This report provides an analysis of the primary factors influencing gold prices and potential opportunities for the USDJPY, offering insights for investors.
***All information presented is for educational purposes only and should not be interpreted as financial advice or a recommendation for trading or investment decisions.
Fundamental Analysis
Previous Recap of the Whole Economy:
The US economy is making some sloppy progress with the weakness in the job market, while inflation still stays above the restrictive level of 2%. Yet, the fragile market is pushing the Federal Reserve to cut the interest rate 3 times this year, starting in September, October, and December. What is important is that several important figures are also raising some doubts on the US economy, with JPMorgan anticipating seeing some sell-off in the US equity market, while Ray Dalio warned about the potential of a slipback on the highly dangerous ‘fifth stage.’
Plus, housing market concerns, rising national debt, and the potential of a 1 trillion tariff refund if the US court wins over Trump’s illegal act; all of that could push the US economy off the cliff.
Therefore, the future of the US economy will fall on the Federal Reserve rate decision, while leaving some spotlight on the Bank of Japan (BOJ) as well, as this could shift some tension in the market.
7 Major Central Banks’ Rate Decisions in One Month
First, focus on the Federal Reserve. The last consumer price index and producer price index this month will be the last data to consider before the Fed really eases.
- Hotter than the previous figure → the FED may still proceed to cut the rate, albeit the statement could be hawkish.
- Cooler than the previous figure → There will be some changes in the odds projection, which could also lead to an appreciation of the gold price, while dumping the stock market and bond market.
→ Next FED meeting is on September 18th, 2025. Lowering the rate will potentially lead to weakness in the USD and a higher gold price.
Second, focus on the Bank of Japan. As of Sunday, Japanese Prime Minister Shigeru Ishiba decided to resign after his last negotiation with President Donald Trump, lowering the tariffs from 25% to 15%. Changing the prime minister could be an act of shifting the fiscal and monetary policy while bringing uncertainty in the market. This unexpected event could change the whole scenario of having a weakening in the USDJPY. Why?
- Before: Easing in the Federal Reserve and the potential of hiking the rate from Japan will make the USDJPY weaken.
- After: if the new PM continues influencing to tighten the monetary policy, then the same scenario will apply. But if it’s not, then the chance of having USDJPY decline will be reduced. Meaning that USDJPY could potentially weaken moderately or even move sideways only.
***Next BOJ meeting is on September 19th, 2025.
Furthermore, other central banks from Canada, the UK, Europe, or even Australia will likely hold the interest rate longer. Not much to focus on, but you can look forward to their statement after their rate is released.
Geopolitical Tension:
The major war conflicts we are having right now are Israel-Gaza, Russia-Ukraine, US-Venezuela, and the potential resurgence of Iran with the US sanctions over its nuclear program.
Key note here:
- Higher geopolitical tension → rising uncertainty → gold price in favor.
- Easing geopolitical tension, aka ceasefire, → will bring more global stability → The gold price will likely depreciate.
But for now, we are still sensing only the tension and not the ceasefire. In fact, the US also changed its Department of Defense to the Department of War, raising some doubt whether this move will act as a signal to WWIII or further destruction.
Instability in Global political
Not only Japan’s PM resignation, as I mentioned earlier, but even in France and Indonesia, they are also facing some political issues. French Bayrou resigned after losing a confidence vote, while Indonesian Minister Sri Mulyani Indrawati also resigned, which has led to a market sell-off.
In conclusion, we are seeing several instabilities in the global political and fragile economy, and rising uncertainty in the geopolitical tension all over the place, which will be very favorable for the gold price.
However, one thing to remember: tension is good for gold. But if the tension is too much, watch out for the market reaction, as the gold price could potentially sell off unexpectedly due to extreme fear. Otherwise, when everything becomes clearer, such as when the ceasefire is met, the Federal Reserve’s hawkish stance and a stronger economy come into place, and that also pushes the gold lower.
Technical Analysis
Gold Market Overview — September 2025
Gold is currently trading at $3,646.095, continuing its bullish momentum amid expectations of a Federal Reserve rate cut. The chart reveals a strong breakout above previous resistance, with key structural levels forming around volume and liquidity zones.
Key Technical Zones
- Current Price: $3,646.09 — Trading above all major resistance zones, confirming strong bullish momentum.
- Point of Control (POC): $3,548.00 — Highest volume level from last week, indicating where market participants found the most value. This zone may act as a key support level.
- Volume Cluster 1: $3,481.00 — A high-volume “fair value” zone from last week, can act as a second support level.
- Volume Cluster 2 & H4 Liquidity Zone: $3,417.00 — A deeper support zone from the previous week, combining volume concentration with liquidity. Price may revisit this area to sweep stops before resuming upward movement.
Price Action Structure
- Breakout Confirmation: Price broke above previous diagonal resistance
- Volume Profile: last week’s POC is higher than the week before last POC, showing strong buyer interest.
- Liquidity Risk: Price may revisit 3,417.00 to sweep stops before continuation.
Trading Strategy
- Bullish Bias: Above $3,548.00 with potential continuation toward 3,700+
- Pullback Scenario: Retest of 3,481.00 or sweep of 3,417.00 before resuming uptrend.
- Invalidation: Break below 3,417.00 with volume → shift to neutral/bearish
USDJPY Market Overview — September 2025
Key Technical Zones
- Current Price ¥147.35 — Trading just below key supply zones at ¥149.90, still in the range between 161.855 – 140.472 since January of 2024.
- D1 Liquidity Zone ¥147.160 — This level can easily be swept and continue to the downside.
Price Action Structure
- Range-Bound Context: Price remains inside the long-term range between ¥161.855 and ¥140.472, established since January 2024. This signals indecision and potential for breakout volatility.
- Supply Zone Reaction: Current price at ¥147.35 is trading just below the key supply zone at ¥149.90, suggesting possible rejection or consolidation before any bearish continuation.
- Liquidity Risk: The D1 liquidity zone at ¥147.160 is vulnerable to a sweep. Price may dip below this level to trigger stop-losses before deciding on direction — a classic liquidity trap setup.
- Bearish Pressure Potential: If price fails to reclaim ¥149.90 and breaks below ¥146.160 with volume, it may revisit deeper support levels within the range, such as ¥145.00 or even ¥144.50. If the market could break below 140.472, then the long-term price projection is 122.604.
Trading Strategy-USDJPY
- Bullish Bias: Above ¥149.90 with potential continuation toward ¥161.855. A confirmed breakout above the supply zone would signal strength and open the path toward the upper boundary of the long-term range.
- Pullback Scenario: Retest of ¥147.160 (D1 liquidity zone) or sweep of ¥146.160 before resuming uptrend. These zones may act as liquidity traps, offering potential long entries if price shows reversal confirmation.
- Invalidation: Break below ¥140.472 with volume → shift to long-term bearish bias. If this key range support fails, price may project toward ¥122.604 over the coming months.
