EUR/CHF may already be telling investors what to expect from today’s European Central Bank meeting. The cross broke decisively above 0.9278 this week, extending its recent rally as surging oil prices revived inflation concerns across Europe. The move suggests markets have begun positioning for a relatively more hawkish ECB even though policymakers are almost universally expected to leave the deposit rate unchanged at 2.25%. With the decision itself largely priced in, attention will instead turn to whether President Christine Lagarde validates—or pushes back against—the hawkish repricing already underway.
The backdrop confronting the Governing Council has changed dramatically since it last met in June. At that meeting, Brent crude was also trading around $95 a barrel, but the trend pointed firmly lower as markets anticipated a breakthrough in US-Iran negotiations. Optimism was soon rewarded with a 60-day ceasefire announced on June 17, sending Brent to around $70 by early July and reinforcing expectations that energy-driven inflation would continue to ease. That narrative has since been turned on its head. The ceasefire has collapsed, military conflict has resumed, shipping risks around the Strait of Hormuz have intensified, and Brent has climbed back above $95. The crucial difference is that oil is now surging rather than falling, fundamentally changing the inflation outlook facing European policymakers.
Financial markets appear to have recognized that shift before the ECB has had a chance to respond. This week’s move in EUR/CHF suggests investors are increasingly pricing a policy outlook that is more hawkish than it appeared only a few weeks ago. While markets are not yet fully convinced another rate hike will follow, they have become less willing to assume June’s increase marked the end of the tightening cycle. The renewed rise in energy prices has reopened the possibility that inflation could prove more persistent than previously expected.
That leaves Lagarde’s press conference carrying far greater significance than the policy announcement itself. Given the speed at which geopolitical developments are evolving, the ECB is unlikely to provide firm forward guidance. The most likely message is that inflation risks have shifted to the upside, uncertainty surrounding the Middle East and the Strait of Hormuz remains exceptionally high, and policy decisions will continue to depend on incoming data. Preserving flexibility is likely to take precedence over signalling a specific policy path.
The key question is whether Lagarde chooses to resist growing market expectations for another rate hike as early as September. Such a question is certain to surface during the press conference. If she explicitly dismisses those expectations, recent Euro gains could fade as markets pare back hawkish bets. On the other hand, if she simply acknowledges heightened inflation risks without challenging current pricing, investors may interpret that as tacit acceptance that another hike remains a live possibility should the energy shock persist.
Meanwhile, EUR/CHF could emerge as the cleaner expression of today’s outcome than EUR/USD. Any hawkish shift from the ECB is likely to be offset by similar expectations that higher oil prices will also keep the Federal Reserve on a tighter path. By contrast, the Swiss National Bank is still widely expected to leave rates unchanged at 0.00% through the remainder of the year, leaving EUR/CHF more directly exposed to changes in ECB expectations.
Technically for EUR/CHF, Wednesday’s break above 0.9278 resumed the rally from March’s 0.8979 low and keeps the pair on course for 100% projection of 0.8979 to 0.9264 from 0.9094 at 0.9379. Just beyond lies the key structural resistance at 0.9394. A sustained break above that level would strengthen the case for a medium-term bullish reversal, reinforcing the view that investors are pricing a widening policy divergence between Frankfurt and Zurich rather than simply reacting to day-to-day geopolitical headlines.
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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.
British Pound nudges higher above 1.3350 despite Middle East turmoilThe GBP/USD pair rebounds to near 1.3385 during the Asian trading hours on Thursday. However, the potential upside for the major pair might be limited amid cooler-than-expected UK inflation data and escalating tensions in the Middle East. Traders will take more cues from the UK Retail Sales report, which is due later on Friday.
The UK headline Consumer Price Index (CPI) inflation slowed to 2.6% YoY in June, the lowest since March 2025, down from 2.8% in May, according to the Office for National Statistics (ONS) on Wednesday. This figure came in softer than the market expectations of 2.7% growth. Read more...
A cooler inflation print buys British Pound Sterling nothing but a slower declineThe Pound's week-long slide slowed to a crawl on Wednesday, and it picked an odd session to do so, because the June inflation report handed sellers their cleanest argument yet. GBP/USD tagged the 1.3350 area in early New York trade, its weakest level in over a week, and now sits between that floor and the converged moving-average band just below 1.3400, on track for a fifth straight daily decline measured in single-digit pips.
The Office for National Statistics put headline Consumer Price Index (CPI) inflation at 2.6% YoY for June, under the 2.7% consensus, down from 2.8% in May and the lowest annual rate since March 2025. Services inflation eased to 3.6% from 3.7%, the monthly gain ran at just 0.1%, and transport and food did most of the downward work, precisely the categories a war-supply shock was supposed to keep hot. Read more...
British Pound steadies as cooler UK CPI meets Oil shockThe Pound Sterling holds firm during the North American session as UK inflation data dipped, easing pressure on the Bank of England to tackle higher prices, while attacks between the US and Iran don’t seem to be ending in the Middle East. The GBP/USD trades at 1.3377.
During the European session, UK inflation data for June dipped from 2.8% to 2.6% YoY. The core Consumer Price Index (CPI) remained steady at 2.6% YoY for the same period. Even though this relieves the BoE, traders continued to price in an 82% chance for a rate hike by the November 5 meeting, according to Prime Terminal data. Read more...
The Japanese yen remained under intense pressure today, July 23, as traders rushed to the US dollar amid the rising tensions in the Middle East. The USD/JPY pair was trading at 163.07, a few pips below this week’s high of 163.2.
The Japanese yen has continued falling this month, even as the country’s central bank has launched several defensive measures.
The Bank of Japan has hiked interest rates to the highest level since 1995, and hinted that it may deliver more increases.
At the same time, the bank has spent more than $73 billion on foreign exchange market interventions. While these interventions typically trigger a stronger yen, the gains have historically been short-lived.
The Japanese yen has mostly dropped because of the significant gap that exists between the US and Japanese interest rates.
Japanese rates have jumped to 1%, while in the United States, the Fed has left them unchanged between 3.50% and 3.75%. Economists and traders now expect the Fed to hike rates further this year as inflation concerns remain. Odds of a Fed hike have jumped to over 67% on Polymarket.
Higher interest rates in the United States have made the US dollar more attractive than the Japanese yen. They have also fueled the popularity of the USD/JPY pair among carry traders, who borrow in low-interest-rate currencies to invest in higher-yielding ones.
The ongoing crisis in the Middle East has contributed to the ongoing Japanese yen sell-off because the country depends substantially on oil coming from the region. In a statement, an Iranian official said that the crisis would escalate. He said:
“If the Americans target a bridge or a power plant in Iran, Iran will, in turn, strike infrastructure and bridges in the region, including energy facilities where the United States has interests.”
Data shows that Brent and the West Texas Intermediate (WTI) continued rising overnight as the crisis continued. Also, Houthis hit an oil tanker attempting to cross the Bab El-Mandab Strait. Brent jumped to $96, while the West Texas Intermediate (WTI) approached the key resistance at $90. These events have fueled the US dollar gains as investors rush to its safety.
USD/JPY chart | Source: TradingView
The daily chart shows that the USD/JPY pair has continued rising in the past few months. These gains have been supported by the 50-day Exponential Moving Average (EMA).
The pair has recently crossed the important resistance level of 162.82, its highest level on July 1. It also remains above the Supertrend indicator.
Therefore, the path of the least resistance for the pair is bullish, with the next key level to watch being at 164. A move above that price may see it hit the resistance at 165 over time.
Gold is snapping its recent recovery, struggling above $4,100 early Thursday, as both fundamental and technical factors warrant caution for buyers.
Gold reverses from two-week highsGold is extending its pullback from two-week highs of $4,166 reached on Wednesday, even as the US Dollar (USD) remains on the backfoot.
Looming Japanese intervention risks keep Greenback traders cautious amid potential downside risk to the USD/JPY pair, which could have a ‘rub-off’ effect on the buck.
Additionally, the earnings reports from the American tech titans, Alphabet and Tesla, showed robust spending plans for Artificial Intelligence (AI) infrastructure, lifting chipmakers and major Asian indices. The cautious optimism is also rendering negative for the safe-haven US Dollar.
However, expectations of sooner (than later) interest rate hikes by the US Federal Reserve (Fed) are back on the table, courtesy of the widening Middle East conflict-led surging Oil prices and increasing inflation fears, which continue to limit the USD downside and reinforce bearish pressure on non-yielding assets such as Gold.
Therefore, the latest leg down is sponsored by that narrative, especially after the US launched a new wave of strikes on Iran and Yemen's Houthis targeted oil tankers in the Red Sea, widening the scope of a conflict that has once again rattled global markets.
Late Wednesday, Iran’s Foreign Minister Abbas Araghchi warned that Tehran would respond in kind to any attack on its infrastructure after US President Donald Trump threatened to bomb a bridge or power plant for every ship targeted in the Strait of Hormuz.
Looking ahead, Gold remains in the eye of the storm amid escalating tensions in the Middle East and ahead of the European Central Bank (ECB) monetary policy decision.
Although the ECB is widely anticipated to hold key rates this Thursday, any signs of a possibility of a September rate hike could ramp up hawkish sentiment around the central bank. This could further contribute to the retracement in Gold.
Meanwhile, Gold’s daily technical setup continues to caution buyers as they keenly await confirmation of the impending Bear Cross while momentum stays neutral.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,117.19, holding below the 50-day simple moving average (SMA) at $4,242.58 and well under the 100-day and 200-day SMAs clustered around $4,491, which keeps the near-term bias bearish despite the latest rebound. The metal remains above the 21-day SMA at $4,071.54, suggesting some short-term demand, while the Relative Strength Index (14) near 49 points to neutral momentum rather than a decisive recovery.
Additionally, keeping buyers defensive, the 100-day SMA has crossed the 200-day SMA from above, but a confirmation on a daily candlestick closing basis is awaited to confirm a Bear Cross.
On the topside, initial resistance is seen at the 50-day SMA at $4,242.58, followed by the 100-day SMA at $4,491.02 and the 200-day SMA at $4,495.96, where a dense supply zone could cap further gains. On the downside, immediate support emerges at the 21-day SMA at $4,071.54; a daily close below this floor would likely expose the bearish trend to renewed pressure toward lower levels not yet defined by the current moving-average structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold upside capped as energy and Fed expectations stay in focusAnalysts at ING highlight that gold is "likely to remain sensitive to developments in energy markets and expectations for US monetary policy," keeping the metal vulnerable to shifts in both oil prices and the Fed outlook. They add that silver "could continue to outperform if strength in industrial metals persists alongside safe-haven demand," suggesting the white metal may benefit from both industrial and defensive flows.
Echoing the cautious tone, OCBC notes that "near term, price action may remain two-way," but stresses that "a more sustained recovery likely requires oil prices to back off, some easing in real yields and Fed tightening expectations." Until those conditions materialise, OCBC warns that "upside may remain capped" for gold.
Silver (XAG/USD) attracts fresh buyers near the $58.25-$58.20 zone during the Asian session on Thursday, stalling the previous day's modest pullback from the $61.00 neighborhood, or an over two-week high. The white metal, however, lacks follow-through and currently trades just above the mid-$59.00s, down over 0.40% for the day.
This week's breakout through the $59.00 confluence – comprising the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 23.6% Fibonacci retracement level of the fall from the June 17 high – was seen as a key trigger for XAG/USD bulls. The Relative Strength Index (RSI) at 61.21 stays in positive territory, while the Moving Average Convergence Divergence (MACD) histogram remains mildly positive. Momentum indicators together suggest that upside momentum is still constructive despite the latest pause, backing the case for a further near-term appreciating move.
In the meantime, any subsequent move up is likely to confront initial resistance at the 38.2% Fibo. retracement at $61.31. This is followed by the 50.0% level at $63.28 and the 61.8% retracement at $65.25, with the 78.6% barrier at $68.05 acting as a broader cap. On the downside, immediate support is seen around the 100-period SMA/23.6% Fibo. level confluence at $58.99, while a deeper pullback would expose the structural anchor of the current cycle near $54.94.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD 4-hour chart
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
NZDCAD currency pair recently reversed down from the resistance zone between the long-term resistance level 0.8260 (which has been reversing the price from last September) and the upper daily Bollinger Band.
The downward reversal from the resistance level 0.8260 created the daily Japanese candlesticks reversal pattern Shooting Star.
Given the strength of the resistance level 0.8260 and the overbought daily Stochastic, NZDCAD currency pair can be expected to fall to the next support level 0.8160.
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The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Thursday at 6.7906 compared to the previous day's fix of 6.7933 and 6.7712 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.
EUR/CHF breakout puts USD/CHF on watch Break above 0.8150 targets 0.8250 initially Given the euro area and Switzerland face many of the same energy security and terms of trade pressures, the breakout in EUR/CHF on Wednesday looks more technical than fundamental. With a major surprise from the ECB later today unlikely, and nothing of consequence on the Swiss or US economic calendars to trouble the scorers, it raises the question of whether USD/CHF could deliver a similar breakout. Outside of the ECB, the main threat to that view would be a positive development from the Gulf that sees energy prices subside, encouraging renewed demand for the franc.
EUR/CHF breaks higher
Source: TradingView
EUR/CHF spent months bumping up against resistance around 0.9268. There was one false breakout in the middle of July before the pair retreated to uptrend support running from the early-July lows, finding buyers around the 50-day simple moving average. Wednesday finally delivered the decisive breakout above 0.9268, with the pair pushing into resistance around 0.9300, a level that saw plenty of work on either side back in January. That's the key focal point today.
The broader technical backdrop remains constructive. The pair continues to trade above the key medium and long-term moving averages, while momentum indicators remain supportive, with RSI (14) holding above 63 and MACD maintaining a bullish crossover. That leaves the bias favouring buying dips and bullish breakouts. A convincing move above 0.9300 would open the door for longs to be established with a stop beneath the level for protection, initially targeting 0.9350, the swing high from January 14. Beyond that, minor resistance is located at 0.9370, followed by 0.9400.
Should 0.9300 once again prove too much of a hurdle, a pullback towards former resistance at 0.9268 may see it revert to support. Below that, uptrend support from the early-July lows kicks in around 0.9245 today. A break beneath both would weaken the near-term bullish outlook.
USD/CHF set to follow?
Source: TradingView
EUR/CHF's breakout should be of interest to USD/CHF traders, given the technical structure is remarkably similar. After rebounding from a minor uptrend running from the lows set in the middle of July, USD/CHF is once again testing resistance around 0.8150, a level that has repeatedly acted as both support and resistance over the past year. There was one failed attempt to break above the level in mid-July, but the pair is once again knocking on the door.
The broader technical backdrop remains constructive. The price continues to trade above the key medium and long-term moving averages, all of which retain a positive slope, pointing to the potential for an eventual breakout that could open the door for a move towards 0.8250.
The one note of caution comes from RSI (14), which has been making lower highs despite remaining comfortably above the neutral 50 level. Ideally, traders would like to see RSI break that downtrend and print a fresh high to provide greater confidence that momentum is strengthening once again. Even so, the broader technical picture, including the bullish MACD configuration, continues to favour upside over downside.
A convincing break above 0.8150 would favour buying the breakout, with a stop beneath the level for protection, initially targeting 0.8250. Above there, the next level of note comes in at 0.8333, an area that acted as both support and resistance through April, May and June last year.
On the downside, should 0.8150 continue to cap, the minor uptrend from the mid-July lows provides the first line of support, coming in around 0.8088 today. A break beneath that would suggest the recent sideways range remains intact, shifting the focus back towards the lower boundary at 0.8013.
Gold price (XAU/USD) trades in positive territory around $4,125 during the early Asian session on Thursday. The precious metal extends its recovery as ongoing geopolitical uncertainties continue to underpin safe-haven demand.
Traders are scrambling back into the yellow metal after attacks between the United States (US) and Iran are widening into a second week. US President Donald Trump on Wednesday vowed that the US will blow up an Iranian bridge or power plant, including those in the country’s capital city of Tehran every time Iran shoots at a ship in the Strait of Hormuz.
Meanwhile, Iran threatened to strike US-linked infrastructure and energy facilities across the region if Washington carries out Trump’s threat. Earlier Wednesday, US Secretary of State Marco Rubio accused Iran of not being “serious” about making an agreement with the US while emphasizing that Washington was “committed to diplomacy” in the Middle East.
“The recent rebound feels mostly flow-driven, sparked by a bit of dip-buying and sheer relief that the US$4,000-an-ounce floor held,” says Ryan McKay, senior commodity strategist at TD Securities. “However, I don’t expect this to be the start of a new structural trend. Energy prices are just starting to pick up again, and that concern will ultimately cap the upside,” McKay added.
Fed funds futures traders were pricing in a nearly 34% probability of a rate hike from the Fed this month, up from 10% a week ago. Traders were also pricing in a 78% odds of at least a 25 basis points (bps) rate increase in September, according to the CME FedWatch tool.
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.
USD/JPY remains supported by a wide US–Japan interest-rate differential, positive carry and a firmly bullish technical structure. Yet with the pair trading above 163, speculative yen shorts already substantial and Japanese intervention risk rising, the immediate entry is less convincing than the underlying bullish thesis.
USD/JPY has moved into territory not seen for roughly four decades, trading above 163 and leaving the Japanese Yen near its weakest level against the US Dollar since 1986.
The reasons behind the move are relatively clear. US interest rates remain considerably higher than Japanese rates, the Dollar continues to offer attractive carry, and the Bank of Japan is normalising monetary policy at a measured pace.
The trading decision is less straightforward.
At current levels, USD/JPY no longer offers the same risk profile that existed earlier in the trend. The pair is testing major long-term resistance, speculative investors already hold substantial short-yen exposure, and Japanese authorities have shown that intervention is more than a verbal threat.
The result is a market where the underlying direction remains bullish, but the case for chasing the move has weakened.
US–Japan policy divergence continues to favour USD/JPYThe Federal Reserve maintained its target range at 3.50%–3.75% at its June meeting. Policymakers described US economic activity as expanding at a solid pace and acknowledged that inflation remained elevated relative to the 2% objective.
That does not provide an obvious foundation for rapid monetary easing.
For USD/JPY, the key question is not simply whether the Fed will eventually reduce rates. It is whether US rates will fall sooner or more quickly than financial markets currently expect.
A weak economic release can cause a temporary decline in the Dollar. A sustained USD/JPY reversal would probably require a broader deterioration in US employment, consumption or growth, accompanied by a meaningful fall in short-term Treasury yields.
The Bank of Japan, meanwhile, has continued to move away from the ultra-loose policy regime that defined the Japanese economy for many years. Its policy rate has risen to around 1%, and officials have indicated that further adjustments remain possible if wages, inflation and economic activity develop in line with expectations.
This is supportive of the Yen at the margin, but the relative policy gap remains wide. A 1% Japanese rate is still substantially below the Federal Reserve’s 3.50%–3.75% range.
The Yen would receive stronger support if markets began pricing a faster BoJ tightening cycle, a materially lower Fed path, or both. Until that happens, the rate differential remains an important fundamental anchor for USD/JPY.
Positive carry supports the trend but creates asymmetric riskThe interest-rate gap also keeps USD/JPY relevant as a carry trade.
Investors can fund positions in a lower-yielding currency such as the Yen and allocate capital to higher-yielding Dollar assets. Provided that the exchange rate remains stable or moves in the investor’s favour, the strategy earns the interest-rate differential.
Carry trades tend to perform best when volatility is low and global risk appetite is stable. Those conditions encourage traders to maintain leverage and stay invested.
The weakness is that carry returns accumulate gradually, while reversals can happen quickly.
If volatility rises or the policy outlook changes, investors may rush to reduce similar positions at the same time. Closing a yen-funded carry trade requires buying Yen, which can accelerate a decline in USD/JPY.
This helps explain why the pair can rise steadily over several months and then fall several hundred pips in a much shorter period.
Positive carry supports the current trend. It also creates the conditions for a more violent correction if the market turns.
Japanese capital flows add a structural layerJapan’s international investment position is another important part of the picture.
Japanese residents hold a very large stock of overseas bonds, equities and other assets. Pension funds, life insurers, banks and asset managers regularly decide whether to allocate capital domestically or abroad.
When overseas yields are more attractive and foreign investments are left unhedged, those decisions can involve selling Yen and purchasing Dollars or other currencies.
The flow can slow or reverse if Japanese yields become more competitive, foreign yields decline, hedging costs change or institutions decide to repatriate capital.
These structural flows tend to develop more slowly than speculative positions. Even so, they help explain why the Yen can remain weak despite gradual BoJ tightening.
Professional FX analysis therefore cannot stop at central-bank announcements. Longer-term investment behaviour can continue to influence the currency long after the immediate policy reaction has faded.
Intervention risk is no longer theoreticalJapan has already demonstrated its willingness to intervene directly in the foreign-exchange market.
The Ministry of Finance reported intervention totalling more than ¥11 trillion between late April and late May 2026. As USD/JPY moved through 163, Japanese officials again warned that they were prepared to take decisive action against excessive currency movements.
The authorities are unlikely to focus on one exchange-rate level in isolation. The speed and character of the move also matter.
A slow and orderly rise may be treated differently from a rapid, one-sided advance driven by speculative positioning. Officials also need to consider the impact of Yen weakness on imported energy, food and other consumer costs.
Intervention can trigger a powerful short-term fall in USD/JPY, particularly when leveraged positioning is concentrated. Its lasting effect is less certain.
If US yields remain high and the US–Japan policy gap stays wide, official Yen buying may interrupt the trend without changing its fundamental direction. Intervention is more likely to produce a durable reversal when it is reinforced by falling US yields, faster BoJ tightening or a broader unwind in global risk positions.
Positioning confirms the trend and increases squeeze riskThe latest available CFTC data showed non-commercial traders holding 115,965 long Japanese Yen futures contracts and 238,628 short contracts. That produced a net-short Yen position of 122,663 contracts.
The direction needs to be interpreted carefully. These are Japanese Yen futures positions rather than direct USD/JPY trades.
A short-Yen futures position generally reflects an expectation of Yen weakness and is therefore broadly consistent with a bullish USD/JPY view.
The positioning confirms that speculative investors agree with the prevailing trend. That can remain supportive while the interest-rate and carry arguments remain intact.
However, it also increases squeeze risk.
If a catalyst causes USD/JPY to fall, traders closing Yen shorts must buy the currency back. A sufficiently large wave of short covering can turn an orderly correction into a much faster move.
Crowded positioning is not an automatic reversal signal. A popular trade can remain profitable for a long time. What crowding changes is the potential speed of the adjustment once the consensus begins to unwind.
Monthly trend remains firmly bullish
The monthly chart retains a strong upward structure.
USD/JPY is trading above its previous major long-term highs and remains well above the monthly Ichimoku Cloud. At the time of the chart analysis, the monthly Tenkan-sen was near 157.67 and the Kijun-sen was around 151.41.
Price was therefore more than 11 Yen above the monthly Kijun, showing a significant departure from medium-term equilibrium.
The Ichimoku configuration remains constructive. Price is above the cloud, the Tenkan-sen is above the Kijun-sen, the projected cloud remains positive and the Chikou Span is positioned above previous price action.
Monthly RSI was around 63.7. Momentum was strong, but it had not moved above the conventional overbought threshold of 70.
The distance from the monthly Kijun increases the risk of mean reversion. It does not show that a reversal has started.
An extended trend can remain extended, particularly when monetary policy, carry and momentum continue to point in the same direction.
Weekly chart tests a major breakout area
The weekly picture is similarly bullish.
USD/JPY recovered strongly from its 2025 correction and continued to form higher highs and higher lows. Price remained above the weekly Ichimoku Cloud, with the weekly Tenkan-sen close to 161 and the Kijun-sen around 157.67.
Weekly RSI stood near 67.5 at the time of the chart capture. That is elevated, but it does not constitute a reversal signal on its own.
The central technical question is whether USD/JPY can establish acceptance above the 163.20–163.30 area.
A weekly close above that zone, followed by continued trading above it, would support a continuation into price discovery.
A move above 163.30 that quickly reverses and closes below the breakout area would instead raise the risk of a false break.
The weekly chart had not yet produced a confirmed lower high, a break of an important higher low or a bearish Ichimoku crossover. Selling the pair at current levels would therefore mean anticipating a top rather than responding to an established reversal.
Daily chart defines the immediate decision
The daily chart provides the clearest map for execution.
Immediate resistance sits around 163.20–163.30. The first meaningful support is near the daily Tenkan-sen around 162.20–162.30.
A stronger support cluster lies around 161.65–162.00, where the daily Kijun-sen and projected cloud top converge. Beneath that, the weekly Tenkan-sen is positioned close to 161.
The lower boundary of the daily cloud sits around 160, while the weekly Kijun-sen near 157.67 represents a more important swing support level.
Price remains above all of the main Ichimoku components.
A pullback towards 162.20 or the stronger 161.65–162.00 support area would remain consistent with an intact uptrend. Such a move would bring price closer to short-term equilibrium without causing significant structural damage.
A daily close below approximately 161.7 would provide the first meaningful warning. The bearish case would become more credible if the pair then formed a lower high and broke below 160.9–161.0.
A sustained move below 160 would represent a more serious deterioration because USD/JPY would be trading beneath the lower boundary of the daily cloud.
Daily RSI shows a possible bearish divergence, with price testing a marginal new high while momentum remains below its earlier peak.
That is a reason to avoid chasing the market without confirmation. It is not sufficient evidence to establish a short position while price remains above support and the broader structure remains bullish.
The thesis is stronger than the immediate setupFundamental, technical and sentiment analysis currently produce a broadly consistent directional message.
The US rate advantage remains supportive. The multi-timeframe trend is bullish. Speculative positioning confirms that investors remain bearish on the Yen.
The quality of the immediate entry is less compelling.
The pair is testing major resistance, the market is already crowded in the prevailing direction and intervention risk is elevated.
This creates an important distinction between thesis quality and setup quality.
A trader may hold a well-supported bullish view while deciding that current prices do not offer enough reward relative to the risks. Equally, the possibility of intervention and crowded positioning may support a bearish scenario without yet providing technical confirmation of a reversal.
Bullish continuationA convincing daily and weekly close above 163.30 would strengthen the breakout case.
Follow-through above the high, followed by a successful retest of the 163 area, could open the way towards 164 and 165. The principal risks would remain intervention and a sudden decline in US yields.
High-level consolidationUSD/JPY could remain between roughly 160 and 164 while the market waits for clearer guidance from the Fed, the BoJ and Japanese authorities.
This outcome would allow momentum and speculative positioning to reset without requiring a major change in the longer-term trend.
Corrective declineA break below the 161.65–162.00 support cluster would create the first sign of deterioration.
A subsequent move below 160.9 and a failed attempt to recover the level would strengthen the case for a correction towards 159.30 and 157.70.
The decline would become more structurally significant if USD/JPY established sustained acceptance below 157.7.
ConclusionUSD/JPY remains supported by the relative monetary-policy backdrop, positive carry and a bullish technical structure across the monthly, weekly and daily timeframes.
However, the pair is testing a major long-term high at a time when speculative Yen shorts are substantial and Japanese authorities have already demonstrated a willingness to intervene.
The evidence does not yet confirm a bearish reversal. It also does not provide an especially attractive case for chasing the pair at current levels.
Acceptance above 163.20–163.30 would reinforce the bullish continuation scenario. A pullback that holds around 161.7–162.3 could offer a cleaner test of the trend. A break below 160.9, followed by a failed recovery, would mark a more meaningful change in the daily structure.
For now, USD/JPY presents a strong underlying thesis at a difficult entry point.
Spot gold daily chart shows larger trend structure. Source: TradingView Resistance Converges Above the Market Since the 50-day moving average is falling closer to the swing high, it represents a stronger resistance zone as the levels converge. This would also allow for a decisive breakout above $4,203 to reclaim the 50-day moving average on the same move. Gold would need to reclaim the 50-day moving average to show further signs of strength that could lead to higher prices. It has represented an area of dynamic resistance since gold broke below it in mid-March. Therefore, a sustained move above the $4,203 swing high and the 50-day moving average would provide a more convincing confirmation that the recent bullish momentum is extending beyond a short-term rebound.
Higher Targets Await a Confirmed Reversal A higher initial upside target for gold lies near the prior trend high at $4,382, followed by the 200-day moving average near $4,497. The 200-day moving average was key dynamic support for the prior uptrend, and this first pullback to test it as support would typically be met with resistance, at least initially. That potential resistance makes the ability to reclaim the 50-day moving average even more important, as it would strengthen the case for gold to eventually challenge the higher targets.
If you’d like to know more about how to trade gold and silver, please visit our educational area.
GBP/JPY holds firm on Wednesday, with the cross-pair trading above the 218.00 figure, as sellers seem to have the upper hand, after a break of a key support trendline, which could open the door for further losses. At the time of writing, the cross trades at 218.16, down 0.05%.
GBP/JPY Price Forecast: Technical outlookAfter reaching a yearly high of 219.61, GBP/JPY retreated 150 pips to the current exchange rate, opening the door for further downside.
The Relative Strength Index (RSI) remains bullish, but it is aiming lower, approaching the 50-neutral level, which could open the door to further downside. However, the market structure suggests that the downtrend stays intact.
For a bearish reversal, if GBP/JPY drops below the July 21 daily low of 217.53. A breach of the latter will expose the April 30 high of 216.60, followed by the 216.00 mark. Below, the next support would be the 50-day Simple Moving Average (SMA) at 215.09, followed by the 100-day SMA at 214.12.
Conversely, if GBP/JPY reaches 219.00, this opens the door to challenge the year-to-date (YTD) high at 219.61, followed by the 220.00 psychological level.
GBP/JPY Price Chart – Daily
GBP/JPY daily chart Japanese Yen Price This week The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.15%0.61%0.51%0.51%-0.41%0.32%0.76%EUR-0.15%0.46%0.28%0.37%-0.56%0.17%0.61%GBP-0.61%-0.46%-0.17%-0.11%-1.01%-0.29%0.19%JPY-0.51%-0.28%0.17%0.09%-0.86%-0.20%0.37%CAD-0.51%-0.37%0.11%-0.09%-0.87%-0.31%0.30%AUD0.41%0.56%1.01%0.86%0.87%0.73%1.21%NZD-0.32%-0.17%0.29%0.20%0.31%-0.73%0.48%CHF-0.76%-0.61%-0.19%-0.37%-0.30%-1.21%-0.48% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
USD/ZAR daily price chart showing the descending triangle pattern, EMA cluster (20/50/100/200), and support zones at 16.18 and 15.72. Source: TradingView A descending triangle is drawn on the chart, with a falling upper trendline capping every rally since April and horizontal support underneath. That pattern typically resolves lower, which aligns with the marked target arrow pointing down toward the support zones.
Will the SARB Hike Keep the Rand Bid? The case for a lower USD/ZAR rests on South African carry. According to Statistics South Africa, headline inflation jumped to 5.0% in June from 4.5% in May, the highest reading in two years and above the 4.7% consensus.
Transport was the main driver, with fuel prices up 34.3% over the year. That print lands one day before the South African Reserve Bank decision on July 23.
Bank of America and Goldman Sachs both expect a 25bp move to 7.25%, and Governor Kganyago has flagged that further tightening may be needed. Higher local rates widen the yield gap that pays traders to hold the rand, which supports the currency and pressures USD/ZAR.
If the SARB delivers and defends that carry, the bearish trend stays live. A daily close below the 20- and 50-day EMAs near 16.39 opens the door to the first support band at 16.18. A break of 16.18 would expose the lower support zone around 15.72.
The key risk to this bearish thesis is a dovish surprise. A split committee that holds at 7.00%, similar to the 4-2 vote in May, would remove the carry catalyst and let the pair drift back toward its moving averages.
USD/CHF registers solid gains on Wednesday, with buyers reclaiming the 0.8100 figure amid a trading session in which the Greenback loses ground against most G8 FX currencies but posts gains versus the safe-haven status of the Swiss Franc. The pair trades at 0.8146, up more than 0.20%.
USD/CHF price forecast: Technical outlookThe market structure remains bullish, with USD/CHF forming a series of higher highs and higher lows. Also, the Relative Strength Index (RSI) is bullish, indicating that buyers are gaining momentum and opening the door to further upside. Hence, the path of least resistance is upwards.
The first ceiling level for USD/CHF to clear is the July 13 high at 0.8149. Once surpassed, the next stop would be the August 1, 2025, high at 0.8172, followed by 0.8200. On further strength, the next area of interest will be the June 19, 2025, peak at 0.8215, ahead of the June 4, 2025, daily peak at 0.8250. Once those levels are taken out, the next stop is 0.8300.
On the flip side, to turn bearish, the USD/CHF needs to clear the latest cycle low seen at 0.8061, the July 17 low of the day (LOD), followed by the July 10 swing low of 0.8030. Below lies the 0.8000 mark.
USD/CHF daily price chart
USD/CHF daily chart Swiss Franc Price This week The table below shows the percentage change of Swiss Franc (CHF) against listed major currencies this week. Swiss Franc was the strongest against the British Pound.
USDEURGBPJPYCADAUDNZDCHFUSD0.14%0.59%0.49%0.50%-0.42%0.30%0.75%EUR-0.14%0.46%0.28%0.37%-0.55%0.15%0.60%GBP-0.59%-0.46%-0.17%-0.11%-1.00%-0.30%0.19%JPY-0.49%-0.28%0.17%0.10%-0.85%-0.21%0.36%CAD-0.50%-0.37%0.11%-0.10%-0.87%-0.32%0.29%AUD0.42%0.55%1.00%0.85%0.87%0.71%1.20%NZD-0.30%-0.15%0.30%0.21%0.32%-0.71%0.49%CHF-0.75%-0.60%-0.19%-0.36%-0.29%-1.20%-0.49% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Swiss Franc from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CHF (base)/USD (quote).
Gold price (XAU/USD) surges over 1.50% on Wednesday, cracks a key resistance trendline and hits a new two-week high as the Greenback weakens. This Bullion price action comes despite rising tensions and hostilities between the US and Iran. The XAU/USD trades at $4,146 after bouncing off a low of the day (LOD) of $4,076.
XAU/USD jumps as buyers overpower yield and Oil risksSentiment remains neutral, though the yellow metal gets a tailwind from the fall of the US Dollar Index (DXY). The DXY, which tracks the performance of the American currency against six other currencies, is down 0.07% to 101.12.
It's worth noting that tensions in the ongoing Gulf war remain high after US President Donald Trump warned Iran that if they attack more ships, the US would retaliate by attacking bridges or power plants, including those located near the country’s capital.
As the news broke, West Texas Intermediate (WTI), the US crude benchmark, rose over 6% to $86.80 per barrel. Surprisingly, the positive correlation between Crude prices and the US Dollar appears to be breaking, as the latter is registering losses.
The US 10-year Treasury yield is up nearly three basis points to 4.654%. Meanwhile, money markets had priced in a 65% chance that the Fed will keep rates unchanged at the July 29 meeting, down from 78% a day earlier, according to Prime Terminal data.
Bullion buyers bought the dip, sending XAU’s price past $4,100, opening the door for further upside. However, a larger-scale war against Iran could prompt investors to book profits as high energy prices increase the Dollar’s safe-haven appeal.
The US Secretary of State, Marco Rubio, said that the US is willing to negotiate an end to the conflict but added that Tehran is not serious about talks.
In the US, the economic docket is absent, yet traders are waiting for the release of Initial Jobless Claims for the week ending July 18. Alongside this, traders are also bracing for S&P Flash PMIs and the Federal Reserve’s (Fed) monetary policy decision next week.
XAU/USD technical outlook: Gold price reclaims $4,100, eyes on 50-day SMAGold stages a recovery, breaking a downtrend resistance line and clearing the path to test the $4,200 mark. Momentum as measured in the Relative Strength Index (RSI) turned bullish. Hence, XAU/USD might test the 50-day Simple Moving Average (SMA) at $4,253 in the near term. Once those levels are cleared, the next resistance is the key psychological levels of $4,300 and $4,400. Once breached, the next stop is the 200-day SMA at $4,496.
For a bearish reversal, Gold must drop below $4,100. Below this area sits the July 21 daily low of $3,999, ahead of the October 28, 2025, low of $3,886.
Gold daily chart Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Silver (XAG/USD) trades with modest gains on Wednesday, supported by a slight pullback in the US Dollar (USD). However, the metal lacks strong upside momentum as traders weigh energy-driven inflation risks and their impact on the Federal Reserve’s (Fed) interest-rate outlook.
At the time of writing, XAG/USD trades around $59.90 after hitting a two-week high of $60.94 earlier in the day.
Traders expect the Fed to keep monetary policy restrictive for longer, while pricing in at least one interest-rate hike this year. Higher borrowing costs typically weigh on non-yielding assets such as Silver.
From a technical perspective, Silver bulls are struggling to hold above the psychological $60.00 mark. Still, XAG/USD trades above the 20-day Simple Moving Average (SMA), the Bollinger middle band, near $58.86, suggesting that buyers retain some control.
Moving Average Convergence Divergence (MACD) is modestly positive, suggesting a slight bullish tilt in short-term pressure, but Average Directional Index (ADX) at 39 indicates the underlying trend remains fairly strong, limiting the scope for abrupt reversals.
On the upside, initial resistance is seen at the intraday high of $60.94, followed by the upper Bollinger Band near $62.39. A sustained break above this area could open the door toward the $70.00 barrier.
On the downside, the 20-day SMA near $58.86 offers immediate support, followed by the lower Bollinger Band at $55.34. A deeper decline could expose the psychological $50 level.
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.
XAU/USD Current price: $ 4,144US President Donald Trump threatened to intensify attacks on Iran.The United Kingdom released the June Consumer Price Index.XAU/USD is bullish in the near-term, next hurdle at $4,200. The XAU/USD pair extended its weekly rally towards the $4,160 region on Wednesday, holding nearby in the American afternoon. The Greenback found modest demand throughout the first half of the day, but gave up following comments from United States (US) President Donald Trump, threatening to destroy Iran’s power plants and bridges.
“Any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT, including those located next to, or in, the Capital City of Tehran,” President Trump shared on Truth Social. The news triggered safe-haven demand, yet again, demand for the precious metal outpaced that for the US Dollar (USD).
Meanwhile, it was the turn of the United Kingdom (UK) to update inflation data. According to the Office for National Statistics (ONS), the Consumer Price Index (CPI) rose 2.6% in the year to June, easing from the 2.8% posted in May. Core annual inflation rose 2.6%, matching the previous reading and slightly higher than the 2.5% anticipated by market players, not enough to fuel rate hike speculation.
Most major economies reported the latest CPI figures in the last few days, and only US and UK inflation receded in June. Canadian and New Zealand figures were above expectations, although not far above previous readings. The numbers are a clear example of how energy-related inflation and, hence, the Middle East war are impacting financial markets these days, and therefore, shaping sentiment and trends.
Easing US inflationary pressures have put a halt to the US Dollar (USD) rally against Gold amid decreasing odds for rate hikes, even in a risk-averse environment.
XAU/USD short-term technical outlook
In the four-hour chart, XAU/USD turned bullish, as the price stands above the 20-period Simple Moving Average (SMA) at $4,060.38, the 100-period SMA at $4,074.44, and the 200-period SMA at $4,124.41, turning this trio into a dense support band beneath the market. Momentum remains constructive, with the Relative Strength Index (RSI) indicator at 66 and the 14-period Momentum indicator holding above its midline, despite losing upward strength.
In the daily chart, XAU/USD turned neutral. The pair holds well below the 200-day SMA at $4,496.16 and the 100-day SMA at $4,501.34, keeping the longer-term trend capped despite the recent bounce. At the same time, XAU/USD reclaimed the 20-day SMA (now at $4,069.95), suggesting some near-term stabilization. Finally, the RSI indicator aims higher at 51, while the Momentum indicator heads nowhere around their midlines.
On the downside, immediate support is located at around $4,100, followed by a congestion of moving averages in the $4,070 region. Deeper pullbacks should deny the bullish case and see the pair battle to retain the $4,000 mark. Resistance, on the other hand, lies at the intraday high at $4,165, followed by the $4,200 threshold.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Key Points:EUR/USD gained some ground ahead of tomorrow's ECB decision.USD/CAD moved lower as precious metals markets rallied. USD/JPY remained stuck near the 163.00 level.
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U.S. Dollar Index Is Stuck Near Resistance At 101.15 – 101.30
DXY 220726 4h Chart U.S. Dollar Index is losing some ground despite rising Treasury yields. The yield of 2-year Treasuries settled above 4.30%, while the yield of 10-year Treasuries moved above 4.65%. Oil prices continue to move higher, but U.S. dollar does not get additional support.
From the technical point of view, U.S. Dollar Index is stuck below the resistance level at 101.15 – 101.30. In case this attempt is successful, U.S. Dollar Index will head towards the next resistance level, which is located in the 101.80 – 101.95 range.
EUR/USD Attempts To Rebound Ahead Of ECB Decision
EUR/USD 220726 4h Chart EUR/USD gains some ground ahead of ECB Interest Rate Decision, which will be released tomorrow. Analysts expect that ECB will leave the interest rate unchanged at 2.4%. The deposit facility rate is expected to remain unchanged at 2.25%.
In case EUR/USD manages to settle above the resistance level at 1.1420 – 1.1435, it will head towards the next resistance level, which is located in the 1.1500 – 1.1515 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Pulls Back As Traders Focus On UK Inflation Data GBP/USD 220726 4h Chart GBP/USD is losing ground as traders focus on inflation data from the UK. Inflation Rate declined from 2.8% in May to 2.6% in June, compared to analyst forecast of 2.7%. Core Inflation Rate remained unchanged at 2.6%, while analysts expected that it would drop to 2.5%.
The nearest support level for GBP/USD is located in the 1.3335 – 1.3350 range. A move below the 1.3335 level will open the way to the test of the next support level at 1.3250 – 1.3265.
On the upside, GBP/USD needs to settle above the 1.3400 level to have a chance to gain upside momentum in the near term. If GBP/USD climbs above 1.3400, it will head towards the 50 MA at 1.3424. A move above the 50 MA will push GBP/USD towards the resistance at 1.3450 – 1.3465.
USD/CAD 220726 4h Chart USD/CAD pulled back as traders focused on the rally in precious metals markets. Gold climbed towards the $4150 level, while silver moved towards the psychologically important $60.00 level. Other commodity-related currencies are losing ground in today’s trading session.
If USD/CAD declines below the 50 MA at 1.4075, it will move towards the support level, which is located in the 1.4010 – 1.4025 range.
On the upside, a successful test of the resistance at 1.4125 – 1.4140 will push USD/CAD towards the resistance level at 1.4235 – 1.4250.
USD/JPY Is Stuck Near 163.00 USD/JPY 220726 4h Chart USD/JPY settled near the 163.00 level as traders worried about potential interventions from the Bank of Japan.
Today, traders also had a chance to take a look at the Exports report from Japan. The report indicated that Japan’s Exports increased by +19.3% year-over-year, compared to analyst consensus of +18.6%.
In case USD/JPY settles above 163.00, it will head towards the 165.00 level. RSI has recently moved back into moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
The Pound Sterling holds firm during the North American session as UK inflation data dipped, easing pressure on the Bank of England to tackle higher prices, while attacks between the US and Iran don’t seem to be ending in the Middle East. The GBP/USD trades at 1.3377. Read More...
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Canadian Dollar Technical Outlook: USD/CAD Short-term Trade Levels USD/CAD rebounds from near-term downtrend support after posting an outside-day reversal Monday. The recovery is now challenging the upper boundary of the July downtrend- breakout needed to confirm a more significant low is in place. Rejection at current levels would keep the broader corrective decline intact. Next week's FOMC decision and June PCE inflation data could provide the next major catalyst. Resistance 1.4097-1.4109 (key), 1.4155, 1.4197-1.4202- Support 1.4045, 1.4020 (key), 1.3978/82 USD/CAD is consolidating just below major resistance after a powerful multi-week rally carried the pair into fresh yearly highs. The tight range highlights a market coiling for its next directional move, with the July opening range now taking shape beneath a key technical barrier. With momentum still elevated, a breakout here could either fuel the next leg of the broader uptrend or trigger the first meaningful reversal signal since the May advance began. Battle lines drawn on the USD/CAD short-term technical charts.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Loonie setup and more. Join live on Monday’s at 8:30am EST.
Canadian Dollar Price Chart – USD/CAD Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView
Technical Outlook: In my last Canadian Dollar Short-term Outlook, we noted that, “A five-week rally has stalled into the May uptrend with the USD/CAD trading in a well-defined range just below resistance into the start of the month. From a trading standpoint, losses would need to be limited to 1.4109 IF price is heading higher on this stretch...” The range broke nearly two-weeks later with USD/CAD plunging more than 1.7% off the yearly high to break below the May trendline. The decline rebounded off near-term downtrend support on Monday with price marking an outside day reversal off the low. The recovery is now testing resistance at the upper bounds of the monthly downtrend, and the focus is on possible inflection off this pivot zone in the days ahead.
Canadian Dollar Price Chart – USD/CAD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CAD on TradingView
Notes: A closer look at Canadian Dollar price action shows USD/CAD trading within the confines of a descending pitchfork extending off the monthly high with the recent recovery now testing the upper parallel. Note that the 38.2% retracement of the July decline converges on the November high-day close at 1.4097-1.4109. A breach / daily close above this threshold would be needed to suggest a more significant near-term low is in place and invalidate the monthly downtrend. Subsequent resistance objectives are eyed at the 61.8% retracement at 1.4155 and the monthly open / high-day close (HDC) at 1.4197-1.4202. Look for a larger reaction there IF reached with a weekly close above the 2025 March lows at 1.4235/39 ultimately needed to mark resumption of the yearly uptrend.
Initial support rests with the 61.8% retracement of the weekly range at 1.4045 and is backed by the objective weekly open at 1.4020. Note that this level converges on the median line into the close of the week and losses below this slope would threaten resumption of the July downtrend. The next major technical considerations are eyed at the 2022 high and the 38.2% retracement of the May rally at 1.3978/82.
Bottom line: USD/CAD is now testing multi-week downtrend resistance, and the focus is on possible inflection off this zone with the near-term long-bias vulnerable while below. From a trading standpoint, losses would need to be limited to the weekly open IF price is heading higher on this stretch with a close above 1.4109 needed to fuel the next leg of the rally. Losses below 1.3978 would suggest a more significant correction is underway.
Keep in mind, the U.S. economic calendar is relatively quiet ahead of next week's FOMC rate decision and the release of June PCE inflation data. Stay nimble into the Fed and watch the weekly closes for confirmation of the broader directional bias. Review my latest Canadian Dollar Weekly Forecast for a closer look at the longer-term USD/CAD technical trade levels.
Key USD/CAD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts Australian Dollar Outlook: AUD/USD Rally Tests Make-or-Break Resistance Japanese Yen Short-term Outlook: USD/JPY Defends the Uptrend as the Range Tightens British Pound Short-term Outlook: GBP/USD Breakout Attempts Major Trend Reversal US Dollar Short-term Outlook: USD Uptrend Faces Make-or-Break Test After CPI Euro Short-term Outlook: EUR/USD Coils Above Critical Support- Decision Time Gold Price Short-term Outlook: XAU/USD Bulls Try to Carve Out a Low After 30% Drop Swiss Franc Short-term Outlook: USD/CHF Overbought Rally Tests Major Resistance Written by Michael Boutros, Senior Technical Strategist
Daily September Brent Crude Oil Futures Brent above $95 intraday, WTI above $87, tankers reversing course in the Red Sea after the Houthi blockade threat and Rubio closing the door on near-term diplomacy. That was the sellers’ best shot this week and the market absorbed it. The shorts who leaned into the oil surge expecting gold to fold are the ones buying Wednesday afternoon.
The rally does not have a clean fundamental driver behind it. Yields are not falling, the dollar is not collapsing and the Fed has not changed its tone. This is a positioning reset after the downside ran out of momentum and that limits how far it goes without something new underneath. The conflict that is putting a floor under gold is the same conflict lifting oil and that tension has not resolved.
The dollar dipped Wednesday but only after holding support earlier in the week. That is not a tailwind for gold. The January record high came apart as crude lifted the inflation outlook and rate cuts got pulled from the forecast one by one. The same trade is back and running hotter now with Hormuz under pressure and Saudi tankers rerouting. The war is keeping dip buyers interested but that bid alone has not been strong enough to push gold through resistance cleanly.
FOMC Next Week Is the Real Test A Reuters poll showed economists expect the Fed to hold rates steady through 2026 but futures traders are pricing two hikes by the end of March next year and crude is the reason that gap keeps widening. Next week’s meeting does not have to deliver a hike to put pressure back on gold. The statement and Warsh’s tone on energy and inflation will tell traders whether the covering rally has room to extend or whether the same forces that drove the selling are about to reassert.
No major U.S. economic data lands before Friday’s flash PMI reports. Gold is trading oil headlines and Middle East developments until then. The July and August inflation numbers come after the FOMC meeting and if the crude surge is showing up in the broader price data, the hike conversation gets louder and this rally runs out of room fast.
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Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius
Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius
Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
About the Yen: The dollar/yen went over 163 for the first time since July 1986. See the quarterly chart. FinMin Katayama said Japan will take decisive action in the currency market if needed, and Chief Cabinet Secretary Kihara said the government is ready to "respond as appropriate at any time."
Many observers think this jawboning means we need to expect intervention at any time now, but as we wrote before, it would be a waste of money and we see 165 as perfectly possible. For one thing, the BoJ is independent and it would take government meddling in interest rates to narrow the differential.
The current overnight rate is 1%, up from zero in June and that is a 31-year high in its own right. Reuters repeats its June poll had another hike to 1.25% by year-end. This is still far, far below the other G7 rates and their yields. We may get that additional hike a little sooner if rising energy costs raise inflation, but that would narrow the differential only a little, depending on how high the US yield goes.
OutlookThe price of oil is the primary starting point for just about everything else, but it’s joined now by the new tariffs. A tariff on Brazilian goods, imposed by Trump in a fit of pique, begins this week. The Canada story has some time to run but the White House warns that additional tariffs are in the pipeline. The immediate worry is a new 100% tariff on all generic drug imports to begin two years from Aug 1 and move to 200% the next year.
Trump’s policy choices are inflationary. No wonder yields are creeping upward. The 30-year long bond is yielding the highest in a year, 5.131%. How much higher can it go? More to the point, when?
ForecastConditions are about as dire as they get. It may seem counter-intuitive, but we are nearing a point where traders throw up their hands and say “basta!” They may have extended positions to the limit, or their nerves can’t take it, or some other ruling sentiment, but stretched prices are a warning sign of an ugly reversal. It may be short-lived, because conditions can’t be expected to improve any time soon—not until talks start up again. But watch out.
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Euro Technical Outlook: EUR/USD Multi-Timeframe Analysis Michael Boutros, Senior Market Analyst at FOREX.com, examines EUR/USD, the European Central Bank, and the critical technical levels that could determine the pair's next major move. With the ECB expected to leave interest rates unchanged, attention turns to Christine Lagarde's guidance, widening policy divergence with the Federal Reserve, and how rising energy prices could complicate the euro's outlook.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
Key EUR/USD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts Australian Dollar Outlook: AUD/USD Rally Tests Make-or-Break Resistance Japanese Yen Short-term Outlook: USD/JPY Defends the Uptrend as the Range Tightens British Pound Short-term Outlook: GBP/USD Breakout Attempts Major Trend Reversal US Dollar Short-term Outlook: USD Uptrend Faces Make-or-Break Test After CPI Gold Price Short-term Outlook: XAU/USD Bulls Try to Carve Out a Low After 30% Drop Swiss Franc Short-term Outlook: USD/CHF Overbought Rally Tests Major Resistance Written by Michael Boutros, Senior Technical Strategist
Ultimately, the market will be paying attention to interest rates as they are rising, and typically this will work against gold. Whether or not anything has changed from a longer-term standpoint remains to be seen, but as things look right now, it seems like the market is in a bit of consolidation. The top of that consolidation is at the $4,200 level, so that will be worth watching very closely. A break above that would have traders excited to say the least.
Death Cross Signals and Support Levels We recently had the death cross when the 50-day EMA breaks down below the 200-day EMA, a signal that longer-term traders normally view as very negative.
The $4,000 level continues to be a bit of a floor, but we’ll see how that plays out. It’s more of a range based on price history down to the $3,900 level. Breaking below there would obviously have people thinking lower pricing. It would be a major breach of support.
As things stand right now, it looks like we’re just simply content to go back and forth in this range, and range-bound traders are probably living it up right now, as it is such a well-defined area. This remains a market that seems to be looking to make a bigger move, but with so much uncertainty, it is possible that traders are simply waiting for a clearer signal.
Silver daily chart, hovering near 59.40 at the lower end of its range. Source: TradingView The silver market rallied slightly during the trading session here on Wednesday, with the $60 level offering a little bit of resistance. It’s a large, round, psychologically significant figure, and we have seen a 50-day EMA drop below the 200-day EMA, showing the death cross. The death cross, of course, is a negative sign for traders who are more long-term based.
That being said, it’s interesting with rising interest rates, we are still trying to rally in silver, and we are seeing the overall market trying to ignore the interest rate situation in America. As long as that ends up being the case, I think you will get a little bit of volatility and push and pull, but it’s hard to argue with the idea that silver is in a downtrend because of this. This is a market that is trying to turn things around, but will have a lot of work to do to change the overall attitude.
EUR/USD trades around 1.1415 at the time of writing on Wednesday, up 0.15% on the day, but its recovery remains limited after failing to break above 1.1420. The pair maintains a cautious tone as rising geopolitical tensions in the Middle East continue to fuel demand for safe-haven assets, limiting the US Dollar (USD) downside.
Investor concerns intensified after another escalation between Washington and Tehran. The United States (US) launched fresh strikes against Iranian targets, while US President Donald Trump warned that any Iranian attack on a vessel in the Strait of Hormuz would trigger US strikes against key Iranian infrastructure, including bridges and power plants. These developments continue to weigh on market sentiment and reinforce risk aversion.
Meanwhile, Oil prices continue their sharp rally, gaining more than 25% since tensions in the region escalated. The surge in energy prices is a headwind for the Eurozone economy, which remains highly sensitive to higher energy costs, limiting the Euro's (EUR) upside potential.
Despite this backdrop, the common currency continues to find support from expectations surrounding the European Central Bank (ECB) monetary policy meeting scheduled for Thursday. The ECB is widely expected to leave interest rates unchanged, although markets continue to price in additional policy tightening in the coming months if energy-driven inflationary pressures persist.
Euro holds firm as ECB expectations offset energy reboundAnalysts at ING note that EUR/USD has "been performing relatively well despite the rebound in energy prices that has seen natural gas prices retesting the March highs of EUR60/MWh." They argue that "interest rate differentials have probably had a say here, with higher oil prices seeing investors price a more aggressive tightening response from the European Central Bank than the Federal Reserve."
Looking ahead, ING says that, "barring a near-term move towards another cease-fire between the US and Iran, our bias remains for EUR/USD to drift back to 1.1380 and then take its cue from tomorrow's ECB meeting." However, the bank cautions that, "as our team points out in their ECB cheat sheet, it is hard to see the market pricing in even higher ECB rates, regardless of the language delivered at tomorrow's ECB meeting and press conference."
The US Dollar, however, remains supported by safe-haven demand. The US Dollar Index (DXY) holds above 101.00 after recovering part of its earlier daily losses. Investors continue to favor the Greenback as geopolitical risks intensify, even though recent US inflation data has reduced expectations that the Federal Reserve (Fed) could tighten monetary policy in the coming months.
Euro Price Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.17%-0.06%-0.10%-0.19%0.02%0.05%-0.14%EUR0.17%0.11%0.09%-0.01%0.19%0.24%0.03%GBP0.06%-0.11%-0.02%-0.13%0.07%0.12%-0.08%JPY0.10%-0.09%0.02%-0.10%0.11%0.13%-0.05%CAD0.19%0.01%0.13%0.10%0.21%0.30%0.05%AUD-0.02%-0.19%-0.07%-0.11%-0.21%0.05%-0.17%NZD-0.05%-0.24%-0.12%-0.13%-0.30%-0.05%-0.22%CHF0.14%-0.03%0.08%0.05%-0.05%0.17%0.22% 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).
Interest rates in America continue to put bearish pressure on some currencies.
EUR/USD Technical Analysis
EUR/USD daily chart, slipping near 1.1410 toward the 1.1400 level. Source: TradingView The euro has rallied slightly in the early part of the trading session on Wednesday, but as you can see, the market is struggling to continue to go to the upside. Ultimately, this is a market that is trying to hang around the 1.14 level and make a bigger decision as to where we are going next.
With that being the case, I think this is a market that anytime it rallies, there will be a certain amount of people willing to sell it. Rising interest rates in America continue to put bearish pressure on this pair. The 1.14 level is a support area. Some traders could even see this as a bearish flag with the measure of the pole somewhere just around the 1.12 level.
GBP/USD Technical Analysis
GBP/USD daily chart, hovering near 1.3370 where its EMAs converge. Source: TradingView The British pound initially rallied, but it looks like the sellers are starting to come back in as well with those higher rates. That does make a certain amount of sense as the interest rate differential shrinks between London and DC. With so many concerns around the world, the US dollar is considered to be a safety currency most of the time. Maybe that is what is going on, but we are right in the middle of a larger consolidation area, and that is something worth paying attention to as well.
USD/CHF Technical Analysis USD/CHF daily chart, pushing near 0.8120 back toward its July highs. Source: TradingView The US dollar has done very little against the Swiss franc during the trading session on Wednesday. The 0.8150 level continues to be an area that is attracting a certain amount of attention as potential resistance. A break above there would be a bullish sign; it would be a break of a swing high in an area that goes back quite some time. Short-term pullbacks continue to attract buyers. The interest rate differential most decidedly favors America here, so carry traders like buying this as well.
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Gold (XAU/USD) climbs to a two-week high on Wednesday as bargain hunters step in near the $4,000 mark, while traders weigh Middle East risks and the Federal Reserve’s (Fed) monetary policy outlook.
At the time of writing, XAU/USD trades around $4,122, up 1.10% on the day.
While fresh buying interest lifts Bullion, the broader fundamental backdrop has changed little. The United States carried out an eleventh straight night of strikes on Iran, while Tehran responded with fresh attacks targeting Bahrain, Kuwait and Jordan.
The tit-for-tat attacks are disrupting energy supplies through the Strait of Hormuz, pushing Oil prices higher again and adding to inflation concerns.
West Texas Intermediate (WTI) trades around $86.50, its highest level since June 11.
Rising inflation risks support expectations that the Fed will keep interest rates higher for longer and may even consider raising them as it seeks to bring inflation back to its 2% target.
Higher borrowing costs make interest-bearing assets more attractive, reducing the appeal of the non-yielding metal. Meanwhile, a firm US Dollar (USD) and elevated US Treasury yields also make it harder for the commodity to build on its recent rebound.
This suggests Gold may struggle to stage a stronger recovery until inflation concerns ease and Fed rate hike bets cool.
In the near term, the metal is likely to trade within a range as traders brace for the July 28-29 Federal Open Market Committee (FOMC) meeting. According to the CME FedWatch Tool, the probability of a July rate hike has climbed to 28% from 10% a week ago, while the odds of a September hike stand at 69%.
The US economic calendar offers little on Wednesday, leaving traders focused on developments in the Middle East. US Secretary of State Marco Rubio said Washington would reduce Iran’s ability to target shipping whenever possible and warned that a nuclear-armed Iran was intolerable.
Technical analysis: XAU/USD attempts a recovery as RSI and MACD improve
XAU/USD maintains a capped tone, holding below the long-term 200-day Simple Moving Average (SMA) at $4,496 and the 100-day SMA at $4,501. The metal is, however, supported by the 21-day SMA at $4,065, hinting at near-term stabilization above this short-term trend marker.
The Relative Strength Index (RSI) on the daily chart is at 49 and sits near neutral, while the Moving Average Convergence Divergence (MACD) indicator has turned slightly positive, suggesting improving momentum that has yet to overcome the prevailing overhead supply.
On the topside, initial resistance is seen at the horizontal barrier near $4,200, followed by a stronger cap at $4,400 before the broader bearish structure defined by the 200-day SMA at $4,496 and the 100-day SMA at $4,501.
On the downside, immediate support emerges around the 21-day SMA at $4,065, followed by the horizontal floor at $4,000. A decisive break below this level could trigger deeper losses.
(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.
GBP/USD remains steady after four days of losses, trading around 1.3370 during the European hours on Wednesday. The pair is holding a mildly bearish near‑term bias as spot remains capped beneath the 50‑day and nine-day Exponential Moving Averages (EMAs).
The 14-day Relative Strength Index (RSI) at 49.56 sits near the neutral line, hinting at consolidative momentum rather than a decisive directional push. Read more...
British Pound remains depressed against US Dollar following soft UK inflation dataThe British Pound (GBP) consolidates losses against the US Dollar (USD) on Wednesday, as a string of UK inflation figures provided some leeway for the Bank of England to maintain its “wait-and-see” stance through the coming months. The GBP/USD pair remains pinned near weekly lows, below 1.3400 following a nearly 1.2% decline in the last four days.
Data released by the UK National Statistics Office on Wednesday revealed that the Consumer Price Index (CPI) moderated to a 2.6% year-over-year (Y-o-Y) growth in June, from 2.8% in May, below the 2.7% forecasted by market analysts. The Core CPI, however, remained steady at 2.6% against expectations of a 2.5% reading. Read more...
British Pound attracts bids against Japanese Yen after mixed UK CPI dataThe British Pound (GBP) witnesses slight buying interest against its major currency peers after the release of the United Kingdom (UK) Consumer Price Index (CPI) data for June. Against the Japanese Yen (JPY), the British currency rebounds strongly from the intraday low of 218.20.
The Office for National Statistics (ONS) has reported a slower-than-expected headline CPI growth. The headline inflation arrives at 2.6% Year-on-Year (YoY), lower than the estimates of 2.7% and the previous reading of 2.8%. On a monthly basis, the headline inflation rises at a moderate pace of 0.1%, as expected, against the previous reading of 0.2%. Read more...
Silver (XAG/USD) trades around $59.35 at the time of writing on Wednesday, up 0.94% on the day, as persistent safe-haven demand offsets the negative impact of rising inflation expectations. The white metal remains supported by escalating geopolitical tensions in the Middle East, even as the sharp rebound in Oil prices reinforces expectations that major central banks may need to keep monetary policy restrictive for longer.
West Texas Intermediate (WTI) Oil extends its rally to around $86.60 per barrel after the closure of the Bab el-Mandeb Strait intensified concerns over global energy supplies. The waterway represents a key route for global energy shipments, and the latest disruption has reignited fears of supply shortages. According to BBC News, Yemen's Iran-backed Houthi movement announced a maritime embargo against Saudi Arabia in retaliation for the Saudi blockade of ports and airports in Houthi-controlled areas.
Higher energy prices are increasing concerns about a new wave of inflation, a development that could encourage central banks to maintain restrictive monetary policies. Such an environment would normally weigh on non-yielding assets such as Silver by pushing bond yields higher.
However, investors continue to favor precious metals as geopolitical uncertainty boosts demand for defensive assets. The conflict between the United States (US) and Iran, together with mounting risks to global energy flows, has supported inflows into traditional safe havens, helping Silver remain resilient despite the headwind from rising rate expectations.
Looking ahead, market participants will closely monitor Thursday's European Central Bank (ECB) monetary policy decision. While policymakers are widely expected to leave interest rates unchanged, investors will focus on comments from ECB President Christine Lagarde for fresh clues on the inflation outlook and the future path of monetary policy.
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 strong support at 4,000 helps gold defy the fundamentals. Rising Treasury yields and a strong US dollar are creating headwinds. The US dollar staged a four-day growth against the backdrop of air strikes on Iran. Rumours of a temporary ceasefire have not been confirmed, pushing Brent to near $93 per barrel and fuelling inflation fears. The odds of two Fed rate hikes in 2026 are estimated at 50/50, supporting the USD.
This makes the gold rally all the more surprising, as a strong dollar and rising Treasury yields are typical headwinds. However, this time demand is supporting the precious metal. Capital outflows from ETFs have given way to inflows. The 7.4-metric-tonne increase in holdings of specialised exchange-traded funds on 21 July was the month’s largest. Hedge funds have increased their net long positions in gold to a five-week high.
It is likely that the resilience of support at $4,000 per ounce, together with gold’s poor performance in previous periods, has led investors to view the precious metal as oversold. By the end of June, it had recorded its worst monthly performance since the 2008 global economic crisis, falling at its fastest pace since 2013.
During this period, pressure on gold prices was fuelled by rumours that central banks in the Gulf states were selling bullion via intermediaries. Turkey was the main focus of these rumours. Its gold reserves fell by 81 tonnes in the first half of the year, equivalent to $10.6 billion at current prices. The June deal between the US and Iran was, in theory, intended to halt this process, but the escalation of geopolitical tensions could accelerate it.
Despite the price rebound, the external backdrop remains highly unfavourable. The higher Brent climbs, the more likely it is that high inflation will become entrenched in the US economy. At the same time, the Fed’s shift from verbosity to brevity is alarming investors. Under these conditions, the likelihood is growing that the central bank will tighten monetary policy without warning.
The strengthening of the US dollar has pushed USDJPY above 163 for the first time in four decades. This has prompted government officials to step up their verbal interventions. Finance Minister Satsuki Katayama has ruled out taking bold and decisive action if necessary.
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I want to circle back to two earlier calls that have aged rather well, at least since the call to action went out.
I hope you followed the moneyThe first came from Bloomberg macro strategist Simon White, who argued that some of the money driving the semiconductor surge may have been pulled from gold and Bitcoin. The second came from Goldman Sachs, whose commodities team maintained that persistent central-bank demand was placing a structural floor beneath bullion even as higher real yields, a firmer dollar and renewed Fed uncertainty weighed on the market.
Gold has since rebounded, but I still regard the move as a bounce rather than a confirmed breakout. The market has cleared a few minor resistance levels and repaired some of the technical damage, yet the larger barriers remain intact. The tone has improved, but price has not done enough to declare that the next major leg is already under way.
Nice bounce
White’s flow argument was useful because it looked beyond the usual explanations for gold’s weakness. Rather than treating the semiconductor boom as a self-contained event, he suggested that part of its liquidity may have come from investors selling previous winners to fund the chase into chips.
That made sense at the time. Gold had lost momentum, Bitcoin had cooled and semiconductors appeared to offer the cleanest exposure to the AI buildout. Capital moved toward the brightest corner of the market, as it usually does when growth, momentum and narrative all point in the same direction.
But once the chip trade began to crack, the flow could work in reverse.
Investors who had sold gold to finance semiconductor exposure were suddenly holding a weakening asset while watching bullion begin to stabilize. That did not guarantee a direct round trip, but it created the conditions for at least part of the money to come back.
The important point is that gold’s rebound was not driven only by falling yields, geopolitical anxiety or a change in Fed expectations. It was also helped by the unwinding of an earlier liquidity shift that had moved capital out of macro hedges and into the narrowest part of the equity market.
Goldman’s work explained why gold was able to absorb that pressure without suffering a deeper structural break.
According to Goldman Sachs Global Investment Research, central banks purchased an estimated 81 tonnes of gold in May, with the three-month seasonally adjusted pace running at 67 tonnes per month, nearly four times the pre-2022 average. China was the largest identifiable buyer, reinforcing the view that official-sector demand remains part of a broader reserve-diversification process rather than a short-lived response to price weakness.
That distinction matters because central banks operate on a very different clock from ETF investors, macro funds and leveraged futures traders.
They are not trying to front-run the next inflation print or trade the next move in real yields. They are buying gold because the reserve system looks more politically exposed, more fragmented and more dependent on confidence than it once did.
The freezing of Russia’s reserves in 2022 changed the calculation. Reserve managers were reminded that foreign assets can carry political conditions as well as financial returns, and that diversification is no longer simply a matter of spreading risk across currencies. It is also about holding part of the national balance sheet outside another government’s reach.
Gold fits that requirement neatly. It carries no foreign issuer risk, no counterparty promise and, once held domestically, sits beyond much of the sanctions machinery that now shadows the reserve system.
That structural demand is the foundation beneath Goldman’s $4,900/oz end-2026 forecast. The target is attention-grabbing, but the more important issue for traders is how official buying changes the behaviour of corrections.
A stronger dollar and higher real yields can still push gold lower. ETF selling can still accelerate a pullback and leveraged positions can still be forced out. But the market now appears to have a large buyer underneath it that is far less sensitive to short-term price moves.
The Fed controls the weather. Central banks are positioning for the climate.
That is where the two earlier calls meet.
White identified a potential source of returning private capital as the semiconductor trade weakened. Goldman identified the patient official-sector demand already sitting below the market. One helped explain why money might come back into gold, while the other helped explain why the correction never fully lost its footing.
That made the rebound worth following.
Still, I would not overstate what the chart has accomplished.
Gold has moved from technically vulnerable to technically constructive. Momentum has improved, several minor resistance levels have been cleared and the market has shown that it can absorb renewed pressure from the dollar and rates without immediately falling apart.
But the major technical 200-day MA ceiling remains in place. ( $4,505–$4,510/oz)
Until that level gives way decisively, the move should still be treated as a recovery rather than a clean resumption of the broader bull trend. The market has climbed back onto the road, but it has not yet crossed the mountain pass.
For the next leg to become more convincing, gold will need stronger follow-through from price and broader support from flows. A break above the major resistance zone would be the first requirement. A more stable real-yield backdrop, a softer dollar and renewed ETF demand would add further weight.
Continued central-bank buying remains essential, but official demand alone may not be enough to drive a sustained acceleration. Central banks can provide the foundation; private investors usually build the next floor.
The semiconductor unwind may continue to help. If investors keep reducing crowded AI exposure, gold remains one of the more obvious places for capital to return, particularly because its investment case does not depend on another round of heroic capital expenditure, flawless earnings execution or permanently generous liquidity.
That does not mean every chip-market outflow will find its way into bullion. Markets are never that tidy. It simply means gold is once again competing for capital at a time when one of the market’s most crowded trades is losing its grip.
For now, the earlier calls look sound.
Simon White’s flow analysis helped identify why gold could benefit from a reversal in semiconductor leadership. Goldman’s central-bank work helped explain why the market retained a firm base beneath the selling.
Fortunately, I followed both.
The bounce has been real, the foundations have improved and the market deserves more respect than it did a week ago.
Gold traded around 4,080 USD per ounce on Wednesday, having risen nearly 2% the previous day. Investors continue to assess developments in the Middle East and the impact of elevated oil prices on inflation and interest rates.
Donald Trump has played down the prospects of an imminent resumption of negotiations with Iran and warned of further strikes, which continues to support oil prices. Additional supply risks are emerging from disruptions to shipping across the Red Sea due to actions by the Yemeni Houthis, as well as a series of attacks on the Caspian Pipeline Consortium terminal on Russia's Black Sea coast.
ADP data showed a further slowdown in the US labour market. In the four weeks to 4 July, the private sector created an average of 16,500 jobs per week, down from 19,250 in the previous four-week period. The pace of hiring has now declined for four consecutive periods.
Markets have little doubt that the Federal Reserve will keep rates unchanged at next week's meeting. At the same time, the probability of a rate hike in September now exceeds 55%, which limits gold's upside potential.
Technical analysis
On the H4 XAU/USD chart, the market is trading within a consolidation range around the 4,044 USD level. After an upside breakout, the market moved higher to 4,140 USD. A decline to 4,044 USD followed, with a subsequent rebound to 4,088 USD. A further move lower towards 3,940 USD is expected. The MACD indicator signals the early stages of bearish momentum, with its signal line above the centre line and beginning to turn downwards.
On the H1 chart, the market has broken below the 4,122 USD level and is moving lower towards 4,044 USD, followed by a potential rise to 4,088 USD. A wide consolidation range is forming around 4,088 USD. The Stochastic oscillator confirms this scenario, with its signal line below 80 and pointing downwards towards 20, indicating increasing short-term downside pressure.
ConclusionGold has rallied in response to rising external risks, including escalating tensions in the Middle East, fresh warnings from President Trump on Iran, and supply disruptions in the Red Sea and Black Sea. These factors have pushed oil prices higher, reinforcing concerns about inflation. However, the metal's gains have been tempered by a cooling US labour market, as ADP data showed a fourth consecutive slowdown in hiring. Markets expect the Fed to hold rates next week, although the probability of a September hike exceeds 55%, limiting gold's upside potential. Technically, gold may see a pullback towards 4,044 USD before any further upside, with the broader trend depending on geopolitical developments and US monetary policy expectations.
The US dollar staged a four-day growth against the backdrop of air strikes on Iran. Rumours of a temporary ceasefire have not been confirmed, pushing Brent to near $93 per barrel and fuelling inflation fears. The odds of two Fed rate hikes in 2026 are estimated at 50/50, supporting the USD.
This makes the gold rally all the more surprising, as a strong dollar and rising Treasury yields are typical headwinds. However, this time demand is supporting the precious metal. Capital outflows from ETFs have given way to inflows. The 7.4-metric-tonne increase in holdings of specialised exchange-traded funds on 21 July was the month’s largest. Hedge funds have increased their net long positions in gold to a five-week high.
It is likely that the resilience of support at $4,000 per ounce, together with gold’s poor performance in previous periods, has led investors to view the precious metal as oversold. By the end of June, it had recorded its worst monthly performance since the 2008 global economic crisis, falling at its fastest pace since 2013.
During this period, pressure on gold prices was fuelled by rumours that central banks in the Gulf states were selling bullion via intermediaries. Turkey was the main focus of these rumours. Its gold reserves fell by 81 tonnes in the first half of the year, equivalent to $10.6 billion at current prices. The June deal between the US and Iran was, in theory, intended to halt this process, but the escalation of geopolitical tensions could accelerate it.
Despite the price rebound, the external backdrop remains highly unfavourable. The higher Brent climbs, the more likely it is that high inflation will become entrenched in the US economy. At the same time, the Fed’s shift from verbosity to brevity is alarming investors. Under these conditions, the likelihood is growing that the central bank will tighten monetary policy without warning.
The strengthening of the US dollar has pushed USDJPY above 163 for the first time in four decades. This has prompted government officials to step up their verbal interventions. Finance Minister Satsuki Katayama has ruled out taking bold and decisive action if necessary.
Summary: Gold is rising despite the strong dollar and bond yields: investor demand and the $4,000 level are providing support, but inflation and the Fed remain risks.
Silver prices (XAG/USD) rose on Wednesday, according to FXStreet data. Silver trades at $59.50 per troy ounce, up 1.19% from the $58.80 it cost on Tuesday.
Silver prices have decreased by 16.29% 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 69.21 on Wednesday, down from 69.34 on Tuesday.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Gold (XAU/USD) extends gains for the fourth consecutive day on Wednesday, standing comfortably above $4,100, unfazed by the risk-off market amid rising tensions in Iran and higher Oil prices. The pair has rallied nearly 2.5% so far this week and is on track for its best weekly performance in more than three months.
The precious metal has shown some hesitation on Wednesday's European session, amid concerns that the US-Iran war might escalate out of control as US President Donald Trump threatened to strike nuclear facilities, which, according to Tehran, will extend the conflict throughout the region.
Apart from that, news reports that three Saudi Arabian Oil tankers have turned around in the Red Sea following the Houthis’ announcement of a blockade boosted Oil prices higher, providing additional support to the US Dollar, which has been closely correlated to Crude prices since Iran’s war started.
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.
Technical Analysis: Resistances at $4.140 and $4,200 are likely to challenge bulls
XAU/USD trades at $4,120, holding a bullish immediate bias after breaching the downward trendline resistance from late May highs. The bullish momentum is supported by the 4-hour Relative Strength Index (14), which hovers in the mid-60s, and the positive Moving Average Convergence Divergence (MACD), which together suggest buyers retain control.
Upside attempts, however, remain capped below the July 9 high, near $4,140, which, together with the July 3 high, at the $4,200 area, are likely to test bulls' confidence. Further up, the next target is the mid-June highs, at the $4,360 area.
On the downside, immediate support is seen at the broken trendline break zone around $4,020 ahead of the year-to-date lows around $3,950. Further down, the late October 2025 low just below $3,900 emerges as the next target.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold (XAU/USD) delivered a masterclass in volatility in the first half of the year, rising more than 20% in the January-February period before entering a downtrend that saw the precious metal lose nearly 30% from March to the end of the second quarter. As the second half of the year begins, Gold’s next major move could spark a powerful comeback or push the metal toward its worst annual performance since 2013.
Why Gold lost its safe haven status Gold started the year on a bullish note and set a new record-high near $5,600 in late January.
Growing expectations for a dovish Federal Reserve (Fed) policy outlook, with Kevin Warsh becoming the front-runner to replace Chairman Jerome Powell, weighed on United States (US) Treasury bond yields and the US Dollar (USD), fuelling Gold’s rally.
Additionally, escalating tensions in the Middle East, with the US threatening military intervention in Iran following severe domestic crackdowns on protestors and failed diplomatic efforts regarding Iran’s ballistic programme, allowed Gold to find demand as a traditional safe-haven.
By the final trading day of January, Gold declined sharply but still gained about 13% for the month. The confirmation of Warsh’s nomination triggered a “buy the rumor, sell the fact” action, while investors also realized that Warsh was in favor of strict monetary discipline and that he was unlikely to become a “yes-man” for US President Donald Trump, who insisted on the Fed to cut interest rates.
Still, Gold preserved its bullish momentum in February as the latest decline drew renewed interest, especially from institutional buyers. “Global physically backed Gold ETFs registered another month of inflows in February, adding US$5.3 billion – the strongest two-month start to a year and the ninth consecutive monthly increase, as investors continued to build allocations amid elevated geopolitical risk and shifting macro conditions,” the World Gold Council (WGC) noted in its monthly report for February.
However, things changed drastically when Israel and the US carried out a joint military operation against Iran on February 28.
Gold quickly lost its “safe-haven” status and turned south, as surging crude Oil prices fed into inflation fears. After losing nearly 12% in March, Gold stabilized but still registered marginal losses in April and May. The announcement of a temporary two-week ceasefire between the US and Iran in early April, then the extension of this ceasefire indefinitely, helped Gold keep its footing.
Although the US and Iran signed a Memorandum of Understanding (MoU) to establish a 60-day ceasefire and reopen the Strait of Hormuz fully on June 17, Gold remained under heavy bearish pressure and lost nearly 12% in June. Strong inflation readings and upbeat labor market data from the US, combined with new Fed Chair Kevin Warsh’s clear message that they will prioritize taming inflation, attracted bets for the US central bank to raise rates and dragged XAU/USD to a fresh 2026-low below $4,000.
Gold daily chartThree scenarios for Gold and what to look at in the second half of 2026The first half of the year showed that Gold’s declaration of its geopolitical premium has left it entirely exposed to raw macroeconomic forces. Hence, navigating the second half of the year will require a close examination of inflation dynamics and how they could influence the policy outlook of major central banks, while assessing how institutional interest could support prices.
The bullish case for GoldFor Gold to rally in the remainder of the year, the market theme needs to go through a noticeable shift. June’s action showed that a sharp decline in Oil prices might not be enough to boost Gold. There has to be a convincing dovish shift in major central banks’ policy outlook, especially the Fed, to fuel a steady uptrend in the precious metal.
The first condition that needs to be met is that there has to be a permanent end to the conflict in the Middle East. Although many experts think that it will take some time for energy supply to be restored to pre-war levels, markets will be relieved knowing that a strong increase in Oil prices is unlikely.
Peace needs to be followed by consecutive months of favorable inflation readings from the US. Once Fed officials start voicing their confidence in inflation returning toward their target of 2%, markets could move away from pricing in a rate hike and even consider a rate cut in early 2027. In this scenario, Gold could benefit from falling US T-bond yields and the renewed USD weakness.
According to the CME FedWatch Tool, markets are currently pricing in about an 85% probability that the Fed will raise its policy rate by at least 25 basis points (bps) by end-2026.
Source: CME GroupOne other risk event that could help Gold rise is the upcoming mid-term election in the US. There is a strong possibility that there could be a split Congress, with Democrats regaining the control of the House. It is difficult to draw a clear connection between Gold’s performance and past US mid-term election results. However, this time around Gold could benefit from political uncertainty in the US, as it’s likely to make Treasury bonds and the USD less attractive.
The bearish case for GoldGold could continue to suffer losses if upside risks to inflation remain in place. A prolonged conflict in the Middle East, with energy prices rising again heading into fall and winter months would be a nightmare scenario for Gold.
In this case, the Fed is likely to reaffirm its hawkish stance and possibly opt for multiple rate hikes. A robust US economy and a healthy labor market would further support the case for a hawkish policy outlook and put additional weight on the bullion’s shoulders.
Even if there is a pullback in crude Oil prices, the inflation story might not be over, thanks to the price pressures fuelled by the Artificial Intelligence boom.
In a speech delivered in July, Fed Governor Lisa Cook explicitly detailed this exact phenomenon.
"Rising core goods prices underscore the fact that the recent acceleration in inflation is not only an energy price story,” Cook said and explained that the other shock is “increased capital expenditures tied to the buildout of AI infrastructure.”
“This spending has caused significant price increases for chips, other high-tech equipment, software, and utilities. Both of these new developments add weight to the inflation risk side of the seesaw, which is now tilting toward the ground. As a whole, I see a notable shift in the balance of risks relative to a year or so ago, with inflation risks now outweighing employment risks,” she added.
In this bearish scenario, it is difficult to say how much room Gold has on the downside. Regardless of the Fed’s policy outlook or global inflation dynamics, Gold could still remain as an attractive asset, especially at lower prices, for institutional buyers and central banks.
“The Gold market has benefited from various structural shifts over the past two decades, including growth in emerging markets, the advent of gold ETFs, an increase in tail risk events, and central bank demand,” the WGC noted in its mid-year outlook report.
“More recently, sovereign wealth funds, pension funds, and endowments, and other long-term asset owners have also been increasing their participation. Last year, a pilot programme in China enabled some of the top insurance companies to invest in Gold,” authors Juan Carlos Artigas, Taylor Burnette and Dr. Fergal O'Connor noted, adding that these types of contributions from “buy-and-hold investors” could provide support for the precious metal in the second half of 2026.
The neutral case for GoldThis final scenario is a mix of the bullish and bearish conditions for Gold. Inflation in the US could remain sticky but stable, while economic conditions show signs of cooling down, causing the Fed to opt for an extended pause in the policy. While this might not be necessarily a positive development for Gold, it could cap the USD’s upside potential and allow XAU/USD to keep its footing.
There might not be an official permanent truce in the Middle East but tensions could de-escalate with sides agreeing on short-term ceasefires and trying their hand on diplomacy rather than military aggression. This situation might limit Oil’s downside but it could also ease concerns over energy costs rising uncontrollably. As a result, investors could refrain from forecasting a steady decline in inflation, capping Gold’s headroom.
My takeWhile all three scenarios are plausible, I find it difficult to justify another significant decline in Gold prices in the near term because I think long-term buyers are likely to step in as soon as the price comes down noticeably, between 5% and 10%.
In 2013, Gold lost nearly 30% as central bank buying failed to support the price as it was concentrated among just a few heavy hitters, such as Russia and China. According to the WGC data, total net central bank purchases in 2013 was 368.6 tonnes, compared to 244 tonnes in the first quarter of 2026 alone.
In an interview with Reuters in March, Shaokai Fan, Global Head of Central Banks at the WGC, said that central banks from Guatemala, Indonesia and Malaysia have all bought Gold in recent months, “either following a long hiatus or for the first time ever.”
“A phenomenon we've been seeing in the last few months is new central banks, or central banks that have been inactive or absent from the gold market for a long time, entering the gold market," Fan said and added that he thinks that this might be a trend that will continue in 2026.
Since a bearish scenario is relatively less likely, Gold could either stay in a consolidation phase or stage a rebound in the second half of the year. Political uncertainty in the US, easing fears over inflation getting out of control and the Fed straying away from a hawkish stance could scare the bears away.
Gold technical outlook: Bearish bias holdsWhile fundamentals don’t point to further significant declines ahead, from a technical perspective, Gold remains bearish in the medium-term. The Relative Strength Index (RSI) indicator on the weekly chart sits near 40 after having touched its lowest level since late-2023 below this level, while Gold trades below 20-week and 50-week Simple Moving Averages (SMA), as well as the Fibonacci 38.2% retracement of the uptrend drawn from October-2023 to the record-high set in January.
On the downside, $3,710-$3,640 aligns as a key support area, where the Fibonacci 50% retracement and the 100-week SMA align. If this support fails, the next line of defense could be seen at $3,260 (Fibonacci 61.8% retracement) ahead of $3,000 (psychological level, round level).
In case Gold stabilizes above $4,170-$4,200 (Fibonacci 38.2% retracement, static level) in the near term, $4,330-$4,450 (50-week SMA, 20-week SMA) comes as the next resistance area. With a break above this hurdle, $4,710 (Fibonacci 23.6% retracement) could act as the next supply zone before Gold can target a new record-high above $5,600.
Gold weekly chartWhat analysts saySilver and Gold positioning seen under pressure as Fed hike risks buildAccording to TD Securities, the backdrop of rising energy costs is set to weigh on precious metals positioning in the near term. The bank notes that “with the energy complex likely driving aggregate prices higher in the coming months, the market is increasingly pricing a Fed hike towards the end of the year,” a shift that tightens the policy outlook and raises the carry cost of holding non-yielding assets.
In this environment, TD Securities highlights that “money managers have also reduced their long silver exposure, which will apply downward pressure on prices due to weakening industrial and investment demand.” The strategists add that “as such, both silver and gold length are likely to erode for now,” underscoring a cautious stance on speculative positioning across the precious metals space.
Gold outlook hinges on Fed shift as FOMC debate intensifiesAccording to Commerzbank, the near-term trajectory for Gold remains closely tied to how investors reassess the Federal Reserve’s policy stance rather than to geopolitical developments alone. The bank argues that “a correction, regardless of developments in the US-Iran conflict, is likely to occur only if the market's assessment of the Federal Reserve were to fundamentally change.”
Commerzbank notes that any such shift would likely stem from evolving views within the FOMC on the necessity of further tightening. “If this view gains traction within the FOMC, it could mean that interest rate hikes are not considered necessary to combat current inflation,” the bank writes. In that scenario, Gold could draw support on multiple fronts: “The price of gold would then likely benefit not only in the short term from the market pricing out interest rate hikes, but also from the fact that the market perceives increased inflation risks in the long term due to a significantly more dovish stance by the Federal Reserve.”
Reserve managers edge away from the Dollar as Gold demand climbsAnalysts at BNY Mellon observe that reserve managers are beginning to adjust their currency allocations, noting that “reserve managers are starting to trim their Dollar exposure, but only cautiously.” In their view, “gold is the clearest beneficiary, with geopolitical risk and diversification driving demand,” and they highlight that “82% of central banks now hold physical gold.” Overall, BNY Mellon judges that the shift away from the Dollar remains measured rather than abrupt, with “de-dollarization” looking “more gradual than decisive”: “reluctant alternatives” are emerging, but a true “good alternative” is still not here.
OCBC trims precious metals outlook as higher real yields and firm USD weighAnalysts at OCBC have turned more cautious on the precious metals complex, noting that “gold and silver forecasts have been revised lower to $4360 and $67, respectively for end-2026” They stress that the adjustment “reflects a more challenging near-term macro backdrop, rather than a full reassessment of the medium-term structural case for precious metals.”
OCBC highlights that “in particular, the near-term setup has deteriorated for both metals,” pointing to a confluence of headwinds: “real yields have repriced higher, the USD has strengthened, Fed expectations have shifted in a more hawkish direction while ETF demand has slowed.” In their view, a sustained recovery in bullion will hinge on a friendlier macro backdrop, with a “turnaround in gold and silver prices” likely to “require the macro environment to improve and that includes easing in real yields, a softer USD or a clearer unwind in hawkish Fed expectations.”
Absent such a shift, OCBC cautions that “rallies are likely to be faded and gold, silver may spend more time consolidating below previous highs,” underscoring that the bank sees limited scope for a durable breakout until those macro pressures abate.
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.
GBP/USD remains steady after four days of losses, trading around 1.3370 during the European hours on Wednesday. The pair is holding a mildly bearish near‑term bias as spot remains capped beneath the 50‑day and nine-day Exponential Moving Averages (EMAs).
The 14-day Relative Strength Index (RSI) at 49.56 sits near the neutral line, hinting at consolidative momentum rather than a decisive directional push.
The technical analysis of the daily chart suggests a bearish breakdown and signals a potential trend reversal or consolidation phase as the GBP/USD pair has broken below the lower boundary of an ascending channel. Further support lies at the eight-month low of 1.3140, recorded on June 24.
On the upside, the immediate barrier lies at the 50-day EMA of 1.3383, followed by the nine-day EMA at 1.3406. A rebound above the moving averages would revive the bullish bias and support the GBP/USD pair to explore the region around the upper boundary of the ascending channel around 1.3640, followed by the five-month high of 1.3658, reached on May 1. A break above this level would expose 1.3869, the highest level since September 2021, reached on January 27.
GBP/USD: Daily Chart(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.11%-0.04%-0.10%-0.11%0.02%0.10%-0.12%EUR0.11%0.08%0.04%-0.00%0.13%0.22%-0.01%GBP0.04%-0.08%-0.04%-0.08%0.04%0.14%-0.09%JPY0.10%-0.04%0.04%-0.01%0.13%0.20%-0.02%CAD0.11%0.00%0.08%0.01%0.14%0.27%-0.01%AUD-0.02%-0.13%-0.04%-0.13%-0.14%0.10%-0.14%NZD-0.10%-0.22%-0.14%-0.20%-0.27%-0.10%-0.25%CHF0.12%0.00%0.09%0.02%0.00%0.14%0.25% 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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Oil rises towards a 6-week high as Middle East tensions escalate Oil prices are extending gains towards a six-week high amid fears of further supply disruption after the U.S. and Iran exchanged fire for an 11th consecutive night. Meanwhile, oil tankers made U-turns in the Red Sea following warnings of disruption from Iran-backed Houthi forces.
The continued exchange of strikes between the U.S. and Iran has heightened concerns over further disruption to energy supplies. Despite talk of mediation earlier in the week, hostilities appear to be escalating rather than easing.
Adding to those concerns, the Iran-backed Houthis have opened a new front by threatening to target vessels carrying Saudi crude through the Bab el-Mandeb Strait. They have also announced a naval blockade of Saudi Arabia.
The Bab el-Mandeb has become an increasingly important route for Saudi crude exports as traffic through the Strait of Hormuz has declined sharply since the U.S.-Iran ceasefire collapsed. Three Saudi oil tankers reportedly made U-turns in the Red Sea yesterday.
Should the Bab el-Mandeb Strait also become inaccessible, tankers would be forced to reroute via the Suez Canal, adding both time and cost to shipments to Asia.
Oil forecast – technical analysis
Oil broke above the symmetrical triangle pattern before running into resistance around $87. The price continues to trade above the 50-day and 200-day EMAs, as well as the rising trendline support. Combined with the RSI holding above 50, this keeps the near-term outlook constructive.
Buyers will look to break above $88, the 50% Fibonacci retracement of the $55–$120 move. A rise above here brings $95, the 38.2% Fibonacci retracement, into focus, ahead of the $100 psychological level.
Initial support can be seen at $84.50, ahead of the rising trendline, the 50-day EMA at $81.85, and $80, the 61.8% Fibonacci retracement.
Below there, support is seen around $78, where the 200-day EMA sits. A break below this level could see sellers gain traction towards $70.67, the July low.
USD/JPY on intervention watch above 163 USD/JPY has climbed to a fresh 40-year high above 163 as rising oil prices and higher U.S. Treasury yields continue to support the dollar, leaving investors increasingly nervous about the risk of Japanese intervention.
The dollar is finding support from safe-haven demand as the conflict in the Middle East continues.
At the same time, rising oil prices are adding to inflation concerns, helping push the benchmark 10-year Treasury yield to its highest level since May earlier this week.
However, the Japanese yen is failing to benefit from safe-haven demand given Japan's reliance on imported energy, making it particularly vulnerable when oil prices rise.
With the yen at its weakest level since 1986, markets remain on intervention watch after Japanese authorities stepped in during both April and May once USD/JPY moved above 160.
Previous intervention only slowed the move temporarily, with the underlying uptrend quickly reasserting itself.
With USD/JPY now trading above 163, the risk of another intervention is rising. However, while intervention can slow momentum, it rarely changes the broader trend unless it is backed by a more hawkish Bank of Japan and a less hawkish Federal Reserve.
For now, the wide interest rate differential continues to favour the dollar, making yen rallies attractive selling opportunities.
While the U.S. economic calendar is relatively quiet this week, attention will be on Friday's PMI data. In Japan, focus will turn to inflation figures released early Friday morning.
USD/JPY forecast – technical analysis
USD/JPY continues to extend its bullish run, trading above its rising trendline and both the 50-day and 200-day EMAs after climbing to 163.25.
However, momentum is beginning to slow, and the bearish RSI divergence suggests buyers should be a little more cautious.
Even so, buyers will look to extend gains towards 164.00, the next key psychological level.
On the downside, initial support can be be seen around 162.50. A break below here brings the 50-day SMA around 161.00 into focus before attention turns to the 160.00 support zone.
Gold traded around 4,080 USD per ounce on Wednesday, having risen nearly 2% the previous day. Investors continue to assess developments in the Middle East and the impact of elevated oil prices on inflation and interest rates.
Donald Trump has played down the prospects of an imminent resumption of negotiations with Iran and warned of further strikes, which continues to support oil prices. Additional supply risks are emerging from disruptions to shipping across the Red Sea due to actions by the Yemeni Houthis, as well as a series of attacks on the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast.
ADP data showed a further slowdown in the US labour market. In the four weeks to 4 July, the private sector created an average of 16,500 jobs per week, down from 19,250 in the previous four-week period. The pace of hiring has now declined for four consecutive periods.
Markets have little doubt that the Federal Reserve will keep rates unchanged at next week’s meeting. At the same time, the probability of a rate hike in September now exceeds 55%, which limits gold’s upside potential.
Technical Analysis
On the H4 XAU/USD chart, the market is trading within a consolidation range around the 4,044 USD level. After an upside breakout, the market moved higher to 4,140 USD. A decline to 4,044 USD followed, with a subsequent rebound to 4,088 USD. A further move lower towards 3,940 USD is expected. The MACD indicator signals the early stages of bearish momentum, with its signal line above the centre line and beginning to turn downwards.
On the H1 chart, the market has broken below the 4,122 USD level and is moving lower towards 4,044 USD, followed by a potential rise to 4,088 USD. A wide consolidation range is forming around 4,088 USD. The Stochastic oscillator confirms this scenario, with its signal line below 80 and pointing downwards towards 20, indicating increasing short-term downside pressure.
Conclusion Gold has rallied in response to rising external risks, including escalating tensions in the Middle East, fresh warnings from President Trump on Iran, and supply disruptions in the Red Sea and Black Sea. These factors have pushed oil prices higher, reinforcing concerns about inflation. However, the metal’s gains have been tempered by a cooling US labour market, as ADP data showed a fourth consecutive slowdown in hiring. Markets expect the Fed to hold rates next week, although the probability of a September hike exceeds 55%, limiting gold’s upside potential. Technically, gold may see a pullback towards 4,044 USD before any further upside, with the broader trend depending on geopolitical developments and US monetary policy expectations.
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The kiwi has strengthened meaningfully against most peers this month. However, against the US dollar specifically, NZD/USD remains well below its 2026 highs, trading in the mid-0.58 area versus January’s peak near 0.6075.
New Zealand’s Q2 inflation data, released this week, blew past expectations: annual CPI accelerated to 4.1%, above both forecasts and the RBNZ’s own 3.9% projection, reinforcing the case for further tightening after the central bank’s surprise hike to 2.50% earlier in July—its first in over three years.
The dollar side of the equation remains the real wildcard. June’s payrolls report badly missed expectations, coming in at just 57,000, with prior months revised sharply lower, undercutting the Fed’s near-term tightening case despite still-sticky core inflation near 2.9%. Markets currently assign roughly even odds to a September hike, leaving NZD/USD’s next move hostage to next week’s Fed decision and any further escalation in Middle East tensions.
NZD/USD Technical Analysis
As the 4-hour chart shows, NZD/USD has arrived at a genuinely pivotal zone around 0.5850, a level that has repeatedly flipped between support and resistance throughout the year. Currently acting as resistance, this area has become the focal point of a tug-of-war that has now played out for several sessions.
Bullish Scenario After bouncing from the medium-term support at 0.5600–0.5650, price staged a decisive recovery, breaking above the 200-period EMA and successfully retesting it as new support, all while forming a clear pattern of higher highs and higher lows. This strength has been reinforced by supportive central bank rhetoric and macro data favoring the kiwi. A confirmed break above 0.5850, coinciding with the 0.618 Fibonacci retracement of the late-June decline, would open the path toward the next resistance and psychological level at 0.6000.
Bearish Scenario A rejection at this critical zone, however, would hand momentum back to sellers, sending price first toward a retest of the 200-period EMA near 0.5781. A break below that level would expose the well-defended 0.5600 support once again.
With the Fed decision looming and price sitting at such a decisive technical juncture, NZD/USD looks set for a significant move next week. Can the kiwi withstand the coming dollar volatility?
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Commodity-linked currencies remain under pressure as geopolitical tensions in the Middle East continue to escalate. The United States has maintained strikes on targets in Iran, while the Tehran-backed Houthis have intensified threats to shipping in the Red Sea and near key oil transit routes. Heightened geopolitical uncertainty has increased demand for traditional defensive assets, supporting the US dollar while weighing on risk-sensitive currencies such as the Australian dollar.
In the coming trading sessions, market participants will focus on Australia’s labour market report. Employment growth is expected to slow sharply, while the unemployment rate is forecast to remain unchanged at 4.4%. Weaker-than-expected figures could add pressure to AUD/USD by reinforcing expectations that the Reserve Bank of Australia may continue easing monetary policy.
For USD/CAD, attention will also turn to the weekly US crude oil inventory data. Although geopolitical developments continue to support oil prices, the outlook for commodity-linked currencies will depend not only on the direction of the energy market but also on incoming macroeconomic data and further developments in the Middle East.
AUD/USD AUD/USD has begun to lose upside momentum after testing the key resistance zone between 0.7000 and 0.7030. On the daily chart, a doji candlestick has formed, suggesting the pair could resume its decline towards the 0.6920–0.6870 area. However, a decisive break and close above 0.7030 could open the way for a further advance towards 0.7080–0.7100.
Key events for AUD/USD:
Tomorrow at 04:30 (GMT+3): Australia Employment Change Tomorrow at 04:30 (GMT+3): Australia Labour Force Participation Rate Tomorrow at 15:30 (GMT+3): US Initial Jobless Claims
USD/CAD USD/CAD has formed a bullish engulfing candlestick pattern after rebounding sharply from the significant support level at 1.4000. The technical outlook suggests the pair could extend its recovery towards the 1.4170–1.4200 region if the pattern plays out. Conversely, a break below 1.4000 could expose the next downside target around 1.3900–1.3940.
Key events for USD/CAD:
Today at 14:00 (GMT+3): US MBA Mortgage Applications Index Today at 17:30 (GMT+3): US Crude Oil Inventories Tomorrow at 15:30 (GMT+3): Canada Core Retail Sales
Overall, geopolitical tensions continue to underpin the US dollar while limiting the recovery of commodity-linked currencies. Over the coming days, the key drivers for AUD/USD and USD/CAD will be Australia’s labour market data, movements in oil prices, and further developments in the Middle East. If geopolitical risks remain elevated, the US dollar may continue to outperform. Conversely, easing tensions or weaker-than-expected US economic data could support a recovery in commodity-linked currencies.
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FXOpen is a global Forex and CFD Broker, founded in 2005 by a group of traders. With over 16 years of experience, the company has gained an excellent reputation a major brokerage that continues to expand rapidly. The broker offers a choice of platforms, including the popular MT4 and MT5 platforms, with a wide range of trading instruments with spreads from 0.0 pips: 600+ FX, index, share, commodity and cryptocurrency CFDs. FXOpen also provides its own PAMM technology, allowing clients to benefit from the strategies of experienced traders with a proven track record of successful trading and guarantees automatic distribution of profit and loss between the strategy provider and the strategy followers. CFDs are complex instruments and come with a high risk of losing your money. PAMM is only available in certain jurisdictions. Cryptocurrency CFDs are not available to Retail clients at FXOpen UK.
Silver price (XAG/USD) gives back some of its early gains, but is still 0.8% higher at around $59.25 during the European trading session on Wednesday. The white metal struggles to extend the rally beyond the psychological level of $60.00 due to a fresh surge in oil prices amid escalating Middle East energy supply risks.
In European trade, the WTI Oil price is up more than 2% at around $86, the highest level seen in over five weeks.
Higher oil prices boost fears of hot inflation expectations, a scenario that forces global central banks to tighten monetary conditions. Theoretically, hawkish monetary policy expectations bode poorly for non-yielding assets, such as Silver.
Fears of a further squeeze in the energy supply from the Middle East are prompted by the closure of Bab el-Mandeb Strait, the southern gateway of the Red Sea, from which 7% of global energy is transported.
Yemen's Iran-aligned Houthis announced a 'maritime embargo' on Saudi Arabia in retaliation for a Saudi blockade of ports and airports in Houthi-controlled north-western Yemen, BBC News reported.
Going forward, the next trigger for the Silver price will be the European Central Bank’s (ECB) monetary policy announcement on Thursday, in which the central bank is expected to leave policy rates steady. Investors will pay close attention to commentary from ECB President Christine Lagarde regarding the inflation outlook.
Silver technical analysis
XAG/USD trades higher at around $59.34 at press time. The white metal has recovered to near the 20-day exponential moving average (EMA) at $59.68, improving its near-term bias.
The EMA slope is still declining, suggesting rallies are likely to face selling interest near that barrier, while the Relative Strength Index (RSI) at 45.49 stays below the neutral 50 line, hinting at subdued upside momentum rather than a decisive bullish reversal.
On the topside, initial resistance is clearly defined by the 20-day EMA at $59.68, and a daily close above this level would be needed to extend the recovery towards the July 6 high at $63.28. A decisive break above the latter would trigger a bullish reversal, confirming the checklist of the Double Bottom formation. Looking down, the July low at $54.77 will be the key support level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Middle East tensions keep Brent elevated as Rabobank warns energy markets cannot take the summer offAnalysts at Rabobank underline that emerging signs of a “threatened blockade of Saudi ports” are already feeding through to energy pricing, cautioning that this development “will not allow energy markets to ‘take the summer off’ rather than taking off.” The bank notes that “we are at $91.5 on Brent at time of writing with crack spreads still round $70,” underscoring the degree to which geopolitical risk is being reflected in current market levels.
USD/CAD held near 1.4100 after extending its recovery, with traders watching the key 1.4115 resistance level. Safe-haven demand for the US dollar continues to outweigh support for the Canadian dollar from higher crude oil prices. A break above 1.4115 could strengthen bullish momentum, while oil prices and US economic data remain the next major catalysts. The USD/CAD exchange rate traded around 1.4101 on Tuesday after recovering steadily over the past several sessions, as renewed demand for the US dollar continued to offset the Canadian dollar’s traditional support from rising crude oil prices.
The pair has advanced despite Brent crude remaining above $90 per barrel, highlighting how geopolitical uncertainty and expectations for higher US interest rates have become the dominant drivers of currency markets.
Investors are now watching whether USD/CAD can break above 1.4115, a level that could determine whether the pair resumes its broader uptrend.
Why Is USD/CAD Rising Today? The US dollar has regained strength as investors continue to favour safe-haven assets amid escalating tensions between the United States and Iran.
The conflict has pushed oil prices sharply higher, raising concerns that inflation could remain elevated and encouraging expectations that the Federal Reserve may keep interest rates restrictive for longer.
Those expectations have supported US Treasury yields and increased demand for the dollar across the forex market.
Ordinarily, rising oil prices benefit the Canadian dollar because Canada is one of the world’s largest crude exporters. However, the current geopolitical environment has strengthened the US dollar by an even greater margin, allowing USD/CAD to continue climbing despite favourable conditions for the loonie.
How Do Higher Oil Prices Affect USD/CAD? Crude oil remains one of the most important drivers of the Canadian dollar.
When oil prices rise, Canada’s export revenues typically increase, improving the country’s trade balance and supporting the value of the Canadian dollar.
This week, however, that relationship has weakened.
Brent crude has remained above $90 per barrel after threats to shipping through the Strait of Hormuz raised concerns over global energy supplies. Instead of boosting the Canadian dollar, the oil rally has primarily fuelled inflation concerns, strengthening demand for the US dollar and limiting gains for commodity-linked currencies.
As long as geopolitical risks continue driving oil prices higher, the Canadian dollar may struggle to fully benefit from stronger energy markets.
Will USD/CAD Break Above 1.4115? The 1.4115 level has become the key technical hurdle for USD/CAD. ActionForex notes that a decisive move above this resistance would confirm that the recent pullback from 1.4247 has likely ended and increase the probability of another test of that July high.
Conversely, failure to break above 1.4115 could trigger short-term profit-taking after the pair’s recent rally. For now, the broader outlook remains constructive while the pair continues trading comfortably above the 1.3954 support area.
USD/CAD Outlook The short-term USD/CAD outlook remains tilted to the upside while the pair trades just below the key 1.4115 resistance level.
Although elevated oil prices would normally strengthen the Canadian dollar, safe-haven demand for the US dollar and expectations that the Federal Reserve could keep interest rates higher for longer continue to dominate market sentiment.
Whether USD/CAD extends its recovery will likely depend on upcoming US economic data, developments in the Middle East and the direction of crude oil prices. A convincing move above 1.4115 would strengthen the case for another attempt at 1.4247, while renewed strength in the Canadian dollar could limit further gains if oil prices continue climbing.
Why is USD/CAD rising today?
USD/CAD is rising as investors buy the US dollar amid geopolitical uncertainty and expectations that the Federal Reserve may keep interest rates higher for longer. Safe-haven demand has outweighed support for the Canadian dollar from stronger oil prices.
How do oil prices affect USD/CAD?
Higher oil prices usually strengthen the Canadian dollar because Canada is a major oil exporter. A stronger Canadian dollar typically pushes USD/CAD lower. However, during periods of heightened geopolitical risk, the US dollar can outperform despite rising crude prices.
Will USD/CAD break above 1.4115?
The 1.4115 level is the next key resistance for USD/CAD. A sustained break above this level could signal a continuation of the recent recovery and open the door for a retest of the 1.4247 high.
