AUD/USD Price Analysis – Sep 19, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained its upward trend and remained well-bid around the $0.6832 level, hitting an intra-day high of $0.6840. This upward movement can be attributed to the higher-than-expected increase in new jobs created in August.
Meanwhile, the bearish US dollar, driven by the Federal Reserve’s (Fed) 50 basis point (bps) interest rate cut, was another key factor that kept the AUD/USD pair higher.
Moving ahead, the People’s Bank of China’s (PBoC) Monetary Policy Committee (MPC) is scheduled to hold its quarterly meeting on Friday to review its loan prime rate (LPR).
RBA's Stance and Strong Employment Data Support AUD/USD, but Inflation Remains a Concern
On the AUD front, the Reserve Bank of Australia (RBA) Governor Michele Bullock stated that it is too early to consider rate cuts due to ongoing high inflation.
RBA Assistant Governor Sarah Hunter added that, although the labor market remains tight, wage growth seems to have peaked and may slow down.
In August, Australia’s unemployment rate stayed at 4.2%, as expected, while the number of unemployed people fell by 10,000, bringing the total to 627,000.
Employment increased by 47,500 jobs, which exceeded the forecast of 25,000, but was lower than July’s 58,200.
The Australian Bureau of Statistics (ABS) noted that full-time employment dipped by 3,100, while part-time employment rose by 50,600.
The participation rate held steady at a record 67.1%, and the employment-to-population ratio slightly improved to 64.3%, just shy of its November 2023 peak.
Although unemployment figures fell slightly in August, the number of unemployed people has grown by 45,000 since the end of 2023. Overall, Australia's labor market continues to show resilience despite some fluctuations.
This news could provide short-term support for AUD/USD, as stronger-than-expected employment data and stable unemployment may boost confidence in the Australian economy. However, ongoing high inflation and wage growth concerns may limit the currency's long-term gains.
Impact of the Federal Reserve Rate Cut and US Economic Data on the AUD/USD Pair
On the US front, the broad-based US dollar lost its strength after the Federal Reserve unexpectedly cut interest rates by 50 basis points, instead of the expected 25. The Fed lowered its benchmark rate to a range of 4.75%–5% and signaled another half-point cut by year-end.
According to updated forecasts, rates are expected to drop further to 3.4% in 2025 and 2.9% in 2026, down from earlier projections of 4.1% and 3.1%.
The Fed also indicated that inflation won't hit its 2% target before 2026, raising doubts about future rate cuts. Despite this, Fed Chair Jerome Powell reassured that there is no immediate recession risk, pointing to a strong labor market and cooling inflation.
In other economic data, US Retail Sales rose by 0.1% month-over-month in August, following a stronger 1.1% rise in July, which beat expectations of a 0.2% decline.
This suggests consumer spending remains resilient. The Retail Sales Control Group increased by 0.3%, slightly below the previous month’s 0.4%.
Meanwhile, the University of Michigan’s Consumer Sentiment Index rose to 69.0 in September, higher than expected, reflecting an improving outlook on the US economy after months of uncertainty.
Therefore, the unexpected rate cut by the Federal Reserve could actually support the AUD/USD pair, as a weaker US dollar generally boosts other currencies like the Australian dollar.
However, the positive US retail data and improved consumer sentiment might prevent significant gains for AUD/USD.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.6872, up 0.83%, signaling bullish momentum as it moves above key technical levels. Immediate resistance lies at $0.6845, with further resistance targets at $0.6868 and $0.6888.
On the downside, immediate support is found at $0.6784, followed by deeper supports at $0.6750 and $0.6725.
The 50-day Exponential Moving Average (EMA) at $0.6749 is providing solid support, indicating that the current upward trend remains intact.
The Relative Strength Index (RSI) sits at 66, suggesting the market is nearing overbought conditions, but still leaves room for further gains.
A break above $0.6868 would confirm the bullish trend, targeting the next resistance at $0.6888. However, if the pair falls below $0.6784, it could trigger a shift toward a more bearish outlook, testing the $0.6750 support level.
With China being a key trading partner for Australia, any news regarding China's economic performance or trade relations will likely influence the next move for AUD/USD.
Additionally, the U.S. dollar’s performance following the Federal Reserve’s recent interest rate decisions will play a critical role in the pair’s trajectory.
In summary, AUD/USD shows strong bullish signals but faces immediate resistance. Traders should watch for a breakout above $0.6868 to confirm further upward momentum.
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USD/JPY Price Analysis – Sep 19, 2024
EUR/USD Price Analysis – Sep 18, 2024
Daily Price Outlook
During European trading, the EUR/USD pair remains steady above 1.1100, supported by ongoing weakness in the US dollar as traders anticipate the Federal Reserve's policy decision at 18:00 GMT.
Market sentiment is leaning towards a 50-basis-point rate cut by the Fed, which has contributed to the dollar's decline and boosted the EUR/USD pair.
However, the Euro faces some pressure due to uncertainty surrounding the European Central Bank's (ECB) future rate decisions and the overall economic outlook for the Eurozone.
Moving ahead, Eurostat will release the final Harmonized Index of Consumer Prices (HICP) for August at 09:00 GMT. Economists expect the data to align with preliminary estimates, forecasting annual headline inflation at 2.2% and core inflation at 2.8%.
US Retail Sales Data Creates Brief Rebound for Dollar, But Fed Rate Cut Expectations Weigh on EUR/USD
On the US front, recent economic data showed a small increase in Retail Sales for August, rising by 0.1% instead of the expected decline of 0.2%. However, sales excluding autos also grew by just 0.1%, missing forecasts.
This data led to a brief rebound in the US Dollar as traders adjusted their positions, moving it away from its lowest level since July 2023. Despite this, the US Dollar's gains were limited because traders still expect the Federal Reserve to cut interest rates more aggressively.
Markets are currently pricing in a 65% chance that the Fed will lower rates by 50 basis points at the end of its meeting today. This expectation is putting pressure on the US Dollar and supporting the EUR/USD pair.
Even though there was a slight bounce in the yield of the 10-year US government bond after the retail sales data, it did not significantly affect the market, as expectations for a more dovish Fed continue to dominate.
Uncertainty Over ECB Rate Decisions Drives Volatility in EUR/USD Pair
On the other side, the gain in the EUR/USD pair could be limited due to uncertainty about the European Central Bank's (ECB) future interest rate decisions and the Eurozone's economic outlook.
ECB officials are divided on whether to cut rates further. François Villeroy de Galhau, a member of the ECB Governing Council and President of the Bank of France, suggested that more rate cuts might be necessary to prevent inflation from falling too low. He indicated that the ECB is likely to continue cutting rates.
In contrast, Peter Kazimir, another ECB Governing Council member, argued that it might be better to wait until December for a clearer economic picture before making further rate cuts.
He expressed concerns about cutting borrowing costs too quickly if inflation has not been fully addressed.
Financial markets expect the ECB to make one more rate cut later this year, either in October or December, as they await more clarity on the economic situation.
Therefore, the uncertainty over ECB rate decisions is likely to keep the EUR/USD pair volatile. Divergent views among ECB officials create market hesitation, which may lead to fluctuating Euro strength against the US Dollar until a clearer policy direction emerges.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.11258, up 0.11%, showing mild bullish momentum as it approaches key resistance levels. The pair is hovering above its pivot point at $1.1113, indicating that buying interest remains strong for the time being.
Immediate resistance is seen at $1.1135, followed by additional hurdles at $1.1155 and $1.1185. On the downside, the first support sits at $1.1094, with further levels at $1.1072 and $1.1049.
The RSI has reached 60, signaling that momentum is leaning toward the bullish side but is not yet overbought. The 50-day EMA is positioned at $1.1074, providing a solid foundation of support that reinforces a short-term bullish bias.
As long as the pair remains above this moving average, the outlook remains favorable for further gains.
Traders are likely focusing on upcoming economic data and central bank comments, as any shifts in sentiment could introduce volatility.
A break above $1.1135 would confirm the continuation of the uptrend, with a potential move toward the next resistance level at $1.1155. Entry points for buyers are recommended above $1.11134, with a take profit target at $1.11504 and a stop-loss placed at $1.10948.
However, should the pair fall below the $1.1094 support level, bearish sentiment could take hold, pushing the price further toward the next key support at $1.1072.
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- GBP/USD Price Analysis – Sep 18, 2024
GBP/USD Price Analysis – Sep 18, 2024
Daily Price Outlook
During the European trading session, the GBP/USD pair continued its upward momentum, climbing near 1.3220 level. This surge followed the release of hotter-than-expected UK inflation data for August.
Meanwhile, the US Dollar is losing ground, weighed down by a dovish stance from the Federal Reserve, which further boosted the GBP/USD.
Looking ahead, investors are focused on the Bank of England’s (BoE) policy decision on Thursday. Before the recent inflation data, markets expected the BoE to keep interest rates unchanged at 5%.
However, with inflation still high, many now believe rates could stay at this level for the rest of the year.
Fed's Expected Rate Cut and Policy Shift May Heighten GBP/USD Volatility
On the US front, the Fed is widely expected to announce its first interest rate cut in over four years. According to the CME FedWatch tool, there's a 65% chance the Fed will lower rates by 50 basis points to 4.75%-5.00%, with the remaining probability favoring a smaller 25-bps cut.
The main focus now is on how fast the Fed will continue reducing rates, as officials have signaled growing concern over weakening labor demand rather than inflation.
In addition to the rate decision, investors will pay close attention to the Fed’s dot plot, which shows the long-term interest rate expectations from policymakers, and the updated economic projections.
Fed Chair Jerome Powell’s press conference following the announcement will also be crucial for understanding the central bank’s future policy path. Recent comments from Fed officials suggest that they are now more focused on weakening labor demand than on inflation.
This hints at a shift toward a more balanced policy approach as they look to normalize rates.
This news is likely to increase volatility in the GBP/USD pair. A Fed rate cut could weaken the US dollar, potentially pushing GBP/USD higher, but uncertainty around the pace of cuts and labor market concerns may keep movements unpredictable.
UK Inflation Surge Fuels Uncertainty Around BoE Rate Cuts, Boosting GBP/USD
Another factor boosting the GBP/USD pair is the hotter-than-expected UK inflation data for August. The Office for National Statistics (ONS) reported that core inflation, which excludes items like food and energy, rose by 3.6%, higher than the expected 3.5%, and up from 3.3% in July.
Additionally, services inflation, closely monitored by the Bank of England (BoE), increased sharply to 5.6% from 5.2% in July. This rise in inflation could make traders rethink their expectations of another interest rate cut from the BoE this year.
GBP/USD - Technical Analysis
GBP/USD is currently trading at $1.31912, up 0.24%, showing signs of steady momentum. The pair is inching closer to its key pivot point at $1.3226, which marks an important inflection level.
Immediate resistance is just above at $1.3227, followed by additional resistance levels at $1.3265 and $1.3306. On the downside, support levels are found at $1.3113, with further support at $1.3060 and $1.3003.
The RSI stands at 57, indicating mildly bullish sentiment, with room for further gains if the upward momentum continues.
The price is currently hovering above the 50-day EMA, which is positioned at $1.3125, suggesting that the short-term trend is supported by technical factors.
As long as the pair maintains levels above the $1.3125 EMA, a bullish continuation could unfold, potentially breaking above the $1.3227 resistance.
Traders are keeping an eye on macroeconomic events, including the upcoming Bank of England meeting, which could create additional volatility. For now, the pair shows a potential buying opportunity above $1.31706, with a take profit at $1.32259 and a stop-loss at $1.31415.
Should the price break below the $1.3113 support level, it could signal a shift towards a more bearish outlook.
Overall, the pair is poised between critical support and resistance levels, making the $1.3226 pivot a key determinant for the next market move.
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EUR/USD Price Analysis – Sep 18, 2024
GOLD Price Analysis – Sep 18, 2024
Daily Price Outlook
Gold (XAU/USD) is currently struggling to maintain gains and has slipped to a fresh daily low around $2,567 in the past hour. This decline occurs despite market expectations of a potentially larger interest rate cut by the Federal Reserve (Fed) this Wednesday, which could weigh on the US Dollar (USD).
Moreover, ongoing geopolitical tensions in the Middle East and political uncertainty in the US ahead of the November election might offer further support for gold.
Traders are closely awaiting the Federal Open Market Committee (FOMC) meeting results and updated economic projections before committing to significant positions in gold.
US Economic Data and Fed Rate Cut Expectations Impact Gold and USD
On the US front, the recently released economic data showed a modest increase in Retail Sales for August, rising by 0.1% compared to a decline of 0.2% expected. However, sales excluding autos missed forecasts, also expanding by 0.1%.
This data caused a temporary bounce in the US Dollar as traders covered short positions, pushing the USD away from its lowest level since July 2023.
Despite this, the upward movement was limited, as expectations for a more aggressive interest rate cut by the Federal Reserve (Fed) continue to weigh on the USD.
Markets are currently pricing in a 65% chance that the Fed will cut rates by 50 basis points at the end of its two-day meeting today, which is putting pressure on the USD and supporting gold.
The anticipation of a larger rate cut is expected to attract dip-buyers to gold, helping it recover from a recent pullback near its all-time high.
In the meantime, the yield on the benchmark 10-year US government bond bounced from a 16-month low following the retail sales data, but this move did not have a significant impact, as dovish Fed expectations dominate the market.
Geopolitical Tensions Boost Gold Prices as Safe-Haven Asset
Another factor that could help gold prices stay higher is ongoing geopolitical uncertainty. Recent conflicts in the Middle East and political instability in the US are keeping investors cautious and supportive of gold as a safe-haven asset.
In Lebanon, simultaneous explosions from handheld pagers used by Hezbollah have killed at least nine people and wounded over 2,700, raising fears of a broader regional conflict. Hezbollah has blamed Israel for the blasts, adding to tensions.
In addition, North Korea recently test-fired multiple ballistic missiles towards South Korean and Japanese waters, further heightening global security concerns.
The ongoing war between Israel and Hezbollah, with significant casualties reported, also contributes to the uncertainty. The recent Israeli attacks have reportedly resulted in the deaths of over 11,000 people in Gaza and the West Bank since October 7, according to the Palestinian Education Ministry.
This geopolitical turmoil supports gold prices by reinforcing its role as a safe-haven investment during times of global instability.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,571.08, down slightly by 0.01%, reflecting some consolidation near critical levels. The price hovers just below a key pivot point of $2,590, with immediate resistance at that same level.
A breakout above $2,590 could signal further upside, with the next resistance targets positioned at $2,602 and $2,613. Conversely, on the downside, immediate support lies at $2,556, with further levels at $2,546 and $2,535.
The RSI stands at 56, indicating neutral momentum, but with the potential for more upside if buying pressure increases.
The price is currently hovering above the 50-day EMA of $2,540, which reinforces a potential bullish bias in the near term. However, failure to maintain this level could prompt a bearish reversal.
Traders are likely to remain cautious ahead of key economic events this week, including the FOMC meeting, which could inject volatility into the markets. A break below the $2,561 mark may trigger selling, targeting the $2,590 take-profit level, with a stop-loss at $2,546.
However, should the price maintain its position above $2,556, a bullish continuation could unfold, pushing Gold toward higher resistance levels.
In the short term, Gold is caught between a bearish signal below $2,561 and the opportunity for a bullish reversal if momentum can carry it above $2,590.
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EUR/USD Price Analysis – Sep 18, 2024
USD/CAD Price Analysis – Sep 17, 2024
Daily Price Outlook
During the European trading session, the USD/CAD pair struggled to maintain its recovery and slipped back to around 1.3584. The drop can be largely attributed to the weakening US dollar, which has faltered due to strong expectations of a significant Federal Reserve rate cut.
On the Canadian side, the CAD might be facing pressure from rising hopes for further interest rate cuts by the Bank of Canada (BoC).
Meanwhile, the recent remarks by BoC Governor Tiff Macklem have added to this downward pressure. Macklem hinted at the possibility of speeding up rate reductions, even suggesting a potential 50 basis point cut if economic conditions don't improve. This commentary, reported by the Financial Times, has contributed to the CAD's decline.
Impact of Fed Rate Cut Expectations and Treasury Yields on USD/CAD
On the US front, the broad-based US dollar is facing challenges due to increasing expectations of an aggressive Federal Reserve rate cut. The market is now anticipating a 50 basis point cut at the Fed's meeting on Wednesday, which could pressure the USD/CAD pair.
However, stronger US Treasury yields may provide some support for the dollar. According to the CME FedWatch Tool, there's a 38% chance of a 25 basis point rate cut and a 62% chance of a 50 basis point cut, up from 50% just a day earlier.
This reflects growing expectations for more aggressive monetary easing. Traders will also be keeping an eye on Canada’s Consumer Price Index (CPI) data for August, set to be released later in the North American session.
The anticipated aggressive Fed rate cut and strong US Treasury yields may limit the USD/CAD pair's upside. The increased chance of a 50 basis point cut adds pressure on the USD, potentially weakening its position against the CAD.
Canadian Dollar Under Pressure Amid Bank of Canada Rate Cut Expectations and Upcoming CPI Data
On the other hand, the Canadian Dollar (CAD) is facing downward pressure from expectations of more interest rate cuts by the Bank of Canada (BoC). Recent comments from BoC Governor Tiff Macklem have intensified this pressure.
Macklem hinted that the BoC might accelerate its rate cuts, potentially implementing a 50 basis point reduction if economic growth falters. This has raised concerns about further weakening of the CAD.
Traders will be closely watching Canada’s Consumer Price Index (CPI) data for August, which is set to be released later in the North American session. This inflation report could provide new insights into the Bank of Canada’s future policy decisions, especially as they prepare for their October meeting.
The CPI data will be crucial in determining whether the BoC will follow through on its plans for additional rate cuts, influencing the CAD’s performance in the currency markets.
USD/CAD - Technical Analysis
The U.S. dollar (USD/CAD) is trading at $1.35918, up 0.08% on the day, reflecting a mild upward movement as the pair inches above the key pivot point at $1.3583.
The 4-hour chart shows steady price action, with the 50-day EMA positioned at $1.3567 providing a supportive floor for bulls.
Immediate resistance stands at $1.3615, and a break above this level could pave the way for further gains toward $1.3640 and $1.3662.
Despite the upward momentum, the RSI is neutral at 55, suggesting that neither bulls nor bears have full control at the moment. However, the pair remains above the 50-day EMA, signaling that buyers still hold an edge.
On the downside, support is found at $1.3548, with subsequent levels at $1.3519 and $1.3486, should selling pressure intensify.
Traders looking to capitalize on bullish momentum could consider buying above $1.35833, targeting $1.36262, with a stop loss placed near $1.35568 to manage downside risk. However, a failure to hold above $1.3583 could see the pair test lower supports.
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- GOLD Price Analysis – Sep 17, 2024
GOLD Price Analysis – Sep 17, 2024
Daily Price Outlook
Gold prices (XAU/USD) fell during the European trading session, dropping to around $2,572 and reaching a low of $2,569.94. This decline is due to traders adjusting their investments ahead of the Federal Open Market Committee (FOMC) meeting later today.
The rise of the US Dollar from its yearly low is also putting pressure on gold. However, there are expectations that the Federal Reserve might cut interest rates more aggressively, which could support gold prices.
At the same time, concerns about China’s slowing economy, political instability in the US, and growing tensions in the Middle East might prevent gold from falling too much further. These factors create a mixed environment for gold, balancing between downward pressure and potential support.
Looking ahead, traders are expected to be cautious and stay on the sidelines as they await this week’s pivotal central bank meetings. All eyes will be on the Federal Reserve’s decision on Wednesday, which is highly anticipated.
After that, the Bank of England (BoE) and the Bank of Japan (BoJ) will hold their policy meetings on Thursday and Friday. These meetings are set to offer new insights and could have a significant impact on gold prices (XAU/USD) in the coming days.
Gold Traders Await Fed Decision Amid Mixed Economic Signals
On the US front, the broad-based US dollar has edged up slightly from its yearly low, adding some pressure on gold prices. However, these gains have been short-lived due to strong expectations for a significant rate cut by the Federal Reserve. The dollar recently fell to its lowest level since July 2023, while gold hit a record high on Monday.
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 anticipation has pushed the yield on 2-year US government bonds to its lowest point since September 2022, and the 10-year Treasury yield has dropped to levels not seen since June 2023.
Despite stronger-than-expected data from the New York Empire State Manufacturing Index for September, the US dollar has struggled to gain traction ahead of outcome of the Federal Open Market Committee (FOMC) meeting.
As a result, gold traders are taking a cautious approach. The Fed’s decision on Wednesday, along with its economic projections and comments from Fed Chair Jerome Powell, will be key in shaping expectations for future rate cuts and their potential impact on both the dollar and gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,579.50, down 0.15% on the day, and continues to hover just below its pivot point of $2,585.30.
The price action suggests that the metal is consolidating after a recent rally, but it is still holding above key support levels, indicating that a decisive move could be forthcoming.
On the upside, immediate resistance lies at $2,596.80, followed by $2,605.02 and $2,612.69. A break above these levels could signal a resumption of the bullish trend, especially if the price pushes through $2,596.80 with strong momentum.
However, the RSI is currently at 68, nearing overbought territory, which suggests a potential pause or pullback in the short term.
On the downside, immediate support is seen at $2,571.15, with further support at $2,557.04 and $2,546.20. A break below the pivot point at $2,585.30 would likely open the door for further selling, with $2,567 being a key target for traders looking to take short positions.
The 50-day EMA is currently at $2,532.60, reinforcing a longer-term bullish structure, though this level remains distant from the current price.
In conclusion, Gold's near-term outlook appears mixed, with the metal at a crossroads between continued bullish momentum and a potential corrective phase. Selling below $2,585 could yield gains toward $2,567, with a stop loss at $2,594 to limit risk in case of a reversal.
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- AUD/USD Price Analysis – Sep 17, 2024
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
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 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