AUD/USD Price Analysis – July 23, 2024
Daily Price Outlook
Despite the risk-on market sentiment and potential rate hike from the RBA, the AUD/USD currency pair failed to halt its seventh consecutive session of decline and remained under pressure around the 0.6625 level, hitting an intraday low of 0.6621. This decline is attributed to the sharp drop in energy and metal prices.
Additionally, a weak outlook for the Chinese economy has led to copper prices hitting their lowest point in over three months and caused a decline in iron ore prices, further pressuring the Australian Dollar.
Conversely, the bearish US dollar, influenced by growing expectations of a Federal Reserve rate cut in September, has helped limit further losses in the AUD/USD pair. The Australian Dollar may receive some support from strong employment data, which suggest a tight labor market and raise the possibility of an interest rate hike from the RBA.
Investors are also awaiting Australian manufacturing and services PMI figures this week to assess the health of the economy.
Weak Chinese Economy and PBoC Rate Cuts Pressure AUD/USD Through Falling Commodity Prices
It is important to highlight that the weak outlook for the Chinese economy has driven copper prices to their lowest levels in over three months and caused a decline in iron ore prices, adding pressure to the Australian Dollar.
The People's Bank of China (PBoC) has reduced the one- and five-year loan prime rates by ten basis points, to 3.35% and 3.85%, respectively.
This adjustment could impact Australian markets due to their strong trade ties with China. Additionally, China's $715 billion hedge fund industry is bracing for stricter regulations next month, requiring higher asset thresholds and stricter investment and marketing rules, prompting some firms to seek more capital.
Therefore, the weak Chinese economic outlook and PBoC rate cuts could negatively impact the AUD/USD pair due to Australia's trade ties with China and pressure from falling commodity prices.
Strong Australian Employment Data and Potential RBA Rate Hike May Support AUD
Conversely, the Australian Dollar could receive support from robust employment data, which indicates a tight labor market and increases the likelihood of an interest rate hike from the Reserve Bank of Australia (RBA).
Investors are also looking forward to Australian manufacturing and services PMI figures this week to gauge the overall health of the economy.
Sean Langcake from Oxford Economics Australia observed that the current job growth reflects strong demand and ongoing cost pressures, suggesting that the RBA may keep rates steady. However, he noted that an August rate hike remains a possibility.
On the data front, the Australian Bureau of Statistics reported that Employment Change rose by 50,200 in June, well above the market forecast of 20,000. This strong job growth signals a robust labor market and could influence the Reserve Bank of Australia's interest rate decisions.
Therefore, the strong employment data and potential interest rate hike from the RBA could support the AUD, potentially strengthening the AUD/USD pair, especially if the upcoming PMI figures also show positive trends.
US Dollar Pressured by Fed Rate Cut Expectations and Market Reactions
On the US front, the decline in the AUD/USD pair may be short-lived due to the US Dollar facing pressure from expectations of a Federal Reserve rate cut in September. Fed Chair Jerome Powell and other officials have suggested that lower interest rates could be on the horizon due to recent progress on inflation.
Additionally, the market’s limited reaction to President Biden's withdrawal from the 2024 election is impacting the USD. Investors are increasingly focusing on potential benefits from Donald Trump's policies, despite concerns about higher inflation.
These shifts in investor sentiment and inflation expectations are likely to influence both currencies and impact the AUD/USD pair.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.66296, down 0.17% for the day. The 4-hour chart indicates a bearish trend, with the pivot point set at $0.6646. This level is crucial for determining the market's direction. If the price stays below this pivot point, the bearish trend is expected to continue.
Immediate resistance is found at $0.6670, followed by $0.6691 and $0.6716. These levels act as potential barriers to any upward movement. On the downside, immediate support is seen at $0.6621, with further support at $0.6602 and $0.6577, which could provide potential entry points for long positions if the price rebounds.
The Relative Strength Index (RSI) is at 19, indicating that the AUD/USD is in oversold territory. This suggests that a rebound could be imminent, although the overall trend remains bearish. The 50-day Exponential Moving Average (EMA) is at $0.6704, which supports the bearish outlook as long as the price remains below this level.
Given the technical indicators, the suggested trading strategy is to sell below $0.66453, with a take profit target at $0.66104 and a stop loss at $0.66691. This strategy aligns with the current bearish sentiment and key resistance and support levels.
In conclusion, AUD/USD's outlook remains bearish below the pivot point of $0.6646. Traders should monitor these key levels and technical indicators closely to adjust their strategies accordingly. A break above the pivot point could indicate a shift towards a bullish trend, while maintaining below it supports the bearish trend.
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GOLD Price Analysis – July 23, 2024
GOLD Price Analysis – July 22, 2024
Daily Price Outlook
Gold (XAU/USD) started the new week on a bullish note, halting its three-day downtrend. It gained positive momentum, climbing above the $2,400 level, with an intraday high of $2,412.
This rebound was primarily driven by a weaker US dollar, influenced by recent US political developments and rising expectations of a Federal Reserve rate-cut cycle starting in September.
Moreover, the ongoing concerns about slowing Chinese economic growth, persistent geopolitical risks from the prolonged Russia-Ukraine conflict, and long-lasting Middle East tensions have enhanced gold's appeal as a safe-haven asset.
Looking ahead, investors are keenly awaiting additional signals about the Federal Reserve's future actions, which will likely impact gold prices.
This week’s flash PMI report and the US Personal Consumption Expenditures (PCE) Price Index data, scheduled for release on Friday, are expected to offer further understanding regarding global economy and create short-term trading opportunities for gold.
US Dollar Weakens Amid Political Developments and Fed Rate Cut Expectations, Boosting Gold Prices
On the US front, the broad-based US dollar lost momentum and turned bearish after President Joe Biden announced he’s leaving the presidential race. Investors who expected Trump to win started changing their bets.
Now, Vice President Kamala Harris is seen as the top Democratic candidate, but former President Donald Trump is still the favorite in betting markets. On the other hand, market participants expect the Federal Reserve to cut interest rates in September, which has weakened the US dollar.
Therefore, the expected Federal Reserve rate cut and weakened US dollar have boosted gold's appeal as a safe-haven investment, leading to rising gold prices as investors seek stability.
Geopolitical Tensions and Weak Chinese Economic Growth Boost Gold Prices
On the economic front, China's economy grew by 4.7% year-on-year in the second quarter, missing expectations and slowing compared to earlier in the year. This weaker growth, coupled with sluggish consumer demand, is pushing up gold prices as investors seek safe havens amid global uncertainties.
The ongoing Russia-Ukraine war and Middle Eastern conflicts are also contributing to gold's appeal.
Recently, Israeli forces attacked the Nuseirat refugee camp 63 times in a week, resulting in 91 Palestinian deaths and 251 injuries.
Israeli Prime Minister Netanyahu is sending negotiators to resume talks on captives, with fighting continuing in Gaza, where the death toll stands at 38,983 and injuries at 89,727. Since the October 7 Hamas attacks, Israel has reported 1,139 deaths, with captives still held in Gaza.
Hence, the weaker economic growth in China and ongoing global conflicts, including the Russia-Ukraine war and Middle East tensions, have heightened gold's appeal as a safe-haven asset, driving up its prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2405.36, up a modest 0.03%. On the 4-hour chart, the pivot point is positioned at $2412.14, indicating a critical juncture for traders. Immediate resistance is seen at $2435.02, with further resistance levels at $2453.93 and $2482.70.
On the downside, immediate support is identified at $2393.69, followed by stronger support at $2370.70 and $2350.44.
Technical indicators suggest a mixed outlook. The Relative Strength Index (RSI) is currently at 36, indicating that gold is approaching oversold territory but is not there yet.
This could imply potential buying interest if the RSI continues to drop. The 50-day Exponential Moving Average (EMA) stands at $2421.99, which is above the current price, suggesting a bearish trend in the short term.
Given the technical setup, a sell entry is recommended below the pivot point at $2412. The suggested take profit level is $2381, aligning with support levels that could act as potential targets for a downward move.
A stop loss should be placed at $2435 to protect against upside risks, which coincides with the immediate resistance level.
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GBP/USD Price Analysis – July 22, 2024
GBP/USD Price Analysis – July 22, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair maintained its upward trend and remained well-bid around the 1.2927 level, hitting an intra-day high of 1.2940.
The upward rally was supported by a bearish US dollar, which lost traction due to recent US political developments and rising expectations of a Federal Reserve rate-cut cycle starting in September.
On the other side, the diminishing probabilities of an August rate cut by the Bank of England have also played a significant role in underpinning the GBP/USD pair.
Looking forward, there are no major economic reports from the UK or US on Monday, so the GBP/USD pair will be influenced by changes in the US dollar. Market attention will focus on US political events, which will affect the broader risk sentiment and potentially boost the GBP/USD pair.
US Dollar Weakens on Political Shifts and Rate Cut Expectations, Boosting GBP/USD
On the US front, the broad-based US dollar starts the new week on a bearish note due to recent political developments. US President Joe Biden’s surprising decision to step down from the 2024 Presidential election raises the probability of Donald Trump becoming the next president.
This political shift, combined with expectations that the Federal Reserve might cut interest rates in September, has made investors more willing to take risks.
As a result, the US dollar, which is usually seen as a safe-haven asset, loses strength. This weakness in the dollar supports the GBP/USD pair, making the British pound stronger against the greenback.
GBP/USD Strengthens on Diminished Rate Cut Expectations and Strong UK Economic Data
On the other hand, the upticks in the GBP/USD pair are further bolstered by reduced chances of an interest rate cut by the Bank of England (BoE) in August. BoE Chief Economist Huw Pill mentioned earlier this month that more work is needed to control persistent inflation in the UK.
Meanwhile, UK consumer inflation rose by 2% year-on-year in June, slightly more than expected, following better-than-expected GDP growth of 0.4% in May. These factors have led investors to delay their expectations for a rate cut, supporting the British pound against the US dollar.
Therefore, the reduced probability of a Bank of England rate cut, combined with rising UK inflation and strong GDP growth, strengthens the GBP/USD pair by boosting investor confidence in the British pound.
GBP/USD - Technical Analysis
GBP/USD is currently trading at $1.29145, reflecting a slight increase of 0.05%. The 4-hour chart shows a pivot point at $1.2939, serving as a critical threshold for market movements.
Immediate resistance is pegged at $1.2972, with further resistance levels at $1.3010 and $1.3046. On the downside, immediate support is seen at $1.2875, followed by deeper support levels at $1.2834 and $1.2782.
The technical indicators reveal a cautious market sentiment. The Relative Strength Index (RSI) is at 39, indicating that the pair is approaching oversold territory. This could signal potential buying interest if the RSI continues to decline.
The 50-day Exponential Moving Average (EMA) stands at $1.2939, slightly above the current price, suggesting a bearish short-term outlook if the price remains below this level.
Given the technical configuration, a sell strategy is recommended below the pivot point of $1.29400.
The proposed take profit level is $1.28800, aligning with the immediate support zone, offering a target for potential downside movement. A stop loss should be set at $1.29800, just above the first resistance level, to mitigate risk against unexpected upward price shifts.
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GOLD Price Analysis – July 22, 2024
EUR/USD Price Analysis – July 22, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward trend, trading robustly around 1.0891 and reaching an intra-day peak of 1.0903.
This rally was bolstered by a weakening US dollar, which lost momentum due to recent US political developments and heightened expectations of a Federal Reserve rate cut cycle potentially beginning in September.
Additionally, the European Central Bank's decision to keep interest rates unchanged and refrain from signaling any imminent rate cuts at its upcoming meeting further supported the euro, contributing to the gains in the EUR/USD pair.
Moving ahead, investors are keeping an eye on German Retail Sales and the US Chicago Fed National Activity Index, both due later today. Meanwhile, they are watching for signals about the Federal Reserve's future actions, which will impact dollar prices.
Political Shifts and Fed Rate Cut Expectations Weaken the US Dollar, Supporting EUR/USD
On the US front, the broad-based US dollar starts the new week on a bearish note due to recent political developments. US President Joe Biden’s surprising decision to step down from the 2024 Presidential election raises the probability of Donald Trump becoming the next president.
This political shift, combined with expectations that the Federal Reserve might cut interest rates in September, has made investors more willing to take risks.
As a result, the US dollar, usually seen as a safe-haven asset, loses strength and supports the EUR/USD pair. Additionally, rising bets on a Federal Reserve rate cut in September and the weak US labor market exert selling pressure on the dollar.
However, the CME FedWatch Tool shows less than a 5% probability of a move at the July meeting, but a nearly full rate cut is expected in September. New York Fed President John Williams indicated a rate cut could be warranted in the coming months, but not in July.
ECB’s Steady Rate Policy and Cautious Outlook Boost EUR/USD
On the other hand, the upticks in the EUR/USD pair are further bolstered by the ECB left interest rates unchanged last week and gave no hints about rate cuts at its next meeting.
ECB President Christine Lagarde indicated that although inflation in the Eurozone is getting better, high rates need to be maintained for now. The likelihood of a rate cut in September has decreased from 73% to 65%.
This cautious approach by the ECB is expected to support the euro against the US dollar. In short, the euro benefits from the ECB’s decision to hold rates steady and its careful, data-based strategy.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.08846, reflecting a modest gain of 0.09%. On the 4-hour chart, the pivot point is situated at $1.0876, which acts as a crucial marker for market sentiment.
Immediate resistance is identified at $1.0904, with subsequent resistance levels at $1.0924 and $1.0948. On the downside, immediate support lies at $1.0861, followed by stronger support at $1.0844 and $1.0825.
Technical indicators provide a nuanced picture. The Relative Strength Index (RSI) is currently at 44, suggesting that the currency pair is in neutral territory. This indicates that there is no immediate overbought or oversold condition, leaving room for further price movements in either direction.
The 50-day Exponential Moving Average (EMA) stands at $1.0888, slightly above the current price, hinting at a potential bearish trend if the price remains below this level.
Given the technical setup, a cautious approach is advised. A sell entry is recommended below the pivot point at $1.08953.
The suggested take profit level is $1.08603, aligning with the immediate support level. To mitigate risk, a stop loss should be placed at $1.0920, just above the next resistance level, to guard against unexpected upward movements.
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GOLD Price Analysis – July 22, 2024
S&P500 (SPX) Price Analysis – July 19, 2024
Daily Price Outlook
The S&P 500 index continues its bearish trend, settling around 5,544.59 after a significant decline in recent sessions. This downward movement is primarily due to a shift away from high-growth technology stocks.
Investors are capitalizing on profits from technology shares that have recently surged, reallocating their funds into sectors expected to benefit from anticipated reductions in borrowing costs.
Despite a positive shift towards small-cap and cyclical stocks, broader market sentiment has turned negative. The trend of profit-taking has extended beyond technology, affecting nearly all sectors within the S&P 500.
This widespread sell-off has contributed to a further decline in the index, reflecting a broad-based market retreat.
Economic Data and Fed Rate Cut Speculation Impact on S&P 500
On the US front, the previously released economic data and speculation about Federal Reserve rate cuts have significantly influenced market sentiment.
Recent inflation data, including a slowdown in both annual headline and core Consumer Price Index (CPI) figures, has fueled expectations for interest rate cuts starting in September.
Meanwhile, the rise in the Unemployment Rate and more people filing for unemployment benefits has added to the negative mood in the market.
The S&P 500 is reflecting this uncertainty, as investors are unsure whether lower borrowing costs will benefit them, given that economic data might not match what the Federal Reserve hopes for.
The recent drop in the index shows that investors are being careful due to conflicting economic signals and uncertainty about possible future rate cuts.
Geopolitical Uncertainty and Humanitarian Crisis Impact on S&P 500 Index
Geopolitical tensions and humanitarian crises have added more pressure in the S&P 500's performance. Recent escalations in the Middle East, particularly Israel’s intensified strikes on Gaza, have exacerbated regional instability and raised concerns about broader conflicts.
Additionally, doubts about the US's commitment to Taiwan and ongoing geopolitical strife contribute to market uncertainties. The humanitarian crisis in Gaza, coupled with criticism from international actors and the potential for further conflict, has created a volatile environment.
These geopolitical concerns, combined with uncertainties about the US Presidential elections and a strong US Dollar, have pressured the S&P 500. Investors seeking safe-haven assets may shift their focus, influencing market sentiment and contributing to the index's downward trend.
S&P 500 - Technical Analysis
The S&P 500 is currently trading at $5,544.58, marking a decline of 0.78%. The 4-hour chart highlights critical levels for investors to monitor. The pivot point is set at $5,522.66, serving as a key indicator of potential price movements.
Immediate resistance is noted at $5,576.48, with further resistance levels at $5,607.64 and $5,643.05. On the downside, immediate support is identified at $5,490.08, followed by $5,446.88 and $5,405.81.
Technical indicators suggest a cautious market sentiment. The Relative Strength Index (RSI) stands at 45, indicating neither overbought nor oversold conditions, suggesting room for movement in either direction.
The 50-day Exponential Moving Average (EMA) is positioned at $5,517.33, providing a potential support level that could be crucial in the near term.
Given the technical setup, traders might consider placing a buy limit order at $5,520, just below the pivot point, to capitalize on potential upward momentum.
The suggested trade setup includes an entry price at $5,520, a take profit target at $5,575, and a stop loss at $5,490. This strategy aims to leverage a rebound while maintaining a controlled risk profile.
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GOLD Price Analysis – July 19, 2024
EUR/USD Price Analysis – July 19, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair continued its downward trend, settling around 1.0884 and hitting an intraday low of 1.0876.
This decline was driven by a strengthening US dollar, bolstered by growing speculation that the Republican Party might win the upcoming US Presidential elections.
Additionally, the EUR/USD pair's losses were exacerbated by comments from ECB official Villeroy, who suggested that two more rate cuts this year might be appropriate. This outlook weighed on the euro, further contributing to the pair's decline.
US Dollar Strengthens Amid Fed Rate Cut Speculation and Rising Unemployment, Potentially Impacting EUR/USD
On the US front, the broad-based US dollar is gaining strength even though investors anticipate that the Federal Reserve (Fed) might start cutting interest rates in September, as they believe inflation is moving closer to the 2% target.
Policymakers, however, are seeking more conclusive data before making a decision. The speculation around Fed rate cuts increased following June’s Consumer Price Index (CPI) report, which revealed a return to disinflation.
Both annual headline and core CPI slowed more than expected, with monthly headline inflation declining for the first time in over four years. Additionally, easing conditions in the US labor market have further bolstered expectations for rate cuts.
On the data front, the Unemployment Rate increased to 4.1% in June, the highest level since November 2021. Initial Jobless Claims for the week ending July 12 reached 243,000, surpassing both the expected 230,000 and the previous week’s 223,000. This rise in claims suggests more people are seeking unemployment benefits than anticipated.
Therefore, the bullish US dollar amid rising unemployment and expectations of Fed rate cuts could weigh on the EUR/USD pair, potentially causing the euro to depreciate against the dollar.
ECB's Uncertain Rate Cut Outlook and Lower Growth Projections May Weaken Euro
On the EUR front, the ECB kept interest rates unchanged on Thursday, with President Christine Lagarde avoiding any firm commitment to future rate cuts.
However, ECB policymaker Francois Villeroy de Galhau indicated that markets expect two more rate cuts this year, with possible policy tightening starting in September and continuing in December.
The ECB’s Survey of Professional Forecasters revealed that price pressures are expected to remain around 2.4%, returning to 2.0% by 2025. The growth target for 2025 was revised down to 0.7% from the previous estimate of 0.5%.
Therefore, the ECB's uncertain stance on rate cuts and lower growth projections may weaken the euro, potentially leading to a decline in the EUR/USD pair as market expectations shift.
EUR/USD - Technical Analysis
The EUR/USD is currently trading at $1.08864, reflecting a modest decline of 0.07%. The 4-hour chart indicates critical levels that traders should monitor closely. The pivot point is set at $1.0920, serving as a key indicator for potential price movements.
Immediate resistance is identified at $1.0909, with subsequent resistance levels at $1.0928 and $1.0948. On the downside, immediate support is at $1.0861, followed by $1.0844 and $1.0825.
Technical indicators suggest a cautious sentiment in the market. The Relative Strength Index (RSI) stands at 42, indicating a slight bearish tilt but not yet in oversold territory. The 50-day Exponential Moving Average (EMA) is positioned at $1.0880, just below the current price, acting as a potential support level.
Given the technical setup, traders might consider placing a buy order above the 50-day EMA at $1.08805 to capitalize on potential upward momentum.
The suggested trade setup includes an entry price above $1.08805, a take profit target at $1.09199, and a stop loss at $1.08598. This strategy aims to leverage a rebound while maintaining a controlled risk profile.
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GOLD Price Analysis – July 19, 2024
GOLD Price Analysis – July 19, 2024
Daily Price Outlook
Gold (XAU/USD) extended its losing streak for the third consecutive trading day, falling to around the $2,410 level. This decline follows a recent surge to all-time highs above $2,480 on Tuesday.
However, the gold's downtrend is being pressured by a rebound in the US Dollar (USD) and rising bond yields. This shift is fueled by increasing speculation that the Republican Party may secure a win in the upcoming US Presidential elections later this year.
However, the expectations for Donald Trump’s comeback as US President have increased after an assassination attempt. Biden’s possible withdrawal due to health issues also boosts Trump’s chances and strengthens the US Dollar.
Economic Data and Fed Rate Cut Speculation Boost Gold's Appeal
On the US front, investors expect the Federal Reserve (Fed) to start cutting interest rates in September, believing inflation is returning to the 2% target. Policymakers still want more confirming data.
However, the speculation for Fed rate cuts grew after June's Consumer Price Index (CPI) showed resumed disinflation, with both annual headline and core CPI slowing more than expected.
Additionally, monthly headline inflation decreased for the first time in over four years, and cooling US labor market conditions have further supported the prospects for rate cuts.
On the data front, the Unemployment Rate rose to 4.1% in June, the highest since November 2021. Initial Jobless Claims for the week ending July 12 were 243K, above the expected 230K and the previous 223K, indicating more people are filing for unemployment benefits than anticipated.
These developments support expectations for Fed rate cuts, boosting gold's appeal as a hedge against lower interest rates. Consequently, gold prices are likely to remain strong amid economic uncertainties.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,417.88, reflecting a decline of 0.77%. The 4-hour chart highlights critical levels for traders. The pivot point is set at $2,432.60, serving as a crucial indicator of potential price movements.
Immediate resistance is noted at $2,451.84, followed by $2,482.70 and $2,510.78. On the downside, immediate support is identified at $2,406.52, with further supports at $2,381.37 and $2,350.44.
Technical indicators point towards a bearish sentiment. The Relative Strength Index (RSI) stands at 37, suggesting the metal is approaching oversold conditions. The 50-day Exponential Moving Average (EMA) is positioned at $2,416.98, closely aligning with current prices, indicating a potential support level.
Given the technical setup, traders might consider selling below the pivot point of $2,432. The suggested trade setup includes an entry price below $2,432, a take profit target at $2,394, and a stop loss at $2,453.
This strategy is designed to capitalize on potential downward momentum while mitigating risk through a clearly defined stop loss.
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EUR/USD Price Analysis – July 19, 2024
USD/JPY Price Analysis – July 18, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair maintained its upward trend and remained well-bid around 156.45, hitting the intra-day high of 156.59 level. This is mainly because the US Dollar is performing well compared to the Japanese Yen.
US Treasury bond yields have also slightly risen, making them more attractive to investors looking for higher returns despite uncertain global economic conditions. These factors together are boosting the USD/JPY pair, indicating more confidence in the US Dollar's strength against the Yen in the market.
Moreover, the US economy has demonstrated resilience across various economic indicators, including steady retail sales figures and optimistic sentiments from Federal Reserve officials regarding inflation trends.
Federal Reserve Chairman Jerome Powell's recent remarks have underscored confidence that inflation is progressing towards the Fed's target, further bolstering support for the US Dollar.
Expectations of Further Intervention by Japanese Authorities and Its Impact on USD/JPY Pair
Traders and analysts are closely monitoring the actions of Japanese authorities, who have hinted at potential interventions in the currency market to prevent excessive volatility in the Japanese Yen. Recent statements by Japan's top currency diplomat, Masato Kanda, underscore the authorities' readiness to intervene if speculators drive "excessive" movements in the Yen.
The anticipation of intervention has created a cautious atmosphere among traders dealing with the USD/JPY pair. The intervention actions, if implemented, could potentially limit the Yen's appreciation against the US Dollar, thereby supporting the pair's upward momentum.
Market participants are keenly observing any developments from Japanese policymakers, as these interventions could significantly influence short-term movements in the currency markets.
Fed's Inflation Optimism and Rate Cut Speculation and Its Impact on USD/JPY Pair
On the US front, the Federal Reserve's stance on monetary policy and inflation expectations play a crucial role in shaping the trend of the USD/JPY pair.
Recently, Fed officials, including Governor Christopher Waller and Richmond Fed President Thomas Barkin, have hinted at the possibility of an interest rate cut in the upcoming September meeting. This speculation has been fueled by easing inflationary pressures and a desire to sustain economic momentum amidst global uncertainties.
Market expectations for a rate cut have increased substantially, with the CME Group's FedWatch Tool indicating a high probability of a 25-basis point rate reduction. Such expectations tend to weigh on the US Dollar's strength, as lower interest rates make the currency less attractive to investors seeking higher yields.
Consequently, the USD/JPY pair may face downward pressure if the Fed moves forward with rate cuts, as it would diminish the Dollar's appeal relative to the Yen.
USD/JPY - Technical Analysis
The USD/JPY is trading at $156.079, up 0.09%, indicating slight upward movement in a cautiously optimistic market. The 4-hour chart highlights significant levels for traders to consider.
The pivot point is marked at $156.7620, a crucial level that could determine near-term price action. Immediate resistance is identified at $157.7310, with further resistance levels at $158.6180 and $159.4250. On the downside, immediate support lies at $155.3700, followed by $154.5630 and $153.6750.
The Relative Strength Index (RSI) is at 31, suggesting that the pair is approaching oversold territory.
This indicator implies potential for a rebound or at least a temporary stabilization. The 50-day Exponential Moving Average (EMA) stands at $159.2220, well above the current price, indicating a bearish trend as long as prices remain below this level.
For traders, a strategic approach would be to set a sell limit at the pivot point of $156.762. Aiming for a take profit level at $154.987 ensures capturing gains from anticipated downward movement. To manage risk, a stop loss at $157.650 is recommended.
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AUD/USD Price Analysis – July 18, 2024
AUD/USD Price Analysis – July 18, 2024
Daily Price Outlook
Despite the renewed strength of the US dollar, the AUD/USD currency pair was able to maintain its upward trend and remained well-bid around the 0.6736 level, hitting an intra-day high of 0.6744.
The reason for this upward rally can be attributed to the previously released stronger domestic jobs report, which supports the case for another possible rate hike by the Reserve Bank of Australia (RBA).
This underpinned the Australian currency. Additionally, the risk-on sentiment in the market was seen as another key factor that underpinned the riskier Australian dollar and contributed to the AUD/USD pair's gains.
On the other hand, the US dollar managed to stop its early-day losses and gained positive traction, which was seen as a key factor that kept the lid on any additional gains in the AUD/USD pair. Meanwhile, the rising economic headwinds in China, along with falling copper prices, also capped gains in the AUD/USD pair.
AUD/USD Supported by Stronger Jobs Report Despite Higher Unemployment Rate
On the AUD front, its rise is backed by a stronger domestic jobs report, suggesting the potential for another rate hike by the Reserve Bank of Australia (RBA). Although the mixed data hasn't significantly changed expectations for the RBA's next policy move, it has modestly boosted the Australian Dollar and supported the AUD/USD pair.
On the data front, the Australian Bureau of Statistics (ABS) released figures this Thursday indicating that the Unemployment Rate increased to 4.1% in June, slightly higher than both expectations and the previous 4.0% figure.
However, this disappointment was mitigated by a surprise uptick in the number of employed individuals, rising from 39.7K in May to 50.2K in June, well surpassing the anticipated 20.0K increase according to consensus estimates.
Therefore, the AUD/USD pair was modestly supported by a stronger jobs report despite a higher unemployment rate. The unexpected increase in employed individuals helped offset concerns, influencing the pair's stability.
Impact of Fed's Inflation Optimism and Rate Cut Speculation on USD and AUD/USD Pair
On the US economic front, the Federal Reserve has expressed optimism regarding inflation reaching its targets, which has led to speculation about potential interest rate cuts.
Fed Governor Christopher Waller and Richmond Fed President Thomas Barkin have noted a moderation in inflationary pressures, prompting market expectations for a 25-basis point rate cut in September to rise sharply to 93.5%, up from 69.7% previously.
Recent economic data shows that US Retail Sales for June held steady at $704.3 billion, meeting market expectations after a revised 0.3% increase in May.
Looking forward, upcoming reports are expected to show a rise in weekly jobless claims, alongside a moderate improvement in the Philadelphia Fed manufacturing index.
As a result, the Federal Reserve's positive outlook on inflation and potential rate cuts has bolstered the US dollar, exerting downward pressure on AUD/USD.
Market attention is now keenly fixed on upcoming US economic data releases, which are expected to sway the pair's trajectory amidst heightened speculation over rate cuts.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.67391, up 0.13%, reflecting a modest uptick amidst a broader market stability. The 4-hour chart reveals critical levels that traders should monitor. The pivot point is set at $0.6745, indicating a pivotal area for potential price action shifts.
Immediate resistance stands at $0.6760, followed by stronger resistance at $0.6778 and $0.6799. Conversely, immediate support is located at $0.6716, with further support levels at $0.6702 and $0.6685.
The Relative Strength Index (RSI) is at 48, suggesting a neutral market sentiment with neither overbought nor oversold conditions. This positioning implies potential for either upward or downward movements depending on forthcoming economic data and market reactions.
Additionally, the 50-day Exponential Moving Average (EMA) is positioned at $0.6750, slightly above the current price, indicating a need for a sustained move above this level to confirm a bullish trend.
For traders, a strategic entry point would be above $0.67168, aiming for a take profit level at $0.67595. Setting a stop loss at $0.66953 is advisable to mitigate potential downside risks. This approach leverages the modest bullish momentum while ensuring protection against unexpected market shifts.
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USD/JPY Price Analysis – July 18, 2024
GOLD Price Analysis – July 18, 2024
Daily Price Outlook
Gold price (XAU/USD) extended its upward rally and remained well-bid around the 2,466 level, hitting an intraday high of 2,474. However, the reason for this upward rally can be attributed to the growing optimism that the Federal Reserve (Fed) will reduce rates in September.
Markets now indicate a 93.5% probability of a 25-basis point rate cut at the September Fed meeting, up from 69.7% a week earlier. This makes non-yielding assets like gold more attractive to investors.
On the other hand, the US dollar gained bullish traction after falling to its lowest level since March during the previous session. Economic data due later in the session is likely to show an increase in weekly initial jobless claims.
At the same time, the Philadelphia Fed manufacturing index is set to indicate a slight improvement in conditions. Hence, the bullish US dollar could cap gains in the gold price.
Mixed Impact on Gold Prices Amid Fed Rate Cut Speculations and Stronger US Dollar
On the US front, the Federal Reserve is optimistic about inflation meeting its targets, hinting at potential interest rate cuts. Fed Governor Christopher Waller and Richmond Fed President Thomas Barkin see easing inflation, leading markets to predict a 93.5% chance of a 25-basis point rate cut in September, up from 69.7% before.
However, the US Dollar has strengthened due to improved Treasury yields, limiting gold prices' rise. Fed member Dr. Adriana Kugler stressed the need for more data to support rate cuts, while Chair Jerome Powell hinted that future rate cuts could be delayed despite nearing inflation targets.
On the data front, US Retail Sales for June were stable at $704.3 billion, matching market expectations, following a revised 0.3% increase in May. Later, reports are expected to show a rise in weekly jobless claims and a slight improvement in the Philadelphia Fed manufacturing index.
Therefore, the potential Fed rate cuts and stable retail sales support gold prices, but the stronger US Dollar and improved Treasury yields limit gains, resulting in a mixed impact on gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2472.710, up 0.27%, as it continues to attract investors amid global economic uncertainties. The 4-hour chart shows gold hovering near key levels, with a pivot point set at $2490.00.
Immediate resistance is found at $2485.91, with subsequent resistance levels at $2510.78 and $2529.15. On the downside, immediate support is at $2430.33, followed by $2406.52 and $2381.37.
The Relative Strength Index (RSI) stands at 70, indicating overbought conditions that may prompt a short-term pullback. However, the 50-day Exponential Moving Average (EMA) at $2408.46 suggests a bullish trend, with prices consistently trading above this level.
Given the current technical setup, traders might consider entering long positions above $2455, targeting a take profit level of $2490. A stop loss should be placed at $2440 to manage risk. This strategy capitalizes on the prevailing bullish momentum while guarding against potential downside risks.
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USD/JPY Price Analysis – July 18, 2024