Fundamental Market Analysis for August 12, 2026 (EURUSD, GBPUSD, USDJPY)

Event to watch today:

15:30 EET. USD – Consumer Price Index

EURUSD:

The euro begins the session without a new local catalyst strong enough to independently determine the pair’s direction. July business activity data from the euro area showed improvement in the services sector, while inflation remains high enough to keep expectations of further ECB tightening alive. This provides some support for the single currency, although these signals are already largely reflected in market pricing.

The US dollar retains a moderate advantage ahead of the release of the July Consumer Price Index. The market is almost evenly split between expectations that the Federal Reserve will keep rates unchanged and raise them in September, meaning any deviation in inflation from forecasts could materially affect exchange rates. Higher oil prices also mean that a renewed increase in US price pressures cannot be fully ruled out.

For EURUSD, the key issue is the balance between support for the euro that has already been priced in and today’s risk of a reassessment of Federal Reserve expectations. Softer US inflation could quickly revive demand for the euro, but ahead of the report the dollar holds a slight advantage, while there is no fresh European catalyst strong enough to offset it. The baseline scenario allows for a moderate decline in EURUSD.

Trading idea: SELL 1.1535, SL 1.1565, TP 1.1460

GBPUSD:

The pound is receiving limited support from fresh signs that the UK labor market is stabilizing. A July industry survey showed that the decline in permanent hiring had come to an end and that starting salary growth had accelerated, reducing the risk of a sharp deterioration in domestic conditions. These signals matter for the Bank of England, but one survey alone is not enough to generate a sustained GBPUSD impulse.

The UK market’s attention is already shifting toward second-quarter GDP data due on Thursday. Until then, sterling remains dependent on the broader external environment and expectations for Federal Reserve policy. Today’s US inflation report could alter the market’s assessment of the September decision, while higher oil prices preserve the risk of more persistent price pressures and limit the scope for a rapid weakening of the dollar.

Local support for the pound is currently more likely to soften the pressure than reverse the pair’s direction. The US dollar impulse remains moderately positive, while UK data capable of materially changing expectations for the Bank of England are still ahead. Unless US inflation comes in significantly below expectations, the dollar may retain the advantage, supporting a downside scenario for GBPUSD.

Trading idea: SELL 1.3505, SL 1.3540, TP 1.3415

USDJPY:

The yen has weakened again after much of the impact from the recent coordinated actions by Japan and the United States in the foreign exchange market faded. At the same time, market participants have become more willing to price in the possibility of an earlier Bank of Japan rate hike, which has supported short-term Japanese government bond yields. This factor limits pressure on the yen but has not yet changed the broader backdrop.

For USDJPY, the difference in interest rate expectations between the two countries remains important. US Treasury yields remain elevated, while the market is not ruling out a Federal Reserve rate hike in September ahead of the US inflation release. Until the Bank of Japan signals a faster tightening cycle, the yield advantage remains with the dollar and continues to support the pair.

The main constraint on further gains is the risk of another response from the Japanese authorities following the recent large-scale support for the yen. A softer US Consumer Price Index could also quickly push yields lower and renew pressure on the dollar. The upside scenario for USDJPY therefore requires caution, but ahead of the data, the current combination of interest rate expectations and yen weakness still gives a moderate advantage to the BUY scenario.

Trading idea: BUY 159.30, SL 159.00, TP 159.90

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