GOLD: Finds Demand Toward $4100/oz, Suspect A Rally Toward $4300/oz Gets Faded

"*IRAN'S IRGC SAYS SUPERTANKER HIT BY MINES, CAUGHT FIRE: TV" - BBG
"*IRAN'S IRGC SAYS SHIP WAS USING HORMUZ SOUTHERN ROUTE: TV"

The BBDXY has had a range today of 1193.61 - 1199.43 in the Asia-Pac session; it is currently trading around 1198. The US Dollar is getting a welcome reprieve thanks to last week's US inflation data together with a hawkish speech from Warsh. Warsh was able to halt the popular “debasement trade” on Friday, let's see if it is enough to reverse it. The currency broke below its pivotal 1195-1200 area but this bounce on Friday is challenging that for the moment. The recent price action has been pretty bearish and I suspect while it holds below 1205 the market will likely still fade the rally. I had been skewed toward fading this dip but I would need this bounce to extend and put in a false break lower to start regaining any confidence. With the market's focus now turning toward NFP’s that is probably unlikely in the short-term. On the day, I am watching to see how the USD trades into this initial 1200-1205 sell-zone at the first time of asking.

• EUR/USD -  Asian range 1.1579-1.1595, Asia is currently trading 1.1590. The pair dropped very quickly after Warsh came out pretty hawkish, putting in a top towards 1.1700 and a bearish looking shadow now on the Weekly chart. Is Warsh coming out hawkish enough to turn this around? I suspect he might have to follow through with a hike and the NFP this week will be a significant input toward making that decision. I have been skewed in favour of fading this rally in the EUR, with this pivotal weekly 1.1600 area back in play but the price action in the US Dollar had me questioning this playing out. If you are a bear there is now a clear point back above 1.1700 where you are wrong now. Having broken through its first support, the 1.1520-1.1570 support area comes back into play. I suspect that we might do some work until NFP though, perhaps with a slightly offered tone. Initial resistance on the day is now back toward 1.1630-1.1660. 
• GBP/USD - Asian range 1.3529-1.3543, Asia is currently dealing around 1.3590. The pair looks to have put a top in toward the 1.3600-1.3650 area for now. On the day, the resistance remains in the 1.3600-1.3650 area. I have been skewed toward the move topping out and turning lower again at some point, this price action is a step in the right direction. Support seen toward 1.3450-1.3500 initially. It looks like we could continue chopping around aimlessly within the wider 1.3000-1.3800 range that has captured the last 15 months of trading.   
• Data: Germany August CPI 

Fig 1: GBP/USD Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The NZD/USD had a range today of 0.5902-0.5925 in the Asia-Pac session; it is currently trading around 0.5920, +0.08%. The pair extended its pullback from the 0.6000 area on Friday night. The US Dollar has bounced thanks to the Warsh speech at Jackson hole, the demand in the Cross just adding to the pair's headwinds. The price action for the NZD continues to look constructive while holding above 0.5800-0.5850 and I will be watching to see how the US Dollar trades to start this week after getting a welcome reprieve. On the day, the first support is around 0.5860-0.5890 and then the 0.5800 area comes back into play. Will the dips continue to be supported to have another look toward 0.6000 or can the US Dollar build on this relief from Warsh. The focus this week will be on NFP and what that would mean for a market now looking for potential US rate hikes.

• “NEW ZEALAND GOVT. CANCELS FUEL TAX HIKE PLANNED FOR NEXT YEAR" - BBG
• MNI - NZ NEW ZEALAND: Recovery Continues While Expected Price/Cost Rises Steady. While ANZ business confidence and the activity outlook moderated slightly in August, the Q3 averages are their highest since Q4 2025 and activity compared to a year ago, which has a good correlation with GDP, was higher than July driven by services. Overall, ANZ sees this as a positive sign of recovery. Confidence fell to 53.7 this month from 56.1 while the activity outlook fell 1 point to 48.2. Cost/price components were mixed but many were higher or steady. The RBNZ is widely expected to hike rates on September 2 as it shifts policy towards neutral.
• (Bloomberg) -- "RBNZ Shadow Board Majority Recommends Cash Rate Increase: NZIER. A majority of the RBNZ Shadow Board recommends the Official Cash Rate should increase a quarter point to 2.75% this week, the NZ Institute of Economic Research says Monday in Wellington."
• Options : Closest significant option expiries for NY cut, based on DTCC data:  none. Upcoming Close Strikes : 0.6030(NZD442m) - BBG
• The NZD/USD Average True Range for the last 10 Trading days: 38 Points

Fig 1: NZD CFTC Data

Source: MNI - Market News/Bloomberg Finance L.P