Takeaway

The presenter highlights surging U.S. Treasury yields and a strengthening U.S. Dollar driven by hawkish Federal Reserve commentary, strong PMI data, and rising October rate hike odds (now priced at 70%). This policy and growth divergence is actively weighing on EUR/USD and AUD/USD, while elevated oil prices continue to fuel broader inflation concerns despite the Nasdaq reaching record closing highs.

What the presenter said

• U.S. Dollar & Rates: The U.S. Dollar posted its second consecutive week of gains as the 10-year Treasury yield hit a 19-year high and the 30-year yield reached its highest level since 2004 [00:04, 00:26]. Markets are pricing a 70% probability of an October Fed rate hike, up from 50% earlier in the week [00:57].
• U.S. Equities: Equities were mixed, with the Dow Jones under pressure while the tech-heavy Nasdaq broke out above a falling trendline to record closing highs [00:08, 01:34].
• Macro Data & Fed Outlook: The Fed remains comfortable with labor market resilience following a strong August Non-Farm Payrolls report [02:40]. Upcoming focal points include the final U.S. Q2 GDP reading and annual core PCE inflation, which is expected to rise to 3.4% from 3.3% [02:05].
• EUR/USD: EUR/USD fell to late-July lows despite an ECB rate hike, breaking down from an ascending channel below its 50 and 200 EMAs due to the widening growth gap between the U.S. and the Eurozone [03:18, 04:19].
• Crude Oil: Higher oil prices are feeding inflation worries; price broke out of a symmetrical triangle before meeting resistance at the 104–105 zone, though holding above the 50 and 200 EMAs keeps the technical structure constructive [05:27, 05:58, 06:15].
• AUD/USD & RBA: The Reserve Bank of Australia is expected to hike rates next week (with a 50 bps move possible) [06:54, 07:05]. AUD/USD broke below its 50 EMA and trendline support, facing downside risk if RBA hawkishness fails to materialize [07:56].

Trade ideas

None stated. The presenter outlined a directional market view across FX, equities, and commodities without specific trade recommendations.

Levels and data cited

Price Levels: - Nasdaq: 30,750 (record high in focus). - USD/JPY: Broke above 158. - EUR/USD: Testing support at 1.1375; a break opens the door to 1.1300 (levels last seen in 2005). Resistance for a recovery stands at 1.1500. - Light Crude Oil Futures (CL): Resistance at 104–105 (23.6% Fibonacci retracement of the 55 low to 120 high). Targets for buyers sit at 95 and 100; key support for sellers to breach is 88 (50% Fibonacci retracement). - AUD/USD: Key downside support at the 200 EMA around 0.6985; a breakdown exposes the June low target of 0.6800.

Macro Data: - U.S. PCE expected to tick up to 3.4% annually from 3.3%. - U.S. Q2 GDP final revision due next Wednesday. - August Non-Farm Payrolls reported as "really strong." - Eurozone inflation figures due next week.

Risks and what would invalidate this

• Further U.S. Data Upside: Additional upside surprises in U.S. inflation or another strong jobs report could further escalate Fed hike expectations and Dollar strength.
• Middle East Geopolitics: Fast-moving developments in the Middle East could drive crude oil higher, rapidly shifting inflation expectations and cross-asset yields.
• Dovish RBA: An insufficiently hawkish RBA rate decision combined with U.S. Dollar resilience would invalidate an AUD/USD recovery, accelerating downside momentum.