Crédit Agricole now expects RBI hikes from Q4 as expensive oil and weak monsoons threaten inflation, keeping USD/INR near its 96 forecast. The US Dollar to Indian Rupee exchange rate closed Friday near 95.59, leaving Crédit Agricole's second-half forecast of 96 just 0.4% above the market.
USD/INR gained about 1.2% over the week as the Rupee surrendered its early-September recovery.
The bigger change is in Indian interest rates: the bank has abandoned its forecast of no increases through 2026-27.
“We expect RBI to raise its repurchase rate from 5.25% to 5.75% by Q127, with the first hike occurring in Q426.”
Higher oil prices make that shift harder to avoid, according to senior FX strategist David Forrester.
Crude above $100 exceeds the RBI's assumed $80-85 range, while weak monsoon rainfall threatens food supplies and stronger growth increases the risk that higher costs spread through the economy.
The pressure extends the oil-driven reversal in the Rupee we covered earlier this week.
India's importers need Dollars to pay for dearer crude, while a weaker Rupee makes those purchases more expensive in local currency.
Image: USD/INR one-month chart Higher rates may only contain Rupee losses Friday's US inflation release added another complication after Crédit Agricole's note appeared.
Core CPI rose 0.3% in August after July's 0.2%, strengthening the argument for a Fed hike, although annual core inflation eased to 2.4%.
If American rates rise too, an RBI increase may deliver less support through relative returns.
Crédit Agricole nevertheless sees policy support containing the damage:
“The 50bp rate increase combined with ongoing capital inflows from RBI’s ECB and OFCB programmes, plus record-level reserves to help the central bank lean against INR weakness, are expected to offset the drag on the INR from higher oil prices and weaker monsoons. We retain our H226 forecast for USD/INR at 96.00.”
Its longer-run valuation work puts USD/INR between 92.50 and 101.50, centred on 97, depending on how much incoming capital the RBI uses to unwind its forward positions.
That is a valuation range, not a forecast that 101.50 will trade.
Image: US Dollar vs Indian Rupee 2026 chart The one-month data already record a high just above 96, making this a return towards a previously traded level.
Our reading is that the forecast’s harder test lies beyond another touch of 96: whether RBI action can contain further depreciation if expensive oil persists.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
UBS expects further Yuan gains through mid-2027, with strong exports supporting the currency despite low inflation and an unfavourable rate gap. The US Dollar to Chinese Yuan (USD/CNY) exchange rate closed Friday near 6.7083, extending a year in which the pair has fallen more than 4%.
UBS expects that decline to continue, forecasting 6.60 for December 2026 and March 2027, followed by 6.50 in June and September.
Reaching 6.50 would mean another 3.1% fall in USD/CNY, equivalent to approximately 3.2% appreciation in the Yuan's Dollar value.
The forecast also maintains the path discussed in our August analysis of UBS's Yuan outlook, when export conversions and the PBoC's tolerance for gradual appreciation were central to the argument.
Exports support the Yuan despite subdued inflation Fresh Chinese trade figures strengthen the external-demand case.
Exports rose 25% year-on-year in Dollar terms during August, supported by overseas demand for high-tech and AI-related products.
Those receipts provide a potential source of Yuan buying when exporters convert foreign earnings, although the timing and scale of conversions matter.
Domestic prices tell a quieter story.
The National Bureau of Statistics recorded annual consumer inflation of just 0.8% in August, with food prices still 1.4% below a year earlier.
UBS forecasts Chinese growth of 4.5% this year and 4.6% in 2027, alongside average inflation of only 0.6% in both years.
Image: USD to CNY exchange rate 2026 chart The US$/CNY forecast needs more than interest-rate support UBS's Yuan call sits alongside expectations for higher US policy rates by December and a small reduction in China's policy rate by June 2027.
That would leave interest-rate differentials working against the Yuan over much of the forecast horizon.
Our reading is that export-related flows, broader Dollar weakness and continued policy tolerance must carry more of the appreciation argument.
The risk is that Beijing becomes less comfortable with currency strength if it starts squeezing exporters while domestic demand remains subdued.
A move towards 6.60 would keep UBS's year-end forecast on course, but reaching 6.50 requires those supports to endure into 2027.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Gold fell 1.8% last week and is now down for a third consecutive week, suggesting that momentum continues to fade following the powerful surge we saw in August. On Friday, the precious metal initially fell in reaction to the US CPI data but then rallied sharply from its lows immediately afterwards in a classic “sell the news” reaction, before fading into the close. Ultimately, gold finished Friday’s session 0.7% higher. We maintain a slightly bearish gold outlook amid a challenging macro backdrop, ahead of the FOMC rate decision in the week ahead.
Fed meeting could impact gold outlook
Heading into the week ahead, the technical momentum suggests we could see at least some further moderate losses ahead of the FOMC meeting on Wednesday. It is going to be an important policy decision, particularly given the stronger inflation data and recent warnings from Kevin Warsh about the risk of inflation remaining above target for too long.
The key question is whether a rate hike would be a one-and-done move, or whether we could see further increases later this year.
Oil and Treasury yields add pressure
Oil prices have also surged in recent days, although they eased slightly on Friday. Nevertheless, the broader trend remains firmly higher, adding another source of inflationary pressure to the market. If inflation continues to rise, there is little reason for the Fed to rule out further tightening.
Against that backdrop, US Treasury yields have continued to push higher. The 10-year yield came close to the 5% level last week, a psychologically important threshold where we could see some profit-taking. Ultimately, though, the bond market remains under pressure and yields continue to rise.
That is not an ideal macro environment for gold. With real yields and expectations for interest rates moving higher, the precious metal is likely to remain vulnerable, particularly if the US dollar continues to find support.
Key gold support levels
From a technical perspective, the bias therefore remains to the downside. Key resistance around $4,400 held once again on Friday. This level has been tested on a number of occasions in recent days and, so far, continues to cap the upside.
Source: TradingView.com
Gold could return to the $4,100 area in the not-too-distant future, potentially around Wednesday’s Fed decision. A break below that level would expose $4,000, while below there, the June low around $3,942 would come into focus.
There is, however, an alternative scenario. If the US dollar debasement trade returns and XAUUSD manage to break decisively above $4,400, the next target would be around $4,500. The 200-day moving average currently comes in at around $4,538, followed by resistance near $4,600.
Gold outlook: Bearish bias remains
For now, though, both the macro and technical backdrop remain bearish for gold. Unless we see a renewed shift towards the dollar debasement trade, I would expect further downside pressure on the precious metal in the near term.
Pound Sterling’s GDP-driven gains face a policy test as ING expects no Bank of England hike, while the ECB’s inflation outlook points towards further tightening. The Pound to Euro (GBP/EUR) exchange rate ended the trading week near 1.1663, up 0.24% on the day, however analysts at ING still expect a retreat towards 1.15 in Q4 2026.
Its end-of-year Euro-Pound target of 0.87 converts to approximately 1.1494 GBP/EUR, around 1.4% below Friday’s close.
July’s growth surprise has therefore lifted Pound Sterling without persuading ING to abandon its cautious forecast.
The ONS recorded 0.4% monthly GDP growth after June’s 0.3% increase, with services, production and construction all expanding.
Yet consumer-facing services contracted 0.4%, showing that the improvement was uneven.
As our coverage of Friday’s GDP reaction highlighted, analysts disagree over how much pressure stronger activity puts on the Bank of England.
ING’s Francesco Pesole acknowledges the immediate currency response:
“GBP is a tad stronger on the back of that, but these monthly growth prints have not had much impact on BoE decisions.”
Image: Pound-to-euro exchange rate 24hrs to close The interest-rate gap behind ING’s forecast On Friday morning, ING put market expectations at 48 basis points of tightening by year-end and 110 basis points by July 2027.
The year-end figure amounts to almost two quarter-point increases.
“Our baseline is still that the Bank of England won’t hike at all, leaving sterling in front of a potential cliff-edge dovish repricing.”
At Exchange Rates UK Research we believe that gap explains why a positive growth release can coexist with a weaker Pound Sterling forecast: if investors remove anticipated hikes, GBP loses some of its expected yield support.
The Euro side also matters. Thursday’s ECB decision announced a quarter-point increase in the deposit rate to 2.50%, effective from 16 September.
Its projections put inflation at 2.5% in 2027 and 2.1% in 2028, above the 2% target in both years.
ING sees those projections as an argument for additional increases:
“Taken at face value, those forecasts already pointed to further tightening.”
The ECB itself has committed to assessing policy meeting by meeting, so further hikes remain conditional.
ING nevertheless retains its fourth-quarter currency calls:
“We continue to see upside room for EUR/GBP and downside for GBP/USD, with 4Q targets of 0.87 and 1.33.”
The main risk to that outlook is stronger UK inflation persuading the BoE to tighten after all, allowing Sterling to retain more of its interest-rate support.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Stronger core inflation favours MUFG’s bearish Euro scenario, with the bank now expecting a September Fed hike and EUR/USD closing below 1.16. The Euro to Dollar (EUR/USD) exchange rate closed Friday near 1.1599, down 0.10% on the day, as stronger US core inflation reinforced expectations of a Federal Reserve rate increase.
MUFG’s downside scenario points towards 1.14, approximately 1.7% below that close.
Before Friday’s inflation release, the bank outlined two possible paths: a Fed hold alongside further ECB tightening could lift EUR/USD towards 1.20, while a September Fed hike could push it towards the bottom of its 1.14-1.18 range.
“The performance of EUR/USD may increasingly hinge on the Fed’s policy response,” MUFG’s Lee Hardman said.
Core inflation strengthens the case for a hike The August CPI release showed core prices rising 0.3% on the month, accelerating from July’s 0.2% increase and exceeding the 0.2% consensus.
Headline prices rose 0.4%, with gasoline accounting for more than a third of the increase.
Annual core inflation nevertheless eased to 2.4% from 2.5%, making this a setback in monthly momentum rather than an acceleration across every measure.
Market estimates put the probability of a September hike around 85-90% after the release.
MUFG subsequently changed its own Fed forecast:
“As a result, we now expect the Fed to hike rates by 25bps in September.”
Image: EUR/USD 48-hr chart ECB tightening still offers the Euro support Thursday’s ECB decision announced a quarter-point increase in the deposit rate to 2.50%, effective from 16 September, while projecting inflation above target through 2028.
That supported the argument for further European tightening explored in our earlier EUR/USD outlook.
We believe Friday’s CPI weakens the case for the Euro to benefit from an ECB tightening cycle while the Fed stands aside.
However, with a US hike already heavily anticipated, its delivery alone may offer limited additional Dollar support.
MUFG’s rates strategists acknowledge that markets have already priced in much of the expected tightening and may have gone too far.
A move towards 1.14 therefore remains conditional on how the Fed’s decision and guidance change expectations for subsequent meetings.
Euro Prices: This Week USDEURGBPJPYCADAUDNZDCHFUSD +0.13%-0.08%-1.75%+0.24%+0.46%+1.16%+0.79%EUR-0.13% -0.21%-1.87%+0.12%+0.33%+1.03%+0.67%GBP+0.08%+0.21% -1.67%+0.33%+0.54%+1.24%+0.88%JPY+1.78%+1.91%+1.70% +2.03%+2.24%+2.96%+2.58%CAD-0.24%-0.12%-0.33%-1.99% +0.21%+0.91%+0.55%AUD-0.46%-0.33%-0.54%-2.20%-0.21% +0.70%+0.33%NZD-1.15%-1.02%-1.23%-2.87%-0.90%-0.69% -0.36%CHF-0.79%-0.66%-0.87%-2.52%-0.54%-0.33%+0.36% The FX heat map compares how Euro (EUR) has performed against a basket of major currencies over the past week. The largest move was against the Japanese Yen, where Euro recorded its sharpest decline. Data comparing prices today (12/09/2026 12:07 UTC) and daily close on 05/09/2026.
To read the table, choose the base currency from the left-hand column and then move across to the quote currency along the top row. For example, the GBP row and USD column shows the weekly percentage move in GBP/USD.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Pound Sterling’s GDP-driven gains face a policy test as ING expects no Bank of England hike, while the ECB’s inflation outlook points towards further tightening. The Pound to Euro (GBP/EUR) exchange rate ended the trading week near 1.1663, up 0.24% on the day, however analysts at ING still expect a retreat towards 1.15 in Q4 2026.
Its end-of-year Euro-Pound target of 0.87 converts to approximately 1.1494 GBP/EUR, around 1.4% below Friday’s close.
July’s growth surprise has therefore lifted Pound Sterling without persuading ING to abandon its cautious forecast.
The ONS recorded 0.4% monthly GDP growth after June’s 0.3% increase, with services, production and construction all expanding.
Yet consumer-facing services contracted 0.4%, showing that the improvement was uneven.
As our coverage of Friday’s GDP reaction highlighted, analysts disagree over how much pressure stronger activity puts on the Bank of England.
ING’s Francesco Pesole acknowledges the immediate currency response:
“GBP is a tad stronger on the back of that, but these monthly growth prints have not had much impact on BoE decisions.”
Image: Pound-to-euro exchange rate 24hrs to close The interest-rate gap behind ING’s forecast On Friday morning, ING put market expectations at 48 basis points of tightening by year-end and 110 basis points by July 2027.
The year-end figure amounts to almost two quarter-point increases.
“Our baseline is still that the Bank of England won’t hike at all, leaving sterling in front of a potential cliff-edge dovish repricing.”
At Exchange Rates UK Research we believe that gap explains why a positive growth release can coexist with a weaker Pound Sterling forecast: if investors remove anticipated hikes, GBP loses some of its expected yield support.
The Euro side also matters. Thursday’s ECB decision announced a quarter-point increase in the deposit rate to 2.50%, effective from 16 September.
Its projections put inflation at 2.5% in 2027 and 2.1% in 2028, above the 2% target in both years.
ING sees those projections as an argument for additional increases:
“Taken at face value, those forecasts already pointed to further tightening.”
The ECB itself has committed to assessing policy meeting by meeting, so further hikes remain conditional.
ING nevertheless retains its fourth-quarter currency calls:
“We continue to see upside room for EUR/GBP and downside for GBP/USD, with 4Q targets of 0.87 and 1.33.”
The main risk to that outlook is stronger UK inflation persuading the BoE to tighten after all, allowing Sterling to retain more of its interest-rate support.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Fed hike largely priced, BOJ increase fully priced
Updated Fed dots will shape the policy outlook
BOJ guidance must validate the hawkish OIS repricing
Energy remains tightly linked with longer-dated Treasury yields
Intervention risk continues to distort USD/JPY’s rates relationship
Central banks dominate, energy may decide
All the headlines this week are going to be centred on the Fed and the BOJ. But unless there’s a shock rates call from either, the decisions themselves don’t screen as significant volatility generators.
Instead, it will come down to signalling. For the Fed, that will come via the updated dot plot and economic projections, rather than Kevin Warsh unless he decides to start providing guidance. For the BOJ, it will be the tone of the statement and Governor Ueda’s press conference, given there will be no updated economic projections at this meeting.
The key swing factor that could override all of that central bank discussion is energy. With a tight link between crude oil movements and US yields, and US yields still having a fairly strong relationship with the US dollar, how energy prices evolve could be equally important, if not more so, in determining how USD/JPY performs in the week ahead.
Warsh faces a credibility test
Of all the known event risk this week, nothing comes close to the Fed interest rate decision.
Kevin Warsh has made it clear in his time as chair that, along with not wanting to give markets the answers to the exam before it occurs, he’s also been a strong advocate for allowing markets to evaluate where the appropriate policy rate should sit. After the string of data we’ve seen recently, including Friday’s CPI report, market pricing for a 25 basis point hike to the funds rate has lifted to around 90%.
Source: TradingView
That creates a scenario where, if the Fed doesn’t hike and effectively ignores what markets are signalling about where the appropriate rate should sit, it risks doing serious damage to its credibility and triggering a disorderly reaction, potentially at the back end of the Treasury curve and in the dollar.
The first area of focus will therefore be whether Warsh can convince the FOMC to deliver the hike, or whether we see some splintering with key members voting against it. Any sign of dissent, particularly from influential members, risks sparking a dovish market reaction, whereas an FOMC that is fully on board with the hike would likely do the opposite.
Source: Federal Reserve
Beyond that, attention will fall on the updated Summary of Economic Projections, especially the dot plot. In June, nine of the 18 FOMC members who submitted forecasts signalled they saw the need for at least one hike this year, with six of those indicating more than one. That was substantially different to what had been conveyed three months earlier, when the committee was still projecting a gradual easing cycle with the funds rate eventually troughing around 3%.
Warsh’s press conference will also matter, particularly if we see dissents or a shock rate call. Assuming the Fed hikes, a large portion of the questioning will likely centre on the updated SEP while trying to tease out information on the policy outlook.
So the main questions will be how many hikes are signalled in the updated projections, whether we see any dissents, and what the Fed says about the inflation outlook.
Source: TradingView
Outside of Wednesday’s FOMC decision, the remainder of the US calendar is largely devoid of significant market-moving events. There will be some interest in the retail sales report following July’s surprise decline, although barring another major shock, it is likely to be swallowed up by the Fed later in the session.
BOJ must validate hawkish repricing
Turning to the BOJ on Friday, unless it delivers a stunning 50 basis point hike, all the mail is that rates are going higher. A 25 basis point increase is fully priced.
As such, the focus will be on whether the BOJ can sustain the hawkish shift in expectations that's taken place over the past month. OIS pricing has moved materially higher across the curve, with almost a second hike by year-end now priced and more than three hikes expected by the middle of next year.
Source: Bloomberg
There are no updated economic projections at this meeting, leaving the statement and Ueda’s press conference as the main vehicles for signalling. That means both will need to ooze hawkishness to validate what's priced in the curve. If they don’t, it may deter some newly inked yen bulls from following through with their conviction.
The vote split on the rates call will also be in focus. Multiple dissenters arguing for a 50 basis point move would come across as hawkish, while multiple members preferring to leave rates unchanged would be deemed dovish, even if the BOJ still delivers the expected hike.
Source: TradingView
Outside of the BOJ decision, the Japanese calendar is largely inconsequential for traders. Inflation data for August is released beforehand, but it has been superseded by the Tokyo figures released three weeks earlier and remains heavily influenced by government subsidies, meaning it is now basically overlooked by markets.
The more relevant inflation read arrives the following week, when the BOJ releases its own measure that strips out the impact of government subsidies and other distortions.
Crude, yields and the dollar
While central bank decisions will dominate the headlines, don’t dismiss the importance of energy in determining how USD/JPY fares this week.
The correlation matrix below shows a strong relationship between energy prices and US Treasury yields, particularly further out the curve. Over the past five sessions, WTI’s correlation with 10 and 30-year yields stands at +0.78 and +0.96 respectively, while diesel shows a similarly strong relationship.
Source: LSEG
Correlation doesn’t mean causation, and some of the relationships may be spurious. We don’t know. But for all the narratives around fiscal concerns, the evidence suggests movements at the back end of the curve have been heavily influenced by what’s been happening with energy.
That matters for the dollar because Treasury yields are also showing strong relationships with the DXY. Those links are strongest across the front end and belly, where energy is also showing meaningful relationships, even if the strongest evidence sits further out.
Source: LSEG
So what happens in energy prices could conceivably influence yields either side of the Fed decision, which in turn may also influence the dollar. For USD/JPY, however, that relationship is competing with a far more idiosyncratic factor that may help explain the price action we saw last week: ongoing intervention risk.
Hidden forces still supporting the yen
We saw US Treasury Secretary Scott Bessent make highly unusual statements, such as declaring that he was now “the house” and effectively daring traders to weaken the yen. Japanese Finance Minister Katayama then confirmed again on Friday that Japan remained in close contact with the United States over currency markets.
Then we saw highly unusual price action following the US inflation report, emblematic of how USD/JPY has disconnected somewhat from shifts in US rates, as we’ve seen previously. Core inflation came in hotter than expected, front-end yields pushed higher and Fed pricing increased, yet USD/JPY tried to rally before falling sharply.
We don’t know whether intervention is still taking place, but the price action suggests there is a hidden force making the pair behave differently to what it has in the past. It’s not simply that the BOJ has become hawkish. That has been known for some time and doesn’t explain what we’re seeing.
USD/JPY downside bias remains intact
Source: TradingView
That strange price action following the US inflation report saw USD/JPY’s attempted rally stall above 154.50, a level the pair has now failed above twice since late last week, making it the immediate focal point overhead.
Underneath, the bottom of the current range sits at 152.90, where the pair bottomed early last week. Beneath that, 152.10 is a swing low from January, before 151 comes into view. That is a far more important level, having acted as both support and resistance on multiple occasions over several years. If we were to see a substantial downside unwind, other levels of note include 149.40 and 146.
Above 154.50, 155.50 repeatedly acted as support over periods this year and may now flip to offering resistance. Beyond that, 156.68 and 158 are other levels of note before the 200-day moving average.
More broadly, the string of lower highs and lower lows, the medium and long-term moving averages flattening out or beginning to roll over, and the price sitting beneath all three continue to favour the downside. RSI (14) sits around 29, while MACD is pushing further into negative territory after already staging a bearish crossover.
As such, the message right now favours selling into strength and downside breaks. A bearish bias is preferred heading into this risk-laden week.
GBPCHF currency pair recently broke the resistance zone located between the resistance level 1.1000 (which stopped the previous impulse waves 1 and (1)) and the resistance trendline of the daily Triangle from August.
The breakout of this resistance zone accelerated the earlier minor impulse wave 3 – that belongs to the intermediate impulse wave (3) from the middle of last month.
Given the strong daily uptrend and the bearish Swiss franc sentiment seen across the FX markets, GBPCHF currency pair can be expected to rise to the next resistance level 1.1100.
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As the trading week comes to an end, one of the most relevant developments has been the neutral behavior displayed by gold in the short term. Over the last four trading sessions, price action has registered only a modest move of around -0.36%, a dynamic that highlights the recent lack of momentum around the metal.
Part of this indecision remains in place because gold continues facing competition from alternative markets such as bonds, which have regained attractiveness in recent sessions. As long as uncertainty surrounding the possibility of more aggressive central banks remains present, gold demand may continue struggling to establish a stronger recovery, allowing a neutral environment to remain an important feature of XAU/USD price action in the sessions ahead.
What Comes Next Following the U.S. CPI Release?
Toward the end of the week, markets received the latest year-over-year CPI figures for the United States. Inflation came in at the expected 3.4% level for August, while Core CPI also matched expectations with a reading of 2.4%.
Although the data did not show a meaningful acceleration in inflation, it also failed to reveal a significant slowdown. This remains important because inflation continues to hold above the Federal Reserve's 2.0% target, highlighting that price pressures remain persistent and that the central bank's objective is still some distance away from being achieved on a consistent basis.
Source: TradingEconomics
What has become particularly interesting is the change in market expectations following the CPI release. Just a day earlier, there was roughly a 70% probability that the Federal Reserve would raise its benchmark rate to the 4.00% area. Following the inflation data, that probability climbed to nearly 86%.
At the same time, the probability of leaving rates unchanged declined to roughly 13.5%. This shift demonstrates that markets continue leaning increasingly toward the view of a more restrictive Federal Reserve, particularly because inflation continues to show resistance in returning toward the central bank's target.
The adjustment in these probabilities is important because it further reinforces expectations of a more aggressive monetary policy stance in the United States following the latest inflation data.
Source: CMEGROUP
With that in mind, the most relevant consequence for gold is the recent behavior of U.S. Treasury bonds. Following the economic data release, 10-year Treasury yields have continued moving higher and are once again approaching the 5.0% area, reaching fresh highs for 2026.
This situation suggests that fixed-income markets are reacting to the possibility of higher interest rates over the coming months and continue positioning themselves as one of the most attractive segments of the current market environment.
Source: TradingEconomics
This dynamic is not especially favorable for gold because bonds remain one of its main competitors among safe-haven assets. As Treasury yields continue rising, the relative appeal of an asset that offers interest income increases compared with gold, which does not generate yield.
For this reason, a sustained rise in yields may continue limiting part of the demand for the precious metal in the short term. As long as bonds retain their attractiveness, gold could continue facing difficulties in rebuilding momentum, leaving a phase of neutrality or even moderate selling pressure as a relevant feature of XAU/USD price action.
Gold Technical Outlook
Source: StoneX, Tradingview
Potential Trendline Enters a Risk Zone: Although gold has attempted to maintain a medium-term bullish trendline that remains one of the most important technical structures on the chart, price action continues to display growing weakness near the base of this support area. If the current lack of direction persists, the bullish structure could continue losing strength and eventually open the door to a more evident neutral phase during the coming weeks.
RSI: The RSI continues fluctuating near the 50 level, a reading that reflects balance between buying and selling momentum during recent sessions. As long as this behavior remains intact, neutrality could continue to be one of the most important features of the chart.
MACD: A similar situation can be observed in the MACD, whose histogram remains close to the neutral 0 line. This behavior reflects balance within the average strength of short-term moving averages and supports the view that the current lack of direction remains an important part of the market's behavior.
Key Levels to Watch:
$4,530 – Key Resistance: An important upside barrier that coincides with the 200-period Simple Moving Average and remains one of the most relevant technical references on the chart. Price action returning toward this area could restore the relevance of the bullish bias and strengthen the potential uptrend that has developed over recent weeks.
$4,330 – Nearby Barrier: The main equilibrium area on the chart and a level that was respected multiple times during the previous week. As long as price continues developing around this area, a neutral environment could remain dominant and even begin to establish a more evident trading range over the coming weeks.
$4,200 – Critical Support: A level that coincides with one of the most important support zones in the short term and is also located near the 50-period Simple Moving Average and the base of the potential bullish trendline. Price action approaching this area could not only confirm a break of the bullish structure observed in recent weeks but also create room for a more dominant bearish bias to emerge.
Written by Julian Pineda, CFA, CMT – Market Analyst
Spot gold weekly chart shows inside week consolidation at 50-week moving average resistance. Source: TradingView Confluence Points to Potential Momentum Surge Friday’s low could result in a second bottom of a potential double bottom reversal pattern and complete the first significant pullback since a bullish reversal from the recent bottom began in early-August. Of more immediate interest is the tight consolidation range that has formed at the intersection of several trendlines that are expected to converge by next Wednesday. This confluence of trendlines also reflects consolidation and a narrowing range, which could be a prelude to a momentum surge.
On the weekly chart, the consolidation is reflected as an inside week. This week’s high of $4,443 is below last week’s high and the low for this week is at $4,292, which is above last week’s low. That range provides key resistance at $4,443 and support at $4,292, respectively. Since gold remains in a relatively significant consolidation, as reflected on the weekly chart, a decisive breakout through either end of the range could lead to further movement in that direction.
$4,443 Breakout Could Confirm Second Leg Since a key support zone has held so far, with the 50-day moving average near $4,269 defining a lower support boundary, there is the potential for a second leg up from the bottom. The first leg up showed signs of a reversal of the prior downtrend, while a second leg up would further confirm those bullish signals and increase the potential for a continuation of the developing advance. A decisive move above $4,443 would provide an early signal that this second leg may be beginning, while a breakdown below $4,282 would weaken that bullish setup.
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According to FedWatch Tool, the probability of a rate hike at the meeting next week increased to 86.7%, which means that traders are almost sure that Fed will raise the federal funds rate.
The yield of 2-year Treasuries climbed above the 4.62% level as bond traders focused on inflation data. The yield of 10-year Treasuries pulled back towards 4.95% after an unsuccessful attempt to settle above the psychologically important 5.00% level.
I’d note that it’s too early to say that the situation in bond markets has calmed down. I believe that a strong pullback in the oil markets is required to push yields lower.
Rate hike expectations put pressure on gold markets in recent weeks, so gold will stay sensitive to oil price dynamics in the near term. Today, oil markets pulled back by -4% as Gulf countries planned to meet with Iran to discuss the future of the Strait of Hormuz. Falling oil prices provided material support to gold and other precious metals.
Gold failed to settle below the support at $4300 – $4320 and rebounded above the $4350 level. In case gold settles above $4400, it will head towards the resistance, which is located in the $4480 – $4500 range.
On the support side, a move below the $4300 level will open the way to the test of the 50 MA at $4269. In case gold declines below the 50 MA, it will head towards the next support at $4160 – $4180.
If you look at anything but the chart it really seems like the past week is one where the US Dollar should've broken out in a very big way. Sure, the ECB did hike rates by 25 basis points but the initial reaction to that announcement showed how well it was already priced-in, to the degree that ECB ‘sources' needed to come out after the fact and highlight the possibility of another hike to get bulls back on the bid.
Key Points:EUR/USD settled near the 1.1600 level as traders reacted to U.S. CPI report. GBP/USD moved higher as UK GDP exceeded analyst estimates. USD/JPY pulled back towards the 153.50 level.
In this article:EUR/USD
-0.08%
EUR/USD ForecastGBP/USD
+0.09%
GBP/USD ForecastUSD/CAD
+0.21%
USD/CAD ForecastUSD/JPY
-0.52%
USD/JPY Forecast
U.S. Dollar Attempts To Gain Ground After CPI Report
DXY 110926 4h Chart U.S. Dollar Index is swinging between gains and losses as traders focus on the CPI report. The report indicated that Inflation Rate remained unchanged at 3.4% in August, in line with analyst estimates. Core Inflation Rate decreased from 2.5% in July to 2.4% in August. The report has also met analyst expectations. I’d note that Core Inflation Rate grew by +0.3% a month-over-month basis, exceeding the analyst forecast of +0.2%.
Traders also focus on the strong pullback in the oil markets. Oil prices are down by -3.5%, which is bearish for U.S. dollar.
In case U.S. Dollar Index settles back above the 50 MA at 99.08, it will head towards the nearest resistance at 99.25 – 99.40. A move above the 99.40 level will open the way to the test of the next resistance at 99.85 – 100.00.
EUR/USD Remains Stuck Near 1.1600 EUR/USD 110926 4h Chart EUR/USD managed to rebound from session lows as traders reacted to U.S. inflation data and evaluated chances for a rate hike at the next Fed meeting. According to FedWatch Tool, the probability of a rate hike has increased to 86.7%.
If EUR/USD settles back above the support level at 1.1600 – 1.1615, it will head towards the resistance at 1.1685 – 1.1700. On the support side, a move below 1.1570 will open the way to the test of the support at 1.1500 – 1.1515. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Moves Higher As UK GDP Exceeds Estimates GBP/USD 110926 4h Chart GBP/USD gains ground as traders focus on GDP report from the UK. The report indicated that GDP increased by +0.4% month-over-month in July, compared to analyst forecast of 0%.
Traders also had a chance to take a look at Industrial Production and Manufacturing Production report. UK Industrial Production increased by +0.2% month-over-month in July, while Manufacturing Production grew by +0.9%. Both reports exceeded analyst estimates.
Currently, GBP/USD is trying to settle above the 50 MA at 1.3524. In case this attempt is successful, GBP/USD will head towards the resistance at 1.3550 – 1.3565. A move above the 1.3565 level will push GBP/USD towards the next resistance at 1.3635 – 1.3650.
USD/CAD Tests New Highs As Rebound Continues
USD/CAD 110926 4h Chart USD/CAD gained ground despite the rebound in precious metals markets. Other commodity-related currencies managed to gain ground in today’s trading session.
USD/CAD climbed above the 1.3850 level and made an attempt to settle above 1.3880. In case USD/CAD climbs above 1.3880, it will move towards the resistance level at 1.3900 – 1.3915. On the support side, a successful test of the support at 1.3825 – 1.3840 will open the way to the test of the next support at 1.3750 – 1.3765.
USD/JPY Retreats As Traders Stay Bearish USD/JPY 110926 4h Chart USD/JPY pulled back as traders bet on hawkish BoJ and ignored the risks of a rate hike in the U.S. Treasury yields were mixed in today’s trading session. The yield of 10-year Treasuries climbed above the 4.61% level, while the yield of 10-year Treasuries pulled back towards 4.95%.
The nearest support level for USD/JPY is located in the 152.50 – 153.00 range. If USD/JPY declines below the 152.50 level, it will head towards the next support at 149.50 – 150.00.
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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.
Key Points:August CPI came in at 0.4%, pushing the odds of a Fed rate hike next week to 85%.If the Fed hikes rates, expect a bit more downside in precious metals. If they hold steady, the correction is likely over, and prices could shoot higher, especially miners.In a worst-case scenario, escalating attacks on energy infrastructure in the Middle East could send oil shooting above $120, triggering an October surprise, and broad market selloff.
In this article:Gold
-0.70%
Gold ForecastSilver
-4.28%
Silver Forecast10-Year Yields The 10-year Treasury yield is testing its 2023 high as surging oil prices stoke inflation fears. A sustained breakout above 5.00% could trigger a significant selloff in stocks and other risk assets, potentially extending into October.
WTIC Crude oil is testing the $100 level as attacks on Saudi oil infrastructure intensify. A Houthi blockade of the Red Sea could send prices surging above $120 in short order. Markets are approaching a dangerous crossroads, with global oil reserves near record lows and limited spare capacity to absorb a major supply shock or contain another sharp spike in prices.
Gold Gold is attempting to hold its 50-day EMA, but further downside is likely if the Fed hikes rates next week. Ideal support sits around $4,150, plus or minus $50. The risk of additional downside would increase if oil prices and 10-year Treasury yields continue to spike. In that scenario, gold could briefly dip below $4,000, potentially setting up a secondary October low.
Silver Silver could slip back to $60.00, depending on next week’s Fed decision. If the Fed holds rates steady, I would expect an immediate breakout above $70.00. In a worst-case scenario, however, silver could drop to $50.00 in October if spiking Treasury yields trigger a broad market selloff.
Platinum After making a slightly higher high, platinum is now correcting. Progressive closes below the 50-day EMA would favor a pullback toward $1,650 (+/- $50).
GDX Miners formed a major bottom in July, and I believe they are positioned to significantly outperform gold from here. If the Fed hikes rates next week, I’d look for a pullback toward support around $92.00. If the Fed holds rates steady, however, miners could break out to new highs in Q4.
NEM Newmont hit fresh highs in August, confirming my view that miners are positioned to outperform gold from here. If the Fed hikes rates next week, we could see Newmont pull back below $120. If the Fed holds rates steady, however, prices would likely rocket to new all-time highs.
GDXJ Junior gold miners could slip a bit further, perhaps below $120, depending on next week’s Fed decision. Overall, I believe they are well positioned to outperform gold from here and are an excellent buy-the-dip candidate.
SILJ I think silver juniors could offer the most upside potential over the next three to five years. If you missed our mid-year low, a dip below $30 following a Fed rate hike could present an attractive opportunity to add to positions.
S&P 500 The stock market is vulnerable to a 10%+ correction heading into October if prices break decisively below 7,550 following next week’s Fed meeting.
A broad market selloff driven by surging oil prices and Treasury yields could drag metals and miners lower, pushing them toward our worst-case scenario targets.
Bitcoin Bitcoin has been forming lower highs, and interim cycle tops roughly every four months. A sustained breakdown below $76,000 would confirm another peak and open the door to a lower low in Q4.
Conclusion The outlook for precious metals hinges on next week’s central bank decisions. If the Fed hikes rates, we could see a bit more downside. If they hold rates steady, metals could soar as the Fed loses credibility.
In a worst-case scenario, escalating attacks on Gulf state energy infrastructure could send oil above $120. In turn, Treasury yields could spike above 5.00%, triggering a broad market selloff into October, likely dragging metals and miners to their lower alternate targets.
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USD/CAD rose toward 1.3870 on Friday, extending its advance for a third consecutive session as the Canadian Dollar weakened alongside falling oil prices. US CPI inflation held at 3.4% year over year in August, while monthly core CPI rose a stronger-than-expected 0.3%. WTI crude oil fell more than 4% below $100, adding pressure on the oil-sensitive Canadian Dollar. USD/CAD rose toward 1.3870 on Friday after briefly reaching 1.3882 following the release of the latest US Consumer Price Index (CPI) report. The currency pair is heading for a third consecutive session of gains as falling oil prices weigh on the Canadian Dollar (CAD), while the US Dollar struggled to hold its initial post-CPI advance.
US headline inflation remained at 3.4% year over year in August, matching market expectations and unchanged from July. On a monthly basis, the Consumer Price Index increased 0.4%, accelerating from the previous 0.1% increase. The underlying inflation figures were slightly firmer. Core CPI rose 0.3% month over month, above the 0.2% forecast, although annual core inflation eased to 2.4% from 2.5%.
US Dollar Struggles to Hold Gains After CPI The US Dollar initially strengthened after the CPI report as markets reacted to the stronger-than-expected monthly core inflation reading. However, the move quickly lost momentum.
Annual headline inflation remained unchanged at 3.4%, while annual core inflation continued to moderate. That reduced the case for a significantly more hawkish repricing of Federal Reserve interest-rate expectations.
For USD/CAD, the result left the US Dollar providing only part of Friday’s upside. Weakness in the Canadian Dollar has become the more important driver of the pair.
Why Is the Canadian Dollar Falling Today? The Canadian Dollar is falling today as crude oil prices retreat sharply, weakening one of the currency’s traditional sources of support. West Texas Intermediate (WTI) crude fell more than 4% to around $95.90 per barrel, dropping back below the closely watched $100 level after recently reaching a four-month high.
The decline in oil has weighed heavily on the Canadian Dollar, given Canada’s position as a major crude exporter. That relationship has helped USD/CAD continue higher even as the US Dollar surrendered part of its immediate post-CPI gains.
Oil Price Falls Below $100, Weighing on Canadian Dollar Oil has become a particularly important catalyst for the USD/CAD exchange rate following the sharp volatility in energy markets. WTI crude fell approximately 4.6% on Friday after encountering strong selling pressure above $100.
Lower oil prices can weigh on Canada’s trade outlook and reduce demand for the Canadian Dollar, making sharp movements in crude particularly relevant for USD/CAD. The latest oil selloff therefore leaves the Loonie under pressure despite the relatively limited reaction of the broader US Dollar to the inflation report.
US CPI Keeps Fed Rate Outlook in Focus Friday’s US CPI report provided a mixed inflation signal ahead of the Federal Reserve’s September policy meeting. Headline CPI increased 0.4% month over month and remained at 3.4% annually. Meanwhile, the stronger 0.3% monthly core reading suggests underlying inflation pressures have not disappeared.
However, annual core inflation slowing to 2.4% prevents the report from delivering an entirely hawkish signal. The data follows Thursday’s stronger producer inflation figures and last week’s resilient US employment report, leaving the Fed interest-rate outlook a key driver for the US Dollar heading into next week’s decision.
USD/CAD Forecast: Oil Weakness Keeps 1.3900 in Focus The near-term USD/CAD forecast remains supported around 1.3870, primarily as falling oil prices continue to pressure the Canadian Dollar. The pair reached 1.3882 following the CPI release, putting the 1.3900 area within reach if Canadian Dollar weakness continues.
However, the US Dollar’s inability to hold its initial CPI-driven gains could limit the upside. A recovery in crude oil could also provide some relief for the Loonie.
For now, oil prices and shifting Fed rate expectations remain the main catalysts for USD/CAD, with the pair maintaining its recent upward momentum near 1.3870.
Why is USD/CAD rising today?
USD/CAD is rising as the Canadian Dollar weakens alongside falling oil prices. The pair also briefly benefited from a stronger US Dollar following the August CPI report.
Why is the Canadian Dollar falling today?
The Canadian Dollar is under pressure after WTI crude oil fell more than 4% and dropped below $100 per barrel. Canada is a major oil exporter, making the Loonie sensitive to large movements in crude prices.
How does US CPI affect USD/CAD?
Higher-than-expected US inflation can support the US Dollar if it increases expectations for tighter Federal Reserve policy. However, USD/CAD is also heavily influenced by Canadian economic conditions and oil prices.
Key Support and Resistance Prices The 200-day EMA offering support makes sense from a technical analysis standpoint. So really, at this point in time, none of this is a big surprise for those who follow the chart patterns.
To the upside, we have the $4,500 level offering a bit of resistance and could be a bit of a target for those who are overly bullish. Above that, then we have the $4,700 level. That is an area that has been important in the past.
The 200-day EMA has already shown itself to be important during the session, so it will be worth watching as potential support. We will just have to wait and see. A breakdown below that would, of course, be negative, but at this point in time, it looks like metals markets, both gold and silver, are willing to just hang out where they have been.
Gold edged higher in early Friday trading on a partial profit-taking after Thursday’s 2% drop, as traders await release of key US inflation data for fresh direction signals.
Gold was deflated by sharp rise in oil prices and under pressure from growing expectations for Fed rate hike in September policy meeting, with today’s inflation data to give the final signal to the policymakers ahead of next week’s meeting.
Bears were repeatedly contained by significant Fibo support at $4319 (50% retracement of $3942/$4697 upleg), although pressure on support remains.
Current conditions with high risk of war escalation and further rise of oil prices, maintain pressure on gold that may result in final break of $4319 pivot (will also complete bearish failure swing pattern and signal bearish continuation) to expose targets at $4268 (daily cloud top) and $4230 (Fibo 61.8%).
Daily studies are predominantly bearish, keeping strong negative momentum, with multiple MA bear-crosses, while daily Ichimoku cloud is thinning and twists next week that would be also magnetic.
Only bounce and close above $4400 zone (10DMA / broken Fibo 38.2%) would sideline bears and open way for stronger recovery.
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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.
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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.
The EUR/USD edged lower this morning, down for the second day, ahead of the release of US CPI. The pair has been consolidating in a tight range, and yesterday’s hawkish rate hike from the ECB failed to deliver the breakout many traders were hoping to get. With the US dollar finding renewed support in recent days, the risk to the near-term EUR/USD forecast is tilted to the downside.
Before discussing the upcoming CPI report, as well as other macro factors influencing the EUR/USD, let’s a have a quick look at the chart first.
Technical EUR/USD forecast and key levels to watch
From a technical analysis point of view, the EUR/USD forecast hangs in the balance as the pair continues to consolidate inside a triangle, but the balance of risks remain tilted to the downside because of the energy situation. Key support comes in between 1.1560ish to 1.1580ish. Break that region and then a revisit of 1.1500 could be on the cards next. Resistance meanwhile comes in around 1.1635/40 area. Here, the resistance trend of the triangle pattern meets the 200-day average and the highs of the last several days. Break that and 1.1700 could be the next stop.
Source: TradingView.com
A lot will now depend on the direction of oil prices and bond yields, which are starting to provide some support for the dollar.
Dollar finds renewed support ahead of CPI
The dollar is beginning to find its footing again as the relationship between the currency and long-dated Treasury yields starts to reassert itself. The shift has come against a backdrop of rising oil prices, firmer inflation expectations and renewed pressure in the bond market.
The US Treasury’s latest buyback programme offers an important clue. Although the headline announcement was for $6bn, only $5.19bn was ultimately conducted. That relatively modest intervention suggests Treasury Secretary Scott Bessent remains wary of trying to lean too heavily against the bond market. A more conventional relationship between higher long-end yields and a stronger currency is easier to sustain if investors do not expect Washington to suppress borrowing costs aggressively.
The next test comes with today’s CPI report. Markets expect headline inflation to rise 0.4% month on month in August, taking the annual rate to 3.4%, while core CPI is expected to ease slightly to 2.4%
After a stronger-than-expected PPI reading, the risks are no longer quite as symmetrical. A benign CPI report would give investors some relief, particularly in equities, but a meaningful upside surprise could have a much larger market impact. With oil back above $100 a barrel and Treasury yields rising, evidence that inflation is proving sticky would make the prospect of easier monetary policy considerably harder to defend.
That leaves the Federal Reserve in a difficult position. Chair Kevin Warsh has set a relatively high bar for incoming data to overturn the current hawkish tone, although Christopher Waller has suggested that continued improvement in inflation could remove the need for a September move. Much has changed since those comments, however, with oil prices surging in recent days.
A weaker CPI reading would therefore probably hurt the dollar, but it may not be enough to unwind the broader repricing of Fed policy.
The euro faces a different problem
The ECB has meanwhile become more comfortable acknowledging the inflation risks coming from energy. Its latest projections were revised higher, while Christine Lagarde’s comments reinforced the impression that another rate increase remains firmly on the table.
That has changed the near-term calculus for the euro. Markets are now carrying a much larger premium for European rates, reducing the likelihood of a large drop in the EUR/USD, but much of that hawkish tone was already priced in.
But Europe remains particularly exposed to higher energy costs, and an extended period of oil above $100 would squeeze consumers and companies while leaving the ECB with less room to respond to weakening growth.
The contrast with the US is becoming increasingly important. If higher oil prices feed into US inflation while Treasury yields continue to rise, the Fed may be forced to maintain a tighter stance just as growth risks increase. That would be a much more favourable combination for the dollar.
GBPJPY currency pair recently reversed down from the support zone located between the multi-month support level 207.3 (which reversed the price in February) and the lower daily Bollinger Band.
The upward reversal from the support level 80.00 stopped the earlier sharp downward impulse waves 1 and (C).
Given the strength of the support level 207.3 and the oversold daily Stochastic, GBPJPY cryptocurrency can be expected to rise to the next resistance level 209.50 – former support from the end of July.
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Silver is trading near $64, rebounding sharply from earlier 2026 weakness that had left the metal down roughly 14.8% year-to-date, even as it remains up over 61% on a trailing twelve-month basis. The recent bounce has been driven by a genuinely tangled mix of forces: US-Iran tensions near the Strait of Hormuz have kept safe-haven demand elevated, even as mixed signals from Tehran about a possible safe shipping route inject fresh uncertainty into the picture.
The Fed side of the story adds further complexity. Friday’s blowout jobs report, 162,000 payrolls against a roughly 53,000 consensus, pushed September rate-hike odds towards 60%, initially pressuring precious metals before silver clawed back most of that move. Thursday’s hotter-than-expected Producer Price Index, up 5.4% year-over-year and a tenth above forecast, driven largely by a 4.2% surge in energy costs tied to the ongoing conflict, has only reinforced the case for continued Fed vigilance.
Underneath it all, silver’s gold/silver ratio near 65.8 suggests the metal has outpaced gold’s own recent strength, a signal some traders read as silver playing catch-up after a difficult start to the year, though renewed dollar weakness ahead of next week’s inflation data remains the more immediate driver to watch.
Technical Analysis of XAG/USD
As the XAG/USD chart shows, silver has been compressing into a broad symmetrical triangle since late July, with a descending trendline from the 71.066 highs converging with an ascending trendline off the 56.536 low, the origin of this entire rally. Price is now testing the confluence of this ascending trendline, the intermediate 62.50–63.00 support zone, and the 0.5 Fibonacci retracement near 63.80.
Bullish Scenario
Should buyers defend this trendline-support-Fibonacci confluence, the broader triangle structure remains intact. A push back above the 0.382 retracement and 200-period EMA, both near 65.13–65.52, would open the path towards a retest of the 71.066 highs, the origin of the entire correction.
Bearish Scenario
Conversely, a confirmed break below the ascending trendline and the 0.5 retracement would signal that the correction has real legs, exposing the 0.618 level near 62.086, with a deeper slide risking a fuller retest of the major 56–57 support that launched the entire medium-term rally.
With price sitting right at the intersection of a multi-week trendline, a key support zone, and a critical Fibonacci level, silver’s next move looks set to determine whether this consolidation resolves higher towards fresh multi-year highs, or whether the broader rally is finally due for a deeper correction.
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Gold is trading near 4,322 USD per ounce on Friday after falling by almost 2% in the previous session. Investors are now awaiting US consumer inflation data, which could further strengthen expectations of a Federal Reserve rate hike as early as next week.
US producer price data released on Thursday showed that inflationary pressures intensified in August. Producer prices accelerated as the conflict with Iran pushed wholesale energy costs higher.
Following the release, markets raised the implied probability of a 25-basis-point Fed rate hike to around 71%, from approximately 61% shortly beforehand.
Rising oil prices are adding to the pressure on gold. The escalation of the conflict between the US and Iran has driven energy prices higher, increasing inflation risks and strengthening the case for tighter US monetary policy.
US Treasury yields also rose after purchases by the US Treasury under its first expanded buyback operation fell short of market expectations. Higher bond yields are generally negative for gold because the precious metal does not generate interest income and therefore becomes less attractive relative to yield-bearing assets.
Gold has lost more than 2% this week and is on track for a third consecutive weekly decline.
XAU/USD Technical Analysis
On the H4 XAU/USD chart, the market formed a consolidation range around 4,366 before moving lower towards 4,300.
Today, an upward correction towards 4,366 cannot be ruled out. Once this move is complete, the main scenario envisages another decline towards 4,220.
The MACD indicator supports continued bearish momentum. Its signal line remains below zero and points firmly downwards.
On the H1 XAU/USD chart, the market moved lower towards 4,300 before rebounding to 4,335. A consolidation range has now largely formed above 4,300.
An upside breakout from this range could open the way for a corrective move towards 4,366.
XAU/USD Outlook Gold remains under pressure from rising inflation expectations, elevated oil prices, higher US Treasury yields and growing expectations of tighter Federal Reserve policy.
From a technical perspective, XAU/USD could first stage a corrective rebound towards 4,366. However, the broader scenario remains bearish, with the completion of this correction potentially followed by another decline towards 4,220.
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
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