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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Technical Outlook: USD/JPY Approaching Key Levels

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

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

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

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

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

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

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

Market Sentiment: Yen Traders Hesitate Amid Mixed Signals

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

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

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

Technical Outlook: USD/JPY Positive Bias Holds Above 148.00

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

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

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

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

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

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

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

Key Market Drivers: Gold Holds Steady Ahead of US PPI

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

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

Technical Outlook: Gold Poised for Further Gains

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

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

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

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

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

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

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

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

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

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

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

Safe-Haven Demand Supports Gold Amid Geopolitical Risks

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

Technical Outlook: Bearish Bias with Limited Upside

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

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

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

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

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

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

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

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

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

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

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

Technical Analysis: NZD/USD Faces Downward Pressure

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

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

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

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Australian Dollar Slips as China Holds Back on Major Stimulus Measures

Australian Dollar Slips as China Holds Back on Major Stimulus Measures

Australian Dollar Slips as China Holds Back on Major Stimulus Measures

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Technical Outlook: Bullish Momentum Builds 

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

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

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

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

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

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

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

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

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JPY Recovers Losses vs. USD, Bullish Outlook Intact

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Conversely, on the downside:-

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

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

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

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

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

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

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

AUD Pressured by Risk Aversion, Trump’s Tariff Threats

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

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

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

China’s Economic Slowdown Adds Pressure on AUD

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

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

Technical Outlook: AUD/USD Turns Bearish Below 0.6250

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

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

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US Dollar Surges as Trump Revives Tariff Threats

US Dollar Surges as Trump Revives Tariff Threats

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

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

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

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

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

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

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

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

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

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

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

Risk Aversion Rises Amid Trump’s Trade Tariff Push

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

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

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

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

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

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

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NZD/USD Struggles

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

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

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

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

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

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US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

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

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

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

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

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

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

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

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

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

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Cryptocurrency Move Back to Support the Pack to Level

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

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

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

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

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

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

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

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

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

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Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

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

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

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

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

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

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

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

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Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

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

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

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

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

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

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

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

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

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

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

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

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

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