Forex News
- GBP/JPY drops to the mid-207.00s, drawing closer to YTD lows at 207.10.
- The Yen rallies as BoJ tightening hopes offset concerns about higher Oil prices.
- Dovish comments by BoE Bailey capped Pound's recovery attempts on Tuesday.
The British Pound (GBP) extends losses on Wednesday as the Japanese Yen (JPY) rallies across the board, with investors bracing for a quarter-point rate hike by the Bank of Japan (BoJ) at next week’s monetary policy meeting. The GBP/JPY’s rebound from year-to-date lows at 207.10 was capped at the 209.00 area on Tuesday, and the pair retreated again on Wednesday, hitting session lows near 207.50 at the London session opening.
Higher Crude prices, a traditional headwind for Yen rallies, have failed to dent JPY's recovery. Brent oil is ticking down on Wednesday but remains near its highest levels in the last two months at $97.00, as the conflict in the Middle East widens, threatening to escalate into a full regional war.
BoJ shift could force rethink of entrenched carry trade assumptions
Strategists at Rabobank observe September's BoJ policy meeting as pivotal for global funding dynamics. If the BoJ "supports the view that it may be embarking on a more rapid pace of rate rises in the coming months," then "the market will have to re-examine some long-standing assumptions regarding the carry trade," say Rabobank analysts in a note.
In their view, any clear signal of a faster BoJ hiking trajectory would challenge the durability of using the Yen as a low-cost funding currency and could prompt investors to reassess established positioning built up over years of ultra-loose Japanese policy.
In the UK, the Bank of England (BoE) Governor, Andrew Bailey, acknowledged on Tuesday that inflation risks "are on the upside," but he also vowed to dispel the idea that rate hikes are inevitable, and that monetary policy decisions will depend on economic and geopolitical developments. The Pound dropped against most peers following Bailey's comments.
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
Commerzbank’s Antje Praefcke notes that EUR/USD is likely to stay relatively quiet until later in the week, when the European Central Bank (ECB) meeting and US inflation data could trigger stronger moves. She highlights that market expectations for further ECB rate hikes may need to be revised lower, potentially weighing on the Euro, while stronger US inflation could give the Dollar a modest lift.
ECB and US data to drive moves
"Things won’t really get exciting for EUR/USD until the end of the week - specifically, tomorrow with the ECB meeting and on Friday with the US inflation figures for August."
"At the ECB meeting, the key question will be whether the Governing Council signals further rate hikes after tomorrow’s expected rate increase, as the market still sees a chance of another rate hike by year-end and even beyond, whereas our experts are more skeptical and expect the rate-hiking cycle to end."
"If the market has to revise its expectations downward, the euro is likely to weaken."
"The market is hoping that the US inflation data for August will provide clues as to whether the Fed will indeed take action next week and raise the federal funds rate, as it is not yet entirely certain about this. So if the data comes in stronger than expected, adjustments to interest rate expectations could give the dollar a small upward boost."
"As dull as today is likely to be on the foreign exchange market (in contrast to the energy market following the latest escalation in the Middle East) ahead of tomorrow’s ECB meeting and Friday’s US data, EUR/USD could become quite volatile toward the end of the week."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- AUD/USD rises to near 0.7230 as the Australian Dollar trades broadly firm.
- RBA’s Hauser stresses bringing inflation down.
- Investors await the US CPI data for August scheduled for Friday.
The Australian Dollar (AUD) is higher against its major currency peers, except the Japanese Yen (JPY), on Wednesday, trading 0.16% up at around 0.7230 against the US Dollar (USD) during the European session.
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 US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.11% | -0.11% | -0.54% | -0.08% | -0.23% | -0.12% | -0.17% | |
| EUR | 0.11% | 0.01% | -0.46% | 0.02% | -0.12% | -0.00% | -0.05% | |
| GBP | 0.11% | -0.01% | -0.46% | 0.03% | -0.11% | -0.00% | -0.05% | |
| JPY | 0.54% | 0.46% | 0.46% | 0.47% | 0.32% | 0.40% | 0.39% | |
| CAD | 0.08% | -0.02% | -0.03% | -0.47% | -0.15% | -0.04% | -0.08% | |
| AUD | 0.23% | 0.12% | 0.11% | -0.32% | 0.15% | 0.11% | 0.08% | |
| NZD | 0.12% | 0.00% | 0.00% | -0.40% | 0.04% | -0.11% | -0.03% | |
| CHF | 0.17% | 0.05% | 0.05% | -0.39% | 0.08% | -0.08% | 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).
The antipodean gains were on the back of remarks from Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser in an interview by the ABC on Tuesday, where she stressed bringing inflation down.
“People want inflation down. People are furious about inflation. I understand why,” Hauser said and added, “It’s unfair. It hits people on low incomes. It damages price signals. It makes the job of companies difficult. What they want us to do is our job and bring inflation down,” Financial Review reported.
Comments from RBA’s Hauser stressing the need to bring inflation down have increased central bank’s interest rate hike expectations.
Rabobank notes that the RBA has “just saw Hauser give a hawkish speech, which has markets thinking of hikes this month and in November.” The bank adds that this prospective tightening path is “very much what the US Treasury would like to see – plus a lot more action on non-housing parts of the economy,” underscoring how a more restrictive RBA stance is increasingly aligned with US policy preferences.
Meanwhile, the US Dollar is under pressure, with investors awaiting the United States (US) Consumer Price Index (CPI) data on Friday.
AUD/USD Technical Analysis
In the daily chart, AUD/USD trades at 0.7229, extending its advance above the 20-day exponential moving average (EMA) at 0.7158 and keeping a clear short-term bullish bias. The pair holds comfortably above this dynamic support, suggesting dips may be shallow for now, while the Relative Strength Index (RSI) at 69.5 hovers just below overbought territory, hinting that upside momentum is strong but increasingly stretched.
On the downside, the 20-day EMA at 0.7158 is the first notable support, and a daily close below it would hint at a deeper corrective phase. On the upside, the pair is expected to extend its advance to near the four-year high at 0.7277.
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
- GBP/USD gains ground to near 1.3550 in Wednesday’s early Asian session.
- The constructive outlook of the pair remains intact above the 100-day SMA.
- The immediate resistance level emerges at 1.3560; the first downside target to watch is 1.3465.
The GBP/USD pair trades in positive territory around 1.3550 during the early European trading hours on Wednesday. UK Chancellor John Healey unveiled a series of measures designed to encourage economic growth and draw more private investment into the UK. This move provides some support to the British Pound (GBP) against the US Dollar (USD).
UK Chancellor on Monday announced plans to give city regions greater powers to attract private investment as part of Prime Minister Andy Burnham's plan to devolve power away from central government. Healey also stressed his commitment to fiscal discipline and to curbing rising costs for business and the public, including a 25% reduction in regulatory costs by the next election due in 2029.
The Bank of England (BoE) is expected to hold the interest rate at 3.75% for the rest of the year and through at least mid-2027, according to a Reuters poll. BoE Governor Andrew Bailey said on Tuesday he wanted to dispel the idea that it's just a matter of time before the central bank hikes interest rates, rather than a possibility that hinges on economic and geopolitical developments.
GBP upside bias builds but UOB keeps Pound in broad range
Analysts at UOB Group note that GBP/USD was confined to a relatively tight band at the end of last week, with the Pound “traded between 1.3482 and 1.3550 last Friday and closed little changed at 1.3518 (-0.05%).” They recall that “the price action did not lead to any shift in either downward or upward momentum,” and had expected GBP “to trade in a range between 1.3490 and 1.3540.” In the event, the pair “did not quite trade within the expected range, as it edged up from 1.3508 to 1.3547.”
While UOB still sees “no significant increase in upward momentum,” the bank judges that “the bias for GBP today appears tilted to the upside, likely toward 1.3565,” though it “do[es] not expect the major resistance at 1.3600 to come into view.” On the downside, the strategists flag that “a breach of 1.3520 (minor support is at 1.3530) would mean that the upside bias has faded.”
From a broader perspective, UOB reiterates that “there is not much to add” to its recent medium-term assessment, with GBP “neutral now and it is likely to trade between 1.3480 and 1.3600” over the next one to three weeks.
Technical Analysis: GBP/USD retains a bullish tone above the 100-day SMA
In the daily chart, GBP/USD holds a mild bullish bias as price remains above the 100-day Simple Moving Average (SMA) and the lower Bollinger Band, suggesting underlying demand on dips. However, spot is now just under the Bollinger mid-line, which acts as immediate resistance, while the Relative Strength Index (RSI) near 54 points to steady but not overextended bullish momentum.
On the topside, a daily close above the Bollinger middle band at 1.3560 would open the way toward the upper band resistance near 1.3660. Further north, the next hurdle to watch is the 1.3700 psychological level.
On the downside, initial support is seen at the lower Bollinger Band around 1.3465, ahead of stronger structural backing from the 100-day SMA at 1.3445, where buyers would be expected to defend the broader upbeat tone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
- EUR/JPY weakens to around 178.50 in Wednesday’s early European session.
- The cross keeps a bearish vibe below the 100-day SMA, but a temporary recovery cannot be ruled out amid an oversold RSI.
- The first upside barrier emerges at 179.00; the initial support level is seen at 177.17.
The EUR/JPY cross trades in negative territory near 178.50 during the early European trading hours on Wednesday. The Japanese Yen (JPY) edges higher against the Euro (EUR) as a slew of hawkish comments from the Bank of Japan (BoJ) policymakers have cemented views that the BoJ will raise interest rates this month.
BoJ board member Hajime Takata said last week that the central bank could take a more aggressive approach than expected. Takata further stated that a 25-basis-point hike “is not necessarily set in stone,” and that generally speaking, back-to-back rate hikes would be a possibility, too.
The BoJ is set to raise its policy rate to 1.25% from the current 1.0% at its September policy meeting, signaling an acceleration in the pace of rate hikes. This would raise the interest rate to its highest level in about 31 years and follow a rate hike in June.
Yen funding role questioned as rising JGB yields unsettle cross-border flows
Strategists at Rabobank argue that the “clear problem relates to the use of the JPY as a funding currency,” with markets now asking “whether there is room for the recent rapid unwind of JPY shorts to accelerate nearterm.” They add that an “appreciating JPY would bring fresh uncertainly over whether domestic Japanese investors would have less incentive to look for opportunity abroad,” a debate that has been sharpened by the rise in JGB yields, which has “already made this a topical theme.” Rabobank also notes that “the market has suspected that the US Treasury has been worried about large Japanese insurers potentially selling US government debt for JGBs for some time,” underscoring how shifts in Japan’s rate environment could reverberate through global fixed income positioning.
Technical Analysis: EUR/JPY keeps a bearish vibe amid oversold RSI
In the daily chart, EUR/JPY extends its corrective slide and holding decisively below key moving averages, which keeps the near-term bias firmly bearish. Price is lodged beneath the 20-day simple moving average (the middle Bollinger band) and the 100-day simple moving average, underscoring a market that remains capped by medium-term trend resistance. The Relative Strength Index (14) has dropped to around 22, deep in oversold territory, hinting that while downside pressure persists, the selloff could be at risk of fatigue if sellers fail to press decisively lower.
On the topside, initial resistance is seen at the lower Bollinger band near 179.00, with a recovery above this barrier needed to ease immediate selling pressure. Further up, the next hurdle is located at the 180.00 psychological level, en route to the Bollinger mid-line at 183.82 and the 100-day SMA at 184.70.
On the flip side, the November 10, 2025 low of 177.17 acts as an initial suppot level for the cross. Any follow-through selling below this level could pave the way to the November 4, 2025 low of 176.09, followed by the October 21 low, 2025 of 175.35.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- USD/CHF downside could be restrained due to Fed rate hike bets.
- US Dollar may find support as rising oil prices heighten inflation concerns.
- Swiss inflation doubled in August due to higher energy costs, though the spike is expected to be temporary.
USD/CHF loses ground for the third consecutive day, trading around 0.8090 during the Asian hours on Wednesday. The pair remains subdued as the US Dollar (USD) holds losses despite a hawkish tone surrounding the Federal Reserve (Fed) policy outlook.
According to the CME FedWatch Tool, traders are currently pricing in about a 60% chance of an interest rate hike at the US central bank's upcoming policy meeting. Looking ahead, the US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation data will take center stage later this week. These crucial readings may shed fresh light on the Federal Reserve's next steps ahead of the September meeting.
Moreover, rising oil prices intensify inflation concerns and strengthen expectations for a Federal Reserve (Fed) rate hike. Crude oil prices have climbed following a US strike on several Iranian tankers near Kharg Island, a major export hub. These attacks have heightened geopolitical tensions and stoked market concerns regarding potential disruptions to global oil supplies.
Swiss inflation doubled in August as persistent Middle East tensions heightened global energy prices and stoked inflationary concerns. However, this spike is expected to be temporary, as electricity prices are projected to drop by about 4% next year, which will likely weigh on inflation in the months ahead.
USD/CHF seen confined to familiar range as consolidation extends
Strategists at UOB Group maintain a neutral medium-term stance on USD/CHF, reiterating that, over the next one to three weeks, they “continue to hold the same view as yesterday (07 Sep, spot at 0.8100).” For now, UOB expects the Dollar to remain directionless, with the pair “trading in a range between 0.8055 and 0.8155,” underscoring an ongoing consolidation phase rather than a decisive trend move.
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.
- WTI retains a bullish bias as escalating US-Iran tensions keep the geopolitical risk premium in play.
- Supply disruption worries due to clashes in the Strait of Hormuz could further support oil prices.
- Bulls pause for a breather as the market focus remains glued to the release of US inflation figures.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – touches a fresh three-month top, around the $92.50 area during the Asian session on Wednesday, though it lacks follow-through. Nevertheless, the commodity seems poised to climb further amid escalating US-Iran tensions.
In the latest developments surrounding the Middle East crisis, the US attacked Iranian oil tankers in the Gulf of Oman and near Kharg Island. Iran responded by firing over 30 missiles at US forces stationed at the Al Azraq base in Jordan. Moreover, Iran’s Islamic Revolutionary Guard Corps (IRGC) warned that ships in Kuwaiti and Bahraini ports hosting US forces could also be targeted. This keeps the geopolitical risk premium in play, which should continue to act as a tailwind for crude oil prices.
Meanwhile, the continued military confrontations have weighed on shipping traffic through the Strait of Hormuz. Adding to this, Iran’s security chief, Mohsen Rezaei, said that Tehran is preparing to enforce a full blockade around the strategic waterway in response to economic sanctions. Moreover, Iran has threatened to retaliate against any new US attacks on its assets, warning that energy infrastructure across the Gulf was vulnerable, exacerbating fears of a prolonged disruption to oil supplies.
The aforementioned supportive fundamental backdrop validates the near-term positive outlook and suggests that the path of least resistance for the black liquid remains to the upside. Bulls, however, seem hesitant to place fresh bets and opt to wait for the release of US inflation figures for cues about the US Federal Reserve's (Fed) policy path. The outlook, in turn, will play a key role in influencing the US Dollar (USD) and provide some impetus to USD-denominated commodities, including crude oil prices.
WTI daily chart
Technical Analysis
WTI remains well above the 200-day Simple Moving Average (SMA) at $78.52 and is now looking to build on the momentum beyond the 61.8% Fibonacci retracement at $91.88. Momentum indicators stay constructive. In fact, the Relative Strength Index (14) near 66 hints at strong but not yet extreme buying pressure. Furthermore, the Moving Average Convergence Divergence (MACD) indicator is positive and above the zero line, suggesting sustained upside impetus.
Meanwhile, immediate resistance is not seen until the 78.6% Fibo. retracement at $98.69, followed by the cycle high at $107.36. On the downside, initial support aligns with the 50% retracement at $87.10 and the 38.2% level at $82.32. Below these, the 200-day SMA near $78.52 and the 23.6% retracement at $76.40 guard a deeper pullback toward the structural low at $66.84.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Gold prices rose in India on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 13,375.71 Indian Rupees (INR) per gram, up compared with the INR 13,301.55 it cost on Tuesday.
The price for Gold increased to INR 156,011.30 per tola from INR 155,146.70 per tola a day earlier.
Unit measure | Gold Price in INR |
|---|---|
1 Gram | 13,375.71 |
10 Grams | 133,756.80 |
Tola | 156,011.30 |
Troy Ounce | 416,031.50 |
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.
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