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A senior Islamic Revolutionary Guards Corps (IRGC) official, Hossein Taeb, said on Thursday that the Strait of Hormuz is "under Iran's control and management" after US President Trump said Washington has "total control" over the waterway, Fox News reported. 

"Today you see that the Strait of Hormuz is under the management and control of the Islamic Republic," Taeb said, according to the semi-official Fars news. He added that Iran was continuing on its course in complete security.

Meanwhile, Iran's joint military command, Khatam al-Anbiya Central Headquarters, stated that no vessel could transit the critical waterway without Tehran's permission.

On Thursday, the United Arab Emirates (UAE) said Iran attacked two of its vessels as they transited the Strait of Hormuz, blasting Tehran for what it called “flagrant” maritime violations.

US Vice President JD Vance on Thursday said he is confident that the United States will emerge from its war with Iran in a stronger position, particularly with respect to Tehran’s nuclear program and stable fuel prices for Americans. 

Market reaction

At the time of writing, the West Texas Intermediate (WTI) is up 0.18% on the day at $81.50.

• Gold price edges higher to around $4,360 in Friday’s early Asian session. 
• Traders further reduced the odds for a Fed September rate hike following cooler US PPI inflation data. 
• Iran said the Strait of Hormuz won't open unless the other side meets commitments. 

Gold price (XAU/USD) holds positive ground near $4,360 during the early Asian session on Friday. The precious metal gains momentum following US inflation data. Traders will take more cues from the US July Retail Sales report, which is due later on Friday. 

Softer US Producer Price Index (PPI) inflation reinforced bets the Federal Reserve (Fed) will refrain from raising interest rates next month. Data released by the US Bureau of Labor Statistics on Thursday showed that the headline PPI was unchanged MoM in July, versus -0.1% prior, below the market expectations of 0.2%. 

Excluding food and energy, the core PPI rose 0.2% MoM in July, against the forecast for a 0.3% gain. On an annual basis, the headline PPI climbed 4.7% YoY in July, while the core PPI rose 4.2% YoY during the same period. 

Cooler US PPI inflation data sharply reduced expectations for a Fed rate hike next month, which could provide some support to the yellow metal. Money markets priced in less than a 40% chance of a September Fed hike. It’s worth noting that lower interest rates reduce the opportunity cost of holding non-yielding bullion.

On the other hand, ongoing tensions in the Middle East and uncertainty surrounding reopening the Strait of Hormuz could raise oil-driven inflation concerns and weigh on the Gold price. Iran’s Foreign Minister Abbas Araghchi warned Washington to “be careful” after US President Donald Trump insisted the US has full control of the Strait of Hormuz. Meanwhile, Iran's joint military command, Khatam al-Anbiya Central Headquarters, said on Thursday that no vessel could transit the critical waterway without Tehran's permission.

Gold support seen holding as Fed stays on pause

According to TD Securities, the interest-rate backdrop remains constructive for bullion, with a “Fed likely to remain on hold, despite upside in energy prices” expected to keep “the yellow metal well-supported in the higher range.” The bank suggests that the combination of steady Fed policy and firmer energy markets should help anchor gold prices within this elevated trading band.

Technical Analysis: Gold remains capped under the key 100-day SMA

In the daily chart, XAU/USD remains capped in the near term as it holds below the 100-day Moving Average (MA), while still trading comfortably above the Bollinger Bands’ middle line. The Relative Strength Index (14) at 62.72 shows firm but not extreme bullish momentum, which hints that upside attempts could continue, though the broader structure suggests rallies are vulnerable while price stays under the 100-day MA.

On the topside, immediate resistance is located at the 100-day MA at $4,385, with a stronger barrier at the Bollinger Bands’ upper line near $4,435. On the downside, initial support emerges at the Bollinger middle band around $4,155, ahead of a deeper floor at the lower band near $3,880, where buyers would be expected to reassert themselves if the current pullback extends.

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

• GBP/JPY remains trapped near 215.00 as traders avoid directional bets.
• Flat RSI signals consolidation while 50-day SMA caps upside.
• Break below 214.57 exposes 200-day SMA and 211.47.

The GBP/JPY remains directionless on Thursday as traders turn cautious about opening fresh directional bets amid intervention fears in the FX markets, which could strengthen the Yen, and after solid UK data. The cross-pair sits at around 215.00, down 0.02%.

GBP/JPY Price Forecast: Technical Outlook

GBP/JPY faced strong resistance at around the 50-day Simple Moving Average (SMA) at 215.44. leading to sideways movement. The Relative Strength Index (RSI) turned flat at around its 50-neutral level, hinting that further consolidation lies ahead.

For a bullish resumption, the first resistance levels is the 50-day SMA and then the 216.00 milestone. A decisive break opens the path to 216.50 and ultimately reaches the 217.00 psychological barrier.

On the flip side, the GBP/JPY finds support at 215.00, with the 100-day SMA at 214.57 being up next. Beneath this area, the 200-day SMA stands at 212.12, just above the August 7 low of 211.47.

GBP/JPY Price Chart – Daily

• AUD/USD stays flat as softer US PPI weighs on Dollar.
• Fed September hold odds rise after inflation and claims data.
• RBA’s Kent warns upside inflation risks could require hikes.

The Aussie Dollar holds steady at around 0.7061 after US inflation data weighed on the Greenback, which recovered some ground to finish Thursday’s session almost flat. The AUD/USD registers modest losses of 0.01%

AUD/USD steadies as softer US data clashes with hawkish RBA guidance

Data from the US showed that PPI was below estimates and improved compared with June’s print. Core PPI also ticked lower, aligned with the forecast. At the same time, Initial Jobless Claims for the week ending August 8 edged up from 200K to 209K, above forecasts but close to the 4-week average, an indication that the labour market is solid.

This prompted a repricing for the future of interest rates set by the Federal Reserve. Now, traders expect a rate increase towards the end of 2026, while for the September meeting, probabilities dipped to 30% for a hike and a 70% for a hold.

FOMC members Austan Goolsbee and Thomas Barkin cheered the data, but not Cleveland Fed's Beth Hammack, who said the Fed should raise rates to restrain growth and inflation.

In Australia, Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent stated that inflation risks are to the upside and that, if realised, rates would need to rise again.

Ahead, the Aussie economic docket will feature a speech from Governor Michelle Bullock. On Friday, the US schedule will feature July Retail Sales and the University of Michigan Consumer Sentiment.

AUD/USD Price Forecast: Technical Outlook

In the daily chart, AUD/USD trades at 0.7062, holding a bullish near-term bias as it remains above the latest simple moving average cluster around 0.6990 and the short-term rising trend-line support near 0.6955. The broader uptrend off the 0.6830s zone is still in play, while the Relative Strength Index (14) around 59 stays in positive territory without yet signaling overbought conditions, suggesting room for further gains as long as the pair is supported on dips.

On the topside, initial resistance emerges at the upward trend-line projection around 0.7277, followed closely by another rising structural barrier near 0.7297; a sustained break above this cluster would expose higher trend resistance towards 0.8385 and 0.9080. On the downside, immediate support is seen at the rising line near 0.6955, with the latest simple moving averages clustered around 0.6990 providing additional underlying demand, while a deeper slide would look towards the former bearish trend-line break region around 0.6403 as a more distant structural floor.

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

• USD/JPY trades at 159.50, the exact midpoint of the intervention move.
• Roughly 13.75 trillion Yen of official buying, half of it already retraced.
• Japanese policy rate 1.00% against inflation that last printed at 1.7%.

The Dollar changes hands at 159.50 against the Yen on Thursday, a fraction higher on the session inside a range of barely 55 pips. The level matters more than the move, because 159.50 sits almost exactly halfway between the pre-intervention peak just short of 164.00 and the low just above 155.00 that Tokyo and Washington bought together at the start of the month.

Seven sessions on from the largest Yen-buying operation ever mounted, half of it has been handed back. No fresh operation has been announced and none has been required, because the market has unwound the move without anyone standing in its way.

The most expensive floor in history is half gone

Estimates put the opening solo operation near 8.45 trillion Yen in a single session, the largest on record, with roughly 5.3 trillion more the following day alongside the US Treasury. That second leg was the first joint Yen-buying operation with Washington since 1998, and both capitals said afterwards that they would not hesitate to repeat it.

The combined effect was a drop from just short of 164.00 to just above 155.00, close to nine Yen inside two sessions. The pair now trades at 159.50, which puts four and a half of those nine Yen back into the hands of the people the operation was aimed at. Official buying purchased a level, not a trend.

The tally itself will not be public for another two weeks. Japan's Ministry of Finance publishes intervention totals monthly with a cut-off near the 28th, so the bill for the operation arrives at the end of August. Traders will read that number with the exchange rate nearer to where the buying started than to where it stopped.

One detail from the announcement deserved more attention than it received. Tokyo signalled it would fund future operations through the Federal Reserve's repo facility for foreign monetary authorities rather than by selling Treasuries, which removes the constraint that historically capped how much it could spend. Money was never the limit here, which is what makes a half-retraced operation such an awkward result.

A Dollar-negative session the Yen still lost

The July Producer Price Index (PPI) landed flat MoM against 0.2% expected, with the YoY rate down to 4.7% from 5.5% and the core measure up 0.2% against 0.3%. Initial jobless claims came in at 209K against 202K expected and 200K previously. Every one of those readings argues for a weaker Dollar.

Rate futures now put a September 16 hold at 65.2%, leaving a hike tail of 34.8% at a meeting that was a coin flip on August 10. December 9 gives the current range a 34.1% chance of surviving the year, and the cut column is empty at every 2026 meeting. The Dollar was handed a softer rate path on the day and the Yen still lost ground to it.

The carry trade does not need the Federal Reserve to hike. It needs Japan's real policy rate to stay negative, and with policy at 1.00% against inflation that last printed at 1.7%, it is comfortably there. A quarter point in Washington changes the size of that gap and nothing whatever about its direction.

Energy is doing the rest of the work against this currency. Talks on reopening the Strait of Hormuz are deadlocked, transits ran eight vessels on Tuesday against roughly 130 before the war, and Japan imports almost all of the crude it burns. An energy shock is a terms-of-trade tax on a net importer, which is the one bearish argument for the Yen that no amount of official buying can touch.

What lands next

Friday brings US retail sales for July at 12:30 GMT, with the headline expected at 0.1% against 0.2% previously, followed at 14:00 GMT by the preliminary University of Michigan sentiment index at 54.5 against 55.2. The inflation expectations components matter more than the headline given where September pricing now sits.

Japan's own calendar carries the heavier weight. Preliminary second-quarter Gross Domestic Product (GDP) lands late on Sunday August 16 at 23:50 GMT, with quarterly growth expected at 0.5% and the annualised rate at 2% against 1.8% previously. July trade figures follow on August 19 and national inflation on August 20, where the headline last printed at 1.7% and the measure excluding fresh food at 1.6%.

Those inflation figures decide whether the Bank of Japan has cover to follow June's move to 1.00% with another one. A print anywhere near 1.7% leaves the real rate deeply negative and leaves the Ministry of Finance defending a level that its own central bank is not helping it defend. The Federal Open Market Committee (FOMC) minutes on August 19 sit in the same window.

Levels

Resistance: The 50-day Exponential Moving Average (EMA) just short of 160.50 is the first ceiling and it is declining into price, with the 160.00 handle the marker beneath it. Above there, the pre-intervention peak just short of 164.00 is the only structure left on the chart.

Support: The 159.00 area held on the session, with 158.00 and the rising 200-day EMA just beneath it as the next shelf. Under that sits the intervention low just above 155.00, the floor the operation paid for.

Bias: Bullish while 158.00 holds, with 160.50 the objective and a daily close above it re-opening the 162.00 area. Invalidation on a daily close beneath 158.00, which would put the recovery back into official hands. Daily momentum argues for patience rather than chasing, with the Stochastic Relative Strength Index (Stoch RSI) near 24 and falling while price grinds higher.

USD/JPY daily chart

• GBP/USD trades just under 1.3500 after a session range barely 40 pips wide.
• June growth 0.3% against a flat consensus, manufacturing output down 0.5%.
• September Fed hike odds 34.8%, down from a coin flip on August 10.

The Pound holds just under 1.3500 on Thursday inside a session range barely 40 pips wide, which is a thin response to a morning that handed Britain a growth beat and an afternoon that handed the Dollar a soft inflation print. Sterling reached fractionally above 1.3500 and was turned back just short of 1.3550 on Wednesday, the same area that capped the pair in mid-July.

Both legs of the exchange rate moved in the Pound's favour and the price did nothing with either. The pair has still climbed roughly two cents since the start of August, enough to reclaim the converged 50-day and 200-day Exponential Moving Average (EMA) band near 1.3400 that had capped it since early July.

The quarter's best month was bought in the Gulf

Monthly Gross Domestic Product (GDP) rose 0.3% in June against a consensus of no growth at all, and the second-quarter YoY rate came in at 1.2% against 1.1% expected. The quarterly rate itself matched consensus at 0.4% and slowed from 0.6%, so the entire upside surprise sits inside one month.

What sat inside that month matters more than the headline number. Services carried the June advance, and the detail credits the temporary Gulf ceasefire, the start of the World Cup and favourable weather. Two of those are calendar events that do not repeat. The third no longer exists.

Talks on reopening the Strait of Hormuz are deadlocked, with Tehran attaching six conditions to any agreement and Washington insisting the waterway is already under its control. Transits ran eight vessels on Tuesday against a 10-day average near 12 and roughly 130 before the war. A growth print whose strongest component was underwritten by a truce that broke in July describes a quarter that has already gone.

The factory side of the release went the other way entirely. Industrial production fell 0.2% MoM in June against expectations of a small rise, and manufacturing output fell 0.5% against a 0.2% decline expected. Britain grew in June because households bought services in the one month the Gulf was quiet, which is a poor foundation to hand a currency.

The Dollar is running this pair

The July Producer Price Index (PPI) landed flat MoM against 0.2% expected, with the YoY rate down to 4.7% from 5.5% and the core measure up 0.2% against 0.3%. Initial jobless claims came in at 209K against 202K expected and 200K previously. Both readings argue the same way, and the front end has been moving on them for three sessions.

Rate futures now put a September 16 hold at 65.2%, leaving a hike tail of 34.8% at a meeting that was a coin flip on August 10. October 28 has drifted to an even split, and December 9 gives the current range a 34.1% chance of surviving the year. The cut column is empty at every 2026 meeting, so this is a downgrade of the hike case rather than the start of an easing case.

Two policymakers spoke either side of that data and both read hawkish against their own recent averages, one of them among the three reserve bank presidents who dissented for a quarter point in July. Neither speech arrested the repricing.

None of that repricing has anything to do with Britain, and the cross rates say so plainly. The Pound sits near the top of its 30-day range against the Dollar while losing ground over the same month to the Yen, the Australian Dollar, the Canadian Dollar and the New Zealand Dollar. A currency that rises against one counterpart and falls against four others is not being bought. It is being measured against something that is being sold.

The first genuinely British week of the summer

Friday brings US retail sales for July at 12:30 GMT, with the headline expected at 0.1% against 0.2% previously. The preliminary University of Michigan sentiment index follows at 14:00 GMT, expected at 54.5 against 55.2, with its inflation expectations components carrying more weight than the headline.

Next week hands the initiative back to the domestic data. Labour market figures land on August 18, carrying the claimant count, employment change and an unemployment rate that last printed at 4.9%, and July inflation follows on August 19 against a 2.6% headline and a 2.6% core. Retail sales and the preliminary August Purchasing Managers Index (PMI) surveys arrive on August 21.

Those releases are the last major domestic readings before the September 17 Bank of England decision, where three of nine members already prefer a higher rate. The Federal Open Market Committee (FOMC) minutes on August 19 sit in the same window, which makes the middle of next week the first two-sided test this rally has faced.

Levels

Resistance: The 1.3550 area is the line that matters, having capped the pair in mid-July and turned it back again on Wednesday. A daily close above it opens the early-May peak in the 1.3650 area.

Support: The reclaimed EMA band near 1.3400 is the first floor, roughly 75 pips beneath spot and the level that held this pair down through most of July. Below that sits 1.3300, then the summer base in the 1.3150 area.

Bias: Bullish while 1.3400 holds, with 1.3550 the objective and a break there opening 1.3650. Invalidation on a daily close back beneath 1.3400, which would hand the pair straight back to the band it just escaped. Daily momentum is stretched into resistance, with the Stochastic Relative Strength Index (Stoch RSI) near 70 and rising.

GBP/USD daily chart

The Chicago Fed President, Austan Goolsbee, who is a voter until 2027, acknowledged that the disinflation process is evolving and said so late in the North American session.

Goolsbee added that many inflation drivers came from tariffs, Oil, and other shocks expected to deliver a one-time increase. He said that if those shocks can be left in the rearview mirror, inflation can get towards the Federal Reserve’s 2% goal.

Key highlights:

Inflation readings improving, hope trend persists

Latest inflation figures have improved slightly

Many inflation factors stemmed from tariffs and oil, initially expected as one-time jumps

If can put some of that behind us, can steer inflation back to 2%

US economy remains stable

• WTI trades just above $80.00, down 1.69% and beneath its 50-day average.
• US Crude Oil stocks up 17.4 million barrels, the biggest build since January 2023.
• IEA has the market 1.8 million barrels a day short this quarter.

The largest weekly build in American Crude Oil inventories in three and a half years landed on Wednesday into a market that two forecasting agencies spent the same morning describing as physically short, and the barrel has been selling since. West Texas Intermediate (WTI) trades just above $80.00, down 1.69%, after a session that ran from just through the $82.00 handle to a flush short of $79.50 and then handed back most of the rebound.

Reconciling those two facts is the day's entire job, because the build is real, the shortage is real, and both hold at once only because the barrels are in the wrong ocean. Commercial stocks rose to 424.4 million barrels in the week ended August 7 against a polled expectation of a 1.4 million barrel draw, and even after that jump they sit around 2% beneath the five-year average.

A build that is really a traffic jam

Exports slumped while imports rose by 1.14 million barrels a day to 7.3 million, and cargo-tracking analysis puts the vast majority of the accumulation on the Gulf Coast. Refineries ran at 96.2% of operable capacity, so nothing in the release describes Americans consuming less. This is a cargo that could not leave the country.

The refined product data declined to corroborate any of it, which is the tell that separates a glut from a bottleneck. Gasoline inventories fell to 208.7 million barrels and sit 6% under the five-year average, distillates slipped to 107.1 million and sit roughly 12% under it, and European refining margins set fresh records this month. A market drowning in barrels does not price diesel that way.

Two agencies subtract the same demand

The International Energy Agency (IEA) now expects Crude Oil demand to contract by 1.6 million barrels a day across 2026, a decline 510K barrels a day deeper than the one it published in July. The Organization of the Petroleum Exporting Countries (OPEC) moved the same way on the same Wednesday, trimming its 2026 growth estimate to roughly 600K barrels a day from 780K.

Both numbers describe demand destroyed by price and by a shut waterway rather than demand lost to a soft economy, which is why the same report has the market short 1.8 million barrels a day this quarter. Gulf production recovered a further 2.5 million barrels a day in July to 23.9 million and still runs 8.3 million beneath its pre-conflict rate. The supply hole remains the larger number.

The war gets bigger and the barrel gets cheaper

Central Command spent Thursday announcing its first multi-domain, multinational attack drone task force, an expansion of the one-way attack squadron it stood up nine months ago. The War Secretary said separately from Panama that the naval blockade of Iranian ports can be sustained indefinitely on ship rotation, and the redirected-vessel count reached 59 as of August 12.

Against all of that, eight vessels transited the Strait of Hormuz on Tuesday, a one-week low, on a route that carried roughly 130 a day before the war began in late February. The theatre commander's own position has been reported two ways inside a fortnight, once as advice to halt a target-exhausted bombing campaign and once, via Israeli television, as support for further strikes. A market handed both readings has stopped paying for either.

The daily chart priced that indifference weeks ago, since a benchmark that travelled from near $67.00 to near $107.50 across four months has spent the past fortnight inside roughly $8.00. It has built a rising sequence of lows off the June trough while the war headlines grew louder, and today's decline reads as noise inside that compression rather than a break of it.

The one date that still carries a price

Monday is the only entry on this calendar with a genuine premium attached, because the 60-day negotiating window written into June's memorandum expires on August 17. An Iranian official told wires on Wednesday that Tehran sees nothing left to extend, while Washington claims total control of the strait and Tehran's foreign minister calls that a miscalculation. Selling into a hard-dated fuse with two sessions left is a position rather than a view.

What the calendar still owes this week

July producer prices arrived flat in the 12:30 GMT block against a 0.2% consensus, with the annual rate at 4.7% and the core measure up 0.2% against 0.3% expected. That relief was bought at the pump and the terminal: gasoline fell 5.7%, diesel fell 6.7% and accounted for more than half the decline in intermediate demand, and unprocessed energy materials fell 7.4%.

The month being measured is the one in which this benchmark peaked near $91.50 in late July, which is the recurring defect in energy-led inflation prints: they describe a tape already overwritten. Two regional Federal Reserve presidents speak into the same session, and Friday brings retail sales at 12:30 GMT against a 0.2% consensus and consumer sentiment at 14:00 GMT, seen at 54 from 55.2.

Levels

Resistance: The 50-day exponential moving average (EMA) at $80.72 sits immediately overhead after spot slipped beneath it, with the $81.50 area above that and the $82.00 handle where the day's high printed just through. A sustained move above $82.00 opens $82.50.

Support: The $80.00 handle is the first shelf beneath spot, then the day's low short of $79.50, then the 200-day EMA at $78.04, which was pierced and reclaimed during the early-August washout toward $74.00. The Stochastic Relative Strength Index (Stoch RSI) on the daily frame sits at 20.42 and is still falling, which argues for one more probe lower before the range reasserts.

Bias: Bullish while the 200-day EMA at $78.04 holds. A near-record inventory build that is a logistics artifact, a balance sheet the agencies themselves call short, and a hard deadline on Monday do not add up to a barrel that stays beneath its 50-day average for long. Objectives are the $82.00 handle then $82.50, with invalidation on a daily close beneath $78.00.

WTI daily chart

• EUR/USD holds above 1.1500 as softer PPI curbs Fed bets.
• Spanish inflation accelerates as energy costs pressure ECB expectations.
• EU GDP and US Retail Sales may break sideways trade.

The Euro holds firm above 1.1500 as inflation data in the US curbed Fed rate hike bets, as traders shifted from expecting a rate hike to a hold in the September 16 meeting, while investors await the release of economic growth figures in the European Union (EU).

EUR/USD steadies as softer US inflation contrasts with hotter Spanish prices

US producer-side inflation confirmed what the CPI revealed a day earlier: the disinflation process is evolving. The Producer Price Index (PPI) cooled in headlines and core figures, each at 4.7% and 4.2% respectively, when compared to June’s print.

This pushed investors to reduce bets on the Fed easing policy.in September. For December, the odds continued to edge lower, and now there’s a 67% chance for a rate hike by the end of the year, down from around 70% a day before, according to Prime Terminal.

Other data revealed that jobless claims edged up from 200K to 209K above estimates, though it remained slightly close to the 4-week average of 199K.

Meanwhile, geopolitical headlines remained limited, as Iran reaffirmed that the Strait of Hormuz remains closed and that it controls the Strait, echoing claims by US President Donald Trump.

Across the pond, inflation in Spain hit its highest level since May 2025, rising to 3.9%, driven by higher energy prices. 

Money markets are pricing in a near 87% probability that the European Central Bank (ECB) will increase rates by a quarter of a percentage point at its September meeting. Hence, EUR/USD’s price action remains sideways trading, with investors awaiting fresh catalysts from the Middle East.

On Friday, the economic docket in the Euro area will feature the release of Gross Domestic Product (GDP) figures, with the economy expected to grow 0.4% QoQ and 1% YoY. In the US, the schedule will feature July Retail Sales. Foreseen at 0.1% on a monthly basis, with the Control Group used to calculate GDP expected to hit June’s 0.5% number.

EUR/USD Price Forecast: Technical Outlook

In the daily chart, EUR/USD trades at 1.1529, maintaining a mildly bullish near-term bias as spot holds above the cluster of underlying levels. The latest simple moving average triple at 1.1465 now acts as a supportive floor beneath price, while the prior downward resistance trend line, broken at 1.1477, reinforces the reclaimed structure just below. Momentum is constructive, with the 14-period Relative Strength Index around 57, hinting at steady buying interest without reaching overbought conditions.

On the downside, immediate support is seen at the recent price base near 1.1529, followed by the former trend-line barrier turned support at 1.1477 and the simple moving average triple at 1.1465. On the topside, the next significant hurdle is the horizontal resistance level at 1.1849, and a sustained break above this barrier would open the way for a broader bullish extension in the days ahead.

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

• NZD/USD recovers to the mid-0.5800s after sliding to its lowest levels of the week.
• New Zealand's RBNZ inflation expectations eased, adding to the dovish case for the Kiwi.
• A softer US Dollar after this week's cooling data is cushioning the pair.

NZD/USD is recovering on Thursday in the American session, regaining the mid-0.5800s after rising off two-week lows reached during the Asian session. The New Zealand Dollar (NZD) has clawed back some ground as the US Dollar (USD) lost momentum.

A survey from the Reserve Bank of New Zealand (RBNZ) showed inflation expectations easing in the third quarter, slipping to 2.34% from 2.53% previously. Cooler expectations give the central bank less reason to tighten policy and add to the dovish backdrop for the Kiwi.

Offsetting that, the Greenback is on the back foot after soft US producer prices and a rise in weekly Initial Jobless Claims cooled bets on further Federal Reserve (Fed) tightening.

The risk-sensitive Kiwi remains exposed to the cautious mood surrounding Middle East tensions, however, which has kept a lid on its attempts to rebound.

With little on the domestic calendar ahead, direction looks set to come from the US side, leaving Friday's Retail Sales and Michigan Consumer Sentiment figures as the next tests for the pair.

Brown Brothers: RBNZ credibility supports case for further hikes

Brown Brothers Harriman’s Elias Haddad highlights that “overall, inflation expectations remain close to the RBNZ 2% target midpoint for inflation, underscoring the bank’s credibility.” At the same time, he argues that “nonetheless, above target inflation, more favorable domestic growth outlook, and a policy rate near the lower-end of the RBNZ’s neutral range (2.20%-4.10%) argue for additional RBNZ rate hikes,” reinforcing the case for further policy tightening despite well-anchored expectations.

Short-term technical analysis:

On the 4-hour chart, NZD/USD trades at 0.5851, holding a mildly bearish near-term tone as it slips below the 20-period Simple Moving Average (SMA) at 0.5864 while remaining only marginally above the 100-period SMA at 0.5843. The Relative Strength Index (RSI) around 43 leans soft but not oversold, hinting that sellers retain control though downside momentum is moderate rather than aggressive.

On the topside, initial resistance emerges at 0.5853 and 0.5858, forming a nearby cap ahead of the 20-period SMA at 0.5864, while stronger barriers align at 0.5907 and 0.5930, with 0.5965 higher up. On the downside, immediate support is seen just under the market at 0.5845, reinforced by the 100-period SMA at 0.5843 and the horizontal floor at 0.5842, where a break would likely extend the corrective phase.

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