The markets opened amid jitters over U.S. political drama and key data releases. Asian equities were mixed ahead of Nvidia’s earnings, as investors grew “nervous about attacks on Federal Reserve autonomy”. U.S. President Trump’s unprecedented firing of Fed Governor Lisa Cook sent shockwaves through Wall Street, steepening Treasury yields and fueling bets on Fed rate cuts. These pressures kept the dollar off balance – it staged a modest recovery early Wednesday, pulling EUR/USD down to about $1.1618. At the same time, Australia’s July CPI surprised to the upside (+2.8% YoY vs 2.3% forecast), the fastest pace in a year, briefly lifting the Aussie. In short: risk sentiment is jittery and central bank outlooks are in flux, setting the stage for volatile moves in EUR/USD, AUD/USD and USD/CAD.
EUR/USD
Recent EUR/USD price action shows a clear downside tilt. After failing to break higher above ~1.1680 on Monday, the pair has been sliding, finding support near the 1.1600 zone. On the short-term chart, EUR/USD is trading below its 50-period moving average (50-EMA) and under “negative pressure,” even as a minor bullish trendline offers some support. Economies.com notes that EUR/USD “declined in its last intraday trading, affected by the continuation of the negative pressures that comes from its trading below EMA50,” yet a short-term bullish wave and rising RSI hint at a possible near-term bounce.
Macros have been unfavorable: German consumer sentiment data was softer than expected. The GfK survey showed September confidence plunging to –23.6 (well below forecasts of –22.0), reflecting rising worries over jobs and prices. This gloomy outlook for Europe’s economy has weighed on the euro. Against this backdrop and with the EUR/USD chart in a shallow downtrend, immediate technical resistance is around 1.1650–1.1680 (recent swing highs) while support lies near 1.1600 (psychological round figure and prior lows).
At the same time, U.S. dollar factors are also in play. After Tuesday’s sell-off, the greenback steadied in Asian trade as investors contemplated the Fed saga. Markets now firmly price in Fed rate cuts (nearly 85% odds of a September cut), which should bias USD lower over time. In sum, EUR/USD looks pressured by weak eurozone data and safe-haven flows, but the technicals suggest any drops may slow near support, with a possible bounce supported by oversold momentum.
AUD/USD
AUD/USD exploded higher after Australia’s CPI print, then gave back most gains. In the Asian session, July headline inflation jumped to +2.8% year-on-year (from +1.9% in June), far above the 2.3% consensus. This surprised markets and initially lifted AUD to about 0.6505 (a 2-day high). However, that rally was short-lived. On the intraday chart, the pair quickly ran into stiff resistance around 0.6495–0.6500 and then sold off to the 0.646–0.647 area by Wednesday morning. Analysts note that AUD/USD “price declined in its last intraday trading due to the stability of the current resistance level at 0.6495” – meaning bulls couldn’t clear that ceiling. Technically, AUD/USD remains above its 50-EMA (a modest bullish baseline) and RSI is turning positive, suggesting some underlying support, but the immediate trend is choppy.
What drove the carnage? Besides inflation, RBA minutes released the day before hinted at more future rate cuts (cash rate now 3.60%), keeping pressure on the Aussie. The big CPI jump complicates that picture, but for now markets are wary: a stronger inflation print may delay cuts, yet Fed news is dominating globally. In Europe, risk-off sentiment (and a stronger USD tone from Fed jitters) likely dragged AUD down after the knee-jerk move. In summary, AUD/USD is technically capped by near-term resistance (~0.65) despite some bullish momentum. Key focus remains on domestic data (Q2 construction work is due today) and the Fed outlook. Traders will watch if AUD/USD can retake 0.6500 resistance (next near-term target ~0.6560) or slides to support around 0.6430–0.6450.
USD/CAD
The USD/CAD pair moved higher Wednesday, in line with a modestly firmer U.S. dollar. After trading around 1.3820, the pair ticked up toward 1.3850 in Asian hours. On the chart, USD/CAD has been under a mild downtrend this month, but the recent pullback seems to have found a pivot on a rising trendline. Economies.com notes that “USD/CAD price rose in its last intraday trading, amid the continuation of the negative pressure from its trading below EMA50,” yet it “remains leaning on the support of a main bullish trend line on the short-term basis” with RSI flashing oversold signals. In other words, USD/CAD is technically poised for a bounce as long as that uptrend line (around the 1.3800 area) holds.
Fundamentally, USD/CAD is a tug-of-war. The U.S. dollar’s recent swings have been driven by Fed and political headlines. For example, reports that President Trump tried to fire Fed Governor Cook have shaken confidence in the dollar, which could ultimately weaken USD/CAD. On the flip side, factors supporting the USD (like expectations of easier Fed policy and haven flows) have kept USD/CAD from collapsing. Notably, Canada-related news is also key: Commerce talks between Canada and the U.S. are underway (Canadian officials met Secretary Lutnick), and Canada will report Q2 GDP on Friday – a miss there could pressure the loonie. Oil prices (Canada’s top export) are another wildcard, with EIA stock data due.
Overall, USD/CAD is threading a narrow needle: technical support around 1.3800–1.3820 is holding, and resistance lies near 1.3860–1.3870 (June highs). The FXStreet analysis highlights that traders await a breakout, noting the pair is “edge[d] higher to near 1.3850” with USD still under scrutiny. In the short term, dips toward 1.3800 may attract buyers, while a break above 1.3860 could target 1.39. Volatility is likely to remain elevated as markets digest both US financial turmoil and any surprises from Canadian data.