EUR/USD, GBP/USD, and USD/CAD Short-Term Forecast for 31/08/2026

EUR/USD, GBP/USD, and USD/CAD Short-Term Forecast for 31/08/2026

Christopher Lewis

Mon, August 31, 2026 at 4:12 PM GMT+3 3 min read

EUR/USD Technical Analysis

The euro has been trying to recover early on Monday, but in a very lackluster fashion. I think at this point, traders are out there trying to sort out what the Friday speech actually means for forex markets when Kevin Warsh basically eliminated the idea of Federal Reserve rate cuts that many traders had been trying to price in.

As usual, the market got way ahead of itself with that. We've been seeing this for a couple of years now where the market gets excited about potential rate cuts coming out of the United States for a couple of weeks, and then reality sets in. And I think that's part of what's going on here.

So, I'm watching the euro to sell it, not to buy it. Somewhere around the 1.1620 level, if we start to see signs of exhaustion, that would be about a 50% retracement of the move from Friday; I might look for getting short there.

GBP/USD Technical Analysis

The British pound, I think, is probably going to be somewhat range-bound, mainly because the British pound, of course, has a higher interest rate attached to it. So, it is a little insulated from US dollar strength, and I think most of the reaction was more about the US dollar than anything else.

I wouldn't read too much into British pound weakness, because at this point in time, even if I want to buy the US dollar, I am going to short other currencies, weaker currencies.

The British pound for me is what I want to buy if the US dollar starts to roll over. Right now, it looks pretty weak, so while shorting the pound could be possible in this general vicinity, the reality is we will probably get more mileage out of other currencies.

USD/CAD Technical Analysis

The US dollar against the Canadian dollar is what I'm looking to buy on a little bit of a dip, and there's a whole host of reasons for this, not the least of which is that the United States and Canada are still in a trade war, and quite frankly, that's not an even match.

So, I like the idea of buying the US dollar on dips here, and it would not surprise me over the next day or two to go looking toward the 1.3950 level.

We'll just see how this plays out. Rates in America continue to rise; that only adds more fuel to the fire.

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This article was originally posted on FX Empire

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