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USD/CAD Holds Near One-Week Low

USD/CAD Drops Below 1.3650 Amid Weaker US Dollar

USD/CAD Drops Below 1.3650 Amid Weaker US Dollar

The USD/CAD currency pair experienced a dip to 1.3645 during the early European trading hours on Monday, marking its lowest point in nearly three weeks. This decline was primarily driven by a weakening US Dollar (USD), which continues to be the dominant force influencing the pair, especially in the absence of significant economic data releases from Canada.

As traders turn their attention to the week’s key events, the spotlight intensifies on the Federal Open Market Committee (FOMC) meeting, scheduled to conclude on Wednesday. This meeting is crucial as it could provide insights into future monetary policy directions. Although no rate changes are anticipated at this meeting, the tone adopted by Fed Chair Jerome Powell and other committee members is expected to lean towards the hawkish side. Powell has previously emphasized the need for the central bank to be more confident that inflation is consistently trending towards its 2% target before considering any rate cuts.

The probability of a rate cut by the Federal Reserve has seen a noticeable shift in investor expectations. Last week, the likelihood of a rate reduction in July was pegged at 50%, but this has now dropped to 25%. By September, however, markets have priced in nearly a 60% chance of a rate cut, as per the CME FedWatch tool.

Recent inflation data from the US further complicates the economic landscape. The Personal Consumption Expenditures (PCE) Price Index, a key measure of inflation, rose to 2.7% year-over-year (YoY) in March, up from 2.5% in February and surpassing market expectations of 2.6%. The Core PCE, which is closely watched by the Fed, increased to 2.8% YoY, also above the consensus of 2.6%.On the Canadian side, the policy stance of the Bank of Canada (BoC) is under scrutiny. 

Despite a recent split among its governing council members regarding the timing of interest rate reductions, there is a broad expectation that the BoC might begin to lower rates as early as June or July. Such a move could potentially place downward pressure on the Canadian Dollar (CAD), although this might be somewhat mitigated by Canada’s inflation rate, which at 2.9% in March, sits comfortably within the BoC’s target range of 1-3%.

Adding to the complexities is the performance of crude oil prices, which traditionally influence the CAD due to Canada’s status as the largest crude oil exporter to the United States. A decline in crude oil prices has been exerting additional selling pressure on the CAD, further influencing the USD/CAD trading dynamics.

As the week progresses, market participants will closely monitor these developments, particularly the outcomes of the FOMC meeting and subsequent US employment data, to gauge potential directions for the USD/CAD pair.

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EUR/USD Holds Near 1.0600 as US Dollar Weakens on Profit-Taking

EUR/JPY Rises Above 167.50 After BoJ Rate Decision

EUR/JPY Rises Above 167.50 After BoJ Rate Decision

The EUR/JPY currency pair soared to its highest level since 2008, reaching 167.20 during the Asian trading session on Friday. This significant rise is largely attributed to the depreciation of the Japanese Yen (JPY) following the Bank of Japan’s (BoJ) latest policy announcement.In its April meeting, the BoJ opted to maintain the key interest rate at 0%, aligning with market expectations. This decision came after a notable rate hike in March—the first since 2007—which marked the end of Japan’s negative interest rate policy initiated in 2016.

The BoJ also updated its economic forecasts, suggesting that inflation is expected to hover near its 2% target for the next three years. This outlook hints at the possibility of further rate increases later this year as the central bank remains committed to adjusting its monetary stance to sustain economic growth and price stability. 

Additionally, the BoJ reaffirmed its commitment to purchasing government bonds at a rate of approximately 6 trillion yen ($38.45 billion) per month, as set out in its March guidance.Following these developments, the JPY saw a decrease in demand compared to the Euro (EUR), as traders reacted to the central bank’s stance and the broader economic signals.

Simultaneously, data from Japan indicated a slowdown in inflationary pressures within Tokyo. April’s Consumer Price Index (CPI) for Tokyo showed a year-over-year increase of 1.8%, a decline from the previous 2.6% rise. The core CPI, excluding fresh food and energy, also increased by 1.8% year-over-year, falling short of the expected 2.7% and down from 2.9% in the prior period. 

These figures, representing a significant drop in inflation rates, also contributed to the weakening of the JPY as a traditionally safe-haven asset.Meanwhile, in Europe, discussions around monetary policy are also shaping market dynamics. European Central Bank (ECB) policymaker Joachim Nagel recently voiced support for a potential rate cut in June, although he clarified that such a move would not necessarily lead to a series of further cuts. Additionally, ECB official Fabio Panetta expressed that modest rate reductions could mitigate the risk of prolonged economic stagnation within the eurozone.

These contrasting monetary policies and economic indicators in Japan and Europe are pivotal in driving the EUR/JPY exchange rate, reflecting broader economic trends and central bank strategies in both regions. As such, investors and traders continue to monitor these developments closely, adjusting their strategies in response to shifts in central bank policies and macroeconomic data.

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AUD/JPY Rises on Strong Australian Consumer Inflation Data

AUD/JPY Rises on Strong Australian Consumer Inflation Data

The AUD/JPY currency pair continues its upward trajectory for the third consecutive day, recovering from initial losses earlier on Wednesday. This rally is supported by the release of unexpectedly strong Consumer Price Index (CPI) data by the Australian Bureau of Statistics (ABS), which significantly influences the Reserve Bank of Australia’s (RBA) monetary policy direction. The positive inflation figures have strengthened the Australian Dollar (AUD), boosting the AUD/JPY exchange rate.

The Australian Dollar’s rise is further propelled by a surge in risk appetite, reflected in the gains seen in the ASX 200 Index, particularly within the technology and healthcare sectors. This positive movement in Australian shares mirrors the upward trend on Wall Street, which has been buoyed by impressive corporate earnings reports that have generally uplifted market sentiment. Additionally, easing tensions in the Middle East have also contributed to the favorable market environment, creating a more robust appetite for riskier assets like the Australian Dollar.

On the other hand, the Japanese Yen (JPY) faces challenges amid a widening yield gap between Japan and other major economies. This disparity has prompted traders to engage in ‘carry trade’ activities, where they borrow yen at lower interest rates to invest in higher-yielding assets elsewhere. Despite the downward pressure on the Yen, there has been no intervention from Japanese authorities to shore up the currency. As the Bank of Japan (BoJ) begins its two-day policy meeting on Thursday, market participants speculate that Tokyo may delay any intervention in the currency market until at least the following week, as per insights from a Reuters report.

The AUD/JPY’s strength is a reflection of broader economic indicators and geopolitical developments, which continue to shape the dynamics between these two major currencies. As traders and investors keep a keen eye on the outcomes of the BoJ’s policy meeting and any potential moves by the Japanese authorities, the AUD/JPY cross remains a key barometer of shifting economic sentiments and policy decisions in the Asia-Pacific region. This scenario presents a complex interplay of economic data, central bank policies, and global market trends that drive the movements of these currencies on the forex market.

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USD/CHF Gains Momentum Above 0.8550 Ahead of FOMC Minutes

USD/CHF Rises Above 0.9100 on Hawkish Fed Comments

USD/CHF Rises Above 0.9100 on Hawkish Fed Comments

The USD/CHF currency pair exhibited strength on Monday morning during the early European trading hours, buoyed by a shift in market sentiment concerning the U.S. interest rate outlook. Market participants are now anticipating fewer rate cuts from the Federal Reserve (Fed) this year, with expectations consolidating around just one or two adjustments.

This week, financial markets are keenly awaiting the release of key U.S. economic indicators that could influence Fed policy decisions going forward. Notably, the preliminary U.S. Gross Domestic Product (GDP) figures for the first quarter (Q1) and the Personal Consumption Expenditures (PCE) Price Index will take center stage, providing fresh insights into the economic landscape.

Investors are recalibrating their interest rate forecasts in light of a resilient U.S. economy coupled with persistent inflation pressures. Despite inflation retreating from the peak levels seen during the pandemic, recent data suggest it remains above the Fed’s comfort zone. This has prompted several Fed officials to advocate for a cautious approach to monetary easing. They favor maintaining higher interest rates for an extended period than initially expected, a stance reinforced by a series of unexpectedly high inflation readings.

This “high-for-longer” interest rate scenario has been supportive for the U.S. dollar, lending upward momentum to the USD/CHF pair. The dollar’s ascent is further backed by remarks from key Fed figures. On Friday, Chicago Fed President Austan Goolsbee indicated a potential delay in rate cuts, citing a “stalled” progress in reducing inflation to desired levels. Similarly, Atlanta Fed President Raphael Bostic has suggested that rate cuts might not occur until the end of the year, aligning with a more conservative monetary policy approach.

Meanwhile, the Swiss economic outlook also remains in focus. Swiss National Bank (SNB) Chairman Thomas Jordan recently emphasized the importance of prioritizing price stability in monetary policy decisions. He highlighted challenges such as low economic growth and high debt levels in many countries, which could influence Switzerland’s financial strategy.

Additionally, geopolitical developments could impact the financial markets. Rising tensions in the Middle East, especially between Israel and Iran, are likely to increase demand for safe-haven assets such as the Swiss Franc. This could potentially limit the upward trajectory of the USD/CHF pair by bolstering the Franc’s appeal during times of uncertainty.

In summary, the USD/CHF pair is navigating a complex landscape shaped by shifting Fed expectations, critical economic releases, and international tensions, all of which could dictate its performance in the near term.

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NZD/USD

NZD/USD Stays Below 0.5900 Amid Risk-Off Mood, Rising US Dollar Demand

NZD/USD Stays Below 0.5900 Amid Risk-Off Mood, Rising US Dollar Demand

The NZD/USD currency pair faced downward pressure, trading around 0.5880 in the early European session on Friday. The pair’s decline was influenced by a risk-off sentiment fueled by escalating tensions between Israel and Iran, which boosted the US Dollar’s appeal as a safe-haven currency. Additionally, the US Dollar Index (DXY) saw an uptick, rising above 106.20 and nearing its highest level since November 2023.

Recent geopolitical developments have intensified concerns among investors. US officials disclosed that Israel had conducted military strikes against Iran and had informed the Biden administration of its plans to initiate these attacks within 24 to 48 hours from early Thursday.

Israeli authorities assured that the strikes would not target Iranian nuclear facilities, a detail confirmed by reports from CNN. These unfolding events in the Middle East are likely to increase market volatility as investors watch for potential impacts on global stability, which could further strengthen safe-haven currencies like the US Dollar.

Moreover, the possibility that the US Federal Reserve might postpone cuts to interest rates also lends support to the USD. Comments from several Fed officials highlighted ongoing high inflation in the US, suggesting that the central bank is looking for more decisive evidence of a downward inflation trajectory before making any moves to lower rates.

On the New Zealand side, economic data has shown a slight improvement, although challenges remain. Statistics New Zealand reported a decline in the country’s inflation, yet it continues to exceed the Reserve Bank of New Zealand’s (RBNZ) target range of 1 to 3%. This persistent high inflation might prompt the RBNZ to maintain elevated interest rates longer than some might anticipate, potentially supporting the NZD against further losses.

Investors are thus faced with a complex mix of factors: geopolitical risks enhancing the USD’s safe-haven status, tentative US monetary policy potentially delaying interest rate cuts, and New Zealand’s economic policy aimed at curbing inflation. These elements are crucial for market participants to consider as they evaluate the future movements of the NZD/USD pair amidst global financial uncertainty.

The situation remains fluid, with geopolitical tensions and economic indicators from both the US and New Zealand likely to drive significant market movements in the coming days. Investors will need to stay alert to the rapid developments in the Middle East and the economic updates from major central banks to navigate the volatile currency markets effectively.

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EUR/USD

EUR/USD Stays Above 1.0650 as US Dollar Faces Fresh Sell-Off

EUR/USD Stays Above 1.0650 as US Dollar Faces Fresh Sell-Off

The EUR/USD currency pair saw a modest increase, reaching 1.0672 in Thursday’s early Asian trading session. This rise was supported by a combination of renewed selling pressure on the US Dollar and a generally risk-acceptant market atmosphere. Key economic indicators set to be released later on Thursday include weekly Initial Jobless Claims, the Philadelphia Fed Manufacturing Index, the CB Leading Index, and Existing Home Sales. These data points are eagerly awaited by investors who are gauging the economic landscape.

Despite the upward movement of the EUR/USD, sentiments were tempered by comments from Federal Reserve Chairman Jerome Powell earlier in the week. Powell indicated that recent economic data do not provide much confidence that the Fed’s 2% inflation target will be met soon, suggesting a prolonged period of tight monetary policy which could strengthen the US Dollar in the short term. This hawkish outlook may limit the potential gains for the EUR/USD pair. Market predictions now reflect a nearly 71% expectation for a Fed rate cut in September, as per the CME FedWatch Tool.

Conversely, the European Central Bank (ECB) is showing signs of a more dovish policy stance. ECB policymaker Joachim Nagel hinted at a possible rate cut in June, although he acknowledged that inflation rates are still higher than desirable. Furthermore, ECB official Bostjan Vasle proposed that the deposit rate might be reduced to 3% by year’s end, down from the current record high of 4%, provided that the expected disinflation progresses. This potential easing in ECB policy could pressure the Euro and, by extension, the EUR/USD pair.

The differing directions in monetary policy between the Fed and ECB are primarily influencing the dynamics of the EUR/USD exchange. While the Fed’s cautious approach might bolster the US Dollar, the ECB’s potential rate cuts could weaken the Euro, creating a complex environment for the currency pair. Investors continue to watch these developments closely, as they could significantly impact the direction of EUR/USD moving forward. As the global economic scenario evolves, the interplay between these monetary policies will be crucial in shaping market movements.

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USD/CAD

USD/CAD Drops as US Dollar Weakens and Oil Prices Fall

USD/CAD Drops as US Dollar Weakens and Oil Prices Fall

The USD/CAD currency pair ended its five-day rally, settling at around 1.3820 during the Asian trading session on Wednesday. This shift was primarily due to a modest correction in the US Dollar (USD), which exerted downward pressure on the pair. Despite this, declining crude oil prices were seen as a potential threat to the Canadian Dollar (CAD), likely capping further losses in the USD/CAD pair.

Recent Canadian economic data has played a significant role in the forex dynamics. The latest inflation metrics could influence the Bank of Canada’s (BoC) monetary policy decisions, particularly the possibility of easing borrowing conditions at its upcoming June meeting. Notably, the core inflation rate, which is a critical indicator for the central bank, showed continued signs of moderation.

The Consumer Price Index (CPI) rose by 0.6% month-over-month in March, slightly below the anticipated 0.7%, but still above February’s 0.3% increase. Annually, CPI increased by 2.9%, marginally higher than the previous 2.8%. More critically, the year-over-year Core CPI, which excludes volatile items such as food and energy, increased by 2.0%, down from 2.1% in the prior measurement, indicating a potential easing of inflationary pressures. On a monthly basis, the Core CPI saw a 0.5% increase, significantly higher than the previous month’s 0.1% rise.

Meanwhile, in the United States, Federal Reserve (Fed) officials have maintained a hawkish tone which might support the USD in the short term. The US Dollar Index (DXY), after reaching a five-month peak at 106.51, experienced a slight retreat due to a decrease in US Treasury yields.

Fed Chairman Jerome Powell’s recent comments have underscored this perspective. During a speech on Tuesday, Powell acknowledged the robustness of the US economy but cautioned that progress towards the Fed’s 2% inflation target has been slower than expected this year. Powell’s statement indicated that more time and possibly more stringent monetary measures would be needed to stabilize inflation rates.

This hawkish outlook from the Fed contrasts with the potential dovish turn by the BoC, based on the Canadian inflation data. Such diverging paths could influence the USD/CAD pair significantly in the coming weeks. The interplay between US monetary policy and Canadian economic indicators will likely be a key driver of the pair’s movements as traders and investors recalibrate their expectations based on these developments.

In summary, while the USD/CAD has paused its recent uptrend due to a combination of factors including US Dollar corrections and weaker oil prices, the underlying economic indicators from both Canada and the United States will play crucial roles in determining its future direction. Investors should keep a close watch on upcoming economic releases and central bank statements to better navigate this volatile currency pair.

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

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

Gold prices (XAU/USD) continue to trade within a narrow range near the $2,740 level during early European trading on Tuesday. The market remains influenced by conflicting factors, leaving traders hesitant to make strong directional moves.

US President Donald Trump’s renewed trade tariff threats have sparked inflationary concerns, driving a modest rebound in US Treasury bond yields. This, in turn, supports a recovery in the US Dollar (USD) from its recent one-month low, creating downward pressure on gold prices.

However, fears of potential economic disruptions from Trump’s trade policies are providing support for the safe-haven asset, helping limit its downside. Market participants are also exercising caution ahead of the upcoming two-day Federal Open Market Committee (FOMC) meeting, while US macroeconomic data due later in the day could further influence market sentiment.

Key Developments Impacting Gold Prices

  1. Trade Tariff Concerns:
    President Trump recently announced emergency tariffs of 25% on Colombian imports, though implementation was delayed following an agreement on the acceptance of illegal migrants returned from the US. Trump also signaled impending tariffs on pharmaceuticals, computer chips, aluminum, copper, and potentially steel. These moves have heightened fears of inflation and pushed US Treasury bond yields higher, bolstering the USD and weighing on gold.
  2. Monetary Policy Speculation:
    Despite Trump’s tariff announcements, markets are pricing in two potential 25-basis-point interest rate cuts by the Federal Reserve this year. This expectation could cap bond yields and limit USD gains, offering some support to gold prices.
  3. Data and Events to Watch:
    Later on Tuesday, US economic data such as Durable Goods Orders, the Conference Board’s Consumer Confidence Index, and the Richmond Manufacturing Index may provide additional trading cues. The spotlight will then shift to Wednesday’s FOMC decision, which could significantly impact USD dynamics and set the tone for gold’s next directional move.

Technical Outlook: Resistance and Support Levels

Gold prices showed resilience on Monday, holding above the 23.6% Fibonacci retracement level of the December-January uptrend. Daily chart oscillators remain in positive territory, reinforcing the case for an upward bias.

  • Support Levels:
    Immediate support lies near $2,730, followed by the $2,725-2,750 zone. A break below these levels could push prices toward the 38.2% Fibonacci retracement level near $2,707-2,705, and further to the 50% level around $2,684.
  • Resistance Levels:
    The nearest resistance is at $2,755-2,757, with further hurdles at $2,772-2,773 and $2,786. A decisive break above $2,800 would signal renewed bullish momentum, potentially leading to a test of the all-time high near $2,790 and further gains.

Outlook for Gold

Gold prices remain range-bound as traders weigh opposing forces of inflationary concerns and safe-haven demand. A move above $2,755-2,757 is necessary for bulls to regain control in the short term, while a break below $2,730 would signal deeper corrections. With critical economic data and the FOMC decision on the horizon, gold’s next big move may hinge on shifting market dynamics in the coming days.

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Supermicro Stock Skyrockets 29% After Investigation Clears Fraud Allegations

Super Micro Computer (NASDAQ: SMCI), popularly known as Supermicro, saw its stock price soar by 29% on Monday, closing around $42 per share. This significant jump follows the conclusion of a governance investigation that found no evidence of fraud or misconduct, boosting investor confidence.

Investigation Findings: No Fraud or Misconduct

The investigation, initiated by a special committee in August, addressed concerns raised by Ernst & Young (EY), Supermicro’s former auditor, regarding governance, sales practices, and financial reporting. Key findings include:

  1. Management Integrity: The committee found no substantial concerns regarding the integrity of Supermicro’s senior management, audit committee, or financial reporting practices.
  2. Audit Independence: The audit committee demonstrated appropriate independence and oversight during financial reporting.
  3. Rehiring Practices: The company’s decision to rehire certain employees was deemed consistent with a commitment to legal compliance and accurate financial reporting.

EY’s concerns were ultimately found unsupported, with the committee emphasizing the accuracy of interim and final findings.

Governance Overhaul and Next Steps

To strengthen its governance, Supermicro has embraced the committee’s recommendations, including:

  • Leadership Appointments: Hiring a new Chief Financial Officer (CFO), appointing Kenneth Cheung as Chief Accounting Officer, and recruiting a Chief Compliance Officer and General Counsel.
  • Enhanced Oversight: Improving internal accounting and compliance systems, with better training, monitoring, and oversight practices.

The company has also filed a compliance plan with Nasdaq to catch up on overdue financial reports, ensuring continued listing.

Stock Performance: Recovery in Progress

Supermicro’s stock had plummeted by 85% in mid-November, hitting $17 per share, following its October 10-for-1 stock split and governance concerns. However, confidence rebounded after the investigation’s positive findings. Since November 15, the stock has surged back to $42, marking a 48% year-to-date increase.

With a price-to-earnings (P/E) ratio dropping from 79 in March to 16, Supermicro’s valuation is now drawing comparisons to AI-driven market leaders like NVIDIA. Its focus on AI-enabled servers for high-performance computing positions it as a key player in the tech sector.

Investor Considerations

While the governance investigation cleared Supermicro of fraud, investors are advised to exercise caution until the company releases its delayed financial reports. These filings will provide deeper insights into its financial health and help solidify its recovery. For now, Supermicro’s low valuation and strong earnings potential make it a compelling, albeit cautious, investment opportunity.

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Asian Stocks Decline on Geopolitical Tensions; Nikkei Falls on Inflation Data

Asian Stocks Drop Amid Geopolitical Tensions; Nikkei Slides on Strong Inflation Data

Asian Stocks Drop Amid Geopolitical Tensions; Nikkei Slides on Strong Inflation Data

Asian equities fell on Friday as geopolitical concerns and strong economic data from Japan weighed on sentiment. The escalation of the Russia-Ukraine conflict further dampened risk appetite, while China’s tech sector provided a rare bright spot amid easing regulatory fears.

Key Market Highlights

Geopolitical Tensions Weigh on Markets
Russia intensified its attacks on Ukraine, targeting energy infrastructure and escalating the conflict. President Vladimir Putin issued threats to strike decision-making centers in Kyiv with ballistic missiles, exacerbating global geopolitical uncertainty.

Broad Declines Across Asia

  • Thailand’s SET Index: Dropped 0.2%.
  • Indonesia’s Jakarta Composite: Declined 0.8%.
  • South Korea’s KOSPI: Fell nearly 2%, driven by a 1.8% drop in Samsung Electronics and a 0.7% decline in SK Hynix. Concerns over slowing economic growth deepened after data showed declines in industrial output, retail sales, and facility investment in October.
  • Australia’s ASX 200: Edged 0.3% lower.
  • Malaysia’s KLCI: Dipped 0.2%.

Japan’s Nikkei Slips Amid Yen Strength
Japan’s Nikkei 225 fell 0.5%, and the TOPIX index declined 0.3% as the yen strengthened to a one-month high against the U.S. dollar. Strong inflation data from Tokyo fueled speculation of a Bank of Japan (BOJ) rate hike in December.

  • Tokyo’s core consumer prices exceeded expectations in November, highlighting persistent inflationary pressures.
  • BOJ Governor Kazuo Ueda signaled plans to tighten monetary policy further, supported by a “virtuous cycle” of rising wages and steady inflation.

Chinese Tech Stocks Buck the Trend
Contrary to broader declines, Chinese equities rallied:

  • Shanghai Shenzhen CSI 300: Rose 1.6%.
  • Shanghai Composite: Gained 1.4%.
  • Hang Seng Index: Jumped 1.3%.

Reports suggested that the U.S. may impose less severe sanctions on China’s semiconductor industry than initially feared.

  • Semiconductor Manufacturing International Corp (SMIC) surged over 4%.
  • Hua Hong Semiconductor climbed 3.7%.

Investors are optimistic about Beijing’s recent stimulus measures, and a Reuters poll anticipates modest growth in China’s manufacturing Purchasing Managers’ Index for November, due Saturday.

Outlook

The Asia-Pacific region remains under pressure from geopolitical risks and mixed economic signals. Japan’s inflation dynamics could shift BOJ policy, while China’s tech rally might offer temporary relief amid broader concerns of an economic slowdown.

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WTI Steady at $69 Amid Geopolitical Risks and US Crude Inventory Build

WTI Steadies Near $69.00 Amid Mixed Signals from Geopolitical Risks and US Crude Inventory Build

WTI Steadies Near $69.00 Amid Mixed Signals from Geopolitical Risks and US Crude Inventory Build

West Texas Intermediate (WTI), the US benchmark for crude oil, is trading near $68.95 during Thursday’s session, maintaining a steady stance amid conflicting market drivers. A modest build in US crude inventories and weak Chinese demand weigh on prices, while escalating geopolitical tensions between Russia and Ukraine offer potential support.

US Crude Inventory Build Weighs on Prices
The Energy Information Administration (EIA) reported an increase of 0.545 million barrels in US crude stockpiles for the week ending November 15, slightly above market expectations of a 0.400 million barrel rise but significantly lower than the previous week’s 2.089 million barrel build. The smaller-than-expected inventory increase adds mild pressure to oil prices.

Weak Chinese Demand Adds Downside Pressure
China’s demand for crude oil continues to show weakness, dampening the outlook for global consumption. In October, China’s crude oil demand fell by 5.4% year-on-year. The International Energy Agency (IEA) projects demand growth in China to reach just 140,000 barrels per day (bpd) for 2024, a sharp decline compared to the 1.4 million bpd growth seen in 2023.

Geopolitical Risks Provide Support
Heightened geopolitical tensions involving major oil producers Russia and Ukraine are keeping supply-side concerns alive. This week, Russia accused Ukraine of targeting a facility in the Bryansk region with ATACMS missiles, prompting Russian President Vladimir Putin to lower the threshold for a potential nuclear response. Such risks could disrupt oil supplies, offering a counterbalance to bearish demand factors.

John Kilduff, a partner at Again Capital, highlighted, “These risks to supply are definitely keeping the support here and offsetting to a degree concerns around the global demand outlook.”

Outlook
WTI prices remain at the mercy of mixed signals, with inventory builds and sluggish Chinese demand capping gains while geopolitical risks lend underlying support. Traders will look toward further updates on geopolitical developments and upcoming economic data to gauge the balance between supply and demand factors in the oil market.

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Gold Prices Under Pressure as Stronger USD Weighs Ahead of Fed Decision

Gold Prices Remain Under Pressure as Stronger USD Weighs Ahead of Fed Decision

Gold Prices Remain Under Pressure as Stronger USD Weighs Ahead of Fed Decision

Gold (XAU/USD) continues to trade lower for the second consecutive session on Thursday, impacted by a stronger U.S. Dollar following former President Donald Trump’s victory in the recent U.S. election. The dollar-denominated precious metal is seeing diminished safe-haven appeal as market optimism increases, supported by clearer political outcomes.

Investor focus is now on the upcoming U.S. Federal Reserve decision, with markets largely anticipating a 25 basis-point rate cut. If realized, this could offer some support for Gold, as lower interest rates tend to reduce the opportunity cost of holding non-yielding assets like precious metals. The CME FedWatch Tool currently indicates a 98.1% likelihood of this modest rate reduction.

Market Dynamics: Gold Struggles Amid Higher Yields and “Trump Trades”

Non-yielding Gold faces additional pressure from surging U.S. Treasury yields, with the 2-year and 10-year bond yields hitting 4.31% and 4.47%, respectively, their highest levels since July. Furthermore, the prospect of increased inflation due to Trump’s policy stance, which includes higher trade tariffs and fiscal spending, could prompt some investors to seek Gold as a long-term inflation hedge.

Trump’s proposed economic policies—such as imposing tariffs, expanding the fiscal deficit, and cutting taxes—might conflict with the Federal Reserve’s inflation control goals, likely resulting in a slower pace of monetary easing.

Gold prices have been relatively unaffected by ongoing geopolitical tensions, including Iran’s warning of potential retaliation against Israel’s recent actions.

Additionally, mixed U.S. economic data from this week’s ISM and PMI releases reflect a resilient services sector. The ISM Services PMI rose to 56.0 in October from 54.9 in September, exceeding forecasts, while the S&P Global Services PMI reported a slight dip, coming in at 55.0.

Technical Outlook: Key Support and Resistance Levels for Gold

Gold currently trades near $2,650 per ounce, with technical indicators suggesting a continuation of bearish momentum. On the daily chart, Gold remains below the nine- and 14-day Exponential Moving Averages (EMAs), and the 14-day Relative Strength Index (RSI) remains under 50, both indicating a bearish trend.

On the downside, the next support level sits around $2,603.53, representing a three-week low. A break below this level could push Gold toward the critical $2,500 mark.

Conversely, immediate resistance is found near the psychological level of $2,700, with further resistance at the nine-day EMA of $2,711.40. A breakout above this zone could position Gold to retest its recent high of $2,790.11 reached on October 31.

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Gold Price Holds Steady Near Record High, Awaits US Macro Data for Direction

Gold Price Holds Steady Near Record High, Awaits US Macro Data for Direction

Gold price (XAU/USD) remains robust as it approaches the European session on Tuesday, trading just above the $2,750 mark and close to last week’s all-time high. Geopolitical risks and political uncertainties in the US continue to boost demand for the safe-haven metal. Additionally, lower US Treasury yields and cautious market sentiment lend further support to gold.

At the same time, expectations for smaller Federal Reserve (Fed) rate cuts are expected to support US bond yields, which could help the US Dollar (USD) recover some of the previous session’s losses. This, in turn, tempers new bullish momentum in non-yielding gold as investors await key US economic data releases this week, likely to influence the Fed’s rate outlook and provide new direction for XAU/USD.

Market Movers: Gold Supported by Mixed Factors, USD Buying Limits Gains

The retreat in US Treasury yields led to an intraday pullback in the USD from recent highs, encouraging some dip-buying near $2,725 early this week. Recent positive US data dampened expectations for substantial Fed rate cuts, potentially bolstering bond yields amid concerns about deficit spending after the November 5 election. With the US election drawing near, markets face additional uncertainty as Vice President Kamala Harris and Republican candidate Donald Trump engage in a close race for the presidency. Moreover, heightened tensions in the Middle East have added to market caution, with the US warning Iran of potential consequences if it continues retaliatory strikes.

In the broader market, China reported an 11.18% decline in gold consumption year-over-year for the first three quarters, citing high prices as a dampening factor on jewelry demand. Investors now eye the upcoming US Consumer Confidence Index and Job Openings and Labor Turnover Survey (JOLTS) for insight into the Fed’s rate plans and USD dynamics, likely to affect short-term gold price movements.

Technical Outlook: Gold Awaits Breakout for Bulls to Regain Control

On the technical front, a sustained move above the $2,750 resistance could trigger further buying interest, pushing gold prices past the all-time high around $2,759 and towards the four-month-old ascending trend-line resistance at $2,770–2,775. A continued rally could eventually target the psychological $2,800 level.

However, the Relative Strength Index (RSI) on the daily chart is approaching overbought levels, signaling potential caution for bulls. A short-term consolidation or minor pullback could provide a better entry for additional upside.

If a corrective decline occurs, support could emerge near the $2,725 level, followed by $2,715—the lower boundary of a recent trading range. A decisive break below this range might prompt technical selling, potentially leading gold prices below $2,700 and toward the $2,675 and $2,657–2,655 support areas.

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WTI Struggles Below $70 Amid Demand Concerns and USD Strength

WTI Struggles Below $70 Amid Demand Concerns and USD Strength

WTI Struggles Below $70 Amid Demand Concerns and USD Strength

West Texas Intermediate (WTI) crude oil prices are hovering just below the $70.00 mark during Tuesday’s Asian session, remaining in a tight range around $69.70-$69.75. The commodity has struggled to build on the previous day’s modest gains and stays near the three-week low it touched last Friday. WTI seems vulnerable to continuing its recent downtrend, which has persisted for over two weeks.

The brief positive reaction to the People’s Bank of China’s (PBOC) interest rate cut on Monday was short-lived, as concerns about slowing demand, particularly from China, continued to weigh on oil prices. Both OPEC and the International Energy Agency (IEA) reduced their global demand forecasts last month due to economic challenges in China, the world’s largest oil importer. IEA chief Fatih Birol further fueled these concerns, warning that China’s economic weakness could dampen global oil demand for years to come.

Adding to WTI’s challenges, the US Dollar (USD) has surged to its highest level since early August, driven by expectations of more cautious monetary easing from the Federal Reserve (Fed). A stronger USD tends to weigh on oil prices by making crude more expensive for holders of other currencies.

However, the potential for further escalation in the Middle East conflict, which could disrupt oil supplies from the region, provides some support to WTI prices. This geopolitical risk cautions against overly bearish positions, despite the recent sharp drop from the nearly two-month high of $78.00 reached on October 8.

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WTI Dips Below $79 After Hawkish Fed Comments

WTI Dips Below $79 After Hawkish Fed Comments

WTI Dips Below $79 After Hawkish Fed Comments

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Gold Prices Rise as Investors Anticipate US Data,

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

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

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

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

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

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WTI Falls to Seven-Week Low

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

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

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

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

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

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

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Gold Price Maintains Minor Gains Amid Uncertainty

Gold Price Sees Modest Losses, Downside Limited Before FOMC

Gold Price Sees Modest Losses, Downside Limited Before FOMC

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

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

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

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

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

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

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

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

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

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

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

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USD/CHF Gains Momentum Above 0.8550 Ahead of FOMC Minutes

USD/CHF Extends Decline Near 0.8400 as Investors Await US GDP Data

USD/CHF Extends Decline Near 0.8400 as Investors Await US GDP Data

The USD/CHF pair is experiencing selling pressure, trading around 0.8405 during early European hours on Thursday. Dovish comments from US Federal Reserve (Fed) officials continue to weigh on the US Dollar (USD).

At the Fed’s annual Jackson Hole retreat last week, Fed Chair Jerome Powell indicated that “the time has come” for the central bank to consider cutting interest rates. According to the CME FedWatch Tool, markets are fully pricing in a 25 basis point (bps) rate cut for September, with a 36.5% chance of a deeper cut.

Additionally, San Francisco Fed President Mary Daly mentioned on Monday that “the direction of change is down, and the time to adjust is now,” reinforcing expectations for a rate cut in September. Minneapolis Fed President Neel Kashkari also suggested it might be appropriate to start discussing rate cuts as early as September, citing a weakening labor market.

Geopolitical tensions in the Middle East and ongoing economic uncertainties could increase safe-haven demand, benefiting currencies like the Swiss Franc (CHF) against the USD. In a recent escalation, Israel’s military conducted raids and airstrikes across the occupied West Bank, resulting in at least 11 Palestinian deaths, as reported by CNN.

On the economic front, Switzerland’s ZEW Survey Expectations, released by the Centre for European Economic Research on Wednesday, dropped to -3.4% in August from 9.4% previously. Looking ahead, the Swiss KOF Leading Indicator for August is set to be published on Friday. In the US, the second estimate of the Q2 GDP Annualized figure, scheduled for Thursday, is expected to show a 2.8% expansion.

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USD/CAD Rebounds Above 1.3450 as Risk Sentiment

USD/CAD Rebounds Above 1.3450 as Risk Sentiment Worsens Ahead of Fedspeak

USD/CAD Rebounds Above 1.3450 as Risk Sentiment Worsens Ahead of Fedspeak

The USD/CAD pair has regained some ground, trading around 1.3460 during the early European session on Wednesday, breaking a three-day losing streak. This recovery is supported by a modest bounce-back in the US Dollar (USD). Market participants will look for further direction from speeches by Federal Reserve officials Christopher Waller and Raphael Bostic later today.

The cautious sentiment ahead of Nvidia’s earnings report and the upcoming Fedspeak may increase demand for safe-haven assets, benefiting the USD. However, expectations that the Federal Reserve will lower interest rates in September could limit the pair’s upward movement. Markets have already priced in a 25 basis point rate cut for September, with a 34.5% probability of a deeper cut, according to the CME FedWatch Tool. Traders anticipate a total of 100 basis points in Fed easing this year.

San Francisco Fed President Mary Daly suggested on Monday that it might be appropriate for the Fed to start cutting interest rates. Her views align with Fed Chair Jerome Powell’s remarks at the Jackson Hole symposium, where he expressed growing confidence that inflation is heading towards the 2% target, indicating it may be time for policy adjustments.

On the Canadian Dollar (CAD) side, economists predict that the Bank of Canada (BoC) will cut interest rates for a third consecutive time at its September 4 policy meeting, according to a Bloomberg survey. This expectation could weigh on the CAD against the USD. Additionally, lower crude oil prices, which affect the commodity-linked CAD, could further pressure the Canadian Dollar, as Canada is a leading oil exporter to the United States.

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Australian Dollar Advances on Improved Risk Sentiment

Australian Dollar Advances on Improved Risk Sentiment

Australian Dollar Advances on Improved Risk Sentiment

The Australian Dollar (AUD) has moved higher against the US Dollar (USD) on Tuesday, hovering just below the seven-month high of 0.6798 reached on Monday. The downside for the AUD/USD pair appears limited as traders anticipate diverging policy outlooks between the Reserve Bank of Australia (RBA) and the US Federal Reserve (Fed). Market participants are also awaiting the release of the Monthly Consumer Price Index on Wednesday, which could provide further insight into the RBA’s policy direction.

Recent minutes from the RBA meeting revealed that board members believe a rate cut is unlikely in the near term. RBA Governor Michele Bullock reiterated that the central bank remains prepared to raise rates if necessary to combat inflation.

In contrast, Fed Chairman Jerome Powell, speaking at the Jackson Hole Symposium, stated, “The time has come for policy to adjust,” although he did not specify when rate cuts would begin or their potential magnitude. The CME FedWatch Tool indicates that markets are fully pricing in at least a 25 basis point rate cut by the Fed at its September meeting.

Daily Market Movers: Australian Dollar Gains Amid Hawkish RBA

San Francisco Fed President Mary Daly commented on Monday that it is likely time to start cutting interest rates, potentially beginning with a quarter-percentage point reduction. Daly emphasized that if inflation continues to slow and the labor market remains stable, it would make sense to adjust policy gradually.

US economic data showed that Durable Goods Orders surged by 9.9% month-over-month in July, recovering from a 6.9% drop in June and far exceeding the expected 4.0% increase. This marks the largest gain since May 2020.

Philadelphia Fed President Patrick Harker highlighted the importance of a gradual reduction in interest rates, while Chicago Fed President Austan Goolsbee noted that monetary policy is currently highly restrictive, with the Fed now focusing on achieving its employment objectives.

The US Composite PMI slipped slightly to 54.1 in August, down from 54.3 in July, but remained above market expectations of 53.5, indicating ongoing business activity expansion for the 19th consecutive month.

In Australia, the Judo Bank Composite Purchasing Managers Index (PMI) increased to 51.4 in August from 49.9 in July, marking the fastest expansion in three months. This growth was driven by a stronger services sector, even as manufacturing contracted more sharply.

Minutes from the Federal Open Market Committee’s (FOMC) July policy meeting revealed that most Fed officials support cutting the benchmark interest rate in September if inflation continues to moderate.

Tuesday’s RBA Minutes indicated that board members had considered a rate hike earlier in the month but ultimately decided to keep rates unchanged to balance the risks. The consensus among RBA members is that a rate cut is unlikely soon.

Technical Analysis: AUD/USD Remains Below 0.6800

The AUD/USD pair is trading around 0.6770 on Tuesday. Technical analysis of the daily chart shows the pair has breached below its ascending channel, suggesting a potential weakening of the bullish trend. However, the 14-day Relative Strength Index (RSI) remains below the 70 mark, indicating ongoing bullish momentum.

Resistance for the AUD/USD pair is seen at the seven-month high of 0.6798, followed by the lower boundary of the ascending channel at 0.6800. A break above these levels could open the door for further gains toward the upper boundary of the channel at around 0.6940.

On the downside, the pair may find support near the nine-day Exponential Moving Average (EMA) at 0.6726. A break below this level could weaken the bullish bias and pressure the pair toward the 0.6575 support level, followed by additional support at 0.6470.

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USD/CAD Weakens Near

USD/CAD Weakens Near 1.3500 as Fed’s Powell Signals Possible Interest Rate Cut in September

USD/CAD Weakens Near 1.3500 as Fed’s Powell Signals Possible Interest Rate Cut in September

The USD/CAD pair is experiencing selling pressure around the 1.3510 level on Monday during Asian trading hours. The US Dollar (USD) is edging lower after Federal Reserve (Fed) Chair Jerome Powell indicated that the time for interest rate cuts may be approaching, starting this September.

Several Fed officials have delivered dovish comments, reinforcing the likelihood of rate cuts in September, which has put broad pressure on the Greenback in recent sessions. Powell stated, “The time has come for policy to adjust,” and added, “The direction is clear, but the timing and pace of rate cuts will depend on incoming data, the evolving economic outlook, and the balance of risks.”

Additionally, Philadelphia Fed President Patrick Harker has expressed support for two or three rate cuts in 2024, provided there are no significant changes in US economic data. Chicago Fed President Austan Goolsbee mentioned that monetary policy is currently at its most restrictive level, with the Fed now focusing on its employment mandate. According to the CME FedWatch Tool, traders have fully priced in a 25 basis point (bps) rate cut for September, with the odds for a deeper cut rising to 36.5%, up from 24% last week.

In Canada, data from Statistics Canada revealed that Retail Sales fell by 0.3% month-on-month in June, following a 0.8% decline in the previous reading, aligning with market expectations. However, Retail Sales excluding automobiles unexpectedly increased by 0.3% month-on-month in June, surpassing the anticipated 0.2% decline. Market participants are now focusing on the Canadian Gross Domestic Product (GDP) data for the second quarter, due on Friday. The Bank of Canada (BoC) is anticipated to implement an additional 75 basis points (bps) cut by the end of the year.

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BoE Governor Bailey’s Speech

EUR/GBP Slips Below 0.8500 Ahead of BoE Governor Bailey’s Speech

EUR/GBP Slips Below 0.8500 Ahead of BoE Governor Bailey’s Speech

The EUR/GBP pair continues its downward trend, trading near 0.8485 during early European trading hours on Friday. The decrease in expectations for a Bank of England (BoE) interest rate cut in September, following positive Purchasing Managers’ Index (PMI) data, is supporting the Pound Sterling (GBP) and pushing the pair lower. Attention is now on BoE Governor Andrew Bailey’s speech, scheduled for later today.

Recent data showed robust business activity in the UK, marking the strongest growth in four months, coupled with easing price pressures, according to a Thursday survey. S&P Global’s Composite PMI climbed to 53.4 in August from 52.8 in July, slightly exceeding the forecast of 52.9. This upbeat report has reduced market expectations for a BoE rate cut next month, thereby strengthening the GBP against the Euro (EUR). Following the PMI release, financial markets are now pricing in less than a 30% chance of a BoE rate cut in September.

On the Euro side, the European Central Bank (ECB) held interest rates steady at its July meeting but hinted at the possibility of rate cuts later in the year, as indicated in the minutes released on Thursday. Investors are currently betting on a 90% chance of a 25 basis points cut in the deposit rate to 3.5% in September, with expectations of at least one more cut before year-end. This outlook is weighing on the Euro.

Adding to the dovish tone, ECB Governing Council member Martins Kazaks expressed readiness to discuss another rate cut at the upcoming September meeting, citing confidence that inflation will return to the 2% target, despite concerns over the economic outlook.

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EUR/USD Slips Below 1.1150 as Eurozone and US PMI Data Loom

EUR/USD Slips Below 1.1150 as Eurozone and US PMI Data Loom

EUR/USD Slips Below 1.1150 as Eurozone and US PMI Data Loom

The EUR/USD pair is trading with mild losses around 1.1145, breaking its four-day winning streak during the Asian session on Thursday. Despite the current dip, downside risks for the pair appear limited due to strong expectations that the US Federal Reserve (Fed) may begin easing its monetary policy in September. Investors are now turning their attention to the preliminary August Purchasing Managers’ Index (PMI) data from both the Eurozone and the US, scheduled for release later today.

Minutes from the Fed’s July 30-31 meeting, released on Wednesday, indicated that most Fed officials anticipated a potential interest rate cut in September, provided that inflation continues to cool. Atlanta Fed President Raphael Bostic noted, “We might need to shift our policy stance sooner than I would have thought before.”

Fed Chair Jerome Powell’s upcoming speech at Jackson Hole is highly anticipated, with markets expecting him to signal that inflation is on track toward the Fed’s 2% target. Any dovish comments from Powell or other Fed officials could weigh on the US Dollar, potentially providing support for EUR/USD.

On the European side, European Central Bank (ECB) policymakers have refrained from committing to a specific timeline for interest rate cuts, citing expectations that inflation in the Eurozone will remain near current levels through the end of the year. However, ECB policymaker Olli Rehn suggested on Monday that the ECB might need to lower interest rates again in September due to ongoing economic weakness. The markets have already priced in nearly a 90% probability of a 25 basis point cut in the deposit rate to 3.5% in September, with expectations of at least one more reduction before the year concludes.

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EUR/USD Holds Firm Above 1.1100 with Fed Minutes Awaited

EUR/USD Holds Firm Above 1.1100 with Fed Minutes Awaited

EUR/USD Holds Firm Above 1.1100 with Fed Minutes Awaited

EUR/USD is hovering around 1.1130 during Wednesday’s North American session, marking its highest level this year. The currency pair is eyeing a revisit to the 2024 high of 1.1140 as the US Dollar (USD) weakens amid growing optimism for Federal Reserve (Fed) interest rate cuts in September.

The US Dollar Index (DXY), which measures the Greenback’s value against six major currencies, is near a fresh seven-month low, around 101.30.

With inflationary pressures in the United States (US) easing and the labor market cooling, investors are increasingly convinced that the Fed will cut interest rates in September. However, there’s uncertainty about whether this reduction will be significant or gradual. The CME FedWatch tool indicates a 30.5% chance of a 50-basis-point (bps) rate cut, with the remaining majority expecting a 25-bps reduction.

Later today, attention will shift to the Federal Open Market Committee (FOMC) minutes from the July policy meeting, set to be released at 18:00 GMT. During the July meeting, the Fed maintained its key borrowing rates at 5.25%-5.50% for the eighth consecutive time, acknowledging increased risks to both inflation and employment.

This week’s spotlight will be on Fed Chair Jerome Powell’s speech at the Jackson Hole (JH) Symposium on Friday, which is expected to provide new insights into the potential rate cuts in September. In a press conference following July’s policy announcement, Powell stated, “If we were to see inflation moving down more or less in line with expectations, growth remains reasonably strong, and the labor market remains consistent with current conditions, then I think a rate cut could be on the table at the September meeting.”

Market Overview: EUR/USD Steady Ahead of Jackson Hole Symposium

EUR/USD remains above the 1.1100 level, with the Euro (EUR) gaining strength against the US Dollar. The Euro is performing well against its peers, driven by expectations that the European Central Bank (ECB) will take a cautious approach to cutting interest rates.

ECB policymakers have avoided committing to a predetermined path for rate cuts, as inflation in the Eurozone is expected to remain above target throughout the year. Despite this, market participants anticipate another ECB rate cut in September, amid economic challenges in Germany, the Eurozone’s largest economy.

Slower wage growth in Germany during Q2 has provided some relief to ECB officials, boosting optimism for a rate cut in September. Data from the Bundesbank, Germany’s central bank, showed that Negotiated Wages grew by 3.1%, significantly slower than the pace in Q1.

Looking ahead, investors will focus on preliminary Eurozone HCOB Purchasing Managers’ Index (PMI) data for August and Q2 Negotiated Wage Rates, both due on Thursday. The Composite PMI is expected to show minimal improvement, reflecting a continued downturn in manufacturing. A lower reading for the Q2 Negotiated Wage Rate, following a 4.69% increase in Q1, would likely be welcomed by ECB officials.

Technical Analysis: EUR/USD Builds Momentum for a Push to 1.1140

EUR/USD is approaching its year-to-date high of 1.1140 as it gains strength ahead of the FOMC minutes release. The currency pair has gained momentum after breaking out of a channel formation on the daily chart. The upward-sloping 20-day and 50-day Exponential Moving Averages (EMAs), positioned near 1.0970 and 1.0900 respectively, suggest a strong bullish trend.

The 14-day Relative Strength Index (RSI) is in the bullish range of 60.00-80.00, indicating strong upward momentum.

If the Euro bulls successfully breach the December 28, 2023, high of 1.1140, the next target will be the psychological resistance at 1.1200. On the downside, the low from August 15 at 1.0950 will serve as critical support.

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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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