Forex News
- USD/CAD advances for a fifth straight day as the US Dollar remains firm ahead of the Fed decision.
- WTI Oil trades around $100, limiting losses in the commodity-linked Canadian Dollar.
- The 10-year US Treasury yield rises above 5%, reaching its highest level since 2007.
USD/CAD extends its advance for a fifth consecutive day on Tuesday, hovering near a two-week high as the US Dollar (USD) stays firmly supported ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday. However, rising Oil prices offer some support to the commodity-linked Canadian Dollar (CAD), keeping the pair’s gains contained. At the time of writing, USD/CAD trades around 1.3913, little changed on the day.
Markets are almost fully pricing in a Fed rate hike on Wednesday as the energy shock stemming from the war in the Middle East complicates the central bank’s task of bringing inflation sustainably back toward its 2% target. Headline Consumer Price Index (CPI) inflation stood at 3.4% YoY in August, while the Producer Price Index (PPI) accelerated to 5.4%.
Reflecting these concerns, the benchmark 10-year US Treasury yield climbed above 5% on Tuesday, reaching its highest level since 2007. Hawkish Fed expectations and elevated Treasury yields keep the US Dollar supported. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades near 99.60, close to a two-week high.
With a quarter-point Fed hike largely priced in, attention will turn to the updated economic projections and comments from Fed Chairman Kevin Warsh, particularly how policymakers assess Oil-driven inflation as the war in the Middle East shows no signs of ending and could keep energy prices elevated for the foreseeable future.
West Texas Intermediate (WTI) Oil trades above $100 a barrel, around levels last seen on May 21. Higher Oil prices typically support the Canadian Dollar because Canada is a major crude exporter. However, the Loonie struggles to capitalise as a firmer US Dollar and hawkish Fed expectations remain the stronger forces, while the Bank of Canada’s (BoC) steady policy approach leaves the interest rate gap tilted in favour of the Greenback.
Strategists at Scotiabank note that the latest Canadian CPI release was “broadly in line with expectations” and “did little for the CAD or for short-term rates,” but they stress that “toasty underlying trends in core measures maintain the focus on price risks and the potential for the BoC to start normalizing still accommodative monetary policy later this year.”
On the technical side, they “continue to note a significant resistance zone between the low/mid 1.39s, however, defined by trend resistance, the 40-and 100-day moving averages, retracement resistance, and the early September high,” while flagging that “initial USD support is 1.3825/30 and 1.3730/60.”
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- Silver edges higher on Tuesday after recently coming under pressure from rising bond yields.
- Investors limit their exposure ahead of Wednesday’s monetary policy decision.
- Higher energy prices fuel inflation concerns and reinforce expectations of tighter monetary policy.
Silver (XAG/USD) trades around $63.40 on Tuesday at the time of writing, up 0.28% on the day. The white metal attempts to stabilize as investors refrain from taking large positions ahead of the United States (US) Federal Reserve (Fed) monetary policy decision on Wednesday.
Silver continues to face a challenging environment due to a firm US Dollar (USD) and elevated US Treasury yields. Higher yields increase the opportunity cost of holding non-yielding assets such as precious metals and could therefore limit attempts by XAG/USD to extend its recovery.
Bond yields are also rising across several major economies as the energy shock caused by the war in the Middle East revives inflation concerns. Higher Oil prices are making the task more difficult for central banks seeking to bring inflation sustainably back toward their targets.
In the United States, the Consumer Price Index (CPI) rose 3.4% YoY in August, while the Producer Price Index (PPI) accelerated to 5.4% from 4.8% in July. These figures, combined with recent Fed communication emphasizing the need to contain inflationary pressures, reinforce expectations of an interest rate hike on Wednesday.
Much of the risk surrounding a hawkish Fed decision, however, appears to be already priced in. Investors’ attention is therefore likely to focus primarily on the central bank’s updated economic projections and comments from Fed Chair Kevin Warsh regarding the future path of interest rates.
Silver could remain under pressure if the Fed signals that a September rate hike marks the beginning of a more sustained tightening cycle. Such a scenario could push US Treasury yields higher and support the US Dollar, two factors that are generally negative for the white metal.
Conversely, a less hawkish-than-expected message could offer some relief to Silver, particularly if it triggers a decline in bond yields and the US Dollar. The market therefore remains particularly sensitive to any guidance the Fed provides regarding its upcoming policy decisions.
Beyond monetary policy, the rise in global bond yields also reflects increasing government financing needs and concerns over fiscal sustainability. Over the longer term, these worries could support demand for precious metals as alternatives to sovereign assets, although the interest rate outlook remains the main driver for Silver for now.
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.
- DJIA slides just under 52,000, down around 450 points, as yields top 5% before the Fed
- Fed set to hike a quarter-point Wednesday, first since July 2023, priced at 92.5%
- Treasury buybacks tripled to $6 billion, 10-year up 0.4 of a point since August 19
The Dow Jones Industrial Average trades just under 52,000, down around 450 points, a day before the Fed's first expected hike since July 2023. Bets in the futures market put the odds of a quarter-point at 92.5%, so Wednesday's vote is not the news. The rate that moved is the yield on the 10-year Treasury, the price the government pays to borrow for a decade. It touched 5.04% on Tuesday, its highest since 2007, and it is the rate the Dow's companies and their customers borrow at. The Fed sets the other one.
A third of a point from the market, a quarter-point from the Fed
The Fed's rate is what banks pay for money overnight, and on Wednesday it is expected to move from 3.50-3.75% to 3.75-4.00%. The 10-year is the one a mortgage, a car loan and a corporate bond are priced off, not the Fed's. It has risen five sessions in a row and close to a third of a point in four weeks, and the committee has not voted yet.
That splits the index. The quarter-point is a bank event first. JPMorgan (JPM) and Goldman Sachs (GS) pay and charge the overnight rate, and because the index weights by share price, the two of them are about a sixth of it.
The third of a point is a customer event for the other 28. It sets what their customers pay to finance a house or a factory, and the customers have been paying it since August. Wednesday's hike comes with a statement and a press conference. The bond market's came without either.
A month of Treasury buybacks bought a higher yield
The Treasury said on August 19 that it would at least double its buybacks, the operations in which it buys back its own 10- to 30-year debt, from $2 billion each to $4 billion. The 10-year yield fell to 4.64% that afternoon. On September 9 it raised that week's operation to $6 billion, the yield rose to 4.85% the same day, and the index lost about 400 points.
The September 10 operation took $5.19 billion of the $10.49 billion holders put up for sale, because the Treasury would not pay the prices asked. Treasury Secretary Scott Bessent said last week that the Treasury market is in very good shape and that he is the house now, a line he later softened. The 10-year touched 5.04% on Tuesday, the morning he was due before the House Financial Services Committee. The rate the buybacks were meant to lower is the one the index's customers pay.
The Fed will answer a shut pipeline by charging banks more overnight
The hike lands on an economy whose New York Fed factory survey fell to 7.6 on Tuesday, against a forecast of 14.75 and 20.6 in August. Thursday's Philadelphia version is forecast to fall from 47.4 to 30.5. Those surveys ask factories whether orders are rising, and orders are what Caterpillar (CAT), about a tenth of the index at its share price, and 3M (MMM) sell into.
Consumer prices rose 3.4% in the year to August, with fuel doing much of the work, and that is the inflation the hike answers. West Texas Intermediate (WTI) Crude Oil trades near $104.00 and Brent near $108.00, a cost line for every member of the index except Chevron (CVX). Saudi Arabia shut the pipeline that carries its Crude Oil around the Strait of Hormuz after a strike it blames on Iran-backed groups in Iraq, and some Saudi sources put the repair at more than a month. The vote takes an afternoon.
Wednesday's hike was written down in June
The decision lands at 18:00 GMT on Wednesday, with the forecast taking the top of the Fed's range to 4.00% from 3.75%. It would be the first hike of the Chair's tenure and the first increase since 2023 in what the index's two banks pay for overnight money. Futures have a second hike by December, a third by March, and the rate at 4.25% or higher through the end of 2027.
The committee's June projections, the chart of dots showing where each member expects the rate to be, already had it. The median for the end of 2026 was 3.8%, with 3.6% for the end of 2027, and nine of the 18 who submitted one saw at least one hike this year. The chart the market has now overtaken has 18 dots and no Chair, because he chose not to submit one.
Retail sales at 12:30 GMT the same day are forecast up 0.8% after a 0.6% fall, counted in dollars. The control group, which strips out fuel, cars and building materials, fell 0.4% in July and carries no forecast. Thursday's housing starts, forecast at 1.31 million against 1.239 million, are the first August read on the customers of Home Depot (HD). A Fed governor speaks at 07:30 GMT on Friday, and August industrial production follows at 13:15 GMT, forecast up 0.3%.
Levels and bias
Resistance: Today's high just under 52,400 is the first hurdle. The 50-day Exponential Moving Average (EMA) near 52,700 is the cap, and the index has now spent four sessions failing to get back above it. 53,000 is the next one, last traded on September 8.
Support: Today's low just under 51,900 is the first floor, and it already sits below Thursday's. The late-July base just above 51,500 is the one that matters, and 51,000 is the next round number beneath it.
Bias: Bearish while the 50-day EMA near 52,700 caps, with the late-July base just above 51,500 the first objective and 51,000 the second. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, reads near 36 and is still pointing down, so the selling has not run out. A daily close back above the 50-day EMA voids the case.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
- GBP/USD slips as Oil-supply fears revive Dollar-haven demand.
- Ten-year yield tops 5%, reinforcing Fed hike conviction.
- Softer UK jobs data supports BoE hold expectations.
The Pound Sterling (GBP) edges lower by some 0.07% against the US Dollar (USD) on Tuesday, with the latter enjoying inflows due to its haven status amid fears of a possible Oil supply shortage. The GBP/USD pair trades at 1.3487, after peaking at around 1.3505.
Sterling slips as haven Dollar demand builds before Fed, BoE
The Middle East conflict continues to escalate and a quick resolution seems far from happening. Both crude Oil benchmarks, Brent and West Texas Intermediate (WTI), rose by over 2.40% and 1.10%, respectively, triggering a jump in US Treasury yields, with the 10-year rising to 5.041%, a level last seen in 2007.
Investors reacted, sending bond yields higher, ignited by fears of a second round of inflation. Meanwhile, on Wednesday, the Federal Reserve (Fed) is expected to increase rates by 25 basis points, with odds hovering at 95%, according to Prime Terminal.
Consequently, the Greenback rises. The US Dollar Index (DXY), which measures the basket of six currencies versus the buck, is up 0.16% at 99.62.
US data reflected the strength of the labor market, with the ADP Employment Change 4-week average rising 16.25K above last week’s print, revised upward to 12.25K.
In the UK, jobs data was weaker, with wages outpacing vacancies, pushing vacancies to a near six-year low. Meanwhile, wages excluding bonuses rose by 3.5% in the three-month rollover to July. Given the backdrop, the Bank of England is expected to hold rates unchanged on Thursday. However, money markets are pricing in one hike towards the end of 2026, followed by another the following year.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3478. Near-term bias is neutral to slightly bearish as spot slips just under the clustered simple moving average composite around 1.3483, while still leaning on an uptrend support line near 1.3476. The Relative Strength Index (14) has eased toward the low-40s, suggesting fading bullish momentum, and the break levels of the prior downtrend and current uptrend now frame price action in a tight range.
On the topside, initial resistance is the simple moving average cluster around 1.3483, with a more distant hurdle at the former uptrend break near 1.3691. On the downside, immediate support is aligned with the uptrend break zone at 1.3476, followed by prior downtrend break levels around 1.3460 and 1.3351, where buyers would be expected to re-emerge if the pair extends its pullback.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.17% | 0.50% | 0.13% | 0.19% | 0.40% | 0.20% | |
| EUR | -0.07% | 0.10% | 0.41% | 0.06% | 0.11% | 0.33% | 0.13% | |
| GBP | -0.17% | -0.10% | 0.31% | -0.06% | 0.01% | 0.21% | 0.03% | |
| JPY | -0.50% | -0.41% | -0.31% | -0.37% | -0.31% | -0.11% | -0.30% | |
| CAD | -0.13% | -0.06% | 0.06% | 0.37% | 0.06% | 0.27% | 0.07% | |
| AUD | -0.19% | -0.11% | -0.01% | 0.31% | -0.06% | 0.21% | -0.00% | |
| NZD | -0.40% | -0.33% | -0.21% | 0.11% | -0.27% | -0.21% | -0.18% | |
| CHF | -0.20% | -0.13% | -0.03% | 0.30% | -0.07% | 0.00% | 0.18% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
- Gold finds some support after falling to a more-than-one-month low earlier this week.
- Traders avoid large directional bets ahead of Wednesday’s Fed decision and updated economic projections.
- XAU/USD remains technically vulnerable while trading below the 100-day and 200-day SMAs.
Gold (XAU/USD) trims part of its intraday decline on Tuesday. However, a stronger US Dollar (USD), elevated US Treasury yields and US Federal Reserve (Fed) interest rate hike expectations create a challenging backdrop for the non-yielding metal, limiting the upside ahead of the Fed’s monetary policy decision on Wednesday.
At the time of writing, XAU/USD trades near $4,290, hovering above the more-than-one-month low of $4,253 touched on Monday.
US Treasury yields climbed to fresh multi-year highs across the curve on Tuesday. The benchmark 10-year yield reached 5.04%, its highest level since 2007, before easing back toward 4.99%. Higher yields support demand for the US Dollar while increasing the opportunity cost of holding Gold, which offers no interest.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 99.60 near two-week highs.
The bond sell-off is not limited to the United States, with borrowing costs across several major economies climbing to multi-year highs. Much of the move stems from the energy shock caused by the war in the Middle East, which is adding to inflation concerns and reinforcing expectations of tighter monetary policy.
Since the outbreak of the war, Gold has reacted more strongly to shifts in interest rate expectations than to geopolitical developments. The Fed has kept interest rates unchanged so far, but high Oil prices are making it harder to bring inflation back to the central bank's 2% target.
Headline Consumer Price Index (CPI) inflation stood at 3.4% YoY in August, while the Producer Price Index (PPI) accelerated to 5.4% from 4.8% in July. Recent Fed communication has also centred on the need to bring inflation back to target. As a result, markets widely expect the central bank to deliver its first interest rate hike since 2023 when it concludes its two-day monetary policy meeting on Wednesday.
Much of the hawkish Fed risk appears to be priced in. However, Gold could remain vulnerable if policymakers signal that September marks the beginning of a broader tightening cycle. Such a message could extend the rise in Treasury yields and provide additional support to the US Dollar. Attention will therefore centre on the updated economic projections and Fed Chairman Kevin Warsh’s comments on the path of interest rates.
At the same time, the rise in global bond yields is not driven by monetary policy expectations alone. Heavy government borrowing and concerns over fiscal sustainability across major economies are also contributing to the sell-off. These factors could eventually revive demand for Gold as an alternative store of value, especially if rising yields begin to signal weakening confidence in government debt. In the meantime, central bank buying, retail investment and demand through Gold-backed exchange-traded funds (ETFs) remain steady sources of underlying support.
Technical analysis: Gold faces further downside risks below key SMAs, building bearish momentum
On the daily chart, XAU/USD maintains a bearish near-term bias as price holds below the 100-day Simple Moving Average (SMA) and the 200-day SMA. The metal is marginally above the 50-day SMA at about $4,275, which offers tentative support, but a soft Relative Strength Index (RSI) around 43 and a negative, declining Moving Average Convergence Divergence (MACD) histogram suggest increasing bearish momentum and leave the broader recovery vulnerable to further downside.
On the topside, initial resistance is aligned with the 100-day SMA at $4,328, ahead of a more substantial cap at the 200-day SMA near $4,539 and the horizontal barrier around $4,700. On the downside, a break below the 50-day SMA at $4,275 would expose the next horizontal floors at $4,150 and $4,000, where buyers are likely to reassess the medium-term trend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- EUR/GBP is struggling to recover, trading below its short- and longer-term moving averages after a sharp drop.
- The Euro is failing to hold gains from last week's European Central Bank rate hike, while a much higher UK rate keeps the Pound firm.
- UK inflation data on Wednesday and Thursday's Bank of England decision are the next tests.
EUR/GBP trades in the mid-0.8500s, unable to reclaim the 0.8600 barrier on Tuesday as the Euro (EUR) has struggled even after the European Central Bank (ECB) raised its three key rates by 25 basis points (bps) on September 10, lifting the deposit rate to 2.50%.
Tuesday's German and Eurozone ZEW sentiment surveys did not help, with the Eurozone economic sentiment gauge falling well short of forecasts.
The Pound is holding firm despite a soft United Kingdom (UK) jobs report. Claimant Count claims rose far more than expected in August and employment growth slowed over the three months to July, yet the wider draw for Sterling is the rate gap.
The next test will be Wednesday's UK inflation report, where headline annual inflation is seen edging up to 3.1% from 2.9%, with services prices still hot. A read at or above forecast would keep the BoE's hawkish minority in play and give the Pound another reason to hold, pressing EUR/GBP back toward the lower end of its range.
The Bank of England follows on Thursday and is widely expected to leave rates unchanged, so the vote split and guidance will matter more than the decision itself.
Short-term technical analysis:
On the 4-hour chart, EUR/GBP trades at 0.8558, keeping a bearish near-term tone as it holds below both the 20-period and 100-period Simple Moving Averages (SMAs) at 0.8572 and 0.8575. A dense band of nearby overhead levels between 0.8559 and 0.8575 suggests rallies are likely to meet supply, while the Relative Strength Index (RSI) slipping toward 35 hints at persistent, though not yet extreme, downside pressure.
On the topside, immediate resistance sits at 0.8559, followed by horizontal barriers at 0.8562 and 0.8565, before the 20-period SMA at 0.8572 and the 100-period SMA at 0.8575 reinforce a broader capping zone. On the downside, initial support comes in at the recent horizontal floor near 0.8554, where a break would expose lower levels and extend the current corrective phase.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Scotiabank strategists Shaun Osborne and Eric Theoret observe USD/JPY trading higher as the Japanese Yen underperforms G10 peers ahead of trade, Consumer Price Index (CPI) and the Bank of Japan (BoJ) decision. A BoJ hike is fully priced, with risks focused on guidance for future moves. They emphasize support around 153 and 152, while identifying 155 as an important resistance level for the pair.
Key levels eyed into BoJ
"A hike is widely expected and fully priced, with risk centered around the central bank’s tone and its guidance on the pace of future hikes with one additional hike almost fully priced before year end."
"The near-term focus remains centered on broader themes including the market tone and the Fed, as market participants balance their attention with domestic developments including the near-term release of trade data (7:50pm ET) and CPI (Friday) ahead of the BoJ policy decision at the end of the week."
"The 155 level remains an important level of anticipated resistance."
"For USD/JPY, we continue to highlight the importance of recent support around 153, with additional support expected closer to 152."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Nomura’s Josie Anderson, George Buckley and Andrzej Szczepaniak say the latest UK labour data show strong private sector pay but softer employment, with payrolls falling and vacancies at their lowest since early 2021. They expect the Bank of England to keep rates unchanged this week, but warn that persistent wage strength and higher energy prices could still force future hikes.
Strong wages, softer jobs, steady BoE
"This report did little to challenge our view that the BoE will leave rates unchanged this week. However, if the pick-up in private sector regular pay growth since the spring persists, it would likely elicit concern among policymakers, as risks of second-round inflation effects from the Iran war will be at the forefront of rate setters’ minds."
"Private sector regular pay rose by 0.3% m-o-m in July, following the upwardly revised 0.45% print in June and above our forecast of 0.2% m-o-m. While still not too far from the 0.2% to 0.25% m-o-m we’d like to see it running at (which was where it was on average in the two decades to 2019), faster wage growth is a key metric to monitor second-round inflation effects."
"On the negative side, payrolls fell by more than we were expecting (-26k versus our forecast of -10k), and there were negative revisions for the previous three months. This series, however, is very prone to revision, so we cannot put too much weight on a single print."
"We expect no change in rates from the Bank of England (BoE) this week. Recent BoEspeak suggests the majority of the MPC will not vote for a hike (we expect another 6-3 vote in favour of rates on hold, with Pill, Greene and Mann continuing to vote for a 25bp rate hike)."
"However, beyond this week’s Bank Rate decision, risks are rising that monetary policymakers may need to raise interest rates in response to higher energy prices. Further strong private sector regular pay growth prints would add to the reasoning for hikes, so they are worth watching for closely."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
UOB’s Quek Ser Leang reports GBP/USD slipped below 1.3475 before rebounding, with intraday trade now expected between 1.3470 and 1.3520. He notes building downside momentum and sees scope for further British Pound (GBP) weakness, though the major support at 1.3410 may not be tested immediately. A break above 1.3540 would signal that 1.3410 is likely out of reach for now.
Pound remains under downside pressure
"24-HOUR VIEW: We expected GBP to “consolidate between 1.3485 and 1.3540” yesterday. Our view was incorrect as GBP fell to a low of 1.3464 before rebounding to close 0.27% lower at 1.3499. The rebound from oversold conditions suggests that instead of continuing to decline, GBP is more likely to trade in a range today, probably between 1.3470 and 1.3520."
"1-3 WEEKS VIEW: Last Friday (11 Sep, spot at 1.3515), we highlighted that “downward momentum is starting to build, and if GBP closes below 1.3495, it will then likely break the next support at 1.3475 as well.” Yesterday, GBP broke below 1.3475 as it fell to a low of 1.3464 before rebounding to close at 1.3499 (-0.27%). While we would have preferred a more decisive close below 1.3495, the price action points to further GBP weakness. That said, the next major support at 1.3410 may not come into view so soon. On the upside, a break above 1.3540 (‘strong resistance’ was at 1.3560 yesterday) would indicate that 1.3410 is out of reach."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- AUD/USD continues to pull back from four-month highs achieved last week..
- Markets lean toward a quarter-point Fed rate hike to 3.75%-4.00% on Wednesday.
- The ADP Employment Change four-week average firmed to 16.25K from 12.25K, adding to the case for a hawkish Fed.
AUD/USD trades near the 0.7120s, down from the four-month highs it set near 0.7200 earlier this month. The US Dollar (USD), tracked by the US Dollar Index (DXY), holds just below the 100.00 mark and is firmer on the day as traders square positions before the main event.
That event is Wednesday's Federal Open Market Committee (FOMC) decision. The Federal Reserve (Fed) has kept its target range at 3.50%-3.75% since December 2025, leaving it unchanged in the previous five meetings. Markets are now leaning toward a 25-basis-point (bps) rise to 3.75%-4.00%, after Chair Kevin Warsh used his Jackson Hole address to warn that inflation had not meaningfully improved and a solid August jobs report followed.
Earlier in the day, the ADP Employment Change four-week average rose to 16.25K, up from 12.25K, pointing to a US jobs market that is holding its footing rather than cooling. It is a second-tier print, but the direction matters as a steadier labor market gives the Fed more room to lift rates and reinforces Chair Kevin Warsh's message that the inflation job is not yet done.
Before the decision lands, US Retail Sales for August print. The number matters for the rate call. A firm read supports the view that the US consumer is holding up and gives the Fed room to move, while a soft one muddies the hawkish case just hours before the statement.
Short-term technical analysis:
On the 4-hour chart, AUD/USD trades at 0.7128, maintaining a bearish near-term tone as it holds below both the 20-period and 100-period Simple Moving Averages (SMA) at 0.7152 and 0.7178, respectively. The pair is stabilizing just above horizontal support at 0.7119, while the Relative Strength Index (RSI) hovers near 30, hinting at stretched downside momentum but not yet signaling a confirmed reversal.
On the topside, immediate resistance emerges at 0.7129, followed by 0.7134 and 0.7141. The 20-period SMA at 0.7152 and the 100-period SMA at 0.7178 reinforce a broader supply zone overhead. On the downside, the first notable support is the horizontal level at 0.7119; a sustained break below this floor would expose further weakness in the pair’s short-term structure.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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