Fundamental Market Analysis for August 7, 2026 (EURUSD, GBPUSD, USDJPY)
Event to watch today:
15:30 EET. USD - Non-Farm Employment Change
EURUSD:
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The euro begins the session against a mixed domestic backdrop. Eurozone inflation accelerated to 2.9%, while the core rate rose to 2.5%, maintaining expectations of further ECB policy tightening. Second-quarter economic growth was more resilient than forecast. However, the unexpected decline in Italian industrial production shows that the recovery remains uneven and is not providing the euro with an independent source of strength against the dollar.
The main driver of the day is the US labor market report. The market expects employment growth to accelerate following the weak June result, while unemployment is forecast to remain at 4.2%. The Federal Reserve kept its policy rate within the 3.50–3.75% range in July and continues to emphasize that future decisions will depend on incoming data. Ahead of the release, this supports cautious demand for the dollar amid persistent inflationary pressure.
The euro is receiving support from expectations surrounding the ECB, but this factor has already been largely priced in and is constrained by the uneven economic picture across the region. Unless US employment data comes in significantly below expectations, the dollar may retain the advantage. The baseline scenario allows for a moderate decline in EURUSD, while a weak US report remains the main risk to the selling idea.
Trading idea: SELL 1.1525, SL 1.1555, TP 1.1455
Event to watch today:
15:30 EET. USD - Non-Farm Employment Change
GBPUSD:
The pound enters the session without a convincing domestic advantage. The Bank of England kept its policy rate at 3.75%, as policymakers need more time to assess the impact of higher energy costs on inflation. The UK construction PMI rose to 44.7 in July but remained below the threshold separating expansion from contraction. This points to a slower decline but does not confirm a strong recovery in demand.
The market is pricing in the possibility of a Bank of England rate increase before the end of the year, and these expectations are limiting pressure on the British currency. However, the potential support remains constrained: inflation has slowed to 2.6%, the labor market has become less tight, and high borrowing costs continue to affect consumers and businesses. Without firmer signals from the central bank, some of these expectations may be revised against the pound.
US employment data remains the decisive factor for GBPUSD during the current session. The Federal Reserve maintains a higher policy rate than the Bank of England and remains open to further action if inflation proves persistent, meaning neutral or strong data could reinforce demand for the dollar. In the absence of a fresh UK-specific driver, the priority remains a moderate decline in the pair, while a weak US report could quickly change the scenario.
Trading idea: SELL 1.3455, SL 1.3490, TP 1.3370
Event to watch today:
15:30 EET. USD - Non-Farm Employment Change
USDJPY:
The yen remains supported following the joint actions taken by Japan and the United States in the foreign exchange market on July 31. The officially confirmed purchase of the Japanese currency demonstrated the authorities’ readiness to counter excessive exchange-rate volatility, limiting the upside potential for USDJPY. However, the effect of the intervention is fading as the market once again focuses on the substantial interest rate differential.
The Bank of Japan is maintaining its short-term policy rate at around 1.0%, while the Federal Reserve’s target range stands at 3.50–3.75%. The yield on the 10-year US Treasury remains near 4.68%, supporting the dollar’s appeal in interest rate differential trades. The Bank of Japan’s current policy has not yet eliminated the gap with the United States, while no new confirmed action by the authorities has followed the intervention.
The key test will be the US employment report. A result in line with or above expectations could support Treasury yields and extend the dollar’s recovery against the yen. The risk of another intervention calls for a cautious target, but it does not by itself outweigh the interest rate advantage. Under the current conditions, the baseline scenario allows for a moderate rise in USDJPY, while weak US data would strengthen demand for the yen.
Trading idea: BUY 158.30, SL 157.90, TP 159.20
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