Daily Forex Pulse — August 24, 2026

FX OVERVIEW

A structurally weaker U.S. dollar remains the dominant theme, driven by fiscal concerns, long-end Treasury buybacks and dovish Federal Reserve expectations. Risk aversion linked to escalating U.S.-Iran tensions is supporting the dollar selectively, but policy-driven strength in the yen, won, koruna and yuan is keeping the broader USD trend under pressure.

MAJOR PAIRS

EURUSD — EURUSD is consolidating near 1.1680 after a 3% late-July rally, with 1.1700 acting as the key upside barrier. Fiscal concerns around the U.S. and improved relative Eurozone growth expectations support a bullish medium-term bias, although a break below 1.1640 would open 1.1624 and signal a deeper correction.

GBPUSD — Sterling remains supported mainly by dollar weakness and its attractive carry profile rather than strong domestic fundamentals. The pair is testing a triple-top resistance zone at 1.3656–1.3676; a sustained break would target 1.3735, while rejection—reinforced by an RSI reading near 71—would expose 1.3618 and 1.3572.

EURGBP — EURGBP remains under pressure near 0.8556 as geopolitical risk has increased demand for sterling’s carry and liquidity characteristics. A break below 0.8530 would confirm the bearish setup, with 0.8483 the next downside target; resistance at the 0.8585 double-top remains the key invalidation area.

AUDUSD — AUDUSD has pulled back to 0.7164 on cautious risk sentiment but remains close to its 12-week high at 0.7180. The broader bias is bullish on potential RBA tightening and persistent U.S. dollar weakness, although bearish RSI divergence and a weakening MACD argue for a near-term correction toward 0.7130, with 0.7070 the critical floor.

NZDUSD — NZDUSD is holding near 0.5975 despite weak New Zealand retail sales, confirming that broad dollar weakness is outweighing domestic data. The pair retains a bullish bias above 0.5900, with 0.6000 the immediate psychological target and 0.5845—the 200-period SMA—the key structural support.

USDJPY — USDJPY faces a bearish medium-term bias as July core CPI lifted the market-implied probability of a September BoJ hike to 82%, from 23% previously. Risk-off demand for the dollar may cushion declines, but the repricing of Japanese policy is the stronger force and argues for renewed yen appreciation.

EURJPY — EURJPY retains a modest bullish technical structure above its 50- and 100-day moving averages at 184.72 and 185.14, respectively, but upside is constrained by BoJ tightening expectations and intervention risk. A break above 187.00 would carry high intervention risk, limiting the attractiveness of chasing the cross higher.

USDCNY — The PBoC set the fixing at 6.7841, above both the prior fixing and market expectations, indicating continued management of the yuan rather than an unrestrained appreciation campaign. The bias is modestly lower for USDCNY while the dollar weakens, but the PBoC is likely to contain the pace; technical support sits at 6.72–6.70.

USDKRW — USDKRW has fallen toward 1380 on heavy exporter and corporate dollar selling, a weaker U.S. dollar and a 56% year-on-year export surge led by semiconductors. The near-term bias remains lower, supported by expectations of a BoK hike to 3.00%, although oversold technical conditions, elevated oil prices and high U.S. yields raise pullback risk.

USDSGD — USDSGD remains bearish after trading near 1.2682–1.2700, with UOB looking for 1.2670 over the next one to three weeks. The pair should remain capped below 1.2750; the near-term range is 1.2680–1.2715, and a break above 1.2750 would invalidate the bearish view.

CENTRAL BANK WATCH

  • Bank of Japan: Stronger July core CPI has sharply increased expectations of a September rate hike, with an 82% implied probability. Further hawkish guidance from Deputy Governor Ryozo Himino would reinforce yen strength and pressure USDJPY and EURJPY.
  • European Central Bank: Markets assign a 95% probability to a September rate hike, supporting the euro. However, ECB dovishness and the possibility that the full tightening cycle is already priced limit the upside beyond 1.1700 in EURUSD.
  • Reserve Bank of Australia: Persistent trimmed-mean inflation near 3.6% keeps a September or fourth-quarter rate hike in play. The upcoming CPI release is the key test of the AUD’s bullish narrative.
  • Bank of Korea: Markets expect the policy rate to rise to 3.00%, creating a positive carry and capital-flow impulse for the won. The MPC’s guidance on further tightening will determine whether USDKRW can extend its decline.
  • People’s Bank of China: The latest fixing shows continued two-way management and a preference for yuan stability. Beijing is supporting confidence without allowing rapid appreciation.
  • Federal Reserve: The dovish tone and concerns over long-term U.S. fiscal credibility continue to weigh on the dollar. U.S. PCE inflation and Fed Chair Kevin Warsh’s Jackson Hole speech are the next major catalysts for rate expectations.

MACRO DRIVERS

  • U.S. fiscal credibility is a persistent dollar headwind: the Treasury’s larger long-dated bond buybacks are undermining confidence in long-term yield formation and reinforcing structural USD selling.
  • Policy divergence is broadening: expected BoJ and BoK tightening, a possible RBA hike and imminent CNB tightening contrast with easing or less hawkish signals elsewhere in Central Europe.
  • Geopolitical risk is producing mixed FX effects: U.S.-Iran tensions support safe-haven demand for the dollar and yen, while sterling benefits from carry demand and the euro remains comparatively vulnerable.
  • Export flows are reinforcing Asian currency strength: strong semiconductor exports and corporate dollar selling are driving KRW appreciation, while robust Chinese export conversion supports the yuan despite cautious PBoC management.

POSITIONING IDEAS

Bullish

  • Long EURUSD on dips toward 1.1640: U.S. fiscal concerns, weaker relative U.S. growth forecasts and expected ECB tightening support a move through 1.1700. A break below 1.1640 would require reducing the long bias.
  • Long AUDUSD above 0.7130: Persistent trimmed-mean inflation keeps RBA tightening risk alive, while dollar weakness supports the broader trend. A stronger CPI print could trigger a break above 0.7200 toward the 0.7280 year-to-date high.
  • Long NZDUSD toward 0.6000: The pair is holding its breakout above 0.5900 despite weak domestic retail sales, showing that the dominant catalyst is broad USD weakness.
  • Long CZK against EUR: Imminent CNB rate hikes and policy credibility provide a stronger fundamental edge than the PLN or HUF, particularly if geopolitical volatility remains elevated.

Bearish

  • Short USDJPY: The sharp repricing toward an 82% probability of a September BoJ hike is a direct bullish catalyst for the yen. Risk-off dollar demand is the principal threat to the trade.
  • Short EURGBP below 0.8530: Sterling’s carry advantage and safe-haven demand are outweighing Eurozone political and growth concerns. A confirmed break targets 0.8483.
  • Short USDSGD below 1.2750: The broader dollar downtrend and UOB’s 1.2670 target support a continuation lower, with 1.2750 the clear risk level.
  • Short USDKRW on rebounds: Exporter dollar selling, record semiconductor shipments and expected BoK tightening favor further won appreciation. Oversold conditions make entries on corrective rebounds preferable to chasing the spot decline.

This content is for informational purposes only and does not constitute financial, investment, or trading advice. Always consult a qualified financial professional before making any investment decisions.