Forex News

• USD/JPY advances 0.73% on Monday and trades near 158.95.
• Japan’s current account unexpectedly posts a ¥92.3B deficit in June.
• Expectations of further monetary tightening in Japan provide some support to the Japanese currency.

USD/JPY advances 0.73% on Monday and trades around 158.95 at the time of writing. The Japanese Yen (JPY) underperforms against the US Dollar (USD), pressured by Japan’s unexpected current account deficit, although expectations of further interest rate hikes from the Bank of Japan (BoJ) could limit the currency’s weakness.

Data released on Monday by Japan’s Ministry of Finance (MoF) showed that the Current Account posted a deficit of ¥92.3B in June, while markets had expected a surplus of ¥1,512B.

The Ministry attributed the deterioration partly to higher Oil prices and significant dividend payments to foreign investors. The June shortfall, the first deficit recorded in 17 months, is therefore adding to selling pressure on the Japanese Yen at the start of the week.

Japan’s fiscal situation is also acting as a headwind for the currency. Public debt exceeds 200% of Gross Domestic Product (GDP), while Prime Minister Sanae Takaichi’s expansionary policies and proposed tax cuts are fueling concerns over long-term debt sustainability.

These concerns are helping to limit the lasting impact of interventions aimed at supporting the Japanese Yen. Japan intervened on three occasions between late April and early May before returning to the market with two additional operations in late July, including a coordinated intervention with the United States (US).

Japanese monetary policy, however, provides some counterweight to these pressures. The Summary of Opinions from the Bank of Japan’s (BoJ) July meeting showed that most policymakers retain a tightening bias. One member even argued that policy normalization may need to proceed faster than markets currently expect amid upside risks to prices.

On the US side, investors have nevertheless scaled back expectations of restrictive monetary policy from the Federal Reserve (Fed) following Friday’s weak employment data. This shift could limit the USD/JPY advance despite the Japanese Yen’s current weakness.

Attention now turns to the US Consumer Price Index (CPI) data for July, due on Wednesday. The inflation figures should provide fresh clues about the Fed’s interest rate path and could determine whether USD/JPY can extend its rebound above 159.00.

Japan rate debate shifts as BoJ weighs inflation overshoot risks

Analysts at BNY note that “long-end JGB pressure is building,” with “inflation risks and fiscal concerns” pushing long-dated yields “toward the upper end of recent ranges.” They add that markets are now “pricing in roughly a 50% chance of a 25bp BoJ hike in September and a full hike by year-end,” underscoring a gradual but clear repricing of the policy path.

According to BNY, the latest BoJ discussions show that “several members argued that the bank should keep the policy rate unchanged at this meeting to assess the lagged impact of the previous hike, but the overall tone favors further tightening.” In their view, “the debate has shifted away from lifting inflation to 2% and onto preventing an overshoot,” with some members warning that “waiting too long could force faster, larger rate hikes later, risking a ‘double shock.’”

• USD/CAD trades just above 1.3900, the lowest in two months.
• Crude Oil roughly 3% higher near $81, with Brent above $86.
• July's policy report assumed 71 cents, spot trades near 72.

The Canadian Dollar trades at its strongest against the US Dollar since the second week of June, with the rate holding just above 1.3900 into the afternoon. This is a fourth consecutive lower session and the seventh in ten, and Monday's entire 35-pip range sits inside Friday's, pinned to its floor. Two months of Dollar gains have gone in ten trading days.

Two months, and the war took them back

The last time this rate traded here was 43 sessions ago, in the week the Strait of Hormuz shut. The whole advance the US Dollar built against the Loonie across the war has now been surrendered, and it has been surrendered while the war escalates rather than resolves, which is the opposite of the condition that was supposed to hand it back.

What changed is the mechanism rather than the news. In June a shut Strait bought the US Dollar as a haven, with a central bank on the other side of the trade whose inflation problem the shock made worse. In August the same headline buys the Loonie instead, because a barrel 3% higher is a terms-of-trade payment to a net exporter, and the first phase of any escalation in this rate has always been a Canadian bid with 1.4000 pressed.

The 71-cent assumption breaks the other way

July's Monetary Policy Report conditioned its inflation path on the Loonie averaging around 71 cents US over the projection horizon, which is a rate near 1.4085. Spot is 71.8 cents, close to a full cent stronger than the assumption and the widest that gap has run since the forecast was finalised on July 10.

The report's own arithmetic then runs both ways through a single price. Its sensitivity endnote has Brent holding between $80 and $85 in the coming months adding a tenth to three tenths of a point to inflation, and Brent trades above $86. The same barrel that lifts the inflation path bids the currency that lowers it, which leaves a central bank with a December 9 increase already fully priced and nothing domestic on the calendar to argue with.

Canada is not in the room

Nothing on the Canadian docket this week will confirm or deny any of it. The move was built entirely on the other side of the border, first by Friday's payrolls contraction and then by Monday's Crude Oil bid, against a domestic economy in technical recession, with unemployment at 6.5% and a 50% tariff on most of its goods entering the United States since July 20.

The rate channel argues the other way, which is what makes the session worth reading. Futures repriced a September increase from the Federal Reserve to 49.9% from 44.1% on Friday, and the US Dollar lost ground regardless. A currency that ignores a hawkish repricing on the other side of the trade is not being bought on the rate gap, and the barrel is the only other thing that moved.

The barrel that pays Canada is not the one quoted on the screen. Alberta's heavy grade traded at a discount of close to $19 beneath the American benchmark in May, the widest of the war, and the June and July averages on that table are still pending. Until they print, a 3% move in the headline barrel is an estimate of the transfer rather than a measurement of it.

The data week

July's Consumer Price Index (CPI) lands on Wednesday at 12:30 GMT, forecast at 0.1% MoM against a 0.4% decline in June, with the annual rate easing to 3.4% from 3.5% and core at 0.2% MoM and 2.5% YoY. That is the only release this week either side of this rate genuinely trades.

Thursday carries the Producer Price Index (PPI) at 0.2% MoM against a 0.3% decline, core at 4.2% YoY from 4.7%, and jobless claims at 201K, with two regional Federal Reserve presidents speaking either side of the release. Friday brings retail sales at 0.2% and a Michigan sentiment reading seen falling to 54 from 55.2. The Canadian side offers nothing at all, which leaves the September 2 decision as the next domestic event carrying a rate.

Levels and bias

Resistance: Just above 1.3950 capped Monday and is the first line. The 1.4000 handle and the 50-day Exponential Moving Average (EMA) sitting a fraction above it now form one band, and reclaiming it is the minimum requirement for anything bullish, with the late-July peak just above 1.4100 beyond that.

Support: The 200-day EMA near 1.3900 is the first structure beneath the market and has not been tested since May. Below it the tape thins toward 1.3850, and there is no meaningful mark on this window until the May base near 1.3550.

Bias: Bearish while the 1.4000 band caps, with the 200-day EMA near 1.3900 as the first objective and 1.3850 behind it. A daily Stochastic Relative Strength Index (Stoch RSI) near 30 is not yet oversold, leaving room for a fourth consecutive lower session to become a sixth. A daily close back above 1.4050 invalidates and reopens the late-July peak.

USD/CAD daily chart

• DJIA holds near 54,000 inside a range of barely 200 points.
• Labour's share of output fell to 52.9%, the lowest since 1947.
• Crude Oil trades roughly 3% higher near $81 on Hormuz doubts.

The Dow Jones Industrial Average trades near 54,000 on Monday, lower by a tenth of a percent inside a range of barely 200 points, the narrowest daily bar in weeks. Every price of the session sits inside Friday's range, and Friday's sat inside Thursday's. The index is neither extending last week's record nor handing it back. It is waiting for Wednesday.

The largest single-name move of the session belongs to a company outside the average, which is the shape most sessions have taken lately. Intel (INTC) fell 3% after saying it would sell 15 billion Dollars of common stock, and none of that reaches the index. The insulation ran the other way on Tuesday, when the day's biggest gainer contributed nothing either.

Labour's smallest share since 1947

Thursday's second-quarter productivity report carried the number of the week and almost nobody printed it. The labour share, meaning the portion of output reaching workers as compensation, fell to 52.9%, the lowest reading in a series that starts in 1947. Unit non-labour payments, the other half of the same ledger, rose 14% at an annual rate.

An index printing records while payrolls contract is not a contradiction in need of explaining away. Equity is a claim on precisely the share of output that expanded, and the workforce holds the share that shrank. Friday's payroll contraction and last week's high are one piece of arithmetic read from opposite ends, which is how the tape absorbed both inside four sessions without breaking stride.

Wages are not the inflation

The complaint in circulation, that disappointing productivity explains why workers keep losing ground, does not survive the release it is drawn from. Output per hour rose 1.4% in the quarter and 2.2% from a year earlier, and the current cycle has compounded at 2.1% a year, matching the long-run rate that has held since 1947. Hourly compensation rose 2.7% and fell 3.1% once consumer prices come out of it.

Unit labour costs rose 1.3% on the same page, which is the awkward line for a committee holding rates against an inflation it cannot trace to pay. The value-added price deflator on that release ran near 7% at an annual rate against those labour costs, leaving energy, tariffs and margin to account for the gap. Wednesday's print will be argued as a labour-market story and it is not one.

Only Crude Oil sold the peace back

West Texas Intermediate Crude Oil trades roughly 3% higher near $81 and Brent above the $86 handle, against a Dow moving a tenth of a percent. Iran's foreign minister ruled out restarting talks until Washington answers for what Tehran calls breaches of June's framework, and the president spent the weekend telling an interviewer that the United States is only half negotiating and wants Iran under economic pressure.

The pressure is administrative rather than rhetorical, and it ran through the financial system again on Friday, when Washington's sanctions office issued two fresh Iranian designations, the eighth action this year aimed at the shadow banking apparatus. The body Tehran created to charge tolls for safe passage through the Strait was itself designated in May, so an Oman-brokered reopening that leaves Iran directing traffic runs through a sanctioned counterparty. That is the half of the trade equities bought at 54,740 last week and have not sold back.

The rates market took the same headlines more seriously than the equity market did. A quarter-point increase on 16 September now prices at 49.9% against 50.1% for a hold, up from 44.1% on Friday, and 28 October has firmed to 76.5%. December still gives the current range no chance at all, and the second increase that Friday's payroll contraction was supposed to have buried is back at 24.1%, from 14.4% in a single session.

The data week

July's Consumer Price Index (CPI) lands on Wednesday at 12:30 GMT, forecast at 0.1% MoM against a 0.4% decline in June, the annual rate easing to 3.4% from 3.5%, core at 0.2% MoM and 2.5% YoY. That print measures a month already stale against a barrel 3% higher today, which is the standing problem with reading the war out of backward-looking data.

Thursday carries the Producer Price Index (PPI) at 0.2% MoM against a 0.3% decline, core at 4.2% YoY from 4.7%, and jobless claims at 201K. Two regional Federal Reserve presidents speak inside half an hour that morning, one of them among the three who dissented for a quarter-point increase in July. Friday brings retail sales at 0.2% and a Michigan sentiment reading seen falling to 54, its inflation expectations last at 4.2% one year out and 3.3% over five. Those three releases decide which side of that coin September lands on.

Levels and bias

Resistance: Just above 54,000 has stalled each of the last two sessions, with the 54,100 area capping Friday. Above them the record just short of 54,750 is the only structure left on the chart.

Support: The 53,800 area has floored three consecutive sessions and is the line the week turns on. Beneath it the tape thins toward 53,500, with nothing structural until the 50-day Exponential Moving Average (EMA) near 52,100.

Bias: Bullish while the 53,800 area holds, with the record just short of 54,750 as the objective and a daily Stochastic Relative Strength Index (Stoch RSI) near 57 carrying room above it. A daily close beneath 53,800 turns three sessions of contraction into a failed breakout and opens 53,500.

Dow Jones daily chart

• GBP/USD rises as traders await US inflation and UK GDP.
• Hormuz deadlock lifts Oil, reviving central bank tightening risks.
• BoE and Fed bets swing with energy price volatility.

The Pound Sterling advances during the North American session, up 0.2% as markets digest developments in the Middle East and await crucial inflation data in the United States (US). The GBP/USD trades at 1.3520 after bouncing off daily lows of 1.3483.

GBP/USD advances despite a firmer Dollar as Oil jumps

Negotiations between Oman and Iran have continued but have so far failed to provide relief for financial markets as evidenced by rising Oil prices. West Texas Intermediate (WTI) rises over 4.5% to $80.69 per barrel. In the meantime, the US Dollar Index (DXY), which tracks the value of six currencies versus the American dollar, is up 0.1% at 99.73.

Geopolitics and its impact on energy prices continued to drive market mood, with investors attentive to the reopening of the Strait of Hormuz.

Data on both sides of the Atlantic remains scarce, but it will gather pace on Tuesday. The UK economic docket will feature the BRC Like-For-Like Retail Sales for July, which are projected to dip from 1.7% to 1.5% YoY. On Thursday, traders will eye the release of the Gross Domestic Product (GDP) figures on August 13, which are expected to show that the economy held firm.

In the US, the schedule will provide an update to inflation figures on the consumer and producer side, alongside Initial Jobless Claims on August 13, which would be keenly scrutinised by investors, following a dismal Nonfarm Payrolls (NFP) report last week, which revealed that the economy slashed 23K jobs, and featured a downward revision for May and June figures.

The lack of progress in Hormuz suggests that money markets expect 22 basis points of tightening by the Federal Reserve (Fed) toward the end of 2026, up from 17 basis points expected last Friday, according to Prime Terminal data.

Regarding the Bank of England (BoE), fluctuations in energy prices due to the US-Iran conflict keep traders' odds swinging between holding or increasing rates toward the end of the year. So far, traders expect a 25-basis-point rate hike from the BoE by year-end.

GBP/USD price forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3525, holding a constructive bullish bias as it remains above a cluster of reclaimed supports while momentum improves. The latest Simple Moving Average (SMA) from the triple set sits around 1.3367. They are now acting as underlying demand alongside former downward and upward trendline barriers near 1.3514 and 1.3432 that have been turned into support. This suggests dips could be bought, while the pair stays above this broader base. The Relative Strength Index (RSI) around 62 reinforces the bullish tone without yet signaling overbought conditions.

On the downside, initial support is seen at the former downward trendline break near 1.3514, followed by the prior resistance trendline around 1.3432 and the SMA zone close to 1.3367, with an additional structural floor emerging from the lower upward trendline near 1.3332. On the topside, the next notable resistance comes at the higher upward trendline break around 1.3566, and a sustained close above this level would open the door for further gains toward higher levels beyond the recent range.

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

HSBC Asset Management notes that Emerging Market local-currency bonds have delivered strong returns over the past four years, supported by credible policies and attractive real yields, but year-to-date performance has softened as US Treasury yields rose and EM-US real rate differentials narrowed. The team argues the strategic case for EM local debt remains intact, yet expects the next phase to hinge more on country selection than broad beta exposure.

EM bonds face tighter rate gap

"Emerging market (EM) local-currency bonds delivered strong returns over the past four years, helped by improving policy credibility, attractive real yields, and resilient macroeconomic backdrops."

"But year-to-date momentum has weakened. Greater uncertainty over the Federal Reserve’s policy path has contributed to higher long-dated US Treasury yields, while the gap between EM and US real interest rates has narrowed in many markets. This reduces the space for further policy easing, limiting the upside potential for EM bond performance."

"The good news is several Latin American markets, including Brazil and Mexico, entered this cycle with strong inflation-fighting credentials after tightening policy early in 2021-2022, giving their central banks greater flexibility as inflation moderates. By contrast, parts of Asia, notably Thailand and the Philippines, face a more difficult policy trade-off as inflation risks remain elevated."

"The strategic case for EM local debt remains intact, but the next phase of the cycle should reward selectivity, with future performance likely to depend more on country selection than broad exposure."

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

Nordea economist Jan Størup Nielsen notes that Danish inflation eased slightly in July, with headline consumer prices up 1.7% year-over-year and core inflation steady at 2.3%. He highlights that seasonal factors such as higher rents on summer houses and package holidays boosted monthly prices, while lower electricity tariffs and falling food prices, especially pork, helped keep Danish inflation below the Euro area.

Seasonal factors and tax cuts drive CPI

"In July, Danish consumer prices increased by 1.7% year-over-year, down from 1.9% in June."

"Compared to June, the overall Danish consumer price index increased by 1.2%. This was the largest monthly increase in the consumer price index since July last year."

"Due to the government's decision to reduce the tariffs on electricity to the EU's minimum rate from the start of the year, electricity subtracted 0.68 percentage points from the annual inflation rate."

"In July, overall inflation in the eurozone was 2.9%. Thus, inflation in the eurozone is still markedly above that of Denmark."

"There are two reasons why inflation in Denmark is currently markedly lower than in the eurozone. The first and largest reason is the large reduction of the electricity tax in Denmark."

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

• USD/CAD stays under pressure as strong Canadian labour data and higher Oil prices support the Canadian Dollar.
• Technically, USD/CAD extends its bearish structure of lower highs and lower lows below the 50-day SMA.
• RSI approaches oversold territory, while the MACD stays below the signal line.

USD/CAD trades on the back foot on Monday even as the US Dollar (USD) regains some ground after weakening last week following softer-than-expected US Nonfarm Payrolls (NFP) data. Attention now turns to Wednesday’s US Consumer Price Index (CPI) report. At the time of writing, the pair trades around 1.3932, near its lowest level in two months.

The Canadian Dollar (CAD) draws support from stronger-than-expected domestic labour data and rising Oil prices. West Texas Intermediate (WTI) trades around $80.37 per barrel, up 5.20% on the day.

USD/CAD dip below 1.40 puts focus on US CPI and Fed pricing

According to TD Securities, the latest payrolls data “broke USD/CAD below 1.40,” as the sharp reaction to the contrasting US and Canadian labour market outcomes underscored that “the market remains focused on both central-bank divergence and Canada's domestic outlook.” On the Canadian side, the bank notes that “recent developments in the Canadian economy have evolved broadly in line with our forecasts,” and that while the data surprise is “briefly pushing USD/CAD below the 1.40 support level,” they “think the bearish USD momentum may not sustain unless US CPI also surprises lower to allow market to price out near-term Fed rate hiking odds.”

From a technical perspective, USD/CAD has formed a series of lower highs and lower lows since briefly rising above 1.4200 in late June. The pair holds below the 1.4000 psychological mark and the 50-day Simple Moving Average (SMA) at 1.4075, keeping the near-term bias tilted to the downside.

Momentum indicators also favour sellers. The Relative Strength Index (RSI) sits near 33, approaching oversold territory, while the Moving Average Convergence Divergence (MACD) indicator stays in negative territory.

On the downside, the 100-day SMA near 1.3916 offers initial support, followed by the 200-day SMA around 1.3853. A decisive break below the latter could open the door to a deeper decline.

On the topside, the 1.4000 psychological mark acts as immediate resistance, followed by the 50-day SMA at 1.4075. A recovery above this moving average would ease the bearish pressure.

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

Rabobank's Senior FX Strategist Jane Foley notes Eurozone Q2 Gross Domestic Product (GDP) and Purchasing Managers' Index (PMI) data surprised to the upside, suggesting resilience despite higher energy prices and supply disruptions. However, Foley warns that the breakdown of the US–Iran agreement, expectations of further European Central Bank (ECB) tightening, competition from China, and a loosening German labour market pose downside growth risks and could limit Euro (EUR) strength, especially via weaker consumer spending.

Resilient growth faces new headwinds

"Eurozone Q2 GDP growth was stronger than expected at 0.4% q/q, compared with a median expectation of 0.2% q/q."

"Despite higher energy prices and supply disruptions implied by the (near) closure of the Strait of Hormuz, it would appear that the Eurozone economy has weathered the headwinds better than expected."

"The breakdown in this agreement clearly implies downside risks to growth and upside inflation concerns."

"Germany’s adjusted unemployment rate ticked higher in July to 6.4% from 6.3% in June, pushing the overall number of unemployed people over the 3 mln mark on an unadjusted basis."

"The loosening of the labour market has resulted in a considerable slowdown in growth of real compensation of employees which, in RaboResearch’s view, suggests that consumer spending could stagnate for the rest of the year."

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

• Market braces for Tuesday's Reserve Bank of Australia monetary policy decision.
• A hold at 4.35% is all but priced, so Governor Bullock's tone will decide the Aussie's next leg.
• US CPI on Wednesday could revive Federal Reserve hike bets and lift the Greenback.

The Australian Dollar (AUD) trades near the 0.7060 level against the US Dollar (USD) on Monday, giving back a little ground after six straight weeks of gains.

The Reserve Bank of Australia (RBA) is widely expected to keep the cash rate at 4.35%. A run of increases earlier in 2026 lifted the rate from 3.60%, and the Board has said it will hike again if needed. What the market wants to know is whether that door is still open or whether the peak is now in. This is a meeting in which the decision lands with a fresh set of forecasts in the Statement on Monetary Policy. Governor Michelle Bullock will speak shortly after the release as usual.

The United States (US) July Nonfarm Payrolls released on Friday shocked with a fall of 23,000 jobs against forecasts for an 80,000 gain, and the Unemployment Rate ticked down to 4.1% only because the labor force shrank. The weak print cut the odds of a September Federal Reserve (Fed) hike and pressured the Dollar, which helped the Aussie hold up through the recent run higher.

US Consumer Price Index (CPI) on Wednesday is the test of that. A hot July reading would put a September hike back on the table and hand the USD a reason to firm, squeezing AUD/USD. A soft one keeps the Fed on hold and leaves the Aussie with room to hold its recent range. Between Bullock on Tuesday and the US inflation print the next day, the pair has two clear catalysts within 48 hours.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7063, maintaining a modest bullish tone as it holds above both the 20-period Simple Moving Average (SMA) at 0.7050 and the 100-period SMA at 0.7007. The pair is hovering just under nearby resistance, while the Relative Strength Index (RSI) around 59 suggests firm but not overextended upside momentum.

On the topside, immediate resistance is seen at 0.7064, with a break higher exposing the next barrier at 0.7070. On the downside, initial support is aligned at 0.7057, followed by 0.7054, while deeper pullbacks would look toward the 20-period and 100-period SMAs as broader trend supports.

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

• Gold consolidates on Monday following last week’s strong breakout.
• Traders turn to US inflation data for fresh direction on the Fed’s interest rate path.
• The near-term technical outlook stays bullish, with the 100-day SMA near $4,389 capping immediate gains.

Gold (XAU/USD) struggles to extend gains on Monday as buyers take a breather following last week’s sharp rally, with the broader market theme still centred on the Federal Reserve’s (Fed) interest-rate outlook and developments in the Middle East. At the time of writing, XAU/USD trades around $4,345 after reaching an intraday high of $4,362.

The precious metal gained more than 7% last week and climbed to its highest level since June 17 on Friday. The advance was driven by a dovish repricing of Fed rate-hike expectations following weaker-than-expected US Nonfarm Payrolls (NFP) data. Inflation concerns also eased as Iran and Oman reportedly moved closer to finalising an agreement to reopen the Strait of Hormuz, pushing Oil prices lower.

These developments weighed on the US Dollar (USD) and US Treasury yields, although the downside has been limited as Oil prices remain well above pre-war levels, keeping energy-driven inflation concerns alive.

The US Dollar Index (DXY) is attempting to form a base near a two-month low, trading around 99.70, up 0.10% on the day. Meanwhile, the benchmark 10-year US Treasury yield holds near 4.67%, below its recent peak of around 4.74%, the highest level since January 2025.

According to the CME FedWatch Tool, markets price in around a 44% probability of a rate hike at the September meeting, down from 67% a week earlier.

Attention now turns to the US Consumer Price Index (CPI) data on Wednesday and the Producer Price Index (PPI) on Thursday, as traders look for fresh clues about the Fed’s interest-rate path, which could drive the next moves in the US Dollar and Gold.

Strategists at Brown Brothers Harriman argue that the balance of risks around the upcoming US inflation data is skewed against the US Dollar. They note that “a soft US CPI print would strengthen the case for a dovish repricing in Fed hike expectations and further undermine USD,” while “a hot US CPI print may deliver a knee-jerk USD bounce via higher front-end yields.”

However, BBH cautions that with “Fed policy already restrictive (assuming a neutral rate of 3.00%), the scope for a material hawkish repricing looks limited,” which they see as a lingering “USD headwind.”

On the geopolitical front, US President Donald Trump says Washington is “semi-negotiating” with Tehran while “low-keying” its military campaign. Iran, however, denies holding direct talks. Iran's Foreign Ministry spokesperson Esmaeil Baghaei says security in the Strait of Hormuz depends on an end to military action and compensation for previous attacks.

Technical Analysis: Gold maintains a constructive bullish bias amid firm bullish momentum

XAU/USD maintains a constructive bullish bias as it holds above the 50-day Simple Moving Average (SMA) near $4,150 while still trading below the 100-day SMA around $4,389. The price action suggests a developing recovery phase, with the Relative Strength Index (RSI) on the daily chart hovering in the mid-60s to hint at firm but not yet overextended upside momentum, while the Average Directional Index (ADX) in the high-20s suggests a moderately strengthening trend.

On the topside, immediate resistance emerges at the 100-day SMA around $4,389, with a subsequent barrier layered higher at the horizontal resistance zone near $4,500. On the downside, initial demand is seen at the 50-day SMA around $4,150, ahead of a more substantial horizontal support shelf near $4,000, where a break would undermine the current bullish tone and expose a deeper corrective phase.

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