Due to low market volatility, the levels I identified were not tested, so I did not enter any trades.

The recent sharp rise in the yen has ended, but it has brought the carry trade back into focus. The question now is whether large-scale unwinding of this strategy could have a significant impact on the future direction of USD/JPY. The mechanics are straightforward: for years, investors have borrowed cheaply in yen at ultra-low Japanese interest rates and invested the funds in higher-yielding assets. As long as the yen was weakening, the strategy provided a double benefit, but currency appreciation turned it into a loss because the debt became more expensive to repay. Accelerated unwinding of these positions forces funds to sell assets and convert the proceeds into yen, which would provide even greater support for the Japanese currency. I would also note that the Bank of Japan will hold its meeting on September 18, swaps are fully pricing in a 25-basis-point rate hike, and a board member has already indicated that an unusually large move cannot be ruled out. If the central bank confirms a hawkish stance, the yen will continue to strengthen.

Today's US inflation report could also cause volatility in USD/JPY, although the situation here is somewhat different. I expect CPI to accelerate due to higher fuel and oil prices, while the core component should remain more subdued. The University of Michigan's consumer sentiment and inflation expectations data will also be released. Under normal circumstances, stronger inflation and increased expectations of a Fed rate hike would push the pair higher due to the difference in policy approaches between the Fed and the Bank of Japan. I believe that a high CPI reading could trigger a sharp but limited move higher in USD/JPY, which would run into the risk of renewed intervention by Japanese authorities. Weak inflation, on the other hand, would only increase pressure on the dollar and push the pair lower.

As for the intraday strategy, I will focus primarily on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY when the entry price reaches around 154.25 (the green line on the chart), with a target of rising toward 155.06 (the thicker green line on the chart). Around 155.06, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. The pair may rise today, but the upward potential is relatively limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if the price tests 153.90 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. A rise toward the opposite levels of 154.25 and 155.06 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after the 153.90 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 153.10, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. The pair will come under renewed pressure today if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if the price tests 154.25 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 153.90 and 153.10 can be expected.

What the Chart Shows:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the projected price at which Take Profit orders can be placed or profits can be closed manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the projected price at which Take Profit orders can be placed or profits can be closed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders should be very cautious when making market-entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during a news release, always use stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is an inherently losing strategy for an intraday trader.

The test of 1.3517 occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. The same situation, but in the opposite direction, occurred at 1.3502.

The pound rose after the UK economy grew by 0.4% in July. On an annual basis, growth reached 1.6%. However, the composition of growth is more interesting. Services increased by 0.4% month-on-month, production by 0.2%, and construction by 0.1%, while over the three-month period, production and construction both declined by 0.5%. GDP growth was driven by programming and consultancy, which increased by 3.5% month-on-month and contributed 0.12 percentage points to GDP, meaning that almost one-third of the monthly increase came from a single sector. The report explicitly noted that many of the companies with the highest turnover in this segment are involved in artificial intelligence and cloud computing.

The next direction for the pound will be determined by US inflation, as the British currency has no significant domestic catalysts, while the GDP report released this morning has already been priced in. I expect inflation to come in above economists' forecasts. Under these conditions, the pound remains dependent on external factors. Strong inflation will restore demand for the dollar and could push GBP/USD lower, especially since the pair's recent rise was driven mainly by US dollar weakness caused by interventions. A weak report, on the other hand, would return the initiative to buyers. The University of Michigan's consumer sentiment and inflation expectations indexes will also be released and could amplify the market reaction. I expect no decisive trend to develop for the pound before the Fed meeting, while today I anticipate a sharp but possibly short-lived move.

As for the intraday strategy, I will focus primarily on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound when the entry price reaches around 1.3517 (the green line on the chart), with a target of rising toward 1.3548 (the thicker green line on the chart). Around 1.3548, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. The pound can be expected to rise today only if the US data are weak. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today if the price tests 1.3497 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. A rise toward the opposite levels of 1.3517 and 1.3548 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell the pound after the 1.3497 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 1.3464, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Strong pressure on the pound will return if the US economic data are strong. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today if the price tests 1.3517 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.3497 and 1.3464 can be expected.

What the Chart Shows:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the projected price at which Take Profit orders can be placed or profits can be closed manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the projected price at which Take Profit orders can be placed or profits can be closed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders should be very cautious when making market-entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during a news release, always use stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is an inherently losing strategy for an intraday trader.

The test of 1.1603 occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not sell the euro.

The euro is approaching the release of US inflation data amid heightened expectations, and I consider this report the key event of the day. The headline figure is likely to accelerate under pressure from higher fuel prices and expensive oil, pushing annual inflation closer to 3.5–3.6%, while core inflation should be much more moderate, remaining around 2.5%. In my view, this divergence will be the main focus, as hawks will point to the headline figure and underlying demand, while doves will emphasize stable core inflation and the absence of secondary effects.

For the single currency, the situation is straightforward: stronger inflation will restore demand for the dollar and put pressure on EUR/USD, while softer figures will give the euro a chance to continue rising. I would also note that the University of Michigan's consumer sentiment and inflation expectations data will be released today, and the Fed is paying particularly close attention to the latter. The market is pricing in about a 70% probability of a rate hike, and I tend to believe that this estimate will change very little after the report. I expect the euro to remain driven by these expectations until the Fed meeting itself, with today's report likely to cause only a spike in volatility.

As for the intraday strategy, I will focus primarily on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, the euro can be bought when the price reaches around 1.1603 (the green line on the chart), with a target of rising toward 1.1627. At 1.1627, I plan to exit the market and also sell the euro in the opposite direction, targeting a move of 30–35 points from the entry point. The euro can be expected to rise today only if the US data are weak. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today if the price tests 1.1591 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. A rise toward the opposite levels of 1.1603 and 1.1627 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches 1.1591 (the red line on the chart). The target will be 1.1572, where I plan to exit the market and immediately buy in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. The pair will come under renewed pressure if the economic data are strong. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today if the price tests 1.1603 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.1591 and 1.1572 can be expected.

What the Chart Shows:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the projected price at which Take Profit orders can be placed or profits can be closed manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the projected price at which Take Profit orders can be placed or profits can be closed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders should be very cautious when making market-entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during a news release, always use stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is an inherently losing strategy for an intraday trader.

All attention today is focused on the August US Consumer Price Index report, and I expect it to produce a mixed picture. The headline figure will almost certainly accelerate. Producer prices have already increased by 0.4% month-on-month, fuel prices have risen sharply, and Brent closed above $107, so annual inflation could move up to 3.7% or 3.8%, compared with 3.4% in July.

The core component, which excludes energy and food prices, is likely to be more stable and remain near 2.5%. This creates a direct risk for the euro and the pound. If the market focuses on the higher headline figure, demand for the dollar will return, and both pairs will come under pressure, especially since their performance in recent days has largely been driven by US dollar weakness rather than their own strength. A stable core component would provide an argument for those supporting a pause, but the report will not provide a clear answer, and in my view, the reaction will be sharp but short-lived. The University of Michigan Consumer Sentiment Index and inflation expectations will also add to the agenda, and the Fed is paying particularly close attention to these indicators.

It is also worth discussing how sharply the market and economists differ in their assessment of the upcoming meeting. According to a survey of 48 respondents, only 13 expect a rate hike on September 15–16, or 27%, while the majority believe the rate will remain unchanged through the end of 2027. The market, meanwhile, is pricing in a 70% probability of a hike next week. A 43-percentage-point gap based on the same set of available data is significant in itself.

Economists also have a political argument in favor of a pause. The October meeting takes place only a few days before the November 3 election, and half of those surveyed believe that the Fed would act at such a time only if the economic data were very strong. But the most notable point is something else. There will be three dissenting votes regardless of the outcome. If the rate is left unchanged, Hammack, Kashkari, and Logan will dissent, as they did in July. If rates are raised, Bowman, Williams, and Waller will dissent. The Committee is so divided that any decision will represent a victory for one faction over another, making it almost impossible to predict in advance. This explains the market's nervousness and the increased importance of today's report.

Momentum

For the euro, 1.1605 is the key level on the upside. A break above this level opens the way toward 1.1631 and then 1.1653. I associate this scenario with stable core inflation, when the market concludes that the acceleration is limited to fuel prices and will not have a significant impact on the Fed's decision. On the downside, 1.1588 is the key level; a break below it would lead toward 1.1568 and 1.1550. This scenario would materialize if the headline figure comes in closer to the upper end of expectations and the market interprets it as confirmation of its expectations of a rate hike.

I will repeat what applies to any day with an inflation report. The first candle regularly gives a false signal: the price moves sharply in one direction and then reverses, while the spread widens significantly during these minutes. I enter only after the price consolidates beyond the level.

For the pound, the upward level is 1.3525, with targets at 1.3555 and 1.3596; on the downside, 1.3495, with a move toward 1.3474 and 1.3457. The British currency is following the dollar closely today, so the focus should be not on the pound itself but on the US dollar's reaction.

Mean Reversion

For the euro, the upper boundary is 1.1621. Here, I expect an unsuccessful attempt to break above the level, followed by a return below it; this return provides the sell signal. The level is noticeably above the breakout point at 1.1605, meaning that the pair can reach it only during a strong upward move. Therefore, selling from this level would be based on the assumption that the initial reaction to weak CPI data was excessive. The lower boundary at 1.1585 is traded in the opposite manner: buying after an unsuccessful break below the level. It is located very close to the breakout level at 1.1588, so in this area, what matters is not the initial touch but the price action afterward. If the price consolidates below the level, the breakout scenario is valid. If it rebounds back above the level, the mean-reversion scenario comes into play.

For the pound, the upper level is 1.3536. I am interested in a situation in which the pair moves above this level, fails to attract further buying, and quickly returns below it. I would look for selling only after the return below the level. Note that this level is above the breakout point at 1.3525, creating a sequence that is useful to anticipate in advance. First, the pound may break above 1.3525 and move higher, then reach 1.3536, fail to hold above it, and return below the level. Thus, the same upward move can first trigger the breakout scenario and then the mean-reversion scenario, and the two should not be confused.

The lower boundary for the pound is 1.3476, which is below the breakout level at 1.3495, with a relatively wide gap between them. This means that the price is unlikely to reach it without a significant move; a confident decline driven by a strong report would be required. I would consider buying there only if the move below the level is brief, sellers lose momentum, and the pair returns toward the level. If the pound consolidates below it, a mean-reversion scenario is no longer applicable; the breakout scenario is valid, with targets at 1.3474 and 1.3457. The stop-loss is placed beyond the extreme point of the brief move below the level.

There is also a general timing consideration for both pairs. Mean-reversion scenarios are valid today before the inflation report and after the market has stabilized. At the time of the release and during the following half hour, a move beyond a level is highly likely to be genuine rather than false, and trading against it would mean trading against an established move.

First, let us look at yesterday's market reaction to the release of producer inflation data, which showed an increase in both the headline and core figures in August. The market naturally reacted clearly to these developments: Treasury yields surged to levels not seen since autumn 2023, after which the Federal Reserve ended its cycle of interest-rate hikes and began cutting rates in autumn 2024.

But let us return to the situation in the markets. The increase in producer inflation sharply raised the probability of a rate hike at next week's September Fed meeting. The dollar strengthened, but its upward movement was limited. This was partly due to the upcoming release of the consumer inflation report today. Unlike the PPI figures, the CPI is not expected to accelerate on a year-on-year basis. Instead, the year-on-year growth rate is expected to remain at 3.4% for the headline figure, while the core component is expected to decline from 2.5% to 2.4%.

How might the markets react?

I believe that if the report is in line with expectations, the market may interpret this as an opportunity for the Federal Reserve to continue its pause in raising interest rates. Under this scenario, the dollar would come under pressure, while cryptocurrencies and stock indices would receive support, as would gold and silver prices. However, if there is a surprise and the report shows an unexpected increase, potentially driven by higher crude oil prices, the opposite market reaction could be observed amid stronger expectations of higher interest rates.

In conclusion, I would note that both scenarios are plausible, and the probability of either one occurring is approximately 50%.

Forecast for the Day:

USD/JPY

The pair is trading below 156.65 while awaiting the US consumer inflation report. The pair could fall toward 152.15 if the report is in line with expectations. The 153.87 level could serve as a selling level. The stop-loss could be placed at 155.08.

GBP/USD

The pair is trading above the 1.3500 support level. The CPI report could support the dollar if the figure comes in slightly above forecasts. The pair could fall toward 1.3420. The 1.3487 level could serve as a selling level. The stop-loss could be placed at 1.3568.

Gold (XAU/USD) is showing a moderate intraday recovery after falling to $4,300, its lowest level in the past week and a half, earlier in the session. At present, prices have risen to $4,360. Nevertheless, upside potential remains limited, as traders will likely prefer to wait for the release of US consumer inflation data before opening directional positions.

At the same time, data on the US Producer Price Index (PPI) released on Thursday strengthened expectations of higher interest rates from the Federal Reserve (Fed), which could extend support for the US dollar and limit the upside in gold prices.The US CPI is considered a key factor that could influence the Fed's decision next week. Michael Pfister of Commerzbank notes that markets have little time to catch their breath, and today's CPI release could potentially tip the balance when decisions are made at next week's Fed meeting.

Inflation data will be important not only for the upcoming monetary policy decision but also for the US dollar. Investors are already pricing in further monetary policy tightening by the Fed, by approximately 80 basis points by mid-2027, despite core inflation remaining more moderate and uncertainty surrounding the response of the new Fed Chair.

On Thursday, the US Bureau of Labor Statistics (BLS) reported that the headline Producer Price Index (PPI) rose 5.4% year-on-year in August, compared with 4.8% in the previous month, as revised, and above the forecast of 5.3%. The core inflation measure, excluding food and energy, matched forecasts and increased to 4.6% from 4.3% in July. These data add to the risks associated with high energy prices and reinforce expectations that the US central bank will raise interest rates again next week.

Crude oil prices jumped to their highest level since May 21 amid further escalation of tensions between the United States and Iran. On Monday, the US Treasury Department plans to impose sanctions on a major bank that has not yet been named as part of a campaign to exert economic pressure on Iran. Iran-backed Houthi forces in Yemen also captured the key city of Mocha on the Red Sea coast, strengthening their position near the strategically important Bab el-Mandeb Strait and increasing concerns about disruptions to oil supplies.US President Donald Trump also stated that the confrontation with Iran is likely to continue beyond the November midterm elections, maintaining the geopolitical risk premium and potentially continuing to support both oil prices and the US dollar as a safe-haven asset.

Against this backdrop, strong US Consumer Price Index (CPI) data could lead to a stronger dollar, warranting caution when opening long positions in gold. Nevertheless, the precious metal remains on track for a weekly decline and further losses.

From a technical perspective, gold is trading slightly above the 200-day exponential moving average (EMA) at $4,317; therefore, the price continues to receive support from key medium-term trend indicators. However, momentum is weakening: the MACD is moving toward zero, indicating fading momentum, while the Relative Strength Index (RSI) is in negative territory, indicating a loss of bullish strength. The nearest resistance levels are $4,360 and $4,400. On the other hand, the nearest support is at $4,317, reinforced by the 200-day EMA, followed by $4,300. A break below this zone would open the way toward the 50-day SMA and potentially deeper losses.

Escalating tensions in the Middle East pushed oil above $105/bbl this week, hurting investors who had been betting on imminent Fed easing — higher energy prices weigh on equities and bonds while feeding inflation expectations that the central bank will find harder to dismiss. That is why the latest Producer Price Index, which showed a 0.4% monthly increase in August and 5.4% year-on-year, accelerated Thursday's sell-off rather than being ignored.

The current pullback remains within Bitcoin's usual wide trading range rather than signaling a new structural breakdown: the asset has traded roughly between $60,000 and $80,000 since early February, well below the October record near $126,000. Still, repeated failed attempts to hold above $80,000 show how difficult it has been for the recent recovery to continue amid uneven demand from US investors.

Let me remind you that Bitcoin's sharp late-August surge triggered a record wave of short-liquidation activity in perpetual futures, and the asset has since been retracing from that rally. Part of the present weakness therefore reflects the natural fading of the short-squeeze effect that powered the prior move, rather than fresh fundamental bad news.

Today market attention is on the Consumer Price Index, which is expected to show relatively moderate core inflation in the US despite the rise in gasoline prices pushing the headline higher. Several Fed officials have indicated that the September 15–16 rate decision could depend directly on that report. In my view, CPI is the real test for the market: the combination of expensive oil and persistent core inflation could finally tip the scales toward a hawkish Fed decision, whereas softer figures would give Bitcoin another chance to challenge the multi-month resistance around $80,000.

Trading recommendations

Bitcoin

Buyers are currently targeting a return to $78,500, which would open a direct path to $80,200 and then to $81,900; clearing $81,900 would signal attempts to resume a bull market. On the downside, I expect buyers around $77,200. A move back below that area could quickly push BTC toward $75,300. The furthest downside target is around $72,800.

Ethereum

A clear hold above $2,501 opens a direct path to $2,573. The furthest upside target is the high near $2,624; breaking above that would indicate strengthening bullish sentiment and renewed buyer interest. On the downside, I expect buyers around $2,444. A drop back below that area could quickly push ETH toward $2,385. The furthest downside target is around $2,320.

What's on the chart

• The red lines represent support and resistance levels, where the price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.

The wave structure on the hourly chart remains "bullish" despite the two-week decline. The latest completed upward wave broke the previous peak, while the latest downward wave did not break the previous low. Geopolitical conditions remain consistently negative: negotiations between Iran and the United States are not taking place, and the blockade of the Strait of Hormuz remains in place. The FOMC's stance is currently more important for the dollar, but it remains contradictory.

The news background on Thursday provided traders with an opportunity to trade for the first time this week rather than sit on the sidelines. However, the movements we ultimately saw were only very weakly correlated with the nature of the news background. If we set aside all secondary events, only the ECB meeting remains, at which the regulator decided to raise the deposit rate to 2.50%. As a reminder, the deposit rate is considered the main policy rate in the European Union. However, the refinancing rate and the marginal lending rate were also raised by 0.25%. Thus, for the second time in three months, the ECB tightened monetary policy because of accelerating inflation in the euro area. In addition, the ECB's accompanying statement said that inflation would remain above the target level for at least another three years, while the average inflation rate for 2026 is projected at 3%. In 2027 and 2028, inflation is expected to slow to 2.1%. However, it probably makes little sense to pay attention to forecasts two or three years ahead at this point. Geopolitical developments could significantly worsen the position of central banks in controlling consumer prices, or they could resolve the problem without further tightening.

On the 4-hour chart, the pair rose to the 61.8% retracement level at 1.1649 and rebounded from it. Thus, a reversal in favor of the US dollar took place, and the decline toward 1.1588 and 1.1526 began. Consolidation above 1.1649 would allow for a continuation of the upward move toward the next Fibonacci level, 76.4% at 1.1726. No emerging divergences are currently observed in any of the indicators.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 4,558 Long positions and closed 6,869 Short positions. Over the seven weeks in February and March, the bulls' overwhelming advantage evaporated because of the war in Iran, while over the past twenty-three weeks, the situation has become more balanced amid the purported ceasefire and market hopes for an end to the war. The total number of Long positions held by speculators currently stands at 203,000, while the number of Short positions stands at 228,000. The bears remain in the lead, but their advantage is rapidly narrowing.

Overall, over the long term, large market participants continue to view the euro with considerable interest. Of course, events of various kinds around the world, which have been abundant in recent years, affect investor sentiment. In particular, the market is currently keeping a close eye on the situation in the Middle East, where the war alternately appears to end and then starts again. However, geopolitics no longer determines the dollar's fate single-handedly.

News calendar for the United States and the European Union:

• United States – Consumer Price Index (12:30 UTC).
• United States – University of Michigan Consumer Sentiment Index (14:00 UTC).

On September 11, the economic calendar contains two entries, one of which is the US inflation report, which cannot be overlooked. The economic background may influence market sentiment in the second half of Friday's trading session.

EUR/USD forecast and trading advice:

Buying the pair is possible if it closes above 1.1620 on the hourly chart, with a target of 1.1700. Selling the pair is possible if it consolidates below 1.1620 on the hourly chart, with a target of 1.1551. Trader activity and market movements remain relatively weak.

The Fibonacci grids are drawn from 1.1620 to 1.1325 on the hourly chart and from 1.1849 to 1.1325 on the 4-hour chart.

Yet the most important number of the day is not in the futures tape. Traders report that physical Brent was being offered at about $120/bbl on Thursday — more than twelve dollars above the futures settlement price. That gap implies the real market shortage is far sharper than the paper market suggests, and fresh buying from Asia is tightening physical availability even further.

A second supply signal of the same magnitude came out of Riyadh. The kingdom warned that oil output plunged last month to levels not seen since 1990 — a thirty?six?year low that takes Saudi production back to pre?Gulf War levels. The decline was driven by Houthi attacks, supported by Tehran, on Saudi facilities; the war has thereby spilled beyond the Strait of Hormuz and struck the region's largest producer directly.

CIBC Private Wealth Group flagged a change in the market's character. "Oil is trading at highs not seen since May as the market re?prices both the escalation and, increasingly, the duration of geopolitical risk. When prices reach levels that create significant short gamma exposure for options dealers, that positioning adds fuel to the upside," the report said.

The result is a rare divergence between two segments of the same market. Physical demand points to a $120 price, while speculative positioning has hit a ceiling. Traders with access to real barrels are the clear winners; those who bought long futures earlier this week risk a rapid price collapse if profit?taking starts, because paper prices can fall faster than the physical balance can adjust.

The most painful effects are showing up in refined products, where the move has already taken on political dimensions. US retail diesel is approaching an unprecedented $6/gal, European gasoil futures are nearing $200/bbl, and US diesel futures on Thursday topped $5/gal for the first time since April 2022.

I expect a corrective pullback in Brent toward $100–103 over the next sessions as traders lock in profits, since positioning appears exhausted. But understand this would likely be a technical retracement rather than a structural reversal: the $12 physical premium and Saudi output at a 36?year low will not disappear. I wouldn't rule out Washington sharply changing tactics around the Strait of Hormuz before the November elections because of diesel at $6/gal — that political risk remains the single meaningful threat to the bulls.

Technically, buyers need to reclaim the near resistance at $104.70 to target $109.30, a level that will be difficult to break through. The next upside target is around $113.40. On the downside, bears will try to take control of the $100 handle; a decisive break below that range would hit bullish positions hard and push oil down toward $96.54 with scope to test $92.

Because of that shock, the Fear & Greed Index, which was around 65 (greed) in early September, has slid into the fear zone, reflecting the accumulated pressure.

Today, a much more market-sensitive release arrives: the Consumer Price Index for August — and it deserves closer attention than yesterday's PPI. Consensus calls for headline CPI to accelerate to 0.4% month?on?month and 3.4% year-on-year, while core CPI is expected at about 3.1% y/y — both above July's readings. Chairman Kevin Warsh has repeatedly stressed that the September 15–16 rate decision will be data-dependent, so only a notable slowdown in inflation can keep the Federal Reserve from rate hikes. That creates a direct fork for Bitcoin. If the CPI prints hotter than consensus, repeating yesterday's PPI scenario, the market will get further confirmation of a hawkish Fed, and the current pullback from $80,000 to $76,663 risks turning into a deeper, more prolonged correction.

Softer CPI, by contrast, could flip the Fear & Greed Index back toward neutral and give Bitcoin a reason to attempt another assault on its multi-month resistance — especially since the options market still retains a bullish tilt for year?end despite cooling activity in perp futures.

Short-term trading strategy and conditions are described below.

Before the CPI report, Bitcoin is holding in a narrow $77,100–77,900 corridor, and the trading plan revolves around two mirror setups with scenarios for both breakouts and bounces. A confirmed break above $77,500 opens a buy targeting $77,900, where it makes sense to take profit and consider short positions on a potential pullback. Entry is conditional: price must remain above the 50-day moving average (confirming the bullish backdrop), and the Awesome Oscillator must be positive. The second buy scenario trades the bounce: if price approaches the lower band at $77,100 but a break lower is not confirmed, treat it as a false breakout and open a long targeting first $77,500 and then $76,500 as a wider technical reference in case the move extends beyond the near range.

Sell setups are the mirror image. A confirmed break below $77,100 enables a short position targeting $76,500; conditions are opposite (moving average above price and Awesome negative). The second short scenario trades rejection at $77,500 if an upside breakout fails, opening the way to $77,100 and then $76,500.

Ethereum is trading in the $2,462–2,494 range, and the same logic applies on its own price scale. A break above $2,474 signals a buy targeting $2,494 under the same conditions (rising MA below price and Awesome positive). The second buy scenario trades a bounce at $2,462 if a break lower is not confirmed, targeting $2,474 and then $2,442 as a wider reference for continuation.

ETH sell setups begin on a confirmed break below $2,462 with a target at $2,442, provided price is below the moving average and Awesome is negative. The second short works off a rejection at $2,474 if an upside breakout fails, targeting $2,462 and then $2,442. Both indicators are used only as filters to weed out false moves, not as standalone pre-entry signals, so trades should be executed only after price confirms the specified levels — especially given the elevated volatility today's CPI release can produce.

The market situation remains "bullish." The latest completed downward wave did not break the previous low, while the new upward wave has not yet broken the previous peak. Thus, the bulls currently control the market, and their advantage remains intact. The "bullish" trend can be considered broken only after the low of the latest completed wave is breached, that is, below 1.3473.

Traders' attention was focused on the ECB meeting on Thursday, but there were other interesting developments as well. In particular, the US Producer Price Index accelerated slightly more than traders had expected. In August, it came in at 5.4% year-on-year, compared with a forecast of 5.3% year-on-year. Thus, there is every reason to believe that the Consumer Price Index will also accelerate slightly in August. Is this good for the dollar? Yes, because the FOMC will move even closer to tightening monetary policy next Wednesday. At present, bearish traders have not rushed into action, and the market remains in a wait-and-see mode as it awaits the inflation report, which will be released today. In the morning, traders received data on UK GDP and industrial production, which allowed the bulls to recover all of yesterday's losses. GDP grew by 0.4% in July, compared with expectations of 0%, while industrial production increased by 0.6%, against a forecast of +0.2%. Thus, the bulls took control in the first half of the day, but everything may change in the second half.

On the 4-hour chart, GBP/USD reversed in favor of the US dollar and consolidated below the 23.6% retracement level at 1.3538. However, whether the bears will continue their attacks will be determined today and will depend on the news background. A new consolidation above 1.3538 would allow for a resumption of the upward move toward the 0.0% retracement level at 1.3657. No emerging divergences are currently observed in any of the indicators.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became less "bearish" over the latest reporting week. The number of Long positions held by speculators decreased by 8,226, while the number of Short positions decreased by 3,175. The current gap between the numbers of Long and Short positions is effectively as follows: 85,000 versus 135,000. The gap and the bears' advantage are gradually narrowing, although the bears still maintain a substantial advantage. Previously, the bears' dominance was unquestionable, but this is now less clear because the news background has changed.

I still do not believe in a "bearish" trend for the pound, but in the near term, everything will depend on Trump's trade policy, the monetary policy of the Federal Reserve and the Bank of England, as well as the duration, scale, and consequences of the war in the Middle East. In recent months, the market has adjusted its expectations toward peace, but negotiations between Iran and the United States failed without really getting started. And there is no guarantee that they will resume anytime soon. The Federal Reserve's position on monetary policy remains contradictory.

News calendar for the United States and the United Kingdom:

• United Kingdom – Change in GDP (06:00 UTC).
• United Kingdom – Change in industrial production (06:00 UTC).
• United States – Consumer Price Index (12:30 UTC).
• United States – University of Michigan Consumer Sentiment Index (14:00 UTC).

The September 11 economic calendar contains four entries, among which I would highlight US inflation, which currently has a very strong influence on traders' sentiment. The impact of the economic background on market sentiment on Friday may be strong.

GBP/USD forecast and trading advice:

Selling the pair was possible following a rebound from 1.3556 on the hourly chart, with targets at 1.3526 and 1.3489. Both targets were reached. Buying was possible following a rebound from 1.3489, with targets at 1.3526 and 1.3556. The first target was reached.

The Fibonacci grids are drawn from 1.3557 to 1.3272 on the hourly chart and from 1.3158 to 1.3655 on the 4-hour chart.

Stock index performance

This time, the trigger is relentless oil gains and fresh evidence of sticky inflation. The Producer Price Index rose 0.4% month-on-month in August, the highest reading since May. ECB President Christine Lagarde also issued a hawkish warning that eurozone inflation will remain materially above the 2% target through 2028. Both signals imply the global central bank tightening cycle is not over, leaving little near-term support for risk assets.

Treasury yields jumped again on the oil surge, a strong wholesale inflation print, and US President Donald Trump's pledge to send Americans $5,000 checks if Republicans retain Congress — a promise that would add more than $1 trillion to the federal deficit. Infrastructure Capital Advisors warns that the Treasury yield rally is unequivocally negative for equities. Higher rates not only raise borrowing costs but also pull capital from risky stocks into safer bonds.

Yen and currency interventions dynamics

However, KBC Securities sees the main market threat not as bonds but the yen. It is the indicator the company is watching closely as a warning sign for global equities. Analysts point to still-elevated speculative positioning.

A rapid unwind of carry trades could force funds to sell the most liquid, high-return assets for cash, hitting the tech names that powered the S&P 500's rally this year — and cryptocurrencies — hardest. Those were exactly the assets that suffered most in 2024.

Investors now pin hopes on Friday's CPI report. Traders have already pushed the odds of a September Fed hike to about 70%, pricing in further tightening by October. For equities to recover, yields and oil need to come down. A soft CPI is arguably the only scenario that would make that happen.

Technically, the daily chart shows that the S&P 500 is completing both a narrowing-wedge and a 1?2?3 pattern. Short positions opened at 7,675 should be held and scaled in occasionally. Targets to watch are 7,520 and 7,460.

The decline stems from two sources, and both should have supported the metal. Thursday's data showed the US producer price index rose 0.4 percent month-on-month, the largest since May, while Brent rose almost to $108 per barrel as Iran and the US entrench for a prolonged war. Neither inflation nor military escalation helped gold.

Renewed price pressure, partially caused by higher energy costs, intensified fears that inflation may prove more persistent. The paradox that now defines the metal's entire dynamic lies in this linkage. War pushes oil higher, oil accelerates inflation, inflation raises the odds of Federal Reserve tightening, and tightening hits a non-yielding asset. Geopolitical risk, which has worked for gold for centuries, now works against it, and three consecutive weeks of declines confirm this.

The second blow came from the debt market and deserves separate attention. Yields jumped after the US Treasury bought fewer bonds than expected in its first expanded operation. This cast doubt on the effectiveness of Scott Bessent's unconventional intervention designed to stabilize the market and restrain a spike in long-term yields.

A reasonable question arises: why did the Treasury's failure not play out in favor of the metal through the devaluation narrative? I am convinced the answer is the time horizon: in August similar doubts about Washington's ability to manage debt pushed gold up nearly 15 percent, whereas now the market reacts to a nearer, more tangible factor — the Fed meeting on September 15–16. The rate channel works faster than the narrative. Moreover, the Treasury's promises and purchase volumes fell short of market expectations.

I expect the balance of forces to swing in favor of the metal after the September meeting, and here is why. Swaps price in about a 70 percent probability of a hike — the decision is largely priced in — but the consequences for the debt market, with ten-year yields around 5 percent, the market has not yet fully digested. I tend to think the hike itself will be the turning point for gold by the sell-on-the-rumor, buy-on-the-fact logic. The risk to this forecast lies in Kevin Warsh's rhetoric: if he signals not a one-off step but the start of a full cycle, the metal will fall below $4,200 and a third week of declines will turn into a fifth.

As for the current technical picture for gold, buyers need to take the nearest resistance at $4,372. That will allow a target of $4,425, above which a breakout will be difficult. The farthest target is the $4,480 area. In a decline, bears will try to seize control of $4,304. If they succeed, a range breakout will deliver a serious blow to bulls' positions and push Gold toward the $4,249 low, with a prospect of extending to $4,200.

The price test at 154.28 occurred when the MACD indicator had moved far above the zero line, limiting the pair's upside potential. For this reason, I did not buy the dollar.

Yesterday's US producer-price report supported the dollar against the yen, as inflation accelerated to 5.4% year-on-year and rising oil prices strengthened expectations for a Federal Reserve rate hike in the near term. In normal circumstances, such a signal would be a direct reason for a strong rise in USD/JPY, since a higher US rate widens the yield gap with Japan and traditionally weighs on the yen. However, the situation is different now, and I would not be quick to write off the Japanese currency. The yen is still being supported by several powerful factors that run counter to a strong PPI. Ongoing interventions by the US and the Bank of Japan weaken the dollar across the board, investors are winding down carry trades, and the market is confidently expecting a BoJ rate normalization as soon as next week. In my view, this is why even a strong US inflation signal struggles to push the pair higher, and yesterday's dollar spike against the yen was much more modest than in pairs with other currencies.

I believe USD/JPY's further fate will be decided by the clash of two forces — hawkish Fed expectations driven by rising prices, and the combination of interventions with policy normalization in Japan. Before today's US consumer-price report, I lean toward the yen remaining resilient, but with an unexpectedly high CPI, the pair should prepare for a volatility spike that I will be watching closely.

As for the intraday strategy, I will rely mostly on scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: I plan to buy USD/JPY today if the price reaches the entry point around 154.35 (the green line on the chart), targeting a rise to 155.06 (the thicker green line on the chart). Around 155.06, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip move from that level). It is best to return to buying the pair on corrections and meaningful pullbacks of USD/JPY. Important: before buying, make sure the MACD indicator is above the zero line and only beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests of 153.98 while the MACD is in oversold territory. This will limit the pair's downside potential and lead to an upward reversal. One can expect moves to the opposite levels 154.35 and 155.06.

Sell scenarios

Scenario No. 1: I plan to sell USD/JPY today only after a break of 153.98 (red line on the chart), which would lead to a quick decline in the pair. The sellers' key target will be 153.10, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip reversal from that level). Sellers can return at any moment; it only takes a hint from the central banks. Important: before selling, make sure the MACD indicator is below the zero line and only beginning to fall from it.

Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests of 154.35 while the MACD is in overbought territory. This will limit the pair's upside potential and trigger a downward reversal. Expect a decline to the opposite levels of 153.98 and 153.10.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.

The price test at 1.3513 occurred when the MACD indicator had moved far below the zero line, limiting the pair's downside potential.

Yesterday the dollar jumped sharply after the US producer-price report, which unambiguously pointed to stronger inflationary pressure. The indicator rose 0.4% in August versus 0.1% in July; annual rates sped up to 5.4% and core to 4.7%. All this significantly strengthened the market's odds of another Federal Reserve rate hike this year.

However, bulls get a chance to fight back today, because in the first half of the day an important block of UK data is released — GDP, industrial production, and the goods trade balance. GDP is key here because it directly reflects growth rates and, via expectations for the Bank of England's rate, sets the pound's direction, while production and the trade balance will complement the picture of the real sector. Recall that the previous GDP report already pointed to a slowdown and growth had been largely carried by services, so today's figures are particularly important to understand whether this fragile dynamic persists.

In my view, sterling can rise only if the data are noticeably better than forecasts, since only a confident positive print can overcome pressure from a stronger dollar. If data disappoint or match expectations, sellers will keep the initiative, especially with the US inflation report still ahead.

As for the intraday strategy, I will rely mostly on scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: I plan to buy the pound today if the price reaches the entry point around 1.3517 (green line on the chart), targeting a rise to 1.3548 (the thicker green line on the chart). Around 1.3548, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip move from that level). Expect sterling to rise only after good data. Important: before buying, ensure the MACD indicator is above the zero line and only beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in case of two consecutive tests of 1.3502 while the MACD is in oversold territory. This will limit the pair's downside potential and lead to an upward reversal. One can expect moves to the opposite levels 1.3517 and 1.3548.

Sell scenarios

Scenario No. 1: I plan to sell the pound today after a breach of 1.3502 (red line on the chart), which would lead to a quick decline in the pair. The sellers' key target will be 1.3472, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip reversal from that level). Bad news will restore pressure on the pound. Important: before selling, ensure the MACD indicator is below the zero line and only beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today in case of two consecutive tests of 1.3517 while the MACD is in overbought territory. This will limit the pair's upside potential and trigger a reversal down. Expect a decline to the opposite levels of 1.3502 and 1.3472.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.

The price test at 1.1616 occurred when the MACD indicator had moved far below the zero line, limiting the pair's downside potential, especially after the European Central Bank published new forecasts.

Yesterday the euro managed to hold up despite a powerful blow from the dollar. The US currency was boosted by the producer prices report, where inflation clearly accelerated: the annual figure reached 5.4% with core at 4.7%, and together with rising oil, this strengthened the market's belief in another Federal Reserve rate hike this year. Because producer prices foreshadow consumer inflation, their acceleration became a strong argument for the dollar, and it initially rallied confidently. The ECB's rhetoric helped reverse that mood. By raising rates, Christine Lagarde emphasized the main threat: expensive energy will gradually seep into core inflation and food prices, keeping the headline measure noticeably above target until at least the first half of 2027. In my view, this sounded quite hawkish, since the central bank effectively signaled it does not intend to stop at what has been achieved.

Today the euro enters the day practically without internal guides, since the only calendar item is Italy's quarterly unemployment data, which are marginal for the market. Such an indicator does little to determine direction for the single currency, and relying on it when searching for direction is pointless. It is much more logical that participants' attention has already shifted across the ocean, where the key US inflation report will be released during the American session. I believe expectations for that release will determine euro behavior in the first half of the day. Before such a significant publication, buyers are unlikely to scale up positions because the risk is too high and the data can move the dollar in either direction. I expect EUR/USD to trade in a sluggish range during the pre-US session, with real movement beginning only after the US inflation figures are out.

As for the intraday strategy, I will rely mostly on scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: Today, one can buy the euro if the price reaches around 1.1616 (green line on the chart), targeting a rise to 1.1638. At 1.1638, I plan to exit the market and sell the euro in the opposite direction, aiming for a 30–35 pip move from the entry point. Expect euro growth as part of the continuation of the bull market. Important: before buying, make sure the MACD indicator is above the zero line and only beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in case of two consecutive tests of 1.1603 while the MACD is in oversold territory. This will limit the pair's downside potential and lead to an upward reversal. One can expect moves to the opposite levels 1.1616 and 1.1638.

Sell scenarios

Scenario No. 1: I plan to sell the euro after it reaches 1.1603 (red line on the chart). The target will be 1.1578, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20–25 pip reversal from that level). Pressure on the pair will return today if data is weak. Important: before selling, make sure the MACD indicator is below the zero line and only beginning to fall from it.

Scenario No. 2: I also plan to sell the euro today in case of two consecutive tests of 1.1616 while the MACD is in overbought territory. This will limit the pair's upside potential and trigger a downward reversal. Expect a decline to the opposite levels of 1.1603 and 1.1578.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.

Christine Lagarde staged the second act yesterday. The European Central Bank raised the deposit rate to 2.5 percent, but her words after the decision mattered more. The head of the central bank warned that more expensive energy will gradually flow into core inflation and food prices, and the headline measure will remain above target until the first half of 2027. Inflation in the eurozone is already stuck above 3 percent. The market read all this as a direct hint that the tightening cycle is not over and the next step could come as early as next month. The euro recouped most of its decline because expectations of further hikes outweighed the initial scare from US data.

Today the European calendar is empty. Only Italy's quarterly unemployment level is released, and this indicator is frankly secondary. It speaks to the state of the Italian labor market but is published infrequently and is not comparable in importance to pan-European inflation or GDP reports, so one should not expect an independent impulse for the euro from it.

All attention is on something else. During the US session, the US consumer inflation report is released, and this is the main event of the day — possibly the week. After yesterday's PPI, the question is direct: has the price rise at the production level reached retail prices? Before such a publication, no one risks much, so volatility may noticeably decline until the data are out.

Momentum

For the euro, on the upside I'm watching 1.1617. A break of that level opens the road to 1.1631 and then to 1.1653. This scenario works if CPI is weak, when the market decides the inflation wave is fading and continues to price in the ECB's recent promises. On the downside, the reference is 1.1600; a break leads to 1.1584 and 1.1568. I consider this option more likely if consumer prices confirm the picture drawn by yesterday's producer report. I'll repeat what I said recently: don't enter on the first candle after an inflation data release. Reactions come in waves; the first move often reverses within minutes, and spreads widen then. Wait for price confirmation beyond the level rather than trying to catch the start.

For the pound, on the upside, 1.3531 is in play with targets 1.3565 and 1.3596; on the downside, 1.3495 with movement toward 1.3474 and 1.3457. The pound may react strongly to GDP data, so moves promise to be fairly large.

Mean Reversion

For the euro, the upper boundary is 1.1624. I consider short positions only after an attempt to hold above this mark fails and the price returns below the level. Before the US release, this scenario is quite workable because the market is standing still and any moves beyond the range boundaries tend to be short and hollow. The lower reference is 1.1596, worked out by the opposite logic — I look for long positions after an unsuccessful breakdown to the downside. Note that it sits almost flush with the breakout point 1.1600, and this is precisely the zone where what matters is not the touch itself but the price's behavior afterward.

For the pound, the upper benchmark is 1.3522. Here I'm waiting for a situation where the pair looks higher; there are no buyers to continue, and the price falls back. This return gives reason to look for short positions, not the exit itself to the top. The level lies below the breakout point 1.3531, which is convenient because the two scenarios do not conflict. While the pound drifts below 1.3531, the return pattern remains the main working scheme for the pair.

The lower boundary for the pound is 1.3488, slightly below the breakout level of 1.3495. The logic is mirrored. If price drops to that mark, but sellers don't find continuation, and the pair returns upward, I look for longs aiming for a move back into the body of the range. If the pound consolidates below, the return scenario is canceled, and the breakout model comes into play with targets 1.3474 and 1.3457. In both cases, I place the stop beyond the extreme point of the breakout, not behind the nearest round number.

Meanwhile, Coinbase CEO Brian Armstrong said Bitcoin could reach $400,000 by 2030. Armstrong called that figure a "reasonable target." On what basis should Bitcoin show such a wild rise? To answer, the Coinbase chief listed the usual factors echoed by crypto enthusiasts: adoption of the Clarity Act, high US government debt, a large budget deficit, dollar depreciation, and monetary expansion. Thus, most analysts expect Bitcoin to rise not based on a real increase in demand for the primary cryptocurrency, but because of a growing money supply, a weaker US dollar, and declining trust in government institutions and fiat currencies. In other words, demand would rise simply because trust in governments and central banks is waning while the amount of money in the global economy is increasing. By the same logic, one could say all investment instruments would rise — real estate or equities, for example.

In our view, recent years have shown that periods of hundreds-percent gains within a bull cycle are largely behind us. We admit a new uptrend could begin soon since monetary expansion is plausible. Yet we do not consider that a strong reason to increase allocations to the crypto sector. At the moment, Bitcoin is closer to a new decline than a continuation of the rise.

Trading recommendations for BTC/USD

Bitcoin continues to follow a downtrend despite the strong rally a week earlier. We still expect a drop to $57,500 (the 61.8% Fibonacci retracement of the three-year uptrend), although that level has effectively already been tested. We do not believe the downtrend is over. The current rise in the leading cryptocurrency looks weak for a corrective move and is not a solid case for opening longs. Liquidity may be swept from the $82,850 high, which could trigger a new leg down. On the 4-hour chart, a further decline is also possible after two liquidity sweeps from recent highs (deviations). We think a fall to $75,500 is quite likely. After that either a deviation and renewed rise, or a breakout of the channel and a new leg down toward $50,000.

Trading recommendations for ETH/USD

On the daily timeframe, Ethereum's technical picture changed dramatically in just a few days. Ethereum may now be able to start a new uptrend. However, traders should rely primarily on the weekly chart, where ETH could head for $4,800 — the upper boundary of a five-year sideways channel. On the daily chart, the nearest bearish FVG has been filled, but that FVG belongs to the previous trend; if it triggers a market reaction, it will likely be corrective. Also note the liquidity sweep of the April 17 high and liquidity removal on the 4-hour chart. Bitcoin likewise swept liquidity on the 4-hour chart and remains in a wide sideways channel. Thus, Bitcoin is currently biased lower on both timeframes. If a decline begins, Ethereum will likely follow.

Comments on the charts

CHOCH is a change of character / break of the trend structure. Liquidity means traders' Stop-Losses that market makers use to build their positions. FVG stands for a Fair Value Gap (area of price inefficiency). The price often moves quickly through such areas, indicating the absence of one side in the market. Later, the price tends to return and react to these zones. IFVG is an Inverted Fair Value Gap. After a return to such a zone, the price does not react but impulsively breaks through and then tests it from the other side.

OB means an Order Block. A candle on which a market maker opened a position in order to harvest liquidity and then form their own position in the opposite direction.

Today, the US will publish the August inflation report, the last major report before the Federal Reserve meeting next week. Bitcoin's dynamics and its attractiveness to investors still depend on the Fed's monetary policy, so the US inflation report matters for the crypto market. At the same time, the main reason for Bitcoin's fall over the past year is not the Fed's monetary policy. It remains fairly "tight," since last year the Fed raised the rate three times to support the labor market. However, for the most part, Bitcoin has been falling due to reduced investor demand, the development of the AI sector, the lack of adoption of the Clarity Act, and Donald Trump's overall policy, which does not favor the growth of risk assets.

Also remember that Bitcoin cannot grow forever and constantly. Corrections must also occur, and on higher timeframes they can take months and years. Thus, in any case, we consider Bitcoin's decline over the past year entirely natural. If the Fed raises the key rate next week, Bitcoin may resume its fall. And the Fed can raise the rate only if today's US inflation comes in above forecasts.

Overall BTC/USD picture on 1D

On the daily TF, Bitcoin continues forming a downtrend and has entered a flat phase. The trend structure is downward, and the CHOCH line is at $82,800, where the last LH (Lower High) formed. Only above this level can one consider the downtrend to be completed. Most of 2026, "digital gold" has been between $60,000 and $82,500, which means the price may remove liquidity from the last LH and start a new move toward the lower boundary of the sideways channel.

Overall BTC/USD picture on 4H

On the 4-hour TF, Bitcoin is also clearly flat and has twice removed sell-side liquidity, forming two deviations of the channel's upper boundary. Thus, traders received at least two sell signals, allowing them to expect declines with targets of 50% and 100% of the channel width. As we see, the first target has already been reached, and Bitcoin continues moving toward the lower boundary of the sideways channel. Near the lower boundary, also monitor deviations and liquidity grabs. As long as Bitcoin remains in a flat range, trading should be only from the channel's boundaries.

Trading recommendations for BTC/USD:

Bitcoin continues forming a downtrend despite the strong rise a week earlier. We still expect a drop to $57,500 (the 61.8% Fibonacci level of the three-year uptrend), although this level has already been reached. But we do not believe the downtrend is finished. The current rise in the first cryptocurrency only weakly resembles a correction, but that is not a strong argument for opening long positions. Liquidity can be removed from the $82,850 high, which may provoke a new wave of the downtrend. On the 4-hour TF, a decline can also be expected after the two liquidity grabs from the recent highs (deviations). We believe a fall to $75,500 is quite likely. Further — either a deviation and a new rise, or an exit from the channel and a new downtrend wave with the prospect of a fall to $50,000.

Explanations for the illustrations:

CHOCH – break of the trend structure.

Liquidity – Liquidity, stop losses, and pending orders that market makers use to build their positions.

FVG – Fair Value Gap. A price area of inefficiency. Price passes through these areas quickly, indicating a complete absence of one side in the market. Subsequently, price tends to return and react to these areas to continue the main trend.

IFVG – Inverted Fair Value Gap. After returning to such an area, price does not get a reaction and impulsively breaks it, then tests it from the other side.

OB – Order block. The candle on which a market maker opened a position with the aim of taking liquidity to form their own position in the opposite direction.

The GBP/USD currency pair on Thursday followed the euro. The British pound had no independent drivers, so it showed a high correlation with its elder sibling — the euro. The pound's uptrend also ended yesterday, as price broke the critical line and trendline. Thus, a new downtrend may now begin. Is this fair from a fundamental and macroeconomic perspective? In our view, not really. Of course, if US inflation rises for August and the Federal Reserve decides to tighten policy, the dollar will have grounds to strengthen. However, the market has spent the whole summer expecting Fed tightening and has priced this decision in about five times already. Even with Fed tightening, we do not see strong reasons for the US currency to rise. If you add Donald Trump's overall policy and his desire to further accelerate inflation by giving every American $5,000, it turns out that any Fed rate hike is essentially pointless, since inflation will now grow not only because of high oil prices but also because of Trump's "helicopter money."

Technically, the pound completed the formation of the uptrend, since the trend line was breached. The dollar may continue to strengthen against its competitors, although there are currently no grounds for this. Grounds may appear today and next Wednesday, but nothing is certain.

On the 5-minute TF on Thursday, two sell trading signals were formed. First, the pair broke the Kijun-sen line, and then it bounced off it from below. Thus, traders had two opportunities to open short positions. If US inflation accelerates today, that will help the pair continue to fall.

COT report

COT reports for the pound show that non-commercial traders have dominated the market with sales for several months now. The net position is negative, despite the preservation of the uptrend in the long term. Given the events in the Middle East, it is not surprising that dollar demand was quite high in the first half of 2026. The war formally ended, but the conflict persists. Only geopolitics can support the US dollar in the near term. However, until the pair closes below the trend line, we would not count on a strong decline.

In the long run, the dollar continues to weaken due to Donald Trump's policy, which is clearly visible on the weekly timeframe. The trade war will continue in one form or another for a long time, and Trump's policy is aimed directly and indirectly at weakening the US currency. The long-term uptrend remains, as evidenced by the trend line. The price recently tested that line and bounced off it. According to the latest COT report (dated September 1), the "Non-commercial" group closed 8,200 BUY contracts and 3,100 SELL contracts. Thus, the non-commercial traders' net position decreased by 5,100 contracts over the week.

Analysis of GBP/USD 1H

On the hourly timeframe, the GBP/USD pair moved into a downtrend. In the medium and long term, the pound continues to "look" upward, so we believe that any pound rise will be logical. We still do not see strong reasons for a prolonged, sharp rise in the US currency. However, inflation data and Fed and Bank of England meetings are ahead.

For September 11 we highlight the following important levels: 1.3042-1.3050, 1.3096-1.3115, 1.3179-1.3187, 1.3301-1.3309, 1.3369-1.3377, 1.3465-1.3480, 1.3588, 1.3671-1.3681. The Senkou Span B line (1.3563) and the Kijun-sen (1.3528) can also generate signals. It is recommended to move the stop-loss to breakeven when the price moves 20 pips in the correct direction. The Ichimoku indicator lines may move during the day, which you should take into account when determining trading signals.

On Friday, the UK will publish industrial production and GDP reports for July, but we do not consider these data important. Yesterday showed that even positive news for the euro and pound is now interpreted against them. The market will most likely pay little attention to reports like industrial production. In the US today — the weekly US inflation report, which may trigger significant movement.

Trading recommendations:

Traders today may remain in short positions with targets 1.3465-1.3480 and 1.3377 based on yesterday's sell signals. Long positions can be opened in case of a bounce from the 1.3465-1.3480 area with targets 1.3528 and 1.3563. But today the pair's movements will largely depend on the US consumer price index.

Explanations for Illustrations:

Support and resistance price levels are thick red lines where movement may conclude. They are not sources of trading signals.

The Kijun-sen and Senkou Span B lines are Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extreme levels are thin red lines from which the price has previously rebounded. They are sources of trading signals.

Yellow lines indicate trend lines, trending channels, and any other technical patterns.

Indicator 1 on COT charts shows the size of the net position of each category of traders.

The EUR/USD currency pair on Thursday moved in a completely different direction than expected. We understand that the European Central Bank's decision to raise key rates was known for a long time, so the market could have priced it in in advance. But in recent weeks, the euro has not shown significant growth, while the ECB is tightening monetary policy for the second time. Thus, we believe the euro should have continued its ascent yesterday if the market had not twice disregarded the European Union's tightening of policy. Unfortunately, traders now see only the Federal Reserve and its rate hike that is expected next week. Whether it will happen or not remains an open question. Despite improvements in the US labor market, we still doubt the Fed's readiness to raise the rate. Inflation may continue to rise in the coming months, but is Kevin Warsh ready to "approve" monetary tightening? Recall that Donald Trump intends to give every US citizen $5,000 if the Republican Party wins the election. This could mean billions of dollars flooding the markets and accelerating inflation. Is there any point in fighting inflation if the US president's decisions only accelerate it?

In technical terms, the pair settled below the Ichimoku indicator lines and the trend line. Thus, a new downtrend may begin on the hourly TF. If today's inflation shows a higher reading, and the Fed decides to tighten policy next week, the dollar will receive serious support. However, traders will have to ignore other factors that speak against the dollar. This has not been a problem recently.

On the 5-minute TF on Thursday, three trading signals were formed. All — after the ECB meeting, when the market experienced a "mini-storm." Therefore, the signals were chaotic, and it is hard to call the euro's decline logical.

COT report

The latest COT report is dated September 1. The weekly TF chart clearly shows that non-commercial traders' net position turned "bearish" and significantly decreased in 2026 due to geopolitical events. Traders have been selling the euro in favor of the US dollar for the past six months. Donald Trump's policy has not changed, but the dollar acted for a while as a "reserve currency."

However, we still do not see any fundamental factors for further strengthening of the US currency. The war in the Middle East made the dollar temporarily super-attractive, but when that factor's "shelf life" expires, everything will return to normal. And the shelf life may already have expired. In the long term, the euro can fall even to 1.08$ (trend line), but the uptrend will remain relevant. During the past months of dollar strength, the pair has not moved close to that line.

The placement of the red and blue indicator lines indicates an approximate parity between bulls and bears. During the last reporting week, the number of long positions for the "Non-commercial" group increased by 4,500, while the number of shorts decreased by 6,900. Accordingly, the net position increased by 11,400 contracts.

Analysis of EUR/USD 1H

On the hourly timeframe, EUR/USD reversed lower. The ECB should have supported the euro, since it raised rates for the second time in 2026, but the market now sees only the Fed and its policy tightening. Thus, from nothing, a new trend can form, but everything will depend on US inflation and the Fed's decision.

For September 11 we highlight the following levels for trading — 1.1234, 1.1274, 1.1362-1.1368, 1.1461-1.1473, 1.1536-1.1542, 1.1585, 1.1657-1.1665, 1.1750-1.1760, 1.1786, 1.1830-1.1837, as well as the Senkou Span B line (1.1623) and the Kijun-sen (1.1623). The Ichimoku indicator lines may move during the day, so account for this when determining trading signals. Do not forget to move the stop-loss to breakeven if the price moves 15 pips in the correct direction. This will protect against possible losses if the signal turns out to be false.

On Friday, Christine Lagarde will give another speech in the European Union, and the US will publish the notorious inflation report. We expect volatility to be elevated today, but higher than its average over the past one and a half months.

Trading recommendations:

Traders today may consider short positions targeting 1.1585 if the price bounces off the Kijun-sen and Senkou Span B lines. Consolidation above these lines will allow opening long positions targeting 1.1657-1.1665. Volatility may be higher than usual today.

Explanations for Illustrations:

Support and resistance price levels are thick red lines where movement may conclude. They are not sources of trading signals.

The Kijun-sen and Senkou Span B lines are Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extreme levels are thin red lines from which the price has previously rebounded. They are sources of trading signals.

Yellow lines indicate trend lines, trending channels, and any other technical patterns.

Indicator 1 on COT charts shows the size of the net position of each category of traders.

There are relatively few macroeconomic releases scheduled for Friday, and they are unlikely to excite traders. The UK will publish monthly GDP and industrial production, and the eurozone will publish nothing. The only report that could hypothetically trigger a strong market reaction is US inflation. That report largely determines the Federal Reserve's decision next week, but if the actual figure matches the forecast, traders will have nothing to react to. A 3.4% reading for August is already priced in. Thus volatility could spike in the second half of the day, but there are no guarantees — everything depends on how surprising US inflation proves to be.

Review of fundamental events:

Another event to note on Friday is a speech by Christine Lagarde, but the European Central Bank meeting took place only yesterday, so the market has already received the necessary information. It is unlikely Lagarde will reveal today information she omitted yesterday. The ECB's stance is clear: it is prepared to continue tightening policy in response to high inflation. The question now is whether the Fed is ready to respond.

The geopolitical backdrop remains worrying. The US and Iran are not negotiating; the Strait of Hormuz remains closed or partially closed; Yemeni Houthis continue to blockade Saudi Arabia and actively attack its facilities. Donald Trump has announced an unprecedented economic operation to "destroy" Iran and threatens sanctions against countries that interact with it. So far, no one has endorsed Trump's plan to destroy Iran, and whether it will be implemented is unknown. Over the weekend, Iran and the US again exchanged strikes, which the market largely ignored.

General conclusions:

During the last trading day of the week, currency pairs may trade a bit more actively than usual. Trade the euro from the 1.1584–1.1594 area and the pound from 1.3456–1.3476. The downward correction for the euro and the pound may already be finished or close to completion, but the US inflation report could trigger either a strong dollar rally or a sharp dollar selloff.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.

Red lines indicate channels or trend lines that show the current trend and the preferred trading direction.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.

The EUR/USD pair showed slightly higher volatility on Thursday than traders had grown used to recently, but it was still not high. The market's reaction to the European Central Bank meeting was muted, as we warned yesterday. The ECB's decision was known to the market weeks in advance, so there was no real surprise. Compare the debates over the next Federal Reserve meeting with expectations for the ECB meeting — the latter was clear from the start. Thus, although we did not see a confident euro rally in recent weeks, one can say the market had already priced ECB tightening in — or at least ignored it.

When the market prices an event in advance, this is usually visible on charts and in price action. If traders were pricing Fed tightening and the dollar is rising out of the blue a week or two before the relevant decision is announced, there is no doubt the market started pricing it in. In our case, the European currency showed almost no growth, and on Thursday the market largely ignored the ECB outcome. So we conclude that traders are not paying attention to the ECB and are focused only on the Fed's policy.

If that is true, only one conclusion remains — one we have made before. Right now traders focus almost exclusively on Fed policy. The market has ignored a full-blown trade war between Canada and the US and has ignored the ECB raising key rates twice in 2026. The market is waiting for Fed tightening, and nothing will dissuade it — except the Fed itself.

So we must now wait for the Fed meeting, which may deliver surprises. If the Fed leaves rates unchanged, the market's expectation of tightening will prove unwarranted and bought the dollar. In this case, the US currency will begin a natural decline. If the Fed raises rates, the market has already priced it in. In this case, the dollar will fall.

In practice, the logic will be more complex, and even with Fed tightening, we would not necessarily expect a long-lasting dollar advance. Today's US CPI report will give traders a clue about the Fed's likely path; only a hot August inflation print will materially support the dollar. Meanwhile, from a technical standpoint, the euro has been in a correction since August 21, and that correction continues.

Average volatility of EUR/USD over the last 5 trading days as of September 11 is 38 pips — "low." We expect the pair to trade between 1.1584 and 1.1660 on Friday. The major linear-regression channel points up, indicating an uptrend. The CCI entered oversold territory, warning of a possible end to the correction.

Nearest support levels:

S1 – 1.1597

S2 – 1.1536

S3 – 1.1475

Nearest resistance levels:

R1 – 1.1658

R2 – 1.1719

R3 – 1.1780

Trading recommendations:

EUR/USD continues an uptrend on the 4-hour timeframe, which may be the start of a new leg of a global uptrend on higher timeframes. The global fundamental backdrop for the dollar remains negative overall. However, in 2026, geopolitics and the Fed's hawkish tilt provided strong support for the US currency—factors that no longer support the dollar. If price is below the moving average, consider short positions on corrective grounds with targets at 1.1597 and 1.1584. If price is above the moving average, long positions remain relevant with targets at 1.1658 and 1.1660.

Explanations for Illustrations:

Regression channels help determine the current trend. If both are directed in the same direction, it means the trend is currently strong;

The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should be conducted at present;

Murray levels are target levels for moves and corrections;

Volatility levels (red lines) are the probable price channel within which the pair will spend the next 24 hours based on current volatility indicators;

The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.

The GBP/USD pair traded calmly on Thursday. The pair saw an emotional spike after the European Central Bank announcement, but overall moves remain weak. Traders should remember that trend and momentum matter — one day or one report does not decide everything. A clear example is the recent U.S. Nonfarm Payrolls report: traders inferred inevitable Federal Reserve tightening next week from that single strong print. August Nonfarm Payrolls did show a surprisingly large number, three times consensus, but what about the annual report that was nearly 100k lower? What about the previous four reports that showed weakness in the labor market? Can one report erase five prior ones? We do not believe so. The same logic applies to volatility: in the last 30 days it exceeded 100 pips only once. So whatever volatility the pair showed yesterday or today doesn't change the overall picture—those are just two isolated days, while the rest of the time market moves are very weak.

Today the market awaits the most important report/event of the week. Although many traders expect a September hike, significant doubts remain. We would put it differently: there are big doubts, because the market today relies mostly on one strong Nonfarm print and recent comments by Kevin Warsh. Yet as noted, one payroll report does not allow long-term conclusions. Regarding Warsh's remarks: yes, he has repeatedly emphasized the need to slow inflation, but does that mean the Fed and Warsh personally are ready to vote for a September hike? Recall that several FOMC members said last week they see no grounds for tightening — inflation is slowing, and there is no rush. Therefore, our view remains unchanged: whatever August's inflation shows, the Fed will not change the key rate in September.

Still, CPI can influence market sentiment and even Fed thinking. If inflation prints above expectations, the market will become more confident in Fed tightening next week and may buy dollars in advance. If inflation falls short of forecasts, the tightening probability will drop, and the dollar will face short positions. Yet even after the inflation release, it will be very hard to answer definitively "What will the Fed do on Wednesday evening?" So today we expect another emotional spike that will ultimately change little. The pound continues to look upward, but looking is not enough — price must move to confirm it.

Average volatility of GBP/USD over the last 5 trading days is 52 pips — "low" for the pair. For Friday, September 11, we therefore expect movement within the 1.3476–1.3580 range. The major linear-regression channel has turned up, indicating an uptrend. The CCI entered oversold territory, warning of a possible end to the correction.

Nearest support levels:

S1 – 1.3489

S2 – 1.3428

S3 – 1.3367

Nearest resistance levels:

R1 – 1.3550

R2 – 1.3611

R3 – 1.3672

Trading recommendations:

GBP/USD retains an upward trend. Trump's policies will continue to pressure the U.S. economy, so we do not expect long-term dollar strength. 2026 has been dollar-positive so far due to geopolitics, but every story ends. On the weekly TF, the pair remains flat between 1.3150 and 1.3780 within a four-year uptrend, allowing for expectations of continued pound gains in the medium term. Long positions with targets at 1.3580 and 1.3611 can be considered when price is above the moving average. Price below the moving average allows short positions with targets at 1.3495 and 1.3476.

Explanations for Illustrations:

Regression channels help determine the current trend. If both are directed in the same direction, it means the trend is currently strong;

The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should be conducted at present;

Murray levels are target levels for moves and corrections;

Volatility levels (red lines) are the probable price channel within which the pair will spend the next 24 hours based on current volatility indicators;

The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.

1H chart of the GBP/USD pair

GBP/USD moved on Thursday in the same direction as EUR/USD. Although the European Central Bank meeting had no direct relation to the pound, the high correlation with the euro caused the pound to fall as well. We cannot say the decline was fully justified. Even though the ECB decision was predictable, it should not be dismissed. Traders also overlooked the ECB's readiness to continue tightening monetary policy. Unfortunately, the market remains focused entirely on the Fed and its policy, firmly believing in a September rate hike. We still doubt that decision, though we concede a hike could occur amid elevated inflation and an improving labor market. The US consumer-price index, to be published today, can help make a final judgment. If inflation prints above forecasts, it will further increase the odds of Fed tightening and support the US dollar. However, we should not forget the Warsh factor — he is unlikely to be eager to tighten.

5M chart of the GBP/USD pair

On the 5-minute TF on Thursday, no trading signals were generated. Despite moderately decent intraday moves, price failed to reach or work out any important levels or zones.

How to trade on Friday:

On the hourly TF, GBP/USD continues a downward corrective trend that may end soon. In our view, sterling should keep rising in the medium term under most scenarios, but for now it remains in correction. On the weekly TF, the move from the lower boundary of the sideways channel toward the upper boundary continues and may not yet be complete. Thus we expect a resumption of the northbound impulse.

On Friday, novice traders may consider short positions targeting 1.3380–1.3386 if price closes below 1.3456–1.3476. Long positions can be opened targeting 1.3587–1.3598 in case of a bounce from 1.3456–1.3476.

On the 5-minute TF, you can trade the levels 1.3259–1.3267, 1.3319–1.3331, 1.3380–1.3386, 1.3456–1.3476, 1.3587–1.3598, 1.3631–1.3641, 1.3695, 1.3741. On Friday, the UK will publish GDP and industrial-production data, but the market may calmly ignore these reports. In the US, the event of the week — the August inflation report — will be released and could strongly affect the Federal Reserve's decision next week.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.

Red lines indicate channels or trend lines that show the current trend and the preferred trading direction.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.