The in-line US CPI data leaves no new catalysts for gold and the EUR/USD, leaving the previous fundamental influences intact. Current Setup The latest US CPI report did not deliver a major surprise for financial markets, with both the headline and core inflation prints meeting expectations. The consensus forecasts for the July US CPI had been for headline CPI to come in at 3.4% YoY (prior 3.5%), while the core CPI was expected at 2.5% year-on-year (prior 2.6%).
The in-line report means that there is no material need to change the current Federal Reserve policy narrative. Fed policymaker Beth Hammack had indicated on Monday that raising rates once would do nothing for the US economy, adding that any benefits from a hawkish tilt has to come from multiple rate hikes. With the US CPI not doing much to alter expectations, investors now have to focus on next month’s employment and inflation data, as well as the upcoming business activity indicators.
For both gold and the EUR/USD, the in-line prints mean that there is no material catalyst to cause a decisive USD repricing.
Gold: CPI removes the immediate inflation shock
Gold is up by 1.52% on the day, maintaining the week’s trajectory pre-CPI. With no pressure on US bond yields, gold will keep trading within the context of the geopolitical de-escalation narrative as the greenback keeps reeling from last week’s dismal NFP data.
Gold remains highly sensitive to:
US real yields Fed expectations US dollar direction Geopolitical risk Gold: Technical Outlook The bias on gold remains cautiously bullish. The CPI data leaves the yellow metal’s direction subject to US bond yields, geopolitics, and USD sentiment.
4452 remains the next upside target, and if this barrier is breached, a move towards the 4509 high of 4 June 2026 cannot be ruled out.
Fig 1: Gold chart (4-hr) showing key price levels post-CPI (snapshot: 12 August 2026) This upside move is only invalidated of the 4382 support is breached via profit-taking or a retracement. In this case, we will see support levels at 4314 (10 August low) and 4213 (22 June 2026 high) forming the next downside targets.
EUR/USD: no fresh catalyst after limited CPI surprise The pair traded around 1.15 just before the release of the CPI data, as traders sought for evidence that US inflation was cooling enough to warrant a more dovish Fed. The in-line result means there was no major catalyst either to the upside or downside, as there was nothing on which to make any changes to the Fed outlook.
That leaves the EUR/USD more sensitive to the following drivers:
Treasury-yield direction Fed/ECB communication Eurozone economic data ECB expectations Broader US Dollar sentiment The bias for EUR/USD remains constructive on the back of dollar weakness from last week’s dismal NFP, as well as a lack of safe-haven appeal as the Middle East geopolitical situation remains in de-escalation.
If the core inflation print came in much higher than expected, the markets would have repriced Fed expectations towards a more restrictive, hawkish end of the spectrum. This would have been deemed USD-positive.
But this was not the case.
Consequently, the Euro remains on course to consolidate its recent gains versus the greenback. But the lack of a downside surprise also means that the Euro would have to look elsewhere for a bullish catalyst. In the near term, the most likely source would be geopolitics and US bond yields.
EUR/USD Technical Outlook The ascending trendline remains the dynamic support for recent price action. A bounce from here will have to test and break past the 1.1577 (7 August high) and 1.1621 (15 June high) resistance levels to continue the uptrend towards the 1.1671 resistance formed by the 29 May 2026 high.
Fig 2: EUR/USD (4-hr chart) showing key price levels post-CPI (snapshot: 12 August 2026) On the flip side, a breakdown of the trendline makes the 1.1506 support (8 June/11 June lows) available as the next downside target. If this barrier is breached, the next downside target lies at 1.1462 the 3/14 July highs).
Good Day... And a Wonderful Wednesday to you! What the heck is going on with the dollar? It seemed that after it closed at the same level in the BBDXY as it did the previous day (1,203) that the currency traders had gone home already 3 days early... I guess, when I check the overnight markets, in a minute, something will have changed... My beloved Cardinals won last night VS the Phillies 2-0... The bullpen tried to give it away, but then they had a savior... My second favorite song by Chicago is playing to greet me this morning: Beginnings...
Well, I already told you the dollar didn't move yesterday and stayed steady Eddie with the BBDXY at 1,203... Gold couldn't help itself yesterday as the SPTs took a pound of flesh, and Gold ended the day down, $22. And Silver saw the same SPTs doing their thing pushing Silver down $1.04... Gold closed at $4,369, and Silver at $64.81
The price of Oil continued to rise as the war wages on... Oil was up $2 and change and ended the day at $82.91.... The 10-year Treasury saw its yield bump higher again and ended the day at 4.69% yield...
In the overnight markets last night.... there was some dollar selling overnight with the BBXY down 1 index point to start the day. The BBDXY is 1,202 and looking very shaky.. The STUPID CPI is getting ready to print and most folks that look at this all the time seem to think that we'll see the STUPID CPI soften in July... That would put the rate cut folks on notice and give some OOMPH to the dollar... We'll see, eh?
Gold/Silver are back on the rally horse this morning. Gold is up $45 and Silver is up $1.61... The metals traders are of a different opinion on the STUPID CPI... I always seemed to pin my flag to the Currency Traders...
The price of Oil bumped higher to trade with an $83 handle this morning, and the 10-year is seeing some more yield control by the Fed Heads, and this has brought the yield on the bond to 4.66%... why can't they just leave this bond alone to trade on its own devices? Well, I know why and so do you... The Fed Heads are attempting to keep rates in the ballpark so that the servicing costs (interest payments) don't go through the roof...
The Chinese Gold Association told us yesterday that Gold consumption rose 1.23% for the 1st half of this year. The association noted that the country's gold consumption patterns were in flux, as the combination of sharp price fluctuations and a new policy toward taxation on Gold kept Gold from really moving past its previous record for consumption.
I sure wish the Chinese would clean on just exactly how much Gold they hold... The Gold Co's listing for holding of Gold for the Chinese can't possibly be correct, and it's way too low.... I guess one day, when push comes to shove and the leaders of countries sit down and show what they own, then we'll know... But that's a few years from now, the U.S. is not near ready to admit that they're broke and need to sit down....
You know if you ran your household finances like the U.S. Gov't does, you would be in a small cell but grateful for 3 meals a day! Yes, the good news is that tax receipts are 3.576% higher YTD in 2026, the bad news is that have spent 3.74% more than we took in, resulting in a deficit of $1.79 Trillion YTD.
And in case you were wondering on January 8, 1835, President Andrew Jackson paid off the entire national debt, the only time the United States federal government has reported no national debt. So, it was done once.... of course, the total wasn't what it is now, but then we could have done something to curb the growth back in the early 2000's when the debt was only $7 Trillion... and to think, I was yelling from the rooftops then that this was crazy!
Moving on... you know, we're still in the dog days of
August/summer... and this year, we've seen more volatility in markets than we've ever seen previously.... And that scares me every morning when I sit down and look what to write about... The volatility is all over the board, stocks, bonds, currencies, metals, energy none have been spared....
The U.S. Data Cupboard has the STUPID CPI for July for our viewing pleasure this morning... And that' it... The Data Cupboard this week has left us wanting but the data just isn't there...
To recap... The dollar was stuck in the mud yesterday and only moved 1 index point overnight... China's Gold consumption is strong even with the very high Gold prices earlier this year... And there are conflicting thoughts on where the STUPID CPI will print today...
For What It's Worth... I saw this headline and read the artical and immediately thought it was FWIW worthy...
Here's your snippet: "The number of adults living with their parents hit a new record in 2025, with 25.2 million adults ages 25 to 35 residing with their parents. That's almost one in three young people who are still living at home.
Unfortunately, in some cases, these multigenerational living arrangements don't work out.
Let's pretend, for example, that Gabriella's son Juan has moved back in with her. He's 27 and works as an office manager, but he's refused to pay his share of the household bills. Gabriella is frustrated that Juan isn't contributing to expenses, and she's not sure if she should make Juan move out or how to handle the situation.
So, what should she do?
Understand the reasons for the non-payment.
The first thing Gabriella needs to do is to figure out why Juan isn't paying rent.
"What parents often forget is that the refusal to help out around the house or pay rent is usually just shame combined with some level of learned helplessness in a kid who may have held jobs before but never fully supported themselves," Hayley Caddes, cofounder of Not Therapy, a coaching company for neurodivergent and stuck 18- to 29-year-olds, told Moneywise."
Chuck Again... well, I used this to illustrate how businesses are not hiring, they're not firing either.... and that causes snagnation!
Market Prices 8/12/2026: American Style: A$ .7070, kiwi .5866, C$ .7177, euro 1.1542, sterling 1.3523, Swiss $1.2321, European Style: rand 16.1426, krone 9.4775, SEK 9.5299, forint 315.42, zloty 3.7292, koruna 21.0019, RUB 83.04, yen 159.09, sing 1.2790, HKD 7.8467, INR 95.33, China 6.7447, peso 17.06, BRL 5.1619, BBDXY 1,202, Dollar Index 99.81, Oil $83.61, 10-year 4.66%, Silver $66.48, Platinum $1,802.00, Palladium $1,426.00, Copper $6.68, and Gold.... $4,414.
That's It for Today... A nice win last night for my beloved Cardinals and keep their hope for the playoffs at fumes and vapors.... I told my two boys on Sunday that this would be a tough and telling series with the Phillies, and it has turned out just that.. I got 6.5 hours of uninterrupted sleep last night after not taking a nap yesterday, so maybe I can get back to a normal sleep pattern.... The Best Beach Boys son ever takes us to the finish line today: God Only Knows... I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!
Resilience in Gold Ultimately, this is a market that might be a little bit stretched. We’ve had a couple of shooting stars over the course of the last week or so, but we continue to find buyers regardless. The gold market has been reviving itself recently, and the momentum seems ot be picking up as we go along. The CPI numbers could be the next big mover, depending on the result.
So, with that being the case, it is a market that has shown pretty significant resilience, and it’s likely that traders are noticing each pullback as possible value. But that is how the price action has been behaving.
Ultimately, this is a market that looks as if it’s trying to change its overall trend and is starting to accelerate. That being said, it is also likely that we will continue to see a lot of chaos coming out of the Persian Gulf, and this could paly a part as well.
The $70 level above is an area that previously had been both support and resistance, so it’s an area that could very well end up being a target or at least an area of interest. Short-term pullbacks will be looked at as potential buying opportunities by those who have been bullish over the last couple of weeks.
Fed Expectations and Technical Levels We’ve recently broken out of a fairly significant consolidation area with the $60 level offering a little bit of a floor. Ultimately, this is a market that tends to be very sensitive to interest rates, so we’ll have to watch that to get a read on any attempt at that correlation coming back to the situation, as well as the US dollar. If it strengthens, it sometimes works against the value of silver.
Traders are still trying to figure out what to do about the idea of the Federal Reserve and rate hikes later this year, and that is being reflected in the price of silver as well. This is a market that I like longer term, but I also am aware of the influence from external places that continue to be a major issue here. I am watching the US dollar and the US interest rates for clues in this market.
Daily Spot Silver (XAG/USD) Spot silver is currently hovering near the midpoint between the 50-day moving average at $61.61 and the 200-day moving average at $71.38. The midpoint is $66.495. Trader reaction to this level should set the tone on Wednesday.
A sustained move over $66.495 will indicate strong buying. If this creates enough upside momentum, spot silver could test the 200-day MA.
A sustained move under $66.495 will signal the presence of sellers. If this creates enough downside momentum, then look for a possible near-term test of the 50-day MA at $61.61 and the 50% level at $60.835.
Tuesday’s Rejection Proved the Rate Trade Still Runs This Market Silver reached $66.48 Tuesday and gave back more than $1.50 by the afternoon. Oil was climbing, September hike odds pushed from 44% to 48%, and buyers walked away from a metal that punishes you for being long when the Fed argument shifts. That sell-off was fast and it told traders exactly what silver cares about right now.
Wednesday’s lower yields have reversed the pressure. The payrolls trade that broke silver higher last week has not disappeared. It went quiet for a session while crude and the bond market pushed back, and now it is reasserting itself ahead of the inflation data.
September hike odds near 50% leave the market split down the middle. Silver moved more than $1.50 in a single session on a small shift in rate expectations. The CPI print has the potential to move it further.
Oil Near $90 Keeps the Inflation Argument Alive Brent crude near $90 with the Strait of Hormuz still restricted and Houthi attacks pressuring the alternative routes is the reason silver cannot hold rallies on lower yields alone. The conflict is not driving the metal. The fuel cost coming out of the conflict is, and that cost feeds straight into the rate debate silver trades on.
Silver rallied Tuesday morning while oil rallied. Silver sold off Tuesday afternoon while oil kept rallying. Gold held steadier near $4,379 through the same session. Silver underperforming gold on a day with active Middle East risk confirms the market is trading the inflation consequence, not the geopolitical bid.
CPI Decides Whether the Morning Bid Survives Economists expect headline CPI to rise 0.1% for July with the annual rate at 3.4%. Core is expected at 0.2% monthly and 2.5% year-over-year. Silver is already positioned for that number to come in contained, which is why yields are lower and buyers are back this morning.
The risk is that the data does not cooperate. Three policymakers voted for a hike at the last meeting and oil near $90 has been doing their work for them all week. Producer prices follow Thursday, so the inflation argument extends beyond one report, but Wednesday’s print sets the tone and silver has shown it can travel fast in either direction once the number hits.
What to Watch Silver is higher because yields backed off and buyers stepped back into the rate-relief trade before CPI. The rebound puts the market within range of Tuesday’s $66.48 high, but oil near $90 and an unresolved Hormuz conflict keep the inflation side of the argument alive. Wednesday’s number decides whether the payrolls-driven bid that started last week gets reinforced or whether the rate hawks get the evidence they need to push back.
The midpoint between the 50-day and 200-day moving averages at $66.495 is the level that defines direction. Silver stalled right at it Tuesday and is pressing toward it again Wednesday. A sustained move above it targets the 200-day. A failure keeps sellers pointed toward the 50-day and the support below it.
Key takeaways Sterling stays firm: GBP/USD remains in a short-term uptrend above 1.3479 after breaking above its medium-term descending trendline post-NFP. US CPI is the key catalyst: A hotter-than-expected core CPI could revive Fed-hike bets and pressure GBP/USD, while softer inflation may extend sterling’s rally. 1.3479 is pivotal support: Holding above it keeps 1.3547, 1.3580 and 1.3643 in focus; a break below exposes 1.3440 and 1.3400. The sterling pound has been one of the best-performing major currencies against the US dollar in the past five trading sessions.
The USD/GBP cross rate has tumbled by 0.38% (a 0.38% gain for GBP against USD) at the time of writing, slightly above USD/CAD, which recorded a 0.56% loss over the same period (see Fig. 1).
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Macro divers: inflation trajectory versus Fed pricing Market sentiment remains closely tied to incoming inflation data as investors gauge whether the Federal Reserve will resume rate hikes later this year. Following recent mixed labour market signals, pricing for the September FOMC decision sits close to a coin toss (based on latest data from the CME FedWatch tool, the Fed funds futures market is only pricing in a 48.1% chance of a 25-bps hike, down from around 70% chance a week ago).
Hot CPI scenario (Core YoY > 2.5%): A surprise to the upside, driven by core goods price pass-throughs, would likely trigger a hawkish repricing in US short-term Treasury yields. This would provide a strong tailwind for the US Dollar Index, exposing GBP/USD to a rapid downward repricing toward the 1.3400 psychological level (also near the 20- and 200-day moving averages). Soft CPI scenario (Core YoY ≤ 2.5%): Confirmation of easing services inflation and softer shelter costs would give the Fed breathing room. A softer dollar would reinforce risk appetite, pushing GBP/USD above near-term hurdles toward multi-month highs. Let’s now decipher the near-term (1 to 3 days) outlook on the GBP/USD from a technical analysis perspective
Oscillating within minor ascending channel after a bullish breakout ex-post NFB Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
The price action of GBP/USD has cleared a significant medium-term hurdle after staging a bullish breakout ex-post the US NFP release (a major risk event on Friday, 7 August 2026), above its former descending trendline resistance from the 28 January 2026 high/52-week high.
In addition, it continues to oscillate within a minor ascending channel in place since the 29 July 2026 low of 1.3279, with a current bullish momentum reading on the hourly RSI (see Fig. 2).
These observations suggest that GBP/USD is oscillating within a short- to medium-term uptrend.
Watch the 1.3479 key short-term pivotal support to maintain a near-term bullish bias for the next intermediate resistances to come in at 1.3547, 1.3580 and 1.3643 (also a Fibonacci extension).
On the flip side, a failure to hold and an hourly close below 1.3479 invalidates the minor bullish impulsive up-move sequence, triggering a minor corrective decline towards the next intermediate supports at 1.3440 and 1.3400.
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What is the distribution of forecasts for the US CPI?What to expect from the US CPI report later today?Iran reportedly maintains that there are no discussions over ceasefire extension as the pact doesn't exist anymoreUSD/JPY stalls ahead of a key US CPI report; BoJ expected to raise rates in SeptemberBitcoin Forecast Today: Why BTC Is Struggling Below $64,000Fed policymaker Collins says would back September rate hike if data points to that directionGermany inflation confirmed to accelerate in July but core prices remain steadierItaly inflation eases just a touch in July, core price keep steady thoughMarkets:
USD flat, NZD lags on the dayWTI crude flat at $83.18Gold up 1.1% to $4,413European indices slightly higher; S&P 500 futures up 0.3%US 10-year yields down 2.4 bps to 4.66%Bitcoin up 0.8% to $64,188The countdown continues ahead of the main event for markets this week, that being the US CPI report for July.
We're less than an hour away now from that, so it is finally about time to see some action in markets after a more tentative setup in the past few days.
In European trading today, there was an early speculative report that the US and Iran would extend the supposed ceasefire deal from the end of June. But as we all know, that agreement has been broken since last month already and Iran was quick to reaffirm that by saying that there is nothing to extend when the pact "does not even exist".
WTI crude fell earlier to $82.50 but is now trading back flat on the day at around $83.18.
Besides that, there wasn't too much other action apart from precious metals climbing further today. Gold is up 1.1% to $4,413 and silver up $2.5% to $66.29 on the day. However, the next move all rides on the US inflation numbers - the same as it would be for broader markets.
The US dollar is not up to much, keeping little changed across the board. USD/JPY is down just 0.1% to 159.06 with traders not really taking the recovery bounce too far in wanting to test the 160 threshold.
Elsewhere, European indices are holding slightly higher alongside US futures while bond yields are down slightly on the day. Overall, the market mood is relatively tentative in waiting on the US CPI report to come.
Will we see any surprises to get markets going in the second half of the week? Or will it be a more benign report, thus forcing the wait to extend to Jackson Hole instead?
GBP/JPY holds firm on Wednesday, trading within Monday’s range as the Japanese Yen (JPY) stays on the back foot, having given up nearly half of the gains triggered by the joint US-Japan intervention. At the time of writing, the cross trades around 215.12, virtually unchanged on the day.
However, intervention risk remains, as both Japan and the US have signalled that they could step into the currency market again if needed. Strategists at BNY Mellon characterise the Yen as remaining "an intervention/rates trade," with "higher oil prices and US Treasury yields" still acting as clear headwinds for Japan’s energy‑importing economy.
They caution that "intervention risk may deter fresh JPY shorts," but add that "persistent fiscal concerns leave little fundamental case for sustained yen appreciation" in the current environment.
Technical analysis
The intervention-driven sell-off pushed GBP/JPY below the 50-day, 100-day and 200-day Simple Moving Averages (SMAs) and briefly below the 210.00 psychological mark. Buyers stepped in around that level and lifted the cross back above the 200-day and 100-day SMAs.
On the daily chart, GBP/JPY holds just above the 100-day SMA near 214.50, while the 50-day SMA around 215.50 caps immediate gains. This leaves the near-term bias neutral as the pair trades between these key averages.
Momentum signals are mixed, with the Relative Strength Index (RSI) hovering near a neutral 49 and the Moving Average Convergence Divergence (MACD) indicator still slightly negative, suggesting that directional conviction is lacking despite a moderately strong Average Directional Index (ADX) reading around 28.
On the downside, a break below the 100-day SMA would expose the 200-day SMA near 212. A decisive move below this level could signal a deeper correction. On the upside, a daily close above the 50-day SMA could open the door to a continuation of the bullish move.
Japanese Yen Price Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.01%-0.11%-0.14%0.05%-0.09%0.27%0.11%EUR-0.01%-0.12%-0.15%0.03%-0.14%0.24%0.09%GBP0.11%0.12%-0.06%0.14%-0.02%0.35%0.21%JPY0.14%0.15%0.06%0.18%0.03%0.37%0.24%CAD-0.05%-0.03%-0.14%-0.18%-0.16%0.21%0.05%AUD0.09%0.14%0.02%-0.03%0.16%0.36%0.23%NZD-0.27%-0.24%-0.35%-0.37%-0.21%-0.36%-0.13%CHF-0.11%-0.09%-0.21%-0.24%-0.05%-0.23%0.13% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
The Euro (EUR) nurses marginal gains against the US Dollar (USD) on Wednesday, with the EUR/USD pair flattening just below the 1.1550 level during the European trading session. FX volatility remains at unusually low levels as investors await the release of US Consumer Price Index (CPI) data to place directional bets on the USD.
Growing concerns about the fate of the US-Iran peace process are weighing on the Euro on Wednesday, as reports of attacks on vessels attempting to cross the Straits of Hormuz and Bab el-Mandeb on Tuesday have cast further doubt about the resumption of free sea traffic in the Gulf region.
In the Eurozone, the German Harmonised Index of Consumer Prices (HICP) confirmed preliminary figures pointing to an acceleration to a 2.8% year-over-year rate in July, from 2.4% in June, as energy inflation jumped to 7.3%, from 2.7% in the previous month. The positive impact on the Euro, however, has been short-lived.
US Dollar rallies, on the other hand, remain subdued, with investors awaiting the release of July's CPI figures for a better assessment of the Federal Reserve's (Fed) interest rate plans. The Market consensus anticipates a moderate slowdown in July’s consumer prices, with the yearly CPI growth easing to a 3.4% rate from 3.5% in June, with core inflation slowing down to a 2.5% year-on-year reading from the 2.6% rate posted in the previous month.
Technical Analysis: EUR/USD wavers in range lacking a clear bias
EUR/USD trades at 1.1535, holding in a neutral range between nearby structural levels. The 4-hour Relative Strength Index (14), around 48, suggests balanced momentum, while the Moving Average Convergence Divergence (MACD) remains slightly negative, altogether highlighting a lack of clear trend.
Bullish attempts were capped at 1.1580 last week, below the Mid-June highs at the 1.1620 area and the May 29 high, at 1.1685. On the downside, the 1.1500 area held bears last week ahead of a previous resistance area around 1.1480. A confirmation below these levels brings the late-July lows, at the 1.1355 area, back into focus.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.00%-0.12%-0.13%0.05%-0.10%0.23%0.10%EUR-0.01%-0.12%-0.15%0.04%-0.14%0.23%0.09%GBP0.12%0.12%-0.04%0.15%-0.04%0.35%0.21%JPY0.13%0.15%0.04%0.19%0.02%0.36%0.24%CAD-0.05%-0.04%-0.15%-0.19%-0.17%0.19%0.05%AUD0.10%0.14%0.04%-0.02%0.17%0.36%0.26%NZD-0.23%-0.23%-0.35%-0.36%-0.19%-0.36%-0.12%CHF-0.10%-0.09%-0.21%-0.24%-0.05%-0.26%0.12% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Key takeaways Sterling stays firm: GBP/USD remains in a short-term uptrend above 1.3479 after breaking above its medium-term descending trendline post-NFP.US CPI is the key catalyst: A hotter-than-expected core CPI could revive Fed-hike bets and pressure GBP/USD, while softer inflation may extend sterling’s rally.1.3479 is pivotal support: Holding above it keeps 1.3547, 1.3580 and 1.3643 in focus; a break below exposes 1.3440 and 1.3400. The sterling pound has been one of the best-performing major currencies against the US dollar in the past five trading sessions.
The USD/GBP cross rate has tumbled by 0.38% (a 0.38% gain for GBP against USD) at the time of writing, slightly above USD/CAD, which recorded a 0.56% loss over the same period (see Fig. 1).
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Fig. 1: 5-day rolling performances of USD against major currencies as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Macro divers: inflation trajectory versus Fed pricing Market sentiment remains closely tied to incoming inflation data as investors gauge whether the Federal Reserve will resume rate hikes later this year. Following recent mixed labour market signals, pricing for the September FOMC decision sits close to a coin toss (based on latest data from the CME FedWatch tool, the Fed funds futures market is only pricing in a 48.1% chance of a 25-bps hike, down from around 70% chance a week ago).
Hot CPI scenario (Core YoY > 2.5%): A surprise to the upside, driven by core goods price pass-throughs, would likely trigger a hawkish repricing in US short-term Treasury yields. This would provide a strong tailwind for the US Dollar Index, exposing GBP/USD to a rapid downward repricing toward the 1.3400 psychological level (also near the 20- and 200-day moving averages).Soft CPI scenario (Core YoY ≤ 2.5%): Confirmation of easing services inflation and softer shelter costs would give the Fed breathing room. A softer dollar would reinforce risk appetite, pushing GBP/USD above near-term hurdles toward multi-month highs.Let’s now decipher the near-term (1 to 3 days) outlook on the GBP/USD from a technical analysis perspective
Oscillating within minor ascending channel after a bullish breakout ex-post NFB
Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Fig. 2: GBP/USD minor trend as of 12 Aug 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. The price action of GBP/USD has cleared a significant medium-term hurdle after staging a bullish breakout ex-post the US NFP release (a major risk event on Friday, 7 August 2026), above its former descending trendline resistance from the 28 January 2026 high/52-week high.
In addition, it continues to oscillate within a minor ascending channel in place since the 29 July 2026 low of 1.3279, with a current bullish momentum reading on the hourly RSI (see Fig. 2).
These observations suggest that GBP/USD is oscillating within a short- to medium-term uptrend.
Watch the 1.3479 key short-term pivotal support to maintain a near-term bullish bias for the next intermediate resistances to come in at 1.3547, 1.3580 and 1.3643 (also a Fibonacci extension).
On the flip side, a failure to hold and an hourly close below 1.3479 invalidates the minor bullish impulsive up-move sequence, triggering a minor corrective decline towards the next intermediate supports at 1.3440 and 1.3400.
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.
Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.
In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.
At the time of writing, the EUR/USD was struggling to find a clear direction. Hardly a surprise, truth be told, ahead of such an important data release. Investors are weighing a renewed surge in crude oil prices in recent days against the prospect of another important US inflation reading. While market volatility remains subdued, the combination of higher energy prices and elevated bond yields is becoming increasingly difficult to ignore. For the EUR/USD forecast to improve, energy prices will need to fall and rapidly so. This looks unlikely. The upcoming CPI report could provide some short term volatility, but it remains to be seen how much of a change there will be in the September rate cut odds, currently a coin toss.
Crude oil drives sentiment Looking at equity markets, investors remain remarkably unmoved by recent gains in oil. For me, the concern is that oil prices could continue rising if there is no meaningful progress between the US and Iran. That could reignite stagflation concerns and lead to unwanted policy tightening. The Strait of Hormuz remains effectively closed. And the longer it remains closed the higher oil prices are likely to go. While reports of progress in discussions involving Oman and Iran have been welcomed, Iran has also indicated that the strait will remain shut until its conditions are met by the US.
For the EUR/USD forecast, this is a tricky backdrop. The eurozone is heavily dependent on imported energy, meaning a sustained rise in oil and gas prices could worsen the region’s inflation outlook while weighing on economic growth. That creates a potential headwind for the euro.
Meanwhile, US crude inventories provide another reason for caution. Stockpiles have fallen to their lowest level in more than four decades, adding to concerns that supply shortages could amplify the impact of the geopolitical disruption. We will have some fresh inventories data due later today. Let’s see if there any more drawdowns.
CPI likely to move the dollar only temporarily US CPI remains the main scheduled event for markets today. The previous report surprised significantly to the downside, with headline inflation slowing to 3.5% from 4.2%.
Economists are expecting a more modest improvement this time. Headline CPI is forecast to rise 0.1% month-on-month, leaving annual inflation at 3.4%, while core CPI is expected to increase 0.2%, keeping the annual rate at 2.5%, down from 2.6% previously.
A softer-than-expected reading could reinforce expectations for a less hawkish Fed and put renewed pressure on the dollar. But if the inflation data is in line or stronger than expected, then the dollar can remain supported.
The dollar’s reaction to CPI may fade fast in any event, especially if the data does not deviate too much from expectations. A lot will depend on what happens to oil prices. If crude continues climbing, markets may start rebuilding expectations for tighter US monetary policy, even if the inflation data itself is relatively benign.
Bond yields are flashing a warning The other part of the equation is the bond market. Treasury yields have remained elevated as oil prices have risen, reflecting concerns that the energy shock could eventually feed into broader inflation.
So far, equity investors appear largely unconcerned. But if crude moves substantially higher from here, the combination of rising inflation expectations and higher yields could become increasingly uncomfortable for risk assets.
That would also create an additional headwind for the euro, particularly given the relatively lower interest-rate environment in the eurozone and the region’s exposure to imported energy.
EUR/USD levels to watch At the time of writing, the EUR/USD was trading just below 1.1550. The directional picture still looks uncertain. Volatility has remained remarkably low, partly reflecting the summer trading environment and partly the market’s wait-and-see approach ahead of CPI.
Source: TradingView.com Technically, the pair recently broke above a bearish trend line, but buyers have so far failed to generate meaningful follow-through. That is a sign of weakness.
Resistance begins around 1.1575, with the recent high at 1.1622 also important. The 200-day moving average is converging around that area, making a break above it a potentially significant bullish signal to watch out for in the coming days.
On the downside, initial support is located around 1.1500–1.1520. A break below that zone would expose 1.1470 and then 1.1410, with the recent lows around 1.1350 becoming the next major downside reference.
EUR/USD forecast summary For now, EUR/USD remains caught between a potentially softer US inflation backdrop and an increasingly uncomfortable energy story.
If CPI comes in cooler and oil prices stabilise, the euro could regain momentum. But if crude continues higher, bond yields follow, and US inflation proves sticky, the risks could quickly turn more negative.
Another key question is whether the EUR/USD can continue looking through higher energy prices — or whether the bond market eventually forces investors to reassess the risks they have so far largely ignored. All told, the EUR/USD forecast remains tilted slightly lower.
Gold (XAU/USD) rebounds on Wednesday after closing in negative territory on Tuesday for only the second time in six trading days. Traders now await the US Consumer Price Index (CPI) data, due at 12:30 GMT, to see whether the bullish momentum will continue or a reversal will take shape. At the time of writing, XAU/USD trades around $4,417, up 1.11% on the day.
US inflation is expected to pick up slightly on a monthly basis in July, with headline CPI rising 0.1% and core CPI increasing 0.2%. However, the annual rates are forecast to ease to 3.4% and 2.5%, respectively.
Rabobank’s RaboResearch Global Economics & Markets team cautions that the benign US CPI consensus is unfolding against a far more turbulent geopolitical backdrop. The bank highlights that “after four crew and two rescuers were killed in a Houthi Red Sea attack on a ship and the US struck another in the Gulf of Oman ‘trying to break its Iran blockade’; Iran said Hormuz will stay closed unless the US meets its over-reach conditions.”
Meanwhile, diplomatic efforts continue, with Pakistan’s Interior Minister Mohsin Naqvi meeting Iranian President Masoud Pezeshkian and Foreign Minister Abbas Araghchi in Tehran as Islamabad seeks to revive stalled peace talks between the US and Iran.
Still, there is no sign of an immediate agreement to reopen the Strait of Hormuz. West Texas Intermediate (WTI) trades around $82, holding near a one-and-a-half-week high. The US Energy Information Administration (EIA) also raised its 2026 average price forecast to $80.88 per barrel from $76.26.
With inflation running above the Federal Reserve’s (Fed) 2% target and higher Oil prices adding to upside risks, the CPI report will help traders assess the Fed’s interest-rate path, particularly ahead of the September meeting. According to the CME FedWatch Tool, markets currently see a 48% chance of a rate hike.
A hotter-than-expected inflation reading could strengthen rate-hike bets, lifting the US Dollar and Treasury yields while weighing on the non-yielding metal. Conversely, softer data could prompt traders to further scale back expectations of a hike, keeping Gold’s near-term outlook tilted to the upside.
Technical analysis: XAU/USD approaches the 200-day SMA
XAU/USD extends its advance above the 50-day Simple Moving Average (SMA) and trades just above the 100-day SMA, keeping the near-term bias bullish.
The pair is now approaching the 200-day SMA at $4,500, which acts as the next significant overhead barrier, while the Relative Strength Index (RSI) at 68 flirts with overbought territory, hinting that the latest advance is strong but could be prone to consolidation.
The Average Directional Index (ADX) at 30 points to a moderately directional market, reinforcing the idea of a sustained bullish phase as long as price remains above the short- and medium-term averages.
On the downside, immediate support is seen at the 100-day SMA near $4,388, with a deeper cushion at the 50-day SMA around $4,148, where buyers would be expected to re-emerge on corrective pullbacks. Further below, a more structural floor is located at the horizontal support line at $4,000.
On the topside, the 200-day SMA at $4,500 is the key resistance level that bulls need to reclaim to extend the uptrend, and a failure to clear this barrier would likely keep price consolidating above the nearby moving-average support band.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound-Australian Dollar could stay near AU$1.91 if UK GDP supports Sterling, although hawkish RBA signals may keep the ‘Aussie’ well underpinned. The Pound to Australian Dollar (GBP/AUD) exchange rate traded in a narrow range on Tuesday, after early volatility triggered by the Reserve Bank of Australia’s latest policy decision faded.
At the time of writing, GBP/AUD was trading around AU$1.9146, little changed on the day.
Latest — Exchange Rates:
Pound to Australian Dollar (GBP/AUD): 1.91256 (-0.13%)
Pound to Dollar (GBP/USD): 1.350731 (-0.03%)
DAILY RECAP:
The Australian Dollar (AUD) saw some volatility during Tuesday’s Asian session after the Reserve Bank of Australia left interest rates unchanged at 4.35%, in line with market expectations.
The ‘Aussie’ initially dipped after the announcement, but quickly recovered as RBA Governor Michele Bullock struck a hawkish tone in her post-meeting remarks.
Bullock indicated that the bank had discussed the possibility of another rate rise and signalled that further tightening remains possible if inflation risks persist.
She said: “And we will go again if we need to. And I think personally that it is quite possible we might need to go, but we will wait and see what the data tells us.”
This helped AUD steady after the initial wobble, with investors now looking to upcoming Australian data for clues as to whether inflation pressures are beginning to feed more clearly into the wider economy.
Meanwhile, the Pound (GBP) held firm on Tuesday after a report showed UK consumer confidence climbed to its highest level in almost two years in July.
Barclays’ latest consumer spending survey suggested households were feeling more secure in their finances and job prospects, with warmer weather and the World Cup also helping to lift discretionary spending.
Even so, Sterling struggled to generate stronger momentum, with traders largely waiting for Thursday’s UK GDP release for clearer direction.
Near-Term GBP/AUD Forecast: Can UK GDP lift Sterling above AU$1.91? Looking ahead, the next major catalyst for the Pound to Australian Dollar exchange rate is likely to be Thursday’s UK GDP report.
If the figures show the UK economy expanded at a reasonably healthy pace in the second quarter, Sterling may find fresh support and GBP/AUD could attempt to push higher.
However, any disappointment in the GDP release may leave the Pound vulnerable, particularly against an Australian Dollar that remains supported by hawkish RBA expectations.
Markets will also keep an eye on another speech from RBA Governor Bullock. If she reiterates the case for keeping the door open to further rate hikes, the ‘Aussie’ could stay underpinned through the second half of the week.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The Euro-Dollar exchange rate has broken out of its recent base, with FX analysts at Société Générale now watching the 1.1610/1.1625 zone as the next resistance area. The Euro to US Dollar (EUR/USD) exchange rate was trading around 1.1543 late on Tuesday, still holding most of the recovery from late July and roughly 1.2% higher over the past month.
Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.154048 (-0.03%)
Pound to Dollar (GBP/USD): 1.351923 (+0.07%)
Dollar to Yen (USD/JPY): 159.21564 (-0.04%)
FX strategists at Société Générale says the pair has already completed the first part of its technical recovery.
“EUR/USD recently broke out of a small base, resulting in a short-term up move,” the bank said.
The next hurdle is more important.
“It is now challenging a descending trend line drawn from the January high,” Société Générale said, adding that “the longer-term 200-DMA near 1.1610/1.1625 is next potential resistance zone.”
That puts the current spot rate around three-quarters of a cent below the bank’s first serious upside test.
Image: EUR/USD one month chart EUR/USD has recovered from below 1.14 in late July and is holding above its rising 20-day moving average.
The latest move has been fairly orderly. After gaining strongly at the end of July, the pair has spent much of August consolidating between roughly 1.1500 and 1.1580 rather than giving back the breakout.
Société Générale’s warning is that the bullish case still depends on support holding.
“If the pair fails to overcome this hurdle, the down move may persist,” the bank said.
Its first support reference sits close to where the pair has repeatedly found buyers over the past fortnight.
“Upper limit of previous base at 1.1470 is a short-term support.”
Near-Term EUR/USD Outlook: 1.1500/07 Needs to Hold The immediate market structure therefore looks fairly simple.
The Euro has broken higher, but it has not yet cleared the longer-term trend barrier. The 1.1610/25 area is the level Société Générale wants to see challenged next, while the 1.1500 region remains important if the latest recovery is to stay intact.
Image: The Euro-to-Dollar exchange rate performance over 2026 - year-to-date history EUR/USD remains lower for 2026 despite the latest rebound, with spot still well below January’s high above 1.20.
A sustained move through the 200-day average would strengthen the case that the July low marked a more durable turning point. Failure to hold around 1.1500/07 would instead risk reopening the lower part of the recent range.
For now, Société Générale’s chart work remains constructive, but the pair is approaching the level where that view faces a much harder test.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
Chris Turner at ING notes EUR/USD remains lacklustre despite better Eurozone data and upside surprises, as high European natural gas prices and Gulf tensions weigh on the Euro. He argues that a soft US CPI print could allow EUR/USD to challenge last week’s 1.1580 high, though further gains may be limited by upcoming data and the Jackson Hole symposium before the Fed’s mid-September decision.
Energy costs cap Euro upside"EUR/USD continues to trade in a lacklustre fashion. Better hard activity data and eurozone economic numbers generally surprising on the upside have failed to provide the euro with much of a lift. That may be owed to unresolved tension in the Gulf, which is keeping European natural gas prices above €60/MWh."
"In terms of geopolitics, there is very little clarity here, although the latest reports suggest Pakistan and Oman are managing to bring the US and Iran a little closer together."
"If the US CPI number does indeed come in on the soft side, EUR/USD should be able to challenge last week's high at 1.1580. That is about the extent of a move priced into one-day straddle options."
"Much more of a move may be too much to ask in quiet summer markets, given we will also see another round of CPI and jobs data – plus the Jackson Hole Fed symposium – before the Fed decides on policy mid-September."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
For years, the financial news space has been flooded with narratives of dollar doom, an incoming hyperinflation, and gold winning once the U.S. currency finally dies.
According to Brent Johnson, founder of Santiago Capital and author of the “Dollar Milkshake” thesis, that framing gets the world backward. Investors, he argues, should spend less time asking how the monetary system ought to work and more time studying how it actually does.
“Regardless of what our morals or what our wishes tell us the world should be, this is the way it is,” Johnson said. The global economy is still built around the dollar, not because the U.S. has pristine finances, but because every other major country has its own debt, demographic, political or market constraints.
That’s why Johnson rejects the idea that the dollar and gold are mortal enemies. In his framework, they can rise together — and a surging dollar may be more destabilizing than a weak one.
Gold Doesn’t Need a Dollar CollapseGold’s recent strength challenges a core assumption of the doom narrative: that bullion requires currency failure to rally. Since the global financial crisis, the dollar index has strengthened while gold has multiplied in price.
“You don’t have to hate the dollar, and you don’t have to think the dollar is going to collapse and you don’t have to think the United States is going to go into the Great Depression to own gold,” Johnson said.
Gold made headlines earlier this year when it overtook the Treasuries as the leading constituent of bank reserves. Johnson acknowledges deliberate diversification away from Treasuries, but argues the overlooked aspect is how much bullion appreciated while bond prices fell.
Even so, gold buying does not end dollar dependence. Johnson argues central banks accumulate bullion precisely so they can sell it in a crisis to obtain dollars — which helps explain why the two can rise together during liquidity squeezes, then diverge when holders dump appreciated gold to secure scarce dollars for oil, food and debt service.
The Strong Dollar ProblemA weak dollar, in Johnson’s telling, does not break the system; it extends it, fueling credit expansion and looser liquidity. The greater threat is strength.
“A strong dollar will do more to wreck the monetary system than a weak dollar,” he said, pointing out that the reason lies offshore.
“The rest of the world owes far more than 40 trillion. They don’t owe it to the United States. They owe it to each other. And it’s in dollars,” Johnson noted, citing Bank for International Settlements estimates of at least $80 trillion — possibly north of $100 trillion.
Those borrowers cannot print dollars. When the dollar rises against local currencies, servicing that debt grows costlier, triggering credit crunches, defaults and liquidity crises. That scarcity, he argues, also gives Washington geopolitical leverage, extending swap lines with strings attached — as he says played out with Argentina.
“The relative levels of fiat currency are probably the most important thing that nobody understands,” he added.
Disruption Trades Beyond GoldJohnson’s framework also points to less obvious opportunities, like agricultural commodities. He sees potential upside in corn, wheat, soybeans and soybean meal later this year or early next year, tied to possible delays in fertilizer, chemicals and other farm inputs caused by Middle Eastern tensions and Strait of Hormuz disruptions. Invesco DB Agriculture Fund (NYSE:DBA) is up 7.94% year-to-date.
A second overlooked pressure point is aviation maintenance, repair and overhaul. The Gulf is an important MRO hub for widebody cargo jets, and missed maintenance deadlines force regulatory groundings that cascade into fresh supply-chain snarls.
Image via Shutterstock
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The US Dollar continues to recover from the blow dealt by the labour market statistics. A rally in Treasury bond yields is driving the rise in the USD index amid tensions in the Middle East and a resurgence of expectations that the Fed will tighten monetary policy in September. The probability has risen to 50% after a dip to 43% following the US jobs report. The futures market still gives a 33% chance of more than one hike in 2026.
Investors are focusing on the release of US inflation data for July. Factors pointing to a slowdown include productivity outpacing labour costs, the waning impact of tariff effects, and lower oil prices than in May, when CPI indices peaked. Those who believe consumer price inflation will resume its upward trajectory point to geopolitical factors and massive investment in AI technology.
Market sentiment is divided, and gold stands to benefit. Whatever the inflation report may be, the precious metal is capable of capitalising on it. A slowdown in CPI will weaken the US dollar and reduce Treasury yields, benefiting the metal. Conversely, an acceleration in consumer price growth against the backdrop of a clear cooling of the US labour market would point to the development of stagflation. This is traditionally seen as a tailwind for gold.
As a result, there is a sense that the precious metal has overtaken the US dollar as the primary safe haven. It is strengthening in response to news of the escalating conflict in the Middle East more rapidly than the US currency is.
Gold also has support from investors’ flight to safety amid government intervention in the forex market. According to Eurizon Capital, coordinated currency intervention by the US and Japan suggests that USDJPY will not return to its 40-year highs in the coming years. Governments will not give in to speculators. The latter’s resistance is futile.
In fact, the wide interest-rate differential between the Fed and the Bank of Japan, coupled with Tokyo’s dependence on energy imports, is pushing USDJPY higher. As the pair approaches 160, the risks of further intervention increase.
Summary: Gold comes out on top in any inflation scenario: a weak CPI puts pressure on the dollar and yields, whilst a strong one heightens the risk of stagflation. Interventions by the US and Japan are supporting demand for safe-haven assets.
USD/JPY Looks Towards 160 Ahead of U.S. CPI Data USD/JPY is creeping higher, even after joint intervention by Tokyo and Washington pulled the pair from 164 to 155. Just a week later, U.S. dollar bulls are already pushing the pair back towards the danger zone.
The yen has already given back nearly half of its intervention rally after the U.S. and Japan stepped in to stop the pair from reaching a fresh 40-year high. While the move worked as a short-term shock, it appears less capable of creating a lasting change in direction.
With Japanese interest rates still well below those in the U.S., the carry trade remains attractive. Investors can continue to borrow cheaply in yen and buy higher-yielding dollar assets, putting renewed pressure on the Japanese currency.
Attention now turns to U.S. CPI data, which is expected to show headline CPI rising 0.1% month-on-month and 3.4% year-on-year, down from 3.5%. Core CPI is expected to rise 0.2% month-on-month and 2.5% year-on-year, down from 2.6%.
A hotter-than-expected reading, particularly CPI of 0.3% or more on a monthly basis, could strengthen expectations of a September rate hike. This could push U.S. Treasury yields higher, making dollar assets more attractive and potentially lifting USD/JPY above 160.
Meanwhile, cooler-than-expected inflation, particularly following Friday's weaker-than-expected non-farm payroll report, could put pressure on Treasury yields and give the pair some breathing room.
U.S. CPI data is therefore key for setting expectations for the September Fed meeting and could also influence Federal Reserve Chair Walsh's speech at the Jackson Hole Symposium later this month.
USD/JPY Forecast – Technical Analysis
USD/JPY has recovered from the 155 low, rising back above the 200 EMA and heading towards the 160 resistance zone. There is a confluence of the multi-month rising trend line, horizontal resistance and the 50 EMA around this level.
A rise above 160 would put bulls firmly back on track and bring 163, the round number, and 164, the 2026 high, into focus.
On the downside, support is seen at 157.80, the 200 EMA. Below here, attention turns back towards 155, the August and May lows.
Oil Rises For A Sixth Straight Session On Middle East Supply Fears Oil prices are rising on Wednesday amid ongoing concerns about supply disruptions in the Middle East, although data showing rising U.S. oil inventories could limit the upside for now.
Oil prices are rising for a sixth straight day, with WTI up more than 7% so far this week. The rise comes amid ongoing supply concerns, as Iran's top security officials said the Strait of Hormuz will remain closed unless the U.S. accepts Iran's conditions to end the war.
Shipping data shows the number of vessels transiting the Strait fell to a low of eight on Tuesday, significantly below the 130 vessels that passed through the crucial waterway each day before the war.
Separately, Iran-aligned Houthis reported attacks on ships in both the Strait of Hormuz and Bab el-Mandeb, adding to concerns over oil supply.
According to the International Energy Agency, global oil supply is expected to fall by 4.3 million barrels per day, or around 4%, this year, as renewed hostilities in the Middle East since July put the oil market into a deficit. This is a larger drop than the 3.7 million barrels per day forecast in the IEA's July report, taking the IEA's latest forecast for global supply to 102.02 million barrels per day.
However, according to API data, U.S. crude inventories rose sharply by 9.1 million barrels last week, while gasoline and distillate inventories fell by 1.5 million barrels.
Attention will be on EIA data later today to see whether the inventory build is confirmed by official data. If it is, this could provide some relief from the current supply concerns and limit further gains in oil prices.
For now, ongoing hostilities and the closure of the Strait of Hormuz are likely to keep oil prices supported.
Oil Forecast – Technical Analysis
Oil is trading within a symmetrical triangle pattern. The price has recovered from $75, pushing above the 50 and 200 EMAs.
With the RSI above 50, buyers will look to extend gains towards $88, the 50% Fibonacci retracement of the move from the $55 low to the $120 high, as well as the falling trend line resistance.
A rise above here brings the 95 Fibonacci retracement level and the July high into focus. A break above this level would create a higher high and open the door towards $100.
On the downside, immediate support is seen at the 50 EMA at $81.80 and $80, the psychological level, followed by the 200 SMA and the 61.8% Fibonacci retracement level.
A break below these levels would bring $75, the August low, back into focus and could see sellers gain traction towards the $70 support zone.
Silver prices (XAG/USD) rose on Wednesday, according to FXStreet data. Silver trades at $66.56 per troy ounce, up 3.06% from the $64.58 it cost on Tuesday.
Silver prices have decreased by 6.36% 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 66.32 on Wednesday, down from 67.64 on Tuesday.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
HomeTechnical AnalysisIntraday Analysis 12.08.2026 Gold Pushes for $4500
USDCAD continues lower
The American dollar continued its journey lower as the sell-off shows no signs of stopping.
The pair is struggling to stay afloat at the 1.3900 zone as sellers pile on the pressure. Buyers attempted to get back into the game after a brief consolidation. Failure to hold the 1.4000 level has now become a firm resistance. 1.3970 is the first resistance, with 1.4080 the target higher.
NZDUSD(New Zealand dollar) spikes lower
The NZDUSD(New Zealand dollar) looks to break out of the recent consolidation.
A brief pullback after hitting 0.5900 gives hope for the greenback to turn around. The pair turns its attention towards the first support at 0.5850. A breach here could trigger a new round of liquidation towards 0.5780. 0.5900 remains the resistance to break as the RSI creeps lower. XAUUSD waiting for the next signal
Gold continues to grind higher to push for another fresh high after falling short at 4400.
The price is still in bullish mode after jumping over $300 since the start of the month. An overbought RSI could see a limited pullback, but all eyes are on a rally past 4400. A fall below the fresh support of 4320 would open the door to a move towards 4240.
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Whatever the inflation figures may be, the precious metal will come out on top. Japan and the US don’t want to give the yen’s fate to speculators. The US dollar continues to recover from the blow dealt by the labour market statistics. A rally in Treasury bond yields is driving the rise in the USD index amid tensions in the Middle East and a resurgence of expectations that the Fed will tighten monetary policy in September. The probability has risen to 50% after a dip to 43% following the US jobs report. The futures market still gives a 33% chance of more than one hike in 2026.
Investors are focusing on the release of US inflation data for July. Factors pointing to a slowdown include productivity outpacing labour costs, the waning impact of tariff effects, and lower oil prices than in May, when CPI indices peaked. Those who believe consumer price inflation will resume its upward trajectory point to geopolitical factors and massive investment in AI technology.
Market sentiment is divided, and gold stands to benefit. Whatever the inflation report may be, the precious metal is capable of capitalising on it. A slowdown in CPI will weaken the US dollar and reduce Treasury yields, benefiting the metal. Conversely, an acceleration in consumer price growth against the backdrop of a clear cooling of the US labour market would point to the development of stagflation. This is traditionally seen as a tailwind for gold.
As a result, there is a sense that the precious metal has overtaken the US dollar as the primary safe haven. It is strengthening in response to news of the escalating conflict in the Middle East more rapidly than the US currency is.
Gold also has support from investors’ flight to safety amid government intervention in the forex market. According to Eurizon Capital, coordinated currency intervention by the US and Japan suggests that USDJPY will not return to its 40-year highs in the coming years. Governments will not give in to speculators. The latter’s resistance is futile.
In fact, the wide interest-rate differential between the Fed and the Bank of Japan, coupled with Tokyo’s dependence on energy imports, is pushing USDJPY higher. As the pair approaches 160, the risks of further intervention increase.
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Silver (XAG/USD) has returned to levels a few cents above $66.00 on Wednesday’s European session after finding support at the $64.20 area on Tuesday. The precious metal keeps the bullish trend from early August lows in the mid-$56.00s range, with bulls aiming for the $67.15 resistance area ahead of the release of July’s US Consumer Price Index (CPI) report, due later in the day.
Analysts at ING note that "Friday's soft US jobs data did not weigh heavily on the Dollar," with the market instead viewing upcoming inflation data as the decisive factor for the Fed’s next move.
In that sense, ING experts point out that "the market looks to be expecting a softer price story today," and suggest that to materially shift expectations, "we would probably need to see a 0.1% month-on-month read on core inflation – which some think is possible." In their view, "a soft number should drag market pricing of a September Fed rate hike away from a 50% probability in favour of no change."
Technical Analysis: Above $67.17, the next target is at the $71.50 area
XAG/USD confirmed its near-term bullish outlook after bouncing strongly from the $64.20 area, which has lured buyers into the peak of their last two months' trading range, at $67.17. Momentum indicators in the daily chart endorse the positive view, as the Relative Strength Index (14) trends toward the bullish side at 62.40 and the Moving Average Convergence Divergence (MACD) histogram remains positive around 1.17, hinting at steady bullish pressure.
On the topside, a confirmation above the mentioned $67.17 (June 22 high) would clear the path towards the confluence of the 200-day SMA, at $71.47, and the mid-June peak, at $71.56, which is likely to offer significant resistance.
Downside attempts, on the other hand, are likely to be tested at Tuesday's low of $64.23, and the previous resistance area between the July 6 high, at $ $63.28, and the August 6 high, at 62.92. Further down, the next target is at the July 6 and 22 highs around $60.81.
(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.
Key Points:U.S. CPI is the primary FX catalyst as traders assess whether inflation will alter expectations for the Fed's September decision.UK second-quarter GDP is another important catalyst for GBP/USD and expectations surrounding Bank of England policy.DXY remains technically vulnerable below its key moving averages while defending rising trendline support near 99.42.EUR/USD is testing long-term resistance near 1.1556, with a breakout potentially strengthening its bullish structure.GBP/USD remains constructive above its rising trendline and moving averages while buyers challenge 1.3516 resistance.
In this article:GBP/USD
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GBP/USD ForecastEUR/USD
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EUR/USD ForecastUS Dollar News: CPI Test Puts Fed, Euro and Pound in Focus The U.S. dollar begins the week with July CPI due out later today. The data release may dictate whether the Federal Reserve pauses its interest rate hike cycle or continues to hike in September. Team Reuters forecasts 0.1% month over month increase in headline CPI after the June reported drop of 0.4% with expected annual inflation coming in at 3.4%. Forecasts expect a 0.2% month over month increase in core CPI and a 2.5% year over year increase. Given recent market action, most expect the Fed to stay on hold in September. Thus, today’s CPI number may have some consequence.
The Falling U.S. July employment numbers combined with the current geopolitical situation has the Fed in a tricky spot. Atlanta Fed interim President says very high inflation and the uncertainty of energy flows out of the Middle East are significant issues the Fed is facing. Three of the Fed board members urged a rate hike in the July meeting.
The euro is in the same dilemma of growth versus inflation as the Fed. The ECB recently said the Ukraine-Russia conflict disrupted eurozone household spending; however, recent manufacturing numbers for July showed factory output was the best it has been in nearly four and a half years. The ECB has expressed some concern that the growing AI industry in Europe will help counter the downturn of the economy that is caused by trade and geopolitical uncertainty.
The Pound has its focus on the Thursday release of UK Q2 GDP. Forecasts currently put the number at 0.4% for the quarter following Q1’s 0.6% gain. The Bank of England is expected to keep interest rates at their current level and remain focused on inflation so the BoE will be watching the economy closely in case the focus shifts to falling growth.
For all three currencies, U.S. CPI is the primary concern of the moment. Lighter CPI would lessen the likelihood of another Fed hike. Conversely, a steepening CPI would give more weight to a Fed hike for this year.
U.S. Dollar Index Technical Analysis: DXY Holds Rising Trendline but $100.06 Still Caps Recovery Dollar Index Price Chart – Source: Tradingview Currently, the USD Index is at $99.87 and is trading right above the rising trendline and the key support area of $99.42. There have been signs of buyers coming in around the rising trend line, but the price still has a long way to go to reach the 50-day moving average (MA) at $100.30, 100-day moving average at $99.91, and is currently resting just below the rising trend line and the 50-day moving average. The recovery has not begun until these averages are crossed.
The Relative Strength Index (RSI) is at 41, and although it has begun to show a reversal as momentum has started to slow, there is still a strong bearish trend and it is still below 50. Immediate resistance is at $100.06 before $100.36 and $100.82. If the price can sustainably trade above these levels, then it will confirm a short-term bullish view and retest $101.62.
If there is a break down to the support of $99.42, then the rising trend line will also fall and provide a break to the support of $98.76. Until the price has the potential to test $100.36-$100.06, the USD Index is a cautious recovery scenario above $99.42.
GBP/USD Price Chart – Source: Tradingview GBP/USD is currently trading at $1.3508, with bulls defending the $1.3515 support level. Pound bulls display impressive momentum as price continues to trend above the moving average convergence divergence (MACD) and the lower trendline. A combination of a series of higher lows and the bullish MACD support a strong upward price move. The MACD, currently at 61, is approaching overbought territory, however it does indicate a solid bullish momentum.
The identified resistance levels are $1.3515, $1.3559 and $1.3601. In case of a breakdown, bulls should base their defense at the $1.3437 low, $1.3401 low, and $1.3343 levels. The trendline will continue to act as an important structural support line. From my perspective, if bulls are able to successfully defend the trendline, a run towards $1.3559 is expected. However, if bulls fail to defend the trendline, a significant part of the bullish structure will be lost.
EUR/USD Technical Analysis: Euro Compresses Beneath Descending Trendline Near $1.1540 EUR/USD Price Chart – Source: Tradingview The pair is at $1.1537, consolidating beneath the long-term descending trendline limiting bullish momentum. EUR/USD is above the 50-period and 100-period EMAs at the $1.1523 and $1.1495 levels, respectively, keeping the short-term structure positive, with resistance above. Smaller candlesticks are forming between $1.1530 and $1.1540, suggesting consolidation rather than a reversal.
The RSI is at around 49, showing neutral momentum after the recent rally. $1.1569 is the next resistance level followed by $1.1621 and $1.1674. Support is found at $1.1532, with major support at $1.1516 and $1.1500 and $1.1456. In my opinion, if the pair breaks above $1.1569, it is a clear bullish sign. If price breaks the descending trendline, it has potential to break out of the consolidation.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
UOB’s Quek Ser Leang and Lee Sue Ann highlight that GBP/USD closed marginally higher near 1.3510, with price action confined to a narrow 1.3493–1.3515 range. Intraday, they see scope for the Pound to edge higher but still capped within 1.3490–1.3535. Over 1–3 weeks, GBP can test 1.3555, though a sustained rise above that level is viewed as unlikely.
Pound strength seen but constrained"24-HOUR VIEW: After GBP rose to a high of 1.3530 on Monday, we indicated yesterday that “while GBP could rise further, the combination of slowing momentum and overbought conditions suggests any advance is likely to be contained within a 1.3490/1.3535 range.” The subsequent price movements did not unfold as expected. GBP traded in a narrow sideways range of 1.3493/1.3515, closing marginally higher by 0.01% at 1.3509. Despite the quiet price action, the underlying tone appears to be firm, and there is a chance for GBP to edge higher. However, we continue to hold the view that any advance is likely to be contained within a 1.3490/1.3535 range."
"1-3 WEEKS VIEW: We have held a positive GBP view since last Monday. Yesterday (11 Aug, spot at 1.3510), we indicated that while GBP “could test 1.3555, based on the prevailing momentum, a continued rise above this level appears unlikely.” We also indicated that “to keep the momentum going, GBP must hold above 1.3460 (‘strong support’ level).” There is no change in our view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The New Zealand Dollar (NZD) accelerates its reversal against the US Dollar (USD) on Wednesday, weighed by cautious markets amid growing tensions in the Middle East and political uncertainty at home. NZD/USD bears are testing support at the 0.5860 area, down from last week's highs above 0.5900, against a firmer USD ahead of July’s US inflation data.
New Zealand’s Prime Minister, Christopher Luxon, survived a confidence vote on Wednesday, following a challenge from his defence minister, which adds to evidence of the divergences within the ruling National Party less than three months ahead of New Zealand’s elections
Beyond that, tensions in the Middle East flare up as reports of attacks on two vessels complicate the entangled US-Iran negotiating process even further. The risk-sensitive NZD is coming under pressure although volatility remains subdued, as traders await the release of July’s US Consumer Prices Index (CPI) report, due later on the day.
Technical Analysis: Key support is at the 0.5830 area
NZD/USD trades at 0.5865 after depreciating for three consecutive days, with bears aiming to break the bottom of the last two weeks' trading range, at the 0.5860 area. Momentum indicators in the daily chart remain at positive levels but show a fading impulse. The Relative Strength Index (14) is trending towards the 50 midline, and the Moving Average Convergence Divergence (MACD) line is attempting to cross below the Signal line, which is a bearish sign.
A clear break below the mentioned 0.5860 level would expose a key support area in the confluence of the ascending trendline from late June lows, now around 0.5835, and the 200-day SMA, a popular indicator, which would cross the price at around 0.5830. Further down, the next target is the late July lows, near 0.5760.
On the topside, immediate resistance emerges at the 78.6% Fibonacci retracement of June's selloff, at 0.5916, and beyond that, the May and June top near 0.6000.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
New Zealand Dollar Price Today The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.03%-0.02%0.06%0.04%0.02%0.19%0.14%EUR-0.03%-0.05%0.02%0.02%-0.05%0.20%0.10%GBP0.02%0.05%0.06%0.05%0.02%0.24%0.16%JPY-0.06%-0.02%-0.06%-0.02%-0.06%0.15%0.08%CAD-0.04%-0.02%-0.05%0.02%-0.04%0.19%0.09%AUD-0.02%0.05%-0.02%0.06%0.04%0.22%0.16%NZD-0.19%-0.20%-0.24%-0.15%-0.19%-0.22%-0.07%CHF-0.14%-0.10%-0.16%-0.08%-0.09%-0.16%0.07% 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 New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
The Australian dollar is entering a potentially decisive phase against the US dollar. The Reserve Bank of Australia (RBA) left its cash rate unchanged at 4.35% at its August meeting, as expected, but its message was more hawkish than the decision itself suggested. Governor Michele Bullock warned that another rate increase remains possible if inflation proves persistent, particularly as geopolitical tensions threaten to generate fresh supply shocks.
Daily AUD/USD Chart - Source: ActivTraderFor the AUD/USD, the key question is whether this hawkish stance can support further gains. Australia’s relatively high interest rates could attract demand for the Australian dollar, but the pair’s direction will also depend on the Federal Reserve. With the US July CPI report approaching, the next move could hinge on whether American inflation strengthens expectations for easier Fed policy or instead reinforces a higher-for-longer outlook.
The RBA has paused, but the hiking cycle may not be overThe RBA’s decision to hold rates at 4.35% does not mean the inflation battle is over. The central bank is assessing the impact of three rate increases delivered earlier this year, while tighter financial conditions and a slowing economy gradually weigh on demand.
Inflation, however, remains above the RBA’s 2%-3% target range. The central bank expects headline inflation to ease to 3.6% by the end of 2026 and 2.6% by the end of 2027, while trimmed-mean inflation is projected to fall to 3.3% by year-end.
The trajectory is encouraging, but the RBA sees significant upside risks. The conflict in the Middle East could keep energy and commodity prices elevated, increasing transportation and production costs and encouraging companies to pass higher expenses on to consumers.
That is why Bullock’s comments matter. She challenged expectations that the RBA is finished tightening, saying rates could still need to rise if inflation remains too high. The result is a distinctly hawkish pause: policymakers have stopped raising rates for now but have deliberately kept the door open to further action.
For the AUD/USD, expectations may matter as much as the actual cash rate. If markets believe the RBA could resume tightening while other central banks move toward easing, the expected interest-rate differential can become a source of support for the Australian dollar.
Energy prices complicate the RBA’s outlookThe central bank expects subdued domestic demand and tighter financial conditions to bring inflation gradually back toward target. However, a prolonged Middle East conflict could keep global energy prices elevated and disrupt that process. The RBA has already warned that some businesses are experiencing higher costs and considering price increases.
Higher interest rates can weaken demand, but they cannot directly eliminate an oil supply shock. If energy prices remain elevated for long enough, however, the initial shock could spread through the economy by affecting business costs, consumer prices and inflation expectations.
This makes the RBA’s reaction function more important than the August decision itself. Stronger-than-expected inflation, renewed energy-price pressures or resilient domestic demand could revive expectations of another rate hike. Conversely, faster disinflation and a sharper economic slowdown would give policymakers more room to remain on hold.
The Australian dollar therefore has a potential monetary-policy tailwind, but whether that translates into a sustained AUD/USD rally will depend heavily on developments in the United States.
US CPI is the next major testThe July US Consumer Price Index represents the other half of the AUD/USD monetary-policy equation. Economists expected headline CPI to rise 0.1% month-on-month in July after falling 0.4% in June, with annual inflation easing to 3.4% from 3.5%. Core CPI, excluding food and energy, is expected to increase 0.2% on the month and 2.5% year-on-year.
A softer-than-expected report would strengthen the argument that US inflation is gradually moving lower despite recent supply shocks. That could encourage investors to price a less restrictive Federal Reserve, potentially pushing Treasury yields and the US dollar lower.
Such an outcome would be supportive for the AUD/USD. If Australian inflation remains persistent at the same time, investors could increasingly price a widening interest-rate differential in Australia’s favour.
The opposite scenario would pose a greater challenge to the Australian dollar. A stronger US CPI reading would suggest that inflation remains sticky and could force markets to adopt a more cautious view of Fed policy. Higher Treasury yields would then support the dollar and potentially reverse AUD/USD gains, even if the RBA maintains its hawkish stance.
The core CPI figure could prove particularly important. Energy prices can generate substantial monthly volatility, especially amid geopolitical tensions, but persistent core inflation would provide stronger evidence that underlying price pressures remain entrenched.
Inflation is also a political issue in the USThe importance of US inflation extends beyond the Federal Reserve and financial markets. The cost of living remains politically sensitive ahead of the November 2026 midterm elections, when voters will determine control of Congress.
Inflation is particularly relevant because President Donald Trump won the 2024 presidential election in part on promises to reduce the cost of living. A renewed acceleration in consumer prices could therefore create a difficult political backdrop for the administration, particularly if households continue to feel the cumulative impact of elevated prices.
A disappointing CPI report could reinforce concerns about purchasing power and make economic management an even more prominent issue for voters. Conversely, sustained disinflation could provide some relief for households and improve the administration’s economic narrative.
This does not mean the Fed will adjust monetary policy because of the elections. Its mandate remains focused on price stability and employment. However, the timing creates an additional layer of market sensitivity. The Fed meeting following September takes place only days before the midterms, potentially making the timing of any policy move more politically scrutinized.
For markets, this could make the path toward the end of the year particularly volatile. Stronger US inflation could constrain the Fed’s room to ease, while persistent Australian inflation could simultaneously keep the RBA open to further tightening.
Absolutely. I would merge the two sections into one genuine bottom-line section, rather than repeating the same bullish/bearish logic twice. The conclusion should synthesize the RBA message, the US CPI risk and the rate differential, then leave traders with the key signals to watch.
AUD/USD outlook: RBA-Fed rate differential holds the keyThe outlook for the AUD/USD ultimately comes down to the direction of the monetary-policy gap between the RBA and the Federal Reserve. The RBA’s August decision has kept the door open to further tightening, while the US CPI report could determine whether expectations for Fed policy move in the opposite direction.
The most supportive environment for the Australian dollar would be one in which Australian inflation proves persistent while US price pressures continue to moderate. Such a combination would increase the likelihood that the RBA keeps rates elevated or even raises them again, while giving the Fed greater scope to ease. A widening expected rate differential in Australia’s favour could then provide the AUD/USD with further upside potential.
The risk to this scenario is a renewed acceleration in US inflation. A stronger-than-expected CPI reading, particularly in the core measure, could push Treasury yields and the dollar higher as markets scale back expectations for Fed easing. If Australian inflation were simultaneously cooling, the relative advantage of the RBA’s hawkish stance would diminish, potentially putting renewed pressure on the AUD/USD.
For traders, the key is therefore not simply whether either central bank raises or cuts rates at its next meeting, but how expectations for their respective policy paths evolve. The RBA’s hawkish pause has provided the Australian dollar with a potential monetary-policy tailwind, but the US inflation data will determine whether that advantage widens or narrows.
The next major AUD/USD move could consequently depend on whether markets begin to see Australia and the United States moving into opposite phases of their inflation and interest-rate cycles. Core CPI, Treasury yields and changes in rate expectations will be crucial signals in determining which scenario gains the upper hand.
The AUD/USD pair prolongs its consolidative price move for the third straight day and trades around mid-0.7000s through the early European session on Wednesday. The Reserve Bank of Australia's (RBA) hawkish outlook continues to act as a tailwind for the Aussie, though a modest US Dollar (USD) keeps a lid on the currency pair.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, preserves its weekly gains as inflation risks stemming from volatile oil prices back the case for at least one rate hike by the Federal Reserve (Fed). This, along with persistent geopolitical uncertainties, supports the Greenback's safe-haven status and contributes to capping the upside for the AUD/USD pair.
From a technical perspective, spot prices have been struggling to extend momentum beyond the 100-day Simple Moving Average (SMA) and break out through the 50% Fibonacci retracement level of the May-June decline. This suggests that the topside progress is slowing but not yet reversing as momentum indicators on the daily chart retain a mildly bullish near-term bias.
In fact, a firm Relative Strength Index (RSI) around 58 and a positive, though modest, Moving Average Convergence Divergence (MACD) reading hint that underlying momentum still favors a grind higher rather than a deeper pullback. A sustained move beyond the 50% retracement near 0.7071 will reaffirm the outlook and lift the AUD/USD pair to the 61.8% level at 0.7120.
Should bulls extend the advance, the next relevant barriers align at 0.7189 and 0.7276. On the downside, initial support is seen at the 100-day SMA around 0.7054, ahead of a Fibonacci cluster at 0.7023 and 0.6963. Meanwhile, deeper demand is expected at the 200-day SMA near 0.6931 and the structural low around 0.6867 if corrective pressure around the AUD/USD pair intensifies.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
Economic Indicator Consumer Price Index (YoY) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
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The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
The British Pound (GBP) remains in a limited range at around 1.3500 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair is expected to remain sideways, with investors awaiting the United States (US) Consumer Price Index (CPI) data for July in the North American session and the United Kingdom (UK) Q2 Gross Domestic Product (GDP) data on Thursday.
Investors expect the US CPI data to have a meaningful impact on Federal Reserve (Fed) interest rate expectations, as comments from Chairman Kevin Warsh in the July policy meeting press conference signaled heightened concerns regarding upside inflation risks.
Analysts at Danske Bank highlight that “today's most important data release will be the US July CPI,” with the bank forecasting “headline inflation at 0.2% MoM SA, 3.4% YoY (prior: -0.4% MoM, 3.5% YoY) and core inflation at 0.2% MoM SA, 2.5% YoY (prior: 0.0% MoM, 2.6% YoY).” The projections point to a modest month-on-month rebound in both headline and core price pressures, alongside slightly lower annual rates compared with June.
On Thursday, the UK Q2 GDP data is expected to arrive lower at 0.4% from 0.6% in the first quarter this year. On an annualized basis, the GDP growth is seen at 1.1%, faster than the previous reading of 0.9%.
GBP/USD Technical Analysis
GBP/USD trades at around 1.3500 above the 20-day exponential moving average (EMA) at 1.3437 and has broken through the downward resistance trend line, now offering support around 1.3465, which together suggests a constructive bullish bias while price consolidates near recent highs.
The Relative Strength Index (14) at about 60 keeps upward momentum intact without yet entering overbought territory, hinting that buyers still control the near-term direction as long as spot remains anchored above these supports.
On the downside, initial support is seen at the former trend-line break level near 1.3465, followed by the 20-day EMA at 1.3437, where a deeper pullback would be expected to attract dip-buying interest. Below the 20-day EMA, the pair would be exposed to the July 28 low at 1.3273. Looking up, the pair could advance towards 1.3600 if it rebounds above the August 10 high at 1.3530.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Gross Domestic Product (QoQ) The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
The euro and pound are holding their ground against the US dollar, although the momentum in European currencies has become more subdued following their previous gains. Market participants are reluctant to establish new positions ahead of the release of the July US inflation report, which could alter expectations for the Federal Reserve’s future policy. Recent labour market data is also encouraging caution: a weak ADP report and a decline in the ISM employment component have added to signs of a gradual cooling in the US labour market.
Today, the main focus will be on the US Consumer Price Index (CPI). According to forecasts, annual inflation may slow to 3.4% from 3.5%, while monthly prices are expected to rise by 0.1% after falling 0.4% a month earlier. Core CPI is forecast at 2.5% year-on-year and 0.2% month-on-month. Weaker-than-expected figures could strengthen expectations of monetary policy easing by the Fed and put additional pressure on the dollar. If inflation comes in above forecasts or proves more persistent, the US currency could receive fresh support. Final inflation figures for Germany and Italy will also be released in Europe, although their impact is likely to remain limited in the absence of significant deviations from preliminary estimates. Therefore, US inflation data is likely to be the main driver for EUR/USD and GBP/USD during today’s session.
EUR/USD In recent trading sessions, EUR/USD has been moving within a relatively narrow range of 1.1500–1.1580. Technical analysis suggests the possibility of another test of the lower boundary, as a Dark Cloud Cover pattern has formed on the daily timeframe. If sellers manage to establish a position below 1.1500, the pair could resume its downward move towards 1.1430–1.1460. Conversely, weaker-than-expected US inflation data could push the price towards 1.1600–1.1620.
Key events for EUR/USD:
today at 09:00 (GMT+3): German Consumer Price Index (CPI); today at 11:00 (GMT+3): Italian Harmonised Index of Consumer Prices (HICP); today at 15:30 (GMT+3): US Consumer Price Index (CPI).
GBP/USD GBP/USD buyers managed to push the pair to a new local high around 1.3500. Technical analysis indicates the possibility of further gains towards 1.3540–1.3560 if the 1.3480–1.3500 area is established as support. Stronger-than-expected US inflation data could support the dollar and trigger another test of the 1.3400 level in GBP/USD.
Key events for GBP/USD:
tomorrow at 09:00 (GMT+3): UK GDP; tomorrow at 14:00 (GMT+3): NI’s monthly GDP tracker; tomorrow at 21:00 (GMT+3): US federal budget execution report.
Overall, EUR/USD and GBP/USD are holding their ground after their previous gains, but their next direction will largely depend on today’s US inflation report. Weaker CPI data could strengthen expectations of Fed easing and put additional pressure on the dollar, creating room for further gains in European currencies. If inflation comes in above forecasts, however, the US currency could receive fresh support, increasing the likelihood of EUR/USD and GBP/USD returning to their nearest support levels.
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UOB’s Quek Ser Leang and Lee Sue Ann report EUR/USD holding near 1.1540 after a quiet session, with momentum indicators mostly flat. Intraday, they expect consolidation between 1.1530 and 1.1560, but a break above 1.1560 could trigger a quick move to 1.1580. Over the next 1–3 weeks, further gains require a close above 1.1580 to open 1.1600 and beyond.
Euro holds but needs a breakout"24-HOUR VIEW: When EUR was at 1.1545 in the early Asian session yesterday, we noted that “momentum indicators are mostly flat,” and we expected EUR “to trade in a range between 1.1530 and 1.1560.” EUR subsequently traded within a tight range of 1.1530/1.1549, closing largely unchanged at 1.1540 (-0.02%). The price action provides no fresh clues, and we continue to expect EUR to trade between 1.1530 and 1.1560. That said, should EUR break above 1.1560, it could trigger a quick rise toward 1.1580."
"1-3 WEEKS VIEW: We continue to hold the same view as yesterday (11 Aug, spot at 1.1545). As highlighted, “the hurdle for further gains has risen,” and EUR “must close above 1.1580 before a move to 1.1600 and beyond can be expected." On the downside, if EUR breaks below 1.1515 (no change in ‘strong support’ level), it would indicate that EUR is not rising further"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Euro (EUR) trades marginally lower at around 1.1534 against the US Dollar (USD) at the start of the European trading session on Wednesday. The major currency pair edges down as investors turn cautious ahead of the United States (US) Consumer Price Index (CPI) data for July, which will be published at 12:30 GMT.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly higher to near 99.90.
According to estimates, the US headline CPI grew at an annual pace of 3.4%, slower than 3.5% in June. In the same period, the core CPI – which excludes volatile food and energy items – is also seen lower at 2.5% Year-on-Year (YoY) from the previous reading of 2.6%. On a monthly basis, the headline and core inflation grew by 0.1% and 0.2%, respectively.
Signs of price pressures cooling down would ease fears of Federal Reserve (Fed) interest rate hikes further, which have already subsided significantly in the past few days, following the release of weak US Nonfarm Payrolls (NFP) figures for July.
US labor market stumbles as July payrolls disappointAccording to TD Securities, the latest US employment report marked a clear setback for the labor market. The bank highlights that July payrolls "surprised sharply to the downside on Friday, posting -23k job gains," with the weakness compounded by "negative revisions subtracting 103k jobs from May and June." While the unemployment rate "declined again to 4.1%," TD Securities stresses this occurred "for 'bad reasons' as the participation edged down again," underscoring a deterioration in labor force engagement rather than an improvement in underlying job conditions.
Meanwhile, the Euro (EUR) trades cautiously due to rising energy prices amid restricted oil supply in the wake of Middle East tensions. Squeezed energy supply through the Strait of Hormuz and Bab al-Mandab Strait has boosted energy prices.
Given that the Eurozone relies heavily on energy imports to meet its needs, higher oil prices bode poorly for the shared currency.
US Dollar FAQs The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact 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 when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
The geopolitical risks are making gold look better. Defensive assets remain in demand on Wednesday following fresh attacks on shipping in the Middle East and a North Korean missile launch. Meanwhile, the gold price gained strength while bitcoin was virtually unchanged. The additional uncertainty comes from the rising price of oil. The price of Bitcoin may face challenges in near term if these risks reduce demand for speculative assets.
Bitcoin Price Forecast as ETF Demand Meets Selling Near $66,000 Bitcoin dropped to approximately $63,500 on Tuesday and continued to trade in the $62,000 to $66,000 range for the past few weeks. The price has increased by approximately 2% in the past week despite consistent demand by US spot Bitcoin ETFs. The response suggests that so far there has been no sufficient momentum to trigger stronger recovery from the fresh buying.
The recent ETF demand has met selling from the miners and corporate holders. This supply has absorbed much of institutional buying. The trading volume and implied volatility have also decreased to multi-year lows. When the activity is low, Bitcoin is likely to stay in tight range but it can also be a sign of sharp move once a strong catalyst comes.
Commodity markets have been unusually active over the past week, but the reasons behind the moves differ considerably from one market to another.
Copper is being driven largely by physical tightness and the movement of inventories into the United States. Gold has responded to weaker US labour-market data and changing expectations for Federal Reserve policy. Platinum continues to reflect a combination of precious-metal flows and a structurally tight physical market, while crude oil remains dominated by geopolitical risk and disruption around the Strait of Hormuz.
For traders, the important point is that these markets cannot be analysed through one common macro lens. Each commodity is responding to a different mix of supply, demand, monetary policy and geopolitical risk.
Copper: Tight supply is more important than strong growthCopper has remained exceptionally firm, trading around $6.65 per pound in the US and close to $14,400 per tonne on the London Metal Exchange.
COMEX copper reached a record closing price of $6.703 per pound on 5 August, but the strength in the market is not simply a story of accelerating global growth.
The more important development is the tightening physical market outside the United States.
More than 200,000 tonnes of copper arrived in the US during July, the largest monthly inflow in at least 12 years. US-based COMEX and LME warehouses have consequently accumulated more than 740,000 tonnes of copper.
By late July, CME warehouses alone held around 58% of visible global exchange inventories.
The reason is largely related to expectations surrounding possible US tariffs on refined copper. Traders have had an incentive to move metal into the United States before any change in tariff policy, effectively pulling available copper away from other parts of the world.
That geographical shift matters.
LME copper inventories fell from around 238,350 tonnes on 4 August to approximately 214,550 tonnes by 11 August. That is a fall of close to 10% in just one week.
The futures curve is also reinforcing the same message.
LME cash copper has been trading around $208 per tonne above the three-month contract. This is known as backwardation and is normally associated with tight immediate supply. Buyers are willing to pay more for copper today than for copper delivered several months from now.
Chinese exchange inventories have also fallen sharply from their March highs, although the demand picture in China is not entirely bullish. Manufacturing activity remains relatively soft, meaning the current copper strength is not being driven by a straightforward boom in Chinese industrial growth.
There are also continuing supply risks.
The Democratic Republic of Congo has introduced restrictions on exports of some copper concentrates, while production problems at major operations such as Grasberg remain part of the broader supply story.
Meanwhile, long-term demand remains supportive.
Electricity grids, electric vehicles, renewable energy infrastructure and the rapid expansion of AI data centres all require significant amounts of copper.
The overall picture is therefore unusual: global growth signals remain mixed, yet the physical copper market is tight.
For traders, that makes inventory levels, exchange spreads and the location of physical metal particularly important.
Gold: Weak US employment changes the rate storyGold has also had a strong week, but for very different reasons.
Spot gold is trading around $4,390 per ounce, compared with roughly $4,086 on 4 August. That represents a gain of more than 7% in just over a week.
The main catalyst has been a change in expectations for US monetary policy.
July's US employment report was significantly weaker than expected. Nonfarm payrolls were forecast to increase by around 80,000, but instead fell by 23,000.
May and June payroll figures were also revised down by a combined 103,000 jobs.
The unemployment rate remained relatively low at 4.1%, but the broader message from the report was that employment growth is losing momentum.
Markets responded by reducing expectations for another Federal Reserve rate increase.
Immediately after the jobs report, the probability of a September rate increase fell from around 57% to approximately 44%.
That matters enormously for gold.
Gold produces no yield, so when markets expect lower interest rates and lower bond yields, the opportunity cost of holding gold falls. A weaker US dollar can provide an additional tailwind because gold becomes cheaper for buyers using other currencies.
Geopolitical uncertainty has added another layer of support.
The continuing situation around Iran and the Strait of Hormuz has maintained demand for safe-haven assets, although the relationship is not entirely straightforward.
Higher geopolitical risk can support gold directly, but if the same risk drives oil prices significantly higher, it can also increase inflation expectations. If higher inflation forces the Federal Reserve to remain restrictive, Treasury yields could rise and create a headwind for gold.
Central-bank demand remains another important part of the picture.
China added around 20 tonnes of gold to its official reserves during July, while global gold-backed ETFs attracted roughly $3 billion of net inflows during the month. ETF holdings increased by approximately 23 tonnes.
This means investment demand is improving at the same time that central banks remain active buyers.
The next major psychological level is around $4,500 per ounce.
The broader gold story, however, remains centred on the Federal Reserve.
If US data continues to weaken without a corresponding acceleration in inflation, the environment remains supportive for gold. If inflation stays high enough to force further tightening, the market could become more vulnerable.
Platinum: A precious metal with an industrial supply problemPlatinum has been another strong performer, trading around $1,760 to $1,770 per ounce after gaining 7.1% in a single session on 4 August.
Platinum is more complicated than gold because it sits between the precious-metals and industrial-metals markets.
It can benefit from lower interest-rate expectations and a weaker dollar, but it is also heavily influenced by automotive demand, industrial activity and physical supply.
The physical market remains structurally tight.
Current forecasts suggest platinum demand of around 7.674 million ounces in 2026 against supply of approximately 7.377 million ounces.
That leaves an expected deficit of roughly 297,000 ounces.
If realised, this would mark the fourth consecutive annual platinum deficit.
Above-ground inventories are forecast to fall to around 1.747 million ounces by the end of the year, equivalent to less than three months of global demand.
That leaves the market relatively exposed to further supply disruption.
South Africa remains central to the platinum story, producing roughly 70% of global mine supply. This geographical concentration means any operational, labour or power-related disruption can have an outsized impact on the market.
Automotive demand remains one of platinum's most important demand sources.
Around 2.959 million ounces of demand is expected to come from the automotive sector this year. Hybrid vehicle production is forecast to rise by roughly 12%, which is important because hybrids still require catalytic converters.
Battery electric vehicles remain a longer-term risk because they do not use conventional exhaust systems and therefore do not require traditional autocatalysts.
Industrial demand is another supportive factor, with consumption forecast to increase by around 9%.
Jewellery is the weaker part of the picture. Global platinum jewellery demand is expected to decline by around 12%, with Chinese demand particularly soft.
Longer term, hydrogen technologies and potential AI-related PGM applications could create additional demand, although these areas should still be viewed as developing themes rather than dominant current drivers.
For now, the most important point is that platinum combines improving macro conditions with a physical market that remains in deficit.
That makes it very different from gold, where monetary policy dominates the discussion.
Crude Oil: Hormuz is driving the marketCrude oil is currently the most headline-sensitive of the major commodity markets.
WTI is trading around $84 per barrel, while Brent is close to $90.
The central issue is Iran and the Strait of Hormuz.
Roughly one-fifth of global petroleum flows normally pass through the Strait, making it one of the most strategically important shipping routes in the world.
WTI fell to around $75.77 on 4 August when markets became more optimistic that progress towards a US-Iran agreement could reduce regional tensions and restore more normal shipping conditions.
That optimism faded quickly.
As doubts over an agreement increased, oil recovered above $80 and WTI subsequently traded as high as approximately $84.60.
The physical disruption is significant.
Around 5.5 million barrels per day of Middle Eastern oil production was estimated to have been offline on average during July. That is more than 5% of global oil consumption.
Around 600,000 barrels per day of regional production could also remain offline through 2027, according to current projections.
This is why oil has been reacting so aggressively to every development surrounding Iran and Hormuz.
The market is not simply pricing political uncertainty. It is pricing whether crude can physically reach global consumers.
The US inventory picture provides an important bearish counterweight.
The latest official EIA data showed commercial crude inventories increasing by around 2.5 million barrels to approximately 407 million barrels.
Cushing inventories also rose by around 2.4 million barrels.
More recent preliminary API data indicated an even larger build of around 9.1 million barrels, although that figure should be treated as preliminary until confirmed by official government data.
Refined products tell a different story.
US distillate inventories are around 107.2 million barrels, close to a 30-year seasonal low. Tight diesel availability and refinery disruptions have therefore helped keep refined-product markets firm even while headline crude inventories have increased.
OPEC+ is another bearish consideration.
The group has agreed to an additional production adjustment of around 188,000 barrels per day from September.
In normal conditions, extra OPEC+ supply would place downward pressure on crude prices.
The problem today is that additional production does not fully resolve a logistics crisis. Producing more oil is of limited benefit if shipping routes remain heavily disrupted.
That is why geopolitical risk continues to outweigh some of the more conventional bearish supply signals.
The longer-term risk is demand destruction.
If oil prices remain elevated for long enough, higher fuel costs can weaken consumer demand, increase business costs and eventually slow economic activity. At that point, the same price increase caused by a supply shortage can begin to reduce demand.
Four commodities, four different storiesThe recent moves across commodities demonstrate why traders need to understand the underlying transmission mechanism rather than simply watching whether prices are rising or falling.
Copper is being driven by tightening physical availability, falling non-US inventories and structural demand from electrification and technology.
Gold is being driven by weaker US employment, changing Federal Reserve expectations, the dollar, central-bank buying and geopolitical risk.
Platinum is being supported by repeated market deficits, limited inventories and resilient industrial and automotive demand.
Crude oil is dominated by physical Middle Eastern supply disruption and the Strait of Hormuz, with rising US inventories and additional OPEC+ production acting as the main bearish counterweights.
The common lesson is that commodity markets rarely move for one reason alone.
The strongest trading opportunities often emerge when several drivers begin to point in the same direction. Equally, the greatest risks often appear when price momentum looks strong but the underlying fundamentals start to diverge.
For traders, the task is therefore not simply to ask whether a commodity is bullish or bearish.
The more useful question is:
What is driving the move, and is that driver getting stronger or weaker?
EUR/JPY moves little for the second successive day, trading around 183.90 during the Asian hours on Wednesday. The currency cross is maintaining a mildly bearish near-term tone as it slips beneath the 50-day Exponential Moving Average (EMA) while holding above the shorter nine-day EMA. This alignment suggests the recent bounce is vulnerable to renewed selling while intraday dips still find some demand.
The 14-day Relative Strength Index (RSI) at 48.21 sits close to its midline, hinting at neutral momentum that neither strongly favors a continuation lower nor an immediate bullish reversal.
The primary support lies at the nine-day EMA at 183.46. A successful break below the short-term moving average would reinforce the bearish bias and put downward pressure on the EUR/JPY cross to fall toward the eight-month low of 179.37, reached on August 3, followed by the nine-month low of 175.70.
On the upside, the EUR/JPY cross could rise toward the primary resistance at the 50-day EMA at 184.54. Further advances above the medium-term moving average would cause a bullish emergence and support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.
Yen steadies as intervention gains hold after recent slideStrategists at Scotiabank note that the Yen is holding firm after the latest bout of volatility, with the currency “steady and showing signs of stabilization following Monday’s worrisome decline that hinted to renewed pressure and a rapid reversal of its recent intervention-driven gains.” They suggest the current price action indicates those intervention gains are, for now, being preserved despite lingering market concerns.
EUR/JPY: Daily Chart(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.07%0.00%0.08%0.05%0.11%0.24%0.17%EUR-0.07%-0.06%0.00%-0.02%0.02%0.18%0.10%GBP-0.01%0.06%0.04%0.03%0.06%0.24%0.16%JPY-0.08%0.00%-0.04%-0.03%0.01%0.15%0.09%CAD-0.05%0.02%-0.03%0.03%0.04%0.20%0.12%AUD-0.11%-0.02%-0.06%-0.01%-0.04%0.16%0.12%NZD-0.24%-0.18%-0.24%-0.15%-0.20%-0.16%-0.06%CHF-0.17%-0.10%-0.16%-0.09%-0.12%-0.12%0.06% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Gold prices rose in Philippines on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 8,670.10 Philippine Pesos (PHP) per gram, up compared with the PHP 8,607.13 it cost on Tuesday.
The price for Gold increased to PHP 101,126.10 per tola from PHP 100,391.80 per tola a day earlier.
Unit measure
Gold Price in PHP
1 Gram
8,670.10
10 Grams
86,700.75
Tola
101,126.10
Troy Ounce
269,670.00
FXStreet calculates Gold prices in Philippines by adapting international prices (USD/PHP) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices rose in Saudi Arabia on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 531.34 Saudi Riyals (SAR) per gram, up compared with the SAR 527.37 it cost on Tuesday.
The price for Gold increased to SAR 6,197.29 per tola from SAR 6,151.13 per tola a day earlier.
Unit measure
Gold Price in SAR
1 Gram
531.34
10 Grams
5,313.32
Tola
6,197.29
Troy Ounce
16,526.76
FXStreet calculates Gold prices in Saudi Arabia by adapting international prices (USD/SAR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices rose in United Arab Emirates on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 519.70 United Arab Emirates Dirhams (AED) per gram, up compared with the AED 515.82 it cost on Tuesday.
The price for Gold increased to AED 6,061.65 per tola from AED 6,016.47 per tola a day earlier.
Unit measure
Gold Price in AED
1 Gram
519.70
10 Grams
5,196.98
Tola
6,061.65
Troy Ounce
16,164.42
FXStreet calculates Gold prices in United Arab Emirates by adapting international prices (USD/AED) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices rose in Pakistan on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 39,250.39 Pakistani Rupees (PKR) per gram, up compared with the PKR 38,973.66 it cost on Tuesday.
The price for Gold increased to PKR 457,791.20 per tola from PKR 454,581.10 per tola a day earlier.
Unit measure
Gold Price in PKR
1 Gram
39,250.39
10 Grams
392,497.70
Tola
457,791.20
Troy Ounce
1,220,827.00
FXStreet calculates Gold prices in Pakistan by adapting international prices (USD/PKR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices rose in India on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 13,493.33 Indian Rupees (INR) per gram, up compared with the INR 13,402.99 it cost on Tuesday.
The price for Gold increased to INR 157,382.80 per tola from INR 156,329.80 per tola a day earlier.
Unit measure
Gold Price in INR
1 Gram
13,493.33
10 Grams
134,932.60
Tola
157,382.80
Troy Ounce
419,695.80
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
TL;DR: Gold has kept climbing even as Brent rebounded from $70 toward $90, a divergence that reflects markets betting the Fed won’t tighten again without proof oil is feeding into core inflation — and Wednesday’s CPI is the first test of that bet.
Gold Is Defying the Oil Signal Gold heads into Wednesday’s US CPI release with an unusual message from cross-asset markets. Brent has rebounded from around $70 in July to near $90 this week, yet Gold has continued to climb. At the same time, the 10-year Treasury yield is still contained below 4.75%, while markets put roughly even odds on a September Fed hold. Oil has surged, but rate markets haven’t followed.
That matters because the relationship looked very different earlier this year. During the first Iran-war shock, higher oil translated much more directly into inflation fears, higher yields, and a more hawkish Fed outlook — Gold often struggled against that combination. This time, markets appear much less willing to assume another energy shock automatically means another round of tightening.
So Wednesday’s CPI isn’t simply an inflation release. It’s the first test of a broader market bet: can oil rise toward $90 without forcing the Fed back toward tightening? Gold is currently trading as though the answer may be yes.
Core CPI Could Return All the Way to Pre-War Levels Jan’26 Feb’26 Mar’26 Apr’26 May’26 Jun’26 Headline CPI (y/y) 2.4 2.4 3.3 3.8 4.2 3.5 Core CPI (y/y) 2.5 2.5 2.6 2.8 2.9 2.6 Consensus expects headline CPI to slow from 3.5% to 3.4% y/y, while core inflation is forecast to edge down from 2.6% to 2.5%. The monthly progression shows how far both measures have traveled since the first oil shock:
A 2.5% core reading would be significant because it would complete a full round trip back to levels seen before the Iran war disrupted the inflation picture. Core CPI was 2.5% in January and February, then accelerated to 2.6% in March, 2.8% in April, and 2.9% in May, before easing back to 2.6% in June — a July reading of 2.5% would therefore suggest underlying inflation has effectively unwound the entire first-war acceleration.
If today’s data meet consensus, markets would have strong evidence the first oil shock didn’t permanently dislodge underlying inflation. But there’s a catch.
Today’s CPI Comes From a World That Has Already Changed July inflation data were collected before the current Hormuz escalation reached its most acute phase. The latest tanker attacks, collapsing shipping crossings, the reparations standoff between Washington and Tehran, and Brent’s push back toward $90 are largely early-to-mid-August developments — they sit mostly outside today’s CPI window.
That means a clean 2.5% core reading wouldn’t prove inflation has shrugged off the latest energy shock. It would prove something narrower, but still important: core inflation managed to return to pre-war levels during the calmer period between two oil shocks. That distinction is crucial because this second episode isn’t identical to the first.
This Oil Shock Is Smaller — But Potentially More Persistent The first Iran-war shock was violent and immediate. Brent surged toward $120, and March CPI recorded a 10.9% m/m jump in energy prices, the largest since September 2005. Gasoline posted its largest monthly increase since the series began in 1967.
The current move is less severe in magnitude — Brent has rebounded from around $70 to $90 rather than exploding toward $120. But the character of the disruption is different. This is increasingly a prolonged negotiation and shipping crisis, with confirmed tanker strikes, sharply reduced Hormuz crossings, and a widening diplomatic standoff, rather than simply a repeat of a fresh outright closure.
That creates a genuine open question for inflation: a violent energy spike can fade quickly if physical disruption is resolved, while a smaller but persistent increase in transportation, insurance, and energy costs could potentially bleed into underlying prices differently. Markets don’t yet know which version they’re dealing with.
August CPI Is Where the Hawkish Thesis Starts Getting Tested That’s why today’s CPI is best treated as a baseline. The more consequential test comes with August CPI on September 11, because that release will begin incorporating the current rebound in energy prices. Even then, direct energy effects should show up in headline inflation sooner than in core — second-round pass-through through transportation, production costs, goods, and services can take longer. But August will still provide the first meaningful evidence on whether underlying inflation can remain anchored while Brent trades around $90.
That question goes directly to the hawkish argument advanced by officials such as Neel Kashkari, Lorie Logan, and Beth Hammack, as well as dissenting voices at the latest FOMC meeting. Their concern isn’t simply that energy prices temporarily lift headline CPI — it’s that prolonged energy and supply pressure eventually spreads into core inflation and forces the Fed to maintain or increase restraint.
The next comparison is therefore unusually clean: if core inflation stays around 2.5–2.6% even after the renewed oil shock begins entering data, it would provide strong evidence energy pressure is staying largely contained. If core starts accelerating again, hawks would have much stronger evidence that second-round effects are taking hold. Today tells markets where that experiment starts.
Weak Payrolls Have Raised the Bar for Another Hike The Fed is also confronting a labor backdrop similar to the start of the year, when markets and policymakers were debating rate cuts. July payrolls contracted, while May and June employment were revised substantially lower. That has made another rate hike much harder to justify, particularly with policy already at 3.50–3.75%.
There’s now a genuine reason for the Fed to eventually reduce restraint if labor deterioration continues. But inflation prevents an immediate pivot — core CPI around 2.5–2.6% is still above target, while renewed oil pressure creates another potential upside risk. The Fed therefore has little room to cut now, even as the case for additional hikes has weakened.
That leaves a fairly natural policy response if today’s CPI lands close to consensus: hold and wait. That would be the baseline as the Fed assesses August NFP on September 4, then August CPI on September 11, before the September 15–16 FOMC meeting. That policy expectation is supportive for Gold — another hike becomes harder to justify, while weaker labor conditions keep eventual easing risk alive.
Gold Is Trading the Rate Market’s Skepticism Gold’s rally therefore looks less like a pure geopolitical or inflation-fear trade and more like a bet on the rate market refusing to follow oil. Brent has surged, but Treasury yields haven’t broken higher. Fed hike pricing has barely moved. Gold has strengthened anyway.
If markets genuinely believed $90 oil was about to restart a tightening cycle, those signals should look different. Instead, investors appear to be saying the Fed now needs evidence of actual pass-through into core inflation before it can justify more tightening — especially after labor-market deterioration. That gives Gold a relatively favorable setup into CPI: a benign reading doesn’t need to prove the latest oil shock is harmless. It only needs to avoid giving hawks enough evidence to rebuild tightening expectations today.
ActionForex’s Technical View on Gold The technical problem is that Gold has already reached an important resistance zone. The rebound from 3,942.43 is pressing 4,417.62, the 161.8% projection of 3,942.43 to 4,203.21 from 3,995.82. At the same time, price is approaching the medium-term falling trendline that has defined the broader decline this year, making the reaction to CPI potentially sharper than usual.
As long as 4,317.72 support holds, the near-term outlook stays constructive. A core CPI reading around 2.5–2.6%, particularly if yields remain contained, should allow Gold to keep challenging current resistance. A decisive break would open room toward 4,575.31, the 38.2% retracement of the decline from 5,598.75 to 3,942.43.
But positioning near resistance creates clear downside risk if inflation surprises substantially higher. A strong core CPI print could revive tightening expectations and trigger a sharp rejection. A break below 4,317.72 would indicate the rebound has lost near-term momentum, bringing a deep and swift pullback to the 55 4H EMA near 4,244.25 and possibly below.
That makes the CPI outcome less symmetric than headline consensus suggests. A broadly expected reading keeps the existing Gold thesis intact; it probably takes a material upside surprise to seriously disrupt it.
Today Is the First Check. September Is the Bigger One. Wednesday’s CPI can tell markets whether underlying inflation returned to pre-war levels before the latest oil rebound. It can’t yet tell them whether inflation will stay there. That’s why Gold’s current rally is fundamentally a bet on patience — markets are betting the Fed won’t react to $90 oil alone without evidence that higher energy prices are once again contaminating core inflation.
A 2.5–2.6% reading today would reinforce that view and likely keep Gold’s rebound alive, even if current resistance slows immediate upside. A substantial upside surprise would challenge it quickly. But the bigger verdict comes in September: today’s July CPI decides whether Gold can keep betting against another Fed hike, while August CPI will begin deciding whether $90 oil eventually proves that bet wrong.
Key Takeaways Gold has climbed even as Brent rebounded from $70 to $90, a divergence from earlier this year when oil spikes reliably lifted yields and hurt Gold. A 2.5% core CPI print today would complete a full round trip back to pre-war inflation levels, but the data predates the most acute phase of the Hormuz escalation. August CPI on September 11 is the more consequential test, since it will be the first release to capture the current oil rebound’s actual pass-through into prices. Weak payrolls and heavy downward revisions have raised the bar for another hike, but above-target core inflation still rules out an immediate Fed pivot to cuts. Gold faces resistance at 4,317.72-4,417.62; an in-line CPI print keeps the rebound intact toward 4,575.31, while a hot surprise risks a swift pullback to 4,244.25.
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.
Key Points:The US CPI report will likely drive the next move in gold and silver. Gold maintains bullish potential toward $4,500 while holding above $4,300. Silver’s breakout above $64 brings the $72 resistance into focus.
In this article:Gold
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Gold ForecastSilver
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Silver ForecastThe geopolitical tensions support the safe haven assets on Wednesday. The shipping attacks in the Middle East raised fears of supply disruptions and escalation. The missile launch by North Korea increased the uncertainty. The gold (XAU) price rebounds higher to $4,400 after a slight correction on Tuesday. These risks could also support silver but its industrial demand can limit any safe-haven gains.
The rising oil prices produce a mixed outlook for gold and silver (XAG). The higher energy costs can boost inflation and demand for precious metals as an inflation hedge. But if inflation remains high, the Fed could also be tempted to keep rates up or hike them again. The increase in interest rates tends to boost bond yields which can put pressure on precious metals.
The next move in gold and silver will likely be driven by the upcoming US CPI report. A softer inflation could weaken the U.S. dollar and reduce expectations of rate hike in September. Silver can benefit more if the decline in the rate expectations also improves the economic sentiment. But the stronger inflation can support the US dollar and US Treasury yields, which can increase the pressure on precious metals despite the geopolitical risks.
Gold Eyes $4,500 as US CPI Drives the Next Move The daily chart for spot gold shows that the price reversed on Tuesday after marking a high at $4,435. However, the price showed positive momentum again on Wednesday, which indicates that it may continue to rally toward the 200-day SMA at the $4,500 level. The RSI is also slightly below the 70 level, which indicates further upside in the short term.
But the market is now waiting for the CPI release, which may drive the next move in the gold market. The key reversal candle on Tuesday was due to the strong resistance near $4,400, which was discussed in the previous analysis.
A break above $4,500 will likely open the door for a strong rally toward the $5,000 area, which is defined by the descending trend line of the wedge formation.
The importance of the current support is also observed on the weekly chart. The chart shows that this support is defined by the ascending trend line. This line stretches from the October, 2023 low. A break above $5,000 will indicate that the bottom is confirmed and it will likely introduce a strong rally in the gold market toward new record highs.
The 4-hour chart for spot gold also shows that the price is attempting to break the key resistance at $4,370. This resistance formed the support on Wednesday. The price must remain above this level in the short term to build the strength to break the $4,435.
Silver Breaks Above $64 as Bulls Target $72 The daily chart for spot silver also shows a key reversal candle on Tuesday. But the price has already broken above the $64 area in the short term, which opens the door for a rally toward $72.
If the price continues to trade above $60, a strong move toward the $72 area is likely. The RSI also remains below the 70 level, which indicates the possibility of upside momentum in the silver market in the short term.
On the other hand, a break below the $60 level will likely push silver prices back toward the $55 and $50 areas.
The 4-hour chart for spot silver also shows strong positive structure within the descending wedge pattern. The immediate resistance in spot silver remains the $70-$72 area.
A break above $72 will likely push spot silver prices toward the $90 level. But a break below the $60 level will likely cause the price to continue dropping toward the lower boundary of the descending wedge pattern in the $50-$55 area.
US CPI Holds the Key for Gold and Silver Gold and silver remain supported by geopolitical risks and rising oil prices. But the US CPI report will likely decide the next major move. Gold must remain above $4,300 to target $4,500. A break above $4,500 could open the way toward $5,000. Silver remains positive above $60 and could test the $70-$72 area. A break above $72 may push silver toward $90. The stronger inflation could lift the US dollar and Treasury yields and put pressure on both metals.
Read more: Weak Dollar Supports Rebound Ahead of US CPI
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Muhammad Umair is a finance MBA and engineering PhD. As a seasoned financial analyst specializing in currencies and precious metals, he combines his multidisciplinary academic background to deliver a data-driven, contrarian perspective. As founder of Gold Predictors, he leads a team providing advanced market analytics, quantitative research, and refined precious metals trading strategies.
Silver price (XAG/USD) trades 1.1% higher at around $65.40 during the Asian trading session on Wednesday. The white metal reflects strength ahead of the United States (US) Consumer Price Index (CPI) data for July, which will be published at 12:30 GMT.
According to estimates, the US headline CPI grew at an annual pace of 3.4%, slower than 3.5% in June. In the same period, the core CPI – which excludes volatile food and energy items – is also seen lower at 2.5% Year-on-Year (YoY) from the previous reading of 2.6%.
On a monthly basis, the headline and core inflation grew by 0.1% and 0.2%, respectively.
Investors will pay close attention to the US inflation data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook. In the latest monetary policy announcement, Chairman Kevin Warsh warned of upside inflation risks, adding that the board is committed to bringing inflation down to the 2% target.
Meanwhile, surging oil prices due to restricted global energy supply on the back of Middle East conflicts will likely limit the Silver price’s upside.
According to data from Kpler, shipping traffic through the Strait of Hormuz, a vital passage to almost 20% of global energy supply, was recorded at just six vessels on August 10, down from a recent 10-day average of about 11. This remains a massive decline from pre-war levels of 130 to 140 ships daily, Reuters reports.
On Tuesday, the CME Group said that it will allow round-the-clock trading in its 100-ounce silver futures contract from September after seeing a strong response for the 1-ounce Gold futures contract, which began on July 24, Reuters reports.
Silver Technical Analysis
In the daily chart, XAG/USD trades at $65.53, extending its advance above the 20-day exponential moving average (EMA) at $61.28 and reinforcing a bullish near-term bias.
Price action has steadily pushed away from the prior consolidation zone, while the Relative Strength Index (14) at 61.21 stays in positive territory but short of overbought, hinting that upside momentum remains constructive without being overstretched.
On the downside, immediate support is seen at the 20-day EMA around $61.28, which underpins the broader rebound and would be the first line of defense on any pullback. Looking up, the white metal would attempt to extend the advance towards the June 17 high at $71.56 if it manages to break above the August 10 high at $66.59.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Gold is back on the bids and looks to regain the $4,400 level in Wednesday’s Asian trading, having found buyers near the $4,350 region. All eyes remain on the high-impact US Consumer Price Index (CPI) data, which could determine if Gold stretches higher or corrects sharply.
Gold’s fate hinges on the US CPI inflation reportGold has regained its upside momentum, following a brief profit-taking pullback from the ten-week high of $4,435 reached on Tuesday.
Nothing appears to have changed in the fundamental backdrop as the deadlock between the United States (US) and Iran over the talks on the reopening of the Strait of Hormuz and the US and Yemen's Iran-aligned Houthis’ separate attacks on shipping continues to keep Oil prices and inflation concerns elevated.
However, that fails to deter Gold bulls, as they remain hopeful of another benign inflation report from the US, following the weak Nonfarm Payrolls print for July, which helped markets dial down expectations on a US Federal Reserve (Fed) interest rate hike in September.
At the press time, the odds of a September Fed rate hike stand at a coin-toss level, according to the CME Group’s FedWatch Tool, shifting the focus back to the US CPI data release, particularly the core inflation readings, as they are shielded from the war-driven energy swings.
The annual core CPI is seen rising by 2.5% in July, slowing from a 2.6% increase in June. Meanwhile, core CPI inflation is expected to climb to 0.2% month-over-month (MoM) in July, following a flat reading in June.
Gold faces two-way risks ahead of the US inflation showdown, with hotter-than-expected core CPI readings likely to ramp up bets on a September Fed rate hike, boosting the US Dollar (USD) and US Treasury bond yields at the expense of the non-yielding Gold.
On the other hand, softer core prints could provide fresh legs to the bullion’s uptrend, as the data would further reduce bets on Fed rate hikes this year and fuel a USD downtrend.
However, the geopolitical risk premium will continue to remain in play and could leave Gold’s initial reaction to the CPI release short-lived.
Gold holds firm as stagflation narrative supports CTA lengthAccording to TD Securities, “precious metals maintain a bid,” with the yellow metal “holding gains, and maintaining CTA length north of $4,400/oz, even as oil prices and rates continue to churn higher.” The firm notes that “recent price action continues to hint at a growing stagflationary theme in the gold market,” adding that while “inflation data and Fed pricing will remain keenly watched, a stronger-than-expected inflation print may be needed to shake the current narrative.”
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,398.04. The metal holds a bullish near-term bias as the spot price remains above the 21-day, 50-day and 100-day simple moving averages (SMAs), with the latter providing nearby trend support around $4,388.40. The 200-day SMA at $4,500.55 looms as the next major upside barrier, while the Relative Strength Index (14) at 67.03 approaches overbought territory, hinting that the latest advance could be losing momentum as it nears that longer-term hurdle.
On the downside, immediate support is seen at the $4,398.04 area, followed closely by the 100-day SMA at $4,388.40, forming a shallow demand cluster before deeper support emerges at the 50-day SMA near $4,147.80 and the 21-day SMA around $4,133.91. On the topside, a decisive break above the 200-day SMA at $4,500.55 would open the door for a continuation of the broader bullish trend, while failure to clear this level would keep gold confined to a consolidative phase above its short- and medium-term averages.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Consumer Price Index ex Food & Energy (MoM) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as the Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The MoM print compares the prices of goods in the reference month to the previous month.The CPI Ex Food & Energy excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.
The US Federal Reserve has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
Inflation FAQs Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
Inflation days typically produce larger gold trading ranges Nearly one in four post-pandemic CPI days have seen 2%+ ranges $4,367 remains key level for XAU/USD Gold has had an extremely strong run, one that, as covered in a separate note yesterday, is close to unprecedented based on moves in traditional macro drivers such as the US dollar and US Treasury yields over such a short period. But after such a pronounced surge, there are now some warning signs that the move may be running out of steam.
What a Decade of Inflation Days Shows Based on a look back at inflation days over the past decade, it’s clear these releases generally don't provide a huge directional edge for gold traders. That said, they do tend to generate slightly larger trading ranges and a modest skew towards positive closes compared with non-inflation days.
Source: LSEG, FOREX.com
The average intraday range has been 1.54%, compared with 1.41% on other sessions, while gold has closed higher on 60.5% of inflation days versus 53.5% of non-inflation days.
While there’s no significant divergence in performance, that’s not to say these releases don’t provide trading opportunities. Over the past decade, around one in five inflation reports has coincided with an intraday range of at least 2%, with the vast majority sitting somewhere between 1% and 2%.
Source: LSEG, FOREX.com
Breaking the sample down either side of the pandemic also reveals an interesting shift. Before March 2020, inflation days produced a stronger skew towards positive closes and larger average gains. Since then, the directional edge has weakened, but volatility has increased, with the proportion of sessions generating an intraday range of at least 2% more than doubling from 11.6% to 23.7%.
That perhaps shouldn’t come as a surprise. Before the pandemic, inflation was generally low and often undershot expectations. Since then, we’ve moved into a much higher inflation regime marked by repeated supply shocks and far greater uncertainty. The predictability of the pre-pandemic world simply isn’t there anymore.
Of course, historical tendencies provide context rather than certainty and offer no guarantee of how gold will react later today.
XAU/USD Technical Setups
Source: TradingView
Looking at XAU/USD on the daily chart, the price failed to hold above the 100-day moving average on Tuesday, leaving behind a daily candle resembling a shooting star. Coming after such a strong rally, that raises the risk of a near-term reversal. Depending on how price action develops today, there is also the potential for a three-candle evening star to form.
For now, the price continues to find support around $4,367, a level that has acted as both support and resistance earlier this year. That makes it an obvious level to watch heading into US inflation later in the session.
If the bearish reversal signal is confirmed, one potential setup would be to wait for a break beneath $4,367. If the price can break below and hold there, shorts could be considered with a tight stop above for protection, targeting $4,300 initially before $4,200, part of the breakout zone smashed through last week.
However, this is not a slam dunk case for shorts. RSI (14) and MACD continue to point to the bulls having the ascendancy, while XAU/USD has already bounced from $4,367 during Asian trade on Wednesday.
If the price continues to hold above the level, pullbacks towards $4,367 could be bought with a tight stop beneath for protection. The first target would be Tuesday’s high around $4,435, with the 200-day simple moving average near the psychologically important $4,500 level beyond that.
Gold (XAU/USD) attracts some dip-buyers during the Asian session on Wednesday, stalling the previous day's retracement slide from the $4,435 region, or the highest level since June 5. The commodity, however, remains below the $4,400 mark as traders await key US inflation figures for fresh cues about the US Federal Reserve's (Fed) future policy path before placing fresh directional bets on the non-yielding yellow metal.
Friday's weak US Nonfarm Payrolls (NFP) report pointed to signs of a cooling labor market and undermined the case for the Fed to raise interest rates. Investors, however, remain worried about inflation risks stemming from volatile energy prices, which might force the US central bank to adopt a more hawkish stance. In fact, crude oil prices climbed to a one-and-a-half-week high on Tuesday after an advisor to Iran’s Supreme Leader Mojtaba Khamenei said that the Strait of Hormuz will not be opened until the US meets Tehran's demands.
Adding to this, Iran-backed Houthi rebels in Yemen escalated attacks on vessels in the Red Sea and Bab el-Mandeb, particularly targeting Saudi-linked ships. This led to increased war-risk premiums, which act as a tailwind for crude oil prices and should benefit the safe-haven Greenback. Furthermore, hawkish Fed expectations remain supportive of elevated US Treasury bond yields, further underpinning the buck and warranting caution before positioning for an extension of the XAU/USD pair's strong move up witnessed over the past week or so.
Analysts at Deutsche Bank highlighted that the sharp move in energy markets added to pressure on rates, noting that Brent crude “(+4.99% to $87.72/bbl) rallied past $85/bbl for the first time this month, whilst the 10yr Treasury yield (+6.2bps) unwound the entirety of its decline after Friday’s payrolls with September Fed hike pricing returning to above 50% ahead of tomorrow's CPI.” According to the bank, “that backdrop of higher oil prices and rate hike speculation meant it was a tricky session for sovereign bonds around the world,” with a “consistent picture of yields moving closer back to the highs from late-July.”
XAU/USD daily chart
Technical AnalysisThe metal is hovering around the 100-day Simple Moving Average (SMA), though it remains capped beneath a dense band of overhead resistance, starting with the 50.0% Fibonacci retracement of the April-June fall and extending towards the 200-day SMA at $4,500.51, suggesting that bulls need a clear break higher to regain control.
On the downside, immediate support is provided by the 100-day SMA at $4,388.33, with further cushions at the 38.2% retracement at $4,298.48 and the 23.6% level at $4,161.40. A break below the latter could expose the structural floor around $3,939.81.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
On Wednesday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7882 compared to the previous day's fix of 6.7900 and 6.7430 Reuters estimate.
PBOC FAQs The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
US inflation surprises remain subdued versus history Fed rate hike pricing has eased through August EUR/USD grinds higher within ascending channel USD/JPY coils beneath 159.37 resistance For all the talk about today’s US inflation report, it is debatable whether anyone truly has a consistent edge in predicting how the data will print, let alone how markets will respond over a longer time frame. Looking at price action across major currency pairs heading into the release and identifying the technical levels that matter provides a framework as good as any for anticipating or reacting once it comes out.
No Repeat of 2022 Relative to the supply shock-driven inflation surge coming out of the pandemic and Ukraine war, the inflationary impact from the latest bout of energy price strength has so far been far less significant. Despite disruptions to energy supplies coming out of the Gulf, Citi’s US Inflation Surprise Index shows that, over recent years, inflation prints have by and large either met or undershot expectations.
The index measures whether inflation data is coming in above, in line with, or below market expectations, with readings above zero signalling upside surprises and readings below zero indicating downside surprises.
Source: LSEG, FOREX.com
Of course, that trend does not eliminate the risk of an upside surprise today. But it does suggest the recent skew has been towards inflation meeting or undershooting expectations rather than exceeding them.
Based on forecasts compiled by the Wall Street Journal, monthly estimates for headline CPI range from 0% to 0.16%, centred around a median of 0.12%. For core, the range is 0.16% to 0.26%, with the median at 0.22%. That leaves the hurdle for an upside surprise relatively low.
Importantly, it will not just be the headline figures that matter. Traders will be looking for evidence that inflationary pressures are becoming more entrenched in core services excluding housing, which would provide a read on domestically generated price pressures and labour market conditions. Core goods prices will also be important in assessing whether tariff pass-through is largely complete.
Those components will help shape expectations for the PCE inflation report later this month, with PPI due Thursday providing another piece of the puzzle.
Fed Hike Bets Retreat
Source: TradingView
Despite the re-emergence of energy-led inflationary pressures, market pricing for Fed rate hikes out to the June meeting next year has been edging lower in August. According to Fed funds futures, around 44 basis points of tightening is priced over this period, with the September meeting effectively deemed a coin flip.
Back in late July, around 62 basis points of hikes were priced over the same period. But a run of relatively tepid US economic data, following a series of strong beats earlier this year, including an underwhelming payrolls report last Friday, has curtailed hawkish pricing.
Euro Retains Its Bid
Source: TradingView
Looking at EUR/USD, we have seen a series of bullish breakouts over recent weeks. The first came from a minor downtrend in the wake of the Fed meeting two weeks ago. Then came the joint intervention by the US Treasury and Japan’s Ministry of Finance, which saw the pair bounce strongly from beneath former resistance around 1.1480, where the 50-day simple moving average was also located.
Since then, the price has settled into a grind within an ascending channel, breaking above downtrend resistance in place from the highs set earlier this year. That slowdown in the bullish move has coincided with renewed energy price strength, with the Gulf effectively shut as geopolitical tensions between Iran and the United States escalate again. Even so, it has not been enough to derail the euro yet.
The pair continues to attract bids within the ascending channel that formed from the 23.6% Fibonacci retracement of the January to June bear move, leaving the near-term options clear cut.
While the structure holds, longs can be considered on dips towards the lower end of the channel, targeting a retest of the 100-day simple moving average, which capped the pair late last week, followed by the upper end of the structure. Beyond that, the 38.2% Fibonacci retracement at 1.1614 comes into view, with the 200-day simple moving average at 1.1627 not far above and now flatlining.
On the downside, a break of the lower end of the ascending channel would bring the 23.6% Fib back into focus. Beneath that, 1.1480 is the next level of note, having previously acted as resistance, followed by the 50-day simple moving average.
Longs are marginally favoured over shorts, with the oscillators still siding with bulls even though upside momentum is no longer strengthening. RSI 14 remains above the neutral 50 level at around 60, while MACD has staged a bullish crossover and moved into positive territory, although it too is flattening out.
While upside momentum is no longer building, the broader technical picture suggests retaining a modest bullish bias may be more advantageous than turning bearish.
Yen Weakness Refuses to Fade
Source: TradingView
As correctly flagged in my weekend USD/JPY note, upside risk in the pair has played out so far this week. Importantly, that has occurred despite both the soft US payrolls report and a further pullback in Fed hike pricing, reinforcing the point that yen weakness is broader and more structural than simply a US rates story.
Following the push above last week’s high, USD/JPY finds itself coiling in what resembles an ascending triangle on the four-hourly chart on the left. Gains have been capped around 159.37, while dips continue to be bought at progressively higher levels. The structure has not been in place for an extended period, but it still warns of the potential for an eventual topside break and continuation of the rebound seen so far in August.
On the upside, the first levels of note are the 100-day simple moving average on the daily chart on the right, followed by 160.73, the former record high hit in late April. That level has flipped between support and resistance on subsequent tests, leaving it as an obvious reference point if the rebound extends.
On the downside, the gradually rising trendline visible on the four-hourly chart runs from the Liberation Day lows in April last year. Even though it was broken convincingly during the latest intervention episode, the price respected it earlier this week, suggesting it remains relevant. It kicks in today around 159.00.
Beneath that, 158.58, last week’s high, is the next level of note, followed by 157.95, which has acted as both support and resistance since the intervention episode.
The oscillators are mildly bullish, even though upside momentum is no longer building. RSI 14 is flatlining above the neutral 50 level at around 61, while MACD staged a bullish crossover earlier this month and has since moved into positive territory, although it is now converging back towards the signal line. Overall, the setup still favours retaining a bullish bias on the four-hourly timeframe.
The GBP/JPY ended Tuesday’s session unchanged at 215.17 as buyers remained reluctant to test the 50-day Simple Moving Average (SMA) at 215.43, seen as the first resistance level on its way to re-test yearly peaked at around 219.61.
GBP/JPY Price Forcast: Technical outlookPrice action suggests the GBP/JPY is facing key resistance that could cap the advance, which could open the door for sideways trading. Further confirmation of this, is the Relative Strength Index (RSI): The RSI shifted flat exactly at the 50-neutral level, an indication that neither buyers nor sellers are fully committed to push the cross above or below familiar levels.
On the upside, the first key resistance is the 50-day SMA, followed by the 216.00 mark. A breach of the latter will expose the 216.50 figure, followed by the 217.00 psychological mark
Downwards, the GBP/JPY first support would be the 215.00 milestone, followed by the 100-day SMA at 214.53. Below this, sits the 200-day SMA at 217.05 ahed the August 7 low of the day (LOD) at 211.47.
GBP/JPY Price Chart – Daily
GBP/JPY daily chart Japanese Yen FAQs The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
