AUD/USD Price Analysis – Aug 20, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained a bullish stance and remained well bid around the 0.6732 level, reaching an intra-day high of 0.6739.
This upward momentum was driven by several factors, including hawkish sentiment surrounding the Reserve Bank of Australia (RBA).
Additionally, the US Dollar (USD) continues to face downward pressure following comments from Federal Reserve (Fed) officials, which have increased the likelihood of upcoming rate cuts by the US central bank.
Looking forward, traders are cautious ahead of the July FOMC meeting minutes on Wednesday and Fed Chair Jerome Powell’s speech at Jackson Hole on Friday.
Meanwhile, dovish Fed expectations and ongoing geopolitical risks could provide some support for the AUD/USD pair, potentially limiting further declines.
RBA’s Steady Rates and PBoC’s Unchanged LPRs Impact on AUD/USD
On the AUD front, the AUD/USD pair could see some appreciation following the Reserve Bank of Australia's (RBA) August meeting minutes.
These minutes revealed that the RBA considered raising interest rates but ultimately decided that keeping the cash rate steady would better balance the economic risks.
RBA members agreed that a rate cut is unlikely in the near future, suggesting that the cash rate could remain unchanged for an extended period.
This decision reflects the RBA's cautious approach to managing inflation and economic growth, which may provide some support for the Australian dollar against the US dollar.
On the other side, the People's Bank of China (PBoC) kept its one-year and five-year Loan Prime Rates (LPRs) unchanged in August at 3.35% and 3.85%.
Since China is a key trade partner for Australia, any shifts in the Chinese economy could affect Australian markets.
Therefore, RBA's decision to keep rates steady could boost the AUD/USD pair, supporting the Australian dollar. However, China's unchanged LPRs mean any economic changes in China might also impact the pair.
Impact of US Economic Data and Fed Signals on AUD/USD Pair
On the US front, the US Dollar (USD) is under pressure following comments from Federal Reserve (Fed) officials hinting at possible rate cuts.
Minneapolis Fed President Neel Kashkari suggested discussing rate cuts in September due to concerns about a weakening job market.
San Francisco Fed President Mary Daly advocated for a gradual approach to lowering borrowing costs. Chicago Fed President Austan Goolsbee warned against keeping restrictive policies too long.
On the data front, US Housing Starts fell by 6.8% to 1.238 million units in July after a slight increase in June.
However, the University of Michigan’s Consumer Sentiment Index rose to 67.8 in August, marking its first gain in five months. US Retail Sales surged 1.0% in July, a sharp rebound from June’s decline, and Initial Jobless Claims for early August were lower than expected at 227,000.
Meanwhile, the Consumer Price Index (CPI) rose 2.9% year-over-year in July, slightly below June's rate, while Core CPI increased 3.2%, matching forecasts.
The USD's weakness from potential Fed rate cuts and mixed economic data could support the AUD/USD pair. Strong retail sales and consumer sentiment may bolster the Australian dollar against the USD.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at $0.67258, showing a modest decline of 0.18%. The pivot point at $0.6738 is crucial for determining the short-term direction.
Immediate resistance is located at $0.6754, with further resistance levels at $0.6771 and $0.6792. On the downside, support levels are found at $0.6704, $0.6684, and $0.6666.
The Relative Strength Index (RSI) stands at 74, indicating that the pair is in overbought territory, which could suggest a potential pullback or correction.
The 50-day Exponential Moving Average (EMA) is positioned at $0.6621, providing a strong support level that reinforces the ongoing bullish trend.
Given the current technical setup, if AUD/USD remains above the $0.6704 support level, the bullish outlook is likely to continue.
A break above the immediate resistance at $0.6754 could push the pair higher towards $0.6771 and beyond.
However, if the pair falls below $0.6704, it could trigger a deeper correction towards the next support levels.
Conclusion: The strategy here is to buy above $0.67037, targeting a profit at $0.67652 with a stop loss at $0.66693.
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GOLD Price Analysis – Aug 20, 2024
GOLD Price Analysis – Aug 19, 2024
Daily Price Outlook
Gold prices (XAU/USD) began the week on a bearish note, moving away from Friday's record high, and trading defensively around the $2,500 level.
The retreat in gold's value comes despite dovish Federal Reserve (Fed) expectations and escalating geopolitical tensions in the Middle East, which continue to support the metal's appeal as a safe-haven asset.
The market's focus is now on upcoming Fed developments, with investors eyeing the release of the FOMC minutes and Fed Chair Jerome Powell's speech at the Jackson Hole Symposium for further cues on the rate-cut path.
Impact of Fed Rate Cut Expectations and Geopolitical Tensions on Gold Prices
On the US front, the broad-based US dollar remains under pressure, touching its lowest level since January, as markets fully price in a 25 basis point (bps) rate cut at the Fed’s September meeting.
This expectation has led to a decline in US Treasury bond yields, further weighing on the dollar.
Despite last week's upbeat US Retail Sales data and an improved US Consumer Sentiment Index, the Fed’s anticipated policy easing has overshadowed these positive indicators, supporting gold prices.
On the other side, geopolitical risks are also playing a crucial role in limiting gold's losses.
The ongoing Russia-Ukraine war and rising tensions in the Middle East, particularly following Hamas’s rejection of a ceasefire deal and Russia’s vow to retaliate against Ukraine’s recent cross-border attack, have fueled demand for the safe-haven asset.
Thus, while strong US economic data has exerted pressure on gold, the combination of a bearish US dollar, Fed rate cut expectations, and geopolitical uncertainties may continue to provide a supportive backdrop for gold prices in the near term.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,500.205, reflecting a slight decline of 0.22%. The metal has been trading just above its pivot point at $2,480.00, which is a critical level to watch.
The RSI is sitting at 66, indicating that gold is approaching overbought territory, which may signal a potential for a short-term pullback.
The 50-day Exponential Moving Average (EMA) at $2,445.98 is providing strong support and maintaining the overall bullish sentiment.
Immediate resistance is found at $2,524.11, followed by $2,540.75 and $2,556.71. On the downside, the first level of support is at $2,491.41, with stronger support at $2,480.08 and $2,461.80.
If gold breaks below $2,480, it could trigger further selling pressure.
Given the current setup, a sell entry below $2,510 with a target of $2,480 could be a strategic move.
A stop loss at $2,525 would help manage risk if the price reverses and breaks above resistance.
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EUR/USD Price Analysis – Aug 19, 2024
EUR/USD Price Analysis – Aug 19, 2024
Daily Price Outlook
During the European trading session on Monday, the GBP/USD currency pair surged to a one-month high, trading around the mid-1.2900s.
This upward momentum was supported by diminishing expectations of a Bank of England (BoE) rate cut in September, alongside a weaker US dollar, which has been pressured by dovish Federal Reserve (Fed) expectations.
The pair’s strong performance follows a significant bounce from the 200-day Simple Moving Average (SMA), signaling renewed bullish sentiment among traders.
The British Pound (GBP) remains buoyed by last week’s robust UK economic data, which has dampened hopes for an imminent rate cut by the BoE.
Meanwhile, the US dollar (USD) struggles to gain traction as investors anticipate the Fed’s rate-cutting cycle to begin as early as September.
These factors collectively underpin the GBP/USD pair’s strength, with traders now looking ahead to key events later in the week for further guidance.
GBP/USD Volatility Expected Amidst BoE Rate Cut Speculations and Fed Dovishness
On the BoE front, the Pound Sterling has maintained its strength against major currencies, supported by expectations that the BoE may hold off on cutting rates in September.
This follows stronger-than-expected UK economic data, which suggests resilience in the economy.
However, the market remains cautious as investors await more data, particularly the FOMC meeting minutes and Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium later this week, for clearer direction on the Fed’s policy stance.
Despite the market’s focus on the Fed, the absence of significant UK or US macroeconomic data early in the week has led traders to tread carefully, awaiting more substantial cues before committing to aggressive directional bets.
The GBP/USD pair could experience heightened volatility as the week progresses, particularly in response to global PMIs and any updates on the Fed’s rate-cut path.
Impact of Federal Reserve Rate Cut Expectations and Geopolitical Tensions on GBP/USD
On the US front, the US dollar continues to languish near its lowest levels since January, weighed down by dovish Fed expectations.
The market remains convinced that the Fed will begin cutting rates in September, following recent comments from San Francisco Fed President Mary Daly, who emphasized a gradual approach to easing monetary policy.
This sentiment has kept US Treasury bond yields depressed, further pressuring the USD and benefiting the GBP/USD pair.
Moreover, the prevalent risk-on sentiment in global markets has reduced demand for the safe-haven US dollar, contributing to the GBP’s recent strength.
Traders are now closely monitoring upcoming events, including the FOMC meeting minutes and Fed Chair Powell’s speech, for any signals that could alter the Fed’s policy trajectory and impact the GBP/USD pair’s outlook.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.10399, showing a slight uptick of 0.11% as the pair hovers near key technical levels.
The pivot point at $1.1073 is the critical level to watch. If the price breaks above this pivot, it could signal further gains.
The RSI is at 69, indicating that while the pair is approaching overbought territory, there is still room for upward movement before a potential pullback.
The 50-day Exponential Moving Average (EMA) at $1.0958 is trending upward, supporting the bullish outlook.
Immediate resistance is found at $1.1072, just below the pivot, followed by stronger resistance at $1.1105 and $1.1140.
On the downside, immediate support is at $1.0986, with additional support levels at $1.0956 and $1.0914. A break below these levels could signal a shift in momentum to the downside.
For traders, a buy entry above $1.10197 with a target of $1.10728 could be a strategic move, capturing potential gains as the pair approaches the pivot.
A stop loss at $1.09853 would help manage risk in case of an unexpected downturn.
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GBP/USD Price Analysis – Aug 19, 2024
GBP/USD Price Analysis – Aug 19, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward rally and surged to its year-to-date (YTD) highs, hovering around 1.1040.
This rise was fueled by a weakening US Dollar (USD) amid increasing expectations of a Federal Reserve rate cut in September.
Market participants are closely watching Fed Chair Jerome Powell's upcoming speech on Friday for additional insights into the potential interest rate cuts.
The dovish remarks from Fed officials have exerted selling pressure on the USD, further supporting the EUR/USD pair's upward momentum.
EUR/USD Gains Amidst Fed Rate Cut Speculations and ECB Policy Outlook
On the US front, the broad-based US dollar continues to face pressure as traders increasingly bet on a rate cut at the next Fed meeting.
San Francisco Fed President Mary Daly's recent comments highlighted her confidence that inflation is under control, suggesting it might be time to consider adjusting borrowing costs.
Meanwhile, Chicago Fed President Austan Goolsbee echoed similar sentiments, cautioning against maintaining restrictive policies longer than necessary.
These dovish signals have led investors to price in a 70% probability of a quarter-point rate cut in September, with some even expecting a half-point reduction. This environment has created a supportive backdrop for the EUR/USD pair.
Impact of ECB Rate Path Expectations on EUR/USD
Across the Atlantic, the Euro (EUR) is gaining ground as the European Central Bank (ECB) is expected to reduce interest rates gradually. ECB President Christine Lagarde emphasized the bank's data-dependent approach, indicating that policymakers are not committed to a specific rate path.
This cautious stance by the ECB, coupled with the weakening USD, is contributing to the EUR/USD pair's strength. Investors will continue to monitor developments in the Eurozone and any updates from ECB officials that could influence the pair's trend.
GBP/USD - Technical Analysis
GBP/USD is currently trading at $1.29542, reflecting a modest increase of 0.07%. The pair is trading just below its pivot point of $1.2997, which is a crucial level to watch.
The Relative Strength Index (RSI) is at 78, indicating that the pair is in overbought territory, which could suggest that a short-term pullback might be on the horizon.
However, the overall trend remains bullish, supported by the 50-day Exponential Moving Average (EMA) at $1.2800.
Immediate resistance is found at $1.2978, followed by more substantial resistance levels at $1.3034 and $1.3082.
On the downside, the first level of support is at $1.2886, with further support at $1.2846 and $1.2803. If GBP/USD can break above the pivot point, it may trigger further gains towards the higher resistance levels.
For those looking to trade this pair, a buy entry above $1.29351 with a take profit target at $1.29965 could be a strategic move.
A stop loss at $1.28938 would help manage risk in case of an unexpected downturn.
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GOLD Price Analysis – Aug 19, 2024
EUR/USD Price Analysis – Aug 16, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward momentum, hovering around the $1.0993 mark and reaching an intra-day high of 1.0993.
This upward movement was primarily driven by a weaker US dollar, which lost ground amid growing expectations that the Federal Reserve (Fed) might start cutting interest rates beginning with its September meeting.
Additionally, risk-on market sentiment, fueled by strong US economic data, was another key factor pressuring the US dollar and contributing to gains in the EUR/USD pair.
However, increasing bets on more ECB rate cuts could undermine the EUR currency and cap gains in the EUR/USD pair.
Impact of Federal Reserve's Dovish Signals on EUR/USD Amid Strong US Data
Despite Thursday's upbeat US macro data, the broad-based US dollar failed to halt its downward trend and edged lower on the day as markets anticipate a Federal Reserve interest rate cut in September.
Federal Reserve officials, including Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard, have hinted that a rate cut might be needed soon due to easing inflation pressures and changing economic risks.
This situation has created uncertainty about the dollar's future performance. These developments are likely to influence the EUR/USD pair, potentially weakening the dollar against the euro if the Fed signals a dovish monetary policy stance in response to economic conditions.
On the data front, the US Census Bureau reported a 1% increase in retail sales for July, surpassing expectations of a 0.3% rise.
Excluding autos, sales were up 0.4%, exceeding the anticipated 0.1% gain. Additionally, the US Department of Labor (DOL) disclosed that initial jobless claims for the week ending August 10 totaled 227,000, better than the expected 235,000 and the previous week’s 234,000.
These stronger-than-expected figures underscore the resilience of the US economy and reinforce the view that the labor market remains robust.
ECB Rate Cut Expectations and EUR/USD Short-Term Outlook
On the EUR front, expectations that the European Central Bank (ECB) will cut rates further due to declining inflation in the Eurozone are limiting gains for the EUR/USD pair.
Despite this, the pair remains on track for modest weekly gains, with some buying support near the 1.0990 level on Thursday suggesting caution before expecting deeper losses.
Traders are now focusing on upcoming US macro data, including Building Starts, Housing Permits, and the Preliminary Michigan Consumer Sentiment Index, for short-term trading opportunities.
EUR/USD - Technical Analysis
EUR/USD is showing signs of a potential bullish breakout, currently trading at $1.09842, up 0.04% for the day.
The pair is hovering just above its pivot point at $1.0972, which is a key level to watch for further upside.
Immediate resistance is seen at $1.1043, and if the pair can close above this level, it could target the next resistance levels at $1.1073 and $1.1105.
The Relative Strength Index (RSI) is moderately positioned at 55, indicating there's room for further upward movement before entering overbought territory.
The 50-day Exponential Moving Average (EMA) at $1.0947 is providing solid support, reinforcing the bullish outlook.
Immediate support levels are at $1.0883 and $1.0845, with an additional safety net at $1.0922. These levels are crucial to maintain the current bullish momentum.
If the price dips below $1.0972, a short-term pullback could be in the cards, but the overall outlook remains positive as long as it holds above the 50-day EMA.
For those considering entering the market, buying above $1.0972 could be a strategic move, targeting a take-profit at $1.10339.
A stop-loss should be placed at $1.09376 to manage potential downside risks. The key area to watch is the $1.1043 resistance, which could determine the sustainability of this bullish trend.
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S&P500 (SPX) Price Analysis – Aug 16, 2024
S&P500 (SPX) Price Analysis – Aug 16, 2024
Daily Price Outlook
During the European trading session, the S&P 500 index has experienced a robust upward trend recently, driven by renewed investor confidence in the U.S. economy.
On Thursday, the index climbed 1.61% to close at 5,543.22, marking its sixth consecutive gain. This rally has pushed the index up by approximately 8% from its intraday low on August 5.
However, the primary reason behind this surge has been stronger-than-expected consumer and labor data.
July's retail sales increased by 1%, far exceeding expectations of a 0.3% rise, while weekly jobless claims fell, indicating a resilient labor market.
These encouraging figures have alleviated recession fears and bolstered market sentiment, contributing to the S&P 500's impressive performance.
Strong Economic Data and Fed Rate Cut Expectations Propel S&P 500 Higher
On the US front, the Federal Reserve's anticipated rate cuts and the subsequent weakening of the US dollar have significantly contributed to the S&P 500's upward momentum.
With inflation pressures easing, the market is now fully expecting a 25 basis point rate cut at the Fed's September meeting.
This has driven a slight decline in US Treasury yields, softening the dollar's recent strength. Additionally, robust economic indicators, such as stronger-than-expected retail sales and a resilient labor market, have bolstered investor confidence.
On the data front, US Retail Sales rose by 1.0% month-over-month in July, rebounding sharply from June's 0.2% decline and surpassing the 0.3% forecast.
Initial Jobless Claims for the week ending August 9 dropped to 227,000, better than the expected 235,000 and lower than the previous week's 234,000.
Meanwhile, the US headline Consumer Price Index (CPI) increased by 2.9% year-over-year in July, down from June’s 3% rise and below expectations.
The Core CPI, excluding food and energy, rose by 3.2% year-over-year, slightly down from 3.3% in June but in line with forecasts.
Therefore, the stronger-than-expected retail sales and resilient job market boosted investor confidence, while easing inflation pressures supported expectations of Fed rate cuts, driving the S&P 500 index higher
Geopolitical Tensions Exert Downward Pressure on S&P 500
On the geopolitical front, the increasing tensions, particularly in the Middle East and the ongoing Russia-Ukraine conflict, have capped gains in the S&P 500.
Recent events, such as the assassination of a Hamas leader and the ongoing violence in Gaza and the West Bank, have heightened market anxieties.
Hence, the heightened geopolitical tensions, including Middle East violence and the Russia-Ukraine conflict, have increased market anxiety, leading investors to seek safer assets, thereby exerting downward pressure on the S&P 500.
S&P 500 - Technical Analysis
The S&P 500 is showing strong upward momentum, currently trading at $5,543.21, up 1.61% for the day.
This surge positions the index above its pivot point at $5,512, suggesting that the bulls are firmly in control.
The next immediate resistance is seen at $5,586, and a break above this level could push the index toward $5,666, with a further target at $5,763.
However, traders should be cautious as the RSI is approaching overbought territory, currently sitting at 64.
The 50-day Exponential Moving Average (EMA) at $5,454 provides a solid support base, reinforcing the current bullish trend.
Immediate support lies at $5,441, with additional safety nets at $5,343 and $5,234. These levels are crucial for maintaining the upward momentum.
If the price dips below $5,441, we might see a short-term correction, but as long as it stays above the $5,454 EMA, the outlook remains positive.
For those looking to enter the market, buying above $5,510 could be a strategic move, targeting a take-profit at $5,644.
A stop-loss should be placed at $5,440 to manage downside risk. The key to watch will be how the index reacts around the $5,586 resistance level, which could determine the sustainability of this bullish run.
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EUR/USD Price Analysis – Aug 16, 2024
GOLD Price Analysis – Aug 16, 2024
Daily Price Outlook
Gold prices (XAU/USD) were unable to stop their early-day losing streak and remain under pressure around the $2,454 level, hitting an intraday low of $2,450.
This decline is driven by recent positive US economic data, which has alleviated fears of a sharp economic slowdown and bolstered investor confidence, reducing the demand for gold as a safe haven.
Conversely, rising concerns about a potential escalation in the Middle East conflict and expectations of an imminent Federal Reserve (Fed) policy easing have helped to temper gold's losses.
Traders are now looking ahead to upcoming US macroeconomic releases, including Building Permits, Housing Starts, and the Preliminary Michigan Consumer Sentiment Index, for potential short-term trading opportunities.
Impact of Fed Rate Cut Expectations and Strong US Data on Gold Prices
On the US front, the broad-based US dollar struggled to gain bullish momentum and edged lower as markets fully anticipated a 25 basis point (bps) rate cut at the upcoming Federal Reserve (Fed) meeting in September.
This expectation led to a slight retreat in US Treasury bond yields, restricting the dollar's ability to capitalize on recent gains despite strong US macro data, including better-than-expected Retail Sales for July and a resilient labor market.
Fed officials, such as Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard, have suggested that a rate cut could be appropriate soon, given the cooling inflation and shifting risks to economic growth.
On the data front, US Retail Sales rose by 1.0% month-over-month in July, rebounding sharply from June's 0.2% decline and surpassing the 0.3% forecast.
Initial Jobless Claims for the week ending August 9 dropped to 227,000, better than the expected 235,000 and lower than the previous week's 234,000.
Meanwhile, the US headline Consumer Price Index (CPI) increased by 2.9% year-over-year in July, down from June’s 3% rise and below expectations.
The Core CPI, excluding food and energy, rose by 3.2% year-over-year, slightly down from 3.3% in June but in line with forecasts.
Therefore, the bearish US dollar and expectations of a Fed rate cut may help limit gold's losses, even as strong US data puts pressure on gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold is currently hovering around $2,454.84, down 0.15% for the day. The metal is showing signs of consolidation as it trades within a broad range, with the immediate pivot point at $2,477.00 acting as a crucial level.
The $2,477.21 resistance level is proving to be a significant barrier for gold's upward momentum. If gold manages to break through this level, the next targets are $2,496.82 and $2,515.33.
However, failure to do so could see gold retreat toward its immediate support at $2,432.56, with further support levels at $2,416.68 and $2,400.29.
Technical indicators are showing a mixed picture. The Relative Strength Index (RSI) is currently at 52, indicating a neutral stance, leaving room for either upward or downward movement.
Meanwhile, the 50-day Exponential Moving Average (EMA) at $2,433.43 is providing strong support, suggesting that the bullish trend could continue if prices stay above this level.
Given the current setup, the strategy is to buy gold above $2,452, with a target of $2,477. A stop-loss should be placed at $2,440 to manage downside risk.
The $2,477.21 level will be key in determining whether gold can push higher or if it will face more selling pressure.
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EUR/USD Price Analysis – Aug 16, 2024
AUD/USD Price Analysis – Aug 15, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair experienced a bullish trend and drew strong bid around the 0.6628 level, and reaching an intra-day high of 0.6631.
This recovery was fueled by the release of upbeat employment data in Australia and supportive economic signals from China.
The Australian Dollar (AUD) managed to regain some ground after facing downward pressure due to declining commodity prices and mixed economic indicators.
In contrast, the US Dollar (USD) weakened following moderate inflation data that led investors to reassess Federal Reserve (Fed) interest rate expectations.
Impact of Australian Economic Data and RBA Stance on AUD/USD Pair
On the AUD front, the AUD/USD pair's recovery is partly attributed to the Reserve Bank of Australia's (RBA) monetary policy outlook.
Despite challenges from falling copper and iron ore prices, which have added pressure on the commodity-linked currency, the RBA's hawkish stance remains a key support factor.
RBA Governor Michele Bullock emphasized that the central bank is vigilant about inflation risks and is prepared to increase rates further if necessary.
On the data front, the Australian Employment Change for July showed a robust increase of 58.2K, surpassing expectations of 20.0K, although the Unemployment Rate edged up to 4.2% from the anticipated 4.1%.
Additionally, China's economic data, including a 2.7% increase in Retail Sales and a moderate 5.1% rise in Industrial Production, provided a backdrop of cautious optimism.
Despite the positive employment data, Australia's Westpac Consumer Confidence increased by 2.8% in August, reversing a 1.1% decline in July, reflecting improved sentiment.
However, the Wage Price Index for Q2 was slightly below expectations at 0.8%, highlighting ongoing economic uncertainties.
Therefore, the RBA's cautious approach and high wage growth expectations continue to influence the AUD/USD pair, with market participants closely monitoring the central bank's next moves.
Impact of US Economic Data and Fed Rate Cut Expectations on AUD/USD Pair
On the US side, the AUD/USD pair gained momentum as the US Dollar (USD) lost its traction and edged lower amid dovish Federal Reserve’s (Fed) interest rate outlook.
It should be noted that the moderate increase in July’s Consumer Price Index (CPI) to 2.9% year-over-year, coupled with a slight decrease in Core CPI to 3.2%, has fueled speculation about potential Fed rate cuts.
Market expectations currently lean towards a modest 25 basis point cut in September, with a 36% chance of a larger 50 basis point reduction.
However, Federal Reserve officials, including Chicago Fed President Austan Goolsbee and Governor Michelle Bowman, have expressed concerns about inflation risks and the labor market.
These remarks suggest that substantial rate cuts may be less likely, which could temper the US Dollar’s weakness.
AUD/USD - Technical Analysis
The AUD/USD pair is showing a modest uptick, currently trading at $0.66210, which is slightly above its pivot point of $0.66058.
This positioning suggests a bullish sentiment in the short term, especially as the price is holding above the 50-day Exponential Moving Average (EMA) at $0.66015.
The 4-hour chart indicates that the pair is trying to build momentum, with the immediate resistance at $0.66434 being the next hurdle for bulls to overcome.
If the pair can break through this resistance, it may target higher levels at $0.66696 and $0.67019, signaling a continuation of the upward trend.
However, on the downside, the immediate support lies at $0.65809, followed by $0.65471 and $0.65127. These support levels are crucial; a break below them could indicate a shift in sentiment towards a bearish outlook.
The Relative Strength Index (RSI) is currently at 54, which suggests that the market is neither overbought nor oversold, allowing room for further movement in either direction.
With the price hovering around the pivot point and supported by the 50 EMA, the technical outlook leans slightly bullish for now.
For traders looking to enter the market, a buy limit order at $0.66051 could be strategic, with a take profit set at $0.66666. Setting a stop-loss at $0.65707 would help manage risk in case of an unexpected downturn.
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GOLD Price Analysis – Aug 15, 2024
GOLD Price Analysis – Aug 15, 2024
Daily Price Outlook
Gold (XAU/USD) has reclaimed its momentum, drawing bids around the $2,459.10 level and reaching an intra-day high of $2,460.36.
This surge is primarily fueled by expectations of a potential Federal Reserve rate cut in September, which weakens the US dollar and supports gold prices.
Additionally, escalating geopolitical tensions in the Middle East are bolstering gold’s appeal as a safe-haven asset. Iran's decision to ignore Western nations' warnings against retaliating after a Hamas leader was killed in Tehran is making the Middle East more unstable.
This rising tension is leading investors to buy more gold as a safe investment, which increases gold prices.
Impact of Changing Rate Cut Expectations and Fed Caution on Gold Prices
On the US front, the US dollar is weakening as expectations grow for a Federal Reserve rate cut in September.
This weaker dollar is making gold more attractive to investors, pushing up its price. Investors are now looking forward to important economic reports coming later this week, such as US Retail Sales, Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production.
Recent inflation data from July showed that the Consumer Price Index (CPI) rose by 0.2% from the previous month, with an annual increase of 2.9%.
Core CPI, which excludes food and energy prices, also rose by 0.2% month-over-month and 3.2% year-over-year.
These figures will help investors gauge the future direction of the economy and Federal Reserve policies, influencing gold and other financial markets.
Phillip Streible from Blue Line Futures mentions that market expectations have changed from a 50 basis point rate cut to a smaller 25 basis point cut, which is slowing gold's price increase.
Now, there is a 41% chance of a 50 basis point cut, down from 50% before the recent inflation data was released.
Additionally, Federal Reserve officials, including Atlanta Fed President Raphael Bostic, are being cautious and not committing to a specific rate cut schedule. This uncertainty is affecting gold’s momentum as investors adjust their expectations.
Therefore, the expectation of a smaller 25 basis point rate cut, along with cautious Fed officials, is likely to slow down gold's price increase. While a weaker dollar helps support gold, the reduced likelihood of a bigger rate cut may limit how much gold can rise.
GOLD (XAU/USD) - Technical Analysis
Gold is showing some strength as it edges higher, currently trading at $2,456.89. The price is slightly above the pivot point at $2,452.47, suggesting a bullish bias in the near term.
The 4-hour chart shows that the price has been supported by the 50-day Exponential Moving Average (EMA), which is currently at $2,451.75, reinforcing the bullish sentiment.
Immediate resistance is seen at $2,477.21, followed by more substantial resistance levels at $2,496.82 and $2,515.33.
If gold can break through these levels, it could signal a stronger upward move. On the downside, immediate support lies at $2,433.75, with further support at $2,416.68 and $2,397.96.
These levels are crucial to watch, as a break below the pivot point could shift momentum to the bears.
The Relative Strength Index (RSI) is currently at 52, indicating that the market is neither overbought nor oversold, leaving room for further movement in either direction.
However, with the price holding above the pivot and the 50 EMA, the short-term outlook remains positive.
For those looking to enter a position, buying above $2,452 with a take-profit target at $2,477 could be a strategic move. A stop-loss at $2,440 would help manage risk if the market reverses.
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USD/JPY Price Analysis – Aug 15, 2024
USD/JPY Price Analysis – Aug 15, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair experienced a bearish trend and edged lower around 147.28 level as the Japanese Yen (JPY) gaining strength against the US Dollar (USD).
This downward movement in the USD/JPY pair was driven by Japan's stronger-than-expected Gross Domestic Product (GDP) data for Q2, raising expectations for a potential hawkish stance from the Bank of Japan (BoJ).
While the Japanese Yen strengthens on the back of positive GDP figures, the US Dollar faces pressure from potential Fed rate cuts and mixed economic signals.
This combination of factors is driving the USD/JPY pair lower, with ongoing market adjustments to central bank expectations likely to influence future movements.
Japan's Robust GDP Growth and BoJ Policy Expectations Bolster JPY
On the JPY front, Japan's GDP growth for Q2 surged by 0.8%, surpassing market forecasts of 0.5% and marking the strongest quarterly growth since early 2023.
The annualized GDP growth also reached 3.1%, exceeding the expected 2.1%. This robust economic performance is bolstering expectations that the BoJ might shift towards a more hawkish policy.
This underpinned the JPY currency and contributed to the USD/JPY pair. Japanese Economy Minister Yoshitaka Shindo's remarks about a gradual economic recovery driven by improving wages and income, along with the BoJ's goal of a neutral rate "at least around 1%" as a medium-term target, support the Yen's strength.
Impact of Fed Rate Cut Expectations and US CPI Data on USD/JPY Decline
On the US front, the pair decline is also influenced by the Federal Reserve’s potential policy decisions.
Despite recent improvements in Treasury yields, the anticipation of a potential 25 basis point rate cut by the Fed in September is pressuring the US Dollar, which was seen as another key factor that put pressure on USD/JPY pair.
On the data front, US CPI data for July showed a moderate 2.9% annual increase, leading to speculation about the extent of future Fed rate cuts.
Traders are leaning towards a smaller 25 basis point reduction, with a 36% chance of a larger 50 basis point cut, as indicated by CME FedWatch.
This dovish sentiment from the Fed, coupled with concerns about labor market conditions, is adding to the downward pressure on the USD.
USD/JPY - Technical Analysis
USD/JPY is currently trading at $147.211, showing a slight decline as it moves closer to the pivot point at $147.864.
The pair has been in a tight range, reflecting a cautious market sentiment. The 4-hour chart reveals that the 50-day Exponential Moving Average (EMA) at $146.386 is providing solid support, suggesting that the pair might find some stability at these levels before making its next move.
Immediate resistance is seen at $149.365, with further resistance at $150.900 and $152.597. If USD/JPY breaks above these levels, we could see a continuation of the uptrend.
However, the downside risks are also significant. Immediate support is at $145.514, followed by $143.462 and $141.787. A break below these supports could accelerate the downward momentum.
The Relative Strength Index (RSI) is hovering near neutral levels, indicating that the market is neither overbought nor oversold, leaving room for potential volatility.
Given the current setup, traders should be cautious about both upside and downside risks.
For those looking to trade, a sell limit order around $147.850 could be effective, with a take-profit target at $145. Setting a stop-loss at $149.350 would help manage potential losses if the market unexpectedly turns bullish.
Overall, while the technical indicators suggest some downside risk, it’s essential to watch the key levels closely.
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