Technical outlook on EUR/USD, BTC/USD, Gold [Video]

• Gold continues to hit record highs as US economic uncertainty resurfaces.

• EUR/USD constrained near key resistance as ECB rate decision, French politics eyed.

• Bitcoin flatlines but rising ETF inflows reflect demand for safer crypto options.

Gold – Focus on US CPI inflation

A surprise double-digit increase in US nonfarm payrolls, coupled with a higher unemployment rate, alarmed investors on Friday, raising concerns about a slowing economy and even sparking recession fears. This was the second consecutive weak jobs report, with futures markets now pricing in the possibility of a double rate cut in September and a total of 69bps of monetary easing by December – equivalent to more than two cuts.

The news weighed heavily on the US dollar and reignited gold’s impressive rally, with prices reaching a peak of $3,622/ounce earlier today. Additional support came from headlines that China’s central bank purchased gold for the tenth consecutive month in August.

Attention is now turning to US PPI and CPI inflation data, due Wednesday and Thursday respectively at 12:30 GMT. A strong reading could re-ignite stagflation fears – considered the Fed’s worst-case scenario and harder to manage than a typical recession. In that case, expectations of aggressive rate cuts may fade, though investors could still turn to gold as an inflation hedge.

Technically, the latest surge looks somewhat overextended. After three consecutive bullish weeks, some profit-taking is likely around the $3,600 level. Still, if bulls maintain control, resistance may next appear near $3,700, while a deeper pullback below $3,500 would likely shift the outlook back to neutral.

EUR/USD – ECB rate decision

In Europe, the spotlight will fall on both political uncertainty and the European Central Bank (ECB). The ECB will conclude its two-day policy meeting on Thursday, and markets widely expect policymakers to keep the deposit facility rate at 2.0% for the second straight meeting, following nine quarter-point cuts since June 2024.

While the labor market remains solid, with unemployment near record lows, US import tariffs have yet to fully impact on the eurozone economy, and political risks remain elevated. In France, Prime Minister François Bayrou is facing a confidence vote on his deficit-reduction plans later today, which include a controversial tax hike on pensioners. A defeat could lead to a fresh parliamentary deadlock.

It's obvious that EUR/USD’s resilience has been largely driven by US dollar weakness, making upcoming US data releases crucial for direction, while renewed political jitters in Europe could cap gains.

From a technical standpoint, the pair failed to close above resistance at 1.1728 during the post-NFP session, but the bulls remain in play. A successful break above this barrier could open the way to July’s high at 1.1828, followed by 1.1900-1.1960 and even 1.2060-1.2100. Conversely, for bears to regain control, the price would need to slide below 1.1600.

BTC/USD – Retains some safe-haven appeal

BTC/USD traded sideways over the weekend after failing to close above its 20-day simple moving average (SMA) last Friday. While altcoins such as Ethereum, Solana, and Cardano have recently outperformed Bitcoin, ETFs tied to the leading cryptocurrency attracted $246.4 million in inflows over the past five days, led by Fidelity and BlackRock. By contrast, Ethereum ETFs posted record weekly outflows, suggesting that Bitcoin is still considered a relatively safer crypto asset – a crypto gold – in times of economic uncertainty.

On the technical front, indicators suggest the bulls still have momentum after holding firm near 107,450, but the bearish cross between the 20- and 50-day SMAs is questioning the case of a positive trend reversal.

Initial resistance could emerge near the 50-day SMA at 114,900 if upside pressures return. On the downside, a move below 107,450 may find support somewhere between 105,000 and the 200-day SMA at 102,075.