Sterling clings to trendline, Gold eyes breakout, Nasdaq under fire

Markets have begun the week cautiously on Monday, with the U.S. dollar steady, equities muted, and gold attempting to claw higher as traders weighed political risk from Washington and awaited clarity on Federal Reserve policy.

Geopolitical spotlight: Trump meets zelensky

The key event today is U.S. President Donald Trump’s meeting with Ukraine’s Volodymyr Zelensky in Washington. Coming just days after Trump’s talks with Vladimir Putin yielded little, investors worry Zelensky may face pressure to accept terms skewed toward Moscow, particularly territorial concessions in Donetsk.

While Europe has tied any peace process to security guarantees, the absence of a breakthrough risks prolonging uncertainty. Markets remain sensitive to headlines: a credible path to ceasefire could buoy risk sentiment, while stalemate or escalation may keep safe havens like gold supported.

Fed outlook: Jackson Hole on deck

The dollar edged higher, with the DXY up 0.2% to 97.89, as traders turned attention to central bank policy. The July Fed minutes (due Wednesday) and Chair Jerome Powell’s speech at Jackson Hole on Friday are the week’s defining events.

Dissent at the July meeting—two governors calling for a cut—underscored growing pressure inside the Fed. Coupled with soft jobs data and muted inflation, futures now price in an 85% probability of a September rate cut. Powell will need to lean hawkish to shift that dial, but political interference—after Trump dismissed the BLS commissioner and questioned official data—has clouded expectations.

FX technicals: Currencies trade narrow

EUR/USD slipped 0.2% to 1.1671, with charts showing resistance near 1.1638–1.1664. Momentum remains capped until markets see progress on Ukraine or a dovish Fed pivot.

USD/JPY edged to 147.3, with yen flows subdued despite stronger Japanese tertiary activity data (+4.5% in June). Risk-off flows remain the bigger driver.

GBP/USD – Bullish structure under pressure

Sterling has been in a steady uptrend since early August, supported by higher swing lows and consistent closes above the Bollinger midline. However, the latest pullback is testing the integrity of that trend. The pair is now hovering near 1.3540, coinciding with the 61.8% Fibonacci retracement of the latest leg and the rising trendline support.

Momentum signals are softening:

• Stochastic is drifting lower from mid-levels, reflecting cooling bullish momentum.

• RSI (56) is losing altitude, suggesting buyers are losing strength but not yet oversold.

• MACD shows fading positive momentum with a flattening histogram.

Main Scenario:

A sustained break below 1.3540 would expose deeper support at 1.3520 (100% Fib) and 1.3500/1.3485 (127.2%–161.8% extensions).

Alternative Scenario:

If the pair holds above 1.3540 and rebounds, bulls could regain control toward 1.3575 (recent swing high) and potentially retest 1.3600.

XAU/USD – Bulls challenge resistance zone

Spot gold rebounded to $3,355/oz, supported by geopolitical jitters and anticipation of Fed easing. Gold has staged a rebound from last week’s lows near 3,330, reclaiming ground above the 61.8% retracement at 3,352. The metal is now flirting with the descending trendline drawn from recent highs, while pressing against Friday’s and Monday’s tops at 3,358–3,362.

Momentum is tilting bullish:

• Stochastic (74) has entered overbought, signaling stretched near-term upside.

• RSI (56) is climbing but not yet overbought, leaving room for continuation.

• MACD has crossed above the signal line, confirming bullish momentum.

Main Scenario:

A break and close above 3,362 would open the door toward 3,366 (161.8% Fib) and potentially 3,372 (200% Fib extension).

Alternative Scenario:

Failure to clear 3,362 could trigger profit-taking back toward 3,344–3,345 support, with a deeper slide risking retests of 3,330.

Equities: Momentum stalls, tech under pressure

Wall Street futures were little changed, with Dow E-minis -0.2%, S&P 500 -0.1%, Nasdaq flat, after last week’s record highs. Tech remains fragile - Nasdaq futures slipped amid earnings disappointments and tariff concerns.

The Nasdaq 100 remains under downside pressure, confined within a well-defined descending channel since last week. The index is currently trading around 23,670, testing support at the last swing low (23,645).

Momentum indicators confirm bearish bias:

• Stochastic (24) remains in oversold territory, warning of potential short-covering but not yet showing reversal signals.

• RSI (33) is near oversold, reinforcing downside exhaustion risks.

• MACD stays negative with widening downside momentum.

Main Scenario:

A decisive break below 23,645 would extend losses toward 23,605 and 23,555 (127.2%–161.8% Fib extensions).

Alternative Scenario:

If the index holds 23,645 and rebounds, immediate resistance comes at 23,702 (61.8% retracement of the last downswing), with a breakout above the channel top needed to shift sentiment back to bullish.

Outlook

The day ahead offers little in terms of hard data, but plenty of political and policy risk. Traders will watch closely for any signals from Trump-Zelensky talks that could alter the geopolitical landscape, while Powell’s upcoming Jackson Hole remarks remain the key driver for the week.

Until then, expect range-bound FX, a cautious dollar bid, gold supported on dips, and equities vulnerable to headline shocks.