The euro extended its advance on Monday, with EUR/USD approaching a one-week high near 1.1730 during the European session. The common currency’s strength came as the U.S. dollar continued to underperform its peers, pressured by mounting expectations that the Federal Reserve will resume monetary easing as soon as September.

At the time of writing, the U.S. Dollar Index (DXY)—a benchmark tracking the greenback’s value against six major currencies—was hovering close to its August low around 97.55. This decline reflects broad investor sentiment that the Fed may struggle to maintain its current stance in the face of rising economic risks.

According to the CME FedWatch tool, markets are assigning an 87.6% probability that the Fed will lower its benchmark rate by 25 basis points at its upcoming September meeting. Such odds underscore how decisively sentiment has shifted in recent weeks, as softer economic data and growing labor market concerns reinforce a dovish outlook for U.S. monetary policy.

The move comes against the backdrop of fresh tariffs imposed by U.S. President Donald Trump, which investors fear could exacerbate labor market strains. Fed Chair Jerome Powell and other members of the Federal Open Market Committee (FOMC) have signaled unease about these risks, emphasizing the potential drag on hiring and broader economic momentum.

“The combination of weaker job creation, tariff-related disruptions, and ongoing uncertainty over global demand continues to challenge the U.S. growth outlook,” said one analyst at a European investment bank. “Markets are increasingly convinced the Fed will have no choice but to ease.”

Investors will gain more clarity this week from a series of key labor market releases, including the JOLTS Job Openings report for July, ADP’s private-sector employment survey, and the closely watched August Nonfarm Payrolls (NFP) report. These datasets will provide crucial insight into whether labor market weakness is worsening enough to force the Fed’s hand.

From a technical perspective, EUR/USD is consolidating its recent rebound after bouncing strongly from support around the 1.1700 handle. The pair’s ability to hold above that threshold has reinforced bullish sentiment, particularly as price action respects an ascending trendline that has defined the short-term uptrend.

The 50-day Exponential Moving Average (EMA) continues to provide an underlying floor, with recent intraday closes above it confirming the pair’s resilience. Momentum indicators are also constructive; the Relative Strength Index (RSI) has reset from overbought territory, leaving room for further upside without the immediate risk of exhaustion.

As long as EUR/USD remains above the 1.1700 level, the bullish bias appears intact. Traders are watching for a possible extension toward the next resistance zone near 1.1850. A sustained move beyond that level could open the door to a test of 1.1900, while failure to hold above current support could invite renewed selling pressure.

BUY EURUSD

ENTRY PRICE: 1.17190

STOP LOSS: 1.16500

TAKE PROFIT: 1.1900

The Swiss Franc strengthened for a fourth consecutive session on Friday, pushing the USD/CHF exchange rate closer to the psychologically significant 0.8000 mark as investors increasingly price in a September interest rate cut from the Federal Reserve and seek shelter amid growing political and policy uncertainty in Washington.

In late New York trade, USD/CHF was hovering around 0.7997, retreating from early intraday gains and marking fresh one-month lows. The pair’s decline closely mirrored the US Dollar Index (DXY), which slipped back below 98.00 to 97.76, underscoring a broader softening in the Greenback’s momentum.

The move comes despite US data that—at first glance—suggested economic resilience. The Bureau of Economic Analysis reported that the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, rose 0.3% month-on-month in July, matching consensus forecasts. On an annual basis, core PCE accelerated to 2.9%, its highest level since February, from 2.8% in June. Headline inflation was more subdued, holding at 2.6% year-on-year with a modest 0.2% monthly increase.

Household demand appeared equally firm, with personal spending rising 0.5% in July, up from 0.3% in June, while personal income increased 0.4% month-on-month. Taken together, the data painted a picture of sticky inflation accompanied by robust consumer activity—a mix that in another market environment might have lifted the Dollar on expectations of a more hawkish Fed.

Yet traders largely ignored the stronger demand backdrop, focusing instead on the policy outlook. Fed funds futures are now pricing an 89% probability of a 25 basis-point cut at the September FOMC meeting, cementing expectations that the central bank will move toward easing after holding rates steady since May. Yields on the front end of the Treasury curve slipped as investors positioned for a policy shift, though longer-dated yields were steadier, reflecting confidence that long-run inflation risks remain contained.

Adding to the Dollar’s vulnerability was intensifying political tension surrounding the independence of the Fed. The legal dispute between President Donald Trump and Fed Governor Lisa Cook escalated this week, with Cook filing an emergency motion to block her removal after Trump attempted to oust her. The Fed submitted its own brief in the case Friday, while the Justice Department signaled it would not oppose converting Cook’s request into a preliminary injunction. Legal experts note that the battle hinges on the interpretation of “for cause” under the Federal Reserve Act, a term traditionally associated with misconduct but now potentially subject to broader interpretation. Market observers warn the case could ultimately find its way to the Supreme Court, raising fresh uncertainty about the Fed’s autonomy.

Against this backdrop, the Swiss Franc has been a prime beneficiary. Long regarded as a safe-haven currency, the Franc’s appeal has been reinforced by both macroeconomic and political risks that undermine the Greenback. Ongoing trade frictions, questions about US institutional stability, and the dovish recalibration of Fed expectations have driven investors toward the security of the Swissie.

From a technical perspective, USD/CHF remains under pronounced bearish pressure, with the pair breaking through key support at 0.8020. The move places the pair firmly below the 50-day Exponential Moving Average (EMA50), reinforcing the dominance of the corrective downtrend on the short-term charts. The broader bearish structure remains intact, with the pair trending alongside a supportive channel that favors additional downside.

However, momentum indicators suggest near-term caution for bears. The Relative Strength Index (RSI) has entered oversold territory, flashing early positive signals that could prompt a temporary pause or modest rebound in losses.

Still, technical setups highlight further downside risk. The current sell entry is pegged at 0.8030, aligning with a pullback resistance and the 38.2% Fibonacci retracement. A stop loss is recommended near 0.8100, coinciding with a swing high and the 127.2% Fibonacci extension. On the downside, the take-profit target lies at 0.7900, which aligns with a Fibonacci extension support zone around 161.8%.

SELL USDCHF

ENTRY PRICE: 0.8000

STOP LOSS: 0.8100

TAKE PROFIT: 0.7900

The U.S. Dollar Index shed about 2% last month, erasing a portion of July's advance—the first monthly gain since President Donald Trump took office. With the economy flashing slowdown signals and the Fed poised to resume monetary easing, the greenback is on track to extend its year-to-date retreat of more than 8%.

President Trump's public questioning of the Fed's credibility and the reliability of official data is further undercutting the dollar's allure. Recent policy moves by the U.S. administration are also sowing doubts over the currency's long-term standing, eroding its safe-haven premium and paving the way for a persistent risk discount.

After three consecutive down-days, the Dollar Index has attempted a modest rebound, trading near 98.00 in European hours on Friday.

On the daily chart, the mild bearish momentum remains intact, with the RSI continuing to track lower. During this period, downside risks dominate. The support is 97.60, followed by 97.10. And the Resistances are 98.40 (MA21), 98.80 (MA100), and 99.60.

Thursday's options pricing shows investors pricing in a modest depreciation over the next three to six months. The index broke below its MA100 in early March and has remained pressured ever since. Two failed attempts to reclaim the average this month have reinforced 98.80 as a key cap.

Trading Direction: Sell

Entry Price: 98.00

Target Price: 95.10

Stop Loss: 99.98

Valid Until: September 13, 2025, 23:55:00

Support: 97.60/97.10/96.38

Resistance: 98.40/98.80/99.60

The Australian dollar strengthened against its US counterpart on Thursday, pushing toward the 0.6530 level in the European session, as the greenback came under broad selling pressure amid mounting speculation that the Federal Reserve will cut interest rates as early as September.

The move comes as traders position for a dovish turn by the Fed, with US economic data increasingly signaling that growth momentum is fading. At the time of writing, the US Dollar Index (DXY), which tracks the dollar against six major peers, slipped toward 97.90. According to the CME FedWatch Tool, futures markets are now pricing in an 87% probability that the Fed will lower its benchmark rate at its September meeting.

That level of conviction suggests investors see the Fed pivoting away from its aggressive stance to prevent the economy from tipping into a deeper slowdown.

Markets were bolstered further on Wednesday when New York Fed President John Williams hinted at the likelihood of rate reductions in the months ahead. While Williams stopped short of endorsing a September cut outright, his comments underscored growing concerns that the US economy’s slowdown warrants a more accommodative policy stance.

“The Fed doesn’t want to wait too long before supporting growth,” one trader in London said. “The risk is that if they wait, the slowdown could accelerate into something more difficult to contain.”

Still, Williams stressed that policymakers need more data before finalizing their decision. That puts Friday’s release of the July Personal Consumption Expenditures (PCE) Price Index firmly in focus. The PCE is the Fed’s preferred inflation gauge, and a softer print could strengthen the case for September easing.

The bullish tone in the Aussie was amplified by domestic economic developments. On Wednesday, the Australian Bureau of Statistics reported that consumer prices rose more than expected in July. The Monthly CPI increased at an annual pace of 2.8%, outpacing forecasts of 2.3% and accelerating sharply from June’s 1.9%.

The upside surprise complicates the outlook for the Reserve Bank of Australia (RBA). Markets had been pricing in a possible rate cut at the central bank’s September meeting, but the latest data challenges that assumption. Inflation above expectations suggests underlying price pressures remain sticky, potentially limiting the RBA’s ability to ease policy without risking a rebound in consumer prices.

Investors now find themselves weighing a dovish Fed against a potentially cautious RBA. That divergence in policy expectations is likely to keep the Aussie underpinned in the near term, particularly if US data continues to reinforce the need for Fed cuts.

From a technical perspective, the AUD/USD pair has extended its bullish momentum, with price action firmly supported by short-term correctional waves. The pair recently broke above resistance at 0.6535, a level now serving as a key target for bulls.

Momentum indicators reinforce the upside bias. The pair trades comfortably above the 50-day Exponential Moving Average (EMA50), signaling dynamic support beneath current levels. Meanwhile, the Relative Strength Index (RSI) shows sustained bullish momentum, though it has entered overbought territory—suggesting that while the trend remains positive, some short-term consolidation cannot be ruled out.

If the bullish momentum continues, the next upside levels to watch lie near 0.6560 and 0.6600. On the downside, initial support sits around 0.6480, followed by stronger buying interest near 0.6450.

BUY AUDUSD

ENTRY PRICE: 0.6537

STOP LOSS: 0.6500

TAKE PROFIT: 0.6600

Gold prices edged lower on Friday, retreating slightly from their strongest level in more than a month as traders locked in profits and repositioned ahead of the release of critical U.S. inflation data. Despite the modest decline, the yellow metal remains firmly within a bullish trend, supported by softer dollar expectations, policy uncertainty, and enduring geopolitical risks.

In the European session, spot gold was last seen trading near $3,407 per ounce, down around 0.30% on the day. The pullback followed a rally to levels not seen since July 23 during Thursday’s session, when investors pushed the precious metal higher on expectations that the Federal Reserve is drawing closer to cutting interest rates as soon as September. Month-end profit-taking has since weighed on sentiment, though the broader uptrend remains intact.

The main driver of caution in Friday’s trade is anticipation of the U.S. Bureau of Economic Analysis report on the core Personal Consumption Expenditures Price Index, the Fed’s preferred measure of inflation. The July release is expected to show a 0.3% monthly rise, matching June’s pace, while the annual rate is projected to inch higher to 2.9% from 2.8% previously. Traders are bracing for a potentially market-moving outcome. A weaker-than-expected reading would likely reinforce expectations for a September rate cut, providing fresh support to gold. By contrast, a stronger number could temper dovish speculation, boost Treasury yields, and offer the U.S. dollar a renewed lift, thereby applying downward pressure on bullion.

Market strategists have warned that Friday’s PCE release could trigger sharp, immediate swings in gold prices. A London-based metals strategist noted that while a higher-than-expected print could send gold lower in the short run, the broader trend remains intact because of the Fed’s shifting stance and the ongoing demand for safe-haven assets. “If inflation looks sticky, we might see a knee-jerk selloff in gold,” the strategist said. “But the broader uptrend remains hard to dismiss given the policy backdrop and geopolitical noise.”

Beyond the immediate impact of inflation data, gold’s safe-haven allure continues to strengthen. Investors are increasingly concerned about the independence of the Federal Reserve, with political interventions raising questions about whether the central bank can act free of external pressures. Such concerns tend to elevate gold’s role as a hedge against policy uncertainty. This comes alongside persistent global risks, including geopolitical flashpoints, uneven U.S. growth dynamics, and fragile confidence in parts of the global economy. These factors have combined to ensure that dips in gold remain shallow and often attract strong buying interest.

From a technical perspective, the market still carries a clear bullish tone. Gold has stabilized above the $3,402 level, which traders view as a critical support area. The rally that began earlier this month remains intact, with buyers continuing to press toward higher resistance levels. The next significant upside level is seen around $3,429, and momentum is expected to remain constructive so long as the price holds above the recent support base. Short-term pullbacks, including a possible correction back to the $3,402 level, are considered likely to be temporary in nature. If the PCE data meets or undershoots expectations, bullish momentum is expected to resume quickly, potentially propelling the metal toward $3,420 and then on to $3,436 and $3,450.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 3415

STOP LOSS: 3395

TAKE PROFIT: 3450

The UK automotive manufacturing sector exhibited a complex trajectory in July, with data from the Society of Motor Manufacturers and Traders (SMMT) indicating a 5.6% increase in vehicle production to 69,127 units. However, the overall automotive output declined by 10.8%, primarily due to a downturn in commercial vehicle manufacturing. SMMT CEO Mike Hawes highlighted challenges such as waning consumer confidence and volatile trade flows, urging the government to implement more effective strategies to foster industry growth. Despite the U.S.-UK trade agreement, tariff-related disruptions continue to impact export strategies. Industry forecasts suggest a recovery in production volumes by 2026. Concurrently, confidence within the UK services sector remains subdued, with the CBI's August survey revealing a decline in optimism and activity levels among service providers, amid persistent cost pressures and difficulties passing costs onto consumers. The organization called on Chancellor of the Exchequer Rachel Reeves to avoid increasing corporate taxes in the upcoming autumn budget and to reassess labor policies that could impose additional burdens on employers, aiming to provide short-term economic certainty. Additionally, the Bank of England has set a historical record in short-term monetary market operations by allocating £75.652 billion in seven-day liquidity injections, reflecting its policy intent to maintain market liquidity during the quantitative tightening process.

Despite widespread market consensus on a potential interest rate cut in September, there remains significant internal disagreement within the Federal Reserve regarding the future policy trajectory. Policymakers appear to be divided into three main factions: dovish members advocating for multiple rate reductions, hawkish officials opposing easing measures, and centrist policymakers adopting a cautious approach. Chairman Powell is navigating a delicate balancing act—acknowledging downside risks to the labor market while warning that tariffs could prolong inflationary pressures. According to Matthew Luzzetti of Deutsche Bank, considering the divergent views within the committee, the most straightforward approach may be a gradual rate reduction, with subsequent actions increasingly data-dependent. Goldman Sachs emphasizes that if further signs of labor market softening emerge, the Fed may need to capitalize on the current policy window. The institution projects that, regardless of whether the economy slows or normalizes, the Fed is likely to complete this easing cycle by the first half of 2026, prior to the appointment of the next chair. Market expectations for a rate cut in September have risen to 89%, with the anticipated cumulative easing by year-end reaching 55 basis points. Consequently, weaker-than-expected data could reinforce rate cut expectations, exerting further downward pressure on the U.S. dollar index and potentially strengthening the British pound indirectly.

In the 4H timeframe, the GBPUSD is oscillating between the upper and lower Bollinger Bands, with the Bollinger channels narrowing and SMAs flattening and converging, indicating a potential trend reversal. Currently, the price has formed a bearish candlestick pattern, breaking below the middle Bollinger Band. The MACD line and signal line are approaching a death cross, and the RSI is at 47, suggesting a higher probability of a downward move. If the price fails to hold above the middle band, it may test the lower Bollinger Band or previous lows at approximately 1.344 and 1.340. In the 1W timeframe, after breaking above the EMA12, the price is retesting this level; a successful hold could lead to further gains toward 1.380 or even 1.400. Conversely, failure to sustain could result in declines toward 1.310 and 1.300. Following the MACD death cross, the MACD line and signal line are retracing toward the zero-axis, with the RSI at 56, not overbought, but with decreasing highs, indicating a possible correction. Overall, the correction phase appears incomplete. It is recommended to go short initially and then go long.

Trading Direction: Sell

Entry Price: 1.348

Target Price: 1.337

Stop Loss: 1.36

Support: 1.345, 1.34, 1.337

Resistance: 1.36, 1.362, 1.378