**US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD, USD/JPY (August 15, 2025)**
*Original author: James Stanley*
The US dollar continues to assert its dominance in the global currency market, propelled by a combination of resilient economic metrics, hawkish Fed rhetoric, and persistent geopolitical risks. As we move through mid-August 2025, the greenback hovers near multi-week highs, challenging both technical and psychological levels across major pairs. This article will analyze key price action setups in four critical USD pairs: EUR/USD, GBP/USD, USD/CAD, and USD/JPY, examining recent movements, technical backdrops, and potential scenarios.
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## US Dollar Overview
A blend of fundamental and technical catalysts underpins the dollar’s strength. Economic growth in the United States has consistently outperformed expectations, prompting the Federal Reserve to maintain a restrained yet hawkish tone. The persistence of elevated inflation readings, along with strong headline job numbers, has led market participants to price in a delay for any potential Fed easing.
Key drivers for the US dollar:
– **Robust US economic performance**, with GDP and labour market data beating forecasts.
– **Sticky inflation**, which continues to hover above the Fed’s preferred targets.
– **Delayed expectations for rate cuts**, helping support yields across the curve.
– **Ongoing geopolitical uncertainty** and risk aversion, encouraging flows into US assets.
The above factors have translated into notable strength for the Dollar Index (DXY), which remains buoyed near the 105 level. As we analyze individual currency pairs, these fundamentals set the backdrop for heightened USD demand.
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## EUR/USD: Bearish Momentum Tests Technical Floors
The euro remains under pronounced selling pressure against the dollar, with EUR/USD breaking below key support levels to touch multi-week lows. A combination of divergent monetary policy expectations and lackluster Eurozone data have compounded euro weakness.
### Recent Price Action
– **EUR/USD broke below 1.0850**, a level that had served as support earlier in August.
– The pair quickly followed through, testing the 1.0800 and even approaching the 1.0750 region, which is now a key technical threshold.
– Momentum indicators on the daily timeframe show oversold conditions but have yet to reveal any compelling bullish divergence.
### Technical Analysis
– The **1.0750 area** stands out as immediate support, defined by a cluster of previous swing lows from May and June. A decisive daily close below this region could unlock a further decline towards the 1.0620 zone.
– On the upside, broken support at 1.0850 now acts as resistance. Should EUR/USD recover above this area, look for 1.0920 as the next significant hurdle.
– The pair remains entrenched in a **descending channel** on the four-hour and daily charts, keeping the broader outlook bearish barring a significant reversal signal.
### Key Considerations
– The likelihood of the **European Central Bank maintaining an accommodative stance** weighs on the euro.
– Persistent weakness in German industrial output and retail sales data have curbed demand for the single currency.
– Any firm break below 1.0750 could invite more sellers, targeting the March 2025 lows near 1.0620.
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## GBP/USD: Sterling Drifts as Rate Hike Bets Fade
The British pound has not been immune to the dollar’s strength, with GBP/USD retreating sharply from the summer’s highs above 1.3000. The combination of slowing UK inflation and a more cautious tone from the Bank of England has eroded support for sterling.
### Recent Price Action
– GBP/USD has slipped to threaten the **1.2650 area**, with the 1.2600 handle now attracting sellers.
– The pair has completed several consecutive bearish sessions, with no immediate sign of stabilization.
### Technical Analysis
– The **1.2590/1
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