The U.S. dollar suffered a sudden reversal against the Japanese yen on Thursday, giving up earlier gains after fresh U.S. inflation data prompted renewed selling pressure across the greenback. The move underscored fragile sentiment surrounding the Federal Reserve’s policy outlook and highlighted how quickly positioning can shift when traders recalibrate rate expectations.

After briefly climbing above the 148.00 handle in the Asian session, USD/JPY staged a dramatic U-turn and slipped into negative territory, falling as low as 147.35 by the European afternoon. The decline marked a 0.1% drop on the day, but the reversal carried more weight than the headline change, as the pair’s failure to hold above a psychologically important resistance level reignited bearish momentum.

The catalyst came from the U.S. Consumer Price Index (CPI) report for August, which showed annual inflation accelerating to 2.9% from 2.6% in July. While the data confirmed that price pressures remain sticky, markets interpreted the details as insufficient to alter expectations for rate cuts later this year. The Fed’s challenge remains balancing a steady disinflation trend with signs of cooling growth, and investors appeared convinced that policymakers will prioritize supporting the economy rather than risking overtightening.

The softer dollar response contrasted with earlier expectations that firmer inflation would provide support. Instead, Treasury yields slipped modestly, and rate-sensitive currencies like the yen gained ground. The shift reflects how markets are increasingly looking beyond headline inflation, focusing instead on the Fed’s broader narrative that restrictive policy has largely run its course.

From a technical perspective, the outlook for USD/JPY has tilted bearish in the short term. The pair’s retreat coincided with a break below a trendline near 147.40 on lower intraday charts, erasing the momentum built earlier this week. With the 50-day exponential moving average (EMA50) acting as overhead resistance, the probability of a sustained recovery appears limited in the near term.

Momentum oscillators add weight to the downside case. The Relative Strength Index (RSI), which had previously been hovering in overbought territory, has turned lower, signaling waning buying pressure and reinforcing the likelihood of further corrective moves. We are now eyeing the 146.80 zone as the next key support level. A decisive break below that threshold could open the door to deeper losses, though short-term rebounds remain possible as markets digest the inflation-driven move.

Still, medium-term bulls have not completely relinquished control. Should the pair find strong buying interest near 146.80, a recovery back toward the 149.00 region remains plausible. That level has served as a magnet for price action in recent weeks, with traders reluctant to push the yen significantly higher amid Japan’s ongoing ultra-loose monetary stance.

SELL USDJPY

ENTRY PRICE: 147.00

STOP LOSS: 148.30

TAKE PROFIT: 145.30

The Australian dollar staged a strong rebound against its U.S. counterpart on Thursday, as investors digested a mixed batch of U.S. economic data that simultaneously confirmed persistent inflation and revealed unexpected softness in the labor market. The AUD/USD pair, which had dipped to 0.6590 earlier in the session, reversed course and pushed back toward intraday highs around the 0.6630 level.

The Bureau of Labor Statistics reported that headline U.S. Consumer Price Index (CPI) inflation rose 2.9% year-over-year in August, in line with market expectations and a modest acceleration from July’s 2.7%. Core CPI, which strips out food and energy, held steady at 3.1%, also matching consensus. On a monthly basis, inflation rose 0.4%, sharply higher than the prior 0.2% and above the 0.3% anticipated.

While inflation remains above the Federal Reserve’s 2% target, the report was not seen as alarming. Market reaction instead turned decisively after a surprise jump in U.S. Initial Jobless Claims. The number of Americans filing for unemployment benefits surged to 263,000 in the week ending September 6, well above both the previous week’s 236,000 and consensus forecasts of 235,000. The figure, the highest since mid-July, suggests that cracks are beginning to appear in what has been a resilient labor market.

For investors, the combination of inflation aligned with expectations and labor data pointing to weakness reinforced the belief that the Federal Reserve is ready to accelerate its pivot toward easing. Futures markets are now fully pricing in three rate cuts before the end of the year, one at each of the Fed’s remaining policy meetings. This aggressive repricing pressured the U.S. dollar, while equity markets rallied sharply on the prospect of looser financial conditions.

The greenback’s pullback offered breathing room for the Australian dollar, which earlier in the day had come under pressure from domestic data. Australia’s September Consumer Inflation Expectations rose to 4.7% from 3.9%, suggesting households expect price pressures to intensify. While the data supports the Reserve Bank of Australia’s cautious stance, it also raised concerns about sticky inflation eroding real incomes. Initially, this weighed on the Aussie, but broader U.S. dollar weakness quickly overshadowed the domestic release.

From a technical perspective, AUD/USD has displayed resilience near key support zones and is once again challenging a familiar ceiling around 0.6620–0.6630. The pair had initially slipped after failing to breach this barrier in earlier trading, but Thursday’s rebound signals renewed bullish momentum.

The Relative Strength Index (RSI), which had entered overbought territory earlier in the week, has reset lower, allowing the pair to build fresh upward traction. Positive signals are emerging, with price action now leaning on a short-term ascending trendline that has guided the rally from August lows. A decisive break above 0.665 could open the door toward the 0.6700 and 0.6800 psychological levels, while failure to hold recent gains risks a pullback toward 0.6580.

Overall, the technical backdrop favors buyers, especially as speculative flows remain biased against the U.S. dollar. However, traders should remain cautious given the heavy event risk ahead, including further Fed commentary and upcoming U.S. retail sales figures, which could reset market expectations for growth and consumption.

BUY AUDUSD

ENTRY PRICE: 0.6650

STOP LOSS: 0.6580

TAKE PROFIT: 0.6800

Gold (XAU/USD) remains on the back foot on Thursday, unable to build momentum despite a softer US dollar and falling Treasury yields in the wake of fresh US inflation data. The yellow metal, which briefly touched a record high near $3,675 earlier this week, is now consolidating around $3,630 per ounce and struggling to attract meaningful new buying interest. The retreat highlights investor caution ahead of a highly anticipated Federal Reserve policy decision next week, which could set the tone for bullion in the months ahead.

The latest inflation print offered a mixed picture. The US Consumer Price Index (CPI) climbed 0.4% month-on-month in August, above the 0.3% forecast and quickening from July’s 0.2% pace. On an annual basis, headline inflation held steady at 2.9%, matching expectations but marking an uptick from the 2.7% seen previously. More importantly for policymakers, the Core CPI—excluding volatile food and energy—rose 0.3% MoM and 3.1% YoY, exactly in line with consensus and unchanged from July.

The data suggest inflation remains sticky enough to prevent the Fed from easing aggressively, but not hot enough to derail the broader disinflation narrative. That nuance explains why gold has failed to extend its breakout: while inflation data reinforces the likelihood of near-term rate cuts, it also tempers the scale of market bets on deeper or faster easing.

Adding to the complexity is a stream of softer US economic readings. Recent Producer Price Index (PPI) data undershot forecasts, while the August Nonfarm Payrolls report disappointed with slower job creation and downward revisions to prior months. The unemployment rate also ticked higher, painting a picture of a labor market that is cooling more quickly than the Fed would like. Together, these releases have bolstered the case for policy easing, with futures markets fully pricing in a 25 basis-point cut next week and even leaving room for as many as three cuts before year-end.

That outlook provides a cushion for gold. Lower interest rates generally reduce the opportunity cost of holding non-yielding assets such as bullion. However, with the metal already trading near record highs, investors appear hesitant to chase prices higher until they see clearer signals from policymakers.

Gold’s performance this week illustrates the uneasy balance between short-term profit-taking and long-term structural demand. On one hand, central banks and sovereign buyers continue to accumulate gold as a hedge against currency debasement and geopolitical instability. On the other, speculative flows are increasingly tied to day-to-day shifts in Fed rate expectations, making the metal vulnerable to corrections when economic data delivers surprises.

The current price action feels less like a rejection of gold’s bullish story and more like a pause. If the Fed confirms a dovish tilt next week, a retest of $3,675 and potentially $3,700 is likely. Conversely, any indication that the central bank intends to move cautiously—or that inflation risks remain unresolved—could trigger a deeper correction, potentially back toward the $3,600 region.

On the charts, gold is showing signs of consolidation after its parabolic rally earlier this week. Prices have formed a descending triangle pattern following the sharp push to $3,674, a setup often associated with bearish continuation. The yellow metal has also retreated in intraday trading, as it searches for a higher low that could serve as a base for the next leg upward.

Momentum indicators are sending mixed signals. The Relative Strength Index (RSI) has eased from overbought conditions and is now flashing positive overlaps, suggesting that downside momentum may be fading. This supports the view that sellers are losing steam, though confirmation will require a decisive breakout from the current range.

Given the illustrated setup, traders should watch the demand zone around $3,600 closely. A break below this level could open the door for a deeper retracement, possibly toward $3,580. On the flip side, sustained buying above $3,640 would undermine the bearish triangle and shift focus back toward $3,675 and beyond.

SELL GOLD

ENTRY PRICE: 3630

STOP LOSS: 3680

TAKE PROFIT: 3580

Recently, USDJPY movements have been driven by three key factors:

Firstly, Japanese political uncertainty. The unexpected resignation of the Prime Minister and the ensuing LDP leadership transition have raised concerns over fiscal and monetary policy direction. This has temporarily weakened the yen's safe-haven appeal, putting downward pressure on the currency and driving USDJPY higher.

Secondly, gradual signals of monetary policy normalization from the Bank of Japan (BoJ). Officials have hinted at entering the "final phase" of balance sheet reduction and ETF sales. If implemented, this would be structurally bullish for the yen over the long term, though the timing and pace remain subject to political variables.

Thirdly, U.S. Treasury yields and Fed outlook. The 10-year U.S. yield has recently hovered around 4.08%, while shifting market expectations for Fed rate cuts have heightened volatility in short-term rates and dollar sentiment. A further decline in yields could weigh on the USD and support JPY against non-USD crosses.

In summary, the yen faces near-term weakness due to political shocks. However, confirmation of the BoJ's normalization path could become a critical headwind for the mid-term gains of USDJPY. Concurrently, synchronized moves in U.S. yields and the DXY may amplify directional breaks in either direction.

On the daily chart, USDJPY's recent price action shows a sequence of successively higher highs and lows, tracing out a well-defined ascending channel. This configuration implies that the near-term bias remains tilted to the upside. Within the moving-average complex, the short-term stack is aligned in a bullish sequence and the SMA144 is curling higher, reinforcing near-term upside momentum.

On the upside, USDJPY is confronted with a critical resistance at 149.00. A forceful breakout and sustained close above this level would open extension room for further upside, targeting the prior high of 150.90 and, subsequently, the upper bound of the ascending channel.

Downside risks emerge on a decisive breach of the 147.10 support. Such a move would expose the next cushion at 146.30. A break below 146.30 would confirm a bearish trend reversal in the near term.

Trading Direction: Buy

Entry Price: 147.80

Target Price: 151.10

Stop Loss: 146.20

Valid Until: September 25, 2025, 23:00:00

Support: 147.10/146.30

Resistance: 146.13/150.90

Thanks to stronger-than-expected GDP and household spending data, the Australian dollar has climbed near its July highs, reducing the likelihood of further rate cuts by the Reserve Bank of Australia (RBA) this year. Analysts predict that the AUD/USD pair will see a gentle upward trend until 2026. On September 10th, Liberal Party leader and opposition figure Sussan Ley​ removed Senator ​Jacinta Nampijinpa Price​ from her shadow cabinet role. The dismissal followed Price's controversial remarks about Indian immigrants, which were widely condemned as 'deeply hurtful.' Price had publicly refused to support Ley's leadership. In a radio interview, Price claimed that the Albanese government prioritizes migrants who are more likely to vote for the Labor Party, citing Indian immigrants as an example. These comments drew strong backlash from both the Indian community and members within her own party. Despite Ley repeatedly calling out the remarks as incorrect and demanding an apology, Price refused to retract them entirely, only stating that her comments were "not clear enough." She argued she was questioning the pressures of "mass migration." Additionally, at a press conference, Price said she would not stay "silent" on immigration issues and avoided expressing support for Ley's leadership, putting her at direct odds with the party leader.

Market analysts are taking a ​cautiously optimistic view​ of the latest PPI (Producer Price Index) data. Many point out that while weaker PPI data could justify a rate cut, the Federal Reserve is more focused on the Consumer Price Index (CPI). If the CPI data, due out on Thursday, also comes in soft, it would significantly boost the likelihood of a rate cut in September. However, some analysts caution that the tariff policies implemented by President ​Donald Trump​ could still drive inflation higher in the coming months, casting doubt on the case for aggressive rate cuts. In terms of market reaction, the U.S. dollar saw a brief dip after the PPI release, reflecting optimism around potential monetary easing. But that optimism remains tempered by uncertainty over the upcoming CPI figures and longer-term concerns about political challenges to the Fed's independence. Analysts at ​LH Meyer​ noted that while personnel changes may have a limited impact on the September rate decision, they could threaten the Fed's ability to resist political pressure and maintain independent monetary policy in the long run.

Overall, the August PPI data provides additional support for a Fed rate cut, but the final decision will hinge on the upcoming CPI report. Meanwhile, the Trump administration's public pressure and strategic personnel moves are forming a ​systemic challenge to the Fed's independence, which could have far-reaching implications for future monetary policy. Traders should closely monitor the upcoming CPI data and the Fed's policy statement in September, while staying alert to the growing influence of political factors on central bank decisions.

Based on the daily chart, the ​Bollinger Bands are expanding upwards with ​moving averages sloping upward​ and price trading strongly along the Bollinger Upper Band. The ​MACD​ forms a 'Golden Kiss' (bullish crossover) and continues to rise. The ​RSI is at 62, entering the bullish zone, indicating strong short-term bullish sentiment. Additionally, the price has formed a ​megaphone pattern, suggesting a high probability of further upside toward the upper edge of the pattern, around ​0.67. According to the weekly chart, the price is approaching the ​EMA200​, currently around ​0.667. The MACD also shows a 'Golden Kiss,' the RSI is at ​59​ (not yet in overbought territory), and the ​lows are gradually rising. However, historical patterns suggest that ​each time the price approaches the EMA200, it would undergo significant corrections—and this time may be no exception. Therefore, selling at highs will be recommended.

Trading direction: Sell

Entry price: 0.667

Target price: 0.63

Stop loss: 0.675

Support: 0.656/0.646/0.63

Resistance: 0.667/0.67/0.7

Japanese manufacturer confidence has reached its highest level in over three years, primarily driven by the July trade agreement between Japan and the U.S., which has alleviated trade uncertainties. The September manufacturing sentiment index stands at 13, surpassing August's 9 and marking the highest since August 2022. The automotive and transportation machinery sectors have shown notable strength, with sub-indices rising from 25 to 33, the highest since December 2023. Some industry managers report stable order volumes; however, export weakness has led to production stagnation. Additionally, managers in the precision machinery sector indicate that tariffs implemented by the Trump administration have suppressed order demand. Looking ahead, manufacturers generally express concerns over inflation's impact on consumer spending and rising material and labor costs. The services sector index rebounded to 27 after hitting a nine-month low in August, with improvements observed in real estate, retail, and transportation industries, while wholesale and IT sectors remain under pressure. Revised Q2 data show Japan's GDP grew at an annualized rate of 2.2%, indicating domestic consumption continues to underpin economic growth. Meanwhile, market attention remains focused on the intra-LDP leadership contest, which could influence the Bank of Japan's monetary policy stance in the coming years. The intersection of political developments and policy debates has reignited uncertainty surrounding the yen's trajectory, leading to a consolidation phase in the USDJPY.

In the U.S., the dollar remains resilient as investors await inflation data, with Thursday's report likely to serve as a pivotal point in redefining the trajectory of the financial markets toward the end of the year. July wholesale inventories increased marginally by 0.1%, below the prior forecast of 0.2%, indicating continued caution among enterprises following inventory reductions. Motor vehicle inventories declined by 1.6%, while inventories of apparel, pharmaceuticals, and food saw significant increases. Q2 inventory annualized figures decreased by US$32.9 billion, subtracting 3.29 percentage points from GDP growth; however, the narrowing trade deficit offset these negative effects, enabling the U.S. economy to rebound from a 0.5% contraction in Q1 to a 3.3% expansion in Q2. Concurrently, the August Producer Price Index (PPI) unexpectedly fell by 0.1%, below economists' forecast of a 0.3% increase, suggesting limited inflationary pressures at the production level. The primary drag was from declining service prices, with trade service profit margins decreasing by 1.7% and wholesale margins for machinery and automobiles dropping by 3.9%. Excluding food and energy, core PPI rose by 0.3% month-over-month and 2.6% year-over-year, below July's 3.1%. Following the weaker-than-expected PPI data, market traders widely anticipate the Federal Reserve to cut interest rates by 25 basis points at the September meeting and to maintain similar easing through the end of the year. Trump promptly called for an immediate and substantial rate cut via social media and repeatedly pressured the Fed; however, some analysts consider such a significant rate reduction to lack sufficient justification.

The USDJPY is oscillating between the upper and lower Bollinger Bands in the 4H timeframe, currently consolidating near the middle band. The MACD line and signal line are retracing toward the zero-axis, with some distance remaining. A golden cross has formed on the MACD, and the RSI is at 50, indicating a neutral market sentiment. If the price maintains above the middle Bollinger Band, it is likely to rally toward the upper band and previous resistance levels at approximately 148.2 and 149.2; failure to hold above this level could lead to a decline toward 145.8. In the 1W timeframe, Bollinger Bands are narrowing, with price oscillating around the middle band. Following the MACD bullish crossover, the MACD lines are retracing toward the zero-axis, and the RSI stands at 51, reflecting a predominantly sideways trend with potential for a trend reversal. The key focus is whether the price can sustain above the middle Bollinger Band; a successful hold could push the price above 150, while a failure might see a decline toward 146. It is recommended to go long at the lows.

Trading Direction: Buy

Entry Price: 147.7

Target Price: 149.6

Stop Loss: 145.8

Support: 145.8, 142.6, 141.6

Resistance: 149.6, 150, 151