AUD/USD Rises After Fed’s Waller Sparks Rate Cut Bets

Economic

Summary:

The Australian Dollar advanced against the U.S. Dollar on Friday, extending a rebound from multi-week lows amid dovish signals from the Fed and broad market risk appetite.

BUY AUDUSD

Close Time

CLOSED

0.65299

Entry Price

0.66000

0.64700

0.66520 -0.00118 -0.18%

19.5

Pips

Profit

0.64700

0.65494

Exit Price

0.65299

Entry Price

0.66000

The Australian Dollar extended its recovery against the U.S. Dollar on Friday, building on Thursday’s bounce and pushing decisively above the psychological 0.6500 handle in the European trading session. The move marks a notable reversal from the mid-0.6400s region — a level not seen since early May — as investors responded to fresh commentary from the Federal Reserve that hinted at a more accommodative stance heading into the second half of the year.

At the heart of the rally was a shift in the U.S. monetary policy outlook. Federal Reserve Governor Christopher Waller, a historically hawkish member of the FOMC, surprised markets on Thursday when he stated that the central bank should consider cutting interest rates as early as July. Citing signs of economic strain and a moderation in inflation momentum, Waller’s remarks injected a dovish tone into an otherwise cautious Fed narrative. His comments sent ripples through the U.S. Dollar complex, prompting a modest retreat in the Greenback from its recent peak — the highest level since June 23 — and reigniting interest in risk-sensitive currencies like the Australian Dollar.

The risk-on sentiment was further amplified by a rebound in global equity markets, which found renewed optimism after a volatile mid-week session. With investors increasingly positioning for a dovish pivot from the Fed in the coming months, high-beta currencies like the Aussie have found temporary support. However, beneath the surface, headwinds remain.

While Waller’s comments fueled the initial leg higher in AUD/USD, market expectations remain divided. Many traders still anticipate that the Fed will wait until September to enact its first rate cut, particularly amid concerns that President Donald Trump’s new round of import tariffs could stoke inflation by filtering through to consumer prices. Recent U.S. macroeconomic data — including robust retail sales and sticky inflation prints — have reinforced the idea that the central bank will remain cautious. FOMC officials echoed this tone in speeches earlier this week, maintaining a data-dependent approach. These factors suggest that any sustained weakness in the U.S. Dollar may be limited in the short term, which could temper the Australian Dollar’s upward trajectory.

Adding complexity to the outlook is the weakening domestic economic picture in Australia. On Thursday, employment data released by the Australian Bureau of Statistics showed a sharp deceleration in job creation, raising fresh concerns about the health of the labor market. The unemployment rate ticked higher, and full-time job additions fell below expectations — a worrying sign for a country that has relied heavily on labor market resilience to weather global headwinds.

These developments have strengthened market expectations that the Reserve Bank of Australia (RBA) may opt for additional rate cuts in the coming months. With inflation softening and domestic growth indicators flashing red, the RBA has little room to maintain a hawkish posture. Traders are increasingly pricing in a rate cut by September, which could weigh on the Australian Dollar and cap any meaningful upside against its U.S. counterpart.

Technical Analysis

Technically, AUD/USD has shown signs of life after rebounding from oversold conditions. The relative strength index (RSI) flashed a bullish divergence in recent sessions, suggesting that momentum was beginning to shift back in favor of the bulls. Friday’s price action saw the pair break above key resistance near 0.6500, but the move remains tenuous. The broader trend still leans bearish, with the pair trading below its 50-day exponential moving average — a level that continues to act as a ceiling. Until that barrier is cleared decisively, the prevailing correctional trend is likely to dominate. Moreover, as the pair remains within a well-defined downward channel, any further rallies may attract selling interest from traders looking to fade strength.

From a strategic standpoint, the near-term bias for AUD/USD has shifted cautiously higher, but the broader context still favors a defensive posture. Unless the RBA surprises markets with a shift in tone or the Fed delivers an earlier-than-expected cut, the pair’s recovery may struggle to extend beyond the 0.6550–0.6600 region. A break below 0.6450 would reintroduce bearish momentum, potentially opening the path toward year-to-date lows below 0.6400.

TRADE RECOMMENDATION

BUY AUDUSD

ENTRY PRICE: 0.6530

STOP LOSS: 0.6470

TAKE PROFIT: 0.6600

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Warren Takunda

Commodity

Summary:

U.S. crude prices climbed nearly 1% Friday, driven by renewed supply-side disruptions in Iraq and a weaker Dollar.

BUY WTI

Close Time

CLOSED

67.000

Entry Price

71.000

64.000

57.233 -0.408 -0.71%

36.1

Pips

Profit

64.000

67.361

Exit Price

67.000

Entry Price

71.000

West Texas Intermediate (WTI) crude oil extended its upward momentum for a second consecutive session on Friday, climbing close to 1% during the American trading hours. Spot prices hovered around $66.90 per barrel, as investors weighed intensifying supply-side pressures, robust U.S. demand, and a weakening U.S. Dollar against broader macroeconomic uncertainty. Despite the gains, oil remains trapped within a tight $65.00–$68.00 range, underscoring a market grappling with conflicting signals.

The recent push higher in oil prices is being largely fueled by fresh disruptions in Iraq’s semi-autonomous Kurdistan region, where a fourth straight day of drone strikes has significantly curtailed output. According to local officials and energy analysts, regional production has plunged from roughly 280,000 barrels per day (bpd) to just 150,000 bpd — a nearly 50% drop that has reignited fears of supply scarcity. The Kurdistan Regional Government, which oversees the area's oil exports, has described the attacks as “systemic” and warned of further output risks if the security situation remains unstable.

At the same time, data from the U.S. Energy Information Administration (EIA) is adding bullish momentum to the oil complex. Crude stockpiles in the U.S. fell by 3.8 million barrels during the week ending July 11, far surpassing analysts' expectations. This follows a previous week’s surprise build of over 7 million barrels and marks a sharp reversal. U.S. inventories now sit nearly 8% below their five-year seasonal average, suggesting tightening supply conditions amid robust domestic consumption and limited spare capacity in key refining hubs.

The demand side of the equation is also showing signs of resilience. With the U.S. entering peak summer driving season, gasoline consumption is on the rise. According to the IEA’s latest monthly report, global oil demand has held firmer than anticipated, with transportation fuels showing particular strength. The agency noted that global inventories could shrink faster than previously forecast, especially if geopolitical risks continue to escalate and production remains constrained in multiple regions.

One of the less discussed but increasingly relevant factors supporting crude is the weakening U.S. Dollar. The Greenback has come under pressure in recent sessions amid renewed political tensions in Washington and speculation that the Federal Reserve may lean toward a more dovish stance in the months ahead. A softer Dollar tends to bolster commodity prices, making oil more attractive to foreign buyers and amplifying the bullish bias in the energy complex.

Geopolitical risk is also creeping back into market pricing. Reports of potential fresh sanctions or tariffs from the U.S. on Russian energy exports have added another layer of uncertainty to an already delicate global supply structure. While Russian crude has continued to flow under various price cap agreements, any additional restrictions could create logistical bottlenecks and deepen the global supply shortfall — particularly if Russian seaborne shipments are disrupted or rerouted inefficiently.

Still, it would be premature to declare a full bullish breakout in oil just yet. Price action continues to respect its well-defined range, and lingering concerns over global growth — particularly from China and Europe — remain a dampening force. Furthermore, while demand appears seasonally healthy, longer-term structural questions around energy transition and efficiency are tempering some of the upside enthusiasm among institutional players.

Technical Analysis

From a technical standpoint, WTI crude is beginning to show signs of establishing a short-term bullish trajectory. Price action has broken above the 50-day Exponential Moving Average (EMA), signaling a potential end to the previous bearish pressure. The recent move has also aligned with an emerging ascending trend line, suggesting that bullish sentiment may persist in the near term. However, technical indicators such as the Relative Strength Index (RSI) are flashing caution. RSI readings have entered overbought territory and are beginning to show negative divergence, implying that the current rally could face resistance or even a short-term pullback before resuming higher.

Traders should be mindful of the $68.00 resistance level — a barrier that has capped price action multiple times in recent weeks. A sustained break above this zone, particularly on strong volume, could open the door toward the psychologically significant $70.00 mark. Conversely, a failure to hold above the $66.00 level would put focus back on the $65.00 support, with a potential retreat to the $63.50 area if bearish sentiment regains control.

TRADE RECOMMENDATION

BUY WTI

ENTRY PRICE: 67.00

STOP LOSS: 64.00

TAKE PROFIT: 71.00

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

Recent U.S. economic data have shown resilience, while the UK is grappling with severe inflation and a weakening labor market. GBPUSD is expected to be bearish.

SELL GBPUSD

Close Time

CLOSED

1.35500

Entry Price

1.31300

1.36500

1.33707 -0.00148 -0.11%

59.5

Pips

Profit

1.31300

1.34905

Exit Price

1.35500

Entry Price

1.36500

Fundamentals

Yesterday, the latest U.S. initial jobless claims and retail sales data both came in better than expected, highlighting the resilience of the U.S. economy. This has once again fueled market expectations that the Fed may slow its pace of interest rate cuts in the near term, thereby suppressing the rebound potential of the British pound.

In contrast, the UK's June CPI unexpectedly rose to 3.6%, the highest level since January 2024, driven primarily by increases in transportation and food prices. Meanwhile, the UK labor market continues to weaken: the latest statistics show that employment has declined by 178,000 over the past year, with the unemployment rate rising to 4.7%, the highest in nearly four years. Wage growth has also slowed to 5%, increasing market bets that the Bank of England may initiate an interest rate cut in August. Amid this paradox of "high inflation + weak employment," the pound lacks a clear fundamental support.

Technical Analysis

From the daily chart perspective, GBPUSD has entered a downward trend after breaching the 1.3620 support level. With the breakdown of the June low at 1.3370, the downside potential for the currency pair has been unlocked. Additionally, the upward trend line and the 60-day moving average have been penetrated, further increasing the likelihood of a short-term trend reversal from upward to downward.

At present, GBPUSD still exhibits some support at 1.3370 and may see a short-term rebound. Traders are advised to wait for the rebound to end and then look for opportunities to go short on rallies.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.3550

Target Price: 1.3130

Stop Loss: 1.3650

Valid Until: August 01, 2025, 23:00:00

Support: 1.3364/1.3139

Resistance: 1.3631/1.3788

Risk Warnings and Disclaimers

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Tank

Forex

Summary:

Japan's core CPI rose 3.3% year-on-year in June, as released this morning. Although the cooling of the latest key price indicator was slightly greater than expected, it remains well above the Bank of Japan's (BOJ) target. Energy subsidies have moderated the increase, but surging food prices and wage-price cycles are exerting pressure, which may prompt the BOJ to raise its inflation forecast and maintain its path of interest rate hikes.

BUY USDJPY

EXP

EXPIRED

145.800

Entry Price

150.000

145.500

155.814 +0.255 +0.16%

Pips

EXPIRED

145.500

147.277

Exit Price

145.800

Entry Price

150.000

Fundamentals

Japan is intensifying efforts to avoid the 25% damaging tariffs set to take effect in the U.S. on August 1. Akazawa Ryosei, Japan's top trade negotiator, spoke with U.S. Commerce Secretary Howard Lutnick yesterday, reiterating Japan's willingness to reach an agreement without compromising its core economic interests. Japanese Prime Minister Ishiba Shigeru is scheduled to meet U.S. Treasury Secretary Scott Bessent in Tokyo today, coinciding with Bessent's visit to Osaka for Expo National Day events. Akazawa will also attend and host the U.S. delegation. While diplomatic channels are clearly active, time is running out before the tariffs take effect. According to the data released this morning, Japan's core CPI rose 3.3% year-on-year in June. Though the cooling of the latest key price indicator was slightly steeper than expected, it remains far above the BOJ's target. Energy subsidies have tempered the increase, but soaring food prices and wage-price dynamics are building pressure, potentially leading the BOJ to revise up its inflation forecast and persist with interest rate hikes.

Technical Analysis

Regarding the daily chart, the USD/JPY pair has broken out of the bottom triangular consolidation range and is repeatedly testing the upper edge of the triangle. A confirmed breakout would likely accelerate upward momentum. On the 4-hour chart, a small third-wave correction is underway. A breakdown below the low of the first wave would complete the adjustment structure. Key support lies at the 4-hour Bollinger lower bands and the 4-hour EMA 200. The 4-hour chart shows that the MACD line and the signal line are pulling back toward the 0-axis, suggesting a possible uptrend. Overall, buying at lows is recommended. Strong support lies in 146.9 and 145.8, while resistance stays at the previous high of 149.2 and 150.0.

Will Japan's CPI Exceed Expectations? How Will It Impact USD/JPY Trends?_1

Will Japan's CPI Exceed Expectations? How Will It Impact USD/JPY Trends?_2

Trading Recommendations

Trading direction: Buy

Entry price: 145.8

Target price: 150

Stop loss: 145.5

Support: 147.9/146.9/145.8

Resistance: 149.2/150/151

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

This suggests a potential rebound may emerge from current levels, particularly as the price is testing a descending trendline.

BUY AUDUSD

Close Time

CLOSED

0.65078

Entry Price

0.65800

0.64200

0.66520 -0.00118 -0.18%

15.1

Pips

Profit

0.64200

0.65229

Exit Price

0.65078

Entry Price

0.65800

The Australian labor market showed further signs of weakness last Thursday, as the unemployment rate rose to 4.3% in June—above the expected 4.1%. Additionally, Employment Change for the same month came in at just +2K, well below the market forecast of +20K, suggesting a much softer-than-expected recovery in hiring momentum.

Coupled with this, the Melbourne Institute’s inflation expectations for July eased to 4.7%, down from 5% previously. The combination of softening inflation expectations and weakening labor market indicators is reinforcing speculation that the Reserve Bank of Australia (RBA) might opt for a rate cut in its upcoming policy meeting. Should the RBA proceed with a 25 basis point cut, the official cash rate would fall from 3.85% to 3.60%.

In response to these developments, rate futures are now pricing in around 64 basis points of total rate cuts by the RBA through the end of the year, an increase from the 56 basis points priced just a week earlier. Markets are also leaning toward the possibility of a rate cut as early as the next Monetary Policy Committee (MPC) meeting scheduled for August 12.

Across the Pacific, the U.S. Federal Reserve remains in the spotlight. Fed Governor Christopher Waller stated Thursday night that he still favors a 25-basis-point rate cut in July, citing mounting economic risks and noting that tariff-induced inflation is unlikely to drive persistent price pressures. He added that if core inflation remains subdued and economic growth shows further signs of slowing, additional rate cuts may become necessary. Waller emphasized that the Fed should not wait until labor market conditions deteriorate before taking action.

Meanwhile, Fed Governor Adriana Kugler noted that monetary policy may need to remain steady for some time, while San Francisco Fed President Mary Daly acknowledged ongoing efforts to restore price stability, indicating that the inflation battle is not yet won.

In a separate development, U.S. President Donald Trump denied rumors that he intended to dismiss Federal Reserve Chair Jerome Powell. Despite limited fresh headlines, recent U.S. economic data continues to support the Fed's current stance. The labor market remains strong, retail sales have improved, and Tuesday’s CPI report for June showed inflation trending closer to 3%, aligning with the Fed’s long-term targets.

According to CME’s FedWatch Tool, the probability of a 25 basis point rate cut in September now stands at 52.7%, down from 65.4% a week earlier. In contrast, the chance of rates remaining unchanged at the September meeting has increased to 46.0%, up from 29.7%. Downside Exhaustion Could Revive Bullish Momentum_1

Downside Exhaustion Could Revive Bullish Momentum_1

Technical Analysis

The AUDUSD pair has retreated toward the 0.6455 level after reaching a local high at 0.6596 on July 10. During this pullback, the Relative Strength Index (RSI) dropped to 29.53, briefly dipping below the oversold threshold. This suggests a potential rebound may emerge from current levels, particularly as the price is testing a descending trendline. If the trendline holds and is not broken decisively to the downside, it could serve as a launching point for a bullish reversal, with the next resistance target around 0.6578.

Meanwhile, the 100- and 200-period moving averages sit at 0.6532 and 0.6510 respectively. A daily close above these levels could help accelerate upside momentum. Conversely, a strong break below the descending trendline would undermine the current support structure and may trigger further losses, signaling a continuation of the bearish leg.

Trading Recommendations

Trading direction: Buy

Entry price: 0.6485

Target price: 0.6580

Stop loss: 0.6420

Validity: Jul 25, 2025 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Economic

Commodity

Summary:

Gold prices retreated from the three-week high of $3377 touched on Wednesday, as the decline in safe-haven demand took hold. Meanwhile, the combination of rising inflation concerns and a new round of dollar buying has delayed market expectations for a near-term interest rate cut by the Fed, thereby exerting downward pressure on gold prices. However, ahead of the release of key U.S. macroeconomic data, uncertainties surrounding trade and policy could still provide some support to gold prices.

BUY XAUUSD

Close Time

CLOSED

3299.65

Entry Price

3415.00

3270.00

4299.39 +20.10 +0.47%

296.5

Pips

Loss

3270.00

3269.98

Exit Price

3299.65

Entry Price

3415.00

Fundamentals

During the New York trading session on Wednesday, gold prices surged by 0.78% in response to President Trump's remarks about the "possibility of firing Fed Chairman Powell." Despite Trump's subsequent denial of these comments and his emphasis that "Powell is unlikely to be fired unless there is fraud involved," market reactions remained highly sensitive.

On the economic data front, the U.S. Producer Price Index (PPI) for June unexpectedly remained flat. Although import tariffs have increased the cost of goods, the softening demand in the service sector has offset this effect, indicating that wholesale inflation remains under control. This also suggests that the full impact of tariffs on inflation still requires further validation over time. However, as the August tariff deadline approaches, tariffs may have a more profound inflationary impact globally. Should inflation continue to rise, the rationale for a Fed rate cut in September will face greater scrutiny, unless there is a significant weakening in the labor market.

Opportunities and Risks Coexist in the Range-bound Movement_1

Technical Analysis

The comments about "firing Powell" initially triggered a short-term spike in gold prices, but the gains were not sustained, and prices quickly reverted to the original range. This reflects the market's rapid digestion of sudden political news and also highlights that the current market is at a critical point of supply and demand balance, with the potential for volatility to intensify at any time.

Overall, gold prices are still maintaining an upward trend. The Relative Strength Index (RSI) indicates that bullish momentum has strengthened, although prices remain within a range-bound consolidation phase. If gold prices can effectively break through the three-week high of $3377, they could potentially test the psychological level of $3400. On the downside, $3275 is a key initial support level; a breach could trigger a further decline to the June 30 low of $3246, or even test the 100-day moving average at $3205.

In summary, gold remains in a broad consolidation phase. Investors are advised to adopt a range-trading strategy, with a focus on potential breakout directions and triggers from macroeconomic news.

Trading Recommendations

Trading Direction: Long

Entry Price: 3300

Target Price: 3415

Stop Loss: 3270

Valid Until: August 1, 2025, 23:55:00

Support: 3319/3310/3296

Resistance: 3332/3364/3377

Risk Warnings and Disclaimers

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Eva Chen

Economic

Forex

Summary:

Despite the underwhelming UK employment data, the GBPJPY pair has maintained a strong performance. Uncertainty surrounding Japan's economic outlook, expectations of fiscal stimulus, and the upcoming Upper House elections have weighed on the yen, providing support for the asset.

BUY GBPJPY

Close Time

CLOSED

199.246

Entry Price

204.140

196.000

208.323 +0.079 +0.04%

289.9

Pips

Loss

196.000

196.347

Exit Price

199.246

Entry Price

204.140

Fundamentals

During the European session on Thursday, GBPJPY clawed back the losses from the previous trading day and regained the 199.00 level. The UK's labor market data for June were lackluster:

The ILO unemployment rate rose to 4.7%, higher than the market expectation of 4.6%.

The change in employment was +134,000, higher than the previous value of +89,000, but the market reaction was muted.

The number of initial jobless claims increased to 25,900, showing weakness compared to both the previous value and market expectations.

Despite the overall mediocre performance of these data points, the main reason for the pound's support lies in the yen's own weakness. In Japan, disappointing recent trade data have heightened market concerns about the country's economy slipping into a technical recession. Moreover, with the Upper House elections approaching on July 20, the market anticipates that the government may introduce new fiscal stimulus measures, such as increased spending or a reduction in consumption tax.

If these policies are implemented, they could exacerbate Japan's fiscal deficit, potentially triggering negative impacts on the bond market and exchange rates. Multiple factors, including fiscal sustainability pressures, election-related political risks, and a narrowing scope for trade negotiations with the U.S., are collectively weighing on the yen.

Pound Soars Despite Weak Jobs Data, Yen Plunges Amid Election and Fiscal Fears_1

Technical Analysis

The current trend of GBPJPY is neutral, with short-term consolidation below the 199.87 level. Although there is a certain risk of a pullback, as long as the key support level of 195.33 is not breached, the overall upward trend is likely to be maintained.

If the exchange rate breaks through 199.80, it would signal a resumption of the rally that began at 184.35, with the next target being the Fibonacci 100% extension level of 204.14 (corresponding to the 180.00 to 199.79 range). The upside potential remains, and attention should be paid to the effective breakout of key resistance levels.