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Gold Price Drops to $2,640, Holds Above Key Support After NFP Data

Gold Price Slips to $2,640, Holds Above Friday’s Post-NFP Low and Trading Range Support

Gold Price Slips to $2,640, Holds Above Friday’s Post-NFP Low and Trading Range Support

Gold (XAU/USD) faced fresh selling pressure on Monday, dropping to a daily low of around $2,640 as the European session approached. The US Dollar (USD) remains near a seven-week high, bolstered by traders adjusting expectations for a large interest rate cut by the Federal Reserve (Fed) in November. Friday’s strong US employment report, combined with a generally positive risk sentiment, continues to weigh on gold demand.

Despite the positive market outlook, geopolitical tensions stemming from conflicts in the Middle East and the threat of a wider war may still support gold’s safe-haven appeal. Therefore, a break below the $2,635-$2,630 support zone is needed before betting on further declines for gold.

Market Movers: Gold Price Weakens Amid Strong USD, Smaller Fed Rate Cut Expectations

The robust US employment report on Friday reduced the likelihood of aggressive policy easing by the Fed, which continues to dampen demand for non-yielding assets like gold. The US Labor Department reported that 254K jobs were added in September, far surpassing expectations, while the Unemployment Rate unexpectedly dropped to 4.1%. Revisions for July and August also revealed 72K additional jobs, signaling a resilient labor market and a stronger economy.

According to the CME Group’s FedWatch Tool, traders now anticipate a 95% chance of a 25 basis point rate cut at the Fed’s November policy meeting. Meanwhile, the yield on the 10-year US Treasury bond hovers near the 4.0% level, and the strong US Dollar continues to keep gold bulls on the defensive.

Easing fears of an economic slowdown in the US, alongside optimism from China’s stimulus measures, have contributed to the positive sentiment in equity markets. However, geopolitical risks remain elevated, as Israel launched a fresh round of airstrikes in Gaza and Lebanon, and Hezbollah retaliated with attacks on Haifa. The rising tension increases the risk of a broader conflict in the Middle East, which could enhance gold’s safe-haven demand, cautioning bearish traders.

Technical Outlook: Gold’s Price Outlook Hinges on Key Support and Resistance Levels

From a technical perspective, gold’s current range-bound trading may be viewed as a bullish consolidation following its recent surge to record highs. Daily chart indicators remain comfortably in positive territory, having eased from overbought conditions, which supports the prospect of an eventual breakout to the upside. However, traders may want to wait for a sustained move above the $2,670-$2,672 resistance level before placing fresh bullish bets. Clearing this zone, along with the $2,685-$2,686 region and the $2,700 mark, could pave the way for a continuation of the long-term uptrend.

On the downside, immediate support for gold lies at the $2,630 area. A decisive break below this level could trigger technical selling, pushing the XAU/USD price under $2,600 and towards the next key support near $2,560. A deeper corrective decline could target the $2,535-$2,530 region, with the $2,500 psychological mark acting as a major support zone.

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Gold Price Approaches Weekly High as USD Softens; US NFP Report in Focus

Gold Price Nears Weekly High Amid Softer USD; Focus Shifts to US NFP Report

Gold Price Nears Weekly High Amid Softer USD; Focus Shifts to US NFP Report

Gold (XAU/USD) gained momentum on Friday, climbing toward the $2,668 mark, near its weekly high, as the US Dollar (USD) slightly retreats from the one-month peak reached on Thursday. The USD’s pullback, coupled with ongoing geopolitical tensions in the Middle East, has driven safe-haven demand for the precious metal during the European session.

However, the upside for gold might be capped by reduced expectations of aggressive policy easing by the Federal Reserve (Fed). Traders remain cautious ahead of the US Nonfarm Payrolls (NFP) report, which could influence the next directional move for gold. Despite this, XAU/USD hovers close to last week’s all-time high, and the overall outlook still favors bullish traders.

Market Movers: Gold Price Gains as USD Slips; Eyes on US NFP for Fresh Cues

On Thursday, the US Department of Labor (DOL) reported that initial unemployment claims increased marginally to 225K in the week ending September 28, up from 218K. This followed stronger-than-expected private-sector employment data for September and a surprising rise in available jobs in August, signaling a resilient labor market.

Additionally, the Institute for Supply Management’s (ISM) Non-Manufacturing PMI climbed to 54.9 in September, its highest level since February 2023, reflecting economic stability in the third quarter. These factors reduced expectations for another large rate cut by the Fed, boosting the USD to a one-month high and acting as a headwind for non-yielding assets like gold.

On the geopolitical front, tensions in the Middle East escalated further. On Thursday, Hezbollah launched approximately 230 projectiles from Lebanon into Israeli territory. In response, Israel carried out strikes on Hezbollah’s intelligence headquarters in Beirut early Friday. With the risk of a full-scale conflict rising, gold continues to benefit from its status as a safe-haven asset.

Looking ahead, traders are focused on the US NFP report, which is expected to show a 140K job increase in September, slightly down from the previous 142K, with the Unemployment Rate steady at 4.2%. The report, along with Average Hourly Earnings data, could influence the size of the Fed’s expected rate cut in November, potentially driving fresh USD demand and providing directional momentum for gold.

Technical Outlook: Gold Poised to Challenge All-Time High, Eyes $2,700 Mark

From a technical perspective, the recent price movement is seen as a bullish consolidation phase following gold’s strong rally to its record high. Daily chart oscillators remain comfortably in positive territory, further supporting the bullish outlook. Immediate resistance lies around the $2,672-$2,673 area, followed by the $2,685-$2,686 zone—the previous all-time high. A break above these levels could open the path to the psychological $2,700 mark, extending the long-standing uptrend.

On the downside, support is expected around the $2,625-$2,624 area, near a short-term ascending channel resistance point. A break below this level could trigger aggressive selling, potentially dragging gold below $2,600 and towards the $2,560 and $2,535-$2,530 support zones. Further declines could see XAU/USD testing the $2,500 psychological level.

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Gold Price Under Pressure as Strong USD Prevails, Middle East Tensions Cap Losses

Gold Price Stays Under Pressure as Strong USD Weighs, Middle East Tensions Limit Losses

Gold Price Stays Under Pressure as Strong USD Weighs, Middle East Tensions Limit Losses

Gold (XAU/USD) faced renewed selling pressure after bouncing from the $2,641 level and remains defensive as the European session begins on Thursday. The US Dollar (USD) continues its recovery, reaching a three-week high, as expectations for aggressive policy easing by the Federal Reserve (Fed) diminish. This stronger USD is negatively impacting the demand for non-yielding assets like gold, though escalating tensions in the Middle East are helping to cushion deeper losses.

Recent geopolitical developments, including Iran launching over 200 ballistic missiles at Israel and Israel’s airstrike on central Beirut, Lebanon, have heightened fears of a broader conflict in the region. This has tempered risk appetite, as reflected in weaker equity markets, and provided some support for the safe-haven gold price. However, gold traders will keep a close watch on Thursday’s US economic data, with the focus shifting toward the upcoming Nonfarm Payrolls (NFP) report on Friday.

Daily Market Movers: Gold Price Bears Defend as USD Strength Persists

Stronger US labor market data and hawkish remarks from Fed Chair Jerome Powell on Monday have further strengthened the USD, continuing its recovery from its lowest level since July 2023.

  • Tuesday’s US JOLTS Job Openings report showed a significant rise of 329K jobs, reaching 8.04 million in August, up from July’s revised 7.71 million.
  • Wednesday’s ADP report revealed private employers added 143K jobs in September, surpassing expectations of 120K and August’s 103K figure.

These signals of a resilient US labor market have led investors to reconsider the possibility of a 50-basis-point interest rate cut by the Fed in November. Additionally, hopes that China’s economic stimulus measures will drive a sustained recovery have put further pressure on safe-haven assets like gold.

On the geopolitical front, tensions escalated further with Israel’s airstrike on Beirut, Lebanon, after Iran’s missile barrage earlier in the week, fueling concerns of a full-blown war in the Middle East. This complex backdrop warrants caution before making aggressive bets on XAU/USD ahead of Friday’s critical US NFP report. Thursday’s economic releases, including Initial Jobless Claims and ISM Services PMI, along with speeches from key FOMC members, may also provide short-term trading opportunities for gold.

Technical Outlook: Gold Price Set for Dip-Buying Near $2,625 Support

From a technical standpoint, gold’s recent price action suggests a consolidation phase following its strong rally to record highs. Indicators on the daily chart remain in positive territory, suggesting a bullish bias. Immediate resistance is seen at the $2,672-$2,673 level, followed by the $2,685-$2,686 zone, and ultimately the $2,700 mark, which could trigger further bullish momentum.

On the downside, the $2,625-$2,624 region, aligning with the support of a short-term ascending channel, should act as a key level. A break below this could lead to further selling, pushing gold below $2,600 and toward the next major support near $2,560. A deeper decline could extend to $2,535-$2,530, with a potential move down to the psychological $2,500 mark.

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Japanese Yen Weakens as US Dollar Gains Strength Ahead of ADP Employment Report

Japanese Yen Declines as US Dollar Strengthens Ahead of ADP Employment Report

Japanese Yen Declines as US Dollar Strengthens Ahead of ADP Employment Report

The Japanese Yen (JPY) weakened against the US Dollar (USD) on Wednesday, as uncertainty grows around the possibility of future interest rate hikes by the Bank of Japan (BoJ). The BoJ’s Summary of Opinions from September’s Monetary Policy Meeting indicated no immediate plans for further rate hikes, with the central bank maintaining its accommodative stance while remaining open to adjustments if economic conditions improve.

Japan’s Economic Revitalization Minister, Ryosei Akazawa, stated on Wednesday that Prime Minister Shigeru Ishiba expects the BoJ to thoroughly evaluate the economy before raising rates. In his first press briefing, Akazawa stressed that Japan’s top priority is to completely exit deflation, which he noted will take time.

The US Dollar remains supported by a cautious market mood amid escalating tensions in the Middle East. However, the weaker-than-expected US ISM Manufacturing PMI for September applied some downward pressure on the Greenback. Market attention is now shifting to the upcoming US ADP Employment Change report and comments from Federal Reserve officials for further market direction.

Daily Market Highlights: Yen Depreciates as BoJ Rate Hike Odds Wane

The CME FedWatch Tool suggests markets are assigning a 63.1% chance of a 25 basis point rate cut by the Federal Reserve in November, with the probability of a 50 basis point cut at 36.9%, down from 58.2% a week ago.

In the Middle East, Iran launched over 200 ballistic missiles at Israel, prompting Israeli Prime Minister Benjamin Netanyahu to vow retaliation. Iran responded with warnings that any counterstrike would result in “vast destruction,” intensifying concerns of a wider conflict.

US ISM Manufacturing PMI came in at 47.2 for September, matching August’s reading but falling short of the expected 47.5, signaling ongoing contraction in the manufacturing sector.

In Japan, the Tankan Large Manufacturing Index for Q3 remained steady at 13 points, as expected. Additionally, Japan’s unemployment rate fell to 2.5% in August from 2.7% in July, outperforming forecasts of 2.6%, according to data released on Tuesday.

Federal Reserve Chair Jerome Powell reiterated on Monday that the Fed is not in a hurry to reduce interest rates, stating that future cuts will be made “over time.” Powell also noted that the recent 50 basis point rate cut should not be seen as a signal for further aggressive actions.

Japan’s newly elected Prime Minister, Shigeru Ishiba, affirmed that the country’s monetary policy would remain accommodative to support its fragile economic recovery, which has further pressured the Japanese Yen and supported the USD/JPY pair.

St. Louis Fed President Alberto Musalem stated last week that the Fed should begin cutting rates “gradually” following the larger-than-expected half-point reduction in September. He also acknowledged that the economy could weaken more than anticipated, which may call for faster rate cuts.

Technical Analysis: USD/JPY Holds Above 143.50 with Bullish Bias

The USD/JPY pair is trading around 143.80 on Wednesday, consolidating within an ascending channel pattern, suggesting a bullish outlook. The 14-day Relative Strength Index (RSI) hovers just below the 50 level; a break above this threshold would further confirm a continuation of the bullish trend.

The pair may encounter resistance near the upper boundary of the ascending channel at 146.80, followed by the five-week high of 147.21, last reached on September 3.

On the downside, immediate support is seen at the nine-day Exponential Moving Average (EMA) near 143.50, followed by the lower boundary of the ascending channel at 143.00. A break below this level could push the USD/JPY pair toward 139.58, the lowest since June 2023.

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Pound Sterling Holds Steady

Pound Sterling Steadies Near 1.3400 Ahead of US PMI and Labor Data

Pound Sterling Steadies Near 1.3400 Ahead of US PMI and Labor Data

The Pound Sterling (GBP) remains in a tight range around the key resistance level of 1.3400 against the US Dollar (USD) during Tuesday’s London session. Investors are holding back as they await critical US labor market data, which could provide insight into the Federal Reserve’s (Fed) plans for further rate cuts this year.

The Fed began its policy-easing cycle with a 50 basis point (bps) rate cut, lowering the benchmark rate to 4.75%-5.00% on September 18. This larger-than-expected cut was driven by concerns over weakening job growth and growing confidence that inflation is moving toward the Fed’s 2% target.

To gauge the health of the labor market, traders will closely monitor the US ADP Employment Change on Wednesday and the Nonfarm Payrolls (NFP) report on Friday. These data points will be critical in shaping expectations for future Fed rate cuts.

On Monday, Fed Chair Jerome Powell pushed back against speculation of an aggressive rate-cutting cycle, emphasizing that the Fed is not in a rush to lower rates quickly. Speaking at the National Association for Business Economics conference, Powell said, “If the economy evolves as expected, that would mean two more cuts by the end of the year, totaling an additional half percentage point.”

For Tuesday’s session, investors are focused on the US JOLTS Job Openings data for August and the ISM Manufacturing PMI for September, due at 14:00 GMT. Economists forecast that job openings will remain steady at approximately 7.67 million, while the ISM Manufacturing PMI is expected to improve slightly to 47.5 from 47.2, though this would still signal contraction in the factory sector.

Market Movers: Pound Sterling Gains as BoE Caution on Inflation Persists

The Pound Sterling is performing strongly against its major counterparts on Tuesday. The currency has gained momentum as market bets on a Bank of England (BoE) rate cut in November have cooled following remarks from BoE external policymaker Megan Greene.

Greene, who voted to keep rates unchanged in the last two meetings, noted that the UK’s consumption-driven recovery could re-ignite inflationary pressures. She warned that the recent drop in headline inflation to the BoE’s 2% target was primarily due to temporary lower oil prices, while inflation in the service sector remains elevated at 5.6%, a concern for BoE policymakers. Despite this, she expressed confidence that inflation is trending in the right direction, according to Bloomberg.

Market participants now expect the BoE to cut rates one more time in the final quarter of 2024, likely at the December meeting. The BoE initiated its normalization process with a 25 bps rate cut on August 1 but held rates steady in September.

Looking ahead, a key event for the Pound Sterling will be BoE Chief Economist Huw Pill’s speech at 14:00 GMT, which could offer more clarity on the BoE’s interest rate strategy for the remainder of the year.

Additionally, investors will watch for the revised estimate of the S&P Global/CIPS Manufacturing PMI for September, scheduled for release at 08:30 GMT, with expectations that it will remain unchanged at 51.5.

Technical Outlook: Pound Sterling Sideways Near 1.3400

The Pound Sterling is trading sideways near the 1.3400 resistance level against the US Dollar during European trading hours. The short-term outlook for GBP/USD remains positive, as the 20-day Exponential Moving Average (EMA), near 1.3250, is trending higher.

GBP/USD maintains a bullish structure, having broken above a trendline drawn from the December 28, 2023, high of 1.2828, a breakout achieved on August 21.

The 14-day Relative Strength Index (RSI) has dipped slightly but remains above 60, indicating ongoing bullish momentum.

Upside resistance for GBP/USD is expected near the psychological level of 1.3500, while support lies at the 20-day EMA near 1.3235, a critical level for GBP bulls.

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Australian Dollar Strengthens as US Dollar Weakens Ahead of Fed Powell Speech

Australian Dollar Gains as US Dollar Remains Soft Ahead of Fed Powell’s Speech

Australian Dollar Gains as US Dollar Remains Soft Ahead of Fed Powell’s Speech

The Australian Dollar (AUD) extended its gains for a third consecutive session on Monday, despite mixed data from China, Australia’s largest trading partner. The rise in AUD is supported by growing expectations of further US Federal Reserve (Fed) rate cuts in November, weakening the US Dollar (USD) and lifting the AUD/USD pair.

China’s Caixin Manufacturing PMI dropped to 49.3 in September from 50.4, signaling contraction. Meanwhile, the Caixin Services PMI also fell, hitting 50.3, down from 51.6 in August, pointing to a services sector slowdown.

The US Dollar has been under pressure following the release of the US Core Personal Consumption Expenditures (PCE) Price Index for August, which rose just 0.1% MoM, below the expected 0.2%. This aligns with the Fed’s outlook of easing inflation, raising the likelihood of an aggressive rate-cutting cycle. Markets now assign a 42.9% chance of a 25-basis-point cut and a 57.1% chance of a 50-basis-point cut in November, according to the CME FedWatch Tool.

Market Movers: AUD Boosted by RBA’s Hawkish Stance

China’s official NBS Manufacturing PMI improved to 49.8 in September, surpassing expectations. However, the Non-Manufacturing PMI dipped to 50.0, down from 50.3, falling short of forecasts. Meanwhile, the Reserve Bank of Australia (RBA) kept its cash rate at 4.35% for the seventh consecutive meeting, maintaining a hawkish stance to curb inflation, which supports AUD strength.

Additionally, St. Louis Federal Reserve President Alberto Musalem stated that the Fed could begin cutting interest rates “gradually” after a half-point reduction in September, noting that a faster pace might be needed if the economy weakens further.

On the global stage, Australian Treasurer Jim Chalmers acknowledged China’s economic slowdown but welcomed its new stimulus measures as a positive development for global growth.

Technical Analysis: AUD/USD Shows Bullish Momentum

The AUD/USD pair is trading near 0.6920, holding above the lower boundary of an ascending channel, suggesting continued bullish momentum. The 14-day Relative Strength Index (RSI) remains above 50, confirming the bullish sentiment. The pair could target the 0.7000 level at the upper boundary of the channel, with a potential break signaling further upside. However, a failure to break above could lead to a pullback. On the downside, a break below 0.6920 could weaken the bullish bias, with the next support around the 0.6853 level.

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Japanese Yen Drops as No Candidate Secures Majority

Japanese Yen Drops as No Candidate Secures Majority in LDP Voting First Round

Japanese Yen Drops as No Candidate Secures Majority in LDP Voting First Round

The Japanese Yen (JPY) continues to weaken for the third consecutive session, following the release of Tokyo’s Consumer Price Index (CPI) data on Friday. Investors are concerned that the Bank of Japan (BoJ) may delay further rate hikes, adding pressure to the JPY.

Tokyo’s CPI for September showed a year-over-year increase of 2.2%, down from the 2.6% rise in August. Core CPI, which excludes fresh food and energy, remained stable at 1.6% YoY, while the CPI excluding fresh food increased 2.0%, in line with expectations but lower than the previous 2.4%.

The US Dollar may face challenges amid dovish comments from Federal Reserve officials. Traders are now watching the release of the US Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, for further direction.

Market Movers: Japanese Yen Declines Amid Uncertainty Over BoJ Policy

In the first round of the Liberal Democratic Party (LDP) presidential election, leading candidates included former Defense Chief Shigeru Ishiba, former Environment Minister Shinjiro Koizumi, and Economic Security Minister Sanae Takaichi, who garnered 154, 136, and 181 votes, respectively. A majority of 368 votes was required, leading to a run-off between Ishiba and Takaichi.

Meanwhile, US economic data continues to impact the markets. US Gross Domestic Product (GDP) for Q2 grew at an annualized rate of 3.0%, as per the Bureau of Economic Analysis, while the GDP Price Index rose 2.5%. Additionally, US Initial Jobless Claims for the week ending September 20 came in at 218K, below the consensus of 225K and the previous week’s revised 222K.

BoJ Monetary Policy Meeting Minutes indicated the importance of vigilance against inflation risks, with some members suggesting a rate hike to 0.25% might be appropriate to adjust monetary support. Governor Kazuo Ueda emphasized that the BoJ has time to assess the economy before making further policy changes, citing Japan’s deeply negative real interest rates, which continue to boost the economy.

Technical Analysis: USD/JPY Holds Above 145.00, Bullish Momentum

USD/JPY is trading around 145.10 on Friday, showing bullish momentum within an ascending channel. The 14-day Relative Strength Index (RSI) is slightly above 50, signaling continued bullish sentiment.

If the upward trend continues, the USD/JPY pair could test the upper boundary of the channel near 146.90, followed by the five-week high of 147.21 recorded in early September. On the downside, the pair may find support at the nine-day Exponential Moving Average (EMA) around 143.89, aligning with the channel’s lower boundary.

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Indian Stocks Expected to Open Marginally

Indian Stocks Expected to Open Marginally Up as Modi Heads Towards Third Term

Indian Stocks Expected to Open Marginally Up as Modi Heads Towards Third Term

Indian shares were poised for a slight increase at Thursday’s opening, following a notable rally in the previous session that marked the largest gain in over three years. This optimism comes as Prime Minister Narendra Modi is anticipated to secure a third term in office. As of early Thursday morning, the Gift Nifty was recorded at 22,677.00, suggesting a modest rise from Wednesday’s close of 22,620.35 for the benchmark Nifty 50.

On Wednesday, the National Democratic Alliance officially chose Modi to continue leading the government. The election results, however, were unexpected, requiring Modi’s Bharatiya Janata Party to depend on its alliance partners to maintain power.

The trading session on Wednesday saw the NSE Nifty 50 and the S&P Sensex each closing over 3% higher, a significant recovery from Tuesday’s nearly 6% drop. The National Stock Exchange of India also experienced a record-breaking day, processing the highest ever number of transactions in its history, with 19.71 billion orders and 285.5 million transactions.

Despite the positive market performance, foreign institutional investors net sold Indian shares valued at 56.56 billion rupees ($678.2 million), according to provisional data from the NSE.

The political developments are expected to keep the markets attentive to the formation of the new government and the upcoming Reserve Bank of India policy meeting. Furthermore, significant economic indicators are on the horizon with India’s monetary policy decision and the U.S. non-farm payrolls report both due on Friday.

Sector-wise, consumer and auto stocks are likely to garner interest on Thursday, following favorable evaluations from several brokerages. These sectors are preferred over capital goods, state-run companies, industrials, and utilities, with an expectation of potential delays in reforms impacting these areas. This strategic shift reflects broader market anticipations and investor strategies in light of the evolving political and economic landscape.

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Asian Stocks Fall

Asian Stocks Fall; India’s Index Plunges 8%

Asian Stocks Fall; India’s Index Plunges 8%

Asian shares declined on Tuesday, with significant movement seen in India’s Sensex, which plunged by up to 8%. The sharp decline came as investors opted to sell shares and secure profits following exit polls that favored Prime Minister Narendra Modi for a third term. By mid-afternoon, the Sensex had recovered slightly but was still down 7.1% at 71,020.45. The final vote count of India’s extensive six-week national election indicated a lower-than-anticipated seat tally for Modi’s National Democratic Alliance, though it still maintained a lead over its main competitor.

Elsewhere in Asia, market movements were mixed. Japan’s Nikkei 225 index dipped slightly by 0.2% to 38,837.46, while South Korea’s Kospi fell by 0.8% to 2,660.69. Contrasting these declines, Hong Kong’s Hang Seng index bucked the trend with a gain of 0.5%, reaching 18,494.28. The Shanghai Composite index in China also saw a minor drop of 0.1% to 3,076.96.

In Australia, the S&P/ASX 200 index decreased by 0.3% to 7,740.80, and Taiwan’s Taiex mirrored this loss with a 0.8% decline.

Turning to the global scene, U.S. markets showed a mixed performance the previous day. The S&P 500 slightly increased by 0.1% to 5,283.40, despite most stocks in the index falling. The Dow Jones Industrial Average experienced a 0.3% drop to 38,571.03, whereas the Nasdaq composite demonstrated growth, rising by 0.6% to 16,828.67.

Complementing these stock movements, oil prices saw a decrease, and U.S. futures edged higher, signaling varied investor sentiments across different asset classes. This combination of events reflects the interconnected nature of global markets, reacting sensitively to geopolitical developments and economic forecasts.

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European Futures Decline Amidst Rising Yields and Market Downturn

European Futures Decline Amidst Rising Yields and Market Downturn

European stock markets appeared poised to mirror the declines seen in Asia, as rising US Treasury yields near this year’s peak continued to restrain risk appetite among investors. The Euro Stoxx 50 futures fell by 0.4%, reflecting a similar downturn in US equity futures. The MSCI Asia Pacific Index dropped to a three-week nadir, with markets in South Korea and Japan experiencing significant losses.

This week marks a challenging period for global equities, potentially recording their poorest performance since mid-April. The mood has been dampened further by recent comments from Federal Reserve officials, which have cast doubt on the anticipated timeline for interest rate reductions. This uncertainty, coupled with high bond yields following a lackluster $44 billion auction of seven-year US Treasury securities, has contributed to market anxieties.

As Friday approaches, investors are keenly awaiting inflation reports from both the US and Europe. These reports are critical as they may significantly influence the future direction of monetary policies. According to Tony Sycamore, a market analyst at IG Australia Pty Ltd., “The market is currently overshadowed by the bond market’s influence and rising yields. The primary concern now shifts towards managing the potential risks of unexpectedly high inflation figures from the US or Europe.”

In the Asian markets, Treasury yields saw a slight decline after a significant increase of six basis points in the previous session. The weak auction results have exacerbated concerns that financing the US’s substantial deficit will continue to push yields higher, especially as the Federal Reserve shows no immediate signs of reducing rates. Meanwhile, Australian bond yields have also risen.

The US dollar strengthened for the third consecutive session, adversely affecting Asian currencies. In Japan, the yen showed some recovery after dropping past 157.52 against the dollar, a move that had earlier prompted suspected intervention by monetary authorities. Japanese 10-year bond yields also managed to recover from earlier losses.

In China, the onshore yuan remained stable after hitting its lowest since November the previous day. In South Africa, the rand continued to weaken as the country progressed with its election vote count.

Eric Johnston from Cantor Fitzgerald noted, “The primary drivers of rising bond yields seem to be the bond supply and the ongoing large deficits rather than concerns over inflation or a robust economy.”

Amidst these broader economic indicators, the New Zealand government announced tax cuts in line with its campaign promises, despite the Treasury projecting larger deficits and a postponed fiscal surplus. On the corporate front, Chinese regulators are reportedly set to levy a record fine on PricewaterhouseCoopers LLP over its audit practices for China Evergrande Group. Additionally, Brookfield is reportedly nearing an agreement to acquire a majority stake in French renewable energy firm Neoen SA, valuing the company at approximately €6.1 billion.

In the commodities market, oil prices stabilized following a drop on Wednesday, as market participants awaited further data from US stockpiles and the upcoming OPEC+ meeting to gauge the oil supply and demand dynamics more accurately.

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

Mixed Stocks, Dollar Weakens Ahead of Inflation Report

Mixed Stocks, Dollar Weakens Ahead of Inflation Report

European shares were poised for modest gains, tracking mild increases in Asian markets as the dollar weakened ahead of key inflation data expected to impact global monetary policy. Futures for European and US stocks showed slight rises, while the 10-year Treasury yield held steady. The MSCI AC Asia Pacific index aimed for a second consecutive day of gains, albeit below earlier peaks.

The Bloomberg dollar index declined for the third consecutive day, dropping against all major Group-of-10 currencies as speculation grew over potential US interest rate cuts. According to a currency strategist, expectations of moderating US core inflation, improvements in Chinese PMIs, and potential increases in euro-zone inflation could lead to further weakening of the USD later in the week.

In China, property stocks reversed earlier gains, falling during the late Asian trading session after Shanghai reduced down-payment ratios and minimum mortgage requirements, echoing moves by other major cities in response to central government support for the property sector.

This week, traders are set to analyze a series of inflation reports from countries including Australia, Japan, the euro area, and the US. Japan reported a 2.8% rise in April producer prices, exceeding forecasts. The European Central Bank (ECB) is expected to release its April CPI expectations, with further commentary anticipated from ECB official Klaas Knot.

Amid mixed signals from ECB officials about interest rate cuts, the ECB’s Chief Economist indicated that monetary policy would remain restrictive through 2024 despite potential rate reductions. Although a June rate cut by the ECB is largely anticipated, the future direction remains uncertain amid ongoing concerns about wage growth and geopolitical tensions.

Market analysts suggest that the upcoming US session could trigger more market movements, influenced by end-of-month dynamics and the upcoming release of the PCE Index, a key gauge of inflation watched by the Federal Reserve. The Fed Chair emphasized the need for more data confirming inflation is moving towards the 2% target before considering policy easing. Several US central bankers are scheduled to speak throughout the week, potentially providing further insights into future monetary policy.

In commodities, gold prices stabilized, while oil prices climbed in anticipation of an OPEC+ meeting and the onset of the US summer driving season. Copper prices also rallied, bolstered by efforts to support the Chinese property market and a weakening dollar. Meanwhile, wheat prices reached a nine-month high due to concerns over diminishing supplies.

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Mixed Asian Shares as China’s Stocks Fall Post-Wall Street Retreat

Mixed Asian Shares as China’s Stocks Fall Post-Wall Street Retreat

Asian stock markets experienced mixed results on Thursday, influenced by various global economic signals and corporate news. Japan’s Nikkei 225 index saw an increase of 1.1%, reaching 39,054.81, buoyed by positive earnings reports from Nvidia, which notably exceeded expectations. In contrast, Australia’s S&P/ASX 200 declined by 0.5% to 7,807.10, while South Korea’s Kospi made a modest gain of 0.2%, settling at 2,728.43. However, markets in Hong Kong and Shanghai faced downturns, with the Hang Seng Index falling 1.3% to 18,942.77 and the Shanghai Composite losing 1.0% to 3,126.70.

The semiconductor sector received a particular boost following Nvidia’s announcement of a dramatic increase in profits, with quarterly net income soaring to $14.88 billion—more than seven times the figure from the previous year. Nvidia’s revenue also more than tripled, fueled by its pivotal role in the burgeoning artificial intelligence sector.

Meanwhile, U.S. markets retracted from recent highs amidst renewed concerns about interest rates. The S&P 500 dropped 0.3% to 5,307.01, pulling back from a record-setting day. Similarly, the Dow Jones Industrial Average decreased by 0.5% to 39,671.04, and the Nasdaq composite edged down by 0.2% to 16,801.54.

Investor sentiment waned later in the day following the release of minutes from the latest Federal Reserve policy meeting. The minutes indicated that controlling inflation might take longer than anticipated, based on higher-than-expected early readings this year. Despite Federal Reserve Chair Jerome Powell’s previous indications that rate cuts were more probable than hikes, the minutes revealed that some Fed officials were open to raising rates if inflation escalated, casting doubts on the likelihood of a rate reduction this year.

Additional corporate news also affected the market dynamics. Lululemon Athletica’s stock fell 7.2% after the company announced the departure of its chief product officer, Sun Choe, who is leaving to pursue other opportunities. The company also outlined a new organizational structure that eliminates the chief product officer role, reflecting strategic adjustments within the firm.

These developments highlight the complexity of current financial markets, where investor reactions to corporate performances and economic indicators continue to drive significant fluctuations in stock values across the globe.

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Nasdaq Hits Record High

Nasdaq Hits Record High; JPMorgan Weighs on Dow’s Performance

Nasdaq Hits Record High; JPMorgan Weighs on Dow’s Performance

US stocks experienced a modest climb on Monday, with the Nasdaq Composite achieving a new record close, propelled by the anticipation surrounding Nvidia’s forthcoming earnings report later in the week. Nvidia’s stock rallied in the run-up to its earnings release, highlighting the market’s high expectations for the leading chipmaker, particularly in the realm of artificial intelligence.

Meanwhile, the broader S&P 500 index edged up by 0.1%, showing a restrained but positive movement. However, the Dow Jones Industrial Average saw a decline, dropping below the 40,000 mark with a 0.5% decrease. This was largely due to a significant fall in JPMorgan shares, which tumbled following a statement from its CEO regarding an impending retirement, stirring uncertainty among investors.

The market’s overall gain reflects growing investor optimism that the Federal Reserve might reduce interest rates soon, despite ongoing cautionary statements from Fed officials. This sentiment was bolstered as even one of Wall Street’s more pessimistic forecasters revised his outlook upwards for the S&P 500 after the index reached record levels.

However, the sustainability of this bullish outlook remains a pivotal concern. Investors are keenly awaiting the release of the minutes from the Federal Reserve’s May meeting, scheduled for Wednesday. These minutes are expected to provide critical insights into the Fed’s future policy directions.

On the policy front, recent remarks from Fed Vice Chair Philip Jefferson and Fed Vice Chair of Supervision Michael Barr highlighted disappointing inflation figures from the first quarter as justification for maintaining the current interest rates. Their stance suggests a wait-and-see approach, giving existing policies more time to take effect before any new adjustments are made.

The upcoming quarterly results from Nvidia are highly anticipated and are seen as a potential catalyst for further rallies in the stock market. Analysts have set towering expectations for Nvidia’s performance, predicting a staggering 400% growth in earnings and a 240% increase in revenue. The spotlight is on whether Nvidia can meet these high expectations and continue its trajectory of impressive growth.

Adding to the complex market dynamics, commodity markets have shown significant rallies, raising concerns about potential inflationary pressures. Copper prices recently exceeded $11,000 a ton for the first time, driven by fears of a supply shortage, while gold prices surged to approximately $2,450 an ounce, reaching near-record levels.

As the market navigates these various economic signals, investors remain vigilant, closely monitoring Federal Reserve communications and corporate earnings to gauge the potential impact on future market movements.

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Asian Shares Rise Following Wall St Records

Asian Shares Rise Following Wall St Records

Asian Shares Rise Following Wall St Records

Asian shares advanced on Thursday, buoyed by a rally in U.S. stocks that reached record highs amid hopes that inflation is easing. U.S. consumer prices in April were 3.4% higher than a year earlier, a slight improvement from March’s 3.5% inflation rate. This deceleration relieved investors, who had been concerned by worse-than-expected consumer price index (CPI) reports earlier in the year. The latest data bolstered expectations that the Federal Reserve might reduce its main interest rate this year.

In Asia, Tokyo’s Nikkei 225 index rose 0.8% to 38,676.83, despite the Japanese economy contracting at a 2% annual rate in the first quarter. Hong Kong’s Hang Seng index increased by 1.6% to 19,369.06, while the Shanghai Composite index gained 0.5% to 3,134.97. Australia’s S&P/ASX 200 advanced 1.6% to 7,874.70, and South Korea’s Kospi climbed 0.8% to 2,751.32. Taiwan’s Taiex was up 0.7%, and India’s Sensex rose 0.5%.

On Wednesday, the S&P 500 surged 1.2% to close at 5,308.15, surpassing its previous high from a month and a half ago. The Dow Jones Industrial Average added 0.9% to 39,908.00, and the Nasdaq jumped 1.4% to 16,742.39, setting a new record. Stocks benefiting from lower interest rates led the market, with homebuilders like Lennar, D.R. Horton, and PulteGroup rallying over 5% on hopes of easier mortgage rates. High-growth stocks, including Nvidia, which gained 3.6%, also performed well.

Real-estate stocks in the S&P 500 climbed 1.7%, while utility stocks rose 1.4%, as their dividends became more attractive compared to lower-yielding bonds. Petco Health + Wellness surged 27.9% after appointing Glenn Murphy, CEO of investment firm FIS Holdings, as its executive chairman. However, GameStop and AMC Entertainment saw declines, with GameStop falling 18.9% and AMC dropping 20% after announcing the issuance of 23.3 million shares to clear $163.9 million in debt.

A report showed no growth in U.S. retail spending in April compared to March, against expectations of a 0.4% increase. While slowing retail sales could help reduce inflation pressure, weaker consumer spending could undermine the economy’s resilience. Lower-income households are particularly under pressure.

In the bond market, the 10-year Treasury yield decreased to 4.34% from 4.45%, and the two-year yield fell to 4.72% from 4.82%, reflecting increased expectations of a Fed rate cut. Traders now see a nearly 95% chance of at least one rate cut this year, up from just below 90% the previous day.

In early trading on Thursday, U.S. benchmark crude oil rose 42 cents to $79.05 per barrel, while Brent crude increased by 39 cents to $83.14 per barrel. The U.S. dollar weakened to 154.03 Japanese yen from 154.88 yen, and the euro edged up to $1.0888 from $1.0885.

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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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Gold Price Struggles to Gain Momentum as Traders Await New Catalysts

Gold Price Struggles to Gain Momentum as Traders Await New Catalysts

Gold Price Struggles to Gain Momentum as Traders Await New Catalysts

The Gold price (XAU/USD) has rebounded from multi-day lows but remains under the $2,500 mark amid a renewed bid in the U.S. Dollar (USD) on Wednesday. Despite this, ongoing geopolitical risks and the potential for imminent Federal Reserve (Fed) rate cuts could support the yellow metal in the near term.

Later on Wednesday, the JOLTS Job Openings and the Fed Beige Book are scheduled for release. Investors are particularly focused on Friday’s U.S. August Nonfarm Payrolls (NFP) report, which could influence the size and pace of potential rate cuts at the Fed’s September policy meeting. A weaker-than-expected NFP reading might heighten concerns about a U.S. recession, potentially leading to faster Fed rate cuts and providing a boost to gold, as lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.

Daily Digest Market Movers: Gold Price Pressured by Stronger U.S. Dollar

  • China’s Caixin Services PMI fell to 51.6 in August, down from 52.1 in July and missing the market expectation of 52.2 by a significant margin.
  • Daniel Ghali, a commodity strategist at TD Securities, noted, “Speculative positioning in gold seems maxed out for now. The pressure from the stronger dollar reflects our view on positioning.”
  • The U.S. ISM Manufacturing PMI edged up to 47.2 in August from an eight-month low of 46.8 in July, but this was below the market consensus of 47.5.
  • Traders have increased the likelihood of a more aggressive half-point rate cut to 39%, up from 31% before the release of the ISM Manufacturing PMI report, according to CME Group’s FedWatch tool.
  • The U.S. JOLTS Job Openings are anticipated to decline slightly to 8.10 million, down from 8.184 million in June.
  • The U.S. ISM Services PMI is expected to rise marginally to 51.4 in August from 51.1 in July.

Technical Analysis: Gold Price Maintains Positive Long-Term Outlook

Despite trading in negative territory for the day, gold maintains a bullish trend on the daily chart. The price remains above the key 100-day Exponential Moving Average (EMA), supported by a 14-day Relative Strength Index (RSI) that stays above the midline.

The critical resistance for gold lies between $2,530 and $2,540, corresponding to the upper boundary of a five-month-old ascending channel and the all-time high. A sustained move above this level could open the door to the psychological $2,600 mark.

Conversely, immediate support is found at $2,470, the low from August 22. A breach of this level could lead to a decline towards $2,432, the low from August 15, with further losses potentially driving the price down to $2,377, the 100-day EMA.

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Pound Sterling Drops from Recent Highs as Attention Turns to US Core PCE Inflation

Pound Sterling Drops from Recent Highs as Attention Turns to US Core PCE Inflation

The Pound Sterling (GBP) has pulled back from a more-than-two-year high of 1.3266 against the US Dollar (USD) during Wednesday’s London session. The GBP/USD pair has dipped as the US Dollar regains some strength, with investors now focusing on the upcoming US core Personal Consumption Expenditure Price Index (PCE) data for July, which is due on Friday. This data release could be a key catalyst for the pair.

The US Dollar Index (DXY), which measures the Greenback’s performance against six major currencies, has found some buying interest, rebounding after reaching a new year-to-date low of 100.50.

Despite this recent recovery, the short-term outlook for the US Dollar remains bearish, as market participants are increasingly confident that the Federal Reserve (Fed) will reduce interest rates at its September meeting. The main debate among traders is whether the Fed will implement a significant rate cut or opt for a smaller reduction in borrowing costs.

According to the CME FedWatch tool, the 30-day Federal Funds Futures data indicates a 34.5% probability of a 50-basis point rate cut in September, with the remainder favoring a 25-basis point cut.

Regarding core PCE inflation, economists anticipate that the Fed’s preferred inflation measure rose at a year-on-year rate of 2.7% in July, up from 2.6% in June, with the monthly figures showing steady growth of 0.2%. Persistent inflation would likely reduce market expectations for a large Fed rate cut, while further easing in price pressures could increase the likelihood of more aggressive rate cuts.

Market Movers: Pound Sterling Guided by BoE Mann’s Speech

The Pound Sterling is showing mixed performance against its major counterparts during Wednesday’s European trading hours. The currency is expected to trade in a narrow range as investors seek new insights regarding the Bank of England’s (BoE) interest rate trajectory.

The BoE cut interest rates by 25 basis points to 5% in August, marking the end of its two-and-a-half-year-long restrictive monetary policy stance, as officials grew confident that inflation would sustainably return to the bank’s 2% target. Market participants anticipate that the BoE’s pace of rate cuts for the rest of the year will be slower compared to other central banks, given that the UK economy appears resilient, supported by the August flash S&P Global/CIPS PMI data and robust Q2 GDP growth.

For further direction on interest rates, investors are awaiting a speech from BoE policymaker Catherine Mann, scheduled for 12:15 GMT. Mann was among those who voted to keep interest rates steady at 5.25% during the August 1 policy meeting. Her remarks will be closely scrutinized for any indications of the BoE’s future rate cuts, along with perspectives on service inflation and wage pressures.

On the political front, comments from UK Prime Minister Keir Starmer about the upcoming financial budget, expected in October, have also bolstered the appeal of the Pound Sterling. Starmer suggested that the budget would involve “short-term pain for long-term gain,” with plans to increase taxes, particularly for higher-income households.

Technical Analysis: Pound Sterling Holds Key Support at 1.3200

The Pound Sterling has seen a mild correction after reaching a new two-and-a-half-year high of 1.3266 against the US Dollar. The near-term outlook for the GBP/USD pair remains positive, as it maintains the breakout from the Rising Channel chart pattern on the weekly time frame. If bullish momentum resumes, the pair could target the February 4, 2022, high of 1.3640.

The upward-sloping 20-week Exponential Moving Average (EMA), located near 1.3000, indicates a strong bullish trend. The 14-period Relative Strength Index (RSI) remains in the bullish range of 60.00-80.00, suggesting robust upward momentum, although it has reached overbought territory around 70.00, which could prompt a corrective pullback. On the downside, the psychological level of 1.3000 is expected to serve as crucial support for Pound Sterling bulls.

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Rate Cuts Could Facilitate a Soft Landing

Rate Cuts Could Facilitate a Soft Landing: UBS

Rate Cuts Could Facilitate a Soft Landing: UBS

In a note released on Monday, UBS Financial Services reiterated its forecast that the U.S. economy is on track for a soft landing, despite acknowledging significant risks of a potential downturn. Consumer spending will be a critical factor in determining whether the economy can achieve this outcome.

UBS expects the Federal Reserve to begin lowering interest rates soon, potentially as early as its next meeting in September. These rate cuts are seen as a way to support the economy during this period of uncertainty.
The U.S. labor market has undergone substantial changes since the start of the year. UBS highlighted that the unemployment rate has risen quickly, moving from 3.7% in January to 4.3% in July. Historically, such an increase has been linked with economic downturns. However, UBS suggests this situation might be different, pointing out that the labor market remains robust by historical standards, even though it is no longer as overheated as it was two years ago.

Weekly jobless claims, a leading indicator of labor market health, have shown a rising trend. However, UBS advises interpreting this data cautiously, as it is often volatile and difficult to seasonally adjust. Although claims appear to be increasing, they remain low compared to historical norms, indicating that the labor market, while cooling, is not yet showing signs of a significant downturn.

Consumer spending is expected to play a pivotal role in the U.S. economic recovery. UBS notes that excess savings accumulated during the pandemic have largely been exhausted, making continued income growth crucial for sustaining consumer spending. Despite concerns, recent retail sales data for June and July have been stronger than expected, suggesting that the economic recovery is still on track.

However, the outlook is not without uncertainty. The U.S. government recently revised down its estimate of job growth for the 12 months ending in March by 818,000 jobs. Moreover, the latest labor market report showed some weakness in key income determinants such as wages and hours worked. UBS has adjusted its base case to reflect a soft landing but has increased the probability of a hard landing from 20% to 25%.

Inflation remains a central concern for the Federal Reserve and financial markets. UBS points out that inflation trends have shown some positive signs recently. While inflation was relatively high at the start of the year, more recent data has been softer, with the headline inflation rate slowing to 2.9% year-over-year in July—the lowest since early 2021.

The decline in inflation has been driven by falling goods prices and moderating services inflation. However, UBS notes that shelter inflation, a significant component of the Consumer Price Index (CPI), reaccelerated in July, rising by 0.4% month-over-month, compared to 0.2% in June. Shelter inflation is critical as it constitutes the largest portion of the CPI basket. Excluding shelter, inflation was only 1.7% year-over-year in July, suggesting broader inflationary pressures are easing. UBS remains confident that shelter inflation will eventually decline, especially given the modest increases in new rental leases since early 2023.

The Federal Reserve has indicated its readiness to begin cutting interest rates, as reflected in the minutes from the July FOMC meeting and comments from Fed officials. These rate cuts could start at the September 18 meeting, although uncertainty remains regarding their pace and magnitude.

UBS argues that the sharp rise in the unemployment rate, which the Fed had not anticipated, provides a compelling reason for the central bank to act swiftly. With real interest rates significantly above neutral, there is a case for an initial, aggressive rate cut. UBS’s base scenario involves a total of 100 basis points in rate cuts by the end of the year, potentially requiring a 50-basis-point cut at one of the remaining three FOMC meetings.

Given the Fed’s data-dependent approach, UBS cautions that various outcomes are possible. The upcoming September FOMC meeting is highly anticipated, with the Fed expected to use the meeting’s dot plot to signal its interest rate projections for the rest of the year. This will provide investors with a clearer picture of the Fed’s monetary policy direction and its efforts to guide the economy toward a soft landing.

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Japanese Yen Moves Sideways Despite Hawkish BoJ Signals

Japanese Yen Moves Sideways Despite Hawkish BoJ Signals

Japanese Yen Moves Sideways Despite Hawkish BoJ Signals

The Japanese Yen (JPY) traded sideways against the US Dollar (USD) on Thursday, even as a recent Reuters poll, conducted from August 13-19 and published on Wednesday, showed that 31 out of 54 economists expect the Bank of Japan (BoJ) to raise borrowing costs before the end of the year. The median forecast predicts a 25 basis point hike, which would bring the year-end rate to 0.50%.

Despite these hawkish expectations, the USD/JPY pair gained ground as the Yen weakened following the release of a record trade deficit report on Wednesday. Traders are now eagerly awaiting BoJ Governor Kazuo Ueda’s appearance in parliament on Friday, where he is expected to discuss the central bank’s recent decision to raise interest rates.

On Thursday, the US Dollar edged higher, supported by a modest recovery in Treasury yields. However, the Greenback’s gains could be limited as the Federal Reserve is expected to implement up to 100 basis points (bps) in rate cuts throughout 2024. Market analysts remain divided on whether the Fed will opt for a 25 or 50 bps cut at its September meeting.

According to the CME FedWatch Tool, the probability of a 25 basis point Fed rate cut at the September meeting has decreased to 65.5%, down from 71.0% the previous day. Conversely, the likelihood of a 50 basis point rate cut has risen to 34.5% from 29.0%.

Market Movers: Japanese Yen Holds Steady Ahead of BoJ Governor Ueda’s Speech

Traders are exercising caution ahead of Federal Reserve (Fed) Chair Jerome Powell’s keynote address at the Jackson Hole Symposium on Friday. Powell’s remarks could provide crucial insights into the Fed’s potential interest rate cuts in the United States.

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

Japan’s Merchandise Trade Balance showed a deficit of ¥621.84 billion in July, a sharp reversal from the ¥224.0 billion surplus reported in June, and fell short of market expectations of a ¥330.7 billion deficit. Imports surged by 16.6% year-on-year in July, reaching a 19-month high of ¥10,241.01 billion, up from a 3.2% increase in June. Meanwhile, exports grew by 10.3% YoY to a seven-month high of ¥9,619.17 billion, missing market forecasts of 11.4%.

Fed Governor Michelle Bowman expressed caution on Tuesday, highlighting ongoing upside risks to inflation and warning against overreacting to individual data points, which could undermine the progress already made, according to Reuters.

The Bank of Japan (BoJ) had forecasted that strong economic recovery would help inflation sustainably reach its 2% target, justifying further rate hikes following last month’s increase as part of the BoJ’s efforts to unwind years of extensive monetary stimulus, Reuters reported.

On Sunday, Federal Reserve Bank of San Francisco President Mary Daly emphasized the need for a gradual approach to reducing borrowing costs, while Federal Reserve Bank of Chicago President Austan Goolsbee warned against maintaining a restrictive policy longer than necessary, according to the Financial Times and CNBC, respectively.

On Thursday, Kazutaka Maeda, an economist at Meiji Yasuda Research Institute, commented that recent economic reports are broadly positive, supporting the BoJ’s stance and signaling the potential for further rate hikes, though the central bank would remain cautious after the last rate increase caused a sharp spike in the Yen.

Technical Analysis: USD/JPY Holds Above 145.00

USD/JPY is trading around 145.20 on Thursday. A look at the daily chart shows the pair consolidating under a downtrend line, suggesting a bearish bias. The 14-day Relative Strength Index (RSI) is slightly above 30, indicating the potential for a correction.

On the downside, the USD/JPY pair could find support around the psychological level of 144.00. A break below this level could lead the pair toward the seven-month low of 141.69, recorded on August 5, with further declines potentially targeting the next significant support level at 140.25.

On the upside, immediate resistance could be found at the downtrend line near the nine-day Exponential Moving Average (EMA) at 146.45. A break above this level could weaken the bearish outlook, allowing the pair to test the resistance at 154.50, which has transitioned from previous support to current resistance.

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WTI Crude Oil Remains Below $75.50 Amid Chinese Demand Concerns

WTI Crude Oil Remains Below $75.50 Amid Chinese Demand Concerns

WTI Crude Oil Remains Below $75.50 Amid Chinese Demand Concerns

West Texas Intermediate (WTI) crude oil prices are hovering around $75.30 per barrel during the Asian session on Monday, pressured by concerns over weakened demand from China, the world’s top oil importer.

Recent data from China revealed that Industrial Production increased by 5.1% year-on-year in July, slightly below the expected 5.2% and down from the 5.3% growth recorded in June. This marks the third consecutive month of slowing industrial output, fueling worries about reduced demand for crude oil.

However, geopolitical tensions in the Middle East could potentially support oil prices. The situation has been tense following Hamas’s rejection of a ceasefire deal on Sunday, which has raised concerns over the stability of the region. Israeli Prime Minister Benjamin Netanyahu is set to meet with US Secretary of State Antony Blinken on Monday to discuss the ongoing negotiations, with further talks scheduled in Cairo.
The potential downside for oil prices may be limited by rising expectations of a Federal Reserve interest rate cut as early as September. Recent US economic data has shown strong retail sales and easing inflationary pressures, which could lead to lower borrowing costs and potentially boost economic activity in the US.

San Francisco Fed President Mary Daly and Chicago Fed President Austan Goolsbee both emphasized a cautious approach to rate cuts, suggesting that the Fed should avoid keeping restrictive policies in place longer than necessary.

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Japanese Yen Holds Losses

Japanese Yen Holds Losses as US Dollar Stabilizes Ahead of Key Economic Data

Japanese Yen Holds Losses as US Dollar Stabilizes Ahead of Key Economic Data

The Japanese Yen (JPY) continued its decline against the US Dollar (USD) on Tuesday, with safe-haven flows offering some support amid rising geopolitical tensions in the Middle East.

Japan’s parliament is set to hold a special session on August 23 to discuss the Bank of Japan’s (BoJ) recent decision to raise interest rates. This session, organized by the lower house financial affairs committee, is expected to include an appearance by BoJ Governor Kazuo Ueda, as reported by Reuters.

The USD/JPY pair found support as pressure on the US Dollar eased, following a reduction in expectations for a 50 basis point interest rate cut by the US Federal Reserve (Fed) in September. According to the CME FedWatch Tool, the probability of a 50 basis point cut in September has decreased to 50%, down from 85% the previous week. However, markets still fully anticipate at least a 25 basis point cut at the upcoming meeting.

Investors are closely watching the release of US Producer Price Index (PPI) data on Tuesday and Consumer Price Index (CPI) figures on Wednesday for signs that inflation remains under control in the US.

Daily Digest Market Movers: Yen Weakens as Fed Rate Cut Odds Diminish

Federal Reserve Governor Michelle Bowman commented on Sunday that she sees continued upside risks to inflation and strength in the labor market. Bowman suggested that the Fed may not be ready to cut rates at its September meeting, according to Bloomberg.

A Bloomberg report last week indicated that JP Morgan Asset Management (JPAM) believes the BoJ is unlikely to raise interest rates in the near term. JPAM anticipates that the BoJ may only consider further rate hikes if the Fed cuts rates and the US economy stabilizes, with additional tightening possibly occurring in 2025, provided the global economic environment remains stable.

The BoJ’s Summary of Opinions from its July 30-31 Monetary Policy Meeting revealed that several members believe economic activity and prices are evolving as expected, targeting a neutral rate of “at least around 1%” in the medium term.

BoJ Deputy Governor Shinichi Uchida also highlighted that the BoJ’s interest rate strategy could adapt if market volatility alters economic forecasts, risk assessments, or projections. Given recent market volatility, he emphasized the importance of closely monitoring the economic and price impacts of their policies, stating the need to “maintain the current degree of monetary easing for the time being.”

Minutes from the BoJ’s June meeting indicated concerns among some members about rising import prices due to the recent decline in the JPY, which could pose an upside risk to inflation. One member noted that cost-push inflation might exacerbate underlying inflation if it leads to higher inflation expectations and wage growth.

Technical Analysis: USD/JPY Tests 147.50; Next Barrier at Nine-Day EMA

The USD/JPY pair trades around 147.40 on Tuesday, with the daily chart indicating the pair remains below the nine-day Exponential Moving Average (EMA), suggesting a short-term bearish trend. The 14-day Relative Strength Index (RSI) has breached the 30 level, indicating a potential for a corrective move. If the RSI approaches the 50 level, it could signal a possible improvement in the pair’s momentum.

For support, the USD/JPY pair may test the seven-month low at 141.69, recorded on August 5, followed by the next support level at 140.25.

On the upside, the USD/JPY pair could challenge the immediate barrier at the nine-day EMA around 147.72. A breakout above this level could reduce bearish momentum and allow the pair to approach the 5-day EMA at 153.68, followed by resistance at 154.50.

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Australian Dollar Advances as RBA Signals Potential Rate Hike

Australian Dollar Advances as RBA Signals Potential Rate Hike

Australian Dollar Advances as RBA Signals Potential Rate Hike

The Australian Dollar (AUD) rebounded against the US Dollar (USD) on Monday, driven by hawkish sentiment surrounding the Reserve Bank of Australia (RBA). Positive inflation data from China, a key trading partner, also provided support for the Aussie Dollar.

RBA Governor Michele Bullock emphasized the importance of vigilance regarding inflation risks, stating that the central bank is prepared to raise rates again if necessary. This follows the RBA’s decision to keep rates steady at 4.35% for the sixth consecutive meeting.

On the USD front, market expectations for a potential interest rate cut by the Federal Reserve (Fed) in September have put pressure on the USD, potentially providing further support for the AUD/USD pair. Investors will be closely watching US producer inflation data on Tuesday and consumer inflation figures on Wednesday for signs of stable price growth.

Daily Market Movers: Australian Dollar Rises on Hawkish RBA

RBA Deputy Governor Andrew Hauser attributed persistent inflation to weaker supply and a tight labor market, noting significant uncertainty in economic forecasts. However, the AUD’s gains could be limited by safe-haven flows due to rising geopolitical tensions in the Middle East. Reports suggest Iran may be preparing for a significant strike on Israel, adding a layer of risk to global markets.

Federal Reserve Governor Michelle Bowman reiterated on Sunday her concerns about ongoing inflation risks and a strong labor market, indicating the Fed might not be ready to cut rates in September.

In China, the Consumer Price Index (CPI) rose by 0.5% year-on-year in July, surpassing expectations. Westpac updated its RBA forecast, now predicting the first rate cut will occur in February 2025, moving from the previously anticipated November 2024, and raising its terminal rate forecast to 3.35%.

Last week, Treasurer Jim Chalmers challenged the RBA’s view that the Australian economy is too robust, which he believes is contributing to prolonged inflation. RBA Chief Economist Sarah Hunter also noted that the Australian economy is performing better than previously expected.

Technical Analysis: Australian Dollar Nears Key Support Levels

The AUD/USD pair is trading around 0.6590 on Monday, within an ascending channel that suggests a bullish bias. The 14-day Relative Strength Index (RSI) is consolidating below the 50 level, and a move above this threshold could signal strengthening bullish momentum.

Resistance for the AUD/USD pair is likely around the 0.6630 level, with a breakout potentially pushing the pair toward its six-month high of 0.6798. On the downside, immediate support is seen at 0.6575, with a drop below this level possibly reinforcing a bearish bias, potentially driving the pair toward 0.6540 and further to 0.6470 if pressure persists.

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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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