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Gold Price Holds Firm

Gold Price Holds Firm Above $2,725 Amid Trade War Concerns and Fed Rate Cut Speculation

The price of gold (XAU/USD) continues to build on Monday’s rebound from the $2,689 level, maintaining a bullish trajectory for the second consecutive session. Early Tuesday, gold climbed to its highest level since November 6, trading near $2,729, fueled by U.S. President Donald Trump’s tariff remarks and growing demand for safe-haven assets. Additionally, declining U.S. Treasury bond yields, driven by market expectations of two Federal Reserve rate cuts this year, further support the yellow metal.

Safe-Haven Demand and Trade War Fears Bolster Gold Prices
President Trump announced his intention to impose a 25% tariff on Canada and Mexico, with implementation expected as early as February. He also threatened tariffs on China if it failed to approve a TikTok deal, increasing demand for gold as a safe-haven investment. Meanwhile, easing inflation signals, reflected in last week’s U.S. Producer Price Index (PPI) and Consumer Price Index (CPI), reinforce the possibility of Federal Reserve rate cuts, pushing 10-year U.S. bond yields to a three-week low.

USD Gains Amid Protectionist Policy Expectations
Despite the positive momentum for gold, the U.S. Dollar (USD) has regained some ground after touching a two-week low. This recovery is attributed to expectations that Trump’s trade policies could reignite inflation and compel the Federal Reserve to maintain a hawkish stance. This has limited further gains for the non-yielding gold.

Geopolitical Developments and Market Outlook
The recent Israel-Hamas ceasefire deal and speculation about potential U.S.-Russia negotiations over the Ukraine war are supporting a positive risk sentiment, which might restrict additional bullish moves for gold. Investors are also focused on upcoming events, including the Bank of Japan’s policy meeting on January 23-24 and global flash PMI data, expected to inject volatility into gold prices later in the week.

Technical Outlook: Bullish Bias Persists
Gold has broken above the key $2,720 resistance zone, with technical indicators suggesting further upward potential. The daily chart oscillators remain positive and are not yet signaling overbought conditions, favoring bullish traders. Gold could test the next resistance at $2,735, with a potential extension toward the $2,746-$2,748 zone and possibly the October 2024 peak of $2,790.

On the downside, support levels are found at $2,700 and $2,689, with additional safety nets at $2,662-$2,660. A breach below these levels could lead to a deeper correction toward $2,635 or the $2,622-$2,618 confluence zone, which includes the November trendline and the 100-day EMA.

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MT4

Japanese Yen Weakens Below 150.00 Against USD Amid Mixed Economic Signals

The Japanese Yen (JPY) continues to lose ground during Tuesday’s Asian session, with the USD/JPY pair climbing above the critical 150.00 psychological level. A combination of modest US Dollar (USD) strength and market dynamics is driving this movement, although speculation surrounding a potential interest rate hike by the Bank of Japan (BoJ) in December is tempering aggressive JPY bearish sentiment. Additionally, geopolitical risks, declining US Treasury yields, and concerns over US President-elect Donald Trump’s proposed tariff policies add complexity to the currency’s outlook.

Factors Influencing JPY and USD/JPY Dynamics
  1. BoJ Hawkish Expectations:
    Last week’s Tokyo Consumer Price Index (CPI) indicated accelerating inflation, raising expectations of a December rate hike by the BoJ. Governor Kazuo Ueda reiterated that the central bank would adjust monetary easing measures when confident inflation trends toward 2%.
  2. Geopolitical Risks:
    Tensions remain high as Russia escalates military actions in Ukraine, supported by North Korea. Additionally, Trump’s protectionist rhetoric, including opposition to the Nippon Steel-US Steel deal and potential trade wars with major partners, could reignite inflation concerns globally.
  3. US Economic and Monetary Policy:
    The US Federal Reserve’s future rate-cut trajectory remains uncertain. While markets anticipate a 75% probability of a 25-basis-point cut later this month (per CME FedWatch Tool), critical macroeconomic releases, including Friday’s Nonfarm Payrolls (NFP) and ISM Manufacturing PMI, are expected to guide expectations. Fed Chair Jerome Powell’s upcoming speech may further clarify the policy outlook.
  4. Yield Dynamics:
    The narrowing yield differential between US and Japanese government bonds, due to falling US Treasury yields, provides a modest tailwind for the JPY. However, this has not been sufficient to offset the Yen’s overall weakness.
Technical Outlook for USD/JPY

Support Levels:

  • The pair rebounded from its 100-day Simple Moving Average (SMA) near 149.00, a critical support level.
  • A decisive break below this level could expose the 50% Fibonacci retracement at 148.20 and subsequently 148.00. Further declines may test the 61.8% Fibonacci level around 147.00.

Resistance Levels:

  • Immediate resistance is seen near 150.75 and 151.00.
  • A sustained move beyond these levels could lead to a short-covering rally toward 151.65 and 152.00, where the 200-day SMA is positioned. A break above this pivot point would signal renewed bullish momentum.
Market Sentiment: Mixed Signals Limit Clear Direction

While the USD/JPY pair shows strength above 150.00, lingering uncertainties surrounding US monetary policy, geopolitical tensions, and BoJ rate decisions suggest the pair is not yet out of the woods. Traders will closely monitor upcoming macroeconomic data and central bank commentary for more precise guidance on the pair’s trajectory.

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Gold Price Falls Amid Renewed USD Strength, Rising US Bond Yields

Gold Price Falls Amid Renewed USD Strength, Rising US Bond Yields

Gold Price Falls Amid Renewed USD Strength, Rising US Bond Yields

Gold prices opened the week under heavy selling pressure, dropping to the $2,623-$2,622 range during the Asian session. This decline halts a four-day winning streak as the US Dollar (USD) gains momentum, supported by rising US Treasury bond yields. Expectations that US President-elect Donald Trump’s proposed tariffs could reignite inflationary pressures and reduce the Federal Reserve’s (Fed) room to cut rates further contributed to the bond yield uptick and USD recovery.

Key Factors Influencing Gold’s Decline

  1. USD Strength and Bond Yields:
    • The USD rebounded from a three-week low, fueled by a fresh surge in US Treasury yields.
    • Markets expect inflation concerns driven by potential tariffs to constrain the Fed’s ability to lower interest rates, adding to the USD’s appeal.
  1. Geopolitical Risks and Economic Data Awaited:
    • While the USD’s recovery pressures gold prices, geopolitical uncertainties in Ukraine, the Middle East, and trade tensions offer some support for the safe-haven metal.
    • Traders are cautious, awaiting key US data releases, such as the ISM Manufacturing PMI and the closely watched Nonfarm Payrolls (NFP), for clarity on the Fed’s rate trajectory.
  1. Trump’s Tariff Threats and Global Developments:
    • Over the weekend, Trump threatened 100% tariffs on BRICS nations if they moved to replace the USD in global transactions.
    • Meanwhile, in Ukraine, President Zelenskyy expressed willingness to negotiate territorial concessions for peace, introducing a potential shift in the conflict’s dynamics.
    • In Syria, escalating airstrikes add to regional instability, indirectly influencing market sentiment.
  1. China’s Mixed Economic Signals:
    • China’s Manufacturing PMI rose slightly to 50.3 in November, signaling modest expansion, while Non-Manufacturing PMI eased to 50.0.
    • The Caixin Manufacturing PMI jumped to 51.5, indicating hope for further government stimulus to boost demand.

Outlook

Gold’s near-term trajectory remains contingent on upcoming US macroeconomic data, particularly the ISM PMI and NFP reports. These figures will influence expectations for Fed rate cuts and drive USD dynamics. The interplay between geopolitical risks and economic signals will also play a crucial role in shaping the XAU/USD pair’s next move.

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Australian Dollar Gains on Hawkish RBA Remarks Despite US-China Tensions

Australian Dollar Strengthens on Hawkish RBA Comments; Risks Remain Amid US-China Tensions

Australian Dollar Strengthens on Hawkish RBA Comments; Risks Remain Amid US-China Tensions

The Australian Dollar (AUD) extended its rally for a third consecutive session on Friday, buoyed by hawkish remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock. However, the AUD/USD pair may encounter headwinds as the United States prepares to introduce new measures on Monday to limit China’s progress in artificial intelligence technology.

RBA’s Hawkish Stance and Revised Rate Forecasts
RBA Governor Bullock reiterated that core inflation in Australia remains “too high” to justify any near-term rate cuts, emphasizing that inflation is unlikely to sustainably return to the central bank’s target range before 2026. This hawkish tone prompted ANZ to revise its forecast, now predicting the RBA will delay interest rate cuts until May rather than February, following concerns over inflation staying elevated for the next two years.

Bullock’s comments underscore the RBA’s cautious approach, with Bloomberg reporting her focus on ensuring sustained progress in curbing inflation before any policy loosening.

US Dollar Outlook and Fed’s Vigilance
While the US Dollar (USD) has softened recently, its downside may be capped by the Federal Reserve’s cautious stance. Strong consumer spending data released on Wednesday highlighted resilient demand in October, but limited progress in reducing inflation could keep the Fed vigilant, delaying rate cuts.

Technical Analysis: AUD/USD Faces Bearish Momentum
The AUD/USD pair is trading near the 0.6500 mark on Friday, showing signs of bearish momentum. The pair remains within a descending channel, with the 14-day Relative Strength Index (RSI) below 50, indicating continued negative sentiment.

  • Support Levels: Immediate support is at the recent four-month low of 0.6434, marked on November 26. A breach of this level could lead to a test of the yearly low at 0.6348, last seen on August 5, with additional support near 0.6300 at the channel’s lower boundary.
  • Resistance Levels: Resistance lies at the nine-day Exponential Moving Average (EMA) of 0.6502, followed by the 14-day EMA at 0.6513. A breakout above these could target the channel’s upper boundary at 0.6530 and potentially the four-week high of 0.6687.

Key Risks Ahead
The AUD’s outlook remains vulnerable to geopolitical and economic developments, particularly the US measures targeting China. These actions could escalate trade tensions, impacting the risk-sensitive Australian Dollar. Traders will also closely monitor updates on US monetary policy and global risk sentiment for further cues.

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Japanese Yen Weakens Amid Rebounding

Japanese Yen Weakens Amid Rebounding US Yields and Modest USD Recovery

Japanese Yen Weakens Amid Rebounding US Yields and Modest USD Recovery

The Japanese Yen (JPY) softened on Thursday, with renewed demand for the US Dollar (USD) pushing the USD/JPY pair above mid-151.00 during the Asian session, recovering from a five-week low hit earlier. Robust US economic data released on Wednesday, indicating resilience and limited inflation progress, suggested the Federal Reserve might adopt a cautious stance on rate cuts. This fueled a fresh uptick in US Treasury yields, further supporting the USD while reducing demand for the lower-yielding JPY.

A broadly positive risk sentiment added to the JPY’s struggles, although speculation about a possible Bank of Japan (BoJ) rate hike in December limited the currency’s downside. Meanwhile, geopolitical concerns and lingering trade-related tensions provided some underlying support to the Yen, with market participants avoiding aggressive moves ahead of Japan’s inflation data on Friday and amid thin trading volumes due to the US Thanksgiving holiday.

Yen’s Weakness Offset by Rate Hike Speculations and Inflation Progress

The JPY remains pressured by multiple factors, but downside risks appear capped. Japan’s latest Consumer Price Index (CPI) data and stable corporate service inflation reinforced BoJ Governor Kazuo Ueda’s stance that wage-driven inflation is progressing. This sustains expectations for a potential BoJ rate hike in December, which had driven the Yen to a five-week high against the USD on Wednesday.

On the fiscal front, Japan’s parliament is considering a supplementary budget to aid inflation-stricken households, adding another layer of economic policy dynamics. Simultaneously, a flight to safety driven by geopolitical concerns, combined with expectations for US fiscal restraint, has kept the JPY somewhat supported.

US Dollar Rebounds Amid Strong Economic Data

The USD found renewed strength following Wednesday’s data, which highlighted solid Q3 economic growth (2.8% annualized) and consumer spending gains (3.5%, the highest this year). Labor market data also exceeded expectations, with jobless claims falling to 213K, while durable goods orders and the PCE Price Index showed mixed results.

Although the Fed is not expected to aggressively ease rates in December, markets are pricing in a 65% chance of a 25-basis-point cut. At the same time, expectations for inflationary pressures from expansionary policies are supporting the USD.

With low trading volumes due to Thanksgiving and key Japanese CPI data approaching, traders are likely to exercise caution in the near term.

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Gold Price Steady as Markets Await US PCE Inflation Data

Gold Price Holds Modest Gains as Traders Await US PCE Inflation Data

Gold Price Holds Modest Gains as Traders Await US PCE Inflation Data

Gold (XAU/USD) maintains its positive momentum, extending gains for the second consecutive day on Wednesday. After rebounding from a one-week low near $2,600, the precious metal climbed to a two-day high around $2,645 during the early European session. Persistent geopolitical tensions, including the Russia-Ukraine war, and tariff plans announced by US President-elect Donald Trump are driving demand for safe-haven assets like gold.

A subdued US Dollar (USD) has also supported gold prices. However, the yellow metal’s upside remains capped by a risk-on sentiment, expectations of slower Federal Reserve interest rate cuts, and steady US Treasury yields. Traders are now focused on key US economic data, including Q3 GDP and the Core PCE Price Index, for further direction.

Key Factors Supporting Gold Prices

  1. Geopolitical Tensions:
    • Ukraine reported its largest Russian drone attack on Tuesday, while Russia recently deployed hypersonic missiles.
    • Reports suggest Russia is using North Korean troops, and Ukraine is retaliating with Western-supplied missiles, heightening the risk of escalation.
  2. Trade Concerns:
    • President-elect Trump’s commitment to tariffs on imports from Canada, Mexico, and China has fueled safe-haven demand for gold.
  3. Middle East Developments:
    • A ceasefire deal between Lebanon and Israel announced by US President Joe Biden has eased tensions in the region, limiting additional haven flows.
  4. Economic Data:
    • US consumer confidence rose to a four-month high in November, while the Federal Reserve remains cautious about further rate cuts. The CME Group’s FedWatch Tool suggests a 63% chance of a 25-basis-point rate cut at the December meeting.

Technical Outlook

From a technical perspective, gold’s recovery from the 61.8% Fibonacci retracement level supports a bullish bias. However, oscillators on the daily chart indicate that gains may face resistance near the 100-period Simple Moving Average (SMA) on the 4-hour chart, currently around $2,645.

Upside Targets:

  • A break above $2,645 could push prices towards $2,665 and further to $2,677-$2,678. A move beyond $2,678 would set the stage for a retest of the $2,700 psychological level.

Downside Risks:

  • Immediate support is seen near $2,624-$2,622, followed by the $2,600 mark. A decisive break below $2,600 could expose the 100-day SMA near $2,569-$2,568, with further losses potentially extending to the monthly low of $2,537-$2,536.

Gold traders remain cautious as the market awaits the US inflation data, which could provide a clearer outlook on the Federal Reserve’s monetary policy trajectory.

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Gold Prices Drop Amid Risk-On Sentiment

Gold Prices Drop Amid Risk-On Sentiment, Hold Above $2,650 Level

Gold Prices Drop Amid Risk-On Sentiment, Hold Above $2,650 Level

Gold price (XAU/USD) saw a sharp intraday decline on Monday after briefly touching a nearly three-week high around the $2,721-$2,722 level. This drop ended the metal’s five-day winning streak, driven by a shift in market sentiment toward risk-on assets.

The decline in gold prices coincided with two key developments: US President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary and reports suggesting progress toward a ceasefire between Israel and Hezbollah in Lebanon. These factors bolstered investor confidence, leading to a flow away from safe-haven assets like gold as markets opened for the new week.

Key Drivers Behind Gold’s Decline:

  1. Risk-On Sentiment Gains Momentum:
    • Scott Bessent’s nomination eased market uncertainties and signaled a more disciplined fiscal approach, boosting equity markets.
    • Reports of a potential ceasefire between Israel and Hezbollah further reduced geopolitical tensions, enhancing risk appetite.
  2. US Economic and Policy Factors:
    • Optimism surrounding the Trump administration’s pro-business policies reinforced positive sentiment in equities, adding pressure on gold.
    • Strong US economic data, including the S&P Global Composite PMI reaching 55.3 in November (the highest since April 2022), hinted at accelerated growth in the fourth quarter.
    • Hawkish signals from Federal Reserve policymakers and the possibility of inflation surprises supported expectations for a hold on rate cuts in December.
  3. US Dollar and Treasury Yields:
    • While the US Dollar experienced profit-taking after reaching a two-year high, expectations of sustained monetary tightening limited gold’s upside.
    • A drop in US Treasury bond yields, prompted by Bessent’s fiscal conservatism, offered only marginal support to non-yielding assets like gold.

Market Outlook:

  • Despite Monday’s decline, gold prices remain above the $2,650 support level, with investors awaiting key economic data and central bank signals for further direction.
  • This week’s focus will include the Federal Reserve’s November FOMC meeting minutes and the US PCE Price Index, critical indicators for inflation and monetary policy.

In the near term, a continued risk-on environment and easing geopolitical tensions could keep gold under pressure, though surprises in US data or policy shifts may spark renewed volatility in XAU/USD.

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Asian

Asian Markets and Currencies Tumble in Widespread Sell-off

Asian Markets and Currencies Tumble in Widespread Sell-off

Asian stocks and currencies faced a sharp downturn as weakening momentum in China’s economy compounded fears stirred by high US interest rates and escalating tensions in the Middle East. The MSCI Asia Pacific Index recorded its most significant drop since August, marking widespread losses across all major markets. This decline coincided with a broad sell-off in global markets, evidenced by falling futures for US and European equities and a more than 1% drop in the S&P 500 amid volatile trading fueled by strong US retail sales data.

A series of disappointing economic indicators from China highlighted concerns about the uneven nature of the country’s economic recovery. Although GDP and fixed asset investment figures exceeded expectations, retail sales and industrial production failed to meet forecasts, signaling potential weaknesses in the economic foundation. This patchy recovery has led to increased volatility in the financial markets, with significant implications for currency valuations.

The currency markets saw dramatic shifts, particularly among emerging market currencies which plunged to multi-year lows. The South Korean won and the Indonesian rupiah were notably affected, each falling to their lowest levels in years. Market analysts attributed part of this regional currency weakness to a surprising move by China to lower its yuan defense, which has put additional pressure on neighboring currencies.

Market analyst Tony Sycamore from IG Australia described the situation as a “perfect storm” created by consistent high US inflation data, potential missteps in Middle East policy, and overextended global equity positions. These factors have combined to unsettle bond markets and increase the risk of broader economic disruptions.

In the currency markets, the US dollar reached its highest point since November, driven by its status as a safe-haven amid rising geopolitical risks in the Middle East. This surge in the dollar has had a cascading effect across Asian markets, exacerbating financial instability in the region.The economic turmoil has forced interventions by central banks in several countries to stabilize their currencies. Indonesia’s central bank stepped in after the rupiah crossed 16,000 against the dollar, a threshold not seen since 2020. Similarly, the South Korean won dipped to its lowest since 2022, and the Indian rupee hit a record low against the dollar.

Amid these currency woes, commodity markets also reacted. Oil prices in Asia climbed, with West Texas Intermediate oil recovering to over $85 a barrel following geopolitical developments involving Iran and Israel. Meanwhile, gold prices remained stable, and US treasury yields saw fluctuations following a spike in yields the day before.

Overall, the Asian financial markets are navigating a period of significant uncertainty, influenced by internal economic data and external geopolitical and economic pressures.

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European Stock

European Stock Futures Rise, Gold Reaches New High

European Stock Futures Rise, Gold Reaches New High

European stock futures advanced on Friday, contrasting with declines in Asian markets, as global investors responded to a diverse set of influences ranging from U.S. inflation data to geopolitical tensions in the Middle East. Concurrently, gold prices soared to a new high, touching nearly $2,400 an ounce, while oil prices also saw an uptick, with Brent crude crossing the $90 per barrel mark, despite the overall weekly trajectory pointing towards a decline.

The financial landscape was marked by various pressures, including the aftermath of a deadly attack on an Iranian diplomatic site in Syria, raising concerns over potential regional escalations. These geopolitical developments, alongside enduring inflation concerns, have kept the global markets on edge.

European equity futures exhibited resilience, increasing by 0.7%, even as the broader MSCI Asia-Pacific stocks index dipped by 0.3%. The disparities in regional market performances underscore the complex interplay of global economic signals and local factors. Notably, Asian markets experienced mixed outcomes; Japanese stocks gained, propelled by a robust real estate sector, while stocks in Australia, South Korea, and Hong Kong faced declines.

The global currency scene remained tense, with the Japanese yen showing little change after previously slipping to its lowest level against the dollar since 1990, prompting the Japanese government to signal potential interventions. Similarly, the offshore Chinese yuan saw modest gains against the dollar, maintaining stability amid its central bank’s efforts to manage currency fluctuations against a generally strengthening dollar. In the United States, the focus shifted towards corporate earnings, with significant anticipation surrounding the performance of major banks such as JPMorgan Chase & Co., Wells Fargo & Co., and Citigroup Inc., which were slated to report their quarterly results. This comes against a backdrop of expectations set by Wall Street analysts, who projected a modest 3.8% growth in earnings per share among S&P 500 companies for the quarter. Particularly noteworthy is the anticipated 38% earnings increase among the tech giants, often referred to as the “Magnificent Seven,” which includes industry leaders like Apple Inc., Microsoft Corp., and Amazon.com Inc.

Despite recent market optimism fueled by better-than-expected corporate earnings, concerns about persistent inflation have led to adjustments in the expectations for U.S. Federal Reserve rate cuts. Swaps traders have notably reduced their bets on the extent of rate cuts in 2024 following higher-than-anticipated consumer price index readings. The U.S. producer price index, although slightly lower than expected, continued to indicate a heated economic environment, mitigating some fears of uncontrolled inflation but still painting a picture of an economy under pressure.

Investors and analysts alike are closely monitoring these developments, as the interplay between earnings performances, government policy responses, and ongoing geopolitical risks are set to define the market trajectory in the coming periods. The consensus among market strategists emphasizes the significant role that corporate earnings and economic data will play in shaping investor sentiment and market movements in an increasingly complex global financial landscape.

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NVidia

Nvidia Shares Decline Amid Intensifying Competition in AI Chip Market

Nvidia Shares Decline Amid Intensifying Competition in AI Chip Market

On Tuesday, Nvidia’s stock experienced a significant drop, declining by up to 5%, amid escalating competition in the artificial intelligence (AI) chip sector. This downturn in Nvidia’s market performance coincides with the unveiling of new, advanced AI chips by its competitors, signaling a more intense rivalry in this high-stakes market.

Intel, a key player in the industry, is stepping up its challenge against Nvidia. The tech giant introduced the Gaudi 3 AI chip, poised to be a formidable rival to Nvidia’s H100 AI chips. The H100 has been instrumental in Nvidia’s recent revenue and income boost. Intel claims that the Gaudi 3 AI accelerator surpasses Nvidia’s H100 in inference performance by 50% and offers a 40% improvement in power efficiency. Furthermore, Intel aims to disrupt the market with more competitive pricing for its AI chips, promising to offer them at significantly lower rates than Nvidia’s offerings.

The Gaudi 3’s capabilities in computation and energy efficiency are noteworthy, but its performance compared to Nvidia’s forthcoming Blackwell chip—the successor to the H100—remains to be seen. Nvidia announced the Blackwell chip last month, and it represents the next evolution in their AI chip technology.

Beyond Intel, Alphabet is also venturing into the AI chip arena. The company has been developing the Axion chip, a move that could reduce Google’s dependence on Nvidia. These in-house chips are designed to enhance Google’s big-data analytics capabilities. Despite views from some analysts who see Axion as a direct challenge to Nvidia, Google executives have indicated that their focus is more on expanding the market rather than just competition.

Alphabet’s Axion chips, based on CPU architecture, are engineered to manage a variety of AI-related tasks. This diversification in AI chip capabilities highlights the evolving nature of the market and the different approaches companies are taking.

Amid this heightened competition, Nvidia’s distinctive edge lies in its AI-related software. Experts in the field, like Big Technology founder Alex Kantrowitz, emphasize Nvidia’s strength in this domain. According to Kantrowitz, Nvidia’s software is highly sought after by developers for training and running AI models. This software superiority creates a significant advantage for Nvidia, as it fosters a dedicated developer community within its ecosystem. Despite Intel’s claims of superior chip performance, Nvidia’s stronghold in AI software remains a formidable barrier for competitors. This software-led approach is key to Nvidia’s continued dominance in the AI chip market, despite the rising challenges from other tech giants.

 

 

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Dow Jones Industrial Average Drops

Dow Jones Industrial Average Drops Below 39,000, Reversing Earlier Gains

Dow Jones Industrial Average Drops Below 39,000, Reversing Earlier Gains

As Tuesday’s trading session drew to a close, the Dow Jones Industrial Average (DJIA) experienced a shift back to negative territory, marking a notable development in the U.S. stock market. This change in trajectory for the DJIA was primarily influenced by the latest data indicating a slowdown in U.S. services activity. This information brought some degree of reassurance to investors, who had been growing increasingly anxious about the possibility of the Federal Reserve scaling back on its monetary easing measures, especially in light of recent robust macroeconomic figures from the U.S.

The pivotal data causing this shift was the U.S. ISM Services PMI for March, which came in at 51.4, down from February’s reading of 52.6 and contrary to market forecasts, which had anticipated a minor rise to 52.7. Furthermore, the Prices Paid sub-index, a critical measure of inflationary pressures within the service sector, also saw a decline, dropping to 53.4 from 58.6 in the preceding month. This figure is notably the lowest it’s been in several years, indicating a potential disinflationary trend in the economy.

The release of these figures significantly counterbalanced the effects of the strong ADP employment data and the more hawkish sentiments recently expressed by Federal Reserve Chair Jerome Powell and Atlanta Fed President Raphael Bostic.

Reacting to this news, all three primary Wall Street indexes witnessed an uplift. The NASDAQ led the gains, rising by 0.5% to reach 16,319. It was closely followed by the S&P 500, which saw a 0.3% increase to 5,223, and the Dow Jones, which, despite a modest 0.1% rise to 39,220, still lingered below the 40,000 peak achieved the previous week.

In terms of market sectors, Industrials emerged as the top performer with a 0.75% increase, closely followed by the Materials sector, which saw a 0.66% gain. In contrast, Consumer Staples and Utilities were the only sectors in the red, dropping by 0.95% and 0.1% respectively.

The mixed trends continued at the level of individual stocks. Intel (INTC) faced a notable 7% decline to $40.78, impacted by a report indicating a significant operating loss in its foundry business for 2023. Other stocks such as Procter & Gamble (PG) and Johnson & Johnson (JNJ) also experienced downturns, falling to $156.81 and $155.19 respectively.

On a more positive note, Caterpillar (CAT) saw an upward movement of 2.3% to $373.252, and Amazon (AMZN) also enjoyed gains, rising by 1.07% to $182.63. These movements in individual stocks reflect a broader landscape of varied performance across different sectors and companies on Wall Street.

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ASX 200

ASX 200 Stabilizes Near 7,880 After Retreating from Record Peaks

ASX 200 Stabilizes Near 7,880 After Retreating from Record Peaks

The ASX 200 Index, a benchmark for Australian equities, recently experienced a slight retreat to around 7,880 points after scaling new record highs earlier this week on Tuesday. This pullback reflects the market’s natural ebb and flow, particularly after significant gains. Despite this slight dip, the index has been buoyed by substantial contributions from various sectors, most notably materials, mining, and utilities. These industries have shown remarkable resilience and growth, reflecting the overall strength of the Australian economy.

A key factor influencing this trend is the impressive manufacturing performance in China, Australia’s leading trade partner. A private survey revealed that Chinese factory activity has expanded at its most rapid pace in over a year, fostering a more optimistic market sentiment. This positive news from China underscores the interconnectedness of global economies and the direct impact of international trade relations on domestic markets.

In this dynamic market environment, several companies have stood out with significant gains. West African Resources witnessed a notable surge of 5.00%, closing at 1.26. Newmont also showed strong performance, rising by 1.65% to 36.43. Similarly, Gold Road Resources enjoyed a gain of 4.87%, reaching 1.66. These companies exemplify the robust nature of the market, even amidst fluctuations.

On the flip side, there have been some notable declines. Orora experienced a sharp drop of 13.42% to 2.36, followed by Netwealth Group, which fell by 5.16% to 20.03. Megaport also saw its shares decrease by 4.60% to 14.30. These movements reflect the inherent volatility in the stock market and the variety of factors that can influence individual stock performances.

Focusing on the broader industry landscape, Macmahon Holdings has been making waves in the mining services sector. With a strong emphasis on the gold industry, the company has expanded its services to include mining support and civil infrastructure. This diversification strategy highlights the evolving nature of the mining industry and the need for companies to adapt to changing market conditions.

In the renewable energy sector, Genex Power recently revealed that Fortescue has not yet met the conditions precedent for the Bulli Creek Solar and Battery Project (BCP), one of Queensland’s largest renewable energy endeavors. Fortescue had entered into a 25-year solar power purchase agreement with Genex in October 2023, reflecting the growing trend of major corporations investing in sustainable energy solutions.

Finally, the Reserve Bank of Australia’s (RBA) decision during its March meeting to maintain the current cash rate until at least November reflects a cautious approach. With inflation rates higher than in other countries and a tight job market, the RBA’s stance seems prudent. This decision underscores the complex balancing act central banks face in managing monetary policy to foster economic stability and growth.

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ASX 200 Nears 7,900 Amid Improved Market Sentiment, Anticipating RBA Rate Cuts

ASX 200 Nears 7,900 Amid Improved Market Sentiment, Anticipating RBA Rate Cuts

The Australian Securities Exchange (ASX) 200 Index has marked a significant uptick, approaching the 7,900 mark with a 0.26% rise on Thursday. This growth propels the index to new record heights, reflecting a positive shift in market sentiment. Key to this upward trend are the latest Australian economic indicators, which suggest a potential easing in the Reserve Bank of Australia’s (RBA) monetary policy.

Contributing to the optimistic outlook are the subdued Consumer Inflation Expectations and Retail Sales figures emerging from Australia. These metrics have heightened anticipations that the RBA might lean towards more accommodative interest rate policies. Notably, the Australian Monthly Consumer Price Index, released on Wednesday, registered lower than expected, further fueling this sentiment and bolstering the stock market.

Data reveals that Australia’s consumer expectations for inflation over the coming year grew by 4.3% in March, a slight decrease from the previous 4.5% increase. Moreover, the seasonally adjusted Retail Sales saw a 0.3% month-over-month rise in February, falling short of the projected 0.4% and below the prior 1.1% increment.

The surge in the ASX 200 was particularly driven by robust performances in the mining sector, thanks to rising prices in key commodities like gold, iron ore, and lithium. Arcadium Lithium saw a remarkable increase of 10.20% to 4.43, Alumina jumped by 5.60% to 1.42, and Whitehaven Coal grew by 5.27% to 7.10. Conversely, some companies experienced dips, with Xero declining by 1.09% to 132.43, Audinate Group falling 0.75% to 21.24, and Tabcorp Holdings dropping 1.05% to 0.76.

In other market developments, Allup Silica is making strides with its Sparkler project in southern Western Australia. Bulk sample tests of high-purity silica have surpassed industry standards, positioning the company favorably for diverse high-purity applications, including in photovoltaics and advanced manufacturing sectors.

Elsewhere, Terra Uranium is expanding its exploration and development in Canada. The company recently finalized a letter of intent to acquire the Amer Lake uranium deposit in Nunavut, building on its previous acquisitions in Canada’s Athabasca Basin.

Furthermore, AIC Mines, a noted copper producer, reported a substantial 86% increase in ore reserves at its Jericho copper deposit, south of its Eloise high-grade underground copper mine in Queensland. The updated reserve estimate now stands at 3.2 million tonnes, with a grade of 1.9% copper and 0.4 grams per tonne of gold, totaling 61,100 tonnes of copper and 37,000 ounces of gold. This significant reserve upgrade positions AIC Mines strongly in the copper market.

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Amid a Soaring Stock Market, India’s Consumer Stocks Gain 18% but Still Underperform

Amid a Soaring Stock Market, India’s Consumer Stocks Gain 18% but Still Underperform

India’s booming economy is exhibiting a stark contrast between the ultra-wealthy and the middle class, a trend reflected in the stock market’s response to consumer and luxury goods. Despite impressive growth, consumer companies in sectors like toiletries and appliances are not keeping pace with broader market indices. This is attributed to modest income growth and fluctuating inflation impacting the demand for everyday items. On the other hand, luxury items are experiencing robust sales.

The country, Asia’s third-largest economy, is projected to grow by 7.6% in the current financial year. However, private consumption, a major component of the economy, is only expected to increase by 3%, marking the slowest rate in two decades, excluding the pandemic years. This period has also seen a significant widening of the wealth gap, with the top 1% holding more wealth than in the past sixty years, according to the World Inequality Lab.

Vineet Arora, managing director at NAV Capital, notes a substantial income shift towards the higher income brackets, fueling growth in premium products. Companies dealing in luxury cars, high-end electronics, and jewelry are flourishing, with their stock prices soaring. Titan Company, for example, saw a 44.3% increase in share price over the past year, while luxury watch retailer Ethos witnessed a 162% jump.

In contrast, the fast-moving consumer goods sector, as measured by the Nifty FMCG index, grew by just 18%, lagging behind the broader Nifty 50 index, which rose by 30%. Analysts anticipate this underperformance to continue for the next few quarters until economic growth becomes more inclusive.

Sustainable growth in the broader market hinges on enhanced rural demand and government initiatives. However, consumer segments dependent on lower-income groups are experiencing sluggish growth. According to Sonam Udasi of Tata Asset Management, about half of the 90 FMCG categories tracked by Kantar either saw no growth or a decline in 2023.

Hindustan Unilever, a major player in this space, reported a marginal profit increase and a decrease in sales due to intensified competition and stagnant demand in rural areas. This situation underscores the complex dynamics at play in India’s economy, where luxury thrives amidst a challenging landscape for everyday consumer goods.

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XAG/USD Dips Below $27.00 as Risk Appetite Grows

XAG/USD Dips Below $27.00 as Risk Appetite Grows

Silver prices (XAG/USD) softened for a second day, hovering around $26.95 during the early European session on Tuesday. The market’s improved sentiment, driven by reduced fears of escalating Middle East conflicts, is dampening demand for the metal known for its safe-haven allure. Investors are also cautious, opting to stay on the sidelines while awaiting the release of the US preliminary S&P Global Purchasing Managers Index (PMI) data for April later in the day.

The price of silver has declined to near three-week lows as the potential for a wider conflict in the Middle East seems to be abating, prompting traders to shift their investments from safe havens like silver to riskier assets. This shift occurred after Iran’s Foreign Minister, Hossein Amirabdollahian, announced last Friday that Iran would not retaliate against Israel’s recent strikes. Moreover, the lack of further public comments from Israeli officials suggests that both nations might be seeking to de-escalate the situation.

Adding pressure to silver prices, the US Dollar is finding support from a lower likelihood of interest rate cuts by the US Federal Reserve (Fed), thanks to strong US economic performance and hawkish remarks from Fed officials. New York Fed President John Williams recently indicated no immediate need to lower rates considering the economic strength. Similarly, Chicago Fed President Austan Goolsbee affirmed that the current tight monetary policy aligns well with the ongoing economic data.

The persistent narrative of higher US interest rates for an extended period could further erode the appeal of silver, which does not offer interest returns. Market predictions reflect dwindling expectations for rate cuts in the near future: the likelihood of a reduction in June is just 15%, while a cut by July is seen as less than likely at under 45%. Even a cut by September, not fully anticipated, holds a probability of less than 70%, as shown by the CME FedWatch Tool.

Overall, silver’s attractiveness as a non-yielding asset is diminishing amid a backdrop of a stronger dollar and shifting investor focus towards assets with potential for higher returns, influenced by global economic dynamics and geopolitical calm.

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Gold Price

Gold Price Stays Under $2,400, Bullish Outlook Holds

Gold Price Stays Under $2,400, Bullish Outlook Holds

Gold prices (XAU/USD) struggled to extend their recovery from a recent low of $2,325-2,324, hovering within a narrow range during Tuesday’s Asian trading session. Despite the lackluster performance, gold remained close to its all-time high set last Friday, supported by ongoing geopolitical tensions in the Middle East and a slight retreat in US Treasury yields.

These factors collectively provide a supportive backdrop for the precious metal, often viewed as a safe-haven asset during times of crisis. The decline in Treasury yields, which typically moves inversely to gold prices, also helped prop up the market.

However, potential headwinds for gold arise from expectations surrounding US monetary policy. With the US economy demonstrating resilience and persistent inflation issues, it is anticipated that the Federal Reserve may delay any interest rate cuts. This prospect tends to bolster US bond yields and strengthen the US Dollar, which reached its highest level since early November. A stronger dollar can restrain gold’s upside, as it makes the metal more expensive for holders of other currencies.

Investors and traders are now focusing on upcoming speeches by Federal Open Market Committee (FOMC) members, including Fed Chair Jerome Powell. These presentations are crucial as they could offer new insights into the Fed’s policy direction and its implications for economic conditions and interest rates.

These factors are likely to influence short-term trading dynamics for gold. The interplay between a strong dollar, stabilizing bond yields, and geopolitical risks will continue to dictate the precious metal’s price movements in the near term. As such, market participants remain vigilant, ready to adjust their strategies based on the latest economic indicators and policy statements from central bank officials.

 

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WTI

WTI Remains Under $85.50 Amid Concerns Over Inflation

WTI Remains Under $85.50 Amid Concerns Over Inflation

Western Texas Intermediate (WTI), the benchmark for U.S. crude oil, lingered around $85.00 per barrel on Friday, reflecting a subdued trading environment amid inflationary concerns. The price of WTI dipped slightly as expectations for imminent U.S. interest rate cuts diminished due to persistently high inflation rates. This economic backdrop suggests a challenging path ahead for rate adjustments by the Federal Reserve.

The recent economic data from the U.S., including inflation and employment reports, suggests that inflation is not subsiding as hoped. The minutes from the Federal Open Market Committee (FOMC) meeting on Wednesday highlighted the uncertainty among members about the persistent high inflation rates. The members expressed concerns that recent data have not convincingly demonstrated that inflation is trending back towards the Fed’s target of 2%. Financial markets, having digested these insights, now anticipate only a couple of rate cuts this year, likely beginning in September, according to projections from the CME FedWatch Tool. This sentiment supports a “higher-for-longer” U.S. interest rate scenario, which could dampen oil demand due to increased costs associated with financing and storing crude oil.

Adding to the downward pressure on WTI prices, the latest Energy Information Administration (EIA) report revealed an unexpected rise in crude oil stockpiles. For the week ending April 5, inventories surged by 5.841 million barrels, significantly overshooting the market’s forecast of a 2.366 million barrel increase. This buildup follows a previous week’s increase of 3.21 million barrels, suggesting a softer demand outlook for crude.However, geopolitical tensions in the Middle East are providing some support to oil prices, mitigating further declines.

The ongoing conflict and diplomatic strains in the region, especially concerning Israel and Hamas, continue to fuel uncertainties. Fresh negotiations have taken place this week in the enduring Gaza conflict, though they have yet to yield a conclusive agreement. Additionally, rising tensions between Iran and Israel following a suspected Israeli airstrike on an Iranian embassy in Syria on April 1st contribute to the geopolitical risks that might prevent a significant drop in WTI prices for the near future.

These factors collectively shape the current state of the oil market, with geopolitical risks partially cushioning the impact of economic headwinds such as inflation and potential adjustments in U.S. monetary policy. The intricate interplay between these elements underscores the volatile nature of oil prices and the global economic landscape influencing them.

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WTI Drops

WTI Drops to $84.70 Amid Gaza Ceasefire Talks, US CPI Data Anticipation

WTI Drops to $84.70 Amid Gaza Ceasefire Talks, US CPI Data Anticipation

Western Texas Intermediate (WTI), the benchmark for US crude oil, is currently trading near $84.60, marking its fourth consecutive day in the red. This decline is influenced by a combination of factors including the build-up of US crude stocks and profit-taking activities. Market attention is now turning towards the upcoming release of the US March Consumer Price Index (CPI) report and the Federal Open Market Committee (FOMC) Minutes, both scheduled for later today.

Last week’s US employment report has sparked debates among investors about the Federal Reserve’s potential postponement of interest rate cuts this year. The impending US CPI data for March is highly anticipated, as it could provide valuable insights into the inflation trends and influence the Federal Reserve’s monetary policy decisions. A stronger-than-expected CPI report could bolster the US Dollar (USD), potentially impacting WTI prices, which are denominated in USD.

Adding to the downward pressure on WTI prices is the larger-than-anticipated increase in US crude inventories. Data for the week ending April 5 showed a rise of 3.034 million barrels, exceeding both the previous week’s decline of 2.286 million barrels and market predictions of a 2.415 million barrel increase, according to figures released by the American Petroleum Institute (API).

Another factor in the oil market dynamics is the statement from the leader of Iran’s Revolutionary Guard navy, suggesting the possibility of closing the Strait of Hormuz if deemed necessary. This strait is a crucial passage for global oil trade, with about a fifth of the world’s oil consumption passing through it daily. Such a move could stoke fears of supply disruptions, potentially limiting further declines in WTI prices.

In the geopolitical arena, the latest developments in the Middle East are also being monitored by oil traders. An Israeli proposal for a ceasefire in Gaza was deemed insufficient by Hamas in meeting the conditions set by Palestinian militant groups. However, Hamas has indicated a willingness to consider the proposal. The continuing tensions in the region could exacerbate concerns about market tightness and influence oil prices.

Together, these various factors – the US CPI report, FOMC minutes, crude inventory levels, and Middle Eastern geopolitical tensions – are shaping the current dynamics of WTI prices and the broader oil market.

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WTI Holds Near Multi-Month High

WTI Holds Near Multi-Month High, Above $85 per Barrel

WTI Holds Near Multi-Month High, Above $85 per Barrel

West Texas Intermediate (WTI) U.S. Crude Oil has exhibited signs of a bullish market, maintaining a strong position in a narrow trading range during Thursday’s Asian trading session. The commodity’s prices have been hovering just above the $85 mark, mirroring the stability seen at its highest point since October of the previous year. While there have been negligible changes in its price as the day progresses, WTI is at the confluence of several influencing factors.

A surprising development affecting oil prices came from the Energy Information Administration’s (EIA) report on Wednesday, revealing an unexpected increase in U.S. crude inventories. This accumulation is typically seen as a negative influence on oil prices, as it suggests a potential surplus of oil availability. Despite this, WTI prices find some support against the backdrop of multiple global concerns.

Recent geopolitical developments are fanning the flames of market anxiety, particularly the Ukrainian attacks on Russian oil refineries, which are exacerbating fuel shortages. Tensions in the Middle East also play a crucial role, as there is a palpable fear that the conflict between Israel and Hamas could escalate, potentially involving Iran and disrupting oil supply chains from this pivotal region. These geopolitical risks are supporting crude oil prices, countering the downward pressure from increased U.S. stockpiles.

Moreover, the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, held a meeting where they decided to maintain their current oil supply policy. They urged member countries to adhere more strictly to the agreed output cuts, reaffirming their commitment to market stability.

On the economic front, Jerome Powell, the Chair of the Federal Reserve, indicated a cautious stance regarding future interest rate cuts given the resilience of the U.S. economy. An additional boost to oil demand expectations came from the positive manufacturing data out of China, the world’s largest crude importer. The combination of a recovering Chinese economy and steady global demand is providing a bulwark against a significant downturn in crude oil prices.

In this complex interplay of market dynamics, crude oil prices are navigating through geopolitical tensions, economic data, and energy policy decisions. These factors collectively influence the delicate balance of global supply and demand, which is reflected in WTI’s steady pricing above the $85 threshold. Investors and market watchers will continue to monitor these variables closely as they dictate the direction of future price movements for crude oil.

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Gold Price

Gold Price Nears Record High, Despite Strong USD as Potential Obstacle

Gold Price Nears Record High, Despite Strong USD as Potential Obstacle

The Gold price (XAU/USD) continues to experience a notable uptrend, recording gains for the sixth consecutive day on Tuesday. This steady ascent brings it tantalizingly close to the all-time high it achieved the day before. The price movement of this precious metal, traditionally viewed as a safe haven, is influenced by a mix of geopolitical and economic factors.

Recent geopolitical tensions have played a significant role in this upward trajectory. Reports of an Israeli strike near Iran’s embassy in Damascus, Syria, have escalated regional tensions. Such geopolitical unrest typically increases the appeal of gold as a safe investment during times of uncertainty. This is evident in the current market dynamics, where gold is gaining traction as a preferred asset for risk-averse investors.

On the economic front, the uncertainty surrounding the Federal Reserve’s interest rate decisions is another key driver. There are doubts about whether the Fed will implement as many as three interest rate cuts within the year, contributing to a cautious global risk sentiment. This uncertainty further bolsters the demand for gold.

However, recent upbeat US manufacturing data, released on Monday, has led investors to reconsider the likelihood of a rate cut by the Fed in June. As a result, US Treasury bond yields have remained high, supporting the strength of the US Dollar (USD). Since gold is priced in dollars, a stronger USD could potentially restrain further increases in the gold price. The dollar reached its highest level since February 14, indicating a robust performance that could act as a headwind to gold’s appreciation.

Gold bulls, or investors betting on the price increase of gold, might also exercise caution due to the current market conditions. The daily chart indicates an overstretched scenario for gold prices, suggesting the possibility of near-term consolidation. Investors are likely to adopt a wait-and-watch approach, closely monitoring upcoming US macroeconomic data and the statements from various influential members of the Federal Open Market Committee (FOMC).

Overall, while gold continues its climb towards record highs, influenced by geopolitical tensions and Fed policy speculations, the strong performance of the USD and the potential for market adjustments suggest a complex and dynamic environment for gold investors.

 

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WTI Crude Oil Prices Dip Below $68.50 Amid Stronger USD

WTI Slips to Near $81.50 Amid Fed’s Hawkish Remarks, Unexpected Rise in US Crude Inventories

WTI Slips to Near $81.50 Amid Fed’s Hawkish Remarks, Unexpected Rise in US Crude Inventories

Western Texas Intermediate (WTI), the benchmark for US crude oil, saw its prices hovering around $81.50 on Wednesday. This downward shift is attributed to the strengthening of the US Dollar (USD) and an unexpected increase in U.S. crude and gasoline stocks.

The recent hawkish remarks by US Federal Reserve (Fed) policymakers, particularly Fed Governor Christopher Waller, played a key role in bolstering the USD. Waller, known for his hawkish stance, indicated that the Fed is not poised to reduce the benchmark interest rate soon and might maintain the current rate target for an extended period. This stronger USD creates a challenging environment for WTI, as oil priced in dollars becomes more expensive for holders of other currencies, potentially reducing demand.

Compounding the pressure on WTI prices was the surprising data from the Energy Information Administration (EIA), revealing a rise in US crude oil inventories by 3.165 million barrels for the week ending March 22. This increase, contrasting with the previous week’s decline of 1.952 million barrels, added to the bearish sentiment around oil prices.

On the geopolitical front, escalating tensions in the Middle East and the ongoing conflict between Russia and Ukraine are factors that could limit the decline in WTI prices. The conflict has seen Ukraine increasingly target Russia’s oil infrastructure. With seven drone attacks reported this month, impacting approximately 12% of Russia’s total oil processing capacity, concerns over global supply tightness are heightened.

In response to these geopolitical dynamics, the Organisation of Petroleum Exporting Countries and its allies (OPEC+) have decided to maintain output cuts of about 2.2 million barrels per day (bpd) until the end of June. OPEC+ is likely to reaffirm its commitment to these production cuts at a full ministerial meeting scheduled for June.

Investors and oil traders are now turning their attention to upcoming economic indicators. The US Gross Domestic Product (GDP) for the fourth quarter is projected to remain steady at 3.2%. Furthermore, the upcoming release of the US Personal Consumption Expenditures Price Index (PCE) for February and a speech by Fed’s Chairman Powell are eagerly awaited, as they could provide further insights into the economic landscape and influence oil market dynamics.

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EUR/USD Price Forecast

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

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

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

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

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

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EUR/USD Eases Near

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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USD/JPY Holds Steady Near 147.00 as Yen Weakens on Trade Tensions and BoJ Rate Outlook

USD/JPY Holds Steady Near 147.00 as Yen Weakens on Trade Tensions and BoJ Rate Outlook

The Japanese Yen (JPY) continues to trade with a bearish bias on Wednesday, keeping the USD/JPY pair firm around the 147.00 mark during the Asian session. A stronger US Dollar and persistent concerns over rising trade tensions are weighing heavily on the Yen, as markets brace for the impact of US tariffs on Japanese goods starting August 1. 

Former US President Donald Trump’s announcement of a 25% tariff on Japanese imports, coupled with the threat of retaliatory action, has sparked renewed fears over Japan’s economic resilience. The country’s Q1 GDP contracted, real wages in May dropped at their steepest pace in nearly two years, and political uncertainty is rising ahead of the July 20 House of Councillors election. Recent polls suggest the ruling LDP-Komeito coalition may struggle to retain its majority, further dampening investor confidence. 

These developments have led traders to scale back expectations of a rate hike by the Bank of Japan this year. The combination of domestic headwinds and external pressure is weakening the JPY, while the US Dollar continues to gain on expectations that rising tariffs will stoke inflation and prompt the Federal Reserve to maintain a hawkish stance. 

The Fed’s June decision to hold interest rates steady, along with a strong US jobs report, has reinforced the belief that rate cuts may be delayed until at least October. The FOMC meeting minutes, due later today, will be closely watched for insights into the Fed’s policy trajectory. Markets currently anticipate up to 50 basis points in rate cuts by year-end. 

Technical Outlook: Bullish Momentum Builds 

Technically, USD/JPY’s break and close above the 100-day Simple Moving Average (SMA) — for the first time since February — signals potential for further gains. Positive momentum on the daily chart supports a move toward the 147.60–147.65 resistance area, with the 148.00 handle, a key June high, in sight. 

On the downside, immediate support lies near 146.50, with the 100-day SMA just below 146.00 acting as a critical pivot. A decisive break below this level could shift momentum in favor of bears, opening room for deeper losses. 

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NZD/USD gains ground to near 0.5700 on weaker US PMI data

During the early Asian session on Thursday, the NZD/USD pair was trading slightly higher at 0.5690. The Greenback falls against the New Zealand Dollar (NZD) as US economic data disappoints. Investors will keenly monitor developments in the rekindled trade battle between the United States and China, the world’s two largest economies. 

The weaker US Services Purchasing Manager Index (PMI) could weigh on the Greenback and generate a tailwind for the pair. The US ISM Services PMI fell to 52.8 in January from 54.0 (revised from 54.1) in December. This reading came in below the market consensus of 54.3.

On the other hand, New Zealand’s fourth-quarter employment report will put the RBNZ on pace to decrease the Official Cash Rate (OCR) by 50 basis points (bps) to 3.75% this month. Statistics New Zealand said on Wednesday that the country’s unemployment rate increased to 5.1% in Q4, up from 4.8% the previous quarter. This result was a four-year high and exceeded the 25-year average of 4.8%. Rising expectations that the Reserve Bank of New Zealand (RBNZ) may decrease interest rates may further impact on the New Zealand Dollar (NZD).

“In line with RBNZ guidance, markets continue to imply another 50bps rate cut to 3.75% at the February 19 meeting and the policy rate to through around 3.00% over the next 12 months. Bottom line: NZ-US 2-year bond yield spreads can further weigh on NZD/USD,” noted Société Générale’s FX analysts. 

On Tuesday, the finance ministry in China unveiled a package of tariffs on various US products such as crude oil, farm equipment, and some autos in a sharp response to an announcement made by US President Donald Trump imposing a 10% tariff on Chinese imports. Further, China served notice to several companies including Google for potential sanctions in response to Trump’s tariffs. Any sign of uncertainty or a rising trade war tension may see the China-proxy Kiwi being dragged lower, as China remains one of the major trading partners to New Zealand.

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JPY Recovers Losses vs. USD, Bullish Outlook Intact

Japanese Yen Recovers Some Losses Against USD; Bullish Outlook Remains Intact

The Japanese yen (JPY) cut some of its intraday losses against the US dollar (USD) on Monday, bringing the USD/JPY pair back below the mid-155.00s during the early European session. The Bank of Japan’s (BoJ) Summary of Opinions showed conversations about the possibility of further hikes in interest rates. Furthermore, Tokyo’s core inflation increased at the quickest annual rate in nearly a year, raising expectations of further policy tightening by the BoJ, which supports the JPY.

Beyond monetary policy, narrowing interest rate differentials between Japan and other major economies, including the US, alongside a broader risk-off sentiment, provide additional support to the safe-haven JPY. However, concerns over the economic impact of US President Donald Trump’s newly announced trade tariffs limit the yen’s upside. Meanwhile, the USD remains broadly strong, allowing the USD/JPY pair to maintain its positive momentum for a second consecutive day, ahead of the upcoming US ISM Manufacturing PMI report.

Yen Gains Traction Amid BoJ Rate Hike Bets and Trade War Fears

US President Donald Trump signed an executive order on Saturday to impose 25% tariffs on imports from Canada and Mexico and 10% tariffs on Chinese goods, effective Tuesday.

Canada’s Prime Minister Justin Trudeau, Mexico’s President Claudia Sheinbaum, and China’s foreign ministry all replied quickly, indicating probable retaliation. The US Dollar continues to climb, approaching a two-year high last hit in January, supporting the USD/JPY pair’s upward trend.

The Bank of Japan’s latest Summary of Opinions, released on Monday, showed that policymakers are thinking about additional rate hikes, though this has failed to appreciably lift the JPY.

Board members of the Bank of Japan stressed the need of continuing to raise interest rates if economic conditions and inflation remain stable.

Japan’s Finance Minister Katsunobu Kato stated that the government is closely monitoring the impact of Trump’s tariffs on the yen amid concerns over potential economic fallout.

Economy Minister Ryosei Akazawa reiterated Japan’s commitment to achieving the BoJ’s 2% inflation target while implementing measures to offset rising living costs.

The US-Japan yield spread remains near a multi-week low, which, coupled with risk aversion, could help stabilize the yen in the near term.

Investors now turn their focus to key US economic data, starting with today’s ISM Manufacturing PMI, followed by the highly anticipated Nonfarm Payrolls (NFP) report on Friday.

USD/JPY Faces Resistance Near 156.25; Bears in Control Below This Level

From a technical standpoint, last week’s strong rebound from the 50% Fibonacci retracement level of the December-January rally and the subsequent upside move favor bullish traders. However, additional gains beyond 156.00 may encounter resistance near last week’s swing high at 156.25. A sustained break above this level could spark a short-covering rally, pushing the pair towards:

  • 156.70-156.75 resistance
  • 157.00 psychological mark
  • 157.60 horizontal barrier
  • Potential extension towards 158.00, with an ultimate target at the 158.85-158.90 multi-month high from January 10

Conversely, on the downside:-

  • 155.00 serves as immediate support
  • Below this, watch for key levels at 154.55-154.50 and 154.00
  • A break below the 153.70 January low could accelerate the decline towards 153.30 and eventually 153.00

While the JPY is exhibiting some resilience, the overall trend remains unpredictable, with market participants intently watching economic indicators and geopolitical developments.

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Australian Dollar Drops as RBA Rate Cut Bets Rise, Fed Decision Looms

Australian Dollar Slides Amid Rising Odds of RBA Rate Cuts, Fed Decision in Focus

The Australian Dollar (AUD) extends its losing streak for a third consecutive session against the US Dollar (USD), weighed down by softer-than-expected inflation data from Australia.

Australia’s Consumer Price Index (CPI) rose by 0.2% quarter-on-quarter in Q4 2024, matching the previous quarter but missing the expected 0.3%. On an annual basis, CPI eased to 2.4% from 2.8% in Q3, below the market forecast of 2.5%. Despite December’s monthly CPI ticking up to 2.5% YoY, inflation remains within the Reserve Bank of Australia’s (RBA) 2%-3% target range. Meanwhile, the RBA’s Trimmed Mean CPI slowed to 3.2% YoY, its weakest pace in three years, slightly under the anticipated 3.3%.

Australian Treasurer Jim Chalmers expressed confidence that “the worst of the inflation challenge is behind us” and that a “soft landing” is increasingly likely. The cooling inflation strengthens the case for an RBA rate cut in February. The central bank has held the Official Cash Rate (OCR) steady at 4.35% since November 2023, emphasizing the need for inflation to “sustainably” return to target before considering a rate reduction.

AUD Pressured by Risk Aversion, Trump’s Tariff Threats

The AUD faces additional headwinds from risk-off sentiment following tariff threats by former US President Donald Trump. On Monday, Trump announced plans to impose tariffs on imports of key commodities, including computer chips, pharmaceuticals, steel, aluminum, and copper, aiming to boost US manufacturing.

Meanwhile, the US Dollar Index (DXY) holds firm around 108.00 as traders turn their attention to the upcoming Federal Reserve (Fed) interest rate decision. Market expectations, per the CME FedWatch tool, indicate near-certainty that the Fed will maintain its policy rate at 4.25%-4.50%. Investors will closely watch Fed Chair Jerome Powell’s press conference for guidance on future policy shifts.

Concerns over the potential inflationary impact of Trump’s trade policies add another layer of uncertainty. US Bank chief economist Beth Ann Bovino noted, “A number of White House proposals appear inflationary, which could keep the Fed in check.” Additionally, Treasury Secretary Scott Bessent has proposed universal tariffs on US imports starting at 2.5%, with Trump reportedly favoring even higher rates.

China’s Economic Slowdown Adds Pressure on AUD

The Australian Dollar remains vulnerable to China’s economic struggles. China’s NBS Manufacturing PMI dropped to 49.1 in January from 50.1, missing expectations, while the Non-Manufacturing PMI slipped to 50.2 from 52.2. As Australia’s largest trading partner, China’s weak data weighs heavily on the AUD.

Despite China’s recent stimulus measures, including a $7.25 billion investment in index products and long-term stock investments, concerns persist. Industrial profits fell 3.3% YoY in 2024, marking a third consecutive year of contraction, driven by weak demand, deflationary pressures, and a prolonged property sector slump.

Technical Outlook: AUD/USD Turns Bearish Below 0.6250

The AUD/USD pair trades near 0.6230 on Wednesday after breaking below the ascending channel on the daily chart, signaling a shift toward a bearish bias. The 14-day Relative Strength Index (RSI) has dropped below 50, reinforcing downside momentum.

A decisive break below key support at the lower boundary of the ascending channel strengthens the bearish outlook, potentially pushing AUD/USD toward 0.6131—its lowest level since April 2020. On the upside, immediate resistance lies at the nine-day Exponential Moving Average (EMA) at 0.6256. A rebound above this level could reintroduce a bullish bias, with the next upside target near 0.6360.

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US Dollar Surges as Trump Revives Tariff Threats

US Dollar Surges as Trump Revives Tariff Threats

The US dollar strengthened significantly against all major currencies after President Donald Trump and his Treasury Secretary reignited concerns about potential tariffs, raising fears that trade policies may return to the forefront. Risk-sensitive currencies, particularly those tied to China, saw sharp declines, while the euro weakened amid speculation that the European Union could soon face tariff pressures. Simultaneously, the Japanese yen took a hit as traders hedged against potential US inflation spikes and rising Treasury yields.

This market turbulence followed a Financial Times report indicating that Scott Bessent, the newly appointed Treasury Department official, supports a phased approach to implementing universal tariffs on US imports. The initial proposal suggests starting with a 2.5% tariff rate. However, President Trump hinted at a much broader scope, potentially targeting a range of imports from steel to semiconductor chips and suggesting higher tariff rates over time.

The administration’s “moderate” proposal involves a gradual increase in tariffs, reaching 20% over eight months in increments of 2.5% per month. This timeline has triggered speculation about more extreme scenarios and raised questions about the global trade concessions needed to halt these measures. Bessent’s approach, which allows businesses time to adjust, could also spark a rush of imports and exports to avoid higher future costs.

Amid these developments, financial markets are grappling with the potential outcomes. Traders are assessing whether the proposed tariff measures are fully priced in and evaluating the likelihood of de-escalation through negotiation.

On the positive side, any concessions or agreements that delay or reduce tariffs could stabilize markets. However, the risks of escalating tariffs, particularly if negotiations fail, remain a significant concern. Higher tariffs could disrupt global trade and have far-reaching implications for currency valuations.

While we initially favored long positions on the dollar, the unfolding tariff narrative has introduced significant uncertainty. Staying prepared for sudden shifts in policy and market dynamics is now crucial as the situation continues to evolve.

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Australian Dollar Weakens Amid Concerns Over Trump’s Trade Policies and Mixed Chinese Data

Australian Dollar Weakens Amid Concerns Over Trump’s Trade Policies and Mixed Chinese Data

The Australian Dollar (AUD) ended its three-day winning streak against the US Dollar (USD) on Monday, with the AUD/USD pair trading flat following the release of mixed Chinese Purchasing Managers’ Index (PMI) data. As a close trade partner, Australia’s economy is heavily influenced by China’s economic performance.

China’s National Bureau of Statistics (NBS) reported that the Manufacturing PMI fell to 49.1 in January, down from 50.1 in December, missing market expectations. Similarly, the Non-Manufacturing PMI dropped to 50.2 from the previous month’s 52.2. These weaker-than-expected figures suggest a slowdown in China’s economic recovery, weighing on the risk-sensitive Australian Dollar.

Despite fresh stimulus measures from China aimed at revitalizing its equity markets, the AUD struggled to gain momentum. The China Securities Regulatory Commission (CSRC) announced a second round of long-term stock investment pilot programs valued at 52 billion Yuan ($7.25 billion). However, these measures have done little to alleviate investor concerns about China’s economic challenges.

Risk Aversion Rises Amid Trump’s Trade Tariff Push

Broader market sentiment took a hit as reports emerged that US President Donald Trump’s advisers are pushing to impose 25% tariffs on Mexico and Canada as early as February 1, bypassing negotiations. According to the Wall Street Journal, Trump’s willingness to move swiftly on tariffs follows similar actions taken against Colombia, raising fears of escalating trade tensions and dampening demand for riskier assets like the Australian Dollar.

Adding to the negative outlook, China’s Industrial Profits declined by 3.3% year-over-year in 2024 to CNY 7,431.05 billion, marking the third consecutive year of contraction. This downturn highlights ongoing economic headwinds, including weak demand, rising deflationary pressures, and a prolonged slump in the property sector.

Technical Analysis: AUD/USD Eyes Key Resistance Amid Bullish Setup

The AUD/USD pair is trading near 0.6290 on Monday, showing signs of upward momentum within an ascending channel on the daily chart, indicating a potential bullish bias. The 14-day Relative Strength Index (RSI) remains slightly above 50, reflecting mild optimism in the market.

On the upside, the pair could retest the psychological resistance level at 0.6300, with the next target near the channel’s upper boundary around 0.6350.

Support levels are found at the nine-day Exponential Moving Average (EMA) of 0.6265, followed by the 14-day EMA at 0.6254. A stronger support lies near the channel’s lower boundary around 0.6240, which could act as a safety net in case of a downside correction.

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NZD/USD Struggles

NZD/USD Struggles Below 0.5700 Amid Trump’s Tariff Plans and Dovish RBNZ Expectations

The NZD/USD pair remains under pressure, trading near 0.5675 during the early Asian session on Friday. The New Zealand Dollar (NZD) faces headwinds due to uncertainty surrounding US President Donald Trump’s proposed tariffs on China and the dovish outlook of the Reserve Bank of New Zealand (RBNZ).

New Zealand’s Consumer Price Index (CPI) for the fourth quarter of 2024 indicated a continued decline in underlying inflation, strengthening expectations of additional rate cuts by the RBNZ. Swap markets now estimate a nearly 90% chance of a 50-basis-point (bps) rate cut on February 19, building on the two cuts already implemented in this cycle. The RBNZ is projected to deliver a total of 100 bps in rate cuts through the remainder of 2025.

Meanwhile, the downside for the pair could be capped by recent comments from Trump. Speaking at the World Economic Forum in Davos on Thursday, Trump called for immediate interest rate cuts by the US Federal Reserve (Fed). “With oil prices going down, I’ll demand that interest rates drop immediately, and likewise, they should be dropping all over the world,” Trump said.

Investors are now closely watching for further details on Trump’s tariff policies, alongside key US economic data releases. The flash US S&P Global Manufacturing and Services PMI for January will be a key focus later on Friday, along with the release of US Existing Home Sales and the Michigan Consumer Sentiment Index.

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US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

The dollar strengthened on Tuesday, driven by rising U.S. yields, putting pressure on low-yielding currencies like China’s yuan and Japan’s yen, which fell to its lowest level since 1986.

Benchmark 10-year Treasury yields increased nearly 14 basis points to 4.479% overnight. Analysts attributed this rise to expectations of Donald Trump winning the U.S. presidency, which could lead to higher tariffs and increased government borrowing.

As the dollar gained, the euro reversed part of a small rally following the first round of France’s election, which aligned with polling predictions. The euro last traded at $1.0735.

The yen dropped to 161.72 per dollar on Monday, its weakest in nearly 38 years, primarily due to the significant interest rate gap between the U.S. and Japan. On Tuesday, the yen traded at 161.55 per dollar in Asia and was under pressure from yen bears wary of potential intervention by Japanese authorities. The yen also hit a lifetime low of 173.67 against the euro on Monday and remained near that level on Tuesday.

In the bond market, the 10-year yield gap between U.S. and Japanese rates stood at 340 basis points, and nearly 440 basis points at the two-year tenor. China’s yuan, which reached a seven-month low against the dollar last week, faced similar pressure, with U.S. 10-year yields more than 220 basis points higher than Chinese government bond yields.

Robust manufacturing data in China and an announcement from the central bank about borrowing bonds, likely to sell them and stabilize falling yields, provided only a brief boost to the currency on Monday. The yuan last traded at 7.3043 in offshore markets on Tuesday, close to its June low.

The New Zealand dollar slipped 0.3% in early trade and was testing support at its 200-day moving average at $0.6075. The British pound remained steady at $1.2641. The Australian dollar hovered within its recent range at $0.6650, with traders focused on central bank minutes to gauge the likelihood of future interest rate hikes. Swaps market pricing suggests a one-in-three chance of a rate hike as soon as next month.

The question remains about the trigger for such a move. ING economist Rob Carnell noted that discussions have taken place, but the specific trigger for a hike is still uncertain. There is a leaning towards forecasting a hike at the August meeting.

Overall, the strengthening dollar and rising U.S. yields continue to exert pressure on low-yielding currencies, with markets closely watching upcoming central bank decisions and geopolitical developments.

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Cryptocurrency Move Back to Support the Pack to Level

If we have a look at the bearish start to the day in the majors and the Bitcoin move back to the level by $18,500 to the support pack. The Bitcoin to USD was seemed down at the level by 1.16% on this Thursday that reversing a 1.25% gain to the Wednesday to the ended the day at the level $18,260.0. At the start of the day, the Bitcoin rose to the early morning intraday to the high at the level before hitting the reverse level.

The major resistance level goes at the level by $18,878 and the Bitcoin fell to the intraday low to the level by $17,935.0.

The close term bullish pattern stayed flawless, disregarding the most recent pullback to sub-$18,000 levels. For the bears, Bitcoin would have to slide through the 62% FIB of $10,095 to shape a close term bearish pattern.

The Bitcoin was somewhere near at the level by 1.03% to $18,072.0. A blended beginning to the day saw Bitcoin ascend to an early morning high of $18,299.0 prior to tumbling to a low of $18,070.0.

Bitcoin left the significant help and obstruction levels untested from the get-go.

Somewhere else, it was a bearish beginning to the day for the majors. The Ripple’s XRP was somewhere around at the level 2.69% to lead the route down.

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Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

The Bitcoin seems to the low at the level of $9,813 in September that managed the bitcoin to reach at the level high at $13,868. The bitcoin price is rejected to the sequential indicators on the 3-day chart.

If we have a look at the current candlestick of the 3-day chart it will seem significantly bearish and the TD sequential indicators are presented a sell signal. The 50- SMA seems down at the level of $10,600 and the 100 SMA at the level of $9,47.

The In/Out of the Money Around Price chart shows the closest and most grounded help region to be somewhere in the range of the level at $12,687 and $13,073 with near 624,000 BTC in volume. A break below this point can drive the cost of Bitcoin down to $11,914.

Despite the fact that bears appear to have assumed responsibility for the present moment, the powerful day by day upswing stays unblemished for Bitcoin. The 50-SMA and the 100-SMA harmonize around $11,200 which will go about as a critical help level. The MACD keeps bullish and the most basic obstruction level is still at $13,863. A breakout over this point can without much of a range drive the lead digital currency towards the untouched high at the level of $20,000.

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Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price of the bulls has been the full control of the market to the price at the level of $11,340 to $12,835. The cryptocurrency had the largest to the single day that put the gain. The MACD shows the increasing the bullish momentum to price the growth anticipated.

The position detector is a convenient little apparatus that causes us to imagine solid opposition and backing levels. According to the everyday conjunction detector, there is an absence of solid obstruction levels on the potential gain. This should be empowering news for the buyers as they plan to bring BTC into the $13,000-zone.

Santiment’s holder’s distribution charts show you the number of addresses having a place with a specific symbolic section. According to the chart, the number of addresses holding 10,000-100,000 tokens tumbled from 111 on October 8 to 104 on October 20. This is an intensely bearish sign as it shows that the whales are selling off their property.

Bitcoin buyers have the opportunity to bring the cost into the level at $13,000 and even the $14,000 interference. The everyday intersection finder shows a total absence of solid opposition barriers straightforward.

For the bears, the drawback is covered off at the $12,000-$12,100 uphold divider. A break below that zone will bring the value down to $11,000, which has both the 50-day and 100-day SMA

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Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

The BTC/USD traded at the level of $11,355 after the mild rejection of the top-level $11,720 that losing some of the bullish.

Ethereum USD had a similar fate at the higher risk that seeing the longer pullback than the Bitcoin. If we talk about the XRP/USD is the clear loser after breaking below the 50 SMA and the 100 SMA on the daily chart that currently trading at the level of $0.2482 after yet facing another rejection.

Bitcoin, BTC to USD, fell by 1.02% on Tuesday. Incompletely turning around a 1.55% increase from Monday, Bitcoin finished the day at the level of $11,442.0.

It was a quiet beginning to the day. Bitcoin rose to a late morning intraday high to the level of $11,574.9 before operating reverse.

Missing the mark concerning the primary significant obstruction level at $11,830, Bitcoin tumbled to an early evening intraday low of $11,333.0.

Avoiding the primary significant help level at $11,201 Bitcoin quickly returned to $11,470 levels before moving back.

The close term bullish pattern stayed perfect, upheld by the most recent move back through to $11,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to shape a close term bearish pattern.

Bitcoin was up by 0.22% to $11,467.0. A beginning to the day saw Bitcoin tumble to an early morning low of $11,427.0 before ascending to a high at the level of $11,467.0. Bitcoin left the support and Resistance levels untested at an early stage.

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Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Let’s have a look at the cryptocurrency that hovering near to the level at $10,600 mark. The Bitcoin price is consolidating to the 50-12 Hour SMA and the 200-12 Hours SMA. The strong resistance lies at the level 50-12 SMA that repeatedly rejected the price.

This repeated dismissal may drop the value down to the level at  $10,400 uphold level, which is by all accounts the main observable help level on the drawback. If case this level doesn’t hold firm, at that point you can anticipate that the cost should plunge below $10,000. For this situation, one can anticipate that BTC should tumble to the level of $9,700 before it experiences another solid help.

While this may not appear to be a huge number, remember that every one of these addresses holds a great many dollars worth of Bitcoin. The fishes using the stale value activity to merge their positions look good for the general market.

With respect to the top 50 digital forms of money, the greatest failures incorporate Compound, down 12% over the most recent 24 hours, UMA down 12%, OMG Network down at the level 13%, Yearn.finance down 16%, and Aave down 18%. The main bull among the sloths of bears is EOS, which broke out greatly as covered Tuesday.

Ethereum has since September 23, been holding inside a rising equal channel. Recuperation towards $400 flamed out marginally above $360 a week ago. On the drawback, the misfortunes that followed grasped uphold at the level of $335 throughout the end of the week, permitting the shrewd agreement sign to revitalize, making strides above $350.

The Ethereum selling pressure in the market halted the increase at the 50 SMA and 100 SMA. Ether fell below the climbing channel, confirming a bear banner.

The downside of a significant help zone shows that Ethereum is at grave risk of spiraling to the level at $300. Other than the various simple help zones, the most significant one lies somewhere in the range of $298 and $309. Previously, around 879,000 locations purchased almost 2 million ETH.

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Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

The Bitcoin moves back and shows the bearish to the start of the day with the support level at $10,900 to the broader market.

The Bitcoin BTC to USD is rose by the level at 1.33% this Tuesday and reversing the loss at the level of 0.83% on Monday.

It was a mixed start to the day. Bitcoin fell to an early morning low $10,674.2 before finding support.

Steering clear of the major support levels, Bitcoin struck a late morning high at the level of $10,815.4 before operating reverse.

Coming up short of the major resistance levels, Bitcoin slid to a late afternoon intraday low $10,654.0.

Steering clear of the first major support level at $10,585, Bitcoin rallied to a final hour intraday high at the level of $10,889.0.

Falling short of the first major resistance level at $10,915, Bitcoin eased back to end the day at sub-$10,860 levels.

The near-term bullish trend remained whole, in contempt of the latest pullback. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to form a near-term bearish trend. At the hour of composing, Bitcoin was somewhere around 0.28% to the level of $10,826.0. It was a blended beginning to the day. Bitcoin rose to an early morning high $10,866.0 before tumbling to a low $10,826.0.

Bitcoin started the significant help and obstruction levels untested from the get-go. Somewhere else, it was a blended beginning to the day.

Bitcoin Cash ABC (+0.54%), Bitcoin Cash SV to the level (+0.62%), and Crypto.com Coin (+0.65%) evaded the pattern right off the bat.

It was a bearish beginning to the day for the remainder of the majors, in any case. Binance Coin was somewhere around 1.18% to lead the way down.

https://xtreamforex.com/nasdaq-futures-shows-the-short/

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