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• AUD/USD falls 0.30% on Friday, correcting after reaching its highest level since mid-May earlier in the day.
• Warsh stresses the need to bring inflation sustainably back toward the 2% target despite the resilience of the US economy.
• In Australia, persistently elevated inflation keeps expectations of further interest-rate hikes alive.

AUD/USD retreats 0.30% on Friday to trade around 0.7170 at the time of writing, correcting after reaching its highest level since mid-May at 0.7206 earlier in the day. The Australian Dollar (AUD) loses ground against the US Dollar (USD), which attracts renewed demand following hawkish comments from Federal Reserve (Fed) Chair Kevin Warsh.

Warsh stresses that price stability must remain the US central bank’s predominant focus. He says policymakers need to be confident that underlying inflation is moving toward the Fed’s objective and warns that they still “have work to do” if this trend does not materialize.

On inflation, the Fed Chair acknowledges that data released during the summer have been better than expected but says they are not sufficient to demonstrate a meaningful shift in underlying price dynamics. He also reiterates that the Fed’s 2% Personal Consumption Expenditures (PCE) inflation target remains “firm and fixed.”

Warsh’s hawkish tone triggers a significant repricing of monetary policy expectations. According to the CME FedWatch Tool, markets now assign around a 60% chance to an interest-rate hike at the Fed’s September meeting, up from roughly 36% before Warsh’s speech. The shift supports the US Dollar and puts downward pressure on AUD/USD.

On the Australian side, the Australian Dollar retains some support from the monetary policy outlook of the Reserve Bank of Australia (RBA). In its Bulletin released on Thursday, the central bank notes that consumer prices have remained elevated above its 2%-3% target for much of the post-pandemic period, fueling expectations of a fourth interest-rate hike before the end of the year.

These expectations are also supported by the latest Australian inflation data. The Consumer Price Index (CPI) eased to 3.5% YoY in July from 3.8% in June but remained above the 3.2% expected by markets. Meanwhile, the Trimmed Mean CPI held steady at 3.6% YoY, compared with expectations for a slowdown to 3.5%.

With both the Fed and the RBA facing persistent inflation pressures, AUD/USD remains caught between competing monetary policy forces. For now, the sharp repricing of US interest-rate expectations is dominating, allowing the US Dollar to regain the upper hand on Friday and prompting AUD/USD to pull back from its highest level since mid-May.

AUD/USD technical analysis

In the four-hour chart, AUD/USD trades at 0.7166, holding a modest bullish bias as it remains above the 100-period and 200-period simple moving averages (SMAs) at 0.7108 and 0.7053, respectively, as well as the rising trend-line support around 0.7117. The Relative Strength Index (RSI) has cooled to about 46, suggesting momentum has normalized from overbought territory but still allows for consolidation above these structural floors while the pair probes overhead barriers.

On the downside, initial support is seen at the horizontal level near 0.7135, followed by the trend-line area around 0.7117 and the 100-period SMA at 0.7108, with the 200-period SMA at 0.7053 reinforcing the broader bullish structure. On the topside, immediate resistance is located at the recent horizontal cap near 0.7206, and a clear break above this ceiling would be needed to reopen a more impulsive advance in the pair.

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

• DJIA trades near 53,700, up 0.18%, after a 320-point round trip.
• September Fed hike odds jumped above 55% from 35.4% a day earlier.
• Two-year Treasury yields rose more than 6 basis points, the long end flat.

The Federal Reserve chair used the largest speaking slot on the calendar to commit to nothing and the futures market repriced September anyway. Odds of a quarter-point increase jumped above 55% from 35.4% a day earlier, on a keynote that declined to offer forward guidance, declined to set out a reaction function, and bound its author to a discipline rather than a decision. The Dow Jones Industrial Average printed its low of the day into it and its first look above 53,800 since mid-month ninety minutes later.

A speech built to withhold

The address opened by describing whatever followed as a route map rather than forward guidance, a practice the chair judged to have outstayed its welcome. He called the economy resilient and the labour market broadly consistent with full employment, then said the summer Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) readings had come in better than expected without persuading him that underlying trends had improved, and that the Committee has work to do if that does not change.

What the text withheld matters more than what it carried. There was no statement of the conditions that would move the Committee, no signal on direction, and no numerical threshold attached to any of it, only a commitment to method. A market still has to hold a position into September 16, so with the reaction function removed it prices the Committee off tone instead. Twenty points of hike probability moved on a document whose stated purpose was to promise nothing.

The tension inside the speech is that it pledges rules while refusing to state one. The chair committed his term to building more reliable models and more robust policy rules, then described forecasting accuracy as an aspiration and counselled modesty about what a central bank can know while geopolitics, supply chains and technology move this fast. A rule that arrives later is not a rule anyone can position around three weeks from now.

The omission that moved the curve

Nothing in the address touched the Treasury operation that doubles the ceiling on longer-dated buybacks from September 9 and supplies duration support the Committee never voted on. A chair who has argued for a smaller government footprint in markets, and who has credited bond-market tightening with doing part of his own job, passed over the fiscal authority quietly undoing both. The single largest constraint on his policy was the one subject the speech left alone.

The curve answered precisely. Two-year yields, the tenor that prices the Committee, rose more than six basis points to their highest in a month, while the long end held flat. A hawkish keynote that flattens the curve rather than lifting it is a market saying the front end still belongs to the Federal Reserve and the back end now belongs to whoever is buying the bonds. That division is the whole of August compressed into one afternoon.

What the index actually did

Equity behaviour under the same text was far less decided than a positive session suggests. The index printed the low of the day into the address, ran roughly 320 points to sell just above 53,800, then handed back more than half of that inside the following hour to sit near 53,700, up 0.18%. A 320-point range that resolves in the middle is not a market that heard an answer.

The week still lands higher, the first of three to do so, with the S&P 500 and the Nasdaq Composite both firmer on the session. That leaves an index roughly 2% beneath a record set on August 5 and capped for a third straight week by the same band it failed at today, gaining on a session that raised the odds of tighter policy by twenty points.

The week that decides it

The symposium runs through August 29 with the rest of the Committee still speaking, so the tone reading has two more days to move without a single new number attached to it. August payrolls land September 4 and the decision follows on September 16, the first date since June on which the front end and the index have to agree on something. Until then the only guidance on offer is the data itself, which is precisely the design.

Levels to watch

Resistance: The band just above 53,800 sold the session high and has capped every attempt since mid-month. Above it 54,000 is the next line, with the early-August ledge near 54,100 and the record just short of 54,750 beyond.

Support: The 53,500 handle caught the session low and is the first floor. Beneath it 53,200 is the shelf, with the 53,000 handle and the August base under it.

Bias: Bearish while 53,800 caps, with objectives at 53,500 and then the 53,200 area. The daily Stochastic Relative Strength Index (Stoch RSI) near 46 has rolled over from mid-range without the index making a new high. Invalidation on a daily close above 53,900.

Dow Jones 5-minute and daily charts

• USD/JPY breaks the 160.00 handle, up 0.40% and a fifth straight gain.
• Tokyo inflation excluding food and energy reached 2% in August, from 1.8%.
• A September Fed increase prices above 55%, its first outright majority.

Japan delivered the inflation and labour data the Bank of Japan needs to move next month and the Japanese Yen is weaker for a fifth consecutive session. Tokyo Consumer Price Index (CPI) inflation excluding food and energy reached 2% in August, the headline rate rose to 1.9%, and unemployment fell to 2.4% against a 2.5% forecast. USD/JPY takes the 160.00 handle regardless, at the high of the day.

The print the Bank of Japan needed

The measure policy actually follows, Tokyo prices excluding fresh food, rose 1.8% against a 1.7% consensus and a 1.7% prior, a third consecutive month of acceleration. Government electricity and gas subsidies, reinstated as the Gulf supply disruption pushed fuel costs higher, will suppress the headline rate through the October data, which makes the 2% reading on the ex-energy measure the honest one. Unemployment at 2.4% is the lowest in a year.

Wire reporting through the month has the policy board weighing an increase on September 18 and considering a faster pace than the roughly twice-yearly cadence it has kept since 2024, when it began unwinding a decade of stimulus. Five-year Japanese government bond yields have printed a record high on that speculation, and the June move took the policy rate to a 31-year high. None of it has bought the currency a single session.

Two increases leave one gap

The Federal Reserve chair used his first Jackson Hole keynote to warn that the committee still has work ahead of it while it lacks confidence that underlying inflation is returning to 2%, and futures moved on it. A quarter-point increase on September 16 now prices above 55%, the first outright majority of the cycle, with at least one increase near 85% by October 28 and a second running close to 38% by December 9. The same 14:00 GMT block carried year-ahead consumer inflation expectations falling to 4% against a 4.3% consensus, which the tape ignored entirely, and USD/JPY has added roughly 65 pips since.

The Bank of Japan decides two days after that, and the arithmetic is the problem. A move to 1.25% against a Federal Reserve range of 3.75% to 4.00% leaves the same gap of roughly 250 basis points that exists today. Two central banks tightening on consecutive days changes the level of rates in both countries and changes nothing about the reason to borrow one currency and hold the other.

The only outcome that pays the Japanese Yen is a Japanese increase against an American hold, and futures put that hold at 44% on its own. Every other branch either widens the gap or leaves it where it is, which is a poor return profile for anyone selling the carry trade on the strength of Japanese data.

The defence has a bond problem

Behind the price sits the July 31 operation, a joint Japanese and American Yen purchase and the first coordinated intervention between the two since 2011. Tokyo has said it will not hesitate to repeat it. The scale was the largest single session on record at 8.45 trillion Yen, with roughly 5.3 trillion more following in coordination, and it dragged the pair from just short of 164.00 into the 155.00 area.

Washington's interest in that operation is not friendship. A solo Japanese defence is funded by selling American government bonds, and June holdings data already showed Japan cutting 26.4 billion Dollars of Treasuries while the currency was being defended, inside a total foreign reduction of 72.1 billion Dollars. With thirty-year yields near their highest since 2007, the cheapest way to stop Tokyo selling duration is to lend it Dollars instead. The Yen defence and the long-end problem are the same trade.

What resolves it

The symposium runs through August 29 and Bank of Japan officials speak into the run-up to their decision, including a briefing after a Group of Twenty meeting in the United States next week. American payrolls land September 4, and the two policy decisions arrive two days apart in the middle of the month. Until then the Japanese Yen is a bet on the Federal Reserve stopping, not on Tokyo delivering.

Levels to watch

Resistance: With the 160.00 handle taken, 161.00 is the first shelf above and the only structure between there and the 162.00 to 163.00 zone that drew the July operation. The cycle high just short of 164.00 sits beyond it.

Support: The 160.00 handle inverts to the first floor and carries the 50-day Exponential Moving Average (EMA) on the same line, which is what makes the level worth defending on a retest. The session low just under 159.50 is next, then 158.50, with the rising 200-day EMA near 158.00 the base the August recovery was built on.

Bias: Bullish, with a daily close above 160.00 confirming the break and opening 161.00. The daily Stochastic Relative Strength Index (Stoch RSI) near 62 has room above it and the 5-minute reading near 53 leaves the move unstretched. Invalidation on a daily close back beneath 159.50, and above 162.00 the cap is policy rather than price.

USD/JPY 5-minute and daily charts

• The US Dollar strengthens after Kevin Warsh emphasizes the need to restore price stability during his Jackson Hole speech.
• Markets raise the chance of a September interest-rate hike to around 56%, compared with roughly 36% before Warsh’s remarks.
• US economic data offer a mixed picture, with a modest downward payroll revision and easing short-term consumer inflation expectations.

US Dollar Index (DXY) rallies on Friday, gaining 0.36% to trade around 99.50 at the time of writing, as Federal Reserve (Fed) Chair Kevin Warsh’s hawkish remarks at the Jackson Hole Symposium prompt investors to sharply reassess the outlook for US interest rates.

The US Dollar (USD) gains ground after Warsh stresses that price stability should remain the central bank’s predominant focus. The Fed Chair says policymakers need to be confident that underlying inflation is moving toward the central bank’s objective and warns that they still “have work to do” if this is not the case.

On inflation, Warsh acknowledges that data released during the summer have been better than expected but says they are not sufficient to demonstrate a meaningful shift in underlying price dynamics. He reiterates that the Fed’s 2% Personal Consumption Expenditures (PCE) inflation target remains “firm and fixed.”

At the same time, the Fed Chair offers an upbeat assessment of the United States (US) economy. Warsh says economic activity appears to have strengthened, describing consumer spending as healthy and the labor market as stable, while pointing to rapidly increasing business investment.

The combination of resilient economic activity and persistent inflation concerns triggers a significant repricing of monetary policy expectations. According to the CME FedWatch Tool, markets now assign around a 56% chance to an interest-rate hike at the Fed’s September meeting, up from roughly 36% before Warsh’s speech. The shift provides fresh support to the US Dollar and helps the DXY advance toward 99.50.

Meanwhile, US economic releases on Friday provide a more mixed backdrop. The preliminary Nonfarm Payrolls (NFP) Benchmark Revision from the Bureau of Labor Statistics (BLS) shows a downward adjustment of 79K jobs, or 0.1%, to total nonfarm employment for the twelve months through March. The relatively limited revision may ease concerns about a more substantial deterioration in the labor market after last year’s much larger downward adjustment of 911K jobs.

Consumer data also send mixed signals. The University of Michigan Consumer Sentiment Index for August is revised higher to 51.7 from the preliminary reading of 51, although it remains below July’s 55.2. The Expectations Index rises to 51.5 from the initial estimate of 50.6 but also remains weaker than July’s 55.4.

On the inflation front, the University of Michigan’s one-year Consumer Inflation Expectations decline to 4% from 4.3%, while the five-year measure remains unchanged at 3.3%. The moderation in near-term inflation expectations provides some reassurance, but it fails to overshadow Warsh’s emphasis on price stability and the resulting increase in expectations for a September rate hike, leaving the US Dollar firmly supported on Friday.

US Dollar Index technical analysis

In the one-hour chart, US Dollar Index Spot trades at 99.47. Price holds in a bullish configuration, pressing above both the 100-hour and 200-hour simple moving averages (SMAs), which slope gently higher and underpin the broader uptrend. The latest push has also respected the rising trend-line support, keeping the immediate tone constructive, while the Relative Strength Index (RSI) around 75 signals overbought conditions that could slow the pace of gains rather than reverse the trend outright.

On the topside, initial resistance is located at the horizontal barrier near 99.70, where a pause or pullback would not be surprising given stretched intraday momentum. On the downside, the rising trend-line around 99.16 acts as a nearby pivot, followed by firmer support at 99.26, with the 100-hour SMA at 99.08 and the 200-hour SMA at 99.06 reinforcing a broader demand band on dips.

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

• USD/CAD trades just beneath 1.3900, up 0.24%, capped by the 200-day EMA.
• Canada grew 3.3% annualized in the second quarter, the fastest since early 2023.
• Futures price a September Fed hike above 55%, from even odds on August 10.

Canada produced the strongest growth figure of the cycle and the Canadian Dollar is weaker for it. Gross Domestic Product (GDP) rose 3.3% annualized in the second quarter, the fastest pace since early 2023 and comfortably above the 2.5% the Bank of Canada had forecast, while a revision to the first quarter erased the technical recession that had framed every rate discussion in Ottawa since May. USD/CAD trades just beneath 1.3900 regardless.

A quarter that ended before the tariff arrived

The composition of the report is stronger than the modest headline miss against a 3.4% consensus suggests. Exports rose 3.6% on the quarter, the largest increase in three years, led by a 27% jump in shipments of passenger cars and light trucks as domestic auto production recovered from two quarters of decline. Business capital investment rose 2.3% and broke a five-quarter losing streak, and June activity added 0.3% against a 0.2% forecast.

None of it describes the economy currently trading. The quarter ended June 30, seven weeks before a 50% American duty landed on roughly C$27.6 billion of Canadian goods on August 22, and before Ottawa's matching measures take effect September 8. Statistics Canada already has July output flat and expects manufacturing to have given ground back. The single line that carried the rebound is autos, and Washington has threatened to tax cars, trucks, parts and steel at 50% from January 1.

The gap widened from one side only

The move on the day came from Wyoming rather than Ottawa. The Federal Reserve chair used his first Jackson Hole keynote to warn that the committee still has work ahead of it while it lacks confidence that underlying inflation is returning to 2%, the closest he has come to conceding that higher rates may be needed. Two-year Treasury yields pushed to a one-month high and USD/CAD added roughly 50 pips inside half an hour of the 14:00 GMT remarks.

Futures now put a quarter-point increase at the September 16 meeting above 55%, the first time the tightening side has carried a meeting outright, against an even split on August 10. At least one increase runs near 85% by October 28, and by December 9 the current range prices at zero with a second increase at roughly 38%. The Bank of Canada meets first, on September 2, and is priced for another hold with a hike in single digits.

The asymmetry between the two sides is the entire trade, because the Canadian Dollar has never followed the posted spread between the two policy rates, which has barely moved all year, but the expected one. Today that expected spread widened without a single Canadian input touching it. A country printing its fastest growth in three years still lost ground, because only one of the two central banks repriced.

Three releases, one trade

Two of the three American prints timed for 14:00 GMT argued the other way. The final August University of Michigan survey revised sentiment up to 51.7 from 51.0, with the expectations index at 51.5 against a 50.6 preliminary reading, and year-ahead inflation expectations fell to 4.0% from 4.2% in July. The five-year measure held at 3.3% for a third consecutive month.

The annual benchmark revision to payrolls subtracted jobs again in the same minute, against a consensus looking for the first upward adjustment since 2022 at close to 200K. Cooling inflation expectations and a weaker labour benchmark both lost to a single paragraph from a podium. Traders took the price-stability half of the mandate and discarded the employment half, which is the cleanest read yet on how this chair weighs the two.

What the next week decides

The Bank of Canada announces September 2 and American payrolls follow September 4, so the divergence priced today is tested twice inside a week. Canadian inflation ran at 3.0% in July, held up by fuel costs that the Gulf supply disruption keeps elevated, which is why a tariff shock to growth does not automatically buy a cut. The counter-tariffs then arrive September 8, and the quarter that reads best in three years starts being replaced by one that will not.

Levels to watch

Resistance: Sellers turned the advance back at the 200-day Exponential Moving Average (EMA) near 1.3900, which sits on the handle of the same name and marks the first gate. The 50-day EMA near 1.3950 is declining above it, and the 1.4000 handle caps the recovery beyond that.

Support: The session floor lies in the 1.3850 area, with 1.3800 the next shelf beneath it. Below there the August base just under 1.3750 is the low of the summer range and the level any renewed Canadian Dollar bid has to take out.

Bias: Bullish while 1.3850 holds, with the daily Stochastic Relative Strength Index (Stoch RSI) near 24 turning up out of the oversold band. A daily close above 1.3900 opens 1.3950 and then the 1.4000 handle. Invalidation on a daily close beneath 1.3800.

USD/CAD 5-minute chart

USD/CAD daily chart

• Gold drops below $4,600 as Warsh prioritizes inflation fight.
• Dollar and yields rise as Fed hike odds increase.
• September risks ease slightly, but December tightening bets climb.

Gold price drops over 0.42% on Friday as Fed Chair Kevin Warsh confirms the Fed is focused on tackling inflation, pushing the US Dollar and US Treasury yields higher, while money markets have begun to price in a potential rate hike in 2026. The XAU/USD trades at $4,576 after diving below $4,600 and refreshing weekly lows of $4,530.

XAU/USD falls below $4,600 as Fed hike bets rise after Jackson Hole

In Jackson Hole, Warsh revealed that he still sees inflation as a priority, leaning hawkish as he recognised that underlying measures of inflation haven’t improved. He stated that the US central bank must be confident that inflation is returning to its 2% goal, or otherwise “we have work to do.”

In his prepared remarks, he acknowledged that consumer spending is healthy and that the labour market is solid. Nevertheless, when speaking about price stability, Warsh recognised that the figures are “more concerning,” hinting that the Fed would focus on tackling inflation.

Immediately after his remarks, money markets priced in a 50% chance of a 25-basis-point rate hike by the Fed at the September 16 meeting. As of writing, investors trimmed the odds to nearly 44%, but for December, they see an 82% chance, according to Prime Terminal.

The Greenback rose by over 0.38%, as measured by the US Dollar Index (DXY), which tracks the value of the American currency against six other currencies. The DXY sits at 99.49, underpinned by the jump in US Treasury yields. The US 10-year Treasury yield has risen more than a basis point to 4.686%.

XAU/USD technical analysis: Gold’s poised for further downside, below $4,600

Gold’s price action showed that the yellow metal “almost” tested the 200-day Simple Moving Average (SMA) at $4,527, though it reversed part of the move on Warren’s remarks, pushing back above the psychological $4,550 area.

From a momentum standpoint, buyers remain in charge as the Relative Strength Index (RSI) is above the neutral 50 level. Nevertheless, the index has been aiming lower, an indication that in the short term sellers are stepping in.

If XAU/USD drops below the 200-day SMA, it could open the door to a move toward $4,500. Below is the 100-day SMA at $4,374, the next area of interest.

For buyers, the next stop in Gold’s recovery is $4,600. A decisive breakout could open the door to challenge the August 27 daily high at $4,643, ahead of the elusive $4,700.

Geoff Yu at BNY highlights that Middle East tensions and constrained traffic through the Strait of Hormuz are keeping key energy supply routes at risk. Qatar’s extended force majeure on LNG exports threatens European winter gas balances and could re-ignite inflation pressures, while Brent, WTI and Dutch TTF prices reflect a fragile equilibrium in Oil and gas markets.

Hormuz bottlenecks threaten European gas

"Qatar extended force majeure on LNG supplies to European and Asian buyers as traffic through the Strait of Hormuz remains heavily constrained, keeping a major source of global gas supply offline."

"The key risk for Europe is a prolonged tightening in gas supply ahead of winter, with LNG prices already close to double pre-war levels."

"Continued disruption would intensify competition with Asian buyers for alternative cargoes, raise import costs and potentially rebuild inflation pressure through energy and industrial channels."

"Europe therefore remains highly exposed to any failure to reopen Hormuz and restore Qatari LNG flows."

"Iran also indicated that reopening the Strait of Hormuz could form part of a broader deal if unspecified U.S. conditions are met, keeping the shipping route central to any de-escalation."

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

• GBP/USD tumbles as Warsh puts inflation fight first.
• Fed hike odds rise as September tightening risk returns.
• Jobs revisions and sentiment data fail to weaken Dollar.

The Pound Sterling tumbles versus the Greenback on Friday as the Federal Reserve Chair Kevin Warsh puts inflation as the priority on the Fed, increasing the likelihood of an interest rate hike later in the year. The GB/USD trades at 1.3538, down 0.40%.

GBP/USD slides as Warsh keeps Fed’s inflation focus firmly intact

Finally, Warsh revealed his current stance, despite skipping putting his dot in June’s dol-plot at the Summary of Economic Projections (SEP). He said that summer’s inflation data was better than expected, but recognised that core inflation hasn’t improved, as he expected. He added that the Fed must be confident that inflation is returning to target, or otherwise, “we have work to do.”

Warsh acknowledged that consumer spending is healthy and the labour market is stable. But regarding price stability, he said that numbers are “more concerning,”  and reaffirmed that the “Fed 2% PCE target is firm and fixed.”

After the data, the US Dollar Index (DXY), which tracks the performance of the buck against six currencies, climbs over 0.38% at 99.49. US Treasury yields, particularly the 10-year benchmark rate, are up nearly 1.5 basis points to 4.686%, while investors have increased the chances of a rate hike at the September meeting.

Prime Terminal's interest rate probability tool shows that money markets increased the odds of a 25-basis-point Fed rate hike from 34% a day ago to 43% as of writing. Nevertheless, over Warsh’s remarks, the odds were as high as 50%.

Aside from this, the Nonfarm Payrolls Annual Revision came at -79K, below forecasts of 183K, improving from the previous revision of -911K. The final benchmark revision will be issued in February 2027 with the publication of the January 2027 Employment Situation news release.

The University of Michigan (UoM) Consumer Sentiment in August was 51.7, above estimates for a 51 print, but deteriorated compared to July’s print. Inflation expectations were modestly revised downward for one year, from 4.2% to 4%, while five-year expectations remained steady at 3.3%, in line with forecasts.

Given the backdrop, Cable resumed its downtrend as the UK economic schedule remained absent, with the US Dollar and geopolitics driving the move.

Next week the UK economic docket will feature the BoE Monetary Policy Report Hearings, as well as a speech by BoE Governor Bailey. IN the US, the schedule is slammed, with ISM PMIs, and a flurry of jobs data, led by the release of August’s Nonfarm Payrolls.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3572, holding a constructive bullish bias as spot remains above the cluster of reclaimed supports around the mid-1.34s. The triple simple moving average around 1.3424 now underpins the advance together with former trend-line barriers turned support near 1.3487, 1.3397 and 1.3392, while a mildly positive 14-day Relative Strength Index around 57 suggests buyers retain control without yet venturing into overbought territory.

On the topside, initial resistance is seen at the former rising trend-line break around 1.3634, and a daily close above this level would open the way for a more decisive continuation higher. On the downside, any pullback is likely to find first demand near 1.3487, ahead of the 1.3424 triple simple moving average region, with deeper support aligning at 1.3397 and 1.3392, where the prior trend lines now reinforce the broader bullish structure.

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

• EUR/USD tumbles toward 1.1595 as Kevin Warsh’s hawkish-leaning Jackson Hole remarks boost the US Dollar.
• Markets now price in around a 57% chance of a September Fed rate hike, sharply up from 36% before Warsh’s speech.
• Warsh puts price stability firmly in focus, arguing that financial conditions are hardly restrictive and underlying inflation has yet to meaningfully improve.

EUR/USD falls sharply toward 1.1595 on Friday at the time of writing, losing 0.48% on the day, as the US Dollar (USD) rallies following Federal Reserve (Fed) Chair Kevin Warsh’s speech at the Jackson Hole Symposium. Warsh stresses that the central bank’s predominant focus should currently be on price stability, prompting markets to increase bets on a September interest-rate hike.

Warsh says the Fed needs to be confident that underlying inflation is moving toward its objective, adding that policymakers “have work to do” otherwise. The Fed Chair also says he would be “hard-pressed” to describe current financial conditions as restrictive, while noting that credit and loan markets show few signs of monetary policy restraint.

The comments reinforce the view that the Fed could maintain a restrictive stance as it seeks to bring inflation sustainably back to target. Warsh says that this summer’s inflation figures have been better than expected but have not convinced him that underlying inflation trends have meaningfully changed. He reiterates that the Fed’s 2% Personal Consumption Expenditures (PCE) inflation target is “firm and fixed.”

Warsh also strikes an upbeat tone on economic activity, saying that he is impressed by the overall performance of the United States (US) economy, which appears to have strengthened. He describes consumer spending as healthy and the labor market as stable, while highlighting rapidly rising business investment.

The hawkish-leaning remarks trigger a repricing of Fed expectations. According to the CME FedWatch Tool, markets now assign around a 57% chance to an interest-rate hike at the September meeting, up from roughly 36% before Warsh’s speech. The sharp repricing puts a September rate hike firmly back on the table, reinforcing the US Dollar’s bullish reaction.

The shift supports the Greenback, with the US Dollar Index (DXY), which tracks the value of the US Dollar against a basket of six major currencies, rising 0.44% to around 99.55 at the time of press.

Meanwhile, US data released on Friday provide a mixed picture. The preliminary Nonfarm Payrolls (NFP) Benchmark Revision from the Bureau of Labor Statistics (BLS) shows a downward revision of 79K jobs, or 0.1%, to total nonfarm employment for the twelve months through March. The relatively modest adjustment does not materially alter the overall picture of the US labor market over the period and may offer some reassurance to investors who had feared a larger downgrade, particularly after last year’s much steeper downward revision of 911K jobs.

The University of Michigan Consumer Sentiment Index for August is revised higher to 51.7 from the preliminary estimate of 51, although it remains below July’s 55.2. The Expectations Index is also revised upward to 51.5 from 50.6 but declines from 55.4 in July.

On the inflation front, the University of Michigan’s one-year Consumer Inflation Expectations ease to 4% from 4.3%, while the five-year measure remains unchanged at 3.3%. The moderation in short-term expectations offers some relief on the inflation front but does little to offset the US Dollar’s positive reaction to Warsh’s emphasis on price stability.

EUR/USD technical analysis

In the one-hour chart, EUR/USD trades at 1.1605, extending a bearish bias as the pair holds beneath the 100-hour simple moving average (SMA) at 1.1658 and the 200-hour SMA at 1.1655, keeping the recent downtrend intact. The break below the descending channel reference at 1.1629 reinforces overhead pressure, while the Relative Strength Index (RSI) around 24 shows oversold momentum that hints at the risk of corrective bounces but not yet a change in the broader bearish tone.

On the topside, initial resistance aligns near 1.1614, ahead of the former trend-line at 1.1629, followed by a thicker supply zone between the 200-hour SMA at 1.1655 and the 100-hour SMA at 1.1658, ; a sustained move above these levels would be needed to ease immediate downside pressure. On the downside, next support emerges at 1.1585, with a break there exposing the lower horizontal floor at 1.1565, where sellers could pause before contemplating further declines.

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

ING’s Adam Antoniak expects Poland’s 2Q26 GDP flash estimate to be confirmed at 3.8% year-on-year, with fixed investment rebounding strongly thanks to EU and RRF-funded projects. Private consumption is seen slowing slightly as higher fuel prices and weaker wage growth weigh on purchasing power. August CPI is projected at 3.1% with core inflation stable at 3.1%.

Investment-led expansion offsets softer consumption

"We expect the flash estimate of Poland’s 2Q26 GDP to be confirmed at 3.8% YoY on 31 August. Statistics Poland will also publish a composition of economic growth. We estimate that private consumption growth eased to 3.0% YoY from 3.3% YoY in 1Q26 as higher fuel prices and further slowdown in wage growth put pressure on purchasing power."

"At the same time, fixed investment growth increased to 8.5% YoY from a disappointing 2.4% YoY in the previous quarter. Projects financed by the EU funds (including RRF) accelerated, and data on investment outlays of large companies in 1H26 point to strong investment activity in 2Q26."

"Monday also brings August CPI inflation, which probably inched up to 3.1% YoY from 3.0% YoY in July. We estimate that core inflation remained unchanged at 3.1% YoY and the slightly higher contribution from fuel prices to annual CPI was probably almost fully cancelled out by the negative impact of food deflation that likely deepened."

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