Fundamental Market Analysis for August 14, 2026 (EURUSD, GBPUSD, USDJPY)
Event to watch today:
15:30 EET. USD – Retail Sales Change
EURUSD:
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The euro is supported by firmer expectations regarding ECB policy. A recent survey of economists shows that most expect another rate hike in September, as eurozone inflation remains above target and the economy grew more strongly than expected in the second quarter. This combination limits the case for a rapid shift toward a softer policy stance and supports the European currency.
At the same time, the US dollar has lost momentum following July producer price data, which showed no monthly increase despite market expectations for a rise. Combined with moderate consumer inflation, this reduced the probability of a Federal Reserve rate hike in September to around 35%. Lower rate expectations reduce the dollar’s interest rate advantage and create conditions for a recovery in EURUSD.
The main risk to this scenario comes from today’s US retail sales data. A strong reading could revive demand for the dollar and partly change market expectations for Federal Reserve policy. Until the release, however, the euro retains an advantage due to the combination of firmer ECB expectations and reduced expectations for a US rate hike. If this backdrop persists, the base-case scenario supports further gains in EURUSD.
Trading idea: BUY 1.1535, SL 1.1510, TP 1.1590
GBPUSD:
The pound enters Friday’s session supported by UK economic data. UK GDP rose by 0.3% in June after showing no growth in May, with the improvement driven primarily by consumer spending and business investment. These figures strengthened the view that the economy remains resilient and give the market little reason to shift its Bank of England expectations toward a softer policy stance.
The external backdrop has also become more favorable for GBPUSD. Unchanged US producer prices in July reinforced the impact of moderate consumer inflation data and reduced the probability of a Federal Reserve rate hike in September. For sterling, this matters because it narrows the US dollar’s relative interest rate advantage, while UK markets continue to price in another Bank of England rate hike this year.
Today’s US retail sales data could significantly affect short-term demand for the dollar, so the potential for further movement depends on confirmation of the weaker US dollar impulse. At the same time, sterling’s domestic backdrop looks more resilient than at the start of the week: economic growth and persistent rate expectations provide local support for the currency. As long as these factors remain in place, the bias continues to favor further gains in GBPUSD.
Trading idea: BUY 1.3495, SL 1.3465, TP 1.3570
USDJPY:
The yen has returned to the spotlight after USDJPY moved back toward the 159.4 area. Markets now put the probability of a Bank of Japan rate hike in September at around 76%, significantly higher than at the end of July. The yen is also receiving support from the risk of renewed official action, as Japanese authorities remain prepared to respond to excessive currency weakness following the recent coordinated intervention.
Pressure from the dollar side has increased following softer US inflation data. Producer prices did not rise in July, while the probability of a Federal Reserve rate hike in September fell to around 35%. This weakens support for USDJPY from US interest rate expectations and makes the dollar’s previous advantage less sustainable, particularly as markets anticipate further tightening by the Bank of Japan.
The main risk to a decline in the pair comes from today’s US retail sales data and the possibility of market disappointment if the Bank of Japan fails to confirm a faster pace of rate increases. For the current session, however, the combination of weaker US dollar momentum, a high probability of a September Bank of Japan move, and the authorities’ sensitivity to yen weakness outweighs these risks. The base-case scenario therefore allows for a decline in USDJPY.
Trading idea: SELL 159.35, SL 159.75, TP 158.45
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