A hot Nonfarm Payrolls report saw traders reprice the potential for a September Fed hike, making this week’s CPI and PPI figures all the more important. Fed funds futures are now back above a 60% probability of a 25bp hike in two weeks, after 162k jobs were added compared with the 53k expected.
We also have a 30-year Treasury auction which may garner more attention than usual, given the bouts of market volatility whenever its yield pushes above 5.3%. The last time it did, Treasury Secretary Scott Bessent doubled the size of long-end Treasury buybacks to provide greater liquidity support. The auction will therefore test whether investors are comfortable absorbing long-duration debt around current yields, or whether they demand an even higher premium.
Despite the renewed Fed risk, AUD/USD remains above 72c and within reach of its 2022 highs. That leaves US inflation, Treasury yields and broader risk appetite as the main near-term drivers for the Australian dollar.
View related analysis:
AU GDP Unlikely to Derail RBA Hike, AUD/USD Eyes ISM, NFP
Australian Dollar Outlook: AUD/USD Faces RBA-Fed Rate Tug-of-War
Australian Dollar Price Action Setups: EUR/NZD, GBP/AUD, EUR/AUD
FX Futures Positioning: Dollar Rebound Meets Diverging Forex Bets | COT Report
Australia This Week: Economic Data and Events for AUD/USD Traders
Australia’s slowing GDP seems unlikely to derail bets of another RBA hike, with cash rate futures having fully priced in a 25bp move by November. The 1-year OIS has fully priced in two. So attention will shift to comments from RBA’s Hunter and Hausser on Tuesday to see if any policy clues are dropped. My guess is that they’ll retain a slightly hawkish tone without committing to much more.
Consumer and business confidence seems likely to show evidence of RBA-hike concerns. Beyond that, it seems appetite for risk and the US dollar’s direction via CPI and bond auction results could be the key driver for the Australian dollar this week.
AUD/USD Technical Analysis: Australian Dollar vs US Dollar
AUD/USD Correlation Analysis
US dollar sensitivity has snapped back: AUD/USD’s correlation with USDX is -0.92 over 10 days and -0.94 over three days, making USD direction the dominant near-term driver.
The yuan remains the most consistent positive relationship: CNH/USD correlations sit at 0.75–0.84 across 3, 10 and 20-day windows, reinforcing China/yuan sentiment as an important AUD/USD input.
Risk and commodity correlations have surged very recently: three-day correlations with the S&P 500 (0.99), gold (0.95), WTI (0.94) and copper (0.87) suggest AUD/USD is currently trading with a strong risk-on/commodity beta.
Short-term relationships remain fluid: several 20-day correlations are weak despite much stronger 3- and 10-day readings, so traders should favour the relationships currently strengthening rather than rely on longer-term averages.
Source: LSEG
AUD/USD Futures Positioning: COT Report
It is more of the same story where futures exposure is concerned for the Aussie. Traders have continued to increase their longs and shorts at a gradual pace, effectively keeping net-short exposure near similar levels to the week prior, albeit a touch less bearish.
This suggests traders continued to hedge their bets despite AUD/USD climbing above 72c to a 16-week high. The more reliable signal is therefore price action and rising total open interest, which now sits at a record high. This shows us that demand for Australian dollar exposure from all participants combined is rising alongside AUD/USD prices.
Source: CFTC (COT) CME, LSEG
For traders wanting a deeper understanding of futures positioning, I’ve also published a guide on how to read and interpret weekly COT data in forex markets.
AUD/USD Options and Volatility Analysis (Risk Reversals, HVN Levels)
Implied volatility has continued to trend lower while prices have moved higher in recent weeks, while 1-month IV remains above 1-week IV to show a calm confidence in the bullish trend. A small bullish engulfing week also formed, although with the May 2022 high nearby, the rally may be maturing to the point that it needs a pause or pullback. The daily chart shows AUD/USD held up well to the strength of NFP on Friday by closing flat, although it formed a doji which shows some hesitation from bulls to push higher immediately.
The AU-US 2-year spread edged lower, though not at an alarming rate. Risk reversals also curled slightly higher last week to show a modest pickup in call demand relative to puts, so options traders are not panicking about a deep pullback.
Overall, AUD/USD still has the potential to rise towards the May high and eventually break above it. How US data lands this week could simply determine whether we see an initial pullback or a direct move towards it first.
Alt: AUD/USD rises as implied volatility falls, with risk reversals and the AU-US 2-year spread supporting a constructive Australian dollar outlook.
Source: ICE, TradingView
Australian Dollar Performance
Australian dollar performance table shows AUD gains across most major crosses, while AUD/JPY underperforms over five and 10 days.
Despite some analysts claiming it’s a relic of the past, a recent study found the gold-silver ratio remains a relevant technical indicator and is still useful for forecasting the silver market's trajectory.
The study was featured in the latest edition of the Silver Institute’s Silver News report, along with reports covering recent advances in silver technology and the silver market.
The gold-silver ratio tells you how many ounces of silver it takes to buy one ounce of gold given the current spot prices of both metals. In other words, it tells you the price of gold in ounces of silver.
According to the study, the gold-silver ratio tends to revert to a mean of around 60-1.
In other words, when the gold-silver ratio rises well above its historical average, it signals that silver is underpriced relative to gold and there is a strong possibility that silver will go on a bull run to close that gap. Conversely, when the ratio drops significantly below 60-1, it will revert to the mean with a silver selloff or gold price surge.
The gold-silver ratio currently sits at around 67-1.
According to the Silver Institute, “The tendency for the gold-silver ratio cyclically to rise above and fall below its long-run equilibrium has not changed. Therefore, even if in future the outcomes will be skewed higher by the structural change supported by heavy official sector gold demand, dips well below equilibrium will also occur.”
Based on the data, when the gold-silver ratio rises roughly 20 percent above its mean, it will eventually move back, often very quickly overshooting the average in the process.
For instance, the gold-silver ratio fell to 30-1 in 2011 after rising to over 80-1 during the money creation of the Great Recession in the wake of the 2008 financial crisis.
Then in 2020, the gold-silver ratio set a record of 123-1 as COVID hysteria gripped the world and then plunged to around 60-1 as central banks around the world cranked up the money-creation machine to cope with governments shutting down economies.
According to the Silver Institute, the ratio of above-ground gold to silver bullion stocks acts in tandem with the ratio of gold-silver investment demand.
“The report noted that recently the higher gold price has been powered by official-sector net sales or purchases that have pushed the gold-silver ratio above the long-run 60-1 ratio. Nonetheless, the ratio is still expected to revert to the mean of about 60 to 1.”
The Silver Institute also reported some interesting technological developments in the world of silver.
Silver has replaced silver in a process used to separate ethylene from propane. The old process carried the risk of an explosion. Researchers at Hanyang University in South Korea found that they can replace silver ions with metallic silver nanoparticles. This form of silver is more stable and less likely to react with chemicals such as acetylene, lowering the risk of explosion.Doctors have discovered that nanosilver can help to measure the correct medication dosages for individual patients. Nanosilver is often used in biological sensors because it can naturally boost the weak reflected light-wave signals coming from drug molecules. These signals have unique signatures that tell laser-powered readers how much and what kind of drug is present. Along with determining a drug’s best dosages and possible side effects, this approach has additional benefits. It replaces slow lab work because this light-based method is not only fast but can be done at a patient’s bedside.Applying Silver Diamine Fluoride (SDF) to children’s teeth has been shown to prevent cavities; however, it can leave dark stains. New research suggests that ‘nanosilver fluoride’ (NSF) might be just as effective without staining. According to a report in the journal BMC Oral Health, “Incorporating silver nanoparticles, NSF, retains the advantageous preventive; this method often leaves dark stains on youngsters’ teeth."Can you smell silver? No. Pure silver and sterling have no odor. However, if you sniff a silver object, the smell indicates whether it is pure. “If you smell metal, like copper, which has a distinct odor, then the item in question is not pure silver. Zinc, brass, and steel have their own particular smells. Even if an item has a thin layer of silver coating, the underlying metal will usually still give off a metallic scent, suggesting that it is not pure silver.”Engineers from the College of Design and Engineering at the National University of Singapore have developed technology that could lead to more flexible and durable wearable sensors. The soft, stretchable substrate repairs itself, firmly grips metal conductors, and can be remolded or broken down after use. In tests, silver films for electrodes that pick up heart and muscle signals adhered three times more strongly to their substrate than other substances used to conduct electricity.The sun may contain 55 percent more silver than astronomers previously believed. Of course, scientists cannot collect samples from the sun to measure the amount of silver it contains, but they can estimate the sun’s composition by studying the light waves it emits. Every element has a unique wavelength, but the researchers came up short on silver when it came to reconciling the higher amount they saw in stuff that fell from space. According to Swedish researchers using a supercomputer, the sun’s rays – unbeknownst to astronomers – distorted the specific light waves that told them how much silver was present.To receive free commentary and analysis on the gold and silver markets, click here to be added to the Money Metals news service.
Currency analysts remain bullish on the AUD/USD exchange rate but wants a retreat to 0.7080-0.7000 before rebuilding long positions. The Australian Dollar is trading above the level where JPMorgan wants to buy it.
Latest — Exchange Rates:
Australian Dollar to Dollar (AUD/USD): 0.720395 (+0.04%)
Pound to Australian Dollar (GBP/AUD): 1.876283 (-0.13%)
Euro to Australian Dollar (EUR/AUD): 1.612118 (-0.17%)
AUD/USD closed near 0.7204 on Friday after reaching 0.7214, leaving the pair roughly 1.7% above the desk’s first preferred entry and 2.8% above the bottom of its buying zone.
JPMorgan is not abandoning its constructive view.
The desk simply considers the current level unattractive for adding exposure.
“We have been bullish on AUD for well-trodden reasons, but with the pair generally struggling at these levels, we have been waiting for a pullback towards 0.7080/00 before topping up on longs.”
The preferred strategy is to rebuild long positions around 0.7080, with 0.7000 representing the deeper end of the zone.
That makes this a pullback call rather than a forecast that AUD/USD must fall permanently.
The distinction matters after the stronger US payroll report.
A firm Dollar response to US data could provide the retreat JPMorgan was waiting for without necessarily invalidating the bank’s broader Australian Dollar view.
Before the release, the desk had already shown reluctance to chase the pair near 0.72.
“NFPs are today, although with Waller drawing attention to next week’s CPI, I am a little less inclined to chase a surprise print today.”
The payroll surprise has shifted attention towards US inflation and the durability of Federal Reserve tightening expectations.
If those expectations strengthen, AUD/USD could be forced back towards JPMorgan’s entry levels.
Image: Australian dollar vs US Dollar chart for last 48 hours of the week. The 48-hour chart nevertheless shows that the Australian Dollar absorbed the payroll release relatively well.
AUD/USD briefly dropped below 0.7190 but recovered to close around 0.7204, near the upper end of its 0.7159-0.7214 range.
Why JPMorgan still likes the Australian Dollar The bank’s constructive stance has been supported by Australian rate expectations, resilient demand for commodity currencies and investor flows.
“AUDUSD moved above 0.72 for a second time this week while NZDUSD got a look above 0.59, although both have been trickling lower since London sat down.”
JPMorgan also reported real-money demand for the currency.
“Flow-wise, RM were large buyers of oz and, to a lesser extent, NZD yesterday, whereas systematics were LHS in AUD.”
The risk for prospective buyers is that 0.7080 never trades, leaving the bullish view without an entry.
The opposite risk is that a break below 0.7000 reflects more than a routine Dollar correction.
Between those outcomes, JPMorgan’s message is clear: stay constructive, but make the market come to the preferred price.
Gold is attempting to stabilize after a sharp two-week decline reversed a large portion of the August advance. The pullback has brought XAU/USD back to an important inflection point, with the focus now on whether bulls can regain control and revive the broader recovery.
Goldman sees USD/JPY falling to 140-145, while Crédit Agricole forecasts a rebound to 163 by December. The US Dollar to Japanese Yen (USD/JPY) exchange rate ended Friday near 156.25 following one of its sharpest weekly reversals of 2026.
USD/JPY fell from above 160.00 to a low near 155.31 before recovering 0.38% during Friday's session.
The move has opened a striking disagreement between a Goldman Sachs trader and Crédit Agricole.
Image: USD JPY 48hr chart The 48-hour chart shows the pair falling almost continuously from 158.95 before stabilising around 156.25.
Support is located near 155.30, while a recovery through 157.10-157.25 would weaken the immediate bearish signal.
Goldman analyst outlines 140-145 scenario A Goldman G10 spot trader linked the Yen's advance to hawkish Bank of Japan comments, carry-trade liquidation and speculation that Japan's GPIF could increase its domestic bond allocation.
The trader said: "If US data comes in softer, or the Fed isn't able to hike, and in combination with that, the BOJ come across more hawkish, I think you can see USDJPY continue to grind lower. But it really is all about this shift from the GPIF which really gets us lower into the 140-145 range over the next 6-12 months."
The 140-145 range is a conditional trader view, not the official Goldman Sachs house forecast.
Friday's 162,000 payroll increase also challenges one of its central assumptions by reducing the immediate risk of softer US data or a less hawkish Federal Reserve.
Crédit Agricole sees a return to 163 Crédit Agricole takes the opposite near-term view, forecasting USD/JPY at 162 in September and 163 in December.
Its projections then decline gradually to 162 in March 2027, 161 in June, 158 in September and 156 by December 2027.
The bank said: "Record levels of intervention have capped USD/JPY’s rally at 164, but for the JPY to stage a sustainable rally the BoJ needs to accelerate the pace of its rate hikes reducing the currency’s appeal as a carry funder."
It added: "Elevated oil prices and investor concerns about Japan’s fiscal sustainability still weigh on the JPY."
A GPIF shift could change that balance.
Crédit Agricole noted: "If Japan’s GPIF allocates more of its AUM to domestic bonds capping super-long end JGB yields, fiscal sustainability concerns would ease."
The MUFG forecast for USD/JPY at 152 sits much closer to the Goldman trader's direction than Crédit Agricole's 163 call.
Price action around 155.30 and 157.25 will provide the first indication of whether the latest Yen surge is extending or beginning to correct.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Suspected intervention helped drive USD/JPY sharply lower
September BOJ hike now fully priced
Payrolls revived September Fed hike expectations
CPI and PPI dominate this week’s US calendar.
USD/JPY moves remains tightly linked to US Treasury yields
USD/JPY suffered its largest weekly loss since late July as we entered September, hit by relatively dovish remarks from senior Fed officials and possible intervention from the Bank of Japan on behalf of the Japanese government.
However, an unusually strong August payrolls report in the United States on Friday managed to resuscitate not only rate hike pricing for the Fed’s meeting the week after next, but also stall what had been an abrupt move lower in the pair.
With a strong and strengthening relationship with gyrations in US bond yields, how the Fed rate outlook evolves this week will likely determine where USD/JPY finishes up on Friday.
Inflation Data Set to Drive Fed Pricing
Thursday’s PPI and Friday’s CPI reports stand out as the known knowns most likely to impact USD/JPY this week.
Both will not only help shape expectations for what core PCE may print at later this month, but could go a long way to determining whether the Fed begins a new tightening cycle in September.
Source: TradingView
The timing is especially important given conflicting messages from senior Fed officials over the past week. Chair Kevin Warsh struck a hawkish tone at Jackson Hole, making it clear he remained uncomfortable with inflation and that the Fed still had work to do if price pressures failed to ease sufficiently. Governor Michael Barr also sounded relatively hawkish, reinforcing the sense that another hike remained firmly on the table.
But that messaging was subsequently tempered by New York Fed President John Williams, who said the case for a September hike “isn’t yet firm”, and Governor Christopher Waller, who said he would support keeping rates unchanged if August inflation continued to cool.
With the Fed now in blackout ahead of the September meeting, it will therefore leave the data to do the talking.
At the very least, the core figures probably need to print in line with expectations, if not a touch above, to really cement the case for a September hike. If that happens, you’d expect market pricing to follow, with the probability of a move currently sitting just shy of two in three.
The underlying detail will also matter, particularly in areas of the economy that are more heavily influenced by domestic factors, such as services inflation excluding housing and energy services.
If the core readings undershoot, market pricing for a September hike would likely ratchet lower, leaving December as the more likely candidate as the Fed and markets have more time to assess incoming economic data.
While history suggests the more volatile market reaction normally comes following CPI, PPI arrives first on this occasion, meaning it could provide markets with a strong steer on whether upside or downside inflation risks are prevalent heading into Friday.
Treasury Auctions Enter the Spotlight
Another area of note on the US calendar will be Treasury supply, with three, 10 and 30-year auctions scheduled across the week. They arrive at a time when there’s already plenty of unease around Fed credibility and the size of the US deficit.
US President Donald Trump’s threat on Friday to impose tariffs on countries if the Fed doesn’t cut rates could, at the margin, dissuade international investors from participating in those auctions.
We also get the Treasury’s monthly budget statement on Friday. If that delivers another ugly deficit print, as we saw in the July figures, it could place renewed upward pressure on Treasury yields.
Contrary to what you might normally expect from renewed fiscal concerns, given the strong positive relationship between USD/JPY and moves in US Treasury yields over recent weeks, any renewed move higher in yields from weak auction demand or another poor budget print could also help generate upside in the pair.
Source: Bloomberg
Japan Data Must Back the Hawkish Shift
On the Japanese side of the ledger, the impetus to sustain the strengthening in the yen seen last week will come down to key wages and upstream PPI data released during the week.
There’s been a distinct hawkish repricing of the Japanese rates outlook over the past couple of weeks, with a September hike now fully priced and an over 80% probability attached to a follow-up move in December.
Source: TradingView
It will be left to those reports, along with the detail in the final read of Q2 GDP released on Tuesday, to justify those expectations. If we see weakness relative to market expectations, it runs the risk of pushing BOJ policymakers back towards a more cautious stance on the cadence of policy tightening.
The detail in the GDP report will also be important. The initial release was soft beneath the headline, with weakness in household consumption especially prominent.
Even though the report now comes across as a little like ancient history, stronger underlying detail would still help build confidence in the virtuous cycle the BOJ wants to see between strengthening wage pressures, firmer demand and self-sustaining inflationary pressures. At the margin, that will be another important consideration for the rates outlook.
US Rates Link Tightens
Despite the hawkish repricing of the Japanese rates outlook, the correlation matrix below continues to point to a very strong linkage between USD/JPY and outright movements in US Treasury yields.
Source: TradingView
Over the past five days, the correlation with the US 2-year yield sits at 0.80, rising to 0.89 with the US 10-year and 0.76 with the 30-year. That compares with just 0.26 for the US-Japan 2-year yield spread and -0.46 for the 10-year spread over the same period.
So even though Japan’s rates outlook has undergone quite a major hawkish transition recently, the message from the matrix remains one where the US rates outlook, along with the implications further out the curve, continues to have a vice-like grip on movements in USD/JPY.
It’s also worth pointing out that we’re seeing an unusual positive correlation between USD/JPY and both VIX and MOVE, which is contrary to what you’d normally expect given the yen’s status as a funding currency for carry trades. At the same time, the inverse relationship with risk assets has persisted and strengthened, with the five-day correlation with S&P 500 futures sitting at -0.94.
What’s also notable is that the damage higher energy prices had been doing to the yen appears to have weakened. That relationship had been driven by concerns around Japan’s energy security and the deterioration in its terms of trade, yet the yen managed to strengthen last week even as energy prices continued to rise.
USD/JPY Respects the Range
Source: TradingView
While the question as to whether the BOJ was instructed to intervene last week remains unanswered, despite the violence of the bearish unwind, USD/JPY continues to be respectful of known technical levels, providing something akin to a blueprint for traders to focus on.
The immediate range in focus is 156.68 on the topside and 155.50 on the downside, with the former coinciding with the low set on August 7, while the latter is the top of a zone that has sparked some savage bounces over the course of this year.
While the overall message from the oscillators continues to favour selling into strength and downside breaks, with RSI (14) still sitting at 34 and MACD remaining beneath the signal line in negative territory, the rapid increase in downside momentum looks to have reversed slightly thanks to the strong payrolls print last Friday.
My view is therefore to place greater emphasis on price action rather than holding a specific directional bias in the near term. While we entered this range at rapid velocity from above, you can’t dismiss the fact we’ve seen some big bounces from this zone in the past.
On the topside, above 156.68, the levels to keep an eye on are 158, which has acted as both support and resistance for periods this year, and 159.50, another similar level above that.
Underneath, 155.50 down to 155 has been the support zone where bids have been lurking this year. A clean break beneath the lower rung of that zone could bring 154 into play, which has acted as both resistance and support for periods this year, along with 152.09, 151.50 and a more prominent support level at 151.
The Mexican Peso appreciates against the US Dollar, testing two-year highs near 16.85 as the USD/MXN sets aside a strong US Nonfarm Payrolls report, which was ignored by the Peso’s bears. At the time of writing, the emerging market pair trades at 16.88, poised to extend its losses and challenge the April 2024 lows at 16.74.
USD/MXN Price Forecast: Technical OutlookPrice action suggests that the downtrend is poised to extend, as USD/MXN approaches two-year lows. Bearish momentum continues to increase as the Relative Strength Index (RSI) dives further into bearish territory.
The first support area is the 16.50-mile milestone. Below the latter, the next stop is May’s 2024 monthly low of 16.52, ahead of a test of the 2024 yearly low of 16.26. Once surpassed, the next area of interest will be the 16.00 figure.
For a bullish reversal, buyers must clear the 17.00 level to remain hopeful of reaching higher prices. Up next, the August 19 high of 17.07 emerges as the next resistance. A decisive breakout will expose the 50-day Simple Moving Average (SMA) at 1725, immediately followed by the 100-day SMA at 17.30. Above sits the 200-day SMA at 17.48.
USD/MXN Price Chart – Daily
USD/MXN daily chart Mexican Peso FAQs The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
The USD/CHF registers modest gains of over 0.30% as the Greenback is boosted by a solid US Nonfarm Payrolls report, pushing the pair above the 50-day Simple Moving Average (SMA) to reach a daily high of 0.8126. At the time of writing, trades at 0.8098.
USD/CHF Price Forecast: Technical OutlookThe USD/CHF trades just above the 50-day SMA but off daily highs, suggesting sellers have moved in to push the pair below 0.8100. Nevertheless, the overall trend remains upwards unless it falls below the August 20 swing low of 0.7949, which could exacerbate a move towards the 200-day SMA at 0.7932.
The Relative Strength Index (RSI) has turned bullish, but since it has pierced the 50-neutral level, USD/CHF is expected to trade sideways in the short term.
For a bullish resumption, USD/CHF needs to clear 0.8100. A move past that level can pave the way for a recovery towards 0.8150, with buyers setting their sights on 0.8200. Above the next area of interest is the yearly high at 0.8207.
On the downside, a decisive breakout below 0.8000 will expose the 100-day SMA at 0.7995, followed by the 0.7949 August 20 daily low. Beneath sits the 200-day SMA at 0.7932.
USD/CHF Price Chart – Daily
USD/CHF daily chart Mexican Peso FAQs The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
Spot gold daily chart shows larger trend structure. Source: TradingView ABCD Target Aligns with Fibonacci Resistance A 100% projected target for a rising ABCD pattern at $4,984 aligns closely with the 61.8% Fibonacci retracement of the prior decline at $4,966. Together, the $4,966 to $4,984 range establishes the next higher resistance zone if the $4,892 level is surpassed. Since a 61.8% Fibonacci retracement is relatively common, the ABCD pattern target provides additional technical significance to this zone and increases the likelihood that it could be tested as resistance before the current advance completes. Notably, this higher target zone could be reached without gold leaving the boundaries of the rising channel, reinforcing the potential for continued bullish momentum.
Second Leg Could Extend Advance There has only been one leg up since the bottom of the recent correction and a second leg up at a minimum is likely. The second leg up should extend the current advance above the recent high of $4,697 and toward higher targets.
If you’d like to know more about how to trade gold and silver, please visit our educational area.
OCBC’s Christopher Wong notes that USD/IDR has pulled back as a softer Dollar and lower UST yields support the Indonesian Rupiah. He highlights Bank Indonesia Governor Destry Damayanti’s emphasis on a stability-first approach, prioritizing Rupiah and macro stability while still supporting growth. Wong sees near-term support for IDR but flags elevated Oil prices and high global yields as constraints.
Stability-first stance supports Rupiah"Speaking at the Sarasehan 100 Ekonom Indonesia in Jakarta on Thursday, BI Governor Destry Damayanti reinforced the stability-first message she had set out earlier in the week, stressing that policy cannot be viewed solely through the domestic inflation lens given the “higher-for-longer” global rate environment and the need to keep Indonesian assets attractive to foreign investors."
"Her remarks were consistent with earlier signals of policy continuity, with rupiah and macro stability remaining key priorities even as BI continues to support growth through its broader policy mix."
"Together with the pullback in UST yields and softer USD, this should provide some near-term support to IDR, although elevated oil prices and still-high global yields remain constraints."
"Immediate support at 17620 (38.2% fibo retracement of 2026 low to high). If broken, opens way for next support at 17444 (50% fibo). Resistance at 17710 (100 DMA), 17800 levels (21 DMA)."
"USD/IDR closed at 17660. Momentum on daily chart is flat while RSI fell."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Daily Spot Gold (XAU/USD) Spot Gold (XAUUSD) is lower late Friday but well off the session low. After a steady opening, gold plunged to $4,365.57 before rebounding to $4,440.00. The recovery showed buyers were willing to defend the break, but it did not produce a clear daily trend reversal.
The first resistance is the short-term 50% level at $4,489.87. The 200-day moving average at $4,534.09 and the short-term 61.8% level at $4,538.77 form the core resistance area above it.
The key support remains the intermediate retracement zone at $4,319.50 to $4,230.51. It stopped the selling Wednesday when gold reached $4,282.62. The 50-day moving average at $4,239.55 is inside that zone.
The intraday tone is constructive after the rebound from $4,365.57, but the pre-holiday session is producing a choppy trade with no clear trend. Gold needs to clear $4,489.87 to show buyers are taking control again. A failure to hold the recovery puts the $4,319.50 to $4,230.51 support zone back in play.
Payrolls Gave the Hawks Their Number Daily US Government Bonds 2-Year Yield The two-year Treasury yield rose to about 4.38%, its highest since January 2025. The 10-year traded near 4.78%. The 30-year held near 5.24%. The short end led because the report changed the market’s view of what the Fed could do in less than two weeks.
The dollar index jumped after the report then gave back part of the advance. That helped gold recover from $4,365.57. Gold bounced off the low rather than extending straight down because other parts of the report were less clean for the hawks. The unemployment rate did not decline. Annual wage growth was at its lowest level since June 2021. The dollar rally faded after the first reaction as traders looked ahead to next week’s inflation reports.
Waller Can Still Point to Wages The headline number was strong. The wage number was not. Waller said Thursday he would support holding rates steady if the next data confirms inflation pressure is easing. Slower wage growth gives him something to work with. Warsh can point to 162,000 new jobs, higher oil and inflation still above target.
The Fed does not have one message right now. Gold is caught between those two reads and Friday’s price action showed both sides. The metal fell $125 from Thursday’s high to Friday’s low. Then it recovered $58 from the low. Neither side had full control by late afternoon.
What to Watch Next week’s inflation data takes over the gold trade. The Producer Price Index lands Thursday. Consumer inflation follows Friday. Core CPI is expected to ease to a 2.4% annual rate from 2.5% in July. Waller asked for cooler inflation to justify holding. Friday’s payrolls gave Warsh the stronger hand at 162,000 jobs with upward revisions.
PPI and CPI decide whether Waller gets it back. The two-year yield is at its highest since January 2025. The dollar jumped on the report and only gave back part of the move. Gold bounced from $4,365.57 but is still down $49 on the session after giving back most of Thursday’s $101 rally.
Gold is sitting between the 50% level at $4,489.87 above and the intermediate retracement zone at $4,319.50 to $4,230.51 below. The 200-day at $4,534.09 and the 61.8% at $4,538.77 are the resistance cluster that matters if buyers can get through the 50% level. The retracement zone stopped the selling Wednesday at $4,282.62 and the 50-day at $4,239.55 sits inside it.
Friday’s rebound from $4,365.57 was constructive but the pre-holiday session left no clear trend. Next week’s inflation numbers decide whether gold recovers toward the 200-day or retests the support zone that has been holding the market since Wednesday.
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Gold closed Thursday at $4,539.90, its best day in weeks, after Fed Governor Waller said he would lean toward holding in September if August inflation shows progress, and the odds of a hike fell from 63 percent to a coin flip. This morning, the August payrolls printed 162,000 against a consensus of 55,000, the odds went back above 60 percent within minutes, and gold trades near $4,427 as I write this, with silver falling faster.
The market got its dovish Fed. It lasted one session.
What happened after yesterday's alertWaller's remarks landed after yesterday's analysis was posted, and they did what Williams did not the day before: the two-year yield fell to 4.32 percent, the 10-year closed at 4.76 percent for a second day of declines, the Dow gained 624 points, the S&P 500 rose 1.1 percent, and the Nasdaq 1.4 percent, their best day in nearly a month, and gold rose 2.8 percent into the close.
Yesterday, I wrote: "A dollar that falls because another central bank turns more hawkish is not the same as a dollar that falls because the Fed turns dovish." This is also in perfect tune with my gold forecast for September 2026.
For one afternoon, the Fed did turn dovish, on one governor's conditional preference, and gold's best day in weeks was built on it. The condition was that the data cooperate.
The data did not cooperatePayrolls rose 162,000 in August, the strongest month since March, with the prior two months revised up by a combined 55,000 and July's loss turned into a gain of 21,000. The unemployment rate held at 4.1 percent and wages rose 0.3 percent. Short-end yields jumped, the USD Index reversed from its weekly low near 98.9 to trade above 99.3, and the hike odds that Waller had pulled to 50 percent went back above 60.
Yesterday, I also wrote: "Tomorrow's payrolls are the last release before the decision that has any chance of moving those odds."
They moved them, and in the direction that hurt the hold camp most. Bank of America counted 61 inflation references in Chair Warsh's Jackson Hole speech against 30 for the labor market, so a soft jobs number was the only argument the hold camp had, and this morning removed it. What remains is next Friday's CPI, carrying a month of elevated oil, five days before the decision.
Silver led both waysYesterday, I wrote: "This dynamic: miners weaker than gold and silver stronger than gold has 'watch out, it's a fake rally' written all over it."
Silver led Thursday's rally, and it is leading this morning's decline, falling faster than gold. That is the sequence silver has delivered at this year's tops: it outperforms into the peak and underperforms out of it.
Gold plunged almost as much as it had rallied yesterday. Please note that the current back-and-forth movement is somewhat similar to what we saw in mid-August (with more volatility this time). Both consolidations could be the shoulders of a head-and-shoulders top formation. The target based on this formation would be close to $4,100, but please remember that the targets based on this formation work on an “at least” basis.
The miners at the lineYesterday, the GDXJ closed about 3.3 percent higher near $132.3.
Today, it’s already about 3.4% lower – more than cancelling yesterday’s upswing.
On Wednesday, I wrote: "This move lower is likely to continue soon, just as the March decline continued."
The March rebounds were sharp, they reached resistance, and they were over within days. This one reached resistance in two, and the corrective upswing seems to be over.
The Dollar held the retracementYesterday, I wrote that the USD Index's decline "stopped at the 61.8% Fibonacci retracement level based on the late-August rally" and that it was "a post-breakout correction." The index bottomed near 98.9 overnight, at that retracement, and reversed higher on the payrolls.
The yen is still near 155, the Bank of Japan is still expected to hike on September 18, and the dollar is rising anyway. The headwind that produced yesterday's decline is still blowing, and the index is moving into it. That is the rate channel reasserting itself over the currency story within a day.
Please note that gold, silver, and mining stocks declined more – compared to yesterday’s upswing – than the USD index rallied compared to yesterday’s decline.
This kind of USD-PMs link is exactly what we want to see when forecasting declines in the precious metals sector.
Iran, brieflyThe exchange of strikes quieted after Wednesday. The IRGC claimed two tankers hit mines in the strait, which CENTCOM denied, Iran's foreign minister met his Qatari counterpart in Tehran on Thursday in the latest mediation attempt, and President Trump wrote that he is "not trying to force Iran to the bargaining table" and likes the current position better, "with almost total control of the Hormuz Strait." Daily transits remain at less than half their pre-war level.
Brent is near $95 and up about 7 percent on the week, WTI is lower this morning, and gold is giving back a hundred dollars on a week when oil rose 7 percent. The war premium has not been in the gold price since spring, and this week did not put it back.
Where this leaves usMy outlook and positions are unchanged, and my subscriber-only profit-take levels remain in place.
Silver led the bounce and is leading the decline, the miners closed at the line and are set to open below it, FCX fell on the sector's best day in weeks, and the dollar held the retracement it needed to hold and reversed on the data.
The hold camp needed one thing from the labor market. The labor market gave the hike camp its best number since March.
Euro Technical Forecast: EUR/USD Weekly Trade Levels
EUR/USD has defended pivotal support for a second consecutive week following the pullback from August highs.
Weekly momentum is attempting to stabilize in positive territory after reaching its strongest levels since May.
The September opening range is beginning to take shape as price remains caught within a broader multi-month consolidation.
The ECB rate decision and U.S. CPI / PPI headline next week’s event risk as markets reassess the relative policy outlook.
Resistance ~1.1632/33, 1.1746/75 (key), 1.1850- Support 1.1564/78 (key), 1.1472, ~1.14
EUR/USD heads into September at an important technical crossroads after the August recovery lost momentum near resistance. The larger technical picture remains finely balanced, with neither bulls nor bears able to establish control, leaving the Euro vulnerable to a larger directional move. With the ECB rate decision and U.S. CPI on tap next week, the stage is set for a critical stretch that could provide much-needed clarity heading into the September rate decision the following week. Battle lines drawn on the EUR/USD weekly technical chart.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this EUR/USD technical setup and more. Join live on Monday’s at 8:30am EST.
Euro Price Chart – EUR/USD Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Technical Outlook: In last month’s Euro Technical Forecast we noted that EUR/USD had rebounded off major support and that, “losses would need to be limited to the 1.1469 IF price is heading higher on this stretch. Look for a larger reaction near 1.1650 IF reached.” The rally extended more than 3.1% off the July low with a four-week advance registering a close high at 1.1679 pulling back.
A decline of more than 1.2% has held key support for the past two weeks at 1.1564/78, where the 38.2% retracement of the June advance converges on the January swing low. The focus heading into September is on a possible inflection off this pivotal zone as the monthly opening range begins to take shape just above. Note that the momentum trigger we highlighted last month as now broken with weekly RSI attempting to stabilize in positive territory after stretching the highest levels since May.
EUR/USD Weekly RSI
The 52-week and 200-day moving averages now converge at 1.1632/33, with key resistance unchanged at 1.1746/75. This region, defined by the yearly open, the 2025 high-week close, and the 2025 high close, has served as a major inflection zone since June of last year. The 75% parallel of the broader upslope is set to converge on this threshold over the next few weeks, further highlighting its technical significance. A breach / weekly close above would be needed to invalidate the yearly downtrend and threaten the next leg higher in price. Subsequent resistance objectives are eyed at the yearly high-week close (HWC) and the April high at 1.1850 and a longer-dated extension at 1.1917.
A break below the monthly range low would threaten a deeper correction towards the 61.8% retracement at 1.1472 with the median-line of the multi-year upslope currently near ~1.14. Key weekly support remains unchanged at 1.1355/69- a region defined by the 38.2% retracement of the 2025 advance, the April high-week close and the 2026 low close. A break / weekly close below this zone would be needed to fuel the next major leg of the January downtrend.
Bottom line: EUR/USD is carving the September opening range just above pivotal support with major event risk on tap next week. We may still be in a massive multi-month consolidation pattern here so look for a breakout to offer guidance. From a trading standpoint, losses would need to be limited to 1.1472 IF Euro is heading higher on this stretch with a close above 1.1775 needed to fuel the next major leg of the rally.
Today’s stronger-than-expected Non-Farm Payrolls report reinforced the resilience of the U.S. labor market, shifting the focus squarely back to inflation and the outlook for Fed policy. Next week brings significant event risk on both sides of EUR/USD, with the European Central Bank widely expected to raise rates on Thursday before the release of the August U.S. Consumer Price Index (CPI) on Friday.
With an ECB hike largely anticipated, the tone of the accompanying guidance could prove more important for the euro than the decision itself. In the U.S., another firm inflation reading following today’s strong employment report would strengthen the case for additional Fed tightening and could offer some support for a broader Dollar recovery. Conversely, a meaningful decline in the pace of price growth could keep give the Fed more latitude to hold rates into the close of the year. While this is not the Fed’ preferred gauge, it will be the final inflation read ahead of this month’s rate decision. Stay nimble into the releases and watch the weekly close for guidance. Review my latest Euro Short-term Outlook for a closer look at the near-term EUR/USD technical trade levels.
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--- Written by Michael Boutros, Senior Technical Strategist
What Happened After Yesterday’s Alert Waller’s remarks landed after yesterday’s analysis was posted, and they did what Williams did not the day before: the two-year yield fell to 4.32 percent, the 10-year closed at 4.76 percent for a second day of declines, the Dow gained 624 points, the S&P 500 rose 1.1 percent, and the Nasdaq 1.4 percent, their best day in nearly a month, and gold rose 2.8 percent into the close.
Yesterday, I wrote: “A dollar that falls because another central bank turns more hawkish is not the same as a dollar that falls because the Fed turns dovish.” This is also in perfect tune with my gold forecast for September 2026.
For one afternoon, the Fed did turn dovish, on one governor’s conditional preference, and gold’s best day in weeks was built on it. The condition was that the data cooperate.
The Data Did Not Cooperate Payrolls rose 162,000 in August, the strongest month since March, with the prior two months revised up by a combined 55,000 and July’s loss turned into a gain of 21,000. The unemployment rate held at 4.1 percent and wages rose 0.3 percent. Short-end yields jumped, the USD Index reversed from its weekly low near 98.9 to trade above 99.3, and the hike odds that Waller had pulled to 50 percent went back above 60.
The yen is still near 155, the Bank of Japan is still expected to hike on September 18, and the dollar is rising anyway. The headwind that produced yesterday’s decline is still blowing, and the index is moving into it. That is the rate channel reasserting itself over the currency story within a day.
Gold, silver, and mining stocks declined more – compared to yesterday’s upswing – than the USD index rallied compared to yesterday’s decline.
This kind of USD-PMs link is exactly what we want to see when forecasting declines in the precious metals sector.
Iran, Briefly The exchange of strikes quieted after Wednesday. The IRGC claimed two tankers hit mines in the strait, which CENTCOM denied, Iran’s foreign minister met his Qatari counterpart in Tehran on Thursday in the latest mediation attempt, and President Trump wrote that he is “not trying to force Iran to the bargaining table” and likes the current position better, “with almost total control of the Hormuz Strait.” Daily transits remain at less than half their pre-war level.
Brent is near $95 and up about 7 percent on the week, WTI is lower this morning, and gold is giving back a hundred dollars on a week when oil rose 7 percent. The war premium has not been in the gold price since spring, and this week did not put it back.
Where This Leaves Us My outlook and positions are unchanged, and my profit-take levels remain in place.
Silver led the bounce and is leading the decline, the miners closed at the line and are set to open below it, FCX fell on the sector’s best day in weeks, and the dollar held the retracement it needed to hold and reversed on the data.
The hold camp needed one thing from the labor market. The labor market gave the hike camp its best number since March.
There’s a tremendous profit potential in all this, especially when you look at the situation from the long-term point of view, which is what we do in the Gold Trading Alerts. If you’re not ready to subscribe yet, I encourage you to sign up for our free gold newsletter.
Gold (XAU/USD) price retreats by about 0.80% on Friday, after registering losses of over 2% following the release of an upbeat US jobs report. This boosted the Greenback amid growing speculation that the Federal Reserve (Fed) could raise rates if inflation data next week comes hotter than expected. At the time of writing, XAU/USD trades at $4,437.
XAU/USD retreats as upbeat jobs data supports Dollar and September tightening risksNonfarm Payrolls in August crushed estimates of 56K, coming in at 162K, while July’s print was upward revised from -23K to 21K. At the same time, the Unemployment Rate was unchanged at 4.1%. The data reassured Fed officials that if needed, they can raise rates without harming the labor market.
Last week, Fed Chairman Kevin Warsh said the jobs market was “consistent with full employment” in a speech in Jackson Hole, in which he leaned hawkish, placing inflation as the foremost mission.
On Thursday, Fed Governor Christopher Waller said the Fed isn't rushing to raise rates if inflation cools, but a weak data release next week favors a rate increase at the FOMC's meeting.
Money markets have priced in a 61% chance for a rate increase by the Fed at the September meeting, up from 54% a day ago, as shown by Prime Terminal.
US Treasury yields, namely the 10-year T-note, rose to a high of 4.81% before erasing post-NFP gains and are down to 4.768%. The Greenback also gave back some of its gains, but it remains in positive territory, as indicated by the US Dollar Index (DXY).
The DXY, which measures the performance of the US Dollar against six currencies, is up 0.13% at 99.13.
Following the US NFP release, traders await next week’s producer and consumer inflation reports. If both show persistent disinflation, a rate hike might not be necessary.
Next week, the US economic docket highlight will be the release of the Producer Price Index (PPI), the Consumer Price Index (CPI), jobless claims data, the US Monthly Budget Statement and the University of Michigan Consumer Sentiment for September.
XAU/USD technical outlook: Gold consolidates within 100- and 200-day SMAsPrice action shows Gold is poised to trade sideways, capped on the downside by the 100-day Simple Moving Average (SMA) at $4,354 and on the upside by the 200-day SMA at $4,534.
The Relative Strength Index (RSI) is bullish, but in the short term it is trending downward toward the 50-neutral level, an indication that sellers are gaining momentum.
For a bearish continuation, XAU/USD must drop below the $4,400 mark, followed by the 100-day SMA. Below this area, the next target will be the day's low at $4,282.
For a bullish continuation, Gold must rise above $4,450. If buyers gain enough momentum, they could challenge $4,500 before targeting August’s monthly peak of $4,697.
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.
GBP/USD recovers part of its initial drop on Friday after stronger-than-expected United States (US) employment data briefly lifts the US Dollar (USD). The pair fell to an intraday low of 1.3482 immediately after the release before rebounding. At the time of writing, GBP/USD trades around 1.3512. Read More...
British Pound pulls back from session highs as BoE Bailey tames rate hike hopesThe British Pound (GBP) has retreated from session highs just below 1.3550 against the US Dollar (USD) during the London trading session, returning to levels near 1.3520 and turning negative on the daily chart. Bank of England (BoE) Governor Andrew Bailey called for flexibility on monetary policy, cooling hopes for an interest rate hike at September's monetary policy meeting. Read More...
GBP/USD Price Forecast: Bulls turn cautious as 1.3550 cap gains ahead of US NFPThe GBP/USD pair attracts some buyers for the second straight day, though it lacks follow-through and remains capped near mid-1.3500s through the early European session on Friday. Spot prices, for now, seem to have stalled the recovery from a nearly three-week low, touched on Wednesday, as traders keenly await the release of the US Nonfarm Payrolls (NFP). Read More...
The EUR/USD pair posted a modest comeback after falling in the last week of August, finishing the week just above the 1.1600 level. The US Dollar (USD) lost momentum and corrected lower on Monday, but overall it retained its recently regained strength amid persistent Middle East tensions and speculation that the Federal Reserve (Fed) will have to raise the benchmark interest rate in September. The USD resumed its advance on Friday, as upbeat employment data brought back demand.
United States employment and inflationIn between, the Greenback suffered a minor setback: Fed Governor Christopher Waller cooled the odds for a September rate hike on Thursday by saying that officials can “wait one meeting,” as long as there are no surprises from upcoming inflation data. He also noted that a 25-basis-point (bps) hike won’t bring inflation back to 2%.
The Bureau of Labor Statistics (BLS) will release the August Consumer Price Index CPI) and the Producer Price Index (PPI) for the same month in the upcoming days. Indeed, the CPI may not be the Fed’s favorite inflation gauge, but it's a reliable indicator of inflationary pressures and may define whether the Fed will hike or hold when it meets later this month.
The United States (US) published the August Nonfarm Payrolls (NFP) report on Friday, with upbeat figures backing the USD. The country added 162K new jobs in the month, much better than the anticipated 56K. The Unemployment rate held steady at 4.1% as expected. Furthermore, annual wage inflation, as measured by the change in Average Hourly Earnings, declined to 3.1% from 3.2%.
Other than that, the country published the August ISM Purchasing Managers’ Indexes (PMIs). The manufacturing index eased to 54.6 from 55.6 in July, while the Services PMI improved to 55.4 from 54.1 in the previous month. Within the manufacturing sector, inflation held steady as the Prices Paid Index printed at 71.1, matching the previous monthly reading. On services output, the Prices Paid Index edged higher to 72.6 from 70.3. A reading above 50 means that more businesses are paying higher prices than in the previous month, meaning inflationary pressures are being felt up and down across all businesses.
So, while Fed Governor Waller hinting at an on-hold September decision temporarily took its toll on the USD, the fact is that inflationary pressures are high enough for speculative interest to price in upcoming hikes. Rising energy prices amid the Middle East war are no doubt the main factor driving market concerns, with Crude Oil Prices regaining positive momentum after the US and Iran resumed hostilities in late August.
European Central Bank and Eurozone inflationInflation is not a problem exclusive to the US. Germany reported that the Harmonized Index of Consumer Prices (HICP) rose 2.9% YoY in August, according to preliminary estimates, higher than the previous 2.8% although better than the expected 3.1%. Furthermore, Retail Sales in the country fell 3.4% in July, worsening from a flat reading in July. The Eurozone HICP in the same period printed at 3.3% as expected, rising from the 2.9% posted in July.
The situation is similar; what’s different is how central banks are reacting to the news: the European Central Bank (ECB) has already hiked interest rates by 25 bps and is expected to deliver a similar rate increase when it meets on Wednesday. The move is largely priced in, which means the impact on the Euro could be limited.
The ECB faces yet another challenge: President Christine Lagarde, whose term as the ECB head ends in October 2027, may be due to an early exit. Market talks suggest she would step down before France’s Presidential elections either to participate in them or to allow President Emmanuel Macron to have a voice on Lagarde’s successor at the central bank. Lagarde refrained from confirming or denying such rumors, but left the door open for an early departure.
Other than the ECB decision, the European macroeconomic calendar will include the final estimates of the German and Eurozone HICP.
There’s yet another factor pushing central banks to raise rates. Government bond yields are on the loose amid inflation-related concerns and geopolitical tensions. Higher borrowing costs affect the country’s economy and add to the inflationary process. Central banks’ tools may not be enough to tame the chaos, but inaction from policymakers will make the picture even worse.
By the end of the week, however, US President Donald Trump, once again called for lower rates: “The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen!,” he posted on Truth Social, also threatening to stop trade with countries with higher rates.
Indeed, President Trump’s desire for lower rates is probably the main reason why Chair Kevin Warsh has refrained from hiking rates despite pledging multiple times to fight inflation. The Fed is between a rock and a hard place.
EUR/USD Technical Outlook:
From a technical point of view, the daily chart shows EUR/USD trading with a neutral-to-slightly bullish tone as it consolidates between nearby moving averages. The pair is trading above the 20-day Simple Moving Average (SMA) at 1.1608 and the 100-day SMA at 1.1564, which together suggest a tentative underlying bid, while it remains capped by the 200-day SMA at 1.1634. Momentum fades, with the 14-day Relative Strength Index (RSI) indicator easing at around 56 and the 14-period Momentum indicator nearing its midline from above, suggesting buyers are losing interest.
On the weekly chart, EUR/USD trades above the 20-, 100-, and 200-week SMAs, with the shortest SMA at 1.1562 providing immediate dynamic support. The broader price placement comfortably above the 100-week SMA at 1.1337 and the 200-week SMA at 1.1075 suggests the medium-term uptrend remains intact, yet technical indicators, holding around their midlines and directionless, suggest investors are unwilling to take stronger positions.
On the topside, immediate resistance is at the 200-day SMA around 1.1634; a daily close above this barrier would open the way for a retest of recent highs in the 1.1710 region, ahead of the 1.1800 threshold. On the downside, initial support is seen at the 20-day SMA near 1.1608, with the 100-day SMA at 1.1564 providing a deeper cushion if the pair slips back. A break beneath this latter level would likely open the door for a steeper decline, with 1.1470 as the next level to watch.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator ECB Monetary Policy Statement At each of the European Central Bank’s (ECB) eight governing council meetings, the ECB releases a short statement explaining its monetary policy decision, in light of its goal of meeting its inflation target. The statement may influence the volatility of the Euro (EUR) and determine a short-term positive or negative trend. A hawkish view is considered bullish for EUR, whereas a dovish view is considered bearish.
After declining sharply in the first half of the week, Gold (XAU/USD) managed to erase its losses, reflecting the changes in the market pricing of the Federal Reserve’s (Fed) possible interest rate decision at the next meeting. Investors will scrutinize August inflation data from the United States (US), while the precious metal’s near-term technical outlook suggests that sellers remain hesitant.
Gold recovers as investors struggle to decide on the Fed’s next moveGold remained under bearish pressure in the first half of the week as Fed Chair Kevin Warsh’s hawkish comments at the Jackson Hole Symposium revived expectations for a September Fed rate hike. Meanwhile, the deepening crisis in the Middle East further weighed on the yellow metal and dragged it to its lowest level since early August, below $4,300 by early Wednesday.
The US and Iran exchanged military strikes for the first time in weeks over the weekend. The US forces attacked two rocket launchers on Iran's Larak Island, and Iran has targeted US bases in Jordan and the United Arab Emirates (UAE) in response. During the American trading hours on Tuesday, news of the US military carrying out strikes that Tehran claimed killed civilians pointed to a further escalation of the military conflict. Following the attack, US President Donald Trump wrote on Truth Social that Iran “will be hit again at a much harder and higher level, but it will not be the biggest attack of them all, that is waiting in the wings.” In response, the Islamic Revolutionary Guard Corps said it attacked two US military bases in the United Arab Emirates (UAE).
In the second half of the day on Wednesday, XAU/USD gathered recovery momentum and closed the day in positive territory. The weaker-than-expected private sector employment data from the US weighed on the US Dollar (USD), while a sharp decline seen in the USD/JPY pair hinted at a possible currency market intervention.
The USD came under renewed selling pressure on Thursday and allowed XAU/USD to extend its rebound into a second consecutive day.
Fed Governor Christopher Waller adopted a cautious stance on policy tightening and caused the USD to lose interest. The key remark that Waller is inclined to support holding the policy rate steady in September if August inflation shows continued progress, but would consider a hike if the data come in hot, underscored a finely balanced, data-dependent reaction function that suggests a rate hike at the next meeting is not a done deal. His acknowledgment of “finally” seeing disinflation alongside still-elevated inflation, and a low tolerance for renewed price pressures, further reaffirmed his reluctance on a possible rate hike. Following Waller’s speech, the CME FedWatch Tool’s probability of a 25 basis points rate hike at the upcoming meeting declined to 50% from about 63% earlier in the week. In turn, Gold climbed above $4,500 late Thursday, erasing its weekly losses in the process.
Commenting on Gold’s price action, analysts at OCBC noted that Gold “rose more than 2% towards $4,510 intra-session high as Waller’s comments prompted markets to pare September Fed hike expectations, pulling UST yields and the USD lower.” They note that this latest move “partly reverses the sharp sell-off earlier in the week, when Warsh’s Jackson Hole remarks and the rise in global yields had weighed on precious metals.” OCBC adds that “geopolitical tensions remain supportive at the margin, though higher Oil prices are a two-sided risk if they feed back into inflation expectations and yields.”
The data from the US showed on Friday that Nonfarm Payrolls increased by 162K in August. This print surpassed the market expectation for an increase of 56K by a wide margin and boosted the USD with the immediate reaction. Other details of the report showed that the total Nonfarm Payroll employment for June and July was revised up by 11K and 44K, respectively, while the Unemployment Rate remained unchanged at 4.1%. Following the impressive labor market report, Gold failed to build on its recovery heading into the weekend.
Gold investors await critical US inflation reportThe Fed will be in the blackout period until the September 15-16 policy meeting. Hence, the US Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) data on Friday will be the final, and arguably the most important, clue on whether the US central bank will opt for a rate hike.
Fed Governor Waller said that “continued progress toward our 2% goal” is needed for him to vote in favor of a policy hold and explained that his decision will be “influenced by what we learn about August inflation." Although the 2% goal Waller mentioned relates to the annual core Personal Consumption Expenditures (PCE) Price Index, a reading below July’s 0.2% in the monthly core CPI could be seen as a confirmation of “progress” and trigger a USD selloff with the immediate reaction. In this scenario, XAU/USD is likely to gather bullish momentum heading into the Fed meeting. Conversely, a monthly core CPI reading at or above 0.2% could feed into expectations for a rate hike and weigh heavily on Gold.
In short, Gold is facing a two-way risk with the US inflation data due on Friday, given markets currently see the odds of a rate hike at about 60%, thanks to the strong August jobs data.
According to strategists at TD Securities, the backdrop for bullion has become more supportive, with the bank emphasizing that “we do not anticipate material downside for the yellow metal as the landscape for precious metals has improved amid a renewed Dollar debasement theme, while Fed hikes remain far from certain.” This combination of a softer US Dollar narrative and lingering uncertainty over the Fed’s policy path is seen as helping to anchor Gold prices despite recent volatility.
FXStreet Economic CalendarGold technical analysis: Bullish bias holds but lacks strengthThe Relative Strength Index (RSI) indicator on the daily chart managed to recover above the neutral line at 50 after falling below that level earlier in the week. Additionally, Gold reclaimed the 100-day Simple Moving Average (SMA), currently located near $4,350, despite making a daily close below it. Still, the daily RSI remains flat above 50 and Gold is yet to clear the 200-day SMA at $4,535, suggesting that buyers are still reluctant to bet on a steady uptrend.
On the upside, $4,510-$4,535 (Fibonacci 38.2% retracement of the March-August downtrend, 200-day SMA) aligns as a key resistance area. In case Gold stabilizes above this region and confirms it as support, $4,675-$4,700 (Fibonacci 50% retracement of the March-August downtrend, round level) could be seen as the next bullish target before $4,850 (Fibonacci 61.8% retracement).
Looking south, the first important support level could be spotted at $4,350 (100-day SMA), followed by $4,300-$4,295 (static level, Fibonacci 23.6% retracement) and $4,240 (50-day SMA).
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.
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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.
Gold fell almost $100 on Friday following surprise surge in US nonfarm payrolls that eased worries of US policymakers and boosted expectations of rate hike on Sep 16 policy meeting.
Upbeat US labor data pushed the metal’s price down to over 2.5% and signals that gold would register the second consecutive weekly closing in red.
The fresh drop also weakened technical picture on daily chart as 14-d momentum is pressuring the centreline and south-heading RSI is entering neutrality zone (50), although MAs remain in mixed setup (30/100 bull-cross vs 10/200 death-cross) signaling that further action to the downside is still needed to verify developing negative signals.
Close below previous significant supports at $4400 zone will be minimum requirement, with extension below daily Kijun-sen ($4358) to strengthen negative structure and expose $4319 (50% retracement of $3942/$4697) which contained several attacks so far, and $4268 (daily cloud top) in extension.
Repeated close below daily Tenkan-sen ($4489) is needed to keep near-term bias with bears.
Markets shift focus to US Aug inflation data (due next Friday) which will provide significant information to the central bank ahead of policy meeting.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
Key Points:Metals and miners bottomed mid-year and are undergoing a standard pullback before resuming their uptrends.Friday’s better-than-expected employment report will likely extend recent weakness, with the decline potentially accelerating if next week’s CPI print comes in hotter than expected.I outline preliminary suppoI outline preliminary support levels below. I’m particularly intrigued by the bullish setups developing in gold and silver miners, as I believe they are positioned to outperform into next year. rt levels below. I’m particularly intrigued by the bullish setups developing in gold and silver miners, as I believe they are positioned to outperform into next year.
In this article:Gold
-1.11%
Gold ForecastSilver
-1.36%
Silver ForecastGold Gold bottomed mid-year, as forecasted, and prices are undergoing a mid-cycle correction. Friday’s better-than-expected payroll numbers will likely keep downside pressure on metals, which could intensify if next week’s CPI print comes in hotter than expected. Ideal support for this pullback is around $4,150 (+/- $50).
Silver Silver bottomed in July within our target box, and prices are now undergoing a standard 1–2 week pullback. Look for support around $60.00, although a brief dip below that level is possible if CPI comes in well above expectations.
Platinum Platinum is poised to dip to support between $1,650 and $1,700 as we head into the September 16 Fed announcement. Once the correction is complete, the uptrend should resume, with new all-time highs expected next year.
GDX Miners are setting up for a textbook three-wave pullback into key support at the crossover of the 50- and 200-day moving averages, just above $90.00. We expect miners to make new all-time highs well ahead of gold, continuing to lead the metals complex higher from here.
GDXJ Junior gold miners have a similarly bullish setup, with prices pulling back toward key support at the crossover of the 50- and 200-day moving averages.
SILJ Silver juniors could test support around $29.00 (+/- $1.00) to complete this pullback into mid-month. They, too, should reach new all-time highs well ahead of silver, as they are expected to outperform going forward.
Bitcoin Bitcoin surged 25% in August, surprising the bears. Near-term prices may have reached an interim cycle peak on September 3rd. A close below $75,000 would support renewed weakness into mid-November, potentially pushing prices to fresh lows before the four-year cycle officially bottoms in Q4.
Conclusion After a 6-month correction, the uptrend in precious metals is resuming. Prices will likely correct a bit further into the September 16th Fed announcement, with target levels subject to change as new information emerges, particularly next week’s CPI report.
Overall, we view this as a brief pullback within a larger uptrend. We expect new all-time highs next year, with gold potentially targeting $7,000+. For more price predictions and daily market commentary, consider subscribing at www.GoldPredict.com.
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50-Day EMA Support and Labor Day Liquidity The market right now finds itself just above the crucial 50-day EMA, and whether or not that holds as support, we’ll have to wait and see. My suspicion is there is probably somewhat of a lack of volume in the US right now anyways. It’s not uncommon for people to take 4-day holidays for Labor Day weekend, so couple that with a jobs number that caught everybody off guard, it wouldn’t surprise me to see a real reaction on Monday, heading into Tuesday once traders come back to work in the Asian session, and then probably build up a little bit as we go into New York on Tuesday.
As things stand right now, not much has changed. We’re just in the same consolidation we were in just a couple of weeks ago. Longer term, I still like gold, but I recognize that higher rates for longer is a recipe for trouble.
Gold fell almost $100 on Friday following surprise surge in US nonfarm payrolls that eased worries of US policymakers and boosted expectations of rate hike on Sep 16 policy meeting.
Upbeat US labor data pushed the metal’s price down to over 2.5% and signals that gold would register the second consecutive weekly closing in red.
The fresh drop also weakened technical picture on daily chart as 14-d momentum is pressuring the centreline and south-heading RSI is entering neutrality zone (50), although MAs remain in mixed setup (30/100 bull-cross vs 10/200 death-cross) signaling that further action to the downside is still needed to verify developing negative signals.
Close below previous significant supports at $4400 zone will be minimum requirement, with extension below daily Kijun-sen ($4358) to strengthen negative structure and expose $4319 (50% retracement of $3942/$4697) which contained several attacks so far, and $4268 (daily cloud top) in extension.
Repeated close below daily Tenkan-sen ($4489) is needed to keep near-term bias with bears.
Markets shift focus to US Aug inflation data (due next Friday) which will provide significant information to the central bank ahead of policy meeting.
Well, that was quite a straightforward initial reaction in the market. But once the dust settled, we saw a quick return to pre-NFP levels on many markets, as traders realised it is the CPI – due next week – that matter more right now. Meanwhile, Trump has bizarrely suggested that the Fed should CUT rates because of the strong jobs numbers. That’s not going to happen, rest assured. The dollar bulls could re-emerge later especially against currencies where there is no yield advantage. Given the shenanigans in the Japanese yen market, I think the USD/CHF is the pair to keep an eye on as it could rise with the US yield advantage growing post NFP.
Source: TradingView.com
Anyway, the US jobs report came out much stronger than expected, for a change. And good news was bad news, I suppose, as the big beat sent rate-hike expectations soaring, causing stocks, gold and crypto to take a bit of a quick, but mini dump. Soon after, though, those moves reversed, and in some cases entirely. The bond market also fell, yields rose, and markets are now expecting the Fed to hike interest rates in September, with the probability rising to 59% from 49% before the data was released. Let’s see how the markets will take it from here on, now that we have had the usual spike and return to pre-jobs levels.
How good was the NFP data?
As far as the data is concerned, the headline number was quite strong at 162,000, compared with just 56,000 expected. That was a much better performance compared with the previous month.
Speaking of the previous month, the -23,000 figure was revised to +21,000. The net revision for the prior two months was +55,000. When you consider the revisions alongside the big beat, it was a strong number overall, and markets reacted in the way you would have expected - at least initially anyway.
The unemployment rate, meanwhile, stayed the same at 4.1%, so there were no surprises there.
Average hourly earnings came in at 0.3% month over month, again in line with expectations. However, the year-over-year rate beat expectations, coming in at 3.1% compared with 3% expected.
So that’s another sign that inflation isn’t weakening, with wage growth remaining relatively firm.
Focus turns to CPI
The focus will now turn to the US CPI report due next week. And given Fed Governor Waller’s suggestion yesterday that he will wait for the CPI data before deciding whether to vote for a hike or hold, it looks like many traders will be looking forward to that CPI release. Hence, the post-NFP reaction quickly faded as traders took profit.
Anyway, CPI is the last major piece of data before the Fed meets again in a couple of weeks’ time.
For now, it looks like a rate hike could be on the way, with the market increasing expectations of such an outcome.
What to expect from markets next?
So, the key question now is: will we see some weakness following the jobs report for equity and other markets sensitive to rate expectations?
Well, so far, the reaction has been interesting. US index futures were slightly higher before the data release, but they turned negative after the jobs report, not by a huge degree, but there was a bit of a pullback. However, the initial moves unwound quite quickly.
Now, it all depends on whether the market thinks a Fed hike is definitely on the cards. And to some degree, a lot will also depend on the price of oil, which has weakened today but has been going up over the last few days.
So, keep an eye on oil prices, as they could have an important impact on market sentiment.
As far as the US dollar is concerned, the initial reaction was a positive one, as you would have expected.
Interestingly, though, the USD/JPY remained heavy. It couldn’t move much above 156.00 initially, and after the data was released, it quickly sold off, suggesting there was perhaps some continuing intervention in that market.
Elsewhere, EUR/USD fell below the 1.1600 handle, reaching a low so far of around 1.1580 to 1.1585, before bouncing back from there at the time of writing to reach near pre-data levels of 1.1615. Gold also fell and the bounced off its low.
The question now is whether we will see fresh losses for assets like gold, indices and bitcoin, or whether we’ll see the return of the US dollar debasement trade, where the dollar sells off despite stronger US economic data. So far, it has been the latter, but the US session has just started.
In a nutshell
So far, it’s been a fairly mild reaction to the strong jobs report. The initial reaction wasn’t too significant, suggesting that markets are perhaps waiting for next week’s CPI release before deciding whether to punish the dollar or buy it more decisively. The jury is still out.
Daily price chart for Silver futures showing price at 65.800, resting right along the 200 EMA (65.660) and the 50 EMA (65.200). Source: TradingView The silver market has fallen pretty significantly during the trading session on Friday as the jobs number came out well over anticipated results. The expected number was right around 55,000 jobs added last month in America, ended up being 162,000, a huge miss, and to the upside. So that has traders worried about the potential of inflation, higher interest rates coming out of the Federal Reserve, and that typically is bad for silver. That explains part of what we’re seeing here.
Moving Average Support and Labor Day Volatility Ultimately though, it’s a market that is still well within the range of normalcy right around the 200-day EMA, as well as the 50-day EMA. So, as poor as the reaction was initially, at least so far, it doesn’t seem to be irreversible damage.
EUR/USD slides after strong US jobs data as USD/JPY tests a major swing low and USD/CAD surges following a sharp Canadian employment miss.
In this article:EUR/USD
-0.12%
EUR/USD ForecastUSD/JPY
+0.13%
USD/JPY ForecastUSD/CAD
+0.45%
USD/CAD Forecast
EUR/USD Technical Analysis
EUR/USD price chart showing price at 1.16006, trading below the 50 EMA (1.16133) and the 200 EMA (1.16155). Source: TradingView The euro has plunged after the much stronger-than-anticipated jobs number coming out of the United States, sending it all the way down to basically 1.1585 or so before bouncing. I think we now have a range-bound market that doesn’t really know what to do. I currently have this range between yesterday’s point where I said I would be a seller at 1.1640 and the bottom here at 1.1580.
I do favor, I suppose, the downside from a longer-term standpoint still, but this is a market that, at least in the short term, probably is going to bounce around. Keep in mind Monday is a holiday in the United States.
USD/JPY Technical Analysis
USD/JPY price chart showing price at 155.732, trading below the 50 EMA (156.968) and the 200 EMA (158.518). Source: TradingView The dollar-yen is suddenly a lot more interesting to me. This is a major swing low that we find ourselves testing again. It was interesting that the initial reaction was to go to the upside. Makes sense: interest rate spike. I think there’s a real chance of a bounce here, but having said that, there’s a lot of fear out there about the Bank of Japan. I think longer term, the Bank of Japan has very limited options, but it is an interesting turnaround.
So, I’ll be watching this today to see how it plays out. We can see that it is getting pretty aggressive. I think somebody’s trying to keep this from popping higher based on the action that I see right now. That being said, if we take out the top of this candlestick, that’d be pretty bullish.
USD/CAD Technical Analysis USD/CAD price chart showing price at 1.38654, bouncing sharply above the 200 EMA (1.38508). Source: TradingView The dollar against the Canadian dollar is just screaming higher. Not a huge surprise; there are a lot of things working against Canada right now, not the least of which is the United States. Canadian employment came in at -41,000 as opposed to the supposed addition of 15,000, so that’s a huge miss for Canada; it’s a huge gain for the United States. The trade war going on at the same time, of course, has major ramifications as well. I am bullish, looking at short-term pullbacks as buying opportunities.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.
GBP/USD recovers part of its initial drop on Friday after stronger-than-expected United States (US) employment data briefly lifts the US Dollar (USD). The pair fell to an intraday low of 1.3482 immediately after the release before rebounding. At the time of writing, GBP/USD trades around 1.3512.
US Nonfarm Payrolls (NFP) increased by 162K in August, almost three times the market forecast of 56K. July’s reading was revised to a gain of 21K from the previously reported 23K decline, while the Unemployment Rate held steady at 4.1%.
The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.11 after rising as high as 99.39 in response to the employment report, but holds above the more than one-week low of 98.83 touched on Thursday.
The short-lived decline in GBP/USD suggests traders are not fully convinced that the stronger employment figures will be enough to secure a Federal Reserve (Fed) rate hike this month. Recent comments from Fed officials indicate that policymakers are more focused on restoring price stability, making next week’s Consumer Price Index (CPI) and Producer Price Index (PPI) reports crucial for the September decision.
Recent inflation figures have shown some moderation. Fed Governor Christopher Waller said on Thursday that he is “finally seeing some signs of disinflation” and that the current interest-rate setting could bring inflation back to the Fed’s 2% target. However, Waller added that he would consider a September rate hike if the August inflation data comes in hot.
The strong jobs report has nevertheless pushed rate hike expectations higher. According to the CME FedWatch Tool, markets now see around a 60% chance of a 25-basis-point (bps) increase at the September 15-16 meeting, up from roughly 50% before the NFP release.
On the UK side, hawkish remarks from Bank of England (BoE) Chief Economist Huw Pill provide some support to the Pound Sterling (GBP). Pill reiterated his preference for raising the Bank Rate to 4%, although markets largely expect the BoE to leave rates unchanged at 3.75% later this month.
Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
ING’s Warren Patterson and Ewa Manthey highlight that central banks, led by China and Poland, continued net Gold purchases in July, supporting structural demand despite a slower pace than last year. They add that Gold prices rose over 2% after weaker US employment data and comments from Federal Reserve official Christopher Waller suggesting openness to holding rates steady if inflation behaves.
Official demand and Fed rhetoric support"Central banks continued to add to gold reserves in July, reporting net purchases of 23 tonnes, according to World Gold Council data. Emerging market central banks remained the main buyers, led by China and Poland. China's central bank extended its buying streak to 21 consecutive months, adding 20 tonnes."
"Although central bank buying has slowed compared to a year ago, official sector demand continues to provide support for the gold market. Ongoing reserve diversification efforts among emerging economies should help sustain structural demand, even if purchases moderate from recent highs."
"Gold prices rose more than 2% on Thursday following a weaker-than-expected ADP employment report on Wednesday. Comments from US Federal Reserve official Christopher Waller, suggesting he is open to keeping rates on hold at the next FOMC meeting (assuming no surprises on the inflation front), provided an additional boost."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
EUR/USD comes under selling pressure on Friday as the US Dollar (USD) strengthens following the release of the upbeat United States (US) employment report. At the time of writing, the pair trades around 1.1605, down roughly 0.18% on the day, after retreating from an intraday high of 1.1633.
US Nonfarm Payrolls (NFP) rose by 162K in August, comfortably beating expectations for a 56K increase. July’s reading was revised sharply higher to a gain of 21K from the previously reported 23K decline, while June payrolls were revised to 31K from 20K. The Unemployment Rate held steady at 4.1%, as expected.
The US Dollar strengthens following the employment report, while US Treasury yields also move higher across the curve. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.20 after falling to a more-than-one-week low of 98.83 on Thursday. Meanwhile, the benchmark 10-year Treasury yield retests 4.81%, its highest level since October 2023, touched earlier this week.
The stronger employment figures revive expectations that the Federal Reserve (Fed) could raise interest rates at its September 15-16 meeting. Still, the jobs report may not settle the September policy debate on its own. Next week’s Consumer Price Index (CPI) and Producer Price Index (PPI) data will give policymakers a clearer picture of inflation before the Fed announces its decision.
On the Euro (EUR) side, weaker-than-expected Eurozone Retail Sales add some pressure. However, expectations that the European Central Bank (ECB) will raise interest rates at its September 9-10 meeting could limit the Euro’s losses. The ECB is widely expected to deliver a second rate hike this year as higher Oil prices amid tensions in the Middle East keep inflation risks elevated.
US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.18%0.15%0.09%0.42%0.10%0.11%0.44%EUR-0.18%-0.03%-0.09%0.27%-0.09%-0.05%0.26%GBP-0.15%0.03%-0.04%0.29%-0.05%-0.02%0.28%JPY-0.09%0.09%0.04%0.34%-0.01%0.03%0.33%CAD-0.42%-0.27%-0.29%-0.34%-0.35%-0.32%-0.01%AUD-0.10%0.09%0.05%0.00%0.35%0.03%0.33%NZD-0.11%0.05%0.02%-0.03%0.32%-0.03%0.30%CHF-0.44%-0.26%-0.28%-0.33%0.00%-0.33%-0.30% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Silver (XAG/USD) consolidates with marginal losses on Friday following back-to-back daily gains, as traders avoid taking large positions ahead of the US Nonfarm Payrolls (NFP) report. The 100-day Simple Moving Average (SMA) near $67 caps the immediate upside, while momentum indicators point to limited bullish strength. At the time of writing, XAG/USD trades around $66.80.
The US economy is expected to add 56K jobs in August after shedding 23K in July, while the Unemployment Rate is forecast to hold at 4.1%. The US economy is expected to add 56K jobs in August after shedding 23K in July, while the Unemployment Rate is forecast to hold at 4.1%.
The figures are likely to play a key role in shaping the Federal Reserve’s (Fed) decision at its September 15-16 monetary policy meeting, with the CME FedWatch Tool currently showing around a 50% chance of a 25-basis-point rate hike.
A stronger-than-expected NFP could keep XAG/USD below the 100-day SMA, while a disappointing result may clear the way for a bullish breakout.
Technical analysis
XAG/USD holds above the 50-day Simple Moving Average (SMA) at $62, but remains below the 100-day SMA and the 200-day SMA, leaving the near-term bias broadly neutral with a slight topside cap.
The Relative Strength Index (RSI) on the daily chart around 55 hints at modest bullish momentum, yet the Average Directional Index (ADX) near 17 suggests a weak underlying trend.
Meanwhile, the Moving Average Convergence Divergence (MACD) remains marginally negative, although the fading red histogram bars indicate that bearish momentum is easing, reinforcing the idea of a consolidation phase rather than a clear directional move.
On the downside, the 50-day SMA near $62 and the psychological $60 mark form a strong support zone, followed by a more robust horizontal floor around $55.
On the topside, immediate resistance emerges at the 100-day SMA near $67, followed by the 200-day SMA around $72. A break above these levels could open the door towards the $80 mark.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
EUR/USD rose to 1.1627. The US dollar fell sharply yesterday and remains under pressure today. Pressure on the US currency intensified after a Federal Reserve official made more dovish comments, prompting markets to scale back expectations for a September rate hike.
Federal Reserve Governor Christopher Waller stated that he would support keeping rates unchanged if price pressures continue to ease. According to him, the next policy decision will largely depend on August inflation data, due for release next week.
Markets now put the probability of a September rate hike at approximately 50%, down from around 63% the previous day. Friday’s US labour market report for August will provide another important signal and could significantly shift market expectations for Fed policy.
Another factor weighing on the dollar has been the yen’s sharp appreciation. Investors are monitoring the risk of currency intervention while also assessing the likelihood of more aggressive Bank of Japan policy tightening before year-end.
Technical Analysis
On the H4 chart of EUR/USD, the market is moving lower towards 1.1611. A consolidation range is currently forming around this level. A move higher towards 1.1657 is possible, followed by a further decline to 1.1555. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downward, indicating continued bearish momentum and scope for further downside.
On the H1 chart, the market has completed another downward move to 1.1625. A consolidation range is currently forming around this level. A move lower towards 1.1611 is expected today, followed by a rebound to 1.1657. The Stochastic oscillator supports this scenario, with its signal line below 50 and pointing firmly downward towards 20.
Conclusion EUR/USD has gained ground as the dollar retreats following dovish comments from Fed Governor Christopher Waller, who signalled a preference for keeping rates unchanged if inflation continues to ease. The implied probability of a September rate hike has fallen from 63% to 50%, with markets now focused on Friday’s US jobs report and next week’s inflation data for further guidance. The sharp appreciation of the yen has also contributed to dollar weakness, as investors weigh intervention risks and the prospect of more aggressive BoJ tightening. Technically, the pair may see a near-term bounce towards 1.1657 before resuming its broader bearish trend towards 1.1555. The US labour market report will be the key catalyst for the next directional move.
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.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
EUR/USD rose to 1.1627. The US dollar fell sharply yesterday and remains under pressure today. Pressure on the US currency intensified after a Federal Reserve official made more dovish comments, prompting markets to scale back expectations for a September rate hike.
Federal Reserve Governor Christopher Waller stated that he would support keeping rates unchanged if price pressures continue to ease. According to him, the next policy decision will largely depend on August inflation data, due for release next week.
Markets now put the probability of a September rate hike at approximately 50%, down from around 63% the previous day. Friday’s US labour market report for August will provide another important signal and could significantly shift market expectations for Fed policy.
Another factor weighing on the dollar has been the yen’s sharp appreciation. Investors are monitoring the risk of currency intervention while also assessing the likelihood of more aggressive Bank of Japan policy tightening before year-end.
Technical analysis
On the H4 chart of EUR/USD, the market is moving lower towards 1.1611. A consolidation range is currently forming around this level. A move higher towards 1.1657 is possible, followed by a further decline to 1.1555. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downward, indicating continued bearish momentum and scope for further downside.
On the H1 chart, the market has completed another downward move to 1.1625. A consolidation range is currently forming around this level. A move lower towards 1.1611 is expected today, followed by a rebound to 1.1657. The Stochastic oscillator supports this scenario, with its signal line below 50 and pointing firmly downward towards 20.
ConclusionEUR/USD has gained ground as the dollar retreats following dovish comments from Fed Governor Christopher Waller, who signalled a preference for keeping rates unchanged if inflation continues to ease. The implied probability of a September rate hike has fallen from 63% to 50%, with markets now focused on Friday’s US jobs report and next week’s inflation data for further guidance. The sharp appreciation of the yen has also contributed to dollar weakness, as investors weigh intervention risks and the prospect of more aggressive BoJ tightening. Technically, the pair may see a near-term bounce towards 1.1657 before resuming its broader bearish trend towards 1.1555. The US labour market report will be the key catalyst for the next directional move.
Gold (XAU/USD) moves quietly on Friday after two straight days of gains, as traders appear reluctant to take fresh positions ahead of the US Nonfarm Payrolls (NFP) report at 12:30 GMT. The metal briefly climbed above $4,500 on Thursday, rising nearly 2% on the back of a softer US Dollar (USD), a modest pullback in Treasury yields and less hawkish remarks from Federal Reserve (Fed) Governor Christopher Waller. At the time of writing, XAU/USD trades around $4,472.
Meanwhile, the US Dollar also steadies after losing about 0.55% on Thursday and slipping below 99.00 to its lowest level in more than a week. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.11.
The US economy is expected to add 56K jobs in August after shedding 23K in July, while the Unemployment Rate is forecast to hold at 4.1%. Markets will also closely watch wage growth and any revisions to the July payrolls figure, after May and June employment gains were revised down by a combined 103K in the previous report.
Fed Governor Waller said on Thursday he is “finally seeing some signs of disinflation,” adding that the “current rate setting could get us back to 2% inflation.” He also said the “rate decision in September hinges on August inflation” and that “if August inflation data comes in hot, I would consider a rate hike.”
His remarks prompted traders to pare back rate hike bets for the upcoming September 15-16 meeting. According to the CME FedWatch Tool, the odds of a 25-basis-point (bps) rate increase now stand at around 50%, down from roughly 63% before Waller spoke.
A stronger-than-expected NFP report could revive Fed rate hike bets and lift the US Dollar and Treasury yields, weighing on the non-yielding metal. Conversely, another weak payroll reading could strengthen the case for the Fed to keep rates unchanged, helping Gold reclaim the $4,500 mark.
Analysts at OCBC remain “constructive” on Gold, but caution that the near-term path is likely to stay “highly sensitive to Fed repricing.” They highlight that “payrolls tonight may drive the next move in yields and the USD,” while “next week’s CPI and PPI should be more decisive in determining whether the recent disinflation trend is sufficient to keep the Fed on hold.” OCBC experts also note that “geopolitical tensions remain supportive at the margin,” but warn that “higher oil prices are a two-sided risk if they feed back into inflation expectations and yields.”
Technical analysis: Buyers eye 200-day SMA
XAU/USD holds above the 100-day Simple Moving Average (SMA) at roughly $4,354 while remaining capped beneath the 200-day SMA near $4,534, leaving the broader tone neutral and consolidative.
Price has reclaimed the 38.2% Fibonacci retracement at about $4,448, turning it into immediate support, yet it has not challenged the 23.6% retracement at $4,544 overhead.
The Relative Strength Index (RSI) on the daily chart around 55 suggests mildly positive momentum, but the Moving Average Convergence Divergence (MACD) remains below zero, hinting that recovery attempts still face supply near the 200-day average.
On the downside, initial support is seen at the 38.2% Fibonacci level around $4,448, followed by the 50.0% retracement at $4,371 and the 100-day SMA near $4,354. A deeper slide would expose the 61.8% retracement at $4,293 and the lower Fibonacci steps at $4,183 and $4,042.
On the topside, bulls need to clear the 200-day SMA near $4,534, with the 23.6% retracement at $4,544 acting as a subsequent cap. A sustained break above these levels would open the path toward the prior swing high area around $4,700.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Nonfarm Payrolls FAQs Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
The Australian Dollar (AUD) trades marginally higher at around 0.7203 against the US Dollar (USD) during the European trading session on Friday. The Aussie pair is broadly firm as the US Dollar remains under pressure, with traders reassessing Federal Reserve (Fed) interest rate expectations.
Dollar softens as Fed hike odds retreatAnalysts at MUFG observe that the US rates market has scaled back expectations for near-term tightening, with pricing now implying “close to a 50:50 probability of a Fed rate hike this month” compared with “closer to a 70% probability of a hike at the start of this month.” They attribute this “dovish repricing of Fed rate hike expectations in recent days” to “the cautious comments from the Fed’s leadership over the need for rate hikes.”
In particular, MUFG highlights remarks from New York Fed President John Williams, who said recent inflation data has been “encouraging” and that he sees “the trend in inflation moving slowly down as some of the effects of the tariffs move into the rearview mirror.” Williams also stressed that the Fed is “collecting a lot of data now, and will reassess whether rates remain in a good place for the economy.”
Meanwhile, investors await the United States (US) Nonfarm Payrolls (NFP) data for August, which will be published at 12:30 GMT.
Market experts believe that encouraging comments on inflation from Fed’s Williams has underscored the upcoming inflation data as key driver of monetary policy expectations over the official employment report.
MUFG said that it expects the upcoming labour market release to play a more limited role in shaping policy expectations against the backdrop of Fed Williams’s comments, stating: “we expect today’s nonfarm payrolls report to prove less important for Fed rate hike expectations than next week’s CPI report,” a dynamic they see as “helping to dampen the impact on US rates and the US dollar.”
AUD/USD Technical Analysis
In the daily chart, AUD/USD trades at 0.7203, maintaining a bullish near-term bias as spot holds above the 20-day exponential moving average (EMA) at 0.7136. The pair extends its advance after reclaiming this dynamic support, while the Relative Strength Index (RSI) at about 66 stays in bullish territory, suggesting buyers retain control even as conditions approach overbought.
On the downside, immediate support is seen at the 0.7200 area, with the 20-day EMA at 0.7136 acting as a secondary floor that would need to give way to signal a deeper correction. Looking up, the pair aims to revisit the four-year high near 0.7280.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Williams flags strong economy behind higher yields as inflation trend coolsFed's Williams delivered a mildly hawkish-leaning message, with a 6/10 FXS Speechtracker score just above the 5.9/10 historical average, emphasizing that rising yields reflect a strong economy and robust outlook rather than worsening inflation expectations. The focus on tariffs and Middle East conflict as key drivers of above-target inflation, alongside contained expectations and a trend toward lower inflation with a stable labor market, signals confidence that the Fed can stay data-dependent while keeping 2% as the clear priority.
The FXS Fed Sentiment Index slipped by 1.42 points to 127.44, indicating a modest pullback in perceived hawkishness despite the still-elevated stance. With the index firmly above the 100 neutral line, markets continue to see policy as hawkish overall, but the slight decline suggests some easing in the perceived urgency for additional tightening relative to recent readings captured by the FXS Speechtracker.
The NFP arrives today with the odds of a rate hike from the Fed slipping back to around 50% and correspondingly the dollar sold off again yesterday. That was due to comments from Fed's Waller who said next week's CPI could determine whether he votes for a hike or hold.
Gold (XAU/USD) trades flat at the $4,470 area on Friday, as the previous two days’ rebound from $4,280 failed to find acceptance above the $4,500 psychological area. US Treasury yields have pulled back from highs as markets reassess the odds for an interest rate in September, but investors remain wary of selling the US Dollar ahead of the release of US Nonfarm Payrolls (NFP) data, due later on the day.
Analysts at OCBC note that gold “rose more than 2% towards $4,510 intra-session high as Waller’s comments prompted markets to pare September Federal Reserve (Fed) hike expectations, pulling UST yields and the USD lower.”
The bank remains constructive on the pair, although they warn that "near-term direction is likely to stay highly sensitive to Fed repricing,” with NFP data seen as a potential driver of yields and the USD, while “next week’s CPI and PPI should be more decisive in determining whether the recent disinflation trend is sufficient to keep the Fed on hold.”
Technical Analysis: Gold nears key resistance at the 200-day SMA
XAU/USD trades at $4,464, still to confirm above a previous support area around $4.470 (August 20 low). Momentum indicators in the daily chart fail to provide a clear view, as the Relative Strength Index (RSI) struggles to take off from the key 50 line, while the Moving Average Convergence Divergence (MACD), still in negative territory, suggests that downside pressure is moderating, rather than fully reversing.
Gold bulls face a string of resistances at the mentioned $4,470 area, the psychological $4,500 level, and especially the 200-day Simple Moving Average (SMA), now at $4,534. This is a very popular indicator for FX traders, and a confirmation above that line would suggest that the correction from $4,690 highs in late August has completed
Bearish attempts, on the other hand, are likely to find support between the August 14 low, at $4,311, and the intra-week low of $4,282. A potential reversal from the 200-day SMA below these levels would confirm a "Head and Shoulders" pattern and add pressure towards the August 6 low of $4,220 and the late July lows near $4,000.
(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.
Silver prices (XAG/USD) fell on Friday, according to FXStreet data. Silver trades at $66.67 per troy ounce, down 0.46% from the $66.98 it cost on Thursday.
Silver prices have decreased by 6.21% since the beginning of the year.
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 66.97 on Friday, up from 66.79 on Thursday.
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 Aussie enters this week with genuine hawkish backing after Australia’s Q2 GDP surprised sharply to the upside, pushing the market-implied probability of a September RBA hike from 48% to 57%, with a November move now more than fully priced. Governor Bullock’s board has already flagged upside inflation risks tied to Middle East-driven energy costs, and rising Australian bond yields, which touched their highest level since April 2011 this week, are only reinforcing that hawkish backdrop.
Across the Tasman, the RBNZ delivered exactly what all five major New Zealand bank economists expected on Wednesday: a 25bp hike to 2.75%, the second consecutive increase after July’s tightening move. Headline inflation remains elevated at 4.1%, though the central bank’s own projections signal a likely pause in October before potentially resuming in December, leaving markets pricing roughly a 30% chance of another hike this year.
The result: two central banks now both firmly in tightening mode, though the RBA’s path still carries more near-term uncertainty than the RBNZ’s, whose next move already looks broadly telegraphed through year-end.
Technical Analysis of AUD/NZD
As the AUD/NZD chart shows, the pair staged a sharp rally from the 1.19633 low, riding a steep ascending trendline that has powered the entire late-August advance. That rally has since run into resistance near the 1.22897 high, the 0 Fibonacci level, where price is now consolidating just above the 0.236 retracement near 1.22127, caught between a shorter-term descending trendline from this week’s peak and the broader medium-term descending trendline that has capped the pair since late June.
Bullish Scenario
Should buyers defend the 0.236 retracement and the ascending trendline while breaking above the short-term descending trendline, the path would open towards a retest of the 1.22897 high. A confirmed break above that level would mark a genuine shift in the broader multi-month structure.
Bearish Scenario
Conversely, a break below the 0.236 level and the steep ascending trendline would expose the intermediate 1.213–1.215 support zone, coinciding with the 0.5 Fibonacci retracement. A deeper slide below that zone would risk a fuller retracement of the late-August rally, back towards the 0.618–0.786 area near 1.203–1.209.
With price squeezed between a reclaimed short-term trendline, a defended ascending trendline, and the long-term descending trendline, AUD/NZD looks poised for a decisive move. Will the RBA’s hawkish momentum push the pair through resistance, or will the broader downtrend since June reassert control?
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ING’s Chris Turner writes that EUR/USD is grinding higher as markets reverse the earlier sell-off triggered by Kevin Warsh’s speech, with the pair moving back toward 1.1650. A softer Dollar backdrop versus EMFX and pro-growth G10 currencies supports the Euro. Turner also flags German local election risks and sees EUR/GBP holding a range before a potential move to 0.87 in the fourth quarter.
Euro benefits from softer Dollar tone"EUR/USD is drifting higher as markets unwind the moves made on the back of Warsh's speech a week ago. EUR/USD had been trading around 1.1650 before that speech and looks to be grinding back in that direction now."
"The generally offered dollar environment against EMFX and pro-growth currencies in the G10 space is creating a supportive environment for EUR/USD – even if the Fed story is uncertain."
"One left-field risk for the euro is the upcoming local elections in Germany. Major success for the AfD in Sunday's Saxony-Anhalt elections may raise more questions over the stability of Friedrich Merz's government."
"Elsewhere, EUR/GBP is consolidating after breaking above 0.86 yesterday. No doubt the gilt sell-off, and what it means for strained UK public finances, played a role there."
"It seems too early to get the all-clear on inflation, meaning that up to 60bp of BoE tightening can sit in UK money markets for a while longer. That probably means EUR/GBP can trade 0.8550-0.8600 before breaking higher to 0.87 in the fourth quarter."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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The GBP/USD pair attracts some buyers for the second straight day, though it lacks follow-through and remains capped near mid-1.3500s through the early European session on Friday. Spot prices, for now, seem to have stalled the recovery from a nearly three-week low, touched on Wednesday, as traders keenly await the release of the US Nonfarm Payrolls (NFP).
The closely watched US monthly employment details will be looked upon for more cues about the US Federal Reserve's (Fed) future policy path, which, in turn, will drive the US Dollar (USD) and provide a fresh impetus to the GBP/USD pair. Heading into the key data risk, some repositioning trade helps the Greenback recover part of the previous day's heavy losses to over a one-week low and acts as a headwind for the currency pair.
Apart from this, persistent geopolitical uncertainties amid renewed US-Iran hostilities and clashes over the Strait of Hormuz turn out to be another factor underpinning the safe-haven USD. However, reduced bets for a September Fed rate hike, along with soft US bond yields, hold back USD bulls from placing aggressive bets and might act as a tailwind for the GBP/USD pair, warranting caution before positioning for any meaningful downside.
From a technical perspective, the GBP/USD pair maintains a mild bullish bias above the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibonacci retracement of the July-August rally. Moreover, momentum indicators are constructive, with the Relative Strength Index hovering just above the neutral 50 level and the Moving Average Convergence Divergence (MACD) line sitting above the signal line in positive territory.
This hints that the upside pressure is gradually building as the 38.2% Fibo. at 1.3525 turns into nearby support. This is followed by the 200-period SMA around 1.3490 and the 50.0% retracement near 1.3476, with deeper cushions at the 61.8% and 78.6% levels at 1.3428 and 1.3359, respectively. On the topside, immediate resistance emerges at the 23.6% Fibo. at 1.3584, ahead of a more significant hurdle at the prior swing high region around 1.3681.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD 4-hour chart
Nonfarm Payrolls FAQs Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
