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At Jackson Hole on Saturday, ECB President Christine Lagarde credited foreign workers with playing a vital role in supporting the Eurozone economy. She said migration inflows have helped counterbalance reduced working hours and weaker living standards, providing stability during a period of subdued real wage growth.

Lagarde pointed out that although foreign workers represented just 9% of the bloc’s labor force in 2022, they contributed fully half of its growth over the previous three years. "Without this contribution, labor market conditions could be tighter and output lower," she added.

BoE Governor Andrew Bailey warned at Jackson Hole on Saturday that the UK faces an “acute challenge” of weak underlying growth compounded by reduced Labor force participation. He stressed that with ageing demographics unlikely to reverse, raising productivity growth must become a priority to offset the economy’s structural drag.

Bailey said the BoE has shifted its focus from long-term unemployment trends to participation rates, noting that the proportion of working-age Britons active in the Labor market remains lower than before the pandemic, unlike in most advanced economies. While he cautioned that survey data contains caveats, he argued they do not fully explain the shortfall.

Calling it a “pretty sad story for the UK,” Bailey said diminished participation leaves the UK at the bottom of global rankings. This structural weakness is also feeding into inflation concerns, with some policymakers fearing that limited Labor supply is one reason why UK inflation, at 3.8% in July, remains the highest in the G7.

BoJ Governor Kazuo Ueda told a Jackson Hole panel on Saturday that Japan’s labor shortages are becoming “one of our most pressing economic issues.” He highlighted that wage growth, once concentrated in large enterprises, is now spreading to smaller firms.

Ueda said that barring a major negative demand shock, "the labor market is expected to remain tight and continue to exert upward pressure on wages". He noted that the demographic shifts set in motion since the 1980s are now driving both "acute labor shortages and persistent upward pressure on wages"

According to Ueda, these shifts are forcing supply-side adjustments, including higher participation rates, greater labor mobility, and increased capital-labor substitution. He pledged the BoJ will "continue to monitor these developments closely and incorporate our assessment of evolving supply-side conditions into the conduct of monetary policy."

Retail spending levels rose 0.5% in the June quarter, beating expectations. Retail sector conditions remain tough, but we are starting to see signs of the long-awaited recovery taking shape.

June quarter retail sales

• Retail sales (volume of goods sold): +0.5% (Prev: +0.8%)
• Westpac f/c: -0.7%, Market: -0.3%
• Core retail sales (volume of goods sold): +0.7% (Prev: +0.4%)
• Nominal retail sales: +0.1% (Prev: +1.4%)

Year to June

• Volume of goods sold: +2.3%
• Nominal sales: +2.5%

Retail spending stronger than expected in the June quarter

The June retail spending report was better than expected. While overall spending growth is still modest, spending appetites are gradually firming, including a lift in some discretionary categories.

Retail spending rose 0.5% over the June quarter. That’s the third quarter in a row that spending levels have been pushing higher. The result was well ahead of our own forecast and the average market forecast for a fall in spending over the June quarter.

At first glance, today’s result seems at odds with comments from the retail and hospitality sectors of continued soft trading conditions. But digging under the surface, we can start to see what’s going on.

In several sectors (especially durable items for the home), spending levels remain well down on the levels we saw in 2021. In addition, while spending levels are turning higher, spending growth remains quite modest – the volume of goods sold rose around 2.5% over the past year, compared to gains of around 4.5% per annum before the pandemic.

But while the retail sector is still confronting some tough trading conditions, we are starting to see signs that the long-awaited recovery is taking shape. Spending levels have risen for the past three quarter. That includes gains in discretionary areas like recreational goods and electronics. However, it is still a mixed picture with spending in sectors like hospitality still flat.

What’s the outlook for the rest of 2025?

Today’s update is an encouraging sign for spending over the remainder of 2025. Spending levels are already pushing higher, and the full impact of the large reductions in interest rates over the past year is yet to be felt.

Over the coming months, increasing numbers of borrowers will be rolling on to lower borrowing rates. The related lift in disposable incomes could be sizeable in some cases, and that’s set to boost spending through the latter part of the year.

There are still some headwinds for the retail sector. Most notably, unemployment is likely to rise around to 5.3% before the end of the year.

Even so, it looks like a recovery in the retail sector is now taking shape.

Implications for GDP growth

We’re forecasting flat GDP growth over the June quarter. Today’s result was ahead of our expectations. However, we’ll take a closer look at how our forecast for GDP growth is shaping up over the next couple of weeks as additional data on June quarter activity is released.

Dow (YM) Futures bounced from the extreme support zone and broke to new highs, extending April’s bullish cycle. This post shows how our Elliottwave analysis positioned members ahead of the move—spotting the setup before the breakout.

Following the end of the February 2025 pullback that corrected the bullish cycle from October 2022, a new bullish cycle started on 7th April 2025. This cycle marked the 5th wave of the long term bullish cycle from March 2020. The April 2025 bullish cycle broke into a new high on 28th July 2025. Following this breakout, we recommended to members to buy at the extreme of the 3/7/11 swing pullback. Our system focuses on buy pullbacks within a bullish trend. Likewise, when the sequence is bearish, we prefer to sell at the extreme of corrective bounces. However, we do not just trade any structures. We like to trade off the extreme of a zigzag/double zigzag/triple zigzag corrective structure. We traded the double

Understanding the Double Zigzag (7-swing structure) in Elliott Wave Theory

In Elliott Wave analysis, a double zigzag is a complex corrective pattern that helps the market correct deeper than a single zigzag. It’s labeled as W-X-Y, where:

• W and Y are both zigzag structures (5-3-5)
• X is a connecting wave, often a simple corrective move

Key Traits of a Double Zigzag:

• It appears in corrective phases, especially when the market needs to retrace more aggressively.
• The second zigzag (Y) often reaches the 100% of W from X
• It’s more directional than other complex corrections, making it easier to trade with proper wave identification.

Tip: When you spot a zigzag that doesn’t seem to complete the correction, watch for an X wave followed by another zigzag—it might just be a double zigzag unfolding.

After the Dow (YM) marginally reached a new high in July, it pulled back and rallied again in a clear 5-wave structure. Thus, on the shorter cycle, we waited for a perfect 3/7/11 swing and recommended to members to buy at the extreme.

YM Elliott Wave Analysis – 22 August 2025 Update

On 22nd August, we shared the chart above showing a 7-swing pullback for wave 2 of (5). The wave (5) is to be the 5th wave of the April cycle. While incomplete, we decided to buy at the extreme of the wave 2 of (5), anticipating to profit off wave 3 of (5) rallies. Price reached the 44757-44422 buying zone and bounced sharply as the chart below shows.

YM Elliott Wave Analysis – 23 August 2025 Update

The chart above is the H1 23-August weekend update we shared to members. A perfect reaction from the extreme zone put buyers in good profit while anticipating for more. Going into the new week, we will still anticipate support from the extreme of a 3/7/11 swing pullback toward a new high. We will alert members with new H1 charts several times a day, as price action develops.

Ethereum: ⬆️ Buy

• Ethereum broke above the resistance level 4750.00
• Likely to rise to resistance level 5000.00

Ethereum cryptocurrency recently reversed up from the support area between the support level 4115.00 (former multi-month high from December), upper trendline of the recently broken up channel from June and the 50% Fibonacci correction of the upward impulse from the start of August.

The upward reversal from this support area accelerated the active impulse wave 3 of the higher order impulse wave (3) from June.

Having just broke above the resistance level 4750.00, Ethereum cryptocurrency can be expected to rise to the next round resistance level 5000.00 (target for the completion of the active impulse wave 3).

Gold’s hopes for an aggressive cut in the Fed’s federal funds rate, the associated decline in Treasury bond yields, and the weakening of the US dollar have not yet materialised. The Fed is likely to ease monetary policy in September. However, it may then pause again. Its slowness is bringing investors’ interest back to the greenback.

Clouds are gathering over the precious metal due to Donald Trump’s efforts to end the armed conflict in Ukraine. The start of hostilities, followed by the West’s freezing of Russia’s gold and foreign exchange reserves, was the starting point for the Gold’s rally. Since February 2022, gold has risen 1.7x and reached a record high of more than $3,500 per ounce in April. The rally was driven by de-dollarisation, active buying of bullion by central banks, and increased demand for ETFs.

In the second quarter, central bank activity in the precious metals market declined significantly, and capital flows into specialised exchange-traded funds slowed. Without these advantages, XAUUSD can forget about recovering the upward trend. However, the favourable external background in the form of monetary stimulus from the Fed, lower Treasury yields, and a weaker US dollar in the medium term will give gold a boost.

The gold chart clearly shows consolidation since April, with the price right in the middle of the 12% range from peak to correction lows. This tedious five-month movement to the right is likely to end in the coming weeks, as August often marks the start of major trends in gold. The duration of consolidation is often directly proportional to the strength of the breakout.

From a technical analysis perspective, given the accumulated overbought condition, the downside potential is huge – up to $3000 or even $2200 per ounce. However, the upside potential is no less impressive: $4600 in an extreme bullish scenario, including the Fed switching to a mode of absolute softness.

The past week marked one of the most decisive turns for markets in months. Fed Chair Jerome Powell’s Jackson Hole speech was the clear catalyst, tilting Fed closer to easing and sparking a rally that lifted Wall Street to new highs. Dollar, by contrast, tumbled sharply.

On the surface, Swiss Franc and Yen came out on top in weekly FX performance, supported early by risk aversion but now facing pressure as Fed easing hopes drive global stocks higher. Euro also gained, bolstered by resilient Eurozone data that hinted the bloc may be handling trade headwinds better than feared.

On the other side, Kiwi was weighed down by RBNZ’s dovish cut, which left the door wide open for more easing both this year and next. Aussie tracked lower in sympathy, though its fate hinges on whether it can decouple from its weaker neighbor. Sterling also lagged despite firmer inflation readings.

Dollar ended in the middle of the pack, along with Loonie. But the greenback’s late-week slide suggests this is more than just a temporary adjustment. Selling momentum is likely to extend, at least for the near term, until incoming data like non-farm payrolls give fresh guidance.

Powell Tilts Fed Toward September Cut, Yet Consensus Still Fractured

US equity markets roared higher on Friday as investors embraced Fed Chair Jerome Powell’s Jackson Hole speech as a dovish pivot. DOW jumped 846 points, or 1.89%, to a record close at 45,631.74. S&P 500 rose 1.52%, while NASDAQ gained 1.88%, with tech and cyclicals leading broad-based gains. Currency markets told the same story in reverse. Dollar was dumped across the board, extending sharp losses as traders repriced the Fed outlook.

The key line was Powell’s acknowledgment that “with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” Markets interpreted this as the clearest sign yet that Fed is edging toward rate cuts.

Powell’s wording suggests that Fed has effectively looked through tariff uncertainty and is now more concerned about the slowdown in the labor market. In effect, the central bank may have shifted from a “no move unless there is a surprise” stance in July to a “cut unless there is a surprise” stance heading into September.

Fed fund futures quickly reflected the shift in tone. Probability of a September cut, which had dipped near 70% earlier in the week following robust US PMI data, rebounded to around 85%. While still shy of the 90%-plus odds seen a week ago, the repricing was swift and decisive after Powell’s speech.

That said, Powell’s view is not necessarily the consensus within Fed. Hawks have continued to push back against market optimism. Cleveland Fed President Beth Hammack reiterated that if the FOMC were meeting tomorrow she “would not see a case for reducing interest rates,” citing persistently high inflation that's “trending in the wrong direction”.

Kansas City Fed President Jeffrey Schmid voiced similar caution, stressing that with inflation still closer to 3% than 2% and the labor market stable, there was “no rush” to cut. He said policymakers would need “very definitive data” before justifying a move.

This hawkish resistance means any September rate cut is likely to be accompanied by a split vote. Powell may have nudged the Fed toward easing, but consensus remains elusive. The committee is far from united on whether inflation progress is sufficient to justify a pivot.

Beyond September, the path looks even less certain. Unless incoming data — particularly the next NFP and CPI releases — shift hawkish views, the Fed is unlikely to commit to an aggressive easing cycle. A cautious, data-dependent path remains the most likely scenario.

For now, markets are content with Powell’s hint. Wall Street has surged to fresh records and the Dollar has slumped, but the real test will be whether upcoming data give Fed hawks reason to relent, or whether they push back hard enough to temper the market’s enthusiasm.

DOW Hits Record, Dollar Index Vulnerable

Powell’s dovish shift at Jackson Hole not only triggered a powerful rally in equities and a broad Dollar selloff but also set up key technical developments across major benchmarks. The breakout in DOW and the vulnerability in Dollar Index are now reinforcing the macro narrative, showing that the policy pivot is translating directly into decisive market momentum.

DOW finally cleared the critical 45,073.63 resistance last week, resuming its long-term uptrend with mild upside acceleration evident in D MACD. The clean breakout validates the bullish structure that has been building for months and sets the stage for further gains.

Near-term outlook will stay bullish as long as 44,789.03 support holds. The next major hurdle comes at 61.8% projection of 28,660.94 to 45,073.63 from 36,611.78 at 46,753.38. This level is in proximity to the upper boundary of the long-term rising channel, implying strong resistance could be seen on the first approach.

However, sustained break above this Fibonacci level, coupled with a decisive break of the rising channel ceiling, could prompt medium-term upside acceleration. Such a scenario would open the door for DOW to push beyond the psychological 50,000 mark toward 100% projection at 53,022.13.

NASDAQ also held up despite a sharp intra-week slump. Downside was contained well above 20,560.17 support, keeping the near-term uptrend intact. The key question now is whether the index can muster enough momentum to break decisively through its own long-term channel resistance. If it succeeds, the path for NASDAQ would be open toward 100% projection of 10088.82 to 20204.58 from 14784.03 at 24899.78 as next medium term target.

Dollar Index, meanwhile, looks increasingly vulnerable. Price action from 96.37 is still viewed as a corrective pattern that could extend. A bounce back toward 100.25 cannot be ruled out. But rejection at 55 D EMA keeps near-term bias tilted lower. The broader risk lies to the downside.

With risk appetite strengthening and equities breaking higher, Dollar Index could soon crack below 96.37 support, confirming resumption of the broader decline from 110.17. That would also threaten the long-term channel that has defined the uptrend since 2008 low at 70.69. Sustained break of the channel would signal the start of a medium-to-long-term downtrend toward levels below 90.

EUR/USD Eyes Structural Test on Policy Divergence

Fed’s dovish tilt and Dollar Index’s vulnerability are not happening in isolation. Developments in Europe are also shaping the outlook, with Eurozone resilience and ECB's pause in easing adding another additional pressure on the greenback.

Last week’s Eurozone data strengthened the case that ECB is now firmly in a prolonged pause. Even if the easing cycle might not have fully ended, there is little urgency to deliver further cuts. As the Fed edges closer to rate reduction, this divergence lends EUR/USD a supportive backdrop.

Eurozone's August PMI reports provided a boost to sentiment. Manufacturing returned to expansion, while services held resilient despite trade frictions and tariffs. The data suggest that Eurozone businesses are coping better than expected with both global and domestic headwinds.

Wages development in Eurozone also remain a key factor. Negotiated pay jumped 3.95% yoy in Q2, up sharply from 2.46% in Q1. While below the peak 5.4% rate of 2024, the rebound underscores the persistence of domestic cost pressures. This stickiness ensures ECB will remain wary of easing too far.

Technically, while EUR/USD's pullback last week was slightly deeper than expected, the strong support from 55 D EMA affirms near term bullishness. The development is so far in line with the case that correction from 1.1829 has completed at 1.1390, and up trend from 1.0176 is ready to resume.

On break of 1.1829, EUR/USD will then be facing a key resistance zone at around 1.2, 38.2% retracement of 1.6039 (2008 high) to 0.9534 (2022 low) at 1.2019. Decisive break of 1.2 will bolster the case that EUR/USD is not just staging a cyclical rebound but is reversing a structural downtrend that has dominated for more than 15 years.

USD/CAD Weekly Outlook

USD/CAD rose to 1.3923 last week but dived sharply from there. Initial bias is turned neutral this week first. Price actions from 1.3538 are seen as a corrective pattern. As long as 1.3720 support holds, another rise could still be seen. However, upside should be limited by 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017). Meanwhile, firm break of 1.3720 will argue that the corrective bounce has already completed, and bring retest of 1.3538 low.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 resistance holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

In the long term picture, as long as 55 M EMA (now at 1.3514) holds, up trend from 0.9056 (2007 low) should still resume through 1.4791 at a later stage. However, sustained trading below 55 M EMA will argue that the up trend has already completed, with rise from 1.2005 to 1.4791 as the fifth wave. 1.4791 would then be seen as a long term top and deeper medium term down trend should then follow.

EUR/USD gyrated lower to 1.1582 last week but rebounded strongly from there. Late breach of 1.1729 resistance suggests that rise from 1.1390 is resuming. Initial bias is now on the upside this week for retesting 1.1819 high first. Firm break there will resume larger up trend. For now, risk will stay on the upside as long as 1.1582 support holds, in case of retreat.

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.

In the long term picture, a long term bottom was in place already at 0.9534, on bullish convergence condition in M MACD. Further rise should be seen to 38.2% retracement of 1.6039 to 0.9534 at 1.2019. Rejection by 1.2019 will keep the price actions from 0.9534 as a corrective pattern. But sustained break of 1.2019 will suggest long term bullish trend reversal, and target 61.8% retracement at 1.3554.