EUR/USD: Weak Dollar Could Unlock Upside as Dip Buyers Take Charge

Forex

Summary:

EUR/USD stays bullish above 1.17, driven more by dollar weakness than euro strength. Targets sit at 1.1830, 1.19, and 1.20, with support at 1.17. Fed’s Wednesday decision is key.

What doesn’t break you makes you stronger. That’s what I feel about the euro, which has continually shrugged off political turmoil in France, suggesting that investors don’t see it spilling over to other European countries. In truth, much of the EUR/USD strength has to do with weakness for the US dollar than strength for the euro.

But whatever the case, the popular trading pair remains in a healthy bullish trend ahead of a key week featuring lots of central bank meetings and data. I still think the EUR/USD could be heading to 1.20 in the coming days, barring a major surprise.

I will discuss the macro factors in greater detail below, but first, let’s take a look at the EUR/USD chart as it continues to paint bullish price action…

EUR/USD Technical Analysis and Trade Ideas

Despite the French political turmoil, the euro has been grinding higher in recent days, and today it found itself holding the breakout above the key 1.17 handle, which it took out last week. With price making higher highs and higher lows and holding above key levels, moving averages, and trend lines, there is no doubt in my mind that the trend is still bullish on the EUR/USD.

As such, there is little point in trying to short the pair or concentrating much on the potential downside targets for now. Instead, the focus should be on where to look for dip buying opportunities and where the pair might be headed from current levels.

EUR/USD: Weak Dollar Could Unlock Upside as Dip Buyers Take Charge_1

Last week saw the EUR/USD break above its short-term bearish trend line. This has potentially opened the door to a continuation towards the July peak of 1.1830, with last week’s high of 1.1780 being an interim target. Beyond these levels, there is not much further obvious resistance seen except around 1.1900 or 1.2000. The latter remains my main upside objective on the pair.

In terms of support levels to watch, the key one now rests at 1.1700, which previously acted as resistance, with a further support zone seen between 1.1560 and 1.1620. Crucially, the pair remains above its rising trend line, keeping the technical bias skewed to the upside, all thanks to a weaker US dollar.

French Downgrade Hardly a Shock

As mentioned, the EUR/USD is holding steady despite Fitch cutting France’s credit rating on Friday evening. The downgrade was largely expected and already reflected in French debt markets. Instead, attention is firmly on Wednesday’s FOMC meeting, which is likely to be the key driver for EUR/USD over the coming days.

But for the euro itself, the real question now is whether new Prime Minister Sébastien Lecornu can unite a fractured National Assembly around the unpopular, but necessary, path of fiscal consolidation. Markets will keep an eye on French fiscal developments, but I don’t see this turning into a wider eurozone crisis.

Meanwhile, on the data front, it’s a quiet week for eurozone figures, though there’s a busy line-up of ECB speakers. We did have Eurozone trade figures, which were hardly inspiring, suggesting US tariffs are beginning to bite. But exports to China were also weak, so it was not all about tariffs. Perhaps it is a global slowdown weighing on exports more so than just tariffs. Still, more data is needed to make a judgment.

All Eyes on Wednesday’s FOMC Decision

It’s a huge week for central banks, with no less than five G10 meetings scheduled. The main event, certainly for the EUR/USD, is, of course, the FOMC on Wednesday. A 25bp cut is widely expected, followed by two more in October and December. That makes a total of 75 bps of cuts.

But markets are currently pricing in 68bp of that, suggesting there is more room for the US dollar to fall if data weakness persists or the Fed signals two more cuts are on the way this year in the dot plots. The US dollar may also come under sharp pressure if, on Wednesday, it is revealed that a 50bp cut was a closer call than most anticipate.

On the US calendar front, Tuesday brings August retail sales data, while Wednesday will deliver some housing market data (that will likely be completely overshadowed by the FOMC), and Thursday we will have weekly jobless claims data.

Source: investing

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Thomas

Commodity

Central Bank

Gold rose near a record high as traders geared up for an anticipated easing of the US Federal Reserve’s monetary policy this week and looked for clues on further rate cuts this year.

Bullion traded near $3,660 an ounce, after gaining for four consecutive weeks. Investors see a quarter-point cut this week, following signs of labor market weakness. Swaps also price in at least another reduction before the end of the year, with a high probability of a third one.

That expectation has driven Treasury yields to the lowest level in months and weakened the dollar, making bullion more appealing as a store of value that doesn’t bear interest, while also cheaper for buyers in other currencies. Whether the Fed will challenge these bets is a key question for investors this week.

“Macroeconomic numbers are likely to take over from tariff-related headlines,” ANZ Group Holdings’ Daniel Hynes and Soni Kumari said in a note.

Gold has rallied nearly 40% this year and recently broke out from a spell of range-bound trading to surpass an inflation-adjusted record. Persistent uncertainty over geopolitics and President Donald Trump’s trade agenda, along with concerted central bank buying, have supported prices for the haven asset.

Trump’s unprecedented pressure on the Fed — including his attempt to oust Governor Lisa Cook — is the latest catalyst, which Goldman Sachs Group Inc. sees potentially driving gold to near $5,000 an ounce, just 1% of the privately-owned US Treasury market were to flow into bullion.

Gold edged higher to $ an ounce as of 3:50 p.m. London time. The Bloomberg Dollar Spot Index slipped . Silver and platinum rose, while palladium fell. Copper rose 0.9% on the London Metal Exchange to $ a ton.

Meanwhile, Thai authorities are discussing ways to tax gold bought and sold through various online channels and settled in baht, in a bid to stem a currency rally that’s hurting exports and tourism, according to people familiar with the matter.

With the tax, authorities aim to reduce exports of gold and make it more expensive for Thais to own the precious metal, the people said, adding that dollar inflows tied to bullion shipments were among the factors fueling the baht’s rally.

Source: Yahoo Finance

Risk Warnings and Disclaimers

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Samantha Luan

Economic

Forex

Political

Key points:

● Approved data centres add 2% to Sydney's water demand

● Centres seen taking up to a quarter of city water supply by 2035

● State has approved all 10 data centres it has ruled on

● Most approved centres gave no numeric water reduction plans

Authorities in Sydney approved construction of data centres without requiring measurable plans to cut water use, raising concerns the sector's rapid growth will leave residents competing for the resource.The New South Wales state government, which presides over Australia's biggest city, green-lit all 10 data centre applications it has ruled on since expanding its planning powers in 2021, from owners like Microsoft, Amazonand Blackstone'sAirTrunk, documents reviewed by Reuters show.The centres would bring in a total A$6.6 billion ($4.35 billion) of construction spending, but would ultimately use up to 9.6 gigalitres a year of clean water, or nearly 2% of Sydney's maximum supply, the documents show.

Fewer than half the approved applications gave projections of how much water they would save using alternative sources. State planning law says data centre developers must "demonstrate how the development minimises ... consumption of energy, water ... and material resources" but does not require projections on water usage or savings. Developers need to disclose what alternative water supplies they will use but not how much.The findings show authorities are approving projects with major expected impact on public water demand based on developers' general and non-measurable assurances as they seek a slice of the $200 billion global data centre boom.

The state planning department confirmed the 10 approved data centres collectively projected annual water consumption of 9.6 gigalitres but noted five of those outlined how they expect to cut demand over time. The department did not identify the projects or comment on whether their water reduction plans were measurable."In all cases, Sydney Water provided advice to the Department that it was capable of supplying the data centre with the required water," a department spokesperson told Reuters in an email.

Data centres could account for up to a quarter of Sydney's available water by 2035, or 135 gigalitres, according to Sydney Water projections shared with Reuters. Those projections assume centres achieve goals of using less water to cool the servers, but did not specify what those targets were.Sydney's drinking water is limited to one dam and a desalination plant, making supply increasingly tight as the population and temperatures rise. In 2019, its 5.3 million residents were banned from watering gardens or washing cars with a hose as drought and bushfires ravaged the country.

"There is already a shortfall between supply and demand," said Ian Wright, a former scientist for Sydney Water who is now an associate professor of environmental science at Western Sydney University.As more data centres are built, "their growing thirst in drought times will be very problematic," he added.

The number of data centres, which store computing infrastructure, is growing exponentially as the world increasingly uses AI and cloud computing. But their vast water needs for cooling have prompted the U.S., Europe and others to introduce new rules on water usage.New South Wales enforces no water usage rules for data centres other than the government being "satisfied that the development contains measures designed to minimise the consumption of potable water," according to the documents.

DATA BOOM

Just three of the 10 approved data centre applications gave a projection of how much the developer hoped to cut reliance on public water using alternative sources like rainwater. The biggest centre cleared for construction, a 320-megawatt AirTrunk facility, was approved after saying it would harvest enough rainwater to cut its potable water consumption by 0.4%, the documents show.An AirTrunk spokesperson said early planning documents referred to peak demand but "subsequent modelling recently tabled to Sydney Water has determined actual usage will be significantly lower".

The company was "working with Sydney Water to transition the site to be nearly entirely serviced by recycled water", the spokesperson added.The most ambitious commitment to cut reliance on town water was 15%, for one of two data centres approved on land held by Amazon, planning documents show.The two centres would collectively need 195.2 megawatts of electricity and take up to 92 megalitres a year of Sydney's drinking water before rainwater harvesting, say the documents, which give a projected reduction in water use for one project but not the other.

Amazon declined to comment on individual properties but said its Australian data centres avoid using water for cooling for 95.5% of the year because their temperature controls rely more on fans than evaporative cooling.Microsoft gave a 12% projected water use reduction for one of the two Sydney data centres it has had approved. Microsoft declined to comment.

HARD SWALLOW

Sydney's suburban councils, meanwhile, want to slow what they see as competition for limited water supply, especially when the state wants 377,000 new homes by 2029 to ease a housing shortage."A lot of them have been built without much discussion," said Damien Atkins, a member of Blacktown council where state-approved centres owned by AirTrunk, Amazon and Microsoft are being built."There should be more pushback and I'm just starting to ask those questions now."

In the city's north, Lane Cove council asked the state to return approval powers to local government, citing water usage and other concerns.Neighbouring Ryde council has five centres and another six in various stages of planning. It said those 11 would take nearly 3% of its water supply and has called for a moratorium on approvals.On a small vegetable farm near where Amazon, Microsoft, AirTrunk and others are building centres, Meg Sun said her family's business had to turn off the sprinklers in the 2019 drought but still bought enough water from Sydney Water to drip-feed the crops.

She worries what might happen if water demand is worsened by data centres' needs in the next drought."We can't even run the business then, because we do rely on water," she said.

Source: TradingView

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Risk Warnings and Disclaimers

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Adam

Economic

It was another good week for risk, with indices across the globe posting gains last week. The increases were led by Japan, the Nikkei rose by 4%, and the Hang Seng was higher by 3.8%. The S&P 500 made multiple fresh record highs, although it closed down a touch on Friday, and the Nasdaq rose by 2% after a stunning 25% rally for Oracle. Tesla rose by 12% even though Elon Musk was awarded $1 trillion in stock, the largest ever corporate award, which has not put off investors. Perhaps this is because Elon Musk will have to achieve the impossible to see any of it.

Other notable stock market winners last week included Anglo American in the UK, which rose by 12% after announcing a deal to buy Teck Resources to make a mega sized copper mining company. BAE Systems, Babcock and Rolls Royce were also higher, as defense stocks surged on the back of news that Russian drones entered Polish air space. News over the weekend included reports that Russian drones also entered Romanian air space, another Nato member, which could ensure that defense stocks remain in demand for the coming week.

Weak China data unlikely to deter risk appetite

The appetite for risk remains strong and is defying global fears like political turmoil for France and Japan, geopolitical risks, and a slowdown in the world’s second largest economy. There are signs of a broad economic slowdown in China. Retail sales data for August were weaker than expected, industrial production data also grew at a slower rate than expected, the jobless rate ticked up and property sales also fell last month. This data is unlikely to deter another leg higher for stocks, since it could spur the Chinese government on to add more stimulus to prop up the economy, which is risk positive.

French sovereign rating downgrade to weigh on the euro

The big news on Friday was the downgrade of French sovereign debt by Fitch, the credit ratings agency. Fitch downgraded France by one notch to A+, assigning a stable outlook, even though France is yet to secure a budget and has had its third prime minister in a year. Bond yields in France are rising sharply, and the French 10-year sovereign bond was the worst performer in Europe and in the US last week. French bond market under performance has been a feature of the last 3 months, and we expect this to continue, even though Fitch assigned France a stable outlook. On Monday, French bond market futures are drifting lower, suggesting that yields will rise later, the euro has also opened lower at the start of this week, and is the third weakest currency in the G10 FX space.

France now has a lower credit rating than Apple, which has an AA+ rating, and LVMH, which has a rating of AA-, and is on par with the likes of Barclays. The problem for France is that it needs to attract buyers of its debt to fund its massive, and growing, fiscal deficit. However, there are more attractive options out there, including corporate credit. This means that French sovereign bonds could see their yields continue to rise, until the country has a credible plan in place to shrink the deficit.

This week is extremely busy for event risk. The Fed meeting on Wednesday is swiftly followed by the Bank of England and the Norges Bank on Thursday. The outcome of these meetings, especially the Fed meeting, will be crucial for determining the next move for markets. President Trump is also on a state visit to the UK and will bring tech bosses including Nvidia’s Jensen Huang with him. Whether promises of investment in the UK’s tech sector will lift the gloom of the UK’s economic prospects and upcoming budget fears, we will have to see.

As we lead up to a key week for event risk, there are signs that cracks could be appearing in the euro, it was one of the weakest performers in the G10 FX space last week, while the US dollar and the pound were in the middle of the pack. Below, we look at two key events that are worth watching out for.

The Federal Reserve: how low will rates go?

The Federal Reserve will announce their latest policy decision on Wednesday 17th September, followed by a press conference from Jerome Powell. A 25bp rate cut is fully priced in by the Federal Funds Futures market, but there is a small chance of a 50bp rate cut, currently this stands at 4%. We expect a 25bp rate cut at this meeting, however, the market will be looking for signs about what the Fed does next. There are currently just under six rate cuts priced between now and January 2027. In recent months there has been a massive recalibration in Fed rate cut expectations due to a softening in the labour market and massive pressure from the White House to cut rates. The question now is, has the market got too far ahead of itself, and will the Fed push back on the rate-cutting narrative due to stubbornly high inflation, which remains well above the Fed’s target rate.

This week’s meeting sees the release of the latest Fed staff forecasts for GDP, CPI and the unemployment rate, the Fed’s ‘Dot Plot’ will also be released. The Dot Plot will be scrutinized to see if the Fed is happy with the market’s assumptions, or if they plan a more cautious approach to easing.

Stocks could get volatile over Fed meeting

The Nasdaq closed at a record high last week, and the S&P 500 also posted healthy gains, as investors’ enthusiasm for risky assets has surged with the bumper rate cut expectations. This has sent Treasury prices soaring, the 2-year Treasury yield is down nearly 40bps in the last 3 months and bond yields move inversely to prices. It has also had a major impact on stocks, and US stocks are now outpacing YTD gains for some European indices including the Eurostoxx and Cac indices.

Uncertainty surrounding the future path for Fed policy means that some traders are now bracing for volatility around Wednesday’s Fed decision, with options markets pricing in a 1% swing in either direction, which would be one of the biggest daily moves in weeks.

The risk is that after such a strong rally, the S&P 500 is higher by 10% in the past 3 months, the market sells the news of the Fed meeting. If more rate cuts are signaled for early next year, then investors could buy the dip, but if the outlook is less clear, then we could see a longer sell off in risky assets. A less dovish Fed could boost the dollar, which is the worst performing currency in the G10 FX space so far this year. Overall, there is a lot resting on this meeting, the market expects the Fed to acquiesce to Donald Trump’s requests and over-ease monetary policy. However, if the Feds pushes back on this and asserts its independence, then it could be viewed as a hawkish move with big consequences for financial markets.

Chart 1: Fed rate cut expectations, devised from the Federal Funds Futures market

The Bank of England: QT pause on the cards

The BOE is not expected to cut interest rates at this week’s meeting, and we will have to wait until November to get the latest growth and inflation forecasts from the Bank of England, which will come 3 weeks before the dreaded UK budget. However, the focus is unlikely to be on what the BOE is doing now and there could be two things to watch in this week’s BOE meeting.

Firstly, there are some concerns that stubbornly high inflation, caused in part by public sector wage rises, will crimp the BOE’s ability to cut rates further and that 4% could be the UK’s new neutral interest rate. This week’s meeting could go some way to confirming if this view is correct. Secondly, there are calls for the BOE to slow the pace of quantitative tightening, whereby it sells the bonds on its balance sheet, as this is putting more upward pressure on UK bond yields and causing government borrowing costs to surge.

We talk about direct political pressure on the US’s Federal Reserve to cut interest rates, however this could be political pressure by stealth. The UK’s long term borrowing costs are at their highest level for nearly 30 years, and even the Bank has said that its QT program is adding to this pressure. Several former MPC officials have urged the BOE to slow or reduce its bond sales, according to the Guardian.

The BOE could announce that its QT program will be scaled back to £70bn for the year ahead. This is lower than previously expected, but it would still require a hefty amount of bond selling, which could keep upward pressure on yields. Thus, a sharper reduction, or a halting of active bond sales would have the biggest ameliorating effect on UK long-term yields, in our view.

However, holding onto the bonds could also be problematic for the BOE. They will earn less interest on their Gilt portfolio than they give to banks that hold their reserves at the BOE. This is because the bonds that the BOE owns often have low yields, since most of them were accumulated when interest rates were very low between 2009 and 2021. This could open the question of whether Rachel Reeves could tax bank earnings at this year’s Budget, something she is reportedly inclined to do. Thus, bank stocks could be in focus in the aftermath of this week’s meeting.

This week is busy for the UK, with a State visit for President Trump and the release of labour market data and the latest CPI report. Payrolled employees could slip again for August, while inflation data is expected to remain elevated. Headline CPI is expected to rise by 0.3%, driven by energy price increases, while the core rate is expected to fall a notch to 3.7% from 3.8%, and service price inflation is expected to decline slightly to 4.8% from 5% in July. This is still way too high for rate cuts for most of the MPC. Thus, the UK’s economic data is unlikely to play ball for those looking for rate cuts.

Source: xtb

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Risk Warnings and Disclaimers

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James Whitman

Political

Australia is confident its wide-ranging security agreement with the US and UK will push ahead despite a Pentagon review, people familiar with the matter said, with Canberra recently announcing at least $9 billion in related defense investments.

The Trump administration’s review of the so-called Aukus agreement, which was revealed in June, is focused mainly on reinforcing the pact rather than unraveling it, according to the people familiar, who asked not to be identified discussing internal deliberations.

Australia’s announcement over the weekend — that it will spend $8 billion on a related defense hub to build naval ships and service submarines and $1.1 billion on an underwater drone program — underscore Canberra’s commitment to the endeavor, and particularly its willingness to boost defense spending.

President Donald Trump and Defense Secretary Pete Hegseth have put global allies on notice that Washington expects them to spend more on their own defense, rather than rely on the security guarantees that crystallized in Europe and the Pacific after World War II.

Australian Prime Minister Anthony Albanese has publicly highlighted the rise in defense spending, including the weekend’s defense hub announcement.

“Today’s investment is another way we’re delivering record defense funding to bolster Australia’s capabilities,” he said at a briefing Sunday. “We pay our way and we contribute to our alliance each and every day.”

As well, Australia and the UK signed a 50-year defense treaty in July to underpin the construction of nuclear-powered submarines.

That ramp-up comes ahead of a possible meeting between Albanese and Trump later this month at the UN General Assembly meeting in New York — their first since the American president returned to office in January.

Aukus, signed in 2021 by then-President Joe Biden, at its core is aimed at checking China’s military advance in the Indo-Pacific region.

But a key component of the agreement would see the US help develop Australia’s nuclear-powered submarine fleet — including the sale of at least three, and potentially five, advanced Virginia-class vessels. The transfer would start in 2032 and 2035 with two subs from the existing fleet, and a third newly built sub would be sold to Australia in fiscal year 2038.

That’s proved a controversial wrinkle given the US currently lacks the shipbuilding capacity to meet its own submarine demand, much less that of its allies.

Separate to that attempt to buy nuclear-powered submarines from the US, and eventually build them in Australia by the 2040s, the nation is in the middle of a military spending spree, which the government has repeatedly called “the largest peacetime increase in defense spending in Australia’s history.”

Australia, like other US allies and partners, has found its relationship with Washington tested during Trump’s second term, especially with Albanese needing to show some independence by pushing back publicly on Washington’s spending demand, according to one person familiar with the government’s thinking. While that may play well domestically, it’s unsettled parts of Australia’s defense community.

Albanese has also sought to walk a fine line between the US and China, its largest export market. And Australia’s decision to recognize Palestine has drawn criticism from within Trump’s camp.

Despite those tensions, US–Australia cooperation in the military and intelligence spheres continues to run smoothly, said the people.

Defense Minister Richard Marles told Sky News on Sunday that he had received “positive sentiment” from Hegseth and US Secretary of State Marco Rubio about the future of Aukus.

“I’ve had numerous conversations with American counterparts,” he said. “I’m really confident about the proceeding of Aukus under the Trump administration.”

The Pentagon declined to comment on the status of the review or the path forward for Aukus.

A US State Department spokesman said in a written response to questions that it’s coordinating with the Defense Department on the Aukus review, and that “we remain committed to working with Australia to strengthen and advance the alliance.”

Australia sits beyond the range of China’s short- and medium-range conventional missiles, making it a relatively safe rear-area hub compared with Japan or Guam in case of a conflict over Taiwan. Its northern coast also provides access to the Indo-Pacific sea lanes that would be critical for sustaining US and allied operations around the island.

The US already rotates Marines through Darwin and uses Australian facilities for training, surveillance, and refueling. In a Taiwan contingency, Australia could serve as a logistical hub for fuel, ammunition, repairs and troop rotations.

The defense hub, in Henderson, Western Australia, will serve as the base for US and UK nuclear-powered submarines, which are scheduled to begin forward operations there from 2027. Albanese’s government said this will help strengthen the country’s defense industries’ experience with nuclear-powered submarines.

“Henderson is very much an Aukus precinct,” Marles said alongside Albanese on Sunday. “I’ve got no doubt this decision will be welcomed in the United States, as it will be welcomed in the United Kingdom, because it is another step forward down the Aukus path.”

Source: Bloomberg

Risk Warnings and Disclaimers

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Adam

Economic

A Turkish court adjourned a case questioning the legitimacy of the main opposition’s leadership, spurring a rally in lira assets.

The hearing into impropriety allegations surrounding the 2023 congress of the Republican People’s Party had created uncertainty for political watchers and investors alike. The case, which threatens to unseat party chairman Ozgur Ozel and deal a heavy blow to Turkey’s democratic rule, was postponed to Oct. 24.

Markets took the pause in the escalating political tensions as a positive, even if the respite is temporary. The court may still rule to nullify the congress when it convenes next month and reinstate former chairman Kemal Kilicdaroglu or appoint a trustee.

“It may prove to be temporary, but at least it will likely offer a few weeks of comfort,” said head of treasury at MUFG Bank in Istanbul Onur Ilgen.

The BIST-100 benchmark equity index jumped by as much as 4.7% after the postponement, as the lira strengthened against the US dollar and lira-denominated bonds gained.

The case against the CHP centers on allegations that some party members took cash payments as bribes in the 2023 congress that elected Ozel and his administration. Ozel has denied the claims, saying they are politically motivated and aimed at weakening the party to pave the way for President Recep Tayyip Erdogan to extend his more than 20 years rule.

Elections are currently slated for 2028, but political analysts widely expected an early vote to be called.

Monday’s hearing was part of a broader, unprecedented crackdown on Turkey’s opposition dating back to last year’s local elections, when it dealt a series of bruising defeats to Erdogan’s AK Party. The CHP — as the main opposition party is known — won some AKP strongholds and retained control in the country’s biggest cities like Istanbul and Ankara.

Since then, the party has been under a judicial siege, with mayors and other officials removed under allegations of corruption. Turkey’s justice minister has said courts are independent, and that mayors from AK Party and its ally, the Nationalist Movement Party, have also faced investigations in the past. But the CHP and other critics say the moves are part of a growingly autocratic system that aims to silence any form of dissent.

Ozel, the 50-year-old leader of the CHP, is credited with mobilizing the party’s grassroots into a resounding success in local elections and his replacement with Kilicdaroglu would risk dividing the party. The former chairman, 76, led the CHP for 13 years without a significant victory against Erdogan.

Under the current constitution, Erdogan is barred from another run for the presidency. But he would still be allowed to stand for a vote if parliament were to call for an early election or if the constitution is amended. While Erdogan hasn’t expressed explicit interest in running again, his influential ally Devlet Bahceli — who heads the Nationalist Movement Party — has publicly supported such a bid.

“The court decision is positive for market sentiment at least in the short term. The postponement was not the main scenario expected so it provides some relief,” emerging-markets strategist with Generali Asset Management Guillaume Tresca said. “The can has been kicked down the road but fundamentally, in my view, nothing has really changed as a final decision has to be taken.”

Turkey’s credit-default swaps — a proxy for the country’s risk of default — dropped by 7 basis points to the lowest since March 18, a day before the CHP’s highest-profile politician and Istanbul Mayor Ekrem Imamoglu was detained.

“The question, and it is hard to know, is whether this postponement is a signal or not of a positive decision for the CHP later,” Tresca said.

Source: Bloomberg

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Adam

Commodity

Silver Holds Steady as Fed Decision Looms; Gold Hovers Below Key Pivot

Silver and gold markets are locked in tight consolidation ahead of this week’s Federal Reserve interest rate decision, with traders bracing for potential volatility tied to policy guidance. Both metals are trading flat, lacking conviction as the broader market awaits clarity on the pace and tone of future rate cuts.

At 10:43 GMT, XAG/USD is trading $42.18, down $0.01 or -0.02%.

Silver Eyes $44.22—Can Bulls Break Higher?

Silver (XAG) Forecast: Bulls Eye $44.22 Breakout as Fed Sparks Silver Market Tension_1

Daily Silver (XAG/USD)

Spot silver is holding near Friday’s range, showing no signs of breaking out early in the week. The daily chart remains in an uptrend, with $42.46 (Friday’s high) serving as the trigger level for bullish continuation. If buyers clear that hurdle, the next upside target is the multi-year high at $44.22—a level that could attract significant momentum players.

Support remains layered below the market. Initial minor support sits at $41.59, followed by previous swing lows at $40.73 and $40.40. More structurally important is the 50-day moving average at $38.78, which marks the broader trend line and the key area for defending bullish positioning.

Gold Struggles with Resistance at $3643.76

Silver (XAG) Forecast: Bulls Eye $44.22 Breakout as Fed Sparks Silver Market Tension_2

Daily Gold (XAU/USD)

Gold is currently hovering just below a critical pivot at $3643.76, a level it has tested multiple times since last Thursday. Traders are using this mark as a control point for intraday positioning, and price action continues to signal hesitation. A firm close above this level could drive a retest of the all-time high at $3674.70, while a breakout there would expose $3879.64. However, a failure to hold could push gold back toward $3612.83 and possibly $3593.20.

Federal Reserve: Cut Expected, Tone Uncertain

The key driver this week is the Fed’s two-day meeting beginning Tuesday and concluding with the policy announcement on Wednesday. Markets overwhelmingly expect a 25 basis point rate cut, and the CME FedWatch tool points to high odds of additional easing later this year. Yet it’s not the cut itself, but Chair Jerome Powell’s tone that traders are watching. Will the Fed lean dovish or pause to reassess incoming data?

Inflation data isn’t helping either way. August CPI jumped to 2.9% year-over-year, and core inflation ticked up to 3.1%, both above the Fed’s target. Meanwhile, jobless claims are rising, suggesting some labor market softening. Yields are largely flat, with the 10-year sitting around 4.06%, reflecting the market’s wait-and-see mode.

Market Forecast: Breakout Imminent—but Direction Depends on Powell

Until Powell speaks, silver and gold will likely remain trapped in consolidation. Silver needs a break above $42.46 to spark another run toward $44.22, while gold bulls must push past $3643.76 to retest highs. A hawkish Fed could pressure both metals, dragging silver toward $40.40 and gold toward $3593.20. But if Powell signals dovish intent, both metals could extend gains quickly.