From Fed to FX: Gauge Inflation, Cable’s Breakout & USD/CAD’s Floor Test

Author

FX Rocket Profits
August 11, 2025

Fed’s Crucial Pivot, Cable’s Downtrend Break & CAD’s Support Flip

Markets are bracing for a pivotal week as US CPI, PPI, and Retail Sales loom large. A cooler inflation print could tip the Fed toward an early easing stance, capping Treasury yields and buoying risk assets. Conversely, hotter data would reinforce the Fed’s hawkish resolve, propelling the dollar higher and pressuring equities.

Across the charts, GBP/USD is carving out a potential breakout above its weeks-long descending channel on the 4-hour time frame, with the 100 SMA holding the lows and a cluster of Fib and pivot levels near 1.3450–1.3500 defining the next battleground. Meanwhile, USD/CAD has retraced back to the 50% Fib at 1.3728 and the former resistance zone around 1.3700–1.3750, now acting as a key springboard for the next leg higher.

Stepping back, your edge this week hinges on process discipline: map your risk around these high-probability inflection zones and treat incoming US data as information—not emotion. Anchoring your stops to chart-validated levels will help you trade the Fed pivot game with clarity.

⚡ Weekly Broad Market Recap

  • US equities edged higher as tech led gains, with the S&P 500 up 0.4% and the Nasdaq climbing 0.6%, shrugging off firmer Treasury yields ahead of inflation data.

  • 10-year US Treasury yields held near 4.20% as traders positioned for Tuesday’s CPI release and Thursday’s PPI print.

  • Crude oil dipped 1% toward $68.50 amid easing supply concerns, while gold steadied around $1,950 as the dollar found some support.

🔥 GBP/USD About to Bust Out of Its Downtrend

  • GBP/USD has broken the 4-hour descending channel and is holding above the 100 SMA, eyeing the 1.3450–1.3500 resistance zone marked by the 78.6% Fib and 200 SMA.

  • A clean break above here could pave the way to 1.3600, while a rejection risks a return to 1.3400 or the 1.3150 swing lows.

⚡GBP Rallies Sharply After BOE Delivered “Hawkish Cut” Decision

  • The BOE trimmed Bank Rate by 25 bp to 4.00% in a tight 5-4 vote, with dissenters warning of sticky inflation.

  • Sterling jumped 0.8% against AUD, 0.7% versus EUR, and 0.6% versus JPY as markets repriced the easing path.

  • MPC’s split underscores a “data-dependent” stance: further cuts hinge on incoming price and wage prints.

    📊 USD/CAD Pullback to Resistance-Turned-Support Zone

    • USD/CAD’s rally stalled near 1.3882 and has pulled back to test the 50% Fib at 1.3728 and the former 1.3700–1.3750 resistance zone.

    • The 100 SMA sits above the 200 SMA, reinforcing bull-leaning dynamics. A bounce here could challenge 1.3900, while a break below 1.3690 targets deeper retracements.

This week’s issue zeroes in on the Fed’s potential turning point—CPI, PPI, Retail Sales—and equips you with two chart-driven setups to navigate the volatility: a cable breakout poised around 1.3450–1.3500 and a loonie pullback anchored at 1.3728–1.3750. Pair these technical inflection zones with a disciplined risk framework to trade the looming policy shift with confidence and composure.

Happy trading!

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