The US dollar failed to hold its gains following a significantly stronger-than-expected US employment report. The economy added 162,000 jobs versus the forecast of 56,000, while the unemployment rate remained at 4.1% and previous employment figures were revised higher. The data initially triggered a sharp rise in the dollar, but the US currency subsequently gave back most of its gains. One factor limiting the impact of the strong report was a slowdown in annual wage growth, which somewhat reduced its overall effect. The market reaction suggests that even strong employment data have not yet led to a sustained repricing of expectations for the Federal Reserve’s future policy.
Market attention is now shifting towards US inflation data. A strong labour market reduces the need for rapid Fed easing, but the future path of interest rates will depend to a large extent on developments in price pressures. As a result, the upcoming inflation figures could become the next key driver for the dollar.
AUD/USD The Australian dollar benefited from the subsequent weakening of the US currency, with AUD/USD reaching fresh recent highs near 0.7200. The AUD is also receiving support from expectations that the Reserve Bank of Australia will maintain a relatively hawkish stance, limiting the downside potential for the Australian currency.
Technical analysis of AUD/USD points to the possibility of further gains towards the 0.7260–0.7280 area, provided the price holds above 0.7200. A return below 0.7200, followed by a sustained move below this level, would weaken the bullish scenario and increase the likelihood of a corrective decline.
USD/CAD USD/CAD continues to decline and has approached the August lows around 1.3730. In addition to the weaker US dollar, the Canadian dollar is being supported by oil prices, which remain sensitive to geopolitical tensions surrounding Iran.
A sustained move below 1.3730, followed by this level becoming resistance, could open the way for a further decline towards the 1.3520–1.3570 area.
Key events for USD/CAD and AUD/USD:
today at 14:00 (GMT+3): US Mortgage Market Index; today at 15:15 (GMT+3): weekly change in US employment according to ADP; today at 23:30 (GMT+3): weekly US crude oil inventories according to the American Petroleum Institute (API).
Overall, following the strong NFP report, the dollar failed to hold its initial gains, allowing the commodity-linked currencies to return to important technical levels. AUD/USD is testing the area of recent highs, while USD/CAD is approaching its August lows. With a relatively quiet economic calendar, further moves will depend on how expectations for Fed policy are repriced and on positioning ahead of the next US inflation data.
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Silver (XAG/USD) builds on its intraday ascent and climbs back closer to the weekly high, around the $67.00 neighborhood during the early European session on Wednesday. The white metal, however, remains confined within a familiar range held over the past week or so, warranting some caution for bulls ahead of the crucial US inflation figures.
From a technical perspective, the XAG/USD bulls need to wait for acceptance above the 100-period Simple Moving Average (SMA) on the 4-hour chart, currently pegged just ahead of the $67.00 mark, before placing fresh bets. This will also mark a fresh breakout through the trading range and pave the way for additional near-term gains.
Meanwhile, the Relative Strength Index (RSI) has recovered toward the mid-50s, hinting at stabilizing momentum. Moreover, the Moving Average Convergence Divergence (MACD) shows a modest positive reading after a shallow dip, suggesting that the downside pressure is fading but not yet reversed, while the XAG/USD remains below the 100-SMA.
On the topside, momentum beyond the $67.00 mark could extend further towards retesting the monthly swing high, around the $68.00 round figure. Some follow-through buying would ease any near-term bearish tone and reaffirm a constructive outlook. On the downside, immediate support is seen near x$65.40-$65.30 or the lower boundary of the trading range.
A convincing break below would shift the near-term bias in favor of bearish traders and expose the monthly swing low, around the $63.35-$63.30 region, and drag the XAG/USD further below the $63.00 mark, towards the 62.20 support zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD 4-hour chart
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
USDCAD losing momentum The Canadian dollar (USDCAD) continues to gain over the greenback after pushing past the 1.3800 level. The pair looks to move away from its recent top around 1.3940.
TL;DR: Silver is outperforming Gold on the same Dollar weakness, with the Gold/Silver ratio rejecting resistance and Silver approaching its breakout trigger first — but whether Silver is genuinely leading Gold, or just outperforming it, depends on whether Gold follows through its own key level at 4,510.90.
Silver Is Doing More With the Same Dollar Tailwind Gold and Silver are both benefiting from a weaker Dollar, but they aren’t trading that support the same way. Silver is outperforming, sitting around 66.89, above its four-hour 55 EMA at 66.34, while Gold remains near 4,411.26 and below its own four-hour 55 EMA at 4,433.28. The difference isn’t just a one-day move — it has been building for roughly two months in the Gold/Silver ratio, which has now turned lower again after another rejection from descending resistance.
That makes the ratio the natural place to start. The weaker Dollar explains why both metals can rise together. It doesn’t explain why Silver has repeatedly done better. Silver’s industrial role gives it a different demand structure from Gold’s purely monetary and financial characteristics, while the smaller Silver market can produce larger relative moves once momentum builds. Those mechanisms may help explain the divergence, but the stronger evidence is in the price relationship itself: the ratio has been falling since July.
Currency heatmap.
The Ratio Has Rejected Exactly Where It Needed To The Gold/Silver ratio fell to 64.92 in late August and then mounted a recovery to 67.64. That rebound ran directly into the descending resistance line that has capped the ratio throughout the broader decline, and it has now rolled over again to around 65.90.
The technical backdrop supports the reversal. The ratio remains below its four-hour 55 EMA at 66.79, MACD is negative and below its signal line, and RSI has dropped to around 34.70. Silver therefore retains the relative advantage while the descending trendline caps the upside.
But there’s an important distinction. The ratio has turned lower again; it hasn’t yet confirmed another extension of the downtrend. The next test is 64.92, the late-August low. A return there would complete most of the recent round trip from support to resistance and back. A decisive break below 64.92 would be the stronger signal that Silver’s relative strength is accelerating.
ActionForex’s Technical View on Silver: Reaching Its Trigger First Silver itself is now approaching 67.47, which capped the previous rebound and provides the clearest immediate breakout level. The recovery from 63.28 has already carried price back above the four-hour 55 EMA at 66.34, while momentum has improved alongside it. MACD is positive at roughly 0.09 versus 0.02 for the signal line, and RSI has climbed to around 56.81.
A clean break of 67.47 would open the way for a retest of 71.16. More importantly, the move would be emerging from a technically solid foundation. The recent correction found support around 62.54–62.92, where a structural pivot overlaps closely with the 50% retracement of the entire rise from 54.78 to 71.16.
That confluence keeps the broader rise from 54.78 intact under the current wave interpretation. Silver is therefore not simply chasing higher from an extended condition — it has corrected, held a meaningful support zone, and is now attempting to restart the advance.
ActionForex’s Technical View on Gold: The Harder Part of the Test Gold hasn’t reached the same point yet. Its rebound from 4,282.23 stalled at 4,510.90, and price subsequently slipped back beneath the four-hour 55 EMA at 4,433.28. At around 4,411.26, Gold is showing much less momentum than Silver. RSI is almost perfectly neutral at 49.85, while MACD remains slightly negative.
That makes 4,510.90 the level that matters most for Gold. A firm break would suggest the decline from 4,697.07 completed at 4,282.23 and would reopen the way toward a retest of 4,697.07. Until then, Gold remains inside its corrective structure.
This difference is exactly why Silver is interesting as a possible leading indicator. Silver is already close to its breakout trigger. Gold is not.
Silver Can Lead, but Gold Has to Follow There’s a tempting story here: Silver breaks 67.47, the ratio continues lower, and Gold follows through 4,510.90 shortly afterward. If that sequence happens, Silver’s relative strength would have provided an early indication that the broader precious-metals rebound was strengthening before Gold itself confirmed it.
But the thesis has an equally important failure condition. If Silver clears 67.47, runs toward 71.16, and the ratio falls through 64.92, while Gold remains capped below 4,510.90, then Silver wasn’t really leading Gold — it was simply outperforming it. The move could still be powerful, but it would be a Silver-specific relative trend rather than a signal that Gold was preparing for its own breakout.
That distinction matters because relative strength is observable. A leading relationship has to be demonstrated.
Three Numbers Will Tell Us Whether the Relationship Is Real The setup now comes down to three levels. For Silver, 67.47 is the immediate trigger — a firm break backed by sustained MACD and RSI strength would open 71.16. For the Gold/Silver ratio, 64.92 is the confirmation point — a decisive break would show Silver’s outperformance accelerating beyond the recent pattern. And for Gold, 4,510.90 is the final test.
That last level is the most important for the broader thesis. Silver can outperform without telling us anything about Gold. But if Silver breaks first and Gold subsequently clears 4,510.90, the case that Silver was providing a genuine leading tell becomes much stronger.
Silver is closer to its breakout. Whether it’s actually leading Gold will only become clear if Gold eventually follows through its own.
Key Takeaways Silver is outperforming Gold on the same Dollar-weakness tailwind, a divergence that has been building in the Gold/Silver ratio for roughly two months. The ratio rejected resistance near 67.64 and has rolled over to 65.90, with 64.92 as the confirmation level for Silver’s relative strength accelerating further. Silver is approaching its own breakout trigger at 67.47, backed by a solid technical foundation after finding support at the 62.54-62.92 confluence zone. Gold’s equivalent trigger, 4,510.90, is further away, with the metal showing far less momentum (neutral RSI, slightly negative MACD) than Silver right now. Whether Silver is genuinely leading Gold, rather than just outperforming it, will only be confirmed if Gold also clears 4,510.90 after Silver breaks 67.47.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
FX analysts see improving yield support for the Euro ahead of Thursday’s ECB decision, with resistance at 1.1680-1.1700. The Euro to Dollar (EUR/USD) exchange rate recovered from earlier losses to trade near 1.1626 on Tuesday afternoon, holding Monday’s gains as expectations of an ECB rate increase supported the single currency.
EUR/USD was virtually unchanged on the day at the time of writing, having risen 0.12% on Monday.
Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.162453 (-0.03%)
Pound to Dollar (GBP/USD): 1.355083 (+0.03%)
Dollar to Yen (USD/JPY): 154.0889 (+0.17%)
Scotiabank maintains a neutral-to-bullish short-term outlook, with improving interest-rate differentials supporting its assessment.
“The outlook for relative central bank policy remains supportive as we note the continued recovery in yield spreads with a narrow (2Y Germany-US yield spread only) fair value estimate currently around 1.1650.”
That estimate sits modestly above the latest exchange rate, although it measures only the relationship with two-year German and US yields rather than providing a broader price target.
ECB Guidance Could Determine the Next Euro Move Scotiabank expects a widely anticipated 25-basis-point hike at Thursday’s ECB monetary policy meeting, alongside a relatively hawkish message on energy-driven inflation risks.
With an increase already priced in, the scope for further Euro gains may depend more on guidance about subsequent decisions, as we explored in our latest coverage of ECB expectations.
Options pricing has also become less defensive.
“Risk reversals are actually up on the day, suggesting a fading premium for protection against EUR weakness,” Scotiabank said.
The bank reported little currency reaction to Sunday’s German state election result, while stronger German trade figures were offset by a disappointing French deficit.
Image: EUR/USD last 48hr chart Scotiabank describes the medium-term trend as bullish following the recovery from late June, although its longer-term assessment remains range-bound and the RSI is only marginally above neutral.
“We see near-term support around last week’s lows near 1.1580 and see limited resistance ahead of the 1.1680/1.1700 range.”
Those resistance levels precede the higher 1.18-1.20 area in UBS’s Euro-Dollar outlook.
Thursday’s decision and accompanying guidance will test whether improving yield support is enough to carry the EUR/USD exchange rate towards 1.1700.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Scotiabank strategists Shaun Osborne and Eric Theoret describe GBP/USD as slightly softer but supported by expectations of further Bank of England (BoE) tightening into year-end. With limited data before Friday’s trade and industrial production releases, markets price incremental hikes for November and December. They highlight a bullish medium-term trend, yet see the pair constrained in a near-term 1.3500–1.3600 range as traders watch fiscal risks into the Autumn Statement.
Pound supported but range bound"As with EUR and the ECB, the outlook for relative central bank policy remains supportive for the pound, given expectations for tightening into year-end."
"The September 17 meeting offers little, however short term rates markets are currently pricing in 16bpts of tightening for November 5th, and just over 30bpts for December 17th."
"Political developments have been limited and we continue to highlight the risk of sentiment-related movement tied to fiscal risks into the Autumn Statement (budget) scheduled for late October."
"The medium-term trend is bullish, with a clear sequence of higher lows and higher highs since late June."
"We look to a near-term range bound between 1.3500 and 1.3600."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
In this webinar we take an in-depth look at the technical trade levels for the US Dollar (DXY), Euro (EUR/USD), British Pound (GBP/USD), Australian Dollar (AUD/USD), Canadian Dollar (USD/CAD), Japanese Yen (USD/JPY), Swiss Franc (USD/CHF), Gold (XAU/USD), Crude Oil (WTI), Bitcoin (BTC/USD), S&P 500 (SPX500), Nasdaq (NDX), and Dow Jones (DJI). These are the levels that matter on the technical charts into the weekly open.
Key Points:EUR/USD is swinging between gains and losses as traders react to Germany's Exports data. USD/CAD made an attempt to settle below the support at 1.3750 - 1.3765.USD/JPY rebounded from session lows as traders focused on rising Treasury yields.
EUR/USD
-0.02%
EUR/USD ForecastGBP/USD
-0.07%
GBP/USD ForecastUSD/CAD
-0.13%
USD/CAD ForecastUSD/JPY
+0.28%
USD/JPY Forecast
U.S. Dollar Attempts To Rebound After Recent Pullback
DXY 080926 4h Chart U.S. Dollar Index moved away from session lows as traders focused on rising Treasury yields. The yield of 2-year Treasuries climbed towards the 4.40% level, while the yield of 10-year Treasuries settled near 4.80%.
I’d note that Bessent’s buyback efforts have so far failed to push yields of longer-dated bonds lower. The yield of 30-year Treasuries settled near 5.25%, close to the critical 5.30% level.
In case U.S. Dollar Index climbs above the 99.00 level, it will head towards the nearest resistance level, which is located in the 99.25 – 99.40 range.
EUR/USD Stays Above The 1.1600 Level EUR/USD 080926 4h Chart EUR/USD is mostly flat as traders focus on Germany’s Exports report. The report showed that Exports decreased by -0.8% month-over-month in July, compared to analyst forecast of 0%.
I believe that traders are already cautious ahead of the ECB Interest Rate Decision, which will be released on Thursday.
The nearest support level for EUR/USD is located in the 1.1600 – 1.1615 range. If EUR/USD manages to settle below the 1.1600 level, it will head towards the next support level at 1.1500 – 1.1515. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Attempts To Settle Above 1.3565 GBP/USD 080926 4h Chart GBP/USD continues its attempts to settle above the resistance level at 1.3550 – 1.3565 as traders focus on the BRC Retail Sales Monitor report from the UK. The report showed that Retail Sales increased by +0.5% year-over-year in August, compared to analyst forecast of +1.2%.
If GBP/USD manages to settle above the 1.3565 level, it will head towards the next resistance, which is located in the 1.3635 – 1.3650 range. On the support side, a move below the 50 MA at 1.3533 will push GBP/USD towards the next support at 1.3470 – 1.3485.
USD/CAD Rebounds From Session Lows
USD/CAD 080926 4h Chart USD/CAD moved lower as traders focused on U.S. – Canada trade war. Canada’s Prime Minister Mark Carney said that counter-tarrifs against the U.S. were necessary to protect Canadian businesses. Interestingly, the market does not believe that the trade war is a negative catalyst for the Canadian currency.
From the technical point of view, USD/CAD made an attempt to settle below the support level at 1.3750 – 1.3765 but lost momentum and rebounded towards the 1.3790 level. In case USD/CAD settles back above 1.3800, it will head towards the nearest resistance at 1.3825 – 1.3840. A successful test of this level will push USD/CAD towards the next resistance at 1.3900 – 1.3915.
USD/JPY Climbed Back Above 154.00 Amid Rising Treasury Yields USD/JPY 080926 4h Chart USD/JPY attempts to rebound after the strong sell-off as traders react to rising Treasury yields and focus on Japan’s second-quarter GDP Growth Rate report. The report showed that Japan’s GDP Growth Rate was +0.4%, in line with analyst estimates.
Traders try to guess whether BoJ is ready to intervene again at current levels or the Bank has finished its interventions. The expectations of a rate hike from the BoJ served as an additional bullish catalyst for the yen in recent trading sessions, but Fed may also raise rates at the meeting on September 16.
In case USD/JPY stays above the 154.00 level, it will head towards the resistance level at 155.00 – 155.50. A move above the 155.50 level will open the way to the test of the resistance level at 157.50 – 158.00.
If you’d like to know more about how to trade forex, please visit our educational area.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
XAU/USD Current Price: $4,398The Middle East conflict keeps financial markets in risk-averse mode.Investors bet the US Federal Reserve will hike interest rates in September. XAU/USD is trading range-bound, although the risk skews to the downside.Gold attempt to regain its bullish momentum faltered around $4,700, with the precious metal now struggling to retain the $4,400 mark. The XAU/USD pair peaked in late August amid reduced speculation that the United States (US) Federal Reserve (Fed) would hike interest rates in September.
Risk-related trading has dominated financial markets for most of this year, with the main focus on Oil price movements and their impact on inflation. The conflict between the US and Iran, which keeps the main Middle East sea passage interrupted, is the main driver for energy prices.
US President Donald Trump launched an attack on Tehran on claims that the Islamic country continued to develop nuclear weapons. But of course, making the US the number one global Oil exporter was also behind the decision to initiate a war. What Trump did not calculate is what Iran’s stubbornness is costing the American people and the rest of the war.
Iran not only refused to capitulate, but also made its own demands and blocked the Strait of Hormuz. As a result, energy prices skyrocketed and exposed the fragile equilibrium between economic progress and inflation. This implies tighter monetary policy, which in turn slows economic growth.
President Trump for sure wants economic growth, but he also demands lower interest rates from the US central bank, something Chair Kevin Warsh & co cannot deliver with increasing price pressures. Instead, the Fed is leaning toward rate hikes.
The situation created a particular market response: In a risk-averse scenario, investors tend to rush into safety. Gold is the preferred refuge, usually followed by the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar (USD) is also considered a safe-haven asset, yet in tumultuous times, Gold demand tends to outpace that of the Greenback.
However, when potential US Fed rate hikes are added to the equation, the USD firms up vs the precious metal. That’s the case these days.
XAU/USD Technical Outlook:As market participants bet on a Fed interest rate hike in September, XAU/USD comes under pressure.
From a technical point of view, the 4-hour chart shows XAU/USD as bearish, as the pair sits below the 20-period and 100-period moving averages while holding above the 200-period moving average. The 20-period SMA at $4,433.64 and the 100-period SMA at $4,491.14 act as overhead caps, suggesting rallies remain corrective within a broader consolidation. Momentum readings reinforce this subdued bias, with the 14-period Relative Strength Index (RSI) indicator heading marginally lower around 44 and the 14-period Momentum indicator developing below its midline, albeit directionless.
In the daily chart, XAU/USD sits between key moving averages, holding above the 100-day SMA at $4,346.86 while remaining capped by the 20-day SMA at $4,468.52 and the 200-day SMA at $4,536.74. The SMAs are neutral-to-bearish, reflecting increasing selling interest. The RSI indicator, in the meantime, pierces its midline, while the Momentum indicator gains downward traction within neutral levels, in line with lower lows ahead.
On the topside, immediate resistance emerges at the 20-period SMA near $4,433.64, with a break above this level exposing the denser barrier formed by the 100-period SMA around $4,491.14. On the downside, initial support comes from the market’s ability to defend the current area around $4,398, with the 100-day SMA at $4,346.86 as the next key floor; a clear drop below this level would expose deeper corrective risk within the broader range.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
The Pound Sterling (GBP) registers modest gains of over 0.08% on Tuesday as Bank of England (BoE) policymakers testify before the UK Treasury Select Committee, while a light economic docket in the US keeps the Greenback with a negative tone. The GBP/USD pair trades at 1.3548 after bouncing off the daily low of 1.3521. Read More...
GBP/USD Price Forecast: Consolidates below mid-1.3500s; bullish potential seems intactThe GBP/USD pair struggles to capitalize on the previous day's modest gains and oscillates in a range below mid-1.3500s during the Asian session on Tuesday. The downside, however, remains cushioned as the US Dollar (USD) selling remains unabated on the back of a broadly firmer Japanese Yen (JPY). Read More...
British Pound drifts higher to near 1.3550 on UK fiscal discipline pledgesThe GBP/USD pair gains ground to near 1.3545 during the Asian trading hours on Tuesday. The British Pound (GBP) edges higher against the US Dollar (USD) after UK Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK. Read More...
It Has Held Up Fairly Well Ultimately, this is a market that is dealing with the 10-year at points in time going to 4.8%. But we also have heavy inflation coming out of the crude oil market, and that could be a bit of an issue as well.
As long as the oil situation remains so messy with the headlines coming out of the Persian Gulf, it’s difficult to imagine that the bond markets will be calm. This is a scenario that has been the norm for some time now, and there are no signs of it changing in the short-term.
Furthermore, we get the ECB rate hike, at least the expected rate hike, on Thursday. We also get CPI on Friday in the United States and then a Federal Reserve potential rate hike next week.
There’s a lot going on in the short term. It has held up fairly well. I do have to say that, but it just doesn’t have any momentum. Short-term traders are probably attracted to the somewhat well-defined range at the moment, as the markets are simply not giving bigger moves currently.
Silver (XAG/USD) pulls back on Tuesday after failing to hold its earlier advance. At the time of writing, the metal trades around $66 after reaching an intraday high near $67.19. The retreat comes as rising Oil prices add to concerns that inflation could stay elevated and encourage central banks to keep borrowing costs high.
Higher interest rates tend to weigh on Silver because the metal offers no yield. Expectations of tighter Federal Reserve (Fed) policy have strengthened since Friday’s upbeat US employment report, with the CME FedWatch tool showing around a 60% chance of a 25-basis-point rate hike next week.
However, the downside in Silver appears limited as the US Dollar (USD) stays under pressure. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 98.82 after briefly reclaiming 99, hovering near its lowest level in more than two weeks.
Attention now turns to the US Producer Price Index (PPI) on Thursday and Consumer Price Index (CPI) on Friday. The figures will help determine whether the Fed raises interest rates at its September 15-16 meeting.
Technical Analysis
On the daily chart, XAG/USD holds above the 50-day simple moving average (SMA) at $62 and a dense Fibonacci support band clustered between the 61.8% retracement at $60.97 and the 38.2% level at $64.80, suggesting downside attempts remain cushioned for now.
However, price still trades below the 100-day SMA at $67.28 and the 23.6% Fibonacci retracement at $67.17, keeping the broader tone neutral, with the Relative Strength Index (RSI) around 53 and a slightly negative Moving Average Convergence Divergence (MACD) hinting at fading upside momentum.
On the topside, initial resistance is seen at the 23.6% Fibonacci retracement at $67.17, closely followed by the 100-day SMA at $67. A daily close above this confluence would open the way toward the next hurdle at the prior swing anchor near $71 and then the 200-day SMA at $72.
On the downside, immediate support comes from the 38.2% retracement at $64.80, with further cushions at the 50% level at $62.89 and the 61.8% retracement at $60.97. A break below this band would expose deeper Fibonacci support at $58.24 and $54.77, where the 50-day SMA at $62 currently underpins the broader consolidation.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Scotiabank strategists Shaun Osborne and Eric Theoret report that the Euro (EUR) is little changed near the low 1.16s as markets await Thursday’s European Central Bank (ECB) meeting, where a 25 bps hike and a hawkish tone are anticipated. They note supportive yield spreads and a fair value estimate around 1.1650, with technicals showing a marginally bullish RSI, a medium-term uptrend, and limited resistance toward 1.1680–1.1700.
Euro steady before ECB decision"Focus this week centers on Thursday’s ECB, where policymakers are widely expected to deliver a 25bpt hike while maintaining a relatively hawkish tone as they seek to lean against the risk of energy-led inflation and mitigate any potential for broadening inflationary pressures."
"The outlook for relative central bank policy remains supportive as we note the continued recovery in yield spreads with a narrow (2Y Germany-US yield spread only) fair value estimate currently around 1.1650. In terms of fundamental releases, Germany’s July trade data delivered a larger than expected surplus while France disappointed with a wider than expected deficit."
"The calendar is relatively empty ahead of the ECB. In terms of sentiment, we note the absence of any meaningful reaction to Sunday’s German state election result that delivered an overwhelming victory for the far right AfD. Risk reversals are actually up on the day, suggesting a fading premium for protection against EUR weakness."
"Neutral/bullish – the RSI is bullish, albeit only marginally so as it hovers just above the neutral threshold at 50. The medium-term trend is bullish with a clear recovery from the late June low. The broader, longer-term chart remains a flat range."
"We see near-term support around last week’s lows near 1.1580 and see limited resistance ahead of the 1.1680/1.1700 range."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
TD Securities remains constructive on South African Rand (ZAR), noting that domestic headwinds have failed to generate sustained weakness and that USD/ZAR’s downtrend remains intact. With Gold prices supported and global risk sentiment resilient, they argue ZAR offers attractive carry and see USD/ZAR rallies as opportunities to sell.
USD/ZAR rallies seen as selling opportunities"In South Africa, domestic headwinds have repeatedly failed to generate sustained ZAR weakness."
"USD/ZAR ignored new domestic political corruption allegation headlines from Q2 '26."
"While the unexpected SARB rate hold decision briefly drove USD/ZAR above the 200d SMA in July, market was able to look past this policy misstep and push USD/ZAR back below 16.00 in August."
"Global macro variables such as gold price and equity risk sentiment continue to serve as the main drivers for ZAR."
"USD/ZAR spot downtrend remains intact. We still view USD/ZAR rallies as selling opportunities so long as gold remains supported above $4,000/oz and global equity sentiment stays resilient."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
This is a market that has a lot of different things going on at the same time, not the least of which would be geopolitical risk and oil causing a lot of potential inflationary concerns.
There are several things coming up in the next few days that could have an influence on gold, not the least of which would be CPI on Friday, as it could influence the Federal Reserve next Wednesday and the expectations around a rate hike.
The Safety Bid Is Still Out There With the War The ECB is expected to raise rates by a quarter basis point this week. And with that, the question is, will higher interest rates continue to keep gold somewhat suppressed?
The safety bid is still out there with the war, but ironically, the war is also causing inflation and inflation expectations that are keeping the metals suppressed. So, you have a situation where gold doesn’t have anywhere to go.
What we really will be watching for, in my opinion, is any type of divergence in central bank behavior. If one central bank sounds a little bit more dovish than the other, that can influence the US dollar, which has a significant influence on gold.
Right now, it looks very neutral, and that does make a certain amount of sense because, with all of this information coming out, and of course, the errant Middle East headline, this is a tight market to be trading.
EUR/USD trades virtually flat near 1.1623 during American trading hours on Tuesday. The US Dollar (USD) struggles to hold its earlier gains, helping the Euro (EUR) recover from its intraday low.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 98.82 after briefly reclaiming 99, hovering near its lowest level in more than two weeks.
The Greenback struggles to gain traction despite hawkish Federal Reserve (Fed) expectations. Escalating tensions in the Middle East do little to revive defensive demand for the currency, which is largely weighed down by the sharp rise in the Japanese Yen (JPY).
Fresh hostilities in the Middle East keep Oil prices elevated, adding to inflation concerns and strengthening the case for tighter monetary policy. The US Producer Price Index (PPI) on Thursday and Consumer Price Index (CPI) on Friday will be the next major test for the Fed ahead of its policy decision.
According to the CME FedWatch Tool, markets see around a 60% chance that the Fed will raise interest rates by 25 basis points at its September 15-16 meeting.
On the Euro side, attention is firmly on the European Central Bank’s (ECB) interest-rate decision on Thursday. The ECB is widely expected to raise its deposit rate by 25 basis points to 2.50%, with markets fully pricing in the move. This would be its second rate increase this year after the June hike.
Eurozone inflation accelerated to 3.3% in August from 2.9% in July, largely due to higher energy prices. As the rate hike is already priced in, the Euro’s reaction could depend more on President Christine Lagarde’s comments and the ECB’s updated economic projections. Traders will look for signs of whether policymakers are considering another increase after September or plan to pause.
Analysts at ING highlight that the latest data revisions have reinforced the Eurozone’s growth narrative, with second-quarter output "revised up from 0.4% to 0.6% QoQ, driven by stronger Irish growth on the back of robust multinational performance." They note that, more broadly, "Europe’s resilience despite geopolitical developments and higher commodity prices remains a key theme of the summer and has likely helped keep the euro relatively expensive."
Even so, ING maintains a cautious stance on the currency pair, stressing that "our short-term downside preference in EUR/USD is still mainly driven by our USD view and expectation of a September Fed hike." The bank adds that "the latest rise in energy prices adds further support" to this bias, reinforcing their view that the Euro’s current strength may prove difficult to sustain in the near term.
ECB FAQs The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
EUR/USD 15 minute chart August 31 2026 (Sell entry)
EURUSD moves lower and on September 1 2026 price hits the 3R target at 1.1576 from 1.1612 and I closed the sell trade for +36 pips (+3% gain risking 1% on every trade)
EUR/USD 15 minute chart September 1 2026 (Targets hit/trade closed)
A trader should always have multiple strategies all lined up before entering a trade. Never trade off one simple strategy. When multiple strategies all line up it allows a trader to see a clearer trade setup. We at EWF never say we are always right. No market service provider can forecast markets with 100% accuracy. Only thing we at EWF 100%, is that we are RIGHT more than we are WRONG.
Commerzbank’s Thu Lan Nguyen notes Gold has stabilised around USD 4,400 per ounce, with markets now focused on upcoming US inflation data as the key driver for the Federal Reserve’s September decision. Futures imply roughly a 60% probability of a rate hike, leaving room for a sharp repricing and a potentially volatile week for Gold prices.
Inflation print and Fed expectations"The price of gold has stabilised at around 4,400 USD per troy ounce in recent days. Last Friday’s surprisingly strong US labour market data only caused a brief dip."
"The reason is that this week’s upcoming US inflation data is seen as the decisive factor for the Fed’s forthcoming interest rate decision. Fed Governor Christopher Waller also more or less confirmed this recently."
"At present, the market is therefore quite divided regarding the Fed’s September meeting and is pricing in a roughly 60% chance of an interest rate hike."
"As such, there is still considerable scope for a correction in interest rate expectations should the inflation data surprise significantly on the upside or downside."
"A potentially volatile week therefore lies ahead for the price of gold."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
GBP/JPY rebounds on Tuesday as the Japanese Yen (JPY) loses momentum following its sharp rise since the start of the month. At the time of writing, the cross trades around 208.90 after briefly falling to 207.10, its lowest level since December 2025.
Some profit-taking in the Yen, combined with oversold Relative Strength Index (RSI) conditions in GBP/JPY, appears to be helping the cross rebound on Tuesday. Higher Oil prices also add pressure on the Japanese currency. Japan relies heavily on imported energy, particularly from the Middle East.
The Yen’s recent rally has been driven by expectations that the Bank of Japan (BoJ) will speed up its monetary policy tightening, prompting traders to unwind Yen-funded carry trades and bring capital back to Japan.
Better-than-initially-estimated Japanese Gross Domestic Product (GDP) data released earlier in the day reinforced expectations of a BoJ rate increase but provided little support to the Yen. The central bank is widely expected to raise interest rates at its September 17-18 meeting.
On the UK side, the Bank of England (BoE) is expected to leave interest rates unchanged for a sixth consecutive meeting on September 17. Attention now turns to the BoE Monetary Policy Report hearing later on Tuesday. Governor Andrew Bailey and other Monetary Policy Committee members will testify before lawmakers and traders will look for fresh clues about the interest rate path.
Technical Analysis
On the daily chart, GBP/JPY keeps its bearish near-term bias as it trades below the 50-day, 100-day and 200-day simple moving averages (SMAs). However, the Relative Strength Index (RSI) near 25 indicates oversold conditions and helps explain Tuesday’s corrective rebound. The Moving Average Convergence Divergence (MACD) stays below zero, while the Average Directional Index (ADX) rises toward 28, suggesting the broader downtrend remains strong.
On the upside, the psychological 210 mark acts as immediate resistance. A break above this level could open the door toward the 200-day SMA at 213, followed by the 100-day SMA at 214. Further resistance is seen at 217.50 and 219.50.
On the downside, Tuesday’s low near 207.10 provides immediate support. A break below this level could expose the psychological 205.00 mark. Buyers would need to push GBP/JPY firmly above the 210.00-215.00 region to ease the bearish pressure and support a stronger recovery.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen Price Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.09%-0.01%-0.03%-0.07%0.08%0.63%0.26%EUR-0.09%-0.10%-0.07%-0.11%-0.02%0.54%0.17%GBP0.00%0.10%0.00%-0.07%0.07%0.63%0.28%JPY0.03%0.07%0.00%-0.05%0.10%0.66%0.30%CAD0.07%0.11%0.07%0.05%0.14%0.70%0.35%AUD-0.08%0.02%-0.07%-0.10%-0.14%0.58%0.20%NZD-0.63%-0.54%-0.63%-0.66%-0.70%-0.58%-0.36%CHF-0.26%-0.17%-0.28%-0.30%-0.35%-0.20%0.36% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
ING’s Francesco Pesole notes that stronger second-quarter Eurozone growth and resilience to geopolitical and commodity shocks have kept the Euro (EUR) relatively expensive. However, he maintains a short-term downside bias in EUR/USD driven by expectations of a September Fed hike and worsening Eurozone terms of trade, seeing a move towards 1.150 over coming weeks as a realistic scenario ahead of a potentially dovish European Central Bank (ECB) meeting.
Euro resilience but softer path seen"Second-quarter eurozone growth was revised up from 0.4% to 0.6% QoQ, driven by stronger Irish growth on the back of robust multinational performance."
"More broadly, Europe’s resilience despite geopolitical developments and higher commodity prices remains a key theme of the summer and has likely helped keep the euro relatively expensive."
"Our short-term downside preference in EUR/USD is still mainly driven by our USD view and expectation of a September Fed hike. That said, the latest rise in energy prices adds further support."
"Real-time estimates suggest the eurozone’s commodity terms of trade are now worse than at the previous low in March."
"Ahead of Thursday’s ECB meeting, we see some dovish risks given the market’s aggressive tightening expectations. In that context, a move towards 1.150 over the coming weeks remains realistic in our view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
GBP/USD Price Forecast: Consolidates below mid-1.3500s; bullish potential seems intactThe GBP/USD pair struggles to capitalize on the previous day's modest gains and oscillates in a range below mid-1.3500s during the Asian session on Tuesday. The downside, however, remains cushioned as the US Dollar (USD) selling remains unabated on the back of a broadly firmer Japanese Yen (JPY).
That said, firming US Federal Reserve (Fed) rate hike bets, along with geopolitical uncertainties stemming from escalating US-Iran tensions, act as a tailwind for the USD and cap the GBP/USD pair. Traders also seem hesitant ahead of this week's release of the monthly UK GDP and the latest US inflation figures. Read more...
British Pound drifts higher to near 1.3550 on UK fiscal discipline pledgesThe GBP/USD pair gains ground to near 1.3545 during the Asian trading hours on Tuesday. The British Pound (GBP) edges higher against the US Dollar (USD) after UK Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK.
Healey promised to cut regulatory barriers to UK investment and create new testing freedoms for emerging technologies, per the BBC. Additionally, the UK Chancellor on Monday announced plans to give city regions greater powers to attract private investment as part of Prime Minister Andy Burnham's plan to devolve power away from central government. Read more...
USD/JPY has broken below BofA’s 155 trigger as BoJ tightening bets, repatriation talk and carry liquidation pull its 149 target closer. The US Dollar to Japanese Yen (USD/JPY) exchange rate plunged to 152.89 on Tuesday, extending its September fall beyond 4% as Bank of Japan tightening bets, repatriation speculation and carry-trade liquidation drove fresh Yen buying.
BofA’s 149 year-end target now sits only 2.5% below the latest low, less than a week after the bank mentioned selling USD/JPY at 159.70.
The move from BofA’s entry level to 152.89 represents a gain of roughly 4.3% for the short position before carry and trading costs.
“We recommend selling USD/JPY at 159.70, targeting 149.0 (our year-end forecast) with a stop loss at 164.0.”
The 155 Trigger Has Already Broken BofA identified 155 as more than a conventional support level.
“From here, 155 is a key level below which we think domestic yen buying could accelerate.”
That break has now happened decisively, with USD/JPY falling from around 160 at the beginning of September to below 153 during Tuesday’s Asian session.
The speed of the decline suggests that stop-loss orders and the unwinding of leveraged Yen shorts have reinforced the move.
When we examined JPMorgan’s 164 year-end forecast last week, USD/JPY was still holding above the bottom of its 155-165 central range.
The pair has since fallen through that floor, leaving BofA’s bearish call much closer to current market direction.
Image: USD/JPY 3-month graph Policy and Domestic Flows Support the Yen The carry-trade unwind is only one part of BofA’s case.
The bank also expects faster BoJ tightening and sees scope for Japanese institutions to bring more capital home as domestic bond yields become increasingly attractive.
“Potential rotation from foreign bonds into JGBs among Japanese investors, including pension funds, could support JPY.”
BofA argues that higher Japanese rates would weaken the justification for maintaining large short-Yen positions.
“If the BoJ raises rates at its September meeting and maintains a hawkish communication stance, the rationale for selling the yen would weaken.”
The Bank of Japan meets on September 17-18, with markets now almost fully pricing a 25-basis-point increase to 1.25%.
BofA expects quarterly rate increases to take the policy rate towards 2% by July 2027, while stronger Japanese wage and growth data have added credibility to the tightening outlook.
There are still reversal risks.
A less hawkish BoJ decision or another firm US inflation report could revive demand for the Dollar and slow the move towards 149.
For now, however, the break below 155 has activated the buying response BofA anticipated, placing the psychological 150 level between spot and the bank’s target.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
ING’s tactical range limits GBP/EUR near 1.166, but UBS expects Sterling to reach 1.19 by December before settling near 1.18 in 2027. The British Pound to Euro (GBP/EUR) exchange rate held near 1.1650 on Tuesday after Chancellor John Healey’s first major economic speech produced only a restrained Sterling response.
Foreign exchange analysts at ING expect GBP/EUR to stay close to current levels in the near term, while UBS forecasts a 2.1% rise to 1.19 by the end of 2026.
The two calls point to limited immediate momentum followed by a stronger Pound move before December.
ING expressed its forecast in EUR/GBP terms, expecting 0.8580-0.8610 to contain the pair for now.
Inverting that range gives an equivalent GBP/EUR band of approximately 1.1614-1.1655, placing the latest rate close to its upper boundary.
Ahead of Healey’s address, ING said:
“Expect him to emphasise fiscal sustainability today, but it will be hard for him to conjure up many meaningful pro-growth measures. 0.8580-0.8610 should contain EUR/GBP for the time being.”
Healey subsequently focused on growth, regional investment and reducing the cost of regulation, but left tax and spending details for the October 28 Budget.
“The Prime Minister and I are in lockstep in our commitment to meeting the fiscal rules at the upcoming Budget,” the Chancellor said in his economic speech.
Pound Sterling edged higher initially, but the lack of policy detail prevented the GBP/EUR exchange rate from making a decisive break above 1.1660.
Our latest Pound-to-Euro market report also found that the Chancellor’s growth message provided only modest support.
Image: GBP/EUR 1-month chart UBS Expects Most of the Sterling Rise This Year UBS takes a more constructive medium-term view, forecasting GBP/EUR at 1.19 in December 2026.
The bank then expects the pair to ease to 1.18 in March 2027 and remain at that level through June and September.
Expressed in the opposite direction, UBS forecasts EUR/GBP falling from around 0.86 to 0.84 by December before returning to 0.85 during 2027.
Most of the expected Sterling appreciation is therefore concentrated in the closing months of 2026 rather than spread across next year.
UBS’s outlook also contrasts with Rabobank’s forecast for EUR/GBP to rise towards 0.87, equivalent to GBP/EUR falling towards 1.1495.
The European Central Bank’s decision this week provides the next immediate test, while the October Budget will determine whether the British Pound can move from ING’s narrow tactical range towards UBS’s 1.19 forecast.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Gold (XAU/USD) struggles to hold early gains and reverses course on Tuesday as a modest rebound in the US Dollar (USD) and rising Oil prices weigh on the precious metal. At the time of writing, XAU/USD trades around $4,400 after reaching an intraday high near $4,443.
Tensions in the Middle East intensified after Iran-backed Houthis attacked energy facilities in four southern Saudi cities earlier on Tuesday. The escalation comes after the United States attacked Iranian vessels and Tehran targeted US warships and Oil tankers over the weekend.
Oil prices extend their advance, with West Texas Intermediate (WTI) trading around $91.80 per barrel after reaching $92.48, its highest level since June 8.
The latest hostilities also helped the US Dollar recover some ground after its recent weakness, which was largely driven by a sharp rally in the Japanese Yen (JPY). The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 98.97 after recovering from 98.72, its lowest level since August 21.
Gold’s near-term outlook remains challenging. The metal is widely viewed as a hedge against inflation and geopolitical tensions, but traders are paying greater attention to how higher Oil prices could affect inflation and interest rates. Gold offers no yield and usually performs better when borrowing costs are low.
The Federal Reserve (Fed) has not raised interest rates so far this year, but policymakers have repeatedly expressed concern about inflation staying above the central bank’s 2% target for too long. Friday’s stronger-than-expected US Nonfarm Payrolls (NFP) report eased worries about the labour market and gives the Fed more room to keep its focus on inflation.
Attention therefore turns to the Fed’s September 15-16 meeting, with the CME FedWatch Tool showing around a 60% probability of a 25-basis-point (bps) rate hike. The decision is likely to hinge on this week’s US inflation data.
The US Producer Price Index (PPI) is due on Thursday, followed by the Consumer Price Index (CPI) on Friday. Hotter readings could strengthen the case for a rate hike, while softer figures could ease expectations for higher borrowing costs and offer some relief to Gold. The US economic calendar is relatively light on Tuesday, with only the ADP Employment Change 4-week average scheduled for release.
Technical analysis: Bears eye $4,350 as right shoulder of H&S pattern forms
On the daily chart, XAU/USD holds above the 50-day and 100-day simple moving averages (SMAs) at around $4,255 and $4,346, respectively, keeping the broader near-term structure supported.
However, a potential Head-and-Shoulders pattern is taking shape, with the right shoulder currently forming. The neckline is located near $4,350 and is reinforced by the 100-day SMA, making this area an important support zone. Momentum is neutral, with the Relative Strength Index (RSI) near 50, while the Average Directional Index (ADX) has eased toward 23, suggesting that directional momentum is losing strength.
A decisive break below the $4,350 neckline would confirm the bearish pattern and expose the 50-day SMA near $4,255, followed by horizontal support around $4,150 and the psychological $4,000 mark.
On the topside, immediate resistance comes from the 200-day SMA near $4,537, with a more significant barrier further up at the horizontal level around $4,700. A sustained move above these layers would be needed to re-open a stronger bullish extension in Gold.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Geopolitics have boosted demand for physical and futures markets for gold. The US dollar is under pressure from diverging monetary policies. The US dollar has been falling for four of the last five consecutive days. Investors expect the ECB to tighten monetary policy at its next meeting, with signals from Christine Lagarde that the cycle will continue. Rumours are circulating in the forex market that the Bank of Japan is choosing between a 50bp hike later this month and 3 consecutive 25-point increases at each of its next three meetings. This divergence in monetary policy is creating headwinds for the US dollar index.
Adding fuel to the EURUSD rally is the faster rise in European bond yields relative to US Treasuries. This increases their relative attractiveness and raises the prospect of capital flows from the US to Europe. In reality, however, the rise in yields is being driven partly by sell-offs in French and Italian debt amid budgetary concerns, and in German debt following the CDU’s defeat in the regional elections. Elevated political risks are therefore weighing on the euro.
Meanwhile, Brent crude’s rally towards $100 per barrel, against the backdrop of escalating conflict in the Middle East, risks fuelling inflation and prompting the Fed to tighten monetary policy. This would create an unfavourable environment for gold. However, gold’s supporters are not giving up. In August, the People’s Bank of China increased its gold reserves by 650,000 ounces, marking the 22nd consecutive month of growth.
Goldman Sachs believes that gold is a hedge over the period of threats to the Fed’s independence, unorthodox government intervention in currency and debt markets, a ‘debasement trade’ and escalating fiscal problems. Amundi is increasing the proportion of gold in its portfolios, citing its affordability, liquidity and use as a risk-hedging instrument.
Société Générale believes that the conflict in the Middle East is not a negative factor for Gold over the long term. What began as a geopolitical shock has turned into a broad-based build-up of physical and futures positions, involving retail investors, professional asset managers and derivatives traders. The firm describes the precious metals market as bullish across the board.
The FxPro Analyst Team
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The Euro (EUR) is down 0.1% at around 1.1610 against the US Dollar (USD) during the European trading session on Tuesday. The major currency pair trades lower as the US Dollar turns positive after a weak start.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% higher at around 99.00.
Financial markets expect the US Dollar to remain rangebound as a slight improvement in Federal Reserve’s (Fed) interest rate hike expectations, following strong United States (US) Nonfarm Payrolls (NFP) data for August, has limited its downside, while positive commentary from Fed members on inflation has restricted the upside.
Going forward, the release of the US Consumer Price Index (CPI) data for August on Friday is expected to bring a decisive move in the US Dollar.
Meanwhile, the Euro is also expected to remain in a limited range as investors await the European Central Bank’s (ECB) interest rate decision on Thursday.
According to ABN Amro, “the path for the ECB is clear, and a rate hike at Thursday’s Governing Council meeting is fully priced by financial markets”.
EUR/USD Technical Analysis
In the daily chart, EUR/USD trades at 1.1612, holding a neutral near-term bias as it remains close to the 20-period exponential moving average (EMA) at 1.1601. This close alignment between price and the short-term EMA suggests the pair is consolidating its recent gains rather than reversing, while the Relative Strength Index (RSI) at 54 keeps momentum in neutral-to-positive territory, hinting that buyers still retain a slight edge.
On the downside, initial support is seen at the 20-period EMA near 1.1600, where dip-buying interest could emerge if the pair pulls back. The major currency pair could slide to the psychological level of 1.1500 if it fails to hold the 20-day EMA. Looking up, the August high at 1.1710 is the key hurdle for the pair.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator ECB Main Refinancing Operations Rate One of the three key interest rates set by the European Central Bank (ECB), the main refinancing operations rate is the interest rate the ECB charges to banks for one-week long loans. It is announced by the European Central Bank at its eight scheduled annual meetings. If the ECB expects inflation to rise, it will increase its interest rates to bring it back down to its 2% target. This tends to be bullish for the Euro (EUR), since it attracts more foreign capital inflows. Likewise, if the ECB sees inflation falling it may cut the main refinancing operations rate to encourage banks to borrow and lend more, in the hope of driving economic growth. This tends to weaken the Euro as it reduces its attractiveness as a place for investors to park capital.
Gold (XAU/USD) posts marginal gains for the third straight day on Tuesday amid risk-off sentiment as tensions in the Middle East escalate and Oil prices rally, strengthening the case for higher interest rates in the world's major economies. Against this background, the XAU/USD pair explores prices below $4,400 during the European trading hours, extending its decline from last week’s highs in the $4,500 area.
Risk appetite faded on Tuesday as Tehran escalated its threats, warning that it might attack energy infrastructure in Gulf countries, including US Oil and Gas sites, in case of new attacks on its assets.
With hopes of a negotiated end to the war vanishing, Oil prices continue rising. Brent Crude stretched to levels above $97.00 per barrel, nearing the feared $100 psychological level, boosting inflationary pressures and prompting central banks to adopt more restrictive policies.
Technical Analysis: Key support is at $4,300.
XAU/USD trades at $4,394 after being capped ahead of the key 200-day simple moving average (SMA) last week, with momentum indicators in the daily chart highlighting incipient bearish traction. The Relative Strength Index (14) is hovering around the 50 level, and the Moving Average Convergence Divergence (MACD) treads within negative territory.
On the downside, Friday's low at the $4,370 area is likely to test bears, but the key support remains between $4,300 and $4,285, the August 14 and September 2 lows respectively, and the neckline of a bearish Head & Shoulders (H&S) pattern.
On the topside, bulls face an important cluster of resistances between last week's highs at $4,510 and the mentioned 200-day SMA just above at $4,536, while a break higher would expose the August 25 high, just below $4,700.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
The Japanese yen is dominating the start of the week, with USD/JPY extending its decline below 155 and trading towards 153. Thin liquidity around the US holiday likely exaggerated the initial move, but the follow-through suggests this is more than just a liquidity event.
The move still looks primarily like a yen story rather than a broad rejection of the US dollar. Markets are increasingly focused on the prospect of a more hawkish Bank of Japan, alongside expectations that Japan’s GPIF could increase its allocation towards domestic assets. That combination is encouraging investors to unwind yen-funded carry trades and rebuild exposure to Japanese assets.
From a technical perspective, USD/JPY remains firmly inside its descending channel. The break below 155.00 has weakened the structure further, with 152.00 now the next meaningful support area. That level marked an important floor earlier in the year. A decisive break below it would bring 150.00 into view.
For now, trying to fade the yen rally looks risky. Even if the short-term fundamental move appears stretched, carry-trade unwinding can become self-reinforcing: a stronger yen forces leveraged positions to reduce exposure, which creates further yen buying and adds momentum to the move.
The bigger question is whether this yen strength can continue if the Federal Reserve tightens policy next week.
The broader dollar backdrop remains more constructive than USD/JPY currently suggests. Strong US payrolls and Brent crude trading close to $100 per barrel both argue against an aggressively dovish Fed, yet markets are still pricing only around 15 basis points of tightening for September. That leaves scope for US yields and the dollar to reprice higher if incoming inflation data remain firm.
US equity futures are pointing towards a softer reopening today. In an otherwise light calendar, weaker risk sentiment could provide some support to the dollar, although probably not enough on its own to reverse the current yen momentum.
The main event for the week is therefore Friday’s US CPI report. A hotter inflation print would strengthen the case for Fed tightening and could challenge the current USD/JPY sell-off. A softer number, however, would remove one of the dollar’s remaining supports and potentially allow the move towards 152 and 150 to continue.
Standard Chartered has restored gold to "Overweight" and raised its three-month target to $4,750, followed by $5,000 over 12 months. The Gold price slipped back towards $4,404 on Tuesday as markets continued to digest stronger US employment data and the prospect of another Federal Reserve rate increase.
Standard Chartered sees the pullback giving way to renewed gains.
The bank has raised its three-month gold forecast to $4,750 an ounce and its 12-month target to $5,000.
It has also restored gold to an Overweight position.
“We have raised our three- and 12-month gold price targets to USD 4,750/oz and USD 5,000/oz, respectively,” said Standard Chartered Senior Investment Strategist Cindy Lam.
From the current XAU/USD price, the shorter target implies an advance of about 7.9%.
A move to $5,000 would require a gain of approximately 13.5%.
The three-month forecast is less demanding than that percentage suggests.
Gold traded as high as $4,696 during August, leaving Standard Chartered’s $4,750 target only 1.1% above the recent peak.
Reaching $5,000 would require a more decisive breakout.
US Dollar pullback revives the gold case Standard Chartered said gold’s “price outlook has notably improved alongside a sharp pullback in the USD”.
That makes the US Dollar central to the forecast.
A renewed decline in the US currency would reduce the cost of gold for overseas buyers and support another challenge of the August high.
The immediate backdrop has become less comfortable.
The official US employment report showed that payrolls increased by 162,000 in August, while unemployment held at 4.1%.
The stronger labour-market reading lifted US yields and reinforced the risk that interest rates stay higher for longer.
Gold has already shown its sensitivity to that shift.
Our earlier coverage examined how renewed Federal Reserve tightening expectations hit gold, silver and Bitcoin after Chair Kevin Warsh’s Jackson Hole speech.
Standard Chartered’s revised forecast nevertheless adds another major-bank call for substantially higher bullion prices.
It follows UniCredit’s $4,400-$5,200 year-end forecast range, although the two forecasts cover different periods.
Image: Gold price in USD one-month chart The one-month chart captures a sharp rise towards $4,696, followed by a reversal to $4,284 and a recovery above $4,400.
That leaves the August peak as the first test of Standard Chartered’s forecast, with $4,750 sitting just beyond it.
The next major policy decision is scheduled for September 16, following the Federal Reserve’s two-day meeting.
A softer Dollar would support Standard Chartered’s call, while another rise in US yields would make the route back to $4,750 more difficult.
UBS expects silver to reach $70 by December before advancing to $75 in early 2027 and $80 next September. The Silver price slipped 1.0% towards $65.90 on Tuesday, extending its retreat from August’s 15.5% surge as stronger US employment data revived expectations of a September Federal Reserve rate rise.
Against that backdrop, UBS expects XAG/USD to recover to $70 by December 2026 before advancing to $75 in March 2027.
The bank holds its forecast at $75 for June, followed by a further rise to $80 by September 2027.
That final target stands around 21% above current levels.
UBS recorded spot silver at $65.30 when compiling the forecasts.
Image: Silver price in USD chart for 2026 UBS Expects a Gradual Recovery UBS remains constructive on silver over the forecast period, although its earlier commentary acknowledged that the metal’s extreme volatility required some caution.
“For silver, given the recent extreme volatility (60-120%), we remain cautious and believe it is too early to build long-term exposure,” the bank said.
UBS has since identified support from gold and a tighter near-term physical market.
“Silver, meanwhile, should benefit from higher gold prices and tighter near-term fundamentals.”
The December forecast of $70 would return silver to levels reached during August, rather than require an immediate break into fresh territory.
The more significant part of the call comes in 2027, when UBS expects the metal to establish itself at $75 before making another move higher.
Earlier UBS analysis warned that elevated prices were reducing photovoltaic, jewellery and silverware consumption, cutting expected demand by around 50 million ounces.
“Consistent with the smaller deficit, we have trimmed our price outlook across all forecast horizons,” UBS strategists said in the analysis covered by our previous report on the bank’s silver forecasts.
The three-month pause at $75 reflects that restraint.
UBS is forecasting an advance, but it does not expect silver to move directly from current levels to $80.
US Inflation Is the Next Test Silver’s immediate direction will depend heavily on US inflation and interest-rate expectations.
The US economy added 162,000 jobs in August, while unemployment held at 4.1%, strengthening the argument for tighter Federal Reserve policy.
The payroll release followed the sharp correction examined in our recent silver price report, when XAG/USD fell almost 5% in 48 hours.
Attention now turns to US inflation before the September 15-16 Federal Reserve meeting.
Softer inflation would help silver challenge UBS’s first $70 forecast, while a stronger reading could keep XAG/USD under pressure and delay the recovery towards $75 and $80.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Currency experts at MUFG project USD/INR to rise from around 94.7-94.8 to 95.50 this year and 96.50 by Q2 2027, despite stronger RBI support. The Indian Rupee weakened to around 94.7-94.8 per Dollar on Tuesday, surrendering part of last week’s gains as Brent crude approached $98 and foreign investors resumed selling Indian assets.
Foreign exchange analysts at MUFG project USD/INR to reach 95.50 in Q4 2026, followed by 96.00 in Q1 2027 and 96.50 in Q2.
That final forecast implies approximately 1.9% upside from the current price of 94.69 and suggests RBI intervention will slow, rather than eliminate, the underlying depreciation pressure.
State-run banks were again seen selling Dollars around 94.70 on Tuesday, extending a sustained period of intervention by the Reserve Bank of India.
The intervention has been backed by unexpectedly large foreign-currency inflows generated through the RBI’s FCNR(B) measures.
MUFG said the programme had attracted more than $130bn by the end of August, giving the authorities “meaningful firepower and ammunition”.
Official RBI data show that India’s foreign-exchange reserves reached a record $740.8bn on August 28, including $600.7bn of foreign-currency assets.
The larger buffer reduces the danger of a disorderly Rupee decline, but it does not necessarily change the direction of travel.
“Existing foreign-currency inflows have enlarged India’s external buffer and curtailed the risk of sharp INR depreciation, but the removal of incremental liquidity support, accelerating credit growth and the lagged inflationary effects of earlier oil-price increases point towards higher INR rates.”
Image: USD to INR rate 3-month chart Oil Brings 95.50 Back Into View The renewed rise in crude prices has made MUFG’s higher USD/INR path more relevant.
Brent near $98 increases India’s import bill and the associated demand for Dollars, while overseas investors have sold a net $1.2bn of Indian equities and bonds during September.
When we last examined MUFG’s Rupee forecast, USD/INR was approaching the bank’s former 94.00 target despite oil trading near $96.
The Rupee subsequently strengthened further as the RBI absorbed Dollar inflows, but the latest oil shock has interrupted that move.
MUFG had described 94 as a temporary destination rather than the beginning of a sustained Rupee appreciation cycle.
“We are currently forecasting USD/INR to move towards 94.00 over the next three to six months, before rebounding towards 96.00 next year as structural portfolio outflows, corporate repatriation and import demand reassert themselves.”
The rebound is now expected to begin from a slightly higher level, with 95.50 forecast before the end of 2026 and 96.50 by the second quarter of next year.
Currency analysts at MUFG also expect 50 basis points of RBI tightening from December.
“We continue to expect 50bp of RBI tightening beginning in December, with the central bank focused on limiting excessive FX volatility rather than engineering sustained rupee appreciation.”
Oil prices, RBI Dollar sales and the September 11 US inflation report will determine whether the USD to INR exchange rate remains contained below 95 or begins moving towards MUFG’s 95.50 forecast.
Silver prices (XAG/USD) fell on Tuesday, according to FXStreet data. Silver trades at $65.88 per troy ounce, down 0.55% from the $66.24 it cost on Monday.
Silver prices have decreased by 7.33% since the beginning of the year.
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 66.72 on Tuesday, up from 66.61 on Monday.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
The AUD/JPY currency pair dipped to a four-week low, even as iron ore prices climbed. This drop largely came from a stronger Japanese yen and a pullback in global carry trades Signals from the BoJ hint at a possible interest rate hike in September, boosting the yen and making currency intervention less likely. Meanwhile, the RBA holds at 4.35%, pointing at stubborn inflation The AUD/JPY's downward slide could extend into September. This depends on the BoJ confirming monetary tightening and China's economic data staying weak The Australian dollar dropped against the Japanese yen this week, which might seem a bit odd. After all, Australia’s main export, iron ore, recently topped US$100 per tonne, reaching its highest intraday price since early July.
Normally, strong commodity prices like that would boost the Aussie dollar. Yet, the AUD/JPY exchange rate has instead fallen to four-week lows, slipping below 111.00. So, what’s going on?
Why Has AUD/JPY Turned Bearish? The AUD/JPY isn’t weakening because Australia’s economy is struggling. Instead, it’s the Japanese yen that’s gaining significant strength. Talk of the Bank of Japan (BoJ) raising interest rates has surged after central bank officials made clear statements, even hinting at possible consecutive rate hikes.
With Japan’s GDP and wage growth picking up, market watchers now expect a 25-basis-point rate increase to 1.25% at the next BoJ policy meeting. Plus, the Ministry of Finance’s interventions in July and August, which caused a record drop in foreign reserves, also helped the yen rebound from multi-year lows.
As the interest rate gap narrows and Japanese yields climb, carry trades, which once favored the higher-yielding Australian dollar, are unwinding much faster.
What this Means For BoJ and RBA Decisions For the BoJ, a consistently strong yen means less immediate pressure to intervene further in the currency market. This also aligns with their plan for a gradual return to normal policy.
A stronger yen helps manage import costs, letting the central bank focus on domestic inflation trends. Markets have already priced in a September rate hike. Any further increases later this year will probably hinge on new data regarding wages, services inflation, and economic growth.
The Reserve Bank of Australia (RBA) faces a different set of considerations. Strong commodity prices certainly help the nation’s terms of trade, but a weaker currency against key Asian trading partners could push up imported inflation.
Still, with domestic economic indicators looking stable, the RBA isn’t expected to change its policy cash rate. Their focus remains on controlling inflation, rather than directly managing the currency.
All eyes will be on the RBA’s policy meeting in late September, awaiting any shifts in its economic outlook. Another rate hike remains possible if domestic data stays strong, though markets currently see only a moderate chance of this happening.
Will the Downturn Extend? The AUD/JPY pair will likely continue facing downward pressure in the short term. Should the BoJ confirm an interest rate hike, combined with any signs of weaker activity in China or less demand for iron ore, the pair could drop towards lower support levels around 110.
A stronger yen would also make carry trades less appealing. Conversely, stronger-than-expected Australian economic data or new stimulus from China might help stabilize the Australian dollar.
This downward trend for AUD/JPY appears set to continue through September, primarily driven by central bank policy decisions.
The long-term trajectory will depend on improvements in iron ore markets and the pace at which the BoJ normalizes policy relative to the RBA. Both central banks’ September meetings should offer significant insight into these future directions.
Why is AUD/JPY falling even though iron ore prices are rising?
The yen’s strength is pulling the pair lower. This isn’t about Australian fundamentals. Instead, it’s driven by hawkish Bank of Japan signals, including expectations for a rate hike and the impact of past interventions.
Why has AUD/JPY fallen despite higher iron ore prices?
The Australian dollar saw some temporary support from higher iron ore prices. But market expectations for a Bank of Japan rate hike, coupled with a stronger yen had more sway.
How might this affect Bank of Japan decisions?
A stronger yen reduces the need for direct currency intervention. It also helps the BoJ pursue steady rate increases, focusing on domestic inflation rather than just defending the currency.
The euro enters this week’s ECB meeting (September 9–10) with genuine hawkish backing, having already been told by insiders that policymakers are prepared to raise rates again to counter the inflationary side-effects of the Middle East conflict, even as they signal little appetite for tightening beyond that. July’s hold at 2.25% came with Lagarde explicitly warning that renewed hostilities and the resulting oil price rebound pose upside risks to the inflation outlook, keeping the door firmly open to a move back to 2.50% this week.
The Aussie, meanwhile, is riding one of its strongest stretches in months, hitting a fresh three-month high after Q2 GDP beat expectations at 0.4% quarter-on-quarter, reinforcing bets that the RBA could resume tightening this month. Markets now price a 50–58% chance of a September hike, with a November move seen as effectively locked in, while commodity strength and Australia’s growing role in the AI infrastructure boom add further structural support to the currency.
The result: two hawkish central banks converging on rate decisions within days of each other, leaving EUR/AUD’s next move to hinge on whether Frankfurt or Canberra delivers the more convincing signal.
Technical Analysis of EUR/AUD
As the EUR/AUD chart shows, the pair has been trading within a steep descending trendline since mid-August’s highs near 1.6441, with price now testing the confluence of this trendline and the 0 Fibonacci level near 1.6086. Adding intrigue to the setup, the RSI is forming a bullish divergence, printing higher lows even as price carved a fresh low this week.
Bullish Scenario
Should buyers break above the descending trendline, the divergence would gain real technical credibility, opening the path towards the 0.382 retracement near 1.6222, with a stronger move potentially targeting the 0.5 level around 1.6264.
Bearish Scenario
Conversely, a continued rejection at the trendline would keep sellers in control, invalidating the divergence and exposing fresh lows below the 1.6086 level, with the broader downtrend from August’s highs remaining firmly intact.
With price testing a fresh low right at the trendline while the RSI quietly hints at fading downside momentum, EUR/AUD looks poised for a decisive reaction. Will the ECB’s hawkish stance finally show up on the chart, or will the RBA’s own tightening momentum keep this downtrend alive?
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The New Zealand Dollar extends losses against the US Dollar (USD) on Tuesday, weighed by the risk-off mood amid escalating tensions in the Middle East and rising Oil prices. The NZD/USD extends its reversal from the 0.5900 area on Friday, reaching session lows at 0.5836, below the key 200-day Simple Moving Average (SMA) which lies at the 0.5850 area.
Market sentiment remains subdued as tensions between the US and Iran escalate further, pushing back hopes of a negotiated end to the conflict. Tehran threatened to strike US Gas and Oil interests in Gulf countries if Iran is attacked again, following another round of hostilities over the weekend.
Meanwhile, traffic through the Strait of Hormuz, which carried about 20% of global Oil supply before the war, remains limited to a trickle, which is pushing prices higher. Brent Oil is trading above $97.00 per barrel on Tuesday's European session, accumulating a nearly 9% appreciation so far in September, and 38% above July lows. These prices increase the exposure of New Zealand’s economy to another Energy shock.
Earlier on the day, data from China revealed that the trade surplus increased in August, although imports missed expectations, which suggests that the country's domestic demand remains weak. The data failed to provide any noticeable support to the China-proxy NZD.
Technical Analysis: Approaching the trendline of a bearish H&S
NZD/USD trades at 0.5843, holding a bearish near-term tone as it slips just below the 200-day simple moving average (SMA) at 0.5854 and draws closer to the neckline of a bearish Head & Shoulders (H&S) pattern, between 0.5800 and 0.5820. Momentum indicators show a growing bearish trend, as the Relative Strength Index (RSI) eases toward the low-40s and the Moving Average Convergence Divergence (MACD) line sits below zero with a negative histogram.
A break of the 0.5800 level would confirm an H&S pattern, adding pressure towards the late July lows, near 0.5765 and the July 13 low, at 0.5745. The H&S's measured target is below the June 26 low at 0.5626.
On the topside, Bulls should break Friday's high at the 0.5900 area to ease bearish pressure and shift the focus toward the late August highs at the 0.5990 area.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
New Zealand Dollar Price Today The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.09%0.11%-0.14%-0.09%0.13%0.63%0.25%EUR-0.09%0.01%-0.23%-0.17%0.02%0.55%0.16%GBP-0.11%-0.01%-0.25%-0.19%0.00%0.54%0.15%JPY0.14%0.23%0.25%0.07%0.28%0.80%0.42%CAD0.09%0.17%0.19%-0.07%0.21%0.73%0.35%AUD-0.13%-0.02%-0.01%-0.28%-0.21%0.53%0.14%NZD-0.63%-0.55%-0.54%-0.80%-0.73%-0.53%-0.38%CHF-0.25%-0.16%-0.15%-0.42%-0.35%-0.14%0.38% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
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Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
USDJPY managed to resume the drop as traders anticipate a rate hike from the Bank of Japan next week. The market faces support around the 152.00-15 zone while resistance at 155.00-20 could lead to a trading zone here.
Silver (XAG/USD) is trading flat at the $66.00 area on Tuesday, holding minor gains on the weekly chart after bouncing from the mid-range of the $64.00s last week. The precious metal is drawing some support from a soft US Dollar, as US markets return from a long weekend, with traders awaiting Friday’s US Consumer Price Index (CPI) release to assess the outcome of next week’s Federal Reserve (Fed) meeting.
Analysts at HSBC observe that a combination of “weaker US data, persistent inflation concerns, policy credibility questions, and political risks all weigh on the Dollar, fueling the debasement conversation.” However, they note that Fed Chairman Warsh’s Jackson Hole remarks marked an important turning point, as his speech “helped ease one key part of that story by restoring confidence in the Fed’s commitment to fight inflation.”
This has “helped reduce the risk that weak policy credibility would become a lasting drag on the Dollar and denting the debasement narrative, at least for now,” say the HSBC experts. Even so, the bank cautions about "broader structural concerns, especially around US fiscal sustainability, which could still return and weigh on the Dollar yet again.”
Technical Analysis: Looking for direction halfway through the mintly range
XAG/USD trades at $66.02 halfway through the monthly range, roughly between $63.00 and $71.00, just below the key 200-day Simple Moving Average, at the $73.00 area. Momentum indicators in the daily chart are neutral, with the Relative Strength Index (14) around 52 and the Moving Average Convergence Divergence (MACD) slipping modestly below zero, all in all reflecting a lack of clear bias.
Initial resistance is seen at the August 25 and 27 lows around $67.40, ahead of the June 12 and August 28 highs, between $71.12 and $71.56, and the mentioned 200-day SMA at $72.95.
On the downside, Friday's low, near $64.75, might hold bears ahead of a key support level in the $63.00 area. A break of that level would confirm a bearish Head & Shoulders (H&S) pattern, increasing pressure towards the August 6 low at $60.87.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Inflation concerns dominate the euro this week with the European Central Bank’s (ECB) meeting. All 65 economists in the Reuters poll expect the ECB to increase their deposit rate by 25 basis points to 2.50 percent. Inflation for the Eurozone jumped to 3.3 percent. High energy prices from the Iran conflict drive the inflation.
The discussion is turning to the possibility that September will only be the first in multiple hiking cycles. Deutsche Bank has already adjusted their forecast to include anticipating another hike in December.
Like many central banks, the Bank of England faces challenges with the energy crisis. Inflation risks returning mixed with weaker economies and already tighter financial conditions. Therefore, the Bank of England is likely to look at the energy crisis and global bonds and their corresponding yields to hopefully gain some insights into what their next moves should be. This means that sterling is going to be very volatile to the next set of Bank of England policy updates and how global markets react to those policies. Meanwhile, the greenback side of the GBP/USD will be under the control of the updates to U.S. inflation which will be available this week.
Fundamental bias: DXY neutral-to-bullish, EUR moderately bullish, GBP neutral-to-bullish.
U.S. Dollar Index Technical Analysis: DXY Remains Bearish Below 99.20 as 98.71 Support Comes Into View
Gold, silver correlations with dollar near historical extremes
DXY sits just above an important support zone
US inflation next key risk event for markets
Disorderly yen carry trade unwind remains a left-tail risk
Gold and silver have essentially become a play on directional movements in the US dollar over the past month, and especially the past fortnight, with the strength of the inverse relationship pushing towards historical extremes.
Dollar relationship moves into rare territory
While the inverse relationship between gold, silver and other precious metals with the US dollar has been evident for decades, the strength of the relationship is unusually high right now.
Source: LSEG
Over the past 10 trading days, gold’s correlation with DXY has fallen to around -0.88, while silver’s stands at -0.83. Those readings sit around the 3rd percentile for gold and 4th percentile for silver relative to their respective histories, meaning the inverse relationship has only been stronger during a very small proportion of comparable windows.
The 20-day relationship is also tight, with gold at around -0.76 and silver at -0.73, ranking near the 6th and 5th percentiles respectively.
With the DXY just above an important support level, should that extreme relationship be maintained, a downside break in the DXY points to the increased risk of renewed upside across the precious metals complex.
Yen strength adds pressure to the dollar
Source: Tradingview
DXY finds itself struggling beneath the 200-day moving average, having slid back beneath it late last week, and is now perched above a support zone comprising the May 29 low of 98.75, along with the 50% retracement of the 2026 low-high at 98.68.
There were two unsuccessful probes beneath the zone back in August, but with the oscillators rolling over, indicating downside momentum is building again, the risk of a downside break appears to be growing, especially with the Japanese yen continuing to strengthen on Tuesday, seeing USD/JPY hit levels not seen since February.
Should the unwind be sustained, it would only add to downside risk for the broader DXY index, especially should the euro join the move.
Gold wedged between key levels
Source: Tradingview
Early gains in Asia have reversed in the latter parts of the session, with the push higher stalling just beneath the confluence of the August downtrend and horizontal resistance at $4,450 an ounce. Those levels are the immediate focal point overhead.
Underneath where the price now trades, $4,367 is the first level on the radar given it acted as support and resistance on multiple occasions going back to the early parts of this year. Further below, the 23.6% Fib retracement of the January to June low-high is located at $4,333 an ounce. Dips beneath that level, down to the early September low of $4,283, have made for good buying over recent months.
The message from the oscillators is one of neutrality. RSI (14) sits just beneath the 50 while MACD is running parallel to the signal line, sitting just in negative territory.
With the technical picture for gold offering little from a directional breakout perspective, dollar performance around the US inflation data on Thursday and Friday may be influential in determining which direction the price shifts next.
Silver triangle points to breakout risk
Source: Tradingview
Like gold, silver has staged a sizable reversal late in the Asian session, mirroring similar price action in Asian tech stocks that opened strongly before gains were slowly whittled away.
From a technical perspective, the price on the four-hourly continues to coil in an ascending triangle, with moves above $67 towards $67.50 resistance capping gains for the moment, while dips towards the uptrend established in early September continue to attract buying.
While ascending triangles are often associated with bullish breakouts, I would not be rushing to establish longs without a clear and sustained push above $67.50, given the iffy price beneath it recently.
The cautious view is only strengthened by the risk of forced yen carry trade unwinds, some of which have likely found their way into the precious metals space, creating the risk of disorderly downside moves across the precious metals complex. Whichever direction the price breaks from the structure may be informative as to where directional risks lie over the medium term.
Overhead, silver struggled underneath $70 in late August, and while there was one bullish breakout that eventually occurred, it stalled at $70.90, a level that acted as support and resistance on multiple occasions going back to late April.
On the downside, $65.50, the September 4 low of $64.75, and $63.30 are the focal points before $62.90 comes into view, another support and resistance level going back to earlier this year.
The message from the oscillators is neutral with RSI (14) sitting at 48 while MACD is flatlining above the signal line, holding just in positive territory. Focus should therefore be on price rather than adoption of a specific directional bias, with DXY gyrations another useful input when assessing potential setups.
Pound-Dollar could stay supported if market sentiment remains stable, although renewed geopolitical tensions may revive safe-haven Dollar demand. The Pound US Dollar (GBP/USD) exchange rate ticked higher on Monday as markets digested UK Chancellor John Healey’s speech on the economy.
At the time of writing, GBP/USD was trading at $1.3536, up around 0.15% on the day.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.354424 (+0.20%)
Euro to Dollar (EUR/USD): 1.162816 (+0.13%)
Dollar to Yen (USD/JPY): 154.32885 (-1.23%)
DAILY RECAP:
The Pound (GBP) made modest gains on Monday as markets responded to comments from UK Chancellor John Healey.
Healey reaffirmed his focus on maintaining fiscal discipline, seeking to ease concerns that had emerged around recent bond market turbulence. Much of his speech centred on boosting UK economic growth, with government investment, innovation, devolution and cutting red tape highlighted as ways to stimulate activity.
The Chancellor’s remarks appeared to receive a mildly positive response, although the reaction was relatively restrained. Sterling moved higher against a number of its peers, but the gains remained limited.
Meanwhile, the US Dollar (USD) was subdued on Monday as American markets were closed for the Labor Day federal holiday. This seemed to limit the currency’s appeal.
In addition, a mixed market mood stifled movement in the safe-haven ‘Greenback’. Asian markets were upbeat on Monday following reports that Beijing will inject $54bn into state-owned banks and insurers.
Risk sentiment moderated during the European session, but the uncertain tone kept USD muted.
Near-Term GBP/USD Forecast: Risk-Off Mood to Lift the Dollar? Looking forward, market-moving economic data is thin on the ground for both GBP and USD on Tuesday, potentially leaving the Pound to US Dollar exchange rate to be driven by wider market trends.
Risk appetite could be the defining factor for the pairing. Escalating tensions in the Middle East could dampen the market mood and thereby support the safe-haven ‘Greenback’.
Likewise, geopolitical concerns in Europe and a deepening US-Canada trade war could also contribute to risk aversion, which in turn may boost the US Dollar’s appeal.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Pound-Canadian Dollar could stay supported if trade tensions weigh on CAD, while firmer oil prices may help the Loonie recover. The Pound Canadian Dollar (GBP/CAD) exchange rate rose slightly on Monday amid a muted but positive response to a speech from the UK Chancellor.
At the time of writing, GBP/CAD was trading at CA$1.8718, up marginally on the day.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.870449 (+0.01%)
Euro to Canadian Dollar (EUR/CAD): 1.606041 (-0.06%)
Dollar to Canadian Dollar (USD/CAD): 1.38136 (-0.17%)
DAILY RECAP:
The Pound (GBP) traded with modest gains on Monday as markets reacted to a speech from UK Chancellor John Healey.
Healey reiterated his commitment to fiscal discipline, attempting to soothe recent concerns about bond market turmoil. He also focused heavily on driving growth in the UK, pointing to government investment, innovation, devolution and reduced red tape as ways to get the country’s economic cogs whirring.
The reaction to the Chancellor’s speech seemed somewhat positive, although the impact was muted. Sterling edged up against many of its peers but the gains were limited in scope.
Meanwhile, the crude-linked Canadian Dollar (CAD) was mixed on Monday as oil prices wavered.
Crude initially ticked higher amid ongoing tensions in the Middle East, before easing back during European trade.
CAD investors also seemed cautious ahead of Canadian counter-tariffs on US goods, due to take effect on Tuesday.
Near-Term GBP/CAD Forecast: Oil Price Movements to Drive the Pairing? Looking forward, a lack of UK and Canadian data on Tuesday could leave the GBP/CAD exchange rate to trade primarily on external factors.
Global crude prices could be key, with investors keeping an eye on events in the Middle East. Escalating tensions could see oil prices climb, particularly with the US and Iran recently threatening to target oil tankers and energy companies – which in turn could boost the crude-linked Canadian Dollar.
Conversely, if shipping picks up through a new route in the Strait of Hormuz agreed by Iran and Oman, easing oil prices could dent CAD.
Furthermore, the Canadian Dollar could face headwinds amid US-Canada trade tensions. If Washington announces further retaliatory measures as Canada’s tariffs come into effect, CAD could slide.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Canadian Dollar (CAD) trades higher against the US Dollar (USD) on Tuesday. The USD/CAD pair is down 0.25% to near 1.3780 at the time of writing as the Loonie outperforms due to surging oil prices.
Canadian Dollar Price Today The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.03%0.02%-0.40%-0.21%0.08%0.29%-0.09%EUR0.03%0.04%-0.36%-0.14%0.09%0.32%-0.07%GBP-0.02%-0.04%-0.42%-0.22%0.05%0.28%-0.10%JPY0.40%0.36%0.42%0.20%0.49%0.71%0.33%CAD0.21%0.14%0.22%-0.20%0.28%0.51%0.13%AUD-0.08%-0.09%-0.05%-0.49%-0.28%0.24%-0.16%NZD-0.29%-0.32%-0.28%-0.71%-0.51%-0.24%-0.39%CHF0.09%0.07%0.10%-0.33%-0.13%0.16%0.39% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Also as of writing, the WTI Oil price is up around 0.8% to near $91.50. The oil price is close to its over a month high of $92.25, a level that was previously touched also in June 8.
Oil prices have rallied further amid fears of a prolonged energy supply disruption in the wake of the Strait of Hormuz closure.
Higher energy prices bode well for currencies from economies such as Canada, which are net energy exporters.
Meanwhile, the US Dollar is under pressure as investors turn cautious ahead of the United States (US) Producer Price Index (PPI) and the Consumer Price Index (CPI) data for August, which are scheduled for release on Thursday and Friday, respectively.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.11% lower to near 98.80.
USD/CAD Technical Analysis
On the daily chart, USD/CAD trades at 1.3783, keeping a bearish near-term tone as it holds beneath the 20-day Exponential Moving Average (EMA) at 1.3865 and the 61.8% Fibonacci retracement at 1.3817, which is plotted from the May low of 1.3550 to the June high at 1.4248.
The Relative Strength Index (RSI) at about 39 remains below the midline, hinting at persistent downside pressure rather than an oversold extreme, which suggests rallies may continue to be sold while price stays capped under the nearby EMA and retracement barriers.
On the topside, immediate resistance is seen at the 20-day EMA around 1.3865, followed by the 50.0% Fibonacci retracement at 1.3901 and then the 38.2% retracement near 1.3983, with the 23.6% level at 1.4085 acting as a more distant cap if a stronger rebound unfolds. On the downside, initial support emerges at the 78.6% Fibonacci retracement around 1.3701, with a deeper floor located at the 100.0% retracement near 1.3551, where bears would likely reassess the strength of the broader decline.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar FAQs The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
The EUR/USD enters a potentially decisive week with monetary policy on both sides of the Atlantic once again driving the currency pair. The European Central Bank is widely expected to raise interest rates on September 10, while the release of U.S. inflation data on September 11 could determine whether the Federal Reserve follows with a rate hike of its own next week.
The ECB decision is largely anticipated, meaning the market reaction could depend less on the 25-basis-point move itself and more on the central bank’s guidance about what comes next. In the United States, meanwhile, the August consumer-price index could change expectations for the September 15-16 Federal Reserve meeting. That creates scope for increased volatility in the EUR/USD pair, particularly because the FX pair seems to be consolidating after a rebound.
Daily EURUSD Chart - Source: ActivTraderECB and Fed policy divergence could drive EUR/USD volatilityEurozone inflation accelerated to 3.3% in August from 2.9% in July, according to Eurostat’s preliminary estimate, marking its highest level since September 2023. The increase was largely driven by energy prices, with energy inflation accelerating to 14.3% from 10.3%. Core inflation, however, eased slightly to 2.4% from 2.5%.
This release has strengthened expectations that the ECB will continue tightening monetary policy despite the risk that higher energy costs could weigh on economic activity. All 65 economists surveyed by Reuters expected the ECB to raise its deposit rate by 25 basis points to 2.50% on September 10.
The hike itself, therefore, should not come as a major surprise to markets. Instead, traders are likely to concentrate on ECB President Christine Lagarde’s communication and the updated economic projections. The key question is whether the ECB considers September’s increase the end of the tightening cycle or whether it leaves the door open to additional hikes. This distinction could prove important for the EUR/USD’s trajectory.
Reuters’ latest economist poll found that 91% of respondents expect the deposit rate to finish 2026 at 2.50%, while 78% expect it to remain there through the middle of 2027. Interest-rate markets, however, have been more hawkish and have been pricing the possibility of another increase.
The energy shock makes the ECB’s communication particularly important. Continued geopolitical tensions and elevated oil and gas prices could keep headline inflation above target for longer, potentially forcing policymakers to maintain a restrictive stance. Economists surveyed by Reuters now expect eurozone inflation to return to the ECB’s 2% target only toward the end of 2027.
For the euro, a clearly hawkish ECB could therefore provide support, particularly if policymakers signal that another rate increase remains possible.
The other side of the EUR/USD equation is the Federal Reserve.
The U.S. August employment report has already complicated the picture. Nonfarm payrolls increased by 162,000 in August, significantly exceeding expectations, while the unemployment rate remained at 4.1%. Additionally, the change for July was revised up, from -23,000 to +21,000. The stronger labour-market figures pushed market expectations for a September Fed hike higher. Reuters reported that fed funds futures were pricing a roughly 57% probability of an increase late on Friday.
That leaves the August CPI report as a potentially decisive catalyst. The U.S. Bureau of Labor Statistics is scheduled to publish the figures on Friday, September 11. July CPI showed annual inflation at 3.4%, while core inflation stood at 2.5%. Economists surveyed by Reuters expect August CPI to rise 0.4% month-on-month, with core CPI increasing 0.2%.
A hotter-than-expected inflation reading could reinforce expectations for a September Fed hike and potentially strengthen the dollar. Conversely, evidence that underlying inflation is continuing to moderate could reduce the probability of immediate tightening, weighing on the dollar and potentially supporting the EUR/USD.
The CPI report arrives only days before the Fed’s September 15-16 meeting, leaving little room for markets to ignore the data. Fed Governor Christopher Waller has already indicated that he would favour keeping rates unchanged if the upcoming inflation figures confirm that price pressures are cooling.
EUR/USD daily technical outlookThe pair has recovered significantly from its summer lows, rebounding by roughly 3.13% from around 1.1355. This recovery allowed the EUR/USD to break above the Ichimoku cloud on the daily chart. However, the rebound has lost momentum around the 1.1674 area. The EUR/USD is currently trading near 1.1611 and appears to have entered a consolidation phase, with the pair broadly confined between resistance around 1.1674 and support near 1.1559.
Daily EUR/USD Chart - Source: ActivTraderThis range could become particularly important as the ECB and U.S. CPI approach. A sustained break above 1.1674 would represent a significant technical development. It would indicate that buyers have regained control after the recent consolidation and could open the way toward higher levels.
A break below 1.1559, by contrast, would weaken the current bullish structure and suggest that the recent recovery is losing momentum. Such a move could expose the pair to further downside as traders reassess the sustainability of the summer rebound.
Momentum indicators provide a relatively neutral signal at present. The 14-period Relative Strength Index is around 53.94, keeping it slightly above the key 50 threshold but without real moment or heading towards overbought territory. The RSI has also struggled to extend higher after approaching an ascending support trendline that has developed from the oversold low reached at the end of June. This suggests that neither buyers nor sellers currently have a decisive advantage.
The Ichimoku configuration nevertheless remains worth monitoring. The earlier move above the daily cloud improved the medium-term technical picture, but the failure to establish a sustained move above 1.1674 means confirmation is still lacking. For traders, the coming economic events could therefore provide the catalyst needed to break the current range.
Source: MorningStarA hawkish ECB combined with softer-than-expected U.S. inflation would represent the clearest bullish combination for the EUR/USD. Such a scenario could increase expectations for further ECB tightening while simultaneously reducing the probability of a near-term Fed hike, narrowing the expected interest-rate differential between the euro and dollar.
The opposite combination would be potentially bearish for the pair. A hawkish ECB that is fully priced in, followed by stronger-than-expected U.S. inflation, could revive expectations for Fed tightening and strengthen the dollar. In that scenario, the 1.1559 support level could come under significant pressure.
There is also a third possibility: both central banks could deliver hawkish signals. If the ECB raises rates but signals that September could be its final move, while U.S. inflation remains elevated, the dollar could regain an advantage despite the ECB’s tightening.
The ECB decision may establish the initial direction, but U.S. inflation could ultimately determine whether the pair breaks out of its current range. With EUR/USD trading close to the middle of the 1.1559-1.1674 range, the market seems to be waiting for a catalyst. The key levels to watch: 1.1674 on the upside and 1.1559 on the downside. A decisive break of either boundary could provide a stronger signal about the next directional move.
Until then, traders should expect potentially intraday swings around the ECB decision, U.S. PPI and Friday’s CPI release. With monetary-policy expectations finely balanced on both sides of the Atlantic, the EUR/USD could be particularly sensitive to even relatively small surprises in the data.
This preview of weekly data examines USOIL and XAUUSD, with economic data expected later this week as the primary market drivers of the near-term outlook.
Highlights of the week: Chinese inflation, ECB decision, British GDP and US inflationTuesdayChinese Balance of trade at 03:00 AM GMT, where the figure for August is expected to increase from $112.5 billion to $120.1 billion. If this is broadly accurate, then it might create some gains for the currency.
WednesdayChinese inflation rate at 01:30 AM GMT. The market is expecting this figure to increase by 0.4%, reaching 0.9% in August.
ThursdayEuropean Central Bank Interest rate decision at 12:15 PM GMT. The market consensus is that the European Central Bank will proceed with a rate hike for the second time since August 2023, going from the current 2.40% to 2.65%. If expectations are met , the Euro might find support against other major currencies, while in the unlikely event of a rate cut, it might result in some losses in the short term. Investors and traders are also focused on the subsequent press conference following the release, which will provide hints about the monetary policy steps ahead.
US Producer Price Index (PPI) at 12:30 GMT. Market participants are expecting the figure to come out at 0.3% over 0% of the previous reading. If this is confirmed, then it could potentially hint at higher inflation figures in the coming months since higher producers' costs usually roll down to consumers, pushing inflation figures to the upside.
FridayBritish GDP growth at 06:00 AM GMT, where the annualized figure is expected to drop from 1.1% to 1% and the monthly figure from 0.3% to 0%. If these expectations are confirmed, then the pound might witness some short-term losses against other currencies traded against.
US Inflation rate at 12:30 PM GMT, where expectations are for the figure to remain unchanged at 3.4% while core inflation is expected to decline by 0.1% for August. A worse-than-expected figure would most probably boost the scenario of hiking rates at the next meeting of the Fed, while a lower reading could support a more dovish stance and the probabilities of a stable rate could rise.
USOil, daily
Oil rose slightly as tensions around the Strait of Hormuz remained elevated. Iran said it was close to reaching an agreement with Oman on a new shipping route, while the US launched strikes on Iranian oil tankers in retaliation for attacks on US Navy vessels. Iran responded by threatening to establish a restricted zone around the waterway. The US also plans to maintain its naval blockade, keeping the risk of further supply disruptions high. Hedge funds have increased bullish positions, while traders warn that a broader escalation in shipping attacks could push oil prices significantly higher.
From a technical perspective, crude oil remains bullish on the daily chart, with price trading well above both the 50-day and 100-day moving averages and holding above the 50% weekly Fibonacci level around $86. The recent rally has pushed price toward the 61.8% Fibonacci resistance at $90, where it is currently consolidating. The Stochastic oscillator is around 89, indicating overbought conditions and suggesting that upside momentum may be losing steam. A clear break above $90 could open the way toward $96, while a rejection could bring a pullback toward $86, followed by the moving-average area around $83.
Gold-Dollar, daily
Gold extended its decline, falling below $4,450 as stronger-than-expected US jobs data increased expectations of a Fed rate hike at the September meeting. A stronger dollar and higher yields added further pressure, while rising Middle East tensions and higher oil prices increased inflation concerns. Markets are now awaiting US inflation data for further clues on Fed policy. Despite the short-term pressure, central-bank buying and renewed demand for gold as a hedge against inflation, currency debasement and fiscal risks continue to support the longer-term outlook.
From a technical point of view, gold remains in a medium-term bullish structure, with price holding above both the 50-day and 100-day moving averages and comfortably above the key 23.6% Fibonacci level at 4,300. However, the recent pullback from the 4,700 area has weakened momentum, with price currently consolidating below the 38.2% Fibonacci resistance at 4,500. The Stochastic oscillator is near the lower part of its range at around 31, suggesting bearish momentum has eased but has not yet produced a strong bullish signal. A break above 4,500 would strengthen the bullish outlook and open the way toward 4,660, while a move below 4,300 would weaken the current structure and expose lower support.
EUR/USD trades near 1.1627 on Tuesday after a US jobs report that came in almost three times above forecast. The data supported the dollar and strengthened expectations of tighter Federal Reserve policy. Attention now shifts to the European Central Bank meeting on 10 September, where the rate increase is already fully priced in, and the guidance that follows will determine the euro’s next move.
US Jobs Data Put the Dollar Back on the Front Foot The US labour market delivered its strongest month since March. Nonfarm payrolls rose by 162,000 in August against a market forecast of around 56,000. The unemployment rate held at 4.1%, average hourly earnings rose 3.1% year-on-year, and the Bureau of Labor Statistics revised June and July higher by a combined 55,000, turning July’s previously reported job loss into a gain.
Nonfarm payrolls measure how many paid jobs the US economy added during the month, excluding farm work. They provide one of the clearest monthly indications of how much room the Fed has to adjust interest rates.
A labour market this resilient takes the pressure off the Fed to support growth and leaves inflation as its main concern. After the release, money markets raised the probability of a September rate increase to around 58%, up from roughly 52% before the data. Higher expected US rates make dollar deposits more attractive, so the dollar gained ground and EUR/USD settled into a narrow range.
Why the ECB Meeting Matters More Than the Decision Itself All 65 economists polled by Reuters expect a 25-basis-point increase in the deposit rate to 2.50%. A basis point is one hundredth of a percentage point, so 25 basis points equal 0.25%. Money markets are pricing in the same outcome with near-full certainty and expect the deposit rate to rise further, reaching around 3.00% by June 2027. That implies two more increases after this week.
When an outcome is fully priced in, the decision itself rarely moves the market. The euro will take its cue from the press conference. Eurozone inflation accelerated to 3.3% in August, driven largely by energy costs, and Christine Lagarde has already identified the energy shock as an upside risk to prices.
That leaves one open question for Thursday. If Lagarde confirms that further tightening remains under discussion, the euro could gain support against a dollar that is also pricing in higher rates, with EUR/USD potentially testing 1.1655, the upper edge of its current range. If she delivers the rate increase and keeps every option open without committing to a path, the rate outlook remains in the dollar’s favour, and the pair could move towards 1.1525.
German Factory Orders Add a Second Layer New orders in German manufacturing rose 2.5% in July after an upwardly revised 3.7% increase in June. The market expected 0.3%, and this was the third consecutive monthly increase.
The detail matters for anyone trading the euro. Excluding large-scale contracts, orders fell 1.4% from June. Domestic orders jumped 9.1% while foreign orders fell 2.1%, with demand from outside the euro area down 10.1% and demand from inside the bloc up 12.1%. Most of the headline strength came from shipbuilding, rail and aircraft contracts.
German industry is recovering, but that recovery currently relies on a small number of large contracts and on demand from within Europe. For the ECB, this supports the case that the economy can absorb higher rates.
EUR/USD Technical Analysis
On the four-hour chart, EUR/USD is building a consolidation range around 1.1620. An upward move towards 1.1655 remains on the table, with a decline towards 1.1525 seen as the following stage.
The MACD indicator supports this reading. MACD compares two moving averages of price and shows whether momentum is building or fading. Its signal line sits above zero and points firmly upwards, reflecting bullish momentum with room for the move higher to continue in the near term.
On the hourly chart, the market has completed a downward wave to 1.1620. The pair is now consolidating above that level. The working scenario for today is another upward leg towards 1.1655.
The Stochastic oscillator supports this view. The Stochastic oscillator shows where the current price sits within its recent trading range. Its signal line is above 20 and points upwards towards 80, indicating that the move higher still has room to develop.
Conclusion EUR/USD enters the ECB week with the technical picture pointing towards 1.1655 in the near term, while the fundamental picture stays split between two central banks moving in the same direction. The rate increase to 2.50% is already priced in, so the euro’s next move depends on the guidance that follows.
While the pair holds above 1.1620, the upside scenario remains the working one, with 1.1525 the level to watch further out should the move higher fail to hold. The US inflation report due next week will be the next catalyst on the dollar side of the pair, so the levels set this week are likely to be tested again quickly. Traders who want to follow the reaction in real time can place both levels on the chart in advance and watch how EUR/USD behaves around them during the decision.
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
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