Market Analysis Summary
Published: August 21, 2026
Author: Vladimir Zernov
Overview
The U.S. Dollar has shown signs of recovery after hitting session lows, primarily driven by the latest PMI (Purchasing Managers' Index) data. The article provides a detailed analysis of the movements in major currency pairs including EUR/USD, GBP/USD, USD/CAD, and USD/JPY.
Key Points
- U.S. Dollar Index: The index is attempting to rebound as traders react to mixed PMI reports. The Manufacturing PMI fell to 53.2 from 53.9, while the Services PMI rose to 56.8 from 54.6.
- EUR/USD: The pair is trading near the 1.1700 mark, with a focus on Euro Area PMI data showing manufacturing improvement. A successful break above 1.1700 could lead to further gains.
- GBP/USD: The pair gained ground as the UK Services PMI exceeded expectations, moving from 52.1 to 52.8. A break above 1.3650 could signal further upward movement.
- USD/CAD: The pair is under pressure due to a rally in commodity prices, particularly gold and silver. A test of support levels is anticipated.
- USD/JPY: Despite rising Treasury yields, the pair pulled back as Japan's inflation rate exceeded estimates, indicating potential economic pressures.
Detailed Analysis
U.S. Dollar Index
The U.S. Dollar Index is showing resilience, with support levels identified between 98.60 and 98.75. If it maintains above these levels, it could target resistance at 99.25 to 99.40. Conversely, a drop below 98.60 may lead to further declines towards 97.85 to 98.00.
EUR/USD
EUR/USD remains relatively stable, with current trading around 1.1700. The manufacturing PMI in the Eurozone improved, suggesting economic expansion despite high oil prices. A successful settlement above 1.1700 could lead to resistance levels at 1.1775 to 1.1790.
GBP/USD
GBP/USD has shown positive movement, bolstered by a better-than-expected Services PMI. The pair is attempting to break above the 1.3635 to 1.3650 resistance zone, with potential targets at 1.3720 to 1.3735 if successful.
USD/CAD
USD/CAD is facing downward pressure as commodity prices rise, particularly in precious metals. A test of the support level at 1.3735 to 1.3750 is expected, with further declines possible if this level is breached.
USD/JPY
USD/JPY has pulled back despite rising Treasury yields, influenced by inflation data from Japan. The nearest support is at 157.50 to 158.00, with potential declines towards 155.00 to 155.50 if this level is broken.
Conclusion
The article highlights the mixed signals from the PMI data and its impact on the U.S. Dollar and major currency pairs. Traders are advised to monitor key support and resistance levels as market dynamics continue to evolve.