

Market Analysis
EURUSD
Prediction: Expected Increase
Fundamental Analysis:
The EUR/USD pair climbed above the 1.1050 level on Thursday as market sentiment shifted towards a risk-on approach, driven by U.S. Producer Price Index (PPI) data. This has heightened expectations for the Federal Reserve to cut interest rates in their upcoming meeting on September 16. Markets are now betting that the Fed will begin a rate-cutting cycle next week.
Meanwhile, Euro traders are relatively calm heading into Friday, with limited significant data from the Eurozone. This follows the European Central Bank’s recent decision to lower its main rate to 3.65%, down from 4.25%. The next major U.S. data release is the University of Michigan’s Consumer Sentiment Index, which may shed light on consumer confidence as the week concludes.
In August, the U.S. PPI rose by 0.2% month-on-month, with core PPI increasing by 0.3%. On a yearly basis, headline PPI fell to 1.7%, slightly underperforming market expectations of 1.8%, while core PPI remained unchanged at 2.4%. Additionally, initial jobless claims ticked up slightly to 230,000.
Given the continued low inflation in PPI and stable jobless claims, there seems to be little that could prevent the Fed from cutting rates by 25 basis points on September 18. Market odds suggest an 80% chance of this happening, with expectations of four total cuts by December, bringing rates to a range of 425–450 basis points.
Technical Analysis:
If the current bullish momentum holds, EUR/USD could encounter initial resistance around the September high of 1.1155, followed by potential targets at the 2024 peak of 1.1201 and the 2023 high of 1.1275.
On the downside, the immediate target is the September low of 1.1001, followed by the 55-day Simple Moving Average (SMA) at 1.0948 and a key support level at 1.0881. The 200-day SMA, located at 1.0861, remains a crucial level to watch, with further downside targets including 1.0777 and June’s low of 1.0666.
The upward trajectory is expected to persist as long as the pair remains above the 200-day SMA. The four-hour chart indicates a slight uptick in bullish sentiment, with initial resistance at the 100-SMA near 1.1091, followed by levels at 1.1155 and 1.1190. On the downside, immediate support lies at 1.1001, followed by 1.0949. The relative strength index (RSI) currently sits above 56, indicating positive momentum.
XAUUSD
Prediction: Bullish
Fundamental Analysis:
Gold continues its bullish momentum, trading near record highs around $2,550, largely due to a weakening U.S. Dollar. Recent U.S. economic data showed annual producer inflation slowing to 1.7% in August, down from 2.1% in July.
Spot gold peaked at an all-time high of $2,555.11 on Thursday, driven by the European Central Bank’s (ECB) latest policy announcement and key U.S. economic releases. Although these events had minimal impact on the broader FX market, they provided solid support for gold as U.S. stock indices faltered following Wall Street's opening.
The ECB cut the deposit rate by 25 basis points to 3.5% and reduced the main refinancing rate by 60 basis points to 3.65%. Meanwhile, the U.S. Producer Price Index (PPI) rose 1.7% year-over-year, falling below market expectations. Initial Jobless Claims came in line with forecasts at 230K. These indicators favor a potential interest rate cut by the Federal Reserve but don’t strongly point to an aggressive 50 basis point reduction. Following the release, the U.S. Dollar softened, further boosting gold prices.
Technical Analysis:
XAU/USD remains in a bullish trend, hovering near its record highs. On the daily chart, the price has found consistent support around the 20-day Simple Moving Average (SMA) for six consecutive sessions, while the 100 and 200 SMAs continue their upward trajectory at lower levels. Technical indicators show strengthening bullish momentum with potential for further gains.
On the 4-hour chart, the bias remains bullish. The 20-SMA is trending upward above a relatively flat 100-SMA, which sits over $30 below the current price, and the 200-SMA is also rising. Momentum indicators, including the Relative Strength Index (RSI), are showing a strong upward trend, nearing overbought territory, but there are no signs of bullish exhaustion. Buyers are expected to capitalize on any short-term pullbacks, aiming for higher highs.
GBPUSD
Forecast: Bullish Momentum Expected
Fundamental Analysis:
GBP/USD climbed past the 1.3100 mark on Thursday, bolstered by a weakening U.S. Dollar as global risk sentiment improved. U.S. Producer Price Index (PPI) data aligned with market forecasts but did not offer much clarity on inflation trends, which fueled expectations of a potential Federal Reserve rate cut.
Looking ahead, the UK will release its Consumer Inflation Expectations report on Friday, while the U.S. is set to publish the Michigan Consumer Sentiment Index for September. Both reports are key indicators that could shape market sentiment before next week’s Federal Reserve meeting.
In August, U.S. PPI rose by 0.2% month-on-month, with core PPI showing a slightly stronger increase of 0.3%. On an annual basis, headline PPI moderated to 1.7%, falling short of the forecasted 1.8%. Market participants are now pricing in an 80% chance of a 25-basis-point rate cut from the Fed at its meeting on September 18.
Technical Analysis:
GBP/USD leveraged the U.S. Dollar’s recent weakness on Thursday, reclaiming the 1.3100 level after briefly dipping earlier in the week. The pair found solid support just above 1.3000, with bullish price action now driving the pair higher.
Technically, the pair continues to trade well above the 50-day Exponential Moving Average (EMA), currently near 1.2970, signaling ongoing bullish momentum. While sellers have capped gains below the multi-year highs above 1.3250, the likelihood of a deeper pullback toward the 200-day EMA at 1.2757 is diminishing.
USDJPY
Prediction: Decrease
Fundamental Analysis:
The USD/JPY pair continued its decline during the Asian session on Friday, dipping below the mid-141.00s and edging closer to the year-to-date low established earlier in the week. Bearish sentiment dominates the current market environment, favoring the continuation of the downtrend that has persisted for the past two months.
The U.S. Dollar hit a fresh weekly low amid rising expectations of a more aggressive rate cut by the Federal Reserve next week, driven by softer-than-anticipated U.S. Producer Price Index data. There is now a more than 40% chance of a 50 basis point cut at the September meeting, keeping U.S. Treasury yields near their 2024 lows, which weighs on the dollar.
Meanwhile, the Japanese Yen is benefiting from the Bank of Japan’s hawkish tone, which hints at potential rate hikes if economic conditions align with forecasts. BoJ board member Naoki Tamura indicated that while the end of the accommodative policy is still distant, this divergence from the Fed’s dovish stance is prompting the unwinding of Japanese Yen carry trades, adding to the downward pressure on USD/JPY.
Technical Analysis:
The USD/JPY pair remains in a downtrend, although Wednesday’s long-tailed candle suggests the potential for an upward correction, with key resistance levels possibly being tested.
Bears continue to control the market, as indicated by the flat Relative Strength Index, which points to potential consolidation in the near term. If USD/JPY closes below the 142.00 mark, it could drop toward the September 11 low of 140.71. A breach of this level would expose the December 28, 2023 cycle low of 140.25, followed by 140.00.
On the upside, immediate resistance lies at 142.00. A break above this level would target the September 12 high of 143.04, the Tenkan-Sen at 143.96, and Senkou Span A at 144.50.
Disclaimer
Derivative investments involve significant risks and may result in the loss of the capital you invest. You are advised to carefully read and study the legality of the company, products, and trading rules before deciding to invest your money. Be responsible and accountable in your trading.
RISK WARNING IN TRADING
Transactions via margin involve products that use leverage mechanisms, carry high risks, and are certainly not suitable for all investors. THERE IS NO GUARANTEE OF PROFIT on your investment, so be wary of those who guarantee profits in trading. You are advised not to use funds if you are not prepared to incur losses. Before deciding to trade, ensure that you understand the risks involved and also consider your experience.