Bitcoin, BTC/USD Talking Points:
The rally had become overbought on the daily chart and as of this writing a pullback has started to form.
Between anti-fiats, BTC/USD has outperformed gold of recent which illustrates a shift from earlier in the year, and this highlights something that may be usable for the weeks and perhaps even months ahead as BTC has held up well even with surging rates and a strong USD.
Earlier this year it seemed many had started to write off Bitcoin, as gold prices flew higher and BTC/USD continued to sell-off. After the 125k high last year, profit taking in Bitcoin led to a deeper slide that continued through most of the first half of this year, and despite the backdrop, whether stocks were flying or gold was rallying, BTC was selling off.
But ever since the larger Treasury buyback announcement on August 19th, that script has been flipped. While both gold and Bitcoin rallied on the back of that news, gold soon topped and Bitcoin just continued to run, breaking out of a falling wedge that had formed over a five-month period on the way back up to the 80k handle.
Bitcoin (BTC/USD) Weekly Chart
Chart prepared by James Stanley; data derived from Tradingview
Bitcoin v/s Gold
The relationship between the two markets has long been tracked as both are, in essence, a measure against fiat currencies. With a diluting fiat base, then ideally, both would increase in value as neither gold nor Bitcoin are held to the same forces of monetary expansion. But that measure isn’t consistent, and the chart below charts the value of one bitcoin divided by the value of gold, and since early-2025 gold was very much in control.
But that has shifted over the past six months with a strong push more recently, and this resembles dynamics back in 2020 or 2023.
Bitcoin v/s Gold, Weekly Chart
Chart prepared by James Stanley; data derived from Tradingview
What might be behind such a push? Given the current administrations embrace of cryptocurrency combined with a tighter monetary environment, this could be either a proactive move from investors or some pricing-in of an unknown variable.
Last week, for instance, really should have been bearish for Bitcoin from a fundamental perspective. Not only did we have a rate hike and a pledge of another hike from the Fed, but the Clarity act failed to pass in Congress. Yet, Bitcoin put in a bullish engulf on the weekly and, so far, has continued to rally.
With a pullback forming today, this now sets up for a possible support test at a key zone of resistance. The area around 80k has been a big spot, as there was a swing low last November and then it was just above that price where the bounce died in May (82,833, specifically).
More to the point, this was resistance for the past four weeks that was finally cleared in early trade this week, so ideally that will be the area that buyers will defend should this pullback continue.
BTC/USD Weekly Chart
Chart prepared by James Stanley; data derived from Tradingview
Bitcoin: The Test
The major test for trends is where buyers show up during pullbacks, and that’s what we now have in Bitcoin after three consecutive days of resistance around the 87k level.
Yesterday showed a response from buyers at 85k but that obviously wasn’t enough to draw a fresh high. Now, that 82,833 level is on the radar, and that would be the next key spot given the impact it had back in May. Below that is another, at 82,047, which was a lower-high back in May and it’s what held resistance during the breakout two weeks ago.
And then below that, the 80k level is what set the low last after the Sunday open and that’s the level that would signal a loss of control from buyers if it gets taken out.
Bitcoin (BTC/USD) Daily Chart
Chart prepared by James Stanley; data derived from Tradingview
--- written by James Stanley, Senior Market Analyst, Global Macro
Gold has withstood the pressure from the Fed’s rate-hiking cycle. Due to US fiscal problems, the correlation between gold and Treasury yields has broken down. Gold has been stuck in a consolidation phase within the $4,250–4,400 per ounce range, under pressure from the US dollar, which has risen to two-month highs. The dollar, in turn, is gaining ground amid the growing likelihood of significant Fed policy tightening in the coming quarters. At the same time, strong Asian demand, the recovery in ETF holdings – which had been declining in the first half of the year – and active bullion purchases by central banks are supporting the precious metal.
In recent weeks, gold has no longer been held back by real Treasury bond yields, which have risen to 20-year highs. Historically, rising debt-market rates have been a headwind for the non-interest-bearing precious metal. One reason for this break in correlation is investor concern over rising US public debt and the associated financial stability issues.
On the other hand, if the rise in Treasury yields reflects the strength of the US economy and is driven by intensifying competition with hyperscalers for resources, then this is negative for gold. According to BMI, gold will fall in the long term against a backdrop of faster-than-expected global economic growth.
In fact, rising energy prices and widespread monetary tightening will hold back the global economy. The more the Fed and other central banks raise interest rates, the worse it is for the economy and the better for gold. In previous cycles of rate rises, this factor allowed the precious metal to recover lost ground after initial setbacks.
This time, a collapse did not occur thanks to strong demand for the physical asset. In the first eight months of 2026, China imported more gold than in all of 2025, whilst its ETFs added 44 tonnes in August, 18% more than in the same period last year.
Central banks are buying, on average, twice as much gold in 2022–2026 as they did in 2010–2021. At the same time, the share of gold in gold and foreign exchange reserves now exceeds, in value terms, the proportion of US Treasuries. As a rule, regulators do not base their purchasing decisions on opportunity cost, which may be another reason for the divergence between the price of an ounce of gold and the yield on US Treasury bonds.
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Interest Rates Continue to Be a Key Driver If interest rates do continue to rise, that could work against gold. There is a lot of debt in the world and there is a lot of fear in the world, but that seems to be ignored, at least in the short term, because of interest rates. I think this is a simple matter of watching how they are going.
The 10-year yield in America is right at 4.99% again, and that is something that is going to be a major mover of this market. Headlines could as well, coming out of the Middle East. If we get some signs of progress, that could send gold higher, as it should send rates lower.
But as I said, right now, as a technical trader, I am probably looking for some type of bounce closer to the $4,300 level. I expect messy and choppy trading, but whether or not we get any significant move, we will just have to wait and see.
Silver remains trapped between $63.50 support and $70 resistance as rising U.S. rates and a stronger dollar offset longer-term supply and demand strength.
Silver Technical Analysis
Daily chart of silver futures hovering around $65.49, consolidating right at the flat 50-day and 200-day EMAs. The silver market has fallen pretty significantly during the early part of the trading session here on Wednesday. Traders continue to see a lot of noisy and conflicting headlines. Keep in mind that the interest rate situation in the United States is rising, and therefore it works against the market pricing.
The 50-day EMA and the 200-day EMA are now flat, so it suggests that traders are looking at this through the prism of a range. I think that probably holds here, as there are two conflicting forces.
Silver Supply Continues to Be in Demand, With Low Supply There is the fact that the supply of silver is not growing while demand is. It puts a little bit of bullish pressure there, but we also have a stronger U.S. dollar and interest rates working against it.
So, we are basically in a range between $63.50 and $70. With this, traders are more likely than not going to stick to range-bound systems, trying to take advantage of the back-and-forth behavior that this market is currently showing.
I don’t have any real signs on the chart that I’m looking at that suggest that silver is about to take off. But if it breaks out of those ranges, then we have to reset and look at our expectations for this market, and where it is going.
Longer term, I like silver a lot, truthfully. But using a leveraged CFD position or a futures position, it’s a different conversation. As far as physical silver is concerned, I still am bullish on that. But right now, it looks like we’re just kind of drifting sideways, trying to figure out where to go next.
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EURUSD currency pair recently broke through the key support zone located between the support level 1.1500 and the 61.8% Fibonacci correction of the upward impulse wave (C) from August.
The breakout of this support zone accelerated the active minor impulse wave 3 of the intermediate impulse wave (3) from late August.
EURUSD currency pair can be expected to fall further toward the next support level 1.13, which reversed the price multiple times in July and target for the completion of the active impulse wave (3).
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The US dollar is stronger against all the G10 currencies and most emerging market currencies today. The euro has approached $1.14, despite firmer than expected preliminary September PMI. Japan’s markets re-open tomorrow for the first time this week, and the market has taken the dollar to almost JPY158, around where it peaked before last weekend. Optimism about supply and talks has kept November WTI mostly consolidating today below $90 a barrel. Yet, interest rates are little changed.
The Trump-Xi summit is drawing much attention, but expectations seem relatively low. At most a short extension of the tariff truce may be seen but the current agreement doesn’t end until early November, so there is ostensibly no urgency. The central banks of Switzerland, Norway, and Sweden meet tomorrow. There has been a shift in recent days today a Norges Bank hike tomorrow. A week ago, the swaps market had a little less than a 50% chance of a hike discounted, and now it is a little more than a 50% chance.
Prices
G10
• The euro’s losses were extended to $1.1430 yesterday and to slightly above $1.1405 today, a new low since late July. Options for 1.8 bln euros struck at $1.14 expire today. The $1.1400 area also holds the trend line drawn off the late June and late July lows. A break could signal a test on the $1.1350 area next.
• The dollar traded in about a yen range yesterday below JPY157.80. The high last Friday before claims that the BOJ checked rates circulated and spooked the market, the greenback briefly traded slightly above JPY158. The dollar has edged a little higher today to approach JPY158. Above there, resistance is seen in the JPY158.20 area and the 200-day moving average is near JPY158.45.
• Sterling was sold to almost $1.3320 yesterday and took another step down today and has slipped through $1.3280. which, like the euro, is the lowest since July 29. Options for almost GBP500 mln at $1.3315 expire today and may have contributed to some of the selling pressure. The sell-off does not appear exhausted, and the $1.3265-75 area is the next technical target.
• The Canadian dollar’s slump continues. It is at its lowest level since late July. The greenback rose slightly above the early August high (~CAD1.4080) yesterday and reached slightly above CAD1.4090 today. The US two-year premium over Canada rose by nearly four basis points approach 150 bp, the widest since March 2025, which itself was the most mid-1997. The next chart area of note is in the CAD1.4100-30 area.
• The Australian dollar traded below $0.7100 in local markets yesterday, and again in Europe, and then in North America. The dip was bought each time, but the Aussie recorded lower highs in each rebound. Today, the Australian dollar has fallen to $0.7080. Last week’s low was about $0.7075. A convincing break targets the $0.7045 area. Options for A$715 mln at $0.7050 expire today. The futures market has a little more than an 85% chance of an RBA hike next week and a 50% chance of another one before the end of the year. That seems a bit rich and the market may be forced to re-consider on any disappointment with tomorrow’s employment report.
EM
• Long Mexican peso positions continue to get squeezed out. The greenback reached MXN17.3165 yesterday. Follow-through dollar buying today has seen the greenback rise to almost MXN17.40, its best level since late July. The US dollar has not traded above the 200-day moving average since April 2025. It is found near MXN17.42 today. The momentum indicators are getting stretched but they do not preclude a a move toward MXN17.55 on a break above MXN17.42.
• The dollar rose for the first time in four sessions against the offshore yuan yesterday. It was the first time in five sessions that the greenback did not trade below the previous session’s low. It reached a four-day high in Europe, near CNH6.7090. The 20-day moving average is a little above CNH6.71. The dollar has not settled above it since July 9. The PBOC fixed the dollar higher today for the first time in 11 sessions (CNY6.7468 vs. CNY6.7459 yesterday).
• The Indian rupee fell for the first time in six sessions today. The dollar opened lower (~INR95.5675) but recovered as the session progressed and settled near its highs. S&P and Fitch lifted FY27 growth to 7.0% and 6.9%, respectively, and anticipate at least one hike in the current fiscal year. The Asian Development Bank also lift its growth forecast (7% vs. 6.6% projection in July).
Other Markets
• Equities are mixed today. In the Asia Pacific regions, China, Hong Kong, and Singapore fell, while Taiwan, South Korea, Australia, and India rose, though the bourses finished well off their highs. Europe’s Stoxx 600 is off by around 0.2%, in what could be the first loss of the week. US index futures are narrowly mixed.
• Benchmark 10-year yields are narrowly mixed in Europe. The 10-year Gilt yield is off a little more than a basis point. The 10-year US Treasury yield is nearly flat, slightly below 4.96%.
• Gold recovered from a three-day low, a little below $4295 yesterday and returned to the $4360 area in the North American afternoon. It is trading inside yesterday’s range with a heavier bias today. Silver similarly was sold to a three-day low (slightly below $64.60) and recovered to settle above Monday’s high (~$67.05). The outside up day has seen no follow through buying, and silver is languishing in the lower end of yesterday’s range.
• November WTI fell for the fifth consecutive session yesterday. It settled at $100.75 on September 15 and closed near $90.50 yesterday. It settled below the 20-day moving average (~$90.55) for the first time since August 7. It is trading quietly unable to trade much above yesterday’s close but also holding above yesterday’s low (~$88.65).
Data
• US preliminary PMI may soften a little. The manufacturing PMI has been steady at 53.9 for the past three months. The services PMI rose for the past three months—from 50.7 in May to 56.5 in August. The composite also has increased for three months through August. It stands at 56.0 compared with 52.7 at the end of last year.
• The eurozone flash September PMI was firmer than expected. The manufacturing PMI was steady at 52.7. It has not declined since June. The services PMI rose to 53.0 from 51.6. It is a new high since last November. The services PMI finished last year at 52.4. The composite PMI reached 53.1 from 52.0, where it was in July and August. It ended last year at 51.5.
• The UK’s preliminary PMI was mixed. The manufacturing rose to 52.0 from 51.7. The services PMI slipped to 51.7 from 52.5, as did the composite PMI. The composite was at 51.4 at the end of last year.
• Australia’s PMI disappointed. The manufacturing PMI fell to 49.3 from 52.0. It was the first sub-50 reading since March. The services PMI eased for the second consecutive month. It stands at 51.4, down from 53.2 in August and 53.6 in July. The composite also slipped for the second consecutive month. It is at 50.8, down from 52.7 in August and 53.2 in July. It was at 51.0 at the end of 2025.
– AUDCAD reversed from multi-month resistance level 1.0000
– Likely to fall to support level 0.9880
AUDCAD currency pair recently reversed down from the resistance zone located near the key parity resistance level 1.0000 (which stopped the previous intermediate wave (3) in May) and the upper weekly Bollinger Band.
The downward reversal from this resistance zone stopped the earlier intermediate impulse wave (5). Given the strength of the key resistance level 1.0000 and the overbought weekly Stochastic indicator, AUDCAD currency pair can be expected to fall further toward the next support level 0.9880.
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Daily US Dollar Index (DXY) The Dollar Index cleared 100.561 Tuesday, reached 100.667, and gave it back after the Iran headline knocked crude lower. Silver bounced on that reversal. Wednesday morning the DXY opened at 100.560, pushed through to 100.862, and is holding near 100.826. The level that failed Tuesday is acting as support.
The move is not coming from a fresh oil shock. Crude is down for a sixth session. The dollar is moving on the rate trade underneath it. The Fed raised last week. Warsh left the door open. Musalem, Goolsbee, and Collins have all reinforced the inflation case this week. Tuesday’s dollar reversal looked like it might give silver breathing room. Wednesday took that away before European desks finished their first cup of coffee.
The next resistance on the DXY is the 101.327 to 101.640 range with the main high at 101.800 above. Six sessions of cheaper crude and the dollar is making new recovery highs. Silver buyers expected falling oil to knock the dollar off its run. It has not touched it.
The Two-Year Yield Is the Cleaner Signal The 10-year gets the attention after reaching 5.041% last week. The two-year is telling the more direct story for silver Wednesday.
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See all Silver forecastsDaily Spot Silver (XAG/USD) Spot silver is lower early Wednesday. The main trend is down according to the daily swing chart. A trade through $68.33 will change the main trend to up. A move through $62.31 will reaffirm the downtrend.
Silver reached $67.55 Tuesday and turned lower. The move stopped below the $67.79 retracement level and below the $68.33 main top. Sellers showed up before the market could change the trend.
The current break is testing the $65.45 to $65.32 area. A sustained move under that zone could send silver into the 50-day moving average at $63.45. The $62.98 to $61.04 support zone sits below the moving average along with the $62.31 main bottom.
What to Watch The Dollar Index is the first screen. It took back 100.561 after failing there Tuesday. Silver stays under pressure as long as that level holds. The two-year pushing toward 4.788% after last week’s hike is the rate market pricing a more restrictive path. The 10-year above 4.920% keeps the same pressure from the long end.
The UNGA headlines can still move crude. A real step toward Hormuz reopening keeps energy prices lower. A reversal in the diplomacy restores the premium. The oil story is the session-to-session swing. The dollar and yields are running the trade this week and neither one has cracked.
Silver is trading below the $65.45 to $65.32 area with the 50-day below at $63.45. The rally to $67.55 failed before it could threaten the main top. SLV is losing money while GLD takes it in. The swing chart is down and the dollar, the two-year, and the 10-year are all confirming the bearish lean.
Reclaiming $66.75 and then $67.79 weakens that case. A break through the 50-day strengthens it. Until the dollar and yields give ground, sellers own the trade and buyers need to hold the average or $62.31 comes back into focus.
Euro still holding downtrend moveent as market closing from target and support 1.1400 Intraday showing first resistance around 1.1495 where as long as market holding below it more drop to test 1.1390-1.1400 trend support is likely which in turn may push for rebound correction Above 1.1495 more advance is likely with resistance at 1.1570 SUPPORT […]
TL;DR: With an SNB hold at 0% close to fully priced, EUR/CHF and GBP/CHF are already rolling over on a different mechanism—falling oil is easing inflation pressure elsewhere, reducing the need for other central banks to widen their rate advantage over Switzerland and relieving carry pressure on the Franc.
EUR/CHF and GBP/CHF Are Turning Before the SNB Moves EUR/CHF and GBP/CHF are both rolling over just as the SNB prepares to leave rates at 0% on Thursday. The synchronized reversal suggests the bigger story isn’t tomorrow’s decision, but a broader recovery in the Franc already under way. With a hold close to fully priced, the SNB meeting itself looks unlikely to generate a major repricing in CHF. Yet the Franc is already the second-strongest major currency of the week, behind only the Dollar.
That points to a different near-term mechanism. Falling oil prices are easing inflation pressure across other major economies, reducing the need for central banks elsewhere to keep widening their rate advantage over Switzerland. With the SNB pinned at 0%, that matters: less pressure for further tightening abroad means less additional carry pressure against CHF. The weekly FX heat map is consistent with that thesis, with the Franc strong against EUR, JPY, GBP, CAD, AUD, and NZD, and weaker only against USD.
The distinction is important. The Dollar and Franc are both strong this week, but for different reasons. USD strength reflects a more hawkish Fed repricing, while CHF strength appears more consistent with a relief in rate-differential pressure as oil retreats. That relationship should still be treated as a working market thesis rather than a statistically established correlation, but the current cross-currency flows fit the mechanism well.
SNB Hold Looks Close to a Formality The policy backdrop gives the SNB little reason to change course. A Swiss Bankers Association survey released in August showed all respondents expecting the policy rate to remain at 0% through the rest of 2026, while 60% expected no change through 2027. ING also expects a hold tomorrow and rates to remain unchanged over coming quarters.
Growth has been firmer than expected, but not uniformly so. ING raised its 2026 growth forecast to 1.9%, supported by a strong 1.5% q/q second-quarter GDP expansion on a sports-event-adjusted basis. But nearly half of that increase came from the volatile chemicals and pharmaceutical sector together with a sharp rise in exports, and ING expects growth to slow in the second half. The message is therefore one of resilience rather than overheating.
Inflation similarly argues against urgency. Headline CPI accelerated from 0.4% to 0.8% y/y in August, but the increase was driven overwhelmingly by petroleum prices, which rose 25.2% y/y. Excluding energy, inflation was just 0.3%, leaving underlying price pressure very weak and comfortably within the SNB’s 0–2% target range.
That means tomorrow’s main policy signal may come through the conditional inflation forecast rather than the policy rate itself. The SNB could nudge its near-term projection higher to reflect energy prices and the weaker Franc, but the draft doesn’t point to a meaningful medium-term reassessment. The June path stood at 0.6% for 2026, 0.6% for 2027, and 0.7% for 2028.
Intervention Risk Remains Asymmetric The SNB’s intervention framework also remains important, even if it’s unlikely to dominate tomorrow’s meeting. The Bank retains the option of buying foreign currency if the Franc appreciates rapidly and excessively, particularly during a renewed safe-haven episode.
There’s little immediate urgency, however. The Franc had weakened moderately against the Euro before this week’s rebound, while domestic inflation remains contained. That reduces the pressure for the SNB to lean aggressively against current moves.
The structural reason the currency still matters is Switzerland’s sensitivity to imported prices. Imported goods account for around 22% of Swiss CPI, so a sharp Franc appreciation can exert meaningful disinflationary pressure. But the current move isn’t yet of the scale that would automatically force a response.
ActionForex’s Technical View: EUR/CHF Tests Whether the Franc Rebound Has More Room
EUR/CHF appears to have formed a short-term top at 0.9478 after failing near the upper boundary of its medium-term rising channel. The reversal has also been accompanied by bearish daily MACD divergence, suggesting upside momentum was already fading before the latest decline.
The next test is the 55-day EMA around 0.9356. A firm break below that level would deepen the correction toward the 38.2% retracement of 0.9094–0.9478 at 0.9331.
That zone should be watched carefully. It could provide support for a rebound and preserve the broader rise. But a sustained move through it would suggest the CHF recovery is developing into something more than a short-term correction.
ActionForex’s Technical View: GBP/CHF Is Showing the Same Pattern
GBP/CHF is sending a similar signal. A short-term top likely formed at 1.1066 after the pair failed to sustain its move above the medium-term rising channel, again with bearish daily MACD divergence.
The immediate downside focus is the 55-day EMA near 1.0909. A sustained break would expose the 38.2% retracement of 1.0468–1.1066 at 1.0838, which should act as the next major support and potential rebound zone.
The similarity between the two crosses matters. EUR/CHF and GBP/CHF aren’t merely falling independently. Both are correcting after extended advances and both are showing deteriorating momentum. That makes a broader CHF-driven move more credible.
Thursday May Be Quiet for the SNB, but Not for FX The SNB may do very little tomorrow because it doesn’t need to. Growth is holding up, underlying inflation remains subdued, and a 0% policy rate is already deeply embedded in expectations.
But the Franc doesn’t need the SNB to move in order to strengthen.
For now, the more important driver appears to be the changing external rate backdrop. If oil continues to fall and inflation pressure elsewhere eases, the need for further policy divergence against Switzerland diminishes. That can continue to relieve carry pressure on CHF.
The technical confirmation lies in EUR/CHF around 0.9356/0.9331 and GBP/CHF around 1.0909/1.0838. A break through those zones would give the Franc rebound more weight. A reversal in oil or renewed geopolitical escalation would challenge the underlying mechanism.
With the SNB decision and Trump-Xi summit landing in the same Thursday session, FX volatility may ultimately come from outside Zurich even if the Swiss central bank itself delivers exactly what markets expect.
Key Takeaways The SNB hold at 0% is close to a formality, with underlying inflation at just 0.3% ex-energy and growth described as resilient rather than overheating. CHF is already the second-strongest major currency this week, strong against every G10 peer except USD, pointing to a mechanism unrelated to tomorrow’s meeting. Falling oil is easing inflation pressure elsewhere, reducing the need for other central banks to widen their rate advantage over Switzerland’s pinned 0% rate. Both EUR/CHF and GBP/CHF have formed short-term tops with bearish MACD divergence, a synchronized pattern that strengthens the case for a genuine CHF-driven move rather than two unrelated currency stories. EUR/CHF’s 0.9356/0.9331 and GBP/CHF’s 1.0909/1.0838 are the key confirmation zones; breaking both would give the Franc rebound substantially more weight.
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Gold managed to push for farther drop movement while still consider as drop correction to test the Falling Wedge formation support as we see over the chart Market support zone laying at 4230-60 where as long as market maintain this zone another advance toward 4400 and 4510 may hit the market Below 4230 a risk […]
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USDJPY managed to meet targets 156.75 and 157.40 and above Market still showing ability for farther advance toward 159.50-160.00 zone Intraday supports at 157.30 and 156.40 which still pushing for farther advance Markey managed to test support 156.40 while still holding trades above it Traders need to be careful as BOJ may step in to […]
AUD/USD fell below 0.7100 on Wednesday, reaching a one-week low as weaker Australian business activity and a stronger US Dollar weighed on the pair. Australia's September Composite PMI dropped to 50.8 from 52.7, while manufacturing contracted for the first time since March. The AUD/USD outlook now turns to Thursday's Australian employment report, which could shape expectations ahead of next week's Reserve Bank of Australia decision. AUD/USD fell below 0.7100 on Wednesday as weaker Australian economic data collided with renewed US Dollar strength following hawkish comments from Federal Reserve officials. The Australian Dollar traded around 0.7086, down roughly 0.4% on the session and close to its lowest level in a week.
The pair has retreated sharply from levels above 0.7200 earlier this month as investors reassess the outlook for interest rates in both Australia and the United States. Wednesday’s move followed disappointing Australian PMI figures, while the Dollar remains supported by expectations that last week’s Federal Reserve rate hike will not be the last of 2026.
AUD/USD Today Falls Below 0.7100 The AUD/USD exchange rate came under fresh pressure during Wednesday’s European session, extending its recent decline below the psychologically important 0.7100 level. The US Dollar Index climbed to a fresh seven-week high above 100.6 before easing from its strongest levels. Expectations for additional Fed tightening have helped the greenback hold its gains even as oil prices retreat.
The Australian Dollar has faced pressure from both sides of the pair. Domestic economic data weakened on Wednesday, while the Fed’s increasingly hawkish policy outlook continues to favour the US Dollar.
Australian PMI Falls as Manufacturing Contracts Australia’s preliminary September PMI data provided the latest reason for caution over the domestic economy. The S&P Global Composite PMI fell to 50.8 from 52.7 in August, leaving overall private-sector activity only marginally above the 50 level separating expansion from contraction.
The deterioration was particularly pronounced in manufacturing. Australia’s Manufacturing PMI dropped to 49.3 from 52.0, marking its first contraction since March. Services activity remained in expansion but slowed to 51.4 from 53.2. The figures point to a loss of momentum at the end of the third quarter.
That matters for the Australian Dollar because the Reserve Bank of Australia is widely expected to raise interest rates next week. Softer economic activity does not necessarily remove the case for a hike, particularly while inflation remains a concern, but it could make markets less confident about how much additional tightening follows.
RBA Interest Rate Outlook Turns to Australian Jobs Data The RBA interest rate outlook now faces another important test with Australia’s employment report due Thursday. The labour-market figures will be the final employment report before the Reserve Bank’s September 29 policy decision and could influence expectations for what happens after the anticipated rate increase.
A resilient labour market would give the RBA greater room to focus on inflation and could strengthen expectations for additional tightening. A weaker report would complicate that picture after Wednesday’s PMI data already showed slowing business activity and weakness in manufacturing.
This leaves the Australian Dollar particularly sensitive to Thursday’s numbers. Rather than simply asking whether the RBA will hike next week, markets are increasingly focused on whether policymakers will need to continue tightening later in the year
US Dollar Strength Remains a Headwind for AUD/USD The US Dollar remains a key headwind for AUD/USD as hawkish Fed officials reinforce expectations for further US rate hikes. At the same time, falling oil prices and hopes for progress in US-Iran talks have eased some inflation concerns, although not enough to significantly weaken the Dollar. For the Australian Dollar, lower energy prices offer some support to risk sentiment but could also reduce expectations for aggressive RBA tightening.
AUD/USD Forecast: Australian Jobs Report Takes Centre Stage The near-term AUD/USD forecast remains cautious as the pair trades around 0.7086 and below its 20-day moving average near 0.7156. The immediate focus is the 0.7075-0.7100 region. A recovery above 0.7100 would ease some of the latest pressure, while a deeper decline could bring 0.7000 back into focus.
However, Thursday’s Australian employment figures are likely to matter more than short-term technical signals. A strong jobs report could revive expectations for a more sustained RBA tightening cycle and provide support for the Aussie. Weak employment data would instead reinforce Wednesday’s softer PMI signal at a time when the Fed continues to make the case for higher US interest rates.
That divergence leaves AUD/USD caught between an expected RBA hike and a US Dollar benefiting from the prospect of further Fed tightening.
Why is the Australian Dollar falling today?
The Australian Dollar is falling after Australia’s September PMI data showed slower private-sector growth and a contraction in manufacturing, while hawkish Federal Reserve commentary continues to support the US Dollar.
What could move AUD/USD next?
The Australian jobs report on Thursday is the next major domestic catalyst for AUD/USD. Markets will also continue watching Federal Reserve commentary, US interest-rate expectations and developments in oil prices ahead of next week’s RBA meeting.
Will the RBA raise interest rates next week?
Markets have been expecting a 25-basis-point RBA rate increase at the September 29 meeting, but Thursday’s Australian employment report could influence expectations for how much further the central bank tightens after that decision
Daily Spot Gold (XAU/USD) Spot gold is lower early Wednesday. The main trend is down according to the daily swing chart. A trade through $4,399.67 will change the main trend to up. A move through $4,235.17 will reaffirm the downtrend.
Gold reached $4,369.56 early Wednesday and turned lower before it could test the $4,384.59 to $4,405.59 retracement zone. The failed rally leaves sellers in control below that area.
The market is testing the short-term 50% level at $4,319.60. The 50-day moving average at $4,307.01 sits just below it. A sustained move through the moving average could trigger a break into the support cluster at the $4,235.17 main bottom and the $4,230.51 61.8% level.
My bias is to the downside because the daily swing chart is down, the dollar has resumed its recovery, and yields are holding close to last week’s high. Reclaiming the retracement zone would weaken the bearish outlook. Taking out the 50-day moving average would strengthen it.
What to Watch The dollar is the first screen. It recovered 100.561 after failing there Tuesday. The 101.327 to 101.640 range is the next test. Gold does not need a new dollar high to stay under pressure. It needs the dollar to hold above 100.561 and keep overseas buyers paying more for the metal.
The 10-year is holding above 4.920% after two tests. A break under that level gives gold buyers their first real help from the rate market this week. A move back through 5% puts the pressure right back on. The UNGA sessions are live. The Iran reports moved crude without a deal. A real step forward keeps oil lower and takes one argument away from the hawks. A setback gives the Fed story another leg.
Gold is sitting on the 50% level with the 50-day just below it. The support cluster near $4,235 is the next target if the average gives way. The ETF and central bank demand underneath the market is real. The daily trade belongs to the dollar and yields. Until one of them cracks, gold keeps testing support and sellers keep sitting inside the retracement zone above.
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Hello fellow traders. In this technical blog, we’ll take a quick look at the Elliott Wave charts for Silver (XAGUSD) published in the members’ area of our website. As our members know, Silver has rallied from our buying zone as expected. The commodity may still be trading within the cycle that started from the 62.27 low. The recent pullback is a textbook example of an Elliott Wave Zig Zag pattern. In the analysis below, we’ll break down the pattern and show how we forecasted the path ahead.
Before we take a look at the real market example, let’s explain Elliott Wave Zigzag.
Elliott Wave Zigzag is the most popular corrective pattern in Elliott Wave theory . It’s made of 3 swings which have 5-3-5 inner structure. Inner swings are A,B,C where A =5 waves, B=3 waves and C=5 waves. That means A and C can be either impulsive waves or diagonals. (Leading Diagonal in case of wave A or Ending in case of wave C) . Waves A and C must meet all conditions of being 5 wave structure, such as: having RSI divergency between wave subdivisions, ideal Fibonacci extensions and ideal retracements.
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SILVER Elliott Wave 1 Hour Chart 09.22.2026 Silver is forming a 3-wave pullback from the recent highs. At the moment, the structure still looks incomplete. So far, we can count five waves down from the peak, suggesting that the pullback is forming an Elliott Wave Zig Zag pattern. Based on the current structure, we expect another 5-wave leg lower to complete the pullback. As our members know, we derive the buying zone by measuring the Equal Legs area with the Fibonacci Extension tool.
While price remains below the latest short-term high, marked as ((b)) black, the ideal target area comes at 65.15–64.13. Once Silver reaches this zone, we expect buyers to step in and take control. From there, we look for a strong bounce in at least three waves, with the potential for the rally to eventually reach new highs.
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Reminder : Our member chat rooms are open 24/7 and provide ongoing expert guidance on market trends and Elliott Wave analysis. Members are encouraged to ask questions about market structure and technical setups at any time. You can learn more about Elliott Wave Patterns at our Free Elliott Wave Educational Web Page
SILVER Elliott Wave 1 Hour Chart 09.22.2026 The commodity made the decline as expected. Price reached our target area at 65.15–64.13, the buying zone, and has already found support there. From this zone, we expect buyers to step in and push Silver higher, with the potential for a further rally toward new highs.
SILVER Elliott Wave 1 Hour Chart 09.23.2026 The price rallied as expected and made a new short-term high, confirming a bullish structure within the cycle from the 62.3 low. We now expect a 3-wave pullback to develop. The key level to watch is the B red low at 64.58. As long as this pivot holds, further upside can be seen in the C red leg.
Keep in mind that the market is dynamic, and the outlook may have changed in the meantime. Our member Chat Rooms are open 24 hours a day, Monday through Friday, on trading days, providing ongoing expert guidance on market trends and Elliott Wave analysis. Members can ask questions about market structure and technical setups at any time during trading days.
ElliottWave-Forecast has built its reputation on accurate technical analysis and a winning attitude. By successfully incorporating the Elliott Wave Theory with Market Correlation, Cycles, Proprietary Pivot System, we provide precise forecasts with up-to-date analysis for 52 instruments including Forex majors & crosses, Commodities and a number of Equity Indices from around the World. Our clients also have immediate access to our proprietary Actionable Trade Setups, Market Overview, 1 Hour, 4 Hour, Daily & Weekly Wave Counts. Weekend Webinar, Live Screen Sharing Sessions, Daily Technical Videos, Elliott Wave Setup videos, Educational Resources, and 24 Hour chat room where they are provided live updates and given answers to their questions.
Hello traders, In this technical blog, we’ll take a closer look at the Elliott Wave charts for GOLD (XAUUSD) published in the members’ area of our website.
Gold recently completed a 3-wave pullback and rallied from the Equal Legs area as expected. The commodity may still be trading within the cycle that started from the 4233.8 low.
In the analysis below, we’ll examine the current Elliott Wave structure, key technical levels, and how we mapped the path ahead.
GOLD Elliott Wave 1 Hour Asia Chart 09.22.2026 The current view suggests that GOLD is still correcting the cycle from the 4234.1 low. The commodity is forming a 3-wave correction, which may be unfolding as a Double Three pattern.While price remains below the current peak, marked as (x) blue, we expect another leg lower to complete the (y) blue wave.As our members know, we derive the buying zone by measuring the Equal Legs area with the Fibonacci Extension tool. The ideal target area comes at 4299-4281 (buying zone).
Once GOLD reaches this zone, we expect buyers to step in and take control. From there, we look for a strong bounce in at least three waves, with the potential for the rally to eventually reach new highs.
Reminder : Our member chat rooms are open 24/7 and provide ongoing expert guidance on market trends and Elliott Wave analysis. Members are encouraged to ask questions about market structure and technical setups at any time.
You can learn more about Elliott Wave Patterns at our Free Elliott Wave Educational Web Page
GOLD Elliott Wave 1 Hour London Chart 09.22.2026 The commodity made the expected decline and reached our target area at 4299–4281, the buying zone we identified in advance. Price has already found support there, with the pullback now counted as completed at the 4292 low. As long as price holds above 4292, we can consider wave ((ii)) completed, with wave ((iii)) potentially already in progress toward new highs.
However, a break below 4292 would suggest that the pullback may still be unfolding. In that case, the 4234 low would become increasingly vulnerable.
Keep in mind that the market is dynamic, and the outlook may have changed in the meantime. Our member Chat Rooms are open 24 hours a day, Monday through Friday, on trading days, providing ongoing expert guidance on market trends and Elliott Wave analysis. Members can ask questions about market structure and technical setups at any time during trading days.
ElliottWave-Forecast has built its reputation on accurate technical analysis and a winning attitude. By successfully incorporating the Elliott Wave Theory with Market Correlation, Cycles, Proprietary Pivot System, we provide precise forecasts with up-to-date analysis for 52 instruments including Forex majors & crosses, Commodities and a number of Equity Indices from around the World. Our clients also have immediate access to our proprietary Actionable Trade Setups, Market Overview, 1 Hour, 4 Hour, Daily & Weekly Wave Counts. Weekend Webinar, Live Screen Sharing Sessions, Daily Technical Videos, Elliott Wave Setup videos, Educational Resources, and 24 Hour chat room where they are provided live updates and given answers to their questions.
EUR/USD falls to a 10-week low despite Eurozone growth picking up
EUR/USD has fallen to a 10-week low, down around 2.4% over the past month amid USD strength and despite stronger-than-expected Eurozone PMI data.
Eurozone PMI data showed that business activity grew at a faster pace in September. The service sector PMI rose to 53.0, up from 51.6 in August and ahead of expectations of 51.7. Manufacturing PMI remained unchanged at 52.7, in line with forecasts, while the composite PMI, considered a good gauge of overall business activity, rose to 53.1, defying expectations of a decline to 51.5 and hitting a 41-month high.
Even solid economic data is failing to offer support to the euro, which is coming under increasing pressure amid a growing Fed-ECB divide.
Last week, the Federal Reserve hiked interest rates by 25 basis points and signalled that another rate hike could come before the end of the year, offering further support to the greenback, which now trades at a seven-week high.
The euro has a more complicated backdrop. Inflation risks remain high owing to the jump in energy prices linked to tensions in the Middle East, increasing costs for both households and businesses. However, the ECB faces the difficult balancing act of keeping inflation under control while avoiding unnecessary pressure on a fragile economy.
ECB Vice President Vogt noted that persistent energy costs could eventually weaken consumption and economic growth. This contrasts with the more hawkish stance heard from Fed officials this week.
The Fed-ECB divergence remains a clear driver for EUR/USD. The Fed is gearing up for additional hikes, while the ECB has less room to manoeuvre. The market is now pricing in a 53% probability of another Fed rate hike at the October meeting.
EUR/USD forecast – technical analysis
EUR/USD has broken down below its rising channel and is trading below its 50 and 200 EMAs, keeping the technical picture bearish. The price has fallen to 1.1415 at the time of writing, as sellers look towards 1.1350, the July 27 low. A break below here opens the door to a deeper sell-off towards 1.1300.
Any recovery would first need to rise above 1.1500. Above here, attention turns to 1.1570, the 200 EMA and horizontal resistance. A break above this area would put the pair on a more stable footing.
Gold under pressure as a stronger USD offsets falling oil prices
Gold has fallen towards $4,320 on Wednesday as the market weighs the latest developments surrounding the Middle East, easing inflation fears and expectations for further Fed rate hikes.
Markets have been following the latest U.S.-Iran talks, with Iran setting conditions for reopening the Strait of Hormuz, while President Trump has hailed good progress in discussions. At the same time, Saudi Arabia is working to restore oil flows through the East-West pipeline. Together, these developments have helped Brent fall below $100 a barrel as supply concerns ease.
The drop in oil prices should ease inflationary fears and reduce pressure for further Fed rate hikes, which would normally be supportive for gold.
However, at the same time, the dollar is trading at a two-month high on expectations that the Federal Reserve will keep interest rates elevated for longer in order to curb persistent inflation.
The Fed hiked rates by 25 basis points last week and pointed to further rate hikes before the end of the year. Fed speakers this week have also been supportive of further tightening. Richmond Fed President Tom Barkin warned that inflationary shocks could take time to subside, while Boston Fed President Susan Collins said she supported last week's rate hike amid concerns that future inflation could remain above target. The market is pricing in a 53% probability of a Fed rate hike in October.
This hawkish stance has helped the dollar rise to a two-month high, putting pressure on U.S.-dollar-denominated gold. While gold is seen as a hedge against inflation, its appeal fades when higher interest rates increase returns on yield-bearing investments.
Elsewhere, China's gold imports through August surpassed 1,000 tonnes, already exceeding the full-year total for 2025, amid strong investment demand.
Markets will now look to U.S. PMI data for clues about the health of the U.S. economy. Strong economic activity combined with signs of continued price pressures could boost the dollar and put further pressure on gold.
Gold forecast – technical analysis
After breaking out of the symmetrical triangle pattern, gold ran into resistance around $4,700 before easing back towards $4,320, where it is consolidating around the 23.6% Fibonacci retracement of the move from the $5,998 high to the $3,940 low, as well as the 50 and 200 EMAs.
Sellers will need to break below this area to turn attention towards $4,200 and then $4,100, the March low. A break below $4,100 would shift attention towards $3,940, the 2026 low.
Should support hold, buyers will look towards $4,500 and then $4,575, the 38.2% Fibonacci retracement. A rise above $4,700 would create a higher high, with buyers then looking towards $4,770, the 50% Fibonacci retracement, before $5,000 comes into focus.
AUDUSD pushes lower USD drives higher as the Australian dollar took another step towards this month's low with a test at the 0.7100 level. The Australian dollar took another step towards this month's low with a test at the 0.7100 level.
USD/JPY consolidated around 157.60 on Wednesday, with the Japanese yen falling for a fourth consecutive day. Amid Japan’s long weekend, markets are closely monitoring the possibility of currency intervention.
Concerns intensified following reports that the Bank of Japan conducted rate checks with market participants at the end of last week. Japanese authorities have previously intervened during periods of low holiday liquidity, so current USD/JPY levels are once again attracting heightened attention.
A strong US dollar is placing additional pressure on the yen. Hawkish comments from Federal Reserve officials are supporting expectations of further US rate hikes and keeping the US currency attractive.
The yen lost ground last week even after the Bank of Japan delivered an expected rate hike. Governor Kazuo Ueda reaffirmed his readiness to continue tightening monetary policy as economic conditions evolve, but noted that financial conditions would remain sufficiently accommodative to support the economy.
Technical Analysis
On the H4 USD/JPY chart, the market has formed a consolidation range below 158.00. A downside breakout could open the way for a decline towards 155.20.
The MACD indicator supports this bearish scenario. Its signal line remains above zero but is pointing firmly downwards.
On the H1 USD/JPY chart, the market completed an upward move towards 158.00, followed by a correction to 156.56. A triangle pattern has now formed.
A break above the upper boundary at 157.60 is expected, followed by a reversal lower towards 156.50, with the decline potentially extending towards 155.20.
The Stochastic oscillator supports the subsequent bearish scenario. Its signal line remains below 80 and appears poised to turn lower towards 20.
Conclusion USD/JPY is consolidating around 157.60 as the yen extends its losing streak to a fourth day. Markets remain alert to the possibility of currency intervention amid the long weekend in Japan, with reports that the BoJ conducted rate checks further heightening concerns.
At the same time, a strong US dollar continues to weigh on the yen as hawkish Fed comments support expectations of further US rate hikes. Although the BoJ raised rates last week and Governor Kazuo Ueda reaffirmed his readiness to tighten policy further, financial conditions are expected to remain sufficiently accommodative to support the Japanese economy.
From a technical perspective, a break above 157.60 is expected in the short term. Once this move is complete, the H1 scenario envisages a reversal towards 156.50, with the decline potentially extending towards 155.20. A downside breakout from the H4 consolidation range would reinforce the broader bearish scenario towards 155.20.
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The Pound-Euro rate could stay under pressure if UK PMIs soften, while steadier Eurozone activity may give the single currency an edge. The Pound Euro (GBP/EUR) exchange rate wavered marginally lower on Tuesday as markets reacted to the UK’s latest government borrowing figures and Confederation of British Industry (CBI) data.
At the time of writing, GBP/EUR was trading at around €1.1650, having wobbled slightly lower through the session.
Latest — Exchange Rates:
Pound to Euro (GBP/EUR): 1.166156 (0.00%)
Pound to Dollar (GBP/USD): 1.33623 (-0.05%)
Euro to Dollar (EUR/USD): 1.145842 (-0.04%)
DAILY RECAP:
The Pound (GBP) faced some pressure on Tuesday after the UK published its latest government borrowing figures.
The public deficit surged to £18.3bn in August, marking the second-highest August on record. The borrowing figure was well above market expectations for £15.7bn and the Office for Budget Responsibility’s (OBR) forecast for £14.8bn.
This raised concerns about the state of the public finances ahead of the Autumn Budget, with Chancellor John Healey facing a daunting challenge.
However, Sterling’s losses were contained by stronger-than-expected manufacturing data from the CBI.
A drop in oil prices also seemed to aid GBP. The sharp decline in crude prompted a drop in UK gilt yields, thereby lowering government borrowing costs. This helped to partially offset the concerns about the borrowing figures, as lower bond yields reduce the cost of servicing government debt.
Meanwhile, the Euro (EUR) was uncertain on Tuesday as a lack of data left the currency vulnerable to competing external pressures.
On one hand, political and geopolitical concerns pressured the single currency. Political uncertainty in Germany and simmering EU-Russia tensions generated headwinds.
However, the Euro was supported by the recent decline in oil prices as it eased energy security concerns across the bloc.
Near-Term GBP/EUR Forecast: PMIs in the Spotlight Looking forward, the preliminary PMI results for both the Eurozone and the UK are the focus for GBP/EUR on Wednesday.
In the Eurozone, manufacturing activity is forecast to have held steady in September while service sector activity is forecast to slow. Meanwhile, both manufacturing and services activity in the UK are expected to moderate.
If the releases print as expected, Sterling may find itself subdued against the Euro. However, any unexpected results may drive steeper movement in the Pound Euro pair.
Additionally, two speeches from European Central Bank (ECB) policymakers could influence the single currency. ECB Vice-President Boris Vujčić is due to speak in the morning, while Chief Economist Philip Lane is due to speak in the evening.
Vujčić is considered to be on the hawkish end of the spectrum, while Lane is seen as more dovish. As a result, mixed comments could muddle EUR’s directional bias.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Pound-Dollar rate could test fresh lows if UK PMIs weaken, while resilient US activity may reinforce Federal Reserve rate hike expectations. The Pound US Dollar (GBP/USD) exchange rate struck its worst levels since late July on Tuesday morning following the publication of the UK's latest borrowing data.
At the time of writing, GBP/USD was trading at around $1.3356. Slightly down on Tuesday’s opening levels, but above the almost two-month low struck earlier in the session.
Latest — Exchange Rates:
Pound to US Dollar (GBP/USD): 1.3356
DAILY RECAP:
The Pound (GBP) faced fresh selling pressure on Tuesday following an unwelcome jump in British government borrowing, which raised new questions about the Treasury's fiscal flexibility ahead of next month's Budget.
Official data from the Office for National Statistics (ONS) showed public sector net borrowing surged to £18.3bn in August, well ahead of the projected £15.7bn.
This unexpected deficit expansion highlights the acute fiscal constraints facing Chancellor John Healey, whose fiscal headroom continues to shrink ahead of his inaugural budget next month.
The US Dollar (USD) initially firmed on Tuesday, buoyed by risk-off flows and hawkish Federal Reserve interest rate expectations.
However, the 'Greenback' then pared almost all of its gains on reports that Iran is willing to reopen the Strait of Hormuz if the US takes steps to reduce military pressure.
The news sparked a pullback in global oil prices, with Brent crude slipping back below $100 per barrel for the first time in two weeks.
However, the recovery in risk appetite remained modest, as the proposed reopening remains conditional and the US has so far shown no signs it is willing to accept Tehran's terms.
Near-Term GBP/USD Forecast: Limited Data to Looking ahead, the Pound to US Dollar (GBP/USD) exchange rate may test fresh lows in mid-week trade with the publication of the UK's preliminary PMIs for September.
Consensus forecasts predict a moderation of activity across both the manufacturing and services sectors as the third quarter draws to a close.
A confirmation of softer business activity could dent investor appetite for the UK currency, particularly if traders bet that weaker domestic momentum will ensure the Bank of England (BoE) remains cautious regarding future interest rate hikes.
Meanwhile, while not as close watched as the ISM releases, the latest US S&P PMIs could influence the US Dollar on Wednesday afternoon.
Continued resilience in the US private sector is likely to cement Fed rate hike bets and underpin USD demand.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Pound-New Zealand Dollar could face further pressure if UK PMIs disappoint, while RBNZ inflation concerns may continue to support the Kiwi. The Pound to New Zealand Dollar (GBP/NZD) exchange rate was knocked on Tuesday, as the Reserve Bank of New Zealand’s (RBNZ) issued a fresh warning regarding inflation.
At the time of writing, GBP/NZD was trading at around NZ$2.3314. Down around 0.3% from the start of Tuesday's session.
Latest — Exchange Rates:
Pound to New Zealand Dollar (GBP/NZD): 2.333482 (-0.33%)
Euro to New Zealand Dollar (EUR/NZD): 2.000976 (-0.33%)
New Zealand Dollar to Dollar (NZD/USD): 0.57253 (+0.27%)
DAILY RECAP:
The New Zealand dollar (NZD) initially slipped to a new multi-week low during Tuesday's overnight session, before rebounding sharply, following comments from Reserve Bank of New Zealand Governor Anna Breman.
Breman raised fresh concern about the inflationary pressures posed by the recent spike in oil prices, warning that if higher energy costs endure, near-term inflation could come in above the bank's latest forecasts.
The comments offered some support to the New Zealand Dollar, as the prospect of stronger-than-expected inflation places more pressure on the RBNZ to raise rates more quickly, having signalled at its September meeting that it would pursue a gradual pace of tightening than markets had expected.
However, NZD's recovery was subsequently tempered at the start of the European trading session as demand for the 'kiwi' was undermined by growing risk aversion.
The Pound (GBP) came under modest selling pressure on Tuesday after UK public sector borrowing significantly exceeded expectations in August, adding to concerns over the government’s already limited fiscal headroom ahead of the upcoming Budget.
According to data published by the Office for National Statistics (ONS), public sector net borrowing climbed by £18.3bn in August, smashing forecasts it would only reach £15.7bn.
The latest figures provided an unwelcome reminder of the challenges facing Chancellor John Healey, who will have even less room to manoeuvre in his upcoming Autumn Budget.
Near-Term GBP/NZD Forecast: Sterling to Stumble on Weaker PMIs? Looking ahead, the Pound to New Zealand Dollar (GBP/NZD) exchange rate could face further headwinds in mid-week trade, with the publication of the UK's latest PMIs.
Both the manufacturing and services PMIs are forecast to report a moderation of growth in their respective sectors this month.
This is likely to sap Sterling sentiment, particularly if investors believe it might make the Bank of England (BoE) might be more hesitant to tighten monetary policy.
Meanwhile, in the absence of any notable NZD macroeconomic data, any movement in the 'kiwi' is likely to be tied to market risk dynamics, with the 'kiwi' potentially facing headwinds if sentiment continues to sour.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
With the Fed’s current trajectory, which aims to reach a terminal rate of 4.25%-4.50%, and Barkin’s remarks, it is highly likely that the target range will rise by another 25 bps by the end of the year. Despite a recent increase in odds for a rate hike in October, which now stands at around 53%, the greenback has appreciated against a basket of peers.
Although higher interest rates in the U.S. are historically positive for the euro, the recent hikes by the ECB and dovish outlook by most of its members means that the ECB will be behind the curve for an extended period. Falling energy prices mean that inflation will become less of a concern for the euro area.
The Bank of England (BoE) is in a delicate situation regarding interest rates. The BoE believes that further disruptions to the energy market could result in higher rates. Last week, the BoE kept rates at 3.75%. Currently, the markets expect there is a 65% chance the BoE will raise rates in November. Most market participants expect the BoE to raise rates four times in the next two years, each time by a quarter of a percent. Recently, economic data out of the UK has surprised to the upside. In August, UK retail sales rose. Also in August, UK economic growth was higher than expected.
Oil prices have the potential to move other asset prices in the foreseeable future. The U.S. and Iran have been in talks and have signaled they are willing to resolve their differences. Lower oil prices may reduce inflation and cause central banks to slow their pace of tightening.
The DXY (USD index) has the potential to appreciate; the EUR and GBP are expected to depreciate.
U.S. Dollar Index Technical Analysis: DXY Holds Above 100.53 as 100.83 Becomes the Next Upside Test
Gold and silver have been hard pressed to move this week between ongoing risks from inflation, the tightening of global central bank policies and conflicting safe haven demands. There are, however, definite signs that the world’s central bankers are increasing their determination to ‘fight’ inflation.
Last week, the Federal Reserve raised its key policy rate by 0.25% and signaled that more hikes may be on the way. Richmond Fed President Tom Barkin said this week that recent data have shown the U.S. economy continues to strengthen and that risks to the outlook remain tilted to the upside, especially with regard to inflation.
As for precious metals, Barkin said he no longer believes that recent inflation pressures can be explained by energy and other “first-round”shocks and that the U.S. central bank will most likely need to maintain its restrictive policy for an extended period of time. Given the current pace of inflation, he is most probably right.
Markets expect a 90% chance of another rate hike by the Fed this year. The Fed itself expect rates to rise this year. Meanwhile, the core inflation the Fed is most interested in is not expected to reach their 2% goal until 2029. With inflation expected to be elevated for an extended period of time, the opportunity cost of not holding income producing assets like Gold and Silver is expected to rise.
There are counterbalancing trends. Middle East tensions are bullish for both gold and silver as higher energy prices are inflationary. Saudi Arabia’s recent increase in oil exports is deflationary.
Silver shares similar trends to Gold. Silver has the additional support of a strong industrial base. Strong trends in electronics and renewable energy are supporting Silver demand and differentiating Silver from Gold.
The outlook for both Gold and Silver is bearish with additional tightening by the Fed. From a strategic viewpoint, the additional geopolitical and industrial trends should provide some offset to the expected bearish trends.
Gold Technical Analysis: XAU/USD Holds $4,334 Support as $4,370 Resistance Keeps the Triangle Intact
Gold – Chart Gold (XAU/USD) is currently just under the $4,346 level on the 1 hr chart. Currently price has support at $4,334 and resistance at the downsloping trendline. Price has tested the support level at $4,334 numerous times. Although price has support at $4,334, the overall trend remains down, as price has not been able to break the series of lower highs.
The first resistance is at $4,370. If price does break above $4,370, then the next level of resistance is at $4,398. If price breaks the $4,334 level, the next support levels are at $4,291 and $4,260.
Momentum is currently neutral. RSI is currently at the 50 level. I am neutral on the spot price of gold between $4,334 and $4,370. If the price of gold breaks above $4,398, I will be bullish on the spot price of gold. If price of gold breaks the support level at $4,334, I will be bearish and expect it to head to the $4,291 level.
Gold Price Forecast
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Silver – Chart Silver has found support around 66.70 on the 2 hour chart after correcting from the 64.53 to 65.72 area. The 65.72 area is a support to watch as price has been respecting a rising trendline by trading above it and the two moving averages. This gives the recent up move a stronger underpinning as compared to the previous bounce attempts.
An immediate resistance to watch is the 67.39 area. A move above that would bring the 68.34 area into focus, and beyond that the 69.66 and 71.18 areas. If price continues to move lower, the trendline and the 65.72 area would provide support, with the 64.53 area and 62.54 area coming into play lower.
The RSI is also bullish and indicates that the trend is rising. The moving averages are also providing a bullish signal. I like the long side of silver as long as it trades above the 65.72 area and rising trendline. A move below 65.72 would turn the trend bearish, and a break of 64.53 would open the 62.54 area to the downside. A break of the 67.39 area would support the rising trendline and open the 68.34 area to the upside.
