Gold (XAU/USD) remains on the back foot on Thursday, unable to build momentum despite a softer US dollar and falling Treasury yields in the wake of fresh US inflation data. The yellow metal, which briefly touched a record high near $3,675 earlier this week, is now consolidating around $3,630 per ounce and struggling to attract meaningful new buying interest. The retreat highlights investor caution ahead of a highly anticipated Federal Reserve policy decision next week, which could set the tone for bullion in the months ahead.

The latest inflation print offered a mixed picture. The US Consumer Price Index (CPI) climbed 0.4% month-on-month in August, above the 0.3% forecast and quickening from July’s 0.2% pace. On an annual basis, headline inflation held steady at 2.9%, matching expectations but marking an uptick from the 2.7% seen previously. More importantly for policymakers, the Core CPI—excluding volatile food and energy—rose 0.3% MoM and 3.1% YoY, exactly in line with consensus and unchanged from July.

The data suggest inflation remains sticky enough to prevent the Fed from easing aggressively, but not hot enough to derail the broader disinflation narrative. That nuance explains why gold has failed to extend its breakout: while inflation data reinforces the likelihood of near-term rate cuts, it also tempers the scale of market bets on deeper or faster easing.

Adding to the complexity is a stream of softer US economic readings. Recent Producer Price Index (PPI) data undershot forecasts, while the August Nonfarm Payrolls report disappointed with slower job creation and downward revisions to prior months. The unemployment rate also ticked higher, painting a picture of a labor market that is cooling more quickly than the Fed would like. Together, these releases have bolstered the case for policy easing, with futures markets fully pricing in a 25 basis-point cut next week and even leaving room for as many as three cuts before year-end.

That outlook provides a cushion for gold. Lower interest rates generally reduce the opportunity cost of holding non-yielding assets such as bullion. However, with the metal already trading near record highs, investors appear hesitant to chase prices higher until they see clearer signals from policymakers.

Gold’s performance this week illustrates the uneasy balance between short-term profit-taking and long-term structural demand. On one hand, central banks and sovereign buyers continue to accumulate gold as a hedge against currency debasement and geopolitical instability. On the other, speculative flows are increasingly tied to day-to-day shifts in Fed rate expectations, making the metal vulnerable to corrections when economic data delivers surprises.

The current price action feels less like a rejection of gold’s bullish story and more like a pause. If the Fed confirms a dovish tilt next week, a retest of $3,675 and potentially $3,700 is likely. Conversely, any indication that the central bank intends to move cautiously—or that inflation risks remain unresolved—could trigger a deeper correction, potentially back toward the $3,600 region.

On the charts, gold is showing signs of consolidation after its parabolic rally earlier this week. Prices have formed a descending triangle pattern following the sharp push to $3,674, a setup often associated with bearish continuation. The yellow metal has also retreated in intraday trading, as it searches for a higher low that could serve as a base for the next leg upward.

Momentum indicators are sending mixed signals. The Relative Strength Index (RSI) has eased from overbought conditions and is now flashing positive overlaps, suggesting that downside momentum may be fading. This supports the view that sellers are losing steam, though confirmation will require a decisive breakout from the current range.

Given the illustrated setup, traders should watch the demand zone around $3,600 closely. A break below this level could open the door for a deeper retracement, possibly toward $3,580. On the flip side, sustained buying above $3,640 would undermine the bearish triangle and shift focus back toward $3,675 and beyond.

SELL GOLD

ENTRY PRICE: 3630

STOP LOSS: 3680

TAKE PROFIT: 3580

Recently, USDJPY movements have been driven by three key factors:

Firstly, Japanese political uncertainty. The unexpected resignation of the Prime Minister and the ensuing LDP leadership transition have raised concerns over fiscal and monetary policy direction. This has temporarily weakened the yen's safe-haven appeal, putting downward pressure on the currency and driving USDJPY higher.

Secondly, gradual signals of monetary policy normalization from the Bank of Japan (BoJ). Officials have hinted at entering the "final phase" of balance sheet reduction and ETF sales. If implemented, this would be structurally bullish for the yen over the long term, though the timing and pace remain subject to political variables.

Thirdly, U.S. Treasury yields and Fed outlook. The 10-year U.S. yield has recently hovered around 4.08%, while shifting market expectations for Fed rate cuts have heightened volatility in short-term rates and dollar sentiment. A further decline in yields could weigh on the USD and support JPY against non-USD crosses.

In summary, the yen faces near-term weakness due to political shocks. However, confirmation of the BoJ's normalization path could become a critical headwind for the mid-term gains of USDJPY. Concurrently, synchronized moves in U.S. yields and the DXY may amplify directional breaks in either direction.

On the daily chart, USDJPY's recent price action shows a sequence of successively higher highs and lows, tracing out a well-defined ascending channel. This configuration implies that the near-term bias remains tilted to the upside. Within the moving-average complex, the short-term stack is aligned in a bullish sequence and the SMA144 is curling higher, reinforcing near-term upside momentum.

On the upside, USDJPY is confronted with a critical resistance at 149.00. A forceful breakout and sustained close above this level would open extension room for further upside, targeting the prior high of 150.90 and, subsequently, the upper bound of the ascending channel.

Downside risks emerge on a decisive breach of the 147.10 support. Such a move would expose the next cushion at 146.30. A break below 146.30 would confirm a bearish trend reversal in the near term.

Trading Direction: Buy

Entry Price: 147.80

Target Price: 151.10

Stop Loss: 146.20

Valid Until: September 25, 2025, 23:00:00

Support: 147.10/146.30

Resistance: 146.13/150.90

Thanks to stronger-than-expected GDP and household spending data, the Australian dollar has climbed near its July highs, reducing the likelihood of further rate cuts by the Reserve Bank of Australia (RBA) this year. Analysts predict that the AUD/USD pair will see a gentle upward trend until 2026. On September 10th, Liberal Party leader and opposition figure Sussan Ley​ removed Senator ​Jacinta Nampijinpa Price​ from her shadow cabinet role. The dismissal followed Price's controversial remarks about Indian immigrants, which were widely condemned as 'deeply hurtful.' Price had publicly refused to support Ley's leadership. In a radio interview, Price claimed that the Albanese government prioritizes migrants who are more likely to vote for the Labor Party, citing Indian immigrants as an example. These comments drew strong backlash from both the Indian community and members within her own party. Despite Ley repeatedly calling out the remarks as incorrect and demanding an apology, Price refused to retract them entirely, only stating that her comments were "not clear enough." She argued she was questioning the pressures of "mass migration." Additionally, at a press conference, Price said she would not stay "silent" on immigration issues and avoided expressing support for Ley's leadership, putting her at direct odds with the party leader.

Market analysts are taking a ​cautiously optimistic view​ of the latest PPI (Producer Price Index) data. Many point out that while weaker PPI data could justify a rate cut, the Federal Reserve is more focused on the Consumer Price Index (CPI). If the CPI data, due out on Thursday, also comes in soft, it would significantly boost the likelihood of a rate cut in September. However, some analysts caution that the tariff policies implemented by President ​Donald Trump​ could still drive inflation higher in the coming months, casting doubt on the case for aggressive rate cuts. In terms of market reaction, the U.S. dollar saw a brief dip after the PPI release, reflecting optimism around potential monetary easing. But that optimism remains tempered by uncertainty over the upcoming CPI figures and longer-term concerns about political challenges to the Fed's independence. Analysts at ​LH Meyer​ noted that while personnel changes may have a limited impact on the September rate decision, they could threaten the Fed's ability to resist political pressure and maintain independent monetary policy in the long run.

Overall, the August PPI data provides additional support for a Fed rate cut, but the final decision will hinge on the upcoming CPI report. Meanwhile, the Trump administration's public pressure and strategic personnel moves are forming a ​systemic challenge to the Fed's independence, which could have far-reaching implications for future monetary policy. Traders should closely monitor the upcoming CPI data and the Fed's policy statement in September, while staying alert to the growing influence of political factors on central bank decisions.

Based on the daily chart, the ​Bollinger Bands are expanding upwards with ​moving averages sloping upward​ and price trading strongly along the Bollinger Upper Band. The ​MACD​ forms a 'Golden Kiss' (bullish crossover) and continues to rise. The ​RSI is at 62, entering the bullish zone, indicating strong short-term bullish sentiment. Additionally, the price has formed a ​megaphone pattern, suggesting a high probability of further upside toward the upper edge of the pattern, around ​0.67. According to the weekly chart, the price is approaching the ​EMA200​, currently around ​0.667. The MACD also shows a 'Golden Kiss,' the RSI is at ​59​ (not yet in overbought territory), and the ​lows are gradually rising. However, historical patterns suggest that ​each time the price approaches the EMA200, it would undergo significant corrections—and this time may be no exception. Therefore, selling at highs will be recommended.

Trading direction: Sell

Entry price: 0.667

Target price: 0.63

Stop loss: 0.675

Support: 0.656/0.646/0.63

Resistance: 0.667/0.67/0.7

Japanese manufacturer confidence has reached its highest level in over three years, primarily driven by the July trade agreement between Japan and the U.S., which has alleviated trade uncertainties. The September manufacturing sentiment index stands at 13, surpassing August's 9 and marking the highest since August 2022. The automotive and transportation machinery sectors have shown notable strength, with sub-indices rising from 25 to 33, the highest since December 2023. Some industry managers report stable order volumes; however, export weakness has led to production stagnation. Additionally, managers in the precision machinery sector indicate that tariffs implemented by the Trump administration have suppressed order demand. Looking ahead, manufacturers generally express concerns over inflation's impact on consumer spending and rising material and labor costs. The services sector index rebounded to 27 after hitting a nine-month low in August, with improvements observed in real estate, retail, and transportation industries, while wholesale and IT sectors remain under pressure. Revised Q2 data show Japan's GDP grew at an annualized rate of 2.2%, indicating domestic consumption continues to underpin economic growth. Meanwhile, market attention remains focused on the intra-LDP leadership contest, which could influence the Bank of Japan's monetary policy stance in the coming years. The intersection of political developments and policy debates has reignited uncertainty surrounding the yen's trajectory, leading to a consolidation phase in the USDJPY.

In the U.S., the dollar remains resilient as investors await inflation data, with Thursday's report likely to serve as a pivotal point in redefining the trajectory of the financial markets toward the end of the year. July wholesale inventories increased marginally by 0.1%, below the prior forecast of 0.2%, indicating continued caution among enterprises following inventory reductions. Motor vehicle inventories declined by 1.6%, while inventories of apparel, pharmaceuticals, and food saw significant increases. Q2 inventory annualized figures decreased by US$32.9 billion, subtracting 3.29 percentage points from GDP growth; however, the narrowing trade deficit offset these negative effects, enabling the U.S. economy to rebound from a 0.5% contraction in Q1 to a 3.3% expansion in Q2. Concurrently, the August Producer Price Index (PPI) unexpectedly fell by 0.1%, below economists' forecast of a 0.3% increase, suggesting limited inflationary pressures at the production level. The primary drag was from declining service prices, with trade service profit margins decreasing by 1.7% and wholesale margins for machinery and automobiles dropping by 3.9%. Excluding food and energy, core PPI rose by 0.3% month-over-month and 2.6% year-over-year, below July's 3.1%. Following the weaker-than-expected PPI data, market traders widely anticipate the Federal Reserve to cut interest rates by 25 basis points at the September meeting and to maintain similar easing through the end of the year. Trump promptly called for an immediate and substantial rate cut via social media and repeatedly pressured the Fed; however, some analysts consider such a significant rate reduction to lack sufficient justification.

The USDJPY is oscillating between the upper and lower Bollinger Bands in the 4H timeframe, currently consolidating near the middle band. The MACD line and signal line are retracing toward the zero-axis, with some distance remaining. A golden cross has formed on the MACD, and the RSI is at 50, indicating a neutral market sentiment. If the price maintains above the middle Bollinger Band, it is likely to rally toward the upper band and previous resistance levels at approximately 148.2 and 149.2; failure to hold above this level could lead to a decline toward 145.8. In the 1W timeframe, Bollinger Bands are narrowing, with price oscillating around the middle band. Following the MACD bullish crossover, the MACD lines are retracing toward the zero-axis, and the RSI stands at 51, reflecting a predominantly sideways trend with potential for a trend reversal. The key focus is whether the price can sustain above the middle Bollinger Band; a successful hold could push the price above 150, while a failure might see a decline toward 146. It is recommended to go long at the lows.

Trading Direction: Buy

Entry Price: 147.7

Target Price: 149.6

Stop Loss: 145.8

Support: 145.8, 142.6, 141.6

Resistance: 149.6, 150, 151

Canada’s Ivey PMI tumbled sharply from a healthy 55.8 in July to 50.1 in August, hovering just above the stagnation line and signaling a significant slowdown in economic activity. This deterioration underscores mounting concerns about the resilience of Canada’s economy and raises the likelihood of a dovish shift by the Bank of Canada (BoC).

Expectations for further policy easing have grown as the Canadian labor market shows increasing signs of strain. Analysts at Bank of America (BofA) have forecasted a 25 basis point rate cut at the BoC’s upcoming policy meeting, which would bring borrowing costs down to 2.5%. The bank also projects that rates could be lowered further, reaching 2% by the end of 2026. BofA emphasized that a rising unemployment rate, combined with inflation now sitting comfortably within the BoC’s 2% target range, provides strong justification for additional monetary easing.

Adding pressure to the Canadian outlook, oil prices — the country’s largest export — remain pinned near multi-month lows. Crude has been weighed down by news of additional supply increases, though at a slower pace than in previous months, alongside growing concerns about weakening global demand.

Across the Atlantic, the European Central Bank (ECB) is widely expected to leave rates unchanged for a second consecutive meeting on Thursday, supported by steady growth and inflation levels holding close to target.

Meanwhile, French politics have taken another turbulent turn. On Monday, parliament toppled the government over plans to rein in the country’s rising debt burden. Lawmakers passed a no-confidence vote against Prime Minister François Bayrou after parties failed to agree on spending cuts. The outcome forced President Emmanuel Macron to appoint France’s fifth prime minister in less than two years, highlighting ongoing political instability in one of the eurozone’s largest economies.

Geopolitical risks also remain elevated. On Wednesday, Poland activated its own air defenses, as well as those of NATO, to intercept drones that entered its airspace during a Russian attack on Ukraine. Kyiv further alleged that Russian drones deliberately crossed into Polish territory, marking a direct violation of NATO’s airspace and raising concerns of further escalation.

EURCAD has been forming a rising wedge pattern since early July, and the pair is now approaching the critical apex of this structure. A downside breakout would confirm the bearish nature of the pattern, which often resolves lower. At present, price action is hovering near the upper boundary of the wedge, making the higher levels of the channel attractive areas to watch for potential selling opportunities if bearish reactions emerge.

The 100-period and 200-period moving averages sit at 1.6128 and 1.6061 respectively, aligned near the lower edge of the formation and offering potential layers of support.

Momentum indicators also add weight to the bearish case. The RSI recently peaked at 79 when EURCAD touched the wedge’s upper boundary, reinforcing the view that upside momentum is overstretched. Taken together, these factors strengthen the likelihood of a bearish reversal, with initial downside targets seen around 1.6030 — the next major support level. A break below the rising trendline could pave the way for a deeper correction in the sessions ahead.

Trading direction: Sell

Entry price: 1.6260

Target price: 1.6050

Stop loss: 1.6330

Validity: Sep 19, 2025 15:00:00

A softer-than-expected U.S. Producer Price Index (PPI) reading may place further downward pressure on the U.S. Dollar. Data released by the Bureau of Labor Statistics (BLS) on Wednesday showed that annual PPI inflation eased to 2.6% in August, down sharply from 3.3% in July and well below the market consensus of 3.3%. On a monthly basis, producer prices slipped 0.1%, contrasting with the 0.7% increase recorded in July (revised from 0.9%).

Looking ahead, the U.S. Consumer Price Index (CPI) for August is projected to accelerate to 2.9% year-on-year from 2.7%, while the core CPI—which excludes food and energy—is expected to hold steady at 3.1%. Meanwhile, Fitch Ratings anticipates two rate cuts of 25 basis points each in September and December, followed by three additional reductions in 2026.

The BLS also revised its annual benchmark payroll figures sharply lower, reporting a decline of -911K jobs as of March 2025, a steeper drop than the -682K projected by economists. This revision has reinforced the case for the Federal Reserve to deliver a rate cut at next week’s meeting. Still, the decision could hinge on the upcoming inflation releases—if PPI or CPI readings surprise to the upside, the Fed may hesitate to act.

On the geopolitical front, U.S. President Donald Trump has urged the European Union to impose 100% tariffs on Chinese and Indian goods as a way to increase pressure on Russian President Vladimir Putin, according to the Financial Times. Washington further noted that the Trump administration is prepared to “mirror” any measures introduced by the EU, suggesting that the U.S. could raise tariffs on Chinese and Indian imports to the same extent.

In Switzerland, Swiss National Bank (SNB) President Martin Schlegel commented in a speech in Vezia that the central bank would “not hesitate” to cut rates again should conditions warrant, but stressed that the threshold for returning to negative rates remains very high, given the heavy burden such policies place on savers and pension funds. He also announced a new step toward transparency: beginning with the September 25 meeting, the SNB will publish policy discussion summaries four weeks after each decision. His remarks reinforced the view that the SNB is comfortable with the current strength of the Swiss franc and is not in a rush to ease aggressively, especially with Swiss inflation still subdued.

USD/CHF recently extended its bearish momentum, testing support at 0.7922 before staging a modest rebound toward the 0.8000 area. This zone now acts as a key local resistance, which could trigger renewed downside pressure. Notably, the RSI has been rising faster than price, approaching levels where a bearish divergence could form. Should the RSI surpass its previous peak without a corresponding breakout in price, it would likely be interpreted as a sign that bullish momentum is fading and sellers may soon regain control.

In addition, the 100- and 200-period moving averages on the 4-hour chart, currently located at 0.8023 and 0.8047, sit close to the descending trendline that has capped recent rallies. These levels will be crucial to watch—if USD/CHF climbs into the 0.8020–0.8050 zone, it could offer an attractive setup for renewed downside positions. Conversely, a clear break above the trendline would invalidate the bearish setup and open the door for additional gains.

Trading direction: Sell

Entry price: 0.8010

Target price: 0.7920

Stop loss: 0.8045

Validity: Sep 19, 2025 15:00:00