Five currency pairs you should be watching in August 2026

• The Federal Reserve maintains a data-dependent stance following the July FOMC hold, positioning upcoming August inflation prints (CPI and PCE) as the primary catalysts for September interest rate expectations.

• Active central bank maneuvers, including the Bank of Japan’s recent FX interventions and the Reserve Bank of Australia’s anticipated hold with a persistent hawkish bias, continue to shape global currency dynamics.

• Tactical volatility is expected to define the August market landscape as investors navigate the delicate balance between cooling inflationary pressures and evolving policy signals from major central banks.

As financial markets enter August 2026, the global central bank calendar shows a notable lull in major policy decisions, with the Reserve Bank of Australia (RBA) as the sole outlier scheduled to meet. This period of relative quiet follows a stretch of significant volatility observed toward the close of July, driven primarily by the late-month Federal Open Market Committee (FOMC) meeting, the Bank of Japan’s intervention, and a series of impactful macroeconomic data releases.

The residual momentum and shifting sentiment from these end-of-month catalysts can define the underlying market structure and set the technical tone for trading activity throughout the August session.

On Wednesday, July 29th, 2026, at the Federal Open Market Committee (FOMC) meeting, the Federal Reserve decided to maintain its benchmark interest rate at 3.50% – 3.75%. The decision highlighted growing internal debates over monetary policy trajectory, resulting in a 9–3 vote. Regional Fed Presidents Beth Hammack, Neel Kashkari, and Lorie Logan dissented, advocating for a 25-basis-point rate hike to further combat inflationary pressures.¹

The official FOMC statement emphasized that economic activity continues to expand at a solid pace, bolstered by steady capital investment and strong productivity gains, despite broader geopolitical uncertainties in the Middle East. Inflation remains above the Fed’s 2.0% target, influenced in part by energy price fluctuations and sector-specific supply shocks.²

During the post-meeting press conference, Fed Chair Kevin Warsh reinforced the committee’s commitment to returning inflation to target. Refraining from explicit forward guidance, Chair Warsh clarified that the rate hold should be viewed as a period of data-dependent evaluation rather than a formal pause, keeping future policy options open in light of incoming macroeconomic data.

The Bureau of Economic Analysis reported that headline Personal Consumption Expenditures (PCE) inflation cooled to an annual rate of 3.7% in June, down from 4.1% in May. It decreased 0.1% month over month, primarily due to lower energy prices. Core PCE—which excludes food and energy costs and serves as the Federal Reserve’s preferred inflation metric—rose 0.1% month-over-month and brought the annual rate down slightly to 3.3%. ³

Meanwhile, consumer spending grew by 0.3% over the month, driven by gains in healthcare and motor vehicles. However, spending continued to outpace personal income growth (0.2%), pushing the personal savings rate down to 2.7% as elevated costs led households to tap into their savings.

With no Federal Reserve meeting on the calendar until September 15–16, investors and market participants will turn their full attention to the upcoming August inflation reports—specifically the July Consumer Price Index (CPI) on August 12 and the July Personal Consumption Expenditures (PCE) price index on August 26.⁴ Following the Fed’s July decision to hold rates steady amid a notable 9–3 vote split, central bankers made it clear that future policy moves remain strictly data-dependent.

Because the seven-week gap between meetings leaves market participants without fresh guidance or interest rate adjustments from Fed officials, these August inflation prints may be the crucial deciding factor in market expectations.

Traders will closely examine whether cooling price pressures validate a potential rate cut at the September meeting or if sticky inflation reinforces the hawkish concerns raised by dissenting Fed presidents.

Japanese monetary authorities conducted a currency market intervention during the New York trading session on July 30, buying yen and selling U.S. dollars to pull the domestic currency back from near four-decade lows, exacerbated by high import energy costs. The unannounced intervention triggered a sharp single-day decline of approximately 2.4% in USD/JPY, directly preceding the Bank of Japan’s (BoJ) monetary policy announcement. At the conclusion of its meeting, the BoJ maintained its benchmark short-term interest rate unchanged at 1.00%, following its previous policy rate adjustment in June.

Despite holding rates steady, central bank officials maintained a hawkish stance, emphasizing that persistent upside risks to inflation and sustained currency weakness keep the door open for further monetary tightening, with market consensus pointing to a potential rate hike to 1.25% by year-end. Following the BOJ decision, USD/JPY regained some of its earlier losses, moving back up to 160.80.⁵

The Reserve Bank of Australia (RBA) is scheduled to announce its next cash rate decision on August 11, 2026, following its Monetary Policy Board meeting. According to the Australian Securities Exchange (ASX), financial markets widely anticipate the central bank will keep the official cash rate unchanged at 4.35%. This holding stance comes as recent June-quarter Consumer Price Index (CPI) data showed headline inflation cooling faster than expected to 3.8%, alongside a softening labor market, with unemployment reaching 4.4%.

Although softer inflation prints and a cooling housing market have reduced the immediate risk of further policy tightening, Governor Michele Bullock and the RBA board are expected to maintain a hawkish bias, warning that rates could still rise if underlying inflation proves persistent or reaccelerates.⁶

• The long-term weekly structure shows GBP/JPY maintaining its macro multi-year ascending channels, defined by a long-term red resistance line above and two rising blue support lines below (Support Line 1 and Support Line 2).

• Key macro drivers highlighted on the chart include the volatile period around “Japan’s elections” in April 2026, followed by an aggressive upward move initiated after “FOMC April 30” that pushed the exchange rate into major multi-year resistance.

• Recent price action reflects an accelerating sell-off, catalyzed by the combination of “FOMC July 29 and PCE data July 30” alongside reported Japanese central bank intervention (“BOJ intervention”).

• Following the unannounced currency intervention overnight, the Bank of Japan held its short-term policy rate unchanged at 1.00%, maintaining a cautious stance while signaling readiness to continue monetary tightening if inflation risks persist.

• Price action has decisively broken down from the resistance trendline and is currently pressing into the Monthly Pivot Point level (214.598), with a current print of 215.262.

• Immediate resistance levels: Long-term ascending red resistance line (218.000–219.000 range); Monthly resistance 1 (R1): 220.344.

• Immediate support levels: Monthly Pivot Point (PP): 214.598; Ascending blue Support Line 1 (208.000–209.000); Yearly Pivot Point (PP): 202.363; Macro blue Support Line 2.

• RSI (14): Positioned at 56.01 with its moving average at 60.07, sliding sharply downward toward the 50 neutral threshold as long-term bullish momentum wanes.

• Stochastic (14, 1, 3): The fast %K line (52.46) has fallen rapidly below the slow %D line (75.29), completing a clean bearish crossover out of overbought territory to signal expanding downside momentum on the weekly timeframe.

• AUD/CAD continues to trade inside a large converging channel/wedge pattern, defined by a slightly sloped upper red resistance trendline and a gradually rising lower red support trendline.

• Chart annotations (1, 2, 3) highlight consecutive potential upward exhaustion gaps within the structure, while the most recent bullish swings resulted in a “Shortfalls” below the main upper resistance line around 0.98800–0.99000.

• Price action is currently consolidating tightly around the clustered pivot levels and moving averages, trading at 0.98454.

• The 9-day EMA (0.98343) and 21-day MA (0.98349) are tightly aligned alongside the 9-day MA (0.98399), reflecting neutral, compressed near-term momentum.

• Immediate resistance levels: Monthly pivot point (P): 0.98404 (currently being tested); upper red resistance trendline (0.99000 zone); monthly resistance 1 (R1): 0.99342.

• Immediate support levels: Weekly pivot point (P): 0.98307; clustered 9/21 EMAs (0.98343–0.98399); lower red support trendline (0.97600 zone); monthly support 1 (S1): 0.97291.

• RSI (14): Flat at 51.14 with its moving average line at 49.58, straddling the 50 neutral mark and indicating a balance between buyers and sellers.

• Stochastic (14, 1, 3): The Fast %K line (67.87) has crossed above the Slow %D line (49.50), reflecting mild upside momentum within the broader range.

• The daily chart reveals a macro breakout structure where USD/CHF breached its long-term descending red resistance trendline in early June and launched a strong ascending recovery along a steep black support trendline.

• Following a surge to multi-month highs near monthly R1 (0.82127), price action experienced a sharp corrective pullback toward the weekly pivot point (0.81429) and the ascending dark blue trendline, finding buying interest above the monthly pivot point (0.80103). Today’s price action shows a strong bullish bounce, lifting the pair back to 0.81112.

• The 9-day EMA (0.81259) remains slightly above the current price, while the 9-day MA (0.81452) and 21-day MA (0.81084) are converging, reflecting a confluence of resistance as they intersect with the black trendline and the weekly pivot point of 0.81429.

• Immediate resistance levels: weekly pivot point (P): 0.81429; 9-day EMA (0.81259) / 9-day MA (0.81452); weekly resistance 1 (R1): 0.82127; long-term upper swing targets (0.83000).

• Immediate support levels: 21-day MA: 0.81084; ascending dark blue support trendline; Monthly Pivot Point (P): 0.80103; broken long-term red trendline (0.79800 zone); Weekly Support 1 (S1): 0.78811; macro green ascending support line (0.78000).

• RSI (14): Currently reading 51.93 with its signal line at 58.14, resetting back into neutral territory following a pull-back from overbought conditions above 60.00.

• Stochastic (14, 1, 3): The fast %K line (44.62) has turned upward above the slow %D line (38.01), generating a bullish crossover in lower-neutral territory to signal emerging upside momentum.

• The macro daily structure shows USD/CAD breaking out (“Breakout”) above its long-term descending red channel/wedge resistance in early June, following multiple historical attempts.

• Following the breakout, the pair advanced aggressively, as marked by the black ascending trendline, before consolidating within a top range (highlighted in the yellow box) below monthly R1 (1.43667).

• Recent price action shows a breakdown below the black ascending trendline, with price pulling back sharply toward the 50-day moving average (1.40533) and Weekly S1 (1.40265).

• Friday, July 31st, the candle reflects a minor intraday recovery, bringing price action to 1.40488 as buyers attempt to defend the key support cluster near 1.40000–1.40200.

• The 9-day EMA (1.40688) sits directly above the 50-day MA (1.40533), while the long-term 200-day MA (1.38562) remains firmly sloping upward well below current levels.

• Immediate resistance levels: 50-day MA: 1.40533; 9-day EMA: 1.40688; Weekly Pivot Point (P): 1.40709; Monthly Pivot Point (P): 1.40782; Weekly R1: 1.41385; Weekly R2: 1.41829.

• Immediate support levels: Weekly Support 1 (S1): 1.40265; psychological 1.40000 level; Weekly Support 2 (S2): 1.39589; Monthly Support 1 (S1): 1.39079; 200-day MA: 1.38562.

• RSI (14): Positioned at 45.32 with its signal line at 46.47, holding in lower-neutral territory following the recent sell-off from overbought conditions.

• EUR/USD daily structure shows price continuing to trade within a widening formation as marked by the blue lines on the chart. An inverted complex head-and-shoulders pattern attempt began in January 2026, as marked by blue arcs and the red downward-sloping neckline.

• The chart highlights key structural developments, including the early-year “Gap - War start” spike, an underlying long-term horizontal blue support zone, and a recent “Exhaustion gap” push following a positive divergence (+ Div) signal on Stochastics.

• Following the FOMC decision and the PCE release in July 2026, price action staged a strong short-term expansion off the support region (1.13000–1.13400), breaking above the 9-day EMA (1.14433), the 21-day MA (1.14241), and the weekly Resistance 2 (R2) at 1.14805. The upside move reached 1.1530, where it encountered resistance.

• At present, the daily candle shows a pullback to 1.14863, meeting resistance just below the 1.15000 round-number handle and the overhead neckline, which intersects with monthly R1 of 1.1616.

• The 9-day EMA (1.14433) has completed a bullish crossover above the 21-day MA (1.14241), confirming an ongoing short-term shift in momentum toward buyers.

• Immediate resistance levels: Weekly resistance 2 (R2): 1.14805; Monthly pivot point (P): 1.14704; 1.15000 psychological handle; main descending red resistance line (1.16000 zone); monthly resistance 1 (R1): 1.16162.

• Immediate support levels: Weekly resistance 1 (R1): 1.14255; 9-day EMA: 1.14433; 21-day MA: 1.14241; Weekly pivot point (P): 1.13947; weekly support 1 (S1): 1.13397; long-term blue horizontal support line (1.13100); weekly support 2 (S2): 1.13089; monthly support 1 (S1): 1.12760.

• RSI (14): Currently positioned at 55.79 with its moving average line at 46.52, climbing firmly back above the 50 neutral threshold to signal expanding bullish momentum.

• Stochastic (14, 1, 3): The Fast %K line (72.42) has moved above the Slow %D line (85.45) in overbought territory, following a clean bullish reversal off oversold levels that confirmed the + Div setup.

In summary, August 2026 represents a critical phase of data-dependent evaluation for global central banks following the heightened volatility observed at the close of July. With the Federal Reserve’s policy calendar vacant until mid-September, market participants will pivot their focus to incoming inflation metrics, specifically the CPI and PCE reports, which serve as the primary catalysts for shifts in interest rate expectations. Concurrently, the Bank of Japan’s active currency interventions and the persistent hawkish biases maintained by institutions like the RBA highlight a continued struggle to balance economic cooling with inflationary pressures. This environment suggests that tactical volatility will remain a dominant characteristic of the currency landscape throughout the month.

Footnotes

^{1 -} https://www.federalreserve.gov/newsevents/pressreleases/monetary20260617a.htm

^{2 -} https://www.federalreserve.gov/newsevents/pressreleases/monetary20260617a.htm

^{3 -} https://www.google.com/url?q=https://www.bea.gov/news/2026/personal-income-and-outlays-june-2026

^{4 -} https://www.google.com/url?q=https://www.bea.gov/news/2026/personal-income-and-outlays-june-2026

^{5 -} https://www.bloomberg.com/news/articles/2026-07-31/boj-data-suggest-japan-intervention-of-about-8-45-trillion-yen

^{6 -} https://www.bloomberg.com/markets/economic-calendar