EURNZD, after a powerful Thursday rally, has eased back to re-test the 20 August support zone. Volatility is being driven by a fresh deterioration in domestic data. Q2 GDP slumped 0.9% QoQ, far deeper than the median forecast of –0.3%, confirming the slowdown has morphed into a technical recession—activity has now fallen in three of the past five quarters. The breadth of the decline—ten of sixteen industries contracting—signals mounting headwinds that are likely to force the Reserve Bank of New Zealand (RBNB) into a more aggressive easing trajectory.

Goods-producing industries led the retreat, down 2.3%, with primary industries off 0.7% and services output flat. “The 0.9% contraction is broad-based; manufacturing—down 3.5%—was the largest drag, while construction reversed its Q1 bounce with a 1.8% fall,” said economic growth spokesperson Atwell. Per-capita GDP shrank 1.1%, underscoring the intensity of the downturn.

Market view: The economy did not merely stagnate—it abruptly reversed. The 0.9% drop eclipsed every major forecast, and the per-capita print is even bleaker. The data reinforce that the current monetary stance is insufficient; a 50 bp OCR cut in October is now required, and the RBNZ must demonstrate decisive leadership.

The kiwi was heavily offered across the board post-release, with EURNZD surging. Technically, the sharp advance has cleared most upside obstacles. Provided the current pullback holds the 20 August support, a fresh leg higher can target the key resistance at 2.0377.

Trading Direction: Buy

Entry Price: 1.9978

Target Price: 2.0377

Stop Loss: 1.9890

Valid Until: October 4, 2025, 23:55:00

Support: 1.9997/1.9917/1.9862

Resistance: 2.0077/2.0175/2.0225

The British pound corrected against the Japanese yen on Thursday, with the GBP/JPY pair trimming earlier gains but still managing to hold 0.2% higher near 200.70 in late European trade. The move came against a backdrop of diverging central bank policies, as the Bank of England (BoE) opted to keep interest rates unchanged while investors awaited fresh signals from the Bank of Japan (BoJ).

The BoE’s Monetary Policy Committee (MPC) voted 7-2 in favor of leaving the benchmark rate steady at 4.0%, following August’s 25 basis-point cut. The decision was widely expected, but the statement accompanying it offered little to those hoping for faster monetary easing. The central bank reiterated that it remains firmly committed to returning inflation to its 2% medium-term target, highlighting lingering concerns that price pressures could become embedded.

Two dovish members, Swati Dhingra and Alan Taylor, broke ranks once again, pushing for another 25 bps reduction. Their minority stance underscored a growing split within the MPC over how aggressively to cut rates as inflationary dynamics evolve. The bank also noted that it sees headline inflation peaking at 4% in September, before gradually easing, which provides some justification for a cautious stance.

For sterling, the decision brought volatility but no decisive trend shift. The pound initially popped higher but soon pared gains as traders digested the fact that while rate cuts are underway, the BoE will stick to its “gradual and careful” path of easing rather than rushing toward a looser stance.

On the other side of the pair, the yen continued to underperform its peers, reflecting both domestic uncertainty and global yield differentials. The Japanese currency weakened broadly against major counterparts, with only the New Zealand dollar faring worse on the day.

Markets are laser-focused on Friday’s Japanese consumer price index (CPI) release and the BoJ policy meeting. National CPI excluding fresh food is expected to have slowed to 2.7% year-on-year in August from July’s 3.1%. While the reading remains above the BoJ’s 2% target, the moderation provides some cover for policymakers to maintain their ultra-accommodative stance.

Consensus points to the BoJ holding rates steady at 0.5%. However, analysts caution that Governor Kazuo Ueda may leave the door open for a potential hike later this year, particularly if wage growth accelerates and price pressures prove sticky. That uncertainty keeps yen traders on edge, especially after the currency’s prolonged weakness in 2025.

From a technical perspective, GBP/JPY continues to display a bullish structure. The pair has been consolidating in recent weeks, but price action shows resilience above key support levels, suggesting that buyers remain firmly in control. Earlier this week, the pair tested and respected a significant support line, reinforcing the view that dips are being absorbed by demand.

The market recently broke and closed above a major daily resistance cluster, setting a higher high and confirming bullish momentum. Immediate resistance is seen near 201.20. A clean break above this level could trigger another leg higher, with momentum likely to carry the pair toward 202.00 in the coming sessions.

For now, the bias remains tilted to the upside as long as GBP/JPY holds above its recent lows. Traders are watching closely to see whether the pair can sustain momentum above 200.70 and mount a challenge at the next resistance zone.

BUY GBPJPY

ENTRY PRICE: 201.00

STOP LOSS: 199.80

TAKE PROFIT: 202.00

Gold prices steadied on Thursday after briefly sliding to the $3,672 region, with the precious metal regaining some ground as dollar strength faded and investors digested the Federal Reserve’s dovish policy shift. The yellow metal, which had retreated from an all-time high earlier this week in the aftermath of the FOMC decision, appears to have found near-term support as market focus shifts to the broader implications of the Fed’s outlook and ongoing geopolitical instability.

At the center of the rebound is the U.S. dollar’s stalled recovery. The greenback initially bounced after touching its weakest level since February 2022, but momentum faded during the early European session, giving space for gold to attract fresh bids. A softer dollar remains one of the strongest tailwinds for the metal, enhancing its appeal for investors seeking a hedge against uncertainty and eroding yields.

The Fed’s decision on Wednesday to cut interest rates for the first time this year – and its projection of two more reductions before year-end – reinforced the bullish narrative for non-yielding assets like gold. The move came amid mounting evidence of a cooling U.S. labor market, with policymakers signaling that easing conditions justified a more accommodative stance. For gold, which thrives in low-yield environments, the policy trajectory tilts heavily in its favor.

Beyond monetary policy, geopolitical risks remain a critical catalyst. Escalating tensions in Ukraine, where fighting continues to intensify, alongside renewed instability in the Middle East, have reinforced demand for traditional safe-haven assets. Investors appear increasingly willing to pay a premium for protection against geopolitical spillovers, particularly as global trade disruptions and energy price volatility threaten growth.

Still, not all signals point to smooth sailing for gold bulls. Market technicians warn that the metal remains in overbought territory, suggesting some caution may be warranted in the near term. Rapid price surges over recent weeks have left momentum indicators stretched, raising the risk of short-term corrections even within a broader bullish framework.

From a technical standpoint, gold has regained traction after leaning on its 50-day exponential moving average, which has acted as a reliable support base. The rebound was further amplified by momentum indicators, such as the Relative Strength Index (RSI), flashing bullish signals after briefly dipping into oversold territory. This suggests that while profit-taking dragged prices lower earlier in the week, the underlying uptrend remains intact.

As long as gold holds above the $3,661.77 threshold, the path of least resistance continues to point higher. A sustained break above $3,668 would open the door toward $3,750 in the short term, a level that could attract further speculative flows. That said, traders are likely to balance optimism with caution, given the overbought conditions that may trigger sharper pullbacks if momentum stalls.

BUY GOLD

ENTRY PRICE: 3660

STOP LOSS: 3630

TAKE PROFIT: 3750

Silver prices have dropped for three straight days, trading near $41.30 during the Asian session on Thursday. The decline comes as a strong inflation outlook has curbed expectations for additional rate cuts by the Federal Reserve, negatively impacting the price of silver, which is not directly driven by interest rate policies. Projections from the FOMC show that policymakers expect median inflation to reach 3% this year, significantly above the central bank's 2% target. The Fed announced a 25-basis-point rate cut on Wednesday and hinted at a further 50-basis-point reduction by the end of the year, slightly higher than its June projections. Meanwhile, the Bank of Canada also lowered its policy rate by 25 basis points, while the Bank of England and the Bank of Japan are expected to keep their policies unchanged this week. Federal Reserve Chair Jerome Powell pointed to growing signs of labor market weakness to explain why officials decided it was time to cut rates now, especially after concerns over tariff-driven inflation led them to hold rates steady last December. However, strong industrial demand from sectors such as solar energy, electric vehicles, and electronics — along with ongoing supply constraints — may limit the downside for silver. According to Reuters, citing industry sources, India's silver imports are also expected to strengthen in the coming months, supported by solid investment and industrial demand that has absorbed the excess supply brought about by increased exports last year.

Amid ongoing inflation concerns, central banks remain cautious. The Fed's cautious stance has strengthened the U.S. dollar and put pressure on commodities. While U.S. employment data shows a softening labor market, inflation remains the primary concern for global policymakers. The performance of the U.S. dollar on Thursday reflects the market's ongoing adjustment to the Fed's dovish stance. Despite potential concerns over a deteriorating labor market, the U.S. dollar has shown mild strength. After rebounding from Wednesday's lows, the market holds a more balanced view on the Fed's cautious approach to further easing, although significant uncertainty remains regarding the pace of future rate cuts.

Based on the daily chart, silver's Bollinger Bands are expanding upward, with moving averages trending higher. The price is moving strongly upward along the EMA12 and has not effectively broken below the uptrend line. Although the MACD shows a potential death cross, the momentum histogram has not yet weakened. The RSI stands at 63, indicating that bullish sentiment in the market remains strong. The next key resistance levels are near the previous high and the psychological integer level at $43.3 and $50. It is important to note that the price should not effectively break below the EMA50 support level at $39.2, which serves as a key dividing line between bullish and bearish momentum. A breakdown of this level would make it difficult for the price to return to an uptrend in the short term. In the 4H chart, the price is oscillating between the Bollinger Middle Band and Lower Band, signaling relative weakness. If the price can reclaim the Bollinger Middle band or the EMA50, it is likely to push upward again toward $43, or even $50. Failure to hold these levels could lead to a decline toward previous lows and the EMA200, around $40.4 and $39.9, respectively. Therefore, buying at lows is recommended.

Trading direction: Buy

Entry price: 40.8

Target price: 45

Stop loss: 38.7

Support: 40.5/40/38.7

Resistance: 41.5/45/50

The Federal Reserve has implemented a 25 basis point rate cut as anticipated, with the summary of economic projections, commonly referred to as the dot plot, indicating that policymakers expect two additional rate reductions this year. The market interpreted this as dovish guidance, leading to a broad decline in the U.S. dollar and a surge in gold prices to record highs. However, following Fed Chair Jerome Powell's cautious remarks during the post-meeting press conference regarding further easing measures, the dollar and U.S. Treasury yields rebounded strongly. According to Reuters, Powell expressed a cautious outlook on future rate cuts, stating that "this policy action is a risk management measure in response to a soft labor market, and the Federal Reserve is currently in a 'meeting-by-meeting' stance." The resurgence in dollar demand and the Fed's restraint prompted a correction in gold prices, which had previously been driven by negative yields. Based on CME Group's tools, traders currently assign an 87.7% probability of a 25 basis point rate cut at the October FOMC meeting, up from 74.3% the previous day. Given the persistent dovish expectations surrounding the Fed, any declines in gold prices may be viewed as attractive buying opportunities, supporting the continuation of its upward trend. The market is currently awaiting fresh trading momentum from the upcoming U.S. mid-term unemployment claims data. Additionally, geopolitical developments and comments from U.S. President Donald Trump may also influence gold price movements over the coming trading days.

FOMC officials anticipate an additional 50 basis point rate cut by the end of 2025, slightly above their June projections. In this voting cycle, 11 out of 12 members supported a 25 basis point reduction, with the sole dissenting vote from newly appointed Governor Stephen Miran, advocating for a larger 50 basis point cut. Notably, Governors Waller and Bowman, who previously dissented, supported the rate cut in this vote, indicating a strengthening of consensus within the committee, though some divergence in policy stance persists. Chair Powell explicitly stated at the press conference that softening labor market conditions are the primary consideration for the rate reduction. He highlighted that the three-month moving average of non-farm payroll gains has fallen to 29,000, below the "equilibrium level" necessary to maintain stable unemployment, and candidly acknowledged that current employment conditions can no longer be described as "very robust." This statement underscores the Federal Reserve's heightened concern regarding the trajectory of the employment sector.

The gold price experienced a breakout above the 4H Bollinger upper band and reached a new historical high before encountering resistance and retracing. Currently, it is supported near the EMA50, forming a consolidation pattern. The MACD line and signal line form a death cross, and the bullish momentum histogram is gradually diminishing, signaling a potential bearish divergence. The RSI stands at 39, with decreasing peaks, indicating growing market pessimism. If the price maintains support at the EMA50, upward movement toward 3,750 or even 4,000 remains possible. Conversely, failure to hold this level could lead to a decline toward the Bollinger lower band and previous lows around 3,630 and 3,613. In the 1W timeframe, after breaking above the triangle consolidation pattern, the price has surged along the Bollinger upper band. Currently, the Bollinger bands are widening upward, with the SMAs diverging and a golden cross on the MACD. The RSI is at 71, entering overbought territory, suggesting a possible correction. Overall, a retest of the triangle's upper boundary before a further breakout is plausible, but as long as the price remains above the EMA12, the upward trend remains intact. It is recommended to go long at the lows.

Trading Direction: Buy

Entry Price: 3630

Target Price: 3900

Stop Loss: 3500

Support: 3600, 3550, 3400

Resistance: 3700, 3800, 3900

Today, the Federal Reserve lowered the federal funds target rate by 25 basis points to 4.00%-4.25% during this meeting. Both the statement and economic projections hinted at further room for rate cuts in the future, citing concerns that recent weakness in employment necessitates "a faster easing" to prevent further deterioration in the labor market. The market interpreted this move as the Fed "officially opening the door to rate cuts," implying that short-term U.S. interest rates and real yields will decline, which is directly positive for euro-denominated assets.

Following the Fed's announcement, U.S. Treasury yields generally declined (with the 10-year yield falling to around the 4.0% level), reducing the attractiveness of the U.S. dollar to capital and boosting the risk premium for EUR/USD. Moreover, if the Fed clearly signals a path of quarterly rate cuts for this year, the neutral appeal of the U.S. dollar will be further weakened. This will increase the motivation to allocate to non-U.S. currencies in forex positions. At the same time, market institutions are adjusting their expectations accordingly (some major banks have moved their next rate-cut forecast forward to October), leading to a short-term capital flow bias toward risk assets and higher-yielding eurozone assets.

Based on the weekly chart, the EUR/USD pair briefly broke above 1.1900 yesterday but faced selling pressure and pulled back. It found support at the 1.1780 level today, where it bottomed out and rebounded. Currently, resistance stays in the 1.1780–1.1900 range. A decisive breakout, followed by confirmation through a pullback, could mark a turning point for short- to medium-term bulls, with further upside targeting the 1.2000 level. On the downside, the first key support is at 1.1780; a break below this level could see the pair decline toward the 1.1730–1.1710 zone.

Trading direction: Buy

Entry price: 1.1820

Target price: 1.1960

Stop loss: 1.1760

Valid Until: October 02, 2025, 23:00:00

Support: 1.1780/1.1730

Resistance: 1.1918/1.2000