USD/JPY Price Analysis – Feb 15, 2024
Daily Price Outlook
The USD/JPY currency pair extended its downward trend and remained well offered around below 150.00 level. However, the bearish bias can be attributed to the stronger Japanese Yen, which is gaining momentum even though investors were hoping the Bank of Japan (BoJ) wouldn't stop its plan to boost the economy anytime soon.
Furthermore, the US dollar's bearish bias, driven by the risk-on market sentiment and subdued US Treasury yields, was seen as another key factor that kept the USD/JPY pair lower.
Impact of Market Sentiment and Fed Expectations on USD/JPY Pair
The broad-based US dollar, measured by the US Dollar Index, has lost its momentum and dropped to 104.60 after hitting a three-month high of 105.00. However, this decline can be tied to risk-on market sentiment, with S&P500 futures showing decent gains, suggesting renewed investor confidence in the market, which tends to undermine safe-haven assets like the US dollar.
However, the overall market outlook remains uncertain as investors scale back expectations of Federal Reserve (Fed) rate cuts in May, with the focus shifting to potential cuts in June.
Looking ahead, investors are awaiting the US Retail Sales data release, which is expected to show a slight contraction according to consensus estimates. Therefore, the news may lead to a weaker USD/JPY pair as the dollar retreats and investors reassess Fed rate cut expectations.
Impact of Japanese Economic Recession on USD/JPY Pair
Another factor that has been affecting the USD/JPY pair is the strengthening of the Japanese Yen, despite investors' hopes that the Bank of Japan (BoJ) would continue its supportive policies. These hopes have faded due to Japan's unexpected entry into a technical recession, with Q4 GDP shrinking by 0.1% instead of the expected 0.3% growth.
This economic downturn has reduced expectations of the BoJ unwinding its stimulus measures anytime soon, contributing to the Yen's strength against the US Dollar. As a result, the USD/JPY pair will likely face downward pressure amid the uncertain economic conditions in Japan.
USD/JPY - Technical Analysis
The USD/JPY currency pair has experienced a modest retreat, with the current price standing at 150.221, marking a decrease of 0.25% over the past 24 hours. This movement indicates a slight cooling off from recent trading activity, as traders reassess their positions in the context of broader market dynamics and geopolitical influences.
The technical landscape reveals a pivot point at 148.83, which provides a baseline for the currency pair's short-term trajectory. Resistance levels are established at 150.05, 150.77, and 152.02, outlining potential hurdles for bullish momentum. On the flip side, support levels at 148.10, 146.88, and 146.16 delineate areas where buying interest might solidify, preventing further declines.
The Relative Strength Index (RSI) stands at 58, hovering close to the threshold of overbought territory but still within a range that suggests moderate buying pressure. The Moving Average Convergence Divergence (MACD) presents a more nuanced picture with a value of -0.045 and a signal line at 0.408.
The current positioning of the MACD indicates a slight bearish momentum, potentially hinting at a cautious approach among traders. The 50-day Exponential Moving Average (EMA) at 150.35 marginally surpasses the current price, suggesting a critical juncture for the currency pair’s short-term direction.
Given the current technical setup, the USD/JPY pair presents a cautiously optimistic scenario for bullish traders. The advised trading strategy involves setting a buy limit at 150, with a take profit target at 151.250, and a stop loss at 149.355.
Related News
- USD/JPY Price Analysis – Jan 25, 2024
EUR/USD Price Analysis – Feb 14, 2024
Daily Price Outlook
The EUR/USD currency pair managed to recover its losses and gained some positive traction despite the bullish US dollar, which was backed by the release of strong US CPI data. However, the upticks in the EUR/USD pair appeared after the release of better-than-expected Economic Sentiment data from both the Eurozone and Germany on Tuesday.
This has lend some support to the shared currency to recover its gains. In contrast to this, the Eurozone's GDP data for the fourth quarter met market expectations, which weakened the Euro and stopped the EUR/USD pair from rising further.
Impact of Eurozone Economic Data and ECB Comments on the EUR/USD Pair
It's worth noting that the shared currency received some support after the release of upbeat Economic Sentiment data from the Eurozone and Germany on Tuesday. ECB Vice President Luis de Guindos highlighted persistent wage pressures despite some signs of improvement. Meanwhile, the preliminary Eurozone GDP maintained a stable growth rate of 0.1% year-over-year in Q4, meeting expectations. Quarter-over-quarter, Eurozone GDP showed no change at 0.0%, consistent with the previous quarter.
On the negative side, the seasonally adjusted Eurozone Gross Domestic Product (GDP) data aligned with market expectations for the fourth quarter, putting downward pressure on the Euro and subsequently impacting the EUR/USD pair. This is because it indicates that the economy is performing as anticipated, without any significant surprises.
Investors are keeping their eyes on the release of preliminary Gross Domestic Product (GDP) data. Besides this, all ears are on a speech by Christine Lagarde, the ECB President, scheduled for Thursday.
Impact of Higher US Inflation on the USD and EUR/USD Pair
The broad-based US dollar received a boost from higher-than-expected inflation, favoring no interest rate cut by the Federal Reserve in March. This strengthened the US dollar against the EUR. This can be witnessed by the performance of DXY, which reaching 104.90 despite lower US Treasury yields. At the data front, the US headline Consumer Price Index (CPI) rose by 3.1%, exceeding expectations of 2.9% but below the previous rate of 3.4%.
US inflation increased by 0.3% MoM, against the expected 0.2%. US Core CPI (YoY) remained steady at 3.9%, defying market expectations of a decline to 3.7% in January. US Core Inflation (MoM) rose by 0.4%, surpassing the expected unchanged reading of 0.3% in January. The 2-year and 10-year US Treasury yields stood at 4.60% and 4.29% respectively.
Therefore, the news of higher US inflation and lowered probability of a Fed rate hike strengthened USD, leading to a decline in EUR/USD pair.
EUR/USD - Technical Analysis
On February 14, the EUR/USD pair steadied, marking an unchanged position at 1.07082, signifying a moment of equilibrium in the forex markets amidst varying economic signals from both sides of the Atlantic.
Currently, the pair finds itself just above the pivot point at 1.07005, indicating a slight bullish inclination. Immediate resistance levels are identified at 1.07221, followed by 1.07369 and 1.07586, which the pair needs to surpass to confirm a stronger upward momentum. On the downside, support levels are established at 1.06730, 1.06503, and further down at 1.06257, providing potential floors to cushion any downward movements.
The Relative Strength Index (RSI) stands at 37, pointing towards a leaning but not fully entered into the oversold territory. This, coupled with the 50-day Exponential Moving Average (EMA) positioned at 1.07628, slightly above the current price, suggests a cautious market sentiment with a lean towards potential upside.
Given these technical insights, a strategic approach would be to set a buy limit at 1.07001, aiming for a take profit at 1.07486, while placing a stop loss at 1.06719. This trading strategy capitalizes on the EUR/USD's current stability and anticipates a modest rebound towards the identified resistance levels.
Related News
- GOLD Price Analysis – Feb 14, 2024
GOLD Price Analysis – Feb 14, 2024
Daily Price Outlook
Despite the risk-off market sentiment, the Gold price (XAU/USD) failed to stop its bearish bias and hit a fresh two-month low below the $2,000 level. However, the reason for its downward trend can be attributed to bets that the Fed will keep rates higher for longer. These expectations were reaffirmed by the stronger-than-expected US CPI released on Tuesday. This hawkish stance tends to undermine gold prices. In contrast to this, the risk-off market sentiment, driven by geopolitical tensions continuing in the Middle East and Eastern Europe, was seen as a key factor that helped gold price to limit its deeper losses.
US Inflation Data Dampens Gold Price Amidst Fed's Hawkish Stance
Despite the upbeat US economic data and hawkish stance from the Federal Reserve, the broad-based US dollar failed to gain support and dropped slightly amid a modest downtick in US Treasury bond yields. The US inflation data released on Tuesday suggests that the Federal Reserve might not raise interest rates soon. This news is making gold less attractive to investors. Meanwhile, the Bureau of Labor Statistics reported that the headline US Consumer Price Index (CPI) rose by 0.3% in January and softened to a 3.1% year-over-year rate from 3.4% in December, beating expectations. This, coupled with the Core CPI surpassing consensus estimates, suggests the Fed may not rush to cut rates.
Therefore, the lowered expectations of an early interest rate hike by the Federal Reserve due to US inflation data have undermined gold prices.
Geopolitical Tensions Support Gold; Traders Eye Fed Speeches and Economic Data
On the flip side, the losses in the gold price could be short-lived as geopolitical tensions continue in the Middle East. Yemen's Houthis have escalated attacks in the Red Sea, targeting vessels with ties to the US, Britain, and Israel. Israel's actions in Gaza have led to casualties among Palestinian people, hindering truce negotiations. This instability tends to support safe-haven assets like gold.
Looking ahead, traders will focus on speeches by Fed officials Goolsbee and Barr on Wednesday. They'll also keep an eye on US January Retail Sales on Thursday and the Producer Price Index (PPI) on Friday, expecting a 0.1% MoM and 0.6% YoY rise in January.
GOLD (XAU/USD) - Technical Analysis
On February 14, Gold (XAU/USD) presented a static performance, maintaining its position at $1992.855, illustrating a market in equilibrium without any significant change. This stability occurs amidst a complex backdrop of global economic uncertainty and fluctuating interest rates, impacting investor sentiment towards safe-haven assets.
Gold's current stance, slightly below the pivot point of $2004.468, suggests a critical juncture for future movements. Resistance levels are delineated at $2020.041, extending through $2031.460 to $2044.437, marking potential hurdles for bullish momentum. Conversely, immediate support forms at $1988.896, with subsequent levels at $1976.179 and $1966.166, providing a cushion against downward pressures.
The Relative Strength Index (RSI) indicates a level of 24, suggesting that Gold might be in an oversold territory, which could precede a potential upward correction. Meanwhile, the 50-day Exponential Moving Average (EMA) at $2027.198 reinforces the significance of the $2004.468 pivot point, acting as a determinant for the asset's short-term trend.
Given these observations, a cautious approach is advised. Traders might consider a buy limit at $1989, targeting a take profit at $2011, while a stop loss at $1972 could safeguard against unforeseen declines. This strategy hinges on Gold's ability to rebound from its support levels, aiming for recovery towards its immediate resistance.
Related News
- GBP/USD Price Analysis – Feb 14, 2024
GBP/USD Price Analysis – Feb 14, 2024
Daily Price Outlook
The GBP/USD currency pair was unable to stop its bearish bias and remained well-offered around the 1.2547 level. However, the reason for its downward trend can be attributed to the downbeat UK CPI data, which has strengthen BoE’s rate-cut bets and undermined the Pound Sterling, contributing to the GBP/USD pair's losses. On the other side, the increasing bets that the Federal Reserve (Fed) will keep rates higher for longer, bolstered by the stronger-than-expected US consumer inflation data on Tuesday, was seen as another key factor underpinning the GBP/USD pair by pressuring the US Dollar.
Bearish Outlook for GBP/USD Pair amid Soft UK Inflation Data and Rate Cut Expectations
As mentioned above, the GBP/USD pair has been facing a bearish bias as the United Kingdom reported softer-than-anticipated inflation data for January, with the annual headline and core Consumer Price Index (CPI) rising by 4.0% and 5.1%, respectively, but the monthly figure deflating by 0.6%. This unexpected softness in inflation, along with moderate growth in Average Earnings, is expected to force Bank of England (BoE) policymakers to consider early rate cuts.. Consequently, the Pound Sterling faces selling pressure, with the GBP/USD pair likely to remain on a negative trajectory amid softening consumer price inflation and dismal market sentiment.
The softer-than-anticipated inflation data and potential early rate cuts by the Bank of England are likely to exert selling pressure on the GBP/USD pair, keeping it on a negative trajectory.
Impact of Bullish US Dollar and Fed Rate Expectations on GBP/USD Pair
Another factor weighing on the GBP/USD pair is the bullish US dollar, supported by expectations that the Federal Reserve (Fed) will maintain higher rates for longer, driven by hotter-than-expected US consumer inflation data. According to the Bureau of Labor Statistics, the headline US Consumer Price Index (CPI) increased by 0.3% in January, softening to a year-over-year rate of 3.1% from December's 3.4%, surpassing expectations. Additionally, the Core CPI also exceeded consensus estimates. These factors combined suggest that the Fed might not feel pressured to implement rate cuts hastily.
Therefore, the bullish US dollar, backed by expectations of prolonged higher rates due to strong US consumer inflation data, further weighs on the GBP/USD pair, likely extending its negative trajectory.
GBP/USD - Technical Analysis
On February 14, the GBP/USD pair witnessed a modest uptick, registering a 0.09% increase to trade at 1.26046. This movement reflects a cautious optimism in the market, possibly driven by recent economic developments and policy announcements from both the Bank of England and the Federal Reserve.
The pair currently trades slightly above its pivot point at 1.25908, suggesting a tentative bullish sentiment among traders. Immediate resistance levels are identified at 1.26405, 1.26842, and 1.27301, which the GBP/USD must breach to sustain an upward trajectory. Conversely, support is closely found at 1.26015, with further safety nets at 1.25588 and 1.25209, underscoring the pair's narrow trading range.
The Relative Strength Index (RSI) stands at 46, indicating a neutral market momentum without clear signs of overbought or oversold conditions. Additionally, the 50-day Exponential Moving Average (EMA) at 1.26131 slightly surpasses the current price, providing a subtle hint towards potential resistance.
Considering the GBP/USD's proximity to critical technical levels, a cautious trading approach is advisable. A sell strategy below the pivot point at 1.25913, aiming for a take profit at 1.25469 and a stop loss at 1.26179, could capitalize on potential downward adjustments. This strategy leverages the pair's current positioning and anticipated resistance challenges, aiming for a tactical short-term gain.
Related News
- GOLD Price Analysis – Feb 14, 2024
USD/CAD Price Analysis – Feb 13, 2024
Daily Price Outlook
During the European session on Tuesday, the USDCAD currency pair maintained its upward rally and remained well-bid around 1.3460. However, the reason for this upward trend can be attributed to the bullish US dollar. The broad-based US dollar has been gaining traction amid a combination of factors. First of all, the upbeat data from the US economy has boosted the US dollar. Meanwhile, the hawkish remarks by the Federal Reserve were seen as another key factor that kept the US dollar higher. Furthermore, the risk-off mood in the market has played a major role in underpinning the safe-haven US dollar.
In contrast to this, the upbeat WTI price, backed by heightened geopolitical tensions in the Middle East, was seen as a key factor that underpinned the Canadian Dollar, which may cap some gains in the USDCAD pair.
Fed's Cautious Stance and Potential Impact on USD/CAD Pair
Market expectations suggest a potential moderation in the US Consumer Price Index (CPI), with a YoY increase of 2.9%, down from the previous 3.4%. Monthly rates are forecasted to remain stable. Some Federal Reserve officials, like Governor Kugler and Dallas Fed President Logan, lean towards maintaining high interest rates despite signs of slowing inflation. Minneapolis Fed President Kashkari advises caution, suggesting rate cuts only if inflation trends clarify. The US Dollar Index (DXY) shows upward momentum, but subdued US Treasury yields may restrain further gains. At press time, the DXY trades around 104.20.
Therefore, the expectations of moderation in US CPI and Fed officials leaning towards high rates may support the USDCAD pair. However, subdued US Treasury yields could limit USD strength against the CAD.
Geopolitical Developments and Economic Data Impact on WTI Oil and USD/CAD Pair
On the other hand, the Canadian Dollar will likely gain support from rising crude oil prices as Canada is a major oil exporter to the US. However, the geopolitical tensions in the Middle East, particularly with Yemen's Houthi rebels launching missiles at an Iranian-bound ship, push West Texas Intermediate (WTI) oil prices up to $77.00 per barrel. Hence, the rising crude oil prices due to Middle East tensions may strengthen the Canadian Dollar against the USD, supported by Canada's oil export prominence and geopolitical factors.
USD/CAD - Technical Analysis
The USD/CAD pair exhibits marginal growth, ticking up by 0.04% to stand at 1.34562, showcasing a relatively stable performance in the forex market. As investors navigate through the nuanced landscape of currency trading, the pair's movements around the pivot point of 1.34620 are closely watched for potential shifts in momentum. Resistance levels are staged at 1.34939, 1.35139, and 1.35428, marking the barriers for upward movements. Conversely, support levels at 1.34296, 1.33991, and 1.33682 serve as key points where the pair might find a floor in case of a downturn.
Technical analysis reveals a balanced market sentiment with the Relative Strength Index (RSI) positioned at 48, indicating neither overbought nor oversold conditions. The 50-day Exponential Moving Average (EMA) at 1.34615 closely mirrors the current trading price, underscoring the currency pair's equilibrium.
Given these observations, the technical outlook for USD/CAD leans towards a cautious stance with a recommended sell limit at 1.34610. This strategic positioning aims for a take profit at 1.34133, safeguarded by a stop loss at 1.34881, to capitalize on anticipated movements while managing risk effectively. Traders and investors alike are advised to keep a vigilant eye on these key technical levels and indicators to navigate the forex market's ever-evolving dynamics.
Related News
- GOLD Price Analysis – Feb 13, 2024
AUD/USD Price Analysis – Feb 13, 2024
Daily Price Outlook
Despite improved Australian Consumer Confidence data, the AUD/USD currency pair failed to stop its downward trend and remained well offered around the 0.6521 level. However, the downward trend was mainly driven by the renewed strength of the US dollar, which recently gained traction on upbeat US economic data and hawkish remarks by several Federal Reserve (Fed) officials. On the other hand, the inflation in Australia is slowing down, suggesting the Reserve Bank of Australia might stop raising interest rates. This is pushing the AUD/USD pair lower. In the meantime, the losses in the AUD/USD pair were further bolstered by the weaker Australian money market.
On the positive side, the release of improved Australian Consumer Confidence data was seen as a key factor that kept the lid on any additional losses in the AUD/USD pair. According to the Westpac-Melbourne Institute Consumer Sentiment index, consumer confidence jumped by 6.2% to 86 in February from 81 in January, its highest level in 20 months, but still below the neutral mark of 100 since February 2022.
Impact of Federal Reserve Caution on Interest Rates on AUD/USD Pair
It is worth noting that some Federal Reserve officials are leaning towards maintaining high interest rates for a longer period. Governor Adriana Kugler and Dallas Fed President Lorie K. Logan are hesitant to lower rates despite signs of slowing inflation. Minneapolis Fed President Kashkari also advises being careful, suggesting the possibility of two to three rate cuts in 2024 only if inflation trends are clearer. Boston Fed President Collins recognizes it is tough to reach the 2% inflation goal but needs more proof before thinking about lowering rates. Overall, the Fed is waiting for more inflation data to ensure a steady 2% inflation rate.
So, because some Fed officials are cautious about lowering interest rates, it will make the US dollar stronger compared to the AUD. This could affect the AUD/USD pair by potentially making the dollar more attractive due to expected higher interest rates in the US.
Downward Pressure on AUD/USD Amid Slowing Inflation and Potential Interest Rate Cuts
At home, the Australian Dollar is under pressure as inflation slows down, hinting that the Reserve Bank of Australia may be done raising interest rates. This is making the Australian Dollar weaker against the US Dollar. National Australia Bank's Business Confidence improved slightly, but Business Conditions dropped down. However, the Commonwealth Bank of Australia predicts interest rate cuts starting in September. Meanwhile, in China, consumer prices fell more than expected. All these factors are contributing to the Aussie Dollar's decline. Therefore, this suggests downward pressure on AUD/USD due to slowing inflation, potential interest rate cuts, and weaker business conditions.
AUD/USD - Technical Analysis
The Australian Dollar (AUD/USD) registers a slight decline of 0.17%, trading at 0.65190 as market participants adopt a cautious stance ahead of significant economic releases. On a four-hour chart, the currency pair confronts a pivotal point at 0.65343, indicating potential shifts in market dynamics. Resistance levels are identified at 0.65587, 0.65890, and 0.66245, delineating the thresholds for bullish momentum. Conversely, support is established at 0.65005, with additional levels at 0.64809 and 0.64529, suggesting areas where the currency may find footing in case of downward pressure.
Technical indicators, including a Relative Strength Index (RSI) of 48, depict a market in balance, neither overbought nor oversold. The 50-day Exponential Moving Average (EMA) closely aligns with the current price at 0.65160, further emphasizing the currency pair's equilibrium state.
Considering these factors, the outlook for AUD/USD remains cautiously bearish. A proposed sell limit at 0.65339 aims to capitalize on potential declines, with a target profit set at 0.65005 and a stop loss at 0.65501 to mitigate risks. This strategy reflects the nuanced trading environment, where investors are advised to monitor resistance and support closely, gauging the AUD/USD's direction amid evolving market sentiments.
Related News
- GOLD Price Analysis – Feb 13, 2024
GOLD Price Analysis – Feb 13, 2024
Daily Price Outlook
Despite the bullish US dollar, Gold prices (XAU/USD) managed to top their downward bias and turned bullish above the $2,029 level. However, this increase was fueled by escalating Middle East tensions, which boosted the appeal of safe-haven assets, including gold. In the meantime, the US Dollar is gaining strength thanks to the Federal Reserve's hawkish stance on interest rates and upbeat US economic data. This strong US dollar was seen as a key factor limiting additional gains in gold prices. Moving on, investors are waiting for the release of the United States Consumer Price Index (CPI) data for January. This upcoming data keeps investors hesitant to take any strong position.
Powell's Rate Cut Signals and Economic Indicators Impacting Gold Prices
On the US front, anticipation of inflation, meaning expectations for the prices of goods and services to rise, has reduced expectations of a March rate cut by the Fed, dampening Gold's appeal. Markets now only give a 14% chance of a rate cut in March but estimate a 60% chance for May. Dallas Fed President Logan sees no urgency for rate cuts, noting progress in controlling inflation but seeks more evidence for sustainability.
Hence, the anticipation of reduced rate-cut expectations by the Fed lifts the US dollar but lowers Gold prices due to lower inflation concerns. On the data front, US annual headline inflation is expected to slow to 2.9% from 3.4%, with core inflation decreasing to 3.7% from 3.9%. Monthly CPI forecasts project 0.2% for headline and 0.3% for core. Hence the expected decrease in inflation is negative for gold due to reduced inflation hedging demand.
Geopolitical Rumors and Economic Concerns Shape Gold Prices
The price of gold faced downward pressure initially but rebounded briefly as escalating geopolitical tensions in the Middle East lent some support to the safe-haven gold. It is worth mentioning that Yemen’s Houthi rebels reportedly launched missiles at a ship bound for a port in Iran. Meanwhile. Israel conducted a series of airstrikes in the southern Gaza city of Rafah on Monday. Israeli Prime Minister Benjamin Netanyahu expressed his intention to escalate military operations in Rafah after rejecting a ceasefire proposal from Hamas. This can dampen further risk sentiment in the market and boost the gold price.
GOLD (XAU/USD) - Technical Analysis
The precious metal, gold, edges modestly higher, with its price at $2,021.495, marking a slight increase of 0.07%. In the four-hour chart, gold faces a crucial pivot point at $2,025.842, indicating a delicate balance between bullish and bearish forces in the market. Resistance levels loom at $2,037.942, $2,052.311, and $2,065.339, challenging gold to sustain its gains. Conversely, support levels are established at $2,012.170, $2,002.839, and $1,993.332, providing potential floors should the metal retreat.
Technical indicators offer mixed signals; the Relative Strength Index (RSI) stands at 45, suggesting a neutral market sentiment. The 50-day Exponential Moving Average (EMA) at $2,028.366 acts as a near-term resistance, hinting at a tussle between current prices and moving average levels.
Given these observations, the technical outlook for gold appears cautiously bearish, with a recommended sell limit at $2,026. Traders might consider setting a take profit at $2,006 and a stop loss at $2,036 to manage risk. This setup reflects the market's current uncertainty, with investors closely monitoring resistance and support levels for directional cues.
Related News
- AUD/USD Price Analysis – Feb 13, 2024
GOLD Price Analysis – Feb 12, 2024
Daily Price Outlook
Despite the bearish US dollar, the Gold price (XAU/USD) has been losing its momentum and flashing red around the $2,020 level. However, the risk-on-market sentiment, backed by the hawkish Fed expectations and upbeat economic data, was seen as a major cause behind gold's latest decline.
In contrast to this, the broad-based US dollar is dropping despite the upbeat US data, which may help the gold price to trim its losses as the bearish US dollar typically boosts the price of gold. Moving ahead, traders seem hesitant to place any strong positions ahead of the latest US consumer inflation figures on Tuesday.
Federal Reserve's Hawkish Stance and Gold Price Pressure
It's worth noting that the Federal Reserve plans to keep interest rates high because the US economy is strong. This could dampen gold prices, as investors expect fewer rate cuts. Fed members like Lorie Logan and Raphael Bostic agree, wanting to see more evidence of lasting inflation progress before considering rate cuts. This stance is causing investors to reconsider expectations for lower rates. However, the uncertainty surrounding the Federal Reserve interest rate keeps the US dollar on the defensive track.
Therefore, this news suggests a potentially longer period of higher interest rates, dampening gold's appeal, possibly leading to downward pressure on its price.
Israeli Airstrikes in Rafah and Gold's Safe-Haven Appeal
Israeli airstrikes in Rafah killed at least 67 people, as reported by local health officials. The strikes targeted houses and mosques as part of a mission to rescue two Israeli hostages held by Hamas militants. Prime Minister Benjamin Netanyahu praised the mission, promising to bring back all hostages. Many Palestinians have been forced to leave their homes due to ongoing evacuations, raising concerns for their safety.
Meanwhile, the doctors have called for the airstrikes to stop, noting the lack of safe places in Gaza. President Biden urged Israel to ensure civilian safety. Netanyahu promised safe passage for Palestinians, but where they will go remains uncertain. He also reiterated plans to attack Hamas in Rafah, emphasizing the importance of winning.
Therefore, the Israeli airstrikes in Rafah and the ongoing conflict raise concerns, potentially boosting safe-haven assets like gold due to increased uncertainty and geopolitical tensions.
GOLD (XAU/USD) - Technical Analysis
Gold's luster dimmed slightly in the latest session, closing at $2023.325, a fractional decrease of 0.05%. This subtle movement belies the potential volatility underlying the precious metal's market. The established pivot point at $2011 could signal a shift in direction, with immediate resistance observed at $2028. Further hurdles lie ahead at $2042 and $2058, which could resist upward price excursions.
Conversely, support levels stand firm at $1998, followed by $1982 and $1965, safeguarding against deeper retracements. The Relative Strength Index (RSI) at 41 indicates that gold is neither overbought nor oversold, hovering in a moderate trading zone.
The MACD presents a more complex picture; the value at -0.956 and the signal at -2.441 suggest that the downtrend is losing momentum, possibly forecasting a change in sentiment.
Supporting this potential uptrend is the 50-Day EMA at $2027, which currently exceeds the price, signifying that a rise above this average could confirm a bullish trend. An upward trendline has been identified as providing support near the $2024 level, indicating sustained buying interest.
In conclusion, traders might consider a bullish stance with an entry point above $2020, targeting a take profit level at $2038, while setting a stop loss at $2007 to mitigate risks.
Related News
- EUR/USD Price Analysis – Feb 12, 2024
GBP/USD Price Analysis – Feb 12, 2024
Daily Price Outlook
Despite the bearish US dollar, the GBP/USD currency pair failed to maintain its upward trend and turned bearish around the 1.2610 level. However, the reason for its downward trend can be attributed to the bets that the BoE will start cutting rates in the next few months. This undermined the British Pound (GBP) and contributed to the GBP/USD pair's losses. In contrast to this, the broad-based US dollar bearish bias, driven by the risk-on sentiment, may help the GBP/USD pair to trim its losses.
Impact of Fed Rate Cut Expectations on GBP/USD Pair
The broad-based US dollar failed to maintain its upward trend and is struggling to gain momentum due to uncertainty surrounding the Federal Reserve's rate-cut plans. Meanwhile, the risk-on market sentiment is also weighing on the safe-haven dollar, offering some support to the GBP/USD pair.
Market expectations for early rate cuts by the Fed in 2024 are declining, thanks to a resilient US economy and hawkish remarks from FOMC officials. Dallas Fed Bank President Lorie Logan emphasized the need for further evidence on inflation before considering rate cuts. Similarly, Atlanta Fed President Raphael Bostic highlighted persistent high inflation and the US's progress towards pre-pandemic economic levels.
Consequently, the news suggests limited upside for the GBP/USD pair as the dollar struggles amid reduced expectations for Fed rate cuts.
Impact of Potential BoE Rate Cuts on GBP/USD Pair
Another factor undermining the GBP/USD pair is the growing belief that the Bank of England (BoE) might soon lower borrowing costs, which makes traders hesitant to heavily favor the British Pound (GBP). The anticipation of rate cuts by the BoE limits the GBP's potential gains. Market forecasts suggest the BoE could slash interest rates by 25 basis points (bps) four times before the year ends. Hence, traders might also wait for important economic data releases this week, especially the US and UK consumer inflation figures on Tuesday and Wednesday, respectively.
Therefore, this news of potential BoE rate cuts weighs on GBP, limiting its gains against USD. Traders await data releases for further direction.
GBP/USD - Technical Analysis
The British pound is treading water against the US dollar, maintaining its position at 1.26288, virtually unchanged from the previous session. This pause in momentum has the GBP/USD pair trading just above a pivotal level at 1.25980, suggesting potential for movement in either direction.
Immediate resistance for the pair is situated at 1.26728, with additional barriers at 1.27204 and the more formidable 1.28020, which could restrict bullish advances. On the flip side, the currency duo finds near-term support at 1.25503, with subsequent safety nets at 1.24710 and 1.24256.
The Relative Strength Index (RSI) presents a neutral stance at 52, neither indicating overbought nor oversold conditions. The Moving Average Convergence Divergence (MACD) reflects a bullish inclination, with a value of 0.00038 surpassing the signal line's 0.00013. This suggests a potential uptick in buying pressure. However, the 50-day Exponential Moving Average (EMA) at 1.26251, while nominally below the current price, hints at a bearish undertone in contrast to other indicators.
Given this setup, the technical outlook for GBP/USD appears to lean towards bullish, with a strategy to place a buy stop at 1.26489. Aiming for a take profit at 1.27083, while a stop loss at 1.25947 is advised to manage potential downside risk.
Related News
- GOLD Price Analysis – Feb 12, 2024
EUR/USD Price Analysis – Feb 12, 2024
Daily Price Outlook
The EUR/USD currency pair continued its downward trend, remaining bearish around the 1.0770 level, despite the weakening US dollar. This downward movement can be attributed to speculation about potential rate cuts by the European Central Bank (ECB), which undermined the euro and put pressure on the EUR/USD pair. Conversely, the general bearish sentiment surrounding the US dollar, fueled by a risk-on attitude in the market, acted as a limiting factor, preventing further losses in the EUR/USD pair.
US Dollar Struggles Amid Fed Uncertainty
The broad-based US dollar is struggling to rise due to uncertainty about the Federal Reserve's plans to cut interest rates. This uncertainty, along with a positive market mood, is undermining the US dollar. However, the bearish US dollar may help the GBP/USD pair to trim its losses. Meanwhile, the market expectations for early rate cuts lowered because the US economy is strong and Fed officials are making hawkish comments. Basically, they want more evidence that inflation is coming down before cutting rates. Additionally, strong US economic data and comments from Fed officials are making investors rethink expectations for rate cuts, which is helping the dollar.
EURUSD Downtrend Driven by Speculation of ECB Rate Cut
On the flip side, the downward movement in the EURUSD pair was further fueled by increasing speculation that the European Central Bank (ECB) might start cutting interest rates at the beginning of the second quarter. Despite efforts by some officials to downplay expectations for immediate policy changes, the market is pricing in the likelihood of a rate cut in the second quarter. This sentiment was reinforced by a drop in German inflation, suggesting a decrease in price pressures. Additionally, ECB member Fabio Panetta hinted at an approaching rate cut, emphasizing the importance of gradual steps to minimize volatility.
EUR/USD - Technical Analysis
The EUR/USD pair edged up modestly, trading at 1.07911 with a slight gain of 0.06%. This minor uptick indicates a tentative optimism as the pair hovers around a key pivot point of 1.07688. Should the Euro sustain this momentum, it faces immediate resistance at 1.08131, with further tests at 1.08405 and 1.08874.
On the downside, immediate support lies at 1.07389. A break below could see the currency pair seeking further support at 1.06946 and 1.06685. The Relative Strength Index (RSI) stands at a neutral 54, suggesting a balanced force between buyers and sellers.
The Moving Average Convergence Divergence (MACD) presents a marginal bullish signal, with a value of 0.00043 over the signal line's 0.00017, hinting at potential upward momentum. The 50-day Exponential Moving Average (EMA) is currently at 1.07831, reinforcing the pivot point as a significant short-term level.
The technical landscape for EUR/USD shows cautious bullishness, prompting a strategy to buy above 1.07858, aiming for a take profit at 1.08270, and setting a stop loss at 1.07541 to manage risk.
Related News
- GOLD Price Analysis – Feb 12, 2024