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The most traded FX pair wasn't exempt of a huge decrease in trading volumes in this final week of August.

Without much change to fundamentals, traders have been looking for volatility in the impatient waiting of next Friday's Non-Farm Payrolls report.

However, yesterday, Markets received the news of the Zelenskyy-Putin meeting not moving forward (It could have been expected with no advances since the past two weeks).

The implications for the Euro are still to be clarified, but what is sure is that as long as this conflict keeps going, EU nations are going to keep spending on defense.

The fundamental background could be negative for the Euro, but national spending of that sort tends to generate economic activity and hence can be seen as a positive for the Joint currency – However, the news are already priced in and have helped the Euro already in 2025.

Also, rangebound action is not worst for trading, albeit can be a bit dull; It provides boundaries for entry points.

One thing to consider, is that ranges will break on renewed fundamentals, like economic data (Core PCE is expected to get released promptly) – therefore one other advantage is that they also provide breakout levels

EURUSD technical analysis – determining the range and breakout points

EURUSD Daily Chart, August 29, 2025 – Source: TradingView

It's now been 17 sessions that EURUSD hasn't been able to find any direction.

Despite a few break attempts and data points, the pair has been held between a 1.16 to 1.17 range.

Some range extremes (1.1570 lows on Wednesday 27 – 1.16420 highs last Friday) did go further than that, but most of the volume is contained within these two psychological levels.

Momentum is dead within the neutral zone (Mid-line of the RSI) and the 50-Day MA corroborates, flat as it can be.

Let's have a closer look to see where are the range extremes.

EURUSD 4H Chart

EURUSD 4H Chart

The most recent extreme hit was the resistance of the range and some (slow) selling is currently ongoing.

Watch for a higher breakout possibility after the Core PCE data, however for now the extremes are located at 1.1570 to 1.16 range support and the range resistance 1.17 to 1.1740.

Any daily close above or below these levels would imply a breakout towards other key and support levels which are:

Key levels of interest for EURUSD:

EUR/USD Levels to keep on your charts:

Resistance Levels

• 1.17430 August 22nd highs
• 2020 Resistance around 1.18 (+/- 100 pips)
• 1.1830 2025 top

Support Levels

• Range lows 1.1570 to 1.16
• 1.1450 to 1.15 Main support Level
• 1.1350 to 1.14 Support 2

Safe Trades!

The Canadian economy contracted by 1.6% quarter/quarter annualized (q/q, AR), a steeper decline than expected by consensus, but nearly bang-on our updated tracking. The first quarter was revised slightly lower (+2.0% q/q from +2.2 q/q). Looking ahead to the third quarter, the flash estimate for July showed a 0.1% monthly increase, after a 0.1% month/month contraction in June.

Consumer spending made massive contribution to overall GDP growth, clocking in at a hefty 4.5% annualized pace. Solid spending gains were observed for durables, semi-durables, and services. Inventory accumulation was the other big growth driver.

Residential investment advanced 6% q/q in Q2 – a partial rebound from the hefty 12% q/q drop in the first quarter – driven by new construction. In contrast, non-residential investment plunged 10% q/q, weighed on by a 33% q/q decline in machinery and equipment. Meanwhile, structures investment rose 6%, although this was largely driven by the one-off import of a module for an offshore oil project in Newfoundland and Labrador.

Exports contracted by 27% q/q, while imports fell 5% q/q. The difference carved 8 percentage points from overall GDP growth. Exports were notably weak for autos, industrial machinery, equipment, and parts, as well as travel services. For imports, hefty pullbacks were recorded for passenger vehicles and travel services.

Key Implications

As expected, the economy contracted in the second quarter, as exports were walloped by the one-two punch of weaker U.S. demand and the unwind of a tariff-front running induced surge in Q1. Final domestic demand held up much better than overall GDP (+3.5% q/q), buoyed by a surprisingly strong, broad-based surge in consumer spending and one-time equipment import for an offshore oil field in Newfoundland and Labrador. Moving forward, consumption growth could ease from its hefty second quarter pace, reflecting the cooler jobs market. Note that employee compensation advanced at its slowest pace since the pandemic in the second quarter.

Today's GDP data fell in almost exactly in line with what the Bank of Canada expected in their latest forecast. However, domestic demand looks to have surprised on the upside. On the margin, this could enhance the argument for the Bank to stand pat on rates at their September 17th meeting. However, policymakers still have one more jobs and inflation report to digest before that time. The contraction in overall GDP also implies that slack built in the economy in Q2, and even with a better performance in Q3 likely on tap, the economy probably remains in excess supply. This points to further downward pressure on inflation and could pave the way for more rate cuts this year (see our updated forecast), especially with a policy rate only at the mid-point of what the Bank considers neutral for the economy. For their part, markets are pricing in a 55% chance of a cut in September, although one taking place by year's end is fully priced in.

Consumer spending and income growth both improved in July. Personal income rose 0.4% month-over-month (m/m), a hair above the market consensus forecast. Growth in wages and salaries picked up to 0.7% m/m from 0.1% in June, while government transfer payments were flat on the month.

Consumer spending grew 0.5% m/m in nominal terms, coming on the heels of an upwardly revised 0.4% gain in the prior month. With income and spending growing at a similar pace, the personal savings rate remained unchanged at 4.4%.

Spending was up 0.3% m/m on an inflation-adjusted basis, up from a 0.1% gain in the month prior. Goods spending strengthened, advancing by 0.9%, owing in part to a robust gain in vehicle sales last month. Real spending on durable goods rose by 2.0% m/m, while spending on non-durable goods rose more modestly (+0.3%). Meanwhile, services spending remained muted, edging up by just 0.1% and matching June's performance.

Core PCE – the Fed's preferred inflation gauge – rose by 0.3% m/m on the month, matching June's growth. In annual terms, core PCE inflation rose to 2.9% from 2.8% seen a month prior and 2.7% in May.

Key Implications

A revised GDP report released earlier this week showed that consumer spending grew at an annualized rate of 1.6% in Q2, slightly higher than the previously reported 1.4%. Today’s report builds on that positive news, indicating that consumers entered the second half of the year with decent momentum. This suggests that third quarter growth in consumer spending could come in around 1.7% - an upgrade relative to our previous 1.1% tracking. This is still a relatively modest pace and this week’s consumer confidence data showed households remain uneasy. Sentiment towards labor market prospects is deteriorating, and more consumers expect their incomes to decline. This cautiousness is reflected in the ongoing softness in services spending.

So far, the worst of the households' inflation fears have not materialized. However, given the delays and various changes in tariff implementation, it’s still early in the game. The latest inflation report showed that core goods prices are gradually rising, with two-thirds of goods categories experiencing price gains over the past three months. Today's report also showed core PCE is accelerating on an annual basis. Until now, businesses have largely avoided passing on higher costs by stockpiling inventories, substituting away from highly tariffed imports, or absorbing the increases themselves. These strategies aren’t sustainable indefinitely, and we expect greater passthrough of tariff-related price increases in the coming months.

Daily Pivots: (S1) 1.1641; (P) 1.1670; (R1) 1.1710; More...

Range trading continues in EUR/USD and intraday bias remains neutral. Further rise is in favor as long as 1.1573 support holds. Break of 1.1741 will resume the rally from 1.1390 to retest 1.1829 high. Firm break there will extend larger up trend. However, decisive break of 1.1573 will extend the corrective pattern from 1.1829 with another downleg, and target 1.1390.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

Daily Pivots: (S1) 1.3486; (P) 1.3509; (R1) 1.3534; More...

GBP/USD is still bounded in established range and intraday bias remains neutral. Further rally is mildly in favor as long as 1.3389 support holds. Above 1.3594 will resume the rebound from 1.3140 to retest 1.3787 high. On the downside, however, break of 1.3389 support will extend the corrective pattern from 1.3787 with another fall, and target 1.3140 support.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3073) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.7991; (P) 0.8017; (R1) 0.8040; More….

Intraday bias in USD/CHF remains mildly on the downside for the moment. Deeper fall would be seen to 0.7910 support first. Break there should confirm that corrective rebound from 0.7871 has completed at 0.8170. On the upside, however, break of 0.8073 will turn bias to the upside for 0.8103. Further break there will resume the rebound from 0.7871 through 0.8170 resistance.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

Daily Pivots: (S1) 146.56; (P) 147.03; (R1) 147.41; More...

USD/JPY is still bounded in established range and intraday bias stays neutral. On the downside, firm break of 146.20 will resume the fall from 150.90. Also, that would argue that rebound from 139.87 has completed as a corrective move to 150.90. Deeper fall should be seen to 142.667 support for confirmation. On the upside, above 148.76 will bring another rise to retest 150.90 instead.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 1.3729; (P) 1.3761; (R1) 1.3782; More...

Intraday bias in USD/CAD stays neutral first despite current recovery. On the upside, firm break of 1.3813 will indicate that the pullback from 1.3923 has completed, and corrective rise from 1.3538 is still in progress. Retest of 1.3923 should be seen next. But upside should be limited by 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017). Meanwhile, firm break of 1.3720 will argue that the corrective bounce has already completed, and bring retest of 1.3538 low.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 resistance holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

Canadian Dollar came under pressure in early U.S. session after GDP data revealed a deeper slowdown than markets had anticipated. Canada’s economy contracted -0.4% qoq in Q2, marking its first quarterly decline in seven quarters. More concerning was June’s monthly contraction, which signaled that the weakness might carry on into Q3.

The drag came primarily from exports, which tumbled under the weight of U.S. tariffs. With auto exports collapsing and machinery shipments down sharply, external headwinds are likely to remain a persistent strain on Canada’s economy in the months ahead.

The disappointing GDP print has shifted attention back to the BoC, where markets now see increased odds of a September rate cut. After holding for three straight meetings, the weak growth outlook could prompt policymakers to restart easing in an effort to cushion the economy.

In contrast, U.S. data releases offered few surprises. Core PCE inflation rose in line with forecasts while personal spending remained solid. The resilience in household demand suggests the U.S. economy retains some momentum, and it did little to alter expectations for Fed easing.

Markets still anticipate September as the starting point of the Fed’s new easing cycle, with two cuts expected in total this year. However, the next two weeks—featuring the August nonfarm payrolls and CPI reports—will be pivotal in determining how aggressive the Fed can be.

In weekly currency performance, Aussie remains the strongest, followed by Loonie and Kiwi. On the weaker side, Euro leads losses, trailed by Sterling and Yen, while Swiss Franc and Dollar sit in the middle of the pack.

In Europe, at the time of writing, FTSE is down -0.16%. DAX is down -0.14%. CAC is down -0.34%. UK 10-year yield is up 0.019 at 4.721. Germany 10-year yield is up 0.016 at 2.714. Earlier in Asia, Nikkei fell -0.26%. Hong Kong HSI rose 0.32%. China Shanghai SSE rose 0.37%. Singapore Strait Times rose 0.37%. Japan 10-year JGB yield fell -0.013 to 1.605.

US Core PCE ticks higher to 2.9%, spending stays firm in July

U.S. headline inflation held steady in July, with the PCE price index unchanged at 2.6% yoy. Core measure ticked up to 2.9% from 2.8%, in line with forecasts. On a monthly basis, PCE rose 0.2% mom, and core prices increased 0.3% mom, pointing to modest but persistent price pressures.

Personal income rose 0.4% mom and spending climbed 0.5% mom, both as expected. The data suggest households remain resilient despite elevated borrowing costs, giving the Fed little urgency to accelerate easing.

Canada GDP contracts -04% qoq in Q2, tariffs hit exports hard

Canada’s economy shrank -0.4% qoq in Q2, as exports and business investment fell sharply. The downturn was led by a steep -7.5% drop qoq in exports, with machinery, travel services, and particularly autos hit hard by U.S.-imposed tariffs. Passenger car and light truck exports plunged -24.7% qoq.

Meanwhile, imports fell -1.3% in the quarter, reflecting Ottawa’s counter-tariff measures against the U.S. That helped cushion the trade balance slightly, though it also underscored the disruption in cross-border commerce.

Monthly GDP data painted an equally weak picture, with output slipping -0.1% mom in June versus expectations for modest growth of 0.1% mom.

ECB consumer survey shows long-term inflation anchored, growth views weaken

The ECB’s July Consumer Expectations Survey showed households continue to see inflation remaining above target in the near term, with 12-month expectations steady at 2.6% and three-year expectations edging higher to 2.5% from 2.4%. Five-year inflation expectations were unchanged at 2.1% for an eighth consecutive month, underscoring anchored long-term views.

Notably, uncertainty around one-year inflation stayed at its lowest since January 2022, with the median at 1.6%. This suggests households feel more confident about the inflation outlook, even as near-term expectations remain somewhat elevated.

Growth and labor market expectations turned more downbeat. Economic growth was expected to contract by -1.2% over the next 12 months, compared with -1.0% in June. Unemployment expectations rose to 10.6% from 10.3%. The results highlight continued pessimism about the Eurozone’s economic prospects despite inflation stability.

Tokyo CPI core eases on to 2.5% yoy, but food inflation remains stubborn

Japan’s Tokyo CPI slowed in August as government fuel subsidies pushed down utility bills, but stubborn food inflation kept underlying price pressures elevated. Core CPI excluding fresh food eased to 2.5% yoy from 2.9% yoy, below expectations of 2.6% yoy. Headline CPI also cooled to 2.6% yoy, while the narrower core measure excluding both food and energy edged down to 3.0% yoy from 3.1% yoy.

Food inflation, however, remained sticky. Prices of rice, coffee beans and other groceries kept food CPI ex-fresh food at 7.4% yoy, unchanged from the previous month, highlighting persistent pressure on household budgets.

On the activity side, July industrial production dropped -1.6% mom, worse than forecasts of -1.0% mom, dragged down by a -6.7% mom slump in auto output. Manufacturers expect a rebound of 2.8% mom in August before a modest -0.3% mom dip in September.

Retail sales disappointed, rising only 0.3% yoy against expectations of 1.8% yoy. The labor market was a bright spot, with unemployment falling to from 2.5% to 2.3%, the lowest since December 2019.

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.3729; (P) 1.3761; (R1) 1.3782; More...

Intraday bias in USD/CAD stays neutral first despite current recovery. On the upside, firm break of 1.3813 will indicate that the pullback from 1.3923 has completed, and corrective rise from 1.3538 is still in progress. Retest of 1.3923 should be seen next. But upside should be limited by 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017). Meanwhile, firm break of 1.3720 will argue that the corrective bounce has already completed, and bring retest of 1.3538 low.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 resistance holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

Canada’s economy shrank -0.4% qoq in Q2, as exports and business investment fell sharply. The downturn was led by a steep -7.5% drop qoq in exports, with machinery, travel services, and particularly autos hit hard by U.S.-imposed tariffs. Passenger car and light truck exports plunged -24.7% qoq.

Meanwhile, imports fell -1.3% in the quarter, reflecting Ottawa’s counter-tariff measures against the U.S. That helped cushion the trade balance slightly, though it also underscored the disruption in cross-border commerce.

Monthly GDP data painted an equally weak picture, with output slipping -0.1% mom in June versus expectations for modest growth of 0.1% mom.

Full Canada GDP release here.