AUD/USD Price Analysis – Nov 19, 2024
Daily Price Outlook
Following the release of the Reserve Bank of Australia's (RBA) November Meeting Minutes on Tuesday, the Australian Dollar (AUD) remained stable against the US Dollar (USD). According to the minutes, the RBA board is concerned about the possibility of increased inflationary pressures, which underlined the importance of restrictive monetary policy.
Despite recent aggressive pronouncements by Federal Reserve (Fed) officials, the US Dollar (USD) is in a downward correction. However, the Greenback's downside may be limited since investors expect the next Trump administration to prioritize tax cuts and raise tariffs. These policies may increase inflation, limiting the pace of Fed rate decreases.
The US Dollar Index (DXY), a gauge of the USD against a basket of currencies, is presently trading at approximately 106.27. The greenback is struggling to gain ground as the Trump trade appears to be losing steam. However, stronger US economic statistics and cautionary words from the Federal Reserve (Fed) may limit the downside for the USD in the immediate term.
Australian Dollar Gains as RBA Maintains Hawkish Stance on Interest Rates
The Australian Dollar strengthened following hawkish remarks from the Reserve Bank of Australia (RBA). Domestically, the Reserve Bank of Australia (RBA) kept interest rates at 4.35%. RBA Governor Michele Bullock emphasised that existing interest rates are adequately restrictive and will remain so until the central bank is confident in its inflation forecast.
Potential Impact of US-China Trade Tensions on the Australian Dollar
On the Australian front, Donald Trump has threatened to impose 60% tariffs on Chinese products in order to defend US companies and employment. Because China is Australia's largest trading partner, the probable negative spillovers from Trump's policies may cause the Australian Dollar (AUD) to fall.
Meanwhile, China's retail sales increased by 4.8% year on year in October, exceeding the projected 3.8% and the 3.2% growth witnessed in September. Meanwhile, industrial production increased by 5.3% year on year, falling short of the predicted 5.6% and the 5.4% growth seen in the prior period.
Australia's Labor Market Steady, Inflation Expectations Decline
On the economic front, Australia's most recent labour market report showed that the unemployment rate remained stable at 4.1% in October, with a minor gain in employment of 15.9K, all of which supported the perception of a relatively strong labour market.
Australia's seasonally adjusted unemployment rate remained at 4.1% in October, matching market expectations. However, employment change data revealed that just 15.9K new positions were created in October, falling short of the expected 25.0K.
Consumer inflation expectations in Australia fell to 3.8% in November, down from 4.0% the previous month, and reached their lowest level since October 2021.
AUD/USD – Technical Analysis
AUD/USD is trading at $0.65108, up 0.05% as modest bullish momentum dominates the 4-hour chart. The pair is currently holding above the pivot point at $0.64941, signaling a constructive tone.
The 50-day EMA at $0.64805 reinforces the bullish outlook, acting as a dynamic support level, while the RSI at 62 suggests the pair has room for further upside before entering overbought territory. A successful test and hold above $0.64941 could set the stage for an advance toward $0.65463 in the short term, but a failure to maintain this level might lead to a deeper correction.
Traders may look to initiate long positions near the pivot point at $0.64944, targeting $0.65463 with a stop-loss placed at $0.64513 to manage downside risks effectively. However, caution is warranted as the broader market sentiment remains influenced by global risk factors and economic data releases.
Consider a buy limit at $0.64944, with a take-profit target at $0.65463 and a stop-loss at $0.64513 to capitalize on the bullish potential while managing downside risks.
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USD/CAD Price Analysis – Nov 19, 2024
Daily Price Outlook
The Canadian dollar is gaining momentum ahead of today's crucial inflation report, with USD/CAD indicating a possible turnaround to start the week.
However, whether this momentum lasts beyond the near term will most likely be determined by adjustments in US interest rate expectations rather than domestic causes.
The USD/CAD is traded currently at 1.402 with 0.09% increase from yesterday. Markets expect Donald Trump's administration to revive inflation and halt the Federal Reserve's rate decreases.
This, in turn, adds to the USD's gains. Futures markets suggest a 58.7% chance of a Fed rate cut in December, however expectations for rate cuts through 2025 have dropped to 77 basis points (bps).
Geopolitical Tensions Boost US Dollar
The return of geopolitical tensions in the Middle East and on the Russia-Ukraine front bolsters safe-haven currencies such as the Greenback. CNN News claimed on Sunday, citing two US sources, that US President Joe Biden's administration had authorised Ukraine to use US armaments to strike inside Russia, a significant shift in Washington's attitude towards the Ukraine-Russia conflict.
Investors will keep an eye on developments related to geopolitical threats. Any hints of escalation may cause the US Dollar (USD) to rise against the Loonie.
Inflation Report in Focus as BoC Faces Key Decisions on Rate Cuts
Today's inflation report stands out amid a lacklustre global data week. The annual CPI rate is predicted to rise from 1.6% to 1.9% in October, approaching the middle of the Bank of Canada's (BoC) 1-3% target range. Core inflation, which is the average of Statistics Canada's trim and median CPI estimates, is predicted to be 2.4%, slightly higher than September's rate.
With the BoC expecting core inflation of 2.3% by December, a result that meets market expectations should do little to dampen the belief that further rate cuts are on the way. However, if an upside surprise occurs, the Bank of Canada may begin to decrease the rate of easing.
In the policy statement released on October 23, the BoC stated that the timing and speed of additional policy rate cuts will be determined by "incoming information and our estimation of its implications for the inflation outlook.
BoC Easing Cycle: Quick Start, Sluggish End
Swaps markets are divided on whether the Bank of Canada would drop interest rates by another 50 basis points at its next meeting, following the reduction in October. Traders are currently leaning towards a lower 25-point cut, with a 50-point move seen as a 44% probability.
Looking further ahead, the easing cycle is projected to slow significantly. Markets are pricing in a cumulative 88 basis point decrease by September 2025, indicating a more gradual approach.
USD/CAD – Technical Analysis
USD/CAD is trading at $1.40166, down 0.02%, as bearish momentum takes hold on the 4-hour chart. The pair is currently below the pivot point at $1.40263, signaling potential downward pressure.
Immediate resistance stands at $1.40489, followed by $1.40711 and $1.41016, which could act as hurdles for any rebound attempts. On the downside, immediate support lies at $1.39888, with further levels at $1.39599 and $1.39303 providing key zones for bearish targets.
The 50-day EMA at $1.40329 adds to the resistance, reflecting near-term selling bias. Meanwhile, the RSI at 39 highlights bearish momentum but suggests the pair is nearing oversold conditions, which could trigger short-term consolidation. If USD/CAD breaks below $1.39888, it could test $1.39599, but a reversal above $1.40263 would shift the focus back to resistance at $1.40489.
For traders, short positions below $1.40260 align with the bearish outlook. A take-profit at $1.39882 offers a reasonable target, while a stop-loss at $1.40490 helps manage risk.
Selling below $1.40260 with a take-profit at $1.39882 and a stop-loss at $1.40490 aligns with the bearish trend while offering balanced risk management.
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GOLD Price Analysis – Nov 18, 2024
Daily Price Outlook
Gold prices gained on Monday, recovering from six consecutive sessions of losses, as the U.S. dollar held steady after last week’s sharp rally. The dollar index, which surged 1.6% last week to touch a one-year high, remained flat on Monday, providing some relief for bullion.
Dollar Softens, Supporting Gold Demand
A softer dollar typically bolsters gold by making it less expensive for foreign buyers holding other currencies. "The recent correction in gold prices is closely tied to dollar strength," noted Ross Norman, an independent market analyst. "While we may not have found a solid physical floor yet, opportunistic buying has started to support the market."
The dollar’s performance remains a key variable as investors await further signals from the Federal Reserve. This week, at least seven Fed officials are scheduled to speak, potentially offering more clarity on the central bank's interest rate trajectory.
Fed Signals and Interest Rate Impact
Recent U.S. economic data, including stronger-than-expected retail sales and sticky inflation, have tempered expectations for a December rate cut. Elevated interest rates diminish gold’s appeal, as the metal offers no yield.
"As we approach year-end, we can expect volatility in gold prices driven by profit-taking and portfolio adjustments, regardless of the Fed's actions," Norman added.
Michael Langford, chief investment officer at Scorpion Minerals, noted that near-term risks for gold are tied to further dollar strength. "While the strengthening USD is negative for gold in the short term, the long-term impact of inflationary policies will eventually support higher prices," Langford explained.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,583.78, up 0.80% on the day, as it hovers just above key support levels. The metal's immediate pivot point sits at $2,597.39, a critical level that traders will watch closely as it determines near-term direction.
A break above this pivot could signal a move toward immediate resistance at $2,618.54, with additional bullish targets at $2,644.07. On the downside, immediate support lies at $2,580.92, while further declines could expose gold to $2,537.16 and $2,516.86.
The 50-day Exponential Moving Average (EMA) at $2,581.13 offers a strong short-term support zone, aligning closely with current price action. Gold’s Relative Strength Index (RSI) is at 54, indicating a neutral stance with neither overbought nor oversold conditions. This balanced momentum highlights the potential for volatility, as any breach of key levels could trigger significant price movement.
On the 4-hour chart, the price action is consolidating between the pivot point and $2,580.92, forming a narrow trading range. The broader trend remains cautious, as gold’s upside potential faces resistance from higher Treasury yields and a firm U.S. dollar.
However, if gold successfully breaks above $2,597.39, bullish momentum may accelerate, potentially reaching $2,618.54.
Traders considering a buy-limit order at $2,580 could aim for a take-profit target of $2,616, with a stop-loss set at $2,550 to manage risk. Gold's trajectory remains tethered to macroeconomic factors, with U.S. economic data and Federal Reserve signals likely to provide further clarity on price direction.
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EUR/USD Price Analysis – Nov 18, 2024
Daily Price Outlook
EUR/USD Finds stability Ahead of ECB Lagarde's speech
EUR/USD Remains Above 1.0500
The ECB and Fed policy decisions are still unclear, hence the EUR/USD pair is trading roughly above the important support level of 1.0500. The recent surge in the US dollar has slowed after reaching an annual high, giving the euro some leeway. A push above 107.00 is sought by the US Dollar Index which compares the US dollar to other major currencies.
Trump's Policies Increase Uncertainty in the Market
Investors are keeping a careful eye on how Donald Trump's trade proposals might affect international markets. The USD may gain more strength, according to analysts, as Trump pursues an aggressive trade policy and more tariffs. The US economy has performed well in comparison to its counterparts, and Capital Economics economists now predict a 5% increase in the value of the dollar by the end of 2025.
Highlights of ECB Lagarde's Speech
This week's major event for traders is ECB President Christine Lagarde's address in Paris. Lagarde is going to discuss the possible effects of Trump's initiatives on the economy of the Eurozone. The euro is being held in check by uncertainty as analysts cannot agree on whether the ECB would lower rates by 25 or 50 basis points.
Fears of a Trade War between the US and the Eurozone
There are now more worries of a trade war among the US and the Eurozone. Trump has previously threatened punitive action against the eurozone for not buying enough US exports. Tensions have been exacerbated by recent comments made by Stephen Moore, Trump's economic advisor, indicating that the US is less interested in trade agreements with countries who support the EU.
Fed Continues to Be Wary
Jerome Powell, the chair of the Fed, recently stressed the need of monetary policy being prudent. While inflation is gradually approaching the Fed's 2% target, Powell stated during his speech in Dallas that the US economy does not demonstrate a need for rate decreases. Markets now estimate a 60% possibility of a quarter-point rate decrease in December, which is lower than what they had previously predicted.
Important Information to Note
New information on business activity and attitude in the wake of Trump's election victory will be available later this week with the release of November's preliminary Purchasing Managers' Index (PMI). Investors are watching for indications of optimism or worries that might influence monetary policy choices in the coming months.
The upward trajectory of the EUR/USD exchange rate will be significantly influenced by changes in central bank policies and trade policy.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.05484, up 0.10% on the day, as it continues to hover near the lower end of a consolidative range. The pivot point at $1.05772 serves as a crucial level to determine the short-term direction of the pair.
A decisive break above this level could pave the way for further gains toward immediate resistance at $1.06023, with the next key resistance levels positioned at $1.06312. On the downside, immediate support lies at $1.05332, while further weakness could see the pair testing $1.04867 and $1.04599.
The 50-day Exponential Moving Average (EMA) at $1.05730 is acting as a near-term cap on bullish momentum, suggesting that buyers face stiff resistance ahead. The Relative Strength Index (RSI) currently stands at 47, indicating neutral momentum, neither signaling overbought nor oversold conditions. This balanced reading suggests that EUR/USD could remain range-bound until a catalyst drives a breakout.
On the 4-hour chart, the pair is trading below the pivot point, with price action exhibiting a mild bearish tilt. However, a buy-limit strategy at $1.05333 could be a viable setup for traders, aiming for a take-profit target at $1.05866, with a stop-loss placed at $1.05005 to mitigate downside risks.
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GBP/USD Price Analysis – Nov 18, 2024
Daily Price Outlook
The Pound Sterling recovers marginally following dismal UK GDP-driven selling on Friday.
The Pound Sterling (GBP) edged higher against its major peers on Monday, attempting to regain ground after Friday's sell-off. The British pound plummeted dramatically when the Office for National Statistics (ONS) reported that the GDP unexpectedly shrunk by 0.1% in September. The figures also showed that the economy increased slowly in the third quarter.
The unexpected dip in UK GDP may lead to further interest rate reduction by the Bank of England (BoE).
Markets will be focusing almost entirely on the services inflation figure, which the analysts expect to rise somewhat from 4.9% to 5.0%. However, when we remove sectors that are less relevant to the Bank of England, 'core services' inflation falls significantly to 4.3%.
That would be good news for the BoE, but not likely enough to warrant another cut in December. In addition, markets may focus more on the 'non-core' services CPI data, maintaining to cautious BoE pricing and putting a cap on the recent modest bounce in EUR/GBP.
The UK's economic future is projected to become more uncertain as the government struggles to decide between increasing trade links with the European Union (EU) and the United States.
UK Faces Economic Dilemma Between EU and US Models as GBP Struggles Amid Strong USD
The United Kingdom is caught between these two types of economic models, and I believe the country would benefit from adopting more of the American model of economic independence. And if that were the case, Moore believes it would increase the Trump administration's desire to pursue the free trade pact with the UK. His remarks came as BoE Governor Andrew Bailey encouraged the administration to rebuild relations with the European Union.
During Monday's London session, the pound sterling remained under pressure near 1.2600 against the US dollar. The GBP/USD pair struggles to find traction as the US Dollar maintains gains near a more-than-a-year high, while the US Dollar Index (DXY) hovering around 107.00.
The greenback trades firmly as investors expect the Federal Reserve (Fed) to take a more cautious rate-cutting approach given the recent minor rise in inflation and the growth forecast based on strong anticipation that President-elect Donald Trump would be able to carry out his economic program efficiently.
GBP/USD – Technical Analysis
The GBP/USD pair is trading at $1.26203, up a modest 0.03% on the day, as it consolidates within a tight range near critical support levels. The pivot point at $1.26900 serves as a key hurdle for the pair, and a breakout above this level could open the door to immediate resistance at $1.27452.
If bullish momentum persists, the next upside targets are $1.27924. However, the downside remains vulnerable, with immediate support at $1.25957, followed by stronger support at $1.25073 and $1.24513.
The 50-day Exponential Moving Average (EMA) at $1.30541 reflects a bearish trend in the broader outlook, as prices remain well below this longer-term indicator. The Relative Strength Index (RSI) is currently at 30, signaling that the pair is oversold, which could set the stage for a potential technical rebound.
In the 4-hour chart, GBP/USD shows signs of downward pressure as it trades below the pivot point. A buy-limit entry at $1.26095 could offer traders a strategic opportunity, targeting a take-profit level of $1.26911. However, caution is warranted, with a stop-loss placed at $1.25462 to limit downside risk.
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EUR/USD Price Analysis – Nov 15, 2024
Daily Price Outlook
During the European trading session on Friday, the EUR/USD pair broke its five-day losing streak, gaining positive momentum around 1.0577. This rebound was likely driven by a pullback in the US Dollar (USD) following remarks from Fed Chair Jerome Powell.
Powell highlighted the "remarkably good" performance of the US economy, providing the Federal Reserve with the flexibility to gradually reduce interest rates.
Moreover, the European Commission's optimistic growth outlook for the Eurozone in 2025 and 2026, coupled with moderate inflation and improving budget forecasts, further supported the bullish sentiment for the EUR.
US Dollar Pullback and Its Impact on the EUR/USD Pair
On the US front, the broad-based US dollar has recently pulled back after reaching its yearly high. This decline is largely due to comments from Federal Reserve Chair Jerome Powell, who said the US economy is doing "remarkably good." As a result, the Fed has more flexibility to gradually lower interest rates, which has softened the dollar's strength.
Moreover, the recent economic data also supports this trend. The US Producer Price Index (PPI) rose 2.4% year-over-year in October, which was higher than the revised 1.9% increase in September and above the market expectation of 2.3%.
Meanwhile, the Core PPI, which excludes volatile food and energy prices, climbed 3.1%, slightly higher than the 3.0% forecast. This suggests inflationary pressures are still present but may not lead to aggressive Fed rate hikes.
The US Dollar Index (DXY), which tracks the dollar against six major currencies, has fallen from its yearly high of 107.06 on Thursday, now trading near 106.80. This pullback is seen as a result of a slowdown in "Trump trades," which had previously driven the dollar higher. The shift in the dollar's momentum is contributing to changes in market sentiment, affecting global currency dynamics.
Therefore, the pullback in the US dollar, fueled by Jerome Powell's comments and mixed economic data, could lead to a weaker dollar. This might benefit the EUR/USD pair, potentially boosting the euro as the dollar softens, making the euro more attractive.
Eurozone Economic Outlook and ECB Policy Impact on EUR/USD
On the EUR front, the European Commission’s quarterly report projects positive growth for the Eurozone in the next few years.
The economy is expected to grow by 0.8% in 2024, 1.3% in 2025, and 1.6% in 2026. Inflation is forecast to decrease slightly, from 2.4% in 2024 to 1.9% in 2026. The budget deficit is also expected to shrink gradually, from 3.0% in 2024 to 2.8% by 2026.
Germany, the largest economy in the Eurozone, is facing slower growth. While German GDP is expected to grow by 0.7% in 2025 (down from the previous 1.0% forecast), it is projected to rise to 1.3% in 2026, still under the Eurozone average.
This year, Germany’s economy is expected to contract by 0.1%, a shift from earlier forecasts of modest growth. This slower growth in Germany adds some caution to the overall Eurozone outlook.
The European Central Bank (ECB) has hinted at possible interest rate cuts in the future but remains cautious due to high wages and slow labor productivity. ECB officials emphasize that they need more data before making any decisions.
ECB board member Isabel Schnabel also stressed that interest rates should stay the main tool for policy changes.
Therefore, the European Commission’s positive growth outlook for the Eurozone and the ECB’s cautious stance on rate cuts could support the euro in the EUR/USD pair. However, Germany’s slower growth and external risks may limit significant euro gains against the dollar.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.05567, up 0.27%, as it edges closer to its pivot point at $1.05761, signaling cautious optimism among traders. With an RSI of 47, the pair remains below the neutral 50 level, reflecting subdued momentum. Immediate resistance sits at $1.06023, closely followed by the 50-day EMA at $1.05977.
This proximity suggests that a break above $1.05761 could encourage buyers, potentially pushing EUR/USD toward higher resistance at $1.06312, with a further target at $1.06628 if bullish momentum builds.
On the downside, immediate support is found at $1.05397, and a drop below this level could trigger further declines toward $1.05113, with an additional safety net at $1.04867.
The technical setup suggests a mild bullish sentiment if EUR/USD maintains its position above $1.05397, though a stronger rally requires a clear move past the pivot and resistance levels.
The entry strategy indicates a buy limit at $1.05391, with a target of $1.05771, capitalizing on upward potential near the pivot. However, the stop loss at $1.05119 serves as a safeguard against unexpected reversals, particularly if the pair loses traction near support.
Given the close alignment of key levels, EUR/USD’s outlook leans cautiously bullish, but traders should watch the 50-day EMA closely, as it may act as a pivotal resistance.
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S&P500 (SPX) Price Analysis – Nov 15, 2024
Daily Price Outlook
Global market sentiment has been under bearish pressure, reflected in the bearish performance of the S&P 500 index, which recently dropped to around the 5,942 level.
This downward trend can be largely attributed to Federal Reserve Chairman Jerome Powell signaling a more cautious approach to future interest rate cuts.
Moreover, the mixed economic data from China and a contraction in the UK economy in September have added to the uncertainty.
Markets are now closely watching the upcoming US October Retail Sales data, scheduled for release on Friday, as well as any further comments from Federal Reserve officials for direction.
Fed's Cautious Stance and Inflation Data Weigh on S&P 500 Index Sentiment
On the US front, Federal Reserve Chair Jerome Powell signaled no urgency to cut interest rates further, citing uncertainties around President-elect Donald Trump’s upcoming policies. Powell stated it’s “too early to reach judgments” as the impact of Trump’s proposed tariffs and immigration crackdowns, which could drive inflation, remains unclear.
Earlier this month, the Fed lowered interest rates by 25 basis points to 4.50%-4.75%, the second cut in a row, but Powell’s cautious tone has cooled expectations for another cut. Rate futures now show a 60% chance of a cut next month, down from 80% earlier this week.
Recent inflation data supports the Fed’s careful stance. The Producer Price Index (PPI) rose 2.4% year-over-year in October, up from 1.9% in September, while Core PPI increased 3.1%.
Consumer Price Index (CPI) data showed a 2.6% annual rise, with core inflation at 3.3%, matching forecasts. These figures suggest inflationary pressures are steady, aligning with Powell’s measured approach.
Therefore, the Fed's cautious stance and mixed inflation data reduce expectations for aggressive rate cuts, limiting market optimism. This uncertainty, along with inflation concerns, weigh on investor sentiment, contributing to continued pressure on the S&P 500 index.
UK Economic Contraction Adds Pressure on S&P 500 Index Sentiment
Another factor that has been weighing on the S&P 500 index is the unexpected contraction in the UK economy in September. The country’s GDP fell by 0.1% in September, and while the economy grew by 0.1% in the third quarter, this is a slowdown from the 0.5% growth seen in the second quarter. This is a setback for the new Labour government, which is focused on boosting economic growth in the UK.
Chancellor Rachel Reeves announced a budget with plans for big spending, tax hikes, and more borrowing to support growth. She expressed disappointment with the latest GDP figures, saying improving growth is her main goal.
The Bank of England also lowered interest rates earlier this month by 0.25% and reduced its 2024 growth forecast to 1% from 1.25%. These economic challenges and slower growth are adding to uncertainty in the global market, affecting investor confidence.
Mixed Economic Data from China Weighs on S&P 500 Index Sentiment
On the China front, recent economic data has shown mixed results, impacting global markets, including the S&P 500 index. Industrial production grew by 5.3% year-on-year in October, slightly below expectations of 5.5% and slower than the previous month’s 5.4%.
This weaker industrial output highlights the challenges facing China’s manufacturing sector, which continues to struggle with slow domestic demand and low spending.
On a more positive note, retail sales rose by 4.8% in October, much stronger than the expected 3.8% and higher than the previous month’s 3.2%. This increase was partly driven by the Golden Week holiday and some improvement in private spending, supported by China’s recent stimulus measures.
However, concerns remain over the property sector, where investment dropped 10.3% from January to October, and home prices fell 5.9% in October, marking the 16th straight month of decline. These mixed signals from China contribute to uncertainty, influencing market sentiment and the S&P 500 index.
S&P 500 – Technical Analysis
The SPX index is trading at 5949.16, down 0.61%, and currently below the pivot point of 5987.18, indicating a slight bearish tone in the market. With the RSI at 48, the momentum is mildly bearish, as the indicator remains below the neutral 50 mark, yet close enough to suggest potential for a rebound if buying pressure emerges.
Immediate resistance sits at 6017.29, followed by 6056.54 and a more distant level at 6103.34. Breaking above the pivot point and first resistance would be essential for reversing the current bearish sentiment.
On the downside, immediate support lies at 5924.15, and a breach here could open the path toward the next support levels at 5877.15 and 5838.15. Notably, the 50-day EMA is positioned at 5883.23, aligning with the lower support level, which may serve as a key point for traders to monitor.
If the index remains below the pivot and fails to surpass the 50-day EMA, bearish sentiment could dominate, pushing the SPX toward deeper support.
The recommended entry strategy suggests selling below 5988, targeting a take-profit level of 5928, capitalizing on anticipated downside momentum.
However, a stop-loss at 6033 is advised to mitigate risk should the index break above the pivot, potentially reversing the trend. The overall outlook remains cautiously bearish unless SPX can decisively reclaim the pivot and break above resistance.
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GOLD Price Analysis – Nov 15, 2024
Daily Price Outlook
Gold prices (XAU/USD) managed to recover some ground but slipped back to around $2,555 by early European session on Friday. This bearish bias was mainly due to the strength of the US Dollar and growing uncertainty about how quickly the Federal Reserve might cut interest rates.
At the same time, expectations that inflation could rise next year—partly because of Donald Trump’s policies—have made rate cuts less likely, which has put additional pressure on gold prices.
On the geopolitical front, the long-lasting tussle in the Middle East and the ongoing Russia-Ukraine conflict could help limit gold’s losses, as investors tend to turn to it as a safe-haven asset. Looking ahead, all eyes will be on the US Retail Sales data for October, set to be released later today, along with the NY Empire State Manufacturing Index and Industrial Production numbers.
China's Economic Measures and Their Impact on Gold Market
On the other hand, China’s recent economic measures didn’t meet investor expectations, putting pressure on the gold market. The country announced a huge 10 trillion Yuan debt package to support local governments and stimulate economic growth.
However, the package lacked direct stimulus measures, which left investors hoping for more aggressive support feeling disappointed and weighed on market sentiment.
Despite this, China’s retail sales rose by 4.8% year-over-year in October, beating the expected 3.8% and last month’s 3.2% increase. This jump in consumer spending points to improving domestic demand, which could be positive for gold, as it may indicate stronger consumer confidence and higher gold consumption.
Stronger US Dollar and Persistent Inflation Concerns Could Put Pressure on Gold Prices
On the US front, the US Dollar has been gaining strength, although it recently pulled back from its yearly high of 107.06. This drop is due to a slowdown in 'Trump trades,' with the US Dollar Index (DXY) now around 106.80. Meanwhile, the US Producer Price Index (PPI) rose 2.4% in October compared to last year, beating expectations.
In the meantime, the Core PPI, excluding food and energy, climbed 3.1%, also surpassing forecasts. These numbers indicate that inflation pressures are still lingering, which could weigh on gold prices, as higher inflation often leads to higher interest rates, making gold less attractive.
Fed officials are also signaling that interest rate cuts will not be happening anytime soon. Federal Reserve Bank of St. Louis President, Alberto Musalem, noted that inflation challenges are making it difficult for the Fed to lower rates further. Meanwhile, Fed President Jeffrey Schmid warned that expectations for a return to near-zero rates are unrealistic.
Therefore, the stronger US Dollar and persistent inflation pressures, along with the Fed’s stance on rate cuts, could keep gold prices under pressure as higher inflation often leads to higher interest rates, making gold less attractive as an investment.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading around $2,561.97, down 0.11%, as it lingers below its pivot point of $2,572.70, suggesting that bearish sentiment continues to dominate. The Relative Strength Index (RSI) sits at 41, well below the neutral 50 mark, indicating weak momentum.
Immediate support lies at $2,537.16, with deeper support at $2,516.86 and $2,497.83 if sellers increase pressure. Conversely, gold faces immediate resistance at $2,595.94, aligning closely with the 50-day EMA of $2,594.24, reinforcing this level as a significant hurdle.
A break above $2,572.70 could give bulls some breathing room, possibly driving prices towards $2,595.94, but sustained upward momentum would require clearing additional resistance at $2,618.54. In the current scenario, failure to regain ground above the pivot suggests a downward bias, with a potential target near $2,537 if selling continues.
The bearish trend may remain intact as long as gold trades below the pivot, with sellers likely to enter aggressively around the $2,572 mark.
Given the overall setup, the outlook for gold remains cautious, with the primary entry strategy focused on selling below $2,572. Key levels and the RSI confirm the bearish inclination, making this a critical juncture for price movement.
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USD/JPY Price Analysis – Nov 14, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair extended its upward momentum, staying strong around the 155.99 level and reaching an intraday high of 156.15.
This bullish movement can be largely attributed to the strengthening US dollar, supported by upbeat US economic data and the continuation of the so-called “Trump trade.” Meanwhile, the Japanese yen remains under pressure.
Despite Japan's Producer Price Index (PPI) rising at its fastest annual pace in over a year in October, uncertainty around Japan's political landscape has cast doubts on the Bank of Japan's (BoJ) intentions regarding rate hikes, which further weakened the yen and boosted the USD/JPY pair.
USD/JPY Rises as Weak Yen Faces Economic Challenges and Political Uncertainty
However, the rise in the USD/JPY came from the weaker Japanese yen, which is under pressure due to several factors. Despite Japan's Producer Price Index (PPI) rising at its fastest pace in over a year in October, the yen remains weak.
This is partly due to uncertainty surrounding Japan's political situation, which makes it harder to predict the Bank of Japan's (BoJ) rate-hike plans. Moreover, the concerns over the impact of potential trade tariffs from US President-elect Donald Trump on the Japanese economy are adding to the pressure on the yen.
In addition to this, there are concerns that Japan's government might step in to stop the yen from falling too much. However, given Japan's current economic challenges and the market situation, the USD/JPY pair is likely to keep rising. This is because the Bank of Japan is having a hard time deciding when to raise interest rates.
US Dollar Strengthens on Inflation Expectations and High Treasury Yields, Supporting USD/JPY
On the other hand, the US dollar is benefiting from expectations that the new US administration's policies will stimulate inflation, possibly causing the Federal Reserve to pause its interest rate cuts.
Furthermore, the US Consumer Price Index (CPI) data released on Wednesday showed slower progress in bringing inflation down, which may lead to fewer interest rate cuts next year.
This has kept US Treasury bond yields high, supporting the US dollar. On the data front, the October US Consumer Price Index (CPI) rose by 2.6% year-over-year, while the core CPI, excluding food and energy, increased by 3.3%, both matching forecasts.
Therefore, the strong US dollar, supported by expectations of inflation-driven policies and high Treasury yields, boosts the USD/JPY pair. The October US CPI data, showing a 2.6% annual rise and 3.3% core increase, reinforces the bullish outlook for the USD/JPY.
USD/JPY – Technical Analysis
The USD/JPY pair is showing strong bullish momentum, currently trading around 155.87. The recent move upwards has been supported by a breakout past the 1.618 Fibonacci extension at 156.32, which now serves as a key level to watch.
The next significant resistance levels are at 157.31 and 158.01. A break above these could indicate further upward momentum, especially if the broader dollar strength persists.
On the support side, immediate levels to monitor are 155.43, followed by 154.50 and 154.18. The 50-period EMA at 153.58 continues to underline the bullish trend, as the price remains well above this indicator, suggesting sustained buying pressure.
The RSI sits at 69.44, nearing overbought territory, signaling that a short-term pullback could occur. However, as long as the price stays above the pivot at 155.43, the bullish outlook is likely to remain intact.
Given the technical landscape, a potential entry at 155.43 with a target around 156.71 appears favorable, aligning with the recent bullish trend. Caution is warranted near the overbought RSI, as a correction might bring prices back toward the immediate support zones.
The USD/JPY remains bullish above 155.43, with targets near 156.71. Overbought RSI suggests a watchful eye on potential pullbacks, though upward momentum is favored.
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GOLD Price Analysis – Nov 14, 2024
Daily Price Outlook
Gold prices (XAU/USD) lost its upward upward momentum and remain under pressure around $2,555 level. However, this drop is largely due to the bullish US dollar, which has been strengthening as investors anticipate that US President-elect Donald Trump’s growth-focused policies could drive inflation higher, prompting the Federal Reserve to pause its rate cuts.
This outlook has pushed up US Treasury yields, making the dollar even stronger.As a result, the dollar is now at its highest level since November 2023, putting extra pressure on gold prices.
Looking ahead, traders are keeping an eye on the US Producer Price Index (PPI) for any short-term opportunities. However, the main focus remains on Fed Chair Jerome Powell’s upcoming speech later in the US session, as it could offer more hints about the Fed’s next moves on policy.
US Dollar Strengthens Amid Inflation Concerns and Rate Cut Expectations
On the US front, the broad-based US dollar has been gaining bullish traction and remained strong, hovering around 106.60. This rise is mainly due to optimism about "Trump trades" and the latest US Consumer Price Index (CPI) data for October.
On the data front, the US Bureau of Labor Statistics reported that the headline CPI rose by 0.2% in October, with a 2.6% increase over the past year. The core CPI, which excludes food and energy, increased by 0.3% and 3.3% year-on-year.
These numbers confirmed expectations that the Federal Reserve may cut interest rates again in December, especially with signs of a softening labor market. As a result, the likelihood of a 25-basis-point rate cut in December has jumped to over 80%.
Fed officials are also weighing in on the situation. Dallas Fed President Lorie Logan said the central bank has made progress on inflation but needs to be cautious. Other leaders, like St. Louis Fed President Alberto Musalem, are worried about rising inflation, which makes it harder for the Fed to cut rates.
Additionally, Trump’s proposed tax cuts and tariffs could push inflation higher, limiting future rate cuts. This optimism keeps bond yields high and continues to support the US dollar.
Therefore, the strengthening US dollar, fueled by expectations of rate cuts and inflation concerns, puts downward pressure on gold prices.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) has seen a slight downturn, currently trading at $2606.52, reflecting a 0.31% decline for the day. The metal has recently faced selling pressure amid a stronger U.S. dollar and rising yields, positioning it at a critical juncture as it tests immediate support levels.
The immediate pivot point sits at $2612.16, a level that has held some significance in recent sessions. If gold breaks below this pivot, bearish momentum may accelerate. The immediate resistance level is seen at $2633.12, followed by stronger resistance at $2648.86 and $2672.91.
Conversely, support is located just below at $2591.91, with further downside levels at $2572.59 and a more substantial base at $2553.50. These levels could provide critical turning points, especially if the precious metal encounters further selling pressure.
Gold’s Relative Strength Index (RSI) is currently at 45, indicating a neutral to slightly bearish sentiment in the market. The 50-day Exponential Moving Average (EMA) is positioned at $2621.11, slightly above the current price. This suggests a bearish bias, as the metal is trading below this average, often an indicator of downward momentum.
For traders, a potential sell entry below the $2612 pivot could target lower levels around $2582, aligning with the technical support zones. However, caution is advised, with a stop-loss placed at $2632 to manage risk against any unexpected upside.
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