Rate Hike Odds Drop to 50% (2026/09/04)
1. Fundamental Analysis
Waller Signals Dovish Shift, Rate Hike Odds Retreat to Fifty-Fifty:
Fed Governor Waller indicated that if inflation continues to improve, he would lean toward supporting holding rates steady in September. This marks a stark contrast to the hawkish stance previously adopted by Fed Chair Warsh.
Consequently, market expectations for a 25-basis-point rate hike in September rapidly declined from over 60% to approximately 50%–54%. U.S. short- and long-term Treasury yields fell in tandem, and the dollar weakened noticeably.
Services Sector Remains Resilient, but Employment and Costs Diverge:
The U.S. August ISM Services Index rose to 55.4, showing robust expansion in business activity and new orders. However, the employment index remained in contraction territory at 47.8. Concurrently, the ISM prices index climbed to 72.6, underscoring persistent inflationary cost pressures. The current policy environment resembles a tug-of-war characterized by "economic resilience, cooling employment, and elevated price pressures."
Tonight's 20:30 NFP Report is the Ultimate Focus:
Markets currently expect U.S. August non-farm payrolls to add around 50,000 to 60,000 jobs, with an unemployment rate of approximately 4.1%. If employment continues to cool significantly, bets on a September rate hike could drop further. Conversely, if job growth decisively beats expectations, Warsh's previous hawkish narrative may regain dominance. Therefore, tonight's jobs report will serve as the critical pricing node for the next phase of policy expectations.
2. Technical Analysis
1-Hour Timeframe (Intraday Short-Term: Awaiting Pullback)
• Trend Assessment: The 1-hour chart currently trades near 4,470.55, entering a high-level horizontal consolidation phase following its previous rapid ascent. The price is temporarily below the MA1 and MA20 but remains above the MA30, indicating that the market is digesting the recent gains without forming a confirmed descending structure.
• Indicator Monitoring: RSI(14) sits at 58.74, operating in a neutral-to-bullish zone. In the short term, focus is on overhead resistance near 4,480–4,487 and downside support around 4,463.
4-Hour Timeframe (Medium-Term Trend: Corrective Rebound)
• Trend Assessment: On the 4-hour chart, price action has reclaimed the MA1, MA20, and MA30. The rebound initiated near 4,280 has successively overtaken key short- to medium-term moving averages, notably improving the 4-hour structure. While it's premature to confirm a resumption of the broader macro uptrend, the corrective structure remains strong.
• Indicator Monitoring: RSI(14) reads 55.93, positioned in a neutral-to-bullish area without entering an overheated state.
3. Trading Execution Plan
Given the high-level consolidation on the 1-hour chart and the corrective strength on the 4-hour chart, today's strategy adopts a single-condition plan to buy on pullbacks, avoiding direct chase-buying above 4,480.00.
• Strategy Direction: Buy on Dips
• Trading Signal: Buy (Conditional Trigger)
• Confidence Index: 65 / 100
• Entry Observation Zone: 4,460.00 - 4466.00
• Median Entry Level: 4,463.00
• Stop Loss Reference: 4,431.00
• Take Profit Target: 4,523.64
• Risk/Reward Ratio: Approx. 1 : 1.9
[Execution Details]
With the price currently near 4,470 and consolidating below 4,480 on the 1-hour chart, the ideal rhythm is to wait for a retracement into the 4,460–4,466 zone. This area closely aligns with the 1-hour MA30 (4,463.26) and the 4-hour MA1 (4,465.89), representing a distinct short-term support band.
If price tests this zone and prints a long lower wick or bullish engulfing candle on the 1-hour or lower timeframes, or if it briefly drops below 4,460 before quickly reclaiming 4,465, it can serve as confirmation of the rebound structure's continuation.
4. Risk Disclaimer
Financial trading involves unpredictable risks, including the potential loss of principal. This analysis is for informational purposes only and does not constitute direct investment advice. Traders should manage risk independently based on their own risk tolerance.