Fundamental Market Analysis for August 5, 2026 (EURUSD, GBPUSD, USDJPY)
Event to watch today:
15:15 EET. USD – ADP Employment Change
17:00 EET. USD – ISM Services PMI
EURUSD:
The euro remains supported after the ECB decided to keep its key interest rates unchanged in July. The central bank also retained the option of further policy tightening, while eurozone inflation accelerating to 2.9% prevents the market from fully abandoning expectations of another rate increase. This limits pressure on the single currency, although lower oil prices may gradually reduce inflation risks.
The main driver of the current session is US dollar weakness. The American currency remains near a six-week low as falling oil prices have eased inflation concerns, US Treasury yields have declined, and the probability of a Federal Reserve rate increase in September has fallen. Against this backdrop, the divergence between Federal Reserve and ECB policy expectations has become less favorable for the dollar.
The market is awaiting ADP employment data and the US services business activity index today. Strong figures could restore some demand for the dollar, keeping confidence in the scenario moderate. However, until the data is released, the combination of lower US Treasury yields and resilient ECB rate expectations supports the base-case scenario of further EURUSD gains.
Trading idea: BUY 1.1540, SL 1.1510, TP 1.1615
GBPUSD:
The pound is receiving local support after the Bank of England decided to keep its interest rate unchanged at 3.75%. The vote was more restrictive than expected, with three committee members supporting an increase to 4.00%, reflecting continued concern over inflation risks. The new government’s cautious fiscal stance has also reduced part of the political risk premium, although weak economic momentum continues to limit the British currency’s potential.
For GBPUSD, the broader US dollar impulse remains more important and is still weak at the beginning of the session. Falling oil prices have reduced concerns about additional inflationary pressure in the United States, US Treasury yields have declined, and the probability of a Federal Reserve rate increase in September has decreased. This reassessment is temporarily supporting the pound despite the absence of strong domestic economic growth.
Attention during the session will first turn to UK business activity indices and then to the US ADP employment report and ISM services data. Weak UK figures could limit demand for the pound, while strong US data may reverse the current impulse. Until these risks materialize, less restrictive Federal Reserve expectations and the Bank of England’s policy signal preserve the advantage of the bullish GBPUSD scenario.
Trading idea: BUY 1.3455, SL 1.3420, TP 1.3540
USDJPY:
The yen is receiving fresh fundamental support following the release of the minutes from the Bank of Japan’s June meeting. The document showed that policymakers were paying increased attention to inflation risks and considering the possibility of further rate increases. Additional support came from data showing that real wages rose by 1.6% in June, marking a sixth consecutive monthly increase and strengthening the case for monetary policy normalization.
Pressure on USDJPY is also being reinforced by the recent joint intervention by the United States and Japan in support of the yen. Officials indicated that they were prepared to act again, while the US side publicly backed Tokyo’s efforts. At the same time, lower US Treasury yields and a reduced probability of another Federal Reserve rate increase are diminishing the appeal of interest rate differential trades.
Slower growth in Japan’s services sector remains a limiting factor, meaning that sustained yen appreciation is not guaranteed. Strong US ADP or ISM data could also restore demand for the dollar. Nevertheless, the combination of a weaker dollar impulse, expectations of further Bank of Japan action, and the risk of renewed official measures makes a decline in USDJPY the more resilient base-case scenario.
Trading idea: SELL 157.50, SL 158.15, TP 155.90
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