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Last week, markets focused on the rising chance of a U.S. rate cut in September. U.S. CPI was weaker than expected, boosting hopes for a cut, while PPI was higher, showing the impact of tariffs on U.S. companies. Despite the mixed data, traders still expect a rate cut next month, helping drive U.S. and Japanese stocks to record highs.

The Reserve Bank of Australia cut rates as expected. In the U.K. and Japan, stronger GDP results lifted both the pound and yen. President Trump also signed an order extending the tariff truce with China for another 90 days, pushing the next key deadline to November 10, 2025, and avoiding an immediate escalation in trade tensions.

Oil prices fell ahead of the Trump–Putin summit where they will discuss ending the war in Ukraine, with markets watching closely for the outcome. Overall, risk sentiment improved as investors weighed trade uncertainty against central bank support and stronger global growth.

Markets This Week

U.S. Stocks

The Dow hit record highs last week, supported by growing expectations of a U.S. rate cut at the September meeting after weaker-than-expected CPI data. However, concerns remain over the negative impact of tariffs, with higher PPI showing the pressure on U.S. companies, and the market is waiting for more data to see the full effect. Overall, the Dow is expected to trade sideways to higher, making buying opportunities more attractive in the near term. Key resistance levels are at 45,000 and 46,000, while support is seen at 44,000, 43,000, and 42,000.

Japanese Stocks

Japanese stocks posted another week of strong gains, with the Nikkei 225 surging to record highs as optimism from the U.S. trade deal continued and momentum followed U.S. equities higher. The index is now up nearly 10% over the past month, so some consolidation is likely, making it better to wait for a pullback to the 10-day moving average before buying or selling in the short term. Key resistance levels are at 44,000円 and 45,000円, while support is seen at 42,000円, 41,500円, and 41,000円.

USD/JPY

The USD/JPY came under selling pressure last week as expectations of a U.S. interest rate cut encouraged selling, while stronger-than-expected Japanese GDP data raised the chances of a rate hike in Japan. The market looks balanced at current levels, so range trading remains the preferred strategy for now. Resistance is at 148, 149, and 150, while support is at 146 and 145.

Gold

Gold prices fell last week as profit-taking at the top of the recent range and record highs in equities reduced demand for the metal. This came despite U.S. rate cut expectations, which remain supportive for gold in the bigger picture. The market is expected to stay well supported at lower levels, creating potential buying opportunities in the week ahead. Resistance is at $3,400 and $3,450, while support is at $3,300, $3,250, and $3,200.

Crude Oil

WTI crude continued its recent downtrend, staying under pressure as bearish sentiment dominated. Prices were weighed down by OPEC+ production increases, weak Chinese economic data, and concerns that tariffs could further reduce demand. In addition, talks between Trump and Putin to end the war in Ukraine raised the risk of more Russian oil supply hitting the market, adding to downside pressure. Selling into strength remains the preferred strategy, with the 10-day moving average pointing lower. Resistance is seen at $65, $70, and $75, while support is at $60 and $55.

Bitcoin

Bitcoin hit record highs last week as traders continued to buy risk assets on expectations of lower U.S. interest rates. However, the market saw a sharp sell-off from the highs after comments from the U.S. Treasury Secretary confirmed there were no plans for further government Bitcoin purchases. A key reversal on Thursday, where the market made a new high but closed lower, along with a close below the 10-day moving average, could limit further upside in the short term. The preferred strategy is to buy on weakness and sell into strength. Resistance is at $120,000, $125,000, and $150,000, with support at $112,000, $110,000, and $105,000

This Week’s Focus

• Monday: E.U. Trade Balance
• Tuesday: U.S. Building Permits, U.S. Housing Starts
• Wednesday: Japan Trade Balance, U.K. CPI, E.U. CPI
• Thursday: U.S. FOMC Meeting Minutes, E.U. HCOB Eurozone Manufacturing PMI, U.K. S&P Global Manufacturing PMI, U.S. Initial Jobless Claims, U.S. S&P Global Manufacturing PMI, U.S. Existing Home Sales, U.S. US Leading Index
• Friday: Japan National Core CPI, U.K. Retail Sales, Germany GDP, U.S. Fed Chair Powell Speaks

This week, traders will stay focused on U.S. interest rate cut expectations. Inflation reports from the U.K. and Japan will also be important, as markets look for clues on when the Bank of England may cut again and if Japan could raise rates after last week’s strong GDP and the new trade deal with the U.S. The Federal Reserve will release minutes from its July meeting, giving more detail on how officials see inflation, growth, and the timing of future moves.

The Jackson Hole Economic Policy Symposium takes place later in the week, bringing together central bankers and policymakers from around the world to discuss the economy and monetary policy. On Thursday, flash PMI data from the U.S., Eurozone, U.K., and Japan will provide an early look at business activity in August. The week ends with Fed Chair Powell’s speech on Friday, which could give new signals on the U.S. economy and interest rates.

Bitcoin’s near-term outlook now hinges on whether 112,000 zone can hold as support after last week’s brief breakout to a record 124,553. The sharp reversal has shifted attention to this key level, with selling pressure still visible as the new week begins.

The current decline was triggered by U.S. Treasury Secretary Scott Bessent, who unsettled markets by revealing government Bitcoin reserves were worth only USD 15–20 billion, far below estimates. He added that Washington would not buy new bitcoin for its strategic reserve, instead relying on confiscated assets to build holdings.

While he later clarified on X that Treasury remained open to “budget-neutral pathways” to expand reserves, confidence took a hit. Investors interpreted the comments as a sign Washington is unlikely to bolster demand in the near term.

Combined with stretched technicals, the backdrop encouraged traders to lock in profits, ending Bitcoin’s latest rally attempt prematurely.

Technically, momentum is fading. Bearish divergences in both the daily and 4-hour MACD highlight loss of upside strength. While another test of the highs cannot be ruled out, gains above 124,553 appear constrained.

Instead, focus has shifted to the 111,889 structural support. Decisive break there would confirm correction of the rally from 74,373, opening the door for a pullback to 38.2% retracement of 74,373 to 124,553 at 105,384.

That could set the stage for either prolonged consolidation or a deeper pullback before any fresh bullish leg.

New Zealand’s BusinessNZ Performance of Services Index improved slightly in July, rising from 47.6 to 48.9. But the sector remained in contraction for the sixth consecutive month. Also, the latest reading is still well below the long-run survey average of 52.9.

Details showed mixed conditions. Activity/Sales stayed in contraction at 47.5, and New Orders stalled at 50.0. On the positive side, Inventories expanded for the second month at 51.4. Employment component slid to 47.1, extending its losing streak to 20 months.

Business sentiment, while slightly less negative, continued to reflect difficult conditions. Around 58.5% of comments were pessimistic, down from 66.2% in June. Firms pointed to declining sales, reduced spending, and persistent cost-of-living pressures. Inflation, high interest rates, weather disruptions, staffing shortages, and global uncertainty all weighed on confidence.

Full NZ BNZ PSI release here.

Ethereum: ⬇️ Sell

• Ethereum reversed from the long-term resistance level 4755.
•  Likely to fall to support level 4115.00

Ethereum cryptocurrency recently reversed from the major long-term resistance level 4755.00 (which stopped the earlier sharp weekly uptrend at the end of 2021).

The downward reversal from the resistance level 4755.00 stopped the previous sharp weekly upward impulse sequence 1 from the start of this year.

Given the strength of the resistance level 4755.00 and the still overbought weekly Stochastic, Ethereum cryptocurrency can be expected to fall to the next support level 4115.00 (former yearly top from 2024).

Markets spent the past week navigating a narrow path between relief and reality. Relief came from headline trade developments that bought more time for diplomacy. Reality showed up in the form of fresh price pressures and unresolved global tensions. The contrast defined how investors approached risk, producing a complex mix of resilience and unease.

On the surface, equity markets offered plenty for the bulls. Major indices in the US and Japan reached fresh highs, fueled by optimism that worst-case trade scenarios could be postponed. Gains were not limited to tech or narrow groups; instead, breadth across sectors and geographies hinted at deeper undercurrents of confidence.

But confidence has limits, and last week exposed them. Price data out of the United States suggested that tariff pass-through effects are already embedding themselves in inflation. This leaves policymakers in a difficult position: acknowledge the risks and hold steady, or push ahead with easing to reassure growth. Neither choice is without cost, and traders know it.

Japan added its own twist. Growth came in stronger than expected, bolstering the case for further monetary adjustment. Investors welcomed the momentum but quickly recognized the tension it created for the yen. A stronger economy that invites tighter policy should support the currency, yet robust global risk appetite continues to suppress its safe-haven appeal.

In the currency markets, the weekly scoreboard told its own story. Sterling emerged as the clear leader, backed by firm data, while euro and yen followed closely. At the bottom, Kiwi, Loonie, and Aussie reflected a mix of weak domestic signals and external headwinds, particularly from China. Dollar and Swiss Franc, meanwhile, drifted somewhere between strength and hesitation.

US Stocks Push Higher, Dollar Stays Fragile Ahead of Long Term Channel Support

Risk appetite held up well last week, with Wall Street finishing higher even as fresh inflation worries clouded the Fed’s outlook. DOW led the pack, advancing 1.74% as cyclical sectors outperformed. S&P 500 gained 0.94%, while NASDAQ managed a more modest 0.81%, signaling that broader market strength extended beyond technology.

The positive tone owed much to the extension of the US-China tariff truce by another 90 days. This bought time for negotiators and gave markets a reprieve from escalation risks. In the same vein, US President Donald Trump’s summit with Russian President Vladimir Putin in Alaska, while failing to yield progress on Ukraine, removed another source of immediate tension. Trump made clear he would not sanction China over its Russian oil imports “for now,” easing fears of a fresh flashpoint in US-China relations.

On the negative side, however, inflation jitters resurfaced. July’s CPI data was largely in line with forecasts, rising 2.7% year-on-year, but core inflation ticked up to 3.1%. While not alarming in itself, the persistence of sticky services inflation raised eyebrows.

The bigger shock came from producer prices. The July PPI surged 0.9% month-on-month, the sharpest increase since mid-2022. The jump was broad-based, with final demand services climbing 1.1% and goods up 0.7%. The core PPI, excluding food, energy, and trade, rose 0.6%—its highest since March 2022. These figures signaled tariff pass-through effects are already feeding into price dynamics.

Fed officials took note. Chicago Fed President Austan Goolsbee said the CPI and PPI data “put in a note of unease,” warning that services inflation was “not obviously transitory.” St. Louis Fed’s Alberto Musalem added that tariff impacts could last two to three quarters, keeping price pressures elevated into 2026, limiting Fed’s flexibility in the coming months.

Even so, markets remain confident of a September cut. Futures now price a 92% chance of a 25bps reduction, while the odds of a jumbo 50bps cut—floated repeatedly by Treasury Secretary Scott Bessent—have effectively vanished. San Francisco Fed’s Mary Daly and others pushed back firmly on the idea of an aggressive move. Traders still expect two cuts this year, with 55% odds for the second cut in October and nearly 87% in December.

Technically, DOW finally broke to a fresh intraday record high. Sustained trading above 45,073.63 key resistance will confirm long term uptrend resumption. That would set the stage for 61.8% projection of 28,660.94 to 45,073.63 from 36,611.78 at 46,753.38. Near term outlook will stay bullish as 43,340.68 support holds, in case of a retreat.

As for Dollar Index, the key question remains unanswered. It's now sitting very close to the long term channel support that started back in 2011. It's an ideal area for Dollar Index to conclude the corrective down trend from 114.77 (2022 high).

But so far, price actions from 96.37 short term bottom did little to warrant that Dollar Index is setting up bullish trend reversal. For now, while another near term bounce could be seen, outlook will stay bearish as long as 101.97 resistance zone holds, (38.2% retracement of 110.17 to 96.37 at 101.64). Break of 96.37 to resume larger down trend is still in favor.

Japan’s Resilience Lifts Nikkei to Record; Yen Stuck in Cross-Currents

Japanese equities also delivered a strong performance last week, with Nikkei 225 closing at a new record weekly high. In the background, risk appetite was bolstered by two major external drivers: the extension of the US–China tariff truce and the formal US–Japan trade deal reached on July 23.

Adding fuel to the rally was the latest Q2 GDP report, which beat expectations at 0.3% qoq growth. The headline result was particularly notable given the persistent drag from tariffs earlier in the year. Exports made a strong contribution with a 0.3 percentage-point boost. The data signals that Japan’s external sector has proven more resilient than feared, helping the economy extend its streak of growth to a fifth straight quarter.

BoJ, which recently upgraded its FY2025 growth outlook to 0.6%, may now find itself facing upside risk to its projections. Market chatter is increasingly shifting to the prospect of another rate hike before year-end, with October flagged as a realistic option. While the BoJ is unlikely to move in September, the stronger data has clearly made the policy debate more balanced.

Technically, with 42426.77 key resistance cleared, Nikkei should now be targeting 100% projection of 25661.89 to 42426.77 from 30792.74 at 47557.62 in the medium term. Near term outlook will stay bullish as long as 39850.52 support holds, in case of retreat.

For Yen, the picture is less straightforward. Rising odds of a BoJ hike should be supportive, but equity strength and risk-on flows are undermining safe-haven demand. For now, the latter appears to be dominating, keeping the currency under pressure even as policy expectations tilt hawkish.

Even against the Swiss Franc, where monetary policy divergence should favor Yen, the currency has failed to mount a convincing rebound. CHF/JPY's pullback from 186.02 short term top is losing momentum as seen in 4H MACD. Even in case of another fall, downside could be contained by 38.2% retracement of 173.06 to 186.02 at 181.06, which is close to 55 D EMA (now at 181.26). Break of 183.60 resistance will bring retest of 186.02 high, with prospect of resuming larger up trend.

GBP/AUD Rises on UK Growth Beats, China Weakness Drags AUD

GBP/AUD was one of the standout movers in the FX market last week, climbing nearly 1% .

On the UK side, growth momentum surprised firmly to the upside. Q2 GDP expanded 0.3% qoq, above expectations, but the more striking signal came from June’s 0.4% mom surge. The pickup was broad-based across services, industrial and construction activity, countering fears of stagnation. Labor market data further supported the hawkish case for BoE, with unemployment steady at 4.7% and pay growth slowing only modestly. Together, the numbers reinforced the view that while BoE is in an easing cycle, it will proceed cautiously rather than aggressively.

In Australia, RBA cut rates by 25bps to 3.60% as widely expected. However, the tone of the accompanying forecasts was less dovish than markets had feared. Projections suggested room for only one more rate cut this year and two in 2026. In addition, the rebound in job creation reduced immediate pressure on the RBA to accelerate its easing cycle. While supportive in isolation, these positives for the Aussie Dollar were overshadowed elsewhere.

China’s economic data delivered a blow to regional sentiment. Industrial production, retail sales, and fixed-asset investment all slowed sharply, underscoring fragility in domestic demand. Given Australia’s heavy trade exposure to China, the releases dragged the Aussie lower despite a more balanced domestic backdrop.

Technically, the extended rebound in GBP/AUD last week suggests that corrective pattern from 2.1643 has completed with three waves down to 2.0420. Further rise is now in favor to 2.1034 resistance first. Firm break there will solidify the case of up trend resumption and target 2.1643 high next.

Looking longer-term, the uptrend from 1.5925 (2022 low) remains intact. On resumption, next medium term target is 61.8% projection of 1.8909 to 2.1643 from 2.0420 at 2.2110.

EUR/USD Weekly Outlook

EUR/USD edged higher to 1.1729 last week but retreated since then. Initial bias remains neutral this week for consolidations. Further rally is expected as long as 1.1589 support holds. Above 1.1729 will bring retest of 1.1829 high. On the downside, however, firm break of 1.1589 will turn bias to the downside, and extend the corrective pattern from 11829 with another fall.

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.

EUR/USD edged higher to 1.1729 last week but retreated since then. Initial bias remains neutral this week for consolidations. Further rally is expected as long as 1.1589 support holds. Above 1.1729 will bring retest of 1.1829 high. On the downside, however, firm break of 1.1589 will turn bias to the downside, and extend the corrective pattern from 11829 with another fall.

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.

USD/JPY edged lower to 146.20 last week but recovered ahead of 145.84 support. Initial bias stays neutral this week first. On the upside, break of 148.51 will indicate that the pullback from 150.90 has completed, and bring retest of this high. This will also keep the whole rise from 139.87 alive. However, firm break of 145.84 support will argue that the rebound from 139.87 has completed, and turn near term outlook bearish.

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.

In the long term picture, there is no sign that up trend from 75.56 (2011 low) has completed. But then, firm break of 161.94 is needed to confirm resumption. Otherwise, more medium term range trading could still be seen.

GBP/USD's rally extended to 1.3594 last week and breached 1.3587 resistance. But a temporary top was formed with subsequent retreat. Initial bias remains neutral this week for consolidations. Downside of pullback should be contained above 1.3398 support. On the upside, break of 1.3594 will resume the rise from 1.3140 to retest 1.3787 high.

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.

In the long term picture, for now, price actions from 1.0351 (2022 low) are still seen as a corrective pattern to the long term down trend from 2.1161 (2007 high) only. However, firm break of 1.4248 resistance (38.2% retracement of 2.1161 to 1.0351 at 1.4480) will be a strong sign of long term bullish reversal.

USD/CHF stayed in consolidation inside 0.8020/8170 last week. Initial bias remains neutral this week first. On the downside, break of 0.8020 will revive that case that the corrective pattern from 0.7871 has completed, and target a retest on 0.7871 low. On the upside, firm break of 0.8710 will resume the corrective from 0.7871. Intraday bias will be back on the upside for 38.2% retracement of 0.9200 to 0.7871 at 0.8379.

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.

In the long term picture, price action from 0.7065 (2011 low) are seen as a corrective pattern to the multi-decade down trend from 1.8305 (2000 high). It's uncertain if the fall from 1.0342 is the second leg of the pattern, or resumption of the downtrend. But in either case, outlook will stay bearish as long as 0.9200 resistance holds. Retest of 0.7065 should be seen next.