The wave picture remains bearish, despite how strange that may sound. The last completed downward wave broke below the previous low, while the last upward wave failed to break above the previous high. Thus, the bears still retain the initiative in the market, although they may lose it in the near future. In my view, the 2026 bearish impulse has already run its course, and only geopolitical developments can prevent the bulls from extending their advance. Geopolitics, however, remains contradictory.

Tuesday's news background did not allow the bears to continue their sluggish attack. The only notable report of the day, the JOLTS job openings report, was unfavorable for the dollar, while geopolitical developments unexpectedly began to improve. Donald Trump frequently speaks about various hypothetical negotiations and agreements, making it difficult to take all of his statements at face value. However, today the U.S. president said that an agreement to reopen the Strait of Hormuz could be reached as early as today. So far, media outlets have not confirmed this information, and Iran denied any negotiations with the United States as recently as yesterday. Nevertheless, according to Trump, the final agreement will be concluded between the United States, Iran, and Oman. It is still impossible to know how long any new agreement would remain in force before being violated, or what its actual terms would be. Therefore, there are still few reasons for optimism. However, if Trump's information is confirmed, it will not necessarily benefit the dollar. Oil prices could continue to decline in this scenario, significantly reducing the risk of faster inflation in the United States over the coming months. As a result, the Federal Reserve may soften its hawkish stance even further.

On the 4-hour chart, the GBP/USD pair advanced to the 1.3467–1.3482 resistance level before rebounding from it. This rebound suggests a potential decline toward the 50.0% Fibonacci retracement level at 1.3409. A consolidation above the 1.3467–1.3482 level would allow traders to anticipate continued growth toward the next Fibonacci retracement level of 23.6% at 1.3538. No emerging divergences are currently observed on any indicator.

Commitments of Traders (COT) Report:

Sentiment among the Non-commercial category of traders became more bearish during the latest reporting week. The number of long positions held by speculative traders decreased by 2,824, while short positions increased by 6,429. The current balance between long and short positions stands at approximately 61,000 versus 126,000. The gap, and the bears' advantage, continues to narrow gradually. Previously, bearish dominance was unquestioned, but the changing news background has begun to challenge that view.

I still do not believe in a sustained bearish trend for the pound. In the near term, however, everything will depend not on economic indicators, Trump's trade policy, or central bank monetary policy, but on the duration, scale, and consequences of the conflict in the Middle East. In recent months, the market had shifted toward expectations of peace, but negotiations between Iran and the United States collapsed before they had truly begun. There is also no guarantee that they will resume anytime soon.

U.S. and UK Economic Calendar:

United States

• ADP Employment Change (12:15 UTC)
• ISM Services PMI (14:00 UTC)

The economic calendar for August 5 contains two releases that I consider sufficiently important. As a result, macroeconomic data may influence market sentiment during the second half of Wednesday's trading session.

GBP/USD Forecast and Trading Tips:

Short positions may be considered today if the pair rebounds from the 1.3454–1.3458 resistance level on the hourly chart, with downward targets at 1.3397 and 1.3348. Long positions may be considered if the pair consolidates above the 1.3454–1.3458 level, with an upward target of 1.3526–1.3557.

Fibonacci retracement grids are drawn from 1.3140 to 1.3557 on the hourly chart and from 1.3158 to 1.3655 on the 4-hour chart.

Global indices moved to fresh record levels as investors renewed their bets on the AI theme, driving chip stocks higher. The MSCI All-Country World index gained about 0.4% and is currently heading for another record close, while the MSCI Asia-Pacific benchmark jumped by 2.2%. Australian markets also hit highs. The move followed Tuesday's record closes for the S&P 500 and Dow Jones.

Oil and the dollar fell on prospects of a tentative US–Iran deal. Brent eased by 0.8% to roughly $78.75/bbl after Axios reported Washington, Tehran, and Oman are close to an agreement to reopen the Strait of Hormuz, with an announcement expected on Wednesday. Treasuries and gold rallied as traders pared back Fed-hike expectations.

The chip sector was again centre stage, with a mixed picture across names. SK Hynix surged by about 6.7% in Seoul, Nvidia rose by roughly 2.2% in after-hours trade after Elon Musk praised the company's Vera Rubin chips. Caution remained: SpaceX shares fell by 7.5% after the company guided to higher-than-expected AI-related spending, and Advanced Micro Devices tumbled by roughly 9% on a disappointing sales outlook.

Tech results over the past week show that capex on AI will continue to accelerate — a source of encouragement for investors, particularly because valuations now look more reasonable after the recent correction. If the first phase of the AI rally was driven by chips, the next phase may increasingly belong to platforms that actually deploy the technology. Strong earnings also reassure investors that demand for AI is intact, while lower oil and yields ease pressure on multiples.

Regarding geopolitics, a US–Iran deal would help normalize commercial traffic through the critical Strait of Hormuz and reduce the risk of renewed Middle East hostilities. That would be positive for the Fed's calculus and for interest rate dynamics, supporting equities over time.

Technically, the S&P 500 daily chart shows that the immediate task for buyers is to overcome the nearest resistance level of $7,774. Doing so would confirm further upside and open the path to $7,793. Holding above $7,810 would further strengthen bulls' positions. On the downside, buyers need to defend $7,756. A break below that level would likely push the index back to $7,737 and open the way to $7,718.

Dynamics of S&P 500, hyperscalers, and hedge fund trades

After a sharp correction, chipmakers delivered their best four-day rally since 2020. At first glance, the move looks like proof that the sell-off in the tech giants and the Magnificent Seven is exhausted. Absolute Strategy Research points to an ETF that tracks Goldman Sachs' hedge-fund positions: its decline and subsequent rebound closely mirrored the performance of hyperscaler stocks. It appears to be less a victory over geopolitics than the unwinding of overly leveraged speculative positions.

Monetary policy helps as well. Inflation expectations have collapsed over the past two months — roughly since Kevin Warsh took the helm of the Fed. An inflation forecast below the 2% target naturally reduces fears of further rate hikes. Wells Fargo notes that reopening the Strait of Hormuz could normalize global oil supplies and relieve short-term pressure on energy prices, thereby easing the inflation puzzle.

Dynamics of US inflation expectations

However, inflation does not normalize overnight. Energy pressure can ease, but broader price indices risk staying sticky, which would limit the potential decline in Treasury yields. Especially since the Fed left interest rates unchanged while an increasing number of officials have started talking about hikes, the war with Iran and the AI investment boom are feeding inflationary risks.

In the labor market, there is a kind of Goldilocks regime for now: job openings fell in June, but hiring ticked up slightly, indicating relatively stable demand for workers. This gives the Fed room to maneuver and allows it to focus on inflation. That said, the Friday jobs report for July could quickly rewrite the script. Strong numbers would strengthen the case for a September rate hike. Weak numbers, combined with last week's disappointing GDP, would give the central bank reason to remain on pause.

Thus, Wall Street's rally currently rests on three pillars at once: rumors of a deal over the Strait of Hormuz, the covering of short positions by overleveraged hedge funds, and faith in the restraint of the new Fed chair. All three supports remain assumptions rather than established facts. Has the market already booked itself an advance too early?

Technically, the daily chart shows that the S&P 500 has resumed its uptrend. The emphasis on buying should be maintained, and the target of 7,870 should be raised to 8,000.

The rally was triggered by statements from several parties involved in the negotiations. President Trump stated to reporters in Los Angeles on Tuesday that talks with Iran are "progressing very well," and Axios reported that Washington, Tehran, and Oman are close to an agreement, with the U.S. looking to announce it later on Wednesday. Qatar stated that a draft proposal has already been prepared, and U.S. Treasury Secretary Scott Bessent said that a deal to open the Strait of Hormuz could be finalized on Tuesday or Wednesday.

The mechanics of how this news affects gold are direct and well known: markets are now fully pricing in only one Fed rate hike by the end of the year, down from two just a week ago. A less hawkish monetary policy is generally positive for non-yielding precious metals, which explains the sharp price movement.

The scale of gold's decline since the start of the conflict remains a significant reminder of the depth of the correction it has undergone. Since the outbreak of the U.S.-Iran war in late February, the metal has decreased by more than one-fifth, as the conflict has fueled energy prices, heightened inflationary pressure, and increased the likelihood that rates will remain high for longer. Nevertheless, at the end of last month, Fed representatives decided to keep policy unchanged for the fifth consecutive time, although three dissenters once again expressed support for a hike.

The position of the Fed itself remains far from unanimous. Philadelphia Fed President Anna Paulson, who voted with the majority, stated on Tuesday that she keeps an "open mind" regarding the future direction of policy, as the signals on whether current policy is sufficiently restrictive remain conflicting. Separately, Kansas City Fed President Jeff Schmidt, in a prepared speech at an event in Omaha, stated that higher rates are necessary to achieve the Fed's price stability goal.

An additional, structurally important factor supporting gold in recent weeks has been Chinese institutional investors, who helped halt the decline triggered by the war and keep prices above the key threshold of $4,000 per ounce.

As for the current technical picture of gold, buyers need to overcome the nearest resistance at $4,186. This would allow targeting $4,249, above which it will be quite challenging to break through. The furthest target will be in the $4,304 range. In the event of a decline, bears will attempt to take control at $4,124. If successful, a breakout of this range could deal a serious blow to bull positions and push gold down to a low of $4,062, with the potential to reach $4,008.

According to Axios, the details are becoming quite clear. The U.S., Iran, and Oman are preparing to announce a 60-day temporary agreement. The mechanism for passage through the strait is proposed to be bilateral: vessels will be able to enter the Persian Gulf through Iran's territorial waters and exit through Oman's waters in coordination with Tehran. The financial aspect of the deal is also significant: no maritime fees or tariffs will be charged, removing one of the main sticking points of recent months, as Iran has repeatedly insisted on the right to charge for vessels passing through waters it controls.

The agreement also includes a more long-term perspective. During the first 30 days, the parties plan to clear the central shipping corridor and begin preparations for a permanent agreement. This is a crucial point: the 60-day temporary deal is intended not as an end in itself, but as a transitional phase toward a comprehensive and sustainable agreement, and the demining of the central corridor should serve as a physical, not just diplomatic, confirmation of de-escalation.

The structure of the agreement, combining immediate normalization of shipping with the threat of renewed strikes in case of a breakdown, reflects a pattern characteristic of the entire history of this conflict: periods of diplomatic progress have invariably been accompanied by parallel military threats intended to maintain pressure on Tehran right up to the moment of signing. The next 48 hours, designated by Trump himself as the timeframe for clarifying the situation, will be crucial in determining whether today's optimism translates into a real agreement or the conflict returns to the familiar cycle of escalation and negotiations.

As for the current technical picture of oil, buyers need to overcome the nearest resistance at $76.30. This will set the target at $78.70, above which it will be quite challenging to break through. The furthest target will be in the $80.51 range. In the event of an oil price decline, bears will attempt to take control at $73.79. If successful, a breakout of this range could deal a serious blow to bull positions and push oil down to a low of $71.69, with the potential to reach $69.58.

Meanwhile, a group of six researchers from Ethereum, including the president of Ethereum France, Jerome de Tychey, published a draft proposal EIP-8363 titled "Gradual Burning of Emission" on August 4. The document addresses a problem that previous protocol reforms failed to eliminate; the current emission curve continues to pay about 1.5% yield to validators even with nearly the entire supply staked. The emission mechanism is designed so that part of the rewards for validators for confirmations, block offerings, and participation in synchronization committees will be burned, with the percentage of burning increasing as the share of staked coins rises.

The current dynamics of the network explain the urgency of this proposal. The share of staked Ether has just reached a record 33.33%, with increasing concentration among holders such as Bitmine. According to the authors' calculations, if the current trend continues, by January 2028 the volume of staking could exceed 70 million coins in the worst-case scenario, accounting for more than 55% of the total supply.

The criticism of this proposal has been quite sharp. Many have opposed the limitation, warning that unpredictable staking yield could deter institutional investors and make Ethereum a less viable asset. Some solo staking experts warn that burning rewards risks pushing out smaller solo validators before it affects larger institutional structures, thereby weakening the decentralization the proposal is formally intended to protect.

As for short-term trading, the strategy and conditions are described below.

Bitcoin

Buy Scenario

Scenario #1: I will buy Bitcoin today at an entry point around $64,400, with a target of $64,800. At around $64,800, I plan to exit the buy positions and sell immediately on the bounce. Before buying on a breakout, ensure that the 50-day moving average is below the current price and the Awesome indicator is above zero.

Scenario #2: I can buy Bitcoin at the lower boundary of $64,200 if there is no market reaction to its breakout back toward $64,400 and $64,800.

Sell Scenario

Scenario #1: I will sell Bitcoin today at an entry point around $64,200, targeting a drop to $64,000. At around $64,000, I plan to exit the sell positions and buy immediately on the bounce. Before selling on a breakout, ensure that the 50-day moving average is above the current price and the Awesome indicator is below zero.

Scenario #2: I can sell Bitcoin at the upper boundary of $64,400 if there is no market reaction to its breakout back toward $64,200 and $64,000.

Ethereum

Buy Scenario

Scenario #1: I will buy Ethereum today at an entry point around $1,872, with a target of $1,885. At around $1,885, I plan to exit the buy positions and sell immediately on the bounce. Before buying on a breakout, ensure that the 50-day moving average is below the current price and the Awesome indicator is above zero.

Scenario #2: I can buy Ethereum at the lower boundary of $1,864 if there is no market reaction to its breakout back toward $1,872 and $1,885.

Sell Scenario

Scenario #1: I will sell Ethereum today at an entry point around $1,864, targeting a drop to $1,853. At around $1,853, I plan to exit the sell positions and buy immediately on the bounce. Before selling on a breakout, ensure that the 50-day moving average is above the current price and the Awesome indicator is below zero.

Scenario #2: I can sell Ethereum at the upper boundary of $1,872 if there is no market reaction to its breakout back toward $1,864 and $1,853.

The price test at 157.80 coincided with the moment when the MACD indicator began to move downward from the zero mark, confirming the correct entry point to sell the dollar. As a result, the pair decreased by more than 40 pips.

Yesterday, the dollar was left without support as a batch of American data came in mixed and offered it no backing. The labor market in June was in equilibrium, with JOLTs indicators showing little change. The manufacturing sector provided a similarly ambiguous signal, with new orders decreasing by 0.3%. The lack of clear bias in the data prevented U.S. Treasury yields from rising, depriving the dollar of momentum. The Japanese yen received support amid the dollar's weakness. Modest yields in the U.S. narrowed the rate gap with Japan and made the yen more attractive, pushing USD/JPY downward. This decline in the pair shifted the focus away from the theme of currency intervention, which the central bank actively conducted at the end of last week in coordination with the U.S. Federal Reserve. However, any significant decline in the pair will be seen as a buying opportunity, as the real reasons that pushed the yen down all this time have not disappeared.

Regarding intraday strategy, I will rely more on implementing Scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy USD/JPY today upon reaching an entry point around 157.87 (green line on the chart) with a target rise to 158.22 (thicker green line on the chart). At the level of 158.22, I intend to exit the long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from this level). It is best to return to buying the pair during corrections and significant pullbacks of USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from there.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of 157.61, with the MACD indicator in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 157.87 and 158.22.

Sell Scenarios

Scenario #1: I plan to sell USD/JPY today only after a breakout below 157.61 (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be 157.29, where I plan to exit the short position and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from this level). Sellers will return at any moment; all that is needed is any hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from there.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of 157.87 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline can be expected toward the opposite levels of 157.61 and 157.29.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

The price test at 1.3447 coincided with the moment when the MACD indicator was beginning to move upward from the zero mark, confirming the correct entry point for buying the pound; however, a significant increase in the pair did not materialize.

Disappointing data from the U.S. set the tone for trading yesterday, leaving the dollar without support. The labor market in June did not present any surprises, as the JOLTs report showed steady figures of 7.4 million job openings, 5.3 million hires, and 5.4 million separations. Such balance, without signs of overheating or cooling, did not provide the Federal Reserve with grounds to tighten its rhetoric, thereby weakening the American currency. The British pound capitalized on this weakness and strengthened against the dollar. The industrial data only amplified the sense of ambiguity, as new orders fell by 0.3%.

Today, in the first half of the day, the direction of the pound will be set by data on the UK services sector activity index and the composite PMI. These indices are based on surveys of purchasing managers and reflect the state of business activity, with values above 50 indicating growth and below indicating a decline. The services sector carries particular weight, as it constitutes a large part of the British economy; therefore, its indicators serve as a key benchmark for assessing its health and directly influence expectations regarding the Bank of England's interest rate. This is why strong data can help the pound's further growth against the dollar. Strong activity in services will reinforce confidence in economic resilience and provide support for the British currency, allowing the GBP/USD pair to continue its recent rise.

Regarding intraday strategy, I will rely more on implementing Scenarios #1 and #2.

Buy Scenarios

Scenario #1: Today, I plan to buy the pound upon reaching an entry point in the area of 1.3459 (green line on the chart) with a target rise to the level of 1.3473 (thicker green line on the chart). At around 1.3473, I plan to exit the market and sell in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from this level). Growth in the pound can be anticipated today only after good data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from there.

Scenario #2: I also plan to buy the pound today in the event of two consecutive tests of 1.3446 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 1.3459 and 1.3473.

Sell Scenarios

Scenario #1: I plan to sell the pound today after the 1.3446 level is updated (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be 1.3428, where I plan to exit the short position and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from this level). Bad news will return pressure on the pound. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from there.

Scenario #2: I also plan to sell the pound today in the event of two consecutive tests of 1.3459 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline can be expected toward the opposite levels of 1.3446 and 1.3428.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

The price test at 1.1518 coincided with the moment when the MACD indicator was beginning to move upward from the zero mark, confirming the correct entry point for buying the euro. As a result, the pair rose by 15 pips.

Uninspiring U.S. data deprived the dollar of support yesterday, favoring the single currency. The labor market in June remained in equilibrium, with JOLTs data showing 7.4 million job openings. The lack of clear signs of cooling or overheating meant the Federal Reserve had no new arguments to change course, weakening the dollar. The industry introduced a mixed tone to the picture. New orders declined by 0.3% to $656.5 billion for the second consecutive month. This duality prevented the dollar from finding support, and the EUR/USD pair shifted toward growth.

Today, the euro enters the first half of the day with an eye on a busy block of European data, including the services sector business activity index, the composite PMI, and the Eurozone producer price report. Business activity indices are leading indicators, as they are among the first to capture shifts in business sentiment, and the market reacts primarily to deviations between the actual figures and forecasts. The producer price index will provide insight into inflation, showing how strong the cost increases are in the region's economy.

These releases are directly significant for the single currency. Confident business activity figures and rising producer prices will reinforce expectations for a more hawkish European Central Bank and provide the euro with support against the dollar. Conversely, disappointing data will leave the EUR/USD pair without sufficient reasons for continued upward movement, and the initiative will shift back to dollar sentiment. Until the reports are released, the euro will likely remain cautious, awaiting confirmation of economic resilience.

Regarding intraday strategy, I will rely more on implementing Scenarios #1 and #2.

Buy Scenarios

Scenario #1: Today, I plan to buy the euro upon reaching a price in the area of 1.1542 (green line on the chart) with a target rise to 1.1565. At 1.1565, I intend to exit the market and sell the euro in the opposite direction, expecting a move of 30-35 pips from the entry point. Growth in the euro today can only be anticipated after positive data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from there.

Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of 1.1530 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 1.1542 and 1.1565.

Sell Scenarios

Scenario #1: I plan to sell the euro after reaching the level of 1.1530 (red line on the chart), with a target of 1.1509, where I plan to exit the market and immediately buy in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from this level). Pressure on the pair will return today in the event of poor data. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from there.

Scenario #2: I also plan to sell the euro today in the event of two consecutive tests of 1.1542, with the MACD indicator in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline can be expected toward the opposite levels of 1.1530 and 1.1509.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

Yesterday, the dollar lacked support as U.S. data were uninspiring, offering no reason to buy. The labor market in June was effectively in equilibrium, with the JOLTs report showing that job openings totaled 7.4 million, hires totaled 5.3 million, and layoffs totaled 5.4 million. All these values remained almost unchanged, with no clear signs of either cooling or overheating. The JOLTs data are significant because the Federal Reserve uses them to assess labor market tightness, and such stability deprived the dollar of a distinct impulse.

A similar mixed signal came from the manufacturing sector. New orders declined for the second consecutive month, down 0.3% to $656.5 billion, but the backlog of unfilled orders continued to grow for the 23rd time, reaching a record $1,590.6 billion. This ambiguity did not provide the dollar with further justification, leaving it without support. For the euro and pound, the absence of dollar support became a tailwind. The weakness of the U.S. dollar allowed both European currencies to stabilize and appreciate, with EUR/USD and GBP/USD regaining ground. As long as the data did not give the Fed reasons for tightening, the initiative remained with risk assets.

Today, in the first half of the day, attention to the euro will focus on the services sector business activity index, the composite PMI index, and the June producer price report. The PMIs are based on surveys of companies and reflect the state of business activity, with the 50-point mark separating growth and decline. The services sector accounts for the largest share of the bloc's economy, while the composite index combines services and industry, providing a more complete picture. The producer price index, in turn, tracks wholesale prices and serves as an early signal of inflationary pressure that eventually translates into consumer prices.

Through these channels, the reports affect expectations regarding the European Central Bank's policy and, therefore, the euro's exchange rate. Strong business activity, combined with sustained price pressure, will support arguments for a hawkish stance by the central bank and bolster the single currency, potentially allowing the EUR/USD pair to continue rising. Conversely, weak data would cool sentiment and return the euro to a restrained dynamic until the end of the European session.

Similar data is being released for the UK. The services index is considered one of the most important benchmarks for the British currency, as the services sector makes up the bulk of the country's economy, and the composite indicator combines services and industry, providing a more complete view of business activity. Both indices are leading indicators, as they are the first to capture shifts in business sentiment and, through expectations regarding the Bank of England's policy, also influence the pound's exchange rate. Strong data could give the pound an impetus for further growth against the dollar, confirming the economy's resilience and strengthening the case for a hawkish stance by the regulator. Until the data is released, the GBP/USD pair is likely to remain cautiously positive in anticipation of confirmation.

If the data aligns with economists' expectations, it's best to act based on the Mean Reversion strategy. If the figures are significantly above or below economists' expectations, the Momentum strategy is preferable.

Momentum Strategy (Breakout):

For the EUR/USD Pair

Long positions on a breakout above 1.1557 may lead to an increase in the euro to around 1.1592 and 1.1620;

Short positions on a breakout below 1.1528 may lead to a decline in the euro to around 1.1504 and 1.1482;

For the GBP/USD Pair

Longs on a breakout above 1.3468 may lead to an increase in the pound to around 1.3498 and 1.3539;

Shorts on a breakout below 1.3444 may lead to a decline in the pound to around 1.3419 and 1.3393;

For the USD/JPY Pair

Longs on a breakout above 157.69 may lead to an increase in the dollar to around 157.93 and 158.28;

Shorts on a breakout below 157.40 may lead to a sell-off of the dollar to around 157.05 and 156.73;

Mean Reversion Strategy:

For the EUR/USD Pair

I will look for shorts after a failed breakout above 1.1547 upon returning below this level;

I will look for longs after a failed breakout below 1.1523 upon returning to this level;

For the GBP/USD Pair

I will look for shorts after a failed breakout above 1.3465 upon returning below this level;

I will look for longs after a failed breakout below 1.3439 upon returning to this level;

For the AUD/USD Pair

I will look for shorts after a failed breakout above 0.7062 upon returning below this level;

I will look for longs after a failed breakout below 0.7038 upon returning to this level;

For the USD/CAD Pair

I will look for shorts after a failed breakout above 1.4078 upon returning below this level;

I will look for longs after a failed breakout below 1.4059 upon returning to this level;

Crude oil is trading around $73.88, below the 4/8 Murray pivot point, and has faced strong downward pressure since the opening of this week's trading session.

If crude oil consolidates above $75 in the coming hours, this could be seen as an opportunity to open long positions, and we could expect it to reach the 200-day moving average around the psychological level of $80 in the coming days.

Conversely, if downward pressure prevails, we could expect crude oil to reach the $71.33 area, where it left a gap on July 13.

If crude oil trades above $73.88 in the coming hours, this could be seen as a buying opportunity, with targets at $75; ultimately, we expect it to reach the 61.8% Fibonacci level around $76.80.

Given that the Eagle indicator has reached extremely oversold levels, this could be considered a good opportunity to open long positions from current price levels or, should the price break above $75, with targets at the 5/8 Murray level around $81.25; ultimately, we expect it to reach $85, as crude oil left a gap at this level.

Gold is trading around $4,130, above the downtrend channel formed since July 22 and within the uptrend channel formed since early July, showing a positive bias.

On the H4 chart, we can see that gold has decisively broken out of the downtrend channel and is also consolidating above the 200-period moving average, so it is likely to continue rising in the coming days and could reach the 3/8 Murray level around $4,218.

If gold falls to the upper band of the downtrend channel around $4,080, we could expect a technical bounce, which could be considered an opportunity to open long positions in anticipation of it reaching the upper band of the uptrend channel at $4,220.

Given that gold is showing a positive signal, we could look for opportunities to buy above the 200-day moving average around $4,116 or, in case of a pullback toward the resistance level that was broken around $4,080, to open long positions.

Conversely, a drop below $4,080 could trigger a technical correction toward the lower band of the uptrend channel around $4,040.

The Eagle indicator is reaching overbought levels, so we should be cautious if gold encounters resistance around $4,140; we could expect consolidation below this zone over the next few hours.

The EUR/USD could continue its climb, so we could look for opportunities to buy above the 21-day moving average while waiting for it to reach the 7/8 Murray level around 1.1596.

Conversely, if the euro falls below 1.1520 and decisively breaks out of the uptrend channel, we could expect the technical correction to continue, potentially reaching the 6/8 Murray level around 1.1474, where EUR/USD might find strong support in that area or slightly lower around 1.1460, near the 200 EMA.

As we've mentioned on previous occasions, the euro faces strong resistance around the 200 EMA at near 1.1570 on the daily chart. If the euro reaches this zone in the coming days, we should wait to see if the price consolidates above it; if it faces rejection, this could be considered a selling opportunity.

The Eagle indicator has reached overbought levels, and a technical correction is likely to occur in the coming days. In light of these developments, we should monitor the 1.1596 area—around the 7/8 Murray level—or 1.1570 for selling opportunities.

There are a few macroeconomic publications scheduled for Wednesday that could influence currency pair movements throughout the day. In the UK, Germany, Eurozone, and the U.S., second estimates of the services sector business activity indices for July will be released today. However, second estimates of S&P indices generally do not differ from the first ones and do not provoke any reaction. Therefore, novice traders should focus only on the one-off ISM services sector business activity index from the U.S. and the ADP labor market report. However, we would downplay the latter report since the market prefers to assess the state of the U.S. labor market based on NonFarm Payrolls, which will be released on Friday.

Analysis of Fundamental Events:

There is absolutely nothing to highlight among the fundamental events on Wednesday. There are no important speeches or events planned for today. Nevertheless, there is plenty for traders to ponder. Recall that last week, inflation reports were released in the Eurozone, which maintained a relatively high probability of a second European Central Bank rate hike. At the same time, the U.S. economy slowed in the second quarter, and the Federal Reserve shows no genuine strong desire to raise the key rate in the near future. Thus, the U.S. dollar, which the market has been buying up in recent months for various reasons, is losing support.

The geopolitical backdrop continues to leave much to be desired. Another ceasefire has been violated, the conflict has resumed and continues, and the U.S. and Iran continue to routinely exchange blows, while negotiations are not taking place. The Strait of Hormuz remains closed or partially closed, the Yemeni Houthis have declared a blockade of Saudi Arabia, and Tehran has threatened to completely close the Bab-el-Mandeb Strait if Washington continues to exert pressure on it. The only glimmer of hope is Donald Trump's constant promises of the soon opening of Hormuz and a nuclear deal with Iran. Strangely enough, these statements are enough for oil prices to fall.

General Conclusions:

On the third trading day of the week, both currency pairs may continue their correction, and volatility today may be high only during the American session. The euro can be traded today from the area of 1.1527-1.1531, while the British pound can be traded from the area of 1.3456-1.3476. The most significant events this week are scheduled for Friday.

Main Rules of the Trading System:

1. The strength of the signal is assessed by the time it took to form the signal (bounce or level breakthrough). The less time required, the stronger the signal.
2. If two or more trades are opened around a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form a multitude of false signals or none at all. Technical levels may be disregarded.
4. On the hourly timeframe, it is preferable to trade based on signals from the MACD indicator only when there is good volatility and a trend confirmed by a trend line or channel.
5. If two levels are too close to each other (from 5 to 20 pips), they should be regarded as a support or resistance area.
6. After a 15-pip move in the correct direction, a Stop Loss should be set to break even.

What the Charts Show:

Support and resistance price levels (areas) are the targets when opening buy or sell orders or sources of signals.

Red lines denote channels or trend lines that reflect the current trend and indicate in which direction trading is currently favored.

The MACD indicator (14,22,3) – histogram and signal line – is a supporting indicator that can also be used as a source of signals.

Important speeches and reports (as listed in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be approached with utmost caution, or one should exit the market to avoid sharp price reversals against the preceding movement.

Beginners in Forex trading should remember that not every trade can be profitable. Developing a clear strategy and proper money management are essential for long-term trading success.

1H Chart of the GBP/USD Pair

The GBP/USD pair showed no interesting movements on Tuesday, making it difficult to analyze. The market remains positioned to buy the British pound, as it has begun to grow disillusioned with the Federal Reserve and the dollar. Recall that a month and a half ago, the market was confident that the Fed would raise the key rate several times by the end of the year. But now, members of the Fed's Monetary Committee do not express a strong desire to tighten policy; inflation is slowing, the labor market is cooling, and the economy grew at 1.5% in the second quarter. We believe the Fed will keep the key rate unchanged in September as well.

Additionally, from a technical standpoint, any growth in the pair is justified. The dollar strengthened in 2026 solely due to geopolitical factors, a dynamic that cannot sustain it indefinitely. In the long term, an upward trend remains, while in the medium term, there is a flat. Within the sideways channel, the British pound began its movement from the lower boundary to the upper one a month ago.

5M Chart of the GBP/USD Pair

In the 5-minute timeframe, the price reached the 1.3456-1.3476 area at the start of the American session but failed to generate any trading signals by the end of the day. Volatility was virtually nonexistent. Formally, novice traders had grounds to open a short position, but the trade neither yielded a profit nor incurred a loss, as there was no movement in the market.

How to Trade on Wednesday:

On the hourly timeframe, the GBP/USD pair maintains an upward trend. In our view, the British pound will continue to grow, even if local factors do not provide support. On the weekly timeframe, the move from the lower boundary of the sideways channel to the upper boundary began a month ago, and it is not yet complete. Belief in a rate hike by the Fed in September is fading; the market is no longer paying attention to geopolitics, and technical factors are supporting the British pound's gains.

On Wednesday, novice traders may open short positions if a bounce occurs in the 1.3456-1.3476 area, with a target of 1.3380-1.3386. Long positions can be considered if there is consolidation above the 1.3456-1.3476 area, with targets at 1.3587-1.3598.

On the 5-minute timeframe, the following levels should be considered for trading: 1.3096-1.3107, 1.3175-1.3180, 1.3259-1.3267, 1.3319-1.3331, 1.3380-1.3386, 1.3456-1.3476, 1.3587-1.3598, 1.3631-1.3641, 1.3695. On Wednesday, there are no significant events planned in the UK, while the U.S. will release the ADP report and the ISM services sector index. We believe that only the ISM Business Activity Index may provoke a market reaction.

Main Rules of the Trading System:

1. The strength of the signal is assessed based on the time it took to form (bounce or level breakthrough). The less time required, the stronger the signal.
2. If two or more trades are opened around a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate a plethora of false signals or none at all. Technical levels may be disregarded.
4. On the hourly timeframe, when trading based on signals from the MACD indicator, it is preferable to do so only in the presence of good volatility and a trend confirmed by a trend line or channel.
5. If two levels are too close to each other (from 5 to 20 pips), they should be regarded as a support or resistance area.
6. After a 15-pip move in the correct direction, a Stop Loss should be set to break even.

What the Charts Show:

Support and resistance price levels (areas) are the targets when opening buy or sell orders or sources of signals.

Red lines denote channels or trend lines that reflect the current trend and indicate in which direction trading is currently favored.

The MACD indicator (14,22,3) – histogram and signal line – is a supporting indicator that can also be used as a source of signals.

Important speeches and reports (as listed in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be approached with utmost caution, or one should exit the market to avoid sharp price reversals against the preceding movement.

Beginners in Forex trading should remember that not every trade can be profitable. Developing a clear strategy and proper money management are essential for long-term trading success.

1H Chart of the EUR/USD Pair

The EUR/USD currency pair exhibited very weak upward movement on Tuesday but maintained an overall upward bias, with no significant correction. The macroeconomic and fundamental backdrop was relatively weak. The market paid no attention to the JOLTs report on U.S. job openings for June. It is also worth noting that more and more signals are coming from the Fed indicating that most representatives of the Monetary Committee do not consider it advisable to tighten monetary policy in the near future. Thus, the hawkish sentiment in the market is fading, which does not support the dollar, which has already appreciated on the back of the Federal Reserve's rate hike. We warned that the Fed might refrain from tightening for several reasons. If the labor market and unemployment data in the U.S. on Friday prove weak, the chances of a rate hike from the Fed in 2026 will decrease further.

5M Chart of the EUR/USD Pair

On the 5-minute timeframe, no trading signals were formed on Tuesday. During the American trading session, the price interacted with the area of 1.1527-1.1531, but the movements were so weak that this interaction cannot be called a "bounce." Therefore, we would expect a trading signal to form in the indicated area today.

How to Trade on Wednesday:

On the hourly timeframe, the price has exited the sideways channel it had spent a month in and is now forming a new upward trend. Considering all the events in the world in recent months, we believe that the European currency should continue its steady growth. Recently, the market has diligently ignored almost all favorable factors for the euro, so a "mutual settlement" may now begin, adjusting the exchange rate to fair value.

On Wednesday, novice traders may open short positions with targets of 1.1461-1.1474 if the price consolidates below the 1.1527-1.1531 area. Long positions will become relevant in the event of consolidation above the 1.1527-1.1531 area, with targets of 1.1584-1.1594.

On the 5-minute timeframe, the following levels should be considered: 1.1267-1.1275, 1.1366-1.1377, 1.1461-1.1474, 1.1527-1.1531, 1.1584-1.1594, 1.1655-1.1666, and 1.1745-1.1754. On Wednesday, there are no important events or publications planned in the Eurozone. At the same time, in the U.S., the ADP labor market report and the ISM services sector activity index will be released. The ADP report can be considered secondary, while the ISM index is important.

Main Rules of the Trading System:

1. The strength of the signal is determined by the time it takes to form the signal (bounce or level breakthrough). The less time required, the stronger the signal.
2. If two or more trades are opened around a level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate a multitude of false signals or none at all. Technical levels may be disregarded.
4. When trading based on MACD signals on the hourly timeframe, it is advisable to do so only when volatility is high and the trend is supported by a trend line or channel.
5. If two levels are too close to each other (from 5 to 20 pips), they should be regarded as a support or resistance area.
6. After a 15-pip move in the correct direction, a Stop Loss should be set to break even.

What the Charts Show:

Support and resistance price levels (areas) are the targets when opening buy or sell orders or sources of signals.

Red lines denote channels or trend lines that reflect the current trend and indicate in which direction trading is currently favored.

The MACD indicator (14,22,3) – histogram and signal line – is a supporting indicator that can also be used as a source of signals.

Important speeches and reports (as listed in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be approached with utmost caution, or one should exit the market to avoid sharp price reversals against the preceding movement.

Beginners in Forex trading should remember that not every trade can be profitable. Developing a clear strategy and proper money management are essential for long-term trading success.

The GBP/USD currency pair also moved with minimal volatility on Tuesday, and the only report of the day—the JOLTs report on open job vacancies—did not interest traders. As a result, we witnessed dull, dreary movement throughout the day, and even geopolitics failed to move the pair away from its "dead" point. We have been saying for several months that geopolitics will not consistently exert the same influence on the dollar as it did in the initial months of the conflict in the Middle East. Essentially, the market is now ignoring all incoming information from the Middle East. This week, it became known that Donald Trump intends to sign a deal with Iran, while Iran has not heard anything about it. Following this, the U.S. president announced that new strikes would be launched against Iran if Tehran refuses negotiations and an agreement. Therefore, Trump and Iran currently seem to be living in different universes. What is actually happening and where this will lead is unknown. Essentially, only oil is reacting to the constantly changing geopolitical backdrop. This week, Brent prices dropped to $83 per barrel, although the Strait of Hormuz remains about 90% closed. The currency market, however, is awaiting U.S. labor and unemployment data.

From a technical perspective, the British pound continues to form an upward trend. It should be noted that, in the long term, the pair is in a range, as is clear on the weekly timeframe. After reaching the lower boundary of the sideways channel, a logical movement toward the upper boundary has begun, which is not yet complete.

On the 5-minute timeframe, no trading signals were formed on Tuesday. Throughout the day, volatility was so weak that the price was unable to work through any level or line. Thus, there were no grounds for opening trading positions.

COT Report

COT reports for the British pound show that non-commercial traders have dominated the market for several months with short positions. The net position is negative despite the long-term upward trend remaining intact. Given the events in the Middle East, it is no surprise that demand for risk currencies remains weak. The war is formally over, but the conflict continues. Geopolitics may support demand for the U.S. dollar in the near future. However, until consolidation below the trend line occurs, we wouldn't expect a significant drop in the pair.

In the long term, the dollar will continue to decline due to Donald Trump's policies, as is clearly evident on the weekly timeframe (illustration above). The trade war will continue in one form or another for a long time, and Trump's policies are aimed both directly and indirectly at weakening the American currency. The long-term upward trend remains, as evidenced by the trend line. The price recently tested this line and bounced off it. According to the latest COT report (from July 28), the "Non-commercial" group closed 2,800 BUY contracts and opened 6,400 SELL contracts. Thus, the net position of non-commercial traders decreased by another 9,200 contracts over the week.

Analysis of GBP/USD 1H

On the hourly timeframe, the GBP/USD pair continues to form an upward trend. In the long term, both European currencies still look upward and have been in sideways channels for an entire year. This does not negate the upward trend that began back in 2022. We expect the British pound to continue rising in the coming weeks, regardless of geopolitical and economic developments. This week, only U.S. labor market data could hinder the pound's growth.

For August 5, we highlight the following important levels: 1.3042-1.3050, 1.3096-1.3115, 1.3179-1.3187, 1.3301-1.3309, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681. The Senkou Span B line (1.3376) and Kijun-sen line (1.3418) may also serve as signal sources. It is recommended to set a Stop Loss at breakeven when the price moves in the correct direction by 20 pips. The Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals.

On Wednesday, the UK economic calendar is empty, while in the U.S., the ADP and ISM reports for the services sector will be released. We believe the ISM index is more important, and the market will react to it. As for the ADP report on private-sector employment changes, it is fairly inaccurate, and the market prefers to focus on NonFarm Payrolls.

Trading Recommendations:

Today, traders may open new short positions with targets at 1.3418 and 1.3377 if the price bounces off the 1.3465-1.3480 area. Long positions can be opened in the case of breaking through the area of 1.3465-1.3480 with a target of 1.3588.

Explanations for the Illustrations:

• Support and resistance price levels are marked by thick red lines, around which the movement may end. They are not sources of trading signals.
• The Kijun-sen and Senkou Span B lines are lines from the Ichimoku indicator transferred from the 4-hour timeframe to the hourly. They are strong lines.
• Extremum levels are indicated by thin red lines, from which the price has previously bounced. They are sources of trading signals.
• Yellow lines represent trend lines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts shows the size of the net position of each category of traders.

The EUR/USD currency pair on Tuesday showed only one thing—a complete unwillingness to move in either direction. By the end of the day, the European currency appreciated by about 25 pips, and the day's overall volatility did not exceed 40 pips. Thus, there was virtually no movement in the market on Tuesday. The price continues to remain above the lines of the Ichimoku indicator and generally maintains an upward trend. Therefore, at this time, we expect the continued growth of the European currency. However, there will be quite a bit of important statistical information published this week, so the U.S. dollar's growth cannot be ruled out either. As of Wednesday morning, two relatively important reports were released in the U.S.—the ISM manufacturing index and JOLTs. The ISM index came in higher than expected, allowing the dollar to gain slightly on Monday. The JOLTs report was slightly weaker than forecasts, but the market didn't even notice, as expected. Today, the second ISM index for the services sector will be released, but the market seems to have completely shifted its focus to the NonFarm Payrolls and unemployment reports, which will be released on Friday. It is these reports that will help forecast the Federal Reserve's actions in September and through the end of the year. However, we already believe the market has overestimated the American central bank's "hawkish" intentions.

From a technical perspective, the pair has exited the sideways channel of 1.1362-1.1461 after a month of torment. Traders can now expect not just an upward trend, but a full-fledged trend. Recall that over the past year, the EUR/USD pair has primarily moved sideways, and there are still no strong grounds for a long-term dollar trend.

On the 5-minute timeframe on Tuesday, no trading signals were formed. Only towards the end of the day did the pair return to the 1.1536-1.1542 area, so a trading signal may form around it today.

COT Report

The latest COT report is dated July 28. In the weekly timeframe, it is evident that the net position of non-commercial traders has turned "bearish" and has significantly decreased in 2026 due to geopolitical events. Traders have been shedding the European currency in favor of the U.S. dollar in recent months. Donald Trump's policy has not changed, but for a time, the dollar acted as a "reserve currency."

We still do not see any fundamental factors for strengthening the European currency, but there are plenty of factors for the U.S. dollar to decline. The war in the Middle East temporarily made the dollar super-attractive, but when this factor reaches its "expiration date," everything will return to its previous state. In the long term, the euro could fall to as low as $1.08 (the trend line), but the upward trend will remain relevant. Over the past months of dollar growth, the pair has not approached this line significantly.

The arrangement of the red and blue lines of the indicator indicates parity between bulls and bears. During the last reporting week, the number of longs in the "Non-commercial" group decreased by 15,500, while the number of shorts increased by 15,600. Consequently, the net position of non-commercial traders decreased by 31,100 contracts over the week.

Analysis of EUR/USD 1H

On the hourly timeframe, the pair has resumed an upward trend after a month-long pause. The situation in the Middle East remains tense and has not improved, but this is no longer sufficient to support a new, powerful rise in the dollar. The market has ignored all favorable factors for the euro in recent months and has focused solely on the Fed's monetary policy, to which it has had inflated expectations. If the situation has now changed, the European currency has the opportunity to reflect on all past news/events/reports that the market has ignored.

For August 5, we identify the following levels for trading: 1.1234, 1.1274, 1.1362-1.1368, 1.1461-1.1473, 1.1536-1.1542, 1.1585, 1.1657-1.1666, 1.1750-1.1760, 1.1786, 1.1830-1.1837, as well as the Senkou Span B line (1.1456) and Kijun-sen line (1.1497). The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Don't forget to set a Stop Loss at breakeven if the price moves in the correct direction by 15 pips. This will safeguard against potential losses if the signal proves false.

On Wednesday, Germany, the Eurozone, and the U.S. will release second estimates of the business activity indices for July, and the EU will also publish the producer price index. However, all these reports are secondary. The market may only pay attention to the ADP and ISM reports in the U.S.

Trading Recommendations:

Today, traders may open new short positions with targets at 1.1497 and 1.1461-1.1473 if the price bounces off the 1.1536-1.1542 area. A consolidation above the area of 1.1536-1.1542 will allow for opening new long positions with targets of 1.1585 and 1.1657-1.1666.

Explanations for the Illustrations:

• Support and resistance price levels are marked by thick red lines, around which the movement may end. They are not sources of trading signals.
• The Kijun-sen and Senkou Span B lines are lines from the Ichimoku indicator transferred from the 4-hour timeframe to the hourly. They are strong lines.
• Extremum levels are indicated by thin red lines, from which the price has previously bounced. They are sources of trading signals.
• Yellow lines represent trend lines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts shows the size of the net position of each category of traders.

The GBP/USD currency pair traded quite calmly on Tuesday, and the only report of the day—the JOLTs report—did not generate much interest among traders. Typically, the first week of each month is the time for publishing the labor market and unemployment reports in the U.S. Generally, the market prepares for this for a long time, but in reality, in most cases, we only see movement on the day of the NonFarm Payrolls and unemployment publication, which will be on Friday. Likely, this will also be the case this time. The ISM, ADP, JOLTs reports, and others are certainly interesting, but the market will draw conclusions based on the NonFarm Payrolls reports and the unemployment rate.

Fortunately or unfortunately, everything now boils down to what results the labor market will show in July. As we have mentioned, the U.S. labor market is slowing down again, and the unemployment rate does not reflect the real state of affairs. Like any relative metric, it does not always accurately reflect the processes occurring in the economy. To illustrate, if 1 million retirees emigrate from the U.S. in a given month, the unemployment rate will decrease because the total number of workers remains the same, while the total population drops. However, this does not mean that American companies are hiring more employees. Additionally, each year more Americans earn their living through blogging or other informal professions, which are not included in the overall statistics. Thus, the unemployment rate is typically overshadowed by NonFarm Payrolls, which accurately shows the exact number of new jobs in the non-agricultural sector.

Well, as accurate as... almost accurate. It should be noted that, recently, nearly every NonFarm Payroll report has been revised. Over the past year and a half, they have usually been revised downward. If deviations were in the range of 5,000-10,000 jobs, they could be considered a margin of error. However, revisions can be as much as 50,000 jobs, so calling this figure precise is also difficult. It can only be used to track labor market dynamics, no more. As for forecasts, they are typically just "a shot in the dark." If the Bureau of Labor Statistics cannot accurately count how many new jobs were created during the reporting month, then what can be said about various experts who do not have access to official statistics?

Therefore, NonFarm Payrolls is the most important report on the labor market, but it is extremely imprecise. The deviation from the forecast can be vast. Thus, it is best to react to this report only after its publication. As for the prospects of the British pound, in our opinion, they are very positive. The market doubts that the Federal Reserve will raise the key rate even once by the end of the year; the Bank of England's last meeting ended more "hawkishly" than expected; and the geopolitical conflict in the Middle East is no longer a reason for capital flight to the safe-haven dollar. Moreover, the pound continues to move from the lower boundary of the sideways channel on the daily and weekly timeframes toward the upper boundary.

The average volatility of the GBP/USD pair over the last 5 trading days stands at 94 pips. For the pound/dollar pair, this value is considered "average." On Wednesday, August 5, we expect the pair to move within a range bounded by levels 1.3350 and 1.3538. The upper linear regression channel is directed downward, indicating a bearish trend. The CCI indicator has entered the overbought area, which may provoke a new downward correction.

Closest support levels:

S1 – 1.3428

S2 – 1.3367

S3 – 1.3306

Closest resistance levels:

R1 – 1.3489

R2 – 1.3550

R3 – 1.3611

Trading Recommendations:

The GBP/USD currency pair maintains an upward trend. Donald Trump's policies will continue to pressure the U.S. economy, so we do not expect growth in the U.S. dollar in the long term. The year 2026 is proving super-positive for the dollar due to geopolitics, but every fairy tale comes to an end sooner or later. The weekly timeframe shows a flat range between 1.3150 and 1.3780 within a four-year upward trend, supporting expectations of continued growth in the British currency in the medium term. Long positions with targets of 1.3538 and 1.3550 can be considered when the price is above the moving average. When the price is below the moving average line, short trades targeting 1.3350 and 1.3306 can be pursued.

Explanations for the Illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same way, it indicates that the trend is currently strong;
• The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should currently be conducted;
• Murray levels are target levels for movements and corrections;
• Volatility levels (red lines) indicate the probable price channel in which the pair will spend the next day based on current volatility readings;
• The CCI indicator entering the oversold territory (below -250) or the overbought territory (above +250) indicates that a trend reversal in the opposite direction is approaching.

The EUR/USD currency pair traded very calmly on Tuesday, with the first half of the day spent almost entirely in a tight range. Thus, the new not-boring week began very boringly. So far this week, there has been only one interesting event—the ISM Manufacturing Index in the U.S. This index is published in a single estimate (unlike S&P indices), which gives it particular value. As mentioned, the index exceeded forecasts, triggering a slight strengthening of the dollar. However, the manufacturing index is rather dull. The market processed this index and forgot about it. There are now more significant topics for traders to consider.

At the end of the week, labor market and unemployment reports will be published in the U.S. These are, of course, the most important indicators of the economy's current state after inflation. We have already learned that the U.S. economy slowed to 1.5% quarter-on-quarter in the second quarter, and while inflation has dropped to 3.5%, it is far from certain that it will continue to slow. Thus, it is the labor market reports that will determine the dollar's future and traders' expectations regarding Federal Reserve monetary policy.

Let's remember that just a month and a half ago, the market was virtually certain that the Fed would raise the key rate once or even several times by the end of the year. However, as of the beginning of August, serious doubts about this have arisen. We have repeatedly warned that the dollar is rising without justification, while the market is ignoring all factors in favor of the euro. For example, after the June meeting, the market rushed to buy the dollar as if Kevin Warsh had promised to raise rates several times. Yet in July, traders began to doubt the central bank's "hawkish" stance. After all, inflation is slowing, the labor market has contracted for three consecutive months, and most importantly, Warsh was appointed as Jerome Powell's successor precisely because of his willingness to lower rates, rather than raise them. If he were not prepared for "dovish" actions, Trump, who fought against the Fed and Powell during his first presidential term, would never have nominated him for this position.

Thus, the market is starting to take off its rose-colored glasses and seriously doubt that the Fed will tighten monetary policy even once by the end of the year. Meanwhile, the ECB has already raised rates once and could very well raise them again at the September meeting. If the labor market and unemployment reports show weak figures on Friday, the chances of a Fed rate hike will diminish even further. In this case, Warsh may announce that the labor market needs support again, which does not imply raising the key rate. Perhaps the labor market will show decent figures, but that does not mean the Fed is eager to raise rates. Warsh and his team have already had two opportunities to tighten, but the American central bank is somehow hesitating with this decision. If they wanted to raise rates, they would have done it long ago, especially since inflation is nearly double the target level...

The average volatility of the EUR/USD currency pair over the last 5 trading days as of August 5 is 76 pips, which is considered "average." We expect the pair to move between 1.1442 and 1.1594 on Wednesday. The upper linear regression channel is directed downward, indicating the continuation of the downward trend. The CCI indicator has entered the overbought zone, signaling a possible downward correction.

Closest support levels:

S1 – 1.1505

S2 – 1.1475

S3 – 1.1444

Closest resistance levels:

R1 – 1.1536

R2 – 1.1566

R3 – 1.1597

Trading Recommendations:

The EUR/USD pair has begun a new upward trend on the 4-hour timeframe, which could signal the start of a new cycle within the global upward trend on higher timeframes. The global fundamental backdrop for the dollar remains negative, but in 2026, first geopolitics and then the Fed's hawkish stance provided strong support for the American currency. However, every fairy tale comes to an end sooner or later. With the price positioned below the moving average, shorts can be considered, targeting 1.1444 and 1.1414. Above the moving average line, relevant long positions can be taken with targets of 1.1566 and 1.1597.

Explanations for the Illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same way, it indicates that the trend is currently strong;
• The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which trading should currently be conducted;
• Murray levels are target levels for movements and corrections;
• Volatility levels (red lines) indicate the probable price channel in which the pair will spend the next day based on current volatility readings;
• The CCI indicator entering the oversold territory (below -250) or the overbought territory (above +250) indicates that a trend reversal in the opposite direction is approaching.

The Federal Reserve is waiting for inflation to slow down. At least, that's what John Williams, the President of the New York Fed, stated. Williams has never been part of the "hawkish" wing and did not vote for a rate hike at the last meeting, where, let me remind you, three voting FOMC members voted "in favor." In Williams' view, the current level of interest rates is adequate to maintain the disinflation process in the long term. It is useful to interpret Williams' words as follows: "We expect the conflict in the Middle East to end, leading to a drop in oil prices, which will naturally slow down inflation." Or: "We do not intend to raise the interest rate, but we want to find a suitable explanation for this decision."

In my opinion, it is currently impossible to forecast the inflation rate even a month ahead. Let's assume the conflict in the Middle East really does come to an end (though it is impossible to understand when and how). But what if it does not? What if a blockade of the Bab-el-Mandeb Strait accompanies the blockade of the Strait of Hormuz? In this case, oil prices could easily exceed $150 per barrel, and there would be no discussion of slowing inflation at all. Therefore, in my view, Williams' words are an attempt to justify the reluctance to raise rates. The European Central Bank is tightening policy even with inflation much lower.

Nevertheless, we cannot regard the statements of one of the Fed's governors lightly. If one of the FOMC members takes a sufficiently tough and uncompromising stance, other governors may share this view as well. Recall that this Friday, data on U.S. unemployment and the labor market will be released, which could give Kevin Warsh and the company a legitimate reason not to tighten monetary policy. If the U.S. labor market continues to "cool," it is unlikely that the key rate will be raised, as this would further slow down the economy and cool the labor market even more.

My opinion remains the same. The Fed is not going to tighten monetary policy and will seek any reason to avoid raising interest rates. It will forecast slowing inflation by 2028, citing the "cooling" of the labor market or changes in the methodology used to determine inflation. For example, Warsh recently stated that the core Personal Consumption Expenditures (PCE) index is slowing. However, on a year-on-year basis, it remains at the same level as regular inflation. The market has already priced in the most "hawkish" scenario...

Wave Analysis of EUR/USD:

Based on the conducted analysis of EUR/USD, I conclude that the instrument remains within the upward portion of the trend (bottom image), while in the shorter term, it is in the downward portion of the trend. In my opinion, this is a good time to try to form long positions. However, the instrument may still drop to the 13th figure within wave 5 in C. Wave analysis often presents surprises, so I would currently be adjusting to buy.

Wave Analysis of GBP/USD:

The wave picture for the GBP/USD instrument has become quite complex. Currently, the instrument has built three waves down, while for EUR/USD, five waves may be constructed. Consequently, the anticipated wave 2 may take on a more complex and extended form if EUR/USD builds a convincing wave 5 in C. Alternatively, the wave interpretation may take on a different appearance than it currently has. For the British pound and the euro, I am bullish in the medium term. If we abstract from the wave analysis of the euro, I would say that the pound has begun to build a new upward wave structure.

Main Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to play; they often carry changes.
2. If there is no confidence in what is happening in the market, it is better not to enter.
3. There can never be 100% certainty in the direction of movement. Don't forget about protective stop-loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

U.S. Treasury Secretary Scott Bessent went further, stating that an agreement on controlling the Strait of Hormuz could be reached as early as Tuesday. Just these words were enough to push oil back down, while EUR/USD received much-awaited support. As usual, the markets did not wait for the official text of the agreement—they bought the rumor in advance.

Dynamics of Treasury Yields and Fed Rates

However, the U.S. dollar has its own trump cards that extend beyond the Strait of Hormuz. The White House is seriously concerned about rising Treasury yields and is forced to resort to unconventional methods. Bessent described Washington's support for Japan's currency intervention as a sign of trust in allies. A more plausible explanation is different: the administration fears forced sales of Treasuries by its largest foreign holder.

The catch is that nothing happens in global markets in a vacuum. If Tokyo acted alone, it would have to liquidate part of its $1.1 trillion in Treasury holdings, which would push yields and mortgage rates up. The Trump administration promised voters cheap borrowing but now faces 19-month highs in yields ahead of the midterm elections. Aggressive tax cuts and entanglement in the Middle East, which fueled global inflation, now require backstage tricks to compensate for it.

Dynamics of Japanese Treasury Holdings

Nevertheless, the dollar has reasons to take pride without geopolitics. The U.S. trade balance deficit shrank by 5.6% to $73.3 billion in June—imports fell across the board for the first time this year. Trade has been shaky throughout the quarter due to tariff chaos, war in the Middle East, and the race for investments in artificial intelligence. Nevertheless, net exports continue to support economic growth, and the second reading of GDP for the second quarter may exceed the modest initial forecast of 1.5%.

This results in an interesting picture: geopolitics pushes EUR/USD up, while domestic statistics and the government debt market pull the dollar in the opposite direction. Which of them will prove stronger when the text of the Iranian deal finally lands on the table?

Technically, on the daily chart, EUR/USD shows a pullback after the rally. As long as the quotes for the main currency pair remain above the support level of 1.147, the sentiment remains "bullish." Focus should be on buying during the exhaustion of the corrective movement towards the upward trend.

West Texas Intermediate (WTI) oil has seen a slight price increase in the last hour of trading, approaching the round level of $77.00. However, this growth is not accompanied by confident prospects due to the uncertainty surrounding the ongoing war in the Middle East.

Recent news reported that Iran stated on Monday there were no negotiations with the U.S. or plans for meetings. This statement contradicts U.S. President Donald Trump's remarks over the weekend about the possible resumption of negotiations as the reason for canceling attacks. Furthermore, unconfirmed reports of drones attacking American facilities in Kuwait diminish hopes for a potential peace agreement between the U.S. and Iran, prompting traders to factor in geopolitical risks that support oil prices.

Additionally, Mohsen Rezaee, a senior military advisor to Iran's Supreme Leader, emphasized that Tehran would not allow any passage through this vital waterway except for that established by the Islamic Republic. He also warned that American ships and military forces could face serious risks and losses if the standoff over this strategically important waterway continues. The naval blockade of Saudi Arabia carried out by Iran-backed Houthi rebels also heightens concerns about global energy supply.

Ben Picton from Rabobank describes the ongoing tension in the Strait of Hormuz as a "Groundhog Day" for markets, emphasizing that "later in the week, strikes typically resume, oil prices rise, stocks are sold off, and bond yields increase." He warns that "all signs point to this happening this week," although the market currently reflects a sense of "strikes following strikes," as investors fear a repeat of the usual pattern of escalating conflict and risk.

These events largely overshadow the recent OPEC+ decision to increase production made on Sunday and provide support for oil prices. Nevertheless, the lack of active follow-through buying necessitates caution before opening new bullish positions, especially since the current pullback from the weekly low is likely a closure of sales. Meanwhile, oscillators on the hourly chart are negative.

On the daily chart, the signals are mixed, and the relative strength index is negative, indicating a bearish advantage. However, it is worth noting that as long as prices are trading above the 200-day SMA, they are not ready to fall in the long term. Nonetheless, bulls need to overcome the 20-day SMA for further growth.

The EUR/USD pair remains within the local bearish impulse that has been in place since April 17. However, every impulse eventually comes to an end, and who is to say that this one has not already ended? It is worth remembering that imbalances tend to work best within the same impulse. If an imbalance forms during a bearish trend but is tested after the market has already shifted into a bullish trend, the resulting price reaction may be very limited. At present, the reaction to Imbalance 17 has been weak, while the British pound has already responded to a bullish imbalance and may continue its upward move, which currently looks much more convincing than the euro's.

The fundamental backdrop is also not in the bears' favor. Last week, traders expected Kevin Warsh to deliver either a clear indication of a September rate hike or, at the very least, more hawkish rhetoric that would answer one key question: Is the Federal Reserve preparing to tighten monetary policy this autumn? Instead, Warsh referred to incoming economic data, and as we know, the latest U.S. labor market figures were relatively weak. As a result, he may argue in September that labor market conditions remain too soft for the Federal Reserve to focus solely on inflation. Economic data have also favored the euro, as U.S. GDP figures disappointed while Eurozone GDP data exceeded expectations. This week, the Nonfarm Payrolls (NFP) report and the U.S. unemployment rate could prompt another retreat by the bears.

It is also worth remembering that expectations of Federal Reserve monetary tightening remain only expectations. They can change rapidly in response to geopolitical developments or incoming economic data. Recent U.S. labor market reports have been weak, while inflation data have pointed to slowing price growth. Together, slowing labor market momentum and easing inflation cast doubt on the likelihood of an FOMC rate hike in the foreseeable future. Personally, I am not convinced that the Federal Reserve will necessarily begin tightening monetary policy this year.

Geopolitical developments have moved into the background for traders, but they continue to influence the global economy. Tehran and Washington remain unable to reach an agreement and have not even returned to the negotiating table. Donald Trump continues to claim that agreements on the Strait of Hormuz and Iran's nuclear program are close, but developments on the ground suggest otherwise. Tehran continues to reject Trump's optimistic statements, indicating that no meaningful negotiations are currently taking place. As a result, there can be no agreement. The unresolved geopolitical conflict continues to support energy prices, which in turn keeps inflation elevated across many economies. In my view, the ongoing conflict between Iran and the United States is no longer sufficient on its own to trigger another major bearish advance.

From a technical perspective, the current chart structure still points to the bearish impulse that began on April 17. Bearish Imbalance 17 has already been tested, but the market's reaction has been relatively weak. The key question is whether the euro's decline actually ended last Friday. Last week also saw the formation of a new Bullish Imbalance 19, giving buyers renewed reason for optimism. Consequently, the pair could decline toward Imbalance 19, where a new buy signal may emerge. However, the euro is not required to revisit Imbalance 19. It should be viewed only as a potential area of interest rather than a mandatory downside target.

Tuesday's economic calendar was relatively light. The only notable release—the U.S. JOLTS report—failed to generate enough interest to trigger significant buying or selling of the U.S. dollar. The market continues to await more important labor market and unemployment data.

The bulls still have plenty of reasons to remain optimistic in 2026, and even the conflict in the Middle East has not fundamentally altered that outlook. From both a structural and long-term perspective, the policies implemented by Donald Trump—which contributed to the dollar's sharp decline last year—have not materially changed. Despite the FOMC's hawkish bias, I still see few compelling factors supporting the U.S. dollar. Nevertheless, sellers continue to dominate for now, while no confirmed bullish signals have yet emerged.

Economic Calendar for the United States and the Eurozone

United States

• ADP Employment Change (12:15 UTC)
• ISM Services PMI (14:00 UTC)

The economic calendar for August 5 includes two important releases. The ADP Employment Change report is the first major indicator of U.S. labor market conditions this week, while the ISM Services PMI is an important economic indicator in its own right. As a result, macroeconomic data could influence market sentiment during the second half of Wednesday's session.

EUR/USD Forecast and Trading Tips

In my view, the pair remains in the process of forming a broader bullish trend. Although the news backdrop shifted sharply in favor of the bears five months ago, the longer-term uptrend cannot yet be considered invalidated. Consequently, buyers may launch another advance after liquidity was taken from the two most recent clearly defined swing lows.

A sell signal could still emerge within Imbalance 17, meaning the euro may begin to decline this week toward Imbalance 19. However, such a move would also require a supportive fundamental backdrop for the U.S. dollar. A bullish signal may then develop within Imbalance 19, allowing traders to consider long positions with targets above 1.1620. At the same time, the broader uptrend could resume even without the pair revisiting Imbalance 19.

The GBP/USD pair posted strong gains last week, fully in line with the prevailing news backdrop. It can therefore be argued that the bulls launched a new advance at the end of June, followed by a typical corrective pullback, and are now attempting to resume the upward move.

Bearish Imbalance 24 was invalidated without triggering any meaningful price reaction. As a result, it can now be regarded as an inversion imbalance. The market reacted to this pattern from above as early as Friday, meaning it has already been validated and generated a bullish signal.

As for the fundamental backdrop, I believe it continues to favor the British pound. As I have noted before, geopolitical developments are no longer providing sustained support for the U.S. dollar, as new escalations in the Middle East conflict occur roughly every two weeks, with each episode having little impact beyond that of previous ones. According to some reports, negotiations between Tehran and Washington are continuing; according to others, they have been suspended or have collapsed altogether. Officially, Tehran denies holding direct talks with the United States but continues negotiations through intermediaries. It remains unclear how these indirect discussions could lead to resolving the conflict with the United States if Washington is not directly involved. Iran may be able to reach an agreement with Oman regarding control of the Strait of Hormuz, but it is uncertain how this would address the U.S. naval blockade.

Last week, oil prices climbed to $100 per barrel, and the consequences of a renewed escalation in the Middle East, together with a blockade of the Strait of Hormuz, could push prices as high as $120. Under the most pessimistic scenario, oil would continue to rally and surpass the highs recorded between March and May. In that case, inflation in both the United States and the United Kingdom would likely accelerate again. Under a more optimistic scenario, however, oil prices could return to the $60–70 per barrel range. In that environment, additional monetary tightening by the Federal Reserve might not be necessary, while the Bank of England is already no longer constrained by persistently high inflation. At present, however, it is the Federal Reserve that remains reluctant to adopt a more hawkish stance, whereas the Bank of England expects inflation to accelerate and appears prepared to tighten monetary policy further.

From a technical perspective, the charts point to a renewed bullish advance. Traders currently have two bullish imbalances (24 and 25), both of which can be considered potential buying zones. Imbalance 24 already generated a buy signal on Friday, and that signal now needs confirmation through continued upward movement. There are currently no bearish patterns on the chart. Therefore, if sellers attempt to regain control, there are no technical setups available to justify opening short positions.

Tuesday's economic calendar was relatively light, as the JOLTS report is not considered the most important release in the broader U.S. labor market data series. Nevertheless, buyers dominated trading for most of the day, reinforcing my expectations. There were also no major geopolitical developments, apart from Donald Trump's repeated statements that an agreement with Iran would be reached soon.

Overall, I continue to believe that the broader fundamental backdrop favors a long-term decline in the U.S. dollar. Neither the conflict between Iran and the United States nor the possibility of Federal Reserve rate hikes in 2026 has fundamentally changed that outlook. Geopolitical tensions temporarily reminded investors of the dollar's safe-haven appeal, but the conflict has already moved beyond its most intense phase. Although the Federal Reserve is expected to raise interest rates in 2026—which is supportive of the dollar—it should also be remembered that tighter monetary policy would likely slow both economic growth and the labor market. Moreover, Donald Trump appointed Kevin Warsh as Chair of the FOMC to pursue a more accommodative monetary policy, something Jerome Powell was unwilling to deliver. Therefore, in my view, any appreciation of the U.S. dollar is likely to be temporary rather than the beginning of a lasting trend.

Economic Calendar for the United States and the United Kingdom

United States

• ADP Employment Change (12:15 UTC)
• ISM Services PMI (14:00 UTC)

The economic calendar for August 5 includes two releases that I consider important. As a result, macroeconomic data could have a noticeable impact on market sentiment during the second half of the day.

GBP/USD Forecast and Trading Tips

The long-term outlook for the pound remains bullish. After liquidity was taken from the two most recent swing points, buyers resumed their advance, followed by a corrective pullback and another bullish push. I expect the pound to continue rising this week, although much will depend on the incoming news flow. Traders will focus on U.S. labor market and unemployment data, which are expected to play a major role in the FOMC's decision at its September meeting.

If the bears launch another offensive, bearish technical patterns will be required to justify short positions. At present, no such patterns are available. Meanwhile, the bulls have already received a fresh buy signal. The next upward targets are the highs of July 15 and May 1, located at 1.3557 and 1.3656, respectively.