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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Pound Sterling Holds Steady

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

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

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

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

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

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

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

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

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

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

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

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

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

Technical Outlook: Pound Sterling Sideways Near 1.3400

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

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

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

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

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

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

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

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

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

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

Market Movers: AUD Boosted by RBA’s Hawkish Stance

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

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

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

Technical Analysis: AUD/USD Shows Bullish Momentum

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

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Japanese Yen Drops as No Candidate Secures Majority

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

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

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

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

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

Market Movers: Japanese Yen Declines Amid Uncertainty Over BoJ Policy

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

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

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

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

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

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

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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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WTI Crude Oil Climbs to $73.50 as Middle-East Tensions Raise Supply Disruption Fears

WTI Crude Oil Rises to $73.50 Amid Middle-East Tensions and Potential Supply Disruption

WTI Crude Oil Rises to $73.50 Amid Middle-East Tensions and Potential Supply Disruption

West Texas Intermediate (WTI) crude oil continues its upward trend for the fourth consecutive day, trading near $73.50 per barrel during Friday’s Asian session. The rise in oil prices is primarily driven by escalating geopolitical tensions in the Middle East, raising concerns about potential disruptions in oil supply from a region that accounts for approximately one-third of global crude production.

US President Joe Biden revealed that the US is in discussions with Israel regarding possible strikes on Iran’s oil infrastructure, as tensions mount following Iran’s missile attack on Israel earlier in the week. Israeli Prime Minister Benjamin Netanyahu warned that Iran would face severe repercussions for its actions, which included firing over 180 ballistic missiles at Israel, according to a BBC report.

Despite the growing risks, OPEC+—a group that includes the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia and Kazakhstan—has significant spare capacity to offset a potential loss of Iranian supply. However, if Iran retaliates by targeting the oil facilities of its Gulf neighbors, it could present significant challenges to global supply.

OPEC+ has been reducing oil output in recent years to support prices amid sluggish global demand. Currently, the group’s production cuts amount to 5.86 million barrels per day (bpd). Analysts estimate that Saudi Arabia has the capacity to increase production by 3 million bpd, while the United Arab Emirates (UAE) could boost output by 1.4 million bpd if necessary.

In a separate development, Libya’s National Oil Corporation and its eastern-based government announced on Thursday the reopening of oil fields and export terminals, ending a leadership dispute that had severely curtailed the country’s oil production. According to Reuters, this resolution is expected to restore a significant portion of Libya’s crude supply to the global market.

 

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WTI Jumps Above $70 Amid Fears of Oil Supply Disruptions After Iran Missile Strike on Israel

WTI Surges Above $70 as Iran Missile Strike on Israel Sparks Fears in Global Oil Markets

WTI Surges Above $70 as Iran Missile Strike on Israel Sparks Fears in Global Oil Markets

West Texas Intermediate (WTI), the US crude oil benchmark, climbed to around $70.65 on Wednesday. The surge comes after Iran launched missiles at Israel, raising concerns about potential disruptions in oil supply from the region.

Iran fired over 200 ballistic missiles at Israel, prompting Israeli Prime Minister Benjamin Netanyahu to vow retaliation. Tehran warned that any counterattack would lead to “vast destruction,” stoking fears of a broader conflict. Israel has also hinted at the possibility of striking Iranian oil facilities, which could escalate into a regional war, further heightening concerns about supply disruptions in the global oil market.
Meanwhile, US crude oil inventories fell less than expected last week. According to the American Petroleum Institute (API), crude stockpiles in the US declined by 1.5 million barrels for the week ending September 27, compared to the prior week’s 4.339 million barrel drop. Market expectations were for a decrease of 2.1 million barrels.

On the downside, recent comments from Federal Reserve (Fed) Chair Jerome Powell, who pushed back against calls for a significant rate cut in November, could weigh on WTI prices. Powell acknowledged that more rate cuts are likely, given the economy’s solid footing, but he cautioned against making drastic adjustments too quickly.

Traders are closely watching speeches from several Federal Reserve officials, including Thomas Barkin, Raphael Bostic, Beth Hammack, Alberto Musalem, and Michelle Bowman, for further market guidance. Any hawkish signals from the Fed could pressure WTI prices. It’s also important to note that lower interest rates reduce borrowing costs, which typically boosts oil demand.

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WTI Holds Near $69.00 Amid Rising Middle East Supply Fears

WTI Holds Near $69.00 Amid Rising Middle East Supply Fears

WTI Holds Near $69.00 Amid Rising Middle East Supply Fears

West Texas Intermediate (WTI) crude holds steady around $69.20 per barrel during Monday’s Asian session, driven by rising concerns over potential supply disruptions stemming from escalating conflict in the Middle East. Heightened geopolitical tensions, particularly Israel’s intensified attacks on Iranian-backed groups like Hezbollah and the Houthis, have sparked fears of instability, which could push oil prices higher.

ANZ Research, as reported by Reuters, noted that the increasing likelihood of Iran’s involvement in the conflict is contributing to concerns, as Iran is a major oil producer and OPEC member. Over the weekend, Israel expanded its military campaign by bombing Houthi targets in Yemen, following the recent killing of Hezbollah leader Sayyed Hassan Nasrallah.

On the other hand, oil prices are facing downward pressure from mixed economic data out of China, the world’s largest oil importer. China’s Caixin Manufacturing PMI for September fell to 49.3, signaling contraction, while the NBS Manufacturing PMI slightly improved to 49.8, surpassing market expectations.

Oil traders are also keeping a close eye on China’s monetary stimulus measures aimed at boosting economic activity and energy demand. China recently announced a CNY 1 trillion capital injection into its largest state banks, marking the most significant financial move since the 2008 crisis.

However, potential headwinds for crude prices could come from Saudi Arabia’s plans to increase production. Saudi Arabia is expected to resume oil production on December 1, with OPEC+ agreeing to boost output by 180,000 barrels per day. Reports suggest that the Kingdom is committed to this increase, even if it temporarily pressures prices downward.

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WTI Extends Rally Above $70.00 as Hurricane Francine Disrupts Production

WTI Extends Rally Above $70.00 as Hurricane Francine Disrupts Production

WTI Extends Rally Above $70.00 as Hurricane Francine Disrupts Production

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $70.35 on Tuesday, continuing its rally as Hurricane Francine impacts oil production in the US Gulf of Mexico. The storm has caused significant disruptions, with the US Bureau of Safety and Environmental Enforcement (BSEE) reporting on Monday that roughly 12% of crude oil production and 16% of natural gas output in the Gulf have been halted. This supply disruption has pushed WTI prices to two-week highs.

Adding to the bullish momentum, the Federal Open Market Committee (FOMC) is set to announce its interest rate decision on Wednesday. Investors are increasingly betting on a 50 basis point rate cut, according to CME FedWatch. Lower interest rates reduce borrowing costs, which typically supports increased demand for oil.
However, ongoing concerns about Chinese demand may temper some of WTI’s gains. China, the world’s largest oil importer, continues to show signs of an economic slowdown. Over the weekend, data revealed that Chinese industrial production growth fell to a five-month low in August, with further deterioration in retail sales and new home prices.

Xtrememarkets market strategist Yeap Jun Rong highlighted that weaker-than-expected Chinese economic data has dampened market sentiment, raising doubts about future oil demand as China’s growth outlook remains sluggish. This could weigh on WTI’s upward momentum.

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WTI Falls to Around $72.50 as OPEC+ Plans Production Increase

WTI Falls to Around $72.50 as OPEC+ Plans Production Increase

WTI Falls to Around $72.50 as OPEC+ Plans Production Increase

West Texas Intermediate (WTI) crude oil prices have declined for the second consecutive session, trading near $72.50 per barrel during Monday’s Asian trading hours. This downward trend is largely attributed to reports that the Organization of the Petroleum Exporting Countries and their allies (OPEC+) are planning to increase oil production in the upcoming quarter.

According to a Reuters report citing six sources, OPEC+ is expected to proceed with a planned production increase starting in October. Specifically, eight OPEC+ member countries are set to boost their output by 180,000 barrels per day (bpd) next month. This move is part of a broader strategy to gradually reverse a recent production cut of 2.2 million bpd while maintaining other cuts until the end of 2025.
However, the fall in crude oil prices could be mitigated by ongoing supply concerns. In Libya, oil export disruptions caused by conflicts between rival factions have constrained supply. Despite this, the Arabian Gulf Oil Company has resumed production, operating at up to 120,000 bpd to satisfy domestic demand.

Weak demand in China and the United States, the world’s largest oil consumers, could further weigh on WTI prices. An official survey indicated that China’s manufacturing activity fell to a six-month low in August, accompanied by a sharp drop in factory gate prices. In response, Chinese policymakers are advancing plans to increase economic stimulus for households.

In the US, oil consumption in June hit its lowest seasonal levels since the peak of the COVID-19 pandemic in 2020, as reported by the US Energy Information Administration (EIA) last Friday. Analysts at ANZ have highlighted potential downside risks to growth in 2025, driven by economic challenges in both China and the US. They suggest that OPEC may need to delay phasing out its voluntary production cuts if it aims to support higher oil prices.

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WTI Crude Oil Prices Remain Steady

WTI Crude Oil Prices Remain Steady Below $73 Amid US Recession Concerns and Easing Supply Fears

WTI Crude Oil Prices Remain Steady Below $73 Amid US Recession Concerns and Easing Supply Fears

West Texas Intermediate (WTI) crude oil prices are struggling to build on Thursday’s rebound from a two-week low near the mid-$71 range, trading in a narrow band around $72.75 during Friday’s Asian session. The commodity remains nearly flat for the day and is set for significant weekly losses due to ongoing concerns about slowing demand.

The downward revision of US job growth figures for the year through March has reignited fears of a potential recession in the United States, the world’s largest oil consumer. Additionally, persistent concerns about an economic slowdown in China, the world’s top oil importer, are acting as headwinds for WTI crude. Meanwhile, optimism about a ceasefire in Gaza is also limiting the upside for oil prices, as US officials indicated that a truce between Israel and Hamas could be imminent. This development eases concerns over a broader conflict in the Middle East, a critical oil-producing region, and potential supply disruptions.

On the supportive side, US government data released on Wednesday revealed a substantial drawdown in crude oil inventories, suggesting strong domestic demand. Moreover, market expectations that the Federal Reserve will soon begin cutting interest rates—potentially announcing a 25 basis point reduction at the September meeting—could boost economic activity, thereby supporting crude oil prices. Despite these factors, the US Dollar’s inability to sustain its recovery from year-to-date lows provides some support to USD-denominated commodities, including crude oil, mitigating the risk of further declines.

Given these mixed signals, traders are cautious about taking new positions and are awaiting clearer market direction before betting on an extension of the nearly two-week downtrend in WTI prices.

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Oil Edges Higher Ahead of Weekly Stockpile Reports

Oil Edges Higher Ahead of Weekly Stockpile Reports

Oil Edges Higher Ahead of Weekly Stockpile Reports

Oil prices are trading relatively flat on Wednesday after experiencing sharp declines over the past three sessions. The stabilization follows reports that a tanker in the Red Sea was attacked by Houthi rebels. Delta Tankers confirmed that its vessel, Sounion, sustained minor damage in the attack. This incident adds further tension to the region just as Hamas is reportedly considering a ceasefire proposal in Gaza from both Israel and the US.

Similarly, the US Dollar Index (DXY), which tracks the performance of the US Dollar against six major currencies, is trying to recover from a losing streak that erased all its gains for 2024. The key focus today is the release of the Federal Open Market Committee (FOMC) Minutes, which could provide insights ahead of the Jackson Hole meeting on Friday. Additionally, the Nonfarm Payrolls Benchmark Revision may result in adjustments to employment data for the past year, up until March.

At the time of writing, West Texas Intermediate (WTI) Crude is trading at $73.23 per barrel, while Brent Crude is at $76.92 per barrel.

Oil Market Update: Red Sea Tensions and Stockpile Data

  • OPEC+ Production Constraints: OPEC+ is unlikely to increase production significantly due to concerns that higher output could further depress prices, especially with increased supply from the US and Brazil, according to BP’s Chief Economist Spencer Dale, as reported by Bloomberg.
  • Uganda’s Crude Development: Uganda’s Energy Minister, Ruth Nankabirwa, announced progress on a $20 billion Crude development project in partnership with TotalEnergies and Cnooc.
  • Tanker Incident: Delta Tankers reported that the Sounion tanker has been attacked three times and is still determining if the vessel remains on course or is adrift, according to Reuters.
  • Crude Stockpile Changes: The American Petroleum Institute (API) reported a modest stockpile increase of 347,000 barrels overnight, which contrasts with analysts’ expectations of a 2.8 million barrel drawdown.

Later today, the Energy Information Administration (EIA) will release its weekly Crude stockpile data. The previous report indicated a build of 1.357 million barrels, with expectations now for a drawdown of 2.8 million barrels.

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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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