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GBP/USD Holds Steady Above 1.2700 Amid Muted USD Movement

GBP/JPY Drops Below Mid-191.00s Following BoJ’s Verbal Intervention

GBP/JPY Drops Below Mid-191.00s Following BoJ’s Verbal Intervention

During the early hours of the European session on Wednesday, the GBP/JPY currency pair exhibited a downward trend, trading around 191.30 and breaking its two-day streak of gains. This shift in momentum comes as the Japanese Yen (JPY) begins to regain some of its recently lost ground, a response triggered by a verbal intervention from Japanese financial authorities. The intervention’s timing is critical, coming right before the Good Friday holiday, a period often marked by heightened market caution and a predilection for safer assets.

The turn of events started with a statement from Japanese Finance Minister Shunichi Suzuki. On Wednesday, he emphasized that the Japanese government would not hesitate to take “decisive steps,” including potential interventions, to stabilize any excessive fluctuations in foreign exchange markets. This declaration spurred a quick reaction, bolstering the JPY notably against the British Pound Sterling (GBP). The market’s cautious sentiment, amplified by uncertainties surrounding the upcoming holiday, has also played a part in driving the flow towards safe-haven currencies like the JPY, albeit temporarily.

Concurrently, a key development came from the Bank of Japan (BoJ), where a policymaker hinted at continuing with the bank’s dovish stance. This intention to maintain accommodating monetary conditions could potentially limit the ascent of the JPY and provide a buffer to the downside movements of the GBP/JPY pair. BoJ Governor Kazuo Ueda, echoing this sentiment on Wednesday, stated, “Based on our current economic and price projections, accommodative financial conditions are expected to continue for the time being.”

In the United Kingdom, recent comments from Catherine Mann, a prominent hawkish figure at the Bank of England (BoE), have stirred the markets. Mann indicated that investors might be overestimating the likelihood of multiple interest rate cuts this year. The response in the money markets was immediate, with a notable uptick in bets for an easing of monetary policy at the BoE’s next decision, estimating a 20% probability of a rate cut.

Looking ahead, traders are gearing up for the release of the UK’s Gross Domestic Product (GDP) growth figures on Thursday. These are projected to show a contraction of 0.3% quarter-over-quarter in the fourth quarter. Should the data exceed expectations, indicating stronger GDP growth, the Pound Sterling (GBP) might find new vigor, potentially giving a boost to the GBP/JPY pair. Additionally, Friday will bring the Tokyo Consumer Price Index (CPI) for March into focus, an indicator that could further influence the currency pair’s dynamics. This confluence of economic releases and policy signals from Japan and the UK is setting the stage for a potentially volatile period for the GBP/JPY currency pair.

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EUR/USD Holds Below 1.0400 Ahead of Eurozone Retail Sales Data

EUR/USD Stays Near 1.0860 as Market Awaits Fed Chair Powell’s Speech

EUR/USD Stays Near 1.0860 as Market Awaits Fed Chair Powell’s Speech

During the early hours of Asian trading on Friday, the EUR/USD currency pair experienced a slight pullback, settling in the vicinity of 1.0860. This modest decline in the Euro against the US Dollar can be attributed to a strengthening US Dollar and an uptick in US Treasury bond yields. Market participants are keenly awaiting the German IFO Business Climate Index, which is due on Friday, in anticipation of insights from Fed Chair Jerome Powell’s upcoming speech.

The focus on the US Federal Reserve has intensified following its recent decision to maintain its benchmark overnight borrowing rate within the range of 5.25% to 5.5%. Fed Chairman Jerome Powell, in his address, refrained from specifying when rate cuts would be implemented. However, he signaled a likelihood of reducing interest rates before the year’s end. Market expectations, gauged by the CME FedWatch Tool, suggest there is an 80% probability that the Fed will initiate rate cuts as early as the June meeting.

Recent economic data from the United States have also played a crucial role in influencing market sentiment. The US S&P Global Composite PMI for March was reported at 52.2, slightly down from the previous 52.5. Meanwhile, the Manufacturing PMI exceeded market expectations by climbing to 52.5 in March from February’s 52.2, against a forecast of 51.7. However, the Services PMI fell short of expectations, coming in at 51.7 compared to the estimated 52.0 and February’s 52.3.

On the European front, Thursday’s Purchasing Managers Index survey by the HCOB revealed mixed signals. The Eurozone Manufacturing PMI dropped to 45.7 in March, underperforming against both the previous 46.5 and the expected 47.0. Contrarily, the Services PMI for March outpaced forecasts, registering at 51.1, an improvement from February’s 50.2 and surpassing the anticipated 50.5. The Composite PMI for the Eurozone marked a slight increase to 49.9, against the projected 49.7 and February’s reading of 46.3.

Looking forward, the trading community will closely monitor the German IFO Business Climate Index, along with speeches by Fed Chair Powell and Barr on Friday. The forthcoming week promises further significant data releases, including the German Retail Sales for February and the US Gross Domestic Product (GDP) figures for the fourth quarter (Q4). These forthcoming events are expected to provide clearer direction for the EUR/USD currency pair, as traders seek to gauge the broader economic landscape and its impact on currency markets.

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Focus Shifts to FOMC Minutes

GBP/JPY Stays Strong, Yet Below the 193.00 Level After UK CPI Data Release

GBP/JPY Stays Strong, Yet Below the 193.00 Level After UK CPI Data Release

During early Wednesday trading in Europe, the GBP/JPY pair maintained its strength, staying just below the 193.00 mark. The Pound Sterling remained resilient against the Japanese Yen despite the release of lower-than-expected UK CPI inflation data for February. Market focus is now turning towards the Bank of England’s (BoE) monetary policy meeting on Thursday, where no change in interest rates is anticipated. Currently, the GBP/JPY is trading at 192.80, marking a 0.47% increase for the day.

The UK’s Consumer Price Index for February, as reported by the Office for National Statistics, saw a month-over-month increase of 0.6%, recovering from a 0.6% decline previously but falling short of the projected 0.7% rise. Year-over-year, the CPI grew by 3.4%, slowing down from January’s 4.0% increase and not meeting the expected 3.6% growth.

This data is expected to influence the BoE’s upcoming decision on interest rates. With inflation showing signs of easing, the BoE, under Governor Andrew Bailey, is predicted to maintain its current interest rate of 5.25% for the fifth consecutive time. Bailey has previously stated the need for more evidence of inflation trending towards the 2% target before considering a rate cut.

Meanwhile, the Bank of Japan (BoJ) recently raised its interest rate by 10 basis points to 0%, the first hike since 2007. However, the BoJ offered no clear guidance on future policy, keeping financial conditions largely accommodative, which has placed some downward pressure on the Yen and supported the GBP/JPY pair.

Looking forward, market attention will soon shift to the release of Japan’s Merchandise Trade Balance for February and the Jibun Bank Manufacturing PMI for March, followed by the BoE’s interest rate decision on Thursday. These events are expected to provide clearer direction for the GBP/JPY movement.

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EUR/JPY Rises, Awaits BoJ Rate Decision Below Mid-162.00s

EUR/JPY Rises, Awaits BoJ Rate Decision Below Mid-162.00s

During the Asian trading session on Monday, the EUR/JPY currency pair exhibited a stronger performance, stabilizing below the mid-162.00s range. This market movement comes amidst growing investor speculation that the Bank of Japan (BoJ) might soon shift away from its long-standing ultra-dovish monetary policy. The anticipation is building towards the BoJ’s interest rate decision, which is scheduled for announcement on Tuesday. As of the latest update, the EUR/JPY is trading at 162.35, showing a marginal decline of 0.01% for the day.

This currency pair’s dynamics are also influenced by expectations surrounding the European Central Bank (ECB). Several ECB policymakers are foreseeing a potential interest rate cut at the June meeting. ECB President Christine Lagarde has hinted that the earliest possibility for a rate cut would be in June, following the central bank’s revision of inflation forecasts and its prediction of achieving a 2% inflation target by 2025. ECB Governing Council member Klaas Knot has suggested the likelihood of a rate cut in June and foresees a total of three reductions throughout the year. Another ECB policymaker, Yannis Stournaras, has proposed the possibility of a rate cut as early as July, followed by two additional cuts before the end of the year.

Conversely, there is a divergence of opinions among analysts regarding the timing of the BoJ’s potential interest rate increase, debating between March and April. Should the BoJ opt for a rate hike, it is anticipated to increase the rates by 20 basis points (bps) to 0.1%, a rise from the current -0.1%. The probability of the BoJ waiting until April for the rate hike is also being considered, with the market currently assigning a 39% chance of an increase at Tuesday’s meeting. Any cautious or dovish statements from Japanese policymakers could potentially exert downward pressure on the Japanese Yen (JPY), thereby benefiting the EUR/JPY pair.

In the upcoming week, market focus will shift to several key economic indicators. Investors will closely monitor the Eurozone Harmonized Index of Consumer Prices (HICP) and the Trade Balance data, both due on Monday. The spotlight will then turn to the BoJ’s interest rate decision on Tuesday, alongside the release of the ZEW Survey results from Germany and the Eurozone. These economic releases are expected to provide significant cues for traders, influencing trading strategies around the EUR/JPY cross.

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USD/CHF Gains Momentum Above 0.8550 Ahead of FOMC Minutes

USD/CHF Nears 0.8790 Amid Strong US Inflation

USD/CHF Nears 0.8790 Amid Strong US Inflation

The US Treasury Secretary, Janet Louise Yellen, recently expressed her views on the future of interest rates in the United States, stating that it is unlikely they will return to the pre-pandemic lows. This observation was made in the context of discussing the interest rate assumptions in President Biden’s budget plan, which Yellen found to be in line with a wide range of forecasts, thus endorsing their credibility and reasonableness.

In the meantime, the Swiss Franc (CHF) is facing a unique set of challenges. The Swiss National Bank (SNB) has revised its strategy, moving away from fostering a robust domestic currency. This shift comes at a time when there is a general risk-on sentiment in the market, which typically leads to a decrease in the appeal of traditionally safe currencies like the Swiss Franc. The impact of this sentiment is evident as it places downward pressure on the CHF.

Thomas Jordan, the Chairman of the SNB, has publicly addressed concerns about the Swiss Franc’s excessive strength, particularly noting the potential negative impacts on Swiss businesses and exporters. These concerns are supported by recent data from Switzerland’s Foreign Exchange Reserves (CHFER), which have shown signs of recovery, hinting at the SNB’s likely intervention in the currency market. The central bank is presumably selling Swiss Francs and buying foreign currencies in an effort to control the CHF’s appreciation.

Adding to the economic landscape, consumer confidence in Switzerland has been on a decline, as evidenced by recent figures. The consumer confidence indicator fell to -42.3 in February, slightly lower than January’s -41.1, indicating growing worries about personal finances and the broader economy over the coming months. This negative trend in consumer sentiment underscores the challenges facing the Swiss economy. Further insights into the economic situation in Switzerland are expected with the upcoming release of the Producer and Import Prices for February on Thursday. These data points will provide a more comprehensive view of the nation’s economic health and prospects.

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GBP/JPY Falls Close to 188.70 Amid Rumors of Bank of Japan Mulling Rate Increase in March

GBP/JPY Falls Close to 188.70 Amid Rumors of Bank of Japan Mulling Rate Increase in March

The GBP/JPY pair retraced its recent gains from Tuesday, declining to near 188.70 in the Asian trading session on Wednesday. This shift can be attributed to the strengthening of the Japanese Yen (JPY), spurred by market speculation about the Bank of Japan’s (BoJ) potential interest rate hike in March.

A key factor fueling these speculations is Japan’s spring wage negotiations, which have concluded with notable outcomes. Firms have agreed to the demands of Rengo, Japan’s largest trade union confederation, for pay increases of 5.85% this year. This marks a significant development, surpassing a 5.0% increase for the first time in three decades. The substantial rise in wages reflects not only the country’s economic recovery but also an effort to combat the long-standing issue of stagnation in wage growth.

Furthermore, Japan’s Chief Cabinet Secretary, Yoshimasa Hayashi, has publicly expressed his support for widespread wage hikes throughout the economy. This stance is indicative of the government’s commitment to ensuring sustainable economic growth and improved living standards for its citizens.

The recent release of higher-than-expected producer inflation data from Japan has also played a crucial role in reinforcing the belief that the BoJ might soon initiate a rate hike. This anticipation has provided a strong boost to the JPY, resulting in the observed depreciation of the GBP/JPY currency pair.

On the other side of the equation, the UK’s economic indicators have shown a slight downturn. UK Average Earnings Including Bonuses for November 2023 to January 2024 have eased to 5.6%, down from 5.8% in the previous period. Moreover, annual wage growth excluding bonuses has also seen a reduction, dropping to 6.1% from 6.2%. These figures have led to an increased likelihood of the Bank of England (BoE) implementing rate cuts this year, with market participants now anticipating three rate cuts.

The Pound Sterling (GBP) has been noted as one of the top performers among major currencies in recent times. Analysts at Commerzbank are closely monitoring the GBP’s trajectory, though there remains a degree of uncertainty about the sustainability of its strength. At present, the GBP’s robust performance appears to be on somewhat shaky ground, influenced by both domestic economic indicators and international market dynamics.

Overall, the GBP/JPY’s movement reflects a complex interplay of economic factors from both the UK and Japan, highlighting the sensitivity of currency pairs to domestic economic policies and international market sentiments. As traders and analysts watch these developments, the future direction of GBP/JPY remains subject to further economic data and central bank decisions in both countries.

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EUR/USD Holds Steady Ahead of ECB Lagarde’s Speech

EUR/USD Stabilizes Around 1.0950, Awaiting US Payroll Data

EUR/USD Stabilizes Around 1.0950, Awaiting US Payroll Data

The EUR/USD currency pair has been exhibiting a phase of consolidation, struggling to extend the upward trajectory it started on March 1st. This period of steadiness comes as traders and market analysts fix their attention on forthcoming key economic releases from both the Eurozone and the United States. Notably, the anticipation centers around the Eurozone’s Gross Domestic Product (GDP) figures and the Nonfarm Payrolls data from the US. In the midst of this expectancy, the EUR/USD pair has been seen fluctuating around the 1.0950 mark during the Asian trading session on Friday.

The upcoming GDP data for the Eurozone, adjusted for seasonal variations, is projected to mirror the previous quarter’s figures, with an annual growth rate steady at 0.1% and a monthly rate unchanged at 0.0% for Q4 of 2023. On the other side of the Atlantic, the spotlight is on the US labor market, with Nonfarm Payrolls anticipated to show the creation of around 200,000 new jobs in February, a decrease from the 353,000 reported in the previous month. This figure is being closely watched as it could fortify market speculations regarding a potential interest rate cut by the Federal Reserve (Fed) in June. Current estimates from the CME FedWatch Tool suggest there is a 56.7% likelihood of such a rate cut occurring in June.

The currency pair’s movements also come in the wake of the latest monetary policy decision by the European Central Bank (ECB). On Thursday, the ECB made the decision to keep its current policy unchanged, maintaining its dedication to guiding inflation back within its target range. The bank has left the interest rates on its main refinancing operations, the marginal lending facility, and the deposit facility at 4.5%, 4.75%, and 4.0% respectively. The ECB has reiterated its commitment to maintaining appropriately restrictive monetary measures for as long as necessary to bring inflation under control.

Additionally, the Fed Chair Jerome Powell, during his second day of testimony before the US Congress, hinted at the possibility of rate reductions later in the year. His remarks have sparked interest among market participants, who are keenly observing the Fed’s monetary policy direction amidst varying economic indicators. Alongside Powell’s comments, Cleveland Fed President Loretta Mester, speaking at a virtual event hosted by the European Economics and Financial Center, expressed concerns over the sustained nature of inflation. Mester indicated that if economic conditions evolve in line with current forecasts, there might be a window for interest rate cuts later in the year.

These diverse and significant economic indicators from both sides of the Atlantic are playing a pivotal role in shaping market expectations and influencing the EUR/USD pair’s movements. As traders and investors brace for these key data releases, the currency pair is likely to remain in focus, with its near-term trajectory hinging heavily on these economic reports and policy decisions from the major central banks.

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Asian Stocks Inch Up Amid Geopolitical Risk, Anticipating Chinese GDP

Asian Stocks Inch Up Amid Geopolitical Risk, Anticipating Chinese GDP

Asian markets took a positive turn on Tuesday, following the upward momentum in US equities. This recovery comes after a period of losses influenced by the unfolding events in the Middle East. However, the overall market sentiment remains delicate, primarily due to concerns about the potential escalation of the Israel-Hamas conflict into a more extensive proxy war with Iran. Additionally, investors are cautiously eyeing significant Chinese economic data scheduled for release this week.

The ongoing Israeli-Palestinian conflict is a significant factor affecting the risk landscape. Israeli forces have continued their airstrikes on Gaza as efforts to secure a ceasefire have faced obstacles. Israel’s Defense Forces chief indicated the possibility of an eventual ground invasion into the Gaza Strip to combat the Hamas group, a move that could further escalate tensions. Iran has issued warnings in response to a ground invasion, adding to the geopolitical complexities. Moreover, there is a separate potential conflict on Israel’s northern border with Lebanon, involving exchanges of artillery fire with the Iran-backed Hezbollah group. These factors collectively cast a shadow of uncertainty over the markets.

Traders may also be adopting a cautious stance, awaiting the release of China’s third-quarter GDP data, a pivotal event given China’s status as Asia’s largest economy. Expectations point toward ongoing economic weakness, raising concerns about China’s economic conditions. Disappointing Chinese data has the potential to impact global risk sentiment and exert downward pressure on Asian stocks. Additionally, market participants are closely monitoring the scheduled speech by Federal Reserve Chair Jerome Powell later in the week.

The influence of elevated US Treasury bond yields cannot be overlooked. Concerns persist about the economic headwinds stemming from rising borrowing costs, which could act as a restraint on equity market gains, especially as companies prepare to report their quarterly earnings. 

Looking ahead, the market’s sentiment will likely be shaped by a combination of factors, including upcoming economic data releases in the United States, developments in geopolitics, and movements in US bond yields. Retail sales and industrial production figures, set for release during the early North American session, will offer further insights and influence traders’ decisions as they assess short-term opportunities.

 

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Treasuries and Stocks Rally on Fed Comments

Treasuries and Stocks Rally on Fed Comments

Financial markets witnessed a surge as Treasuries and Asian shares soared, driven by Federal Reserve comments that raised speculation about the central bank’s future actions.

The two-year Treasury, sensitive to policy changes, experienced its most significant drop since August’s end. Simultaneously, the benchmark 10-year Treasury had its best performance since March. These moves led traders to bet on the conclusion of the U.S. tightening cycle, amplified by the Israel-Hamas conflict, which spurred demand for safe-haven assets.

As a result, the MSCI’s Asia Pacific Index is set for its most significant gain in three months, with European and U.S. stock futures showing a modest increase. However, the potential impact of the Middle East conflict remains uncertain.

Federal Reserve Vice Chair Philip Jefferson suggested a cautious approach, given the recent rise in Treasury yields. Lorie Logan, President of the Federal Reserve Bank of Dallas, also hinted that surging long-term rates might reduce the need for further tightening.

Despite Middle East tensions, markets have remained relatively calm, offering some reassurance to investors, according to Hideyuki Ishiguro, a senior strategist at Nomura Asset Management.

Traders initially bet on another Fed rate hike this year after a surprising surge in U.S. employment in September. However, this changed as central bank officials downplayed the possibility of another 2023 rate increase.

The dollar remained steady as odds for another Fed tightening eased. It traded in a narrow range against its Group-of-10 peers.

However, Middle East tensions could escalate further, with reports of a top U.S. general warning Iran to stay out of the Israel-Hamas conflict.

In Asia, Chinese developer Country Garden Holdings Co. warned of its first-ever default, potentially leading to one of the nation’s largest restructurings.

Oil prices dipped slightly after Monday’s increase following the Hamas attack, while gold remained relatively stable.

Geopolitical concerns, coupled with moderating global economic growth, present challenges for markets, according to Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management. She said they favor fixed income over equities, citing a better risk-reward profile for fixed income.

Potential risks to U.S. stocks may arise from fiscal policy constraints, especially as the Fed combats high inflation, according to Morgan Stanley’s Michael Wilson. He believes that the absence of a long-term structure supporting fiscal discipline could impact financial markets.

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Asia Stocks Fall, Aussie Remains Down

Asia Stocks Fall, Aussie Remains Down

Hong Kong’s stock market faced a significant setback, plunging by as much as 3.4% upon reopening after a holiday, making it an underperformer compared to other regional indices. This decline contributed to the broader MSCI Asia Pacific Index hitting its lowest point since December of the previous year. Simultaneously, China was observing a weeklong holiday.

The Australian dollar managed to stabilize after an earlier loss, while the country’s government bonds remained steady, despite the central bank’s decision to keep its policy rate unchanged for the fourth consecutive meeting on Tuesday. The central bank issued a warning about the potential necessity for further tightening of monetary policy.

Asian bond markets experienced a downturn, with Australia’s 10-year bond yield hovering around its highest level since 2011. This mirrored the decline seen in US Treasuries following a series of hawkish statements from the Federal Reserve. These statements overshadowed earlier optimism regarding a deal to avert a US government shutdown. Treasury yields across all maturities increased by approximately 10 basis points on Monday, with the benchmark 10-year note yield reaching its highest level since 2007. However, Treasuries in Asia managed to stabilize on Tuesday.

Market strategist Charu Chanana from Saxo Capital Markets highlighted, “Markets remain risk-averse as the prospect of higher rates for a longer period continues to resonate due to marginally hawkish US data and central bank speakers.”

As the threat of a US government shutdown subsided, global bond selloffs accelerated, with traders increasing their bets on a potential rate hike from the Federal Reserve in November.

In contrast to the overall market trend, China Evergrande Group experienced a surge of up to 42% as it resumed trading following a halt last week.

In the commodities market, gold held its ground after experiencing a decline to its lowest point since March. Oil prices, on the other hand, saw a dip, with West Texas Intermediate falling below $90 a barrel. A Citigroup Inc. analyst suggested that reduced demand from China could limit the price gains resulting from OPEC+ supply cuts.

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S&P 500 Bounces to $4,300, Yet September Ends in Losses

S&P 500 Bounces to $4,300, Yet September Ends in Losses

The Standard & Poor’s (S&P) 500 index managed to regain some ground on Thursday, posting a respectable gain of nearly 0.60% and closing just below the critical $4,300.00 level. This positive momentum was mirrored by other major U.S. indices, with the Dow Jones Industrial Average (DJIA) climbing 116 points to settle at $33,666.34, an increase of 0.35%, and the Nasdaq Composite outperforming, surging over 0.80% to end the day at $13,201.28.

The rebound in U.S. equities came as a welcome respite for investors who had been enduring a challenging period in September. The S&P 500, in particular, had experienced a sharp decline in recent weeks, with its value plummeting over 5.0% from its September peak, which had approached the lofty heights of $4,540.00. September, it seems, is poised to become the year’s worst-performing month for equities, with most major indexes retreating from the summertime highs.

The sharp drop in equity prices earlier in the month was attributed to a multitude of factors, which sent jitters throughout the financial markets. Chief among these concerns were uncertainties surrounding the Federal Reserve’s stance on reducing its bond-buying program and the impending specter of rising interest rates. Additionally, worries regarding the impact of the Delta variant of COVID-19 on the global economic recovery added to the prevailing unease.

Thursday’s rebound in the stock market was accompanied by a relaxation of selling pressure and a respite for U.S. Treasury yields. This newfound stability allowed equities to regain some lost ground as investors looked forward to Friday’s release of the crucial U.S. Personal Consumption Expenditure (PCE) Price Index data.

One of the key events on the horizon is the release of the U.S. PCE inflation measure for the month of August, which is expected to hold steady at 0.2%. Investors are closely monitoring inflation data as it plays a pivotal role in the Federal Reserve’s monetary policy decisions and can have a significant impact on market sentiment.

In addition to inflation concerns, there has been growing apprehension among investors regarding the possibility of a U.S. government shutdown driven by partisan politics. These fears, coupled with worries about a potential economic recession, have weighed heavily on equity markets.

As the month of September draws to a close, investors are bracing for continued volatility and uncertainty. The path forward for U.S. equities remains uncertain, with market participants closely monitoring economic data releases, central bank statements, and geopolitical developments that could shape the trajectory of financial markets in the coming months.

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US Yields Surge, Asia Stocks Fall Amid Fed’s Hawkish Stance

US Yields Surge, Asia Stocks Fall Amid Fed’s Hawkish Stance

US Treasury yields hit a fresh 16-year high, reaching 4.552%, marking levels not seen since October 2007. This surge was driven by the Federal Reserve and other major central banks signaling that interest rates would remain elevated for an extended period. Consequently, the US dollar held near a 10-month high, with the US dollar index reaching 106.10, its highest since November 30, before settling at 106.00.

In response to the soaring yields and a strong dollar, Asia-Pacific stock markets faced declines. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped by 0.33%. Tokyo’s Nikkei fell by 0.7%, South Korea’s Kospi slid 1%, and Hong Kong’s Hang Seng slipped 0.3%. Mainland Chinese blue chips opened flat.

US stock futures pointed to a 0.3% decline, following a 0.4% rise in the S&P 500 overnight. Traders now consider the likelihood of another quarter-point Federal Reserve rate hike by January to be a toss-up, and they have postponed expectations for rate cuts until the summer.

Westpac strategists anticipate further increases in yields in the near term, which would also strengthen the dollar. They foresee 10-year yields potentially peaking around 4.75% in the coming weeks. Chicago Fed President Austan Goolsbee noted that the risk of persistent inflation above the Fed’s 2% target outweighed concerns about the Fed’s tightening policy hindering the economy.

The US economy’s relative outperformance, compared to the stagnation in the eurozone and Britain, has supported the dollar against those currencies. The euro edged down to US$1.05855, nearing its overnight low of US$1.0575, last seen in mid-March. Sterling also slipped to US$1.22065, approaching Monday’s six-month low of US$1.21945. The dollar remained near an 11-month peak of 148.97 yen, raising the possibility of Japanese authorities intervening in the currency markets.

Gold remained relatively stable at around US$1,915, after falling from above US$1,947 over the past week. Crude oil continued to weaken due to concerns that central banks would keep interest rates elevated for an extended period, potentially impacting fuel demand. Brent crude futures were down 11 cents at US$93.18 a barrel, while US West Texas Intermediate crude futures traded 1 cent lower at US$89.67.

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US Dollar Stabilizes After Recent Losses

Stocks Plummet, US Yields Surge, Dollar Gains Momentum as Federal Reserve Adopts Hawkish Stance

Stocks Plummet, US Yields Surge, Dollar Gains Momentum as Federal Reserve Adopts Hawkish Stance

Asia-Pacific shares followed the downward trend set by Wall Street on Thursday, as investors interpreted the latest policy statements from the US Federal Reserve as a signal of higher and longer interest rates. 

The broadest index of Asia-Pacific shares outside Japan, MSCI’s (.MIAPJ0000PUS), was down 0.4% in early afternoon Hong Kong time. Japan’s Nikkei (.N225) slid 0.6%, China’s blue-chip (.CSI300) dipped 0.6%, and Hong Kong’s benchmark shed 1.3%.

The yield on two-year US Treasury notes rose to a 17-year high of 5.1970% on Thursday morning and hovered around 5.18% by early afternoon. 

Similarly, Japan’s 10-year government bond yield reached its highest level in a decade, in line with the US 10-year Treasury yields, which hit a 16-year peak at 4.4310%.

“We anticipate further increases in bond yields in the near future due to the Federal Reserve’s hawkish position,” said Tai Hui, APAC chief market strategist at J.P. Morgan Asset Management. He added that while high interest rates can cool the economy, they remain positive on long-term government bonds, investment grade corporate debt, as well as growth and tech stocks.

Ben Luk, senior multi-asset strategist at State Street Global Markets, noted that the overall tone of the Fed’s latest meeting was not excessively hawkish but there were two surprises. The forecasts for 2024 were slightly higher than expected, and Fed statements indicated that macroeconomic growth would hold up despite higher rates. 

The US central bank held interest rates steady on Wednesday and projected an increase by the end of the year, stating that monetary policy will likely be much tighter through 2024 than previously estimated. The median forecast for the federal funds rate at the end of the year is now 5.1%, compared to the 4.6% estimated in June. 

The upward revisions to rate forecasts prompted a rebound in the US dollar, pushed US Treasury yields to multi-year highs, flattened the yield curve, and caused stocks to tumble.

The dollar index, which measures the currency against a basket of rivals, reached its highest level since March 9 at 105.59 on Thursday, bringing the yen close to its weakest point since November. The pound fell to fresh multi-month lows following an inflation report on Wednesday, raising questions about whether the Bank of England will also hold rates.

Major stock futures in Asia experienced fluctuations in early afternoon trading. US stock futures, the S&P 500 e-minis, were down 0.3%. Similarly, the pan-region Euro Stoxx 50 futures, German DAX futures, and FTSE futures all declined by approximately 1%.

Investors are now closely watching monetary policy decisions from Indonesia, the Philippines, and Taiwan on Thursday, while the Bank of England’s decision will also provide guidance to Asian markets.

Oil prices fell in Asian trade following the largest decline in a month in the previous session. US crude dropped 0.72% to $89.01 a barrel, and Brent crude fell to $92.87 per barrel. 

Gold remained slightly lower, with spot gold trading at $1,927.96 an ounce.

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Asian Stocks Dip Amid Cautious Mood, Focus on Fed Rate Decision

Asian Stocks Dip Amid Cautious Mood, Focus on Fed Rate Decision

Asian stock markets faced a mild setback on Tuesday, marked by cautious sentiment among investors as they awaited the forthcoming Federal Reserve interest rate decision. This heightened sense of caution stems from growing concerns that the Federal Reserve’s commitment to maintaining higher interest rates for an extended period could potentially exert a negative impact on consumers in the United States.

As of the most recent market data, the Shanghai Composite Index in China managed a slight uptick of 0.02%, reaching a level of 3,126 points. Meanwhile, the Shenzhen Component Index experienced a 0.73% decline, settling at 10,126 points. Hong Kong’s Hang Seng Index recorded a meager 0.02% gain, bringing it to 17,933 points. Conversely, South Korea’s Kospi Index faced a 0.41% decline, and Japan’s Nikkei Index witnessed a more pronounced drop of 0.99%.

Despite some positive developments within China’s real estate sector, these developments failed to generate significant upward momentum in market sentiment on Tuesday. Notably, Country Garden secured bondholder approval for the last of eight local notes, for which it had sought an extension of repayment deadlines. Similarly, Sunac gained approval from its creditors for its debt restructuring plan.

In Japan, the Bank of Japan (BoJ) is poised to announce its interest rate policy later in the week, specifically on Friday. Market observers are closely monitoring signals from the BoJ, which appear to suggest a potential exit from its ultra-loose monetary policy sooner than initially anticipated. Recent remarks by Governor Kazuo Ueda have fueled speculation and contributed to a notable surge in interest rates.

Looking ahead, market participants are eagerly anticipating the Federal Reserve’s impending interest rate decision, scheduled for Wednesday at 18:00 GMT. Following this decision, Federal Reserve Chairman Jerome Powell will hold a press conference, during which he may offer insights into the central bank’s ‘dot plot’ projections and inflation expectations. As the week progresses, the financial community’s focus will shift toward the Bank of Japan’s monetary policy meeting, also slated for Friday.

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Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold (XAU/USD) dipped to a one-and-a-half-week low near $3,284 during the Asian trading session on Wednesday, weighed down by a stronger US Dollar and rising Treasury yields. Investors are increasingly convinced that recent US tariff hikes may fuel inflation, prompting the Federal Reserve to keep interest rates elevated for longer. 

The firmer Greenback, bolstered by expectations of prolonged Fed tightening and a robust June jobs report, has dulled the appeal of non-yielding assets like gold. Benchmark 10-year US bond yields also climbed, adding further pressure on the precious metal. 

Market participants remain cautious amid ongoing concerns about the economic fallout from Donald Trump’s aggressive tariff proposals. On Tuesday, the former US President threatened to impose duties of up to 50% on copper and 200% on foreign pharmaceuticals, unsettling global markets. However, gold’s traditional safe-haven demand has yet to see significant support in response. 

Traders are now eyeing the release of the FOMC meeting minutes later today, hoping for clues on the Fed’s rate path. Although a July rate cut appears off the table, markets are still pricing in up to 50 basis points of easing by year-end, likely beginning in October. 

Technically, a break below the $3,300 level, coupled with resistance at the 100-period SMA on the 4-hour chart, signals further downside. Momentum indicators suggest gold could slide towards the next support at $3,270, with a deeper drop towards $3,248–$3,247 not ruled out. 

On the upside, recovery attempts may face initial resistance near $3,310 and stronger barriers around $3,326 and $3,340. A decisive move above $3,360 could open the door to a short-term rebound toward the $3,400 mark. 

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Gold Price Climbs Steadily

Gold Price Climbs Steadily, Eyes Record High Amid Trade War Concerns

Gold (XAU/USD) extends its intraday rally, reaching the $2,880 region during the Asian session on Monday. The gains come in response to US President Donald Trump’s plan to impose new 25% tariffs on all steel and aluminum imports, reigniting fears of a global trade war and driving demand for the safe-haven precious metal. Additionally, concerns that Trump’s protectionist policies could fuel inflation further bolster gold’s appeal as a hedge against rising prices.

Gold Supported by Trade War Fears, But Fed Policy Remains a Concern

Despite strong upside momentum, gold’s gains may face limitations due to the resilient US Dollar (USD) and expectations that the Federal Reserve (Fed) might delay further rate cuts. The strong US employment data released on Friday, coupled with inflationary concerns, has reinforced speculation that the Fed will maintain a cautious stance.

Overbought conditions on the daily chart could also deter traders from initiating fresh bullish positions, especially in the absence of key US economic data early in the week.

Trump’s Tariff Announcement Sparks Market Uncertainty

On Sunday, Trump reaffirmed plans to impose 25% tariffs on all steel and aluminum imports into the US, adding that his administration would match tariff rates imposed by other countries. These announcements have further fueled uncertainty and strengthened gold’s safe-haven appeal.

Meanwhile, geopolitical tensions remain elevated. Russian Deputy Foreign Minister Galuzin stated there are no satisfactory proposals for Ukraine peace talks, dismissing Western statements as mere rhetoric. US Vice President JD Vance is reportedly heading to Germany this week to outline US policy proposals.

Fed Policymakers Express Caution Amid Economic Uncertainty

The latest US Nonfarm Payrolls (NFP) report showed 143K jobs were added in January, falling short of the 170K estimate but offset by an unexpected dip in the Unemployment Rate to 4.0%. While the report provides mixed signals, it has reinforced the belief that the Fed will remain cautious regarding further monetary easing.

Several Fed officials have weighed in on economic policy:

  • Minneapolis Fed President Neel Kashkari stated he would consider supporting further rate cuts if inflation data remains favorable and the labor market stays strong.
  • Chicago Fed President Austan Goolsbee noted that inconsistent US government policies create economic uncertainty, making it difficult to assess inflation trends.
  • Fed Governor Adriana Kugler acknowledged steady US economic growth but warned that progress toward the 2% inflation target remains uneven and slow.

What’s Next for Gold?

A stronger US Dollar could act as a headwind for gold prices, limiting aggressive bullish momentum. Traders will closely monitor Fed Chair Jerome Powell’s semi-annual congressional testimony and the upcoming US consumer inflation figures for further market direction.

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Gold Price Rally Holds Strong, But Overbought Conditions Raise Caution

Gold Price Bulls Hold Firm, But Overbought Conditions Suggest Caution

Gold (XAU/USD) continues its upward trajectory through the Asian session on Wednesday, reaching a fresh all-time high near $2,858. Concerns about the economic impact of US President Donald Trump’s trade tariffs continue to drive demand for the safe-haven metal. Furthermore, predictions that the Federal Reserve (Fed) would continue its easing cycle, backed by signs of deteriorating momentum in the US labor market, are fuelling demand for the non-yielding yellow metal.

 

Meanwhile, the US dollar (USD) remains under pressure near its weekly low, with rising expectations of further Fed policy easing, offering an extra lift to gold prices. However, Trump’s decision to suspend tariffs on Canada and Mexico has contributed to a risk-on mentality, which may restrict future gains for XAU/USD. Furthermore, gold is entering overbought territory on the daily chart, implying a short-term consolidation or minor retreat before the advance begins. Traders are now waiting for significant U.S. data releases, such as the ADP private-sector employment report and the ISM Services PMI, for new market signals.

Gold Bulls Retain Control Amid US-China Trade Tensions

Despite the positive risk tone, a further escalation in U.S.-China trade tensions continues to lend support to the upward momentum in gold. In response to President Trump’s latest tariffs, China has imposed targeted duties on US imports, and the threat of a trade war between the world’s two biggest economies has seen gold reach an all-time high on Wednesday.

On the macroeconomic front, the Job Openings and Labor Turnover Survey (JOLTS) released Tuesday revealed a decline in U.S. job openings, dropping to 7.6 million in December from a previous 8.09 million. The data signals a cooling labor market, increasing the likelihood of additional Fed rate cuts. This has kept USD bulls on the defensive and further strengthened XAU/USD.

Trump’s decision to postpone the application of a 25% tax on Canadian and Mexican imports by 30 days has revived hopes that a global trade war can be avoided. However, this has done little to undermine the positive enthusiasm toward gold.

Market players will be keenly monitoring Wednesday’s U.S. economic data, such as the ISM Services PMI and the ADP employment report, which may cause short-term changes in gold prices. However, Friday’s highly anticipated Nonfarm Payrolls (NFP) report continues to be the main focus. Furthermore, any fresh information about trade tariffs is probably going to cause financial markets to become more volatile.

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WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

West Texas Intermediate (WTI) crude oil prices fell from a one-week high on Tuesday, attracting sellers for the second straight session. The commodity trades at $72.00, barely above last week’s one-month low and close to the important 100-day Simple Moving Average (SMA) support. 

US Tariff Delay Weighs on Oil Prices

US President Donald Trump has announced a one-month suspension on newly imposed tariffs on imports from Canada and Mexico, easing worries about potential supply disruptions from two of the country’s main oil suppliers. This development put downward pressure on crude oil prices. Furthermore, fears of lower gasoline demand—driven by the larger economic impact of Trump’s trade policies—are contributing to gloomy sentiment in the oil market.

OPEC+ Stands Firm on Production Policy

Despite Trump’s calls for higher output to combat rising oil prices, the Organization of Petroleum Exporting Countries and its allies (OPEC+) have chosen to keep current production levels. This decision may give some support for crude oil prices, avoiding further losses in the near term.

Key Technical Levels to Watch

Traders will closely monitor the 100-day SMA, currently positioned near the $71.00 mark, which serves as a crucial support level. A decisive break below this threshold could trigger an extended pullback from the recent multi-month highs. Conversely, a bounce from this level may reinforce buying interest and help WTI recover from its recent slump.

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Gold Holds Below $2,800 Despite Intraday Recovery

Gold Price Trims Intraday Losses but Remains Below $2,800 Amid Stronger USD

The gold price (XAU/USD) recovers some of its losses following the strong Asian session sell-off but remains in negative territory, hovering around $2,785, down about 0.60% for the day. The recent rise in the US Dollar (USD), fueled by President Donald Trump’s decision to impose tariffs on Canada, Mexico, and China, has pushed the greenback closer to a two-year high, weighing on gold and dragging it away from its all-time high of $2,817, hit on Friday.

However, projections that the Federal Reserve (Fed) would lower interest rates twice by the end of 2025, combined with indications about probable economic disruptions from Trump’s trade policies, contribute to gold’s safe-haven appeal. The current risk-off mentality further shields the downside, so bearish traders should exercise caution ahead of this week’s key US macroeconomic data, which begins with today’s ISM Manufacturing PMI release.

Technical Outlook: Gold’s Uptrend Intact Despite Intraday Pullback

From a technical perspective, the intraday decline found support near the $2,772 resistance-turned-support level, which now serves as a pivotal point. A decisive break below this zone could trigger further selling pressure, exposing gold to the next key support levels:

 

  • $2,755 – Initial downside target
  • $2,740 – Intermediate support
  • $2,725-$2,720 – Strong demand zone
  • $2,700 – Psychological level, a break below which could accelerate losses

Conversely, immediate resistance is seen in the $2,790-$2,800 region, followed by the record high of $2,817. Notably, momentum indicators on the daily chart remain comfortably positive, indicating that gold has not yet reached overbought levels. This provides room for additional upward momentum, confirming the broader bullish trend that began with the December swing bottom.

If gold manages to sustain a move above $2,817, it could pave the way for fresh record highs, with bulls eyeing further gains amid ongoing market uncertainty.

Market Drivers to Watch

US Dollar Strength: The impact of Trump’s tariffs on global trade could continue supporting the USD, potentially weighing on gold.

Federal Reserve Policy: Expectations of rate cuts in 2025 remain a crucial factor for gold’s long-term trajectory.

US Economic Data: The upcoming ISM Manufacturing PMI and Nonfarm Payrolls (NFP) report later this week could trigger volatility in gold prices.

Risk Sentiment: Any escalation in geopolitical or economic tensions could further boost gold’s safe-haven demand.

Overall, while gold has retreated from its highs, the larger bullish trend remains intact, with technical signals suggesting further upward movement as long as critical support levels hold.

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WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

West Texas Intermediate (WTI) crude oil prices edge lower during Wednesday’s Asian session, erasing part of the previous day’s modest recovery from a nearly three-week low. The commodity trades near $71.00, down over 0.25% for the day, and remains vulnerable to further losses amid prevailing bearish sentiment.

Investor concerns persist over US President Donald Trump’s threat to impose trade tariffs on Canada, China, and Mexico by February 1, which could weigh on global fuel demand. Additionally, weak Chinese economic data adds to downward pressure. Official PMIs released on Monday highlighted continued weakness in the world’s second-largest economy and top crude importer, raising concerns over lower consumption.

Further pressure on oil prices comes from Trump’s energy policies, which include plans to ramp up US energy production and calls for the Organization of Petroleum Exporting Countries (OPEC) to increase output to drive prices lower.

With bearish fundamentals dominating, WTI remains susceptible to further downside risks in the near term.

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WTI Drops Toward

WTI Drops Toward $74.00 as Trump Pressures OPEC to Lower Oil Prices

West Texas Intermediate (WTI), the US crude oil benchmark, trades near $74.10 on Friday, continuing its downward trend after US President Donald Trump urged Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil prices.

Uncertainty surrounding Trump’s proposed tariffs and energy policies adds to the pressure on WTI. Speaking at the World Economic Forum in Davos on Thursday, Trump announced plans to request Saudi Arabia and OPEC to lower oil prices, saying, “I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil.”

Expectations of increased US production under Trump’s administration further weigh on oil prices. Earlier this week, Trump declared a national energy emergency, leveraging his authority to expedite the approval of oil, gas, and electricity projects that would typically require years of permitting.

Meanwhile, US crude inventories declined for the ninth consecutive week. The US Energy Information Administration (EIA) reported a drop of 1.017 million barrels in crude oil stockpiles for the week ending January 17, following a 1.962 million-barrel decline in the prior week. Market expectations had forecast a larger decrease of 2.1 million barrels.

Oil traders will closely monitor developments surrounding Trump’s energy policies and tariff announcements. Additionally, attention will shift to the preliminary US S&P Global Purchasing Managers Index (PMI) for January, set for release later on Friday. A weaker-than-expected reading could pressure the US Dollar (USD), potentially offering some support to the USD-denominated WTI price.

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GBP/USD Consolidates Around

GBP/USD Consolidates Around Mid-1.3000s, Vulnerable Amid Strong USD

GBP/USD Consolidates Around Mid-1.3000s, Vulnerable Amid Strong USD

The GBP/USD pair struggles to maintain modest recovery gains from the past two days, trading within a narrow range around 1.3050-1.3045 during Monday’s Asian session. Spot prices remain close to last Thursday’s one-month low, signaling potential vulnerability for continued declines from the 1.3435 area, which marked the highest level since March 2022.

The recent drop in the UK’s Consumer Price Index (CPI) to its lowest point since April 2021, below the Bank of England’s (BoE) 2% target, has fueled expectations of a 25 basis point (bps) rate cut in the BoE’s upcoming November 7 meeting. Additionally, money markets are pricing in the possibility of another rate cut in December, which could further weigh on the British Pound (GBP). Combined with ongoing bullish sentiment for the US Dollar (USD), this supports a negative outlook for GBP/USD.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, starts the week on a positive note, stalling its recent pullback from last week’s highest level since early August. Market confidence that the Federal Reserve (Fed) will implement modest rate cuts next year keeps US Treasury yields elevated, providing additional support for the dollar. Geopolitical risks also add to the USD’s safe-haven appeal.

With no significant economic data releases from the UK or US, the current fundamental backdrop suggests that GBP/USD’s downside risk remains the dominant trend. Any intraday upticks may be viewed as selling opportunities. However, bearish traders might wait for the pair to break below the 1.3000 psychological level before placing new bets, targeting support near the 100-day Simple Moving Average (SMA) around the 1.2960 region.

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EUR/USD Extends Losses Following ECB Rate Cut Decision

EUR/USD Extends Losses After ECB Rate Cut

EUR/USD Extends Losses After ECB Rate Cut

The EUR/USD pair continues to decline following the European Central Bank’s (ECB) decision to cut rates by 25 basis points on Thursday. With a lack of bullish momentum, the pair is now down more than 3.5% from late September’s peak above 1.1200, as it extends near-term losses.

The ECB’s rate cut, which was in line with market expectations, lowered the Deposit Facility Rate to 3.25% and the Main Refinancing Operations Rate to 3.4%. Adding further pressure on the Euro, Europe’s Harmonized Index of Consumer Prices (HICP) for the year ending in September dropped more than anticipated, coming in at 1.7% YoY compared to the forecasted 1.8%.

The upcoming EU Leadership Summit on Friday is the last key event on the EU economic calendar. However, it is unlikely to instill confidence in the Euro, as European policymakers continue to face a challenging economic environment, with fears of a deeper slowdown despite reassurances to the contrary.

In contrast, US economic data continues to outperform. September’s Retail Sales grew by 0.4% month-over-month, exceeding forecasts of 0.3% and rebounding from August’s 0.1% rise. Excluding automotive sales, Retail Sales increased by 0.5%, beating expectations of 0.1%. Additionally, US Initial Jobless Claims for the week ending October 11 came in at 241K, lower than the expected 260K, further supporting the US Dollar.

EUR/USD Price Outlook

The EUR/USD is under considerable bearish pressure, having dropped below both the 50-day Exponential Moving Average (EMA) at 1.0996 and the 200-day EMA at 1.0904, indicating a clear shift in market sentiment. The pair is currently trading near 1.0828, approaching multi-week lows as downside momentum builds. A break below the 1.0800 support level could trigger further declines, with the next key support at 1.0750.

The Moving Average Convergence Divergence (MACD) indicator remains deep in negative territory, showing no signs of reversal. The MACD and signal lines continue to diverge, and the expanding negative histogram points to accelerating bearish momentum. Should the pair fail to hold the 1.0800 level, further losses toward 1.0750 and potentially 1.0700 could follow. Conversely, a recovery above 1.0900, aligning with the 200-day EMA, is needed to reduce bearish pressure and offer some relief to bulls.

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EUR/USD Hits 10-Week Low Ahead of ECB Policy Announcement

EUR/USD Hits 10-Week Low Ahead of ECB Policy Announcement

EUR/USD Hits 10-Week Low Ahead of ECB Policy Announcement

EUR/USD continues to show weakness, trading near 1.0850 on Thursday as the currency pair faces significant selling pressure ahead of the European Central Bank’s (ECB) interest rate decision, expected at 12:15 GMT.

According to a Tuesday note from Citi, traders anticipate the ECB will reduce its Deposit Facility Rate by a total of 49 basis points (bps) across its remaining two meetings this year. This implies two 25 bps cuts, one on Thursday and another in December.

A quarter-point rate cut on Thursday would mark the second consecutive reduction, lowering the deposit rate to 3.25%. A dovish decision is widely expected, as the Eurozone faces an economic slowdown and inflationary pressures seem under control.

With strong expectations for another rate cut, investors will closely analyze the ECB’s monetary policy statement and President Christine Lagarde’s press conference for further insights into possible December actions.

Lagarde is expected to focus on strategies to revive economic growth. The Eurozone’s Harmonized Index of Consumer Prices (HICP) fell to 1.7% in September, below both expectations and the preliminary estimate of 1.8%, according to revised figures. Additionally, Germany’s latest economic projections suggest the country will end the year with a 0.2% contraction in output.

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EUR/USD stays below 1.0900; further decline

EUR/USD stays below 1.0900; further decline likely as ECB decision approaches

EUR/USD stays below 1.0900; further decline likely as ECB decision approaches

EUR/USD remains under pressure, trading near 1.0890 during the Asian session on Wednesday after a four-day losing streak. The Euro could face additional downside as the European Central Bank (ECB) is widely expected to announce a 25 basis point cut in both the Main Refinancing Rate and the Deposit Facility Rate during Thursday’s policy meeting.

Ahead of the ECB decision, traders will closely monitor the Eurozone’s Harmonized Index of Consumer Prices (HICP) data, which is set to be released on Thursday. This data could provide critical signals about inflationary trends in the region.

Key events following the ECB meeting will include the release of the Monetary Policy Statement and President Christine Lagarde’s press conference, where insights into the ECB’s future policy direction are expected.

Meanwhile, the US Dollar Index (DXY), which measures the dollar against six major currencies, continues to hover near a two-month high of 103.35, reached on Monday. Strong jobs and inflation data from the US have dampened expectations of aggressive Federal Reserve rate cuts in 2024.

Current market projections suggest a total of 125 basis points in Fed rate cuts over the next year. According to the CME FedWatch Tool, there is a 94.1% probability of a 25-basis-point cut in November, with no significant likelihood of a larger 50-basis-point move.

On Tuesday, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, noted that he expects just one more rate cut of 25 basis points this year, reflecting his projections from last month’s Fed meeting. “The median forecast indicated 50 basis points in cuts, in addition to the 50 basis points already delivered in September,” according to Reuters.

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EUR/USD Holds Below 1.0900 Amid Strong USD

EUR/USD Holds Below 1.0900, Lowest Since August 8, as USD Strengthens

EUR/USD Holds Below 1.0900, Lowest Since August 8, as USD Strengthens

The EUR/USD pair continues its downward slide for the second consecutive day on Tuesday, dipping to the 1.0890 region in the last hour, inching closer to its lowest point since August 8, touched the previous day. However, bearish traders remain cautious, waiting for a decisive break below the 200-day Simple Moving Average (SMA) before making fresh moves ahead of significant central bank developments.

The European Central Bank (ECB) is set to announce its policy decision on Thursday, with expectations of a third rate cut in this easing cycle due to growing concerns over sluggish economic growth. Additionally, Eurozone inflation has dropped below the ECB’s 2% target for the first time since 2021, further supporting the case for policy easing. This weakens the euro, while a stronger US Dollar (USD) further weighs on the EUR/USD pair.

The USD Index (DXY), which tracks the dollar against a basket of major currencies, remains strong near a two-month high amid rising expectations of a less aggressive rate-cutting approach by the Federal Reserve (Fed). Markets have now ruled out the likelihood of another large Fed rate cut in November, keeping US Treasury yields elevated. Geopolitical risks also add to the safe-haven appeal of the USD, potentially fueling further downside pressure on the EUR/USD pair.

Market participants now focus on Tuesday’s key data releases, including the German ZEW Economic Sentiment Index and Eurozone Industrial Production figures. Later in the North American session, the Empire State Manufacturing Index and speeches from key Federal Open Market Committee (FOMC) members will influence USD demand, offering short-term direction for the EUR/USD pair.

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EUR/USD Dips Below 1.0950 Amid Stronger US Dollar

EUR/USD Dips Below 1.0950 Amid Stronger US Dollar

EUR/USD Dips Below 1.0950 Amid Stronger US Dollar

The EUR/USD pair continued its decline, dropping to around 1.0920 during early trading in Asia on Monday. This downward movement is driven by risk aversion, fueled by escalating geopolitical tensions in the Middle East and rising conflicts between China and Taiwan, which are pressuring riskier currencies like the Euro (EUR).

On Monday, a spokesperson from the US Department of State expressed “serious concern” over the Chinese People’s Liberation Army (PLA) military drills in the Taiwan Strait and around Taiwan. They noted that the US will closely monitor these activities and collaborate with allies regarding shared concerns. Any further escalation could increase demand for safe-haven assets like the US Dollar (USD), adding pressure on the EUR/USD pair.

Meanwhile, traders are anticipating a 25 basis point (bps) interest rate cut from the Federal Reserve (Fed) in November, following the release of Friday’s US Producer Price Index (PPI) data. The CME FedWatch Tool now shows an 86.8% likelihood of this rate cut, up from 83.3% before the PPI report.

In Europe, the Euro is also under pressure as the European Central Bank (ECB) is expected to implement further rate cuts in the remaining monetary policy meetings this year. The ECB’s dovish approach is driven by faster-than-expected declines in Eurozone inflation and a fragile economic recovery.

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EUR/USD Struggles Below 1.0950 Ahead of Key German Inflation Data

EUR/USD Struggles Below 1.0950 Ahead of Key German Inflation Data

EUR/USD Struggles Below 1.0950 Ahead of Key German Inflation Data

The EUR/USD pair continues to trade defensively around 1.0935 during early European hours on Friday. A stronger-than-expected U.S. inflation reading on Thursday has bolstered the U.S. dollar, limiting the pair’s ability to move higher.

The U.S. Consumer Price Index (CPI) came in hotter than anticipated, along with a robust September jobs report. This combination strengthens the view that any future rate cuts by the Federal Reserve (Fed) will be gradual. Following the CPI release, the CME FedWatch Tool showed an 83.3% probability that the Fed will lower interest rates by 25 basis points (bps) in November.

Looking ahead, traders will focus on the U.S. Producer Price Index (PPI) for September and the preliminary Michigan Consumer Sentiment Index for October, both due on Friday. The headline PPI is forecast to rise by 1.6% year-over-year (YoY) for September, while core PPI is expected to increase by 2.7%. If the PPI data comes in softer than expected, the U.S. dollar could weaken against the euro.

In Europe, expectations are building that the European Central Bank (ECB) will cut rates to address the region’s economic slowdown, which may weigh further on the euro. The ECB is expected to lower its key rates twice this year, with a 3.5% deposit rate cut anticipated next week. According to a Reuters poll, over 90% of economists expect a rate cut next week, with another likely to follow in December.

Additionally, Germany’s Harmonized Index of Consumer Prices (HICP) inflation data, expected to remain steady at 1.8% YoY for September, will be released later on Friday.

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USD/JPY Holds Steady Near 147.00 as Yen Weakens on Trade Tensions and BoJ Rate Outlook

USD/JPY Holds Steady Near 147.00 as Yen Weakens on Trade Tensions and BoJ Rate Outlook

The Japanese Yen (JPY) continues to trade with a bearish bias on Wednesday, keeping the USD/JPY pair firm around the 147.00 mark during the Asian session. A stronger US Dollar and persistent concerns over rising trade tensions are weighing heavily on the Yen, as markets brace for the impact of US tariffs on Japanese goods starting August 1. 

Former US President Donald Trump’s announcement of a 25% tariff on Japanese imports, coupled with the threat of retaliatory action, has sparked renewed fears over Japan’s economic resilience. The country’s Q1 GDP contracted, real wages in May dropped at their steepest pace in nearly two years, and political uncertainty is rising ahead of the July 20 House of Councillors election. Recent polls suggest the ruling LDP-Komeito coalition may struggle to retain its majority, further dampening investor confidence. 

These developments have led traders to scale back expectations of a rate hike by the Bank of Japan this year. The combination of domestic headwinds and external pressure is weakening the JPY, while the US Dollar continues to gain on expectations that rising tariffs will stoke inflation and prompt the Federal Reserve to maintain a hawkish stance. 

The Fed’s June decision to hold interest rates steady, along with a strong US jobs report, has reinforced the belief that rate cuts may be delayed until at least October. The FOMC meeting minutes, due later today, will be closely watched for insights into the Fed’s policy trajectory. Markets currently anticipate up to 50 basis points in rate cuts by year-end. 

Technical Outlook: Bullish Momentum Builds 

Technically, USD/JPY’s break and close above the 100-day Simple Moving Average (SMA) — for the first time since February — signals potential for further gains. Positive momentum on the daily chart supports a move toward the 147.60–147.65 resistance area, with the 148.00 handle, a key June high, in sight. 

On the downside, immediate support lies near 146.50, with the 100-day SMA just below 146.00 acting as a critical pivot. A decisive break below this level could shift momentum in favor of bears, opening room for deeper losses. 

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NZD/USD gains ground to near 0.5700 on weaker US PMI data

During the early Asian session on Thursday, the NZD/USD pair was trading slightly higher at 0.5690. The Greenback falls against the New Zealand Dollar (NZD) as US economic data disappoints. Investors will keenly monitor developments in the rekindled trade battle between the United States and China, the world’s two largest economies. 

The weaker US Services Purchasing Manager Index (PMI) could weigh on the Greenback and generate a tailwind for the pair. The US ISM Services PMI fell to 52.8 in January from 54.0 (revised from 54.1) in December. This reading came in below the market consensus of 54.3.

On the other hand, New Zealand’s fourth-quarter employment report will put the RBNZ on pace to decrease the Official Cash Rate (OCR) by 50 basis points (bps) to 3.75% this month. Statistics New Zealand said on Wednesday that the country’s unemployment rate increased to 5.1% in Q4, up from 4.8% the previous quarter. This result was a four-year high and exceeded the 25-year average of 4.8%. Rising expectations that the Reserve Bank of New Zealand (RBNZ) may decrease interest rates may further impact on the New Zealand Dollar (NZD).

“In line with RBNZ guidance, markets continue to imply another 50bps rate cut to 3.75% at the February 19 meeting and the policy rate to through around 3.00% over the next 12 months. Bottom line: NZ-US 2-year bond yield spreads can further weigh on NZD/USD,” noted Société Générale’s FX analysts. 

On Tuesday, the finance ministry in China unveiled a package of tariffs on various US products such as crude oil, farm equipment, and some autos in a sharp response to an announcement made by US President Donald Trump imposing a 10% tariff on Chinese imports. Further, China served notice to several companies including Google for potential sanctions in response to Trump’s tariffs. Any sign of uncertainty or a rising trade war tension may see the China-proxy Kiwi being dragged lower, as China remains one of the major trading partners to New Zealand.

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JPY Recovers Losses vs. USD, Bullish Outlook Intact

Japanese Yen Recovers Some Losses Against USD; Bullish Outlook Remains Intact

The Japanese yen (JPY) cut some of its intraday losses against the US dollar (USD) on Monday, bringing the USD/JPY pair back below the mid-155.00s during the early European session. The Bank of Japan’s (BoJ) Summary of Opinions showed conversations about the possibility of further hikes in interest rates. Furthermore, Tokyo’s core inflation increased at the quickest annual rate in nearly a year, raising expectations of further policy tightening by the BoJ, which supports the JPY.

Beyond monetary policy, narrowing interest rate differentials between Japan and other major economies, including the US, alongside a broader risk-off sentiment, provide additional support to the safe-haven JPY. However, concerns over the economic impact of US President Donald Trump’s newly announced trade tariffs limit the yen’s upside. Meanwhile, the USD remains broadly strong, allowing the USD/JPY pair to maintain its positive momentum for a second consecutive day, ahead of the upcoming US ISM Manufacturing PMI report.

Yen Gains Traction Amid BoJ Rate Hike Bets and Trade War Fears

US President Donald Trump signed an executive order on Saturday to impose 25% tariffs on imports from Canada and Mexico and 10% tariffs on Chinese goods, effective Tuesday.

Canada’s Prime Minister Justin Trudeau, Mexico’s President Claudia Sheinbaum, and China’s foreign ministry all replied quickly, indicating probable retaliation. The US Dollar continues to climb, approaching a two-year high last hit in January, supporting the USD/JPY pair’s upward trend.

The Bank of Japan’s latest Summary of Opinions, released on Monday, showed that policymakers are thinking about additional rate hikes, though this has failed to appreciably lift the JPY.

Board members of the Bank of Japan stressed the need of continuing to raise interest rates if economic conditions and inflation remain stable.

Japan’s Finance Minister Katsunobu Kato stated that the government is closely monitoring the impact of Trump’s tariffs on the yen amid concerns over potential economic fallout.

Economy Minister Ryosei Akazawa reiterated Japan’s commitment to achieving the BoJ’s 2% inflation target while implementing measures to offset rising living costs.

The US-Japan yield spread remains near a multi-week low, which, coupled with risk aversion, could help stabilize the yen in the near term.

Investors now turn their focus to key US economic data, starting with today’s ISM Manufacturing PMI, followed by the highly anticipated Nonfarm Payrolls (NFP) report on Friday.

USD/JPY Faces Resistance Near 156.25; Bears in Control Below This Level

From a technical standpoint, last week’s strong rebound from the 50% Fibonacci retracement level of the December-January rally and the subsequent upside move favor bullish traders. However, additional gains beyond 156.00 may encounter resistance near last week’s swing high at 156.25. A sustained break above this level could spark a short-covering rally, pushing the pair towards:

  • 156.70-156.75 resistance
  • 157.00 psychological mark
  • 157.60 horizontal barrier
  • Potential extension towards 158.00, with an ultimate target at the 158.85-158.90 multi-month high from January 10

Conversely, on the downside:-

  • 155.00 serves as immediate support
  • Below this, watch for key levels at 154.55-154.50 and 154.00
  • A break below the 153.70 January low could accelerate the decline towards 153.30 and eventually 153.00

While the JPY is exhibiting some resilience, the overall trend remains unpredictable, with market participants intently watching economic indicators and geopolitical developments.

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Australian Dollar Drops as RBA Rate Cut Bets Rise, Fed Decision Looms

Australian Dollar Slides Amid Rising Odds of RBA Rate Cuts, Fed Decision in Focus

The Australian Dollar (AUD) extends its losing streak for a third consecutive session against the US Dollar (USD), weighed down by softer-than-expected inflation data from Australia.

Australia’s Consumer Price Index (CPI) rose by 0.2% quarter-on-quarter in Q4 2024, matching the previous quarter but missing the expected 0.3%. On an annual basis, CPI eased to 2.4% from 2.8% in Q3, below the market forecast of 2.5%. Despite December’s monthly CPI ticking up to 2.5% YoY, inflation remains within the Reserve Bank of Australia’s (RBA) 2%-3% target range. Meanwhile, the RBA’s Trimmed Mean CPI slowed to 3.2% YoY, its weakest pace in three years, slightly under the anticipated 3.3%.

Australian Treasurer Jim Chalmers expressed confidence that “the worst of the inflation challenge is behind us” and that a “soft landing” is increasingly likely. The cooling inflation strengthens the case for an RBA rate cut in February. The central bank has held the Official Cash Rate (OCR) steady at 4.35% since November 2023, emphasizing the need for inflation to “sustainably” return to target before considering a rate reduction.

AUD Pressured by Risk Aversion, Trump’s Tariff Threats

The AUD faces additional headwinds from risk-off sentiment following tariff threats by former US President Donald Trump. On Monday, Trump announced plans to impose tariffs on imports of key commodities, including computer chips, pharmaceuticals, steel, aluminum, and copper, aiming to boost US manufacturing.

Meanwhile, the US Dollar Index (DXY) holds firm around 108.00 as traders turn their attention to the upcoming Federal Reserve (Fed) interest rate decision. Market expectations, per the CME FedWatch tool, indicate near-certainty that the Fed will maintain its policy rate at 4.25%-4.50%. Investors will closely watch Fed Chair Jerome Powell’s press conference for guidance on future policy shifts.

Concerns over the potential inflationary impact of Trump’s trade policies add another layer of uncertainty. US Bank chief economist Beth Ann Bovino noted, “A number of White House proposals appear inflationary, which could keep the Fed in check.” Additionally, Treasury Secretary Scott Bessent has proposed universal tariffs on US imports starting at 2.5%, with Trump reportedly favoring even higher rates.

China’s Economic Slowdown Adds Pressure on AUD

The Australian Dollar remains vulnerable to China’s economic struggles. China’s NBS Manufacturing PMI dropped to 49.1 in January from 50.1, missing expectations, while the Non-Manufacturing PMI slipped to 50.2 from 52.2. As Australia’s largest trading partner, China’s weak data weighs heavily on the AUD.

Despite China’s recent stimulus measures, including a $7.25 billion investment in index products and long-term stock investments, concerns persist. Industrial profits fell 3.3% YoY in 2024, marking a third consecutive year of contraction, driven by weak demand, deflationary pressures, and a prolonged property sector slump.

Technical Outlook: AUD/USD Turns Bearish Below 0.6250

The AUD/USD pair trades near 0.6230 on Wednesday after breaking below the ascending channel on the daily chart, signaling a shift toward a bearish bias. The 14-day Relative Strength Index (RSI) has dropped below 50, reinforcing downside momentum.

A decisive break below key support at the lower boundary of the ascending channel strengthens the bearish outlook, potentially pushing AUD/USD toward 0.6131—its lowest level since April 2020. On the upside, immediate resistance lies at the nine-day Exponential Moving Average (EMA) at 0.6256. A rebound above this level could reintroduce a bullish bias, with the next upside target near 0.6360.

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US Dollar Surges as Trump Revives Tariff Threats

US Dollar Surges as Trump Revives Tariff Threats

The US dollar strengthened significantly against all major currencies after President Donald Trump and his Treasury Secretary reignited concerns about potential tariffs, raising fears that trade policies may return to the forefront. Risk-sensitive currencies, particularly those tied to China, saw sharp declines, while the euro weakened amid speculation that the European Union could soon face tariff pressures. Simultaneously, the Japanese yen took a hit as traders hedged against potential US inflation spikes and rising Treasury yields.

This market turbulence followed a Financial Times report indicating that Scott Bessent, the newly appointed Treasury Department official, supports a phased approach to implementing universal tariffs on US imports. The initial proposal suggests starting with a 2.5% tariff rate. However, President Trump hinted at a much broader scope, potentially targeting a range of imports from steel to semiconductor chips and suggesting higher tariff rates over time.

The administration’s “moderate” proposal involves a gradual increase in tariffs, reaching 20% over eight months in increments of 2.5% per month. This timeline has triggered speculation about more extreme scenarios and raised questions about the global trade concessions needed to halt these measures. Bessent’s approach, which allows businesses time to adjust, could also spark a rush of imports and exports to avoid higher future costs.

Amid these developments, financial markets are grappling with the potential outcomes. Traders are assessing whether the proposed tariff measures are fully priced in and evaluating the likelihood of de-escalation through negotiation.

On the positive side, any concessions or agreements that delay or reduce tariffs could stabilize markets. However, the risks of escalating tariffs, particularly if negotiations fail, remain a significant concern. Higher tariffs could disrupt global trade and have far-reaching implications for currency valuations.

While we initially favored long positions on the dollar, the unfolding tariff narrative has introduced significant uncertainty. Staying prepared for sudden shifts in policy and market dynamics is now crucial as the situation continues to evolve.

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Australian Dollar Weakens Amid Concerns Over Trump’s Trade Policies and Mixed Chinese Data

Australian Dollar Weakens Amid Concerns Over Trump’s Trade Policies and Mixed Chinese Data

The Australian Dollar (AUD) ended its three-day winning streak against the US Dollar (USD) on Monday, with the AUD/USD pair trading flat following the release of mixed Chinese Purchasing Managers’ Index (PMI) data. As a close trade partner, Australia’s economy is heavily influenced by China’s economic performance.

China’s National Bureau of Statistics (NBS) reported that the Manufacturing PMI fell to 49.1 in January, down from 50.1 in December, missing market expectations. Similarly, the Non-Manufacturing PMI dropped to 50.2 from the previous month’s 52.2. These weaker-than-expected figures suggest a slowdown in China’s economic recovery, weighing on the risk-sensitive Australian Dollar.

Despite fresh stimulus measures from China aimed at revitalizing its equity markets, the AUD struggled to gain momentum. The China Securities Regulatory Commission (CSRC) announced a second round of long-term stock investment pilot programs valued at 52 billion Yuan ($7.25 billion). However, these measures have done little to alleviate investor concerns about China’s economic challenges.

Risk Aversion Rises Amid Trump’s Trade Tariff Push

Broader market sentiment took a hit as reports emerged that US President Donald Trump’s advisers are pushing to impose 25% tariffs on Mexico and Canada as early as February 1, bypassing negotiations. According to the Wall Street Journal, Trump’s willingness to move swiftly on tariffs follows similar actions taken against Colombia, raising fears of escalating trade tensions and dampening demand for riskier assets like the Australian Dollar.

Adding to the negative outlook, China’s Industrial Profits declined by 3.3% year-over-year in 2024 to CNY 7,431.05 billion, marking the third consecutive year of contraction. This downturn highlights ongoing economic headwinds, including weak demand, rising deflationary pressures, and a prolonged slump in the property sector.

Technical Analysis: AUD/USD Eyes Key Resistance Amid Bullish Setup

The AUD/USD pair is trading near 0.6290 on Monday, showing signs of upward momentum within an ascending channel on the daily chart, indicating a potential bullish bias. The 14-day Relative Strength Index (RSI) remains slightly above 50, reflecting mild optimism in the market.

On the upside, the pair could retest the psychological resistance level at 0.6300, with the next target near the channel’s upper boundary around 0.6350.

Support levels are found at the nine-day Exponential Moving Average (EMA) of 0.6265, followed by the 14-day EMA at 0.6254. A stronger support lies near the channel’s lower boundary around 0.6240, which could act as a safety net in case of a downside correction.

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NZD/USD Struggles

NZD/USD Struggles Below 0.5700 Amid Trump’s Tariff Plans and Dovish RBNZ Expectations

The NZD/USD pair remains under pressure, trading near 0.5675 during the early Asian session on Friday. The New Zealand Dollar (NZD) faces headwinds due to uncertainty surrounding US President Donald Trump’s proposed tariffs on China and the dovish outlook of the Reserve Bank of New Zealand (RBNZ).

New Zealand’s Consumer Price Index (CPI) for the fourth quarter of 2024 indicated a continued decline in underlying inflation, strengthening expectations of additional rate cuts by the RBNZ. Swap markets now estimate a nearly 90% chance of a 50-basis-point (bps) rate cut on February 19, building on the two cuts already implemented in this cycle. The RBNZ is projected to deliver a total of 100 bps in rate cuts through the remainder of 2025.

Meanwhile, the downside for the pair could be capped by recent comments from Trump. Speaking at the World Economic Forum in Davos on Thursday, Trump called for immediate interest rate cuts by the US Federal Reserve (Fed). “With oil prices going down, I’ll demand that interest rates drop immediately, and likewise, they should be dropping all over the world,” Trump said.

Investors are now closely watching for further details on Trump’s tariff policies, alongside key US economic data releases. The flash US S&P Global Manufacturing and Services PMI for January will be a key focus later on Friday, along with the release of US Existing Home Sales and the Michigan Consumer Sentiment Index.

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US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

The dollar strengthened on Tuesday, driven by rising U.S. yields, putting pressure on low-yielding currencies like China’s yuan and Japan’s yen, which fell to its lowest level since 1986.

Benchmark 10-year Treasury yields increased nearly 14 basis points to 4.479% overnight. Analysts attributed this rise to expectations of Donald Trump winning the U.S. presidency, which could lead to higher tariffs and increased government borrowing.

As the dollar gained, the euro reversed part of a small rally following the first round of France’s election, which aligned with polling predictions. The euro last traded at $1.0735.

The yen dropped to 161.72 per dollar on Monday, its weakest in nearly 38 years, primarily due to the significant interest rate gap between the U.S. and Japan. On Tuesday, the yen traded at 161.55 per dollar in Asia and was under pressure from yen bears wary of potential intervention by Japanese authorities. The yen also hit a lifetime low of 173.67 against the euro on Monday and remained near that level on Tuesday.

In the bond market, the 10-year yield gap between U.S. and Japanese rates stood at 340 basis points, and nearly 440 basis points at the two-year tenor. China’s yuan, which reached a seven-month low against the dollar last week, faced similar pressure, with U.S. 10-year yields more than 220 basis points higher than Chinese government bond yields.

Robust manufacturing data in China and an announcement from the central bank about borrowing bonds, likely to sell them and stabilize falling yields, provided only a brief boost to the currency on Monday. The yuan last traded at 7.3043 in offshore markets on Tuesday, close to its June low.

The New Zealand dollar slipped 0.3% in early trade and was testing support at its 200-day moving average at $0.6075. The British pound remained steady at $1.2641. The Australian dollar hovered within its recent range at $0.6650, with traders focused on central bank minutes to gauge the likelihood of future interest rate hikes. Swaps market pricing suggests a one-in-three chance of a rate hike as soon as next month.

The question remains about the trigger for such a move. ING economist Rob Carnell noted that discussions have taken place, but the specific trigger for a hike is still uncertain. There is a leaning towards forecasting a hike at the August meeting.

Overall, the strengthening dollar and rising U.S. yields continue to exert pressure on low-yielding currencies, with markets closely watching upcoming central bank decisions and geopolitical developments.

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Cryptocurrency Move Back to Support the Pack to Level

If we have a look at the bearish start to the day in the majors and the Bitcoin move back to the level by $18,500 to the support pack. The Bitcoin to USD was seemed down at the level by 1.16% on this Thursday that reversing a 1.25% gain to the Wednesday to the ended the day at the level $18,260.0. At the start of the day, the Bitcoin rose to the early morning intraday to the high at the level before hitting the reverse level.

The major resistance level goes at the level by $18,878 and the Bitcoin fell to the intraday low to the level by $17,935.0.

The close term bullish pattern stayed flawless, disregarding the most recent pullback to sub-$18,000 levels. For the bears, Bitcoin would have to slide through the 62% FIB of $10,095 to shape a close term bearish pattern.

The Bitcoin was somewhere near at the level by 1.03% to $18,072.0. A blended beginning to the day saw Bitcoin ascend to an early morning high of $18,299.0 prior to tumbling to a low of $18,070.0.

Bitcoin left the significant help and obstruction levels untested from the get-go.

Somewhere else, it was a bearish beginning to the day for the majors. The Ripple’s XRP was somewhere around at the level 2.69% to lead the route down.

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Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

The Bitcoin seems to the low at the level of $9,813 in September that managed the bitcoin to reach at the level high at $13,868. The bitcoin price is rejected to the sequential indicators on the 3-day chart.

If we have a look at the current candlestick of the 3-day chart it will seem significantly bearish and the TD sequential indicators are presented a sell signal. The 50- SMA seems down at the level of $10,600 and the 100 SMA at the level of $9,47.

The In/Out of the Money Around Price chart shows the closest and most grounded help region to be somewhere in the range of the level at $12,687 and $13,073 with near 624,000 BTC in volume. A break below this point can drive the cost of Bitcoin down to $11,914.

Despite the fact that bears appear to have assumed responsibility for the present moment, the powerful day by day upswing stays unblemished for Bitcoin. The 50-SMA and the 100-SMA harmonize around $11,200 which will go about as a critical help level. The MACD keeps bullish and the most basic obstruction level is still at $13,863. A breakout over this point can without much of a range drive the lead digital currency towards the untouched high at the level of $20,000.

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Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price of the bulls has been the full control of the market to the price at the level of $11,340 to $12,835. The cryptocurrency had the largest to the single day that put the gain. The MACD shows the increasing the bullish momentum to price the growth anticipated.

The position detector is a convenient little apparatus that causes us to imagine solid opposition and backing levels. According to the everyday conjunction detector, there is an absence of solid obstruction levels on the potential gain. This should be empowering news for the buyers as they plan to bring BTC into the $13,000-zone.

Santiment’s holder’s distribution charts show you the number of addresses having a place with a specific symbolic section. According to the chart, the number of addresses holding 10,000-100,000 tokens tumbled from 111 on October 8 to 104 on October 20. This is an intensely bearish sign as it shows that the whales are selling off their property.

Bitcoin buyers have the opportunity to bring the cost into the level at $13,000 and even the $14,000 interference. The everyday intersection finder shows a total absence of solid opposition barriers straightforward.

For the bears, the drawback is covered off at the $12,000-$12,100 uphold divider. A break below that zone will bring the value down to $11,000, which has both the 50-day and 100-day SMA

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Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

The BTC/USD traded at the level of $11,355 after the mild rejection of the top-level $11,720 that losing some of the bullish.

Ethereum USD had a similar fate at the higher risk that seeing the longer pullback than the Bitcoin. If we talk about the XRP/USD is the clear loser after breaking below the 50 SMA and the 100 SMA on the daily chart that currently trading at the level of $0.2482 after yet facing another rejection.

Bitcoin, BTC to USD, fell by 1.02% on Tuesday. Incompletely turning around a 1.55% increase from Monday, Bitcoin finished the day at the level of $11,442.0.

It was a quiet beginning to the day. Bitcoin rose to a late morning intraday high to the level of $11,574.9 before operating reverse.

Missing the mark concerning the primary significant obstruction level at $11,830, Bitcoin tumbled to an early evening intraday low of $11,333.0.

Avoiding the primary significant help level at $11,201 Bitcoin quickly returned to $11,470 levels before moving back.

The close term bullish pattern stayed perfect, upheld by the most recent move back through to $11,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to shape a close term bearish pattern.

Bitcoin was up by 0.22% to $11,467.0. A beginning to the day saw Bitcoin tumble to an early morning low of $11,427.0 before ascending to a high at the level of $11,467.0. Bitcoin left the support and Resistance levels untested at an early stage.

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Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Let’s have a look at the cryptocurrency that hovering near to the level at $10,600 mark. The Bitcoin price is consolidating to the 50-12 Hour SMA and the 200-12 Hours SMA. The strong resistance lies at the level 50-12 SMA that repeatedly rejected the price.

This repeated dismissal may drop the value down to the level at  $10,400 uphold level, which is by all accounts the main observable help level on the drawback. If case this level doesn’t hold firm, at that point you can anticipate that the cost should plunge below $10,000. For this situation, one can anticipate that BTC should tumble to the level of $9,700 before it experiences another solid help.

While this may not appear to be a huge number, remember that every one of these addresses holds a great many dollars worth of Bitcoin. The fishes using the stale value activity to merge their positions look good for the general market.

With respect to the top 50 digital forms of money, the greatest failures incorporate Compound, down 12% over the most recent 24 hours, UMA down 12%, OMG Network down at the level 13%, Yearn.finance down 16%, and Aave down 18%. The main bull among the sloths of bears is EOS, which broke out greatly as covered Tuesday.

Ethereum has since September 23, been holding inside a rising equal channel. Recuperation towards $400 flamed out marginally above $360 a week ago. On the drawback, the misfortunes that followed grasped uphold at the level of $335 throughout the end of the week, permitting the shrewd agreement sign to revitalize, making strides above $350.

The Ethereum selling pressure in the market halted the increase at the 50 SMA and 100 SMA. Ether fell below the climbing channel, confirming a bear banner.

The downside of a significant help zone shows that Ethereum is at grave risk of spiraling to the level at $300. Other than the various simple help zones, the most significant one lies somewhere in the range of $298 and $309. Previously, around 879,000 locations purchased almost 2 million ETH.

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Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

The Bitcoin moves back and shows the bearish to the start of the day with the support level at $10,900 to the broader market.

The Bitcoin BTC to USD is rose by the level at 1.33% this Tuesday and reversing the loss at the level of 0.83% on Monday.

It was a mixed start to the day. Bitcoin fell to an early morning low $10,674.2 before finding support.

Steering clear of the major support levels, Bitcoin struck a late morning high at the level of $10,815.4 before operating reverse.

Coming up short of the major resistance levels, Bitcoin slid to a late afternoon intraday low $10,654.0.

Steering clear of the first major support level at $10,585, Bitcoin rallied to a final hour intraday high at the level of $10,889.0.

Falling short of the first major resistance level at $10,915, Bitcoin eased back to end the day at sub-$10,860 levels.

The near-term bullish trend remained whole, in contempt of the latest pullback. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to form a near-term bearish trend. At the hour of composing, Bitcoin was somewhere around 0.28% to the level of $10,826.0. It was a blended beginning to the day. Bitcoin rose to an early morning high $10,866.0 before tumbling to a low $10,826.0.

Bitcoin started the significant help and obstruction levels untested from the get-go. Somewhere else, it was a blended beginning to the day.

Bitcoin Cash ABC (+0.54%), Bitcoin Cash SV to the level (+0.62%), and Crypto.com Coin (+0.65%) evaded the pattern right off the bat.

It was a bearish beginning to the day for the remainder of the majors, in any case. Binance Coin was somewhere around 1.18% to lead the way down.

https://xtreamforex.com/nasdaq-futures-shows-the-short/

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