Forex News

• XAU/USD picks up to session highs at $4,370 after bouncing from $4,324 lows.
• Broad-based USD weakness ahead of the release of the Fed minutes is providing some support to Precious metals.
• Technical indicators highlight fading bullish momentum.

Gold (XAU/USD) trades moderately higher on Wednesday and returns to the $4,370 area, after finding buyers near the $4,300 area on Tuesday. A broad-based US Dollar weakness amid lower US yields ahead of the release of July’s Federal Reserve (Fed) monetary policy meeting is providing some support to precious metals, although the technical picture hints at fading bullish momentum.

Analysts at OCBC agree that “gold’s rebound has lost some momentum as the renewed rise in oil prices added to pressure from higher long-end US yields,” with the move in both markets curbing the metal’s recent advance. Looking ahead, OCBC experts affirm that “for the gold rally to regain traction, oil and yields need to stabilise, or a stronger pickup from investment demand,” suggesting near-term performance will hinge on whether inflation-related drivers and investor flows turn more supportive.

Technical Analysis: Tuesday's bearish engulfing candle is a bearish sign

XAU/USD trades at $4,367 at the time of writing after bouncing from $4,324.Tuesday's bearish engulfing candle in the daily chart, however, is a bearish sign that hints at a potential trend shift. Momentum indicators remain in bullish territory but highlight a waning impetus, with the Relative Strength Index (RSI) pulling back below 60 and the Moving Average Convergence Divergence (MACD) histogram showing contracting bars.

On the downside, immediate support aligns with the August 14 low, at $4,311, followed by a broader demand area around $4,220 (June 22 high, August 6 low).

Bullish attempts, on the other hand, are likely to face significant resistance at the area between the top of the last two weeks' trading range, around $4,450, and the 200-day Simple Moving Average (SMA) at $4,510. Beyond that, the next resistance is at the late May highs, near $4,600.

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

• The oil price jumps to near $84.80 amid fears of prolonged energy supply risks.
• US President Trump confirms that no talks with Iran are going on.
• The number of vessels navigating through the Hormuz remains very low.

West Texas Intermediate (WTI), futures on NYMEX, trade 0.55% higher at around $84.80 during the European trading session on Wednesday. The oil price remains firm as fears of prolonged energy supply disruption remain intact amid the deadlock between the United States (US) and Iran regarding the reopening of the Strait of Hormuz, a vital passage to almost one-fifth of energy supply.

On Tuesday, US President Donald Trump confirmed, through a post on Truth Social, that Washington is not having any talks with Iran regarding the Hormuz reopening, nor are any discussions scheduled.

“There are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran. The Naval Blockade remains in full force and effect. The Hormuz Strait is open and operating. All water mines have been removed or detonated,” US President Trump wrote.

According to data from Kpler, six commodity vessels crossed the strait on Tuesday, down from ​nine a day earlier and below the 10-day daily ​average of 11, Reuters reported. This remains a massive decline from pre-war levels of 130 to 140 ships daily.

WTI Technical Analysis

The WTI US Oil trades at $84.61, maintaining a bullish near-term bias as it holds above the 20-day Exponential Moving Average (EMA) at $81.22.

Price action continues to advance away from this dynamic support, while the Relative Strength Index (RSI) at 56.95 stays in positive territory, hinting at sustained upside pressure rather than overbought conditions.

On the downside, immediate support is seen at the $84.61 area as a short-term pivot, followed by the 20-day EMA at $81.22, which reinforces the underlying bullish structure. Looking up, the oil price needs a decisive break above $85 to extend the rally towards $90.00, with the two-week high at $92.25 the next hurdle.

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

• Silver rebounds slightly on Wednesday after retreating from the $66.50 area.
• Caution surrounding Middle East tensions and higher Oil prices limit demand for precious metals.
• A weaker US Dollar and lower Treasury yields provide some support to Silver ahead of the Fed Minutes.

Silver (XAG/USD) stabilizes around $63.45 on Wednesday, up 0.16% on the day at the time of writing. The white metal is attempting to regain its footing after hitting an intraday low of $62.19, initially extending the pullback that followed Tuesday’s rejection from the $66.50 area.

Silver remains under pressure in a cautious market environment as investors monitor the deteriorating situation in the Middle East. The Memorandum of Understanding between the United States (US) and Iran expired on Monday, while US President Donald Trump confirmed on Tuesday that no talks with Tehran are currently taking place.

Disruptions to maritime traffic through the Strait of Hormuz are also keeping tensions elevated in the energy market, reinforcing concerns about the conflict's inflationary consequences. This prospect could complicate the task of the Federal Reserve (Fed) and limit its room to tighten monetary policy.

Investors now await the Minutes of the Federal Open Market Committee (FOMC) July meeting, due on Wednesday at 18:00 GMT, for fresh clues about the path of US interest rates.

Since that meeting, weaker-than-expected labor market and inflation data have reduced expectations of a September rate hike. According to the CME FedWatch tool, markets now price in only a 32% chance of an increase at the next meeting. This shift helps limit pressure on precious metals, which tend to benefit from expectations of less restrictive monetary policy.

At the same time, inflation risks stemming from the energy shock continue to support the possibility of further monetary tightening over the longer term. US Treasury yields therefore remain elevated despite a modest decline on Wednesday, limiting the appeal of non-yielding Silver.

The release of the Fed Minutes could therefore provide the next catalyst for Silver as markets assess the balance between softer US economic data, inflation risks stemming from the Middle East conflict and the future path of interest rates.

XAG/USD technical analysis

In the one-hour chart, XAG/USD trades at $63.46, retaining a capped near-term tone as it holds beneath the 100-period simple moving average (SMA) at $64.74 and the 200-period SMA at $64.65. The proximity of the immediate horizontal barrier at $63.50 reinforces overhead supply just above spot, while the Relative Strength Index (RSI) at 44.51 stays below the neutral 50 line, hinting that recovery attempts could remain limited for now.

On the topside, initial resistance is located at $63.50, ahead of the 200-hour SMA at $64.65 and the 100-hour SMA at $64.74, with a stronger hurdle emerging at the prior horizontal cap near $66.80. On the downside, first support appears at $62.60, with a deeper cushion seen at $61.00, where buyers would be expected to show more interest if the current pullback extends.

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

ING’s Chris Turner, citing UK economist James Smith, notes that July United Kingdom (UK) Consumer Price Index (CPI) had limited impact on EUR/GBP, with benign food inflation and only a modest uptick in the Bank of England’s core services measure to 3.8%. ING’s call is that the BoE does not need further hikes, though this may not weigh on Sterling until later in the year. In a low-volatility environment, Sterling still benefits from strong carry appeal, and EUR/GBP is expected to hover around 0.8550.

Carry appeal helps limit Sterling downside

"EUR/GBP has barely budged on today's release of the UK July CPI data. The rise in headline inflation was widely expected, though food inflation – which the Bank of England tracks closely – remains quite benign. "

"ING's UK economist, James Smith, notes that the BoE's core services measure of inflation has picked up a little to 3.8% year-on-year, but probably not enough to trouble the Bank."

"Our call is that the BoE does not need to hike again, but that the realisation of that may not weigh on sterling until later in the year."

"In a low volatility environment, sterling is probably still enjoying some carry demand given it is one of the highest, volatility-adjusted currencies in G10. EUR/GBP can probably hang around these 0.8550 levels for the time being."

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

BNY’s Geoff Yu highlights that international investors are aggressively cutting Dollar exposure as real-yield support erodes following the July FOMC meeting. The bank sees the Dollar decline as a normalization of previously extreme U.S. asset holdings rather than a collapse in U.S. exceptionalism. FX risks are differentiated by pair, with U.S. equities still supported and fixed income more insulated.

Dollar decline and FX regime risks

"Aggregate U.S. exposure among international investors, measured using a 40:60 equity/fixed-income portfolio net of dollar holdings, recently reached record highs. The July FOMC meeting marked a clear turning point, and the unwind in “dollar exceptionalism” is now proving equally sharp. If the adjustment is fully symmetrical, we estimate total dollar exposure could return to flat within roughly 12 weeks, setting the stage for a significant regime shift in FX markets into Q4."

"The dollar is clearly under pressure, but the risks remain differentiated by pair and asset class. U.S. equity exceptionalism remains intact, while stronger home bias in fixed income means the marginal impact of overseas hedging should be smaller, particularly at shorter maturities. Barring a major policy misalignment, we see the current move as a healthy normalization of international exposure to U.S. assets."

"In FX, continue to raise USD hedge ratios rather than cut U.S. assets outright, while treating the dollar decline as a broader exposure normalization, not a collapse in U.S. exceptionalism."

"Unless fiscal or monetary signals change materially, the path of least resistance remains toward further curve steepening and a continued normalization of dollar exposure."

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

• The Indian Rupee trades vulnerably against the US Dollar at around 95.75.
• Higher oil prices are keeping the Indian Rupee under pressure.
• The RBI prematurely closes the zero-cost swap facility.

The Indian Rupee (INR) remains vulnerable against the US Dollar (USD), close to its two-week low at around 95.75. The USD/INR pair has been under pressure as oil prices continue to remain higher, with discussions between the United States (US) and Iran regarding the reopening of the Strait of Hormuz, a critical chokepoint to almost one-fifth of global energy supply, remaining absent.

In the opening session, the MCX Crude Oil contract expiring on August 19 trades 0.6% higher to near Rs. 8,130. The crude oil price is close to its three-week high of Rs. 8,170 posted on Tuesday.

Currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform in a high-oil-price environment.

Oil stays elevated as Strait of Hormuz standoff drags on

Analysts at BNY highlight that "hopes for a rapid reopening of the Strait of Hormuz faded." They note that US President Donald Trump has "said he will not seek to revive the expired U.S.–Iran truce, leaving the conflict and control of the vital shipping route unresolved," with Washington "demanding unrestricted passage through the strait, while Iran says traffic should be managed jointly with Oman."

BNY adds that "shipping activity remains heavily disrupted and fresh attacks near the strait have reinforced supply concerns." While Trump has argued that "U.S. leverage over Iran remains substantial" and "claimed back channels are open, though Tehran disputed this," the bank stresses that "the unresolved standoff keeps oil vulnerable to renewed escalation and prolonged disruption."

Against this backdrop, BNY concludes that "persistent Middle East tensions are keeping crude elevated, adding another supply-driven inflation risk to already stretched long-end markets."

On Tuesday, US President Trump also confirmed through a post on Truth Social that Washington is currently not involved in any discussions, nor scheduled, with Iran. Trump claimed that the Hormuz is under US control and fully operating.

RBI ends FCNR(B) swap window early as inflows swell and liquidity costs rise

In a surprise move, the Reserve Bank of India (RBI) has announced an early closure of its concessional FX swap facility for Foreign Currency Non-Resident (Bank) deposits on 31 August, “a month ahead of the original deadline.” According to the bank, the move follows a stronger-than-expected take-up, with Indian banks having attracted “USD52.3 billion of FCNR(B) deposits as of 13 August.”

Analysts at Commerzbank argue that the early closure likely reflects “diminishing benefits relative to the rising liquidity and balance-sheet costs of the scheme.” The sizeable inflows have “generated substantial rupee liquidity and supported demand for shorter-dated government bonds,” but the bank cautions that “the scheme is not costless.”

Looking ahead, Commerzbank expects the RBI to “rely primarily on spot and forward FX intervention if depreciation pressures return,” while any resort to rate hikes would “likely require a more persistent combination of INR weakness and inflation pressure.” In the near term, the bank highlights that “oil prices remain the key external driver for INR, given India’s dependence on crude imports.”

The RBI is seen to have intervened in spot and Non-Deliverable Forwards (NDFs) markets to support the depreciating Indian Rupee several times in a few months. Indian central bank was also expected to have stepped into the foreign exchange market this morning to shield the rupee from pressure due to persistently elevated oil prices amid uncertainty over the US-Iran war, Reuters reports.

FOMC Minutes awaited

Investors keenly await the Federal Open Market Committee (FOMC) minutes of the July policy meeting, which will be published at 18:00 GMT.

Analysts at Commerzbank expect the minutes from the Fed’s late-July meeting to be closely watched, as markets “may try to discern just how close the FOMC members ultimately were and still are to raising interest rates.” They note that the new Fed Chairman, Kevin Warsh, “intends to comment less on monetary policy and let the market do its job,” a stance that could increase the importance of the minutes as a window into the Committee’s thinking.

Commerzbank stresses that “the Fed – and the Fed alone – is responsible for price stability through its setting of the federal funds rate, not the market,” arguing that in the absence of “clear statements in the press release and at the press conference following the Fed meeting, the market might try to learn a little more about the discussions among FOMC members from the minutes.” Whether that effort yields much new information “remains to be seen,” particularly given that “following the Fed's last meeting in late July, the labor market and inflation figures had already come as a surprise with weaker-than-expected results,” leaving the market “no longer fully pricing in an interest rate hike by the end of the year.”

Against that backdrop, Commerzbank suggests that “should an interest rate hike in September have been a real possibility after all, the market could raise its rate hike expectations for the Fed slightly again and thereby provide support for the Dollar, provided the fundamentals warrant it.” However, they caution that “a fundamental reassessment of interest rate expectations – and the resulting sharp movements in the Dollar – is unlikely to occur,” implying that any reaction to the minutes is more likely to be incremental than transformative for US rate and currency markets.

Ahead of FOMC minutes, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.26% lower to near 99.38, close to its two-month low of 99.29 posted on Monday.

Technical Analysis: USD/INR stabilizes above 38.2% Fibo retracement at 95.63

USD/INR trades at 95.76, holding a mild bullish bias as it stays above the 20-period Exponential Moving Average (EMA) near 95.58. The pair has also reclaimed the 38.2% Fibonacci retracement at 95.63, suggesting that dips are being supported, while the Relative Strength Index (RSI) around 54 points to constructive but not overextended momentum.

On the topside, immediate resistance emerges at the 50.0% Fibonacci retracement near 95.87, followed by the 61.8% level at 96.12; a daily close above this latter barrier would open the way toward 96.46 and the recent swing high around 96.90. On the downside, initial support is seen at the 38.2% retracement at 95.63, reinforced by the 20-period EMA close to 95.58, with a deeper floor at the 23.6% retracement near 95.33 if sellers regain traction.

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

• AUD/USD finds buyers at 0.7065 to bounce up to 0.7080, but remains bearish on the daily chart.
• The USD is losing some momentum as investors brace for the Fed's minutes.
• Risk aversion and lower wage growth figures in Australia have proved a heavy weight for the Aussie.

The Australian Dollar (AUD)has bounced up from intra-week lows against the US Dollar (USD) on Friday, although the daily chart remains negative. The AUD/USD pair struggles to regain a previous support area above 0.7080 at the time of writing, after finding support at the 0.7065 area earlier on the day.

The Greenback is giving away ground against major peers on Wednesday’s European session, as traders brace for the release of the minutes of July’s Federal Reserve (Fed) monetary policy meeting, aiming for further guidance on the bank’s near-term plans.

ING: Fed minutes are unlikely to pose significant support for the USD

Analysts at ING highlight that "the suspicion is that the 12-member FOMC is less hawkish than the participants whose projections delivered forecasts of a 9:9 split for a hike in the June set of Dot Plots." ING assesses that "a few hawkish references in tonight's minutes could nudge the dollar and short-dated rates a little firmer," but they do not expect the minutes to be "a game changer."

Instead, ING experts see that "another batch of CPI and jobs data, plus the end-of-month Jackson Hole symposium, will have a bigger say in whether the Federal Reserve hikes in September," reiterating that "our base case is that it does not, and the dollar softens a little."

Aussie struggles on risk aversion and low wage growth

The Aussie, on the other hand, remains weighed by the growing uncertainty surrounding the Middle East conflict and higher Oil prices. In Australia, the steady growth of the Q2 Wage Price Index has eased pressure on the Reserve Bank of Australia (RBA) to hike interest rates immediately, providing an additional bearish impulse to the Aussie

Against this background, Brown Brothers Harriman’s Elias Haddad notes that “RBA cash rate futures continue to imply 60% odds of one final 25bps hike by year end to 4.60%,” but argues that “the risk is skewed towards a more extended pause in the RBA tightening cycle because policy is already somewhat restrictive.” AUD dips, however, are likely to remain limited, as “Australia’s attractive carry alongside the country’s strategic exposure to commodities linked to energy, AI, and defense remain key AUD tailwinds,” says Haddad in a note.

• GBP/USD rises to near 1.3557 as the US Dollar faces selling pressure.
• The Fed is expected to leave interest rates unchanged in September.
• UK’s headline CPI grew in line with estimates of 2.9% YoY vs. 2.6% prior.

The British Pound (GBP) is up 0.2% to near 1.3557 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair trades higher as the US Dollar faces selling pressure, with traders scaling back Federal Reserve (Fed) interest rate hike bets due to weak United States (US) economic data for August.

Meanwhile, investors await the Federal Open Market Committee (FOMC) minutes of the July policy meeting, which will be published at 18:00 GMT.

Dollar steadies as FOMC minutes eyed for limited hawkish surprise

Analysts at ING highlight that “for today, the focus will be on tonight's release of the FOMC minutes for the July meeting,” noting that the earlier decision saw “the vote… 9-3 for unchanged rates and the event proved a dovish one for the short end of the US curve and the Dollar, while the long end sold off.” ING argues that “the suspicion is that the 12-member FOMC is less hawkish than the participants whose projections delivered forecasts of a 9:9 split for a hike in the June set of Dot Plots.” As a result, while they concede “there may be a few hawkish references in tonight's minutes that could nudge the Dollar and short-dated rates a little firmer,” they stress that “we do not see the minutes as a game changer.”

Ahead of the FOMC minutes, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.26% lower to near 99.38, close to its two-month low of 99.29 posted on Monday.

On the United Kingdom (UK) front, the headline Consumer Price Index (CPI) data for July has come in higher at 2.9% Year-on-Year (YoY), as expected, from 2.6% in June. The core CPI growth remains steady at 2.6% YoY, while it was expected to cool down to 2.5%.

GBP/USD Technical Analysis

GBP/USD trades near 1.3560. The pair maintains a bullish near-term bias as spot holds above the 20-day exponential moving average (EMA) at 1.3475 and the former resistance trend line, now acting as support around 1.3436.

The Relative Strength Index (14) near 64 stays in positive territory, hinting at sustained upward momentum without yet reaching extreme overbought conditions.

On the downside, the immediate support emerges at the 20-day EMA at 1.3475, followed by the trend-line break level near 1.3436. On the topside, the pair needs to break above the three-month high at 1.3571 to extend the advance towards 1.3600, followed by the May high at 1.3658.

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