AUD/USD Price Analysis – Jan 23, 2024
Daily Price Outlook
Despite the bullish US dollar, the AUD/USD currency pair has maintained its upward trend and remained well bid around the 0.6588 level. The reason for this upward trend can be attributed to the improved National Australia Bank's Business Confidence. The enhanced Business Confidence from the National Australia Bank might have contributed to supporting the Aussie Dollar. Additionally, the Australian Dollar could find support from the improved performance of Australia's share market. In contrast, the US Dollar (USD) managed to strengthen despite lower US Treasury yields, exerting some pressure on the AUD/USD pair.
Australian Economic Landscape and RBA Speculations Impacting AUD/USD Pair
It's worth noting that Australia's currency is facing challenges due to speculation about potential early interest rate cuts by the Reserve Bank of Australia (RBA). This speculation arises from recent indicators like lower Aussie Consumer Confidence and Employment Change figures, raising concerns about the economic outlook.
Australia's sovereign wealth fund Chair, Peter Costello, mentioned that inflation in Australia is showing early signs of slowing down. However, he highlights that there's still a long way to go to bring prices back within the RBA's target range of 2.0% to 3.0%. Despite a slight dip in National Australia Bank's Business Conditions, Business Confidence improved.
Australia's Consumer Inflation Expectations remained stable at 4.5% in January. Meanwhile, the People's Bank of China maintained its Loan Prime Rate unchanged for both one-year and five-year terms. The rates remain at 3.45% for one year and 4.20% for five years.
Therefore, the speculation on early interest rate cuts by the RBA, coupled with concerns about economic indicators, may weigh on the AUD/USD pair. Improved business confidence and stable inflation expectations offer some support amid uncertainties.
US Fed Stance and Economic Indicators: Potential Impacts on USD and AUD/USD Pair
Furthermore, San Francisco Fed President Mary Daly believes there's still significant work to be done in bringing inflation back to the 2.0% target. She made it clear that considering interest-rate cuts right now is premature. Similarly, Atlanta Fed President Raphael Bostic, before the upcoming rate meeting on January 31, reiterated his stance on potential rate cuts.
Bostic emphasized being open to adjusting his outlook based on data, highlighting the Fed's data-dependent approach. In economic news, the preliminary US Michigan Consumer Sentiment Index for January exceeded expectations, rising to 78.8 from 69.7. On the housing front, US Existing Home Sales decreased by 1.0% in December, while Housing Starts surpassed expectations, reaching 1.46 million.
Therefore, the cautious stance on rate cuts from US Fed officials, coupled with positive consumer sentiment, might support the USD against the AUD. However, housing data variations could introduce some volatility to the AUD/USD pair.
AUD/USD - Technical Analysis
The Australian dollar exhibits buoyancy, appreciating by 0.49% to 0.66011 against the US dollar. This uptick places the AUD/USD pair above the pivotal $0.6610 mark, which could act as a springboard for further gains. The pair faces successive resistance levels at $0.6695, $0.6792, and $0.6877 that may stall the climb. Conversely, supports at $0.6513, $0.6428, and $0.6331 provide layers of defense against declines.
The RSI indicator reads at 53, signaling neither overbought nor oversold conditions, suggesting equilibrium in buying and selling pressures. The MACD hovers at 0.00045, just breaching its signal line, hinting at possible upward momentum for the currency pair, albeit the crossover is minimal and warrants confirmation for a solid trend.
The 50-day EMA at $0.6588 currently supports the price, potentially reinforcing the uptrend. However, chart patterns do not offer a clear direction at present, leaving the next significant move open to interpretation. Given these factors, a conservative approach suggests potential for a bearish reversion below $0.6610, recommending a sell below 0.66172, with a take-profit at 0.65702 and a stop-loss at 0.66432.
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EUR/USD Price Analysis – Jan 22, 2024
Daily Price Outlook
The EUR/USD currency pair maintained its upward stance and gained significant traction around the 1.0899 level. The upward trend can be attributed to a combination of factors, including a bearish US dollar and the expected unchanged ECB interest rate in January, which may lead to stability for the EUR/USD pair in the short term. The European Central Bank's (ECB) January monetary policy meeting on Thursday will be closely watched by traders.
ECB Caution and Potential Rate Cuts Signal Impact on Euro (EUR)
The European Central Bank (ECB) is being cautious about making quick changes to financial conditions, and no policy changes are expected at their January meeting this Thursday. Traders are waiting for ECB President Christine Lagarde's post-meeting speech for insights, especially regarding possible interest rate cuts later this year.
Investors believe rate cuts might happen in the spring due to progress toward the 2% inflation target and tighter policy rates. The ECB's decision will be announced on Thursday. Also, on the same day, the US will release its preliminary Q4 Gross Domestic Product Annualized, and on Friday, the Commerce Department will share December data on the Personal Consumption Expenditures Price Index, an important measure for the Federal Reserve's inflation considerations.
Therefore, the cautious approach of the European Central Bank and potential interest rate cuts will likely lead to a weaker Euro (EUR) against the US Dollar (USD). Traders will closely monitor ECB decisions for currency movements.
Positive US Economic Data Weakens Expectations of Fed Rate Cut in March
Moreover, the recent positive US economic data, like Retail Sales and the Consumer Sentiment Index, has made markets less certain about the Federal Reserve cutting interest rates in March. Notably, the CME FedWatch Tool now indicates a 49.3% chance of a cut, down from 81% a week ago. The improved economic indicators are influencing these expectations, reflecting a more optimistic outlook for the US economy. Investors are closely watching for any shifts in the Fed's stance, as it can impact market sentiments and trading decisions in the coming weeks.
Therefore, the lowered probability of a March interest rate cut by the Federal Reserve, driven by positive US economic data, may strengthen the US Dollar (USD) against the Euro (EUR) in the EUR/USD pair.
EUR/USD - Technical Analysis
The EUR/USD pair inched up modestly by 0.06%, situating itself at 1.09033, as market participants exhibit cautious optimism. The pair's struggle to define a clear directional bias is reflective of broader market sentiment, which remains divided amid contrasting economic signals.
A meticulous examination of the chart reveals a pivot point stationed at $1.0903, a level that is currently acting as a juncture for potential price swings. Immediate resistance levels are arrayed at $1.0963, $1.1028, and $1.1086, each serving as a potential challenge to upward movements. Conversely, support is entrenched at $1.0839, with further cushions at $1.0781 and $1.0714, safeguarding against downward pressures.
The RSI indicator presents a neutral stance at 53, suggesting an even tug of war between the bulls and bears. The MACD's positive value (0.000590) against its signal (-0.000490) intimates a growing bullish undercurrent, potentially priming the pair for an ascent.
The 50-day EMA, stationed at $1.0891, hovers just below the current price, which could act as a threshold for the pair's short-term trajectory. This moving average, in conjunction with the pivot point, may serve as a strategic fulcrum for the pair’s future path.
In summation, the current technical landscape paints a picture of cautious neutrality for EUR/USD. Traders may consider a sell position below the pivot point at 1.09031, targeting a take-profit level at 1.08562, while placing a stop loss at 1.09292 to manage risk.
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- GOLD Price Analysis – Jan 22, 2024
GOLD Price Analysis – Jan 22, 2024
Daily Price Outlook
Gold prices (XAU/USD) failed to extend their previous bullish rally and lost some momentum around the $2,020 level. Gold started this new week on a weaker note as it dropped to the $2,020.99 level. However, the reason for its downward trend can be attributed to the recent hawkish comments from a Federal Reserve (Fed) policymakers, which diminish market expectations of an early rate cut.
This was seen as a key factor driving flows away from the non-yielding yellow metal. Furthermore, incoming US macro data, including Friday's upbeat consumer sentiment index, indicates that the economy is performing well. This has diminished market expectations of an early rate cut and is a contributing factor to the declines in gold prices.
In addition to this, a risk-on sentiment in the market was seen as another key factor that undermined the gold price. In contrast to this, the concerns about increasing tensions in the Middle East and ongoing worries about economic slowdown in China could offer some support to the safe-haven XAU/USD. Moreover, the lower US Treasury bond yields, which keeps the US Dollar (USD) bulls on the defensive, should help limit any further losses for the precious metal.
Gold Prices Slide Amid Diminished Expectations for Federal Reserve Rate Cut
It's important to mention that Gold prices lost momentum at the beginning of the week due to a decreased likelihood of the Federal Reserve cutting interest rates soon. Investors are feeling optimistic, and recent positive US economic data and comments from Fed officials made them less inclined to expect an early rate cut. The University of Michigan's survey indicated improved consumer sentiment, reaching its highest level since July 2021.
Traders now see less than a 50% chance of a rate cut in March, down from over 70% last week. Chicago Fed President Goolsbee emphasized the need for more inflation data, and San Francisco Fed President Daly cautioned that rate cuts aren't imminent.
Therefore, the reduced chance of a Federal Reserve rate cut, driven by positive economic data and officials' comments, caused Gold prices to decline. Improved investor sentiment and lower expectations for rate cuts led to the drop.
Escalating Geopolitical Tensions Spark Interest in Gold as a Safe-Haven Asset
Furthermore, the US launched its seventh attack on Houthi rebels in response to their anti-ship missile strikes in the Red Sea. Over 140 attacks on US bases have occurred since October 17, with seven in the past week, including a significant strike in Iraq. Iran, blaming Israel, vows retaliation for an attack in Damascus that killed five military officials.
Israeli forces clashed with Hamas in several places, and airstrikes resumed in the southern Gaza Strip. Israeli Prime Minister Netanyahu rejected a two-state solution, asserting Israel's need for security control over the entire territory west of the Jordan River.
Therefore, the increased geopolitical tensions, marked by US actions, Middle East clashes, and Iran-Israel tensions, can boost gold prices as investors often turn to gold as a safe-haven asset during uncertain and volatile times.
GOLD (XAU/USD) - Technical Analysis
Gold's market behavior on January 22 presents a slight contraction, with a 0.12% decrement, stabilizing at $2027.16. In the tapestry of global economic uncertainties, the precious metal finds itself in a tug-of-war between bearish pullbacks and the enduring allure of its safe-haven status.
Within the technical realm, Gold has etched a pivot point at $2,003, a strategic nexus that could determine its short-term fate. Resistance is arrayed at $2,030, with subsequent barriers at $2,059 and $2,089, each level a potential catalyst for further bullish excursions or a turning point for retracement. Supports are anchored at $1,975, $1,943, and $1,916, which may serve as bulwarks against deeper price dips.
The RSI rests at an equilibrium of 50, signifying a market in balance, with neither overbought nor oversold conditions evident. The MACD indicator signals a robust divergence (2.01) from its signal (-0.91), suggesting latent bullish tendencies may be gathering momentum beneath the surface.
Gold's 50-day EMA aligns closely with its current price, echoing the pivot point's critical significance. This confluence may act as a springboard for upward movements or a demarcation line for bearish reversals.
Conclusively, while the current trend hints at neutrality, the proximity of Gold's price to key technical thresholds suggests a potential for volatility. Traders considering entry may favor a sell position below the immediate resistance of $2,030, eyeing a take-profit mark at $2,015, and a stop loss at $2,040 to mitigate risk exposure.
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EUR/USD Price Analysis – Jan 19, 2024
Daily Price Outlook
Despite ECB President Christine Lagarde expecting interest rate cuts to be considered by the summer, the EUR/USD currency pair maintained its upward stance and remained well bid around the $1.0877 level. The reason for its upward trend can be attributed to cautious sentiment, as traders are anticipated to closely monitor Germany's Producer Price Index (PPI) data on Friday.
Apart from this, speculations regarding potential rate cuts by the European Central Bank (ECB) in September were seen as a key factor that kept the lid on any additional gains in the EUR/USD pair. ECB President Christine Lagarde, speaking at the World Economic Forum (WEF) in Davos, suggested that interest rate cuts might be considered by the summer.
Speculations of ECB Rate Cuts and Impact on EUR/USD Pair
It's worth noting that the Euro (EUR) might face a challenge due to speculation about potential interest rate cuts by the European Central Bank (ECB) in September. ECB President Christine Lagarde hinted at this during the World Economic Forum, suggesting rate cuts could be considered by summer. Lagarde emphasized that the ECB's interest rates might have reached their peak and that decisions would depend on economic data. She acknowledged ongoing uncertainties and the need for careful consideration in future monetary policy. This uncertainty contributes to a cautious approach, as indicators are not yet firmly established.
Therefore, the Euro (EUR) could experience downward pressure against the US Dollar (USD) as speculations of potential interest rate cuts by the European Central Bank (ECB) create uncertainty, negatively impacting the EUR/USD pair.
Rising Yields and Economic Data Impacting EUR/USD Pair
Furthermore, the US Dollar Index (DXY) is holding steady, maintaining recent gains and showing a positive trend. The rise in US Treasury yields is adding support to the strength of the US Dollar. Currently, the 2-year and 10-year yields on US bonds are at 1.36% and 1.16%, respectively.
Meanwhile, the recent robust economic data, including better-than-expected US Housing Starts in December at 1.46 million and increased Building Permits at 1.495 million, is reinforcing the positive momentum. Furthermore, the decline in Initial Jobless Claims to 187,000 signals a resilient job market. These factors collectively challenge early expectations of interest rate cuts by the US Federal Reserve in March.
Therefore, the positive trend in the US Dollar, supported by rising Treasury yields and strong economic data, may exert downward pressure on the EUR/USD pair as the Dollar gains strength against the Euro.
Germany's PPI and US Consumer Sentiment Index in Spotlight
Moving on, traders are expected to keep a close eye on Germany's Producer Price Index (PPI) data this Friday. At the same time, attention will be on the US preliminary Michigan Consumer Sentiment Index for January.
EUR/USD - Technical Analysis
The EUR/USD pair, a key indicator of transatlantic economic health, has experienced a slight uptick as of January 19, 2024, trading at 1.08860, which is a 0.09% increase from the previous day. This movement, though modest, offers a window into the subtle dynamics at play in the forex market.
The pair's pivot point stands at 1.08649, serving as a baseline for intraday traders. The immediate resistance levels are positioned at 1.09093, 1.09538, and 1.09965, each representing potential ceilings that the Euro might face against the Dollar. On the support front, levels are found at 1.08186, 1.07706, and 1.07261, which could act as cushions in the event of a downward correction.
Turning to technical indicators, the Relative Strength Index (RSI) is at 46, indicating a neutral momentum with neither overbought nor oversold conditions dominating. The Moving Average Convergence Divergence (MACD) presents a nuanced picture, with a value of 0.0003 and a signal at -0.0014. This subtle divergence suggests that market participants are waiting for clearer signals before committing to more significant positions.
The 50-Day Exponential Moving Average (EMA) is currently at 1.08792, nearly aligning with the current trading levels, indicating a potential battleground for traders.
A key observation in chart patterns is the EUR/USD pair retesting a previously violated double bottom support level at 1.0906. This retest is crucial as it could either confirm the strength of this level or indicate a potential shift in market sentiment.
The overall market trend for EUR/USD seems to be in a state of equilibrium, with a slight tilt towards bearishness. Traders might consider a sell limit at 1.08908, taking profit at 1.08386 and placing a stop loss at 1.09264 to manage risks effectively. The short-term forecast suggests the pair may test the resistance levels, especially around 1.09093, indicating a period of tentative upward momentum, but with underlying caution due to the close proximity of key technical indicators and chart patterns.
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GOLD Price Analysis – Jan 19, 2024
Daily Price Outlook
Gold prices (XAU/USD) failed to maintain their upward trend and lost some ground around the 2,022 level. The downward trend can be attributed to reduced bets for a March Fed rate cut, leading to upward pressure on US bond yields and the US dollar, contributing to gold losses. Meanwhile, geopolitical tensions in the Middle East escalated further after Pakistan launched retaliatory airstrikes inside Iran on Thursday. This adds to US-Houthi clashes in the Red Sea. In the meantime, the ongoing worries about economic weakness in China were seen as one of the key factors helping gold prices limit their deeper losses.
Stable USD and Diminished Rate Cut Expectations Impact Gold Prices
It's worth noting that the US Dollar (USD) has been trading steadily for three days, supporting the price of Gold. However, expectations of a Federal Reserve (Fed) interest rate cut have diminished, keeping US Treasury bond yields up and the USD stable. This could limit Gold's potential gains. Another factor that has been bossting the US dollar was positive economic data, such as strong Retail Sales and a drop in Jobless Claims. This prompts markets to scale back expectations of a March rate cut, strengthening the USD further. The higher 10-year US bond yield favors the USD but may hinder significant Gold price increases.
Therefore, the reduced probability of a Fed rate cut and positive US economic data has stabilized the USD, limiting Gold's upward potential.
Geopolitical Unrest Fuels Gold's Safe-Haven Appeal
Furthermore, tensions persist as US-led forces clash with Iran-backed Houthi rebels in the Red Sea, impacting the safe-haven Gold price amid stable US Dollar trading. Houthi rebels recently targeted a US-owned tanker, prompting the fifth US strike against them. Simultaneously, Pakistan conducted military strikes on terrorist hideouts in Iran's Sistan-Baluchistan province. In response, Iran initiated an air defense drill near the Pakistan border.
These geopolitical developments contribute to Gold's appeal as a safe-haven asset, with ongoing conflicts and military actions influencing market sentiment and supporting Gold prices. Investors may turn to Gold amid uncertainty, affecting its value in response to global geopolitical tensions.
GOLD (XAU/USD) - Technical Analysis
As of January 19, 2024, the gold market presents a nuanced technical landscape. Currently trading at $2021, gold has witnessed a modest dip of 0.10% in the last 24 hours. Despite this slight downward movement, the broader picture offers a mixed bag of signals for traders and investors alike.
Key price levels are critical to understanding potential movements. The pivot point stands at $1,992, serving as a crucial psychological and technical marker. Immediate resistance levels are observed at $2,022, $2,041, and $2,070, each representing potential hurdles for upward momentum. Conversely, support levels are identified at $1,973, $1,953, and $1,931, which could provide stability or indicate further decline if breached.
The technical indicators offer additional insight. The Relative Strength Index (RSI) is currently at 46, hovering near the midpoint of the 30-70 range, suggesting a lack of clear overbought or oversold conditions. The Moving Average Convergence Divergence (MACD) presents a more complex picture. The MACD value is at 0.80, with the signal at -5.481. This disparity could indicate a potential shift in momentum, though it warrants cautious interpretation.
The 50-Day Exponential Moving Average (EMA) stands at $2,018, closely aligning with the current trading price, further complicating the short-term outlook.
A key observation is the symmetrical triangle pattern, which was previously breached and is now acting as resistance at $2025. This pattern, along with candlestick analysis, suggests a potential pivot in the market dynamics.
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S&P500 (SPX) Price Analysis – Jan 19, 2024
S&P500 (SPX) Price Analysis – Jan 19, 2024
Daily Price Outlook
The global market sentiment maintained its upward trend and remained positive on Friday, with the S&P 500 hitting record highs. This was witnessed after the index showed strong gains on Friday, particularly in the technology and semiconductor sectors. Notably, the major players such as Nvidia, the leading chipmaker, and Taiwan Semiconductor Manufacturing (TSMC), the world's largest contract semiconductor maker, saw a 1.9% increase, reaching a new all-time high, while TSMC surged nearly 10%, indicating a robust outlook for 2024 with projected revenue growth exceeding 20%.
Other semiconductor giants, such as Advanced Micro Devices, Broadcom, Qualcomm, and Marvell Technology, also recorded notable gains, contributing to the 3.4% rally in the Philadelphia SE Semiconductor Index. Apple joined the upward trend, surging 3.3% following a stock upgrade by BofA Global Research. Hence, these stocks played a major role in influencing the performance of the S&P 500.
Despite recent volatility and fluctuations in interest rate expectations, the S&P 500 closed at 4,780.94 points, only 0.3% below its previous record-high close in January 2022. The Nasdaq gained 1.35%, reaching 15,055.65 points, while the Dow Jones Industrial Average rose by 0.54%, closing at 37,468.61 points.
S&P 500's Rally Fueled by AI Optimism and Semiconductor Stocks
However, the reason for its impressive performance can be attributed to growing optimism about artificial intelligence (AI) and the technology sector. The increased need for advanced chips drove up semiconductor stocks. With companies like TSMC forecasting significant revenue growth in 2024, investors expressed confidence in the future of AI-driven technologies, leading to record highs in tech-related stocks.
Jake Dollarhide, the CEO of Longbow Asset Management, said that the AI industry has caused a strong rally, and it looks like the momentum will keep going. This positive feeling, along with good news like Apple getting a "buy" rating, really helped the overall market go up.
Federal Reserve's Influence and Geopolitical Events
Investors are keenly monitoring the Federal Reserve's stance on interest rates, contributing to recent market fluctuations. While Wall Street experienced uncertainty regarding the Fed's potential interest rate cuts in March, the S&P 500 responded positively to a favorable job growth outlook in January. The president of the Atlanta Federal Reserve said they might lower rates sooner if inflation goes down faster than expected.
Additionally, geopolitical events, such as the clash between US-led forces and Iran-backed Houthi rebels, added an uncertainty to the market. Despite these geopolitical tensions, the S&P 500 maintained its upward trajectory.
S&P500 (SPX): Technical Analysis
The S&P 500 index, a barometer of the broader U.S. stock market, has exhibited a positive movement as of January 19, 2024. The index stands at 4780.95, marking an uptick of 0.88%. This bullish trend, albeit moderate, is a signal for investors and traders to reassess their strategies.
The pivot point for the day is at $4,721, indicating a key level for the index's movement. Immediate resistance levels are found at $4,762, $4,826, and $4,863. These levels are critical as they represent potential barriers to the index's upward trajectory. On the flip side, support levels at $4,661, $4,619, and $4,580 are equally important as they could signify areas where the index might stabilize or rebound in a downward trend.
Technical indicators offer a deeper insight into the market's sentiment. The Relative Strength Index (RSI) is at 58, suggesting a moderately bullish momentum without veering into overbought territory. The Moving Average Convergence Divergence (MACD) presents a contrasting narrative with a value of -2.26 and a signal at 8.06. This divergence may indicate potential volatility or a change in the current trend.
The 50-Day Exponential Moving Average (EMA) is positioned at $4,785, slightly above the current index level, hinting at a possible resistance in the near term.
A notable chart pattern is the upward trendline supporting the S&P 500 around 4735. This pattern, coupled with candlestick analysis, suggests a sustained bullish sentiment, albeit with caution due to potential resistance levels.
The S&P 500's current trajectory is cautiously optimistic, leaning towards a bullish trend. Investors might consider a buy limit at 4750, targeting a take profit at 4841, while maintaining a stop loss at 4706 to mitigate risks. The short-term forecast anticipates the index testing its immediate resistance levels, particularly around $4,762 and $4,826, suggesting a period of potential gains but with a watchful eye on market indicators and global economic cues.
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AUD/USD Price Analysis – Jan 18, 2024
Daily Price Outlook
Despite the decline in Employment Change and the bullish US dollar, the AUD/USD currency pair maintained its bullish bias and remained well bid around the 0.6564 level. The upward trend can be attributed to the stability in Australian Consumer Inflation Expectations and the Unemployment Rate meeting expectations, providing some relief to the Australian dollar. In contrast to this, the US military's execution of another series of strikes on Houthi targets in Yemen heightened geopolitical tensions, bolstering the risk-off market sentiment and undermining the riskier Australian dollar. This was seen as a key factor that kept a lid on any additional gains in the AUD/USD pair.
Australian Economic Indicators and Mixed Chinese Data
It's worth noting that Australia's recent economic data failed to give much support to the Australian Dollar. In January, Consumer Inflation Expectations and the Unemployment Rate held steady, but Employment Change took a hit, falling by 65.1K instead of the expected increase of 17.6K. Additionally, Consumer Confidence dropped by 1.3%, contrasting with the previous 2.7% rise. On a positive note, Australian TD Securities inflation rose to 5.2% YoY in December.
Meanwhile, China's economic indicators showed mixed results. Annual GDP growth was 5.2%, slightly below the expected 5.3%. Industrial Production beat expectations at 6.8%, but Retail Sales fell short at 7.4% YoY. Premier Li Qiang mentioned that China's economy grew around 5.2% in 2023.
Therefore, Australia's weak economic data, coupled with China's mixed indicators, may pressure the AUD/USD pair as the declining employment and consumer confidence in Australia, along with China's slightly below-expected GDP, could weigh on the Australian Dollar.
Factors Influencing the US Dollar and Pressuring the AUD/USD Pair
In addition, the US Dollar Index (DXY) retreated from a five-week high at 103.69 due to lower US Treasury yields following Wednesday's economic data. US Retail Sales in December surpassed expectations, registering a 0.6% increase. The positive momentum extended to the Retail Sales Control Group, which rose by 0.8%, and Retail Sales excluding Autos, growing by 0.4% and surpassing the anticipated 0.2%.
Investor sentiment favored the US Dollar, decreasing the probability of a March rate cut by the Federal Reserve from over 70% to 57%. Federal Reserve officials, including Christopher Waller and Raphael Bostic, underscored the importance of caution and cautioned against premature rate cuts. Additionally, the US NY Empire State Manufacturing Index dropped to -43.7 in January, falling short of expectations.
Therefore, the positive US economic data, lower chance of a March rate cut, and caution from Federal Reserve officials strengthened the US Dollar. This likely pressured the AUD/USD pair, causing a potential decline.
AUD/USD - Technical Anaylsis
As of January 18, the AUD/USD pair has shown a slight uptick, currently trading at 0.65488, marking a 0.10% increase. On a 4-hour chart, the currency pair presents a pivot point at 0.6557. Looking ahead, AUD/USD faces immediate resistance at 0.6600, with subsequent levels at 0.6645 and 0.6689. Conversely, support is found at 0.6510, followed by 0.6464 and 0.6730.
The Relative Strength Index (RSI) stands at 30, suggesting the pair may be entering an oversold territory, potentially leading to a bounce. The Moving Average Convergence Divergence (MACD) shows a value of -0.0002 with a signal line at -0.0036, hinting at possible downward momentum. However, the pair needs to break past key levels for a clearer direction.
The 50-Day Exponential Moving Average (EMA) is currently positioned at 0.6566, hovering near the pair’s current trading level and might act as a dynamic resistance. A notable chart pattern for AUD/USD is the double bottom support around the 0.6530 level, suggesting potential for a reversal if the pair holds this support.
The overall trend for AUD/USD appears to be in a crucial phase. For traders, a potential entry point could be at a buy limit of 0.65302, with a take-profit target set at 0.65981 and a stop loss at 0.64956. In the short term, the currency pair is expected to test its resistance levels, particularly if it surpasses its immediate pivot point.
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USD/JPY Price Analysis – Jan 18, 2024
USD/JPY Price Analysis – Jan 18, 2024
Daily Price Outlook
Despite expectations that the Bank of Japan (BoJ) will maintain its dovish stance, the USD/JPY currency pair failed to halt its downward trend and remained under pressure around the $147.86 level. The decline can be attributed to a weakening US dollar, influenced by robust U.S. retail sales data that raised doubts about early rate cuts by the Federal Reserve. Additionally, concerns about heightened military activity in the Middle East and ongoing economic challenges in China are affecting investor sentiment. Traders are also adjusting their positions ahead of Japan's consumer inflation data release on Friday, contributing to losses in the USD/JPY currency pair.
Positive US Economic Data Strengthens USD and Supports USD/JPY Pair
It is worth noting that positive US economic data on Wednesday alleviated concerns about the Federal Reserve changing its policies in March. The Commerce Department revealed that US retail sales increased more than expected by 0.6% in December, surpassing estimates even when excluding auto sales. This shows that people are spending more, and the US economy is doing well. Fed Governor Christopher Waller highlighted the need to be cautious about cutting interest rates unless there's clear proof of ongoing lower inflation. The yield on the 10-year US government bond crossed 4%, helping the US Dollar.
Therefore, the positive US economic data boosted the US Dollar, but the USD/JPY pair faced pressure due to cautious Fed stance and global uncertainties.
Impacts of Geopolitical Tensions on USD/JPY Pair and Investor Sentiment
Furthermore, tensions surrounding the Israel-Hamas conflict and slow economic growth in China make investors cautious about riskier assets. This supports the safe-haven Japanese Yen, constraining the USD/JPY pair. Recent events, such as Yemen's Houthi rebels targeting a US-owned cargo ship with a kamikaze drone, contribute to geopolitical concerns.
Besides this, Pakistan conducted military strikes against terrorist hideouts in Iran's Sistan-Baluchistan province, asserting its commitment to protecting its people. Despite China's economy growing at 5.2% in Q4 2023, a property crisis, deflation risks, and weak demand cast doubts on its recovery. Traders are now monitoring US economic data, but attention remains on Japan's upcoming consumer inflation figures on Friday.
Therefore, tensions in the Israel-Hamas conflict, economic concerns in China, and geopolitical events have led investors to prefer the safe-haven Japanese Yen, limiting the USD/JPY pair's upward potential.
USD/JPY - Technical Analysis
As of January 18, the USD/JPY is witnessing a slight downtrend, currently positioned at 148, marking a decrease of 0.11%. The 4-hour chart analysis identifies a pivotal point at 144.95. The pair faces immediate resistance at 146.47, with further barriers at 147.87 and 149.34. On the support side, it finds initial support at 143.42, followed by 141.96 and 140.37.
The Relative Strength Index (RSI) stands at 74, indicating that the pair may be approaching overbought territory, potentially leading to a pullback. The Moving Average Convergence Divergence (MACD) is currently at 0.09, with the signal line at 0.774, suggesting a potential for upward momentum but warranting caution given the high RSI.
The 50-Day Exponential Moving Average (EMA) is at 147.70, indicating potential resistance for the pair. The observed chart pattern shows an upward channel, supporting the current uptrend, yet a double top pattern near 148.50 suggests significant resistance.
The overall trend for USD/JPY appears to be at a critical juncture, with a short-term bearish outlook. Traders might consider a sell limit at 148.500, with a take profit target of 147.100 and a stop loss at 149.350. In the near term, the pair is expected to test its resistance levels, particularly if it moves beyond the current resistance point.
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AUD/USD Price Analysis – Jan 18, 2024
GOLD Price Analysis – Jan 18, 2024
Daily Price Outlook
Gold price (XAU/USD) managed to halt its two-day downward trend and gained bullish traction around the $2,010 level. The upward rally can be attributed to the risk-off market sentiment, providing support to the safe-haven metal. Furthermore, the geopolitical tensions and concerns about a weak economic outlook for China have played a significant role in bolstering the gold price. Besides this, a modest downtick in the US Dollar (USD) has served as another factor benefiting the safe-haven gold.
Impact of Positive US Retail Sales on Economy, Interest Rates, and Gold Prices
It's important to highlight that the recent positive US Retail Sales report signals a strong economy, providing the Federal Reserve with room to maintain higher interest rates. This supports higher US Treasury bond yields, benefiting the USD and limiting potential gains for Gold. The data, which shows higher-than-expected retail sales in December, indicates robust consumer spending and overall economic strength. Fed Governor Waller's cautious stance on cutting rates adds to this narrative. The 10-year US bond yield above 4% supports the USD.
Therefore, the positive US Retail Sales report suggests a strong economy, supporting higher interest rates and US Treasury yields. This caps potential gains for Gold, a non-yielding asset, making it less attractive to investors.
Gold Gains Modestly Amid Global Concerns and Geopolitical Tensions
Moreover, the safe-haven gold has been gaining traction and maintains modest gains as investors seek safety amid global concerns. However, the geopolitical tensions and worries about China's economic outlook contribute to the precious metal's appeal. In the meantime, the slight decline in the US Dollar also supports Gold, attracting buyers around the $2,000 mark. Houthi rebels claim a second attack on a US-operated vessel, escalating tensions, while Pakistan conducts military strikes in Iran, emphasizing its commitment to protect its people.
Therefore, the Gold price benefits from global concerns, including geopolitical tensions and China's economic worries. A weaker US Dollar and escalating geopolitical events, such as Houthi attacks and military strikes, elevate Gold's appeal amid uncertainty
GOLD (XAU/USD) - Technical Analysis
As of January 18, Gold (XAU/USD) has shown a modest increase, trading at $2008, up by 0.09%. The chart analysis on a 4-hour timeframe indicates a pivot point at $1,993, with the metal facing immediate resistance at $2,021. Further resistance levels are seen at $2,042 and $2,069. On the support side, immediate backing is found at $1,972, followed by $1,950 and $1,930.
The Relative Strength Index (RSI) stands at 33, suggesting that Gold may be entering an oversold territory. The Moving Average Convergence Divergence (MACD) presents a value of -3.61, with its signal line at -8.27. This could indicate a potential for downward momentum, although a cautious approach is warranted given the proximity to oversold conditions.
The 50-Day Exponential Moving Average (EMA) currently sits at $2,017, reinforcing the resistance area near the $2,021 level. The observed symmetrical triangle pattern in the chart suggests a strong selling pressure, yet the entry into the oversold zone offers a counterbalance.
The overall trend for Gold appears to be at a critical juncture. Investors might consider a buy limit at 2008, with a take profit target of 2030 and a stop loss set at 1996. Short-term, Gold is expected to test its immediate resistance levels, particularly if it can sustain a move beyond the pivot point of $1,993.
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GOLD Price Analysis – Jan 17, 2024
Daily Price Outlook
Gold prices (XAU/USD) failed to halt their downward rally and remained well offered around the 2,019 level. The reason for this downward trend can be attributed to the bullish US dollar, backed by higher US Treasury bond yields. It should be noted that Federal Reserve (Fed) Christopher Waller's remarks on Tuesday forced investors to scale back their expectations for an early interest rate cut by the US central bank. This pushed the US Treasury bond yields higher, lifting the US Dollar (USD) to over a one-month peak.
Fed Comments and Rising Bond Yields Put Pressure on Gold Prices, Eyes on Future Economic Data
It's worth noting that investors are exercising caution due to reduced expectations of a Federal Reserve rate cut in March, combined with global tensions and sluggish economic growth in China. This cautious sentiment is creating a generally subdued atmosphere in the stock markets. Surprisingly, it's not boosting the demand for the safe-haven Gold.
Federal Reserve Governor Christopher Waller made comments on Tuesday that added to the skepticism about a March rate cut. He emphasized the need for the Fed to be careful and not rush into rate cuts, highlighting that the economy is performing well. This push up the yields on the 10-year US government bonds, crossing the 4.0% mark. This rise in bond yields is supporting the US Dollar and putting a cap on Gold prices.
Looking ahead, speeches by Fed Governors Michael Barr and Michelle Bowman could impact the US Dollar and provide some momentum for Gold. Traders are now keeping an eye on upcoming US economic data, expecting to see a 0.4% growth in monthly Retail Sales for December and flat Industrial Production.
Gold Price Faces Limited Relief Amid Middle East Tensions and Positive Chinese Economic Data
Despite ongoing tensions in the Middle East, safe-haven Gold (XAU/USD) isn't finding much support, and bullish traders remain subdued. A recent US airstrike targeting a Houthi missile site in Yemen due to a threat to ships adds to the geopolitical complexities. On the economic front, China reported a 5.2% annual growth in its economy for Q4 2023, meeting expectations. In December, Retail Sales saw a YoY rise of 7.4%, while Industrial Production experienced a YoY increase of 6.8%.
Despite facing external challenges and dealing with low consumer prices due to weak domestic demand, the presence of geopolitical risks and China's economic hurdles might moderate aggressive bearish bets on Gold, thereby aiding in limiting potential losses.
GOLD (XAU/USD) - Technical Analysis
Gold's current trading price of $2,018.60, down by 0.47%, reflects a cautious market sentiment. Analyzing the 4-hour chart timeframe, we observe several key levels that could dictate the metal's short-term trajectory. The pivot point is set at $1,993, suggesting a neutral to bearish outlook unless this level is decisively breached. Resistance levels are established at $2,021, $2,041, and $2,070, which could cap upward movements. Conversely, support levels at $1,972, $1,951, and $1,930 might offer a cushion against further declines.
From a technical standpoint, the RSI at 34 hints at a potential oversold scenario, possibly leading to a rebound. However, the MACD, currently at -3.64 with the MACD line below the signal line, suggests that the bearish momentum is still in play. The 50-Day EMA stands at $2,040, reinforcing the resistance zone. Notably, a symmetrical triangle pattern is observed, with a breakout at the $2,020 level, indicating a critical juncture for future price action.
The overall trend for Gold appears bearish, with a short-term forecast suggesting a potential test of lower support levels. Traders might consider a sell limit at 2023, with a take profit target at 2004 and a stop loss at 2034.
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