The yen strengthened due to the divergent monetary policies between Japan and the US. The dollar remained stable as investors awaited the PCE price index report, which could influence the Fed’s decision on interest rates. Gold prices rose on the expectation of rate cuts and geopolitical tensions. The pound sterling weakened against the US dollar as traders anticipated higher interest rates in the UK compared to the US. Silver prices were volatile, influenced by the gold market and the upcoming PCE data.
The dollar index remained around 101.4 on Friday after rising for two consecutive sessions as investors awaited the July PCE price index report. The market is looking for signs that prices are decreasing, which would give the Fed more flexibility to lower interest rates. The central bank is expected to start easing in September, with about 100 basis points of total rate cuts anticipated this year. On Thursday, the dollar index rose by 0.3% as recent US GDP data and initial jobless claims helped ease recession fears. Nevertheless, the dollar is set to experience its largest monthly decline since November of last year due to dovish Fed expectations. Additionally, the upcoming Eurozone inflation figures will shape the direction of the EUR/USD pair before the ECB’s interest rate decision.
The first support level is at 1.1060 for the pair. If this level is breached, the next supports to watch will be 1.1000 and 1.0950. On the upside, the first resistance is at 1.1100; if this level is surpassed, the following targets will be 1.1150 and 1.1200.
Gold eased to around $2,510 per ounce on Friday but remains on track for its second consecutive monthly gain. This is due in part to anticipated rate cuts by major central banks, which have reduced the opportunity cost of holding non-yielding gold. Recent US data showed that the Federal Reserve’s preferred inflation measures, the headline and core PCE price indices, were revised downward, highlighting a more significant slowdown in the second quarter. Additionally, initial jobless claims fell below expectations, underscoring a softening labor market. US GDP growth for the second quarter was revised upward, yet markets still expect 100 basis points of rate cuts over the Fed’s remaining three meetings this year. The ECB is also expected to implement rate cuts, given the rapid deceleration in price pressures. Furthermore, gold’s safe-haven appeal has been strengthened by escalating conflict in the Middle East.
Technically the first support level is at 2,510. If this level is breached, the next supports to watch will be 2,495 and 2,470. On the upside, the initial resistance is at 2,528; if this level is surpassed, the next targets will be 2,550 and 2,585.
Dollar Strengthens as US Economic Data Shapes Currency and Commodity Trends
The dollar index holds steady at 101.7, with the EUR/USD trading at 1.1044 as market participants recalibrate expectations for Federal Reserve rate cuts in light of recent inflation data. The USD/JPY has weakened, falling to near a two-week low around 146 due to stronger dollar dynamics and ongoing considerations of potential BoJ rate hikes. Gold has dropped below $2,500, pressured by a stronger dollar and rising bond yields, while GBP/USD has rebounded to 1.3135 amid anticipation of the upcoming US Nonfarm Payrolls report. Silver remains at $28.45, showing a negative divergence from gold as mixed economic signals and recession fears influence its price movement.
The dollar index remained around 101.7 and the EUR/USD 1.1044 on Monday. Investors have scaled back their expectations for aggressive Federal Reserve rate cuts following the latest inflation data and are now looking ahead to a crucial US jobs report later this week. Data released on Friday showed that US core PCE prices increased steadily in July, reducing the likelihood of a substantial 50 basis point rate cut by the Fed in September. Attention is now shifting to the August jobs report as the Fed’s focus moves from inflation to the labor market. Recent comments from Fed policymakers have highlighted concerns about a weakening jobs market while expressing confidence that inflation will eventually meet its target. The dollar maintained its gains across major currencies, reaching a two-week high against the euro.
In the pair the first support level is at 1.1000. If this level is breached, the next supports to watch will be 1.0950 and 1.0900. On the upside, the first resistance is at 1.1100; if this level is surpassed, the next targets will be 1.1150 and 1.1200.
GBP/USD Rebounds to 1.3135 in Early Asian Session
During Monday’s early Asian session, the GBP/USD pair climbed to about 1.3135, reversing a losing trend for three days. With no significant economic data due from the UK this week, GBP/USD movements will largely hinge on the performance of the USD. The focus is now on the US Nonfarm Payrolls (NFP) report for August, scheduled for release on Friday. Current expectations of Federal Reserve easing are weighing on the dollar. Last week, Fed Chair Jerome Powell suggested that a rate cut might be on the horizon due to concerns about the labor market. According to the CME FedWatch tool, traders are now anticipating a nearly 70% chance of a 25 basis point rate cut by the Fed in September, with a 30% chance of a 50 basis point reduction. In contrast, investors are increasingly confident that the Bank of England (BoE) will pursue a gradual policy-easing approach for the rest of the year, which could strengthen the Pound Sterling. A Reuters poll indicates that economists expect the BoE to implement one more 25 basis point rate cut this year.
For GBP/USD, the initial support is at 1.3100, followed by 1.3050 and 1.3000 below. On the upside, the first resistance is at 1.3190, with subsequent levels at 1.3230 and 1.3265 if the pair breaks above this resistance.
The Dollar Index Keeps Steady While Yen Rebounds, Gold & Silver are Stagnant
The dollar index held steady at 101.6, as investors awaited key US jobs data that could influence the Federal Reserve’s rate decision. The EUR/USD pair faced resistance at 1.1100, with support at 1.1000. The Japanese yen rebounded after a four-day decline but faced challenges due to disappointing manufacturing data and potential delays in rate hikes by the Bank of Japan. The USD/JPY pair saw resistance at 147.20 and support at 146.30. Gold prices fell below $2,500, influenced by a stronger dollar and expectations of Fed rate cuts, with resistance at $2,505 and support at $2,485. GBP/USD traded in a narrow range, awaiting US jobs data later in the week, with resistance at 1.3190 and support at 1.3100. Silver remained steady at $28.45, with resistance at $29.00 and support at $28.00, amid mixed economic signals and potential Fed rate cuts.
The dollar index held steady around 101.6 on Tuesday as investors prepared for crucial US jobs data this week, which could impact expectations for the Federal Reserve’s interest rate decision. Key reports include the jobless claims data scheduled for release on Thursday and the August payrolls report on Friday. Fed officials have indicated a willingness to lower borrowing costs due to concerns about the labor market. Recent data released on Friday showed that US core PCE prices increased steadily in July, dampening hopes for a significant 50 basis point rate cut by the Fed in September. Currently, markets are pricing in a 69% chance of a 25 basis point rate cut this month, with a 31% probability for a larger 50 basis point reduction. The dollar reached two-week highs against the euro. Also in Europe, the ECB is also expected to implement rate cuts, following the sharp slowdown in inflation reported in August’s preliminary figures.
In the EUR/USD pair, the first support level is at 1.1000. If this level is breached, the next supports to watch will be 1.0950 and 1.0900. On the upside, the first resistance is at 1.1100; if this level is surpassed, the next targets will be 1.1150 and 1.1200.
Gold remained below $2,500 per ounce on Tuesday, continuing its pullback from last week’s record highs as investors awaited US data to adjust their expectations for the Federal Reserve’s interest rate decision. This week’s key data points include the ISM surveys, JOLTS job openings, ADP employment report, and non-farm payrolls. Several Fed officials have recently raised concerns about increasing risks to the labor market. Markets anticipate a total of 100 basis points in rate cuts over the Fed’s remaining three meetings this year, which would reduce the opportunity cost of holding non-interest-bearing assets.
Technically the first support level is at 2,485. If this level is breached, the next supports to watch will be 2,475 and 2,430. On the upside, the initial resistance is at 2,505; if this level is surpassed, the next targets will be 2,530 and 2,550.
Financial markets witnessed mixed performances on Wednesday, with key currency pairs and commodities reacting to economic data and central bank speculations. The EUR/USD remained steady at 1.1050 as weak US manufacturing data reignited recession fears, affecting expectations for the Fed’s upcoming rate cut. Similarly, the Japanese yen strengthened toward 145 per dollar due to safe-haven demand and anticipation of potential BoJ policy adjustments. Meanwhile, gold steadied above $2,490, as investors evaluated the Fed’s rate outlook amid weak economic indicators, while GBP/USD dipped below 1.3100, pressured by US recession concerns. Silver hovered around $28.00, fluctuating with ongoing economic uncertainty and global conflicts. Markets now await crucial US labor data, which could significantly influence future central bank decisions.
The EUR/USD traded at the 1.1050 level, and the dollar index held steady around 101.7 on Wednesday morning, following a two-week high reached the previous session, as safe-haven demand surged due to weak US manufacturing data rekindling recession concerns. The ISM Manufacturing PMI indicated that factory activity contracted for the fifth month and at a slightly faster pace than expected. US labor market reports, including the latest JOLTS, weekly jobless claims, and monthly payrolls are expected to be released, which could affect the Federal Reserve’s anticipated interest rate cut this month. Currently, markets are pricing in roughly a 60% chance of a 25 basis point cut, compared to a 40% likelihood of a larger 50 basis point reduction.
The first support level is at 1.1000 for the EUR/USD pair. If this level is breached, the next supports to watch will be 1.0950 and 1.0900. On the upside, the first resistance is at 1.1100; if this level is surpassed, the next targets will be 1.1150 and 1.1200.
GBP/USD weakened, briefly dipping below 1.3100 as the currency pair struggled to maintain its bullish stance with a short-term bearish correction. The US dollar gained traction after new Purchasing Managers Index (PMI) figures from the US fell short of market expectations, reigniting fears of a potential US recession. With minimal UK data scheduled for Wednesday, attention remains on the US labor market. The ISM Manufacturing PMI for August came in at 47.2, below the median market forecast of 47.5, and while it was an improvement from July’s multi-month low of 46.8, it was insufficient to bolster market confidence. This prompted investors to retreat from recent bullish positions. The focus now shifts to Friday’s US Nonfarm Payrolls (NFP) report, which will be the last major labor data release before the Federal Reserve’s rate decision on September 18. The NFP report is expected to significantly influence market expectations for the magnitude of a Fed rate cut, with investors fully anticipating the start of a new rate-cutting cycle this month.
For GBP/USD, the initial support lies at 1.3100, followed by 1.3050 and 1.3000 below. On the upside, the first resistance is at 1.3150, with subsequent levels at 1.3190 and 1.3265 if the pair breaks above this resistance.
Economic Data Weighs on Markets: Dollar Stabilizes, Yen Gains, and Gold Seesaws Ahead of Fed Decisions
The currency and commodity markets have shown mixed reactions during a backdrop of fluctuating economic data and central bank policy speculation. The dollar index holds steady as expectations adjust following recent job data, suggesting less aggressive rate cuts by the Fed. This has caused the EUR/USD to hover around 1.1045, closely watching for further data releases that might sway monetary policy. Concurrently, the yen has seen some strength against the dollar, buoyed by domestic wage growth and safe-haven demand, despite weak manufacturing outputs. Gold’s price fluctuates near $2,500 per ounce as investors parse through US economic reports, speculating on the extent and timing of Fed rate adjustments. Meanwhile, GBP/USD shows resilience, supported by optimistic retail spending figures from the UK and a relatively dovish stance expected from the Bank of England. Silver prices have ticked up, reflecting heightened expectations for a forthcoming Fed rate cut, as market participants eagerly await further job reports to solidify their forecasts for interest rate trajectories.
Gold Awaits US Jobs Report Amid Rate Cut Speculation
Gold remained close to $2,500 per ounce on Thursday as investors awaited the crucial US jobs report for further insights into the Federal Reserve’s potential interest rate cuts, which could lower the opportunity cost of holding non-yielding gold. On Wednesday, JOLTS data showed a much larger-than-expected decline in job openings, hitting 2021 lows and reinforcing expectations of a slowing labor market, which fueled speculation for a significant 50 basis point rate cut by the Fed this month. Additionally, the sharp drop in US factory activity reported by the ISM PMI has cast doubt on the US economy’s ability to withstand higher interest rates. Consequently, investors have increased their expectations to 125 basis points in rate cuts over the Fed’s remaining three meetings this year, up from last week’s consensus of 100 basis points. The key US jobs data is set to be released on Friday.
Technically the first support level is at 2,485. If this level is breached, the next supports to watch will be 2,475 and 2,430. On the upside, the initial resistance is at 2,505; if this level is surpassed, the next targets will be 2,530 and 2,550.
During the Asian session on Thursday, the GBP/USD pair traded with a positive bias in the mid-1.3100s, though it lacked strong follow-through buying and remained below the weekly high reached the previous day. The British Pound (GBP) continues to be supported by expectations that the Bank of England’s (BoE) rate-cutting cycle will be slower compared to the Eurozone or the United States. This sentiment was bolstered by a British Retail Consortium survey showing a 1.0% year-on-year increase in spending for August, the strongest rise since March. Additionally, a weaker US Dollar (USD) has been a key factor driving the GBP/USD pair higher. The Job Openings and Labor Turnover Survey (JOLTS) released on Wednesday revealed a drop in job openings to 7.673 million in July, the lowest level since January 2021. Dovish comments from Fed officials have increased expectations for a significant interest rate cut at the upcoming FOMC meeting on September 17-18, pushing US Treasury bond yields to over a one-year low. This has kept USD bulls on the defensive and provided some support to the GBP/USD pair.
For GBP/USD, the initial support lies at 1.3090, followed by 1.3050 and 1.3000 below. On the upside, the first resistance is at 1.3150, with subsequent levels at 1.3190 and 1.3265 if the pair breaks above this resistance.
Anticipation Builds in Global Markets Before Key US Jobs Data Release
As global markets remain on edge, the forex landscape is marked by cautious trading ahead of crucial US employment data. The dollar, balancing near recent lows, reflects investor hesitancy while the EUR/USD steadies, reflecting subdued activity before the jobs report potentially triggers more aggressive Fed rate cuts. Similarly, the yen strengthens on domestic wage growth amidst BOJ rate hike expectations, contrasting with the Fed’s easing trajectory. Gold positions for potential gains, anticipating shifts in Fed policy could enhance its appeal. Meanwhile, GBP/USD benefits from USD weakness, and silver trades cautiously, each sensitive to the imminent Nonfarm Payrolls outcomes which could dictate short-term market directions and central bank responses.
EUR/USD Trades Cautiously Ahead of Key US Employment Data
On Friday, the dollar index was around 101 and the EUR/USD pair was near 1.1115, both approaching their lowest levels in a week as investors anticipated the release of the August jobs report. This report could reinforce expectations for a substantial 50 basis point rate cut by the Federal Reserve this month. Meanwhile, the EUR/USD pair struggled to build on recent gains, trading within a narrow range during the Asian session. Prices remained above 1.1100, showing minimal change as traders held off on new positions ahead of the US Nonfarm Payrolls (NFP) report. The dollar index is poised to drop nearly 1% this week, influenced by weak US economic data that has heightened recession fears and led to expectations of more aggressive Fed rate cuts. Recent figures showed the smallest increase in US private sector jobs since January 2021, although weekly jobless claims fell more than expected. Additionally, July saw job openings drop to their lowest level in three years, while manufacturing activity in August contracted more than expected. Currently, markets are pricing in a 40% chance of a 50 basis point rate cut this month, with over 100 basis points of total easing expected for the year. Later today, European growth data will be crucial ahead of next week’s anticipated ECB rate cut decision.
In the pair, the first support level is at 1.1100. If this level is breached, the next supports to watch will be 1.1045 and 1.1000. On the upside, the first resistance is at 1.1150; if this level is surpassed, the next targets will be 1.1200 and 1.1250.
GBP/USD Benefits from USD Decline Ahead of Nonfarm Payrolls Report
The GBP/USD pair remained in positive territory around 1.3180 on Friday, benefiting from ongoing US Dollar (USD) weakness. The market is keenly awaiting the August Nonfarm Payrolls (NFP) data, which will be set for release later in the day. Thursday’s ADP report showed the slowest private sector job growth in over three and a half years, with just 99,000 jobs added in August, falling short of forecasts. This data heightens expectations for a Federal Reserve rate cut at its September 17-18 meeting. However, the Pound Sterling (GBP) is supported by expectations for modest Bank of England (BoE) rate cuts. BoE Governor Andrew Bailey has signaled that while inflation pressures might be easing, any further rate cuts will be cautious. The market anticipates a rate cut in November, with a 25% chance priced in for the September meeting.
For GBP/USD, the initial support lies at 1.3150, followed by 1.3100 and 1.3050 below. On the upside, the first resistance is at 1.3190, with subsequent levels at 1.3265 and 1.3300 if the pair breaks above this resistance.
The Euro is under pressure as the European Central Bank (ECB) hints at a potential rate cut following Eurozone inflation and GDP data, impacting EUR/USD, with key support at 1.1040. Meanwhile, mixed US jobs data has clouded the Federal Reserve’s rate path, affecting both the yen and gold prices. The Japanese yen weakened after initial strength, while gold remained stable as traders awaited the Fed’s decision. Silver surged on rate cut hopes, but gains could be limited by reduced geopolitical tensions. GBP/USD faces headwinds due to concerns over US labor data and a cooling UK job market. Key support and resistance levels are being closely watched across these currency pairs and commodities as markets await further economic updates.
EUR/USD is attempting to recover from previous losses, trading around 1.1090 during Monday’s Asian session. However, the pair’s upside potential may be constrained, as recent Eurozone inflation data have heightened expectations for a rate cut by the European Central Bank (ECB) at its policy meeting on Thursday. With headline inflation nearing 2% and long-term forecasts stable, the ECB is likely to consider further monetary easing. Last week’s mixed Eurozone GDP data also reinforced the likelihood of a rate cut. Meanwhile, US economic data from Friday introduced uncertainty about the extent of the Federal Reserve’s potential rate cut in September. The US Bureau of Labor Statistics reported a 142,000 increase in Nonfarm Payrolls (NFP) for August, falling short of the 160,000 forecast but improving from July’s revised 89,000. The Unemployment Rate fell to 4.2%, matching expectations, down from 4.3% the previous month. According to the CME FedWatch Tool, markets are anticipating at least a 25 basis point (bps) rate cut by the Federal Reserve in September, though the probability of a 50 bps cut has slightly decreased to 29.0%, down from 30.0% a week ago.
For the EUR/USD pair, the first support level is at 1.1040. If this level is breached, the next supports to watch will be 1.1000 and 1.0950. On the upside, the first resistance is at 1.1150; if this level is surpassed, the next targets will be 1.1200 and 1.1250.
