The EUR/USD pair is climbing to fresh two-month highs. The euro is supported by the overall weakness of the US dollar, but political instability in France is limiting further growth of the single currency.
Possible technical scenarios:
As shown on the daily EUR/USD chart, the pair has moved up from the range between 1.1494 and 1.1738. If it successfully consolidates above 1.1738, the next growth target will be 1.1898.
Fundamental drivers of volatility:
The dollar came under pressure after a weak August jobs report. This suggests the US labor market is softer than expected and boosts investor expectations for faster Fed easing. Futures now fully price in a rate cut at the next meeting, with a 0.50% cut probability rising above 10%.
However, the euro’s gains are capped by political risks: in France, a no-confidence vote removed the prime minister, creating uncertainty in the eurozone’s second-largest economy. A quick search for a replacement has eased some concerns, but further political developments remain a key risk for the euro.
The week’s main events are the ECB meeting on Thursday and the US inflation report. Markets don’t expect a rate change in the eurozone, but Christine Lagarde’s comments will be closely analyzed for clues about future policy. In the US, signs of a weakening labor market combined with persistent inflation risks could spark dollar volatility and shape EUR/USD’s short-term direction.
Intraday technical picture:
As evidenced by the 4H chart, EUR/USD is attempting to hold above 1.1738, which could open the way for growth toward 1.1898.
The GBP/USD pair reached a three-week high on Tuesday as the US dollar weakened following disappointing labor market data.
Possible technical scenarios:
Given the unfolding situation on the daily GBP/USD chart, the pair is nearing the upper boundary of the 1.3380–1.3630 range. Without strong fundamental drivers, a reversal down within this sideways range looks likely.
Fundamental drivers of volatility:
The dollar remains under pressure from weak US employment data. With only 22,000 new jobs added in August and previous figures revised lower, markets are now almost fully pricing in a Fed rate cut at the next meeting. The probability of a sharper 0.50% cut has climbed to nearly 12%, showing rising expectations of a faster easing cycle.
The UK, on the other hand, presents a more stable backdrop. Markets expect the Bank of England to keep rates at 4% next week. Attention is on Deputy Governor Sarah Breeden’s speech, as she previously voted for a rate cut. Her comments could hint at the balance of opinion within the Committee and its future direction.
Additional support for the pound may come from the upcoming GDP and industrial production data for July. An expected 0.1% growth indicates weak but positive momentum in the economy. Combined with dollar weakness, this allows GBP/USD to maintain a short-term upward trend.
Intraday technical picture:
According to the 4H chart, the pair has reached the resistance of the sideways range between 1.3380 and 1.3588, marked with the dotted lines. If it fails to break above this zone, the price may reverse and decline within the range.
USD/JPY remains under pressure, with the yen holding its relative strength despite Japan’s political uncertainty, while the US dollar weakens on growing expectations of more aggressive Fed easing.
Possible technical scenarios:
On the daily chart, USD/JPY is nearing the support of the 145.91–148.63 range. If this level is reached, a reversal upward is possible. That being said, a breakout of the 145.91 level could trigger further weakening toward the next target at 143.45.
Fundamental drivers of volatility:
The yen is supported by positive domestic data: upwardly revised Q2 GDP, rising real wages, and increased consumer spending. These factors fuel expectations that the Bank of Japan may raise rates soon, boosting demand for the yen.
However, political uncertainty complicates the situation. Prime Minister Shigeru Ishiba’s resignation adds instability and may temporarily limit the central bank’s resolve to normalize policy. Still, the wide policy gap between the Fed and the BoJ remains the main factor favoring the yen.
The US dollar continues to weaken amid worsening labor market data and rising expectations of a September rate cut.
Markets are also considering the possibility of a larger cut and additional easing later this year. This keeps the short-term bias for USD/JPY tilted toward further decline.
Intraday technical picture:
Judging by the unfolding situation on the 4H chart, the pair still has room to test support at 145.91. How the dollar reacts to this week’s inflation data will likely determine whether USD/JPY holds this level or moves lower.
USD/CAD is holding above 1.3800 on Tuesday, but the balance remains fragile as fundamental signals conflict.
Possible technical scenarios:
On the daily chart, USD/CAD has turned lower within the 1.3744–1.3861 range after a false breakout of support. The pair still has room to move down toward 1.3744.
Fundamental drivers of volatility:
The Canadian dollar is under pressure after weak jobs data, boosting expectations of a Bank of Canada rate cut at the September 17 meeting. This limits CAD’s upside potential, though rising oil prices are partially offsetting the negative effect.
The US dollar is also weighed down by weak labor market figures, which have strengthened expectations for a more aggressive Fed easing. Investors are now considering not just a standard 0.25% cut, but also the possibility of a larger move, holding back USD/CAD growth.
Risk appetite remains another headwind for the dollar, reducing demand for the safe-haven currency. Meanwhile, traders are cautious ahead of key US inflation data (PPI and CPI), which will set the tone for the pair’s next move.
Intraday technical picture:
The 4H chart shows that USD/CAD retains technical potential to decline within the 1.3744–1.3861 range. From the middle of this sideways channel, the pair could move toward either boundary.
Gold has reached a new all-time high of $3,659 per ounce, firmly consolidating above the psychological $3,600 level.
Possible technical scenarios:
On the daily chart, gold exited a symmetrical triangle and reached the 100 Fibonacci extension level at 3662.96. From here, the price could either turn down for a local pullback or break it out and consolidate above it. If the breakout is successful, the next medium-term growth target will be $4,000 per ounce.
Fundamental drivers of volatility:
Gold’s rally is fueled by a weakening US dollar and declining US bond yields, as markets grow increasingly confident about an imminent Fed rate cut.
Since the start of the year, gold has surged nearly 39%, driven by soft monetary policy, large-scale central bank buying, and ongoing global uncertainty. The dollar faced additional pressure from weak US labor market data, which pushed rate cut expectations higher for next week’s Fed meeting, including a 12% chance of a 0.50% cut.
Lower rates typically make gold more attractive, as it doesn’t generate coupon income, boosting demand for the metal. Investors are now focused on Wednesday’s PPI release and Thursday’s US CPI data, which will likely set the tone for gold’s next move
Intraday technical picture:
Judging by the look of things on the 4H chart, consolidation just below the 3662.96 resistance level could signal preparation for a breakout or the start of a pullback. In case of a pullback, the nearest target would be the local dotted level at 3578.47.
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