Forex News
- AUD/USD continues to draw support from firming RBA rate hike expectations and a weaker USD.
- Hawkish Fed bets limit deeper USD losses, capping spot prices ahead of the key US inflation data.
- The bullish technical setup suggests that the path of least resistance for the pair is to the upside.
The AUD/USD pair holds steady above the 0.7200 mark through the Asian session on Tuesday, consolidating its recent strong move up to its highest level since May 14 touched the previous day. Meanwhile, the fundamental backdrop and the technical setup favor bullish traders, suggesting that the path of least resistance for spot prices remains to the upside.
Expectations for another interest rate hike by the Reserve Bank of Australia (RBA) later this month continue to underpin the Australian Dollar (AUD). The US Dollar (USD), on the other hand, attracts some follow-through selling amid a broadly rallying Japanese Yen (JPY) and turns out to be another factor acting as a tailwind for the AUD/USD pair. Traders, however, refrain from placing fresh directional bets and keenly await this week's release of the latest US inflation figures.
From a technical perspective, the recent close above the 0.7200 mark comes on top of a strong rally from the very important 200-day Simple Moving Average (SMA), tested in June, and validates the near-term constructive outlook. Furthermore, momentum indicators stay supportive, with the Relative Strength Index (RSI) hovering in bullish territory just shy of overbought and the Moving Average Convergence Divergence (MACD) line retaining a small positive spread.
This, in turn, hints that the upside pressure is firm but increasingly mature. Hence, any corrective pullback towards the 0.7145 immediate support is more likely to be bought into and remain limited. A convincing break below, however, might prompt some technical selling and drag the AUD/USD pair below the 0.7100 mark. However, the 200-day SMA around 0.6992 stands out as the key medium-term reference support. As long as spot prices hold above this longer-term gauge, the broader bias remains skewed to further gains even if near-term consolidation or corrective swings emerge.
On the top side, the multi-year peak, at 0.7272, is the next notable resistance, and a daily close above this hurdle would open the way for further gains.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.15% | -1.60% | -0.28% | -0.25% | 0.31% | -0.01% | |
| EUR | 0.10% | -0.05% | -1.48% | -0.17% | -0.13% | 0.40% | 0.09% | |
| GBP | 0.15% | 0.05% | -1.54% | -0.12% | -0.08% | 0.45% | 0.15% | |
| JPY | 1.60% | 1.48% | 1.54% | 1.41% | 1.43% | 1.96% | 1.65% | |
| CAD | 0.28% | 0.17% | 0.12% | -1.41% | 0.08% | 0.57% | 0.27% | |
| AUD | 0.25% | 0.13% | 0.08% | -1.43% | -0.08% | 0.53% | 0.24% | |
| NZD | -0.31% | -0.40% | -0.45% | -1.96% | -0.57% | -0.53% | -0.31% | |
| CHF | 0.01% | -0.09% | -0.15% | -1.65% | -0.27% | -0.24% | 0.31% |
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 tumbles to near 153.50 in Tuesday’s early European session.
- Expectations that the BoJ could raise interest rates next week underpin the Japanese Yen.
- Traders are now pricing a roughly 60% chance of a Fed rate hike this month.
The USD/JPY pair falls to around 153.50 during the early European trading hours on Tuesday. The Japanese Yen (JPY) strengthens to a seven-month high against the US Dollar (USD) amid growing expectations of a Bank of Japan (BoJ) interest-rate hike. The key US inflation data will be in the spotlight later this week.
Growing trader bets on a BoJ interest-rate increase fueled a sharp reversal in sentiment. Speculation over a potential shift in the Government Pension Investment Fund’s asset allocation also provides some support to the Japanese Yen.
Last week, BoJ board member Hajime Takata said that the central bank could take a more aggressive approach than expected. He said a 25-basis-point hike “is not necessarily set in stone,” and that generally speaking, back-to-back rate hikes would be a possibility, too.
Traders will closely monitor the upcoming US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation data, which could shape expectations for the Federal Reserve's (Fed) next policy move. Fed funds futures are now pricing in roughly a 60% probability of a hike, according to the CME FedWatch tool.
BoJ tightening expectations build as markets price faster shift
Analysts at HSBC observe that markets are increasingly positioning for a quicker shift in Bank of Japan policy than seen in recent years. They note that “markets now expect the Bank of Japan (BoJ) to tighten policy faster than it has done in recent years,” with “overnight index swaps imply[ing] around 75bp of cumulative hikes by April 2027 and even assign[ing] meaningful odds of a hike at the 18 September meeting, which stands out as unusual.” HSBC argues that these pricing moves “suggest investors anticipate a change in how the BoJ responds to inflation and growth risks.”
Technical Analysis: USD/JPY keeps a bearish vibe amid oversold RSI
In the daily chart, USD/JPY extends a sharp decline and maintaining a clearly bearish near-term bias as price holds well below the Bollinger Band midline and the 100-day simple moving average. The pair has also slipped under the lower Bollinger Band, underscoring intense downside pressure, while the Relative Strength Index (14) hovers in oversold territory around 25, hinting that although selling remains dominant, the downside momentum could begin to moderate.
On the topside, initial resistance is now seen at the former lower Bollinger Band area around 154.70, followed by the Bollinger Band midline near 158.45 and the 100-day SMA clustered close to 159.85. A more sustained recovery would need to reclaim that confluence before challenging the upper Bollinger Band near 162.20; until then, the broader technical structure suggests rallies are likely to be sold.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- GBP/USD is seen consolidating as traders await this week’s key macro releases from the UK and the US.
- The JPY-led USD selling remains unabated, supporting spot prices during the Asian session on Tuesday.
- The bullish technical setup backs the case for the resumption of the recent well-established uptrend.
The GBP/USD pair struggles to capitalize on the previous day's modest gains and oscillates in a range below mid-1.3500s during the Asian session on Tuesday. The downside, however, remains cushioned as the US Dollar (USD) selling remains unabated on the back of a broadly firmer Japanese Yen (JPY).
That said, firming US Federal Reserve (Fed) rate hike bets, along with geopolitical uncertainties stemming from escalating US-Iran tensions, act as a tailwind for the USD and cap the GBP/USD pair. Traders also seem hesitant ahead of this week's release of the monthly UK GDP and the latest US inflation figures.
From a technical perspective, the GBP/USD pair holds a mild bullish bias above the 200-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, spot prices trade above a dense Fibonacci support stack led by the 38.2% retracement level of the June-August upswing, at 1.3471. Adding to this, a modestly positive Moving Average Convergence Divergence (MACD) and a Relative Strength Index (RSI) hovering around 54 hint that upside momentum is constructive but not yet aggressive.
Meanwhile, the 23.6% retracement at 1.3549 sits just overhead as the next cap. A sustained strength higher would open the way toward further recovery in the broader range. On the downside, initial support is provided by the 200-period SMA at 1.3498, followed by the 38.2% retracement at 1.3471, with deeper floors at the 50.0% level near 1.3408 and the 61.8% retracement around 1.3344 if selling pressure intensifies.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
GBP/USD 4-hour chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- NZD/USD depreciates following China's August trade data, which showed weaker-than-expected import growth of 28.2%.
- Disappointing Chinese import expansion weighs heavily on the Kiwi Dollar due to strong bilateral trade ties.
- Downside losses remain capped by broader US Dollar weakness ahead of upcoming US inflation readings.
NZD/USD extends its losses for the third successive day, trading around 0.5850 during the Asian hours on Tuesday. The pair is depreciating as the New Zealand Dollar (NZD) remains under pressure following the release of trade data from China, New Zealand’s major trading partner.
China's August Trade Balance reached $119.09 billion, aligning closely with forecasts and improving on July's $112.5 billion figure. Exports grew by 25% year-over-year, accelerating from July's 23.9% increase. However, imports rose by 28.2% year-over-year—a slight pickup from the previous month's 27.5% growth, but falling short of the 30% expansion expected by markets.
Despite this softness in the Kiwi Dollar, further downside for the NZD/USD pair may be cushioned by ongoing weakness in the US Dollar. The Greenback could regain its footing soon, however, as traders price in a greater than 60% probability of a Federal Reserve rate hike in September, bolstered by a stronger-than-expected August US labor report.
US Nonfarm Payrolls expanded by 162,000 while the Unemployment Rate held steady. Investors are now awaiting the upcoming US Producer Price Index and Consumer Price Index reports later this week to gauge the Fed's next policy move.
Technical Analysis:
In the daily chart, NZD/USD trades at 0.5850, keeping a bearish near-term tone as it holds below both the 50- and nine-day Exponential Moving Averages (EMAs). The 14-day Relative Strength Index (RSI) has retreated toward the low-40s, hinting at fading bullish momentum rather than outright oversold conditions, which suggests rallies are likely to face selling pressure while price remains capped beneath these moving averages.
On the topside, immediate resistance is seen at the 50-day EMA around 0.5867, with a subsequent hurdle at the shorter-term 9-day EMA near 0.5887, where a daily close above would be needed to ease the current downside bias. On the downside, the lack of nearby structural price levels leaves the pair vulnerable to further slippage, with the soft RSI profile and the cooling FXS Fed Sentiment Index backdrop reinforcing the risk of renewed declines if buyers fail to reclaim the overhead EMA cluster.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD 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.
- EUR/USD flatlines near 1.1625 in Tuesday’s early European session.
- Markets are in a "wait-and-see" mode ahead of key US inflation data and the ECB rate decision this week.
- The ECB is likely to raise the benchmark rates at its September meeting on Thursday.
The EUR/USD pair trades on a flat note around 1.1625 during the early European trading hours on Tuesday. Traders prefer to wait on the sidelines ahead of the key US inflation data and the European Central Bank (ECB) interest rate decision later this week.
Data released last week showed that the US economy added 162,000 jobs in August, beating the forecasted 56,000. The Unemployment Rate held steady at a tight 4.1% during the same period. Traders are now pricing a nearly 60% chance of a Federal Reserve (Fed) rate hike this month following the upbeat Nonfarm Payrolls (NFP) report.
The attention will shift to the US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation data later for more clues about the US interest rate path. Economists expect August's inflation report to show a slight monthly acceleration, driven by global energy pressures. Any signs of hotter inflation in the US could lift the Greenback and create a headwind for the pair.
On the Euro’s front, the ECB is anticipated to hike its benchmark rates for the second time this year when it meets on Thursday. The ECB delivered its first hike since 2023 in its June policy meeting to tame surging prices, but then hit pause at its last meeting in July to see how the conflict would develop.
"The ECB governing council looks certain to raise its deposit rate from 2.25 percent to 2.5 percent," said Andrew Kenningham, chief Europe economist at Capital Economics.
Eurozone focus turns to ECB as Deutsche Bank flags further tightening
According to Deutsche Bank, the upcoming ECB policy decision on Thursday will be “the key event” for Eurozone markets. Its European economists “expect a 25bp rate increase, taking the deposit rate to 2.50%,” with investors seen closely monitoring “any guidance regarding the likelihood of further tightening.” The bank adds that its economists “now expect an additional hike in December,” with the rationale set out in their preview note, and note that they have upgraded their medium-term outlook, lifting their 2026 and 2027 Euro Area growth forecasts “by 0.3pp and 0.1pp to 0.8% and 1.2% respectively.”
Technical Analysis: EUR/USD keeps a positive tone above the 100-day SMA
In the daily chart, EUR/USD holds a mild bullish bias as it trades above the 20-day Bollinger simple moving average and the 100-day moving average, suggesting underlying dip-buying interest while remaining contained below the upper Bollinger band resistance. The Relative Strength Index (14) hovers in the mid-50s, hinting at positive but not overstretched momentum that could support further gains as long as price holds above its nearby moving average floor.
On the topside, immediate resistance is located at the upper Bollinger band around 1.1710, and a sustained break above this ceiling would open the door to a more decisive bullish extension. On the downside, initial support is seen at the Bollinger midline near 1.1615, with the 100-day moving average at 1.1560 and the lower Bollinger band around 1.1525 providing deeper, layered support in the event of a corrective pullback.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Gold prices rose in India on Tuesday, according to data compiled by FXStreet.
The price for Gold stood at 13,492.28 Indian Rupees (INR) per gram, up compared with the INR 13,428.30 it cost on Monday.
The price for Gold increased to INR 157,370.30 per tola from INR 156,625.00 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 13,492.28 |
10 Grams | 134,921.80 |
Tola | 157,370.30 |
Troy Ounce | 419,663.80 |
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.
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.
(An automation tool was used in creating this post.)
- Silver price capitalizes on a lower US Dollar, US Treasury Yields.
- Investors keenly await the US PPI and CPI data for August.
- The US headline CPI is expected to remain stronger due to elevated energy prices.
Silver price (XAG/USD) is up 1.25% to near $67.00 during the Asian trading session on Tuesday. The white metal strengthens as the US Dollar (USD) and United States (US) Treasury Yields come under pressure, with investors shifting their focus to the Consumer Price Index (CPI) data of August scheduled for Friday.
As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.1% lower to near 98.83 even after recovering some of its early losses. 10-year US Treasury Yields are down 0.17% to near 4.77%.
Lower US bond yields result in an improvement in the appeal of non-yielding assets, such as Silver.
Investors will pay close attention to the US CPI data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.
TD Securities sees core inflation contained even as headline CPI firms
According to TD Securities, the August CPI report is likely to show that “underlying inflation stayed under control,” with core prices “rising 0.19% m/m (2.3% y/y).” The bank expects the “services segment” to be the main driver of gains, while “core goods prices likely acted as a drag by posting a modest m/m drop.”
In contrast, TD looks for “headline CPI” to post “a stronger 0.37% m/m (3.4% y/y) due to rising energy prices and a slight pickup in food inflation.” The bank also cautions that “risks to our forecasts” are “skewed to the upside,” noting that its projections assume “a number of large price declines in tariff-exposed goods categories, including apparel and household goods.”
Before the US consumer inflation data, investors will focus on the Producer Price Index (PPI) data of August, which will be released on Thursday.
Silver Technical Analysis
In the daily chart, XAG/USD trades at $66.97. The pair holds a constructive near-term bias as price remains above the nine-day Exponential Moving Average (EMA) at $66.49, suggesting the recent pullback is being supported rather than reversed. The Relative Strength Index (RSI) around 55 keeps a mildly positive tone, hinting that bullish momentum is still intact without yet pushing into overbought territory.
On the downside, initial support is aligned with the nine-day EMA at $66.49, where a daily close below would hint at a deeper consolidation toward lower levels not yet defined by the present indicators. Looking up, the August high at $71.12 could act as a key hurdle.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
(This story was corrected on September 8 at 04:47 GMT to say in the title that Silver Price Forecast: XAG/USD jumps to near $67, not $37)
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.
- Gold regains some positive traction on Tuesday as the USD extends its JPY-led decline.
- Fed rate hike bets and geopolitical risks could limit USD losses and cap the commodity.
- The upside seems limited as traders seem hesitant ahead of the key US inflation data.
Gold (XAU/USD) attracts some buyers during the Asian session on Tuesday, snapping a two-day losing streak as the recent US Dollar (USD) pullback from a three-week high gains momentum amid the rallying Japanese Yen (JPY). However, hawkish US Federal Reserve (Fed) expectations, along with persistent geopolitical uncertainties, offer some support to the safe-haven buck and cap the non-yielding bullion. Traders also seem reluctant to place aggressive directional bets and opt to wait for the release of the latest US inflation figures, due later this week.
The US Producer Price Index (PPI) is due on Thursday and will be followed by the US Consumer Price Index (CPI) on Friday. The crucial data will be looked at for more cues about the Fed's policy path amid inflation risks stemming from higher energy prices. The outlook, in turn, will play a key role in influencing the near-term USD price dynamics and provide some meaningful impetus to the Gold price. Meanwhile, traders ramped up bets for a Fed rate hike later this month after the US Nonfarm Payrolls (NFP) report showed that job growth accelerated in August.
USD support seen as markets await key US CPI
Strategists at OCBC describe the latest US payrolls report as "supportive of the USD at the margin, but not sufficient on its own to drive a sustained leg higher." They argue that the stronger jobs data "reinforces the resilience of the US economy and should keep the risk of Fed tightening alive, which in turn may restrain USD downside." However, with "wage pressures still contained," OCBC expects markets will "require firmer inflation evidence before pricing a Sept hike with greater conviction." In this context, they note that "focus therefore shifts to this week’s CPI, where an upside surprise could provide the catalyst for renewed USD strength, while a softer print would likely keep price action more two-way."
Furthermore, the widening US-Iran confrontation keeps the geopolitical risk premium in play and should limit losses for the safe-haven Greenback. In the latest development surrounding the Middle East crisis, Iran threatened to retaliate against any new US attacks on its assets, warning that energy infrastructure across the Gulf was vulnerable. Adding to this, Iran’s security chief, Mohsen Rezaei, said that Tehran is preparing to enforce a full blockade around the Strait of Hormuz in response to economic sanctions, intensifying fears of a prolonged disruption to oil supplies.
Investors remain worried that elevated energy prices would rekindle inflationary pressures, underpinning prospects for Fed policy tightening. This, in turn, backs the case for the emergence of USD dip-buying and warrants caution for XAU/USD bulls. Hence, it will be prudent to wait for strong follow-through buying before positioning for any meaningful appreciating move for the Gold price and an extension of the recovery from an over one-month low, touched last week.
XAU/USD daily chart
Technical Analysis
The precious metal holds above the 200-day Exponential Moving Average (EMA) at roughly $4,288 and above a dense Fibonacci support band, keeping the near-term bias constructive despite fading momentum. Meanwhile, the Relative Strength Index (RSI) near 52 suggests a neutral-to-mildly positive tone. However, the Moving Average Convergence Divergence (MACD) below zero with a negative reading around -24 hints at waning upside pressure after the recent pullback.
The mixed technical setup suggests that the Gold price could face first resistance at the 23.6% Fibonacci retracement level of the June-August upswing, around $4,523. This is followed by the recent swing-high zone anchored by the upper Fibonacci reference near $4,697.36, where a break would reopen the path for a renewed leg higher. On the downside, initial support is seen at the 38.2% Fibo. retracement near $4,415, followed by the 50.0% level at about $4,328 and the 61.8% retracement around $4,241.94, with the 200-day EMA near $4,288 adding broader trend backing just below the market.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.13% | -1.72% | -0.21% | -0.21% | 0.40% | 0.03% | |
| EUR | 0.10% | -0.02% | -1.60% | -0.11% | -0.09% | 0.51% | 0.13% | |
| GBP | 0.13% | 0.02% | -1.68% | -0.07% | -0.06% | 0.54% | 0.16% | |
| JPY | 1.72% | 1.60% | 1.68% | 1.62% | 1.61% | 2.21% | 1.82% | |
| CAD | 0.21% | 0.11% | 0.07% | -1.62% | 0.05% | 0.61% | 0.23% | |
| AUD | 0.21% | 0.09% | 0.06% | -1.61% | -0.05% | 0.60% | 0.22% | |
| NZD | -0.40% | -0.51% | -0.54% | -2.21% | -0.61% | -0.60% | -0.38% | |
| CHF | -0.03% | -0.13% | -0.16% | -1.82% | -0.23% | -0.22% | 0.38% |
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).
Reserve Bank of Australia (RBA) Assistant Governor Hunter said on Tuesday that the housing market is an important transition mechanism for monetary policy. Hunter added that the central bank is looking to cool things off in both the housing market and the broader economy.
Key quotes
Housing market crucial transition channel for monetary policy.
Effect of house price changes on consumer spending actually quite small.
Don’t anticipate recession in economy.
We want to see a weaker economy relative to trend.
Aiming to cool down housing market, economy.
Monitoring Bathla situation, no systemic risk seen.
Board has been clear inflation is top priority.
July CPI data represented just one month.
Board worried about inflation, has low tolerance.
Board may need to hike rates if inflation looks set to intensify.
Market reaction
At the time of writing, the AUD/USD pair is down 0.04% on the day at 0.7215.
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
Secretary of Iran's Supreme National Security Council, Mohsen Rezaei, warned on Tuesday that Tehran would respond to what it calls US "economic warfare" by imposing a maritime exclusion zone across the Persian Gulf.
"Economic warfare will be met by a maritime exclusion zone across the Persian Gulf to the blockade perimeter," said Rezaei, adding the zone would extend to the edge of the US naval blockade currently in place around Iranian ports.
"In recent days, Washington has received a clear warning from Iran's new missiles," Rezaei said in a post on X. Rezaei stated that the country's military posture toward American forces had been "fundamentally recalibrated.”
Rezaei was likely referring to the Qassem Basir ballistic missile that Iranian media reported was fired at US warships near the Strait of Hormuz. The US military said its warships evaded any missile attacks.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 0.02% on the day at $93.15.
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.
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