Weekly FX Technical Analysis - 24th August 2026

This week’s FX charts show a market still being pulled between strong technical recoveries and heavy macro uncertainty. GBP/USD has continued to rally and is now testing the 1.3650 to 1.3675 resistance area, while EUR/GBP remains fragile below former support despite its bounce from the July lows. EUR/USD has recovered sharply and is now pressing towards 1.1700, helped by renewed dollar weakness linked to US debt concerns and Treasury market intervention. USD/JPY remains the most politically sensitive chart, with the pair still capped below 160.00 to 161.00 after recent coordinated yen intervention.

GBP/USD

GBP/USD has extended its recovery and is now trading around 1.3628, close to the upper end of its recent range. The pair has moved firmly above the short term moving average and is now testing the important 1.3650 to 1.3675 resistance area. RSI is now in stronger territory, which supports the bullish recovery, although the chart is approaching a level where a short term pause or pullback would not be surprising.

Potential Scenarios

• Bullish: If GBP/USD can break and hold above 1.3675, the next upside target sits around 1.3800. A move through that level would mark a more important medium term bullish development and suggest sterling has regained broader momentum.

• Bearish: If the pair fails around 1.3650 to 1.3675, price could rotate back towards 1.3500 and then 1.3400. A break below 1.3400 would weaken the recovery and bring the 1.3275 to 1.3300 support zone back into focus.

Macro Backdrop to Consider

Sterling has been helped by a weaker dollar and resilient UK data, with July inflation rising to 2.9 percent and markets still pricing some chance of a Bank of England hike, despite most economists expecting rates to stay at 3.75 percent this year. The key risk is whether upcoming UK data can justify that optimism, while US debt concerns, Treasury bond buybacks and Fed Chair Kevin Warsh’s Jackson Hole speech remain central for the dollar.

House View

Our house view is cautiously constructive while GBP/USD holds above 1.3500. However, with price now close to resistance and momentum looking stretched, we would want to see a clean break above 1.3675 before calling for a stronger move towards 1.3800.

GBP/USD: AUGUST ‘25 - PRESENT

EUR/GBP

EUR/GBP remains under pressure, trading around 0.8557 after a modest recovery from the July lows. The pair has bounced from the 0.8450 to 0.8475 area, but it remains below the previous breakdown zone around 0.8625 and continues to trade within a broader downward structure. RSI has moved back towards neutral territory, suggesting the immediate downside pressure has eased, but the recovery still looks fragile.

Potential Scenarios

• Bullish: If EUR/GBP can break back above 0.8585 and then reclaim 0.8625, the recovery could extend towards 0.8650 and 0.8700. A move through those levels would suggest the recent downside break has started to lose momentum.

• Bearish: If the pair fails below 0.8585, sellers may look to retest 0.8520 and then 0.8475. A break below 0.8475 would put the recent lows back under pressure and could reopen a deeper downside move.

  
  

Macro Backdrop to Consider

The euro remains sensitive to the energy and inflation implications of the Strait of Hormuz crisis, although ECB policymaker Piero Cipollone has suggested the risk of stagflation from the crisis is currently low. Sterling, meanwhile, has been supported by firmer UK inflation and rate expectations, leaving EUR/GBP vulnerable unless the euro can regain broader support or UK data begins to disappoint.

House View

Our house view is neutral to mildly bearish while EUR/GBP remains below 0.8625. The bounce from the lows is notable, but the pair needs to reclaim former support before the technical picture becomes more balanced.

EUR/GBP: AUGUST ‘25 - PRESENT

EUR/USD

EUR/USD has continued its sharp recovery and is now trading around 1.1664. The pair has broken back above 1.1600 and is testing the upper end of its recent recovery channel, with RSI now close to stronger momentum territory. The chart has improved materially, although price is now approaching resistance around 1.1700, meaning the next phase depends on whether the euro can sustain this move or stalls near the top of the range.

Potential Scenarios

• Bullish: If EUR/USD can break above 1.1700, the next upside target sits around 1.1800. A move through 1.1800 would strengthen the recovery and bring the larger 1.2000 region back into view.

• Bearish: If the pair fails around 1.1700, price could pull back towards 1.1600 and then 1.1500. A break below 1.1500 would weaken the recovery and bring 1.1415 to 1.1350 back into focus.

  
  

Macro Backdrop to Consider

The dollar remains under pressure from US debt concerns and the Treasury’s decision to increase long dated bond buybacks, with markets treating the dollar as a release valve for wider fiscal stress. EUR/USD is also being shaped by expectations around Warsh’s Jackson Hole speech and upcoming US PCE inflation, while Iran and Hormuz related energy risk remains an important inflation variable for Europe.

House View

Our house view is cautiously constructive while EUR/USD holds above 1.1600. That said, the pair is approaching an important resistance zone, so a sustained break above 1.1700 is needed to confirm the next leg higher.

EUR/USD: AUGUST ‘25 - PRESENT

USD/JPY

USD/JPY remains volatile and is trading around 159.25 after rebounding from the 156.00 area. The pair has stabilised after the sharp August fall, but it remains below the important 160.00 to 161.00 region and has not yet repaired the wider technical damage. RSI has recovered from oversold conditions but remains relatively subdued, suggesting the current move is more of a rebound than a confirmed bullish reversal.

Potential Scenarios

• Bullish: If USD/JPY can reclaim 160.00 and then 161.00, the pair could attempt another move towards 162.50 and 164.00. A move above 164.00 would suggest the broader uptrend is trying to reassert itself.

• Bearish: If the pair fails below 160.00, downside pressure could return towards 158.00 and then 156.00. A break below 156.00 would suggest a deeper correction, with 155.00 and 152.50 becoming relevant.

Macro Backdrop to Consider

USD/JPY remains heavily shaped by intervention risk after Japan confirmed coordinated yen buying with the US earlier this month and said it would not hesitate to act again. The rate differential still supports the dollar, but US fiscal concerns, a weaker dollar backdrop, Warsh’s Jackson Hole speech and potential Bank of Japan signals keep the pair vulnerable above 160.00.

House View

Our house view is neutral to cautiously bearish while USD/JPY remains below 160.00 to 161.00. The pair has bounced well from the lows, but intervention risk and weaker dollar sentiment make it difficult to chase upside at these levels.

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.