Williams said yesterday there is evidence that inflation is continuing to ease as the effects of tariffs fade and higher energy costs are not spreading to other services. "The data lately is encouraging," he said in a Wednesday interview, adding, "I do really see the inflation trend moving down slowly as some of the tariff effects move into the rearview mirror."

Williams's assessment of current policy is noticeably more sanguine than that of the hawkish wing. He supported the decision to leave rates unchanged at the July meeting and considers the current level appropriate. "Following the last FOMC meeting, interest rates are in a good place" to balance the dual mandate of full employment and price stability, he said, adding: "We're gathering a lot of data now, and we'll have to reassess that judgment."

That stance contrasts sharply with the chair's. Recall that Kevin Warsh said at Jackson Hole that he would find it hard to describe broad financial conditions as restrictive and stressed that policymakers "have work to do" if they are not confident core inflation is moving to target. Williams, by contrast, explicitly calls the current rate level appropriate, while acknowledging that tariffs and energy driven up by the Middle East conflict remain the primary inflation drivers and that elevated inflation in services still exerts some influence.

The specifics of his assessments are notable because they frame the entire dispute within the Fed. "I would expect that if we saw a sustained boom in productivity of the sort we have seen before, that would push the neutral rate up. But I have to say, right now we have not seen that," he said, estimating the neutral rate at roughly 1%. In his view, the real policy rate has risen only modestly. On that basis, a current range of 3.50–3.75% with inflation around 3.7% implies policy is already in restrictive territory — a conclusion that directly contradicts Warsh's.

Differences over how restrictive policy is were also apparent at the Jackson Hole symposium itself. Fed officials will reconvene September 15–16 in Washington after five consecutive meetings of unchanged policy; at the July meeting, three voting members dissented in favor of a quarter-point rate hike. With the market now pricing roughly a 70% chance of a September hike after Warsh's speech, and with an influential voice like Williams leaning toward the status quo, the upcoming meeting risks becoming the most contentious in months.

On the technical front for EUR/USD, buyers now need to take 1.1608 to open a path toward testing 1.1623. From there, the instrument can target 1.1641, although doing so without support from large players will be difficult. On the downside, I expect serious buying only around 1.1584; if no buyers appear there, it would be prudent to wait for a new low at 1.1568 or to open longs from 1.1550.

For GBP/USD, pound buyers need to capture nearby resistance at 1.3494 to target 1.3515, above which further gains will be challenging. A more distant target is 1.3531. If the currency pair falls, bears will attempt to take control of 1.3475; a breach of that range would severely damage bull positions and push GBP/USD toward a low of 1.3457, with a prospect of reaching 1.3435.

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Important:

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

#instaforex #analysis #sebastianseliga

Useful links:

My other articles are available in this section

InstaForex course for beginners

Popular Analytics

Open trading account

Important:

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

#instaforex #analysis #sebastianseliga

This followed quite serious events. On Tuesday evening, U.S. forces carried out a second round of strikes in three days targeting radar systems and mining equipment along Iran's southern coast. Tehran responded with drone and missile salvos at U.S. bases in the Middle East, which fits the pattern used throughout the six-month conflict. Notably, by Wednesday evening the U.S. was no longer reporting strikes, and that pause, combined with Trump's remarks, cooled the market.

The president described the operation's results with evident confidence while leaving the door open for further escalation. "We destroyed all the new equipment they were trying to build along the Strait of Hormuz, part defensive, part offensive," he said of previous strikes, adding, "Last night there was a very powerful attack, and we are ready to do another one at any time we want."

It is worth noting that the current pullback changes little in the overall picture. The benchmark grade is still up about 7 percent for the week and 57 percent year-to-date, raising growing concern about economic consequences as winter approaches. Fuel prices are rising even faster than oil itself: U.S. retail diesel prices are near a four-year high, and the surge in energy costs was one reason for the recent sell-off in global bond markets.

Many signals point to the conflict potentially dragging on for many more months, which is crucial for assessing the resilience of the current pullback. The situation is such that prices could resume rising at any moment. The present decline rests solely on Trump's verbal intervention and one night without strikes, while the physical infrastructure of the conflict — including 50,000 U.S. troops and ongoing strikes around Kuwait — remains in place. One new round of strikes or another tanker hit in the strait would be enough to erase the entire pullback in hours, and given that European gas storage is only about 65 percent full and diesel margins are near historic highs, the energy market's buffer against a new shock is minimal.

Regarding the current technical picture for oil, buyers need to reclaim the nearest resistance at $92.50. That would allow a target of $96.54, above which a breakout would become rather difficult. The most distant target is in the $100.40 area. If oil falls, bears will try to take control of $89.54. If they succeed, a break of that range would deliver a serious blow to bulls and push Oil toward the $87.08 low, with a further prospect of reaching $84.40.

The reason for the reversal was triggered by President Trump's statement that the recent attacks on Iran are likely to be short-lived. The oil rally stopped at that point; renewed hostilities had earlier fueled fears of accelerating inflation, which is traditionally a headwind for non-yielding gold. The metal also received additional support from the currency market as the dollar stabilized after a sharp spike in the yen, leaving traders on alert for further action by Japanese authorities.

Notably, the monetary backdrop also shifted in a favorable direction. New York Federal Reserve President John Williams said on Wednesday that there is evidence of ongoing disinflation as the effects of tariffs fade and higher energy costs are not spilling over into other services. That cooled rate-hike expectations, a view further supported by the ADP data showing hiring slowed in August to 38,000 jobs, the weakest since January.

It is worth noting that technically the metal also recovered ground, moving back above the 100-day moving average, a medium-term benchmark for traders. Recall that just three days ago gold lost nearly 6 percent over three sessions and fell below the 200-day moving average, so the current rebound has reclaimed part of the losses.

The metal's year-to-date picture remains mixed despite the dramatic moves. Gold is only slightly above early-year levels after exceptionally volatile trading: a record in January, a four-month slump through June, then a recovery amid the Middle East conflict and attempts to assess whether the Fed will need to tighten policy. Ongoing central bank purchases provide some steady support. The next key development will come on Friday, when the official jobs report will either confirm the hiring weakness shown by ADP or reverse expectations back toward a September rate hike.

Regarding the current technical picture for gold, buyers need to reclaim the nearest resistance at $4,425. That would allow a target of $4,481, above which a breakout would become rather difficult. The most distant target is in the $4,540 area. If gold falls, bears will try to take control of $4,372. If they succeed, a break of that range would deliver a serious blow to bulls and push Gold toward the $4,304 low, with a further prospect of reaching $4,249.

S&P 500 daily performance

However, beneath the green headline numbers, the market looks far more cautious. The S&P 500 has gone 25 sessions without a decline of at least 1% — an uncommon stretch since mid-May — and it's trading less than 2% below its all-time high. Yet market breadth is narrowing again: the index holds gains, while fewer stocks are actually driving it up. Meanwhile, "fast money," JP Morgan estimates, carries the lowest directional risk since April 2025's "Liberation Day."

The real threat right now sits not in stocks but in bonds. Rising oil prices are feeding inflation concerns, and the 10-year Treasury yield has approached the psychological 5% level, a threshold traditionally viewed as toxic for equities. The 30-year yield is at a 19-year high.

S&P 500 and breadth indicators performance

That 5% level matters psychologically, and JP Morgan warns you could see a reflexive reaction in the S&P 500 if it is breached. A 5–8% correction is plausible in the run-up to the US midterms. Most likely, it would be a healthy pullback rather than a structural break.

Labor market signals are adding to the unease. ADP data shows that private payrolls rose by just 38,000 in August, down from a revised 46,000 the prior month and below the 47,000 consensus. That's the smallest monthly gain so far this year. Investors are now focused on Friday's BLS report, which risks printing weaker than expected.

There are doubts that corporate profits, which jumped by roughly 30% in the US and 15% in Europe last quarter, can sustain that pace. Still, the breadth of earnings growth, supported by financials, industrials, and utilities, looks healthier than a rally concentrated solely in tech.

JP Morgan continues to view the capex supercycle as the main driver of the earnings supercycle, with the US remaining the preferred region. The question is whether stocks can withstand a 5% Treasury yield if that level is decisively broken.

Technically, the S&P 500 registered a false breakout of the 1-2-3 correction low on the daily chart. The pattern can still complete and trigger a correction. That would require a drop below 7,610, which would be a sell signal. Conversely, a successful push above 7,685 would be a reason to buy.

Asian index futures also strengthened during a volatile session. The MSCI Asia Pacific index climbed as much as 1.2% before giving back most of its gains by the close. South Korea's Kospi, often viewed as a barometer for AI investment, saw particularly sharp swings: it jumped by 1.8%, then plunged by 1.9%, ultimately finishing up a modest 0.3%.

The main headline for Asia was the yen, which strengthened for a second consecutive session. The sharp move prompted speculation about possible intervention by authorities. Notably, the appreciation began on Wednesday after a Bank of Japan board member signaled that an unusually large or repeat rate increase could be on the table. Overnight swaps now fully price a standard 25?bp hike in September, while the probability of an immediate 50-bp move is considered extremely low. Recall that Governor Kazuo Ueda effectively signaled a September hike, stressing the need to pay greater attention to upside price risks.

Oil paused a three-day rally, which relieved some pressure on US Treasuries. Brent fell by 1.3% to $94.35/bbl after US President Donald Trump said renewed strikes on Iran are likely to be short-lived and reiterated that the US controls the Strait of Hormuz. The 10-year US Treasury yield eased by one basis point to 4.77%, and the US dollar index fell by 0.2% for a second straight session. Gold climbed by 0.9% to settle at about $4,420/oz.

Outside oil, commodity markets deserve close attention. European natural gas futures rose for a fourth consecutive day, heading toward the highest levels since early 2023. This is a particularly worrying signal given that European storage is only around 65% full ahead of winter. Industrial metals also advanced, with London copper trading less than $300/ton shy of recent highs.

All eyes now turn to Friday's US employment report, which will provide fresh clues on the economy and the outlook for monetary policy.

As for the technical outlook for the S&P 500, the immediate task for buyers is to overcome the resistance level of $7,679. That would signal renewed upside and open the path to $7,698. Maintaining control above $7,718 would further strengthen the bulls' case. On the downside, buyers need to defend the $7,656 area. A break below that level would likely push the index back to $7,633 and open the way to $7,607.

The price test at 159.79 occurred as the MACD indicator began to move down from the zero mark, confirming the correct entry point to sell the dollar. As a result, the pair fell toward the target level of 159.55.

Good data from Japan combined with another coordinated currency intervention by the Bank of Japan and the United States led to a sharp drop in the dollar and a strengthening of the yen. The August services PMI rose to 52.5 from the prior 51.2, and the composite PMI increased to 53.5 from 52.7. PMI indices are built on company surveys and reflect the state of the economy, with values above 50 indicating expansion. The confident acceleration in services reinforced belief in the resilience of the Japanese economy and strengthened expectations of a tighter Bank of Japan policy. This is especially important against the backdrop of the recent weak manufacturing PMI, which had earlier pressured the yen — now the services sector offset the negative from industry.

The main driver, however, was the intervention itself. This time it was a fait accompli: regulators entered the market jointly, and coordination with the U.S. gave the actions particular weight and sharply amplified the effect. Recall that the BoJ has previously intervened to support the national currency when it weakened excessively, and this time the joint actions pushed USD/JPY down and allowed the yen to recover a significant portion of recent losses.

The combination of strong domestic data and direct intervention shifted the balance of power in favor of the yen, especially as the divergence in approaches between the BoJ and the Federal Reserve is beginning to narrow as rate expectations in Japan rise. The further dynamics of USD/JPY will now depend on whether the intervention's effect holds, whether subsequent data confirm the nascent acceleration of the Japanese economy, and on the rhetoric of BoJ Governor Ueda.

As for the intraday strategy, I will rely mainly on executing Scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: I plan to buy USD/JPY today if the entry point around 157.75 (the green line on the chart) is reached, with a target to rise to 158.13 (the thicker green line on the chart). Around 158.13, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip move in the opposite direction from that level). It is best to return to buying the pair on corrections and significant pullbacks in USD/JPY. Important! Before buying, make sure the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of 157.38, with the MACD indicator in an oversold area. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise toward the opposite levels of 157.75 and 158.13.

Sell scenarios

Scenario No. 1: I plan to sell USD/JPY today only after the 157.38 level (the red line on the chart) is broken, which will lead to a rapid decline in the pair. The key target for sellers will be 156.98, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip move in the opposite direction from that level). Sellers will return at any moment — we only need any hint from the central bank. Important! Before selling, make sure the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of 157.75 while the MACD indicator is in an overbought area. This will limit the pair's upside potential and lead to a downward reversal. One can expect a decline toward the opposite levels of 157.38 and 156.98.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.

The price test at 1.3477 occurred when the MACD indicator had moved well below the zero mark, limiting the pair's downside potential. The second test of 1.3477 coincided with the MACD being in an oversold area, prompting the implementation of Buy Scenario No. 2 for the pound, resulting in a 20-pip rise in the pair.

The disappointing ADP employment report set the tone for trading and weakened the dollar. The US private sector added only 38,000 jobs in August, the lowest since January, and the hiring structure was even more troubling: manufacturing was the weakest sector, while education and healthcare accounted for almost the entire gain. Labor-market weakness reduced expectations of a hawkish Federal Reserve and undermined demand for the US currency. The British pound took advantage of the dollar's weakening and strengthened against it, though a large upward correction did not materialize.

Today, the British currency enters the first half of the day with a focus on the final estimates of the services and composite PMIs. Business activity indices are leading indicators because they are the first to capture shifts in business sentiment, and through expectations for Bank of England policy they also affect the pound's exchange rate. Since these are revised figures, the market will watch primarily for deviations from preliminary values. The outlook for the pair depends on the direction of the revision. Confirmation or improvement of strong preliminary services figures can support the pound against the dollar, especially given the BoE's persistently cautious hawkish stance. A deterioration in the estimates will quickly reapply pressure to GBP/USD.

As for the intraday strategy, I will rely mainly on executing Scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: I plan to buy the pound today if the entry point around 1.3497 (the green line on the chart) is reached, with a target to rise to 1.3523 (the thicker green line on the chart). Around 1.3523, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip move in the opposite direction from that level). Expect pound strength today only after strong data. Important! Before buying, make sure the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the event of two consecutive tests of 1.3485, with the MACD indicator in an oversold area. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise toward the opposite levels of 1.3497 and 1.3523.

Sell scenarios

Scenario No. 1: I plan to sell the pound today after the level 1.3485 (the red line on the chart) is breached, which will lead to a quick decline in the pair. The key target for sellers will be 1.3459, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip move in the opposite direction from that level). Bad news will bring pressure back on the pound. Important! Before selling, make sure the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of 1.3497 while the MACD indicator is in an overbought area. This will limit the pair's upside potential and lead to a downward reversal. One can expect a decline toward the opposite levels of 1.3485 and 1.3459.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.

The price test at 1.1580 occurred when the MACD indicator had moved well above the zero mark, limiting the pair's upside potential. The second test of 1.1580 prompted the implementation of Sell Scenario No. 2 for the euro, but the pair did not decline.

The weak ADP report undermined the dollar, as the US private sector created only 38,000 jobs in August, the worst result since January. The indicator serves as an early snapshot of the labor market ahead of official data, and its failure strengthened expectations of a softer Federal Reserve policy. The structure of the report only emphasized the weakness, since goods production went negative and almost the entire gain was provided by education and healthcare. The single currency took advantage of the dollar's weakness, and the EUR/USD pair moved higher.

Today the euro enters the first half of the day with a focus on a block of European data, including final services and composite PMIs, as well as the producer price index. PMI indices are leading indicators because they are the first to capture shifts in business sentiment, while producer prices help judge rising price pressure. Both indicators directly affect expectations for European Central Bank policy and, through that, the single currency's exchange rate. The outlook for the euro is favorable, as inflation in the region has already accelerated, and strong data will only reinforce hawkish expectations. A jump in producer prices together with a robust PMI can strengthen the single currency against the dollar, supporting the market's bet on an ECB rate hike on September 10.

As for the intraday strategy, I will rely mainly on executing Scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: Today, the euro can be bought if the price reaches around 1.1603 (the green line on the chart), with a target to rise to 1.1622. At 1.1622, I plan to exit the market and sell the euro in the opposite direction, expecting a 30–35-pip move from the entry point. Growth in the euro can be expected only after very strong data. Important! Before buying, make sure the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in the event of two consecutive tests of 1.1590, with the MACD indicator in an oversold area. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise toward the opposite levels of 1.1603 and 1.1622.

Sell scenarios

Scenario No. 1: I plan to sell the euro after the level 1.1590 (the red line on the chart) is reached. The target will be 1.1570, where I plan to exit the market and buy immediately in the opposite direction (expecting a 20–25 pip move in the opposite direction from that level). Pressure on the pair will return today with weak data. Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today if there are two consecutive tests of 1.1603 while the MACD indicator is in an overbought area. This will limit the pair's upside potential and lead to a downward reversal. One can expect a decline toward the opposite levels of 1.1590 and 1.1570.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.

The data showed private payrolls increased by only 38,000, versus a consensus of 47–48,000 and July's 46,000, the weakest hiring pace since January. Under normal circumstances, such disappointment would have eased hawkish expectations, but this time the market reacted paradoxically: the probability of a rate hike at the September meeting, according to CME FedWatch, remained in the 60–66% range.

The reason for this gap between weak employment data and persistent hawkish expectations lies in the energy market. Oil is once again actively heading toward the $100 per barrel area, and the 10-year Treasury yield has risen again to 4.818% — the highest since November 2023. It is this combination of rising energy prices and high bond yields that keeps the Fed's stance tighter than labor market data alone would justify, which puts pressure on the cryptocurrency market. Institutional flows have already reacted to this pressure: spot Bitcoin ETFs recorded outflows of $236.46 million, reversing the recent series of inflows.

The decisive data before the Fed meeting on September 15–16 will be the official August employment report scheduled for this Friday and fresh inflation figures, which could determine whether the weakness in the labor market will be outweighed in the central bank's view by ongoing price pressure from oil.

As for short-term trading, the strategy and conditions are described below.

Bitcoin

Buy scenario

Scenario No. 1: I will buy Bitcoin today on reaching an entry around $77,900 with a target to rise to $78,500. Around $78,500, I will exit buy positions and sell immediately on the bounce. Before buying the breakout, ensure the 50-day moving average is below the current price and the Awesome Oscillator is above zero.

Scenario No. 2: Bitcoin can be bought from the lower boundary of $77,700 if there is no market reaction to its breakout to the downside, targeting $77,900 and $78,500.

Sell scenario

Scenario No. 1: I will sell Bitcoin today on reaching an entry around $77,300 with a target to fall to $76,500. Around $76,500, I will exit sell positions and buy immediately on the bounce. Before selling the breakout, ensure the 50-day moving average is above the current price and the Awesome Oscillator is below zero.

Scenario No. 2: Bitcoin can be sold from the upper boundary of $77,900 if there is no market reaction to its breakout to the upside, targeting $77,300 and $76,500.

Ethereum

Buy scenario

Scenario No. 1: I will buy Ether today on reaching an entry around $2,412 with a target to rise to $2,444. Around $2,444, I will exit buy positions and sell immediately on the bounce. Before buying the breakout, ensure the 50-day moving average is below the current price and the Awesome Oscillator is above zero.

Scenario No. 2: Ether can be bought from the lower boundary of $2,391 if there is no market reaction to its breakout to the downside, targeting $2,412 and $2,444.

Sell scenario

Scenario No. 1: I will sell Ether today on reaching an entry around $2,391 with a target to fall to $2,359. Around $2,359, I will exit sell positions and buy immediately on the bounce. Before selling the breakout, ensure the 50-day moving average is above the current price and the Awesome Oscillator is below zero.

Scenario No. 2: Ether can be sold from the upper boundary of $2,412 if there is no market reaction to its breakout to the upside, targeting $2,391 and $2,359.

Yesterday, the dollar fell in response to news that the US private sector created only 38,000 jobs in August, the lowest since January. The ADP report is considered an early indicator for the labor market, so such a weak result immediately weakened arguments for Federal Reserve hawkishness and removed support for the dollar. The structure proved more interesting: goods production lost 10,000 jobs, while the entire gain was driven by education and healthcare, which added 45,000 jobs. The worst sector was manufacturing, at minus 17,000, followed by professional and business services, at minus 16,000. Equally strange was the breakdown by company size: small businesses and large corporations were hiring, while firms with 20–49 employees cut 17,000 jobs at once.

For the euro and the pound, the dollar's weakening became support, and both European currencies strengthened. A weak labor market reduces the Fed's reasons for toughness, especially since the central bank shifted its focus to data after Jackson Hole. Nevertheless, the key resolution will be Friday's official employment report, on which it will depend whether this sentiment holds.

Today in the first half of the day, attention on the single currency will be drawn by the final estimates of the services PMI for the eurozone and the composite PMI, as well as the producer price index. PMI indices are based on company surveys and reflect the state of business activity, with the 50-point mark separating expansion from contraction, with services accounting for the main share of the bloc's economy. The producer price index shows the dynamics of factory gate prices and serves as an early signal of inflation, since rising costs eventually pass through to consumer prices.

Given that inflation in the eurozone has already returned to growth, accelerating to 3.3% in August, a jump in producer prices combined with strong PMI data could strengthen the euro against the dollar. Such a combination would bolster arguments for European Central Bank hawkishness, especially as the market has almost fully priced in a rate hike at the September 10 meeting, and Isabel Schnabel has explicitly spoken about the need for further tightening. If the data confirm this sentiment, EUR/USD will have grounds to rise.

As for the pound, in the first half of the day today, attention will focus on final data for the services PMI in the United Kingdom and the composite PMI. The services index is especially important for the British currency, since this sector accounts for the largest share of the country's economy, and the composite indicator combines services and manufacturing, providing a fuller picture of business activity. Because revised values are being published, the key will be which way preliminary estimates are revised.

An upward revision will reinforce belief in the strength of the services sector and support the pound, especially since it has already returned to growth earlier, whereas a deterioration in estimates will reapply pressure on GBP/USD.

If the data align with economists' expectations, it is better to act on a Mean Reversion strategy. If the data are much higher or lower than economists' expectations, it is best to use a Momentum strategy.

Momentum Strategy (breakout):

For the EURUSD pair

Buying on a breakout of 1.1608 may push the euro toward 1.1623 and 1.1641;

Selling on a breakout of 1.1584 may push the euro down toward 1.1568 and 1.1550;

For the GBPUSD pair

Buying on a breakout of 1.3494 may push the pound toward 1.3512 and 1.3531;

Selling on a breakout of 1.3475 may push the pound down toward 1.3457 and 1.3435;

For the USDJPY pair

Buying on a breakout of 157.69 may push the dollar toward 159.97 and 158.28;

Selling on a breakout of 157.40 may lead to dollar sell-offs toward 157.05 and 156.73;

Mean Reversion Strategy (on pullback):

For the EURUSD pair

I will look to sell after a failed move above 1.1605 on a return below that level;

I will look to buy after a failed move above 1.1583 on a return to that level;

For the GBPUSD pair

I will look to sell after a failed move above 1.3502 on a return below that level;

I will look to buy after a failed move above 1.3475 on a return to that level;

For the AUDUSD pair

I will look to sell after a failed move above 0.7177 on a return below that level;

I will look to buy after a failed move above 0.7161 on a return to that level;

For the USDCAD pair

I will look to sell after a failed move above 1.3844 on a return below that level;

I will look to buy after a failed move above 1.3819 on a return to that level;

Meanwhile, the upcoming Nonfarm Payrolls report looms on the horizon. No matter how much the market now believes in Federal Reserve tightening, the current state of the U.S. labor market cannot be ignored. Recall that traders currently have no explicit signals from the Fed about a planned rate hike. On the contrary, Fed policymakers are not commenting on future rate moves, and Kevin Warsh only speaks about high inflation without the central bank taking coordinated action. But what does all this mean for Bitcoin?

In fact, if the Fed does not tighten policy in 2026, that would be very good for risk assets. And the Nonfarm Payrolls report would significantly reduce the probability of tightening. Remember, the U.S. labor market has been weakening for four months in a row, and the last annual report showed a negative figure that the market interpreted as positive only because it expected an even worse revision. Thus, the weaker tomorrow's Nonfarm Payrolls prove to be, the better for Bitcoin and other crypto assets. It is not guaranteed that the crypto market will react immediately to this report or to the unemployment rate, but in the medium term abandoning tightening would be supportive.

General picture of BTC/USD on 1D

On the daily timeframe Bitcoin continues to form a downtrend. The trend is identified as bearish, and the CHOCH line is at $82,800, where the last Lower High (LH) formed. Only above that level can the downtrend be considered complete. The last and only "bearish" FVG has been pierced and turned into a "bullish" IFVG. Thus, in the future this area will be a POI for long positions. Bitcoin has not yet broken the downtrend, but over the past two weeks the chances of ending the bearish trend have risen sharply. However, there is a high probability of a range forming between $60,000 and $82,500. That would mean price could take liquidity from the last LH and begin a new decline.

General picture of BTC/USD on 4H

On the 4-hour timeframe it is obvious how Bitcoin literally shot upwards. Analyzing the 4-hour timeframe right now is of limited use because the moves are too strong. Therefore, signals in the coming days should be sought on the daily or even weekly timeframe. Nevertheless, one point is important: liquidity was taken from the last peak, which warned traders of a possible decline. The decline has already started, but it cannot be guaranteed that it will be large or prolonged. The only pattern worth noting on the 4-hour chart is the bearish FVG. If a downward impulse begins, the price may resume falling from that pattern.

Trading recommendations for BTC/USD

Bitcoin continues to form a downtrend despite the strong rise last week. We continue to expect a decline toward $57,500 (the 61.8% Fibonacci retracement of the three-year uptrend), although that level has effectively already been tested. We do not believe the downtrend has ended. The current rally of the leading cryptocurrency resembles a pump rather than a bona fide corrective structure, and this is not a sufficient reason to open long positions. The current move most resembles a pump: liquidity may be taken from the $82,850 high, which could trigger a decline and confirm a transition to sideways action. On the 4-hour chart one can expect a new leg down from the last bearish FVG.

Explanations for illustrations

CHOCH — change of character / break of the trend structure.

Liquidity — liquidity such as stop losses and pending orders that market makers use to build positions.

FVG — Fair Value Gap / area of price inefficiency: price moves quickly through such areas indicating absence of one side; price often returns to react to such areas in the direction of the main trend.

IFVG — Inverted FVG. After returning to such an area, price may not react and instead impulsively break through and then test from the other side.

OB — Order block. A candle where a market maker opened positions to collect liquidity and then establish a position in the opposite direction.

The GBP/USD pair fell on Wednesday to the support area of 1.3465–1.3480, which may become the terminal point of the dollar's recent advance. In our view, the recent downward move is primarily a correction triggered by dubious factors. No fundamental or macroeconomic drivers may be responsible for it, since technical corrections often occur independently of news and events. For example, this week none of the macro releases supported the US dollar, yet the dollar continued to strengthen. Perhaps the market has become fully convinced that the Federal Reserve will tighten policy at the next meeting. Or perhaps the explanation is purely technical: the pound had been rising for a long time and was due for a pullback.

Yesterday there were no notable events in the UK, while the US published the ADP employment report. According to ADP, private sector employment rose by just 38,000 in August — below even the lowest forecasts and below last month's figure. Thus, even the ADP report did not support the dollar. Bear in mind that ADP has no reliable correlation with the official Nonfarm Payrolls, so Friday's data could still surprise.

Technically, the pound continues to form a downward trend, but this week much will depend on US labor-market, unemployment, and business-activity data. A further decline is possible, but remember that the US economy and labor market have shown relatively weak readings in recent months.

On the 5-minute timeframe on Wednesday, one buy signal formed. The price bounced from the 1.3465–1.3480 area, allowing long positions and suggesting a potential rise in the pound on Thursday.

COT Report

COT reports for the pound show that non-commercial traders have dominated the market with short positions for several months. The net position is negative despite the long-term uptrend. Given events in the Middle East, it is unsurprising that demand for the dollar was strong in the first half of 2026. The war is formally over, but the conflict persists; geopolitics is the main near-term support factor for the US dollar. However, until the pound consolidates below the trend line, we would not expect a strong decline in GBP/USD.

In the long run, the dollar is expected to weaken due to Trump's policies, which is visible on the weekly timeframe. The trade war will persist in one form or another for a long time, and Trump's policies are aimed directly and indirectly at weakening the US currency. The long-term uptrend remains valid as shown by the trend line; price recently retested that line and bounced. According to the latest COT (August 25), the "Non-commercial" group opened 16,300 BUY contracts and 6,200 SELL contracts, so the net position rose by 10,100 contracts during the week.

GBP/USD Analysis 1H

On the hourly timeframe, the GBP/USD pair continues to form a new downward trend, as indicated by the trendline. But in the long term, the British pound still looks set to rise. We still do not see strong reasons for a prolonged, powerful rise in the U.S. currency, and this week, important overseas reports could create many problems for the dollar. However, technically the decline looks quite natural.

For September 3 we highlight the following important levels: 1.3042–1.3050, 1.3096–1.3115, 1.3179–1.3187, 1.3301–1.3309, 1.3369–1.3377, 1.3465–1.3480, 1.3588, 1.3671–1.3681. The Senkou Span B line (1.3596) and Kijun-sen (1.3535) may also provide signals. It is recommended to set the stop-loss to break even after the price moves 20 pips in the correct direction. Ichimoku lines may shift during the day, which should be taken into account when determining trading signals.

On Thursday, the UK will publish a second-estimate services PMI for August (not market-moving), and the U.S. will release the ISM services index and secondary initial jobless claims. We believe the market may react only to the ISM services index.

Trading Recommendations

Today, traders may open short positions targeting 1.3369–1.3377 if price consolidates below the 1.3465–1.3480 area. Long positions can be opened today in case of a rebound from the 1.3465–1.3480 area with targets at 1.3535 and 1.3588.

Explanations for illustrations

• Price support and resistance levels (resistance/support) — thick red lines where movement may end; not necessarily direct trade signals.
• Kijun-sen and Senkou Span B — Ichimoku lines transferred from the 4-hour to the hourly timeframe; they are strong lines.
• Extreme levels — thin red lines from which price has previously bounced; they are sources of trade signals.
• Yellow lines — trendlines, trend channels, and other technical patterns.
• Indicator 1 on COT charts — size of net positions for each trader category.

The EUR/USD pair failed to extend its downward move on Wednesday, but it did refresh its most recent local low. The downtrend remains intact, as shown by the trendline, so the dollar can feel relatively calm and stable until that trendline is broken. That said, there is little real cause for further (even local) dollar strength. The decline began after a month of growth, so this is primarily a correction. This week, none of the U.S. macro releases have supported the dollar. Tomorrow, the most important reports will arrive — Nonfarm Payrolls and the unemployment rate for August. The market effectively ignored last Friday's weak annual Nonfarm report. The only thing currently allowing the dollar to rise is market belief in Federal Reserve tightening in September. But belief is not a concrete fact. In our view, the chances of a September rate hike remain low, and Friday's labor data could bury hopes for tightening. Nevertheless, the dollar can remain more or less stable for now.

Technically, the pair continues the downward trend supported by its trendline. Thus, the decline may continue in the near term. Several more important reports will be released this week, but the market already shows that it is mainly focused on the Nonfarm payrolls.

On the 5-minute timeframe, several trade signals formed on Thursday. First, the pair bounced from 1.1585 from below, then it breached that level. In both cases, the price failed to move even 15 pips in traders' favor. That is because market volatility has been extremely weak over the past month. On average, the pair moves 30–40 pips per day and only occasionally shows medium-strength moves.

COT Report

The latest COT report is dated August 25. On the weekly chart, it is clear that net positions of non-commercial traders have turned bearish and have fallen markedly in 2026 due to geopolitical events. Traders have been reducing exposure to the euro in favor of the U.S. dollar in recent months. Donald Trump's policy has not changed, and for a time the dollar acted as a reserve currency.

We still do not see fundamental factors that support sustained dollar strength. The war in the Middle East made the dollar temporarily very attractive, but when that factor expires, markets should revert to normal — and that process may already be underway. In the long run, the euro could fall as low as the $1.08 trend line, but the multi-year uptrend remains relevant, and the pair has not approached that line despite recent months of dollar growth.

The positions of the red and blue lines on the COT indicator indicate approximate parity between bulls and bears. Over the last reporting week, the number of long positions in the "Non-commercial" group rose by 2,700 while shorts decreased by 20,000. Accordingly, the net position increased by 22,700 contracts for the week.

EUR/USD Analysis 1H

On the hourly timeframe, the EUR/USD pair continues to form a downward trend. The situation in the Middle East remains tense and shows no improvement, but that alone is not enough to fuel a new strong rally for the dollar. Kevin Warsh's remarks and the annual Nonfarm Payrolls supported the dollar, yet we see few solid reasons for sustained dollar strength. This week the dollar's advance looks more like a technical correction.

For September 3, we highlight the following trading levels — 1.1234, 1.1274, 1.1362–1.1368, 1.1461–1.1473, 1.1536–1.1542, 1.1585, 1.1657–1.1665, 1.1750–1.1760, 1.1786, 1.1830–1.1837, as well as the Senkou Span B line (1.1639) and Kijun-sen (1.1613). Ichimoku lines may shift during the day, so take that into account when determining trade signals. Remember to move Stop Loss to break even after a 15-pip move in your favor to protect against false signals.

On Thursday, second-estimate services PMIs will be published in European countries — these are secondary releases and are unlikely to move the market. Pay special attention to the ISM services index in the U.S.; however, at least until Friday, the market is biased toward buying the dollar and tends to ignore weak U.S. data.

Trading Recommendations

Today, traders may consider short positions targeting 1.1536–1.1542 if price consolidates below 1.1585. A fresh rebound from 1.1585 would allow opening long positions targeting 1.1613 and 1.1639.

Explanations for illustrations

• Price support and resistance levels (resistance/support) — thick red lines where movement may end; not necessarily direct trade signals.
• Kijun-sen and Senkou Span B — Ichimoku lines transferred from the 4-hour to the hourly timeframe; they are strong lines.
• Extreme levels — thin red lines from which price has previously bounced; they are sources of trade signals.
• Yellow lines — trendlines, trend channels, and other technical patterns.
• Indicator 1 on COT charts — size of net positions for each trader category.

The GBP/USD currency pair continued moving south on Wednesday. The worst part of this move is that, in the near term, the British pound could again fall toward the 1.3200 area for no obvious reason. This article is not about local macro releases that do not affect the overall trend. It is about global processes and the technical picture.

Looking at the daily chart and zooming out substantially makes it clear that, since around June last year, the GBP/USD pair has been trading in a range. Yes, a range is not necessarily a matter of days or weeks — sometimes it can last for years. Look closely at the chart below. In the past 14 full months, the pound has left the 1.3150–1.3750 band only twice, and both times for literally a few days. What is that if not a sideways channel? Suppose we are dealing with a long-term range. It is then reasonable to assume that global factors led to the formation of this range. The market does not know which direction to trade next, so it makes no sustained attempt to leave the channel. And what is the most important global factor over the past year? Uncertainty.

Global uncertainty is the key reason why neither the dollar, the euro, nor the pound can start a trend. Market participants do not understand what to expect next. A war with Iran could last years — who can say it won't? Look at events in Ukraine, which many initially expected to be over in a couple of months. At the same time, the Iran conflict could end at any moment; nobody knows when Trump might wake up in a good mood and decide that it is enough.

Geopolitical uncertainty breeds monetary uncertainty. Because inflation readings depend on oil prices, which swing wildly and can collapse or soar, the market cannot predict how central banks will act. With the European Central Bank or the Bank of England, you can still form a reasonably coherent forecast, but with the Federal Reserve it has become almost impossible. Too many factors must be taken into account, and Kevin Warsh's new approach to Fed communications has removed almost all market cues.

And then there is the Trump factor. No one knows when the U.S. president will decide to start a new war, see an injustice to America somewhere, sack another Fed official, or launch a new trade war. The market does not know what to expect from Trump and, until he causes fresh trouble, prefers not to force events in the FX market. As 2026 showed, Trump can make decisions that cause the dollar to strengthen — a result few expected at the start of the year. But Trump started a conflict with Iran, and the dollar strengthened, even if the White House did not want that outcome.

Therefore, the pound may fall again to the 1.3200 area simply because the long-term flat persists.

The average volatility of the GBP/USD pair over the last 5 trading days is 48 pips, which is considered "low" for the pound/dollar. On Thursday, September 3, we therefore expect the pair to move within a range bounded by 1.3449 and 1.3545. The higher channel of the linear regression has turned upward, indicating an uptrend. The CCI indicator has entered oversold territory, signaling a possible end to the correction.

Nearest support levels:

S1 – 1.3489

S2 – 1.3428

S3 – 1.3367

Nearest resistance levels:

R1 – 1.3550

R2 – 1.3611

R3 – 1.3672

Trading recommendations:

The GBP/USD pair maintains an uptrend. Trump's policies will continue to pressure the U.S. economy, so we do not expect long-term dollar strength. 2026 has been positive for the dollar due to geopolitics, but every story ends. On the weekly timeframe, the pair remains flat between 1.3150 and 1.3780 within a four-year uptrend, allowing for the expectation of continued pound appreciation in the medium term. Consider long positions with targets of 1.3611 and 1.3672 when price is above the moving average. If the price is below the moving average line, consider trading the downside with targets at 1.3449 and 1.3428.

Explanations for illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is strong.
• The moving average line (settings 20,0, smoothed) defines the short-term tendency and the direction in which trading should be conducted.
• Murray levels are target levels for moves and corrections.
• Volatility levels (red lines) indicate the likely price channel over the next 24 hours, based on current volatility.
• The CCI indicator — entry into the oversold area (below -250) or overbought area (above +250) signals an approaching trend reversal.

The EUR/USD currency pair continued its sluggish decline on Wednesday, with minimal volatility. It feels like the market is doing someone a favor right now. You can't completely stop opening new trades, but you also very much don't want to open new trades. So the market moves just for form's sake, to tick a box so no one can say it's standing still. But you can't fool the volatility indicator. If the pair moves only 40 pips from low to high in a day and this repeats day after day, the conclusion is obvious: traders don't have much desire to trade right now. The question is why.

The answer, in fact, is painfully simple. There are a huge number of factors that theoretically influence market sentiment, and you can't be certain which factors truly matter to traders and which don't. Take one of 2026's key themes — geopolitics. Guns have thundered again in the Middle East, rockets have been launched, and the rhetoric of the leaders of Iran and the U.S. is full of threats. That suggests a new escalation that could, in theory, support the safe-haven dollar. But at the same time, traders know full well that Iran and the U.S. are at war today, and tomorrow there may be a truce or a pause. Today Trump threatens to destroy Iran; tomorrow he announces a deal is near. Moreover, the dollar's rise amid geopolitical turmoil is not simply due to the conflict itself but to capital fleeing the region and its owners seeking to move assets into the most liquid currency — the dollar. So ask who among capital owners hasn't already fled the Middle East? That reduces the unique safety premium for the dollar.

Consider the Federal Reserve's monetary policy — it's even more confusing. Kevin Warsh has repeatedly warned that current inflation is unacceptable, and markets repeatedly interpret his words as a precursor to future tightening. Yet look at the macro data and serious doubts emerge about a rate rise before year-end. Nonfarm Payrolls reports keep disappointing; the economy is slowing, inflation is easing. Why would the Fed raise rates, especially given that Fed Chair Kevin Warsh was appointed by Donald Trump, who has repeatedly demanded lower rates? So many contradictions remain. The market keeps oscillating between expecting tightening and not expecting it.

Remember also the U.S. Treasury's decision to increase bond buybacks. Effectively, this is a form of quantitative easing — albeit without printing additional dollars — which, in any case, eases. So the Treasury loosens while the Fed tightens? Does that mean the Fed won't raise rates? And if the Fed does not tighten, what about inflation that could accelerate in August and September?

The average volatility of the EUR/USD currency pair over the last 5 trading days as of September 3 is 46 pips and is characterized as "medium." We expect the pair to move between 1.1546 and 1.1638 on Thursday. The higher channel of the linear regression has turned upward, indicating the start of an upward trend. The CCI indicator entered the oversold area, warning of a possible end to the correction.

Nearest support levels:

S1 – 1.1536

S2 – 1.1475

S3 – 1.1414

Nearest resistance levels:

R1 – 1.1597

R2 – 1.1658

R3 – 1.1719

Trading recommendations:

The EUR/USD pair continues its upward trend on the 4-hour timeframe, which may mark the beginning of a new leg of a global uptrend on higher timeframes. The global fundamental backdrop for the dollar remains negative, but in 2026, geopolitics first, and then the Fed's hawkish stance, provided strong support for the US currency. However, at present, those factors are no longer supporting the dollar. With the price below the moving average, consider short positions on corrective grounds, targeting 1.1546 and 1.1536. Above the moving average line, long positions remain relevant with targets of 1.1658 and 1.1719.

Explanations for illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is strong.
• The moving average line (settings 20,0, smoothed) defines the short-term tendency and the direction in which trading should be conducted.
• Murray levels are target levels for moves and corrections.
• Volatility levels (red lines) indicate the likely price channel over the next 24 hours, based on current volatility.
• The CCI indicator — entry into the oversold area (below -250) or overbought area (above +250) signals an approaching trend reversal.

There are relatively few macroeconomic publications scheduled for Thursday. Most are completely secondary. For example, Germany, the UK, the Eurozone and the US will publish second-estimate services PMIs for August. These releases are unlikely to provoke any notable market reaction. In the US, initial jobless claims and the ISM services index will be published. The ISM services index is the most important report of the day that traders may react to — but even here a strong reaction is unlikely.

Analysis of fundamental events:

Among Thursday's fundamental events are speeches by Federal Reserve Monetary Policy Committee members Beth Hammack and Christopher Waller. Recall that the new Fed Chair Kevin Warsh has tightened guidance on officials' public communications, and they are now prohibited from commenting on future changes to the policy rate. Therefore, we strongly doubt that Hammack or Waller will provide a clear forecast for the September meeting. The market is left guessing what the Fed will decide in September, and forecasts for that event keep changing.

The geopolitical backdrop remains worrying. The US and Iran are not currently negotiating; the Strait of Hormuz remains closed or partially closed; the Yemeni Houthis continue to blockade Saudi Arabia. Donald Trump has decided to carry out an unprecedented economic campaign aimed at weakening Iran and threatens to sanction any countries that in any way interact with it. So far, however, no one has publicly supported Trump's plan to "destroy" Iran, and whether it will be implemented is unknown. What is known is that the US carried out its first strikes in a month on launch sites near the Strait of Hormuz, to which Iran responded by announcing a military operation against the US and its regional allies. Tensions in the Middle East are heating up again.

Overall conclusions:

During the penultimate trading day of the week, currency pairs may trade rather quietly again. The euro can be traded today from the 1.1584–1.1594 area, and the pound from the 1.3456–1.3476 area. Overall, declines in the euro and the pound may continue because technical trends for both pairs have turned downward — but tomorrow, the US Nonfarm Payrolls and unemployment rate will be released, and those reports can strongly affect market sentiment and views of the dollar.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are positioned too close to each other (within 5-20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance are levels that serve as targets when opening buy or sell trades, or as sources of signals.

Red lines indicate channels or trend lines that illustrate the current trend and show the preferred direction for trading.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly influence the movement of currency pairs. Therefore, during their release, trading should be approached with utmost caution, or traders should exit the market to avoid sudden reversals against the preceding movement.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.

1H chart of the GBP/USD pair

The GBP/USD pair continued its downward movement on Wednesday, although there were few reasons for this beyond technical factors. A few days ago, the price left the ascending channel, so the pound may continue to fall on technical grounds. However, there is no real fundamental or macroeconomic support for the dollar. One could argue that geopolitics in the Middle East has worsened again and that Kevin Warsh once more spoke about high inflation in the U.S., which increases the dollar's appeal as a safe-haven asset and raises the probability of Federal Reserve tightening. We believe, however, that this is not entirely the case. The current state of the U.S. labor market does not, in our view, justify a rate hike, and Warsh has been talking about high inflation all summer, yet the Fed has not taken hawkish steps. Yesterday only one report was published — the ADP employment report — and, as has been typical this week, it came in weaker than forecasts and could not have driven dollar strength. Nevertheless, the American currency is still retracing gains.

5M chart of the GBP/USD pair

On the 5-minute timeframe on Wednesday, one buy signal was formed. At the start of the U.S. session, the price bounced from the 1.3456–1.3476 area, allowing novice traders to open long positions. The pound failed to extend the upward move, but another bounce from that area may occur today.

How to trade on Thursday:

On the hourly timeframe, GBP/USD remains in a downward corrective trend. In our view, the pound should continue to rise in the medium term, but it is currently in correction. On the weekly timeframe, the move from the lower bound of the sideways channel toward the upper bound continues, and that movement may not yet be complete. Friday improved sentiment for the U.S. currency, but that support is unlikely to last.

On Thursday, novice traders may consider short positions targeting 1.3380–1.3386 if price consolidates below the 1.3456–1.3476 area. Long positions can be opened targeting 1.3587–1.3598 if the price bounces from the 1.3456–1.3476 area.

On the 5-minute timeframe, consider trading the following levels: 1.3259–1.3267, 1.3319–1.3331, 1.3380–1.3386, 1.3456–1.3476, 1.3587–1.3598, 1.3631–1.3641, 1.3695, 1.3741. On Thursday, the UK will publish the second-estimate services PMI for August (a secondary release). In the U.S., the ISM services index — a fairly important report — will be released.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are positioned too close to each other (within 5-20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance are levels that serve as targets when opening buy or sell trades, or as sources of signals.

Red lines indicate channels or trend lines that illustrate the current trend and show the preferred direction for trading.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly influence the movement of currency pairs. Therefore, during their release, trading should be approached with utmost caution, or traders should exit the market to avoid sudden reversals against the preceding movement.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.

1H Chart of the EUR/USD Pair

On Wednesday, the EUR/USD currency pair tried to continue downward after breaking the ascending trend line, but it is now rather difficult for the dollar to keep rising. Recall that global factors continue to support every currency except the U.S. dollar, and even over the past two weeks (during which the dollar strengthened) there were virtually no solid reasons for its rise. For example, this week the U.S. released four relatively important reports on the labor market and business activity, and none of them supported the American currency. Thus, the current strengthening of the dollar is purely corrective, driven by technical factors and by the market's belief in Federal Reserve tightening in September. Last Friday, Fed Chair Kevin Warsh once again spoke about high inflation in the U.S., which the market interpreted as a signal that tightening may be forthcoming. That is why the dollar is rising, despite the weak labor-market indicators.

5M Chart of the EUR/USD Pair

In the 5-minute timeframe on Wednesday, four trading signals formed, but traders spent most of the day indecisive about direction. First, the price bounced three times from the 1.1584–1.1594 area but failed to move even 15 pips in the desired direction. Later, there was a consolidation above 1.1584–1.1594, but the pair could not continue higher either.

How to trade on Thursday:

On the hourly timeframe, EUR/USD remains in a correction after a month of growth. Considering all recent events, we believe the euro should continue to rise steadily even without local support. The U.S. currency currently has no growth drivers other than the market's near-religious belief in a Fed rate hike.

On Thursday, novice traders may consider short positions targeting 1.1527–1.1531 if price settles below the 1.1584–1.1594 area. Long positions can be opened on a rebound from 1.1584–1.1594, targeting 1.1655–1.1665.

On the 5-minute timeframe, consider these levels: 1.1366–1.1377, 1.1461–1.1474, 1.1527–1.1531, 1.1584–1.1594, 1.1655–1.1665, 1.1745–1.1754, 1.1830–1.1837. On Thursday, the Eurozone and Germany will publish second-estimate services PMIs, and in the U.S., claims for unemployment benefits and the ISM services index will be released. We recommend paying particular attention to the ISM services index.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The shorter the time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are positioned too close to each other (within 5-20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance are levels that serve as targets when opening buy or sell trades, or as sources of signals.

Red lines indicate channels or trend lines that illustrate the current trend and show the preferred direction for trading at the moment.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly influence the movement of currency pairs. Therefore, during their release, trading should be approached with utmost caution, or traders should exit the market to avoid sudden reversals against the preceding movement.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.

Yields on 10- and 20-year U.S. government bonds continue to rise despite the Treasury Department's best efforts. Briefly, why did this happen and what risks does it pose for the U.S. economy and budget?

Opinions vary among analysts, but I believe Donald Trump's policies, especially on the international front, have prompted many foreign investors to shy away from U.S. securities. Demand for these bonds has fallen sharply, so yields have risen to attract new buyers. Demand remains low, so yields keep climbing.

Why is that dangerous? Higher yields increase U.S. government interest payments. In simple terms, the U.S. government must borrow at ever-higher rates, which adds pressure on the budget and raises overall public debt. Last week, U.S. national debt exceeded $40 trillion. Annual interest payments on the debt passed $1 trillion. It is obvious: the higher yields climb, the larger future interest bills will be — and we are talking about high interest costs that may need to be serviced for decades.

It is also easy to infer that total U.S. debt will continue to rise. I don't know whether this will lead to default, but the attractiveness of the U.S. economy for foreign investors is declining. As the appeal of the U.S. economy falls, so does the appeal of the dollar. That is another reason I would currently expect the dollar to weaken rather than strengthen. Yet the market is now fixated on the Federal Reserve's September meeting and seems convinced the Fed will raise the policy rate. That view supports demand for U.S. currency and has forced revisions to the wave counts for EUR/USD and GBP/USD. Now both pairs could fall several hundred pips further — but, in my view, such a move should be backed by substantial news flow. Personally, I don't think the dollar currently has that kind of news support.

It currently has two potential positives: possible escalation in the Middle East and a possible Fed decision to raise interest rates. Neither event is certain to occur. Therefore, I prefer to avoid new downward waves that contradict virtually everything else right now.

Wave count for EUR/USD:

Based on my EUR/USD analysis, I conclude the instrument remains within a corrective downward segment of the trend. That segment is taking on an increasingly complex shape. It appears this segment may form an A–B–C–D–E structure. If that is indeed the case, the decline should continue toward targets below the low of wave C — 1.1325. If so, now would be a good time to build short positions, since the instrument has the potential to fall by at least 350 pips.

Wave count for GBP/USD:

The wave picture for GBP/USD has become relatively clear but could still become more complex. The charts show a distinct corrective A–B–C structure that looks complete. Therefore, I expect an ensuing impulsive set of upward waves. However, the current wave labeling on EUR/USD raises doubts. If the euro develops a five-wave downward structure, then GBP/USD could also fall toward the 1.31 area. In that case, the pound's wave count would need to be revised and would take a different form and structure.

Key principles of my analysis:

1. Wave structures should be simple and readable. Complex structures are harder to trade and often change.
2. If you are not confident about what the market is doing, it's better to stay out.
3. There is no such thing as 100% certainty in direction. Always use protective stop-loss orders.
4. Wave analysis can and should be combined with other types of analysis and trading strategies.

However, the quality of that growth raises questions. The improvement in the trade balance occurred against a 1.6% deterioration in terms of trade due to a sharp rise in imported oil prices. That means Australia is paying more for imports, which eats into the benefits from export revenues.

Business activity in August continued to expand for the third consecutive month (composite PMI at 52.5), but growth momentum has slowed. Producer spending is rising, and input-cost inflation has accelerated, especially in manufacturing. Despite higher costs, companies are reluctant to pass them on to consumers — the output-price index rose at the slowest pace since the start of the year. This points to margin compression and weak demand confidence.

The labor market is holding up for now. Employment has risen in 19 of the past 20 months, although hiring pace is the weakest in three months. The Reserve Bank of Australia forecasts unemployment will gradually rise toward 4.5–4.8%.

The RBA's response to the current situation is a "hawkish pause." In August, the cash rate was left at 4.35%, with the Bank acknowledging that the current rate is already restraining the economy and that further slowing may be acceptable. Inflation risks remain skewed to the upside, and that nuance prevents markets from fully ruling out another hike. All these forecasts assume the Middle East conflict will be resolved and energy prices will normalize; if that does not happen, inflation could be higher and more persistent.

The net short position on AUD/USD decreased by $0.43bn over the reporting week to -$2.7bn; the implied price remains above the long-term average.

Despite everything, the Aussie continues to climb, indicating internal strength even after Warsh's hawkish comments or another escalation in the Persian Gulf. If tensions persist, consolidation may begin. If US inflation prints come in softer than expected, weakening the dollar, AUD could test 0.7200 and even 0.7277 (this year's high).

If geopolitical tensions rise further and the Federal Reserve continues to send hawkish signals, a retracement toward the psychological 0.7000 level could form — but for now the trend remains bullish.

So, following Wednesday's meeting, the RBNZ raised the policy rate by 25 basis points — from 2.50% to 2.75%. The decision was taken by consensus, i.e., unanimously: all members of the Committee supported the tightening. This is a key difference from the May meeting, when votes were split 3–3, and Governor Anna Breman's decisive vote kept the rate unchanged.

At the September meeting, the Committee showed unanimity on the rate hike, but divisions remained within the Committee regarding inflationary risks. Four RBNZ members said those risks are skewed to the upside, while the others called them balanced, even as they emphasized significant risks to economic activity.

As a result, the RBNZ said the future path of the policy rate is not predetermined — further decisions will depend on incoming data and the balance of medium-term inflation risks. Moreover, the OCR forecast itself was practically unchanged from May's projection despite the implemented tightening. The central bank expects the rate to be around 2.8% by the end of this year and 3.15% by the end of 2027. That effectively corresponds to one more 25-basis-point hike in December, assuming a pause at the October meeting.

Those relatively cautious projections acted as a cold shower: market participants who had been pricing a more aggressive tightening cycle — possibly pushing the rate toward 3.5% — must now materially lower their expectations.

At the same time, the inflation picture does not look unequivocally hawkish. Yes, headline CPI accelerated year-on-year to 4.1%, but the main driver of that rise was higher fuel and fuel-related prices amid the ongoing Middle East conflict. Inflation excluding motor fuels fell to 2.9%; most core inflation indicators remain inside the 1–3% target range, and inflation expectations over the one- to two-year horizon have declined.

It is also worth noting that at the September meeting, the central bank spoke in some detail about the weaknesses of the national economy. Committee members noted that Q2 GDP growth was sluggish, unemployment remains elevated, consumer spending is weak, and spare capacity (especially in the labor market) remains significant. As a result, the RBNZ acknowledged the risks of a decline in economic activity as "material."

The New Zealand dollar came under significant pressure for a simple reason: market participants expected more hawkish and clearer signals from the central bank about the future path of rates. Instead, the RBNZ effectively signaled a likely pause in October while leaving the door ajar for further tightening in December. The classic trading adage "buy the rumor, sell the fact" therefore played out. For NZD/USD, this is especially sensitive to changes in the interest-rate differential — US yields are rising faster than New Zealand yields, so the carry advantage that might have supported the kiwi is narrowing. An additional blow to NZD/USD was the broad strengthening of the greenback: the escalation in the Middle East sparked demand for safe-haven assets, pushing oil prices higher and strengthening expectations of Fed rate hikes before year-end.

From a technical standpoint, the situation is mixed. On the 4-hour chart, NZD/USD bears have broken the 0.5830 support (the lower Bollinger Band on the daily chart) and are trading below all Ichimoku lines, which have produced a bearish "Parade of Lines" signal. However, on the daily chart, sellers have not managed to close decisively below the key support at 0.5800 (the upper boundary of the Kumo cloud, coinciding with the daily lower Bollinger Band). That is the critical and largely decisive level. If NZD/USD buyers can hold above this target, short positions will lose relevance (including due to profit-taking). In that case, a retracement to the 4-hour middle Bollinger Band — roughly the 0.5890 area — is likely. Conversely, a confident break of 0.5800, followed by consolidation below it, would materially increase the probability of further declines toward 0.5750 and lower.

The next 24 hours may be decisive: the balance will tilt in favor of either buyers or sellers depending on whether bulls can defend 0.5800. Therefore, it is sensible to adopt a wait-and-see stance on the pair now. A reliable bounce from that level will be the first signal in favor of an upward correction, whereas a break and close below it will significantly strengthen bearish sentiment.

The wave count on the 4-hour chart for EUR/USD is becoming more complex. There is still no question of canceling the upward section of the trend (lower chart), which began in January last year. On the contrary, we saw a complete corrective A-B-C structure, which has most likely been completed. We never got the convincing wave 5 of C that we were expecting. This wave took a truncated form, which also occurs from time to time. Let me remind you that classical wave structures are generally found only in textbooks. In real life, traders and analysts should be more flexible in their analysis.

Unfortunately, the wave count may once again become more complex at present. Wave C may take a three-wave form, the wave following it will be identified as wave D, and the entire trend section beginning on January 27 will take the form of a five-wave corrective A-B-C-D-E structure. If this assumption is correct, wave D is taking a three-wave form, and on August 21, EUR/USD entered the phase of forming wave E, whose low should be below the low of wave C — 1.1325.

None of the reports this week supported the dollar. But the dollar is rising.

The EUR/USD exchange rate declined by 15 basis points during Wednesday's trading. Market movements are currently extremely strange because demand for the U.S. currency has been steadily increasing this week, even though there has not been a single economic event in favor of the U.S. dollar. The week's economic hit parade began with the inflation report from the European Union. Despite the fact that the Consumer Price Index rose to 3.3%, significantly increasing the likelihood of an ECB monetary policy tightening as early as September, the market did not consider the report sufficient reason to buy the euro. Next came the U.S. ISM Manufacturing PMI, which came in below market expectations but also failed to trigger any strengthening of the euro. The JOLTS report also failed to please traders with the number of job openings in the United States. Today, the ADP report was released, and its figure also came in below market expectations — just 38,000. This figure is extremely weak in itself, so I am not even interested in what level the forecasts were at. In any case, the forecasts were higher.

This means that all the reports this week supported the European currency, yet for some reason the dollar is rising. This phenomenon can only be explained by a sharp increase in expectations of a hawkish Fed decision at the September meeting. And hawkish expectations began to rise after Kevin Warsh's speech at the Jackson Hole symposium. In my view, the market is once again mistaken, and sentiment may deteriorate sharply as early as Friday, following the release of unemployment and payroll data. However, there is nothing preventing market participants from constantly changing their expectations. Let me remind you that a month ago, the probability of a Fed rate hike in September was estimated at 70–80%, a week ago it did not exceed 33%, and now it is back to almost 70%.

Overall Conclusions

Based on my EUR/USD analysis, I conclude that the instrument remains within a corrective downward section of the trend (lower chart), which is becoming increasingly complex. It appears that this trend section will take the form of A-B-C-D-E. If this is indeed the case, the decline in prices will continue, with targets located below the low of wave C — 1.1325. If so, now is a good time to establish short positions, as the instrument has downward potential of at least 350 points.

On the higher timeframe, an upward section of the trend can be seen, after which a corrective wave sequence began to form. The A-B-C structure is presumably complete. If this is the case, a new impulsive upward section of the trend has begun to form.

The main principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often involve changes.
2. If there is no confidence about what is happening in the market, it is better not to enter it.
3. There can never be 100% certainty about the direction of a move. Do not forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

The EUR/USD pair declined for six days, but the bears' advance may end here. Overall, it can be said with confidence that the bears truly attacked only last Friday, when FOMC President Kevin Warsh first gave a speech, followed by a revision of the annual Nonfarm Payrolls data. Neither of these events was unequivocally bearish; nevertheless, they can be interpreted that way if one chooses to do so. As I wrote earlier, the Nonfarm Payrolls report could have been much worse than it ultimately was, while Warsh's speech could once again be interpreted as containing hawkish tones. However, if we assess the situation objectively, I see no reason for the dollar to rise even on Friday. The Nonfarm Payrolls report showed a negative figure, while Kevin Warsh merely spoke about high inflation but did not promise to raise interest rates or take any specific measures. The price of the European currency fell to the base of imbalance 21, and the decline has ended there for now. From here, everything will depend primarily on the U.S. labor market and unemployment data due to be released on Friday.

Overall, in my view, the fundamental backdrop continues to fully support the bulls. First, any chart clearly shows that the European currency began its rise from relatively low levels, compared with the average price over the past year. This means that it still has upward potential. Second, the market continues to doubt that the FOMC will tighten monetary policy in September, regardless of what statements Warsh makes. Third, U.S. economic data has recently been a source of disappointment. Fourth, geopolitics no longer supports the bears or the dollar. Fifth, the ECB may implement another monetary policy tightening this autumn. Sixth, the U.S. Treasury has decided to increase its purchases of long-term bonds, which reduces demand for the dollar. Seventh, a new trade war between the United States and Canada and between the United States and China could begin in the near future. Eighth, the U.S. labor market is contracting, which could put an end to Warsh's hawkish initiatives. Thus, I currently see no reason whatsoever for a bearish advance.

The latest U.S. labor market data showed weak figures, inflation showed a slowdown, and GDP showed a decline in its growth rate. These three factors make me doubt that the FOMC will raise rates not only in September but also before the end of the year. In my view, the bears' only opportunity at present lies in a new escalation in the Middle East.

The current chart picture points to the continuation of bullish momentum. The price has completely filled the latest bullish imbalance 21 and may even touch the previous bullish imbalance 20. The combined reaction to these two patterns could bring the bulls back into the market, and the upward movement will resume. If one or both patterns are invalidated, the bears will then be able to launch their own advance, but even in that case they will need fundamental support. Where could they get it?

There was virtually no economic backdrop on Wednesday. The only report worth noting, ADP in the United States, did not trigger any market reaction, as traders are once again betting on Nonfarm Payrolls, which will be released on Friday. For imbalance 20 to be invalidated, Nonfarm Payrolls would finally need to show a strong figure.

There are still a huge number of reasons for the bulls to attack in 2026, and even the outbreak of war in the Middle East has not reduced their number. Structurally and globally, Trump's policies, which led to a significant decline in the dollar last year, have not changed. At present, I see no significant factors supporting the U.S. currency, despite the FOMC's formally hawkish stance. Geopolitics, which supported demand for the U.S. currency for most of the first half of 2026, is no longer doing so. The conflict in the Middle East remains unresolved, but there have been no new hostilities from either Iran or the United States.

News calendar for the United States and the European Union:

• Germany — Services Purchasing Managers' Index (07:55 UTC).
• European Union — Services Purchasing Managers' Index (08:00 UTC).
• United States — Change in Initial Jobless Claims (12:30 UTC).
• United States — ISM Services Purchasing Managers' Index (14:00 UTC).

On September 3, the economic events calendar contains four entries, among which I would highlight the ISM index. The economic backdrop may affect market sentiment in the second half of the day on Thursday.

EUR/USD Forecast and Trading Tips:

In my view, the pair remains in the process of forming a bullish trend that paused for an entire year. The fundamental backdrop shifted sharply in favor of the bears six months ago, but the trend itself cannot be considered canceled or complete. In the long term, I would say that the pair is range-bound. However, a range does not invalidate the broader trend. Thus, the bulls may well continue their advance after two liquidity sweeps of clearly defined lows. At present, bullish traders have an excellent support level in the form of imbalance 20, where a new bullish signal may form. I consider 1.1797 and 1.1850 to be the upward targets for the European currency.