The EUR/USD pair is consolidating near last week’s highs, balancing between the strength of the US dollar and limited geopolitical support for the euro.
Possible technical scenarios:
As we can see on the daily EUR/USD chart, the pair is consolidating close to resistance at 1.1738. If this level is not overcome, quotes may head down toward support at 1.1494.
Fundamental drivers of volatility:
A possible agreement between Ukraine and Russia could support the euro, given the EU’s reliance on energy imports and the sensitivity of the European economy to geopolitical risks. At the same time, the news backdrop remains unstable, leaving euro gains vulnerable.
On the other side, the US dollar is supported by expectations of a dovish Fed stance. Despite strong data on producer inflation and retail sales, markets remain confident in a September rate cut, estimating the probability at 84%. Investors are also awaiting Fed Chair Jerome Powell’s speech in Jackson Hole, which will serve as a key signal for monetary policy expectations.
The pair’s next move will depend on a mix of political developments and economic data. In Europe, key triggers could be inflation reports, business activity indexes, and German GDP, which will shape the euro’s short-term stability.
Intraday technical picture:
Given the unfolding situation on the 4H chart, EUR/USD has consolidated above dotted support at 1.1589 and moved higher, while still keeping some room to test resistance at 1.1738.
The GBP/USD pair remains under pressure from a stronger dollar and is holding near the 1.3500 level.
Possible technical scenarios:
On the daily chart, GBP/USD is trading in the middle of the range between 1.3436 and 1.3630, from where it may move toward either boundary. For now, a decline toward support looks more probable.
Fundamental drivers of volatility:
The dollar is gaining support in the pair as market expectations for aggressive Fed easing have diminished. Recent US producer inflation data came in at the highest level in three years, reinforcing confidence that the regulator may only deliver one rate cut in September and possibly another by year-end. This gives the American currency a local advantage and prevents the pound from rebounding.
Meanwhile, market focus is on the annual Jackson Hole symposium, where Jerome Powell’s speech could provide new direction for US monetary policy. Concerns over the Fed’s independence from political pressure remain a key discussion point, and if such fears grow stronger, the dollar’s support may weaken.
For the pound, the moderately positive UK GDP report for Q2 exceeded expectations and could complicate the Bank of England’s plans for further rate cuts. Economic growth slowed to 0.3% from 0.7% in Q1, but still beat forecasts. This may help ease pressure on the pound and partially offset the dollar’s strength.
Intraday technical picture:
As evidenced by the 4H chart, a local downtrend within the range between 1.3436 and 1.3630, which started after failing to update the previous high, confirms the likelihood of a price weakening toward 1.3436.
The USD/JPY pair is showing restrained dynamics on Tuesday, holding below the 148.00 level despite minor intraday attempts to rise.
Possible technical scenarios:
On the daily chart, USD/JPY is trading in the middle of the range between 145.91 and 148.63, leaving some room to move toward the upper boundary. If the 148.63 level is broken out and the price consolidates above it, quotes could open the way toward 149.94.
Fundamental drivers of volatility:
The yen is supported by expectations of a Bank of Japan rate hike by year-end and cautious demand for safe-haven assets, while hopes for a peaceful resolution in Ukraine are limiting further growth.
The overall picture remains mixed: the Fed is expected to cut rates as early as September (with a probability of around 85%), while the Bank of Japan signals readiness to tighten policy. This divergence should strengthen the yen, yet uncertainty about timing and domestic risks in Japan restrain JPY bulls.
For the dollar, the main sources of volatility this week will be the Fed minutes, Powell’s speech in Jackson Hole, as well as housing and PMI data. The pair’s direction will depend on the combination of US policy signals and geopolitical factors, with the market still lacking a clear trend.
Intraday technical picture:
According to the 4H chart, USD/JPY has a small margin of movement toward 148.63, after which a price reversal downward and a continuation of sideways dynamics are possible, unless strong fundamental drivers spark an impulse.
The USD/CAD pair is trading in a sideways range ahead of the release of Canada’s July inflation data.
Possible technical scenarios:
On the daily chart, USD/CAD continues to recover within the range between 1.3744 and 1.3861, holding in the middle of the range toward resistance. A breakout above this channel would open the path for growth toward 1.4013.
Fundamental drivers of volatility:
The US dollar is supported by expectations of Fed policy easing in September. Still, traders are reluctant to open new positions before the FOMC minutes and Jerome Powell’s speech in Jackson Hole.
Meanwhile, demand for the greenback remains backed by US trade restrictions and weakness in the Canadian dollar linked to commodity dynamics and the Bank of Canada’s dovish stance.
The CAD is pressured by weak oil prices and US trade measures, including higher tariffs on Canadian goods (raised to 35%) and new transit fees.
Adding uncertainty is the inflation report, with the annual rate expected to slow to 1.7%. At the same time, core indicators remain closer to 3%, pushing the Bank of Canada to stay cautious and keep rates at 2.75%, while leaving room for further cuts.
Intraday technical picture:
On the 4H USD/CAD chart, the price still has enough room to move toward resistance in the range between 1.3744 and 1.3861.
Oil prices are moving in a narrow range for the second consecutive week, waiting for stronger drivers of volatility.
Possible technical scenarios:
The daily chart demonstrates Brent crude consolidating within a tight corridor between 65.02 and 66.51. A downside exit would open the way toward the next support at 63.23.
Fundamental drivers of volatility:
Positive signals about potential negotiations between Ukraine, Russia, and the United States have eased geopolitical risks and lowered expectations of tougher sanctions on Russian exports, reducing pressure on prices.
At the same time, the prospect of a Fed rate cut in September supports the market: cheaper financing could stimulate US economic activity and energy demand. Markets currently price in about an 84% chance of a 25 bp cut, keeping prices from sliding further.
Investors remain focused on the Jackson Hole Symposium and Jerome Powell’s speech, which may shift rate expectations and indirectly influence demand.
Short-term dynamics are shaped by the balance between easing geopolitical risks and hopes for economic stimulus in the US, which could strengthen demand for oil.
Intraday technical picture:
On Brent’s 4H chart, the price is nearing the support of the 65.02 – 66.51 corridor, where both a downward exit and a continuation of sideways movement are possible.
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