Currency Hedger No Comments

AUD/USD Price Forecast: Slides to 0.6970 after failing to clear 38.2% Fibo. hurdle

  • AUD/USD meets with a fresh supply as geopolitical risks remain supportive of a bullish USD undertone.
  • Bulls shrug off RBA Governor Bullock’s comments as the focus remains on the FOMC policy meeting.
  • The mixed technical setup warrants some caution before placing aggressive directional bets on the pair.

The AUD/USD pair attracts some follow-through selling following the previous day’s failure to find acceptance above the 0.7000 psychological mark and weakens to the 0.6970 area during the Asian session on Tuesday. Spot prices move little in reaction to Reserve Bank of Australia (RBA) Governor Michele Bullock’s comments and remain confined in a familiar range held over the past two weeks or so.

The US Dollar (USD) sticks to its bullish undertone as the optimism over a potential US-Iran diplomacy to end a five-month-old conflict fades after Saudi Arabia, Jordan and Iraq reported drone attacks on Monday. This keeps geopolitical risk premium in play and acts as a tailwind for the safe-haven Greenback, exerting some downward pressure on the AUD/USD pair. Traders, however, might refrain from placing aggressive bets ahead of the crucial two-day FOMC policy meeting, starting later today.

The recent repeated failures to break through the 38.2% Fibonacci retracement level of the May-June downfall suggest that the recovery from the 200-day Simple Moving Average (SMA) has run out of steam. That said, the Moving Average Convergence Divergence (MACD) histogram remains marginally positive while the MACD line stays above the signal line, hinting that bullish momentum persists even as the neutral Relative Strength Index (RSI) suggests only modest directional conviction.

Hence, it will be prudent to wait for some follow-through selling below the 23.6% Fibo. level before placing fresh bearish bets on the AUD/USD pair and positioning for a retest of the 200-day SMA at 0.6904. This is followed by the 0.6868 Fibonacci anchor, which reinforces a deeper structural floor should a corrective pullback unfold. On the topside, initial resistance is aligned with the 38.2% Fibo. retracement at 0.7024 ahead of the 50% retracement at 0.7073 and then 0.7121 at the 61.8% Fibo. level.

AUD/USD daily chart

Chart Analysis AUD/USD
Currency Hedger No Comments

Indian Rupee gains further as oil prices extend losses

  • The Indian Rupee adds more gains due to further weakness in oil prices.
  • US President Trump confirms that strikes on Iran have halted to open the door to diplomacy.
  • India’s GDP growth will likely slow down to 6.6% YoY this year.

The Indian Rupee (INR) extends its winning streak against the US Dollar (USD) for the third trading day on Tuesday. The USD/INR pair falls to near 95.65 as a further decline in oil prices has strengthened the Indian currency.

In the opening trade, the MCX Crude Oil contract expiring on August 19 trades 1.4% down at around Rs. 7,848, the lowest level seen in a week.

Given that India meets 85% of its energy demand through imports, a steep decline in oil prices reduces foreign outflows from India and hence improves the appeal of the Indian Rupee.

Trump confirms Iran negotiating with US

On Monday, United States (US) President Donald Trump said that Iran is talking to Washington about a deal and said “reaching one is possible”. Trump added that there’s plenty of time to reach a deal with Iran and that “we’ll see what happens”, Axios reported. Trump added that he halted strikes on Iran to open the door to diplomacy, while maintaining the stance of expanding military aggression if talks failed.

The pause in the exchange of attacks between the US and Iran has resulted in a sharp decline in oil prices. However, it doesn’t mean that the energy supply is returning to normal, with the Strait of Hormuz remaining closed.

Countdown to Fed’s policy starts

This week, the major trigger for financial markets will be the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

According to the CME FedWatch tool, traders see a 62% chance that the Fed will leave interest rates unchanged in the range of 3.50%-3.75%. The tool shows a strong possibility of an interest rate hike in the September policy meeting.

However, US President Trump urged Fed Chairman Kevin Warsh to lower interest rates, adding that there was a good inflation report recently, costs were falling rapidly, and that prices should drop significantly once the Gulf War ends.

Experts warn of slower India’s GDP growth

According to the latest Reuters poll, India’s Gross Domestic Product (GDP) is forecast to grow 6.6% Year-on-Year (YoY) in the fiscal year ending March 2027, down from 7.7% in FY2025-26. Growth is then expected to edge up to 6.8% in FY2027-28. The report showing poll results also revealed that weak private investment and higher oil prices will weigh on India’s economic growth.

Going forward, the major trigger for the Indian currency will be the Reserve Bank of India’s (RBI) monetary policy announcement next week.

Technical Analysis: USD/INR falls below 20-day EMA

USD/INR trades lower at around 95.65, holding in a corrective phase after recent gains as it slips just under the 20-day exponential moving average (EMA), which is at 95.93. The loss of this short-term average as immediate resistance hints that upside momentum is fading, while the Relative Strength Index (RSI) at 50.6 sits near neutral territory, suggesting a consolidative rather than impulsive tone for now.

On the topside, the 20-day EMA at 95.9278 is the first barrier that bulls would need to reclaim to revive a more constructive bias and open the way for a retest of all-time highs around 97.10. Looking down, the 95.00 level will be the key support area.

Currency Hedger No Comments

British Pound tumbles as risk-off mood boosts the US Dollar

  • GBP/USD retreats from 1.3363 as risk sentiment turns defensive.
  • Chipmaking headlines pressure Sterling as markets await Fed decision.
  • BoE expected to hold rates despite July Oil-price shock.

The Pound Sterling retreats by 0.13% even though the Greenback is flat during the day, as risk appetite shifted sour on news that a Chinese state-backed company is producing chipmaking machines, prompting a sell-off in ASML, the Dutch-based company.  The GBP/USD trades at 1.3305, after reaching a high of 1.3363.

GBP/USD slips as chipmaking worries, Fed-BoE caution, UK political uncertainty weighed

The de-escalation of the Middle East conflict is a relief for major central banks, as Oil prices slide as the US paused attacks on Iran over the weekend. The US President Donald Trump warned of further military action if negotiations between Washington and Tehran fail. He said that attacks would be “very powerful.”

On Monday, the US economic docket featured Durable Goods Orders for June, which improved from -4% contraction to 0.3% MoM, missing estimates of 1.6% expansion. However, traders’ focus will be on the Federal Reserve (Fed) monetary policy meeting, which is expected to keep rates unchanged, with odds at 60%. The chances of a 25-basis-point rate hike are slim, at about 40%, according to Prime Terminal data.

Source: Prime Terminal

In the UK, the schedule was absent, but investors are also awaiting the Bank of England (BoE) monetary policy meeting. Here, investors are confident that the UK central bank will keep rates unchanged at 3.75% despite the jump in Oil prices in July.

Sterling would remain pressured as investors assess the intentions of the new government led by Prime Minister Andy Burnham.

GBP/USD Price Forecast: Technical outlook

Chart Analysis GBP/USD
GBP/USD daily chart

In the daily chart, GBP/USD trades at 1.3304, keeping a mild bearish bias as spot holds below the simple moving average cluster now aligned near 1.3367. The pair also remains under the broader downward resistance trend line projected from the 1.3465 break area, while the Relative Strength Index (14) around 43 suggests subdued upside momentum rather than outright selling capitulation.

On the topside, initial resistance is seen at the simple moving average zone around 1.3367, with a sustained break exposing the downtrend barrier linked to the 1.3465 region. On the downside, the next notable technical floor is the rising support trend line anchored near 1.3159, where buyers would be expected to regroup if bearish pressure extends.

Currency Hedger No Comments

EUR/GBP Price Forecast: In a positive trend with bulls eyeing 0.8555 resistance

  • EUR/GBP dips found buyers at 0.8530, which keeps the 0.8555 high on the bulls’ focus.
  • A cease of hostilities in Iran and the decline in oil prices have given a fresh boost to the Euro.
  • The Euro is on a bullish correction after a 2.5% sell-off from June’s highs.

The Euro (EUR) has picked up towards the 0.8540 area against the British Pound (GBP) on Monday, after a mild pullback on Friday found support at 0.8530. The pair maintains the immediate bullish trend from mid-July lows at 0.8455, with bulls looking at three-week highs in the area of 0.8555. 

The Euro is drawing support from a moderate relief rally on Monday, as the US and Iran halted their hostilities, which allowed Oil prices to decline about 9% from last week’s highs, with the barrel of Brent Oil down to $87.40 from above $96.00 last Thursday. Eurozone countries are net Oil importers, and the Crude rally seen over the last few weeks had threatened to strangle economic activity.

In the UK, Prime Minister Andrew Burnham’s spending plans keep investors on edge while the focus this week shifts to the Bank of England (BoE) monetary policy decision. The BoE will, all but certain, leave interest rates on hold, but investors will be very attentive to the vote split and Governor Bailey’s press release to assess the chances of any rate hike in the near-term.

Technical Analysis: In a bullish correction following the June-July sell-off

EUR/GBP Chart Analysis

EUR/GBP trades at 0.8543, keeping a constructive near-term tone as it holds within a bullish channel from mid-July lows. The pair is correcting higher after a 2.5% decline from June highs, with momentum indicators hinting at a mild upside bias. The Relative Strength Index (14) is around 60, hinting at positive momentum, even as the MACD (12, 26, close, 9) has slipped marginally into negative territory.

The bullish structure maintains the July 8 and 24 highs at 0.8555 in play. Above that level, the top of the channel, now around 0.8565, and July 2 and 3 highs, in the area of 0.8575, are likely to test bulls.

On the downside, immediate support emerges at the confluence of the channel floor and July 23 and 24 lows, around 0.8530. Below here, a previous resistance area, around 0.8510 (July 17, 20 highs), is likely to be targeted ahead of the July 20 low, at 0.8483.

Currency Hedger No Comments

Indian Rupee recovers further as US-Iran war pause hits oil prices

  • The Indian Rupee gains further, capitalizing on a correction in oil prices and the US Dollar.
  • US President Donald Trump pauses attacks on Iran to allow time for diplomacy.
  • Investors expect the Fed to leave interest rates unchanged on Wednesday.

The Indian Rupee (INR) extends its recovery against the US Dollar (USD) at the start of the Federal Reserve’s (Fed) monetary policy week. The USD/INR pair falls further to near 96.10 as the pause in military aggression between the United States (US) and Iran has weighed heavily on oil prices and has diminished the safe-haven appeal of the US Dollar.

In the opening trade, the MCX Crude Oil contract expiring on August 19 trades 4.75% lower to near Rs. 8,200.

The appeal of currencies from economies, such as India, which rely heavily on oil imports to fulfill their energy needs, improves when oil prices fall sharply.

Meanwhile, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.25% lower to near 101.25.

US holds strikes on Iran on exhaustion of target list

Two-week-long exchange of attacks between the US and Iran paused over the weekend as Washington confirmed that further military aggression would be unnecessary, confirming that the target list has been exhausted.

According to Axios, Adm Bradley Cooper, the top US military commander in the region, had told Trump the US military campaign had reached the limits of its effectiveness, The Guardian reported. Cooper added that there was little point in continuing the bombing campaign without a return to major combat operations.

In response, Iran also paused attacking US bases in its neighbouring nations, but confirmed that its position remains “attack for attack”.

Meanwhile, US ambassador to the United Nations (UN), Mike Waltz, also told Fox News on ⁠Sunday that President Donald Trump had decided to pause US attacks to allow more time for diplomacy, Reuters reports. This has renewed hopes for diplomatic efforts between both nations.

Investors await key Fed policy

This week, the major trigger for global markets will be the Federal Reserve’s (Fed) monetary policy announcement on Wednesday, in which the central bank is expected to leave interest rates unchanged in the range of 3.50%-3.75%. So far this year, the Fed has not done any monetary policy adjustments.

Investors will pay close attention to the monetary policy statement and Fed Chair Kevin Warsh’s press conference to get fresh cues regarding inflation and the economic outlook. Warsh is unlikely to deliver any remarks regarding the monetary policy guidance, as he clarified in its last press conference that “so-called forward guidance is not well-suited in the current policy juncture”.

Technical Analysis: USD/INR falls toward 20-day EMA

USD/INR trades lower at around 96.26 at press time. The pair remains underpinned by a constructive near-term bias, with spot holding above the 20-day Exponential Moving Average (EMA) at 95.9851.

The mildly positive 14-day Relative Strength Index around 57 suggests ongoing bullish momentum, though not yet in overbought territory, allowing room for further gains while the price action stays supported above the short-term EMA.

On the downside, immediate support is now seen at the 20-day EMA near 95.99, which protects the recent advance; a daily close below this level would hint at a deeper corrective phase toward prior price congestion. Looking up, the all-time high at around 97.10 will be the key resistance level.

Currency Hedger No Comments

EUR/JPY Price Holds gains around 186.50 within rising wedge

  • EUR/JPY could face initial resistance around the rising wedge top at 186.90.
  • The 14-day Relative Strength Index near 60 indicates firm upside momentum without entering overbought territory.
  • The primary support lies at the nine-day EMA of 186.04.

EUR/JPY gains ground after registering minor losses in the previous day, trading around 186.50 during the Asian hours on Monday. The currency cross is keeping a bullish near-term bias as it holds above both the nine-period and 50-period Exponential Moving Averages (EMAs). The configuration of the short-term EMA above the longer-term EMA suggests a constructive trend backdrop.

Meanwhile, the 14-day Relative Strength Index (RSI) near 60 points to firm but not yet overbought upside momentum, hinting that buyers still retain control unless price slips back below the nearby averages. However, the daily chart technical analysis shows that the EUR/JPY cross is rising within a rising wedge, indicating a strong bearish reversal risk.

The EUR/JPY cross could find the primary resistance at the upper boundary of the rising wedge around 186.90. Further advances could support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.

On the downside, the initial support lies at the nine-day EMA of 186.04, followed by the 50-day EMA at 185.31, aligned with the lower boundary of the rising wedge. A break below the wedge put downward pressure on the EUR/JPY cross to navigate the region around the five-month low of 181.87, recorded on March 16, and the seven-month low of 180.81.

Chart Analysis EUR/JPY
EUR/JPY: Daily Chart
Currency Hedger No Comments

Three markets to watch next week

The past week was marked by crude oil prices returning to triple digits on expiring September contracts and a continuation of the equity market selloff. Geopolitics once again served as the primary driver for investors, fueled not only by the situation in the Middle East but also by broad new US tariffs. Wall Street earnings season delivered solid corporate results, though these proved insufficient to lift investor sentiment. A fresh wave of reports from tech giants such as Microsoft and Apple might alter that dynamic. Furthermore, decision day arrives for two key central banks, namely the Federal Reserve and the Bank of Japan. Given this concentration of high-impact events, three markets warrant close attention in the coming days: USD/JPY , Gold and US100 .

USDJPY

The Japanese currency has struggled recently, with the past week defined by mounting inflationary pressure in Japan driven in part by higher global energy costs. This week brings a direct showdown between two major central banks. On Wednesday, the FOMC will announce its policy decision, followed by the second press conference from the new Fed Chair Kevin Warsh. On Friday, the Bank of Japan will present its stance on interest rates, preceded in the morning by the Tokyo consumer price index release. Market consensus anticipates that both the Fed and the BoJ will hold interest rates at current levels, with the BoJ policy rate currently at 1.0 percent. Investors will focus heavily on potential guidance regarding future monetary tightening, particularly given that the yen trades near 40-year lows alongside rising import costs. Historical currency interventions in Japan demonstrate that verbal pressure alone, lacking decisive BoJ action, offers only temporary relief for the yen. Moreover, sentiment conveyed by the US central bank remains the primary catalyst for USD/JPY trends. Should the Fed maintain a hawkish stance while the BoJ holds back from aggressive signals due to growth concerns, USDJPY could resume its upward trajectory toward the 165 level. Conversely, a hawkish surprise from the BoJ, supported by a hotter Tokyo CPI reading and upwardly revised inflation forecasts, could trigger a sharp rally in the yen and force a rapid unwinding of massive speculative short positions.

Gold

While last week was shaped by shifting sentiment surrounding Middle Eastern geopolitical tensions and oil prices, this week presents a direct test for the gold market from US monetary policy and incoming economic data. The principal catalyst for volatility will be Wednesday’s FOMC decision, followed on Thursday by US GDP figures and the June PCE inflation metric, which remains the Federal Reserve’s preferred inflation gauge. Gold continues to show high sensitivity to real interest rates and the trajectory of US Treasury yields. The bullion’s historic gains during periods when rate cuts are priced in clearly illustrate this relationship: as real yields decline, capital shifts smoothly into non-yielding assets. If Thursday’s PCE report points to persistent inflationary pressures and the Fed signals that rates must remain elevated for longer, gold could stay under pressure, particularly if crude oil marches back toward 100 dollars per barrel. In the alternative scenario, featuring a cooler PCE reading and waning geopolitical risk, the precious metal would gain strong momentum to break out of its recent downtrend.

US100 (Nasdaq 100 Futures)

The past week delivered another wave of selling across the global semiconductor and AI memory sectors. This week introduces the next slate of Big Tech quarterly earnings on Wall Street, coinciding directly with the Federal Reserve meeting. On Wednesday, Microsoft and Meta Platforms will report their quarterly results, followed by Apple and Amazon on Thursday. These announcements overlap with the FOMC interest rate decision on Wednesday and the US GDP and PCE releases on Thursday. Investors will scrutinize not only top-line revenue growth but primarily the return on capital expenditure dedicated to artificial intelligence infrastructure. Stretched valuations among Big Tech firms leave a remarkably narrow margin for error. Market dynamics seen during previous tech corrections demonstrate that even minor disappointment regarding forward margin outlooks can trigger index-wide selling, regardless of robust current earnings. Strong reports from market leaders coupled with measured commentary from the Fed could provide the US100 with the momentum needed to rebound from its recent pullbacks. Conversely, disappointing forward guidance paired with hawkish rhetoric from Kevin Warsh risks deepening the ongoing correction.

Currency Hedger No Comments

Oil Slides Into The Weekend!

Brent futures (OIL) down 3.5%! Diplomacy is back? Oil prices sharply turned lower following reports that, under pressure from Beijing, Pakistan and Iran are considering a return to the negotiating table with the US. Brent futures (OIL) immediately pulled back by 1% to around $90.50 per barrel, deepening today’s losses and erasing nearly all of yesterday’s gains (currently: -3.5%).

Mixed Signals from the Middle East: A Potential Return of Diplomacy?

Following the recent escalation of Middle East tensions and oil prices returning to a monthly high, the market is eagerly snapping up the slightest mention of returning diplomacy, attempting to extract some end-of-week optimism. Over the longer term, Pakistan’s efforts alone will not be enough, especially since both sides of the conflict are playing solely to safeguard their own interests, and reports of resuming talks are accompanied by further warnings for US citizens in the region.

Below are the key headlines from recent hours:

  • Omani delegation in Tehran regarding the Strait of Hormuz: An Omani delegation arrived in Iran to discuss mechanisms for managing ship traffic in the Strait of Hormuz. Tehran advocates co-managing the waterway alongside Oman, but the US and Gulf states reject such a setup.
  • China and Pakistan push for a resumption of peace talks: Under pressure from China, Pakistan is considering attempting to resume stalled negotiations between the US and Iran aimed at ending the nearly five-month-old war. Exploratory discussions took place this week in Islamabad during a visit by the Iranian interior minister.
  • Tough rhetoric from Iran’s foreign minister: Abbas Araghchi stated that Iran will not bow to the US nor tolerate threats, pointing to Washington’s stance as the main obstacle to peace talks. He also reported continuous consultations with Russia and China, pledging unconditional protection of Iran’s interests in the Strait of Hormuz.
  • US warning for citizens in the Middle East: The US Embassy in Jordan urged Americans to reconsider travel to the Middle East due to escalation risks and potential attacks by Iran and its allies. Warnings were issued regarding airspace closures and flight cancellations, and citizens were advised to avoid US military bases in Jordan.
  • Trump warns Iran’s allies: In his latest social media post, the US President stated that Russia or China supplying weapons to Iran “will end badly for them.” Donald Trump added, however, that Xi and Putin said they do not plan such sales.

Technical Analysis: OIL (Brent Futures)

Reports of potential de-escalation in the Middle East sparked selling pressure on Brent crude (OIL). On the H1 chart, price dynamically dropped into a key support zone defined by the 120-period EMA ($90.48) and the 50.0% Fibonacci retracement ($90.16). A breakdown below this area could open the door for further declines toward the 61.8% Fibo level ($88.93). Conversely, defending current levels could favor a corrective bounce. The immediate resistance lies at the 38.2% Fibo retracement ($91.38), followed by the 24-period EMA ($92.47). The RSI is approaching oversold territory (32.1), suggesting the possibility of a temporary easing in bearish pressure, especially if no new pro-war comments emerge from the White House.

Source: xStation5