Weekly FX Technical Analysis - 3rd August 2026

This week’s FX charts show a meaningful shift in momentum across several major pairs. GBP/USD has recovered back above 1.3400 but still needs to clear the 1.3500 to 1.3550 area, EUR/GBP has bounced from oversold levels but remains below former support, EUR/USD is testing a key resistance zone after a sharp recovery, and USD/JPY has seen a major reversal following renewed intervention pressure.

The macro backdrop remains busy, with the BoE, Fed and ECB all wrestling with inflation risk, while the yen has become the clearest example of how political and policy intervention can quickly overwhelm existing market trends.

GBP/USD

GBP/USD is trading around 1.3455, recovering from the late July pullback and holding back above the 1.3400 area. The pair has rebounded from the lower end of its recent range, but momentum has not yet been strong enough to break cleanly through the 1.3500 to 1.3550 resistance zone.

The broader picture remains balanced. Sterling has regained some ground, but the pair still needs to clear nearby resistance before the recovery can be viewed as a more durable bullish move.

Potential Scenarios

• Bullish: A sustained move above 1.3500 to 1.3550 would improve the technical structure and bring 1.3600 to 1.3650 back into focus. A stronger break above this area would suggest the pair is rebuilding upside momentum after the recent correction.

• Bearish: Failure to hold above 1.3400 would leave GBP/USD vulnerable to another move lower. A break below 1.3300 would weaken the recovery and could expose the 1.3240 to 1.3200 support area.

Macro Backdrop to Consider

Sterling is being supported by a more cautious Bank of England, after the MPC held rates at 3.75% but saw three members vote for a hike. Against that, UK fiscal uncertainty remains a background risk, while the Warsh-led Fed also held rates at 3.50% to 3.75%, with several policymakers still concerned about inflation.

House View

We are neutral to mildly bullish while GBP/USD holds above 1.3400, but conviction remains limited until the pair clears 1.3500 to 1.3550. For now, the chart suggests recovery, but not yet a clean breakout.

GBP/USD: AUGUST ‘25 - PRESENT

EUR/GBP

EUR/GBP is trading around 0.8568 after rebounding from the recent lows near 0.8470. The move has taken the pair back above short term support, but it remains below the important 0.8600 to 0.8620 area, which now acts as near term resistance.

The rebound is notable, especially with RSI recovering from oversold territory, but the wider structure still looks fragile. Until the pair regains the former support zone, the move is better viewed as a corrective recovery within a broader bearish trend.

Potential Scenarios

• Bullish: A move back above 0.8600 to 0.8620 would suggest the euro is stabilising and could bring 0.8650 back into focus. A stronger move above 0.8700 would be needed to materially shift the broader technical picture.

• Bearish: Failure below 0.8600 would keep the downside bias intact. A move back below 0.8520 would expose 0.8470 again, with a break of that level opening the way towards 0.8400.

  
  

Macro Backdrop to Consider

EUR/GBP remains heavily driven by the relative policy path between the BoE and ECB. The ECB has kept rates unchanged, but with September hike risk still live as energy and inflation pressures remain elevated. The BoE’s more hawkish voting split, however, helps explain why sterling has held up relatively well against the euro.

House View

We remain mildly bearish while EUR/GBP trades below 0.8600 to 0.8620. The short term rebound should be respected, but the pair still needs to reclaim that zone before the outlook becomes more constructive.

EUR/GBP: AUGUST ‘25 - PRESENT

EUR/USD

EUR/USD is trading around 1.1528 after a sharp recovery from the 1.1350 area. The pair has broken back above 1.1400 and is now testing the upper end of its recent corrective channel.

Momentum has improved, with RSI back above neutral territory, but the pair is approaching a technically important resistance zone between 1.1550 and 1.1600. The next move around this area will be important for whether the rebound continues or fades.

Potential Scenarios

• Bullish: A clean break above 1.1550 to 1.1600 would strengthen the recovery and could open the way towards 1.1700 and then 1.1800. This would suggest the recent downside move has started to unwind more meaningfully.

• Bearish: Failure around 1.1550 to 1.1600 would keep the pair vulnerable to renewed selling pressure. A move back below 1.1430 would weaken the recovery and could bring 1.1350 back into focus.

  
  

Macro Backdrop to Consider

EUR/USD has benefited from softer dollar momentum following the sharp fall in USD/JPY and lower oil prices as US and Iran tensions paused. However, the dollar is not without support, as tariff related inflation risks and the Fed’s cautious stance continue to keep US yields in focus. For the euro, the ECB remains alert to the inflation impact of energy prices, with July inflation ticking up to 2.9%.

House View

We are cautiously bullish in the short term while EUR/USD holds above 1.1430, but the 1.1550 to 1.1600 area is key. A failure there would leave the move looking corrective rather than a full trend reversal.

EUR/USD: AUGUST ‘25 - PRESENT

USD/JPY

USD/JPY is trading around 157.06 after a very sharp reversal from above 163.00. The move has broken several key short term support levels, including 162.00 and 160.00, and has pushed RSI deep into oversold territory.

The technical picture has changed meaningfully. While a short term rebound is possible after such an aggressive move lower, the break beneath 160.00 has weakened the previous bullish structure and brought intervention risk firmly back into the market narrative.

Potential Scenarios

• Bullish: A recovery back above 158.50 would ease immediate downside pressure, while a move above 160.00 would suggest the pair is attempting to stabilise. A stronger break above 162.00 would be needed to restore confidence in the prior uptrend.

• Bearish: Failure to recover 158.50 would keep the yen recovery intact. A move below 156.00 would expose 155.00, with further downside possible if intervention pressure and expectations of tighter BoJ policy continue to build.

Macro Backdrop to Consider

USD/JPY is now being driven less by the old carry trade narrative and more by policy intervention. Reuters reported that Tokyo and Washington took joint action to arrest the yen’s slide, following extreme yen weakness near multi decade lows. The BoJ has also left the door open to an earlier rate hike, making further yen volatility likely.

House View

We have shifted to neutral to mildly bearish. The long term rate differential still supports USD/JPY, but the break below 160.00 and clear intervention risk make the upside far less attractive. Near term rallies may now be sold unless the pair can reclaim 160.00 to 162.00.

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.