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U.S. headline inflation held steady in July, with the PCE price index unchanged at 2.6% yoy. Core measure ticked up to 2.9% from 2.8%, in line with forecasts. On a monthly basis, PCE rose 0.2% mom, and core prices increased 0.3% mom, pointing to modest but persistent price pressures.

Personal income rose 0.4% mom and spending climbed 0.5% mom, both as expected. The data suggest households remain resilient despite elevated borrowing costs, giving the Fed little urgency to accelerate easing.

Full US personal income and outlays release here.

USD/JPY has extended its gradual decline from the 28 July 2025 high of 150.92, losing -2.6% to reach an intraday low of 147.00 at the time of writing.

Today’s Tokyo inflation data and August consumer confidence figures reinforce expectations of a potential 25-basis-point rate hike by the Bank of Japan in October, as it continues along its path of monetary policy normalization.

Tokyo inflation and Japan consumer confidence support another BoJ rate hike

Fig. 1: Tokyo core-core inflation & Japan Consumer Confidence as of Aug 2025 (Source: TradingView)

Tokyo core-core inflation (excluding food and energy) rose by 3% y/y in August, a slight slowdown from July’s print of 3.1% but still well above BoJ’s long-term inflation target of 2% (see Fig. 1).

Japan’s consumer confidence index improved further to 34.9 in August from its current year-to-month low of 31.2 printed in April. This marked the highest reading since January seen across all the components; overall livelihood (32.7 vs 31.4 in July), income growth expectations (39.4 vs 38.5), employment outlook (39.3 vs 37.6), and willingness to purchase durable goods (28 vs 27.4).

Fig. 2: USD/JPY minor trend as of 29 Aug 2025 (Source: TradingView)

Preferred trend bias (1-3 days)

Bearish bias below 148.00/148.18 key short-term pivotal resistance.

A break below 146.40 intermediate support (minor swing low area of 14 August 2025) opens the scope for a further potential slide towards the next supports at 145.85 (minor swing lows of 8 July/10 July/24 July 2025) and 145.50 (the lower boundary of the ascending range configuration) (see Fig. 2).

Key elements

• Price actions of the USD/JPY have traded back below its 20-day moving average, and it is now challenging the 50-day moving average.
• The USD/JPY is still oscillating within a medium-term ascending range configuration since the 22 April 2025 low of 139.90.
• The hourly Stochastic oscillator is now attempting to shape a bearish breakdown from its parallel ascending support, which suggests a potential resurgence of bearish momentum conditions at least in the short term.

Alternative trend bias (1 to 3 days)

The key near-term risk event is the upcoming release of July’s US core PCE inflation, along with personal income and spending data later today, which will play a pivotal role in shaping Federal Reserve rate cut expectations ahead of the September FOMC meeting.

A clearance above 148.18 invalidates the bearish scenario and sees a squeeze up towards the upper limit of the medium-term ascending range configuration for the next intermediate resistance to come in at 148.75 (also close to the 200-day moving average).

As the NZD/USD chart shows, the New Zealand dollar was trading around 0.5820 against the US dollar on Wednesday, but today it has climbed above 0.5895 – an impressive gain of approximately 1.4% in just two days.

The rise in NZD/USD is being driven both by the general weakening of the US dollar ahead of the Federal Reserve’s expected September rate cut, and by strengthening demand for the “kiwi”. As Reuters notes:

→ the New Zealand dollar is often used as a substitute for the yuan because of close trade relations with China;

→ meanwhile, the yuan is strengthening, with Chinese policymakers recommending support for the currency given its low valuation and the need to facilitate trade negotiations with the US.

Technical Analysis of the NZD/USD Chart

It’s worth paying attention to the unusual trading activity (marked by the arrow) and its context:

→ it was the lowest level in more than four months;

→ after a sharp decline, the price stabilised near the lower boundary of the channel;

→ trading was fairly active, and although the price was drifting lower, it failed to generate strong bearish momentum.

It is possible that so-called Smart Money was attracted by the undervalued asset, preventing further declines through buy orders and accumulating long positions. If so, from this perspective it is notable that:

→ the 0.5820 level acted as support on Wednesday – the price rebounded sharply;

→ yesterday NZD/USD moved into the upper half of the channel, breaking through the 0.5875 resistance.

This week’s price rise has formed a trajectory marked by purple lines. NZD/USD might be heading towards the upper boundary of the ascending channel, with the following resistance levels standing out along the way:

→ the former support at 0.5910;

→ the 50% Fibonacci retracement level from the A→B move.

An attempt to break through this resistance zone could result in a pullback towards the lower boundary of the purple channel.

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Gold (XAUUSD) is holding steady near USD 3,410 per ounce on Friday, just shy of its monthly high, and is set to close its second straight week with gains. The metal is supported by a weaker dollar and consistent safe-haven demand as uncertainty over the Federal Reserve’s policy path lingers.

Dollar weakness and Fed uncertainty support gold

Investors are moving into gold amid concerns that political pressure on the Fed could accelerate the pace of rate cuts. Markets are already pricing in a 25 basis point cut in September. Further support came from Fed Board member Christopher Waller, who said he expects rates to begin falling as early as next month, aligning with other policymakers’ dovish stance.

Attention now turns to the upcoming US household spending report, which is forecast to show stronger growth. This follows revised Q2 GDP data, which revealed slightly higher-than-expected economic expansion. However, concerns about rising inflation are also mounting, keeping gold attractive as a hedge.

Overall, August is shaping up to be gold’s strongest month since April, with prices consolidating at the upper end of the range, underpinned by a mix of dollar weakness and growing economic uncertainty.

Technical analysis of XAUUSD

On the H4 timeframe, gold completed a growth wave to 3,423, marking a local target. A decline towards 3,371 is now in play, with the market continuing to develop a wide consolidation range around this level. A downward breakout would open the way to 3,290, while an upward breakout could extend the range to 3,431 before the downtrend resumes towards 3,290. The MACD indicator supports this view: its signal line is above zero at the highs but has left the histogram zone, a sign of potential weakness and the beginning of a move towards new lows.

On the H1 chart, XAUUSD formed a consolidation range around 3,368 and broke upwards, completing the third growth wave at 3,420. The market has now started a downward correction towards 3,368. After reaching this level, a compact consolidation range is expected. A downward breakout would confirm continuation of the decline to 3,290, while an upward breakout could produce another growth structure towards at least 3,425. The Stochastic oscillator confirms the bearish correction, with its signal line below 50 and heading strictly towards 20.

Summary

Gold is consolidating near highs after its best monthly performance since April. While short-term corrections towards 3,371 and 3,290 remain likely, broader support from a weak dollar, Fed policy uncertainty, and inflation concerns continues to underpin the bullish outlook. Resistance levels are at 3,423–3,431, while support lies at 3,371 and 3,290.

The ECB’s July Consumer Expectations Survey showed households continue to see inflation remaining above target in the near term, with 12-month expectations steady at 2.6% and three-year expectations edging higher to 2.5% from 2.4%. Five-year inflation expectations were unchanged at 2.1% for an eighth consecutive month, underscoring anchored long-term views.

Notably, uncertainty around one-year inflation stayed at its lowest since January 2022, with the median at 1.6%. This suggests households feel more confident about the inflation outlook, even as near-term expectations remain somewhat elevated.

Growth and labor market expectations turned more downbeat. Economic growth was expected to contract by -1.2% over the next 12 months, compared with -1.0% in June. Unemployment expectations rose to 10.6% from 10.3%. The results highlight continued pessimism about the Eurozone’s economic prospects despite inflation stability.

Full ECB consumer expectations survey results here.

Daily Pivots: (S1) 1.1641; (P) 1.1670; (R1) 1.1710; More...

Intraday bias in EUR/USD remains neutral for the moment. Further rise is in favor as long as 1.1573 support holds. Break of 1.1741 will resume the rally from 1.1390 to retest 1.1829 high. Firm break there will extend larger up trend. However, decisive break of 1.1573 will extend the corrective pattern from 1.1829 with another downleg, and target 1.1390.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

Daily Pivots: (S1) 146.56; (P) 147.03; (R1) 147.41; More...

Intraday bias in USD/JPY remains neutral for the moment. On the downside, firm break of 146.20 will resume the fall from 150.90. Also, that would argue that rebound from 139.87 has completed as a corrective move to 150.90. Deeper fall should be seen to 142.667 support for confirmation. On the upside, above 148.76 will bring another rise to retest 150.90 instead.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 1.3486; (P) 1.3509; (R1) 1.3534; More...

Range trading continues in GBP/USD and intraday bias stays neutral. Further rally is mildly in favor as long as 1.3389 support holds. Above 1.3594 will resume the rebound from 1.3140 to retest 1.3787 high. On the downside, however, break of 1.3389 support will extend the corrective pattern from 1.3787 with another fall, and target 1.3140 support.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3073) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.7991; (P) 0.8017; (R1) 0.8040; More….

Intraday bias in USD/CHF stays mildly on the downside. Deeper fall would be seen to 0.7910 support first. Break there should confirm that corrective rebound from 0.7871 has completed at 0.8170. On the upside, however, break of 0.8073 will turn bias to the upside for 0.8103. Further break there will resume the rebound from 0.7871 through 0.8170 resistance.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

Daily Pivots: (S1) 0.6510; (P) 0.6524; (R1) 0.6546; More...

Intraday bias in AUD/USD remains neutral and corrective pattern from 0.6624 could still extend further. On the upside, firm break of 0.6567 will argue that the correction has completed and bring retest of 0.6624 high. However, break of 0.6413 will extend the correction lower towards 38.2% retracement of 0.5913 to 0.6624 at 0.6352.

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. While stronger rally cannot be ruled out, 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, even in case of another fall through 0.5913, downside should be contained above 0.5506 (2020 low).