Forex News

• DJIA trades near 53,750, up 1.3%, on track for its best day in a month.
• September hike odds at 50.4% after a Fed governor leans toward a hold.
• ISM services PMI beats at 55.4, prices paid climb to 72.6 from 70.3.

The Dow Jones Industrial Average trades near 53,750, up 1.3% and on track for its strongest session since early August, after a Fed governor said he would be inclined to support holding rates at the September 15-16 meeting if the inflation data due over the next two weeks keep behaving. The tape has treated a conditional as a verdict. Hike odds on the FedWatch tool sit at 50.4% against 49.6% for a hold, down from above 60% on Wednesday, and the 10-year Treasury yield has backed off the multi-year high it set the day before.

The market bought the first half of the sentence

The first half of the governor's sentence is that recent data finally show signs of disinflation, with the three-month annualized rate on the Personal Consumption Expenditures (PCE) gauge down to about 3.05% from 4.76% in February, and roughly half of July's core increase coming from services prices that are estimated rather than observed. The second half is that policy is only slightly restrictive and it would not take much acceleration to nudge him toward tightening. The market priced the first half.

The chair used last week's Jackson Hole keynote to say the softer summer readings did not persuade him the underlying trend had improved, and a second governor said Tuesday he would back a hike if inflation fails to ease. Headline PCE ran 3.7% in July with core at 3.3%, and the only inflation reads before the meeting are the Producer Price Index (PPI) on September 10 and the Consumer Price Index (CPI) on September 11. The hold has one vote leaning toward it and two data points that can take it away.

Deferred is not cancelled

The FedWatch table is less dovish than the tape's reading of it. October carries a 63.6% probability of at least one hike, and December has a single hike as its modal outcome at 42.9%, with a further 32.9% assigned to two. The market gives better than four chances in five that the target range is higher by year end. What moved today is the date of the first move rather than the fact of it, and the index has added more than 650 points on a calendar adjustment.

The rates relief is real as far as it goes. The 10-year yield trades near 4.75% after touching 4.81% on Wednesday, its highest since late 2023, and the Dollar Index sits at a one-week low near 99.00 as the Yen jumps to a one-month high ahead of a September 18 Bank of Japan decision the market expects to bring a hike. That relief was under way before the governor spoke, so the equity bid is borrowed from the bond market rather than earned on any change in the inflation facts. Nvidia (NVDA) agreeing to buy Hugging Face for $12.9 billion is colour, not cause.

The condition has an energy problem

The Institute for Supply Management (ISM) services Purchasing Managers Index (PMI) printed 55.4 against a 54.3 consensus and 54.1 prior, with prices paid climbing to 72.6 from 70.3 while the employment index at 47.8 stayed in contraction. The prices line is the hawkish number of the morning, and it bought a thirty-minute dip from just above 53,500 to the 53,300 area before buyers absorbed it and pushed on to the session high.

The governor's case also rests on higher energy prices not having spread into the wider economy, and the barrel is not cooperating. West Texas Intermediate (WTI) Crude Oil trades near $92.00 and Brent Crude Oil above $96.00, both up about 1% on the day, after American forces struck Islamic Revolutionary Guard Corps (IRGC) targets on Tuesday, Iran answered with missiles and drones at bases across the region, and the president said Wednesday that any agreement with Tehran is worthless and further strikes can come at any time. A 72.6 prices paid reading and a barrel climbing through a live shooting war are the two facts most likely to make August's CPI say otherwise.

Friday's payrolls and next week's prices

August nonfarm payrolls land Friday at 12:30 GMT, forecast at 58K after a 23K contraction, with the unemployment rate seen unchanged at 4.1% and average hourly earnings forecast at 0.3% MoM from 0.1% and 3% YoY from 3.2%. This morning's labour prints leaned soft: initial claims at 206K against 205K expected, Challenger job cuts up to 52.9K from 33.4K, and second-quarter unit labour costs at 1.2% against 1.3% forecast. The governor expects Friday's report to look like recent ones and says inflation will decide his vote, which makes the earnings line the number that matters here.

A regional Fed president speaks at 19:00 GMT today, PPI follows on September 10 and CPI on September 11, both at 12:30 GMT, and the committee decides on September 16. A soft payroll count on Friday does nothing for the hold that a firm CPI cannot undo the following week, and the index is trading as though the sequence runs the other way.

Levels to watch

Resistance: The 53,800 handle is the first test, the band that capped every rally from August 14 through August 28, and the session high sits just beneath it. Above that, 54,000 marks the August 7 to August 13 consolidation, then 54,400 and the record just short of 54,750, roughly 2% overhead.

Support: The 53,500 handle is the shelf the afternoon built on before the final leg and the level buyers now have to hold. Beneath it sit the 53,250 area, where Wednesday's high and Tuesday's open cluster, then the session low just above 53,000, with the rising 50-day Exponential Moving Average (EMA) near 52,800 the line under the entire August advance. The 200-day EMA just above 50,000 is not in play.

Bias: Bullish while 53,500 holds, with objectives at 53,800 and then 54,000. The daily Stochastic Relative Strength Index (Stoch RSI) near 36 is curling up out of the lower third of its range, which fits a low made on Wednesday and defended. The five-minute reading above 85 says the last leg is stretched, so the first pullback toward 53,500 tests the bid rather than the trend. A daily close beneath 53,500 returns the tape to the range and reopens 53,250, then 53,000 and the 50-day EMA.

Dow Jones daily chart

Bank of England (BoE) Chief Economist Huw Pill reiterated his support for raising the Bank Rate to 4.00%, arguing that policymakers cannot wait for uncertainty surrounding the Middle East conflict and energy prices to resolve before acting. Pill warned that delaying action could leave monetary policy behind the curve and allow higher energy costs to spread into wages and domestic prices.

Key takeaways

“My own response has pointed to a need to raise Bank Rate to 4%.”

"Raising bank rate on this basis doesn’t signal prolonged aggressive hikes."

“Prompt increase in bank rate may head off some potential insidious catch-up dynamics.”

“Clear, prompt and decisive policy action and communication would help steer markets and reduce uncertainty.”

“We cannot wait for uncertainties to resolve themselves.”

“A wait-and-see approach risks creating a status quo bias in the setting of interest rates.”

“Fine-tuning interest rates in the face of uncertainty about energy prices is problematic.”

“I am unconvinced that labour-market slack means there will be no second-round effects.”

“There are reasons to believe that second-round effects will be stronger now than during the ‘halcyon days’ of inflation targeting.”

“The Iran war has not de-anchored longer-term inflation expectations.”

“The MPC should be cautious about using relatively extreme ‘what-if’ scenarios to explain its analytical framework.”

• GBP/USD rises as Waller’s neutral stance trims Fed hike bets.
• Strong ISM services data limits Sterling gains before NFP.
• BoE’s Pill backs higher rates, supporting Sterling resilience.

The Pound Sterling rises against the US Dollar on Thursday, as Fed Governor Christopher Waller favors holding the rate unchanged, shifting to a more neutral stance regarding monetary policy, while data showed that the US labour market is solid and that business activity improved. The GBP/USD trades at 1.3535, up 0.37%.

GBP/USD gains as Waller softens Fed risks before NFP

Waller said that if upcoming inflation data shows cooling, he would be inclined to allow a resumption of the disinflation process, as he sees the Fed funds rate as appropriate. Nevertheless, he admitted if otherwise and inflation comes hot, he would not hesitate to consider a rate hike.

His comments triggered a repricing by money markets, which, a day ago, priced in a more than 60% chance of a 25-basis-point (bps) rate hike. As of writing, the odds have shrunk to 54% for a rate rise and 46% for rates to stay steady.

 Data-wise, the US ISM Services PMI in August was 55.4, exceeding forecasts of 54.3 and July’s 54.1. Some of the sub-components of the PMI showed that companies are complaining about higher prices, while the jobs market seems to have stabilized, though it remained in contractionary territory.

Other data revealed that the number of Americans filing for unemployment benefits rose from 204K to 206K, a tick above the 206K expected, an indication of a “low-firing, low-hiring environment.” Earlier, the Challenge, Gray & Christmas firm, revealed that announced plans to hire by companies rose 37% in the first eight months of 2026, compared to

In the UK, the docket was absent, but Cable benefited from a potential intervention in the FX markets, as the Japanese Yen appreciated sharply against most G8 FX currencies.

Meanwhile, Bank of England (BoE) Chief Economist Huw Pill was hawkish, saying that “my own response has pointed to a need to raise Bank Rate to 4%.” He added that raising rates “may serve to head off some of the potential insidious catch-up dynamics.”

Now, traders' eyes are on the release of the US August Non-Farm Payroll figures on Friday.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3531, holding above the latest triple simple moving average cluster around 1.3449 and a series of reclaimed trend-line levels, which collectively suggest a mildly bullish near-term bias. The pair is now trading over former descending resistance lines, while the Relative Strength Index (14) at 51.43 sits just above neutral, hinting at steady rather than impulsive upside momentum as price approaches the next key structural cap.

On the downside, immediate support is clustered between the broken resistance trend line at 1.3478, the composite triple simple moving average near 1.3449, and the secondary trend support around 1.3421, with additional protection seen at the earlier break level near 1.3378. On the topside, the upward-sloping trend-line break at 1.3653 is the next notable resistance, and a sustained move above this barrier would open the path for a more decisive bullish extension in the coming sessions.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• Gold rebounds from a nearly four-week low as the Greenback loses ground.
• Fed rate expectations remain the key focus ahead of the NFP report due on Friday.
• Technically, immediate resistance is located at $4,500, followed by the 200-day SMA at $4,533.

Gold (XAU/USD) extends its rebound on Thursday after slipping below $4,300 to a nearly four-week low on the previous day. A sharp rally in the Japanese Yen (JPY) weighs on the US Dollar (USD), while a pullback in US Treasury yields provides additional support to the precious metal. At the time of writing, XAU/USD trades around $4,509, up 2.78% on the day.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.00, near a one-week low, after reaching 99.86 on Wednesday, its highest level since August 14. The benchmark 10-year US Treasury yield trades around 4.75%, falling for the second consecutive day after reaching 4.81%, its highest level since October 2023.

US economic data offers mixed signals. Initial Jobless Claims increased to 206K in the week ending August 29, slightly above the market forecast of 205K and the previous reading of 204K. Meanwhile, the August ISM Services Purchasing Managers' Index (PMI) rose to 55.4 from 54.1 in July, beating expectations of 54.3.

A weaker US Dollar is generally positive for Gold. However, several near-term headwinds could make it difficult for the yellow metal to sustain its recovery, even though the longer-term outlook stays supported by strong central bank purchases and investment demand.

Government bond yields have climbed to multi-year highs across major economies as fiscal and inflation concerns deepen. Higher Oil prices linked to the war in the Middle East are also adding to inflation expectations. Elevated yields increase the opportunity cost of holding non-yielding assets such as Gold.

Expectations of Federal Reserve (Fed) rate hikes pose an additional challenge, as Gold typically performs better when interest rates are low. However, dovish comments from Fed Governor Christopher Waller keep traders cautious over the possibility of a September move.

Waller said he is “finally seeing some signs of disinflation in recent data” and that the “rate decision in September hinges on August inflation.” He added that he would support keeping interest rates unchanged if the August data confirm recent progress.

According to the CME FedWatch Tool, the probability of a rate hike at the Fed’s September 15-16 meeting has fallen to around 48% from 63% a day earlier. Traders now await Friday’s Nonfarm Payrolls (NFP) report for fresh clues on the Fed’s monetary policy outlook.

Technical analysis: XAU/USD approaches $4,500 as buyers regain ground

XAU/USD holds above the 50-day and 100-day Simple Moving Averages (SMAs), keeping the near-term outlook constructive. The Moving Average Convergence Divergence (MACD) indicator is still below zero and in negative territory, hinting that bullish momentum is tentative despite the spot price trading well above underlying trend supports. The Relative Strength Index (RSI) on the daily chart is at 55 and is mildly positive, reinforcing a consolidative bullish tone rather than an overextended rally.

On the upside, immediate resistance is located at the horizontal level of $4,500, followed by the 200-day SMA at $4,533 and the $4,700 mark. On the downside, the psychological level of $4,400 offers initial support ahead of the 100-day SMA at $4,357 and the 50-day SMA at $4,231. A deeper decline could bring the horizontal support level of $4,000 into focus.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• USD/CAD falls for a second consecutive day as the Greenback weakens across the board.
• Dovish comments from Fed Governor Waller contrast with the BoC’s stronger inflation warning.
• US and Canadian jobs data on Friday could shape expectations for both central banks.

USD/CAD extends its decline for the second consecutive day on Thursday as broad US Dollar (USD) weakness and the Bank of Canada’s (BoC) hawkish message at its September policy meeting support the Canadian Dollar (CAD). Rising Oil prices provide an additional tailwind to the commodity-linked Loonie. At the time of writing, the pair trades around 1.3785, its lowest level in over a week.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.00, near a one-week low, after reaching 99.86 on Wednesday, its highest level since August 14.

The Greenback comes under broad selling pressure as a sharp rally in the Japanese Yen (JPY) spills over into the wider currency market. Dovish comments from Federal Reserve (Fed) Governor Christopher Waller add to the weakness, while US Treasury yields retreat from recent highs across the curve.

Waller said he is “finally seeing some signs of disinflation in recent data” and that the September rate decision depends on the August inflation figures. He added that he would support keeping interest rates unchanged if the upcoming data confirm recent progress. According to the CME FedWatch Tool, the probability of a rate hike at the September 15-16 meeting has fallen to around 48% from 63% a day earlier.

In Canada, the BoC’s hawkish hold on Wednesday raised expectations of a rate hike before the end of the year. Analysts at Brown Brothers Harriman note that, “as was widely expected, the BoC kept the policy rate at 2.25% for a seventh consecutive meeting but warned that ‘the upside risks to inflation have increased.’”

They point out that this shift in tone prompted a swift repricing, as “markets brought forward expectations for a first 25bps hike from January to December and firmed up odds of 75 to 100bps of tightening over the next twelve months.” However, BBH cautions that “that’s too aggressive in our view given core inflation is near the BoC’s 2% target and indicators point to continued excess supply in the economy.”

On the data front, US Initial Jobless Claims rose to 206K, slightly above expectations of 205K, while the ISM Services Purchasing Managers' Index (PMI) increased to 55.4 in August from 54.1 in July. Attention now turns to Friday’s labour-market reports on both sides of the border. The US economy is expected to add 58K jobs in August, while Canadian employment is forecast to rise by 15K.

Scotiabank’s Global FX Strategy team reports the British Pound (GBP) is flat versus the US Dollar (USD) but softer on crosses, with UK PMI data offering little new insight. Markets price minimal tightening for the September Bank of England (BoE) meeting and modest moves for November. GBP/USD technicals are neutral to bearish, with support around 1.3500–1.3450, though the broader trend from June remains bullish.

Muted BoE expectations cap Pound

"GBP/USD (1.3493) The pound is trading flat to the USD while showing minor relative losses against most of the G10 currencies. The UK’s final services and composite PMI’s delivered modest expansionary prints in the low 50s, offering little in terms of the fundamental narrative. "

"BoE Chief Economist Pill is scheduled to speak at 11am ET, offering the potential for headline risk ahead of Gov. Bailey’s speech tomorrow. BoE rate expectations remain muted for the September 17th meeting, with only 4bpts of tightening priced."

"The November 5th meeting is priced for 18bpts and is also an Inflation Report/forecast meeting and thus should provide for a more fulsome analysis as it will also follow the government’s Autumn Statement/budget scheduled for October 28th. UK-US yield spreads remain supportive following this week’s surge."

"Neutral/bearish—the GBP’s technicals remain relatively lackluster with an RSI that is showing signs of stabilization, but at bearish sub-50 levels in the mid-40s. Short-term price action suggests important support at/just below 1.3500, with additional support expected closer to 1.3450. The medium-term trend from June remains bullish however."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

ING economists Bert Colijn and Carsten Brzeski argue that the Eurozone’s long-standing export-led growth model is being structurally eroded by higher energy costs, rising Chinese competition and a changing global trade environment. They outline four stylised scenarios for future growth, stressing that Europe’s success will hinge on productivity, cheaper energy, deeper capital markets and credible structural reforms.

Four scenarios for Eurozone growth

"This is what makes today's competitiveness debate different from earlier ones. While the war in the Middle East and US tariffs have dominated headlines over the past year, they are only one part of the story. The larger challenge is that the external environment on which Europe's growth model relied has changed fundamentally."

"To illustrate this, we define four stylised scenarios for the eurozone as it grapples with the erosion of its old growth model. In these scenarios, the key uncertainty is not whether Europe becomes more dependent on domestic demand or continues to rely on exports. It is whether Europe can generate sufficient productivity growth and new competitive advantages to support either model."

"In any case, both outcomes require the same clear but also disruptive policy choices, in order to achieve productivity growth, cheaper energy, deeper capital markets and reforms that survive contact with national politics. In fact, Europe won’t need to choose a new business model upfront, it simply needs to do its homework and then step back to see which model will prevail."

"Europe deliberately shifts away from dependence on external demand and develops a stronger internal growth model. Initiatives to strengthen domestic demand through public and private investment succeed. A more aggressive shift towards renewables and nuclear power reduces energy dependence significantly, and structural reforms unlock activity."

"Exports lose momentum and trade surpluses disappear, but Europe fails to generate sufficient domestic dynamism to compensate. Higher commodity prices weigh on purchasing power and ageing and weak productivity dominate. As European exporters lose market share and exports cease to be the main growth driver, the European growth model does indeed become more balanced – but it is a balance of the race-to-the-bottom kind."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Societe Generale strategists highlight heavy USD/JPY turnover as the pair slid below its 200-day moving average, with leveraged accounts forced to cover shorts. They argue that potential Bank of Japan (BoJ) tightening cadence and bond repatriation flows ahead of fiscal year-end support a more constructive Japanese Yen outlook, though conviction hinges on Federal Reserve policy and rate spread dynamics.

Heavy flows as Yen sentiment shifts

"USD/JPY struggled to overcome the interim hurdle at 160.70/161, representing the 50-DMA, earlier this week and has since experienced a sharp pullback. It is worth noting that the pair could be forming the right shoulder of a head and shoulders pattern, which generally signals potential downside. Should a rebound develop, the MA near 160.70/161 may remain a key hurdle. The next crucial support is located at the pattern's neckline near 155. A break below this could trigger a deeper downtrend."

"An estimated $30bn was traded yesterday during the down leg in USD/JPY from above 100dma to below the 200dma and follow through selling was observed in Asia overnight adding more daylight below the psychological threshold which is forcing leveraged accounts to play catch up and cover short positions."

"With the BoJ potentially stepping up the cadence of tightening (not the increments), and bond repatriation flows being stepped up ahead of FY end (recuring seasonal pattern), there is a case to believe that the Yen may be just about to turn a corner. Conviction will partly depend on what the Fed does next, and whether bond spreads can back up the move in spot."

"That was the case yesterday when 2y UST/JGB narrowed by 9bp to 250bp but momentum stalled overnight, questioning the scope for sustained Yen appreciation. We’ve been down this track before, most notably in early August when the impact of the coordinated intervention proved short-lived and weak long Yen/short dollar hands eventually lost out with dips bought and recurring Yen weakness causing frustration."

"A downside surprise for NFP tomorrow (whisper down to 40k after ADP) and/or CPI next week would boost conviction that the Yen is headed for a decent run. Market participants also pointed to model-driven selling and position adjustment by leveraged accounts following hawkish comments by BoJ board member Takata. Sources this morning poured cold water on the likelihood of more draconian hikes of 50bp, triggering a minor reversal and squeeze up to 157 from the intra-day low of 156.36."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• The Japanese Yen strengthens sharply after comments supporting a more flexible approach to interest rate hikes in Japan.
• US employment data remains fragile, despite stronger-than-expected services activity in August.
• Investors reinforce expectations of Federal Reserve monetary easing ahead of the US employment report.

USD/JPY extends its decline for a second consecutive day and trades around 155.40 on Thursday at the time of writing, down 2.07% on the day. The pair comes under strong selling pressure as the Japanese Yen (JPY) benefits from both a more hawkish tone from the Bank of Japan (BoJ) and persistent concerns about a potential intervention by Japanese authorities in the foreign exchange market.

BoJ board member Hajime Takata said on Wednesday that the central bank should adopt a more flexible approach to future interest rate hikes. He argued that 2026 marks a structural change in the economic regime, notably driven by global growth and investments linked to artificial intelligence. Takata therefore believes that the BoJ should move beyond its traditional pace of raising rates every six months and consider a broader range of options rather than systematically limiting itself to 25-basis-point increases.

These comments reinforce expectations of further monetary policy tightening in Japan and support the Japanese Yen. Investors are now fully pricing in an interest rate hike at the BoJ's September 16-17 meeting.

The Japanese currency also benefits from the persistent risk of intervention in the foreign exchange market. Japan's top currency diplomat, Atsushi Mimura, reiterated on Thursday that authorities remain ready to intervene. He says he is "neither at ease nor satisfied" with current foreign exchange market conditions, while declining to say whether authorities have recently conducted rate checks with market participants. USD/JPY's recent move above the psychological 160.00 level had intensified speculation about a potential intervention.

On the US side, the US Dollar (USD) remains under pressure as the latest data continues to paint a mixed picture of the economy. The Automatic Data Processing (ADP) report released on Wednesday shows that the US private sector added only 38K jobs in August, compared with the 47K expected, reinforcing signs of a slowdown in the labor market.

Data released on Thursday nevertheless provides some more encouraging signals. Initial Jobless Claims rose slightly to 206K in the week ending August 29, compared with 204K previously and expectations of 205K. Continuing Jobless Claims also increased to 1.779M.

Services activity also proves stronger than expected. The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) rose to 55.4 in August from 54.1 in July, beating expectations of 54.3. New Orders accelerated sharply to 60.9, while the Employment Index edged higher to 47.8, although it remained below the 50 threshold separating expansion from contraction. Inflationary pressures also persist, with the Prices Paid Index climbing to 72.6 from 70.3 previously.

Despite the resilience of services activity, signs of weakness in the labor market keep the focus on the Federal Reserve's (Fed) monetary policy outlook. Investors now await Friday's Nonfarm Payrolls (NFP) report, which could provide further clues about employment conditions and determine whether the recent weakness in the US Dollar can persist.

USD/JPY technical analysis

In the daily chart, USD/JPY trades at 155.43, keeping a bearish near-term bias as spot remains below both the 100-day simple moving average (SMA) at 159.97 and the 200-day SMA at 158.46. The pair is attempting to stabilize after a sharp slide, but the Moving Average (100, close, 0) and Moving Average (200, close, 0) overhead reinforce a capped tone, while the Relative Strength Index (RSI) at 28.57 sits in oversold territory and hints that downside momentum could be stretched in the short term.

On the topside, initial resistance emerges at 156.00, ahead of the denser supply area defined by the 200-day SMA at 158.46 and the 100-day SMA at 159.97. On the downside, immediate support is located at 155.23, with further floors at 155.04 and 154.50; a decisive break under these levels would reopen the recent bearish leg, while a bounce from this cluster would merely be corrective as long as price holds beneath the major moving averages.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Scotiabank’s Shaun Osborne and Eric Theoret highlight that the Euro (EUR) is higher against the US Dollar (USD), supported by strong euro area Producer Price Index (PPI) and firmer European Central Bank (ECB) rate expectations. Markets now price more than one 25bp hike by year-end. Short-term EUR/USD technicals are neutral to bullish, with support around 1.1580 and limited resistance before 1.1650, while fair value is estimated near 1.1623.

Inflation data underpins Euro tone

"Fundamental releases have been mixed, with final services and composite PMI’s indicating modest expansion across the euro area but important contractionary (sub-50) prints for Germany and France. The hot PPI figures dominate however, as the ECB remains resolved to address intensifying inflation risks. The euro area’s July PPI printed 5.8% y/y, showing renewed pressure with a push toward the 5.9% cycle high from May."

"ECB rate expectations have firmed considerably over the past week or so, extending hawkish pricing beyond the 25bpts of tightening priced for September, with nearly one full additional 25bpt hike priced by year-end. Yield spreads are offering renewed support and our narrow (2Y Germany-US yield spread) FV estimate is currently at 1.1623."

"EUR/USD short-term technicals: Neutral/bullish—the latest stabilization in spot is important, revealing clear support below 1.16 and specifically 1.1580."

"The tentative gains are delivering a modest lift in momentum, pulling the RSI back into the mid-50s and shifting the balance of risk to near-term strength. We see limited near-term resistance ahead of 1.1650 and note the local high from mid/late August just above 1.17."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)