UK Employment Data Bolstered the Pound, while Trade Concerns Weighed on the Yen

Economic

Forex

Summary:

The British pound maintained its upward trajectory, bolstered by stronger-than-expected UK employment figures, following a six-day rally. Concurrently, the Bank of Japan's latest summary of opinions revealed persistent concerns among officials regarding the risks of a global trade war, despite the tariff agreement with the U.S.

BUY GBPJPY

Close Time

CLOSED

200.017

Entry Price

204.140

196.450

208.323 +0.079 +0.04%

105.7

Pips

Loss

196.450

198.960

Exit Price

200.017

Entry Price

204.140

Fundamentals

The British pound held near its year-to-date high, consolidating gains after six consecutive days of increases. The pound received a fresh boost on Tuesday from an unexpected drop in July's initial jobless claims.

Data released by the Office for National Statistics showed that the unemployment rate for July met expectations at 4.7%, with a smaller-than-expected decrease in net employment and a decline in initial jobless claims.

Initial jobless claims fell by 6,200 in July, contrasting with the initially reported increase of 25,900 in June, which was later revised to a decrease of 15,500. The market had previously forecast another rise of approximately 20,800 for July.

Furthermore, the net employment figures showed a decrease of 8,000, significantly below the anticipated decline of 20,000, following a drop of 41,000 in June. Wage growth decelerated to its lowest point in nearly a year, with a 4.6% increase in July, down from the previous period's 5%.

These figures validate the Bank of England's Monetary Policy Committee's hawkish stance against interest rate cuts last week and strengthen the case for maintaining stable rates for the remainder of the year.

Conversely, the Japanese yen struggled last week after dovish comments from the Bank of Japan's (BOJ) policymakers. While the BOJ remains committed to continued monetary tightening, recent concerns about trade uncertainties and the impact of U.S. tariffs could hinder the bank from raising rates in the short term. Nevertheless, the BOJ has left the door open for further rate hikes for the rest of the year.

UK Employment Data Bolstered the Pound, while Trade Concerns Weighed on the Yen_1

Technical Analysis

The GBPJPY has extended its recent rally, climbing from 195.00 last week to trade near 199.98. The short-term trend has turned bullish as the asset has reclaimed its position above the 20-day SMA.

The Relative Strength Index (RSI) has been oscillating between 40.00 and 60.00 for an extended period, indicating a sideways trend.

A decisive break above 199.98 would resume the broader advance from 184.35. The next target is the 100% projection of 204.14 from 180.00.

On the downside, a break below the minor support at 198.15 would delay the bullish outlook and turn the intraday bias neutral once again.

Trading Recommendations

Trading Direction: Buy

Entry Price: 198.00

Target Price: 204.14

Stop Loss: 196.45

Valid Until: August 27, 2025 23:55:00

Support: 199.00, 198.56, 198.03

Resistance: 199.98, 200.55, 200.72

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Eva Chen

Forex

Economic

Summary:

The limited deceleration in wage growth constrains the Bank of England's capacity to lower interest rates. The unexpectedly robust labor market provides short-term support for the British pound.

BUY GBPUSD

Close Time

CLOSED

1.34766

Entry Price

1.37250

1.33000

1.33707 -0.00148 -0.11%

96.7

Pips

Profit

1.33000

1.35733

Exit Price

1.34766

Entry Price

1.37250

Fundamentals

According to data released Tuesday by the U.K.'s Office for National Statistics, the July labor market performed slightly better than anticipated, with a noticeable slowdown in the decline of employment. The number of employees on payrolls decreased by 8,000, the smallest drop since January, and significantly better than the market's forecast of -20,000. This eased market concerns stemming from the increase in corporate taxes.

Previously, since the rise in corporation tax and a substantial increase in the minimum wage last October, the cumulative reduction in employees on payrolls has reached 165,000.

In the three months leading up to June, average regular pay saw a robust 5.0% year-over-year increase, maintaining a strong growth trajectory. Despite the Bank of England's recent decision to lower the key interest rate to 4.00% last week, the rise in wages remains a source of uncertainty for monetary policy. It is anticipated that the year's final rate cut may occur this year, amid signs of gradual easing.

The modest improvement in employment data is expected to support the short-term performance of the British pound. With no clear indication that the Bank of England will accelerate its pace of interest rate cuts, the GBPUSD is likely to continue its upward trend in the coming days.

Wage Growth Remains Elevated, Potentially Limiting the BOE to a Single Additional Rate Cut This Year_1

Technical Analysis

During the European session on Tuesday, the U.S. dollar experienced a modest rebound, exerting downward pressure on the British pound. Consequently, the GBPUSD retreated from its earlier two-week high, consolidating below 1.3476 and maintaining a neutral stance for the day. The outlook for the GBPUSD remains bullish as long as the 1.3344 support level holds.

From a broader perspective, the upward trend initiated from the 1.3051 low in 2022 persists. The subsequent medium-term target is the 61.8% Fibonacci projection from 1.2099 to 1.3433, with a final objective at 1.4004. The bullish sentiment is expected to persist, even amid significant pullbacks, provided the 55-day SMA, currently at 1.3068, remains intact.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.3341

Target Price: 1.3725

Stop Loss: 1.3300

Valid Until: August 27, 2025 23:55:00

Support: 1.3413, 1.3366, 1.3318

Resistance: 1.3469, 1.3507, 1.3590

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

Sterling stays near year-to-date highs after upbeat UK labor data defies forecasts, bolstering expectations the Bank of England will hold rates steady for longer.

BUY GBPJPY

Close Time

CLOSED

199.895

Entry Price

202.000

198.500

208.323 +0.079 +0.04%

139.5

Pips

Loss

198.500

198.497

Exit Price

199.895

Entry Price

202.000

The British pound was steady near its highest levels of 2025 on Tuesday, consolidating a six-day rally, after stronger-than-expected UK labour market figures reinforced the view that the Bank of England (BoE) will resist near-term calls for interest rate cuts. The currency’s resilience comes as traders digest a surprise fall in jobless claims and a softer-than-feared drop in overall employment, even as wage growth eased to its lowest in nearly a year.

Data from the UK Office for National Statistics showed the unemployment rate held at 4.7% in the three months to July, in line with market expectations. Net employment declined by just 8,000 — far less severe than the 20,000 fall economists had projected — following a sharper 41,000 drop in June. The real surprise came in the claimant count, which fell by 6,200 in July. This was a stark reversal from June’s initial estimate of a 25,900 rise, which was itself revised to a decline of 15,500. Analysts had been bracing for another sizeable increase of around 20,800.

The data offered a shot of confidence to sterling bulls who had been bracing for evidence of a cooling labour market. While average earnings growth slowed to 4.6% in the three months to June from 5% previously — the weakest pace since mid-2024 — the figure remains well above the BoE’s comfort zone for inflation control.

"Today’s jobs report underscores why the Monetary Policy Committee is so divided," said one London-based FX strategist. "With wages cooling but still elevated, and employment holding up better than expected, there’s a strong argument for keeping rates on hold for the remainder of the year."

Indeed, last week’s BoE policy meeting revealed deep resistance among some MPC members to loosening monetary policy too soon, fearing that premature cuts could reignite price pressures. The latest labour data is likely to strengthen the hand of the hawks.

Against the Japanese yen, sterling continued to push higher, extending a robust uptrend fuelled by stark monetary policy divergence. The Bank of Japan, while signalling its intention to tighten policy eventually, struck a distinctly cautious tone last week, citing trade headwinds and the potential economic fallout from US tariffs. The remarks dampened expectations of an imminent rate hike and weighed heavily on the yen, which remains one of the worst-performing major currencies in 2025.

Technical Analysis

The GBP/JPY pair broke above the key resistance at 198.85, confirming its readiness to resume the bullish leg. Momentum carried it to 199.35, supported by positive signals from key momentum indicators.

The next upside targets are seen at 200.40, which would mark a confirmed re-entry into the upper bounds of the bullish channel. Beyond that, traders are eyeing the 78.2% Fibonacci retracement level at 202.00. The bullish scenario remains intact as long as the pair holds above the 61.8% Fibonacci correction level at 197.45; a sharp break below this threshold could signal a trend reversal.

TRADE RECOMMENDATION

BUY GBPJPY

ENTRY PRICE: 199.90

STOP LOSS: 198.50

TAKE PROFIT: 202.00

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Traders' Opinions

Summary:

WTI crude prices slipped to near two-month lows on Monday as optimism over a planned US-Russia meeting to discuss the Ukraine conflict weighed on geopolitical risk premiums.

SELL WTI

Close Time

CLOSED

62.800

Entry Price

60.000

65.000

57.233 -0.408 -0.71%

92.3

Pips

Profit

60.000

61.877

Exit Price

62.800

Entry Price

65.000

West Texas Intermediate (WTI) crude oil extended losses in early European trade on Monday, hovering around $62.50 a barrel — its weakest level since June — as traders reassessed the geopolitical risk premium ahead of a high-stakes meeting between US President Donald Trump and Russian President Vladimir Putin.

The proposed meeting, scheduled for Friday in Alaska, aims to address the ongoing Ukraine conflict. It follows a period of heightened tensions during which Trump threatened punitive measures against buyers of Russian crude. While the potential for diplomacy could mark a rare de-escalation in the standoff, it also carries implications for oil markets, potentially removing sanctions-related supply constraints that have lent prices support in recent months.

“If we do see some level of de-escalation, it would remove sanction risk from the oil market. This would likely drive prices lower, given the bearish fundamentals,” said Ewa Manthey, Commodities Strategist at ING.

Beyond geopolitics, sentiment in energy markets is being shaped by a broader macroeconomic backdrop clouded by fresh trade measures. On Thursday, Washington imposed higher tariffs on imports from dozens of countries — a move likely to stoke fears of weaker global growth and diminished fuel demand. Imports from the EU, Japan, and South Korea now carry a 15% tariff, while shipments from Taiwan, Vietnam, and Bangladesh face a 20% levy. Trump has signaled he expects these economies to offset the trade hit by investing “hundreds of billions” of dollars in the United States, though markets remain skeptical.

Oil traders are also watching domestic US data for cues. The American Petroleum Institute (API) will release its weekly crude oil stockpile estimates on Tuesday, followed by the US Energy Information Administration’s official data on Wednesday. Any larger-than-expected inventory build could deepen the bearish sentiment already gripping the market.

Adding to the mix, the US Consumer Price Index (CPI) inflation reading for July, due Tuesday, could inject volatility into both currency and commodity markets. A softer-than-expected CPI print might weaken the US dollar, offering some respite to USD-denominated assets such as crude oil. However, analysts caution that underlying demand concerns could still cap any rebound.

Technical Analysis

From a technical perspective, WTI remains under heavy selling pressure. The price has repeatedly failed to break above the key resistance at $63.75, reinforcing the dominance of the prevailing bearish trend. The commodity continues to trade along a minor downward bias on short-term charts and remains suppressed by the 50-day exponential moving average (EMA50). Momentum indicators add to the gloom — the Relative Strength Index (RSI) has rolled over after touching overbought levels, signaling fresh downside momentum.

Short-term outlooks point to a possible retest of June’s lows if sentiment fails to improve. A decisive close below $62.00 could open the way toward the $60.50–$60.00 zone, where psychological and technical supports converge. Conversely, any sustained move back above $63.75 could encourage short covering, though broader macro headwinds remain firmly in place.

TRADE RECOMMEDNATION

SELL WTI

ENTRY PRICE: 62.80

STOP LOSS: 65.00

TAKE PROFIT: 60.00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Traders' Opinions

Summary:

The U.S. dollar extended gains against the Japanese yen for a third consecutive session on Tuesday, climbing toward 148.50 ahead of key U.S. inflation data that could shape the Federal Reserve’s next move.

BUY USDJPY

Close Time

CLOSED

148.500

Entry Price

151.000

147.000

155.814 +0.255 +0.16%

150.0

Pips

Loss

147.000

Exit Price

148.500

Entry Price

151.000

The U.S. dollar extended its winning streak against the Japanese yen on Tuesday, rising for a third consecutive session to trade near 148.50 in European hours, as investors positioned themselves ahead of crucial U.S. Consumer Price Index (CPI) data for July. The reading, due at 12:30 GMT, is expected to test the market’s conviction on whether the Federal Reserve can begin cutting interest rates as soon as September.

Market focus is firmly fixed on the inflation print after June’s data showed a pickup in prices for goods heavily dependent on imports — a trend many analysts link to the latest round of tariffs imposed by U.S. President Donald Trump. With tariff effects often lagging in consumer prices, July’s report is seen as a key gauge of whether those pressures are intensifying.

Economists surveyed expect headline CPI to accelerate to 2.8% year-on-year from 2.7% in June. Core CPI, which strips out the more volatile food and energy components, is forecast to rise to 3.0% from 2.9%. Such an uptick, while modest, could undermine the Fed’s case for immediate rate cuts, forcing traders to reassess dovish bets that have built up over recent weeks.

According to CME’s FedWatch tool, markets are currently pricing in an 82% probability that the Fed will cut its benchmark rate by 25 basis points in September, bringing the target range to 4.00%-4.25%. However, stronger-than-expected inflation could reduce those odds, lifting U.S. yields and giving the dollar further support.

While U.S. rate expectations hang in the balance, the Japanese yen continues to struggle as the Bank of Japan (BoJ) signals no urgency to raise rates again this year. Last week’s BoJ Summary of Opinions revealed heightened concerns over global trade disruptions, particularly from the U.S. tariff measures. Policymakers appear wary of tightening into a slowing global environment, leaving the yen vulnerable to yield differentials and carry trade flows.

Investors will also keep an eye on Japan’s preliminary second-quarter GDP figures due Friday. Any sign of economic softness could reinforce the BoJ’s cautious stance, adding further downside pressure to the yen.

Technical Analysis

From a technical perspective, USD/JPY has broken decisively above the 148.00 resistance level, also surpassing the 50-day exponential moving average (EMA50) in the process. This breakout effectively removed a layer of downside pressure that had capped gains in recent weeks.

Momentum indicators are reinforcing the bullish bias, with the Relative Strength Index (RSI) showing positive signals despite entering overbought territory — a sign of strong buying interest rather than immediate exhaustion. The pair continues to trade within a well-defined short-term uptrend, supported by an ascending bias line.

The next key technical zone lies at 148.48, a support-turned-resistance cluster that could act as a springboard for further gains. A sustained move above this area would open the path toward 151.00, the next significant target for dollar bulls.

TRADE RECOMMENDATION

BUY USDJPY

ENTRY PRICE: 148.50

STOP LOSS: 147.00

TAKE PROFIT: 151.00

Risk Warnings and Disclaimers

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Alan

Forex

Summary:

Recent employment data released by Canada shows unexpected weakness in the labor market, which may cause the Canadian dollar to come under pressure and weaken.

BUY USDCAD

Close Time

CLOSED

1.37925

Entry Price

1.39900

1.37100

1.37700 0.00000 0.00%

85.9

Pips

Profit

1.37100

1.38784

Exit Price

1.37925

Entry Price

1.39900

Fundamentals

Canada's July employment report revealed unexpected softness, with a net loss of approximately 41,000 jobs and the unemployment rate holding steady at 6.9%. This heightened market expectations that the central bank could shift to an easing stance (e.g., a rate cut in September or more dovish language) in the near term, exerting downward pressure on the Canadian dollar.

At the monetary policy level, the Bank of Canada kept its target interest rate unchanged at 2.75% last month. It emphasized in its monetary policy report that while inflation is approaching the target, risks of slowing economic growth persist. As a result, the market is closely watching whether upcoming data will support the Bank of Canada in maintaining its current stance or initiating an easing path. If CPI or employment data remains weak, the market will further lower expectations for Canadian interest rates, thereby weakening the Canadian dollar. Conversely, a rebound in inflation or improvement in employment data could lead to a rapid recovery in the Canadian dollar.

Technical Analysis

Bottoming Out and Rebounding, Uptrend May Return_1

After a period of sustained declines, USD/CAD has recently consolidated and bottomed out around 1.3570 in the daily chart. It tested this level three times consecutively without breaking below, signaling strong support and gradual accumulation of bullish momentum. Subsequently, in early August, driven by bulls, the pair breached the upper bound of its consolidation range at 1.3760, unlocking upside potential.

Currently, after breaching 1.3760, USD/CAD rallied to 1.3879 before correcting downward. It closed higher on August 7th to halt the decline and has maintained an upward trend for three consecutive trading days since then. This indicates that the previous consolidation range's upper bound of 1.3760 transitioned from resistance to support. Moreover, the short-term shift in candlestick structure further strengthened bullish momentum.

Trading Recommendations

Trading direction: Sell

Entry price: 1.3780

Target price: 1.3990

Stop loss: 1.3710

Valid Until: August 26, 2025, 23:00:00

Support: 1.3721/1.3570

Resistance: 1.3879/1.4000

Risk Warnings and Disclaimers

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Tank

Commodity

Economic

Forex

Technical Analysis

Summary:

Similar to gold, the weakness in silver is also linked to the uncertainty surrounding potential U.S. tariffs on imported silver. Last week, silver prices surged as traders digested rumors of tariffs on kilogram-grade silver, but as the long-term implications became clearer, the upward momentum diminished.

SELL XAGUSD

Close Time

CLOSED

37.800

Entry Price

36.400

38.500

61.927 -1.614 -2.54%

70.0

Pips

Loss

36.400

38.500

Exit Price

37.800

Entry Price

38.500

Fundamentals

Similar to gold, silver's weakness is also linked to the uncertainty surrounding potential U.S. tariffs on imported silver. Last week, silver prices surged as traders digested rumors of tariffs on kilogram-level silver imports, but the upward momentum waned as the long-term implications became clearer. Market participants are awaiting the issuance of an executive order from the White House clarifying the policy, leading to a more than 2% decline in silver futures. This move could directly impact global silver liquidity, especially if refined silver imports are also affected by the policy. An additional catalyst is the upcoming release of the U.S. Consumer Price Index (CPI). Widespread market expectations are for core inflation to rise by 0.3% month-over-month, pushing the annual rate to 3%, still well above the Federal Reserve's 2% target. Weak data could diminish expectations of rate cuts, limiting silver's rebound. Conversely, soft data might provide the necessary justification for the market to push silver prices back above US$38.

The July CPI is expected to remain elevated, primarily driven by tariff impacts. The results will directly influence market pricing for a potential Fed rate cut in September and the number of rate cuts anticipated in 2025. Currently, the market assigns nearly a 90% probability to a rate cut in September, with expectations of up to three cuts next year. If CPI data remains moderate or shows signs of a new inflation slowdown, it could reinforce dovish expectations for the Fed, potentially weakening the dollar and supporting gold prices. Conversely, if inflation exceeds expectations and remains sticky, it could temper rate cut expectations, strengthen the dollar, boost U.S. Treasury yields, and dampen risk sentiment.

Is the Silver Direction Determined on the Eve of the CPI Release?_1

Is the Silver Direction Determined on the Eve of the CPI Release?_2

Technical Analysis

The silver price, in the 1D timeframe, shows Bollinger Bands contracting, with SMAs gradually flattening and prices oscillating around the middle band, indicating a potential trend reversal. The MACD histogram's upward momentum is waning, with the MACD line and signal line converging near the zero axis. The RSI stands at 53, not indicating overbought conditions. If the price cannot accelerate through the previous high of 39.53, a pullback may occur. Support levels are identified at the previous low and key psychological levels of 36.2 and 36, respectively. A swift breakout above these levels could open upward potential, with resistance at the 40 mark and the possibility of reaching 50. In the 1M timeframe, the MACD line and signal line have crossed near the zero axis and continue to ascend, while the Bollinger Bands are expanding upward, and the SMAs are diverging positively. This indicates that the bullish momentum remains robust, and the overall trend is still upward. The trading strategy is to initiate short positions initially, followed by long positions.