Forex News
Yemen’s Iran-backed Houthi rebels are considering imposing fees on commercial ships sailing through the southern Red Sea, Reuters reported on Wednesday. This development came a week after the Houthi declared a naval blockade on Saudi Arabia.
The source said Houthi officials were looking into imposing fees on most traffic through the narrow Bab el-Mandeb gateway, which links the southern Red Sea with the Gulf of Aden. No timeframe was given at this stage for implementation, they added.
The objectives of such a move would be to normalize the practice of imposing fees on international waterways and raise pressure on the US.
Market reaction
Crude oil prices attract some buyers following these headlines. At the time of writing, the West Texas Intermediate (WTI) is up 6.33% on the day at $83.32.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
US President Donald Trump said that he will order heavy strikes on Iran in retaliation for its “surprise attack” on US forces overnight, Bloomberg reported on Wednesday.
“We’ll be hitting them hard,” said Trump. "They're going to get a beating,” he added.
Iranian media stated that Iran’s Islamic Revolutionary Guard Corps (IRGC) targeted a base in Jordan in response to “aggressive US actions.” The US and Saudi Arabia also struck Iran-backed militants in Iraq after Riyadh said it intercepted drones launched by Iraqi groups that were targeting its oil facilities.
Market reaction
Crude oil prices attract some buyers following these headlines. At the time of writing, the West Texas Intermediate (WTI) is up 6.17% on the day at $83.20.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- Gold price gains traction to near $4,095 in Thursday’s early Asian session.
- Fed held the benchmark federal funds rate in a range of 3.5% to 3.75% at its July policy meeting.
- Trump said the US would strike back at Iran after a recent attack that targeted a military base in Jordan.
Gold price (XAU/USD) rebounds to around $4,095 during the early Asian session on Thursday. The precious metal edges higher after the US Federal Reserve (Fed) decided to leave interest rates unchanged, a hold delivered over three dissenting votes and against a fresh eruption of fighting between the US and Iran.
As expected, the Fed left the Federal Funds Rate in its current target range between 3.50% and 3.75% at its July policy meeting on Wednesday. However, the statement showed that three committee members voted for a 25-basis-point rate hike at this meeting.
Fed Chairman Kevin Warsh said during the press conference that tightening in the market has done quite a bit of work for policymakers. He added that the committee will be quick to act if inflation pressures accelerate.
Iran’s Islamic Revolutionary Guard Corps (IRGC) fired ballistic missiles overnight at a US airbase and command center in Jordan, all of them intercepted, per Bloomberg. The US and Saudi Arabia also struck Tehran-backed militias in Iraq, ending a days-long pause in hostilities.
US President Donald Trump said on Wednesday that Washington would strike back at Iran after a recent attack that targeted a military base in Jordan. “We’ll be hitting them hard,” said Trump. “They’re going to get a beating,” he added. Ongoing tensions in the Middle East could push crude oil prices up and prompt central banks to hold rates at elevated levels for longer, weighing on gold's appeal as a non-yielding asset.
Gold outlook supported as Commerzbank questions Fed hike pricing
Analysts at Commerzbank acknowledge the recent weakness in Gold but argue that the downside may be overdone, seeing scope for prices to rebound from here. They stress that “there is potential for the gold price to recover from its current level,” as they “consider current market expectations of Fed rate hikes to be excessive” and instead “anticipate that Fed interest rates will remain unchanged until the end of the year.” In their view, a less aggressive Fed path than currently priced would provide a more supportive backdrop for Gold over the coming quarters.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- GBP/JPY rebounds from ten-day low as buyers reclaim 218.00.
- RSI momentum favors upside, though intervention risk remains elevated.
- Break above 219.00 exposes 219.57/61 and 220.00 next.
The GBP/JPY advances by over 0.30%, rising above 218.00, as risk appetite improves amid overall US Dollar weakness following the Federal Reserve's monetary policy decision. The pair trades near 218.50 after hitting a low of the day (LOD) of 217.16.
GBP/JPY Price Forecast: Technical outlook
The cross-pair was headed to extend its losses after reaching a ten-day low. However, the GBP/JPY followed the direction of the GBP/USD pair after the Fed’s decision.
Momentum favours further upside as depicted in the Relative Strength Index (RSI). Hence, the path of least resistance is tilted to the upside, but a potential intervention in the FX markets by Japanese authorities could open the door for further downside.
For a bullish continuation, the first resistance for GBP/JPY would be the 219.00 psychological level. Above this area sits the confluence of the July 15 and 15 daily peaks at 219.57/61, followed by the 220.00 milestone.
On the downside, the first support is 218.00. A breach of the latter will expose the low of the day (LOD) at 217.16, followed by the April 30 daily high-turned-support at 216.60. Once hurdled, the next stop is the 50-day Simple Moving Average (SMA) at 215.62.
GBP/JPY Price Chart – Daily
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- USD/JPY trades near 163.50 after surrendering roughly 60 pips between the 18:00 GMT decision and a session low printed during the press conference.
- A nine-to-three vote with three dissents for a hike pulled the July tail out of the front end without taking the hike off the calendar, and the long end moved the other way entirely.
- Japan's currency authorities have said nothing since a record spring intervention and the Bank of Japan reports Friday, so one session of Dollar softness is the whole reprieve.
The Federal Reserve (Fed) held its target range at 3.50% to 3.75% for a fifth consecutive meeting at 18:00 GMT, and the pair did what a market short the Yen against a 1.00% policy rate does when a hike it partly paid for fails to arrive. Price slipped from a session high just short of 164.00 to the 163.50 area, then to just above 163.00 while the chair took questions. It trades near 163.50 late, down 0.24% on the day.
The hold dated the hike rather than cancelling it
The decision came on a nine-to-three vote, three voting members dissenting in favour of a quarter point, the closest call in years. Futures carried a hike tail near 36% into the meeting, up from roughly 11% in mid-July, and that premium came out of the front end on the announcement. The two-year Treasury yield fell about four basis points while the thirty-year rose more than nine.
That divergence between the curve's two ends is the whole story for a carry pair, because a hold with three hawkish dissents dates a hike rather than cancelling it. September already carried odds near 80% before the vote, so the Yen's reward is one session of relief while the Dollar collects a steeper curve.
A reaction function nobody will describe
The press conference was the more consequential half of the afternoon and produced nothing a trader could price. Fed Chair Warsh refused the word pause for what the committee had just done, declined to say what would trigger a September move, and told the room that participants are learning to react to data rather than the central bank. One reporter was reduced to asking what the news actually was.
The reticence is deliberate policy rather than an accident of temperament, given a June statement cut to roughly 130 words, guidance struck, the chair's own dot withheld, and a July statement barely departed from it. A Fed that will not describe its reaction function is worse for a currency defence than a hawkish one, because it hands every release before 16 September the weight guidance used to absorb.
Tokyo buys a day at a record price
The gap the Yen has to survive runs roughly 275 basis points, a 1.00% Bank of Japan policy rate against a Fed at 3.50% to 3.75%, and with underlying inflation near 2.8% the Japanese real policy rate is negative on every measure. Japan's Ministry of Finance spent about 11.7 trillion Yen buying its own currency between late April and late May, and the pair sits a full figure above where that campaign left it.
Positioning explains why the defence keeps failing, with speculative Yen shorts above 150K contracts at the end of June, the most bearish stance in years. The 162.00 level desks treated as the defence line was breached without response, and currency research now describes that line as having disappeared. Silence is the doctrine, the top currency official quiet since the spring operation while the finance minister's promises of decisive action produce no durable bid.
The Yen stopped trading the differential
The pair recovered half its post-decision drop inside two hours because the transmission channel has moved. The International Monetary Fund flagged in April that the exchange rate had decoupled from the narrowing US-Japan spread, and what fills the gap is Japan's own fiscal premium, with thirty-year and forty-year Japanese government bond yields above 4% against public debt beyond 230% of Gross Domestic Product. A rising US long end is therefore actively Yen-negative, which is what the afternoon delivered.
Japanese Prime Minister Takaichi's fiscal stimulus advocacy and her criticism of higher rates have widened the premium markets charge to hold Japanese paper, and her approval rating has slumped to its lowest since she took office. Officials concede that bond-market anxiety has blunted efforts to talk down Yen bears. A currency cannot be defended against its own sovereign spread.
Crude Oil compounds it, with the barrel up more than 20% this month on renewed Hormuz disruption and Japan importing all of it, so the war premium arrives once in Dollars and again in the exchange rate. Yen-denominated import prices ran 25.5% higher YoY in May, and a funding currency that cannot rally while the Dow trades 1,100 points lower is saying more than any intervention warning.
What Thursday and Friday settle
Thursday at 12:30 GMT brings the June Personal Consumption Expenditures price index, the release September hangs on, with core consensus at 0.2% MoM and 3.3% YoY from 3.4%, headline 3.7% YoY from 4.1%, preliminary Q2 GDP at 2.1% annualized, and jobless claims at 200K against 187K.
Tokyo Consumer Price Index figures land at 23:30 GMT the same evening, expected at 1.7% YoY excluding fresh food against 1.6% prior, which is the entire licence available before Friday's Bank of Japan decision. Consensus has that as a hold at 1.00%, with the quarterly Outlook Report at 03:00 GMT and the governor's press conference at 06:30 GMT, leaving his language on an October or December move as Tokyo's only instrument.
Levels and bias
Resistance: The session high stopped just short of 164.00, where the July peak also sits, a shade under the handle and the strongest the pair has traded since December 1986. Above it, 165.00 is where intervention chatter concentrates, which makes it a target and a hazard at the same time.
Support: 163.00 is the pivot, broken on 21 July for the first time in nearly four decades, and it contained the post-decision flush with the session low printing just above it. Beneath that, 162.00 is the June breach level, with the 50-day Exponential Moving Average near 161.50 the first structural line and the 200-day near 158.00 far below.
Bias: Bullish while 163.00 holds. The hold delayed a hike rather than removing it, the long-end differential is widening, Tokyo has no tool that survives contact with a September Fed, and the daily Stochastic Relative Strength Index near 56 leaves room in both directions, so the path of least resistance runs at 164.00 and then toward 165.00. A daily close beneath 163.00 invalidates and turns the focus to 162.00.
USD/JPY daily chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Here is what you need to know for Thursday, July 30:
The US Dollar (USD) falls sharply during the American session on Wednesday after the Federal Reserve (Fed) left interest rates unchanged. The Federal Open Market Committee (FOMC) maintained the federal funds target range at 3.50%–3.75% in a divided 9–3 vote. Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan preferred a 25-basis-point increase. The Fed said that economic activity continues to expand at a solid pace, while inflation remains elevated partly because of energy-related supply shocks.
The US Dollar Index (DXY) fell around 0.5% and trades near 100.90. Despite the hawkish dissenting votes, the decision to remain on hold raised doubts about whether enough policymakers will support a rate increase at the September meeting. The immediate reaction also pushed US Treasury yields lower and encouraged broad selling of the Greenback.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.67% | -0.48% | -0.21% | -0.44% | 0.32% | -0.11% | -0.69% | |
| EUR | 0.67% | 0.20% | 0.45% | 0.24% | 1.03% | 0.57% | -0.01% | |
| GBP | 0.48% | -0.20% | 0.28% | 0.05% | 0.83% | 0.37% | -0.20% | |
| JPY | 0.21% | -0.45% | -0.28% | -0.22% | 0.57% | 0.10% | -0.47% | |
| CAD | 0.44% | -0.24% | -0.05% | 0.22% | 0.78% | 0.33% | -0.25% | |
| AUD | -0.32% | -1.03% | -0.83% | -0.57% | -0.78% | -0.47% | -1.01% | |
| NZD | 0.11% | -0.57% | -0.37% | -0.10% | -0.33% | 0.47% | -0.55% | |
| CHF | 0.69% | 0.00% | 0.20% | 0.47% | 0.25% | 1.01% | 0.55% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD advances around 0.7% and trades near 1.1470, reaching its highest area in more than a week as the US Dollar weakens. On Thursday, investors will monitor preliminary second-quarter Gross Domestic Product figures from Spain, Germany, Italy, and the broader Eurozone. Germany will also publish preliminary July inflation data, while Eurozone economic sentiment and unemployment figures will provide additional indications about the regional outlook.
GBP/USD rises around 0.5% and trades near 1.3360 ahead of the Bank of England’s monetary policy announcement on Thursday. The BoE is expected to leave its Bank Rate unchanged at 3.75%. Attention will focus on the voting split, the Monetary Policy Report and Governor Andrew Bailey’s comments for signals about whether policymakers remain open to another interest rate increase.
USD/JPY falls around 0.2% and trades near 163.50 as the broad decline in the Greenback allows the Japanese Yen to recover modestly. However, the pair remains close to multi-decade highs due to the wide interest rate differential between the United States and Japan. Thursday’s Japanese calendar will feature Tokyo inflation, unemployment, and Retail Sales data.
AUD/USD remains under pressure near 0.6945, falling around 0.4% despite the weaker US Dollar. The Australian Dollar continues to suffer after June inflation undershot market expectations, sharply reducing the likelihood of another Reserve Bank of Australia rate increase. Australia will publish June Building Permits on Thursday after the indicator declined 1.1% in May.
West Texas Intermediate (WTI) Oil surges more than 7% and trades near $85 per barrel as the conflict in the Middle East intensifies. The United States and Saudi Arabia launched strikes against Iran-backed groups in Iraq following attacks on Saudi energy facilities, while Iran targeted US forces in Jordan. The renewed escalation has raised concerns about regional supply disruptions and reduced expectations of a rapid diplomatic resolution.
Gold rises around 0.7% and trades near $4,056 per troy ounce. The precious metal benefits from the sharp decline in the US Dollar and renewed safe haven demand amid the Middle East conflict. Lower US Treasury yields following the Fed decision also support the non-yielding metal.
Thursday’s United States calendar will include preliminary second quarter GDP and the Fed’s preferred Personal Consumption Expenditures inflation measures. Annualized GDP growth is expected to remain at 2.1%, while Core PCE inflation is forecast to rise 0.2% MoM and 3.3% YoY in June. Initial Jobless Claims are expected to increase to 200K from 187K, while Personal Income and Personal Spending are both forecast to rise 0.3%.
- Silver steadies as Fed hold weakens Dollar despite yield spike.
- Three Fed dissenters favored hikes, keeping inflation worries elevated.
- Warsh reiterates inflation focus but offers limited policy guidance.
Silver price clings to gains on Wednesday late in the North American session, as the Federal Reserve held rates unchanged, which, instead of strengthening the Dollar, weakened it, while US Treasury yields spiked. The XAG/USD trades at $57.17, barely unchanged.
XAG/USD steadies near $57.00 as Fed dissent, surging long-end yields and Dollar weakness drive choppy trading
The Fed's monetary policy statement was barely changed. The central bank noted that the economy is growing steadily despite uncertainty stemming from the US-Iran war. The central bank revealed that productivity growth and capital investment are robust, further strengthening the jobs market.
Worth mentioning that the decision was split, with three dissenters led by the Cleveland Fed's Beth Hammack, Minneapolis Fed's Neel Kashkari, and Dallas Fed's Lorie Logan, who favoured a 25-basis-point rate hike.
The press conference didn’t provide any remarks worth mentioning. Although the Fed Chair, Warsh, revealed that he’s committed to tackling inflation, he dodges the question of how the Fed will achieve its 2% goal. Meanwhile, the US 30-year Treasury yield spiked by more than 10 basis points to its highest level in almost 20 years, though it failed to boost the Greenback, which is tumbling over 0.40%, according to the US Dollar Index (DXY).
The DXY, which tracks the performance of the US Dollar against six currencies, is down at 100.93, after hitting a six-day low, despite the rise of US yields.
Ahead, the US economic docket will feature the final reading of Q2 2026 US GDP, the release of the Fed’s preferred inflation gauge, and the University of Michigan Consumer Sentiment.
XAG/USD Price Forecast: Technical Outlook
In the daily chart, XAG/USD trades at $57.15, keeping a bearish near-term tone as spot holds well below the latest simple moving average cluster around $64.33 and under a series of descending trend-line resistances, including the more recent lines derived from the $78.83 and $77.02 peaks. The Relative Strength Index (14) hovers near 41, hinting at subdued downside momentum, but with price compressed between immediate trend-line support near $55.98 and the overhead moving averages, the metal remains capped within a broader descending channel.
On the topside, initial resistance aligns with the former support trend line projected from $61.01, ahead of the confluence of the simple moving average triple and a descending trend-line break around $64–65, while a more significant supply zone emerges toward the $80.76 region associated with the longer-term downtrend from $96.62. On the downside, a clean drop through the nearby trend-line support at roughly $55.98 would expose lower levels and extend the prevailing bearish phase, whereas holding above this line could see XAG/USD attempt another corrective bounce back toward the clustered resistance band overhead.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
The Fed left interest rates unchanged at 3.50%-3.75%, but the decision carried a distinctly hawkish edge as three officials voted for an immediate 25-basis-point increase. Chair Kevin Warsh reinforced that message, insisting there was no tolerance for a softer inflation target and warning that the Fed would not hesitate to act.
Recap
The FOMC kept rates steady as expected, judging that economic activity continued to expand at a solid pace and that the labour market remained stable. Productivity growth and capital investment were described as strong, while inflation remained elevated, partly because of supply shocks in sectors including energy.
The 9-3 vote exposed a clear appetite for tighter policy within the Committee: Beth Hammack (Cleveland), Neel Kashkari (Minneapolis) and Lorie Logan (Dallas) all dissented in favour of raising rates by 25 basis points.
Warsh nevertheless sought to play down the divisions, describing the discussion as active and robust and arguing that the dissents did not capture its full substance. He said there was broad agreement on the difficult questions and expressed confidence that the current Committee was the right team to tackle high inflation.
His message on price stability was uncompromising. After five years of elevated inflation, Warsh acknowledged that the public may have come to believe the Fed was comfortable with inflation above 2%, but rejected that notion outright: there is only one target, and the Fed intends to deliver it.
At the same time, he avoided tying policy to a predetermined path. Warsh said the Committee was steering clear of forecasting and would instead focus on inflation trends, the extent to which supply shocks were spreading and the information coming from financial markets. Recent inflation data had offered some encouragement, but not enough to declare victory ahead of the next decision in seven to eight weeks.
Overall assessment
Hawkish hold. The Fed did not raise rates, but the three dissents, its emphasis on persistent inflation, and Warsh’s readiness to act left the door clearly open to tightening. Solid growth and employment also give policymakers room to remain focused on restoring price stability.
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.
- WTI trades near $83 per barrel after rebounding sharply from an intraday low of $78.90.
- Escalating attacks involving the United States, Saudi Arabia and Iran raise concerns about possible disruptions to regional Oil production and transportation.
- Oil is struggling to preserve its earlier gains after the Federal Reserve left interest rates unchanged at 3.50%–3.75%.
West Texas Intermediate (WTI) Oil stayed muted near $83 per barrel following the Federal Reserve's (Fed) decision to hold interest rates constant on Wednesday afternoon. The price consolidation comes after recovering sharply from an intraday low near $78.90.
Retaliatory attacks involving the United States (US), Saudi Arabia, and Iran intensify concerns about potential disruptions to regional oil supplies. Crude prices are failing to retain their gains after the Federal Reserve (Fed) left interest rates unchanged at 3.50%–3.75%.
Crude Oil prices rose sharply during the early American session on Wednesday. Saudi Arabia launched attacks against Iran-aligned groups in Iraq alongside the United States in retaliation for drone strikes by Iran-aligned militias on Saudi Oil facilities. Iran later claimed responsibility for an attack on a US military base in Jordan.
US President Donald Trump reiterated that Washington would respond forcefully to Iranian attacks against US targets in Jordan, according to Fox News. His comments added to concerns that the conflict could broaden further and potentially disrupt energy production or transportation across the region.
Short-term technical analysis:
On the 4-hour chart, WTI trades at $83.48. The near-term bias stays mildly bullish as price holds above both the 20-period Simple Moving Average (SMA) at around $82.32 and the 100-period SMA near $80.15, suggesting a constructive underlying trend after the recent pullback. The Relative Strength Index (RSI) hovers close to 52, indicating neutral momentum and hinting that bulls retain control but lack a strong impulsive push for now.
On the topside, immediate resistance emerges at the horizontal barrier around $84.24, where a break would expose higher levels beyond the current range. On the downside, initial support is seen at the 20-period SMA near $82.32, reinforced by horizontal backing around $82.29, while deeper cushions sit at $81.51 and $80.99, ahead of the broader trend floor defined by the 100-period SMA around $80.15.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- USD/CAD breaks to a session low just beneath 1.4050 on the Federal Reserve hold, a 76-pip range with the entire move landing after 18:00 GMT.
- The Bank of Canada's Summary of Deliberations published 30 minutes ahead of the decision and moved nothing.
- A December Bank of Canada increase remains the priced base case while the Federal Reserve's own path just flattened at every meeting.
The Federal Reserve held its target range at 3.50% to 3.75% at 18:00 GMT on a 9-3 vote, with three voting members preferring an immediate quarter-point increase, and USD/CAD fell out of a session-long range to print its low just beneath 1.4050. The Canadian half of the day, a Summary of Deliberations at 17:30 GMT, produced nothing at all.
Only half of the gap moves
The standing case for this rate is that it trades the expected policy gap rather than the posted one, and the calendar rarely offers a cleaner demonstration than this. Both central banks were in play inside a single hour. The Canadian document landed at 17:30 GMT into a rate sitting near the 1.4100 handle and left it exactly there, unmoved.
Thirty minutes later the American decision took roughly 60 pips out of it. A December Bank of Canada increase has been the priced base case since the mid-July captures, so the Canadian leg of the expected gap has not shifted in a fortnight. Every basis point of movement in the spread has come from the side of the border that just cut its own hike odds.
The Federal Reserve flattened its own path
At least one increase by 16 September now prices near 64% against roughly 80% on the captures taken before the meeting, with October near 75% and December near 85%. The probability of at least two increases by 9 December has fallen to roughly 42% from 57%, and the most likely December outcome is one step rather than two. That is a meaningful narrowing of the expected gap from the American side.
It happened on a day the committee produced its first three dissents of this chairmanship and a statement that scored well above its own running average on the hawkish measure. The Chair declined to convert any of it into guidance, repeating that this committee is not in the forecasting business and that markets are better served reacting to developments unfiltered. Three hawks with no reaction function behind them do not move a curve.
The statement's new energy language cuts across the border in an unhelpful direction for the hawkish Canadian case. Washington now writes energy into its inflation paragraph while treating the shock as something to look through, and Ottawa's July projection was conditioned on a Crude Oil futures curve that has moved twice since it was finalised. Both central banks are now holding on an energy conditional that neither of them controls.
The reflexive loop runs the other way for once
A firmer Loonie is not a neutral event for the Bank of Canada. The July projection assumed the currency averaging roughly 71 cents US over the horizon, and every cent below that assumption imports inflation and hardens the December case. A move back toward 1.4000 works in the opposite direction, easing the imported-price impulse that has been doing the heavy lifting in the hawkish argument.
The trap in that logic is that it is self-limiting. If a stronger currency softens the Canadian inflation path, the December hike gets less certain, the expected gap widens again and the rate finds a floor. This is why the pair keeps failing to trend far in either direction, and why the 1.4000 handle has held as the base of the range since the 50-day band was reclaimed in July.
Two prints and a border
Canadian Gross Domestic Product for May publishes Friday at 12:30 GMT, with the calendar carrying 0.2% MoM against a 0.5% prior. That is the only domestic input of the week, and on a rate that has spent a fortnight ignoring Canadian data it is unlikely to be the thing that decides the range.
The American docket lands first and matters more. Thursday at 12:30 GMT brings the June Personal Consumption Expenditures price index, with core seen at 0.2% MoM and 3.3% YoY from 0.3% and 3.4%, preliminary second-quarter Gross Domestic Product at 2.1% and initial jobless claims at 200K against a 187K prior. A soft PCE print extends today's move and puts the 1.4000 handle in play before the week is out.
Levels
Resistance: The 1.4100 handle marks the session high and the top of the range that just broke. Above it the 1.4150 shelf is the reclaim line toward the year high near 1.4250.
Support: The 1.4000 handle is the objective, with the 50-day exponential moving average band tracking just above it. Beneath that the 1.3950 area is the first shelf.
Bias: Bearish beneath 1.4100. Sell rallies with the 1.4000 handle as the objective, invalidation on a daily close back above 1.4100.
USD/CAD 5-minute chart
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
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