GBP/USD Extends Gains as Dollar Slips to Two-Week Low, Bulls Eye Breakout

Traders' Opinions

Summary:

The British Pound rebounded against the US Dollar on Friday as mixed US economic data weighed on the Greenback, with traders reassessing Federal Reserve rate-cut odds for September.

BUY GBPUSD

Close Time

CLOSED

1.35700

Entry Price

1.40500

1.35000

1.33180 -0.00132 -0.10%

70.0

Pips

Loss

1.35000

1.34993

Exit Price

1.35700

Entry Price

1.40500

The British Pound advanced on Friday, recovering most of its prior session’s losses against the US Dollar, as investors digested a batch of US economic releases that painted a mixed picture of the world’s largest economy. The GBP/USD pair was last trading near 1.1356 in New York hours, buoyed by a weakening Greenback and renewed bullish sentiment in the broader risk complex.

Friday’s US data offered little clarity on whether the Federal Reserve will maintain its policy stance or move toward rate cuts in September. July retail sales rose by 0.5%, in line with economists’ forecasts, but slowed from June’s 0.9% increase. On an annual basis, sales expanded 3.9%, also easing from 4.4% in the prior reading. The closely watched Retail Sales Control Group — a key input for GDP calculations — gained 0.5%, undershooting the 0.8% consensus.

Industrial production data added to concerns about slowing momentum in the US economy. Output fell 0.1% in July, missing expectations for a flat reading and reversing June’s 0.4% growth. The decline was driven by weaker factory activity and lower utility production, suggesting that the industrial sector’s resilience is waning.

The Empire State Manufacturing Index, however, surprised to the upside, jumping to 11.9 in August from 5.5 previously. Yet, the stronger manufacturing survey failed to provide lasting support for the Greenback. The market’s focus remained on the broader deterioration in consumption and production metrics.

Sentiment was further dampened by preliminary University of Michigan data showing consumer confidence unexpectedly fell. The Consumer Sentiment Index dropped to 58.6 in August from 61.7 in July, missing forecasts of 62.0. While the Consumer Expectations Index edged up to 57.2 from 57.7, the headline miss stoked concerns about the sustainability of household spending in the second half of the year.

The US Dollar Index (DXY), which measures the currency against a basket of six major peers, slipped toward a two-week low around 97.80. Markets now see an 88% probability of a 25-basis-point rate cut at the Fed’s September meeting, according to CME FedWatch data — slightly lower than earlier in the week following a softer CPI print, but still indicative of strong expectations for a policy shift.

Technical Analysis

From a technical perspective, GBP/USD has been trading within an ascending channel since January 13, 2025, maintaining a constructive short-term bias. The pair’s rebound on Friday follows a rejection from the critical resistance level at 1.3590 in the prior session. The relative strength index (RSI) on the daily chart recently bounced from oversold territory near 30, signaling the possibility of renewed bullish momentum.

The RSI’s divergence from price action — where momentum is strengthening while the exchange rate consolidates — suggests underlying buying interest. Moreover, the pair continues to trade above its 50-day exponential moving average (EMA50), reinforcing the bullish case.

If GBP/USD can decisively break above the 1.3590 resistance zone, the next upside target sits near 1.40570, a level last tested before the sharp mid-year selloff. Failure to breach resistance could see the pair consolidate within the channel, with initial support at 1.3250.

TRADE RECOMMENDATION

BUY GBPUSD

ENTRY PRICE: 1.3570

STOP LOSS: 1.3500

TAKE PROFIT: 1.4050

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Eva Chen

Economic

Forex

Summary:

Sterling recouped part of Thursday's losses on Friday, nudging GBPUSD back above the 1.3540 handle. The move came despite a broad-based USD rebound triggered by July's U.S. producer-price index, which showed wholesale inflation accelerating at its fastest clip in three years.

BUY GBPUSD

Close Time

CLOSED

1.35632

Entry Price

1.38500

1.33650

1.33180 -0.00132 -0.10%

73.3

Pips

Loss

1.33650

1.34899

Exit Price

1.35632

Entry Price

1.38500

Fundamentals

The DXY—an index tracking the dollar against six major peers—slipped back below 98.00 in the European session, erasing all of Wednesday's post-PPI gains. Soft U.S. labour-market metrics underpinned the retreat: initial jobless claims unexpectedly rose and the July non-farm payrolls report revealed a marked deceleration in hiring. The data have cemented expectations that the Fed could pivot to a more accommodative stance within months.

Fed Governor Michelle Bowman told reporters that three rate cuts this year "could well be appropriate," adding that downside risks to employment now outweigh inflation concerns.

St. Louis Fed President Alberto Musalem struck a similarly dovish chord, describing U.S. economic activity as "stable but fragile" and warning of downside risks to the labour market.

CME's FedWatch currently assigns a 92% probability to a September rate reduction, up from 80% last week, while a second cut is fully discounted for December.

Sterling, meanwhile, traded on an even keel. Investors are awaiting fresh cues on the Bank of England's policy path for the remainder of the year. With UK price pressures proving sticky, money markets are pricing in a prolonged pause at current levels. The better-than-expected Q2 GDP print has also given policymakers breathing room to stay on hold.

Technical Bias Turned Positive, 1.3594 in Focus as Critical Resistance_1

Technical Analysis

During the day, GBPUSD action remains constructively biased while the price consolidates beneath the recent swing high of 1.3594. Provided the 1.3398 support zone holds, the pair is expected to extend its advance. A decisive break above 1.3594 would open the way for a retest of the yearly peak at 1.3787, extending the rally from the 1.3140 low.

Momentum indicators corroborate the bullish tilt: the 14-day RSI is printing 70—deep in overbought territory—signalling strong buying interest, though also flagging the risk of a near-term consolidation should the 1.3594 barrier cap further upside.

On the downside, immediate support is seen at 1.3417, followed by 1.3365 and the more critical 1.3311 level if sellers regain control.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.3525

Target Price: 1.3850

Stop Loss: 1.3365

Valid Until: August 30, 2025, 23:55:00

Support: 1.3487/1.3436/1.3398

Resistance: 1.3596/1.3630/1.3681

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Gold prices rebounded slightly on Friday as a softer U.S. Dollar offered mild support, but gains remained capped by rising Treasury yields and lingering inflation concerns.

SELL XAUUSD

Close Time

CLOSED

3340.00

Entry Price

3290.00

3370.00

4209.34 +11.43 +0.27%

67.4

Pips

Profit

3290.00

3333.26

Exit Price

3340.00

Entry Price

3370.00

Gold (XAU/USD) staged a modest rebound during Friday’s European session, supported by a weaker U.S. Dollar, yet the recovery remained tepid with the precious metal trapped near a two-week trough. Prices were last seen trading around $3,343 per ounce, still struggling to decisively break above the $3,350 resistance zone.

The cautious tone across markets reflects a tense geopolitical backdrop ahead of a high-stakes summit between U.S. President Donald Trump and Russian President Vladimir Putin in Anchorage, Alaska. The two leaders are expected to discuss a potential ceasefire in Ukraine, but market sentiment remains fragile. For now, traders are unwilling to fully price in a safe-haven premium, preferring to wait for tangible signs of either escalation or de-escalation before making aggressive bets.

Gold’s upside was further restrained by a renewed rise in U.S. Treasury yields, triggered by Thursday’s stronger-than-expected U.S. Producer Price Index (PPI) figures. The data reinforced the narrative that inflationary pressures remain sticky, complicating the Federal Reserve’s path to aggressive interest rate cuts. Higher yields tend to diminish the appeal of non-yielding assets like bullion, making it harder for gold to sustain rallies despite supportive currency movements.

The previous session saw gold fall over 0.50%, slipping toward $3,330 as the combination of stronger inflation data, a firmer Dollar, and higher yields weighed on sentiment.

Attention now turns to a series of high-impact U.S. economic releases due later in the day — Retail Sales, the NY Empire State Manufacturing Index, and the preliminary Michigan Consumer Sentiment Index for August. These figures could prove pivotal for short-term gold direction. Robust readings may bolster the Dollar and extend pressure on gold, while softer outcomes could provide the metal with a near-term lift.

Technical Analysis

From a technical perspective, gold’s short-term bias remains tilted to the downside. Prices continue to trade below the 50-day Exponential Moving Average (EMA50), with recent price action confirming a break below a minor bullish trendline. This has intensified downward pressure despite some oversold signals emerging on the Relative Strength Index (RSI).

While the RSI’s recovery hints at a potential pause in selling, the prevailing negative momentum remains dominant. For now, my downside targets stand at $3,330 initially, followed by $3,323 and then $3,290. The bearish setup will remain intact unless we see a decisive H1–H4 candle close above the $3,350–$3,352 zone, which would invalidate the near-term selling bias and postpone fresh short entries.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 3340

STOP LOSS: 3370

TAKE PROFIT: 3290

Risk Warnings and Disclaimers

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Tank

Economic

Commodity

Forex

Summary:

Gold is in a state of equilibrium, with bearish pressure stemming from shifting expectations of a Federal Reserve rate cut offsetting bullish sentiment driven by geopolitical uncertainties. The market is searching for a catalyst to break out of its recent trading range.

SELL XAUUSD

Close Time

CLOSED

3355.00

Entry Price

3280.00

3400.00

4209.34 +11.43 +0.27%

131.2

Pips

Loss

3280.00

3368.12

Exit Price

3355.00

Entry Price

3400.00

Fundamentals

Gold remains in equilibrium as bearish pressure from revised expectations of a Fed rate cut is offset by bullish sentiment due to geopolitical uncertainties. The market is now seeking a catalyst to propel prices beyond the recent trading range. Gold prices were affected by stronger-than-expected U.S. PPI for July, which led investors to lower their expectations for a September rate cut by the Fed. This, in turn, boosted the U.S. dollar and weighed on non-yielding gold.

The U.S. dollar remained firm today, supported by a rebound in U.S. inflation data, which reduced market expectations for aggressive rate cuts by the Federal Reserve. However, traders are closely watching upcoming economic data and policy events for further direction. The surge in the U.S. PPI has heightened concerns about future inflation, making significant rate cuts by the Fed less likely. Analysts currently forecast up to two 25-bps rate cuts by the end of the year, but even that may not materialize if inflationary pressures persist. Market participants continue to adjust their expectations based on Fed commentary and inflation data, while also monitoring global events and changes related to tariffs.

Technical Analysis

Based on the one-hour chart, gold is showing a range-bound downtrend. The Bollinger Bands have narrowed again, indicating reduced volatility. The MACD lines are repeatedly crossing above and below the zero axis, while the RSI stands at 47, not yet in oversold territory. In the short term, if gold fails to hold above 3,375 and establish a consolidation range, it may continue to decline. There are two possible scenarios: a breakout above 3,375 followed by a pullback; or a rebound toward around 3,356 before another decline. Currently, the second scenario appears more likely. Meanwhile, gold is closely tracking the 12-week EMA in the weekly chart. Compared to earlier periods, the slope of the moving averages has gradually flattened — a signal that a potential trend change may be approaching. The MACD lines are pulling back toward the zero axis but remain far from it, indicating that the adjustment phase is not yet complete. The RSI stands at 59, not in overbought territory. Overall, there is a strong possibility that gold may adjust toward the Bollinger Middle Band or the 50-period EMA, which are located at 3,230 and 3,004, respectively. Selling at highs is recommended.

Equilibrium State: Gold Awaits a Catalyst_1

Equilibrium State: Gold Awaits a Catalyst_2

Trading Recommendations

Trading direction: Sell

Entry price: 3355

Target price: 3280

Target price: 3400

Support: 3300/3280/3120

Resistance: 3400/3439/3500

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

The unexpected rise in the US July PPI dampened market expectations of Fed rate cuts, and the gold price may be dragged down.

SELL XAUUSD

Close Time

CLOSED

3344.79

Entry Price

3280.00

3376.00

4209.34 +11.43 +0.27%

47.8

Pips

Profit

3280.00

3340.01

Exit Price

3344.79

Entry Price

3376.00

Fundamentals

The primary factors influencing today's gold price movements are the unexpected rise in the US July PPI and the subsequent decline in expectations for the Federal Reserve to cut interest rates. Market bets on significant rate cuts have been weakened, limiting the appeal of interest-free assets and putting pressure on gold prices. Meanwhile, the dollar temporarily stabilized under the influence of the data, further curbing the rebound potential of gold prices denominated in dollars. Nevertheless, geopolitical and trade uncertainties continue to provide intermittent support for safe-haven buying, resulting in a volatile pattern of "sharp rises followed by declines" in gold prices in the short term.

In terms of supply and demand as well as capital availability, although some institutions remain optimistic about the central bank and institutions' medium-to-long-term allocation intentions for precious metals, the recent short-term fluctuations in ETF holdings and physical demand have not shown any decisive directional changes. Therefore, this has not completely offset the drag on gold prices caused by macro interest rate expectations. Some commodities and the stock market have experienced amplified fluctuations under the influence of data, with capital repeatedly shifting between risk assets and safe-haven assets, making the gold market more dependent on macroeconomic events.

Technical Analysis

Expectations of Fed Rate Cuts Weakened, Bears May Rejoice_1

From the daily chart, gold has been trading in a clear high-range consolidation recently. As the highs of the candlesticks gradually decline, bullish momentum in the market is weakening, and the likelihood of a short-term downtrend is increasing.

Expectations of Fed Rate Cuts Weakened, Bears May Rejoice_2

From the 4-hour chart, the recent candlestick pattern of gold has formed a head-and-shoulders top pattern, indicating an increased likelihood of a short-term downward trend in the gold price, with the first target potentially falling to the level of 3,300.

It is recommended to go short at highs.

Trading Recommendations

Trading direction: Sell

Entry price: 3345.00

Target price: 3280.00

Stop loss: 3376.00

Expiration date: 2025-8-29 23:00:00

Support: 3229.75, 3306.65

Resistance: 3374.69, 3390.36

Risk Warnings and Disclaimers

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Tank

Economic

Commodity

Forex

Technical Analysis

Summary:

SELL XAGUSD

Close Time

CLOSED

38.040

Entry Price

36.200

39.600

58.467 +0.150 +0.26%

90.8

Pips

Loss

36.200

38.948

Exit Price

38.040

Entry Price

39.600

Fundamentals

Last night, the silver price suddenly fell to 37.8. The reason was that the Producer Price Index (PPI) for July rose by 0.9% month-on-month, which was higher than the flat data in June and far exceeded the expected 0.2%. This was the largest increase in the PPI since June 2022. This report aligns with the hawkish camp in US monetary policy, which does not want to see the Federal Reserve cut interest rates in the short term. On a year-over-year basis, the overall PPI accelerated to a five-month high of 3.3%, exceeding the expected 2.5%. The core PPI, excluding food and energy, also rose by 0.9%, surpassing the forecast of 0.2%. On a year-over-year basis, the core PPI increased by 3.7%, up from the previous 2.6%.

The higher-than-expected PPI data has complicated the short-term outlook. A rate cut in September remains the baseline scenario, but the market now favors a modest 25-basis-point cut rather than a more aggressive 50-basis-point cut. The probability of a rate cut in September has dropped from nearly 100% earlier this week to just over 90%, while traders now expect only two rate cuts in 2025. Following the data release, interest rates and the dollar strengthened, with traders scaling back aggressive easing bets.

Technical Analysis

From the daily chart, the Bollinger Bands of silver are narrowing, with the moving averages flattening and converging. The price is fluctuating around the middle band of the Bollinger Bands, signaling an upcoming change in trend. The MACD histogram bars are weakening, and the MACD line and the signal line are retracting toward the zero line. The RSI value is 53, which is not overbought. Failure to accelerate above the prior high (39.53) may trigger a pullback. The support level is near the previous low and the integer level, at 36.2 and 36, respectively. If the price can break through quickly, it will open up room for an uptrend, and breaking through the integer resistance level of 40 could even push it to 50. From the four-hour chart, the price has reached a new high, but the corresponding MACD histogram bars diminished, which is a signal of a bearish divergence. The price is likely to decline in the near term. The RSI value is 46, which is not oversold. The price is likely to test the EMA200 at 37.5 in the short term. If it fails to hold, it will fall to 36.2. For the strategy, it is recommended to go short at highs.

Silver Remained Volatile After the PPI Release! Will It Continue Rising or Reverse?_1

Silver Remained Volatile After the PPI Release! Will It Continue Rising or Reverse?_2

Trading Recommendation

Trading direction: Sell

Entry price: 38.04

Target price: 36.2

Stop loss: 39.6

Support: 36.8, 36.2, 35

Resistance: 38.7, 39.6, 40

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

If this level holds, the pair could stage a bullish rebound toward the 1.1700 area, where the next key resistance level is located.

BUY EURUSD

Close Time

CLOSED

1.16397

Entry Price

1.16950

1.16100

1.16490 +0.00064 +0.05%

20.8

Pips

Profit

1.16100

1.16605

Exit Price

1.16397

Entry Price

1.16950

The Eurozone economy expanded by 0.1% in the second quarter of 2025 (Q2), confirming the preliminary reading, according to the second estimate released by Eurostat on Thursday. On an annual basis, the bloc’s Gross Domestic Product (GDP) grew by 1.4%—matching the initial estimate and fully in line with market expectations.

In Germany, July inflation came in exactly at the European Central Bank’s (ECB) and Bundesbank’s target of 2%, meeting forecasts. In contrast, Spain’s Consumer Price Index (CPI) rose by 2.7% year-on-year during the same period. These figures arrive as the ECB’s latest communication signaled a more neutral stance on monetary policy following an interest rate cut in its most recent meeting.

However, this policy shift has been accompanied by weaker sentiment indicators. The ZEW Economic Sentiment Index for the Eurozone fell sharply to 25.1 in August from 36.1 in July, while Germany’s reading declined to 34.7 from 52.7, reflecting mounting caution over the region’s growth prospects. Meanwhile, Germany’s Harmonized Index of Consumer Prices (HICP), released on Wednesday by the federal statistics office Destatis, met expectations—rising 0.4% month-on-month and holding steady at 1.8% on a yearly basis.

The ECB concluded its latest easing cycle in July after implementing eight rate cuts over the past year, lowering borrowing costs to their lowest level since November 2022 in an effort to bolster the Eurozone’s sluggish economy. Even so, some market participants believe there remains a possibility of another rate cut before the year ends.

In the United States, Treasury Secretary Scott Bessent said the Federal Reserve should cut borrowing costs by 50 basis points at its September meeting, citing weakness in the labor market. In an interview with Bloomberg, he added that interest rates “should be 150 to 175 basis points lower.”

Following his remarks, money market participants quickly moved to price in a nearly full probability of a quarter-point rate cut. Data from Prime Market Terminal now shows a 94% likelihood of a 25-basis-point reduction, with only a 6% chance assigned to a larger 50-basis-point cut at the Fed’s September 16–17 meeting.

On Tuesday, U.S. inflation data revealed that the headline Consumer Price Index (CPI) for July held steady at 2.7% year-on-year, unchanged from June and below the 2.8% forecast. Core CPI, however, surprised to the upside, rising to 3.1% from 2.9% the previous month and exceeding the 3% projection. A Bullish Correction Could Emerge from the Trendline_1

A Bullish Correction Could Emerge from the Trendline_1

Technical Analysis

EUR/USD pulled back from local highs of 1.1730 reached in the previous session, dropping to test the 200-period moving average on the 1-hour chart, currently positioned at 1.1638. This area is worth watching closely, as it aligns with an ascending trendline—potentially attracting buyers looking to re-enter after a retracement. If this level holds, the pair could stage a bullish rebound toward the 1.1700 area, where the next key resistance level is located.

Meanwhile, the RSI has fallen to 30.85, a reading generally associated with oversold conditions, suggesting that sellers may be running out of momentum. This could pave the way for an upward correction before any potential resumption of the broader downtrend. On the other hand, a decisive break below the trendline with strong bearish momentum could accelerate the move lower, extending losses in the short term.

Trading Recommendations

Trading direction: Buy

Entry price: 1.1640

Target price: 1.1695

Stop loss: 1.1610

Validity: Aug 26, 2025 15:00:00

Risk Warnings and Disclaimers

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