US Dollar Index

The US Dollar Index fell last week to a one-and-a-half-month low of 97.43, following declines in short-term Treasury yields. Signs of a more severe deterioration in the labor market have raised concerns about the US economy and reinforced market expectations for multiple Federal Reserve rate cuts. In August, nonfarm payrolls increased by just 22,000, far below the forecast of 75,000, while the unemployment rate climbed to a near four-year high of 4.3%. These downbeat figures align with dovish remarks from FOMC members, who recently noted that rates should be adjusted to accommodate the slowdown in both the economy and the labor market. The central bank is widely expected to restart its rate-cutting cycle this month, with three cuts projected in total for this year.

By contrast, the eurozone has seen ongoing employment growth and rising inflation, which has led rate traders to lean toward the ECB refraining from further cuts this year. This divergence has boosted the euro—the largest component of the Dollar Index.

Last week, the Dollar Index fluctuated between a high of 98.65 and a low of 97.40, reflecting a stalemate between bulls and bears, suggesting indecision but with a slight short-term bearish bias. On the daily chart, the 14-day RSI stands near 46, highlighting that the index is trapped in a narrow, low-level range. For nearly a month, it has consolidated below the 100-day simple moving average (currently at 98.68).

This week, if the index can break above and hold the 98.00 psychological level and the 20-day simple moving average at 98.11, it would indicate stabilization at the lows. A close above these levels could generate enough momentum to test the 100-day SMA at 98.68, with the next resistance at 99.00. On the downside, if the index falls below the double-bottom support at 97.43 (formed on July 25 and August 5), the next targets would be the seven-week low at 97.11 recorded on July 24, and the 97.00 round number level.

WTI Spot Crude Oil

WTI crude, the US benchmark, fell for a third consecutive session last week, dropping more than 2.0% on Friday and over 3.0% for the week, closing at $61.70 per barrel. This marked its first weekly decline in three weeks. The selloff was triggered by a surprise build of 2.4 million barrels in US crude inventories, against expectations of a draw, just ahead of Sunday’s OPEC+ meeting where members are considering further production increases. Reports suggest that Saudi Arabia is pushing to raise output to reclaim market share, potentially rolling back part of the current 1.65 million barrels per day cut.

Geopolitical tensions also weighed on the market, as the US pressured buyers of Russian oil and imposed new tariffs on India’s imports. Meanwhile, fresh supply is expected from Guyana and Brazil, while slowing US economic growth has raised concerns about weaker demand. Overall, crude prices remain under pressure from the risk of oversupply, though geopolitical frictions may help limit WTI’s downside amid broader economic uncertainty.

WTI fell more than 3.0% last week. From a technical perspective, the bearish outlook remains intact, as prices are capped below the key daily 100-day simple moving average (SMA) at $64.12 and the shorter-term 20-day SMA at $63.25. While some consolidation or a short-term rebound cannot be ruled out, momentum remains weak, with the 14-day RSI hovering just below 40. Initial support sits at the May low of $61.20. A break below this level would expose $60.78, the June 2 low, and the psychological $60.00 area.

On the upside, the first resistance to watch is the 20-day SMA at $63.25, together with the $63.20 region (last Friday’s low). Sustained trading above this area could pave the way toward the 100-day SMA at $64.12 and then $65.76, the 50% Fibonacci retracement of the $54.78–$76.74 move.

Spot Gold

Gold prices surged more than 4.0% last week, marking their biggest weekly gain since April and reaching a record high of $3,600 per ounce. The rally was driven by weaker-than-expected US jobs data, which strengthened bets on Federal Reserve rate cuts. The US economy added only 22,000 jobs in August, well below expectations of 75,000, while the unemployment rate climbed to 4.3%, the highest since 2021. These figures highlighted labor market weakness and reinforced market expectations that the Fed will cut rates later this month, with markets currently pricing in around 66 basis points of easing for 2025.

Beyond rate cut expectations, gold’s strong performance also reflected broader concerns—over the Fed’s independence, heightened political risk, and fears of a steeper yield curve amid inflation worries. Meanwhile, geopolitical tensions, economic uncertainty, and global trade risks have further boosted demand for safe-haven assets.

From a technical perspective, it is difficult to identify a clear top for gold prices, especially as prices continue setting record highs without historical reference points. In such an environment, psychological round numbers (such as 3,500, 3,600, 3,650, and 3,700) and intermediate levels like 25, 50, and 75 tend to act as potential support and resistance. After hitting fresh record highs of $3,600 three times last week, the uptrend stalled as traders took profits near this key level. The 14-day RSI is pointing higher at 76, indicating overbought conditions.

For sellers to challenge the uptrend, gold would need to break below $3,540.20 (the 5-day SMA). A drop under $3,540 would expose $3,500 (a key psychological level), with the next support at $3,484.10 (the 9-day SMA). On the upside, a breakout above $3,600 would open the way to $3,650, followed by the round number of $3,700 as the next potential record high.

AUD/USD

The Australian dollar climbed to a six-week high of 0.6588 against the US dollar after the latest US nonfarm payrolls report and a rise in expectations for a September Fed rate cut. The Bureau of Labor Statistics reported that the US economy added only 22,000 jobs in August, well below the 75,000 expected and down from the revised 79,000 previously. Average hourly earnings held steady at 0.3% month-on-month, while the unemployment rate rose to 4.3% from 4.2% in July. Based on December 2025 Fed funds futures contracts, markets are now pricing in around 67 basis points of rate cuts by year-end, with traders fully expecting a 25-basis-point cut at the September meeting. Ahead of next week’s August CPI release, the probability of a 50-basis-point cut stands at 14%. Should disinflation persist, the chances of larger cuts could increase.

Meanwhile, AUD/USD remains closely tied to US dollar fluctuations. Next week, key releases will include Westpac’s Consumer Sentiment Index and Chinese economic data, both of which may add volatility.

Technically, after reaching a six-week high at 0.6588 late last week, AUD/USD has since eased back toward the 0.6560 region, with buyers unable to break above the psychological 0.6600 mark. On the daily chart, the pair sits near the upper boundary of an ascending channel pattern, with the next move likely to provide clearer directional cues. Currently, AUD/USD trades slightly above the 20-day SMA at 0.6506, indicating short-term momentum remains constructive. The 14-day RSI is near 57, suggesting momentum is gradually strengthening.

On the upside, last week’s candle formed a “piercing line” pattern, pointing to a possible test of the August 14 five-week high at 0.6568, followed by the channel top around 0.6605. A break above this level would reinforce the bullish bias and support a test of the July 24 nine-month high at 0.6625.

On the downside, immediate support lies at the 20-day SMA at 0.6506, aligned with the 0.6500 psychological level. The next key support is the 100-day SMA at 0.6458. A break below this zone would turn the bias bearish and expose the August 21 three-month low of 0.6414.

GBP/USD

Sterling climbed above 1.3500, supported by broad US dollar weakness after US employment data pointed to further labor market cooling. The report reinforced expectations for a Fed rate cut later this month, with markets now pricing around 66 basis points of easing in 2025. The US economy added just 22,000 jobs in August, well below the forecast of 75,000, while the unemployment rate rose to 4.3%, its highest since 2021.

Despite dollar weakness, the pound is still set to end the week 0.3% lower, dragged by fiscal uncertainty and concerns ahead of November’s Autumn Budget. However, upbeat July UK retail sales data briefly attracted demand for sterling against other currencies. Bank of England Governor Andrew Bailey also noted uncertainty around the pace of rate cuts in his testimony before Parliament’s Treasury Committee on Wednesday. At the same time, strong expectations for a Fed cut remain, with investors hoping US labor market weakness will force the Fed to ease despite lingering inflationary pressures, potentially before the end of Q3 to support domestic job growth.

From a technical standpoint, GBP/USD touched a near three-week high of 1.3555 late last week before easing back to 1.3510. Currently, the pair is consolidating just above the 1.3500 psychological mark. Short-term moving averages are trending mildly lower, while the 14-day RSI has recovered from oversold territory to a neutral 53, signaling indecision between buyers and sellers at current levels.

On the downside, a break below 1.3457 (100-day SMA) would expose the 1.3400 psychological level, followed by 1.3367 (the 50% Fibonacci retracement of the 1.3141–1.3594 move). A drop below 1.3367 would bring 1.3300 into focus as the next potential support.

On the upside, resistance sits at 1.3555 (last week’s high) and 1.3550 (September 1 high). A breakout above this zone would open the way toward 1.3594 (August 14 high) and the 1.3600 psychological level, with further scope to retest 1.3675 (July 3 high).

USD/JPY

Japan delivered a political shock on Sunday, as Prime Minister Shigeru Ishiba announced he would step down to pave the way for new leadership. Meanwhile, Friday’s US nonfarm payrolls data came in far weaker than expected, with only 22,000 jobs added in August versus analyst forecasts of 75,000. June’s payroll figure was also revised down sharply from +14,000 to -13,000. The unemployment rate rose to 4.3% from 4.2% in July, while the participation rate edged up to 62.3% from 62.2%. Reflecting the weak labor market, the US dollar index dropped to a six-week low of 97.43.

USD/JPY turned lower during US trading hours, falling to 146.82 before rebounding to close near 147.40. The yen largely shrugged off July’s cash earnings data, which showed nominal cash earnings rising 4.1% year-on-year—the highest in seven months due to bonus payments. Still, the Bank of Japan is unlikely to hike policy rates beyond current market pricing, which limits yen appreciation. Markets generally expect USD/JPY to remain in a broad 142.00–150.00 range over the coming months.

USD/JPY has failed twice in recent days to hold above the 200-day SMA at 148.83, turning lower afterward, which favors the bearish camp. However, mildly positive daily oscillators suggest it is prudent to wait for further selling pressure and confirmation below the 148.00 mark. Spot prices could accelerate toward the 50-day SMA at 147.31, then test 147.00. A break below this would expose August’s swing low near 146.20, with further downside toward 146.00 and 145.50.

On the upside, the 200-day SMA at 148.83 remains an immediate obstacle ahead of 149.15 (last Wednesday’s one-month high). This latter level also represents the 61.8% Fibonacci retracement of the August swing high. A decisive break above it would shift bias in favor of the bulls, with scope to retest the 150.00 psychological barrier and potentially the August peak near 151.00.

EUR/USD

The euro climbed above 1.1700 to a six-week high of 1.1760, its strongest level since late July, as broad US dollar weakness followed further evidence of a cooling US labor market. The report reinforced expectations for a Fed rate cut later this month, with markets currently pricing in around 66 basis points of easing in 2025. The US economy added only 22,000 jobs in August, well below the expected 75,000, while unemployment rose to 4.3%, the highest since 2021.

Attention now shifts to next week’s ECB meeting, where policymakers are widely expected to keep rates unchanged amid stable growth prospects and inflation close to target. Eurozone GDP expanded by 0.1% in Q2, while August inflation stood at 2.1%. Fiscal risks are also back in focus, as defense spending may rise and Germany is considering higher infrastructure investment. Politically, markets are watching French Prime Minister François Bayrou’s September 8 confidence vote.

On the daily chart, EUR/USD consolidated after pulling back from a one-week high at 1.1736 toward 1.1600, before regaining momentum late last week to push back above 1.1700 and post a six-week high at 1.1760. The pair now trades comfortably above the 1.1700 handle. The 14-day RSI, currently at 55, signals further upside potential. A break above 1.1760 (last week’s high) would pave the way toward the psychological 1.1800 mark, with the next target at the year-to-date high of 1.1830.

On the downside, a daily close below 1.1700 would expose the 50-day SMA at 1.1666 and last Friday’s low of 1.1648. Further weakness could bring the 1.1600 psychological level into play, followed by the 89-day SMA at 1.1543.

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