The (Brent) price soars high in its last intraday trading, taking advantage of forming a positive divergence on the (RSI), with the emergence of the positive signals from there, and the price gad previously benefited from the stability of the key support at $65.00, gaining positive momentum that intensified these signals, in attempt to recover some of the previous losses on the short-term basis, with the continuation of the negative pressure that comes from its trading below EMA50, decreasing the chances for the recovery.
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Gold price drifts higher to around $3,590 in Monday’s early Asian session.
Weak jobs data have fueled Fed rate cut bets.
The Chinese central bank bought gold in August for the 10th consecutive month.
The Gold price (XAU/USD) extends the rally to near $3,590 during the early Asian session on Monday. The precious metal edges higher near an all-time high as soft US jobs data further cemented expectations for a US Federal Reserve (Fed) rate cut later this month.
The US Nonfarm Payrolls (NFP) report on Friday showed a slowdown in hiring in August, while the Unemployment Rate rose to the highest level since 2021, confirming that labor market conditions in the world’s biggest economy are slumping. These reports boost Fed rate cut expectations, which provides some support to the precious metal price, as lower interest rates could reduce the opportunity cost of holding Gold.
Following the data, traders are now almost certain that the Fed will lower rates at its upcoming meeting on September 17, with an 84% chance of it being a 25 basis points (bps) cut and a 16% possibility of a more aggressive 50 bps reduction.
Additionally, rising demand from major central banks contributes to the upside. Official data showed on Sunday that the People’s Bank of China (PBoC) added gold to its reserves in August, extending purchases of bullion into a 10th straight month. China’s gold reserves stood at 74.02 million fine troy ounces at the end of August, up from 73.96 million at the end of July.
Traders will take more cues from the US Producer Price Index (PPI) for August, which is due later on Wednesday. If the report shows hotter-than-expected outcomes, this could boost the US Dollar (USD) and weigh on the USD-denominated commodity price.
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.
The British Pound has been all over the place during the trading session on Friday as risk appetite, is going to be all over the place as well.
When facing against the Japanese Yen, this is a risk on or risk off question.
I find it easy to simplify this pair, but really what I’m looking at is that the 200 Yen level has been very important.
Risk On/Risk Off
It’s easy to simplify this pair in the sense that people believe that if assets are going higher, the British pound should go higher. And if they’re falling, the Japanese yen should be falling. That being said, it is one of these situations where you are looking at a market that is just going to do what it’s going to do. It doesn’t do what it’s supposed to do.
I think a lot of traders are going to get into trouble with that. If we can break above the 201 yen level, then I think you get a bit of a short squeeze to the upside, and we could get really moving at that point. If we break down below the 198 yen level, then the 196 yen level could be a bit of a target for the downside. Keep in mind the 200 day EMA is at 195.22 yen and rising.
So that could offer a little bit of support as well. But ultimately, this is a market that I think is looking to perhaps In the short term, to at least go sideways. And then once we get a feel for how the global economy is, maybe make a move. For what it’s worth, though, we have been very resilient in our attempt to break above 200 yen. With this, I’m slightly positive, but I also recognize we need some type of event to get the markets moving like that.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
While tariffs and mining challenges dominate international copper headlines, the U.S. faces domestic supply pressures from theft. In California, Assembly Bill 476 was introduced to curb rampant copper wire thefts that have blacked out public infrastructure across Los Angeles. The bill, which passed committee by an 18-0 vote, would enforce stricter licensing for copper sellers, mandate reporting by recyclers, and revise penalties to reflect the full cost of damages. For utilities already squeezed by high copper prices, this legislation could provide a safeguard against mounting operational losses. The theft issue underscores how copper’s surging value, now flirting with all-time highs, has spilled into social and infrastructure vulnerabilities.
Strategic and Market Outlook
The convergence of a 50% U.S. tariff baseline, production disruptions in Chile, institutional repositioning in Brazil, and rising domestic theft in the U.S. has created a rare cocktail of volatility for HG=F copper futures. The divergence between COMEX at $13,000 per ton and LME prices under $10,000 shows just how fractured global copper pricing has become under tariff pressure. Investors must weigh whether these conditions justify further upside, or if the arbitrage window signals a corrective phase ahead. With Ero Copper beating on profits but facing selling from one of its largest institutional holders, and Capstone Copper balancing short-term operational strain against long-term project optimism, the equity side of the copper trade offers selective opportunity but rising risk.
Given the policy backdrop, copper’s outlook leans bullish in pricing but fragile in fundamentals. The tariff regime is poised to elevate costs across supply chains, but also incentivizes domestic investment. For investors in miners like FCX, ERO, and CS, the key question is whether operational execution can match market enthusiasm. At current levels, copper equities demand close scrutiny, with valuations likely to stretch further if tariffs translate into sustained price floors above $11,000 per ton on COMEX.
WTI and Brent Under Pressure as OPEC+ Shifts Strategy
The crude market has entered September with a decisive downturn. WTI (CL=F) slid to $61.87 per barrel, down 2.54%, while Brent (BZ=F) closed at $65.50, losing 2.22%. These levels mark a 12% decline year-to-date and bring both benchmarks dangerously close to technical thresholds that traders see as pivotal for the next major move. The catalyst this time is OPEC+, with Saudi Arabia and its V8 allies signaling additional production increases of 137,000 barrels per day starting next month, potentially lifting supply by as much as 1.65 million bpd over the coming quarters. The decision was unexpected; only a week ago, analysts projected output stability. Instead, OPEC+ is pursuing market share even at the expense of price stability.
OPEC+ Output Increase Raises Downside Risk
The message from Riyadh and Moscow is clear: short-term revenues are being sacrificed to weaken competitors and capture demand. Russia, facing heavy sanctions and tariffs from the U.S., has little choice but to monetize volumes even at discounted prices, while Saudi Arabia can lean on its low-cost production to endure prices closer to $60. This aggressive positioning has already pushed traders to reprice Brent toward $65 support. Should it break, technical projections point to a slide toward $60, mirroring the anticipated range outlined by the U.S. Energy Information Administration, which now sees Brent averaging $58 in Q4 2025. For WTI, the likely band is $58–$63, and a breach below $58 would trigger stop-driven selling.
Macroeconomic Weakness Adds to Oil Market Strain
The production story collides with fragile demand data. U.S. labor market figures show nonfarm payrolls grew only 22,000 in August, far below the 75,000 expected, while unemployment jumped to 4.3%, the highest in years. At the same time, continuing claims increased, leaving 7.4 million unemployed—already exceeding job openings at 7.2 million. Oil prices have historically tracked labor data closely because energy demand reflects industrial momentum. With consumer spending dampened by high services inflation—the ISM services price index hit 69.2%—oil traders are forced to price in recession risks alongside oversupply.
Technical Breakdown Suggests More Selling
Charts for both WTI (CL=F) and Brent (BZ=F) reinforce the bearish fundamentals. WTI has broken down from a symmetrical triangle that defined much of 2024 and early 2025, now trending decisively lower through the $61 zone. A break beneath $60 would confirm a longer-term downtrend and could accelerate losses toward $55, where the next support cluster resides. Brent’s structure is equally weak, trading consistently under the 50-day SMA with long upper shadows rejecting every test above $69.50. Momentum indicators, including RSI below 50, point to sustained selling pressure. Without a bullish reversal candle, such as a bullish engulfing or three white soldiers pattern, rallies will be sold into.
Geopolitics and Tariffs Shape Demand Outlook
President Trump’s trade policy has added another layer of volatility. Tariffs on India for Russian crude purchases put additional pressure on Asian importers to diversify away from Moscow, but it also raises landed costs at a time when consumption is slowing. European buyers remain divided, with Hungary and Slovakia still sourcing Russian oil, limiting the effect of U.S. sanctions. Meanwhile, Ukraine’s drone strikes on Russian refineries show that supply disruptions can flare unpredictably, but so far the net effect has been outweighed by OPEC+ production increases. China and India continue to secure cheap barrels, reducing the urgency to buy at higher global benchmarks, capping Brent’s upside.
Kolibri Energy Stands Out Amid Weak Pricing
The collapse in crude benchmarks is not uniform in its impact. Kolibri Global Energy (NASDAQ:KGEI) is demonstrating resilience even as market prices fall. The company reported Q2 2025 production of 3,220 boepd, up 3% year-over-year despite temporary shutdowns, and is guiding for a 24–32% surge in output during H2 2025 as nine new wells come online. Even with realized prices of just $47.06 per barrel, well below the WTI average of $63.63, Kolibri’s adjusted EBITDA reached $7.68 million for the quarter. Operating costs fell to $7.15/boe, down 16% from the prior year, showing scale efficiencies at work. At current forward production rates, EBITDA could hit $20 million in H2, giving Kolibri a forward EV/EBITDA multiple of 5.44, more attractive than the industry median of 5.99. Insider confidence is notable, with buybacks executed at $6.42 per share, well above the current $5.23 market price, signaling management’s belief in undervaluation.
Financial Stress and Fed’s Dilemma
Falling oil has macro feedback loops as well. Lower energy prices relieve some inflation pressure, giving the Federal Reserve room to cut rates. Futures now assign an 89% probability of a September cut, with some traders betting on 50 basis points. Yet financial cracks are emerging: Fed reserves have dropped below $3.2 trillion, credit conditions are tightening, and the Chicago Fed’s financial conditions index is signaling stress. Oil’s collapse is both a symptom and a trigger of these fragilities. If crude breaks $60 decisively, it may deepen the case for Fed easing, but also highlight global deflationary risks.
Buy, Sell, or Hold Verdict
The oil market has shifted from balance to oversupply narrative within weeks. WTI (CL=F) at $61.87 and Brent (BZ=F) at $65.50 are vulnerable to another 5–10% decline if OPEC+ barrels materialize and U.S. economic weakness persists. Technicals, fundamentals, and macro all point to bearish continuation. That makes crude a Sell at these levels until there is evidence of production restraint or demand recovery. For equities exposed to crude, integrated majors remain at risk, but niche producers like KGEI offer relative protection with efficient cost structures and insider conviction. The broader energy complex, however, will remain under pressure unless Brent stabilizes above $65 and WTI reclaims the $63–$65 zone.
The GBP/USD pair reclaimed ground above 1.35 after U.S. labor market numbers showed only 22,000 new jobs in August, far below expectations of 75,000. The unemployment rate rose to 4.3%, its highest since 2021, while wage growth held at 0.3% month-on-month. Treasury yields fell sharply, the dollar weakened, and traders shifted almost fully toward pricing in a Federal Reserve rate cut on September 17. Some are now betting on as many as three cuts before year-end, contingent on softer inflation data. The CPI release on September 11 and PPI a day earlier will be pivotal, alongside UoM sentiment on September 12, as they set the backdrop for the Fed’s decision.
UK Data Provides Sterling with Tailwind
Recent UK figures gave the pound resilience. July retail sales rose 0.6% month-on-month, beating forecasts of 0.3%. Net lending to individuals jumped £6.1 billion compared with £4.9 billion expected, while final services PMI hit 54.2, above the preliminary 53.6. These numbers reinforced the case for a consumer-driven rebound, though traders remain cautious amid fiscal uncertainty. Political reshuffling under Prime Minister Starmer and questions over fiscal discipline continue to hang over sentiment, with Deputy PM Raynor’s resignation raising expectations of Treasury changes.
Technical Outlook for GBP/USD Levels
The GBP/USD chart shows a bullish structure, with price advancing to 1.3506 and reclaiming both the 50-day SMA at 1.3446 and the 200-day SMA at 1.3464. Resistance is clustered between 1.3540 and 1.3588, followed by a major test at 1.3595–1.3600. A breakout above these thresholds could open the door to 1.3660. Support sits in the 1.3435–1.3460 zone, with a failure there exposing 1.3417 and possibly 1.3300. Momentum indicators, however, are flashing caution. RSI is at 64.9, approaching overbought territory, while candlesticks near 1.3550 show long upper wicks, a potential reversal sign. A bearish divergence is forming between price and RSI, suggesting risks of a pullback.
Macro Catalysts That Could Drive GBP/USD
The pound’s near-term path will depend on U.S. macro data. September’s CPI is expected at 0.3% month-on-month and 2.9% year-on-year. If inflation undershoots, Fed cuts are likely to accelerate, lifting GBP/USD toward 1.36 and beyond. Conversely, stronger prints would re-energize the dollar, pressuring the pair back toward 1.34. Political risk in the UK also cannot be ignored. Analysts at Capital Economics warned that fiscal missteps could trigger bond market stress, noting that historical fiscal crises in Britain often came from changes in perceptions or leadership rather than immediate data.
Positioning and Market Sentiment
CFTC data shows speculative net short positions on GBP widened slightly to –33,100 from –31,400 the prior week, indicating traders still doubt the sustainability of sterling gains. Yet the pair’s ability to close above 1.35 despite negative positioning highlights demand from real money accounts and hedging flows. Options markets are also pricing higher implied volatility into September, reflecting the binary risk of Fed cuts and UK fiscal headlines.
Verdict on GBP/USD
The balance of risks favors further upside in GBP/USD if U.S. inflation data supports the Fed’s dovish tilt. A sustained daily close above 1.3545 would strengthen the bullish case, while a rejection at resistance paired with strong U.S. data could quickly drag the pair back toward 1.3417. At 1.3506, the setup argues for a short-term buy bias with tight stops, but traders must be ready for sharp swings around U.S. data and UK political announcements.
Natural Gas (NG=F) Price Anchored at $3.07 as Storage, Weather, and European Inventories Shape Outlook
The natural gas market sits at a precarious juncture with Henry Hub benchmarks climbing to $3.07 per MMBtu, up 18 cents on the week, while futures on the NYMEX closed marginally lower at $3.542 per MMBtu after a volatile session. The U.S. Energy Information Administration reported an injection of 46 Bcf into storage, bringing inventories to 3,052 Bcf, a level 178 Bcf above the five-year average but 156 Bcf below last year. This duality—ample storage relative to seasonal norms but lagging year-over-year—underscores why traders remain cautious ahead of peak heating demand in Q4. Analysts argue that persistent heat across key U.S. consuming regions should slow the pace of injections, setting up tighter balances into winter.
European Inventories at Risk as Supply Constraints Intensify
Across the Atlantic, the natural gas story is starkly different. European storage sits at the lowest level since 2021, with inventories 16% below last year. This deficit stems not only from reduced imports but also weaker renewable generation, echoing the dynamics of the 2021–2022 crisis. Europe now relies on Norway and the U.S. for roughly half its imports after cutting Russian flows, but Norwegian gas output is forecast to shrink by 12% by 2030. U.S. output, meanwhile, is expected to plateau through 2026 according to EIA forecasts. These constraints elevate the risk that a cold winter or another renewable generation shortfall could trigger a repeat of the 2022-style price surge, forcing Europe to bid up LNG cargoes in competition with Asia.
NG=F Technicals: Resistance, Support, and Speculative Positioning
Technically, NG=F is trading in a fragile upward channel. Immediate support sits at $3.00, with stronger downside risk if prices close below $2.84, the 50-period EMA. Resistance is clustered at $3.20–$3.25, where repeated failures since early August have capped rallies. Futures open interest has contracted sharply, falling from $10.94 billion in late July to $7.4 billion, highlighting declining retail participation. However, funding rates remain positive at 0.0083%, signaling leveraged long bets persist. This divergence suggests natural gas is vulnerable to sharp swings—an OI contraction limiting bullish momentum, but a positive funding structure leaving the door open to upside spikes.
Equinor (NYSE:EQNR) and European Exposure to Gas Volatility
Equinor, Europe’s largest natural gas provider, is uniquely positioned in this environment. First-half 2025 net income slipped 13% to $3.95 billion, mirroring oil price declines, but upstream output leaned increasingly toward gas. Equinor maintains a forward P/E of just 8, well below peers like Chevron at 20, and has committed to $5 billion in share buybacks—about 8% of its $63 billion market cap. With dividends significantly above industry averages, Equinor’s equity serves as a leveraged play on any European gas crisis. If inventories tighten further, EQNR’s stock could mirror the 2021–2022 doubling in share price, while buybacks mitigate downside. Yet, exposure to renewables remains a drag: losses of $72 million in Q2 from offshore wind reflect the cost pressures tied to diversifying away from hydrocarbons.
Natural Gas Services Group (NYSE:NGS) Insider Activity and Buyback Plans
On the U.S. side, midstream and service companies provide another angle. Natural Gas Services Group (NYSE:NGS) recently announced a $6 million buyback program after reporting Q2 EPS of $0.41, beating estimates by $0.09 on revenue of $41.38 million. Net margins of 10.92% and ROE of 7.21% confirm operational strength in a volatile environment. Institutional ownership stands at 65.62%, with hedge funds like Rice Hall James and Associates boosting stakes. Insider transactions add intrigue: Director Jean K. Holley purchased 3,752 shares at $26.58—a 92.69% increase in personal holdings—while Director Stephen Taylor sold 10,000 shares at $27.00, reducing his stake to 403,334 shares. This mixed insider flow reflects both board confidence in undervaluation and some profit-taking after a run toward $29.74, the 12-month high. With shares currently at $27.11, analysts maintain a consensus buy rating and a $32.50 price target.
Macro Backdrop: U.S. Exports, Demand Destruction, and Weather Risks
U.S. exports remain a critical balancing force, with LNG flows increasingly tied to Europe’s shortfall. Yet, domestic demand destruction is evident. Industrial and residential consumption has been suppressed by higher prices, with households reducing winter heating and summer cooling. This dynamic puts a ceiling on how high prices can sustainably move without provoking another wave of demand erosion. Meanwhile, weather models remain the largest unknown. A repeat of the weak renewable output that crippled Europe in 2024 could send NG=F above $5.00 per MMBtu, while a mild winter would keep balances comfortable around $3.00–$3.25.
Verdict: Natural Gas Outlook – NG=F Buy, Hold, or Sell?
With NG=F at $3.07, European inventories at risk, and U.S. storage only modestly above seasonal averages, the setup leans bullish into winter. Technical charts highlight resistance at $3.25 and then $3.50, while institutional accumulation of gas-focused equities like EQNR and NGS confirms positioning for upside. Insider buying in NGS and Equinor’s aggressive buybacks strengthen that thesis. However, falling open interest warns that speculative appetite is thinning, and any mild weather shock could unwind gains rapidly. On balance, natural gas remains a buy into Q4 volatility, with tactical stops placed below $2.80 to hedge against an inventory-driven downturn.
USD/JPY Struggles Near 147 as U.S. Labor Market Weakens
The USD/JPY pair closed the week at 147.34 after swinging between 146.78 and 149.13. Softer U.S. labor market data pushed the dollar lower on Friday, with nonfarm payrolls and unemployment revisions reinforcing bets on Federal Reserve rate cuts. A break under 146.81 briefly pressured the pair, though buyers defended support into the close. The pair now sits above the 50-day EMA but capped below the 200-day EMA, leaving traders watching whether the next move is toward the 145.00 handle or back to 150.00.
Japanese GDP and Producer Prices Set Tone for Yen Strength
Finalized second-quarter GDP showed 0.3% quarter-on-quarter growth, helped by a 0.8% rebound in external demand despite U.S. tariffs. Private consumption rose 0.2%, signaling steady domestic momentum. Japan’s record minimum wage hike of 6.3% to ¥1,121 boosts inflation expectations, intensifying speculation that the Bank of Japan may tighten policy as early as October. Producer price data due September 11 is forecast at 2.7% year-on-year, up from July’s 2.6%. A stronger print could cement expectations of a rate hike and drive USD/JPY closer to 145.
Fed Policy Outlook Hinges on CPI and Jobless Claims
Markets are pricing in a 99% chance of a 25-basis-point cut in September, with U.S. inflation projected at 2.9% for August versus 2.7% in July. Initial jobless claims are expected to tick up to 240k from 237k, signaling labor market cooling. Softer CPI and higher claims could accelerate rate cut expectations, weakening the dollar. In contrast, hotter inflation data could ease selling pressure and hold USD/JPY above 147.
Trade and Tariff Developments Add New Volatility Layer
President Trump’s tariff cut on Japanese autos from 27.5% to 15% gave yen traders another factor to weigh. Auto exports had fallen 27% year-on-year in July, raising recession fears. The tariff reduction should support exports and improve Japan’s trade terms, but if U.S. consumption weakens, the benefit may be limited. The policy shift nevertheless adds a bullish undertone for the yen as trade tensions ease slightly.
Technical Levels Define Risk Zones for USD/JPY
Immediate resistance for USD/JPY sits at the 200-day EMA near 149.35, with a breakout exposing the August high at 150.91. On the downside, support rests at 146.21, followed by the psychological 145.00 level. RSI momentum has flattened, suggesting indecision as markets await fresh catalysts. A decisive daily close below 146.20 could invite stronger yen buying, while holding above 147.50 would encourage a retest of 150.
Regional Disruptions and Domestic Policy Add Complexity
Ukraine’s drone attacks on Russian refineries, Iran’s rejection of GCC claims over disputed fields, and Iraq-Turkey pipeline tensions underscore the fragility of Middle Eastern and Eurasian supply chains. In North America, Saskatchewan is grappling with budget shortfalls due to overestimating oil prices at $71 per barrel, when the market is actually closer to $61. That $10 gap has left the province exposed to a potential $180 million shortfall, underlining how government revenues remain hostage to volatile energy markets.
Technical Levels for WTI and Brent Signal Bearish Bias
On the charts, CL=F WTI crude faces resistance near the 200-day moving average, with upside capped until prices reclaim the $63.50–$64.00 zone. Immediate support lies near $60, with a breakdown below that level risking a move toward $58. BZ=F Brent crude is locked under $66.00 resistance, with sellers pressing toward $64.00. Analysts warn that without a fresh bullish catalyst such as an unexpected supply disruption or stronger demand rebound, oil prices could remain under pressure into mid-September.
Investor Outlook: Bearish Tilt Until Fundamentals Shift
With U.S. production holding at 13.2 million barrels per day and OPEC+ considering additional output, the balance of risk remains tilted lower. The demand side is hampered by weak U.S. job growth, slowing European economies, and uncertain Chinese industrial demand. Unless geopolitical shocks remove barrels from the market, both WTI (CL=F) and Brent (BZ=F) look vulnerable to further losses. Traders are eyeing the OPEC+ meeting closely, as any decision to push more supply could accelerate the move toward sub-$60 levels for WTI.
EUR/USD Tests 1.17 as Fed Cuts Loom and ECB Holds Steady
The euro-dollar pair (EUR/USD) finished the week at 1.1717, up from earlier lows after U.S. labor market data came in far weaker than forecast. Nonfarm payrolls in August added only 22,000 jobs versus 75,000 expected, while June revisions showed a 13,000 contraction, the first negative print in four years. The unemployment rate climbed to 4.3%, matching the highest level since late 2021, and manufacturing jobs are down 78,000 year-to-date. These signals have markets fully pricing a 25-basis point Fed cut on September 17, with traders debating whether the move could be as aggressive as 50 points.
Technical Landscape: Symmetrical Triangle and Key Levels
EUR/USD has been locked in a tightening range with higher lows and lower highs forming a symmetrical triangle. Support holds at 1.1663 (50-day SMA), while the resistance cluster sits at 1.1741–1.1788. A daily close above 1.1741 would confirm a bullish breakout, opening a path toward 1.1828–1.1850, levels aligned with major liquidity pools. Failure to clear those barriers risks sending the pair back toward 1.1613 and possibly 1.1573. For now, Friday’s high near 1.1760 reflects that bulls are testing conviction, but the candles reveal indecision with dojis and mixed closes. RSI at 55.8 signals mild bullish momentum without tipping into overbought territory, leaving scope for continuation if buyers step in at retracement levels.
Fed vs. ECB: Diverging Policy Paths Shape the Outlook
The Federal Reserve is under pressure to cut rates amid slowing job creation and cooling demand indicators. U.S. CPI data due September 11 is expected at 0.3% month-over-month and 2.9% annually, which could decide whether the Fed signals a series of cuts extending into October and December. By contrast, the European Central Bank is expected to hold rates steady at 2.0–2.15%, with President Lagarde signaling caution on inflation despite sluggish eurozone growth. Germany continues to underperform, France is battling fiscal pressures, and eurozone inflation readings remain slightly higher than expected, leaving the ECB constrained. The result is a widening divergence: the Fed leaning dovish while the ECB hesitates, a mix that structurally supports EUR/USD in the near term.
Market Sentiment: Positioning Around 1.1700
For much of August, 1.1700 served as an inflection point, repeatedly tested as both support and resistance. Traders view this level as pivotal: maintaining closes above 1.1710 builds confidence in sustained bullish pressure, while failure reopens the downside risk zone. Sentiment data suggests institutions are beginning to lean into a stronger euro, expecting that the Fed’s dovish tilt will weaken the dollar, though concerns over tariffs and inflation still temper enthusiasm.
Short-Term Trading Scenarios
If EUR/USD holds above 1.1710 and pushes through 1.1748, buyers may accelerate toward 1.1790–1.1828, the first true breakout zone since July’s highs near 1.1830. In contrast, rejection at resistance would likely see short-term profit-taking back to 1.1686, a 76.4% Fibonacci retracement that aligns with the prior swing structure. Breaching 1.1613 would be the real inflection for bears, potentially shifting the narrative from consolidation into outright reversal, with 1.1550–1.1500 as deeper downside liquidity targets.
Macro Catalysts This Week
The coming calendar is stacked with pivotal releases. On Sept. 10, U.S. PPI will give an early read on wholesale inflation pressures. On Sept. 11, the ECB announces policy, followed immediately by U.S. CPI, creating a potential double catalyst. On Sept. 12, the University of Michigan’s sentiment and inflation expectations survey will help assess household inflation psychology. In Europe, weak GDP prints from Germany and France continue to weigh on investor confidence. Meanwhile, political tensions and tariff risks remain a wildcard for both currencies, likely to add volatility around key technical levels.
Verdict: EUR/USD Bias Turns Bullish With Risks of Pullback
With Fed cuts now fully priced and the ECB reluctant to ease, the bias for EUR/USD leans bullish, targeting 1.1740–1.1780 in the near term, with a stretch goal of 1.1828–1.1850 if momentum holds. However, failure to defend 1.1700 would invite sharp pullbacks toward 1.1660–1.1610. Given the technical triangle structure, macro divergence, and dovish Fed bets, the outlook tilts in favor of euro strength, but traders must brace for volatility around U.S. inflation data. At current levels near 1.1717, EUR/USD is best rated as Buy on dips, with tactical entries favored above 1.1685 and protective stops below 1.1607.
