Forex News
- AUD/USD struggles to gain any meaningful traction as traders seem hesitant ahead of the US NFP.
- The bearish technical setup backs the case for an extension of the pullback from a four-year high.
- A convincing break below the 200-day SMA/50% Fibo. confluence will reaffirm the negative bias.
The AUD/USD pair seesaws between tepid gains/minor losses through the Asian session on Thursday as traders opt to wait on the sidelines ahead of the crucial US Nonfarm Payrolls (NFP) report. Spot prices currently hover around the 0.6900 mark, nearly unchanged for the day, and remain close to a three-month low, touched on Tuesday.
From a technical perspective, the range-bound price action witnessed over the past week or so might be categorized as a bearish consolidation phase against the backdrop of the recent retracement slide from a multi-year peak. The AUD/USD pair, however, holds above the 200-day Simple Moving Average (SMA). The said support coincides with the 50% Fibonacci retracement level of the November-May upswing and should act as a key pivotal point.
Despite this modest structural support, momentum remains fragile as the Relative Strength Index near 31 hints at lingering downside pressure while the Moving Average Convergence Divergence (MACD) stays negative. This, in turn, suggests that any recovery attempts could be gradual rather than impulsive. On the topside, immediate resistance emerges at the 38.2% Fibo. at 0.6955, ahead of a more significant barrier at the 23.6% level near 0.7081.
On the downside, initial support is reinforced by the 0.6853 confluence, while deeper cushions align at 0.6751 and 0.6606, where lower Fibonacci supports could attract buyers if the AUD/USD pair slides further. Nevertheless, a convincing break below the 200-day SMA/50% retracement level will be seen as a fresh trigger for bearish traders and pave the way for a further near-term depreciating move.
(The technical analysis of this story was written with the help of an AI tool.)
AUD/USD daily chart
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- USD/CHF softens to near 0.8085 in Thursday’s early European session.
- Fed’s Warsh said overall inflation remains too high but noted that inflation risks have diminished since May.
- Traders await the Swiss CPI inflation and US employment reports on Thursday for fresh impetus.
The USD/CHF pair declines to around 0.8085 during the early European trading hours on Thursday. The US Dollar (USD) weakens against the Swiss Franc (CHF) on the weaker-than-expected ADP June employment report. Traders will take more cues from the Swiss Consumer Price Index (CPI) inflation data and the highly anticipated Nonfarm Payrolls (NFP) data, which are due later on Thursday.
Federal Reserve (Fed) Chairman Kevin Warsh said on Wednesday that inflation expectations and price risks have eased in recent weeks, while the ADP National Employment Report showed that private employment rose but less than expected. This could reinforce expectations that policymakers are in no rush to raise interest rates.
The US jobs report for June will take center stage later in the day. Economists expect the US economy to add 110,000 jobs in June, while the Unemployment Rate is projected to hold steady 4.3% during the same period. Any signs of weakening in the US labor market could weigh on the Greenback against the CHF.
That being said, "If the payrolls data exceed market expectations, the dollar could accelerate higher on a rebound," said Mitsubishi UFJ Bank senior analyst Akihiko Yokoo in a note.
On the Swiss front, the headline CPI is projected to show an increase of 0.5% YoY in June, compared to 0.6% in May. Analysts believe that a downside surprise matching Eurozone trends could weigh on the CHF as traders solidify expectations that interest rates will stay low for an extended period.
According to the Swiss National Bank (SNB) Financial Stability Report released on Thursday, the economic environment and conditions on the financial markets remain challenging for the Swiss financial sector. However, the central bank noted that the Swiss banking sector is well positioned to withstand the current challenging macroeconomic and financial environment.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
- Nonfarm Payrolls are expected to rise by 110K in June, slowing from the impressive 172K increase recorded in May.
- The Unemployment Rate is forecast to hold steady at 4.3%.
- US employment data could influence the Fed policy outlook and ramp up the US Dollar’s volatility.
The United States (US) Bureau of Labor Statistics (BLS) will release the Nonfarm Payrolls (NFP) data for June on Thursday at 12:30 GMT.
With investors pricing in a hawkish Federal Reserve (Fed) policy outlook with the new Chairman Kevin Warsh at the helm, the underlying details of the employment report could influence the timing of a possible interest rate increase.
Payroll data is among the indicators that generally trigger a significant market reaction. Still, this time, with all eyes on the inflation front, only a dismal print could hurt the US Dollar in a meaningful way.
What to expect from the Nonfarm Payrolls report?
Investors expect NFP to rise by 110K following three consecutive months of surprisingly strong increases. The Unemployment Rate is seen holding steady at 4.3%, while the annual wage inflation, as measured by the change in the Average Hourly Earnings (AHE), is projected to edge higher to 3.5% from 3.4% in May.
TD Securities analysts note that they expect NFP to rise at a softer pace than what markets expect.
“We expect June payrolls to moderate to 80k (55k private, 25k government) after strong early‑2026 gains. Job growth broadened beyond healthcare, led by trade/transport and leisure, but should cool this month. Local governments may stay firm on World Cup effects. We see the Unemployment Rate edging down to 4.2% as participation dips. AHE likely moderated to 0.2% m/m (3.5% y/y),” they add.
The Automatic Data Processing (ADP) reported on Wednesday that private sector employment in the US grew by 98K in June. This print followed the 122K increase recorded in May and came in below the market expectation of 113K.
Similarly, National Bank of Canada Senior Economist Jocelyn Paquet forecasts a 90K increase in NFP and explain:
“Based on the weekly data released by ADP and previously published “soft” employment indicators, such as S&P Global's flash composite PMI, job creation likely remained fairly robust during the month, although not as robust as what we had been accustomed to between February and May. Layoffs, for their part, may have increased slightly, judging by the rise in initial jobless claims recorded between the May and June survey periods. These two factors combined should, in our view, result in an increase of 90K in nonfarm payrolls.”
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
Read more.Next release: Thu Jul 02, 2026 12:30
Frequency: Monthly
Consensus: 110K
Previous: 172K
Source: US Bureau of Labor Statistics
America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
How will the US May Nonfarm Payrolls affect EUR/USD?
Although crude Oil prices came down to levels seen since pre-US-Iran conflict, investors remain concerned over global inflation remaining sticky, mainly due to heightened costs of consumer electronics via AI-driven hardware demand. As a result, the US Dollar (USD) has been outperforming its major rivals, supported by growing expectations for a tighter Fed policy.
Hammack flags broad inflation, keeps rate hike option alive
In an interview with CNBC on Tuesday, Cleveland Fed President Beth Hammack delivered a moderately hawkish message with the FXS Speechtracker score at 6.4/10.
This is slightly softer relative to the historical average of 7/10 but still signals a tightening bias. By stressing that the job market is “right around full employment” and that growth “looks good,” while warning that “inflation is still too high” and that rate hikes may need to be considered, the speech underscores a willingness to tighten policy despite concerns about the broader economy.
According to the CME FedWatch Tool, markets are currently pricing in about a 34% probability of the Fed raising the interest rate by 25 basis points (bps) as early as July, compared to a 6% chance seen in early June. Moreover, the probability of at least two rate increases by the end of 2026 now sits slightly above 40%.
Another positive surprise of 130K or higher in the headline NFP could feed into July rate hike projections and fuel another leg higher in the USD. In this scenario, EUR/USD could remain under bearish pressure and extend its downtrend in the near term.
On the other hand, a significantly disappointing print below 70K could trigger an upward correction in the pair. However, a steady bullish reversal is unlikely to materialize unless Fed policymakers shift their tone and put more emphasis on labor market conditions rather than the inflation outlook.
Given three consecutive months of very strong prints, however, a single NFP miss is likely to be overlooked, keeping any potential rebound in EUR/USD short-lived.
Eren Sengezer, European Session Lead Analyst at FXStreet, offers a brief technical outlook for EUR/USD:
“EUR/USD’s near-term technical outlook doesn’t point to oversold conditions and suggests that the bearish bias stays intact. The Relative Strength Index (RSI) indicator on the daily chart remains below 40 after recovering from oversold territory and the pair trades slightly above the lower arm of the Bollinger Band.”
“On the downside, 1.1320-1.1280 (lower arm of the Bollinger Band, static level) forms the first support ahead of 1.1160 (static level) and 1.1000 (psychological level, static level).”
“Looking north, a strong resistance area could be spotted at the 1.1485-1.1500 region (20-day Simple Moving Average (SMA), round level) before 1.1600 (round level, 50-day SMA) and 1.1650-1.1660 (200-day SMA, descending trend line, 100-day SMA).”
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
Japanese officials are moving away from telegraphing intervention risk and signaling a more targeted campaign to squeeze speculators and raise the cost of betting against the battered Japanese Yen (JPY), Reuters reported on Thursday.
Authorities are also avoiding any suggestion of a specific yen level that would trigger intervention, with timing instead focused on preventing excessive falls.
The sources said that the shift reflects a more aggressive approach by the Ministry of Finance (MOF), which is using silence as a policy tool to keep traders guessing. That raises the risk of a surprise intervention driven by an accumulation of speculative short-JPY bets rather than by the currency crossing a publicly understood threshold.
Market reaction
At press time, the USD/JPY pair trades 0.10% lower at around 162.42.
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.
- USD/IDR loses minor ground as Fed Warsh's surprisingly less hawkish comments reduce the urgency for immediate interest rate hikes.
- Soft US economic data further cooled hawkish Fed sentiment, reducing expectations for aggressive future interest rate hikes.
- Fitch Ratings warned that prolonged declines in Indonesia's foreign exchange reserves could pressure the country's credit rating.
USD/IDR inches lower after opening at a bullish gap, remaining in the positive territory for the fourth consecutive day, trading around 18,030 during the Asian hours on Thursday. The pair loses minor ground as the US Dollar (USD) stabilizes following a relatively subdued appearance by Federal Reserve (Fed) Chair Kevin Warsh at the ECB Forum on Central Banking on Wednesday.
Warsh opted not to provide explicit guidance regarding the central bank's upcoming July policy decision. While he acknowledged that inflation remains too elevated and reiterated a firm commitment to the Fed's 2% target and institutional independence, his overall tone was perceived as less hawkish than anticipated. Additionally, Warsh noted a personal preference for winding down the central bank's bond portfolio but emphasized that any adjustments to the balance sheet would only occur after extensive public preparation.
The Greenback also faces headwinds on easing risk aversion amid a wave of optimistic geopolitical developments out of the Middle East. Qatari officials reported "positive progress" in the ongoing negotiations between US and Iranian diplomats regarding a memorandum of understanding, noting that both sides have agreed to continue their dialogue. Reinforcing this positive sentiment, US Vice President JD Vance stated that the discussions in Doha are going well and indicated that formal talks regarding the nuclear issue are expected to commence in the near future.
Moreover, a batch of soft US economic data further cooled the hawkish sentiment surrounding the Fed outlook. June’s ADP Employment Change report showed that private payrolls grew by just 98K, missing Wall Street's 113K forecast and slowing from May's 122K increase. Additionally, the manufacturing sector showed signs of cooling as the ISM Manufacturing PMI edged lower to 53.3, missing the 54.0 consensus estimate. Together, this cooling data and diplomatic progress have investors shifting their full attention to the upcoming Nonfarm Payrolls (NFP) report for fresh insights into the labor market and the Fed’s policy path.
Fresh data indicated Indonesia’s Trade Balance unexpectedly swung to a $1.61 billion deficit in May, marking its first gap since April 2020 as exports dropped 5.73% while imports surged 22.16%. Meanwhile, annual inflation hit a three-month high of 3.34% in June, driven by elevated food prices. Amid these headwinds, Fitch Ratings warned that a prolonged decline in foreign exchange reserves could pressure the nation's credit rating.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Gold prices rose in India on Thursday, according to data compiled by FXStreet.
The price for Gold stood at 12,410.68 Indian Rupees (INR) per gram, up compared with the INR 12,310.58 it cost on Wednesday.
The price for Gold increased to INR 144,755.20 per tola from INR 143,588.20 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 12,410.68 |
10 Grams | 124,112.90 |
Tola | 144,755.20 |
Troy Ounce | 385,998.60 |
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.)
- EUR/USD attracts some buyers and moves away from the weekly low.
- The upside seems limited as traders keenly await the US NFP report.
- The bearish setup backs the case for the emergence of fresh sellers.
The EUR/USD pair ticks higher during the Asian session on Thursday, though it lacks bullish conviction as traders keenly await the release of the crucial US Nonfarm Payrolls (NFP) report. Spot prices currently trade around the 1.1385 area and remain close to the weekly low, touched on Wednesday.
From a technical perspective, the EUR/USD pair retains a negative near-term bias beneath the 200-period Exponential Moving Average (EMA) on the 4-hour chart. Adding to this, the recent recovery from the lowest level since May 2025 has been along an upward-sloping channel, which constitutes the formation of a bearish flag pattern.
Moreover, the Relative Strength Index (14) near 42.5 and a slightly negative Moving Average Convergence Divergence (MACD) reading hint at fading bullish momentum. Momentum indicators together reinforce the near-term bearish outlook and suggest that the path of least resistance for the EUR/USD pair remains to the downside.
The EUR/USD pair holds just above the lower boundary of the rising parallel channel at 1.1366. This, however, points to only a tentative structural support, and a convincing break below would open the way for a slide. Spot prices might then aim towards retesting the year-to-date trough, around the 1.1335-1.1330 region, touched in June.
On the topside, initial resistance aligns with the upper edge of the upward parallel channel at 1.1451, ahead of stronger supply at the 200-period EMA clustered around 1.1522. The EUR/USD pair would need to reclaim the said barriers to ease the broader bearish tone and shift the technical picture toward a more constructive outlook.
(The technical analysis of this story was written with the help of an AI tool.)
EUR/USD 4-hour chart
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
- EUR/JPY posts modest losses near 184.95 in Thursday’s early European session.
- The cross keeps a bullish near-term tone, but further consolidation cannot be ruled out amid neutral RSI momentum.
- The first upside barrier is seen at 185.00; the initial support level to watch is 184.90.
The EUR/JPY cross trades on a negative note around 184.95 during the early European session on Thursday. Eurozone inflation fell more than expected in June, easing pressure on the European Central Bank (ECB) to raise rates at its next meeting on July 23. This, in turn, could weigh on the Euro (EUR) against the Japanese Yen (JPY).
Data released by Eurostat on Wednesday showed that Eurozone inflation, as measured by the Harmonized Index of Consumer Prices (HICP), dropped to 2.8% YoY in June from 3.2% in May. This figure came in below the consensus of 3.0%.
Morgan Stanley economists said softer Eurozone June inflation could also “lower the bar a touch for the ECB to be on hold in September,” adding that energy pressures likely had a “limited” direct impact on eurozone prices.
Following Wednesday’s print, traders continued to anticipate the ECB to deliver another quarter-point rate rise by the end of this year, according to Morningstar.
Technical Analysis:
In the daily chart, EUR/JPY holds above the Bollinger Bands middle line and the 100-day moving average, keeping a mildly bullish near-term tone as price gravitates near recent highs. The Relative Strength Index (14) hovers around 50, suggesting balanced momentum and favoring a continuation of range-bound gains rather than an impulsive breakout.
On the topside, immediate resistance is located at the 185.00 psychological level, en route to the June 30 high of 185.86. The next hurdle emerges at the Bollinger Bands upper band near 186.15, where bullish attempts could meet profit-taking.
On the downside, initial support is seen at the Bollinger middle band at 184.90, followed by the 100-day moving average at 184.65; a deeper pullback would expose the lower Bollinger band support around 183.65.
(The technical analysis of this story was written with the help of an AI tool.)
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 trades with a positive bias for the second straight day amid a modest USD downtick.
- Elevated Fed hike bets and Iran risks should limit USD losses and cap the precious metal.
- Traders might also opt to wait for the key US NFP report before placing directional bets.
Gold (XAU/USD) attracts fresh buyers during the Asian session on Thursday, following the previous day's volatile price swings and a late pullback from an over one-week high. The US Dollar (USD) edges lower on the back of Wednesday's softer-than-expected US macro data and turns out to be a key factor supporting the commodity for the second consecutive day. However, elevated US Federal Reserve (Fed) rate hike expectations, along with geopolitical risks, act as a tailwind for the buck and should keep a lid on the bullion ahead of the US employment details.
Automatic Data Processing (ADP) reported on Wednesday that private sector employment in the US rose by 98K in June, down from the previous month's unrevised reading of 122K and missing consensus estimates of 113K. Furthermore, the Institute for Supply Management’s (ISM) Manufacturing PMI eased from 54 to 53.3 in June. Adding to this, the Prices Paid Index fell to 73 from 82.1, while the Employment Index edged up to 49.7 from 48.6 in May. Adding to this, the recent slump in Crude Oil prices has dramatically tempered near-term inflation fears and keeps the USD bulls on the defensive, which, in turn, is seen acting as a tailwind for the Gold price.
Nevertheless, the CME Group's FedWatch Tool indicates that traders are still pricing in around a 64% chance that the US central bank will raise borrowing costs in September and assigning a nearly 85% probability of a move by the end of this year. The bets were reaffirmed by Fed Chair Kevin Warsh's comments on Wednesday, saying that he will stick to the 2% inflation target and disappoint anyone who expects loose monetary policy despite President Donald Trump's call for rate cuts. Moreover, several Fed officials have indicated that higher interest rates may be necessary to bring inflation back to the 2% target. This should limit USD losses and cap the non-yielding Gold.
Meanwhile, Iran and the US concluded a round of indirect talks in Qatar with no sign that the two countries have made headway toward lasting peace amid tensions over the critical Strait of Hormuz. Separately, Russia launched a barrage of missiles and drones on Ukraine’s capital, Kyiv, early Thursday. This keeps geopolitical risks in play and favors the USD bulls as the focus remains on the release of the US Nonfarm Payrolls (NFP) report, due later during the North American session. The crucial data remains a key driver of the Fed's monetary policy, which, in turn, should influence the buck and help investors determine the near-term trajectory for the Gold price.
XAU/USD 4-hour chart
Gold needs to surpass 38.2% Fibo. level and 100-SMA on H4 to back the case for further gains
From a technical perspective, the overnight short-covering rally faltered near the 38.2% Fibonacci retracement level of the recent decline witnessed over the past two weeks or so. Moreover, the XAU/USD pair remains below the 100-period Simple Moving Average (SMA), reinforcing a near-term bearish bias.
However, momentum indicators are improving, with the Moving Average Convergence Divergence (MACD) turning higher above zero and the Relative Strength Index (RSI) holding around 54. Furthermore, acceptance above the 23.6% Fibo. backs the case for additional recovery attempts that remain constrained by the prevailing structure.
Meanwhile, immediate resistance is located at the 38.2% Fibo. at $4,112.32, followed by the 100-period SMA at $4,145.47 and the 50% retracement at $4,164.62. Successive barriers are pegged at the 61.8% level at $4,216.91, the 78.6% retracement at $4,291.37, and the cycle high at $4,386.20.
On the downside, initial support is seen at the reclaimed 23.6% retracement at $4,047.62, while a deeper slide would expose the structural floor around the swing low at $3,943.03.
(The technical analysis of this story was written with the help of an AI tool.)
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.
- Silver rises as Fed Chair Kevin Warsh's surprisingly less hawkish comments reduce the urgency for immediate interest rate hikes.
- Plunging oil prices and easing supply anxieties via the Strait of Hormuz further boosted Silver.
- Soft US economic data further cooled hawkish Fed sentiment, reducing expectations for aggressive future interest rate hikes.
XAG/USD gains ground for the third consecutive day, trading around $60.20 per troy ounce during the Asian hours on Thursday. Silver prices find support following a less hawkish tone than expected from Federal Reserve (Fed) Chairman Kevin Warsh at Wednesday's ECB Forum on Central Banking.
Fed Chair Warsh noted that while inflation remains too elevated, reiterating the Fed's firm commitment to its 2% target and institutional independence, eased inflation expectations over the past month suggest there is no immediate urgency to raise interest rates. Notably, he refrained from giving explicit guidance for the upcoming July policy decision, leaving markets to weigh the central bank's next move.
Meanwhile, a sharp downturn in the global energy market further boosted the precious metal. Crude oil benchmarks slid significantly as supply anxieties and inflation fears eased, driven primarily by a rapid recovery in maritime traffic through the Strait of Hormuz. This positive momentum was amplified by notable breakthroughs in indirect diplomatic talks between Washington and Tehran, lowering geopolitical risk premiums across commodities.
A batch of soft US economic data further cooled the hawkish sentiment surrounding the Fed outlook. June’s ADP Employment Change report showed that private payrolls grew by just 98K, missing Wall Street's 113K forecast and slowing from May's 122K increase. Additionally, the manufacturing sector showed signs of cooling as the ISM Manufacturing PMI edged lower to 53.3, missing the 54.0 consensus estimate. Together, this cooling data and diplomatic progress have investors shifting their full attention to the upcoming Nonfarm Payrolls report for fresh insights into the labor market and the Fed’s policy path.
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.
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