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Australian Dollar Weakens as US Dollar Rises Ahead of PMI Data

Australian Dollar Weakens as US Dollar Rises Ahead of PMI Data

Australian Dollar Weakens as US Dollar Rises Ahead of PMI Data

The Australian Dollar (AUD) softened against the US Dollar (USD) on Friday, impacted by mixed Judo Bank PMI results from Australia. Despite this, a hawkish tone from the Reserve Bank of Australia (RBA) on future rate decisions lent some underlying support to the AUD.

Australian PMI Data

  • Manufacturing PMI: Improved to 49.4 in November, up from 47.3 in October, signaling a slower contraction in manufacturing activity for the first time in six months.
  • Services PMI: Dropped to 49.6 from 51.0, marking the first contraction in services activity in ten months.
  • Composite Output Index: Fell to 49.4 from 50.2, indicating a modest decline in private sector output.

RBA Outlook

Australia’s largest banks revised their projections for the RBA’s first rate cut:

  • Westpac and NAB expect a cut in May, up from earlier forecasts of February.
  • CBA and ANZ maintain a cautious forecast for February.

While RBA minutes signaled vigilance on inflation, policymakers kept future rate adjustments on the table, emphasizing flexibility to address economic conditions.

US Dollar Strength

The US Dollar maintained its upward momentum:

  • The US Dollar Index (DXY) hovered near 107.00, supported by better-than-expected US Initial Jobless Claims, which fell to 213,000 against a forecast of 220,000.
  • Futures markets now indicate reduced expectations for Federal Reserve rate cuts, further strengthening the Greenback.

Broader Market Sentiment

Fed Chair Jerome Powell expressed confidence in the US economy, highlighting robust labor market conditions and persistent inflationary pressures as reasons to hold off on aggressive rate cuts. Other Fed officials echoed the need for caution, dampening speculation of rapid monetary easing.

Meanwhile, Australian Treasurer Jim Chalmers highlighted economic headwinds, including falling iron ore prices, a weakening labor market, and slower growth in China, a key trading partner.

Technical Analysis

The AUD/USD pair trades near 0.6510 with a bearish outlook:

  • Support Levels:
    • Descending channel lower boundary at 0.6360.
    • Yearly low of 0.6348 from August.
  • Resistance Levels:
    • Nine-day EMA at 0.6518 and 14-day EMA at 0.6533.
    • A breakout above these levels could target 0.6687, the recent four-week high.

Market attention now shifts to upcoming US PMI data and Michigan Consumer Sentiment figures, which could further influence the AUD/USD trajectory.

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Japanese Yen Holds Near Daily High

Japanese Yen Firm Near Daily High Against USD, Awaits Signals from BoJ Governor Ueda

Japanese Yen Firm Near Daily High Against USD, Awaits Signals from BoJ Governor Ueda

The Japanese Yen (JPY) holds its modest gains against the US Dollar (USD), with the USD/JPY pair trading near the 155.00 mark during Thursday’s Asian session. Intervention fears and geopolitical uncertainties, coupled with speculation about potential monetary policy tightening by the Bank of Japan (BoJ), are lending support to the Yen.

Focus on BoJ’s Next Move
Market participants are closely monitoring remarks from BoJ Governor Kazuo Ueda for clues about a possible interest rate hike in December. Investors are divided, pricing in a 50% chance of a 25-basis-point rate hike at the BoJ’s final policy meeting of the year, scheduled for December 18-19. Governor Ueda’s earlier statements left markets uncertain about the pace and timing of further policy tightening.

Additionally, reports suggest that an economic stimulus package worth ¥21.9 trillion, proposed by Economic Revitalisation Minister Akazawa, could provide further direction for Japan’s monetary policy outlook.

Impact of Geopolitical Developments and US Policies
Geopolitical tensions appear to have eased somewhat, with recent comments from Russian and US officials reducing concerns about a potential nuclear conflict. This has tempered demand for traditional safe-haven currencies like the JPY.

Meanwhile, in the US, anticipation around President-elect Donald Trump’s economic policies is driving inflation expectations higher. This has lifted US Treasury yields, which in turn support the USD and limit the downside for the USD/JPY pair.

Fed Officials’ Cautious Stance
Federal Reserve (Fed) policymakers continue to signal a cautious approach to monetary easing. Fed Governor Lisa Cook and Boston Fed President Susan Collins have advocated for measured steps to avoid policy missteps, while Fed Governor Michelle Bowman warned of stalled progress on inflation, suggesting a slower pace of rate cuts.

Upcoming Data and Market Drivers
Key economic data, including Japan’s National Core Consumer Price Index (CPI) and US Initial Jobless Claims, the Philly Fed Manufacturing Index, and Existing Home Sales, are in focus. The CPI data will be a critical input for the BoJ’s next policy decision, while US data could influence Treasury yields and the USD’s trajectory.

In the meantime, speeches from Federal Open Market Committee (FOMC) members later today and Governor Ueda’s upcoming appearance are expected to provide fresh impetus for USD/JPY traders.

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Gold Price Retreats as US Dollar Strengthens | Key Levels to Watch

Gold Price Pulls Back Amid Strengthening US Dollar

Gold Price Pulls Back Amid Strengthening US Dollar

Gold price (XAU/USD) retreats from a one-and-a-half-week high reached during the Asian session, trading near the $2,635–$2,636 range. Despite this pullback, gold remains on track for a third consecutive day of gains as geopolitical tensions and cautious market sentiment support demand for the safe-haven asset. However, a modest recovery in US Dollar (USD) demand, driven by higher Treasury yields, limits further upside for the non-yielding yellow metal.

Key Drivers and Market Dynamics

  1. Geopolitical Tensions:
  • The ongoing Russia-Ukraine conflict continues to drive safe-haven flows.
  • Russian President Vladimir Putin’s updated nuclear doctrine and Ukraine’s deployment of US-made ATACMS missiles heighten geopolitical risks.
  • Despite these developments, statements from both Russia and the US seeking to avoid nuclear conflict help temper market fears.
  1. US Dollar and Treasury Yields:
  • Optimism surrounding US President-elect Donald Trump’s economic policies has revived expectations of inflationary pressures, supporting US Treasury yields and bolstering the USD.
  • The CME Group’s FedWatch Tool indicates less than a 60% probability of a 25 bps rate cut in December, suggesting the Federal Reserve might take a less dovish stance.
  1. Federal Reserve Outlook:
  • Comments from Federal Reserve officials hint at a willingness to curb inflation even at the cost of higher interest rates.
  • Traders await speeches from influential FOMC members, which could provide further clarity on the Fed’s policy direction and influence near-term gold price movements.

Technical Analysis: Key Levels to Watch

Upside Potential:

  • Gold’s recovery from last week’s two-month low has broken the 38.2% Fibonacci retracement level, signaling bullish momentum.
  • Immediate resistance lies at the $2,658–$2,660 range, followed by a congestion zone near $2,670–$2,672. Sustained buying could push prices toward the psychological $2,700 mark.

Downside Risks:

  • Immediate support is seen at $2,622–$2,620, with stronger support at $2,600.
  • A break below $2,600 could expose gold to further declines, targeting the 100-day Simple Moving Average (SMA) around $2,555 and last week’s swing low at $2,537–$2,536.

Outlook and Upcoming Catalysts

While gold’s near-term trajectory remains influenced by geopolitical concerns and USD strength, the market’s focus is on upcoming FOMC member speeches and US economic data. These factors will play a critical role in shaping expectations around Federal Reserve policy, bond yields, and the USD, ultimately determining the direction for gold prices.

For now, $2,600 is a pivotal support level, while $2,700 acts as a key psychological barrier for bulls.

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Gold Price Holds Below $2,500 as Traders

Gold Price Faces Pressure Ahead of US Retail Sales Data

Gold Price Faces Pressure Ahead of US Retail Sales Data

Gold (XAU/USD) struggles near $2,570 on Friday, failing to sustain momentum after rebounding from a two-month low in the previous session. The precious metal remains under selling pressure due to the strength of the US Dollar (USD) and uncertainty surrounding the Federal Reserve’s (Fed) pace of interest rate reductions. Expectations of elevated inflation next year, influenced by Donald Trump’s policies, have dampened the likelihood of aggressive rate cuts, making non-yielding assets like gold less attractive.

Geopolitical Tensions Provide Support

Despite these headwinds, escalating tensions in the Middle East and the ongoing conflict between Ukraine and Russia may lend support to gold, a traditional safe-haven asset. Investors are also eyeing key US economic indicators, including October’s Retail Sales, the NY Empire State Manufacturing Index, and Industrial Production data, all due on Friday. Additionally, speeches from Fed officials Susan Collins and John Williams could offer further direction.

Gold Price Faces Bearish Technical Outlook

Gold’s price action remains cautious, with the metal hovering around the 100-day Exponential Moving Average (EMA). A sustained break below this key level could signal further downside, as the 14-day Relative Strength Index (RSI) remains below the neutral 50 mark, near 33.60.

Key support levels to watch include:

  • $2,485: September 8 low
  • $2,353: July 25 low
  • $2,300: Psychological support

On the upside, immediate resistance is seen at:

  • $2,665: A support-turned-resistance level
  • $2,750: November 6 high

A decisive break above these levels could trigger bullish momentum for gold.

Market Sentiment and Fed Insights

Fed Chair Jerome Powell stated on Thursday that the US economy’s performance has been “remarkably good,” allowing the Fed to lower rates cautiously. Meanwhile, Richmond Fed President Thomas Barkin highlighted that while progress has been made, additional efforts are needed to sustain economic momentum.

The US Producer Price Index (PPI) for October rose 2.4% year-over-year, exceeding expectations of 2.3%, while weekly Initial Jobless Claims remained below forecasts at 217K. However, the CME FedWatch Tool shows reduced market confidence in a December rate cut, with odds falling to 59.1% from 75% last week.

Gold’s near-term trajectory will likely hinge on Friday’s data and geopolitical developments, keeping investors vigilant.

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Japanese Yen Stays on Defensive, Hovering Near 156.00 Against the US Dollar

Japanese Yen Stays on Defensive, Hovering Near 156.00 Against the US Dollar

The Japanese Yen (JPY) continues to weaken against the US Dollar (USD), marking its fourth consecutive day of losses on Thursday, as it dips below the 156.00 level for the first time since July. Despite a notable increase in Japan’s Producer Price Index (PPI) at its fastest annual rate in over a year for October, uncertainties around Japan’s political landscape cast doubt on the Bank of Japan’s (BoJ) willingness to raise rates. Concerns over the potential impact of incoming US President-elect Donald Trump’s trade policies on Japan’s economy further weigh on the JPY.

Expectations of expansionary policies from the Trump administration have heightened inflationary outlooks, potentially influencing the Federal Reserve (Fed) to pause its easing cycle. Additionally, recent US Consumer Price Index (CPI) data, which signaled slower-than-expected progress in reducing inflation, may limit the scope for further Fed rate cuts next year. This environment has supported higher US Treasury yields, bolstering the USD and drawing investors away from the lower-yielding JPY.

Although there is speculation that Japanese authorities may consider intervening in the forex market to support the Yen, the current economic landscape suggests a continued upward bias for the USD/JPY pair. Looking ahead, key data releases such as US Weekly Jobless Claims and Producer Price Index (PPI) could impact the USD/JPY pair, along with Fed Chair Jerome Powell’s upcoming remarks and Japan’s preliminary Q3 GDP figures, set for release on Friday.

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Gold Price Eases as USD Strength Weighs Ahead

Gold Price Eases as USD Strength Weighs Ahead of Key US CPI Release

Gold Price Eases as USD Strength Weighs Ahead of Key US CPI Release

Gold (XAU/USD) has trimmed part of its modest intraday recovery gains but continues to hold above $2,600 in early European trading on Wednesday. Investors’ cautious sentiment around US President-elect Donald Trump’s potential trade tariffs and their impact on global markets has led to a shift toward safe-haven assets like gold. In addition, some repositioning ahead of the US Consumer Price Index (CPI) report has lent support to the precious metal.

At the same time, a bullish US Dollar (USD) remains near its highest level since early May amid optimism that Trump’s proposed fiscal policies could drive inflation and potentially constrain the Federal Reserve’s (Fed) ability to cut interest rates further. Rising US Treasury yields, supported by this outlook, continue to limit upward momentum for non-yielding assets like gold. Nevertheless, the XAU/USD has managed to break a three-day losing streak after touching a low of around $2,589 on Tuesday, its lowest since September 20.

Gold Bulls Hold Back as USD and Bond Yields Rise on Trump Policy Optimism

The US Dollar’s rally, supported by Trump’s proposed expansionary policies, pushed the gold price below the $2,600 mark for the first time since September. The anticipation of Trump’s protectionist tariffs could put upward pressure on inflation, reducing the Fed’s scope for rate cuts, which helps sustain elevated bond yields.

In remarks Tuesday, Richmond Fed President Tom Barkin highlighted that inflation may be stabilizing but remains uncertain. Meanwhile, Minneapolis Fed President Neel Kashkari noted that a higher-than-expected inflation reading ahead of the December FOMC meeting could prompt the Fed to pause further rate cuts. Yields on 10-year US Treasuries remain close to multi-month highs as markets reduce bets on further aggressive rate cuts by the Fed.

Technical Analysis: Key Levels and Trends for Gold Price

From a technical standpoint, gold’s resilience near the 38.2% Fibonacci retracement of its June-October rally suggests caution for bearish traders, though daily chart oscillators remain in negative territory. This indicates that gold’s near-term momentum may still be to the downside.

For bearish traders, a sustained move below the $2,600 mark and the 38.2% Fibonacci level could confirm a bearish trend, potentially pulling gold toward the $2,540 area, where the 100-day Simple Moving Average (SMA) and the 50% Fibonacci level provide strong support. If this level breaks, it may trigger a further downtrend.

On the upside, resistance is likely near the $2,630-$2,632 range. Should follow-through buying lift gold above this zone, the next targets lie near $2,650-$2,655 and then $2,670, with a decisive break above $2,700 suggesting the recent correction may have concluded.

Looking Ahead: CPI Data and USD Impact

Traders are eyeing the release of October’s CPI report, which is expected to show a monthly rise of 0.2% and an annual increase of 2.6%, up from 2.4% in September. A higher-than-expected reading could curb expectations for further Fed rate cuts, potentially bolstering the USD and weighing on gold. Conversely, a lower-than-expected inflation figure could revive hopes of a December rate cut, which might soften the USD and offer support to gold prices.

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Japanese Yen Continues Consolidation Against USD Amid Mixed Signals

Japanese Yen Continues Consolidation Against USD Amid Mixed Signals

Japanese Yen Continues Consolidation Against USD Amid Mixed Signals

The Japanese Yen (JPY) remains directionless, fluctuating between small gains and losses against the US Dollar (USD) as the European session begins on Tuesday. Investors appear increasingly skeptical about the Bank of Japan’s (BoJ) capacity for further monetary tightening, given Japan’s current political landscape. The October BoJ Summary of Opinions reflected policymakers’ mixed views on additional rate hikes, adding to the uncertainty.

In contrast, expectations of inflationary pressures from US President-elect Donald Trump’s policy proposals, which may reduce the Federal Reserve’s (Fed) ability to ease policy further, are sustaining higher US Treasury yields. This yield advantage makes the USD more appealing over the lower-yielding JPY. However, concerns over potential intervention by Japanese authorities to support the yen might limit any sharp JPY declines.

JPY Bulls on Hold Amid Intervention Concerns and Domestic Economic Hurdles

Concerns around Japan’s political environment have dampened hopes for additional BoJ rate hikes. This sentiment was reinforced by the BoJ’s October Summary of Opinions. In diplomatic news, Japanese Prime Minister Shigeru Ishiba is expected to meet with Chinese President Xi Jinping at the upcoming Asia-Pacific Economic Cooperation summit in mid-November, possibly influencing future trade and economic policies. Meanwhile, PM Ishiba announced plans to engage business and labor representatives on next year’s wage negotiations.

Trump’s proposed tariffs could strain Japanese exports, potentially dampening economic growth and creating further challenges for the BoJ’s monetary policy plans. Adding to the pressure, Minneapolis Fed President Neel Kashkari noted the Fed requires stronger inflation evidence before considering further rate cuts. Investors are leaning towards the view that Trump’s policies may drive economic growth and inflation, limiting the Fed’s scope for aggressive policy easing.

US Treasury yields remain elevated near post-election highs, and the USD is hovering close to a recent peak, providing additional support to USD/JPY. This week’s economic events, including speeches by Federal Reserve members like Chair Jerome Powell, along with US inflation data, should offer more insight into the Fed’s rate trajectory. Additionally, Japan’s preliminary Q3 GDP data and the US Retail Sales report, both due Friday, could provide fresh direction for the USD/JPY pair.

Technical Outlook: USD/JPY Eyes 154.00 for Continued Gains

From a technical standpoint, USD/JPY’s recent breakout above the 200-day Simple Moving Average (SMA) and the close above the 61.8% Fibonacci retracement level from the July-September decline favor a bullish outlook. Daily chart indicators remain comfortably in positive territory, with room before reaching overbought conditions, suggesting a near-term bullish bias. If USD/JPY breaks above 154.00, it could test multi-month highs around 154.70, with the next resistance at 155.00. A push above 155.00 could drive momentum toward 155.65-155.70, potentially reaching the 156.00 mark.

On the downside, the 153.35 level (61.8% Fibo. resistance) serves as initial support, followed by 153.00 and the 152.70-152.65 support area. Any further decline may offer a buying opportunity around 152.00, with additional support at the 200-day SMA near 151.75. A sustained break below the latter could trigger technical selling, bringing USD/JPY below 151.00 and possibly toward intermediate support at 150.35-150.30, followed by the 150.00 psychological level.

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Impending Adjustments in US Stocks May Pose Challenges for Global Funds

Impending Adjustments in US Stocks May Pose Challenges for Global Funds

The upcoming shift to a shorter settlement cycle for U.S. securities is presenting significant challenges for international fund managers. This change, set to be implemented on May 28, is a move to a T+1 settlement cycle, where transactions are settled one business day after the trade. This is a reduction from the current T+2 standard and is a direct response to reduce the risks associated with unsettled trades, particularly highlighted by the volatile events like the 2021 GameStop stock plunge.

This transition to T+1 in the U.S. creates a discrepancy with the settlement cycles in most other countries, which typically follow a T+2 cycle. The disparity is leading to a reevaluation of transaction processes among global market participants, with a focus on preventing transaction failures and managing increased trading costs. This change has implications on various operational aspects for fund managers globally.

One of the critical challenges facing international fund managers is staffing. The new settlement cycle demands more rapid processing of trades, which could necessitate additional personnel or shifts in workforce management to ensure timely compliance. Furthermore, fund managers are contemplating holding larger cash reserves. This strategy is considered necessary to bridge potential gaps in transaction processing, although it might adversely impact the overall performance of the funds due to the lower yield on cash holdings compared to other investments.

Another significant concern is the heightened foreign exchange risk. With the faster settlement cycle, fund managers will have less time to manage and hedge against the fluctuations in currency values, which could lead to increased exposure to foreign exchange volatility.

The Depository Trust & Clearing Corporation (DTCC), a key player in securities clearing and settlement in the U.S., has been actively engaging with industry bodies like the Investment Company Institute (ICI) to facilitate this transition. However, despite not commenting directly, DTCC has indicated through a recently published paper that market participants need to expedite their preparation for the change.

Industry experts acknowledge the complexity and the challenges of moving to T+1. They point out that while it is a complicated initiative, it brings substantial risk reduction and operational benefits. For instance, Tom Price, a managing director at the Securities Industry and Financial Markets Association, highlighted the operational benefits of this transition. Similarly, RJ Rondini, the director of securities operations at ICI, pointed out that the overall reduction in capital requirements due to the faster settlement cycle outweighs the risks in other areas.

In summary, while the move to a T+1 settlement cycle in the U.S. is aimed at mitigating risks associated with unsettled trades and enhancing overall market efficiency, it brings a set of new challenges for international fund managers, including staffing adjustments, the need for higher cash reserves, and increased exposure to foreign exchange risk. These factors collectively necessitate a reevaluation of current practices and processes to adapt effectively to this significant market change.

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Japan’s Stocks Fluctuate, Yen Nears 150 Following BOJ’s Predicted Policy Shift

Japan’s Stocks Fluctuate, Yen Nears 150 Following BOJ’s Predicted Policy Shift

On Tuesday the Japanese stock market experienced notable fluctuations, while the national currency, the yen, weakened to a level close to 150 per dollar. This market activity followed the Bank of Japan’s landmark decision to conclude its eight-year practice of negative interest rates, marking the country’s first instance of policy tightening since 2007.

The decision by the Bank of Japan (BOJ) comes at a time when central banks around the world are holding meetings to determine their monetary policies. The BOJ’s move signifies a departure from a prolonged period of extremely accommodating monetary policy. This policy shift involves setting the overnight call rate as the new target, with a guidance range between 0 and 0.1%. Additionally, the central bank announced that it would pay 0.1% interest on excess reserves that financial institutions hold with it.

In anticipation of this policy change, BOJ Governor Kazuo Ueda is scheduled to conduct a press conference at 0630 GMT to elucidate the rationale behind this decision. Market participants are particularly keen to discern insights about the trajectory and speed of potential future rate hikes. Frederic Neumann, the chief Asia economist at HSBC, commented on this development, noting that the BOJ has taken its initial step towards normalizing its policy. However, he expressed skepticism about the BOJ’s ability to significantly increase short-term interest rates soon, coining the term ‘stuck at zero’ to describe this situation.

In the wake of these developments, Japan’s Nikkei index exhibited a volatile performance, alternating between gains and losses. Concurrently, the yen’s depreciation to 149.74 per dollar against the U.S. dollar suggests that market participants had already factored in the BOJ’s policy shift, following weeks of speculation and media reports indicating an imminent change. Analysts believe that the yen’s future trajectory will be more heavily influenced by the Federal Reserve’s policy decisions, including the timing and magnitude of any rate cuts by the U.S. central bank. Furthermore, the BOJ has committed to maintaining an accommodative policy stance, leading traders to anticipate that interest rates will remain at zero for an extended period.

In the context of these developments, HSBC’s Neumann highlighted the need for the BOJ to exercise extreme caution in any further policy tightening. This is to prevent any potential appreciation of the yen that could undermine the hard-earned progress in reflation. In other Asian markets, there was a general downturn. MSCI’s broadest index of Asia-Pacific shares outside Japan fell by 0.62%. In China, stocks also declined, with Hong Kong’s Hang Seng index dropping by more than 1% and the blue-chip shares easing by 0.3%.

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Stocks Rally as Powell Maintains Course on Interest Rate Reductions

Stocks Rally as Powell Maintains Course on Interest Rate Reductions

On Wednesday, U.S. stock markets experienced a significant resurgence, particularly in the technology sector, which made a robust recovery from the previous day’s considerable downturn. This upward trend was largely influenced by investor reactions to Federal Reserve Chair Jerome Powell’s latest comments, suggesting that interest rate cuts are still on the table for this year.

The Nasdaq Composite, known for its concentration of tech stocks, saw an impressive increase of nearly 0.6%. This uptick was a notable turnaround from Tuesday, when tech stocks led a broader market decline. Similarly, the S&P 500 rose by 0.5%, and the Dow Jones Industrial Average grew by 0.2%. Both indices were recovering from losses exceeding 1% from the previous session.

Investor focus is currently centered on Powell’s upcoming testimony to Congress. This event is anticipated to be a key driver for market movements, following two consecutive days of losses. These losses were partly attributed to significant declines in major tech companies like Apple (AAPL) and Tesla (TSLA), which stoked concerns about a potential tech bubble.

Key to investor sentiment is any potential deviation in Powell’s remarks from the Federal Reserve’s consistent message that they are not in a hurry to slash interest rates. In a prior statement to lawmakers, Powell hinted that rate cuts could be appropriate “at some point” in 2024, leaving investors eager for more detailed insights as Powell answers questions from lawmakers over the next two days.

Powell, addressing the House Financial Services Committee, suggested that if the economy continues to progress as expected, it may be appropriate to start reducing policy restraint within the year. His statements are being closely monitored for indications of the Federal Reserve’s future policy direction.

In terms of individual stocks, New York Community Bank (NYCB) experienced a dramatic day, ultimately closing with an increase of over 7%. The stock initially plunged following reports that NYCB was seeking investors for a stock purchase. However, it made a remarkable recovery after the bank announced the appointment of a new CEO and a $1 billion investment from a consortium, including former Treasury Secretary Steven Mnuchin.

Investors are now keenly awaiting further cues from Powell’s testimony, which could significantly influence market trajectories in the days to come. The anticipation surrounding the Federal Reserve’s approach to interest rate adjustments continues to be a pivotal factor in market dynamics.

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Morgan Stanley: Global Funds Reinvest in China Stocks

Morgan Stanley: Global Funds Reinvest in China Stocks

As February concluded, the dynamics surrounding Chinese equities experienced a significant shift. Recent data compiled by strategists Gilbert Wong and Laura Wang, published in a March 4 note, highlighted a noteworthy deceleration in the outflows from Chinese stocks. Importantly, regional active managers began increasingly focusing on sectors like technology and growth stocks, indicating a renewed interest in the Chinese market.

This development coincides with China’s intensified efforts to instill confidence in its economy. Notably, mainland stocks have successfully halted a six-month trend of net foreign investment outflows. The analysis presented by Wong and Wang suggests that the changing tide in investment flows might not be solely attributable to the Chinese government’s intervention through purchases by state-affiliated entities, often referred to as the “national team.” This observation could alleviate some concerns about the durability of the market’s recovery from its January lows.

The report also pointed out a significant increase in the realized volatility of the MSCI China index. It leaped from 20% in late December to over 30% by mid-February on an annualized basis. Such high volatility levels have made maintaining a substantial underweight position in Chinese stocks a high-risk strategy for most regional investment funds.

Furthermore, the strategists noted a shift in stance by Asia ex-Japan funds and emerging market funds based in the US and Europe. These funds have reportedly lessened their underweight positions in Chinese equities in February. Despite the ongoing trend of net outflows in equities from mainland China and Hong Kong, which amounted to $2.2 billion in February (a slight decrease from $2.6 billion in January), there is a sense of optimism. The bulk of these outflows, around 95%, were attributed to investor redemptions, as per EPFR data.

The recent moderation in outflows could signify a pivotal moment. Money managers across the region appear to be reassessing their asset allocations. Notably, some funds have started to reduce their investments in India, citing overvaluation concerns and a search for better risk-reward opportunities elsewhere. This shift could signal a positive outlook for China’s position in global investment portfolios, suggesting a potential resurgence in its attractiveness to international investors.

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US Equities Decline as Market Anticipates Crucial

US Equities Decline as Market Anticipates Crucial PCE Inflation Data

On Wednesday, US stock markets experienced a decline as investors focused their attention on the anticipated inflation data while evaluating the prospects of interest rate adjustments in the current year. This downturn was marked by a notable drop in major market indices, with the Dow Jones Industrial Average recording its third consecutive session of losses.

The financial community is particularly attentive to the upcoming release of the Personal Consumption Expenditures (PCE) index, scheduled for Thursday. This index is regarded by the Federal Reserve as a critical gauge of inflation. Forecasts by Dow Jones-surveyed economists suggest an expected increase in consumer expenditure prices of 0.3% for January, which surpasses the 0.2% rise observed in the previous month. The significance of this data lies in its potential influence on the Federal Reserve’s interest rate decisions throughout the year. A higher-than-anticipated inflation figure could pivot the Fed’s strategy on rate adjustments.

Analysts, including Arnim Holzer of Easterly EAB Risk Solution, have commented on the market’s anticipation of the PCE report. They speculate that the inflation rate might exceed last month’s figures, but also acknowledge the Federal Reserve’s current stance of cautious observation. This approach seems prudent given the Fed’s ongoing efforts to manage inflation effectively.

Investor sentiment regarding the possibility of rate cuts by the Federal Reserve has seen a shift. There is a growing consensus that fewer rate reductions might occur this year. This change in outlook is partly due to the resilience of the US economy, which appears robust enough to lessen the necessity for aggressive rate cuts aimed at staving off a recession.

Market predictions, as reflected in the CME FedWatch tool, indicate a nearly certain expectation that the Federal Reserve will maintain current interest rates at its forthcoming policy meeting. Furthermore, there’s a 57% probability, as per market projections, that the Fed will limit rate reductions to 75 basis points or less by year-end. These predictions underscore a cautious yet optimistic view of the economy, balancing the need to control inflation with the importance of sustaining economic growth. The forthcoming PCE index report thus holds significant weight in shaping the Fed’s monetary policy and the broader economic outlook for the year.

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European Shares Show Mixed Performance

European Shares Show Mixed Performance Following Worldwide Market Retreat; Abrdn Rises by 4.5%

European Shares Show Mixed Performance Following Worldwide Market Retreat; Abrdn Rises by 4.5%

European markets exhibited a mixed performance on Tuesday morning, reflecting a broader trend of declining momentum in global markets. The Stoxx 600, a key European stock market index, was relatively unchanged as of 9:20 a.m., indicating a cautious stance among investors. This was a notable contrast to the recent global market downturn, demonstrating the variable nature of current market sentiments.

In the Stoxx 600, mining stocks were a standout, rising by 1.3%, showcasing resilience in this sector. This uptick in mining stocks could be attributed to various factors, including commodity prices or sector-specific developments. On the other hand, media stocks didn’t fare as well, experiencing a 0.5% decline. This decrease in media stocks could be reflecting changing investor attitudes towards the media sector or broader market trends impacting these stocks.

One significant mover in the European market was the investment firm and asset manager, Abrdn. Abrdn’s stock rose by 4.3%, a noteworthy increase, following the announcement of its financial results. Despite a 5% fall in operating profit, the results surpassed market expectations, instilling confidence among investors. Moreover, Abrdn also revealed plans to streamline its operations by cutting 500 jobs. This restructuring plan likely contributed to the positive investor sentiment, as it could be seen as a move towards greater efficiency and cost management in a challenging economic environment.

In the Asia-Pacific region, markets turned lower overnight, contributing to the global market pullback. Hong Kong’s stock market led these declines, indicating specific regional challenges or sentiment. Japan’s Nikkei 225 also retreated, relinquishing gains from earlier in the session. This shift in the Asia-Pacific markets reflects the interconnectedness of global financial markets and how regional events can influence broader market trends.

The trading sentiment globally was subdued, following a pause in the previously robust Wall Street rally. On Monday, major U.S. indexes pulled back from their record highs, signaling a potential recalibration of investor expectations or reactions to emerging market data. Early Tuesday, S&P 500 futures were nearly flat, suggesting a breather in the market rally and possibly a period of reassessment for investors.

In the United States, investors are closely monitoring upcoming economic indicators. A key focus this week is the monthly personal consumption expenditures (PCE) price index, the U.S. Federal Reserve’s preferred inflation gauge. Scheduled for release on Thursday, this data could provide crucial insights into inflation trends and potentially influence the Federal Reserve’s monetary policy decisions. The anticipation surrounding this release underscores the current market sensitivity to inflation data, as it plays a critical role in shaping monetary policy and investor expectations in an evolving economic landscape.

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Nikkei Reaches Historic Peak, Echoing

Nikkei Reaches Historic Peak, Echoing 1989 Highs

Nikkei Reaches Historic Peak, Echoing 1989 Highs

Japanese stocks have achieved a remarkable milestone, reaching a record high on Thursday that surpasses levels last witnessed in 1989 during the height of the bubble economy. This surge in the Nikkei share average, which peaked at 39,156.97 points, has marked a significant moment in Japan’s financial history, breaking the previous intraday record of 38,957.44 points set on the final trading day of 1989. The index closed even higher at 39,098.68, showcasing a robust 2.19% increase.

This achievement is not just about surpassing a numerical threshold; it represents a historic recovery, taking 34 years to reclaim its heights – a duration longer than any major market has taken, including Wall Street’s recovery from the 1929 crash and the Great Depression. Tsutomu Yamada, a senior market analyst at Au Kabucom Securities in Tokyo, reflects on this achievement as the dawn of a new era, symbolizing Japan’s escape from deflation and the opening of a new chapter in its economic story.

In 2023, the Nikkei was already showing signs of this resurgence, being the best-performing major bourse in Asia with a 28% surge. This momentum has continued into 2024, with an impressive 17% rise so far. This performance stands out even when compared to tech-heavy indices like Nasdaq, which had a 43% rise last year and a 6% increase in 2024.

The breakthrough moment was met with excitement on Nomura’s Tokyo trading floor, where traders celebrated as the Nikkei surpassed its 1989 high. This enthusiasm was not just about numbers; it was a collective acknowledgment of overcoming decades of underperformance that had deterred global investors.

Japan’s economic resilience, despite facing a domestic recession, conflicts in Europe and the Middle East, a global inflation shock, and rising rates worldwide, has been noteworthy. Its trade exposure and a weaker currency have been instrumental in insulating the economy from internal demand issues and boosting exporters’ earnings.

The resurgence of the Nikkei also symbolizes a significant psychological shift for the Japanese people, many of whom have never seen the index at these levels. Richard Kaye, a Japan-based portfolio manager at Comgest, highlights the potential for this momentum to attract domestic liquidity in unforeseen amounts.

Corporate governance changes in Japan, such as driving buybacks and unwinding cross-holdings, have been catalysts in this rally. Foreign investment, including significant investment from Warren Buffett in 2020, has put a spotlight on Japan’s attractive valuations. Foreign investors infused a substantial 6.3 trillion yen ($42 billion) into the equity market last year, with a net spend of 1.16 trillion yen in Japanese equities in January alone.

Further fueling this rally is a robust earnings season, a depreciating yen nearing the 150 per dollar level, and expectations that the Bank of Japan will maintain its ultra-easy monetary policy. Bank of America’s Asia fund manager survey for February reflects this optimism, with nearly a third of participants expecting double-digit returns from Japan’s stock market over the next 12 months. This optimism is underlined by analysts raising their year-end forecasts for the Nikkei, with expectations now set at around 39,000 points by the end of 2024.

However, despite this strong performance and optimism, there are indications in the derivative market of potential short-term disruptions to this momentum. Nevertheless, the current scenario portrays a revitalized Japanese stock market, drawing significant interest and investment, and marking a historic turning point in its financial narrative.

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WTI Dips Below $79 After Hawkish Fed Comments

WTI Dips Below $79 After Hawkish Fed Comments

WTI Dips Below $79 After Hawkish Fed Comments

West Texas Intermediate (WTI) oil prices continued their downward trend, settling around $78.90 per barrel during Tuesday’s Asian trading session. Despite significant geopolitical developments, including the death of Iran’s President Ebrahim Raisi in a helicopter crash and health concerns about Saudi Arabia’s King Salman bin Abdulaziz, the market remained largely unaffected by these events.

The focus instead shifted to domestic economic signals, particularly recent comments from Federal Reserve officials. Crude oil prices have been under pressure as the market digests hawkish remarks from the Fed, which contrast with the slightly cooler US consumer inflation data observed last week. Federal Reserve Vice Chair Michael Barr, in a statement reported by Reuters, mentioned that the Fed is positioned to maintain its current policy while it observes economic developments.

Further adding to the cautious sentiment, Loretta Mester, President of the Federal Reserve Bank of Cleveland, shared in a Bloomberg interview that she no longer sees the need for three rate cuts in 2024. Mester pointed out that inflation risks are tilted upwards, advocating for more time to evaluate inflation data in light of the economy’s robustness.

Market expectations for monetary policy adjustments have seen minor shifts; according to the CME FedWatch Tool, the probability of a 25 basis-point rate cut by the Fed in September has risen marginally to 49.6% from 48.6% the previous week.

On the supply side, the Trans Mountain pipeline expansion in Canada began commercial operations this month after overcoming extensive regulatory hurdles and construction delays. The pipeline will now carry an additional 590,000 barrels per day (bpd) from Alberta to Canada’s Pacific coast, potentially impacting North American oil markets.

Investor attention is also turning towards the upcoming meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), scheduled for June 1. This meeting is critical as it will decide whether to continue the voluntary cuts of 2.2 million barrels per day currently in place by some members, influencing global oil supply and potentially affecting market dynamics further.

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Gold Prices Rise Amid US CPI Inflation and Fed Rate Cut Expectations

Gold Prices Rise Amid US CPI Inflation and Fed Rate Cut Expectations

Gold prices (XAU/USD) gained traction on Thursday, driven by a weaker US Dollar (USD). The recent Consumer Price Index (CPI) report revealed that inflation in the US slowed in April, leading market participants to increase their expectations for US Federal Reserve (Fed) rate cuts this year. Lower interest rates tend to benefit gold, as they reduce the borrowing costs associated with investing in the yellow metal.

On Thursday, gold traders will be closely monitoring several key economic indicators, including US Building Permits, Housing Starts, weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production. These data points will provide insights into the health of the US economy and potential future Fed actions.

In addition to economic data, several Fed officials, including Barr, Harker, Mester, and Bostic, are scheduled to speak on Thursday. Their comments could influence market sentiment and the USD’s performance. Hawkish remarks from these officials could strengthen the USD and limit gold’s upside potential in the short term. 

Despite the potential for hawkish Fed commentary, the overall outlook for gold remains positive due to the market’s anticipation of rate cuts. Lower interest rates make non-yielding assets like gold more attractive to investors, as the opportunity cost of holding gold decreases.

As traders await further economic data and Fed speeches, the interplay between inflation expectations, Fed policy, and USD movements will continue to be crucial in shaping gold prices. If the economic data points to a weakening US economy or if Fed officials signal a dovish stance, gold could see further gains. Conversely, strong economic data or hawkish Fed comments could strengthen the USD and limit gold’s upward momentum.

In summary, gold prices are rising amid expectations of Fed rate cuts and a weaker USD, driven by a slowdown in US inflation. Key economic data releases and Fed speeches on Thursday will be pivotal in determining the short-term direction of gold prices. Investors should stay attentive to these developments as they navigate the market’s dynamic landscape.

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Gold Price Rises in Anticipation of US PPI Data and Fed Chair Powell's Speech

Gold Price Rises in Anticipation of US PPI Data and Fed Chair Powell’s Speech

Gold Price Rises in Anticipation of US PPI Data and Fed Chair Powell’s Speech

The gold price (XAU/USD) experienced a modest rebound on Tuesday, even as the US Dollar (USD) remained stable, signaling a potential restraint in the metal’s upward movement. This cautious trading comes as market participants are likely to adopt a wait-and-see approach in anticipation of significant US inflation data expected later in the week. Despite some selling pressure on XAU/USD in recent sessions, driven by the prevailing sentiment of maintaining higher US interest rates for an extended period, other factors are at play that could enhance gold’s appeal temporarily.

Particularly, rising tensions in the Middle East have prompted investors to seek safety in gold, which is traditionally viewed as a secure asset during geopolitical uncertainties. This safe-haven demand could support gold prices in the short term, counterbalancing some of the downward pressure from the US monetary policy outlook.

The focus for investors this week will be on critical economic data releases from the United States. Notably, the US Producer Price Index (PPI) for April is scheduled for release on Tuesday, coinciding with a speech by Federal Reserve Chair Jerome Powell. The market’s attention will then shift to the Consumer Price Index (CPI) report on Wednesday. These data points are crucial as they provide insights into inflation trends, which are central to the Federal Reserve’s decision-making process regarding interest rate adjustments.

If the inflation figures come in hotter than expected, they could dampen hopes for an imminent Fed rate cut, exerting further pressure on gold prices. Higher interest rates tend to diminish the attractiveness of non-yielding assets like gold, as they increase the opportunity cost of holding such assets. Investors typically seek higher returns from yield-bearing investments when rates rise, reducing the investment demand for gold.

As these economic indicators unfold, market participants will be keenly assessing their implications for the Federal Reserve’s monetary policy trajectory. The potential for fluctuating gold prices remains, contingent on how these economic reports might influence expectations regarding the timing and nature of the Fed’s next rate adjustments.

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Gold Prices Rise as Investors Anticipate US Data,

Gold Prices Rise as Investors Anticipate US Data, Federal Reserve Comments

Gold Prices Rise as Investors Anticipate US Data, Federal Reserve Comments

Gold prices (XAU/USD) are trading positively this Thursday, although gains are checked by several factors, including a stronger US Dollar and hawkish remarks from the US Federal Reserve. These influences are expected to restrain the upward movement of gold in the near term.

Despite these pressures, global demand for gold continues to rise, driven largely by robust investment in the over-the-counter markets, sustained purchases by central banks, and increased demand from Asian markets, particularly China and India, according to the latest report from the World Gold Council (WGC). 

Additionally, ongoing geopolitical uncertainties in the Middle East and a risk-averse market environment are bolstering the appeal of gold as a traditional safe-haven asset.Investors in the gold market are on the lookout for new catalysts that could influence prices. Key upcoming events include the release of US weekly Initial Jobless Claims and a speech by San Francisco Fed President Mary Daly, who is known for her dovish stance within the central bank. Daly’s comments, in particular, might provide a buffer against further declines in gold prices, offering temporary support to the market as traders assess the broader economic landscape.

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WTI Falls to Seven-Week Low

WTI Falls to Seven-Week Low, Dips Below $80 Amid Unexpected Crude Inventory Increase

WTI Falls to Seven-Week Low, Dips Below $80 Amid Unexpected Crude Inventory Increase

Western Texas Intermediate (WTI), the benchmark for US crude oil, dropped to a seven-week low, trading around $79.20 on Thursday. This decline was influenced by an unexpected increase in US crude inventories and diminishing geopolitical tensions in the Middle East.

For the week ending April 26, US crude inventories unexpectedly rose by 7.256 million barrels, reaching 460.9 million barrels, compared to a drawdown of 6.368 million barrels in the previous week. This development surprised the market, which had anticipated a 2.3 million barrel decrease. The data from the US Energy Information Administration (EIA) marked the highest inventory level since June 2023, underscoring concerns over softening oil demand.

Additionally, easing geopolitical tensions in the Middle East contributed to the lower oil prices. Reports from Bloomberg indicate that the United States and Saudi Arabia are negotiating an agreement that could see Riyadh receiving security guarantees and possibly establishing diplomatic ties with Israel, contingent on ending the conflict in Gaza. However, any escalation in geopolitical risks could still disrupt oil supplies and push prices higher.

Oil market focus is now turning towards the upcoming US employment data for April, set to be released on Friday. Key indicators include Nonfarm Payrolls (NFP), the Unemployment Rate, and Average Hourly Earnings. These metrics are crucial as they could influence the USD-denominated WTI prices significantly, offering new directions for oil traders. The market participants are poised to analyze this data to gauge potential impacts on WTI and adjust their trading strategies accordingly.

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Gold Price Maintains Minor Gains Amid Uncertainty

Gold Price Sees Modest Losses, Downside Limited Before FOMC

Gold Price Sees Modest Losses, Downside Limited Before FOMC

Gold prices (XAU/USD) are slightly lower in Tuesday’s Asian trading session but remain within the trading range established over the past week. This stability follows the release of the US Personal Consumption Expenditures (PCE) Price Index on Friday, which solidified expectations that the Federal Reserve (Fed) will maintain higher interest rates for an extended period. This outlook has bolstered the US Dollar (USD), creating headwinds for gold, traditionally seen as a safe-haven asset.

Additionally, reduced geopolitical tensions in the Middle East have lessened the demand for safe-haven investments like gold. However, the downside for gold prices appears constrained as traders are cautious, opting to wait for clearer signals from the Fed regarding future interest rate adjustments. This cautious sentiment is likely to keep significant moves in check until more definitive economic indicators are available.

Attention is now focused on the FOMC’s two-day monetary policy meeting, which begins today, and the upcoming release of the US Nonfarm Payrolls (NFP) report on Friday. These events are critical for providing direction to the market and could influence gold prices depending on the outcomes. In the interim, today’s US economic data, including the Chicago PMI and the Conference Board’s Consumer Confidence Index, may offer some short-term movements for XAU/USD, as market participants analyze these indicators for further insights into economic conditions and their potential impact on the Fed’s monetary policy decisions.

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Gold Price Consolidates Below $2,750 Amid Mixed Market Signals

Gold Price Steady Above $2,300, Awaits US Data

Gold Price Steady Above $2,300, Awaits US Data

During the Asian trading session on Thursday, the price of gold (XAU/USD) continued its steady movement, maintaining a position above the $2,300 mark. Investors are currently in a holding pattern, awaiting further indications regarding the Federal Reserve’s (Fed) potential path on interest rate cuts before making any significant directional moves in the market. The focal points for market watchers will be the upcoming release of key US macroeconomic data, including the Advance Q1 GDP report later today and the Personal Consumption Expenditures (PCE) Price Index on Friday. These reports are critical as they will likely influence the near-term dynamics of the US Dollar (USD) and provide important catalysts for movements in gold prices.

The cautious stance of investors is further compounded by recent hawkish comments from several Fed officials, indicating that the central bank is not in a hurry to reduce interest rates. This sentiment is reflective of a broader strategic patience within the Fed, suggesting a more measured approach to monetary policy adjustments, which could impact market expectations and gold pricing.

Additionally, recent data showing stronger US consumer inflation has led investors to adjust their expectations regarding the timing and extent of the Fed’s rate cuts. Initially anticipated cuts are now being pushed back to September, with a reduction in the number of expected rate cuts in 2024. This recalibration of expectations has kept US Treasury bond yields at elevated levels, presenting a challenge for gold. As gold does not yield interest, higher bond yields can diminish its attractiveness as an investment.

Moreover, easing concerns over a significant escalation in the Middle East crisis have also placed a cap on the upward movement of gold prices. Typically, gold is considered a safe-haven asset during times of geopolitical uncertainty, but a reduction in immediate worries about the region has lessened the urgency for investors to flock to gold.

Overall, the gold market remains under the influence of a complex interplay of Fed policy expectations, economic data releases, and global geopolitical events. As investors dissect these various inputs, the short-term trajectory of gold prices will likely be defined by their collective impact on market sentiment and the resulting shifts in investment strategies.

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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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