manufacturing PMI Report

DXY 030826 4h Chart U.S. Dollar Index gains ground as traders focus on the better-than-expected ISM Manufacturing PMI report. The report indicated that ISM Manufacturing PMI increased from 53.3 in June to 55.6 in July, compared to analyst forecast of 54. ISM Manufacturing Employment grew from 49.7 to 52.8, compared to analyst consensus of 49.8. Numbers above 50 show expansion.

Currently, U.S. Dollar Index is trying to settle above the resistance level at 99.85 – 100.00. In case this attempt is successful, U.S. Dollar Index will move towards the next resistance level, which is located in the 100.50 – 100.65 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

EUR/USD Pulls Back As Germany’s Retail Sales Miss Estimates

EUR/USD 030826 4h Chart EUR/USD is losing ground as traders react to the disappointing Retail Sales report from Germany. The report showed that Retail Sales decreased by -1.1% month-over-month in June, compared to analyst forecast of -0.5%.

From the technical point of view, EUR/USD made an attempt to settle above the resistance level at 1.1510 – 1.1525 but failed to develop sufficient upside momentum and pulled back towards the 1.1500 level. In case EUR/USD manages to settle below 1.1500, it will head towards the next support, which is located in the 1.1420 – 1.1435 range.

GBP/USD Moves Lower Amid Profit-Taking GBP/USD 030826 4h Chart GBP/USD pulls back as traders take some profits off the table after the strong rally and react to ISM Manufacturing PMI report from the U.S.

A move below the 1.3400 level will open the way to the test of the support level at 1.3335 – 1.3350. On the upside, GBP/USD needs to settle above the resistance level at 1.3465 – 1.3480 to have a chance to gain upside momentum in the near term. If GBP/USD climbs above 1.3480, it will head towards the resistance level at 1.3550 – 1.3565.

USD/CAD 030826 4h Chart USD/CAD is moving higher as traders focus on the pullback in precious metals markets. Other commodity-related currencies are also losing ground in today’s trading session.

USD/CAD climbed above the support level at 1.4010 – 1.4025 and is trying to settle above the 1.4050 level. In case this attempt is successful, USD/CAD will move towards the 50 MA at 1.4070. If USD/CAD manages to settle above the 50 MA, it will head towards the resistance level at 1.4125 – 1.4140.

USD/JPY Moves Away From Session Lows

USD/JPY 030826 4h Chart USD/JPY attempts to rebound after interventions from Japan and U.S. It is not clear how mcuh U.S. spent to provide support to the yen, but Treasury Secretary Scott Bessent said that the country would not hesitate to get back into the market.

U.S. officials decided to intervene as Japan could be forced to sell U.S. Treasuries to raise money for currency interventions. The yield of 30-year Treasuries is at multi-decade highs, and additional pressure from Japan’s sales could trigger a major sell-off in U.S. bond markets.

If USD/JPY climbs above the 157.00 level, it will move towards the resistance level at 157.50 – 158.00. A successful test of this level will open the way to the test of the next resistance at 159.50 – 160.00.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

Editors’ Picks

Analysts at Scotiabank expect renewed pressure on USD/CAD after its July decline, with a break below 1.4000 opening the way towards 1.3981 and the upper 1.39s. The US Dollar to Canadian Dollar exchange rate ended July near 1.4015 after falling 1.36% over the month.

USD/CAD opened July around 1.4208 and reached a monthly high close to 1.4239 before retreating to a low near 1.3992. The pair remains 2.1% higher for 2026, having traded between approximately 1.3482 and 1.4248 since the start of the year.

Scotiabank says the Canadian Dollar has benefited from the broader deterioration in US Dollar sentiment following the Federal Reserve meeting, although progress through the 1.4000 area has so far proved difficult.

Short-term US-Canada interest-rate spreads narrowed modestly after the FOMC decision, providing some support for the Loonie. The bank cautions, however, that the remaining yield gap is still wide enough to restrain a more substantial Canadian Dollar advance.

The latest weekly close may be more significant. Scotiabank believes the move suggests that the rebound in USD/CAD from its mid-July low is beginning to reverse.

The pair has moved decisively below its 40-day moving average, which Scotiabank places at 1.4104. The bank now expects minor recoveries towards 1.4100 to encounter firm resistance.

USD/CAD tested the 1.4000 region during the final sessions of July but failed to reach the 38.2% retracement of the May-June rally at 1.3981.

According to Scotiabank, “a low close on the week suggests the USD rebound from mid-July is reversing and more pressure is likely on the upper 1.39s in the days ahead.”

The one-month chart supports the softer technical picture. USD/CAD has fallen below its declining 20-day moving average and closed close to the bottom of July’s range.

The broader year-to-date chart is less conclusive. The pair remains above its rising 50-day average and is still well above the January low, reflecting the scale of the Dollar rally during May and June.

Canada’s domestic data provide the next potential catalyst. May industry-level GDP is expected to rise 0.2% on the month and 1.4% from a year earlier. A stronger reading could help the Canadian Dollar force a clearer break below 1.4000.

Scotiabank’s short-term assessment is bearish, with 1.3981 marking the immediate downside target and the upper 1.39s likely to come under further pressure. Resistance around 1.4100 should now limit any near-term USD recovery.

Canadian Dollar Prices: This Week  USDEURGBPJPYCADAUDNZDCHFUSD -1.37%-1.17%-3.91%-0.57%-0.61%-1.66%-1.35%EUR+1.39% +0.21%-2.57%+0.82%+0.78%-0.29%+0.03%GBP+1.18%-0.21% -2.77%+0.61%+0.57%-0.50%-0.18%JPY+4.07%+2.64%+2.85% +3.47%+3.43%+2.34%+2.66%CAD+0.57%-0.81%-0.60%-3.36% -0.04%-1.10%-0.78%AUD+0.61%-0.77%-0.56%-3.32%+0.04% -1.06%-0.74%NZD+1.69%+0.29%+0.50%-2.28%+1.11%+1.07% +0.32%CHF+1.37%-0.03%+0.18%-2.59%+0.79%+0.75%-0.32%  The FX heat map compares how Canadian Dollar (CAD) has performed against a basket of major currencies over the past week. The largest move was against the Japanese Yen, where Canadian Dollar recorded its sharpest decline. Data comparing prices today (01/08/2026 12:20 UTC) and daily close on 25/07/2026.

To read the table, choose the base currency from the left-hand column and then move across to the quote currency along the top row. For example, the GBP row and USD column shows the weekly percentage move in GBP/USD.

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

USDCAD turned lower this month and has now broken below not only one but two important 4H trendline supports. The first break came below the lower trendline of the bullish channel, while the second one was a potential break below the base channel support. This shift in structure puts the pair in a more bearish position and opens the door for a higher-degree three-wave decline.

USDCAD 4H ChartLooking at the latest price action, the new weekly low has completed a five-wave move lower, which is typically a bearish pattern and suggests that sellers remain in control. However, some support could appear around the 1.3967–1.4000 area, where we may see a corrective recovery before the downtrend resumes.

Ideally, we would like to see a bounce back toward the 1.4120–1.4160 resistance zone, where the pair could complete a corrective ABC recovery before another leg lower unfolds. As long as the structure remains bearish, rallies are likely to be viewed as corrective rather than the start of a new bullish trend.

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The USD/CAD pair seesaws between tepid gains/minor losses through the early European session on Friday, consolidating its recent losses to the lowest level since June 17, touched the previous day. However, a combination of supporting factors assists spot prices in holding above the 1.4000 psychological mark.

The US Dollar (USD) regains some positive traction as inflation risks stemming from volatile energy prices keep inflation risks and the US Federal Reserve (Fed) rate hike bets in play. Furthermore, retreating crude oil prices undermine the commodity-linked Loonie and act as a tailwind for the USD/CAD pair. The lack of any meaningful buyers, however, warrants some caution before confirming that a three-day-old downtrend has run its course.

From a technical perspective, this week's breakdown below the 200-period Simple Moving Average (SMA) on the 4-hour chart was seen as a key trigger for bearish traders. Adding to this, the Moving Average Convergence Divergence (MACD) sits below zero with the line in negative territory, while the Relative Strength Index (RSI) hovers near 37. Momentum indicators hint that downside momentum remains dominant despite the proximity of initial support.

However, it will be prudent to wait for some follow-through selling and acceptance below the 1.4000 mark before positioning for deeper losses. The USD/CAD pair might then weaken to the 38.2% Fibo. retracement around 1.3979, which is followed by deeper retracement levels at 1.3897 and 1.3814, where the 50.0% and 61.8% Fibo levels could slow further losses.

On the topside, any recovery would first need to overcome resistance at the 23.6% retracement near 1.4082, with the 200-period SMA at 1.4130 capping the broader upside. Failure to clear the said hurdle will reinforce the prevailing bearish structure while the USD/CAD pair remains below it.

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

USD/CAD 4-hour chart

Canadian Dollar Price This week The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies this week. Canadian Dollar was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD-1.00%-0.81%-1.96%-0.48%-0.39%-1.13%-1.03%EUR1.00%0.17%-0.98%0.53%0.62%-0.13%-0.04%GBP0.81%-0.17%-1.29%0.35%0.44%-0.30%-0.21%JPY1.96%0.98%1.29%1.54%1.64%0.88%0.89%CAD0.48%-0.53%-0.35%-1.54%0.06%-0.65%-0.56%AUD0.39%-0.62%-0.44%-1.64%-0.06%-0.74%-0.65%NZD1.13%0.13%0.30%-0.88%0.65%0.74%0.09%CHF1.03%0.04%0.21%-0.89%0.56%0.65%-0.09% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the 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).

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

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

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

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

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

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

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

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

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

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

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

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

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

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Forex Forecasts – Fed Decision Threatens Volatility Across USD Pairs10-Year Yield Bounces at 4.60% – Will Geopolitics Push Rates Higher?US Dollar Price Forecast: Fed Decision Day Puts DXY, EUR/USD and GBP/USD in FocusAbout the Author

Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

The US dollar continues to hold the upper hand against most major currencies ahead of the outcome of the latest Federal Reserve meeting. While the base-case scenario remains for interest rates to stay unchanged, markets are also pricing in the possibility of a rate hike. The Fed’s decision, together with its comments on inflation, economic conditions and the future path of monetary policy, could determine the direction of the US dollar over the coming weeks.

Another factor supporting the dollar is the ongoing geopolitical uncertainty in the Middle East. Despite the temporary suspension of US strikes on Iran and renewed diplomatic efforts, the risk of further military escalation remains, prompting investors to remain cautious ahead of this week’s key events. Geopolitical uncertainty continues to underpin demand for the US dollar as a safe-haven asset. At the same time, USD/JPY’s approach towards multi-year highs has increased expectations of fresh warnings from Japanese authorities and raised the risk of currency intervention. For USD/CAD, oil prices remain another important driver: weaker crude prices continue to limit support for the Canadian dollar and help preserve the pair’s bullish potential.

USD/JPY USD/JPY tested another multi-year high near 164.00 last week. Following the strong rally, the pair has entered a modest pullback. However, if the Federal Reserve delivers a more hawkish outcome or maintains its hawkish tone, the pair could extend its advance towards 165.00–165.50. A decisive move below 163.30 could trigger a deeper correction towards the 162.00–162.60 support area.

Key events for USD/JPY:

Today at 21:00 (GMT+3): US Federal Reserve interest rate decision; Today at 21:30 (GMT+3): Federal Open Market Committee (FOMC) press conference; Tomorrow at 15:30 (GMT+3): US Core Personal Consumption Expenditures (PCE) Price Index.

USD/CAD USD/CAD’s recovery following the formation of a bullish engulfing pattern has stalled near resistance at 1.4130. The pair is currently consolidating within the 1.4060–1.4130 range. A decisive break above the upper boundary of this range could pave the way for further gains towards 1.4160–1.4200. Conversely, a move below 1.4060 could lead to a retest of the recent low near 1.4000.

Key events for USD/CAD:

Today at 17:30 (GMT+3): US crude oil inventories; Today at 20:30 (GMT+3): Bank of Canada Summary of Deliberations; Tomorrow at 15:30 (GMT+3): US GDP data.

Overall, the near-term direction of both USD/JPY and USD/CAD will depend primarily on the Federal Reserve’s decision and its guidance on the future path of interest rates. A more hawkish stance could support a breakout above nearby resistance levels and reinforce the US dollar’s strength. Conversely, a more dovish message could trigger a correction in the greenback, particularly against the Japanese yen, where the proximity of multi-year highs increases the likelihood of renewed warnings from Japanese officials. For USD/CAD, oil price movements and the Bank of Canada’s Summary of Deliberations will remain important additional drivers.

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U.S. Dollar Retreats As CB Consumer Confidence Drops

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

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

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

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

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

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

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

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

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

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

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

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

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

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The 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

Despite the Canadian dollar’s recovery attempts in previous weeks, a renewed loss of strength against the U.S. dollar is becoming evident. This is reflected in USD/CAD, which has gained more than 0.2% over the last 2 trading sessions, including the close of last week and the first session of this week.

For now, buying pressure remains stable, in a context where the behavior of U.S. bonds and expectations around the Federal Reserve continue to limit a consistent recovery in the CAD. This is also being reinforced by uncertainty around possible trade tariffs on Canada, a factor that could remain relevant for the pair over the next few trading sessions.

Is the Federal Reserve still relevant? When analyzing USD/CAD expectations, it is important to consider the central bank dynamic in both the United States and Canada. On one hand, the Bank of Canada maintains an outlook of unchanged rates near 2.25%. On the other hand, the United States continues to hold a higher reference rate at 3.75%.

What is relevant is that the Federal Reserve’s interest rate decision is expected this week, and market probabilities have started to gain importance. The event could reinforce expectations of a more aggressive monetary policy stance in the United States and widen the rate differential with Canada, favoring the relative appeal of USD-denominated investments.

For this week’s decision, the market assigns a probability close to 62.00% that there will be no change in interest rates. However, this probability was close to 83% one week ago, while the probability of a possible hike at the July 29 decision now stands near 38%.

In addition, for the September 16 meeting, the probability remains above 50% that the United States could raise interest rates toward a new area close to 4.00%.

Source: CMEGROUP

Source: CMEGROUP

With this in mind, and unlike the more neutral outlook from the Bank of Canada, the market is starting to consider a potentially more aggressive Federal Reserve over the coming months. This possibility could be confirmed by this week’s decision and continue to support the relative appeal of USD-denominated assets.

This scenario also helps sustain strength in the U.S. 10-year Treasury market. Now, these securities maintain a yield near the upper 4.6% area, around 2026 highs, representing a robust return for one of the safest markets in the world.

Source: TradingEconomics

Therefore, the situation remains complicated for the Canadian dollar. If the Bank of Canada maintains a neutral stance and the market continues to anticipate a more aggressive Fed, USD-denominated investments could preserve a relative advantage. This would make a clearer recovery in the CAD more difficult and could continue to support buying pressure in USD/CAD over the next few sessions.

Does the tariff threat remain in place? So far, the threat of a 50% tariff on Canadian goods imposed by the United States last week remains relevant. The latest update is that Canada has not responded immediately with retaliatory measures, as Mark Carney announced that the country is intensifying negotiations with the United States before the tariffs come into effect.

However, no major progress has been seen yet that would reduce this threat in the short term. Trade uncertainty remains elevated, especially because the goods directly affected are estimated to represent nearly 28 billion Canadian dollars in exports. This could significantly affect Canadian trade and confidence around investments in Canada.

For this reason, the tariff issue could continue to weigh on the Canadian dollar. If no solid negotiations are seen that remove the threat of new tariffs, the appeal of the CAD could remain limited, and USD/CAD could maintain relevant buying pressure over the next few trading sessions.

Technical forecast for USD/CAD

Source: StoneX, Tradingview

Lack of direction begins to become evident: Over the last few weeks, USD/CAD has started to show a phase of neutrality on the chart, with most movements taking place between an upper area near 1.42132 and a lower area around 1.39968. For now, price continues to move within these levels. If it fails to break consistently out of this possible range, indecision could continue to gain relevance in the short term.
  RSI: Now, the RSI remains close to the neutral 50 level and shows important flattening. This reflects a balance between buying and selling impulses over the last few sessions. If this behavior continues, the indicator could continue to highlight a relevant neutral phase over the next few sessions.
  MACD: The MACD also maintains a histogram close to the neutral 0 level, suggesting balance in the strength of short-term moving averages. This reading reinforces the possibility that the indecision phase could remain important for USD/CAD over the next few sessions.
  Key levels:

1.42132 – Relevant resistance: This area corresponds to 2026 highs and remains the main bullish barrier on the chart. Price movements toward this level could reactivate a buying bias and open room for a possible recovery of the bullish trend line that was relevant in previous weeks.
  1.40907 – Near-term barrier: This area corresponds to the most relevant 23.6% Fibonacci level on the chart. Price movements that fail to move consistently away from this level could continue to highlight an important neutral phase and even open room for a more relevant short-term sideways range.
  1.39968 – Crucial support: This relevant bearish barrier corresponds to the 38.2% Fibonacci retracement and also aligns with the 50-period simple moving average. Price movements below this level could reaffirm a more consistent selling bias and open room for a possible short-term bearish trend line over the next few sessions.
  Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

Key Points:EUR/USD gained some ground as traders reacted to PMI reports. GBP/USD moved higher, supported by stronger-than-expected UK Retail Sales. USD/JPY continued its attempts to settle above the resistance level at 163.50 - 164.00.

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U.S. Dollar Moves Lower As Oil Pulls Back

DXY 240726 4h Chart U.S. Dollar Index is losing ground as traders focus on the pullback in the oil markets. WTI oil declined towards the $88.00 level as traders hoped that U.S. and Iran will get back to negotiations. Falling oil prices reduced demand for safe-haven assets, which was bearish for the American currency.

Today, traders also focused on PMI reports. Manufacturing PMI declined from 53.9 in June to 53.8 in July, compared to analyst forecast of 54.3. Services PMI improved from 51.2 to 53.6, compared to analyst consensus of 51.5. Numbers above 50 show expansion.

EUR/USD Gains Gound As Euro Area PMI Reports Exceed Estimates

EUR/USD 240726 4h Chart EUR/USD attempts to rebound as traders focus on better-than-expected PMI data from the EU. Euro Area Manufacturing PMI increased from 51.4 in June to 52.0 in July, compared to analyst forecast of 51.5. Euro Area Services PMI improved from 49.4 to 51.6, compared to analyst consensus of 49.8.

The nearest support level for EUR/USD is located in the 1.1350 – 1.1365 range. In case EUR/USD manages to settle below the 1.1350 level, it will head towards the next support level at 1.1270 – 1.1285.

GBP/USD Gains Ground As UK Retail Sales Beat Estimates GBP/USD 240726 4h Chart GBP/USD is moving higher as UK Manufacturing PMI and UK Services PMI exceeded analyst estimates. Falling oil prices provided additional support to the British pound.  Better-than-expected Retail Sales report served as an additional positive catalyst for GBP/USD. The report indicated that Retail Sales increased by +1% month-over-month in June.

Currently, GBP/USD is trying to settle back above the resistance level at 1.3335 – 1.3350. In case GBP/USD manages to settle above the 1.3335 level, it will head towards the 50 MA at 1.3414. A move above the 50 MA will open the way to the test of the resistance level at 1.3450 – 1.3465. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Is Mostly Flat As Traders Focus On Commodity Markets USD/CAD 240726 4h Chart USD/CAD is mostly flat despite the rebound in precious metals markets. Other commodity-related currencies are moving higher in today’s trading session.

In case USD/CAD pulls back below the 50 MA at 1.4061, it will head towards the support level at 1.4010 – 1.4025.

On the upside, USD/CAD needs to settle above the resistance level at 1.4125 – 1.4140 to have a chance to gain upside momentum in the near term. A move above the 1.4140 level will push USD/CAD towards the next resistance level at 1.4235 – 1.4250.

USD/JPY Tests Resistance At 163.50 – 164.00 USD/JPY 240726 4h Chart USD/JPY remains stuck near the 164.00 level as traders react to inflation data from Japan. Inflation Rate increased from 1.5% in May to 1.7% in June, in line with analyst consensus. Core inflation Rate increased from 1.4% to 1.6%. The report has also met analyst estimates.

From the technical point of view, USD/JPY attempts to settle above the resistance level at 163.50 – 164.00. In case USD/JPY manages to settle above the 164.00 level, it will head towards the psychologically important 165.00 level. These levels have not been tested since 1986. RSI is in the overbought territory, but there is some room to gain additional momentum in the near term.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.