The U.S. Dollar Indexis currently trading at 99.23 on the 2-hour chart after dropping below the recovering channel from the August lows. What is interesting is how quickly the index was rejected at the 99.80 – 99.86 range. DXY lost 99.62, 99.48, and 99.35 very quickly, which shows how much the structure of the bullish recovery has weakened.
The first area I will be watching is 99.12, as the downwards support zone begins there. Breaking below this would expose 98.90, 98.72, and 98.56. In the opposite direction, looking at the previous support zone of 99.35 – 99.48 and adding 99.62, the resistance zone starts to form there.
RSI has dropped and begun to enter oversold territory, so a bounce in the index is possible, but I also believe that the DXY will drop furtherwhen trading below the 99.48 range. I will reverse that opinion if the index breaks above the 99.62 range, but I believe the rallies will be corrective in nature rather than a strong downtrend.
Fed Governor Christopher Waller cooled hopes for a September interest rate hike.
The United States will publish the August Nonfarm Payrolls report on Friday.
XAU/USD is up for a second consecutive day; bulls regained near-term control.
The US Dollar (USD) remains under selling pressure on Thursday, as investors juggle with risk-related headlines and little guidance from macroeconomic data. Spot Gold benefited from broad USD weakness and surpassed the $4,500 level during American trading hours.
The USD traded with a firmer tone at the beginning of the week after the United States (US) and Iran resumed hostilities, sending Oil prices sharply up and hence raising concerns about mounting inflationary pressures. The Greenback, however, came under pressure mid-week amid speculation that the Bank of Japan (BoJ) intervened in the currency market to prevent the Japanese Yen (JPY) from falling further.
A better market mood kept the USD pressured despite the Middle East conflict. On the one hand, speculative interest welcomed headlines indicating that Russian President Vladimir Putin said there is a chance for constructive peace talks with Ukraine.
Finally, Federal Reserve (Fed) Governor Christopher Waller cooled the odds for a September rate hike, saying that officials can “wait one meeting,” as long as there are no surprises from upcoming inflation data, adding that a 25 bps hike won’t bring inflation back to 2%.
Data that can shape the upcoming Fed’s decision is around the corner: On Friday, the US will publish the August Nonfarm Payrolls (NFP) report, a picture of the situation in the labor market, while next week, the country will unveil the Consumer Price Index (CPI) for the same month.
XAU/USD Technical Outlook:
In the four-hour chart, XAU/USD turned bullish as it moved above the 20-period Simple Moving Average (SMA) at $4,397.48, the 100-period SMA at $4,481.65, and the 200-period SMA at $4,315.95. The moving averages are pretty much horizontal, failing to provide clear directional clues. Still, the price holding above them skews the risk to the upside. Technical indicators, in the meantime, gain upward traction above their midlines, maintaining nice vertical slopes, a sign of strong buying interest.
The XAU/USD pair daily chart keeps a constructive near-term tone as it holds above both the 20-day SMA at $4,462.49 and the 100-day SMA at $4,358.36. The Relative Strength Index (RSI) indicator ticks north at around 56, while the Momentum indicator also holds in positive territory, suggesting steady, rather than exuberant, upside pressure.
On the downside, immediate support is seen at the 100-period SMA at $4,481.65, followed by the 20-period SMA at $4,397.48 and then the 200-period SMA near $4,315.95. On the topside, the 200-day SMA at $4,533.34 forms the next significant resistance, and a sustained break above this barrier would likely open the door to further gains.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Westpac analysts expect USD/JPY to test 162 in September before retreating to 154 by end-2027 and 146 by the end of 2028.
The US Dollar to Japanese Yen (USD/JPY) exchange rate slipped to 159.6004 on Wednesday, leaving Westpac’s September forecast target of 162 around 1.5% above spot.
USD/JPY had climbed as high as 160.3872 during the previous 48 hours before reversing sharply, while the daily decline reached 0.37%.
The chart above shows the pair giving back its advance through 160.30 and finishing near the bottom of its 159.4938-160.3872 range.
Westpac’s September call is effectively for one more test higher rather than an unprecedented breakout.
The pair traded as high as 163.9798 in July, so 162 has already proved reachable this summer.
What follows in Westpac’s forecast curve is far more interesting.
The bank sees USD/JPY easing to 160 in December and remaining there in March 2027, before falling to 158 in June, 156 in September and 154 at the end of next year.
The decline then continues at a remarkably steady pace: 152 in March 2028, 150 in June, 148 in September and 146 in December.
From the forecast peak of 162 to the final 146 target, that would be a 9.9% fall in USD/JPY and an appreciation of almost 11% for the Yen against the Dollar.
The Yen recovery is not built on aggressive Fed cuts
Westpac’s accompanying interest-rate forecasts make the currency path more striking.
The bank keeps the Federal Funds rate at 3.625% throughout the forecast period, rather than relying on a sizeable US easing cycle to pull USD/JPY lower.
It also expects the US 10-year Treasury yield to ease only modestly, from 4.65% in September to 4.55% in the first half of 2027.
The yield then rises gradually to 4.85% by December 2028, precisely when USD/JPY reaches 146.
In other words, Westpac is forecasting a major Yen recovery without a lasting collapse in US yields.
The published figures do not include a separate Japanese interest-rate path or written explanation for the move, so it would be wrong to assign the decline to one specific catalyst.
Still, the curve fits a market increasingly focused on whether Japanese policy can take over from direct currency support.
As we noted in our recent Yen analysis, intervention can deliver an abrupt move but has struggled to overcome the interest-rate gap for long.
Westpac’s numbers instead describe a slow adjustment lasting more than two years.
These are dated forecast points rather than promised trading stops, but the message is unusually clear: 162 may come first, while the bigger move is eventually lower.
Friday’s Japanese household-spending figures and US employment report provide the next test, with Westpac forecasting a 70,000 rise in payrolls against a market estimate of 55,000.
Exchange Rates UK Research
Our currency coverage draws on live market data, official economic releases and published bank research.
Natural gas price benefited from the repeated positive pressures by breaching the barrier at $2.920, confirming the continuation of the bullish corrective scenario, approaching the initial target at $3.050.
In general, the stability above $2.620 support and providing bullish momentum by the main indicators will increase the efficiency of the bullish trend in the current trading, to expect the attempt of recording extra gains by its rally towards $5.200 and $3.380.
The expected trading range for today is between $2.950 and $3.200
The GBPJPY pair formed a sharp decline yesterday, affected by the repeated negative pressures, surpassing the previously waited targets by reaching 214.95 level, to settle near 212.35 level as appears in the above image.
Providing extra negative momentum by stochastic makes us expect attempting to break 211.45 support, which represents a confirmation key for the main trend in the upcoming trading, breaking this support will confirm the continuation of the negativity, to expect forming the next target at 210.25 level, while holding above it will provide a chance for recovering the losses and forming new bullish waves.
The expected trading range for today is between 211.50 and 214.25
Gold (XAU/USD) is trading higher on Thursday, returning to levels above $4.400 after bouncing from three-week lows near $4,280 on Wednesday. The precious metal is drawing support from a weaker USD, as ADP employment data disappointed and New York Federal Reserve (Fed) President John Williams tamed rate hike expectations, but Fed tightening bets remain solid, and bulls are likely to face significant resistance at $4,470.
US Data released on Wednesday revealed that private employment rose 38K in August, the weakest reading since January and well below the 47K increase expected.
Apart from that, New York Federal Reserve President John Williams said that rising bond yields are due to a solid economy, rather than to inflation fears, and suggested that the central bank should “wait and see” before taking decisions on interest rates. This cooled hopes of an immediate rate hike, although futures markets are still pricing a 60% chance of a 25 basis point hike at September’s meeting, according to the CME’s FedWatch Tool.
Technical Analysis: Gold bulls have significant resistance ahead
XAU/USD has bounced up from lows and is trading returning to the $4,430 area, but keeps a mildly bearish near‑term tone following an impulsive reversal from last week’s highs near $4,700. Momentum indicators are in neutral territory, with the daily Relative Strength Index (14) at 52 and the Moving Average Convergence Divergence (MACD) below zero, which shows that the bullish impulse is fragile.
Gold bulls are likely to be tested at the August 31 high, near $4,470, and, above here at the key 200‑day Simple Moving Average (SMA) at $4,533, which closes the path to last week’s high, at $4,690. On the downside, a break of the August 14 low in the $4,310 area confirms a “Head and Shoulders” pattern, and adds pressure towards the August 6 low of $4,220 and the late July lows near $4,000.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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.
This currency pair has spent recent months rewarding traders who were prepared to buy dips, but the market is beginning to look much less comfortable with that familiar pattern as the US Dollar stays strong.
The recent move lower is starting to look more convincing, with Sterling now not one of the stronger major currencies. This shift in the market’s perception of the British Pound may be the catalyst, combined with technical changes, that make this currency pair worth paying more attention to over the coming days.
The good news for traders is that the GBP/USD looks like it may behave very respectful of technical factors, which might make it interesting to trade now.
Why GBP/USD Is Bearish as Dollar Strength Returns
Both currencies can be seen as relatively strong and weak, with the US Dollar reasserting its earlier strength and starting to move more decisively higher. However, this will not be truly decisive until the US Dollar Index get established above the big round number at 100, which looks likely to be a pivotal point.
There is major US data due this week – average earnings and NFP – which could also give the relative value of the US Dollar a big push. In these cases, “accidents often happen along the line of least resistance”, so a trend can get a nice tailwind from a surprise.
Finally, technical factors are looking very strong and decisive, with some obvious lines in the sand which traders can use to gauge the picture.
GBP/USD Technical Analysis: Key Resistance at 1.3520
The price action has been decisively bearish for over one week now, ever since the price failed to break out to a new six-month high price above 1.3650 and began moving lower with a series of orderly breakdowns which flipped support to become new resistance levels. There has not even been one single true higher low in this entire movement until a few hours ago, and the early and light status of that makes it highly questionable.
Another factor which adds to the convincing nature of this bearish leg is the way this price action can almost completely be captured by a linear regression analysis study, which can be seen within the price chart below. When this feature can be drawn to make a price channel symmetric, it tends to be more reliable.
The standout support or resistance level which looks as if it could be pivotal today is the resistance overhead at 1.3520, which might extend as high as 1.3530 and will be confluent with the upper trend line of the descending price channel for most of the rest of today.
The Blind Spot: Why the Short Case May Not Be Straightforward
The blind spot here may be an over-reliance on technical analysis. As a technical analyst, today’s chart of this currency pair jumps out as having meaningful indications. This probably makes me overconfident that a bearish scenario will play out over the near term.
Unless there is a major and unscheduled surprise from the Bank of England or even the European Central Bank, it is difficult to see what I might be missing, except maybe the tension between the USA and Iran escalating after the countries traded military blows yesterday. However, the situation seems to have de-escalated in recent hours, with no new US attacks last night. It is conceivable a Fed member might say something that is interpreted as dovish which could trigger a minor US Dollar selloff.
Risks to the Bearish GBP/USD Outlook
I see the dream scenario here for traders, especially day traders, is to hope for a retracement to the 1.3520 level which tests that area which rejects it forcefully – this could be a very good short trade entry signal.
Taking 1.3520 as the likely pivotal point, an alternative scenario will likely play out if the price can get established above that level today, which will open the door to a rise to 1.3554 – this 1.3550 has also recently acted as a very pivotal area, so this resistance level might play a significant role in what happens after that.
GBP/USD is worth watching because it is making a technical steady bearish move which is supported by fundamental, sentimental, and most of all technical indicators. If it continues moving lower, it has a long way to fall while remaining within its dominant range, suggesting there could be a good opportunity to get involved on the short side, although that moment might well not be arriving today. Alternatively, the pair may surprise, if the first potential lower high we saw form within recent hours produces an impulsive bullish move which breaks the resistance level at 1.3520.
Platinum price ended the last corrective decline by its approach from the support level of $1695.00, to begin forming bullish waves, announcing the continuation of the previously suggested bullish scenario, fluctuating near $1780.00 level.
The price might be forced to provide some sideways trading until gathering bullish momentum to surpass the 55-moving average at $1800.00, to begin targeting several positive stations by its rally towards $1860.00 and $1910.00.
The expected trading range for today is between $1730.00 and $1860.00
The US dollar continues to see a lot of back-and-forth motion against the yen, as we are sitting at a major inflection point, and waiting for the jobs report.
USD/JPY
The US dollar continues to see a lot of back-and-forth trading against the Japanese yen as the interest rate differential continues to play out. This carry trade position has been one that I have been involved in for some time now, and we find ourselves hanging around the crucial 50-day EMA, an area that a lot of technical traders will pay a certain amount of attention to.
The 160 yen level seems to be a bit of a magnet for price as well, but it is worth noting that interest rates in America continue to climb, and that only widens the overall carry trade prospects. With this, the market will continue to be noisy, but it is probably also worth noting that we have the jobs number coming out on Friday, and that tends to be a big mover of this USD/JPY currency pair overall.
50-Day EMA, 160 Level, and Intervention Risks
I do not like the idea of shorting this pair, mainly because I just don’t want to own the Japanese yen. The Japanese yen has been beaten up pretty significantly, and with good reason, as the Japanese are essentially stuck with their monetary policy being ultra-loose.
In this environment and the fact that energy inflation continues to be a major problem, it is just difficult for me to see how the Japanese yen continues to find any footing outside of intervention. There are intervention risks here, obviously, as we have seen quite a bit of intervention over the last several months, but at the end of the day, intervention only slows down what is going on in a market. It very rarely turns things around.
The jobs number on Friday will be parsed, and it will be very important to pay attention to, but I also recognize that the overall trend is still the same. It is still bullish for the US dollar and bearish for the Japanese yen. I like buying dips.
Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions
As seen on:Pairs Of Aces Podcast,The Trader Guy, FXEmpire
Spot gold is edging higher Wednesday after rebounding from an early session setback. The main trend changed to down earlier today when sellers took out the swing bottom at $4,311.04, but new buyers may have emerged on the test of a key retracement zone.
The long-term range is $3,942.10 to $4,697.11. Its 50% to 61.8% retracement zone is $4,319.60 to $4,230.51. Today’s rebound came from a trade to $4,282.62, which fell inside the zone. To some traders, this is a value zone.
Adding to concerns about heightened volatility is the fact that Spot gold is trading under 200-day moving average resistance at $4,530.71 and nearing 50-day moving average support at $4,222.93.
The early price action suggests trader reaction to the 50% level at $4,319.60 will determine the direction of the market into the close. A sustained move over this level could lead to a strong rally into the close, while failure to hold it would put the $4,230.51 to $4,222.93 support cluster back on the radar.
What to Watch
The rate trade stays pointed against gold until the data changes it. Warsh and Barr both said this week the Fed has more work to do. The 10-year pulled back from 4.814% but is still near a multiyear high. The dollar index is at 99.67. Crude is above $90 WTI and near $95 Brent. The geopolitical bid from the Middle East conflict is going to the dollar, not the metal. Friday’s payrolls report at 56,000 expected is the number that can either keep the 68% September odds in place or force a repricing. The rate pressure holds until a soft jobs number gives buyers a reason to step back in.
Gold bounced from $4,282.62 inside the long-term retracement zone at $4,319.60 to $4,230.51. The main trend turned down Wednesday when sellers took out $4,311.04. The 200-day moving average at $4,530.71 is resistance above. The trade stays bearish while gold sits under $4,319.60. A close above that level is the first sign value buyers are taking over. A break through the 50-day at $4,222.93 opens the support cluster down to $3,942.10. The 200-day break from Friday is still the damage running this market. Wednesday’s bounce has not undone it.
If you’d like to know more about how to trade gold, please visit our educational area.
