Technical Analysis

Currency Hedger August 21, 2026 No Comments

USD/JPY Price Forecast: 20-day EMA remains key hurdle

USD/JPY trades flat at around 159.00 as both currencies underperform their peers.
The US aims to double the pace of its bond-buying operations to curb rising borrowing costs.
Japan’s National CPI ex. Fresh Food arrives higher at 1.8% YoY, as expected.

The Japanese Yen (JPY) trades in a limited range at around 159.00 against the US Dollar (USD) during the Asian trading session on Friday. The pair consolidates, while both the JPY and the USD are underperforming against their other currency peers.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.14%	-0.11%	-0.06%	-0.19%	-0.41%	-0.45%	-0.12%
EUR	0.14%		0.03%	0.07%	-0.08%	-0.27%	-0.29%	0.03%
GBP	0.11%	-0.03%		0.04%	-0.10%	-0.28%	-0.33%	-0.00%
JPY	0.06%	-0.07%	-0.04%		-0.12%	-0.34%	-0.39%	-0.05%
CAD	0.19%	0.08%	0.10%	0.12%		-0.22%	-0.25%	0.07%
AUD	0.41%	0.27%	0.28%	0.34%	0.22%		-0.05%	0.29%
NZD	0.45%	0.29%	0.33%	0.39%	0.25%	0.05%		0.34%
CHF	0.12%	-0.03%	0.00%	0.05%	-0.07%	-0.29%	-0.34%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

However, financial market experts are of the view that the Japanese currency could outperform the US Dollar as the Bank of Japan (BoJ) is expected to remain on a tight monetary policy path. Also, the United States (US) Treasury Department’s plans to double down on its debt-repayment plans, in an effort to curb higher borrowing costs, would keep the US Dollar under pressure.

Dollar pullback eases pressure on USD/JPY as BoJ rate path eyed

Rabobank’s FX team notes that the recent move lower in the Dollar, following news of Treasury Secretary Bessent’s buyback plans, has helped relieve some of the immediate strain on the pair, with “USD/JPY … steered a little further away from the psychologically important 160 level.”

Looking ahead, the bank anchors its outlook on the expectation that the BoJ will quicken the pace of tightening, stating that “on the assumption that the BoJ will accelerate the pace of rate hikes, we maintain a 3-month USD/JPY forecast of 158,” while cautioning that they “cannot rule out the possibility of further attempts at the upside in the near-term.”

Meanwhile, higher-than-expected Japan’s National Consumer Price Index (CPI) data for July has reinforced BoJ interest rate hike expectations.

Earlier in the day, the Statistics Bureau of Japan reported that the CPI ex. Fresh Food grew at a faster pace of 1.8% Year-on-Year (YoY), as expected, faster than 1.6% in June.

USD/JPY Technical Analysis

In the daily chart, USD/JPY trades at 158.98, maintaining a bearish near-term tone as it holds beneath the 20-day exponential moving average (EMA) at 159.59. Price action remains capped by this dynamic resistance, suggesting upside attempts are likely to struggle while the pair trades below the short-term trend metric.

The Relative Strength Index (RSI) at 43.50 stays in neutral territory, hinting at modest bearish pressure rather than oversold conditions.

On the topside, immediate resistance is located at the 20-day EMA at 159.59, and a sustained break above this level would be needed to ease the current downside bias and allow for a stronger recovery phase. Looking down, the August 20 low near 158.00 is the key supply level, followed by the August 7 low at 156.68.

Currency Hedger August 21, 2026 No Comments

New Zealand Dollar extends gains to fresh high since June, above mid-0.5900s vs softer USD

NZD/USD retains its positive bias for the third straight day amid a combination of supporting factors.
Receding Fed-hike bets weigh on the USD, while bets for another RBNZ rate hike support the NZD.
Geopolitical risks could limit losses for the safe-haven USD and cap the pair ahead of flash US PMIs.

The NZD/USD pair attracts buyers for the third straight day and climbs to a fresh high since early June, around the 0.5965-0.5970 region during the Asian session on Friday. Spot prices remain on track to register strong weekly gains amid a supportive fundamental backdrop.

The US Dollar (USD) struggles to capitalize on the previous day’s bounce from a three-month low amid receding bets for an immediate interest rate hike by the US Federal Reserve (Fed). The New Zealand Dollar (NZD), on the other hand, draws some support from expectations of another interest rate hike by the Reserve Bank of New Zealand (RBNZ). These turn out to be key factors lending support to the NZD/USD pair.

Meanwhile, investors remain worried about inflation risks stemming from higher oil prices due to the Middle East crisis. Adding to this, hawkish FOMC Minutes released on Wednesday keep the door open for some policy tightening by the US central bank. Furthermore, traders continue to price in the geopolitical risk premium amid the US-Iran stalemate over the Strait of Hormuz, which should limit losses for the safe-haven buck.

In the latest developments, President Donald Trump said that the US will launch the most crushing economic operation against Iran and threatened severe penalties on any nation that helps Tehran evade sanctions or does business with Iran. Moreover, Vice President JD Vance said that economic pressure is the most effective tool against Iran. This warrants some caution for USD bears and positioning for further NZD/USD appreciation.

On the economic data front, New Zealand recorded a monthly trade deficit of NZ$1.95 billion in July. This, however, does little to provide any meaningful impetus as spot prices remain at the mercy of USD price dynamics. Traders now look forward to the release of flash US PMIs, which, along with the incoming geopolitical headlines, will drive the buck and produce short-term trading opportunities around the NZD/USD pair.

NZD/USD 4-hour chart

The NZD/USD pair is extending its gains above the 200-period Exponential Moving Average (EMA) at 0.5851, which now underpins a bullish near-term bias. Any corrective pullback could find demand near the said pivotal support before the broader bullish structure is questioned.

Currency Hedger August 21, 2026 No Comments

British Pound edges higher to near 1.3650, UK Retail Sales data looms

GBP/USD strengthens to around 1.3645 in Friday’s early Asian session.
A disappointing US jobs report and softer inflation data dialed back bets of tighter Fed monetary policy.
BoE is expected to hold rates for the remainder of the year.

The GBP/USD pair gathers strength near 1.3645 during the early Asian trading hours on Friday. The US Dollar (USD) softens against the British Pound (GBP) amid fading Federal Reserve (Fed) rate hike expectations. Traders brace for the UK Retail Sales data for July, which will be published later on Friday.

Softer US economic data and uncertainty over Fed policy exert some selling pressure on the Greenback. Charu Chanana, chief investment strategist at Saxo, said that higher Treasury yields do not necessarily underpin the USD if investors believe the increase reflects fiscal risk, heavier government borrowing or persistent inflation, rather than stronger US growth or tighter monetary policy.

Markets are pricing ‌in a 64% chance that the US central bank will keep rates unchanged in September and a 36% chance of a hike, according to the CME FedWatch Tool.

The Bank of England (BoE) is likely to leave interest rates unchanged at 3.75% for the rest of the year, according to a strong majority of economists polled by Reuters.

Traders await the UK July Retail Sales data for more cues about the UK interest rate outlook. Economists project the Retail Sales to decline by 0.5% MoM in July, compared to 1.0% in June. In case of a weaker-than-expected outcome, this could drag the Cable lower in the near term.

BoE rate expectations ease as UK data undercuts hawkish bets

Analysts at Danske Bank note that the latest inflation release, when viewed alongside “yesterday’s weak labour market data,” has helped cool expectations for further tightening. They highlight that the combination of softer price dynamics and labour market signals “has taken the top off BoE pricing for the remainder of the year.”

Fed’s Musalem flags inflation risks and hints at case for pre-emptive hikes

Fed’s Musalem delivered a speech broadly in line with the established baseline, with the FXS Speechtracker score at 7/10 matching the historical average and signaling a familiar mix of concern and caution. The emphasis on strong growth, accommodative financial conditions, underlying inflation stuck around 2.5%-3%, and the notion that “hiking rates now could save more aggressive action later” tilts the tone modestly hawkish, even as Musalem stresses Fed credibility and independence from fiscal policy. References to high input costs, the risk of a Super El Nino supply shock, and the view that current policy is neutral or accommodative underscore a bias toward tighter policy if inflation fails to converge to 2%, while avoiding explicit guidance ahead of the September FOMC.

The FXS Fed Sentiment Index slipped by 0.34 points to 132.42, indicating a slight pullback in hawkishness relative to the prior reading but remaining firmly above the 100 neutral line. This configuration suggests the Fed is still perceived as operating in hawkish territory despite the marginal softening, consistent with a speech that acknowledges accommodative conditions yet frames pre-emptive tightening as a live option, as captured by the FXS Speechtracker.

Technical Analysis: GBP/USD keeps a bullish vibe amid overbought RSI momentum

In the daily chart, GBP/USD maintains a bullish near‑term bias as spot holds above both the 100‑day simple moving average (SMA) and the Bollinger 20‑period middle band. Price is pressing toward the upper Bollinger band, highlighting a strong topside extension, while the Relative Strength Index (14) at about 71 shifts into overbought territory, suggesting that upside momentum is robust but increasingly vulnerable to a corrective pause.

On the topside, immediate resistance is located at the Bollinger upper band at 1.3665, and a sustained break above this level would open the path for further gains in the broader up‑move. On the downside, initial support emerges from the Bollinger middle band cluster around 1.3485, followed by the 100‑day SMA at 1.3432, with deeper demand seen near the lower Bollinger band at 1.3300; a pullback towards this layered support zone would likely be seen as a dip‑buying opportunity while price holds above the 100‑day average.

Currency Hedger August 21, 2026 No Comments

United States Dollar Index trades around 99.75-99.70, hangs near three-month low

DXY struggles to capitalize on the previous day’s modest bounce from an over three-month trough.
Receding Fed-hike bets undermine the USD, though geopolitical risks help limit any further losses.
Inflation risks support US bond yields, warranting caution for USD bears amid the US-Iran standoff.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts fresh sellers during the Asian session on Friday, stalling the previous day’s modest bounce from the vicinity of mid-98.00s, or the lowest since May 14. The index currently trades around the 98.80-98.75 region, down 0.10% for the day, and seems poised to register heavy weekly losses.

Traders pared their bets for an immediate interest rate hike by the Federal Reserve (Fed) following the release of soft US inflation figures last week, which is seen as acting as a headwind for the US Dollar (USD). Meanwhile, the immediate market reaction to the US Treasury Department’s announcement that it will double the size of some long-dated debt buyback operations fades rather quickly amid inflation risks stemming from higher energy prices.

In fact, crude oil prices touched a fresh three-week high on Thursday after President Donald Trump said that the US will launch the most crushing economic operation against Iran. Trump also threatened severe penalties on any nation that helps Iran evade sanctions or does business with Iran. This keeps geopolitical risk premium in play, which might hold back traders from placing aggressive bearish bets on the safe-haven Greenback.

Moreover, the CME Group’s FedWatch Tool indicates that investors are still pricing in around a 68% chance that the US central bank will raise borrowing costs at least once by the end of this year. The outlook, in turn, remains supportive of elevated US bond yields and should limit further losses for the DXY. Hence, it will be prudent to wait for some follow-through selling before positioning for any further USD-depreciating move.

DXY daily chart

Technical Analysis

The DXY keeps a bearish near-term tone beneath the 200-day Simple Moving Average (SMA) at 99.16 and key Fibonacci retracement levels overhead. The failed attempt to sustain above the 78.6% retracement at 98.52 earlier in the week leaves price exposed to further downside while rallies are likely to be capped by the dense cluster of resistance formed by the 200-day SMA and the 61.8% retracement at 99.22.

Currency Hedger August 21, 2026 No Comments

Australian Dollar gains ground above 0.7100 as US debt concerns weigh on US Dollar

AUD/USD edges higher to around 0.7135 in Friday’s Asian session.
Traders are still worried about growing US debt, undermining the US Dollar.
RBA faces new pressure to pause rate hikes as unemployment rises again.

The AUD/USD pair gains traction to near 0.7135 during the Asian trading hours on Friday. The US Dollar (USD) weakens against the Australian Dollar (AUD) and is set for a weekly loss as traders viewed the US Treasury’s bond buyback gambit as merely a temporary fix.

The preliminary readings of the US Purchasing Managers Index (PMI) are due later on Friday. US Treasury Secretary Scott Bessent said on Thursday that the Treasury could increase bond buybacks beyond $4 billion, partly to signal that current yields do not reflect underlying economic fundamentals. He stressed that interest rates have nothing to do with the buyback decision.

This action came after the department announced it would double the size of buybacks on longer-dated securities over the next quarter in an attempt to stem a sharp rise in yields. The Greenback has declined following these headlines as markets grew wary of the deteriorating fiscal picture and worries about the credibility of US institutions resurfaced.

On the other hand, disappointing Australian labor data might cap the upside for the pair. The Australian Bureau of Statistics revealed on Thursday that employment unexpectedly fell by 15,800 jobs in July. This figure came in weaker than the market expectations of 15,000 gains, pushing the Unemployment Rate up to 4.5%.

“The rise in unemployment marginally strengthens the case for the RBA to hold, particularly given broader signs of weakness in the economy,” said Ray White chief economist Nerida Conisbee.

Australia labour data softens as unemployment edges higher

Analysts at BNY highlight a further cooling in Australia’s employment backdrop, noting that the July 2026 Labour Force Survey “showed a softer labor market with the unemployment rate edging up to 4.5% from 4.4%.” This modest deterioration in job conditions, alongside earlier evidence of weaker participation and hours worked, reinforces concerns that the labour market is losing momentum just as gross federal debt climbs above AU$1tn and interest costs are projected to rise steadily toward 2030.

Fed’s Musalem flags upside inflation risks, keeps Dollar bulls alert despite cautious tone

Fed’s Musalem delivered a speech that aligns with the established baseline, with a 7/10 FXS Speechtracker score matching the historical average and signaling a steady, moderately hawkish stance. Emphasis on strong growth, accommodative financial conditions, underlying inflation stuck around 2.5%-3%, and the notion that hiking rates now could avert more aggressive action later underscores upside inflation risks even as Musalem stresses Fed credibility and policy independence from fiscal pressures. The acknowledgement of potential new supply shocks such as a “super El Nino” and crowded-out credit in parts of the economy adds a risk-aware tone that tempers the hawkish bias but still leans toward pre-emptive tightening rather than complacency.

The FXS Fed Sentiment Index slipped by 0.34 points to 132.42, indicating a modest pullback in perceived hawkishness while remaining firmly above the neutral 100 mark. This configuration suggests that, despite a slight softening in tone, the Fed narrative remains in hawkish territory, with Musalem’s remarks reinforcing a bias toward further tightening if inflation fails to converge convincingly toward the 2% target.

Technical Analysis: AUD/USD

In the daily chart, AUD/USD maintains a bullish near-term bias as price holds above the 100-day simple moving average (SMA) and the Bollinger middle band. The pair is pressing towards the upper Bollinger band, signaling an upside extension of the recent advance, while the Relative Strength Index (14) at 65.95 hovers just below overbought territory, hinting that bullish momentum remains firm but increasingly stretched.

On the topside, initial resistance is located at the upper Bollinger band near 0.7150, where buyers may hesitate after the latest run-up. On the downside, immediate support is seen at the 100-day SMA around 0.7070, followed by the Bollinger middle band near 0.7055, with a deeper cushion at the lower Bollinger band around 0.6958 if a broader corrective phase unfolds.

Currency Hedger August 21, 2026 No Comments

Swiss Franc edges up against US Dollar amid heightened US debt concerns

The Swiss Franc bounces back against the US Dollar after a corrective move on Thursday.
Ballooning US government debt levels have dampened the appeal of the US Dollar.
The Fed is expected to leave interest rates unchanged in the September meeting.

The Swiss Franc (CHF) resumes its upside journey against the US Dollar (USD) on Friday after a corrective move the previous day. The USD/CHF pair is down 0.17% to near 0.7990 in the Asian trading session.

The Swiss Franc pair is expected to remain under pressure as heightening United States (US) debt concerns have weighed on the US Dollar.

On Wednesday, the US Treasury Department unveiled its plans to double the pace of its debt repayment, in an effort to curb higher borrowing costs. The announcement led to a sharp decline in US Treasury yields and the US Dollar.

However, bond yields recovered a majority of their losses, as financial markets warned that the government’s bond-buying plan would prove to be a temporary solution.

US Treasury buybacks flatten curve as fiscal credibility weighs on Dollar

Strategists at Brown Brothers Harriman note that “US long-term Treasury yields have retraced most of yesterday’s drop triggered by the US Treasury’s buyback announcement, while USD has extended its decline.” They explain that “the Treasury buyback is essentially a debt-management swap,” in which the authorities “buy and retire older, less liquid bonds (off-the-run) in favor of new, more liquid debt (on-the-run) issued through its regular auction.” As a result, “total debt stays the same, but its composition shifts toward newer, more liquid securities.”

BBH expects that “the additional buyback size will probably be financed at the margin through greater bill issuance.” In their view, “more front-end supply combined with long-bond purchases, point to a flatter yield curve,” although they stress that “the impact should be limited given the small size of the operations relative to the overall Treasury market ($31.4 trillion).”

However, the bank is more uneasy about the policy signal. BBH argues that “the timing of the Treasury’s buyback announcement sends a less comfortable message,” noting that “the Treasury expanded the long-end buybacks shortly after the 30-year Treasury yield reached its highest level since 2007.” For them, this “suggests that heavy debt supply (public and private) is beginning to strain long-end liquidity and the Treasury is increasingly uncomfortable with rising borrowing costs.” Their “bottom line” is that “the perception the Treasury is managing yields rather than liquidity undermines US fiscal credibility and is a drag on USD.”

Meanwhile, rising government debt levels are undermining the appeal of the US currency.

In addition to rising US debt levels, firm expectations that the Federal Reserve (Fed) will not cut interest rates in the September meeting are also hurting the US Dollar.

USD/CHF Technical Analysis

In the daily chart, USD/CHF trades at 0.7990, keeping a bearish near-term bias as it remains below the 20-day Exponential Moving Average (EMA) at 0.8080. The pair has recently slipped back towards the 0.80 handle, and price trading under the short-term EMA suggests rallies are likely to be capped while the broader uptrend support line from 0.7609 stays intact beneath the market. The Relative Strength Index (RSI) at 38.8 drifts in bearish territory but is not yet oversold, hinting that selling pressure could persist without an immediate exhaustion signal.

On the downside, initial support appears at the recent pivot zone around 0.7990, followed by the former break level of the rising trend line near 0.7922. On the topside, the 20-day EMA at 0.8080 is the first notable resistance, and only a sustained move above this barrier would start to ease the current bearish tone and open the way for a more meaningful recovery.

Currency Hedger August 20, 2026 No Comments

Trade of The Day – GBP/CHF

Facts

GBPCHF returned today above the 50-day exponential moving average (EMA50; dark violet) and the lower 2-week Bollinger Band (black).
The yield spread between UK and Swiss 10-year government bonds is 2.7 bps below its August 14 level (4.625% vs. 4.652%), which marked the local peak for the pair.

Recommendation

Position: Long (BUY) on GBPCHF at market price
Take Profit (TP): 1.09354 (TP1), 1.09670 (TP2)
Stop Loss (SL): 1.08070

Source: xStation5

Opinion

Yesterday, the GBPCHF exchange rate slid to its lowest level since July 31, 2026, driven by a proportionally larger appreciation of the Swiss franc than the pound relative to the US dollar following the US Treasury’s announcement of accelerated long-term bond buybacks. Switzerland, with its highly conservative public finances (a debt-to-GDP ratio of 16.1% in 2025, compared to 94.3% in the UK), remains a classic beneficiary of debt market realignments. Aside from broader global bond market trends, key core fundamentals for GBPCHF support the continuation of the broader trend despite yesterday’s sell-off. The magnitude of the decline in the 10-year yield spread between the two economies was far smaller than the drop in the spot market—the spread has already recovered roughly half of its losses from the last two sessions and is trading just below its local peak. Additionally, options market positioning shows no major shifts, though a higher premium continues to be paid for downside hedging on GBPCHF. Recent broad-based strength in the pound also reflects favorable investor sentiment toward the new government (particularly regarding the more fiscally cautious Chancellor). Consequently, Andy Burnham’s political honeymoon period could provide an extra tailwind for GBPCHF upside momentum.

Methodology

This recommendation was prepared based on a technical analysis of the GBPCHF chart and a fundamental analysis of the respective economies (monetary policy in Switzerland and the UK). The directional bias was determined using moving averages, Bollinger Bands, and bond market trends. Take Profit and Stop Loss levels were established using Fibonacci retracements and price action:

TP1 is set at the 23.6% Fibonacci level;
TP2 is set at the 38.2% Fibonacci level;
SL is placed at the 100.0% Fibonacci level, representing the low since July 13.

Currency Hedger August 20, 2026 No Comments

Chart of The Day – USD/JPY Falls Ahead of a Key Test for the Yen

The USDJPY pair weakened by over 0.9% yesterday, significantly moving away from the key psychological barrier at the 160 level. Currently, the rate is oscillating around 158.5, awaiting the release of key data for the Japanese currency.

Department of the Treasury Intervention

Crucial for yesterday’s move were, of course, the words of Scott Bessent, the US Secretary of the Treasury, who announced plans yesterday to double the purchase of long-term US bonds. The program is scheduled to take effect on September 9 and run at least until November 4, when the Department of the Treasury will release new quarterly plans. The focus will be mainly on the long end of the curve, i.e., the purchase of Treasury bonds with long maturities. The decision means an increased supply of dollars on the market, which naturally led to a depreciation of the US currency. The yen was among the biggest beneficiaries. Figure 1: Performance of Selected Currencies (19.08.2026)

Source: XTB Research, 20.08.2026

Inflation Data

July inflation data from Japan is scheduled for release on Friday. The reading is expected at 12:30 AM. An hour later, we will receive the August PMI data. Figure 2: Japan CPI Inflation (2010 – 2026)

Source: XTB Research, 20.08.2026 Appetite for a hawkish surprise was whetted by the leading indicator for Tokyo published at the end of July. Core inflation in the Japanese capital unexpectedly accelerated from 1.6% to 1.9% y/y, beating the market consensus (1.7%). If Friday’s reading confirms this trend and shows rising price pressure, the Bank of Japan will gain further arguments for maintaining a restrictive monetary policy course. The next meeting is in less than a month, on September 18. Let us recall that in July, the BoJ kept interest rates unchanged (1%). A decision to hike could be a significant declaration for the market, leading to an increase in bets on further upward moves in the coming months.

Technical Analysis

Figure 3: USDJPY [D1] (18.12.2025 – 07.08.2026)

Source: xStation, 20.08.2026 Since April 2025, the USDJPY pair has been in a clear, stable uptrend. After setting a local peak around the 164 level, the market entered a phase of a very dynamic, deep downward correction. The current price is oscillating around 158.5, and the market is clearly looking for a solid bottom from which it could stage a more lasting rebound. The key barrier for the demand side currently remains the strategic resistance zone located around the psychological level of 160 (marked with a thick green line). This is a point of dual technical significance, as it almost coincides with the 100-period moving average. In recent days, buyers attempted to initiate an uptrend, but after reaching the vicinity of the 50% Fibo retracement and testing the long-term 150-period moving average (blue line, level around 159.2), they ran out of steam. The price fell below the key moving averages (EMA 50 and EMA 100). The RSI indicator, after a previous strong plunge, managed to rebound, but is currently sliding back to the 40.6 level. The positive bars of the MACD histogram are also shrinking.