The USD begins the North American session on a lower note. The focus is on three major currency pairs: EUR\/USD, USD\/JPY, and GBP\/USD.<\/p>\n
From a technical perspective, each pair is analysed in terms of bias, targets, and risk levels. The analysis helps in understanding the potential movements of these pairs in the market.<\/p>\n
With the US dollar starting the week on the back foot, we are looking at opportunities against it. The market is reacting to last week\u2019s US inflation data, which came in at 2.8% for July, missing expectations and signaling that Federal Reserve rate cuts could be back on the table for early 2026. This reinforces a bias for selling dollars, so derivative strategies should focus on buying puts on the dollar index or calls on opposing currencies.<\/p>\n
For the EUR\/USD, we see a clear break above the 1.1500 psychological level. This move is supported by the European Central Bank maintaining a relatively hawkish tone in its last meeting, creating a policy divergence with the Fed. Traders could look at buying call options with a strike price around 1.1600, targeting a move higher in the coming weeks while defining their risk.<\/p>\n
The GBP\/USD is also showing notable strength, pushing towards its highs for the year. UK wage growth data released earlier this month came in surprisingly strong at 4.5%, suggesting the Bank of England will be one of the last major central banks to pivot to rate cuts. This makes long GBP\/USD futures an interesting proposition for traders anticipating continued dollar weakness.<\/p>\n
Looking at USD\/JPY, the pair is falling sharply as a weaker dollar is compounded by a strengthening yen. There is increasing chatter that the Bank of Japan, after seeing stable inflation in Tokyo last month, may finally move to abandon its negative interest rate policy at its September meeting. Buying put options on USD\/JPY could be an effective way to position for a potential sharp decline if the BoJ signals a policy shift.<\/p>\n
This market environment is reminiscent of what we saw in late 2023, when a shift in Fed expectations triggered a multi-month slide in the dollar. That period saw sustained trends develop, which was profitable for those holding positions through futures or longer-dated options. Given this historical context, we should be prepared for volatility to increase from its summer lows.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" The USD opens lower; technical analysis highlights key movements in EUR\/USD, USD\/JPY, and GBP\/USD pairs.<\/p>\n","protected":false},"author":62,"featured_media":16965,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-28965","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=28965"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28965\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16965"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=28965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=28965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=28965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}