GBP/USD Price Analysis – Oct 30, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair continued its downward trend, trading sluggish around the 1.2976 level on Wednesday. This is because traders are watching closely for the United Kingdom's Autumn Forecast Statement, set to be announced at 12:45 GMT.
This marks Labour's first budget presentation in over 15 years, with Chancellor of the Exchequer Rachel Reeves expected to propose tax increases on various income sources and outline plans for higher spending to boost investment.
This could undermine the GBP as investors react negatively to such measures, fearing they could lead to slower economic growth or increased debt levels. This could contribute to further weakness in the GBP/USD pair
On the flip side, the losses in the GBP/USD pair may ease as the US dollar weakens ahead of important US economic data. The ADP Employment Change report for October and the Q3 flash GDP data will be released around 12:30 GMT, which could further impact the currency pair.
US Economic Data and Its Impact on GBP/USD Pair
On the US front, the broad-based US dollar turned bearish ahead of important economic data. As a result, the GBP/USD pair gained slightly, with investors focused on the upcoming ADP Employment Change report for October.
This report is expected to show that the private sector added 115,000 new jobs, down from 143,000 in September. However, the slowdown in job growth could worry investors about the job market, leading to increased expectations for interest rate cuts by the Federal Reserve.
Meanwhile, Tuesday’s JOLTS Job Openings data for September raised concerns about slowing job demand, as the number of new job openings was lower than expected. Investors are also looking ahead to the US Nonfarm Payrolls (NFP) data for October, which will be released on Friday, to gain more insights into the labor market.
Hence, the US economy is expected to grow steadily at a rate of 3.0% in the third quarter of the year, showing some resilience despite challenges in the job market.
Impact of UK Autumn Forecast Statement on GBP/USD Pair
Moreover, many investors are cautious about making strong moves ahead of the United Kingdom's Autumn Forecast Statement, which will be announced at 12:45 GMT.
This will be Labour’s first budget presentation in over 15 years. Chancellor of the Exchequer Rachel Reeves is expected to announce tax hikes on various income sources and outline plans for increased spending to boost investment.
According to UBS, the budget will focus on three main areas: changes to fiscal rules to allow more borrowing, a package of tax increases on capital gains, inheritance, pensions, and national insurance contributions for employers, and additional spending on investment projects.
Market participants are particularly interested in the details of the tax increases and spending plans, as these could affect inflation. Analysts at UBS believe that higher spending will likely raise the fiscal deficit to 3.1% of GDP.
This higher deficit could raise concerns about ongoing price pressures, leading traders to reconsider their expectations for the Bank of England’s (BoE) interest rate decisions for the rest of the year.
According to a recent Reuters poll, the BoE is expected to cut interest rates by 25 basis points in its upcoming meeting on November 7, bringing key borrowing rates down to 4.75%.
Therefore, the cautious investor sentiment and potential tax hikes in the UK may weaken the GBP/USD pair, as concerns over higher fiscal deficits could dampen confidence in the pound, especially if the Bank of England cuts interest rates as expected.
GBP/USD – Technical Analysis
GBP/USD is trading near the $1.29990 level, showing a slight decline and hovering just below the key pivot point at $1.30154. Immediate resistance lies at $1.30312, followed by stronger resistance at $1.30493 and $1.30644.
The Relative Strength Index (RSI) stands at 56, hinting at moderate bullish momentum but not yet in overbought territory. Additionally, the 50-day Exponential Moving Average (EMA) is positioned at $1.29753, offering a nearby support level that could reinforce bullish sentiment if tested.
A sustained move above the $1.30154 pivot could spark buying interest, potentially driving the pair toward $1.30493 and beyond. However, if prices fall below immediate support at $1.29947, traders may see further downside risk toward $1.29793 and $1.29587.
For those seeking a buying opportunity, an entry above $1.29895 with a target at $1.30320 and a stop loss near $1.29562 aligns with the current technical setup, balancing risk with potential upside. GBP/USD is positioned near its pivot with a mildly bullish outlook, with buyers likely stepping in above $1.30154.
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EUR/USD Price Analysis – Oct 30, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward trend, remaining well bid around 1.0832 and reaching an intra-day high of 1.0859.
This bullish rally can be attributed to positive Eurozone growth data, which indicated that the economy surprisingly grew in the third quarter after contracting in the April-June period.
Moreover, gains in the EUR/USD pair accelerated as the bullish rally in the US dollar appeared to have slowed and faced bearish pressure following weak JOLTS Job Openings data for September.
EUR/USD Rises on Positive Eurozone GDP Data and Lower Rate Cut Expectations
On the EUR front, the shared currency gained strong bullish traction, with the EUR/USD rising strongly near the 1.0850 level. This surge is mainly due to positive Gross Domestic Product (GDP) data showing that the Eurozone economy grew unexpectedly in the third quarter after contracting earlier in the year.
In the meantime, the German economy expanded by 0.2%, surprising economists who had predicted a 0.1% decline. However, the Eurozone overall grew by 0.4% in the three months ending in September, following a 0.2% growth in the previous quarter.
Meanwhile, the bloc's GDP rose at an annual rate of 0.9% in Q3, compared to 0.6% in Q2 and the expected 0.8%. Year-on-year, German GDP contracted at a slower rate of 0.3% after flat growth in Q2. Additionally, the preliminary Harmonized Index of Consumer Prices (HICP) data for Germany showed higher-than-expected inflation.
These positive developments have reduced expectations for a significant interest rate cut by the European Central Bank (ECB) in December, with the likelihood of a 50 basis point cut now dropping to 22% from 45%. However, concerns about the Eurozone's economic outlook remain among investors.
EUR/USD Boosted by Bearish US Dollar and Weak Job Data
Another factor that has been boosting the EUR/USD pair is the bearish US dollar, which has lost its momentum following weak JOLTS Job Openings data for September, raising concerns about the labor market.
The data revealed that job openings dropped to 7.443 million, below the expected 7.99 million and down from the previous 7.861 million. This decline in job openings suggests a slowdown in labor demand and supports expectations that the Federal Reserve may keep interest rates low for the rest of the year.
Moving on, investors are looking ahead to key reports like the ADP Employment Change and the flash US Q3 GDP data, which will be released during the North American session.
Economists predict the private sector added 115,000 new jobs in October, down from 143,000 in September. Furthermore, the US economy is expected to grow at a steady annualized rate of 3.0%.
EUR/USD – Technical Analysis
The EUR/USD pair is trading just below the pivot point of $1.08223, marking a cautious stance as it edges lower in today’s session. Immediate resistance is noted at $1.08382, with further resistance levels at $1.08568 and $1.08738.
The 50-period Exponential Moving Average (EMA) at $1.08101 aligns closely with the current price, suggesting a tentative neutral bias. The Relative Strength Index (RSI) sits at 52, indicating balanced momentum without strong overbought or oversold signals.
Should the pair sustain a drop below $1.08223, it may attract further selling interest, potentially pushing it toward immediate support at $1.07986. A break beneath this level could open doors to additional downside toward $1.07858 and $1.07686.
Traders may consider short positions below $1.08223, targeting $1.07864, while setting a stop loss around $1.08414 to guard against unexpected volatility. Watch for price action near the pivot for early indications of market direction.
EUR/USD trades near its pivot, with potential for further downside if support levels are broken.
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GOLD Price Analysis – Oct 30, 2024
Daily Price Outlook
Gold price (XAU/USD) maintained its upward trend and hit new highs around 2,789 level on Wednesday as more investors turned to gold due to rising US political uncertainty and lower US Treasury yields.
Investors are looking for safe investments as the US presidential election gets closer, with polls showing a close race between Vice President Kamala Harris and former President Donald Trump.
At the same time, Treasury yields have dropped after a sharp decline in US job openings in September. Since the Federal Reserve closely watches the job market to decide on interest rates, this data makes a 0.25% rate cut likely next week. Therefore, these combined factors have driven up gold prices as investors seek stability.
Impact of Mixed Economic Data on Gold Prices and Market Outlook
On the US front, the broad-based US dollar lost its recent strength, turning bearish as new data showed a mixed picture of the economy. US JOLTS Job Openings fell to 7.44 million in September, with August’s number revised down to 7.86 million from 8.04 million, hinting at a weaker labor market ahead of Friday’s Nonfarm Payrolls (NFP) report.
However, consumer confidence rose significantly, with the Conference Board’s index climbing to 108.7 in October from 98.7 in September, beating expectations of 99.5 and suggesting that consumers are feeling optimistic.
At the same time, the chances of a Fed rate cut have grown, with the CME Group’s Fed Watch tool now showing a 99.6% likelihood of a 0.25% cut next week, up from 92% on Tuesday, and a 76.6% chance for another cut in December.
Besides this, 10-year Treasury yields eased from 4.33% to 4.23%, providing further support to precious metals.
The mixed economic data, including falling job openings and rising consumer confidence, alongside expectations of a Fed rate cut, are likely to boost gold prices. Lower Treasury yields also support gold as a safe-haven asset amidst economic uncertainty.
Moving ahead, the attention now turns to Wednesday’s GDP report, expected to show 3% annual growth for Q3, and ADP employment data, which is forecast to dip from 143K to 115K, potentially raising questions about the upcoming NFP report.
GOLD (XAU/USD) – Technical Analysis
Gold currently trades at $2781.47, holding above the $2782.01 pivot point amid bullish momentum. Immediate resistance lies at $2790.05, with additional hurdles expected at $2798.12 and $2805.15.
This upward momentum is supported by a high Relative Strength Index (RSI) reading of 76.00, suggesting that gold is nearing overbought conditions. The 50-day Exponential Moving Average (EMA) at $2744.78 serves as a crucial support level and confirms the uptrend, providing a solid base for potential pullbacks.
A break above $2790.05 could signal further bullish advances toward $2805.15, yet caution is warranted given the elevated RSI. On the downside, immediate support is positioned at $2773.75, with further backing at $2764.12 and $2753.97.
A failure to hold these levels might indicate a bearish correction. Traders are advised to consider a selling entry below $2782, with a target of $2769 and a stop loss at $2790, aligning with technical resistance.
Gold remains above its pivot, but traders should remain cautious due to potential overbought conditions.
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AUD/USD Price Analysis – Oct 29, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair continued its bearish trend, dropping to around 0.6575. This decline is largely driven by renewed buying interest in the US Dollar (USD), supported by expectations of a less aggressive approach from the Federal Reserve regarding policy easing.
On the other hand, there’s growing speculation about a possible interest rate cut by the Reserve Bank of Australia (RBA).
This speculation is partly due to anticipated consumer inflation data for Australia, set to be released on Wednesday. Analysts expect the annual inflation rate for the September quarter to drop to 2.9%, the lowest since March 2021.
These factors are putting pressure on the Australian Dollar (AUD), contributing to the selling tone surrounding the AUD/USD pair.
Moving ahead, investors seem cautious ahead of important US economic reports this week, including the Advance Q3 GDP, the Personal Consumption Expenditures (PCE) Price Index, and the Nonfarm Payrolls (NFP) report.
US Dollar Gains Momentum on Fed Expectations and Deficit Concerns
On the US front, the recent buying of the US Dollar (USD) is supported by expectations that the Federal Reserve (Fed) will take a less aggressive approach to policy easing.
However, the recent macroeconomic data suggests that the US economy is performing well, leading to increased market confidence that the Fed may implement smaller interest rate cuts throughout the year. This optimism is helping to strengthen the US dollar.
Moreover, the increasing concerns over spending plans proposed by Vice President Kamala Harris and Republican nominee Donald Trump are raising worries about a larger budget deficit.
This has contributed to higher US Treasury bond yields, which further supports the US Dollar. These factors are putting downward pressure on the AUD/USD pair, dragging it lower as traders respond to the stronger USD and ongoing economic developments.
Australian Dollar Faces Pressure Amid Inflation Expectations and Economic Developments
On the AUD front, there are growing expectations that Australia’s consumer inflation rate will come in at 2.9% for the September quarter, the lowest it has been since March 2021.
This has led to speculation about a possible interest rate cut by the Reserve Bank of Australia (RBA), which is putting additional pressure on the Australian Dollar (AUD) and dragging down the AUD/USD pair.
On the positive side, the AUD is getting some support from news that China plans to approve the issuance of over ¥10 trillion in extra debt to boost its economy, potentially starting as soon as next week.
Traders are now keeping an eye on upcoming US economic data, including the Consumer Confidence Index and the Job Openings and Labor Turnover Survey (JOLTS), which will influence market sentiment.
AUD/USD – Technical Analysis
The Australian Dollar (AUD/USD) has seen a pullback, currently trading at $0.65649, marking a 0.27% decline. This downward momentum places the pair below key support and moving averages, indicating a bearish outlook in the short term.
Immediate resistance is found at $0.66097, and breaking above this could trigger a mild recovery, potentially guiding prices toward the next resistance levels at $0.66895 and $0.67227.
The pivot point rests at $0.66544, offering a significant threshold that traders will monitor closely. AUD/USD remains below its 50-day EMA, positioned at $0.66527, underscoring the continued bearish pressure.
The Relative Strength Index (RSI) is low at 28, signaling oversold conditions, which may lead to some short-term buying interest. However, the broader trend suggests caution until the pair crosses above the immediate resistance levels.
On the downside, if selling pressure intensifies, the pair could test support at $0.65498, followed by deeper support at $0.65092 and $0.64730. Traders looking to enter long positions might find buying opportunities above $0.65499, with a potential take-profit target near $0.66097 and a stop-loss set at $0.65088 to manage downside risk.
While oversold conditions suggest a possible bounce, the AUD/USD pair’s position below the pivot and 50-day EMA warrants a cautious approach. A decisive move above $0.66097 is necessary to alleviate some bearish sentiment and signal a potential recovery.
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USD/CAD Price Analysis – Oct 29, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair continued its upward trend, stabilizing near the 1.3890 level. However, the Canadian Dollar (CAD), heavily influenced by commodity prices, is under pressure from declining oil prices, which pushed the USD/CAD pair down. Meanwhile, the US Dollar gains strength, bolstered by rising US bond yields.
This uptick in yields is fueled by growing market sentiment favoring Former President Donald Trump in the upcoming US presidential election, along with expectations that the Federal Reserve may take a more cautious approach regarding future interest rate cuts.
Looking ahead, investors are exercising caution in anticipation of key US economic reports this week, including the Advance Q3 GDP, the Personal Consumption Expenditures (PCE) Price Index, and the Nonfarm Payrolls (NFP) report.
Impact of Oil Prices and Interest Rate Cuts on the USD/CAD Pair
West Texas Intermediate (WTI) oil is currently priced around $67.50 per barrel, showing a recent drop. This decrease is mainly because fears of a larger conflict in the Middle East have eased, as military actions have been limited.
However, tensions are still high, with Iran's Foreign Ministry spokesperson suggesting that Iran may respond to Israel's recent attacks on its military targets, mentioning the use of "all available tools," according to Reuters. These geopolitical issues continue to affect oil prices and, in turn, the value of the Canadian Dollar (CAD), which relies heavily on oil.
On the economic front, Bank of Canada (BoC) Governor Tiff Macklem recently talked about the decision to cut interest rates last week. He explained that these cuts are a response to the previous high rate hikes meant to control inflation.
Macklem also emphasized the need to find a "neutral rate," which is a level that doesn't either boost or slow down the economy. His comments suggest that the central bank is carefully watching economic conditions to balance supporting growth while keeping inflation in check.
Therefore, the decline in WTI oil prices may weaken the Canadian Dollar (CAD), potentially leading to upward pressure on the USD/CAD pair. Furthermore, the Bank of Canada's rate cuts could further support the US Dollar's strength against the CAD.
USD/CAD – Technical Analysis
The USD/CAD pair is trading at $1.38970, showing a slight uptick of 0.09% for the day. With immediate price action hovering around the $1.38851 mark, USD/CAD exhibits a bullish sentiment but faces key resistance levels ahead.
The pivot point at $1.39090 stands as an important threshold, with immediate resistance seen at $1.39325, followed by $1.39567, which could attract further buying interest if breached.
On the support side, the first level is positioned at $1.38669, close to the 50-day Exponential Moving Average (EMA) of $1.38612, which serves as a critical support line for this trend.
Further downside support sits at $1.38407 and $1.38133. A dip below $1.38407 could suggest a shift in the bullish momentum, potentially leading to further declines.
The Relative Strength Index (RSI) is reading at 62, indicating a mildly bullish stance but still short of overbought territory, which provides room for potential upward movement.
With the EMA supporting the current trend and RSI maintaining healthy levels, USD/CAD appears well-positioned for continued gains if it manages to break above the $1.39090 pivot.
Traders seeking an entry position may consider buying above $1.38852, with a take-profit target near $1.39299 and a conservative stop-loss at $1.38609 to hedge against sudden downside moves.
In summary, the USD/CAD outlook remains cautiously bullish, contingent upon a sustained move above $1.39090 to signal potential for further gains. Key resistance and support levels will guide the near-term direction as market participants weigh potential movements.
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GOLD Price Analysis – Oct 29, 2024
Daily Price Outlook
Gold prices (XAU/USD) prolonged their upward trend and remained well-bid around above the $2,750 mark.
However, the ongoing safe-haven demand driven by tensions in the Middle East and uncertainties surrounding the upcoming US elections is keeping interest in this precious metal alive. Nevertheless, several factors are limiting gold's upward movement.
On one hand, positive economic data from the US suggests a resilient economy, which supports expectations of smaller interest rate cuts from the Federal Reserve. This, in turn, bolsters US Treasury bond yields and increases demand for the US Dollar (USD).
As a result, traders are cautious about making fresh bullish bets on gold. Moreover, many investors are waiting for key US economic reports later this week.
Impact of US Dollar Strength and Economic Data on Gold Prices
On the US front, the broad-based US dollar managed to stop its previous downward rally and regained mild traction as positive economic data indicated that the economy remains resilient.
This development supports expectations for smaller interest rate cuts by the Federal Reserve (Fed). Meanwhile, investors are cautious ahead of important economic reports this week that could shed light on the Fed's future rate decisions.
Nevertheless, a recent decline in US Treasury bond yields triggered a pullback in the dollar from its highest level since July 30, allowing gold prices to attract some dip-buyers near the $2,750 mark.
Investors are now focusing on Tuesday’s economic reports, including the Conference Board's Consumer Confidence Index and the Job Openings and Labor Turnover Survey (JOLTS). These reports, along with other upcoming economic data, will influence the Fed's interest rate outlook and impact gold prices (XAU/USD).
Therefore, the recent dollar pullback and lower Treasury yields may provide gold prices with a temporary boost, attracting dip-buyers. However, uncertainty about future Fed rate decisions and key economic reports could lead to volatility and limit gold's upward momentum.
Impact of Political Uncertainty and Global Demand on Gold Prices
On the flip side, the upcoming US presidential election is creating a tense environment as Vice President Kamala Harris and Republican nominee Donald Trump are in a close race for the White House. This political uncertainty is adding volatility to the markets, as investors weigh potential outcomes.
Besides this, the US has issued a warning to Iran at the United Nations Security Council, threatening severe consequences if Iran engages in further aggressive actions against Israel. This follows recent strikes on military targets in Iran by Israel.
Meanwhile, China's gold consumption has decreased by 11.18% in the first three quarters of 2024 compared to the same period last year, as high gold prices have reduced demand for jewelry.
This decline in consumption may further impact global gold prices, adding another layer of complexity to the market dynamics.
Therefore, the political uncertainty surrounding the US presidential election and tensions with Iran could lead to increased market volatility, potentially boosting gold's appeal as a safe-haven asset. Besides this, China's declining gold consumption may further weigh on global gold prices in the near term.
GOLD (XAU/USD) – Technical Analysis
Gold prices are experiencing steady upward momentum, trading around $2,751.93 per ounce, a 0.34% increase on the day. The immediate resistance level lies at $2,757.89, and a successful breach of this barrier could push gold toward the next resistance at $2,771.04. If the bullish sentiment continues, traders may look for gains targeting the higher resistance at $2,778.16.
The pivot point is set at $2,764.23, a crucial marker that traders should watch closely. A sustained move above this pivot would reinforce a bullish outlook, potentially establishing new support levels.
The 50-day EMA, currently positioned at $2,737.06, provides further support and signals that the overall trend remains upward. With gold trading above this level, the technical landscape favors a bullish bias.
The Relative Strength Index (RSI) stands at 64, indicating positive momentum but staying below the overbought threshold, suggesting room for further gains without an immediate pullback.
If prices encounter selling pressure, initial support rests at $2,748.71, followed by a more substantial support level at $2,740.15. Should the decline extend, $2,730.18 offers additional support, cushioning any downside risk.
For those entering positions, the outlook remains bullish above $2,745, with suggested profit-taking around $2,765 and a stop-loss set near the 50-day EMA at $2,737.06.
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GOLD Price Analysis – Oct 28, 2024
Daily Price Outlook
Gold prices (XAU/USD) have struggled to stop its downward trend but remined bearish around $2,732. However, the US dollar is gaining strength, driven by rising Treasury yields, which was seen as a key factor putting pressure on gold.
Many investors are shifting their expectations, anticipating only modest rate cuts from the Federal Reserve, which further weighs on the precious metal. Apart from this, the risk-on market sentiment has also limited demand for gold as a safe-haven asset.
On the flip side, losses in gold might be limited due to ongoing tensions in the Middle East and concerns surrounding the upcoming US elections, which are increasing demand for safe-haven assets and providing some support for prices.
Looking forward, traders appear hesitant to make strong moves in gold as they await several key US economic reports this week, including the Q3 GDP, the PCE Price Index, and the Nonfarm Payrolls (NFP) report.
Strengthening US Dollar and Economic Optimism Put Pressure on Gold Prices
On the US front, the broad-based US dollar is edging higher amid growing expectations that the Federal Reserve will opt for smaller rate cuts. Recently, the dollar reached its highest level since July 30, buoyed by market speculation for a more measured approach to easing monetary policy.
According to the CME Group's FedWatch Tool, traders have nearly fully priced in a standard 25 basis points rate cut by the Fed at its upcoming November meeting.
Looking at US economic data, recent indicators have reinforced this bullish outlook. In September, Durable Goods Orders fell by 0.8%, which is better than the anticipated 1% drop, and orders excluding transportation increased by 0.4%.
Meanwhile, the University of Michigan’s Consumer Sentiment Index for October rose to a six-month high of 70.5, surpassing both the preliminary estimate and last month’s figure.
Therefore, the bullish US dollar, driven by rising Treasury yields and positive economic data, makes gold less attractive as a non-yielding asset. Consequently, this upward pressure on the dollar and expectations of smaller Fed rate cuts can depress gold prices.
Geopolitical and Economic Shifts Could Weaken Gold's Safe-Haven Appeal
On the geopolitical front, Iran announced on Saturday that it would refrain from retaliating against Israeli airstrikes on its military targets, provided a ceasefire agreement is reached for the ongoing conflict in Gaza and Lebanon.
This statement suggests that Iran may prioritize diplomacy over military action to stabilize the situation.
Meanwhile, China is taking steps to boost its economy as it enters the fourth quarter. On Monday, Vice Minister of Finance Liao Min stated that the country will enhance its macroeconomic policies to support economic recovery.
This indicates that China is actively seeking ways to stimulate its economy and strengthen growth as it faces various challenges.
Hence, Iran's restraint in retaliation ease geopolitical tensions, reducing safe-haven demand for gold. Meanwhile, China's efforts to stimulate economic growth could strengthen the yuan, further pressuring gold prices as investors shift towards riskier assets and away from precious metals.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is experiencing a mild downturn as it tests the critical support level near $2,724.61. The 50-day Exponential Moving Average (EMA) at $2,732.56 is in close alignment with the current price, acting as a pivotal point that could determine the next directional move.
The Relative Strength Index (RSI) stands at 48, signaling a neutral momentum and leaving room for potential upside if the price can hold above the $2,726 pivot level. A solid rebound from this area could see Gold challenging immediate resistance at $2,741.59, with further targets set at $2,750.07 and $2,758.54.
On the downside, a decisive break below $2,724.61 could expose Gold to lower support levels at $2,717.49 and $2,708.90, reflecting potential selling pressure. Given the global economic uncertainty, Gold's price action remains sensitive to shifts in investor sentiment, which often directs funds toward safe-haven assets.
For traders considering entry, a buy-limit order near $2,726 could yield a favorable risk-to-reward scenario, targeting the $2,741 resistance. This setup anticipates a potential bounce while safeguarding against deeper declines with a stop loss set just below $2,717. Overall, maintaining a watch on key levels around the pivot and EMA will be crucial for gauging further price movements.
Conclusion: Gold’s price trajectory hinges on the $2,726 pivot level, with a potential upside to $2,741 if support holds. A break below this level could trigger further downside, while a buy-limit entry at $2,726 offers an opportunity for gains with limited risk.
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GBP/USD Price Analysis – Oct 28, 2024
Daily Price Outlook
During the European trading session, the GBP/USD pair reversed its early bearish trend, gaining positive momentum around the 1.2982 mark and reaching an intraday high of 1.2988.
This upward movement likely reflects a weakening U.S. Dollar as investors shift their focus to key U.S. economic data releases scheduled for this week.
Moreover, the British Pound outperforms its major counterparts as markets anticipate the UK’s Autumn Forecast Statement, set for release on Wednesday.
On the flip side, the gains in the GBP/USD pair may be limited, as Labour's first budget is unlikely to propose significant spending increases due to the ongoing challenge of high inflation. This cautious outlook could undermine the GBP, as investors remain wary of the government's capacity to effectively address inflation concerns.
Impact of Economic Uncertainty on GBP/USD Performance
Despite the Pound Sterling performing well against most major currencies on Monday, it is still facing pressure ahead of the UK's Autumn Forecast Statement, set for Wednesday.
The Labour Party's first budget is unlikely to include major spending increases due to high inflation. The Chancellor of the Exchequer has promised to keep election commitments, which means no increases in income tax or national insurance, but there may be a rise in employers' national insurance by up to 2 percentage points.
Moreover, the Labour Party is expected to offer significant support for making housing more affordable.
Meanwhile, speculation about the Bank of England (BoE) cutting interest rates in its remaining meetings this year could dampen the appeal of the Pound Sterling.
Market expectations are leaning towards a 25 basis point rate cut in November and December, following dovish comments from BoE Governor Andrew Bailey during discussions at the IMF meeting last week.
Bailey noted that while disinflation is occurring more quickly than anticipated, there are still concerns about potential structural changes in the economy. This outlook could contribute to a cautious sentiment among investors regarding the Pound's future performance.
Therefore, the uncertainty surrounding the UK's Autumn Forecast Statement and potential interest rate cuts by the Bank of England may weaken the GBP/USD pair. Investors' cautious sentiment could lead to a decline in the Pound's value against the U.S. Dollar.
Impact of US Economic Data and Political Uncertainty on GBP/USD Performance
On the US front, the US dollar lost some of its traction but it is still near a three-month high of around 104.60. Investors are particularly interested in the preliminary Q3 Gross Domestic Product (GDP) and the October Nonfarm Payrolls (NFP) data, which will provide insights into the current state of economic growth and labor demand.
These economic indicators will heavily influence market expectations regarding the Federal Reserve's interest rate outlook for the rest of the year.
However, the Fed began its policy-easing cycle with an unusual 50 basis point interest rate cut in September due to concerns about rising economic risks, while maintaining confidence that inflation will stay on track to meet its 2% target. Traders anticipate further cuts of 25 basis points in November and December, as indicated by the CME FedWatch tool.
Moreover, the uncertainty surrounding the upcoming US presidential election is likely to support the US Dollar.
Financial experts discussed the potential impact of the election during last week's International Monetary Fund (IMF) meetings, particularly regarding former President Donald Trump's promise to raise tariffs, which could increase global supply chain costs.
Therefore, the mild bearish US Dollar, combined with key economic data influencing Federal Reserve rate expectations, could support the GBP/USD pair. However, ongoing uncertainties related to the US presidential election create volatility, impacting the Pound's strength against the Dollar.
GBP/USD – Technical Analysis
GBP/USD has resumed a downward trajectory after hitting a resistance level at $1.2975, with further declines pushing it towards the $1.2932 level. The British pound is currently trading below the 50-day Exponential Moving Average (EMA) at $1.2965, signaling bearish momentum.
A break below the $1.2950 pivot point indicates potential for further downside movement, particularly as the Relative Strength Index (RSI) stands at 36, showing weakened buying interest and potential oversold conditions in the near term.
Immediate resistance is at $1.2956, with the next levels at $1.2975 and $1.3012. On the downside, immediate support lies at $1.2932, followed by $1.2921 and $1.2886. With the RSI failing to hold above 40 and the price remaining under the 50 EMA, bearish sentiment could persist, provided there is no significant reversal above the $1.2956 level.
If GBP/USD breaks below the $1.2921 support level, it could extend losses toward the next key support at $1.2886, reflecting potential downside momentum in line with current market sentiment.
Conclusion: GBP/USD is poised for further declines, with key support at $1.2921 and immediate resistance at $1.2956. Sustained trading below the pivot point at $1.2950 reinforces the bearish outlook, while a break below $1.2921 could signal continued downside.
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EUR/USD Price Analysis – Oct 28, 2024
Daily Price Outlook
The EUR/USD currency pair continued its upward trend, attracting strong bids around the 1.0820 level as the US dollar lost traction and dropped from an almost three-month high. However, the outlook for the US dollar remains strong amid risk-off market sentiment ahead of the US presidential election.
Meanwhile, the Euro is trading sideways ahead of a data-packed week, during which traders will receive key economic growth and inflation figures for both the US and the Eurozone.
Economic Outlook for the Eurozone and Its Impact on the EUR/USD Pair
On the EUR front, the shared currency is largely moving sideways as traders anticipate a busy week of economic data, including growth and inflation figures for both the United States and the Eurozone. These economic indicators are important because they often influence interest rate decisions.
In the Eurozone, investors are particularly focused on economic growth data, as inflation is expected to stay close to the European Central Bank's (ECB) target of 2%. Economists project the Eurozone economy will grow by 0.8% year-on-year, an increase from the 0.6% seen in the second quarter, with growth expected to hold steady at 0.2% compared to the previous quarter.
Germany, the largest economy in the Eurozone, is anticipated to see a decline of 0.3% in Q3, which could weigh on overall growth. In light of this, ECB policymaker and Bundesbank President Joachim Nagel highlighted the importance of implementing a growth package recently announced by the German government to support the economy.
He noted that while a significant 50-basis points interest rate cut might be considered in December, decisions will depend on several factors, including the US presidential election results and inflation data.
Therefore, the anticipated economic growth and inflation data in the Eurozone could lead to fluctuations in the EUR/USD pair. If growth exceeds expectations, it may strengthen the Euro, while weak German performance could weigh on the Euro, leading to volatility.
Impact of US Economic Outlook on the EUR/USD Pair
On the US front, the US dollar has dropped and showed mild bearish trend. Despite this decline, the outlook for the US Dollar remains strong as investors adopt a risk-averse stance with the US presidential election just a week away. Central bankers discussed the potential implications of a former President Donald Trump victory over current Vice President Kamala Harris during panels at the recent IMF meeting.
Many traders view this scenario positively for the US Dollar, as Trump has promised to increase tariffs by 10% on all countries except China, which would face even steeper tariffs of 60%.
In addition to election-related uncertainties, the US Dollar's direction will be influenced by a series of economic data releases this week. Market participants are particularly focused on the Job Openings and Labor Turnover Survey (JOLTS) and the Nonfarm Payrolls (NFP) data, as these will provide insights into job demand in the economy.
Plus, Q3 GDP data will help gauge the current health of the US economy, further influencing the dollar's value as traders seek cues for future market movements.
Therefore, the US Dollar's mild bearish trend and upcoming economic data releases may create volatility in the EUR/USD pair. If US data shows strong job demand or GDP growth, it could strengthen the dollar, potentially leading to a decline in the Euro's value.
EUR/USD – Technical Analysis
EUR/USD is experiencing bearish momentum, with the currency pair trading below its 50-day Exponential Moving Average (EMA) of $1.08085. The pivot level for today is at $1.07964, just above the current price. This positioning suggests that the pair is under selling pressure, with immediate resistance located at $1.08152, followed by stronger resistance at $1.08388 and $1.08655.
The Relative Strength Index (RSI) currently stands at 34, reflecting bearish momentum and indicating that the pair may still have room to the downside before reaching oversold conditions. A sustained move below the pivot and the 50 EMA could expose EUR/USD to immediate support at $1.07615, with additional downside targets at $1.07139 if selling pressure intensifies.
For traders considering short positions, an entry below $1.07957 could present a favorable opportunity, with a target set at $1.07613. A stop-loss placed slightly above the immediate resistance level at $1.08148 would help limit risk, ensuring a balanced risk-to-reward setup.
Overall, as the EUR/USD pair trades below its pivot and the 50 EMA, the outlook remains bearish. Market participants should monitor the pair’s reaction to the support at $1.07615 closely, as a break could accelerate further downside movement.
Conclusion: EUR/USD’s current positioning below the pivot and 50 EMA signals continued bearishness. Traders may consider short entries below $1.07957, targeting $1.07613, with a protective stop-loss near $1.08148.
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Daily Price Outlook
During the European trading session, the EUR/USD currency pair is steady around 1.0830, continuing its recovery from Thursday. This rise is mainly due to a drop in the US Dollar. However, the Euro's gains may not last as the latest preliminary PMI report shows that economic activity in the Eurozone is still struggling, with the flash Composite PMI falling to 49.7 in October.
Meanwhile, the manufacturing sector has been contracting for 28 months, remaining below the key 50 mark. Although the service sector saw some growth, it was slower than expected. This ongoing decline in business activity raises concerns about the Eurozone's economic growth, leaving many unsure about the future.
Eurozone Economic Decline and ECB Rate Cut Speculation Weigh on Euro, Impacting EUR/USD Pair
As we mentioned, the gains in the shared currency might be short-lived as the latest PMI report indicates that the Eurozone's economic activity continues to decline. The flash Composite PMI dropped to 49.7 in October, showing that the manufacturing sector has been shrinking for 28 months, remaining below the crucial 50 mark that signals growth.
Although the service sector saw some unexpected growth, it was slower than hoped. This ongoing decline in business activity raises concerns about the Eurozone's economic future. Furthermore, there is increasing speculation that the European Central Bank (ECB) may implement a larger-than-usual interest rate cut in its December meeting, which could further weigh down the Euro.
This year, the ECB has already lowered its Deposit Facility Rate three times by 25 basis points, bringing it to 3.25%. Market expectations are now leaning towards a potential 50 basis point cut in December, fueled by comments from some ECB policymakers who expressed concerns about inflation staying below the bank's 2% target.
Mario Centeno, the Governor of the Bank of Portugal and an ECB policymaker noted that a 50 basis point cut is a possibility and warned of growing risks to economic growth.
Meanwhile, data released on Friday showed that the German IFO Business Climate, Current Assessment, and Expectations for October were better than expected. However, improving sentiment may not lead to a significant economic revival due to overall weak business activity.
Therefore, the ongoing decline in Eurozone economic activity and speculation of a larger interest rate cut by the ECB could weaken the Euro, putting downward pressure on the EUR/USD pair. This uncertainty may lead to increased volatility and potential losses for Euro traders.
US Dollar Recovery Supported by Fed Expectations and Economic Data, Impacting EUR/USD Pair
On the US front, the broad-based US Dollar is seeing a recovery, supported by several factors, including growing expectations that the Federal Reserve (Fed) will take a gradual approach to cutting interest rates and increasing hopes that former President Donald Trump could win the upcoming presidential election against Vice President Kamala Harris.
Investor confidence in the Fed's cautious policy is bolstered by positive economic data, including strong Nonfarm Payrolls (NFP) and Retail Sales figures for September, as well as better-than-expected flash S&P Global PMI data for October, indicating sustainable economic growth.
Moving ahead, attention will turn to the US Durable Goods Orders data for September, set to be released at 12:30 GMT, which is expected to show a decline of 1% after remaining unchanged in August.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.08213, down by 0.06% as the currency pair struggles to maintain momentum near the $1.08465 pivot point. Immediate support stands at $1.08291, a level crucial for short-term sentiment.
Should EUR/USD breach this level, it could extend the bearish move toward the immediate support target of $1.07712, with a further downside likely to test $1.07486 if selling pressure intensifies.
On the upside, EUR/USD will face strong resistance at $1.08692, a level reinforced by the 50-day EMA, which is currently sitting at $1.08092. This EMA acts as a significant pivot, potentially limiting any bullish moves unless there is a sustained break above it.
Additional resistance can be found at $1.08880, providing a key barrier for bullish sentiment should the pair reverse.
The RSI reading of 59 signals modestly bullish momentum, suggesting the pair may be on the verge of testing higher resistance levels. However, the bearish pressure currently weighs heavier as the price action remains below the pivotal $1.08465 level.
Traders may want to consider a short position below $1.08288, with a take-profit target of $1.07976 and a stop-loss at $1.08465.
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