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Gold Price Pressured Near Daily Low Amid Trump-Driven USD Strength

Gold Price Pressured Near Daily Low Amid Trump-Driven USD Strength

Gold Price Pressured Near Daily Low Amid Trump-Driven USD Strength

Gold (XAU/USD) continues last week’s slide, facing additional selling pressure for a second day on Monday amid a robust US Dollar (USD) outlook. Optimism over US President-elect Donald Trump’s anticipated expansionary policies has bolstered the USD, pushing it near a four-month high reached last week, which in turn dampens demand for gold.

Trump’s proposal for a 10% tariff on all US imports is expected to drive inflation higher and constrain the Federal Reserve’s (Fed) ability to adopt aggressive easing measures. Elevated US Treasury bond yields have supported this outlook, prompting investors to move away from non-yielding assets like gold. However, a cautious market sentiment may help contain further losses for the safe-haven metal.

With key events on the horizon, including the latest US inflation data and speeches from prominent FOMC members like Fed Chair Jerome Powell, traders may adopt a wait-and-see approach. This caution could prevent a further extension of gold’s recent sharp pullback from the $2,800 mark, an all-time high set on October 31.

Gold Price Bears in Control as USD Holds Firm

Gold’s sharp weekly decline—the steepest in over five months—has been fueled by the USD rally and rising Treasury yields following Trump’s election victory. Enthusiasm surrounding the so-called “Trump trade” continues to boost the Greenback, exerting downward pressure on gold as equity markets remain upbeat.

Last week, the Fed cut its benchmark rate by 25 basis points, hinting at potential further easing. Despite this, Minneapolis Fed President Neel Kashkari emphasized the need for more evidence of inflation returning to the 2% target before considering further cuts. Expectations that Trump’s protectionist policies may amplify global trade tensions could also offer support to the safe-haven XAU/USD.

With upcoming US inflation, producer price, and retail sales reports, as well as key comments from Fed officials, investors may avoid large positions, awaiting new cues that will shape the USD’s direction and influence gold’s trajectory.

Technical Outlook: Gold Remains Near Multi-Week Low with Key Support Levels

Technically, further declines in gold may find support around $2,660, with the 50-day Simple Moving Average (SMA) positioned near $2,647-2,746. A break below last week’s low of $2,643 could trigger increased bearish sentiment, potentially accelerating the decline toward the October low of $2,605-2,602.

On the upside, a move above $2,700 could face strong resistance at the $2,718 level, with a further hurdle in the $2,740-2,745 supply zone. Sustained strength beyond this range could signal the end of the corrective phase, potentially driving gold toward $2,758-2,790 and challenging the record high set on October 31.

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Japanese Yen Stabilizes Against USD Amid Mixed Market Signals

Japanese Yen Stabilizes Against USD Amid Mixed Market Signals

Japanese Yen Stabilizes Against USD Amid Mixed Market Signals

The Japanese Yen (JPY) remains range-bound against the US Dollar (USD) on Friday, fluctuating between slight gains and losses in early European trading. Despite recent verbal intervention from Japanese authorities to support the JPY, skepticism around the Bank of Japan’s (BoJ) ability to implement further rate hikes limits the currency’s upward potential.

Optimism around potential growth and inflation from Trump’s economic policies also provides a tailwind for US Treasury yields, overshadowing the Federal Reserve’s dovish stance. This, combined with renewed buying interest in the USD, helps cushion the USD/JPY pair from further declines.

Yen Under Pressure Despite Intervention and Economic Data Weakness

On Friday, Japanese government data revealed a second consecutive month of declines in household spending, with a 1.3% drop in September, following a similar trend in inflation-adjusted wages. These economic headwinds may challenge the BoJ’s ability to pursue additional rate hikes.

Further impacting the Yen, Japanese officials reiterated their commitment to monitoring the foreign exchange market closely. Chief Cabinet Secretary Yoshimasa Hayashi emphasized a high level of urgency, while Vice Finance Minister Atsushi Mimura indicated the government’s readiness to counter excessive currency movements. Finance Minister Katsunobu Kato expressed concern over the potential impact of President-elect Donald Trump’s policies on Japan’s domestic economy.

Meanwhile, the USD/JPY pair rebounded above 154.00 following Trump’s election victory, prompting verbal intervention from Japan’s leadership. Quarterly data from the Ministry of Finance (MOF) revealed ¥5.53 trillion spent on currency interventions between June and July.

Technical Outlook: USD/JPY Maintains Bullish Bias Above Key Support Levels

Technically, the USD/JPY’s recent dip found support near the 152.70–152.65 level, a pivotal area that may now act as a buffer. A break below this could accelerate a correction towards the 152.00 mark, with further downside potentially reaching the 100-day Simple Moving Average (SMA) around 151.70–151.65. Continued selling pressure would signal that the pair’s strong recent uptrend has stalled, opening the door for deeper declines.

On the upside, resistance is expected around the 153.50 level, followed by a key supply zone near 153.85–153.90. A move back above 154.00 could position the pair to retest Thursday’s multi-month high around 154.70, with momentum potentially extending to the psychological 155.00 level and the 155.20 zone, which aligns with the July 30 swing high.

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Gold Price Sinks to Multi-Week Low as Trump Victory Spurs Sharp USD Rally

Gold Price Sinks to Multi-Week Low as Trump Victory Spurs Sharp USD Rally

Gold (XAU/USD) faces heavy selling pressure in Wednesday’s European session, dropping to the $2,700 level—its lowest in nearly three weeks. Republican candidate Donald Trump is leading the US presidential race, positioning him as the likely 47th president, which has sparked a strong US Dollar (USD) rally and triggered aggressive gold sell-offs.

Additionally, concerns over deficit spending and expectations of less aggressive easing from the Federal Reserve (Fed) are pushing US Treasury yields higher, making gold less attractive as a non-yielding asset. The risk-on sentiment, illustrated by a strong rally in US equity futures, further signals a downward bias for the safe-haven XAU/USD.

Daily Digest Market Movers: Gold Price Hit by Persistent USD Buying

The US Dollar surged to a four-month high as US election exit polls indicate momentum in favor of former President Donald Trump. The current electoral tally stands at 227 for Trump and 189 for Harris, with Trump leading in key swing states like Arizona, Georgia, Michigan, Pennsylvania, and Wisconsin. Fox News reports a Republican-controlled Senate, as Trump-endorsed candidate Bernie Moreno is projected to win in Ohio.

With Trump performing strongly, speculation over inflationary tariffs and deficit-spending has driven US Treasury yields higher. The benchmark 10-year Treasury yield spiked nearly 15 basis points, reaching 4.44%, its highest since early July. The reduced uncertainty surrounding the US election has intensified risk-on trading, adding pressure on safe-haven gold.

Geopolitical concerns, including Iran’s potential retaliation against Israel for an October 26 attack, have had limited impact on gold’s recent decline.

Technical Outlook: Gold Price Tests Key Support Levels

From a technical perspective, the $2,725-2,720 zone remains critical support; a drop below this could see gold accelerate toward sub-$2,700 levels, marking the lower edge of an ascending channel from late July. A decisive break below could lead to further declines toward the next key support at $2,675, and potentially to the $2,657-2,655 area.

Conversely, resistance has formed around $2,748-2,750. A sustained move above this could push gold toward the ascending channel resistance near $2,780-2,785, with $2,800 acting as a pivotal level. A strong breakout beyond $2,800 could signal a continuation of the previous uptrend.

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Australian Dollar Holds Gains Following Hawkish RBA Comments, Focus Shifts to US Election

Australian Dollar Holds Gains Following Hawkish RBA Comments, Focus Shifts to US Election

Australian Dollar Holds Gains Following Hawkish RBA Comments, Focus Shifts to US Election

The Australian Dollar (AUD) remains steady after gains from improved Purchasing Managers Index (PMI) data released on Tuesday. The Reserve Bank of Australia (RBA) held its Official Cash Rate (OCR) at 4.35% for an eighth consecutive pause in November, and it’s expected to maintain current rates following this policy decision.

RBA Governor Michele Bullock highlighted the importance of maintaining restrictive interest rates amid ongoing inflation risks. Although the labor market remains tight, wage growth is showing signs of moderation.

In Australia, Judo Bank’s Services PMI rose to 51.0 in October, exceeding the market consensus of 50.6, while the Composite PMI climbed to 50.2 from 49.8. China’s Caixin Services PMI also improved, rising to 52.0 in October from 50.3 in September, signaling a broader regional economic uplift.

As attention turns to the US presidential election, investors are closely monitoring its outcome. Former President Donald Trump and Vice President Kamala Harris made final campaign stops in Pennsylvania on Monday, both expressing confidence in an exceptionally close race. Opinion polls show a virtual tie, with the final results potentially delayed for days. Trump has hinted at contesting any unfavorable result, as he did in 2020.

The US Dollar (USD) remains under pressure amid election uncertainties, with a Des Moines Register/Mediacom poll showing Democratic nominee Kamala Harris leading Trump by a narrow margin in Iowa, 47% to 44%. Markets are also awaiting the US Federal Reserve’s (Fed) policy decision on Thursday, with expectations for a modest 25 basis point rate cut, backed by a 99.5% probability according to the CME FedWatch Tool.

Australian inflation indicators are mixed, with the TD-MI Inflation Gauge rising by 0.3% month-over-month in October, the highest since July. ANZ Australia Job Advertisements grew by 0.3% in October, a slowdown from September’s revised 2.3% gain. Despite weaker growth, job advertisements have risen for two consecutive months.

In other news, China’s Commerce Minister Wang Wentao met with Australia’s Trade Minister Don Farrell on Sunday to discuss enhancing bilateral trade and ensuring fair treatment for Chinese businesses in Australia.

In US employment data, the Bureau of Labor Statistics reported a modest 12,000 increase in October’s Nonfarm Payrolls, significantly below expectations of 113,000. However, the Unemployment Rate held steady at 4.1%, in line with forecasts.

Technical Analysis: AUD/USD Holds Below 0.6600 with Bearish Trend Indications

AUD/USD trades near 0.6590 on Tuesday, with technical indicators suggesting the bearish trend may be easing as it tests the nine-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) remains below 50, indicating the bearish sentiment persists.

On the resistance side, AUD/USD faces immediate resistance at the nine-day EMA at 0.6596, followed by the 14-day EMA at 0.6618. A break above these levels could see the pair aim for the psychological level of 0.6700.

On the downside, support lies near the three-month low of 0.6536, with further support at the key psychological level of 0.6500 if bearish pressure resumes.

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Australian Dollar Steady Amid RBA’s Restrictive Policy Outlook

Australian Dollar remains subdued as US Dollar inches higher ahead of US PCE Price Index

Australian Dollar remains subdued as US Dollar inches higher ahead of US PCE Price Index

The Australian Dollar lingered in that strange, somber limbo it often found itself in, steady yet subdued against the mighty Greenback as Thursday dawned over the global market. Beneath the surface, there was a story in each data point, and the numbers came in trickling like beads of dew.

In Australia, retail sales lifted only by a whisper, 0.1% in September—fragile and disappointing, falling far short of the golden 0.3% expected, and a pale echo of August’s more confident 0.7%. Yet the Reserve Bank of Australia’s hawkish stance lent the Aussie Dollar a quiet backbone, helping it hold its ground even in the face of the looming U.S. PCE Price Index.

Across the Pacific, the U.S. Dollar gathered momentum with an aura of steadfast resilience as markets weighed in on the uncertainty, the shadows of the upcoming U.S. presidential election casting a long reflection over the currency. Yet even the Greenback found headwinds as U.S. growth data came in, slower than last quarter, reminding investors of the delicate line between expectations and reality.

China’s PMI figures trickled in with cautious optimism—the Manufacturing PMI edged above fifty, a shy ascent to 50.1, modestly outperforming the expectation, while the Non-Manufacturing PMI held its stance with a gentle rise to 50.2. The ADP report from the U.S. cast a brighter hue, with job growth well beyond the forecasts—a glimmer of vibrancy in an otherwise cautious economy.

Technical analysts cast a wary eye on the charts; AUD/USD hovered, almost defiantly, near 0.6570. The bearish trend traced its course along a descending channel, while the 14-day RSI lingered just above thirty, hinting at sentiment as overcast as a gray autumn morning. If the pair ventured south, it might test 0.6510, even touching the hallowed psychological 0.6500. And if resistance came calling? The journey might meander up to 0.6580 or the elusive 0.6600, where, in whispers, a breakout toward 0.6608 could still glisten on the horizon like an ephemeral Gatsby green light.

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Japanese Yen Struggles as BoJ Decision Looms; US Data in Focus

Japanese Yen Struggles as BoJ Decision Looms; US Data in Focus

The Japanese Yen (JPY) edged higher against the US Dollar during the Asian session on Wednesday, but gains remain limited as the currency hovers near a three-month low. Concerns that Japanese authorities may intervene to support the Yen lend it some resilience; however, uncertainty over the Bank of Japan’s (BoJ) upcoming rate decision keeps JPY appreciation capped.

Market sentiment suggests the recent loss of parliamentary majority by Japan’s ruling coalition may hinder the BoJ’s ability to tighten policy. The Yen’s upward movement is further limited by a global risk-on environment and a resurgence in US Dollar (USD) demand, with traders awaiting the BoJ’s rate decision and critical US economic data releases this week for new market direction.

Market Movers: Yen’s Struggles Persist as Political and Economic Concerns Grow

Japan’s Economy Minister, Ryosei Akazawa, cautioned that a weak Yen could drive up prices via import costs, potentially squeezing household incomes if wages do not keep pace, which would dampen private consumption. Finance Minister Katsunobu Kato added that authorities are closely monitoring currency movements, increasing speculation of potential intervention.

Japan’s political uncertainty adds complexity to the BoJ’s policy path, restraining any significant gains for the Yen amid a favorable risk appetite. The USD remains steady after nearing highs seen since July 30, while the USD/JPY pair holds close to recent peaks despite limited downside in anticipation of central bank announcements.

The BoJ will announce its policy decision at the end of its two-day meeting on Thursday, while key US data releases may provide additional cues on the Federal Reserve’s rate outlook. Recent robust US data, including Tuesday’s Consumer Confidence Index jump to 108.7—a nine-month high—reflect optimism in the economy, offsetting weaker job openings in September.

Technical Outlook: Limited Downside for USD/JPY; Bulls Target a Break Beyond 154.00

From a technical standpoint, last week’s breakout above the 150.65 confluence, marking the 100-day Simple Moving Average (SMA) and the 50% Fibonacci retracement of the July-September decline, suggests potential for further gains. However, recent failures to consolidate beyond the 61.8% Fibonacci level raise caution. The Relative Strength Index (RSI) on the daily chart hovers near the overbought zone, suggesting a period of consolidation or slight pullback may be needed before additional upside.

Support levels emerge at 153.00, with further potential down to 152.40 and 152.00. Conversely, a breakout beyond the 154.00 threshold could push USD/JPY to test the 154.35-154.40 region, with the psychological 155.00 level in view, and potentially the July peak around 155.20.

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Japanese Yen Nears Multi-Month

Japanese Yen Faces Selling Pressure Amid Political and Economic Uncertainty

Japanese Yen Faces Selling Pressure Amid Political and Economic Uncertainty

The Japanese Yen (JPY) faces challenges to start the week as market participants digest the implications of Japan’s general election results. Meanwhile, the only data on the U.S. docket is the Federal Reserve Bank of Dallas’ Texas Manufacturing Business Index for October. Later in the day, the U.S. Treasury will auction 2-year and 5-year notes, events closely watched by investors for potential impact on yields and the USD.

In a surprising election outcome, Japan’s Liberal Democratic Party (LDP), in power since 1955, lost its majority for the first time in 15 years, heightening economic and political uncertainty. According to NHK, the ruling LDP and coalition partner Komeito secured only 215 out of 465 lower house seats, short of the 233 needed for a majority. The opposition Constitutional Democratic Party of Japan (CDPJ) gained significantly, winning 148 seats, up from 98.

Following this development, USD/JPY opened the week with a bullish gap, touching a near three-month high around 154.00 before trading slightly lower at 153.50, marking a 0.7% daily gain. Reflecting broader Yen weakness, EUR/JPY is up over 0.6% at 165.50, and GBP/JPY has climbed 0.7% to 198.70.

The U.S. Dollar Index (DXY) closed last week with a solid gain, rising more than 0.8% and edging higher toward 104.50 in early Monday trading, supported by positive U.S. stock index futures indicating an improved risk sentiment.

In other markets, EUR/USD extended its downtrend on Friday, marking a fourth consecutive week of losses. The pair holds steady near 1.0800 as the European session begins on Monday. GBP/USD remained in a consolidation phase around 1.2950 after losing recovery momentum on Friday.

Meanwhile, gold saw bullish momentum on Friday, climbing back from a dip below $2,720. XAU/USD remains range-bound early Monday, trading below $2,750 as it struggles to establish a clear directional move.

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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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USD/CHF Gains Momentum Above 0.8550 Ahead of FOMC Minutes

USD/CHF Extends Decline Near 0.8400 as Investors Await US GDP Data

USD/CHF Extends Decline Near 0.8400 as Investors Await US GDP Data

The USD/CHF pair is experiencing selling pressure, trading around 0.8405 during early European hours on Thursday. Dovish comments from US Federal Reserve (Fed) officials continue to weigh on the US Dollar (USD).

At the Fed’s annual Jackson Hole retreat last week, Fed Chair Jerome Powell indicated that “the time has come” for the central bank to consider cutting interest rates. According to the CME FedWatch Tool, markets are fully pricing in a 25 basis point (bps) rate cut for September, with a 36.5% chance of a deeper cut.

Additionally, San Francisco Fed President Mary Daly mentioned on Monday that “the direction of change is down, and the time to adjust is now,” reinforcing expectations for a rate cut in September. Minneapolis Fed President Neel Kashkari also suggested it might be appropriate to start discussing rate cuts as early as September, citing a weakening labor market.

Geopolitical tensions in the Middle East and ongoing economic uncertainties could increase safe-haven demand, benefiting currencies like the Swiss Franc (CHF) against the USD. In a recent escalation, Israel’s military conducted raids and airstrikes across the occupied West Bank, resulting in at least 11 Palestinian deaths, as reported by CNN.

On the economic front, Switzerland’s ZEW Survey Expectations, released by the Centre for European Economic Research on Wednesday, dropped to -3.4% in August from 9.4% previously. Looking ahead, the Swiss KOF Leading Indicator for August is set to be published on Friday. In the US, the second estimate of the Q2 GDP Annualized figure, scheduled for Thursday, is expected to show a 2.8% expansion.

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USD/CAD Rebounds Above 1.3450 as Risk Sentiment

USD/CAD Rebounds Above 1.3450 as Risk Sentiment Worsens Ahead of Fedspeak

USD/CAD Rebounds Above 1.3450 as Risk Sentiment Worsens Ahead of Fedspeak

The USD/CAD pair has regained some ground, trading around 1.3460 during the early European session on Wednesday, breaking a three-day losing streak. This recovery is supported by a modest bounce-back in the US Dollar (USD). Market participants will look for further direction from speeches by Federal Reserve officials Christopher Waller and Raphael Bostic later today.

The cautious sentiment ahead of Nvidia’s earnings report and the upcoming Fedspeak may increase demand for safe-haven assets, benefiting the USD. However, expectations that the Federal Reserve will lower interest rates in September could limit the pair’s upward movement. Markets have already priced in a 25 basis point rate cut for September, with a 34.5% probability of a deeper cut, according to the CME FedWatch Tool. Traders anticipate a total of 100 basis points in Fed easing this year.

San Francisco Fed President Mary Daly suggested on Monday that it might be appropriate for the Fed to start cutting interest rates. Her views align with Fed Chair Jerome Powell’s remarks at the Jackson Hole symposium, where he expressed growing confidence that inflation is heading towards the 2% target, indicating it may be time for policy adjustments.

On the Canadian Dollar (CAD) side, economists predict that the Bank of Canada (BoC) will cut interest rates for a third consecutive time at its September 4 policy meeting, according to a Bloomberg survey. This expectation could weigh on the CAD against the USD. Additionally, lower crude oil prices, which affect the commodity-linked CAD, could further pressure the Canadian Dollar, as Canada is a leading oil exporter to the United States.

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Australian Dollar Advances on Improved Risk Sentiment

Australian Dollar Advances on Improved Risk Sentiment

Australian Dollar Advances on Improved Risk Sentiment

The Australian Dollar (AUD) has moved higher against the US Dollar (USD) on Tuesday, hovering just below the seven-month high of 0.6798 reached on Monday. The downside for the AUD/USD pair appears limited as traders anticipate diverging policy outlooks between the Reserve Bank of Australia (RBA) and the US Federal Reserve (Fed). Market participants are also awaiting the release of the Monthly Consumer Price Index on Wednesday, which could provide further insight into the RBA’s policy direction.

Recent minutes from the RBA meeting revealed that board members believe a rate cut is unlikely in the near term. RBA Governor Michele Bullock reiterated that the central bank remains prepared to raise rates if necessary to combat inflation.

In contrast, Fed Chairman Jerome Powell, speaking at the Jackson Hole Symposium, stated, “The time has come for policy to adjust,” although he did not specify when rate cuts would begin or their potential magnitude. The CME FedWatch Tool indicates that markets are fully pricing in at least a 25 basis point rate cut by the Fed at its September meeting.

Daily Market Movers: Australian Dollar Gains Amid Hawkish RBA

San Francisco Fed President Mary Daly commented on Monday that it is likely time to start cutting interest rates, potentially beginning with a quarter-percentage point reduction. Daly emphasized that if inflation continues to slow and the labor market remains stable, it would make sense to adjust policy gradually.

US economic data showed that Durable Goods Orders surged by 9.9% month-over-month in July, recovering from a 6.9% drop in June and far exceeding the expected 4.0% increase. This marks the largest gain since May 2020.

Philadelphia Fed President Patrick Harker highlighted the importance of a gradual reduction in interest rates, while Chicago Fed President Austan Goolsbee noted that monetary policy is currently highly restrictive, with the Fed now focusing on achieving its employment objectives.

The US Composite PMI slipped slightly to 54.1 in August, down from 54.3 in July, but remained above market expectations of 53.5, indicating ongoing business activity expansion for the 19th consecutive month.

In Australia, the Judo Bank Composite Purchasing Managers Index (PMI) increased to 51.4 in August from 49.9 in July, marking the fastest expansion in three months. This growth was driven by a stronger services sector, even as manufacturing contracted more sharply.

Minutes from the Federal Open Market Committee’s (FOMC) July policy meeting revealed that most Fed officials support cutting the benchmark interest rate in September if inflation continues to moderate.

Tuesday’s RBA Minutes indicated that board members had considered a rate hike earlier in the month but ultimately decided to keep rates unchanged to balance the risks. The consensus among RBA members is that a rate cut is unlikely soon.

Technical Analysis: AUD/USD Remains Below 0.6800

The AUD/USD pair is trading around 0.6770 on Tuesday. Technical analysis of the daily chart shows the pair has breached below its ascending channel, suggesting a potential weakening of the bullish trend. However, the 14-day Relative Strength Index (RSI) remains below the 70 mark, indicating ongoing bullish momentum.

Resistance for the AUD/USD pair is seen at the seven-month high of 0.6798, followed by the lower boundary of the ascending channel at 0.6800. A break above these levels could open the door for further gains toward the upper boundary of the channel at around 0.6940.

On the downside, the pair may find support near the nine-day Exponential Moving Average (EMA) at 0.6726. A break below this level could weaken the bullish bias and pressure the pair toward the 0.6575 support level, followed by additional support at 0.6470.

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USD/CAD Weakens Near

USD/CAD Weakens Near 1.3500 as Fed’s Powell Signals Possible Interest Rate Cut in September

USD/CAD Weakens Near 1.3500 as Fed’s Powell Signals Possible Interest Rate Cut in September

The USD/CAD pair is experiencing selling pressure around the 1.3510 level on Monday during Asian trading hours. The US Dollar (USD) is edging lower after Federal Reserve (Fed) Chair Jerome Powell indicated that the time for interest rate cuts may be approaching, starting this September.

Several Fed officials have delivered dovish comments, reinforcing the likelihood of rate cuts in September, which has put broad pressure on the Greenback in recent sessions. Powell stated, “The time has come for policy to adjust,” and added, “The direction is clear, but the timing and pace of rate cuts will depend on incoming data, the evolving economic outlook, and the balance of risks.”

Additionally, Philadelphia Fed President Patrick Harker has expressed support for two or three rate cuts in 2024, provided there are no significant changes in US economic data. Chicago Fed President Austan Goolsbee mentioned that monetary policy is currently at its most restrictive level, with the Fed now focusing on its employment mandate. According to the CME FedWatch Tool, traders have fully priced in a 25 basis point (bps) rate cut for September, with the odds for a deeper cut rising to 36.5%, up from 24% last week.

In Canada, data from Statistics Canada revealed that Retail Sales fell by 0.3% month-on-month in June, following a 0.8% decline in the previous reading, aligning with market expectations. However, Retail Sales excluding automobiles unexpectedly increased by 0.3% month-on-month in June, surpassing the anticipated 0.2% decline. Market participants are now focusing on the Canadian Gross Domestic Product (GDP) data for the second quarter, due on Friday. The Bank of Canada (BoC) is anticipated to implement an additional 75 basis points (bps) cut by the end of the year.

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BoE Governor Bailey’s Speech

EUR/GBP Slips Below 0.8500 Ahead of BoE Governor Bailey’s Speech

EUR/GBP Slips Below 0.8500 Ahead of BoE Governor Bailey’s Speech

The EUR/GBP pair continues its downward trend, trading near 0.8485 during early European trading hours on Friday. The decrease in expectations for a Bank of England (BoE) interest rate cut in September, following positive Purchasing Managers’ Index (PMI) data, is supporting the Pound Sterling (GBP) and pushing the pair lower. Attention is now on BoE Governor Andrew Bailey’s speech, scheduled for later today.

Recent data showed robust business activity in the UK, marking the strongest growth in four months, coupled with easing price pressures, according to a Thursday survey. S&P Global’s Composite PMI climbed to 53.4 in August from 52.8 in July, slightly exceeding the forecast of 52.9. This upbeat report has reduced market expectations for a BoE rate cut next month, thereby strengthening the GBP against the Euro (EUR). Following the PMI release, financial markets are now pricing in less than a 30% chance of a BoE rate cut in September.

On the Euro side, the European Central Bank (ECB) held interest rates steady at its July meeting but hinted at the possibility of rate cuts later in the year, as indicated in the minutes released on Thursday. Investors are currently betting on a 90% chance of a 25 basis points cut in the deposit rate to 3.5% in September, with expectations of at least one more cut before year-end. This outlook is weighing on the Euro.

Adding to the dovish tone, ECB Governing Council member Martins Kazaks expressed readiness to discuss another rate cut at the upcoming September meeting, citing confidence that inflation will return to the 2% target, despite concerns over the economic outlook.

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EUR/USD Slips Below 1.1150 as Eurozone and US PMI Data Loom

EUR/USD Slips Below 1.1150 as Eurozone and US PMI Data Loom

EUR/USD Slips Below 1.1150 as Eurozone and US PMI Data Loom

The EUR/USD pair is trading with mild losses around 1.1145, breaking its four-day winning streak during the Asian session on Thursday. Despite the current dip, downside risks for the pair appear limited due to strong expectations that the US Federal Reserve (Fed) may begin easing its monetary policy in September. Investors are now turning their attention to the preliminary August Purchasing Managers’ Index (PMI) data from both the Eurozone and the US, scheduled for release later today.

Minutes from the Fed’s July 30-31 meeting, released on Wednesday, indicated that most Fed officials anticipated a potential interest rate cut in September, provided that inflation continues to cool. Atlanta Fed President Raphael Bostic noted, “We might need to shift our policy stance sooner than I would have thought before.”

Fed Chair Jerome Powell’s upcoming speech at Jackson Hole is highly anticipated, with markets expecting him to signal that inflation is on track toward the Fed’s 2% target. Any dovish comments from Powell or other Fed officials could weigh on the US Dollar, potentially providing support for EUR/USD.

On the European side, European Central Bank (ECB) policymakers have refrained from committing to a specific timeline for interest rate cuts, citing expectations that inflation in the Eurozone will remain near current levels through the end of the year. However, ECB policymaker Olli Rehn suggested on Monday that the ECB might need to lower interest rates again in September due to ongoing economic weakness. The markets have already priced in nearly a 90% probability of a 25 basis point cut in the deposit rate to 3.5% in September, with expectations of at least one more reduction before the year concludes.

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EUR/USD Holds Firm Above 1.1100 with Fed Minutes Awaited

EUR/USD Holds Firm Above 1.1100 with Fed Minutes Awaited

EUR/USD Holds Firm Above 1.1100 with Fed Minutes Awaited

EUR/USD is hovering around 1.1130 during Wednesday’s North American session, marking its highest level this year. The currency pair is eyeing a revisit to the 2024 high of 1.1140 as the US Dollar (USD) weakens amid growing optimism for Federal Reserve (Fed) interest rate cuts in September.

The US Dollar Index (DXY), which measures the Greenback’s value against six major currencies, is near a fresh seven-month low, around 101.30.

With inflationary pressures in the United States (US) easing and the labor market cooling, investors are increasingly convinced that the Fed will cut interest rates in September. However, there’s uncertainty about whether this reduction will be significant or gradual. The CME FedWatch tool indicates a 30.5% chance of a 50-basis-point (bps) rate cut, with the remaining majority expecting a 25-bps reduction.

Later today, attention will shift to the Federal Open Market Committee (FOMC) minutes from the July policy meeting, set to be released at 18:00 GMT. During the July meeting, the Fed maintained its key borrowing rates at 5.25%-5.50% for the eighth consecutive time, acknowledging increased risks to both inflation and employment.

This week’s spotlight will be on Fed Chair Jerome Powell’s speech at the Jackson Hole (JH) Symposium on Friday, which is expected to provide new insights into the potential rate cuts in September. In a press conference following July’s policy announcement, Powell stated, “If we were to see inflation moving down more or less in line with expectations, growth remains reasonably strong, and the labor market remains consistent with current conditions, then I think a rate cut could be on the table at the September meeting.”

Market Overview: EUR/USD Steady Ahead of Jackson Hole Symposium

EUR/USD remains above the 1.1100 level, with the Euro (EUR) gaining strength against the US Dollar. The Euro is performing well against its peers, driven by expectations that the European Central Bank (ECB) will take a cautious approach to cutting interest rates.

ECB policymakers have avoided committing to a predetermined path for rate cuts, as inflation in the Eurozone is expected to remain above target throughout the year. Despite this, market participants anticipate another ECB rate cut in September, amid economic challenges in Germany, the Eurozone’s largest economy.

Slower wage growth in Germany during Q2 has provided some relief to ECB officials, boosting optimism for a rate cut in September. Data from the Bundesbank, Germany’s central bank, showed that Negotiated Wages grew by 3.1%, significantly slower than the pace in Q1.

Looking ahead, investors will focus on preliminary Eurozone HCOB Purchasing Managers’ Index (PMI) data for August and Q2 Negotiated Wage Rates, both due on Thursday. The Composite PMI is expected to show minimal improvement, reflecting a continued downturn in manufacturing. A lower reading for the Q2 Negotiated Wage Rate, following a 4.69% increase in Q1, would likely be welcomed by ECB officials.

Technical Analysis: EUR/USD Builds Momentum for a Push to 1.1140

EUR/USD is approaching its year-to-date high of 1.1140 as it gains strength ahead of the FOMC minutes release. The currency pair has gained momentum after breaking out of a channel formation on the daily chart. The upward-sloping 20-day and 50-day Exponential Moving Averages (EMAs), positioned near 1.0970 and 1.0900 respectively, suggest a strong bullish trend.

The 14-day Relative Strength Index (RSI) is in the bullish range of 60.00-80.00, indicating strong upward momentum.

If the Euro bulls successfully breach the December 28, 2023, high of 1.1140, the next target will be the psychological resistance at 1.1200. On the downside, the low from August 15 at 1.0950 will serve as critical support.

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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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