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Gold Price Holds Gains Around $2,670, Supported by Softer Risk Sentiment

Gold Price Holds Gains Around $2,670, Supported by Softer Risk Sentiment

Gold Price Holds Gains Around $2,670, Supported by Softer Risk Sentiment

Gold (XAU/USD) continues to edge higher for the second consecutive day on Wednesday, extending its recent positive streak, reaching a one-and-a-half-week high around $2,670 during the Asian session. The ongoing geopolitical tensions in the Middle East are fueling a risk-off sentiment, which is providing support to the safe-haven appeal of gold.

Meanwhile, the US Dollar (USD) is consolidating near a two-month peak, offering limited movement in the gold market. However, growing expectations that the Federal Reserve (Fed) will ease its monetary policy less aggressively, with a likely 25 basis point rate cut in November, are keeping any major USD decline in check. This calls for caution before making aggressive bullish bets on the non-yielding precious metal.

Market Movers: Gold Underpinned by Multiple Factors, Lacks Strong Bullish Momentum

US Treasury bond yields fell for the second straight day on Tuesday, as weaker-than-expected manufacturing data and easing inflation concerns, aided by lower oil prices, boosted demand for gold. The New York Fed’s Empire State Manufacturing Index, which surged to a 29-month high in September, fell sharply to -11.9 in October, the weakest level since May, signaling worsening economic conditions.

Falling oil prices, due to lower supply disruption fears and weaker demand prospects, further ease inflationary pressures, creating room for the Fed to cut interest rates. However, markets are pricing in a higher chance of a smaller rate cut at the next FOMC meeting in November, which could strengthen the US Dollar and limit gold’s upside potential.

San Francisco Fed President Mary Daly remarked that significant progress has been made in controlling inflation, and she anticipates one or two more rate cuts this year if the economic outlook remains on track. Similarly, Atlanta Fed President Raphael Bostic commented that the US economy is performing well and recession risks remain low, with inflation expected to return to the Fed’s 2% target.

On the geopolitical front, Israeli Prime Minister Benjamin Netanyahu rejected calls for a ceasefire with Lebanon, while Hezbollah threatened to escalate its attacks, increasing the risk of a broader conflict. The Biden administration has urged Israel to allow more humanitarian aid into Gaza, warning of potential consequences, including halting US arms transfers.

This week, market attention will shift to key US economic data releases, including Monthly Retail Sales, Industrial Production, and Weekly Initial Jobless Claims, as well as China’s economic reports.

Technical Outlook: Gold Nears All-Time High, Bullish Potential Intact

Technically, gold’s next resistance is expected around the $2,685-$2,686 level, close to the all-time high reached in September. A decisive break above the $2,700 psychological level could pave the way for further gains, extending the multi-month uptrend supported by positive momentum indicators on the daily chart.

On the downside, immediate support lies near the $2,650 area, with the next key level around $2,630-$2,632. A further decline could attract buyers near the $2,600 level, which serves as a crucial pivot. A decisive break below this level might trigger technical selling and lead to deeper losses for gold.

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Japanese Yen Vulnerable Against USD, Hovers Near Lowest Levels Since Early August

Japanese Yen Vulnerable Against USD, Hovers Near Lowest Levels Since Early August

The Japanese Yen (JPY) continues to struggle, failing to hold onto modest gains from the Asian session against the US Dollar (USD), and remains near its lowest point since early August, touched on Monday. Investors are scaling back their expectations for further interest rate hikes by the Bank of Japan (BoJ) in 2024. This, combined with the prevailing risk-on sentiment in the markets, has diminished demand for the safe-haven JPY.

At the same time, expectations for a less aggressive monetary easing approach from the Federal Reserve (Fed) and predictions of a standard 25 basis point rate cut in November are keeping US Treasury yields elevated. This supports the USD, which hovers near a two-month high, limiting any gains for the lower-yielding JPY and pushing the USD/JPY pair back towards the 150.00 psychological level in the latest trading.

Market Highlights: Yen Struggles Amid Elevated US Bond Yields and Risk-On Sentiment

  • Japanese Prime Minister Shigeru Ishiba’s recent comments have dampened market expectations for further BoJ rate hikes in the near term.
  • US equity markets maintained their upward momentum on Monday, with the S&P 500 and Dow Jones Industrial Average reaching record highs amid optimism over strong corporate earnings.
  • The USD has strengthened significantly over the past two weeks, reaching its highest level since August 8 due to bets on smaller Fed rate cuts.
  • Minneapolis Fed President Neel Kashkari indicated that recent job data shows the labor market remains resilient, with future policy moves being data-dependent.
  • Fed Governor Christopher Waller suggested the central bank should proceed cautiously with rate cuts, especially in light of recent policy meetings.
  • According to the CME Group’s FedWatch Tool, markets are pricing in a strong likelihood of a 25 basis point rate cut in November, with over a 15% chance of no cut.
  • Rising US bond yields, particularly the 10-year Treasury yield, which recently exceeded the 4% mark, favor the USD and continue to pressure the low-yielding JPY.

Traders are now looking to the release of the Empire State Manufacturing Index and speeches from key Federal Open Market Committee (FOMC) members for further direction.

Technical Outlook: USD/JPY Approaching Key Levels

From a technical standpoint, any further decline in USD/JPY is expected to attract buying interest around the 149.00 level. This should help limit downside moves near the 148.55-148.50 support zone. A break below this area could lead to increased selling pressure, pushing the pair below the 148.00 mark and potentially toward last week’s low around 147.35-147.30.

On the upside, sustained strength above the key psychological level of 150.00 could trigger fresh buying interest. With daily chart oscillators holding in positive territory and not yet overbought, the USD/JPY pair could aim for the August swing high around 150.85-150.90. A move beyond 151.00 would suggest the pair has bottomed out, paving the way for further appreciation in the near term.

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Japanese Yen Consolidates Against USD | Near Lowest Level Since Early August

Japanese Yen Consolidates Against USD, Hovers Near Lowest Level Since Early August

Japanese Yen Consolidates Against USD, Hovers Near Lowest Level Since Early August

The Japanese Yen (JPY) continues its sideways consolidation against the US Dollar (USD), remaining near its lowest level since early August during Monday’s early European session. Comments from Japanese Prime Minister Shigeru Ishiba last week, which were critical of further monetary tightening, have dampened expectations for additional rate hikes by the Bank of Japan (BoJ). This, combined with a generally positive risk sentiment in global markets, has weakened demand for the safe-haven JPY.

Meanwhile, the USD holds steady near a two-month high reached last week, supported by expectations of less aggressive policy easing from the Federal Reserve (Fed). However, despite the strong USD, the Fed is still anticipated to lower interest rates by 25 basis points in November, contrasting with the BoJ’s likely continuation of its rate-hiking cycle. This divergence in policy is preventing traders from making fresh bullish bets on the USD/JPY pair.

Market Sentiment: Yen Traders Hesitate Amid Mixed Signals

The futures market indicates less than a 50% chance that the BoJ will raise rates by 10 basis points before year-end, following Prime Minister Ishiba’s dovish tone in early October. Additionally, Japan’s economic data, including a drop in real wages for the first time in three months and declining household spending, along with easing price pressures from raw material costs, raises doubts about how aggressively the BoJ will pursue further rate hikes.

Meanwhile, China’s finance ministry signaled potential increased debt issuance to support its domestic economy, but provided few details about stimulus plans. Despite this, investors remain optimistic that comprehensive measures will be introduced to stabilize key sectors, buoyed by the recent rally in US equity markets, which hit record highs last Friday.

In the US, September’s Producer Price Index (PPI) data revealed a 1.8% rise in the headline figure and a 2.8% increase in the core measure on a yearly basis, both slightly exceeding expectations. Combined with last week’s hotter-than-expected US consumer inflation data, this has reduced the likelihood of another large rate cut by the Fed in November, strengthening the USD. That said, the Fed is still expected to continue lowering rates due to signs of labor market weakness, while the BoJ remains on course to hike rates again by year-end, which limits the upside for the USD/JPY pair.

Technical Outlook: USD/JPY Positive Bias Holds Above 148.00

From a technical perspective, the USD/JPY pair recently broke through its 50-day Simple Moving Average (SMA) for the first time since mid-July and climbed above the 38.2% Fibonacci retracement level of its July-September decline. This breakout, along with positive signals from daily chart oscillators, suggests that the pair’s path of least resistance is to the upside. A move above last week’s high around the 149.55-149.60 region would confirm the bullish bias, potentially pushing prices towards the 150.00 psychological level, and possibly extending towards the 50% Fibonacci level near 150.75-150.80.

On the downside, any significant dip below the 149.00 mark is likely to attract buying interest around the 148.55 region, which should limit losses near 148.00. A decisive break below this level could trigger technical selling, dragging the pair toward intermediate support at 147.35 and potentially down to 147.00 or 146.50.

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Gold Price Holds Gains as USD Strength Limits Upside Ahead of US PPI Data

Gold Price Holds Intraday Gains, But USD Strength Limits Upside Ahead of US PPI Data

Gold Price Holds Intraday Gains, But USD Strength Limits Upside Ahead of US PPI Data

Gold (XAU/USD) has retreated slightly from a three-day high, trading around the $2,640 level during early European hours on Friday. Despite the dip, the precious metal remains up over 0.40% for the day. A rise in U.S. weekly jobless claims signals some weakness in the labor market, which could allow the Federal Reserve (Fed) to continue cutting interest rates. This has led to a modest drop in U.S. Treasury yields and a softer risk sentiment, supporting gold prices for the second consecutive day.

However, stronger-than-expected U.S. consumer inflation data on Thursday reduced expectations of a significant rate cut by the Fed in November. This has supported the U.S. dollar, halting its recent pullback and creating headwinds for gold’s upward momentum. Traders are now focusing on the upcoming U.S. Producer Price Index (PPI), along with the Preliminary Michigan Consumer Sentiment Index and inflation expectations, for short-term direction.

Key Market Drivers: Gold Holds Steady Ahead of US PPI

  • US Inflation Data: The Labor Department reported on Thursday that the headline Consumer Price Index rose 2.4% year-over-year through September, while core inflation, excluding food and energy, climbed 3.3%. This stronger inflation data fueled speculation that the Fed will slow the pace of future rate cuts, boosting the U.S. dollar to near two-month highs, though the initial reaction faded.
  • Labor Market Weakness: U.S. weekly jobless claims rose by 33,000 to a seasonally adjusted 258,000, higher than the 230,000 expected, indicating some softening in the labor market. As the Fed shifts focus toward maximum sustainable employment, this mixed data suggests continued rate cuts, potentially supporting gold prices.
  • Treasury Yields and USD Strength: Despite the jobless claims data, the 10-year U.S. Treasury yield remains above 4%, bolstering the U.S. dollar and capping further gains for gold.
  • China’s Stimulus Measures: China’s finance ministry is expected to release details of fiscal stimulus measures, which could support risk sentiment and limit any significant upside for gold in the short term.

Looking ahead, traders will be closely watching the release of the U.S. PPI data, which is expected to impact USD demand and create trading opportunities for gold heading into the weekend.

Technical Outlook: Gold Poised for Further Gains

From a technical perspective, the recent rebound from near the $2,600 level and the move above the $2,630 support-turned-resistance zone favor bullish traders. The daily chart oscillators remain in positive territory, suggesting that gold may continue to rise toward the $2,657-$2,658 resistance area, with the $2,670-$2,672 supply zone as the next target. If momentum continues, gold could test its all-time high around $2,685-$2,686, with the $2,700 level serving as a key psychological resistance.

On the downside, the $2,630-$2,628 region now acts as immediate support, with a break below this level potentially opening the door for a test of the pivotal $2,600 mark. A sustained drop below $2,600 could trigger deeper losses, with the next key support at $2,560, followed by $2,535-$2,530, and eventually $2,500.

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Gold Price Recovers from Multi-Week Low, but Upside Potential Remains Limited Ahead of US CPI

Gold Price Recovers from Multi-Week Low, but Upside Potential Remains Limited Ahead of US CPI

Gold Price Recovers from Multi-Week Low, but Upside Potential Remains Limited Ahead of US CPI

Gold (XAU/USD) is experiencing a modest rebound on Thursday, recovering from a six-day losing streak that pushed prices to a near three-week low, around the $2,605-$2,604 range. This intraday uptick is likely due to repositioning ahead of the crucial US Consumer Price Index (CPI) report, which could shape expectations about the Federal Reserve’s (Fed) rate cut decisions and impact demand for the non-yielding metal.

At the same time, widespread market belief that the Fed will lower rates by 25 basis points in November has kept the 10-year U.S. Treasury yield above the 4% mark, boosting the U.S. Dollar (USD) to an eight-week high. This is a headwind for gold, which may limit any substantial upside. Traders are cautious, waiting for a stronger follow-through in the market before assuming that the recent corrective decline from gold’s all-time peak has concluded.

Market Factors Limiting Gold’s Upside: Strong USD and Moderate Fed Easing

The minutes from the September Federal Open Market Committee (FOMC) meeting showed a majority favored a 50 bps rate cut, confident in achieving a 2% inflation target. Some committee members, however, pushed for only a 25 bps reduction, citing still-elevated inflation and strong economic growth. There was a consensus that this large cut would not determine the pace of future reductions, which helped push the USD to a two-month high.

Additionally, key Fed officials expressed a more cautious stance on aggressive easing. Dallas Fed President Lorie Logan mentioned uncertainties in the economic outlook, while Boston Fed President Susan Collins emphasized that policy will remain data-driven. San Francisco Fed President Mary Daly hinted at more rate cuts but noted that the September decision does not indicate the size of future cuts.

Current market pricing shows a greater likelihood of a 25 bps rate cut in November and a more than 20% chance that rates will be left unchanged.

Safe-Haven Demand Supports Gold Amid Geopolitical Risks

Geopolitical tensions, particularly between Israel and Iran, are contributing to safe-haven demand for gold. Israeli Defense Minister Yoav Gallant recently warned of a potential strike against Iran, which could increase market volatility and lend further support to gold. However, traders are likely holding off on aggressive positioning until after the release of the US inflation data.

Technical Outlook: Bearish Bias with Limited Upside

From a technical perspective, the recent breakdown below the $2,630 support level signals a bearish outlook for gold. The daily chart oscillators remain in positive territory, but the metal has yet to sustain a break below the critical $2,600 level, making traders cautious about deeper losses.

If the price decisively breaks below $2,600, the next support levels to watch are $2,560, followed by the $2,535-$2,530 zone, with the $2,500 psychological level acting as a major downside target.

On the flip side, the $2,630-$2,635 range now serves as an immediate resistance level. Any upward movement is expected to face selling pressure around the $2,657-$2,658 barrier, with a sustained rally above this level possibly pushing gold toward the $2,670-$2,672 zone. A move beyond this point could challenge the all-time high near $2,685-$2,686, with a break above $2,700 setting the stage for further gains in the long-term uptrend.

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New Zealand Dollar Hits Seven-Week Low After RBNZ Cuts Interest Rate by 50 bps

New Zealand Dollar Hits Seven-Week Low After RBNZ Cuts Interest Rate by 50 bps

New Zealand Dollar Hits Seven-Week Low After RBNZ Cuts Interest Rate by 50 bps

The New Zealand Dollar (NZD) has dropped to its lowest level since mid-August, following the Reserve Bank of New Zealand’s (RBNZ) decision to cut the Official Cash Rate (OCR) by 50 basis points, lowering it from 5.25% to 4.75% at the October meeting. As anticipated, the move led to immediate selling pressure on the Kiwi. Additionally, the lack of new stimulus measures from Chinese officials has added to the NZD’s decline, as China remains a major trading partner for New Zealand.

Looking ahead, market participants will focus on the Federal Open Market Committee (FOMC) Minutes release later on Wednesday, followed by Thursday’s US Consumer Price Index (CPI) data for September. If inflation comes in softer than expected, it could weigh on the USD and provide some relief for the NZD/USD pair.

Market Movers: New Zealand Dollar Remains Weak Post-RBNZ Decision

The RBNZ’s Monetary Policy Statement (MPS) indicated that the annual consumer price inflation is within the target range of 1-3%. The decision to cut the OCR by 50 basis points aims to maintain low and stable inflation while avoiding instability in output, employment, interest rates, and exchange rates.

In the US, Federal Reserve Vice Chair Philip Jefferson noted that the Fed’s September 50 bps rate cut aimed to support the labor market while inflation eases. However, despite progress, inflation has not yet met target levels, according to Atlanta Fed President Raphael Bostic. New York Fed President John Williams also backed the recent rate cuts, signaling the possibility of additional cuts later this year.

Technical Analysis: NZD/USD Faces Downward Pressure

The New Zealand Dollar remains under pressure, continuing its downtrend against the US Dollar. The pair has fallen below the key 100-day Exponential Moving Average (EMA) and is nearing a break below the ascending trend channel on the daily chart. This bearish momentum is supported by the 14-day Relative Strength Index (RSI), which is sitting below the midline at 41.10, favoring sellers in the short term.

A decisive break below the lower boundary of the trend channel at 0.6135 could open the door to the 0.6000 psychological level. If the pair sustains trading below this level, it could test 0.5974, the low from August 15.

On the upside, immediate resistance is seen at the 100-day EMA, around 0.6142. If the NZD/USD pair can push higher, it may target 0.6254, the high from September 6. Further gains could aim for the round figure of 0.6300, with the upper limit of the trend channel at 0.6365.

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Australian Dollar Slips as China Holds Back on Major Stimulus Measures

Australian Dollar Slips as China Holds Back on Major Stimulus Measures

Australian Dollar Slips as China Holds Back on Major Stimulus Measures

The Australian Dollar (AUD) extended its decline on Tuesday, pressured by comments from the National Development and Reform Commission (NDRC) of China. During a press conference, China’s state planner acknowledged that the country’s economy is facing increasingly complex internal and external challenges. The lack of additional major stimulus from Chinese officials disappointed traders. Furthermore, the broader risk-off sentiment, fueled by escalating geopolitical tensions in the Middle East, contributed to selling pressure on risk-sensitive assets like the AUD.

Despite the downward movement, the Australian Dollar’s losses could be limited due to the Reserve Bank of Australia’s (RBA) hawkish stance, as reflected in the September Meeting Minutes. Investors now await remarks from Federal Reserve officials later on Tuesday, looking for guidance ahead of the Federal Open Market Committee (FOMC) Minutes. The focus will shift to the release of the US Consumer Price Index (CPI) for September, due on Thursday, for further clues on the US economic outlook.

Daily Market Movers: Australian Dollar Loses Ground After China’s NDRC Conference

The RBA’s September Meeting Minutes, released on Tuesday, revealed discussions among board members on possible future rate adjustments. The minutes emphasized that policy would need to remain restrictive until inflation is consistently moving toward the target range. RBA Deputy Governor Andrew Hauser stated that lowering inflation remains a priority, and the task is not yet complete.

Meanwhile, in the US, St. Louis Fed President Alberto Musalem expressed support for additional interest rate cuts, noting that economic performance will shape monetary policy. Similarly, Minneapolis Fed President Neel Kashkari backed a 50-basis-point rate cut, highlighting that the risks have shifted from high inflation toward higher unemployment. According to the CME FedWatch Tool, the probability of a 25-basis-point Fed rate cut in November has surged to 85%, up from 31.1% last week.

Technical Analysis: AUD/USD Remains Bullish in the Long Term

Despite recent setbacks, the AUD/USD pair is attempting a rebound. On the daily chart, the pair remains within the lower boundary of its ascending trend channel, maintaining a bullish bias as it stays supported above the 100-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) is below the midline at 47.0, suggesting potential for further consolidation or downside movement.

Initial support for the AUD/USD pair lies at 0.6735, the lower limit of the trend channel. A break below this level could trigger bearish momentum, pushing the pair toward the psychological level of 0.6700, with further downside potential at 0.6622, the low of September 11.

On the upside, resistance is first seen at 0.6823, the high from August 29. If the pair extends its gains, it could target 0.6942, the high from September 30. A decisive break above this level could attract more buyers, lifting AUD/USD toward the upper boundary of the trend channel at 0.6980.

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Hopes of Interest Rate Peak Propel European Stocks Higher

Hopes of Interest Rate Peak Propel European Stocks Higher

Optimism over a possible peak in interest rates has given European stocks a slight boost. On Tuesday, minor gains were noted across the European stock market due to traders’ anticipation that central banks would avoid triggering a recession by excessively hiking interest rates in their effort to combat inflation. In particular, Europe’s Stoxx 600 saw an increase of 0.2%, while France’s Cac 40 and Germany’s Dax each rose by 0.1%. It’s worth noting that these gains occurred amidst relatively low trading volumes, given that US markets were closed for the Independence Day holiday.

The Asian markets followed a similar trend. Stocks in this region rose after the Reserve Bank of Australia decided to maintain its interest rates at 4.1%. The bank is currently monitoring the effects of its previous rate increases on the economy. This decision was driven by a quicker-than-anticipated drop in the country’s annual inflation rate, which fell from 6.8 per cent to a 13-month low of 5.6% in May. This news provided some relief to investors who feared central banks might tighten their monetary policy too much in an attempt to curb ongoing price pressures.

Reacting to this news, Australia’s S&P/ASX 200 stock index rose by 0.5%, China’s CSI 300 grew by 0.2%, and Hong Kong’s Hang Seng increased by 0.6%. Japan’s Topix, however, bucked the regional trend and declined by 0.6%.

In other developments, oil prices experienced a surge on Tuesday after Saudi Arabia and Russia, two of the world’s largest producers, announced plans to cut supply in August. Consequently, Brent crude, the international benchmark, rose by 0.8% to trade at $75.27 per barrel, while the US marker West Texas Intermediate climbed by 0.9% to $70.42.

The German economy has also been in the spotlight recently. Germany’s Dax suffered significant losses in the energy and basic materials sectors, resulting in a 0.5% dip in the Stoxx 600 Basic Resources index. Additionally, new data released on Tuesday showed a 0.1% reduction in German exports in May, as high-interest rates continue to impact the country’s main trading partners. This decrease fell significantly short of the expected 0.3% rise projected by analysts.

As we move forward, investors will be keeping a close eye on upcoming economic data. The US employment report due on Friday is particularly anticipated, as it may offer insight into the Federal Reserve’s next policy move.

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Gold Prices Under Pressure as Stronger USD Weighs Ahead of Fed Decision

Nikkei Paces Asia in Market Gains, China Trails

Nikkei Paces Asia in Market Gains, China Trails

Asian stock markets kicked off the week on a positive note, with Japan’s Nikkei Index spearheading the gains while China trailed. The surge in demand for tech stocks fuelled Japan’s market, as investors prepared for a week filled with data that will offer vital insights into the health of the Chinese economy and the direction of U.S. interest rates.

China experienced a dip in factory activity in June, as reflected by the Caixin manufacturing survey, which fell to 50.5 from 50.9 in May. Although this was slightly better than the anticipated market figure of 50.2, it underscored the ongoing weakening trend reflected in other surveys.

In light of this, China’s central bank, the People’s Bank of China, has promised more “forceful” actions to strengthen the economy. This decision comes at a crucial juncture when the country is expected to introduce a new central bank leader and its blue-chip index (.CSI300) lost 5% in the last quarter, even as most of the developed world witnessed a rally.

ANZ analysts caution that efforts to stimulate an economy amidst a significant property downturn, high sector debt, and a dwindling population could be challenging, citing Japan’s struggles in the 1990s as an example.

On the other hand, Japan’s Nikkei (.N225) index recorded nearly 20% growth in the previous quarter, buoyed by expectations that Japanese firms could step in to fill gaps created by the Sino-US decoupling, and a weakened yen. The index registered another 1.7% rise on Monday, inching towards 30-year highs.

According to a Bank of Japan survey, business sentiment improved in Q2, driven by easing supply restrictions and the lifting of pandemic-related measures, leading to enhanced factory output and demand.

However, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose by just 1.2%, still lagging behind Japan’s performance. EUROSTOXX 50 futures and FTSE futures each rose by 0.4%. S&P 500 futures and Nasdaq futures remained steady, ahead of the July 4 holiday, after recording over 6% growth in June.

The tech sector, already riding high, could receive an additional boost from Tesla’s (TSLA.O) record delivery of 466,000 vehicles in Q2, exceeding market estimates of around 445,000. This follows Apple’s (AAPL.O) achievement of crossing a $3 trillion valuation for the first time, contributing to Nasdaq’s best quarter in four decades.

BofA analysts noted that the market value of the seven largest tech companies has soared by $4.1 trillion this year, with Apple, Microsoft (MSFT.O), and Alphabet (GOOGL.O) now worth more than all emerging markets combined.

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

Dow futures are indicating a downward trend

Dow futures are indicating a downward trend

During the evening trading session on Thursday, U.S. stock futures exhibited a varied performance, following a predominantly positive session for major benchmark averages. This optimistic sentiment was spurred by GDP data that outstripped expectations, thereby bolstering investor confidence. Furthermore, banks saw an upswing after the Federal Reserve announced that all 23 institutions featured in its annual stress test were sufficiently capitalized to endure a severe recession.

By 18:45 ET (22:45 GMT), Dow Jones futures were showing signs of a downward shift, marking a slight dip of 0.1%. In contrast, S&P 500 futures and Nasdaq 100 futures remained stable, indicating no significant changes in these indices’ projected opening levels.

In the wake of extended trading hours, shares of Nike (NYSE:NKE) experienced a 4.3% drop. This decline was triggered by the company’s Q4 earnings per share (EPS) of $0.66, which fell $0.02 short of the analyst estimate of $0.68. Despite this, the company’s revenue reached $12.8 billion, surpassing the anticipated figure of $12.58 billion.

Conversely, Accolade (NASDAQ:ACCD) witnessed a notable surge of 15.4% during after-hours trading. This increase followed their Q1 report, which revealed losses of $0.52 per share, outperforming the expected losses of $0.62 per share. The company also reported revenue of $93.2 million, exceeding the forecasted figure of $90.27 million.

As we look forward to Friday’s trading session, market participants will be keenly observing new data on the PCE price index, personal income and spending, as well as the Michigan consumer sentiment and expectation surveys. These indicators will offer crucial insights into the health of the U.S. economy and could steer the direction of the stock market.

During regular trading on Thursday, the Dow Jones Industrial Average rose by 269.8 points or 0.8%, closing at 34,122.4. Similarly, the S&P 500 climbed by 19.6 points or 0.5% to 4,396.4. However, the Nasdaq Composite wrapped up the day virtually unchanged at 13,591.3.

From a fixed income standpoint, the yield on the United States 10-Year Treasury note was pegged at 3.848%. Given that bond yields move inversely to prices, this level of yield suggests that investors are bracing for a rise in interest rates, which could exert further pressure on the stock market.

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Dow Jones Versus the Nasdaq 100 Amid Rising Government Bond Yields

Dow Jones Versus the Nasdaq 100 Amid Rising Government Bond Yields

The blue-chip-oriented Dow Jones gained cautiously on Wednesday while the tech-heavy Nasdaq 100 sank 1.75% in the worst single-day drop since April 25th. In fact, the Nasdaq/Dow ratio plunged 2.02%, marking the worst 24-hour period since October 27th, which was over 7 months ago. What explains this divergent dynamic and is it a concern for sentiment going forward?

Tech’s underperformance coincided with a strong day for developed countries’ 10-year government bond yields. An average of key nations (such as the United States, Canada, and Australia) soared 3.78% on Wednesday. That was the best single-day gain since December 20th. As we were reminded last year, growth-oriented companies face increasingly difficult challenges in a rising rate climate.

The surge in government bond yields follows two key events that are related: unexpected interest rate hikes from the Reserve Bank of Australia and Bank of Canada. The former was earlier this week while the latter occurred over the past 24 hours. These events served as not just a reminder that the fight against inflation is not done, but that other major central banks, such as the Fed, could yet follow.

With that in mind, the mostly pessimistic sentiment tone set by Wall Street leaves the door open to follow-through during Thursday’s Asia-Pacific trading session. That could place regional indices, such as Australia’s ASX 200 and Hong Kong’s Hang Seng Index vulnerable. Sentiment may thus remain in the driver’s seat given a light economic docket over the remaining 24 hours.

Nasdaq 100 Technical Analysis

On the daily chart, the Nasdaq 100 has fallen back to the 100% Fibonacci extension level at 14271. The index remains in a clear uptrend, with the 20-day Simple Moving Average and January trendline guiding prices higher. Reversing the uptrend would thus require meaningful follow-through lower from here. Key resistance is the 123.6% level at 14852 before 15768 comes into focus.

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FOMO Regime Change for US Stock Market

FOMO Regime Change for US Stock Market

The laggards, Dow Jones Industrial Average & Russell 2000 have recorded stellar single-day outperformances on Friday, 2 June against the Nasdaq 100; at least a three-month high.

Market breadth has improved but fundamental structure remains weak due to stagflation risk.

Positive FOMO (“fear of missing out”) flows may persist at least in the short to medium term due to relatively low levels of positioning, exposure, and sentiment.

On Friday, 2 June, we witnessed a significant flow of rotation among the benchmark US stock indices ahead of the key 16 June “Triple Witching” US options expiration; prior laggards, the Dow Jones Industrial Average and Russell 2000 have recorded one of the best single day outperformance in at least three months against the leading mega-cap tech & AI concentrated Nasdaq 100.

The ongoing medium-term uptrend of the Nasdaq 100 started on 13 October 2022, outperforming the Dow Jones Industrial Average and Russell 2000 in the past seven months. Interestingly, the Dow Jones Industrial Average / Nasdaq 1000 ratio recorded its strongest single-day performance on Friday since 3 Feb 2023 (1.38) while the Russell 2000 / Nasdaq 1000 ratio notched its strongest single-day performance since 26 October 2022 (2.81) supported by strong rallies seen in cyclical, industrial and banking stocks such as 3M (+8.7%), Caterpillar (+8.4%) and US regional banks (KRE ETF +6.2%) on Friday.

On the surface, these positive observations can be considered as an improvement in market breadth as rotation is being spread from the high-flying eight mega-cap tech stocks (FAANG plus MNT; Facebook/Meta, Apple, Amazon, Netflix, Google/Alphabet, Microsoft, Nvidia, and Tesla) that are leading the rally since late October 2022 towards the cyclical laggards.

A higher cost of funding environment cannot be ruled out

However, a higher cost of funding environment amid a lingering risk of stagflation may put a damper on earnings growth. The 10-year US Treasury yield has recovered above its 200-day moving ex-post US debt ceiling deal and is looking for a test on a key resistance at 3.90% with positive momentum.

The leading inverted US Treasury yield curve is pointing to a potential imminent global recession

In addition, we cannot rule out an impending global recession as the leading US Treasury yield curve, the difference between the 10-year and 2-year is now at -0.81%; it’s the most inverted state in almost 42 years.

However, in a nutshell, the trend is always your friend until its ends so do not be surprised by such positive FOMO irrational behavior that can persist in the short to medium-term time horizons which in turn may take the US stock market higher due to a relatively low level of positioning, exposure, and sentiment since the start of the year.

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Dollar Index Looks Unstoppable now

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Dollar Index Looks Unstoppable now

On Friday afternoon the new highs rose to 107.6, on the start of European trading session it went 107.45. Since Oct 2002 this was the highest rate and the index added around 20% to its 2021 low.

This is a positive secondary effect for the US(strengthening of dollar), reducing inflationary pressures through imports to ending the talk of dollar weakness that has been prevalent since late 2020.

Central bankers are not welcome too sharp fluctuations in any direction, however they are ignoring the exchange rate against any other currency.

Dollar got a little attention of appreciation by Fed, but it good to be prepared for the change in coming days and weeks to avoid the cause of any uncontrolled rise in dollar, which be devastating.

Fed has begun selling assets off its balance sheet, reducing it by $42.5B. The ECB stopped net buying in July, but active Fed like selling in the matter of uncertainty.

The strengthening of dollar looks controlled so far. But still, after the substantial rise to multi-year highs, markets could start a wave of movement from Europe and Asia, underpinned by the news and current exchange movements. The current market reached a point where it can move in one way. In such a case it is hard to talk about any levels could be the real turning point.[/vc_column_text][/vc_column][/vc_row]

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In the first half, US stocks fell by the most since more than 50 years

In the first half, US stocks fell by the most since more than 50 years

The first half of the year for US stocks was the worst in more than 50 years as a result of a collapse that was started by the Federal Reserve’s attempt to stop persistent inflation and accelerated by growing fears about global growth. The S&P 500 dropped 0.9% on Thursday, bringing the blue-chip index’s decline in the first half of 2022 to 20.6%. Since 1970, when stocks fell as a result of a recession that put a stop to the longest stretch of economic development in American history, Wall Street stocks have not had a year’s start as severe.

According to Bloomberg data on the S&P 1500 index, a larger measure that encompasses small, mid, and large-cap groups, the decline in US stocks has wiped out more than $9 trillion in market value since the end of 2021. The likelihood of recessions in the US and Europe is the dominant market concern, according to Bastien Drut, strategist at Paris-based asset manager CPR. The days of being able to rely on central banks loosening monetary policy to assist economic development are “gone,” he continued, describing the situation as “extremely gloomy.”

The NASDAQ Composite, which is heavily weighted toward technology, has also fallen this year; on Thursday, it lost 1.3%, bringing its losses for the year to roughly 30%.Except for energy stocks, which are up 29% over the past six months, every sector of the S&P 500 has declined. The equities in consumer discretionary companies have dropped the greatest, by 33%. Utility equities, which are viewed as inflation hedge since businesses are better able to pass on increasing costs to customers, have suffered the least this year, down just 2%.

Paul Leech, co-head of global equities at Barclays, claimed that “everything has been highly inflation-driven.” It has been the recurring theme of the year and has truly just gotten worse. Large stock indices have dropped significantly all throughout the world. The Stoxx 600 index for Europe fell 1.5% on Thursday, bringing its yearly loss to almost 17%. In terms of dollars, the MSCI index of the Asia-Pacific markets has fallen 18% in 2022.

Leading policymakers cautioned that the period of low interest rates and moderate inflation had ended following the inflation shock brought on by Russia’s invasion of Ukraine and the coronavirus epidemic on Wednesday at the European Central Bank’s annual conference. Fed Chair Jay Powell has cautioned that the US may experience substantial and frequent price increases that policymakers may find difficult to control if the central bank does not swiftly boost interest rates high enough to combat inflation. The most pain would come from neglecting to confront this high inflation and allowing it to become entrenched, he continued.

Interest rate increases from the Fed and Bank of England have alarmed the markets this month. The Fed increased the federal funds rate by 0.75 percentage points to a new target range of 1.5 to 1.75 percent, and officials have hinted at another significant rate increase for next month. For the first time since 2011, the ECB is also planning a July quarter-point increase.

According to Scott Chronert, US equities analyst at Citigroup, “stubborn inflation readings have provoked an increasingly hawkish Fed response, pushing the policy focus to battle inflation despite potential economic consequences.” Investors are understandably reluctant to purchase due to the Fed’s continuous rate hikes and their concern over resetting earnings expectations. On Wednesday, Citi decreased its S&P 500 year-end projection from 4,700 to 4,200 points. Although the new aim would represent an increase of about 11% above the benchmark’s current level, bank experts also put the likelihood of a worldwide recession at 50%.

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

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

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

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

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

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

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

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

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Gold Price Climbs Steadily

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

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

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

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

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

Trump’s Tariff Announcement Sparks Market Uncertainty

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

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

Fed Policymakers Express Caution Amid Economic Uncertainty

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

Several Fed officials have weighed in on economic policy:

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

What’s Next for Gold?

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

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Gold Price Rally Holds Strong, But Overbought Conditions Raise Caution

Gold Price Bulls Hold Firm, But Overbought Conditions Suggest Caution

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

 

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

Gold Bulls Retain Control Amid US-China Trade Tensions

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

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

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

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

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

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

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

US Tariff Delay Weighs on Oil Prices

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

OPEC+ Stands Firm on Production Policy

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

Key Technical Levels to Watch

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

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Gold Holds Below $2,800 Despite Intraday Recovery

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

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

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

Technical Outlook: Gold’s Uptrend Intact Despite Intraday Pullback

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

 

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

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

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

Market Drivers to Watch

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

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

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

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

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

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

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

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

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

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

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

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WTI Drops Toward

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

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

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

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

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

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

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Japan's Land Prices Rise at Fastest Pace Since

Japan’s Land Prices Rise at Fastest Pace Since 2010, Tax Agency Reports

Japan’s Land Prices Rise at Fastest Pace Since 2010, Tax Agency Reports

In 2023, Japan’s land prices experienced their fastest rise since comparable data became available in 2010, as reported by the National Tax Agency on Monday. This increase highlights a robust recovery, driven in part by a resurgence in tourism following the coronavirus pandemic.

Average land prices climbed by 2.3% last year, marking the third consecutive year of growth. This follows a 1.5% increase in 2022 and a 0.5% rise in 2021. The survey showed that land prices increased in 29 out of 47 prefectures, including Tokyo, Hokkaido, and Okinawa. This was an improvement from the previous year when prices rose in 25 prefectures. Conversely, land prices fell in 16 prefectures, down from 20 in 2022.

The demand for both residential and commercial land remained strong, with Fukuoka prefecture experiencing the highest increase at 5.8%. This surge was supported by redevelopment projects that boosted office demand and a revival in tourism that enhanced the demand for hotels and restaurants.

In Tokyo, the return of foreign visitors helped maintain a plot in the upscale Ginza shopping area as the most expensive location in Japan for the 39th consecutive year. The price of this plot increased by 3.6% in 2023, reaching 44.2 million yen ($274,705) per square meter, marking two consecutive years of price growth.

The surge in inbound tourism also played a significant role in this trend. Japan saw over 3 million visitors for the third straight month in May, benefiting from a weak yen that made travel more attractive. In 2022, Japan welcomed approximately 25 million foreign visitors, a notable recovery compared to the record 31.9 million in 2019.

The National Tax Agency evaluates land prices as of January 1 each year to determine inheritance and gift taxes on properties acquired during that year. This annual assessment is crucial for understanding the dynamics of the real estate market and its impact on taxation policies.

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Debate Highlights: Biden Struggles Against Trump on Economy

Debate Highlights: Biden Struggles Against Trump on Economy

During the recent presidential debate, President Joe Biden struggled to demonstrate his readiness for a second term, faltering against former President Donald Trump. The debate was controlled and policy-focused, contrasting the 2020 debates’ outbursts and testy exchanges.

Biden’s performance raised concerns about his age and mental acuity, with his hoarse voice, halting responses, and confusion over key data points. Even his prepared closing remarks were marred by stumbles and incoherence. In contrast, Trump appeared confident and robust. Biden’s allies attributed his performance to a cold, attempting to downplay its impact.

Trump maintained a mostly calm demeanor, avoiding the outbursts that previously hurt him and refraining from giving Democrats ammunition to label him as extreme. Although he still used his characteristic exaggerations and superlatives, his behavior was notably restrained compared to past debates.

Biden defended his economic record, highlighting efforts to help Black families with unemployment, housing discrimination, and student loans. However, he acknowledged ongoing inflation issues, which polls indicate are driving Black voters toward Trump—a critical demographic for Biden’s 2020 victory.

The candidates blamed each other for potential economic hardships if elected. Trump claimed Biden would raise taxes on families, while Biden warned that Trump’s tariff plans would increase costs for households. Biden has pledged not to raise taxes on those earning less than $400,000, while Trump proposes a 10% tariff on all goods, potentially costing households $1,700 annually according to the Peterson Institute for International Economics.

On abortion, Trump presented a moderate stance, taking credit for overturning Roe v. Wade but stating he would not ban the abortion drug mifepristone and supported exceptions for rape, incest, and the life of the mother. He accused Democrats of supporting late-term abortions and infanticide, which Biden firmly denied, stating, “We are not for late-term abortion period. Period. Period.”

The debate also saw Trump accuse China of exacerbating the US opioid crisis and bringing the country closer to a global conflict. He warned that China would dominate the US if current policies continued. Following the debate, the dollar inched higher in Asian trading as markets assessed Trump as having the upper hand.

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Yen Set for Major Swings Amid Intervention Threat, Charts Indicate

Yen Set for Major Swings Amid Intervention Threat, Charts Indicate

The market is bracing for a significant increase in yen volatility as the currency slumps to its lowest level since 1986, raising concerns about potential Japanese intervention. Volatility spreads reveal that investors are demanding a premium to guard against sudden moves, bearish yen bets are accumulating, and active trader positioning is at its most negative since 2022.

Despite warnings from Japanese authorities, the yen continues to weaken, increasing the likelihood of market intervention. Japan’s top currency official, Masato Kanda, has stated that the nation is prepared to intervene 24 hours a day if necessary.

Three key charts highlight the pressure on the yen. First, while implied volatility in the yen seems subdued, its spread over fluctuations in other currencies remains above the average since early 2021. This indicates heightened concern among investors about sudden movements in the yen compared to other major currencies.

Second, hedge funds and asset managers held bearish yen positions worth approximately $14 billion as of June 18, according to the latest Commodity Futures Trading Commission data. This figure surpasses bearish bets on other major currencies and contrasts with euro net longs worth $32.7 billion. The large bearish positions reflect a strong consensus against the yen among institutional investors.

Third, a Citigroup gauge of active trader positioning in the yen has dropped to its most negative level since 2022, following a surge in short bets. This indicates that traders remain firmly bearish on the yen but also suggests that many positions may need to be quickly unwound if the currency suddenly strengthens, potentially leading to rapid market movements.

The impact of the ¥9.8 trillion ($62 billion) Japan spent on foreign exchange intervention earlier this year has already diminished. Individual investors are now anticipating another opportunity to sell the yen if the currency appreciates following a new round of intervention. This sentiment was echoed by Hideki Shibata, a senior strategist at Tokai Tokyo Intelligence Lab, who noted that the market is closely watching for any signs of intervention that could trigger significant trading activity.

In summary, the yen is poised for substantial volatility, driven by persistent weakness and the looming threat of intervention. Investors are preparing for potential sharp movements, reflecting heightened uncertainty and strategic positioning in the currency markets.

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Economists Boost China Growth Forecasts

Economists Boost China Growth Forecasts Amid Improved Exports

Economists Boost China Growth Forecasts Amid Improved Exports

The outlook for China’s exports is expected to improve, supporting growth in the world’s second-largest economy even as consumer spending slows, according to a Bloomberg survey of economists.

Exports are forecasted to rise by 4.3% this year, up from a 2.8% gain predicted in May, based on the median forecast of 22 economists surveyed between June 17-24. China’s economy is projected to expand by 5%, an increase from the 4.9% forecasted in May, according to the median of 68 estimates.

China’s exports exceeded expectations in April and May, driven by strong overseas demand and the competitiveness of Chinese producers. This aligns with Beijing’s strategy of relying on exports to fuel growth and offset weak domestic spending. However, risks are increasing as Chinese companies face more trade barriers from the US and Europe.

These survey results contrast with a recent report from Goldman Sachs, which noted skepticism among its clients in China about the sustainability of export growth in the coming quarters. Investors are concerned about the sustainability of supply-side expansion amid weak domestic demand and rising trade frictions.

Economists have reduced their expectations for retail sales growth and consumer and factory-gate price inflation this year, reflecting pessimism over demand as the housing market continues to contract. Recent macroeconomic data indicate that the property sector remains a significant drag on the economy. Growth is still supported by stronger export momentum, but external risks are rising as China’s overcapacity leads to trade disputes, particularly with the US and Europe.

Deflationary pressures are likely to persist in China this year, with economists becoming more pessimistic about prospects. They expect the consumer price index to rise by only 0.6% this year, while the producer price index is forecasted to drop by 1%, both weakening from the estimates in May. This reflects consumers’ reluctance to spend amid concerns about job security, income prospects, and falling property values.

Economists have postponed their expectations for a cut to the reserve requirement ratio to the third quarter from the second quarter. The People’s Bank of China (PBOC) has held off on easing in recent months to protect the yuan and due to ample market liquidity. They also project slower money supply growth this year compared to May, as the central bank focuses on the efficiency of funds rather than pure expansion.

Projections for policy interest rates and the loan prime rate cuts remain set for the third quarter.

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Chinese Economy Poised for Growth Despite Challenges

Chinese Economy Poised for Growth Despite Challenges

Chinese Economy Poised for Growth Despite Challenges

China’s economy is set to continue its growth trajectory this year, bolstered by significant untapped potential in rural consumption, manufacturing, and further economic liberalization, as reported by the World Economic Forum.

Chen Liming, chair of Greater China at the WEF, highlighted China’s enduring strengths such as its vast market size, rich talent pool, and robust, complete industrial chain. These factors contribute to the nation’s long-term positive economic outlook.

China’s consumer market remains large, with substantial growth opportunities in regional and rural development. The country’s production and manufacturing systems are also undergoing continuous upgrades, driving further economic expansion.

According to data from the National Bureau of Statistics, China’s retail sales, a crucial indicator of consumer spending, increased by 3.7 percent year-on-year in May, and industrial output saw a 5.6 percent rise during the same period.

Chen’s comments come in advance of the 15th World Economic Forum Annual Meeting of the New Champions, also known as the Summer Davos Forum, which is scheduled to take place in Dalian, Liaoning province.

Chen advocated for the maintenance of stable, transparent, and predictable policies to bolster national growth stability and boost business confidence, thereby strengthening vertical industry momentum.

He emphasized the importance of China’s continued reforms and openness, which are vital for maintaining a competitive and equitable business environment. He noted that Dalian and Liaoning province have become attractive destinations for foreign investment due to improved business conditions and a more international, law-compliant environment.

The Summer Davos Forum has also enhanced Liaoning’s interaction with the global community, offering a platform to display technological advancements and economic achievements, thus aiding the province’s economic internationalization.

Despite facing recent protectionist actions from major trading partners, such as additional duties on Chinese-made electric vehicles by the European Commission and the U.S. targeting China’s emerging industries with tax increases, China remains committed to resolving trade issues through dialogue rather than sanctions.

Chen remarked that competitive disparities between countries often stem from variations in resources, technology levels, and workforce skills, rather than the production capacities often cited by critics.

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Japan's Demand-Driven Inflation Slows

Japan’s Demand-Driven Inflation Slows, Obscuring BOJ Rate Hike Outlook

Japan’s Demand-Driven Inflation Slows, Obscuring BOJ Rate Hike Outlook

Japan’s core inflation saw an uptick in May due to increased energy levies, but an index that removes the impact of fuel continued to decline for the ninth consecutive month, as shown in data released on Friday. This trend complicates the central bank’s decision on the timing of interest rate hikes.

The continued slowdown in “core core” inflation, which the Bank of Japan (BOJ) closely monitors as a crucial indicator of demand-driven price changes, casts doubt on the bank’s belief that rising wages will support consumption and maintain inflation on track to sustainably hit its 2% target.

The core consumer price index (CPI), which excludes volatile fresh food prices, increased by 2.5% in May compared to a year earlier, up from the previous month’s 2.2% gain. This rise was primarily due to a hike in the renewable energy levy and was close to the median market forecast of a 2.6% gain. However, inflation measured by an index excluding both fresh food and fuel slowed to 2.1% in May from 2.4% in April, marking the lowest year-on-year increase since September 2022.

Private-sector service inflation also slowed to 2.2% in May from 2.4% in the previous month, indicating that companies remain hesitant to pass on labor costs to consumers. This trend suggests that the anticipated boost to services inflation from strong pay hikes agreed upon in this year’s spring wage negotiations has not yet materialized.

The outlook for inflation is further complicated by a renewed rise in crude oil prices and increased import costs due to a weak yen. Analysts predict that core CPI could accelerate to nearly 3% later this month because of rising raw material costs. However, such pressure could negatively impact consumption and deter companies from raising prices, which would hamper the BOJ’s efforts to sustain underlying, demand-driven inflation around its 2% target.

Real wage growth in Japan remains weak, and there is no substantial data confirming that demand-driven inflation is accelerating. As a result, it is unlikely that the BOJ will raise rates before October-December this year.

The BOJ ended negative rates and bond yield control in March, marking a significant shift from its decade-long radical stimulus program. With inflation surpassing its 2% target for two years, the BOJ has hinted at raising short-term rates to levels that stabilize the economy, which analysts estimate to be between 1-2%. Many economists anticipate that the BOJ will increase interest rates to 0.25% this year, though opinions are divided on whether this will happen in July or later in the year.

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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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