Central Bank Rate Dynamics

Interestingly, ahead of the Policy Board meeting, Wells Fargo and Citigroup warned that the yen would weaken sharply because market expectations for aggressive monetary policy tightening by the BoJ were excessive. Despite the increase in the overnight rate and Kazuo Ueda's statement that another rate hike should not be ruled out at any subsequent meeting, USD/JPY moved sharply higher.

Toichiro Asada and Ayano Sato voted against the Bank of Japan's decision to continue its monetary tightening cycle. Both were appointed to their positions by Sanae Takaichi. The market interpreted their dissent as a sign that the prime minister was unwilling to support monetary policy tightening. If these "doves" continue to hinder the BoJ, the previous pace of rate hikes, once every six months, could return, allowing USD/JPY to continue its rally.

The unexpected slowdown in Japanese consumer price growth from 1.9% to 1.8% in August, the first decline in four months, also provides little reason for yen supporters to be optimistic. Although Kazuo Ueda says that inflation risks exceeding the 2% target, meaning that the BoJ should remain vigilant and avoid delaying an aggressive rate hike, the slowdown in CPI growth is a strong argument for gradual monetary policy tightening. This puts pressure on USD/JPY bears.

Japan's Inflation Dynamics

The higher the pair rises, the greater the risk of renewed verbal and currency interventions. It also increases the likelihood of dissatisfaction from the United States, where Scott Bessent justifies intervention concerns by pointing to the risk of Treasury bond sales by Japan, the largest holder.

Thus, the USD/JPY rally is the result of a combination of a more aggressively inflation-focused Federal Reserve and disappointment with the Bank of Japan's actions and rhetoric. If its monetary tightening cycle proceeds more slowly than markets expected, the wide interest rate differential and the use of the yen as a funding currency in carry trade operations will allow the pair under analysis to continue moving upward, regardless of how much the Japanese government and central bank would prefer otherwise.

Technically, the daily USD/JPY chart shows a breakout of two of the three dynamic resistance levels represented by moving averages. This allows traders to consider buying the pair while its price remains above the support provided by the pivot level at 156.95.

At present, we are dealing with a structure that may take a five-wave form. We have seen a clear three-wave correction that can be identified as wave 2 or B. Therefore, the formation of a new impulsive structure began after it. The first wave of this structure turned out to be quite extended and contains no internal corrective waves. Therefore, a corrective wave may begin in the near future. Once it is completed, the decline in EUR/USD may resume, with targets around 1.1420, which corresponds to 161.8% of the Fibonacci level based on the size of the first wave.

I would also like to remind you that the fundamental backdrop often has a strong influence on the wave count. Wednesday was a clear example of this. The instrument was clearly preparing to form an upward corrective wave, but the outcome of the Fed meeting was not quite what everyone had expected. As a result, the decline continued, and the corrective wave was never formed.

Fundamental Backdrop

In recent weeks, the fundamental backdrop has focused solely on the Fed meeting and the future course of the U.S. regulator. Yesterday evening, it became clear that Kevin Warsh does not intend to adopt the position of Donald Trump, who has been demanding a reduction in interest rates for a year and a half and has also been trying to dismiss all Fed governors who are not prepared to vote for monetary policy easing. However, Donald Trump was unable to dismiss even Lisa Cook because the U.S. Supreme Court also cannot make decisions dictated by the White House. Moreover, after being appointed Fed Chair, Kevin Warsh effectively came out from under Donald Trump's control and is free to make whatever decisions he considers necessary. The stance of the FOMC committee is also worth mentioning separately. All 12 of its members voted in favor of tighter policy, so even if Warsh had wanted to cut rates, he would have remained in the minority. Therefore, even if Kevin Warsh wanted to, he cannot do anything against eleven hawkish governors. This means that the Fed is moving toward tighter monetary policy as part of its efforts to return inflation to the 2% target. Should we expect further appreciation of the U.S. currency based on this? Such a scenario is entirely possible, but the dollar cannot continue rising indefinitely on this factor alone. Next week, it will need new positive developments for market participants to maintain strong demand for the U.S. currency.

Overall Conclusions

Based on my EUR/USD analysis, I conclude that the pair remains within a downward trend segment that may take either a three-wave or a five-wave form. After a decline of 200 basis points, it is reasonable to expect the formation of a corrective wave. A successful break above 1.1470, which corresponds to the 127.2% Fibonacci level, indicates that the market is ready to take partial profits on short positions, which could lead to a rise in the instrument toward 1.1509, corresponding to the 100.0% Fibonacci level, and higher. I expect a correction in the coming days.

The Main Principles of My Analysis:

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

The wave count may now become more complex again. Wave C has taken a three-wave form, while the next wave is identified as wave D. The entire trend segment that began on January 27 may now take a five-wave corrective form, A-B-C-D-E. If this assumption is correct, wave D has been completed, and on August 21, EUR/USD entered the phase of forming wave E, whose low should be below the low of wave C at 1.1325. The only question that remains is whether the fundamental backdrop will support the dollar strongly enough for EUR/USD to fall below 1.1325.

The Market Has Moved on from the Fed Meeting

The EUR/USD pair rose by 10 basis points on Thursday, but declined by 100 basis points over the course of the current week. And this was solely due to yesterday's correction. If we calculate the decline from last Thursday, the euro's losses amount to 150 basis points. All of this has been driven by the single factor of the Federal Reserve's monetary policy. Once again, I would note that the factor of the ECB's readiness to tighten monetary policy was not taken into account by the foreign exchange market. The Bank of England's readiness to begin tightening monetary policy also caused the pound to decline rather than rise. Therefore, the market reacted very positively to the information about the Fed's rate hike and priced in the prospect of further policy tightening even more strongly. At the same time, it ignored similar decisions and steps by the ECB and BoE. I leave it to you to judge how justified this is and how far the dollar can go on such support.

Friday promises to be quiet and corrective. Demand for the euro declined for five full days, so most likely we will see prices move away from the lows reached today. Therefore, we can expect a modest rise in EUR/USD, even if the fundamental backdrop remains negative for the euro today. As for the longer-term outlook, it is currently more uncertain than clear. Over the past week, the market has shown that it is focused solely on the Federal Reserve's monetary policy, so demand for the U.S. currency may remain high next week. If the market regains perspective and remembers that inflation is rising not only in the United States but also in other countries around the world, while Donald Trump continues to confront those who dare to oppose him, demand for the U.S. currency will decline, and the formation of the upward trend segment that began in June will resume.

Overall Conclusions

Based on my EUR/USD analysis, I conclude that the instrument remains within the global A-B-C-D-E corrective trend segment. If this assumption is correct, the decline in prices will continue toward targets below the low of wave C at 1.1325. I considered this scenario an alternative, and if it had not been for the Fed meeting, it would have remained a reserve scenario. However, the Fed delivered a surprise, leaving the market with no other option but to launch a new wave of U.S. dollar buying. At the same time, further dollar appreciation requires new reasons. I do not see any such reasons at present. Therefore, the formation of a new upward, non-corrective wave may begin from the current levels.

On the higher timeframe, an upward trend segment can be seen, followed by the formation of an A-B-C corrective structure. This structure could take a five-wave form, but at present I consider it complete. If this is the case, the formation of a new impulsive upward trend segment has begun.

The Main Principles of My Analysis:

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

On Friday, USD/CAD trades in a narrow range, remaining below the psychologically important 1.4000 mark — a high touched this week — but spot quotes continue to edge higher, supported by favorable fundamental drivers for the greenback.

The Canadian dollar is showing relative weakness against the US dollar, driven by a widening interest-rate differential that continues to favor USD/CAD. In early September, the Bank of Canada left its policy rate at 2.25%. By contrast, on Wednesday the US Federal Reserve raised its policy rate by 25 bps for the first time in more than three years to a 3.75–4.00% range.

The rate gap puts pressure on the loonie, making it vulnerable to the growing spread between Fed and BoC rates. The widening gap is a primary driver of the Canadian dollar's weakness: the key rate differential has returned to about 175 basis points, which largely explains the pair's uptrend.

Scotiabank strategists' fair-value model points to an equilibrium near 1.3894, implying the US dollar may be somewhat overvalued at current levels. However, given no prospect of a rapid narrowing of the policy gap, a near-term recovery in the loonie looks unlikely.

Persisting trade tensions between the US and Canada are another headwind for the Canadian dollar, which is closely tied to commodity prices. The imposition of high tariffs (up to 50%) on Canadian goods by the US — covering roughly $20 billion of trade — and Canada's retaliatory measures negate some of the positive impact from recent oil gains and further exacerbate pressure on the loonie.

At the same time, Fed Chair Kevin Warsh's emphasis on inflation has helped temper the recent sell-off in the bond market, bringing US government yields down from multi-year highs. That creates an additional headwind for further US dollar gains and could restrain further upside in USD/CAD. However, the Fed's hawkish stance — implying the possibility of additional rate increases this year — combined with geopolitical uncertainty continues to support the dollar as a safe-haven asset, which benefits USD/CAD bulls.

Technically, USD/CAD retains a bullish bias in the short term after breaking the key zone around 1.3945 at the time of the Fed meeting, where the 100-day SMA and the 50-day SMA intersect. Bulls are now targeting a break-and-hold above the round 1.4000 level.

On the downside, the formerly broken resistance at 1.3945 now appears to act as the nearest support. More significant support levels lie near the round 1.3900 level and just below it. Oscillators are mixed, while the RSI is positive, indicating bulls are gaining strength.

Cryptocurrencies, against common sense, responded to monetary tightening with historic rallies, and institutional heavyweights like BlackRock are using the macro storm to buy digital assets for billions of dollars, effectively turning them into a new haven.

Meanwhile, the tech Olympus exploded with the announcement of the foldable iPhone Duo, dividing the world between those willing to pay $2,000 for innovation and skeptics who call that price absurd.

In this review, we break down the anatomy of the main market paradoxes: from the crypto uprising against Wall Street and Europe's energy trap to Apple's triumph. Read about how geopolitical shocks and technological breakthroughs coexist, and where the main opportunities for profit lie in an era of total uncertainty.

The Fed tightens the screws, but crypto soars: how the market beat the "double blow" and hit record highs

One would expect a familiar scenario: the Federal Reserve raises rates and risky assets—especially cryptocurrencies—should sink in response. But not this week. For the first time in more than three years, the Fed tightened policy, yet instead of panic, the crypto market produced a stunning rally.

On Wednesday, the Federal Open Market Committee (FOMC) voted unanimously, 12–0, to raise the key rate by 25 basis points to a target range of 3.75%–4.00%. Fed Chair Kevin Warsh did not soften his rhetoric, telling reporters that inflation remains too high and has persisted for too long.

But seasoned traders watched the numbers rather than the words. Calm was provided by the committee's dot plot: the median rate is expected to be 4.1% by the end of both 2026 and 2027. What does that mean in practice? Only one more 25 bp hike is expected in the future and effectively the end of a prolonged tightening cycle.

Because the market had priced this step into the CME FedWatch tool with better than 90% probability, the decision removed a layer of uncertainty rather than delivering a shock.

The result was immediate. Bitcoin comfortably returned to about $76,600 (up roughly 0.9% on the day), Ethereum crossed $2,400, and Solana jumped 2%.

But the real hero of the week was Zcash (ZEC). The privacy-focused token shot up more than 16%, breaking $1,360 and setting a new all-time high. This surge capped a year-long rally that lifted the asset from below $50 to stratospheric levels. Analysts link the explosive move not only to record trading volumes but also to growing excitement around a potential spot ETF filing by Grayscale.

To grasp the scale of this rebound, recall how the week began. On Tuesday, the crypto community suffered a painful setback: the US Senate failed to pass major industry regulation—the Clarity Act. The bill fell just 10 votes short of the 60 needed to overcome procedural hurdles. The final tally was 50 to 49, with four Republicans joining Democrats in opposition. The New York Times called it a "painful defeat," burying hopes for passage before the November midterms.

Bloomberg described the week's start as a "double blow" to the industry: legislative failure amid waning retail interest and liquidity shortages. The market ought to have collapsed. But the panic proved illusory. Once the Fed announced its decision without "black swans" or surprises, a classic mechanism kicked in: short-covering and the return of sidelined capital triggered a powerful recovery.

High volatility and such macroeconomic reversals are prime opportunities for active and profitable trading. All instruments mentioned in this article, including BTC, ETH, and SOL, are available for trading on the InstaForex platform. To not miss opportunities in a changing market, open a trading account on the company's website and download the InstaForex mobile app.

Energy trap: how $100 oil and a Middle East war are squeezing Europe into stagflation

While the world marvels at record profits of IT giants and an everywhere AI boom, the European economy is quietly suffocating. The specter of stagflation — feared after the 2022 shock — has reappeared on the Old Continent. The reason is simple: a rapid surge in energy prices that is driving inflation well beyond levels comfortable for policymakers.

Eurostat's numbers are alarming: year-on-year inflation in the euro area jumped to 3.3% in August (from 2.9% in July), the highest since September 2024. Energy was the main driver: energy prices alone rose 2.9% month-on-month.

The European Central Bank's response was swift. On September 10 the regulator, reluctantly, raised three key interest rates by 25 basis points, lifting the deposit rate to 2.5%. Tightening monetary policy amid clear signs of slowing growth is a choice between bad options.

What lies behind these scary figures? Conflict with Iran and an effective blockade of the Strait of Hormuz. Oil futures are again testing the psychological $100-per-barrel mark — about 50% above pre-crisis levels. European natural gas has returned to scary highs not seen since 2022, and diesel prices are at record levels.

Derivatives markets and forecasts do not expect quick relief. According to Polymarket, users assign only an 18% chance that the Strait of Hormuz will be reopened by December.

ECB staff forecasts — which assume inflation of 3.0% in 2026 and 2.5% in 2027 — look plainly timid to markets. Swaps price euro-area inflation closer to 3.5% next year. Investors are preparing for the ECB to add almost another full percentage point to rates over the coming year. Across the Atlantic, the Fed — having just hiked by 25 bps — also appears poised to deliver at least two more tightenings.

The biggest victims of this storm will be ordinary people and businesses. European gas storage is entering autumn only 67% full — the lowest level on record since monitoring began in 2011. Wall Street has already punished the consumer sector: U.S. consumer stocks are down about 6% year-to-date, while their European peers have plunged some 17%.

In Estonia, energy firms are sounding the alarm ahead of winter. Tiit Hubeygi, head of energy trading at Enefit, notes that variable operating costs at gas-fired power plants have nearly doubled year-on-year — from €100 to €180 per MWh. Scandinavian hydro reservoirs, hit by a cold winter and a dry summer, have been drained to a 30-year low, cutting the Baltics off from cheap imported electricity.

Is there light at the end of the tunnel? For now, the light is provided by artificial intelligence. S&P 500 company earnings jumped 53% year-on-year in Q2, and PMI indices show solid expansion in the US and Europe in July and August. But the Bank of England, having kept rates unchanged on Thursday, is already sounding the alarm: the BoE expects UK inflation to exceed 4% by early 2027.

Foldable iPhone Duo at $1,999: Apple's triumph, Mini nostalgia, and Samsung skepticism

Apple has finally revealed its foldable smartphone. The iPhone Duo immediately split opinion: some praise the design, others criticize the price. The new model starts at $1,999 (and the top configuration reaches $3,199) and has already become the gadget of the season. Preorders open October 16, with shipments starting on the 23rd.

Cupertino's engineers delivered an interesting "transformer." Opened, the device offers a 7.6-inch display (almost an iPad Mini at 8.3 inches), while folded it presents a 5.4-inch external screen.

Remember the compact iPhone 12 Mini? In folded form, the Duo is its exact twin. CNET's Patrick Holland already proclaimed: "The perfect smartphone size is 5.4 inches, and no one will convince me otherwise!"

His colleague at AppleInsider echoes this, calling the Duo a "lifeline" for fans of compact devices (noting many of them are women who prefer ergonomics over massive screens). Holland even urged Apple to sell "half an iPhone Duo for half the price."

Despite some positive commentary, broader consumer reaction is less flattering. Even devoted enthusiasts admit they're reluctant to pay two thousand dollars for something that's half a Mini and half an iPad. As one AppleInsider author conceded, however much he wants the device, he won't spend that sum.

Android users are smirking. According to the Wall Street Journal, long-time Samsung Galaxy Fold owners are unimpressed by Apple's entry. For them, Cupertino did not invent a category but belatedly copied one the Koreans have been developing since 2019. What truly new has Apple introduced? There are no obvious revolutions in the Duo.

Technical analysts also found quibbles. Under the hood, the Duo has 12 GB of RAM — a figure Apple traditionally downplays in brochures. The Duo also lost the variable-aperture camera featured on the current iPhone 18 Pro.

ZDNet's Jason Perlow sees this as intentional — Apple's "selective positioning." Why burden users with dry specs when you can sell them 3,000 nits of brightness and cinematic shooting features? Marketing and emotion, once again, trump raw numbers.

Launching such an ambitious and costly product as the iPhone Duo is a powerful market driver. The success or failure of this foldable flagship will directly affect stock prices and create trading opportunities from volatility.

Appetite of a giant: BlackRock pours $1.5 billion into Ethereum while traditional markets tremble

While traditional equity markets shiver from Fed hawkishness, the world's largest asset manager, BlackRock, plays by its own rules. Blockchain analysts at Arkham Intelligence report that in just 20 days the firm accumulated roughly $1.5 billion worth of Ethereum. It did so amid the first rate hike in three years — a move that challenges conventional economic wisdom.

Most of these purchases (about $1.27 billion) went into the classic spot ETF, iShares Ethereum Trust (ETHA). But the real sensation came from the new iShares Staked Ethereum Trust ETF (ETHB), which lets investors earn additional yield from staking. About $296.5 million flowed into ETHB over the same period.

Notably, ETHB did not record a single day of net outflows during that time, underscoring that institutions are not just allocating capital but making a deliberate bet on Ether's yield. As of September 11, assets in ETHA exceeded $8.96 billion, while ETHB comfortably cleared $1.05 billion.

Bitcoin hasn't been left out. According to alternative data compiled by Finbold from SoSoValue analytics, BlackRock's total net inflows into its crypto suite over the same 20 days amounted to about $844 million, of which $434 million were net inflows into Bitcoin via iShares Bitcoin Trust (IBIT).

To appreciate the boldness of BlackRock's move, look at the macro backdrop. On Wednesday, the FOMC unanimously raised the policy rate by 25 basis points to a 3.75%–4.00% range — the first tightening since 2023. Fed Chair Kevin Warsh bluntly said inflation has been "too persistent" and hinted at another hike this year. Classic markets reacted: stocks pulled back, and the 10-year US Treasury yield pierced the 5% mark for the first time in 19 years.

It would seem like a bad time for risky assets. But BlackRock appears to think otherwise, effectively turning crypto into a new safe-haven asset for an era of high inflation.

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The US Dollar Index (DXY), which tracks the dollar's performance against a basket of currencies, is holding a positive tone and showing resilience near 100.35, remaining close to the high recorded at the end of July. Moreover, a favorable fundamental backdrop supports optimistic expectations for further US dollar appreciation in the near term.

At its Wednesday policy meeting, the Federal Reserve raised interest rates for the first time this year, in line with most economists' expectations. The dot plot signaled expectations for another rate increase later this year. In addition, Fed Chair Kevin Warsh emphasized the importance of stabilizing consumer prices for US economic growth, noting at the press conference that inflation remains too high and has persisted for too long. Meanwhile, inflationary risks related to rising oil prices support the prospects for further Fed tightening.

The deterioration of the situation in the Middle East has also been a significant catalyst for the dollar as a safe-haven asset. Iran's Islamic Revolutionary Guard Corps (IRGC) reported an attack on a Togo-flagged tanker that was allegedly attempting to transit the Strait of Hormuz illegally. US President Donald Trump, in turn, said he would soon make an important decision about resuming large-scale military operations against Iran. This raises additional geopolitical risks, which in turn support a favorable near-term outlook for the DXY and bolster bullish sentiment.

Economists at UOB Group note that recent changes in Fed policy forecasts are playing an important role for the dollar. "Given that we now expect two more Fed rate hikes, the decline in the US rate differential versus G-10 countries that weighed on the DXY since late 2024 is likely to reverse and become supportive of the DXY going forward," the bank says. Considering current interest-rate and currency-market trends, UOB concludes: "We now see upside risks to the USD that exceed our current forecasts both versus G-10 currencies and versus Asian currencies."

From a technical perspective, the DXY maintains a bullish stance, trading above its 100-day SMA and above all key moving averages. Further gains may encounter near resistance in the 100.80–101.00 zone. On the downside, initial support is at the 50-day SMA, followed by the 100-day SMA. Oscillators are positive, confirming the bulls' advantage.

The table below shows the percentage change in the US dollar versus major currencies for the current week. The US dollar posted its largest gain against the Japanese yen.

Investors resumed the once-popular buy-the-dip strategy and flocked like bees to the honey in shares of the Magnificent Seven and AI-linked companies. Investors came to realize that a couple of Fed rate-hike moves alone won't push the economy into recession or send the S&P 500 into a deep correction. And that is exactly what the updated FOMC projections showed. The consensus forecast implies the federal funds rate will be 4.125% in both 2026 and 2027.

Market expectations for the Fed funds rate

It doesn't matter that derivatives are pricing in three rate hikes over the next 12 months. There is a difference between the bearish-for-stocks CME derivatives' forecasts and actual data. Reality may turn out differently. The baseline scenario is that the Fed will raise interest rates in December and then take an extended pause in the tightening cycle. Such central bank procrastination, combined with a strong economy, would create a Goldilocks regime for the S&P 500 and bring back the market's favorite FOMO strategy — buy or be left behind.

As a result, the stock market rally, led by the Nasdaq Composite, increasingly looks like a relief rally. The Fed has signaled its intention to fight inflation but is unlikely to go too far. Treasury yields fell, and stocks rose.

The S&P 500 is also supported by falling oil prices. Markets have downgraded their expectations about Saudi Arabia shutting the key East-West pipeline, believing the problems are not as severe as initially thought. That has helped push Brent prices lower. The strengthening US dollar adds fuel to the fire: oil is denominated in dollars, so a rising USD is generally negative for crude.

Yardeni Research lowered its year-end S&P 500 target from 8,400 to 7,900, citing an expectation that oil prices will remain elevated longer due to the Middle East conflict. It's no surprise that the drop in Brent is lending a helping hand to US stock indices.

Technically, on the daily chart, the S&P 500 bounced off the lower band of a downward trading channel, which spurred buying. A breakout above the pivot resistance at 7,670 would be a reason to increase buy exposure to the broad stock index.

The USD/JPY pair is moving confidently toward the 200-day EMA, having broken the round 157.00 level during the European session — after the Bank of Japan's press conference.

The initial positive market reaction to the unexpectedly "dovish" policy decision has gradually faded after Governor Kazuo Ueda confirmed an intention to continue raising rates depending on economic and inflation dynamics. Notably, today's rate increase was not unanimous: two board members dissented, calling for a more cautious approach to tightening borrowing costs. That split added pressure on the yen and highlighted discord in monetary policy deliberations.

ING analysts report that the Bank of Japan raised its policy rate by 25 basis points to 1.25%. Board members Toichiro Asada and Ayano Sato voted against the increase. Economists note that Japan's core consumer-price index stayed above 2% through 2025 and that inflation is expected to remain above the target in the coming years. Thus the decision signals recognition of persistent inflationary risks.

ING also highlights internal divisions within the central bank's leadership: the two dissenters, appointed by Prime Minister Sanae Takaichi, argued a rate hike at this meeting was unwarranted without additional inflation impulses. That stance could complicate internal consensus on future policy moves.

Published data also show that Japan's national CPI was flat in August and that annual core inflation was below the BOJ's 2% target. That weakens expectations of a sharper tightening cycle, adding pressure on the yen and giving USD/JPY room to rise.

At the same time, the US dollar attracts buyer interest on the back of the Federal Reserve's hawkish projections. At its recent meeting, the Fed raised rates for the first time in more than three years and projected the possibility of further hikes before year-end.

Additionally, higher energy prices continue to create inflationary risks, which strengthens expectations of further Fed tightening. Combined with rising geopolitical tensions globally, this increases the geopolitical risk premium and reinforces the dollar's status as a safe-haven asset, supporting USD/JPY upside.

Technically, after the break of 157.00 — just below which runs the 20-day SMA — the short-term outlook for USD/JPY looks bullish. The pair met resistance at the 200-day EMA; further resistance is expected at 158.00 and at the 200-day SMA around 158.50.

On the downside, nearest support is seen at 156.60, then the round 156.00 level. A break below that level would lead to deeper losses. Oscillators are mixed, while the RSI is moving toward the positive zone, indicating strengthening bullish momentum.

The table below shows this week's percentage moves of the Japanese yen versus major currencies. The yen strengthened most versus the New Zealand dollar.

The wave situation on the hourly chart has turned bearish. The latest completed upward wave failed to break the previous peak, while the latest downward wave broke the previous low. Geopolitical conditions remain consistently negative and have every chance of deteriorating in the near future. The market expects several stages of FOMC monetary policy tightening by the end of the year. These two factors have brought bearish traders back into the market.

The fundamental backdrop on Thursday allowed the bears to take a short pause. On Friday morning, Germany's Producer Price Index was released, showing an increase to 4.6% compared with the forecast of 4.1%. Thus, Germany's Consumer Price Index may accelerate in the near future. According to yesterday's report, inflation in the European Union rose to 3.2% and has generally been increasing throughout the current year. Thus, by the end of September, all inflation indicators could rise even further, potentially forcing the ECB to raise interest rates once more before the end of the year. Meanwhile, U.S. President Donald Trump hinted at a possible resumption of the armed conflict with Iran in the very near future. According to Trump, he faces a difficult decision, and the resumption of active hostilities is a plausible scenario. Accordingly, a new escalation could occur in the Middle East, and oil prices, which have only just returned to $100 per barrel, could quickly rise to $120 or even higher. Inflation would then follow oil prices higher.

On the 4-hour chart, the pair consolidated below the 38.2% retracement level at 1.1526 and continued to decline toward the next Fibonacci level, 23.6%, at 1.1449. A rebound from 1.1449 would allow for a reversal in favor of the European currency and some growth toward 1.1526. Consolidation below 1.1449 would increase the probability of further decline toward the next 0.0% retracement level at 1.1325. No emerging divergences are observed on any of the indicators today.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders closed 4,968 Long positions and opened 12,723 Short positions. Over seven weeks in February and March, the bulls' overwhelming advantage evaporated because of the war in Iran, while over the past 24 weeks, the situation has become more balanced amid market hopes for an end to the conflict. The total number of Long positions held by speculators currently stands at 198,000, while the number of Short positions stands at 241,000. The bears remain in the lead, but their advantage is narrowing.

Overall, over the long term, large market participants continue to show strong interest in the euro. Clearly, events of various kinds around the world—which have been abundant in recent years—affect investor sentiment. In particular, the market is currently keeping a close eye on the situation in the Middle East, where the war seems to end and then start again. However, geopolitics no longer determines the dollar's fate on its own.

News Calendar for the United States and the European Union:

• European Union – Speech by ECB President Christine Lagarde (10:30 UTC).
• United States – Change in industrial production volumes (13:15 UTC).

The September 18 economic calendar contains two entries, neither of which is attracting attention. The impact of the economic backdrop on market sentiment on Friday may be extremely weak or nonexistent.

EUR/USD Forecast and Trading Advice:

Buying opportunities arose following a close above 1.1473 on the hourly chart, with targets at 1.1519 and 1.1564. These trades can remain open today. New short positions are possible following consolidation below 1.1473, with a target of 1.1416.

The Fibonacci level grids are drawn from 1.1325–1.1712 on the hourly chart and from 1.1849–1.1325 on the 4-hour chart.

The market situation has turned bearish. The latest completed upward wave failed to break the previous peak, while the new downward wave broke the previous low. Thus, the bears have now taken control of the initiative. The FOMC's monetary policy tightening and the hawkish outlook conveyed by Kevin Warsh sharply improved bearish sentiment. A break in the current trend is now possible only above 1.3567.

In the UK, the Bank of England announced the results of its latest meeting yesterday. The results were rather uneventful, as only three MPC members voted in favor of tighter monetary policy, as traders had expected. Thus, no decision was made to raise interest rates. The Bank of England, headed by Andrew Bailey, said that inflation in the UK could accelerate to 4% by the end of the year, which would make monetary policy tightening appropriate. However, a rate hike is not required at present, and inflation remains under the regulator's control. This tone did not satisfy traders, who had expected hints about specific timing for policy tightening. The Bank of England maintained a wait-and-see stance, and it is unclear when it will be ready to raise rates. As a result, the bears continued their attacks. This morning, a report on UK retail sales volumes was released, showing an increase of 0.5% against a forecast of -0.2%. This information could have supported the bulls, but the traders' reaction was virtually nonexistent. The pound is recovering slightly in morning trading due to a corrective rebound.

On the 4-hour chart, GBP/USD fell to the 61.8% retracement level at 1.3348. A rebound from 1.3348 would allow for some growth in the pound toward the 50.0% Fibonacci level at 1.3409. Consolidation below 1.3348 would favor a resumption of the decline toward the 76.4% retracement level at 1.3277. No new emerging divergences are observed on any of the indicators.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became more bearish over the latest reporting week. The number of Long positions held by speculators decreased by 11,866, while the number of Short positions decreased by 2,605. The current gap between Long and Short positions is essentially 74,000 versus 132,000. The gap and the bears' advantage are gradually narrowing, but the bears still maintain a substantial advantage. Previously, the bears' dominance was not in question, but it is now, as the fundamental backdrop has changed.

I still do not believe in a bearish trend for the pound, but in the near term, everything will depend on Trump's trade policy, the monetary policies of the Federal Reserve and the Bank of England, as well as the duration, scale, and consequences of the war in the Middle East. In recent months, the market has shifted toward expectations of peace, but negotiations between Iran and the United States failed without really getting started. Nor is it certain that they will resume in the near future. The Fed's monetary policy stance remains contradictory.

News Calendar for the United States and the United Kingdom:

• United Kingdom – Change in retail sales volumes (06:00 UTC).
• United States – Change in industrial production (13:15 UTC).

The September 18 economic calendar contains two entries, both of which can be considered of little significance following the meetings of the two central banks. The impact of the economic backdrop on market sentiment on Friday may be weak.

GBP/USD Forecast and Trading Advice:

Selling the pair is possible today following a rejection from 1.3381 on the hourly chart, with a target of 1.3339. Buying opportunities arose following a rebound from 1.3339, with targets at 1.3381 and 1.3414. These trades can remain open.

The Fibonacci level grids are drawn from 1.3557–1.3272 on the hourly chart and from 1.3158–1.3655 on the 4-hour chart.

Gold prices (XAU/USD) continue to rise for the second consecutive day, reaching new weekly highs on Friday. Bulls are preparing for a breakout above the key $4,400 level before opening new positions in anticipation of further gains. The recent decline in crude oil prices has eased concerns about a rapid increase in inflation, which has led to a decline in U.S. government bond yields from multi-year highs and contributed to capital outflows into the yellow metal. However, hawkish rhetoric from the U.S. Federal Reserve is strengthening the dollar and may limit further gains in gold prices.At Wednesday's meeting, the Federal Reserve unanimously decided to raise interest rates, marking the first rate hike since 2023. In addition, the so-called "dot plot" showed that Fed officials expect another rate hike this year. At the press conference following the meeting, Fed Chair Kevin Warsh emphasized the importance of stabilizing consumer prices for the U.S. economy and noted that inflation has remained too high for an extended period. Moreover, growing tensions in the Middle East continue to support oil prices, increasing inflation risks associated with higher energy prices and creating conditions for further tightening of the Federal Reserve's monetary policy.

UOB Group analysts emphasize that the Federal Reserve's return to a rate-hiking cycle is changing expectations for the dollar. They noted: "Given that we expect two more Fed rate hikes, the expected trend toward a narrowing of the U.S. interest-rate differential relative to other G10 countries, which has pressured the DXY index since late 2024, is likely to reverse, supporting the DXY going forward." Against this backdrop, UOB is revising its previous cautious stance on the dollar. "Given these factors, we now see upside risks for the dollar both against G10 currencies and against Asian currencies," the bank's analysts added.

According to data from CME Group's FedWatch Tool, the probability of another Fed rate hike at the October meeting is estimated at 54%, while the probability for December is approximately 88%. This, along with geopolitical uncertainty, supports the dollar as a safe-haven asset and limits gains in gold prices.

Among the latest developments, it is worth noting a statement by Iran's Islamic Revolutionary Guard Corps (IRGC) regarding an attack on a Togo-flagged tanker that was allegedly attempting to pass illegally through the Strait of Hormuz. In addition, U.S. President Donald Trump stated that he was close to making an important decision on resuming operations against Iran. These developments support the perception of the dollar as a safe-haven asset.

Given this situation, traders should wait for a sustained increase in buying activity before opening positions in anticipation of further recovery in the precious metal following the decline to a six-week low recorded last week.

Today, to identify the best trading opportunities, traders may wait for the release of secondary U.S. macroeconomic data on Friday, including industrial production and capacity utilization figures. In addition, speeches by influential FOMC members and developments in the Middle East could have a significant impact on the dollar exchange rate and gold price dynamics, creating short-term trading opportunities in the XAU/USD pair.

As for technical analysis, XAU/USD is facing resistance at the round-number $4,400 level. Above this level, the 20-day SMA will also provide resistance. The pair finds support at the 200-day EMA. Below this level, the round-number $4,300 level could also provide support. The oscillators are neutral; nevertheless, the Relative Strength Index is moving toward positive territory, supporting the bulls. However, the MACD is indicating that selling pressure persists.

In our view, it was only at the beginning of September that Bitcoin was given two serious reasons to start another decline. First, the US Senate once again blocked the Clarity Act, with the opposition coming not only from Democrats but also from several Republicans. Then the Federal Reserve did not simply raise its key interest rate; it effectively signaled its readiness to continue tightening monetary policy. This means that markets can now reasonably expect another two or three rounds of tightening. Is it worth reminding anyone that a Fed rate hike is a negative factor for Bitcoin?

Incidentally, following these two events, shares of many companies associated with cryptocurrencies or crypto investments declined. For example, Coinbase shares lost around 10%, while Strategy shares fell by 5%. Company representatives note that the fundamental basis for Bitcoin's growth has deteriorated, but that "their internal models still point to favorable prospects." What exactly these "favorable prospects" are and what they are based on, however, nobody explained. Bitcoin will simply keep rising, period!

Notably, Democrats once again pointed to Donald Trump's personal financial interests in the passage of the Clarity Act. This is precisely why they are unwilling to vote "yes." At present, experts do not expect another vote before the midterm elections for Congress. Most likely, a new vote will take place in 2027, with a new composition of both the House of Representatives and the Senate. However, the probability of Republicans losing the elections is very high, meaning that the new Congress could be much more "Democratic" than the current one. In that case, the chances of the Clarity Act being passed would become even lower.

BTC/USD trading recommendations

Bitcoin continues to form a downtrend despite its strong rally in mid-August. We continue to expect a decline toward $57,500 (the 61.8% Fibonacci level of the three-year uptrend), although this level has, essentially, already been tested. However, we do not believe that the downtrend has ended there.

The latest rally in the leading cryptocurrency looks very little like a correction, but this alone cannot be considered a strong enough argument for opening long positions. Liquidity could be taken from the $82,850 high, potentially triggering another leg of the downtrend. On the 4-hour timeframe, the rally may continue toward targets of $78,400 and $81,200, as a deviation was formed near the lower boundary of the sideways range.

ETH/USD trading recommendations

On the daily timeframe, the technical picture for Ethereum changed completely in just a few days. Ethereum may now begin a new uptrend. However, traders can currently rely only on the weekly chart, where Ethereum could target $4,800, which represents the upper band of the five-year sideways range.

On the daily timeframe, the nearest bearish FVG has been filled, but this FVG belongs to the previous trend. If it triggers a market reaction, that reaction will most likely be corrective.

After two deviations above the upper band of the range on the 4-hour timeframe, Ethereum declined toward the lower band. No deviation was formed near the lower band, but there was a straightforward rebound — already the third one — which can also be interpreted as a buy signal. A similar signal was formed for Bitcoin.

In the coming days, a technical rally toward targets of $2,450 and $2,544 is possible.

Comments on the charts

CHOCH is a change of character / break of the trend structure. Liquidity means traders' Stop?Losses that market makers use to build their positions. FVG stands for a Fair Value Gap (area of price inefficiency). The price often moves quickly through such areas, indicating the absence of one side in the market. Later, the price tends to return and react to these zones. IFVG is an Inverted Fair Value Gap. After a return to such a zone, the price does not react but impulsively breaks through and then tests it from the other side.

OB means an Order Block. A candle on which a market maker opened a position in order to harvest liquidity and then form their own position in the opposite direction.

We have entered an era in which our own eyes can no longer be trusted. Generative AI has learned to create photorealistic images in seconds, turning photography from documentary evidence into an object of dispute. In response to this crisis of trust, Apple has unveiled a radical solution — the unique, for now, Reference Image feature.

On Monday, Apple revealed details of how the Reference Image system works, following its debut in the iPhone 18 Pro and Pro Max lineup. Strip away the marketing, and what we are looking at is not simply another camera gimmick, but an attempt to create a cryptographic standard of reality in a world where almost anything can be forged.

Apple has divided the authentication process into two stages, the first of which resembles the operation of a classic film camera brought into the digital age. When you take a photo in the special reference mode, the "raw" pixel data is cryptographically signed at the hardware level. Crucially, this happens inside the sensor itself, before the iOS operating system gains access to the data.

This rules out any interference from malicious software or system vulnerabilities. At Apple, this data set is referred to as a "secure digital negative." It is stored on the device alongside the processed photograph we are familiar with.

The most interesting part begins when the user decides to "develop" this negative. The data is sent to an isolated environment within Apple's Private Cloud Compute (PCC). This is where all the processing takes place: demosaicing, tone mapping, and compression.

The resulting JPEG receives a composite post-quantum digital signature based on a hybrid of RSA-3072 and ML-DSA-87. Why such an extreme level of protection? Apple is thinking decades ahead, and this combination of algorithms is designed to ensure that the signature cannot be broken even if powerful quantum computers emerge in the future.

Cupertino was also quick to point out that its approach is fundamentally different from the industry-standard C2PA, which is used by other manufacturers. C2PA works like an "event log": it adds metadata describing an image's provenance and editing history after the photo has already been created.

Apple considers this to be an Achilles' heel: if the image-creation chain is not protected from the very first pixel, it remains vulnerable to compromise. Company representatives explicitly state that Reference Image is, as of today, the only system providing quantum-resistant security at the sensor level.

Perhaps the strongest aspect of Reference Image is its paranoid — in a good way — approach to privacy. Existing verification systems often link a photo to a public profile or a specific device, making it possible to track its creator.

Apple has taken a different path. The final signature is applied through the company's own service only after verification inside the "blind" PCC environment. This means that an outside observer — or a hacker — physically cannot determine whether two different photographs were taken on the same iPhone. Moreover, thanks to the architectural guarantees of Private Cloud Compute, Apple itself never sees the contents of your images.

The system has its limitations, too. The Reference Image feature works exclusively with the primary camera sensor on the iPhone 18 Pro and Pro Max and is optional by default.

On the other hand, this gives Apple an elegant security mechanism: if it is discovered in the future that a particular batch of sensors is vulnerable or has been compromised, the company could selectively revoke the authenticity certificates for images taken with those sensors. And once again, it could do so without being able to determine which specific images were taken or who took them using the "problematic" device.

The verdict is clear: Reference Image is more than just a shield against deepfakes. It is a manifesto for a new era in media. Your phone's camera is now not only a way to capture a moment, but also a personal "digital notary." Through cryptography, the technology transforms an ordinary photograph into irrefutable evidence of reality, restoring trust in visual content.

Technical Reading and Price Action

Price Channel Structure: The price is moving within a primary bullish channel (blue) representing the near-term trend, alongside a faster-momentum corrective channel (pink). The price recently staged a strong rebound from the lower boundaries of these bullish channels, near the first daily support level (Daily S1) at 4271.65.

Interaction with Pivot Levels: Buyers regained upward momentum, breaking through the daily pivot point (Daily Pivot) at 4326.24. The price continued to extend higher, breaking above the weekly pivot point (Weekly Pivot) at 4360.23 and stabilizing there.

Testing the Midline and Next Resistance: The price is currently trading near the midline of the blue channel, pushing toward the first daily resistance zone (Daily R1) at 4395.41 and the monthly pivot point (Monthly Pivot) located near 4387.35.

Key Support and Resistance Levels

Key Resistance Levels:

First Resistance: The range between 4387.35 and 4395.41 (encompassing the Monthly Pivot and Daily R1). Second Resistance: The previous peak recorded near 4408.50.

Key Support Levels:

First Support: 4360.23 (Broken Weekly Pivot, now acting as a support zone).

Second Support: 4326.24 (Daily Pivot and the lower boundary of the pink channel).

Key Support: 4271.65 (Daily S1 and the previous pivotal low).

Price Action Outlook and Trading Scenarios

Bullish Scenario (Primary):

A positive trajectory is the most likely outcome, given continued trading within the ascending blue channel and positioning above the Pivot levels.

Validation Condition: Sustained stability above the 4360.23 level.

Technical Targets: Targeting resistance zones at 4387.35 and then 4395.41 (initial target); a breakout here opens the way to test the peak at 4408.50.

Stop Loss: A one-hour candle close below the 4326.00 level.

Bearish Corrective Scenario (Alternative):

Triggered if the price faces sudden selling pressure that pushes it below the lower boundary of the pink channel.

Validation Condition: Breaking below 4360.23, followed by a break below the Daily Pivot at 4326.24 confirmed by a full one-hour candle.

Technical Targets: Retesting the previous pivotal low and the first daily support level at 4271.65. Risk Management

It is advisable to capitalize on opportunities aligned with the overall upward trend within the price channel and to monitor price action near the 4387–4395 resistance zone to avoid a corrective pullback, while strictly adhering to stop-loss levels to protect capital.

The 4-hour (H4) chart for Gold (GOLD) shows a bullish attempt to break out of the downward corrective phase; the price is currently trading at 4365.87, signaling buyer interest in regaining upward momentum following a rebound from the weekly support zone.

Technical Analysis and Price Action

Price Channel Structure: The price has been moving within a primary bearish channel (blue) and a steeper secondary channel (pink). Recently, the price staged a strong rebound from the pivotal low—aligned with the first weekly support level (Weekly S1) at 4277.95—successfully breaking above the upper boundary of the pink channel and rising above the midline of the primary blue channel.

Trading Around the Weekly Pivot: The price is currently testing the Weekly Pivot level at 4360.23, fluctuating near it while attempting to stabilize above it. This move aims to confirm bullish intent and clear the bearish trend line passing near these levels.

Key Support and Resistance Levels

Key Resistance Levels:

Resistance 1: 4430.60 (Weekly R1).

Resistance 2: 4512.88 (Weekly R2).

Key Resistance: 4583.25 (Weekly R3).

Key Support Levels:

Support 1: 4360.23 (Weekly Pivot).

Support 2: The lower boundary of the broken channel, near the 4328.00 – 4302.00 range. Key Support: 4277.95 (Weekly S1).

Price Action Outlook and Trading Scenarios

Bullish Scenario (Primary):

The bullish scenario is the most likely if the price holds above the broken pink channel and the weekly pivot level.

Confirmation Condition: A confirmed close of a full 4-hour candle above the 4360.23 level.

Technical Targets: Targeting the first weekly resistance level at 4430.60 as the primary target; a breakout here opens the way toward 4512.88.

Stop Loss: A 4-hour candle close below the 4325.00 level.

Bearish Scenario (Alternative):

This scenario activates if buyers fail to sustain the price above the pivot and negative momentum returns, pushing the price back inside the bearish channel.

Confirmation Condition: Breaking the 4360.23 level followed by a close below 4328.00.

Technical Targets: A return to retest the weekly support zone at 4277.95.

Risk Management

It is recommended to wait for a confirming 4-hour candle close above the 4360.23 level before opening new long positions. Strict adherence to stop-loss orders is advised to protect capital, and trading risk should not exceed 1% to 2% of the account balance.

This week the Federal Reserve announced its decision and the crypto market's reaction was as surprising as the FX reaction. Recall the Fed delivered the expected 25-bp hike — generally bad news for risk assets including crypto. But the Fed did not stop there: Kevin Warsh effectively signaled further tightening, and the dot-plot showed a hawkish shift among FOMC members. In other words, the Fed is committed to fighting high inflation, and one September hike will not be the last. That outlook is not encouraging for Bitcoin. Yet the crypto market barely reacted to the Fed's outcome — which is surprising given the hawkish tilt. Bitcoin could have plunged, but it did not. Also note that the CLARITY Act failed to pass this week, a bill that had been important for Bitcoin and the broader crypto sector. Reaction to that failure was weak. Thus, technical structure takes precedence again. The technical picture allows for a modest rise due to the 4-hour deviation.

Overall BTC/USD picture on 1D

On the daily timeframe, Bitcoin continues forming a downtrend and has entered a flat phase. The trend structure is downward, and the CHOCH line is at $82,800, where the last LH (Lower High) formed. Only above that level can the downtrend be considered complete. For most of 2026, "digital gold" has traded between $60,000 and $82,500, which means price can take liquidity from the last LH and begin a new move toward the lower boundary of the sideways channel.

Overall BTC/USD Picture on 4H

On the 4-hour timeframe, Bitcoin is also clearly flat. It twice removed sell-side liquidity, which led to a drop to the lower boundary of the channel as we forecast. A deviation formed near the lower boundary of the channel, which supports the expectation of a rebound back to the upper boundary. As long as price remains within the $75,600–81,200 channel, we advise traders to trade only from the channel boundaries. Internal patterns currently do not matter.

Trading Recommendations for BTC/USD

Bitcoin continues forming a downtrend despite the strong mid-August rally. We continue to expect a drop 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 recent rise of the top cryptocurrency only weakly resembles a correction, and that is not a sufficient reason to open long positions. Liquidity may be taken from the $82,850 high, which could provoke a new leg down. On the 4-hour timeframe, a rebound may continue with targets at $78,400 and $81,200, since a deviation formed near the lower boundary of the sideways channel.

Explanations for the illustrations:

CHOCH – change of trend structure.

Liquidity – liquidity, Stop Losses, pending orders that market-makers use to accumulate positions.

FVG – Fair Value Gap. A price area of inefficiency. Price passes through these areas quickly, indicating the absence of one side in the market. Subsequently, price tends to return and react to such areas in continuation of the main trend.

IFVG – Inverted Fair Value Gap. After returning to such an area, price doesn't react; it impulsively breaks it and then tests it from the other side.

OB – Order block. The candle where a market-maker opened a position aiming to take liquidity to form their own position in the opposite direction.

The GBP/USD pair continued its decline on Thursday, a drop that began a week or two ago. Recall that the market first "actively prepared" for Federal Reserve tightening and then, post-factum, decided to reprice the rate hike again. Yesterday the Bank of England met and indicated it may raise rates before year-end. Yet traders treated that fact as negative for the pound and sterling continued to fall. At present nearly every factor is being read as dollar-positive. Even if the BoE had hiked 50 bps yesterday, the pound might still have fallen "because the BoE decision was not hawkish enough." Thus sterling's near-collapse owes mainly to the Fed's move to tighten now while the BoE may only begin tightening closer to year-end. Today GBP/USD may attempt a correction, since the decline has taken on the feel of a "free-fall," but given current market sentiment we would not be surprised to see further dollar gains today.

Technically, sterling continues forming a downtrend. Now the pound can at best hope for corrective moves within the downtrend. The dollar will not rise every day as it did Wednesday evening, but even a neutral BoE outcome yesterday triggered further sterling weakness.

On the 5-minute timeframe on Thursday, several trading signals formed. Price initially bounced twice from the 1.3369–1.3377 area, which gave traders opportunities to open long positions. The northbound impulse failed to develop because the BoE meeting caused a renewed sell-off. After the BoE statement, three more signals appeared, but emotion drove the market, which largely ignored technical levels.

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 persistent long-term uptrend. Given events in the Middle East, it is unsurprising that dollar demand was high in the first half of 2026. The war is formally over, but the conflict persists. Only geopolitics can support the US dollar in the near term. However, until the pair closes below the trend line, we would not expect a strong sustained decline.

In the long term, the dollar continues to weaken due to Donald Trump's policies, as seen on the weekly timeframe. The trade war will continue in one form or another for a long time, and Trump's policy is aimed directly and indirectly at weakening the US currency. The long-term uptrend remains, as shown by the trend line. Price recently tested that line and bounced off it. According to the latest COT report (dated September 8), the "Non-commercial" group closed 11,800 BUY contracts and 2,600 SELL contracts. Thus, non-commercial traders' net position fell by 9,200 contracts over the week.

Analysis of GBP/USD 1H

On the hourly timeframe, the GBP/USD pair continues to form a downward trend. The Fed's decision and tone have dramatically changed the outlook for the US dollar. We would say that for the second time this year, a "black swan" arrived in the market, delivering unexpectedly good news for the dollar. Therefore, it is now reasonable to doubt sterling's prospects for sustained gains.

For September 18 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 (1.3519) and the Kijun-sen (1.3432) can also generate signals. It is recommended to move the Stop Loss to breakeven when the price moves 20 pips in the correct direction. The Ichimoku lines may shift during the day, which should be taken into account when determining trading signals.

Today the UK will publish retail-sales data, and the US will release industrial-production figures. Both reports are of medium significance, so any reaction may be weak and short-lived. Volatility may be low today.

Trading recommendations:

Today, traders may open short positions targeting 1.3301–1.3309 on a rejection from the 1.3369–1.3377 area. Long positions can be opened on a confirmed close above 1.3369–1.3377 with targets at 1.3432 and 1.3465–1.3480.

Explanations for Illustrations:

Support and resistance price levels are thick red lines where movement may conclude. They are not sources of trading signals.

The Kijun-sen and Senkou Span B lines are Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extreme levels are thin red lines from which the price has previously rebounded. They are sources of trading signals.

Yellow lines indicate trend lines, trending channels, and any other technical patterns.

Indicator 1 on COT charts shows the size of the net position of each category of traders.

The EUR/USD pair spent Thursday trying to stage at least a modest corrective move. During the day, the euro-area second-estimate CPI for August was released, and US construction-sector reports came out. The market largely ignored the second estimate of the CPI, while US construction data disappointed forecasts and prompted a small pullback in the dollar. That said, there is no strong evidence that traders sold the dollar specifically on those reports — it is equally possible the pair simply produced a technical correction after the sharp decline, with short-covering taking place. In any case, the pair began a corrective lift from the 1.1461–1.1473 area that may now extend toward the descending trend line. We still see no solid fundamental support for sustained dollar strength beyond Federal Reserve policy: even that case is debatable because the European Central Bank has already tightened in 2026 roughly as many times as the Fed may hypothetically do. If the market ignores positive factors for the euro, the euro will not rally.

Technically, a downtrend continues to form and now looks like a full-blown trend. The market again ignored the ECB's hawkish move but aggressively priced the Fed's hike. If that pattern persists, the dollar may continue to strengthen for a long time.

On the 5-minute timeframe on Thursday, one buy signal formed. During the European session, price bounced from the 1.1461–1.1473 area, enabling traders to open long positions. However, the euro's advance was weak and short-lived; price returned into the zone, and a new signal may form today.

COT report

The latest COT report is dated September 8. On the weekly timeframe, it is clear that non-commercial traders' net position turned bearish and fell significantly in 2026 amid geopolitical events. Traders have been reducing euro exposure in favor of the US dollar over the past six months. Trump's policy has not changed, but the dollar acted as a reserve currency for a period.

However, we still do not see fundamental factors that justify further dollar strengthening. The Middle East war made the dollar temporarily super-attractive, but when that factor's "shelf life" expires, everything should return to normal — and that shelf life may already be over. In the long run, the euro could fall as low as $1.08 (trend line), but the long-term uptrend remains intact. During recent months of dollar strength, the pair has not come close to that trend line.

The placement of the red and blue indicator lines indicates approximate parity between bulls and bears. During the last reporting week, longs in the "Non-commercial" group fell by 500 while shorts rose by 12,700. Accordingly, net positions fell by 17,700 contracts for the week.

Analysis of EUR/USD 1H

On the hourly timeframe, EUR/USD continues to form a downward trend, and the Fed strongly supported the downward move. The ECB should have supported the euro last week, since it raised rates for the second time in 2026, but the market now sees only the Fed and its tightening. Thus, the dollar has effectively formed a new trend out of thin air, and market sentiment may remain fully bearish going forward.

For September 18 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 (1.1610) and the Kijun-sen (1.1527). The Ichimoku indicator lines may shift during the day, which should be taken into account when determining trading signals. Remember to move the Stop Loss to breakeven if the price moves 15 pips in the right direction. This will protect against possible losses if the signal proves false.

On Friday, ECB President Christine Lagarde will speak, but she is unlikely to announce anything important just a week after the ECB meeting and rate hike. In the US today, the industrial production report is due, which likewise has a very low chance of provoking a market reaction.

Trading recommendations:

Today traders may consider short positions targeting 1.1362–1.1368 if price consolidates below the 1.1461–1.1473 area. A bounce from the 1.1461–1.1473 area will allow you to open long positions targeting 1.1527–1.1542. Volatility today may be low.

Explanations for Illustrations:

Support and resistance price levels are thick red lines where movement may conclude. They are not sources of trading signals.

The Kijun-sen and Senkou Span B lines are Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.

Extreme levels are thin red lines from which the price has previously rebounded. They are sources of trading signals.

Yellow lines indicate trend lines, trending channels, and any other technical patterns.

Indicator 1 on COT charts shows the size of the net position of each category of traders.

The GBP/USD pair collapsed for the second straight day on Thursday. If Wednesday evening's decline was driven by the Federal Reserve and its more hawkish stance than expected, then what drove Thursday's continuation? The Bank of England left the key rate unchanged, and only three MPC members voted to tighten — exactly as forecast. So why did sterling fall if the actual outcomes matched expectations? It appears there were no strong fundamental reasons.

Of course one can always say "the devil is in the details" and point to something dovish in the BoE statement — for example, that the BoE may not hike before year-end if inflation does not continue to accelerate. But the same could be said about the Fed: it could also refrain from further hikes if inflation does not move higher from the current 3.4%. Yet the market expects further tightening from the Fed, but not from the BoE.

Thus, as of Friday morning, we can only repeat what we said earlier: the dollar has no solid reasons to rally, and the market ignores many factors that work against the US currency. For example, what about US Treasury yields, which are making near-daily multi-decade highs? Rising yields increase the burden on the federal budget and add to the US government's already huge debt, which has surpassed $40 trillion. A new trade conflict between the US and Canada also offers little cause for celebration: new tariffs, new levies, new inflation.

The US economy still isn't growing at the rate Donald Trump promised, and the US labor market has averaged about 30k new jobs per month this year — not much more than last year. Geopolitics no longer reliably supports the dollar: the market has already adjusted to the Middle East war, the partial blockade of the Strait of Hormuz, and oil above $100/bbl with all its consequences. Therefore, we can identify only two positive factors for the dollar: Fed tightening and a possible Republican defeat in the midterms. The first factor has been priced in for the third or fourth time; the second is highly uncertain.

We think the dollar could react positively if Republicans lose control of one or both chambers of Congress. Americans associate many major policy changes with the Republican Party, so a Democratic win would not be surprising. If Democrats prevail, the US political system would regain a functioning opposition that could block questionable Trump initiatives — and that could be a modest positive for the dollar.

Average volatility of GBP/USD over the last 5 trading days is 70 pips, classified as "medium." For Friday, September 18, we therefore expect movement within the range 1.3273–1.3413. The longer linear-regression channel has turned up, indicating an uptrend. The CCI has entered the oversold area, warning of a possible end to the downtrend.

Nearest support levels:

S1 – 1.3306

S2 – 1.3245

S3 – 1.3184

Nearest resistance levels:

R1 – 1.3367

R2 – 1.3428

R3 – 1.3489

Trading recommendations:

The GBP/USD pair maintains an uptrend. Trump's policies will continue to weigh on the US economy, so we do not expect long-term dollar strength. So far, 2026 has been positive for the dollar owing to geopolitics, but every story ends. On the weekly timeframe, a flat range persists between 1.3150 and 1.3780 within a four-year uptrend, which supports expectations for continued sterling appreciation in the medium term. Long positions with targets 1.3550 and 1.3611 can be considered while price stays above the moving average. Price below the moving average would justify bearish trading, with targets of 1.3306 and 1.3276.

Explanations for Illustrations:

Regression channels help determine the current trend. If both are directed in the same direction, it means the trend is currently strong;

The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should be conducted at present;

Murray levels are target levels for moves and corrections;

Volatility levels (red lines) are the probable price channel within which the pair will spend the next 24 hours based on current volatility indicators;

The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.

The EUR/USD currency pair found no reason for joy or sorrow on Thursday. More than a day has passed since the Federal Reserve announced its decision, and only now can we draw clear conclusions as the market has calmed and emotions have subsided. So, the first thing that comes to mind — the market found an excuse to buy more US dollars. Of course, the Fed's decision can and should be regarded as "hawkish," but was it so hawkish that, after a week of gains, the dollar rose another 100 pips? Recall that the market began pricing in a Fed rate hike last Thursday, when the European Central Bank decided to tighten monetary policy for the second time this year. For some unknown reason, the market continues to treat the ECB's tightening as nothing, while the Fed's tightening, which had not yet occurred, is everything. That is the first important point, and it cannot be ignored.

The second important point is the fact that the dollar was in demand before the Fed meeting and remained in demand afterward. Someone may say the Fed's results were more hawkish than expected. But what exactly was so "more hawkish"? That all 12 FOMC voting members voted in favor of a hike? If there had been seven instead of twelve, would that have changed anything?

The third important point — signals about future rate increases turned out to be ambiguous. On the one hand, the dot-plot was published and showed an upward revision in the median year-end rate forecast. On the other hand, Kevin Warsh said there is no clear trajectory for the policy rate.

The fourth important point — the market has priced a rate hike for the third time. Recall that after two summer Fed meetings, the dollar also strengthened. So the market worked through summer tightenings twice, then spent almost a week pricing ahead of the September meeting, and after the meeting continued buying the dollar because the Fed may hike again by year-end?

We want to say that even if the Fed's decision was indeed more hawkish, the market has already worked through it for the third or fourth time. At the same time, it simply ignores the ECB's tightening. If someone considers this development natural, we have no objection — traders have many opinions. But we believe the dollar in 2026 squeezes the maximum out of the minimum. Even so, on the weekly timeframe, the pair still trades within a sideways channel that has been in place for over a year. In other words, despite a super-positive 2026, the dollar still cannot show sustained long-term growth. All it can do is wander within a sideways channel.

The average volatility of the EUR/USD pair over the last 5 trading days as of September 17 is 57 pips and is classified as "medium." We expect the pair to trade between 1.1421 and 1.1535 on Friday. The higher linear-regression channel points up, indicating an uptrend. The CCI entered the oversold area for the second time and formed two bullish divergences, warning of a possible end to the downward correction.

Nearest support levels:

S1 – 1.1475

S2 – 1.1414

S3 – 1.1353

Nearest resistance levels:

R1 – 1.1536

R2 – 1.1597

R3 – 1.1658

Trading recommendations:

The EUR/USD pair continues an uptrend on the 4-hour timeframe, which may be the start 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 no longer support the dollar. With price below the moving average, consider shorts with targets 1.1421 and 1.1414. Above the moving average line, long positions remain relevant, with targets of 1.1658 and 1.1719.

Explanations for Illustrations:

Regression channels help determine the current trend. If both are directed in the same direction, it means the trend is currently strong;

The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should be conducted at present;

Murray levels are target levels for moves and corrections;

Volatility levels (red lines) are the probable price channel within which the pair will spend the next 24 hours based on current volatility indicators;

The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is approaching.

Few macroeconomic publications are scheduled for Friday. German producer-price data, UK retail sales, and US industrial production are due. In our view, retail sales and industrial production may provoke only a small market reaction. Over the past week, the market has focused almost exclusively on Federal Reserve monetary policy and has been buying the dollar on any pretext. Therefore, the above releases are unlikely to provide strong support for the euro or the pound. More likely, European currencies may strengthen only on corrective moves.

Review of Fundamental Events:

Among Friday's fundamental events, the only one of note is European Central Bank President Christine Lagarde's speech. It is hard to say what new information she can offer, given that the ECB met just last week. The ECB has tightened policy for the second time this year and signaled readiness to tighten further if inflation accelerates. Yet the market barely noticed — the Fed is the only central bank raising rates now, and has done so repeatedly over the past months judging by market reactions.

The geopolitical backdrop remains unfavorable. The US and Iran are not negotiating; the Strait of Hormuz remains closed or partially closed; Iran-backed Houthi forces maintain a blockade of Saudi Arabia and continue attacking its facilities. Donald Trump has proposed an unprecedented economic operation to "destroy" Iran and threatens sanctions on any countries that interact with it. So far, no one has supported Trump's plan, and it remains unclear whether it will be implemented. The conflict persists, the Bab al-Mandeb Strait is under threat of blockade, and oil prices remain high.

General Conclusions:

During the last trading day of the week, currency pairs will likely try to correct. The euro can be traded today from the 1.1461–1.1474 area, and the pound from the 1.3319–1.3331 and 1.3380–1.3386 areas. Volatility may be low again today since no major events are scheduled.

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 too close together (within 5-20 pips), treat them as 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 serve as targets for opening buy or sell trades or as sources of signals.

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

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

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 calmly continued its downward move on Thursday. This time the pound's decline was triggered by completely neutral results from the Bank of England meeting. The BoE did not decide to tighten policy, but no trader expected it to. The Bank of England's Monetary Policy Committee voted three in favor of a hike and six to hold the rate, as expected. So why did sterling fall again? Because it has been falling for a week on a single factor — the Federal Reserve's monetary-policy stance — which the market has been repricing already for the third or fourth time. No other factors are driving dollar strength. The downtrend on the hourly timeframe persists, as evidenced by the trend line. With such a one-sided market mood, the US currency can continue to rise as long as it persists.

5M chart of the GBP/USD pair

On the 5-minute timeframe on Thursday, four trading signals were formed — each worse than the last. During the European session, price bounced twice from the 1.3380–1.3386 area but failed to gain even 20 pips on either attempt. Then sterling plunged after the BoE meeting and the price produced two sell signals in the same zone. Only on the fourth attempt did the pair move more than 20 pips in the intended direction.

How to trade on Friday:

On the hourly timeframe, GBP/USD continues a downward trend that is turning into a full-blown trend. The fundamental backdrop for the dollar and the pound changed sharply on Wednesday evening as the Fed signaled it is ready to continue tightening. As a result, dollar positioning for 2026 has become materially more favorable again. However, the dollar has no other supporting factors.

On Friday, novice traders may consider short positions targeting 1.3319–1.3331 on a rejection from the 1.3380–1.3386 area. Open long positions targeting 1.3456–1.3476 if price confirms a close above the 1.3380–1.3386 zone.

On the 5-minute timeframe, you can trade the 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 Friday, the UK will publish retail-sales data, and the US will report industrial-production volumes. We view both releases as secondary, especially after such a busy week.

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 too close together (within 5-20 pips), treat them as 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 serve as targets for opening buy or sell trades or as sources of signals.

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

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

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

The EUR/USD pair plunged like a stone on Wednesday evening and tried to recover a bit on Thursday. It would be a stretch to say Thursday's macro events provided any support to the euro. We would not interpret them that way in the near term. After the market largely ignored the European Central Bank's second tightening, it is unrealistic to expect, for example, euro-area industrial-production data to spark a euro rally. Thus, the second estimate of euro-area August inflation and US construction-sector data were effectively ignored. The Bank of England meeting also had no impact on the euro or dollar — which makes sense because the BoE has little direct influence on the euro. Sometimes euro and pound move together in such cases, but not this time. The downtrend persists; today the pair may try to continue a corrective bounce.

5M chart of the EUR/USD pair

On the 5-minute timeframe on Thursday, one buy signal formed. During the Asian and European sessions, price tried to lift off the 1.1461–1.1474 area and eventually did. However, the euro advanced only about 15 pips in the intended direction, because volatility remained extremely low again.

How to trade on Friday:

On the hourly timeframe, EUR/USD continues a downward trend that may develop into a full-fledged trend. Considering recent months' events, we do not believe the euro should collapse like a stone — but the market's primary focus remains Federal Reserve policy, which this week turned materially more supportive of the US dollar.

On Friday, novice traders may open short positions targeting 1.1366–1.1377 if price consolidates below 1.1461–1.1474. Buy trades can be opened targeting 1.1527–1.1531 in case of a bounce from the 1.1461–1.1474 zone.

On the 5-minute timeframe, consider the levels 1.1267–1.1275, 1.1366–1.1377, 1.1461–1.1474, 1.1527–1.1531, 1.1584–1.1594, 1.1655–1.1665, 1.1745–1.1754. On Friday, ECB President Christine Lagarde will speak, and the US will publish industrial-production data. We view both as secondary and expect market moves to remain muted again today.

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 too close together (within 5-20 pips), treat them as 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 serve as targets for opening buy or sell trades or as sources of signals.

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

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

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.

Executives at the largest US energy corporations are warning that a full-scale global fuel crisis is now underway. As Chevron CEO Mike Wirth said in an interview with The Wall Street Journal, traditional market mechanisms that previously helped smooth out price and logistical risks have now been largely exhausted, and there is no quick way to improve market conditions. Global commercial fuel inventories have been declining continuously for more than six months, while the scope for further releases from strategic reserves is extremely limited.

The situation has been critically exacerbated by an attack on the Saudi oil pipeline built to bypass the Strait of Hormuz, which removed at least 2.5 million barrels per day from the global market almost overnight. Over the past three weeks, US crude prices have risen 19%, approaching $101 per barrel, while the price of diesel in the United States has surged to a record $6.23 per gallon and gasoline to $4.32. Additional pressure on prices is coming from China, which, after several months of aggressively drawing down domestic inventories, has been forced to resume large-scale crude oil purchases on the international market.

The deepening crisis is moving beyond the familiar problem of higher crude oil prices, evolving into:

* Acute physical shortages of refined petroleum products

* Insufficient refining capacity

* A lack of secure logistical corridors

Unlike crude oil, which can theoretically be redirected from other regions relatively quickly, new refineries, available tanker capacity, and additional supplies of finished diesel cannot be brought online within a matter of days. Diesel, meanwhile, represents a fundamental hidden cost component for virtually every major sector of the global economy, including:

* Freight and rail transportation

* Agriculture

* Raw-material extraction

* Heavy industry

It also plays a critical role in transporting food and consumer goods to end customers. The transmission mechanism of the shock is straightforward: rising fuel prices increase transportation costs, companies pass those costs on through higher selling prices, and inflation receives a fresh boost, leaving central banks with less room to cut interest rates. At the same time, expensive energy drains household incomes, triggering a decline in consumer demand and pushing the economy toward classic stagflation, in which declining output is accompanied by persistent price increases.

Investment risks and key indicators

The changing market landscape calls for a selective approach to assets. Earnings growth is most likely to benefit oil and gas companies with reliable production outside troubled regions, as well as refineries with guaranteed access to feedstock. Meanwhile, the following sectors are likely to come under significant pressure:

* Logistics

* Airlines

* Chemicals

* Retail

* Construction

A new wave of inflation would support bond yields and weigh on expensive growth stocks. Key indicators to monitor include middle-distillate inventories, refinery utilization rates and shutdowns, the timeline for repairs to the Saudi pipeline, tanker traffic through the Strait of Hormuz, China's purchasing volumes, and refining margins. The key determining factor is not the peak price of a barrel, but the duration of the shortage. Strategic reserves can buy only a limited amount of time; they cannot repair infrastructure or build new refining capacity.

There has, however, been some easing on the geopolitical front. Saudi Arabia is expected to fully restore energy transit flows through its East-West pipeline in the near future. Meanwhile, US Vice President J.D. Vance told The New York Post that the conflict between Washington and Tehran will enter a completely different phase in the coming months. According to Vance, the first stage of the confrontation has already been completed. It consisted of:

* The complete elimination of Iran's nuclear program

* The destruction of key facilities belonging to the country's conventional armed forces

* Depriving the Islamic Republic of the ability to project power at the regional level

The purpose of the upcoming second phase is to preserve maximum global stability and prevent Iran from rebuilding its military capabilities. Vance emphasized that only President Donald Trump, as commander in chief, determines when military conflicts begin and end, adding that the United States is not currently conducting offensive operations.

US Treasury Secretary Scott Bessent is also preparing to meet with Chinese Vice Premier He Lifeng. Both sides continue preparations for a summit between Donald Trump and Xi Jinping, scheduled for September 24 in the United States. Although markets expect the upcoming dialogue to help ease tensions and improve economic relations between the world's two largest powers, investors remain highly cautious. The reasons for this restraint include continued uncertainty surrounding reciprocal tariffs, sanctions restrictions, and geopolitical tensions centered on Taiwan and the Middle East.

September 17

September 17, 12:00 / Eurozone / *** / Consumer Price Index (CPI) in August (final) / Previous: 2.8% / Actual: 2.9% / Forecast: 3.3% / EUR/USD – Up

Annual consumer inflation in the eurozone accelerated to 2.9% in July, reaching its highest level since last autumn. Price developments were driven by:

* A surge in energy inflation to 14.3% due to geopolitical tensions in the Middle East

* Faster increases in the prices of unprocessed food and industrial goods

* A slowdown in services inflation to a four-month low of 3.0%

* A decline in core inflation to 2.4%

In August, markets are pricing in a further acceleration in inflation. The expected increase in prices will strengthen expectations of tighter ECB policy, supporting the European currency.

September 17, 14:00 / United Kingdom / *** / Bank of England Interest Rate Decision / Previous: 3.75% / Actual: 3.75% / Forecast: 3.75% / GBP/USD – Volatile

The Bank of England kept its key interest rate unchanged at 3.75%. The decision was driven by the following factors:

* The regulator's continued hawkish stance amid rising inflation risks and higher prices

* The presence of Monetary Policy Committee members calling for an immediate 25-basis-point rate hike

* A slowdown in the pace of quantitative tightening involving government bonds

For the next period, analysts expect monetary policy parameters to remain unchanged. At the same time, the regulator's hawkish stance will create conditions for the British pound to strengthen.

September 17, 15:30 / United States / ** / Building Permits in August / Previous: 1.374 million / Actual: 1.433 million / Forecast: 1.410 million / USDX (6-Currency USD Index) – Down

The number of building permits issued in the United States increased by 4.3% in July, showing solid growth. Permit activity was driven by:

* An increase in permits for multifamily housing (+7.3%) and single-family homes (+2.5%)

* Growth in the Midwest (+10.8%) and South (+5.6%)

* A localized decline in permits issued in the Northeast (-1.9%)

In August, markets are pricing in a moderate decline in the number of building permits issued. Weaker construction-sector data will create downside risks for the US dollar.

September 17, 15:30 / United States / ** / Housing Starts in August / Previous: 1.145 million / Actual: 1.239 million / Forecast: 1.310 million / USDX (6-Currency USD Index) – Up

US housing starts fell by 12.4% in July, retreating to levels close to multi-year lows. The housing-market decline was driven by:

* A 15.6% drop in multifamily construction and a 9.9% decline in the private sector

* Decreases in the Midwest (-27.6%), West (-13.8%), and South (-12.6%)

* A localized increase in housing construction in the Northeast (+17.1%)

In August, analysts expect residential construction activity to recover. Improving conditions in the property development sector will support the US dollar.

September 17, 15:30 / United States / ** / Initial Jobless Claims / Previous: 207,000 / Actual: 206,000 / Forecast: 208,000 / USDX (6-Currency USD Index) – Down

The number of new unemployment benefit claims in the United States declined in the first week of September, remaining close to its lowest levels. Labor market conditions were characterized by:

* A decrease of 1,000 in continuing claims, to 1.774 million

* A moderate growth in initial claims filed by government employees, to 388

* Continued overall labor market stability and signs of high employment

For the next period, analysts expect a moderate increase in initial jobless claims. A slight weakening in labor market stability could put pressure on the US dollar.

September 17, 15:30 / United States / ** / Philadelphia Fed Manufacturing Business Activity Index in September (Leading Indicator) / Previous: 41.4 pts / Actual: 47.4 pts / Forecast: 30.5 pts / USDX (6-Currency USD Index) – Down

The Philadelphia region's manufacturing activity index posted a strong increase in August, reaching its highest level since spring 2021. The sector's recovery was supported by:

* Manufacturing employment rising to multi-year highs

* A moderate easing of price pressures on raw materials and finished goods

* A 39-point surge in the future activity index, driven by strong manufacturer optimism

In September, analysts expect a corrective slowdown in manufacturing-sector business activity. Slower growth could put pressure on the US dollar.

September 17, 17:00 / United States / ** / Pending Home Sales Index in August / Previous: -0.3% / Actual: -2.2% / Forecast: -0.7% / USDX (6-Currency USD Index) – Up

The number of US real estate transactions in the pending stage declined further in July. The deterioration was driven by:

* A decline in pending transactions in the West, South, and Northeast

* A localized increase in buyer activity in the Midwest

In August, analysts expect the pace of decline in pending home sales to ease. A recovery in real-estate market activity will create conditions for the U.S. dollar to strengthen.

September 18

September 18, 2:30 / Japan / *** / Consumer Price Index (CPI) in August / Previous: 1.6% / Actual: 2.0% / Forecast: 2.1% / USD/JPY – Down

Consumer inflation in Japan accelerated in July, reaching its highest level since the end of last year. The increase in prices was driven by:

* A slowdown in the decline in electricity prices following cuts to government subsidies

* Higher prices for food, transportation, household goods, and medical services

* An increase in core inflation (excluding fresh food) to 1.8%

In August, markets are pricing in a further acceleration in consumer inflation. Stronger price pressures will increase the likelihood of tighter Bank of Japan policy and strengthen the yen, pushing the USD/JPY pair lower.

September 18, 6:00 / Japan / *** / Bank of Japan Interest Rate Decision / Previous: 1.00% / Actual: 1.00% / Forecast: 1.25% / USD/JPY – Down

At its July 31 meeting, the Bank of Japan kept its short-term interest rate unchanged at 1.00%. The decision was accompanied by the following factors:

* A warning about the risk of core inflation exceeding the 2% target

* An increase in the inflation forecast for fiscal 2027 to 2.4% and the GDP forecast to 0.8%

* An alternative proposal from a board member calling for an immediate rate hike

For the next period, analysts expect the Bank of Japan to raise its key interest rate. Expectations of tighter monetary policy will support the Japanese yen and push USD/JPY lower.

September 18, 9:00 / Germany / ** / Producer Price Index (PPI) in August / Previous: 1.8% / Actual: 3.0% / Forecast: 4.1% / EUR/USD – Up

Industrial inflation in Germany accelerated for the fourth consecutive month in July, reaching its highest level since spring 2023. The increase in producer costs was driven by:

* A 5.4% increase in the price of intermediate goods due to a surge in metal and copper prices

* A 3.8% rise in energy prices amid higher oil, gas, and motor-fuel costs

* Higher prices for equipment, machinery, and automobiles

In August, markets expect a significant acceleration in producer prices. Persistently high wholesale inflation will strengthen the European currency and push EUR/USD higher.

September 18, 9:00 / United Kingdom / ** / Retail Sales in August / Previous: 3.8% / Actual: 1.6% / Forecast: 1.9% / GBP/USD – Up

Annual retail sales growth in the United Kingdom slowed significantly in July, recording its weakest pace since mid-spring. The consumer sector was affected by:

* More restrained consumer activity following the June surge

* Results falling short of initial market expectations

* Continued cautious household behavior amid high costs

In August, analysts expect retail sales growth to accelerate somewhat. If these expectations are confirmed, the British pound will receive support, pushing GBP/USD higher.

September 18, 11:00 / Eurozone / *** / ECB Consumer Inflation Expectations in August / Previous: 3.0% / Actual: 2.9% / Forecast: 3.0% / EUR/USD – Up

Median consumer inflation expectations for the next 12 months in the eurozone declined in July, retreating from previous levels. The indicator was shaped by:

* A decline in three-year inflation expectations to 2.7%, while the five-year benchmark remained stable at 2.4%

* Continued high uncertainty due to risks in the Middle East

* Higher inflation concerns among lower-income households

* A modest decline in pessimism regarding overall economic activity

Inflation expectations are forecast to resume rising in August. If this scenario is confirmed, the European currency could receive an upward impulse.

September 18, 12:00 / Eurozone / ** / Construction Output in July / Previous: 0.7% / Actual: -0.7% / Forecast: -1.0% / EUR/USD – Down

The eurozone construction sector resumed its decline in June, moving into negative territory. The sector's deterioration was driven by:

* A continuing deep contraction in residential and commercial construction (-6.5%)

* A sharp slowdown in civil engineering (+0.3%) and specialized construction activities

* A significant decline in construction activity in Spain (-8.5%), France (-4.5%), and Belgium (-4.1%)

In July, analysts expect the construction-sector downturn to deepen. Continued negative trends will weigh on the European currency.

September 18, 16:15 / United States / *** / Industrial Production in August / Previous: 1.29% / Actual: 1.10% / Forecast: 1.00% / USDX (6-Currency USD Index) – Down

Annual growth in U.S. industrial production slowed in July, remaining significantly below the long-term historical average of 3.44%. The indicator points to a gradual cooling of manufacturing activity in the country. In August, analysts expect the slowdown in industrial growth to continue. Cooling activity in the sector could lead to a weaker US dollar.

September 17, 10:00 / Eurozone / Speech by Philip Lane of the ECB Executive Board / EUR/USD

September 18, 13:30 / Eurozone / Speech by ECB President Christine Lagarde / EUR/USD

September 18, 16:30 / United States / Speech by Michelle Bowman of the Federal Reserve Board of Governors / USDX

Speeches by representatives of the leading central banks are also scheduled for these days. Their comments typically trigger volatility in the FX market, as they can provide signals about the regulators' future interest rate plans.

Stock Index Performance

Donald Trump made no secret of his frustration on social media, reiterating that rates should be "1% or lower" because the United States has the best credit rating in the world. The market, however, listened not to the president but to the Fed. Treasury yields rose, while stocks fell. It was a classic reaction to a signal that inflation remains a problem.

More important for investors was the fact that Wednesday's decision shifted traders' attention to the upcoming October and December meetings. CME derivatives now price in nearly a 90% probability of another rate hike by the end of the year. Most investors are preparing for further hikes. This is never a one-off event.

Against this backdrop, Yardeni Research cut its S&P 500 target to 7,900 from 8,400, which until recently had been the highest forecast on Wall Street. The new target is now roughly in the middle of the range of estimates from more than 20 strategists surveyed by Bloomberg. At the same time, the firm lowered its forward P/E multiple from 19.8 to 18.6 amid rising bond yields.

S&P 500 Earnings Forecasts

Technically, the S&P 500 broke below the lower band of its descending trading channel on the daily chart, allowing traders to add to short positions opened at 7,675. The first of the two previously established targets, at 7,520 and 7,460, has been reached. It makes sense to move the second target down to 7,350.

Leaders in the US energy sector are acknowledging the onset of a full-scale global fuel crisis: traditional market mechanisms have been exhausted, while commercial inventories have been declining for six months already. The situation has been exacerbated by an attack on a key Saudi oil pipeline, the resumption of large-scale purchases by China, and an acute shortage of crude oil and refined petroleum products, refining capacity, and available tankers. Against this backdrop, US oil prices are approaching $101 per barrel, while gasoline and diesel prices are hitting all-time records.

The main danger of the crisis lies in its destructive impact on the global economy as a whole, since diesel fuel is a hidden component of the cost of freight transportation, agriculture, and heavy industry. Rising logistics costs inevitably feed into the prices of goods, accelerating inflation and depriving central banks of the ability to cut interest rates. As a result, consumers spend increasingly more on necessities, while consumer demand declines, pushing the global economy into the dangerous territory of stagflation. Read more at the link.

Manufacturing optimism and labor market stability in the US

In the United States, initial jobless claims fell to 206,000, beating analysts' expectations and remaining close to their lowest levels. A decline in continuing claims and overall high employment confirm the fundamental resilience of the US labor market. Nevertheless, experts note that even a minor cooling of this sector in the future could put additional pressure on the dollar.

At the same time, the Philadelphia manufacturing business activity index surged to 47.4 points, reaching its highest level since spring 2021 and significantly exceeding forecasts. The increase was driven by rising manufacturing employment, a moderate easing of commodity price pressures, and a sharp increase in manufacturers' optimism about future orders. Despite the current strong performance, analysts expect growth to slow as a correction in the near term, which will also be an important factor in assessing the US currency's trajectory. Read more at the link.

Apple rides the innovation wave: foldable iPhone, in-house AI servers, and bullish stocks

Apple shares are holding firmly near their all-time highs, demonstrating notable resilience amid turbulence in the IT sector. John Ternus has set a strong direction for the company's development by announcing plans to build its own AI servers powered by M8 Ultra processors. The move was prompted by an unexpected hardware shortage: AI developers are buying up Mac Studio computers en masse for local AI training, leaving the supply of conventional consumer hardware insufficient for around-the-clock enterprise workloads. Analysts at HSBC and Arete Research have already raised their price targets for the stock to $366 and $360, respectively.

Apple's product lineup is also undergoing a revolution: the company has unveiled its first foldable smartphone, the iPhone Duo (starting at $1,999), as well as the iPhone 18 Pro family running iOS 27 with deeply integrated neural-network-powered Siri. The company's business fundamentals have been further strengthened by the removal of legal risks, as the startup xAI has fully withdrawn its antitrust lawsuit against the corporation. Combined with the record success of Apple TV+ streaming and its loyal subscriber base, these factors make Apple one of the most reliable and promising players in the market. Read more at the link.

The euro heads lower: the Fed raises the funds rate despite Trump's demands

On Wednesday, the EUR/USD pair continued its decline with conviction, breaking through the key support levels of 1.1519 and 1.1473. The technical picture on the hourly charts has turned decidedly bearish, and the euro is now targeting the next level at 1.1416. A potential reversal and recovery will emerge only if the exchange rate manages to reclaim and hold above 1.1473.

The fundamental driver behind the pressure on the European currency was the Federal Reserve's unexpectedly hawkish decision. The FOMC unanimously raised interest rates, while Kevin Warsh confirmed that the regulator remains focused on combating inflation despite weakness in the labor market and political pressure. This left Donald Trump frustrated, as he called on social media for interest rates to be cut to 1% in order to trigger an "investment boom." The Federal Reserve, however, made it unequivocally clear that its economic mandates take precedence over the ambitions of the White House. Read more at the link.