Forex News

• WTI gains around 1.6% on Wednesday after the sharp sell-off seen in the previous day.
• Progress in talks between Washington and Tehran eases fears of prolonged supply disruptions.
• Investors now turn their attention to the weekly US Crude Oil inventory data.

West Texas Intermediate (WTI) trades around $75.50 on Wednesday at the time of writing, up 1.56% on the day, as investors take advantage of a technical rebound following the more than 5% decline recorded in the previous day. However, the recovery remains limited by diplomatic progress between the United States (US) and Iran, which is fueling hopes of the reopening of the Strait of Hormuz and reducing concerns over global Oil supply disruptions.

Talks between Washington and Tehran continue to advance after Qatari officials said that an interim agreement had been drafted to restore navigation through the strategic waterway. US President Donald Trump has also paused planned military strikes against Iran to give negotiations a chance, while reiterating his call for the Strait of Hormuz to reopen as soon as possible.

At the same time, broader regional efforts are underway to secure key shipping routes. Iran is reviewing a proposal that would allow European countries to participate in mine-clearing operations in the Strait of Hormuz, while discussions with Oman continue to safeguard trade routes. Meanwhile, Saudi Arabia is holding indirect talks with Yemen's Houthi rebels in an effort to prevent further escalation in the Red Sea.

Traders are also monitoring market fundamentals. Data from the American Petroleum Institute (API) showed an unexpected increase in US Crude Oil inventories, shifting the focus to the official Energy Information Administration (EIA) report due later in the day. Another build in inventories could remind markets that, despite geopolitical tensions, the balance between supply and demand remains a key driver of Oil prices.

In the short term, the Oil market continues to balance the prospect of easing geopolitical tensions, which could improve global supply conditions, against investor caution as the regional environment remains fragile.

WTI US Oil technical analysis

In the one-hour chart, WTI US Oil trades at $75.67, holding a bearish near-term bias as price remains capped beneath the 100-period simple moving average (SMA) at $79.55 and the 200-period SMA at $81.62. The rebound from Tuesday’s lows is more a pause within a broader corrective phase than a trend reversal, while the Relative Strength Index (RSI) at roughly 49 stays near the neutral line, hinting at indecisive momentum rather than a strong directional push.

On the topside, initial resistance emerges at the horizontal barrier, previously a support level, near $77.40, ahead of the 100-period SMA at $79.55 and the 200-period SMA at $81.62, where a dense supply zone is likely to restrain further recovery attempts. On the downside, the next meaningful support is located at the prior low around $73.51, and a sustained break beneath this level would reinforce the prevailing bearish structure and open the door to deeper losses.

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

• GBP/JPY crawls to 212.50 highs in upbeat UK data, renewed Japanese fiscal concerns.
• UK final Services Activity data for July has been revised up to 52.1, from preliminary estimates of 51.8.
• In Japan, the government approved a tax-slashing plan, renewing concerns about fiscal stability.

The British Pound (GBP) extends gains for the second consecutive day against the Japanese Yen (JPY) on Wednesday, with the GBP/JPY pair holding around 212.30 after bouncing from five-month lows at 209.55 on Monday. An upward revision of UK services data has provided some support to the Pound, while concerns about the consequences of a tax-slashing plan in Japan are hurting the Yen

In the UK, July’s final S&P Global Services Purchasing Managers Index (PMI) reading has been revised up to 52.1, from preliminary estimations of 51.8, confirming a sharp improvement from the 48.8 reading posted in June.

Japanese Yen comes under pressure

The Japanese Yen, on the other hand, is showing moderate weakness, despite investors' wariness about further FX interventions and the US commitment to defend Yen stability. Prime Minister Sanae Takaichi’s government has signed a plan to cut the consumption tax on food, from 8% to 1% for two years from April 2027. This has brought concerns about the pressure on an already strained fiscal balance back to the table.

In that line, strategists at BNY report that their latest positioning data shows investors looking to “maintain net positive cross-border exposure to JPY,” but they caution that “developments in recent months, both due to external shocks and domestic credibility issues, have weakened resolve.”

In their view, recent “U.S. support provides an opening for re-accumulation,” yet they argue that the broader market is likely to “agree with Bessent that any structural shift in holdings will depend on credible domestic policy changes,” underscoring that a more durable rebuilding of Yen exposure hinges on Japan’s own policy follow-through rather than external backstops alone.

• The Indian Rupee gives back some of its early gains against the US Dollar after the RBI's policy decision.
• The RBI leaves the Repo Rate steady at 5.25% for the fourth time in a row.
• Oil prices fall sharply on US-Iran deal hopes.

The Indian Rupee (INR) surrenders some gains after a strong opening against the US Dollar (USD), following the Reserve Bank of India’s (RBI) monetary policy decision. The USD/INR opened sharply lower near the monthly low at around 94.80 due to lower oil prices, but it has clawed back some of its early losses and has rebounded to near 95.12.

The RBI has left its Repo Rate steady at 5.25%, as expected, for the fourth time in a row, and has maintained a "neutral" stance on the monetary policy.

The Indian central bank was expected to maintain the status quo as the retail Consumer Price Index (CPI) has remained well within the RBI’s tolerance band of 2%-6%, despite arriving higher at 4.4% Year-on-Year (YoY) in June.

RBI Governor Sanjay Malhotra has warned that the West Asia conflict continues to challenge the global economy, with crude oil prices, currencies, and financial markets remaining volatile. Regarding inflation, Malhotra has said that higher fuel and food prices have started showing little signs of generalization of price pressures so far. He added that core inflation is expected to accelerate towards 5.9% YoY in the third quarter, but will peak from there and start cooling down to 5.5% YoY in the fourth quarter.

On the economic outlook, RBI Governor Malhotra has assured that economic activity remained robust, stating, "Indian economy performed better than expected in Q1 FY27."

US-Iran deal hopes push oil prices lower further

Oil prices extend their decline on Wednesday amid hopes that the US and Iran will reach a deal soon. On Tuesday, US Treasury Secretary Scott Bessent said in an interview with CNBC that Washington could reach a deal with Iran on reopening the Strait of Hormuz, a vital passage for almost 20% of global energy supply, within the next two days.

In the opening session, the MCX Crude Oil contract expiring on August 19 trades 1.6% lower to near Rs. 7,100.

Meanwhile, Qatar also confirmed on Tuesday that mediators including Qatar, Pakistan and Oman are coordinating closely to facilitate negotiations and exchange drafts between both sides.

However, financial markets remain uncertain regarding whether the US-Iran deal on Hormuz will restore freedom of movement through the passage.

US ADP Employment data in focus

In the US, investors await key US ADP Employment Change data for July, which will be published at 12:15 GMT.

Economists at Deutsche Bank anticipate a slightly firmer US labor market print on Wednesday, projecting private payrolls to rise by +65k after +49k previously. The private sector employment data is expected to influence the Federal Reserve's (Fed) interest rate expectations.

Technical Analysis: USD/INR sees fresh downside below 94.80

USD/INR trades lower at around 95.12 at press time. The pair remains under pressure in the near term, holding below the 20-period exponential moving average (EMA) at 95.6394, which suggests that recent rebounds are still being sold into.

The Relative Strength Index (RSI) near 42.00 stays in bearish territory but above oversold, hinting at persistent downside bias while leaving room for further weakness before stretched conditions emerge.

On the topside, initial resistance is located at the 20-day EMA near 95.64, which needs to be reclaimed to ease the immediate bearish tone and open the way for a more meaningful recovery toward 96.00. Looking down, the pair could decline toward the June low at 94.15 if it fails to hold the intraday low at around 94.80.

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

Standard Chartered Bank economists Saurav Anand and Anubhuti Sahay note that India’s Monetary Policy Committee (MPC) kept the repo rate at 5.25% with a neutral stance, sounding more dovish than in April and June. The committee cut its FY27 CPI and core inflation forecasts, raised its GDP outlook, and appears comfortable with inflation, suggesting a prolonged pause in rates barring major upside surprises.

MPC comfort on inflation underpins rate pause

"India’s Monetary Policy Committee (MPC) kept the repo rate unchanged at 5.25% in a unanimous decision and maintained its neutral stance, broadly in line with our and consensus expectations."

"However, we were surprised by the relatively dovish tone of the MPC’s statement compared with the April and June policy meetings."

"Overall, while the MPC remains vigilant on future risks, particularly El Niño and crude oil prices, it is inclined to wait for greater clarity on the inflation trajectory and composition before considering rate action."

"For now, the bar for rate hikes appears high unless inflation materially exceeds expectations."

"This is consistent with our baseline view of no change in the repo rate in FY27."

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

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann describe USD/JPY price action as muted, with the pair confined to 157.15–157.95 and momentum turning flat. They expect intraday range trading between 157.00 and 158.30. Over the next 1–3 weeks, the risk remains to the downside toward 155.00 and 154.10, provided the strong resistance at 160.00 is not breached, despite some slowing in downward momentum.

Range trade but focus on lower levels

"24-HOUR VIEW: Following USD’s price action on Monday, we stated yesterday that “the sharp swings have resulted in a mixed outlook.” We also stated that USD “could trade between 156.20 and 158.50.” We did not expect muted price action as USD traded within a relatively tight range between 157.15 and 157.95. Momentum indicators are turning flat, and today, USD could trade between 157.00 and 158.30."

"1-3 WEEKS VIEW: In our most recent narrative from Monday (03 Aug, spot at 156.20), we highlighted that “the risk for USD remains firmly on the downside, and the levels to watch are 155.00 and 154.10.” Although USD fell briefly to 155.21, it has since rebounded, and downward momentum has slowed somewhat. That said, we will continue to hold the same view as long as the ‘strong resistance’ at 160.00 (no change in level) is not breached."

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

• Gold accelerates its recovery with bulls attempting to break a triangle pattern at the $4,125 area.
• Soft US data and cooling hopes of Fed rate hikes are hurting the US Dollar on Wednesday
• XAU/USD bulls are targeting the key resistance area around $4,220.

Gold (XAU/USD) has accelerated its recovery on Wednesday, favoured by a softer US Dollar as lower Oil prices and downbeat US macroeconomic data cooled market expectations of Federal Reserve (Fed) rate hikes on Tuesday. This has enticed Gold buyers to push the precious metal above the top of a triangle pattern, at the $4,125 area, in a move that is still to be confirmed.

Bullion is drawing support from lower US Treasury yields, following softer-than-expected US Job Openings and Factory Orders figures released on Tuesday. Meanwhile, the decline in Oil prices, with the US benchmark West Texas Intermediate (WTI) trading $10 below last week's highs, has eased concerns about the inflationary impact of energy prices. In this context, investors have cut back bets of a Fed rate hike in September to 58% from 67% on Tuesday, according to data by the CME’s Fed Watch Tool.

Technical Analysis: Gold needs to break $4,220 to confirm a deeper correction

XAU/USD trades at $4,161, holding a constructive near-term bias after reaching one-week highs above the top of a descending triangle. Momentum indicators in 4-hour charts endorse the positive view, with the Relative Strength Index (14) around 55 hinting at a building bullish while the Moving Average Convergence Divergence (MACD) slightly above zero strengthens the case for a moderate upside bias.

Bulls, however, will have to clear the horizontal barrier around $4,220 (June 22 highs) to confirm a bullish reversal and set sail for the mid-June highs, at $4,380.

A bearish reaction, on the other hand, is likely to find support at the $4,000 psychological level, although the key support area lies at the $3,945 area, the bottom of the mentioned triangle. A confirmation below here negates the bullish view and brings the late October 2025 lows, at $3,886, into play.

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

Commerzbank’s Tatha Ghose explains that the Hungarian Forint (HUF) has recently given back gains as external shocks and an ongoing Magyar Nemzeti Bank (MNB) easing cycle erode support. With the currency back above 360 versus Euro (EUR), markets await Monetary Policy Committee (MPC) minutes for signs of a more conditional stance on rate cuts that could limit further Forint downside and reinforce foreign exchange stability.

Forint relies on conditional MNB easing

"That trend has become less convincing over the past month, however, with the forint surrendering a meaningful share of its earlier gains to return to its erstwhile 360-plus range versus the euro."

"The second factor is monetary policy. MNB had just kicked off a monetary easing cycle and, following its July meeting, indicated that it sees room for additional rate cuts during the summer before reassessing the outlook in September – this guidance sounds like a relatively unconditional commitment to further easing even though the balance of inflation risks has just swung. That has inevitably reduced some of the forint’s interest rate support."

"A more conditional tone would help reassure markets that MNB may soon ditch the rate cutting cycle, which would limit further downside pressure on the forint. In the end, MNB’s long-standing emphasis has also been about maintaining foreign exchange stability."

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

Silver prices (XAG/USD) rose on Wednesday, according to FXStreet data. Silver trades at $61.52 per troy ounce, up 2.87% from the $59.81 it cost on Tuesday.

Silver prices have decreased by 13.45% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 67.64 on Wednesday, down from 68.18 on Tuesday.

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

• NZD/USD trades around 0.5860 on Wednesday, down 0.54% on the day.
• The New Zealand Dollar weakens after the unemployment rate rises more than expected in the second quarter.
• Markets scale back expectations of further monetary tightening by New Zealand's central bank.

NZD/USD declines to around 0.5860 on Wednesday at the time of writing, down 0.54% on the day, following the release of weaker-than-expected New Zealand employment data. The New Zealand Dollar (USD) comes under selling pressure as investors reassess the outlook for monetary policy.

Data released by Statistics New Zealand showed that New Zealand's Unemployment Rate rose to 5.6% in the second quarter, up from 5.3% in the previous quarter and above the market consensus of 5.4%. The reading marks the highest level since 2015, highlighting the continued deterioration in the labor market.

At the same time, New Zealand's Employment Change increased by 0.5% in the second quarter, up from 0.2% previously and above market expectations of 0.2%. The participation rate also rose to 70.7% from 70.4% in the previous quarter, pointing to an increase in labor supply despite softer labor market conditions.

The larger-than-expected increase in unemployment weakens the case for further monetary tightening by the Reserve Bank of New Zealand (RBNZ), weighing on the New Zealand Dollar. Traders now see greater scope for the central bank to maintain a cautious stance as the economy slows.

Markets are now turning their attention to upcoming US macroeconomic releases, including the ADP Employment Change report and the Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), ahead of Friday's official US employment report.

NZD/USD technical analysis

In the one-hour chart, NZD/USD trades at 0.5863 with a mildly bearish intraday bias, holding just above nearby horizontal support while capped by overhead moving average. The pair sits below the 100-hour simple moving average (SMA) at 0.5872 and beneath the downward resistance trend line coming in around 0.5896, keeping rebounds in check. The 200-hour SMA at 0.5829 remains comfortably below price, hinting that the broader downtrend is not aggressive, though the Relative Strength Index (RSI) near 38 suggests lingering downside pressure rather than a clean bullish setup.

On the downside, initial support appears at the recent horizontal floor around 0.5860, followed by a secondary shelf at 0.5849; a sustained break beneath these levels could expose the 200-hour SMA support near 0.5829. On the topside, buyers would need to reclaim the 100-hour SMA at 0.5872 first, with a subsequent push toward the descending trend-line resistance around 0.5896 to signal that bears are losing near-term control.

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

Nordea’s Chief Analyst Jan Størup Nielsen notes that Nationalbanken did not intervene in July to support Denmark’s fixed exchange rate policy, after a small purchase of kroner in June. He argues the recent weakening of the Danish krone against the Euro reflects shifts in domestic corporate demand and expects the EUR/DKK interest rate differential to stay unchanged for an extended period.

Danish krone weakness without fresh intervention

"Over the past month, there has been no need to purchase kroner in support of Denmark's fixed exchange rate policy."

"The July figures were awaited with particular interest, as Nationalbanken in June purchased DKK 0.7 billion to curb a further weakening of the Danish krone against the euro."

"The absence of intervention in July supports our view that the weakening of the Danish krone against the euro is due to changes in the underlying demand for Danish kroner among domestic non-financial corporates."

"Given this circumstance, and given that Nationalbanken, in our assessment, will, going forward, seek to create a more symmetric fluctuation band in EUR/DKK around the central parity, the current interest rate differential between Denmark and the euro area of -0.4 percentage points will in all likelihood remain unchanged for an extended period."

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