GBPUSD currency pair recently reversed down sharply from the key resistance level 1.3555 (which stopped the previous sharp impulse wave 1 in the middle of July) intersecting with the upper daily Bollinger Band.
The downward reversal from the resistance level 1.3555 is likely to form the daily Japanese candlesticks reversal pattern daily Shooting Star.
GBPUSD currency pair can be expected to fall to the next support level 1.3450, low of the previous correction ii.
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Gold price (XAU/USD) declines to around $4,400 during the early Asian session on Thursday, pressured by escalating geopolitical tensions between the United States (US) and Iran. However, the potential downside for the precious metal might be limited as a tame reading of US inflation eased pressure on the US Federal Reserve (Fed) to raise interest rates as soon as next month.
A senior Iranian official said that Washington and Tehran remain at loggerheads over efforts to agree a permanent end to the war in the Gulf, adding that there had been no progress in talks to revive the interim deal agreed in June and define a time frame to implement it.
Renewed tensions in the Middle East and the continued closure of the Strait of Hormuz weigh on the yellow metal as it raises oil-driven inflation fears. “With the Strait of Hormuz still shut, upside inflation risks will remain top of mind for the foreseeable future,” said Seema Shah, chief global strategist at Principal Asset Management.
The latest US July Consumer Price Index (CPI) inflation moderated across a range of goods and services, cooling September Fed rate hike expectations. This, in turn, could help limit gold’s losses. Data released by the Bureau of Labor Statistics on Wednesday showed that the CPI increased 3.4% YoY in July, versus 3.5% prior. Excluding food and energy, the so-called core CPI increased 2.5% YoY in July, compared to 2.6% in June. Both readings came in line with expectations.
Interest-rate swaps are now pricing in nearly a 40.1% odds of a Fed hike in September, though the odds on an October move fell to about 60% from 75% a day earlier, with the next increase fully priced for December, according to the CME FedWatch tool.
Gold upside persists as US CPI fails to revive Fed hike betsAccording to TD Securities, “precious metals maintain upside” as the latest US CPI release “did little to reignite the Fed hike pricing.” The bank notes that “recent price action highlights the gold market is increasingly not expecting hikes,” underscoring a supportive backdrop for bullion even as investors reassess the policy outlook in light of softer inflation dynamics.
Technical Analysis: Gold keeps a bullish vibe in the near term
In the daily chart, XAU/USD holds a bullish near-term bias as it extends above the 100-day simple moving average (SMA) and remains comfortably over the Bollinger Bands’ 20-day middle line, suggesting a well-supported uptrend structure. Price is now pressing the upper Bollinger band, while the Relative Strength Index (14) at 67.51 flirts with overbought territory, hinting that the latest advance is strong but increasingly stretched.
On the topside, immediate resistance is defined by the Bollinger upper band at $4,410, where a sustained break would open the way to further gains. On the downside, initial support is seen near the current area, with the 100-day SMA at $4,390 acting as the first meaningful floor, ahead of the Bollinger middle band at $4,140; a deeper pullback toward the lower band at $3,865 would only come into focus if the bullish structure starts to unwind.
(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 GBP/JPY holds firm on Wednesday at around 215.00, as neither buyers nor sellers are reluctant to open fresh directional bets amid fears of renewed intervention in the FX markets by US and Japanese authorities to propel the Yen. At the time of writing, the cross-pair hovers below the 50-day Simple Moving Average (SMA), barely unchanged.
GBP/JPY Price Forecast: Technical outlookGBP/JPY faces significant resistance levels that are capping its advance, resulting in sideways trading. The Relative Strength Index (RSI), remains flat at the neutral level of 50, suggesting a lack of strong conviction from either buyers or sellers to drive the pair beyond key levels.
On the upside, the initial key resistance is the 50-day SMA at 215.43, followed by 216.00. Breaking this will open the way to the 216.50 level and, subsequently, the 217.00 psychological level.
Downwards, GBP/JPY's first support level is at 215.00, followed by the 100-day SMA at 214.55. Beneath lies the 200-day SMA at 212.12, above the August 7 low of 211.47.
GBP/JPY Price Chart – Daily
GBP/JPY daily chart Japanese Yen FAQs The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
US inflation came in broadly in line with expectations, sending expectations of a September hike down to 40% from 55% just over a week ago. Though it seems forex traders may have been positioned for a weaker set of figures, given the US dollar index traded higher on Wednesday. Yet as I outline below, I do not have great confidence in this supposed US dollar bounce, and suspect we saw a significant high on the dollar back in June. Even so, with the US dollar index showing the potential to extend its lacklustre bounce, it could see EUR/USD retreat further below its 200-day EMA before the next leg of an anticipated move higher unfolds.
View related analysis:
Australian Dollar Outlook: AUD/USD Wobbles on RBA Hold, US CPI Up Next FX Futures Positioning: US Dollar Longs Plunged, Yen Shorts Slashed Japanese Yen Outlook: US CPI, Intervention Risks Put USD/JPY Bulls on Notice Wall Street Outlook: Dow Jones Soars to a Record, Nasdaq Leads the Charge How to Read the COT Report to Track Forex Market Sentiment US Dollar Index (DXY) Technical Analysis While the dollar is retracing higher for now, bulls are making hard work of the gains – and clues from the weekly chart suggest further losses could await as the year progresses.
We may have seen a significant high in the week of June 22, with a double top and bearish engulfing week also forming around 100.50. For now, I suspect it marks the completion of the correction from the January low, with momentum having realigned with the selloff from the January 2025 high (which itself is a lower high relative to 2022).
For now, momentum is pointing higher from the 50-week EMA and 200-day EMA, as prices manage to hold above the January trendline – just. Yet daily trading volumes remain low and beneath their 20-day average to show a lacklustre effort form bulls. And with the 100 handle, July low (10.15) and monthly pivot point (100.28) nearby for potential resistance, the upside for the US dollar could also be limited.
That said, this is not to say the USD will simply roll over either, with the 99.17 high-volume node (HVN), monthly S1 pivot point (99.08) and 99 handle nearby. But it could at least mean the retracement higher on DXY could be limited, and therefore pullbacks on EUR/USD, AUD/USD and others could be on the smaller side before they try to move to new highs. We also need to see the US dollar break beneath the 98.70 low before assuming the wheels have truly fallen off and that the bigger move for bears is back underway.
Source: ICE, TradingView
EUR/USD Technical Analysis: Euro vs US Dollar A higher US dollar naturally means a weaker euro, with EUR/USD accounting for ~57% of the DXY basket.
The daily chart shows near-term bearish signals which hint at a retracement lower. EUR/USD is yet to see a daily close above its 200-day EMA, despite intraday spikes above it. And bulls have made a bit of a mess of invalidating the 2026 bearish trendline. But even if EUR/USD does provide a deeper p[...].
The weekly chart shows support was found at the May VPOC ahead of a higher low and bullish outside week. This suggests to me that a significant swing low was seen in June, and that EUR/USD is trying to break higher after its minor pullback over the near term. Beyond the pullback, I am on the lookout for a swing low and potential rally up to the 1.16 handle, June VPOC (1.1612) and high-volume node (1.1644).
Source: ICE, TradingView
USD Bullish Exposure Falls as EUR/USD Sentiment Improves | COT Report It is worth noting that traders remained heavily net-long US dollar index futures as of last Tuesday’s close, although bulls are clearly questioning their level of exposure. Net-long exposure to the US dollar via the futures market declined by $12.5 billion from the week prior – the fastest reduction of longs in nearly two years and the second-fastest in six. Net-long exposure had also risen to just $3 billion shy of its all-time high, hinting at a bullish sentiment extreme. Asset managers also reduced their net-long exposure to US dollar index futures from a 19-month high, so questions are clearly being asked by USD bulls regarding their level of bullish exposure.
Meanwhile, large speculators reduced their net-short exposure to EUR/USD futures from their most bearish level since December 2024. Asset managers remained net-long and slightly increased their bullish exposure. Of course, this is weekly delayed data, so it is best used to gauge sentiment rather than as a timing cue for trades on lower timeframes. But when you put the clues together, I see the potential for a more bullish euro and less dominance from USD bulls in the coming weeks.
If you revisit the US Constitution’s Article I, Section 10, Clause 1, you will see the principles of the U.S. monetary system: "No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts." According to this clause, states do not have the authority to "emit Bills of Credit." This means that the U.S. monetary system was to be managed by the central government. Then, gold and silver were to be the only means of payment.
However, violations of the Constitution regarding money began as early as the 19th century. For example, according to the Coinage Act that was passed in 1873, the minting of US silver dollars was stopped, and only coins of lower denominations remained. It is widely believed that the 1873 Act cancelled the original bimetallic financial system or gold and silver standard, that is. Other experts, however, believe the Act substantially restricted it. On March 14, 1900, the Gold Standard Act came into effect in the US. According to the Act, gold has become the sole metal for backing and redeeming paper currency. This obviously marked the end of the bimetallism era in the US, during which silver was freely exchangeable for gold. The Gold Standard Act was an obvious violation of the Constitution, which had made both gold and silver legitimate means of payment.
Then, in 1933, gold’s status as a means of payment was threatened again. President Franklin Roosevelt’s executive order required citizens to give their gold to the Treasury in exchange for the Fed’s notes. Later, in 1934, commercial banks were also required to exchange their gold reserves—not for dollars, but for gold certificates. Not only was gold currency abolished, but private ownership of gold was effectively banned (with few exceptions). With the help of his executive order Franklin Roosevelt gave the Fed the power to print unbacked currency. Citizens' rights to own gold began to be fully restored under President Richard Nixon. In 1975, President Gerald Ford fully legalized private gold ownership.
As I have mentioned in my other articles, the USD was later linked with gold prices during the 1944 Bretton Woods Conference, during which the gold-dollar standard was established. However, the right to exchange paper dollars for the precious metal was granted only to the monetary authorities of other nations; no such exchange option was provided for American citizens. On August 15, 1971, President Nixon cancelled the direct convertibility of the USD into gold for foreign governments and central bankers.
Under President Joe Biden, efforts were made to begin developing a digital dollar. However, when Donald Trump returned to the White House, he terminated the digital dollar project. Instead, he decided to focus on supporting cryptocurrencies, stablecoins in particular.
The point I am making is that nowadays American money is very far from the idea of the US Constitution. This is particularly true given the fact that the US dollar is consistently depreciating due to inflation. Since the Fed was created in 1913, the dollar has lost over 96% of its purchasing power.
Source: RedditAs I have mentioned in many of my previous publications before, the US dollar could lose its status as the world’s reserve currency that it gained during the 1944 Bretton Woods Conference. As soon as that happens, America’s debt- fueled economy would likely face a serious crisis.
Interestingly, there were attempts to restore gold and silver as America’s official means of payment. For example, the 40th US President, Ronald Reagan, signed the Liberty Coin and the Gold Bullion Coin Acts. These laws allowed the US Mint to issue gold and silver coins that were supposed to be treated as legal tender. However, these coins never became money. Instead, they were still considered to be investment, collectible, or commemorative coins.
In October 2022, Congressman Alex Mooney of West Virginia introduced a bill to restore the gold standard, aiming to tie the USD to gold in order to cope with inflation, accumulated budget deficits, and the US monetary system’ instability. Obviously, the bill did not get sufficient support and did not become law as a result.
At the state level, however, there are significantly more politicians and officials that support the idea to recognize both gold and silver as legal tender. The Sound Money Defense League (SMDL), a public organization founded in 2014, is active in many states today. The organization’s aim is to have gold and silver recognized as money—at least at the state level for now. After the statewide recognition takes place, work can begin at the federal level. One of the SMDL’s founders is Ron Paul, a longtime congressman who tried to promote federal legislation in Congress to revive the gold standard, yet, without success. Therefore, the decision was made to continue the recognition work at the state level.
According to the SMDL’s Executive Director J.P. Cortez, by mid-2025, 12 U.S. states had signed laws restoring gold’s and silver’s money status. Meanwhile, similar laws were being prepared in 32 America’s states. As Cortez said: "The main reason gold and silver are not used as money today is not that they make for poor money, but rather that the government has burdened all viable alternatives with taxes and regulations."
Here are the steps one has to take to give gold and silver the status of money. First, it is necessary to eliminate taxes on the purchase, sale, and other transactions involving gold and silver. Second, is to abolish taxes on capital gains arising from the appreciation of precious metal bars or coins. Finally, the government can recognize the precious metals as money. If the monetary status of precious metals gets legalized, this does not mean that they must physically circulate in the form of coins. Gold and silver can exist in paper or electronic form but remain freely convertible into the physical precious metals. However, establishing such a monetary system requires the creation and equipping of specialized precious metal depositories within the states, managed by state financial agencies or treasuries. According to the latest data, 45 out of 50 states have already taken the first step—abolishing taxes on gold and silver transactions.
The greatest resistance to the return of precious metals to the realm of money is observed in states such as California, Maine, and Vermont, while states such as Wyoming, South Dakota, and Alaska have made the most progress in legalizing gold and silver as money. Wyoming recently established a $10 million gold reserve, while Utah created a $180 million physical gold fund. Even though these amounts may seem to be moderate, a start has been made.
In May 2025, Florida’s Governor Ron DeSantis signed a law recognizing gold and silver as legal tender within the state but it officially took effect on July 1 of this year. Under the law, coins bearing information regarding their weight, purity, and place of minting are recognized as legal tender. Although the law does not require the acceptance of gold as payment, it still serves as an alternative payment method subject if the parties involved agree.
Also, in Alaska, following a lengthy process that began back in 2023, a law was finally passed that also gives gold and silver the currency status.
SMDL is currently working to promote the “Goldback”, a local product that possesses characteristics of both a commodity and currency in several states. It takes the form of a banknote but contains a small amount of 24-karat gold. A single Goldback note contains 1/1,000 of a troy ounce of the precious metal, making its value easy to calculate: it is simply the spot price of gold divided by 1,000. Right now, the official price of gold is lingering near the $4,500 per troy ounce mark. So, right now, the value of a Goldback note is equivalent to $4.50.
These gold notes are produced by the private mint Valaurum. However, some refer to the Goldback as a "coin" rather than a "banknote." In the former case, it is said to be "printed," while in the latter, it is "minted." The Goldback was first issued in Utah in 2019. Later, special series were produced for Nevada, New Hampshire, Wyoming, Florida, South Dakota, Oklahoma, Arizona, and Idaho. According to Goldback Inc., as of April 2026, more than 5,000 businesses across the US accept Goldback as a form of payment.
EUR/USD price action turned volatile on Wednesday as the pair struggled to hold early gains following the latest US Consumer Price Index (CPI) report, a key driver for Federal Reserve interest rate expectations and US dollar direction. The euro briefly surged on signs of cooling US inflation but quickly lost momentum as traders reassessed the broader policy outlook.
The currency pair initially climbed as high as $1.1563 immediately after the inflation release before reversing lower, highlighting the market’s indecision. At the time of writing, EUR/USD is trading around $1.1525, with the closely watched $1.1500 psychological level once again coming into focus as a key short-term support zone.
While US inflation data showed further moderation, typically a bearish signal for the US dollar, the reaction was muted. The CPI figures largely met expectations rather than delivering a significant downside surprise, limiting the scope for a sustained dollar selloff and keeping EUR/USD trapped within a tight intraday range.
US CPI Falls to 3.4% as Fed Rate Hike Expectations Ease US consumer prices increased 0.1% month-on-month in July, following a 0.4% decline in June. On an annual basis, headline inflation eased to 3.4% from 3.5%. Core CPI, which excludes volatile food and energy prices, increased 0.2% during the month and slowed to 2.5% year-on-year.
Both readings were broadly consistent with market expectations. Nevertheless, the continued moderation in inflation strengthened the argument for the Federal Reserve to leave interest rates unchanged at its September meeting.
Interest-rate markets subsequently reduced the probability of a September rate increase to around 40%, compared with significantly higher expectations earlier this month. The combination of softer inflation and July’s weak employment report has made the case for an immediate rate increase considerably harder to justify. That should theoretically be negative for the US dollar and supportive of EUR/USD. Wednesday’s price action, however, shows that traders are not ready to abandon the greenback.
US Dollar Recovers as Oil and Middle East Risks Complicate Fed Outlook The US Dollar Index initially dropped to approximately 99.61 following the CPI release but subsequently recovered toward the psychologically important 100.00 level. One reason is that the inflation outlook remains vulnerable to developments in energy markets.
Oil prices have remained volatile amid continuing tensions in the Middle East and uncertainty surrounding shipping through the Strait of Hormuz. A sustained increase in crude prices could feed back into US inflation, complicating the Federal Reserve’s path even as underlying price pressures moderate. The geopolitical backdrop has also maintained some safe-haven demand for the dollar.
As a result, traders appear reluctant to price out additional Fed tightening entirely. While a September move now looks less likely, markets still see the possibility of another increase later in the year if inflation proves persistent. For EUR/USD, this has created a tug-of-war between improving rate differentials for the euro and lingering demand for the US dollar.
EUR/USD Price Forecast: $1.1500 Becomes Critical Support The one-hour EUR/USD chart shows a clear deterioration in short-term momentum following the rejection from the $1.1560 area. EUR/USD is currently trading around $1.1525, below the Bollinger Band 20-period moving average near $1.1536. The pair has also moved toward the lower Bollinger Band, currently around $1.1517, highlighting the increase in short-term selling pressure.
The MACD provides another warning for euro bulls. The MACD line has moved below its signal line and the histogram has turned increasingly negative, suggesting bearish momentum is building following Wednesday’s failed breakout.
The first level to watch is therefore $1.1500. This psychological level has repeatedly attracted buyers and remains important to the broader recovery structure. A decisive break below $1.1500 could strengthen the bearish correction and expose the $1.1465-$1.1470 area.
On the upside, EUR/USD first needs to reclaim $1.1535-$1.1540 to ease immediate selling pressure. Above there, the $1.1555-$1.1565 zone represents the more significant resistance area. A sustained break above $1.1565 would put $1.1600 back into focus.
EUR/USD Outlook: Can the Euro Hold Above $1.15? The near-term EUR/USD outlook remains finely balanced following the US CPI report. Cooling inflation and weaker US employment data have reduced the probability of a September Fed rate hike, removing an important source of support for the dollar. However, Wednesday’s reversal shows that softer CPI alone may not be sufficient to push EUR/USD decisively higher.
Attention now turns to upcoming US economic releases, including producer prices and retail sales. Stronger data, particularly another sign of persistent inflation, could revive Fed tightening expectations and put $1.1500 under renewed pressure.
Conversely, further evidence that inflation and economic activity are cooling could push Treasury yields and the dollar lower, giving EUR/USD another opportunity to challenge $1.1565 and potentially $1.1600. For now, $1.1500 is the key dividing line. Holding above it keeps the euro’s broader recovery intact, while a convincing breakdown would shift the short-term EUR/USD price forecast increasingly in favour of sellers.
Why is EUR/USD falling after the US CPI report?
EUR/USD initially rose after US inflation eased but reversed as the dollar recovered. The CPI figures were broadly in line with expectations, while elevated energy prices and geopolitical uncertainty continue to create upside inflation risks.
Will the Federal Reserve raise interest rates in September?
Expectations for a September Fed rate hike fell after July CPI showed headline inflation easing to 3.4% and core inflation declining to 2.5%. Markets currently favour the Fed keeping rates unchanged, although another increase later in 2026 remains possible if inflation pressures intensify.
What are the main EUR/USD resistance levels?
Immediate resistance sits around $1.1535-$1.1540, followed by the stronger $1.1555-$1.1565 area. A breakout could open the door toward $1.1600.
Gold confirms a bullish reversal above key resistance, strengthening the case for an advance toward the 200-day moving average near $4,502.
In this article:Gold
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Gold ForecastBullish Reversal Gains Momentum After signs of resistance and a weak close on Tuesday, buyers took back control of gold on Wednesday to reach a slightly new high of $4,441. A potential bearish candlestick pattern from Tuesday did not trigger and a higher daily low of $4,362 was established instead. Gold is set to close above the lower swing high of $4,382 from mid June and above the 100-day moving average at $4,390, thereby confirming a bullish reversal signal and reclaim of a key moving average. Also, Wednesday’s close is set to be the highest for the current advance, providing an additional bullish indication.
Spot gold daily chart shows buyers in remain in control. Source: TradingView The fact that gold has not had a pullback below a prior day’s low since bullish momentum accelerated after a break above a downtrend line last Wednesday, is testament to the conviction of buyers. Therefore, if the current resistance zone is cleared, it looks like gold may head to its next upside target before a pullback.
Momentum Points Toward $4,502 The 200-day moving average is a key potential resistance zone and it sits currently near $4,502. It has not been successfully tested as resistance since a break below it occurred in early June, other than an initial pullback. Given the position and strength of the advance, it looks likely to be tested before gold is done with the current overall advance. This doesn’t mean there is not consolidation or a pullback first, but there is also the possibility that the 200-day average is reached before that occurs.
Spot gold daily chart shows rise from bottom of falling trend channel. Source: TradingView A sustained reclaim of the 100-day moving average goes a long way towards reaching the 200-day average. The first approach is expected to be met with resistance, further supported by a downtrend line. If the 200-day moving average is reached and followed by weakness, the 100-day moving average will represent a key dynamic initial support area.
Longer-Term Trend Faces Next Test With a test of the 200-day moving average, the downtrend line may also be tested as resistance, along with an interim lower swing high from late May at $4,595. The recovery above the long-term uptrend line recently is positive for the long-term trend. To further satisfy the bulls, a reclaim of the 200-day moving average will also need to occur.
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With over 20 years of experience in financial markets, Bruce is a seasoned finance MBA and CMT® charter holder. Having worked as head of trading strategy at hedge funds and a corporate advisor for trading firms, Bruce shares his expertise in futures to retail investors, providing actionable insights through both technical and fundamental analyses.
US Dollar Talking Points: The focus shifts to PPI as an expected reduction in Producer Prices highlights tomorrow’s macro calendar. Markets are looking for a 4.2% print from a prior month of 4.7%. At this morning’s CPI print, there was little excitement as both headline and core printed right at the expected 3.4% and 2.5%, respectively.
The USD is bouncing in late US trade following this morning’s CPI print, which came in right at the expected 3.4% and 2.5% for headline and core. At this point it still looks like the USD/JPY pair is dominating Dollar flows and that showed throughout today’s trade, with an early-morning sell-off in both markets reversing after the data release.
As looked at yesterday, inflation remains a hot button on the USD/JPY trade. Given that the pair is more than 50% above early 2021 levels there’s still a heavy long position holding on, and a whiff of change such as we saw in November of 2022 or 2023, or in July of 2024, can compel a sizable sell-off.
With this morning’s inflation report still showing well above the Fed’s targets, there’s still the harboring expectation for rate hikes later this year which removes some of that worry for USD/JPY longs. But the next chapter on inflation is in the spotlight tomorrow with the PPI release, which is often considered to be a lead-in for consumer prices, especially given our current backdrop.
With higher oil prices driving inflation in areas other than energy, the concern is whether the Fed is looking at a more systemic worry than just higher gas prices due to the war in Iran. That had started to show a couple of months ago, as Core CPI popped up to a 2.9% read after printing at 2.5% just a few months prior, and that’s likely one reason that the Fed started to shift into a more-hawkish stance in June which, in-turn, drove breakouts in both the USD and USD/JPY.
At this point, the USD has round-tripped since that June Fed meeting when the bank suddenly started to sound hawkish. The DXY basket has been finding support at the same spot that was in-play leading into that meeting, spanning up to the 99.52 area on the chart.
On that chart, we have a few important waypoints overhead, with the 100 handle in DXY followed by a big zone spanning from 100.22 up to 100.40. This was support back in 2024 as the Fed started hiking rates before coming in as resistance multiple times last year and then resistance-turned-support earlier this year.
US Dollar Daily Chart Chart prepared by James Stanley; data derived from Tradingview USD/JPY
As goes USD/JPY, so goes the Dollar basket. And the underside wick on DXY followed by a rally into late trade echoes that sentiment with USD/JPY looking primed to re-test the 160.00 level of resistance.
The big question with 160 is whether we see another intervention. They last intervened when the pair was around 164 so, perhaps they won’t be so aggressive, and I think that’s what we’re seeing from bulls at this point as the rally has remained rather tepid near highs or tests of resistance while still aggressive on pullbacks or tests of support – and this makes sense if we consider the fact that an intervention seems unlikely at lower price levels while gains encounter a higher risk of such.
The important item from this morning is where support showed up. There was a quick pullback before the US opened and that pushed price right down to the 38.2% Fibonacci retracement of 158.58, which has so far set up as support. This price was also previous resistance so there’s a couple of different items of importance there and the 50% mark from that same move is nearing overhead. I’ve spanned that level up to the 160.00 spot for a resistance zone in the pair on the below chart.
Markets have an incredible way of sniffing out weakness and I think that’s what we’re seeing now, as the dual intervention from the US and Japan has set a line in the sand at 164, but will both, or either jump in earlier this time at 160? Markets seem to be getting more comfortable with testing that thesis right now.
USD/JPY Daily Chart Chart prepared by James Stanley; data derived from Tradingview EUR/USD EUR/USD has put in minimal change so far in August and I think a lot of that dials back to the larger matter of the crowded trade in USD/JPY. But – EUR/USD is pulling back today following a resistance test last week, and there’s a big spot of support coming into view from around 1.1500 up to 1.1515, and there’s secondary support a bit lower from around 1.1455 up to 1.1469.
EUR/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview GBP/USD While EUR/USD held below key resistance established last week, GBP/USD extended its rally with another fresh high this morning when we had that initial push of USD-weakness following the USD/JPY pullback. With USD strength re-appearing, GBP/USD has similarly pulled back and now there’s a couple of support levels coming into view, with 1.3484 and 1.3470 getting closer.
GBP/USD Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview AUD/USD In this morning’s webinar which was about an hour after the CPI release, AUD/USD was testing the top of a resistance zone just inside of the .7100 handle. Since then, the USD pullback has erased those gains and at this point he daily bar is looking quite indecisive. This isn’t necessarily doom and gloom, but it does highlight how chasing fresh breakouts especially with the noisiness of a news release can be a dangerous way to go.
At this point the big question is whether higher-low support plays and there’s a big spot that’s already being tested around .7050 and another sits below around .7021.
AUD/USD Daily Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
The USD/CHF edges higher by some 0.30% on Wednesday, refreshing ten-day highs of 0.8138, as the uptrend is poised to extend if it clears key resistance levels.
USD/CHF Price Forecast: Technical outlookThe market structure of successive higher highs and higher lows continues to be respected, indicating that the uptrend remains in place. Nevertheless, it seems that a bearish flag is forming, which could open the door for a deeper pullback before the USD/CHF resumes its uptrend.
Momentum remains bullish as depicted by the Relative Strength Index (RSI). But if USD/CHF falls below the 50-day Simple Moving Average (SMA) at 0.8071, it opens the door to a retracement, initially to 0.8042, ahead of 0.8000.
Conversely, if the pair surpasses the top trendline of the bearish flag, this clears the way towards 0.8200 and the yearly peak at 0.8205. Once those two levels are removed, buyers could challenge the psychological levels of 0.8250 and 0.8300.
USD/CHF Price Chart – Daily
USD/CHF daily chart Swiss Franc Price Today The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies today. Swiss Franc was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.17%0.13%0.13%0.16%0.02%0.39%0.36%EUR-0.17%-0.04%-0.06%-0.02%-0.19%0.24%0.19%GBP-0.13%0.04%-0.02%0.00%-0.15%0.26%0.23%JPY-0.13%0.06%0.02%0.02%-0.12%0.28%0.24%CAD-0.16%0.02%-0.01%-0.02%-0.15%0.27%0.21%AUD-0.02%0.19%0.15%0.12%0.15%0.39%0.38%NZD-0.39%-0.24%-0.26%-0.28%-0.27%-0.39%-0.05%CHF-0.36%-0.19%-0.23%-0.24%-0.21%-0.38%0.05% 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 Swiss Franc from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CHF (base)/USD (quote).
July inflation landed exactly where the consensus had it, on all four lines of the release, and Gold responded by adding around 1% and holding fast near $4,400/ounce, trading at its highest since early June. A print that surprises nobody is not supposed to move a metal that far. This one did, because the composition underneath the headline handed a hawkish Federal Reserve (Fed) the cover to wait, and the rate market cut the odds of a September hike from a coin flip to a 38% tail inside the hour.
What the same curve says about October and December is the problem. The hike did not come off the calendar. It moved by one meeting, and Gold has repriced as though it were cancelled.
The print a hawkish Fed can look throughThe Consumer Price Index (CPI) rose 0.1% in July against a 0.1% consensus, after falling 0.4% in June, and 3.4% over the year against 3.4% expected, down from 3.5%. Core, stripping food and energy, rose 0.2% against 0.2% expected and 2.5% over the year against the same, down from 2.6% and the softest core reading since January. Four lines, four bullseyes.
The interesting part sits in the detail tables. Shelter rose 0.1% on the month and accounted for roughly two-thirds of the entire all-items increase, which is a very quiet way to build a headline. Energy fell 1.5% on the month with gasoline down 2.9%. Yet energy is still 14.7% higher over the year and gasoline 24.6% higher, and airline fares, the cleanest passthrough from jet fuel to the consumer basket, rose 2.2% on the month and 25.5% over the year.
Read those together and the war is sitting almost entirely in the headline index while the core keeps grinding lower. That is the single most convenient shape a conflict-driven inflation impulse can take for a central bank that does not want to tighten into a supply shock. It lets policy treat the barrel as relative prices rather than inflation, look through the energy line, and point at a 2.5% core as evidence that the underlying trend is intact.
Gold understood that immediately and correctly. The metal opened near $4,371, dipped to $4,362 ahead of the release, then ran to $4,441 after it and holds around $4,434. Buying a soft core print is the right trade on the day.
The hike moved by one meeting, not off the calendarHere is where the tape and the curve part company.
The September 16 meeting now prices at 61.86% for a hold in the current 3.50%-3.75% band against 38.14% for a quarter-point move. Two days ago, that same meeting was a coin flip. So far, so consistent with a metal rallying.
Run the curve forward and the picture inverts. The October 28 meeting carries 62.50% for the 3.75%-4.00% band, meaning the market is already better than three-in-five that the hike has happened by Halloween. By December 9, that band carries 95.28%, with a further 4.72% sitting above it. On the conditional distribution, the December tail is fatter still, 23.9% for two hikes and 3.9% for three.
That is not a market that has abandoned tightening. It is a market that has slid one hike five weeks to the right and left the destination almost exactly where it was. The terminal expectation is barely disturbed. What changed is the timing, and only the timing.
For a non-yielding asset, the distinction is close to everything. Gold funds itself against real rates, and a hike deferred by one meeting costs a holder roughly five weeks of carry differential. Five weeks of carry is worth a few dollars an ounce, not a hundred and fifty. The metal has taken a timing adjustment and priced it as a change of regime.
The chart has run ahead of the repricingThe mechanical picture makes the same case without needing a single rate probability.
Gold spent the summer beneath its 200-day exponential moving average and reclaimed it only in the past few sessions. That average sits near $4,290. The 50-day sits near $4,220, roughly $70 below the 200-day, which means the shorter average still trades under the longer one and the alignment that produced the June and July decline has not reversed. It has simply been jumped.
Price now trades about 3.4% above the 200-day and better than 5% above the 50-day, having travelled almost 12.7% from the July low near $3,941 in about three weeks. Daily Stoch RSI is above 81 and pressed into the overbought band. A market that reclaims a long moving average usually does it, backs and fills, and lets the shorter average catch up. This one has gone straight through and kept going.
None of that makes the direction wrong. Moving averages do not cap anything, and a genuine regime change ignores them for months at a time. It does mean the move has borrowed heavily from the future, on a rate repricing that turns out to be a deferral, at a momentum reading that historically precedes consolidation rather than acceleration.
Two dates decide itThe near-term test arrives quickly, and both legs of it land inside 48 hours.
Producer prices come Thursday, with the headline expected at 0.2% on the month and 4.9% over the year against 5.5%, and the core measure at 0.3% and 4.2% against 4.7%. A soft PPI corroborates the CPI, pushes the September odds lower still, and gives the current Gold level a fundamental leg it presently lacks. A firm one, particularly in the core, tells the market the July CPI was an energy artefact and pulls September back toward the coin flip it was on Monday. Two Fed speakers follow the print within half an hour, one of them among the three who dissented for a quarter point at the July meeting, which is the first chance anyone on the committee has to react to the disinflation in public.
Friday brings retail sales and the preliminary Michigan survey, where the one-year inflation expectation sits at 4.2% and the five-year at 3.3%. Consumer expectations running that far above target are the strongest argument the hawks have, and a further rise there would be the most direct threat to the September pause the market has just bought.
The framework from hereThe bias is for consolidation rather than continuation, and the levels are unusually clean.
$4,400 is the pivot in play, and holding it on a daily basis keeps the reclaim credible. Losing it turns attention to $4,300, which is effectively the 200-day and the line that decides whether the past three weeks were a regime change or an overshoot. Beneath that, $4,200 sits on the 50-day and is where the overbid thesis would be fully expressed. The July floor near $4,000 is the deeper reference and is not in play absent a hawkish PPI surprise.
To the upside, $4,500 is the level that matters, because it is where the June breakdown began and where trapped supply from that decline is likeliest to sit. A daily close above $4,500 invalidates the overbid reading outright and says the market is pricing something larger than a five-week deferral, most plausibly a view that the tightening cycle is over rather than paused.
Position for the gap between timing and destination. The tape has priced a September pause. The curve has priced an October or December hike at better than 95% by year-end. Both cannot be worth $4,434, and the reconciliation runs through Thursday's producer prices.
Silver price surges over 1.40% on Wednesday as the latest inflation report in the United States (US) shows that prices are cooling, on its way towards the Federal Reserve’s goal of 2%. The XAG/USD trades at $65.53.
XAG/USD Price Forecast: Technical outlookFrom a technical perspective, the white metal is neutral to upward biased, with bulls gathering strength. They cleared the 50-day Simple Moving Average (SMA) at around $61.60 and also the July 6 high at $63.28 on its way towards reclaiming the $65.00 figure.
Momentum stills favor further upside. The Relative Strength Index (RSI) is bullish and aiming upwards. Hence the path of least resistance is up.
The first resistance would be the August 10 high at $66.59. Once surpassed the next stop is the 100-day SMA at $68.87, followed by the 200-day SMA at $71.47. Above lies the $75.00.
For a bearish resumption, the XAG/USD must drop below the 50-day SMA. This can prompt investors to challenge the July 6 high turned support of $63.28. Beneath, the next are of interest is the $60.00 milestone.
XAG/USD Price Chart – Daily
Silver daily 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.
Gold price (XAU/USD) registers gains of over 1% on Wednesday as US inflation data aligns with estimates, easing the Federal Reserve’s (Fed) task of further tightening monetary policy. The Consumer Price Index (CPI) continues its downward trajectory. The XAU/USD trades above $4,400 after bouncing off daily lows of $4,362.
XAU/USD rallies after US inflation cools, easing September hike fearsBullion extended its gains as investors speculate that the Fed will not raise rates at its September meeting, following July’s report. On Tuesday, money markets priced in a 52% chance of a Fed rate hike at the next meeting. But the dip in inflation shifted the odds to 60% that the US central bank will keep rates steady, according to Prime Terminal data.
The Fed has a 73% chance of raising rates in December, with three inflation reports before the December 9 meeting.
July’s CPI came in at 3.5% YoY, down from 3.6%, while core CPI also edged lower from 2.6% to 2.5% YoY, as revealed by the US Bureau of Labour Statistics (BLS). Even though Oil prices rose nearly 24% in July, gasoline prices declined for the second straight month.
However, geopolitics continued to weigh on the economy, and if negotiations between the US and Iran failed to reach common ground to end the conflict, energy prices could jump again, threatening to halt the disinflation process in the US.
According to Al-Mayadeen, an Iranian political and security source said that the Strait of Hormuz remained closed and that Tehran hasn’t changed its policy.
US President Donald Trump posted on his Truth Social account that “The U.S.A. has total control over the Strait of Hormuz. I THINK WE WILL KEEP IT!” It's a belief that isn't backed up by the facts on the waterway. At the same time, CNN reported that US embassies in the Middle East would continue to work with reduced staff amid the Iran war.
On Thursday, traders' eyes will be on the release of the US Producer Price Index (PPI) for July and Initial Jobless Claims data. If the number of Americans filing for unemployment benefits rises, it could increase downside risks to the labour market, which could push the Unemployment Rate higher.
XAU/USD price forecast: Gold climbs back above $4,400, eyes on $4,500Gold price seems to be gaining traction as it clears the 100-day Simple Moving Average (SMA) at $4,388, potentially opening the door to further upside. Momentum as measured by the Relative Strength Index (RSI) shows that buyers are gaining traction. Hence, the path of least resistance is upward in the short term.
XAU/USD's first resistance would be the $4,450 psychological level. A breach of it will expose the 200-day SMA exactly at the psychological $4,500 mark. A daily close above the latter could pave the way to challenge the $5,000 milestone.
On the flip side, if Gold falls below the low of the day (LOD) at $4,362, it opens the door to a deeper pullback. The next support is $4,300, followed by the July 6 high at $4,202. If this level fails, the next support levels are the 50-day SMA at $4,150 and $4,100.
Gold daily chart 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.
EUR/USD edges lower on Wednesday, reversing earlier gains as the US Dollar (USD) shrugs off in-line US Consumer Price Index (CPI) data. At the time of writing, the pair trades around 1.1521 after touching an intraday high of 1.1563.
The US Dollar weakened immediately after the inflation report as headline and core CPI eased to 3.4% and 2.5%, respectively, prompting traders to scale back Federal Reserve (Fed) rate-hike bets.
However, the Greenback later pared its losses as elevated energy prices keep inflation risks tilted to the upside. Limited prospects for peace in the Middle East and the reopening of the Strait of Hormuz also support safe-haven demand for the US Dollar.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades close to the 100 psychological mark after rebounding from an intraday low of 99.61.
The US Dollar’s recovery drags EUR/USD toward the lower end of its recent range following repeated rejections at the 100-day Simple Moving Average (SMA).
Technical analysis
On the daily chart, EUR/USD retains a neutral-to-slightly bullish bias. The pair holds above the 1.1500 psychological mark and the 50-day Simple Moving Average (SMA) at 1.1466.
The Relative Strength Index (RSI) stands near 56, while the Moving Average Convergence Divergence (MACD) remains in positive territory, although the fading green histogram points to weakening bullish momentum. The Average Directional Index (ADX) in the high 20s suggests moderate trend strength.
On the upside, the 100-day SMA at 1.1567 offers immediate resistance. A decisive break above this level would bring the 200-day SMA near 1.1630 into focus.
On the downside, immediate support is seen at the horizontal level of 1.1500, followed by the 50-day SMA at 1.1466, a break of which would weaken the nascent positive tone and expose the pair to a deeper pullback.
(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.
FedWatch Tool indicates that there is a 61.9% probability that Fed will leave rates unchanged at the next meeting in September. The market continues to expect that Fed will start the rate hike cycle this year, making the first 25 bps hike in December. The recent decline in rate hike probability serves as a positive catalyst for gold.
U.S. dollar gained ground against a broad basket of currencies despite falling Treasuries yields. Dollar’s move put some pressure on gold markets and pushed them away from two-month highs.
Gold moved above the resistance at $4360 – $4380 and climbed above the $4400 level. In case gold settles above $4400, it will head towards the resistance, which is located in the $4480 – $4500 range.
On the support side, a move below the $4360 level will push gold towards the $4300 level. If gold declines below $4300, it will head towards the support level at $4180 – $4200.
Silver Tests The $66.00 Level As Gold/Silver Ratio Pulls Back
The Pound Sterling (GBP) holds firm within familiar levels on Wednesday after the US inflation report was in line with estimates, a relief for the Federal Reserve (Fed), which is laser-focused on tackling higher prices. The GBP/USD pair trades at around 1.3500 after reaching a high of 1.3546. Read More...
Pound Sterling retains gains as US CPI trims September Fed hike oddsGBP/USD trades modestly higher on Wednesday as the US Dollar (USD) comes under mild pressure following the release of the latest US inflation figures. However, the market reaction remains limited as the data broadly matched expectations. At the time of writing, GBP/USD trades around 1.3523, near its highest level since July 16. Read More...
British Pound holds steady above 1.3500 vs USD as traders eye US CPI ahead of UK GDPThe GBP/USD pair extends its sideways consolidation around the 1.3500 psychological mark through the first half of the European session on Wednesday. Traders opt to wait on the sidelines ahead of important macro data from the US and the UK. Read More...
Key Points:EUR/USD pulled back as traders reacted to U.S. CPI report. USD/CAD failed to settle below the support level at 1.3920 - 1.3935.USD/JPY gained some ground as traders ignored the pullback in Treasury yields.
In this article:EUR/USD
-0.15%
EUR/USD ForecastGBP/USD
-0.09%
GBP/USD ForecastUSD/CAD
+0.13%
USD/CAD ForecastUSD/JPY
+0.07%
USD/JPY Forecast
U.S. Dollar Moves Higher As Inflation Rate Drops To 3.4%
DXY 120826 4h Chart U.S. Dollar Index gains some ground as traders focus on CPI report. The report indicated that Inflation Rate declined from 3.5% in June to 3.4% in July, in line with analyst estimates. Core Inflation Rate decreased from 2.6% to 2.5%. Core Inflation Rate has also met analyst expectations.
Currently, U.S. Dollar Index is trying to settle above the resistance level at 99.85 – 100.00. In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance, which is located in the 100.50 – 100.65 range.
EUR/USD Retreats After U.S. CPI Report
EUR/USD 120826 4h Chart EUR/USD pulled back as traders focused on U.S. inflation data. Traders also monitored the dynamics of the oil markets. Oil prices were swinging between gains and losses amid geopolitical uncertainty and did not have a material impact on forex market dynamics.
The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. in case EUR/USD declines below the 1.1510 level, it will head towards the next support at 1.1435 – 1.1450. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
GBP/USD Pulls Back From Weekly Highs GBP/USD 120826 4h Chart GBP/USD moved away from session highs as traders reacted to U.S. CPI report. It looks that some traders hoped that U.S. inflation numbers would be lower than analyst estimates.
In case GBP/USD manages to settle below the 1.3500 level, it will head towards the support level at 1.3465 – 1.3480. A move below the 1.3465 level will push GBP/USD towards the next support, which is located in the 1.3335 – 1.3350 range.
On the upside, GBP/USD needs to settle above the resistance at 1.3550 – 1.3565 to have a chance to gain upside momentum in the near term.
USD/CAD Rebounds From Multi-Week Lows USD/CAD 120826 4h Chart USD/CAD attempts to rebound despite rising precious metals markets. Gold settled above the $4400 level, while silver made an attempt to settle above $66.00. Other commodity-related currencies were mixed in today’s trading session.
If USD/CAD settles above the 1.3950 level, it will head towards the 50 MA at 1.3995. A move above the 50 MA will push USD/CAD towards the resistance level at 1.4010 – 1.4025.
On the support side, USD/CAD needs to settle back below the 1.3920 level to gain downside momentum in the near term. In this case, USD/CAD will head towards the support at 1.3825 – 1.3840.
USD/JPY Moves Back Towards The 159.50 Level USD/JPY 120826 4h Chart USD/JPY gains some ground despite the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.19% level, while the yield of 10-year Treasuries settled below 4.68%.
The nearest resistance level for USD/JPY is located in the 159.50 – 160.00 range. A successful test of this level will open the way to the test of the next resistance at 161.50 – 162.00. It remains to be seen whether BoJ is ready to defend the Japanese yen in case USD/JPY attempts to settle above the 162.00 level.
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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.
It is increasingly possible that the recent correction in metals has ended following the strong rebound in miners, although it is still too early to confirm. We ideally need to see five waves higher from the lows, while so far we have only identified three. The current price action could be developing into the final stages of wave C or wave 3, followed by a wave 4 correction and another wave 5 higher, which would provide stronger confirmation of a bullish reversal. However, any strong and impulsive decline from current levels would suggest that the correction is still underway.
GoldGold remains in recovery mode and is now testing previous highs. The price action is increasingly suggesting wave (3) rather than wave (C), although the wave (C) scenario should still be considered.
Gold could still be completing wave 5 of a lower-degree impulse, so the next decline should provide more clarity. If we see a slow, choppy and overlapping pullback toward the 4357–4300 support area, it would ideally represent wave (4) of an ongoing five-wave bullish impulse. Such a structure would also provide confirmation of a bullish reversal on the higher time frames.
XAUUSD(gold) 1H ChartOn the other hand, a strong and impulsive five-wave decline below 4200 would suggest that wave (C) of the larger ABC correction has completed, keeping the bearish scenario in control.
SilverSilver also remains in recovery mode, with the current structure increasingly favoring wave 3 rather than wave C, as price has already extended into the Fibonacci cluster target area for wave 3.
The broader risk-on environment, supported by bullish stocks and a weaker US Dollar, could be contributing to a larger bullish reversal in metals. In the short term, Silver may still be advancing within subwave “v” of a lower-degree impulse.
XAGUSD(silver) 1H ChartHowever, traders should watch for a potential slowdown around 67.00, where a wave 4 correction toward the 64.00–63.00 support zone could develop before another move higher.
Risk-On Environment Supports MetalsThe broader market backdrop remains important. Stocks are still bullish, and this strong risk-on environment is increasingly supporting metals as well. Further gains in equities, combined with additional weakness in the US Dollar, could allow Gold and Silver to extend their recoveries.
Treasuries could also be approaching a potential temporary support within the final leg of a diagonal formation. If that support holds and Treasuries rebound, it could provide another supportive factor for metals.
For now, the key is to monitor the next corrective pullback. A slow and overlapping decline would favor a bullish continuation, while a strong impulsive selloff would warn that the larger correction is not yet finished.
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Silver (XAG/USD) accelerates its advance on Wednesday and trades around $66.00 at the time of writing, up 2.18% on the day. The white metal benefits from a decline in the US Dollar (USD) and US Treasury yields following the release of the latest United States (US) inflation data, while geopolitical uncertainty continues to support safe-haven demand.
The US Consumer Price Index (CPI) rose 0.1% MoM in July after falling 0.4% in June, while the annual rate eased to 3.4% from 3.5%. Both figures come in line with market expectations. Core inflation, which excludes volatile food and energy prices, increased 0.2% MoM and 2.5% YoY, also matching forecasts.
The market reaction favors Silver. The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, falls slightly following the release. US Treasury yields also decline, with the 2-year yield falling by around four basis points to trade near 4.18%.
Lower bond yields tend to support non-yielding precious metals such as Silver by reducing their opportunity cost. At the same time, a weaker US Dollar makes the Dollar-denominated metal cheaper for investors using other currencies.
The inflation figures, however, do not radically alter the monetary policy outlook. With headline inflation still above the Federal Reserve’s (Fed) 2% target and elevated Oil prices keeping upside inflation risks alive, investors continue to expect monetary policy to remain restrictive. Nevertheless, the chance of a September rate hike falls to around 38% from 44% before the release, according to the CME FedWatch Tool.
The geopolitical backdrop provides additional support to Silver. According to Reuters, a senior Iranian source says that no discussions are currently taking place over an extension of the ceasefire between Iran and the United States. The source also claims that Washington violated the interim agreement 48 hours after it was reached before withdrawing from it a few days later.
These tensions maintain uncertainty over a lasting normalization of the situation in the Middle East and the reopening of the Strait of Hormuz. The resulting elevated Oil prices remain a potential source of inflationary pressure while simultaneously supporting demand for safe-haven assets. This combination of a slightly weaker US Dollar, lower US Treasury yields and persistent geopolitical risk allows Silver to maintain strong bullish momentum on Wednesday.
XAG/USD technical analysisIn the one-hour chart, XAG/USD trades at $66.03, retaining a bullish near-term bias as it holds above the 100-hour simple moving average (SMA) at $64.04 and the 200-hour SMA at $61.68. The metal also remains above an upwards-sloping trend-line support, now coming in around $65.57, which reinforces a constructive structure after the latest advance. Momentum is positive but not extreme, with the 14-period Relative Strength Index (RSI) hovering near 59, suggesting steady buying interest without yet reaching overbought territory.
On the downside, immediate support is located at the trend-line near $65.57, ahead of a deeper cushion at the 100-hour SMA around $64.04 and the 200-hour SMA at $61.68. On the topside, initial resistance is seen at the horizontal barrier at $66.80; a sustained break above this cap would open the way for further gains, while failure to clear it could trigger consolidation back toward the nearby trend-line support.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Key Points:The mid-year correction is over: Gold, silver, platinum, and miners all formed major lows, setting the stage for the next leg of the precious metals bull market.The biggest gains may still be ahead: We expect much higher prices into 2030–2031, with the most explosive phase of the bull market likely to occur during its final 12 months.Miners are poised to take the lead: After lagging during the first half of the bull market, gold and silver miners are showing signs of a major shift, with new all-time highs potentially arriving well before the metals themselves.
In this article:Gold
+1.13%
Gold ForecastSilver
+1.67%
Silver ForecastGold Big Picture Another quick reminder of where I believe we are in the larger bull trend: the 2026 pullback is only the halfway point of a 10-year rally that should take gold well above $10,000 by the end of the decade. Just like in 2006, I expect the recent lows to hold throughout the remainder of the bull market. In other words, I believe we just saw a major bottom.
Gold Gold bottomed mid-year, almost exactly as forecasted, and the uptrend is now resuming. As I noted in mid-July, expect the uptrend to begin gradually, with periods of sideways churn along the way. Medium term, we see prices trading above $7,000 in the second half of next year, which should be very good for miners.
Silver Silver likely bottomed in mid-July, as forecasted, but I’ll feel more confident once we see price break decisively above the cycle downtrend line, which could take another week or two. We expect silver to make new all-time highs alongside gold next year, but the real fireworks likely won’t arrive until the final stage of the bull market, which we expect around 2030–2031.
Platinum Platinum turned higher after reaching our mid-year target and is now very close to confirming a major bottom. It too should reach new all-time highs next year, but its greatest gains may not arrive until the final 12 months of the bull market. That’s when we expect platinum to return to parity with gold.
GDX Miners look strong after forming a major bottom mid-year, as forecasted. During the first half of the bull market, miners lagged, but we believe that is now changing. We expect miners to make new all-time highs well ahead of gold. I’ll be monitoring the GDX-to-gold ratio for confirmation of this shift in leadership.
GDXJ Gold juniors surged more than 30% after forming a major bottom, almost exactly as forecasted. Prices are overbought in the near term, so a period of consolidation wouldn’t be surprising. Medium term, we expect prices to make new all-time highs well ahead of gold as miners finally begin to outperform.
SILJ Silver juniors have closed decisively above the cycle downtrend line, confirming a major bottom at $23.06. If I’m correct that miners are set to outperform going forward, prices should make new highs well ahead of silver.
GDX:GOLD Ratio If I’m right about miners outperforming, I’d expect to see the GDX-to-gold ratio decisively break above 0.022 in the coming months.
Bitcoin We have a little over two months remaining in the bear cycle before I expect a 4-year low, with mid-October as my best estimate. The final washout below $57,000 could take about a month, so I’d like to see the breakdown begin sometime between now and mid-September.
I believe Bitcoin needs to fall below $50,000 to truly flush out sentiment and complete the cycle, with a likely target around $40,000, give or take 5%.
In Closing While many well-known analysts were calling for new all-time highs in precious metals back in April, we cautioned members to expect a deeper correction into a mid-year low. Prices bottomed almost exactly as we laid out to subscribers, and the next major uptrend has now begun.
We expect much higher prices into 2030/2031, with the strongest gains likely to occur during the final 12 months of the bull market. Miners should outperform from here, and pullbacks should be considered opportunities. For more price predictions and daily market commentary, consider subscribing at www.GoldPredict.com.
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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle that will begin to unravel in 2020.
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Scotiabank strategists Shaun Osborne and Eric Theoret report the British Pound (GBP) is posting fractional gains versus the US Dollar (USD) and outperforming G10 peers as improving sentiment supports price action. They point to Thursday’s United Kingdom (UK) data, including Q2 Gross Domestic Product (GDP) and production figures, as key. Short-term technicals are bullish, with RSI at fresh highs, upside targets in the mid-1.35s to mid-1.36s, and support near 1.3400 and a near-term range of 1.3480–1.3580.
Pound leads G10 with bullish technicals"The pound is showing fractional gains vs. the USD and outperforming all of the G10 currencies in mixed trade."
"Fundamental releases have been limited and we continue to highlight the importance of Thursday’s data that include the preliminary (2nd) Q2 GDP figures, and monthly trade and industrial production data."
"The next upside target is the mid-July high in the mid-1.35s and we also note the May 1 peak in the mid-1.36s."
"Support is expected at 1.3400. We look to a near-term range bound between 1.3480 and 1.3580."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius
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The in-line US CPI data leaves no new catalysts for gold and the EUR/USD, leaving the previous fundamental influences intact. Current Setup The latest US CPI report did not deliver a major surprise for financial markets, with both the headline and core inflation prints meeting expectations. The consensus forecasts for the July US CPI had been for headline CPI to come in at 3.4% YoY (prior 3.5%), while the core CPI was expected at 2.5% year-on-year (prior 2.6%).
The in-line report means that there is no material need to change the current Federal Reserve policy narrative. Fed policymaker Beth Hammack had indicated on Monday that raising rates once would do nothing for the US economy, adding that any benefits from a hawkish tilt has to come from multiple rate hikes. With the US CPI not doing much to alter expectations, investors now have to focus on next month’s employment and inflation data, as well as the upcoming business activity indicators.
For both gold and the EUR/USD, the in-line prints mean that there is no material catalyst to cause a decisive USD repricing.
Gold: CPI removes the immediate inflation shock
Gold is up by 1.52% on the day, maintaining the week’s trajectory pre-CPI. With no pressure on US bond yields, gold will keep trading within the context of the geopolitical de-escalation narrative as the greenback keeps reeling from last week’s dismal NFP data.
Gold remains highly sensitive to:
US real yields Fed expectations US dollar direction Geopolitical risk Gold: Technical Outlook The bias on gold remains cautiously bullish. The CPI data leaves the yellow metal’s direction subject to US bond yields, geopolitics, and USD sentiment.
4452 remains the next upside target, and if this barrier is breached, a move towards the 4509 high of 4 June 2026 cannot be ruled out.
Fig 1: Gold chart (4-hr) showing key price levels post-CPI (snapshot: 12 August 2026) This upside move is only invalidated of the 4382 support is breached via profit-taking or a retracement. In this case, we will see support levels at 4314 (10 August low) and 4213 (22 June 2026 high) forming the next downside targets.
EUR/USD: no fresh catalyst after limited CPI surprise The pair traded around 1.15 just before the release of the CPI data, as traders sought for evidence that US inflation was cooling enough to warrant a more dovish Fed. The in-line result means there was no major catalyst either to the upside or downside, as there was nothing on which to make any changes to the Fed outlook.
That leaves the EUR/USD more sensitive to the following drivers:
Treasury-yield direction Fed/ECB communication Eurozone economic data ECB expectations Broader US Dollar sentiment The bias for EUR/USD remains constructive on the back of dollar weakness from last week’s dismal NFP, as well as a lack of safe-haven appeal as the Middle East geopolitical situation remains in de-escalation.
If the core inflation print came in much higher than expected, the markets would have repriced Fed expectations towards a more restrictive, hawkish end of the spectrum. This would have been deemed USD-positive.
But this was not the case.
Consequently, the Euro remains on course to consolidate its recent gains versus the greenback. But the lack of a downside surprise also means that the Euro would have to look elsewhere for a bullish catalyst. In the near term, the most likely source would be geopolitics and US bond yields.
EUR/USD Technical Outlook The ascending trendline remains the dynamic support for recent price action. A bounce from here will have to test and break past the 1.1577 (7 August high) and 1.1621 (15 June high) resistance levels to continue the uptrend towards the 1.1671 resistance formed by the 29 May 2026 high.
Fig 2: EUR/USD (4-hr chart) showing key price levels post-CPI (snapshot: 12 August 2026) On the flip side, a breakdown of the trendline makes the 1.1506 support (8 June/11 June lows) available as the next downside target. If this barrier is breached, the next downside target lies at 1.1462 the 3/14 July highs).
Good Day... And a Wonderful Wednesday to you! What the heck is going on with the dollar? It seemed that after it closed at the same level in the BBDXY as it did the previous day (1,203) that the currency traders had gone home already 3 days early... I guess, when I check the overnight markets, in a minute, something will have changed... My beloved Cardinals won last night VS the Phillies 2-0... The bullpen tried to give it away, but then they had a savior... My second favorite song by Chicago is playing to greet me this morning: Beginnings...
Well, I already told you the dollar didn't move yesterday and stayed steady Eddie with the BBDXY at 1,203... Gold couldn't help itself yesterday as the SPTs took a pound of flesh, and Gold ended the day down, $22. And Silver saw the same SPTs doing their thing pushing Silver down $1.04... Gold closed at $4,369, and Silver at $64.81
The price of Oil continued to rise as the war wages on... Oil was up $2 and change and ended the day at $82.91.... The 10-year Treasury saw its yield bump higher again and ended the day at 4.69% yield...
In the overnight markets last night.... there was some dollar selling overnight with the BBXY down 1 index point to start the day. The BBDXY is 1,202 and looking very shaky.. The STUPID CPI is getting ready to print and most folks that look at this all the time seem to think that we'll see the STUPID CPI soften in July... That would put the rate cut folks on notice and give some OOMPH to the dollar... We'll see, eh?
Gold/Silver are back on the rally horse this morning. Gold is up $45 and Silver is up $1.61... The metals traders are of a different opinion on the STUPID CPI... I always seemed to pin my flag to the Currency Traders...
The price of Oil bumped higher to trade with an $83 handle this morning, and the 10-year is seeing some more yield control by the Fed Heads, and this has brought the yield on the bond to 4.66%... why can't they just leave this bond alone to trade on its own devices? Well, I know why and so do you... The Fed Heads are attempting to keep rates in the ballpark so that the servicing costs (interest payments) don't go through the roof...
The Chinese Gold Association told us yesterday that Gold consumption rose 1.23% for the 1st half of this year. The association noted that the country's gold consumption patterns were in flux, as the combination of sharp price fluctuations and a new policy toward taxation on Gold kept Gold from really moving past its previous record for consumption.
I sure wish the Chinese would clean on just exactly how much Gold they hold... The Gold Co's listing for holding of Gold for the Chinese can't possibly be correct, and it's way too low.... I guess one day, when push comes to shove and the leaders of countries sit down and show what they own, then we'll know... But that's a few years from now, the U.S. is not near ready to admit that they're broke and need to sit down....
You know if you ran your household finances like the U.S. Gov't does, you would be in a small cell but grateful for 3 meals a day! Yes, the good news is that tax receipts are 3.576% higher YTD in 2026, the bad news is that have spent 3.74% more than we took in, resulting in a deficit of $1.79 Trillion YTD.
And in case you were wondering on January 8, 1835, President Andrew Jackson paid off the entire national debt, the only time the United States federal government has reported no national debt. So, it was done once.... of course, the total wasn't what it is now, but then we could have done something to curb the growth back in the early 2000's when the debt was only $7 Trillion... and to think, I was yelling from the rooftops then that this was crazy!
Moving on... you know, we're still in the dog days of
August/summer... and this year, we've seen more volatility in markets than we've ever seen previously.... And that scares me every morning when I sit down and look what to write about... The volatility is all over the board, stocks, bonds, currencies, metals, energy none have been spared....
The U.S. Data Cupboard has the STUPID CPI for July for our viewing pleasure this morning... And that' it... The Data Cupboard this week has left us wanting but the data just isn't there...
To recap... The dollar was stuck in the mud yesterday and only moved 1 index point overnight... China's Gold consumption is strong even with the very high Gold prices earlier this year... And there are conflicting thoughts on where the STUPID CPI will print today...
For What It's Worth... I saw this headline and read the artical and immediately thought it was FWIW worthy...
Here's your snippet: "The number of adults living with their parents hit a new record in 2025, with 25.2 million adults ages 25 to 35 residing with their parents. That's almost one in three young people who are still living at home.
Unfortunately, in some cases, these multigenerational living arrangements don't work out.
Let's pretend, for example, that Gabriella's son Juan has moved back in with her. He's 27 and works as an office manager, but he's refused to pay his share of the household bills. Gabriella is frustrated that Juan isn't contributing to expenses, and she's not sure if she should make Juan move out or how to handle the situation.
So, what should she do?
Understand the reasons for the non-payment.
The first thing Gabriella needs to do is to figure out why Juan isn't paying rent.
"What parents often forget is that the refusal to help out around the house or pay rent is usually just shame combined with some level of learned helplessness in a kid who may have held jobs before but never fully supported themselves," Hayley Caddes, cofounder of Not Therapy, a coaching company for neurodivergent and stuck 18- to 29-year-olds, told Moneywise."
Chuck Again... well, I used this to illustrate how businesses are not hiring, they're not firing either.... and that causes snagnation!
Market Prices 8/12/2026: American Style: A$ .7070, kiwi .5866, C$ .7177, euro 1.1542, sterling 1.3523, Swiss $1.2321, European Style: rand 16.1426, krone 9.4775, SEK 9.5299, forint 315.42, zloty 3.7292, koruna 21.0019, RUB 83.04, yen 159.09, sing 1.2790, HKD 7.8467, INR 95.33, China 6.7447, peso 17.06, BRL 5.1619, BBDXY 1,202, Dollar Index 99.81, Oil $83.61, 10-year 4.66%, Silver $66.48, Platinum $1,802.00, Palladium $1,426.00, Copper $6.68, and Gold.... $4,414.
That's It for Today... A nice win last night for my beloved Cardinals and keep their hope for the playoffs at fumes and vapors.... I told my two boys on Sunday that this would be a tough and telling series with the Phillies, and it has turned out just that.. I got 6.5 hours of uninterrupted sleep last night after not taking a nap yesterday, so maybe I can get back to a normal sleep pattern.... The Best Beach Boys son ever takes us to the finish line today: God Only Knows... I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!
Resilience in Gold Ultimately, this is a market that might be a little bit stretched. We’ve had a couple of shooting stars over the course of the last week or so, but we continue to find buyers regardless. The gold market has been reviving itself recently, and the momentum seems ot be picking up as we go along. The CPI numbers could be the next big mover, depending on the result.
So, with that being the case, it is a market that has shown pretty significant resilience, and it’s likely that traders are noticing each pullback as possible value. But that is how the price action has been behaving.
Ultimately, this is a market that looks as if it’s trying to change its overall trend and is starting to accelerate. That being said, it is also likely that we will continue to see a lot of chaos coming out of the Persian Gulf, and this could paly a part as well.
The $70 level above is an area that previously had been both support and resistance, so it’s an area that could very well end up being a target or at least an area of interest. Short-term pullbacks will be looked at as potential buying opportunities by those who have been bullish over the last couple of weeks.
Fed Expectations and Technical Levels We’ve recently broken out of a fairly significant consolidation area with the $60 level offering a little bit of a floor. Ultimately, this is a market that tends to be very sensitive to interest rates, so we’ll have to watch that to get a read on any attempt at that correlation coming back to the situation, as well as the US dollar. If it strengthens, it sometimes works against the value of silver.
Traders are still trying to figure out what to do about the idea of the Federal Reserve and rate hikes later this year, and that is being reflected in the price of silver as well. This is a market that I like longer term, but I also am aware of the influence from external places that continue to be a major issue here. I am watching the US dollar and the US interest rates for clues in this market.
Daily Spot Silver (XAG/USD) Spot silver is currently hovering near the midpoint between the 50-day moving average at $61.61 and the 200-day moving average at $71.38. The midpoint is $66.495. Trader reaction to this level should set the tone on Wednesday.
A sustained move over $66.495 will indicate strong buying. If this creates enough upside momentum, spot silver could test the 200-day MA.
A sustained move under $66.495 will signal the presence of sellers. If this creates enough downside momentum, then look for a possible near-term test of the 50-day MA at $61.61 and the 50% level at $60.835.
Tuesday’s Rejection Proved the Rate Trade Still Runs This Market Silver reached $66.48 Tuesday and gave back more than $1.50 by the afternoon. Oil was climbing, September hike odds pushed from 44% to 48%, and buyers walked away from a metal that punishes you for being long when the Fed argument shifts. That sell-off was fast and it told traders exactly what silver cares about right now.
Wednesday’s lower yields have reversed the pressure. The payrolls trade that broke silver higher last week has not disappeared. It went quiet for a session while crude and the bond market pushed back, and now it is reasserting itself ahead of the inflation data.
September hike odds near 50% leave the market split down the middle. Silver moved more than $1.50 in a single session on a small shift in rate expectations. The CPI print has the potential to move it further.
Oil Near $90 Keeps the Inflation Argument Alive Brent crude near $90 with the Strait of Hormuz still restricted and Houthi attacks pressuring the alternative routes is the reason silver cannot hold rallies on lower yields alone. The conflict is not driving the metal. The fuel cost coming out of the conflict is, and that cost feeds straight into the rate debate silver trades on.
Silver rallied Tuesday morning while oil rallied. Silver sold off Tuesday afternoon while oil kept rallying. Gold held steadier near $4,379 through the same session. Silver underperforming gold on a day with active Middle East risk confirms the market is trading the inflation consequence, not the geopolitical bid.
CPI Decides Whether the Morning Bid Survives Economists expect headline CPI to rise 0.1% for July with the annual rate at 3.4%. Core is expected at 0.2% monthly and 2.5% year-over-year. Silver is already positioned for that number to come in contained, which is why yields are lower and buyers are back this morning.
The risk is that the data does not cooperate. Three policymakers voted for a hike at the last meeting and oil near $90 has been doing their work for them all week. Producer prices follow Thursday, so the inflation argument extends beyond one report, but Wednesday’s print sets the tone and silver has shown it can travel fast in either direction once the number hits.
What to Watch Silver is higher because yields backed off and buyers stepped back into the rate-relief trade before CPI. The rebound puts the market within range of Tuesday’s $66.48 high, but oil near $90 and an unresolved Hormuz conflict keep the inflation side of the argument alive. Wednesday’s number decides whether the payrolls-driven bid that started last week gets reinforced or whether the rate hawks get the evidence they need to push back.
The midpoint between the 50-day and 200-day moving averages at $66.495 is the level that defines direction. Silver stalled right at it Tuesday and is pressing toward it again Wednesday. A sustained move above it targets the 200-day. A failure keeps sellers pointed toward the 50-day and the support below it.
Key takeaways Sterling stays firm: GBP/USD remains in a short-term uptrend above 1.3479 after breaking above its medium-term descending trendline post-NFP. US CPI is the key catalyst: A hotter-than-expected core CPI could revive Fed-hike bets and pressure GBP/USD, while softer inflation may extend sterling’s rally. 1.3479 is pivotal support: Holding above it keeps 1.3547, 1.3580 and 1.3643 in focus; a break below exposes 1.3440 and 1.3400. The sterling pound has been one of the best-performing major currencies against the US dollar in the past five trading sessions.
The USD/GBP cross rate has tumbled by 0.38% (a 0.38% gain for GBP against USD) at the time of writing, slightly above USD/CAD, which recorded a 0.56% loss over the same period (see Fig. 1).
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Macro divers: inflation trajectory versus Fed pricing Market sentiment remains closely tied to incoming inflation data as investors gauge whether the Federal Reserve will resume rate hikes later this year. Following recent mixed labour market signals, pricing for the September FOMC decision sits close to a coin toss (based on latest data from the CME FedWatch tool, the Fed funds futures market is only pricing in a 48.1% chance of a 25-bps hike, down from around 70% chance a week ago).
Hot CPI scenario (Core YoY > 2.5%): A surprise to the upside, driven by core goods price pass-throughs, would likely trigger a hawkish repricing in US short-term Treasury yields. This would provide a strong tailwind for the US Dollar Index, exposing GBP/USD to a rapid downward repricing toward the 1.3400 psychological level (also near the 20- and 200-day moving averages). Soft CPI scenario (Core YoY ≤ 2.5%): Confirmation of easing services inflation and softer shelter costs would give the Fed breathing room. A softer dollar would reinforce risk appetite, pushing GBP/USD above near-term hurdles toward multi-month highs. Let’s now decipher the near-term (1 to 3 days) outlook on the GBP/USD from a technical analysis perspective
Oscillating within minor ascending channel after a bullish breakout ex-post NFB Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
The price action of GBP/USD has cleared a significant medium-term hurdle after staging a bullish breakout ex-post the US NFP release (a major risk event on Friday, 7 August 2026), above its former descending trendline resistance from the 28 January 2026 high/52-week high.
In addition, it continues to oscillate within a minor ascending channel in place since the 29 July 2026 low of 1.3279, with a current bullish momentum reading on the hourly RSI (see Fig. 2).
These observations suggest that GBP/USD is oscillating within a short- to medium-term uptrend.
Watch the 1.3479 key short-term pivotal support to maintain a near-term bullish bias for the next intermediate resistances to come in at 1.3547, 1.3580 and 1.3643 (also a Fibonacci extension).
On the flip side, a failure to hold and an hourly close below 1.3479 invalidates the minor bullish impulsive up-move sequence, triggering a minor corrective decline towards the next intermediate supports at 1.3440 and 1.3400.
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What is the distribution of forecasts for the US CPI?What to expect from the US CPI report later today?Iran reportedly maintains that there are no discussions over ceasefire extension as the pact doesn't exist anymoreUSD/JPY stalls ahead of a key US CPI report; BoJ expected to raise rates in SeptemberBitcoin Forecast Today: Why BTC Is Struggling Below $64,000Fed policymaker Collins says would back September rate hike if data points to that directionGermany inflation confirmed to accelerate in July but core prices remain steadierItaly inflation eases just a touch in July, core price keep steady thoughMarkets:
USD flat, NZD lags on the dayWTI crude flat at $83.18Gold up 1.1% to $4,413European indices slightly higher; S&P 500 futures up 0.3%US 10-year yields down 2.4 bps to 4.66%Bitcoin up 0.8% to $64,188The countdown continues ahead of the main event for markets this week, that being the US CPI report for July.
We're less than an hour away now from that, so it is finally about time to see some action in markets after a more tentative setup in the past few days.
In European trading today, there was an early speculative report that the US and Iran would extend the supposed ceasefire deal from the end of June. But as we all know, that agreement has been broken since last month already and Iran was quick to reaffirm that by saying that there is nothing to extend when the pact "does not even exist".
WTI crude fell earlier to $82.50 but is now trading back flat on the day at around $83.18.
Besides that, there wasn't too much other action apart from precious metals climbing further today. Gold is up 1.1% to $4,413 and silver up $2.5% to $66.29 on the day. However, the next move all rides on the US inflation numbers - the same as it would be for broader markets.
The US dollar is not up to much, keeping little changed across the board. USD/JPY is down just 0.1% to 159.06 with traders not really taking the recovery bounce too far in wanting to test the 160 threshold.
Elsewhere, European indices are holding slightly higher alongside US futures while bond yields are down slightly on the day. Overall, the market mood is relatively tentative in waiting on the US CPI report to come.
Will we see any surprises to get markets going in the second half of the week? Or will it be a more benign report, thus forcing the wait to extend to Jackson Hole instead?
GBP/JPY holds firm on Wednesday, trading within Monday’s range as the Japanese Yen (JPY) stays on the back foot, having given up nearly half of the gains triggered by the joint US-Japan intervention. At the time of writing, the cross trades around 215.12, virtually unchanged on the day.
However, intervention risk remains, as both Japan and the US have signalled that they could step into the currency market again if needed. Strategists at BNY Mellon characterise the Yen as remaining "an intervention/rates trade," with "higher oil prices and US Treasury yields" still acting as clear headwinds for Japan’s energy‑importing economy.
They caution that "intervention risk may deter fresh JPY shorts," but add that "persistent fiscal concerns leave little fundamental case for sustained yen appreciation" in the current environment.
Technical analysis
The intervention-driven sell-off pushed GBP/JPY below the 50-day, 100-day and 200-day Simple Moving Averages (SMAs) and briefly below the 210.00 psychological mark. Buyers stepped in around that level and lifted the cross back above the 200-day and 100-day SMAs.
On the daily chart, GBP/JPY holds just above the 100-day SMA near 214.50, while the 50-day SMA around 215.50 caps immediate gains. This leaves the near-term bias neutral as the pair trades between these key averages.
Momentum signals are mixed, with the Relative Strength Index (RSI) hovering near a neutral 49 and the Moving Average Convergence Divergence (MACD) indicator still slightly negative, suggesting that directional conviction is lacking despite a moderately strong Average Directional Index (ADX) reading around 28.
On the downside, a break below the 100-day SMA would expose the 200-day SMA near 212. A decisive move below this level could signal a deeper correction. On the upside, a daily close above the 50-day SMA could open the door to a continuation of the bullish move.
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.
USDEURGBPJPYCADAUDNZDCHFUSD0.01%-0.11%-0.14%0.05%-0.09%0.27%0.11%EUR-0.01%-0.12%-0.15%0.03%-0.14%0.24%0.09%GBP0.11%0.12%-0.06%0.14%-0.02%0.35%0.21%JPY0.14%0.15%0.06%0.18%0.03%0.37%0.24%CAD-0.05%-0.03%-0.14%-0.18%-0.16%0.21%0.05%AUD0.09%0.14%0.02%-0.03%0.16%0.36%0.23%NZD-0.27%-0.24%-0.35%-0.37%-0.21%-0.36%-0.13%CHF-0.11%-0.09%-0.21%-0.24%-0.05%-0.23%0.13% 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).
The Euro (EUR) nurses marginal gains against the US Dollar (USD) on Wednesday, with the EUR/USD pair flattening just below the 1.1550 level during the European trading session. FX volatility remains at unusually low levels as investors await the release of US Consumer Price Index (CPI) data to place directional bets on the USD.
Growing concerns about the fate of the US-Iran peace process are weighing on the Euro on Wednesday, as reports of attacks on vessels attempting to cross the Straits of Hormuz and Bab el-Mandeb on Tuesday have cast further doubt about the resumption of free sea traffic in the Gulf region.
In the Eurozone, the German Harmonised Index of Consumer Prices (HICP) confirmed preliminary figures pointing to an acceleration to a 2.8% year-over-year rate in July, from 2.4% in June, as energy inflation jumped to 7.3%, from 2.7% in the previous month. The positive impact on the Euro, however, has been short-lived.
US Dollar rallies, on the other hand, remain subdued, with investors awaiting the release of July's CPI figures for a better assessment of the Federal Reserve's (Fed) interest rate plans. The Market consensus anticipates a moderate slowdown in July’s consumer prices, with the yearly CPI growth easing to a 3.4% rate from 3.5% in June, with core inflation slowing down to a 2.5% year-on-year reading from the 2.6% rate posted in the previous month.
Technical Analysis: EUR/USD wavers in range lacking a clear bias
EUR/USD trades at 1.1535, holding in a neutral range between nearby structural levels. The 4-hour Relative Strength Index (14), around 48, suggests balanced momentum, while the Moving Average Convergence Divergence (MACD) remains slightly negative, altogether highlighting a lack of clear trend.
Bullish attempts were capped at 1.1580 last week, below the Mid-June highs at the 1.1620 area and the May 29 high, at 1.1685. On the downside, the 1.1500 area held bears last week ahead of a previous resistance area around 1.1480. A confirmation below these levels brings the late-July lows, at the 1.1355 area, back into focus.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.00%-0.12%-0.13%0.05%-0.10%0.23%0.10%EUR-0.01%-0.12%-0.15%0.04%-0.14%0.23%0.09%GBP0.12%0.12%-0.04%0.15%-0.04%0.35%0.21%JPY0.13%0.15%0.04%0.19%0.02%0.36%0.24%CAD-0.05%-0.04%-0.15%-0.19%-0.17%0.19%0.05%AUD0.10%0.14%0.04%-0.02%0.17%0.36%0.26%NZD-0.23%-0.23%-0.35%-0.36%-0.19%-0.36%-0.12%CHF-0.10%-0.09%-0.21%-0.24%-0.05%-0.26%0.12% 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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Key takeaways Sterling stays firm: GBP/USD remains in a short-term uptrend above 1.3479 after breaking above its medium-term descending trendline post-NFP.US CPI is the key catalyst: A hotter-than-expected core CPI could revive Fed-hike bets and pressure GBP/USD, while softer inflation may extend sterling’s rally.1.3479 is pivotal support: Holding above it keeps 1.3547, 1.3580 and 1.3643 in focus; a break below exposes 1.3440 and 1.3400. The sterling pound has been one of the best-performing major currencies against the US dollar in the past five trading sessions.
The USD/GBP cross rate has tumbled by 0.38% (a 0.38% gain for GBP against USD) at the time of writing, slightly above USD/CAD, which recorded a 0.56% loss over the same period (see Fig. 1).
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Macro divers: inflation trajectory versus Fed pricing Market sentiment remains closely tied to incoming inflation data as investors gauge whether the Federal Reserve will resume rate hikes later this year. Following recent mixed labour market signals, pricing for the September FOMC decision sits close to a coin toss (based on latest data from the CME FedWatch tool, the Fed funds futures market is only pricing in a 48.1% chance of a 25-bps hike, down from around 70% chance a week ago).
Hot CPI scenario (Core YoY > 2.5%): A surprise to the upside, driven by core goods price pass-throughs, would likely trigger a hawkish repricing in US short-term Treasury yields. This would provide a strong tailwind for the US Dollar Index, exposing GBP/USD to a rapid downward repricing toward the 1.3400 psychological level (also near the 20- and 200-day moving averages).Soft CPI scenario (Core YoY ≤ 2.5%): Confirmation of easing services inflation and softer shelter costs would give the Fed breathing room. A softer dollar would reinforce risk appetite, pushing GBP/USD above near-term hurdles toward multi-month highs.Let’s now decipher the near-term (1 to 3 days) outlook on the GBP/USD from a technical analysis perspective
Oscillating within minor ascending channel after a bullish breakout ex-post NFB
Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. The price action of GBP/USD has cleared a significant medium-term hurdle after staging a bullish breakout ex-post the US NFP release (a major risk event on Friday, 7 August 2026), above its former descending trendline resistance from the 28 January 2026 high/52-week high.
In addition, it continues to oscillate within a minor ascending channel in place since the 29 July 2026 low of 1.3279, with a current bullish momentum reading on the hourly RSI (see Fig. 2).
These observations suggest that GBP/USD is oscillating within a short- to medium-term uptrend.
Watch the 1.3479 key short-term pivotal support to maintain a near-term bullish bias for the next intermediate resistances to come in at 1.3547, 1.3580 and 1.3643 (also a Fibonacci extension).
On the flip side, a failure to hold and an hourly close below 1.3479 invalidates the minor bullish impulsive up-move sequence, triggering a minor corrective decline towards the next intermediate supports at 1.3440 and 1.3400.
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
At the time of writing, the EUR/USD was struggling to find a clear direction. Hardly a surprise, truth be told, ahead of such an important data release. Investors are weighing a renewed surge in crude oil prices in recent days against the prospect of another important US inflation reading. While market volatility remains subdued, the combination of higher energy prices and elevated bond yields is becoming increasingly difficult to ignore. For the EUR/USD forecast to improve, energy prices will need to fall and rapidly so. This looks unlikely. The upcoming CPI report could provide some short term volatility, but it remains to be seen how much of a change there will be in the September rate cut odds, currently a coin toss.
Crude oil drives sentiment Looking at equity markets, investors remain remarkably unmoved by recent gains in oil. For me, the concern is that oil prices could continue rising if there is no meaningful progress between the US and Iran. That could reignite stagflation concerns and lead to unwanted policy tightening. The Strait of Hormuz remains effectively closed. And the longer it remains closed the higher oil prices are likely to go. While reports of progress in discussions involving Oman and Iran have been welcomed, Iran has also indicated that the strait will remain shut until its conditions are met by the US.
For the EUR/USD forecast, this is a tricky backdrop. The eurozone is heavily dependent on imported energy, meaning a sustained rise in oil and gas prices could worsen the region’s inflation outlook while weighing on economic growth. That creates a potential headwind for the euro.
Meanwhile, US crude inventories provide another reason for caution. Stockpiles have fallen to their lowest level in more than four decades, adding to concerns that supply shortages could amplify the impact of the geopolitical disruption. We will have some fresh inventories data due later today. Let’s see if there any more drawdowns.
CPI likely to move the dollar only temporarily US CPI remains the main scheduled event for markets today. The previous report surprised significantly to the downside, with headline inflation slowing to 3.5% from 4.2%.
Economists are expecting a more modest improvement this time. Headline CPI is forecast to rise 0.1% month-on-month, leaving annual inflation at 3.4%, while core CPI is expected to increase 0.2%, keeping the annual rate at 2.5%, down from 2.6% previously.
A softer-than-expected reading could reinforce expectations for a less hawkish Fed and put renewed pressure on the dollar. But if the inflation data is in line or stronger than expected, then the dollar can remain supported.
The dollar’s reaction to CPI may fade fast in any event, especially if the data does not deviate too much from expectations. A lot will depend on what happens to oil prices. If crude continues climbing, markets may start rebuilding expectations for tighter US monetary policy, even if the inflation data itself is relatively benign.
Bond yields are flashing a warning The other part of the equation is the bond market. Treasury yields have remained elevated as oil prices have risen, reflecting concerns that the energy shock could eventually feed into broader inflation.
So far, equity investors appear largely unconcerned. But if crude moves substantially higher from here, the combination of rising inflation expectations and higher yields could become increasingly uncomfortable for risk assets.
That would also create an additional headwind for the euro, particularly given the relatively lower interest-rate environment in the eurozone and the region’s exposure to imported energy.
EUR/USD levels to watch At the time of writing, the EUR/USD was trading just below 1.1550. The directional picture still looks uncertain. Volatility has remained remarkably low, partly reflecting the summer trading environment and partly the market’s wait-and-see approach ahead of CPI.
Source: TradingView.com Technically, the pair recently broke above a bearish trend line, but buyers have so far failed to generate meaningful follow-through. That is a sign of weakness.
Resistance begins around 1.1575, with the recent high at 1.1622 also important. The 200-day moving average is converging around that area, making a break above it a potentially significant bullish signal to watch out for in the coming days.
On the downside, initial support is located around 1.1500–1.1520. A break below that zone would expose 1.1470 and then 1.1410, with the recent lows around 1.1350 becoming the next major downside reference.
EUR/USD forecast summary For now, EUR/USD remains caught between a potentially softer US inflation backdrop and an increasingly uncomfortable energy story.
If CPI comes in cooler and oil prices stabilise, the euro could regain momentum. But if crude continues higher, bond yields follow, and US inflation proves sticky, the risks could quickly turn more negative.
Another key question is whether the EUR/USD can continue looking through higher energy prices — or whether the bond market eventually forces investors to reassess the risks they have so far largely ignored. All told, the EUR/USD forecast remains tilted slightly lower.
Gold (XAU/USD) rebounds on Wednesday after closing in negative territory on Tuesday for only the second time in six trading days. Traders now await the US Consumer Price Index (CPI) data, due at 12:30 GMT, to see whether the bullish momentum will continue or a reversal will take shape. At the time of writing, XAU/USD trades around $4,417, up 1.11% on the day.
US inflation is expected to pick up slightly on a monthly basis in July, with headline CPI rising 0.1% and core CPI increasing 0.2%. However, the annual rates are forecast to ease to 3.4% and 2.5%, respectively.
Rabobank’s RaboResearch Global Economics & Markets team cautions that the benign US CPI consensus is unfolding against a far more turbulent geopolitical backdrop. The bank highlights that “after four crew and two rescuers were killed in a Houthi Red Sea attack on a ship and the US struck another in the Gulf of Oman ‘trying to break its Iran blockade’; Iran said Hormuz will stay closed unless the US meets its over-reach conditions.”
Meanwhile, diplomatic efforts continue, with Pakistan’s Interior Minister Mohsin Naqvi meeting Iranian President Masoud Pezeshkian and Foreign Minister Abbas Araghchi in Tehran as Islamabad seeks to revive stalled peace talks between the US and Iran.
Still, there is no sign of an immediate agreement to reopen the Strait of Hormuz. West Texas Intermediate (WTI) trades around $82, holding near a one-and-a-half-week high. The US Energy Information Administration (EIA) also raised its 2026 average price forecast to $80.88 per barrel from $76.26.
With inflation running above the Federal Reserve’s (Fed) 2% target and higher Oil prices adding to upside risks, the CPI report will help traders assess the Fed’s interest-rate path, particularly ahead of the September meeting. According to the CME FedWatch Tool, markets currently see a 48% chance of a rate hike.
A hotter-than-expected inflation reading could strengthen rate-hike bets, lifting the US Dollar and Treasury yields while weighing on the non-yielding metal. Conversely, softer data could prompt traders to further scale back expectations of a hike, keeping Gold’s near-term outlook tilted to the upside.
Technical analysis: XAU/USD approaches the 200-day SMA
XAU/USD extends its advance above the 50-day Simple Moving Average (SMA) and trades just above the 100-day SMA, keeping the near-term bias bullish.
The pair is now approaching the 200-day SMA at $4,500, which acts as the next significant overhead barrier, while the Relative Strength Index (RSI) at 68 flirts with overbought territory, hinting that the latest advance is strong but could be prone to consolidation.
The Average Directional Index (ADX) at 30 points to a moderately directional market, reinforcing the idea of a sustained bullish phase as long as price remains above the short- and medium-term averages.
On the downside, immediate support is seen at the 100-day SMA near $4,388, with a deeper cushion at the 50-day SMA around $4,148, where buyers would be expected to re-emerge on corrective pullbacks. Further below, a more structural floor is located at the horizontal support line at $4,000.
On the topside, the 200-day SMA at $4,500 is the key resistance level that bulls need to reclaim to extend the uptrend, and a failure to clear this barrier would likely keep price consolidating above the nearby moving-average support band.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound-Australian Dollar could stay near AU$1.91 if UK GDP supports Sterling, although hawkish RBA signals may keep the ‘Aussie’ well underpinned. The Pound to Australian Dollar (GBP/AUD) exchange rate traded in a narrow range on Tuesday, after early volatility triggered by the Reserve Bank of Australia’s latest policy decision faded.
At the time of writing, GBP/AUD was trading around AU$1.9146, little changed on the day.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.91256 (-0.13%)
Pound to Dollar (GBP/USD): 1.350731 (-0.03%)
DAILY RECAP:
The Australian Dollar (AUD) saw some volatility during Tuesday’s Asian session after the Reserve Bank of Australia left interest rates unchanged at 4.35%, in line with market expectations.
The ‘Aussie’ initially dipped after the announcement, but quickly recovered as RBA Governor Michele Bullock struck a hawkish tone in her post-meeting remarks.
Bullock indicated that the bank had discussed the possibility of another rate rise and signalled that further tightening remains possible if inflation risks persist.
She said: “And we will go again if we need to. And I think personally that it is quite possible we might need to go, but we will wait and see what the data tells us.”
This helped AUD steady after the initial wobble, with investors now looking to upcoming Australian data for clues as to whether inflation pressures are beginning to feed more clearly into the wider economy.
Meanwhile, the Pound (GBP) held firm on Tuesday after a report showed UK consumer confidence climbed to its highest level in almost two years in July.
Barclays’ latest consumer spending survey suggested households were feeling more secure in their finances and job prospects, with warmer weather and the World Cup also helping to lift discretionary spending.
Even so, Sterling struggled to generate stronger momentum, with traders largely waiting for Thursday’s UK GDP release for clearer direction.
Near-Term GBP/AUD Forecast: Can UK GDP lift Sterling above AU$1.91? Looking ahead, the next major catalyst for the Pound to Australian Dollar exchange rate is likely to be Thursday’s UK GDP report.
If the figures show the UK economy expanded at a reasonably healthy pace in the second quarter, Sterling may find fresh support and GBP/AUD could attempt to push higher.
However, any disappointment in the GDP release may leave the Pound vulnerable, particularly against an Australian Dollar that remains supported by hawkish RBA expectations.
Markets will also keep an eye on another speech from RBA Governor Bullock. If she reiterates the case for keeping the door open to further rate hikes, the ‘Aussie’ could stay underpinned through the second half of the week.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Euro-Dollar exchange rate has broken out of its recent base, with FX analysts at Société Générale now watching the 1.1610/1.1625 zone as the next resistance area. The Euro to US Dollar (EUR/USD) exchange rate was trading around 1.1543 late on Tuesday, still holding most of the recovery from late July and roughly 1.2% higher over the past month.
Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.154048 (-0.03%)
Pound to Dollar (GBP/USD): 1.351923 (+0.07%)
Dollar to Yen (USD/JPY): 159.21564 (-0.04%)
FX strategists at Société Générale says the pair has already completed the first part of its technical recovery.
“EUR/USD recently broke out of a small base, resulting in a short-term up move,” the bank said.
The next hurdle is more important.
“It is now challenging a descending trend line drawn from the January high,” Société Générale said, adding that “the longer-term 200-DMA near 1.1610/1.1625 is next potential resistance zone.”
That puts the current spot rate around three-quarters of a cent below the bank’s first serious upside test.
Image: EUR/USD one month chart EUR/USD has recovered from below 1.14 in late July and is holding above its rising 20-day moving average.
The latest move has been fairly orderly. After gaining strongly at the end of July, the pair has spent much of August consolidating between roughly 1.1500 and 1.1580 rather than giving back the breakout.
Société Générale’s warning is that the bullish case still depends on support holding.
“If the pair fails to overcome this hurdle, the down move may persist,” the bank said.
Its first support reference sits close to where the pair has repeatedly found buyers over the past fortnight.
“Upper limit of previous base at 1.1470 is a short-term support.”
Near-Term EUR/USD Outlook: 1.1500/07 Needs to Hold The immediate market structure therefore looks fairly simple.
The Euro has broken higher, but it has not yet cleared the longer-term trend barrier. The 1.1610/25 area is the level Société Générale wants to see challenged next, while the 1.1500 region remains important if the latest recovery is to stay intact.
Image: The Euro-to-Dollar exchange rate performance over 2026 - year-to-date history EUR/USD remains lower for 2026 despite the latest rebound, with spot still well below January’s high above 1.20.
A sustained move through the 200-day average would strengthen the case that the July low marked a more durable turning point. Failure to hold around 1.1500/07 would instead risk reopening the lower part of the recent range.
For now, Société Générale’s chart work remains constructive, but the pair is approaching the level where that view faces a much harder test.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Chris Turner at ING notes EUR/USD remains lacklustre despite better Eurozone data and upside surprises, as high European natural gas prices and Gulf tensions weigh on the Euro. He argues that a soft US CPI print could allow EUR/USD to challenge last week’s 1.1580 high, though further gains may be limited by upcoming data and the Jackson Hole symposium before the Fed’s mid-September decision.
Energy costs cap Euro upside"EUR/USD continues to trade in a lacklustre fashion. Better hard activity data and eurozone economic numbers generally surprising on the upside have failed to provide the euro with much of a lift. That may be owed to unresolved tension in the Gulf, which is keeping European natural gas prices above €60/MWh."
"In terms of geopolitics, there is very little clarity here, although the latest reports suggest Pakistan and Oman are managing to bring the US and Iran a little closer together."
"If the US CPI number does indeed come in on the soft side, EUR/USD should be able to challenge last week's high at 1.1580. That is about the extent of a move priced into one-day straddle options."
"Much more of a move may be too much to ask in quiet summer markets, given we will also see another round of CPI and jobs data – plus the Jackson Hole Fed symposium – before the Fed decides on policy mid-September."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
For years, the financial news space has been flooded with narratives of dollar doom, an incoming hyperinflation, and gold winning once the U.S. currency finally dies.
According to Brent Johnson, founder of Santiago Capital and author of the “Dollar Milkshake” thesis, that framing gets the world backward. Investors, he argues, should spend less time asking how the monetary system ought to work and more time studying how it actually does.
“Regardless of what our morals or what our wishes tell us the world should be, this is the way it is,” Johnson said. The global economy is still built around the dollar, not because the U.S. has pristine finances, but because every other major country has its own debt, demographic, political or market constraints.
That’s why Johnson rejects the idea that the dollar and gold are mortal enemies. In his framework, they can rise together — and a surging dollar may be more destabilizing than a weak one.
Gold Doesn’t Need a Dollar CollapseGold’s recent strength challenges a core assumption of the doom narrative: that bullion requires currency failure to rally. Since the global financial crisis, the dollar index has strengthened while gold has multiplied in price.
“You don’t have to hate the dollar, and you don’t have to think the dollar is going to collapse and you don’t have to think the United States is going to go into the Great Depression to own gold,” Johnson said.
Gold made headlines earlier this year when it overtook the Treasuries as the leading constituent of bank reserves. Johnson acknowledges deliberate diversification away from Treasuries, but argues the overlooked aspect is how much bullion appreciated while bond prices fell.
Even so, gold buying does not end dollar dependence. Johnson argues central banks accumulate bullion precisely so they can sell it in a crisis to obtain dollars — which helps explain why the two can rise together during liquidity squeezes, then diverge when holders dump appreciated gold to secure scarce dollars for oil, food and debt service.
The Strong Dollar ProblemA weak dollar, in Johnson’s telling, does not break the system; it extends it, fueling credit expansion and looser liquidity. The greater threat is strength.
“A strong dollar will do more to wreck the monetary system than a weak dollar,” he said, pointing out that the reason lies offshore.
“The rest of the world owes far more than 40 trillion. They don’t owe it to the United States. They owe it to each other. And it’s in dollars,” Johnson noted, citing Bank for International Settlements estimates of at least $80 trillion — possibly north of $100 trillion.
Those borrowers cannot print dollars. When the dollar rises against local currencies, servicing that debt grows costlier, triggering credit crunches, defaults and liquidity crises. That scarcity, he argues, also gives Washington geopolitical leverage, extending swap lines with strings attached — as he says played out with Argentina.
“The relative levels of fiat currency are probably the most important thing that nobody understands,” he added.
Disruption Trades Beyond GoldJohnson’s framework also points to less obvious opportunities, like agricultural commodities. He sees potential upside in corn, wheat, soybeans and soybean meal later this year or early next year, tied to possible delays in fertilizer, chemicals and other farm inputs caused by Middle Eastern tensions and Strait of Hormuz disruptions. Invesco DB Agriculture Fund (NYSE:DBA) is up 7.94% year-to-date.
A second overlooked pressure point is aviation maintenance, repair and overhaul. The Gulf is an important MRO hub for widebody cargo jets, and missed maintenance deadlines force regulatory groundings that cascade into fresh supply-chain snarls.
Image via Shutterstock
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The US Dollar continues to recover from the blow dealt by the labour market statistics. A rally in Treasury bond yields is driving the rise in the USD index amid tensions in the Middle East and a resurgence of expectations that the Fed will tighten monetary policy in September. The probability has risen to 50% after a dip to 43% following the US jobs report. The futures market still gives a 33% chance of more than one hike in 2026.
Investors are focusing on the release of US inflation data for July. Factors pointing to a slowdown include productivity outpacing labour costs, the waning impact of tariff effects, and lower oil prices than in May, when CPI indices peaked. Those who believe consumer price inflation will resume its upward trajectory point to geopolitical factors and massive investment in AI technology.
Market sentiment is divided, and gold stands to benefit. Whatever the inflation report may be, the precious metal is capable of capitalising on it. A slowdown in CPI will weaken the US dollar and reduce Treasury yields, benefiting the metal. Conversely, an acceleration in consumer price growth against the backdrop of a clear cooling of the US labour market would point to the development of stagflation. This is traditionally seen as a tailwind for gold.
As a result, there is a sense that the precious metal has overtaken the US dollar as the primary safe haven. It is strengthening in response to news of the escalating conflict in the Middle East more rapidly than the US currency is.
Gold also has support from investors’ flight to safety amid government intervention in the forex market. According to Eurizon Capital, coordinated currency intervention by the US and Japan suggests that USDJPY will not return to its 40-year highs in the coming years. Governments will not give in to speculators. The latter’s resistance is futile.
In fact, the wide interest-rate differential between the Fed and the Bank of Japan, coupled with Tokyo’s dependence on energy imports, is pushing USDJPY higher. As the pair approaches 160, the risks of further intervention increase.
Summary: Gold comes out on top in any inflation scenario: a weak CPI puts pressure on the dollar and yields, whilst a strong one heightens the risk of stagflation. Interventions by the US and Japan are supporting demand for safe-haven assets.
USD/JPY Looks Towards 160 Ahead of U.S. CPI Data USD/JPY is creeping higher, even after joint intervention by Tokyo and Washington pulled the pair from 164 to 155. Just a week later, U.S. dollar bulls are already pushing the pair back towards the danger zone.
The yen has already given back nearly half of its intervention rally after the U.S. and Japan stepped in to stop the pair from reaching a fresh 40-year high. While the move worked as a short-term shock, it appears less capable of creating a lasting change in direction.
With Japanese interest rates still well below those in the U.S., the carry trade remains attractive. Investors can continue to borrow cheaply in yen and buy higher-yielding dollar assets, putting renewed pressure on the Japanese currency.
Attention now turns to U.S. CPI data, which is expected to show headline CPI rising 0.1% month-on-month and 3.4% year-on-year, down from 3.5%. Core CPI is expected to rise 0.2% month-on-month and 2.5% year-on-year, down from 2.6%.
A hotter-than-expected reading, particularly CPI of 0.3% or more on a monthly basis, could strengthen expectations of a September rate hike. This could push U.S. Treasury yields higher, making dollar assets more attractive and potentially lifting USD/JPY above 160.
Meanwhile, cooler-than-expected inflation, particularly following Friday's weaker-than-expected non-farm payroll report, could put pressure on Treasury yields and give the pair some breathing room.
U.S. CPI data is therefore key for setting expectations for the September Fed meeting and could also influence Federal Reserve Chair Walsh's speech at the Jackson Hole Symposium later this month.
USD/JPY Forecast – Technical Analysis
USD/JPY has recovered from the 155 low, rising back above the 200 EMA and heading towards the 160 resistance zone. There is a confluence of the multi-month rising trend line, horizontal resistance and the 50 EMA around this level.
A rise above 160 would put bulls firmly back on track and bring 163, the round number, and 164, the 2026 high, into focus.
On the downside, support is seen at 157.80, the 200 EMA. Below here, attention turns back towards 155, the August and May lows.
Oil Rises For A Sixth Straight Session On Middle East Supply Fears Oil prices are rising on Wednesday amid ongoing concerns about supply disruptions in the Middle East, although data showing rising U.S. oil inventories could limit the upside for now.
Oil prices are rising for a sixth straight day, with WTI up more than 7% so far this week. The rise comes amid ongoing supply concerns, as Iran's top security officials said the Strait of Hormuz will remain closed unless the U.S. accepts Iran's conditions to end the war.
Shipping data shows the number of vessels transiting the Strait fell to a low of eight on Tuesday, significantly below the 130 vessels that passed through the crucial waterway each day before the war.
Separately, Iran-aligned Houthis reported attacks on ships in both the Strait of Hormuz and Bab el-Mandeb, adding to concerns over oil supply.
According to the International Energy Agency, global oil supply is expected to fall by 4.3 million barrels per day, or around 4%, this year, as renewed hostilities in the Middle East since July put the oil market into a deficit. This is a larger drop than the 3.7 million barrels per day forecast in the IEA's July report, taking the IEA's latest forecast for global supply to 102.02 million barrels per day.
However, according to API data, U.S. crude inventories rose sharply by 9.1 million barrels last week, while gasoline and distillate inventories fell by 1.5 million barrels.
Attention will be on EIA data later today to see whether the inventory build is confirmed by official data. If it is, this could provide some relief from the current supply concerns and limit further gains in oil prices.
For now, ongoing hostilities and the closure of the Strait of Hormuz are likely to keep oil prices supported.
Oil Forecast – Technical Analysis
Oil is trading within a symmetrical triangle pattern. The price has recovered from $75, pushing above the 50 and 200 EMAs.
With the RSI above 50, buyers will look to extend gains towards $88, the 50% Fibonacci retracement of the move from the $55 low to the $120 high, as well as the falling trend line resistance.
A rise above here brings the 95 Fibonacci retracement level and the July high into focus. A break above this level would create a higher high and open the door towards $100.
On the downside, immediate support is seen at the 50 EMA at $81.80 and $80, the psychological level, followed by the 200 SMA and the 61.8% Fibonacci retracement level.
A break below these levels would bring $75, the August low, back into focus and could see sellers gain traction towards the $70 support zone.
Silver prices (XAG/USD) rose on Wednesday, according to FXStreet data. Silver trades at $66.56 per troy ounce, up 3.06% from the $64.58 it cost on Tuesday.
Silver prices have decreased by 6.36% 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 66.32 on Wednesday, down from 67.64 on Tuesday.
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.
HomeTechnical AnalysisIntraday Analysis 12.08.2026 Gold Pushes for $4500
USDCAD continues lower
The American dollar continued its journey lower as the sell-off shows no signs of stopping.
The pair is struggling to stay afloat at the 1.3900 zone as sellers pile on the pressure. Buyers attempted to get back into the game after a brief consolidation. Failure to hold the 1.4000 level has now become a firm resistance. 1.3970 is the first resistance, with 1.4080 the target higher.
NZDUSD(New Zealand dollar) spikes lower
The NZDUSD(New Zealand dollar) looks to break out of the recent consolidation.
A brief pullback after hitting 0.5900 gives hope for the greenback to turn around. The pair turns its attention towards the first support at 0.5850. A breach here could trigger a new round of liquidation towards 0.5780. 0.5900 remains the resistance to break as the RSI creeps lower. XAUUSD waiting for the next signal
Gold continues to grind higher to push for another fresh high after falling short at 4400.
The price is still in bullish mode after jumping over $300 since the start of the month. An overbought RSI could see a limited pullback, but all eyes are on a rally past 4400. A fall below the fresh support of 4320 would open the door to a move towards 4240.
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Whatever the inflation figures may be, the precious metal will come out on top. Japan and the US don’t want to give the yen’s fate to speculators. The US dollar continues to recover from the blow dealt by the labour market statistics. A rally in Treasury bond yields is driving the rise in the USD index amid tensions in the Middle East and a resurgence of expectations that the Fed will tighten monetary policy in September. The probability has risen to 50% after a dip to 43% following the US jobs report. The futures market still gives a 33% chance of more than one hike in 2026.
Investors are focusing on the release of US inflation data for July. Factors pointing to a slowdown include productivity outpacing labour costs, the waning impact of tariff effects, and lower oil prices than in May, when CPI indices peaked. Those who believe consumer price inflation will resume its upward trajectory point to geopolitical factors and massive investment in AI technology.
Market sentiment is divided, and gold stands to benefit. Whatever the inflation report may be, the precious metal is capable of capitalising on it. A slowdown in CPI will weaken the US dollar and reduce Treasury yields, benefiting the metal. Conversely, an acceleration in consumer price growth against the backdrop of a clear cooling of the US labour market would point to the development of stagflation. This is traditionally seen as a tailwind for gold.
As a result, there is a sense that the precious metal has overtaken the US dollar as the primary safe haven. It is strengthening in response to news of the escalating conflict in the Middle East more rapidly than the US currency is.
Gold also has support from investors’ flight to safety amid government intervention in the forex market. According to Eurizon Capital, coordinated currency intervention by the US and Japan suggests that USDJPY will not return to its 40-year highs in the coming years. Governments will not give in to speculators. The latter’s resistance is futile.
In fact, the wide interest-rate differential between the Fed and the Bank of Japan, coupled with Tokyo’s dependence on energy imports, is pushing USDJPY higher. As the pair approaches 160, the risks of further intervention increase.
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Silver (XAG/USD) has returned to levels a few cents above $66.00 on Wednesday’s European session after finding support at the $64.20 area on Tuesday. The precious metal keeps the bullish trend from early August lows in the mid-$56.00s range, with bulls aiming for the $67.15 resistance area ahead of the release of July’s US Consumer Price Index (CPI) report, due later in the day.
Analysts at ING note that "Friday's soft US jobs data did not weigh heavily on the Dollar," with the market instead viewing upcoming inflation data as the decisive factor for the Fed’s next move.
In that sense, ING experts point out that "the market looks to be expecting a softer price story today," and suggest that to materially shift expectations, "we would probably need to see a 0.1% month-on-month read on core inflation – which some think is possible." In their view, "a soft number should drag market pricing of a September Fed rate hike away from a 50% probability in favour of no change."
Technical Analysis: Above $67.17, the next target is at the $71.50 area
XAG/USD confirmed its near-term bullish outlook after bouncing strongly from the $64.20 area, which has lured buyers into the peak of their last two months' trading range, at $67.17. Momentum indicators in the daily chart endorse the positive view, as the Relative Strength Index (14) trends toward the bullish side at 62.40 and the Moving Average Convergence Divergence (MACD) histogram remains positive around 1.17, hinting at steady bullish pressure.
On the topside, a confirmation above the mentioned $67.17 (June 22 high) would clear the path towards the confluence of the 200-day SMA, at $71.47, and the mid-June peak, at $71.56, which is likely to offer significant resistance.
Downside attempts, on the other hand, are likely to be tested at Tuesday's low of $64.23, and the previous resistance area between the July 6 high, at $ $63.28, and the August 6 high, at 62.92. Further down, the next target is at the July 6 and 22 highs around $60.81.
(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.
Key Points:U.S. CPI is the primary FX catalyst as traders assess whether inflation will alter expectations for the Fed's September decision.UK second-quarter GDP is another important catalyst for GBP/USD and expectations surrounding Bank of England policy.DXY remains technically vulnerable below its key moving averages while defending rising trendline support near 99.42.EUR/USD is testing long-term resistance near 1.1556, with a breakout potentially strengthening its bullish structure.GBP/USD remains constructive above its rising trendline and moving averages while buyers challenge 1.3516 resistance.
In this article:GBP/USD
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GBP/USD ForecastEUR/USD
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EUR/USD ForecastUS Dollar News: CPI Test Puts Fed, Euro and Pound in Focus The U.S. dollar begins the week with July CPI due out later today. The data release may dictate whether the Federal Reserve pauses its interest rate hike cycle or continues to hike in September. Team Reuters forecasts 0.1% month over month increase in headline CPI after the June reported drop of 0.4% with expected annual inflation coming in at 3.4%. Forecasts expect a 0.2% month over month increase in core CPI and a 2.5% year over year increase. Given recent market action, most expect the Fed to stay on hold in September. Thus, today’s CPI number may have some consequence.
The Falling U.S. July employment numbers combined with the current geopolitical situation has the Fed in a tricky spot. Atlanta Fed interim President says very high inflation and the uncertainty of energy flows out of the Middle East are significant issues the Fed is facing. Three of the Fed board members urged a rate hike in the July meeting.
The euro is in the same dilemma of growth versus inflation as the Fed. The ECB recently said the Ukraine-Russia conflict disrupted eurozone household spending; however, recent manufacturing numbers for July showed factory output was the best it has been in nearly four and a half years. The ECB has expressed some concern that the growing AI industry in Europe will help counter the downturn of the economy that is caused by trade and geopolitical uncertainty.
The Pound has its focus on the Thursday release of UK Q2 GDP. Forecasts currently put the number at 0.4% for the quarter following Q1’s 0.6% gain. The Bank of England is expected to keep interest rates at their current level and remain focused on inflation so the BoE will be watching the economy closely in case the focus shifts to falling growth.
For all three currencies, U.S. CPI is the primary concern of the moment. Lighter CPI would lessen the likelihood of another Fed hike. Conversely, a steepening CPI would give more weight to a Fed hike for this year.
U.S. Dollar Index Technical Analysis: DXY Holds Rising Trendline but $100.06 Still Caps Recovery Dollar Index Price Chart – Source: Tradingview Currently, the USD Index is at $99.87 and is trading right above the rising trendline and the key support area of $99.42. There have been signs of buyers coming in around the rising trend line, but the price still has a long way to go to reach the 50-day moving average (MA) at $100.30, 100-day moving average at $99.91, and is currently resting just below the rising trend line and the 50-day moving average. The recovery has not begun until these averages are crossed.
The Relative Strength Index (RSI) is at 41, and although it has begun to show a reversal as momentum has started to slow, there is still a strong bearish trend and it is still below 50. Immediate resistance is at $100.06 before $100.36 and $100.82. If the price can sustainably trade above these levels, then it will confirm a short-term bullish view and retest $101.62.
If there is a break down to the support of $99.42, then the rising trend line will also fall and provide a break to the support of $98.76. Until the price has the potential to test $100.36-$100.06, the USD Index is a cautious recovery scenario above $99.42.
GBP/USD Price Chart – Source: Tradingview GBP/USD is currently trading at $1.3508, with bulls defending the $1.3515 support level. Pound bulls display impressive momentum as price continues to trend above the moving average convergence divergence (MACD) and the lower trendline. A combination of a series of higher lows and the bullish MACD support a strong upward price move. The MACD, currently at 61, is approaching overbought territory, however it does indicate a solid bullish momentum.
The identified resistance levels are $1.3515, $1.3559 and $1.3601. In case of a breakdown, bulls should base their defense at the $1.3437 low, $1.3401 low, and $1.3343 levels. The trendline will continue to act as an important structural support line. From my perspective, if bulls are able to successfully defend the trendline, a run towards $1.3559 is expected. However, if bulls fail to defend the trendline, a significant part of the bullish structure will be lost.
EUR/USD Technical Analysis: Euro Compresses Beneath Descending Trendline Near $1.1540 EUR/USD Price Chart – Source: Tradingview The pair is at $1.1537, consolidating beneath the long-term descending trendline limiting bullish momentum. EUR/USD is above the 50-period and 100-period EMAs at the $1.1523 and $1.1495 levels, respectively, keeping the short-term structure positive, with resistance above. Smaller candlesticks are forming between $1.1530 and $1.1540, suggesting consolidation rather than a reversal.
The RSI is at around 49, showing neutral momentum after the recent rally. $1.1569 is the next resistance level followed by $1.1621 and $1.1674. Support is found at $1.1532, with major support at $1.1516 and $1.1500 and $1.1456. In my opinion, if the pair breaks above $1.1569, it is a clear bullish sign. If price breaks the descending trendline, it has potential to break out of the consolidation.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
