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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AUD/USD Price Analysis – Nov 14, 2024
Daily Price Outlook
Despite hawkish remarks from RBA Governor Michele Bullock, the AUD/USD currency pair struggled to gain momentum, trading under pressure around the 0.6475 level and hitting an intra-day low of 0.6460.
This downward trend can be attributed to weaker-than-expected employment growth and a slight decline in the participation rate, signaling concerns about Australia's labor market and broader economic recovery.
Moreover, the US dollar’s strength, fueled by the "Trump trades" and stronger-than-anticipated October US Consumer Price Index (CPI) data, has further weighed on the AUD/USD pair.
Looking forward, traders are closely watching the US Producer Price Index (PPI) for short-term opportunities. However, the main focus will be on Fed Chair Jerome Powell’s upcoming speech, which could provide clues about the Fed’s next steps on policy.
RBA's Hawkish Stance Supports AUD, but Slower Employment Growth Puts Pressure on AUD/USD
On the AUD front, the AUD/USD pair could recover as the Reserve Bank of Australia (RBA) Governor Michele Bullock stated that current interest rates are sufficiently restrictive and will remain so until inflation trends are under control.
This suggests that the RBA is committed to maintaining its stance on inflation, which could support the AUD. She also mentioned uncertainty surrounding the actions of the US Federal Reserve and emphasized that the RBA will avoid making any hasty decisions.
Meanwhile, Australia's Prime Minister Anthony Albanese discussed trade with US President-elect Donald Trump, noting the US has a trade surplus with Australia and should "trade fairly" with its ally. He also highlighted Australia's significant investment in security.
On the data front, Australia’s unemployment rate for October was steady at 4.1%, matching expectations. The employment change in October was 15.9K, much lower than the 61.3K increase in September. The participation rate slightly dropped to 67.1% from 67.2% in September. Full-time employment rose by 9.7K, while part-time jobs increased by 6.2K.
Although employment grew, the pace was the slowest in recent months, with only a 0.1% rise compared to a 0.3% average increase over the past six months. Bjorn Jarvis, head of labour statistics, noted that unemployment is still lower than March 2020 levels, despite an increase in jobless numbers compared to last year.
Therefore, the RBA's commitment to maintaining restrictive interest rates supports the AUD, potentially providing upside for the AUD/USD pair. However, slower employment growth and a slight drop in participation may limit the AUD’s strength, keeping the pair under pressure.
US Dollar Strength Driven by Trump’s Election Win and Strong CPI Data, Weighing on AUD/USD
On the US front, the broad-based US dollar has shown strong momentum, with the US Dollar Index (DXY) hovering around 106.60, its highest level since November 2023. The recent election win of Donald Trump has raised expectations of inflationary policies, like potential tariffs, which support 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. This data has kept the USD in high demand, impacting the AUD/USD pair by adding pressure on the Australian dollar.
On the monetary policy front, Fed Chair Jerome Powell said that Trump's potential return to the White House won't affect the Fed’s near-term decisions. After a recent 25-basis-point rate cut, Powell emphasized that the Fed does not speculate on future government policies.
As a result of these factors, the US dollar remains strong, keeping the AUD/USD pair under pressure, with the Greenback maintaining its upward momentum.
AUD/USD – Technical Analysis
The Australian Dollar (AUD/USD) has been in a steady downtrend, with the recent price hovering around $0.6475. The bearish momentum intensified after the pair broke below the key support level of $0.6548, which now acts as a resistance.
The next critical support zone lies at $0.6432, and a drop below this could open the door to further losses toward $0.6392 and potentially $0.6349. The Relative Strength Index (RSI) at 35 suggests that the pair is approaching oversold territory, which could hint at a possible rebound in the short term.
Technically, the 50-day Exponential Moving Average (EMA) at $0.6700 reinforces the bearish sentiment, as prices are significantly below this average, indicating continued downward pressure.
Traders looking for potential short positions might consider selling below $0.6495, with a target around $0.6432 and a stop-loss above $0.6548. The setup points to a high probability of bearish continuation unless the pair manages to reclaim support above the $0.6548 mark.
The AUD/USD pair remains bearish with potential for further downside if it stays below $0.6495. An oversold RSI may prompt a short-term bounce, but the overall trend favors sellers.
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- GOLD Price Analysis – Nov 14, 2024
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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GBP/USD Price Analysis – Nov 13, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair extended its downward trend, despite mild declines in the US dollar. Currently, the pair is trading around the 1.2740 level, having dipped to an intraday low of 1.2729.
However, this downward pressure was driven by investor cautious sentiment ahead of the release of the US Consumer Price Index (CPI) data for October, scheduled for 13:30 GMT.
Furthermore, the disappointing UK labor market figures for the three months ending in September showed an unexpected rise in the unemployment rate to 4.3%. Meanwhile, the fresh payrolls were much lower than expected, with only 219K jobs added, compared to the 373K increase in the previous period ending in August. This was seen as another key factor that kept the GBP/USD pair down.
GBP/USD Pressure Mounts Amid Weak UK Labor Market Data and Inflation Concerns
On the data front, the United Kingdom (UK) labor market data for the three months ending in September showed that the unemployment rate rose to 4.3%, higher than expected. This caused the Pound to drop sharply.
Moreover, the number of new jobs added was lower than anticipated, with only 219K compared to 373K in the previous three-month period. Analysts at XTB suggest that the rise in unemployment could lead the market to expect a higher chance of a rate cut by the Bank of England (BoE) next month.
Although the labor market data wasn't all negative for the Pound, average earnings, which reflect wage growth and are important for consumer spending, came in higher than expected. This helped ease some of the concerns. Following the data, Bank of England Chief Economist Huw Pill raised concerns about inflation remaining high.
He noted that pay growth is still strong, which, combined with the UK’s productivity outlook, makes it difficult to meet the BoE’s inflation target. Pill's comments suggest that the central bank remains cautious about inflation, even as other parts of the economy show signs of slowing down.
Therefore, the weak UK labor market data and concerns over inflation led to a decline in the GBP, putting pressure on the GBP/USD pair. The market's expectation of a potential rate cut from the Bank of England further weighed on the Pound.
US Dollar Holds Firm Ahead of CPI Data, Pressuring GBP/USD Pair
On the US front, the broad-based US dollar is losing some momentum but continues to hold onto gains, with the US Dollar Index (DXY) at around 106.00, its highest level in over six months. Investors are focused on the upcoming release of the US Consumer Price Index (CPI) data for October, scheduled for 13:30 GMT.
Economists expect the headline inflation to rise to 2.6% from 2.4% in September, while core CPI, which excludes food and energy prices, is predicted to increase by 3.3%. Monthly, the headline CPI is expected to rise by 0.2%, and core CPI by 0.3%.
Although inflation is expected to show a slight increase, it likely won’t change the market’s view on the Federal Reserve’s (Fed) policy for December unless the numbers are significantly different from expectations. Most Fed officials are confident that inflation is moving towards their 2% target.
However, Minneapolis Fed President Neel Kashkari mentioned that if inflation rises unexpectedly before December, it could cause the Fed to reconsider its approach. The probability of the Fed reducing interest rates in December is now 62%, slightly lower than the 70% probability seen a week ago, according to the CME FedWatch tool.
Therefore, the US dollar’s steady strength, coupled with expectations for slightly higher inflation, is likely to keep pressure on the GBP/USD pair. If the CPI data aligns with expectations, it may reinforce the US dollar's dominance, limiting any potential recovery for the Pound.
GBP/USD – Technical Analysis
The GBP/USD pair is trading at $1.27385, down 0.07% on the day, indicating a slight bearish tilt as the British pound remains under pressure against the U.S. dollar.
The pivot point for GBP/USD is at $1.27823, a critical level for gauging market direction in the near term. A sustained move above this point could signal a bullish shift, though immediate resistance at $1.28321 and further resistance at $1.28694 may limit any substantial recovery.
On the downside, immediate support sits at $1.27201, followed by stronger support levels at $1.26869 and $1.26529. A breach below these levels could accelerate bearish momentum, especially if the dollar continues to strengthen.
The Relative Strength Index (RSI) currently stands at 26, indicating an oversold condition and suggesting potential for a technical rebound if support holds. However, the 50-day Exponential Moving Average (EMA) at $1.28799 is notably above the current price, reinforcing the pair’s bearish bias. Traders may interpret this distance from the 50 EMA as a sign of sustained downward pressure unless a significant recovery occurs.
With GBP/USD hovering near oversold territory, a potential buy entry above $1.27201 may provide an opportunity for a short-term rebound, targeting $1.27858. A stop-loss at $1.26811 is advisable to manage risk, given the current bearish sentiment.
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- GOLD Price Analysis – Nov 13, 2024
GOLD Price Analysis – Nov 13, 2024
Daily Price Outlook
Gold prices (XAU/USD) extended their upward momentum on Wednesday, holding steady around $2,613. This rise coincided with a dip in the US dollar, which eased from recent highs. The dollar's softness likely provided support for gold as traders adjusted their positions ahead of the upcoming US Consumer Price Index (CPI) data.
Another factor that has been boosting gold is the uncertainty surrounding President-elect Donald Trump’s potential tariffs, which, along with global economic concerns, drive demand for gold as a safe haven.
US Inflation and Policy Uncertainty Drive Gold Prices as Investors Eye CPI Data
On the US front, the broad-based US dollar lost some of its traction and edged lower as the market awaits the release of the US Consumer Price Index (CPI) data for October at 13:30 GMT. Investors are looking closely at the inflation figures to get clues about the Federal Reserve’s next moves.
However, the CPI is expected to show that overall inflation increased to 2.6% year-on-year, up from 2.4% in September. Meanwhile, Core inflation, which excludes food and energy prices, is forecast to remain steady at 3.3%.
On a monthly basis, both the headline and core inflation are expected to rise by 0.2% and 0.3%, respectively. This data will be crucial for traders, as it could impact expectations for interest rate changes by the Federal Reserve in its December meeting.
Inflation data has gained more attention recently, especially with concerns that US inflation could rise again. There is also speculation that President-elect Donald Trump may raise import tariffs by 10% and cut corporate taxes, which could affect inflation.
In the meantime, the comments from former Fed official Loretta Mester also added to the uncertainty, suggesting that there may be fewer rate cuts in 2025, partly due to potential tariff hikes. With all these factors in play, investors are closely monitoring the CPI release, as it could influence the direction of gold prices in the coming weeks.
Therefore, if US inflation rises as expected, it could signal a more cautious approach from the Federal Reserve, limiting interest rate cuts. This uncertainty may drive investors towards gold as a safe haven, supporting its price in the coming weeks.
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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EUR/USD Price Analysis – Nov 13, 2024
Daily Price Outlook
During the European session on Wednesday, the EUR/USD pair continued its downward slide for the fourth straight day, hitting a fresh low of 1.0592 for the year. This drop comes as traders remain cautious ahead of the release of the US Consumer Price Index (CPI) data for October at 13:30 GMT.
Moreover, the Euro has been struggling recently due to several challenges, including fears of a potential trade war between the Eurozone and the US, as well as the collapse of Germany’s three-party government. These issues have kept the EUR/USD on the defensive, adding pressure to the pair.
EUR/USD Under Pressure Amid Trade Tensions and Political Instability
On the EUR front, the shared currency is struggling due to several challenges, keeping the EUR/USD pair on the back foot. The Euro has been underperforming for the past week, with key issues like the potential for a trade war between the Eurozone and the US, and the collapse of Germany’s three-party government weighing on its value.
US President Donald Trump’s campaign remarks about Europe paying a "big price" for not buying enough American exports have raised concerns about a trade conflict, which could hurt the Euro further.
European Central Bank (ECB) official Olli Rehn warned that Europe needs to prepare for a possible trade war, suggesting that if tensions escalate, Europe shouldn’t be caught off guard.
Rehn also mentioned that the ECB’s Deposit Rate could drop to a neutral rate of around 2% by mid-2025, indicating a possible shift in monetary policy. These statements have added to the uncertainty surrounding the Euro’s future performance.
Furthermore, the political situation in Germany has contributed to the Euro’s weakness. Last week, Chancellor Olaf Scholz dismissed Finance Minister Christian Lindner, causing the collapse of Germany’s three-party coalition government.
This led to political instability, with a confidence vote set for December 18 and a snap election planned for February 2025. Investors are now awaiting ECB President Christine Lagarde's speech on Thursday for more clarity on interest rate decisions.
Therefore, the ongoing challenges, including potential trade tensions and political instability in Germany, have weakened the Euro, putting additional pressure on the EUR/USD pair. This uncertainty has contributed to its underperformance, making the pair vulnerable to further declines.
US Inflation Data and Fed Rate Cut Expectations Weigh on EUR/USD
On the US front, the broad-based US dollar is facing caution ahead of the release of the US Consumer Price Index (CPI) data for October, due at 13:30 GMT. The report is expected to show that annual inflation has risen to 2.6% from 2.4% in September, with core CPI, which excludes food and energy prices, increasing by 3.3%. This data will be closely watched by investors as it could affect expectations for the Federal Reserve’s (Fed) monetary policy decisions.
The CPI report will play a key role in shaping market views on whether the Fed will cut interest rates in December. The chance of a 25 basis point (bps) rate cut has dropped slightly to 62% from 70% last week, as investors are starting to think the US economy might improve.
With rising price pressures and President-elect Donald Trump's plans to raise tariffs and lower corporate taxes, inflation could increase, leading the Fed to slow down its rate cuts.
Minneapolis Federal Reserve Bank President Neel Kashkari recently warned that if inflation surprises to the upside, the Fed could reconsider its plans.
He also noted that the current monetary policy is "modestly restrictive," but expects economic growth to continue. Investors will be closely following speeches from other Fed officials on Wednesday for more clarity on future rate decisions.
Therefore, the uncertainty around US inflation data and potential Fed rate cuts has kept the EUR/USD pair under pressure. If inflation rises more than expected, it could reduce the likelihood of a rate cut, strengthening the US dollar and weakening the Euro.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.06110, down by 0.11% for the day, reflecting mild bearish sentiment as it hovers below key resistance levels. The pivot point is established at $1.06285, marking an essential level for intraday traders to watch.
If EUR/USD fails to reclaim this pivot, it could signal further downside pressure. Immediate resistance lies at $1.06568, followed by the next resistance levels at $1.06824, which may act as barriers in any attempted recovery.
On the downside, immediate support is located at $1.05952, with further support seen at $1.05711 and a more critical level at $1.05527, which could potentially limit bearish movement if selling intensifies.
The Relative Strength Index (RSI) stands at 40, signaling bearish momentum but not yet reaching oversold territory, leaving room for additional downside movement. Additionally, the 50-day Exponential Moving Average (EMA) is positioned at $1.06395, above the current trading price, reinforcing a bearish bias as the pair struggles to break through this level.
Traders may consider a potential sell entry below $1.06230, with a target of $1.05950 to capitalize on the bearish momentum. A stop-loss at $1.06458 is recommended to manage risk against unexpected upward moves.
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USD/CAD Price Analysis – Nov 12, 2024
Daily Price Outlook
During the European session on Tuesday, the USD/CAD currency pair continued its upward trend for the third day, trading near 1.3950 level. However, the US dollar strengthened further after the confirmation of Donald Trump’s victory in the US election.
Analysts believe that Trump’s potential fiscal policies, which may boost investment, spending, and labor demand, could increase inflation risks. This might prompt the Federal Reserve (Fed) to take a more hawkish approach, raising interest rates to control inflation.
As a result, the expectations of a tighter US monetary policy are likely to support the US dollar, benefiting the USD/CAD pair. With this ongoing trend, traders are keeping a close eye on potential developments that could further impact the USD and the currency pair’s movement in the near future.
Impact of Falling Crude Oil Prices on the USD/CAD Pair
On the CAD front, the Canadian Dollar (CAD) is under pressure due to falling crude oil prices. This is because Canada is the largest oil exporter to the United States, so when oil prices drop, it negatively impacts the CAD. As of now, West Texas Intermediate (WTI) oil is trading around $67.90. Lower oil prices tend to weaken the Canadian Dollar because the country relies heavily on oil exports.
Crude oil prices are continuing to decline due to concerns about a potential trade war under a Trump administration, which could lead to tariffs and disrupt global trade. Additionally, there are worries about slower demand growth in China, a major consumer of oil.
These factors have caused oil prices to fall further, putting additional downward pressure on the CAD. Traders and analysts are watching closely to see how these developments might affect oil prices and, in turn, the value of the Canadian Dollar.
The falling crude oil prices put downward pressure on the Canadian Dollar, which may weaken the CAD against the US Dollar. As a result, the USD/CAD pair could continue to rise, benefiting from a stronger USD and a weaker CAD.
Impact of US Economic Outlook and Fed Policy on the USD/CAD Pair
On the US front, the broad-based US Dollar (USD) continues to strengthen after the confirmation of Donald Trump’s victory in the US election. Analysts believe that Trump’s potential fiscal policies could boost investment, spending, and labor demand, which might increase inflation risks.
This could prompt the Federal Reserve (Fed) to adopt a more hawkish approach, raising interest rates to control inflation. As a result, the USD and the USD/CAD pair may see further support.
On Sunday, Minneapolis Fed President Neel Kashkari said the US economy is showing strength as the Fed works to lower inflation. However, he mentioned that the Fed isn’t done yet and needs more proof before considering another rate cut.
The Fed’s goal is to bring inflation down to 2%, and until that happens, they’re unlikely to lower rates further. This cautious approach helps support the strength of the US Dollar.
Therefore, the US Dollar’s strength, fueled by potential fiscal policies and the Federal Reserve's hawkish stance, supports the USD/CAD pair. As inflation risks rise, the Fed may raise interest rates, further boosting the USD and likely pushing the USD/CAD pair higher.
USD/CAD – Technical Analysis
The USD/CAD pair is trading at $1.39476, up 0.16%, and currently maintains a bullish stance above its pivot point of $1.39420. This level serves as a critical support, indicating potential for further gains.
.Immediate resistance is situated at $1.39590, with additional levels at $1.39740 and $1.39892. Breaking through these levels could reinforce the bullish outlook, particularly as the U.S. dollar finds strength amid resilient economic indicators and higher Treasury yields.
On the downside, support emerges at $1.39322, followed by $1.39174 and $1.38974. A breach below these support levels could trigger a short-term correction, undermining the bullish sentiment.
The Relative Strength Index (RSI) is currently at 65, indicating that while USD/CAD is nearing overbought conditions, there may still be room for further appreciation. However, an RSI close to overbought territory signals that buyers should proceed with some caution as momentum could slow.
The 50-day Exponential Moving Average (EMA) sits at $1.39187, lending further support to the upward trend as long as prices remain above this average.
Given these technical indicators, USD/CAD's outlook remains moderately bullish in the near term. A buy entry above $1.39419 is recommended, with a take-profit target of $1.39703 and a stop-loss at $1.39241 for effective risk management.
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GOLD Price Analysis – Nov 12, 2024
Daily Price Outlook
Gold price (XAU/USD) unable to stop its bearish trend and drew some further offers around $2,606 marks. However, the US dollar bullish bias, backed by the growing optimism around Donald Trump's expected economic policies, is weighing on gold.
Meanwhile, the higher US Treasury bond yields, fueled by expectations that Trump's tariffs and corporate tax cuts could push inflation higher, are adding further pressure on yellow metal.
On the other hand, the ongoing worries that Trump's protectionist policies could lead to a trade war and harm the global economy are giving gold some support, as it is considered a safe haven.
Traders are also likely to stay cautious and avoid making bold moves ahead of this week’s US consumer inflation data release. In addition, speeches from several key Federal Reserve officials, including Fed Chair Jerome Powell, will be closely watched for insights on the future of interest rates.
Gold Prices Struggle as US Dollar Strengthens and Inflation Risks Rise
However, the losses in gold come from the strengthening US Dollar, which has been gaining momentum after the US election results confirmed Trump’s victory.
Analysts believe that if Trump’s policies, especially those related to fiscal spending and investment, are implemented, they could raise inflation risks.
This might lead the Federal Reserve (Fed) to adopt stricter monetary policies, which would further support the US Dollar and put pressure on the yellow-metal.
Traders are eagerly awaiting US inflation data, which will be released on Wednesday. The Consumer Price Index (CPI) is expected to show a 2.6% year-over-year rise for October, while core CPI, which excludes food and energy, is projected to increase by 3.3%.
Fed officials, including Neel Kashkari, have emphasized that the US economy remains resilient, but the Fed is still focused on lowering inflation to its 2% target. Kashkari mentioned that more evidence is needed before considering another rate cut.
Morgan Stanley’s report also pointed out that Trump's key macroeconomic policies, such as tariffs, immigration, and fiscal measures, could have a significant impact.
Looking forward, traders are waiting for speeches from key Federal Reserve officials, including Chairman Jerome Powell, to get clues about interest rates. Investors are also paying attention to upcoming data, like US inflation numbers and the Producer Price Index, as these could affect the next move in gold prices.
GOLD (XAU/USD) – Technical Analysis
Gold prices are currently trading at $2,604.68, down 0.61%, as the precious metal continues to face bearish pressures amid a strong US Dollar and rising Treasury yields. The price is notably below the pivot point at $2,628, which now acts as a significant barrier to any potential upside.
Immediate resistance sits at $2,649, followed by additional resistance levels at $2,667 and $2,687. These levels could limit any short-term gains unless there is a substantial shift in market sentiment.
On the support side, immediate support is at $2,603, with additional supports positioned at $2,585 and $2,564. Breaching these levels could indicate a deepening of the bearish trend, potentially bringing gold towards even lower territories.
The Relative Strength Index (RSI) currently stands at a low 21, highlighting oversold conditions. This reading suggests a potential for a near-term bounce; however, it also reflects the degree of selling pressure present in the market.
The 50-day Exponential Moving Average (EMA) is currently positioned at $2,669, well above the current price. This alignment confirms a broader bearish trend, as the current trading price remains below both key moving averages and critical resistance levels.
Given these indicators, the outlook for gold remains bearish, with the potential for further declines unless prices break above the $2,628 pivot point. For traders, an entry price below $2,612 offers a strategic selling opportunity with a target of $2,570, while a stop loss at $2,639 provides risk management.
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- AUD/USD Price Analysis – Nov 12, 2024
AUD/USD Price Analysis – Nov 12, 2024
Daily Price Outlook
During the European trading session, the AUD/USD pair struggled to hold its ground, staying weak around the 0.6544 level and hitting an intraday low of 0.6534. However, the downward trend can be attributed to several factors including the anticipated tariff hikes on Chinese goods by US President-Elect Donald Trump pose risks to the AUD, as China is one of Australia's biggest export markets.
Meanwhile, the Westpac Consumer Confidence index in Australia rose by 5.3% to 94.6 in November, marking a two-and-a-half-year high but remaining below 100, indicating continued economic caution among consumers.
Moreover, the US Dollar gained strength as markets expect that Trump’s proposed fiscal policies may drive up investment and labor demand, potentially increasing inflation risks. This could lead the Federal Reserve to tighten its monetary policy, further supporting the US Dollar and applying additional pressure on the AUD/USD pair.
Consumer Confidence in Australia Boosted but Chinese Inflation and Limited Stimulus Weigh on AUD Outlook
On the AUD front, Australia's Westpac Consumer Confidence index rose by 5.3% to 94.6 in November, marking the highest level in two and a half years. This is the second month in a row of improvement, although the index remains below 100, meaning pessimism still outweighs optimism.
Matthew Hassan, a senior economist at Westpac, explained that families are feeling less financial pressure and are less worried about interest rate hikes, with growing confidence in the economy’s future.
Furthermore, the Australian Dollar also faced pressure from disappointing Chinese inflation data. China's Consumer Price Index (CPI) rose just 0.3% year-over-year in October, slightly below forecasts and down from September’s 0.4%, marking the lowest rate since June.
Month-over-month, the CPI fell by 0.3%, a bigger drop than expected, highlighting weaker demand. In the meantime, Bloomberg reported that Chinese regulators may soon lower taxes on home purchases, aiming to boost the real estate market.
Although, the losses in the AUD may be limited by the Reserve Bank of Australia’s hawkish tone. RBA Governor Michele Bullock recently stressed the need for tight monetary policy due to high inflation and a strong job market.
China’s latest stimulus package, a 10 trillion Yuan debt relief for local governments, was smaller than expected and lacked direct economic stimulus, further dampening optimism in Australia’s key trading partner.
Therefore, the rise in Australia's consumer confidence and the RBA's hawkish stance may provide some support for the AUD. However, weaker Chinese inflation data and limited stimulus from China could weigh on demand, likely putting downward pressure on the AUD/USD pair.
US Dollar Strengthens on Inflation Expectations and Fed's Restrictive Stance, Weighing on AUD/USD
On the US front, the US dollar is strengthening after Donald Trump’s election victory. Analysts believe that if his policies on spending, investment, and labor are put into action, they could increase inflation. This might lead the Federal Reserve (Fed) to raise interest rates, which would boost the US dollar even more.
Minneapolis Fed President Neel Kashkari said the economy is doing well but the Fed still needs to do more to bring inflation back to the 2% target. He added that the Fed needs more evidence before thinking about another rate cut.
Morgan Stanley analysts break down Trump’s potential economic plans into three areas: tariffs, immigration, and fiscal measures. They think tariffs will be a top priority, with a possible 10% tariff on all goods and a 60% tariff on Chinese goods.
While Trump’s return could lead to policy changes, Fed Chair Jerome Powell said the Fed doesn't make decisions based on possible policies. Powell emphasized that the Fed will focus on current data after cutting interest rates by 0.25%, bringing them to a range of 4.50%-4.75%.
Traders are now watching for the upcoming US Consumer Price Index (CPI) data. October’s headline CPI is expected to rise by 2.6% year-over-year, with core CPI projected at 3.3%, offering further insights into inflation trends.
Therefore, the strengthening US Dollar, driven by expectations of higher inflation and tighter Fed policies, puts pressure on the AUD/USD pair. If US inflation data aligns with forecasts, the Fed may continue its restrictive stance, further strengthening the US Dollar against the AUD.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.65554, down 0.28%, as it faces resistance near the pivot point of $0.65607. This level now serves as a critical marker for directional movement.
Immediate resistance sits just above at $0.65820, with additional barriers at $0.65981 and $0.66197. These levels could curtail short-term upside moves, especially as the pair remains under pressure from a strong US dollar and cautious sentiment around global growth.
On the downside, immediate support lies at $0.65369. Should the price break below this level, it may test the next support at $0.65166, with a further move toward $0.64962 if bearish momentum intensifies.
The Relative Strength Index (RSI) is currently at 30, indicating oversold conditions that could prompt a corrective bounce. However, a continued stay in the oversold region might also reflect persistent selling pressure, leaving the bearish outlook intact.
The 50-day Exponential Moving Average (EMA) is at $0.65879, slightly above the current price. This gap underscores the bearish trend, as the current price remains below both the pivot and key moving averages.
Given these signals, the short-term outlook for AUD/USD remains bearish, with potential for further declines if it stays below the $0.65607 pivot. Traders may consider entering a sell position below $0.65607, with a take-profit target of $0.65344 and a stop-loss at $0.65792 to manage risk.
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- GOLD Price Analysis – Nov 12, 2024
GOLD Price Analysis – Nov 11, 2024
Daily Price Outlook
Gold prices (XAU/USD) started the new week with bearish bias and edged lower around below $2,670 level. However, the reason for its downward rally can be associated with the strong US dollar, which has been rising and is near a four-month high. This strength comes from growing optimism about President-elect Donald Trump’s plans, especially his promise to reduce corporate taxes.
As investors become more confident, the market sentiment has improved, leading to a stronger dollar. This shift has put downward pressure on gold prices. The stronger dollar makes gold more expensive for foreign buyers, reducing demand and contributing to the decline in gold's value.
Looking forward, traders will keep their eyes on key events this week, including the release of US inflation data, the Producer Price Index, and Retail Sales figures. They’ll also watch for comments from Fed officials, especially Jerome Powell, for clues on rate cuts, which could impact the USD and commodity prices.
Impact of US Dollar Strength and Trump’s Economic Plans on Gold Prices
Despite expectations that the Federal Reserve might cut interest rates further, the US dollar is staying strong, near a four-month high. This strength is mainly driven by President-elect Trump’s promise to lower corporate taxes, which has boosted market confidence. As a result, investors are pulling away from safe-haven assets like gold.
While Trump's policies are expected to support economic growth and inflation, keeping US Treasury bond yields high, the possibility of rate cuts from the Fed could offer some support for gold. This creates a mixed outlook for gold, with both positive and negative factors influencing its price.
On the US economic front, the Federal Reserve recently cut its key interest rate by 25 basis points and hinted that more cuts might come. However, Fed officials, like Minneapolis Fed President Neel Kashkari, have said they want more proof that inflation is on track to hit the 2% target before cutting rates further.
As a result, the yellow-metal experienced its biggest weekly drop in over five months as the US dollar strengthened and Treasury bond yields rose after Trump’s election victory.
However, the optimism surrounding Trump’s economic plans, known as the 'Trump trade,' continues to boost the dollar and pressure gold prices. Trump’s protectionist policies could also raise global trade tensions, possibly pushing investors back to gold as a safe-haven asset.
Thus, the strength of the US dollar and rising Treasury yields, fueled by Trump’s economic plans, have pressured gold prices, leading to its biggest weekly drop in five months. Although, the possible global trade tensions could drive investors back to gold as a safe-haven asset.
GOLD (XAU/USD) – Technical Analysis
Gold prices continue to face pressure, currently trading at $2,671.65, down 0.48% for the day. The metal is struggling to break through resistance levels as bearish sentiment prevails. The immediate pivot point lies at $2,682.99, providing a critical reference for short-term movement.
Gold’s immediate resistance stands at $2,697.76, followed by $2,710.07, with further resistance at $2,725.76. A failure to breach these levels would reinforce the selling momentum, potentially pushing prices toward the immediate support level of $2,666.69. Below this, additional support is seen at $2,654.69 and $2,643.30.
Technical indicators suggest a weak outlook for gold. The Relative Strength Index (RSI) is currently at 36, indicating that gold is approaching oversold territory, yet there’s limited buying interest at this stage. The 50-day Exponential Moving Average (EMA) at $2,683.79 acts as a resistance barrier. As long as gold remains below this moving average, the bearish bias remains intact.
In light of these technical factors, a potential short entry is recommended below $2,707, with a target of $2,673 for take-profit and a stop-loss set at $2,726 to manage risk. Traders should monitor the pivot point closely, as any sustained move above $2,683.79 could alter the bearish outlook, albeit temporarily.
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