FX News & Real-Time Market Commentary: September 2025 Forex Forecast, EUR/USD, GBP/USD, Gold, Silver & Central Bank Policy Analysis
FX News & Real-Time Market Commentary: September 2025 Forex Forecast, EUR/USD, GBP/USD, Gold, Silver & Central Bank Policy Analysis
Key Takeaways
- September Fed cut probability at 85% with potential dollar weakness ahead
- EUR/USD technical breakout likely above 1.1806 with fundamental support
- Gold consolidation between $3,180-$3,440 awaiting catalyst for next leg up
- Silver outperformance expected with potential push toward $40+ on industrial demand
- Political uncertainty surrounding Fed independence creating additional dollar headwinds
1) Market Sentiment: Fed Cut Expectations & Political Pressure Dominating Trade
Right now, the markets completely focused on one thing: whether the Fed will actually cut rates in September. According to the CME's FedWatch tool, theres about 85% probability priced in for a quarter-point cut at the September 16-17 meeting. That's huge – the market is basically screaming for easing, and it's weakening the dollar across the board. We saw the dollar index drop to 97.83 recently, and I think theres more downside ahead .
What makes this situation extra weird is the political pressure coming from Trump. His attempt to fire Fed Governor Lisa Cook backfired spectacularly – she actually sued him to keep her job! This created a ton of uncertainty about the Fed's independence. Normally, central bank policy is predictable, but when political interference becomes a factor, all bets are off. I've been trading forex for 15 years, and I've never seen such direct pressure on the Fed. It's making dollar positions really tricky to manage .
The economic data sending mixed signals too. On one hand, we had decent GDP numbers showing 3.3% growth annualized. On the other hand, the job market showing some cracks with unemployment ticking up to 4.2%. The PCE inflation data came in exactly as expected – 2.6% annually – which gives the Fed cover to cut without looking like their panicking. Honestly, I think the Fed will use the "precautionary cut" narrative to justify their move .
Here's how the major central banks policies stack up right now:
Table: Central bank policy expectations for September 2025
The dollar weakness isn't just about rate cuts though – it's about relative economic performance. The US had it's worst dollar start to a year since 1973, which is pretty remarkable when you think about it. With Trump's trade policies creating uncertainty and the Fed potentially easing while other banks hold steady, I'm expecting dollar weakness to continue through September unless the data surprises dramatically .
2) EUR/USD Technical & Fundamental Analysis
The euro has been surprisingly resilient lately, trading around 1.1683 despite some real headwinds. It's up 5.76% against the dollar over the past year, which shows you how much the dynamic has shifted. I've been leaning long on EUR/USD since it broke above 1.15, and I think theres more room to run .
From a technical perspective, the setup looks promising. We're getting consistent higher lows since May, and the recent breakout above 1.1650 was significant. The next major resistance sits around 1.1806, and if we get a daily close above that level, I think we could see a run toward 1.19-1.20 in September. The momentum indicators are looking bullish too, with RSI holding around 60 without being overbought. Support on the downside should be around 1.1620, then 1.1550 .
Fundamentally, the eurozone has it's own issues but they might be less severe than the US right now. German inflation surprised to the upside at over 2%, while other countries like France and Italy are below expectations. This mixed picture gives the ECB some flexibility – they might delay additional rate cuts which would be euro positive. The political situation in France seems to be stabilizing after the confidence vote, though I'm still watching that closely .
What really surprises me is how EUR/USD has ignored the dollar strength we saw earlier this year. Normally, when the Fed is hawkish, EUR/USD gets hammered. But this time, the pair has shown remarkable resilience. I think this tells us that the structural dynamics are changing – maybe due to EU stimulus plans or concerns about US fiscal policy. From my perspective, the risk/reward favors long positions, especially if we get confirmation above 1.1806 .
The key data points I'm watching for EUR/USD direction this month:
- US Non-Farm Payrolls (Sept 5) – Always a market mover
- ECB rate decision (Sept 12) – Though no change expected
- Fed decision (Sept 16-17) – The big one
- Eurozone inflation revisions – For directional clues
3) GBP/USD Outlook: Sterling Holding Above Key Support
Cable's been trading around 1.3505 recently, which is actually pretty strong considering the dollar's movements. Sterling has held up better than I expected against the dollar, though it's still struggling against the euro. The key support level around 1.3450 has held multiple tests, which is bullish from a technical perspective .
The UK economic picture is mixed but stabilizing. The Services PMI came in at 53.6 versus 51.8 expected, which shows the economy isn't falling off a cliff. Consumer confidence is still weak at -20, but that's actually an improvement from earlier readings. The BOE is expected to hold rates steady at 4.25% while the Fed cuts, which should provide some relative support for sterling. I think the markets underpricing the BOE's hawkishness here .
Looking at the forecasts, most analysts expect GBP/USD to grind higher through September. RBC Capital Markets sees a peak just below 1.40, while Standard Chartered is more conservative with 1.37 targets over 12 months. The immediate resistance is around 1.3550, then 1.3600. A break above 1.36 could trigger a move toward 1.38 fairly quickly given how positioned the market is .
From a trading perspective, I like long positions above 1.3450 with stops below 1.3420. The risk/reward looks favorable with targets at 1.3600 then 1.3750. The key is to watch how it reacts to the Fed decision – if the dollar sells off on a cut, GBP/USD could be a big beneficiary. I'm actually more bullish on cable than EUR/USD right now because the positioning is less crowded .
What worries me a bit is the UK's exposure to global trade tensions. If Trump's tariffs start hurting global growth, the pound could suffer along with other risk-sensitive currencies. But for now, the technicals are holding up and the interest rate dynamics support further gains. I've added to my long position on any dips below 1.3480 .
4) Gold Forecast: Consolidation Before Next Leg Up?
Gold has been trading sideways lately, stuck between $3,180 and $3,440 since April. It briefly touched above $3,500 but couldn't hold the gains. This consolidation is actually healthy after the massive run-up we saw earlier this year – gold was up 26% in the first half of 2025!
The fundamental case for gold remains strong. With Fed cuts likely, real yields should decline making non-yielding gold more attractive. Geopolitical tensions haven't gone away either, and central banks are still buying at a robust pace. The World Gold Council estimates that if economic conditions deteriorate, gold could push 10-15% higher from current levels. Even under their base case, they see 0-5% additional gains by year end .
From a technical perspective, gold is building a nice base around $3,300. The consolidation is working off the overbought conditions we saw in June, and the momentum indicators are resetting in a healthy way. I'm watching for a daily close above $3,500 to confirm the next leg higher. If that happens, I think we could see a rapid move toward $3,675 (J.P. Morgan's year-end target) and possibly $4,000 .
What many traders miss about gold is it's dual role as both a safe haven and an inflation hedge. With inflation still at 2.7% – above the Fed's target – but showing signs of potentially cooling, gold can perform well in either scenario. If inflation remains sticky while growth slows, that stagflationary environment could be particularly bullish for gold. My sense is we're setting up for a breakout to the upside, maybe after the Fed meeting .
The key levels I'm watching:
- Resistance: $3,440 (recent range high), then $3,500 (psychological)
- Support: $3,280 (recent low), then $3,180 (range support)
- Breakout target: $3,675+ on a daily close above $3,500
5) Silver Analysis: The Secret Outperformer With Room to Run
Silver has been absolutely on fire lately, hitting $39.97 on August 29th – just cents away from the psychological $40 level. This is it's highest level in nearly 14 years, and technically, silver has set it's highest monthly and quarterly closing records in 2,500 years! That's incredible when you think about it.
The silver market is experiencing a perfect storm of factors. On the demand side, industrial usage is soaring – solar panels account for 16% of global demand (growing 14% annually), and electric vehicles now take 2.9%. These structural demand drivers are here to stay as the green energy transition accelerates. On the supply side, we've had deficits since 2021, with 2023 seeing a massive 184.3 million ounce shortfall. The same expected for 2024, with consumption projected at 1.21 billion ounces against supply of only 1.03 billion .
The investment demand picture is bright too. Russia recently announced plans to buy $535 million worth of silver over three years – the first time a central bank has explicitly included silver in it's purchasing plans during this bull market. That's a big deal because central bank buying typically provides a stable base of demand .
From a trading perspective, silver looks technically strong. It's breaking out of an ascending linear regression channel, which is bullish. The next major resistance is at $40, but if we get a daily close above that level, I think we could see a rapid move toward $42-45. The momentum indicators are bullish without being extreme, suggesting there's room to run. I'm long silver from $38.50 and adding on any dips toward $39 .
Analyst predictions for silver are overwhelmingly bullish:
- Citigroup: $40 target for 2025
- JP Morgan: $38 target for 2025
- Saxo Bank: $40 target for 2025
- Alan Hibbard: $40 for 2025, $52.50 for 2026
- InvestingHaven: $48.20-$50.25 for 2025, $75 for 2027
6) Trading Strategies for September Volatility
With September historically being a volatile month for markets, having a clear game plan is essential. Based on the current setup, here's how I'm positioning my portfolio and what I recommend to clients:
For EUR/USD, I'm waiting for a daily close above 1.1806 before adding to long positions. The stop goes below 1.1620, with initial targets at 1.1950. The risk/reward is about 1:2.5 which is acceptable. If we get weak NFP data, I might enter early around current levels .
For GBP/USD, I like longs above 1.3450 with stops below 1.3420. The first target is 1.3600, then 1.3750. The technical setup suggests we could see a move toward 1.39 by year-end, so I'm willing to hold core positions through September volatility .
For precious metals, I'm already long both gold and silver but would add on breaks above key resistance. For gold, I want to see a daily close above $3,500 before adding, targeting $3,675. For silver, a close above $40 triggers more buying, targeting $42-45. The silver trade looks particularly attractive because of the supply-demand dynamics .
The key events I'm trading around this month:
- September 5th - US Non-Farm Payrolls: Always market-moving
- September 12th - ECB Decision: Probably a non-event but could cause EUR volatility
- September 16-17 - Fed Decision: The big one – expect major volatility
- Throughout month - Various inflation data from major economies
Risk management is crucial this month. Position sizes should be slightly smaller than normal given the expected volatility, and stops need to be wider to account for the increased noise. I'm using 1.5x my normal stop distance but 0.75x position size, which keeps the same dollar risk but gives trades more room to breathe.
7) Key Risk Factors & Potential Market Shocks
While the baseline scenario seems clear (Fed cut, dollar weakness), we need to be aware of what could go wrong or surprise the markets. These are the key risk factors I'm monitoring:
First and foremost, the Fed could disappoint. There's a 15% chance they don't cut in September, and if that happens, the dollar would rocket higher. The recent economic data hasn't been terrible – GDP at 3.3% was actually better than expected – so if we get strong NFP numbers and hot inflation data before the meeting, the Fed might delay. This is my number one risk .
Second, geopolitical tensions could escalate unexpectedly. While we're all watching the usual hotspots, something could emerge from left field. Typically, geopolitical shocks cause flight to safety, which benefits the dollar and yen but hurts risk currencies. Gold would likely benefit the most in this scenario. I'm keeping an eye on the Russia-Ukraine situation and China-Taiwan tensions particularly .
Third, the political situation around the Fed could worsen. If Trump escalates his attacks on the Fed or tries to replace more officials, it could create unprecedented uncertainty about monetary policy. This might actually dollar negative as investors worry about institutional stability, but the effects are hard to predict. I'm reducing my dollar exposure ahead of any further political developments .
Fourth, energy prices could spike. If we get a supply shock that pushes oil prices significantly higher, it could change the inflation picture and force the Fed to reconsider cutting. This would be dollar positive but bad for risk assets. The strategic petroleum reserve is already depleted, so there's less buffer for supply disruptions .
Finally, the technical breakouts could fail. If EUR/USD gets rejected at 1.1806 or silver at $40, we could see sharp reversals. These technical levels are psychological as much as technical, so failing at them would discourage buyers. I'm prepared to reverse my positions if key levels don't hold, though that's not my base case .
8) Conclusion: Preparing for September Volatility
September shapes up to be a decisive month for currencies and commodities. The Fed decision will obviously be the main event, but the various economic data releases throughout the month will determine whether that cut actually happens.
I'm leaning toward continued dollar weakness based on the expected Fed easing and political uncertainty. EUR/USD and GBP/USD both look poised to move higher, with silver and gold likely to breakout to the upside as well. The technical setups support this view, and the fundamentals line up too.
That said, the risks are substantial – especially if the Fed surprises hawkish or if we get hot inflation data. Position sizing and risk management will be crucial this month. I'm using wider stops than normal and slightly smaller positions to account for the expected volatility.
The trade I like the most is long silver above $40. The supply-demand dynamics are incredibly bullish, the technical setup looks strong, and the investment demand is growing. Silver could easily outperform gold in September, especially if we get any kind of risk-off sentiment that boosts precious metals but also if the industrial demand story continues to play out.
Whatever happens, September should provide plenty of trading opportunities. The summer doldrums are over, and the big players are returning to their desks. Liquidity should improve, and volatility will likely increase. For traders, that's both a challenge and an opportunity.
Frequently Asked Questions
What's the probability of a Fed rate cut in September?
The markets are pricing in about 85% probability of a quarter-point cut at the September 16-17 meeting according to the CME FedWatch tool. This expectation has been weighing on the dollar recently .
How high can silver prices go in September?
Silver nearly reached $40 in late August, and many analysts believe it could break through this psychological barrier in September. Targets for 2025 range from $38 (JP Morgan) to $40+ (Citigroup, Saxo Bank), with some predicting moves toward $45 if the breakout gains momentum .
Is EUR/USD likely to continue rising?
The technical setup suggests EUR/USD could break above 1.1806 resistance, which would open the path toward 1.19-1.20. Fundamentally, the pair is supported by expected Fed cuts and relative ECB stability, though the eurozone has it's own economic challenges .
What's the main risk to these forecasts?
The primary risk is the Fed not cutting rates in September, which would likely cause a sharp dollar rally. Other risks include unexpected geopolitical events, hotter-than-expected inflation data, or technical breakouts failing at key resistance levels .
Are gold and silver correlated in their movements?
While gold and silver often move similarly as precious metals, silver has additional industrial demand factors that can cause it to outperform. Recently, silver has been stronger due to both safe-haven demand and industrial usage in green technologies .