Created on August 20, 2025

• The euro has been slightly positive during the early hours here on Tuesday, as we continue to see a lot of noisy behavior coming out of the Forex markets, especially as traders are trying to get an idea as to where monetary policy is going to be with the Americans.
• After all, the Fed Funds Futures markets are pricing in an almost guaranteed 25 basis point rate cut coming out all the FOMC meeting on September, but I do think you also have to keep in mind that the real question will be whether or not Jerome Powell sounds dovish later this week in his Jackson Hole Symposium speech.

Technical Analysis

The technical analysis for this market is somewhat neutral at the moment, as the 1.16 level underneath is going to offer a certain amount of support, right along with the 50 Day EMA sitting there. The 50 Day EMA of course is an indicator that a lot of people will be watching closely, as it has behaved for the most part like a trendline. As long as that ends up being the case, then I think you have a certain amount of buying pressure underneath. Furthermore, we have been in an uptrend, but I would also point out that we had seen a major double top near the 1.18 level just a few weeks ago. In other words, I think it makes sense that we get a bit of consolidation in this area.

We are at the end of the summer vacation season when things culminate and typically there is a lack of volume. The end of August is pretty miserable for trading at times, just simply due to the fact that the bigger players are there. However, we have enough going on at the moment that I think we will continue to see a lot of choppiness and attention paid to this pair but given enough time it should give us an idea as to where the US dollar is going overall. If we were to break down below the 1.15 level in this market, I suspect that the US dollar will not only strengthen against the euro to reach the 1.12 level, but it will also probably break a lot of other currencies.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

The (ETHUSD) price settled low in its last intraday trading, after breaking the key support at $4,150, amid the continuation of the negative pressure due to its trading below EMA50, and under the dominance of bearish correctional wave on the short-term basis and its trading alongside a bias line that reinforces the stability of this track, especially with the emergence of the negative signal on the (RSI), after it succeeded in offloading its oversold conditions in its previous trading, opening the way for recording more of the losses.

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The EURJPY pair didn’t settle above 172.00 level, affected by stochastic exit from the overbought level, forming some of the bearish correctional waves and its stability near 171.65.

The continuation of the negative pressures will force it to suffer more of the losses, to expect attacking 170.45 level, to extend the losses towards 169.80 which might form a neckline for the negative double top level, therefore, we recommend monitoring the price behavior when reaching this level to detect the main trend in the upcoming trading.

The expected trading range for today is between 170.45 and 172.30

Trend forecast: Bearish

Created on August 20, 2025

• The British pound initially trying to rally during the trading session here on Tuesday but has given back those gains pretty quickly.
• Ultimately, I think you’ve got a scenario where traders are going to look at this through the prism of a potential downtrend tying to form.
• And I am seeing this across the Forex world where the US dollar is supposed to be crumbling and losing its status as the world’s reserve currency is basically fighting tooth and nail with a lot of these currencies.

I’m Not Shorting, But…

Now, having said that, the British pound is not necessarily where I’m looking to short if I’m going to start trading in favor of the US dollar. But if this one gives it up, everybody else doesn’t stand a chance because the British pound has been the all-star, if you will, of currency trading recently.

After all the market is very strong for the British pound until recently. And while other currencies did fairly well, the British pound not only did well on the way up, but it did well on the way down when the U S dollar was destroying everything in its site, the British pound did okay. It fell less than others. So, I watched this chart very closely as an indicator on how the US dollar is going to do because of its show strength here. It’s going to destroy Canadian dollars, New Zealand dollar, Australian dollar, Japanese yen, the euro to a point, Swiss franc to a point. But we are seeing a bifurcation between Europe and Asia.

There are some outliers out there like the Mexican peso that might do okay just because of the interest rate differential between it and the US dollar, but the British pound is the harbinger of everything at this point. If we can break above the 1.36 level in this pair, then I think the US dollar really starts to suffer at the hands of pretty much everybody. So while we are still very much in an uptrend, it’s not lost on me that we are struggling at the same place yet again. Jackson Hole Symposium speeches at the end of the week could be the final nail in the coffin of whichever direction we pick. Right now, the dollar looks like it’s not quite ready to give up.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

See today’s full USD/JPY forecast with chart setups and trade ideas.

AUD/USD: Monthly Employment Earnings to Spotlight the RBA

Turning to the AUD/USD pair, investors are bracing for crucial wage data. Wage growth trends are a key consideration for the RBA and monetary policy decisions.

Rising wages may fuel consumer spending and demand-driven inflation. A higher inflation outlook could reduce expectations of a Q4 RBA rate cut, lifting demand for the Aussie dollar.

On the other hand, softer wage growth could dampen demand-driven inflation, supporting further RBA rate cuts.

According to the ABA, total wages and salaries paid by employers rose 0.9% month-on-month in March and by 5.8% year-on-year. The Wage Price Index, a separate wage growth indicator, rose 0.8% quarter-on-quarter in the second quarter, down from 0.9% in the previous quarter.

AMP Head of Investment Strategy and Chief Economist Shane Oliver projected a November rate cut and further policy easing in H1 2026, stating:

“We continue to see the RBA cutting rates again in November, February and May taking the cash rate down to 2.85%.”

Will today’s wage data confirm Oliver’s forecast—or surprise markets?

Beyond the data, the People’s Bank of China’s loan prime rate decision could influence AUD/USD trends. Markets predict the PBoC will leave the one-year and five-year LPRs at 3% and 3.5%, respectively. A surprise cut to LPRs could boost domestic demand, potentially improving Aussie trade terms.

For context, Australia has a trade-GDP ratio of over 50%, with roughly one-third of shipments bound for China.

AUD/USD: Key Scenarios to Watch

• Bearish AUD/USD Scenario: Softer wage growth or dovish RBA guidance. These factors could push AUD/USD below the $0.6450 support level, potentially exposing the crucial $0.6400 support level.
• Bullish AUD/USD Scenario: Stronger wage growth or hawkish RBA rhetoric. These factors could send AUD/USD above the 200-day EMA, bringing the 50-day EMA into play.

Explore our full AUD/USD analysis, including key trends and trade data, here.

AUD/USD Daily Outlook: Fed Policy Guidance and Rate Differentials

Later today, Fed speeches will draw interest as the Jackson Hole Symposium looms. Recent US inflation-linked data have affected Fed rate cut bets and US-Aussie rate differentials.

Hawkish Fed signals, calling for a delay to interest rate cuts, would widen the rate differential in favor of the US dollar. A wider rate differential could push AUD/USD toward the $0.6400 support level. If breached, the $0.63500 mark would be the next key support level.

Conversely, increased support for a September Fed rate cut and cuts in the fourth quarter would narrow the rate differential. A narrower rate differential may send AUD/USD above the 200-day EMA, paving the way to the 50-day EMA.