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

The Swiss National Bank (SNB) is set to announce its next monetary policy decision on September 25, with markets widely expecting rates to remain unchanged at zero. Policymakers have recently shown greater tolerance toward a stronger Swiss franc, arguing that rising costs abroad have helped reduce the extent of its real overvaluation.

Meanwhile, the Producer and Import Price Index fell by 0.6% in August, marking a sharp annual drop of 1.8%. Broader inflation continues to sit comfortably within the SNB’s 0–2% target range, easing the urgency for further policy accommodation.

SNB President Martin Schlegel has downplayed the need for negative rates but reiterated that the central bank remains flexible and ready to adapt to evolving data. The September 25 policy meeting will be pivotal, as updated inflation forecasts and growth risks are expected to guide the bank’s future policy stance.

Across the Atlantic, the Federal Reserve acknowledged growing downside risks to the U.S. labor market, noting that while unemployment remains relatively low, it has edged slightly higher. The policy decision was not unanimous, with Governor Stephen Miran voting in favor of a more aggressive 50 basis-point cut, aligning with some analysts who had anticipated such a move.

During the press conference, Fed Chair Jerome Powell remarked that labor demand has “softened,” while inflation remains “somewhat elevated.” He highlighted that the balance of risks has “shifted,” stressing that monetary policy is well-positioned to respond as needed, though he cautioned that the labor market is “not strong.”

Powell also dismissed speculation about a larger cut, saying there was “no broad support for a 50 basis-point cut today,” and underscored that the Fed is not rushing to ease policy further.

The Fed’s statement reiterated its concerns about downside risks to employment, while acknowledging that price pressures have increased and remain “somewhat elevated.” According to the Summary of Economic Projections (SEP), most officials now expect the federal funds rate to end 2025 at 3.6%, with GDP growth at 1.6% and unemployment rising to 4.5%. Inflation is projected to end the year at 3%, while core PCE is seen holding at 3.1%. Policymakers expect inflation to return to the 2% target by 2028.

U.S. Treasury yields slipped after the Fed delivered its first rate cut since December last year, sparking a rally in risk assets. Investors grew more confident that lower borrowing costs will support the U.S. economy, particularly its lagging labor market, driving Treasury yields lower across the curve.

Recent U.S. data painted a mixed picture for August. Housing Starts tumbled 8.5% month-over-month, wiping out July’s 3.4% gain, dropping to 1.307 million units from 1.429 million — the lowest level since May. Building Permits also fell by 3.7%. In contrast, Retail Sales beat expectations, climbing 0.6% versus a forecast of 0.2%, while the Control Group — a key input to GDP calculations — rose 0.7% following a 0.5% gain in July.

USD/CHF briefly dipped to 0.7831 during the volatility surrounding the Fed’s decision, pushing the RSI on the 12-hour chart down to 27 — deep in oversold territory. However, this downside move proved short-lived, as the pair rebounded and closed back above the key support level at 0.7875, which was last tested on July 1. This rebound suggests that the support is being defended, potentially encouraging traders to begin building long positions targeting the descending trendline and the psychological resistance zone around 0.8000.

The 100- and 200-period moving averages sit at 0.8018 and 0.8096 respectively, having closely tracked price throughout its downtrend. These levels could become near-term upside targets if bullish momentum strengthens. Should USD/CHF break above the descending trendline and sustain gains, the recovery could extend further. However, a pullback from these resistance levels cannot be ruled out if sellers return to defend the broader downtrend.

Trading direction: Buy

Entry price: 0.7890

Target price: 0.8000

Stop loss: 0.7810

Validity: Sep 26, 2025 15:00:00

The Federal Reserve acknowledged mounting downside risks to the labor market, noting that although unemployment remains relatively low, it has shown a slight uptick. The policy decision was not unanimous, as Governor Stephen Miran voted in favor of a deeper 50 basis-point rate cut, aligning with the expectations of some analysts who had anticipated a more aggressive move.

During the post-meeting press conference, Fed Chair Jerome Powell stated that labor demand has “softened,” while inflation remains “somewhat elevated.” He highlighted that the balance of risks has “shifted,” stressing that monetary policy is well-positioned to respond as needed, though he cautioned that the labor market is “not strong.”

Addressing speculation about a larger cut, Powell dismissed the notion, saying there was “no broad support for a 50 basis-point cut today,” and underlined that the Fed is not in a rush to ease policy.

The Fed’s statement reiterated its concerns about downside risks to employment, noting that while the jobless rate is still low, it has risen slightly. On inflation, the central bank remarked that price pressures have increased and remain “somewhat elevated.”

The Summary of Economic Projections (SEP) showed that most officials now expect the federal funds rate to end 2025 at 3.6%, with GDP growth at 1.6% and unemployment rising to 4.5%. Inflation is projected to end the year at 3%, with core PCE seen holding at 3.1%. Policymakers expect inflation to return to their 2% target by 2028.

U.S. Treasury yields fell after the Fed delivered its first rate cut since December last year, triggering a rally in risk assets. Investors grew more confident that lower borrowing costs will support the U.S. economy, particularly the lagging labor market, helping reduce Treasury yields across the curve.

On the economic data front, U.S. figures painted a mixed picture for August. Housing Starts plunged 8.5% month-over-month, erasing July’s 3.4% gain, falling to 1.307 million units from 1.429 million — the lowest since May. Building Permits also declined by 3.7%. In contrast, Retail Sales surprised to the upside, climbing 0.6% versus expectations for a 0.2% increase. The Control Group, which feeds directly into GDP calculations, rose 0.7% after a 0.5% gain the previous month.

The U.S. Dollar Index (USDX) found support as it approached the 95.95 level, which previously acted as a strong base on July 1. From that level, the index staged a rally that peaked near 100 on August 1. Since that local high, USDX has retraced back toward the 95.95 support zone, briefly dipping into it before bouncing higher again. If this level continues to hold in the upcoming sessions, it could serve as the launch point for another upward leg toward 97.86 — the next key resistance area.

This level is particularly notable because the 100- and 200-period moving averages on the 8-hour chart converge around 97.82 and 97.72 respectively, which could act as magnets for price during a potential corrective rally.

Meanwhile, the RSI has dropped to 25.66, firmly into oversold territory not seen in recent months. Traders may watch for signs of waning bearish momentum, as fading selling pressure could attract dip buyers looking to position for a rebound. If buyers manage to sustain the initial rejection from the support zone, bullish momentum could strengthen, paving the way for a potential recovery rally.

Trading direction: Buy

Entry price: 96.60

Target price: 97.86

Stop loss: 95.60

Validity: Sep 26, 2025 15:00:00

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