**Forex Technical Analysis of Major Pairs: August 8, 2025**
*Original analysis by Vincent Nyagaka, with additional insights from other reputable financial sources.*
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The foreign exchange (Forex) market continues its active pace as traders focus intently on the world’s major currency pairs. Understanding the short and long-term trends for these pairs is essential for making informed trading decisions. Today’s technical analysis examines the critical price action of major pairs, including EUR/USD, GBP/USD, AUD/USD, USD/JPY, and USD/CAD, with enhanced perspectives on each based on recent market events and projected economic dynamics.
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### Overview of Market Conditions
The first week of August 2025 has been marked by heightened volatility, especially as market participants digest economic data releases, central bank statements, and geopolitical developments. The US dollar’s performance, tied closely to Federal Reserve policy signals, sets the tone for many pairs. Commodity-linked currencies such as the Australian and Canadian dollars have responded to fluctuations in energy and metal prices. Meanwhile, the Japanese yen remains influenced by risk sentiment and Bank of Japan stances surrounding monetary stimulus.
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## EUR/USD: Pressured by Divergent Policy Paths
The EUR/USD pair sits at the crossroads of US Federal Reserve tightness and the European Central Bank’s cautious approach. Recent data shows US inflation remains above the Fed’s target, raising expectations of rates staying higher for longer. In contrast, the ECB signals a wait-and-see approach.
**Technical Outlook:**
– The pair recently failed to break above the 1.1100 resistance area, which has capped gains for several weeks.
– Key support is found near the 1.0900 region, a level that previously acted as both support and resistance.
– Momentum oscillators such as the RSI dip towards 45, signaling moderate bearish momentum but not oversold conditions.
– Moving averages:
– The 50-day SMA holds above the 200-day, but the spread is narrowing.
– Price action consolidates between these two moving averages, suggesting indecision.
– Fibonacci retracement levels from the June rally show the 61.8% retracement intersects with current support around 1.0900.
**Outlook and Strategy:**
– If price sustains below 1.0900, selling momentum could accelerate, opening a move toward 1.0800.
– A close above 1.1100 shifts the bias bullish, targeting resistance at 1.1250.
– Monitor US labor market data and ECB commentary for directional clues.
– Consider trailing stop strategies to manage risk if volatility remains high.
**Additional Considerations:**
– Divergence in monetary policy is the dominant theme.
– Geopolitical risks related to the EU, such as energy disruptions, could weigh further on the euro.
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## GBP/USD: Resilient Yet Vulnerable
The British pound trades in a range as it balances domestic growth concerns with persistent inflationary pressures and the Bank of England’s cautious
Read more on AUD/USD trading.