GOLD Price Analysis – Aug 14, 2024
Daily Price Outlook
Gold prices (XAU/USD) managed to halt their downward trend and regained bullish momentum, reaching an intraday high of 2,478.40 on Wednesday, after stabilizing around the 2,475.31 level.
The gains were primarily driven by renewed selling pressure on the US dollar, which weakened amid soft U.S. producer inflation data, heightening expectations for more significant interest rate cuts. Moreover, the escalating geopolitical tensions in the Middle East and concerns over a potential regional conflict provided further support to the gold price.
Cooling Inflation and Rate Cut Expectations Boost Gold Prices Amid Weaker US Dollar
On the US front, the Bureau of Labor Statistics (BLS) will release the July Consumer Price Index (CPI) inflation data on Wednesday at 12:30 GMT, which is expected to cause significant volatility in the US Dollar (USD). This report could shape market expectations for potential Federal Reserve interest rate cuts in September.
As inflation appears to be cooling, there is growing anticipation of deeper rate cuts, which could benefit gold prices, especially as the USD weakens and US Treasury bond yields decline. Atlanta Fed President Raphael Bostic even mentioned he might support a rate cut by the end of the year if the data continues to confirm this trend.
Recent data shows that the US Producer Price Index (PPI) rose by 2.2% in July, down from 2.7% in June, signaling cooling inflation. The CPI for July is expected to show a 2.9% annual rise, slightly lower than June’s 3%, with core CPI projected to decrease slightly.
This cooling inflation, along with a weaker-than-expected jobs report, has increased speculation about multiple rate cuts by the Fed, with market expectations split on whether a 50-basis point cut will occur in September.
This news supports gold's bullish momentum, as expectations of deeper Federal Reserve rate cuts amid cooling inflation weaken the US Dollar and lower Treasury yields. This environment boosts demand for gold as a safe-haven asset, driving prices higher.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,469.29, down 0.23% for the day, as it hovers near a critical juncture.
The price is sitting just below the pivot point at $2,488.00, which serves as a significant level to watch.
The daily chart shows that gold has been in a consolidation phase, bouncing between key support and resistance levels.
The immediate support is at $2,444.65, followed by stronger support at $2,421.89 and $2,394.40.
If gold continues its descent and breaches these levels, we could see a more pronounced bearish trend emerge.
On the flip side, the immediate resistance is at $2,496.82, with further resistance at $2,515.33 and $2,535.14.
A break above the pivot point could signal a bullish move, potentially driving the price toward these higher levels.
The RSI is currently at 65, indicating that gold is nearing overbought conditions but still has room to move higher if bullish momentum picks up.
The 50-day Exponential Moving Average (EMA) at $2,427.92 is providing underlying support, aligning with the broader uptrend seen over the past few weeks.
Given the current setup, a potential buy entry above $2,455 could be a strategic move, with a take profit target at the pivot point of $2,488.00.
A stop-loss placed at $2,437 would help manage risk in case the bearish scenario plays out. The key is to watch how gold reacts around the pivot point; a clear move above it could open the door for further gains, while failure to break it may lead to a deeper correction.
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- EUR/USD Price Analysis – Aug 14, 2024
EUR/USD Price Analysis – Aug 14, 2024
Daily Price Outlook
During Wednesday's European trading session, the EUR/USD currency pair reclaimed a seven-month high, trading around 1.1023 level.
This upward momentum was driven by the Euro's strong performance against its major peers, as market participants anticipate further interest rate cuts from the European Central Bank (ECB).
The pair's strength was also supported by the subdued outlook for the US Dollar (USD) amid growing speculation of Federal Reserve rate cuts later this year.
EUR/USD Reaches Seven-Month High on ECB Rate Cut Expectations and Steady Eurozone Growth
The shared currency gained traction during European session, with the EUR/USD pair reaching its highest level in seven months. This surge was fueled by expectations that the ECB will continue its gradual policy-easing cycle, following its first rate cut in June.
Market sentiment has been bolstered by a Reuters poll, which showed that over 80% of respondents expect the ECB to cut rates two more times this year, once in September and again in December.
Meanwhile, the ECB's cautious approach to interest rate cuts stems from concerns about re-accelerating inflation, despite confidence that price pressures will return to the bank’s 2% target by 2025.
The central bank has refrained from committing to a predefined interest-rate cut trajectory, as aggressive expansionary policies could potentially reignite inflation.
On the economic front, Eurostat's revised estimates for Q2 Gross Domestic Product (GDP) confirmed that the Eurozone economy expanded by 0.3%, in line with initial flash estimates and the growth rate recorded in the first quarter.
This steady economic performance further supports the Euro’s recent strength, contributing to the positive sentiment surrounding the EUR/USD pair.
As the ECB navigates its cautious rate-cutting path, the EUR/USD pair may experience volatility, especially as investors digest upcoming economic data and further ECB commentary.
Impact of Federal Reserve Rate Cut Expectations and US CPI Data on EUR/USD
On the US front, the EUR/USD pair continues to benefit from the weakening US Dollar, driven by speculation that the Federal Reserve will start reducing interest rates as early as September.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, is hovering near a weekly low at 102.55, reflecting the market's anticipation of Fed rate cuts.
The US Producer Price Index (PPI) report for July, which showed softening price pressures, has reinforced expectations that the Fed might need to ease its monetary policy sooner rather than later.
The headline and core PPI both declined on a monthly and annual basis, suggesting that producers are losing pricing power amid weakening demand conditions.
Traders are now focusing on the upcoming US Consumer Price Index (CPI) data for July, scheduled for release at 12:30 GMT.
The CPI report is expected to show a 0.2% increase in both headline and core inflation on a monthly basis, with annual headline and core CPI projected to have decelerated to 2.9% and 3.2%, respectively.
However, the softer-than-expected CPI reading could further boost expectations for Fed rate cuts, potentially weakening the US Dollar and supporting the EUR/USD pair.
Conversely, if inflation numbers come in hotter than expected, it could dampen speculation of aggressive Fed rate cuts, which might exert downward pressure on the EUR/USD pair. Market participants will closely monitor the CPI data, as it will significantly influence the near-term direction of the EUR/USD pair.
EUR/USD- Technical Analysis
EUR/USD is trading at $1.10062, up slightly by 0.02%, as it hovers near its pivot point at $1.1010.
The pair has shown resilience, holding above key support levels, but it's facing strong resistance ahead. The daily chart indicates that the euro is testing crucial levels that could determine its next move.
Immediate support is found at $1.0963, with further support at $1.0946 and $1.0883. These levels are critical; if the euro slips below $1.0963, it could trigger a more significant decline.
On the upside, resistance is at $1.1043, followed by $1.1073 and $1.1105. A break above the pivot point at $1.1010 could signal a continuation of the recent bullish trend, potentially driving the price toward these higher targets.
The RSI is currently at 74, indicating that the pair is overbought and may be due for a pullback.
However, the 50-day Exponential Moving Average (EMA) at $1.0928 is trending upward, suggesting that the broader trend remains bullish.
This alignment of indicators supports a cautious approach, favoring buying opportunities above key levels while being mindful of the potential for a short-term correction.
For those looking to trade this pair, an entry above $1.09805 with a take profit target at $1.10356 could be strategic.
A stop-loss at $1.09461 would help protect against downside risk. The overall outlook suggests that while EUR/USD has the potential to climb higher, traders should be prepared for volatility as the pair tests these key levels.
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- GBP/USD Price Analysis – Aug 14, 2024
GBP/USD Price Analysis – Aug 14, 2024
Daily Price Outlook
During Wednesday's European trading session, the GBP/USD currency pair faced significant volatility, initially dropping to an intraday low of 1.2815 before recovering to near 1.2840 as the US Dollar weakened ahead of crucial US inflation data.
The GBP's recovery was driven by market anticipation of softer US CPI figures for July, which could influence the Federal Reserve's monetary policy decisions.
Despite the intraday recovery, the GBP remains under pressure due to easing inflation in the UK, which has increased the likelihood of future rate cuts by the Bank of England (BoE).
GBP/USD Volatility Expected Amidst BoE Rate Cut Speculations and Inflation Concerns
The Pound Sterling struggled against most major currencies during Wednesday’s London session after the UK’s Consumer Price Index (CPI) report for July came in softer than expected.
The annual headline CPI rose by 2.2%, below the forecasted 2.3%, and core inflation decelerated to 3.3%, compared to 3.4% expected. These figures have heightened market expectations for the BoE to initiate sequential interest-rate cuts, further pressuring the GBP.
Despite the softer inflation data, BoE MPC member Catherine Mann has expressed concerns about persistent inflation, particularly driven by the service sector, which has seen slower wage growth.
The recent UK Employment report showed a decline in wage growth, with Average Earnings Excluding Bonuses rising at a slower pace of 5.4%, the lowest in two years. This decline in wage growth is expected to ease some of the inflationary pressures in the UK economy, potentially supporting the BoE's case for more dovish monetary policy.
As a result, the GBP/USD pair is likely to remain volatile, with investors closely monitoring further UK economic data and BoE commentary for clues on future rate cuts.
Impact of Federal Reserve Rate Cut Expectations and CPI Data on GBP/USD
On the US front, the GBP/USD pair is heavily influenced by growing speculation of a Federal Reserve rate cut in September.
The latest US Producer Price Index (PPI) report for July showed softer-than-expected inflation, reinforcing expectations that the Fed might need to ease its monetary policy.
According to the CME FedWatch Tool, traders now see a 54.5% chance of a 50 basis point rate cut in September, a slight increase following the PPI data release.
The upcoming US Consumer Price Index (CPI) data for July is expected to show a slight deceleration in both headline and core inflation, with annual rates projected at 2.9% and 3.2%, respectively. If the CPI data confirms this slowdown, it could further weaken the US Dollar, supporting the GBP/USD pair's recovery.
However, if the CPI figures come in higher than expected, it could dampen market expectations for aggressive Fed rate cuts, potentially strengthening the US Dollar and applying renewed pressure on the GBP/USD pair.
Traders will be closely watching the CPI release at 12:30 GMT, as it will significantly influence the near-term direction of the GBP/USD pair.
GBP/USD - Technical Analysis
GBP/USD is currently trading at $1.28398, down 0.06% as it edges closer to key support levels. The currency pair is slightly below its pivot point of $1.2873, which is a critical level to monitor.
The daily chart shows that GBP/USD is in a delicate position, balancing between potential further losses and a possible recovery.
Immediate support is found at $1.2803, with subsequent supports at $1.2756 and $1.2701. If the pair breaks below these levels, it could signal a bearish continuation, potentially driving the price lower.
On the upside, resistance lies at $1.2934, followed by $1.2978 and $1.3030. A move above the pivot point at $1.2873 could shift momentum back in favor of the bulls, setting the stage for a test of these resistance levels.
The RSI is at 65, indicating that the pair is nearing overbought territory but still has some room to climb if buying pressure increases.
The 50-day Exponential Moving Average (EMA) at $1.2757 is providing solid support and aligning with the overall uptrend seen in recent sessions.
For traders considering a short position, an entry below $1.28551 could be strategic, with a take profit target at $1.27910. A stop-loss at $1.29034 would help manage risk if the pair unexpectedly moves higher.
The current technical setup suggests that GBP/USD could experience further downside pressure, but a break above the pivot could quickly change the outlook.
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USD/CAD Price Analysis – Aug 13, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair continued its downward trend, trading around the 1.3735 level and reaching an intra-day low of 1.3727.
This bearish movement is due to the weakening US dollar, which has been pressured by market expectations of potential Federal Reserve interest rate cuts.
On the other hand, the decline in crude oil prices is putting downward pressure on the commodity-linked Canadian dollar, which is somewhat mitigating the overall decline of the USD/CAD pair.
US Dollar Weakness and Fed Rate Cut Expectations Impact USD/CAD
On the US front, the broad-based US dollar has continued to weaken, driven by the dovish stance of the Federal Reserve. This decline is largely due to market expectations of a potential 50 basis point interest rate cut by the Fed in September.
Meanwhile, the upcoming US inflation data, including the Producer Price Index (PPI) on Tuesday and the Consumer Price Index (CPI) on Wednesday, are expected to show cooling inflation for July.
This could further support the Fed's potential easing of policy, contributing to the ongoing bearish trend in the dollar.
Therefore, the US dollar's ongoing weakness, driven by expectations of a 50 basis point rate cut and cooling inflation data, is putting downward pressure on the USD/CAD pair. This trend is exacerbated by the dovish Federal Reserve stance.
Impact of Falling Oil Prices and Bank of Canada Rate Cuts on the USD/CAD Pair
On the CAD front, the upticks in the USD/CAD pair might gain traction due to falling crude oil prices, which impact the Canadian dollar, a commodity-linked currency.
Canada’s largest export is crude oil, and the recent drop in West Texas Intermediate (WTI) oil prices to around $75.40 per barrel poses challenges for the CAD.
This decline is due to concerns about weaker demand and OPEC's reduced 2024 growth forecast for China, which continues to pressure the CAD.
Meanwhile, the Bank of Canada (BoC) is expected to cut interest rates by 25 basis points at both the September and October meetings, which could further weaken the Canadian dollar.
The combination of lower oil prices and potential rate cuts could fuel the CAD's strength, influencing the USD/CAD pair's movements.
USD/CAD - Technical Analysis
The USD/CAD pair is currently trading at $1.37326, down 0.02% on the 4-hour chart, showing a slight decline as it hovers just below the pivot point at $1.3748.
This level is crucial as it represents a potential turning point for the pair. If USD/CAD fails to break above this pivot, we might see further bearish movement.
The immediate resistance is at $1.3789, aligned with the 50-day Exponential Moving Average (EMA) at $1.3788. This area is a key resistance zone; a break above it could shift the momentum back to the bulls.
However, if the pair continues to trade below this resistance, the bearish outlook remains strong.
The next resistance levels are at $1.3841 and $1.3890, but these will only come into play if the pair manages to climb above $1.3789.
On the downside, immediate support is found at $1.3688, with further support levels at $1.3645 and $1.3603.
The Relative Strength Index (RSI) is at 41, suggesting there’s room for more downside before the pair becomes oversold.
Given the current technical setup, selling below $1.37475 with a target of $1.3688 and a stop loss at $1.37834 seems to be a sound strategy.
The market's inability to clear the 50-day EMA indicates that sellers are likely to maintain control in the short term.
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AUD/USD Price Analysis – Aug 13, 2024
AUD/USD Price Analysis – Aug 13, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair maintained a bullish stance and remained well bid around the 0.6598 level, reaching an intra-day high of 0.6610.
This upward momentum was driven by several factors, including hawkish sentiment surrounding the Reserve Bank of Australia (RBA).
Additionally, Australia's Westpac Consumer Confidence increased by 2.8% in August, reversing the 1.1% decline observed in July, which provided substantial support to the Australian dollar (AUD).
Meanwhile, the US dollar (USD) weakened as markets increasingly priced in the likelihood of Federal Reserve (Fed) interest rate cuts, further enhancing the AUD/USD pair's gains.
Risk-on sentiment in the markets also contributed to the pair's upward movement.
Impact of RBA Stance and Economic Data on AUD/USD Pair
On the AUD front, the AUD/USD pair might rise due to a hawkish stance from the Reserve Bank of Australia (RBA).
RBA Deputy Governor Andrew Hauser pointed out that persistent inflation is driven by weak supply and a tight labor market, with significant uncertainty in economic forecasts.
Westpac has revised its RBA outlook, now expecting the first rate cut in February 2025 instead of November 2024, and increasing its terminal rate forecast to 3.35% from 3.10%.
This shift indicates the RBA is more cautious and needs stronger evidence before cutting rates.
Meanwhile, Treasurer Jim Chalmers challenged the RBA's view on the economy, suggesting that large government budgets are adding to inflation.
Additionally, RBA Governor Michele Bullock stated that the bank is ready to raise rates further if necessary, following a steady rate of 4.35% for six consecutive meetings.
On the data front, Australia's Westpac Consumer Confidence rose by 2.8% in August, reversing a 1.1% drop in July.
The Wage Price Index stayed steady with a 0.8% increase in the second quarter, slightly missing the 0.9% forecast.
In China, the Consumer Price Index (CPI) climbed 0.5% year-on-year in July, surpassing the expected 0.3% and the previous 0.2% increase. The monthly CPI also rose 0.5%, recovering from a 0.2% decline earlier.
Therefore, the hawkish stance from the RBA and increased rate forecast could boost the AUD/USD pair, as higher rates typically strengthen the currency.
Conversely, mixed domestic data and China's CPI rise may add volatility but won't likely overshadow the RBA's impact.
Impact of Fed Rate Cut Expectations on AUD/USD Pair
On the US front, the AUD/USD pair is gaining momentum as the US Dollar faces pressure from expectations of a potential interest rate cut by the Federal Reserve (Fed) in September.
However, the likelihood of a significant 50-basis point cut has diminished. Traders are closely monitoring US producer inflation data on Tuesday and consumer inflation figures on Wednesday for signs that price growth remains steady.
Federal Reserve Governor Michelle Bowman highlighted ongoing inflation risks and strong labor market conditions, suggesting that the Fed might hold off on cutting rates in September.
Additionally, Kansas City Fed President Jeffrey Schmid noted that while reducing monetary policy could be considered if inflation remains low, the current policy is not excessively restrictive, and the Fed is still working toward its 2% inflation target.
Therefore, the AUD/USD pair may gain support as expectations of a Fed rate cut put pressure on the US Dollar.
However, diminished chances of a substantial cut and Fed officials' cautious comments on inflation might limit the pair's potential upside.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at $0.66043, up 0.09% on the 4-hour chart. The Australian dollar seems to be gaining some ground as it approaches key resistance levels.
The pivot point at $0.6580 is particularly important today; holding above this level suggests that the bulls may continue to push prices higher.
Immediate resistance is located at $0.6620, with further resistance at $0.6659 and $0.6702. If the price can break through these levels, it could signal a continuation of the upward trend.
On the downside, immediate support is found at $0.6547, followed by stronger support levels at $0.6508 and $0.6475.
The 50-day Exponential Moving Average (EMA) at $0.6540 is providing a solid base for the current bullish momentum.
The Relative Strength Index (RSI) is at 62, indicating that while the pair is in bullish territory, it's not yet overbought, leaving room for further gains.
Given the current technical setup, a buy limit at $0.65804 with a target of $0.66437 and a stop loss at $0.65428 seems to be a balanced approach.
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GOLD Price Analysis – Aug 13, 2024
Daily Price Outlook
Gold prices (XAU/USD) struggled to stop the early-day's downward momentum, remaining under pressure around the $2,460.07 level and reaching an intra-day low of $2,458.56.
This decline can be attributed to risk-on sentiment, which tends to reduce demand for safe-haven assets like gold.
However, rising geopolitical tensions in the Middle East and fears of a broader conflict in the region could help limit further losses for gold.
Moreover, heightened expectations that the Federal Reserve (Fed) might begin aggressively cutting interest rates in September have weakened the US dollar, potentially supporting gold prices in curbing further declines.
US Dollar Weakness and Fed Expectations Impact Gold Prices
On the US front, the broad-based US dollar is losing traction as dovish expectations for the Federal Reserve (Fed) weaken the currency, which is helping to cushion gold’s losses.
Markets are anticipating a significant 50 basis point interest rate cut by the Fed in September, providing further support to the yellow metal.
Meanwhile, upcoming US inflation data, including the Producer Price Index (PPI) on Tuesday and the Consumer Price Index (CPI) on Wednesday, are expected to show cooling inflation in July, potentially giving the Fed more room to ease policy.
Market forecasts suggest a 0.2% increase in both headline and core CPI, following June's 0.1% decline in headline inflation.
However, if the CPI readings exceed expectations, it could dampen hopes for aggressive Fed rate cuts, potentially putting downward pressure on gold prices.
Rising Middle East Tensions and Global Uncertainty Drive Gold Demand
On the geopolitical front, rising tensions in the Middle East are driving demand for safe-haven assets like gold.
Israel has intensified operations near Khan Younis in southern Gaza, sparking fears of a broader regional conflict, especially as Israel prepares for possible retaliation from Iran and Hezbollah following the assassination of Hamas leader Ismail Haniyeh in Tehran.
Meanwhile, Russian President Vladimir Putin has warned Ukraine of a strong response to its recent incursion into the Kursk region.
These developments are creating uncertainty and supporting gold prices. In Gaza, an overnight Israeli strike killed at least 10 people, and the conflict has resulted in nearly 40,000 deaths and over 92,000 injuries in Gaza, with more than 1,100 killed in Israel during the October 7 Hamas-led attacks.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,462.635, down 0.32% on the 4-hour chart. The precious metal seems to be facing a period of consolidation as it hovers just above key support levels.
The pivot point at $2,473.57 is crucial today; if prices remain below this level, we could see further downside momentum.
Immediate resistance is found at $2,496.82, followed by stronger barriers at $2,515.33 and $2,535.14.
On the flip side, immediate support lies at $2,439.98, with subsequent support levels at $2,417.59 and $2,392.62.
The 50-day Exponential Moving Average (EMA) is positioned at $2,425.35, providing a solid floor for now.
The RSI is currently at 65, indicating that while the market isn't overbought, there is limited room for a further upward push before selling pressure increases.
Given the current setup, a sell limit at $2,473 with a target of $2,440 and a stop loss at $2,497 seems prudent.
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EUR/USD Price Analysis – Aug 12, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward trend and remained well-bid around 1.0924, reaching an intra-day high of 1.0930.
This rally is largely due to a weaker US dollar, which lost ground amid rising expectations that the Federal Reserve (Fed) will cut interest rates at its next meeting.
Meanwhile, upbeat Eurozone economic growth of 0.3% also supports the EUR currency.
However, the Employment Change, a percentage measure indicating the increase in fresh payrolls, is expected to rise at a slower pace of 0.2% compared to the prior release of 0.3%, which may temper some of the positive sentiment.
Investors are waiting for key US inflation data before making significant moves on silver. This week’s reports include the Producer Price Index (PPI) on Tuesday, the Consumer Price Index (CPI) on Wednesday, and Retail Sales on Thursday.
In the Eurozone, revised Q2 GDP and preliminary Employment Change data will also be released on Wednesday.
These reports will influence Federal Reserve policy expectations, impacting the US dollar and, consequently, EUR/USD pair.
Impact of Eurozone Economic Growth and ECB Policy on EUR/USD
On the EUR front, the Eurozone's economy grew by 0.3% this quarter, matching earlier estimates and the previous quarter's growth. However, Employment Change is expected to slow to 0.2% from 0.3%, suggesting a more modest rise in new jobs.
Despite this, strong GDP figures are positive for the Euro (EUR) as they reduce the probability of further interest rate cuts by the European Central Bank (ECB).
Meanwhile, the ECB has shifted towards normalizing its policies, and investors are keen to see how much further the central bank will lower borrowing rates. Financial markets anticipate two more rate cuts this year.
Recently, Finnish ECB policymaker Olli Rehn highlighted that rate cuts could boost the Eurozone's economy, especially by supporting industrial growth and investment.
Consequently, the positive GDP growth and the expectation of fewer ECB rate cuts are likely to support the shared currency, strengthening the EUR/USD pair.
However, the slower Employment Change might limit gains, causing cautious trading around the EUR/USD.
Impact of Anticipated Fed Rate Cuts and CPI Data on EUR/USD
On the US front, traders are increasingly anticipating a Federal Reserve (Fed) rate cut at the next meeting, which could be beneficial for the EUR/USD pair.
However, the lower interest rates typically weaken the US dollar, making the EUR/USD pair more appealing.
According to the CME FedWatch Tool, there is a near-even chance of a rate cut, with a 49.5% probability of a 0.25% reduction and a 50.5% chance of a 0.50% cut in September.
On the data front, the Consumer Price Index (CPI) for July, due for release on Wednesday, is expected to show a 0.2% increase for both headline and core inflation, following a 0.1% decline in June.
The Producer Price Index (PPI), set for release on Tuesday, is forecast to rise by 0.1% in July, compared to a 0.2% gain in June.
If CPI exceeds expectations, it could impact the Federal Reserve's plans for rate cuts, potentially strengthening the USD and applying downward pressure on the EUR/USD pair.
Therefore, the Fed rate cuts could weaken the USD, making the EUR/USD pair more attractive. However, if CPI data exceeds expectations, it may lead to a stronger US dollar, exerting downward pressure on the EUR/USD pair.
EUR/USD - Technical Analysis
The EUR/USD is currently trading at $1.09204, showing a slight decline of 0.01% as the market remains cautious.
On the 4-hour chart, the pair is moving just below the pivot point at $1.0956, reflecting a neutral to bearish sentiment in the near term.
Immediate resistance is located at $1.0955, with further resistance levels at $1.1010 and $1.1043. These levels could act as targets if the euro gains momentum.
On the downside, immediate support is seen at $1.0867, with subsequent support at $1.0828 and $1.0777, which could be tested if the selling pressure increases.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0891, slightly below the current price, indicating that the pair might find support around this level.
The Relative Strength Index (RSI) is currently at 53, suggesting a neutral stance, with neither overbought nor oversold conditions prevailing.
This RSI reading leaves room for potential upward movement, especially if the euro can maintain its position above the 50 EMA.
Given the current technical setup, a buy limit order at $1.08935 could be a strategic entry point, aiming for a take-profit target at $1.09557. To manage downside risk, a stop-loss should be placed at $1.08653.
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GBP/USD Price Analysis – Aug 12, 2024
GBP/USD Price Analysis – Aug 12, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair struggled to maintain its upward momentum, trading around 1.2761 and reaching an intra-day high of 1.2782.
This rally was supported by steady market sentiment, which bolstered the GBP. Additionally, expectations of a 25 basis point interest rate cut by the Federal Reserve in September contributed to the GBP's strength against the USD.
Investors are closely watching upcoming UK employment data for June and the Consumer Price Index (CPI) for July, scheduled for release on Tuesday and Wednesday, respectively, which further influenced the GBP's performance.
GBP/USD Volatility Expected Amidst BoE Rate Cut Speculations and Inflation Concerns
On the BoE front, the Pound Sterling gained traction against most major currencies during Monday’s European session.
Investors are keenly awaiting the UK Employment data for June and the Consumer Price Index (CPI) for July, set to be released on Tuesday and Wednesday.
The UK Employment report is expected to show a slight rise in the ILO Unemployment Rate to 4.5% from 4.4%.
Average Earnings Excluding Bonuses, a key indicator of wage growth, is forecasted to slow significantly to 4.6% from 5.7%.
However, the decline in wage growth could lead to expectations of interest rate cuts by the Bank of England (BoE).
Despite this, BoE MPC member Catherine Mann expressed concern about rising goods and services prices and persistent wage pressures, indicating that inflation risks may remain, even with annual headline inflation at the bank’s 2% target.
Therefore, the GBP/USD pair may experience volatility as investors react to potential rate cuts from the BoE and ongoing inflation concerns, balancing expectations against the latest employment and wage data.
Impact of Federal Reserve Rate Cut Expectations and CPI Data on GBP/USD
On the US front, traders are increasingly betting on a Federal Reserve (Fed) rate cut at the next meeting, which could be positive for the GBP/USD pair.
Lower interest rates often lead to a weaker US dollar, making the GBP/USD pair more attractive.
According to the CME FedWatch Tool, there is a nearly even chance of a rate cut, with a 49.5% probability of a 0.25% cut and a 50.5% probability of a 0.50% cut in September. This anticipation is contributing to increased interest in the GBP/USD pair.
On the data front, the Consumer Price Index (CPI) for July, scheduled for release on Wednesday, is expected to show a 0.2% increase for both headline and core inflation, following a 0.1% decline in headline CPI in June.
Meanwhile, the Producer Price Index (PPI), set for release on Tuesday, is forecast to rise by 0.1% in July, after a 0.2% gain in June.
If the CPI comes in higher than expected, it could raise concerns about the Fed's plans for aggressive rate cuts, potentially exerting downward pressure on Gold prices.
If CPI exceeds expectations, concerns about the Fed's rate cut plans could boost the US dollar, potentially weakening the GBP/USD pair. Conversely, a rate cut would likely strengthen GBP/USD.
GBP/USD - Technical Analysis
The British pound is trading around $1.27628, experiencing a modest decline of 0.03% in the current session.
On the 4-hour chart, GBP/USD is hovering just below the pivot point at $1.2801, indicating a cautious market sentiment.
The immediate resistance is positioned at $1.2802, a level that, if breached, could lead the pair to test higher resistance levels at $1.2839 and $1.2889.
However, the pound remains under pressure, with immediate support seen at $1.2708. Should this support fail to hold, the next downside targets are at $1.2672 and $1.2633.
The 50-day Exponential Moving Average (EMA) is slightly below the current price, positioned at $1.2759, suggesting that the pair may find support around this level.
The Relative Strength Index (RSI) is currently at 54, indicating a neutral to mildly bullish outlook.
This RSI reading implies that the market is neither overbought nor oversold, providing room for potential upward movement if positive momentum gains traction.
Given the current technical setup, a buy limit order at $1.27486 could be strategically advantageous, with a take-profit target at $1.28008.
A stop-loss order should be placed at $1.27173 to mitigate risk in the event of further downside movement.
The key focus for traders will be on whether the pound can reclaim the pivot point at $1.2801, which could open the door for a more substantial rally.
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EUR/USD Price Analysis – Aug 12, 2024
GOLD Price Analysis – Aug 12, 2024
Daily Price Outlook
Gold (XAU/USD) started this week on a bullish track and drew further bids around the 2,442 level, hitting an intra-day high of 2,445.
The upward rally is attributed to increasing geopolitical risks and rising expectations that the Federal Reserve (Fed) will cut interest rates at its next meeting.
Lower interest rates are positive for Gold as they reduce the opportunity cost of holding a non-interest-paying asset.
Meanwhile, the conflict in Gaza is escalating, prompting investors to seek safe-haven assets.
According to Axios news, Israeli Defence Minister Yoav Gallant has reported that Israel anticipates a large-scale military attack by Iran, which could significantly escalate the conflict and threaten global stability.
Looking ahead, traders seem cautious about placing strong positions ahead of US inflation data.
The US Producer Price Index (PPI) will be released on Tuesday, followed by the Consumer Price Index (CPI) on Wednesday.
Additionally, US Retail Sales data on Thursday will influence expectations regarding Federal Reserve policy. Meanwhile, geopolitical developments will also be crucial in determining the near-term direction of the commodity.
Gold Prices Supported by Fed Rate Cut Expectations and Inflation Data
On the US front, traders are betting that the Federal Reserve (Fed) will cut interest rates at its next meeting, which is positive for Gold as lower rates reduce the opportunity cost of holding the non-interest-paying asset.
The Fed's likely move has sparked interest in Gold, with traders anticipating a 49.5% chance of a 0.25% rate cut and a 50.5% chance of a 0.50% cut in September, according to the CME FedWatch Tool.
On the data front, the Consumer Price Index (CPI) for July, due on Wednesday, is expected to show a 0.2% increase for both headline and core inflation, following a 0.1% decline in headline CPI in June.
Meanwhile, the Producer Price Index (PPI), to be released on Tuesday, is forecast to rise by 0.1% in July after a 0.2% gain in June.
If the actual CPI figure is higher than expected, it could lead to doubts about aggressive Fed rate cuts, potentially impacting Gold prices negatively.
Therefore, if the Fed cuts rates, Gold prices could rise as lower interest rates make holding Gold more attractive compared to interest-bearing assets. Higher rate cut expectations generally boost Gold demand.
Geopolitical Tensions Drive Gold Prices Up Amid Gaza Conflict
On the geopolitical front, Gold is rising as investors seek safe-haven assets amid fears that the Gaza conflict will escalate.
According to Israeli Defence Minister Yoav Gallant, Israel expects a large-scale military attack from Iran, which could further destabilize the region.
Recent Israeli attacks have killed at least 25 Palestinians in the past 24 hours, and since October 7, about 1.8% of Gaza’s population has been killed, with most victims under 30.
Hezbollah has also intensified the conflict by launching rockets into northern Israel, targeting several towns.
Hamas is urging the US, Qatar, and Egypt to implement a ceasefire plan proposed by President Joe Biden rather than continue with negotiations. The ongoing conflict has resulted in at least 39,897 deaths and 92,152 injuries in Gaza.
GOLD (XAU/USD) - Technical Analysis
Gold prices are currently hovering around $2,432.25, showing minimal movement with a slight decline of 0.01%.
The 4-hour chart reveals a cautious sentiment among traders as gold remains confined within a narrow trading range.
The immediate resistance is set at $2,431.41, just below the pivot point at $2,451.98. If the price breaks above this immediate resistance, we could see a rally toward the next resistance levels at $2,452.64 and $2,477.89.
Conversely, if the price fails to hold above the pivot point, immediate support is found at $2,380.82, with further downside potential leading to support at $2,354.48 and $2,335.02.
The 50-day Exponential Moving Average (EMA) is positioned at $2,420.84, which serves as a critical support level.
The current RSI reading of 58 suggests a neutral market sentiment with a slight bullish bias, indicating that the market may still have room to move higher before hitting overbought territory.
Given the technical setup, a buy position above the $2,420 level appears prudent, targeting a potential take profit at $2,450.
However, a stop-loss order should be placed just below $2,405 to manage risk in case of a downside reversal.
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EUR/USD Price Analysis – Aug 12, 2024
GOLD Price Analysis – Aug 09, 2024
Daily Price Outlook
Gold prices (XAU/USD) initially struggled to maintain their upward momentum but regained positive traction, climbing to around $2,426 and reaching an intra-day high of $2,428.
The mild bullish movement was driven by growing expectations that the Federal Reserve could begin reducing interest rates as early as September, which weakened the US dollar and supported gold gains.
However, the stronger-than-expected US labor market report released on Thursday eased recession fears and bolstered investor confidence, diminishing demand for safe-haven assets like gold.
Additionally, concerns over escalating geopolitical tensions in the Middle East provided further support, helping gold limit its losses.
Impact of US Economic Data and Fed Expectations on Gold Prices
On the US front, the broad-based US dollar has been declining as markets have fully priced in a 25-basis point rate cut by the Federal Reserve in September, with speculation of a possible 50-basis point cut.
This expectation has provided some support for gold prices. However, a strong labor market report released on Thursday eased fears of an imminent recession and boosted investor confidence, reducing gold's appeal as a safe-haven asset.
This shift in sentiment led to a rally in US equity markets, which further limited gold's gains.
Meanwhile, the anticipation of a dovish Fed stance has pushed US Treasury bond yields lower and dragged the US dollar away from its weekly high, providing additional support for XAU/USD.
On the data front, the US report released on Thursday revealed that initial jobless claims for the week ending August 3 came in at 233,000, beating expectations of 240,000 and down from the previous week's 249,000.
This stronger-than-expected data alleviated concerns about a potential economic downturn in the US, leading to a rise in US Treasury bond yields and applying downward pressure on the US Dollar.
Therefore, the strong US labor market data and rising Treasury yields limited gold's appeal, but expectations of a dovish Fed and a weaker US Dollar provided some support for prices.
Rising Geopolitical Tensions and Its Impact on Gold Prices
On the geopolitical front, Israeli forces have launched a new offensive on Khan Younis in southern Gaza, targeting about 30 sites and issuing new evacuation orders to residents who have already been displaced multiple times.
Leaders from Qatar, Egypt, and the United States have invited Israel and Hamas to resume ceasefire talks on August 15 amid rising regional tensions and fears of retaliatory strikes.
Israel has accepted the invitation to meet in Cairo or Doha, but Hamas has not yet responded. Recent attacks by Israel on two schools in Gaza City have killed at least 15 people and injured 30.
As per the latest report, the conflict has resulted in approximately 39,699 deaths and 91,722 injuries in Gaza.
The ongoing conflict and geopolitical tensions typically drive gold prices higher as investors seek safe-haven assets. Increased uncertainty and violence often boost demand for gold.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,422.70, down 0.24% on the day. The 4-hour chart indicates a mixed technical landscape, with the price holding above the pivot point at $2,412.90 but showing signs of hesitancy near the immediate resistance level at $2,431.41.
The Relative Strength Index (RSI) at 55 suggests the market is in neutral territory, neither overbought nor oversold, indicating potential for both upward and downward movement.
The 50-day Exponential Moving Average (EMA) at $2,417.15 acts as a critical support level, reinforcing the bullish sentiment if the price remains above it.
However, should gold fail to breach the immediate resistance, it may retrace toward the first support level at $2,380.82.
Further downside could see the price testing the next support levels at $2,354.48 and $2,335.02, which are key areas to watch for potential buying interest.
On the upside, a break above $2,431.41 could trigger bullish momentum, pushing the price toward the next resistance levels at $2,452.64 and $2,477.89. These levels are crucial for gold bulls aiming for a sustained rally.
Given the current market dynamics, entering a buy position near the pivot point at $2,413, with a take profit target at $2,447 and a stop loss at $2,398, could offer a balanced risk-reward ratio.
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