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Japanese Yen Strengthens

Japanese Yen Strengthens as Traders Anticipate BoJ Rate Hike

Japanese Yen Strengthens as Traders Anticipate BoJ Rate Hike

The Japanese Yen (JPY) continues to gain momentum for the second consecutive day as Bank of Japan (BoJ) Governor Kazuo Ueda’s hawkish comments stand in stark contrast to the dovish tone of Federal Reserve Chair Jerome Powell.

In a speech to Parliament on Friday, Governor Ueda suggested that the BoJ might consider further interest rate hikes if economic conditions align with their projections. July’s National Consumer Price Index (CPI) data remained at its highest level since February, further supporting the BoJ’s hawkish outlook.

Meanwhile, the US Dollar (USD) is weakening due to increasing expectations of a rate cut in September. During the Jackson Hole Symposium, Fed Chair Powell remarked, “The time has come for policy to adjust,” though he did not specify the timing or scale of the potential cuts.

Market participants are now widely anticipating a 25 basis point (bps) rate cut from the Federal Reserve in September. The CME FedWatch Tool shows that markets are fully pricing in at least this amount.

Daily Market Movers: Japanese Yen Rises on BoJ Ueda’s Hawkish Comments

Bloomberg reported that Philadelphia Fed President Patrick Harker emphasized the need for a gradual reduction in US interest rates. Reuters added that Chicago Fed President Austan Goolsbee noted that monetary policy is currently at its most restrictive level, with the Fed now focusing on achieving its employment mandate.

Governor Ueda, speaking before the Japanese parliament on Friday, clarified that the BoJ is “not considering selling long-term Japanese government bonds (JGBs) as a tool for adjusting interest rates.” He added that any reduction in JGB purchases would only account for about 7-8% of the balance sheet, which is a relatively small decrease. Ueda further mentioned that if the economy meets their projections, there could be a phase where interest rates might be adjusted slightly higher.

Japan’s National CPI rose by 2.8% year-on-year in July, maintaining this rate for the third consecutive month and remaining at its highest level since February. Additionally, the National CPI excluding Fresh Food increased by 2.7%, the highest reading since February, in line with expectations.

In the US, the Composite PMI edged down slightly to 54.1 in August from 54.3 in July, a four-month low but still above market expectations of 53.5. This indicates continued growth in US business activity, marking 19 consecutive months of expansion.

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

Technical Analysis: USD/JPY Drops Near 144.00

USD/JPY traded around 143.90 on Friday, with the daily chart indicating the pair is positioned below a downtrend line, suggesting a bearish outlook. However, the 14-day Relative Strength Index (RSI) remains slightly above 30, indicating that the bearish trend might persist.

On the downside, the USD/JPY pair may approach the seven-month low of 141.69, recorded on August 5. A break below this level could drive the pair toward the throwback support level at 140.25.

In terms of resistance, the USD/JPY pair may test the immediate barrier at the downtrend line around the psychological level of 145.00, followed by the nine-day Exponential Moving Average (EMA) at the 145.74 level. A breakthrough above the nine-day EMA could lead the pair to explore the region around the throwback-turned-resistance at the 154.50 level.

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Gold Price Holds Below $2,500 as Traders

Gold Price Holds Below $2,500 as Traders Await Powell’s Speech

Gold Price Holds Below $2,500 as Traders Await Powell’s Speech

Gold (XAU/USD) is seeing some dip-buying on the last trading day of the week, partially recovering from Thursday’s over 1% drop to a weekly low. The US Dollar (USD) is struggling to build on its overnight rebound from the year-to-date low, due to expectations of lower interest rates in the US. This dovish outlook has triggered a decline in US Treasury bond yields, putting pressure on the Greenback. Additionally, ongoing geopolitical risks are providing support to the safe-haven appeal of gold.

However, traders remain cautious and are avoiding significant bullish positions ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium later today. This hesitation is keeping gold prices below the key psychological level of $2,500 as the European session approaches. Powell’s remarks will be closely analyzed for indications regarding the Fed’s potential rate-cut path, which will significantly impact near-term USD price movements and offer new directional momentum for gold.

Daily Market Movers: Gold Traders on Standby for Powell’s Speech

On Thursday, the US Dollar staged a solid recovery from its 2024 low, buoyed by rebounding US Treasury bond yields, which drew investors away from gold. However, the USD’s recovery lacked sustained momentum due to market speculation that the Federal Reserve might begin a rate-cutting cycle in September, limiting losses for XAU/USD.

On the economic data front, the US Department of Labor reported that initial jobless claims rose to a seasonally adjusted 232,000 for the week ending August 17, up from the previous 228,000. This followed an annual benchmark review revealing that US employers added 818,000 fewer jobs than initially reported for the year through March.

Minutes from the Federal Open Market Committee (FOMC) meeting on July 30-31 showed an increasing number of policymakers supporting a rate cut next month due to progress in reducing inflation. The S&P Global flash PMI indicated that US manufacturing activity contracted at its fastest pace this year, although the services sector saw a surprise increase. The composite PMI showed continued healthy expansion in US private sector business activity, with selling price inflation nearing pre-pandemic levels.

Comments from regional Fed officials reflect a cautious stance on rate cuts. Kansas City Fed President Jeffrey Schmid emphasized the need for more data to support a rate reduction, while Philadelphia Fed President Patrick Harker indicated openness to a September cut, contingent on economic data. Boston Fed President Susan Collins also suggested that a rate cut would soon be appropriate as inflation data stabilizes.

Market attention is now focused on Fed Chair Jerome Powell’s upcoming speech, which will be pivotal in signaling the future trajectory of interest rates and influencing gold’s direction.

Technical Analysis: Gold’s Setup Suggests Potential for Further Gains

From a technical perspective, gold’s recent decline found support near the $2,370 horizontal resistance-turned-support level, which now serves as a crucial pivot point. A decisive break below this level could trigger technical selling, pushing gold prices towards the next support area around $2,345-$2,343. Further downside could extend towards the 50-day Simple Moving Average (SMA), currently positioned just above the $2,400 mark.

Conversely, if gold can regain momentum above the $2,500 level, it will face initial resistance around the $2,513-$2,514 region. Clearing this hurdle could open the door to testing the all-time high near $2,531-$2,532, potentially reigniting bullish momentum and extending gold’s recent uptrend.

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US Dollar Faces Continued Pressure as Market Focus

US Dollar Faces Continued Pressure as Market Focus Shifts to PMI Data

US Dollar Faces Continued Pressure as Market Focus Shifts to PMI Data

After a brief recovery earlier in the day on Wednesday, the US Dollar Index reversed course during the American session, marking its fourth consecutive day of losses. As of Thursday’s European trading hours, all eyes are on the preliminary August PMI data from Germany and the Eurozone, provided by HCOB, alongside the S&P Global/CIPS PMI figures. Later in the day, the US economic calendar will feature weekly Initial Jobless Claims, Existing Home Sales, and S&P Global PMI data.

On Wednesday, the US Bureau of Labor Statistics reported a preliminary estimate indicating a benchmark revision for March 2024’s total Nonfarm employment, with a downward adjustment of -818,000 (-0.5%). Additionally, minutes from the Federal Reserve’s July 30-31 policy meeting revealed that a significant majority of policymakers felt that, should the incoming data align with expectations, easing policy at the next meeting would likely be appropriate. The USD Index is currently trading just above 101.20, down over 1% since the start of the week. Meanwhile, US stock futures are slightly lower, and the 10-year US Treasury bond yield remains near the lower end of its weekly range, around 3.8%.

In Asian trading, data from Australia showed the Judo Bank Composite PMI rose to 51.4 in August’s preliminary reading, up from 49.9 in July. However, this improvement failed to significantly impact AUD/USD, which continues to trade sideways around 0.6750.

EUR/USD surpassed 1.1170 on Wednesday, reaching its highest level since July 2023 before entering a consolidation phase early Thursday. The pair is currently steady at around 1.1150.

GBP/USD maintained its bullish momentum on Wednesday, climbing above 1.3100 for the first time in over a year. The pair remains just below this level as of Thursday morning in Europe.

USD/JPY was unable to capitalize on the USD’s broader weakness, closing flat on Thursday. The pair continues to trade sideways around 145.50 at the start of the European session.

Gold, which had corrected from its record high of $2,531 set on Tuesday, stabilized above $2,500 late Wednesday. XAU/USD remains relatively quiet, trading near $2,510 early Thursday.

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How Responsible is the Polish Central Bank

How Responsible is the Polish Central Bank? – Commerzbank Analysis

How Responsible is the Polish Central Bank? – Commerzbank Analysis

The Polish zloty weakened against the euro and other CE3 currencies yesterday after Poland’s Constitutional Court issued a controversial ruling. The court declared that NBP governor Adam Glapinski could not be held accountable by a parliamentary committee, the State Tribunal, or through any report by such bodies, citing constitutional guarantees of central bank independence. This argument has been used by the previous ruling party (PiS) from the outset of this dispute, notes Commerzbank’s FX Analyst Tatha Ghose.

Zloty Weakens Against the Euro

“We believe this argument lacks merit and doubt that parliament will consider the Constitutional Court’s ruling as binding. Poland’s Constitutional Court has been compromised since the rule of law disputes with the EU and lacks legitimacy. Other key courts are also dominated by right-wing PiS affiliates. The accusations from both sides are driven by ideology rather than good faith.”

“On balance, it seems clear that Glapinski’s ’emergency’ rate cuts just before the elections, coupled with his refusal to cut rates further after an opposing political party took over, were politically motivated. The NBP cannot now claim ‘central bank independence’ after failing to uphold its constitutional duty to remain apolitical.”

“The new KO government will likely proceed with the planned Sejm procedures despite the court’s ruling, pushing for Glapinski’s suspension. Glapinski, in turn, will likely use the ruling to resist interrogation. This standoff is expected to continue in parliament for the next year without a clear resolution. As a result, monetary policy is likely to remain highly politicized and stagnant during this period.”

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EUR/USD Approaches YTD Highs Near

EUR/USD Approaches YTD Highs Near 1.1050 on Expectations of Fed Rate Cuts

EUR/USD Approaches YTD Highs Near 1.1050 on Expectations of Fed Rate Cuts

The EUR/USD pair climbed to year-to-date (YTD) highs, nearing 1.1040, during early European trading on Monday. This rise is supported by a broad weakening of the US Dollar (USD) amid increasing speculation that the Federal Reserve (Fed) might cut interest rates in September. Market participants are now keenly awaiting Fed Chair Jerome Powell’s speech on Friday for further insights into potential rate cuts.

On Sunday, San Francisco Fed President Mary Daly expressed greater confidence that inflation is under control, suggesting that it might be time to consider lowering borrowing costs from the current range of 5.25% to 5.5%. Chicago Fed President Austan Goolsbee also cautioned that the US central bank should avoid maintaining restrictive policies longer than necessary. These dovish remarks from Fed officials have added selling pressure on the Greenback and provided a boost to EUR/USD.

Currently, investors are pricing in a roughly 70% chance of a quarter-point Fed rate cut in September, with some expecting a more substantial half-point cut. Morningstar’s chief US economist, Preston Caldwell, noted that the latest CPI report further supports the case for aggressive Fed rate cuts starting in September, with an initial 25 basis point cut projected to bring the Fed Funds rate down to 5.00-5.25%.

Meanwhile, the Euro (EUR) remains resilient as markets anticipate a gradual reduction in interest rates by the European Central Bank (ECB). At the latest press conference, ECB President Christine Lagarde emphasized a cautious, data-dependent approach, stating that policymakers are “not pre-committing to a particular rate path” and will make decisions on a meeting-by-meeting basis.

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Japanese Yen Strengthens

Japanese Yen Strengthens Amid Hawkish BoJ Sentiment; US Data in Focus

Japanese Yen Strengthens Amid Hawkish BoJ Sentiment; US Data in Focus

The Japanese Yen (JPY) rebounded against the US Dollar (USD) on Friday, likely bolstered by Japan’s strong second-quarter GDP growth, which fuels speculation about a potential interest rate hike from the Bank of Japan (BoJ).

However, the Yen may face headwinds due to political uncertainty in Japan, triggered by reports suggesting that Prime Minister Fumio Kishida will not seek re-election as party leader in September, potentially ending his term as prime minister.

The USD/JPY pair is trending lower as the US Dollar weakens, pressured by declining Treasury yields. Moreover, traders are fully pricing in a 25 basis point rate cut by the US Federal Reserve for September, according to the CME FedWatch tool.

Despite this, the Greenback found some support from recent positive US economic data, which has eased recession fears. Upcoming data, including the preliminary US Michigan Consumer Sentiment Index for August and July’s Building Permits, will be closely watched during the North American session.

Market Highlights: Japanese Yen Rises on Hawkish BoJ Outlook

On Thursday, the US Census Bureau reported a 1.0% month-over-month increase in US Retail Sales for July, reversing June’s 0.2% decline and exceeding the expected 0.3% rise. Additionally, Initial Jobless Claims for the week ending August 9 came in at 227,000, lower than the forecast of 235,000 and down from 234,000 the previous week.

Japanese Economy Minister Yoshitaka Shindo expressed optimism on Thursday, stating that Japan’s economy is expected to recover gradually as wages and incomes improve. He also mentioned that the government will work closely with the BoJ to implement flexible macroeconomic policies.

Japan’s GDP grew by 0.8% quarter-on-quarter in Q2, beating market expectations of 0.5% and rebounding from a 0.6% contraction in Q1. This marks the strongest quarterly growth since Q1 2023. On an annualized basis, GDP grew by 3.1%, surpassing the 2.1% market consensus and reversing a 2.3% contraction in Q1. This is the highest yearly growth since Q2 2023.

Federal Reserve Bank of Chicago President Austan Goolsbee expressed concern on Wednesday about the labor market rather than inflation, noting recent improvements in price pressures alongside weak employment data. He added that the extent of rate cuts will depend on prevailing economic conditions, according to Bloomberg.

US Consumer Price Index (CPI) data showed a 2.9% year-over-year increase in July, slightly down from the 3% rise in June and below market expectations. The Core CPI, excluding food and energy, rose by 3.2% year-over-year, a slight decrease from June’s 3.3% increase, in line with market forecasts.

Prime Minister Fumio Kishida announced on Wednesday that he will not seek re-election as the leader of the Liberal Democratic Party (LDP) in September. Kishida highlighted the need to address Japan’s deflationary pressures by promoting wage and investment growth, with the goal of expanding Japan’s GDP to ¥600 trillion.

Rabobank’s senior FX strategist, Jane Foley, noted that this week’s series of US data releases, along with the upcoming Jackson Hole event, should offer more clarity on potential US policy actions. The primary expectation is for the Fed to cut rates by 25 basis points in September, with another potential cut by year-end.

Technical Analysis: USD/JPY Slips Toward 148.50; Immediate Support at Nine-Day EMA

The USD/JPY pair is trading around 148.80 on Friday. The daily chart indicates that the pair is above the nine-day Exponential Moving Average (EMA), suggesting a short-term bullish trend. However, the 14-day Relative Strength Index (RSI) remains below 50, and further gains would confirm a bullish momentum.

In terms of support levels, the USD/JPY pair may find immediate support at the nine-day EMA, around 148.09. A drop below this level could enhance the bearish outlook, potentially pushing the pair toward the seven-month low of 141.69, recorded on August 5. A continued decline could bring the pair closer to the next support level at 140.25.

On the upside, the USD/JPY pair could target the 50-day EMA at 153.08, with a possibility of testing the resistance level at 154.50, which has shifted from previous throwback support to current pullback resistance.

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Australian Dollar Declines as US Dollar Gains Strength

Australian Dollar Declines as US Dollar Gains Strength Ahead of CPI Inflation Data

Australian Dollar Declines as US Dollar Gains Strength Ahead of CPI Inflation Data

The Australian Dollar (AUD) has weakened against the US Dollar (USD) following an unexpected rate cut by the Reserve Bank of New Zealand (RBNZ) on Wednesday. The RBNZ reduced its Official Cash Rate (OCR) by 25 basis points to 5.25% from 5.50%. Given the close economic ties between Australia and New Zealand, developments in one country can influence the other, impacting their respective currencies.

Despite this, the AUD found some support from recent data showing that Australian wage growth remained strong in the second quarter, leading the Reserve Bank of Australia (RBA) to maintain a hawkish stance on its policy outlook. The RBA kept the cash rate steady at its meeting last week, aiming to return inflation to its 2-3% target range.

RBA Governor Michele Bullock ruled out the possibility of rate cuts within the next six months, emphasizing the bank’s cautious approach to inflation risks and its readiness to raise rates if necessary. Traders are now focused on the upcoming release of Consumer Inflation Expectations and Employment data from Australia on Thursday.

The AUD/USD pair saw support as the US Dollar retreated following weaker-than-expected Producer Price Index (PPI) data from the United States (US) released on Tuesday. Investors are now looking ahead to the US CPI inflation report on Wednesday, which could provide insights into the Federal Reserve’s (Fed) interest rate strategy.

Market Movers: Potential for Australian Dollar Appreciation Amid RBA’s Hawkish Stance

On Tuesday, Atlanta Fed President Raphael Bostic expressed increased confidence in the Fed’s ability to achieve its 2% inflation target, though he noted that more evidence is needed before supporting a rate reduction, according to Reuters.

The US Core Producer Price Index (PPI) rose by 2.4% year-on-year in July, down from the previous 3.0%, and below the expected 2.7%. The overall PPI increased by 2.2% YoY in July, compared to 2.7% in June, missing the market forecast of 2.3%. Month-over-month, PPI rose by 0.1% after a 0.2% increase in June.

In Australia, Westpac Consumer Confidence rose by 2.8% in August, reversing a 1.1% decline in July. Meanwhile, the Wage Price Index saw a 0.8% rise in the second quarter, slightly below the expected 0.9% increase.

RBA Deputy Governor Andrew Hauser attributed persistent inflation to weaker supply and a tight labor market, noting the significant uncertainty surrounding economic forecasts.

However, the AUD’s upside could be limited by safe-haven flows due to rising geopolitical tensions in the Middle East. On Sunday, Defense Minister Yoav Gallant informed US Defense Secretary Lloyd Austin of Iran’s military activities, which suggest preparations for a significant strike on Israel, according to Axios writer Barak Ravid.

Federal Reserve Governor Michelle Bowman also stated on Sunday that she sees ongoing inflation risks and labor market strength, indicating that the Fed may not be ready to cut rates at their next meeting in September, according to Bloomberg.

Westpac recently revised its RBA forecast, now predicting the first rate cut in February 2025, delayed from the previously expected November 2024. They also adjusted their terminal rate forecast to 3.35% from 3.10%, reflecting the RBA’s cautious approach, requiring stronger evidence before considering rate cuts.

Technical Analysis: Australian Dollar Trades Near 0.6650

The Australian Dollar is trading around 0.6640 on Wednesday. Technical analysis of the daily chart shows that the AUD/USD pair is moving within an ascending channel, indicating a strengthening bullish trend. The 14-day Relative Strength Index (RSI) has also moved above the 50 level, confirming the bullish momentum.

On the upside, the AUD/USD pair may test the upper boundary of the ascending channel at the 0.6675 level. A breakout above this level could propel the pair toward its six-month high of 0.6798, achieved on July 11.

In terms of support, the AUD/USD pair could test the nine-day Exponential Moving Average (EMA) at 0.6587, followed by the lower boundary of the ascending channel and the throwback level at 0.6575. A drop below this level could lead to a bearish outlook, potentially pushing the pair toward the throwback level at 0.6470.

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China's Economy Yet

Asian Stocks Decline Due to Chinese Market Impact, Dollar Experiences Weakness

Asian Stocks Decline Due to Chinese Market Impact, Dollar Experiences Weakness

Asian markets experienced a downturn on Friday, influenced by Chinese shares and with little direction from Wall Street, closed for a holiday. Meanwhile, the dollar remained subdued as expectations grow that U.S. interest rates have reached their peak. Japan’s core consumer inflation and factory activity data had a minimal impact on the yen.

The MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4%, although it’s still on track for a weekly rise of 0.9% and a significant 7.1% increase in November. This uptick is largely due to growing investor confidence that U.S. interest rates have reached their maximum, with focus shifting to the timing and extent of future rate cuts. Japan’s Nikkei, returning from a holiday, jumped 1.0%, nearing a 33-year peak achieved earlier in the week.

Chinese blue chips dropped 0.3%, and Hong Kong’s Hang Seng index plummeted 1.3%, erasing previous gains. Hong Kong-listed Chinese developers also fell 0.7%, despite a recent 6.4% surge following new support measures from Beijing.

Shane Oliver, AMP’s chief economist, noted that markets might undergo a period of consolidation after a rapid rebound, possibly affecting the traditional year-end rally. With U.S. markets closed for Thanksgiving and minor uplifts in European shares and the euro from better-than-expected euro zone PMIs, global market dynamics remained mixed.

The European Central Bank’s latest minutes indicated that while inflation in the euro zone is expected to decline, rate hikes remain a possibility. In bond markets, U.S. Treasury yields rose slightly as trading resumed in Asia.

The dollar struggled against other major currencies, nearing a three-month low, while the British pound strengthened, supported by positive business survey results that led to a reassessment of the Bank of England’s rate cut timeline.

Oil prices showed mixed reactions, with Brent crude slightly up and West Texas Intermediate crude down, following concerns about the delayed OPEC+ meeting. Gold prices remained stable at $1,992.75 per ounce, reflecting the cautious sentiment in global markets.

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Dollar Starts 2024 at Peak Since

Asian Stocks Reach 2-Month High as Dollar Takes Defensive Stance Amid Fed View

Asian Stocks Reach 2-Month High as Dollar Takes Defensive Stance Amid Fed View

Asian stocks reached a two-month high on Tuesday, mirroring gains on Wall Street, while the dollar remained weak due to expectations that the U.S. Federal Reserve has concluded its interest rate hike cycle.

The MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 0.97% to 510.11, touching its highest level since September 18. It has surged by 7% this month, marking its most substantial monthly gain since January.

In Europe, the risk-on sentiment is poised to continue, with Eurostoxx 50 futures up by 0.18%, German DAX futures 0.14% higher, and FTSE futures up 0.01%.

Investors are eagerly awaiting the release of the Federal Reserve’s meeting minutes to discern the future direction of interest rates. They are also closely monitoring earnings from Nvidia, which reached a record high on Monday.

Wall Street saw gains across its three major stock averages on Monday, with the Nasdaq leading the charge with a 1% rally, driven by Microsoft’s record high. The company recently hired Sam Altman, who formerly led OpenAI.

November has witnessed a broad-based rebound in global stock markets as economic data hinted at a potential easing of U.S. inflation. This has led to expectations that the Federal Reserve might halt its monetary tightening and consider rate cuts next year.

Elsewhere in Asia, Japan’s Nikkei edged higher, remaining close to its 33-year high reached on Monday. The index has surged by approximately 28% this year, making it the best-performing stock market in Asia.

China’s blue-chip CSI300 Index was 0.58% higher, and Hong Kong’s Hang Seng Index gained 0.78% on reports of Beijing’s new stimulus measures for the property sector, boosting risk appetite.

Lower yields in the Treasury market, driven by strong demand in the sale of 20-year Treasury bonds, have reinforced the belief that inflation will decelerate, and the Fed may cut rates next year. Consequently, the yield on 10-year Treasury notes dropped by 2.9 basis points to 4.393%, while the yield on the 30-year Treasury bond fell by 4.2 basis points to 4.533%.

The dollar continued to weaken, with the dollar index down 0.135% at 103.31, touching a near three-month low of 103.17 earlier in the session. The Japanese yen gained 0.22% to 148.03 per dollar, moving away from its one-year low of 151.92 reached last week. The Australian dollar, often considered a risk appetite indicator, reached a three-month high of $0.65775.

Australia’s central bank chief emphasized the challenge of inflation over the next one to two years, following the recent interest rate hike to combat rising prices.

Oil prices retreated after a previous day’s rally, with U.S. crude slipping by 0.46% to $77.47 per barrel, and Brent crude at $81.94, down 0.46% for the day.

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Market Trepidation as Investors Anticipate Federal Reserve’s Next Moves

Market Trepidation as Investors Anticipate Federal Reserve’s Next Moves

As trading commenced this week, apprehension took hold of the global markets, resulting in a dip in stock prices and raising questions about the Federal Reserve’s upcoming policy decisions. Asian equity benchmarks, which had been on a steady climb, were halted in their tracks. Notably, South Korea’s Kospi Index took a significant plunge of over 3% after experiencing its most substantial surge since 2020, following the reinstatement of a short-selling ban. This downward trend echoed through European and US stock futures, which also saw a decline.

Market Analyst Jun Rong Yeap of IG Asia Pte. remarked on the previous day’s commendable rallies, indicating that markets were retreating from those peaks amidst strengthening bond yields and a robust US dollar that set the tone for the week.

Investors and traders are now gauging the Federal Reserve’s next steps, with expectations that the Fed might resist further easing of financial conditions, maintaining flexibility in policy direction. Minneapolis Fed President Neel Kashkari has expressed caution, suggesting it is premature to claim victory over inflation despite emerging signs of subdued price pressures. In the coming days, the financial community will closely monitor the discourse of various Fed officials, including Chair Jerome Powell, for clearer guidance.

On the front of government debt, the markets saw stabilization after an initial surge in Treasury yields, which climbed by eight basis points, spurred by a considerable issuance of corporate debt and anticipation of forthcoming auctions. This activity strengthened the US dollar, which gained ground against its major counterparts in the Group-of-10.

Max Wasserman, the founder and senior portfolio manager at Miramar Capital, shared insights on Bloomberg Television, indicating a likelihood of trading within a specified range as the market seeks clarity on the trajectory of core inflation and the Fed’s response.

The currency and rate swaps market is currently pricing in more than a full percentage point of rate cuts by the Federal Reserve by the end of 2024, despite expectations of a peak rate of 5.37%. Contributing to the busy start of the week was the analysis of the Senior Loan Officer Opinion Survey (SLOOS), which revealed persisting tight standards and diminished demand at US banks.

In Australia, the dollar and equity markets felt additional pressure as the central bank resumed rate hikes after a pause, citing heightened inflation risks and a commitment to assess further data and risks for potential policy tightening.

Adding to the global economic concerns, China reported a more pronounced decline in exports for October than anticipated, underscoring a continued slump in international trade and a delicate recovery within its own borders. The offshore yuan remained relatively stable post-release of the trade data.

As the day unfolds, investors’ attention will turn to Europe, with anticipated earnings reports from major corporations, including UBS Group AG. The energy sector is also in the spotlight, with oil prices experiencing a dip amid an uncertain demand forecast and renewed skepticism about the conclusion of the Fed’s rate hikes, despite extended supply cuts by Saudi Arabia and Russia.

The markets are poised on a knife-edge, with investor sentiment swinging between caution and optimism as they navigate through a plethora of economic signals and await decisive actions from central banks, especially the Federal Reserve, which remains a focal point in global financial discourse.

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Turbulence in Asian Stocks and Anticipated European Market Openings in Light of Key Data Releases

Turbulence in Asian Stocks and Anticipated European Market Openings in Light of Key Data Releases

In the wake of unexpected economic data releases, Asian stock markets experienced a downturn on Tuesday, with most indices reflecting a downward trend. At the same time, European stock markets are gearing up for a diverse opening, eyeing imminent Eurozone GDP and CPI announcements.

The focal point of this decline was largely influenced by China’s PMI data, which failed to meet analysts’ expectations. This was further coupled with the Bank of Japan (BoJ) announcing modifications to its bond yield control policy post its October session. With the Federal Reserve meeting slated for Wednesday, there is widespread anticipation, potentially leading to increased caution amongst market participants.

Further elaborating on the Federal Reserve’s stance, Chair Jerome Powell has confirmed that there wouldn’t be any changes in the rates in the forthcoming meeting. Yet, market players will be keenly observing remarks from Fed officials during the scheduled press conference. The seemingly dovish inclination of US policymakers might be a catalyst for oscillations in risk-prone assets, primarily the stock markets.

Delving deeper into the Asian market specifics: Shanghai noted a decline of 0.19%, settling at 3,015; the Shenzhen Component Index took a dip of 0.90% to 9,838; Hong Kong’s Hang Seng experienced a steep fall of 1.70% to 17,110; South Korea’s Kospi plummeted by 1.38%; India’s NIFTY 50 saw a decrease of 0.16%, while in contrast, Japan’s Nikkei rose marginally by 0.16%.

A considerable factor contributing to the pressure on Chinese equities was the subpar Manufacturing Purchasing Managers’ Index (PMI) data. It receded to 49.5 in October from a previous 50.2 in September, missing the market projection of 50.2. Concurrently, the NBS Services PMI also fell to 50.6 in October, not meeting the anticipated consensus of 51.8.

Shifting focus to Japan, the BoJ maintained its interest rate and the 10-year Japanese Government Bond (JGB) yield target at -0.1% and 0%, respectively. Following its October deliberation, the bank introduced more flexibility to the YCC and adjusted its verbiage pertaining to the 1.0% 10-year JGB yield ceiling.

European stock markets are prepping for a mixed start, with investors keenly awaiting key data such as German Retail Sales, preliminary Eurozone inflation figures, and the Gross Domestic Products for Q3. Providing a backdrop, Monday’s data showcased a slight recovery in German growth, registering a 0.1% quarterly fall, better than the expected 0.3% slump. Also, the German CPI for October stood at 3.8% YoY, marking the lowest since August 2021.

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Asian Equities Experience Uptick Amid US Bond Yield Dip and China’s Economic Stimulus Plans

Asian Equities Experience Uptick Amid US Bond Yield Dip and China’s Economic Stimulus Plans

On Friday, the majority of Asian stock markets displayed promising signs of positive trading. A noteworthy factor in this uptick has been the declining US Treasury bond yield, which bolstered regional stocks as investors keenly awaited the release of the US Core Personal Consumption Expenditures Price Index (PCE) data set for later that day. However, ongoing geopolitical turmoil in the Middle East could cast a shadow, potentially applying downward pressure on these stock markets.

Key indices from various nations demonstrated these upward trends: China’s Shanghai grew by 0.35% reaching 2,998, Shenzhen Component Index surged by 1.11% to 9,672, Hong Kong’s Hang Sang leaped by 0.99% marking 17,213, South Korea’s Kospi showed a marginal increase of 0.02%, while Japan’s Nikkei boasted an impressive rise of 1.14%.

Chinese stocks, in particular, showcased a notable rebound from the lows of the past several months. This resurgence is attributed to the Chinese government’s robust economic move of issuing bonds worth 1 trillion yuan. This strategic step is aimed at catalyzing and invigorating local economic growth.

Meanwhile, in Japan, economic indicators presented some surprises. The nation witnessed inflation rates rising at a swifter pace than earlier projections for October. This unexpected increase might influence the Bank of Japan (BoJ) to adopt a more assertive and hawkish approach in their forthcoming BoJ meeting scheduled for the next week.

Diving deeper into Japan’s economic landscape, the National Consumer Price Index (CPI) for October recorded a jump to 3.3% YoY, a climb from its previous 2.8%, as reported early Friday by the Japan Statistics Bureau. Furthermore, the National CPI excluding fresh food also saw an increase, marking 2.7% YoY in October, up from September’s 2.5%.

Down south, Australia also witnessed shifts in its economic indicators. The Producer Price Index (PPI) of Australia moderated to 3.8% YoY in Q3, a slight dip from the 3.9% recorded earlier. Quarter-wise, the figures landed at 1.8%, showing a significant rise from the previous 0.5%.

In the larger global context, investors are now turning their focus to the US Core Personal Consumption Expenditures Price Index (PCE) data for September, releasing on Friday. The anticipated monthly and annual core figures are projected to be 0.3% and 3.7%, respectively. Moreover, as the week concludes, all eyes will be on the Federal Open Market Committee (FOMC) gathering in the upcoming week, an event that could usher in market volatility.

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Oil Price Surge May Limit Gains

Asian shares rise on strong corporate profits and lower oil prices

Asian shares rise on strong corporate profits and lower oil prices

Asian markets showed resilience and optimism on Wednesday, following the lead of Wall Street, as major corporations like Verizon exceeded profit expectations for the summer season. This boost in corporate earnings has instilled hope that companies will finally show growth after a year of stagnation, a development of utmost significance for global stock markets, which have grappled with the pressures of surging bond yields.

The recent surge in the 10-year Treasury yield, which has climbed from below 3.50% in the spring, has been a cause for concern. It is steadily approaching the Federal Reserve’s main overnight interest rate, which currently stands at its highest level since 2001, above 5.25%. The rapid rise in yields has adverse effects on various investments, including stocks and cryptocurrencies, and also has the potential to hamper economic growth, introducing stress into the broader financial system.

As of early Wednesday, the 10-year Treasury yield remained stable at 4.84%, indicating a temporary respite from its upward trajectory. In the Tokyo stock market, the Nikkei 225 index surged by 1.3%, reaching 31,466.92 points. Hong Kong’s Hang Seng index also saw robust gains, rising by 1.8% to 17,290.91, while the Shanghai Composite index registered a 0.5% increase, reaching 2,977.84 points. Conversely, South Korea’s Kospi experienced a 0.4% decline, settling at 2,373.88 points, and the S&P/ASX 200 in Sydney remained relatively unchanged at 6,856.60 points. India’s Sensex faced a 1.3% dip, while the SET index in Bangkok soared by 1.2%.

On Tuesday, Wall Street exhibited a strong performance, with the S&P 500 climbing by 0.7% to reach 4,247.68 points, breaking a five-day losing streak. The Dow Jones Industrial Average also saw a 0.6% increase, closing at 33,141.38 points. Meanwhile, the Nasdaq composite displayed an even more robust gain of 0.9%, closing at 13,139.87 points.

Verizon’s impressive performance particularly stood out, as its stock surged by 9.3%. The company reported a 20% increase in broadband subscribers and exceeded analysts’ profit expectations for the summer season. General Electric also made significant gains, with its stock rising by 6.5% after reporting better-than-expected earnings and raising its profit forecast for the year. Coca-Cola followed suit with a 2.9% increase, attributing its success to growth in markets such as Mexico and India, which contributed to better-than-expected summer profits.

Despite concerns surrounding rising interest rates and bond yields, the broader economy has displayed remarkable resilience. A robust job market and strong consumer spending have supported economic growth. However, there is lingering anxiety among investors that even if interest rates and yields stabilize at current levels, they may still be high enough to potentially trigger a recession if the Federal Reserve chooses to maintain its current stance. The situation continues to be closely monitored by market participants and economists alike.

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Nikkei 225 & Hang Seng Fall: Rising US Yields, Lower Risk Appetite

Nikkei 225 & Hang Seng Fall: Rising US Yields, Lower Risk Appetite

Asian stocks witnessed a pronounced downturn on Friday, largely influenced by global bond market dynamics that have steadily been weakening investors’ risk appetite. The situation is further exacerbated by mounting concerns over the escalating tensions between Israel and Hamas. This geopolitical instability, coupled with economic concerns, has made investors increasingly wary.

The possibility of the United States raising its interest rates has cast a shadow over the regional markets. Higher interest rates typically deter risk-oriented investments, making these markets less attractive. Such a move by the U.S. can potentially limit the inflow of foreign capital, thereby stifling the economic potential of these regions. 

Delving into specific market metrics, as of the latest update, the SSE Composite Index in China recorded a 0.27% drop, settling at 2,997 points. Meanwhile, the Shenzhen Component Index saw a dip of 0.36%, bringing it down to 9,620 points. Japan’s flagship index, the Nikkei 225, also wasn’t spared, falling 0.18% to 31,375. The Hang Seng in Hong Kong reported a 0.41% decrease, the Korean KOSPI index slid to 2,382, and Taiwan’s Weighted Index declined by 0.20%.

In China, concerns surrounding its property sector played a significant role in the stock market’s dip. Despite data suggesting robust economic growth, these concerns have acted as a counterbalance, diluting the market’s potential growth. Adding to the Chinese market’s woes is the looming uncertainty about a potential default by real estate giant, Country Garden Holdings. The company’s recent failure to make a timely payment on its international bonds has left traders and investors on edge, making them more cautious about Chinese assets.

Japan’s equity market took a hit when data released on Friday showed that the consumer price index inflation in September surpassed prior expectations. It’s worth noting that this inflationary indicator, which the Bank of Japan (BoJ) monitors closely, is at a level reminiscent of figures seen over four decades ago. Such statistics underline the enduring nature of inflationary pressures within Japan’s economic framework.

Moreover, the tech sector in Asia, which often serves as a barometer for global tech trends, has been under considerable strain this week. This is primarily due to a surge in global bond yields, causing investors to reconsider their stance on growth stocks. As a result, the appeal of tech shares in the region has waned. Significant players like SK Hynix Inc and Samsung Electronics saw their stock prices decline, adding to the downward pressure on South Korea’s KOSPI index.

 

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Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold (XAU/USD) dipped to a one-and-a-half-week low near $3,284 during the Asian trading session on Wednesday, weighed down by a stronger US Dollar and rising Treasury yields. Investors are increasingly convinced that recent US tariff hikes may fuel inflation, prompting the Federal Reserve to keep interest rates elevated for longer. 

The firmer Greenback, bolstered by expectations of prolonged Fed tightening and a robust June jobs report, has dulled the appeal of non-yielding assets like gold. Benchmark 10-year US bond yields also climbed, adding further pressure on the precious metal. 

Market participants remain cautious amid ongoing concerns about the economic fallout from Donald Trump’s aggressive tariff proposals. On Tuesday, the former US President threatened to impose duties of up to 50% on copper and 200% on foreign pharmaceuticals, unsettling global markets. However, gold’s traditional safe-haven demand has yet to see significant support in response. 

Traders are now eyeing the release of the FOMC meeting minutes later today, hoping for clues on the Fed’s rate path. Although a July rate cut appears off the table, markets are still pricing in up to 50 basis points of easing by year-end, likely beginning in October. 

Technically, a break below the $3,300 level, coupled with resistance at the 100-period SMA on the 4-hour chart, signals further downside. Momentum indicators suggest gold could slide towards the next support at $3,270, with a deeper drop towards $3,248–$3,247 not ruled out. 

On the upside, recovery attempts may face initial resistance near $3,310 and stronger barriers around $3,326 and $3,340. A decisive move above $3,360 could open the door to a short-term rebound toward the $3,400 mark. 

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Gold Price Climbs Steadily

Gold Price Climbs Steadily, Eyes Record High Amid Trade War Concerns

Gold (XAU/USD) extends its intraday rally, reaching the $2,880 region during the Asian session on Monday. The gains come in response to US President Donald Trump’s plan to impose new 25% tariffs on all steel and aluminum imports, reigniting fears of a global trade war and driving demand for the safe-haven precious metal. Additionally, concerns that Trump’s protectionist policies could fuel inflation further bolster gold’s appeal as a hedge against rising prices.

Gold Supported by Trade War Fears, But Fed Policy Remains a Concern

Despite strong upside momentum, gold’s gains may face limitations due to the resilient US Dollar (USD) and expectations that the Federal Reserve (Fed) might delay further rate cuts. The strong US employment data released on Friday, coupled with inflationary concerns, has reinforced speculation that the Fed will maintain a cautious stance.

Overbought conditions on the daily chart could also deter traders from initiating fresh bullish positions, especially in the absence of key US economic data early in the week.

Trump’s Tariff Announcement Sparks Market Uncertainty

On Sunday, Trump reaffirmed plans to impose 25% tariffs on all steel and aluminum imports into the US, adding that his administration would match tariff rates imposed by other countries. These announcements have further fueled uncertainty and strengthened gold’s safe-haven appeal.

Meanwhile, geopolitical tensions remain elevated. Russian Deputy Foreign Minister Galuzin stated there are no satisfactory proposals for Ukraine peace talks, dismissing Western statements as mere rhetoric. US Vice President JD Vance is reportedly heading to Germany this week to outline US policy proposals.

Fed Policymakers Express Caution Amid Economic Uncertainty

The latest US Nonfarm Payrolls (NFP) report showed 143K jobs were added in January, falling short of the 170K estimate but offset by an unexpected dip in the Unemployment Rate to 4.0%. While the report provides mixed signals, it has reinforced the belief that the Fed will remain cautious regarding further monetary easing.

Several Fed officials have weighed in on economic policy:

  • Minneapolis Fed President Neel Kashkari stated he would consider supporting further rate cuts if inflation data remains favorable and the labor market stays strong.
  • Chicago Fed President Austan Goolsbee noted that inconsistent US government policies create economic uncertainty, making it difficult to assess inflation trends.
  • Fed Governor Adriana Kugler acknowledged steady US economic growth but warned that progress toward the 2% inflation target remains uneven and slow.

What’s Next for Gold?

A stronger US Dollar could act as a headwind for gold prices, limiting aggressive bullish momentum. Traders will closely monitor Fed Chair Jerome Powell’s semi-annual congressional testimony and the upcoming US consumer inflation figures for further market direction.

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Gold Price Rally Holds Strong, But Overbought Conditions Raise Caution

Gold Price Bulls Hold Firm, But Overbought Conditions Suggest Caution

Gold (XAU/USD) continues its upward trajectory through the Asian session on Wednesday, reaching a fresh all-time high near $2,858. Concerns about the economic impact of US President Donald Trump’s trade tariffs continue to drive demand for the safe-haven metal. Furthermore, predictions that the Federal Reserve (Fed) would continue its easing cycle, backed by signs of deteriorating momentum in the US labor market, are fuelling demand for the non-yielding yellow metal.

 

Meanwhile, the US dollar (USD) remains under pressure near its weekly low, with rising expectations of further Fed policy easing, offering an extra lift to gold prices. However, Trump’s decision to suspend tariffs on Canada and Mexico has contributed to a risk-on mentality, which may restrict future gains for XAU/USD. Furthermore, gold is entering overbought territory on the daily chart, implying a short-term consolidation or minor retreat before the advance begins. Traders are now waiting for significant U.S. data releases, such as the ADP private-sector employment report and the ISM Services PMI, for new market signals.

Gold Bulls Retain Control Amid US-China Trade Tensions

Despite the positive risk tone, a further escalation in U.S.-China trade tensions continues to lend support to the upward momentum in gold. In response to President Trump’s latest tariffs, China has imposed targeted duties on US imports, and the threat of a trade war between the world’s two biggest economies has seen gold reach an all-time high on Wednesday.

On the macroeconomic front, the Job Openings and Labor Turnover Survey (JOLTS) released Tuesday revealed a decline in U.S. job openings, dropping to 7.6 million in December from a previous 8.09 million. The data signals a cooling labor market, increasing the likelihood of additional Fed rate cuts. This has kept USD bulls on the defensive and further strengthened XAU/USD.

Trump’s decision to postpone the application of a 25% tax on Canadian and Mexican imports by 30 days has revived hopes that a global trade war can be avoided. However, this has done little to undermine the positive enthusiasm toward gold.

Market players will be keenly monitoring Wednesday’s U.S. economic data, such as the ISM Services PMI and the ADP employment report, which may cause short-term changes in gold prices. However, Friday’s highly anticipated Nonfarm Payrolls (NFP) report continues to be the main focus. Furthermore, any fresh information about trade tariffs is probably going to cause financial markets to become more volatile.

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WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

West Texas Intermediate (WTI) crude oil prices fell from a one-week high on Tuesday, attracting sellers for the second straight session. The commodity trades at $72.00, barely above last week’s one-month low and close to the important 100-day Simple Moving Average (SMA) support. 

US Tariff Delay Weighs on Oil Prices

US President Donald Trump has announced a one-month suspension on newly imposed tariffs on imports from Canada and Mexico, easing worries about potential supply disruptions from two of the country’s main oil suppliers. This development put downward pressure on crude oil prices. Furthermore, fears of lower gasoline demand—driven by the larger economic impact of Trump’s trade policies—are contributing to gloomy sentiment in the oil market.

OPEC+ Stands Firm on Production Policy

Despite Trump’s calls for higher output to combat rising oil prices, the Organization of Petroleum Exporting Countries and its allies (OPEC+) have chosen to keep current production levels. This decision may give some support for crude oil prices, avoiding further losses in the near term.

Key Technical Levels to Watch

Traders will closely monitor the 100-day SMA, currently positioned near the $71.00 mark, which serves as a crucial support level. A decisive break below this threshold could trigger an extended pullback from the recent multi-month highs. Conversely, a bounce from this level may reinforce buying interest and help WTI recover from its recent slump.

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Gold Holds Below $2,800 Despite Intraday Recovery

Gold Price Trims Intraday Losses but Remains Below $2,800 Amid Stronger USD

The gold price (XAU/USD) recovers some of its losses following the strong Asian session sell-off but remains in negative territory, hovering around $2,785, down about 0.60% for the day. The recent rise in the US Dollar (USD), fueled by President Donald Trump’s decision to impose tariffs on Canada, Mexico, and China, has pushed the greenback closer to a two-year high, weighing on gold and dragging it away from its all-time high of $2,817, hit on Friday.

However, projections that the Federal Reserve (Fed) would lower interest rates twice by the end of 2025, combined with indications about probable economic disruptions from Trump’s trade policies, contribute to gold’s safe-haven appeal. The current risk-off mentality further shields the downside, so bearish traders should exercise caution ahead of this week’s key US macroeconomic data, which begins with today’s ISM Manufacturing PMI release.

Technical Outlook: Gold’s Uptrend Intact Despite Intraday Pullback

From a technical perspective, the intraday decline found support near the $2,772 resistance-turned-support level, which now serves as a pivotal point. A decisive break below this zone could trigger further selling pressure, exposing gold to the next key support levels:

 

  • $2,755 – Initial downside target
  • $2,740 – Intermediate support
  • $2,725-$2,720 – Strong demand zone
  • $2,700 – Psychological level, a break below which could accelerate losses

Conversely, immediate resistance is seen in the $2,790-$2,800 region, followed by the record high of $2,817. Notably, momentum indicators on the daily chart remain comfortably positive, indicating that gold has not yet reached overbought levels. This provides room for additional upward momentum, confirming the broader bullish trend that began with the December swing bottom.

If gold manages to sustain a move above $2,817, it could pave the way for fresh record highs, with bulls eyeing further gains amid ongoing market uncertainty.

Market Drivers to Watch

US Dollar Strength: The impact of Trump’s tariffs on global trade could continue supporting the USD, potentially weighing on gold.

Federal Reserve Policy: Expectations of rate cuts in 2025 remain a crucial factor for gold’s long-term trajectory.

US Economic Data: The upcoming ISM Manufacturing PMI and Nonfarm Payrolls (NFP) report later this week could trigger volatility in gold prices.

Risk Sentiment: Any escalation in geopolitical or economic tensions could further boost gold’s safe-haven demand.

Overall, while gold has retreated from its highs, the larger bullish trend remains intact, with technical signals suggesting further upward movement as long as critical support levels hold.

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WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

West Texas Intermediate (WTI) crude oil prices edge lower during Wednesday’s Asian session, erasing part of the previous day’s modest recovery from a nearly three-week low. The commodity trades near $71.00, down over 0.25% for the day, and remains vulnerable to further losses amid prevailing bearish sentiment.

Investor concerns persist over US President Donald Trump’s threat to impose trade tariffs on Canada, China, and Mexico by February 1, which could weigh on global fuel demand. Additionally, weak Chinese economic data adds to downward pressure. Official PMIs released on Monday highlighted continued weakness in the world’s second-largest economy and top crude importer, raising concerns over lower consumption.

Further pressure on oil prices comes from Trump’s energy policies, which include plans to ramp up US energy production and calls for the Organization of Petroleum Exporting Countries (OPEC) to increase output to drive prices lower.

With bearish fundamentals dominating, WTI remains susceptible to further downside risks in the near term.

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WTI Drops Toward

WTI Drops Toward $74.00 as Trump Pressures OPEC to Lower Oil Prices

West Texas Intermediate (WTI), the US crude oil benchmark, trades near $74.10 on Friday, continuing its downward trend after US President Donald Trump urged Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil prices.

Uncertainty surrounding Trump’s proposed tariffs and energy policies adds to the pressure on WTI. Speaking at the World Economic Forum in Davos on Thursday, Trump announced plans to request Saudi Arabia and OPEC to lower oil prices, saying, “I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil.”

Expectations of increased US production under Trump’s administration further weigh on oil prices. Earlier this week, Trump declared a national energy emergency, leveraging his authority to expedite the approval of oil, gas, and electricity projects that would typically require years of permitting.

Meanwhile, US crude inventories declined for the ninth consecutive week. The US Energy Information Administration (EIA) reported a drop of 1.017 million barrels in crude oil stockpiles for the week ending January 17, following a 1.962 million-barrel decline in the prior week. Market expectations had forecast a larger decrease of 2.1 million barrels.

Oil traders will closely monitor developments surrounding Trump’s energy policies and tariff announcements. Additionally, attention will shift to the preliminary US S&P Global Purchasing Managers Index (PMI) for January, set for release later on Friday. A weaker-than-expected reading could pressure the US Dollar (USD), potentially offering some support to the USD-denominated WTI price.

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EUR/USD Price Forecast

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

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

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

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

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

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EUR/USD Eases Near

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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China’s February New Bank Loans Decrease Beyond Expectations, Hitting Record Low Lending Growth

China’s February New Bank Loans Decrease Beyond Expectations, Hitting Record Low Lending Growth

In China, new bank lending in February experienced a sharper decline than anticipated from a record high in January, as the central bank continues efforts to stimulate the country’s sluggish economic growth and counter deflationary trends.

According to Reuters’ calculations based on People’s Bank of China data, Chinese banks issued 1.45 trillion yuan ($201.5 billion) in new yuan loans in February, a significant drop from January and below the expectations of analysts. Year-over-year growth of outstanding yuan loans slowed to a record low of 10.1%, compared to 10.4% in January, and fell short of the projected 10.2%.

The decrease in February’s lending was expected as Chinese banks typically issue more loans at the beginning of the year to attract high-quality customers and gain market share. Additionally, the Lunar New Year holiday, which occurred in February this year as opposed to late January in 2023, likely impacted lending activity.

Analysts had forecasted new yuan loans for February to decrease to 1.50 trillion yuan, down from 4.92 trillion yuan in the previous month and against 1.81 trillion yuan a year earlier.

ING analysts noted that aggregate financing and new loans were weaker than expected due to limited high-quality borrowing demand, indicating a modest immediate impact from the February cut in the required reserve ratio (RRR). Despite signals of further RRR cuts from the PBOC, a lack of high-quality borrowing demand might reduce the effectiveness of these measures in stimulating the economy.

In the first two months of 2024, Chinese banks made 6.37 trillion yuan in new yuan loans, according to central bank data. Household loans, mostly mortgages, contracted by 590.7 billion yuan in February, after an increase of 980.1 billion yuan in January. Corporate loans also decreased to 1.57 trillion yuan from 3.86 trillion yuan.

China’s economic growth target for 2024 is around 5%, a goal many analysts consider challenging without significant additional stimulus. Both consumer and corporate confidence have remained weak since a post-pandemic upsurge faded early in 2023.

PBOC Governor Pan Gongsheng stated there is still room for RRR cuts, following a substantial 50-basis point reduction effective from February 5. The central bank also announced a major cut in a key mortgage reference rate last month to support the property market and the overall economy.

Broad M2 money supply grew by 8.7% year-over-year, slightly below the 8.8% forecast but consistent with the pace in January.

Total social financing (TSF) growth, a broad measure of credit and liquidity in the economy, decelerated to 9.0% in February from a year earlier, down from 9.5% in January. With China setting the 2024 quota for local government special bond issuance at 3.9 trillion yuan and planning to issue 1 trillion yuan in special ultra-long-term treasury bonds, increased fiscal support is expected to boost government borrowing. However, weak private sector credit demand continues to pose significant challenges.

TSF, which includes various forms of financing beyond conventional bank lending, fell to 1.56 trillion yuan in February from 6.5 trillion yuan in January, falling short of the expected 2.22 trillion yuan.

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Major Currency Pairs Remain Stable Before Crucial US Economic Data Release

Major Currency Pairs Remain Stable Before Crucial US Economic Data Release

Throughout the latter half of the week, major currency pairs have been exhibiting fluctuations within narrow margins. Following a slight downturn on Wednesday, the US Dollar (USD) Index has maintained a subdued profile, hovering just below the 103.00 mark in Thursday’s European morning. Market participants are keenly awaiting the release of the US producer inflation and retail sales data for February, which are poised to offer fresh directional impetus.

Concurrently, the benchmark 10-year US Treasury bond yield has seen a resurgence, crossing back over the 4.2% threshold for the first time in more than a week. As of early Thursday, the yield steadies at around 4.2%, while US stock index futures exhibit a mixed performance, reflecting the volatility observed in Wednesday’s market.

This week, the US Dollar’s performance has varied across different major currencies. Notably, the Dollar recorded its strongest performance against the Japanese Yen. A recent report from Reuters highlighted that Japan’s largest industrial union, UA Zensen, announced record-high pay increases by 231 firms since 2013. In response, the USD/JPY pair has been oscillating within a tight range below the 148.00 level, closing almost unchanged on Wednesday.

The Australian Dollar (AUD/USD) experienced a modest upswing on Wednesday, breaking a two-day losing streak and remaining consolidated just above 0.6600 early Thursday.

Meanwhile, the Euro against the US Dollar (EUR/USD) gained some ground and ended Wednesday on a positive note. However, the pair began to retreat slightly after encountering resistance near 1.0950. In the absence of significant data releases from the Eurozone, the market’s focus will likely shift to any statements from European Central Bank (ECB) officials.

The British Pound (GBP/USD) is experiencing difficulty in establishing a clear direction, continuing its lateral movement around the 1.2800 mark in Thursday’s European trading session.

In the commodities sector, gold managed to recoup most of its losses from Tuesday during Wednesday’s session. However, it struggled to gain further upward momentum in the face of increasing US yields. At last observation, Gold (XAU/USD) was trading marginally lower, just below $2,170.

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

Australian Dollar Gains Support from Rising ASX 200 Despite Stronger US Dollar

Australian Dollar Gains Support from Rising ASX 200 Despite Stronger US Dollar

The Australian Dollar (AUD) is showing signs of consolidation, hinting at a potential recovery from its recent losses as of Wednesday. This comes amidst mixed market signals, including a positive performance from the S&P/ASX 200 Index and contrasting pressures from lower commodity prices.

For the second consecutive day, the S&P/ASX 200 Index has been on the rise, mirroring the overnight gains observed on Wall Street. This upward trend in the Australian stock market is a reflection of investor confidence and a generally positive economic outlook, which typically supports the strength of the national currency. However, the Australian Dollar faces countervailing pressures due to a decline in commodity prices. Australia, being a major exporter of natural resources, is particularly sensitive to fluctuations in these markets. Lower commodity prices can have a dampening effect on the AUD, as they may reduce the country’s trade revenue and economic prospects.

The current investor sentiment is cautiously optimistic, spurred by the release of encouraging Consumer Price Index (CPI) data from the United States (US). This optimism is, however, tempered by the recent performance of the AUD against the US Dollar (USD). On Tuesday, the AUD suffered losses against the USD, driven largely by a stronger-than-expected US CPI report. The report has diminished the likelihood of a near-term interest rate cut by the Federal Reserve (Fed), bolstering the Greenback. This strengthened USD poses potential challenges for the AUD/USD currency pair, as a robust US Dollar often means weaker performance for other major currencies.

Traders and investors are now likely to redirect their focus towards upcoming economic indicators from the US, particularly the Core Producer Price Index (PPI) and Retail Sales data, which are scheduled for release on Thursday. These data points are significant as they provide insights into the health of the US economy. The Core PPI offers a measure of the average changes in prices received by domestic producers for their output, excluding food and energy, which are more volatile. Retail Sales data, on the other hand, is a key indicator of consumer spending, which accounts for a substantial portion of overall economic activity in the US.

The outcomes of these reports could have significant implications for the Fed’s monetary policy decisions, and consequently, influence the AUD/USD exchange rate dynamics. As investors and market analysts anticipate these releases, there is an air of cautious observation in the market, with stakeholders keen to understand how these developments will shape the near-term trajectory of the Australian Dollar in relation to the US Dollar and the broader global economy.

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XRP Poised for Weekly Drop as Investors Pocket $370 Million in Profits

XRP Poised for Weekly Drop as Investors Pocket $370 Million in Profits

The price of XRP, a popular altcoin, experienced a downturn, reaching $0.62 on Friday. Despite this drop, it managed to stay above the crucial $0.60 mark, a psychologically significant level for traders and investors. This recent price movement has been primarily attributed to increased profit-taking activities among XRP holders. Heading towards the week’s close, XRP seems poised to end with a slight loss, marking a mild correction following its recent price surge. This shift in market behavior comes just ahead of a significant event – the anticipated March 22 deadline in the ongoing SEC vs. Ripple lawsuit, a key factor influencing the altcoin’s market dynamics.

Since the beginning of March 2024, XRP holders have reportedly cashed out profits amounting to around $370 million. This substantial withdrawal of profits is one of the primary drivers behind the recent price adjustments. On-chain data provided by Santiment has highlighted consistent profit-taking by XRP holders throughout the month, especially notable as the altcoin reached its monthly peak of $0.6685 on Tuesday.

Further analysis reveals an uptick in on-chain activity for XRP. Notable metrics showing this increase include a rise in Active Addresses and a surge in large transactions, specifically those valued at $100,000 or higher. Both these indicators have witnessed significant growth over the past week. Generally, such an increase in active addresses and high-value transactions can signal either bullish or bearish trends for an asset’s price. However, in the context of XRP, the spike in transactions following its recent price rally suggests that larger investors or ‘whales’ may be looking to capitalize on the higher rates to sell off their holdings and secure profits.

This pattern of whale behavior, coupled with the overarching climate of profit-taking among regular holders, paints a picture of a market in a state of flux. As XRP navigates through these changes, market watchers are closely monitoring the asset’s performance, particularly with the looming legal deadline in the SEC lawsuit which could have further implications for its price and investor sentiment.

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Currency Market Stabilizes Ahead of Powell Speech, Bitcoin Gains Momentum

Currency Market Stabilizes Ahead of Powell Speech, Bitcoin Gains Momentum

On Wednesday, the U.S. dollar remained stable as traders awaited Federal Reserve Chair Jerome Powell’s congressional testimony and upcoming key events, including a European Central Bank (ECB) rate decision and U.S. jobs data.

Bitcoin showed renewed momentum in the cryptocurrency market, though it did not surpass its recent record high achieved in a tumultuous overnight session.

The dollar’s movement was restricted, reflecting a slight decline after data revealed a minor slowdown in U.S. services industry growth last month. The upcoming February U.S. jobs report, due on Friday, is anticipated to significantly influence market expectations regarding interest rates, especially if employment figures exceed forecasts.

Powell’s testimony before Congress, focusing on the state of the U.S. economy, is expected to confirm the Fed’s intention to analyze more data before considering any rate cuts. The Fed chief might also discuss January’s strong core inflation, which analysts believe won’t alter the market’s expectation of a rate cut starting in June.

Currently, the market shows about a 60% likelihood of a June rate cut, as indicated by the CME FedWatch tool. The dollar index stood around 103.76, demonstrating its strength against six major currencies.

The euro remained stable at $1.0855, with the market anticipating the ECB’s rate decision. The bank is expected to maintain rates at 4% and provide updates on economic projections and hints about potential rate cuts.

Sterling was steady at $1.27050 ahead of the British budget announcement. Meanwhile, the Australian dollar recovered slightly, dismissing GDP data that showed only 0.2% growth in the fourth quarter and strengthened the case for rate cuts. It was last up 0.24% at $0.65195.

The New Zealand dollar also rose, gaining 0.16% to $0.60960, despite reaching a three-week low earlier. Conversely, the dollar fell 0.12% against the yen, settling at 149.86.

Attention is also focused on Bitcoin, which recently soared to a new high before sharply retreating. It was last up 4.11% at $65,921, fueled by investments in U.S. spot exchange-traded crypto products and anticipation of global interest rate reductions.

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Gold Price Climbs Steadily

Gold Price Stable Near High, Amid Fed Rate-Cut Speculation and Market Softness

Gold Price Stable Near High, Amid Fed Rate-Cut Speculation and Market Softness

During the early hours of Tuesday’s European trading session, the Gold price, measured in XAU/USD, maintained a steady range, reflecting a period of consolidation after its recent significant surge to a three-month high near the $2,120 mark, achieved the previous day. This stability in Gold’s price comes as traders display caution, choosing to wait for clearer indications regarding the Federal Reserve’s (Fed) future interest rate decisions before committing to new market positions. Consequently, all eyes are set on Fed Chair Jerome Powell’s two-day congressional testimony, which is slated to begin on Wednesday.

The week also brings a host of critical U.S. economic data releases coinciding with the start of a new month. Among these, the highly anticipated Nonfarm Payrolls (NFP) report, due for release on Friday, stands out as a key determinant of the U.S. Dollar’s (USD) trajectory and, by extension, its influence on the precious metal’s dynamics. The anticipation surrounding the Federal Reserve’s possible rate cuts starting in June has somewhat subdued USD bullish sentiment, indirectly bolstering support for the non-yielding Gold.

Adding to the mix is the slight weakening in global risk appetite, fueled by ongoing geopolitical tensions and growing concerns over an economic slowdown in China. These factors are contributing to the appeal of Gold, traditionally viewed as a safe-haven asset, under the XAU/USD symbol. Market participants are now keenly awaiting the U.S. ISM Services PMI data, which could offer short-term trading opportunities in the gold market.

Despite these varied influences, the fundamental landscape indicates a predominantly upward trajectory for Gold prices. The prevailing economic and geopolitical conditions suggest that any downward corrections in Gold’s price are likely to be short-lived and viewed as buying opportunities by investors. This perspective reinforces the notion that Gold remains a resilient and attractive investment amidst the current global economic uncertainties.

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Japanese Yen Dips Versus USD as BoJ Uncertainty Lingers; Tokyo CPI in Focus Tuesday

Japanese Yen Dips Versus USD as BoJ Uncertainty Lingers; Tokyo CPI in Focus Tuesday

The Japanese Yen (JPY) is experiencing renewed pressure after a slight recovery from its year-to-date low on Friday, as it enters the European trading session with a weaker stance against the US Dollar (USD). This development comes in the wake of remarks from the Bank of Japan (BoJ) Governor Kazuo Ueda, who emphasized on Friday that it was premature to declare a win over inflation concerns. This cautionary stance from the BoJ, coupled with signs of a technical recession in Japan, indicates a potential delay in the central bank’s shift towards tighter monetary policies. Such a delay is contributing to the diminishing strength of the JPY.

Amid these circumstances, there are reports suggesting that the Japanese government is contemplating officially declaring an end to the long-standing deflationary period. Market participants are also closely watching the potential impact of another significant wage increase in Japan. This increase could potentially initiate a wage-price spiral, compelling the BoJ to reconsider and possibly retract its current ultra-accommodative monetary policy. Despite these factors, a subdued tone in the equity markets is expected to moderate the losses for the JPY and restrain any significant appreciation of the USD/JPY pair, especially given the current muted demand for the USD.

Investors and traders are exhibiting caution, opting to refrain from making bold directional bets until the release of the Tokyo Consumer Price Index (CPI) report on Tuesday. This report is anticipated to provide valuable insights into Japan’s inflationary trends and could influence the monetary policy outlook of the BoJ. In addition to the Tokyo CPI, the global financial market is also bracing for a series of pivotal events later in the week. These include Federal Reserve Chair Jerome Powell’s congressional testimony on Wednesday and Thursday, as well as crucial US economic data releases at the beginning of the new month. Of particular interest will be the US Nonfarm Payrolls (NFP) report on Friday, a key indicator of the US labor market’s health.

The combination of these upcoming events and data releases will likely offer fresh perspectives on the Federal Reserve’s trajectory regarding interest rate adjustments. Such insights are expected to significantly impact the dynamics of the USD/JPY currency pair, as investors weigh the implications of monetary policy shifts in both the US and Japan.

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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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