Weekly FX Technical Analysis - 8th September 2026

This week’s FX charts show a market increasingly shaped by fiscal pressure, central bank uncertainty and renewed geopolitical inflation risk. GBP/USD has pulled back after failing to hold above 1.3600, while EUR/GBP is attempting to recover but still needs to reclaim 0.8625 before the wider picture improves. EUR/USD remains caught between ECB tightening expectations and a dollar supported by strong US jobs data, while USD/JPY has seen the clearest shift, with a sharp yen rally forcing the pair down towards 154.00 as carry trades unwind.

GBP/USD

GBP/USD is trading around 1.3525 after failing to sustain its move above 1.3600. The pair remains above the broader 1.3450 to 1.3500 support area, but momentum has softened following the rejection near 1.3650. RSI is close to neutral, suggesting the market is no longer stretched, but the short term picture has become more balanced after the recent pullback.

Potential Scenarios

• Bullish: If GBP/USD can hold above 1.3500 and reclaim 1.3600, the next upside test sits around 1.3650 to 1.3675. A break above that zone would bring 1.3800 back into focus.

• Bearish: If the pair breaks below 1.3450, the recovery would look more vulnerable, with scope for a move back towards 1.3400 and then 1.3275. A deeper break would put the wider 1.3150 to 1.3200 support region back in play.

Macro Backdrop to Consider

Sterling is being pulled between resilient domestic inflation and renewed concern around UK fiscal credibility. Recent gilt pressure and focus on John Healey’s October budget have kept markets sensitive to any suggestion of looser fiscal policy, while strong US jobs data and this week’s CPI release have revived the debate over whether the Fed may need to tighten again.

House View

Our house view is neutral to cautiously negative while GBP/USD remains below 1.3600. The pair is still holding important support, but the rejection near 1.3650 suggests sterling needs a fresh catalyst before the recovery can regain momentum.

GBP/USD: SEPTEMBER ‘25 - PRESENT

EUR/GBP

EUR/GBP is trading around 0.8585 and has continued to recover from the July lows. The pair is now testing the upper end of its short term range, with resistance building around 0.8600 to 0.8625. RSI has moved back above neutral territory, which supports the recovery, although the pair still needs to reclaim the former breakdown zone before the wider structure turns more constructive.

Potential Scenarios

• Bullish: If EUR/GBP can break above 0.8600 and then 0.8625, the next upside levels sit around 0.8650 and 0.8700. A move through those areas would suggest the recent bearish phase is starting to lose control.

• Bearish: If the pair fails around 0.8600, price could rotate back towards 0.8535 and then 0.8500. A break below 0.8500 would bring the July lows near 0.8450 back into focus.

  
  

Macro Backdrop to Consider

The euro is being supported by expectations that the ECB will raise rates again this week, with eurozone inflation rising to 3.3 percent in August, largely on energy pressure. Sterling, however, remains vulnerable to UK gilt market pressure and uncertainty around the autumn budget, leaving EUR/GBP sensitive to relative fiscal credibility as much as rate expectations.

House View

Our house view is neutral to mildly constructive while EUR/GBP holds above 0.8535. A break above 0.8625 would strengthen the case for further upside, but until then this still looks more like a recovery within a wider range than a confirmed trend reversal.

EUR/GBP: SEPTEMBER ‘25 - PRESENT

EUR/USD

EUR/USD is trading around 1.1610 after pulling back from the 1.1700 area. The pair remains above the 1.1500 to 1.1525 support zone, but the recent rally has paused as price meets resistance near the upper end of its recovery range. RSI remains slightly above neutral, suggesting momentum has not fully broken down, but the next move will depend on whether buyers can defend 1.1500 and rebuild towards 1.1700.

Potential Scenarios

• Bullish: If EUR/USD holds above 1.1500 and breaks back above 1.1700, the next target sits around 1.1800. A move through 1.1800 would suggest the broader recovery is regaining strength.

• Bearish: If the pair breaks below 1.1500, downside pressure could return towards 1.1415 and then 1.1350. A move below that region would weaken the recovery and shift focus back towards 1.1200.

  
  

Macro Backdrop to Consider

EUR/USD is caught between an ECB that looks likely to raise rates and a dollar supported by stronger US labour data. The wider risk is inflation: Brent near $100, Gulf attacks and energy driven eurozone inflation all complicate the rate outlook, while markets are waiting on US CPI to decide whether the Fed’s next move is another hike or a pause.

House View

Our house view is neutral while EUR/USD trades between 1.1500 and 1.1700. The broader recovery is still intact above 1.1500, but the pair needs a clean break above 1.1700 before the upside case becomes more convincing.

EUR/USD: SEPTEMBER ‘25 - PRESENT

USD/JPY

USD/JPY has fallen sharply and is now trading around 154.09, marking a major change in tone from the recent highs above 160.00. The pair has broken below several short term support levels and RSI is now in oversold territory. The speed of the move suggests downside momentum remains strong, although the oversold reading also raises the risk of a short term rebound if buyers step back in around the 153.00 to 154.00 area.

Potential Scenarios

• Bullish: If USD/JPY can stabilise above 153.00 and reclaim 156.00, the pair could attempt a recovery towards 158.50. A move back above 160.00 would be needed to repair the wider technical damage.

• Bearish: If the pair breaks below 153.00, the next downside target sits around 152.00 to 150.00. A move through 150.00 would represent a much deeper correction and could accelerate yen strength further.

Macro Backdrop to Consider

The yen has surged as traders unwind carry trades and price a higher probability of Bank of Japan tightening. Reuters reported that the yen reached a seven month high, strengthened around 4.5 percent from roughly 160 last week, and remains supported by BOJ hike expectations, repatriation flows and prior US Japan coordination.

House View

Our house view is bearish while USD/JPY remains below 158.50. However, with RSI now deeply oversold, chasing the move lower at current levels carries risk, and a corrective bounce would not be surprising before the next directional break.

USD/JPY: SEPTEMBER ‘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.