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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Technical Outlook: USD/JPY Approaching Key Levels

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

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

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

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

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

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

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

Market Sentiment: Yen Traders Hesitate Amid Mixed Signals

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

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

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

Technical Outlook: USD/JPY Positive Bias Holds Above 148.00

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

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

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

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

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

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

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

Key Market Drivers: Gold Holds Steady Ahead of US PPI

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

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

Technical Outlook: Gold Poised for Further Gains

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

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

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

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

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

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

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

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

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

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

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

Safe-Haven Demand Supports Gold Amid Geopolitical Risks

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

Technical Outlook: Bearish Bias with Limited Upside

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

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

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

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

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

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

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

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

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

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

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

Technical Analysis: NZD/USD Faces Downward Pressure

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

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

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

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Australian Dollar Slips as China Holds Back on Major Stimulus Measures

Australian Dollar Slips as China Holds Back on Major Stimulus Measures

Australian Dollar Slips as China Holds Back on Major Stimulus Measures

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

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

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

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

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

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

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

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

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

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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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Gold Price Recovers Some Losses

Gold Price Recovers Some Losses, Still Below Key 50-Day SMA Resistance

Gold Price Recovers Some Losses, Still Below Key 50-Day SMA Resistance

During Tuesday’s Asian trading session, gold prices (XAU/USD) experienced some buying, partially offsetting Monday’s modest losses. This revival is driven by U.S. macroeconomic data that suggest easing inflation pressures, heightening anticipation of a potential Federal Reserve rate cut in September. These developments provide some support for gold, which does not yield income but often gains when yield-bearing assets like bonds are less attractive. Nonetheless, the metal continues to operate within a familiar range from the past week and remains below the crucial 50-day Simple Moving Average (SMA), signaling that bullish traders should remain cautious.

Recently, the Federal Reserve adopted a hawkish stance, predicting only one interest rate cut this year. This position has been reinforced by multiple Federal Open Market Committee (FOMC) members, maintaining high U.S. Treasury bond yields. These conditions bolster the U.S. Dollar (USD), which, in turn, could limit any significant upward movement in gold prices. Investors and traders are encouraged to await sustained buying before determining that the recent corrective downturn from the record highs in May is concluding and before preparing for potential further gains.

The outlook for gold is tethered not only to U.S. economic indicators and Federal Reserve policies but also to broader global economic dynamics. With inflationary pressures showing signs of subsiding, there could be less impetus for the Fed to maintain higher interest rates, traditionally a scenario that favors gold. However, the complexities of global finance, including ongoing international tensions and economic recoveries, continue to play a significant role in shaping market sentiment and the subsequent demand for safe-haven assets like gold.

Moving forward, market participants will likely monitor upcoming U.S. economic reports and statements from FOMC members closely. These insights will help gauge the strength of the dollar and the trajectory of interest rates, which are pivotal in determining the direction of gold prices. As such, the immediate future of gold trading appears to hinge on a delicate balance of economic indicators, monetary policy expectations, and global market sentiment.

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Gold Price Stays Low Amid Rate Concerns

Gold Price Stays Low Amid Rate Concerns, Rising US Dollar Demand

Gold Price Stays Low Amid Rate Concerns, Rising US Dollar Demand

During early trading in Europe on Tuesday, the gold price (XAU/USD) faced renewed selling pressure, diminishing some of the modest recovery gains it had made from the previous day. These gains had lifted the price from a low of $2,287—the lowest in over a month—sparked by optimistic US employment data. This development has led investors to reconsider their expectations for an impending interest rate cut by the Federal Reserve (Fed) in September, resulting in sustained high US Treasury bond yields and a robust US Dollar (USD). The dollar reached a multi-week high on Monday, which continues to dampen the demand for gold.

Additionally, the People’s Bank of China (PBoC) made a significant shift by sharply curtailing its gold purchasing activities in May. This decision marked the end of an extensive one-and-a-half-year period of consistent buying, diverting investment flows away from gold. Despite these pressures, gold prices are finding some support against deeper losses due to ongoing political uncertainty in Europe and persistent geopolitical risks. These factors are causing traders to adopt a cautious stance, preferring to wait for further economic indicators.

Key upcoming events that traders are watching include the release of the latest US consumer inflation figures and the Federal Open Market Committee (FOMC) decision, both due on Wednesday. These events are highly anticipated as they could provide clearer signals about the Fed’s plans regarding rate cuts. The outcome of these developments will be crucial in shaping the short-term direction of gold prices.

Gold, as a non-yielding asset, typically finds it challenging to compete with yield-bearing investments when interest rates are high. The current strength of the US dollar, fueled by high treasury yields and the Fed’s monetary policy stance, continues to exert downward pressure on gold prices. However, the precious metal’s status as a safe-haven asset amid financial and geopolitical instability could help mitigate some of the negative impacts from these economic factors.

Investors and traders are therefore closely monitoring these economic indicators and central bank decisions, which will play a pivotal role in determining the near-term pricing and investment attractiveness of gold in the current economic landscape.

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Gold Prices Hit Two-Week High as Buyers

Gold Prices Hit Two-Week High as Buyers Bet on Fed Rate Cut

Gold Prices Hit Two-Week High as Buyers Bet on Fed Rate Cut

Gold prices (XAU/USD) have seen consistent buying interest for the second consecutive day, reaching a two-week peak around the $2,373 mark during the early European trading session on Thursday. The momentum is distinctly bullish, fueled by expectations that major central banks worldwide might reduce borrowing costs to stimulate economic growth.

This bullish sentiment was reinforced when the Bank of Canada (BoC), on Wednesday, reduced its benchmark interest rate for the first time in four years from a more than two-decade high, expressing concerns over a decelerating economy. Additionally, the European Central Bank (ECB) is anticipated to lower its interest rates for the first time since March 2016 at its policy meeting conclusion later today.

On another front, market participants are increasingly betting on a potential rate cut by the Federal Reserve (Fed) in response to signs of a cooling U.S. economy. These expectations have kept U.S. Treasury bond yields at their lowest in over two months, which has undermined any attempts by the U.S. Dollar (USD) to capitalize on its modest recovery gains observed over the previous two days. Moreover, ongoing geopolitical tensions, particularly in the Middle East, continue to support the appeal of gold as a safe-haven asset.

Despite these favorable conditions, the upside potential for gold prices appears somewhat capped. Investors remain cautious, with many holding their positions in anticipation of the U.S. Nonfarm Payrolls (NFP) report due on Friday. This key economic indicator could provide significant insights into the health of the U.S. labor market and influence the Fed’s monetary policy decisions moving forward.

Overall, the global economic landscape, characterized by potential rate cuts from major central banks and ongoing geopolitical uncertainties, forms a supportive backdrop for gold. However, the near-term trajectory of gold prices will likely be influenced by upcoming economic data releases and policy announcements, which are keenly awaited by traders and investors alike to gauge the next significant move in the precious metals market.

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WTI Falls Below $74 Amid OPEC+ Plans

WTI Falls Below $74 Amid OPEC+ Plans to Reduce Production Cuts

WTI Falls Below $74 Amid OPEC+ Plans to Reduce Production Cuts

West Texas Intermediate (WTI) oil prices continued their downward trend for the fifth consecutive day, trading at approximately $73.90 per barrel during the Asian trading session on Tuesday. This recent decline in crude oil prices stems from the Organization of the Petroleum Exporting Countries and their allies, including Russia, collectively known as OPEC+, announcing a plan to gradually ease oil production cuts.

OPEC+ has scheduled a phased rollback of their voluntary production cuts totaling 2.2 million barrels per day (bpd), beginning in October. By December, it is anticipated that over 500,000 bpd will re-enter the market, culminating in a total of 1.8 million bpd by June 2025. This move is aimed at stabilizing the oil market which has experienced significant fluctuations.

In a related development, the United States has announced the purchase of an additional 3 million barrels of oil for the country’s Strategic Petroleum Reserve (SPR). This decision, made by the Department of Energy, is part of a broader effort to gradually replenish the reserve following its largest-ever depletion in 2022. Last year, under directives from President Joe Biden, 180 million barrels were released over six months to help manage fuel prices in the aftermath of Russia’s invasion of Ukraine, which had spiked global oil prices.

Additionally, recent U.S. economic data revealed some easing in price pressures. The latest Personal Consumption Expenditure (PCE) data for April showed a softening in inflation, although this did not prompt an immediate rate cut from the Federal Reserve (Fed). The Fed’s hesitation suggests that more time may be needed to meet its inflation targets. Concurrently, the persistently high interest rates are casting a shadow over the U.S. economic outlook, curbing oil demand as higher borrowing costs weigh on economic activities.

Overall, these developments reflect a complex interplay between global oil supply adjustments by OPEC+, strategic reserve policies of the U.S., and broader economic conditions, all of which are contributing to the current trends in oil market dynamics.

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WTI Crude Oil Prices Dip Below $68.50 Amid Stronger USD

WTI Nears $79 as Key US Economic Data Looms

WTI Nears $79 as Key US Economic Data Looms

In the Asian trading session on Thursday, West Texas Intermediate (WTI) crude oil fell slightly to around $79.00 per barrel. Traders are closely monitoring upcoming economic reports, including today’s US Crude Oil Stocks Change report from the Energy Information Administration. Expectations are set for a drawdown of 1.9 million barrels for the week ending May 24, contrasting with the previous addition of 1.825 million barrels. Additionally, the API Weekly Crude Oil Stock last week reported a significant decrease of 6.49 million barrels, following a 2.48 million barrel increase the week before.

Attention is also focused on the upcoming June 2 meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, known as OPEC+. The meeting is critical as members will consider extending voluntary output cuts of 2.2 million barrels per day into the second half of 2024. It is widely anticipated that the group will agree to maintain these supply reductions.

Further influencing the oil market are comments from Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, which have stirred concerns about further interest rate hikes. Kashkari noted the possibility of rate increases, casting doubt on the progress of disinflation. Such hawkish monetary policy stances tend to negatively impact the economic outlook and, consequently, depress oil prices.

Additionally, the US dollar has strengthened on the back of rising Treasury yields, fueled by investor risk aversion ahead of significant economic data releases. The forthcoming US Gross Domestic Product Annualized data for Q1 and the Core Personal Consumption Expenditures (PCE) Price Index data set for release on Friday are critical. A stronger dollar makes oil more expensive for holders of other currencies, potentially curbing demand.

These elements combined paint a complex picture for WTI prices, as market participants weigh supply dynamics against broader economic indicators and monetary policy developments.

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WTI Crude Oil Holds Modest Losses Above $70, Bearish Bias Persists

WTI Nears $78.50 as US Inflation Data, OPEC+ Meeting Loom

WTI Nears $78.50 as US Inflation Data, OPEC+ Meeting Loom

West Texas Intermediate (WTI) crude oil prices edged higher as traders anticipate the upcoming meeting of the Organization of the Petroleum Exporting Countries and allies, including Russia (OPEC+), scheduled for June 2. The meeting will address whether to extend the current voluntary output cuts of 2.2 million barrels per day into the second half of 2024. WTI was trading around $78.70 per barrel during Tuesday’s Asian trading session.

The rise in oil prices is also fueled by increased geopolitical tensions in the Middle East. Over the weekend, an Israeli airstrike in Rafah, Gaza, reportedly caused a significant fire, resulting in 45 casualties. This incident has intensified international reactions and added a geopolitical risk premium to oil prices. Additionally, the reported death of an Egyptian soldier in related strikes has further contributed to the risk concerns impacting oil markets.

Market focus is also on the US economic indicators, with traders awaiting the release of the Personal Consumption Expenditures (PCE) Price Index data on Friday. This inflation measure is closely watched by the Federal Reserve to guide its monetary policy decisions. Recent comments from Fed officials suggest a cautious approach to interest rate cuts, emphasizing the need for more substantial evidence of inflation trending towards the 2% annual target. Persistently high interest rates could dampen the US economic outlook and curtail oil demand.

Furthermore, developments in Iran could influence oil supply dynamics. According to reports from Iran’s Tasnim news agency, an economic council led by Iran’s interim president Mohammad Mokhber has approved a plan to boost the country’s oil production from 3.6 million barrels per day to 4 million barrels per day.

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Gold Price

Gold Prices Fall Further Due to Fed’s Hawkish Outlook

Gold Prices Fall Further Due to Fed’s Hawkish Outlook

On Wednesday, gold prices faced downward pressure as sellers stepped in, influenced by the latest Federal Open Market Committee (FOMC) minutes, which were perceived as markedly more hawkish than earlier communications. This interpretation suggests that the U.S. Federal Reserve may maintain its tight monetary policy stance for a prolonged period. The anticipation of continued restrictive policies bolstered the U.S. dollar, which in turn placed significant selling pressure on gold.

The price trajectory of gold in the coming days could hinge on several key economic indicators and events. Market participants are particularly keen on the upcoming preliminary readings of the U.S. Manufacturing and Services Purchasing Managers’ Index (PMI) for May. Should these indicators come in weaker than expected, they could fuel speculation that the Federal Reserve might ease up on interest rates, potentially providing a lift to gold prices.

Moreover, ongoing geopolitical tensions and persistent uncertainties are likely to continue supporting the precious metal by limiting its downside. Despite the pressures from a stronger dollar, factors such as unresolved geopolitical conflicts and sustained high inflation are elements that traditionally drive investors towards the safety of gold.

In addition to the PMI data, several other important economic reports and events are on the horizon, which could influence gold prices. These include the Chicago Fed National Activity Index, weekly Initial Jobless Claims, and New Home Sales data. Additionally, comments from the Federal Reserve’s officials, particularly from Fed’s Bostic, will be closely watched for further insights into the central bank’s future policy direction.

Investors and traders in gold will need to navigate a complex landscape of economic data and Fed communications in the short term. While the hawkish stance of the Federal Reserve poses challenges, the underlying economic uncertainties and the traditional role of gold as a safe-haven asset may provide some support to its prices. As such, the balance of these dynamics will be crucial in determining the near-term movements in the gold market.

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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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