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Gold fell to 4,047 USD per ounce on Tuesday, erasing gains from the previous session. Pressure on the metal is mounting amid fears that the Federal Reserve may raise rates as early as this week.

Markets currently estimate the probability of such a move on Wednesday at over 33% – an unusually high level of uncertainty for the period immediately preceding a central bank meeting.

Investors speculate that a rate hike would allow Fed Chairman Kevin Warsh to reaffirm his commitment to fighting inflation, following repeated promises to restore price stability.
The Fed meeting begins today and concludes on Wednesday evening with a rate decision and accompanying comments.

Additional pressure on gold came from falling oil prices after Donald Trump spoke of "good negotiations" with Iran. This eased inflation concerns, although the US President warned of a readiness to resume strikes if talks fail.

Technical Analysis

On the H4 XAU/USD chart, the market formed a consolidation range around the 4,110 USD level and, following a downside breakout, completed a downward move to 4,036 USD. A consolidation range is now forming around this level. A move lower towards 3,940 USD is expected. The MACD indicator confirms ongoing downside momentum, with its signal line above the centre line and turning lower.

On the H1 chart, the market broke below the 4,090 USD level and then moved lower to 4,036 USD. A correction towards 4,070 USD is expected next, with a wide consolidation range forming around this level. The Stochastic oscillator confirms this scenario, with its signal line above 20 and pointing upwards towards 50, indicating the potential for a short-term corrective rebound.

Conclusion

Gold has come under pressure as markets brace for a potential Federal Reserve rate hike this week, with the probability of a move on Wednesday exceeding 33% – an unusually high level of pre-meeting uncertainty. Investors believe a hike would signal Chairman Warsh's renewed commitment to tackling inflation. The Fed meeting gets underway today, with the rate decision due tomorrow. Further pressure came from falling oil prices following Trump's comments on "good negotiations" with Iran, which temporarily eased inflation concerns despite the risk of renewed strikes. Technically, gold appears poised for further downside towards 3,940 USD, with any recovery likely to be capped by the Fed's policy outlook. The central bank's decision and forward guidance will be the key catalysts for gold's near-term direction.

TL;DR: RBA Governor Michele Bullock has reframed Wednesday's Q2 CPI report — the question isn't whether core inflation is elevated, but whether it's hot enough above 3.8% to justify an August RBA hike, with AUD/USD stalled at resistance ahead of the release.

Why This CPI Report Matters

Australia's Q2 CPI report is shaping up as the defining domestic event before the Reserve Bank of Australia's August 11 meeting. But Governor Michele Bullock may have already reframed how markets should interpret the numbers. The issue isn't whether the RBA retains a tightening bias — it clearly does. The more important question is whether, after three rate hikes this year and a pause in June, there's any pressing need to tighten again immediately.

Unless Wednesday's inflation data delivers a meaningful upside surprise, Bullock's latest remarks suggest policymakers are comfortable giving previous rate increases more time to work.

What Bullock Actually Signaled

In a speech today, Bullock left little doubt that another hike remains on the table, stating the Board is "prepared to act as required to achieve its mandate, including by increasing the cash rate further if needed." Yet that statement was balanced by a more nuanced read on current conditions — she noted that underlying inflation has evolved broadly as expected since May, while acknowledging both housing activity and the labor market have softened more than the RBA had anticipated.

Those developments matter because they point to monetary policy exerting greater restraint on demand than the Bank itself expected only months ago. In other words, Bullock didn't dilute the tightening bias — she signaled the urgency to use it has diminished.

The Number That Actually Matters: 3.8%

That distinction makes Wednesday's CPI report less about whether inflation remains elevated and more about whether it's sufficiently stronger than expected to justify acting again in August. The quarterly trimmed mean inflation measure remains the RBA's preferred guide, with consensus looking for a 0.9% qoq increase after 0.8% previously — lifting the annual pace from 3.6% to 3.7%.

That would mark a fourth consecutive quarterly reading within the 0.8%–1.0% range, confirming underlying inflation remains stubbornly sticky. Critically, it would still sit just below the RBA's own May Statement on Monetary Policy forecast of 3.8% yoy — and that comparison may matter more than the consensus figure itself:

• A print at or above 3.8% would suggest inflation is running hotter than the RBA anticipated, restoring a pressing case for an August hike
• A print around 3.7% or lower would reinforce Bullock's view that inflation is evolving as expected, giving the Board little incentive to tighten immediately

Headline CPI is expected to rise just 0.7% qoq after 1.4% in Q1, with annual inflation holding at 4.1% thanks to lower fuel prices — comfortably below the RBA's own May baseline forecast of 4.8%, leaving the policy focus squarely on the trimmed mean.

ActionForex's Technical View on AUD/USD

The rebound from the 0.6864 short-term low has stalled at a key resistance zone: the 55-day EMA (now at 0.7008) and the 38.2% retracement of 0.7277 to 0.6864, at 0.7022.

Three Factors Capping the AUD/USD Rally

AUD/USD is facing three headwinds limiting its rally:

• Receding RBA hike expectations — Bullock's tone suggests policymakers are in no rush to tighten again immediately.
• Elevated Fed rate-hike expectations — a residual effect of the oil shock rather than its current direction. Brent has fallen sharply this week on the US-Iran pause, but at $83–88 it remains well above July's $70 low, and the month's spike toward $100+ has left markets pricing meaningfully higher odds of a September Fed hike than two weeks ago. The drag on AUD/USD isn't where oil trades today — it's what the month's move has already done to rate expectations.
• Deteriorating risk appetite — regional technology stocks continue to struggle, weighing on the Australian Dollar. The KOSPI lost 10.84% today while the Nikkei fell 3.95% as markets reacted to concerns over Nvidia's "circular financing" model.

What Happens Next: CPI, the Fed, and the Path for AUD/USD

A stronger-than-expected Q2 CPI print tomorrow might give AUD/USD a brief bounce. But that momentum won't sustain unless the other two factors resolve. More importantly, the Fed rate decision also lands tomorrow, and a hawkish FOMC vote could easily overturn any CPI-driven boost.

On the other hand, a weaker-than-expected CPI report — or even an in-line print — could finally bring sellers in and push AUD/USD decisively through the 0.6964 minor support and the near-term rising channel floor. That would strongly argue the rebound from 0.6864 has completed as a corrective bounce, with a retest of the 0.6864 low likely next and the broader downtrend from 0.7277 poised to resume.

Key Takeaways

• The critical CPI threshold is 3.8% yoy trimmed mean — at or above revives August hike odds; at or below 3.7% supports an RBA pause
• Bullock's tone suggests the RBA's tightening bias is intact, but urgency to act again immediately has diminished
• AUD/USD is capped by three factors: fading RBA hike bets, lingering Fed hawkishness from the oil spike, and risk-off pressure from Asian tech selloffs
• Wednesday's Fed decision could overturn any CPI-driven AUD/USD bounce regardless of the print
• A break below 0.6964 would confirm the rebound from 0.6864 as corrective, opening a retest of that low and a resumption of the downtrend from 0.7277
  

• The de-escalation of the conflict in the Middle East has sent Brent prices tumbling.
• The oil market could return to a surplus as early as the end of 2026.

The US dollar and oil have lost their correlation. Brent recorded its worst daily fall in three months after reports of a ceasefire in the Middle East, and it continued to slide amid US optimism on progress in negotiations with Iran. Previously, falling Brent prices tended to weaken the greenback by reducing expectations of higher inflation and further Fed rate hikes. This time, investors fear the Federal Reserve could make a surprise move.

CME derivatives put the odds of a monetary policy tightening in July at 38%, the highest uncertainty since September 2024. If the central bank surprises the markets, this could provide fresh tailwinds for the US dollar.

Brent prices are under pressure as the conflict in the Middle East de-escalates. According to Macquarie Bank, the conflict will end within weeks rather than months, owing to the approaching US mid-term elections. As a result, the company believes the oil market could see a surplus of 2 million barrels per day as early as the fourth quarter. In the first quarter of 2027, the surplus is set to double.

Although traffic through the Strait of Hormuz remains subdued, oil continues to flow through the Red Sea. According to Kpler’s estimates, around 25 tankers have passed through the Bab el-Mandeb Strait. As long as the Houthis’ threats remain unfulfilled, the market breathes a sigh of relief. Meanwhile, the Caspian Pipeline Consortium’s resumption of operations in the Black Sea further eases fears of supply disruptions and contributes to the fall in Brent prices.

Nevertheless, the bulls are not giving up. Barclays claims that oil flows through the Strait of Hormuz have fallen from 5.9 million bpd to 2.9 million bpd, whilst Société Générale believes that around 4% of global supplies are at risk. Furthermore, each month of conflict in the Middle East will add $10 per barrel to Brent’s price.

Prices will find it harder to return to pre-war levels, as evidenced not only by the fragile ceasefire but also by expectations that Chinese imports will rise from a 10-year low of 6.2 million bpd in June to 7.8 million bpd in July. Rising global oil demand will keep Brent prices high even as the conflict in the Middle East continues to de-escalate.

The FxPro Analyst Team

EUR/USD is still extending consolidations from 1.1323 and intraday bias remains neutral. Outlook stays bearish with 11499 support turned resistance intact. On the downside, break of 1.1323 will resume the fall from 1.2081 to 100% projection of 1.2081 to 1.1408 from 1.1848 at 1.1175. However, decisive break of 1.1499 will turn bias back to the upside for 1.1621 resistance.

In the bigger picture, focus is back on 38.2% retracement of 1.0176 to 1.2081 at 1.1353. Decisive break there will revive the case of medium term bearish trend reversal after rejection by 1.2 key cluster resistance level. Further fall should be seen to 61.8% retracement at 1.0904. Nevertheless, strong rebound from 1.1353, followed by break of 1.1621 resistance, will retain medium term bullishness.

Intraday bias in USD/JPY remains neutral for the moment. Consolidations should be brief as long as 55 4H EMA (now at 163.10) holds. Above 153.97 will resume larger up trend to 138.2% projection of 152.25 to 160.71 from 155.01 at 166.07. However, sustained break of 55 4H EMA will argue that it's already correcting the rise from 155.01, and bring deeper fall to 160.46 cluster support (38.2% retracement of 155.01 to 163.97 at 160.54.

In the bigger picture, rise from 139.87 (2025 low) is seen as another rising leg of the long term up trend. Next target is 61.8% projection of 139.87 to 159.44 from 152.25 at 164.34. Firm break there will target 100% projection at 171.82. For now, outlook will remain bullish as long as 159.44 resistance turned support holds, even in case of deep pullback.

GBP/USD's fall from 1.3557 continues today and intraday bias stays on the downside. Corrective pattern from 1.3867 high is extending with another downleg. Deeper fall would be seen to retest 1.3139 support. On the upside, above 1.3394 minor resistance will turn intraday bias neutral again first.

In the bigger picture, price actions from 1.3867 are a corrective pattern within the broader up trend from 1.0351 (2022 low). With 1.3008 support intact, medium term bullishness is maintained and break of 1.3867 is in favor for a later stage, towards 1.4248 key resistance (2021 high). However, firm break of 1.3008 will at least bring deeper fall to 38.2% retracement of 1.0351 to 1.3867 at 1.2524, with increased risk of bearish reversal.

USD/CHF's rally resumed after brief consolidations and intraday bias is back on the upside. Firm break of 100% projection 0.7603 to 0.8041 from 0.7600 at 0.8198 will extend the rally from 0.7603 to 161.8% projection at 0.8469. On the downside, below 0.8137 minor support will turn intraday bias neutral again first.

In the bigger picture, focus is now on 38.2% retracement of 0.9200 (2025 high) to 0.7603 at 0.8213. Decisive break will argue that USD/CHF is reversing the medium term trend, and turn focus to 0.8332 support turned resistance (2023 low) for confirmation. Nevertheless, rejection by 0.8213 will maintain medium term bearishness for another fall through 0.7603 at a later stage.

No change in AUD/USD's outlook and intraday bias remains neutral. On the downside, firm break of 0.6964 will argue that rebound from 0.6846 has completed as a correction, after rejection at 38.2% retracement of 0.7277 to 0.6864 at 0.7022. Intraday bias will be back to the downside for retesting 0.6864 low. However, sustained break of 0.7022 will bring stronger rally to 61.8% retracement at 0.7119 next.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top could be formed at 0.7277 after failing to sustain above 61.8% retracement of 0.8006 (2021 high) to 0.5913 (2024 low) at 0.7206. Deeper fall could be seen to 38.2% retracement of 0.5913 to 0.7277 at 0.6756 as a correction. But strong support should be seen there to bring rebound. Consolidations would continue below 0.7277 for a while.

USD/CAD's breach of 1.4115 resistance suggests that corrective pullback from 1.4247 has already completed at 1.4002. Intraday bias is back on the upside for retesting 1.4247 first. In case of another fall, downside should be contained by 1.3965 cluster support (38.2% retracement of 1.3480 to 1.4247 at 1.3954 to bring rebound.

In the bigger picture, current development suggests that fall from 1.4791 has completed as a three wave correction to 1.3480. It's still early to judge if rise from there a corrective bounce, or resumption of the larger up trend from 1.2005 (2021 low). But in either case, retest of 1.4791 high should be seen next.

No change in GBP/JPY's outlook and intraday bias stays neutral. More consolidations would be seen below 219.56. Downside should be contained by 216.39 support to bring another rally. On the upside, firm break of 219.56 will extend larger up trend to 220.90 fibonacci projection level next.

In the bigger picture, the long term up trend is in progress. Next target is 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90. For now, outlook will remain bullish as long as 55 W EMA (now at 208.95) holds, in case of pullback.