EUR/USD Faces Tug-of-War Between Peace Hopes and Stubborn Inflation

Forex

Summary:

EUR/USD drifts as peace hopes clash with sticky inflation. Washington talks add headlines, not substance. Traders eye Jackson Hole, where Powell’s tone will decide if euro rallies past 1.1700—or stalls below.

Markets were fed peace talk headlines out of Washington, but the tape traded like it had already discounted the choreography. Diplomatic theatre can move sentiment, but currencies and commodities don’t run on applause — they run on probabilities. And what traders see is that the core territorial horse-trading between Ukraine and Russia hasn’t even left the paddock. Until that stall door swings open, “roadmaps” and “security guarantees” are the diplomatic equivalent of option premium — all time value, little intrinsic.

The euro wilted overnight, not dramatically, but enough to remind us that hope is not a strategy. Markets had priced a glimmer of peace; instead, they got the same ambiguous mixture of optimism and obstacles.

The street is still leaning into Fed cuts — September odds sitting at -21bp, with two fully baked in by year-end — a setup that typically gives cover to buy EUR/USD dips. But July’s PPI was the kind of print that makes even the most dovish dealer flinch. Inflation risk hasn’t been extinguished, just smothered under softer labour signals. Heading into Jackson Hole, the posture feels textbook pre-event: plenty of anticipation, little conviction. That’s why you can sense traders quietly trimming EUR/USD length, lightening the load before Powell takes the stage.

The euro could still squeeze higher this week — 1.1700 is very much in play — but for a moonshot, you’d need Powell to underwrite the move. Without him flipping the dovish switch, all you’ve got is positioning churn and tactical dip-buying. A push beyond 1.1800 demands more: softer U.S. data, Powell opening the rate-cut floodgates, and meaningful progress at the negotiating table. That cocktail hasn’t been mixed yet.

The Washington summit added structure but not resolution. Trump talked up trilateral meetings, Zelenskyy agreed to face Putin, and NATO hinted at deeper security guarantees. That’s progress — but it’s the kind of progress that fills newswires, not order books.

Territorial concessions remain the elephant in the room, and traders know those negotiations will be the hardest. Until we see even a hint of compromise there, peace optimism is more headlines than substance. The market knows how this story trades: every announcement sparks a glance at the screen, but unless maps are redrawn, the effect fades before the next candle closes.

Short-end pricing screams conviction: cuts are coming. But the long end of the Treasury curve refuses to buy the fairy tale. 30-year yields drift higher, flashing warnings about supply, sticky inflation, and fiscal credibility. The market is effectively telling you: the Fed can provide insurance cuts up front, but it can’t wish away structural deficits or fiscal overhangs.

For FX, that divergence matters. The short end weakens the dollar in the near-term, but the back end provides just enough resistance to keep the greenback from rolling over. The euro, by contrast, has to climb a wall of its own: a softening trade balance and a still-sluggish export engine. For now, it’s a race to see who blinks first — Powell with cuts, or Europe with more profound trade-driven weakness forcing the ECB’s hands.

Equities have barely flinched. Traders have seen this movie before: peace chatter makes for great headlines, but forward earnings, tariffs, and rate cuts remain the bigger swing factors. The S&P 500 wavered after record highs, not because of geopolitics, but because no one wants to be caught offside if Powell makes a hawkish surprise. Like FX players, fast money stock traders are long anticipation, short conviction — waiting for Friday’s speech like gamblers eyeing a roulette wheel. Still, these are minor adjustments in the broader scheme of things.

Bonds have been calm, too, though the elephant in the room remains supply indigestion. With issuance heavy and investors already loaded, spreads feel tight for a reason. The peace narrative may matter in theory, but for bond desks, funding dynamics and Fed policy matter far more.

Crude showed more sensitivity. Brent slid toward $65, WTI near $63, the dip reflecting a market gaming out a ceasefire scenario where Russian barrels come back online just as OPEC+ ramps up production. Oversupply risk is back on the radar.

But the geopolitical premium hasn’t vanished. Ukraine’s latest pipeline strike reminded traders that infrastructure remains a target. Sanctions are another wild card — Trump slapped India while letting China skate, proving that energy diplomacy is as selective as it is strategic. For oil bears , every handshake comes with a shadow of sabotage.

Gold is trading steady near $3,340-40/oz, flat but tense. The metal has already had its glory run — up 27% YTD, ETFs stuffed, central banks still buying. But positioning feels more like a coiled spring than exhaustion. If Powell blinks dovish at Jackson Hole, gold won’t hesitate to make another run. Until then, it’s the classic trader’s hedge: a quiet insurance policy against both Fed error and geopolitical backsliding.

The Washington summit was a step forward, but markets are disciplined beasts — they don’t run on political hope, they run on odds and outcomes. The hard negotiations are still ahead, and without them, traders default back to the one driver that actually moves the tape: the Fed.

The setup into Jackson Hole is textbook: short-end screaming for cuts, long-end resisting, dollar still king but wobbling at the edges. EUR/USD is the hinge in this story — offered on peace noise, but still with scope to squeeze higher if Powell delivers. Oil is the barometer for peace optimism, gold the insurance policy, equities the tightrope walker waiting for the croupier to roll the dice.

The curtain rises in Wyoming later this week. The peace roadmap may set the backdrop, but the Fed’s script will decide the play.

Source: investing

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Olivia Brooks

Cryptocurrency

As Bitcoin plunges to a daily low of $114,000, a loss of $3,000 within 24 hours has left investors deeply worried. Continuous tests around the $112,000 mark heighten these concerns. Our weekly report underscored expectations of a horizontal and downward trend in Bitcoin’s value, explaining the underlying reasons. This aligns perfectly with recent market movements, clarifying why cryptocurrencies are experiencing a downturn.

Why are Cryptocurrencies Declining?

Recent U.S. producer inflation figures released five days ago surpassed expectations, showing a rise of 3.3% against the anticipated 2.5%. Combined with a cooling labor market, these numbers paint a bleak picture. The Federal Reserve is in a bind: while a rate cut might support employment, it risks accelerating inflation. Recent PPI data reflects concerns over tariffs driving inflation upwards. The troubling aspect is the new effective tariff rates enforced in August, increasing for almost all countries.

The base tariff, previously at 10%, has surged to a minimum of 15% for many countries. Consequently, the impact of tariffs is expected to be more pronounced this month, likely leading to September’s figures also exceeding estimates. As the Federal Reserve anticipates August data, crypto investors are already feeling the heat, fearing the consequences.

Moreover, this week brings crucial developments that could further unsettle the crypto space. The Jackson Hole meeting is happening, followed by the release of Fed minutes tomorrow evening and a speech by Powell on Friday. These consecutive events are set to significantly impact cryptocurrencies, further dampening risk appetite.

Investors’ anxiety is compounded by these successive challenges, casting uncertainties over market stability. The anticipation of pivotal economic data and Federal Reserve decisions looms large, contributing to the prevailing negative sentiment among crypto enthusiasts.

Furthermore, the potential for heightened tariffs in the coming months adds an additional layer of complexity to the volatile crypto market. Stakeholders find themselves navigating through increasingly unstable financial tides.

As the global economic landscape responds to these shifts, the repercussions on the cryptocurrency domain could be profound. Close monitoring of these economic indicators is essential for stakeholders aiming to refine their investment strategies amidst heightened market volatility.

In the face of these challenges, the cryptocurrency market remains on edge, poised for potential fluctuations influenced by broader economic pressures and policy-related developments. The path ahead is fraught with challenges, urging careful attention and strategic navigation.

Source: CryptoSlate

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Warren Takunda

Cryptocurrency

Key takeaways:

Short-term Bitcoin holders have sold over 20,000 BTC at a loss since Sunday.

Technicals suggest pushing Bitcoin’s price below $100,000 could be a tough task for the bears.

Bitcoin price has pulled back below $116,000, as uncertainty ahead of Jerome Powell’s Jackson Hole speech led investors and traders to reevaluate risks and stay cautious.

Bitcoin “weak hands” back to realizing losses

Bitcoin has retraced 7.6% from its new all-time high of $124,500 set last week. Following this price action, onchain data from CryptoQuant showed that over 20,000 BTC held by short-term holders (STHs) — investors who have held the asset for less than 155 days — have moved to exchanges at a loss over the last three days. Will Bitcoin Price Fall to $110K? Short-Term Holders Sell 22K BTC at a Loss_1

Will Bitcoin Price Fall to $110K? Short-Term Holders Sell 22K BTC at a Loss_1

BTC short-term holder losses to exchanges in 24 Hours. Source: CryptoQuant

More than 1,670 BTC were transferred to exchanges at a loss on Sunday, which surged to 23,520 BTC by Tuesday, coinciding with a 3.5% drop in BTC’s price to $114,400 from $118,600, per Glassnode data.

The chart below shows that most Bitcoin sent to exchanges at a loss are from STHs, while LTHs — both in profit and loss — comprise just 10% of the total volume to exchanges. Will Bitcoin Price Fall to $110K? Short-Term Holders Sell 22K BTC at a Loss_2

Will Bitcoin Price Fall to $110K? Short-Term Holders Sell 22K BTC at a Loss_2

BTC: Transfer volume by LTH/STH in profit/loss to exchanges. Source: Glassnode

This activity underscores a familiar behavioral pattern where short-term speculators panic-sell during market dips, frequently realizing losses.

The last time Bitcoin STHs moved into sustained loss realization was in January, “a period that marked the deepest correction of this cycle,” according to CryptoQuant analyst Kripto Mevsimi.

“For the first time since that January drawdown, STH-SOPR multiples have slipped back below 1, indicating that short-term investors are once again realizing losses,” the analyst said in an Aug. 18 Quicktake note.

Historically, this has carried two implications: A weakening momentum where extended loss realization often precedes deeper corrective phases, or a healthy reset where “brief dips below 1 can flush out weak hands, clearing the path for more sustainable rallies,” Kripto Mevsimi said, adding:

“This loss-selling event becomes a critical barometer of market health. If absorbed quickly, it could mirror past resets that fueled strong rebounds. If not, it risks signaling a momentum breakdown.”Bitcoin STH SOPR Multiples 30DMA/365DMA. Source: CryptoQuant

Bitcoin’s drop below $100,000 “tough fight for bears”

BTC’s latest drop below $115,000 has several traders and analysts calling for deeper price corrections to sub-$100,000 levels.

For this to happen, “$BTC would need to break the $100K–$110K wall” built for over 100 days since breaking above the $100,000 mark on May 8, trading firm Swissblock said in an X post on Monday, adding: Will Bitcoin Price Fall to $110K? Short-Term Holders Sell 22K BTC at a Loss_4

Will Bitcoin Price Fall to $110K? Short-Term Holders Sell 22K BTC at a Loss_4

”BTC/USD daily chart. Source: Swissblock

For Bitcoin analyst AlphaBTC, a close below Monday’s low at $114,700 could see the price drop toward the $110,000-$112,000 demand zone. Will Bitcoin Price Fall to $110K? Short-Term Holders Sell 22K BTC at a Loss_5

Will Bitcoin Price Fall to $110K? Short-Term Holders Sell 22K BTC at a Loss_5

Source: AlphaBTC

Meanwhile, prediction market platform Polymarket expects more price weakness for the rest of the week. The most likely outcome for BTC is now $114,000 at 73%, while a close below $112,000 is at 39% probability, and 18% and 16% odds for a drop toward $110,000 and $108,000, respectively.

As Cointelegraph reported, Bitcoin could continue consolidating in the current range as many BTC investors may continue taking profit below all-time highs.

Source: Cointelegraph

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Damon

Russia-Ukraine Conflict

President Trump has made it clear that he will not send American troops to enforce a possible peace agreement in Ukraine centered on 'security guarantees' - despite having appeared possibly open to the idea just a day earlier.

In a phone interview on Fox News Tuesday morning, Trump was asked what assurances he could offer that American forces wouldn't end up defending Ukraine's borders, and beyond his time in office. The question was based on his campaign and opening months in office - when he repeatedly vowed no more boots on the ground in entangling conflicts abroad.

"You have my assurance, and I’m president," Trump responded. European leaders are pressing for the strongest possible security guarantees for Ukraine, to ensure it can never be attacked in the future, once a peace settlement is reached.

A White House official additionally confirmed on Tuesday that Trump has definitively ruled out deploying US ground forces to Ukraine, according to CNN.

Security guarantees for Ukraine were a central focus between Trump, Ukrainian President Volodymyr Zelensky, and seven EU leaders - among them NATO Secretary General Mark Rutte.

The Europeans want clarity on what level of American military support Trump is willing to offer to prevent Russia from regrouping and pursuing further territorial advances after a potential peace deal.

British Prime Minister Keir Starmer, who was in the White House yesterday alongside France's Macron, is still vowing to press for the most robust guarantees possible.

"Turning to next steps, the Prime Minister outlined that Coalition of the Willing planning teams would meet with their US counterparts in the coming days to further strengthen plans to deliver robust security guarantees and prepare for the deployment of a reassurance force if the hostilities ended," a Downing Street spokesperson said in a statement.

"The leaders also discussed how further pressure – including through sanctions – could be placed on Putin until he showed he was ready to take serious action to end his illegal invasion," Starmer's office added. In some ways, this can easily be read as the Europeans saying they are actively trying to sabotage peace, as the fear is that it will be settled on Moscow's terms.

Additionally, Bloomberg is reporting that "Security guarantees for Ukraine will be formalized in the coming days and as soon as this week, European Council President Antonio Costa tells reporters in Lisbon following virtual meetings of 'Coalition of the Willing' and EU leaders.

President Putin has repeatedly emphasized that Russia will never allow Western boots on the ground in Ukraine as part of some peacekeeping force or entity patrolling frozen front lines. At least Trump is saying he's on the same page, and fully understands this, at least for now.

Source: Zero Hedge

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Samantha Luan

Economic

Forex

Political

DUBAI - Saeed Mohammed Al Tayer, MD and CEO of Dubai Electricity and Water Authority (DEWA), announced the beginning of trial operation and electricity export from the pumped-storage hydroelectric power plant in Hatta to Dubai.This announcement was made during his visit to the project to review progress in the final stages of work, where the amount of energy produced during the past period of the station's operational testing exceeded 17,921 megawatt-hours.

The plant will have a production capacity of 250 megawatts (MW), a storage capacity of 1,500 megawatt-hours and a lifespan of up to 80 years. The peak electricity demand in Hatta is approximately 39 MW, and the surplus will be exported to Dubai.Al Tayer was accompanied by Nasser Lootah, Executive Vice President of Generation (Power & Water) at DEWA; Khalifa Al Bedwawi, Project Manager; and the project team.

Al Tayer affirmed that the project is in line with the vision and directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, to achieve comprehensive and sustainable development across the Emirate of Dubai. It also supports the Dubai Clean Energy Strategy 2050 and the Dubai Net-Zero Carbon Emissions Strategy 2050, which aim to provide 100 percent of Dubai's total energy production capacity from clean sources by 2050.During the visit, Al Tayer toured the power generation station building, which was constructed 60 metres underground, and was briefed on the operation of the station's two main water valves, each weighing approximately 110 tonnes. He also inspected the station's command and control centre and witnessed an operational test of the water pumping and power generation.

The visit included the upper dam, built by DEWA as part of the project, with a total water surface area of 210,000 square metres. The dam comprises two compressed concrete walls: a main wall 72 metres high and 225 metres long, and a side wall 37 metres high. The upper dam has a storage capacity of around 5.3 million cubic metres (1,166 million gallons) of water.Al Tayer highlighted that the hydroelectric power plant in Hatta, with an investment of approximately AED1.42 billion, is part of DEWA’s efforts to diversify energy production from renewable and clean sources in Dubai. These include technologies such as solar photovoltaic panels, concentrated solar power, and energy storage in batteries.

The project is designed to generate electricity using water stored in the Hatta Dam and the upper dam with a turnaround efficiency of 78.9 percent. It uses the potential energy of water stored in the upper dam, converting it into kinetic energy as it flows through a 1.2-kilometre subterranean tunnel.This kinetic energy rotates the turbines, converting mechanical energy into electrical energy, which can be supplied to DEWA’s grid within 90 seconds to meet demand.To store energy, clean power generated at the Mohammed bin Rashid Al Maktoum Solar Park will be used to pump water back to the upper dam, converting electrical power into kinetic energy in the process.

Source: TradingView

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Commodity

Gold continues to exhibit exceptionally low volatility in the absence of significant market-moving headlines, with the precious metal forming its fourth doji or spinning top candlestick in the past five trading sessions. These technical formations typically emerge during periods of market indecision, characterized by minimal price movement between opening and closing levels.

During overnight trading, gold futures breached a critical technical threshold by moving below the 100-day simple moving average (SMA).

This breakdown coincided with the metal reaching an intraday low of $3,368, marking the lowest price level for gold futures since August 1st. However, the bearish momentum proved short-lived, as gold initiated a recovery rally within the same hour of breaking below the technical support level.

The subsequent six-hour rally lifted gold to its session high of $3,402.80, demonstrating the market's ability to quickly reverse from oversold conditions. This price action suggests underlying support remains present despite the technical breach.

Gold Could Break Below the 100-Day SMA, Golds Current Technical Support Level, Ahead of Federal Reserve's Annual Symposium at Jackson Hole this week_1

Since establishing the daily high, gold has gradually surrendered its earlier gains and moved into negative territory for the session. The most significant development from a technical perspective is gold's apparent trajectory toward closing below the 100-day SMA. Such a close would represent a meaningful shift in the technical landscape, transforming what was previously a support level into potential resistance going forward.

This technical reversal could have implications for near-term price action, as traders and algorithmic systems often adjust positioning based on moving average relationships.

Financial markets demonstrated minimal reaction to today's meeting between the U.S. President and Ukrainian President, suggesting that current geopolitical developments are not serving as primary drivers for precious metals pricing. This muted response indicates that market participants are looking beyond immediate geopolitical headlines for directional cues.

Market attention remains firmly centered on future Federal Reserve monetary policy decisions. The upcoming Jackson Hole Economic Symposium, scheduled from Thursday, August 21st through Saturday, August 23rd, represents the next major catalyst for gold pricing. Federal Reserve Chair Jerome Powell is expected to deliver remarks on Friday during the 43rd annual symposium, with market participants anticipating insights into the Fed's policy trajectory.

The symposium historically serves as a platform for significant policy communications, and Powell's commentary will likely provide crucial guidance regarding interest rate expectations and economic outlook, factors that directly influence precious metals valuations.

Gold's current consolidation phase reflects a market in waiting mode, with technical levels and Federal Reserve communications likely to determine the next directional move. The potential flip of the 100-day SMA from support to resistance warrants close monitoring, as does the market's response to any policy signals emerging from Jackson Hole.

Source: kitco

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Blue River

Technical Analysis

The morning NA session follows a quasi-dead European overnight trading.

This tends to happen when a lack of data adds to the Summer trading when volumes are typically subdued.

The Dollar Index had been in the middle of many headwinds, as per usual. After a stellar July followed by and N-shaped (for nope) downward spiral in the beginning of August, it has been difficult to spot where the Greenback is heading.

Forex volatility tends to calm during summers and lack of decisive trends exacerbate this rangebound trading – When the path is unclear, rangebound trading is typical (particularly in currencies.)

With Markets awaiting more developments after the White House gathered heads from Russia, Ukraine and the EU, the Dollar is forming a temporary bottom around the 98.00 Handle.

This region had already formed the post-Liberation day bottom (quickly broken in May).

The White House meetings went well and the US will now attempt to create a Putin-Zelenskyy meeting.

Donald Trump, the author of the Art of the Deal, is an unpredictable leader but one sure thing, he is a monster negotiator, and this is giving back some confidence in the US.

In our most recent DXY analysis, we mentioned an expectation of a more balanced Dollar as a lack of continuation upwards and a not-broken bottom show indecision.

Let’s see if this indecision shall continue, at least to the technical side.

Dollar Index (DXY) Technical Analysis

Dollar Index Daily Chart

Dollar Index Daily Chart, August 19, 2025 – Source: TradingView

The US Dollar is holding its low-sloped ascending channel in a 5 day consolidation around the 98.00 handle.

The post-CPI data had created a new offer for the US Dollar as Markets rushed to price the September cut to 97% before the surprising PPI data changed the course of action.

With the future US inflation expectations rising considerably, the fundamental background for the Dollar (like its rate outlook) is more uncertain.

The Daily RSI is way into the Neutral territory and the Daily doji is an indecision one. All of this is also happening right around the 50-Day MA (currently at 98.065).

Let’s have a closer look to spot what breakout points could be in play when the action picks up again.

Dollar Index 2H Chart

Such indecisive price action doesn’t warrant analysis across many timeframes – it is better in this environment to look at where we see the most.

Dollar Index 2H Chart, August 19, 2025 – Source: TradingView

The Dollar Index is stuck between the 97.60 Support and the 98.50 Resistance Zones.

With the Price action rebounding from the lows of the Daily upward Channel supplemented by the 2H MA 50 acting as support, it seems that the preferred path would be to the upside.

If things were so sure however, the Dollar would have risen already to test the following resistance zone.

Typically, in this environment, it is good to look at the highs (98.30) and lows of the session (97.94) to see where if the action breaks out from there.

To the upside, look at the 2H MA 200 currently at 98.515.

To the downside, look at the 97.60 Support Zone, then the 97.15 July upward pivot.

Levels to place on your DXY Charts:

Resistance Levels