AUD/USD Price Analysis – Sep 17, 2024
Daily Price Outlook
The AUD/USD pair extended its gains for the second consecutive day on Tuesday, reaching a one-and-a-half-week high of around 0.6758 during the European session. This marks the fourth straight day of positive movement for the pair. Investors are now focusing on the Federal Open Market Committee (FOMC) meeting scheduled for Wednesday to gauge future direction.
Meanwhile, the US dollar has been consolidating its recent losses, falling to its lowest level since July 2023, partly due to speculation of a substantial 50 basis point rate cut by the Federal Reserve.
Concurrently, the Reserve Bank of Australia's (RBA) hawkish stance and a generally positive sentiment in equity markets are bolstering the Australian dollar. These factors are supporting the AUD/USD pair, showcasing the Aussie’s strength amidst evolving market conditions.
Impact of US Dollar Weakness and Chinese Economic Concerns on AUD/USD Pair
On the US front, the Dollar has been struggling, remaining near its yearly low and contributing to caution among traders. The Federal Reserve’s anticipated significant rate cut has influenced this weakness. According to the CME Group’s FedWatch Tool, there's now over a 60% chance that the Fed will cut rates by 50 basis points on Wednesday.
This expectation has pushed the yield on 2-year US government bonds to its lowest level since September 2022, while the 10-year Treasury yield has weakened to levels not seen since June 2023.
Despite stronger-than-expected data from the New York Empire State Manufacturing Index for September, the Dollar has struggled to gain support. Additionally, weak economic reports from China over the weekend point to ongoing challenges in reaching its 5% GDP growth target for 2024.
This economic uncertainty affects the Australian Dollar, which is sensitive to China’s economic performance. Traders are cautious, waiting for the Fed’s decision on Wednesday and further guidance on future rate cuts, which will be crucial in shaping market expectations.
The uncertainty surrounding the US Dollar and weaker economic reports from China contribute to caution in the AUD/USD pair. Traders are closely watching the Fed's decision on rate cuts, which could influence the pair’s direction based on shifting expectations.
AUD/USD - Technical Analysis
The Australian dollar (AUD/USD) is trading at $0.67478, down 0.13% for the day, as the pair continues to consolidate just above its pivot point of $0.6734.
The 4-hour chart shows a steady upward trend, although the pair has recently encountered minor selling pressure. The immediate resistance at $0.6767 is the key level for bulls to watch.
A break above this could open the door to further upside, with the next resistance levels at $0.6793 and $0.6816, where buyers may face greater opposition.
On the downside, immediate support sits at $0.6698, where the 50-day EMA aligns, providing a solid floor for the pair. If prices break below this level, the next support levels lie at $0.6667 and $0.6635, suggesting potential for a deeper pullback.
The RSI is currently at 64, indicating mild bullish momentum, but edging closer to overbought territory. This suggests that while the trend remains positive, there may be a short-term pause before the next significant move.
A break above $0.67336 offers a potential buying opportunity, with targets around $0.67832. Traders should maintain a stop loss near $0.66962 to manage risk in case of a reversal.
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- GOLD Price Analysis – Sep 17, 2024
GOLD Price Analysis – Sep 16, 2024
Daily Price Outlook
Gold prices (XAU/USD) have maintained their upward trend and remained well bid around the 2,588 level. However, they initially eased slightly from their fresh record highs in the early European session.
This dip appears to be driven by some profit-taking, as the generally upbeat market sentiment reduces the appeal of safe-haven assets like gold. Despite this pullback, the decline is expected to be limited.
Investors are eyeing a potential shift in Federal Reserve policy, with recent US inflation data suggesting the Fed might implement a larger-than-expected 50 basis point rate cut later this week.
This dovish outlook has kept both US Treasury bond yields and the US Dollar near their 2024 lows, offering continued support for gold.
Gold Prices Boosted by Weak US Dollar, Low Bond Yields, and Anticipated Fed Rate Cuts
On the US front, the broad-based US Dollar and Treasury bond yields are hovering near their lowest levels of 2024. This situation is giving gold prices a boost, as gold becomes more appealing when returns from other investments, like bonds, are low.
Traders are growing more confident about the Federal Reserve implementing a larger-than-usual rate cut, with many expecting a 50 basis point reduction later this week. This optimism follows last week's data, which indicated that US inflation is cooling off.
According to the CME Group's FedWatch Tool, there is now over a 50% chance that the Federal Reserve will lower rates by 50 basis points.
This speculation is fueled by weaker-than-expected US inflation data, including softer Consumer Price Index (CPI) and Producer Price Index (PPI) reports.
With inflationary pressures easing, investors expect the Fed to take a more aggressive stance on cutting borrowing costs, further supporting gold prices as other investments become less appealing.
Consequently, the news of potential Fed rate cuts and easing inflation supports higher gold prices, as lower bond yields and a weaker US Dollar make the non-yielding metal more attractive to investors seeking a safe-haven asset amidst lower returns on other investments.
Geopolitical Tensions and Central Bank Meetings Drive Gold Prices Amid Middle East Conflict
On the geopolitical front, the ongoing Russia-Ukraine war, along with rising tensions in the Middle East, continues to support gold prices (XAU/USD). Investors are turning to the safe-haven metal amid fears of further escalation in these regions.
However, bullish traders remain cautious and are holding off on placing new bets ahead of the highly-anticipated Federal Reserve's monetary policy meeting on Wednesday, which could provide clearer market direction.
In addition to the Fed, investors are closely watching the Bank of England and Bank of Japan policy meetings this week, which could add volatility to the markets and influence gold prices.
In Gaza, Israeli forces continue their deadly assaults, with recent strikes killing over 20 people, including children.
However, the conflict has intensified, with Yemen’s Houthis launching missiles deep into Israel. Israeli Prime Minister Netanyahu has vowed retaliation against the group, further escalating tensions in the region.
So far, the Israel-Gaza war has claimed over 41,000 lives in Gaza, with more than 200 hostages taken by Hamas during the October 7 attacks.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,582.26, up 0.28% as it approaches key resistance levels. On the 4-hour chart, the immediate resistance stands at $2,602.35, followed by stronger resistance at $2,608.62.
A break above these levels could pave the way for further upside momentum. However, with the RSI at 70, the asset is entering overbought territory, signaling a potential pullback.
Immediate support sits at $2,568.01, with additional support levels at $2,557.04 and $2,546.20. The 50-day EMA is at $2,539.86, providing a critical technical floor for the bullish trend.
A break below the pivot point of $2,567.53 could see gold retracing toward lower support levels, but overall sentiment remains cautiously bullish as long as prices remain above the pivot.
Traders should note the elevated RSI, which may trigger short-term profit-taking. However, the broader trend continues to favor the upside, with buyers likely targeting a sustained break above $2,602.35.
A cautious entry strategy suggests selling below $2,585, with take-profit targets near $2,567 and a stop-loss around $2,594 to protect against volatility.
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GBP/USD Price Analysis – Sep 16, 2024
EUR/USD Price Analysis – Sep 16, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair continued its bullish trend, moving higher to around 1.1126 and reaching an intraday peak of 1.1130.
The upward momentum was largely driven by mounting expectations that the US Federal Reserve will aggressively ease its policies, putting significant bearish pressure on the US dollar.
The US Dollar Index (DXY) slid sharply to around 100.70, reflecting the Greenback’s weakening position.
Meanwhile, the Euro's performance against its major peers remained mixed due to uncertainty surrounding the European Central Bank’s (ECB) future interest rate cuts.
The ECB's recent decision to lower the Deposit Facility Rate by 25 basis points to 3.50% provided some support, but the lack of a clear rate-cut trajectory kept the market cautious. Despite this, the bearish sentiment surrounding the USD helped sustain the EUR/USD gains.
EUR/USD Rises on Fed Rate Cut Speculation and Weaker US Dollar
On the US front, the EUR/USD pair has been climbing due to growing speculation that the Federal Reserve (Fed) will aggressively ease its policies on Wednesday.
This anticipation has weakened the US Dollar (USD), causing the US Dollar Index (DXY) to drop sharply to around 100.70.
According to the CME FedWatch tool, the chance of the Fed cutting interest rates by 50 basis points (bps) to a range of 4.75%-5.00% this September has surged to 61%, up from 30% a week ago.
This shift follows the release of August’s Producer Price Index (PPI), which showed a lower-than-expected increase in inflation, rising just 1.7% year-over-year compared to estimates of 1.8% and July’s 2.1%.
Therefore, the increased speculation about the Fed's aggressive rate cut and the weaker US Dollar have bolstered the EUR/USD pair, driving it higher.
The DXY's sharp decline and the lower-than-expected PPI data have further supported the Euro’s strength.
EUR/USD Strengthens Amid Weaker US Dollar and ECB Rate Cut Uncertainty
On the EUR front, the EUR/USD pair is rising due to the weakening US Dollar. However, the Euro (EUR) has shown mixed performance against other major currencies because of uncertainty over the European Central Bank’s (ECB) future interest rate cuts.
The ECB recently lowered its Deposit Facility Rate by 25 basis points to 3.50% but has not provided a clear path for future rate cuts. ECB President Christine Lagarde mentioned that future rate decisions will depend on inflation trends and economic data.
Despite this, recent comments from ECB officials suggest that the fight against Eurozone inflation might be nearing its end. ECB Governing Council member Joachim Nagel expressed optimism, stating that inflation is expected to hit the 2% target by the end of next year.
However, financial markets anticipate one more rate cut in the final quarter of the year due to concerns about the German economy.
Analysts at Nomura highlighted structural issues such as Germany’s exposure to global manufacturing cycles, energy price impacts, and demographic challenges that could contribute to a recession.
Therefore, the EUR/USD pair benefits from the weakening US Dollar and the ECB's recent rate cut.
Despite mixed Euro performance due to uncertain future ECB actions, the anticipation of one more rate cut and optimism about inflation targeting 2% support the Euro's strength.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.11187, up 0.21% as the pair continues its upward trajectory, reflecting strong bullish sentiment. Immediate resistance lies at $1.1125, followed by $1.1151 and $1.1185.
The pair remains supported above its pivot point at $1.1101, signaling potential for further upside. However, with the Relative Strength Index (RSI) reaching 73, overbought conditions suggest that a short-term pullback may be on the horizon.
On the downside, immediate support is seen at $1.1072, followed by $1.1049 and deeper support at $1.1017. The 50-day Exponential Moving Average (EMA) at $1.1050 provides a key level of support, reinforcing the overall bullish trend.
A sustained move above $1.1125 would solidify the upward momentum, though traders should be cautious given the elevated RSI.
Traders are looking to enter above $1.11126 with a take-profit target at $1.11446, positioning the pair for a test of higher resistance.
However, a break below support at $1.1072 would signal a potential reversal and invite selling pressure toward the $1.1049 and $1.1017 levels. While the broader trend remains bullish, traders should monitor overbought signals and key support levels closely.
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GBP/USD Price Analysis – Sep 16, 2024
GBP/USD Price Analysis – Sep 16, 2024
Daily Price Outlook
During Monday's European session, the GBP/USD pair continued its strong upward movement, climbing to around 1.3180 and peaking at 1.3195.
This rise was mainly fueled by the belief that the Bank of England (BoE) will approach policy changes more cautiously compared to the Federal Reserve (Fed).
Meanwhile, the USD Index (DXY), which measures the Greenback against a basket of major currencies, remains close to its year-to-date low from August.
Traders are speculating on a substantial rate cut by the Fed later this week, possibly reducing borrowing costs by 50 basis points. This expectation comes in response to recent data showing a slowdown in US inflation.
As a result, US Treasury bond yields are hovering near their 2024 lows, putting additional pressure on the USD. In the meantime, the overall positive market sentiment is also diminishing the Greenback's appeal as a safe-haven asset.
US Dollar Weakness and Fed Rate Cut Expectations Boost GBP/USD
On the US front, the broad-based US dollar, tracked by the USD Index (DXY), is struggling near its lowest point of the year, set in August. This decline comes amid expectations that the Federal Reserve (Fed) will ease its monetary policy more aggressively.
Traders are now betting that the Fed will cut interest rates by 50 basis points (bps) later this week, up from 30% a week ago to 61% according to the CME FedWatch tool.
This shift is driven by recent data showing a slowdown in US inflation, with the Producer Price Index (PPI) for August revealing a faster-than-expected drop in producer prices to 1.7%.
The US dollar's decline and expectations of a significant Fed rate cut have bolstered the GBP/USD pair, as investors anticipate that the Bank of England will be less aggressive in easing policies compared to the Fed, strengthening the British Pound.
Impact of Bank of England and UK Economic Data on GBP/USD
On the other hand, the British Pound (GBP) is benefiting from the expectation that the Bank of England (BoE) will ease its policies less aggressively than the Federal Reserve (Fed) in the coming year.
This helps boost the GBP as the Fed is expected to cut rates more sharply. However, there are still concerns in the market about the BoE's actions.
Recent data showed a slowdown in UK wage growth and flat GDP for two consecutive months in July, leading to some uncertainty about the GBP's future strength.
Despite the positive sentiment around the GBP, these economic indicators might temper enthusiasm among investors.
They could be cautious about making strong bets on the GBP/USD pair due to these signs of economic weakness.
As a result, while the GBP gains from expectations of less aggressive BoE policy easing, the recent UK data might make traders hesitant to take bold positions in the GBP/USD currency pair.
Therefore, the GBP/USD pair benefits from expectations of a less aggressive BoE policy easing compared to the Fed.
However, concerns over recent UK economic data, including slow wage growth and flat GDP, may temper investor enthusiasm and limit GBP gains.
GBP/USD - Technical Analysis
GBP/USD is trading at $1.31716, up 0.24%, maintaining a bullish tone as it approaches key resistance levels. Immediate resistance is found at $1.3209, followed by $1.3238 and $1.3260.
The bullish sentiment remains intact as the price stays above the pivot point of $1.3158, signaling potential for further gains.
However, the Relative Strength Index (RSI) is currently at 67, approaching overbought territory, suggesting a possible near-term pullback.
On the downside, immediate support lies at $1.3102, followed by $1.3077 and $1.3051. The 50-day EMA at $1.3094 is providing crucial support, reinforcing the broader bullish momentum.
A break below this level could indicate a reversal, but as long as the price holds above $1.3158, traders may remain optimistic about further gains.
The overall outlook for GBP/USD stays positive, with buyers looking for an entry point above $1.31585. Targeting take-profit levels near $1.32059, traders may expect the pair to test higher resistance levels.
However, with the RSI nearing overbought conditions, caution is warranted as profit-taking could emerge, potentially sending the pair back to test support levels.
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GOLD Price Analysis – Sep 16, 2024
GOLD Price Analysis – Sep 13, 2024
Daily Price Outlook
Gold prices (XAU/USD) climbed to a new all-time high of around $2,570 during Friday’s European trading session. However, this impressive rally followed a softer-than-expected US Producer Price Index (PPI) report from Thursday, which suggested inflation might be easing.
Investors are now anticipating a significant interest rate cut by the Federal Reserve in September, boosting gold’s appeal.
Meanwhile, US Treasury yields have remained near their 2024 lows, and the US dollar fell to a new weekly low, both factors making gold even more attractive as a safe-haven asset.
Beyond the economic factors, ongoing geopolitical tensions in the Middle East and the persistent Russia-Ukraine conflict are also pushing investors toward gold, reinforcing its status as a safe-haven asset.
Looking ahead, traders are staying on edge as they anticipate next week’s crucial central bank decisions.
The Federal Reserve’s policy announcement on Wednesday and the Bank of Japan’s meeting on Friday are key events that are adding to the current market uncertainty and caution.
Gold Prices Soar to New Highs Amid Weakening Dollar and Easing Inflation
On the US economic front, the broad-based US Dollar has weakened following Thursday’s Producer Price Index (PPI) report, which showed inflation cooling down more than expected.
This has fueled speculation that the Federal Reserve might implement a more substantial interest rate cut in September.
Notably, the CME Group’s FedWatch Tool now suggests there’s a 40% chance the Federal Reserve could cut interest rates by 50 basis points at its next meeting, adding to the growing excitement around gold. As a result, US Treasury bond yields have fallen to near their 2024 lows.
On the data front, the annual headline PPI rose by 1.7%, just below the expected 1.8%, while the core PPI, which excludes food and energy, increased by 2.4%, missing the anticipated 2.5%.
These figures suggest that inflationary pressures in the US are easing. Additionally, the US Department of Labor reported that 230,000 people filed for unemployment benefits for the first time in the week ending September 7.
This number is slightly higher than recent figures, hinting at a mild softening in the labor market.
Therefore, the weakening US Dollar and falling Treasury yields, combined with easing inflation and potential Fed rate cuts, have bolstered gold's appeal. As a result, gold prices have surged to a new all-time high, driven by heightened investor interest.
Rising Middle East Tensions Drive Investors to Gold as Safe-Haven Asset
On the geopolitical front, a series of Israeli attacks on homes in Gaza’s Nuseirat refugee camp has resulted in the deaths of six Palestinians, raising the day’s toll to at least 40, according to medical sources.
This escalation follows recent Israeli airstrikes that killed at least 18 people, including six UNRWA staff, at a shelter for displaced civilians in Nuseirat. The UNRWA chief has condemned the ongoing violence, calling it “endless and senseless.”
Meanwhile, the USS Theodore Roosevelt is returning home, ending the Pentagon’s rare decision to keep two US Navy aircraft carriers in the Middle East amidst concerns of escalating conflict.
Therefore, the escalating violence and geopolitical uncertainty in the Middle East, including Israeli attacks and the return of the USS Theodore Roosevelt, have heightened market concerns. This turmoil is likely to drive more investors toward gold as a safe-haven asset.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,568.68, marking a modest increase of 0.35% as it hovers near critical technical levels.
The precious metal has sustained bullish momentum in recent sessions, but key indicators suggest a potential pause or slight retracement.
With the Relative Strength Index (RSI) elevated at 76, gold is in overbought territory, signaling the possibility of a near-term pullback.
The pivot point stands at $2,564.78, acting as a critical juncture for future price movements. Immediate resistance is seen at $2,574.26, followed by $2,585.24 and $2,596.51, which could cap further upside if the momentum falters.
Should prices break through these resistance levels, the bullish trend may continue, potentially targeting new highs.
However, the downside risk is notable given the elevated RSI and potential for profit-taking. Immediate support sits at $2,557.04, with subsequent support levels at $2,546.20 and $2,536.91.
A failure to hold these levels could shift the sentiment towards a more bearish outlook, especially as the 50-day Exponential Moving Average (EMA) at $2,511.14 provides a more medium-term support foundation.
From a technical perspective, a sell strategy below $2,575 appears prudent, with a take-profit target of $2,557. This setup aligns with the overbought conditions and the possibility of a near-term correction.
A stop-loss at $2,585 is recommended to manage risk, should bullish momentum persist unexpectedly.
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S&P500 (SPX) Price Analysis – Sep 13, 2024
EUR/USD Price Analysis – Sep 13, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward momentum, climbing to 1.1101. This rise is attributed to the Euro (EUR) gaining strength after the European Central Bank (ECB) announced its monetary policy on Thursday.
ECB policymaker Madis Muller’s remarks about growing confidence in inflation control and a moderate economic recovery could boost the EUR. However, concerns over services inflation and temporary inflation spikes may temper gains.
Moreover, the US Dollar (USD) weakened following weaker-than-expected US Producer Price Index (PPI) data for August.
US Dollar Weakens as Fed Rate Cut Speculation Grows, Boosting EUR/USD
On the US front, the broad-based US dollar is facing significant selling pressure. This shift comes as market speculation grows that the Federal Reserve (Fed) might cut interest rates by 50 basis points (bps) at its upcoming meeting on Wednesday.
The probability of this rate cut, as shown by the CME FedWatch tool, has surged to 43% from just 14% following the release of the US Producer Price Index (PPI) data.
On the data front, the PPI report showed that producer inflation increased by 1.7% year-over-year in August, falling short of the expected 1.8% and down from 2.1% in July. Core producer inflation, excluding food and energy prices, rose by 2.4%, missing the forecast of 2.5%.
This slower rate of price increase suggests weak consumer spending, which often boosts expectations that the Fed might lower interest rates.
Hence, the weaker-than-expected US PPI data and growing speculation of a Fed rate cut have led to a stronger Euro (EUR) against the US Dollar (USD). This boosts the EUR/USD pair as traders anticipate a more dovish Fed stance.
EUR/USD Rebounds Despite Weaker Eurozone Industrial Data and Cautious ECB Rate Adjustments
On the EUR front, the Eurozone's industrial sector faced a deeper decline in July, with industrial output dropping by 0.3% month-over-month, matching expectations but worse than June's flat reading. Annually, industrial production fell by 2.2%, an improvement from June's 4.1% drop but still worse than the forecasted 2.7%.
Despite these weak numbers, ECB policymaker Madis Muller expressed growing confidence that inflation is heading in the right direction, though he noted concerns about services inflation and expected a moderate recovery for the Eurozone economy.
Following the European Central Bank (ECB) meeting, the EUR/USD pair rebounded to 1.1100. The ECB cut the deposit facility rate by 25 basis points to 3.50% and adjusted other rates to help support lending and the economy. Although the ECB lowered its growth forecasts for the Eurozone, it expects inflation to pick up again in the fourth quarter of 2024. The ECB did not signal another rate cut for its October meeting, maintaining a cautious approach based on economic data.
Consequently, the weaker Eurozone industrial data and ECB’s cautious rate adjustments initially pressured the EUR/USD pair. However, the EUR/USD rebounded to 1.1100, as the ECB's rate cut and inflation expectations supported the Euro, countering the negative impact.
EUR/USD- Technical Analysis
The EUR/USD pair is trading at $1.10846, up a modest 0.10%, as the currency pair hovers around key technical levels. The recent uptick in price signals bullish momentum, but caution is warranted with the Relative Strength Index (RSI) sitting at 63, nearing overbought territory.
This suggests potential limited upside in the near term, with market participants eyeing key resistance and support levels for further guidance.
The pivot point is located at $1.1090, which serves as a critical reference for intraday price movements. Immediate resistance is seen at $1.1121, followed by stronger levels at $1.1151 and $1.1185.
A decisive break above these levels could signal the continuation of the bullish trend, potentially triggering further gains toward the $1.12 mark. However, with the RSI approaching higher levels, the currency may face headwinds if buying pressure wanes.
On the downside, immediate support rests at $1.1066, with further support at $1.1041 and $1.1006.
The 50-day Exponential Moving Average (EMA), currently at $1.1058, aligns closely with the support zone, acting as a key level to watch for a potential retracement. Any sustained break below these levels could shift market sentiment towards a bearish outlook.
Strategically, selling below $1.1090 may be favorable, with a target of $1.1040. A stop-loss at $1.1120 would provide appropriate risk management, particularly as the pair tests its immediate resistance levels.
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S&P500 (SPX) Price Analysis – Sep 13, 2024
S&P500 (SPX) Price Analysis – Sep 13, 2024
Daily Price Outlook
The S&P 500 has recently made a strong comeback, reaching an intra-day high of 5,600.71, after a period of volatility and economic uncertainty. Over the past 24 hours, the index has gained considerable ground, thanks to several key factors that have boosted investor confidence and helped stabilize the market.
The major contributor to this positive shift is the rebound in technology stocks. After facing months of pressure and volatility, the tech sector has started to recover, driving much of the recent gains in the S&P 500.
However, the broader economic picture has also brightened, with recent data pointing to signs of stabilization. Positive trends in consumer spending and business investment have helped lift the overall outlook, making investors more optimistic about the economy’s direction.
This renewed confidence has fueled the S&P 500’s upward momentum, as more investors are willing to invest, believing the worst of the uncertainty may be behind us.
Economic Data and Fed Speculation Drive Market Movements and S&P 500 Performance
On the US economic front, the US Dollar has weakened following Thursday’s Producer Price Index (PPI) report, which revealed that inflation is cooling more than anticipated. This has led to speculation that the Federal Reserve might opt for a more substantial interest rate cut in September.
Investors are closely watching for any hints of a shift in the Fed's stance, hoping it could provide further support to the economy.
According to the CME Group’s FedWatch Tool, there's now a 40% chance that the Fed could cut rates by 50 basis points at its next meeting. This possibility has generated excitement in the markets.
Additionally, US Treasury bond yields have fallen to near their lowest levels of 2024, creating a more favorable environment for the S&P 500. As a result, investors are feeling more optimistic, seeing potential for further gains in both the stock market and precious metals.
On the data side, the latest numbers show that inflation in the US is easing. The annual headline Producer Price Index (PPI) rose by 1.7%, slightly below the expected 1.8%, while the core PPI, excluding food and energy, increased by 2.4%, just missing the 2.5% forecast. This cooling inflation suggests some relief from rising prices.
Meanwhile, the US Department of Labor reported that 230,000 people filed for unemployment benefits in the week ending September 7, a bit higher than recent numbers, signaling a mild softening in the labor market. These factors are shaping investor sentiment and influencing the S&P 500’s performance.
Impact of the US Presidential Debate on the S&P 500 Index
On the flip side, the recent US presidential debate between former President Donald Trump and Democratic nominee Kamala Harris has introduced some political uncertainty into the markets. With the debate highlighting key issues such as the economy, inflation, and future economic policies, it's made a significant impact on investor sentiment.
This political drama has contributed to the ongoing volatility of the S&P 500, as market participants keep a close eye on any developments that could sway future policy directions.
Kamala Harris’s win in the debate, as highlighted by a CNN poll, has shifted focus to potential changes if the Democratic ticket takes the upcoming election.
Investors are now closely scrutinizing the candidates' policy proposals, especially those related to taxation, regulation, and economic stimulus.
Harris’s strong performance has brought to light the possibility of significant policy shifts, which could have broad implications for various sectors and the overall market.
As a result, market participants are paying increased attention to how these potential changes might shape the economic landscape.
S&P 500 - Technical Analysis
The S&P 500 (SPX) is trading at $5,595.75, up 0.75% for the day, signaling continued bullish momentum as investors shrug off broader economic concerns. While the index has posted steady gains, technical indicators suggest a cautious yet optimistic outlook for the near term.
The Relative Strength Index (RSI) currently reads 59, reflecting neutral territory and leaving room for additional upside without entering overbought conditions.
The pivot point is positioned at $5,645.33, a critical level that traders will closely monitor for direction. Immediate resistance lies slightly below this at $5,641.79, with subsequent resistance levels at $5,699.82 and $5,766.23.
A break above these levels could pave the way for further gains, potentially pushing the index to fresh highs as bullish sentiment continues to support the market.
On the downside, immediate support is found at $5,518.48, with additional support at $5,441.61 and $5,381.03.
While the 50-day Exponential Moving Average (EMA) is trending upward, currently at $5,524.79, this provides a solid floor for the index should the market face any short-term volatility or profit-taking.
From a tactical perspective, a buy entry above $5,572 could be a strategic move, targeting the pivot point at $5,645.33 for profit-taking. A stop-loss at $5,520 offers prudent risk management, as it coincides closely with both the 50-day EMA and nearby support levels.
In summary, while bullish momentum remains intact, cautious optimism is warranted given the proximity to key resistance levels and neutral RSI readings.
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GOLD Price Analysis – Sep 13, 2024
GOLD Price Analysis – Sep 12, 2024
Daily Price Outlook
Gold (XAU/USD) has eased back slightly from its intraday highs but remains solidly above the crucial $2,500 mark in early European trading on Thursday.
The latest US Consumer Price Index (CPI) report, released on Wednesday, highlighted persistent underlying inflation, which has dampened expectations for a major interest rate cut by the Federal Reserve.
This has led to a modest increase in US Treasury bond yields and boosted the US Dollar, pushing it closer to its monthly peak. Consequently, the stronger dollar is putting some pressure on the gold market, which, unlike currencies, doesn’t offer any yield.
In addition to this, the positive sentiment in the equity markets is also weighing on gold, as investors shift away from safe-haven assets.
has further limited gold's gains. However, the downside for XAU/USD seems to be somewhat protected.
There’s increasing confidence that the Federal Reserve might start cutting rates in September, with expectations of a 25 basis point reduction at each of the remaining meetings this year.
This anticipation, combined with gold’s recent stable range, suggests that traders should be cautious about predicting its short-term direction. All eyes are now on the upcoming US Producer Price Index (PPI) report for new insights.
Impact of US CPI Report on Gold Prices and Market Expectations
On the US front, the broad-based US Dollar strengthened after the latest Consumer Price Index (CPI) report led investors to lower expectations of a larger 50-basis-point interest rate cut by the Federal Reserve next week.
The CME Group's FedWatch tool now shows an 87% chance of a smaller 25 bps rate cut at the next Fed meeting on September 17-18, compared to 71% before the CPI data.
Therefore, the reduced likelihood of a more aggressive policy easing has pushed up US Treasury bond yields and the US Dollar, which could weigh on gold prices since gold does not offer yields.
Traders are now awaiting the release of the US Producer Price Index (PPI) for further direction. However, any market reaction may be limited as the Fed is expected to start cutting rates soon.
The US Bureau of Labor Statistics reported that the headline CPI rose by 0.2% in August, with the yearly rate slowing more than expected from 2.9% to 2.5%, the smallest increase since February 2021.
Meanwhile, core CPI, which excludes food and energy prices, increased by 0.3% in August and by 3.2% over the past year, aligning with July's numbers and market forecasts.
This news is likely to pressure gold prices, as the stronger US Dollar and rising Treasury yields reduce gold's appeal as a non-yielding asset. However, expectations of future Federal Reserve rate cuts may help limit gold's downside.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is showing signs of modest recovery, trading at $2,517.66, up 0.25% during the 4-hour session.
The precious metal has been hovering above key support levels, benefiting from a weaker U.S. Dollar amid expectations of further dovish policy signals from the Federal Reserve.
Traders are eyeing the $2,529 pivot point, a critical resistance level that could signal further upside momentum if breached.
Immediate resistance sits at $2,529.29, which coincides with the 50-period Exponential Moving Average (EMA), currently at $2,508.80.
A break above this level could target the next resistance zones at $2,540.41 and $2,550.45. If the price manages to hold above these levels, a more bullish trend may develop, possibly pushing Gold toward the $2,560 mark in the near term.
On the downside, immediate support is located at $2,507.77, and failure to maintain this level could trigger a deeper pullback toward $2,498.09. The next key support rests at $2,485.65, where traders might anticipate stronger buying interest.
The Relative Strength Index (RSI), currently at 56, suggests that the market is in neutral territory, with neither overbought nor oversold conditions, leaving room for further movement in either direction.
For now, the overall technical outlook for Gold remains cautiously bullish, but traders should closely monitor price action around the $2,529 level. Should the precious metal fail to break above this key resistance, bearish momentum may build, prompting a retreat toward the $2,500 region.
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USD/JPY Price Analysis – Sep 12, 2024
USD/JPY Price Analysis – Sep 12, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair broke its two-day losing streak, trading around 142.90.
This recovery can be attributed to rising odds of a smaller interest rate cut by the Federal Reserve (Fed) in September, which has supported the US Dollar (USD).
The recent remarks by Bank of Japan (BoJ) board member Naoki Tamura, stating that there is "no preset idea on the pace of further rate hikes," kept the Japanese Yen (JPY) subdued.
Impact of BoJ’s Gradual Rate Hikes and USD Strength on USD/JPY:
The BoJ's gradual approach to rate hikes contrasts with the more aggressive policies of the US and Europe. While Tamura’s comments reinforced the notion of a slower tightening cycle in Japan, the exact timing of when rates will reach 1% remains dependent on Japan’s economic and price conditions.
Meanwhile, the USD gained strength due to diminishing expectations of a larger Fed rate cut, contributing to the USD/JPY rally.
US CPI Report and Fed Rate Cut Expectations Drive USD/JPY:
On the US front, the August Consumer Price Index (CPI) showed headline inflation dropping to a three-year low of 2.5% year-on-year. Despite this, core inflation remained steady, reducing the likelihood of a significant rate cut by the Fed.
According to the CME FedWatch Tool, the probability of a 50 basis point rate cut has sharply declined to 15%, with markets now fully anticipating a 25 bps cut at the September meeting.
This outlook has provided upward momentum for USD/JPY, as expectations of gradual monetary easing by the Fed bolster the USD against the Yen.
USD/JPY - Technical Analysis
USD/JPY is currently trading at 142.817, up by 0.32%, as the pair continues to strengthen alongside the U.S. Dollar.
On the 4-hour chart, the price remains above the 50-day Exponential Moving Average (EMA) at 142.61, which provides key support, keeping the bullish momentum intact.
The pair has shown some consolidation but maintains an overall upward trend, with potential for further gains if resistance levels are cleared.
Immediate resistance lies at 143.51. A break above this level could open the door for further upside, targeting higher resistance zones at 144.24 and 145.16.
The Relative Strength Index (RSI) is currently at 55, signaling moderate bullish momentum, leaving room for additional upward movement.
On the downside, immediate support is found at 141.69. If this level fails, the next support sits at 140.70, with a potential deeper pullback toward 139.78 if selling pressure intensifies.
A break below these levels could signal a bearish reversal, though the current uptrend is supported by the 50 EMA at 142.61.
In conclusion, USD/JPY maintains a bullish outlook as long as it stays above the pivot point at 142.36. Traders should watch for a break above 143.51, which could trigger further gains, while a fall below 141.69 could signal a near-term bearish shift.
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AUD/USD Price Analysis – Sep 12, 2024
AUD/USD Price Analysis – Sep 12, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair managed to halt its downward trend and regain some of its gains around the 0.6676 level, reaching an intra-day high of 0.6695.
These gains occurred despite the US dollar gaining momentum amid decreasing odds for a significant Fed rate cut.
The upward trend in the AUD/USD can be attributed to the risk-on market sentiment, which generally supports the Australian dollar and contributes to its gains.
On the other hand, news that China might cut interest rates on $5 trillion in mortgages to boost consumption has raised concerns about a slowdown in its economy.
This, combined with a slight strengthening of the US Dollar (USD), has led to a sharp decline in the Australian Dollar (AUD).
China's Potential Rate Cuts and USD Strength Impacting AUD
On the AUD front, reports suggest that China might cut interest rates on $5 trillion in mortgages this month to boost consumer spending. This has raised concerns about a slowdown in China's economy, which is the world's second-largest.
These worries have negatively impacted currencies from countries closely linked to China, such as the Australian Dollar (AUD).
Meanwhile, a slight strengthening of the US Dollar (USD) has contributed to the sharp drop in the AUD. The combination of fears about China's economic slowdown and the stronger USD has led to a significant decline in the AUD during the trading session.
Impact of US CPI Report and Fed Rate Cut Expectations on AUD/USD
On the US front, the latest Consumer Price Index (CPI) report showed that overall consumer prices are easing. However, the core CPI data, which excludes volatile items like food and energy, indicates that underlying inflation remains stubbornly high.
This has reduced expectations for a significant rate cut by the Federal Reserve (Fed) at their next meeting. As a result, US Treasury bond yields have risen, pushing the US Dollar closer to its monthly peak.
Despite this, investors believe that the Fed will start easing its policy and cut interest rates by 25 basis points at each of the remaining three meetings in 2024.
This belief, coupled with a positive market mood, has limited further gains for the US Dollar and provided some support for the Australian Dollar (AUD).
Traders are now waiting for the US Producer Price Index (PPI) report to provide new direction for the market.
Therefore, the easing US CPI and persistent core inflation have bolstered US Treasury yields and strengthened the US Dollar, pushing the AUD/USD pair lower. However, expectations of future Fed rate cuts and positive market sentiment have provided some support to the AUD.
AUD/USD - Technical Analysis
AUD/USD is trading at $0.66907, up by 0.25%, reflecting a moderate recovery as the pair attempts to gain traction within a largely subdued environment.
The currency pair is hovering above its 50-day Exponential Moving Average (EMA) at $0.6672, a crucial technical level that has served as dynamic support. This indicates that the bullish momentum could build further if the pair manages to break through immediate resistance levels.
Immediate resistance stands at $0.6720, aligning with the pivot point, which could be a key level for bullish traders.
A break above this resistance could lead AUD/USD toward $0.6751, followed by the next target at $0.6793, suggesting a broader upside potential. However, a failure to breach $0.6720 may limit gains and reinforce selling pressure.
On the downside, immediate support is located at $0.6635, and a move below this could push the pair toward $0.6610 and further down to $0.6580.
The RSI at 60 suggests a mild bullish bias, but it's not yet in overbought territory, signaling there’s room for upward movement.
Traders should be mindful of these key levels. A sustained move above the $0.6720 pivot point is critical for extending the bullish trajectory, while a fall below $0.6635 could signal a deeper correction.
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USD/JPY Price Analysis – Sep 12, 2024