Market Sector Scanner: USD Moves Sideways Ahead of Jobs Data, Rate Cut Expectations Build
The dollar held in a tight range last week as traders digested Powell’s Jackson Hole speech and stronger U.S. data, while Tokyo CPI at 2.5% fueled BoJ hike speculation. Political tensions rose after Trump fired Fed Governor Lisa Cook and imposed new chip tariffs. This week’s spotlight is Friday’s U.S. jobs report, with Fed, BoJ, and BOE policy signals likely to guide the next move.
Financial markets stayed quiet last week, with the U.S. dollar trading sideways as traders continued to analyze Fed Chair Powell’s Jackson Hole speech. Political tensions grew after President Trump fired Fed Governor Lisa Cook over fraud claims, while U.S. data stayed firm with durable goods and GDP above forecasts and Core PCE in line. In Japan, Tokyo Core CPI held at 2.5% and unemployment fell to a multi-year low, boosting speculation of a BoJ hike. Trump also reignited trade frictions with new semiconductor tariffs, excluding U.S.-made chips. Despite strong earnings from Nvidia, U.S. equities slipped on Friday, ending the week lower, as Fed officials Waller and Daly supported a 25-bps cut at the September meeting.
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Key Events Calendar for September 1 – 5
Market Sector Scanner
Forex Market
USD/JPY
Last Week Recap:
USD/JPY traded sideways through most of last week, but selling pressure grew as markets prepared for a likely 0.25% U.S. rate cut in September. Tokyo CPI came in at 2.5%, above the BOJ’s 2% target, which kept talk of a possible BOJ rate hike alive and added to the downside pressure on the dollar.
Technical Picture:
The pair is still range-bound, with Bollinger Bands narrowing and the 10-day moving average flat. This shows the market has little momentum, but the tightening often signals a breakout is getting closer.
Outlook This Week:
Sideways trading may continue for now, but the risk is to the downside. Weak U.S. data or stronger BOJ signals could trigger a break lower, so selling rallies looks safer.
GBP/JPY
Last Week Recap:
GBP/JPY drifted lower as traders kept selling ahead of the strong 200 resistance level. Expectations that the Bank of Japan may raise interest rates also weighed on the pair, limiting upside even as U.K. data held firm.
Technical Picture:
The 10-day moving average has turned lower, showing weakening momentum. Prices remain inside the Bollinger Bands and are trading between 195 and 200, keeping the market stuck in a tight range.
Outlook This Week:
With 200 confirmed as strong resistance, selling pressure is likely to stay in place. The pair looks set to test the lower end of the range near 195, with rallies expected to attract more sellers.
EUR/USD
Last Week Recap:
EUR/USD remained range-bound and slipped back toward the middle of the recent 1.1550–1.1750 range. With a September U.S. rate cut now fully priced in, the pair lacked momentum to push higher. Stronger eurozone data helped limit the downside, but overall price action stayed contained within the range.
Technical Picture:
Range-bound conditions look likely to continue, as the 10-day moving average remains flat. Bollinger Bands are narrowing, showing that volatility has been reduced in the short term. This suggests the market is consolidating and waiting for fresh news before the next move.
Outlook This Week:
With U.S. markets closed on Monday for a holiday, quiet trading is expected early in the week. Range trading remains the best strategy until Friday’s U.S. employment report, which could spark volatility and provide the next directional move.
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Equities
U.S. Stock Market
Last Week Recap:
The Nasdaq pushed higher early last week on strong Nvidia earnings and briefly tested record highs. However, momentum quickly faded, and the index sold off into the weekend as U.S. inflation remained high.
Technical Picture:
The 10-day moving average is still bearish, showing weaker momentum. Prices are trading in the middle of the Bollinger Bands, which points to indecision and suggests range-bound conditions in the near term.
Outlook:
The Nasdaq is likely to remain choppy in the short term, with sellers active on rallies. Range trading looks to be the best approach, with risks tilted toward lower levels if inflation concerns persist.
Commodities
Gold
Last Week Recap:
Gold posted a strong performance last week, rallying toward the top of its recent trading range as markets priced in U.S. rate cuts. The metal also set fresh record highs in several non-USD currencies, underscoring the solid demand backdrop.
Technical Picture:
The latest move has taken prices above the upper Bollinger Band, a sign that the market is overbought in the near term. Resistance is clearly seen at $3,450, though the strength of the broader uptrend suggests gold could continue higher even if it stays in overbought territory.
Outlook This Week:
Short-term conditions look overheated, but dips are still expected to attract buyers. A breakout above $3,450 could also trigger additional upside momentum, keeping gold well supported overall.
With U.S. markets closed for a holiday on Monday, the week should start quietly. The main focus will be Friday’s jobs report to see how the economy is handling tariffs. A U.S. court ruled most of President Trump’s tariffs illegal, but the decision is on hold until October 14 and will likely go to the Supreme Court, so no short-term impact is expected. For now, the dollar should stay sideways, gold may push higher, and traders will watch U.S. stocks to see if selling continues.
