Daily Forex Pulse — August 7, 2026

FX OVERVIEW

FX is being driven by a sharp repricing of U.S. monetary policy after the 23K payroll contraction versus 80K expected, which weakened the dollar and lifted EURUSD, GBPUSD and USDJPY volatility. That dovish shock is being countered by U.S.-Iran tensions, higher oil prices and safe-haven demand, while official intervention risk is capping yen weakness and reinforcing downside pressure on several dollar crosses.

MAJOR PAIRS

EURUSD — The pair rallied toward 1.1560–1.1570 after the weak U.S. payrolls report reduced September Fed hike pricing to roughly 44–58%, triggering broad dollar selling. The rebound remains fragile: resistance at 1.1560–1.1565 is reinforced by the Ichimoku cloud and descending trendline, while a failure there would expose 1.1470 and 1.1445; near-term bias is cautiously bullish but vulnerable to a hawkish Fed reversal.

GBPUSD — Sterling rose toward 1.3500–1.3509 as the payroll shock weakened the dollar, but the move lacks a domestic catalyst and remains constrained by BoE dovishness and October budget concerns. Failure to sustain 1.3500–1.3507 would favor a pullback toward 1.3417, with the broader bias still fragile to bearish despite the short-term dollar-driven rebound.

USDJPY — USDJPY is consolidating near 158.00 as U.S. yield support and weak Japanese household spending compete with the threat of renewed U.S.-Japan intervention. Resistance at 159.61 and 160.66 is strategically important; any rally toward those levels carries elevated reversal risk, leaving the pair range-bound with a capped upside bias.

AUDUSD — The pair remains above its 200-day SMA at 0.6923, but persistent dollar strength, higher oil prices and Middle East tensions have limited upside. Resistance at 0.6966 and 0.7000 remains decisive; a break below 0.6923 would target 0.6870, while only a sustained move above 0.7074 would restore a stronger bullish structure.

NZDUSD — NZDUSD is range-bound near the 0.5860 pivot as the RBNZ’s hawkish stance offsets safe-haven dollar demand. A break above 0.5900, the June high and weekly range ceiling, would signal renewed upside; until then, the bias is neutral-to-bearish ahead of U.S. labor data.

USDCHF — USDCHF is retreating toward 0.8100 as the post-rally dollar momentum fades and the franc retains safe-haven support. A break below 0.8075, followed by 0.8055–0.8060, would extend CHF gains, while only a strong U.S. jobs outcome would reopen 0.8124 and 0.8175.

USDCAD — USDCAD trades near 1.4023, below its 20-period EMA at 1.4062, as resilient Canadian employment expectations support the loonie. The pair retains longer-term upside risk through the bullish flag, with 1.4076 opening 1.4200, while 1.3902 is the key downside support; direction will depend heavily on the relative strength of U.S. and Canadian wages and payrolls.

USDCNY — The PBOC fixed USD/CNY at 6.7904, above both the previous fixing and Reuters’ 6.7548 consensus, signaling a controlled tolerance for yuan depreciation. The modestly weaker fixing supports a mildly bullish USD/CNY bias and raises the risk of greater volatility if capital-outflow or export concerns intensify.

USDKRW — The won is outperforming regional currencies as strong semiconductor demand improves Korea’s terms of trade and supports export flows. Coordinated intervention involving South Korea, the United States and Japan adds a further dollar-negative impulse, making short USD/KRW the clearest Asia FX expression of today’s news.

CENTRAL BANK WATCH

• Federal Reserve: The 23K payroll loss versus 80K expected sharply reduced near-term Fed hike expectations and triggered a broad dollar selloff. The market remains highly sensitive to any subsequent data rebound or hawkish Fed communication.
• Bank of England: Policy expectations remain restrained as fragile UK growth and budget uncertainty limit the scope for a sustained sterling rally.
• ECB: The ECB retains a cautious posture, with only one rate hike expected this year. Its limited hawkish credibility constrains EURUSD upside despite the U.S. data shock.
• Reserve Bank of New Zealand: The RBNZ remains firmly hawkish, providing NZD with a relative rate-support cushion even as risk sentiment weakens.
• People’s Bank of China: The above-consensus USD/CNY fixing indicates deliberate, gradual yuan depreciation management rather than a fully market-determined setting.
• Japan, United States and South Korea: Recent coordinated FX intervention demonstrates that authorities are prepared to counter excessive dollar strength, particularly against the yen, creating a material ceiling for USDJPY and USDKRW.

MACRO DRIVERS

• U.S. labor-market repricing: The payroll shock has undermined confidence in U.S. economic resilience and reduced Fed tightening expectations, pressuring the dollar across major pairs.
• Geopolitical inflation risk: U.S.-Iran tensions and threats to the Strait of Hormuz have pushed oil toward $82 per barrel, reviving inflation concerns and supporting intermittent safe-haven dollar demand.
• Official intervention: Coordinated intervention has strengthened the yen and won while making dollar rallies more vulnerable to abrupt reversals.
• Trade and capital flows: Semiconductor demand is improving Korea’s external balance and supporting KRW, while China’s above-consensus fixing suggests policymakers are balancing export competitiveness against capital-outflow risks.

POSITIONING IDEAS

Bullish

• Long EURUSD — The 23K payroll contraction has materially reduced Fed hike expectations and weakened the dollar. Initial upside is capped at 1.1560–1.1565, but a clean break would improve the medium-term setup.
• Long USDCHF downside / long CHF — Fading dollar momentum, safe-haven demand and weak U.S. labor data favor a move through 0.8075 toward 0.8055–0.8060.
• Short USDKRW — Record semiconductor demand is improving Korea’s terms of trade, while coordinated intervention adds sustained pressure to the dollar.
• Long NZDUSD on a break above 0.5900 — The RBNZ’s hawkish stance provides a stronger domestic policy anchor than the pair’s current consolidation suggests.

Bearish

• Short AUDUSD below 0.6923 — Dollar safe-haven demand, oil-driven inflation concerns and failure near 0.7000 leave the pair exposed to 0.6870.
• Short GBPUSD below 1.3500–1.3507 — Sterling’s rebound is largely a function of dollar weakness, while BoE dovishness and UK fiscal uncertainty argue against sustained upside.
• Short USDJPY into 159.61–160.66 — Intervention risk is explicit and authorities have already demonstrated a willingness to act, making rallies toward these levels vulnerable to sharp reversals.
• Short USD/CNY bias — The PBOC is permitting gradual yuan weakness, but its discretionary fixing also signals active management; position size should reflect the risk of policy-driven volatility.