Sterling Sinks to 1.3200 as Hawkish Fed and Robust U.S. Data Trigger Renewed Selling

Traders' Opinions

Summary:

The British Pound continues its downward spiral against the US Dollar, pressured by strong U.S. economic data and the Federal Reserve’s hawkish stance, with technical signals warning of further declines as the market reprices interest rate expectations.

SELL GBPUSD

Close Time

CLOSED

1.32300

Entry Price

1.28630

1.38800

1.33219 +0.00014 +0.01%

344.3

Pips

Loss

1.28630

1.35743

Exit Price

1.32300

Entry Price

1.38800

The British Pound extended its losing streak for the sixth consecutive session on Thursday, plunging to the 1.3200 handle against the U.S. Dollar during the European trading session. The GBP/USD pair remains under intense selling pressure, with the U.S. Dollar holding firm near a two-month high as measured by the U.S. Dollar Index (DXY), which remains elevated near the 100.00 mark following a string of strong U.S. economic data and hawkish rhetoric from Federal Reserve Chair Jerome Powell.

Investors are rapidly unwinding their expectations for a September rate cut from the Federal Reserve after the latest macroeconomic data painted a picture of a resilient U.S. economy. The sharp repricing of rate expectations has reinforced dollar strength, dragging the Pound and other major currencies lower in the process.

The turning point in sentiment came after the U.S. Bureau of Economic Analysis revealed that the American economy grew at an annualized pace of 3% in the second quarter, surpassing consensus forecasts of 2.4%. This marks a dramatic rebound from the first quarter, where GDP had contracted by 0.5%. The acceleration in growth, coupled with improving labor market conditions, has given the Fed renewed confidence to hold interest rates steady.

Adding to the bullish tone for the U.S. Dollar was a surprisingly strong report from ADP, which showed the private sector added 104,000 new jobs in June, comfortably beating the expected 78,000. This followed a weaker reading in May, when the workforce contracted by 23,000, and has now raised questions about whether the earlier weakness was simply a one-off rather than a trend.

Fed Chair Jerome Powell reinforced this sentiment during his latest public remarks, stating that the U.S. economy remains in a “solid position” and that inflation, while “somewhat above target,” does not yet justify a change in the current policy stance. Powell’s assertion that the current rate setting is appropriate has dealt a blow to dovish market participants who were banking on a September rate cut. According to the CME FedWatch tool, the probability of a September rate cut has dropped to just 43.2%, down sharply from 63.3% earlier in the week.

This hawkish pivot from the Fed has created a widening divergence between the U.S. and the United Kingdom. While the Federal Reserve appears content to wait and observe further data, the Bank of England remains in a far more precarious position. Britain’s economic recovery continues to be uneven, hampered by sticky inflation, soft business investment, and rising consumer debt burdens. With the UK economy at risk of stagnation, the Bank of England is navigating an increasingly narrow path between keeping inflation under control and avoiding a deeper economic slowdown.

Technical Analysis

The divergence in economic fundamentals and policy outlooks is now being starkly reflected in the charts. The GBP/USD pair has not only lost ground but has also broken key technical structures that previously supported the bullish narrative. The pair has decisively fallen below the ascending channel that had been intact since mid-April, marking a significant shift in market sentiment. This break is not just a technical breach but a confirmation that sellers are now firmly in control.

The breakdown from this structure, coupled with the pair’s continued trading below the 50-day Exponential Moving Average, has intensified bearish pressure. Price action has also struggled to gain traction after testing a previously identified bearish order block near the 1.34166 level, which has now been validated as strong resistance. The rejection from this area only underscores the dominance of sellers in the current market environment.

While short-term technical indicators such as the Relative Strength Index suggest the pair may be entering oversold territory, any rebound is likely to be shallow and corrective in nature. The most probable scenario from here is a brief pullback into the 1.32700 to 1.33000 zone — potentially a retest of broken support — followed by a resumption of the downtrend. If the bearish momentum continues, the pair is likely to test the 1.30300 level in the coming sessions, with deeper downside potential extending toward the 1.28630 area.

TRADE RECOMMENDATION

SELL GBPUSD

ENTRY PRICE: 1.3230

STOP LOSS: 1.3880

TAKE PROFIT: 1.28630

Risk Warnings and Disclaimers

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Gerik

Economic

Forex

Summary:

On 31 July 2025, EUR/CAD reversed higher from a cluster of strong support near 1.5950, supported by the 20‑day moving average and 38.2% Fibonacci retracement of the May–June rally...

BUY EURCAD

Close Time

CLOSED

1.58500

Entry Price

1.61000

1.58000

1.61201 -0.00037 -0.02%

70.8

Pips

Profit

1.58000

1.59208

Exit Price

1.58500

Entry Price

1.61000

Overview

EUR/CAD bounced from around 1.5950, a confluence of support formed by the previous monthly high, 20‑day MA, and the 38.2% Fibonacci retracement level. From there, the pair initiated a fresh impulse wave (minor wave iii of intermediate wave 3), indicating renewed buying interest and structural bullishness into 1.6100 and possibly beyond toward 1.6150.

Market Sentiment

Institutional data reveals ~67% net long EUR and ~80% net short CAD, boosting confidence in EUR/CAD upside potential and hinting at a potential short squeeze as retail remains heavily short (87%) a classic contrarian bullish setup. Investing.com still sees mixed short- to medium-term signals, but technical consensus leans bullish on weekly to monthly frames.

Technical Analysis

EUR/CAD rebounds fromsupport aiming for 1.6100/1.6150 upside?_1

EUR/CAD has clearly broken above a descending trendline and retested it successfully, indicating shift from prior bearish consolidation to bullish continuation.The pair is approaching resistance at 1.6100, with broader supply area at 1.6110–1.6150 where prior sellers might reemerge.

RSI and stochastic readings on shorter frames confirmed oversold bounces near 1.5950; momentum now supports further upside toward 1.6100. MACD and momentum profiles on daily frame favor continuation.

Trading Recommendation

Entry (limit buy): 1.59 (just above the support cluster and fib retracement zone)

TP1: 1.585 (initial resistance + round number)

TP2: 1.6150 (higher resistance band, Fibonacci extension zone)

Stop Loss: below 1.58, just under the support base around 1.5950

Risk Warnings and Disclaimers

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Gerik

Economic

Forex

Summary:

On 31 July 2025, AUD/JPY staged a strong rebound off a key support zone near ¥95.55, buoyed by diminishing yen strength and risk-on sentiment...

BUY AUDJPY

Close Time

CLOSED

96.900

Entry Price

98.000

96.000

103.304 +0.028 +0.03%

90.0

Pips

Loss

96.000

Exit Price

96.900

Entry Price

98.000

Overview

AUD/JPY reversed from the crucial support band around ¥95.55, which coincides with the upper 20‑day moving average and ~38.2% Fibonacci retracement of June’s rally. This level also aligns with the rising trendline from May, offering a confluence of technical support. A dovish tone from the Bank of Japan amid rising inflation forecasts has weakened the yen further, supporting the rebound in AUD/JP.

Market sentiment

Sentiment indicators from platforms like Investing.com show widespread bullish bias across multiple timeframes, identifying AUD/JPY as a “Strong Buy” via moving averages and technical indicators. Those contributors also highlight a bullish market structure shift on H4 and weekly charts, reinforcing confidence in upside momentum.

Technical analysis

AUD/JPY is likely headed toward resistance at ¥97.40, the high recorded in February that capped the previous leg up. The pair is consolidating above ¥97.41 in a continuation pattern; breaking that level would open a path toward the 61.8% projection (~98.23) of a prior swing.

RSI remains above 50, indicating bullish momentum even during consolidation, while a breakout above 96.44 may lead toward the upper boundary near.

Trading recommendation

Entry (limit buy): ¥95.80–96.90, ideally on a minor pullback or retest of the support zone

Take Profit: 98

Stop Loss: 96

Risk Warnings and Disclaimers

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Gerik

Economic

Forex

Summary:

On 31 July 2025, EUR/USD rebounded modestly from a recent low near 1.1401, trading around 1.1450 in Asian session after stabilizing around the lower band. While U.S.–EU trade optimism and strong U.S. fundamentals continue to weigh on the euro...

BUY EURUSD

Close Time

CLOSED

1.14440

Entry Price

1.15000

1.14000

1.16371 +0.00007 +0.01%

44.0

Pips

Loss

1.14000

1.13998

Exit Price

1.14440

Entry Price

1.15000

Overview

EUR/USD dipped to a seven-week low below 1.1400 before recovering to the 1.1450 region in early trading. The decline was driven by a strengthening U.S. dollar buoyed by solid macro prints and a new U.S.–EU trade agreement imposing higher tariffs on European goods forcing a reversal of crowded short-Euro trades .

Market sentiment

Sentiment remains cautious. The dollar has posted its first monthly gain in 2025 (~2.1% in July), leading to a position squeeze among bearish Euro traders. Analysts from UBS, ING, and Citi expect the euro to stay under pressure near term within a broader range of 1.15–1.20.

Technical analysis

EUR/USD edges higher near 1.1450—but will bulls find follow-through?_1

Bears dominate near-term structure:

EUR/USD is hovering at the lower target zone of 1.1421–1.1381 

A break below 1.1400 opens deeper downside toward 1.1330 or 1.1200

However, corrective pullbacks toward 1.1537–1.1550 are possible, where sellers may re-enter.

Technically, short-term indicators show oversold conditions with limited upside buffer; RSI around 35–40 and MACD firmly bearish.

Trading recommendation

Despite prevailing bearish bias, a buy setup exists on corrective bounce from strong support:

Entry : 1.1425–1.1440 (near lower boundary of target zone)

TP: 1.1500 (psychological level + interim resistance)

Stop Loss: below 1.1400 (break of support zone invalidates setup)

Risk Warnings and Disclaimers

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Gerik

Economic

Forex

Summary:

On 31/07/2025, GBP/JPY repeatedly turned down near 198.65, immediately after the U.S. PMI data reinforced bullish momentum for the dollar. With the pound losing steam and yen holding firm, technical patterns suggest a corrective leg toward 196.55–197.75 is likely....

SELL GBPJPY

Close Time

CLOSED

198.550

Entry Price

197.750

198.750

207.753 +0.051 +0.02%

80.0

Pips

Profit

197.750

197.737

Exit Price

198.550

Entry Price

198.750

Overview

Following the flash U.S. PMIs, the U.S. Dollar strengthened ahead of the data release boosting DXY and pressuring GBP/JPY lower. GBP/JPY struggled to rise above 198.65, now acting as a strong resistance level. The pair has since reverted, with economies.com confirming the bearish correction bias and targeting 196.55 and 197.75 as logical downside objectives

Market Sentiment

Sentiment has flipped bearish GBP/JPY now resides below its resistance zone, and traders are positioning for further weakness. The Bank of Japan left policy unchanged at 0.50%, reinforcing yen strength amid fading pound momentum and softer UK fundamentals.

Technical Analysis

GBP/JPY fails resistance at ~198.65 post‑U.S. PMI_1

GBP/JPY declined below the 198.65 pivot confirming rejection. A breakdown beneath Fibonacci 61.8% retracement (~197.50) would cement the move toward 196.55, with further bearish targets at 197.75 if initial momentum wanes. Current form suggests a trading range 196.55–198.10, bearing a bearish outlook.

No clear Ichimoku/Stoch available, but the bearish structure aligns with triangle and channel resistance patterns observed on shorter timeframes. Price action supports continuation lower unless it reclaims 198.65 decisively.

Trading Recommendation

Entry: around 198.45–198.55, after confirming candle rejection below resistance.

TP: 197.75

Stop Loss: 198.75

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Economic

Summary:

WTI and Brent futures advanced Thursday as renewed geopolitical tensions and aggressive CTA buying rippled through the energy complex. Yet position-limit constraints and a looming supply rebound are expected to cap further upside for WTI.

SELL WTI

Close Time

CLOSED

68.954

Entry Price

62.650

71.000

58.647 +0.092 +0.16%

216.1

Pips

Profit

62.650

66.793

Exit Price

68.954

Entry Price

71.000

Fundamentals

WTI crude briefly touched the psychological US$70.00/bbl mark before paring gains. The move was underpinned by President Trump’s latest ultimatum to Russia to expedite an end to the Ukraine war, reigniting fears of supply disruptions.

At the same time, Asian refiners—facing elevated premiums for Middle-Eastern sour grades—have pivoted toward U.S. barrels, pushing the WTI-Dubai arbitrage firmly into positive territory. The narrowing spread now renders delivered-WTI cargoes more competitive than regional alternatives.

Market sources confirm that Occidental recently sold a WTI cargo to Japan’s Taiyo Oil at roughly US$3.50/bbl above Dubai’s October swap, loading in the U.S. Gulf and scheduled for October arrival. The deal underscores surging export appetite for WTI and highlights the growing role of U.S. crude in Asia’s supply slate.

Arbitrage Window Opens, U.S. Crude Gains Traction in Asia_1

Technical Analysis

Technically, WTI has cleared both the US$70.00/bbl resistance and its MA100 and MA200, producing a textbook golden-cross formation that validates near-term bullish momentum.

However, the Stochastic Oscillator has already ventured into overbought territory, flagging a short-term mean-reversion risk. Fibonacci retracements show that any technical pullback would meet layered support at 68.46 (the 38.2 % retracement), 67.80 (the 50 % handle) and 67.15 (the 61.8 % golden-ratio level), each acting as a potential reload zone for dip-buyers.

Additionally, although the 14-day Relative Strength Index (RSI) is flirting with the overbought threshold, momentum gauges suggest further room to run before exhaustion, implying that the short-covering rebound could still extend.

Trading Recommendations

Trading Direction: Sell

Entry Price: 70.00

Target Price: 62.65

Stop Loss: 71.00

Valid Until: August 15, 2025, 23:55:00

Support: 70.00/70.12/71.00

Resistance: 70.00/70.12/71.00

Risk Warnings and Disclaimers

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Tank

Economic

Forex

Summary:

The Bank of Canada and the Federal Reserve both kept interest rates unchanged. With the August 1st tariff deadline approaching, investors remain cautious, fearing the U.S. may impose tariffs on Canadian exports, a factor that could further pressure the Canadian dollar.

BUY USDCAD

EXP

EXPIRED

1.37000

Entry Price

1.38000

1.36500

1.38523 -0.00046 -0.03%

Pips

EXPIRED

1.36500

1.37793

Exit Price

1.37000

Entry Price

1.38000

Fundamentals

The Bank of Canada today maintained its overnight rate target at 2.75%, marking the third consecutive decision not to cut rates, in line with economists' and financial markets' expectations. From a yield perspective, the Canadian dollar (CAD) remains unattractive. Additionally, as the August 1st tariff deadline nears, investors remain wary of potential U.S. tariffs on Canadian exports, which could weigh further on the Canadian dollar.

The Federal Reserve kept its benchmark interest rate steady at 4.25%–4.50% in July, as widely expected. Although the policy statement leaned slightly dovish, the overall guidance remained neutral, with no clear signals on future policy direction. As a result, the U.S. Dollar Index (DXY) surged to a high of 99.9.

Technical Analysis

Regarding the daily chart, USDCAD shows an upward-expanding Bollinger Bands structure with diverging moving averages, a bullish signal. A golden cross is formed, alongside a bottom divergence, while prices are climbing along the upper Bollinger Band, the strongest uptrend structure. RSI is around 63, not yet overbought, suggesting further upside potential toward 1.39. Besides, prices have been rising within an uptrend channel in the 4H chart. As long as the trend channel's lower boundary holds, the uptrend is likely to continue. A break below could lead to a search for support. Notably, RSI briefly spiked to 77, entering overbought territory, which may trigger a pullback. Key support levels are the EMA200 and the lower Bollinger Band at 1.37 and 1.365, respectively. The strategy is to buy on dips.