The AUD/JPY cross trades in negative territory around 111.15 during the early European trading hours on Thursday. A coordinated currency intervention by the United States (US) and Japan provides some support to the Japanese Yen (JPY) against the Australian Dollar (AUD).
Traders remain on high alert for further intervention from Japanese authorities. Japan's Finance Minister Satsuki Katayama said earlier this week that officials will not hesitate to take further action on currency.
Bank of Japan (BoJ) Minutes on Wednesday showed that policymakers debated mounting price risks that likely required more rate hikes even as they raised borrowing costs to a 31-year high in the June policy meeting.
Australia posted a surprise trade surplus in June as commodity exports gained, the Australian Bureau of Statistics revealed on Thursday. Exports rose by 9.6% MoM in June from a fall of 7.6% seen a month earlier (revised from 6.9%). Meanwhile, Imports decreased by 0.2% MoM in June, compared to an increase of 0.9% seen in May (revised from 2.6%).
Fx market braces for further Japan intervention as Dollar strategy evolvesSociete Generale strategists caution that, in the context of recent US-Japan coordination on the Yen, history offers a clear warning: “a single round of intervention is unlikely to be sufficient to turn the trend around, and the FX market is on high alert for the next move.” This underscores their view that the latest action is best seen as one step in a broader, ongoing strategy rather than a definitive turning point for JPY.
Technical Analysis: AUD/JPY maintains a bearish tone on the daily chartIn the daily chart, AUD/JPY keeps a bearish near-term bias as the pair holds beneath the 100-day simple moving average (SMA) and the Bollinger middle band. The Relative Strength Index (14) at 38.81 remains below the neutral 50 line, suggesting subdued but not oversold momentum after the recent slide.
On the topside, initial resistance emerges at the 100-day SMA around 112.80, followed closely by the Bollinger middle band at 112.90, forming a tight cap that would need to be reclaimed to ease downside pressure. Any follow-throght above this level could pave the way to the July 27 high of 114.67, en route to the upper Bollinger band higher up near 115.65 as a more distant barrier.
On the downside, the lower Bollinger band at 110.15 offers the next notable support. A decisive break beneath this floor could expose the 100.00 psychological level, followed by the August 3 low of 109.24.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
TL;DR: Gold’s rebound has technical and macro confirmation behind it, but whether it extends toward 4,500 depends on three interlinked markets — Brent crude, US Treasury yields, and Fed rate expectations — all still hinging on whether Strait of Hormuz negotiations produce a durable breakthrough.
A Rally That Looks More Convincing Than a Routine Bounce Gold’s rebound has evolved into something more convincing than a routine recovery from oversold conditions. The metal has broken back above its 55-day EMA, the daily MACD has developed bullish divergence, and — perhaps most importantly — markets have rapidly priced out the likelihood of a September Federal Reserve rate hike. Those developments have materially strengthened the case that Gold is attempting a medium-term trend reversal rather than simply retracing part of its decline from the record high.
Yet declaring victory now would be premature. The macro backdrop driving the rally still hinges on one unresolved question: whether optimism surrounding the reopening of the Strait of Hormuz develops into a durable geopolitical breakthrough. Until that question is answered, Gold, Brent crude, and US Treasury yields are likely to remain tightly linked, with all three acting as real-time gauges of market confidence in the same underlying narrative.
The Fed Story Has Already Changed The immediate catalyst behind Gold’s latest advance has been a sharp shift in interest-rate expectations rather than a sudden surge in safe-haven demand.
Over the past several sessions, investors have increasingly concluded that easing tensions around the Strait of Hormuz could significantly reduce the risk of another energy-driven inflation shock. As Brent crude retreated from above $100 toward the high-$70s, markets rapidly repriced the Fed outlook. The probability of rates remaining unchanged in September has risen sharply, Treasury yields have rolled over from recent highs, and the Dollar has weakened accordingly — together creating a much more supportive environment for non-yielding assets like Gold.
Technically, the improvement is becoming difficult to ignore. Breaking back above the 55-day EMA after forming bullish divergence on the daily MACD suggests downside momentum has been exhausted. Unlike previous rebounds during the decline from the record high, this rally is now receiving confirmation from both technical indicators and a meaningful improvement in the macro backdrop.
Markets Still Aren’t Fully Buying the Hormuz Story Yet markets are stopping short of fully embracing the optimistic scenario. Headlines continue to suggest negotiations are making progress — Iranian officials confirmed that Tehran and Oman have agreed on the geographical coordinates of a proposed safe shipping route, and reports have indicated negotiations are advancing, with some regional officials suggesting an agreement could come within days.
But the details remain far less reassuring than the headlines imply. Iran continues to describe the discussions as arrangements with Oman rather than direct negotiations with Washington. Reuters reported important issues remain unresolved despite President Donald Trump’s repeated suggestions a deal is close, while CNN quoted Gulf officials assigning only a 50-50 probability that an agreement can be reached by Friday. More importantly, Iran’s Islamic Revolutionary Guard Corps — the organization ultimately responsible for enforcing any agreement — has yet to publicly endorse the proposal.
Just as important is what happens after any agreement is signed. Whether the arrangement proves durable or merely another temporary pause remains an unanswered question, and that uncertainty continues to prevent markets from fully removing the geopolitical risk premium.
Why Brent and Treasury Yields Hold the Key That uncertainty is visible not only in Gold, but also in Brent crude and the US Treasury market.
Brent’s decline has already stalled after reaching the 61.8% projection of 102.00 to 80.67 from 91.36, at 78.18, suggesting sellers are becoming more cautious. A decisive break below that level would indicate traders are increasingly convinced a Hormuz agreement is both imminent and sustainable, opening the way toward the 100% projection at 70.03, close to the 70.14 low.
Conversely, a breakdown in talks and a return to conflict could bring a strong rebound in Brent. A decisive break of the 55 4H EMA, now at 84.48, would argue the fall from 102.00 has completed as a correction, setting up another strong rally back toward 102.00.
Treasury yields tell a similar story. The US 10-year yield has begun showing bearish divergence on the 4H MACD after topping around 4.75%. A firm break below 4.60%, together with the 55 4H EMA, would confirm markets are becoming increasingly comfortable with the view that lower energy prices will keep the Fed on hold.
Failure to break that support, however, would indicate investors remain unconvinced inflation risks have truly subsided — a strong rebound from 4.60% would keep the near-term rally intact for another rise through 4.75%.
ActionForex’s Technical View on Gold Gold itself has reached an important technical crossroads. The rally is now close to the 38.2% retracement of 4,889.24 to 3,942.23, at 4,303.98, while the four-hour RSI is already in overbought territory. That combination argues for some consolidation, or even a modest pullback, rather than an immediate continuation higher.
The broader picture, however, has improved substantially. If a credible and durable Hormuz agreement emerges, Brent breaking below 78 and the 10-year Treasury yield falling through 4.60% would provide the macro confirmation Gold bulls have been waiting for. In that environment, the current recovery would likely extend beyond 4,300 toward the medium-term trendline resistance near 4,500, strengthening the case that a genuine trend reversal is underway.
On the other hand, if negotiations falter and geopolitical tensions re-escalate, the recent improvement in Fed expectations could quickly unwind. A break back below 4,166.08, now acting as support, would suggest the latest rally was merely another corrective rebound within the broader downtrend from 4,889.24.
For now, Gold’s technicals are sending an increasingly bullish message — but the final verdict still rests with oil, Treasury yields, and the next chapter of the Hormuz negotiations.
Key Takeaways Gold’s rally has both technical confirmation (55-day EMA reclaim, bullish MACD divergence) and macro support (fading September Fed hike odds), distinguishing it from prior failed rebounds. Gulf officials assign only a 50-50 probability of a Hormuz agreement by Friday, and Iran’s Revolutionary Guard Corps has yet to endorse any proposal, keeping a geopolitical risk premium intact. Brent’s decline has stalled at 78.18; a break below opens 70.03, while a break of 84.48 resistance would instead point to a rebound back toward 102.00. The 10-year Treasury yield breaking below 4.60% would confirm markets are comfortable with a Fed on hold; failure to break it risks a rebound toward 4.75%. A durable Hormuz deal with Brent below 78 and yields below 4.60% could extend Gold’s rally toward 4,500; a break below 4,166.08 would instead signal the rally was only corrective.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
Lower-than-expected ADP Employment leads the Dollar Index to slip. Watch crucial support near 99.50, which needs to hold to keep the upside view intact. The index could be volatile this week with the US jobless claims data release today and NFP tomorrow. Euro can attempt to test 1.16 while USDJPY can take a breather and remain stable. EURJPY can rise towards 184 while Aussie and Pound can see a near-term rise towards 0.71 and 1.35 before pausing for a reversal. USDCNY holds below 6.75 and could slowly head towards 6.70 while USDINR needs to decisively break below 95 to open a downside target of 94.75/50 else can see bounce from current levels towards 95.25/50 again.
The US Treasury Yields are managing to hold above their key support. A strong bounce is needed from here to avoid an extended fall and also to resume the uptrend from here itself. We will have to wait and watch. The German Yields are hovering above their support. We expect them to bounce back from here and resume their uptrend. The 10Yr GoI has declined below its key support. A further fall from here will confirm the resumption of the broader downtrend and drag it lower. The RBI kept their policy rates unchanged at 5.25% in its meeting yesterday.
Dow can extend its rally towards 55000-55500, while DAX remains bullish above 26000 with scope to rise towards 27000-27500. Nifty continues to hold above the key 24500 support and can advance towards 24800-25000. Nikkei has resumed its upward momentum and can rise further towards 67000-68000. Shanghai is approaching the key 3900 resistance, with a sustained break opening the way towards 4000-4050.
Brent and WTI remain vulnerable to further declines towards $75-$70 and $70-$65 respectively. Gold has turned bullish after breaking above its previous range and can rise further towards $4500. Silver has also strengthened and can extend its gains towards $65-$70. Copper remains constructive and needs a sustained break above $6.80 to continue its rally towards $6.85-$6.90; otherwise, a pullback towards $6.60-$6.50 is possible. Natural Gas remains weak and can decline towards $2.65 in the near term.
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Gold is extending the previous big breakout, briefly testing the $4,300 level for the first time in seven weeks in the Asian session on Thursday.
Gold cheers Strait of Hormuz reopening hopesNothing seems to have changed fundamentally for Gold since a day ago, as hopes for the reopening of the Strait of Hormuz are coming to life after Iran said on Wednesday that it is close to finalizing a proposed framework for commercial shipping through the Strait with Omar, per The Guardian.
The optimism around the reopening of the vital waterway in the Gulf eases supply disruption concerns and keeps Oil prices mired in three-week lows.
Weakening Oil prices alleviate inflation worries, prompting markets to scale back their bets on a US Federal Reserve (Fed) interest rate hike in September.
Markets are pricing in a roughly 55% chance that the Fed will raise rates in September, down from about 60% a day ago, according to the CME Group’s FedWatch Tool.
That’s exactly what is weighing on the US Dollar (USD), while boosting non-yielding assets such as Gold.
Earlier on, Fed's Daly delivered a moderately cautious message, with a FXS Speechtracker score of 5.4/10, slightly softer relative to the historical average of 5.6/10. Daly highlighted that tariffs had a clear impact on inflation but now show signs of fading, while technology investment is currently adding upward pressure, and supply shocks are seen as largely temporary with longer-run inflation expectations still well anchored but not to be taken for granted. The tone leans toward balanced risk management, supportive of holding rates steady while emphasizing data dependence and the evolving mix of supply-side forces.
The FXS Fed Sentiment Index fell by 2.23 points to 138.69, signaling a modest pullback in perceived hawkishness following the speech. Despite the decline, the index remains firmly in hawkish territory above 100, indicating that markets still see the Fed as biased toward tighter policy even as the tone cools slightly compared to recent communications.
Further, disappointing US ADP jobs and headline ISM Services PMI data continue to undermine the USD and Fed rate hike odds, keeping Gold price upside going strong.
The ADP said on Wednesday that US private sector employment increased by 44,000 jobs in July, against a growth of 70,000 jobs expected. Meanwhile, the ISM Services PMI came in at 54.1 in July, but missed the forecast of 54.5.
Looking ahead, all eyes will remain on the Middle East developments, especially after Israel launched attacks in southern Lebanon after accusing Hezbollah of violating the ceasefire.
The Mideast situation remains fragile also after Yemen’s Iran-aligned Houthi rebels said they targeted a Saudi oil tanker in the Red Sea as part of their naval blockade of Saudi Arabia.
If the Gulf conflict re-escalates, hampering the Strait of Hormuz reopening deal, Gold could see a steep correction toward the $4,150 demand area.
However, the daily technical setup suggests that more upside remains in the offing, as traders brace for Friday’s US Nonfarm Payrolls (NFP) release.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,274.80. The metal holds a bullish near-term bias as it trades above the 21-day and 50-day simple moving averages (SMAs) at $4,078.38 and $4,157.48, while the 100-day SMA at $4,393.96 and the 200-day SMA at $4,493.07 still loom overhead as medium-term caps. The Relative Strength Index (14) at 61.94 shows firm positive momentum, hinting that buyers retain control though conditions are edging toward overbought territory.
On the topside, initial resistance is located at the 100-day SMA near $4,394, followed by the 200-day SMA around $4,493, where a break would open the way for a stronger extension of the bullish trend. On the downside, immediate support is seen at the recent price pivot around $4,275, ahead of the 50-day SMA at $4,157 and the 21-day SMA near $4,078; a deeper slide could revisit the rising trend-line support drawn from $3,951, where buyers would be expected to re-emerge.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold positioning shifts as TD Securities flags renewed macro supportAccording to TD Securities, "macro headwinds being pushed out on the horizon, along with US-Iran deal hope, have put some major wind in the precious metals sails." Strategists at the bank note that, when "decomposing managed money gold positions," macro discretionary funds "have more than doubled their positions since June," acting as consistent dip buyers and "protecting the $4000/oz level." TD Securities adds that "the momentum generated from these cohorts' renewed appetite is now forcing CTAs to turn heavy buyers, exaggerating the move to the upside," as systematic accounts are drawn into the rally by the improving trend in positioning.
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.
The Euro (EUR) trades broadly firm at around 1.1555 against the US Dollar (USD) during the Asian trading session on Thursday. The major currency pair reflects strength as the US Dollar is broadly under pressure due to deteriorating United States (US) employment conditions.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, holds onto two-day losses at around 99.65.
On Wednesday, the ADP reported the fresh addition of 44K payrolls in the private sector in July, lower than estimates of 70K and the prior release of 98K.
For more cues regarding the US labor market, investors await the Nonfarm Payrolls (NFP) data for July, which will be released on Friday.
According to TD Securities, July’s jobs report is expected to show only a slight improvement after June’s downside surprise. The bank’s economists look for "July NFP [to have] picked up modestly to 70k after surprising to the downside with 57k in June," and judge that "risks to our payrolls forecast appear balanced." They also anticipate that the unemployment rate will show little change, with "the UE rate likely [having] went sideways at 4.2% after declining in June," reinforcing their view of a broadly stable labor market backdrop.
On the Euro front, investors await the Eurozone Retail Sales data for June, which will be published at 09:00 GMT.
EUR/USD technical analysis
EUR/USD holds onto week-long recovery at around 1.1554. The pair strives a decisive break above the downward resistance trend line’s break level at 1.1538, turning it into an immediate pivot and reinforcing a constructive bias while it holds over this reclaimed barrier. Price also stands above the 20-period exponential moving average (EMA) at 1.1472, suggesting dip-buying interest dominates as the Relative Strength Index (RSI) at 64 stays in bullish territory but shy of overbought conditions.
On the downside, initial support is seen at the former trend-line break near 1.1538, with deeper demand expected around the 20-period EMA at 1.1472 if a pullback extends. The pair could return to the July low at 1.1353 if it fails to hold the 20-day EMA.
Looking up, the pair needs to stabilize above the downward-sloping trendline to extend the advance towards 1.1600, followed by the May 29 high at 1.1686.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator ADP Employment Change The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.
Last release: Wed Aug 05, 2026 12:15
Frequency: Monthly
Actual: 44K
Consensus: 70K
Previous: 98K
Source: ADP Research Institute
Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.
Gold started a fresh increase above the $4,200 region. It surpassed a major contracting triangle with resistance at $4,090 on the 4-hour chart. WTI Crude Oil started a fresh decline and traded below $80.00. Bitcoin gained bullish momentum for a move above $64,200. Gold Price Technical Analysis Gold found bids near $4,020 and $4,050 against the US Dollar. The price started a decent increase after there was a close above $4,100.
The 4-hour chart of XAU/USD indicates that the price surpassed a major contracting triangle with resistance at $4,090. There was a close above $4,150, the 100 Simple Moving Average (red, 4 hours), and the 200 Simple Moving Average (green, 4 hours).
The price traded as high as $4,304 and is currently consolidating gains. On the upside, immediate resistance could be $4,300. The next major resistance might be $4,350.
A clear move above $4,350 could open the doors for more upside. In the stated case, the bulls could aim for a move toward $4,420 or even $4,450. Any more gains might send the price toward the $4,500 level.
If there is a downside correction, the price could revisit the $4,230 support or the 23.6% Fib retracement level of the upward move from the $3,995 swing low to the $4,304 high. The first major support sits at $4,185.
The next support could be $4,150, below which the price might slide to $4,110. The main support sits at $4,065. Any more losses might call for a test of $4,020 or even $4,000 in the coming days.
Looking at WTI Crude Oil, the bears are back, and they could aim for a move below the $75.00 support zone in the near term.
Economic Releases to Watch Today
US Initial Jobless Claims – Forecast 202K, versus 197K previous. US Wholesale Inventories for June 2026 (preliminary) – Forecast +0.3%, versus +0.3% previous.
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Silver price (XAG/USD) remains stronger for the fourth consecutive day, trading around $62.20 per troy ounce during the Asian hours on Thursday. The price of the non-yielding Silver gains momentum as news of a deal to partially reopen the Strait of Hormuz pushed oil prices lower, significantly easing broader market concerns surrounding inflation and the outlook for interest rates.
The shift comes as Iran and Oman reached an agreement on a temporary shipping route through the strategic waterway, boosting global expectations for increased Middle Eastern energy flows. A joint statement from both nations is currently in its final drafting stages. While the proposed route is slated to operate for two to four months, Tehran made it clear that this arrangement does not represent a complete reopening of the strait.
Oil timespreads underscore speculative pressure rather than weaker fundamentalsAccording to TD Securities, the current structure of the oil market suggests that recent price moves are being driven more by positioning than by any material shift in underlying supply-demand dynamics. Strategists there highlight that “this time around, timespreads remain much stronger, which is the clearest signal that spec flows chasing headlines are doing the heavy lifting as opposed to any loosening of the fundamentals.” In their view, the resilience of timespreads reinforces the message from physical flows that the crude market remains fundamentally tight, even as headline risk and speculative activity exert outsized influence on day-to-day price action.
Meanwhile, economic data in the US added to the market dynamics. ADP figures released on Wednesday revealed that US private-sector employment grew by just 44,000 jobs in July, a sharp deceleration from the 98,000 added in June that fell well short of the 70,000-market consensus. With labor market cooling in focus, traders are now closely watching Thursday’s US Initial Jobless Claims and Friday’s Nonfarm Payrolls (NFP) report.
Fed’s Cook flags inflation risks but keeps rate hike option conditionalFed’s Cook speech scores 7.2/10 on the FXS Speechtracker, modestly above the 6.5/10 historical average, signaling a slightly more forceful tone relative to the established baseline. The remarks balance recognition of a sturdy job market and resilient expansion with a clear emphasis that inflation threats surpass job market concerns, underscoring a firm commitment to restoring price stability while keeping rate hikes conditional on the disinflation trend failing to reappear. Overall, the message leans hawkish on inflation risks but stops short of pre-committing to imminent tightening, which is supportive for the Dollar and broadly cautious for risk-sensitive assets.
The FXS Fed Sentiment Index fell by 1.93 points to 140.92, indicating a modest pullback in perceived hawkishness following the speech. Despite the decline, the index remains well above the neutral 100 threshold, showing that Fed communication is still firmly in hawkish territory even as the immediate tightening impulse eases slightly according to the FXS Fed Sentiment Index and FXS Speechtracker.
Technical Analysis: XAG/USD gains amid prevailing bullish biasXAG/USD trades around $62.20. is holding a near-term bullish bias as it advances above the nine-day Exponential Moving Average (EMA) at $59.76 while still trading below the 50-day EMA at $62.69, which caps the topside for now. The 14-day Relative Strength Index (RSI) at 56.81 leans constructive, suggesting firm positive momentum, while the FXS Fed Sentiment Index at 140.92 hints that broader macro sentiment remains supportive rather than euphoric.
On the topside, immediate resistance is defined by the 50-day EMA at $62.69; a clear daily close above this barrier would open the door toward the next structural hurdles at $90.03 and $96.62, though these latter levels remain distant in the current trading context. On the downside, initial support is seen at the nine-day EMA at $59.76, ahead of the horizontal floor at $55.63.
XAG/USD: Daily Chart(The technical analysis of this story was written with the help of an AI tool. Know more.)
The People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead on Thursday at 6.7895 compared to the previous day's fix of 6.7889 and 6.7462 Reuters estimate.
PBOC FAQs The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
EUR/USD breaks long-running downtrend resistance Fed rate hike pricing pares back to 42bp by June 2027 Lower energy prices improve euro area outlook Payrolls, peace negotiations to determine whether breakout has legs EUR/USD has broken higher after spending much of this year trapped beneath downtrend resistance. Whether it sinks or swims will likely be determined by the incoming flow of US economic data and developments in the Gulf.
The stars align... for now One of the key factors that's changed over the past week has been the US rate outlook. While the latest US data has generally continued to point to an economy that's holding up well, markets have become a little less convinced about how much further the Federal Reserve will need to tighten.
Both the ISM manufacturing and services PMIs outperformed expectations, while strength in the new orders components of both surveys points to the US economy continuing to chug along into the second half of the year.
Despite that, markets have pared back the amount of tightening priced by the June Fed meeting next year to around 42 basis points. Correlation analysis suggests EUR/USD has been tracking shifts in front-end US rates closely over the past week, helping to explain some of the move higher.
Source: TradingView
The other factor that's worked in the euro's favour has been the optimism that we'll eventually see some form of lasting peace deal in the Middle East. Whether that eventuates remains highly uncertain, but markets have responded by pushing energy prices lower once again.
That's important because Europe is a major net energy importer. Compared with the United States, which enjoys far greater energy security as the world's largest producer, lower oil and gas prices are a much bigger positive for the euro area economy. They reduce one of the key headwinds that has weighed on the common currency in recent months, easing the need for the ECB to respond aggressively to a supply-driven inflation shock that would otherwise have amplified the downside risks to economic activity.
Another factor that's probably helped the euro has been the intervention episode in Japan. It's highly unusual to see the US Treasury get involved in supporting another currency when we're not talking about a financial crisis or disorderly market conditions.
Why the US decided to get involved remains unclear. Whether it was about the yen, foreign demand for Treasuries, US FX competitiveness, or something else entirely, we simply don't know. What we do know is that it's put the US dollar on the back foot, providing a near-term tailwind for EUR/USD.
Clearly, the positives that have helped the euro not only come across as being very short-term factors, but there's also a lot of uncertainty as to whether they'll stick.
From a directional perspective for the euro, a lot of it will come down to the Gulf and Friday's US payrolls report, which really looms as the key factor given its ability to shift the Fed rate outlook.
EUR/USD breakout shifts focus higher
Source: TradingView
Turning to the charts, we saw a breakout from the minor downtrend that had been in place from the highs set back in the middle of July following last week's Fed meeting. That has since seen the pair extend the move, breaking above resistance at 1.1480 and the 50-day moving average to test the long-running downtrend that's been in place since late January.
After one false break on Monday that saw the pair retrace to the 23.6% Fibonacci retracement of the January to June bear move, we're now seeing a bounce and a close above that downtrend, creating the potential for a run higher.
1.1550 is an important level in the near term, marking where the pair stalled on Monday. If we manage to hold above that level, it opens the door to a test of the 100-day moving average. It has a much more chequered history in terms of influencing price action than the 50- and 200-day moving averages, but a push beyond it would put the 38.2% Fibonacci retracement of the January to June bear move, and more importantly, the 200-day moving average, into focus.
A break above the latter would be significant given the way price has interacted with it in the past, creating the potential for a much larger bullish move.
Of course, if the pair fails to build on the breakout and retraces back beneath the trendline, it would add to the sense that bears remain in the ascendency. That would bring the 23.6% Fibonacci retracement of the January to June bear move, along with the confluence of former resistance at 1.1480 and the 50-day moving average, back into play. A break beneath that zone would point to a much larger unwind towards the July lows.
The oscillators favour the breakout sticking. RSI (14) continues to set higher lows and higher highs while moving further away from the neutral 50 level, but is not yet overbought. That message is confirmed by MACD, which has flipped positive and continues to diverge further away from the signal line, building upside momentum. It's not a screaming buy signal by any stretch, but it does favour buying dips and bullish breakouts rather than trying to play it from the short side in the near term.
Gold price (XAU/USD) rises to near $4,255 during the early Asian session on Thursday. The precious metal extends the rally, marking its biggest daily jump since February, as optimism over a potential deal to reopen the Strait of Hormuz eases energy-driven inflation fears and reduces the odds of the Federal Reserve (Fed) raising interest rates.
Iran’s Foreign Ministry spokesperson Esmaeil Baghaei said on Wednesday that a deal with Oman on a route through the Strait of Hormuz is being “finalised”, but the US and Israel still pose a danger to ships in the vital waterway.
Meanwhile, US President Donald Trump claimed a deal could be reached on Wednesday, with continued diplomatic efforts potentially paving the way for US-Iran talks to resume. US Secretary of State Marco Rubio and Treasury Secretary Scott Bessent, both of whom said progress had been made in those talks.
Reports of a potential interim agreement to clear and reopen the critical water could ease inflation fears and reduce expectations for aggressive Fed interest rate hikes. This, in turn, could boost the yellow metal in the near term.
Traders will closely monitor the release of the US July employment report, which is due later on Friday. This report could offer some hints about the health of the labour market and US interest rate path. Economists expect Nonfarm Payrolls (NFP) to rise by 80,000 in July, while the Unemployment Rate is projected to remain steady at 4.2% during the same period. In case of stronger-than-expected outcomes, this could lift the Greenback and weigh on the USD-denominated commodity price.
Gold underpinned as easing oil prices pull US yields lowerAnalysts at Commerzbank highlight that the latest leg of support for Gold came as “US Treasury yields fell across the curve as lower oil prices eased inflation concerns,” helping to reinforce the metal’s recovery alongside the broader risk-on tone.
Technical Analysis: Gold remains capped below the key 100-day SMA in daily chartIn the daily chart, XAU/USD has pushed back above the 20-day simple moving average (SMA) component of the Bollinger Bands, shifting the near-term tone to neutral with a slight bullish tilt, yet broader gains remain capped while price holds beneath the 100-day SMA resistance. The Bollinger upper band now aligns as immediate support after being reclaimed, while the Relative Strength Index (14) at 60.95 shows firm but not overextended upside momentum, hinting that buyers still have some room before facing overbought conditions.
On the topside, a sustained break above the 100-day SMA around $4,400 would be needed to expose higher bullish targets and signal a clearer continuation of the up-leg. On the downside, initial support is now seen around the recently reclaimed Bollinger upper band near $4,185, followed by the Bollinger middle band / 20-day SMA region around $4,070; a loss of this area would likely invite a deeper retreat toward the lower Bollinger band support near $3,950.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Spot gold weekly chart shows larger trend structure. Source: TradingView Next Resistance Levels Come Into View Initial upside target zone is near trend structure at $4,382 and the 100-day moving average, which is now at $4,398 and falling. That zone is followed by the more significant 200-day moving average near $4,493. Technically, the long-term outlook improves if gold gets above and stays above that long-term trend indicator.
A Narrowing Range Sets the Stage As recent consolidation evolved, the price range continued to narrow, setting the stage for a sharp breakout as demand builds. Also, the low for Wednesday at $4,065 was a clear test of support prior to the acceleration in momentum. That makes Wednesday only the second day since April where the full range of the session was above that average. This is bullish behavior that is not uncommon prior to a strong breakout.
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Japanese Yen, USD/JPY Talking Points: It’s rare to see a Treasury Secretary so vocal about a currency value, but it’s become obvious that Scott Bessent does not want USD/JPY to rise significantly, and there’s likely multiple reasons behind that. While one person’s opinion may not be enough to reverse the interest rate dynamics in two of the world’s largest economies, it could produce a challenge for near-term price action, as a theoretical cap to price could create a compelling reason for longs to bail on positions, particularly if US data worsens in the weeks ahead. In this article, I want to draw attention to a similar situation in Q4 of 2022, when BoJ intervention stalled a rally for about a month, until US data started to dim and that drove longs to quickly close positions, resulting in a 50% retracement of the prior trend.
Merely for a point of reference, it’s uncomfortable how much of the crowd seems to remain bullish in USD/JPY. This is anecdotal, of course, and observational so somewhat subjective, but putting all the pieces together seem to make the risk-reward potential in USD/JPY look askew to the upside.
At this point we’ve had loud proclamations from both the US side and the Japanese side on the matter, as both economies do not want to see USD/JPY appreciation. And while markets have often run against Japanese intervention, given the multiple episodes that we’ve seen particularly over the past five years, the history of coordinated intervention from both economies is far more sparse but significantly clearer.
I think it’s rather obvious why both the US and Japan would prefer if USD/JPY does not appreciate to another fresh 40-year high. For Japan, this invites inflationary potential and for the US, this would entail a stronger US Dollar which would be a hindrance for trade and capital flows given that the Yen is a 13.6% component of the DXY basket. I think, ideally, both economies would like to see a bit of stability in the exchange rate but that’s not something that market participants always welcome.
For this article, I wanted to draw a parallel to Q4 of 2022, when a similar scenario had set up before us. At that point, the US had just posed a series of blistering rate hikes while Japan rates stayed flat, thereby setting up the divergence that remains in place today. But, as we often look at in webinars, fundamentals aren’t a perfect push point for price as the only thing that actually impacts price action is buying and selling. And when a trade is increasingly crowded and even the slightest hint or whiff of change is on the horizon, prices can reverse quickly – even against the fundamental bias that should otherwise drive the market.
But when the BoJ intervened in October of 2022, it was to defend the 150.00 level in the USD/JPY pair. The actual high printed at 151.95 and it was a worrying scenario, as the Yen was in meltdown mode. The BoJ stepped in and the intervention stalled the rally, and, initially, drove a counter-trend move that stopped out several longs along the way.
Buyers were somewhat undeterred though as support simply played from the 145.00 handle and price bounced back-up, albeit in a more tepid fashion than it had broken out in the prior weeks.
But – the simple fact that the BoJ had theoretically capped the upside for the pair was enough to keep the market in a state of limbo for long enough until change could show on the horizon.
That change showed on the morning of November 10th, 2022, with a below-expected CPI report. To be clear – the prints were still massive, with Core CPI coming in at 6.3% and headline CPI at a whopping 7.1%. But – both data prints were below the expectation and reduction from the prior month’s prints.
Hurriedly, markets factored in this new information and longs that had held on through the initial intervention-fueled pullback bailed on the trade, leading to the start of a dizzying reversal that lasted for the next two months and drove the pair lower by almost 2,000 pips.
USD/JPY Daily Chart – September 2022 - 2023 Chart prepared by James Stanley; data derived from Tradingview Relevance to Current Day in USD/JPY At this point a similar dynamic exists as we had back in 2022, where there’s expectation for more US rate hikes while Japan sits at inflation levels below 2%. And we just saw a very loud and showy appearance from Scott Bessent regarding intervention.
Like I said in the weekend video, intervening with price around or below 155.00 makes little sense, but as price perks up that desire to tilt the flow of the market can similarly increase and that can provide that theoretical cap that I referred to earlier. Will policymakers stand by to allow USD/JPY to float back above 160 again? And even if they do tip-toe back above that line-in-the-sand, will markets be able to re-challenge that 164.00 level?
Regardless of the answer, the question must be considered when factoring in topside targets for the pair and at this point it seems aggressive to look for targets significantly above either of those levels, which can cap the projected upside on the long side of the pair.
And on the other hand, right now markets are holding on to a firm belief that the Fed will hike rates later this year. It’s still too early to say that they won’t as a flare in inflation will probably require that they do. But, going off of last week’s rate decision, it really seems as though Kevin Warsh wants to sound like an inflation hawk without actually being an inflation hawk. This, if course, would be an evolution in the Fed’s messaging which has for years used comments around rate policy to push around market trends.
This can leave USD/JPY in a vulnerable spot, where upside for longs has a cap, of some sort, while a worsening of data brings on even larger downside risk.
But, that’s not the market participant to consider, in my opinion. The one to keep in mind is the one that’s often most driven by those interest rate disparities, and that’s the actual carry traders that are borrowing in Japan while rates are extremely low and then investing elsewhere where rates are much higher. This can be considered as a form of arbitrage but it’s not truly risk free, even if investing in government bonds, and the reason is that loans in Japan are taken in Yen, and if the Japanese Yen depreciates, it can whittle away any potential profit in the spread and then some.
And these aren’t the type of market participants to just summarily dismiss something as clearly identifiable as currency risk. So, they’ll hedge that risk by selling JPY in the marketplace and buying another currency, like USD. This further adds pressure to the upside in USD/JPY spot rates and this is another reason things like overbought matter little when those rallies are running.
But this can work both ways, right? Because if a hedge fund has a trade on to offset that currency risk – and it’s clear that the move has largely topped-out as you have both economies literally telling you that they want prices to move down, well, it makes little sense to remain in that hedge for much longer, and that’s when the currency risk from the initial carry trade isn’t such a daunting prospect. And, potentially, some profit can be pocketed by closing the hedge at a gain and merely re-buying it later, down the road, to offset that currency risk again when the Japanese Yen isn’t so cheap.
This is one reason why USD/JPY bounced back so quickly in January of 2023, or December of 2023. Or, even in September of 2024 with the pair bottoming literally two days before the Federal Reserve cut rates by 50 basis points. The pair then went on to rally by 1800 pips over the next four months and, again, this is through an FOMC rate cut cycle. But – the fundamental divergence remained and there was a reason for carry traders to hedge that currency risk again.
USD/JPY Daily Chart - 2024 Chart prepared by James Stanley; data derived from Tradingview USD/JPY Current Day At this point bulls aren’t entirely out of the matter yet and the current weekly bar, at just the half-way point of the week, is actually somewhat bullish given the reaction that we’ve seen above the 155.00 support zone. But – this matter is far from over and we’re now in a spot where US data is perhaps even more important, as a dimming in US data will likely entail a reduction in rate hike odds out of the US, and that, combined with a theoretical cap to upside in the pair can create a compelling reason for carry traders to release their hedges.
For now, we have resistance at a familiar spot – the same that topped the USD/JPY market after that 2024 rally. It’s difficult to get too bullish above 160.00, at this point, at least in my opinion, and that could cap the theoretical upside to the trade. While support can still remain attractive, at least for now, diminishing upside is something that, eventually, can lead to reversal scenarios as longs cut positions, particularly if US data softens to the point that rate hike probabilities get priced-down.
At this point, the four hour chart isn’t quite in a bearish spot and there’s actually a bullish formation in-place now with an ascending triangle. But if or when this starts to change, the contrarian view can grow in attraction.
USD/JPY Four-Hour Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
Scotiabank strategists Shaun Osborne and Eric Theoret note the British Pound (GBP) is slightly firmer versus the US Dollar (USD), with modestly better PMIs but a fading fundamental backdrop as 2-year spreads give back gains since late June. With limited data before the August 13 Q2 GDP release, they remain medium-term bullish, expecting GBP/USD to trade between 1.3420 and 1.3520 near term within a broader 1.31–1.35 range.
Sterling steady with medium-term bullish bias"The pound is entering Wednesday’s NA session with a fractional 0.1% gain vs. the USD. The Final services and composite PMI’s for July saw fractional improvements while indicating marginal growth overall."
"The release calendar is limited over the next week or so with no major data scheduled ahead of the preliminary Q2 GDP print on August 13."
"The fundamental picture for the GBP looks to have faded since mid-July, with 2Y spreads relinquishing much of their recovery from late June."
"The options market offers some reassurance, likely reflecting a continued improvement in sentiment towards the UK’s political situation."
"Neutral/bullish—the RSI is slightly above the neutral threshold at 50 and looks to have found a more solid footing in the aftermath of last week’s gains."
"The local range remains bound between late June support in the mid1.31s and mid-July resistance in the mid-1.35s. We remain medium-term bulls and look to a near-term range bound between 1.3420 and 1.3520."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
U.S. dollar pulled back as traders focused on the weaker-than-expected ADP Employment Change report. The report showed that private businesses added 44,000 jobs in July, compared to analyst forecast of 70,000. Weaker dollar provided additional support to gold markets in today’s trading session.
Gold climbed above the resistance level at $4180 – $4200 and is trying to settle above the $4250 level. In case gold manages to settle above $4250, it will head towards the next resistance level, which is located in the $4360 – $4380 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
On the support side, a move below the $4180 level will push gold back towards the strong support at $4020 – $4040.
Gold (XAU/USD) price surges to its highest level in nearly seven weeks, gaining nearly 3.80% on Wednesday as the Greenback loses ground and US Treasury yields fail to gain traction. The XAU/USD pair trades at $4,232, its highest level since June 18, after bouncing off daily lows of $4,065.
Bullion clears $4,200 on USD weakness, soft ADP data and Hormuz deal hopesThe yellow metal strengthened sharply as it cleared the 50-day Simple Moving Average (SMA) at $4,161, clearing on its way north the $4,200 mark. The US Dollar Index (DXY), which tracks the buck’s performance against a basket of six currencies, is down 0.12% at 99.76.
The US economic docket is busy this week, with traders eyeing the release of the July Nonfarm Payrolls figures on Friday. Economists expect job creation of 80K and the Unemployment Rate to remain steady at around 4.2%.
Earlier, the July ADP Employment Change report was weaker than anticipated, dropping from 98K to 44K, below the forecast of 70K. The data indicated that education and health services increased their workforce by 36K, whereas leisure and hospitality decreased by 11K.
At the same time, business activity in the services sector remained strong in July, according to the Institute for Supply Management (ISM). The ISM Services PMI improved from 54 to 54.1, though it missed estimates by 0.4 points. The sub-components of employment and prices paid contracted and expanded, respectively. The Employment diffusion index dipped from 51.2 to 47.4, while the Prices Paid rose from 67.7 to 70.3, extending the trend to 110 months.
Fed Regional Bank Presidents remain hawkish amid a split FOMCMinneapolis Federal Reserve (Fed) President Neel Kashkari stated that it is now appropriate to start gradually raising rates, emphasising moderate increases rather than dramatic hikes. Meanwhile, Jeffrey Schmid of the Kansas City Fed indicated that a strict monetary policy is necessary to address inflation considered "too high."
The de-escalation of the Gulf War is a tailwind for the non-yielding metal. Although crude prices are edging lower and easing inflationary pressures, investors remain skeptical of a positive outcome, as they expect a 25-basis-point rate hike by the Federal Reserve at the September meeting, according to Prime Terminal.
Source: Prime TerminalA report by N12, citing American officials, commented that the signing of an agreement to reopen the Strait of Hormuz would be possible as early as Wednesday.
XAU/USD technical outlook: Gold clears the latest cycle high, as market structure shifts neutralGold price has shifted to a neutral stance after the yellow metal surpassed the 50-day Simple Moving Average (SMA) at $4,161, opening the door for further gains. Momentum has shifted bullishly, as indicated by the Relative Strength Index (RSI), meaning that in the near term, the path of least resistance is upward.
XAU/USD’s first resistance is the $4,300 mark. Above lies the June 17 cycle high of $4,382, ahead of reaching the 100-day SMA at $4,499 near the psychological $4,500 mark.
On the flip side, the first support is the July 6 high, which turned into support at $4,202. A breach of the latter will expose the 50-day SMA, followed by the $4,100 mark. Beneath is the August 3 daily low of $4,019. Breaking that level could lead to a decline to $4,000.
Gold daily chart Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
XAG/USD Current price: $62.00Tepid United States data weighed on an already weak US Dollar.Hopes for a quick solution to the Middle East conflict boosted the mood.XAG/USD trades at a fresh one-month high and aims to extend its recovery.Silver flirted with $63 on Wednesday, its highest in over a month amid renewed market optimism. Investors welcomed news hinting at a soon-to-come deal between the United States (US) and Iran.
XAU/USD traded as high as $62.78 early in the American session, following headlines indicating that the US Treasury lifted counter-terrorism sanctions imposed on three airlines and two aircraft linked to the Islamic Revolutionary Guard Corps (IRGC) and three airlines.
A Treasury official clarified that the decision was not related to US negotiations with Iran over a possible deal to end hostilities in the Gulf, according to Reuters, yet market players dropped the Greenback on hopes that a deal is closer. The encouraging headline was reinforced by reports suggesting that a deal between Oman and Iran is done, pending Tehran's approval.
The USD was also pressured by local data, as the ADP Employment Change survey showed that the US private sector added measly 44K in July, missing expectations of 70K and below the 98K recorded in June. Also, the ISM Services Purchasing Managers’ Index printed at 54.1 in July, slightly better than the previous 54, although below the 54.5 expected.
XAG/USD short-term technical outlookBroad USD weakness keeps precious metals near recent highs, with XAU/USD now hovering around the $62 level.
In the 4-hour chart, XAG/USD trades at $62.00, extending its recovery above the critical $61 mark, a former relevant low now an immediate relevant support. The pair holds well above the 20-period Simple Moving Average (SMA) at $59.32 and the longer-term 100- and 200-period SMAs at $58.15 and $58.99, respectively, which now underpin the uptrend. The Momentum indicator gains modest upward traction above its midline, while the Relative Strength Index (RSI) indicator consolidates around 74, far from signaling exhaustion but instead reflecting the latest advance.
In the daily chart, Silver retains a constructive near-term bias as it trades well above the 20-day SMA at $58.30, while the 100-day and 200-day SMAs at $69.22 and $71.06, respectively, remain well overhead, signaling that the broader trend is still capped despite the latest rebound. Momentum has improved, with the 14-day Relative Strength Index around 56 and the 14-day Momentum indicator turning firmly positive, which suggests buyers currently have the upper hand.
On the downside, immediate support is seen at the short-term 20-period SMA at $59.32, followed by the 200-period SMA at $58.99 and the 100-period SMA at $58.15, where any dip would likely attract fresh demand while these levels hold. On the topside, initial resistance is seen at the 100-day SMA near $69.22, followed by the 200-day SMA at $71.06, a cluster that is likely to act as a tougher supply zone if the rally extends. Once beyond it, however, the path towards $100 will be much clearer.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
The Pound Sterling (GBP) advances some 0.12% on Wednesday as the US Dollar (USD) registers back-to-back days of losses, after US jobs data was softer than expected, even though business activity in the services sector continues to expand solidly. The GBP/USD pair trades at 1.3467. Read More...
British Pound grinds higher above 1.3450 ahead of US ADP Employment releaseThe GBP/USD pair posts modest gains near 1.3455 during the early European session on Wednesday, bolstered by softer US economic data and cooling US-Iran tensions. Traders brace for the US ADP Employment and ISM Services Purchasing Manager Index (PMI) reports, which are due on Wednesday. Markets might turn cautious later this week ahead of the US July jobs data. Read More...
British Pound weakens as US Dollar gains despite easing safe-haven demandGBP/USD edges lower after registering modest gains in the previous day, trading around 1.3450 during the Asian hours on Wednesday. The currency pair came under selling pressure as the US Dollar (USD) gained momentum, bolstered by a rebound in the benchmark 10-year US Treasury yield, which had dipped toward 4.61% on Tuesday. That initial slide in yields was driven by falling energy prices, which helped cool inflation fears and tempered expectations of a hawkish response from the Federal Reserve (Fed). Read More...
U.S. Dollar Moves Lower As Traders Focus On Job Market Data
DXY 050826 4h Chart U.S. Dollar Index pulls back as traders react to the weaker-than-expected ADP Employment Change report. The report indicated that private businesses added 44,000 jobs in July, compared to analyst forecast of 70,000.
Traders also had a chance to take a look at the ISM Services PMI report for July. The report showed that ISM Services PMI improved from 54.0 in June to 54.1 in July, compared to analyst consensus of 54.5. Numbers above 50 show expansion.
U.S. Dollar Index failed to settle above the resistance level at 99.85 – 100.00 and pulled back towards the 99.75 level. In case U.S. Dollar Index settles below 99.75, it will head towards the nearest support, which is located in the 99.25 – 99.40 range.
EUR/USD Tests The 1.1550 Level EUR/USD 050826 4h Chart EUR/USD is moving higher as traders focus on U.S. economic data. Rising oil prices did not put pressure on EUR/USD as traders believe that U.S. and Iran will reach a temporary deal soon.
EUR/USD moved above the resistance at 1.1510 – 1.1525 and is trying to settle above the 1.1550 level. In case EUR/USD manages to settle above 1.1525, it will head towards the next resistance, which is located in the 1.1600 – 1.1615 range. RSI is close to the overbought territory, but there is enough room to gain additional upside momentum in case the right catalysts emerge.
On the support side, a move below the 1.1500 level will push EUR/USD towards the 50 MA at 1.1460. If EUR/USD declines below the 50 MA, it will head towards the next support at 1.1420 – 1.1435.
GBP/USD Gains Ground As Rebound Continues GBP/USD 050826 4h Chart GBP/USD is trying to settle above the resistance level at 1.3465 – 1.3480 as traders focus on general weakness of the American currency.
In case GBP/USD manages to settle above the 1.3480 level, it will move towards the resistance at 1.3550 – 1.3565. On the support side, a move below the 1.3420 level will push GBP/USD towards the 50 MA at 1.3385.
USD/CAD Tests Support At 1.4010 – 1.4025
USD/CAD 050826 4h Chart USD/CAD is losing ground as traders focus on the strong rally in precious metals markets. Gold and silver are up by +4% amid rising demand for precious metals. Other commodity-related currencies are mixed in today’s trading session.
Currently, USD/CAD is trying to settle below the support level at 1.4010 – 1.4025. If USD/CAD manages to settle below 1.4010, it will head towards the next support at 1.3920 – 1.3935.
On the upside, USD/CAD needs to settle above the 50 MA at 1.4064 to gain upside momentum in the near term. In this case, USD/CAD will head towards the resistance level at 1.4125 – 1.4140.
USD/JPY Stays Below The 158.00 Level USD/JPY 050826 4h Chart USD/JPY remains stuck near resistance at 157.50 – 158.00 as traders are cautious after recent interventions from BoJ. Treasury yields are moving higher, but this move does not provide sufficient support to USD/JPY.
If USD/JPY manages to settle above the 158.00 level, it will head towards the next resistance, which is located in the 159.50 – 160.00 range. A move above the 160.00 level will push USD/JPY towards the 50 MA at 160.84.
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Gold (XAU/USD) is accelerating its rebound near $4,250 at the time of writing on Wednesday amid easing geopolitical tensions after United States (US) President Donald Trump said that a deal to reopen the Strait of Hormuz was imminent. Bitcoin (BTC) mirrors the metal’s near-term bullish bias, edging higher toward the resistance at $65,000.
Trump eyes reopening of the Strait of HormuzPresident Trump told reporters on Tuesday that “a lot of progress had been made” in the discussions of reopening the Strait of Hormuz, and intimated that an announcement could be made as soon as Wednesday.
Moreover, a CNN report states that a senior Gulf official said that there is a “50-50” chance that Iran could reach a deal amid the ongoing strategic talks with Oman on reopening the waterway.
Despite Trump’s optimism, Iranian state media said earlier this week that any agreement with Oman over the Strait of Hormuz has “no connection” to its reopening.
Meanwhile, appetite for risk assets appears to be improving albeit gradually, as reflected in the crypto Fear & Greed Index, which is embedded in Fear territory at 28 on Wednesday, up from 25 in the Extreme Fear region the day before. A sustained recovery could ensue should investors increase risk exposure, absorbing selling pressure.
Crypto Fear & Greed Index | Source: AlternativeTechnical analysis: Bitcoin bulls gain groundBitcoin trades around $64,540, keeping a mildly bearish near-term bias as it holds inside a downward parallel channel and below a dense layer of exponential moving averages (EMAs). The spot price also holds just above the channel’s upper boundary near $64,405, which now acts as immediate support, but remains capped by the 50-day EMA at $64,659, with the 100-day EMA at $67,096 reinforcing broader downside pressure overhead.
The Relative Strength Index (RSI) around 53 on the daily chart hints at neutral-to-slightly positive momentum, while the Moving Average Convergence Divergence (MACD) remains in negative territory, suggesting that any rebounds are still occurring within a corrective, capped structure.
BTC/USDT daily chartThe first resistance is the 50-day EMA at $64,659, followed by the Parabolic SAR signal near $65,604, where selling interest could intensify if price extends higher, before the more distant 100-day EMA at $67,096 defines the broader bearish cap. On the downside, initial support lies at the upper boundary of the descending channel around $64,405, with the channel floor near $61,262 as the next key downside objective should sellers regain control.
Technical outlook: Gold extends recoveryGold trades around $4,256, holding above the 50-day EMA at $4,187 but still capped beneath the 200-day EMA at $4,279 and the 100-day EMA at $4,316, which keeps the broader outlook only cautiously constructive.
The break and subsequent hold above the former downward-resistance trendline, whose key break price sits near $4,000, hints at an improving structure, while the MACD has turned firmly positive and the RSI at 61 shows strengthening bullish momentum rather than overbought conditions.
XAU/USDT daily chartImmediate resistance lies at the 200-day EMA around $4,279, with a subsequent barrier at the 100-day EMA near $4,316. A daily close above this capped area would likely open the door to a more decisive bullish phase. On the downside, initial support is seen at the current price area as an immediate pivot, followed by the 50-day EMA at $4,187, while the broken descending trendline around $4,000 stands as a deeper structural floor if a corrective pullback develops.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Bitcoin, altcoins, stablecoins FAQs Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
There haven’t been many opportunities in recent weeks where the geopolitical and the macro backdrop have been supportive of risk sentiment, but today is one of those days. The oil price remains low; Brent crude oil is below $79 per barrel as the US and Iran hash out the details for reopening the Strait of Hormuz. Today is the one of the first days that it has felt like a traditional August trading day.
SpaceX boosts NvidiaGlobal stock indices are drifting higher, and US indices are extending gains after closing at record highs earlier this week. SpaceX is the one exception, it is the weakest performer on the Nasdaq 100, and is lower by more than 7% after investors reacted to its earnings report. However, even SpaceX is helping to boost the broader US index, after its announcement that it will use Nvidia chips to power all its AI data centres, has boosted Nvidia’s share price by 4.5% today. Although overall market sentiment is strong, investors are also buying into individual narratives, and Nvidia is rallying while other semiconductor chip stocks are struggling because it bagged another high-spending customer.
Tech stocks may take a breatherThe gains in US stocks have been astonishing in the past week. Although the Nasdaq did not record a new high, it did post a 1% plus gain for the fourth straight day on Tuesday, something it has only done 17 times before in its history. Thus, a pullback at this stage would be normal.
Gold glitters once moreAlthough the tech sector is dominating the market narrative this week, gold and silver are also leading the pack, which is boosting the FTSE 100’s miners, Endeavour Mining and Fresnillo are higher by 5% and 4% respectively on Wednesday.
Precious metals are surging today due to two factors: 1, the prospect of a US/ Iran deal to reopen the Strait of Hormuz and deescalate the situation in the Middle East, and 2, the weaker than expected ADP private sector payrolls reading in the US.
Precious metals prices have not acted as a safe haven since war broke out in the Middle East and instead they have tended to rally when the situation improves. Thus, a breakthrough could extend the recent pick up in the gold price.
The weaker ADP report has reduced the chance of a rate hike from the Fed in September. The probability of a rate hike in September now stands at 56%, that’s down from 59% last week. If we get a weak NFP payrolls report on Friday, then US rate hike expectations could fall further.
Falling Treasury yields help the gold price to recoverThe weaker tone to the ADP report, along with a falling oil price that could keep inflation in check, is pushing down Treasury yields. In the past week, the 2-year Treasury yield is lower by 6bps, the 10-year yield is lower by 5bps. Since gold has no yield, when Treasury yields are falling it can boost the attractiveness of holding gold as an asset. The recent decline in the dollar is also boosting the gold price. Multilateral intervention to push up the yen weighed on the dollar index this week and pushed it down 1.7%.
The technical picture is also supportive for gold, after it broke through its 50-day sma at $4160 per ounce, which is a bullish development in the short term, as you can see in the chart below. The next key resistance level to watch includes $4,500, the 200-day sma.
Looking ahead, the gold price could be at risk if there is a stronger than expected payrolls report later this week.
Overall, the stock market rally could take a pause here, especially in the US. However, we think that if this happens it will be temporary, as there are multiple factors that could drive stocks higher from here, including a lower oil price, and a strong Q2 earnings season.
There is also a strong technical bias for further upside in US stocks. The Nasdaq 100 broke above its 200-day sma this week, which suggests momentum is firmly to the upside for now.
Chart 1: Gold, the technical picture looks supportive
Source: XTB
Chart 2: A pullback in the US 100 could be temporary
USD/CAD climbed toward weekly highs as falling oil prices weakened the Canadian dollar despite strong domestic trade data. Canada's trade surplus reached a four-year high, but the positive economic data was overshadowed by the sharp decline in crude oil prices. Markets are reassessing Federal Reserve expectations, limiting gains in the US dollar after weaker-than-expected US economic data. USD/CAD rises as oil prices pressure the Canadian dollar The USD/CAD exchange rate extended its gains on Wednesday, climbing toward the 1.4080 level as another sharp decline in oil prices continued to pressure the Canadian dollar.
The move came despite encouraging economic data from Canada, where the country’s merchandise trade surplus expanded to its highest level in four years during June. Under normal market conditions, stronger trade figures would support the loonie. However, investors remained focused on the collapse in crude oil prices, which has become the dominant driver of the Canadian currency this week.
Canada is one of the world’s largest crude exporters, meaning movements in oil prices often have a direct impact on the value of the Canadian dollar. With Brent crude slipping below $80 per barrel as hopes for a diplomatic breakthrough between the United States and Iran improved, traders reduced exposure to the loonie in anticipation of weaker export revenues.
Lower oil prices offset stronger Canadian economic data The Canadian dollar struggled to capitalize on stronger-than-expected domestic economic data as falling crude oil prices remained the dominant driver of market sentiment. Canada reported a merchandise trade surplus that climbed to a four-year high in June, reflecting resilient exports and healthy external demand. Under normal circumstances, such data would provide support for the loonie by reinforcing confidence in the country’s economic outlook.
However, investors largely overlooked the upbeat trade figures as oil prices extended their recent decline. Brent crude slipped below $80 per barrel, marking its lowest level in several weeks, after growing optimism that diplomatic negotiations between the United States and Iran could ease tensions in the Middle East and reduce the risk of supply disruptions. Expectations that global oil supplies could stabilize prompted traders to unwind part of this year’s geopolitical risk premium.
Because crude oil is Canada’s largest export, movements in energy prices have a significant impact on the country’s trade balance, corporate earnings and economic growth prospects. The latest decline in oil prices therefore outweighed the positive impact of Canada’s stronger trade data, leaving the loonie under pressure as investors continued to favor the US dollar.
Softer US data caps US dollar gains While USD/CAD continued to move higher, gains in the US dollar remained limited as investors reassessed the outlook for Federal Reserve policy following a fresh batch of weaker-than-expected US economic data. The greenback initially found support from broad risk sentiment but struggled to build sustained momentum as markets questioned whether the Fed would have enough justification to continue tightening monetary policy.
Recent economic releases painted a mixed picture of the US economy. JOLTS job openings fell by more than economists had anticipated, suggesting labor demand is beginning to cool after months of resilience. Meanwhile, factory orders unexpectedly declined, pointing to softer business investment and moderating manufacturing activity. Together, the data reinforced expectations that economic momentum is slowing, reducing pressure on the Fed to raise interest rates aggressively in the near term.
As a result, traders scaled back expectations for another interest rate hike, with market-implied odds of a September increase easing from the previous session. Lower rate expectations tend to weigh on the US dollar by narrowing its interest-rate advantage over other major currencies.
Despite this, USD/CAD remained supported because weakness in the Canadian dollar proved more significant than softness in the greenback. Falling crude oil prices continued to undermine the loonie, allowing the pair to edge higher even as US dollar gains were capped by expectations of a less hawkish Federal Reserve.
USD/CAD outlook The USD/CAD outlook remains cautiously bullish while the pair trades above the psychological 1.4000 support level. Buyers are now testing resistance around 1.4090, a key technical barrier that has capped recent advances. A decisive breakout above this level could expose 1.4125, with the yearly high near 1.4250 becoming the next major upside target.
However, if oil prices recover or expectations for further Federal Reserve tightening continue to fade, the Canadian dollar could regain some ground, potentially pulling USD/CAD back toward 1.4000.
Why is USD/CAD rising today?
USD/CAD is rising mainly because falling oil prices are weakening the Canadian dollar, while the US dollar remains relatively stable despite softer US economic data.
What is the next key level for USD/CAD?
The immediate resistance level is around 1.4090. A sustained move above this level could open the door for a test of 1.4125, followed by the 2026 highs near 1.4250.
Why do oil prices affect the Canadian dollar?
Canada is a major oil exporter. Lower crude prices reduce export revenues and typically weaken the Canadian dollar, while higher oil prices generally support the currency.
Silver (XAG/USD) jumps more than 4% on Wednesday as weaker-than-expected US ADP employment data and easing energy-driven inflation prompt traders to scale back expectations for Federal Reserve (Fed) rate hikes. At the time of writing, XAG/USD trades around $62.30, near its highest level in a month.
From a technical perspective, the latest leg higher has improved the near-term outlook. However, the broader trend remains cautious as Silver approaches key resistance levels.
On the daily chart, XAG/USD has reclaimed the 21-day Simple Moving Average (SMA) at $58.31 and is now challenging the 50-day SMA at $62.65.
The Relative Strength Index (RSI) has risen to 56, while the Moving Average Convergence Divergence (MACD) stays above zero. Both indicators suggest that bullish momentum is building.
Immediate resistance is located at the 50-day SMA near $62.65. A daily close above this level would open the way toward the $65.00 barrier, followed by the 100-day SMA at $69.22. On the downside, the 21-day SMA at $58.31 offers initial support, ahead of the horizontal floor near $55.50.
Weekly chart
On the weekly chart, XAG/USD trades below the 50-week SMA at $65.94 and the 21-week SMA at $68.64, keeping the broader outlook bearish. The weekly RSI stands at 45, while the MACD remains below zero, suggesting that the latest advance has yet to develop into a broader bullish reversal.
On the upside, the $65.00 mark offers initial resistance, followed by the 50-week SMA at $65.94. A sustained break above this zone would bring the 21-week SMA at $68.64 into focus. On the downside, support is located near $55.50, followed by the 100-week SMA at $49.51.
(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.
Scotiabank strategists Shaun Osborne and Eric Theoret describe the Euro (EUR) as steady in the mid-to-lower 1.15 area, trading close to fair value based on 2-year US–Germany spreads. Fundamentals and sentiment are seen as constructive, underpinning EUR recovery since early Q3. Short-term technicals are bullish, with resistance around 1.1550 and a preferred near-term range between 1.1500 and 1.1600, ahead of the 200-day MA at 1.1630.
Bullish tone with defined resistance levels"The EUR is steady, extending its latest consolidation in the mid/lower1.15 area. The final services and composite PMI’s offered a fractional improvement on the preliminary prints, indicating marginal levels of growth across the euro area, despite a slight contraction in France and Germany in July."
"The EUR is trading in line with a narrow FV estimate tied to 2Y spreads between the US and Germany, offering little in terms of directional risk from a fundamental perspective. The trend in both fundamentals (spreads) and sentiment (risk reversals) is constructive, providing a solid basis for the EUR’s latest recovery since the start of Q3."
"Bullish – the EUR’s latest recovery has been important, delivering a clear bullish shift in momentum and a break of trend resistance with the push above the 50 day MA (1.1476)."
"Short-term price action has revealed additional near-term resistance around 1.1550, however we see nothing major ahead of the 200-day MA at 1.1630. We look to a near-term range bound between 1.1500 and 1.1600."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The EUR/USD forecast is for a potential upside continuation as US Pres Trump says a Hormuz deal could be reached on Wednesday. The EUR/USD is inching higher this Wednesday as the US Dollar retreats following a shift in sentiment, with hopes for positive negotiations between the US and Iran on the geopolitical front gaining momentum. This Wednesday, the greenback is broadly lower as the markets digest the impact of falling US bond yields and softer US labor market indicators. Falling oil prices have also removed the safe-haven appeal of the US Dollar, with investors now willing to assume more market risk.
Furthermore, the US Dollar is also taking a beating after the ADP Non-Farm Employment Change surprised to the downside. US private sector employment as measured by this data set came in at 44K, lower than the market expectation of 68K and the prior of 95K.
The EUR/USD is currently trading 0.1% higher as of writing.
Today’s biggest macro driver is the decline in US bond yields due to softer US labor market data and reduced dollar appeal from falling oil prices and geopolitical de-escalation. Additional factors include profit-taking from recent dollar longs and rotation away from defensive dollar positioning toward a risk assumption.
2) Easing Geopolitical Fears
The recent pause in new US strikes has provided some relief to the markets on the geopolitical front. Despite the unresolved conflict, any headlines that point to a pause in hostilities are a piece of much-needed good news for a market that is looking drained by the elongated nature of the war. Oil prices are trading below $80 a barrel, suggesting a reduction in the geopolitical risk premium and improved market sentiment.
3) Markets Now Reassessing the Fed Outlook
Last week’s Federal Reserve meeting was interpreted as a hawkish hold. However, the reduction in fuel prices, the lowering of US bond yields, and the underwhelming US labor data released so far are forcing markets to reassess the Fed’s outlook. If the NFP data points to a slowing of US public sector employment and further inflation data suggests moderation, the Fed expectations could start turning dovish.
4) Stable Eurozone Fundamentals
Despite the growth concerns and the impact of rising energy costs on the energy-import-dependent single area, the single currency is benefiting from the ECB’s cautious stance. Furthermore, recent inflation data (Eurozone Core CPI Flash Estimates YoY: actual 2.5%, consensus/prior: 2.4) indicate that inflation has not disappeared totally. These factors are helping to create stability for ECB expectations and are currently supportive of Euro strength.
EUR/USD Near-Term Price Catalysts 1) US Data: Upcoming data from the US that will be on the watchlist of traders include Friday’s Non-Farm Payroll report. Subsequently, the consumer spending and consumer/producer price index data will also hit the newswires. If the data points to lowered US economic resilience, the weakness in the US Dollar could continue.
2) US Treasury Yields: Declining US bond yields will lead to a reduced demand for USD-denominated assets, which invariably supports further gains on the EUR/USD. On the flip side, USD strength is restored if bond yields start rising once more.
3) Middle East geopolitics: Headlines around the state of shipping or military encounters in the Strait of Hormuz will impact oil prices. If there is a renewal of bombardments, the markets will interpret this as a sign of escalation, and this would revive the USD’s safe-haven appeal at the Euro’s detriment.
EUR/USD Forecast Scenarios Base case: moderate bullishness is expected, with the recent pullback in the USD expected to extend if US bond yields remain pressured. Furthermore, the cooling of geopolitical tensions and stable ECB policy expectations are expected to provide further support for the pair.
Bull case: a combination of weak US data, continued de-escalation on the geopolitical front, and additional declines in US bond yields could see more USD longs being liquidated. Under these conditions, the EUR/USD may reclaim the 1.1670 resistance level or higher.
Bear case: if US bond yields resume the upside trend, coupled with better-than-expected US data and renewed fighting between the US and Iran, this is supportive of a bear case scenario. This scenario sees a further widening in the interest yield differential between the Euro and US Dollar, and a retreat in Fed rate cut expectations. A retreat towards support levels below 1.14 is the price expectation here.
EUR/USD: Technical Outlook The break of the neckline at 1.1480 confirms the bottoming pattern (progressing rising lows at 1.1324 and 1.1363). This unlocks the door for a measured move that is expected to complete at 1.1577, the prior low of 19 January 2026 and the lower edge of the resistance zone, with 1.1581 as the upper edge. Only when this zone is breached can the 1.1671 resistance (30 April 2026 low and neckline of the 16 April and 12 May 2026 double top) become available as a new upside target.
Fig 1: EUR/USD daily chart showing key price levels (snapshot taken on 5 August 2026) On the flip side, this upside move is only invalidated if the bottoming price levels are degraded, which leaves room for continuation of the recent near-term downtrend towards 1.1269, the high of 17 July 2023. A further downside target at 1.1210 (23 September 2024 high) becomes the next downside target if 1.1269 is breached.
Gold Talking Points: Gold is breaking out today, with spot testing above the $4200 level that was resistance in early July. This presents the possibility of trend change after more than a month of support at the $4k level.
I looked into gold at the start of this week and as I said then, sellers were seemingly showing signs of stall as the $4k level had elicited multiple iterations of support. More recently, it was the higher-lows showing a degree of bullish anticipation, but it wasn’t until this morning that buyers took that much needed next step, by pushing price up to a fresh monthly high.
As of this writing, spot gold is testing above the same $4200 level that held the highs back in early July. And the question now is whether they can continue to set the pace following a decisively bearish past six months.
Gold Daily Price Chart Chart prepared by James Stanley; data derived from Tradingview Gold Short-Term, Catching the Parabola The challenge of a breakout often dials back to risk management, as there’s a lack of nearby supports to use for stop placement. So, the trader is often faced with choosing from one of two pathways, and both carry possible downside. Either chase the move or wait for a pullback. While the first option can allow the trader to jump on the prevailing momentum, the downside is the prospect of buying a top (or selling a bottom) and then watching a stop get hit at a sub-standard level, given that dearth of historical price action at those price intervals. The downside of the second approach is that pullback may not show up, and even when it does, there’s no assurance that the trend will continue. But – at the least, with the second pathway, the trader can allow for market dynamics and prior spots of reference to be used for risk management.
The big level now with the breakout taking hold is that $4200 spot. If we see short-term profit taking, then, ideally, buyers would come in to defend this spot of prior resistance. Below that is a key zone, taken from prior swing-highs spanning an approximate $20 range from $4160 up to $4180, and this is key as that was the last spot of higher-low support on the short-term chart before the breakout took hold past $4200.
If that gets taken out, we’d likely be looking at a wide upper wick on the daily or perhaps weekly bar and that would not be such a bullish indication. But – there is a case for support down to around the 4115 area which was a spot of resistance that held the highs twice before the current breakout got started.
Gold Hourly Chart Chart prepared by James Stanley; data derived from Tradingview Gold Trajectory If this is truly a tidal shift in gold, there’s a lot of room for bulls to run as the metal had dropped by more than $1600, or 25% in that six-month span of weakness.
This is, perhaps, one reason that traders don’t necessarily need to be so ultra-aggressive on chasing the short-term breakout. Because if this is, truly, the resumption of the broader trend, then there should be ample opportunity for short-term swings to present opportunity. Sitting overhead the next significant level is $4400, which set support back in May before sellers took their shot. And of course above that, $4500 has considerable prior action – to the point that if either of those levels came into play quickly, then some profit taking from short-term buyers should be expected, which could allow for pullbacks and then higher-lows.
Gold Daily Chart Chart prepared by James Stanley; data derived from Tradingview --- written by James Stanley, Senior Market Analyst, Global Macro
Gold price rose over 3% and hit the highest in nearly six weeks on Wednesday, lifted by fresh wave of optimism over a peace talks between the US and Iran, which eased inflation concerns and deflated the US dollar.
This was so far the strongest market reaction in more than one month, as fresh rally violated range top ($4203), reinforced by the base of falling and thickening daily Ichimoku cloud, generating significant bullish signals.
However, signals require confirmation on sustained break above these barriers that would open way for stronger recovery and expose next key barrier at $4304 (Fibo 38.2% of $4889/$3942) violation of which to generate reversal signal.
Strengthening positive momentum and formation of daily Tenkan/Kijun-sen bull cross, show positive developments on daily technical studies, which contributes to improving near-term outlook.
Geopolitical factor is likely to remain key price driver, with traders being cautious and focus on comments from President Trump (so far known for quick changes of direction of his views that kept market action highly volatile) that would continue to strongly impact traders’ sentiment.
Fresh acceleration higher is likely to face increased headwinds at $4200 zone, due to significance of these barriers, as some investors may decide to collect profits, however subsequent dips should hold above $4166 (broken Fibo 23.6% of $4889/$3942) to revived bulls in play.
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.
BNY’s Geoff Yu notes Brazilian portfolio inflows are near post-COVID highs ahead of the Selic decision, with strong demand for equities and government bonds. He highlights that FX conviction is limited as volumes are low and currency positioning neutral, while iFlow data suggest the broader inflow cycle peaked in April and the financial account is likely to stabilize rather than re-accelerate.
Flows strong but FX conviction cautious"BRL flows are recovering ahead of today’s Selic rate decision, supported by renewed terms of trade interest, strong equity demand and continued purchases of Brazilian government bonds. Conviction remains limited, however, because FX volumes are exceptionally low, currency holdings are effectively neutral and the broader portfolio flow cycle appears to have peaked. The recent sharp spot outflow looks more transaction-driven than evidence of a wider reversal, particularly given the otherwise constructive asset flow backdrop."
"Despite our caution on the currency itself, the clearest validation of a stronger market view on Brazil is the continued improvement in underlying asset flows. Equities and sovereign bonds have recorded very few outflow sessions over the past month, with equity demand particularly firm. Government bond inflows should remain the main anchor for Brazil’s external liability position."
"Although flow magnitudes have been softer for bonds than for equities, momentum remains positive and points to continued carry demand. The main challenge is duration. The current Fed backdrop and steeper U.S. Treasury curve are more supportive of front-end exposure, while emerging markets benefit most when hawkish monetary policy and fiscal credibility reduce term premiums and improve access to longer-term funding."
"Brazil’s financial account nevertheless remains strong, although momentum is slowing. Our iFlow EM portfolio flow proxy continues to track the official balance-of-payments data closely and suggests combined inflows peaked in April, which is consistent with the official figures. The pace of deterioration eased in July, but the broader direction remains clear."
"Following a decline of roughly $1bn in June, the monthly net financial account balance is likely to stabilize around zero rather than return quickly to the exceptional inflow levels seen earlier in the year."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Silver rallies early during the trading session on Wednesday to test the 50-day EMA. This market continues to pay close attention to the interest rates in America as well.
Silver Technical Analysis
Daily silver futures candlestick chart showing the contract near 62.100, below both the 50-day and 200-day EMAs. Source: TradingView. The silver market rallied a bit during the early part of the trading session here on Wednesday as it looks like we are threatening the 50-day EMA. We have pulled back just a touch from there, showing signs of hesitation. A little bit of technical resistance has come into the picture.
Interest rates in America started to fall early during the session, but they have ticked a little bit higher, not enough that I think it makes a huge difference at the moment, but it is something to keep an eye on. Silver of course, is very sensitive to rising interest rates, as it is more enticing for some to buy paper that yields instead of a non-yielding asset that traders have to store and pay to store like silver.
Mean Reversion Trade Eyes $60 Magnet We’ve been in a range for a while now and we are testing the top of it. Whether or not we can break out remains to be seen, but this is certainly a market that I’ll be watching closely on Wednesday. Short-term pullbacks are very possible here, with the $60 level being a bit of a magnet for price. It does make a certain amount of sense for a reversion to the mean trade.
There are no major economic announcements coming out during the session, so that could help as well. But we also have a lot of confusion and a lot of back and forth coming out of the Middle East, which obviously has its part to play in the interest rate markets. So the one thing I do expect is choppy behavior.
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Elevated Interest Rates and 200-Day EMA Present Resistance So, it is because of this that I’m not willing to jump in and just start buying gold hand over fist, although this is the first strong signal that we could remain bullish. The 200-day EMA sits just above as well, so technical analysis would suggest a little bit of noise in this area regardless.
So, taking my time is how I plan on playing this market, looking for value. I do like gold longer term; I’ve said that all along, but I also recognize that as long as interest rates remain somewhat elevated, it might be a little bit difficult to get aggressive in the gold market to the upside. That being said, eventually all things come to an end, and maybe this situation will, and the gold market could continue its overall uptrend. We’ll just have to wait and see. The size of the candle so far is pretty impressive; we’ll have to see how that plays out as well, but ultimately a little bit of patience probably goes a long way here.
Euro Technical Outlook: EUR/USD Multi-Timeframe Analysis EUR/USD technical analysis shows the currency pair rebounding off multi-year support after five straight weeks of testing, back into resistance. Michael Boutros, FOREX.com Senior Market Analyst, breaks down the euro-dollar picture across the monthly, weekly, daily and four-hour charts and the macro calendar shaping it. With the Federal Reserve back in focus, Boutros looks at how Friday's nonfarm payrolls report and the ADP employment report feed the next rate decision, and why market-implied odds of a September rate hike have slid from around four in five toward a coin flip. Eurozone retail sales and the broader U.S. dollar trend round out a week where the data, not the chart, may steer the next move.
This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.
Key EUR/USD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts Swiss Franc Short-term Outlook: USD/CHF Rally Presses Yearly Trend Resistance Canadian Dollar Short-term Outlook: USD/CAD Rebound Challenges the July Downtrend Australian Dollar Outlook: AUD/USD Rally Tests Make-or-Break Resistance Japanese Yen Short-term Outlook: USD/JPY Defends the Uptrend as the Range Tightens British Pound Short-term Outlook: GBP/USD Breakout Attempts Major Trend Reversal US Dollar Short-term Outlook: USD Uptrend Faces Make-or-Break Test After CPI Gold Price Short-term Outlook: XAU/USD Bulls Try to Carve Out a Low After 30% Drop --- Written by Michael Boutros, Senior Technical Strategist
The currency markets have no major announcements to focus on today, so ranges are likely to be watched by most.
EUR/USD Technical Analysis
EURUSD trades around 1.15462, extending its climb to fresh highs above both the 50-period and 200-period EMAs. Source: TradingView. The euro looks like it is testing the 1.1560 level, an area that had been important previously on a swing high, so we’ll have to see if we can break above there. It certainly looks like it’s struggling, but I also recognize that recently the 1.15 level had been support. Typically speaking, this is a pretty choppy pair, and when we zoom out on the longer-term charts, we start to see that we are approaching an area that historically has seen a lot of chop and noise. So a little bit of a pullback here would not be surprising to me at all. Certainly, we are seeing interest rates in America try to turn back around to the upside during the early part of the session, so something worth keeping an eye on.
USD/CHF Technical Analysis USDCHF trades around 0.80930, holding below the 0.81000 level and both its 50-period and 200-period EMAs. Source: TradingView. Currently, the US dollar and the Swiss franc seem to be very consolidated, and this is typical for this pair. But the interest rate differential most certainly favors the US dollar, and carry traders will be attracted to the wide spread here that they collect at any close of the day, especially with a lot of traders on Wednesday getting triple swap. Looks like the area right around 0.81 continues to be a magnet for price.
GBP/USD Technical Analysis
GBPUSD trades around 1.34708, pushing back toward its recent high above both the 50-period and 200-period EMAs. Source: TradingView. And finally, the British pound is stretching towards the 1.35 level. This is a lot like the euro in the sense that we had reached close to a swing high and failed a bit. Rates in the United States climbing a little bit early may provide a little bit of a headwind as well. 1.35 being broken would obviously be a strong headline because of the large round psychological number. It could bring in more buyers; we’d have to wait and see.
Currently, the 1.3435 level or so looks to be support. Could be range-bound. Today has no major economic announcements of any serious consequence. And with that, it would make sense if traders were a little bit range-bound and indecisive.
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The AUD/JPY forex pair has declined sharply since late July and for a carry trade favourite, investors are weighing how to position themselves The Australian dollar has seen a significant depreciation against the Japanese yen since late July. The AUD/JPY exchange rate declined from approximately 114.50 to lows between 109 and 110. While a rebound of over 1% yesterday pushed the pair above 111, it has since eased again.
These movements are influenced by differing central bank policies, the potential for intervention, and evolving market expectations for both the Reserve Bank of Australia (RBA) and the Bank of Japan (BoJ).
What Drove AUD/JPY Sell-off and Rebound? The sharp decrease in AUD/JPY during late July primarily resulted from a global unwinding of yen-funded carry trades. Previously, market participants borrowed yen at low interest rates to invest in currencies offering higher yields, such as the Australian dollar. However, market changes necessitated a rapid liquidation of these leveraged positions, leading to substantial buying of the yen across major currency pairs.
A notable factor emerged on July 30 when a rapid appreciation of the yen against major currencies led to widespread market speculation of official intervention by Japanese authorities. The AUD/JPY pair dropped more than 1.3% on that day and continued its downward trend in the following sessions, reaching its lowest point in several weeks.
Although Tokyo has not officially confirmed intervention, the magnitude of the currency move, combined with prior warnings regarding excessive yen weakness, provided strong indications to traders.
Yesterday’s temporary 1.0% rebound was sparked by a short-term resurgence in global equity markets and a temporary stabilization in risk appetite.
But the pair couldn’t hold onto those gains during today’s trading, which showed how vulnerable it still is. Softer commodity prices, particularly crude oil and industrial metals, have kept the growth-sensitive Aussie dollar struggling.
Near-Term Momentum and Outlook Yesterday’s rebound proved the pair can still draw buyers when the yen eases up or broader risk appetite improves. But since it couldn’t hold onto those gains today, it seems the risk of intervention is still capping any rise.
Traders are now looking ahead to the RBA’s next decision and any further signals from the BoJ, like the summary of opinions and upcoming Japanese inflation data.
In the near term, AUD/JPY might trade in a wider range. Support could hold near recent lows of 109-110, with resistance possibly around 112-113. For a lasting recovery, we’d need clearer signs that Japanese authorities are stepping back, and that Australian data actually back up the current yield advantage.
On the other hand, more yen strength or a dovish shift in RBA expectations could extend the decline.
Over the medium term, the outlook depends on how quickly policies adjust. If the BoJ speeds up normalization while the RBA remains on hold, the yield gap would narrow and favor the yen.
If Australian inflation proves more persistent and Japanese tightening remains gradual, carry demand could reassert itself and lift the pair once intervention fears calm down.
What caused the AUD/JPY to drop sharply at the end of July?
It fell fast because yen-funded carry trades were quickly unwound, and global commodity prices cooled down.
How are the Reserve Bank of Australia and the Bank of Japan affecting the AUD/JPY right now?
The RBA has stopped raising rates, and the Bank of Japan is starting to normalize its policies. This means the difference in interest rates between Australia and Japan is getting smaller.
Why did the AUD/JPY suddenly jump 1% yesterday?
Yesterday’s quick rise happened because global stock markets temporarily bounced back, and investors felt a bit more willing to take risks for a short while.
Gold prices rose in early Wednesday trading, touching a one-month high as European markets opened. Traders remain optimistic that the United States and Iran could reach a peace agreement that would allow the Strait of Hormuz to reopen. This optimism, reflected in lower oil prices, has also prompted investors to scale back expectations that the Federal Reserve will raise interest rates before the end of the year. As a result, the US dollar weakened against most major currencies, benefiting gold due to the inverse relationship between the two assets. Against this backdrop, investors will continue to monitor developments in the Persian Gulf while also turning their attention to this week's US labour market data, culminating in Friday's all-important Non-Farm Payrolls report. Employment figures pointing to a resilient US economy would strengthen the case for tighter monetary policy, supporting the dollar and likely weighing on gold prices. Conversely, weaker-than-expected data would reduce expectations of further interest rate hikes, potentially triggering renewed dollar weakness and providing additional support for the precious metal.
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You might be excused to wonder: what the hell is happening at ASA? In ASA Gold & Precious Metals Ltd.’s (NYSE:ASA) semi-annual report, Saba partner Paul Kazarian had the audacity to write: “We thank you for your continued support” having seized management of ASA wearing the hat of “Chair of the Investment Committee”. The first month after pushing out Merk Investments (“Merk”) as ASA’s investment manager had a fitting end, with ASA’s discount widening to -17.26% — that’s how much “support” investors give ASA’s internal Investment Committee currently managing ASA.
How we got hereTo understand where this may be headed, start with how we got here. In case you missed it, some context: after a tenure of over seven years of delivering best-in-class performance, literally beating every peer, both absolutely and on a risk-adjusted basis, ASA’s Board, with all Board members hand-picked by Saba and its Chair, a Saba partner, terminated Merk’s Investment Advisory Agreement effective June 30, 2026. The reason? In the semi-annual report, the cited reason was “the Independent Directors’ general reservations related to Merk’s approach to portfolio risk.” Fun fact: the Board commissioned an independent risk analysis by Broadridge (that Merk only got to see the evening before the Board meeting that was to decide on the renewal of the Advisory Agreement); that report supported Merk’s analysis that the Fund’s performance was due to Merk’s investment process rather than excessive risk taking.
In any case, Saba for years complained about the Fund’s discount. As a closed-end fund, ASA does not trade at Net Asset Value (NAV), but based on supply and demand in the market. Throughout Merk’s tenure, the Fund’s discount had gradually been narrowing. Except, that is, until Saba finally disclosed its true intentions in January, 2026, that they would like to have the Board repurpose the Fund into a Saba-managed vehicle. The Fund’s discount really started blowing out in July, 2026 with Merk gone and no further communication from the Board about its intentions. Saba in June, 2026 clarified they would like the Fund to be a Business Development Company under Saba management, with profit sharing for Saba. Note that this is Saba making proposals about the Fund’s future, ever more specific, but ASA’s Board - with all Board members hand-picked by Saba - has remained silent.
What happens to ASA now?ASA’s Board still has not told shareholders what it intends to do. Saba has shown its cards, however, the Board has not. Saba wants ASA’s mining portfolio liquidated, the Fund repurposed, and a Saba-managed vehicle installed—with management fees and profit sharing for Saba. What does it mean when an Investment Committee with no mining expertise manages a mining fund? What can shareholders expect?
ASA can temporarily assign the Advisory Agreement to someone else - or have it internally managed - but only for 150 days (late November) without going to shareholders. As I have written, shareholders have had no real voice and a vote at this stage cannot undo the damage that has been done.We don’t know what ASA’s Board will do, and it is possible that, in response to public pressure, they will amend their plans. My baseline has been that the Board will want to liquidate ASA’s portfolio, then repurpose the Fund. However, ASA must follow its investment mandate to invest 80% of its holdings in precious metals mining related securities, unless the Board gets shareholder approval to change the Fund’s strategy.Is the portfolio already changing?Rather than guess, Merk built a dashboard to watch for style drift in real time. We only have one month of data, so it is too early to draw firm conclusions. For now, the Fund’s portfolio appears to be coasting along. The benchmark GDMNTR listed is the underlying index to GDX, the mining ETF. Source for the data is Bloomberg.
To prepare the portfolio for potential liquidation, I would expect to see a trimming or elimination of some of the least liquid securities to reduce the risk of front-running in the market.
Share repurchase program In limbo?Separately, a bit of a head scratcher is that we have not seen any share repurchases of ASA since Merk stepped down on July 1, 2026. Historically, the most recent calendar quarter’s share repurchases were posted on ASA’s website - this has not yet taken place. Share repurchases are historically also reflected in Bloomberg. Below is a chart of Bloomberg’s report on shares outstanding in ASA, suggesting there might not have been any repurchases in July. In contrast, in April, when Merk was still the investment adviser, the Board felt so strongly about resuming share repurchases when the program was suspended that it issued a Form 8-K to release non-public information into the market that held up the program per Merk’s standard process. So either ASA is processing repurchases sloppily, it has legal reasons to suspend the program, something else is happening, or some combination of these applies. A legitimate reason to suspend the share repurchase program would be that material developments are underway that have not yet been disclosed to shareholders. To be clear, it is possible that repurchases have continued; there may be technical reasons why we don’t see them.
The coattail riders move inWhile the Board remains silent and share repurchases may have been paused, a different group of investors appears to be moving in.
Based on my analysis of public filings, it appears some investors have bought ASA in the hope to capture the discount through a future tender offer. What Saba does with the Fund afterward may be secondary to them—but not if Saba restructures ASA first and makes all ASA shareholders bear the related costs before they are given an exit. Saba’s June filing proposed “a limited cash tender offer and a limited tender offer for a proportional share of the portfolio’s remaining assets.” One possibility is that selected portfolio sales are being used to test liquidity and determine which assets could be included in a cash tender—and which might be left behind. That is my interpretation, not an announced Board plan.
As I have written, I believe that ASA must not delay, but offer shareholders an exit at NAV now. Importantly, the Board must not restructure the Fund before allowing investors to exit. It’s in Saba’s interest to potentially do this later, and they may well want to participate in the tender offer themselves (so that they can redeploy their assets for future activism), but they also need the voting power of their shares to support their agenda.
I am not writing this from the sidelines. I own more than 300,000 ASA shares, or about 1.7% of the Fund. After my resignation as COO of ASA, I no longer have to make public filings about my personal transactions in ASA. If the portfolio is “coasting along” and a tender offer is forthcoming, I am currently comfortable holding my nose and continuing to hold my shares. With the discount widening, the upside potential from a tender offer is increasing. Shame on the Board, though, that they have let it come to this stage and not already offered shareholders an exit and informed shareholders of their plans. Saba likes to portray itself as acting in the interest of shareholders, closing discounts. As this episode at ASA should make abundantly clear, Saba seemingly couldn’t care less about other investors, but does like the prospect of amassing more assets to increase its management fees.
USD/CAD is rising again as oil price decline adds pressure on the loonie, but there's much more that could define its trajectory. The USD/CAD has been going up for the last three days, getting close to the 1.4050–1.4065 range again. The main reason the Canadian dollar weakened recently was a big drop in global oil prices, but the connection between the US and Canadian economies is about more than just energy.
What Is Driving USD/CAD Momentum? As a major net exporter of crude oil, Canada’s currency is heavily tied to global energy benchmarks. With West Texas Intermediate (WTI) and Brent crude experiencing downward pressure amid global demand concerns, reduced energy export revenues directly diminish CAD sentiment.
Market analysis suggests that the pair’s momentum reflects a broader consolidation pattern. This pattern is influenced by differing economic performance between the U.S. and Canada.
While U.S. consumer spending and service sector indicators have shown continued underlying strength, Canada’s domestic economy is experiencing tighter credit conditions for consumers and slower job market growth.
Weak U.S. economic data and diminishing expectations of immediate interest rate hikes by the Federal Reserve have limited further appreciation of the USD/CAD. This has resulted in a steady but not rapid upward trend for the pair, currently around the 1.4080 level.
Traders are paying close attention to the upcoming US employment and services data. If this data confirms continued strength in the US economy, it could lead to a bigger difference in monetary policy. On the other hand, rising oil prices or a general market optimism would benefit the Canadian dollar. Global political news could also quickly reverse oil’s recent decline.
Interest Rates, Hold Sway Monetary policy differences have been a more consistent influence than oil prices in recent months. The Federal Reserve has maintained a higher interest rate policy compared to the Bank of Canada, which has increased demand for U.S. assets and put downward pressure on the Canadian dollar.
The difference in yields continues to favor the U.S. dollar, and markets are still evaluating the likelihood of further tightening by the Fed against potential adjustments to Canadian interest rates.
Trade relationships also play a role. New U.S. tariffs on certain Canadian goods and the ongoing status of the CUSMA trade agreement create uncertainty for Canadian exporters. Canada’s recent trade surplus has been partly due to a weaker currency and energy exports, but sustained tariff pressure or a slowdown in U.S. demand could diminish these benefits.
Near-Term and Medium-Term Outlook In the short term, market attention will remain highly focused on weekly crude oil inventory reports and key economic data releases from both countries, including U.S. non-farm payrolls and Canadian employment figures.
Looking further ahead, the direction of monetary policy will be the primary driver. The Bank of Canada has adopted a cautious stance on domestic growth, leaving room for potential interest rate adjustments if economic momentum slows.
In contrast, market expectations regarding the Federal Reserve’s interest rate path suggest that U.S. yields may remain relatively elevated for an extended period. This ongoing difference in yields supports the U.S. Dollar, making significant pullbacks in USD/CAD unlikely without a substantial recovery in commodity prices.
How do crude oil price movements directly impact the Canadian dollar?
Because crude oil is Canada’s primary export, declining oil prices reduce export revenues, dampening demand for the Canadian currency.
How does central bank policy divergence affect the medium-term outlook for USD/CAD?
Higher relative U.S. interest rates create favorable yield spreads for the greenback, capping potential Canadian dollar strength over coming months.
How might trade policy affect the pair ahead?
New U.S. tariffs and uncertainty around the CUSMA agreement could weigh on Canadian exports, potentially supporting USD/CAD if unresolved in the coming months.
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Silver (XAG/USD) has found some resistance at the $61.90 area on Wednesday, before pulling back to $61.24 at the moment of writing, but remains above the top of the last four weeks’ range, at the $60.90 area. The white metal appreciates for the second consecutive day, supported by lower US Treasury yields, as soft US data and lower Oil prices have dampened expectations of immediate Federal Reserve rate hikes.
Analysts at MUFG observe that the US Dollar has faced renewed selling since last week’s FOMC meeting, with the “dollar index back below the 100.00-level after hitting a high at 101.64 last week.” They highlight this pullback as evidence that the latest bout of Dollar weakness has extended in the wake of the policy decision.
On Tuesday, US Factory Orders and JOLTS Job Openings missed expectations, and investors pared back hopes of a quarter-point rate hike in September to 58% from 67% a day before, according to data by the CME Group's Fed Watch Tool. The market will be attentive to the US ADP employment report due later on Wednesday and, above all, to the Nonfarm Payrolls release on Friday, to confirm those views.
Technical Analysis: A bullish Head & Shoulders pattern in progress
XAG/USD trades at $61.35 at the time of writing, on track for a nearly 6% rally over the last two days. Price action has breached the neckline of a bullish Head and Shoulders (H&S) pattern at the mid $59.00 highlighting a constructive near-term bias. Bulls, however, must breach July's top, at $63.12, to confirm a trend shift.
Momentum indicators in the 4-hour chart are supportive. The Relative Strength Index (14) hovers near 68, flirting with overbought territory, which warns about the possibility of a bearish correction. The Moving Average Convergence Divergence (MACD) indicator remains positive and continues to edge higher, reinforcing the bullish tone.
On the topside, above session highs at $61.90, the next target is the mentioned July's top, at $63.12. Further up, the H&S' measured target is around $65.65. On the downside, immediate support emerges at session lows, around $59.35, which is also the headline of the H&S formation, ahead of the late-July lows at the $56.65 area.
(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.
The Euro (EUR) trades 0.15% higher at around 1.1550 against the US Dollar (USD) during the European trading session on Wednesday. The major currency pair gains as the US Dollar faces selling pressure ahead of a busy North American session.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.15% lower to near 99.70.
Markets eye US data and Fed speakers amid mixed policy signalsAnalysts at Danske Bank note that attention today will center on a potential SOH deal announcement alongside key US data releases, including July private sector employment from ADP and the July reading of the ISM Services index. They point out that "ADP's weekly estimates have pointed towards cooling employment growth from June," while the ISM Services print will be watched closely after "the earlier flash PMI pointing to an uptick in business activity."
On the policy front, Danske highlights a busy slate of Fed communication, with "the Fed's Cook (voter, neutral) on the wires in the evening, while Daly (non-voter) is scheduled to deliver keynote remarks overnight into Thursday." The bank also underscores the divergence in recent Fed commentary: Kansas City Fed's Schmid, described as a "non-voter, hawk," argued that monetary policy is "not yet restrictive given strong demand and investment," signaling that "further tightening may be needed." In contrast, Philly Fed's Paulson, a "voter, dove," pushed back against rapid rate hikes, saying policy is likely already "mildly restrictive" and that it "was not a close call to keep rates steady (in July)."
On the Euro front, investors seek fresh cues regarding the European Central Bank’s (ECB) interest rate expectations. Analysts at Deutsche Bank said in a note that ECB September hike pricing is around 90%.
EUR/USD technical analysis
EUR/USD trades higher at around 1.1550. The pair trades close to the downward resistance trend line and above the 20-day exponential moving average (EMA) at 1.1462, which collectively suggests a constructive near-term bias.
Momentum aligns with this view, as the Relative Strength Index (RSI) at 63 is pushing into bullish territory without yet signaling extreme overbought conditions.
On the downside, immediate support is at the 20-day EMA near 1.1462, where buyers would be expected to re-emerge on a deeper pullback. Below that, the pair could extend the decline towards the July 28 low at 1.1353. Looking up, the pair could extend the advance towards 1.1600 if it manages to break above the downward-sloping trendline.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator ADP Employment Change The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.
Next release: Wed Aug 05, 2026 12:15
Frequency: Monthly
Consensus: 70K
Previous: 98K
Source: ADP Research Institute
Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.
GBP/USD Price Forecast: Trades around 1.3450; bulls retain control above 100-hour SMAThe GBP/USD pair gains follow-through positive traction for the second straight day and sticks to modest intraday gains through the first half of the European session on Wednesday. Spot prices, however, lack bullish conviction and currently trade just above mid-1.3400s, up less than 0.10% for the day.
The latest optimism over a diplomatic resolution to end the five-month-old war in the Middle East and the reopening of the Strait of Hormuz dragged crude oil prices to a four-week low, easing inflation fears. Traders were quick to react and trimmed their bets for an imminent Fed rate hike. This, in turn, undermines the safe-haven US Dollar (USD), which is seen acting as a tailwind for the GBP/USD pair. Read more...
British Pound grinds higher above 1.3450 ahead of US ADP Employment releaseThe GBP/USD pair posts modest gains near 1.3455 during the early European session on Wednesday, bolstered by softer US economic data and cooling US-Iran tensions. Traders brace for the US ADP Employment and ISM Services Purchasing Manager Index (PMI) reports, which are due on Wednesday. Markets might turn cautious later this week ahead of the US July jobs data.
The US JOLTS Job Openings declined to 7.359 million in June, compared to the 7.537 million openings reported in May, the US Bureau of Labor Statistics showed on Tuesday. This figure came in below the market expectation of 7.4 million. Read more...
British Pound weakens as US Dollar gains despite easing safe-haven demandGBP/USD edges lower after registering modest gains in the previous day, trading around 1.3450 during the Asian hours on Wednesday. The currency pair came under selling pressure as the US Dollar (USD) gained momentum, bolstered by a rebound in the benchmark 10-year US Treasury yield, which had dipped toward 4.61% on Tuesday. That initial slide in yields was driven by falling energy prices, which helped cool inflation fears and tempered expectations of a hawkish response from the Federal Reserve (Fed).
However, the Greenback may face further challenges due to easing safe-haven demand amid building diplomatic momentum around a potential agreement to reopen the Strait of Hormuz. Qatari officials announced on Tuesday that an interim proposal had been drafted, with both Washington and Tehran signaling tangible progress toward restoring access to the critical maritime transit route. This diplomatic breakthrough follows US President Donald Trump’s decision to suspend planned military strikes against Iran, choosing instead to give negotiations space while maintaining his call for the immediate reopening of the waterway. Read more...
USD/JPY fell to 157.47 on Wednesday, with the Japanese yen pausing its recent strengthening. US Treasury Secretary Scott Bessent reaffirmed Washington’s support for Japan following the historic joint currency intervention.
Over three sessions, the yen appreciated by nearly 5% after coordinated purchases by Tokyo and Washington, marking the largest such operation in decades. Both countries have declared their readiness to intervene again if necessary.
According to the Bank of Japan, Tokyo deployed approximately 5.33 trillion yen during Friday’s operations to support the currency. The previous day, media reports indicated that intervention volumes had reached a record 8.45 trillion yen.
In July 2026, the yen had fallen to four-decade lows, weighed down by rising energy prices, budget risks, and a wide interest rate differential. In parallel, real wages in Japan rose for the sixth consecutive month in June, strengthening the case for further rate hikes by the Bank of Japan.
Technical Analysis
On the H4 USD/JPY chart, the market is forming a consolidation range around the 157.17 level, currently extending up to 157.90. A move lower towards 157.17 is expected today, followed by a move higher to 159.10. The MACD indicator supports this scenario, with its signal line below zero and pointing upwards.
On the H1 chart, USD/JPY has completed a downward move to 156.22, followed by a rise to 157.90. A move lower towards at least 157.17 is expected next, followed by a move higher to 159.10. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing downwards towards 20, indicating short-term downside pressure.
Conclusion USD/JPY has stabilised after a historic joint intervention by Japanese and US authorities, which drove a nearly 5% appreciation in the yen over three sessions. Both countries have signalled readiness to act again if needed, with Tokyo deploying record intervention volumes. The yen had previously fallen to multi-decade lows due to high energy prices, fiscal concerns, and interest rate differentials. However, rising real wages and signals from the Bank of Japan may support further yen strength. Technically, USD/JPY appears to be consolidating around 157.17, with a potential pullback towards this level before resuming an upward move to 159.10. The pair’s direction remains uncertain, hinging on further intervention, Bank of Japan policy signals, and global risk sentiment.
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Gold (XAU/USD) climbs to a one-month high on Wednesday as renewed optimism over the reopening of the Strait of Hormuz sends Oil prices lower. At the time of writing, XAU/USD trades around $4,155, up nearly 1.90% on the day.
US President Donald Trump said Washington had "very good discussions" with Iran during day-long negotiations on Tuesday. Trump added that the Strait "is going to be open very soon."
Axios reported that the United States, Iran and Oman are nearing an interim deal that could be announced as early as Wednesday. The proposed deal would establish a temporary 60-day arrangement between Iran and Oman to restore shipping.
Strategists at ING note that “lower energy prices have eased some inflation concerns, offering a more supportive backdrop for bullion,” even as investors continue to weigh the policy outlook. They point out that “markets continue to assess the outlook for US monetary policy following last week's Federal Reserve meeting,” leaving Gold “caught between improving geopolitical sentiment and ongoing uncertainty over US interest rates.”
Can Gold move higher from here?Despite improving market sentiment, the US Dollar (USD) is showing only limited weakness as traders await concrete signs that shipping through the Strait will resume. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades flat around 99.85.
US Treasury yields have pulled back from recent highs but remain elevated as broader inflation concerns support expectations that the Federal Reserve (Fed) will keep interest rates higher for longer. All this could keep a lid on Gold’s upside.
A further decline in Oil prices, which could weaken hawkish Fed expectations, may be needed for the yellow metal to extend its rally.
Traders now look ahead to US labour market data, including the ADP Employment Change report later on Wednesday and Friday’s Nonfarm Payrolls (NFP) report, for fresh clues about the Fed’s next move. According to the CME FedWatch Tool, markets still price in around a 56% chance of a September rate hike, down from about 67% a day earlier.
Technical analysis: Buyers challenge the 50-day SMA
On the daily chart, XAU/USD has pushed back above the 21-day Simple Moving Average (SMA) at $4,064, hinting at a constructive near-term tone, but it remains capped just beneath the 50-day SMA at $4,160, keeping the broader stance neutral rather than outright bullish.
Momentum is improving, with the Relative Strength Index (RSI) around 55 and the Moving Average Convergence Divergence (MACD) in positive territory, suggesting buyers are attempting to regain control while still facing near-term trend resistance.
On the topside, immediate resistance is located at the 50-day SMA at $4,160, followed by the horizontal barrier at $4,200. A daily close above this zone would open the way toward the 100-day SMA near $4,398. On the downside, initial support is provided by the 21-day SMA at $4,064, ahead of the psychological and chart floor at $4,000, where a break lower would signal a deeper corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Nonfarm Payrolls FAQs Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
A sustained move over the 50-day moving average will indicate the buying is getting stronger. This could lead to a test of the next swing top at $63.28. Taking out this top would put the 200-day moving average at $70.92 on the radar.
On the downside, a sustained move back under the major 50% level at $60.835 will signal the return of sellers. If this creates enough downside momentum, look for a near-term pullback to $58.00.
What to Watch Silver needs crude staying lower, yields staying contained and the dollar staying under pressure. All three lined up this week and that is why the move has been fast. If any one of them reverses, the rally gets tested.
Friday’s jobs report can either extend this trade or kill it. A weak number with softer wages keeps the dollar unwind going and gives buyers room to push toward the 50-day moving average. A strong print with firm hiring, hands Schmid and the rest of the hawks exactly what they need, and the rate trade reassembles.
The swing chart trend has changed to up but buyers are chasing a macro relief trade, not a structural shift. They have momentum as long as the data cooperates. The moment it stops cooperating, sellers have a clean level to come back in at.
USD/JPY fell to 157.47 on Wednesday, with the Japanese yen pausing its recent strengthening. US Treasury Secretary Scott Bessent reaffirmed Washington’s support for Japan following the historic joint currency intervention.
Over three sessions, the yen appreciated by nearly 5% after coordinated purchases by Tokyo and Washington, marking the largest such operation in decades. Both countries have declared their readiness to intervene again if necessary.
According to the Bank of Japan, Tokyo deployed approximately 5.33 trillion yen during Friday’s operations to support the currency. The previous day, media reports indicated that intervention volumes had reached a record 8.45 trillion yen.
In July 2026, the yen had fallen to four-decade lows, weighed down by rising energy prices, budget risks, and a wide interest rate differential. In parallel, real wages in Japan rose for the sixth consecutive month in June, strengthening the case for further rate hikes by the Bank of Japan.
Technical analysis
On the H4 USD/JPY chart, the market is forming a consolidation range around the 157.17 level, currently extending up to 157.90. A move lower towards 157.17 is expected today, followed by a move higher to 159.10. The MACD indicator supports this scenario, with its signal line below zero and pointing upwards.
On the H1 chart, USD/JPY has completed a downward move to 156.22, followed by a rise to 157.90. A move lower towards at least 157.17 is expected next, followed by a move higher to 159.10. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing downwards towards 20, indicating short-term downside pressure.
ConclusionUSD/JPY has stabilised after a historic joint intervention by Japanese and US authorities, which drove a nearly 5% appreciation in the yen over three sessions. Both countries have signalled readiness to act again if needed, with Tokyo deploying record intervention volumes. The yen had previously fallen to multi-decade lows due to high energy prices, fiscal concerns, and interest rate differentials. However, rising real wages and signals from the Bank of Japan may support further yen strength. Technically, USD/JPY appears to be consolidating around 157.17, with a potential pullback towards this level before resuming an upward move to 159.10. The pair’s direction remains uncertain, hinging on further intervention, Bank of Japan policy signals, and global risk sentiment.
Gold is pushing higher for the 3rd day in a row, which we have not seen for 5 weeks.
Gold beat minor trend line resistance at 4090/4100 to target last week's high at 4119/4120.
We are testing minor resistance at the 1 month descending trend line at 4135/4140.
A sustained break above 4140 tests Fibonacci resistance at 4160/4170.
The rally is taking baby steps at the moment as we tackle the minor resistance levels.
I am hoping this is the start of a bullish breakout so maybe shorts are too risky.
A break above 4175 should be a medium term buy signal and hopefully we can run up quite quickly - initially to 4210/4215.
For now I will hope that this is the start of a bull run and therefore I will suggest buying at minor support at 4095/4090 & longs need stops below 4085.
Gold (XAU/USD) has accelerated its recovery on Wednesday, favoured by a softer US Dollar as lower Oil prices and downbeat US macroeconomic data cooled market expectations of Federal Reserve (Fed) rate hikes on Tuesday. This has enticed Gold buyers to push the precious metal above the top of a triangle pattern, at the $4,125 area, in a move that is still to be confirmed.
Bullion is drawing support from lower US Treasury yields, following softer-than-expected US Job Openings and Factory Orders figures released on Tuesday. Meanwhile, the decline in Oil prices, with the US benchmark West Texas Intermediate (WTI) trading $10 below last week's highs, has eased concerns about the inflationary impact of energy prices. In this context, investors have cut back bets of a Fed rate hike in September to 58% from 67% on Tuesday, according to data by the CME’s Fed Watch Tool.
Technical Analysis: Gold needs to break $4,220 to confirm a deeper correction
XAU/USD trades at $4,161, holding a constructive near-term bias after reaching one-week highs above the top of a descending triangle. Momentum indicators in 4-hour charts endorse the positive view, with the Relative Strength Index (14) around 55 hinting at a building bullish while the Moving Average Convergence Divergence (MACD) slightly above zero strengthens the case for a moderate upside bias.
Bulls, however, will have to clear the horizontal barrier around $4,220 (June 22 highs) to confirm a bullish reversal and set sail for the mid-June highs, at $4,380.
A bearish reaction, on the other hand, is likely to find support at the $4,000 psychological level, although the key support area lies at the $3,945 area, the bottom of the mentioned triangle. A confirmation below here negates the bullish view and brings the late October 2025 lows, at $3,886, into play.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
The Euro took advantage on the Intervention with the Yen to test the downtrend as we see from the chart, which in return pushed for a correction
A trading zone between 1.1435 and 1.1560 could hold prices until one of the boundaries break.
Above 1.1560 could open the door towards 1.1685 and 1.1795.
Below 1.1435 more of a drop toward 1.1320 and 1.1210 is likely.
SUPPORT RESISTANCE LEVEL1 1.435-80 1.1560 LEVEL2 1.1320 1.1685 LEVEL3 1.1210 1.1795 Head of Technical Analysis at Orbex, Rami Abu Draa
holds a bachelor's degree in Banking, Finance and Economics. A professional trader and mentor with over 10 years of industry experience, Rami is passionate about sharing his knowledge with Orbex clients from basic to advanced concepts of Technical Analysis, Investment psychology and Investment/Trading methodologies. He is able to combine fundamental and technical principles to deliver a unique perspective on the markets that enables Orbex traders to identify high-probability trading opportunities.
Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius
Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
The Yen gave back some of its recent advance that was triggered by US and Japanese intervention.
As we see over the chart, we could see wide range of trading, first between 155.00 and the resistance of 158.05, as the market demands a rebound.
As long as the market remains below 160.85, the drop scenario could return.
When the Bank of Japan began the Intervention, the peak was around 163.97 which could sustain as resistance.
If the Yen retreats again, traders could expect another Intervention.
SUPPORT RESISTANCE LEVEL1 155.00 158.05 LEVEL2 152.10-30 160.85 LEVEL3 145.00 163.80 Head of Technical Analysis at Orbex, Rami Abu Draa
holds a bachelor's degree in Banking, Finance and Economics. A professional trader and mentor with over 10 years of industry experience, Rami is passionate about sharing his knowledge with Orbex clients from basic to advanced concepts of Technical Analysis, Investment psychology and Investment/Trading methodologies. He is able to combine fundamental and technical principles to deliver a unique perspective on the markets that enables Orbex traders to identify high-probability trading opportunities.
Orbex Group Limited is the holding company of Orbex Global Limited, Orbex Limited is an affiliate with Orbex Global Limited. Orbex Global Limited is authorized and regulated by Mauritius Financial Services Commission “FSC” (View License). Orbex.com is owned by Orbex Group Limited and is operated by Orbex Global Limited with registered address: Ground Floor, The Catalyst, Silicon Avenue, 40 Cybercity, 72201 Ebène, Republic of Mauritius
Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex Global does not offer its services to residents of certain jurisdictions such as Mauritius, USA, and North Korea.
