The forex market opens this week with tight ranges and sharp setups as traders digest last Friday’s economic surprises and prepare for Monday’s low-volume but potentially high-impact session. EUR/USD, GBP/USD, and USD/CAD are hovering near key technical zones just one breakout away from explosive moves. Meanwhile, mixed inflation reports and political noise are quietly shifting sentiment across major economies. In this technical and news-driven breakdown, we uncover the price levels worth watching and the smartest trade ideas for early-week action.
EUR/USD
EUR/USD pulled back sharply on the open from Friday’s highs and has been struggling around the 1.162–1.163 area this Monday. The intraday high near 1.1660 now marks key resistance, while the recent low around 1.1610 is near intraday support. Price has formed a lower-high pattern after failing to hold above 1.165, suggesting a slight downtrend on the 5-minute chart. The last few 5-min candles show indecision after a fall, with a bullish pinch at the low and a small rally. If EUR/USD breaks below 1.1610, sellers may target 1.1590–1.1600. Conversely, a push above 1.1645/1.1650 could open the way to retest the 1.1660–1.1670 zone.
- Support/Resistance: Resistance ≈1.1660 (Fri/Monday swing high), intermediate resistance 1.1645. Support ≈1.1610 (recent low), secondary support ~1.1600.
- Candlestick behavior: The late Sunday/Monday candles form a small bullish wick then a red bar, hinting at selling pressure after attempted rallies. The market appears range-bound between 1.1610–1.1660 for now.
EUR/USD trade setups
- Long above 1.1650: Enter on a break above Monday’s minor high near 1.1650. Stop-loss ~1.1630 (below Friday’s pivot). Target 1.1680 (round number/past resistance).
- Short below 1.1610: Enter under support at 1.1610 on increased selling. Stop ~1.1630 (just above pivot). Target 1.1580–1.1590 (near Monday’s swing low).
- Range trade: Buy near 1.1610–1.1620 with tight SL (inside the range low), aiming for 1.1645–1.1650; or short near 1.1655–1.1660 with SL just above, targeting 1.1620.
GBP/USD
GBP/USD has held a bull leg from Friday into early Monday, peaking around 1.3470 before reversing. This high marks fresh resistance. The pair then tumbled to about 1.3380 before retracing to ~1.3420. The 5-min chart shows a double top near 1.3470 and a sharp pullback that left behind long bearish bars. Current price (~1.3410) sits mid-range. A break back above ~1.3445 would resume the uptrend toward 1.3470–1.3490. But failure here could see sellers drag it lower to test the 1.3380 swing low. Key levels: 1.3470 topside resistance; 1.3380 intraday support; intermediate around 1.3420–1.3430.
- Trend: Minor uptrend from Friday, now stalling into Monday. A clear break either way will define direction.
- Candlesticks: Monday’s bearish reversal candle (long red) after the spike indicates profit-taking. The bounce off 1.3380 produced small-bodied candles, suggesting indecision at current levels.
GBP/USD trade setups
- Long above 1.3445: If buyers push above the 1.3445/1.3450 zone, target 1.3470–1.3490. Stop-loss ~1.3420 (below last pivot).
- Short below 1.3400: If GBP/USD slips under 1.3400 (near support), target 1.3370–1.3380. Stop ~1.3420 (just above intraday pivot).
- Breakout play: A breach of 1.3470 could aim at 1.3500; a drop below 1.3375 could aim at 1.3340.
USD/CAD
USD/CAD rallied overnight on Monday’s open, climbing from ~1.3690 to 1.3735 before a pullback. The intraday high ~1.3740 and low ~1.3690 are critical. Price has since oscillated around 1.3720. On the 5-min chart, the pair is showing a bullish bias (higher highs from Fri to Mon) but is choppy in this narrow band. Key resistance is 1.3740–1.3750; support is around 1.3700 (psychological) and lower at 1.3690. The latest candles show fading upside momentum – a small wick atop a green candle into resistance – suggesting caution on longs at top. If USD/CAD breaks below 1.3700 decisively, sellers may test 1.3675–1.3680. A breach above 1.3740 could target 1.3760–1.3770.
- Trend: Mildly bullish from Friday’s base; watch for continuation vs. pullback signals.
- Candlestick action: Small-bodied candles after the big green bar up, hinting at consolidation/tightening range.
USD/CAD trade setups
- Long above 1.3740: Enter on break above resistance, targeting 1.3770 (next round level). SL ~1.3720 (below pivot).
- Short below 1.3700: Enter under 1.3700 for a move down to 1.3670–1.3680. SL ~1.3720 (above pivot).
- Range trade: Buy near 1.3700 with tight SL (range low), target 1.3740; or short near 1.3740 with SL just above, target 1.3710.
Economic News Impact
Recent macro data have set the stage for these intraday moves. In the US, June housing starts surged 4.6% unexpectedly to 1.321 million, driven by a spike in multi-family starts. That signaled underlying strength in the housing sector. Meanwhile, consumer sentiment ticked up: the University of Michigan’s index hit 61.8 in July (the highest in five months). These figures, along with moderate June CPI/PPI releases, kept the Fed rate path in focus. The dollar therefore managed to hold weekly gains despite easing slightly Friday — trading around $1.1621/€ and $1.3411/£ into the weekend.
Over the weekend and Monday, political pressure on Fed Chair Powell (Trump’s threats) and early Tariff news caused extra volatility, but the main pivots remain data-driven. In Europe, the eurozone’s June CPI was confirmed at the 2.0% ECB target, which leaves the ECB cautious on further cuts. This kept EUR/USD relatively flat ahead of today. In the UK, higher-than-expected inflation (June CPI at 3.6%, its highest in over a year) was partly offset by signs of a cooling labor market – wage growth is slowing and unemployment rose to 4.7% (the highest since Q2 2021). Such mixed signals left GBP largely unchanged on Friday (around the $1.34 handle).
For Canada, June inflation modestly picked up to 1.9% (up from 1.7%), and a hot jobs report (≈83k jobs added in June) dampened rate cut bets. The loonie strengthened: USD/CAD was about 1.3677 after the release (CAD appreciated). Today’s early Monday data (raw materials and industrial prices) will further tweak CAD sentiment, but the strong CPI and jobs already suggest the BoC is likely on hold. In sum, the news backdrop favors mild USD strength vs lower-inflation peers (EUR/CAD) while GBP and EUR grudgingly hold near multi-week lows vs USD.
Conclusion and Directional Bias
- EUR/USD: The pair is range-bound in the short term, with downward pressure as it failed at the 1.1660 area. The bias is slightly bearish intraday unless it reclaims above 1.165. A break below 1.1610 would confirm further weakness toward 1.1580.
- GBP/USD: After topping around 1.3470, GBP has retraced sharply. It now trades mid-range with a neutral/bearish tilt. A break of 1.3380 could push it lower, whereas reclaiming 1.3450/1.3470 is needed to shift bullish.
- USD/CAD: The tone is mildly bullish, as the USD holds near overnight highs. A decisive move above 1.3740 would open 1.3760–1.3780, while a drop below 1.3700 could drag it back to support at 1.3670.
Overall, the USD appears poised to test resistance in EUR and GBP pairs given Friday’s US data, but any new catalysts (Fed comments Monday or trade headlines) could quickly tip the balance. Traders should watch those key levels and the early-week economic cues to confirm each pair’s next leg of movement.