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Daily Pivots: (S1) 0.6555; (P) 0.6568; (R1) 0.6589; More...

Focus is back on 0.6627 resistance in AUD/USD with current extended rebound. Break there will suggest that pullback from 0.6706 has completed as correction, after drawing support from 55 D EMA (now at 0.6546). That will keep the larger rally from 0.5913 alive and bring retest of 0.6706 high. However, on the downside, sustained trading below 55 D EMA will confirm rejection by 0.6713 fibonacci resistance, and bring deeper fall to 0.6413 cluster support (38.2% retracement of 0.5913 to 0.6706 at 0.6403).

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. Outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, sustained break of 0.6713 will be a strong sign of bullish trend reversal, and pave the way to 0.6941 structural resistance for confirmation.

Aussie rallied broadly after the RBA left policy unchanged at 3.60% but issued a statement that leaned hawkish. Traders were quick to note the Bank’s warning that Q3 inflation may come in stronger than projected in August, a reminder that the disinflation path remains far from assured.

The RBA’s tone suggested that the widely expected November cut is far from a done deal. Policymakers appear keen to leave flexibility in case inflation surprises higher, especially if robust consumption and firm labour markets give businesses scope to pass on costs. More importantly, scope for a deeper easing cycle is now more limited than markets had assumed. Even if the RBA delivers one cut in November, follow-up moves may prove difficult.

Meanwhile, Yen also stayed firm, supported by the BoJ’s Summary of Opinions, which revealed growing calls for rate hikes within the board. A number of board members argued that the time for action may be near, adding momentum to expectations of policy normalization.

Yet Japanese data continue to cast doubt on how soon that shift can occur. Industrial production contracted more than expected in August, and retail sales posted their first drop in 42 months. For now, the majority of the Board remains cautious, waiting for more evidence before endorsing a move.

Doves remain in the majority in the BoJ for now, and there is little hard evidence yet to tip the balance decisively toward an imminent hike. The next test will be the quarterly Tankan survey due tomorrow, which will provide a clearer read on business sentiment and capital expenditure plans.

In terms of weekly performance, Aussie is leading the pack for now, followed by Yen and Kiwi. Dollar sits at the bottom, trailed by Swiss Franc and Euro, while Sterling and the Loonie are holding in the middle of the field.

Elsewhere, Asian equities traded mixed after Wall Street’s modestly higher close overnight. Quarter-end lull and caution ahead of key US data — notably ISM Manufacturing tomorrow and non-farm payrolls on Friday — are keeping traders restrained, ensuring a steady but cautious tone across markets.

In Asia, at the time of writing, Nikkei is up 0.01%. Hong Kong HSI is down -0.13%. China Shanghai SSE is up 0.40%. Singapore Strait Times is up 0.40%. Japan 10-year JGB yield is down -0.013 at 1.634. Overnight, DOW rose 0.15%. S&P 500 rose 0.26%. NASDAQ rose 0.48%. 10-year yield fell -0.046 to 4.140.

RBA holds steady at 3.60%, warns Q3 inflation may surprise on upside

The RBA left its cash rate unchanged at 3.60% in a unanimous decision, in line with expectations. The move reflects the Board’s preference to pause while monitoring whether recent economic surprises point to a more persistent inflation challenge.

According to the RBA, recent partial data suggest that September-quarter inflation may come in above projections made in August. At the same time, labor market indicators show conditions have been steady and remain "a little tight", reinforcing the risk that price pressures may not ease as quickly as anticipated.

The Bank outlined two contrasting scenarios for household demand. Stronger consumption may reflect rising real incomes and wealth, potentially allowing firms to raise prices more easily and encouraging further hiring. Alternatively, this consumption rebound may not last if households turn more cautious amid uncertainty around overseas developments.

BoJ summary reveals rising hawkish pressure, but board still divided

The BoJ’s September Summary of Opinions revealed that members debated the feasibility of raising interest rates in the near term, with some arguing that conditions were aligning for another move. The release underscores a growing hawkish tilt inside the Board, even as the majority voted to hold steady at 0.50%.

One member argued that “judging solely from the perspective of Japan’s economic conditions, it may be time to consider raising the policy interest rate again,” noting that more than six months have passed since the last hike. Another highlighted easing concerns from U.S. tariffs, suggesting external impact on inflation had "abated" and that the BoJ could “return to its stance to raise the policy interest rate.”

At the same time, caution was evident. Some warned against surprising markets with a hike, stressing that Japan’s domestic demand remains vulnerable to external shocks. The view was that it would be better to wait for more hard data before making another adjustment.

At the September 18–19 meeting, the BoJ left rates at 0.50%, though two members dissented in favor of a hike to 0.75%.

Japan's industrial output falls -1.2% mom in August, retail sales contracts

Japan’s latest data painted a downbeat picture of economic momentum in August. Industrial production slipped -1.2% mom, falling short of the expected -0.8%. Of the 15 industrial sectors, 12 including metal products, and inorganic and organic chemicals, saw output decreases.

METI maintained its description of output as "fluctuates indecisively". Officials stressed that firms remain highly cautious in their production planning. Still, manufacturers surveyed see output rising 4.1% in September and another 1.2% in October.

Household demand faltered at the same time, with retail sales tumbling -1.1% yoy, marking the first decline in 42 months.

China's NBS PMI points to easing manufacturing weakness, services soft patch

China’s official PMI data for September signaled tentative improvement in industry but lingering softness in services. The NBS Manufacturing PMI rose to 49.8 from 49.4, its highest since March, though it still pointed to contraction. The gauge has been under 50 since April, reflecting headwinds for large and state-linked producers.

The NBS Non-Manufacturing PMI slipped from 50.3 to 50.0, effectively flatlining and pointing to a loss of momentum in construction and services. That stagnation raises questions about the strength of domestic demand, even as authorities step up stimulus efforts.

In contrast, the RatingDog (S&P Global) surveys offered a more optimistic take. Manufacturing improved to 51.2 from 50.5, the strongest since May, suggesting that private and export-focused companies are benefiting from external demand. Services edged down slightly from 53.0 to 52.9 but remained firmly in growth territory.

NZ ANZ business confidence ticks down, but activity outlook improves

New Zealand’s ANZ Business Confidence edged slightly lower in September, slipping from 49.7 to 49.6. Though, Own Activity Outlook improved to 43.4 from 38.7.

Inflation pressures ticked mildly higher. One-year-ahead inflation expectations rose to 2.71% from 2.63%,. The share of firms expecting to raise prices in the next three months climbed to 46%. Cost expectations also edged up, with 75% of respondents seeing higher input costs.

ANZ noted that the RBNZ is positioned to support growth with a lower Official Cash Rate. While the exact path of policy easing remains uncertain, the bank said the OCR will ultimately reach the level required to ensure the recovery takes hold.

Fed’s Williams: Makes sense to ease policy a little bit to support jobs

New York Fed President John Williams said overnight that it made sense for the central bank to ease policy “a little bit” to reduce restrictiveness to support the labor market while maintaining downward pressure on inflation.

Williams acknowledged progress toward the 2% inflation target but cautioned that more work remains. He underscored the Fed’s dual mandate, stressing the need to avoid “undue harm” to employment at a time when job creation has been gradually weakening. “I don’t want to see that go too far,” he said.

Encouragingly, Williams noted that some inflation worries have eased ""The tariff effects have been smaller than most people thought, and there doesn't seem to be any signs of inflationary pressures building," he noted.

Fed’s Musalem open to cuts but urges cautions

St. Louis Fed President Alberto Musalem said monetary policy is now “somewhere between modestly restrictive and neutral.”

Musalem, who votes on policy this year, said he is “open minded” to further rate cuts but stressed that caution is needed. With limited room before policy turns "overly accommodative", he signaled the Fed should proceed carefully.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6555; (P) 0.6568; (R1) 0.6589; More...

Focus is back on 0.6627 resistance in AUD/USD with current extended rebound. Break there will suggest that pullback from 0.6706 has completed as correction, after drawing support from 55 D EMA (now at 0.6546). That will keep the larger rally from 0.5913 alive and bring retest of 0.6706 high. However, on the downside, sustained trading below 55 D EMA will confirm rejection by 0.6713 fibonacci resistance, and bring deeper fall to 0.6413 cluster support (38.2% retracement of 0.5913 to 0.6706 at 0.6403).

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. Outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, sustained break of 0.6713 will be a strong sign of bullish trend reversal, and pave the way to 0.6941 structural resistance for confirmation.

The RBA left its cash rate unchanged at 3.60% in a unanimous decision, in line with expectations. The move reflects the Board’s preference to pause while monitoring whether recent economic surprises point to a more persistent inflation challenge.

According to the RBA, recent partial data suggest that September-quarter inflation may come in above projections made in August. At the same time, labor market indicators show conditions have been steady and remain "a little tight", reinforcing the risk that price pressures may not ease as quickly as anticipated.

The Bank outlined two contrasting scenarios for household demand. Stronger consumption may reflect rising real incomes and wealth, potentially allowing firms to raise prices more easily and encouraging further hiring. Alternatively, this consumption rebound may not last if households turn more cautious amid uncertainty around overseas developments.

Full RBA statement here.

At its meeting today, the Board decided to leave the cash rate unchanged at 3.60 per cent.

The decline in underlying inflation has slowed.

Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and potential supply closer towards balance. Both headline and trimmed mean inflation were within the 2–3 per cent range in the June quarter. Recent data, while partial and volatile, suggest that inflation in the September quarter may be higher than expected at the time of the August Statement on Monetary Policy.

Domestic economic activity is recovering but the outlook remains uncertain.

Data for the June quarter show that private demand is recovering a little more rapidly than expected, taking over from public demand as the driver of growth. In particular, private consumption is picking up as real household incomes rise and measures of financial conditions ease. The housing market is strengthening, a sign that recent interest rate decreases are having an effect. Credit is readily available to both households and businesses.

Various indicators suggest that labour market conditions have been broadly steady in recent months and remain a little tight. Growth in employment has slowed by slightly more than expected, but the unemployment rate was unchanged at 4.2 per cent in August. Measures of labour underutilisation remain at low rates and business surveys and liaison suggest that availability of labour has been little changed of late. Looking through quarterly volatility, wages growth has eased from its peak, but productivity growth has been weak and growth in unit labour costs remains high.

There are uncertainties about the outlook for domestic economic activity and inflation stemming from both domestic and international developments. On the domestic side, stronger-than-expected data on growth and inflation may indicate that households have become more comfortable consuming as real incomes and wealth rise. If this continues, it may make it easier for businesses to pass on cost increases and lead to more demand for labour. Alternatively, the recent growth in consumption might not persist, particularly if households become more concerned about overseas developments.

Uncertainty in the global economy remains elevated. There is a little more clarity on the scope and scale of US tariffs and policy responses in other countries, suggesting that more extreme outcomes are likely to be avoided. Trade policy developments are nevertheless still expected to have an adverse effect on global economic growth over time. Beyond tariffs, a broader range of geopolitical risks remain a threat to the global economy. This could all weigh on growth in aggregate demand and lead to weaker labour market conditions in the domestic economy.

There are also uncertainties regarding the lags in the effect of recent monetary policy easing, the balance between aggregate demand and potential supply for goods and services, conditions in the labour market and the outlook for productivity.

Maintaining price stability and full employment is the priority.

With signs that private demand is recovering, indications that inflation may be persistent in some areas and labour market conditions overall remaining stable, the Board decided that it was appropriate to maintain the cash rate at its current level at this meeting. Financial conditions have eased since the beginning of the year and this seems to be having some impact, but it will take some time to see the full effects of earlier cash rate reductions. The Board judged that it was appropriate to remain cautious, updating its view of the outlook as the data evolve. The Board remains alert to the heightened level of uncertainty about the outlook. It noted that monetary policy is well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia.

The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market. The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.

Decision

Today’s policy decision was unanimous.

China’s official PMI data for September signaled tentative improvement in industry but lingering softness in services.The NBS Manufacturing PMI rose to 49.8 from 49.4, its highest since March, though it still pointed to contraction. The gauge has been under 50 since April, reflecting headwinds for large and state-linked producers.

The NBS Non-Manufacturing PMI slipped from 50.3 to 50.0, effectively flatlining and pointing to a loss of momentum in construction and services. That stagnation raises questions about the strength of domestic demand, even as authorities step up stimulus efforts.

In contrast, the RatingDog (S&P Global) surveys offered a more optimistic take. Manufacturing improved to 51.2 from 50.5, the strongest since May, suggesting that private and export-focused companies are benefiting from external demand. Services edged down slightly from 53.0 to 52.9 but remained firmly in growth territory.

New Zealand’s ANZ Business Confidence edged slightly lower in September, slipping from 49.7 to 49.6. Though, Own Activity Outlook improved to 43.4 from 38.7.

Inflation pressures ticked mildly higher. One-year-ahead inflation expectations rose to 2.71% from 2.63%,. The share of firms expecting to raise prices in the next three months climbed to 46%. Cost expectations also edged up, with 75% of respondents seeing higher input costs.

ANZ noted that the RBNZ is positioned to support growth with a lower Official Cash Rate. While the exact path of policy easing remains uncertain, the bank said the OCR will ultimately reach the level required to ensure the recovery takes hold.

Full ANZ business confidence release here.

Key Highlights

• Gold extended its rally and traded to a new record high above $3,850.
• A key bullish trend line is forming with support at $3,785 on the 4-hour chart.
• WTI Crude Oil prices failed to recover above $66.50 and trimmed gains.
• EUR/USD could struggle to clear the 1.1780 and 1.1800 resistance levels.

Gold Price Technical Analysis

Gold prices formed a base above $3,720 and started a fresh increase against the US Dollar. It cleared many hurdles near $3,750 and $3,800.

The 4-hour chart of XAU/USD indicates that the price settled above the $3,800 level, the 100 Simple Moving Average (red, 4 hours), and the 200 Simple Moving Average (green, 4 hours). The upward move was such that the price spiked above $3,850.

Gold traded to a new record high near $3,851 and might continue to rise. On the upside, immediate resistance is near the $3,855 level. The next major resistance sits near the $3,865 level.

A clear move above $3,865 could open the doors for more upside. In the stated case, the bulls could aim for a move toward $3,900, above which the price could rally toward the milestone level of $4,000.

On the downside, initial support is near the $3,800 level. The first key support is $3,785. There is also a key bullish trend line forming with support at $3,785 on the same chart. The next major support is near the $3,750 level.

A downside break below $3,750 might call for more downsides. The next key zone to watch could be $3,690 and the 100 Simple Moving Average (red, 4 hours).

Looking at WTI Crude Oil, the price attempted a decent recovery wave, but the bears remained active near the $66.50 level.

Economic Releases to Watch Today

• US Housing Price Index for July 2025 (MoM) - Forecast +0.1%, versus -0.2% previous.
• ECB's Nagel speech.
• Fed's Goolsbee speech.

Japan’s latest data painted a downbeat picture of economic momentum in August. Industrial production slipped -1.2% mom, falling short of the expected -0.8%. Of the 15 industrial sectors, 12 including metal products, and inorganic and organic chemicals, saw output decreases.

METI maintained its description of output as "fluctuates indecisively". Officials stressed that firms remain highly cautious in their production planning. Still, manufacturers surveyed see output rising 4.1% in September and another 1.2% in October.

Household demand faltered at the same time, with retail sales tumbling -1.1% yoy, marking the first decline in 42 months.

The BoJ’s September Summary of Opinions revealed that members debated the feasibility of raising interest rates in the near term, with some arguing that conditions were aligning for another move. The release underscores a growing hawkish tilt inside the Board, even as the majority voted to hold steady at 0.50%.

One member argued that “judging solely from the perspective of Japan’s economic conditions, it may be time to consider raising the policy interest rate again,” noting that more than six months have passed since the last hike. Another highlighted easing concerns from U.S. tariffs, suggesting external impact on inflation had "abated" and that the BoJ could “return to its stance to raise the policy interest rate.”

At the same time, caution was evident. Some warned against surprising markets with a hike, stressing that Japan’s domestic demand remains vulnerable to external shocks. The view was that it would be better to wait for more hard data before making another adjustment.

At the September 18–19 meeting, the BoJ left rates at 0.50%, though two members dissented in favor of a hike to 0.75%.

Full BoJ summary of opinions here.

St. Louis Fed President Alberto Musalem said monetary policy is now “somewhere between modestly restrictive and neutral.”

Musalem, who votes on policy this year, said he is “open minded” to further rate cuts but stressed that caution is needed. With limited room before policy turns "overly accommodative", he signaled the Fed should proceed carefully.