Data released on Tuesday revealed that the U.S. CPI figures for July closely aligned with expectations, encompassing both the headline inflation rate (month-over-month +0.19%, June +0.29%, forecast +0.2%) and the core inflation rate (month-over-month +0.32%, June +0.23%, forecast +0.3%). Notably, the modest uptick in core inflation was primarily driven by the services sector. This is often interpreted as a sign of rising inflationary stickiness, thus signaling a hawkish sentiment.

However, core goods and food inflation remained stable at moderate levels, alleviating market concerns regarding the rapid pass-through of tariff-related costs. The prevailing question is whether businesses will continue to absorb escalating costs or pass them on to consumers. While we do anticipate a further deceleration in core goods inflation, the data supports the rationale for a September rate cut by the Federal Reserve.

The implications for gold are intriguing, with the market initially experiencing an upward movement, followed by a daily low and a test of the critical US$3,331 support level. Given that the inflation data bolsters the case for a September rate cut by the Federal Reserve, a subsequent rally in gold prices is anticipated.

During the European session on Wednesday, gold prices breached the consolidation range of US$3,342-US$3358, indicating potential for further gains. However, this rally is driven by new long positions, and the market's upward movement is expected to be limited, as technical indicators still suggest a bearish trend.

A break below yesterday's low of US$3,331 is anticipated to lead to a decline towards US$3,321, with the subsequent support level at US$3,315, which would conclude this downward movement. If the prices continue to fall, the focus will shift to the new short-selling target of US$3,300.

On the upside, immediate resistance is at US$3,369, followed by US$3,380, a level whose breach would signal the definitive end of the bearish market.

Trading Direction: Sell

Entry Price: 3365

Target Price: 3300

Stop Loss: 3380

Valid Until: August 28, 2025 23:55:00

Support: 3354, 3342, 3331

Resistance: 3369, 3375, 3380

In the UK, the latest quarterly reports and labor market data indicate sluggish economic growth and a loosening labor market. The Bank of England noted in its latest Monetary Policy Report that quarterly GDP growth has been weak, employment growth has been around zero, with signs of a "gradual loosening," all of which undermine the fundamental strength of the pound. Additionally, news of slowing wage growth and a decline in employment in the UK labor market has made the market more sensitive to potential dovish signals from the Bank of England.

On the other hand, in New Zealand, inflation and monetary policy trends have recently shown a "slow growth but still within the target range" pattern. The Reserve Bank of New Zealand decided last month to keep the Official Cash Rate at 3.25% and signaled that inflation may rise to the upper end of the target range in the short term, leaving room for monetary policy maneuvering. Meanwhile, the Q2 CPI rose moderately but remained below some expectations. Market views on when the RBNZ might adjust interest rates are gradually evolving, which may provide relative support for the New Zealand dollar.

Overall, the British pound is constrained by downside risks in domestic growth and employment, limiting its upside potential. In contrast, the New Zealand dollar is supported by expectations of a domestic inflation rebound.

The recent trend of GBP/NZD shows a clear range-bound pattern in the daily chart. There have been multiple consecutive attempts to break above the upper range resistance level of 2.2750, all of which have failed. In addition, yesterday's upward test of this resistance level was also unsuccessful, increasing short-term upward pressure and signaling a gradual weakening of bullish momentum.

At present, if today's closing candlestick is bearish, GBP/NZD may continue to retreat toward the lower range support level of 2.2200 in the short term. A strategy of selling at highs is recommended.

Trading direction: Sell

Entry price: 2.2650

Target price: 2.2280

Stop loss: 2.2780

Valid Until: August 27, 2025, 23:00:00

Support: 2.2560/2.2293

Resistance: 2.2704/2.2750

The Office for National Statistics in the UK reported on Tuesday that the unemployment rate experienced a slight increase over the three months ending in June, while the official unemployment rate remained steady at 4.7%, reaching its highest level in four years. The data corroborates the Bank of England's view that both the labor market and wage growth are weakening; however, following last week's quarter-percentage-point rate cut to 4%, it is unlikely that the Bank will cut interest rates further.

The U.S. Dollar Index retreated to around 98, primarily influenced by moderate US CPI data. The broad CPI increased by 0.2% month-over-month and remained steady at 2.7% year-over-year, below expectations. Despite core CPI rising to its highest since February, market consensus suggests the probability of a Federal Reserve rate cut in September has risen again, approaching 95%, leading to a weakening of the dollar against the euro and yen. Geopolitical factors, such as the extension of U.S.-China tariff truce and easing tensions ahead of the Trump-Putin summit, have alleviated some pressure. Nonetheless, concerns over global economic slowdown continue to weigh on the dollar. Overall, since August 1, the dollar has shifted into a weaker trend, with further declines possible unless upcoming economic data strongly support a reversal.

In the 4H timeframe, the GBPUSD price is trending along the upper Bollinger Band, with the Bollinger bands expanding upward and SMAs diverging positively. The MACD has generated a bullish crossover above the zero axis, with the MACD line and signal line diverging from the zero axis, indicating no short-term bearish divergence. However, the RSI at 75 suggests overbought conditions, which could lead to a minor correction, but as long as the price remains above the middle Bollinger Band, the overall bullish trend remains intact. In the 1D timeframe, after finding support at the EMA200, the price has surged strongly, with two large bullish candles confirming the price's stabilization above the middle band and moving toward the upper band. Resistance levels are at previous highs and the upper Bollinger Band, specifically 1.358 and 1.363. If the price can break and hold above 1.363, it is likely to rise toward 1.38 or even 1.40. The daily MACD shows a bullish crossover near the zero line, and with the RSI at 59, not overbought, the upward momentum is expected to continue. It is recommended to go long at the lows.

Trading Direction: Buy

Entry Price: 1.35

Target Price: 1.36

Stop Loss: 1.345

Support: 1.345, 1.34, 1.337

Resistance: 1.36, 1.362, 1.378

The escalating political uncertainty in Japan risks prolonging policy gridlock, thereby impacting the drafting of next year's budget and the timing of the Bank of Japan's next interest rate hike, casting a shadow over the fragile economic outlook. Prime Minister Shigeru Ishiba faces increasing calls for resignation within the ruling Liberal Democratic Party and is widely held responsible for the party's poor performance in the July Senate elections and last year's House of Representatives elections. Although Ishiba denies plans to resign, his declining approval ratings have sparked doubts about his political future, and leadership changes could influence fiscal and monetary policy trajectories.

The US dollar continued its decline during Asian trading hours today, extending the effects of Tuesday's soft Consumer Price Index (CPI) data. US Treasury Secretary Janet Yellen further urged the Federal Reserve to consider a 50 basis point rate cut in September to “offset” the delays caused by earlier easing measures. Despite the firm tone, federal funds futures indicate that markets have yet to fully accept Yellen’s proposal. Currently, there is a 94% probability of a 25 basis point rate reduction in September, with the remaining likelihood of no change. The possibility of a 50 basis point cut in September has not garnered significant attention among traders. The odds of a rate cut in October stand at 60%, though the consensus remains that only two rate cuts are expected throughout 2025.

In the 4H timeframe, the USDJPY price is currently experiencing resistance at the upper Bollinger Band and has retraced, now oscillating around the middle Bollinger Band. The MACD has generated a bearish crossover, while the RSI stands at 46, indicating the market is not oversold. If the price fails to hold above the middle Bollinger Band, it may decline toward the EMA200 and previous support levels at approximately 147.1 and 146.6. In the 1W timeframe, Bollinger Bands are narrowing, with price oscillating between the upper and lower bands. The MACD has formed a bullish crossover, with the MACD line and signal line approaching the zero axis, and the RSI is at 51, indicating a neutral stance. Overall, the weekly trend is consolidative, with potential for a trend reversal. Key support to monitor is whether the price can sustain above the middle Bollinger Band; a successful hold could lead to an upward breakout beyond 151, while failure to do so may see a decline toward 142. It is recommended to go short at the highs in the short term.

Trade Direction: Sell

Entry Price: 147.8

Target Price: 146.6

Stop Loss: 148.6

Support: 147, 146.6, 145

Resistance: 148.6, 149, 151

U.S. President Donald Trump announced on Monday that he had agreed to postpone the implementation of broad tariffs on China for an additional 90 days, just hours before the expiration of the previous agreement between the world’s two largest economies. The move offers temporary relief to global markets, though uncertainties surrounding trade negotiations remain firmly in place.

On Tuesday night, U.S. Treasury Secretary Scott Bessent gave an extensive interview to Fox Business, covering a wide range of domestic and international policy issues. Bessent noted that upcoming U.S. Supreme Court rulings on tariffs could be shaped by the projected revenue such measures would generate. He also underscored that President Trump and Chinese President Xi Jinping maintain a “good relationship” and suggested that the Federal Reserve (Fed) should seriously consider delivering a double rate cut at its September 17 meeting.

According to Bessent, the Fed could have acted sooner—possibly as early as June—if more precise economic data had been available. He emphasized that Trump remains open to appointing a new Fed chair, with the administration aiming to select a candidate capable of “revitalizing” the institution, which he described as facing a “fundamental problem” in its current structure.

Turning to trade, Bessent pointed out that negotiations with India have been met with some resistance, while discussions with China are progressing across several key areas. He reiterated Trump’s strong rapport with President Xi, noting that both sides are expected to meet again in the next two to three months. However, he cautioned that any reduction in Chinese tariffs would likely require months—or even up to a year—of demonstrable progress in curbing fentanyl flows into the United States.

Separately, Kansas City Fed President Jeffrey Schmid stated on Tuesday that the modest inflationary impact of tariffs should be viewed as evidence that monetary policy remains “appropriately calibrated,” rather than as grounds for immediate rate cuts.

Fresh data from the U.S. Bureau of Labor Statistics showed that the headline Consumer Price Index (CPI) rose 0.2% month-over-month in July, matching expectations and easing from June’s 0.3% gain. On an annual basis, headline inflation held steady at 2.7%, just under the 2.8% consensus forecast. Core CPI, which excludes volatile food and energy prices, rose 0.3% m/m and 3.1% y/y, both exceeding market expectations. While the stronger core reading tempered the dovish narrative somewhat, investor focus largely shifted to the softer headline data and the broader disinflationary trend.

Following the CPI release, CME’s FedWatch tool indicated a 94% probability of a 25-basis-point rate cut in September, up from 84% before the data.

XAUUSD recently found support near the convergence of the 100-period and 200-period moving averages on the four-hour chart, located at 3357 and 3343 respectively. If this area continues to hold firmly, there is potential for a renewed bullish move, as the broader trend remains upward. A decisive break above the descending trendline could open the path toward the next resistance at 3434.

The Relative Strength Index (RSI) recently touched 38, approaching oversold territory—an area that could attract fresh buying interest from bulls. However, if the 200-period moving average is breached to the downside, the price could target the next support level near 3311. This zone might also provide new long opportunities, though the potential for interest rate cuts could draw market attention to other risk assets before gold, particularly if gold begins to underperform relative to equities or higher-yielding instruments.

Trading direction: Buy

Entry price: 3351

Target price: 3430

Stop loss: 3290

Validity: Aug 22, 2025 15:00:00

US Treasury Secretary Scott Bessent gave an interview to Fox Business on Tuesday night, addressing a broad range of domestic and international policy matters. According to Bessent, upcoming U.S. Supreme Court rulings on tariffs could be influenced by the projected revenue such measures would generate. He also noted that U.S. President Donald Trump and Chinese President Xi Jinping maintain a “good relationship” and suggested that the Federal Reserve (Fed) should consider delivering a double rate cut at its September 17 meeting.

Bessent remarked that the Fed could have acted earlier, potentially cutting rates in June if more accurate data had been available. He added that President Trump remains open-minded regarding the next Fed chair and expressed the administration’s desire to appoint someone capable of “revitalizing” the institution, underscoring what he described as a “fundamental problem” within the central bank.

On trade, Bessent highlighted that India has been somewhat resistant in ongoing negotiations, while talks with China are progressing through several key variables. He reaffirmed Trump’s strong rapport with President Xi and noted that U.S. and Chinese officials are expected to meet again within the next two to three months. However, Bessent stressed that any easing of Chinese tariffs would require sustained progress—potentially months or even a year—on curbing fentanyl flows.

Separately, Kansas City Fed President Jeffrey Schmid stated on Tuesday that the mild inflationary effect of tariffs should be viewed as evidence that monetary policy is “appropriately calibrated,” rather than as a justification for immediate rate cuts.

Fresh figures from the U.S. Bureau of Labor Statistics showed that headline Consumer Price Index (CPI) rose 0.2% month-over-month in July, matching expectations and slowing from June’s 0.3% gain. On an annual basis, headline inflation remained steady at 2.7%, slightly below the 2.8% consensus forecast. Core CPI, which excludes volatile food and energy prices, increased by 0.3% m/m and 3.1% y/y—both above expectations. While the stronger core reading tempered the dovish narrative somewhat, market attention largely focused on the softer headline data and the broader disinflationary trend.

Following the release, CME’s FedWatch tool indicated a 94% probability of a 25-basis-point rate cut in September, up from 84% before the data.

In the UK, the Office for National Statistics reported that Average Earnings excluding bonuses rose 5.0% y/y, matching both forecasts and the previous reading. Including bonuses, wage growth slowed to 4.6% from 5.0%, falling short of the expected 4.7%. The Claimant Count fell by 6,200 in July, defying expectations for a 20,800 increase, after a prior gain of 15,500. The claimant rate held steady at 4.4%. Employment growth surprised to the upside, with 239,000 jobs added in the three months to June, up from 134,000 previously. However, the ILO Unemployment Rate stayed at 4.7%, its highest level since mid-2021, signaling persistent slack in the labor market despite robust wage growth.

The Bank of England cut its benchmark rate by 25 basis points to 4.00% in August, with policymakers opting for a “gradual and cautious” approach to further easing in a tight 5-4 vote.

GBP/USD has rebounded from its local low of 1.3152, a key support level tested on August 1, climbing back toward the current 1.3500 region. This area aligns with the 100-period moving average on the 12-hour chart and coincides with a notable RSI divergence. The RSI has risen sharply to 62—approaching overbought territory—while exceeding prior RSI highs recorded at even higher price levels, forming a bearish divergence. This pattern suggests bullish momentum could be waning as the pair nears overbought conditions.

The next resistance at 1.3590 will be pivotal. A failure to break higher at this level could signal a deeper corrective phase, while a clear breakout could extend the bullish move. Furthermore, the current zone sits between the 0.618 and 0.50 Fibonacci retracement levels, reinforcing the case for a corrective setup. If price action begins to show rejection and renewed downside pressure from here, short opportunities could emerge, targeting a move back toward the 1.3152 local low.

Trading direction: Sell

Entry price: 1.3500

Target price: 1.3160

Stop loss: 1.3650

Validity: Aug 22, 2025 15:00:00