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Japanese Yen Strengthens

Japanese Yen Strengthens as Traders Anticipate BoJ Rate Hike

Japanese Yen Strengthens as Traders Anticipate BoJ Rate Hike

The Japanese Yen (JPY) continues to gain momentum for the second consecutive day as Bank of Japan (BoJ) Governor Kazuo Ueda’s hawkish comments stand in stark contrast to the dovish tone of Federal Reserve Chair Jerome Powell.

In a speech to Parliament on Friday, Governor Ueda suggested that the BoJ might consider further interest rate hikes if economic conditions align with their projections. July’s National Consumer Price Index (CPI) data remained at its highest level since February, further supporting the BoJ’s hawkish outlook.

Meanwhile, the US Dollar (USD) is weakening due to increasing expectations of a rate cut in September. During the Jackson Hole Symposium, Fed Chair Powell remarked, “The time has come for policy to adjust,” though he did not specify the timing or scale of the potential cuts.

Market participants are now widely anticipating a 25 basis point (bps) rate cut from the Federal Reserve in September. The CME FedWatch Tool shows that markets are fully pricing in at least this amount.

Daily Market Movers: Japanese Yen Rises on BoJ Ueda’s Hawkish Comments

Bloomberg reported that Philadelphia Fed President Patrick Harker emphasized the need for a gradual reduction in US interest rates. Reuters added that Chicago Fed President Austan Goolsbee noted that monetary policy is currently at its most restrictive level, with the Fed now focusing on achieving its employment mandate.

Governor Ueda, speaking before the Japanese parliament on Friday, clarified that the BoJ is “not considering selling long-term Japanese government bonds (JGBs) as a tool for adjusting interest rates.” He added that any reduction in JGB purchases would only account for about 7-8% of the balance sheet, which is a relatively small decrease. Ueda further mentioned that if the economy meets their projections, there could be a phase where interest rates might be adjusted slightly higher.

Japan’s National CPI rose by 2.8% year-on-year in July, maintaining this rate for the third consecutive month and remaining at its highest level since February. Additionally, the National CPI excluding Fresh Food increased by 2.7%, the highest reading since February, in line with expectations.

In the US, the Composite PMI edged down slightly to 54.1 in August from 54.3 in July, a four-month low but still above market expectations of 53.5. This indicates continued growth in US business activity, marking 19 consecutive months of expansion.

The FOMC minutes from July’s policy meeting revealed that most Fed officials were in agreement that a rate cut is likely at the September meeting, provided that inflation continues to cool.

Technical Analysis: USD/JPY Drops Near 144.00

USD/JPY traded around 143.90 on Friday, with the daily chart indicating the pair is positioned below a downtrend line, suggesting a bearish outlook. However, the 14-day Relative Strength Index (RSI) remains slightly above 30, indicating that the bearish trend might persist.

On the downside, the USD/JPY pair may approach the seven-month low of 141.69, recorded on August 5. A break below this level could drive the pair toward the throwback support level at 140.25.

In terms of resistance, the USD/JPY pair may test the immediate barrier at the downtrend line around the psychological level of 145.00, followed by the nine-day Exponential Moving Average (EMA) at the 145.74 level. A breakthrough above the nine-day EMA could lead the pair to explore the region around the throwback-turned-resistance at the 154.50 level.

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Gold Price Holds Below $2,500 as Traders

Gold Price Holds Below $2,500 as Traders Await Powell’s Speech

Gold Price Holds Below $2,500 as Traders Await Powell’s Speech

Gold (XAU/USD) is seeing some dip-buying on the last trading day of the week, partially recovering from Thursday’s over 1% drop to a weekly low. The US Dollar (USD) is struggling to build on its overnight rebound from the year-to-date low, due to expectations of lower interest rates in the US. This dovish outlook has triggered a decline in US Treasury bond yields, putting pressure on the Greenback. Additionally, ongoing geopolitical risks are providing support to the safe-haven appeal of gold.

However, traders remain cautious and are avoiding significant bullish positions ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium later today. This hesitation is keeping gold prices below the key psychological level of $2,500 as the European session approaches. Powell’s remarks will be closely analyzed for indications regarding the Fed’s potential rate-cut path, which will significantly impact near-term USD price movements and offer new directional momentum for gold.

Daily Market Movers: Gold Traders on Standby for Powell’s Speech

On Thursday, the US Dollar staged a solid recovery from its 2024 low, buoyed by rebounding US Treasury bond yields, which drew investors away from gold. However, the USD’s recovery lacked sustained momentum due to market speculation that the Federal Reserve might begin a rate-cutting cycle in September, limiting losses for XAU/USD.

On the economic data front, the US Department of Labor reported that initial jobless claims rose to a seasonally adjusted 232,000 for the week ending August 17, up from the previous 228,000. This followed an annual benchmark review revealing that US employers added 818,000 fewer jobs than initially reported for the year through March.

Minutes from the Federal Open Market Committee (FOMC) meeting on July 30-31 showed an increasing number of policymakers supporting a rate cut next month due to progress in reducing inflation. The S&P Global flash PMI indicated that US manufacturing activity contracted at its fastest pace this year, although the services sector saw a surprise increase. The composite PMI showed continued healthy expansion in US private sector business activity, with selling price inflation nearing pre-pandemic levels.

Comments from regional Fed officials reflect a cautious stance on rate cuts. Kansas City Fed President Jeffrey Schmid emphasized the need for more data to support a rate reduction, while Philadelphia Fed President Patrick Harker indicated openness to a September cut, contingent on economic data. Boston Fed President Susan Collins also suggested that a rate cut would soon be appropriate as inflation data stabilizes.

Market attention is now focused on Fed Chair Jerome Powell’s upcoming speech, which will be pivotal in signaling the future trajectory of interest rates and influencing gold’s direction.

Technical Analysis: Gold’s Setup Suggests Potential for Further Gains

From a technical perspective, gold’s recent decline found support near the $2,370 horizontal resistance-turned-support level, which now serves as a crucial pivot point. A decisive break below this level could trigger technical selling, pushing gold prices towards the next support area around $2,345-$2,343. Further downside could extend towards the 50-day Simple Moving Average (SMA), currently positioned just above the $2,400 mark.

Conversely, if gold can regain momentum above the $2,500 level, it will face initial resistance around the $2,513-$2,514 region. Clearing this hurdle could open the door to testing the all-time high near $2,531-$2,532, potentially reigniting bullish momentum and extending gold’s recent uptrend.

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US Dollar Faces Continued Pressure as Market Focus

US Dollar Faces Continued Pressure as Market Focus Shifts to PMI Data

US Dollar Faces Continued Pressure as Market Focus Shifts to PMI Data

After a brief recovery earlier in the day on Wednesday, the US Dollar Index reversed course during the American session, marking its fourth consecutive day of losses. As of Thursday’s European trading hours, all eyes are on the preliminary August PMI data from Germany and the Eurozone, provided by HCOB, alongside the S&P Global/CIPS PMI figures. Later in the day, the US economic calendar will feature weekly Initial Jobless Claims, Existing Home Sales, and S&P Global PMI data.

On Wednesday, the US Bureau of Labor Statistics reported a preliminary estimate indicating a benchmark revision for March 2024’s total Nonfarm employment, with a downward adjustment of -818,000 (-0.5%). Additionally, minutes from the Federal Reserve’s July 30-31 policy meeting revealed that a significant majority of policymakers felt that, should the incoming data align with expectations, easing policy at the next meeting would likely be appropriate. The USD Index is currently trading just above 101.20, down over 1% since the start of the week. Meanwhile, US stock futures are slightly lower, and the 10-year US Treasury bond yield remains near the lower end of its weekly range, around 3.8%.

In Asian trading, data from Australia showed the Judo Bank Composite PMI rose to 51.4 in August’s preliminary reading, up from 49.9 in July. However, this improvement failed to significantly impact AUD/USD, which continues to trade sideways around 0.6750.

EUR/USD surpassed 1.1170 on Wednesday, reaching its highest level since July 2023 before entering a consolidation phase early Thursday. The pair is currently steady at around 1.1150.

GBP/USD maintained its bullish momentum on Wednesday, climbing above 1.3100 for the first time in over a year. The pair remains just below this level as of Thursday morning in Europe.

USD/JPY was unable to capitalize on the USD’s broader weakness, closing flat on Thursday. The pair continues to trade sideways around 145.50 at the start of the European session.

Gold, which had corrected from its record high of $2,531 set on Tuesday, stabilized above $2,500 late Wednesday. XAU/USD remains relatively quiet, trading near $2,510 early Thursday.

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How Responsible is the Polish Central Bank

How Responsible is the Polish Central Bank? – Commerzbank Analysis

How Responsible is the Polish Central Bank? – Commerzbank Analysis

The Polish zloty weakened against the euro and other CE3 currencies yesterday after Poland’s Constitutional Court issued a controversial ruling. The court declared that NBP governor Adam Glapinski could not be held accountable by a parliamentary committee, the State Tribunal, or through any report by such bodies, citing constitutional guarantees of central bank independence. This argument has been used by the previous ruling party (PiS) from the outset of this dispute, notes Commerzbank’s FX Analyst Tatha Ghose.

Zloty Weakens Against the Euro

“We believe this argument lacks merit and doubt that parliament will consider the Constitutional Court’s ruling as binding. Poland’s Constitutional Court has been compromised since the rule of law disputes with the EU and lacks legitimacy. Other key courts are also dominated by right-wing PiS affiliates. The accusations from both sides are driven by ideology rather than good faith.”

“On balance, it seems clear that Glapinski’s ’emergency’ rate cuts just before the elections, coupled with his refusal to cut rates further after an opposing political party took over, were politically motivated. The NBP cannot now claim ‘central bank independence’ after failing to uphold its constitutional duty to remain apolitical.”

“The new KO government will likely proceed with the planned Sejm procedures despite the court’s ruling, pushing for Glapinski’s suspension. Glapinski, in turn, will likely use the ruling to resist interrogation. This standoff is expected to continue in parliament for the next year without a clear resolution. As a result, monetary policy is likely to remain highly politicized and stagnant during this period.”

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EUR/USD Approaches YTD Highs Near

EUR/USD Approaches YTD Highs Near 1.1050 on Expectations of Fed Rate Cuts

EUR/USD Approaches YTD Highs Near 1.1050 on Expectations of Fed Rate Cuts

The EUR/USD pair climbed to year-to-date (YTD) highs, nearing 1.1040, during early European trading on Monday. This rise is supported by a broad weakening of the US Dollar (USD) amid increasing speculation that the Federal Reserve (Fed) might cut interest rates in September. Market participants are now keenly awaiting Fed Chair Jerome Powell’s speech on Friday for further insights into potential rate cuts.

On Sunday, San Francisco Fed President Mary Daly expressed greater confidence that inflation is under control, suggesting that it might be time to consider lowering borrowing costs from the current range of 5.25% to 5.5%. Chicago Fed President Austan Goolsbee also cautioned that the US central bank should avoid maintaining restrictive policies longer than necessary. These dovish remarks from Fed officials have added selling pressure on the Greenback and provided a boost to EUR/USD.

Currently, investors are pricing in a roughly 70% chance of a quarter-point Fed rate cut in September, with some expecting a more substantial half-point cut. Morningstar’s chief US economist, Preston Caldwell, noted that the latest CPI report further supports the case for aggressive Fed rate cuts starting in September, with an initial 25 basis point cut projected to bring the Fed Funds rate down to 5.00-5.25%.

Meanwhile, the Euro (EUR) remains resilient as markets anticipate a gradual reduction in interest rates by the European Central Bank (ECB). At the latest press conference, ECB President Christine Lagarde emphasized a cautious, data-dependent approach, stating that policymakers are “not pre-committing to a particular rate path” and will make decisions on a meeting-by-meeting basis.

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Japanese Yen Strengthens

Japanese Yen Strengthens Amid Hawkish BoJ Sentiment; US Data in Focus

Japanese Yen Strengthens Amid Hawkish BoJ Sentiment; US Data in Focus

The Japanese Yen (JPY) rebounded against the US Dollar (USD) on Friday, likely bolstered by Japan’s strong second-quarter GDP growth, which fuels speculation about a potential interest rate hike from the Bank of Japan (BoJ).

However, the Yen may face headwinds due to political uncertainty in Japan, triggered by reports suggesting that Prime Minister Fumio Kishida will not seek re-election as party leader in September, potentially ending his term as prime minister.

The USD/JPY pair is trending lower as the US Dollar weakens, pressured by declining Treasury yields. Moreover, traders are fully pricing in a 25 basis point rate cut by the US Federal Reserve for September, according to the CME FedWatch tool.

Despite this, the Greenback found some support from recent positive US economic data, which has eased recession fears. Upcoming data, including the preliminary US Michigan Consumer Sentiment Index for August and July’s Building Permits, will be closely watched during the North American session.

Market Highlights: Japanese Yen Rises on Hawkish BoJ Outlook

On Thursday, the US Census Bureau reported a 1.0% month-over-month increase in US Retail Sales for July, reversing June’s 0.2% decline and exceeding the expected 0.3% rise. Additionally, Initial Jobless Claims for the week ending August 9 came in at 227,000, lower than the forecast of 235,000 and down from 234,000 the previous week.

Japanese Economy Minister Yoshitaka Shindo expressed optimism on Thursday, stating that Japan’s economy is expected to recover gradually as wages and incomes improve. He also mentioned that the government will work closely with the BoJ to implement flexible macroeconomic policies.

Japan’s GDP grew by 0.8% quarter-on-quarter in Q2, beating market expectations of 0.5% and rebounding from a 0.6% contraction in Q1. This marks the strongest quarterly growth since Q1 2023. On an annualized basis, GDP grew by 3.1%, surpassing the 2.1% market consensus and reversing a 2.3% contraction in Q1. This is the highest yearly growth since Q2 2023.

Federal Reserve Bank of Chicago President Austan Goolsbee expressed concern on Wednesday about the labor market rather than inflation, noting recent improvements in price pressures alongside weak employment data. He added that the extent of rate cuts will depend on prevailing economic conditions, according to Bloomberg.

US Consumer Price Index (CPI) data showed a 2.9% year-over-year increase in July, slightly down from the 3% rise in June and below market expectations. The Core CPI, excluding food and energy, rose by 3.2% year-over-year, a slight decrease from June’s 3.3% increase, in line with market forecasts.

Prime Minister Fumio Kishida announced on Wednesday that he will not seek re-election as the leader of the Liberal Democratic Party (LDP) in September. Kishida highlighted the need to address Japan’s deflationary pressures by promoting wage and investment growth, with the goal of expanding Japan’s GDP to ¥600 trillion.

Rabobank’s senior FX strategist, Jane Foley, noted that this week’s series of US data releases, along with the upcoming Jackson Hole event, should offer more clarity on potential US policy actions. The primary expectation is for the Fed to cut rates by 25 basis points in September, with another potential cut by year-end.

Technical Analysis: USD/JPY Slips Toward 148.50; Immediate Support at Nine-Day EMA

The USD/JPY pair is trading around 148.80 on Friday. The daily chart indicates that the pair is above the nine-day Exponential Moving Average (EMA), suggesting a short-term bullish trend. However, the 14-day Relative Strength Index (RSI) remains below 50, and further gains would confirm a bullish momentum.

In terms of support levels, the USD/JPY pair may find immediate support at the nine-day EMA, around 148.09. A drop below this level could enhance the bearish outlook, potentially pushing the pair toward the seven-month low of 141.69, recorded on August 5. A continued decline could bring the pair closer to the next support level at 140.25.

On the upside, the USD/JPY pair could target the 50-day EMA at 153.08, with a possibility of testing the resistance level at 154.50, which has shifted from previous throwback support to current pullback resistance.

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Australian Dollar Declines as US Dollar Gains Strength

Australian Dollar Declines as US Dollar Gains Strength Ahead of CPI Inflation Data

Australian Dollar Declines as US Dollar Gains Strength Ahead of CPI Inflation Data

The Australian Dollar (AUD) has weakened against the US Dollar (USD) following an unexpected rate cut by the Reserve Bank of New Zealand (RBNZ) on Wednesday. The RBNZ reduced its Official Cash Rate (OCR) by 25 basis points to 5.25% from 5.50%. Given the close economic ties between Australia and New Zealand, developments in one country can influence the other, impacting their respective currencies.

Despite this, the AUD found some support from recent data showing that Australian wage growth remained strong in the second quarter, leading the Reserve Bank of Australia (RBA) to maintain a hawkish stance on its policy outlook. The RBA kept the cash rate steady at its meeting last week, aiming to return inflation to its 2-3% target range.

RBA Governor Michele Bullock ruled out the possibility of rate cuts within the next six months, emphasizing the bank’s cautious approach to inflation risks and its readiness to raise rates if necessary. Traders are now focused on the upcoming release of Consumer Inflation Expectations and Employment data from Australia on Thursday.

The AUD/USD pair saw support as the US Dollar retreated following weaker-than-expected Producer Price Index (PPI) data from the United States (US) released on Tuesday. Investors are now looking ahead to the US CPI inflation report on Wednesday, which could provide insights into the Federal Reserve’s (Fed) interest rate strategy.

Market Movers: Potential for Australian Dollar Appreciation Amid RBA’s Hawkish Stance

On Tuesday, Atlanta Fed President Raphael Bostic expressed increased confidence in the Fed’s ability to achieve its 2% inflation target, though he noted that more evidence is needed before supporting a rate reduction, according to Reuters.

The US Core Producer Price Index (PPI) rose by 2.4% year-on-year in July, down from the previous 3.0%, and below the expected 2.7%. The overall PPI increased by 2.2% YoY in July, compared to 2.7% in June, missing the market forecast of 2.3%. Month-over-month, PPI rose by 0.1% after a 0.2% increase in June.

In Australia, Westpac Consumer Confidence rose by 2.8% in August, reversing a 1.1% decline in July. Meanwhile, the Wage Price Index saw a 0.8% rise in the second quarter, slightly below the expected 0.9% increase.

RBA Deputy Governor Andrew Hauser attributed persistent inflation to weaker supply and a tight labor market, noting the significant uncertainty surrounding economic forecasts.

However, the AUD’s upside could be limited by safe-haven flows due to rising geopolitical tensions in the Middle East. On Sunday, Defense Minister Yoav Gallant informed US Defense Secretary Lloyd Austin of Iran’s military activities, which suggest preparations for a significant strike on Israel, according to Axios writer Barak Ravid.

Federal Reserve Governor Michelle Bowman also stated on Sunday that she sees ongoing inflation risks and labor market strength, indicating that the Fed may not be ready to cut rates at their next meeting in September, according to Bloomberg.

Westpac recently revised its RBA forecast, now predicting the first rate cut in February 2025, delayed from the previously expected November 2024. They also adjusted their terminal rate forecast to 3.35% from 3.10%, reflecting the RBA’s cautious approach, requiring stronger evidence before considering rate cuts.

Technical Analysis: Australian Dollar Trades Near 0.6650

The Australian Dollar is trading around 0.6640 on Wednesday. Technical analysis of the daily chart shows that the AUD/USD pair is moving within an ascending channel, indicating a strengthening bullish trend. The 14-day Relative Strength Index (RSI) has also moved above the 50 level, confirming the bullish momentum.

On the upside, the AUD/USD pair may test the upper boundary of the ascending channel at the 0.6675 level. A breakout above this level could propel the pair toward its six-month high of 0.6798, achieved on July 11.

In terms of support, the AUD/USD pair could test the nine-day Exponential Moving Average (EMA) at 0.6587, followed by the lower boundary of the ascending channel and the throwback level at 0.6575. A drop below this level could lead to a bearish outlook, potentially pushing the pair toward the throwback level at 0.6470.

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Steady Stock Futures Ahead of Inflation Report

Steady Stock Futures Ahead of Inflation Report

Stock futures exhibited little change as investors geared up for the release of the August producer price index, a key indicator of wholesale inflation. Futures linked to the Dow Jones Industrial Average increased by a mere 11 points, equivalent to a 0.03% gain. S&P 500 futures saw a slightly stronger uptick of 0.09%, while Nasdaq 100 futures inched 0.1% higher.

The prior trading day had been mixed, with the Dow, comprising 30 major stocks, declining for the second consecutive day, resulting in a 0.2% drop primarily due to 3M’s performance. On the other hand, the Nasdaq Composite closed with nearly a 0.3% gain, and the S&P 500 added 0.1%.

A significant event on traders’ radar was the August Consumer Price Index (CPI) report, which had a notable impact on market sentiment. The core CPI, excluding food and energy costs, registered a 0.3% increase from the previous month and a 4.3% rise compared to last year. These figures slightly exceeded expectations, as economists had projected a 0.2% increase month-over-month and a 4.3% year-over-year rise. Headline inflation, which includes all items, surged by 0.6% on a monthly basis and 3.7% on a yearly basis, in line with market expectations.

Despite the CPI data, it’s unlikely to alter the Federal Reserve’s approach at its upcoming policy meeting, scheduled to commence on September 19. Fed funds futures pricing data from Wednesday indicated a 97% probability that interest rates would remain unchanged next week, according to the CME FedWatch Tool.

Nevertheless, even if the central bank opts to keep rates steady this time, market volatility is expected to persist in the coming months. According to Fed funds futures pricing data, there’s approximately a 48% chance that rates will increase at the November meeting. Alex McGrath, Chief Investment Officer at NorthEnd Private Wealth, noted, “We believe volatility will be with us through year-end as the risk-on assets that dragged the market higher through 2023 will begin to look expensive in the face of elevated yields.”

Looking ahead, another critical inflation metric, the August Producer Price Index (PPI), is scheduled for release on Thursday. Economists polled by Dow Jones anticipate a 0.4% increase for August, following a surprising 0.3% rise in wholesale prices in July. Additionally, retail sales data is expected before the market opens.

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Mixed Sentiment Ahead of US CPI Keeps Asian Stock Market Trading Sideways

Mixed Sentiment Ahead of US CPI Keeps Asian Stock Market Trading Sideways

Asian stock markets are in a bit of a mixed situation right now, and people are waiting for some important information about the cost of things in the US, called the Consumer Price Index (CPI). The US Dollar is getting a bit more stable, not going up or down as much as before, and it’s around 104.55.

In China, their main stock index, the Shanghai Composite, has gone up a little bit, about 0.10%, to 3,145 points. Another index in China, called the Shenzhen Component, has gone up a bit more, by about 0.29%, to 10,411. But in South Korea, their stock market, known as the Kospi, has gone down a bit, about 0.50%. On the other hand, Japan’s stock market, the Nikkei, is doing better, going up by about 0.61%.

In China, the cost of things for people (we call it the Consumer Price Index or CPI) has gone up a tiny bit in August, by 0.1%. Before that, it was going down by 0.3%. This is a small sign that the economy might be getting more stable. The price of things for the month also went up as expected, by 0.3%.

In Japan, the Finance Minister, Shunichi Suzuki, thinks that the Bank of Japan (BOJ) will do things to make sure prices go up, and they will work closely with the government to do that. This is because the interest rates in Japan have gone up a lot, and people think the BOJ might change the rules about interest rates.

The head of the BOJ, Kazuo Ueda, has said that by the end of the year, they will have enough information to decide if they should keep the interest rates low or not. This makes things interesting for Japan’s money policy.

Next, everyone will be watching the US to see how much prices went up in August, which will be out on Wednesday. People expect that prices in the US went up by 0.5%, and a core number that is important for interest rates will stay at 0.2%. This tells us if the US might change their interest rates in the future. 

Also, we will look at China’s Retail Sales and Industrial Production numbers on Friday. These numbers are important because they show if China’s economy is healthy or not and if it will affect the world. So, people who invest in the stock market need to be careful and watch what happens in these markets because things might change quickly.

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Chinese Property Stocks Fail to Ease Growth Concerns, Bears Control Asian Stock Market

Chinese Property Stocks Fail to Ease Growth Concerns, Bears Control Asian Stock Market

The Asian stock market is not doing so well today. Even though China’s property stocks are getting better, the overall situation is not great. People who trade stocks are being careful because they saw big losses yesterday. They are also waiting for a report called the US ISM Services PMI.

A thing called the MSCI’s Index of Asia-Pacific shares (excluding Japan) has gone down by almost 1%. But in Japan, something called the Nikkei 225 has gone up by 0.75% in the morning.

Yesterday, a number for China’s Caixin Services PMI in August was not so good. It was 51.8, which is lower than the 54.1 from before. This made people worry about China’s economy. There is also a problem between the US and China, and the US Commerce Secretary talked about it. She said that the US will keep taxes on things from China until they look at it again in four years.

Some good things about the US have made the stock market not feel great. There was a report about US Factory Orders, and it was not good. People thought it would be -0.1%, but it was -2.1% for July. But if you don’t count some things, it went up by 0.8%. They also sent out more stuff, and they have more stuff in their stores now. Some people from the US Federal Reserve also talked about money stuff. One person said they want to be careful with money, and another person said they don’t want to make money cheaper.

Even though some news from China said they might help the real estate business, the stock market in China is not doing well. It’s like what’s happening in the US stock market and something called the S&P 500 Futures. The US Dollar is also strong, which means it’s worth a lot compared to other money. Gold and oil prices are not changing much. In New Zealand, Hong Kong, and India, stocks are not doing well either.

In Australia, the numbers looked better than people thought, but it didn’t make the stock market better. It went down by 0.80%.

In the future, what happens in the stock market will depend on what happens in China’s economy and how the US does. We need to watch carefully to see what will happen next.

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China concerns cause European shares to hit one-week low; attention now turns to PMIs

China concerns cause European shares to hit one-week low; attention now turns to PMIs

European stock markets took a bit of a tumble on Tuesday, dropping to their lowest point in a whole week. This was mostly because folks were getting worried about China’s economy not doing so great. See, if China’s economy isn’t doing well, it can affect the global economy, and that makes investors nervous. They’re afraid that a slow recovery in China might mean tough times for everyone else too.

One of the main stock market indicators in Europe, called the STOXX 600, went down by 0.6% on Tuesday. It was the fifth day in a row that it went down. The sectors in Europe that are closely connected to China, like the ones dealing with fancy stuff and building materials, were the ones taking the biggest hits. That’s because new data showed that China’s service industry, which includes things like restaurants and hotels, grew at a slower pace in August, the slowest it has been in eight months.

Later in the day, we were waiting for some news about how businesses in Europe were doing, and it didn’t look great. They were expected to confirm that business activity had actually gone down in August. This news caused some big companies like Roche to see their stock prices drop by 1.1%. Another bank called Credit Agricole saw a drop of 3.0% because Goldman Sachs said it was a good idea to sell their stock. Commerzbank, another bank in Germany, also had a tough time with a 3.3% drop because Barclays said it was a bit heavy on their stock, giving it an “underweight” rating.

So, in simple terms, European shares went down because people were worried about China’s economy, and they’re also keeping a close eye on what the European Central Bank might do with interest rates. Some big companies got hit too because of not-so-great business news. It’s a bit like a rollercoaster ride for the stock market right now, with ups and downs that can make investors feel a bit queasy.

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Mixed Performance in Asian Stock Markets Ahead of Key US PCE Data

Mixed Performance in Asian Stock Markets Ahead of Key US PCE Data

Asian stock markets are giving mixed results on Thursday as investors eagerly wait for the PCE Price Index. This index is an important way to measure how prices for things are going up, and the Federal Reserve likes to watch it. The index is coming out before the big Nonfarm Payrolls report for August. Right now, China’s Shanghai stock index has gone down by 0.60% to 3,117 points, the Shenzhen index has gone down by 0.44% to 10,416 points, Hong Kong’s Hang Seng index has gone down by 2.02% to 18,401 points, South Korea’s Kospi index has gone down by 0.43%, and Japan’s Nikkei index has gone up by 0.77%.

In China, people are worried because factories and services aren’t doing as well this month. This might make the government do things to help the economy, like giving it a boost. The National Bureau of Statistics (NBS) said that China’s Manufacturing Purchasing Managers’ Index (PMI) got a little better in August, but it’s still not as good as what people thought it would be. The NBS Services PMI also went down a bit. The People’s Bank of China (PBOC) said they’re going to give more money to private companies to help the private economy grow.

In Japan, the Bank of Japan (BoJ) said they want to wait longer before they start doing things to control the money supply. Retail Sales in Japan went up by 6.8% in July compared to last year, which is better than what people expected. But the production of things in factories, called Industrial Production, went down by 2.0% in July.

Later on Thursday, we’ll find out how much the economy of India grew in the first quarter of the year. People expect it to have grown by 7.7%, which is better than before.

Looking forward, people will pay attention to the US Core PCE Price Index, how many people are asking for jobless help, and the Chicago PMI later in the day. On Friday, people will watch how well factories are doing in China in August and how many jobs the US added.

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Dow Futures Up, Market Rally Continues; Jobs Data in Focus

Dow Futures Up, Market Rally Continues; Jobs Data in Focus

The positive momentum in Dow Jones futures ahead of Tuesday’s opening was mirrored by upward movement in S&P 500 futures and Nasdaq 100 futures during overnight trading, indicating a buoyant start to the trading session.

This week, the ongoing vigor of the market rally remains a focal point as investors turn their attention towards the eagerly awaited Friday jobs report, a pivotal event in the closing week of August. The implications of this report are far-reaching, potentially influencing expectations around interest rate shifts. A strong report wouldn’t necessarily translate to an imminent rate hike, while a less robust report, with payroll gains hovering around 100,000, could potentially take the possibility of a rate hike off the table. Simultaneously, market watchers are gearing up for the release of the Commerce Department’s data on personal income and spending for July, an influential indicator of inflation favored by the Federal Reserve, scheduled for Thursday.

In terms of earnings, Salesforce.com (CRM), a key player within the Dow Jones, is poised to disclose its second-quarter earnings on Wednesday. Notably, this leaves just Nike (NKE) and Walgreens (WBA) as the remaining components of the Dow Jones Industrial Average yet to announce their earnings reports.

In addition, several software companies are slated to release their earnings, including MongoDB (MDB), Nutanix (NTNX), Samsara (IOT), as well as security software entities such as CrowdStrike (CRWD) and Okta (OKTA).

Reflecting on the previous day’s market performance, the Dow Jones Industrial Average showcased a commendable 0.6% increase, while the S&P 500 and the Nasdaq Composite demonstrated gains of 0.6% and 0.8% respectively, indicating broad-based market positivity.

Major players in the technology sector exhibited noteworthy movement, with electric vehicle behemoth Tesla (TSLA) recording a modest 0.1% increase on Monday. Notably, Nvidia (NVDA) experienced a substantial rebound of 1.8%, reflecting renewed investor confidence. Meanwhile, prominent tech giants on the Dow Jones index, Apple (AAPL) and Microsoft (MSFT), both registered positive strides. Apple’s shares rose by 0.9%, and Microsoft’s shares climbed by 0.2%.

Further highlighting influential market leaders, Alphabet (GOOGL) and Meta Platforms (META) made noteworthy gains, with GOOGL’s stock increasing by 0.9% and Meta’s shares surging by 1.7%.

Among the stocks garnering attention within the ongoing market correction are Baker Hughes (BKR), Cadence Design Systems (CDNS), Fastly (FSLY), and Tidewater (TDW), alongside Dow Jones stalwarts IBM (IBM), Merck (MRK), and Visa (V), identified as pivotal stocks to watch during this period of market flux.

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Nvidia’s AI Success to Revive Nasdaq 100 After Challenging August

Nvidia’s AI Success to Revive Nasdaq 100 After Challenging August

Nvidia’s impressive achievements in the field of artificial intelligence (AI) are having a positive impact on the performance of stocks within the Nasdaq 100 index. Despite a rather challenging month of August, the dynamics changed dramatically thanks to Nvidia’s strong financial results. The company managed to exceed its own ambitious sales projections, and the driving force behind this success was the robust demand for AI-related products and services. Interestingly, this favorable development also had a ripple effect, benefiting other tech giants such as Advanced Micro Devices and Broadcom. Consequently, the future outlook for the Nasdaq 100 has become considerably brighter as a result of Nvidia’s accomplishments in the AI realm.

At the onset of August, concerns were mounting due to a perceived slump in the tech sector’s performance. However, Nvidia’s latest financial results have effectively dispelled these apprehensions and reinforced the belief that investing in AI is indeed a prudent choice. This affirmation carries significant weight as it aligns with the sentiment that investors have held towards tech stocks throughout the year.

Nvidia’s announcement that they are anticipating approximately $16 billion in revenue over the next three months comes as a surprise, especially when contrasted with the market experts’ initial estimate of around $12.5 billion. Furthermore, the company is actively pursuing a stock buyback initiative worth $25 billion, which signals a strong sense of confidence in their own prospects.

Despite a recent 4% decline in value, the Nasdaq 100 index is currently trading at roughly 24 times its projected earnings for the upcoming year. Although this figure has decreased from the 27 times multiple observed in July, it remains notably higher than the historical average of 21 times over the last decade. This suggests that investors continue to place a premium on the tech sector’s growth potential.

In a broader context, the encouraging performance of software companies such as Autodesk, Snowflake, and Splunk serves as additional evidence of the tech industry’s resilience and prosperity. Their positive post-market reports are indicative of a larger trend within the sector.

In conclusion, Nvidia’s accomplishments in the AI domain have not only rejuvenated the Nasdaq 100 index after a sluggish August but also solidified the notion that AI-focused investments hold substantial promise. The surge in Nvidia’s sales, alongside the impressive performance of other software giants, underlines the enduring strength of the tech industry, which is certainly a cause for optimism in the market.

 

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WTI Reclaims $81.50 on Saudi Arabia, Russia Supply Tightening

WTI Reclaims $81.50 on Saudi Arabia, Russia Supply Tightening

West Texas Intermediate (WTI) crude oil is currently experiencing a notable rebound, with prices hovering around $81.58. This is a substantial recovery from the weekly low of $74.45 registered last Thursday. The driving force behind this upward trend is primarily the strategic decisions made by Saudi Arabia and Russia regarding their respective oil outputs.

In an attempt to balance the global oil market, Saudi Arabia has opted to extend its voluntary cutback in oil production, retaining a reduced output of one million barrels per day through to September. In parallel, Russia has signaled its intent to curtail its oil exports by an estimated 300,000 barrels per day within the same period.

These calculated moves have already begun to reverberate across the global oil market. The US Energy Information Administration (EIA) reported a record drop of 17 million barrels in crude oil inventories. This dramatic decrease is largely due to increased refinery activity and robust crude export levels. Corroborating this trend, data from the American Petroleum Institute (API) also indicated a significant reduction in US crude oil stockpiles.

As these developments unfold, market participants are keeping a close watch on the imminent release of US wage inflation and employment data. These key economic indicators, due for release on Friday, could offer valuable insights into the Federal Reserve’s monetary policy trajectory for the remainder of the year. A hike in interest rates, for instance, could potentially slow down economic activity and reduce oil demand.

On a positive note, China’s Caixin Services PMI reported a rise to 54.1 in July, signaling a rebound in economic activity. Given China’s position as one of the world’s largest oil consumers, this improvement in economic conditions could provide a boost to WTI prices.

In the days ahead, the focus of the market will shift to the US Nonfarm Payrolls report. Expected to show an increase of roughly 180,000 jobs in July, this report carries considerable influence and could dictate trading opportunities around the WTI price.

In conclusion, the convergence of various factors – including the strategic output cuts by major oil producers, the release of pivotal economic data, and shifts in global demand patterns – promises to create an intriguing narrative in the WTI market. Investors and traders alike will be keenly observing these developments and their potential impact on oil prices.

 

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Worst Quarter for Metals Cap since 2008 due to Global Recession

Worst Quarter for Metals Cap since 2008 due to Global Recession

Base metals experienced their greatest quarterly decline since the global financial crisis of 2008 as worries about a worldwide recession increased and China’s economy very slowly recovered. Although the decrease has been accentuated by price spikes that month as a result of Russia’s invasion of Ukraine, the London Metal Exchange Index has fallen 25% since the end of March. Tin has fared the worst, falling 38%, followed by a 31% decline in aluminium and a 20% decline in copper. Since the beginning of the epidemic, it was the entire index’s first quarterly decrease.

According to ED&F Man analyst Edward Meir’s metals research, “markets have been battered by both growth and inflation worries for some time now and are not getting any relief from G-7 central bankers, the majority of which are set on rising interest rates further.” As virus controls were relaxed, an indicator of factory activity in China increased in June for the first time since February. Although there was some recovery, the demand for metals is still being negatively impacted by a sluggish real estate market. Despite a reduction of quarantine regulations, the Covid Zero policy is still in place, thus there is a persistent potential of more limitations if case numbers increase once more.

The market is still threatened by the impending possibility of a recession in the US and possibly elsewhere in the world. At the annual meeting of the European Central Bank in Portugal, Federal Reserve Chair Jerome Powell and other central bankers cautioned that the globe is transitioning to a regime of greater inflation. As a result, US equity markets opened lower. Major economies are at the very least on the verge of a slowdown that will reduce construction activity. The economy may be in worse shape than previously anticipated, according to new US consumer expenditure data, which also point to further high inflation and interest rate increases.

In London, copper fell 1.7 percent on Thursday. Zinc, nickel, and aluminum all had losses of 1%, 4%, and 6%, respectively. The price of gold for August delivery decreased 0.6 percent to $1,807.30 in New York. The price of gold fell by 7.5% in the second quarter.

 

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Oil declines 2% as fuel supplies and output rise in U.S.A

Oil declines 2% as fuel supplies and output rise in U.S.A

On Wednesday, oil prices fell by around 2% as concerns about a shortage of crude oil were somewhat offset by an increase in gasoline and distillate stocks in the United States and concerns about weaker global economic growth. Brent futures for August delivery decreased $1.72 or 1.5% to close at $116.26 per barrel. The more active September contract, which is due to expire on Thursday, was down $1.35 to $112.45. West Texas Intermediate crude for the United States declined $1.98, or 1.8%, to settle at $109.78 in August.

According to the Energy Information Administration (EIA), despite output reaching its highest level since April 2020 during the initial wave of the coronavirus pandemic, U.S. crude stockpiles decreased last week. As refiners increased production and reached 95 percent of capacity, the greatest level for this time of year in four years, fuel supplies increased.

“The market suffered as a result of the EIA report. The pressure is somewhat reduced by the increase in gasoline and distillate stockpiles, and the increase in U.S. output also contributed to the decrease in price “said John Kilduff, a partner at New York’s Again Capital LLC. U.S. gasoline and distillates futures fell by roughly 3% and 4% as a result of those unexpected inventory increases. Traders claimed that oil futures declined along with the cost of petrol.

The U.S. dollar’s increase to its highest level versus a basket of other currencies since reaching a 19-year high in mid-June added to the pressure on oil. Oil costs increase for buyers using other currencies when the dollar is stronger. On concerns about restricted supply brought on in part by Western sanctions on Russia, Brent and WTI rose by around 7% over the previous three sessions. According to a research note from JP Morgan, “we concluded there is no practical way to keep these barrels out of a market that was already very tight” given that about one-fifth of the world’s oil production capacity is currently subject to sanctions (Iran, Venezuela, Russia).

However, investors are also concerned that, as central banks raise interest rates to combat inflation, declining economies could reduce energy demand. According to Fed Chair Jerome Powell, the U.S. Federal Reserve will not allow the economy to enter a “higher inflation environment,” even if it means hiking interest rates to levels that endanger growth.

According to Ben van Beurden, chief executive officer of Shell PLC, uncertainty in the global oil and gas markets may last for some time because spare capacity is extremely low and demand is still recovering. On Wednesday, a series of two-day meetings between the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, known as OPEC+, got underway. According to insiders, it appears doubtful that a significant shift in policy will be made this month.

Analysts worry that Saudi Arabia and the United Arab Emirates (UAE) may not have sufficient spare capacity to replace lost Russian supply. This week, French President Emmanuel Macron claimed he had been informed that these companies would find it difficult to raise output even further. The UAE’s energy minister claimed that despite producing over 3 million barrels per day (bpd), the nation had some spare capacity above its 3.17 million bpd OPEC limit. Analysts also cautioned that political upheaval in Libya and Ecuador could further reduce supplies. The Black Sea Caspian Pipeline Consortium (CPC) terminal in Russia will start loading oil again on July 1 from its second single mooring position.

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Over the past 24 hours, crude oil prices increased while gold prices decreased

Over the past 24 hours, crude oil prices increased while gold prices decreased

Over the past 24 hours, gold prices have been trending marginally lower as crude oil prices managed to end the day positively. An increase in the US dollar, which resulted from risk aversion as the tech-heavy Nasdaq 100 fell more than 3 percent, put pressure on the anti-fiat yellow metal. For gold, it might have been a lot worse. The flight to safety caused Treasury yields to decline, which increased the appeal of XAU/USD.

In June, the US Conference Board’s consumer confidence index fell to 98.7 from 100 expected. This represents a decline from 103.2 in May and a 16-month low. Concerns about inflation keep eroding Americans’ perceptions of the economy. Although respondents appeared to be planning to buy more durable products in the future, their desire for leisure (travel) fell with rising prices.

Despite the deteriorating mood, the price of crude oil managed to hold steady. An OPEC+ delegate reported that the oil-producing coalition fell 2.7 million barrels per day short of its output goal in May. This might be restricting supplies and giving WTI an upward push. However, rising concerns about a slowdown in global growth have made the situation for energy prices more difficult.

Commodities will be watching a flood of central bank speech during the next 24 hours. At the ECB forum in Sintra, a panel discussion will take place. Fed Chair Jerome Powell and ECB President Christine Lagarde are scheduled to speak. Market mood may suffer if authorities restate their hawkish viewpoints, thereby depressing the price of gold and crude oil.

GOLD TECHNICAL ANALYSIS

Since May, the price of gold has been largely consolidating on the daily chart. Recent price movement is gradually dragging XAU/USD closer to the crucial support range of 1787 – 1810. The next test for the yellow metal will take place there. Technically speaking, the short-term 20- and 50-day Simple Moving Averages continue to indicate lower.

CRUDE OIL TECHNICAL ANALYSIS

Prices for crude oil are still recovering from last week’s losses. Since then, a bullish Morning Star has been verified, providing a technical tilt to the higher. Additionally, prices are attempting to close back above a crucial upward trendline from December. Such a result would strengthen the case for WTI’s potential upside. If not, losses would resume and the price would drop to its low point from May at 98.22.

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UAE claims it has no spare capacity, oil prices jump by 1%

UAE claims it has no spare capacity, oil prices jump by 1%

The energy minister of the United Arab Emirates stated that the country is producing near capacity, defying expectations that this could assist boost supply in a tight market. As a result, oil prices increased by nearly 1% in early Asian trade on Tuesday. According to some estimates, Saudi Arabia and the United Arab Emirates are the only two OPEC members with extra capacity to make up for lost Russian supplies and subpar performance from other members.

At 00:28 GMT, US West Texas Intermediate (WTI) crude CLc1 futures increased $1.07, or 1%, to $110.64 a barrel, building on a prior session rise of 1.8 percent. The price of Brent oil LCOc1 futures increased $1.08, or 0.9 percent, to $116.17 a barrel, following a prior session increase of 1.7 percent.

“The market was helped by rumours of a seam of restricted supply. According to reports, the capacity limits for two key producers, Saudi Arabia and the UAE, are being reached or will soon be reached “Tobin Gorey, a commodities analyst at Commonwealth Bank, stated in a note. According to its quota of 3.168 million barrels per day (bpd) under the deal with OPEC and its allies, collectively known as OPEC+, the UAE’s energy minister Suhail al-Mazrouei stated on Monday that the country was producing at or close to its full capacity.

His statements corroborated those of French President Emmanuel Macron, who told US President Joe Biden outside the Group of Seven meeting that Saudi Arabia could only increase output by 150,000 bpd, well below its nominal spare capacity of about 2 million bpd, and that the UAE was operating at maximum capacity. Analysts also noted that political upheaval in Libya and Ecuador could further constrain supply. Libya’s National Oil Corp said on Monday that if oil terminal production and shipping don’t pick up within the next three days, it may be necessary to declare force majeure in the Gulf of Sirte region.

According to Ecuador’s Energy Ministry, due to anti-government demonstrations, the nation may fully halt oil production over the next two days. Before the demonstrations, the former OPEC nation was producing about 520,000 barrels per day. These elements highlight market shortages, which have sparked a market recovery this week and countered recession-related price pressure over the previous two weeks. For oil prices to significantly and steadily decline, more barrels must enter the market, according to managing partner Stephen Innes of SPI Asset Management.

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Gold prices increase as ban on new Russian imports

Gold prices increase as ban on new Russian imports

Gold prices rose on Monday as speculation grew that some Western countries could formally forbid the import of the metal from Russia in response to that country’s invasion of Ukraine. By 0231 GMT, spot gold increased 0.5 percent to $1,835.58 per ounce. At $1,836.30, U.S. gold futures were up 0.3 percent. The G-7’s import embargo on Russian gold appears to be giving early Asian markets some short-term assistance.

“However, in practise for the grouping, it is largely a rubber stamp exercise, and I do not expect this to reflect a structural change in the supply/demand outlook that will underpin pricing.” In an effort to put more pressure on Moscow and eliminate its sources of funding for the invasion of Ukraine, four of the wealthy Group of Seven (G-7) countries decided to outlaw the import of Russian gold on Sunday. According to Stephen Innes, managing partner at SPI Asset Management, “the headline will be rapidly absorbed, and the market should return to its tug of war between higher front-end rates, negative for gold, and recession odds suggesting sooner rate reduction, positive for gold.”

Even as markets hailed economic data showing inflation expectations to be less worrying than initially thought, a couple of U.S. central bankers indicated on Friday they favoured future strong rate hikes to curb rapid price increases. Although gold is regarded as an inflation hedge, owning bullion, which pays no interest, has a higher opportunity cost as interest rates rise. Overall, gold is still stuck in the $1,780-$1,880 range that has been in place since early May. To change this dynamic, Halley added, the U.S. dollar must make a significant directional shift.

Spot silver increased 1.2 percent to $21.36 an ounce, platinum increased to $912 and palladium increased to $1,886.65 respectively.

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As the commodity markets drop, gold and silver decline

As the commodity markets drop, gold and silver decline

As the metals markets are participants in a general erosion of the commodity markets driven by crude oil, gold and silver prices are slightly lower in lunchtime U.S. trade on Thursday. Fears of a U.S. and worldwide economic crisis as well as predictions of decreased demand in the upcoming months, notably for metals, have negatively impacted the commodities markets. At $1,834.40, August gold futures were last down $3.80. Comex silver futures for July were last trading at $21.175 per ounce, down $0.251.

Overnight, the world’s stock markets were uneven, with European shares primarily declining and Asian equities primarily rising. At noon, U.S. market indices range from mixed to firmer. The market seems to have changed its attention from being more concerned with inflation to being more concerned with the U.S. and/or global economic recession. Worries that the U.S. economy may enter a recession in the coming months were not significantly reduced by Federal Reserve Chairman Powell’s remarks to a Senate panel on Wednesday. In light of the Federal Reserve’s aggressive tightening of its monetary policy, Powell stated that it will be difficult for the Fed to arrange a smooth landing for the American economy. On Thursday, Powell will address a U.S. House committee.

Nymex crude oil prices are lower and trading at $105.25 per barrel on the major outer markets today. In noon trade, the US dollar index is firmer. The 10-year U.S. Treasury note’s yield, which is at 3.05 percent, has decreased this week. Technically speaking, August gold futures bears currently hold the upper hand. The recent sideways and choppy trading action, however, at lower price levels, is pointing to a possible market bottom. The next upward price target for the bulls is to achieve a closing over strong resistance at the June high of $1,882.50. The next short-term downside price target for bears is to drive futures prices below strong technical resistance at $1,800.00. The highs of this past week ($1,850.30) and previous week ($1,861.50) serve as the first points of resistance. At this week’s low of $1,824.50 and then at $1,815.00, support is first seen.

Silver futures for July In the immediate term, bears have a clear technical advantage. The next upward price target for silver bulls is closing above strong technical resistance at the June high of $22.565 per ounce. The bears’ next downward price target is for prices to close below $20.42, which serves as strong support. The highs of today ($21.495) and last Wednesday ($21.675) are the first areas of resistance. The $21.00 mark and the $20.845 low from June serve as the next levels of support.

Today, July New York copper fell 1,755 points to close at 376.80 cents. Prices today touched a new 16-month low as they closed close to the session low. The overall near-term technical edge is clearly in favour of the copper bears. On the daily bar chart, there is an escalating three-week price downturn. The next upward price target for copper bulls is to raise prices over strong technical resistance at 400 cents and close above it. The bears’ next price target on the downside is for prices to close below strong technical support at 350 cents. 380 cents serves as the first point of resistance, followed by 390 cents. 375 cents serves as the first support, followed by 370 cents.

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EUR/USD Price Forecast

EUR/USD Price Forecast: Consolidating Below 1.0500 Amid Multi-Week High

The EUR/USD currency pair is having a hard time continuing its recent winning streak, trading in a tight range just below the 1.0500 psychological mark during the Asian session on Monday. In spite of the consolidation, the pair is still close to its three-week high of Friday, buoyed by a weaker US Dollar (USD).

Technically, the pair‘s location above the 38.2% Fibonacci retracement level of the November-January bear run, combined with upbeat oscillators on the daily chart, indicates that the bullish momentum is still intact. This leaves room for a potential rally towards the 1.0545-1.0555 resistance area, which coincides with the 50% Fibonacci retracement level and the 100-day Exponential Moving Average (EMA).

A successful breach above this crucial barrier may set the stage for additional gains, with EUR/USD potentially challenging the 1.0600 level. A break above this level may propel the pair towards the December 2024 swing high of 1.0630, close to the 61.8% Fibonacci retracement level. Further bullish momentum may continue to drive the rebound from its more than two-year low in January.

To the contrary, however, the 38.2% Fibonacci level of 1.0465 acts as an instant support level. A resolute breach through this area can drive selling momentum faster, pulling the pair towards the 1.0400 round number and down further into the mid-1.0300s (23.6% Fibonacci level). Failure to hold these levels could shift the bias in favor of bearish traders, potentially exposing the 1.0200 handle.

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EUR/USD Eases Near

EUR/USD Eases Near 1.0300 Ahead of Lagarde’s Speech

The EUR/USD pair edges lower to approximately 1.0310 during the Asian session on Monday, weighed down by a stronger US Dollar (USD). Market participants are focused on the upcoming Eurozone Sentix Investor Confidence data for February and a speech by European Central Bank (ECB) President Christine Lagarde later in the day.

On Friday, former US President Donald Trump announced plans to introduce reciprocal tariffs on multiple countries by Tuesday or Wednesday, though he did not specify which ones. This move has heightened concerns about a global trade war, fueling demand for the safe-haven USD.

“The immediate concern might not be inflation, as counter-effects like a demand slowdown could come into play. However, the bigger issue is uncertainty and the shift toward a more protectionist world,” said Charu Chanana, Chief Investment Strategist at Saxo.

Meanwhile, the Euro faces pressure from growing expectations of further ECB rate cuts amid sluggish economic growth. ECB Governing Council member Boris Vujcic stated that the market’s anticipation of three rate cuts this year is reasonable. However, he emphasized that greater clarity on monetary policy direction may not emerge until early in the second quarter.

Traders will keep a close eye on US trade policies, especially Trump’s repeated threats against Europe. JPMorgan economist Nora Szentivanyi noted that the objectives, timing, and tariff rates remain unclear. Nonetheless, the European Commission has stated it would retaliate firmly against any tariffs imposed by the US.

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

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

EUR/USD is trading lower around 1.0390 in the Asian session on Thursday, extending losses following a two-day recovery. Investors remain wary ahead of the release of Eurozone Retail Sales data later today.

Market predictions suggest that Eurozone retail sales scaled by 1.9% year on year in December, up from the previous 1.2% increase. However, the monthly number is expected to fall by 0.1%, erasing the 0.1% increase reported in November.

The euro remains under pressure as market sentiment points to further monetary easing by the European Central Bank (ECB). Policymakers feel optimistic that inflation will steadily return to the ECB’s 2% objective, lessening the need for additional tightening.

Meanwhile, the US Dollar Index (DXY), which tracks the dollar against six major currencies, has stabilized at 107.70, restricting EUR/USD’s upside potential. The dollar’s resiliency comes after a three-day losing skid, which puts pressure on the pair.

On Thursday, Federal Reserve Vice Chair Philip Jefferson reiterated his desire for keeping existing interest rates, underlining that the Fed’s policy remained restrictive despite the 100-basis-point drop. Meanwhile, San Francisco Federal Reserve President Mary Daly emphasized the central bank’s cautious attitude in the face of prolonged economic uncertainties.

The dollar weakened on Wednesday following a disappointing US Services PMI reading. The ISM Services PMI dropped to 52.8 in January from a revised 54.0 in December, falling short of the market consensus of 54.3. Looking ahead, traders are watching Friday’s US Nonfarm Payrolls (NFP) report, which might influence the Federal Reserve’s next policy actions.

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EUR/USD Stuck in Range Near 1.0375-1.0380 as Bulls Struggle for Direction

EUR/USD Struggles for Clear Direction, Stays Range-Bound Near 1.0375-1.0380

The EUR/USD pair continues in consolidation mode, failing to build on its recent recovery from the 1.0200 region—the lowest level since January 13. After reaching a weekly high earlier on Wednesday, the pair is fluctuating within a narrow range around 1.0375-1.0380, showing little change for the day amid mixed market signals.

Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) indicated a cooling U.S. labor market, reinforcing expectations of Federal Reserve (Fed) policy easing. Markets are now factoring in the likelihood of two rate cuts by the Fed this year. Risk-on sentiment also remains prevalent, but should continue to weigh on demand for the safe-haven USD, and thereby support EUR/USD.

Upside momentum, however remains constrained by issues on the introduction of U.S. tariffs over the goods to be imported in Europe under Trump’s administration, among others, and the ECB dovish direction which is being felt in restraining the Euro though HICP was reported higher to an annual rate of 2.5% in the last month, still, does not allow much upside in this pair.

Looking ahead, market participants will focus on the final Eurozone Services PMI release, while the U.S. economic calendar highlights the ADP private-sector employment report and the ISM Services PMI. Movements in the USD could also be influenced by key FOMC member speeches. Still, Friday’s NFP report will focus more attention on it as it will help deliver a better picture of the situation in the U.S. labor market and set the direction for future Fed policy.

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GBP/USD Holds Above 1.2400 as Markets Watch China Tariff Developments

GBP/USD Holds Above 1.2400 as Markets Watch China Tariff Developments

GBP/USD extends its gains for a second consecutive session, trading around 1.2430 during Asian market hours on Tuesday. With  the  decision   by   U.S. President Donald Trump   to pause tariffs on Mexico and Canada , the pair benefits from a risk-on sentiment .

Despite this, investors continue to pay close attention to ongoing trade negotiations, making market volatility a major concern. Trump declared that he would postpone imposing high tariffs on Canada and Mexico for at least 30 days following their agreements to send 10,000 troops to the U.S. border to fight drug trafficking.

This move follows Trump’s recent decision to impose 25% tariffs on Mexican and Canadian goods, along with a 10% tariff on Chinese imports. Additional tariffs on China are anticipated to go into effect Tuesday at 5:00 GMT. Trump managed to say that talks with Chinese officials might happen “probably over the next 24 hours,” and that tariffs on China would be “very, very substantial” if an agreement could not be made.

Meanwhile, the U.S. Dollar Index (DXY), which tracks the USD against six major currencies, hovers around 108.70 after erasing most of its gains from the previous session. Strong U.S. economic data could provide support for the greenback, as the ISM Manufacturing PMI climbed to 50.9 in January from 49.3 in December, surpassing the expected 49.8.

While GBP/USD may rise, the British Pound’s upside may be limited, given the expectation that the Bank of England (BoE) will cut interest rates once again. Despite rising wages in the UK, the BoE is expected to lower interest rates by 25 basis points to 4.5% on Thursday.

The BoE’s Monetary Policy Committee (MPC) is expected to vote 8-1 in favor of the rate cut, with one member likely advocating for maintaining rates at their current level for now.

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EUR/USD Drops to 1.0200 on Trump’s Trade Tariffs

EUR/USD Slumps to Multi-Week Low Near 1.0200 Amid Trump’s Trade Tariffs

The EUR/USD pair extends its decline on Monday, plunging to the 1.0200 region—a three-week low—during the early Asian session. This drop brings the pair closer to its lowest level in over two years, last seen in January, reinforcing the ongoing multi-month downtrend.

The US Dollar (USD) gains broad strength following President Donald Trump’s weekend announcement of new tariffs: 25% duties on imports from Canada and Mexico, along with an additional 10% tariff on Chinese goods. These measures escalate global trade tensions, dampening investor appetite for riskier assets and boosting demand for the safe-haven USD. As a result, the EUR/USD pair faces renewed selling pressure.

Adding to the bearish sentiment, Trump also declared on Friday evening that he would impose tariffs on goods from the European Union. This, coupled with the European Central Bank’s (ECB) dovish stance, further weighs on the euro. Last Thursday, the ECB cut borrowing costs by 25 basis points (bps) as expected and signaled the possibility of additional rate cuts before the year’s end, exacerbating the euro’s weakness.

The policy divergence between the ECB and the Federal Reserve (Fed) further tilts market sentiment in favor of the USD. While the Fed has opted for a hawkish pause, supporting the dollar’s strength, a recent pullback in US Treasury yields may limit further USD gains and offer some relief to the EUR/USD pair. However, the overall market outlook suggests that the pair’s downside momentum is likely to persist.

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EUR/USD Holds Above 1.0400 | Focus on Q4 GDP & ECB Policy Decision

EUR/USD Holds Above 1.0400 Ahead of Q4 GDP Data and ECB Policy Decision

The EUR/USD pair is edging higher after three consecutive losses, trading near 1.0420 during Thursday’s Asian session. The rebound is primarily driven by a technical pullback in the US Dollar (USD). Meanwhile, the US Dollar Index (DXY), which tracks the greenback against six major currencies, remains just below 108.00.

Despite the recent uptick, further gains for EUR/USD may be capped as the USD could regain strength following the Federal Reserve’s (Fed) cautious approach to monetary policy. The Fed reinforced its hawkish stance by removing language suggesting confidence in inflation reaching its 2% target.

During his press conference, Fed Chair Jerome Powell emphasized that any policy changes would require “real progress on inflation or some weakness in the labor market.” As expected, the Fed maintained its overnight borrowing rate at 4.25%-4.50% during its January meeting on Wednesday. This decision follows three consecutive rate cuts since September 2024, totaling a one-percentage-point reduction.

Meanwhile, the Euro faces downward pressure as the European Central Bank (ECB) is widely expected to cut interest rates by 25 basis points in its policy meeting on Thursday, lowering the Deposit Rate to 2.75%. Market sentiment suggests that further rate cuts from the ECB may follow in the coming months, potentially weighing on the Euro.

Investors will closely watch the release of fourth-quarter Gross Domestic Product (GDP) data from the Eurozone and Germany on Thursday. Later in the day, focus will shift to the US Annualized GDP report, which could influence market sentiment and currency movements.

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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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