The "waiting and watching" within the Fed still has the upper hand, and the US index rose first and then fell

On August 21, early trading in the Asian market on Thursday, Beijing time, the US dollar index hovered around 98.24. On Wednesday, the US dollar index rose first and then fell, and once rose to an intraday high of 98.42 during the session, and then erased all intraday gains and turned to a decline. However, after the meeting minutes showed that only two Fed decision makers supported the rate cut in September, the US index narrowed its decline and finally closed down 0.05% to 98.20; the benchmark 10-year U.S. Treasury yield closed at 4.299%, and the 2-year U.S. Treasury yield closed at 3.752%. Spot gold continued to rise, approaching the $3350 mark for a time, up nearly $40 lower than the day, and finally closed up 0.98% to close at $3348.05/ounce; spot silver closed up 1.40% to $37.87/ounce. Crude oil rebounded as U.S. crude oil stocks fell more than expected last week, as investors awaited the next progress in Ukraine talks. WTI crude oil once rose to around $63, but failed to stand here and finally closed up 1.35% to $62.76 per barrel; Brent crude oil finally closed up 1.37% to $66.36 per barrel.

Analysis of major currency trends

Dollar Index: As of press time, the US dollar index hovered at $98.24. The market's response to the minutes of the FOMC meeting was relatively flat, because the meeting was held before the release of the latest employment and inflation data. Additionally, investors are choosing to wait for Fed Chairman Powell to speak at Jackson Hall Economics Symposium before building large positions on the Fed’s possible policy outlook. Technically, since the US dollar index stays near resistance levels 98.00–98.20, the technical side remains unchanged. RSI is in a mild area if the correct catalyst appears, there is a lot of room to gain motivation.

Euro: As of press time, the euro/dollar hovers around 1.1643. After the minutes of the Fed meeting were released, the euro/dollar fell back from the daily high of 1.1672 to 1.1660, which seemed to be a hawkish reaction from market participants. The EU (EU) Consumer Price Coordinated Index (HICP) rose 2% year-on-year in July, in line with expectations. The core HICP data rose 2.3% year-on-year, in line with expectations and the same as the June data. Technically, the latest resistance level of the EUR/USD is in the range of 1.1685–1.1700. If the EUR/USD successfully closes above this level, it will move to the next resistance level, which is in the range of 1.1800–1.1815.

GBP: As of press time, GBP/USD is hovering around 1.3453. The GBP/USD fell again on Wednesday, down about three-tenths and slipped into the key moving average. UK's key consumer price index (CPI) inflation data has put pound bidders in trouble as market bets on another rate cut by the Bank of England (BoE) before the end of the year fell below 50%. Technically, if GBP/USD remains below the support level of 1.3485–1.3500, it will move towards the next support level of 1.3400–1.3415.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On Thursday, gold hovered around 3342.47. Powell has always maintained a cautious stance in policy, facing the potential impact of U.S. President Donald Trump on tariffs on inflation. However, weak U.S. labor data and consumer inflation data prompted the market to digest the Fed's two rate cuts this year, with the first rate cut expected in September.

Technical surface: The daily chart shows that the simple moving average (SMA) on Tuesday closed below the 50-day moving average, confirming the crossing of the bear market. Meanwhile, the 14-day relative strength index (RSI) points below the midline, currently close to 43.50, indicating that there is still more downside in the future. Sellers need to find a solid foothold below the $100 3,311 moving average to achieve a sustained downtrend. Further south, the July 31 low of $3,274, below the July 30 low of $3,268, will be tested to break through $3,250The psychological barrier of the Yuan. Alternatively, strong resistance is around $3,346, the intersection of the 21-day moving average and the 50-day moving average. The next bullish target appears at last week's highs of $3,375 and integer level of $3,400.

2) Analysis of crude oil market trends

On Thursday, crude oil trading around 62.76. Oil prices rose slightly on Monday. The previous US-Russian summit in Alaska has not made any progress as investors focus on the results of the meeting between US President Trump and Ukrainian President Zelensky. In addition, this trading day should also pay attention to the initial value of the annualized total number of construction permits in the United States in July and the speech of Federal Reserve Director Bowman.

Technical: WTI crude oil rebounded and recovered Tuesday's decline. However, bulls still have a long way to go to change the overall bearish sentiment. I think $65 will be a very difficult level to break through, and we are far from approaching this mark at the moment. Therefore, I expect WTI crude oil will be a market that will be "short at highs" when signs of weakness appear.

Forex market trading reminder on August 21, 2025

To be determined Jackson Hall Global Central Bank Annual Meeting

14:00 Switzerland July Trade Account

15:15 France's August Manufacturing PMI Initial Value

15:30 Germany's August Manufacturing PMI Initial Value

16:00 Eurozone's August Manufacturing PMI Initial Value

16:30 UK's August Manufacturing PMI Initial Value

16:30 UK's August Services PMI Initial Value

18:00 UK's August CBI Industrial Order Difference

20:30 US to August 16

20:30 US Philadelphia Fed Manufacturing Index in August

21:45 The initial value of S&P Global Manufacturing PMI in August

21:45 The initial value of S&P Global Services PMI in August

22:00 The initial value of the Eurozone Consumer Confidence Index in August

22:00 The total number of existing home sales in July

22:00 The monthly rate of the leading indicator of the United States in July

22:30 The week from the United States to August 15

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