Forex Today: Oil Plunges on Hormuz Reopening Hopes

Crude Oil was a major mover yesterday, continuing to fall from its rejection of the upper trend line of its dominant descending price channel which can be seen quite clearly on the daily chart. As the USA continues to squeeze Iran economically and Iran discussed the Strait of Hormuz with Oman with a view to a potential deal with the USA, Brent has fallen further to near $86.40 and WTI toward $80.30. This keeps the near-term technical outlook for Crude Oil bearish, although may remain high.

Australian inflation (CPI) came in higher than expected earlier today, at an annualised rate of 3.5% while only 3.3% was widely expected to be the new level, falling from 3.8%. This is a hawkish tilt and will raise hawkish expectations of the Reserve Bank of Australia, and this has already boosted the Aussie, which has been the strongest major currency so far today since the Tokyo open. This puts the AUD/USD currency pair in focus, along with the GBP/USD which is on the threshold of a major 6-month bullish breakout. The weakest major currency today has been the New Zealand Dollar.

There will be a release today of US Core PCE Price Index data (often seen as a leading inflation indicator, closely watched by the Federal Reserve), and US Preliminary GDP data. Higher-than-expected Core PCE Price Index data could boost the Dollar and pressure gold and crypto, while a softer reading may favour golbtcd and weigh on the greenback.

The US Dollar is rangebound near 98.92 on the Dollar Index and remains on track for a monthly decline. Today’s US inflation data and this weekend’s Jackson Hole symposium are likely to determine the next meaningful direction.

The Canadian Dollar is continuing to look somewhat weak even after Canada announced retaliatory tariffs on about $20 billion of US imports. The USD/CAD currency pair is rising again, but tariff headlines make this pair prone to sudden reversals.

Gold is holding up after making a fresh 3-month high price yesterday, trading around $4,650. Falling oil prices and Treasury yields, plus longer-term US Dollar weakness, remain supportive. Trend traders may prefer buying retracements or waiting for a clear breakout to a fresh long-term high.

Bitcoin is steady near $78,700 and Ethereum near $2,450. Both remain broadly bullish but have not yet produced decisive fresh breakouts. Ethereum looks like a prime candidate for a potentially significant bullish breakout beyond the obvious major round number area at $2,500.

Retail traders should focus on today’s US inflation release. Higher-than-expected inflation could boost the Dollar and pressure Gold and crypto, while a softer reading may favour gold and weigh on the greenback.