Currency & Commodity Analysis:

US Dollar Index (DXY)

The US Dollar Index held steady around 99 on Thursday, pausing its recent decline as investors awaited key inflation data that could influence the Federal Reserve's next policy decision. The US Producer Price Index (PPI) for August is due later today, followed by the Consumer Price Index (CPI) report on Friday. Other major economic data scheduled for release today include weekly jobless claims and existing home sales figures. Markets currently price in a roughly 60% probability of a 25-basis-point rate hike by the Fed next week, following stronger-than-expected employment data. Meanwhile, the Treasury Department announced plans to repurchase up to $6 billion in long-term debt—three times the usual amount—causing Treasury yields to surge, although the move disappointed some investors who had anticipated a larger buyback volume. Separately, escalating tensions between the US and Iran have driven up oil prices, fueling inflation concerns and reinforcing expectations for a near-term rate hike.

The US Dollar Index has retreated from last week's high of 99.86, touching a low of 98.60, though it is currently holding above the 99 level. On the daily chart, the price has decisively broken below the Bollinger Bands' middle line (support at 99.17) and is currently trading between that middle line and the lower band at 98.60 (Wednesday's low). Regarding the MACD indicator, both the DIFF and DEA lines remain below the zero axis, and the green histogram continues to expand with no signs of bullish divergence or convergence. A large bearish candle on the weekly chart has wiped out gains from previous weeks, signaling a strong bearish trend (rated four stars). Consequently, the initial downside targets are the 98.60 (Wednesday's low) and 98.56 (August 20 low) area; a break below this points toward the 98.00 psychological level. On the upside, focus remains on the Bollinger middle line at 99.17, followed by the 99.50 level.

Consider shorting the US Dollar Index today at 99.20; Stop Loss: 99.30; Targets: 98.80, 98.70.

WTI Spot Crude Oil

Crude oil prices broke through the $100-per-barrel mark on Thursday, reaching their highest level since May 19, as escalating tensions in the Middle East sparked fears of prolonged disruptions to global energy supplies. Senior White House advisors reportedly discussed with President Donald Trump the possibility of a war with Iran dragging on until Inauguration Day in January 2029. Iran's Houthi allies in Yemen attacked multiple energy facilities in Saudi Arabia this week, heightening concerns about a widening conflict. Saudi Arabia's crude oil production dropped sharply in August 2026, falling by approximately 1.9 million barrels per day. Iran reported attacks on U.S. warships and oil tankers in the Persian Gulf, while the U.S. stated it had struck 10 Iranian tankers. Upward pressure on oil prices intensified; tanker freight rates have surged to record highs, and U.S. crude oil inventories fell by 300,000 barrels in the week ending September 4. Meanwhile, the Energy Information Administration (EIA) raised its forecast for U.S. crude oil production in 2027 to 14.3 million barrels per day.

Given the recent developments involving the four parties—the Houthis, Saudi Arabia, the U.S., and Iran... As the armed standoff intensifies, this new geopolitical development has driven oil prices steadily upward. However, the market is already pricing in the geopolitical risks surrounding the two key straits; further price increases would require additional exchanges of fire—but is such a conflict sustainable? The answer is likely no. As previously analyzed, tanker capacity remains intact at around 50%, and the current strategy on both sides is essentially "fighting to facilitate negotiation." While current price trends suggest Iran holds the upper hand, the ultimate outcome remains to be seen: will rising prices force the U.S. to make concessions, or will the U.S. maintain sanctions while the global market stabilizes prices by adapting to reduce reliance on the Strait of Hormuz? From a technical perspective, oil prices are hovering near the 0.618 retracement level while maintaining a short-term bullish pattern. The 5-day moving average at $91.97 is a key level to watch for bullish momentum, followed by the $90.00 psychological mark. Furthermore, if prices can stabilize near the $100 psychological threshold, there is potential for a further rise to $103.54 (the high from May) and near the 105 level.

Consider going long on crude oil today at 100.25; stop-loss: 100.10; targets: 102.00, 103.00.

Spot Gold

On Thursday, the price of gold fell to approximately $4,350 per ounce as traders increased bets on a Federal Reserve rate hike next week following stronger-than-expected U.S. producer price data. The U.S. Producer Price Index (PPI) rose 0.4% in August, while annual producer inflation accelerated to 5.4%—surpassing the expected 5.3%—reflecting a surge in energy prices and signs of cost pass-through across broader sectors. These figures coincided with a fresh rally in oil prices amid escalating tensions between the U.S. and Iran in the Middle East, prompting investors to price in a greater than 70% probability of a Fed rate hike on September 16. Meanwhile, traders also ramped up bets on further policy tightening by the European Central Bank, following its anticipated rate hike and warnings that inflation risks remain skewed to the upside.

Regarding gold, a rate hike would uphold the Federal Reserve's independence, likely benefiting a pullback in 10-year Treasury yields over the medium to long term; this could trigger a brief dip in gold prices—creating a "buying opportunity" (or "gold pit")—before shifting to a trend of short-term weakness followed by long-term gains. Conversely, if interest rates remain unchanged, gold prices would likely rebound. Gold found support at the 100-day simple moving average (SMA) of $4,340 and staged a rebound, though it has since remained range-bound. The Relative Strength Index (RSI) indicates strengthening bullish momentum; however, the week's high of $4,443 acts as key resistance, capping further upside and preventing gold from retesting the $4,500 level for now. If bulls successfully push above $4,500, the next key target is the 200-day moving average at $4,538. On the downside, should the price fall below the 100-day SMA at $4,340... The 4,300 level will serve as the initial support. Should this level fail to hold, the next support level is the cycle low of $4,282 recorded on September 2, followed by the 50-day moving average at $4,267.

Consider going long on gold today at 4,315, with a stop-loss at 4,310 and targets at 4,350 and 4,360.

AUD/USD

The AUD/USD pair faced significant selling pressure prior to Friday's open, retreating to a multi-day low near 0.7150, where it appears to be finding solid support. The Australian dollar's decline followed a rally in the US dollar—spurred by strong US producer price data for August and renewed inflation concerns—even though hawkish signals from the Reserve Bank of Australia had previously boosted expectations for a near-term rate hike. Attacks on oil tankers involving Iran and the US—representing the largest wave of attacks on shipping since the conflict began—threaten further disruptions to energy supplies in the Gulf region. This has pushed oil prices above $100 per barrel, intensifying inflationary pressures that are already impacting domestic consumer prices and raising expectations for a fourth rate hike this year. Deputy Governor Hauser stated that discussions at the next meeting would focus on whether to raise interest rates, highlighting persistently high inflation and upside risks. Markets currently price in a 77% probability of a 25-basis-point rate hike at the Reserve Bank of Australia's upcoming meeting this month, while traders also imply an 80% chance that the cash rate will reach 4.85% next year.

On the daily chart, AUD/USD is trading near 0.7155, maintaining a bullish tone as the spot price holds above the 0.7100 round-number level. A cluster of potential demand zones lies just below the current price, supported by a strong Relative Strength Index (RSI-14) approaching the overbought zone; meanwhile, the Average Directional Index (ADI-14) at around 25 suggests the trend is strengthening but has not yet entered an aggressive phase. To the upside, initial resistance is seen at 0.7264 (May 14 high), followed closely by the 0.7300 psychological resistance level. To the downside, immediate support is found at the 34-day Simple Moving Average (SMA) of 0.7106 and the 0.7100 round-number level.

Consider going long on AUD at 0.7145 today; Stop Loss: 0.7135; Targets: 0.7200, 0.7210.

GBP/USD

GBP/USD is trading at 1.3520 as renewed inflation concerns reinforce expectations for further rate hikes by the Bank of England. Brent crude oil prices briefly touched $100 per barrel, and UK natural gas prices climbed to their highest levels since late 2022, driven by escalating Middle East tensions that heightened fears regarding energy supplies. Markets fully anticipate a 25-basis-point rate hike by the Bank of England by December, followed by two additional hikes in 2027. However, policymakers are widely expected to keep interest rates unchanged at the September 17 meeting. In an address to lawmakers on Tuesday, Bank of England Governor Andrew Bailey pushed back against the view that another rate hike was merely a matter of time, emphasizing that future decisions would depend on evolving economic and geopolitical developments. Meanwhile, Monetary Policy Committee member Megan Greene—who voted for a rate hike in July—warned that persistent oil price shocks could lead to more entrenched inflation expectations.

GBP/USD is currently hovering below the 38.2% Fibonacci retracement level of 1.3553 while holding above the 23.6% retracement level of 1.3524. This positioning—combined with the spot price trading above the 200-period simple moving average (SMA) at 1.3510 on the 4-hour chart, yet still capped by nearby Fibonacci resistance—suggests a broadly neutral short-term tone. A break above the 38.2% retracement level could see GBP/USD test the 50.0% level at 1.3576, followed by the 61.8% retracement level at 1.3599. Further resistance lies at 1.3632 and the swing high area near 1.3675. On the downside, initial support is found at the 200-period SMA (1.3510); should selling pressure persist, deeper support lies around 1.3477.

Consider going long on GBP at 1.3510 today; Stop Loss: 1.3500; Targets: 1.3550, 1.3560.

USD/JPY

USD/JPY edged higher during Thursday's Asian session, trading above the 153.50 level, as bears turned cautious ahead of the release of US inflation data. Nevertheless, the spot price remains close to the seven-month low touched earlier this week, as the market continues to price in a more hawkish stance from the Bank of Japan (BoJ), which supports the yen. Traders appear to have fully priced in a 25-basis-point rate hike at the BoJ's next policy meeting on September 17–18 and see a high probability of further action in December. This follows recent calls by hawkish BoJ officials—Hajime Takata and Naoki Tamura—for faster, more flexible rate hikes to address rising inflation. Additionally, upward revisions to economic growth forecasts and robust wage growth reinforce the central bank's policy normalization path, supporting the yen and capping gains in USD/JPY. Meanwhile, the US dollar and the USD/JPY pair are finding some support from market bets that the US central bank will raise borrowing costs later this month, driven by inflation risks linked to rising energy prices and escalating US-Iran tensions.

On the daily chart, USD/JPY trades at 153.80, maintaining a short-term bearish bias as the spot price remains below the 5-day Simple Moving Average (SMA) at 154.30. Trading below this short-term trend indicator suggests that upside attempts will likely be limited given the weak momentum; the 14-day Relative Strength Index (RSI) hovers near 25, indicating weak demand and oversold conditions. On the upside, immediate resistance lies at the 5-day SMA (154.30)—the first hurdle for any rebound—and the bearish tone remains reinforced as long as the price stays below this level. With no clear immediate support levels nearby, market focus remains on whether sellers can sustain pressure below the 156.22 (9-day SMA) and 156.28 (early-week high) zone, as a decisive break and hold above these resistance levels would be required to alleviate the current downward bias. The next level to watch is 157.88 (the 20-day simple moving average). USD/JPY remains under significant bearish pressure, trading well below the support zone of 155.30–155.20. On the downside, a break below 153.00 would serve as a new trigger for bearish traders and pave the way for a deeper decline toward the year-to-date low of 152.10 (hit on January 27), as the spot price seeks a more solid bottom.

Consider shorting USD at 154.00 today; Stop-loss: 154.20; Target: 153.40. 153.30

EUR/USD

The Euro rose to a high of $1.1645—its highest level since late August—as investors positioned themselves ahead of Thursday's European Central Bank (ECB) policy meeting. Policymakers are widely expected to raise interest rates while maintaining a data-dependent stance, amidst uncertainty regarding the inflation outlook fueled by the ongoing conflict involving Iran. Brent crude prices briefly touched $100 per barrel for the first time since July 24, while European natural gas prices climbed to a three-and-a-half-year high as tensions in the Middle East escalated, intensifying market concerns over energy supplies. Markets currently anticipate two ECB rate hikes in 2026, with the deposit rate projected to reach 3.1% by the end of 2027. A Reuters poll released on September 3 indicated that economists expect the ECB to implement its second rate hike on Thursday, concluding its shortest tightening cycle in 15 years.

From a technical perspective, the spot price maintains a constructive short-term bias on the 4-hour chart, trading above the 200-period Exponential Moving Average (EMA) at 1.1573 and the 38.2% Fibonacci retracement level (of the 1.1323–1.2072 rally) at 1.1609. Additionally, the Relative Strength Index (RSI) near 58 and a slightly positive Moving Average Convergence Divergence (MACD) reading suggest that bullish momentum persists, though the market has not yet entered overextended territory. Immediate resistance lies at the 50.0% Fibonacci retracement level of 1.1698, followed by the 61.8% level at 1.1786 (a swing high). On the downside, immediate support is found at the 1.1600 psychological level, followed by the 200-period EMA at 1.1573. A decisive break below these levels would expose the 23.6% retracement level at 1.1500.

Consider going long on the Euro at 1.1600 today; Stop Loss: 1.1590; Target: 1.165. 1.1660

Stock Analysis:

ASX 200 Index (Australia)

Market Overview:

The ASX 200 index fell 92 points, or 1.0%, to close at 8,804—a six-week low. The market declined for the third consecutive session; despite a rebound in US futures, sentiment remained dampened following Wall Street's third straight day of losses. Markets were pressured by escalating US-Iran tensions, with Brent crude oil prices breaching $100 per barrel, fueling inflation concerns. Domestically, Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser indicated that policymakers would consider further tightening at the September meeting, while Assistant Governor Sarah Hunter warned of limited tolerance for persistent price pressures. This hawkish tone prompted the "Big Four" banks to forecast another rate hike before year-end, with National Australia Bank (NAB) anticipating a hike in September and the others projecting November.

Broad-based declines were seen across sectors, led by healthcare, non-energy materials, technology, and financials. Shares of the Big Four banks fell between 0.9% and 1.8%, while BHP dropped 2.4% and Rio Tinto fell 3.1%. Other underperformers included PLS (-3.8%), Nextdc (-3.3%), and Lynas (-2.9%). Gains in Cochlear (+1.6%) and Suncorp (+1.3%) provided some support.

Sector Performance:

Top-performing sectors: Energy, Materials (Mining)

•          Energy: WDS and Santos rose, driven by Brent crude approaching $100/barrel;

•          Materials: BHP and Rio Tinto strengthened, supported by rising copper prices.

Worst-performing sectors: Healthcare, Financials (Big Four banks), Retail

•          Healthcare: CSL dragged down the sector after lowering its guidance;

•          Financials: The Big Four banks generally declined, weighed down by weakening domestic business and consumer confidence;

•          Consumer retail remained under pressure, reflecting a deteriorating outlook for the local economy.

Technical Analysis:

Thursday's Close: 8,804 points (-1.00%, down 92 points). The market closed lower for the third consecutive session, hitting a six-week low, with an intraday low near 8,745. Market characteristics: Broad-based decline with 166 constituent stocks closing lower; the energy sector showed relative resilience, while financials, non-energy mining, technology, and healthcare led the losses. The "Big Four" banks fell 0.9%–1.8%, BHP dropped 2.4%, and Rio Tinto fell 3.1%; only a few stocks (e.g., Cochlear, Suncorp) posted modest gains. The RSI (14) retreated to the 45–46 range, shifting to a "weak neutral" stance; short-term momentum has weakened, though the market has not yet entered oversold territory. Intraday trading saw an initial rise followed by a pullback as bears took control; a slight overnight rebound in US stock futures failed to reverse the bearish sentiment in Australian equities. Key Drivers: Geopolitical conflict in the Middle East pushed oil prices above $100, reigniting inflation concerns; hawkish comments from RBA officials caused market pricing for a September rate hike to surge; and declining global risk appetite weighed on risk assets.

Friday's Technical Outlook: A rebound requires overnight strength in US stocks, a pullback in oil prices, and an improvement in risk sentiment. The index may rebound to test resistance at 8,880–8,900; however, the short-term downtrend will only reverse if the index firmly holds above 8,995 (the 50-day moving average); otherwise, any rise remains merely a technical rebound. External Variables for Friday: US PPI and initial jobless claims data will directly impact the US dollar and Treasury yields, indirectly influencing Australian stocks; the Middle East situation continues to disrupt commodity markets and risk sentiment. Short-term Scenario Analysis: Bearish Base Case (Higher Probability) — The index fluctuates near 8800, testing the 8830–8740 support zone; a decisive break below 8740 targets the 8650–8600 range; initial resistance for any rebound lies at 8880–8900, and the index must hold above 8900 to alleviate short-term downward pressure. Extreme Downside Scenario — Geopolitical conflicts escalate further, causing high volatility in commodities; the index breaks below 8700, opening the door for a deeper correction.

Trading Strategy (Short-term Perspective)

Bullish Strategy

1.         Avoid rushing to "buy the dip"; wait for signs of stabilization. Consider a small long position only if the index pulls back to the 8740–8700 support zone, forms a reversal candlestick (indicating a halt in the decline), and the RSI stops making new lows.

2.         Stop-loss: Exit if the price decisively breaks below 8650.

3.         First target: 8880–8900; Second target: 8995.

If the index rebounds immediately, do not chase the rally; observe if it hits the 8880–8900 resistance zone, and only enter if it breaks above the 50-day moving average.

Bearish Strategy

1.         Consider short-term short selling if the index rebounds to the 8880–8900 resistance zone and faces selling pressure.

2.         Stop-loss: Exit if the price closes firmly above 8995.

3.         First target: 8830; Second target: 8740–8700.

4.         If the market opens with a gap below 8740, do not chase the short position; wait for a rebound before entering.

Key Risk Factors:

1.         Geopolitical Risk: Escalating conflict in the Middle East could drive oil prices higher, fueling inflation expectations and weighing on global stock markets; conversely, a de-escalation could trigger a rapid recovery in risk assets and a reversal of current trends.

2.         Monetary Policy Risk: Rising expectations for a September rate hike by the Reserve Bank of Australia (RBA) are pressuring interest-rate-sensitive sectors; meanwhile, US inflation data exceeding forecasts has pushed up the US dollar and Treasury yields, creating headwinds for Australian equities.

3.         Technical Breakdown Risk: A decisive close below the 8,700 level on the daily chart could signal a deeper correction, making a short-term rebound more difficult.

4.         Commodity Volatility Risk: Sharp fluctuations in the prices of iron ore, copper, and oil directly impact heavyweight mining and energy sectors, amplifying volatility in the broader index.

New Zealand Stock Market Index {NZX50}

Market Overview:

The New Zealand stock market fell 108 points, or 0.8%, to close at 13,711 on Thursday—its lowest level since July 31—following gains in the previous session. The decline was driven by weak trading on Wall Street overnight, prompted by surging Treasury yields and rising oil prices. Continued increases in oil prices have sparked inflation concerns and bolstered market bets that central banks—including the Reserve Bank of New Zealand (RBNZ), which recently raised rates for the second consecutive time—will hike interest rates. Traders are also awaiting US inflation data later this week for clues regarding the Federal Reserve's upcoming monetary policy decisions, as well as New Zealand's manufacturing Purchasing Managers' Index (PMI) for August, due on Friday.

The industrial, utility, and real estate sectors were the primary drags on the index; major laggards included Delegat Group (-3.9%), Briscoe Group (-3.2%), Fletcher Building (-2.6%), ANZ Group (-1.5%), Mainfreight (-1.4%), Westpac Banking Corp. (-1.3%), and Freightways Group (-1.2%).

Sector Performance:

Top-performing sectors: Utilities, Healthcare, and Communication Services. Sectors Leading the Decline: Financials, Consumer Discretionary, and Materials/Industrial Construction. These sectors remain weak due to subdued expectations for Chinese demand and negative sentiment surrounding commodities, making them vulnerable to further declines.

Technical Analysis:

New Zealand Market Close (Thursday): 13,711 points, -0.80% (-108 points). This marked the lowest closing level in six weeks (since July 31), erasing the previous day's gains. Drivers: Weakness in overnight US markets, rising US Treasury yields, and higher oil prices fueling inflation concerns. Markets are positioning defensively ahead of US inflation data and New Zealand's August Manufacturing PMI release. Technicals: The daily candle closed bearish, with the index falling below the 20-day moving average; the RSI retreated to around 40, indicating bearish dominance; trading volume was low, suggesting sentiment-driven selling rather than a high-volume panic sell-off.

Technical Outlook for Friday (Sept 11): Bullish/Bearish Scenarios—Bearish Scenario (Higher Probability): If US inflation expectations run hot and overnight US markets remain under pressure, the NZX50 will likely test the 13,650 support level; a high-volume break below 13,650 would open the door for further downside in the short term. Consolidation/Recovery Scenario: If PMI data is positive and external sentiment improves, the index could rebound to test the 13,780–13,800 resistance zone; however, without a high-volume break above 13,800, any rebound should be viewed as weak rather than a trend reversal. Strong Reversal Scenario: A close firmly above 13,900 would be required to signal the end of the short-term downtrend; current conditions do not support this.

Trading Strategy:

Operational Strategy (Short-term Perspective)

Short-term Trading Strategy (Friday Intraday / 3–5 Days)

Bullish Approach (Cautious; play rebounds only)

•          Entry: Consider scaling into long positions only if the index pulls back to the 13,660–13,680 range, forms a reversal candle (indicating a halt in the decline), and shows contracting volume; do not chase rallies. •          Stop-loss: Exit if the price breaks decisively below 13,620.

•          Take-profit: First target 13,780–13,800 (reduce position); second target 13,870–13,900.

Bearish Strategy (Trend-following)

•          Entry: If a rebound faces resistance at 13,780–13,800 and shows signs of a long upper shadow or a pullback after an initial rise, consider a small short position.

•          Stop-loss: Stop out if the price rises above 13,840.

•          Take-profit: First target 13,680; second target 13,600.

Key Risk Warnings:

1.         Macro Data Risk: New Zealand’s manufacturing PMI (Friday) and US inflation data (later today) could cause significant price gaps in the index; data exceeding expectations could break the current technical trading range.

2.         External Correlation Risk: The NZX50 closely tracks US equities, the US dollar, and US Treasury yields; significant volatility in US stocks could directly trigger a gap-up or gap-down opening for the New Zealand index.

3.         Central Bank Expectation Risk: Rising oil prices are boosting inflation expectations, leading the market to re-price the likelihood of RBNZ rate hikes, which weighs on stock market valuations.

4.         Technical Risk: The current market is characterized by weak oscillation within a downtrend; rebounds can easily act as "bull traps"—do not mistake a rebound for a trend reversal.

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