Fed rate decision – Gold
The Fed may face one of its toughest policy decisions amid persistent inflationary pressures and elevated geopolitical risks in the Middle East. Futures markets are confident that the board will deliver a 25-bps rate hike to 3.75%–4.00%, driven by elevated August CPI figures and robust nonfarm payroll growth. Yet, what is still uncertain is whether Kevin Warsh will frame a potential rate increase as an insurance hike or stay committed to price stability until the 2.0% target is reached.
If the Fed delivers a one-off rate increase accompanied by a dovish split in the updated dot plot, US dollar sell-off may resume, helping gold to bounce towards its 20- and 200-day SMAs at 4,450 and 4,540, respectively.
Conversely, hawkish communication emphasizing that the current policy is not constraining the economy enough may break gold’s neutral short-term structure below the 50-day SMA at 4,257, opening the path towards 4,150, with deeper declines likely targeting the critical 4,070 key zone.
BoE rate decision – GBP/USD
The Bank of England is widely anticipated to hold its benchmark rate flat at 3.75% via a steady 6–3 vote split. However, money markets still price in a potential rate hike by year-end following the recent spike in energy prices.
Still, the policy decision will largely depend on the upcoming employment and CPI data due for release on Tuesday and Wednesday, respectively. Forecasts point to a higher unemployment rate of 5% accompanied by weakening wage growth to 3.9% y/y, whilst inflation pressures are expected to surge back to 3.1% y/y, with the services sector likely posting a faster rise of 3.6%.
A hawkish hold that leaves the door open to future tightening could allow GBPUSD to establish a firm footing near its 50-day SMA and target a bullish reversal toward the 20-day SMA at 1.3550. Technically, however, the short-term risk remains skewed to the downside, with sellers watching for a breakdown below 1.3470, and more critically, a close below the key 200-day SMA at 1.3440, to regain full control.
Clarity act vote – BTC/USD
The recent vertical rally in crypto markets will face a critical test on Tuesday, when the delayed Clarity Act vote will head for a Senate vote. The regulation aims to establish an accommodative framework which sets boundaries between the SEC and CFTC in digital asset markets. While consensus is mixed, attaining the 60-vote threshold to advance the bill would serve as a key bullish catalyst, even though the vote will not be the final piece of the puzzle.
Currently, BTCUSD continues to consolidate above the key support of 77,170 despite rising Treasury yields and dampened risk sentiment in stock markets. A decisive close above the 20-day SMA at 78,540 may help the pair re-enter the 80,000 area, bringing September’s high at 82,260 into focus. On the downside, failure to pass the bill, paired with macro headwinds from central bank tightening could crack nearby support at 76,485, triggering a deeper retracement toward the 72,900 constraining zone.
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