Fundamental Market Analysis for August 24, 2026 (EURUSD, GBPUSD, USDJPY)
EURUSD:
Eurozone business activity data strengthened the euro’s position at the start of the week. The preliminary composite PMI rose to 52.1 in August, its highest level since November, while new orders increased at the fastest pace in more than three years. Manufacturing activity also accelerated, reducing concerns about a sharp deterioration in the Eurozone economy.
For the ECB, this backdrop is accompanied by inflation that remains above the target level. Resilient economic activity and persistent price pressures allow the market to maintain expectations of a tighter interest rate path. At the same time, the US dollar is trading near multi-month lows after the US Treasury decided to increase buybacks of long-term bonds, reinforcing investor concerns about the sustainability of the American currency.
Strong activity in the US services sector may limit further selling pressure on the dollar, meaning EURUSD is unlikely to move in one direction without interruptions. Nevertheless, the combination of resilient Eurozone data and pressure on the dollar gives the euro an advantage during the current session. If the fundamental backdrop remains unchanged, the base-case scenario allows for further gains in the pair.
Trading idea: BUY 1.1680, SL 1.1645, TP 1.1765
GBPUSD:
The UK economy continues to show signs of resilience despite mixed data in recent days. The preliminary services PMI rose to a six-month high of 52.8 in August, while consumer confidence reached a two-year high. This reduces the risk of a sharp deterioration in domestic demand and provides support for the pound.
UK inflation accelerated to 2.9% in July, remaining above the Bank of England’s target. At the July meeting, three of the nine committee members had already voted for a rate increase, while the market continues to price in the possibility of tighter policy before the end of the year. A 0.5% decline in retail sales and an unexpected budget deficit are limiting factors for sterling, but they do not yet change the broader picture.
The external environment is also important for GBPUSD: the US dollar remains under pressure amid concerns over US debt policy and the expansion of long-term bond buybacks by the Treasury. Strong activity in the US services sector limits the scale of dollar weakness but does not change the main impulse of the current session. As long as UK data remain resilient, the growth scenario for GBPUSD retains the advantage.
Trading idea: BUY 1.3650, SL 1.3610, TP 1.3740
USDJPY:
The yen is receiving support from fresh Japanese inflation data. The core consumer price index rose by 1.8% year-on-year in July, up from 1.6% a month earlier, while the measure excluding fresh food and energy increased by 1.9%. These figures preserve expectations of another Bank of Japan rate increase and strengthen the fundamental support for the Japanese currency.
At the same time, the US dollar remains vulnerable due to the market’s reaction to expanded US Treasury buybacks of long-term government bonds and concerns surrounding public debt. Although strong activity in the US services sector supports the possibility of further Federal Reserve policy tightening, the current response in the currency market suggests that the debt-related factor is outweighing this argument for now.
The recent currency intervention in support of the yen also keeps the market sensitive to possible renewed action by the Japanese authorities if the currency weakens again. However, the main short-term factor remains pressure on the dollar from the US debt market. Combined with expectations of further steps by the Bank of Japan, this makes a decline in USDJPY the more sustainable base-case scenario for the current session.
Trading idea: SELL 158.90, SL 159.30, TP 157.90
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