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• USD/JPY is seen consolidating as traders opt to wait for the release of the US NFP report.
• Bulls await a sustained move above the $38.2% Fibo. before positioning for further gains.
• Any corrective pullback is likely to find decent support near 157.25, the 23.6% Fibo. level.

The USD/JPY pair extends the range play through the Asian session on Friday, stalling this week's solid recovery from its lowest level since May, touched in the aftermath of a joint US-Japan intervention. Spot prices currently trade near the top end of the weekly range, around mid-158.00s, as traders keenly await the crucial US Nonfarm Payrolls (NFP) report for a fresh impetus.

In the meantime, persistent geopolitical uncertainties, reviving inflation fears, and bets for at least one interest rate hike by the US Federal Reserve (Fed) act as a tailwind for the US Dollar (USD). The Japanese Yen (JPY), on the other hand, remains depressed on the back of concerns about Japan's worsening fiscal condition. Moreover, a fall in Japan's Household Spending for the seventh straight month weakens the case for a Bank of Japan (BoJ) rate hike in September, further weighing on the JPY and acting as a tailwind for the USD/JPY pair.

From a technical perspective, spot prices keep a capped tone near the 38.2% Fibonacci retracement level of a sharp slide from a four-decade high, touched in July. Meanwhile, the Moving Average Convergence Divergence (MACD) now prints in positive territory, hinting at improving short-term momentum on the 4-hour chart. However, the Relative Strength Index (RSI) around 50 suggests a neutral, consolidative backdrop rather than a decisive trend shift, making it prudent to wait for a move beyond the current level before placing fresh bullish bets.

A further move up beyond the 38.2% Fibo., near 158.55, is likely to confront resistance at the 50.0% retracement at 159.61 and the 61.8% level at 160.66, where further rallies could stall. On the downside, initial support appears at the 23.6% retracement at 157.26, ahead of the structural floor near 155.17. A sustained break below 157.26 is likely to open the way for a deeper correction toward that lower zone.

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

USD/JPY 4-hour chart

• USD/CHF gains as escalating Middle East conflict fears drive global safe-haven demand toward USD.
• Fed rate uncertainty emerges as rising oil prices and yields fuel inflation fears.
• Cooling Swiss inflation to 0.4% leaves the Swiss National Bank likely keeping rates flat at 0%.

USD/CHF extends its gains for the second successive day, trading around 0.8130 during the Asian hours on Friday. The currency pair appreciates as the US Dollar (USD) gains strength, driven by renewed safe-haven demand amid escalating Middle East tensions.

Market stability has been rattled by growing skepticism regarding the reopening of the strategic Strait of Hormuz. Adding to the geopolitical strain, The Guardian reported that Saudi Arabia intends to extend military operations against Iran-aligned Houthis, in support of the internationally recognized Yemeni government, following attacks on its southern Najran province. Meanwhile, Iran's parliament is evaluating a draft proposal to prohibit US and Israeli vessels, impose a 20% cargo penalty on hostile nations, and restrict the corridor until the US blockade is lifted.

Meanwhile, rising US Treasury yields and recovering crude oil prices have reignited fears that the Federal Reserve could implement another interest rate hike next month. Despite these inflationary signals, the CME FedWatch Tool currently reflects a 54.5% probability of a 25-basis-point rate increase in September, down from 63.4% last week. Investors and traders are now turning their attention to the upcoming July Nonfarm Payrolls (NFP) report to assess labor market health and gain clearer insights into the Fed’s future monetary policy trajectory.

On the Swiss side, economic indicators present a mixed picture. Switzerland’s non-seasonally adjusted unemployment rate ticked up to 3.0% in July from 2.9% in June, while youth unemployment (ages 15–24) edged up slightly to 2.8%. Markets will closely watch the release of the July Foreign Currency Reserves and Q3 SECO Consumer Climate data later in the day.

Franc under pressure as muted Swiss inflation keeps SNB on hold

Brown Brothers Harriman highlights that "Swiss July CPI stays muted," with headline inflation running at just 0.4% year-on-year and core at 0.3% for a fourth consecutive month. With the SNB projecting only modest CPI averages and maintaining its policy rate at 0.00%, strategist Elias Haddad argues this subdued inflation backdrop is likely to keep the Swiss Franc on the defensive, noting it is currently the weakest G10 currency this quarter.

Technical Analysis: USD/CHF holds above nine-day EMA

In the daily chart, USD/CHF is maintaining a modest bullish near-term bias as it holds above both the nine-day and 50-day Exponential Moving Averages (EMAs). The configuration of short- and medium-term EMAs below price suggests a constructive backdrop, while the 14-day Relative Strength Index (RSI) near 54 reinforces a neutral-to-positive momentum tone rather than overbought conditions.

On the topside, immediate resistance appears at the horizontal barrier around the 13-month high of 0.8207. On the downside, initial support is offered by the nine-day EMA at 0.8111, followed by the 50-day EMA at 0.8056, with deeper structural floors seen at nearly a five-month low of 0.7762.

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

Gold prices rose in India on Friday, according to data compiled by FXStreet.

The price for Gold stood at 13,072.48 Indian Rupees (INR) per gram, up compared with the INR 12,986.65 it cost on Thursday.

The price for Gold increased to INR 152,472.70 per tola from INR 151,473.80 per tola a day earlier.

FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

(An automation tool was used in creating this post.)

• Gold attracts some dip-buyers on Friday, stalling the previous day’s retracement slide.
• Geopolitical risks, inflation fears and Fed hike bets underpin the USD, capping gains.
• Traders might opt to wait for the crucial US NFP report before placing directional bets.

Gold (XAU/USD) attracts some dip-buyers during the Asian session on Friday, stalling the previous day's retracement slide from levels just above the $4,300 mark, or the highest since June 18. The commodity currently trades just above $4,250 and seems poised to register its best week since January. The upside, however, seems limited amid mixed signals over US-Iran peace talks and ahead of the crucial US monthly employment details.

US President Donald Trump told reporters ​on Thursday that he believed ‌the war with Iran would be over soon. However, a Saudi official said that some Iraqi militia factions, in coordination with Yemen's Iran-backed Houthis, are planning to attack the kingdom in the very near future. This raises the risk of a wider regional conflict and prompts traders to price in the geopolitical risk premium, which is seen acting as a tailwind for the safe-haven US Dollar (USD) and might cap gains for Gold.

Meanwhile, reports suggest that Iran is reviewing a framework agreement over the management of the Strait of Hormuz that would prohibit passage of US, Israeli, and hostile vessels until compensation was paid. This, in turn, dampens hopes for a diplomatic resolution to end the five-month-old US-Iran war. Moreover, Houthis claimed responsibility for an attack on a Saudi oil tanker in the Gulf of Aden, reviving concerns about energy supply disruptions, supporting oil prices and fueling inflation fears.

This might force global central banks, including the US Federal Reserve (Fed), to adopt a more hawkish stance, which should contribute to keeping a lid on the non-yielding Gold. According to CME Group's FedWatch Tool, traders are still pricing in an over 80% chance that the US central bank will raise borrowing costs by the end of this year. This favors the USD bulls and warrants some caution before positioning for the resumption of the XAU/USD pair's recent recovery from the $4,000 psychological mark.

Moreover, traders seem hesitant to place fresh directional bets and might opt to wait for the release of the closely-watched US Nonfarm Payrolls (NFP) report. The key labor market data will influence market expectations about the Fed's future policy path and drive USD demand, which, in turn, should provide meaningful impetus to Gold.

Analysts at OCBC note that “near-term momentum has improved,” with the upcoming US payrolls report now seen as “key to whether the decline in yields, USD and gold’s breakout can be sustained.” They point out that gold was “last seen at $4,247 levels,” with “daily momentum is mildly bullish while RSI rose to near overbought conditions.” On the technical front, OCBC highlights “resistance at $4,333 (23.6% fibo retracement of 2026 high to low), $4,393 (100 DMA)” and “support at $4,160 (50 DMA), $4,077 (21 DMA),” suggesting a constructive bias while acknowledging that the sustainability of the recent move will hinge on the tone of US data.

XAU/USD daily chart

Technical Analysis: Gold needs to surpass 38.2% Fibo near $4,300 to back the case for further gains

This week's breakout through the $4,165 confluence – comprising the 23.6% Fibonacci retracement level of the April-June slide and the 50-day Simple Moving Average (SMA) – was seen as a key trigger for bullish traders. Momentum indicators also align with this constructive tone, with the Relative Strength Index (RSI) at 61.29 and the Moving Average Convergence Divergence (MACD) above zero with a positive latest reading. This, in turn, suggests that buying pressure remains in control while the advance faces an emerging overhead hurdle near the 38.2% Fibo. level, around $4,300.

The aforementioned barrier is followed by the 50% retracement at $4,414 and the 61.8% level at $4,525, which together define a broad resistance zone before higher hurdles at $4,683 and $4,884. On the downside, immediate support is located around $4,265, with stronger demand expected at the 23.6% retracement at $4,165 and the 50-day SMA at $4,151. A deeper pullback toward the structural anchor near $3,943 would be needed to challenge the current bullish bias.

According to a report from The Guardian, Saudi Arabia aims to extend its military operations against Iran-aligned Houthis for attacking the Najran province, which is located in its southern region, and Yemeni government troops. It should be noted that Saudi Arabia is a supporter of the internationally recognized Yemeni government.

In a separate attack early on Friday, a Saudi official accused the Houthis of indiscriminately shelling civilian areas in Saudi Arabia, injuring 11 civilians, including a four-year-old child. Maj General Turki al-Maliki, spokesperson for the Saudi-led military coalition supporting Yemen’s government, said the coalition would continue taking all necessary ⁠measures to protect civilians.

Escalating conflicts inside the Middle East region are prompting fears of a prolonged oil supply disruption, which could keep global inflation expectations de-anchored.

Market reaction

As of writing, the WTI Oil price holds onto its Thursday's strong recovery move near $77.50.

• AUD weakens on safe-haven shift due to geopolitical tensions in the Strait of Hormuz.
• China's Trade Balance beat expectations, though moderating export and import growth presents a mixed picture.
• AUD/JPY could rebound as Japanese Yen retreats despite joint Tokyo-Washington currency intervention efforts.

AUD/JPY halts its three-day winning streak, trading around 111.30 during the Asian hours on Friday. The currency cross depreciates as the Australian Dollar (AUD) loses ground, driven by a surge in global safe-haven demand. Escalating tensions in the Strait of Hormuz have rattled market stability, sparking widespread skepticism over whether this vital shipping route will reopen anytime soon.

Meanwhile, China’s latest trade figures present a mixed economic picture that could carry significant implications for Australia, given the close trading relationship between the two nations. China's June Trade Balance in US Dollar terms came in at $112.5 billion, topping expectations of $107.0 billion though falling short of the previous $125.62 billion figure. In Chinese Yuan terms, the Trade Surplus widened to 767 billion, beating the estimated 740 billion, but trailing the prior 859.05 billion reading. July exports grew 23.9% year-over-year compared to June's 27% rise, while imports expanded by 27.5% over the same period, moderating from the previous 36% growth rate.

RBA hike risk keeps modest upside bias in AUD

Rabobank’s FX strategists continue to see scope for further RBA tightening, arguing that “there is still risk of one more rate hike this year in November.” They note that “the market will be hoping that the RBA’s August 11 policy meeting will provide more clarity on rate hike risks,” particularly in light of shifting expectations around the policy path. Against this backdrop, Rabobank maintains “a modest upside bias in Australian Dollar out to 12 months.

Despite these pressures, the AUD/JPY cross could regain traction as the Japanese Yen (JPY) gives back some of its recent gains. Those initial gains were sparked by joint currency intervention from Tokyo and Washington, which has fueled speculation that authorities might step in again.

However, the JPY's quick retreat highlights ongoing skepticism about whether official intervention can overcome its structural weakness, a weakness continually dragged down by wide interest rate differentials, escalating fiscal concerns, and stubbornly high energy and import costs.

Asian currency slide seen as catalyst for US Dollar intervention

Analysts at ING argue that the recent bout of weakness across key Asian currencies may have been a key trigger for official action in the US Dollar/Japanese Yen pair. They note that "large falls in the Japanese yen, Korean won and Taiwanese dollar might have been one of the reasons the US Treasury stepped in with USD/JPY intervention," and suggest the move "could be well-timed if the Fed doesn't hike and the Dollar falls," potentially aligning policy dynamics with efforts to stabilise the Yen.

• Scotiabank analysts warn that narrowing UK-US yield spreads are weakening fundamental support for the British pound.
• Rising oil prices revive UK stagflation fears, posing a dilemma for the Bank of England.
• Safe-haven demand from escalating Strait of Hormuz tensions boosts the US Dollar as global market instability grows.

GBP/USD extends its losses for the second consecutive day, trading around 1.3450 during the Asian hours on Friday. The pair depreciates as the British Pound (GBP) softens even as United Kingdom (UK) political risk fades.

Analysts at Scotiabank observe that "fundamentals appear to be somewhat less supportive for the GBP, as we note the renewed softening in yield spreads," tempering the near-term backdrop for the currency. However, they also highlight that "sentiment continues to improve" as "market participants continue to fade politically-motivated concerns following the recent political transition and arrival of PM Burnham." In their view, "the new PM’s commitment to fiscal responsibility appears to be much stronger than expected," helping to offset the drag from softer yield differentials and underpinning a more constructive tone toward the Pound.

Rising oil prices have reignited fears of sticky inflation and sluggish economic growth in the UK, presenting the Bank of England (BoE) with a challenging "stagflationary" dilemma. This pressure directly tests the central bank's stance following last week’s monetary policy meeting, where Governor Andrew Bailey downplayed the necessity for further rate hikes. At the time, Bailey expressed confidence that the UK's disinflation process remains firmly on track, even against a backdrop of ongoing geopolitical uncertainty.

The GBP/USD pair faces downward pressure as the US Dollar (USD) gains strength, propelled by renewed safe-haven demand among global investors. Escalating tensions in the Strait of Hormuz have rattled market stability and created significant skepticism regarding the reopening of this critical shipping route. Market caution remains elevated as Iran's parliament evaluates a draft proposal that seeks to prohibit US and Israeli vessels, levy a 20% cargo penalty on hostile nations, and maintain restrictions on the corridor until the US blockade is removed.

Musalem flags upside inflation risks and defends surprise moves, keeping Dollar bulls alert

Fed’s Musalem delivers a slightly more hawkish tone, with a 7.4/10 FXS Speechtracker score relative to the historical average of 7/10, emphasizing that inflation expectations risk losing their anchor even as they currently align with the 2% target. The focus on core inflation amid energy volatility, a preference for incremental rate hikes, and an assessment that core inflation likely sits between 2.5% and 3% underscore the concern that inflation may stay above target, while the assertion that sometimes it is acceptable for the central bank to surprise markets signals a willingness to prioritize the mandate over market guidance. Musalem’s view that the Dollar’s reserve status is secure, the labor market is strong but not an inflation driver, and financial conditions remain highly accommodative reinforces a backdrop where upside rate risks remain on the table.

The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still distinctly hawkish level of 138.69, indicating that Musalem’s remarks fit comfortably within the prevailing hawkish bias rather than shifting it further. The combination of a slightly above-baseline FXS Speechtracker score and a stable, elevated FXS Fed Sentiment Index suggests the speech consolidates existing expectations for a Fed inclined to keep policy tight, supporting the Dollar while limiting fresh directional impetus.

• Silver price trades higher to near $62.20 ahead of the US NFP data for July.
• The US NFP data will influence the Fed’s interest rate prospects.
• A sharp recovery in oil prices could limit the Silver price’s upside.

Silver price (XAG/USD) trades 1% higher to near $62.20 during the Asian trading session on Friday. The white metal rises ahead of the United States (US) Nonfarm Payrolls (NFP) data for July, which will be published at 12:30 GMT.

TD Securities looks for a modest July payrolls rebound with unemployment steady

According to TD Securities, July’s jobs report is expected to show only a slight improvement after June’s downside surprise. The bank’s economists anticipate that "July NFP picked up modestly to 70k after surprising to the downside with 57k in June," pointing to a still subdued pace of hiring. They also expect the jobless rate to hold its recent gains, noting that "the UE rate likely went sideways at 4.2% after declining in June," consistent with a labor market that remains broadly stable rather than decisively weakening.

The official employment data is expected to have a significant influence on the Federal Reserve’s (Fed) interest rate expectations in the absence of “forward-guidance” from the central bank.

On the global front, a sharp recovery in oil prices due to diminished hopes of an immediate reopening of the Strait of Hormuz, a vital passage to almost 20% of global energy supply, could limit the upside in the Silver price.

At press time, the WTI Oil price holds on Thursday’s recovery move to near $77.00.

Higher oil prices boost global inflation projections, a scenario that prompts fears of interest rate hikes by central banks, which is unfavorable for non-yielding assets, such as Silver.

Silver technical analysis

XAG/USD trades at around $62.20 above the 20-period exponential moving average (EMA) at $59.66, keeping the near-term bias constructive as price holds over this key trend reference.

The Relative Strength Index (14) at 56.27 sits in positive territory without being overbought, hinting that bullish momentum remains in place but not yet overstretched.

On the downside, immediate support is seen at the 20-day EMA at $59.66, which reinforces the broader bullish structure as long as it holds. The white metal could return to the Year-To-Date (YTD) low at 54.77 if it fails to hold the 20-day EMA. On the upside, the July 6 high at $63.28 is the immediate barrier; a decisive break above the same would open the door towards the June 22 high at $67.17.

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

• NZD/USD remains depressed for the second straight day as geopolitical risks underpin the USD.
• Recovering oil prices revive inflation fears, bolstering Fed hike bets and also supporting the buck.
• China’s trade data do little to provide any impetus to the Kiwi as the focus remains on the US NFP.

The NZD/USD pair sticks to a negative bias for the second consecutive day and trades near the lower end of its weekly range, around the 0.5865 region, during the Asian session on Friday. Spot prices move little following the release of China's trade data as traders opt to wait for the crucial US monthly employment details.

In fact, China's Trade Balance for June, in US Dollar (USD) terms, showed a surplus of $112.5 billion, higher than the $107.0 billion expected, but lower than the prior release of $125.62 billion. Additional details revealed that exports rose 23% YoY, compared to a 27% increase seen in June, while imports climbed 27.5% vs. 36% recorded previously. The data fails to provide any impetus to antipodean currencies, including the New Zealand Dollar (NZD), as geopolitical uncertainties continue to underpin the safe-haven US Dollar (USD) and weigh on the NZD/USD pair.

In fact, a Saudi official said that some Iraqi militia factions, in coordination with Yemen's Iran-backed Houthis, are planning to attack the kingdom in the very near future, raising the risk of a wider regional conflict. This comes a day after Houthis claimed responsibility for an attack on a Saudi oil tanker in the Gulf of Aden. Furthermore, reports suggest that Iran is reviewing a plan ‌that would ban US and Israeli vessels from the Strait of Hormuz. This led to the overnight rise in oil prices, fueling inflation fears and bolstering US Federal Reserve (Fed) rate hike bets.

Hawkish Fed expectations, in turn, remain supportive of elevated US Treasury bond yields and turn out to be another factor supporting the Greenback. USD bulls, however, seem hesitant to place aggressive bets and look to the crucial US Nonfarm Payrolls (NFP) report for more cues about the Fed's future policy path. In the meantime, the Reserve Bank of New Zealand's (RBNZ) hawkish tilt could support the Kiwi and help limit the downside for the NZD/USD pair, warranting some caution before positioning for any further intraday depreciating move.

NZD/USD daily chart

Technical Analysis

The NZD/USD pair holds above the 100-day Simple Moving Average (SMA) at 0.5823, suggesting that the underlying demand is still in place despite recent consolidation around the 0.5860 area. A daily close below this level, however, would hint at fading upside momentum and expose deeper retracements toward the mid-0.5700s, while holding above it keeps the door open for a continuation of the advance toward the 0.5900 handle over the coming sessions.

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

China's Trade Balance for July, in US Dollar (USD) terms, arrives at $112.5 billion, higher than the $107.0 billion expected, but lower than the prior release of 125.62 billion.

Exports surge 23.9% year-over-year (YoY) in July from a 27% increase seen in June. The country’s imports surge 27.5% YoY in the same period vs. 36% recorded previously.

In Chinese Yuan (CNY) terms, the Trade Surplus widened by 767 billion, more than the 740 billion estimate, but lower than the previous release of 859.05 billion. Exports (CNY) grew at a moderate pace of 17.8% against the previous reading of 20.8%.

Market reaction

No immediate reaction is seen in the Australian Dollar (AUD), the liquid proxy of the Chinese economy, following the China Trade Balance data release. At press time, AUD/USD trades 0.1% lower to near 0.7024.