Forex News
- GBP/USD trades just beneath 1.3600, roughly 55 pips under the session high.
- Daily Stoch RSI near 93, with the six-month high roughly 80 pips overhead.
- No UK data left this week, with the Fed keynote Friday at 14:00 GMT.
Sterling holds just beneath 1.3600 late on Wednesday, roughly 0.4% lower and some 55 pips under a session ceiling at 1.3650. The pair drifted through the European morning and then gave up close to 50 pips in the two hours after the 12:30 GMT American data block. The tape has ranged flat at the lows ever since, which is the more useful fact to carry into Thursday.
A rally with no British author
The August advance is the cleanest leg of the year for the Pound, running from roughly 1.3300 in the first week of the month to a peak short of 1.3700, and price still sits well clear of a 50-day Exponential Moving Average (EMA) just above 1.3450 and a 200-day EMA just above 1.3400. Both averages are rising, the structure is unambiguously bullish, and a daily Stochastic Relative Strength Index (Stoch RSI) near 93 says the move has been paid for in full. What is far less clear is who paid.
Britain's own contribution amounts to a July inflation rate of 2.9% and a July 30 decision that held Bank Rate at 3.75% on a 6-3 vote, with three members preferring 4.00%. Neither is trivial and neither is new. The dates that actually match the move run through Washington, where the Treasury's decision to at least double its purchases of longer-dated government debt knocked the Dollar across the board and paid every major currency in the same week.
That distinction sets out what has to hold for the trade to keep working. A currency bid on its own rate story absorbs a Dollar bounce and comes back, while a currency bid on Dollar weakness hands the move straight back the first time the Dollar is given a reason. Wednesday was the first sample.
The part of Wednesday's release nobody traded
The headline was the July Personal Consumption Expenditures (PCE) price index at 0.2% MoM against a 0.1% consensus, with the core measure in line at 0.2% and the annual rates at 3.7% and 3.3%. Markets treated the monthly figures as the signal and the annual ones as noise, easing September hike odds into the high 30s while leaving a year-end increase priced near 73%.
It is much harder to defend against the quarterly revisions buried in the same release. Second-quarter core PCE prices were marked up to 3.7% QoQ from 3.4%, headline PCE prices to 5.3% from 5.1%, and the Gross Domestic Product (GDP) price index to 6.4% from 6.3%, while real growth held at 1.5% annualised and exactly in line. Durable goods orders ran 1.1% against a 0.7% consensus and personal income 0.4% against 0.3%. The quarter got more inflationary and no more productive, which is the reverse of what the front end took away from it.
Nothing British is on the docket
The next scheduled British event of weight is the September 17 rate decision, three weeks out with no Monetary Policy Report attached. Pricing points to a rise rather than a cut, with curves carrying something close to 4.00% by November, and the dissent bloc has grown from two members to three across two meetings. None of that can be repriced before the weekend, because there is no British data left to reprice it with.
The fiscal leg is louder and equally frozen. Thirty-year gilt yields sit near 5.80% and the ten-year above 5.00%, a move since February that has taken an estimated £10 billion to £12 billion out of the headroom Healey carries into the October 28 Budget, now put at between £10 billion and £15 billion. Sterling holds a rate market pricing tightening and a bond market pricing fiscal risk at once, and neither gets a hearing this week.
The only vote that counts lands on Friday
Thursday carries almost nothing tradeable beyond initial jobless claims at 12:30 GMT against a 208K consensus from 206K prior, with the Kansas City Fed symposium opening for a three-day run that generates headlines rather than data. The Chicago Purchasing Managers Index (PMI) follows at 13:45 GMT Friday with a 57 consensus from 57.6.
Friday at 14:00 GMT is where the week is decided, and it arrives compressed into one minute. The Fed Chair delivers his first Jackson Hole keynote, final August Michigan sentiment prints against a 51 consensus and prior with one-year inflation expectations at a 4.3% prior and the five-year 3.3%, and the preliminary benchmark revision to nonfarm payrolls lands alongside both.
The keynote outweighs the arithmetic around it because this chair has stripped guidance out of the statement and relocated it to the podium. His stated rule leans toward tightening when underlying inflation moves higher with labour markets near equilibrium, and labour markets are not near equilibrium after a 23K payrolls contraction in July. Which half of that rule binds is what the speech has to answer, and the Pound has nothing British of its own to set against the answer.
Levels to watch
Resistance: The 1.3650 area caps everything, having turned the tape back on each attempt this week. A daily close above it reopens the August peak short of 1.3700, the last marker on the chart before the pair is trading above anything printed since February.
Support: The 1.3550 area is the first real shelf beneath a session floor that held just short of 1.3600. Below it, 1.3500 is the round number the August breakout ran through on its way up, and the 50-day EMA just above 1.3450 is the level at which the trend itself comes into question.
Bias: Bearish into Friday, on a rally that was authored in Washington rather than London, a Stoch RSI near 93 and a domestic calendar with nothing left on it. Objectives are 1.3550 and then 1.3500, with invalidation on a daily close back above 1.3650.
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- Gold price tumbles to around $4,610 in Thursday’s early Asian session.
- US core PCE inflation held steady at 3.3% YoY in July, as expected.
- Traders will closely monitor the Jackson Hole event later on Friday.
Gold price (XAU/USD) falls to near $4,610 during the early Asian session on Thursday. The precious metal retreats from a three-month high as US inflation data came largely in line with expectations, increasing expectations of a Federal Reserve (Fed) interest-rate hike next month.
Data released by the US Bureau of Economic Analysis (BEA) on Wednesday showed that the Personal Consumption Expenditures (PCE) Price Index inflation remained unchanged at 3.7% YoY in July. This figure came in hotter than the market expectation of 3.6%.
Meanwhile, the core PCE Price Index, which excludes volatile food and energy prices, held steady at 3.3%, in line with the market consensus. On a monthly basis, the PCE Price Index and the core PCE Price Index both rose by 0.2% in July.
“Gold’s price action up to today’s data was just some profit taking ... PCE data came in largely in line with expectations, so we’re consolidating within yesterday’s range at this point,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Markets are now pricing in nearly a 38% chance of a 25 basis points (bps) Federal Reserve (Fed) rate hike in September, compared with 36% before the data, according to the CME FedWatch tool.
Traders brace for the upcoming speech by US Federal Reserve (Fed) Chair Kevin Warsh at the Jackson Hole Symposium on Friday for more clues on the outlook for interest rates. Any hawkish remarks from Fed officials could weigh on the yellow metal in the near term.
US long bond squeeze fails to trigger capitulation in gold
Analysts at Rabobank highlight that, “as Bloomberg puts it today, ‘Short Squeeze in US Long Bonds Shows ‘Bessent Put’ at Work.’” They add that, despite the pronounced rally in US long-dated Treasuries, “Gold is not showing signs of capitulation, however,” underscoring the resilience of the precious metal even as bond markets respond to shifting sentiment.
Technical Analysis: Gold
In the daily chart, XAU/USD holds a bullish near-term bias as price remains above the 100-day simple moving average (SMA) and the 20-day Bollinger middle band, keeping the broader uptrend supported. The latest Bollinger configuration shows price pressing the upper half of the envelope, while the Relative Strength Index (14) at 67.64 hovers just shy of overbought territory, suggesting strong but increasingly stretched upside momentum.
On the topside, immediate resistance is aligned with the 20-day Bollinger upper band at $4,745, where corrective selling could emerge if bulls hesitate to extend the rally. On the downside, initial support is seen near the rising 100-day SMA at $4,380, followed closely by the Bollinger middle band at $4,365, which together form a dense demand zone guarding the recent advance; a deeper pullback would expose the lower Bollinger band at $3,985.14 as a more distant but notable structural floor.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- AUD/USD extends gains despite sticky US PCE lifting Dollar.
- Australia trimmed-mean inflation boosts September RBA hike expectations.
- Warsh speech and jobless claims may reset Fed bets.
The Aussie Dollar advances for the third straight day, up more than 0.17%, even though the latest US inflation report renewed investors' hawkish bets that the US central bank might increase rates by the end of 2026. The AUD/USD trades at 0.7176, up from 0.7159.
AUD/USD rises as RBA hike bets offset renewed Fed hawkishness
Data in the US was the main driver of the markets. The Core PCE, the Federal Reserve’s preferred inflation gauge, rose by 3.3% YoY in July, as expected and unchanged from the prior month’s print. The headline number was also unchanged from June’s at 3.7% YoY, but above forecasts for a dip to 3.6%.
After the data, investors priced in an above-70 % chance of a rate increase by the Fed at the December 2026 meeting. Also, the US Dollar Index (DXY), which measures the performance of the American currency against the other six, is up 0.23% at 99.13.
US Treasury yields also aimed higher with the 10-year benchmark note finishing Wednesday’s session at 4.649% up over two and a half bps.
At the same time, US GDP for the second quarter of 2026 expanded by 1.5% YoY, as expected. Durable Goods Orders in July showed a solid increase in goods that last three years or more, boosted by transportation.
Following Wednesday's US tranche of economic data releases, investors shift to Fed Chair Kevin Warsh's speech at Jackson Hole on Friday, preceded by another reading of jobless claims on Thursday.
Elsewhere, Australia’s trimmed mean inflation was above estimates in July at 0.5% MoM, increasing the likelihood of another hike by the Reserve Bank of Australia (RBA). Let’s not forget that the minutes showed the board discussed a rate hike.
The swaps market had priced in a 43% chance of an RBA rate hike at the September 29 meeting. Worth noting that for December, traders had priced in 25 basis points of tightening.
Ahead, the Aussie’s economic docket will feature Private Capital Expenditure for Q2, and the RBA’s bulletin for the second quarter.
AUD/USD Price Forecast: Technical outlook
On the daily chart, AUD/USD trades at 0.7183, extending its advance well above the cluster of the 50-, 100-, and 200-day Simple Moving Averages (SMAs) around 0.7006, reinforcing a bullish near-term bias. Price tests an upward support trend line that has recently guided the rally, while the Relative Strength Index (RSI) near 68 suggests strong but increasingly stretched momentum as the pair approaches overbought territory, leaving scope for consolidation or a corrective pause before fresh highs.
On the downside, immediate support is seen at the trend-line-backed area around 0.7183, with deeper demand layered at 0.7087 and 0.7086 from prior ascending support lines, ahead of the broader SMA base near 0.7006. On the topside, the next notable resistance comes from the broader downward trend structure, with the legacy resistance line originating at 0.8015 acting as a medium-term barrier should the bulls extend the move further.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.38% | 0.00% | 0.24% | -0.27% | 0.42% | 0.43% | |
| EUR | -0.16% | 0.22% | -0.17% | 0.08% | -0.42% | 0.27% | 0.27% | |
| GBP | -0.38% | -0.22% | -0.37% | -0.13% | -0.62% | 0.07% | 0.04% | |
| JPY | 0.00% | 0.17% | 0.37% | 0.22% | -0.27% | 0.44% | 0.42% | |
| CAD | -0.24% | -0.08% | 0.13% | -0.22% | -0.50% | 0.22% | 0.19% | |
| AUD | 0.27% | 0.42% | 0.62% | 0.27% | 0.50% | 0.73% | 0.69% | |
| NZD | -0.42% | -0.27% | -0.07% | -0.44% | -0.22% | -0.73% | -0.03% | |
| CHF | -0.43% | -0.27% | -0.04% | -0.42% | -0.19% | -0.69% | 0.03% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
- GBP/JPY fades 217.00 breakout, forming potential evening star.
- Break below 216.00 exposes 50-day and 100-day SMAs.
- Bulls must reclaim 217.00 to refocus 218.00 and 218.69.
The GBP/JPY failed to sustain the 217.00 breakout, reversing to the 216.50 area as traders faded the move, exacerbating the decline to current exchange rates. At the time of writing, the cross-pair exchanges hands with losses of 0.36%.
GBP/JPY Price Forecast: Technical Outlook
Price action shows GBP/JPY making a U-turn, opening the door to further downside. A three-candle chart pattern suggests the formation of a bearish chart pattern, the ‘evening star.’ This usually forms during a false breakout, meaning that in the short-term, the path of least resistance is down.
The first support is the psychological 216.50 and 216.00 levels. A breach of the latter will expose the 50-day Simple Moving Average (SMA) at 215.78, followed by the 100-day SMA at 215.02.
On the other hand, if GBP/JPY reclaims 217.00, the next stop would be 218.00. Once cleared, next lie the July 30 highs at 218.69 and 219.00.
GBP/JPY Price Chart – Daily
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.
- NZD/USD is trading around 0.5942, little changed, as it consolidates a strong recovery from its recent lows.
- An improved risk mood, helped by reports of a US-Iran ceasefire, has supported the risk-sensitive Kiwi.
- US Initial Jobless Claims and New Zealand's ANZ–Roy Morgan Consumer Confidence are the day's data points.
NZD/USD is trading around 0.5940 on Tuesday, little changed on the day as the risk-sensitive Kiwi consolidates a strong recovery. The pair has clawed back from its recent lows, but a firm US Dollar (USD) ahead of the Jackson Hole Symposium is keeping a lid on further gains for now.
The New Zealand Dollar (NZD) has drawn support from a steadier risk backdrop. Reports of a US-Iran ceasefire that would reopen the Strait of Hormuz have lifted broader sentiment, a tailwind for growth- and risk-sensitive currencies like the Kiwi, even as safe havens such as Gold have sold off. Confirmation of the deal is still awaited, however, keeping the mood in check.
The Greenback has nudged higher ahead of the Jackson Hole gathering, and US Initial Jobless Claims seen ticking up to around 208K offer the next read on the labor market. A firm claims number, or a hawkish steer from Jackson Hole, could revive Dollar demand and pressure NZD/USD.
Domestically, New Zealand's ANZ–Roy Morgan Consumer Confidence survey for August is due later, with the previous reading at 99.3. A pickup in sentiment would reinforce the Kiwi's recent resilience.
Short-term technical analysis:
In the four-hour chart, NZD/USD trades at 0.5943, holding between the rising 100-period simple moving average (SMA) at 0.5905, which underpins the downside, and the 20-period SMA at 0.5962, which caps the topside and keeps the near-term tone mildly bearish. The Relative Strength Index (RSI) has eased to around 46, hinting at fading bullish momentum and reinforcing consolidation rather than a directional breakout as price oscillates between these key averages.
On the downside, initial support emerges at the horizontal level of 0.5932, ahead of the 100-period SMA at 0.5905, where a deeper slide would expose a more significant bearish extension. On the topside, immediate resistance is seen at 0.5946, followed by 0.5953 and then 0.5961, before the 20-period SMA at 0.5962 comes into play as a more decisive barrier; only a sustained move above this clustered zone would ease the current bearish bias.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
- USD/MXN rises as sticky PCE boosts Fed hike expectations.
- Banxico lifts growth forecast but delays inflation convergence timeline.
- USMCA uncertainty and Warsh speech shape next Peso catalysts.
The Mexican Peso loses some traction against the US Dollar on Wednesday as traders seem confident that the Federal Reserve could raise interest rates toward the end of the year, following a red-hot inflation report. The USD/MXN trades at 16.95, after reaching a daily low of 16.92.
USD/MXN drifts high as US inflation offsets Banxico’s stronger growth outlook
The Greenback recovered as the Core PCE in July came aligned with estimates and matched June’s reading of 3.3% YoY. Following suit, the PCE headline reading for the same period held steady at 3.7% YoY for the second straight month, exceeding forecasts of 3.6%.
Both readings revealed that the disinflation process stalled and increased the chances of seeing higher interest rates in the US. Money markets had priced in a 74% chance of a 25-basis-point (bps) interest rate increase at the July meeting, according to Prime Terminal.
US Durable Goods Orders —which comprise goods meant to last three years or more—rose by 1.1% in July, exceeding forecasts and June’s 0.5% reading, boosted by transportation equipment.
Across the southern border, the Bank of Mexico (Banxico) released its Quarterly Report for Q2 2026, in which the institution updated its forecasts for several economic indicators.
Regarding economic growth, Banxico expects GDP to rise from 1.1% to 1.5%. Meanwhile, headline inflation is projected to converge to the 3% goal by Q4 2027, a slower pace than in the previous report, the central bank revealed.
Regarding core inflation, is forecast at 3.5%, up from 3.4% and is also expected to reach Banxico’s 3% goal towards the end of 2027. In the meantime, the central bank noted that economic activity continues to slow down due to uncertainty surrounding the review of the USMCA.
Ahead, the US economic docket will feature Initial Jobless Claims on Thursday, followed by the Chair Kevin Warsh's speech at the Jackson Hole Symposium.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 16.9563, extending the pullback and holding below the cluster of simple moving averages (SMA) grouped around 17.3219, which keeps the near-term bias bearish. Price remains well under a medium-term descending resistance trend line drawn from 18.1651, while the Relative Strength Index (RSI) at 31.65 hovers just above oversold territory, hinting at weakening downside momentum but not yet signaling a reversal.
On the topside, initial resistance is located at the triple SMA area near 17.3219, where a daily close above would be needed to ease immediate selling pressure. Further up, the descending trend structures strengthen the cap, with the medium-term line around 18.1651 followed by a longer-term downtrend reference near 21.0808, leaving the pair exposed to fresh lows as long as it trades beneath these levels and lacks clearly defined support nearby.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- USD/JPY holds modest gains, supported by a broadly stronger US Dollar ahead of the Jackson Hole Symposium.
- Tokyo Consumer Price Index data is due on Thursday, with both the headline and ex-food-and-energy measures expected to hold near 2%.
- Easing Gulf tensions have trimmed safe-haven demand for the Yen.
USD/JPY trades around 159.40 on Wednesday, holding onto modest gains as a firmer US Dollar (USD) keeps the pair underpinned. The Dollar is broadly bid ahead of the Jackson Hole Symposium.
Reports of a United States (US)-Iran ceasefire that would reopen the Strait of Hormuz have trimmed demand for traditional safe havens, weighing on Gold and sapping some of the Japanese Yen's (JPY) appeal even as broader sentiment stays cautious pending confirmation of the deal.
The Yen's immediate focus is Tokyo's August inflation report, due on Thursday. Both the headline Tokyo Consumer Price Index (CPI) and the measure excluding food and energy are expected to hold around 2% year on year.
Short-term technical analysis:
In the 4-hour chart, USD/JPY trades at 159.33, holding a constructive bullish tone as it stands above both the 20-period Simple Moving Average (SMA) at 159.16 and the 100-period SMA at 158.86. The cluster of nearby supports around 159.16–159.26 cushions the pair after this week’s advance, while the Relative Strength Index (RSI) near 56 reinforces steady upward momentum without yet signaling overbought conditions.
On the topside, immediate resistance appears at 159.37, followed by the recent horizontal cap at 159.43, where buyers may pause or trim exposure. On the downside, initial support is seen at the horizontal level of 159.26, ahead of the 159.16 floor that aligns with the 20-period SMA, while deeper demand is suggested by the 100-period SMA at 158.86 should corrective pullbacks extend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Chris Turner at ING notes USD/CNH is consolidating after last week’s sharp decline, as investors hesitate to buy Renminbi with the PBoC slowing lower USD/CNY fixings and US–Iran sanctions risks in focus. ING’s base case remains for a gently offered Dollar and USD/CNY edging lower towards 6.70 over coming months.
Consolidation with gradual CNY gains
"After a sharp run lower last week, USD/CNH is consolidating this week. Two factors may be discouraging investors from buying the renminbi at these levels. The first is that the People's Bank of China (PBoC) seems to be slowing the pace of lower fixings in USD/CNY, perhaps expressing some displeasure over the pace of renminbi gains recently."
"The second is some fears that the new round of US sanctions on Iran will upend the economic détente between the US and China. We think it is probably too early to expect any US sanctioning of any major, state-sponsored Chinese entity relating to Iran trade, but the market will be watching."
"Currently, our base case assumes a gently offered dollar environment and USD/CNY edging lower towards 6.70 over the coming months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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