EUR/USD Price Analysis – June 26, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair has been experiencing significant bearish pressure recently, falling below the 1.0685 level. This decline shows growing concerns over the Euro's near-term outlook amidst uncertainties surrounding European Union legislative elections and potential policy shifts within the European Central Bank (ECB).
It should be noted that the recent snap election announcement in France, following defeats for President Emmanuel Macron's party, has heightened market concerns about political instability in the Eurozone.
Economic indicators from Germany, the largest economy in the Eurozone, also reflect a troubling trend, with the IFO Expectations index unexpectedly falling. This suggests weaker economic prospects and has reduced investor confidence in the Euro.
Fed Maintains Hawkish Guidance on Interest Rates and Bullish US Dollar: Impact on EUR/USD Pair
On the US front, the Federal Reserve's commitment to maintaining its current interest rate framework has bolstered the US Dollar against its major counterparts, including the Euro.
Fed policymakers, led by recent comments from Governor Michelle Bowman, have signaled a reluctance to consider rate cuts in the near term, citing the need for sustained declines in inflationary pressures before any policy easing measures are entertained.
This hawkish stance contrasts sharply with market expectations, where investors had priced in potential rate cuts amid softer inflation data from the United States.
The prospect of a prolonged period of higher interest rates in the US has attracted capital flows into the Dollar, heightening its appeal as a safe-haven currency and exerting downward pressure on the EUR/USD pair.
Fears Over Eurozone Elections Intensify, ECB Rate Cut Expectations Grow: Impact on EUR/USD Pair
On the other hand, the Eurozone faces heightened political uncertainty following President Macron's call for a snap election in France, amid a resurgence of support for far-right parties.
This political turbulence has injected fresh volatility into Euro pairs, including the EUR/USD, as investors weigh the potential implications for Eurozone economic stability and policy continuity.
At the same time, worsening economic signals from Germany have led to expectations that the ECB might lower interest rates repeatedly to boost growth and inflation.
This possibility of more monetary easing has pushed down the Euro against the US Dollar, as investors foresee different paths for interest rates between the ECB and the Fed.
EUR/USD - Technical Analysis
The EUR/USD pair is currently trading at $1.06927, reflecting a decline of 0.19%. The 4-hour chart highlights a pivot point at $1.0699, which serves as a crucial indicator for the pair's direction.
Immediate resistance levels are noted at $1.0716, $1.0727, and $1.0745, while immediate support is found at $1.0672, followed by $1.0655 and $1.0641.
The Relative Strength Index (RSI) is positioned at 36, suggesting a bearish momentum in the market. Additionally, the 50-day Exponential Moving Average (EMA) at $1.0712 indicates a resistance level close to the current price, reinforcing the bearish outlook.
The technical indicators suggest that EUR/USD remains under pressure, with a bearish trend below the pivot point of $1.0699. A break below this level could trigger further declines towards the immediate support at $1.0672, and potentially lower towards $1.0655 and $1.0641.
Conversely, if the pair manages to break above the immediate resistance at $1.0716, it could signal a shift towards a bullish trend, targeting higher resistance levels at $1.0727 and $1.0745.
For traders, the recommended strategy is to sell below $1.06982, aiming for a take profit at $1.06762, with a stop loss set at $1.07109.
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AUD/USD Price Analysis – June 25, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair failed to extend its upward rally and turned bearish, facing pressure around the 0.6643 level, with an intraday low matching that level. The downward trend was attributed to risk-off market sentiment, which undermined riskier assets like the Australian dollar, contributing to declines in the AUD/USD pair. Conversely, the bullish US dollar, supported by upbeat US economic data, also exerted pressure on the AUD/USD pair.
On the other hand, Australia's monthly CPI is estimated to have grown at a faster pace of 3.8% in May. This could support the AUD by limiting its losses, indicating stronger inflation that may help stabilize its value against other currencies.
Impact of Australian Inflation Expectations on the AUD/USD Pair
On the AUD front, the Australian Dollar is showing strength as investors await the upcoming monthly Consumer Price Index (CPI) data for May, due on Wednesday. Analysts predict Aussie inflation to rise to 3.8% from April's 3.6%. This anticipated increase suggests that the Reserve Bank of Australia (RBA) will likely keep interest rates unchanged for a longer period. Currently, financial markets are pricing in expectations that the RBA won't lower its Official Cash Rate throughout the year, buoying the outlook for the Australian Dollar amid these inflationary signals.
Therefore, the expected rise in Australian inflation could support the AUD against the USD, with markets anticipating the RBA to maintain interest rates, boosting the AUD/USD pair.
Impact of US Economic Factors on the AUD/USD Pair
On the US front, the broad-based US dollar regained strength following stronger-than-expected US PMI data and a surprisingly hawkish stance from the Federal Reserve. San Francisco Fed President Mary Daly emphasized the Fed's commitment to maintaining rates until inflation approaches 2%. However, she also highlighted the importance of supporting the labor market, suggesting potential rate cuts if unemployment rises. This dual approach to inflation and employment boosted market confidence in the dollar, which rebounded on positive economic indicators and the Fed's cautious yet vigilant stance on interest rates.
Investors are focused on upcoming speeches by Federal Reserve members Lisa Cook and Michelle Bowman for insights into future monetary policy. Key US economic releases this week, including the final Q1 GDP report on Thursday and the May PCE Price Index report on Friday, will impact market sentiment and financial markets.
The US dollar's strength, bolstered by upbeat economic data and a hawkish Fed stance, may pressure the AUD/USD pair if US indicators continue to exceed expectations, influencing market sentiment and potentially weakening the Australian dollar.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.66695, reflecting a modest increase of 0.10%. On the 4-hour chart, the pivot point is set at $0.67, a crucial level that could dictate the pair’s next move.
Immediate resistance levels are clustered closely at $0.6710, $0.6730, and $0.6750. These levels suggest potential upward targets if the price manages to break through the pivot point, indicating bullish momentum.
On the downside, immediate support is found at $0.6650, with further support at $0.6625 and $0.6600. These levels are critical for traders to monitor, as they indicate where the price might find stability if it begins to decline.
The Relative Strength Index (RSI) is currently at 60, suggesting a neutral market sentiment, slightly leaning towards the overbought territory. This could imply that the AUD/USD has some room to rise, but traders should be cautious of potential reversals.
The 50-day Exponential Moving Average (EMA) at $0.6700 serves as a significant resistance level. A break above this EMA would reinforce a bullish trend, supporting further gains. The overall technical outlook for AUD/USD remains cautiously optimistic above the pivot point of $0.67.
Given the current indicators, traders might consider an entry price for buying above $0.66585, aiming for a take profit at $0.66763, with a stop loss set at $0.66440. Maintaining a position above the pivot point could sustain the bullish bias, while a drop below this level may trigger a sharper selling trend.
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- GOLD Price Analysis – June 25, 2024
GOLD Price Analysis – June 25, 2024
Daily Price Outlook
Gold (XAU/USD) was unable to stop its downward trend, remaining under pressure around $1,932.23 and hitting an intraday low of $1,922.80. This downward movement was largely influenced by the subdued market mood, which typically diminishes demand for safe-haven assets such as gold.
Meanwhile, the US dollar's renewed strength, fueled by the stronger-than-expected US Purchasing Managers Index (PMI) and a hawkish Fed stance, played a major role in undermining the gold price.
Impact of Federal Reserve and Economic Data on the US Dollar and Investor Sentiment
On the US front, the broad-based US dollar managed to stop its downward trend and turned bullish, possibly due to the previously released stronger-than-expected US PMIs and the Federal Reserve's hawkish surprise. San Francisco Fed President Mary Daly emphasized that the Fed should not cut rates until inflation trends towards 2%.
However, she warned against neglecting the labor market, suggesting that if unemployment rises, the Fed might reduce rates to stimulate demand and support employment, balancing inflation control with job market health.
Therefore, the US dollar reversed its decline and strengthened, likely influenced by upbeat US PMIs and a hawkish Federal Reserve stance. In the meantime, the Daly's cautious rate-cut stance amidst inflation concerns may support the dollar further if economic data continues to exceed expectations.
Investors will pay close attention to speeches by Federal Reserve members Lisa Cook and Michelle Bowman on Tuesday for clues on future monetary policy directions.
Additionally, significant US economic data releases this week include the final Q1 Gross Domestic Product (GDP) report on Thursday and the May Personal Consumption Expenditure (PCE) Price Index report on Friday, shaping market expectations and influencing financial markets.
Geopolitical Tensions Boost Safe-Haven Demand for Gold
On the geopolitical front, escalating tensions between Russia and the United States over an incident in Crimea involving US-provided missiles could help safe-haven assets limit their losses. Russia has accused the US of indirectly fueling conflicts through proxies, which could lead to retaliatory measures.
This geopolitical friction, coupled with ongoing conflicts in the Middle East and Ukraine, may increase global demand for safe-haven assets like gold in the short term, as investors seek stability amid rising uncertainties.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2326.64, reflecting a slight decline of 0.27%. The 4-hour chart reveals the pivot point at $2325.63, serving as a critical level for traders.
Immediate resistance is identified at $2335.29, with further resistance levels at $2346.16 and $2355.37. These levels suggest potential upward movement if gold prices break above them.
On the downside, immediate support is seen at $2317.83, followed by $2307.61 and $2296.11. These support levels indicate where the price might find stability if it continues to decline.
The Relative Strength Index (RSI) at 42 indicates a neutral market sentiment, leaning slightly towards the oversold territory, which could potentially lead to a rebound if buying interest increases.
The 50-day Exponential Moving Average (EMA) stands at $2337.14, acting as a significant resistance level. A break above this EMA would indicate a shift towards bullish momentum, supporting a potential upward trend.
The overall outlook for gold remains cautiously bullish above the pivot point of $2325.63. Traders should consider buying above $2326, with a target of $2340 and a stop loss at $2315. However, maintaining a position below the pivot point could drive a sharp selling trend.
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USD/CAD Price Analysis – June 25, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair has maintained its upward rally and remained well bid around 1.3675, hitting the intra-day high of 1.368 1level. However, the bullish performance of the USD/CAD pair is driven by a combination of factors, including a stronger US dollar supported by a hawkish Fed stance and upbeat US economic data. Meanwhile, the lower WTI price limit the upside of the commodity-linked Canadian Dollar and contributed to the USD/CAD currency pair gains.
Impact of US Economic Data and Fed Policy on USD Strength and USD/CAD Pair
On the US front, the US dollar strengthened broadly after robust US PMI data and a unexpectedly hawkish Federal Reserve stance. San Francisco Fed President Mary Daly underscored the Fed's pledge to keep rates steady until inflation nears 2%. However, she also stressed backing the labor market, hinting at possible rate adjustments if unemployment climbs. This balanced approach to inflation and employment bolstered market faith in the dollar, which rallied on upbeat economic signals and the Fed's prudent yet attentive approach to interest rates.
Therefore, the USD/CAD pair surged as the US dollar gained strength on positive economic data and a hawkish Fed stance, overshadowing the Canadian dollar amid cautious sentiment and potential rate adjustments highlighted by Mary Daly.
Impact of Crude Oil Prices on USD/CAD and Market Events to Watch
Another significant factor influencing the bullish trend of the USD/CAD pair is the recent decline in crude oil prices, which directly impacts the commodity-linked Canadian dollar (CAD). Canada, a major exporter of oil to the United States, typically sees a negative correlation between oil prices and the CAD's strength. Currently, West Texas Intermediate (WTI), the benchmark for US crude oil, is trading around $81.40 per barrel. Despite this decline, crude prices could find support from anticipated strong summer driving demand and ongoing geopolitical tensions in the Middle East, which may constrain further downside.
Hence, the drop in crude oil prices has placed downward pressure on the CAD, thereby bolstering gains for the USD/CAD pair.
Looking forward, market participants will keenly watch upcoming speeches by Federal Reserve members Lisa Cook and Michelle Bowman for clues regarding future monetary policy directions. Additionally, key US economic releases scheduled for this week, such as the final Q1 GDP report on Thursday and the May PCE Price Index report on Friday, are expected to influence market sentiment and financial markets significantly.
USD/CAD - Technical Analysis
The USD/CAD pair is trading at $1.36491, showing a slight decline of 0.11%. On the 4-hour chart, the pivot point is marked at $1.3641, a critical level that could determine the pair’s next movement. Immediate resistance levels are identified at $1.3666, $1.3690, and $1.3717.
These levels represent potential upward targets if the price rebounds, indicating a shift in bullish momentum.
On the downside, immediate support is found at $1.3618, followed by $1.3589 and $1.3561. These levels are essential for traders to monitor as they suggest where the price might find stability if the downward trend continues.
The Relative Strength Index (RSI) is currently at 34, indicating that the pair is approaching oversold territory. This could imply a potential for a bounce-back, but traders should remain cautious of further declines.
The 50-day Exponential Moving Average (EMA) at $1.3690 acts as a significant resistance level. A break above this EMA would reinforce a bullish trend, suggesting further gains.
However, maintaining a position below the pivot point indicates a bearish outlook. The overall technical outlook for USD/CAD remains bearish below the pivot point of $1.3641.
Given the current indicators, traders might consider an entry price for selling around $1.36658, aiming for a take profit at $1.36239, with a stop loss set at $1.36908.
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GBP/USD Price Analysis – June 24, 2024
Daily Price Outlook
During the European trading session, the GBP/USD pair has maintained its upward trend and remain bullish around 1.2664, hitting the intra-day high of 1.2672 level. However, the reasons behind this upward movement is the temporary pause in the US Dollar's strength, as indicated by the US Dollar Index (DXY).
Despite initial gains, the DXY struggled to break above 106.00, which eased upward pressure on the Greenback against its major peers, including the Pound Sterling. On the flip side, market sentiment towards the Pound Sterling has been bolstered by upbeat data from the UK, including a rebound in economic activities despite uncertainties surrounding the UK elections.
Pound Sterling's Strength Amidst BoE Interest Rate Expectations
On the GBP front, the Pound Sterling has showed strength against its major counterparts, excluding the Euro, despite market expectations of the Bank of England (BoE) moving towards interest rate cuts starting from its August meeting.
However, the BoE's cautious stance on interest rates, described as "finely balanced," has led investors to anticipate a potential easing cycle to support economic growth amid global uncertainties.
While the prospect of lower interest rates typically weakens a currency, the Pound Sterling has managed to hold ground due to the BoE's measured approach and the return of headline inflation to the 2% target.
Meanwhile, Governor Andrew Bailey's acknowledgment of this target stability has provided additional support for the Pound, mitigating some of the downward pressure expected from future rate cuts.
Bearish US Dollar and Its Impact on GBP/USD Pair
On the US front, the broad-based US Dollar has experienced bearish sentiment despite initial positive indicators such as the unexpectedly strong PMI data and a brief period of strengthening against other currencies.
Market participants shifted their focus to the Federal Reserve's dovish signals, particularly amidst expectations of potential rate cuts as early as September. This shift in sentiment has placed downward pressure on the US Dollar, contributing to the GBP/USD pair's recent upward movement.
Investor anticipation of multiple rate cuts in 2024, contrary to the Federal Reserve's projections, has driven down US Treasury bond yields and supported alternative assets like gold. This environment of easing monetary policy expectations has weighed on the Greenback and contributed to the GBP/USD pair gains.
GBP/USD - Technical Analysis
GBP/USD is trading at $1.26571, reflecting a modest increase of 0.01%. The pivot point is positioned at $1.26496, serving as a crucial level for future price movements. Immediate resistance levels are observed at $1.26672, $1.26812, and $1.26947.
These levels suggest potential upward targets, indicating a bullish sentiment if the price maintains above the pivot point.
On the downside, immediate support is found at $1.26216, with further support at $1.26044 and $1.25842. These levels are critical in preventing a sharp decline, providing traders with potential entry points for long positions.
The Relative Strength Index (RSI) is currently at 48, indicating a neutral market sentiment. The 50-day Exponential Moving Average (EMA) stands at $1.26834, suggesting that the current price is slightly below this average, which may act as a resistance level in the short term.
Overall, the technical indicators suggest a cautious bullish outlook. Traders should consider a buy position above $1.26495, aiming for a take profit at $1.26814. A stop loss at $1.26219 is recommended to mitigate potential losses.
Conclusion: The GBP/USD pair shows a slightly bullish trend above the pivot point of $1.26496.
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GOLD Price Analysis – June 24, 2024
GOLD Price Analysis – June 24, 2024
Daily Price Outlook
Gold price (XAU/USD) started the new week on a bullish track and gained significant traction around the 2,325 level, hitting an intraday high of 2,332.
However, the bullish movement is largely due to heightened expectations of a Federal Reserve rate cut in September, which has put downward pressure on US Treasury bond yields, thereby supporting gold prices.
In the meantime, a risk-averse market sentiment, ongoing geopolitical tensions, and political instability in Europe have all played roles in driving the demand for gold as a safe-haven asset. On the other hand, stronger-than-anticipated US PMI figures have bolstered the US dollar, limiting further gains in gold prices.
Gold Price Boosted by Fed Rate Cut Expectations Amid Market Uncertainty
Despite the stronger-than-expected US PMIs and the Federal Reserve's unexpectedly hawkish stance, the US dollar failed to sustain its upward momentum and turned bearish. This shift is likely due to growing market expectations of a Fed rate cut in September.
Although the Federal Reserve has projected only one rate cut in 2024, market participants are anticipating the possibility of two cuts this year due to signs of easing inflation. The CME Group's FedWatch Tool indicates that there is currently more than a 60% chance that the Federal Reserve will start cutting interest rates at its September meeting.
This expectation is putting pressure on US Treasury bond yields and supporting the rise in gold prices.
Looking ahead, traders seem cautious and are likely to stay on the sidelines in anticipation of this week's significant US macroeconomic data releases, which include the final Q1 GDP figures and the Personal Consumption Expenditures (PCE) Price Index.
During this time, market participants will pay close attention to statements from key FOMC members for potential short-term trading cues.
On the data front, the US composite PMI rose slightly from 54.5 in May to 54.6 this month, marking its highest level since April 2022 and indicating a strong finish to the second quarter for the economy. Input prices declined to 56.6 from 57.2 previously, while output prices also slowed to 53.5, showing some of the smallest increases in four years.
As a result, the price of gold received a boost from heightened expectations of Federal Reserve interest rate cuts, driven by easing inflation worries and a weaker US dollar. This trend was further supported by market volatility and the anticipation surrounding upcoming significant economic data releases.
Geopolitical tensions and political uncertainty have strengthened gold's appeal as a safe-haven asset.
On the geopolitical front, the security agreement between Russian President Vladimir Putin and North Korean leader Kim Jong-un in Pyongyang has intensified tensions, raising concerns about potential escalation in geopolitical risks.
Moreover, French President Emmanuel Macron's declaration of snap elections has sparked fears of heightened political instability in Europe.
Therefore, the geopolitical tensions from the Russia-North Korea pact and European political uncertainty could bolster demand for gold as a safe-haven asset amid heightened global instability.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2329.705, showing a modest increase of 0.19%. The pivot point, marked at $2342.00, serves as a critical level for future price movements. Immediate resistance is identified at $2336.56, followed by $2347.82 and $2358.70.
These resistance levels suggest potential upward targets, indicating a bullish sentiment if the price breaks above the pivot point.
On the downside, immediate support is observed at $2317.83, with further support levels at $2307.61 and $2296.11. These levels are crucial in preventing a sharp decline, providing key entry points for long positions.
The Relative Strength Index (RSI) stands at 44, indicating a slightly bearish sentiment. However, the 50-day Exponential Moving Average (EMA) at $2335.58 suggests that the current price is below this average, which might act as a resistance level in the short term.
Technical indicators imply a cautious bullish outlook for gold. Traders should consider a buy position above $2326, targeting a take profit at $2342. A stop loss at $2314 is recommended to mitigate potential losses.
Conclusion: Gold's technical setup suggests a potential bullish trend above the pivot point of $2342.00.
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GBP/USD Price Analysis – June 24, 2024
EUR/USD Price Analysis – June 24, 2024
Daily Price Outlook
Despite the preliminary HICP PMI report for June pointing to a slowdown in the Eurozone economy, the EUR/USD currency pair maintained its upward trend and remained well-bid around the 1.0731 level, hitting an intraday high of 1.0736.
However, the reason for its bullish bias could be linked to the bearish US dollar, which lost ground on the growing speculation that the Federal Reserve (Fed) will start reducing interest rates in the September meeting and may deliver two rate cuts this year.
This undermined the US dollar and contributed to the gains in the EUR/USD pair.
Furthermore, the upticks in the EUR/USD pair were bolstered after the Euro delivered an upbeat performance against its peers as investors digested political uncertainty in France ahead of the first round of legislative elections scheduled for June 30.
Impact of Fed Speculation and Economic Data on the USD and EUR/USD Pair
On the US front, the broad-based US dollar lost its traction and edged lower as risk appetite improved amid speculation that the Federal Reserve (Fed) might initiate interest rate cuts starting in their September meeting, with expectations of two cuts by year-end.
Despite strong preliminary US PMI reports for June showing robust economic activity, including a 26-month high in services and a three-month high in manufacturing, the dollar's earlier gains faded.
This shift in sentiment was driven by market interpretations of the Fed's increasingly dovish stance in response to easing inflationary pressures. Investors are now pricing in a higher likelihood of multiple rate cuts in 2024, causing US Treasury bond yields to decline and supporting higher gold prices.
On the data front, the US composite PMI for June edged up slightly to 54.6, signaling a strong end to the second quarter for the economy and marking its highest level since April 2022. Input prices moderated to 56.6 from 57.2, while output prices also slowed to 53.5, indicating some of the smallest increases in four years.
These figures suggest a balanced outlook for inflation despite robust economic activity. The combination of easing price pressures and strong PMI readings underpins expectations for the Fed to adopt a more accommodative monetary policy stance, influencing market dynamics and the dollar's recent performance.
Therefore, the improved risk appetite and expectations of Fed rate cuts weakened the US dollar, supporting the EUR/USD pair's upward movement amidst strong US PMI data and easing inflation concerns.
Impact of Political Uncertainty and Economic Data on the EUR/USD Pair
On the EUR front, the Euro showed resilience in Monday's session amid political uncertainty in France ahead of the first round of legislative elections on June 30. Despite a preliminary HCOB PMI report indicating a slowdown in the Eurozone economy with weaker-than-expected Manufacturing and Services PMIs, the Euro managed to perform well against its counterparts.
This performance was bolstered by market expectations of potential rate cuts by the European Central Bank (ECB) in response to the economic slowdown. Investors' focus on political developments in France and economic indicators continues to influence the Euro's movement in the currency markets.
Despite weaker economic data and political uncertainties in France, the Euro maintained strength against other currencies, including the US dollar. This resilience suggests market expectations of ECB rate cuts are influencing the EUR/USD pair's dynamics.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.07094, showing no significant change. The pivot point is positioned at $1.06987, serving as a crucial indicator for the next potential moves. Immediate resistance levels are observed at $1.07217, $1.07356, and $1.07508.
These levels highlight potential upward targets, indicating a bullish sentiment if the price stays above the pivot point.
On the downside, immediate support is found at $1.06865, with further support at $1.06720 and $1.06553. These support levels are vital in preventing a sharp decline, offering traders key entry points for long positions.
The Relative Strength Index (RSI) stands at 52, indicating a neutral market sentiment. The 50-day Exponential Moving Average (EMA) is positioned at $1.07206, suggesting the current price is slightly below this average, which might act as a resistance level in the short term.
The technical indicators suggest a cautious bullish outlook for EUR/USD. Traders should consider a buy position above $1.06991, targeting a take profit at $1.07506. A stop loss at $1.06719 is recommended to mitigate potential losses.
Conclusion: The EUR/USD pair shows a potential bullish trend above the pivot point of $1.06987.
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EUR/USD Price Analysis – June 21, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its bearish trend and remained under pressure around the 1.0683 level, hitting an intraday low of 1.0671. The downward trend was attributed to disappointing Eurozone preliminary PMI data and German Preliminary Manufacturing PMI, indicating a loss of economic momentum. Additionally, political uncertainty in France, the Eurozone's second-largest economy, was seen as another key factor keeping the EUR/USD pair lower.
Impact of Eurozone PMI Data on EUR/USD Pair
On the EUR front, the major currency pair dropped to a six-week low around 1.0670 as the Euro weakened. This followed disappointing preliminary PMI data from the Eurozone, indicating a slowdown in economic momentum.
On the data front, the latest HCOB purchasing managers index survey revealed a downturn in the Eurozone's manufacturing sector, with the PMI dropping to 45.6 in June from 47.3 in May, falling short of expectations and hitting a six-month low. The services sector also showed deterioration, declining to 52.2 from 53.2, below the anticipated 53.5 and marking a three-month low.
Meanwhile, the overall Eurozone PMI Composite fell sharply to 50.8, well below forecasts and May's reading, indicating a slowdown in economic activity. In Germany, manufacturing contracted further to 43.4, below expectations, while services weakened to 53.5, contributing to a decline in the composite output index to 50.6, its lowest level in two months.
Therefore, the disappointing Eurozone PMI data led to a weakening Euro, pushing the EUR/USD pair to a six-week low near 1.0670. Investors reacted to signs of economic slowdown, impacting the currency's performance against the US Dollar.
Impact of US Economic Data and Fed Policy Expectations on EUR/USD Pair
On the US front, the widely traded US dollar has been showing signs of weakness and continues to be under pressure following the release of recent disappointing economic data. This has heightened expectations that the Federal Reserve will soon start to relax its policies. While Federal Reserve officials initially expressed a preference for keeping interest rates elevated, market sentiment has since shifted.
Investors now believe there is a strong possibility of an interest rate cut at the next policy meeting, but they only expect one cut to occur this year. This anticipated policy shift is a response to the weakening economic indicators and the need to stimulate economic growth.
On the economic data front, the US Department of Labor reported that new filings for unemployment benefits fell to 238,000 in the week ending June 15, slightly exceeding the anticipated 235,000. Meanwhile, the Commerce Department's Census Bureau noted a 5.2% decrease in Housing Starts for May, dropping to a seasonally adjusted annual rate of 982,000 units. Building Permits also saw a decline of 2.9% to 949,000 units during the same period.
Furthermore, the Philadelphia Fed Manufacturing Index unexpectedly declined to 1.3 in June from 4.5 in the previous month, continuing its streak of five consecutive months in positive territory despite the
Hence, the EUR/USD pair could experience upward pressure if the Federal Reserve follows through with the expected rate cuts, juxtaposed against Eurozone economic uncertainties and potential shifts in market sentiment favoring the Euro.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.07190, up 0.16% in the early European session. The pivot point at $1.07506 is a crucial level to watch for potential shifts in market sentiment. Immediate resistance is found at $1.07508, with further resistance at $1.07706 and $1.07932. These levels indicate where upward momentum might face selling pressure. On the downside, immediate support is at $1.06865, followed by $1.06720 and $1.06553, which could act as potential buy zones if the price declines.
Technical indicators reveal that the Relative Strength Index (RSI) stands at 46, suggesting the asset is in a neutral zone and not overbought or oversold. The 50-day Exponential Moving Average (EMA) is positioned at $1.07279, indicating a slight bullish trend as the current price is hovering around this average. This technical setup suggests a mixed outlook, with potential for upward movement if the price can sustain above the pivot point.
Given this outlook, traders might consider a buy entry above $1.06991, with a take profit target at the pivot point of $1.07506 and a stop loss at $1.06719. This strategy leverages the immediate support below the current price and targets a modest upward move towards the pivot point.
In summary, EUR/USD is currently showing modest gains with a key focus on the pivot point at $1.07506. The immediate resistance at $1.07508 and the support at $1.06865 will be crucial in determining the short-term direction for the pair. The RSI at 46 and the 50-day EMA at $1.07279 suggest a cautious but potentially optimistic outlook for the euro against the dollar.
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- GOLD Price Analysis – June 21, 2024
GOLD Price Analysis – June 21, 2024
Daily Price Outlook
Gold price (XAU/USD) maintained its upward trend and remained well bid above the 2,362 level, hitting an intraday high of 2,368 level. However, the reason for its upward trend can be attributed to combination of factors including a weaker US dollar. The US dollar dropped following recently released disappointing US economic data. This reinforced market expectations that the Federal Reserve will soon start its interest rate cuts program.
Apart from this, rising concerns about the US economy led to a risk-off sentiment in markets, which increased demand for gold as a safe-haven asset, further supporting its higher prices.
Impact of US Economic Trends and Fed Policy on Gold Prices
On the US front, the broad-based US dollar has been flashing red and remains under pressure due to recently released disappointing economic data. This has strengthened expectations that the Federal Reserve will soon begin easing its policies. Although Fed officials initially indicated a preference for maintaining higher interest rates, market sentiment has shifted.
Investors now believe there is a strong possibility of an interest rate cut at the next policy meeting, but they only expect one cut to occur this year. This anticipated policy shift is a response to the weakening economic indicators and the need to stimulate economic growth.
Minneapolis Fed President Neel Kashkari's remarks indicate confidence in the economy's strength but suggest a prolonged timeline of one to two years to achieve the Federal Reserve's inflation target of 2%. This suggests a cautious approach to inflation management despite overall economic health.
Richmond Fed President Tom Barkin highlighted the Fed's readiness to employ various policy tools to address economic challenges. His emphasis on adapting policies based on current economic data underscores the Fed's flexibility and responsiveness in navigating uncertainties and ensuring economic stability amidst evolving conditions.
On the economic data front, the US Department of Labor reported that new applications for unemployment benefits dropped to 238,000 in the week ending June 15, slightly surpassing the expected 235,000. Meanwhile, the Commerce Department's Census Bureau indicated a 5.2% decline in Housing Starts for May, falling to a seasonally adjusted annual rate of 982,000 units. Building Permits also decreased by 2.9% to 949,000 units during the same period.
Additionally, the Philadelphia Fed Manufacturing Index unexpectedly fell to 1.3 in June from 4.5 the previous month, marking its fifth consecutive month in positive territory despite the decrease.
Therefore, the weakening US dollar and potential Fed rate cuts amid mixed economic data could support gold prices by lowering the dollar's value and signaling economic uncertainty, bolstering safe-haven demand for precious metals.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2363.585, up 0.15% in the early European session. The pivot point at $2365.503, marked by the green line, is critical for short-term trading strategies. Immediate resistance levels are observed at $2372.585, $2378.588, and $2387.253. These levels indicate where bullish momentum might encounter selling pressure. On the downside, immediate support is at $2355.424, followed by $2347.821 and $2338.626. These support levels could act as potential buy zones if the price declines.
Technical indicators reveal that the Relative Strength Index (RSI) stands at 66, suggesting the asset is approaching overbought territory. The 50-day Exponential Moving Average (EMA) is positioned at $2332.486, indicating an underlying bullish trend as the current price is above this average. This technical setup suggests that gold has upward momentum, but caution is warranted as it nears resistance levels.
Given this outlook, traders might consider selling below the pivot point of $2365, with a take profit target at $2350 and a stop loss at $2372. This strategy is supported by the immediate resistance just above the pivot point and the overbought RSI indicating potential for a pullback.
In summary, gold's current price action is influenced by technical levels that are crucial for short-term traders. The immediate resistance at $2372.585 and the support at $2355.424 will be key in determining the next direction for gold prices.
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S&P500 (SPX) Price Analysis – June 21, 2024
Daily Price Outlook
The S&P 500 index continued its downward trend, remaining under pressure around the 5,473 level and hitting an intra-day low of 5,455. The losing streak can be attributed to economic uncertainties, including disappointing data releases. This decline reflects a cautious shift in investor sentiment after a period of record highs and optimistic market conditions.
Impact of Disappointing US Economic Data and Bearish US Dollar on S&P 500
On the US front, the release of poor US economic data revealed weaknesses in employment, housing, and manufacturing sectors. Investors responded cautiously by adjusting their portfolios, reflecting concerns about future economic performance. This cautious reaction in financial markets suggests broader implications beyond immediate market movements, influencing policy decisions and consumer confidence in the coming months.
The Federal Reserve's stance on monetary policy also came under scrutiny. Despite earlier expectations of a potential rate cut, the mixed economic data complicated the outlook. While some market participants priced in a rate reduction later in the year, the overall uncertainty weighed on investor sentiment, contributing to the day's downturn in the S&P 500.
Furthermore, the US Dollar weakened as a result of these economic concerns. A weaker dollar typically benefits multinational corporations within the S&P 500 by making their exports more competitive and boosting overseas earnings. However, in this instance, the broader market sentiment overshadowed potential currency advantages, as investors focused more on domestic economic fundamentals and their implications for future corporate profitability.
On the economic data front, the US Department of Labor reported that new applications for unemployment benefits dropped to 238,000 in the week ending June 15, slightly surpassing the expected 235,000. Meanwhile, the Commerce Department's Census Bureau indicated a 5.2% decline in Housing Starts for May, falling to a seasonally adjusted annual rate of 982,000 units. Building Permits also decreased by 2.9% to 949,000 units during the same period. Additionally, the Philadelphia Fed Manufacturing Index unexpectedly fell to 1.3 in June from 4.5 the previous month, marking its fifth consecutive month in positive territory despite the decrease.
Looking ahead, investors will closely monitor upcoming economic reports, including flash PMI prints and existing home sales data, for further insights into the health of the global economy and potential implications for future market movements. The Federal Reserve's upcoming decisions on monetary policy will also be pivotal in shaping investor sentiment and market direction in the coming months.
S&P 500 - Technical Analysis
The S&P 500 (SPX) is currently trading at $5473.16, down 0.25% in the latest session. The pivot point, marked by the green line at $5479.02, serves as a crucial threshold for market sentiment. Immediate resistance levels are observed at $5507.58, $5526.25, and $5547.12, indicating potential selling pressure points if the index attempts to rally. On the downside, immediate support is found at $5447.72, with further support at $5420.65 and $5402.45, which could act as buy zones should the index decline further.
Technical indicators show that the Relative Strength Index (RSI) is at 62, suggesting the market is nearing overbought territory, but not yet excessively so. The 50-day Exponential Moving Average (EMA) is positioned at $5391.17, reinforcing the current bullish trend as the index price remains above this average. This technical landscape suggests that while the S&P 500 maintains an overall upward momentum, the immediate drop below the pivot point hints at potential short-term weakness.
Traders might consider a sell limit order at $5478, just below the pivot point, with a take profit target at $5447 and a stop loss at $5505. This strategy is supported by the RSI indicating potential for a downward correction and the presence of immediate resistance above the pivot point.
In summary, the S&P 500 is currently exhibiting mixed signals with a slight downward bias below the pivot point. The index’s movement around the key levels of $5479.02 will be critical in determining its short-term direction. The current technical indicators suggest a cautious approach, with the potential for a corrective decline if resistance levels hold and the index fails to reclaim the pivot point.
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