**US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/CAD, USD/JPY (Published August 15, 2025)**
*By James Stanley, Forex.com*
The US dollar stands at the crossroad of major macro themes as we step into mid-August 2025. Recent weeks have seen heightened volatility across major currency pairs, spurred by shifting Federal Reserve interest rate policies, evolving economic data, and international developments. In this detailed analysis, we examine the price action for key USD pairs including EUR/USD, GBP/USD, USD/CAD, and USD/JPY, outlining support and resistance zones and discussing potential scenarios as the market digests fresh guidance from the Federal Reserve and other central banks.
—
## Overview: The US Dollar in Focus
The US dollar’s trajectory continues to be influenced by the Federal Reserve’s communications. Uncertainty around the timing and extent of future rate cuts has created pronounced swings in the greenback. The July CPI report showed modest cooling in inflation, yet robust labor market data and resilient consumer spending have provided some cushion for the dollar.
Key factors impacting USD price action:
– Unresolved path for Fed rate cuts, with markets wavering between September and December timelines
– Mixed US economic data, especially on inflation and employment
– International headwinds, including slowing growth in China, Bank of Japan’s cautious normalization, and ongoing policy restatements from the European Central Bank and the Bank of England
These factors create an environment filled with both risk and opportunity for traders, particularly in the four major currency pairs analyzed below.
—
## EUR/USD: Range-Bound but Vulnerable
The Euro has struggled to build consistent momentum against the dollar, with EUR/USD largely maintaining a broad range. The pair flickers between optimism from improving Eurozone PMIs and worries about sluggish German growth and persistent inflation. The European Central Bank remained cautious in its recent meeting, resisting commitments to further hikes, but also unwilling to telegraph cuts with conviction.
### Key Price Levels for EUR/USD
– **Resistance:**
– 1.0890 – 1.0925: Old support, now resistance; market rejected at this zone in July and again in early August.
– 1.1010 – 1.1040: Multi-week highs, multi-touch zone reinforcing technical resistance.
– **Support:**
– 1.0735 – 1.0750: Consolidation platform from late June and early July.
– 1.0635: 2023 swing-low support.
### Technical and Fundamental Factors
– **Ranging Behavior:** EUR/USD has repeatedly tested and rejected both resistance and support, signaling uncertainty and a lack of strong conviction from buyers or sellers.
– **ECB Outlook:** No imminent easing, but tepid economic data continues to weigh on the Euro.
– **Fed Positioning:** US yields remain comparatively attractive, limiting EUR/USD breakout potential in the short term.
#### Strategy Considerations
– **Range Trading:** Given the recurring reversals at range extremes, selling rallies near resistance (1.0890-1.0925) and buying dips at support (1.0735-1.0750) remains favored until a decisive breakout occurs.
– **Breakout Watch:** Sustained move above 1.0925 could re-open 1.1000; breakdown below 1.0735 exposes the pair to a possible retest of 1.0635.
—
## GBP/USD: Caught Between Hawkish BoE and Limping Economy
Sterling has been buffeted by contrasting forces. The Bank of England has kept policy rates elevated, but economic growth is faltering and wage pressures are easing. UK inflation remains among the highest in the G7, but the BoE is now striking a more cautious tone, prompting sterling’s August pullback.
### Key Price Levels for GBP/USD
– **Resistance:**
– 1.2820 – 1
Read more on GBP/USD trading.