A1 TRADING | Indices, Commodities, Forex, Futures

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Don't fight the macro!

Gold continues to be my top favorite set up going into next week. EdgeFinder has nailed the move, first giving a net bullish reading on July 23rd. Fundamentals, technicals, and sentiment all continue to show strong bullish signals. - Nick

DXY Analysis: The Fed Is Running Out of Options DXY is at 99.515, sitting on support with the 200-day SMA just beneath at roughly 99.20. Two paths and both end lower. Either this support holds and price rallies into the 100.20 to 100.60 resistance band before sellers take it from there, or the shelf gives way, the 200-day goes with it, and the flush continues. With the Fed's rate hike case weakening, I think the destination for DXY is lower, it's just a matter of which path it takes. Retail sales are the fourth consecutive miss. Sales fell 0.6% against 0.1% expected, the largest drop since May 2025. That follows payrolls contracting 23,000 with 103,000 of downward revisions, CPI slowing to 3.4%, and PPI coming in flat with the annual rate down to 4.7% from 5.5%. Front-end yields are lower again today. The EdgeFinder currently reads Very Bearish on the dollar. read the full article here. — Alan

NZDUSD Now Bounces as the Fed's Hawkish Case Weakens NZDUSD is bouncing off of key support. What makes this pair clean is the divergence. The RBNZ is one of the last hawkish central banks, while the Fed is drifting the other way. Markets price about 85% odds of an RBNZ hike to 2.75% in September, and the bank keeps flagging the need to make policy less stimulative. July manufacturing expanded again. The Fed side is the opposite story. Retail sales fell 0.6% today against 0.1% expected, the fourth straight miss after cooling CPI, cooling PPI, and a contracting jobs report. Rate pricing has gone from two and a half hikes earlier this year to one at most. Front-end yields are lower again. One central bank leaning toward a hike, the other toward a hold. Those polar opposites make what could be a clean setup. Kiwi is the strongest currency today on the currency relative strength chart. read the full article here. — Alan

In an odd way, I'm looking forward to getting stopped out of this trade. It'd allow me to lock in profits and potentially ride the second leg higher on pullbacks. Shoutout EdgeFinder for printing bullish before the breakout happened! — Alan

Gold Analysis: Now Is The Time To Pay Attention Gold may be slipping under the 4,365 to 4,382 support shelf after what looks like to be topping out at 4,449. Worth noting where it turned. The 200-day sits near 4,495, so price rejected about 1% beneath it. That average has capped this market all year and it did its job again. This reads as resistance holding rather than a trend breaking. The macro is getting progressively stronger for Gold. Payrolls contracted 23,000 with heavy revisions, CPI slowed to 3.4%, PPI came in unchanged with the annual rate down to 4.7% from 5.5%, and front-end yields have broken their war-era uptrend. Rate projections have gone from two and a half hikes to roughly one. The 0.382, the 0.5, and the 0.618 fib levels sit below. I'm watching them closely! Just like you can overpay for a house or a car, you can overpay in trading. I'd rather re-enter at a relative discount. read the full article here. — Alan

USDCHF Today: Three Cool Prints and One Key Level USDCHF is tapping into a key resistance zone. That zone also contains the 61.8% retracement of the late-July drop from 0.8207 to 0.8043, which gives it more additional weight The data supports the downside. PPI was unchanged on the month against 0.2% expected, with the annual rate slowing to 4.7% from 5.5% and core easing to 4.2% from 4.7%. That follows a cool CPI and a payrolls report that lost 23,000 jobs with heavy downward revisions. EdgeFinder reads-10 on USDCHF which is an added confluence. One caution on the re-escalation scenario. Higher oil lifts yields and the dollar, which could disrupt the idea. Two ascending trendlines beneath price acting as support. I'm watching for a breakdown of those levels for continued downside. Quiet calendar until FOMC minutes Wednesday. read the full article here. — Alan

Macro snapshot from EF: bullish!

Gold 4H Chart: Looking bullish! I'm watching for pullbacks here, after a round of soft jobs numbers and in-line inflation. Tomorrow's PPI print could also bring some volatility, so I'm watching patiently! I like the 50% & 61.8% retracement levels as possible dip-buying opportunities. - Nick

US 2-Year Yield Now Falls as September Odds Hit 38% US 2-year yield is at 4.193%, down roughly 5bp on the CPI print and holding below the ascending trendline drawn from the war-start low in March. When I marked this chart on August 4 it was testing that line. It has now broken it. The print was benign. Headline rose 0.1% after June's 0.4% decline, annual slowed to 3.4%, and core came in at 0.2% monthly and 2.5% annually. September hike odds fell to 38% from 48%, with 26bp of tightening priced across the curve against nearly 30bp yesterday. My hesitation is what the report measured. July energy fell 1.5% with gasoline down 2.9%. Brent traded to 90 this morning and WTI reached almost 84. If oil continues to creep up we could be see the inflation progress walked back. The curve says the same thing. The front end took the relief and the 30-year near 5.23% barely moved. PPI tomorrow. read the full article here. — Alan

GBPUSD Now Faces a Critical GDP Print at Key Resistance GBPUSD is trading just shy of the 1.3550 to 1.3620 resistance zone and roughly 0.7% above the 200-day. Tomorrow's Q2 GDP likely decides of the resistance holds or if we start breaking through it. Consensus is 0.4% quarterly after 0.6% in Q1, with the Bank of England forecasting 0.3%. What makes it asymmetric is what is already priced. The swaps curve carries roughly 50bp of further BoE tightening over twelve months, taking Bank Rate to 4.25%, which sits above the Bank's own neutral estimate while the economy runs below potential. A lot of hawkishness is in the price, so a miss likely does more damage than a beat does good. A strong print probably takes this through 1.3550, and continuation rarely offers a comfortable entry. A soft print pressures sterling, and the 200-day near 1.3400 is the level I would be watching. read the full article here. — Alan

Gold Now Runs 10% in a Week With CPI Tomorrow Gold is near its highest in two months. Price has run about 10% off the early-August low near 4,016. The trend is up and the momentum behind it is real. The right the necessary posture going into tomorrow is patience. There's really no need to front-run a position when we truly don't know what the CPI read will be. A cool print likely means continuation, and probably without offering a comfortable entry along the way. The next resistance is the 4,500 handle where the 200-day sits, roughly 2.2% above here. If that is the path, there is nothing to do but watch and wait for the pullback that eventually comes. A hot print puts pressure on gold, and that is what creates the opportunity. The levels I would be watching in that case are 4,300 and 4,200. Again, patience will pay off if you're not in the trade and looking to jump in. September hike odds are 48% and December sits at 78%, so this is not a settled picture. read the full article here. — Alan

USDJPY Now Gives Back Half Its Intervention Loss in a Week USDJPY is at 159.244, back above the 200-day and roughly a full point under the 160.0 resistance level. The intervention move from 163.99 to 155.20 has been retraced 46% in about a week. The positioning data is the part worth sitting with. Speculators cut net yen shorts by 8.865 billion dollars to 3.604 billion in the week to August 4, the largest reduction in over twelve years. The intervention did its job and flushed the crowded trade. It also cleared the runway, because a near-flat short book is room to rebuild rather than a constraint. For scale, the record intervention in April and May was followed by fresh 40-year lows about nine weeks later. This one was joint with the US Treasury and it has decayed in a week. CPI tomorrow could either fuel more downside or cause the carry trade to live on for longer, as higher U.S. rate expectations widen the rate gap. read the full article here. — Alan