U.S. Dollar Index

The U.S. Dollar Index hovered below 98.00 on Wednesday as the greenback struggled amid growing expectations that the Federal Reserve will cut rates in September. The weakness stems from disappointing revised U.S. employment growth data. The Bureau of Labor Statistics reported that the economy may have created 911,000 fewer jobs in the 12 months to March than previously estimated, pointing to a softer labor market. The final benchmark revision will be released in February 2026 alongside the January 2026 employment situation report.

Investors are now awaiting a key inflation report that could shape the Fed’s policy stance. Combined with last week’s weak August jobs report, these figures have reinforced expectations of a 25-basis-point rate cut at next week’s meeting, while some traders are preparing for a larger 50-basis-point cut. Overall, markets are pricing in around 66 basis points of easing this year.

Earlier this week, the index fell to a one-and-a-half-month low of 97.25 before stabilizing above 97.70 midweek. The 98.00 psychological level and the 34-day moving average at 98.27 remain key resistance levels, leaving the technical outlook bearish. Meanwhile, the 14-day Relative Strength Index (RSI) fluctuates in the 45.00–47.00 range, signaling market indecision.

If the index breaks below Tuesday’s low of 97.25—or the 97.00 round number—downside momentum could extend toward the near three-year low at 96.38. A break below 96.38 would likely pave the way for further losses toward the 96.00 psychological level. Conversely, a recovery above 98.00 and 98.27 would open the door for a move toward the 100-day simple moving average at 98.64.

WTI Spot Crude Oil

WTI crude rose to around $63 per barrel on Wednesday, extending its rally for a third consecutive session. The move was driven by heightened concerns over potential supply disruptions amid escalating tensions in the Middle East. The Israeli military reported striking a Hamas leader in Doha, Qatar, marking a further escalation of its ongoing campaign in the region. Hours later, Israel warned of potential strikes on Gaza City.

This geopolitical flare-up has added to bullish pressure, offsetting the modest OPEC+ production increase for October, which is far smaller than the expansions seen in prior months. Meanwhile, reports surfaced that U.S. President Trump has urged the EU to impose 100% tariffs on Chinese and Indian goods to pressure Russian President Putin, with Washington signaling it may adopt similar measures.

However, the current upswing in oil prices is largely driven by short-term geopolitical risks rather than fundamental improvements. Even if the U.S. pushes the EU to adopt tariff measures, policy uncertainty and implementation challenges remain high. In contrast, inventory accumulation and OPEC+ output decisions will be the key drivers of medium- to long-term trends. As such, crude prices are likely to remain range-bound.

From a technical perspective, daily charts show initial support near $61.60 (early-week low) and $62.00 (round number), while the 200-day simple moving average at $66.84 serves as the primary upside barrier. If WTI can decisively break above the 20-day SMA at $63.24 and last Friday’s low of $63.20, the path would open toward the 100-day SMA at $64.12, followed by the $65.00 psychological level. Conversely, a break below the $62.00 support could see prices weaken back to $61.60, with further downside toward the $60.00 psychological level or lower.

Spot Gold

Despite being in overbought territory and flashing technical signals for a bearish correction, gold prices continued to climb on Wednesday. The metal’s safe-haven appeal remains intact amid a weaker U.S. dollar, heightened expectations for Federal Reserve easing, and escalating geopolitical tensions in Europe and the Middle East. Gold found buying interest near $3,619 in early trading and rebounded above $3,650, with Tuesday’s high of $3,675 back in sight. Reports of an Israeli strike on Hamas leadership in Qatar and Poland shooting down a suspected Russian drone added further support to bullion.

Recent downward revisions to nonfarm payroll data showed that the U.S. economy added far fewer jobs over the past year than initially reported, echoing a similar adjustment from the previous year. This reinforced concerns over a weakening labor market, bolstering expectations for multiple rate cuts this year. Meanwhile, the persistent turmoil in the Middle East has further increased geopolitical risk, fueling demand for gold.

Price action this week has been volatile, with gold swinging from fresh record highs at $3,674.60 to intraday lows near $3,619. In the European and Asian sessions, it consolidated around the $3,650–3,655 range. On the daily chart, Bollinger Bands, MACD, and RSI indicators confirm the strong momentum. Gold briefly broke above the upper Bollinger Band at $3,674, signaling a “volume-led + trend acceleration” phase as the band widened. Initial support is seen at $3,619 (triple lows from last weekend), followed by the psychological $3,600 level, with the 99-day SMA at $3,561.30 serving as a deeper support. On the upside, resistance sits at the $3,674–3,675 region, with limited room for extension beyond the psychological barrier of $3,700.

AUD/USD

The Australian dollar climbed above 0.6600 on Wednesday, its highest level in nearly seven weeks, supported by firmer commodity prices. Gold remains near record highs on safe-haven demand and expectations of Fed rate cuts, while oil gained on escalating Middle East tensions. At the same time, iron ore prices rose as Chinese steel mills resumed operations, reflecting strong demand. Since commodities make up a significant share of Australia’s exports, these price increases have boosted export income and terms of trade, lifting demand for the Aussie.

On the policy front, markets assign an 86% probability of an RBA rate cut in November, while rates are widely expected to remain unchanged at the September meeting. However, renewed global trade tensions continue to cap gains in the risk-sensitive currency.

Technically, AUD/USD is trading near 0.6600 and remains within an ascending channel, pointing to a sustained bullish bias. The 14-day RSI is comfortably above 62, reinforcing strong near-term momentum. Initial resistance is seen at 0.6625 (10-month high from July 24), followed by the channel top near 0.6640. A decisive break above this zone would further support bullish momentum and open the way toward the 11-month high at 0.6681 (November 2024). On the downside, the 9-day SMA at 0.6555 aligns closely with channel support at 0.6552. A break below would weaken the bullish bias and expose the 0.6500 psychological level.

GBP/USD

Sterling traded firmly near 1.3540 during Wednesday’s European morning session, supported by growing bets that the Federal Reserve will lower borrowing costs at its September 16–17 policy meeting. Traders are awaiting the release of August U.S. inflation data, which could help define both the size and scope of the Fed’s upcoming rate cuts. Markets are currently pricing in around 66 basis points of easing for 2025. U.S. economic data showed just 22,000 jobs added in August, far below expectations of 75,000, while the unemployment rate climbed to 4.3%, the highest since 2021, in line with forecasts. Meanwhile, Bank of England Governor Andrew Bailey told lawmakers there remains “considerable uncertainty” over the timing of U.K. rate cuts.

From a technical perspective, GBP/USD retains a constructive outlook as the pair holds well above the 100-day EMA at 1.3464. The 14-day RSI sits at 54.50, above the neutral midline, signaling ongoing bullish momentum. Key resistance lies in the 1.3585–1.3600 zone, encompassing the upper Bollinger Band, the September 9 high, and a key psychological barrier. A break above this area could fuel further gains toward the June 13 high at 1.3632, with the July 2 peak at 1.3752 as the next upside target. On the downside, initial support is at the 100-day EMA (1.3464), and a drop below that would expose the Bollinger Band lower boundary near 1.3400.

USD/JPY

In early Asian trading on Wednesday, USD/JPY lost momentum around 147.35 as speculation of a significant Federal Reserve rate cut next week weighed on the dollar. U.S. Bureau of Labor Statistics data released Tuesday showed a preliminary estimate of –911,000 nonfarm jobs in March 2025 (–0.6%), further intensifying pressure on the Fed to ease policy and adding selling pressure to the greenback. On the other hand, political uncertainty in Japan added a counterbalance after Prime Minister Shigeru Ishiba resigned over the weekend. This could temporarily hinder the Bank of Japan’s policy normalization efforts, potentially weakening the yen and limiting USD/JPY losses. Japanese media reported that the ruling party leadership election is likely to be held in early October.

Technically, the pair’s rejection from the 200-day SMA resistance at 148.80, followed by a drop below the 148.00 round figure, has shifted the bias further in favor of the bears. Daily oscillators have also begun to pick up negative momentum, suggesting the path of least resistance is lower. A decisive break below the 147.00 handle would reinforce the bearish outlook and expose the August swing low around 146.20, the 146.00 psychological mark, and ultimately the 145.00 level. On the upside, the intraday high near 147.55 now acts as immediate resistance. A sustained move above this level could trigger short-covering and lift USD/JPY back toward 148.00. However, further momentum is likely to face strong headwinds near the 200-day SMA at 148.80, followed by the 149.00 round figure and 149.20 zone.

EUR/USD

Despite U.S. data reinforcing expectations that the Federal Reserve may cut rates at next week’s meeting, the euro retreated against the dollar on Tuesday. After briefly hitting a daily high near 1.1780, the pair slipped back toward 1.1700 as the greenback rebounded. The revision to U.S. nonfarm payrolls solidified easing expectations, but attention now shifts to upcoming U.S. inflation data. On the European side, the calendar remains light, with traders awaiting the European Central Bank’s next monetary policy decision.

EUR/USD has been consolidating in recent months after a strong first-half rally, spending most of Q3 digesting gains near multi-year highs. The pair recorded a three-year peak on the first day of Q3 before pulling back toward the 1.1400 handle in July, when the dollar posted its strongest monthly advance in over three years. The release of the August 1 NFP, however, shifted the narrative, with markets aggressively pricing in Fed rate cuts. As the FOMC meeting approaches, those expectations will soon be tested.

Technically, EUR/USD is tracing out a symmetrical triangle pattern, marked by higher lows and lower highs. Given the prior uptrend and the absence of a deep pullback, the formation can be classified as a bullish pennant. The key question is whether bulls can extend momentum. A break above the 1.1777–1.1780 resistance zone would expose the 1.1830 swing high from early Q3, with the 1.2000 psychological level as the next target. On the downside, support is layered at 1.1709 (recent higher low), 1.1660 (50-day SMA), and last week’s swing low at 1.1608. Holding above any of these could sustain bullish momentum, but a decisive break below 1.1608 would invalidate the bullish setup.

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