Looking at recent price action, gold continued the rally that began at Wednesday's weekly low. That move bottomed near the 61.8% retracement of the advance from the end of July—a target sitting at $4230.70. The low for the week reached $4234.00, coming within just $3.30 of that key support floor.

The subsequent move higher off that level carried price back above a dense cluster of technical levels:

• 200-hour moving average: $4347.83

• 100-day moving average: $4330.94

• 50% retracement: $4319.75

• 100-hour moving average: $4318.24

That support band between $4318.24 and $4347.83 now serves as the interim barometer for both sides: stay above and buyers retain control; move below and the bias shifts back to the sellers.

In today's trading, gold based against that cluster and pushed higher to reach an intraday peak of $4400.00. That high came within $8.80 of the next key resistance target—the broken 38.2% retracement at $4408.80—which also aligns with the swing high going back to September 11. Price has since backed off that peak, trading near $4355 after finding interim support at $4351.00, just above the 200-hour moving average at $4347.83.

The immediate technical story hinges on whether buyers can continue to hold this cluster of moving averages, or if sellers will force a break back below to tilt momentum down toward the $4230.70 extreme.

The Current Decision Area

Gold is testing a tightly packed support confluence:

• 200-hour moving average: $4347.83

• 100-day moving average: $4330.94

• 50% retracement (July low to peak): $4319.75

• 100-hour moving average: $4318.24

This zone sits directly above Wednesday's low at $4234.00 and the major 61.8% retracement target at $4230.70, which connects with the August 10 swing low.

What Buyers Must Do

To maintain control, buyers need to defend the 200-hour moving average at $4347.83 as their primary line of support. Holding above this level keeps the technical bias tilted to the upside, keeping the 38.2% retracement at $4408.80 firmly in sight as the primary upside target.

What Sellers Must Do

Sellers need to break below the 200-hour moving average at $4347.83 to neutralize the immediate bullish momentum.

A break below $4347.83 puts the lower edge of the cluster at the 100-hour moving average ($4318.24) to the test. Pushing below $4318.24 and staying below would formally shift the bias back to the downside, opening the door for a drop toward the swing area support at $4282.23, followed by the 61.8% retracement level at $4230.70.

Trading Education Lesson: Confluence and Risk Definition

When multiple technical indicators line up near the same price zone—such as moving averages from different timeframes combining with a Fibonacci retracement level—it creates a confluence area.

Confluence areas matter because:

1. They attract attention from a broader group of market participants (e.g., traders watching hourly charts versus those watching daily charts).

2. They give traders a clear level where risk can be defined and limited.

If buyers defend a support confluence zone, the risk-to-reward ratio for a long position becomes clearly defined: the trade idea remains valid as long as price stays above the zone, and is invalidated if price moves below and stays below.

The U.S. dollar is mostly higher as North American traders enter for the day. The Australian dollar is the lone major currency trading higher against the greenback, while the Japanese yen is by far the weakest.

The dollar changes against the major currencies at 7:45 AM ET show:

• EUR: USD higher by 0.01%
• JPY: USD higher by 1.21%
• GBP: USD higher by 0.08%
• CHF: USD higher by 0.12%
• CAD: USD higher by 0.17%
• AUD: USD lower by 0.18%
• NZD: USD higher by 0.40%

The largest move is in USDJPY, which has surged toward the 158.00 area following the Bank of Japan’s rate decision.

BOJ raises rates, but the guidance disappoints yen buyers

The Bank of Japan raised its policy rate by 25 basis points to 1.25%, its highest level since 1995. On the surface, that is a hawkish move. However, the increase was widely expected, meaning the market was more interested in what the BOJ would say about the path forward.

Governor Kazuo Ueda did not give yen buyers the clear signal they wanted. Future decisions remain dependent on inflation and economic developments, and he stopped short of indicating that another increase was likely at the next meeting.

The 7–2 vote also showed some internal resistance. Two policymakers opposed the move because of concerns about economic growth, adding uncertainty about the timing and pace of future tightening.

This is a classic example of the market trading expectations rather than simply reacting to the headline. The BOJ raised rates, but that move was already priced in. Yen buyers needed guidance pointing toward another hike relatively soon. When they did not get it, yen-long positions were unwound and USDJPY moved sharply higher.

The interest-rate differential also remains firmly in favor of the U.S. dollar. Japan’s policy rate is now 1.25%, but U.S. rates remain substantially higher and the Federal Reserve delivered a more hawkish policy outlook this week.

The bottom line is that the BOJ was hawkish in action, but not hawkish enough in its guidance. Yen buyers had their shot, but the central bank did not give them enough ammunition to extend the move.

USDJPY approaches its next key technical targets

USDJPY has moved up to test the swing area near 158.04. That area has repeatedly influenced price action going back to late July and is the first key hurdle for buyers.

The next major target is the 200-day moving average at 158.41. That moving average is a longer-term technical barometer and will be an important test of whether buyers can extend the post-BOJ rally.

• Stay below 158.04–158.41, and sellers may attempt to slow the rally.
• Move above 158.41 and stay above, and the technical bias becomes more bullish, with the next target near 159.57.
• Initial support comes near the 61.8% retracement at 157.53.
• A move back below that level would take some of the momentum away from buyers and refocus attention on 156.57.

The sharp move toward 158.00 will also increase the risk of verbal intervention from Japanese officials. The risk of direct intervention would rise if the yen’s decline became too fast or disorderly.

U.S. stock futures point higher

U.S. stock futures are implying another positive opening following yesterday’s gains saw the Nasdaq lead the way with a gain of 1.69%. The S&P rose 1.14% and the Dow advanced by 0.61% yesterday. The futures are implying:

• Dow industrial average futures: +7 points
• S&P 500 futures: +13.50 points
• Nasdaq 100 futures: +94 points

U.S. Treasury yields move higher

Treasury yields are higher across the curve:

• 2-year: 4.7219%, +3.2 basis points
• 5-year: 4.8342%, +3.3 basis points
• 10-year: 4.9694%, +2.2 basis points
• 30-year: 5.2985%, +0.3 basis point

The rise in yields is helping support the dollar, particularly against the lower-yielding Japanese yen.

Oil retreats below $100 as supply fears ease

WTI crude oil is down more than 5% and has moved back below the $100 level to around $96.14.

Middle East tensions remain elevated, but the market is becoming less concerned about an immediate and prolonged disruption to Saudi oil supplies. Expectations that Saudi Arabia will restore capacity on its East-West pipeline, combined with reports of additional Saudi barrels being moved through alternative routes, have taken some of the geopolitical risk premium out of crude.

Higher refined-product inventories and rising Chinese fuel exports are also contributing to the decline. The geopolitical risks have not disappeared, but for now the market is trading the expectation that more supply will continue reaching global buyers. Reuters

This is another reminder that bullish headlines do not always produce higher prices. The price action shows how the market is interpreting the news. When supply concerns fail to push oil higher, traders holding long positions may head for the exits and accelerate the move lower.

Other markets

Gold and silver are holding onto gains despite the stronger dollar and higher yields:

• Gold: $4,376.59, +0.84%
• Silver: $66.894, +2.63%
• Bitcoin: $77,983, +2.13%

ECB President Christine Lagarde said interest rates do not move in lockstep with energy prices and stressed that other factors also influence policy. She described uncertainty as dominating the economic outlook and reiterated that the ECB remains well positioned to respond on a meeting-by-meeting basis.

The decline extended to approximately 0.7078, where two key technical levels came together:

• The rising 100-day moving average at 0.70795
• The 50% retracement of the move up from the end-of-July low at 0.70773

When different technical tools identify nearly the same price, that area tends to attract more attention from traders. Some traders may focus on the moving average, while others may be watching the retracement level. When both point toward the same area, it can create a stronger support or resistance target.

In this case, the combination did a good job of slowing the decline. Sellers had their shot following the FOMC decision, but they could not sustain the momentum below the support cluster. Once the downside momentum faded, sellers started to cover their positions and buyers returned.

That helped turn the price back to the upside.

Fundamental forces are also helping the Australian dollar

The rebound is not being driven by the technical picture alone.

US Treasury yields are moving lower today, reducing some of the support for the US dollar. At the same time, commodity prices—including gold and silver—are moving sharply higher.

The Australian dollar is often sensitive to movements in commodities because Australia is a major commodity-producing and exporting country. Stronger commodity prices can improve the outlook for Australian export revenues and support demand for the Australian dollar.

That relationship is not perfect from day to day, but when lower US yields, a softer US dollar and stronger commodities all move in the same direction, they can provide a supportive backdrop for the AUDUSD.

The fundamental story gave buyers a reason to push higher. The technical support near 0.7077–0.7080 gave them a defined area from which to act.

Why the 100-day moving average matters

The 100-day moving average is watched by longer-term traders and investors as a measure of the broader trend.

When the price is above a rising 100-day moving average, buyers generally have more control from a longer-term perspective. When the price falls below that moving average and stays below it, the bias begins to shift more in favor of sellers.

The key is not simply whether the price trades briefly above or below the moving average. Markets can move through technical levels temporarily—especially following a major event such as an FOMC decision.

What matters is whether the price can stay below the level and build momentum.

Yesterday, sellers pushed AUDUSD into the 100-day moving average, but they could not extend the decline. The failure to sustain a break gave buyers the opportunity to take back control.

Buyers improve the short-term picture

The rebound gained momentum after AUDUSD moved back above 0.70908 and then 0.71017.

Those breaks were important because they showed that the move higher was more than just a small bounce from support. Buyers were able to take back successive technical levels and force short-term sellers to reassess their positions.

The 0.71017 level is now an important interim barometer for traders.

Staying above that level keeps the short-term bias tilted more toward the buyers and allows the corrective move higher to continue. If the price moves back below 0.71017, the rebound would begin to lose some momentum.

Below that level, 0.70908 would become the next downside target. A break below both levels would shift the market’s attention back toward the major support cluster between 0.70773 and 0.70795.

The next resistance area will be the real test

Although buyers have regained some short-term control, they still have more work to do.

The next major resistance comes between approximately 0.71168 and 0.71270.

That zone includes several technical levels:

• The 38.2% retracement at 0.71168
• A prior swing area extending toward 0.71270
• The falling 100-hour moving average near 0.71271

The 100-hour moving average has been moving lower following the recent decline. That makes it a shorter-term trend-defining level and a natural target for buyers.

A falling moving average often attracts sellers on the first test because traders who missed the original move lower may use the rebound as an opportunity to enter. Traders who bought near the lows may also take some profits as the price approaches resistance.

That does not mean the price cannot move above the moving average. It means buyers will need to prove they can get above the level—and stay above it—before gaining greater technical control.

What would make the picture more bullish?

A sustained move above the 0.71168–0.71270 resistance area would be the next bullish signal.

Such a break would take the price above the 38.2% retracement, above the prior swing area and above the falling 100-hour moving average. Clearing all three hurdles would give buyers more control and increase the potential for a deeper recovery.

Until that happens, the rebound remains constructive but incomplete.

The buyers successfully defended the longer-term support near the 100-day moving average. They have also reclaimed several shorter-term levels. The next step is proving that they can extend the move through the resistance clustered near 0.71168–0.71270.

What would weaken the rebound?

If AUDUSD cannot get through the resistance area and falls back below 0.71017, some of the bullish momentum would fade.

A move below 0.70908 would add to the downside pressure and put the major support near 0.70773–0.70795 back in play.

That area remains the most important downside barometer. As long as the price stays above it, buyers can argue that the broader move higher remains intact. A sustained break below the 100-day moving average and the 50% retracement would be a more bearish development and would return greater control to sellers.

The trading lesson

The price action offers a good example of why traders should define technical levels before volatility increases.

The FOMC decision provided the catalyst for the decline, but the technical levels identified where the selling momentum might slow. Traders did not have to guess where buyers could return. The 100-day moving average and the 50% retracement created a clearly defined support area.

As I explain in my book Attacking Currency Trends, moving averages and retracement levels can help traders define the bias, control risk and identify the levels that would confirm—or invalidate—a trading idea.

In this case, sellers had their shot at the longer-term support area but could not keep the price below it. Buyers responded and pushed the price back above short-term resistance.

Now the burden shifts to the buyers. They need to keep the price above 0.71017 and ultimately break through the 0.71168–0.71270 resistance area to increase their control.

Before the decision, the price was trading between the 200-bar moving average on the four-hour chart at 1.3888 and the 100-day moving average at 1.3939. The post-FOMC move carried the pair above the 100-day moving average, the 38.2% retracement at 1.3931 and the swing area between 1.3948 and 1.3966.

That swing area is now the first key support. Former resistance becomes support after a break, and staying above 1.3948 to 1.3966 would keep the buyers in control.

What buyers need to do

Buyers now need to get above and stay above the next resistance area between 1.3990 and 1.4003. The 50% retracement of the decline from the June high is also in that area at 1.39915.

The combination of the swing area, the retracement level and the natural 1.4000 level makes this an important decision zone.

If buyers can extend above 1.4003 and stay above it, the next upside targets become:

• The 61.8% retracement at 1.4052.

• The higher swing area between 1.4117 and 1.4149.

What sellers need to do

Sellers leaned against the 50% retracement and the 1.3990 to 1.4003 swing area on the initial test. That gives traders a level where risk can be defined and limited.

To take back more control, sellers first need to push the price below the 1.3948 to 1.3966 support area. A break below that zone would weaken the bullish momentum and put the 38.2% retracement at 1.3931 and the 100-day moving average at 1.3939 back in play.

A move below those levels would open the door toward the four-hour 200-bar moving average at 1.3888. That moving average helped define the lower side of the pre-FOMC range.

Trading education: Former resistance becomes support

When price breaks above a resistance area, that same area often becomes support on a pullback. The break is the first step. Staying above the old resistance confirms that buyers are retaining control.

In this USDCAD setup, the 1.3948 to 1.3966 swing area was resistance. After the move above it, traders can now use the same zone to judge whether the breakout is holding or failing.

As I explain in my book Attacking Currency Trends, traders should define the bias and then identify the level that would change that bias. Above the support area, the buyers remain more in control. Move back below it, and the bullish breakout starts to lose its grip.

Technical roadmap

• Bullish: Stay above 1.3948 to 1.3966 and break above 1.4003. That would open the door toward 1.4052, followed by 1.4117 to 1.4149.

• Bearish: Move below 1.3948 and then back below the 1.3931 to 1.3939 support cluster. That would weaken the breakout and shift the focus toward 1.3888.

• Near-term battle: Buyers have more control, but they still need to get above and stay above the 1.3990 to 1.4003 resistance area.

The price action at those levels will provide the next clue.

The U.S. dollar is mixed. It is trading lower against the EUR, JPY, AUD and NZD, but higher against the GBP, CHF and CAD. The New Zealand dollar is the strongest of the major currencies, while the British pound is the weakest following the Bank of England’s decision to leave interest rates unchanged.

It is the day after the Federal Reserve raised rates by 25 basis points for the first time since July 2023. Stocks are rebounding, Treasury yields are moving lower and crude oil is retreating toward the key $100 level.

In the morning video above, I take a look at the three major currency pairs—EURUSD, USDJPY and GBPUSD—from a technical perspective. For each pair, I outline the bias, the risk-defining levels and the targets that would give either the buyers or sellers more control.

The U.S. dollar is mixed

The dollar enters the North American session with no unified direction:

• Weaker versus the EUR, JPY, AUD and NZD
• Stronger versus the GBP, CHF and CAD
• The NZD is the strongest major currency
• The GBP is the weakest major currency

The mixed price action reflects a market balancing Wednesday’s Fed rate hike against today’s Bank of England decision, lower Treasury yields, falling oil prices and a strong rebound in U.S. stock futures.

Fed raises rates for the first time since July 2023

The Federal Reserve raised its target range by 25 basis points to 3.75%–4.00% on Wednesday. It was the Fed’s first rate increase since July 2023.

The decision was unanimous, but the updated projections indicated that policymakers may not be finished. The median projection for the federal funds rate at the end of 2026 moved up to 4.125%, implying the potential for another 25-basis-point increase before year-end.

The message from the Fed was that inflation remains too high and policymakers are willing to tighten further if needed. The next move will depend on inflation, employment and the broader economic data.

Bank of England leaves rates unchanged

There were no major surprises from the Bank of England. The central bank left its Bank Rate unchanged at 3.75% by a 6–3 vote.

• Six members voted to leave rates unchanged.
• Three members preferred a 25-basis-point increase to 4.00%.

Governor Andrew Bailey said policy “may have to tighten” if the Middle East conflict “persists for an extended period, as appears likely,” particularly if the risk of second-round inflation effects increases.

That keeps the BOE on a potential pathway toward a November rate increase if energy prices remain elevated and begin feeding more broadly into wages, consumer prices and inflation expectations.

Coming into the decision, markets were pricing approximately a 76% probability that the BOE would remain on hold. The pound moved lower following the announcement as some positioning for a more hawkish outcome was unwound.

The BOE did not raise rates today, but it clearly left the door open for a future increase.

U.S. stock futures rebound

U.S. stock futures are sharply higher as equities recover some of Wednesday’s post-Fed losses:

• Dow industrial average futures: +473 points
• S&P 500 futures: +70.19 points
• Nasdaq 100 futures: sharply higher

The combination of lower Treasury yields and falling oil prices is giving equities some breathing room despite the Fed signaling that additional tightening may be needed.

The rebound is encouraging for the buyers, but it follows a sharp decline after Wednesday’s decision. The next question is whether the early gains can be sustained after the opening bell or whether sellers use the rebound as an opportunity to reenter.

Treasury yields retreat

U.S. Treasury yields are lower across the curve:

• 2-year yield: 4.7174%, down 1.0 basis point
• 5-year yield: 4.8336%, down 2.1 basis points
• 10-year yield: 4.9733%, down 3.1 basis points
• 30-year yield: 5.3199%, down 2.8 basis points

The 10-year yield has moved back below the psychologically important 5.00% level. The larger declines farther out the yield curve suggest some relief following the recent bond-market selloff.

Lower yields are helping support stock futures and precious metals. Nevertheless, yields remain elevated, and the Fed has left the door open for another rate increase if inflation does not move convincingly lower.

Crude oil retreats toward $100

Crude oil is trading at $100.59, down $1.84 or 1.80%.

The decline comes as concerns about an immediate Saudi supply disruption ease. Saudi Arabia is redirecting some shipments, while expectations that portions of the damaged East-West pipeline could return more quickly than initially feared are taking some of the geopolitical premium out of oil. Reuters

That does not mean the Middle East risk has disappeared. The Saudi pipeline, the Red Sea, Bab el-Mandeb and the Strait of Hormuz remain potential pressure points for global energy supplies.

For traders, $100 remains an important short-term barometer. Staying above $100 would keep crude oil elevated and inflation concerns alive. A sustained break below would suggest that more of the geopolitical risk premium is coming out of the price.

Gold, silver and copper move higher

Precious and industrial metals are moving higher:

• Gold: $4,325.68, up $61.15 or 1.43%
• Silver: $64.138, up $1.173 or 1.86%
• Copper: $6.6020, up $0.0930 or 1.43%

Gold’s rebound is notable because it comes one day after the Fed raised interest rates. Higher rates can be a headwind for gold because the metal does not pay interest. Today, however, declining Treasury yields and a mixed U.S. dollar are providing support.

Silver is outperforming gold, while copper’s gain adds to the more positive tone across risk assets.

Bitcoin remains contained

Bitcoin is little changed at $76,200, up $62 or 0.08%.

Despite the strong rebound in stock futures and the decline in Treasury yields, Bitcoin has not shown the same upside momentum. That relative underperformance suggests cryptocurrency buyers remain cautious following the Fed’s more hawkish policy signal.

North American economic calendar

The North American calendar is busy at 8:30 AM ET, led by U.S. housing data, weekly jobless claims and the Philadelphia Fed manufacturing survey.

8:30 AM ET

• Building permits: 1.410 million expected versus 1.443 million prior
• Housing starts: 1.309 million expected versus 1.239 million prior
• Initial jobless claims: 208,000 expected versus 206,000 prior
• Continuing claims: 1.780 million expected versus 1.774 million prior
• Philadelphia Fed index: 30.5 expected versus 47.4 prior

The housing numbers will show how elevated mortgage rates are affecting construction. Jobless claims will provide another reading on labor-market conditions, while the Philly Fed prices-paid component will be watched for signs of continuing inflation pressure.

Canada will also release producer-price data. Industrial product prices previously rose 0.6% month over month, while raw-material prices fell 2.2%.

North American economic calendar

The North American calendar is busiest at 8:30 AM ET, with U.S. housing, jobless claims and Philadelphia Fed data joined by Canadian producer prices.

8:30 AM ET

• Building permits: 1.410M expected versus 1.443M prior
• Housing starts: 1.309M expected versus 1.239M prior
• Initial jobless claims: 208K expected versus 206K prior
• Continuing claims: 1.780M expected versus 1.774M prior
• Philadelphia Fed index: 30.5 expected versus 47.4 prior
• Canada producer prices: +0.6% month over month prior
• Canada raw-material prices: −2.2% month over month prior

The housing figures will provide another indication of how elevated mortgage rates are affecting construction. Jobless claims remain important for assessing the strength of the labor market, while the Philadelphia Fed’s prices-paid component will offer another look at manufacturing inflation.

10:00 AM ET

• Pending home sales: −0.6% expected versus −2.3% prior

Pending home sales track signed contracts and tend to lead completed existing-home sales by one or two months

The US dollar moved sharply higher following the FOMC decision, but the move has now reached the next important technical test across several major currency pairs.

EURUSD and GBPUSD moved lower, while USDJPY and USDCAD advanced. The direction is clear, but traders should not assume the initial move will continue indefinitely. Each pair is now trading near a level or zone that will help determine whether dollar buyers retain control.

EURUSD tests a key support area

EURUSD moved sharply lower and is testing an important support area between 1.1471 and 1.1482.

That zone includes:

• The 61.8% retracement at 1.14719
• A swing area between 1.14715 and 1.14821

This is a key decision area for buyers and sellers.

Buyers can lean against the zone, but they need to push the price back above the 1.1499 to 1.1511 swing area. The 50% retracement at 1.15175 would be the next target above that zone.

If EURUSD moves below 1.1471 and stays below, sellers would take more control. The next downside targets would come near 1.14492, followed by 1.14352.

For now, the sellers have the stronger short-term bias, but the support zone is giving buyers a place where risk can be defined and limited.

USDJPY holds above its breakout area

USDJPY moved higher and broke above the swing area between 155.04 and 155.21. The pair is also trading above the 38.2% retracement at 155.748.

That gives buyers the short-term advantage, but staying above 155.748 is now important.

If buyers can hold above that retracement, the next upside target is the four-hour 100-bar moving average near 156.565.

If the price falls back below 155.748, the 155.04 to 155.21 area becomes the key risk zone. A move back below that area would weaken the bullish breakout and give sellers more confidence.

Buyers are taking more control, but they still need to prove they can stay above the broken levels.

GBPUSD sellers take more control

GBPUSD moved below its 100-day and 200-day moving averages, shifting the technical bias more firmly to the downside.

The important resistance levels are now:

• 100-day moving average: 1.34407
• 200-day moving average: 1.34557
• 38.2% retracement: 1.34704

It would take a move back above that cluster to give buyers greater control.

On the downside, the price is testing a swing area between 1.33947 and 1.34161. The price has moved below that zone, increasing the downside focus toward the 61.8% retracement at 1.33445 and the lower swing area between 1.33210 and 1.33407.

Sellers are in control below the daily moving averages. Buyers would need to reclaim those levels to change the technical story.

USDCAD stalls ahead of 1.4000

USDCAD moved higher after the FOMC but stalled near a confluence area around 1.3990 to 1.4000.

That resistance includes:

• A swing level at 1.39901
• The 50% retracement at 1.39915
• The natural resistance at 1.4000

The combination makes this a more important ceiling.

Buyers need to get above 1.4000 and stay above it to confirm the next bullish leg. A successful break would shift the focus toward 1.40557.

On the downside, the initial risk area is between 1.39480 and 1.39663. Below that area, the 100-day moving average at 1.39308 would become the next target.

The USDCAD remains supported, but buyers have more work to do. The 1.3990 to 1.4000 area is the technical hurdle that must be cleared.

Trading education: The initial move is only the first clue

In my book Attacking Currency Trends, I emphasize that moving through a level is only the first step. Staying beyond that level confirms that buyers or sellers are retaining control.

That lesson is especially important after a major event such as an FOMC decision. Price can move quickly through several levels as liquidity shifts and positions are adjusted. The better technical clue often comes from what happens after the initial volatility settles.

A level is a line. A zone is a battle.

If price moves through a technical area and stays through it, that supports continuation. If the price quickly returns through the area, the failed break can signal rejection and a potential reversal.

The technical roadmap

The dollar has the short-term momentum, but the next move will depend on confirmation:

• EURUSD: A sustained move below 1.1471 strengthens the bearish bias. A recovery above 1.1511 would give buyers some breathing room.
• USDJPY: Holding above 155.748 keeps buyers in control. A move back below 155.04 would weaken the breakout.
• GBPUSD: Sellers remain in control below 1.34407 to 1.34704. The next downside focus is 1.33445.
• USDCAD: Buyers need to break and stay above 1.4000. A move below 1.39480 would weaken the bullish push.

The post-FOMC move favored the dollar. Now the price action at these technical levels will provide the next clue.

That leaves the pair caught between support and resistance as traders prepare for the FOMC rate decision. The Fed decision will likely determine the next directional push, but the technical levels give traders a roadmap for judging whether buyers or sellers are taking control.

Sellers tested support but could not stay below

The downside move carried the AUDUSD into a swing area between 0.7117 and 0.71324. The four-hour 200-bar moving average is also in that area, adding to its technical importance.

The price briefly moved below the swing area and the moving average, but sellers could not sustain the momentum. The price has since moved back into the support zone.

That failure to stay below is important. Sellers had their shot, but they still need a move below 0.7117 and the four-hour 200-bar moving average, followed by the ability to stay below, to increase the bearish bias.

If that happens, the downside targets would be:

• 0.70950, the 38.2% retracement of the move up from the late-June low
• 0.70789, the 100-day moving average

Those levels would become the next decision areas for buyers and sellers.

What buyers need to do

Holding the current support zone gives buyers something to work with, but they have more to prove.

The first upside target is 0.71492. That level acted as support late last week and then became resistance early this week before the price moved lower.

A move above 0.71492, followed by the ability to stay above it, would give buyers more control. The next targets would then become the four-hour 100-bar moving average and the underside of the broken trendline.

Trading education: A break is not enough

One of the lessons from this setup is the difference between breaking a technical level and confirming the break.

AUDUSD moved below the swing area and the four-hour 200-bar moving average, but it could not stay below. That lack of follow-through weakened the bearish signal.

In my book Attacking Currency Trends, I emphasize that moving through a level is only the first step. Staying through the level is what gives traders greater confidence that control is shifting. It also gives traders a level where risk can be defined and limited.

The roadmap ahead of the FOMC

The technical roadmap is straightforward:

• Above 0.71492, buyers begin to take more control and can look toward the four-hour 100-bar moving average and the broken trendline.
• Between 0.7117 and 0.71492, the pair remains in a decision area where neither side has confirmed full control.
• Below 0.7117, with the price staying below, sellers gain more control and bring 0.70950 and 0.70789 into focus.

The FOMC decision may provide the catalyst, but the price action around these levels will provide the next clue.

The confluence area is defined by the 38.2% retracement of the 2026 trading range at 1.39308 and the 100-day moving average at 1.39350. With those two levels separated by only about four pips, the zone takes on added technical importance.

The high reached 1.39432, taking the price above both levels. That gives buyers a short-term victory, but the break still needs to hold. The area between 1.39308 and 1.39350 is now the immediate risk-defining support zone. If the break fails, it would be a disappointment for the buyers. Recall going back to September 2, the price also moved above the 100 day MA but stalled at a topside trend line and moved back lower.   Getting and staying above both the 100 day and the 38.2% represent a key break.  

What buyers need to do

Buyers now need to stay above the 100-day moving average at 1.39350 and the 38.2% retracement at 1.39308. Holding the cluster would give buyers more control and open the door toward:

• 1.3948 to 1.39663, the next resistance level defined by swing highs and swing lows going back to the end of March 2026

• 1.39901 to 1.40031, including the 50% retracement at 1.39915

• 1.40557, near the 61.8% retracement at 1.40522

Those are targets, but they are also potential decision areas where sellers may try to lean with risk defined and limited.

What sellers need to do

Sellers need to push the price back below the 100-day moving average at 1.39350 and then below the 38.2% retracement at 1.39308. A move below both levels would show that the breakout has failed, and would shift the bias to more neutral in the short term after the failed break. 

A move back below that level would shift the focus toward the 200-bar moving average on the 4-hour chart at 1.38892. That level was broken earlier this week and then tested and based before moving back to the upside. Traders are paying attention.  Below that, the next downside targets are the 100-bar moving average on the 4-hour chart at 1.38543 and the 200-day moving average at 1.38330.

Trading education: The break is only the first step

In my book Attacking Currency Trends, I stress that moving through a technical level is only part of the process. The price also needs to stay beyond that level to confirm that buyers or sellers are retaining control.

For USDCAD, the move above both 1.39308 and 1.39350 gave buyers a short-term victory. Staying above the two levels would provide stronger confirmation. If the price falls back below both, the failed break would give sellers more confidence.

The roadmap is straightforward: stay above 1.39350 and 1.39308 and the buyers remain in control, with 1.39663 as the next target. Move back below both levels and the bullish picture weakens. The price action will provide the next clue.

The USD is trading higher versus:

• EUR: +0.04%
• GBP: +0.11%
• CAD: +0.11%

The USD is trading lower versus:

• JPY: −0.04%
• CHF: −0.02%
• AUD: −0.06%
• NZD: −0.07%

The changes are modest across the board. The USD has gained the most against the GBP and CAD, while it has fallen the most against the NZD. Nevertheless, there is no strong dollar trend heading into the North American session.

In the Kickstart video, I take a technical look at the three major currency pairs—EURUSD, USDJPY and GBPUSD. For each pair, I outline the bias, the risk-defining levels and the targets that would give either the buyers or sellers more control.

The Fed decision is the BIG EVENT today

A 25-basis-point rate increase is expected, which would lift the federal funds target range to 3.75%–4.00%.

The Treasury market has already done some of the tightening for the Fed. The 2-year yield is up to 4.629%, while the 10-year yield has traded above and below the key 5.00% level this week. That is a pretty significant move in market rates.

With inflation remaining sticky and the labor market continuing to show resilience, members of the Federal Open Market Committee have ample reason to raise rates. Theoretically, higher rates should help slow inflation. The risk is that they can also slow growth and hiring.

The expected hike would also go against President Donald Trump’s preference for lower rates to help stimulate the economy.

However, since the quarter-point increase is largely priced in, the rate decision itself may not be where the bigger market reaction comes from. Traders will instead focus on the updated economic projections and what Fed Chair Kevin Warsh has to say at his press conference.

The Fed will release updated projections for:

• GDP growth
• Inflation
• Unemployment
• The federal funds rate

The June projections put the federal funds rate at 3.80% at the end of 2026. The new projection today, will determine whether officials expect that to be a 'one and done" insurance hike, or whether another increase may be needed before year-end. There are two more meetings before the end of the year.  

Do not expect Kevin to provide a detailed road map for future policy. He has long been against giving markets extensive forward guidance. That may leave traders to draw their own conclusions from his comments, the policy statement and the updated projections.

For traders, it will not only be about what the Fed does. It will be about how the markets react.

As always, the price action and the technical tools applied to that price action will help tell the story.

U.S. Treasury yields are lower with the 10 year back below 5%

Treasury yields are modestly lower ahead of the decision, but they remain at elevated levels:

• 2-year: 4.629%, down 3.4 basis points
• 5-year: 4.795%, down 3.1 basis points
• 10-year: 4.971%, down 2.5 basis points
• 30-year: 5.346%, down 1.7 basis points

The 2-year yield is especially sensitive to expectations for Fed policy. If Kevin emphasizes sticky inflation and leaves the door open for additional tightening, the 2-year yield could move higher.

The 10-year yield is also important after trading above and below 5.00% this week. Staying above 5.00% would keep the pressure on borrowers, businesses and equity valuations. Moving back below that level would provide some relief, but it would take more downside momentum to reverse the recent rise in longer-term yields.

Middle East tensions remain high, but oil is lower

Middle East risks remain elevated following attacks on Saudi energy infrastructure and renewed threats from the Iran-backed Houthis.

Saudi Arabia said it intercepted a Houthi drone approaching restricted airspace around Mecca, calling the incident a “red line.” The Houthis denied targeting the holy city but have threatened further attacks. The escalation has increased concerns about the Yanbu oil terminal, the East-West pipeline and shipping through the Red Sea and Bab el-Mandeb.

Some supply concerns have eased. Saudi Arabia is reportedly offering additional crude shipments through Oman’s Sohar port, while regional oil flows have been more resilient than feared. Unexpected increases in U.S. crude and fuel inventories are also helping pressure oil prices. Reuters

WTI crude is trading at $103.37, down $2.46 or 2.32%. Despite the decline, oil remains above $100, and the geopolitical risk has not disappeared.

The trading lesson is that bullish headlines do not guarantee higher prices. Some risk may already be priced in, and oil can decline when supplies are rerouted or immediate disruption fears ease. The price action is the final judge.

U.S. stock futures point higher

U.S. stock futures are trading higher ahead of the opening bell, with all three major indices showing solid gains:

• Dow futures: +211 points
• S&P 500 futures: +36 points
• Nasdaq 100 futures: +205 points

The Nasdaq is leading the advance as buyers return to technology shares, while the broader gains in the Dow and S&P point to a generally positive risk tone.

Commodities and Bitcoin

Gold and silver are both higher despite the modest decline in Treasury yields and the mixed USD.

• WTI crude: $103.37, down $2.46 or 2.32%
• Gold: $4,350.94, up $57.77 or 1.35%
• Silver: $64.82, up $1.16 or 1.82%
• Bitcoin: $75,955, up $378 or 0.50%

Gold is benefiting from continued geopolitical uncertainty and some dip buying as Treasury yields ease ahead of the Fed. However, the reaction after the Fed will be important.

A more hawkish Fed, higher yields and a stronger USD would normally create headwinds for gold. A less hawkish Fed, lower yields and a weaker USD would be more supportive.

Bitcoin is modestly higher but remains below $76,000. Like the other markets, its next directional move may depend on the reaction in the USD, yields and overall risk sentiment following the Fed announcement.

Why today’s combination matters

The Fed is dealing with a difficult combination:

• Inflation remains sticky.
• The labor market remains resilient.
• Oil is still above $100.
• The 10-year yield is near 5%.
• Geopolitical risks remain elevated.

Higher oil prices can feed into headline inflation and inflation expectations. Higher Treasury yields increase borrowing costs even before the Fed makes its decision. Together, those dynamics give policymakers a reason to remain cautious about declaring victory over inflation.

The quarter-point hike may be largely priced in, but the market’s reaction is not.

That is why the updated projections, Kevin’s comments and—most importantly—the subsequent price action will be the focus for traders today.

Economic data ahead of the Fed

Before the Fed takes center stage this afternoon, traders will have several economic releases to work through. The main focus at 8:30 AM ET will be U.S. retail sales and import prices.

Retail sales will provide a fresh look at the strength of the consumer, while import prices may offer additional clues on inflation pressures. Stronger-than-expected figures—especially for the retail sales control group—could reinforce expectations that the Fed will remain restrictive.

8:30 AM ET

• Import prices MoM: +0.4% expected versus −0.4% previously
• Import prices YoY: No forecast shown; +6.0% previously
• Export prices MoM: +0.5% expected versus −1.3% previously
• Retail sales MoM: +0.8% expected versus −0.6% previously
• Retail sales excluding autos: +0.5% expected versus −0.3% previously
• Retail sales excluding gas and autos: No forecast shown; −0.2% previously
• Retail control group: +0.4% expected versus −0.4% previously
• Retail sales YoY: No forecast shown; +5.01% previously
• Canada building permits MoM: −6.4% expected versus +18.5% previously

10:00 AM ET

• U.S. business inventories: +0.3% expected versus 0.0% previously
• Retail inventories excluding autos: No forecast shown; +0.7% previously
• NAHB Housing Market Index: 34 expected versus 35 previously

The retail control group will be especially important. It excludes several volatile categories and feeds more directly into the consumer-spending calculation used in GDP. A stronger figure would point to a resilient consumer, while a weaker number would raise additional questions about economic growth.

Still, any reaction to the morning data may be limited or short-lived. The Fed decision, updated economic projections and Kevin Warsh’s press conference remain the BIG EVENT today.

Positng this in light of the fresh news for ether:

• Staking and ETFs drain ether from exchanges, price impact unproven

Ether has spent since early February capped below the $2,470-2,480 area, the same level marked by the horizontal line on the chart. That range held as a ceiling through eight months of chop before price finally cleared it in early September, pushing into the $2,500s and briefly $2,660s. The move since then has been a retreat back toward that same zone, with ETH now trading around $2,400-2,410, essentially sitting on the underside of the level it broke out from.

That lines up with the exchange-supply story already in the market. A shrinking pool of ether on exchanges, alongside record staking (about 36% of supply) and steady ETF inflows, is the kind of backdrop that reduces available sell-side supply over time. But as the reporting itself notes, exchange-outflow data has preceded both rallies and extended weak stretches before, so it works better as context for why a reclaim might hold than as a signal that guarantees it will.

There is also unfinished business higher up. The sharp late-January decline left a stack of unfilled gaps roughly between $2,470 and $2,980 that price has never revisited. That zone remains a magnet of sorts; markets often gravitate back toward unfilled imbalance eventually, which is one reason a sustained hold above the current $2,470 area would matter more than it might otherwise.

What to watch next

A weekly or multi-day close back above $2,470-2,480 would treat this as a successful retest of former resistance turned support, keeping the door open toward the unfilled gap zone above. Repeated closes back below that level would suggest the September breakout is failing to hold, putting ETH back into the prior eight-month range.

Educational takeaway

Old resistance becoming new support is a meaningful structural signal, but only once it's actually tested and held. A single breakout candle proves less than a level surviving a pullback.

Technical levels and indicators provide reference points, not guarantees. Market conditions can change quickly, particularly during periods of high volatility. Trade or invest at your own risk and use risk controls appropriate to your circumstances.

The price today moved up to test the 38.2% retracement of the decline from the June high at 1.39292. Just above that level is the 100-day moving average at 1.3932.

With the two levels separated by less than three pips, they formed a clearly defined resistance cluster and an important battleground between buyers and sellers.On the test today, the sellers leaned against the level and the price has rotated lower.  

The successful test, increased the levels importance going forard.   For buyers, getting above the 38.2% retracement would be a positive step. However, they must also extend above the 100-day moving average at 1.3932—and stay above it—to take more control.

A move above a technical level is not enough by itself. Staying above it is what confirms the breakout and gives buyers greater confidence.

If buyers can clear both levels, the next target would be the swing area between 1.3948 and 1.39687.

A break above the swing area would open the door toward:

• 1.39901: The 50% retracement

• 1.4000–1.4004: Natural and technical resistance

• 1.40510: The 61.8% retracement

For sellers, the combination of the 38.2% retracement and the 100-day moving average provided a clearly defined area where they can lean and limit their risk. The price rotated lower and currently trades at 1.3920

On the downside, the sellers would still need to generate downside momentum. A move back below 1.39013 would begin to weaken the bullish run and give sellers more short-term control.

The rising 100-hour moving average at 1.38612 would then become the next important downside target.

Below that, the 200-hour moving average and 200-day moving average, both near 1.3832, form another significant support area. Staying above those moving averages would keep the broader technical structure tilted more to the upside. A break below both would shift the bias more decisively in the sellers’ favor.

The trading lesson

When two unrelated technical tools converge within a few pips of one another, the area becomes more important.

In this case, the 38.2% retracement at 1.39292 and the 100-day moving average at 1.3932 create a resistance cluster. Buyers must get above both levels and stay above them to confirm the next bullish step.

The technical roadmap is straightforward:

• Above 1.3932: Buyers gain more control.

• Above 1.39687: The bullish bias strengthens further.

• Back below 1.39292: The attempted breakout begins to fail.

• Below 1.39013: Sellers take back more short-term control.

• Below the 100-hour moving average: The technical picture becomes more bearish.

The buyers have pushed the price into a major resistance area. Can they break through and stay above it, or will sellers lean against the cluster and force the price back down? The price action around 1.39292–1.3932 will provide the next clue.

The gains come as Treasury yields move higher, crude oil remains above $102 and US stock futures trade modestly lower.

All of this comes ahead of tomorrow’s Federal Reserve rate decision. The Fed is widely expected to raise rates by 25 basis points, lifting the target range to 3.75%–4.00%. It would be the first Fed rate increase since July 2023.

The decision will be released at 2:00 PM ET on Wednesday, followed by Fed Chair Kevin Warsh’s press conference at 2:30 PM ET. The meeting will also include updated economic projections and a new dot plot. Traders will be looking beyond the expected hike for clues about whether this represents a one-time adjustment or the start of a broader tightening cycle.

In the morning video above, I take a look at the three major currency pairs—EURUSD, USDJPY and GBPUSD—from a technical perspective. What levels are in play? What would increase the bullish or bearish bias? Where should buyers and sellers enter—and where should they get out if the price action does not go their way?

The USD is higher

The percentage changes of the USD versus the major currencies show:

• JPY: USD +0.29%
• NZD: USD +0.21%
• CAD: USD +0.12%
• AUD: USD +0.11%
• CHF: USD +0.10%
• GBP: USD +0.08%
• EUR: USD +0.06%

The USD is the strongest currency overall, while the JPY is the weakest of the major currencies.

For clarification, USDJPY, USDCHF and USDCAD are quoted with the dollar as the base currency. When those pairs rise, the dollar is strengthening.

EURUSD, GBPUSD, AUDUSD and NZDUSD have the foreign currency as the base currency. When those pairs fall, the dollar is strengthening.

US stocks are modestly lower in premarket trading

As of 7:45 AM ET, US futures are implying:

• Dow Industrial Average: −93.20 points
• S&P 500: −3.00 points
• Nasdaq 100: −9.41 points

The declines are relatively modest after Monday’s heavier selling in AI, semiconductor and other mega-cap technology shares.

The move in the 10-year Treasury yield above 5% remains a concern for growth stocks. Higher yields increase the discount rate applied to future earnings, which can put additional pressure on companies trading at elevated valuations.

Middle East tensions remain supportive for oil

Middle East risks remain elevated as Iran-backed Houthi forces continue their offensive in Yemen and increase pressure on Saudi Arabia and regional shipping routes.

The Houthis launched another wave of missiles and drones against Saudi Arabia, including an attack targeting a military airbase at Khamis Mushait. Saudi officials said 13 civilians were injured.

The group is also consolidating positions along Yemen’s western coast after capturing Perim Island near the Bab el-Mandeb Strait. The strategic location sits at the entrance to the Red Sea and is important for oil and commercial shipping moving between the Indian Ocean and the Suez Canal.

The developments are particularly significant because Saudi Arabia’s East-West pipeline remains largely offline following last week’s attack. The pipeline normally allows Saudi crude to bypass the partially disrupted Strait of Hormuz and move to export terminals on the Red Sea.

Meanwhile, Gulf states postponed planned talks with Iran over reopening the Strait of Hormuz. There is currently no new timetable for those discussions. Although tanker-tracking data show some signs of traffic recovering, oil and gas flows remain well below normal levels.

The combination of restricted shipping through the Strait of Hormuz, growing threats near Bab el-Mandeb and damage to Saudi export infrastructure continues to keep a geopolitical risk premium in oil prices.

WTI crude is trading at $102.24, up $0.85 or 0.84%.

China’s economy remains uneven

China’s latest economic data showed a continued divide between stronger industrial production and weak domestic demand. Industrial production rose 5.2% year over year, beating the 4.8% estimate and accelerating from 4.5% previously. However, retail sales increased only 0.4%, below the 0.7% estimate and the prior 0.6% gain. Fixed-asset investment contracted 7.2% year to date, compared with a 6.7% decline previously, while the unemployment rate rose to 5.3% from 5.2%. New-home prices also fell 0.17% during the month after declining 0.18% previously. The numbers show that manufacturing—particularly technology and advanced production—is holding up better, but consumers, property and investment remain significant drags on the Chinese economy.

Chinese President Xi Jinping is scheduled to travel to Washington on September 24 for a summit with President Trump. Trade, technology restrictions, agricultural purchases and broader geopolitical tensions are expected to be among the major topics. Xi is also preparing to bring a large delegation of Chinese business executives with him.

European data was mixed

UK labor data showed a larger increase in jobless claims, although the unemployment rate unexpectedly declined:

• UK claimant count change: +27,800 versus +8,300 previously
• UK average earnings: +3.9%, unchanged from the prior reading
• UK unemployment rate: 4.9% versus 5.0% previously
• German wholesale prices: +0.9% month over month versus +0.1% previously
• French final CPI: +0.7%, unchanged from the preliminary estimate
• Italian trade surplus: €8.24 billion versus €4.77 billion previously
• Eurozone trade surplus: €5.0 billion versus €3.7 billion previously
• German ZEW economic sentiment: 34.7 versus 39.8 previously
• Eurozone ZEW economic sentiment: 25.8 versus 39.2 previously

The German and Eurozone ZEW readings point to a deterioration in investor confidence, likely reflecting higher energy prices, rising yields and continued geopolitical uncertainty.

European stocks are mostly lower

• Germany’s DAX: −0.08%
• France’s CAC: −0.27%
• UK’s FTSE 100: −0.36%
• Spain’s Ibex: +0.03%
• Italy’s FTSE MIB: −0.01%

US Treasury yields are higher

The yield curve is moving higher, with the largest increases at the longer end:

• 2-year yield: 4.652%, +1.8 basis points
• 5-year yield: 4.754%, +2.6 basis points
• 10-year yield: 5.004%, +4.3 basis points
• 30-year yield: 5.374%, +4.6 basis points

The 10-year yield is back above the psychologically important 5.00% level. That is helping support the dollar while creating another potential headwind for stocks.

The steeper move at the long end also suggests that traders are concerned about the longer-term inflation outlook, particularly with oil prices remaining above $100.

Other markets

• Crude oil: $102.24, +$0.85 or +0.84%
• Gold: $4,283.10, −$14.70 or −0.34%
• Silver: $63.21, −$0.01 or −0.02%
• Copper: $6.4110, +0.10%
• Bitcoin: $76,895, −$1,290 or −1.65%

Gold is moving lower as both the dollar and Treasury yields rise. That is the more traditional relationship: a stronger dollar and higher yields make non-interest-bearing gold less attractive at the margin.

Bitcoin is also under pressure and is the weakest of the major markets shown above.

Today’s US economic calendar

• 8:15 AM ET: ADP weekly employment pulse
• 8:30 AM ET: New York Fed manufacturing index
• 8:30 AM ET: Wholesale trade
• 8:55 AM ET: Redbook weekly retail sales
• 1:00 PM ET: US 20-year bond auction

The New York Fed manufacturing index is expected at 15.0, down from 20.6 previously.

The 20-year bond auction will also be closely watched after the 10-year yield moved above 5%. A weak auction could put additional upward pressure on longer-term yields.

However, the main event remains tomorrow’s Federal Reserve decision. A 25-basis-point increase is largely expected. The bigger market reaction will likely depend on the dot plot, the updated projections and whether Kevin Warsh signals that additional rate increases are likely in the months ahead. The decision and statement are scheduled for 2:00 PM ET, with the press conference at 2:30 PM ET

What the XAUUSD chart is showing

Gold's pullback from its August high has come straight back down to retest the level that launched the rally in the first place. I've marked two support shelves on the chart: a broader base near $4,000 that held for roughly six weeks through late June and July, and a tighter launch pad around $4,250 to $4,270 that price broke out from in mid-August before running to a high of $4,696.76 on August 25.

The retest of that launch pad is the key development right now. The low print on September 14 came in at $4,253.58, right into that zone, and the session closed back above it at $4,298.80. That is a support-resistance flip being tested in real time: the level that fuelled the breakout is now being asked to hold on the way back down, and so far it has.

The descending trendline drawn off the August high adds the other half of the picture. It has capped every attempted bounce during the pullback, and price is now trading right against it.

What to watch next

A daily close above the downtrend line, alongside price holding above $4,250, would strengthen the case that this pullback is stabilizing rather than continuing. A break of $4,250 that fails to hold would put the $4,000 base back in play as the next area worth watching.

Educational takeaway

A level that triggers a breakout often becomes the first place buyers look to defend on the way back down. Watching whether an old breakout zone holds on retest is one of the simplest ways to judge whether a pullback is corrective or something more serious.

Risk note

Technical levels and indicators provide reference points, not guarantees. Market conditions can change quickly, particularly during periods of high volatility. Trade or invest at your own risk and use risk controls appropriate to your circumstances.

NZDUSD: Sellers fail to hold the breakdown

The NZDUSD sellers had their shot below the lower trendline and the swing area between 0.5761 and 0.5777, but they could not keep the price below those levels. The failed break triggered a quick rebound, with the pair moving back toward 0.5785.

The recovery is encouraging for buyers, but they still have work to do. The underside of the broken trendline is now close resistance near 0.5791. Above that, the 50% retracement at 0.5806 and the falling 100-hour moving average near 0.5822 would become the next upside targets.

This is a good example of why a break alone is not enough. Sellers needed to break support and stay below it. They failed, forcing some shorts to cover. However, buyers must now reclaim the broken trendline to show they can take back more control.

Stay below 0.5791, and sellers retain the short-term advantage. Move above it and stay above it, and the failed breakdown becomes more meaningful. A renewed move below 0.5777, followed by 0.5761–0.5764, would put sellers firmly back in control.

AUDUSD: Buyers respond after another failed break

The AUDUSD also gave sellers their shot. The price broke below the 38.2% retracement at 0.71168, but momentum faded after comments from President Trump and as oil prices moved off their highs. The USD was sold, helping the AUDUSD rebound sharply.

The recovery has taken the price back above the swing area between 0.71208 and 0.71285, as well as the swing level near 0.71398. Those levels now become the close risk area for buyers. Staying above them would keep the rebound alive and give buyers greater confidence.

On the topside, resistance comes in near 0.71718. A move above that area would strengthen the bullish bias and open the door toward the falling hourly moving averages.

For buyers, the key is to build on the failed downside break by staying above 0.71398 for the best case scenario. For more conservative traders who are bullish the pair, the 38.2% retracement at 0.71168 needs to stay broken.  A break below the 38.2% retracement at 0.71168 would be needed to put sellers more firmly back in control.

The lesson from both pairs is the same: breaking a level gets traders’ attention, but staying through that level confirms control. In both the NZDUSD and AUDUSD, sellers made the break but could not sustain it. Now it is up to the buyers to prove that the reversals can develop into something more.

In the morning video, I outlined the falling 200-hour moving average at 154.90 and the swing area between 155.04 and 155.21 as upside resistance targets that should attract willing sellers.

The price subsequently moved into that resistance cluster, reached 155.21, and stalled. Sellers leaned against the area and pushed USDJPY back below the 200-hour moving average. The price is now trading near 154.39.

The technical message is straightforward: the resistance area did its job. Buyers made a play, but they could not establish a foothold above the 200-hour moving average and swing area. That keeps the sellers more in control.

Going forward, it would take a move back above 154.90, followed by a sustained break above 155.04–155.21, to give buyers greater control. Until then, rallies can continue to attract sellers.

On the downside, the rising 100-hour moving average at 153.88 is the next important target. A break below that level would strengthen the bearish bias and increase the potential for another move toward the recent low at 152.93.

What can you learn from the price action and the techncals tools applied to the price action?

The trade highlights the value of technical confluence. A single technical level can attract attention, but when a moving average and a swing area are located in the same region, the area becomes more significant. Different traders may be watching different tools, but they are all being drawn toward approximately the same price.

It also shows why traders should think of support and resistance as an area rather than one exact price. USDJPY moved slightly above the 200-hour moving average before finding sellers within the broader 155.04–155.21 swing area. That did not invalidate the resistance. What mattered was whether buyers could break through the entire cluster and stay above it. They could not.

For traders leaning against that resistance, the area also provided a clear way to define risk. If the price had moved above 155.21 and remained above it, the bearish trade idea would have been wrong—or at least premature. Good technical levels should help traders define not only where to enter, but also where they are wrong.

The final lesson is that reaching a target is not the same as breaking it. Buyers successfully extended into the resistance target, but they failed to establish control above it. When buyers have their shot and miss, sellers often become more confident.

Saudi Arabia’s East-West pipeline could remain largely out of service for three to five weeks following last week’s drone attack. The pipeline has become increasingly important because it allows Saudi Arabia to bypass the partially disrupted Strait of Hormuz.

Meanwhile, the Iran-backed Houthis continue to expand their control along Yemen’s Red Sea coast, increasing the threat to shipping through the Bab el-Mandeb Strait. Talks aimed at easing restrictions through the Strait of Hormuz have also been postponed.

The combination of reduced Saudi export flexibility, threats to two critical shipping routes and the risk of a broader military response should keep a geopolitical risk premium in oil prices.

Fundamental picture is bullish. So is the technical picture

Technically, crude oil corrected lower on Friday after surging from its August 26 low near $80.00 to a high of $104.21. After a move of more than $24 in a relatively short period, the market may have simply been due for a pause as traders took profits.

The correction on Friday, moved below the 61.8% retracement at $99.70, but buyers stepped back in around the natural support at $100.00. That makes the area between $99.70 and $100.00 the closest risk-defining zone for buyers looking for more upside.

Stay above that area and the buyers remain in firm control. Move below it, and traders would look toward the rising 100-hour moving average, currently near $98.27, as the next important support target. That moving average will continue to move higher. Until then, the buyers are in full control.  

On the topside, the sky is the limit - especially if fundamentals continue to deteriorate (no one knows so take it as it is).  The next key target is the May 18 swing high at $105.21. Today’s high has reached $104.95, putting the price within striking distance of that level. Crude is currently trading at $104.02 as of 9:21 AM ET.

What are some targets?  A sustained move above $105.21 would strengthen the bullish technical picture and open the door toward:

• $107.46 — May 4 swing high
• $110.93 — April 30 swing high

The fundamental backdrop remains supportive, while the technical bias remains bullish. However, buyers must continue to defend the $99.70–$100.00 area. Stay above and the buyers remain in control. Break below, and the rising 100-hour moving average becomes the next key test.

In the video above, I take a closer look at the technical picture for crude oil and outline the key levels that will determine whether buyers can maintain control—or whether the recent run higher is due for a deeper correction.

The new trading week begins with the USD higher against all the major currencies. US stock futures are lower, led by declines in technology and AI-related shares. Crude oil is sharply higher as Saudi Arabia faces growing threats from the Iran-backed Houthis, while US Treasury yields are little changed.

The Federal Reserve highlights a busy week for central banks. The Fed announces its decision on Wednesday, followed by the Bank of England and Bank of Japan on Thursday.

USD starts the week higher

The greenback has its largest gains against the NZD, JPY and AUD. The changes of the USD versus the major currencies show:

• NZD: USD up 0.69%
• JPY: USD up 0.63%
• AUD: USD up 0.52%
• EUR: USD up 0.45%
• GBP: USD up 0.21%
• CAD: USD up 0.13%
• CHF: USD up 0.11%

The USD is benefiting from safe-haven flows, rising oil prices and expectations that the Federal Reserve will raise interest rates this week.

The low-to-high ranges compared with the average true range over the last 21 trading days show:

• EURUSD: The range is 63 pips compared with an average true range of 46 pips. That represents approximately 137% of its average range. EURUSD has already exceeded what would be considered a normal trading range.
• GBPUSD: The range is 55 pips, equal to its 55-pip average true range. GBPUSD has completed a normal full-day range.
• USDJPY: The range is 137 pips compared with an average true range of 121 pips. That represents approximately 113% of its average range. USDJPY has already exceeded its normal range.
• USDCHF: The range is 39 pips compared with an average true range of 53 pips. The pair has completed approximately 74% of its average range, leaving some room to roam if USD buying continues.
• USDCAD: The range is only 37 pips compared with an average true range of 62 pips. The pair has completed approximately 60% of its average range, leaving it with the greatest room to roam among the major currency pairs.
• AUDUSD: The range is 42 pips compared with an average true range of 43 pips. AUDUSD has completed nearly all of its normal range.
• NZDUSD: The range is 52 pips compared with an average true range of 47 pips. That represents approximately 111% of its average range. NZDUSD has already exceeded its normal range.

Overall, USDCAD has the greatest room to roam, having completed only around 60% of its average range. USDCHF, at approximately 74%, also has room for additional movement.

By comparison, EURUSD, USDJPY and NZDUSD have already completed or exceeded their average ranges. GBPUSD and AUDUSD have also completed nearly 100% of their typical ranges. Although those pairs can extend further, they do not have the same range-based room to roam as USDCAD and USDCHF.

The average true range is not a ceiling. A currency pair can continue beyond its normal range, especially when geopolitical headlines and central-bank expectations increase volatility. However, traders should recognize when a move has already become extended and manage their risk accordingly.

AI concerns weigh on US stock futures

At 8:00 AM ET, US stock futures are pointing to a sharply lower opening, led by the technology-heavy Nasdaq:

• Dow Industrial Average: Down 133.29 points
• S&P 500: Down 37.23 points
• Nasdaq Composite: Down 423 points

Technology and semiconductor shares are under pressure after prominent AI executives called for slowing the development of advanced AI models because of growing safety concerns.

Anthropic CEO Dario Amodei called for greater caution, while OpenAI CEO Sam Altman and Elon Musk also expressed concerns about the speed of AI development.

For investors, the worry is that increased scrutiny could lead to tighter regulation, development delays and a cooling of the enormous AI capital-spending boom that has supported technology shares.

Nvidia is lower in premarket trading, while Intel, AMD, Marvell and other semiconductor companies are also under significant pressure.

The AI news is having its greatest effect on the Nasdaq. However, rising oil prices, inflation concerns and expectations for a Federal Reserve rate increase are also weighing on the broader equity market.

Saudi Arabia’s troubles with the Houthis send oil higher

WTI crude oil is trading at $102.65, up $2.60 or 2.60%.

The Iran-backed Houthis have expanded their control in Yemen, capturing the port of Mocha and strategically important Perim Island near the entrance to the Bab al-Mandeb Strait.

That increases the threat to one of the world’s most important routes for commercial shipping and energy supplies.

Saudi Arabia is also dealing with the shutdown of its East-West oil pipeline following a drone attack reportedly launched from Iraq. The pipeline allows Saudi Arabia to transport oil from its eastern producing region to export facilities on the Red Sea, bypassing the Strait of Hormuz.

The pipeline has become especially important because of disruptions around Hormuz.

Saudi Arabia does not want to be pulled back into another prolonged war in Yemen, but its options are becoming increasingly limited. Riyadh can retaliate and risk a broader regional conflict, or continue exercising restraint while the Houthis expand their territorial control and threaten Saudi infrastructure.

For the oil market, the concern is that two critical energy corridors—the Strait of Hormuz and Bab al-Mandeb—could face disruptions at the same time.

There is also uncertainty about how quickly Saudi Arabia can reopen the East-West pipeline. The longer it remains closed, the greater the potential effect on Saudi exports and global oil supplies.

Higher oil prices create another problem for central banks. A renewed energy shock can lift headline inflation, increase transportation and production costs, and eventually work its way into broader consumer prices.

Fed, BOE and BOJ decisions highlight the week

The Federal Reserve announces its interest-rate decision on Wednesday.

The market expects the Fed to raise its target rate by 25 basis points to 4.00% from 3.75%. Traders will also receive updated economic projections, the FOMC statement and the Fed chair’s press conference.

The press conference and economic projections will be important because markets will want to know whether the expected increase is a one-time adjustment or the beginning of a broader tightening cycle.

The Bank of England announces its decision on Thursday. The BOE is expected to leave its official bank rate unchanged at 3.75%, with the focus turning to the vote and guidance about future policy.

The Bank of Japan also meets on Thursday. Traders will be watching for a potential policy adjustment of 0.25% higher, and signals about the future path of Japanese interest rates.

ECB officials remain focused on inflation

The comments come after the European Central Bank raised interest rates last week.

ECB Governing Council member Yannis Stournaras said timely ECB action could reduce the risk that much larger rate increases are required later, which would cause more economic pain.

ECB Executive Board member Isabel Schnabel said the recent rise in oil prices is “quite worrying.”

Those comments highlight the dilemma facing global central banks. Policymakers want to avoid overtightening and unnecessarily weakening economic growth. However, rising energy prices increase the risk that inflation remains elevated and interest rates stay higher for longer.

US Treasury yields are little changed

US Treasury yields are little changed as traders await the Federal Reserve decision:

• 2-year yield:4.6408%, down approximately 0.3 basis points
• 5-year yield:4.7968%, up approximately 0.6 basis points
• 10-year yield:4.9731%, down approximately 0.2 basis points
• 30-year yield:5.3522%, down approximately 0.2 basis points

The limited movement suggests the bond market is waiting for Wednesday’s Fed decision, updated projections and guidance about what may come next.

Other markets

• WTI crude oil: $102.65, up 2.60%
• Gold: $4,296.24, down 1.18%
• Silver: $63.04, down 2.21%
• Copper: $6.4250, down 1.88%
• Bitcoin: $77,845, up 1.35%

Today’s economic calendar

Canada’s inflation report is the main economic release during the North American session:

• Canada CPI month over month is expected at −0.1%, down from +0.5% previously.
• Canada median CPI year over year is expected at 2.0%, unchanged from the previous month.
• Canada trimmed CPI year over year is expected at 1.9%, unchanged from the previous month.

Later in the week, traders will receive UK employment and inflation data before the central-bank decisions take center stage.

In the morning video above, I take a look at the three major currency pairs—EURUSD, USDJPY and GBPUSD—from a technical perspective. I outline the key levels in play, explain which side has control, and identify what buyers and sellers must do to increase the bullish or bearish bias as the new trading week gets underway.

The new trading week begins with several significant forces affecting the markets simultaneously: a likely Federal Reserve rate increase, an AI-led technology selloff, rising oil prices and escalating Middle East risks.

Those themes should keep volatility elevated. The fundamental headlines may provide the catalyst, but the technical levels will tell traders whether the buyers or sellers are maintaining contro

At today’s low, the pair found willing buyers near its 200-day moving average at 1.38323 and the 200-hour moving average at 1.38258. When two technically important moving averages sit near one another, the area becomes more significant. Buyers can lean against that cluster because it provides a clearly defined level where they can measure and limit risk.

The rebound took the price back above the 50% midpoint of the 2026 trading range at 1.38663 and briefly through the nearby swing area between 1.38669 and 1.38770. However, the upside momentum stalled against the downward-sloping trendline connecting the July, late-July, early-August and early-September highs.

That trendline has now attracted sellers on five separate tests. The repeated failures confirm that it remains an important ceiling—and it sets up the technical battle heading into next week.

For buyers, getting above the trendline and staying above it would be the first requirement if they are to take more control. They would also need to hold above the 50% retracement at 1.38663. Accomplishing both would increase the bullish bias and put the 100-day moving average at 1.39271 in play as the next major target.

For sellers, holding the trendline and pushing the price back below the 50% retracement would keep the broader downside bias intact. The 200-day moving average at 1.38323 and the 200-hour moving average at 1.38258 would then become the key downside targets. A break below both would weaken the buyers’ position and open the door toward the rising 100-hour moving average at 1.38096, followed by the lower support area between 1.37655 and 1.37780.

The technical roadmap for next week is clearly defined. The falling trendline is the ceiling, while the 200-day and 200-hour moving averages form the support floor. Traders do not have to guess. Let the price action at those boundaries tell you which side is taking control.

Fundamentally speaking?

Fundamentally, the move higher in USDCAD was supported by renewed U.S. dollar strength after the latest inflation data increased expectations that the Federal Reserve could raise interest rates. Higher U.S. rate expectations tend to support the dollar because they can make dollar-denominated assets more attractive to global investors. Meanwhile, the Canadian dollar lagged despite elevated oil prices, which would normally provide some support because Canada is a major energy exporter.

In addition, trade tensions are also weighing on the Canadian dollar. The escalating dispute between the United States and Canada—including new U.S. tariffs and Canadian retaliatory measures—creates uncertainty for Canadian exports, business investment and economic growth. Since Canada is highly dependent on trade with the United States, that uncertainty can make investors less willing to hold Canadian dollars. When combined with rising expectations for a Federal Reserve rate hike, the fundamental bias helped push USDCAD higher, even as elevated oil prices offered the loonie some support.

The month-to-month CPI came in at 0.4% with the year on year 3.4% the core rose by 0.3% above the 0.2% expectations but the year on year was unchanged at 2.4% from prior month. The super core month-to-month CPI came in it  0.51% which was well above the 0.1% last month. The year on year rose to 3.01% from 2.83%.

“Supercore CPI” is an informal measure of underlying inflation that focuses on services prices excluding housing costs.

It generally removes:

• Food
• Energy
• Goods
• Housing or shelter

That leaves services such as healthcare, transportation, insurance, recreation, education, and personal care.

Why is it important? Many of these services are labor-intensive, so their prices can reflect wage pressures. If supercore inflation remains elevated, it suggests inflation is becoming embedded in the service economy and may be difficult for the Federal Reserve to bring down.

It is worth noting that supercore is not an official, universally standardized CPI category. Analysts may calculate it differently. The Fed often pays closer attention to the similar core PCE services excluding housing measure.

In simple terms: Supercore inflation tries to identify the part of inflation that may be the most persistent—the inflation that does not disappear quickly when energy prices fall or supply chains improve.

The US dollar moved higher after the report, but is retracing the declines.

GBPUSD: The GBPUSD has moved down to test the 50% midpoint of the last trend move higher from the end of July low (July 28). That level comes in at 1.34732. The level was also near lows from last week and going back to August 13. The price has bounced off that level and is currently trading back above 1.3500 level on the successful test. Resistance remains at the 200 hour moving average at 1.35246 and the 100 hour moving average at 1.35360.

USDJPY: The USDJPY moved higher off the news but has since reversed to new lows for the day. The price is now back below the 100 hour MA (it stalled at that level on the move lower prior to the report today).   Moving below the level is a bearish tilt.

EURUSD: The EURUSD moved below the swing area target at 1.15849, and briefly below the 38.2% retracement of the move up from the July 28 low at 1.15738. The price has since moved back higher and above the tree release levels and currently trades around 1.1600 level. There is still a cluster of resistance above including the 200 hour moving average at 1.1613, the 100 hour moving average at 1.1623 in the 200 day moving average at 1.16316.

Looking at the US futures are now showing stronger levels with the Dow up over 500 points and the Nasdaq up over 300 points. .  

• S&P is up 70 points
• Dow industrial average is up 517point
• NASDAQ is up 340 points

U.S. Treasury yields are mixed, with the curve flattening as short-term yields rise and longer-term yields decline:

• 2-year: 4.5767%, up 2.7 basis points
• 5-year: 4.7262%, down 0.7 basis points
• 10-year: 4.924%, down 2.0 basis points
• 30-year: 5.3328%, down 2.8 basis points

The key takeaway is that selling pressure is concentrated at the short end, while buyers are moving into longer-dated Treasuries. The 10-year yield remains elevated near 5%, while the 30-year yield is still above 5.30%.

The reactions are somewhat surprising and may have caught traders off guard. 

Markets are volatile.  Know your levels and listen to the market . 

The largest moves are against the commodity currencies, with the NZD up 0.45% and the AUD up 0.27% versus the dollar. The USD is also down 0.29% versus the JPY. Conversely, the dollar is up 0.34% versus the CHF and 0.20% versus the CAD. The EUR and GBP are only modestly lower.

The ranges for the three major currency pairs remain relatively contained ahead of the US CPI report:

• EURUSD: 1.1592, with a range of 1.1591 to 1.1617

• USDJPY: 153.97, with a range of 153.92 to 154.61

• GBPUSD: 1.3506, with a range of 1.3496 to 1.3526

In the Kickstart video, I take a technical look at the EURUSD, USDJPY and GBPUSD and outline the key levels that would give buyers or sellers more control following the CPI report.

US CPI takes center stage

The August US CPI report will be released at 8:30 AM ET. Expectations are for:

• Headline CPI MoM: +0.4% versus +0.1% previously
• Headline CPI YoY: +3.4% versus +3.4% previously
• Core CPI MoM: +0.2% versus +0.2% previously
• Core CPI YoY: +2.4% versus +2.5% previously

The headline monthly number is expected to accelerate sharply to 0.4%, largely reflecting the rise in energy prices. However, energy prices can be volatile. As a result, traders will also focus closely on core inflation, which excludes food and energy.

The core reading can provide a better indication of whether inflation is becoming embedded in the broader economy. Within the report, shelter costs and service-sector inflation will be watched closely. If those categories remain elevated, the Federal Reserve may have a more difficult time becoming comfortable that inflation is moving sustainably toward its 2% target.

Yesterday’s PPI report came in close to expectations on a monthly basis, but the year-over-year numbers remained elevated. That puts even more focus on today’s CPI data. Another firm inflation report could reinforce the idea that the Fed needs to maintain a tighter policy stance—or potentially consider another rate increase.

For traders, the first reaction will likely be seen in Treasury yields. A hotter-than-expected report would normally push yields and the US dollar higher while putting pressure on stocks. A softer report would likely take some pressure off yields, weaken the dollar and provide additional support for equities.

There can be some nuance, however. A stronger headline number driven almost entirely by energy may not generate the same reaction as a broad increase in core prices. The market will look beyond the headline and examine the details before deciding whether the initial move is justified.

US yields remain elevated

Treasury yields are mostly higher, led by the shorter end of the curve, following yesterday’s sharp run to the upside:

• 2-year yield: 4.570%, +2.0 basis points
• 5-year yield: 4.744%, +1.1 basis points
• 10-year yield: 4.951%, +0.7 basis points
• 30-year yield: 5.358%, −0.3 basis points

The shorter end of the yield curve is more sensitive to expectations for Federal Reserve policy. Therefore, the larger gains in the 2-year and 5-year yields suggest that traders remain concerned about the possibility that inflation will keep the Fed tighter for longer.

The 10-year yield remains just below the psychologically important 5.00% level. Round numbers often attract additional attention because they can serve as natural decision points for traders. A sustained move above 5.00% could create another headwind for stocks and increase support for the dollar. Conversely, a move away from that level following a softer CPI report could provide some relief across markets.

Higher yields can help the dollar because they increase the potential return on dollar-denominated assets. However, if yields rise too quickly, they can also hurt risk sentiment and create more volatile—and sometimes conflicting—moves across the currency market.

US stocks attempt to rebound

US stock futures are pointing to a higher opening after four consecutive days of declines. A snapshot of the major index projections currently shows:

• Dow industrial average: +260 points
• S&P index: +40 points
• Nasdaq index: +176 points

The rebound is encouraging for buyers, but it comes before the CPI report. Consequently, the futures gains remain vulnerable to a change in inflation and interest-rate expectations.

Higher yields increase the discount rate used to value future corporate earnings. That can be particularly challenging for technology and other growth companies, where a greater portion of the expected value is based on profits further into the future. That helps explain why the Nasdaq can be especially sensitive to sharp moves in Treasury yields.

A softer CPI report could allow buyers to build on the rebound. A hotter report, combined with a move in the 10-year yield above 5.00%, could quickly put the broader indices back under pressure. After four consecutive days of declines, both buyers and sellers will be looking for confirmation from the price action after the data.

Middle East tensions remain a major market risk

Middle East developments continue to center on oil supplies and the security of key shipping routes. Iran-backed Houthi forces have reportedly advanced near the Bab el-Mandeb Strait, while attacks on Saudi energy infrastructure have disrupted production and exports. The IEA said Saudi crude supply fell sharply in August and warned that delays in restoring normal Gulf flows could widen the global supply shortfall.

The Bab el-Mandeb Strait is important because it connects the Red Sea with the Gulf of Aden and serves as a major route for energy shipments and global trade. Any disruption can force vessels to take longer and more expensive routes, increasing transportation costs and delaying deliveries.

There is some hope that diplomatic discussions between Iran and Gulf countries could ease tensions surrounding the Strait of Hormuz. That prospect, combined with profit-taking following the recent surge, is helping oil prices retreat today.

October crude oil futures are down $2.80, or 2.72%, at $99.71. The price has moved back below the $100 level after reaching a high of $104.46 yesterday.

The decline provides some relief, but one day of lower prices does not eliminate the underlying supply risks. Any new attack on production facilities, pipelines or shipping lanes could quickly reverse the move. Conversely, signs of meaningful diplomatic progress could remove some of the geopolitical risk premium that has been built into oil prices.

Oil is also important for the inflation outlook. Higher crude prices eventually feed into gasoline, transportation and production costs. Those increases can then spread through the economy as businesses attempt to pass their higher costs on to consumers. That connection between oil and inflation is one reason the Middle East news, CPI report, Treasury yields and Federal Reserve outlook are all linked in today’s trading.

Elsewhere, gold is up 0.29%, silver is up 0.35%, and bitcoin is trading near $76,900, up around 0.49%. Gold is holding onto a modest gain despite elevated yields, while bitcoin is benefiting from the improved tone in equity futures.

Copper also tends to act as a barometer for global growth, particularly demand from China—Australia’s largest trading partner. If copper is tumbling, traders may see it as a warning that global and Chinese demand is weakening. That normally works against the growth-sensitive Australian dollar.

Gold is a little more complicated because it can fall when the US dollar and US yields rise. A stronger US dollar can pressure gold and copper while simultaneously pushing the AUDUSD lower. In that situation, all three markets may be reacting to the same underlying forces: a stronger dollar, higher US yields and reduced appetite for risk.

The relationships are not perfect day to day, but when gold, copper and the AUDUSD are all moving lower together, the markets are generally sending a consistent message: commodity demand is weakening, global growth concerns are rising, or the US dollar is gaining strength—perhaps a combination of all three.

Gold, copper and the AUDUSD are all moving sharply lower today (gold -1.85%, Copper futures -5.40% and AUDUSD -0.80%). Although each market has its own technical story, the common theme is that key support levels have been broken. When several related markets begin confirming the same directional message, traders tend to pay closer attention.

Gold breaks through a key technical floor

Spot gold has moved below an important cluster of support near $4,355.77. That area included the rising trend line, the 100-day moving average and the 200-bar moving average on the 4-hour chart. When several technical tools converge near the same price, that level becomes more important because traders from different time horizons are all watching it.

The break below that cluster gave sellers more confidence and opened the door toward the 50% midpoint and swing area near $4,315–$4,320. That is the next important downside target. If buyers cannot hold the line there, the focus would shift toward $4,282, followed by the 61.8% retracement near $4,230.

For buyers, getting back above $4,355.77 is now the minimum requirement if they are going to take back more control. Until then, the sellers remain in control and the broken support becomes resistance. That is a key lesson for traders: once support is broken, it often becomes a risk-defining ceiling on a rebound.

Copper tumbles after reaching new highs

Copper futures in the US reached another new high just yesterday, but the momentum has reversed sharply today, with the price falling more than 5%. That is a dramatic change in tone and shows how quickly a crowded bullish move can unwind when buyers stop supporting the price.

The decline took copper below both its 100-hour moving average at $6.7404 and its 200-hour moving average at $6.6856. Those breaks helped accelerate the selling and have pushed the price into an important swing area near $6.516. That level has attracted buyers and sellers on several occasions going back to August, making it an important barometer for the next move.

If the $6.516 area holds, copper could see a corrective rebound. However, buyers would still need to reclaim the broken 200-hour and 100-hour moving averages to repair the technical damage. Without that, any rebound would be viewed as corrective.

Conversely, a sustained break below $6.516 would give sellers another victory and increase the downside potential toward the rising 100-day moving average near $6.382. The speed of the decline is important, but traders should remain focused on the levels. Fast markets can become oversold, but oversold does not automatically mean the low is in.

AUDUSD follows commodities lower

The AUDUSD reached its highest level since May during yesterday’s trading, testing the upper swing area between 0.7221 and 0.7228. Buyers had their shot at extending the move, but they could not keep the momentum going.

Today, sellers pushed the price below the rising 100-hour moving average, which kickstarted a sharper move to the downside. The pair then broke below the 200-hour moving average near 0.71936 and through the lower part of the nearby swing area. Those breaks shifted the short-term bias more firmly in favor of the sellers.

The price is now testing a rising trend line near 0.7154. That becomes the next key risk-defining level. If the trend line holds, buyers could attempt a rebound, but they would need to reclaim the broken moving averages to regain control.

A break below 0.7154 would add to the bearish technical picture and have traders looking toward the swing area near 0.7139. Below that, the 38.2% retracement at 0.71168 would become the next important target.

The weakness in copper and gold is also a headwind for the Australian dollar. Australia is a major commodity-exporting economy, and the AUD is often treated as a commodity currency. As a result, a sharp decline in commodity prices can weigh on the currency by weakening the outlook for export revenues and broader economic growth. That relationship is not perfect on every trading day, but today the technical pictures in copper and the AUDUSD are moving in the same bearish direction.

In the video, I take a closer look at the charts for gold, copper and the AUDUSD, explain the technical breaks in greater detail and outline the levels that buyers and sellers will need to reclaim—or break—to take the next measure of control.

The rebound was also supported by the ECB’s decision to raise interest rates by 25 basis points. Subsequently, sources indicated that another rate hike could be considered as soon as October. That potentially more hawkish path helped the euro recover from its post-PPI decline. What did not push the USD lower was lower rates. The 10 year yield is still up 8.5 basis points at 4.922%. The two-year is up 11.2 basis points at 4.539%. Crude oil prices are also still higher with the price currently up at $100.75. The expectations for a rate hike next week has moved up to 70%. 

Technically, the rebound has taken the EURUSD back toward an important cluster of moving-average resistance. The 100-hour moving average comes in at 1.16252, while the key 200-day moving average is just above at 1.16321. The price is testing that area now.

This puts buyers and sellers in a battle near a well-defined technical ceiling. If the price can move above the 200-day moving average—and stay above—it would weaken the bearish bias and give buyers more confidence. Conversely, if sellers lean against the area and keep the price below it (personally I wouldn't be surprised), they remain in play for another move to the downside.

On renewed weakness, the 200-hour moving average at 1.16137and the lower end of the nearby swing area at 1.16071 become the first support targets. A break below that zone would bring the 1.15849 level back into focus, and below that the 38.2% retracement of the move up from the end of July low at 1.15738 and then the 100 day moving average at 1.1559.

The lesson for traders is that the initial move after an economic release does not always tell the full story. The EURUSD sellers had their shot below the moving averages, but they could not reach the next target. Now the rebound—helped by a potentially more hawkish ECB—is testing whether buyers can take back control or whether sellers will use the 200-day moving average to define and limit their risk.

For the S&P index, buyers are leaning against the swing area between 7577.92 and 7636.33. This area previously acted as a ceiling and is now being tested as a floor, making it the key risk-defining area. Stay above—and especially move back above 7636.33—and the buyers remain in the game. However, they still need to reclaim the 100-hour moving average at 7681.09 and the 200-hour moving average at 7694.73 to take back more control. A move below the 7577.92 would weaken the technical structure and give sellers more confidence to potentially make a run toward the rising 100 day MA at 7491.51.

For the Nasdaq Composite, buyers came in against the August 24 low at 25,910 and the rising 100-day moving average near 25,945. That combination creates a clearly defined support area and risk level for buyers. Holding above those levels keeps the longer-term bullish structure intact. However, resistance is now found at the 100-hour moving average at 26,273.69 and the 200-hour moving average at 26,328.64. Buyers need to reclaim those moving averages to improve the short-term bias. A break below 25,910 would put sellers more firmly in control and increase the downside risk.

The dominant message is that buyers have defended important support, but they have not taken back control (shorter term bears/sellers are holding a better hand). Holding support is the first step toward a recovery, but it is not the same as confirming a bullish reversal. Buyers must also reclaim the moving-average resistance above to show that momentum is shifting back in their favor.

The U.S. Dollar Index is up 0.31%, while the 10-year Treasury yield has risen 7.4 basis points to 4.911%. That is its highest level since late October 2023.

Those moves are creating a headwind for gold.

The price of gold has moved sharply lower and, in the process, broken below an important cluster of technical support near $4,356. That area includes:

• The 100-day moving average

• An upward-sloping trendline

• The 200-bar moving average on the four-hour chart

When several technical tools converge near the same price, that area tends to attract greater attention from traders. Buyers previously leaned against the cluster because it offered a clear level against which risk could be defined and limited. With the price now trading below it, however, that former support becomes resistance.

Stay below $4,356, and the sellers remain more in control. Move back above it, and traders may view the break as a failure. That could disappoint sellers and encourage buyers to reenter.

The next downside target is the 50% midpoint of the move up from the late-June low. That level comes in at $4,319.75. The price has reached $4,324.16 so far during volatile trading, putting gold within a few dollars of that target.

Why do rising yields and a stronger dollar tend to hurt gold?

Gold often moves lower when U.S. interest rates and the U.S. dollar rise for two main reasons.

First, gold does not pay interest. When Treasury yields rise, investors can earn a better return by holding interest-paying U.S. government debt. That raises the opportunity cost of owning gold. In simple terms, investors give up more potential interest income when they choose gold instead of Treasuries.

Second, gold is priced in U.S. dollars. When the dollar strengthens, gold becomes more expensive for buyers using euros, yen, pounds and other currencies. That can reduce international demand and put additional downward pressure on the price.

The typical relationship is:

• U.S. yields rise → gold becomes relatively less attractive

• The U.S. dollar rises → gold becomes more expensive for overseas buyers

• Yields and the dollar rise together → gold can face increased selling pressure

However, that relationship is a tendency—not a guarantee. Gold can still rise alongside yields and the dollar when investors are seeking safety because of geopolitical tensions, persistent inflation or broader financial-market stress.

That is why traders cannot rely on the fundamental story alone. The price action still matters. In this case, the move below the $4,356 technical cluster tells traders that sellers have taken greater control. As long as the price remains below that area, the downside bias remains intact, with the 50% midpoint at $4,319.75 representing the next key target to get to and through.

The dollar’s move comes as Treasury yields push higher ahead of today’s key U.S. PPI report. That will be followed by the CPI tomorrow, with both reports helping to shape expectations ahead of next week’s Federal Reserve decision.

Meanwhile, the EUR is modestly lower ahead of the ECB rate decision at 8:15 AM ET (see a preview HERE). The central bank is expected to raise its refinancing rate by 25 basis points to 2.65% from 2.40%.

In the Kickstart video, I take a technical look at the EURUSD, USDJPY and GBPUSD, outlining the key levels that will determine whether the dollar buyers can remain in control—or whether the sellers can take back control and where.  Plan your trading day.

As mentioned, the main economic focus today will be the August Producer Price Index at 8:30 AM ET. Headline PPI is expected to rise 0.4% for the month after being unchanged in July, with the year-over-year rate accelerating to 5.3% from 4.7%. Excluding food and energy, PPI is expected to increase 0.3% versus 0.2% previously, lifting the annual core rate to 4.6% from 4.2%. With oil prices above $100 and the Federal Reserve meeting next week, a hotter-than-expected report could increase inflation concerns and expectations for another rate hike. A softer number would provide some relief for bonds and potentially weigh on the dollar.

Other releases today:

• 8:15 AM ET: ECB refinancing rate—expected to rise to 2.65% from 2.40%
• 8:15 AM ET: ECB deposit rate—expected to rise to 2.50% from 2.25%
• 8:30 AM ET: Initial jobless claims—205,000 expected versus 206,000 previously
• 8:30 AM ET: Continuing claims—1.780 million expected versus 1.779 million previously
• 10:00 AM ET: Existing-home sales—3.98 million expected versus 4.06 million previously
• 10:00 AM ET: Existing-home sales change—previously −1.7%
• 10:00 AM ET: Wholesale inventories—expected to rise 1.3%
• 10:00 AM ET: Wholesale sales—previously fell 3.0%

Looking at other markets, U.S. stock futures are mixed ahead of today’s PPI report (see a post on some pre-market stock moves here). The Dow is higher, the S&P is little changed, while the Nasdaq is under pressure as technology shares lag. The major indices are on a 3 day down streak after yesterday saw the Dow fall -0.77%, the S&P fall -0.48% andthe Nasdaq composite fall -0.64% (see post):. The S&P and Nasdaq closed below the 100 and 200 hour MAs (see post) 

• Dow industrial average: +96 points
• S&P index: +1.5 points
• Nasdaq index: −116 points

European markets are mostly higher, although the gains are relatively modest. The U.K.’s FTSE 100 is the exception:

• Euro Stoxx 50: +0.11%
• Germany’s DAX: +0.01%
• France’s CAC: +0.19%
• U.K.’s FTSE 100: −0.29%
• Spain’s Ibex: +0.27%
• Italy’s FTSE MIB: +0.36%

Overall, the price action is cautious as traders await the U.S. inflation data and the ECB interest-rate decision.

In political/geopolitical news from the US, President Trump used Wednesday’s GOP midterm rally in Dallas to make the November election a referendum on his administration. He told supporters to vote as if his name were on the ballot and warned that a Democratic victory would reverse his policies on immigration, taxes, crime and the economy.

Trump also promised a $5,000 “Trump dividend” to every adult U.S. citizen if Republicans retain control of the House and Senate. He suggested tariff revenue could help pay for the plan, although he offered few details, and congressional approval would likely be required. Let me take a guess....it will be privately funded.  

For the markets, the more important comments were focused on Iran and oil. Trump said the war with Iran would end “immediately after the election,” claiming Tehran was attempting to influence the midterms. Although he left the door open to negotiations, he said the U.S. was not currently looking for a deal and that his objectives extended beyond a nuclear agreement.

On oil, Trump acknowledged that getting prices back down would “take a little longer,” but predicted they would begin falling shortly after the election. He also said gasoline would eventually move below $2 per gallon.

The market takeaway is that Trump does not appear to be signaling a near-term de-escalation with Iran. With Middle East tensions already threatening global supplies, that may keep a geopolitical risk premium underneath crude oil heading toward the November election.

In the middle east news overnight, tensions remain elevated, helping to keep a geopolitical risk premium underneath oil. Iran said it attacked 10 vessels near the Strait of Hormuz in retaliation for U.S. strikes on Iranian tankers, although the U.S. denied that any of its ships were hit. Meanwhile, the Iran-backed Houthis expanded their operations in Yemen and moved closer to the Bab el-Mandeb Strait—another key shipping route—while Saudi Arabia continued retaliatory airstrikes following attacks on its airbase and oil infrastructure. With no signs of an immediate diplomatic breakthrough, the risks to oil supplies and inflation remain tilted to the upside. The price of crude oil is up $1.65 or 1.72% a $97.70. The high price reached $97.84.  Brent crude is at $102.90 after cracking back above $100 level yesterday.