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GBP/JPY Slides to 205.00 Amid Intervention Fears

GBP/JPY Slides to 205.00 Amid Intervention Fears

GBP/JPY Slides to 205.00 Amid Intervention Fears

The GBP/JPY pair continued its downward trend for the second consecutive day on Friday, moving away from its highest level since August 2008, which was around 206.15 earlier this week. Currently, the spot prices are trading just above the 205.00 psychological mark, down approximately 0.35% for the day. This decline is largely attributed to concerns that Japanese authorities or the Bank of Japan (BoJ) may intervene in the markets to support the domestic currency.

Japan’s Finance Minister, Shunichi Suzuki, made a statement today indicating that he will closely monitor stock and forex markets with vigilance, noting that a weak Japanese Yen (JPY) is affecting prices. Despite this, a significant appreciation of the JPY remains unlikely due to the BoJ’s dovish stance. The BoJ has been hesitant to provide a detailed plan for reducing bond purchases and raising interest rates. Additionally, the prevailing risk-on environment is expected to limit the demand for the safe-haven JPY, thus restricting the losses for the GBP/JPY pair.

On the other side of the equation, the British Pound (GBP) received a slight boost from exit polls suggesting that Britain’s main opposition Labour Party is set to win a substantial majority in the UK general election. However, this outcome also paves the way for a potential rate cut by the Bank of England (BoE) in August, which could act as a headwind for the Sterling and the GBP/JPY pair. Moreover, the overbought Relative Strength Index (RSI) on the daily chart suggests that some profit-taking might occur as the week comes to an end.

Despite these factors, the GBP/JPY pair is likely to close in positive territory for the fourth consecutive week. The interplay of market interventions by Japanese authorities, the BoJ’s policy stance, and the political developments in the UK will continue to influence the pair’s movements in the near term. Traders will be closely watching these dynamics, especially with the potential for further interventions or policy shifts that could impact the GBP/JPY pair’s trajectory. 

As we move forward, the focus will remain on the actions of the BoJ and the UK political landscape, which are key drivers in the forex market, particularly for the GBP/JPY cross.

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EUR/JPY Rises Above 173.50, Focus on Eurozone PMI

EUR/JPY Rises Above 173.50, Focus on Eurozone PMI

EUR/JPY Rises Above 173.50, Focus on Eurozone PMI

The EUR/JPY pair remains in positive territory for the sixth consecutive day, trading near 173.80 during the early European session on Wednesday. This sustained upward movement is primarily due to the weakening Japanese Yen (JPY), which has been impacted by recent data indicating a contraction in Japanese business activity for June.

The final reading of Japan’s Services PMI fell to 49.4 in June from 49.8 in May, marking the largest downward shift since January 2022 and one of the most significant declines on record. This data has put selling pressure on the JPY, providing a headwind for the currency pair. However, there remains a possibility that the Bank of Japan (BoJ) could intervene in the foreign exchange market, which might lend some support to the JPY in the near term.

On the Euro side, the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) inflation rate eased to 2.5% year-over-year in June, down from 2.6% in May. Despite this slight decrease, these inflation figures are not expected to prompt the European Central Bank (ECB) to cut interest rates at its upcoming policy meeting on July 18. According to Bert Colijn, senior Eurozone economist at the Dutch bank ING, “Nothing in these figures would make the ECB cut again in July, and we think it’ll be eagerly awaiting data over the summer before seriously debating a next rate cut in September.”

Furthermore, ECB President Christine Lagarde stated on Monday that recent economic developments do not indicate an urgent need for further interest rate cuts. This stance highlights the ongoing divergence in monetary policy between the Eurozone and Japan, which continues to support the Euro against the Yen.

Overall, the EUR/JPY cross is benefitting from the contrasting economic situations and monetary policy expectations in the Eurozone and Japan. As the market anticipates further data releases and potential central bank actions, the pair’s performance will likely remain influenced by these macroeconomic factors. For now, the weakening JPY and stable Eurozone inflation are keeping the EUR/JPY on an upward trajectory.

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Asian Shares Mixed After Wall Street Gains

Asian Shares Mixed After Wall Street Gains

Asian Shares Mixed After Wall Street Gains

Asian stocks experienced mixed performance on Tuesday following gains on Wall Street and a surge in U.S. bond yields as election-related issues influenced global markets.

U.S. futures declined, while oil prices increased. The Japanese yen fell to a near 38-year low, hitting 161.67 yen to the dollar early Tuesday. This depreciation in the yen boosted Tokyo’s benchmark Nikkei 225 by 1.1% to 40,074.69, as investors bought export-oriented shares.

In contrast, Australia’s S&P/ASX 200 dropped 0.4% to 7,718.20. South Korea’s Kospi also fell, losing 0.8% to 2,781.92, despite data indicating that the country’s consumer inflation slowed to an 11-month low in June.

Hong Kong’s market showed positive momentum after a holiday break, with the Hang Seng climbing 0.3% to 17,775.84. The Shanghai Composite Index had a modest increase of 0.1% to 2,995.78. Elsewhere in Asia, Taiwan’s Taiex gained 0.6%, while Bangkok’s SET index slipped by 0.4%.

On Wall Street, the S&P 500 rose 0.3% to 5,475.09. The Dow Jones Industrial Average inched up 0.1% to 39,169.52, and the Nasdaq composite gained 0.8% to 17,879.30. European markets saw significant activity, with France’s CAC 40 index jumping as much as 2.8% before settling for a 1.1% gain. Results from France suggested a far-right party might not secure a decisive majority in legislative elections, easing concerns over potential high-debt policies.

This year is significant for elections globally, with voters heading to the polls in the United Kingdom later this week and soon in other countries. In the U.S., pollsters are assessing the impact of the recent debate between President Joe Biden and former President Donald Trump. Investors are also watching the effects of a Supreme Court ruling granting former presidents broad immunity from prosecution, likely delaying a criminal case against Trump until after the November election.

In the financial markets, Treasury yields increased, with the 10-year Treasury yield rising to 4.46% from 4.39% on Friday. This surge reflects expectations of a potential Republican victory in the upcoming elections, reminiscent of market movements from 2016. Higher yields have reversed the trend seen since spring when the yield topped 4.70% in late April.

Previously, easing yields were driven by hopes that inflation would slow enough for the Federal Reserve to cut interest rates. High rates have burdened the U.S. economy, making borrowing more expensive. Recent data showing weaker U.S. manufacturing and decelerating price increases have bolstered hopes for rate cuts.

The week’s economic highlight will be the U.S. government’s employment report on Friday. Economists predict that hiring slowed to 190,000 in June from May’s 272,000, approaching the “Goldilocks” figure of around 150,000, which indicates sustainable growth without fueling inflation.

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NZD/USD Reclaims 0.6100 Amid Weaker USD

NZD/USD Reclaims 0.6100 Amid Weaker USD, Limited Upside

NZD/USD Reclaims 0.6100 Amid Weaker USD, Limited Upside

The NZD/USD pair is experiencing some dip-buying during the Asian session on Monday, aiming to build on Friday’s modest bounce from the mid-0.6000s, its lowest level since mid-May. Currently, spot prices hover around the 0.6100 mark due to a modest weakening of the US Dollar (USD). However, there remains a lack of bullish conviction amid uncertainties regarding the Federal Reserve’s (Fed) potential rate-cut path.

On Friday, the US Personal Consumption Expenditures (PCE) Price Index confirmed the ongoing disinflationary trend, aligning with the Consumer Price Index (CPI) and Producer Price Index (PPI) data for May. This reinforced market expectations that the Fed might begin cutting interest rates at the September policy meeting, putting USD bulls on the defensive. Additionally, a positive tone in US equity futures has undermined the safe-haven appeal of the USD, lending support to the NZD/USD pair.

Despite this, the Fed adopted a more hawkish stance during the June policy meeting, forecasting only one interest rate cut in 2024. Further complicating the outlook, President Joe Biden’s challenging debate with his Republican opponent has increased the odds of a Trump presidency. This potential shift in leadership has raised concerns about the imposition of aggressive tariffs by the Trump administration, which could fuel inflation and trigger higher interest rates. This scenario supports elevated US Treasury bond yields, potentially limiting further USD losses.

Moreover, expectations that the Reserve Bank of New Zealand (RBNZ) might cut rates earlier than anticipated, coupled with China’s economic struggles, could deter bullish traders from placing fresh bets on the NZD/USD pair. Official data released on Sunday revealed that China’s manufacturing activity declined for the second consecutive month in June, while services activity fell to a five-month low. These factors suggest caution before confirming that the NZD/USD pair has formed a near-term bottom.

Looking ahead, traders will focus on important US macroeconomic releases at the start of the new month, including the ISM Manufacturing PMI, which may offer short-term opportunities during the North American session. However, the primary focus will be on the closely-watched US monthly employment report, known as the Nonfarm Payrolls (NFP) report, scheduled for Friday. This report will play a crucial role in influencing near-term USD price dynamics and driving the NZD/USD pair.

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

NZD/USD Nears Mid-0.6000s, Lowest Since Mid-May Ahead of US PCE

NZD/USD Nears Mid-0.6000s, Lowest Since Mid-May Ahead of US PCE

The NZD/USD pair faces renewed selling pressure after a brief respite, plummeting to its lowest level since mid-May during the Asian session on Friday. Spot prices are currently trading just above the mid-0.6000s, down 0.35% for the day, confirming a bearish breakdown through the 50-day Simple Moving Average (SMA).

The US Dollar (USD) has regained positive momentum, bouncing back from Thursday’s softer data-led decline to reach a nearly two-month peak. This resurgence is driven by the Federal Reserve’s (Fed) hawkish outlook, with recent comments from influential FOMC members indicating no rush to begin a rate-cutting cycle. This outlook has triggered a fresh increase in US Treasury bond yields. Additionally, some repositioning ahead of crucial US inflation data has further boosted the dollar, adding to the downward pressure on the NZD/USD pair.

Conversely, the New Zealand Dollar (NZD) is weighed down by expectations of an earlier-than-expected rate cut by the Reserve Bank of New Zealand (RBNZ). This anticipation has overshadowed a generally positive tone in the equity markets, failing to provide any support to the risk-sensitive Kiwi. Consequently, the path of least resistance for the NZD/USD pair remains downward. Traders, however, are likely to await the release of the US Personal Consumption Expenditures (PCE) Price Index for further insights into the Fed’s future policy decisions and the rate-cut path.

A lower-than-expected PCE deflator or a figure in line with market expectations could support the case for two rate cuts by the Fed this year, potentially weakening the USD. Conversely, an upward surprise would likely push back the timing for the first Fed rate cut and trigger a fresh rally for the dollar. Hence, this data release will be crucial in shaping near-term USD price dynamics and determining the next directional move for the NZD/USD pair.

Regardless of the upcoming data, spot prices for the NZD/USD seem poised to register significant weekly losses, continuing a nearly three-week-old downtrend.

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NZD/USD Drops to Near 0.6100

NZD/USD Drops to Near 0.6100 Amid Risk Aversion and Consumer Confidence Concerns

NZD/USD Drops to Near 0.6100 Amid Risk Aversion and Consumer Confidence Concerns

The NZD/USD pair extends its losses for the second consecutive session, trading around 0.6110 during the Asian session on Wednesday. The New Zealand Dollar (NZD) is struggling, possibly due to rising risk aversion ahead of the ANZ-Roy Morgan Consumer Confidence data for June and the release of the US Gross Domestic Product (GDP) figures for the first quarter (Q1) on Thursday. Additionally, market participants are closely watching the US Personal Consumption Expenditure (PCE) Price Index, which is scheduled for release on Friday.

The ongoing uncertainty in the global financial markets has led to heightened caution among investors, impacting the NZD/USD pair. Concerns over the upcoming consumer confidence data have intensified, as this indicator will provide insights into the economic sentiment in New Zealand. A lower-than-expected reading could further dampen the outlook for the NZD.

Moreover, the impending release of the US GDP figures adds another layer of complexity. A robust GDP report could strengthen the US Dollar (USD), making the NZD/USD pair less attractive. Conversely, a weaker GDP figure could offer some relief to the NZD. However, the market remains cautious, waiting for clear signals from these key economic indicators.

Adding to the downward pressure on the NZD, New Zealand’s Treasury issued a statement on Wednesday highlighting the risks posed by a weak economy to its forecasts. The Treasury is considering additional spending and revenue solutions to address these challenges. This admission of economic vulnerability has contributed to the bearish sentiment surrounding the NZD.

Economist McLeish echoed these concerns, pointing to recent data that suggests economic weakness in New Zealand. The combination of internal economic challenges and external uncertainties has created a challenging environment for the NZD.

The upcoming US PCE Price Index release on Friday is another critical factor influencing the NZD/USD pair. As the Federal Reserve’s preferred measure of inflation, the PCE Price Index will be closely scrutinized. A higher-than-expected reading could prompt the Federal Reserve to adopt a more hawkish stance, potentially boosting the USD further and putting additional pressure on the NZD.

In summary, the NZD/USD pair is navigating a complex landscape of economic indicators and market sentiments. The pair’s performance in the coming days will largely depend on the outcomes of the ANZ-Roy Morgan Consumer Confidence data, the US GDP report, and the PCE Price Index. Investors remain cautious, closely monitoring these developments to gauge the future direction of the NZD/USD pair.

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USD/CAD Nears 1.3700 as Fed Postpones Rate Cut

USD/CAD Nears 1.3700 as Fed Postpones Rate Cut

USD/CAD Nears 1.3700 as Fed Postpones Rate Cut

The USD/CAD pair arrested a six-day downtrend, trading near the 1.3700 mark in Monday’s Asian trading session, buoyed by robust U.S. economic data from the previous Friday. The uplift in the U.S. Dollar (USD) was primarily due to an unexpectedly strong U.S. Purchasing Managers Index (PMI) report.

June’s U.S. Composite PMI climbed slightly to 54.6, up from May’s 54.5, marking the highest level seen since April 2022. The Manufacturing PMI also exceeded expectations, rising to 51.7 from the previous 51.3 and surpassing the forecast of 51.0. Additionally, the Services PMI increased to 55.1, up from 54.8 in May, and beat the consensus prediction of 53.7.

The U.S. Dollar Index (DXY), which tracks the USD against a basket of six major currencies, edged higher. This increase follows comments from Federal Reserve officials who indicated a delay in the expected timing of the year’s first interest rate cut. Specifically, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, noted in a Reuters report that reducing inflation to 2% could take one to two years.

Market expectations have adjusted accordingly, with the CME FedWatch Tool now showing a 65.9% likelihood of a Fed rate cut in September, a decrease from 70.2% a week earlier.

On the Canadian side, the Canadian Dollar (CAD), which often correlates with commodity prices, found some support from rising crude oil prices. Oil markets have reacted to escalating geopolitical tensions, including Israeli military actions in Gaza and continued Ukrainian drone strikes on Russian oil refineries, both of which have stirred supply concerns.

These factors combined to halt the recent slide in the USD/CAD exchange rate, setting the stage for potential fluctuations based on upcoming economic data releases and geopolitical developments.

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Fears about economy are causing stock global markets to collapse

Fears about economy are causing stock global markets to collapse

The United Kingdom and Switzerland boosted interest rates on Thursday, a day after the Federal Reserve of the United States announced the highest rate hike since 1994 affected the global stock market. Policymakers are hiking interest rates in order to decrease demand and alleviate some of the pressures that are driving up consumer prices. Investors are concerned that the actions will cause a lasting slump in the global economy. After the US rate hike was announced, Ryan Sweet of Moody’s Analytics said, “The Federal Reserve will hike interest rates until policymakers break inflation, but the risk is that they also break the economy.”

The Nikkei 225 and Australia’s main stock market index were both down more than 2% on Friday; however Hong Kong and Shanghai stocks were higher. That occurred following a sell-off in the US on Thursday, with the S&P 500 dropping 3.2 percent and the tech-heavy NASDAQ dropping more than 4%. For the first time since January 2021, the Dow Jones Industrial Average fell more than 2.4 percent, falling below 30,000 points. Few businesses were spared, and corporations that rely on discretionary spending, such as Nike and airlines, were among the hardest hit. Energy businesses, which would potentially face a decline in demand if the economy slowed, were also hit hard.

Tesla’s stock dropped 8.5 percent after the company announced price hikes due to increased costs. The autopilot features of the electric vehicle are also being scrutinised by US road safety regulators. Spotify also dropped 7% a day after the streaming behemoth announced it was slowing recruiting in the wake of economic uncertainty, becoming the second major internet business to do so.

The FTSE 100 ended Thursday down more than 3% in the UK, where the Bank of England warned that inflation could reach 11% this year. After warning investors that inflationary pressures were impacting shopping behaviour, Asos, a British online apparel company, plummeted 32.5 percent. The Dax index in Germany sank more than 3%, while the Cac 40 in France fell 2.4 percent.

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Fed’s rate hike, the stock market in the United States rallied

Fed’s rate hike, the stock market in the United States rallied

Stocks in the United States jumped on Wednesday after the Federal Reserve approved its largest interest-rate hike since 1994, although the central bank hinted that such moves would be rare. The S&P 500 index increased 54.51 points, or 1.5 percent, to 3789.99, ending a five-day losing run. The Dow Jones Industrial Average increased by 303.70 points, or 1%, to 30668.53, while the NASDAQ Composite increased by 270.81 points, or 2.5 percent, to 11099.15.

The move is the Fed’s latest attempt to reduce inflation by tightening monetary policy. The Fed was widely expected to boost its short-term benchmark rate by 0.75 percentage point, as forecast by investors. Some had feared that, before of Wednesday’s interest-rate decision, the Fed might have to hike rates even faster.

Fed Chairman Jerome Powell said Wednesday’s decision was “an extraordinarily significant one” during a press conference following the announcement. He also stated that he expects the Fed to raise rates by 0.50 to 0.75 percentage points at its July meeting. Ultimately, the guidance the Fed gives about the direction of interest rates Wednesday is more important for markets than the size of the rate increase, said Dorian Carrell, a fund manager at Schroders. This year, uncertainty regarding monetary policy has been a major source of volatility.

On Monday, the S&P 500 entered bear market territory, or a decline of at least 20% from a prior high. “Markets are pricing in a Fed that wants to be ahead of the curve on inflation rather than behind it,” said Art Hogan, chief market analyst at National Securities. Mr. Hogan said that this helped raise stocks ahead of Wednesday’s rate announcement. Stocks were up across the board, with 10 of the S&P 500’s 11 sectors closing the day higher. Technology companies, which have been one of the market’s hardest hit this year, were among the best performers. Microsoft, Nvidia, Amazon.com, and Netflix all increased by 3% or more.

Areas of the market that are economically sensitive have also risen. The KBW NASDAQ Bank Index rose 1.6 percent on Wednesday, following a sell-off in bank stocks due to market concerns about a slowing economy. Energy stocks have fallen, marking a rare reversal for the year’s best-performing S&P 500 sector. The energy sector of the S&P 500 index declined by around 2.1 percent.

Meanwhile, government bonds in the United States recovered after falling in recent weeks in a selloff that pushed rates to their highest levels in almost a decade. The yield on 10-year Treasurys fell to 3.389 percent on Wednesday, down from 3.482 percent the day before. Rates for everything from mortgages to federal student loans to auto loans are influenced by yields, which fall as bond prices rise.

Ahead of the ECB’s ad hoc meeting on Wednesday to tackle instability in the region’s bond markets, European stocks and prices on peripheral government bonds in the eurozone soared. Under an existing bond-purchase programme, the ECB plans to buy more bonds from weaker eurozone governments. It charged ECB employees with speeding up the development of a new instrument that would reduce borrowing cost variations throughout the area, addressing financial imbalances that have long plagued the currency union.

Willem Sels, chief investment officer at HSBC Private Banking and Wealth Management, said, “They wanted to make sure financing circumstances don’t deteriorate too much.” The meeting, he claimed, showed that the ECB was ready to support markets sooner than investors had anticipated.

Shares of banks and insurers led the Stoxx Europe 600 index higher by 1.4 percent. As the price of government bonds declined, shares of Italian banks, who own a large portion of them, suffered. On Wednesday, Intesa Sanpaolo and UniCredit were among the best-performing banks in Europe. The Dow Jones Industrial Average was trading at 30669 in the afternoon on Wednesday. It was wrongly stated in an earlier version of this article that it traded at 20639. Furthermore, on Tuesday, Italy’s 10-year government bond yields finished at 4.111 percent. The yields settled at 4.067 percent in an earlier version of this story, which was inaccurate.

 

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Stocks fall further into a bear market ahead of major Fed comments

Stocks fall further into a bear market ahead of major Fed comments

Most stocks on Wall Street fell in their first trading day Tuesday after plunging into a bear market on fears that soaring inflation may force central banks to slam the brakes on the economy too forcefully. The S&P 500 index slid 14.15 points, or 0.4 percent, to 3,735.48 as investors awaited the Federal Reserve’s decision on interest rate hikes on Wednesday. After a couple of prominent corporations displayed financial fortitude with stronger profits and dividends to shareholders, it swung back and forth between losses and gains throughout the day.

The Dow Jones Industrial Average dropped 151.91 points to 30,364.83, or 0.5 percent. After bouncing between a loss of 0.7 percent and a gain of 1.1 percent, the NASDAQ composite increased 19.12, or 0.2 percent, to 10,828.35. Despite the swings, trading was calmer than it had been during Monday’s global sell-off, which drove the S&P 500 down 3.9 percent. In Tokyo and Paris, stocks sank more than 1%, but increased by the same amount in Shanghai. Even as Treasury yields rose to their highest levels in more than a decade, investors on Wall Street appeared to be less anxious.

“No one is going to take major positions today,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management, “before of what could be a rip-roaring day” with the Fed’s decision. The price of cryptocurrencies continued to fluctuate. They’ve been among the hardest affected in this year’s market sell-off, as the Federal Reserve and other central banks boost interest rates to combat inflation and forcefully turn off the “easy mode” that has kept markets afloat for years. According to CoinDesk, Bitcoin was down over 5% in afternoon trading and was trading at $22,201. It had already dropped over 70% from its all-time high of $68,990.90 achieved late last year.

However, economists believe the data will not prevent the Federal Reserve from raising its benchmark interest rate by a larger-than-usual amount on Wednesday. Investors are now anticipating the largest increase since 1994, a three-quarters of a percentage point increase, or three times the typical amount. Only a week ago, such a massive gain was considered a remote prospect, if at all. However, a market-beating report on consumer inflation on Friday appears to have forced the Fed into acting more aggressively. It showed that, instead of declining as expected, consumer price inflation worsened in May.

A major rate hike, Nixon added, “is really a split judgement in terms of the market as to whether it will be a good thing or a terrible thing.” “It certainly paves the way for more significant hikes in the future.” According to Tradeweb, Treasury yields continued to rise, with the two-year yield reaching its highest level since November 2007, before the financial crisis. During the day, the 10-year yield hit its highest level since April 2011. They also had a relatively dependable recession warning indicator blinking on and off in the bond market. The 10-year Treasury yield has risen above the two-year yield in afternoon trading, at 3.47 percent vs 3.41 percent. In the bond market, things usually look like this.

Some investors see the unique situation in which the two-year yield exceeds the 10-year yield as a sign that a recession is on the way in the next year or two. It’s known as a “inverted yield curve,” and it appeared briefly earlier today. Oracle stock rose 10.4% on Wall Street after the company reported better revenue and earnings for the most recent quarter than experts predicted. FedEx’s stock rose 14.4% after the company increased its dividend distribution by more than 50%. It was the first day of trading for US stocks since the S&P 500 finished Monday at a 21.8 percent loss from its early-year high. This put it in a bear market, which is defined as a decrease of 20% or more in value.

The Federal Reserve’s aim to contain inflation by raising interest rates is at the heart of the sell-off. The Fed is scrambling to bring prices under control, and one of its key tools is to raise interest rates. However, this is a harsh tool that could slow the economy too much and lead to a recession. “The attention on this week’s Fed decision is driving the true calm in today’s market,” said Greg Bassuk, CEO of AXS Investments. “Today’s calm is either the calm before the storm or the calm that will hopefully last for a long time.” Other central banks around the world have started raising rates as well, notably the Bank of England, and the European Central Bank has suggested it will do so next month.

Oil and food costs are skyrocketing as a result of the Ukraine conflict, driving inflation and sapping consumer spending, particularly in Europe. Meanwhile, COVID infections in China have prompted some harsh, business-slowing regulations that threaten to stifle the world’s second-largest economy and exacerbate clogged supply chains. The move toward higher rates has reversed the market’s extraordinary gain, which was fueled by significant central bank support after the pandemic struck in early 2020. From late March 2020 to the climax in January, the S&P 500 more than doubled. According to S&P Dow Jones Indices, it was the shortest bull market on record, dating back to 1929, and it followed the shortest bear market on record.

Investors are less inclined to pay high prices for hazardous assets when interest rates are higher. As a result, some of the biggest stars of the earlier low-rate era, such as bitcoin and high-growth technology companies, have taken the brunt of this year’s crash. In 2022, Netflix will be down by more than 70%.

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S&P 500 entered a bear market, global stocks dropped

S&P 500 entered a bear market, global stocks dropped

Stock futures increased, indicating that U.S. markets were on the verge of recovering from a meltdown that pushed the S&P 500 into a bear market on Monday, but Asian stocks remained under pressure. In Asia on Tuesday morning, S&P 500 futures were up 0.6 percent. The Dow Jones Industrial Average and the Nasdaq-100, which is centered on technology, both rose 0.5 percent and 0.8 percent, respectively.

Consumer inflation in the United States reached its highest level in more than four decades, according to data released late last week. This has fueled fears that the Federal Reserve will be forced to act quickly, and that the monetary tightening that follows will push the economy into recession. Following a two-day policy meeting, the Fed will announce its next interest rate decision on Wednesday. According to the CME FedWatch Tool, market pricing swung quickly on Monday, implying that a 0.75 percentage point increase was a near certainty. According to the programme, futures markets previously indicated a one-in-four possibility of such a significant gain.

Shorter-term Treasury yields surged above longer-term Treasury yields during Asian trading hours Tuesday, a phenomenon known as an inverted yield curve that has often preceded prior recessions. As bond prices decrease, yields climb. The yield on the 10-year note fell to 3.355 percent from 3.371 percent on Tuesday, after jumping to an 11-year peak on Monday. The yield on the two-year note, meanwhile, increased by 0.116 percentage point to 3.395 percent.

While several markets have been impacted by higher interest rates this year, the shares of money-losing companies that were once industry darlings and other speculative plays have been particularly hard hit. Higher interest rates on risk-free assets like government bonds tend to lower the appeal of riskier investments—and the perceived value of future cash flows—while increasing corporate borrowing costs. The S&P 500 has now down approximately 22% from its January high, while the NASDAQ Composite has dropped 33% from its November high.

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Concerns about Global Economy have caused the stock markets to fall

Concerns about Global Economy have caused the stock markets to fall

As a result of rising prices in the United States, Asian stock markets have plunged, raising fears that the Federal Reserve may tighten its monetary policy to combat inflation. At the same time, the US dollar rose to 135 yen for the first time in more than two decades. It comes as official numbers released on Friday revealed that US inflation touched a 40-year high last month. Investors’ anxieties over global economic development were heightened by a warning in Beijing about Covid-19 infections.

The Nikkei 225 index in Japan was down 2.7 percent on Monday, while the Hang Seng in Hong Kong was down 2.7 percent. The Australian stock market was closed for the public holiday commemorating the Queen’s birthday. Brent crude has dropped roughly $1.70 to just over $120 per barrel, bringing global oil prices down. Official data released on Friday indicated that prices rose more than predicted in the United States last month, with rising energy and food expenses pushing inflation to its highest level since 1981.

After dropping in April, the annual inflation rate climbed to 8.6% in May, according to the Labor Department. This dashed hopes that inflation had reached a nadir, and instead alerted investors to the possibility that the Federal Reserve would respond more forcefully to the problem. On Wednesday, the central bank is expected to issue its next policy pronouncement. It has an 80% likelihood of raising its main interest rate by half a percentage point, according to the markets.

The reforms occurred as the cost of living has risen, putting pressure on officials to address the issue. The rising cost of gasoline has become a big issue in the United States, with the price of gasoline averaging more than $5 per gallon for the first time on Saturday, according to the American Automobile Association. Investors are concerned, however, that the Fed and other major central banks would take extreme measures to curb increasing prices, such as raising interest rates too high and too quickly, causing a sudden economic slowdown.

Investors are also concerned about the spread of Covid-19 in China, following the announcement on Sunday by Beijing’s most populous district of Chaoyang that three rounds of mass testing would be conducted to control a “ferocious” outbreak – 166 confirmed cases so far – that began last week at a bar in a nightlife and shopping area. This has sparked fears of future lockdowns, which might stifle the city’s economic resurgence just as restrictions were being relaxed.

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Stocks drop as Wall Street prepares for inflation data

Stocks drop as Wall Street prepares for inflation data

Stocks in the United States fell sharply on Thursday, as Wall Street fretted about critical inflation data due out on Friday. The S&P 500 was down 2.4 percent, and the Dow Jones Industrial Average was down 1.9 percent, or 640 points. The NASDAQ Composite Index dropped by 2.8 percent. The majority of the losses occurred in the final hour of trading, as selling intensified as the session came to a close.

Investors are anticipating the release of the latest Consumer Price Index (CPI) from the Bureau of Labor Statistics on Friday in order to gain further insight into how aggressively the Federal Reserve will raise interest rates. Inflation is expected to have continued in May, according to the reading. According to consensus estimates, headline inflation would climb at an annual pace of 8.3 percent in May, matching April’s reading, and 5.9 percent excluding food and energy prices.

The sell-off was triggered by disappointing labour market statistics released before the market opened, as well as confirmation from the European Central Bank that it intends to hike interest rates next month. Last week, 229,000 people applied for unemployment benefits, the highest number since January and an indication that the labour market is becoming more stressed. Prior to the release of this data, all three main indexes were forecasting gains of more than 0.4 percent at the open.

Oil prices fell somewhat but remained above $120 per barrel, and the 10-year Treasury yield rose to 3.06 percent, just above the 3% level that the 10-year had surpassed earlier this week for the first time since early May. Investors are still looking for signs of how the economy is faring in the face of tighter financial conditions, as well as how aggressive the Federal Reserve rate hike cycle will grow before a possible stop.

Last Friday’s robust May employment numbers undoubtedly conveyed to policymakers that present labour market conditions can survive further monetary tightening. As it fights inflation, central bank policymakers have taken clues from the labour market on the rate hike pace, with policy geared at cooling labour demand just enough to keep the unemployment rate from rising too high.

In a morning note, FWDBONDS Chief Economist Christopher S. Rupkey noted, “The surge in initial jobless claims does fit with anecdotal information offered by CEOs that they are closely watching their head counts, which frequently covers up for their actions where they are discreetly throwing away pink slips.” “One thing is certain: joblessness will only rise as inflation raises costs for every company across the country, necessitating cost-cutting measures that will inevitably fall on the backs of workers.”

Shares of Tesla (TSLA) closed marginally down in other markets after the electric vehicle’s price gained as much as 3% in early trading following a UBS upgrade to Buy. The electric vehicle behemoth is also “best positioned to become one of the top three global auto manufactures by 2030,” according to the research.

 

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As volatile trading on Wall Street continues, stocks dip

As volatile trading on Wall Street continues, stocks dip

Investors were disheartened to see further evidence of inflation’s impact on businesses and another grim forecast for the global economy on Wall Street Wednesday, erasing most of their gains for the week. The losses come after a string of choppy trading days, with key indexes swinging back and forth between gains and losses by the hour. As investors strive to figure out how rising interest rates and inflation will affect the economy, volatility prevails.

The S&P 500 index dropped 44.91 points, or 1.1%, to 4,115.77. For the week, the benchmark index managed to maintain a small increase. It has now lost eight of the previous nine weeks. The NASDAQ slid 88.96 points, or 0.7 percent, to 12,086.27, while the Dow Jones Industrial Average fell 269.24 points, or 0.8 percent, to 32,910.90. The largest weights on the broader market were banks and industrial businesses. Union Pacific was down 3.1 percent and Wells Fargo was down 1.8 percent. Stocks in the technology sector have also dropped. Intel’s stock dropped 5.3 percent.

Stocks of smaller companies plummeted faster than the rest of the market. The Russell 2000 index dropped 28.56 points (1.5%) to 1,891.01. Bond yields have risen. The 10-year Treasury yield, which banks use to set mortgage and other loan rates, increased to 3.02 percent on Wednesday from 2.97 percent late Tuesday.

On Wall Street, the biggest issue is increasing inflation and whether the Federal Reserve’s decision to hike interest rates rapidly will help mitigate the damage or push the economy into recession. “What investors need to understand is that inflation numbers will take a long time to look good,” said Brian Levitt, global market strategist at Invesco. “What they need to pay attention to is whether it improves or deteriorates in relation to expectations.”

Businesses are still feeling the effects of inflation. Scotts Miracle-Gro, a lawn care products firm, fell 8.9% after reducing its profit prediction for the year because merchants aren’t restocking orders as quickly as projected. Consumers are shifting to either spending on services or focusing on basics rather than purchasing otherwise discretionary products such as electronics, according to retailers.

Russia’s invasion of Ukraine, which has increased pressure on oil and food prices since February, has only exacerbated the impact of inflation. Crude oil prices in the United States jumped 2.3 percent on Wednesday, bringing the year’s total to 63 percent, while wheat prices are up 39 percent in 2022. Following a series of lockdowns in Chinese cities dealing with COVID-19 cases, supply chains have tightened as well.

“It will be more difficult to see headline inflation come down as long as commodity prices remain elevated,” Levitt added. The Organization for Economic Cooperation and Development has lowered its economic growth prediction, following numerous other international organisations, like the World Bank, who expect inflation to have a long-term impact on economies around the world.

In testimony before the Senate Finance Committee on Tuesday, Treasury Secretary Janet Yellen said she expects inflation to stay high and that lowering it is a primary priority. At its meeting next week, the Federal Reserve is largely expected to raise its benchmark short-term interest rate by half a percentage point. That would be the second consecutive hike of more than double the regular amount, with a third expected in July.

The Fed’s goal is to reduce economic growth enough to mitigate the impact of inflation. Throughout most of the post-pandemic recovery, demand for commodities outpaced supplies and production capacity. However, investors are concerned that the Fed may raise rates too quickly, causing the US economy to enter a recession, especially given the current state of the economy. Wall Street is keeping a tight eye on economic statistics for signs that the Fed may be easing up on the scale of its rate hikes. The latest report on the consumer price index will be released by the US government on Friday, which will provide the next major update on inflation.

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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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EUR/USD Price Forecast

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

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

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

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

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

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EUR/USD Eases Near

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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WTI Crude Stays Above $69 Amid Supply Worries Over Russia-Ukraine Conflict

Japan and UAE Join Forces for International Oil Market Stabilization

Japan and UAE Join Forces for International Oil Market Stabilization

Sheikh Mohamed bin Zayed Al-Nahyan, the crown prince of Abu Dhabi and deputy supreme commander of the UAE Armed Forces, engaged in a productive discussion with Japan’s Prime Minister Kishida Fumio, focusing on the Ukraine crisis and the importance of maintaining global energy security and market stability. During their Japan-UAE Summit telephone conversation, Sheikh Mohammed emphasized the UAE’s commitment to enhancing energy relations with Japan.

Prime Minister Kishida, recognizing the UAE as a strategic partner, expressed his desire to deepen ties with Sheikh Mohamed. He also congratulated the UAE on the successful hosting of Expo 2020 Dubai. Sheikh Mohamed reciprocated by expressing his aspirations to fortify bilateral relations with Japan and appreciated Japan’s participation in the Expo.

The leaders delved into the issue of rising crude oil prices, a direct consequence of the situation in Ukraine. Kishida urged the UAE, as an OPEC member, to actively contribute to stabilizing the crude oil market. They agreed on collaborative efforts between the UAE and Japan to stabilize the international oil market.

This year, marking the 50th anniversary of diplomatic ties between the two nations, the leaders committed to strengthening their relationship. This includes signing the framework document for the “Comprehensive Strategic Partnership Initiative” and promoting cooperation across various sectors.

Additionally, Kishida sought the UAE’s assistance in ensuring safe passage for Japanese nationals returning from Russia. Sheikh Mohamed assured Japan of the UAE’s full cooperation in this regard. The dialogue also covered the situation in the Middle East, including Yemen and Iran, with both leaders agreeing to continue their close cooperation on these matters.

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Kishida of Japan Set to Dismiss Additional Officials Amid Scandal, Reports Asahi

Kishida of Japan Set to Dismiss Additional Officials Amid Scandal, Reports Asahi

Japanese Prime Minister Fumio Kishida is preparing to dismiss up to 15 ministers and junior ministers amid a slush fund scandal, according to reports from the Asahi newspaper. This move aims to mitigate the impact of a crisis involving the concealment of political funds by a faction of the Liberal Democratic Party once led by the late Prime Minister Shinzo Abe. The shake-up includes high-profile figures such as Trade Minister Yasutoshi Nishimura and Chief Cabinet Secretary Hirokazu Matsuno, with changes expected following the parliamentary session’s conclusion.

Although Kishida has avoided elaborating on his strategy, the reorganization marks a significant attempt to restore faith in his leadership, as his approval ratings have dipped to the lowest levels for a Japanese premier in over a decade. A recent survey revealed a drop in cabinet support to 22.5%, signaling public concern over funding practices and leading to calls for Kishida’s replacement.

The Liberal Democratic Party, known for its internal factions that fundraise and jockey for political appointments, is witnessing Kishida’s effort to break tradition by selecting non-factional members for top positions. The fundraising system, which requires the sale of a certain number of tickets to events, has come under scrutiny. Officials are suspected of not reporting around ¥10 million ($69,000) per person from such sales, as required by law for amounts exceeding ¥200,000.

The potential weakening of the Abe faction, traditionally an advocate for ultra-easy monetary policy, could have economic implications, potentially leading to a rise in the yen’s value. Market analysts foresee risks of stock market declines and increased risk aversion due to government instability.

Kishida’s administration has been under pressure following economic contraction and voter dissatisfaction with his handling of inflation. Efforts to buffer the economic strain include subsidies, tax rebates, and financial assistance for low-income families, extending into 2024. However, these measures have not significantly improved his standing, with a November poll indicating a mere 21% approval rate. This discontent is further exacerbated by Japan’s economy shrinking at its fastest rate since the pandemic peak in the quarter ending in September. Kishida, who has been in office for just over two years, faces the challenge of steering the country through economic recovery while maintaining political stability.

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Japanese Yen Bears Show Resilience Despite Intervention Concerns

Japanese Yen Soars to Three-Month High Versus USD on BoJ Hawkish Outlook

Japanese Yen Soars to Three-Month High Versus USD on BoJ Hawkish Outlook

The Japanese Yen (JPY) has seen a notable surge, reaching a three-month high against the US Dollar (USD) on Thursday. This upward movement is largely attributed to increasing expectations of a policy shift by the Bank of Japan (BoJ). The recent meeting between BoJ Governor Kazuo Ueda and Japanese Prime Minister Fumio Kishida, where discussions about monetary policy and wage hike outlooks took place, has sparked speculation. Market participants are now considering the possibility that the BoJ might move away from its long-standing monetary stimulus, especially in light of predictions of significant wage hikes for the second consecutive year.

This development comes as a stark contrast to the Federal Reserve’s (Fed) expected policy trajectory. The Fed is believed to be concluding its policy-tightening phase and might start reducing rates in 2024. Moreover, the relative safe-haven status of the JPY is further strengthened by a weaker tone in global equity markets. Conversely, the USD has retreated from a two-week high achieved on Wednesday, causing the USD/JPY pair to fall below the 146.00 mark, hitting its lowest level since early September.

Market focus is now turning towards the upcoming release of Weekly Initial Jobless Claims data from the US, which is anticipated to provide further direction during the North American trading session. Additionally, investors are gearing up for the final GDP figures from Japan due on Friday. However, the primary attention will likely be on the US monthly employment data, known as the Nonfarm Payrolls (NFP) report, also scheduled for release on Friday.

The current market dynamics appear to favor JPY bulls, with the fundamental backdrop indicating a downward trajectory for the USD/JPY pair. The JPY’s strength is underpinned by a combination of domestic factors, including the potential policy shift by the BoJ, and international factors such as the Fed’s expected policy easing and global market trends. Investors and traders are closely monitoring these developments, as they could signal a significant shift in currency dynamics and influence future monetary policies in both Japan and the United States. The outcome of the upcoming economic reports will be crucial in determining the short-term direction of the USD/JPY pair, as they provide key insights into the economic health and policy outlook of both countries.

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Japanese Yen Fluctuates Against USD, Maintains Bullish Outlook

Japanese Yen Fluctuates Against USD, Maintains Bullish Outlook

Amid a backdrop of fluctuating market signals, the Japanese Yen (JPY) displayed volatility against the US Dollar (USD) during Tuesday’s Asian trading session. Despite occasional gains and minor losses, the currency pair could not find a clear direction. Market participants are weighing various factors, including the Bank of Japan (BoJ) officials’ comments suggesting no immediate change in the current negative interest rate policy. This cautious stance by the BoJ contrasts with the growing belief among investors that the bank will, in due course, tighten its expansive monetary policy, possibly within the early months of 2024.

Investor sentiment is further influenced by the latest data indicating that inflation in Tokyo has decelerated more than anticipated in November. This development could imply a less aggressive approach to policy tightening than some traders may have expected, thereby dampening the propensity to engage in bold market moves concerning the Yen.

The US Dollar (USD), although reaching a one-week peak, has not been able to fully leverage its position. The market is gradually coming to terms with the possibility that the Federal Reserve (Fed) has concluded its cycle of interest rate hikes and could begin policy easing as soon as March 2024. This prospect is supported by the decrease in US Treasury yields, which tends to diminish the allure of the Dollar. Moreover, the prevailing risk-off mood in Asian equity markets, marked by widespread declines, has favored the Yen, traditionally regarded as a safe-haven asset. This sentiment has played a role in restraining the USD/JPY exchange rate close to the 100-day Simple Moving Average, a key technical level watched by traders.

Market participants are also exercising caution ahead of upcoming key economic indicators from the United States. Notably, the release of the ISM Services Purchasing Managers’ Index (PMI) is keenly awaited, as it may provide fresh insights into the health of the US service sector and potentially influence the Fed’s policy decisions.

Given these conditions, the currency markets are reflecting a complex interplay of anticipatory policy adjustments, shifting economic indicators, and global market sentiments. As a result, while the Yen shows resilience, traders remain hesitant to commit to a clear direction until more definitive economic cues emerge. This cautious trading approach is likely to persist as analysts and investors look to upcoming data releases and central bank communications for clearer signals on the path ahead for both the JPY and the USD.

 

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Japanese Yen Gives Up Early Gains; USD/JPY Recovers from Recent Lows

Japanese Yen Gives Up Early Gains; USD/JPY Recovers from Recent Lows

The Japanese Yen (JPY) recently faced challenges in sustaining its initial gains against the US Dollar (USD), reversing from a nearly three-month high achieved during Monday’s Asian trading session. The Yen’s inability to maintain its upward trajectory was influenced by the Bank of Japan’s (BoJ) policymakers, who hinted that discussions about moving away from negative interest rates were premature. This stance has inadvertently created resistance for the JPY’s progress, while the USD found some reprieve due to a rise in US Treasury yields, helping the USD/JPY currency pair to recover from the lows around the 146.20 mark by approximately 50-60 pips.

Investor sentiment appears to be adapting to the idea that the Federal Reserve (Fed) is likely to keep policies unchanged at its December meeting. Moreover, there’s a growing belief that the Fed may start reducing interest rates by the first half of 2024, which could limit the USD’s appreciation. Additionally, geopolitical tensions in the Middle East and concerns over a potential new respiratory virus outbreak in China could bolster the JPY’s appeal as a safe-haven asset. However, this also calls for prudence before confirming that the USD/JPY pair has reached a near-term bottom and is set for an upward trajectory.

As the calendar turns to a new month, market players are now directing their attention to forthcoming US economic data, particularly the monthly Nonfarm Payrolls report scheduled for release on Friday, which could provide fresh momentum to the currency markets. Despite this, the underlying economic indicators suggest that the USD/JPY pair may be more likely to decline, implying that there might be an extension to the recent steep pullback from the 152.00 level – the year-to-date high reached in November.

Monday’s economic docket from the US was relatively light, with Factory Orders data being the sole release. This lack of substantial economic news leaves room for speculation and could result in heightened sensitivity to any new information. Traders and analysts are closely monitoring these developments, as they could have significant implications for the USD/JPY pair’s movement in the short term.

Given these dynamics, investors and traders are advised to remain vigilant, as the forex market is known for its rapid response to macroeconomic changes and central bank cues. The interplay of economic data releases, geopolitical events, and policy decisions will continue to influence the valuation of the JPY against the USD, presenting both risks and opportunities in the foreign exchange arena.

 

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Australian Dollar Struggles as US Dollar Strengthens Ahead of US PPI Release

Australian Dollar Cuts Gains Before US Data, Powell’s Speech

Australian Dollar Cuts Gains Before US Data, Powell’s Speech

The Australian Dollar (AUD) found its footing to pause a recent downtrend as trading wrapped up for the week, although the resurgence of the US Dollar (USD) weighed on the AUD/USD currency pair. This pressure was compounded by less-than-stellar economic data emerging from China, which typically influences Australian market movements due to the close economic ties between the two nations.

In terms of domestic indicators, the Judo Bank Manufacturing PMI for Australia registered a marginal decrease in November, arriving at 47.7, just slightly down from October’s 48.2, a modest change that suggests a stabilization in manufacturing conditions rather than a pronounced decline. Concurrently, the RBA Commodity Index SDR on a year-over-year basis reflected a decrease of 10.5% for the month, presenting a less severe drop compared to the prior reading, indicating some easing in the downward trend of commodity prices which are vital to the Australian economy.

On the other side of the spectrum, China’s Caixin Manufacturing PMI, a key barometer for the manufacturing sector, provided a positive jolt. The index rose to 50.7 in November, surpassing expectations and the pivotal 50-point mark that separates expansion from contraction. This rebound defies earlier forecasts of a slump and may lend some support to the Australian Dollar, considering the significant trade relations between the two economies.

The currency landscape was also shaped by movements in the US Dollar Index (DXY), which experienced a sharp rise. This was likely influenced by a bump in US Treasury bond yields, with notable increments in both short and long-term rates, signaling investor confidence or expectations of tightening monetary policy. Such dynamics often impact global currency valuations, with a stronger dollar generally leading to weaker performance among its peers, including the AUD.

Meanwhile, US economic data appeared mixed but generally pointed towards a tempering of inflation concerns. The Core Personal Consumption Expenditures Price Index, a favored measure of inflation by the Federal Reserve, showed a slight deceleration in its annual increase, aligning with analyst forecasts. Additionally, the monthly change in the Core PCE Price Index saw a slight decline, while initial jobless claims came in just below expectations, suggesting a still-healthy job market.

Investors and traders now look ahead with bated breath to the upcoming release of the US ISM Manufacturing PMI for November, which will offer further clues about the state of American manufacturing. More significantly, the market is poised for Federal Reserve Chairman Jerome Powell’s speech, which could provide critical insights into the Fed’s view on the current economic landscape and future monetary policy direction. The implications of Powell’s remarks could be far-reaching, potentially setting the tone for market sentiment as the year draws to a close, and shaping the trajectory of the AUD/USD pair as well as broader currency markets.

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Australian Dollar Rises Amid Hopes for Chinese Stimulus After Weak Data

Australian Dollar Rises Amid Hopes for Chinese Stimulus After Weak Data

The Australian Dollar (AUD) has demonstrated resilience, rebounding from its recent slump even as Australia’s economic figures showed a downturn. The AUD/USD pair, after peaking near a four-month high at 0.6676, has seen a slight pullback. This movement comes amid a broad recovery of the US Dollar (USD), which has been gaining ground against several currencies.

The latest data on Australia’s Private Capital Expenditure revealed a 0.6% drop in the third quarter, defying expectations of a 1.0% increase and marking a sharp contrast to the 2.8% growth seen previously. These statistics, issued by the Australian Bureau of Statistics, suggest a weakening in investment sentiment and could imply less inflationary pressure ahead, potentially influencing the Reserve Bank of Australia’s (RBA) decisions on interest rates.

In China, the manufacturing sector’s sluggishness was highlighted by the November NBS Manufacturing PMI, which fell slightly to 49.4 from 49.5, against forecasts of a rise to 49.7. Similarly, the Non-Manufacturing PMI dipped to 50.02, not meeting the anticipated 51.1 mark. These lower-than-expected figures raise the prospect of additional economic stimulus measures, a sentiment that appears to be providing some support to the AUD, as China is a significant trade partner for Australia.

The US Dollar Index (DXY), after experiencing a consecutive four-day decline, found some stability on Wednesday. The plateau was helped by a surprising uptick in the US GDP Annualized rate, which the US Bureau of Economic Analysis reported had increased more than expected, reflecting a healthy expansion of the economy in the third quarter. Nonetheless, the DXY has struggled to maintain its footing, with investors looking ahead to upcoming significant US economic reports.

Key among the anticipated releases from the US are the weekly Jobless Claims, which are projected to rise to 220,000 from the prior figure of 209,000. Additionally, the Core Personal Consumption Expenditure (PCE) Price Index for October is on the docket, with analysts forecasting a deceleration in inflationary pressures, with the year-over-year rate possibly dropping from 3.7% to 3.5%. These figures are especially scrutinized as they can offer guidance on the Federal Reserve’s future monetary policy decisions, given that the PCE is the Fed’s preferred inflation gauge.

All these economic indicators from the US, China, and Australia are playing a critical role in shaping the dynamics of the AUD/USD pair, as traders and investors assess the potential impact of economic health and policy decisions on currency valuations.

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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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