Forex News

• A reported US-Iran ceasefire that would reopen the Strait of Hormuz is easing energy-cost fears and lending the Euro a modest bid against the Pound.
• The Eurozone data slate is busy later this week, with German unemployment due.
• Reports say Iran moved its military doctrine onto a more offensive footing.

EUR/GBP is trading around 0.8570 on Wednesday, on the front foot as hopes of a de-escalation in the Gulf hand the Euro (EUR) a modest lift. The pair has broken above its 20- and 100-period moving averages, which sit bunched together near 0.8558 on the 4-hour chart, and is testing the session high in the 0.8574 area.

Russian agency RIA Novosti reported on Tuesday that Washington and Tehran had agreed to a ceasefire that would restore free navigation through the Strait of Hormuz, the route that carried about a fifth of the world's Oil and liquefied natural gas (LNG) before the conflict, with an announcement expected in the coming days. For the energy-importing Euro area, the prospect of calmer shipping lanes and softer fuel costs is a relative positive, and it is helping the single currency edge ahead of the Pound (GBP).

Reports that Iran has moved its military doctrine onto a more offensive footing, and that talks with Oman over managing the strait remain on-and-off, are keeping the move measured. Traders look set to wait for the deal to be confirmed before pricing it in fully.

German unemployment figures are due on Friday, with the jobless rate expected to hold at 6.4% in July, ahead of the Eurozone's August confidence surveys.

With the United Kingdom (UK) calendar quiet, Sterling is left to trade off the broader risk mood, leaving the initiative with the Euro for now. A solid set of Eurozone surveys, or formal confirmation of the Hormuz reopening, could see EUR/GBP extend toward the 0.8575 region.

Short-term technical analysis:

On the 4-hour chart, EUR/GBP trades at 0.8571, retaining a mild bullish bias as it holds above both the 20-period and 100-period Simple Moving Averages (SMAs) clustered around 0.8558. The Relative Strength Index (RSI) near 61 hints at firm but not overextended upside momentum, while immediate topside pressure emerges from the nearby horizontal resistance at 0.8574.

On the downside, initial support appears at the latest close around 0.8571, with a dense demand zone forming between the horizontal levels at 0.8565, 0.8562 and 0.8560, ahead of the SMA base near 0.8558. On the topside, a clear break above 0.8574 would open the way for further gains, keeping the short-term constructive tone intact as long as price stays over the underlying moving average cluster.

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

Prashant Newnaha at TD Securities notes that the RBA’s August minutes were overall less hawkish than June, but still emphasized upside inflation risks and the possibility of preemptive tightening. With July CPI strong and further data due before the September meeting, he underscores that the Board faces a choice between acting early or waiting for more comprehensive Q3 inflation readings.

Board weighs preemptive tightening

"Our interpretation of the RBA's August Statement and Minutes were overall less hawkish than the communication at the Bank's June meeting."

"That said, the hawkish element in the August minutes was the discussion around the Bank possibly acting preemptively and hiking."

""Members noted that if the risks around the inflation forecast were judged to be significantly skewed to the upside, it may be appropriate to mitigate those risks somewhat by tightening monetary policy pre-emptively.""

"Today's CPI outcome certainly adds weight to the discussion around the potential for the RBA delivering a hike by year-end and possibly as early as next month."

"We concede today's CPI release lines up the Sep RBA Board meeting as live, with the Nov meeting as the next likely month the RBA potentially hikes. Our on-hold call is looking less tenable."

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

• NZD/USD falls 0.60% on Wednesday as the US Dollar finds some support following US inflation data.
• Headline Personal Consumption Expenditures inflation stands at 3.7% YoY in July, slightly above the 3.6% expected.
• The New Zealand central bank’s hawkish stance helps limit pressure on the Kiwi ahead of its monetary policy decision.

NZD/USD retreats to around 0.5940 on Wednesday at the time of writing, down 0.60% on the day. The New Zealand Dollar (NZD) loses ground against the US Dollar (USD), which finds some support following the release of the latest United States (US) inflation data.

The Bureau of Economic Analysis (BEA) reports that the Personal Consumption Expenditures (PCE) Price Index rises 3.7% YoY in July, unchanged from June but slightly above the 3.6% expected by markets. On a monthly basis, the index increases by 0.2%.

The core PCE Price Index, which excludes volatile food and energy components and is an inflation gauge closely watched by the Federal Reserve (Fed), remains steady at 3.3% YoY, in line with expectations. The core index also rises by 0.2% MoM.

The slight upside surprise in headline inflation provides some support to the Greenback, as persistent price pressures could encourage the Fed to maintain a restrictive monetary policy stance. However, the reaction remains limited as the core measure delivers no surprise and the report does not appear to significantly alter expectations for the September meeting.

According to the CME FedWatch tool, markets price in around a 36% chance of an interest-rate hike at the Fed’s next meeting, a level broadly similar to the one seen before the PCE data release.

Investors now turn their attention to Fed Chair Kevin Warsh’s speech on Friday at the Jackson Hole Economic Policy Symposium. His comments could provide fresh clues about how the US central bank assesses persistent inflation and its policy intentions ahead of the September decision.

On the New Zealand side, the monetary policy outlook nevertheless provides some support to the Kiwi and could help limit the decline in NZD/USD. Markets anticipate a 25-basis-point interest-rate hike from the Reserve Bank of New Zealand (RBNZ) at its monetary policy meeting next week, a move that would bring borrowing costs to 3% if delivered.

The divergence between an RBNZ that could tighten monetary policy further and a Fed whose next move remains more uncertain could therefore limit downside pressure on the New Zealand Dollar, even as the US Dollar benefits in the short term from slightly firmer-than-expected inflation data.

NZD/USD technical analysis

In the one-hour chart, NZD/USD trades at 0.5937, retaining a mildly bearish near-term tone as it sits below the 100-period simple moving average (SMA) at 0.5964 while holding just above the 200-period SMA at 0.5933. The pair is slipping away from recent highs, and the Relative Strength Index (RSI) near 32 approaches oversold territory, hinting that downside pressure persists but may begin to lose momentum if sellers fail to drive a clean break lower.

On the downside, immediate support is seen at the 200-period SMA at 0.5933, followed by the horizontal floor at 0.5925, where buyers could attempt to stem further losses. On the topside, initial resistance emerges at the 100-period SMA at 0.5964, ahead of the more significant horizontal barrier at 0.5985, and only a move above this upper cap would ease the current bearish bias and open the way for a more sustained recovery.

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

• Silver retreats as the US Dollar recovers after the latest US inflation figures.
• Headline PCE comes in slightly above forecasts, while core inflation meets expectations.
• XAG/USD holds above the 50-day SMA, but resistance from the 100-day SMA remains a key hurdle.

Silver (XAG/USD) comes under selling pressure on Wednesday as the US Dollar (USD) strengthens following the latest United States (US) inflation data. At the time of writing, XAG/USD trades around $67.79, down nearly 1.26% on the day.

The headline Personal Consumption Expenditures (PCE) Price Index rose 0.2% MoM in July, above the 0.1% forecast, while the annual rate held steady at 3.7%, exceeding expectations of 3.6%. Meanwhile, core PCE inflation increased 0.2% MoM and 3.3% YoY, matching market expectations.

The upside surprise in headline inflation gives the US Dollar a modest lift after its recent weakness. The US Dollar Index (DXY), which tracks the US currency against a basket of six major currencies, trades around 99.20, up nearly 0.30% on the day.

Even so, the data did little to change expectations for the Federal Reserve’s (Fed) September meeting as traders focused on the in-line core readings. According to the CME FedWatch Tool, markets see a roughly 65% chance that the central bank will leave interest rates unchanged next month. This could prevent a deeper decline, although repeated rejection near $70.00 and the struggle to hold above the 100-day Simple Moving Average (SMA) keep the upside limited.

Technical Analysis

On the daily chart, XAG/USD holds above the 50-day SMA but remains capped by the 100-day and 200-day SMAs. This configuration suggests a neutral-to-bullish near-term bias, with price attempting to build a base above short-term trend support while facing a dense band of overhead supply.

The Relative Strength Index (RSI) stands at 60, showing positive momentum without entering overbought territory. The Moving Average Convergence Divergence (MACD) indicator also stays above zero, although buyers have yet to build enough momentum to break the nearby moving-average barriers.

On the upside, immediate resistance emerges at the 38.2% Fibonacci retracement of the broader downswing at $68.02, closely followed by the 100-day SMA at $68.31, forming a tight cap just above spot. Further up, the 50.0% retracement at $72.10 aligns with the 200-day SMA at $72.31, reinforcing a more significant hurdle before $76.18 (61.8% retracement) and $81.98 (78.6% retracement) come into view.

On the downside, initial support is seen at the 23.6% Fibonacci retracement near $62.98, ahead of the 50-day SMA at $61.32; a deeper slide would expose the structural low around $54.82, where the current Fibonacci sequence anchors the move.

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

ABN AMRO’s Georgette Boele highlights that EUR/PLN has risen as interest rate expectations diverge between the Eurozone and Poland. The National Bank of Poland kept rates at 3.75% and appears divided on a possible 25bp cut after summer, while ABN AMRO expects the ECB to hike once more to a 2.5% deposit rate. This policy divergence has led the bank to upgrade its EUR/PLN forecasts.

NBP and ECB on different paths

"Since the start of June, the Polish złoty has fallen by 3% against the euro."

"Interest rate expectations in the eurozone and Poland have been an important driver for direction in EUR/PLN."

"Expectations that the NBP and the ECB will move in opposite directions have pushed EUR/PLN higher, meaning a weaker złoty."

"We have upgraded our EUR/PLN forecasts to reflect this policy divergence for this year."

"If the NBP sounds more dovish than expected, EUR/PLN could move towards 4.40."

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

• Australia's annual headline inflation eased to 3.5% but came in above the 3.2% forecast.
• US headline PCE inflation stayed at 3.7%, above the 3.6% consensus, giving the US Dollar Index a modest lift.
• Reports of an Oman-Iran deal concerning the Strait of Hormuz steadied risk sentiment.

AUD/USD is trading around 0.7170 on Wednesday, down slightly after a hot Australian inflation print ran straight into a firmer US Dollar.

Australia's monthly Consumer Price Index (CPI) climbed 1% in July, above the 0.8% forecast, lifting the annual rate to 3.5%. The trimmed mean measure of the Reserve Bank of Australia's (RBA) preferred core gauge rose 0.5% on the month and held at 3.6% YoY, above the 3.5% forecast.

The US Dollar found support of its own. Annual Personal Consumption Expenditure (PCE) inflation, the Federal Reserve's (Fed) preferred measure, held at 3.7%, above the 3.6% consensus, while the core PCE Price Index stayed at 3.3% as expected. Both rose 0.2% on the month.

Iran and Oman announced this week that they have completed their agreement over management of the Strait of Hormuz, but the US is not party to the agreement and has threatened Oman for making a separate deal that excludes it. A calmer Gulf would normally help risk-sensitive currencies like the Aussie.

Technical Analysis:

On the 4-hour chart, AUD/USD trades at 0.7171, holding a constructive bullish tone as it remains above both the 20-period Simple Moving Average (SMA) at 0.7164 and the longer-term 100-period SMA at 0.7090. The pair is testing a tight band of overhead supply just under recent highs, while the 14-period Relative Strength Index (RSI) around 60 stays in positive territory, hinting that upside momentum is still present but shy of overbought conditions.

On the topside, immediate resistance appears at the nearby horizontal barrier at 0.7175, followed by the recent cap around 0.7188. On the downside, initial support is clustered at 0.7168, reinforced by the 20-period SMA at 0.7164 and the horizontal level at 0.7160, before a deeper structural floor emerges at the 100-period SMA near 0.7090.

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

Commerzbank’s Dr. Henry Hao and Charlie Lay underscore that Taiwan’s industrial production and exports are surging on AI and high-performance computing demand. July manufacturing output and export orders point to Q3 GDP growth around 12–12.5% year-on-year, after 12.9% in Q2. Despite stellar growth, inflation near 2.1% keeps the CBC comfortable holding its policy rate at 2%.

AI-driven strength with steady policy

"Taiwan’s industrial production remained strong in July, rising 25.6% yoy (Bloomberg consensus: 20.7%) vs 22.6% in June. Manufacturing output increased 26.9% yoy vs 24% previously."

"The strength was once again led by the technology sector, with output of computers, electronics and optical products surging 95.6% yoy, while electronic components rose 22.7%. Importantly, the improvement was not confined to technology, with machinery output rising 19.8% and basic metals 13.2%, although chemicals and autos remained weak."

"The Ministry of Economic Affairs expects manufacturing growth to remain very strong at 25.5-28.9% yoy in August, supported by AI, high-performance computing and the traditional peak season for electronics."

"The latest data point to further upside risk to already exceptionally strong GDP growth. Q2 GDP expanded 12.9% yoy, and the government recently raised its 2026 growth forecast sharply to 11.05%, reflecting booming AI-related exports and investment."

"July exports rose 32.9% yoy and export orders surged 61.9% yoy, pointing to continued strong external demand at the start of Q3. Together with the latest production data, which suggests Q3 growth could remain around 12.0-12.5% yoy. The economy expanded by 14.2% in H1 2026."

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

• USD/CAD gains 0.30% on Wednesday, with renewed US-Canada trade tensions weighing on the Canadian Dollar.
• Core Personal Consumption Expenditures inflation holds steady at 3.3% in July, in line with market expectations.
• Oil prices rise 0.60% to $81.20, offering some support to the Canadian currency and potentially limiting the pair’s upside.

USD/CAD rises 0.30% on Wednesday, trading around 1.3880 at the time of writing. The pair remains supported by renewed trade tensions between the United States (US) and Canada, which weigh on the Canadian Dollar (CAD), while the latest US inflation figures provide some support to the US Dollar (USD). However, rising Oil prices offer a tailwind to the commodity-linked Loonie and could limit further gains in the pair.

In the US, inflation, as measured by the Personal Consumption Expenditures (PCE) Price Index, stands at 3.7% YoY in July, unchanged from the previous month but above the 3.6% expected by markets. The core PCE Price Index, which excludes volatile food and energy components, remains steady at 3.3% YoY, in line with the market consensus. On a monthly basis, both the headline and core indices rise by 0.2%.

Attention now turns to the Jackson Hole Symposium, where Federal Reserve (Fed) Chair Kevin Warsh could provide further guidance on the monetary policy outlook. Markets will look for clues on how persistent inflation could affect the US central bank’s policy plans.

On the Canadian side, the Loonie remains caught between opposing forces. Trade tensions between Washington and Ottawa are putting pressure on the Canadian currency, but higher Oil prices provide some support. Oil rises 0.60% on Wednesday to around $81.20 at the time of writing. As Canada is a major Oil exporter to the US, higher energy prices generally provide a supportive backdrop for the Canadian Dollar.

Trade tensions remain a key headwind. Canadian Finance Minister Francois-Philippe Champagne announced retaliatory tariffs of up to 50% on a range of US products after negotiations failed to produce a trade agreement. US President Donald Trump responded by threatening another round of tariffs targeting Canadian cars, trucks, auto parts and steel.

Against this backdrop, USD/CAD maintains a positive bias around 1.3880. US-Canada trade tensions and sticky US inflation support the pair, while the rise in Oil prices provides some relief to the Canadian Dollar and could restrain the pair’s advance.

USD/CAD technical analysis

In the one-hour chart, USD/CAD trades at 1.3886, maintaining a bullish near-term tone as it holds above both the 100-period simple moving average (SMA) at 1.3817 and the 200-period SMA at 1.3838. The pair is also trading above the broken former downward resistance trend-line and the rising support trend-line at 1.3865, reinforcing a constructive structure. However, the Relative Strength Index (RSI) at 72 suggests overbought conditions, hinting that upside momentum could be prone to consolidation or a shallow pullback before a fresh leg higher.

On the topside, initial resistance is located at the horizontal barrier around 1.3910, where a clear break would open the way for a continuation of the uptrend. On the downside, immediate support is seen at the uptrend near 1.3865, followed by the 200-period SMA at 1.3838 and the 100-period SMA at 1.3817, while the prior trend-line around 1.3805 offers an additional structural floor if corrective pressures deepen.

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

• Gold trades lower as the US Dollar firms after the latest inflation data.
• Headline PCE exceeds forecasts, while core inflation comes in as expected.
• XAU/USD maintains a bullish technical bias above the 50-, 100- and 200-day SMAs.

Gold (XAU/USD) remains under pressure on Wednesday as the latest US inflation figures leave buyers reluctant to step back in. At the time of writing, XAU/USD trades around $4,618 after reaching $4,697 on Tuesday, its highest since May 14.

The headline PCE Price Index rose 0.2% MoM in July, above the 0.1% forecast and reversing the 0.1% decline recorded in June. On an annual basis, headline inflation held steady at 3.7%, above the 3.6% forecast.

Meanwhile, the core PCE Price Index, the Federal Reserve’s (Fed) preferred measure of underlying inflation, increased 0.2% MoM, matching market expectations but accelerating from June’s 0.1% rise. Annual core inflation held steady at 3.3%, also in line with forecasts.

The report follows relatively moderate July Consumer Price Index (CPI) and Producer Price Index (PPI) figures. Taken together, the data did little to alter expectations for the Fed’s upcoming meeting, with the CME FedWatch Tool showing a roughly 65% chance that the central bank will leave interest rates unchanged in September.

As a result, the inflation figures had a limited impact on Gold. As a non-yielding asset, the precious metal generally performs better when interest rates are low.

The US Dollar (USD) firms on Wednesday following the release, weighing modestly on Dollar-denominated Gold. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 99.20, up roughly 0.29% on the day.

However, the US Treasury’s decision last week to increase buybacks of longer-dated government securities has revived concerns about rising US debt and fiscal credibility. The return of the USD-debasement narrative continues to offer underlying support to Gold.

On the geopolitical front, Iranian Deputy Foreign Minister Kazem Gharibabadi stressed that the temporary transit deal with Oman does not mean the Strait of Hormuz has reopened. He said the waterway will stay closed until the United States fulfils its commitments under the Memorandum of Understanding (MOU). Even so, markets have taken the agreement as a positive step, with West Texas Intermediate (WTI) Oil falling for a third consecutive day and trading around $80.00 per barrel.

Technical analysis: XAU/USD bullish bias intact, RSI signals stretched momentum

On the daily chart, XAU/USD maintains a bullish bias above the 50-, 100- and 200-day Simple Moving Averages (SMAs). However, the Relative Strength Index (RSI) near 68 suggests buyers may be hesitant to chase the metal higher at current levels. The Moving Average Convergence Divergence (MACD) remains in positive territory, keeping the broader momentum tilted to the upside.

On the topside, initial resistance is seen at the 50.0% Fibonacci retracement at $4,774, followed by the 61.8% level at $4,968. A sustained break above these levels could expose the 78.6% Fibonacci retracement level at $5,245 and the all-time high of $5,598.25.

On the downside, immediate support is located at the 38.2% Fibonacci retracement at $4,579, followed by the 200-day SMA at $4,522 and the 100-day SMA at $4,378. A deeper pullback could bring the 23.6% retracement at $4,338 and the 50-day SMA near $4,193 into focus.

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