EUR/USD Price Analysis – Sep 11, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair is gaining traction and trading around the 1.1050 level, reaching an intra-day high of 1.1055. This uptick follows a dip in the US Dollar after the Trump-Harris presidential debate.
The pair is also buoyed by expectations that the US Federal Reserve might lower interest rates by 50 basis points (bps) at its upcoming meeting on September 17-18.
Hence, the significant cut could weaken the USD by reducing foreign capital inflows, which would benefit the EUR/USD pair.
However, the potential for further gains might be limited by economic concerns in the Eurozone, particularly Germany’s sluggish manufacturing sector, which is struggling due to increased foreign competition, especially in the automobile industry.
US Dollar Weakness and Fed Rate Cut Expectations Impacting EUR/USD
On the US front, the USD is weakening, pushing the EUR/USD pair up to the 1.1040s. This decline follows a debate where Vice President Kamala Harris was seen as performing better than Donald Trump, increasing her poll numbers.
As Harris gains support, Trump's policies to keep the USD strong seem less likely to succeed. Investors are also expecting the Federal Reserve to cut interest rates significantly at its meeting on September 17-18.
While a 25 basis point cut is expected, there’s a 30% chance of a 50 basis point cut, which would weaken the USD further and boost the EUR/USD pair.
Therefore, the impact of upcoming US Consumer Price Index (CPI) data for August on Fed rate-cut expectations is uncertain. Some analysts, like Ulricht Leutchmann from Commerzbank, believe the CPI figures are less crucial now as inflation is already low.
In contrast, Elias Haddad from Brown Brothers Harriman warns that higher-than-expected inflation could reduce the likelihood of a large rate cut and support the USD.
Economic Concerns and ECB Policy Impact on EUR/USD
On the EUR front, the upticks in the EUR/USD might be limited by economic concerns in the Eurozone. Germany, in particular, is experiencing a slowdown in manufacturing, especially in the key automobile sector, due to increased foreign competition. This economic weakness could dampen EUR/USD's gains.
The European Central Bank (ECB) is set to conclude its policy meeting on Thursday, with expectations for a 25 basis point cut in its deposit facility rate (DFR), lowering it from 3.75% to 3.50%.
This cut is aimed at stimulating economic growth. The ECB is also expected to reduce its main refinancing operations rate (MRO) to narrow the gap with the DFR, bringing the MRO down from 4.25% to 3.65%.
Despite these anticipated changes, there is a risk that the Euro could weaken after the announcement, particularly if the ECB revises its growth forecasts downward.
As Elias Haddad from Brown Brothers Harriman notes, a reduction in growth and inflation forecasts by the ECB could lead to a lower interest rate outlook for the Eurozone, negatively impacting the EUR/USD pair.
EUR/USD- Technical Analysis
The EUR/USD pair is currently trading at $1.10476, up by 0.26%, as the euro regains some strength amid continued market volatility.
Traders are closely monitoring the pair as it hovers just below key resistance levels, with near-term sentiment driven by U.S. inflation data and European economic reports.
Immediate resistance stands at $1.1085, with further targets at $1.1121 and $1.1154, suggesting that if bullish momentum persists, the pair could break through these levels.
On the downside, immediate support lies at $1.1018, with additional support seen at $1.0994 and $1.0969. A breach below these support levels could signal a deeper pullback in the near term.
Technical indicators are mixed, with the Relative Strength Index (RSI) at 46, indicating a slightly bearish bias but leaving room for a potential upward move.
The 50-day Exponential Moving Average (EMA) sits at $1.1063, just above the current price, suggesting a critical level to watch. A break above this EMA could confirm a more sustained bullish trend, whereas failure to surpass it may limit gains.
For traders, a potential buying opportunity exists above $1.10185, with a take-profit target set at $1.10757. Stop-loss orders should be placed around $1.09832 to limit downside risk, especially if the pair revisits its support levels.
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GBP/USD Price Analysis – Sep 11, 2024
GOLD Price Analysis – Sep 11, 2024
Daily Price Outlook
Gold prices (XAU/USD) continued their upward momentum on Wednesday, holding strong around the $2,521 mark and reaching an intraday high of $2,528.
The surge is likely driven by speculation of a possible Federal Reserve rate cut, which has weakened the US dollar and bolstered gold's appeal.
Meanwhile, the US Dollar is also weakening due to reactions to the Trump-Harris presidential debate, where many analysts saw Vice President Kamala Harris as the winner.
This has led to less confidence in former President Trump’s policies, which aimed to keep the US Dollar strong by imposing tariffs on countries that didn’t use it.
Meanwhile, ongoing market uncertainty is fueling safe-haven demand for gold, further supporting its rise.
However, traders are exercising caution ahead of the US Consumer Price Index (CPI) report, set to be released later in the day, which could influence market direction.
Impact of US Dollar Weakness and Fed Rate Cut Expectations on Gold Prices
On the US front, the US Dollar (USD) is weakening because traders think the Federal Reserve might cut interest rates soon.
This belief grew after recent data showed inflation is slowing down, which could lead the Fed to lower rates more than expected.
When interest rates drop, gold becomes more appealing since it doesn’t earn interest but its price usually goes up.
According to the CME FedWatch Tool, there's a 67% probability of a 25-basis-point rate cut at the Federal Reserve's next meeting on September 17-18.On the data front, the August US Consumer Price Index (CPI) is anticipated to rise by 0.2%, while the annual rate is expected to slow from 2.9% to 2.6%, marking its lowest level since 2021. The core CPI, which excludes food and energy, is also projected to increase by 0.2%, holding steady at 3.2% year-over-year. These inflation figures will be crucial in determining the Fed's future policy decisions.
Moreover, the US dollar is under pressure because of recent political developments.
In the Trump-Harris debate, many analysts favored Vice President Kamala Harris, reducing confidence in former President Trump’s policies designed to strengthen the USD through tariffs.
Therefore, the weakening US Dollar and anticipated Fed rate cuts make gold more attractive as a non-yielding asset.
Lower interest rates and reduced USD strength boost gold’s appeal, likely leading to higher gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) continues to demonstrate bullish momentum, currently trading at $2,520.76, up 0.15%.
The yellow metal has been supported by a weakening US dollar and expectations of dovish monetary policy from the Federal Reserve. Traders are closely watching inflation data, which could further reinforce safe-haven demand.
Key levels indicate that immediate resistance is at $2,529.29, closely followed by the next resistance at $2,540.41. Should prices push beyond this threshold, the next major target is $2,550.45.
On the downside, immediate support lies at $2,507.77, with further support at $2,498.09 and $2,485.65, levels that could prompt a sell-off if breached.
Technical indicators suggest a continued bullish outlook. The RSI stands at 65, signaling that Gold is approaching overbought conditions, but still has room to climb.
The 50-day EMA at $2,508.16 reinforces a strong support zone just above $2,507, further suggesting an upward trend as long as prices stay above this level.
In terms of strategy, traders may look to buy above $2,515 with a target price of $2,529, aiming to capture gains from short-term momentum. A stop-loss at $2,507 is advisable to manage downside risk, particularly if support levels are tested.
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EUR/USD Price Analysis – Sep 11, 2024
GBP/USD Price Analysis – Sep 11, 2024
Daily Price Outlook
Despite weaker-than-expected UK economic data, the GBP/USD pair continued its upward momentum, holding steady around 1.3082 for the second day in a row on Wednesday.
The main driver behind this strength was a weakening US dollar, which has been under pressure from expectations of a dovish stance from the Federal Reserve.
Traders are adopting a cautious approach, choosing to stay on the sidelines and wait for the upcoming US consumer inflation figures before making any bold moves.
UK Economic Stagnation and Production Decline Raise Concerns for GBP Amid BoE Rate Cut Expectations
On the BOE front, the UK Office for National Statistics revealed that economic growth was stagnant in July, failing to meet expectations of a modest 0.2% increase. This marks the second consecutive month of flat growth.
Meanwhile, both UK Industrial and Manufacturing Production dropped unexpectedly during this period.
The slowdown in wage growth in the UK has further increased expectations for additional interest rate cuts by the Bank of England (BoE).
These disappointing figures put pressure on the British Pound (GBP) as investors anticipate that the BoE might lower rates to boost the economy. The combination of flat growth and shrinking production suggests a struggling economy, leading to a more cautious outlook for the GBP.
US Dollar Weakens Amid Dovish Fed Expectations; Upcoming CPI Report to Impact GBP/USD Performance
On the US front, the broad-based US dollar has experienced some selling after a three-day winning streak, partly due to expectations of a dovish Federal Reserve.
This shift provides support to the GBP/USD pair, helping it hold above 1.3110. Traders are currently cautious, opting to wait for the upcoming US consumer inflation figures before making any significant moves.
The US Consumer Price Index (CPI) report, set to be released soon, will be crucial in shaping market expectations for the Federal Reserve's decision on interest rates at their next meeting on September 17-18.
On the data front, the August US Consumer Price Index (CPI) is expected to rise by 0.2%, with the annual rate projected to slow from 2.9% to 2.6%, its lowest level since 2021.
The core CPI, which excludes food and energy, is also anticipated to increase by 0.2%, maintaining a year-over-year rate of 3.2%.
This report is likely to impact the demand for the US dollar and influence the performance of the GBP/USD pair.
GBP/USD- Technical Analysis
The GBP/USD pair is trading higher at $1.31025, marking a 0.22% gain on the day as sterling continues to benefit from positive sentiment surrounding the UK economy.
The currency pair has been trading above key support levels, reflecting cautious optimism ahead of key economic data releases later in the week.
Key technical levels reveal immediate resistance at $1.3101, with the next barrier at $1.3127. Should bullish momentum persist, the pair could push towards $1.3170, representing a significant psychological resistance level.
On the downside, immediate support is located at $1.3012, with further support at $1.2976 and $1.2941, which could trigger bearish momentum if breached.
Technical indicators are pointing to a neutral-to-bullish outlook. The Relative Strength Index (RSI) is at 53, signaling that the market is neither overbought nor oversold, leaving room for further gains.
Meanwhile, the 50-day EMA sits at $1.3120, just above current price action, indicating that a break above this moving average could confirm a more sustained upward trend.
From a strategic perspective, traders may look to buy above $1.30726, targeting the pivot point at $1.31279 for potential profits. A stop-loss at $1.30435 is advised to mitigate downside risks, particularly if the pair retraces towards its support levels.
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EUR/USD Price Analysis – Sep 11, 2024
GOLD Price Analysis – Sep 10, 2024
Daily Price Outlook
Gold (XAU/USD) is struggling to maintain its upward momentum, dipping slightly below $2,500 as a stronger US dollar weighs on the market.
The dollar's boost comes as expectations for a 50 basis point rate cut from the Federal Reserve begin to fade.
However, gold remains resilient above the $2,500 level in early European trading, with investors adopting a wait-and-see approach ahead of key US inflation data later this week.
Moving ahead, the upcoming Consumer Price Index (CPI) report on Wednesday and the Producer Price Index (PPI) on Thursday are expected to be pivotal in shaping the Fed’s rate policy outlook, which could provide clearer direction for gold prices, especially given its appeal as a non-interest-bearing asset.
Gold Pressured by Stronger US Dollar and Reduced Fed Rate Cut Expectations
On the US front, the broad-based US dollar is climbing back toward its monthly high, as reduced expectations for a larger rate cut by the Federal Reserve in September support its strength.
The stable performance in global equity markets is also putting pressure on gold prices, which typically serve as a safe-haven asset.
Last Friday's mixed US employment data lowered the chances of a 50-basis point rate cut, boosting the US dollar and acting as a headwind for gold.
Currently, traders see a 71% chance of a 25-basis-point cut and only a 29% chance of a larger 50-basis-point cut at the next Fed meeting on September 17-18, according to CME Group's FedWatch tool.
Investors are now awaiting key US inflation reports this week, with the August Consumer Price Index (CPI) set for release on Wednesday and the Producer Price Index (PPI) on Thursday. These figures are expected to influence the Fed’s upcoming rate cut decision.
Meanwhile, New York Fed President John Williams noted that inflation remains stable, suggesting the Fed could move toward a more neutral stance.
Fed Governor Christopher Waller also supported reducing rates to maintain economic growth, while Chicago Fed President Austan Goolsbee said policymakers are aligning with market expectations for a policy shift.
This news is putting downward pressure on gold, as a stronger US dollar and reduced expectations for a larger Fed rate cut decrease demand for the non-yielding asset. Investors are cautious, awaiting key inflation data that could further influence gold prices.
Escalating Gaza Conflict May Boost Gold Demand as Safe-Haven Asset
On the geopolitical front, Israel launched an airstrike on a tented camp near Khan Younis in southern Gaza, killing at least 40 people and injuring 60 others.
Israel claims it targeted a Hamas command center, but Hamas has called this a "clear lie." The strike is part of Israel's ongoing military actions in Gaza, which have resulted in over 40,988 deaths and 94,825 injuries in the territory.
Meanwhile, the UN's polio vaccination campaign in northern Gaza faces uncertainty after Israeli soldiers detained UN staff at gunpoint, and bulldozers damaged UN vehicles, according to UNRWA chief Philippe Lazzarini.
The vaccination campaign was set to start on Tuesday, but its status is now unclear. In Israel, at least 1,139 people were killed in the October 7 Hamas-led attacks, and more than 200 were taken hostage.
Therefore, the escalating violence in Gaza may drive investors toward safe-haven assets like gold due to heightened geopolitical uncertainty.
As conflict intensifies, gold could see increased demand as a secure investment option amid global instability and risk aversion.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,503.72, down 0.18% in the 4-hour timeframe, as it consolidates near a critical support level.
The pivot point sits at $2,500.09, which acts as a key psychological threshold. The market appears indecisive with the Relative Strength Index (RSI) holding steady at 51, indicating neutral momentum.
On the upside, immediate resistance lies at $2,511.75, followed by the next resistance levels at $2,529.29 and $2,540.41.
Breaking above these levels could signal a bullish continuation, with $2,540.41 serving as a significant hurdle to clear.
Conversely, immediate support is found at $2,491.58, followed by stronger support at $2,478.37 and $2,466.90. A break below $2,491 could trigger further selling pressure, driving the metal towards lower support levels.
The 50-day Exponential Moving Average (EMA) at $2,502.7480 is closely aligned with the current price, suggesting that gold is testing its near-term trend.
The market outlook remains cautiously bullish above the $2,500 pivot point. A break below this key support could shift momentum to the downside, while holding above it keeps the bullish trend intact.
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USD/CAD Price Analysis – Sep 10, 2024
AUD/USD Price Analysis – Sep 10, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair struggled to maintain its earlier gains and turned bearish around the 0.6655 level, hitting an intraday low of 0.6644.
This decline was primarily driven by a stronger US dollar, which gained momentum after recent labor data hinted at a reduced likelihood of a sharp Fed rate cut in September.
However, the pair managed to recover its intraday losses after the positive trade data from China. Looking ahead, the upcoming Consumer Price Index (CPI) report on Wednesday and the Producer Price Index (PPI) on Thursday will be crucial in shaping the Fed’s rate policy.
These reports could also influence gold prices, given its status as a non-interest-bearing asset.
Stronger US Dollar and Bearish AUD/USD Due to Fed Rate Cut Expectations and Mixed Labor Data
On the US front, the broad-based US dollar gained support as recent labor market data introduced uncertainty about a potential aggressive rate cut by the Federal Reserve (Fed) in September.
According to the CME FedWatch Tool, the market expects at least a 25 basis point rate cut by the Fed, but the chance of a larger 50 basis point cut has slightly decreased to 29.0%, down from 30.0% last week. This shift in expectations contributed to the bearish movement of the AUD/USD pair.
In recent US data, Nonfarm Payrolls (NFP) increased by 142,000 jobs in August, falling short of the 160,000 forecast but improving from July’s revised figure of 89,000.
The Unemployment Rate dropped to 4.2%, as expected, from 4.3% the previous month. Fed Bank of Chicago President Austan Goolsbee indicated that Fed officials are aligning with the market's sentiment about a potential policy rate adjustment.
FXStreet’s FedTracker rated Goolsbee’s comments as dovish, suggesting a lower likelihood of a drastic rate cut.
Therefore, the shift in expectations for a smaller Fed rate cut, combined with mixed US labor data, has led to a stronger US dollar and bearish movement in the AUD/USD pair. This is due to reduced rate cut speculation and improved US economic indicators.
AUD/USD Strengthens Amidst Chinese Trade Data and RBA Rate Cut Expectations
On the AUD front, the AUD/USD pair gained traction after China's Trade Balance data was released on Tuesday. RBC Capital Markets now anticipates the Reserve Bank of Australia (RBA) will cut rates in February 2025, earlier than previously forecasted for May 2025. Despite persistent inflation in Australia, the RBA doesn’t see the slower economic growth as a strong enough reason to lower rates this year.
Meanwhile, Australia's Westpac Consumer Confidence fell by 0.5% in September, reversing August’s 2.8% increase. Traders are closely watching China’s upcoming Trade Balance data due to the strong trade ties between Australia and China. Changes in China’s economic performance can significantly impact Australian markets.
China’s Consumer Price Index (CPI) rose by 0.6% year-on-year in August, a slight improvement from July but below expectations. Monthly CPI inflation increased by 0.4%, missing the forecast. China's Trade Balance showed a surplus of CNY 649.34 billion in August, up from the previous CNY 601.90 billion, with exports increasing by 8.4% year-on-year.
Therefore, the AUD/USD pair strengthened following China's Trade Balance data, while expectations of an earlier RBA rate cut in February 2025 and a drop in Australian consumer confidence influenced the pair. Positive Chinese trade data supported the AUD.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at $0.66698, up 0.08% on the day, in a consolidative pattern following a minor bullish movement.
The immediate pivot point sits at $0.6701, which aligns with the 50-day Exponential Moving Average (EMA), acting as a key resistance level.
This suggests that the pair is trading near a crucial juncture, with potential for both upward and downward movement depending on market conditions.
On the upside, immediate resistance is at $0.6720, followed by $0.6751 and a more significant barrier at $0.6793. A break above $0.6720 could fuel further bullish momentum, targeting the higher resistance levels.
However, AUD/USD would need to overcome the key pivot point at $0.6701 to signal a shift toward a sustained upward trend.
On the downside, immediate support is seen at $0.6646, followed by more substantial support at $0.6610 and $0.6580. If the pair fails to maintain its position above $0.6646, bearish sentiment may deepen, with the next target likely at $0.6610.
The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight bearish tilt, which could indicate limited upward potential unless fresh catalysts emerge.
For now, AUD/USD remains neutral to slightly bullish, with the $0.6701 pivot acting as a key battleground for both bulls and bears.
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USD/CAD Price Analysis – Sep 10, 2024
USD/CAD Price Analysis – Sep 10, 2024
Daily Price Outlook
During the Asian session on Tuesday, the USD/CAD pair saw some upward movement, trading around 1.3571, thanks to growing demand for the US dollar.
This boost came despite crude oil prices struggling to maintain recent gains and dropping to their lowest levels since June 2023. The decline in oil prices is largely attributed to concerns about a possible economic slowdown in China, the world's largest oil importer.
Besides this, the Canadian dollar is facing pressure due to expectations of further interest rate cuts by the Bank of Canada, following disappointing Canadian jobs data from Friday.
These combined factors are giving the USD/CAD pair a lift, as traders navigate the impact of fluctuating oil prices and central bank policies.
CAD Struggles with Low Oil Prices and Rate Cut Expectations
On the Canadian dollar front, crude oil prices are struggling to extend their recent rebound and have fallen to their lowest levels since June 2023. This setback is mainly due to growing concerns about a potential economic slowdown in China, the world's largest oil importer.
Recent data from China reveals that oil imports were flat in August, compared to a 6.6% increase the previous month. This stagnation suggests weaker domestic demand, which is heightening market anxiety and weighing on crude oil prices.
In addition to this, expectations for more interest rate cuts by the Bank of Canada (BoC) are also affecting the Canadian dollar.
These hopes have been strengthened by disappointing Canadian jobs data from last Friday, which has weakened the Loonie further. As a result, the USD/CAD currency pair is benefiting from this situation, with the US dollar gaining traction against its Canadian counterpart.
USD Gains Support Amid Adjusted Fed Rate Cut Expectations and Upcoming Economic Data
On the US front, the US Dollar (USD) is gaining strength due to decreased expectations for a substantial 50 basis points interest rate cut by the Federal Reserve (Fed) in September. This change in outlook comes after mixed results from the recent US Nonfarm Payrolls (NFP) report.
As a result, the USD/CAD pair is finding some support. However, investors are staying cautious and are waiting to hear from Bank of Canada Governor Tiff Macklem and review the upcoming US inflation data before making any major decisions.
Meanwhile, the crucial US Consumer Price Index (CPI) report is set to be released on Wednesday, followed by the Producer Price Index (PPI) on Thursday.
These reports are expected to shape market expectations about the Federal Reserve's potential interest rate cut later this month and influence demand for the USD. Additionally, movements in oil prices will also play a key role in determining the next direction for the USD/CAD pair.
USD/CAD - Technical Analysis
The USD/CAD pair is currently trading at $1.35635, up 0.04%, hovering near a key pivot point at $1.3598. The pair has shown slight bullish momentum, supported by a relatively strong U.S. dollar.
However, the USD/CAD remains at a critical juncture, with price action confined between immediate resistance and support levels.
Immediate resistance stands at $1.3615, followed by stronger barriers at $1.3640 and $1.3662. If USD/CAD manages to break above $1.3615, it could open the door for further gains, with the 50-day Exponential Moving Average (EMA) at $1.3534 providing near-term support. The bullish bias remains intact as long as the price stays above this EMA level.
On the downside, immediate support is found at $1.3548, with the next critical levels at $1.3509 and $1.3483. If the pair fails to maintain momentum above $1.3548, selling pressure could increase, pushing the price toward $1.3509.
The Relative Strength Index (RSI) is currently at 57, suggesting neutral to slightly bullish momentum, but a dip below $1.3548 could weaken sentiment.
For now, the USD/CAD appears to be balancing between bullish and bearish pressures, with the $1.3598 pivot point serving as a key indicator for the next directional move. Traders should monitor these levels closely to identify potential entry and exit points.
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AUD/USD Price Analysis – Sep 10, 2024
GBP/USD Price Analysis – Sep 09, 2024
Daily Price Outlook
The Pound Sterling (GBP) dropped below 1.3100 against the US Dollar on Monday, marking a fresh two-week low.
The GBP/USD pair faced selling pressure as the US Dollar Index (DXY) rose to 101.40, driven by diminishing expectations for aggressive rate cuts from the Federal Reserve (Fed).
The recent Nonfarm Payrolls (NFP) report showed mixed signals for the labor market, which tempered market hopes for a 50-basis-point rate cut in September.
According to the CME FedWatch Tool, the probability of such a cut has fallen to 27%, down from 41% before the release of August’s labor data.
While the report showed slower job growth, the Unemployment Rate ticked lower, and wage growth accelerated at 0.4%—strong enough to keep recession fears at bay.
This has bolstered the US Dollar, as the Fed is now less likely to ease aggressively, putting pressure on the Pound.
UK Employment Data in Focus
The focus for GBP/USD traders is now shifting to the UK labor market data set to be released on Tuesday. The report will provide critical insights into the Bank of England’s (BoE) future interest rate decisions.
According to estimates, the Unemployment Rate is expected to fall slightly to 4.1% from 4.2%, while Average Earnings Including Bonuses are forecast to soften to 4.1%, down from 4.5%.
The labor data could influence market speculation about the BoE’s next move, particularly if wage growth continues to decelerate.
Slower wage growth would ease inflationary pressures, especially in the services sector, potentially encouraging the BoE to consider further rate cuts to support the economy.
Additionally, a report from KPMG and the Recruitment and Employment Confederation (REC) showed that permanent job placements in the UK dropped at their fastest pace in five months, signaling a cooling labor market.
Pay growth for new hires also slowed, hitting a five-month low—one of the weakest readings since early 2021.
What to Expect from CPI Data
Looking ahead, the US Consumer Price Index (CPI) data for August, due on Wednesday, is expected to provide fresh cues on the Fed’s rate outlook.
The CPI is forecast to show 0.2% growth for both headline and core inflation, while annual headline inflation is expected to slow to 2.6%, down from 2.9% in July.
This inflation data will be crucial in shaping market expectations for Fed policy in the coming months. If inflation continues to cool, it could support the case for more moderate rate cuts, limiting further upside for the US Dollar.
GBP/USD - Technical Analysis
The GBP/USD pair is currently trading at $1.31052, inching up by a modest 0.01%. However, the technical landscape suggests a bearish bias in the short term.
Immediate price action remains capped below the pivot point at $1.3142, with resistance stacking higher at $1.3188, $1.3227, and $1.3266.
As market sentiment weakens, the pair is struggling to gain momentum, particularly with a Relative Strength Index (RSI) of 39, indicating oversold conditions that could signal a potential continuation of downward movement.
The 50-day Exponential Moving Average (EMA) at $1.3154 reinforces the notion that the pair is facing resistance from broader market pressures.
A failure to close above this level in recent sessions has further solidified a bearish outlook, leaving the door open for potential tests of lower support levels.
On the downside, immediate support stands at $1.3089, with further levels at $1.3052 and $1.3011 providing a stronger safety net for potential declines.
Should the pair breach the immediate support at $1.3089, a swift move toward $1.3052 is highly probable, with a potential extended drop toward $1.3011 if bearish momentum intensifies.
Given the technical setup, the recommended strategy is to consider short positions below the pivot point at $1.31413. The target for taking profit is at $1.30520, with a stop-loss placed above immediate resistance at $1.31878, to mitigate potential upside risk.
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EUR/USD Price Analysis – Sep 09, 2024
GOLD Price Analysis – Sep 09, 2024
Daily Price Outlook
After briefly retesting its all-time highs on Friday, Gold (XAU/USD) pulled back to $2,490 per troy ounce on Monday.
The initial rise came after the US Nonfarm Payrolls (NFP) report showed that fewer jobs were added in August than expected, signaling a potential slowdown in the labor market.
This fueled speculation that the Federal Reserve (Fed) might implement a larger 0.50% rate cut in September. Lower interest rates typically benefit Gold, as they reduce the opportunity cost of holding non-yielding assets like the precious metal.
However, the gains were short-lived. Further analysis of the NFP report revealed a drop in the Unemployment Rate to 4.2%, along with a stronger-than-expected rise in wage growth at 0.4%, which softened expectations of aggressive rate cuts.
As a result, the likelihood of a 0.50% rate cut dropped from 40% to 30%, causing Gold to fall back below $2,500.
Gold’s Outlook Shaped by Mixed Economic Signals
Despite the recent pullback, Gold remains supported by ongoing concerns about the US economy.
Fed Governor Christopher Waller expressed support for starting rate cuts soon to maintain economic momentum, citing signs of a "softening" but not "deteriorating" labor market. Waller also kept the door open for a non-standard 0.50% reduction.
This week, the focus shifts to upcoming US Consumer Price Index (CPI) and Producer Price Index (PPI) data, which could further influence expectations for the Fed’s next move.
While inflation data typically plays a crucial role in rate decisions, analysts like Jim Reid of Deutsche Bank suggest that employment data may currently carry more weight.
Geopolitical Risks Add to Gold’s Appeal
On the geopolitical front, tensions in the Middle East and Ukraine continue to provide support for Gold as a safe-haven asset.
The deteriorating ceasefire prospects between Israel and Hamas and escalating violence, along with Russia’s advance in Ukraine, increase uncertainty.
Countries like Poland have been increasing their Gold reserves, reflecting a growing demand for the precious metal amid geopolitical instability.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,490.23, up 0.06%, but remains in a bearish territory. The pivot point for the day stands at $2,500.43, with the metal currently unable to break through this resistance.
The immediate resistance level lies at $2,511.12, followed by more substantial hurdles at $2,527.08 and $2,540.41. The 50-day Exponential Moving Average (EMA) also aligns closely with the pivot point, reinforcing the overhead resistance at $2,500.53.
On the downside, immediate support is observed at $2,482.48, with further support levels at $2,472.08 and $2,462.04, suggesting that any breach of these could push the metal into a steeper decline.
Technical indicators signal a bearish outlook, with the Relative Strength Index (RSI) at 38, indicating that selling pressure still dominates.
As the RSI remains below 50, it suggests that the market sentiment is tilted toward more downside risk in the near term. If Gold fails to break above the $2,500 pivot point, bears could push the price down to test the $2,482.48 support level.
The strategy for traders remains cautious, with a sell order advised below the $2,500 mark. Traders eyeing the downside could aim for a take-profit level at $2,477, with a stop-loss set around $2,510 to limit potential losses if the price rebounds.
The next few trading sessions will be pivotal as Gold’s direction depends heavily on whether it can break through the $2,500 resistance or slide below key support levels.
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GBP/USD Price Analysis – Sep 09, 2024
EUR/USD Price Analysis – Sep 09, 2024
Daily Price Outlook
The EUR/USD pair is under pressure, trading below 1.1050 as investors brace for the European Central Bank (ECB) policy decision this Thursday.
The ECB is expected to cut its key borrowing rates by 25 basis points (bps) for the second time in its current policy-easing cycle, which started in June.
With Eurozone inflation continuing to decline—Harmonized Index of Consumer Prices (HICP) fell to 2.2% in August—further monetary easing appears almost certain.
Germany's technical recession, which saw its economy contract in the second quarter, adds to the mounting challenges.
ECB policymakers, including board member Piero Cipollone, have expressed concerns about the German economy's weakness and the risk of overly restrictive monetary policy, leading to the consensus for further rate cuts by year-end.
Weak Economic Sentiment and Worsening Investor Confidence
The Eurozone’s economic outlook remains bleak. Recent data showed that Sentix Investor Confidence dropped from -13.9 in August to -15.4 in September, reflecting growing pessimism about the region's economic health.
The German economy’s slowdown continues to drag down sentiment across the Eurozone, limiting the prospects for any meaningful recovery in the near term.
Subdued demand from domestic and international markets is further weakening the Euro, with EUR/USD failing to break key resistance levels as a result.
The Eurozone’s poor economic prospects, combined with lower inflation and weak investor confidence, have kept the Euro in a downward spiral against its peers.
US Dollar Strength After Nonfarm Payroll Data
Meanwhile, the US Dollar has strengthened, supported by a mixed US Nonfarm Payrolls (NFP) report for August.
While new payrolls were fewer than expected at 142K, the Unemployment Rate dropped as anticipated to 4.2%, and Average Hourly Earnings grew faster than projected at 0.4%.
The US Dollar Index (DXY), which tracks the USD against six major currencies, rose to near 101.50, helping push EUR/USD further below 1.1050.
The Federal Reserve (Fed) is now less likely to cut interest rates aggressively, with FedWatch Tool indicating a 27% probability of a 50-bps rate cut in September.
The market’s focus is now on the upcoming US Consumer Price Index (CPI) data due on Wednesday, which could introduce more volatility for EUR/USD.
EUR/USD - Technical Analysis
The EUR/USD pair is currently trading at $1.10660, edging down by 0.06% as the market faces continued pressure. A weak Euro is struggling to find its footing, with the pair trading just below the pivot point at $1.1084.
With the 50-day Exponential Moving Average (EMA) sitting slightly lower at $1.1082, the pair remains technically bearish, unable to gather the strength needed for an upward breakout.
The RSI indicator stands at 41, reflecting neutral but leaning towards oversold conditions, further reinforcing a bearish sentiment in the short term.
Immediate resistance looms at $1.1121, followed by higher ceilings at $1.1154 and $1.1193. Without a decisive break above these levels, the Euro may continue to encounter selling pressure, particularly if broader economic concerns such as inflation in the Eurozone continue to cast a shadow over investor sentiment.
On the downside, immediate support can be found at $1.1034, with key levels further below at $1.1000 and $1.0969.
If the pair breaches the $1.1034 mark, it could quickly descend toward the psychologically significant $1.1000 level, which serves as a key defensive barrier. A breakdown below this threshold would likely trigger further declines, exposing the $1.0969 support.
The recommended strategy is to sell positions below $1.10836, with a target profit set at $1.10323. To protect against upside risk, a stop-loss should be placed at $1.11141, just above immediate resistance.
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EUR/USD Price Analysis – Sep 06, 2024
Daily Price Outlook
During the European trading session on Friday, the EUR/USD extended its winning streak for the third consecutive session, reaching a fresh weekly high of 1.1121. This rise was primarily driven by a weakening US Dollar (USD).
The US Dollar Index (DXY), which measures the Greenback’s strength against six major currencies, fell below the key support level of 101.00.
The decline in the USD's appeal followed disappointing US labor market data, including July's JOLTS Job Openings and August's ADP Employment report, which heightened concerns about deteriorating labor market conditions.
USD Weakness and Fed Rate Cut Speculation Boost EUR/USD Ahead of NFP Data
On the US front, the broad-based US dollar bearish bias is pushing the EUR/USD higher. The US Dollar Index (DXY), which measures the USD against six major currencies, has fallen below the key support level of 101.00.
This decline follows weak US labor market data, including July's JOLTS Job Openings and August's ADP Employment report, showing the lowest job vacancies and payroll additions in over three years.
Despite August's ISM Services PMI data being better than expected, it hasn’t been enough to support the USD. This has led to increased market speculation that the Federal Reserve might cut interest rates more aggressively.
Investors are now focusing on the upcoming US Nonfarm Payrolls (NFP) data for August, set to be released at 12:30 GMT. The report is expected to show an increase in job hires to 160K from July's 114K and a decrease in the unemployment rate to 4.2% from 4.3%.
Additionally, wage growth is anticipated to accelerate, with Average Hourly Earnings expected to rise by 3.7% year-on-year and by 0.3% month-on-month. These figures will be crucial for understanding future interest rate decisions.
Therefore, the USD's weakness and speculation of aggressive Fed rate cuts are driving the EUR/USD higher. If the upcoming NFP data confirms weak labor market conditions and slower wage growth, the EUR/USD could continue to rise as market expectations shift.
Eurozone Data and ECB Rate Cuts Strain Euro, But USD Weakness Drives EUR/USD Higher
On the EUR front, European economic data has not provided much support for the Euro. July's EU Retail Sales data came in worse than expected, showing a decline of 0.1% year-on-year, instead of the anticipated increase to 0.1%. This follows a revised contraction of 0.4% in the previous period, indicating ongoing economic challenges in the Eurozone.
Additionally, the European Central Bank (ECB) is expected to cut interest rates twice more this year. This outlook could further weigh on the Euro, as lower interest rates might reduce the currency's appeal to investors. Despite these challenges, the Euro is still benefiting from the weakness in the US Dollar, driving the EUR/USD pair higher.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.11182, up 0.07%, showing signs of strength as the pair edges higher within a tight range. The 4-hour chart indicates bullish momentum, as the euro holds above its key support levels.
The pair is currently eyeing the pivot point at $1.11537, which will be crucial in determining the next leg of the move. A break above this level could see EUR/USD test immediate resistance at $1.11932, with further gains pushing towards $1.12302.
However, a failure to breach the pivot could open the door for a retracement, with immediate support found at $1.10717 and deeper support at $1.10337 and $1.09995.
The 50-day Exponential Moving Average (EMA) at $1.10920 is acting as a key dynamic support, reinforcing the bullish bias as long as the price remains above this level.
The Relative Strength Index (RSI) is sitting at 65, indicating moderately bullish momentum but nearing overbought territory. A break above 70 could signal further gains, but traders should remain cautious of a potential correction if the RSI starts to roll over.
Given the current technical setup, traders may consider entering long positions above $1.11011, with a take-profit target at $1.11549 and a stop-loss at $1.10716. The technical outlook remains positive as long as the pair holds above the 50-day EMA and the pivot point is respected.
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