The Euro (EUR) is marginally higher to near 1.1625 against the US Dollar (USD) during the European trading session on Monday. The major currency pair trades broadly sideways amid an extended weekend in the United States (US) due to Labor Day.
This week, the major trigger for the major currency pair will be the European Central Bank’s (ECB) monetary policy announcement on Thursday and the release of the United States (US) Consumer Price Index (CPI) data on Friday.
Euro focus turns to ECBAccording to Deutsche Bank, the upcoming ECB policy decision on Thursday will be “the key event” for European markets. The bank’s European economists “expect a 25bp rate increase, taking the deposit rate to 2.50%,” and they note that investors will be closely watching “any guidance regarding the likelihood of further tightening” beyond this week’s move.
On the US Dollar front, investors will pay close attention to the US CPI data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.
Meanwhile, upbeat US Nonfarm Payrolls (NFP) data has prompted Fed’s interest rate hike expectations.
Strategists at BNY highlight that last week’s upside surprise in U.S. labour data, with "nonfarm payrolls (NFP) at 162,000 vs. the expected 55,000," pushed "market-implied odds of a September Fed hike back up to around 60% from 50%," underscoring "how much rate expectations remain tethered to the data backdrop.
EUR/USD Technical Analysis
In the daily chart, EUR/USD trades at 1.1623, keeping a modest bullish tone as it holds above the 20-day Exponential Moving Average (EMA) at 1.1600.
The pair consolidates after its recent advance, and the Relative Strength Index (RSI) around 56 suggests constructive but not overextended upside momentum.
On the downside, immediate support emerges at the 20-day EMA near 1.1600, with a break below this level likely to weaken the current upward bias and open the door to a deeper pullback towards the psychological level of 1.1500. Looking up, the August high at 1.1713 is the immediate resistance level, followed by the April high at 1.1849.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator ECB Main Refinancing Operations Rate One of the three key interest rates set by the European Central Bank (ECB), the main refinancing operations rate is the interest rate the ECB charges to banks for one-week long loans. It is announced by the European Central Bank at its eight scheduled annual meetings. If the ECB expects inflation to rise, it will increase its interest rates to bring it back down to its 2% target. This tends to be bullish for the Euro (EUR), since it attracts more foreign capital inflows. Likewise, if the ECB sees inflation falling it may cut the main refinancing operations rate to encourage banks to borrow and lend more, in the hope of driving economic growth. This tends to weaken the Euro as it reduces its attractiveness as a place for investors to park capital.
Gold (XAU/USD) is consolidating after its recent pullback as markets reassess the outlook for US interest rates. The latest employment report showed stronger job growth and a steady unemployment rate. This increased expectations that the Federal Reserve could raise rates at its September meeting. Rising oil prices have also added to inflation concerns. Markets now turn to upcoming US inflation data for further direction on interest rates and gold.
Gold price remains under pressure as US jobs data lift Fed hike betsGold is consolidating after its recent decline as firm US labor data keeps September rate hike expectations elevated. Nonfarm Payrolls increased by 162,000 in August, compared with expectations for an increase of 55,000. The unemployment rate remained unchanged at 4.1%. The Labor Force Participation Rate also increased. The figures showed that the US labor market remains firm despite earlier signs of weakness.
The strong employment report has increased expectations that the Federal Reserve could raise interest rates at its September meeting. Markets are pricing in around a 58% chance of a rate increase. Higher interest rates can weigh on gold because the precious metal does not provide interest income. The stronger labor market also gives the Fed more room to focus on inflation risks. This shift in rate expectations has kept gold under pressure after its recent decline.
Rising oil prices are adding another layer of uncertainty. Higher energy costs could keep inflation elevated and support a tighter policy stance from major central banks. At the same time, the US Dollar has continued to decline despite stronger employment data. This has helped limit further pressure on gold. Markets now focus on the upcoming US inflation figures. A stronger inflation report could increase expectations for a September rate hike, while softer data could reduce those expectations.
Gold price consolidates above rising trendline as broadening wedge remains intactThe gold chart below shows price trading within a large ascending broadening wedge. Price has remained between the two rising trendlines that form the pattern. Gold previously climbed toward the upper part of the wedge before turning lower. The latest decline has shifted attention toward the lower rising trendline, which remains an important support for the current structure.
Recently, gold formed a V-shaped recovery from the lower support of the ascending broadening wedge. Price climbed from the rising trendline and moved toward the $4,500 resistance. However, gold failed to break above this level and turned lower again. Price is holding above the rising support trendline, keeping the structure intact.
The $4,350 support is now the key technical level to monitor. Holding above this level would keep gold within the ascending broadening wedge and leave room for another recovery toward $4,500. A break above $4,500 could strengthen the technical structure. However, a sustained move below $4,350 would weaken the current setup and could bring lower support levels into focus.
Gold outlook: US inflation data could shape the next moveGold remains under pressure as strong US employment data increase expectations for a Federal Reserve rate hike. Rising oil prices also keep inflation concerns in focus. However, weakness in the US Dollar and geopolitical uncertainty continue to provide some support. From a technical perspective, gold is holding above the rising trendline of the ascending broadening wedge. The $4,350 support region is now in focus, while upcoming US inflation data could determine the next major direction.
The Euro hit a correction towards the target and support of 1.1570, as the market still holds above this support since last week. As we see from the chart and as long as the market holds above this support, a rebound towards 1.1710 is likely.
Silver (XAG/USD) trades under pressure on Monday, falling 0.79% on the day to around $65.70 at the time of writing. The white metal is feeling the impact of the strong US employment report, which has revived expectations of an interest rate hike by the Federal Reserve (Fed) and supports the US Dollar (USD).
The Nonfarm Payrolls (NFP) report released on Friday showed that the US economy added 162K jobs in August, well above the market consensus of 56K. The Unemployment Rate remained unchanged at 4.1%, in line with expectations, while annual Average Hourly Earnings growth eased slightly to 3.1% from 3.2% previously.
These figures reinforce the view that the US labor market remains strong enough to allow the Fed to maintain a restrictive monetary policy stance. Inflation risks stemming from higher energy prices are also contributing to expectations of a potential interest rate hike as soon as the central bank's next meeting.
The prospect of higher US interest rates is a negative factor for Silver, which does not offer any yield. At the same time, it provides support to the US Dollar, making the precious metal more expensive for investors using other currencies.
However, expectations of monetary tightening remain dependent on incoming data. Fed Governor Christopher Waller said on Thursday that he would favor keeping interest rates unchanged if upcoming indicators confirmed that inflationary pressures were easing.
Investors' attention therefore turns to the US Producer Price Index (PPI) and Consumer Price Index (CPI), due on Thursday and Friday, respectively. These releases should provide fresh clues about the inflation trajectory and could play a key role in shaping expectations for the Fed's next policy decision.
Meanwhile, escalating tensions between the US and Iran in the Strait of Hormuz keep a geopolitical risk premium embedded in financial markets. US forces struck three Iranian Oil tankers on Saturday, while Iran's Islamic Revolutionary Guard Corps said it had targeted six vessels in retaliation.
The exchange of attacks is fueling concerns over the security of shipping through the strategic waterway and the risk of prolonged disruptions to energy supplies from the Middle East. This backdrop supports energy prices and reinforces inflation risks, potentially keeping expectations of restrictive Fed monetary policy elevated.
Geopolitical tensions could nevertheless limit Silver's downside by simultaneously fueling demand for safe-haven assets. The white metal therefore remains caught between potential support from defensive flows and pressure from higher US interest rate expectations and a stronger US Dollar.
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.
USD/JPY is caught in a genuine crossfire this week, and Thursday’s move said it all: the yen surged nearly 2% in a single session, touching a one-month high near 155.28, as traders simultaneously priced in higher odds of a Bank of Japan hike and stayed alert to fresh intervention risk following July’s joint US-Japan operation. BOJ board member Hajime Takata has even floated the possibility of outsized or back-to-back hikes to contain inflation, while Governor Ueda’s comments this week reinforced expectations of a move as early as this month.
The dollar side offers no clean counter-narrative either. August’s jobs report reshaped the Fed debate almost overnight, with payrolls coming in well above the 55,000 consensus, briefly reviving September hike bets that had cooled sharply after Fed Governor Waller signalled comfort with holding rates if inflation keeps easing. Markets are now split roughly 50–60% on a September move, leaving Chair Kevin Warsh’s guidance, alongside the CPI and PPI prints later this week, as the real tie-breakers.
The result: a yen gaining genuine independent strength from hawkish BOJ signals, against a dollar whose own rate path remains stuck between conflicting data, leaving USD/JPY’s next move hostage to whichever central bank commits first.
Technical Analysis of USD/JPY
As the USD/JPY chart shows, the pair has broken sharply below its long-term ascending trendline following Thursday’s yen surge, with price now sitting right at the 155.00 support zone after decisively rejecting the confluence of the descending trendline, the 100 EMA and the resistance zone at the crucial 160.00 level.
Bullish Scenario
Should buyers defend the 155.00–156.00 support and reclaim the descending trendline, the path would open towards a retest of the 100-period EMA near 159.50, with a stronger recovery potentially targeting the 160.00–161.00 resistance zone that has capped rallies since May.
Bearish Scenario
Conversely, a confirmed break below the 155.00–156.00 support would expose the pair to the next crucial level, with a deeper slide risking a retest of the 152.00–153.00 zone, the low that anchored the entire 2026 uptrend.
With price having just lost its long-term ascending trendline and now testing critical support directly beneath the 100-period EMA, USD/JPY looks poised for a decisive move. Will the BoJ’s hawkish momentum drag the pair into a genuine trend reversal, or will the dollar find its footing first?
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The USD/JPY and DXY charts are approaching defining support levels, creating a conflict between short-term weakness, long-term bullish continuation risks, and the risk of a broader structural bearish shift.
Several factors are contributing to volatility risks across both charts:
Rising U.S. Treasury yields: The U.S. 10-year Treasury yield recently reached a new 2026 high near 4.8%, widening the interest-rate differential between the United States and Japan
Bank of Japan rate-hike expectations: Markets are pricing in the possibility of a 25-basis-point rate hike at the BOJ meeting scheduled for September 17–18. This expectation is providing short-term support for the yen.
Crude oil and geopolitical risks: Crude oil prices have broken above a 7-month resistance level, increasing concerns about supply disruptions and inflation. This could support the dollar through safe-haven demand, although persistently higher oil prices could also raise concerns about global growth.
As of September 7, the fundamental and technical picture remains tilted towards geopolitical risks. Short-term dollar weakness is visible, but the broader risk narrative continues to support the possibility of renewed dollar strength if inflation, yields, and geopolitical tensions remain elevated.
DXY Price Outlook: Monthly Time Frame — Log Scale
Source: TradingView
Despite the DXY breaking below its 2026 uptrend, signaling short-term weakness, the longer-term structure remains tilted to the upside.
The key downside levels I am watching align with the Fibonacci retracement levels of the 2026 uptrend: 98.50, 98, 97 and 95.50. The 95.50 area is the defining barrier between a structural breakdown of the 18-year uptrend and a potential continuation of the longer-term bullish structure.
On the upside, reclaiming the 2026 uptrend near 100.30, followed by a move above 101 and 101.70, would restore the dollar’s strength against major markets. Such a move could lift the DXY toward new 2026 highs and add further pressure on Japanese officials facing persistent yen weakness.
This situation could become more critical if the interest-rate differential between the United States and Japan continues to widen.
Key DXY Scenarios
Bullish scenario: A recovery above 100.30, followed by a breakout above 101 and 101.70, would signal renewed dollar strength and support a move toward new yearly highs.
Bearish scenario: A sustained breakdown below 98.50 and 98 would increase the risk of a deeper correction toward 97 and 95.50. A clear break below 95.50 would confirm a more significant structural shift and challenge the long-term bullish trend.
USD/JPY Price Outlook: Weekly Time Frame — Log Scale
Source: TradingView
Technically, USD/JPY is breaking below a 3-month support level, signaling short-term yen strength while simultaneously approaching an uptrend support zone that has been in place since 2023.
Key Patterns and Scenarios in Focus
The breakdown below the April 2025–July 2026 channel points to short-term weakness and aligns with the Fibonacci retracement levels of that advance.
Price action is currently testing a breakdown below 154.80, the 38.2% retracement level. A sustained move below this level could target 152, corresponding to the 50% retracement, followed by 149 near the 61.8% retracement level.
The 149 area could become an important zone for a potential long-term rebound, aligning with the golden ratio, the broader 2023–2026 uptrend and increasingly oversold momentum conditions.
Bearish scenario: A clear breakdown below 149 would confirm broader structural weakness and increase the risk of a deeper correction in USD/JPY.
Bullish scenario: Holding above 149 would preserve the broader bullish structure. On the upside, reclaiming the 2026 uptrend boundaries near 158.40, 161 and 164 would restore USD/JPY strength and expose the upper channel boundary near 170.
Short-term weakness, the potential for long-term dollar strength and persistent geopolitical risks are shaping the outlook for USD/JPY and the DXY.
The next major catalysts include the U.S. CPI report on Friday, the BOJ meeting on September 17–18 and the FOMC meeting on September 16. The reaction in Treasury yields and the direction of crude oil prices will remain critical in determining whether the current weakness develops into a deeper structural decline or becomes another correction within a broader bullish trend.
The Euro (EUR) is trading lower against the British Pound (GBP) following mixed Eurozone macroeconomic figures on Monday. The EUR/GBP pair is testing support at a previous resistance area, at 0.8585 ahead of the US session opening, after failing to find acceptance above the 186.00 area last week.
In the Eurozone, data released by Destatis earlier on Monday revealed that the economy grew at a faster rate than previously thought in the second quarter, as the Gross Domestic Product (GDP) was revised up to 0.6% from the previously estimated 0.4% growth, which is a significant improvement from the first quarter’s 0.1% uptick. Year-over-year, Eurozone GDP has been revised to 1.2% growth from previous estimates of a 1% increase.
Earlier on the day, however, downbeat German Industrial Production figures cast doubt on the Eurozone's growth outlook and put negative pressure on the Euro. German factory output dropped 1.1% in July, against market expectations of a 0.3% increase, while June's reading was revised down to 0% from the 0.2% rise previously estimated.
In the UK, the Lloyds Housing Price Index, released earlier on Monday, showed that property prices contracted against expectations in August, but these figures failed to make any significant impact on the Pound.
Technical Analysis: Key support is at the 0.8565 area
EUR/GBP trades just above previous resistance, now turned support at 0.8585, with momentum indicators on intraday charts turning bearish. The Relative Strength Index (14) on the 4-hour chart has eased back toward 51, hinting at fading upside momentum, while the Moving Average Convergence Divergence (MACD) has slipped slightly negative, suggesting consolidation rather than a clear directional push.
A break below 0.8585 (July 30, August 19 highs) would expose the 0.8565 area where the trendline from mid-August lows crosses the September 2 trough. A break below here would negate the upside trend. On the topside, last week's high at 0.8607 is closing the path towards the June 29 and 26 peaks at 0.8632 and 0.8651 respectively.
(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 US Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.09%-0.16%-1.04%-0.14%-0.23%-0.05%-0.16%EUR0.09%-0.06%-0.94%-0.08%-0.14%0.03%-0.06%GBP0.16%0.06%-0.86%-0.02%-0.07%0.10%-0.01%JPY1.04%0.94%0.86%0.90%0.81%1.00%0.91%CAD0.14%0.08%0.02%-0.90%-0.10%0.09%-0.02%AUD0.23%0.14%0.07%-0.81%0.10%0.18%0.07%NZD0.05%-0.03%-0.10%-1.00%-0.09%-0.18%-0.11%CHF0.16%0.06%0.00%-0.91%0.02%-0.07%0.11% 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).
The Pound-Australian Dollar could remain under pressure if UK GDP disappoints, although weaker Australian confidence data may offer Sterling some relief. The Pound to Australian Dollar (GBP/AUD) exchange rate slumped to a fresh three-month low last week as the 'Aussie' continued to be underpinned by hawkish Reserve Bank of Australia (RBA) interest rate speculation.
At the time of writing, GBP/AUD was trading at AU$1.8796. Down roughly 0.5% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.877176 (+0.05%)
Pound to Dollar (GBP/USD): 1.351857 (+0.01%)
DAILY RECAP:
The Australian Dollar (AUD) initially faced some headwinds last week as the turmoil in the global bond market prompted investors to limit exposure to risk-sensitive currencies.
However, the ‘Aussie’ subsequently staged a strong recovery, climbing to fresh multi-month highs against many of its peers following the publication of Australia's latest GDP figures.
According to data published by the Australian Bureau of Statistics (ABS), Australia's economy expanded by 0.4% in the second quarter, exceeding forecasts for a 0.3% expansion, while annual growth accelerated to 2.1% – also ahead of expectations for a 1.8% increase.
The data reinforced RBA rate hike expectations, with the odds of another 25-basis-point rate hike at the central bank’s September meeting rising to around 70%, up from roughly 50% before the GDP figures were released.
The Pound (GBP) faced significant resistance last week, with the currency being hit particularly hard by the sell-off across global bond markets.
UK gilts came under particularly heavy pressure, with the yield on 10-year government bonds climbing above 5.25% and briefly reaching its highest level since 2008, while 30-year gilt yields approached 5.9%, marking their highest level since 1998.
The moves reflected the broader global bond sell-off, but concerns over the UK's fiscal position added to the pressure on Sterling, with GBP investors concerned that the increase in borrowing costs could further erode the fiscal headroom available to Chancellor John Healey ahead of his first Autumn Budget.
Near-Term GBP/AUD Forecast: Soft UK GDP Print to Sap Sterling Sentiment? Turning to this week's session, the Pound to Australian Dollar exchange rate may come under pressure with the publication of the UK's latest GDP figures.
Consensus estimates predict month-on-month GDP growth will have slowed in July, which could weigh on Sterling as it further complicates the Bank of England's (BoE) policy outlook.
Meanwhile, Australia's latest consumer and business confidence figures may weigh on the 'Aussie' this week if they point to a deterioration in morale.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Pound-Canadian Dollar could extend its decline if UK GDP disappoints, while higher oil prices may provide further support for the Loonie. The Pound to Canadian Dollar (GBP/CAD) exchange rate retreated last week as fears that a rise in borrowing costs could pose a risk to the UK's upcoming Autumn budget.
At the time of writing, the GBP/CAD exchange rate traded at CA$1.8718. Down around 0.5% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Canadian Dollar (GBP/CAD): 1.87 (-0.02%)
Euro to Canadian Dollar (EUR/CAD): 1.605723 (-0.08%)
Dollar to Canadian Dollar (USD/CAD): 1.38328 (-0.03%)
DAILY RECAP:
Pound (GBP) struggled to make headway last week, with Sterling bearing the brunt of the turbulence sweeping through global bond markets.
UK gilts were among the hardest hit, with the 10-year gilt yield breaking above 5.25% and striking a 19-year high, while yields on 30-year gilts climbed to their highest levels since 1998.
Although the sharp rise in yields formed part of a broader sell-off in government bonds, concerns that higher borrowing costs could eat further into the limited fiscal headroom available to Chancellor John Healey ahead of his first Autumn Budget, meant there was a disproportionate impact on Sterling.
The Canadian dollar (CAD) got off to an underwhelming start last week, with CAD demand being undermined by lingering concerns about a potential US-Canada trade war.
However, the 'Loonie' then received a shot in the arm in mid-week trade following the Bank of Canada's (BoC) latest interest rate decision.
While the BoC kept interest rates on hold as forecast, its guidance warned of upside risks to inflation, which investors interpreted as a hawkish nod to a potential need to tighten monetary policy in the future.
The end of the week then saw the publication of Canada's latest jobs report, with the 'loonie' coming under pressure, following a shock contraction in employment growth last month.
Near-Term GBP/CAD Forecast: Slowdown in UK GDP to Weigh on Sterling? Looking ahead to this week's session, the Pound to Canadian Dollar (GBP/CAD) exchange rate may extend its losses as markets digest the UK's latest GDP figures.
Economists expect month-on-month economic growth to have slowed in July, with a soft reading potentially likely to drag on Sterling if it is seen as weakening the odds of a Bank of England (BoE) rate hike later in the year.
Meanwhile, in the absence of any notable domestic data, movement in the 'loonie' may be tied to oil price dynamics, with further uncertainty in the Middle East potentially propelling the commodity and CAD exchange rates higher.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Pound-New Zealand Dollar could stay supported if Healey reassures bond markets, although softer UK GDP risks limiting Sterling’s recovery. The Pound New Zealand Dollar (GBP/NZD) exchange rate briefly hit a seven-week high last week as the ‘Kiwi’ tumbled following the Reserve Bank of New Zealand’s (RBNZ) interest rate decision, although Sterling struggled to sustain its upside.
At the time of writing, GBP/NZD traded at NZ$2.2988, up 0.4% on the week.
Latest — Exchange Rates:
Pound to New Zealand Dollar (GBP/NZD): 2.299609 (+0.04%)
Euro to New Zealand Dollar (EUR/NZD): 1.975009 (0.00%)
New Zealand Dollar to Dollar (NZD/USD): 0.587861 (-0.03%)
DAILY RECAP:
The New Zealand Dollar (NZD) edged lower through the start of the week as an anxious mood dampened the risk-sensitive currency’s appeal.
The ‘Kiwi’ then took a tumble on Wednesday in the wake of the RBNZ’s interest rate decision. Although the bank hiked rates by 25 basis points, as expected, the accompanying commentary said that a rate hike this month reduced the likelihood of bigger increases later in the year.
Through the second half of the week, the New Zealand Dollar managed to regain some ground as market sentiment improved.
Meanwhile, the Pound (GBP) was muted on Monday due to a UK bank holiday before facing mixed movement on Tuesday. An uptick in Bank of England (BoE) interest rate hike bets supported Sterling, but surging bond yields unsettled GBP investors.
The Pound struggled against its stronger peers on Wednesday as gilt yields rose again, hitting a 19-year high. However, GBP was able to climb against the weaker NZD.
Bond market jitters eventually saw Sterling surrender some of its gains on Thursday, while a weaker-than-expected final services PMI also dented GBP.
By the end of the week, however, the Pound did remain slightly up against the ‘Kiwi’ Dollar.
Near-Term GBP/NZD Forecast: UK GDP in Focus Looking ahead, UK Chancellor John Healey is expected to deliver his first major speech on Monday, with the market response potentially driving notable movement in the Pound.
Healey will likely focus on how to support the country’s fragile economic growth, while also wanting to encourage bond markets that he will stick to the government’s fiscal rules.
A positive reception to his speech could lift GBP, while Sterling could stumble if the speech falls flat or if Healey spooks the bond market.
The key UK data release for the week will be the latest GDP figures on Friday. If the British economy slowed in July, as expected, the Pound could end the week on the back foot.
Meanwhile, New Zealand’s latest manufacturing PMI is due on Thursday. A slight slowdown in factory activity in August could mute NZD.
Elsewhere, market risk appetite could influence the ‘Kiwi’, with any shifts potentially driving volatility.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Gold prices edged lower in early London trade after prices fell on Friday to ensure of a second weekly close in the negative territory. While I don’t necessarily expect to see any major fireworks today given the fact the US is out on holiday, it is worth mentioning that thinner conditions could amply moves if we see the break of some key levels. Anyway, regardless of today’s price action this could still be a decisive week for the precious metal. We have key inflation data coming up later this week while growing tensions in the Middle East continue to underpin oil prices, further fanning inflationary concerns. Gold investors are thus weighing haven demand against rising bond yields and elevated interest rate expectations. While increased haven demand may be one of the major supporting factors, it is the steady climb in bond yields and rising interest rate expectations which make the near-term gold forecast challenging, as zero yielding assets become less attractive in this environment.
What will investors be watching this week? After the stronger-than-expected jobs report last week, the focus is turning to inflation this week.
Friday’s payrolls report suggest the US labour market was perhaps stronger than what recent data had indicated. The combination of stronger employment and relatively firm wage growth has underscored concerns that inflation might be more persistent than hoped, potentially leading the Fed to raise rates and maintain them at higher levels for an extended period.
With the US Labour Day holiday causing a delay in this week’s key data releases, the US CPI report is now due on Friday and is set to be pivotal for the financial markets. Additionally, we have the PPI report on Thursday, coinciding with the ECB’s interest rate decision, which is likely to be a hike.
Meanwhile, there appears to be a bit of a spilt within the Fed, with Chair Kevin Warsh adopting a hawkish stance at the Jackson Hole summit, while Governor Christopher Waller was not so hawkish last week, preferring to see the inflation data before deciding on a vote to hike rates or maintain status quo. This makes the CPI release a crucial piece of economic data, being the last major update before the Fed’s next meeting.
Should inflation come in hotter than anticipated, markets will cement expectations for a September rate hike, which could exert renewed pressure on the near-term gold forecast, especially if Treasury yields rise further.
On the flip side, a softer CPI reading could rekindle hopes for holding rates unchanged, potentially serving as another catalyst for gold to climb higher.
Gold and US indices dipped on Friday following the jobs report, as Treasury yields increased and expectations for a September Fed rate hike grew. Markets are now pricing in about a 59% probability of a hike, up from 49% prior to the jobs figures.
Technical gold forecast and key levels to watch From a technical analysis perspective, the direction of gold prices remains quite uncertain due to the recent volatile price action.
The fact that gold has fallen for the second consecutive week as of Friday suggests that the bearish trend may have resumed.
Source: TradingView.com This indicates that the prior bullish run, which began in early August, may have lost momentum, similar to what we observed earlier this year in March. Back then, XAUUSD rallied away from the $4100 area, appeared quite bullish for a few weeks, but then the momentum faded, and selling resumed. We’re seeing a similar pattern this time around, with many of the macro factors that were at play in March still present, such as rising bond yields and oil prices, along with ongoing concerns over inflation.
From a macro perspective, not much has changed to suggest that this time will be different.
However, that doesn’t necessarily mean we’ll see a repeat of past price action.
Nevertheless, the fact that gold has fallen for the second consecutive week does put the market in a bit of a spot of bother, especially considering the break below the $4,310 area, the previous low prior to the last leg of the recent rally.
That level gave way on Wednesday, before the price quickly reclaimed it and ran away from there on the session and the day after, but Friday’s bearish close following the strong US jobs report has put a spanner in the works.
Crucially, the key areas of resistance have held, at least for now.
Among those, the $4,500 level was a previous support and resistance, with $4,461 also providing some resistance.
Above these levels, we have the $4565 area to the $4600 area, which was the base of the most recent selling.
On the downside, the key level to watch remains around the $4,310 area, a level tested last week, briefly broke below, but couldn’t hold.
So, if we do see it retested once more, we could well witness a more decisive break to the downside this time around.
If that’s the case, then the $4,100 level would quickly come back into focus, and below that, the $4000 area.
Overall, the near-term risks to the gold forecast remains tilted to the downside, given the rising bond yields and oil prices, as well as Friday’s stronger payrolls data, all of which continue to boost expectations about a Fed rate hike.
The rupee reached a multi-month high thanks to heavy foreign currency inflows, briefly trading below 94.50/USD The RBI's dollar-swap facility brought in $136 billion, largely from $127.2 billion in foreign currency non-resident (FCNR) deposits Investors should monitor several factors including oil prices, Federal Reserve policy signals, the sustainability of RBI support, and FPI flows. The Indian rupee has stayed under 94.50 against the US dollar for three sessions straight, almost hitting its lowest point since late June.
This isn’t just a one-day thing, but it’s part of a broader USD/INR slide that began in late July. The rupee’s appreciation is notable because it’s happening even as crude oil prices, India’s biggest import cost, are climbing.
Where the Rupee Is Drawing Its Strength Usually, crude oil prices above $95 a barrel hurt India, a country that imports over 80% of its oil. Higher energy prices widen the Current Account Deficit (CAD) and make domestic importers buy more US dollars to pay bills, driving USD/INR higher.
The rupee’s main support comes from strong policy moves by the Reserve Bank of India (RBI). In June, the central bank launched specific steps to attract foreign-currency deposits and borrowings.
These steps included fully covering hedging costs for banks taking three-to-five-year FCNR(B) deposits and offering favorable swap arrangements for external commercial borrowings from public-sector entities.
By the end of August, official figures showed these initiatives brought in about $127 billion from FCNR(B) deposits alone, contributing to roughly $136 billion in total inflows.
Why Strength Persists Despite Rising Oil Prices Higher oil prices usually mean more dollar demand from refiners and a larger current-account deficit. Brent crude recently neared $97 a barrel, due to rising tensions between the United States and Iran, which raised worries about supplies through the Strait of Hormuz.
But for now, the RBI’s facilitated inflows have offset this pressure. The central bank’s active market participation has absorbed a significant portion of oil-related dollar demand, while the unwinding of short positions against the rupee has contributed to additional dollar supply.
What Investors Should Watch Closely In the short term, investors will be watching three main things. First, oil prices and any new developments in West Asian tensions are key.
Escalation of tensions around transit routes like the Strait of Hormuz could push crude oil prices toward $100 per barrel, potentially impacting India’s trade balance.
Next, US monetary policy will matter. The Federal Reserve’s September meeting and upcoming inflation data, especially, will shape the dollar’s broader movement and how markets view risk assets. Stronger US economic data or a more hawkish stance from the Fed could lead to a rapid reversal of recent gains for emerging market currencies.
Finally, the RBI’s net short forward dollar position, currently around $137 billion, has over $22 billion in maturities coming up in the next few months. Handling these maturities might require the central bank to buy dollars, which would naturally limit the rupee from appreciating further.
Why is the rupee strengthening despite rising oil prices?
The RBI’s FCNR(B) deposit scheme has channeled over $130 billion in dollar inflows since June. It’s now helping offset the dollar demand sparked by high oil prices and crude tensions.
What risks could reverse the rupee’s recent gains in the coming months?
The rupee’s recent gains could reverse in the coming months if crude oil prices stay stubbornly above $95, current account deficits widen, or temporary FCNR swap inflows conclude.
Silver prices (XAG/USD) fell on Monday, according to FXStreet data. Silver trades at $65.90 per troy ounce, down 0.47% from the $66.21 it cost on Friday.
Silver prices have decreased by 7.29% 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 66.94 on Monday, broadly unchanged from 66.91 on Friday.
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.
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TL;DR: Friday’s US CPI can push Gold toward either edge of its 4,230–4,697 range, but the Fed’s expected rate peak, oil’s physical normalization, and the Dollar debasement trade are all bigger stories than one inflation print — and only those can actually break the range.
Friday Can Move Gold. Something Bigger Has to Break It. Friday’s CPI could send Gold higher or lower without actually deciding very much. That may sound counterintuitive when inflation is the decisive input for a Fed meeting just five days later. CME FedWatch currently puts a September hike at 58.6%, against 41.4% for a hold, leaving plenty of room for Friday’s number to shift the immediate odds.
But Gold’s problem is bigger than September. Since reaching 4,697.07, the metal has failed in both directions. The selloff never developed into a sustained breakdown. The recovery stalled at 4,510.90. Momentum has faded without collapsing, leaving Gold rotating inside a much broader technical structure whose important boundaries sit around 4,230 and 4,697.
The market is indecisive for a reason. The Fed path is already difficult to make dramatically more hawkish. At the same time, the catalysts capable of producing a genuine upside breakout are larger stories than anything on this week’s calendar. CPI can move Gold within the range. Something bigger probably has to break it.
The Fed Can Still Change the Timing, but How Much Can It Change the Ceiling? The September meeting itself is unresolved. Markets currently see a modestly better-than-even chance the Fed raises rates by 25bp to 3.75–4.00% on September 16, while a hold at 3.50–3.75% still carries substantial probability. Friday’s inflation report can clearly move that balance.
But follow the curve beyond September and a different picture appears. Markets price roughly 0.83 cumulative hikes by October, 1.34 by December, 1.57 by January, and 1.94 by March 2027. From there, the expected path largely flattens, with the 4.00–4.25% range becoming the largest single probability bucket from March onward.
Put simply, markets are comfortable pricing one hike. They substantially price a second. They’re not seriously building a third into the base case. That matters enormously for Gold.
A hot CPI report can make September more likely. It can bring the second hike forward. It can push Treasury yields higher and strengthen the Dollar. But if the expected peak in rates barely changes, the longer-term monetary argument against Gold hasn’t fundamentally changed either. For a sustained downside break, Friday probably has to do more than move the next meeting — it has to make investors rethink how high the Fed ultimately needs to go.
The Same Constraint Works in Gold’s Favor, but Only Up to a Point A soft inflation reading produces the mirror image. September hike odds would probably fall. Yields could retreat. The Dollar could weaken. Gold would have a clear reason to recover.
But a single benign print isn’t necessarily enough to erase the rest of the tightening path. Governor Christopher Waller has framed his own decision around whether inflation shows continued progress. That distinction matters — “continued” requires a pattern rather than one favorable release. A weak CPI number could therefore change September without settling December or March.
The same is true in reverse. One hot number can revive inflation concerns without proving disinflation has structurally reversed. This symmetry is one reason the current Gold range has been difficult to escape. Both CPI tails can move price. Neither automatically changes the entire Fed story.
The Long End Has Another Source of Resistance to Higher Yields Treasury buybacks add a secondary element to that downside protection. From September 9 through November 4, Treasury operations include purchases of longer-dated coupon securities in the 10–20-year and 20–30-year sectors.
Removing some of that duration from private hands can relieve part of the pressure on longer-term yields. The effect shouldn’t be overstated — the broader financing implications are more complicated once issuance elsewhere is considered, and the operations don’t create a simple mechanical ceiling for Treasury yields. But they do matter at the margin.
For Gold, that means another factor can push against an uncontrolled long-end yield rise even while the Fed debate remains hawkish. The bigger point still holds: to break Gold decisively lower, the rates story probably needs to become more hawkish in degree, not merely in timing.
Why 4,697 Is Harder Than It Looks If the Fed path helps explain why Gold has been difficult to break down, it doesn’t explain why Gold has failed to break higher. For that, the market needs another catalyst.
One possibility lies in the Strait of Hormuz — but not in the simple geopolitical sense. A genuine reopening of oil traffic would initially reduce geopolitical demand for Gold. That channel is straightforwardly negative.
But a durable normalization that brought oil materially lower could also reduce the inflation pressure confronting the Fed and other major central banks. If the change became large enough to alter the global rates outlook, falling yields could eventually provide a much stronger monetary tailwind for Gold. The key is physical normalization, not another headline about negotiations or partial flows. Gold needs an oil move large enough to change the inflation regime. That’s unlikely to be settled by Friday.
Gold Also Needs the Dollar Story to Reawaken There’s another route higher: a renewed Dollar debasement trade. That’s different from ordinary speculation over whether the Fed hikes in September or December. A broad move away from Dollar-denominated assets as stores of value can support Gold even when conventional rate relationships are less favorable. It reflects questions around fiscal credibility, institutional confidence, and longer-term reserve diversification rather than merely the next 25bp move from the Fed.
For Gold to break 4,697.07 on that basis, however, the trade probably needs to become broad again. It would need to show up not just in Gold itself, but in persistent Dollar weakness and wider evidence that investors are shifting away from US assets or demanding a greater credibility premium. That kind of process develops over weeks or months. Friday’s CPI can influence it. It can’t settle it.
ActionForex’s Technical View on Gold: The Charts Are Telling the Same Story The technical structure is just as indecisive as the macro picture. Gold’s rally from 3,942.43 to 4,697.07 can be counted as a five-wave advance. Since the peak, price action remains consistent with a correction against that rise rather than clear evidence the larger decline has resumed.
The sequence is: 4,697.07 → 4,282.23 → 4,510.90 → renewed pullback.
The first downside level is 4,282.23, where the initial decline found support. But the level that matters more for the larger structure sits below it. The 61.8% retracement of the entire 3,942.43–4,697.07 rally lies at 4,230.70. That’s the real structural floor.
Gold can test 4,282 and still remain comfortably inside a corrective pattern. A sustained break through the 4,230 region would carry much greater significance, because it would weaken the argument that the post-4,697 decline is simply correcting the five-wave advance. That’s why 4,230, rather than the latest swing low, belongs in the headline range.
The same distinction applies on the upside. The immediate pivot is 4,510.90. Breaking it would indicate the first corrective leg probably ended at 4,282.23 and would reopen the path toward the August high. But that’s not the same thing as breaking out. The real ceiling remains 4,697.07. Strong resistance can be expected there if Gold returns for another test, so even a bullish break through 4,510 may simply carry price from the middle of the range back toward its upper boundary.
That’s exactly what the broader macro setup would suggest. A soft CPI report can generate a rally. A decisive move through 4,697 probably needs something more.
CPI May Decide the Next Stop, Not the Final Destination Friday still matters. A sufficiently hot inflation print could drive Gold toward 4,282 and potentially 4,230, particularly if Treasury yields and the Dollar respond strongly. A softer print could put 4,510.90 back into play and reopen another challenge of 4,697.07.
But the real test comes afterward. Did markets simply move the September hike probability? Did they bring the second hike forward? Or did they actually start pricing a materially higher — or lower — endpoint for the Fed cycle? Only the last of those would represent the kind of monetary shift capable of materially changing the Gold structure.
The same applies to the upside. A genuine breakout probably needs the oil and inflation regime to change more substantially, or the Dollar debasement trade to regain enough force to challenge the upper boundary. That’s why Gold is waiting on something bigger than Friday’s CPI. The inflation report may determine which edge of the range comes next. The bigger macro stories will determine whether 4,230 or 4,697 finally gives way.
Key Takeaways Gold has failed to break either 4,230 or 4,697 since peaking at 4,697.07, reflecting a Fed path that’s hard to make dramatically more hawkish and no catalyst large enough to force a breakout. Markets price roughly two Fed hikes over the next year but aren’t building in a third, meaning even a hot CPI print likely shifts timing rather than the expected rate ceiling. Treasury buybacks from September 9 through November 4 add a secondary, if modest, source of resistance to a runaway rise in long-end yields. A genuine upside breakout likely requires physical Hormuz normalization large enough to change the inflation regime, or a broad renewed Dollar debasement trade, not one data point. 4,230.70 is the real structural floor and 4,697.07 the real ceiling; Friday’s CPI can move Gold toward 4,282/4,230 or 4,510.90/4,697, but probably won’t resolve the range itself.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
ING’s Chris Turner argues that Euro fundamentals remain contained despite German regional election results highlighting political tensions for Chancellor Merz’s CDU. Solid Eurozone growth and investor confidence are offset by downside risks from this week’s ECB meeting. ING expects EUR/USD to hold a narrow 1.1580-1.1640 band with a slight downside bias.
Euro seen contained in tight ranges"While not a major negative for the euro, Sunday's election results in Saxony-Anhalt will serve as a reminder of the declining popularity of Chancellor Merz's CDU party, and, if backed up by similar results in two further regional elections, raise tensions within the governing coalition."
"So far, the German government's infrastructure and defence spending plans seem to be paying dividends for German growth prospects and international investors will not want to see those interrupted."
"On the subject of growth, today should see eurozone second-quarter growth confirmed at a decent 0.4% quarter-on-quarter figure and also see another decent increase in the Sentix investor confidence data."
"The main event of the week, however, will be Thursday's ECB meeting, where we see some downside risks to the euro."
"Expect EUR/USD to trade a tight 1.1580-1.1640 range today, with our bias to the downside."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The British Pound (GBP) is marginally higher at around 1.3525 against the US Dollar (USD) during the European trading session on Monday. The GBP/USD pair ticks up as the US Dollar struggles to attract bids despite the United States (US) Bureau of Labor Statistics (BLS) posting strong Nonfarm Payrolls (NFP) figures for August.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades subduedly near 99.10, but remains inside Friday’s trading range.
The data showed on Friday that the economy created 162K fresh jobs, significantly higher than 56K estimates. July’s NFP data was also revised higher to 21K from -23K.
Upbeat US NFP data has also led to a slight increase in the Federal Reserve’s (Fed) interest rate expectations.
Fed hike odds rise on strong US jobs dataAnalysts at Commerzbank note that the “main theme last Friday was a stronger-than-expected US employment report, which revived expectations for a September Fed rate hike.” They highlight that “the Fed funds futures increased the probability of a 25bp hike on 16 September to 62% compared with 51% before the employment report
Meanwhile, investors shift their focus to the US Consumer Price Index (CPI) data for August, which will be published on Friday.
Ahead of the US CPI data, Fed board members New York Fed Bank President John Williams and Governor Christopher Waller have signaled that recent data on inflation has been “encouraging” and inflation expectations are contained.
On the British currency front, investors await speech from United Kingdom (UK) Chancellor of the Exchequer John Healey, which will take place during the day, where he is expected to talk about the state of the economy ahead of next month's Budget, according to BBC News.
The note released by strategists at Brown Brothers Harriman (BBH) indicates that remarks from UK Chancellor Healey are expected to revolve around raising taxes and reducing expenditure, in a way to highlight growing fiscal risks.
UK fiscal buffer drive points to tax rises and spending cutsBBH said in a note that UK Chancellor John Healey has pledged to build a solid fiscal “buffer against uncertainty” in the October 28 Budget, a commitment they argue will almost inevitably entail a tighter policy mix. BBH highlights that this objective “points to a mix of tax rises and spending cuts” as higher borrowing costs are estimated to have halved the government’s fiscal headroom to around “£12bn,” underscoring the limited room for manoeuvre on the public finances.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades at 1.3533. The pair is virtually glued to the 20-day Exponential Moving Average (EMA) at 1.3533, leaving the near-term bias neutral as price oscillates around this pivot rather than clearly above or below it. The upward-sloping trend-line, last broken near 1.3435, still frames the broader advance, while the Relative Strength Index (RSI) at about 52 hints at balanced momentum after the recent pullback from overbought territory.
On the downside, initial support is seen at the EMA pivot around 1.3533, with the former trend-line break area near 1.3435 acting as a deeper structural floor if sellers extend control. With no immediate overhead levels defined in the current setup, a sustained move away from the 20-day EMA—either a bounce that keeps the pair supported above 1.3533 or a clean break back toward 1.3435—would be needed to re-establish a clearer directional bias.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Nonfarm Payrolls FAQs Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
Pound-Dollar could rebound if US inflation cools, although weaker UK growth may keep Sterling vulnerable after last week's bond-market turmoil. Trade in the Pound US Dollar (GBP/USD) exchange rate was volatile last week amid turbulence in the global bond market.
At the time of writing, GBP/USD was trading at around $1.3499. Down around 0.3% from the start of last week’s session.
Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.351788 (+0.01%)
Euro to Dollar (EUR/USD): 1.16111 (-0.02%)
Dollar to Yen (USD/JPY): 156.14143 (-0.07%)
DAILY RECAP:
The US Dollar (USD) opened last week's session on strong footing, with the ‘Greenback’ benefiting from a bout of risk aversion as a sell-off in global bond markets spooked investors.
The turmoil in the bond market was driven by renewed concerns over inflation and fiscal sustainability, with surging oil prices adding to fears that central banks could face pressure to keep interest rates higher for longer.
However, the US Dollar began to relinquish its gains in the middle of the week as these fears eased and market risk appetite recovered.
Further losses followed on Thursday after dovish remarks from Federal Reserve policymaker Chris Waller, sparked a repricing of Fed rate hike expectations.
This was followed by a modest rebound in USD exchange rates at the end of the session as US non-farm payrolls smashed expectations in August.
The Pound (GBP) found itself on the defensive throughout much of last week's session, with the currency bearing the brunt of a widespread rout across international bond markets.
Yields on benchmark 10-year UK gilts broke past 5.25% to briefly trade at a 19-year high, whilst the 30-year yield struck its highest levels since 1997.
While part of a broader worldwide bond slump, the moves hit Sterling especially hard due to fears that spiralling debt servicing obligations will drastically eat into Chancellor John Healey's fiscal headroom just as he prepares to deliver his inaugural Autumn Budget.
Near-Term GBP/USD Forecast: US Inflation in the Spotlight Turning to this week's session, the primary catalyst of movement for the Pound to US Dollar exchange rate will likely be the latest US consumer price index.
If August's data points to an easing of inflation, it could raise fresh questions about a Fed rate hike this month and pull the US dollar sharply lower.
Meanwhile, the focus for GBP investors will be on the UK's month-on-month GDP figures for July.
Should the data report a deceleration in growth, it's likely to place more pressure on the Bank of England (BoE) to maintain a more accommodative monetary policy, pulling Sterling lower in the process.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Pound-Euro rate could remain under pressure if the ECB stays hawkish, while Healey's speech will be crucial for restoring confidence in UK assets. The Pound Euro (GBP/EUR) exchange rate fell to a two-month low last week as UK bond market turmoil weighed on Sterling.
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The key catalyst for the Australian dollar remains the July inflation data released on 26 August. The figure came in at 3.5% year-on-year, versus expectations of 3.2%, while the Trimmed Mean increased by 0.5% month-on-month, compared with a forecast of 0.3%. The following day, 27 August, NAB revised its forecast for the RBA’s next policy decision. The bank now expects a 25-basis-point rate hike at the September meeting, taking the rate to 4.6%, with the risk of another increase in November.
For the Canadian dollar, the key factor was the Bank of Canada’s decision. On 2 September, the central bank left its policy rate unchanged at 2.25% for the seventh consecutive meeting, highlighting economic uncertainty stemming from US tariffs and Canada’s retaliatory trade measures.
Technical Analysis of AUD/CAD
The four-hour AUD/CAD chart shows a pronounced uptrend that has lifted the pair towards the current resistance level at 0.9985. A pattern resembling a converging triangle formed near the top of this advance, with price fluctuations gradually narrowing within the formation. However, volume dynamics during the second half of the pattern’s formation have been atypical, casting doubt on its reliability.
Nevertheless, the price has broken out of the pattern while also moving above the upper boundary of the current market profile at 0.9950, and is attempting to establish itself above this level. If the advance continues, the red resistance level around 0.9985 is the next key obstacle on the upside.
In the event of a false breakout, the price could return to the profile. If the scenario turns bearish, the pair would need to break not only the upper boundary of the profile but also the Point of Control (POC) at 0.9935 and the lower boundary at 0.9910. Below the market density, a green support level is located around 0.9895.
The RSI + MAs indicator is showing readings of 59, 52 and 54. The RSI has moved above the neutral zone, while both the fast and slow moving averages remain below its upper boundary.
Key Takeaways The atypical volume dynamics during the formation of the triangle leave the reliability of the breakout uncertain, while the price’s attempt to establish itself above the market profile has yet to receive confirmation from the RSI + MAs indicator. The pair’s further direction could depend largely on whether the expected tightening of RBA policy materialises against the backdrop of the Bank of Canada’s wait-and-see stance.
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Silver (XAG/USD) nudges lower on Monday, hitting session lows in the mid-$65.00s after a reversal from the $68.00 area. Precious metals are struggling on Monday, as US Nonfarm Payrolls (NFP) figures beat expectations last Friday, boosting hopes that the US Federal Reserve (Fed) will hike rates next week, although the market awaits Friday’s Consumer Price Index (CPI) release for confirmation.
US NFP figures showed a 162K increase in net employment in August, well above the 57K forecasted by market analysts, easing concerns about a softening labour market. The data prompted investors to ramp up bets on a Fed rate hike at the September 15-16 monetary policy meeting to a 58% chance, from around 50% before the release, according to data from the CME FedWatch Tool.
Analysts at ING point to Friday’s August CPI release as the main focus this week, where they see “month-on-month readings at 0.4% and 0.2% for headline and core (inflation) should be enough to sway the Fed towards a 25bp rate hike on 16 September,” a move they note is “just priced with a 58% probability at the moment.”
Technical Analysis: The neckline of a H&S formation lies around $63.30
XAG/USD trades at $65.79, keeping a bearish near-term tone as it holds well below the 200-day simple moving average (SMA). Friday's reversal from $68.00 looks like the second shoulder of a bearish Head & Shoulders (H&S) formation, while momentum indicators in the daily chart highlight growing bearish pressure.
The 14-period Relative Strength Index (RSI) is hovering near a neutral 52 zone, and the Moving Average Convergence Divergence (MACD) stays in negative territory, which suggests that upside attempts could remain capped.
On the downside, the pair might find support at Friday's low near $64.75, although the key level is the September 2 low, at $63.30, which would confirm the H&S pattern and add pressure toward the August 6 low, near $61.00.
On the topside, initial resistance emerges at a previous support area around $67.50, which held bulls on Friday. Further up, the mid-June highs around $71.60 and the 200-day SMA at $72.90 are likely to pose a significant challenge for bulls.
(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.
The NZD/USD pair trades in negative territory near 0.5875 during the early European trading hours on Monday, pressured by a firmer US Dollar (USD). Traders raise their bets on a US Federal Reserve (Fed) rate hike in the September policy meeting following stronger-than-expected US jobs data.
The US Bureau of Labor Statistics (BLS) showed on Friday that US Nonfarm Payrolls (NFP) climbed by 162K in August, versus an upwardly revised rise of 21K prior. This figure came in above the market consensus of 56K. Meanwhile, the Unemployment Rate held steady at 4.1% during the same period. Fed funds futures are now pricing in roughly a 60% probability of a hike, according to the CME FedWatch tool.
A dovish hike from the Reserve Bank of New Zealand (RBNZ) could undermine the New Zealand Dollar (NZD). The RBNZ decided to raise the Official Cash Rate (OCR) by 25 basis points (bps) to 2.75% last week. RBNZ Governor Anna Breman stated that it’s likely there will be a further increase, but policymakers want to take time to assess the impact of the increases to date.
RBNZ continues gradual tightening as inflation risks monitoredAnalysts at Commerzbank note that the RBNZ delivered a widely anticipated move, with the central bank raising the Overnight Cash Rate (OCR) by 25bp to 2.75% “as expected,” and reiterating that “a gradual removal of monetary stimulus was appropriate to return inflation sustainably to the target.” The bank highlights that while headline CPI remains elevated, largely on the back of Middle East-related fuel costs, most core inflation measures are still within the RBNZ’s 1–3% band, suggesting that the pace of any further tightening will hinge on the “persistence” of inflation pressures and the strength of the domestic recovery.
Technical Analysis: NZD/USD extends consolidation the near termIn the daily chart, NZD/USD sits between nearby structural bands, holding above the 100-day moving average (MA) while still trading below the Bollinger middle band. This configuration, together with a 14-day Relative Strength Index (RSI) hovering around a neutral 48, suggests a consolidative near-term tone, with price caught in a range rather than showing a clear directional break.
On the topside, initial resistance is seen at the Bollinger middle band around 0.5910. The next upside target is located at the Bollinger upper band further up near 0.5985.
On the downside, the 100-day MA at about 0.5845 offers the first layer of support, ahead of the Bollinger lower band clustered just below 0.5830, which would need to give way to signal a deeper corrective move. A break below this level could expose the July 27 low of 0.5771.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
New Zealand Dollar FAQs The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
Danske Research Team reports EUR/USD trading in a narrow 1.1610–1.1620 range after quickly reversing losses from a stronger US jobs report. They highlight a thin data calendar with United States (US) markets closed, and note that attention will shift to the upcoming European Central Bank (ECB) meeting, where a rate hike is widely expected, and to US Consumer Price Index (CPI) figures later in the week.
Pair steadies in tight trading band"In the euro area, retail sales fell by 0.6% m/m in July (cons: 0.2%), following a small increase in June. Fuel sales weighed on the headline figure, but sales excluding fuel also declined by 0.6% m/m, returning to levels seen in Q1."
"The positive growth recorded in July PMIs therefore does not appear to have been driven by private consumption. As consumers remain cautious, companies may find it harder to pass on higher energy costs, which could help explain why these pressures have not spilled over into core inflation."
"In Germany, AfD's victory in Saxony-Anhalt was broadly in line with expectations, winning 44% but falling short of an outright majority. The result confirms AfD's momentum, though mainstream parties rule out a coalition and the direct federal impact is limited."
"EUR/USD is relatively stable in a 1.1610-1.1620 range, as it quickly reversed the initial decline seen after the stronger US jobs report on Friday. "
"The data calendar is thin today as the US market is closed due to Labor Day. Later this week, focus turns to the ECB meeting on Thursday, where a hike is widely expected, and the US CPI figures on Friday."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
The Japanese Yen (JPY) trades flat against the US Dollar (USD) at around 156.00 at the start of the week, but is close to its four-month low of 155.23. The pair is broadly firm due to JPY’s last week's outperformance, which came on the back of hawkish commentary from Bank of Japan’s (BoJ) board member Hajime Takata.
Yen surge raises questions over BoJ intervention and rate pathAnalysts at MUFG highlight that there were “significant moves in the FX market, with the Japanese yen in particular strengthening sharply from the 160 level on 2 Sep all the way down to as low as 155.30 overnight, a 5 big figure move.” They note that it came more broadly on the policy backdrop, flagging that “BoJ Board Member Takata – one of BOJ’s most hawkish members – gave a speech earlier this week leaving the door open for an outsized interest rate increase as well as back-to-back hikes,” reinforcing market speculation that the BoJ could countenance a more aggressive tightening path if conditions warrant.
MUFG also flagged a weak US Dollar as another trigger for significant weakness in the US Dollar, and ruled out the possibility of BoJ’s intervention. “It is not entirely clear whether the moves in USD/JPY were driven by FX intervention,” although “BoJ current account data for Wednesday do not suggest the moves were driven by intervention,” pointing instead to broader Dollar weakness and regional FX gains as key drivers, MUFG said.
Meanwhile, investors await the United States (US) Consumer Price Index (CPI) data for August, which will be published on Friday. The US inflation data is expected to have a significant impact on the Federal Reserve’s (Fed) interest rate expectations.
USD/JPY Technical Analysis
In the daily chart, USD/JPY trades at 155.95, keeping a bearish near-term bias as spot holds well below the 100-day Simple Moving Average (SMA) at 159.92. The distance to this SMA suggests the broader uptrend framework remains above price, with sellers in control for now.
The Relative Strength Index (RSI) at about 32 hovers just above oversold territory, hinting that downside momentum is stretched but not yet signaling a confirmed reversal.
On the topside, the 100-day SMA at 159.92 is the first meaningful resistance that bulls would need to reclaim to ease the current downside pressure and reopen a path toward higher levels. Looking down, the four-month low at 155.25 is the key support zone; below that, the pair could face a fresh downside leg.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Bank of Japan FAQs The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
Gold prices fell in Philippines on Monday, according to data compiled by FXStreet.
The price for Gold stood at 8,872.08 Philippine Pesos (PHP) per gram, down compared with the PHP 8,937.06 it cost on Friday.
The price for Gold decreased to PHP 103,481.80 per tola from PHP 104,240.10 per tola on friday.
Unit measure
Gold Price in PHP
1 Gram
8,872.08
10 Grams
88,718.70
Tola
103,481.80
Troy Ounce
275,951.60
FXStreet calculates Gold prices in Philippines by adapting international prices (USD/PHP) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
Gold prices fell in Saudi Arabia on Monday, according to data compiled by FXStreet.
The price for Gold stood at 530.94 Saudi Riyals (SAR) per gram, down compared with the SAR 534.84 it cost on Friday.
The price for Gold decreased to SAR 6,192.85 per tola from SAR 6,238.29 per tola on friday.
Unit measure
Gold Price in SAR
1 Gram
530.94
10 Grams
5,309.41
Tola
6,192.85
Troy Ounce
16,514.00
FXStreet calculates Gold prices in Saudi Arabia by adapting international prices (USD/SAR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and trades around the 1.3500 psychological mark during the Asian session on Monday. Moreover, spot prices hold above Friday's swing low, warranting some caution for bearish traders.
The US Dollar (USD) draws support from rising bets for an interest rate hike by the US Federal Reserve (Fed) in September amid inflation risks stemming from higher energy prices. Adding to this, escalating US-Iran confrontations in the Strait of Hormuz act as a tailwind for the safe-haven buck and weigh on the GBP/USD pair. USD bulls, however, seem hesitant and opt to wait for US inflation figures, due later this week, for more cues about the Fed's policy path.
Traders will further confront the release of the monthly UK GDP report on Friday for a fresh impetus. In the meantime, relatively thin trading volumes due to the Labor Day holiday in the US hold back traders from placing aggressive bets and might continue to lend support to the GBP/USD pair. Hence, it will be prudent to wait for strong follow-through selling before positioning for an extension of the recent pullback from a six-month peak, touched in August.
From a technical perspective, the GBP/USD pair holds above the 50-day Simple Moving Average (SMA) at 1.3460 and the 38.2% Fibonacci retracement of the June-August rise. Meanwhile, the Relative Strength Index (RSI) at 48.7 hovers around neutral, and the Moving Average Convergence Divergence (MACD) line remains slightly negative. This hints that the upside momentum is modest even as the GBP/USD pair consolidates above these underlying supports.
On the downside, initial support emerges in the 1.3470–1.3460 band defined by the 38.2% retracement and the 50-day SMA, with further cushions at the 50.0% retracement near 1.3407 and deeper Fibonacci levels at 1.3345, 1.3255 and 1.3141. On the topside, the 23.6% Fibo. retracement at 1.3548 is the first resistance to clear, ahead of the cycle high anchor around 1.3673, a break of which would reopen a stronger bullish extension.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD daily chart
US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.03%0.05%-0.09%0.00%0.00%0.13%0.08%EUR-0.03%0.02%-0.15%-0.06%-0.03%0.08%0.05%GBP-0.05%-0.02%-0.15%-0.08%-0.04%0.07%0.03%JPY0.09%0.15%0.15%0.12%0.13%0.25%0.23%CAD-0.01%0.06%0.08%-0.12%-0.00%0.11%0.07%AUD-0.01%0.03%0.04%-0.13%0.00%0.12%0.06%NZD-0.13%-0.08%-0.07%-0.25%-0.11%-0.12%-0.04%CHF-0.08%-0.05%-0.03%-0.23%-0.07%-0.06%0.04% 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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Gold prices fell in United Arab Emirates on Monday, according to data compiled by FXStreet.
The price for Gold stood at 519.25 United Arab Emirates Dirhams (AED) per gram, down compared with the AED 523.16 it cost on Friday.
The price for Gold decreased to AED 6,056.43 per tola from AED 6,102.06 per tola on friday.
Unit measure
Gold Price in AED
1 Gram
519.25
10 Grams
5,192.50
Tola
6,056.43
Troy Ounce
16,150.53
FXStreet calculates Gold prices in United Arab Emirates by adapting international prices (USD/AED) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
Gold prices fell in India on Monday, according to data compiled by FXStreet.
The price for Gold stood at 13,350.23 Indian Rupees (INR) per gram, down compared with the INR 13,453.66 it cost on Friday.
The price for Gold decreased to INR 155,718.30 per tola from INR 156,920.90 per tola on friday.
Unit measure
Gold Price in INR
1 Gram
13,350.23
10 Grams
133,501.50
Tola
155,718.30
Troy Ounce
415,237.40
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
Gold prices fell in Pakistan on Monday, according to data compiled by FXStreet.
The price for Gold stood at 39,216.23 Pakistani Rupees (PKR) per gram, down compared with the PKR 39,509.02 it cost on Friday.
The price for Gold decreased to PKR 457,410.40 per tola from PKR 460,825.40 per tola on friday.
Unit measure
Gold Price in PKR
1 Gram
39,216.23
10 Grams
392,162.30
Tola
457,410.40
Troy Ounce
1,219,744.00
FXStreet calculates Gold prices in Pakistan by adapting international prices (USD/PKR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
The EUR/JPY cross trades in negative territory around 181.20 during the early European trading hours on Monday. The Japanese Yen (JPY) strengthens against the Euro (EUR) as Japanese official projected a Bank of Japan (BoJ) rate hike this month.
Japanese Prime Minister Sanae Takaichi's economic adviser, Takuji Aida, said on Monday that the BoJ is expected to raise interest rates in September and keep hiking at a pace of once every quarter until January next year.
“After the September rate hike, the BOJ will likely follow up with another increase by January next year,” said Aida. "After that, the BOJ will revert to a hike of around once every six months,” Aida added.
Traders brace for the European Central Bank (ECB) interest rate decision on Thursday. The ECB is likely to raise interest rates at its upcoming policy meeting, which would bring its deposit rate by a quarter-point to 2.50%, according to a Reuters poll published on Thursday.
Japan data calendar in focus as Deutsche Bank tracks wages and pricesAccording to Deutsche Bank, the Japan data calendar is set to be busy next week, with attention on a series of releases that will help gauge domestic momentum. The bank highlights that “in Japan, Tuesday’s releases include July labour cash earnings (Tuesday) as well as August Economy Watchers survey (Tuesday) and the PPI (Friday),” underscoring the focus on both household income dynamics and upstream price pressures as investors assess the evolving macro backdrop.
Technical Analysis: EUR/JPY keeps a bearish vibe, with emerging oversold RSI momentumIn the daily chart, EUR/JPY holds in a clear bearish near-term bias as price sits below the 20-day Bollinger middle band and the 100-day moving average, keeping the broader structure capped after the recent slide. The Relative Strength Index (14) hovers just above the 30 area, hinting at emerging oversold conditions but not yet signaling a decisive loss of downside momentum.
On the topside, initial resistance aligns with the lower Bollinger band near 181.40, a level now acting as immediate overhead supply after being breached. The next hurdle to watch is the August 10 low of 182.70, en route to the 20-day simple moving average around 184.45 and the 100-day moving average at 184.90 forming a dense resistance zone above.
On the downside, the September 4 low of 180.23 acts as an initial support level for the cross. The next contention level is located at the 180.00 psychological level. Any follow-through selling below this level could expose the August 3 low of 179.37.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
Gold has kicked off a new week on a bearish footing, resuming the previous downside while battling the $4,400 level amid a United States (US) holiday-led light trading.
Gold is down, but doesn’t seem outGold is facing headwinds from the latest uptick in Oil prices, which continue to stoke inflationary concerns and flag the need for policy tightening globally.
The bright metal thrives on lower interest rates, and expectations of rate hikes by major global central banks, including the US Federal Reserve (Fed), undermine non-yielding bullion.
This, in addition to Friday’s robust US labor market report, keeps Fed rate hike bets on the table for the September monetary policy meeting.
The headline Nonfarm Payrolls (NFP) increased by 162,000 in August, nearly triple the forecast of 56,000. The Unemployment Rate was unchanged at 4.1%, while the Labor Force Participation Rate rebounded to 61.6% from 61.4% in July.
According to TD Securities, the latest data reinforce the view that the jobs backdrop remains resilient. They argue that, when the official figures are considered alongside “a private-sector that is looking up from a jobs perspective,” it “suggests that the labor market is in a good place, and possibly getting better.”
Markets continued to price in a roughly 57% chance that the Fed will hike rates this month following the NFP release, with much now depending on Friday's Consumer Price Index (CPI) inflation data.
However, the downside in Gold seems capped by a broadly stable US Dollar (USD), as buyers quickly faded the post-NFP spike amid concerns over rising US government debt and the aggressively hawkish Bank of Japan (BoJ) repricing, which has pushed the Japanese Yen (JPY) firmly higher at the expense of USD/JPY.
USD traders also seem to ignore the latest strikes exchanged between the US and Iran in the Strait of Hormuz, as thin trading conditions and Fed expectations ahead of inflation data this week keep them on edge. The US markets are closed on Monday in observance of Labor Day.
Looking ahead, Gold remains vulnerable to renewed USD strength if US-Iran tensions escalate further. Thin market conditions could exaggerate Gold price moves.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,401.00, hovering between key moving averages and leaving the near-term bias broadly neutral. Spot gold holds above the 50-day simple moving average (SMA) near $4,247 and the 100-day SMA around $4,350, which together suggest underlying demand on dips, but price has slipped below the 21-day SMA at about $4,463 and remains well under the 200-day SMA near $4,536, indicating that recovery attempts are still capped by medium- and long-term trend barriers. The Relative Strength Index (RSI) around 50 points to balanced momentum, reinforcing the view that the market is consolidating rather than trending decisively.
On the topside, immediate resistance emerges at the 21-day SMA around $4,463, with a stronger cap at the 200-day SMA near $4,536, where sellers could reassert control if price extends higher. On the downside, initial support is seen at the 100-day SMA close to $4,350, ahead of the 50-day SMA near $4,247, and a break below this latter zone would expose a deeper corrective phase, while holding above it would keep the broader consolidation pattern intact.
(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.
Gold prices fell in Malaysia on Monday, according to data compiled by FXStreet.
The price for Gold stood at 573.16 Malaysian Ringgits (MYR) per gram, down compared with the MYR 576.80 it cost on Friday.
The price for Gold decreased to MYR 6,685.20 per tola from MYR 6,727.72 per tola on Friday.
Unit measure
Gold Price in MYR
1 Gram
573.16
10 Grams
5,731.58
Tola
6,685.20
Troy Ounce
17,827.21
FXStreet calculates Gold prices in Malaysia by adapting international prices (USD/MYR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
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.
(An automation tool was used in creating this post.)
Gold (XAU/USD) remains under some selling pressure for the second straight day on Monday, though it shows some resilience below the $4,400 mark during the Asian session. Moreover, the commodity holds above Friday's swing low, touched in reaction to the upbeat US monthly employment details, warranting some caution for bearish traders before positioning for any further losses.
The popularly known US Nonfarm Payrolls (NFP) report showed that the economy added 162K new jobs in August, surpassing consensus estimates for a reading of 56K by a wide margin. Other details revealed that the Unemployment Rate was unchanged at 4.1%, as expected, while annual wage inflation, as measured by the change in average hourly earnings, fell to 3.1% from 3.2%. This comes on top of inflation risks stemming from higher energy prices and lifted bets on an interest rate hike by the US Federal Reserve (Fed) later this month. The hawkish outlook, in turn, is seen acting as a tailwind for the US Dollar (USD) and undermining the non-yielding Gold.
US labor backdrop seen as solid and improvingAccording to TD Securities, the latest data reinforces the view that the US labor market remains resilient. They argue that, when the official figures are assessed alongside a “private-sector that is looking up from a jobs perspective,” it “suggests that the labor market is in a good place, and possibly getting better.”
Meanwhile, Fed Governor Christopher Waller said last Thursday that he was inclined to argue in favor of keeping rates steady if upcoming data confirmed inflation pressures were cooling. This holds back USD bulls from placing aggressive bets ahead of the latest US inflation figures, due later this week, which are seen as acting as a tailwind for the precious metal. The US Producer Price Index (PPI) and the US Consumer Price Index (CPI) will be published on Thursday and Friday, respectively, and will be looked at for more cues about the Fed's future policy path. This, in turn, will play a key role in influencing the near-term USD price dynamics and provide a fresh impetus to the Gold price.
In the meantime, the widening US-Iran confrontation in the Strait of Hormuz keeps the geopolitical risk premium in play and underpins the safe-haven buck. US forces struck three Iranian oil tankers on Saturday, while Iran's Islamic Revolutionary Guard Corps said it had targeted six vessels in retaliation. The tit-for-tat attacks have added to concerns over the security of shipping through the strategic waterway and intensified fears of a prolonged disruption to supplies from the Middle East, supporting oil prices and fueling inflation fears. This favors USD bulls, warranting caution before placing fresh bullish bets on the Gold price and positioning for any meaningful upside.
XAU/USD daily chart
Technical AnalysisThe XAU/USD pair sits comfortably above the 200-day Exponential Moving Average (EMA) at around $4,318 and the key 50% retracement of the July-August upswing, at roughly $4,324. This positioning suggests the broader uptrend remains intact, even as momentum indicators have cooled. In fact, the Moving Average Convergence Divergence (MACD) has slipped into negative territory, while the Relative Strength Index (RSI) hovers near 51, hinting at a consolidative phase rather than outright exhaustion of the bullish structure.
On the topside, immediate resistance emerges at the 38.2% Fibonacci retracement near $4,411, with a break above this pivot exposing the 23.6% retracement around $4,519 ahead of the recent cycle high region near $4,693. On the downside, initial support is seen at the 50% retracement at $4,324, closely backed by the 200-day EMA near $4,318. A deeper pullback would look toward the 61.8% level at about $4,237 and the 78.6% retracement near $4,113, where buyers would be expected to reassert the broader bullish bias.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Most currency pairs are stable today. Dollar Index and Euro could trade between 98.50-99.50 and 1.17-16 respectively while USDJPY and EURJPY can slowly rise towards 157-158 and 182-183 respectively after the intervention by the BOJ last week. EURINR can test 109 before reversing higher while USDCNY needs to break below 6.71 to test support at 6.70 in the medium term. Aussie could rise towards 0.7250-0.73 while the Pound could trade between 1.3475 and 1.3550 respectively. USDINR needs to break below 94.45 to trigger a possible test of lower support near 94 else, a bounce back from current levels if seen can negate bearishness in the near term. Overall a stable range below 95 can be seen for at least a week.
The US Treasury Yields sustain higher. A decisive break and a strong follow-through rise above their resistance can take them higher. Any dip from here can be short-lived as supports are there to limit the downside. The German yields remain higher and stable. The outlook remains bullish to see more rise. The 10Yr GoI is hovering around a support. A narrow range bound move is a possibility in the near term. But the bias remains positive to see more rise from here.
Dow remains range-bound between 52500-54000 while below 54000. DAX has bounced back and can rise towards 26500. Nifty remains vulnerable below 24000, with a break below 23800 opening the way towards 23600-23500. Nikkei has turned stronger above 66000 amid easing US rate hike expectations and can rise towards 67000-68000. Shanghai is likely to remain within the 3850-4000 range while below 4000.
Brent and WTI remain positive and can rise towards $100 and $95 respectively in the near term. Gold needs to sustain above $4300 to keep the possibility of a rise towards $4600 alive. Silver needs a sustained break above $70 for a move towards $75-$80. Copper is likely to remain range-bound between $6.50-$6.80, while Natural Gas needs to break above $3.00 for a rise towards $3.25-$3.50.
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TL;DR: Thursday’s ECB hike to 2.50% is almost fully priced, but economists overwhelmingly expect it to be the last move while markets price roughly two more hikes within a year — and EUR/GBP is testing a major resistance cluster at 0.8610–0.8617 at exactly the moment that disagreement needs resolving.
The Hike Is Almost Certain. What Comes After It Is Not. Calling Thursday’s ECB meeting a non-event because a 25bp hike is already almost fully priced misses the part of the meeting that actually matters.
There’s little disagreement over the immediate decision. Markets assign roughly a 95% probability to a rate increase from 2.25% to 2.50%, while all 65 economists in the latest Reuters poll expect the same move. But beyond September, the consensus breaks apart sharply.
Economists overwhelmingly think Thursday will mark the end of the tightening campaign. Rates markets do not. Some 91% of economists expect the deposit rate to finish 2026 at 2.50%, while 78% see it still there through the middle of 2027. OIS pricing, by contrast, implies around 72bp of cumulative tightening over the coming 12 months — roughly three hikes in total, including the one expected this week.
That leaves close to two additional moves embedded in the curve beyond Thursday. So the real question isn’t whether the ECB hikes. The hike is priced. The rate path is not. And EUR/GBP has arrived at a particularly awkward place for that disagreement to be resolved.
EUR/GBP Is Testing More Than Just Another Resistance Level The pair has recovered from 0.8453 into a resistance zone where several independent technical methods converge.
On the daily chart, the broader cycle runs from the October 2024 base around 0.8221 through the rally to 0.8863, followed by a decline that developed through lower highs before stalling at 0.8453. That low wasn’t technically random. The 61.8% retracement of the entire 0.8221–0.8863 advance sits around 0.8466, almost exactly where the decline eventually found support. That strengthens the significance of 0.8453 as a potential medium-term turning point.
But proving a bottom exists is very different from proving a new uptrend has begun. EUR/GBP has now reached the 0.8610 area, and this is where the recovery faces its first serious test. Three separate forms of daily resistance converge there.
First is horizontal structure. EUR/GBP previously consolidated around 0.8610 on two occasions during the decline, giving the zone clear historical significance. Second is the 38.2% retracement of the 0.8863–0.8453 decline, which also comes in almost exactly at 0.8610.
The weekly chart raises the bar further. The 55-week EMA currently sits around 0.8617, leaving EUR/GBP facing a broader resistance cluster between roughly 0.8610 and 0.8617. That matters because the pair isn’t simply approaching a level where one technical method happens to suggest resistance — several different structures are saying much the same thing. It will probably take real fundamental conviction to clear them.
Momentum Has Already Started to Hesitate The higher-timeframe momentum picture is still constructive. Daily RSI is around 61, leaving considerable room before overbought territory, while daily MACD has crossed higher and is holding above zero. There’s no obvious daily exhaustion signal.
The four-hour chart, however, is beginning to tell a different story. EUR/GBP reached 0.8607 last week, effectively tagging the lower edge of the resistance cluster, but momentum failed to confirm the move. Four-hour MACD shows bearish divergence, as the latest price high wasn’t accompanied by a matching momentum peak. Four-hour RSI is only around the upper-50s.
The rally hasn’t stalled because EUR/GBP is already deeply overbought. It has stalled because momentum is fading exactly where substantial resistance should be expected. That makes the current setup genuinely two-sided. A rejection would fit the existing structure. But there’s still enough higher-timeframe momentum for a sufficiently strong catalyst to force a breakout. Thursday’s ECB projections could provide that catalyst.
Economists and Markets Are Making Different Bets The ECB announces its decision on Thursday, September 10, at 1215 GMT, followed by President Christine Lagarde’s press conference at 1245 GMT.
The expected hike itself is close to settled. The latest Reuters poll, conducted between August 31 and September 3, found all 65 economists expecting a 25bp increase to 2.50%. That conviction has risen steadily: 83% expected a September hike in the previous poll, compared with 72% before the July meeting, when the ECB ultimately held rates unchanged.
But the firm consensus around September masks a much bigger disagreement about what comes next. Economists largely see this as the second and final move of what would be the ECB’s shortest tightening campaign in 15 years. Markets are leaving the door much wider open.
OIS pricing late Sunday put Thursday’s hike probability at 94.8%, equivalent to around 23.7bp of tightening. Yet the curve discounts approximately 72.1bp over the next 12 months. October itself carries only around a 40% probability of another move, while December is somewhat higher at roughly 44%, consistent with the possibility that the ECB could skip October and wait for the next major projection round.
But the exact meeting doesn’t matter as much as the cumulative message. Investors are effectively saying September probably won’t be enough. Economists are saying it probably will. Thursday’s projections need to begin telling markets which side has the stronger case.
The June Forecasts Already Included the Iran Shock This is why simply seeing higher inflation forecasts on Thursday wouldn’t automatically be hawkish. The ECB’s June projections were already constructed after the Iran war had become a major economic shock.
On June 11, the ECB raised the deposit rate from 2.00% to 2.25%, the main refinancing rate from 2.15% to 2.40%, and the marginal lending rate from 2.40% to 2.65%. The central bank explicitly tied the decision to the conflict and its effects on commodity markets.
Its June staff projections put headline inflation at 3.0% in 2026, 2.3% in 2027, and 2.0% in 2028. Core inflation excluding energy and food was projected at 2.5%, 2.5%, and 2.2%. GDP growth was seen at 0.8%, 1.2%, and 1.5% over the same three years.
Compared with March, the direction was already stagflationary: inflation forecasts moved higher while growth was revised lower, with the ECB linking both changes to the war’s effects on energy prices, real incomes, and confidence. So Thursday isn’t about whether the ECB has suddenly discovered an energy shock. It’s about whether that shock is proving more persistent or more broad-based than the ECB assumed in June.
Headline Inflation Says One Thing. Core Inflation Says Another. The latest inflation data make that question unusually clean. Eurozone headline inflation accelerated from 2.9% in July to 3.3% in August, putting it above the ECB’s 3.0% full-year projection for 2026. But the increase was driven overwhelmingly by energy.
Underlying measures moved the other way. Core CPI eased from 2.5% to 2.4%, while services inflation slowed from 3.3% to 3.0%. That divergence is the heart of Thursday’s policy debate.
If headline inflation is rising because the conflict has pushed up energy prices, while core and services inflation continue to cool, the ECB is dealing primarily with a supply shock. Higher rates can’t produce more oil or reopen shipping routes. They matter only if those higher energy costs begin feeding into wages, services prices, and inflation expectations. So far, the latest data don’t clearly show that second-round process taking hold.
That’s why the economist consensus can simultaneously accept a September hike and reject the need for several more afterward. The ECB can respond to the immediate inflation risk without concluding that a prolonged tightening campaign is necessary.
The complication is that supply shocks don’t always stay clean. Persistent increases in visible fuel, diesel, and food costs can influence inflation expectations. If households and workers start building those costs into wage demands, and companies begin passing them into broader prices, the distinction between an energy shock and underlying inflation becomes much less comfortable. Thursday’s projections should show whether the ECB thinks Europe is moving closer to that point.
Three Forecast Tests Matter More Than the 25bp Hike 1. Headline Inflation: How Big Is the Revision? A higher 2026 headline inflation forecast would hardly be surprising after August inflation reached 3.3%. The more important question is what kind of revision the ECB makes.
A modest increase confined mainly to 2026 could amount to little more than technical acknowledgement of higher energy prices already visible in the data. That wouldn’t, by itself, justify another two hikes after September. A larger revision extending meaningfully into 2027 would carry more significance, implying the ECB sees the inflation shock lasting longer than anticipated in June.
2. Core Inflation: The Real Hawkish Test The core projections are much more important. In June, the ECB forecast core inflation at 2.5% in 2026, 2.5% in 2027, and 2.2% in 2028.
If that path is unchanged or revised slightly lower, the central bank would effectively be confirming that underlying inflation hasn’t materially deteriorated despite the increase in energy-driven headline CPI. That would strongly reinforce the “September and done” argument.
A meaningful upward revision would carry a completely different message. It would suggest policymakers see evidence — or at least a growing risk — that the supply shock is beginning to bleed into more persistent inflation dynamics. That’s the kind of surprise that could justify the extra tightening currently embedded in the market curve.
3. Growth: How Much Damage Is the Shock Doing? The June growth projections provide the other side of the equation. The ECB expected GDP growth of 0.8% in 2026, 1.2% in 2027, and 1.5% in 2028.
Private-sector consensus remains broadly aligned with the first two numbers, suggesting no obvious reason for a large revision based purely on the growth data available so far. But the intensifying conflict creates clear downside channels through energy costs, weaker household purchasing power, and confidence.
If the ECB cuts growth further while raising inflation, Thursday becomes more complicated rather than simply more hawkish. Higher inflation alongside weaker growth strengthens the policy trade-off. That’s why markets need to look beyond the headline forecast revision and ask what exactly is driving it.
Scenario One: The ECB Confirms This Is Still Mainly a Supply Shock The cleanest EUR-negative outcome would be straightforward. Headline inflation is revised modestly higher, but core inflation stays broadly unchanged or eases. Growth stays close to the June path or receives a moderate downgrade.
That would tell markets the ECB still sees much of the inflation deterioration as energy-driven rather than evidence of a broader inflation resurgence. It would also validate the dominant economist view that Thursday’s hike can be the last.
This is where the asymmetric market risk becomes important. September itself doesn’t need to be repriced lower — the 25bp increase can happen exactly as expected. The adjustment would come from the additional tightening priced beyond September. With around 72bp embedded over the next year, the curve has significant room to remove future hikes without challenging Thursday’s move at all.
That would be a genuinely EUR-negative outcome. For EUR/GBP, rejection from the 0.8610–0.8617 resistance cluster would then have both technical and fundamental backing. The more important bearish confirmation would come below 0.8545. A break there would strengthen the view that the rebound from 0.8453 was corrective rather than the start of a durable trend reversal, exposing 0.8453 again. A renewed break of that low would reopen the broader decline from 0.8863.
Scenario Two: The ECB Validates the Market’s Hawkish View The bullish EUR scenario requires more than an energy-driven headline revision. Core inflation would need to move higher as well, or the projections and Lagarde’s communication would need to show the ECB is becoming more concerned about second-round inflation pressure.
The press conference could be just as important as the forecasts here. The ECB has repeatedly emphasized that it isn’t pre-committing to a particular rate path and will decide meeting by meeting. If that language stays essentially intact while Lagarde makes little effort to push back against the roughly two additional hikes markets are pricing beyond September, investors could interpret the meeting as tacit confirmation that the tightening cycle still has room to run.
That would give EUR/GBP the kind of Euro-specific catalyst needed to challenge the current technical ceiling. A decisive break through 0.8610–0.8617 would be the first important signal that the decline from 0.8863 completed at 0.8453. The next immediate objective would be the upper boundary of the descending daily channel around 0.8644. A sustained break there would make the recovery from 0.8453 look increasingly like a genuine reversal rather than another rebound within the broader decline.
Scenario Three: The ECB Solves Nothing The third outcome may be the easiest to imagine and the hardest to trade. Headline inflation is revised higher. Growth is cut. Core inflation moves too little to settle whether the shock is genuinely spreading.
That would leave the ECB facing essentially the same two-sided problem it described in June: upside inflation risk and downside growth risk at the same time. In that environment, markets may struggle to decide whether the extra tightening already priced into the curve is justified.
EUR/GBP could reject again from 0.8610 without generating enough downside conviction to break 0.8545. And if that happens, the technical stalemate simply survives another day. Friday’s UK data could then become the tie-breaker.
Friday’s UK GDP Matters Most If the ECB Leaves a Draw The ONS releases July monthly GDP on Friday, September 11, alongside the trade balance, industrial and manufacturing production, construction output, and the NIESR monthly GDP tracker.
The broader UK growth picture is modest rather than collapsing. GDP growth slowed from 0.6% q/q in Q1 to 0.4% in Q2, while the IMF forecasts 1.0% growth for 2026 and the OECD 0.9%.
That gives Friday’s releases clear Sterling relevance. But they shouldn’t displace Thursday’s ECB meeting as the central driver of this setup. If the ECB convincingly validates further tightening, EUR/GBP may already be testing or breaking resistance before the UK numbers arrive. If the ECB instead reinforces the “one and done” view, the Euro could already be retreating from resistance, leaving UK data as a secondary confirmation or counterweight. Friday becomes most important under the mixed scenario, where Thursday fails to provide enough conviction to resolve either side of the technical range.
ActionForex’s Technical View on EUR/GBP: The Market Has Already Drawn Its Own Line EUR/GBP is approaching Thursday with an unusually clean combination of fundamental and technical uncertainty. The rate decision itself is almost known. The projections are not.
Economists overwhelmingly think 2.50% will mark the end of the ECB’s tightening campaign. Rates markets are effectively pricing another two moves beyond September. That disagreement is now meeting a technical structure that also demands resolution.
At 0.8610–0.8617, EUR/GBP faces horizontal resistance, a major Fibonacci retracement, the descending daily trendline, and the 55-week EMA. Four-hour momentum has already begun to fade around the zone, but the daily recovery hasn’t yet exhausted itself. The pair therefore needs conviction, not merely another expected rate hike.
If Thursday shows headline inflation is hotter but underlying inflation remains contained, the additional tightening embedded in the curve has room to unwind. Rejection from resistance would then gain a clear fundamental explanation, with 0.8545 becoming the critical downside trigger.
If the ECB lifts the core inflation path and leaves markets comfortable pricing further tightening, the Euro could finally gain enough support to break the resistance cluster. That would shift attention toward 0.8644 and strengthen the case that 0.8453 marked a more durable bottom.
And if the projections split the difference, Friday’s UK GDP may have to finish the job. Either way, dismissing Thursday because the hike is already priced misses the real trade.
The hike is priced. The rate path is not. And EUR/GBP is sitting exactly where that difference starts to matter.
Key Takeaways Thursday’s ECB hike to 2.50% is nearly certain, but economists (91% see 2.50% through year-end) and markets (72bp priced over 12 months) disagree sharply on what comes after it. Core inflation (2.4% in August) and services inflation (3.0%) are both cooling even as headline inflation rises to 3.3% on energy, making the core forecast path the real hawkish test. EUR/GBP faces a genuine resistance cluster at 0.8610-0.8617, where horizontal structure, a 38.2% retracement, and the 55-week EMA all converge. An unchanged or lower core inflation path would validate the “September and done” view and favor rejection toward 0.8545 and then 0.8453. A higher core inflation path, or a press conference that doesn’t push back on further tightening, would open a break toward 0.8644, with Friday’s UK GDP as the tie-breaker if Thursday leaves the question unresolved.
The Euro (EUR) trades marginally lower at around 1.1610 against the US Dollar (USD) during the Asian trading session on Monday. The major currency pair edges down as the US Dollar ticks up, with investors turning cautious at the start of the United States (US) Consumer Price Index (CPI) week.
Investors will pay close attention to the US CPI data, which will be released on Friday, to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.
Markets focus on final US inflation prints before Fed decisionAnalysts at Deutsche Bank stress that “all eyes will be on the August US CPI print on Friday, preceded by the PPI on Thursday,” noting that these releases represent “the last set of inflation readings before the Fed’s next decision on September 16.” Their US economists expect a notable pickup in price pressures, with August’s headline CPI forecast “to come in at +0.38% MoM vs. +0.07% previously,” while they see underlying pressures remaining contained as core CPI is projected “to print +0.21% vs. +0.22%.”
Meanwhile, traders are expected to reassess Fed interest rate expectations soon as the US Nonfarm Payrolls (NFP) data for August has come in stronger-than-expected. The data showed on Friday that the economy created 162K fresh jobs, significantly higher than 56K estimates.
EUR/USD Technical Analysis
In the daily chart, EUR/USD trades at 1.1609, keeping a mildly bullish near-term tone as it holds above the 100-day Simple Moving Average (SMA) at 1.1563.
The Relative Strength Index (RSI) at roughly 54 stays in neutral territory, hinting that downside pressure persists but without strong momentum exhaustion signals on either side.
On the topside, key resistances are the August high at 1.1679, followed by the April high at 1.1849. Looking down, the 100-day SMA at 1.1563 is the first notable support that bulls need to hold to avoid getting exposed to further downside. Below the 100-day SMA, the psychological level of 1.1500 might act as key cushion for the pair.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Inflation FAQs Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
Key highlightsEUR/USD started a fresh increase from the 1.1565 support.It traded above a bearish trend line with resistance at 1.1605 on the 4-hour chart.EUR/USD technical analysisLooking at the 4-hour chart, the pair traded above a bearish trend line with resistance at 1.1605. There was a move above the 100 simple moving average (red, 4-hour), and the pair remained well above the 200 simple moving average (green, 4-hour).
The pair surpassed the 1.1620 resistance but failed near the 50% Fib retracement level of the downward move from the 1.1711 swing high to the 1.1566 low at 1.1640.
There was a minor pullback, but the pair remained well above 1.1565. If there is another decline, the pair might find bids near 1.1585. The first major support could be near 1.1565. A downside break and close below 1.1565 might start a major leg down. In the stated case, the bears could aim for a move to 1.1440.
On the upside, the bears could be active near 1.1640. The next major resistance might be 1.1675. A close above 1.1675 could start another steady increase. In the stated case, the bulls could aim for a move to 1.1710.
EUR/USD started a fresh increase from the 1.1565 support. It traded above a bearish trend line with resistance at 1.1605 on the 4-hour chart. WTI Crude Oil prices could continue higher if it settles above $92.65. Bitcoin remained supported and might aim for another leg higher. EUR/USD Technical Analysis The Euro corrected gains and tested 1.1565 against the US Dollar. EUR/USD formed a base and started a fresh upward move above 1.1585.
Looking at the 4-hour chart, the pair traded above a bearish trend line with resistance at 1.1605. There was a move above the 100 simple moving average (red, 4-hour), and the pair remained well above the 200 simple moving average (green, 4-hour).
The pair surpassed the 1.1620 resistance but failed near the 50% Fib retracement level of the downward move from the 1.1711 swing high to the 1.1566 low at 1.1640.
There was a minor pullback, but the pair remained well above 1.1565. If there is another decline, the pair might find bids near 1.1585. The first major support could be near 1.1565. A downside break and close below 1.1565 might start a major leg down. In the stated case, the bears could aim for a move to 1.1440.
On the upside, the bears could be active near 1.1640. The next major resistance might be 1.1675. A close above 1.1675 could start another steady increase. In the stated case, the bulls could aim for a move to 1.1710.
Looking at WTI Crude Oil prices, the price remained supported for more gains, and there could be a fresh upward move toward the $95.00 level.
Upcoming Key Economic Events:
Germany’s Trade Balance for July 2026 – Forecast €16.5B, versus €15.4B previous. US NFIB Business Optimism Index for August 2026 – Forecast 99.3, versus 99.8 previous.
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Silver price (XAG/USD) inches higher after opening at a bearish gap, remaining in negative territory and trading around $66.10 per troy ounce during Asian hours on Monday. Silver prices remain under pressure as stronger-than-expected United States (US) employment data fuels expectations of an imminent Federal Reserve interest rate hike.
According to the US Bureau of Labor Statistics, August Nonfarm Payrolls rose by 162,000, significantly outperforming the 56,000 forecast. Meanwhile, the unemployment rate held steady at 4.1%, and annual wage growth slowed less than anticipated to 3.1%. Following these figures, traders rapidly priced in tighter monetary policy, with the CME FedWatch tool indicating a 58.3% probability of a 25-basis-point Fed rate increase in September.
Hammack flags need for more Fed tightening as inflation stays too high Fed’s Hammack delivered a notably more hawkish message, with a 9.2/10 FXS Speechtracker score standing well above the 7.6/10 historical average, signaling a clear shift toward tighter policy rhetoric. The assertion that Fed policy is “not restrictive” and that inflation is “too high,” combined with local contacts indicating “now is time for Fed to hike,” underscores a bias toward additional rate increases and challenges any market expectation of an imminent pivot. This tone supports a stronger Dollar narrative as markets reprice the path of policy toward further tightening.
The FXS Fed Sentiment Index rose by 1.14 points to 125.72, reinforcing that overall Fed communication remains firmly in hawkish territory according to the FXS Speechtracker. With the index well above the neutral 100 mark, the latest move suggests incremental but meaningful reinforcement of higher-for-longer rate expectations, a backdrop typically supportive for the Dollar and a headwind for risk-sensitive currencies.
Adding to Silver's headwinds, rising crude oil prices have stoked fears of rekindled inflationary pressures following a geopolitical escalation between the US and Iran over the weekend. The conflict intensified after the US targeted three Iranian tankers in response to missile attacks on its warships, leading Tehran to establish a new restricted zone around the Strait of Hormuz.
Technical Analysis:In the daily chart, XAG/USD trades at $66.10. The near-term tone is neutral as price holds above the longer-term 50-day Exponential Moving Average (EMA) but sits just under the shorter-term nine-day EMA, hinting at consolidation after the recent advance. The 14-day Relative Strength Index (RSI) at 52.70 stays slightly above neutral, suggesting modest positive momentum without entering overbought conditions.
On the topside, immediate resistance emerges at the nine-day EMA around $66.33, and a clear break above this dynamic cap would be needed to revive a stronger bullish extension. On the downside, initial support is seen at the 50-day EMA near $64.91; a daily close below this level would expose a deeper corrective phase, while holding above it would keep the broader constructive structure intact.
XAG/USD: Daily Chart(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.
Gold Price Forecast: $4,250–$4,530 Range Defines Next Move XAU/USD Consolidates Between Key Moving Averages The daily chart for spot gold shows that the price has been consolidating between the 50- and 200-day SMAs, between $4,530 and $4,250. A break of either level may define the next move in the gold market. A break below $4,250 will open the way to $4,000. This level is the strong long-term support in the gold market.
On the other hand, a break above $4,530 will indicate a strong move toward the $5,000 level. The RSI remains above the midline, which points to positive price action in the short term. However, the strong jobs data has pushed the U.S. dollar index higher, which keeps gold rallies limited.
The AUD/USD pair holds steady around the 0.7200 mark at the start of a new week and remains close to its highest level since mid-May, touched on Friday.
The Australian Dollar (AUD) continues to be underpinned by rising bets for a rate hike by the Reserve Bank of Australia (RBA) in September, bolstered by stronger-than-expected economic growth and persistent domestic inflation. The US Dollar (USD), on the other hand, struggles to capitalize on the upbeat US Nonfarm Payrolls (NFP)-led gains as traders opt to wait for the release of the US inflation figures later this week. However, escalating US-Iran tensions act as a tailwind for the Greenback, capping the upside for the AUD/USD pair.
Spot prices have now found acceptance above the 78.6% Fibonacci retracement level of the May-June downfall. This comes on top of the recent strong move up from the vicinity of the 200-day Simple Moving Average (SMA) and suggests that the path of least resistance for the AUD/USD pair remains to the upside. Moreover, a firm Relative Strength Index (RSI) around 66 and a mildly positive Moving Average Convergence Divergence (MACD) histogram suggest buyers retain control, though conditions are edging toward overbought.
Meanwhile, a multi-year peak, at 0.7272, is the next notable resistance, and a daily close above this hurdle would open the way for further gains. On the downside, initial support is seen at the 78.6% Fibo. retracement at 0.7186, which, if broken, would signal fading upside momentum. The AUD/USD pair might then decline to the 61.8% level at 0.7118 and the 50% retracement near 0.7070, with deeper cushions at 0.7023 and the rising 200-day SMA at 0.6989.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
Australian Dollar Price Last 30 days The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies last 30 days. Australian Dollar was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.74%-0.39%-1.45%-1.24%-2.32%0.04%-0.22%EUR0.74%0.34%-0.71%-0.52%-1.60%0.78%0.54%GBP0.39%-0.34%-1.08%-0.86%-1.93%0.45%0.19%JPY1.45%0.71%1.08%0.21%-0.90%1.55%1.23%CAD1.24%0.52%0.86%-0.21%-1.11%1.30%1.04%AUD2.32%1.60%1.93%0.90%1.11%2.41%2.15%NZD-0.04%-0.78%-0.45%-1.55%-1.30%-2.41%-0.24%CHF0.22%-0.54%-0.19%-1.23%-1.04%-2.15%0.24% 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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Gold price (XAU/USD) tumbles to near $4,395 during the early Asian session on Monday. The precious metal extends the decline as robust US employment data boost US Federal Reserve (Fed) rate hike bets.
The US Nonfarm Payrolls (NFP) climbed by 162K in August, the US Bureau of Labor Statistics (BLS) revealed on Friday. This figure followed July's increase of 21K and beat market expectations of 56K by a wide margin. The upbeat US jobs data boosted expectations that the US central bank could raise interest rates as soon as this month, denting non-yielding bullion's appeal.
“Gold stumbles badly as a huge headline print, and an overall strong report, makes a September rate hike much more likely unless we get a weak CPI report," independent analyst Tai Wong said.
Traders will take more cues from the US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation reports later this week for further clues on the Fed's policy path.
Markets dialled up bets on a rate hike in September, pricing in a roughly 58.3% likelihood versus an even chance earlier in Friday’s session, according to the CME FedWatch tool.
Furthermore, escalating tensions in the Middle East could stoke oil-driven inflation fears and contribute to the yellow metal’s downside. Bloomberg reported on Sunday that Iran said that it targeted three oil tankers using an unauthorized route through the Strait of Hormuz, as well as a number of US-linked ships, in retaliation for US attacks on Iranian tankers over the weekend.
(This story was corrected on September 7 at 01:45 GMT to say, in the first paragraph, that Gold price (XAU/USD) tumbles to near $4,395 during the early Asian session on Monday, not European session.)
Gold rebound underpinned as Fed hike doubts growAccording to Commerzbank, the latest upswing in Gold prices “reflects growing doubts that the Federal Reserve will raise interest rates at its September meeting after all.” The bank notes that these doubts have “recently been fueled primarily by comments from Fed Governor Christopher Waller,” whose remarks have led markets to reassess the likelihood of further tightening and, in turn, helped underpin the metal’s rebound.
Technical Analysis: Gold price retains a mildly bullish bias above the 100-day SMAIn the daily chart, XAU/USD holds above the 100-day Simple Moving Average (SMA), keeping the near-term bias mildly bullish despite the recent pullback from higher highs. Price is now trading below the 20-day Bollinger mid-line, suggesting a consolidation phase within an overall uptrend, while the Relative Strength Index (14) around 51 hints at neutral but stabilising momentum after overbought readings unwound.
On the topside, initial resistance emerges at the 20-day Bollinger middle band near $4,465, with the upper Bollinger band around $4,675 acting as a farther cap if buyers regain control. On the downside, immediate support sits close to the latest close around $4,405, ahead of the 100-day SMA near $4,350; a deeper slide would expose the lower Bollinger band support near $4,260, where dip-buying interest could reappear.
(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.
On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7795 compared to Friday's fix of 6.7787 and 6.7086 Reuters estimate.
PBOC FAQs The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
A hot Nonfarm Payrolls report saw traders reprice the potential for a September Fed hike, making this week’s CPI and PPI figures all the more important. Fed funds futures are now back above a 60% probability of a 25bp hike in two weeks, after 162k jobs were added compared with the 53k expected.
We also have a 30-year Treasury auction which may garner more attention than usual, given the bouts of market volatility whenever its yield pushes above 5.3%. The last time it did, Treasury Secretary Scott Bessent doubled the size of long-end Treasury buybacks to provide greater liquidity support. The auction will therefore test whether investors are comfortable absorbing long-duration debt around current yields, or whether they demand an even higher premium.
Despite the renewed Fed risk, AUD/USD remains above 72c and within reach of its May high. That leaves US inflation, Treasury yields and broader risk appetite as the main near-term drivers for the Australian dollar.
View related analysis:
AU GDP Unlikely to Derail RBA Hike, AUD/USD Eyes ISM, NFP
Australian Dollar Outlook: AUD/USD Faces RBA-Fed Rate Tug-of-War
Australian Dollar Price Action Setups: EUR/NZD, GBP/AUD, EUR/AUD
FX Futures Positioning: Dollar Rebound Meets Diverging Forex Bets | COT Report
Australia This Week: Economic Data and Events for AUD/USD Traders
Australia’s slowing GDP seems unlikely to derail bets of another RBA hike, with cash rate futures having fully priced in a 25bp move by November. The 1-year OIS has fully priced in two. So attention will shift to comments from RBA’s Hunter and Hausser on Tuesday to see if any policy clues are dropped. My guess is that they’ll retain a slightly hawkish tone without committing to much more.
Consumer and business confidence seems likely to show evidence of RBA-hike concerns. Beyond that, it seems appetite for risk and the US dollar’s direction via CPI and bond auction results could be the key driver for the Australian dollar this week.
AUD/USD Technical Analysis: Australian Dollar vs US Dollar
AUD/USD Correlation Analysis
US dollar sensitivity has snapped back: AUD/USD’s correlation with USDX is -0.92 over 10 days and -0.94 over three days, making USD direction the dominant near-term driver.
The yuan remains the most consistent positive relationship: CNH/USD correlations sit at 0.75–0.84 across 3, 10 and 20-day windows, reinforcing China/yuan sentiment as an important AUD/USD input.
Risk and commodity correlations have surged very recently: three-day correlations with the S&P 500 (0.99), gold (0.95), WTI (0.94) and copper (0.87) suggest AUD/USD is currently trading with a strong risk-on/commodity beta.
Short-term relationships remain fluid: several 20-day correlations are weak despite much stronger 3- and 10-day readings, so traders should favour the relationships currently strengthening rather than rely on longer-term averages.
Source: LSEG
AUD/USD Futures Positioning: COT Report
It is more of the same story where futures exposure is concerned for the Aussie. Traders have continued to increase their longs and shorts at a gradual pace, effectively keeping net-short exposure near similar levels to the week prior, albeit a touch less bearish.
This suggests traders continued to hedge their bets despite AUD/USD climbing above 72c to a 16-week high. The more reliable signal is therefore price action and rising total open interest, which now sits at a record high. This shows us that demand for Australian dollar exposure from all participants combined is rising alongside AUD/USD prices.
Source: CFTC (COT) CME, LSEG
For traders wanting a deeper understanding of futures positioning, I’ve also published a guide on how to read and interpret weekly COT data in forex markets.
AUD/USD Options and Volatility Analysis (Risk Reversals, HVN Levels)
Implied volatility has continued to trend lower while prices have moved higher in recent weeks, while 1-month IV remains above 1-week IV to show a calm confidence in the bullish trend. A small bullish engulfing week also formed, although with the May high nearby, the rally may be maturing to the point that it needs a pause or pullback. The daily chart shows AUD/USD held up well to the strength of NFP on Friday by closing flat, although it formed a doji which shows some hesitation from bulls to push higher immediately.
The AU-US 2-year spread edged lower, though not at an alarming rate. Risk reversals also curled slightly higher last week to show a modest pickup in call demand relative to puts, so options traders are not panicking about a deep pullback.
Overall, AUD/USD still has the potential to rise towards the May high and eventually break above it. How US data lands this week could simply determine whether we see an initial pullback or a direct move towards it first.
Alt: AUD/USD rises as implied volatility falls, with risk reversals and the AU-US 2-year spread supporting a constructive Australian dollar outlook.
Source: ICE, TradingView
Australian Dollar Performance
Australian dollar performance table shows AUD gains across most major crosses, while AUD/JPY underperforms over five and 10 days.
