Currency markets enter this week digesting one of the busiest stretches of the year — a soft US inflation report, a landmark diplomatic breakthrough in the Middle East, and a record-setting stock market — all compressed into a single week. Now, nearly every major pair is pausing at a technical crossroads, with Fed Chair Kevin Warsh's Jackson Hole keynote on Friday standing out as the one event capable of deciding the next big move across the board.

What moved markets last week

July's Consumer Price Index showed core inflation slowing to 2.7% annually, down from 2.9% — the third straight month of deceleration. That alone pushed the probability of a September Fed rate hike down from 72% to 58%. Then Wednesday's Producer Price Index came in at just 0.1% monthly, with the annual rate falling to 4.8% from 5.5%, reinforcing the disinflation story from the supply side.

The bigger shock came Thursday, when the US and Iran signed the Geneva Interim Framework, a 120-day agreement replacing the expired ceasefire memorandum. Its terms include reopening the Strait of Hormuz to all vessels without transit fees, a 60-day window for Iran to transfer enriched uranium to Qatar, and a Lebanon ceasefire monitoring framework. The news triggered an immediate unwind of safe-haven Dollar demand and a sharp repricing across nearly every asset class.

US Dollar Index: partial recovery, but still bearish

The Dollar Index closed the week at 99.34, recovering from a low of 98.40 hit right after the Geneva announcement. That bounce reflects two forces pulling in opposite directions: soft inflation and the Geneva "peace dividend" continue weighing on the Dollar, while a stronger-than-expected Retail Sales report (0.6% versus 0.3% expected) gave it some near-term support. Technically, the Dollar sits below its 20-day and 50-day moving averages but has climbed back above its 200-day average — a partial, tentative repair rather than a confirmed reversal.

Resistance: 99.75, then 100.19. Support: 98.88, then 98.42.

EUR/USD: bullish structure intact for a second week

EUR/USD closed at 1.1569, holding above all three major moving averages for a second consecutive week after touching a high near 1.1720 following the Geneva news. The fundamental case for the Euro has rarely looked stronger: the Fed-ECB rate gap is narrowing as Fed hike odds fall while the ECB weighs its own September move, and the Geneva Framework has effectively removed Europe's energy-cost risk premium tied to the conflict.

Resistance: 1.1621, then 1.1685. Support: 1.1499, then 1.1435.

GBP/USD: highest rate advantage in the G10

GBP/USD closed at 1.3533, sitting just below a resistance zone that's capped the pair for most of 2026. The Bank of England's rate hike to 4.00% on August 7 gives Sterling the largest implied rate advantage of any G10 currency, with money markets now pricing an 85% chance of a further BoE hike by November, compared to just 58% for the Fed in September.

Resistance: 1.3605, then 1.3653. Support: 1.3450, then 1.3398.

What this means for the market

Every major Dollar pair is currently coiled just below key resistance, waiting on a single catalyst rather than trading on ordinary data flow. That catalyst is Friday's Jackson Hole keynote from Fed Chair Warsh — widely seen as the most important scheduled Fed communication of the summer. A hawkish tone reaffirming September as a live hike month would likely send the Dollar higher and pull EUR/USD and GBP/USD back toward support. A balanced or dovish tone, acknowledging the disinflation trend and Geneva's deflationary energy impact, would likely extend the Dollar's slide and push EUR/USD and GBP/USD toward their upside targets.

What traders should prepare for

  • Mark Friday's Jackson Hole keynote (~10:00 AM Mountain Time) as the week's defining event — nearly every major pair's direction hinges on it.

  • Watch Thursday for ECB's Lagarde and BoE's Bailey speeches — either could move EUR/USD or GBP/USD independently of Warsh, especially if they signal a live September hike decision.

  • Keep Wednesday's FOMC Minutes on your radar — they cover the July 29 meeting and may hint at how divided policymakers are heading into September.

  • Expect thin positioning to amplify Friday's move. With markets deliberately staying light ahead of the speech, reactions in either direction could be sharper than usual.

  • Watch Tuesday's UK employment data as a smaller, GBP-specific catalyst ahead of the bigger Thursday/Friday events.

Every major currency pair is parked just below resistance, waiting on one speech to decide the next move. Friday's Jackson Hole keynote from Warsh carries more weight for FX markets than any other scheduled event this month.