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Japanese Yen Nears Multi-Month

Japanese Yen Recovery from Multi-Month Low Against USD Shows Limited Bullish Commitment

Japanese Yen Recovery from Multi-Month Low Against USD Shows Limited Bullish Commitment

The Japanese Yen (JPY) has gained ground for a second consecutive day, rebounding from a recent multi-month low near 153.20 against the US Dollar (USD) reached earlier this week. This recovery follows verbal interventions by Japanese authorities, which have been instrumental in supporting the Yen. Meanwhile, US Dollar bulls have turned cautious amid a modest dip in US Treasury bond yields, adding a downward bias to the USD/JPY pair.

However, doubts about further interest rate hikes by the Bank of Japan (BoJ) in 2024, compounded by uncertainty around upcoming elections in Japan and a drop in Tokyo’s core inflation rate below the 2% target, may limit further JPY appreciation. Additionally, a generally positive risk sentiment tempers aggressive bets on the Yen as a safe-haven asset. Concurrently, expectations of smaller rate cuts by the Federal Reserve (Fed) may continue to support the USD and curb losses for the USD/JPY pair.

Market Movers: Yen Supported by Intervention, Economic Concerns Persist

Friday’s data from the Statistics Bureau of Japan showed the headline Tokyo Consumer Price Index (CPI) rose by 1.8% year-over-year in October, down from 2.2% in the previous month. Core CPI, excluding fresh food prices, matched market expectations at 1.8% but remained below the BoJ’s 2% target, signaling persistent economic challenges. A private-sector survey released Thursday revealed that Japan’s manufacturing and services sectors contracted in October, pointing to weak economic conditions and raising doubts about the BoJ’s potential for further rate hikes in the near term.

Japan’s Economy Minister Ryosei Akazawa stressed the need for stable currency movements reflecting economic fundamentals, acknowledging the varied effects of a weaker Yen on the economy. Japan’s vice finance minister for international affairs, Atsushi Mimura, reiterated that the government closely monitors FX volatility, aiming to mitigate excess fluctuations.

The US Dollar, meanwhile, paused its recent pullback from a three-month high amid expectations of less aggressive policy easing by the Fed, lending some support to the USD/JPY pair. Traders will be watching Friday’s US macro data, including Durable Goods Orders and the revised Michigan Consumer Sentiment Index, as Japan’s Sunday election approaches.

Technical Outlook: Key Levels for USD/JPY

Technically, a break below the 151.60-151.55 support zone could accelerate the USD/JPY’s slide to the 151.00 level. Further declines may find support near 150.65, a confluence of the 200-day Simple Moving Average (SMA) and the 50% Fibonacci retracement level of the July-September pullback. If this level breaks, it may signal the end of the recent rally, shifting bias toward bearish traders.

Alternatively, a move beyond 152.00 could see USD/JPY testing the 152.60-152.65 region. Continued upward momentum could allow the pair to approach the 153.00 mark and, if surpassed, the 61.8% Fibonacci level at 153.20. Clearing this point would likely open the path toward further gains around the 154.00 level and the 154.30 resistance zone.

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Australian Dollar Drops on Weak GDP Data and RBA Rate Cut Bets

Australian Dollar Holds Steady as US Dollar Softens Ahead of PMI Data

Australian Dollar Holds Steady as US Dollar Softens Ahead of PMI Data

The Australian Dollar (AUD) strengthened against the US Dollar (USD) on Thursday, supported by the release of domestic Purchasing Managers Index (PMI) data. The AUD/USD pair moved higher as the USD experienced a slight dip, driven by a modest pullback in US Treasury yields, with the 2-year and 10-year yields standing at 4.07% and 4.23%, respectively, at the time of writing.

The Australian Dollar’s performance is further bolstered by hawkish sentiment surrounding the Reserve Bank of Australia (RBA), underpinned by strong employment figures. Earlier in the week, RBA Deputy Governor Andrew Hauser highlighted the high labor participation rate, emphasizing that the central bank remains data-driven but not overly fixated on any single data point.

The USD, meanwhile, came under pressure following the release of the Federal Reserve’s (Fed) Beige Book on Wednesday. The report noted that economic activity across the US was “little changed in nearly all Districts,” contrasting with August’s report, which had indicated growth in three Districts and stable activity in nine.

Market participants are now closely watching the release of the S&P Global Purchasing Managers Index (PMI), a key indicator of US private sector activity in both the manufacturing and services sectors, which is scheduled for Thursday.

Market Movers: Australian Dollar Gains on RBA Hawkish Sentiment

According to the CME FedWatch Tool, there is an 88.9% chance of a 25-basis-point rate cut from the Federal Reserve, with no expectation of a larger 50-basis-point reduction.

Australia’s Judo Bank Composite PMI slightly rose to 49.8 in October from 49.6 in September, marking the second consecutive month of contraction in private sector output. The Services PMI edged up to 50.6 from 50.5, marking its ninth consecutive month of expansion, while the Manufacturing PMI slipped to 46.6 from 46.7, continuing its decline.

In a social media post, Federal Reserve Bank of San Francisco President Mary Daly noted that the US economy is in a better position, with inflation significantly lower and the labor market stabilizing. Meanwhile, Minneapolis Fed President Neel Kashkari indicated that the Fed is monitoring the labor market for signs of instability and suggested that any rate cuts will likely be gradual rather than aggressive.

China’s central bank, the People’s Bank of China (PBoC), lowered its 1-year Loan Prime Rate (LPR) to 3.10% from 3.35% and its 5-year LPR to 3.60% from 3.85%, as expected. These cuts aim to stimulate domestic economic activity in China, which could, in turn, boost demand for Australian exports.

National Australia Bank recently revised its projection for the RBA, now expecting the first rate cut in February 2025, earlier than the previously anticipated May timeline. The bank foresees gradual cuts, with rates expected to reach 3.10% by early 2026.

Technical Analysis: Australian Dollar Remains Below 0.6650

The AUD/USD pair is trading around 0.6640 on Thursday, maintaining a bearish outlook in the short term. The pair remains below the nine-day Exponential Moving Average (EMA), and the 14-day Relative Strength Index (RSI) is below 50, reinforcing the negative sentiment.

On the downside, the AUD/USD pair may retest its two-month low of 0.6614, last seen on Wednesday. The next key support lies at the psychological level of 0.6600.

On the upside, resistance is expected at the nine-day EMA at 0.6680, followed by the 50-day EMA at 0.6728. A break above these levels could pave the way for a potential move toward the psychological resistance at 0.6800.

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Japanese Yen Weakens Below 152.00 Against USD, Hits Fresh Three-Month Low

Japanese Yen Weakens Below 152.00 Against USD, Hits Fresh Three-Month Low

Japanese Yen Weakens Below 152.00 Against USD, Hits Fresh Three-Month Low

The Japanese Yen (JPY) extended its losing streak against the US Dollar (USD) for a third consecutive day, pushing the USD/JPY pair above the 152.00 level for the first time since late July during Wednesday’s Asian session. This recent weakness is driven by uncertainty over the Bank of Japan’s (BoJ) ability to raise interest rates further in 2024, a key factor in the Yen’s decline since early October.

The drop below the psychological 150.00 level earlier this month sparked verbal interventions from Japanese officials, though these efforts have done little to bolster the JPY. Even the prevailing risk-off sentiment, fueled by ongoing geopolitical tensions in the Middle East, has not provided the usual support for the safe-haven currency.

Meanwhile, expectations that the Federal Reserve (Fed) will ease its pace of rate cuts have driven US Treasury yields to a three-month high, boosting the USD. This further reinforces the outlook for continued JPY depreciation and more gains for the USD/JPY pair.

Market Movers: JPY Weakness Persists Despite Intervention Warnings

  • The Japanese Yen has fallen to its weakest level in nearly three months as doubts grow over the BoJ’s rate-hike plans.
  • Verbal interventions from Japanese authorities after the JPY fell below the key 150.00 mark have failed to reverse its downward trend.
  • Slower expected rate cuts by the Fed and concerns over increased US fiscal deficits after the upcoming presidential election have triggered a bond market selloff.
  • Yields on the 10-year US Treasury bond have reached levels not seen since July, pushing the US Dollar to its highest point since early August.
  • San Francisco Fed President Mary Daly highlighted that inflation has eased and the labor market is on a more sustainable path, supporting the Fed’s cautious approach.
  • Former President Donald Trump’s rising odds in the US election have led to speculation about inflation-inducing tariffs.
  • Geopolitical risks remain high as markets eye a potential Israeli strike on Iran. Hezbollah fired rockets at two bases near Tel Aviv and a naval base near Haifa on Tuesday.
  • Diplomatic efforts to resolve the year-long Middle East conflict have thus far failed, reducing investor appetite for riskier assets.
  • Traders await the US Existing Home Sales report, while the focus remains on BoJ Governor Kazuo Ueda’s upcoming speech at the IMF-hosted “Governors Talk.”
  • Tokyo consumer inflation data, due Friday, will also be a key factor ahead of Japan’s general election on October 27 and the BoJ meeting on October 31.

Technical Outlook: USD/JPY Breakout Above 152.00 Signals Bullish Momentum

From a technical standpoint, the recent breakout above the 100-day Simple Moving Average (SMA) signals further bullish potential for the USD/JPY pair. Oscillators on the daily chart remain in positive territory, suggesting the possibility of additional gains beyond the 152.00 mark. Follow-through buying could continue to drive the pair upward in line with the ongoing uptrend seen over the past month.

However, the Relative Strength Index (RSI) is nearing overbought levels, prompting caution among aggressive bulls. A period of near-term consolidation or a modest pullback may be prudent before positioning for further appreciation.

On the downside, support is likely to be found near the 151.20-151.15 region, with a break below the 151.00 mark seen as a buying opportunity. The 150.60 level could act as a key support point, below which the pair may accelerate its decline toward the 150.00 psychological level.

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Australian Dollar Supported by Hawkish RBA Outlook

Australian Dollar Supported by Hawkish RBA Outlook, But Faces Pressure from Rising US Treasury Yields

Australian Dollar Supported by Hawkish RBA Outlook, But Faces Pressure from Rising US Treasury Yields

The Australian Dollar (AUD) regained some of its recent losses against the US Dollar (USD) on Tuesday, buoyed by a hawkish stance from the Reserve Bank of Australia (RBA) and strong domestic employment data. However, the AUD/USD pair continues to face resistance due to surging US Treasury yields, which rose by over 2% on Monday amid concerns about inflation and economic strength in the US.

The Aussie Dollar’s resilience is supported by market expectations that the RBA may maintain a tighter monetary policy in the near term, given positive labor market conditions in Australia. Additionally, China’s recent interest rate cuts have provided a boost, as the nation remains Australia’s largest trading partner, and lower borrowing costs in China could stimulate demand for Australian exports.

In contrast, the US Dollar has gained strength following economic data that suggests the Federal Reserve (Fed) is unlikely to implement a large rate cut in November. The likelihood of a modest 25-basis-point cut stands at 89.1%, with no significant expectations for a more aggressive 50-basis-point reduction. Rising US bond yields, driven by stronger retail sales and a drop in initial jobless claims, further support the greenback, creating headwinds for AUD/USD.

Traders are now awaiting the release of Purchasing Managers Index (PMI) reports from both the US and Australia on Thursday, which could shed light on the health of their respective economies and influence future monetary policy decisions.

Market Movers: Australian Dollar Declines Amid Risk Aversion

  • US 2-year and 10-year Treasury yields are at 4.02% and 4.19%, respectively, reflecting rising demand for US debt.
  • Minneapolis Fed President Neel Kashkari noted that the Fed is closely monitoring the labor market, signaling that rate cuts will be gradual and moderate.
  • San Francisco Fed President Mary Daly emphasized the central bank’s data-driven approach to interest rate adjustments.
  • RBA Deputy Governor Andrew Hauser, speaking at the CBA 2024 Global Markets Conference, expressed surprise at Australia’s strong employment growth, highlighting the country’s high labor participation rate.
  • The People’s Bank of China (PBoC) lowered its 1-year Loan Prime Rate (LPR) to 3.10% and the 5-year LPR to 3.60%, which could boost China’s domestic economy and demand for Australian exports.
  • National Australia Bank revised its forecast, expecting the RBA’s first rate cut in February 2025, earlier than previously projected.

Technical Outlook: AUD/USD Faces Bearish Pressure

The AUD/USD pair is trading around 0.6660, close to eight-week lows. On the daily chart, the pair remains below the nine-day Exponential Moving Average (EMA), signaling a bearish short-term trend. The 14-day Relative Strength Index (RSI) is also below 50, further reinforcing this sentiment.

On the downside, the pair may test support at its eight-week low of 0.6622, with the psychological level of 0.6600 providing further support. Resistance is expected at the nine-day EMA around 0.6700, followed by the 50-day EMA at 0.6734. A break above these levels could pave the way for a move toward 0.6800.

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Gold Price Overbought, Bulls Should Exercise Caution Amid Renewed

Gold Price Overbought, Bulls Should Exercise Caution Amid Renewed USD Strength

Gold Price Overbought, Bulls Should Exercise Caution Amid Renewed USD Strength

Gold (XAU/USD) remains near its intraday highs through early European trading, hovering close to its all-time peak of around $2,730. The continued accommodative monetary policy environment and persistent geopolitical tensions, especially from the Middle East conflicts, support the precious metal’s upward momentum. Additionally, political uncertainty in the US has contributed to gold’s rally over the past two weeks.

Despite this, expectations of modest rate cuts by the Federal Reserve (Fed) are helping keep US Treasury yields elevated, which in turn strengthens the US Dollar (USD) and invites some dip-buying interest. The USD Index (DXY) is back near its recent high, the highest since early August. Combined with slightly overbought conditions in the daily gold chart, further gains for the metal could be limited.

Daily Market Movers: Gold Holds Up Despite USD Strength

  • Geopolitical risks: The situation in the Middle East remains volatile, with rising tensions between Israel and Iran adding to concerns. Israel has intensified attacks on Lebanon and Gaza, raising fears of a broader regional conflict, which supports safe-haven demand for gold.
  • US political uncertainty: Polls show a tight race between Donald Trump and Vice President Kamala Harris, adding further risk and boosting demand for gold as a safe-haven asset.
  • Central bank actions: The European Central Bank has recently cut interest rates for the third time this year, while the Fed and the Bank of England are expected to lower borrowing costs further, adding to the support for gold’s bullish trend.

Technical Outlook: Bulls Remain Strong, But Caution Advised

Technically, gold’s sustained strength above $2,700 signals continued bullish momentum. However, with the Relative Strength Index (RSI) surpassing 70, signaling overbought conditions, traders may want to wait for consolidation or a pullback before positioning for further gains. Immediate support lies at the $2,700 level, with potential downside targets around the $2,662-2,660 range and further support near $2,647-2,646. A break below these levels could accelerate selling toward $2,600.

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Japanese Yen Gains Strength Against USD Amid BoJ Policy Uncertainty

Japanese Yen Gains Traction Against USD Amid BoJ Uncertainty

Japanese Yen Gains Traction Against USD Amid BoJ Uncertainty

The Japanese Yen (JPY) is seeing an upward trend during Friday’s Asian session, partially recovering from the previous day’s losses against the US Dollar (USD), reaching its strongest level since early August. Several factors are driving the JPY’s gains, including verbal intervention from Japanese officials and stronger domestic inflation data, which could potentially prompt the Bank of Japan (BoJ) to consider rate hikes.

Contributing to the JPY’s strength is a modest pullback in the USD from its two-and-a-half-month high. However, expectations that the BoJ will refrain from raising interest rates, given signs of easing inflation and the upcoming general election on October 27, may limit the Yen’s potential gains. Additionally, the market is anticipating smaller interest rate cuts by the US Federal Reserve (Fed), which could further cap losses in the USD/JPY pair.

Key Market Movers: Verbal Intervention and Inflation Data Boost Yen

Japan’s Vice Finance Minister for International Affairs, Atsushi Mimura, expressed concern over the rapid and one-sided moves in the Yen, stating that excessive volatility in the currency market is undesirable. Furthermore, a government spokesperson emphasized the importance of stable currency movements that reflect economic fundamentals, signaling that authorities are closely monitoring the situation, particularly speculative moves in the market.

In addition to the intervention, government data showed a deceleration in Japan’s headline Consumer Price Index (CPI) to 2.5% YoY in September, while the Core CPI, excluding fresh food, eased from a 10-month high. These signs of easing inflation, coupled with opposition to rate hikes from Prime Minister Shigeru Ishiba, raise questions about how much room the BoJ has to pursue further tightening.

Meanwhile, the Chinese economy’s 0.9% growth in the third quarter of 2024, coupled with stronger-than-expected Retail Sales and Industrial Production, had little impact on market sentiment.

On the US side, strong economic data continues to support the Greenback. Thursday’s positive US data reaffirmed market bets for a less aggressive Fed rate-cutting cycle, keeping US Treasury yields elevated, which serves as a tailwind for the USD. The USD Index (DXY) remains near its highest level since August, which could limit the USD/JPY pair’s downside potential.

USD/JPY Technical Outlook: Dips Toward 149.20 Present Buying Opportunities

From a technical standpoint, the breakout above the psychological 150.00 level signals renewed bullish momentum. Indicators on the daily chart remain comfortably in positive territory, with no immediate signs of being overbought, suggesting that the USD/JPY pair could continue to climb.

Any pullbacks toward the 149.20 level may be viewed as buying opportunities, with further support at the 149.00 level. Below this, the pair could see a corrective fall toward the 148.60-148.55 region and eventually test the 148.00 mark, with a key support zone around 147.35-147.30. A break below this area could shift the market bias toward bearish traders.

On the upside, a sustained move above the overnight high of 150.30 could push the pair toward the August peak at 150.85-150.90, with potential further gains beyond the 151.00 level, opening the door to a near-term rally toward 152.00.

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Crude Oil Steadies as Markets Monitor Middle East Tensions

Crude Oil Steadies as Markets Monitor Middle East Tensions and China’s Economic Outlook

Crude Oil Steadies as Markets Monitor Middle East Tensions and China’s Economic Outlook

Crude oil prices stabilized on Thursday after a four-day losing streak that resulted in a nearly 7% weekly drop. The market has found a temporary floor, with traders weighing geopolitical risks, particularly doubts over whether Israeli Prime Minister Benjamin Netanyahu will honor his pledge to the U.S. not to strike Iranian oil facilities. Further support for oil came from a surprise drawdown in U.S. stock piles, with the American Petroleum Institute (API) reporting a decrease of 1.58 million barrels for the week ending October 11, compared to expectations of a 2.3 million barrel increase.

Meanwhile, the U.S. Dollar Index (DXY), which tracks the Greenback against six major currencies, is bracing for a volatile session. In addition to a slew of U.S. economic data, markets are watching the European Central Bank (ECB), which is expected to announce a 25 basis point rate cut. With core Eurozone economies facing significant challenges, ECB President Christine Lagarde’s response to prevent further Euro weakness will be closely scrutinized.

As of this writing, West Texas Intermediate (WTI) crude oil is trading at $70.00, while Brent crude is at $74.09.

Key Market Drivers

  1. China’s Economic Stimulus: China has unveiled a plan to inject 4 trillion yuan (CNY) into its housing market, although markets reacted poorly to the lower-than-expected figure, down from an earlier 6 trillion yuan estimate. The announcement has had limited impact on oil prices so far.
  2. Middle East Tensions: Pressure continues to mount on Israeli Prime Minister Netanyahu, with growing calls within his cabinet to disregard U.S. advice and strike Iranian oil facilities. An article from an opposition leader in the Jerusalem Post urging an immediate attack has heightened tensions, according to Reuters.
  3. S. Oil Stockpiles: Later today, the Energy Information Administration (EIA) will release its weekly oil inventory data for the week ending October 11. Analysts expect a modest build of 2.3 million barrels, following a larger-than-anticipated increase of 5.81 million barrels the previous week.

Oil Price Technical Outlook: Struggle at $70.00

Crude oil is battling to hold the $70.00 level, but the path ahead remains uncertain. Geopolitical events could cause prices to spike, but absent any major developments, oil could see further declines. As markets hedge against a potential presidential win by former U.S. President Donald Trump in the November 5 elections, crude oil appears uncertain on how to factor this into pricing.

For crude oil to regain momentum, it must first close above the critical resistance at $71.46, a level that provided support earlier in the week. Beyond this, the next significant challenge lies at $75.28, where the 100-day Simple Moving Average (SMA) aligns with other key technical indicators.

On the downside, $71.46 has now flipped to resistance. If oil falls further, traders will look to the $67.11 level, which provided support in May-June 2023. A break below this could send prices toward the 2024 year-to-date low of $64.75, followed by the 2023 low of $64.38.

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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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US Data and Trump Drive Sentiment in the FX Market

US Data and Trump Drive Sentiment in the FX Market

The US Dollar Index (DXY) managed to recover some ground, though a breakout above the 108.00 level remains out of reach for now. Weekly Initial Jobless Claims take the spotlight alongside the EIA’s report on US crude oil inventories, providing key cues for market sentiment.

The EUR/USD rally lost steam after reaching multi-week highs above the 1.0400 level. Meanwhile, the European Commission is set to release its preliminary Consumer Confidence data for January, which could influence further movement in the pair.

The GBP/USD pair traded lower as the modest recovery in the US Dollar applied pressure. Focus shifts to the UK’s CBI Business Optimism Index and CBI Industrial Trends Orders, which will offer fresh insights into the country’s economic outlook.

The USD/JPY pair remained volatile, climbing above the 156.00 level as investors positioned themselves ahead of the Bank of Japan’s (BoJ) January 24 meeting. In the meantime, upcoming Trade Balance data and Foreign Bond Investment figures will be closely monitored.

The AUD/USD pair saw another indecisive session, trading near the critical 0.6300 level. Attention now turns to Australia’s preliminary S&P Global Manufacturing and Services PMIs, which will be key for determining near-term market direction.

Commodity Market Highlights

  • WTI crude oil prices extended their decline, revisiting the $75.00 per barrel level as markets continued to digest the implications of President Trump’s policies.
  • Gold prices rose for the third consecutive session, exceeding $2,760 per troy ounce amid heightened uncertainty surrounding President Trump’s announcements.
  • Silver prices faced selling pressure after failing to break above the $31.00 per ounce threshold, reflecting mixed sentiment in the precious metals market.

The FX market remains heavily influenced by US data releases and evolving geopolitical developments, with Trump’s policies adding another layer of volatility.

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USD/JPY Climbs Toward 156.00 as Japanese Yen Maintains Intraday Weakness

The Japanese Yen (JPY) weakens broadly during Wednesday’s Asian trading session, allowing the USD/JPY pair to extend its recovery from over a one-month low. A risk-on sentiment, reflected in positive equity market performance, undermines the safe-haven JPY. Additionally, a modest uptick in US Treasury bond yields supports the US Dollar (USD), further pressuring the lower-yielding JPY.

Despite the JPY’s current softness, meaningful depreciation remains constrained by growing expectations that the Bank of Japan (BoJ) will announce an interest rate hike following its two-day policy meeting concluding Thursday. Conversely, market bets on two rate cuts by the Federal Reserve (Fed) later this year could weigh on US bond yields and the USD, urging caution before confirming a near-term bottom for the USD/JPY pair.

Japanese Yen Bulls Remain Cautious Amid Risk-On Sentiment

Hawkish commentary from BoJ officials, combined with optimism about wage growth sustaining Japan’s 2% inflation target, bolsters the case for a rate hike. BoJ policymakers have reiterated that widespread, sustained wage increases are a prerequisite for tightening monetary policy.

On Wednesday, labor negotiations between Japan’s largest business lobby, Keidanren, and trade unions commenced, with expectations for significant wage hikes. These developments align with Japanese Prime Minister Shigeru Ishiba’s focus on achieving wage growth surpassing inflation, an integral part of his economic strategy. Markets are pricing in a more than 90% probability that the BoJ will increase interest rates from 0.25% to 0.5%—a level unseen since the 2008 global financial crisis.

US Factors: Tariff Talk and Inflation Expectations

US President Donald Trump has hinted at imposing 25% tariffs on imports from Canada and Mexico as early as February, alongside the possibility of broader tariff measures. While these tariffs could hinder economic growth, they also have the potential to increase inflation, complicating the Fed’s policy outlook.

Meanwhile, recent US inflation data, including the Producer Price Index (PPI) and Consumer Price Index (CPI), indicates easing inflationary pressures, strengthening expectations for two additional Fed rate cuts in 2025.

Technical Outlook: USD/JPY Key Levels

The USD/JPY pair has rebounded from a one-month low near the 154.75 level and is testing the 155.00 psychological barrier. Oscillators on the daily chart lack negative momentum, suggesting caution for bearish traders.

  • Support Levels: A sustained break below 155.00 could lead to further declines toward 154.50-154.45, with potential extensions to 154.00, mid-153.00s, and 153.00.
  • Resistance Levels: Immediate resistance is seen near the 156.00 mark, followed by the 156.25 region (overnight swing high) and the weekly top at 156.55-156.60. A sustained move beyond these levels could open the door to 157.00, 157.25-157.30, and 158.00, with a potential retest of the multi-month peak near 159.00.
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Japanese Yen Trims Intraday Gains Against USD; Bullish Momentum Persists

Japanese Yen Trims Intraday Gains Against USD; Bullish Momentum Persists

The Japanese Yen (JPY) holds its ground against the US Dollar (USD) in the European session, trading just below the one-month high reached earlier on Tuesday. Renewed fears of a global trade war, sparked by US President Donald Trump’s tariff comments, coupled with expectations of a Bank of Japan (BoJ) interest rate hike later this week, underpin the JPY’s strength as a safe-haven currency.

Factors Supporting the Japanese Yen
US Treasury bond yields have extended a week-long decline amid expectations of two Federal Reserve (Fed) rate cuts this year. This narrowing of the US-Japan rate differential provides additional support to the JPY. However, the USD/JPY pair has rebounded over 50 pips from its intraday low of 154.75, buoyed by a modest recovery in the USD after its overnight drop to a two-week low.

BoJ Rate Hike Expectations Drive Sentiment
Hawkish signals from BoJ Governor Kazuo Ueda and Deputy Governor Ryozo Himino, alongside rising inflationary pressures in Japan, have significantly bolstered market expectations for a BoJ rate hike. The probability of a rate increase at this week’s policy meeting stands at 80%. Reports suggest the BoJ will finalize its decision after closely analyzing economic data, market trends, and the potential implications of US economic policies.

Trump’s Trade Policies Add to Volatility
President Trump’s announcement of impending 25% tariffs on Canada and Mexico, effective as early as February, has reignited concerns about global trade tensions. He further warned of potential tariffs on China if it fails to approve a TikTok deal. These developments revive inflation concerns, which could push the Fed to maintain a hawkish stance and support a USD rebound from its recent lows.

Comments from Japanese Officials
Japanese Finance Minister Katsunobu Kato reaffirmed the BoJ’s commitment to achieving a 2% inflation target while emphasizing the importance of assessing US economic policies’ global impact. Vice Finance Minister Atsushi Mimura also highlighted the need to monitor China’s export strength and its influence on Japan’s economy.

Technical Analysis: Key Levels to Watch for USD/JPY
The USD/JPY pair remains resilient above the 155.00 level, with the lower boundary of a multi-month ascending channel providing support. A confirmed breakdown below this level is essential for bears to gain control. A slide below 154.50-154.45 could accelerate losses toward the 154.00, mid-153.00s, and ultimately the 153.00 region.

On the upside, the 156.25 mark serves as the immediate resistance. A break above the overnight high at 156.58-156.60 could pave the way for a recovery to 157.00. Sustained momentum beyond 157.30 may target the 157.60 and 158.00 levels, with potential for retesting the multi-month high of 159.00 recorded on January 10.

Outlook
With no significant economic data releases on Tuesday from either Japan or the US, market focus remains on the BoJ’s two-day policy meeting beginning Thursday. This event is expected to shape the near-term direction of the Japanese Yen. In the meantime, trade war fears and shifting expectations for US and Japanese monetary policies continue to drive market dynamics.

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US Core PCE Inflation Likely to Hold Steady

US Core PCE Inflation Likely to Hold Steady, Casting Doubt on Additional Fed Rate Cuts

US Core PCE Inflation Likely to Hold Steady, Casting Doubt on Additional Fed Rate Cuts

The Bureau of Economic Analysis (BEA) is set to release October’s Personal Consumption Expenditures (PCE) Price Index on Wednesday at 13:30 GMT. As the Federal Reserve’s (Fed) preferred inflation gauge, this data will provide insights into the trajectory of inflation and its potential impact on monetary policy decisions.

This release coincides with a busy macroeconomic calendar due to the Thanksgiving holiday, including Initial Jobless Claims, Durable Goods Orders, and the second estimate of Q3 GDP. The overlapping reports may dilute the immediate market impact of the PCE data on the US Dollar (USD).

Core PCE Inflation Outlook

The core PCE Price Index, excluding volatile food and energy prices, is expected to rise by 0.3% month-on-month (m/m) in October, matching September’s increase. Annually, core PCE inflation is forecasted to edge higher to 2.8% from 2.7%, while the headline annual PCE inflation may rise to 2.3% from 2.1%.

Fed’s Perspective on Inflation

At its November meeting, the Fed reduced the policy rate by 25 basis points to a range of 4.5%-4.75%, signaling inflation had “made progress” toward the 2% target. However, policymakers noted limited movement in core PCE inflation over recent months, raising questions about the pace of further rate adjustments.

TD Securities predicts headline PCE inflation to rise 0.27% m/m, with core PCE at 0.31% m/m, and supercore inflation (services excluding housing) accelerating to 0.39% m/m. Consumer spending, a key economic driver, is projected to increase just 0.3% m/m in nominal terms, showing muted real growth.

Market Implications and Risks

The CME Group’s FedWatch Tool suggests a 41% probability of the Fed maintaining its current policy rate at the December meeting. This highlights the USD’s two-way risk heading into the release.

A stronger-than-expected PCE print could reignite hawkish speculation, potentially lifting the USD and pressuring equities. Conversely, weaker data might bolster the case for additional rate cuts, dampening the USD.

Key Takeaways for Markets

  • Inflation Stickiness: Any upward surprise in core PCE could challenge the Fed’s easing trajectory.
  • Consumer Spending Concerns: Sluggish spending data may hint at broader economic headwinds.
  • Two-Way Risks: Traders must navigate mixed signals from inflation, growth, and employment metrics, making the USD’s reaction to the PCE data less predictable.

This report will provide critical clues as markets evaluate whether inflation’s progress aligns with the Fed’s expectations and assess the likelihood of further monetary easing heading into 2024.

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Australian Dollar Holds Steady After Initial Gains Amid Stable US Dollar

Australian Dollar Holds Steady After Initial Gains Amid Stable US Dollar

Australian Dollar Holds Steady After Initial Gains Amid Stable US Dollar

The Australian Dollar (AUD) maintained a steady position on Monday after paring earlier gains as the US Dollar (USD) continued to undergo a corrective pullback. The USD’s downward trajectory was partly driven by optimism in bond markets following President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary. Bessent, known for his fiscal conservatism and Wall Street experience, contributed to improved market sentiment.

Key Drivers for AUD Strength:

  1. Global and Domestic Market Optimism:
    • The AUD benefited from robust foreign inflows as Australia’s equity markets surged to record highs.
    • The S&P/ASX 200 Index climbed 0.63% to exceed 8,450 points, mirroring Wall Street’s rally, with the Dow Jones closing at record highs on Friday.
  2. Hawkish RBA Outlook:
    • The Reserve Bank of Australia (RBA) reinforced its commitment to restrictive monetary policy until inflation sustainably aligns with its target range.
    • The RBA emphasized a data-dependent approach for future decisions, keeping markets attentive to incoming economic indicators.
  3. Upcoming Domestic Data Focus:
    • Traders are eyeing Australia’s October Monthly Consumer Price Index (CPI) as a pivotal release that could influence expectations regarding the RBA’s next policy moves.

Outlook for the AUD/USD Pair:
While the AUD finds support from improved risk sentiment and a steady RBA stance, its trajectory will largely depend on upcoming data releases and broader USD dynamics. A sustained rally in Australian equities and solid inflation data could further strengthen the currency, while any shifts in global risk appetite or USD recovery may temper its gains.

Markets remain focused on domestic CPI figures and potential updates from the US Federal Reserve, both of which will play a crucial role in determining the near-term path of the AUD/USD exchange

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UK CPI Expected to Accelerate in October

UK CPI Expected to Accelerate in October, Reducing Odds of Further BoE Rate Cuts

UK CPI Expected to Accelerate in October, Reducing Odds of Further BoE Rate Cuts

The Office for National Statistics (ONS) will release the United Kingdom’s Consumer Price Index (CPI) data for October on Wednesday at 07:00 GMT. This inflation report is pivotal for determining the Bank of England’s (BoE) future interest rate policy and could significantly impact the Pound Sterling’s trajectory.

Key Expectations for UK CPI Data

  • Annual Headline CPI: Expected to rise to 2.2% in October from 1.7% in September, moving back above the BoE’s 2.0% target.
  • Core CPI Inflation: Forecasted to ease slightly to 3.1% YoY from 3.2% in September.
  • Services Inflation: Anticipated to edge lower to 4.8% YoY from 4.9%, aligning closely with the BoE’s 5.0% projection.
  • Monthly CPI: Projected to increase by 0.5% after a flat 0% reading in September.

Societe Generale analysts attribute the expected headline CPI rise to base effects and higher utility prices, noting that services inflation could climb slightly to 5% YoY, though downside risks remain.

Impact on BoE Policy and GBP/USD

Following its November 7 decision to cut interest rates by 25 basis points to 4.75%, the BoE emphasized a cautious approach to future rate adjustments, maintaining a restrictive stance to ensure inflation returns sustainably to its 2.0% target.

  • Higher-than-Expected CPI: Would likely reduce market expectations of further rate cuts and could provide a boost to the Pound Sterling. GBP/USD may see a recovery from recent six-week lows, with the pair testing resistance levels.
  • Lower-than-Expected CPI: Could reinforce the case for continued BoE easing, weighing heavily on GBP/USD and potentially pushing the pair toward the 1.2500 psychological level.

BoE Governor Andrew Bailey recently highlighted inflationary pressures from the Labour government’s tax policies, reinforcing the central bank’s cautious approach to monetary easing.

Technical Outlook for GBP/USD

Key Levels to Watch:

  • Upside: Immediate resistance lies at the 1.2750 level, followed by the 200-day SMA at 1.2820 and the 21-day SMA at 1.2858.
  • Downside: Immediate support is seen at multi-month lows of 1.2597, with further downside potential toward the 1.2500 round level.

RSI and Moving Averages:
The 14-day Relative Strength Index (RSI) remains below 50, signaling persistent downside risks. Additionally, the 21-day SMA is poised to cross below the 200-day SMA, forming a bearish “Death Cross” pattern, which could amplify selling pressure.

Conclusion

The UK CPI report will play a critical role in shaping market expectations for the BoE’s monetary policy trajectory. A stronger inflation print may support a GBP/USD recovery, while weaker-than-expected data could deepen losses. Traders should also watch for additional cues from the UK Finance Minister’s Autumn Budget and BoE commentary to gauge the broader economic outlook.

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Australian Dollar Steady Amid RBA’s Restrictive Policy Outlook

Australian Dollar Holds Steady as RBA Minutes Highlight Need for Restrictive Policy

Australian Dollar Holds Steady as RBA Minutes Highlight Need for Restrictive Policy

The Australian Dollar (AUD) remained stable against the US Dollar (USD) after the release of the Reserve Bank of Australia’s (RBA) November Meeting Minutes on Tuesday. The minutes underscored the board’s cautious stance on inflation, emphasizing the continued need for restrictive monetary policy to mitigate potential risks.

While the RBA board did not signal an “immediate need” to adjust the cash rate, it left the option open for future changes, maintaining flexibility in its policy approach. Current projections are based on the assumption that the cash rate will stay unchanged until mid-2025.

The AUD also found support from recent hawkish comments by RBA Governor Michele Bullock. Bullock stressed that interest rates are already at restrictive levels and will not be altered until the central bank is confident in the inflation outlook.

Meanwhile, developments in China—a key trading partner for Australia—add to market sentiment. On Tuesday, a senior official from China’s National Development and Reform Commission (NDRC) stated that the country has sufficient policy tools to sustain economic recovery. The official expressed optimism about the economic outlook, projecting steady recovery momentum through the remainder of the year. Changes in China’s economy often have significant implications for Australian markets due to their close trade ties.

In contrast, the US Dollar remains in a downward correction, even as Federal Reserve (Fed) officials recently delivered hawkish comments. However, the Greenback’s losses may be cushioned by expectations that the incoming Trump administration will prioritize tax cuts and higher tariffs—measures that could drive inflation and slow the pace of future Fed rate cuts.

Market participants now turn their attention to the upcoming US data on October Building Permits and Housing Starts, set for release later on Tuesday, as they seek further clarity on economic trends.

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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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