Fundamental Market Analysis for August 3, 2026 (EURUSD, GBPUSD, USDJPY)

Event to watch today:

17:00 EET. USD – ISM Manufacturing Index

EURUSD:

The euro remains supported after the ECB decided to keep its key interest rates unchanged in July. Maintaining the existing policy settings gave the market no reason to expect immediate monetary easing, allowing the single currency to retain some demand. However, the Federal Reserve’s rate remains higher, and the European backdrop alone is not strong enough to generate sustained gains.

The main driver of the current session is US dollar weakness following confirmed coordinated operations by the United States and Japan to support the yen. Pressure on the dollar has spread beyond USDJPY: the US Dollar Index remains lower after a notable weekly decline, while the yield on the 10-year US Treasury note has fallen. This combination supports EURUSD despite the interest rate differential remaining in favor of the United States.

The market is awaiting US manufacturing activity data, which could alter expectations regarding the Federal Reserve’s next steps. A strong report may restore some demand for the dollar, but until its release, the weakening impulse in the US currency remains dominant. If the current fundamental backdrop persists, the base-case scenario allows for further gains in EURUSD.

Trading idea: BUY 1.1530, SL 1.1495, TP 1.1605

GBPUSD:

The pound is receiving support after the Bank of England kept its interest rate unchanged at 3.75%. Three members of the committee voted for an increase, indicating continued concern about inflation and limiting expectations of near-term monetary easing. At the same time, the narrow margin in the United Kingdom’s public finances remains a restraining factor and prevents the domestic backdrop from appearing entirely positive.

The broader currency-market impulse currently favors GBPUSD. Coordinated action by the United States and Japan to support the yen has increased pressure on the dollar, while lower US Treasury yields have reduced the appeal of the American currency. The pound approached a two-week high before giving back part of its gains, suggesting that the move has not yet been fully exhausted.

US manufacturing activity figures will provide the main test of this scenario. If the data prove resilient, expectations of a firmer Federal Reserve stance could revive demand for the dollar and limit the pair’s upside. For now, however, the combination of a weak dollar impulse and the Bank of England’s cautious position leaves the pound with an advantage, making the buying idea consistent with the current fundamental backdrop.

Trading idea: BUY 1.3470, SL 1.3430, TP 1.3570

USDJPY:

The yen remains the main source of movement in the currency market after Japan and the United States confirmed coordinated operations to support it. The market remains highly alert to the possibility of further action by the authorities, while the unwinding of large positions against the Japanese currency is strengthening demand for the yen. During the current session, this factor carries more weight than the dollar’s usual appeal in interest rate differential trades.

The Bank of Japan kept its short-term interest rate near 1%, although one board member supported an increase to 1.25%. The central bank also maintained the possibility of further tightening if inflation risks intensify. The interest rate differential with the United States continues to support USDJPY over the medium term, but following the confirmed intervention, it no longer provides the dollar with the same one-sided advantage.

Lower US Treasury yields and the broader weakness of the dollar are adding to the pressure. Strong US manufacturing data could trigger a recovery in the pair, so the scenario requires caution. However, while the risk of further official yen purchases remains, the priority stays with additional declines in USDJPY.

Trading idea: SELL 156.55, SL 157.20, TP 155.10