US Dollar Index

The US Dollar Index held steady around 98.25 on Thursday after showing some weakness the previous day, as investors await fresh labor market data that could shape the interest rate outlook. The key focus is Friday’s August nonfarm payrolls report, which will be pivotal in guiding near-term market direction. Economists expect 75,000 new jobs in August, with the unemployment rate rising to 4.3%. A weaker-than-expected result could further pressure the dollar and strengthen expectations for a Federal Reserve rate cut.

On Wednesday, the dollar slipped after the JOLTS survey showed job openings fell by 176,000 to 7.18 million—the lowest level since September 2024 and below expectations of 7.4 million. Adding to the cautious mood, US factory orders declined for a second consecutive month in July. Markets now see nearly a 98% probability that the Fed will cut rates by 25 basis points later this month.

From a technical perspective, the daily chart shows support forming near the 98.00 level, though the broader trend remains weak. After a series of pullbacks, the candlestick pattern remains in a downward consolidation channel, with short-term moving averages providing clear resistance and the 14-day RSI hovering in neutral-to-weak territory. A break below the 98.00 support could open the way to retest Monday’s low of 97.54, while a move above resistance at 98.70 (the 100-day simple moving average) could pave the way for a rebound toward the 99.00 mark. Overall, the short-term outlook for the US Dollar Index remains tilted to the downside, with Friday’s payrolls data likely to determine the next decisive move.

WTI Spot Crude Oil

WTI crude oil fell to $62.95 per barrel on Thursday, extending the previous session’s 2.5% drop, as concerns grew that OPEC+ may increase supply. Reports indicate the cartel will discuss raising output at its policy meeting this weekend. The move aims to regain market share and could lead the group to scale back its current daily production cuts of 1.65 million barrels—around 1.6% of global demand. OPEC+ had previously agreed to raise production targets by 2.2 million barrels per day between April and September, with the UAE contributing an additional 300,000 barrels per day. However, due to prior overproduction adjustments and capacity constraints among some members, the actual increase has lagged.

Adding to bearish sentiment, US crude inventories unexpectedly rose by 600,000 barrels last week, compared with forecasts for a 3.4 million-barrel drawdown, pointing to weak demand and higher supply.

From a technical standpoint, US crude encountered strong resistance near $65.76 (the 50% Fibonacci retracement of $54.78–$76.74) and the psychological $66.00 level, before turning lower again. The broader trend remains weak, with consecutive bearish candles showing downside dominance, and short-term moving averages crossing lower. A break below $62.80 (the August 27 low) could open the way for further downside toward the $62.00 handle and the $61.45 level (the low from August 18). On the other hand, if prices can stabilize around $63.00, bulls would need to push above $64.29 (the 30-day simple moving average) to regain momentum toward $65.76.

Spot Gold

Weak US employment data has further strengthened expectations of a Federal Reserve rate cut this month, driving gold higher for seven consecutive sessions and pushing it to record highs. This surge is not just a short-term fluctuation but a reflection of broader macroeconomic pressures and a shift in monetary policy. The strength in gold highlights investor concerns over the US labor market while also underscoring the dual impact of global trade tensions and inflation risks.

On Wednesday (September 3), spot gold extended its record-setting rally, climbing to an intraday high near $3,578 per ounce, once again marking an all-time high. Dovish remarks from Federal Reserve officials further boosted September rate-cut expectations, adding fuel to gold’s upside momentum. On Thursday (September 4), gold consolidated at elevated levels, currently trading around $3,530 per ounce.

From a technical perspective, the recent pullback has found some support near $3,458—the 23.6% Fibonacci retracement of the rally from around $3,300 and the 9-day simple moving average. A break below the $3,500 psychological level could pave the way for a deeper correction, with the $3,458 zone acting as the next key support. This level has served as resistance in the past month’s trading range; if breached on the downside, it would suggest a potential top is in place and tilt the near-term bias toward sellers. On the upside, resistance may emerge around $3,560, ahead of the $3,578–3,579 region (Wednesday’s record high). A sustained move above this zone could open the path for gold to challenge the $3,600 mark or break higher toward uncharted territory.

AUD/USD

The Australian dollar slipped slightly on Thursday to around 0.6520, though it remains supported by recent gains and stronger-than-expected trade balance data. Australia’s July goods trade surplus widened to AUD 7.31 billion, the highest in 17 months and well above the forecast of AUD 5.0 billion. Exports rose 3.3% to AUD 46.02 billion, the strongest in 21 months, extending June’s sharp growth, while imports fell 1.3% to AUD 38.71 billion, weighed down by weaker demand for non-monetary gold.

The Aussie also drew support from upbeat Q2 GDP growth figures, reinforcing expectations that the Reserve Bank of Australia will keep interest rates unchanged at the end of September. Interest rate swap pricing suggests policymakers are monitoring a gradual easing in labor market tightness, with nearly a 90% probability of no policy change.

On Thursday, AUD/USD traded around 0.6520. From a technical perspective, the pair is trending higher within an ascending channel pattern, signaling a bullish bias. It also trades above the 20-day simple moving average at 0.6504, indicating firm short-term momentum. On the upside, the pair may target the five-week high of 0.6568 (seen on August 14), followed by the channel top near 0.6590. A breakout above the channel would strengthen the bullish outlook and open the way for a test of the nine-month high at 0.6625 (recorded on July 24). Key supports lie at the 20-day SMA of 0.6504, followed by 0.6458 (the 110-day SMA), and then the 0.6400 psychological level.

GBP/USD

Sterling rebounded above 1.3400, supported by a weaker US dollar after disappointing labor market data strengthened expectations for a Federal Reserve rate cut in September. The JOLTS report showed job openings fell by 176,000 in July to 7.18 million—the lowest since September 2014 and well below the 7.40 million forecast. Domestically, the outlook for the pound remains clouded by fiscal uncertainty ahead of the Autumn Budget, where Chancellor Rachel Reeves faces pressure to either raise taxes or cut spending to meet fiscal targets. Meanwhile, Bank of England Governor Andrew Bailey told lawmakers there is “considerable uncertainty” about the timing of rate cuts. Markets no longer expect another cut this year, with the next fully priced move projected for April.

GBP/USD bounced from midweek lows of 1.3333, recovering back above 1.3400 as broader market sentiment improved slightly, helping sterling recover from a four-week low. While risk-on sentiment and anticipation of Fed easing have buoyed the pair, Governor Bailey’s dovish remarks limited upside momentum. GBP/USD continues to trade around the 110-day simple moving average at 1.3415, though recent price action suggests the pair may face short-term pressure. A renewed test below the 1.3400 psychological level could expose the pair to fresh downside toward the weekly low of 1.3333. Conversely, broad dollar selling could lift the pair toward 1.3484 (the 20-day SMA), with a breakout paving the way for the 1.3500 psychological level.

USD/JPY

The US dollar climbed above 148.00 against the yen on Thursday, extending a modest rebound from the previous session. The dollar softened following weak US labor data, which reinforced market expectations for a Federal Reserve rate cut. Domestically, Bank of Japan Governor Kazuo Ueda reiterated on Wednesday that the bank’s policy stance on rate hikes remains unchanged, provided growth and inflation progress as expected. Investors now await Friday’s wage data for further policy guidance.

Meanwhile, the yen briefly touched a one-month low on Wednesday as political uncertainty weighed on sentiment. Hiroshi Moriyama, Secretary-General of the ruling party and a close ally of Prime Minister Shigeru Ishiba, resigned, fueling speculation that Ishiba is under pressure following recent electoral setbacks. Among the frontrunners to succeed him, Sanae Takaichi is seen as a supporter of maintaining low interest rates.

From a technical perspective, once USD/JPY confirms a break above the 200-day moving average at 148.83, further buying would validate a breakout from the one-month trading range. With daily chart oscillators just beginning to gain positive momentum, the pair could accelerate toward the next resistance zone at 149.55–149.60. Momentum may then extend to reclaim the key psychological 150.00 level, with scope to challenge the August monthly high near 151.00.

On the downside, initial support lies just above the 148.00 handle. A decisive break below this level could drag the pair toward interim support at 147.40, followed by deeper downside targets at 147.00 and 146.70.

EUR/USD

EUR/USD consolidated gains above 1.1630, trading near its highest level in a month as the dollar weakened following soft US labor market data. The JOLTS report showed US job openings fell by 176,000 in July to 7.18 million, the lowest since September 2024 and below the 7.40 million forecast, reinforcing expectations for a Fed rate cut in September.

In Europe, fiscal concerns are mounting amid expectations of higher defense spending and increased German infrastructure investment, while attention also turns to French Prime Minister François Bayrou’s confidence vote on September 8. Meanwhile, eurozone inflation quickened to 2.1% in August, slightly above forecasts and the ECB’s 2% target, strengthening expectations that the central bank will keep rates unchanged at next week’s meeting.

EUR/USD has rebounded from last week’s low of 1.1574 to around 1.1650 midweek, opening the door to a potential retest of 1.1700. Although the 14-day RSI has turned bullish, it has yet to break above its recent highs, suggesting consolidation has dominated over the past two weeks. A break above the September 1 peak at 1.1736 would pave the way toward 1.1800 and the year’s high near 1.1830. Conversely, a daily close below 1.1601 (the 75-day simple moving average) could expose the 1.1600 handle, followed by deeper support at the 100-day SMA near 1.1517.

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