Forex News
MUFG’s Asia FX Weekly highlights that China’s July activity indicators, following weak Q2 GDP, will be central for the Chinese Yuan and regional FX. The authors stress ongoing weakness in fixed asset investment and property-sector challenges, and question whether domestic demand is stabilizing and whether PBOC will tolerate continued CNY strength. They also note PBOC has been guiding USD/CNY lower via its daily fixing.
China data and fixing steer CNY
"In China, attention will centre on July activity indicators, following a weak Q2 GDP print."
"Fixed asset investment is likely to remain weak, underscoring ongoing challenges in the property sector."
"The key question for FX markets is whether domestic demand shows signs of stabilization and whether PBOC is comfortable allowing continued strength in CNY."
"Any weaker-than-expected Chinese activity data could weigh on regional risk sentiment and those regional currencies that are closely interlinked with China’s economic outlook."
"PBOC has broadly guided USD/CNY lower via its daily fixing mechanism."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/JPY is little changed in the low-159s on Friday, holding its ground after a volatile stretch.
- US Consumer Sentiment fell sharply in August, missing forecasts and adding to a soft week of US data.
- A weaker Yen is offsetting the softer Dollar, keeping the pair pinned near current levels.
USD/JPY is holding near 159.40 at the time of writing, with little change on the day. A weak United States (US) Consumer Sentiment reading nudged the Dollar lower, but the pair has stayed close to where it started.
The University of Michigan's preliminary Consumer Sentiment Index dropped to 51 in August from 55.2, well below the 54.5 that markets expected. The Expectations component fell to 50.6. It is the latest soft US number in a week that also brought cooler inflation and a weak Retail Sales report.
Taken together, that run of data has taken some steam out of the US Dollar (USD), with the Dollar Index (DXY) lower on the day. On its own, a softer Dollar would usually pull USD/JPY down with it.
The boost from the record joint US–Japan intervention in late July and early August has faded, and with no follow-up from Tokyo, speculators have gone back to selling the Japanese Yen (JPY). That leaves USD/JPY caught between a soft Dollar and a soft Yen, with neither side able to take control.
Short-term technical analysis:
On the 4-hour chart, USD/JPY trades at 159.38, maintaining a neutral near-term tone as it holds above the 20-period simple moving average (SMA) at 159.33 but remains capped beneath the 100-period SMA at 160.20. The pair is hovering just under the nearby horizontal barrier at 159.39, while the Relative Strength Index (14) around 56 suggests mildly constructive momentum without reaching overbought conditions.
On the topside, immediate resistance is located at 159.39, followed by the higher horizontal level at 159.58, before the more significant 100-period SMA at 160.20 comes into view as a broader cap. On the downside, initial support is clustered around the 20-period SMA at 159.33, ahead of the horizontal floors at 159.20 and 159.10, which together form a shallow demand band protecting the recent consolidation area.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- USD/CAD deepens its decline below 1.4000 and heads for a third straight weekly loss.
- The technical picture remains bearish, with the 200-day SMA emerging as the next key downside test.
- Momentum indicators suggest the recent decline may be overstretched.
USD/CAD extends its decline farther below 1.4000 on Friday and heads for a third consecutive weekly loss. At the time of writing, the pair trades around 1.3877, at levels last seen in early July.
The recent strength in the Canadian Dollar (CAD) is driven by broad US Dollar (USD) weakness and relatively stronger Canadian economic data, while elevated Oil prices provide underlying support to the commodity-linked Loonie.
Monetary policy expectations remain in focus. In the US, moderating inflation, weaker consumer spending and signs of labour market softness have lowered the chances of a Federal Reserve (Fed) interest rate hike next month. Across the border, next week’s Consumer Price Index (CPI) report will provide a fresh update on inflation and its possible impact on the Bank of Canada’s (BoC) policy path.
BoC seen prioritising soft core inflation as output gap closes only gradually
According to TD Securities, the Bank of Canada is likely to place greater emphasis on the “softer trajectory for core inflation” at its 2 September decision, noting that the limited “passthrough from higher oil prices gives it more scope to continue looking through the energy shock.” The bank adds that the “recent deceleration across core inflation measures also helps to validate the Bank's assessment around excess supply and capacity to absorb stronger growth amid the rebound in Q2 GDP tracking.”
In TD’s view, this backdrop “should allow the Bank of Canada to stick to its recent messaging next month, with a focus on softer underlying inflation and the gradual timeline to close the output gap.”
Technical analysis
From a technical perspective, USD/CAD maintains a steady downtrend, forming a series of lower highs and lower lows since reversing from above 1.4200 in late June. The pair subsequently slipped below the 50-day Simple Moving Average (SMA), while the latest leg lower has pushed it beneath the 100-day SMA.
The Relative Strength Index (14) around 29 signals oversold conditions and warns that downside momentum may be stretched even as the Moving Average Convergence Divergence (MACD) remains in negative territory.
On the downside, immediate support is aligned with the 200-day SMA close to 1.3850, ahead of a more substantial horizontal floor at 1.3700, with a deeper bearish extension exposing the structural level at 1.3542.
On the topside, a recovery attempt would first face resistance at the 100-day SMA at 1.3920, with any stronger rebound likely capped by the higher 50-day SMA at 1.4077 unless sellers lose control of the medium-term trend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.31% | -0.35% | -0.08% | -0.39% | -0.29% | -0.59% | -0.14% | |
| EUR | 0.31% | -0.04% | 0.22% | -0.10% | 0.02% | -0.30% | 0.17% | |
| GBP | 0.35% | 0.04% | 0.28% | -0.08% | 0.06% | -0.24% | 0.22% | |
| JPY | 0.08% | -0.22% | -0.28% | -0.30% | -0.21% | -0.54% | -0.04% | |
| CAD | 0.39% | 0.10% | 0.08% | 0.30% | 0.10% | -0.20% | 0.26% | |
| AUD | 0.29% | -0.02% | -0.06% | 0.21% | -0.10% | -0.30% | 0.16% | |
| NZD | 0.59% | 0.30% | 0.24% | 0.54% | 0.20% | 0.30% | 0.48% | |
| CHF | 0.14% | -0.17% | -0.22% | 0.04% | -0.26% | -0.16% | -0.48% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- DXY opens at its session high just short of 100.00 and pierces 99.50.
- July retail sales -0.6% against a 0.1% consensus, sentiment 51 from 55.2.
- The Yen down 0.7% on the week as the joint intervention effect fades.
The Dollar Index took a payroll contraction on August 7, a cooler consumer price reading on August 12 and a flat producer price reading on August 13 without surrendering its range. Friday's data finally did it. July retail sales contracted 0.6% against a consensus for a 0.1% gain, preliminary August consumer sentiment landed at 51 against a 54.5 consensus, and the index opened at its session high just short of 100.00 before piercing 99.50.
The print the Dollar was not braced for
The rate story had already turned before Friday and the currency had declined to follow it. Employers shed jobs in July, consumer prices cooled and producer prices came in flat, and through all three the index held a band roughly half a point wide. What survived those prints was a single argument, that a resilient consumer still gave the Committee room to tighten into an energy shock.
Friday removed the consumer from that sentence. Headline retail sales fell 0.6% where the consensus looked for a 0.1% gain, sales excluding autos fell 0.3% against a 0.2% consensus, and the control group swung to -0.4% from a 0.4% rise the month before. Futures now carry roughly a 31% chance of a September increase against something close to even odds a week ago, with a move by December marked near 64%. The front end ratified that inside the hour, the two-year yield trading briefly beneath 4.10% and its lowest since June 30.
The August floor was official
The level this index has defended all month was not built by the market. Tokyo bought Yen in record single-session size in early August and followed it with a second tranche coordinated with the US Treasury, an operation aimed squarely at the index's second-largest weight. A price set by the issuer of the reserve currency helping to sell it is policy rather than price discovery, and policy levels do not defend themselves.
That defence is already wearing off. The Yen is on track for a weekly decline of roughly 0.7% in spite of Friday's gain, sitting near 159.00 per Dollar after trading at four-decade lows near 164.00 before July's operation. Wire reporting has the Bank of Japan preparing to raise rates as soon as September and weighing a faster sequence after that, which points the same way as the intervention without costing anything. The Dollar's second-biggest counterweight now carries both a hawkish central bank and an official bid.
The war stopped paying
The geopolitical bid that was supposed to put a floor under this index did not turn up when it was needed. Washington and Tehran moved backwards this week, with the president claiming total control of the Strait of Hormuz on Wednesday, Iran's foreign minister answering that the claim rests on intelligence failures, and the War Secretary saying the naval blockade can be maintained indefinitely. Brent trades near $87.00, the strait stays shut, and the Dollar fell regardless.
That absence reframes the compression this chart has shown all month. The standard reading had rates arguing one way and geopolitics the other, with the index pinned between two live cases. The cleaner reading is that the rate case has been one-way since the payroll contraction and an official bid was holding the level, which is why the break arrived on a consumer print rather than on a headline out of the Gulf. The Euro carries the argument better than the Yen does. A bloc that imports most of its energy through a chokepoint somebody else controls is buying its currency above 1.1550 against the currency of a country that pumps its own, which is not how a war premium is supposed to distribute.
What next week has to answer
The calendar hands the argument to the minutes. The Federal Open Market Committee (FOMC) record of the July meeting publishes on Wednesday at 18:00 GMT, covering the first three-way dissent in one direction since 2016, and a committee that split that way six weeks ago now faces a market pricing under a third odds of the increase those dissenters voted for.
Ahead of that, housing starts and building permits land on Tuesday against 1.427 million and 1.374 million priors, with industrial production at a 0.3% consensus on the same morning. Friday brings preliminary August Purchasing Managers Index (PMI) readings against 53.9 manufacturing and 54.6 services priors, the first activity survey to cover the month itself rather than the one the consumer has already spoiled.
Levels
Resistance: The session high stopped just short of the 100.00 handle, which is the line that decides the next fortnight, with the declining 50-day Exponential Moving Average (EMA) near 100.25 sitting directly above it. Beyond that band, 100.50 and the 101.00 area are the reclaim levels, and the July peak near 101.75 is the ceiling on the chart.
Support: The 99.50 shelf and the rising 200-day EMA near 99.60 form one band, and the session traded through both before recovering above them. A daily close beneath that band opens 99.00, then 98.50, with the spring low near 97.60 the floor on the chart.
Bias: Bearish beneath the 100.00 handle. An index that opens at its high, pierces its slower moving average and cannot regain the figure, while the pricing that supported it is cut from even odds to under a third in a week, is trending rather than consolidating. Objectives 99.00 then 98.50, invalidation on a daily close back above the 50-day EMA near 100.25. The daily Stochastic Relative Strength Index (Stoch RSI) near 14 is a warning about the timing of the next bounce, not about the direction of the trend.
DXY daily chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact 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 when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
OCBC’s Sim Moh Siong and Christopher Wong note USD/SGD is consolidating around 1.28 as softer United States (US) Producer Price Index (PPI) trims Federal Reserve (Fed) hike expectations but fails to trigger fresh US Dollar (USD) selling. While they still see downside risks over time, geopolitical tensions and the pair’s inability to break lower suggest the next leg down may be challenging.
Range trade, geopolitics and support levels
"USD/SGD remained subdued around 1.28 overnight. Softer-than-expected US PPI saw Fed hike expectations pared further and US Treasury yields eased, but the USD showed little follow-through to the downside."
"Geopolitical uncertainty may be partly tempering appetite to chase the USD lower, particularly heading into the weekend. Houthis claimed fresh drone attacks on Saudi Aramco’s Jazan refinery, while the US said it could maintain its naval blockade of Iranian ports indefinitely."
"We continue to see downside risks over time, but the pair’s inability to break lower despite softer US inflation data suggests the next leg down may not be straightforward. Weekend geopolitical risks may also keep some defensive USD demand in play for now."
"Pair last seen at 1.28 levels. Mild bearish momentum on daily chart intact while RSI was flat. 2-way trades likely in recent range."
"Support at 1.2770 (recent low), 1.2740 (61.8% fibo). Resistance at 1.2830/40 levels (100, 200 DMAs, 38.2% fibo retracement of 2026 low to high), 1.2870/90 levels (21, 50 DMAs, 23.6% fibo)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/CHF snaps four-day rally but holds above 0.8100.
- Bullish RSI turns flat, signaling further sideways trading ahead.
- Break above 0.8150 exposes 0.8207 and 0.8250 next.
The USD/CHF turns negative on the day, snapping a four-day winning streak, yet it remains above 0.8100, suggesting further upside is possible if buyers reclaim key resistance levels. At the time of writing, the pair trades at a 0.12% loss.
USD/CHF Price Forecast: Technical Outlook
The ‘bearish flag’ remains in play. Although the pair refreshed a two-day low, closing Friday’s session near the week's highs, it could open the door to a breakout to the upside and a resumption of the uptrend.
The Relative Strength Index (RSI) is bullish but has turned flat, suggesting additional sideways trading lies ahead.
If USD/CHF breaks above 0.8150, the next area of interest would be the July 29 high at 0.8207. Once surpassed the next stop is the June 19, 2925 high at 0.8215, followed by the June 4, 2025 peak at 0.8250. Up next is 0.8300.
Downwards, the first support for USD/CHF is the low of the day (LOD) at 0.8103, which opens the path for a move lower to the 50-day Simple Moving Average (SMA) at 0.8079. The next support level would be the July 30 swing low of 0.8035, ahead of 0.8000.
USD/CHF Price Char – Daily
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.30% | -0.33% | -0.10% | -0.38% | -0.28% | -0.57% | -0.13% | |
| EUR | 0.30% | -0.03% | 0.20% | -0.11% | 0.02% | -0.27% | 0.17% | |
| GBP | 0.33% | 0.03% | 0.24% | -0.08% | 0.05% | -0.23% | 0.21% | |
| JPY | 0.10% | -0.20% | -0.24% | -0.28% | -0.20% | -0.51% | -0.03% | |
| CAD | 0.38% | 0.11% | 0.08% | 0.28% | 0.09% | -0.19% | 0.26% | |
| AUD | 0.28% | -0.02% | -0.05% | 0.20% | -0.09% | -0.29% | 0.17% | |
| NZD | 0.57% | 0.27% | 0.23% | 0.51% | 0.19% | 0.29% | 0.47% | |
| CHF | 0.13% | -0.17% | -0.21% | 0.03% | -0.26% | -0.17% | -0.47% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- Gold rises as Dollar slides on softer inflation and sales data.
- Retail Sales slump reinforces September Fed hold expectations.
- Hormuz calm and lower hike odds support Bullion recovery.
Gold price registers solid gains of nearly 0.90% on Friday as the US Dollar weakens across the board, following a week that featured softer inflation data, which decreased the chances for a rate hike by the Federal Reserve (Fed). The XAU/USD trades at $4,386, still below the $4,400 threshold.
XAU/USD gains as weak US data curbs September Fed hike bets
The US Dollar Index (DXY), which tracks the value of the American currency against six other currencies, is down 0.4% to 99.57, as investors trimmed Fed-hawkish bets ahead of the September meeting.
US inflation data on the producer and consumer side eased in July. The evolution of the disinflation process, the modest rise in Initial Jobless Claims and the drop in Retail Sales were the reasons that triggered the US Dollar sell-off during the week.
On Friday, Retail Sales snapped a five-month streak of growth, declining 0.6% and missing estimates for a 0.1% expansion. Sales within the Control Group, which are used to calculate consumer spending in the Gross Domestic Product, declined by 0.4% after a 0.4% increase in June, according to the US Commerce Department.
The University of Michigan Consumer Sentiment deteriorated further in August’s preliminary reading, from 55.2 to 51.0. Inflation expectations for one year rose from 4.2% to 4.3%, while those for five years remained steady at 3.3%.
The lack of headlines about the Middle East provided another leg up for Bullion. The US Treasury Secretary Scott Bessent commented that they will implement unprecedented measures on Iran to pressure the regime. Meanwhile, the Strait of Hormuz remained closed, though Oil prices had failed to rally sharply.
In the meantime, the fall of US yields is a tailwind for Gold prices. The US 10-year Treasury yield is up 3.5 basis points to 4.684%.
The swaps markets currently assign a 31% probability to a rate hike at the September meeting, down from roughly 55% last week, according to Prime Terminal data.
Next week, the US economic docket will feature housing data, the ADP Employment Change 4-week average, jobless claims and Flash PMIs.
XAU/USD technical analysis: Gold struggles at 100-day SMA, to trade sideways
From a technical perspective, Gold is poised to consolidate around the 100-day Simple Moving Average (SMA) at $4,386. Momentum remains bullish, as depicted by the Relative Strength Index (RSI), but buyers failed to decisively surpass $4,400, opening the door for a pullback.
For a bullish resumption, XAU/USD must climb above $4,400. A breach of it would expose the psychological $4,450, followed by the 200-day SMA at $4,504.
Downwards, the first support is the low of the day (LOD) at $4,311. Below is the $4,300 level, which, if cleared, could exacerbate a move towards the July 6 high at $ 4,202, followed by the 50-day SMA at $4,146 and $4,100.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Societe Generale analysts note USD/KRW has corrected after losing its 200-day moving average near 1478 and is now testing an ascending trend line from 2023 around 1407. They see interim support at that level, with a break above 1425 needed to confirm a short-term bounce, while failure to hold 1407 could open 1388/1385 and 1375 on the downside.
Key trend support under pressure
"USD/KRW has staged a deeper pullback after falling below its 200-DMA (now near 1478)."
"The pair has reached the ascending trend line drawn since 2023, near 1407, which could provide interim support."
"A brief pause appears to be taking shape; however, a break above the peak reached earlier this week at 1425 will be crucial to confirm a short-term bounce."
"If the pair fails to defend 1407, the decline could extend toward the next projections at 1388/1385 and 1375."
"Elsewhere in Asia, the KRW continues to spearhead regional performance but the rally from around 1,560 in early July to near 1,415 is beginning to show signs of fatigue."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- GBP/USD edges up as weak US Retail Sales pressure the US Dollar.
- Consumer sentiment drops, reinforcing Fed hold bets for September.
- UK GDP strength shifts focus to inflation and jobs data.
The Pound Sterling (GBP) rises by some 0.40% on Friday as a batch of US data supports a Federal Reserve (Fed) dovish stance, with consumer sentiment deteriorating while the disinflation process showed further progress. The GBP/USD pair trades at 1.3545 after hitting a three-month high of 1.3561 earlier in the day.
GBP/USD climbs as soft US spending and sentiment boost Fed hold bets
In the week, GBP/USD is poised to finish the week in the green. The US Dollar Index (DXY), which measures the buck’s performance against six currencies, is down 0.40% to 99.54, set to end near weekly lows as traders price out Fed interest rate hikes.
US July Retail Sales snapped five months of straight gains, declining 0.6% MoM, below forecasts for a 0.1% increase. Sales in the control group, used in the calculation of the Gross Domestic Product (GDP), dropped as well by 0.4%, after registering a 0.4% growth in June, according to the US Commerce Department.
The University of Michigan Consumer Sentiment, in its preliminary August reading, deteriorated as households remain concerned about elevated prices. The index fell from 55.2 in July to 51, snapping two straight months of improvement. Inflation expectations for the next 12 months rose from 4.2% to 4.3%, while expectations for 5 years remained unchanged at 3.3%.
After the data, money markets expect the Fed to hold rates unchanged, with odds at 70% and the chance of a rate hike at 30%, as shown by Prime Terminal.
In the UK, the weekly economic schedule was anemic, except for the release of Gross Domestic Product (GDP) figures, which showed that the economy expanded at a 0.3% pace in June, the strongest among G7 developed countries.
Next week, the UK schedule will feature inflation and employment data, as well as Retail Sales. In the US, housing data, the ADP Employment Change 4-week average, jobless claims and Flash PMIs.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3549, extending its recovery above the key simple moving averages cluster around 1.3374 and former trend-line caps at 1.3423 and 1.3508, which now underpin the bullish near-term bias. The pair holds comfortably over these reclaimed supports while the Relative Strength Index (14) at 63.9 leans toward overbought territory, suggesting upward momentum remains constructive but increasingly stretched.
On the downside, immediate support is located at the recent breakout area near 1.3508, followed by the former downward resistance trend-line level at 1.3423 and the triple simple moving average region around 1.3374, with an additional structural floor at 1.3342 reinforcing the broader base. On the topside, the rising support trend line turned barrier at 1.3590 marks the next resistance to beat; a sustained move above this level would open the door to further gains, while failure to clear it may trigger a corrective pullback toward the 1.3508 zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
(This story was corrected on August 14 at 17:25 GMT to say that US July Retail Sales snapped five months of straight gains, not nine.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
(This story was corrected on August 14 at 17:25 GMT to say that "US July Retail Sales snapped five months of straight gains" not nine.)
United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann note that USD/CNH remains confined to a tight intraday range, with momentum indicators still flat and the pair expected to trade between 6.7400 and 6.7500. Over the 1–3 week horizon, they still see scope for a drift lower toward 6.7300 unless strong resistance at 6.7580 is breached.
Flat momentum keeps Dollar contained
"24-HOUR VIEW: When USD was at 6.7440 yesterday, we indicated that “momentum indicators are still mostly flat.” We also indicated that USD “could trade between 6.7400 and 6.7500.” USD subsequently traded between 6.7423 and 6.7479, closing largely unchanged at 6.7449 (-0.02%). Momentum indicators remain flat, and we continue to expect USD to trade between 6.7400 and 6.7500."
"1-3 WEEKS VIEW: In our most recent narrative from last Monday (03 Aug, spot at 6.7490), we highlighted that USD “could continue to edge lower toward 6.7300.” Although there has been no further increase in downward momentum, there is still a chance for USD to edge lower toward 6.7300. On the upside, a breach of 6.7580 (no change in ‘strong resistance’ level) would indicate that USD is likely to range-trade instead."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
