EUR/USD, USD/JPY, and USD/CAD – Short-Term Forecast for 20/08/2026

EUR/USD

The euro has pulled back just a little bit in the last hour or so, but has spent most of the day rising against the US dollar so far. With that in mind, it’s possible that pullbacks could see support near the 1.1675 level. I’ll be watching this closely, and a bounce from that area does get me interested in going long the euro for a short-term trade.

I still think structurally we have some issues that the action in the dollar is counter-intuitive to. This is mainly in reaction to the Treasury doing twice the buyback next month of the long end of the curve. People are making two or three-jump assumptions as to what’s going to happen next. That’s normal for the markets, though.

USD/JPY

The US dollar against the Japanese yen: I’m long of this, have been long of this for months, and I am watching the 158.75 region. This is an area that breaking above could signal that the US dollar is starting to rally against the yen as well. It certainly has fared better against the yen than the euro, for the same reasons it has for months now. The Japanese situation is somewhat dire.

USD/CAD

And here in the US dollar against the Canadian dollar, it spent the early part of the session falling. I think any rally towards 1.38 to maybe the 1.3820 level has to be looked at with a bit of suspicion. Traders may try to re-enter shorts there. We’ll just have to wait and see how this plays out.

This is a pair that has definitely run counter to the longer-term trend for a while now. With Canadian numbers coming out better recently and weaker US numbers, this does make sense. Sooner or later, though, the United States does drag Canada down with it, so there seems to be a bit of a turn later in this scenario, but we’ll just have to wait and see how this plays out.