The US dollar is strengthening across major currencies, reaching new highs except against the AUD.<\/p>\n
The EURUSD pair has dropped below key moving averages, hitting lows at 1.16019, with targets now at last and prior weeks\u2019 lows of 1.15816 and 1.15885.<\/p>\n
For the USDJPY, it has regained ground above its 200- and 100-hour moving averages, targeting a swing area between 147.95 and 148.166, and could see further gains if it breaks through this range.<\/p>\n
The GBPUSD has fallen below its 100-hour moving average, with a crucial downside target at the 100-day moving average of 1.34214. Falling below this level again would strengthen the bearish outlook.<\/p>\n
In contrast, the USDCAD is bouncing back from support levels around 1.38127 and 1.38315, trading near 1.3860. On the upside, it aims for the August high at 1.38785, with further resistance at 1.39229. A shift towards sellers would require breaking below 1.38127 and the rising 100-bar moving average on the 4-hour chart at 1.38018.<\/p>\n
The dollar buying we are seeing is a direct reaction to the Fed’s firm stance following last Friday’s hawkish comments. Markets are repricing interest rate expectations, with the CME FedWatch tool now showing traders are pricing out any rate cuts for the remainder of 2025. The most recent US jobs report from early August 2025 showed a robust 215,000 jobs added, reinforcing the case for the Fed to remain patient.<\/p>\n
For EURUSD, the decisive break below the 1.1640 area looks set to continue, especially with the Eurozone’s struggles. Last week\u2019s flash Eurozone manufacturing PMI registered a disappointing 45.2, signaling continued contraction in the industrial sector. We should consider put options or short futures positions targeting the 1.1581 low from two weeks ago.<\/p>\n
The situation for GBPUSD is also bearish as it struggles below the 1.3464 midpoint. The Bank of England has signaled a pause in its own tightening cycle, which contrasts sharply with the Fed’s position. A sustained move below the 100-day moving average at 1.3421 would open the door for a deeper sell-off.<\/p>\n
We are seeing strength in USDJPY as it reclaims key moving averages around 147.65. This move is driven by the widening policy gap, as the Bank of Japan recently reaffirmed its commitment to an ultra-easy monetary policy. Call options could be a strategy to play for a break of the 148.00-148.16 resistance zone.<\/p>\n
USDCAD buyers are defending the 1.3812 support level effectively, keeping the upward trend intact. A recent dip in WTI crude oil prices below $80 a barrel is also weighing on the Canadian dollar. We will watch for a test of the August high near 1.3878.<\/p>\n
This market action feels very similar to what we saw back in 2022 and 2023, when aggressive Fed tightening was the main driver. Given this environment, derivative strategies should favor dollar strength against currencies with more dovish central banks. We should expect this trend to hold until we see a significant shift in US economic data or Fed messaging.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" The US dollar gains strength widely, pressuring EUR, GBP, JPY, while AUD and CAD show resilience.<\/p>\n","protected":false},"author":62,"featured_media":16966,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-29573","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\/29573","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=29573"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/29573\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16966"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=29573"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=29573"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=29573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}