The euro held resilience despite mixed service data as investors eyed eurozone fiscal challenges and inflation pressures. The pound found support in upbeat services activity but faced pressure from surging bond yields and fiscal concerns. The yen weakened amid political uncertainty and cautious Bank of Japan signals, while New Zealand’s outlook remained fragile with weak growth prospects and expectations of further central bank easing. Gold extended record gains, fueled by safe-haven demand, expectations of rate cuts, and geopolitical tensions that kept investors seeking stability beyond traditional assets.
🇪🇺/🇺🇸 EUR/USD Outlook – Euro vs U.S. Dollar
Macroeconomic Context
- The euro weakened after falling below 1.1640, pressured by rising European bond yields and fiscal concerns in Germany and France.
- German fiscal plans involve large-scale borrowing for infrastructure and defense, raising questions about long-term debt sustainability.
- Inflation in the eurozone accelerated slightly above the ECB’s target, keeping speculation alive that rates will remain steady at the next meeting.
- Upcoming US labor market and factory orders data are key drivers, as they will shape expectations for Fed policy.
Market Sentiment
- Traders remain cautiously bullish on the euro’s recovery potential, supported by quick buybacks after data-driven declines.
- Any hawkish Fed tone could weigh on the euro, while softer US data could fuel upward moves.
Support Levels: 1.1629, 1.1584, 1.1528
Resistance Levels: 1.1656, 1.1680, 1.1717, 1.1737
Forecast
- Short-term: Consolidation above 1.1629 favors mild upside toward 1.1680.
- Medium-term: Risks remain tilted downward if fiscal concerns in Europe deepen or US data surprises positively.
- Alternative: A break below 1.1629 opens further downside to 1.1585.
🇬🇧/🇺🇸 GBP/USD Outlook – British Pound vs U.S. Dollar
Macroeconomic Context
- Pound slipped below 1.34 as bond yields surged to multi-decade highs amid fears of fiscal tightening and debt burdens.
- Chancellor Reeves faces growing pressure to introduce tax hikes to stabilize finances, adding to political uncertainty.
- Strong UK services PMI gave temporary support, showing resilience in the economy.
- Investors await BoE signals on monetary policy and quantitative tightening, as higher yields complicate outlook.
Market Sentiment
- Traders remain cautious, with political reshuffling in Westminster adding to volatility.
- A weaker US jobs report could allow the pound to recover, but fiscal risks cap upside momentum.
Support Levels: 1.3352, 1.3312, 1.3281
Resistance Levels: 1.3403, 1.3445, 1.3492, 1.3533
Forecast
- Short-term: Flat consolidation between 1.3350–1.3400.
- Medium-term: A break lower could extend losses toward 1.3110, while upside requires a push above 1.3533.
- Alternative: Strong US weakness could drive a rebound to 1.3450+.
🇺🇸/🇯🇵 USD/JPY Outlook – U.S. Dollar vs Japanese Yen
Macroeconomic Context
- Yen weakened to around 149 as political instability in Japan overshadowed cautious BoJ commentary.
- The resignation of ruling party figures fueled speculation about leadership changes, creating further uncertainty.
- BoJ reiterated its preference for gradual tightening, signaling no aggressive rate hikes despite inflationary risks.
- US factory orders and labor data add external volatility, with Fed policy expectations continuing to guide pair direction.
Market Sentiment
- Traders favor the dollar given yield differentials and US economic resilience.
- Any hawkish Fed signal could push USD/JPY toward new highs, while risk aversion may trigger yen safe-haven demand.
Support Levels: 148.07, 147.34, 147.09
Resistance Levels: 148.81, 149.55, 150.34
Forecast
- Short-term: Consolidation near 148.80 with scope for extension toward 149.55.
- Medium-term: A sustained break above 150 could bring further yen weakness, but intervention risks increase.
- Alternative: A fall below 147.09 would signal renewed downside momentum.
🇳🇿 /🇺🇸 NZD/USD Outlook – New Zealand Dollar vs U.S. Dollar
Macroeconomic Context
- New Zealand’s recovery remains fragile, with four straight quarters of contraction.
- Trade volumes deteriorated despite improved terms of trade, highlighting weak external balance.
- Consumer confidence is at a 10-month low, and business sentiment remains fragile.
- Inflation has eased, but growth weakness keeps the RBNZ on a path of gradual rate cuts, with markets expecting further easing toward 2.5% by year-end.
Market Sentiment
- Bearish bias dominates, with speculative positioning growing more negative.
- NZD strength depends largely on US dollar weakness rather than domestic drivers.
Support Levels: 0.5800, 0.5725
Resistance Levels: 0.5911, 0.6000
Forecast
- Short-term: Retest of 0.5800 support likely, with risk of decline toward 0.5725.
- Medium-term: Only a dovish Fed shift could provide sustainable upside beyond 0.5911.
- Alternative: Stronger US data would deepen NZD’s downside pressures.
🌕 Gold (XAU/USD) Outlook – Gold vs U.S. Dollar
Macroeconomic Context
- Gold surged to record highs above 3530 as expectations for Fed rate cuts dominate sentiment.
- Political interference in the Fed, including President Trump’s dismissal of a Fed governor, adds uncertainty and boosts safe-haven flows.
- Rising geopolitical tensions in Europe and the Middle East reinforce gold’s role as a hedge.
- ETF inflows into gold remain strong, signaling institutional demand.
- Weak US JOLTS data further supported the rally.
Market Sentiment
- Traders remain heavily positioned long, with contrarian signals suggesting consolidation risks.
- NFP data this week will be decisive: weak jobs could fuel further gains, while strong data may spark profit-taking.
Support Levels: 3525, 3500, 3469, 3438, 3402, 3374
Resistance Levels: 3600, 3625, 3650
Forecast
- Short-term: Bullish bias remains, targeting 3600+.
- Medium-term: Pullbacks to 3500–3525 are possible but should attract buyers.
- Alternative: A break below 3374 would shift trend toward downside correction.
📊 Summary Table: As of September 4, 2025
| Asset | Key Drivers | Support Levels | Resistance Levels | Outlook |
|---|---|---|---|---|
| 🇪🇺 EUR/USD | EU fiscal worries, US data, ECB stance | 1.1629, 1.1584, 1.1528 | 1.1656, 1.1680, 1.1717 | Mild upside if above 1.1629, risk lower if broken |
| 🇬🇧 GBP/USD | UK fiscal risks, BoE signals, US data | 1.3352, 1.3312, 1.3281 | 1.3403, 1.3445, 1.3492, 1.3533 | Flat near 1.3350–1.3400, bearish bias unless above 1.3533 |
| 🇯🇵 USD/JPY | BoJ gradual stance, Japanese politics, Fed outlook | 148.07, 147.34, 147.09 | 148.81, 149.55, 150.34 | Bullish toward 149.55+, downside if below 147.09 |
| 🇳🇿 NZD/USD | Weak NZ recovery, RBNZ easing, US dollar moves | 0.5800, 0.5725 | 0.5911, 0.6000 | Bearish bias, weak rebounds capped below 0.5911 |
| 🪙 XAU/USD | Fed rate cut bets, geopolitics, ETF inflows | 3525, 3500, 3469, 3438, 3402, 3374 | 3600, 3625, 3650 | Strong bullish momentum, risks of pullback before NFP |
Categories: Market News
