Today market outlook

[Zeologic]

AUD/USD shows a bullish bias, signaling "risk-on" market sentiment.

The AUD/USD commodity currency pair is exhibiting a bullish bias, having climbed from a low of 0.68655 on June 30 to a high around 0.71800 last week. Currently, the price sits near 0.71668 on the FXOpen chart, just below the upper band.

AUD/USD is currently driven by three key factors: the RBA's hawkish stance, the Federal Reserve's interest rate trajectory, and economic conditions in China—Australia's largest trading partner.

The RBA maintains a hawkish tone; meeting minutes reveal debates regarding potential further rate hikes, as Australian inflation remains above the 2%–3% target range. The benchmark interest rate currently stands at 4.35%. With inflation remaining elevated, the market has not entirely ruled out the possibility of additional rate hikes through late 2026.

Improving sentiment regarding China's economy, alongside economic stimulus measures, could bolster Australian exports—particularly commodities such as iron ore and coal.

However, downward pressures could push the AUD into bearish territory. US inflation data (PCE) and speeches by Federal Reserve officials remain the focus this week. If US inflation exceeds forecasts, the USD could strengthen on expectations of higher interest rates. Geopolitical tensions in the Middle East may drive safe-haven demand for the USD, while a global economic slowdown and weakening commodity demand could also weigh on the AUD.

Traders are currently monitoring Australian CPI data, RBA rate hike expectations, US PCE data and Fed commentary, commodity price movements, Chinese economic data, and the performance of the US Dollar Index (DXY).

From a technical perspective, AUD/USD is trading above the 200-day moving average, with a trend leaning from neutral to mildly bullish today. The projected fair value range for AUD/USD is 0.70800–0.72000. Immediate support lies around 0.71200, with the next target level near 0.70900. The nearest resistance is around 0.71780, and the next target is around 0.72000. This forecast could be wrong.

[Zeologic]

GBP/JPY outlook is neutral to bullish, but chasing highs requires caution.

The GBP/JPY cross—often nicknamed "The Beast"—is currently trading around 216.571, with a daily range of approximately 216.500–217.380. On the FXOpen chart, the price sits near 216.375, trading above the MA50.

GBP/JPY price dynamics are influenced by factors such as interest rates and global risk sentiment. The GBP continues to draw support from expectations of a relatively tight Bank of England (BoE) policy. Sterling recently traded near six-month highs against the USD, bolstered by solid UK data and persistent inflation concerns.

However, there are headwinds; UK retail sales fell 0.5% month-on-month in July, and the UK government recorded a budget deficit of approximately £1.8 billion—worse than anticipated. Fiscal pressures and high gilt yields pose risks to the GBP.

The BoE has maintained interest rates at 3.75%. Although some committee members have voiced support for a rate hike due to energy-driven inflation, UK macroeconomic uncertainty limits the scope for further GBP appreciation. A narrowing interest rate differential between the UK and Japan is gradually triggering a "carry trade" compression, which is slowly strengthening the JPY against the GBP.

Japanese inflation is picking up again. Headline inflation rose to approximately 1.9% in July, while underlying inflation indicators also increased. This has fueled speculation that the Bank of Japan (BoJ) could raise interest rates to 1.25% in September. A Reuters survey indicates that the majority of economists expect the BoJ to raise rates to 1.25% in September, with some anticipating further increases by late 2026.

Japan and the US have previously intervened to strengthen the Yen. According to Reuters, such interventions could mark a crucial turning point for the currency. Given that GBP/JPY is highly sensitive to JPY strength, the pair could react significantly if USD/JPY approaches extreme levels, or in response to verbal interventions by Japanese officials or hawkish statements from the BoJ. This could push GBPJPY lower.

Energy prices and geopolitical factors could significantly impact UK inflation and alter the Bank of England's (BoE) policy direction. Global market sentiment is also a key focus for traders; positive moves in global indices tend to drive GBPJPY higher, whereas sharp declines in stock markets can trigger a flight to the yen as a safe-haven asset.

From a technical perspective, GBPJPY is trading above its 200-day moving average. The projected price range for GBPJPY today is approximately 215.80–217.80. Immediate support lies at 216.10, with the next target at 215.90. Immediate resistance is around 217.30, with the next target near 217.80. This forecast could be wrong.