The dollar index slipped to around 97.5 as delayed U.S. data due to the shutdown kept markets cautious, with investors expecting steady Fed policy until summer while risk appetite and Japan’s election added pressure against the yen.
Markets opened the week with a softer US dollar, allowing EUR/USD to rebound above 1.1800 as investors reassessed Federal Reserve expectations following cooling US labor signals and easing geopolitical tensions. The yen recovered after Prime Minister Takaichi’s decisive election victory revived intervention talk, while sterling stabilized near recent lows amid a more dovish Bank of England tone. Precious metals strengthened as well, with gold hitting a weekly high on dollar weakness and steady central bank buying, and silver extending a sharp recovery after heavy liquidation. Attention now turns to delayed US payrolls and upcoming inflation data for clearer direction across currencies and metals.
| Time | Cur. | Event | Forecast | Previous |
| FOMC Member Bostic Speaks |
EUR/USD climbed above 1.1800 on Monday, extending its recovery as the US Dollar softened. While the ECB held interest rates steady at 2.15% last week, market focus has shifted to the Federal Reserve following cooling US labor signals. Easing geopolitical tensions further pressured the greenback. Investors now await Wednesday’s rescheduled Nonfarm Payrolls and upcoming inflation data for definitive clues on the 2026 interest rate path.
For EUR/USD, the first resistance is at 1.1870, while the initial support level is found at 1.1770.
| R1: 1.1870 | S1: 1.1770 |
| R2: 1.1920 | S2: 1.1730 |
| R3: 1.1970 | S3: 1.1680 |
The Japanese Yen strengthened past 157 per dollar on Monday, recovering from two-week lows after Prime Minister Sanae Takaichi’s LDP secured a two-thirds supermajority. While the victory grants Takaichi a mandate for expansionary fiscal policy and potential tax cuts, officials’ warnings on currency volatility fueled intervention speculation. The result boosted equities to record highs but pressured bonds, as markets weighed growth prospects against Japan’s debt trajectory.
Technically, resistance stands near 157.30, while support is firm at 156.20.
| R1: 157.30 | S1: 156.20 |
| R2: 158.50 | S2: 155.50 |
| R3: 159.20 | S3: 154.70 |
Gold surged over 1% Monday, clearing $5,020 as a weaker Dollar boosted safe-haven appeal. Investors are eyeing Wednesday’s delayed US jobs report and Friday’s CPI data for Fed guidance. Bullion found additional support from the PBOC’s 15th straight month of purchases, Japan’s election outcome, and cautious optimism surrounding ongoing nuclear negotiations between the US and Iran in Oman.
Gold sees support near $4920, while resistance is around $5095.
| R1: 5095 | S1: 4920 |
| R2: 5150 | S2: 4825 |
| R3: 5240 | S3: 4700 |
Sterling steadied near 1.3600 on Monday following its sharpest weekly decline since October. Political tension over Prime Minister Starmer’s diplomatic appointments weighed on the currency alongside a dovish shift at the Bank of England. While the BoE held rates steady, a narrow vote split revealed increasing support for imminent cuts as cooling inflation and slowing demand become primary concerns for policymakers.
From a technical view, support stands near 1.3550, with resistance around 1.3640.
| R1: 1.3640 | S1: 1.3550 |
| R2: 1.3700 | S2: 1.3500 |
| R3: 1.3740 | S3: 1.3460 |
Silver climbed over 2% Monday, nearing $80 as it extended a sharp rebound from recent historic selloffs. Investors returned to the metal following a massive liquidation phase that erased nearly half its value since late January. Market sentiment improved after Prime Minister Sanae Takaichi’s landslide election victory in Japan, which increased expectations for expansionary fiscal support. While US-Iran talks in Oman eased some geopolitical tension, traders remain focused on this week’s US employment and inflation data for definitive Federal Reserve policy cues.
From a technical view, resistance stands near $83.50 while support is located around $77.00.
| R1: 83.50 | S1: 77.00 |
| R2: 85.60 | S2: 75.50 |
| R3: 88.30 | S3: 72.80 |
Global markets traded cautiously as shifting Federal Reserve expectations and easing geopolitical risks continued to shape sentiment. President Trump warned he'll bomb Oman if it stands in Washington's way, as reports suggest Iran and Oman are moving toward a deal on Strait of Hormuz control.
Global markets started the week with the dollar under pressure as softer U.S. retail sales, inflation, and consumer sentiment reduced expectations for a September Federal Reserve rate hike.
Detail
Cooling US Data Weakens Dollar Amid Energy Risks (17 – 21 August)Global markets entered the week with the US dollar under renewed pressure as softer inflation, retail sales, and employment data reduced expectations for another near-term Federal Reserve rate hike. The Dollar Index traded around 99.61, while markets assigned roughly a 65% probability that the Fed will keep rates unchanged at 3.50%–3.75% in September. Gold and silver extended their gains as the shift in Fed expectations supported precious metals, while the euro and pound benefited from the dollar’s declining yield advantage.
DetailThen Join Our Telegram Channel and Subscribe Our Trading Signals Newsletter for Free!
Join Us On Telegram!
