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Weekly FX Technical Analysis - 10th August 2026
This week’s FX charts show a market still being driven by the tension between technical recovery and macro uncertainty. Sterling has regained some momentum against the dollar, but GBP/USD still needs to clear resistance around 1.3560 before the move looks more convincing. EUR/USD has also recovered from its July lows, although the 1.1600 area remains a key test. EUR/GBP remains heavy after breaking below the 0.8600 region, while USD/JPY continues to look fragile after sharp intervention driven volatility. Macro focus is firmly on US inflation, the Fed’s reaction function under Kevin Warsh, UK growth data, Bank of England expectations, the Strait of Hormuz, and whether Japanese authorities can keep pressure on yen weakness.
GBP/USD
GBP/USD has recovered strongly from the late July support zone and is now trading back around 1.35, with the pair attempting to stabilise above the 20 day moving average. The recent rebound has improved short term momentum, but the broader chart remains capped by resistance around 1.3500 to 1.3560, with the larger 1.3650 area still a key barrier. RSI has recovered into the upper neutral range, suggesting momentum has improved but is not yet stretched.
Potential Scenarios
Bullish: If GBP/USD can hold above the 1.3400 to 1.3450 region and push through 1.3560, the next focus would be 1.3650, followed by the larger resistance area around 1.3800. A move through those levels would suggest the July recovery is developing into a more meaningful upside reversal.
Bearish: Failure to sustain the recovery above 1.3450 would leave the pair vulnerable to another move back towards 1.3330 and then 1.3275. A break below that area would weaken the current rebound and bring the 1.3150 to 1.3200 support zone back into focus.
Macro Backdrop to Consider
Sterling is being pulled between improved UK resilience and a still fragile global backdrop. The pound has been trading near a three and a half week high, with markets waiting for UK growth figures later in the week, while Bank of England expectations remain sensitive to energy prices and the Middle East situation. In the US, the weak July jobs report has reduced confidence in another near term Fed hike, although attention now turns to CPI and how Kevin Warsh’s Fed balances softer labour data against still elevated inflation risks.
House View
Our house view is cautiously constructive while GBP/USD remains above the 1.3400 region, but we would still treat the current move as a recovery within a broad range rather than a confirmed breakout. A sustained close above 1.3560 would be the first sign that sterling has regained stronger upside momentum.
GBP/USD: AUGUST ‘25 - PRESENT
EUR/GBP
EUR/GBP remains under pressure after breaking below the long standing 0.8600 to 0.8625 support area, although the pair has started to rebound from the lower Bollinger Band. Price is now trading around 0.8550 to 0.8560, with the 20 day moving average and former support now sitting above the market as resistance. RSI has recovered from oversold levels but remains soft, suggesting the short term bounce still needs confirmation.
Potential Scenarios
Bullish: If EUR/GBP can push back above 0.8600 and then 0.8625, the pair may begin to unwind the recent downside move. A stronger recovery would bring 0.8650 and then 0.8700 back into focus, particularly if sterling loses momentum or UK rate expectations soften.
Bearish: If the pair fails below 0.8600, downside pressure is likely to remain in place. A move back below 0.8520 would expose the July lows around 0.8475 to 0.8500, with a break below that area opening the door to a deeper move lower.
Macro Backdrop to Consider
The euro side remains sensitive to energy and growth risk, particularly as markets continue to monitor the Strait of Hormuz and wider US Iran tensions. Reports of progress on reopening shipping lanes have helped stabilise oil prices, but conditions remain uncertain and any renewed disruption could quickly feed back into European inflation expectations. Sterling, meanwhile, is being supported by hopes of resilient UK data, although markets may be overestimating the degree of future Bank of England tightening.
House View
Our house view is neutral to mildly bearish while EUR/GBP remains below 0.8600 to 0.8625. The recent bounce looks corrective for now, and the pair needs to reclaim former support before the picture becomes more balanced.
EUR/GBP: AUGUST ‘25 - PRESENT
EUR/USD
EUR/USD has rebounded sharply from the 1.1330 to 1.1350 area and is now trading around 1.1550. The recovery has lifted the pair back towards short term resistance near 1.1600, but the broader sequence of lower highs remains visible from the February peak. RSI has moved back into positive territory, suggesting momentum has improved, though the pair still needs to break the 1.1600 area to confirm a more meaningful turn.
Potential Scenarios
Bullish: If EUR/USD can hold above 1.1460 and break through 1.1600, the recovery could extend towards 1.1700 and then 1.1800. A move above 1.1800 would materially improve the medium term outlook and suggest the euro has broken out of the recent corrective phase.
Bearish: Failure around 1.1600 would keep the broader downtrend in play. A move back below 1.1460 would weaken the recovery and bring 1.1350 back into focus. A break below 1.1330 would be a more bearish signal and could expose the 1.1200 area.
Macro Backdrop to Consider
EUR/USD remains highly sensitive to the US inflation and Fed story. The July payrolls report showed unexpected job losses and softer revisions, which has cooled expectations of a near term Fed hike. However, markets now have to balance that against July CPI, with core inflation expected to moderate only gradually, and against the new Warsh Fed’s stated focus on keeping inflation contained. On the euro side, the ECB’s earlier rate hike in response to war driven inflation still provides some support, but the euro remains exposed to energy shocks and weaker regional growth.
House View
Our house view is cautiously neutral. The bounce from 1.1330 is encouraging, but EUR/USD needs a clean break above 1.1600 before the recovery can be treated as more than a corrective move. Until then, the pair remains vulnerable to renewed dollar strength if US CPI comes in firm.
EUR/USD: AUGUST ‘25 - PRESENT
USD/JPY
USD/JPY has seen a sharp pullback from the 163.00 to 164.00 area, with price falling quickly towards 156.00 before stabilising and rebounding back towards 158.80. The pair is now sitting below the 160.00 to 161.00 region, which has become the key near term resistance zone. RSI remains subdued after the recent fall, suggesting the broader uptrend has lost momentum, even though the recovery from the lows shows buyers are still present on dips.
Potential Scenarios
Bullish: If USD/JPY can reclaim 160.00 and then 161.00, the pair may attempt another move back towards 162.00 and 163.00. A sustained break above 163.00 would put the prior highs back in focus, although intervention risk would likely increase again at those levels.
Bearish: If the pair fails below 160.00, renewed downside pressure could bring 156.00 back into focus. A break below that level would suggest the recent decline is developing into a deeper correction, with 154.00 and 152.50 then becoming relevant.
Macro Backdrop to Consider
USD/JPY remains one of the most politically sensitive major pairs. Recent yen intervention has not removed the underlying pressure, with markets still focused on the wide US Japan rate differential and whether the Bank of Japan can provide more durable support through policy. The weak US jobs data has reduced some dollar momentum, but a firmer CPI print could quickly revive yield support. Intervention risk remains high if the pair pushes back through 160.00 to 162.00.
House View
Our house view is neutral to cautiously bearish in the short term while USD/JPY remains below 160.00 to 161.00. The longer term trend has not fully broken, but the recent collapse from the highs shows how vulnerable the pair is to intervention, positioning stress, and any shift in US rate expectations.
USD/JPY: AUGUST ‘25 - PRESENT
As always, if you’d like to discuss these moves in more detail, or how they could impact your business or personal requirements, please don’t hesitate to get in touch.
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Disclaimer: The information in this publication is provided for general information purposes only. It does not constitute financial or investment advice, nor should it be relied upon as such. Readers should consider their own circumstances and seek independent advice where appropriate.
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