Forex News
- EUR/USD stalls near 100-day SMA after reclaiming 50-day average.
- Bullish RSI keeps upside bias alive despite Monday’s pullback.
- Break above 1.1600 exposes 200-day SMA and 1.1700.
The Euro is poised to end Monday’s session with losses of about 0.13% against the Greenback, as recent news points to a delay in talks between the US and Iran, while, from a technical perspective, EUR/USD stalled at the 100-day Simple Moving Average (SMA) near 1.1568.
EUR/USD Price Forecast: Technical outlook
Overall, the EUR/USD is poised to consolidate further, though it is slightly tilted to the upside after buyers reclaimed the 50-day SMA. Momentum confirms the short-term upward bias, as indicated by the Relative Strength Index (RSI).
That said, the first resistance for EUR/USD is the 100-day SMA. A breach of the latter will expose 1.1600, followed by the 200-day SMA at 1.1629. Once those two levels are removed, the next target is the 1.1700 psychological figure.
On the flip side, if EUR/USD drops below 1.1500, a pullback towards the 50-day SMA at 1.1469 is on the cards. Below, the next area of interest is the 1.1400 mark, followed by the July 28 swing low of 1.1353.
EUR/USD Price Chart – Daily
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.04% | 0.00% | 0.02% | 0.00% | 0.00% | -0.00% | -0.04% | |
| EUR | -0.04% | 0.01% | 0.00% | -0.00% | -0.02% | 0.02% | -0.04% | |
| GBP | -0.00% | -0.01% | 0.00% | 0.02% | 0.00% | 0.00% | 0.00% | |
| JPY | -0.02% | 0.00% | 0.00% | -0.03% | -0.00% | 0.37% | -0.00% | |
| CAD | -0.01% | 0.00% | -0.02% | 0.03% | 0.03% | 0.38% | 0.01% | |
| AUD | 0.00% | 0.02% | 0.00% | 0.00% | -0.03% | 0.00% | 0.03% | |
| NZD | 0.00% | -0.02% | -0.01% | -0.37% | -0.38% | -0.01% | 0.03% | |
| CHF | 0.04% | 0.04% | -0.00% | 0.00% | -0.01% | -0.03% | -0.03% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Cleveland Fed President Beth Hammack crossed the wires on Monday and was hawkish, noting that the current rate is not “meaningfully restricting the economy” and that there is a need for some number of rate hikes.
Hammack said, “I would say in general; one 25 basis point move probably doesn't do a whole lot for the economy,” at an interview with Yahoo! Finance. She added that when talking to businesses, she is not hearing “that they're sensing any restraint from investments in growth based on where interest rates are.”
Beth Hammack stressed that the longer the Fed waits, the longer it misses the US central bank's 2% inflation goal.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | -0.11% | 0.94% | -0.01% | 0.18% | 0.22% | 0.29% | |
| EUR | -0.13% | -0.24% | 0.79% | -0.15% | 0.03% | 0.09% | 0.16% | |
| GBP | 0.11% | 0.24% | 1.05% | 0.09% | 0.31% | 0.32% | 0.39% | |
| JPY | -0.94% | -0.79% | -1.05% | -0.95% | -0.78% | -0.76% | -0.65% | |
| CAD | 0.01% | 0.15% | -0.09% | 0.95% | 0.12% | 0.25% | 0.28% | |
| AUD | -0.18% | -0.03% | -0.31% | 0.78% | -0.12% | 0.03% | 0.10% | |
| NZD | -0.22% | -0.09% | -0.32% | 0.76% | -0.25% | -0.03% | 0.07% | |
| CHF | -0.29% | -0.16% | -0.39% | 0.65% | -0.28% | -0.10% | -0.07% |
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).
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.
- US 10-year yield jumps as WTI surge revives inflation fears.
- Weak NFP trims Fed hike bets before key CPI release.
- Iran talks setback boosts Oil and supports Dollar recovery.
US Treasury yields rose on Monday as traders braced for the release of US inflation figures this week, following a worse-than-expected Nonfarm Payrolls report last Friday. Headlines that read “Iran rules out talks with Trump, says will wait until his term ends in 2029,” poured cold water on negotiations for a swift reopening of the Strait of Hormuz.
US yields rise as Hormuz deal hopes fade, Oil surges and traders brace for inflation data
High energy prices sent US yields higher across the curve. The US 10-year benchmark note increases nearly six basis points to 4.705%, as West Texas Intermediate (WTI), the US crude benchmark, soars over 6.70% to $82.29.
July’s Consumer Price Index (CPI) is expected to decline slightly from 3.5% to 3.4% YoY. The core CPI, which excludes volatile items, is also projected to decrease from 2.6% to 2.5% YoY. The following day, on August 13, the Producer Price Index is similarly expected to ease.
The last US jobs report revealed some cracks, with the economy slashing 23K jobs, while the numbers for May and June were revised downward by 100K. This prompted investors to trim their hawkish bets on the Federal Reserve and now expect the US central bank to keep rates steady at 3.50%-3.75% towards the end of the year.
Prime Terminal data revealed that the chances of the Fed keeping rates unchanged at the September meeting stand at 65%, while the chances of a 26-basis-point rate hike stand at 35%.
The US Dollar Index (DXY), which tracks the performance of the buck’s value against six currencies, is up 0.20% at 99.81.
Alongside the release of US inflation data, traders are eyeing Initial Jobless Claims for the week ending August 8 and the University of Michigan (UoM) Consumer Sentiment.
US 10-year Treasury yield chart
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
Citi Mexico released the Expectations Survey on Monday, in which the central bank polled 35 economists to gather their forecasts for monetary policy, the USD/MXN exchange Rate, inflation expectations, and economic growth.
Citi’s survey shows that the majority of the economists polled expect monetary policy to remain steady at 6.50%. Seven of those 35 expect the next movement to be a rate hike, and six expect a cut further ahead. The rest expect policy to remain steady.
The USD/MXN exchange rate is expected to end at 17.90 in 2026, unchanged. For 2027, the consensus suggests a depreciation of the Mexican Peso (MXN), with the exchange rate seen at 18.50, with expectations of trading within a range of 17.40-19.95.
Regarding inflation expectations for July, the Consumer Price Index (CPI) is projected at 3.13% YoY, down from 3.37% in the previous survey, while core CPI is seen at 3.94% YoY, lower than the previous survey's 4.03%.
For the medium term, CPI is projected to end at 4.02% YoY, down from 4.09%, while Core CPI, the component, is expected to drop from 4.10% to 4%.
The Mexican economy is projected to grow 1.2% in 2026, up from 1.1% in the last survey, while for 2027, the projections show the Gross Domestic Product (GDP) ending at 1.8%, unchanged from the previous survey.
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- NZD/USD eases toward the 0.5880 area, unable to hold the upper end of its recent range.
- A firm US Dollar, underpinned by Strait of Hormuz safe-haven demand and a surging Oil price, keeps the Kiwi on the back foot.
- Wednesday's US Consumer Price Index is the next catalyst.
The New Zealand Dollar (NZD) trades near 0.5900 against the US Dollar (USD) on Monday, giving back a little ground after a run toward multi-day highs last week. The Kiwi could not sustain the recent upside impulse and has drifted back into the high-0.5800s, weighed down by a Greenback that has stayed firm across the board.
The Strait of Hormuz remains shut, West Texas Intermediate (WTI) Oil has surged close to $81.50 per barrel, and the safe-haven bid tied to the US-Iran standoff has pushed the US Dollar Index (DXY) close to the 100 threshold.
With US President Donald Trump and Tehran still trading demands rather than closing a deal, the waterway stays blocked and the risk premium stays in the market. That mix of a bid US Dollar and unresolved tension is exactly the environment in which NZD/USD struggles to build momentum, regardless of the domestic picture.
Short-term technical analysis:
On the 4-hour chart, NZD/USD trades at 0.5881. The pair holds above the 100-period Simple Moving Average (SMA) at 0.5840 while oscillating around the 20-period SMA near 0.5881, hinting at a modest bullish bias as dips continue to attract buying interest. The Relative Strength Index (RSI) hovers just above the neutral 50 line around 52, suggesting steady but unspectacular upside momentum rather than an overextended move.
On the topside, initial resistance emerges at 0.5884, followed by 0.5891 and 0.5901, with higher barriers stacked at 0.5930 and 0.5965, where the rally could begin to stall if buyers lose conviction. On the downside, immediate support is seen at 0.5879, ahead of the 100-period SMA clustered near 0.5840, where a break would weaken the current constructive tone and expose a deeper pullback.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- XAG/USD tops $66 after clearing the 50-day SMA.
- RSI points higher, keeping buyers in near-term control.
- Break above $68.96 exposes $70.00 and 200-day SMA.
Silver (XAG/USD) price climbs over 3% on Monday even though US Treasury yields rose, with the white metal refreshing seven-week highs at $66.07. At the time of writing, XAG/USD trades at $65.76 with buyers eyeing key resistance levels.
XAG/USD Price Forecast: Technical outlook
In the short term, Silver continues to consolidate after clearing the 50-day Simple Moving Average (SMA) at $61.95, opening the door to further upside. However, the market structure continues to indicate that sellers are in charge unless XAG/USD clears the June 17 cycle high of $71.56, which would open the door to further upside.
Buyers continued to gain momentum, as indicated by the Relative Strength Index (RSI). Hence, the path of least resistance is upwards.
The first key resistance is the 100-day SMA at $68.96. A breach of the latter will expose the psychological $70.00, followed by the 200-day SMA at $71.30. On further strength, the next stop is the April 17 high at $83.06.
Downwards, the first support is the low of the day at $63.28. Once hurdled, the next stop would be the 50-day SMA at $61.95, followed by a support trendline at around $57.50-$57.75.
XAG/USD Price Chart – Daily
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.
Here is what you need to know for Tuesday, August 11:
The US Dollar (USD) traded broadly firmer on Monday, with the US Dollar Index (DXY) up around 0.2% and holding just above 99.80 as Oil surged more than 6% on the ongoing Strait of Hormuz standoff. Unlike the sessions seen earlier this month, Gold and Silver climbed alongside the Greenback as safe-haven demand and energy-driven inflation risk pulled in the same direction.
The move came with United States (US) President Donald Trump pushing back on Iran's compensation demands over the weekend, saying Tehran should be held responsible for the damage across the region, while Iran denied it was in talks and set its own terms for reopening the Strait. With a deal still out of reach and the US naval blockade redirecting more vessels, the risk premium stayed in Crude and under the US Dollar.
West Texas Intermediate (WTI) Oil jumped more than 6% to trade near $81.70 per barrel as the reopening of the Strait of Hormuz remains uncertain. Gold added around 0.9% to trade near $4,380 as Hormuz delays and looming US inflation data kept traders cautious, while Silver outperformed, rising about 3.50% to near $65.70.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | -0.11% | 0.94% | -0.03% | 0.15% | 0.22% | 0.29% | |
| EUR | -0.13% | -0.24% | 0.83% | -0.18% | 0.00% | 0.08% | 0.15% | |
| GBP | 0.11% | 0.24% | 1.08% | 0.07% | 0.28% | 0.32% | 0.40% | |
| JPY | -0.94% | -0.83% | -1.08% | -0.99% | -0.82% | -0.78% | -0.66% | |
| CAD | 0.03% | 0.18% | -0.07% | 0.99% | 0.12% | 0.27% | 0.31% | |
| AUD | -0.15% | -0.01% | -0.28% | 0.82% | -0.12% | 0.05% | 0.14% | |
| NZD | -0.22% | -0.08% | -0.32% | 0.78% | -0.27% | -0.05% | 0.07% | |
| CHF | -0.29% | -0.15% | -0.40% | 0.66% | -0.31% | -0.14% | -0.07% |
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).
USD/JPY was the biggest mover among the majors, rising more than 0.9% to near the 159.30 region and extending its recovery as higher energy costs and firmer US yields weighed on the Yen.
EUR/USD slipped slightly to trade below 1.1550, unable to hold higher ground as the Middle East tensions lent the Greenback support.
GBP/USD firmed around 1.3500, the lone major to gain on the Dollar, holding the upper end of its recent range.
AUD/USD eased to near 0.7055, getting no lift from the Crude rally as traders squared up ahead of the Reserve Bank of Australia (RBA) decision. Early on Tuesday, the RBA will take center stage. The central bank is widely expected to keep the cash rate at 4.35%, so the focus falls on the accompanying Monetary Policy Statement, the Rate Statement, and Governor Michele Bullock's press conference for any signal on whether the tightening door is still open. The Aussie is set for volatility around the release even with the hold fully priced.
Later in the US session, the ADP Employment Change four-week average is seen near 15K, followed by Existing Home Sales Change for July, forecast at -2.4% MoM. Neither is a first-tier release, but both feed the labor and housing read into midweek.
The main event, however, sits one day further out with US Consumer Price Index (CPI) data due Wednesday. With Oil pushing inflation risk higher and the Federal Reserve (Fed) leaning hawkish, a hot print would hand the DXY another leg, while a soft one would offer retreat.
- DJIA trades near 53,900, on its low in a 200-point range.
- Labour's share of output fell to 52.9%, the lowest since 1947.
- Crude Oil roughly 3% higher near $81 as talks reportedly collapse.
The Dow Jones Industrial Average trades near 53,900 on Monday, lower by three tenths of a percent and pinned to the bottom of a session that has covered barely 200 points, the narrowest daily bar in weeks. Every price of the day sits inside Friday's range, and Friday's sat inside Thursday's. The index spent most of the session waiting for Wednesday's inflation print, and has spent the afternoon reacting to something else entirely.
The largest single-name move of the session again belongs to a company outside the average. Intel (INTC) fell 3% after saying it would sell 15 billion Dollars of common stock, and none of that reaches the index, exactly as none of Tuesday's biggest gain did.
Labour's smallest share since 1947
Thursday's second-quarter productivity report carried the number of the week and almost nobody printed it. The labour share, the portion of output reaching workers as pay, fell to 52.9%, the lowest reading in a series that starts in 1947. Unit non-labour payments, the other half of the same ledger, rose 14% at an annual rate.
An index printing records while payrolls contract is not a contradiction in need of explaining away. Equity is a claim on precisely the share of output that expanded, and the workforce holds the share that shrank. Friday's payroll contraction and last week's high are one piece of arithmetic read from opposite ends.
Wages are not the inflation
The complaint in circulation, that disappointing productivity explains why workers keep losing ground, does not survive the release it is drawn from. Output per hour rose 1.4% in the quarter and 2.2% from a year earlier, and the cycle has compounded at 2.1% a year, matching the long-run rate since 1947. Hourly compensation rose 2.7% and fell 3.1% once consumer prices come out of it.
Unit labour costs rose 1.3% on the same page, which is the awkward line for a committee holding rates against an inflation it cannot trace to pay. The value-added price deflator on that release ran near 7% against those labour costs, leaving energy, tariffs and margin to carry it. Wednesday's print will be argued as a labour-market story and it is not one.
Only Crude Oil sold the peace back
West Texas Intermediate Crude Oil trades roughly 3% higher near $81 and Brent above the $86 handle, and the headlines behind that move hardened as the session wore on. Iran's foreign minister ruled out restarting talks until Washington answers for what Tehran calls breaches of June's framework, the president has since said he intends to demand compensation from Iran, and Tehran is now reported to have abandoned negotiation with this administration altogether for the remainder of the term, out to 2029.
Treat the last of those as unconfirmed and it still changes the trade. A deal that slips postpones a risk premium and a counterparty that leaves the table capitalises it, because a toll regime nobody is negotiating away stops being a headline and becomes a standing cost of moving a barrel. A demand for compensation points the same way, since claims are litigated rather than agreed inside a quarter.
The pressure is administrative rather than rhetorical, and it ran through the financial system again on Friday, when Washington's sanctions office issued two fresh Iranian designations, the eighth action this year aimed at the shadow banking apparatus. The body Tehran created to charge tolls for safe passage through the Strait was itself designated in May, so an Oman-brokered reopening that leaves Iran directing traffic runs through a sanctioned counterparty. That is the half of the trade equities bought at 54,740 last week and have only now begun to sell back.
The rates market took the same headlines more seriously than the equity market did. A quarter-point increase on September 16 now prices at 49.9% against 50.1% for a hold, up from 44.1% on Friday, and October 28 has firmed to 76.5%. December still gives the current range no chance at all, and the second increase that Friday's payroll contraction was supposed to have buried is back at 24.1%, from 14.4% in a single session.
The data week
July's Consumer Price Index (CPI) lands on Wednesday at 12:30 GMT, forecast at 0.1% MoM against a 0.4% decline in June, the annual rate easing to 3.4% from 3.5%, core at 0.2% MoM and 2.5% YoY. That print measures a month already stale against a barrel 3% higher today, which is the standing problem with reading the war out of backward-looking data.
Thursday carries the Producer Price Index (PPI) at 0.2% MoM against a 0.3% decline, core at 4.2% YoY from 4.7%, and jobless claims at 201K. Two regional Federal Reserve presidents speak inside half an hour that morning, one of them among the three who dissented for a quarter-point increase in July. Friday brings retail sales at 0.2% and a Michigan sentiment reading seen falling to 54 from 55.2. Those three releases decide which side of that coin September lands on.
Levels and bias
Resistance: Just above 54,000 has stalled each of the last two sessions, with the 54,100 area capping Friday. Above them the record just short of 54,750 is the only structure left on the chart.
Support: The 53,800 area has floored three consecutive sessions and is the line the week turns on. Beneath it the tape thins toward 53,500, with nothing structural until the 50-day Exponential Moving Average (EMA) near 52,100.
Bias: Bullish while the 53,800 area holds, with the record just short of 54,750 as the objective and a daily Stochastic Relative Strength Index (Stoch RSI) near 57 carrying room above it. A daily close beneath 53,800 turns three sessions of contraction into a failed breakout and opens 53,500.
Dow Jones daily chart
Futures FAQs
The futures market is an exchange-based auction in which participants buy and sell contracts of an underlying asset at a predetermined future date and price. The set price is agreed upon today and is derived from the underlying asset. Futures contracts can be based on a wide range of assets, with commodities among the most popular, although currencies and indices are other common underlying assets. Futures prices depend on their underlying asset and act as a mechanism for firms, institutions, and large-position traders to manage risks through hedging.
Futures can be traded in different ways. The most common ways are via a regulated exchange or via Contracts For Difference (CFDs). In the former, liquidity is high and pricing is more transparent, with the broker serving only as an intermediary between you and the market. Still, it generally requires more capital. The largest futures exchanges are the Chicago Mercantile Exchange (CME) and the New York Mercantile Exchange (NYME). As for CFDs, these require less capital and thus trading is more flexible, but at the cost of less transparency.
The E-mini S&P 500 index, Crude Oil (Brent, WTI), Natural Gas, Gold, Silver, Copper, and soft commodities such as grains are among the most actively traded contracts. These offer strong liquidity and are closely followed by traders worldwide. Futures market volume consistently exceeds spot market volume, often significantly. This dominance is driven by leverage, hedging, and higher liquidity on exchanges.
Yes. Future gauges, particularly equity index futures such as those of the S&P 500 or the Nasdaq, are widely considered key gauges of market sentiment because they reflect investors’ expectations for the next session’s opening price. When equity futures drop, it is a sign of risk-aversion, signaling bearish market sentiment. On the contrary, rising equity futures suggest markets are risk on.
As a futures contract approaches its maturity date, the futures price converges upon the spot price, becoming almost identical at expiration. However, prices can diverge significantly before the contract ends. A market is in contango when future prices are higher than spot prices, while the mirror image is called backwardation (when current prices are higher than future prices). For commodities, the normal state of the market is contango because holding the asset over time incurs costs such as storage or insurance fees. When markets turn from contango to backwardation – or vice versa – it signals a shift in the trend: a change from contango to backwardation is taken as a bullish sign, while going from backwardation to contango is generally considered bearish.
Standard Chartered analysts Carol Liao and Moriarty Lam argue that China’s reflation remains largely cost-driven, with industrial profit recovery concentrated in AI- and oil-related sectors. They highlight that domestic demand continues to lag supply, creating a persistent imbalance. They expect accommodative policies and a low-inflation, low-yield regime to stay in place as rebalancing takes time.
Reflation led by AI and energy sectors
"While we agree that productivity gains are driving China’s supply capabilities, domestic demand has lagged, creating a persistent supply-demand imbalance."
"However, our analysis suggests that recent reflation has been driven primarily by higher global commodity prices."
"Industrial profit recovery has been concentrated in the AI- and oil-related sectors, while industries most frequently associated with ‘overcapacity’ have seen a limited improvement in profitability."
"The supply-demand imbalance may persist for longer if AI adoption runs ahead of labour market adjustment, placing sustained downward pressure on prices."
"In this environment, accommodative policies and a low-inflation, low-yield regime are likely to remain in place."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
TD Securities notes July payrolls surprised sharply to the downside, with headline jobs dragged by government hiring, while private employment stayed near breakeven. The firm expects July Retail Sales to post the first decline since January, aligning with softer labor data, though they still see overall economic activity as stable given mixed but expansionary ISM readings and robust Q2 underlying GDP growth.
Labor softness and consumption slowdown
"July payrolls surprised sharply to the downside on Friday, posting -23k job gains with negative revisions subtracting 103k jobs from May and June. The UE rate declined again to 4.1% but for "bad reasons" as the participation edged down again."
"However, we would not extrapolate too much from the jobs report. Private job gains were 30k, with private sector hiring being overall in line with the breakeven rate this year. Government jobs (-53k) drove down the headline, led by local government eduction after recent volatility in the ex education segment. The July report essentially reflects monthly volatility amid longer-term stability."
"The jobs number should not change much for the Fed. Inflation data will remain key amid two consecutive supply shocks. While the jobs report does reduce the urgency for hikes and allays fears of acceleration, the labor market was never the main source of inflationary worries for Fed this cycle. Attention will turn to inflation data this week."
"Retail sales this week will likely show weak spending in July, in line with payrolls. Another key data report showing weakness would support arguments that policy is still restrictive. However, we are not yet ready to downgrade our view of economic activity. The ISMs last week were mixed but still remained expansionary, while Q2 underlying GDP growth was robust."
"Retail Sales: Retail sales likely declined 0.2% m/m in July following an already subdued 0.2% increase in June. The first decline since January will likely be led by negative auto and gas sales. Control group sales were likely flat partly due to normalization after Amazon Prime Day."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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