As trading heats up on Thursday, July 24, 2025, currency markets are driven by a potent mix of dovish Fed signals and improving global risk sentiment. The U.S. dollar is broadly on the defensive – the Dollar Index has slipped to levels not seen in months, reflecting growing expectations that the Federal Reserve may pivot to an easier policy stance. Investors are recalibrating positions as speculation of a Fed rate cut gains traction, spurred in part by Fed Governor Waller’s advocacy for preemptive easing and a divided FOMC outlook. This has undermined the dollar’s appeal and sent traders flocking into rival currencies. Positive developments on the geopolitical front are adding fuel to the move: reports that Washington will dial back tariffs on European imports have buoyed market optimism, boosting the euro and other risk assets while eroding safe-haven dollar demand. Volatility has picked up amid these cross-currents, but the tone leans risk-on – equities are climbing, commodities like oil and gold are firm, and high-beta currencies are enjoying strong bids.
Against this backdrop, major currency pairs are exhibiting decisive technical moves. The British pound and euro are surging to multi-week highs against the greenback, while the Canadian dollar is strengthening to push USD/CAD lower. Intraday price action has been lively: sharp swings around key data releases and headlines (such as U.S. jobless claims and flash PMI readings) marked the morning session, yet overall trends persist in favor of dollar weakness. Traders are now grappling with whether this dollar slide has more room to run or if a short-term correction looms. With the Fed’s July meeting around the corner and high-impact data (like U.S. Q2 GDP and PCE inflation) due imminently, markets are bracing for further twists. Below we delve into the technical setup and outlook for GBP/USD, EUR/USD, and USD/CAD, highlighting key levels, price patterns, and trade ideas for each pair.
GBP/USD
GBP/USD 5-minute chart – 22–24 July 2025.
The GBP/USD pair has been on a tear this week, with sterling bulls pressing their advantage as the U.S. dollar fades. After basing near the mid-1.34s earlier in the week, the pair sprang into an uptrend, making a series of higher highs and higher lows on the intraday charts. Momentum accelerated on Wednesday (23rd) when a burst of buying vaulted the pound from approximately 1.3500 up to a peak around 1.3580. This surge was marked by large bullish candlesticks – a sign of heavy volume and strong conviction behind the move. The rally has been aided by a shift in sentiment: earlier in the week, uncertainty around the Bank of England’s policy and soft UK data had kept sterling on the back foot, but the tide turned as investors latched onto hints of U.S. policy easing. By Thursday morning, GBP/USD is consolidating near 1.3560, just shy of its highs, as traders digest the gains. Volatility has ticked up, but dips have been shallow so far, indicating buy-on-dips interest under the market.
Technical Breakdown
The short-term trend for GBP/USD is decisively bullish, but there are signs of near-term resistance emerging. The 1.3580 level – representing the week’s high – has been tested twice, suggesting a potential double-top pattern on the 5-minute timeframe. Price struggled to push beyond this area on a second attempt in early London trading, resulting in slightly lower highs and some long upper wicks on candlesticks near 1.3575. This indicates that bullish momentum might be waning at the top, at least temporarily. On the support side, the erstwhile resistance around 1.3540–1.3550 (the late-day high from July 22) has now turned into immediate support – indeed, the pullback in early European trade found a floor in this zone. If 1.3540 (approximately the former breakout level) fails to hold, the next cushion is seen around 1.3500, a psychologically important round number and an area of multiple minor intraday lows. Below 1.3500, stronger support and a key pivot level lies at 1.3455, which was a battleground level on higher timeframes. Notably, 1.3455 is cited as a weekly pivot – the point above which the pound’s recovery gains credence, and below which bears regain control. For now, GBP/USD remains above all its short-term moving averages (indicative of bullish bias) and the 5-minute candles continue to trade in an upward-sloping price channel, albeit with momentum moderating.
- Resistance: The 1.3580 double-top region is the ceiling bulls need to clear. A break above 1.3580 would signal fresh intraday highs and could open the door toward 1.3660 (a secondary resistance from prior daily highs and the next bullish target noted by some analysts). Beyond that, the 1.3700 handle and the lower end of a weekly resistance zone near 1.3800 come into view, although such extended targets likely require a strong fundamental catalyst.
- Support: Immediate support lies at 1.3540, the intraday pivot. A slip below 1.3540 could see GBP/USD drift toward 1.3500 – a round-number support and yesterday’s New York session base. Further down, watch 1.3450–1.3460 (around the weekly pivot at 1.3455) as a crucial support; sustained trade below that would break the current uptrend structure and potentially signal a deeper correction toward the mid-1.33s.
Candlestick & Pattern Signals
The candlestick formation in recent hours shows diminishing bullish momentum. The rally on the 5-minute chart featured strong Marubozu-like candles (large bodies, minimal wicks) on the push through 1.3500–1.3550, reflecting conviction. However, near 1.3580, candles have smaller bodies and longer upper wicks, hinting at buyer exhaustion and sellers defending the high. A minor double top appears to be forming at 1.3580. If confirmed by a break below the neckline (around 1.3540), it could foreshadow a short-term pullback. Still, the overall pattern since Tuesday is an ascending trend channel, so until key supports break, the benefit of the doubt goes to the bulls. There is no obvious reversal candle yet on a larger timeframe – no dramatic bearish engulfing or shooting star – just a stall. Traders will be watching if the next attempts to breach 1.3580 are accompanied by stronger volume (for a breakout) or if repeated failure there invites a profit-taking slide.
Trade Ideas
Given the bullish bias but proximity to resistance, a balanced approach is warranted:
- Long Idea (trend-continuation): Consider a buy on dips in the 1.3510–1.3540 zone, anticipating that support will hold. This trade aligns with the uptrend, aiming for a rebound to 1.3600 and a breakout toward 1.3660. A tight stop-loss could be placed just below 1.3500 (to avoid a deeper reversal), as a break below 1.3500 would negate the immediate bullish structure. This setup seeks a favorable reward-to-risk if the pound’s rally resumes after a brief consolidation.
- Short Idea (fade near resistance): For nimble traders, if GBP/USD fails again to clear 1.3580 and prints a clear reversal pattern (e.g. a double-top confirmation or bearish divergence on an oscillator), a short-term short could be taken with an entry around 1.3570. Target the pullback toward 1.3500 (initial target) and 1.3460 as an extended target. A stop-loss above 1.3600 (just beyond the highs) would cap risk. This counter-trend play banks on a temporary dollar bounce or simply a technical retreat after the pound’s sizable two-day run. Keep in mind any short against such strong momentum is higher risk and should be managed diligently.
The near-term outlook for GBP/USD remains constructive as long as it holds above key supports. The pound’s ability to sustain gains above 1.3500 this week suggests underlying demand, and dip-buyers are likely to step in on any shallow corrections. Broad dollar weakness – driven by speculation that the Fed will ease up – underpins this pair’s strength. However, traders should stay cautious around the 1.3600+ area, which could prove a tough hurdle absent a fresh catalyst. A clear push above 1.3660 would signal an upbeat extension of the uptrend, whereas a slide back below 1.3450 would put sterling bulls on the defensive. All eyes will be on upcoming data (like UK PMI readings and, critically, the U.S. GDP report) for clues to the next directional break.
EUR/USD
EUR/USD 5-minute chart – 22–24 July 2025.
The euro has burst higher against the dollar, propelling EUR/USD to levels not seen in several weeks. Early Thursday trading finds the pair hovering around 1.1760, after briefly touching a peak near 1.1780 during the late Asian session. This represents a significant climb from the week’s start, when EUR/USD was trading closer to the 1.1700 handle. The bullish turn gathered steam on Wednesday afternoon: following a modest dip in the European morning (which saw the pair pull back to about 1.1720), buyers stormed back in. A wave of euro strength sent the pair rocketing through resistance – a move accelerated by stop-loss buying above the prior high (~1.1740) and perhaps aided by a broadly soft USD. The 5-minute chart shows a nearly vertical jump in the New York afternoon, coinciding with U.S. headlines and possibly weaker U.S. data, which knocked the dollar. Since punching up to 1.1779 (the intraday high), EUR/USD has eased slightly, but importantly it remains well-supported on dips. The tone here is clearly positive for the euro, as traders price in a combination of improving Eurozone sentiment (helped by stable ECB policy signals) and U.S. dollar malaise.
Technical Breakdown
EUR/USD’s short-term technicals are bullish, though the pair is now nearing an area of significant overhead resistance. The surge over the past 24 hours has put the euro back into a higher range that it last visited during early July. On the upside, 1.1780 – 1.1800 is the immediate resistance zone; this area corresponds to Thursday’s high and a round-number level that often attracts seller interest. Not far above lies 1.1880, which is notable as a recent local top on the daily chart. In fact, 1.1880 was identified by analysts as a key high from a completed upward wave, marking strong resistance on a multi-week basis. Thus, as EUR/USD advances, the 1.1800–1.1880 region may prove to be a tougher barrier that could cap this rally unless fundamentally driven. In the near term, support levels have shifted upward. Initial support is seen at 1.1740–1.1750, roughly the area of the earlier breakout (and close to the 5-minute 50-period moving average). This level was also a peak on Tuesday and should now act as a flipside support on pullbacks. A bit lower, 1.1720 (the intraday low set during Wednesday’s brief pullback) is the next cushion. If the euro were to retrace further, 1.1700 – a psychologically important figure and approximate start of this week’s bullish run – becomes the line in the sand for the short-term uptrend. Notably, EUR/USD is still comfortably above its short-term moving averages, and the relative strength of the recent move hints that any declines might be limited unless new bearish catalysts emerge.
- Resistance: 1.1780 (session high) is the level to beat for bulls. A clean break and 5-minute close above 1.1780 would likely embolden buyers to test 1.1800, and beyond that the focus turns to the 1.1850–1.1880 zone. As mentioned, 1.1880 is a major resistance on the daily chart – effectively the ceiling of the euro’s range in recent months. It aligns with the upper bound of a weekly resistance range projected by technical forecasters. If by some catalyst EUR/USD punches through 1.1880, it could trigger a larger bullish breakout, targeting the low 1.19s and possibly 1.2000 next. However, that scenario likely requires a substantial USD-negative development (such as a very dovish Fed surprise or sharply weak U.S. data).
- Support: Nearest support is 1.1740, the breakout point and now a pivot level. Below that, 1.1720 (recent pullback low) serves as secondary support. Further down, the 1.1700–1.1690 region is key – not only is 1.1700 a round number, but 1.1690 approximates the level of the former resistance (1.1670) that was highlighted in weekly analysis as a crucial breakout point. Indeed, EUR/USD’s rise above 1.1670 this week shifted the pair out of a prior downtrend channel and into this bullish phase. Therefore, if the pair falls back under 1.1700, it would warn that the bulls’ grip is weakening, potentially exposing 1.1650 (mid-week lows) and 1.1600 beyond that.
Candlestick & Pattern Signals
The price action on the 5-minute chart reveals strong bullish control with minor pauses. Wednesday’s explosive move produced a series of long white (green) candles with little to no wick on the tops – clear evidence of buyers aggressively lifting offers. Following the peak at 1.1779, the chart shows a small pullback flag: a tight consolidation with slightly descending candles, which so far looks like a bull flag pattern. This is typically a continuation signal, suggesting the pair is merely catching its breath before another possible leg higher. We also observe that during the retreat from 1.1779 to ~1.1755, there were no extreme bearish candles – the correction was orderly, indicating a lack of panicked selling. If anything, the presence of a few bottoming tails (lower wicks) near 1.1750 implies buyers are stepping in on dips. Traders should watch for a potential flag breakout above 1.1775 – that could reignite momentum. Conversely, if the flag fails and EUR/USD slips below 1.1720, it may signal a deeper correction is underway as short-term longs take profit.
Trade Ideas
With EUR/USD momentum upbeat, leaning bullish is logical, but one must respect overhead resistance. Here are a couple of approaches:
- Long Idea (momentum continuation): A breakout buy is conceivable on a clear move above 1.1780. For instance, a long position could be entered on a 5-minute close above 1.1780, aiming for a swift move to 1.1830–1.1850. A tight stop could sit just below 1.1750, in case the breakout proves false. This trade banks on follow-through momentum carrying the euro higher into the 1.18s. Additionally, traders can look to buy dips – any pullback into the 1.1720–1.1740 support zone that shows signs of basing (like a small double bottom or bullish engulfing candle) may offer a better risk/reward entry for a run back up to the highs. In that scenario, stops might be placed under 1.1700.
- Short Idea (fade the rally): While not the prevailing trend, a cautious contrarian short could be considered if EUR/USD stalls under 1.1780 and begins to roll over. For example, if multiple attempts to clear 1.1780 fail and you see a lower high on the chart along with waning momentum indicators, a short entry near 1.1765 could target a retracement to 1.1700–1.1680. The stop-loss should be tight, perhaps above 1.1800, because any fresh highs would invalidate the idea. This trade would be premised on the notion that the euro’s rally is stretched in the very near term and due for a technical correction, especially with major resistance looming overhead. It’s essentially an attempt to catch a pullback, not a trend reversal.
The broader outlook for EUR/USD is positive, with the pair carving out a short-term uptrend amid a climate of dollar weakness. This week’s developments — from slightly upbeat Eurozone signals to a market increasingly convinced of a gentler Fed — have given euro bulls the upper hand. If EUR/USD can maintain altitude above its old resistance (1.1670) and especially if it breaks into the 1.18s, it would mark a significant shift out of the prior range. However, traders should remain aware of the upcoming risk events: tomorrow’s preliminary U.S. GDP and inflation data could be pivotal. A disappointment on those fronts could further sink the USD, allowing EUR/USD to test higher resistance (possibly approaching that 1.1880 hurdle). On the flip side, unexpectedly strong U.S. numbers might remind the market of the Fed’s data-dependent stance, potentially sparking a dollar rebound and a healthy pullback in EUR/USD. In summary, bulls have momentum, but the pair is approaching inflection points where macro forces and technical barriers will determine the next big move.
USD/CAD
USD/CAD 5-minute chart – 22–24 July 2025.
The USD/CAD pair has flipped into a downward slide this week, with the Canadian dollar (aka the “loonie”) benefiting from both a softer U.S. dollar and supportive commodity/risk trends. From Tuesday into Thursday, the chart depicts a sequence of lower highs and lower lows, as rallies in USD/CAD have been sold and the pair pushed to fresh lows around 1.3580. On Wednesday, the greenback tried to mount a recovery against the loonie – we saw a notable bounce off the 1.3585 area that lifted USD/CAD sharply to about 1.3640 in a matter of minutes. This intraday spike likely corresponded with a brief surge in USD (possibly due to a news headline or a downtick in oil prices). However, that rally was short-lived; sellers re-emerged near 1.3640, and the pair quickly resumed its descent. By early Thursday, USD/CAD was grinding near 1.3605, with a modest uptick off the lows. Despite the small bounce, the bearish tone remains evident: the U.S. dollar’s inability to sustain gains is a testament to the market’s current preference for the relatively higher-yielding CAD, especially as crude oil prices hold firm and overall risk appetite improves. Notably, commodity-linked currencies like CAD thrive when investors are optimistic about global growth and when the USD is on its back foot – a scenario playing out this week.
Technical Breakdown: The short-term structure of USD/CAD is bearish, though there are hints that a base could be forming in the very near term as the pair tests key support. The downtrend from the 1.3720 area (highs from Monday) to the recent low (~1.3580) has been orderly, respecting a descending trendline on the 5-minute chart. Each attempt at a rebound has produced a lower peak: for instance, after the initial drop, the recovery stalled at 1.3640, and subsequent minor bounces struggled around 1.3620. This points to persistent selling pressure. Now, focus turns to the support zone around 1.3580. The lows on Wednesday and Thursday are roughly in that region, suggesting a possible double-bottom forming intraday. Additionally, 1.3580 is just above a notable higher-timeframe support at 1.3500 (identified by analysts as a crucial level for a wave downside target). It appears the market is hesitant to drive USD/CAD straight through to 1.3500 without a pause. If 1.3580 holds and we see a bounce, initial resistance will be the prior swing highs – 1.3640 being the first, followed by 1.3680 (which coincides with the underside of the broken range and the 50-period moving average on the intraday chart). The range that USD/CAD broke down from earlier in the week was roughly 1.3635–1.3725, so any return into that band would indicate loss of bearish momentum. On a larger view, daily technicals had shown an up-correction underway, targeting 1.3815, but that has clearly faltered with the latest USD weakness; indeed, a reversal now threatens a deeper pullback toward the mid-1.35s.
- Resistance: Near-term resistance is at 1.3640 – this level capped the mid-week bounce and aligns with the descending trendline from recent highs. A break above 1.3640 would be the first sign that selling pressure is abating. Beyond there, 1.3680 is a notable level (it was retested from above before the latest fall, and may now act as resistance). If bulls manage to push USD/CAD past 1.3680, the next target would be around 1.3725–1.3730 (the top of the former range and near the 200-period MA on 5-min, if applicable). Only a move back above 1.3750 would start to negate the short-term downtrend in a convincing way. In the grand scheme, stronger resistance looms at 1.3815 (the recent corrective high on the daily chart) and 1.3838 (upper boundary of the broader corrective structure) – but those levels are out of reach unless the USD mounts a significant comeback.
- Support: Immediate support is the 1.3580 area, which has held on successive tests. A definitive break below 1.3580 would likely accelerate declines toward 1.3540 and then the 1.3500 level. The 1.3500 mark is very important – not only is it a psychological round number, it’s also flagged by wave analysis as a “local target” for the current bearish move. Bears might take profit around there, potentially causing a bounce. If, however, 1.3500 were to give way on a closing basis, it could open a fresh downleg. The next supports would be 1.3450 (minor level) and then around 1.3380, which is another intermediate target from larger technical forecasts. At present, we’re not there yet – the pair is trying to stabilize above the mid-1.35s.
Candlestick & Pattern Signals
The candlestick patterns in USD/CAD’s recent action underline the pair’s struggle to rally. We observed several bearish engulfing or strong downside candles punctuating the declines – for instance, the swift drop from 1.3640 back to 1.3600 came via a series of long red candles, showing sellers in control. In contrast, bullish candles have been relatively small and short-lived, reflecting feeble bounces. However, the clustering of price around 1.3580 with no new low in the past few hours could indicate seller exhaustion at this support. On the 5-minute chart, a tentative double bottom is visible around 1.3585, with a slight bullish divergence if one were to use an RSI indicator (momentum not making new lows even as price retested the low – a hint of weakening downforce). Additionally, Thursday morning’s slight lift has produced a few higher lows on micro-term charts. Traders should watch for any bullish reversal candlesticks near 1.3580 – such as a hammer or a small morning star formation – to confirm a bounce. On the flip side, if a high-volume breakdown occurs below 1.3580, it could be signaled by a wide-range bearish candle, potentially kicking off the next leg down toward 1.3500.
Trade Ideas
Given the prevailing downtrend, the preference is to sell on rallies, but one can also prepare for a possible rebound off support:
- Short Idea (trend-following): Look to sell into any relief rallies. For example, if USD/CAD upticks into the 1.3640–1.3660 zone (near the descending trendline or 50% retracement of the drop) and shows signs of faltering, a short position could be initiated. The target would be a return to 1.3580 and a potential extension to 1.3520 (just above the 1.3500 key level). A sensible stop-loss could be placed above 1.3680, as a break past 1.3680 would indicate the short-term downtrend is losing steam. This trade aligns with the notion of a lower-high sell in a down market, capitalizing on the USD’s weakness and any oil or risk-driven strength in CAD.
- Long Idea (counter-trend bounce): If USD/CAD manages to hold the 1.3580 support and you observe a clear reversal pattern (for instance, a double bottom confirmation or a bullish engulfing off the lows), there’s an opportunity for a quick long trade targeting a corrective bounce. An entry in the low 1.3600s with a tight stop just below 1.3570 could be aimed at a rebound to 1.3670–1.3700. Essentially, this would be a play on an oversold bounce and mean-reversion, perhaps triggered by any temporary USD relief or a dip in oil prices. It’s riskier counter-trend, so it’s critical to monitor closely and not overstay – the idea would be to grab 50-70 pips if the pair bounces, then exit before the dominant downtrend possibly resumes.
The short-term outlook for USD/CAD tilts bearish as long as the pair remains below the mid-1.36s. The Canadian dollar’s resilience is underpinned by a few factors: stable to firm oil prices (Canada’s key export) and a market view that the Bank of Canada will hold rates steady (or even hike if needed) while the Fed inches toward a dovish pivot. Indeed, the recent break lower in USD/CAD aligns with a broader theme of USD softness and commodity currency strength. In the coming days, a lot will depend on external drivers – U.S. economic data and overall risk sentiment. Should global equities continue to rally and commodity markets stay supported, USD/CAD may have a hard time regaining upward traction, and a test of the 1.3500 support could be on the cards. However, if the dollar catches a bid (say, from surprisingly strong U.S. GDP/PCE numbers or a bout of risk aversion in markets), USD/CAD could bounce further, albeit within what currently looks like a corrective pullback rather than a full trend reversal. In summary, traders will watch the 1.3580/1.3500 zone – a pivotal support shelf – to see if the downtrend extends, while keeping an eye on whether USD/CAD can muster a relief rally above 1.3680 to signal that the worst of the drop is over for now.
Market Outlook
In this session, USD weakness is the unifying theme driving all three pairs. The dollar’s slump – fueled by a combination of dovish Fed expectations, benign U.S. data, and improved global sentiment – has been the catalyst for the pound’s rally, the euro’s breakout, and the loonie’s recovery. We observe a classic inverse relationship: as the dollar falters, its major counterparts take the opportunity to advance to technical milestones. Notably, the U.S. Dollar Index’s retreat below key support reflects this shift, with one analysis noting the greenback is “navigating a complex landscape” of trade developments and cautious Fed policy, leaving overall dollar strength “subdued”. From a fundamental perspective, traders are parsing a mix of economic signals: Eurozone/UK data (like PMIs and inflation readings) have been mixed, but the overriding factor has been the market’s conviction that the Fed will blink first in the global tightening cycle. This perception has diminished the dollar’s yield allure, even as U.S. authorities juggle conflicting pressures (inflation vs. growth, and even political influence). Meanwhile, developments such as easing trade tensions (e.g., tariff rollbacks) and stable commodity prices have lifted the likes of the euro and CAD, respectively, by fostering a risk-on environment.
Going forward, all eyes are on upcoming risk events to either reinforce or counter the current moves. In the very near term, the U.S. preliminary Q2 GDP release and the Fed’s favored inflation gauge (core PCE) are poised to be potential game-changers. A downside surprise in growth or continued cooling of inflation would likely cement expectations of a Fed rate cut, extending the dollar’s slide and enabling GBP/USD and EUR/USD to probe higher resistance (and USD/CAD to possibly break lower supports). Conversely, if the data show the U.S. economy still humming (or inflation stubbornly high), we could see a swift repricing – the dollar might regain ground on revived hawkish sentiment, causing pullbacks in the euro and pound, and a bounce in USD/CAD. Additionally, traders will be closely monitoring central bank communication: any hints from Fed officials about the July 30 meeting, or commentary from the BoE/ECB, could inject volatility. The macro narrative now is one of a dollar on the back foot amid shifting policy winds.
In summary, the markets are at an inflection point where technical trends (favoring USD weakness) and fundamental triggers are intersecting. The balance of risks for the dollar appears skewed to the downside in the short term, barring a significant shift in economic data flow. Traders should stay vigilant and flexible – the late-week sessions may bring sharp moves as news hits the wires. For now, the bulls in GBP/USD and EUR/USD have the upper hand, while USD/CAD bears remain in control – but as always in FX, momentum can pivot quickly. Keep an eye on those key levels identified above, and watch how price behaves around them when the high-impact news lands. The interplay of central bank policy expectations and risk sentiment will continue to set the tone for these major pairs, offering both opportunities and risks as we head into the final trading days of July.