Well, good morning — and what a way to end the week!
Stocks pushed higher again on Friday, sending the S&P to yet another record high as ‘the players’ (investors, traders and the algo’s) digested a surprisingly weak July jobs report and immediately concluded that Kevy and the FOMC may have one less reason to raise rates in September.
Translation: Bad news is Good news for the markets. (But hold that thought).
As the bell rang to close out the week - The Dow had gained 151 pts, the S&P up 48 – closing at another new record high, the Nasdaq added 345 pts, the Russell up 33 pts, the Transports added 81pts, the Equal Weight S&P gained 62 pts while the Mag 7 added 260 pts.
And for the week? Well, let’s just say it was ‘fairly’ impressive too. The S&P gained 3.6%, the Dow added 3%, the Nasdaq surged 5.2% and the Russell gained 3.5%.
At 8:30 am – we got the much-anticipated July NFP report…. And this is where it gets interesting. July Non-Farm Payrolls came in at NEGATIVE 23,000 jobs versus the expectation for PLUS 80,000. – Yeah, that’s not a typo…Negative 23,000. And if that wasn’t a kick in the pants – They revised May and June DOWN by another 103,000 jobs combined.
May was revised from +129k to +63k, while June was revised from +57k to just +20k. So, over the last three months — May, June and July — the economy has created an average of just 20,000 jobs per month.
Now while THAT got everyone’s attention, it wasn’t over…. The unemployment rate FELL to 4.1% from 4.2%. And so, you ask - How does that happen? Simple – people left the labor force.
The labor-force participation rate fell to 61.4% from 61.5%.
So don’t look at the drop in the unemployment rate as positive. The labor market is cooling. And the algo’s went all in.
Why? Because suddenly the odds of a rate hike in September aren’t so grand anymore…. Before Friday’s mornings report, the market had been pricing in a 58.7% chance of a September rate hike, after the report, those odds fell to 42.9%. Just to put it in perspective — two weeks ago, those market-implied odds were closer to 70%.
But here’s something else that should make you smile. The prediction markets — Kalshi and Polymarket — were already ahead of Friday’s NFP report. They had the odds of a September rate hike sitting in the low-40% range BEFORE the jobs number hit. Now? They’re down to about a 34% chance of a hike.
And notice what NO ONE is pricing in — a rate cut. Something I have been saying for weeks.
Recall what we discussed last week: the bond market is already doing some of the Fed’s work for it. Long-end rates have moved higher, financial conditions have tightened and the Fed hasn’t had to do a damn thing — other than jawbone.
And that sent bonds higher and yields lower. The TLT and TLH rose by 0.3% and 0.2% respectively. The 2-yr treasury ended Friday yielding about 4.19%, down from 4.25% on Thursday. The 10-yr ended at 4.65%, down from 4.69% while the 30-yr ended at 5.19%, down from 5.22%.
Even after Friday’s rally, a 10-year yielding 4.65% and a 30-year yielding 5.19% are NOT necessarily what you would consider ‘accommodative’. 30 yr Mortgage rates are at 6.7%, for a fico score of 740 or better – higher if you score is lower, commercial real estate loans, corporate borrowing costs, auto loans — all of those remain elevated.
But let’s not get carried away...Because there is another side to this story. On Friday investors interpreted weaker economic data as GOOD news, because weaker data means less pressure on the Fed.
But there is a line and at some point, bad news stops being good news and becomes...well...BAD NEWS.
Right now, investors believe the economy is slowing — NOT collapsing – that’s the good news…. That’s the sweet spot.
But if the next NFP report continues to deteriorate, then investors will stop asking ‘When is Kevy is going to raise rates?’ and start asking ‘When will he cut rates?’ (think weakening economy). And if that happens, then investors will ask whether corporate earnings estimates are too high.
That is when BAD NEWS becomes BAD NEWS.
We aren’t there yet, but this is not the time to take a nap!
Now let’s talk about GOLD — because THAT just got even more interesting. Gold exploded higher on Friday – up 2.4% or $102/oz – to end the day at $4,340.
And yes — the weak jobs report helped. Lower Treasury yields helped. Lowered expectations for another Fed hike helped never mind the ongoing geopolitical uncertainty that also provides some support (think the safety trade).
Now while all that helped…. I still think Friday’s move was much more TECHNICAL and MOMENTUM driven than anything else – something we discussed on Friday morning.
Recall how gold spent roughly 7 weeks trapped in that $4,000/$4,200 trading range. Then last week it pierced trendline resistance around $4,160 and broke up and through the upper end of the range at $4,200 and BOOM!
The algo’s got fired up, the Momo guys piled on, shorts were forced to cover and chased it higher. So, Friday’s jobs report didn’t CREATE the gold breakout, it validated it and that’s an important distinction.
The weak jobs number gave an already bullish technical setup the catalyst it needed to accelerate. That’s why I would say the move was 70% technical/momentum and 30% fundamental.
We’re in the $4,160/$4,500 trading range. On any pullback, watch $4,160 ish level - if gold holds it, then the breakout remains intact. Now if we pierce $4,500 with conviction? Then we will have another conversation. This morning gold is trading unchanged.
Now oil remains a problem. WTI closed Friday at $77.08 and this morning it is back on the move, up about $1.20 or 1.3% as traders digest the latest headlines out of Iran – that have raised the ante….
Over the weekend, Iran laid out a ‘new’ list of demands that it says must be met before the Strait of Hormuz fully reopens. So, the idea that Scotty thinks we ‘have a deal’ - well, think again.
They want the US to:
End military threats and insults against its national and religious values.
Permanently halt attacks against Iran and its regional allies in Lebanon, Palestine, Yemen and Iraq. All places that harbor their terrorist proxies.
Lift the U.S. naval blockade and withdraw U.S. naval and air forces from around Iran.
OK – what this tells me is that we are not even close to being over.
And that is exactly why oil remains a problem for the markets. Because as long as the Strait remains closed, oil is going to carry a geopolitical risk premium. The see/saw back and forth - One headline suggesting progress, the next suggesting a stalemate will continue to cause market angst. Trendline resistance is at $81.40, if we break up and thru – then I suspect we could see $90 oil again fairly quickly. Should we get a deal, then yes, oil will decline, but that seems more unlikely right now.
Remember – Higher oil feeds directly into the inflation conversation, inflation feeds into the bond market and the bond market feeds directly into equity valuations. So, if crude starts making another run, then the conversation about easing financial conditions becomes more complicated.
Now, Tehran is clearly playing for leverage. They know Americans are tired of a conflict that has dragged on far longer than anyone originally expected, and they know the midterm elections are now less than three months away. So, they have every incentive to test Trump’s willingness to stay the course.
Because until we get a real agreement, the geopolitical premium isn’t going away – and neither is the volatility in crude.
There is not eco data today – but we will get the July CPI and PPI on Wednesday and Thursday – both are expected to lower. Friday will give us the latest Retail Sales numbers along with the U of Mich sentiment surveys.
While earnings season has slowed, there are several reports worth paying attention to this week - particularly around Quantum Computing - QUBT, AI infrastructure - CRWV, networking - CSCO, Semi Equipment – AMAT and fintech - NU.
European markets are flat.
US futures are mixed as the week begins. Dow futures are down 15 pts, S&P’s up 12, Nasdaq up 135 pts while the Russell is down 5 pts.
The S&P 500 closed at 7,757 – up 47 pts. This morning – European market action and US futures action suggests the mkt will churn. We are now in the middle of August and are truly in the Dog Days of summer…Much of Europe is on vacation, and in the US – many families are also on vacation. Volumes are lower and so moves can be exaggerated (in both directions).
Technically – trendline support is way down at 7500. Resistance is somewhere between 7,900/ 8,000.
Orzo saladThis is a great summer dish just to have in the fridge. It is simple to make – no longer than 12 mins max.
For this you need: 1 lb. of Orzo pasta, garlic, olive oil, fresh chopped spinach, Ricotta Salata Cheese and s&p.
Bring a pot of salted water to a boil and add in the Orzo. Let it cook until aldente – maybe 6 mins.
While this is cooking – heat some olive oil in a pan and sauté the sliced garlic…. allowing the oil to take on the garlic flavor – do not burn the garlic…. Now remove from heat and set aside. Cut the Ricotta Salata into small bite size cubes – set aside.
When the Orzo is cooked – strain – always keeping a mug of pasta water.
Now return the Orzo to the pot and add back a bit of the water – mix to re-moisten – do not let it puddle – let it absorb…. Err on the side of less- b/c you can always add more…..…. now toss in the fresh spinach leaves, and the oil and garlic – mix well to coat. (You want just enough oil to coat the pasta – you do not want the pasta bathing in the oil).
Now add in the Ricotta Salata and mix again. Put it in a bowl and refrigerate.
Done. It is a perfect side dish to any summer BBQ meal or is even good to just eat right from the bowl.
GBP/USD enters the week of 10–14 August near 1.3500 – its highest level since 15 July. Sterling is building on the momentum from a sharp decline in the dollar following a weak US labour market report, which reduced expectations of a Federal Reserve rate hike in September. Further support has come from the drop in oil prices: cheaper energy is easing inflation risks and reducing pressure on the UK economy.
Geopolitics remains a key factor. Donald Trump announced progress in negotiations between Iran and Oman regarding the Strait of Hormuz, although no final agreement has yet been reached. A further decline in oil prices would reinforce expectations that the Bank of England can maintain a gradual approach to monetary policy. At its last meeting, the regulator left rates unchanged, and Andrew Bailey confirmed that the disinflation process continues.
The main event for sterling this week will be Thursday’s preliminary GDP estimate for the second quarter. The economy is expected to grow by 0.2% quarter-on-quarter, down from 0.6% previously, with the annual rate projected at 1.6% versus 0.9%. June GDP is forecast to rise by 0.1%. Stronger-than-expected data would support GBP/USD, while a marked slowdown could put renewed pressure on the pound.
On the US side, the key release will be July inflation data on Wednesday, with core CPI expected at 2.5% year-on-year and headline CPI at 3.4%. Thursday brings PPI, followed by retail sales and the University of Michigan’s preliminary consumer sentiment index on Friday. Weak inflation and consumer figures could weigh heavily on the dollar and support further GBP/USD gains, while sustained price pressures would strengthen the case for Fed tightening.
Technical Analysis
On the H4 GBP/USD chart, a wide consolidation range is forming around the 1.3470 level. An upside breakout would open the way for a move towards 1.3522 and then 1.3535. A downside breakout would suggest a move towards 1.3436, and a break below this level would open the way for the trend to extend to 1.3190. The MACD indicator supports this scenario, with its signal line above zero and pointing downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3470 level, currently extending between 1.3434 and 1.3500. A move lower towards 1.3470 is expected, followed by a move higher to 1.3535. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing downwards. In the short term, a decline towards 20 is expected, followed by a rise towards 80.
Conclusion GBP/USD has started the week on a strong footing, trading near its highest level since mid-July. The pound has benefited from a weaker dollar following soft US labour market data and falling oil prices, which have eased inflation concerns and reduced expectations of aggressive Fed tightening. Geopolitical progress regarding the Strait of Hormuz has also supported risk sentiment. Markets will now focus on UK GDP data on Thursday and US inflation figures on Wednesday, both of which will provide important clues about the policy outlook for the BoE and Fed. Technically, the pair appears poised for further upside towards 1.3535, with near-term direction hinging on this week’s key data releases. A break below 1.3436 would shift the outlook to bearish, exposing the 1.3190 level.
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GBP/USD enters the week of 10–14 August near 1.3500 – its highest level since 15 July. Sterling is building on the momentum from a sharp decline in the dollar following a weak US labour market report, which reduced expectations of a Federal Reserve rate hike in September. Further support has come from the drop in oil prices: cheaper energy is easing inflation risks and reducing pressure on the UK economy.
Geopolitics remains a key factor. Donald Trump announced progress in negotiations between Iran and Oman regarding the Strait of Hormuz, although no final agreement has yet been reached. A further decline in oil prices would reinforce expectations that the Bank of England can maintain a gradual approach to monetary policy. At its last meeting, the regulator left rates unchanged, and Andrew Bailey confirmed that the disinflation process continues.
The main event for sterling this week will be Thursday’s preliminary GDP estimate for the second quarter. The economy is expected to grow by 0.2% quarter-on-quarter, down from 0.6% previously, with the annual rate projected at 1.6% versus 0.9%. June GDP is forecast to rise by 0.1%. Stronger-than-expected data would support GBP/USD, while a marked slowdown could put renewed pressure on the pound.
On the US side, the key release will be July inflation data on Wednesday, with core CPI expected at 2.5% year-on-year and headline CPI at 3.4%. Thursday brings PPI, followed by retail sales and the University of Michigan’s preliminary consumer sentiment index on Friday. Weak inflation and consumer figures could weigh heavily on the dollar and support further GBP/USD gains, while sustained price pressures would strengthen the case for Fed tightening.
Technical analysis
On the H4 GBP/USD chart, a wide consolidation range is forming around the 1.3470 level. An upside breakout would open the way for a move towards 1.3522 and then 1.3535. A downside breakout would suggest a move towards 1.3436, and a break below this level would open the way for the trend to extend to 1.3190. The MACD indicator supports this scenario, with its signal line above zero and pointing downwards.
On the H1 chart, the market has formed a compact consolidation range around the 1.3470 level, currently extending between 1.3434 and 1.3500. A move lower towards 1.3470 is expected, followed by a move higher to 1.3535. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing downwards. In the short term, a decline towards 20 is expected, followed by a rise towards 80.
ConclusionGBP/USD has started the week on a strong footing, trading near its highest level since mid-July. The pound has benefited from a weaker dollar following soft US labour market data and falling oil prices, which have eased inflation concerns and reduced expectations of aggressive Fed tightening. Geopolitical progress regarding the Strait of Hormuz has also supported risk sentiment. Markets will now focus on UK GDP data on Thursday and US inflation figures on Wednesday, both of which will provide important clues about the policy outlook for the BoE and Fed. Technically, the pair appears poised for further upside towards 1.3535, with near-term direction hinging on this week’s key data releases. A break below 1.3436 would shift the outlook to bearish, exposing the 1.3190 level.
Societe Generale strategists highlight that EUR/USD has squeezed above key resistance as Dollar weakness follows softer United States (US) employment data and reduced odds of a September Fed hike. The pair is seen slightly expensive versus nat gas but near fair value on 2-year spreads. They note that if the European Central Bank (ECB) hikes again while the Federal Reserve (Fed) pauses, EUR/USD could gain further, with the next resistance zone identified around 1.1610/1.1625.
Euro prospects improve as Fed bets are repriced"Clouds first appeared on the horizon for the dollar two weeks ago after the coordinated FX intervention in USD/JPY and the squeeze in EUR/USD above key resistance at 1.1475/1.15."
"The pricing for a hike in September has been whittled back to less than 50% vs 72% at the end of July. "
"After months of obsessing about above target CPI and PCE inflation, and levelling accusations of being behind the curve, the employment situation put the Fed outlook in a different daylight and raises questions for the direction of the bond and FX markets in 2H."
"The pair trades close to fair value based on 2y spreads but is a smidgen expensive relative to nat gas."
"If the ECB hikes again and the Fed stands pat because of the deteriorating labour market, perspectives will emerge for a stronger EUR/USD ahead."
"We identify the next hurdle at 1.1610/1.1625."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Silver prices (XAG/USD) rose on Monday, according to FXStreet data. Silver trades at $64.24 per troy ounce, up 1.08% from the $63.55 it cost on Friday.
Silver prices have decreased by 9.63% 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 67.68 on Monday, down from 68.32 on Friday.
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
A 2.50% US-Japan rate gap drove USD/JPY back toward 158.50 as traders rebuilt yield-generating carry trade positions Unprecedented US-Japan coordinated yen purchases established a firm psychological ceiling for the pair around the 160.00 to 164.00 resistance zone Long-term yen strength hinges on Bank of Japan rate hikes, prompting range-trading strategies with strict stop-losses near key resistance levels The USD/JPY currency pair recently saw a big drop, falling from highs not seen in decades, near 164.00, all the way down to 155.20. But in the last few trading days, the pair has been slowly climbing back up, making small but steady gains and heading towards the 158.50 area.
So what changed, and does it undo the intervention story?
Why the Momentum Shifted The intervention bought Japan some time, but it didn’t reverse the trend. The Bank of Japan (BoJ) reportedly spent about ¥5.33 trillion defending the yen on a single day. That followed an even bigger single-day operation, roughly ¥8.45 trillion, the day before. By early August, the yen had already given back nearly half of those gains.
It’s a familiar pattern. Intervention can interrupt a trend by forcing a wave of position-covering, but it won’t change the underlying forces unless policy itself shifts.
Those underlying forces still favor the dollar. The Federal Reserve’s target range holds at 3.50-3.75%, while the BoJ has kept its policy rate at 1.00%. And that’s even though they’ve flagged that inflation might run clearly above their 2% target later this fiscal year.
This leaves a significant interest rate difference of about 250 to 275 basis points. This gap makes the yen carry trade, where investors borrow in a low-interest currency to invest in a higher-interest one, still attractive. Since Japanese monetary authorities haven’t made any major policy changes, buyers looking for better yields quickly returned.
A soft July US payrolls report briefly helped the yen. But as long as that gap stays this wide, the dollar usually regains strength once the initial shock wears off.
What Does the U.S. Purchase of Yen Tell Us About the Outlook? The recent fall in USD/JPY was prompted by a rare, coordinated currency action where the U.S. Treasury actively bought Japanese yen along with Japan. This was the first time they did this together in 15 years.
U.S. Treasury Secretary Scott Bessent clearly expressed concern about the yen weakening too much. This reinforced the market’s belief that Washington is willing to help prevent the USD/JPY from going too high, near 160.00–164.00.
Markets can take two messages from this. First, both governments now see the yen’s weakness, which pushed the pair to 40-year lows near 163.99 in late July, as a real financial stability concern, not just routine volatility.
Second, officials have directly said they’re ready to intervene again. This puts an informal cap on how much further the dollar can climb before prompting new action.
The interest rate difference still favors the dollar, and the credibility of Japan’s fiscal and monetary policies remains a key focus for the market. In the short term, USD/JPY is likely to trade within a range. The risk of intervention will prevent the dollar from rising too sharply, while economic data will determine if the recent gains continue or fade.
What Investors Should Consider For now, it’s wise to consider both these factors. Most analysts expect the pair to gradually move higher over time, with some forecasts suggesting it could reach the ¥162–¥166 range this summer and potentially higher by the end of the year if the dollar stays strong. This suggests it might not be a good idea to bet on the yen’s recent recovery as if it signals a new downward trend for the dollar.
Investors should treat the current environment as transitional. Aggressive long-dollar positions against the yen carry the risk of renewed official buying. Short-term tactical longs may find support from technical recovery and mixed Japanese data, but position sizes should remain measured given the elevated intervention threat.
Why did USD/JPY drop sharply in late July?
Coordinated US-Japan yen buying intervened, triggering rapid speculative short covering and a decline
Why is the U.S. dollar resuming its rise against the Japanese yen despite recent intervention efforts?
The persistent 2.50% rate differential between the Fed and BOJ continues to encourage traders to rebuild profitable carry trades.
Does the intervention mean yen weakness is over?
No. Intervention addresses the symptoms, and not the rate differential. Without policy changes, the US dollar’s strength tends to reassert itself.
The USD/CHF pair struggles to attract any meaningful buyers and remains on the back foot below the 0.8100 mark through the first half of the European session on Monday.
Friday's disappointing US Nonfarm Payrolls (NFP) further tempered bets of an immediate interest rate hike by the US Federal Reserve (Fed), which, in turn, is seen undermining the US Dollar (USD) and capping the USD/CHF pair. Investors, however, are still pricing in the possibility that the US central bank will raise borrowing costs by the end of this year amid inflation risks stemming from energy supply disruptions.
Apart from this, persistent geopolitical uncertainties might hold back traders from placing aggressive bearish bets on the safe-haven USD and contribute to limiting losses for the USD/CHF pair. The market focus now shifts to the release of the US inflation figures, due this week. The crucial data will be looked for fresh cues about the Fed's future policy path, which, in turn, will play a key role in influencing the USD demand.
From a technical perspective, the USD/CHF pair is holding below the 23.6% Fibonacci retracement level of the May-July rally, albeit bears await a break below the 50-day Simple Moving Average (SMA) before placing fresh bets. Meanwhile, the Relative Strength Index (RSI) hovers just below the 50 line and the Moving Average Convergence Divergence (MACD) remains slightly negative, suggesting upside momentum is tentative.
Hence, a break below the 50-day SMA will be seen as a key trigger for USD/CHF bears and pave the way for a decline to a dense Fibo. support band between the 38.2% retracement at 0.8037 and the 61.8% level at 0.7932 ahead of structural floors at 0.7857 and 0.7761. On the topside, initial resistance comes at the 23.6% Fibo. retracement at 0.8103, and a break above this barrier would expose the next upside objective at the cycle high zone around 0.8208.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
USD/CHF daily chart
US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
USDEURGBPJPYCADAUDNZDCHFUSD-0.04%-0.07%0.48%-0.02%-0.05%-0.01%0.00%EUR0.04%-0.03%0.53%0.03%-0.02%0.02%0.04%GBP0.07%0.03%0.58%0.04%0.06%0.05%0.07%JPY-0.48%-0.53%-0.58%-0.54%-0.57%-0.56%-0.49%CAD0.02%-0.03%-0.04%0.54%-0.09%0.03%0.02%AUD0.05%0.02%-0.06%0.57%0.09%0.03%0.04%NZD0.00%-0.02%-0.05%0.56%-0.03%-0.03%0.03%CHF-0.01%-0.04%-0.07%0.49%-0.02%-0.04%-0.03% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
TL;DR: A weak jobs report already made the case for a Fed hold, but only Wednesday’s CPI can confirm inflation is cooling too — and if it comes in soft without reviving growth fears, Silver’s dual identity as both a monetary and industrial metal could let it outrun Gold.
Why Payrolls Only Told Half the Story Last week’s payroll shock was enough to send Gold and Silver sharply higher, but it wasn’t enough to make the rest of markets comfortable. That difference is important. Weak employment made another Fed hike much harder to defend, yet it did nothing to prove the inflation problem has disappeared. Markets are therefore left with only half of the dovish case confirmed: the labor market is weakening, but the Fed still needs evidence that price pressures are cooling. Wednesday’s US CPI report could provide that missing half — and if it does, Silver may have more to gain than Gold.
Why Silver Has a Second Route Higher That Gold Doesn’t Both metals would benefit from the same first-order reaction to softer inflation. Reduced Fed tightening risk should weigh on Treasury yields and the Dollar, improving the monetary backdrop for precious metals. Silver, however, has another route higher. If softer CPI allows investors to price a Fed hold without simultaneously increasing recession fears, equities and broader risk sentiment should also strengthen. That matters because Silver sits between a monetary metal and an industrial commodity — Gold benefits when yields and the Dollar fall, while Silver can benefit from those same forces and from a stronger cyclical outlook.
That second channel was largely missing after payrolls. Negative NFP and heavy downward revisions were dovish for Fed expectations, but they were also bad news for growth. Gold could respond directly to falling tightening risk, while broader risk markets had to decide whether weaker labor demand was becoming something more serious.
A benign CPI surprise would be different. If inflation slows while growth fears don’t intensify, markets move closer to a disinflationary soft-landing interpretation. Under that scenario, Silver’s industrial exposure becomes an advantage rather than a complication, giving it scope to outrun Gold even if both continue higher.
What the Gold/Silver Ratio Is Already Signaling The Gold/Silver ratio suggests that shift may already be starting. On the 4-hour chart, the ratio can be read as having completed a near-term head-and-shoulders top, with shoulders at roughly 71.33 and 71.14 around a 72.55 head. Attempts to recover after the neckline break have been capped by the falling 55 4H EMA near 68.91, while MACD carries bearish divergence. As long as 69.40 caps rebounds, risk stays on the downside toward the 38.2% retracement of 89.36 to 54.77, at 67.99.
That doesn’t say Silver must rise outright. It says that, on a relative basis, market structure favors Silver over Gold.
ActionForex’s Technical View on Silver Silver’s chart itself is also becoming more constructive at exactly the point CPI is approaching. Bullish divergence in the 4H MACD preceded a break above the 55-day EMA and medium-term falling trendline, shifting the near-term bias higher while 60.85 holds.
The next test is much tougher: the 66.5–68.0 zone, containing the 161.8% projection of 54.77 to 60.54 from 56.53 at 66.54, and the 38.2% retracement of 89.36 to 54.77 at 67.99. With momentum already stretched, an initial rejection there wouldn’t be surprising. But a decisive break would signal the recovery is evolving into something larger, targeting the 261.8% projection at 72.73, or even further to the 61.8% retracement at 76.15.
Why Wednesday Is About the Macro Regime, Not Just the Number That makes Wednesday less about whether Silver is simply “bullish” and more about whether CPI supplies the right macro regime for its relative advantage to matter. Soft inflation plus resilient risk sentiment is the ideal combination: lower yields and a softer Dollar support both metals, while stronger equities and reflation expectations tilt the balance toward Silver.
Hot CPI would do almost the exact opposite — reviving Fed tightening risk and removing Silver’s cyclical edge. Payrolls opened the door to a September hold; CPI now decides whether markets can walk through it with confidence. If they can, Silver may be the better trade than Gold.
Key Takeaways Weak payrolls made the case for a Fed hold but didn’t confirm inflation is cooling — Wednesday’s CPI is needed to complete the dovish case. Silver benefits from two channels softer CPI could open: lower yields/Dollar (shared with Gold) and stronger risk sentiment via its industrial demand exposure (Gold doesn’t have this). The Gold/Silver ratio has formed a bearish head-and-shoulders top, capped below 69.40, pointing toward 67.99 next — a signal already favoring Silver on a relative basis. Silver’s own chart shows bullish MACD divergence and a break above its 55-day EMA, with 60.85 as near-term support and 66.5-68.0 as the next major resistance zone. A soft CPI print without rising growth fears is the ideal setup for Silver to outperform Gold; a hot print would revive Fed tightening risk and erase that edge.
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Silver beat strong resistance at 6290/6320 for a buy signal targeting 6490/6520.
We made a high for the day exactly here.
Silver then collapsed to the support level at 6320/6300 (posted in the Telegram group) and made a low of the downside correction here.
There was a small recovery to 6369 by the close.
It is entirely possible that we just range in between strong support at 6310/6290 and Friday's high at 6490/6520, throughout Monday's session.
However, a break below 6250 risks a slide to 6190/75.
I'm going to stick with my strategy of buying at support levels, expecting that silver has resumed the longer-term bull trend.
However, longs need stops below 6160.
The 6490/6520 level is not a resistance to me, We just happened to hit this target and reverse on Friday. So a short position would be risky here on Monday.
However, a break above 6535 should be a buy signal targeting 6575/90 & even 6650/6670 is possible.
USD/JPY finds itself at the center of one of the most dramatic currency stories this summer. Having weakened to a four-decade low near ¥164, the yen was pulled back sharply after Japan and the US carried out a coordinated intervention, with Tokyo reportedly spending around $34 billion in a single session to defend its currency. The move briefly pushed the pair toward ¥155, though the yen has since given back some of those gains, trading back near ¥158 as doubts persist over how long intervention alone can hold.
The underlying driver remains the wide gap between US and Japanese interest rates, made worse by rebounding oil prices following renewed tensions in the Strait of Hormuz. Markets are now watching for a possible BoJ hike in September, encouraged by six straight months of rising real wages, while the Fed’s own July dissents—three policymakers pushed for a hike over a hold—keep US rates firmly in the driver’s seat too.
With both central banks now genuinely in play, USD/JPY’s next move looks set to hinge on which side moves first: Tokyo’s rate decision, or Washington’s next data-driven signal.
Technical Analysis of USD/JPY
As the USD/JPY chart shows, the pair collapsed sharply after the coordinated intervention, dropping from the 163.76 highs to a low near 155.21 before staging a steady recovery. Price is now testing the 0.382 Fibonacci retracement near 158.48, supported by an ascending trendline off the intervention low, with the RSI showing a bullish divergence as it prints higher lows even as price briefly retested the range.
Bullish Scenario Should buyers hold the ascending trendline and break decisively above the 0.382 retracement, the path would open toward the 0.5 level near 159.49, with a stronger move targeting the 0.618 retracement around 160.50, where deeper resistance likely awaits.
Bearish Scenario Conversely, a break below the ascending trendline would invalidate the current recovery structure, exposing a retest of the intervention low near 155.21-156.00, with the RSI divergence losing credibility if price fails to hold this zone.
With price coiled right at the 0.382 confluence, and both the trendline and RSI hinting at renewed strength, USD/JPY looks set for a decisive move—will the recovery from intervention extend, or does Tokyo’s defense prove only temporary?
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Silver (XAG/USD) appreciates for the second consecutive day on Monday, trading around $64.30 after confirming above July’s peak in the $63.30 area. The pair rallied on Friday following downbeat US Nonfarm Payrolls data, to close its best weekly performance since February, and maintains its bullish tone intact this week, with the US Dollar Index (DXY) depressed below the key 100.00 level.
Precious metals extended their recovery on Friday as the unexpected decline in July’s US Nonfarm Payrolls data cooled expectations of Federal Reserve (Fed) rate hikes further. Data from the Bureau of Labour Statistics revealed that net jobs dropped by 23K last month, against market expectations of an 80K increase, and employment growth figures from the previous two months were revised sharply lower.
Futures markets reduced the odds for a September rate hike to 44% from 67% one week ago, according to the CME Group’s FedWatch Tool, which sent the US Dollar tumbling across the board. Investors will be looking at the US Consumer Prices Index (CPI) figures, due on Wednesday, to confirm those views.
Technical Analysis: The next target is the $67.15 area
XAG/USD has broken above the $63.30 area, confirming a bullish Head & Shoulders (H&S) figure, a common pattern for trend shifts. Momentum indicators in the daily chart are supporting the bullish view, as the Relative Strength Index (14) trends higher within the low-60s and the Moving Average Convergence Divergence (MACD) line advances further into positive territory, suggesting buyers retain control.
On the topside, the measured target of the H&S pattern is at the June 22 high at $67.17. Further up, the 200-day SMA meets the mid-June high in the mid $77s. A bearish reaction below the mentioned $63.30, on the contrary, would expose August 6 and 7 lows around $61.00 ahead of the August 5 low, at $59.40.
(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.
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Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
Dollar Index Price Chart – Source: Tradingview Currently, the U.S. Dollar Index is showing a quotation of $99.63. After the most recent sharp sell-off, it has been able to defend a long-term rising trendline and the key support zone of $99.42. The price is under both the 50-day EMA at $100.33 and the 100-day EMA at $99.91. This is keeping the broader short-term structure at risk, even after the most recent consolidation.
The most recent price action has shown smaller bodies of the candlesticks with respect to support, showing the momentum for selling is diminishing, but with no signs of a reversal. The RSI is currently at 37. It is close to the oversold region, meaning that there is a possibility of a technical rebound.
The first line of resistance is at $100.36, with subsequent resistance at $100.82 and $101.62. If the trendline holds, the move will reach towards those levels. If support at $99.42 is broken, the new targets will be $98.76 and $98.18.
Gold – Chart Gold is valued at around $4,354, breaking out of its consolidation pattern after trading above both the 50-day ($4,183) and 100-day ($4,136) EMAs. There is currently bullish price action with larger candles. However, the bullish momentum has produced smaller candles against the $4,368 resistance level. The broken descending trendline has shifted the former resistance level of $4,299 to support.
Currently, price is meeting resistance at $4,368, while future resistance will be at $4,430 and $4,492. Conversely, price will find support at $4,299, $4,223, and $4,147. With an RSI of around 71, gold is in the overbought zone, making it more likely to consolidate or pull back.
EUR/JPY rises after registering losses in the previous day, trading around 183.10 during the European hours on Monday. The currency cross is holding a capped tone as it sits below the 50-day Exponential moving average (EMA) while clinging to short-term support at the nine-day EMA. This configuration suggests a corrective phase within the broader uptrend, with sellers retaining the upper hand while the 14-day Relative Strength Index (RSI) around 44 hints at still-soft but stabilizing bearish momentum after the recent slide.
Yen positioning shift seen as response to Japan interventionStrategists at Societe Generale argue that the recent positioning adjustment in the Yen futures market is being driven primarily by official action rather than a genuine change in sentiment. They highlight that the sharp drop in speculative exposure, with the “collapse in Short Yen CFTC positions to 10.8%,” is “a reflection of MoF intervention, not a reflection of greater optimism that the currency has fundamentally turned.”
A pullback below the nine-day EMA at 183.06 would reinforce the bearish bias and put downward pressure on the EUR/JPY cross to navigate the region around 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 find initial resistance at the 50-day EMA at 184.57. 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.
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 Japanese Yen.
USDEURGBPJPYCADAUDNZDCHFUSD0.01%-0.00%0.43%0.07%0.00%0.06%0.02%EUR-0.01%-0.02%0.40%0.04%-0.01%0.03%0.00%GBP0.00%0.02%0.43%0.06%0.03%0.05%0.02%JPY-0.43%-0.40%-0.43%-0.39%-0.46%-0.44%-0.43%CAD-0.07%-0.04%-0.06%0.39%-0.13%0.00%-0.07%AUD-0.00%0.01%-0.03%0.46%0.13%0.03%0.02%NZD-0.06%-0.03%-0.05%0.44%-0.00%-0.03%-0.02%CHF-0.02%-0.01%-0.02%0.43%0.07%-0.02%0.02% 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).
XAGUSD(Silver) remains cautious even though a weaker US dollar boosted the demand for precious metals.
A surge above 63.00 was a sign of strong buying pressure, pushing the price towards 65.00. But since then, a slight pullback has halted the progression as sellers stepped in. Bulls need to catch their breath after the RSI develops a bearish divergence. A close above 65.00 would flush out the remaining selling interests. 61.40 is a firm support, with 60.00 a psychological floor.
EURUSD keeps the high ground
The US dollar remains under pressure as traders anticipate another push on the euro.
The pair now looks to consolidate as prices have almost jumped 100 pips from last week’s NFP numbers. As sentiment remains bullish, trend followers could look to jump in at the next pullback. 1.1520 is the first support, and 1.1440 is a key level to keep the momentum intact. As the RSI hovers around the neutral zone, 1.1600 is the next target higher. GER 40 hits double top
The Dax continues to grind higher after the double top halted the progression.
The price steadily clawed back losses and is testing the daily resistance of 26450. Another bullish breakout would put the bulls back in the driver’s seat. 26600 would pave the way for a bullish continuation in the medium-term. Further down, 26000 is a strong support should prices swing lower.
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USD/INR has shown limited movement over the last five sessions, hovering near the 95.00 support with narrow daily ranges and low volatility overall The pattern signals consolidation as markets await clearer cues from dollar strength, RBI liquidity management, oil prices, and capital flows Oil price, US-India trade relations RBI and Federal Reserve comments and policy decisions hold key sway on the USD/INR forex pair's long and medium-term momentum The USD/INR pair moved quite a bit in July 2026, driven by outside forces and local policy responses. The exchange rate began July around 94.7-95.2, climbed to nearly 96.9, and then settled near 95.35-95.40 by month’s end.
According to a Bank of Baroda research note, the rupee depreciated by only about 0.8% for the month, even as global crude oil prices surged more than 20% amid escalating tensions in West Asia. For a currency as sensitive to oil as the rupee, that’s a genuinely soft landing.
Come August and the USD/INR exchange rate hasn’t really moved much in the first week. It’s been stuck around the 95.00 support level, with small daily price changes and not much happening in terms of volatility.
This pattern points to a period of consolidation, and markets appear to be waiting for clearer signals. Both the strength of the US dollar globally and things happening in India are affecting the rate. The Reserve Bank of India is still managing money supply carefully. Oil prices and how much money is flowing into or out of India also have an impact.
For the immediate future, expect the exchange rate to stay in a range. If it drops below 95.00, it might go down to 94.50. If it goes above 95.50, it could try to reach 96.00 again. Most predictions say the rate will likely stay between 94 and 96 for the next few weeks.
Keep an eye on US economic news and any statements from the RBI, as these can change market feelings quickly. For now, the pair shows limited momentum and patience remains key while the market digests recent moves. Traders may find better opportunities once a clearer trend emerges.
This article was originally written in December 2024 and updated on August 10, 2026, to reflect recent developments, including US-Israel/Iran war and ensuing Strait of Hormuz blockade, USD/INR price movements, and the impact of oil price spike. All technical levels and market commentary are based on the latest data available at the time of writing.
USDINR Outlook For the Third Quarter of 2026 Looking ahead to the third quarter, I expect the pair to trade within a fairly tight range. Most market participants expect it to stay between 94 and 97. We might even see it test the lower end of that range if oil prices drop more and capital flows pick up. Some analysts think it’ll gradually stabilize around 95-96 by September’s end, assuming no major external shocks.
The Reserve Bank of India’s (RBI) monetary policy will continue to influence the currency. The central bank is anticipated to maintain the repo rate at its early August review, keeping a neutral monetary stance while closely monitoring inflation.
Factors such as elevated oil prices and potential food price volatility due to monsoon patterns could contribute to sustained inflation, limiting the possibility of any interest rate cuts in the near term. The RBI’s capacity to intervene in the foreign exchange market, supported by robust foreign exchange reserves, is expected to help manage any sharp currency movements.
Global economic conditions will also play a role. A sustained decrease in crude oil prices, de-escalation of tensions in the Middle East, or a weaker US dollar could benefit the Indian rupee. Conversely, increased geopolitical instability or stronger-than-expected economic data from the United States might support the dollar, leading to continued upward pressure on the USD/INR pair.
Impacts of Interest Rates The interest rate story of the first quarter of 2026 didn’t help the rupee. The RBI kept rates steady at its February 2026 meeting, despite the rupee getting weaker and bond yields going up. The RBI had cut its repo rate by 25 basis points to 5.25% in December 2025.
April brought fresh pressure from rising tensions in Iran, weighing on economic forecasts while pushing prices upward. Still, the central bank held its ground, keeping borrowing costs steady to guard against wider imbalances.
Meanwhile, US monetary policymakers showed little hurry to adjust their own rates downward. Because of this divergence, investors kept leaning toward American securities, drawn by stronger returns in dollar-based investments.
The Risks Worth Watching India is the world’s third-largest imported of crude oil, and the product’s price oscillations have a significant impact on the rupee. Dollar-denominated crude oil has experienced a slowdown in demand for the last year, as China’s economic growth declined.
The single biggest wildcard remains the unresolved US-India trade relationship. Tariffs on Indian products have made them less competitive abroad. Whether the two countries can agree on something to ease this is probably the most significant factor for the rupee’s performance over the next few years. If they reach a deal, it would strongly suggest the rupee will get stronger. If they don’t, the pressure on it will likely continue.
Oil is another clear risk. The conflict in the Middle East has calmed down a bit, with news of a US-Iran negotiation period and tanker traffic through the Strait of Hormuz slowly returning to normal. However, this could change fast if tensions rise again.
Foreign portfolio flows bring another layer of uncertainty. They’ve seen both heavy outflows and supportive inflows over the past year. Another round of selling in Indian stocks or bonds would quickly test the rupee’s current stability.
USD/INR Historical Chart USD to INR trading dates back to 1973 when the pair was floated in the forex market at an opening price of $1 to 7.98 rupees. By late 1983, the currency pair rose past the psychological level of 10 rupees to the US Dollar. Between then and April 2002, it rallied by 376.41% to 48.76 rupees.
After retracing to 39.9 rupees in November 2007, the USD/INR has been on an uptrend since then. The pair surged to an all-time high of 95.23 in March 2026.
USDINR Historical Chart on the monthly time frame As the US Federal Reserve started to hike rates, Indian rupee started to slide against the US Dollar. In October 2022, the pair surged to a new all-time high of 83.28. This ATH was refreshed in 2023. However, the dollar’s rally in 2024 saw it hit a new ATH on March 22. That’s not all, the upward momentum strengthened through 2025 to peak at 91.05 in December. Rising oil prices and uncertainty in US-India trade relations have added fuel to the pair, pushing it to all-time highs of 96.97 seen in May 2026.
Strain on Indian Equities Markets Indian equity markets influenced USD/INR movements since early July. Foreign portfolio investors became net buyers again. Data from CDSL showed inflows exceeding ₹15,000 crore that month, while NSDL figures put it even higher, close to ₹20,200 crore.
This influx brought fresh dollar supply into the market, offering timely support to the rupee. Stronger equities boosted investor confidence, and a steadier rupee then encouraged more equity buying. The two markets reinforced each other.
During late July and into early August, continued strength in equities provided a buffer against significant declines in the rupee. Domestic institutional investors also played a role by purchasing assets, which helped absorb market fluctuations. This activity mitigated the impact of external pressures on the currency.
The recovery observed in the equity market contributed to a stabilizing effect, assisting the rupee in maintaining firmer positions around the 95.3–95.4 level. However, this positive development does not entirely resolve the challenges. Foreign portfolio investors (FPIs) have recorded net selling activity for the year overall. Year-to-date outflows have reached approximately ₹2.6 trillion.
So while July’s buying offered some relief, it hasn’t reversed the larger trend. Equities have recently provided stability, but they aren’t a game-changer just yet.
USD/INR Quarterly Outlook: Rupee Faces Next Key Resistance At 96.00 in Q3 On the weekly chart, the USD/INR is trading close to 95.30. The overall trend remains upward, supported by its major long-term exponential moving averages.
The price is above the 20-week EMA, which is around 94.80. It’s also well above the 50-week EMA at about 93.50 and the 100-week EMA near 91.80.
This shows that the upward trend is still strong. The Relative Strength Index (RSI) is around 45–50, which suggests a neutral or balanced market sentiment, not showing signs of being overbought.
The main support level is at the 95.00 mark, which is a key psychological level and aligns with the 20-week EMA. After that, the next support is around 94.20, near the 50-week EMA. The key resistance is at 96.20, which is near the recent swing high. If it breaks that, the next resistance would be the all-time record high of 96.96
USDINR chart analysis on August 3, 2026, showing key levels of resistance and support for Q3. Created on TradingView What will be USD to INR Rate in 2027? Long Forecast’s USD to INR forecast 2027 suggests the start of the year around 97.69 rupees. It expects the currency pair to average 98.53 by mid-year before rallying further to 102.82 by the end of the year. The prices can go much higher if the global economy enters a prolonged recession after the ongoing deflationary measures.
USD to INR forecast. Source: longforecast.com USD to INR Forecast 2030 A feasible USD to INR forecast for 2030 is informed by the economic health of India and the US, Fed and RBI’s monetary policy, and the demand for the US dollar as a safe haven. Hence, a strong dollar will likely push USD to INR to a new record high, depending on the key drivers.
However, as an emerging market, India’s currency has the potential to strengthen further in the coming years. From that perspective, USD to INR forecast 2030 will be for the pair to remain within a range for several years.
How to trade USDINR To trade USDINR, one needs to open an account with a reputable forex broker. When researching the best broker, it is helpful to consider their spreads, commissions, and other fees. It is also possible to trade the currency’s derivatives in the form of USDINR futures.
Gold (XAU/USD) is maintaining its recent recovery as markets reassess the outlook for US interest rates. Softer US employment data has reduced expectations for a September Federal Reserve rate hike. Markets are now focused on the upcoming US inflation report for further clues on the policy outlook. At the same time, uncertainty in the Middle East and concerns over Gulf supply routes continue to support safe-haven demand. These factors could continue to shape gold’s next directional move.
Gold extends recovery as softer jobs data weighs on rate expectationsGold maintained its upward momentum as changing interest rate expectations supported the market. Focus has turned to the upcoming US Consumer Price Index report for further direction on Federal Reserve policy. Higher-than-expected inflation could strengthen expectations for tighter policy, while softer inflation could ease expectations for another rate increase.
The latest US employment report has already changed the interest rate outlook. Nonfarm payrolls unexpectedly fell by 23,000 in July, compared with expectations for an increase of 85,000. The unemployment rate declined to 4.1%, but the labor force also contracted. Markets responded by reducing expectations for a September Fed rate hike. Current market pricing places the probability near 44%, leaving upcoming inflation data as an important factor for the next policy decision. Lower expectations for higher rates can support gold because the metal does not provide interest income.
Middle East developments remain another major influence. Iran continues discussions with Oman over arrangements for maritime traffic through the Strait of Hormuz, but uncertainty over reopening the waterway remains. Oil prices have moved higher as concerns around Gulf supply routes continue. Higher energy prices could keep inflation concerns elevated and complicate the Fed outlook. At the same time, persistent geopolitical risks could maintain safe-haven demand for gold if regional tensions increase further.
Gold gains momentum after breaking key descending resistanceThe gold chart below shows price trading beneath a descending resistance trendline for several months. This trendline repeatedly capped recovery moves and maintained pressure on price. Gold later found support and began to stabilize, allowing price to gradually move higher. The recovery then extended toward the descending resistance trendline, bringing this key level back into focus.
Gold has now moved above the descending resistance trendline after remaining below it for several months. Price gained momentum after clearing this level and extended its advance toward the $4,300 region. This move marks an important shift in the near-term structure, as this resistance had repeatedly limited recovery moves.
The next development will depend on whether gold can continue to hold above descending resistance. Price remains comfortably above the broken trendline following the recent advance, keeping the current structure intact. Continued strength above this former resistance could support further gains and another advance toward the recent high. As long as gold remains above the broken trendline, the current recovery would remain in place and support the broader positive structure.
Gold outlook: US inflation data and Middle East risks shape next moveGold remains supported by a combination of softer US employment data and persistent geopolitical uncertainty. Reduced expectations for a September Fed rate hike have shifted attention toward the upcoming inflation report for the next policy signal. Middle East uncertainty and concerns over Gulf supply routes also continue to support safe-haven demand. At the same time, gold remains above the broken descending resistance trendline after its recent advance. Continued strength above this level could support further gains. Upcoming inflation data and geopolitical developments will remain important drivers for Gold.
The pair gained momentum following the release of the US labour market report for July 2026 on 7 August. Non-farm employment fell by 23,000 jobs, compared with a forecast for an increase of 80,000 jobs among economists surveyed by Reuters. Employment data for May and June were also revised downwards, according to the Bureau of Labor Statistics. The dollar responded with broad-based weakness. Earlier, on 30 July, the Bank of England kept its interest rate at 3.75% by a six-to-three vote, with three members of the committee voting for a rate hike. The regulator’s decision also highlighted inflation risks associated with volatility in energy prices.
Technical Analysis of GBP/USD
After a sharp rise from around 1.3280 towards 1.3500 in late July, the pair entered a narrowing range between the upper and lower boundaries of the current profile at 1.3483 and 1.3440, respectively. The two boundaries gradually converged, forming a pattern resembling a contracting triangle. The green impulse candle subsequently broke above the pattern’s upper boundary, while the price is attempting to establish itself above both the trendline and the profile boundary. If the bullish scenario develops, the price could move towards the red resistance level at 1.3555.
If the current breakout from consolidation proves to be false and the price returns inside the profile, the POC at 1.3465 and the lower profile boundary at 1.3440 will regain their importance for market participants. Below these levels lies the green support area at 1.3420. The RSI + MAs indicator shows three readings of 61, 57 and 57. All three values are above the neutral zone, while the moving averages are coloured green. It is also worth noting that vertical volume has declined compared with the late-July impulse.
Summary The attempt to break above the triangle’s upper boundary could open the way towards a test of the red resistance area at 1.3555, but the sustainability and potential of the move may also depend on the flow of further US economic data.
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Danske Research Team notes that the US Dollar (USD) weakened after a softer US jobs report, allowing EUR/USD to briefly reach its highest level in almost two months. They highlight that markets cut Federal Reserve (Fed) tightening expectations for September, while also flagging upcoming United States (US) inflation data and Euro area Gross Domestic Product (GDP) as key for EUR/USD traders.
Dollar slides as Fed bets fade"In the US, the July jobs report came in on the weak side with nonfarm payrolls coming in at -23k (cons: +80k, Danske: +70k) and cumulative revisions for May-June firmly negative at -103k. The unemployment rate nonetheless fell to 4.1% (cons: 4.2%, Danske: 4.2%). At the same time, the labour market participation rate declined to 61.4%, which is the weakest level since February 2021. "
"We do not think this report is as unambiguously dovish as the initial moves in UST yields and USD FX implied, leaving the Fed in a difficult position balancing below-expectations job growth against a still-declining unemployment rate. Fed's Barkin's initial commentary acknowledged the weakness in the labour market data, while pointing to continued resilient corporate earnings."
"Consequently, the market now discounts 11bp of hike from the Federal Reserve at the next meeting in September."
"The USD took a hit on Friday and the US jobs report significantly disappointed expectations. The USD lost ground against the rest of G10 currencies. EUR/USD rose briefly to 1.1581 - the highest level in almost two months."
"In the euro area, the Sentix Investor Confidence indicator is due. The index rose sharply in in July, marking the third consecutive monthly improvement, driven by rising expectations. Today's release will provide a read on whether momentum continues."
"The week closes on Friday with the second release of euro area Q2 GDP, including details. "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The US Dollar has retraced previous losses against the Japanese Yen (JPY) on Monday, with the USD/JPY pair returning above the 158.00 line, after bouncing up from Friday’s low, at 156.68. The pair has regained some momentum, and bulls are aiming at last week's highs, in the 158.65 area.
The Bank of Japan (BoJ) summary of opinions, released earlier on Monday, revealed concerns about mounting inflation but also a split committee regarding the pace of upcoming rate hikes, which hurt investors' confidence in the Yen. Beyond that, the Japanese Current Account posted its first deficit in one-and-a-half years, adding weight to the Japanese Yen.
These figures have offset the negative impact on the US Dollar from the unexpected contraction in US Nonfarm Payrolls seen on Friday. Data by the US Bureau of Labor Statistics showed a 23K decline in net employment in July, against market expectations of an 80K increase, and the previous two months' readings were revised sharply lower. These figures cooled hopes of near-term interest rate hikes by the Federal Reserve (Fed) even further and sent the USD tumbling across the board.
Technical Analysis: The Dollar trades within an ascending channel
The USD/JPY trades at 158.38, holding within an ascending channel from August 3 lows at 155.23. Momentum indicators show mild upside traction, with the Relative Strength Index (14) crossing above the 50 midline and the Moving Average Convergence Divergence (MACD) at modestly positive levels, altogether hinting at a stabilizing upside momentum within this short-term uptrend.
Bulls are looking at the 38.2% Fibonacci retracement around 158.65, which capped rallies last week. Further gains are likely to test the channel top, now around 159.25. A confirmation above here would bring the area between the 61.8% Fibonacci retracement, at 160.64, and the July 31 highs, near 160.90, to the focus.
On the downside, the channel bottom, at 157.05, and Friday's low, near 156.70, are likely to provide significant support ahead of the mentioned August 3 low, at 155.23.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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 Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.02%-0.03%0.41%0.09%-0.03%0.08%0.07%EUR-0.02%-0.04%0.38%0.06%-0.05%0.06%0.05%GBP0.03%0.04%0.43%0.10%0.02%0.10%0.10%JPY-0.41%-0.38%-0.43%-0.33%-0.46%-0.38%-0.33%CAD-0.09%-0.06%-0.10%0.33%-0.18%0.00%-0.03%AUD0.03%0.05%-0.02%0.46%0.18%0.09%0.10%NZD-0.08%-0.06%-0.10%0.38%-0.01%-0.09%0.00%CHF-0.07%-0.05%-0.10%0.33%0.03%-0.10%-0.01% 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) trades subduedly at around 1.1550 against the US Dollar (USD) during the early European trading session on Monday. The EUR/USD pair edges down as the US Dollar rebounds after a significant fall on Friday.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.12% higher to near 99.72.
The US Dollar fell sharply on Friday after the release of the soft United States (US) Nonfarm Payrolls (NFP) data for July, which forced traders to reassess Federal Reserve (Fed) interest rate expectations.
The NFP report showed that employers fired 23K workers, while they were anticipated to create 80K fresh jobs.
According to the CME FedWatch tool, the odds of the Fed raising policy rates in the September meeting are 46%, a sharp decline from 67% seen a week ago.
Meanwhile, investors await the US Consumer Price Index (CPI) data for July, which will be released on Wednesday.
EUR/USD Technical Analysis
EUR/USD trades marginally lower at around 1.1550, but is maintaining a bullish near-term bias as spot remains above the 20-day Exponential Moving Average (EMA) at 1.1484, suggesting the recent advance is supported by underlying demand.
The Relative Strength Index (RSI) strives to stabilize above the 60.00 zone, hinting at fresh bullish momentum.
On the downside, initial support emerges near the August 3 low at 1.1500, followed by the 20-day EMA at 1.1484. The pair would be exposed to the July 28 low at 1.1353 if it fails to hold the 20-day EMA. On the upside, the pair could extend the advance towards the June 15 high at 1.1622 if it manages a decisive break above Friday's high at 1.1581.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Nonfarm Payrolls The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
Read more.
America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
EUR/USD started a fresh increase above the 1.1520 resistance. A contracting triangle is forming with resistance at 1.1600 on the 4-hour chart. GBP/USD could gain pace if it clears the 1.3550 resistance. Gold prices climbed higher above $4,350 and might continue to rise. EUR/USD Technical Analysis The Euro formed a base above 1.1380 against the US Dollar. EUR/USD started a fresh increase above the 1.1450 and 1.1500 resistance levels.
Looking at the 4-hour chart, the pair gained pace for a move toward 1.1580. A high was formed at 1.1581, and the pair is now consolidating gains above the 23.6% Fib retracement level of the upward move from the 1.1352 swing low to the 1.1581 high.
The pair is now well above the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour). On the upside, the pair could face resistance near 1.1580.
The next major resistance might be 1.1600. There is also a contracting triangle forming with resistance at 1.1600. A close above 1.1600 could start another steady increase. In the stated case, the bulls could aim for a move to 1.1650.
Any more gains might open the doors for a test of 1.1685. If there is a downside correction, the pair might find bids near 1.1540. The next major support could be near 1.1500.
The main support might be 1.1465 and the 50% Fib retracement. A downside break and close below 1.1465 might send the pair toward 1.1400. Any more losses could open the doors for a test of 1.1350.
Looking at GBP/USD, the pair seems to be gaining pace above 1.3450 and might aim for a retest of the 1.3550 resistance.
Upcoming Key Economic Events:
Euro Zone Sentix Investor Confidence for August 2026 – Forecast -3.2, versus -3.1 previous.
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Key highlightsEUR/USD started a fresh increase above the 1.1520 resistance.A contracting triangle is forming with resistance at 1.1600 on the 4-hour chart.EUR/USD technical analysisLooking at the 4-hour chart, the pair gained pace for a move toward 1.1580. A high was formed at 1.1581, and the pair is now consolidating gains above the 23.6% Fib retracement level of the upward move from the 1.1352 swing low to the 1.1581 high.
The pair is now well above the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour). On the upside, the pair could face resistance near 1.1580.
The next major resistance might be 1.1600. There is also a contracting triangle forming with resistance at 1.1600. A close above 1.1600 could start another steady increase. In the stated case, the bulls could aim for a move to 1.1650.
Any more gains might open the doors for a test of 1.1685. If there is a downside correction, the pair might find bids near 1.1540. The next major support could be near 1.1500.
The main support might be 1.1465 and the 50% Fib retracement. A downside break and close below 1.1465 might send the pair toward 1.1400. Any more losses could open the doors for a test of 1.1350.
Upcoming key economic eventsEuro Zone Sentix Investor Confidence for August 2026 - Forecast -3.2, versus -3.1 previous.
Gold prices remained broadly unchanged in United Arab Emirates on Monday, according to data compiled by FXStreet.
The price for Gold stood at 512.42 United Arab Emirates Dirhams (AED) per gram, broadly stable compared with the AED 512.76 it cost on Friday.
The price for Gold was broadly steady at AED 5,976.69 per tola from AED 5,980.78 per tola on friday.
Unit measure
Gold Price in AED
1 Gram
512.42
10 Grams
5,124.15
Tola
5,976.69
Troy Ounce
15,937.88
FXStreet calculates Gold prices in United Arab Emirates by adapting international prices (USD/AED) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices fell in Philippines on Monday, according to data compiled by FXStreet.
The price for Gold stood at 8,470.15 Philippine Pesos (PHP) per gram, down compared with the PHP 8,483.27 it cost on Friday.
The price for Gold decreased to PHP 98,794.27 per tola from PHP 98,947.18 per tola on friday.
Unit measure
Gold Price in PHP
1 Gram
8,470.15
10 Grams
84,702.17
Tola
98,794.27
Troy Ounce
263,448.80
FXStreet calculates Gold prices in Philippines by adapting international prices (USD/PHP) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices fell in Saudi Arabia on Monday, according to data compiled by FXStreet.
The price for Gold stood at 523.63 Saudi Riyals (SAR) per gram, down compared with the SAR 524.23 it cost on Friday.
The price for Gold decreased to SAR 6,107.48 per tola from SAR 6,114.55 per tola on friday.
Unit measure
Gold Price in SAR
1 Gram
523.63
10 Grams
5,236.27
Tola
6,107.48
Troy Ounce
16,286.64
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 fell in United Arab Emirates on Monday, according to data compiled by FXStreet.
The price for Gold stood at 512.17 United Arab Emirates Dirhams (AED) per gram, down compared with the AED 512.76 it cost on Friday.
The price for Gold decreased to AED 5,973.81 per tola from AED 5,980.78 per tola on friday.
Unit measure
Gold Price in AED
1 Gram
512.17
10 Grams
5,121.69
Tola
5,973.81
Troy Ounce
15,930.17
FXStreet calculates Gold prices in United Arab Emirates by adapting international prices (USD/AED) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices fell in Pakistan on Monday, according to data compiled by FXStreet.
The price for Gold stood at 38,554.91 Pakistani Rupees (PKR) per gram, down compared with the PKR 38,653.68 it cost on Friday.
The price for Gold decreased to PKR 449,673.60 per tola from PKR 450,848.90 per tola on friday.
Unit measure
Gold Price in PKR
1 Gram
38,554.91
10 Grams
385,527.80
Tola
449,673.60
Troy Ounce
1,199,192.00
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 fell in Malaysia on Monday, according to data compiled by FXStreet.
The price for Gold stood at 569.90 Malaysian Ringgits (MYR) per gram, down compared with the MYR 570.86 it cost on Friday.
The price for Gold decreased to MYR 6,647.15 per tola from MYR 6,658.41 per tola on friday.
Unit measure
Gold Price in MYR
1 Gram
569.90
10 Grams
5,698.95
Tola
6,647.15
Troy Ounce
17,725.74
FXStreet calculates Gold prices in Malaysia by adapting international prices (USD/MYR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices fell in India on Monday, according to data compiled by FXStreet.
The price for Gold stood at 13,273.12 Indian Rupees (INR) per gram, down compared with the INR 13,295.33 it cost on Friday.
The price for Gold decreased to INR 154,817.00 per tola from INR 155,074.10 per tola on friday.
Unit measure
Gold Price in INR
1 Gram
13,273.12
10 Grams
132,732.80
Tola
154,817.00
Troy Ounce
412,840.40
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold is under renewed selling pressure toward $4,300, kicking off the US inflation week on a negative note and retreating further from seven-week highs of $4,372 set last Friday.
Gold stuck between Mideast risks, easing Fed hike betsGold is on a slippery slope early Monday, as traders resort to profit-taking following the previous week’s 7% gain, while repositioning ahead of this week’s critical US Consumer Price Index (CPI) data release.
The bullion rallied hard last week, with the uptrend strengthened following the US Nonfarm Payrolls report, which showed that the US economy unexpectedly lost 23,000 jobs in July, against expectations of an 80,000-job gain.
The Unemployment Rate suddenly dipped to 4.1%, but that was due largely to a further decline in those holding jobs or looking for work.
Following the weak US labor market data, markets trimmed their bets for a Federal Reserve (Fed) interest rate hike in September to 44% from about 55% pre-data, according to the CME Group’s FedWatch Tool.
According to TD Securities, the US curve "bull steepened on the negative headline print despite a drop in the UE rate to 4.1%," as the latest labor market data eased fears of renewed strength. The firm notes that the report "eased concerns over a reaccelerating labor market, leading to markets pricing out hikes, with September's pricing declining by 3bp to 12bp of hikes." Looking ahead, TD Securities adds that "while we continue to expect the Fed to keep rates on hold for 2026 and 2027, September pricing could remain substantial as the Fed will continue to look at data to make a decision in the months ahead."
Gold’s latest pullback is also led by a broad-based US Dollar rebound as investors rush for safety in the buck amid renewed tensions surrounding the reopening of the Strait of Hormuz over the weekend.
Iranian Foreign Minister Seyyed Abbas Araghchi said on Sunday that Tehran was close to reaching an agreement with Oman on a new mechanism for managing maritime traffic through the Strait of Hormuz. However, Araghchi stressed that the vital waterway would not be reopened until Washington meets additional conditions.
That followed US President Donald Trump’s comment that “we are only semi-negotiating with them,” per Axios.
Further, there were reports that Iran launched multiple anti-ship cruise missiles from Sirik in southern Iran, striking an oil tanker off Oman's coast. Meanwhile, Tehran-backed Houthi forces hit a Saudi oil refinery Sunday, just days after Riyadh formed a new defense alliance with Turkey and Pakistan amid the escalating US-Israel conflict with Iran.
Against persisting Middle East tensions and a fresh advance in Oil prices, concerns over inflation continue to haunt markets and provide a floor to the Greenback at the expense of the non-yielding bullion.
Later in the day, the geopolitical risk premium will remain in play amid a quiet US economic docket.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,325.48. The metal holds a constructive near-term bias as it trades above the 21-day and 50-day simple moving averages (SMAs) at roughly $4,096.91 and $4,149.68, while still capped beneath the 100-day SMA at $4,388.87 and the 200-day SMA at $4,496.46. The alignment of shorter SMAs below price and longer SMAs above suggests gold is staging a recovery within a broader consolidation, with the Relative Strength Index (14) hovering in bullish territory near 63.7, hinting at firm but not yet overbought upside momentum.
On the topside, immediate resistance emerges at the 100-day SMA around $4,388.87, with the 200-day SMA near $4,496.46 acting as the next key barrier if buyers extend the advance. On the downside, initial support is seen at the 50-day SMA at $4,149.68, followed by the 21-day SMA near $4,096.91, where a break lower would suggest that the current rebound is losing traction and could invite a deeper correction.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Inflation FAQs Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
TL;DR: The RBA’s Tuesday hold is a formality — what matters for AUD/CAD is whether its tightening bias survives, and the setup is asymmetric: preserving it offers limited support, while confirming the cycle has ended could trigger a deeper correction.
Why the Rate Decision Itself Won’t Move Markets The RBA is widely expected to leave the cash rate unchanged at 4.35% on Tuesday, making the decision itself largely a formality. After softer-than-expected Q2 inflation, Australia’s Big Four banks now agree rates are likely to stay on hold through the rest of 2026, while broadly expecting the next move to be a cut sometime in 2027.
That pushes market focus away from the rate decision and toward a narrower question: how much of the RBA’s tightening bias survives? For the Australian Dollar, the setup is asymmetric — keeping another hike theoretically alive may offer limited support, while clearer confirmation that the tightening cycle has ended could have a larger negative impact.
The First Signal: Policy Statement Language The first signal will come from the policy statement. Every RBA statement this year has retained some version of the line that “the Board remains attentive to upside risks to inflation.” Keeping that language would amount to a hawkish hold, but it would largely preserve existing policy optionality rather than make another hike materially more likely.
More consequential would be a shift toward language suggesting policy is sufficiently restrictive, or removal of explicit emphasis on upside inflation risks. Such a change would give markets their clearest indication yet that 4.35% is the peak rate.
The Bigger Signal: The Quarterly Statement on Monetary Policy The more important signal should come from the quarterly Statement on Monetary Policy (SoMP). May forecasts had trimmed-mean inflation returning to the top of the 2–3% target band during 2027, but the Q2 reading subsequently undershot the RBA’s own projection at 3.6%.
If August forecasts maintain that disinflation path or bring the return to target forward, despite starting from softer inflation, the Board would effectively be validating the improvement and strengthening the case that further tightening is unnecessary. Conversely, if the RBA pushes the return to target further out, it would suggest policymakers aren’t yet prepared to fully trust the latest inflation moderation. The technical cash-rate assumption embedded in the forecasts will also be worth comparing with the previous SoMP, particularly to see how much easing is already incorporated into the projection path.
Why the Upside for AUD Is Limited This leaves limited upside asymmetry for AUD. Even if the RBA preserves hawkish language, the current 4.35% rate is already clearly restrictive, making an extended hold more plausible than another increase. Markets therefore have little reason to rebuild meaningful hike expectations simply because the Board refuses to close the door.
By contrast, a softer inflation track or explicit peak-rate language would provide genuinely new information and allow attention to shift more decisively toward eventual easing.
Why This Matters for AUD/CAD That asymmetry makes AUD/CAD particularly interesting. CAD received support from last week’s stronger-than-expected Canadian employment report and could benefit further if the oil rebound extends. At the same time, AUD/CAD’s uptrend from 0.8902 has clearly lost momentum, as reflected in both daily and weekly MACD, while the pair is close to major resistance at 0.9991 from the 2021 peak.
ActionForex’s Technical View on AUD/CAD Technically, a break of 0.9721 support would indicate the five-wave rally from 0.8902 is already correcting, bringing a deeper fall to the 38.2% retracement of 0.8902 to 0.9957, at 0.9555. That area is close to the fourth-wave low around 0.9510 and the 55-week EMA near 0.9536.
However, a decisive break of 0.9991 would invalidate the correction case and extend the broader uptrend instead.
For now, the RBA retaining its tightening bias may be enough to keep AUD/CAD supported in range; losing it could provide the catalyst for a deeper correction.
Key Takeaways Tuesday’s RBA hold at 4.35% is a formality — the real signal is whether the tightening bias survives in the policy statement and SoMP forecasts. The key phrase to watch is “attentive to upside risks to inflation”; its removal would be the clearest signal yet that 4.35% is the peak rate. The quarterly SoMP matters more than the statement — whether the RBA maintains or delays its 2027 return-to-target path will show how much it trusts the Q2 inflation undershoot. The setup is asymmetric for AUD: preserving the tightening bias offers limited upside since another hike already looks unlikely, while losing it opens clearer downside. AUD/CAD is capped near 0.9991 resistance; a break of 0.9721 support opens a deeper correction toward 0.9555, while a break above 0.9991 would invalidate that case.
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ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
Gold Price Forecast: $4,400 Breakout Could Open Path to $4,900 XAUUSD Breaks Above 50-Day SMA The daily chart for spot gold shows that the price broke out of the wedge formation at the $4,120-$4,150 level on August 5, 2026. After the break, prices rallied to mark a high of $4,371 on Friday. This rebound from the bottom has broken the bullish structure and also the 50-day SMA and points toward the 200-day SMA in the $4,500 region.
Moreover, the RSI remains above the midline, which indicates the possibility of upside momentum in the gold market in the short term.
Silver price (XAG/USD) trades in a tight range at around $63.50 during the Asian trading session at the start of the week. The white metal struggles for a direction but is close to an almost seven-week high of $65.16 posted on Friday.
Bullions are expected to face heightened volatility, with the United States (US) Consumer Price Index (CPI) data for July on the radar, releasing on Wednesday.
The impact of the US CPI data will likely be significant on the Federal Reserve (Fed) interest rate expectations, as comments in the July monetary policy statement signaled that officials are heavily concerned about high inflation and are committed to bringing price pressures down to the 2% target.
Higher US inflationary pressures prompt Fed interest rate hike risks, a scenario that bodes poorly for non-yielding assets, such as Silver.
On Friday, the Silver price gained sharply as traders scaled back hawkish Fed bets for the September policy meeting after the release of the US Nonfarm Payrolls (NFP) data for July, which showed a reduction in the overall labor force.
According to the CME FedWatch tool, the odds of the Fed raising policy rates in the September meeting are 46%, a sharp decline from 67% seen a week ago.
The US NFP report showed employers fired 23K workers, while they were anticipated to create 80K fresh jobs. Also, June’s NFP print was revised lower to 20K from 57K.
Economic Indicator Nonfarm Payrolls The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
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America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
The Japanese yen softened against the US dollar, even after the Bank of Japan (BoJ) flagged rising risks of faster interest rate hikes in the last meeting. The USD/JPY pair rose to 158.23, up by nearly 2% from its lowest level this month.
There are signs that the BoJ is considering faster interest rate hikes to fill the gap with the Federal Reserve’s benchmark rate.
Minutes of the last meetings showed that officials were comfortable with higher rates for longer as inflation remained at an elevated level. The minutes said:
“Given that underlying CPI inflation has been approaching 2 percent and greater consideration should be given to upside risks to prices than before, it could be considered that the pace of policy interest rate hikes will be faster than market expectations.”
The BoJ left interest rates unchanged at 1% in the last meeting, its highest level since September 1995. It made the last 25 basis point hike in June, and now Polymarket traders believe that it will hike again later this year.
The most recent data showed that the headline consumer price index (CPI) jumped to 1.7% in June, the highest reading since December last year. This surge was driven by electricity and gas prices as government subsidies were scaled back.
Energy prices have jumped in Japan this year because of the ongoing US-Iran war that pushed Brent and West Texas Intermediate (WTI) prices to nearly $120 at the peak. Crude oil prices drifted higher on Monday as Iran announced tougher rules for reopening the Strait of Hormuz. It is seeking reparations, release of frozen assets, and the lifting of the naval blockade.
The USD/JPY pair has risen recently as investors bought the dip after the recent interventions by the US and Japan. The BoJ has spent over $50 billion this month, while the US has swapped euros worth billions of dollars to Japanese yen.
This happened as the US is concerned that Japan will be forced to dump some of its US treasuries to boost the yen, a notable thing since Japan holds over $1.1 trillion in bonds and the 30-year yields have remained above 5% for over a month.
It is common for a forex pair to bounce back after experiencing such a big drop that the USD/JPY had earlier this month.
The pair will next react to the upcoming US consumer price index (CPI) report that comes out on Wednesday. Economists expect the data to show that inflation slowed modestly in July as gas prices fell a bit. This report comes a few days after the US released the weak nonfarm payrolls (NFP) data, which showed that the economy lost 23k jobs last month.
USDJPY chart | Source: TradingView
The daily chart shows that the USD to JPY pair plunged from a high of 163.96 to a low of 155.20. It has now plunged below the 50-day Exponential Moving Average (EMA), a sign that bears are in control for now.
At the same time, the two lines of the Percentage Price Oscillator (PPO) have moved below the zero line and moved to the lowest level in months. The pair is also forming a bearish flag pattern, a common bearish continuation sign.
Therefore, the pair’s outlook is mixed for now. One aspect is where it resumes the downtrend as sellers attempts to retest this month’s low of 155.20. On the flip side, it may bounce back to the psychological level of 160.
Gold consolidates after breaking higher last week Central bank demand remains broadly supportive Elevated US real yields fail to derail gold’s rally $4,367 key level overhead The way gold continued to find buyers on dips beneath $4,000 an ounce through June and July may have been the tell that a larger move was coming, eventually culminating in the sharp breakout seen in early August. The move followed a run of supportive developments, raising the possibility that the breakout could evolve into something more significant depending on how the price action evolves from here.
Supportive forces build behind gold The July Fed meeting came in dovish relative to what had become fairly hawkish market expectations, with around a one-in-three chance of a rate hike priced beforehand. Yes, three regional presidents dissented in favour of tightening, but there were no dissents from the Board of Governors, helping to knock some of the wind out of the dollar’s sails as rate hike pricing retraced slightly, as seen below.
Source: TradingView, FOREX.com
That was followed by the unusual US-Japan intervention episode to support the yen, involving the US Treasury alongside Japan’s Ministry of Finance. The strengthening in the yen added to the pressure already building on the dollar.
Source: TradingView, FOREX.com
Then came a World Gold Council report, which showed central bank gold demand had picked up sharply in the June quarter, partly reflecting a substantial downward revision to the estimate for Q1. More importantly, reserve managers indicated they broadly expect central banks to keep adding to their holdings, suggesting demand remains supportive around current price levels.
Gold shrugs off elevated real yields
Source: TradingView, FOREX.com
What makes gold's performance all the more interesting is that it has come in an environment where, historically, it may have been expected to struggle, with benchmark US real yields climbing to levels last seen in late 2023, the peak of the Fed’s hawkish phase during its prior tightening cycle. Despite that headwind, non-yielding gold hasn’t wilted, it’s rallied, suggesting factors elsewhere have been more than powerful enough to offset it.
Source: TradingView
One of those factors has been the US dollar. After breaking lower following the Fed and intervention episode, the DXY has since settled into a relatively narrow sideways range. With key US inflation data due later this week, that consolidation suggests gold’s rebound may take a breather in the very near term.
Gold consolidates its breakout
Source: TradingView
Turning to the technical picture, we’ve seen the longer-term sequence of lower highs running from the record highs broken. That coincided with a breakout of the compression structure that had been forming over recent months, seeing the price not only rip through wedge resistance and the 50-day simple moving average last week, but also $4,200. From that moment onwards, the price went on to tag $4,367 per ounce, the low set back in late May which reverted to resistance in June. It's the key level to watch overhead right now.
On the downside, the breakout zone around $4,200 remains important, although $4,300 an ounce did briefly cap the breakout last week, making it relevant as well. So they’re the levels I’d be keeping an eye on underneath where gold now trades.
The message from the oscillators favours an extension of the bullish move. RSI is making higher highs and higher lows, while not yet being overbought, sitting above the neutral 50 level at 63. That shows bullish momentum is building, a message confirmed by MACD which has staged a bullish crossover and flipped positive. So buying dips is the preferred strategy right now.
If we see a breakout above $4,367, preferably on a closing basis, it would allow for longs to be set above with a tight stop beneath for protection, targeting the 100-day simple moving average initially, with the far more important 200-day moving average the next overhead at $4,495.
Alternatively, if the modest pullback we’ve seen in Asia today retraces further, take note of the price action at $4,300 and $4200. If there is evidence that buyers emerge on dips towards those levels, they too could be used to set longs above with a stop beneath for protection, targeting $4,367 and 100-day moving average initially.
If we were to see a reversal back beneath $4,200 per ounce, it would question the bullish bias and open the door for sideways to lower levels.
Gold (XAU/USD) drifts lower at the start of a new week and moves away from its highest level since June 17, touched on Friday following the disappointing release of the US Nonfarm Payrolls (NFP) report. In fact, the crucial US monthly employment data showed that the economy unexpectedly lost 23K jobs in July, while the previous month's reading was also revised down to 20K from 57K. This pointed to signs of a cooling US labor market and undermined the case for the US Federal Reserve (Fed) to raise interest rates, which, in turn, weighed heavily on the US Dollar (USD) and provided a goodish lift to the non-yielding bullion.
The immediate market reaction, however, turned out to be short-lived as uncertainties surrounding the Middle East crisis and the reopening of the Strait of Hormuz offered some support to the safe-haven Greenback. In fact, Iran reiterated conditions for a full reopening of the critical waterway, including an end to the US naval blockade, the removal of sanctions and compensation for war damage. Moreover, Tehran has ruled out direct talks with the US, citing alleged violations of the interim peace agreement reached in June. This keeps the geopolitical risk premium in play and underpins the USD, exerting some pressure on gold.
Meanwhile, the US-Iran standoff acts as a tailwind for crude oil prices. Investors remain worried that rising energy prices will rekindle inflationary pressures and force major central banks to adopt a more hawkish stance. Furthermore, the CME Group's FedWatch Tool indicates that traders are still pricing in a greater chance that the US central bank will raise borrowing costs by the year-end. The outlook remains supportive of elevated US Treasury bond yields, which favors USD bulls and backs the case for a further depreciating move for gold. Traders, however, might opt to wait for the latest US inflation figures this week.
XAU/USD daily chart
Source: TradingViewTechnical Analysis:Friday's breakout through the 38.2% Fibonacci retracement level of the April-June downfall favors XAU/USD bulls. The said support is pegged just above the $4,300 mark, which, if broken, could prompt some technical selling and pave the way for a further depreciating move. Moreover, Gold remains below the 50% Fibo. level and the very important 200-day Simple Moving Average (SMA), warranting some caution before positioning for an extension of the recent move up witnessed over the past week or so.
US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
USDEURGBPJPYCADAUDNZDCHFUSD0.03%0.02%0.30%0.09%0.04%0.22%0.12%EUR-0.03%-0.00%0.26%0.03%0.00%0.17%0.08%GBP-0.02%0.00%0.26%0.04%0.04%0.17%0.09%JPY-0.30%-0.26%-0.26%-0.25%-0.29%-0.18%-0.20%CAD-0.09%-0.03%-0.04%0.25%-0.10%0.13%0.03%AUD-0.04%-0.01%-0.04%0.29%0.10%0.14%0.07%NZD-0.22%-0.17%-0.17%0.18%-0.13%-0.14%-0.08%CHF-0.12%-0.08%-0.09%0.20%-0.03%-0.07%0.08% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Gold resumes advance on Friday after bulls paused previous day and hit new seven- high ($4371), on track for the biggest weekly gain since the third week of January.
Disappointing US July labor data on Friday contributed to fading expectations for Fed rate hike in September that further boosted demand for the yellow metal, although, markets await release of US inflation report for July (due next week) to get more details about the monetary policy near-term outlook.
Fresh gains broke through important barrier at $4304 (Fibo 38.2% of $4889/$3942 descend) with weekly close above this level to confirm bullish signal and further strengthen near-term structure.
Bulls cracked next barrier at $4358 (daily Ichimoku cloud top) although may take a breather here, due to stretched daily studies and partial profit-taking at the end of the week, before resuming towards targets at target at $4390 (100DMA); $4400 (round-figure) and $4416 (50% retracement).
Dips should be limited and ideally contained by broken Fibo 38.2% barrier, to keep bulls intact.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
Knowing how to trade the Consumer Price Index (CPI), one of the most important measures for inflation, is an essential skill for all types of traders, no matter their level of expertise. The CPI report has the power to shape central bank monetary policies and can send ripples through international markets. This comprehensive guide offers useful tips on how to interpret the CPI data, anticipate central bank reactions and execute disciplined trades with clarity while minimizing risk.
Why CPI Matters More than any Other Inflation Release To start with, the Consumer Price Index (CPI) measures how the prices consumers pay for certain goods and services change over time. It is considered a key metric of inflation for any nation’s economy and an important indicator of economic health. However, the most closely followed CPI report in the world, is the one published by the US, currently the world’s largest economy. The Federal Reserve, seasoned traders and adept investors, take the monthly results into consideration before making their next moves.
A rising or falling CPI can directly influence interest rate expectations, which subsequently impacts the USD, Treasury yields, gold and JPY carry trades. As soon as the report goes public, asset prices start experiencing rapid swings until the markets eventually adjust to a level dictated by whether the data is higher, lower or at the exact same level as forecasts.
Understanding CPI Like a Pro When looking into the rise and fall of goods and services’ prices, two separate inflation measures come up – Headline inflation and Core inflation. These two figures differ in the products they monitor and even though they are both critical economic indicators, the Core CPI tends to carry more weight for the Fed.
Headline CPI The Headline CPI rate reflects the total inflation within an economy. This raw figure encompasses all goods and services including highly volatile items, like food and energy products, the prices of which are often susceptible to seasonal changes and can shift irrespective of economic conditions. Their inclusion means the figure is more aligned with changes in real-world costs but also more easily influenced by short-term price swings.
Core CPI Core inflation is a version of CPI that filters out the prices of food and energy – highly volatile categories that can easily be affected by non-economic factors such as the weather, geopolitical events and more. Omitting these key products leads to a clearer snapshot of underlying inflationary trends which can better guide monetary policy in achieving its primary objective – safeguarding medium-term price stability. That is why the Fed relies more on Core CPI to form its central bank policy.
How CPI Moves Markets When it comes to market reaction, the CPI forecast matters more than the actual figure. What markets respond to is the difference between the consensus forecast and the actual results. As deviation grows, the reaction becomes more intense resulting in price fluctuation, extensive stop-loss activation and the formation of a strong intraday trend. Keep in mind that the forecast is already priced in, what shifts prices is the element of surprise.
When CPI data exceeds expectations, market participants expect the Fed to raise interest rates to cool inflation down. Higher rates make yield-returning assets like government bonds more attractive to investors domestically and abroad. This scenario tends to strengthen the US dollar causing major pairs like the USDJPY to rise. At the same time, non-yielding precious metals like gold and silver can lose their appeal, which can trigger selloffs and a price dive.
If CPI results come in lower than expected, markets tend to expect a more dovish approach from the Fed. This can send off an instant alarm signal across global markets. Lower interest rates can decrease demand for dollar-denominated securities which in return weakens the US dollar. This could intensify market risk sentiment, driving investors to safe-haven assets like the Japanese Yen (JPY) and precious metals like gold. The increased capital inflows into these two assets can cause gold to rally and the USDJPY to drop.
How CPI Interacts with Other Data Within the economy, circular patterns are predominantly present – changes in one sector can spill over to other areas. The CPI has a strong correlation with other key indicators like the PPI, the NFP, Wage Growth, and Retail Sales. They are all caught within a dynamic, interconnected feedback loop. None of them moves alone; changes in one tend to trigger changes in the others.
PPI – Producer Price Index The Producer Price Index measures the change in prices for wholesale goods, revealing changes in raw input costs. Unlike the CPI that tracks price changes paid by consumers, the PPI shows how prices change for producers. Both measures show inflation in a different but complementary way.
When producers see their input costs climb higher, they tend to increase product prices to cover the higher expenses. Thus, customers are often burdened with additional charges. In cases like these, a higher PPI can lead to a higher CPI.
Wage Growth & NFP Wage growth indicates the rate at which average salaries grow over time. On the other hand, the non-farms payroll report shows how many jobs were added or removed from the US workforce in manufacturing, construction and goods within a month. Both reports are key indicators of economic health, can affect living standards and inflation, and are taken into consideration by the FOMC when making interest rate decisions.
How are these metrics in constant interplay with inflation? A significant increase in jobs and fast wage growth can be evidence of inflationary pressures. Employers who hire more staff and pay them higher salaries need to raise product and service prices to maintain their profitability at the same levels. At the same time, the employees have more spending power which in turn increases the demand for goods and drives prices in the broader market even higher. These conditions can lead to higher CPI rates and can urge the FOMC, the US Federal Reserve policymaking body, to increase interest rates.
In contrast, a drop in jobs and slow wage growth can be a sign of economic slowdown. As salaries show no change and hiring slows down, consumers have less money to spend. This can cause demand for goods and services to decline, pushing product prices and the CPI down. In an attempt to boost the economy, the Fed could lower interest rates.
Retail Sales Retail Sales is another major economic barometer which shows the total amount of products purchased by consumers within a specific period. In the US, Retail Sales are published monthly and constitute a vital measure for the national economy in which consumer spending represents two thirds of the gross domestic product.
The monthly figure often moves alongside the CPI. High sales can point towards an expanding economy in which consumer confidence is increased and demand is strong – conditions that can lead to higher inflation and potentially tighter monetary policy. Alternatively, declining sales can indicate an economic downturn, decreased household spending and weak demand for goods and services. In this scenario, inflation usually drops, which might prompt the Fed to lower interest rates to help stimulate the economy.
The General Rule The PPI, Wage Growth, NFP and Retail Sales reports moving in the same direction can reveal a strong economic cycle. High figures provide firm evidence for economic expansion, in which the CPI is expected to rise. Low numbers give a strong signal for a declining economy and a lower CPI rate. In synchronized conditions like these, the CPI trade becomes highly probable.
How CPI Guides the Fed & why USDJPY Reacts Violently The Fed has a dual mandate: to maintain price stability with a target inflation rate of 2% and keep the labor market healthy. The U.S. economic body closely watches the CPI, the key inflation metric, to adjust its monetary policy.
A low or falling CPI can reflect slow market growth which can prompt the Fed to lower interest rates. This reduces borrowing costs, which promotes business investment, helps boost consumer spending and revitalizes financial markets. However, if CPI comes in higher than expected, it signals that the economy could be growing too fast. In response to higher inflation, the Federal Reserve could increase interest rates which makes borrowing more expensive. This means less money enters the economy, businesses development halts, consumers spend less and investing declines.
USDJPY showcases heightened sensitivity to inflation, and it is a popular currency pair with investors for this type of setup. Let’s break down the why. To begin with, interest rate differentials between the US and Japan can considerably affect USDJPY. As we’ve seen, when the CPI rate climbs higher, the Fed raises interest rates, and Treasury yields increase. This makes the government-issued securities attractive investment options for local and international investors, strengthening the U.S. dollar and pushing the USDJPY exchange rate higher.
Now, let’s consider the opposite scenario. When CPI data comes in lower than expected, the Fed employs a looser monetary policy to boost the economy. This includes lower interest rates and in effect lower Treasury yields. The reduced return on the U.S. government debt securities makes them a less desirable investment option and causes a drop in the USD, which in turn translates into a lower USDJPY exchange rate.
How Gold (XAUUSD) Reacts to CPI Decoding the relationship between the CPI and the price of gold is crucial if you are looking to capitalize on inflation and its subsequent wave of effects on the precious metal. The first thing you need to be aware of is that gold tends to move in the same direction as CPI and has a moderately inverse correlation to U.S. Treasury yields. Let’s delve deeper into this financial interplay.
Historically, when CPI increases pushing the Fed towards lower interest rates and Treasury yields, the price of gold generally tends to climb higher. This can be attributed to gold’s status as a safe-haven asset. When inflationary pressures cause purchasing power to drop and economic growth has to be slowed down with a tighter monetary policy, investors move funds into gold to protect their capital.
In the reverse situation, when the CPI is relatively stable or declining, the price of gold tends to show more variable patterns of movement, usually leading to a substantial drop. This points to other factors interfering with gold prices, when inflationary pressures are low. The general trend is that a drop in CPI, followed by a decrease in interest rates and Treasury yields, tends to push the US dollar lower and gold higher. However, it is advisable that you consider CPI data within a broader economic framework to ensure your moves align with the overall global market conditions.
The CPI Playbook: USDJPY & Gold After you get a grasp of the significance of the CPI, the way it interacts with other key economic reports and correlates with USDJPY and gold, you can start trading any inflation-caused chain of reactions with confidence. To increase your chances of a successful outcome, a step-by-step plan of action is essential. We present you with our own expert strategy guidebook based on tested game plans applied by experienced macro traders in global markets.
Mark key levels – Note down the previous day’s highs and lows for the Asian and New York trading sessions Identify liquidity pools – chart areas where a large volume of pending orders could be triggered. Search for equal highs or lows pointing to consolidation zones. These points gather institutional interest and can turn into magnets for price. Reduce your position size – volatility tends to rise around the release of the CPI report Step 2 – First Reaction:
Ignore the market’s first reaction – the first spike is market noise, driven by algorithmic trading Do not trade during the first 1-2 minutes – volatility surges around this time Step 3 – Wait for Confirmation
Look for a Directional Candle within the 5-minute to 15-minute timeframe. The candle should: have a large real body and small wicks, giving a clear signal that markets moved strongly in a specific direction. close near a key high or low level. NOTE: Beware of immediate wick rejection. In this case the candle shows significant move towards a particular direction and then reverses to close near its opening price.
Wait for a Confirmation Candle – this gives the final confirmation for the trend, and it should display the below characteristics: Increased trading volume – signaling a large number of traders are active Close near the price’s peak or bottom – depending on whether it is an uptrend or downtrend Larger size – it is usually bigger than the previous candles Alignment with the trend – it should be bullish for a bullish trend, bearish for a bearish trend Step 4 – Execute Based on CPI Outcome
If the CPI rate comes in above forecasts, the USDJPY exchange rate will most likely increase.
Check that liquidity is above pre-release highs to confirm the market is bullish Place a stop loss below the Confirmation Candle low Buy USDJPY If CPI rate comes in below forecasts, the USDJPY exchange rate will most likely decline.
Check that liquidity is below pre-release lows to confirm the market is bearish Place a stop loss above the Confirmation Candle high Sell USDJPY Start Trading USDJPY
Gold (XAUUSD) – CPI Strategy Before entering this trade, please note that Gold is more volatile than USDJPY.
Step 1 – Mark the Pre-News Range
Identify the high and low levels formed 30 – 60 minutes before the release of the CPI report. Step 2 – Ignore the First Reaction
The first post-CPI spike is often a fakeout. Step 3 – Wait for Clear Acceptance
Study candles within the 5-minute or 15-minute timeframe to confirm “acceptance levels” – levels the price is trading within and that buyers and sellers don’t try to break away from If the price breaks the range and holds, there could be trend continuation – the price will most likely continue in the same direction after the first reaction. If the price rejects the breakout, a reversal could emerge – the price will most likely continue moving in the opposite direction. Look for a Directional Candle within the 5-minute to 15-minute timeframe. The candle should: have a large real body and small wicks, giving a clear signal that markets moved strongly in a specific direction. close near a key high or low level. NOTE: Beware of immediate wick rejection. In this case the candle shows significant move towards a particular direction and then reverses to close near its opening price.
Wait for a Confirmation Candle – this gives the final confirmation for the trend, and it should display the below characteristics: a. Increased trading volume – signaling a large number of traders are active
b. Close near the price’s peak or bottom – depending on whether it is an uptrend or downtrend
c. Larger size – it is usually bigger than the previous candles
d. Alignment with the trend – it should be bullish for a bullish trend, bearish for a bearish trend
Step 4 – Execute Based on CPI Results
If the CPI rate comes in above forecasts, the price of gold will most probably drop.
Check that liquidity is below pre-release lows to confirm the market is bearish Place a stop loss above the Confirmation Candle high Sell XAUUSD If the CPI rate comes in below forecasts, the price of gold will most probably rise.
Check that liquidity is above pre-release highs to confirm the market is bullish Place a stop loss below the Confirmation Candle low Buy XAUUSD Risk Management – The Most Important Part Before you enter the markets, there’s one thing you need to understand – not every trade can be a successful one. That is why an effective trading strategy incorporates more than just checking numbers and performing technical analysis to identify the best time to enter and exit a position. It also includes a well-organized risk management plan to contain losses in case the price moves against you. The financial markets can be affected by a number of factors outside the economic sphere, including global politics, breaking news announcements and even natural disasters. Any unpredicted, sudden changes can cause sharp price swings which can be detrimental to your account and even lead to wipe-outs.
A solid risk management strategy helps you prevent uncontrolled losses, protect your capital, reduce emotional trading, achieve consistency, improve discipline and aim for profitability in the long run. To be able to hit all these targets, you need to incorporate tested practices in your trading:
1. Never risk a large percentage of your capital per trade Ideally, you do not want to be allocating more than 1% to 2% of your balance on a single CPI trade. This ensures you only risk a small portion of your trading funds, and a single loss cannot affect your trading in the long term.
2. Use Limit Orders The release of a CPI report often triggers high volatility. This can cause trading volume to dry up briefly and increase the risk of slippage – the risk of orders not being executed at the requested level but getting filled at a worse price than expected. Setting limit orders and pre-defining the execution price helps you have better control over limiting losses. However, make sure you set your stops wide enough to allow for normal price fluctuations and retracements without forcing trades to be stopped out prematurely.
3. Reduce Position Size Choosing the proper position size can protect your trade from the dangers of overexposure and changing financial conditions. To better determine the size of your position, take into consideration your risk tolerance, the post-CPI release market and the probability of your CPI trade based on your technical analysis.
4. Avoid Revenge Trading When met with setbacks, impulse and emotion can very easily take over from logic. Many of you may have already fallen into the trap of revenge trading – trying to recover from losing trades fast, only to end up with even more hits on your balance. To avoid this pitfall, you need to step away from the trading platform after a loss, give yourself some time to assess the situation and return with a calm, clear and focused mindset.
The Final Overview Understanding inflation and the economic effects of the CPI report is an advanced skill that can help you make more informed trading decisions and place higher-probability trades in markets whose inner workings you can now see more clearly. From explaining the importance of the US CPI, its interdependent relationship with other key economic indicators, the ways it can affect the decisions of the Federal Reserve and move the prices of USDJPY and gold to detailed step-by-step trading strategies for the globally popular assets, this article covers all you need to trade the CPI with precision and confidence.
The Dow Jones Index reached new record highs last week as strong company earnings and continued buying of AI-related stocks lifted market confidence. Reports that the Strait of Hormuz could reopen also helped improve sentiment and pushed oil prices lower. Gold moved sharply higher after U.S. employment data showed employers cut 23,000 jobs in July, much weaker than expected and a sign that the U.S. economy may be slowing.
The U.S. ISM Manufacturing PMI was stronger than expected, showing that the manufacturing sector is holding up better than many investors had expected. Markets also continued to watch the impact of the recent coordinated currency intervention by Japanese and U.S. authorities, the first joint intervention in 15 years, which supported the Japanese yen.
Japan’s Cabinet also approved a plan to reduce the consumption tax on food products from 8% to 1% for two years starting in April 2027. The measure, proposed by Prime Minister Sanae Takaichi, is designed to help households cope with higher living costs and encourage consumer spending.
Markets This Week U.S. Stocks The Dow Jones Index surprised many traders by reaching new record highs as positive sentiment returned to the stock market. The trend has turned higher, with the 10-day moving average now rising. Previous resistance around 53,000 is expected to act as support, making buying on pullbacks the preferred strategy this week. Resistance levels are at 54,500, 55,000 and 56,000. Support is seen at 53,000, 52,500, 51,500, 51,000 and 50,000.
Japanese Stocks The Nikkei 225 moved above its recent downtrend as buyers returned to the market. Even though the Japanese yen remained strong, investors no longer saw this as a major negative. Concerns about U.S. government finances also appeared to have already been priced into the market. Technical indicators have not yet confirmed a new uptrend, so the index may continue to trade in a range. For short-term traders, buying near support and selling near resistance may be the best strategy this week. Resistance is at 67,000, 68,000, 69,000 and 70,000. Support is at 64,000, 63,000, 62,000, 61,000 and 60,000.
USD/JPY USD/JPY fell sharply to around 155 after the United States and Japan confirmed they had carried out a joint currency intervention. Buyers returned later in the week as traders continued to focus on the large interest rate difference between the U.S. and Japan. Even after weak U.S. jobs data caused an initial sell-off, USD/JPY quickly recovered, showing strong buying interest at lower levels. The pair may continue to move higher this week, although the falling 10-day moving average could slow gains later in the week. Resistance is at 159.00, 160.00, 161.00, 162.00, 164.00 and 165.00, while support is at 157.00, 156.00, 155.00 and 154.00.
Gold Gold surged higher last week as lower oil prices, continued buying by central banks, and weaker-than-expected U.S. employment data increased demand for safe-haven assets. Gold has traded quietly for several weeks, and last week’s strong move could be the start of a new uptrend. In the short term, however, the market is becoming overbought, so short-term traders may find better opportunities by selling rallies. Medium-term traders should be cautious about selling and may find better buying opportunities on pullbacks toward the rising 10-day moving average. Resistance is at $4,400, $4,500 and $4,600, while support is at $4,200, $4,150, $4,050, $4,000 and $3,950.
Crude Oil WTI crude oil started the week lower after the United States and Iran resumed talks, reducing concerns about supply disruptions. Selling continued through most of the week as traders became more confident that tensions in the Middle East would not get worse. Oil prices are still likely to remain volatile, but selling near the 10-day moving average may be the better strategy this week. Resistance is at $80, $90, $95, $100 and $105, while support is at $75.00, $67.50, $65.00 and $60.00.
Bitcoin Bitcoin tested the $65,000 resistance level last week as stronger U.S. stock markets improved confidence in risk assets. Buyers were not able to break above this level, but buying interest remains strong. A break above $65,000 this week could lead to more buying, so looking for buying opportunities may be the better strategy. Resistance is at $65,000, $75,000, $80,000, $85,000 and $90,000, while support is at $60,000, $55,000 and $50,000.
This Week’s Focus Monday: Japan Current Account Tuesday: Australia RBA Interest Rate Decision, U.S. Existing Home Sales Wednesday: Japan Reuters Tankan Index, U.S. CPI Thursday: Japan PPI, U.K. GDP and Industrial Production, E.U. Industrial Production, U.S. PPI Friday: E.U. GDP and Trade Balance, U.S. Retail Sales and Michigan Consumer Sentiment Another busy week is expected as traders watch U.S. inflation data, with the CPI and PPI likely to have a big impact on all markets. Markets will also follow the ongoing U.S.-Iran talks and any progress on reopening the Strait of Hormuz. Other key events include U.S. Retail Sales and the Michigan Consumer Sentiment Index, while traders will also be watching to see if Japanese authorities carry out any further intervention to support the yen.
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On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7884 compared to Friday's fix of 6.7904 and 6.7379 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.
USD/CAD opens the new week trading at its lowest level since early June, breaking lower on Friday following the release of a vastly divergent set of labour market data for July, continuing a trend seen across other economic figures over recent months.
A tale of two jobs reports That trend was on full display again last Friday, with a soggy US payrolls report sitting in stark contrast to a blowout set of figures north of the border. US non-farm payrolls fell by 23,000 in July against expectations for an 80,000 increase, with May and June also revised down by a combined 103,000. While the unemployment rate fell to 4.1%, average hourly earnings rose just 0.1% on the month, providing little evidence that labour market conditions are bolstering domestic inflation pressures.
Canada’s report could hardly have been more different. Employment jumped by 75,100 against expectations for an increase of just 16,500, with gains split almost evenly between full-time and part-time positions. The unemployment rate also fell to 6.4%, its lowest level in two years. But relativities matter. Despite the improvement, there is still considerable slack in the Canadian labour market, while annual wage growth slowed to 3.0% from 3.7%. That suggests a meaningful reacceleration in labour-driven inflation looks unlikely near-term, especially with inflation pressures already soft, questioning the need for the Bank of Canada to hike rates by year-end.
There are also reasons to be cautious about reading too much into the US payrolls miss. July has developed a habit of producing sizeable downside surprises in recent years, with seasonal adjustment around the summer months a possible factor. Much of the weakness was also concentrated in local government education, while private payrolls increased by 30,000. That doesn’t make the report strong, but it does raise questions about how much signal should be taken from the headline decline alone.
USD/CAD keeps one eye on Fed pricing
Source: TradingView, FOREX.com
When it comes to USD/CAD, there hasn’t been an obvious underlying driver of the recent move, at least based on the various relationships I’ve looked at. But one that has been reasonably consistent is the relationship between the pair and market pricing for the Fed out to its June meeting next year. As the amount of tightening priced over that period has been whittled away, USD/CAD has moved lower.
That puts plenty of emphasis on anything capable of shifting Fed pricing from here. With the Canadian calendar very quiet this week, the main event risk comes from the US, with CPI and PPI due on Wednesday and Thursday respectively. They are the key scheduled risk events for USD/CAD traders, alongside any fresh developments on the geopolitical front.
Interestingly, energy prices have shown little consistent relationship with USD/CAD over short, medium or longer-term periods, perhaps reflecting the fact that both the US and Canada are major energy producers.
CPI and PPI to test the Fed hike case
Source: LSEG Workstation, FOREX.com
A relatively soft set of inflation figures is expected this week. Core CPI is seen rising just 0.2% on the month, which would see the annual rate slow to 2.5%. That is still above the Fed’s target and CPI is not its preferred inflation measure, but it would still be a tepid outcome given how strongly the US economy has performed relative to much of the rest of the world.
The same applies to upstream inflationary pressures. Headline PPI is expected to rise just 0.1% on the month and 3.4% over the year, with the annual rate seen slowing slightly. And looking at Citi’s US inflation surprise index above, even with the supply-driven energy shocks of recent years and some inflationary pressure stemming from the AI buildout, there have been relatively few meaningful upside surprises. By and large, inflation outcomes have either been close to expectations or undershot them.
So while the Fed is still talking about the risk of further rate hikes and markets continue to mildly favour a move in September, expectations for this week’s inflation reports are benign. Could the data come in ugly? Absolutely. But based on the trend seen in recent years, repeated upside inflation surprises have not been a feature.
Canada’s data momentum continues to improve
Source: LSEG Workstation, FOREX.com
It’s not just US inflation prints that have tended to undershoot or come in close to expectations recently, but broader economic data as well. Citi’s Economic Surprise Index measures how economic releases print relative to market expectations. While the US economy is still performing strongly in absolute terms, the data have become less likely to beat expectations over recent weeks, with the index falling to its lowest level since early May.
At the same time, Canadian data have been heating up, with its surprise index moving sharply higher and overtaking the US measure for the first time since earlier this year. That relative shift has been mirrored in USD/CAD over the same period, with the pair breaking lower as the data backdrop has moved in Canada’s favour.
USD/CAD trend turns lower
Source: TradingView
From a technical perspective, USD/CAD has established a new downtrend, highlighted by a string of lower highs and lower lows. Friday’s jobs reports delivered a break below 1.3991, with the pair now sitting just above the 100-day simple moving average.
The message from the oscillators also favours selling into strength. RSI (14) continues to trend lower, setting lower highs and lower lows, and is not yet oversold. MACD has also staged a bearish crossover and slipped into negative territory, confirming that downside momentum continues to build.
The question is whether traders want to get short at current levels after the retracement already seen, especially with question marks around the signal from the US payrolls report and major inflation data looming. There are also signs that the geopolitical situation in the Gulf is deteriorating again, which could favour broader US dollar strength. With the big dollar off its highs, that raises the risk of a mild retracement in USD/CAD ahead of Wednesday’s CPI report.
In the interim, 1.3950 is worth watching. The pair has spent plenty of time either side of it this year, making it a useful near-term pivot for those looking at short-term setups. My preference would be to see a move back towards former support at 1.3991, and then watch how the price behaves. A clear rejection would suggest that former support has flipped to resistance, creating a more appealing setup for shorts, allowing for a tight stop to be placed above.
On the downside, the 100-day moving average is the first target, followed by 1.3870, which has acted as both support and resistance on several occasions this year. The 200-day moving average sits just beneath, making that broader area an obvious target zone for shorts. Beyond there, 1.3775 is a minor support level, before a much more important zone kicks in around 1.3710. It acted as resistance earlier this year and lines up with the 78.6% Fib retracement of the September 2024 to February 2025 bull move.
On the topside, a break back above 1.3991 into the low 1.40s would start to question the bearish bias, opening the risk of a retest of the minor downtrend from the July highs, currently found around 1.4070. That also lines up with the 50-day simple moving average, which the price has respected frequently in recent months. A clean break above that downtrend would break the sequence of lower highs and raise the risk of a resumption of the prior bullish trend.
The Australian dollar enters the week on a six-week winning streak, but the rally could face an important test from the RBA and US CPI. Markets have priced out a near-term RBA hike following softer Q2 inflation, leaving the US dollar and incoming US data increasingly important for AUD/USD. A weak CPI print could undermine Fed hike expectations and give the Aussie room to push higher, while a hotter result could support the US dollar and limit gains around 71c.
View related analysis:
Australian Dollar Outlook: AUD/USD, AUD/JPY and AUD/NZD Setups Australian Dollar Broadly Lower as Soft CPI Reverses RBA Hike Bets Gold Price Outlook: Can Quiet Accumulation Trigger a Breakout? US Dollar Awaits NFP as September Fed Hike Odds Hang in the Balance Australian Dollar Outlook: RBA and US CPI Set the Tone US Jobs Growth Contracts as Hiring Weakens Expectations for a September Fed rate cut were lowered once again following a weak nonfarm payrolls report. NFP job growth fell 23k – its first contraction in six months – missing the 85k estimate. June’s NFP was downgraded to 20k from 57k, while private payrolls slowed to 30k, missing the 78k expected, with June’s figure slashed to 330k from 48k. Healthcare and social assistance – which has accounted for around 80% of total job growth over the past 18 months – rose by a mere 22k, government jobs fell 53k and retail trade was down 19.4k. While unemployment fell to 4.1%, the focus was on growth – or lack thereof.
Fed fun futures now imply a 57% of no rate change in September, from a 54% chance of a hike before NFP. October hike odds are now 47%.
The US dollar was broadly lower on Friday and the weakest FX major, seeing the USD index form a bearish engulfing candle and weakest close in two months. Gold surged to a 7-week high during its best week 9 in 28.
Australia This Week: Economic Data and Events for AUD/USD Traders RBA To Deliver a Hawkish Hold? Markets have effectively priced out a hike from the RBA this week following weaker-than-expected Q2 CPI figures two weeks ago. The OIS curve still suggests an 89% chance of a single 25bp hike within one year, however. The RBA’s tone could therefore shape expectations for that hike, but few are expecting one anytime soon.
Inflation remains firmer than the RBA would like and above its target band, which should force it to retain a hawkish bias tomorrow. But unless crude oil prices rip higher again due to another flare-up in the Middle East peace process, it seems likely that the RBA’s cash rate may have peaked at 4.35% for now. That said, it seems unlikely the RBA will tank the Australian dollar with a dovish tone.
The Australian dollar may therefore take its directional cue from a weaker US dollar rather than hawkish RBA expectations. This could see the Aussie grind higher without going on a tear, although resistance looms for AUD/USD and support is nearby for the US dollar index.
Source: LSEG
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Traders will be on high alert for any pockets of weakness in incoming US data following the latest NFP miss. Core CPI will be top of the list, especially as ISM services prices paid have fallen from elevated levels and crude oil prices are lower than they could have been. Even a vaguely weak inflation print could crush hopes of another Fed hike, send the US dollar lower and lift risk appetite, allowing AUD/USD to rally along for the ride.
Traders will then shift their focus to producer prices and retail sales, with any signs of weakness potentially backing bets to short the US dollar. So, US inflation data could hold the key to the Australian dollar’s direction this week. An upside CPI surprise could muddy the waters, help the US dollar recover and stifle the AUD/USD rally around 71c.
Source: BLS, ISM, LSEG
Australian Dollar Performance It has been a bullish month for the Aussie overall, although its performance has been uneven – and that could point towards a mixed performance ahead. Cleaner, more explosive moves tend to occur during periods of risk aversion, risk rebounds or central bank policy divergence. None of those are apparent at the moment. SO unless a fresh catalyst arrives, moves could be on the smaller side. Though the best chance of a rally from AUD/USD could be if we see US data continue to undershoot expectations.
Chart prepared by Matt Simpson - Source: LSEG
AUD/USD rose for a sixth consecutive week and closed firmly above 70c. Whether it rises for a seventh week could come down to US data. AUD/CAD remains confined to its established range, which has favoured bearish setups near the highs and bullish setups near the lows. AUD/CHF appears to be forming a bullish flag around its cycle highs. AUD/EUR is becoming difficult to decipher directionally, given its series of higher lows and higher highs, which also lacks the structure of a continuation triangle. AUD/GBP is trying to gain further ground after bulls defended the March low, but this could also form the ‘right shoulder’ of a classic H&S bearish reversal. AUD/JPY found support at the 2024 high and shows potential to recoup more of its post-intervention losses. AUD/NZD formed a bearish engulfing week and closed below 1.20, although the sell-off from the highs is losing momentum overall. I am therefore not convinced it is ready to roll over without a fresh catalyst.
AUD/USD Technical Analysis: Australian Dollar vs US Dollar AUD/USD Correlations Strengthen Against the US Dollar The Aussie’s strongest relationship remains with the US dollar, with the inverse correlation between AUD/USD and the US dollar index (DXY) rising to -0.90 over 10 days, from -0.87 over 20 days and -0.82 over 60 days. China and risk sentiment remain supportive: AUD/USD has a 0.97 correlation with the Chinese yuan and 0.78 with the S&P 500 over 10 days. Gold has also become more closely aligned, with the correlation rising to 0.89 over 10 days. Commodity links are more mixed: copper's correlation has fallen to 0.51, while WTI crude oil has shifted to a -0.61 inverse correlation.
Source: LSEG
For traders wanting a deeper understanding of futures positioning, I’ve also published a guide on how to read and interpret weekly COT data in forex markets.
AUD/USD Positioning Shifts as Longs Increase Large speculators increased gross longs by 6.6k contracts last week, their fastest weekly increase in three months. Gross shorts were a touch lower, suggesting the dynamics behind the Aussie’s rally are slowly changing. Total open interest is also rising alongside prices, pointing to broader demand for the Australian dollar from futures traders.
So, despite AUD/USD rising for six consecutive weeks, it still has potential to move higher if the US dollar remains under pressure. Six consecutive weekly gains is certainly on the extreme side, but the rally over this period has not been excessive. Taking the strong inverse correlation with the US dollar into consideration, the dollar remains in the driving seat.
Source: CFTC (COT) CME, LSEG
AUD/USD Options Signal Further Upside The US dollar index is clinging to support around the 99.384 swing low after breaking below its bullish trendline and 200-day MA last week. Incoming US data could decide which side of support it lands on by Friday’s close, and therefore whether AUD/USD can extend its trend or retrace lower.
Risk reversals remain supportive of the AUD/USD rally for now, with the rising lines showing that call demand is increasing relative to puts, even though puts remain dominant on an absolute basis. The one-week implied volatility band sits at 0.6996–0.7136, while the 71c handle also looks like a likely resistance level unless the US dollar index simply rolls over.
I have a hunch that inflation may not surprise much in either direction, which leaves the option, but not the obligation, of another Fed hike. That could allow AUD/USD to grind higher towards 0.7100–0.7136.
Silver is the market I keep coming back to in report 32/2026. Large speculators have moved to their most bullish positioning in more than two years, and the commercial side of the market is beginning to shift in the same direction. After the recent pullback in silver, that combination deserves more than a passing mention. It suggests that the bullish positioning story may not be finished.
The important point is not simply that one group has reached a two-year extreme. I want to see how the different parts of the report fit together. Here, the large-speculator reading gives the signal its scale, while the change among commercials adds weight to it. Taken together, they create a much stronger positioning backdrop than the large-speculator figure would provide on its own.
Silver’s positioning is starting to line upThere is a useful historical reference in the commercial data. In 2018, commercials moved net long and flagged the move before it happened. I am not treating the present setup as a repeat of 2018, because the current evidence does not justify that conclusion. What matters is the behaviour of the positioning: the commercial side is again moving into alignment while large speculators are already at a bullish extreme not seen for more than two years.
The latest report does not tell me that the pullback has ended. It does tell me that the bullish positioning story remains present in the COT data, with large speculators and commercials beginning to line up again.
This is why silver is clearly the dominant story of the week. The two-year large-speculator extreme is significant on its own, but the commercial shift is what makes me pay closer attention. The report is beginning to show agreement rather than a single isolated reading. That is the sort of development I would rather monitor as it forms than dismiss because the recent price action has been weaker.
I would still keep the conclusion measured. Positioning can strengthen a market view without removing uncertainty, and this report does not provide a timing signal. My reading is narrower: the recent pullback has not broken the bullish positioning story, and the data are starting to line up in a way that makes silver the market to watch in report 32/2026.
Japanese Yen: The biggest commercial shift in 52 weeksThe Japanese yen produced the largest single-week change in commercials’ net positions in the past 52 weeks. That is a substantial weekly adjustment, and it generates a bearish COT change signal pointing to near-term weakness. I read it primarily as a change signal: the size of the weekly move is what stands out, rather than a claim about a longer-term positioning extreme.
The practical message is therefore about the near term. Commercial positioning changed more sharply in one week than at any other point over the past year, and the direction of that change is bearish for the yen. The scale, direction and time frame of the move put the yen among this week’s more notable secondary markets.
Lumber turns constructive after a 2.5-week declineLumber also stands out, although for a different reason. Commercials recorded a 38% change in their net positions, and the resulting bullish signal is backed by the iCOT scores. This arrives after a two-and-a-half-week decline, so the improvement in positioning is appearing against a softer recent backdrop.
What interests me here is the confirmation. The commercial change and the iCOT readings point in the same bullish direction. After the recent decline, lumber is a market where the positioning has become more constructive and now deserves continued attention.
Brazilian real nears a bearish extremeOn the five-year chart, the Brazilian real is approaching bearish COT extreme levels. The positioning therefore continues to lean towards further weakness against the dollar. Because the market is approaching the extreme rather than being described as already at it, I see this as a developing signal and would watch whether the bearish positioning continues to build.
The conclusion remains straightforward: the COT picture is becoming increasingly bearish for the real, and the direction indicated by the data is further weakness versus the dollar.
Dollar Index weakness remains visibleThe Dollar Index continues to show signs of weakness, echoing the bearish extreme flagged on the True US Dollar Index last week. The present reading reinforces the direction of that earlier message without requiring the two observations to be identical. Weakness remains visible in the Dollar Index, while last week’s True US Dollar Index extreme provides the immediate positioning context.
The main takeaway from report 32/2026Silver is the clearest story in this week’s COT data because the strength of the large-speculator extreme is now being joined by a shift in commercial positioning. The 2018 reference makes that commercial behaviour particularly interesting, but the present case stands on the current data: more than two years of large-speculator positioning have been surpassed, commercials are beginning to move with them, and the bullish story remains intact despite the recent pullback.
I discuss all of these markets in this week’s video:
There is an unimaginable fortune floating between 150 and 400 million miles from Earth.
It’s an asteroid named Psyche.
Some people think we can solve global poverty by mining this space gold and other precious metals.
We can’t.
Scientists believe this 144-mile-long floating space rock contains large amounts of metal, including gold and platinum. They estimate the asteroid could contain $10 quintillion worth of precious metals.
I don't even know what the number means. To put it into perspective, it would be enough money to pay every person on Earth $1.22 billion.
That would certainly put a dent in global poverty, eh? As a bonus, we wouldn't have to hate billionaires anymore. We'd all be one!
Of course, the amount of gold on Psyche is purely speculation.
According to NASA, “The best analysis indicates that Psyche is likely made of a mixture of rock and metal, with metal composing 30 percent to 60 percent of its volume. The asteroid’s composition has been determined by radar observations and by the measurements of the asteroid’s thermal inertia (how quickly an object gains or re-radiates heat).”
Even without knowing Psyche’s exact composition, it’s fun to speculate about how much gold might be there.
Scientists estimate Psyche's mass is roughly 2.3 × 10¹⁹ kg. Let's say gold constitutes just 10 parts per million (purely speculative); that would amount to about 230 billion metric tonnes of gold. That's roughly a million times more than all the gold mined in human history.
A fool's errandEvery so often, people talk about mining Psyche and similar asteroids. It sounds like a great plan. I mean, if there’s that much gold and other precious metals in the asteroid, it certainly seems like something worth looking into, right?
Or maybe not.
From a practical standpoint, we're capable of reaching the asteroid. In fact, NASA launched a mission to Psyche in 2023. The unmanned craft is expected to reach Psyche in 2029.
We also have the ability to dig for gold in space.
However, from an economic standpoint, trying to pull gold out of a space rock is a fool’s errand.
That hasn’t stopped people from trying.
In 2010, Planetary Resources and Deep Space Industries combined forces to mine asteroids. They secured some high-profile financing from the likes of Google’s Larry Page and Eric Schmidt.
It wasn’t enough.
Within a decade, the companies had been absorbed by other organizations that had nothing to do with asteroid mining.
As Lachlan Brown, writing for Space Daily, put it, it wasn’t that the precious metals weren’t there.
“[The lesson] was that the timelines are long, the capital required is vast, and investors ran out of patience long before anyone reached an asteroid.”
That isn’t stopping TransAstra Corporation from pursuing intergalactic mining. However, CEO Joel Sercel told CNBC the mining of precious metals on asteroids simply isn’t economically viable.
“If we had to develop a full-scale asteroid mining vehicle today, we would need a few hundred million dollars to do that using commercial processes. It would be difficult to convince the investment community that that’s the right thing to do. In today’s economics and in the economics of the near future, the next few years, it makes no sense to go after precious metals in asteroids. And the reason is the cost of getting to and from the asteroids is so high that it vastly outstrips the value of anything that you’d harness from the asteroids.”
The company will focus on mining water from asteroids to make rocket propellant in space. This would allow rockets to refuel en route and allow rockets to launch from Earth carrying much less heavy fuel.
Of course, technology is advancing daily. Gold mining in space isn’t out of the question in the future.
So, can we count on a future with an unlimited supply of gold and riches for all?
Even if we could, I’ve got bad news.
All of that gold wouldn’t be worth much.
One of the things that makes gold valuable is its scarcity. If somebody drug thousand of tonnes of gold back to Earth, it would be worth about as much as a bag of mulch – if that.
Brown explained why reading basing a business plan on “$10 quintillion” in gold on a space rock is a fool’s errand.
“The first is that the number assumes you could deliver all that metal to Earth at no cost, when the delivery is the entire problem. The second is more fundamental: if you actually did land that much platinum or gold, you would flood the market and collapse the price of the thing you came to sell. The markets for precious metals are small by weight, and they do not have room to absorb asteroid-scale quantities without the value evaporating.”
So, the next time somebody tells you we’re going to eliminate poverty one day by giving everybody on Earth a bunch of space gold, you can explain to them why they’re living in a fantasy world.
As Brown summed it up, “The case for asteroid mining is real, but almost nothing like the version that gets sold.”
