Dollar in Balance: Correction or the Start of a New Impulse?

The major dollar pairs, particularly USD/JPY and USD/CAD, remain in a zone of uncertainty. On Friday, the US currency came under pressure following the dovish rhetoric of Federal Reserve Chair Jerome Powell at the Jackson Hole symposium, where he effectively opened the door to a potential rate cut as early as September. On Monday, the market saw a technical correction, though the move has yet to show resilience — the dynamics will largely depend on incoming data. An additional factor weighing on the greenback is concern over the Fed’s independence amid criticism from President Donald Trump, which further limits investor confidence in the dollar.

In the coming sessions, market participants will closely monitor US releases: consumer confidence index, regional Fed indices, as well as the updated GDPNow forecast from the Atlanta Fed. These figures could determine the short-term trajectory: confirmation of economic weakness might strengthen expectations of an imminent rate cut, while stronger data might support the dollar and trigger a continuation of the corrective move.

USD/JPY
The USD/JPY pair continues to trade within the previously identified range of 146.60–148.60. On Friday, sellers attempted to break support at 146.60, but by Monday the price had stabilised above 147.00. Technical analysis of USD/JPY indicates a sideways trading pattern. A firm move below 146.60 could open the way for a test of the nearest support levels at 145.80–146.20.

Key events that could influence USD/JPY dynamics:

• Today at 15:30 (GMT+3): US Core Durable Goods Orders
• Today at 17:00 (GMT+3): US CB Consumer Confidence Index
• Today at 18:30 (GMT+3): GDPNow estimate from the Federal Reserve Bank of Atlanta

USD/CAD
The test of key resistance at 1.3920 in USD/CAD ended with a sharp pullback and the formation of a bearish engulfing pattern on the daily timeframe. Technical analysis of USD/CAD points to a possible test of the important support levels at 1.3780–1.3810. A downward scenario could be invalidated if the price consolidates above 1.3900.

Key events that could influence USD/CAD dynamics:

• Today at 16:00 (GMT+3): Canadian Manufacturing Sales
• Today at 21:30 (GMT+3): Speech by Bank of Canada Governor Tiff Macklem
• Tomorrow at 15:30 (GMT+3): Canadian Wholesale Sales

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