On Tuesday's late trading, gold prices surged to a record high of US$3,703, as bullish sentiment regained momentum following a four-day narrow consolidation period.

Ahead of Wednesday's Federal Reserve interest rate decision, where a 25-basis-point rate cut is widely anticipated (with a mere 4% probability of a 50-basis-point cut), the U.S. dollar weakened again before the announcement, providing additional support for gold prices.

Furthermore, with rate cut expectations largely priced in, the market awaits the Federal Reserve's forward guidance, with increasing hopes for a dovish stance, which would further bolster gold's performance.

For institutions, Deutsche Bank revised its gold price forecast upwards on Monday, projecting an average price of US$4,000 for the upcoming year, surpassing the previous estimate of US$3,700. The bank suggests that favorable foreign exchange and interest rate conditions could further propel gold prices. In its report, Deutsche Bank noted, "While gold appears overvalued relative to its fair value, we attribute this primarily to robust official sector demand, which we anticipate will persist."

For market analysis, historically, gold prices have demonstrated strong performance during the past three interest rate cut cycles, commencing in January 2000, all implemented to stimulate economic expansion. Consequently, it is crucial to monitor any indications from press conferences: if the Federal Reserve prioritizes the labor market over inflation, the current rate cut cycle may accelerate, potentially increasing bullish bets on gold.

From a technical perspective, gold prices have demonstrated robust performance this week, following the completion of the anticipated triangle continuation pattern. While potential pauses may occur, the upward trend remains strong, with relative strength momentum yet to signal weakness. Furthermore, the expectation of a continued weak dollar suggests that a timely breakout could see the next resistance level at US$3,734, followed by the potential trend channel resistance at US$3,822, and the technical 'triangle' resistance at US$3,840. A 'typical' historical overbought extreme, 25% above the 40-week moving average, is projected near US$3,915.

Trading Direction: Buy

Entry Price: 3658

Target Price: 3850

Stop Loss: 3615

Valid Until: October 3, 2025 23:55:00

Support: 3658, 3624, 3600, 3577

Resistance: 3703, 3734, 3750, 3789

The Bank of Canada is widely expected to cut its policy rate by 25 basis points to 2.50% at its Wednesday meeting. This expectation is bolstered by the August Consumer Price Index, which rose 1.9% year-over-year, falling short of forecasts. Despite elevated core inflation, its stability over three consecutive months has instilled confidence among policymakers that underlying pressures are contained.

Beyond inflation, the economic growth environment has deteriorated significantly. Canada's second-quarter GDP contracted by 0.4% quarter-over-quarter, underperforming the Bank of Canada's own projections. August data revealed a second consecutive month of job losses, accompanied by a rise in the unemployment rate. These signals of weakening demand reinforce the rationale for preemptive easing. Market participants are now focused on whether Governor Macklem will acknowledge the need for further rate cuts before year-end.

According to a Reuters poll, over 70% of economists anticipate at least one more 25-basis-point cut by the Bank of Canada in 2025, with some projecting two additional cuts, potentially bringing the policy rate down to 2.00%. The Bank of Canada's stance, whether it validates these expectations or remains data-dependent, could set the tone for the Canadian dollar's trajectory.

The Federal Reserve is widely anticipated to cut interest rates by 25 basis points to a range of 4.00-4.25%, with futures markets pricing in only a 4% probability of an additional 50 basis points reduction. Market consensus increasingly favors a series of rate cuts in September, October, and December, bringing the target range to 3.50-3.75% by year-end. We will scrutinize the policy statement, the dot plot, and Chairman Jerome Powell's press conference to validate this rate cut trajectory.

Beyond the near term, attention will shift to the pace of easing in 2026 and beyond. June's projections indicate rates falling to 3.6% and 3.4% in 2026 and 2027, respectively, with the long-run neutral rate stabilizing around 3.0%. The critical question is whether the Fed signals a potential move to the 3.00%-3.25% range as early as 2026, implying a more rapid normalization of rates than previously anticipated—a development with significant implications for bonds, stocks, and the dollar.

From a technical perspective, the USDCAD is currently at a critical juncture. A decisive break below 1.3725 would establish a head and shoulders top pattern, confirming the conclusion of the corrective rebound from the 1.3538 low. This would reactivate the larger downtrend, initially retesting 1.3538. A sustained break below this level would open the path towards the 61.8% retracement of the 1.4791 to 1.3538 range.

However, bulls need not panic, as this "head and shoulders top" is not a bearish "head and shoulders top" pattern, given that its right shoulder remains above the left shoulder, and the key neckline has not been breached, thus the bearish "head and shoulders top" pattern is not yet confirmed. It is recommended to use the 50% Fibonacci retracement of the rebound as the entry point.

Trading Direction: Sell

Entry Price: 1.3800

Target Price: 1.3498

Stop Loss: 1.3900

Valid Until: October 2, 2025 23:55:00

Support: 1.3734, 1.3722, 1.3631

Resistance: 1.3798, 1.3863, 1.3892

The euro remained under sustained pressure against the Swiss franc on Wednesday, with EUR/CHF trading around 0.9320 in the American session. The pair has extended losses for a second consecutive day, reflecting investors’ growing preference for the Swiss currency as Eurozone inflation data underscored the European Central Bank’s cautious stance on monetary policy.

Eurostat figures released earlier this week showed that core inflation, which excludes volatile components such as food and energy, held steady at 2.3 percent year-on-year in August. The reading was fully in line with both market forecasts and the prior month’s outcome. On a monthly basis, core prices rose 0.3 percent, mirroring July’s increase and pointing to persistent underlying inflationary pressures across the bloc. Headline inflation eased slightly to 2.0 percent from July’s 2.1 percent, undershooting expectations, while monthly price growth decelerated to 0.1 percent against a forecast of 0.2 percent.

The data reinforced the ECB’s policy stance. At its latest meeting, the central bank opted to leave all three of its key interest rates unchanged, signaling that rates are likely at their terminal level. Policymakers acknowledged progress in taming price growth but maintained that restrictive conditions will need to remain in place for a prolonged period. The strategy reflects a central bank caught between its success in lowering inflation and the fragility of growth across major economies in the bloc. For now, the ECB appears committed to a “wait-and-see” approach, betting that time rather than additional tightening will finish the job of restoring price stability.

Markets, however, remain unconvinced about how long the ECB can hold its restrictive posture. With inflation converging closer to the 2 percent target and growth data showing signs of strain, investors have already begun speculating about potential rate cuts in 2025. This uncertainty has weighed heavily on the euro, which continues to lack upside momentum and is vulnerable to further losses if growth indicators soften further.

On the Swiss side, the disinflation narrative remains intact. The Producer and Import Price Index fell by 0.6 percent in August, translating into a sharp 1.8 percent annual decline. Inflation in Switzerland remains comfortably within the Swiss National Bank’s target range of zero to two percent, giving the central bank little reason to act aggressively. Chairman Martin Schlegel recently dismissed the likelihood of returning to negative rates but emphasized the SNB’s readiness to adapt to changing conditions. The next policy meeting on September 25 is expected to shed more light on whether the SNB will adjust its inflation and growth forecasts or maintain its steady hand. For now, the franc continues to draw strength from Switzerland’s solid inflation backdrop and reputation as a safe-haven currency.

Technically, EUR/CHF continues to reflect a bearish market structure. On the two-hour chart, the pair has been sliding steadily, with recent price action forming a Cup and Handle pattern near a key support zone. In bearish contexts, such formations typically signal continuation rather than reversal.

Should sellers defend the current levels with conviction, further downside momentum could drive the pair toward the 0.9266 area, a level that traders are eyeing as the next significant target. Upside attempts have been repeatedly capped by near-term resistance, leaving the euro with little room to recover unless a fundamental catalyst emerges to change sentiment.

SELL EURCHF

ENTRY PRICE: 0.9320

STOP LOSS: 0.9350

TAKE PROFIT: 0.9266

The British Pound extended its winning streak against the Japanese Yen on Monday, with the cross trading at its strongest levels in more than a year. GBP/JPY was last seen near 200.50, up 0.15% on the session and maintaining momentum that has lifted the pair for four consecutive days. The rally underscores two themes that continue to dominate the market: sterling’s resilience across the board and the yen’s ongoing vulnerability as traders brace for major central bank decisions later this week.

Sterling’s strength has been evident in multiple pairs, supported by expectations that the Bank of England will maintain its cautious stance when it meets on Thursday. While markets widely anticipate that policymakers will leave rates unchanged, the persistence of elevated wage growth and sticky inflation in the UK makes it difficult for the bank to adopt an overtly dovish tone. Traders see this as a reason to hold onto long-pound positions, anticipating that the central bank will remain reluctant to signal cuts too aggressively.

The yen’s weakness, on the other hand, is rooted in the Bank of Japan’s unwillingness to deviate significantly from its ultra-loose monetary policy framework. Investors are skeptical that Friday’s BoJ policy announcement will bring meaningful changes, even as Governor Kazuo Ueda continues to highlight the fragility of Japan’s recovery. With U.S. yields still elevated and the BoJ maintaining near-zero interest rates, the yen has remained on the defensive, creating a favorable backdrop for GBP/JPY to test higher ground.

From a technical perspective, GBP/JPY continues to trade within an ascending channel, a structure that highlights ongoing bullish momentum. The recent pullback into the 199.00 to 199.70 area served as an important retest of demand, with buyers stepping in to defend the zone. The rebound from this support suggests that the uptrend remains firmly intact, paving the way for a potential retest of resistance near 200.90. A decisive break above this level could accelerate gains toward the 202.00 region, a psychologically important barrier that also coincides with the upper boundary of the current channel.

BUY GBPJPY

ENTRY PRICE: 199.85

STOP LOSS: 199.400

TAKE PROFIT: 202.00

Gold prices slipped on Wednesday, dragged lower by a broadly stronger U.S. dollar as traders cut short-dollar positions ahead of the Federal Reserve’s policy decision. The precious metal retreated from the record $3,700 per ounce mark, with sellers testing—but not yet breaching—the critical $3,660 support region.

The move highlights the nervous positioning across markets in the hours before the Fed meeting. While investors overwhelmingly expect a 25-basis-point rate cut, bringing the federal funds rate into the 4.0%–4.25% range, there is growing concern that the central bank may deliver a less dovish signal than many traders are hoping for.

Markets have grown used to the Fed gradually softening its stance following a stream of weaker economic data, particularly in the labor market. A series of disappointing employment reports have heightened expectations for multiple cuts over the coming quarters. Futures markets now price in at least a quarter-point cut at each meeting for the remainder of 2025, and some traders are even projecting additional easing into early 2026.

That aggressive dovish pricing risks a sharp unwinding. Fed Chair Jerome Powell has a history of carefully managing expectations, and he is unlikely to endorse such a rapid easing path given that inflationary pressures remain above target. Any indication that the central bank is not prepared to match market bets could lift the dollar further, send yields higher, and weigh heavily on gold in the short term.

This is why the $3,660 zone has become such a pivotal battleground for traders. Gold’s decline over recent sessions has been corrective rather than outright bearish, but the failure to reclaim $3,690 resistance—a zone just shy of its all-time high—has raised questions about how much near-term upside is left without fresh catalysts.

On the charts, gold has broken below a minor intraday bullish trend line, extending its correctional losses and placing short-term pressure on momentum. However, the structure of the decline still appears orderly, with traders watching whether the metal can form a rising low around current levels.

Momentum signals also suggest selling may be stretched. Relative strength indicators have fallen into oversold territory when compared to recent price action, hinting at the potential for a positive divergence. This could represent early signals of a recovery attempt, particularly as prices converge near the 50-day EMA—a level that often provides dynamic support in trending markets.

The immediate focus remains the $3,660 trendline support, which has so far contained the downside. A sustained hold above this level would give buyers confidence to attempt another push toward $3,690, where resistance from prior highs and psychological barriers converge. A break above $3,690 would open the door for a retest of $3,700 and possibly new all-time highs if the Fed surprises dovishly.

Conversely, a clean break below $3,660 would invalidate the near-term bullish structure, potentially triggering a deeper pullback toward $3,630 or even $3,600 in the days ahead.

BUY GOLD

ENTRY PRICE: 3670

STOP LOSS: 3640

TAKE PROFIT: 3750

The UK labor market is exhibiting signs of deceleration, with slowing wage growth potentially alleviating inflationary pressures for the Bank of England. According to official data released by the Office for National Statistics on September 16, the UK employment sector shows further signs of slowdown: August saw a reduction of 8,000 jobs, marking the seventh consecutive month of decline. Additionally, the overall average weekly earnings growth rate, including bonuses, decreased from 5.0% to 4.8%, while private sector base wage growth slightly declined from 4.8% to 4.7%. Although wage increases remain above the 3% level consistent with the Bank of England's 2% inflation target, the deceleration trend indicates some easing of inflationary pressures. In this context, market consensus anticipates that the Bank of England will maintain current interest rates at the upcoming monetary policy meeting on Thursday. The weakening of labor market momentum and the slowdown in wage growth provide the central bank with additional time to assess the ongoing impact of previous tightening measures on inflation. Despite inflation remaining above target, signs of domestic demand moderation have increased, reducing the urgency for further policy tightening. Investors expect the Bank of England to hold rates steady at least until the end of the first quarter of next year, pending clearer economic data on the medium-term trajectory of the labor market and inflation. Meanwhile, monetary policy on the other side of the Atlantic is diverging. Market consensus predicts that the Federal Reserve will announce a 25 basis point rate cut at its policy meeting concluding early Thursday, as recent U.S. inflation trends and some economic indicators weaken, providing the Fed with room for policy adjustment. If the Federal Reserve cuts interest rates as expected, it may lead to a certain degree of dollar weakness, prompting capital flows toward non-dollar assets. This could even alleviate some of the passive depreciation pressure on the pound and create a more accommodative external environment for subsequent policy adjustments by the Bank of England.

Following signs of a slowdown in the U.S. labor market, market participants anticipate the Federal Reserve will cut interest rates by 25 basis points at the September meeting on Wednesday. According to the CME FedWatch Tool, traders currently assign nearly a 100% probability to a 25 basis point rate reduction at the upcoming Federal Open Market Committee (FOMC) meeting. A minority of analysts even speculate that the Fed may implement a more substantial easing. Federal Reserve Chair Jerome Powell is scheduled to deliver a policy statement and hold a press conference on Wednesday. Market participants will closely monitor the FOMC press conference and the economic projections summary, known as the "dot plot," for insights into the trajectory of U.S. interest rates. Corpay Chief Market Strategist Karl Schamotta noted, "As investors prepare for a dovish tone in Wednesday's voting record, the 'dot plot' economic projections, and the press conference, the dollar is trading broadly with a cautious tone."

In the 1W timeframe, the EURUSD price is oscillating upward along the EMA12, with resistance levels at the upper Bollinger Band and the ascending trendline. The RSI is at 62, indicating strong bullish momentum, and the MACD line and signal line are approaching a golden cross. If a golden cross occurs, the price is likely to break above 1.379, with a strong breakout potentially pushing it toward 1.40. Conversely, a weaker breakout may see a retracement back to around 1.32. In the M15 timeframe, the Bollinger Bands are contracting downward, with the SMAs diverging downward. The RSI is at 42, and the MACD line and signal line are below the zero-axis, reflecting a predominantly bearish market sentiment. Support levels are identified at the EMA200 and key psychological level at 1.362 and 1.36. The trading strategy is initially going short, followed by going long, emphasizing a buy-the-dip approach.

Trading Direction: Buy

Entry Price: 1.3575

Target Price: 1.4

Stop Loss: 1.32

Support: 1.34, 1.337, 1.32

Resistance: 1.37, 1.38, 1.4