UK Retail Weakness Meets BoJ Policy Uncertainty, Yen Under Pressure

Forex

Central Bank

Summary:

GBPJPY extended gains on Friday, propelled by sustained yen weakness stemming from uncertainty around the timing of the Bank of Japan's (BoJ) next rate hike. This occurred despite UK May retail sales unexpectedly plunging 2.7% month-on-month (MoM), far worse than the anticipated 0.5% decline.

BUY GBPJPY

Close Time

CLOSED

195.989

Entry Price

198.500

193.490

207.535 -0.788 -0.38%

161.5

Pips

Profit

193.490

197.604

Exit Price

195.989

Entry Price

198.500

Fundamentals

GBPJPY strengthened for a second consecutive session on Friday, holding steadily above the 195.00 level during Asian and European trading hours. The pair's advance was primarily driven by yen softness amid persistent uncertainty regarding the BoJ's future rate hike trajectory.

Data from the UK's Office for National Statistics (ONS) revealed May retail sales plummeted 2.7% MoM, significantly underperforming consensus forecasts of a 0.5% drop and marking the largest monthly decline since December 2023.

The contraction was led by a sharp 5.0% MoM fall in food store sales. This completely reversed April's 4.7% gain and represented the largest decline in this category since May 2021. Non-food store sales also declined, falling 1.4% MoM, reflecting weakened purchasing in department stores and household goods amid cautious consumer sentiment.

Despite the May setback, retail sales for the three months to May showed a 0.8% increase compared to the previous quarter ending February.

Ongoing challenges for the yen continued to underpin GBPJPY.

Minutes from the BoJ's May policy meeting showed the Policy Board remained vigilant towards "extremely high uncertainties" arising from global trade tensions. While the BoJ maintained its short-term policy rate at 0.5%, it substantially downgraded its economic growth and inflation outlooks, primarily citing expected negative impacts from anticipated US tariff hikes.

Members reiterated that further rate hikes would remain "appropriate" if economic activity and price developments align with projections, consistent with the path of gradual policy normalization. However, a core theme of the meeting emphasized the critical need for policy flexibility and data dependence. Several members stressed the importance of "carefully examining" the evolving outlook before taking action.

Many members cautioned that it was crucial to judge "whether the outlook... is materializing without any preconceptions." One policymaker acknowledged that the likelihood of projections being achieved was "not as high as before," while another emphasized the necessity of balancing upside and downside risks.

The minutes also revealed internal divergences. One member argued that policy must remain "flexible and more nimble," even as the BoJ enters a pause phase. Another member warned that simultaneous supply chain disruptions and surging inflation could entrap Japan's economy, especially given that "inflation expectations are not as well-anchored as in the US."

UK Retail Weakness Meets BoJ Policy Uncertainty, Yen Under Pressure_1

Technical Analysis

The intraday technical outlook for GBPJPY remains neutral-to-bullish. The pair breached the upper boundary of its triangle consolidation pattern twice (on June 10th and 17th), signaling a market inclination to extend the uptrend.

Provided the key support level at 193.75 holds, further upside is anticipated. A sustained break and hold above the 196.82 resistance would open the path for bulls to target the next resistance at 199.78.

Conversely, a decisive break below the 193.75 support would signal a potential near-term trend reversal, shifting the focus downwards towards testing the 191.85 support level.

Trading Recommendations

Trading Direction: Long

Entry Price: 196.00

Target Price: 198.50

Stop Loss: 193.49

Deadline: July 05, 2025, 23:55:00

Support: 195.53/194.58/194.00

Resistance: 196.68/196.84/197.06

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Warren Takunda

Traders' Opinions

Economic

Summary:

The Euro edged higher against the U.S. Dollar on Friday, supported by a cooling in geopolitical fears and softer U.S. economic data.

BUY EURUSD

Close Time

CLOSED

1.15251

Entry Price

1.16867

1.14200

1.17570 +0.00176 +0.15%

74.6

Pips

Profit

1.14200

1.15997

Exit Price

1.15251

Entry Price

1.16867

The Euro continued to edge higher against the U.S. Dollar on Friday, navigating a cautious but supportive global landscape as traders digested a mix of geopolitical signals, diverging central bank outlooks, and a softening U.S. economic backdrop. Despite a muted trading session, EUR/USD maintained a firm tone near 1.1510, just off its intraday high of 1.1535, reflecting modest Euro strength amid Dollar softness.

The modest bid in the Euro was fueled in part by a dialed-down geopolitical tone from Washington. U.S. President Donald Trump, addressing concerns over escalating tensions in the Middle East, stated he would decide “within two weeks” on potential U.S. involvement in the ongoing Israel–Iran conflict. While uncertainty remains, the absence of immediate military action helped soothe global risk sentiment, reducing safe-haven demand for the Greenback.

The U.S. Dollar Index (DXY), a gauge of the greenback against a basket of major currencies, traded lower around 98.75 on Friday — slipping below the psychological 99.00 threshold. Investors took note of subdued U.S. economic data, particularly the Philadelphia Fed Manufacturing Index, which held steady at -4.0 in June, disappointing expectations for a slight rebound to -1. The flat reading signals continued weakness in the U.S. manufacturing sector, a drag reinforced by early signs of labor market softening and cooling domestic demand.

Combined with concerns over tariffs and geopolitical volatility, the Fed’s cautiously neutral tone earlier this week contributed to the Dollar's mild retreat. The central bank left its benchmark interest rate unchanged for the fourth consecutive meeting, keeping the federal funds target range at 4.25%–4.50%, as policymakers attempt to balance persistent inflation pressures with signs of a slowing economy.

Headline inflation in the U.S. edged up slightly to 2.4% in May, while core inflation held steady at 2.8%, still well above the Fed's 2% target. Fed Chair Jerome Powell, in his post-meeting remarks, emphasized the need for further data clarity, warning that renewed price pressures — including those stemming from higher tariffs or escalating geopolitical tensions — could delay the Fed's ability to cut rates.

Across the Atlantic, the Euro remains resilient, bolstered by easing inflation and an increasingly transparent European Central Bank (ECB) trajectory. Eurozone headline inflation dipped to 1.9% in May — below the ECB’s 2% mandate for the first time in several months — while core inflation also edged lower. The data, while encouraging, comes against the backdrop of spiking energy prices due to conflict-driven oil market volatility, raising concerns about a resurgence in input costs.

The ECB, which cut rates for the eighth time earlier this week, signaled it may be approaching the end of its easing cycle. Speaking from Italy, ECB Governing Council member François Villeroy de Galhau reiterated that while the door to further accommodation remains open, it would likely take a fresh external shock — such as a full-blown Middle East escalation — to materially alter the bank’s current course. Importantly, Villeroy also noted that the Euro’s relative strength against the U.S. Dollar could help mitigate the inflationary impact of rising oil prices, further reducing the urgency for deeper cuts.

Technical Analysis

From a technical perspective, EUR/USD continues to show strength on shorter timeframes, with price trading above the 50-period exponential moving average (EMA) and maintaining a bullish trajectory aligned with a key bias trendline. The 30-minute chart reveals a classic ABC corrective pattern, now completed with a low at point D — suggesting that the recent correction phase may be over.

Price action is currently flirting with the 1.1510 region, with upside potential targeting resistance at 1.16016 and 1.16311. A sustained move above these levels could open the path toward the 0.618 Fibonacci extension at 1.16867, which also aligns with a broader breakout zone.

That said, the Relative Strength Index (RSI) has entered overbought territory, hinting at a possible short-term pause or consolidation. Traders may want to wait for a retest of broken resistance or a minor pullback before considering long positions, especially as macro risk remains fluid.

TRADE RECOMMENDATION

BUY EURUSD

ENTRY PRICE: 1.1525

STOP LOSS: 1.1420

TAKE PROFIT: 1.16867

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

Summary:

Despite a dramatic UK retail sales miss, the Euro failed to sustain gains against the Pound as the BoE’s hawkish pause provided Sterling with support.

SELL EURGBP

Close Time

CLOSED

0.85300

Entry Price

0.84000

0.85700

0.87809 +0.00020 +0.02%

40.0

Pips

Loss

0.84000

0.85701

Exit Price

0.85300

Entry Price

0.85700

The Euro (EUR) edged lower against the British Pound (GBP) on Friday, retreating modestly despite a sharply disappointing set of UK retail sales figures. While on the surface this data might have favored further Euro upside, the Pound proved resilient — buoyed by the Bank of England’s recent policy stance and underlying strength in investor sentiment.

At the time of writing, the EUR/GBP pair is trading near 0.8530, down slightly from recent two-month highs, as investors digest the implications of the latest macroeconomic releases and central bank signals. This comes after a two-week rally that saw the pair grind higher amid broader Euro strength and a mixed outlook for UK economic data.

Data from the UK Office for National Statistics (ONS) showed that retail sales volumes plunged 2.7% in May — a stark miss compared to market expectations for a 0.5% decline. This marked the steepest monthly contraction since December 2023, with all major categories — food, clothing, and household goods — registering notable pullbacks. On a year-on-year basis, sales fell 1.3%, erasing the strong 5% growth recorded in April and casting a shadow over the health of consumer demand entering the summer.

Despite this gloomy print, the British Pound remained firm. Much of this resilience can be attributed to Thursday’s Bank of England decision, where policymakers opted to keep the benchmark interest rate steady at 5.25%. The decision, while expected, signaled a continued commitment to a cautious, data-dependent approach. Crucially, the tone struck by Governor Andrew Bailey and other officials was less dovish than markets had anticipated, dampening expectations for an imminent rate cut and helping to anchor Sterling.

On the other side of the channel, the Euro’s retreat appears linked to shifting expectations around European Central Bank (ECB) policy. Several ECB officials — including France’s François Villeroy de Galhau and Spain’s Luis de Guindos — have signaled a growing willingness to cut interest rates further this year, as inflation continues to trend lower across the Eurozone.

Headline inflation dropped below the ECB’s 2% target for the first time in months, while core inflation — a closely watched gauge — also eased. This has increased the likelihood of at least one additional rate cut before year-end, following the ECB’s initial trim earlier in June. However, the Euro’s strength relative to peers — particularly the US Dollar and British Pound — remains a complicating factor. A firmer Euro can dampen imported inflation, thereby slowing the pace of policy transmission and further economic cooling.

Technical Analysis

From a technical perspective, EUR/GBP may be showing signs of exhaustion after a recent bullish trend. The pair had been trading within a rising channel — a classic bearish reversal pattern — and has now broken below the channel's lower boundary, suggesting downside risk may be building.

Currently, the pair is encountering resistance near its recent highs, which also coincides with key Fibonacci levels. A bearish RSI divergence has formed, indicating that momentum is waning despite recent price highs. Moreover, the break below the previous higher low structure on the chart suggests that the bullish bias could be fading.

Traders may look to initiate short positions via a sell-limit order around the 0.382 Fibonacci retracement level, aligning with the confluence of technical resistance and the broader macro narrative that hints at Euro vulnerability in the near term.

TRADE RECOMMENDATION

SELL EURGBP

ENTRY PRICE: 0.8530

STOP LOSS: 0.8570

TAKE PROFIT: 0.8400

Risk Warnings and Disclaimers

Add to Favorites

Alan

Commodity

Summary:

Recently, the Federal Reserve maintained interest rates but delivered hawkish signals. Simultaneously, the fade of safe-haven sentiment triggered a pullback in gold prices. However, geopolitical risks have not entirely dissipated; if conflicts escalate, gold prices are likely to rebound.

SELL XAUUSD

Close Time

CLOSED

3358.97

Entry Price

3295.00

3390.00

4337.20 +37.81 +0.88%

310.3

Pips

Loss

3295.00

3390.00

Exit Price

3358.97

Entry Price

3390.00

Fundamentals

As of the European session today, gold traded around 3350.00 per ounce, marking a decrease of 0.71% on the day. This week is poised to be the first week of declines for gold since early June.

Recent volatility in the gold market stems from a complex interplay of factors. The marginal easing of geopolitical risks has been a core factor suppressing gold prices. US President Trump made a statement about deciding within two weeks whether to join Israel in potential strikes against Iran. This reduced market fears regarding a blockade of the Strait of Hormuz or attacks on nuclear facilities, leading to the partial unwinding of gold's safe-haven premium. Concurrently, some safe-haven capital has rotated towards silver, further diverting buying interest away from gold. Nevertheless, geopolitical risks persist; should conflicts escalate within the next two weeks, gold could regain upward momentum.

Furthermore, conflicting signals from the Federal Reserve have heightened market uncertainty. While the Fed held rates steady, Chairman Powell warned that President Trump's tariff policies could exacerbate inflationary pressures, suggesting potential variability in the rate-cut path. Current market pricing implies a roughly 70% probability of a rate cut in September. However, if next week's US Core PCE inflation data exceeds expectations, the Fed might delay its easing cycle, which would diminish the appeal of gold as a non-yielding asset.

Technical Analysis

Fed "Hawkishness" and Fading Safe-Haven Sentiment Trigger Selling Spree _1

Regarding the daily chart, gold has breached the crucial support level at 3372.17. Should it fail to close the daily chart above this level, gold has a higher chance to plunge shortly, heading towards the support at 3292.74. Plunging further lower could bring gold to the low of May 29 (3245.33).

A death cross is formed to suggest a stronger bearish momentum. While the RSI remains above the midline, its steeper downward slope indicates weakening bullish momentum and a gradual shift towards bearish dominance.

Selling at highs is preferred.

Trading Recommendations

Trading direction: Sell

Entry price: 3360.00

Target price: 3295.00

Stop loss: 3390.00

Valid Until: July 04, 2025, 23:00:00

Support: 3392.74/3245.33

Resistance: 3372.17/3387.78

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Commodity

Summary:

Crude prices climbed on Thursday as the Iran-Israel conflict escalated, raising fears of a wider regional war and potential supply disruptions.

BUY WTI

Close Time

CLOSED

75.000

Entry Price

80.000

70.000

57.087 -0.146 -0.26%

500.0

Pips

Loss

70.000

69.994

Exit Price

75.000

Entry Price

80.000

Oil markets surged higher on Thursday, driven by deepening geopolitical instability in the Middle East, as hostilities between Israel and Iran entered a perilous new phase. Brent crude rose 0.5% to $77.06 a barrel by 09:13 GMT, while U.S. West Texas Intermediate (WTI) July contracts gained 0.7% to $75.68. Prices remain firmly underpinned by fears that the situation could spiral into a regional conflict with global ramifications, especially as U.S. President Donald Trump weighs a decision that could shift the geopolitical landscape.

The rally builds on a dramatic surge earlier in the week, when Brent touched a five-month high of $78.50 after Israel launched a wave of airstrikes targeting military and strategic assets deep inside Iranian territory. The latest round of attacks marks the seventh consecutive day of direct confrontation between the two nations. On Wednesday night, Israeli forces reportedly targeted Iran’s sole nuclear energy facility, an act with far-reaching strategic and symbolic implications. Iran retaliated with a ballistic missile strike on a hospital in Tel Aviv, stoking further outrage and international alarm.

Amid the rising uncertainty, major Wall Street institutions have begun pricing in significant geopolitical risk. Goldman Sachs analysts noted that oil prices are currently carrying a $10-per-barrel geopolitical premium, reflecting both current supply disruptions and the looming threat of a broader shipping crisis in the Persian Gulf. Should regional shipping routes, particularly the Strait of Hormuz, become compromised, Goldman warns Brent could spike well past $90—and potentially hit $120 under more extreme scenarios.

The Strait of Hormuz, through which roughly one-fifth of the world’s oil passes daily, has emerged as a critical flashpoint. Any closure or significant disruption in this key maritime chokepoint would trigger a profound energy shock, reminiscent of previous Middle East crises. “If Hormuz is closed even temporarily, we could see prices gap up violently,” one senior energy analyst noted. “The supply implications would be immediate and severe.”

Iran’s position as OPEC’s third-largest producer, pumping around 3.3 million barrels per day, underscores the scale of the risk. A significant hit to Iranian output—whether through conflict, sanctions, or logistical disruption—would reverberate through global energy markets, compounding existing concerns about tight supplies and underinvestment in upstream capacity.

U.S. President Donald Trump, speaking at a press briefing late Wednesday, said he had not yet decided whether Washington would join Israel in its confrontation with Iran. His indecision has only amplified market anxiety, as traders brace for either an American entry into the conflict—which would escalate the stakes dramatically—or a diplomatic maneuver that might defuse tensions.

"Markets are trapped in a binary outlook,” said Helima Croft, global head of commodity strategy at RBC Capital Markets. “If Trump opts for military involvement, we’re in a completely different price regime. If he backs off, we might see a short-term correction—but the damage to risk sentiment has already been done.”

The broader fear is that a U.S.-Iran confrontation could deliver a terminal blow to already fragile regional stability. Analysts warn that direct strikes on Iranian energy infrastructure would not only provoke a sharp military response, but also risk destabilizing key oil-producing neighbors like Iraq, the UAE, and even Saudi Arabia.

Adding further fuel to the rally was a surprisingly large drawdown in U.S. crude inventories. The Energy Information Administration (EIA) reported that U.S. commercial crude stocks fell by 11.5 million barrels in the week ending last Friday, far surpassing analyst expectations of a modest 1.6 million-barrel decline. The draw brought total inventories to 420.9 million barrels, underscoring continued strong demand and possibly early signs of tightening supply dynamics.

Gasoline inventories also dipped slightly by 0.2 million barrels to 230 million barrels, while distillate stocks rose 0.5 million barrels to 109.4 million. The data reinforced the notion that despite macroeconomic uncertainty, U.S. refiners are drawing down crude aggressively—perhaps in anticipation of further price gains or supply constraints stemming from global tensions.

Technical Analysis

From a technical perspective, crude oil prices are maintaining bullish momentum. WTI is consolidating just above the key psychological level of $75, with the Relative Strength Index (RSI) having recently exited overbought territory—an encouraging sign for bulls. The price action suggests a potential assault on the next resistance zone, and analysts are closely watching for a breakout that could confirm a broader trend reversal to the upside.

The recent rally looks technically sound,the overbought conditions have been unwound, and momentum indicators are starting to turn up again. If WTI can decisively close above $75, the path toward $78 and even $80 opens up.

TRADE RECOMMENDATION

BUY WTI

ENTRY PRICE: 75.00

STOP LOSS: 70.00

TAKE PROFIT: 80.00

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

Summary:

The Pound Sterling struggled on Thursday as the Bank of England held interest rates steady at 4.25%, splitting the Monetary Policy Committee on the decision.

SELL GBPUSD

Close Time

CLOSED

1.34300

Entry Price

1.31000

1.36000

1.33895 +0.00188 +0.14%

170.0

Pips

Loss

1.31000

1.36000

Exit Price

1.34300

Entry Price

1.36000

The Pound Sterling (GBP) came under significant selling pressure on Thursday following the Bank of England’s (BoE) decision to keep interest rates unchanged at 4.25%, a move largely anticipated by financial markets but marked by a notable dissent within the Monetary Policy Committee (MPC). This pause in monetary tightening, signaling a "gradual and careful" approach to policy evolution, came just weeks after the central bank’s modest 25 basis point rate cut in May, as it balances the competing pressures of persistent inflation and fragile economic growth.

Investors had broadly expected the BoE to maintain rates at this level, with seven out of nine MPC members voting to hold. However, the dissent from three members—Swati Dhingra, Dave Ramsden, and Alan Taylor—highlights ongoing uncertainty within the committee. These dissenters cited signs of a loosening labour market, subdued consumer demand, and wage settlements aligning more closely with sustainable levels as justification for further monetary easing. This division signals a nuanced debate at the heart of UK monetary policy, with some members advocating a quicker return to looser financial conditions to support growth.

The BoE projects inflation to peak at 3.7% in September before gradually easing to just below 3.5% for the remainder of the year. This forecast marks a significant slowdown from the double-digit inflation peaks seen in 2022 but remains above the 2% target, complicating policy decisions. The central bank’s cautious stance reflects ongoing concerns over inflationary pressures stemming from volatile energy prices—exacerbated by geopolitical tensions in the Middle East—and the potential for renewed inflation shocks.

Market participants are closely watching upcoming UK economic data for guidance on the BoE’s future moves. Recent labour market figures revealed some cracks beneath the surface strength. While the UK job market remains historically tight, growth in employment and wages has moderated, partly due to increased employer contributions to social security schemes. Wage growth, a key driver of domestic inflation, has slowed, helping to ease cost pressures in the services sector. Service sector inflation, which is closely monitored by the BoE given its significant weight in the consumer basket, cooled to 4.7% in the latest reading from 5.4%, signaling a moderation in consumer price pressures.

Investors will be looking ahead to the release of May’s Consumer Price Index (CPI) and further labour market data to assess whether the inflation slowdown is sustainable and how much longer the BoE will maintain its cautious, data-dependent approach.

Adding complexity to the BoE’s inflation outlook are the ongoing geopolitical tensions in the Middle East, which risk driving up energy prices once again. Renewed energy shocks could derail the tentative inflation progress, forcing the BoE to reconsider its moderate easing bias. This external risk has created an environment of uncertainty for investors and traders, weighing on GBP sentiment in the near term.

Technical Analysis

From a technical perspective, the GBP/USD currency pair extended its decline in intraday trading on Thursday, reflecting the broader bearish sentiment. The pair’s recent fall off oversold conditions, as indicated by the Relative Strength Index (RSI), has triggered the appearance of fresh negative signals, suggesting further downside potential.

Crucially, GBP/USD has broken below a key support level at 1.3410 and breached a major short-term bullish trend line, undermining earlier hopes of a technical rebound. The pair’s sustained trading below its 50-day Exponential Moving Average (EMA50) reinforces the bearish scenario, suggesting that sellers remain firmly in control for now.

If the pound fails to regain ground quickly, traders will likely target lower support zones, while the BoE’s forthcoming monetary guidance and UK economic data will play a pivotal role in shaping medium-term GBP/USD direction.

TRADE RECOMMENDATION

SELL GBPUSD

ENTRY PRICE: 1.3430

STOP LOSS: 1.3600

TAKE PROFIT: 1.3100

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

Traders' Opinions

Summary:

The Australian Dollar fell sharply on Thursday, undermined by escalating Middle East tensions, soft domestic labor data, and a hawkish message from the Federal Reserve.

SELL AUDUSD

Close Time

CLOSED

0.64590

Entry Price

0.63800

0.65500

0.66537 +0.00017 +0.03%

79.0

Pips

Profit

0.63800

0.63799

Exit Price

0.64590

Entry Price

0.65500

The Australian Dollar (AUD) extended its recent downtrend on Thursday, marking one of the worst performances among G10 currencies, as geopolitical tensions in the Middle East and weak Australian employment figures prompted investors to dump risk-sensitive assets in favor of safe-haven alternatives like the US Dollar.

The AUD/USD pair fell 0.6%, reversing Wednesday’s modest gains, and is now hovering near the lower boundary of a multi-week range around 0.6445–0.6455—a crucial technical zone that had previously acted as a floor during bearish attempts on June 3rd and June 13th.

Investors globally have turned increasingly risk-averse after reports emerged that the Israel-Iran conflict could expand beyond regional boundaries. Tensions ratcheted higher following comments from US President Donald Trump, whose vague remarks regarding possible US military intervention left markets on edge. Risk sentiment deteriorated further after reports surfaced that senior American officials were preparing strategic contingencies for a potential strike against Iran.

These developments have triggered a sharp rotation out of risk-linked currencies like the Aussie, especially considering its strong correlation with global growth sentiment and commodity demand.

The sell-off in the Australian Dollar was exacerbated by lackluster domestic data. The Australian Bureau of Statistics (ABS) reported that net employment fell by 2,500 jobs in May, a figure well below expectations. While the unemployment rate remained unchanged at 4.1%, analysts have warned that stagnating job growth could point to broader weaknesses in the Australian economy.

The jobs data, while not disastrous, suggests we’re hitting a plateau in labor market momentum. With global sentiment already on the defensive, these numbers give the Reserve Bank of Australia more room to stay on the sidelines, possibly even consider easing if external shocks worsen.

Adding to the pressure on the Australian Dollar was Wednesday’s Federal Reserve policy announcement, which, while leaving the benchmark rate unchanged, offered little comfort to markets hoping for a dovish pivot. The central bank’s closely-watched Dot Plot still suggests two potential rate cuts before the end of the year. However, Chair Jerome Powell's press conference struck a more hawkish tone, with the Fed Chair warning that inflation risks remain elevated—particularly as tariffs and supply-side frictions linger.

The contrast between the Fed’s cautious stance and Australia’s weakening economic indicators has widened the monetary policy divergence, boosting demand for the US Dollar (USD) at the expense of the AUD.

Technical Analysis

From a technical standpoint, AUD/USD appears to be on shaky ground. After failing to overcome resistance at 0.6535, the pair was rejected and has since broken below its 50-period Exponential Moving Average (EMA50) on the 4-hour chart. The Relative Strength Index (RSI) is also flashing warning signs, pulling back from overbought territory and indicating growing downside momentum.

Currently trading near 0.6460, the pair is testing a significant horizontal structure that, if breached, could open the door to deeper losses toward the 0.6380–0.6400 zone. Despite the short-term bearish momentum, analysts note that the broader trend still has a mild bullish inclination—though further downside could invalidate that bias.

TRADE RECOMMENDATION

SELL AUDUSD

ENTRY PRICE: 0.6459

STOP LOSS: 0.6550

TAKE PROFIT: 0.6380

Risk Warnings and Disclaimers

Add to Favorites