EUR/USD Price Analysis – Jan 06, 2025
Daily Price Outlook
During the European trading session on Monday, the EUR/USD currency pair edged higher, staying bullish around 1.0347, despite facing some negative factors. The pair gains could be limited as many analysts predict that it could drop further.
This expectation is mainly due to the different paths the Federal Reserve (Fed) and the European Central Bank (ECB) are taking with their monetary policies. The Fed is likely to stay on its tightening course, while the ECB might face challenges in keeping up.
Moreover, the Eurozone Sentix Investor Confidence Index showed a decline, which adds to the negative sentiment surrounding the Euro.
The economic outlook for Germany, a key player in the Eurozone, is also getting worse, which could further drag down the Euro. This situation could lead to more bearish pressure on EUR/USD in the coming days.
Traders will be watching closely for economic data later today, including the HCOB Composite Purchasing Managers' Index (PMI) for the Eurozone and the preliminary Consumer Price Index (CPI) data for Germany.
These reports could provide more clues about the future direction of the Euro and whether the expected bearish trend for EUR/USD will continue.
ECB's Easing Stance and Eurozone Economic Weakness Weigh on EUR/USD
On the EUR front, the European Central Bank (ECB) policymakers are leaning towards continuing their current approach of easing monetary policy.
The markets have already priced in a 113 basis point (bps) cut in ECB interest rates this year, which means at least four rate cuts of 25 bps each.
This outlook is due to rising concerns that inflation in the Eurozone is still far from the ECB's target of 2%.
In an interview on Thursday, ECB Governing Council member Yannis Stournaras from the Bank of Greece suggested that the ECB’s base interest rates should be reduced to around 2% by autumn.
This indicates that the ECB could lower its Deposit Facility rate at each of the next four meetings, reflecting a cautious approach to tackle inflation and economic challenges.
On the data front, the latest data from the Eurozone Sentix Investor Confidence Index showed a slight decline in January, dropping to -17.7 from -17.5 in December.
Additionally, the Current Situation gauge, which reflects the overall economic mood, hit its lowest point since October 2022, falling to -29.5 from -28.5 in December.
Sentix warned that the economic situation in the Eurozone is worsening, with Germany’s recession weighing heavily on the region’s economic growth.
Therefore, the ECB's expected rate cuts and the weakening economic outlook in the Eurozone, particularly in Germany, could put downward pressure on the Euro. This may lead to a bearish sentiment for EUR/USD, potentially causing the pair to decline further.
US Dollar Strengthened by Fed's Cautious Approach to Rate Cuts
On the US front, the broad-based US dollar has been supported by the Federal Reserve’s more cautious stance on rate cuts. After three consecutive rate reductions, the Fed is expected to pause its easing cycle during the January meeting.
The latest projections from the Fed’s Summary of Economic Projections show that policymakers anticipate the Federal Funds Rate will reach 3.9% by the end of the year, with just two rate cuts expected in 2025.
Fed officials are signaling a more careful approach to further rate reductions. Richmond Fed President Thomas Barkin noted that the policy rate should remain high until there is more confidence that inflation will return to the Fed’s 2% target. This indicates that the Fed is in no rush to lower rates quickly, as inflation remains a concern.
Moreover, other Fed officials, including Governor Adriana Kugler and San Francisco Fed President Mary Daly, have emphasized the difficult balancing act the US central bank faces.
They are trying to reduce rates without triggering runaway inflation, which could weigh on the economy. This cautious approach adds to the overall strength of the US dollar as markets expect slower and more gradual rate cuts in the near future.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.03107, marking a slight increase of 0.03% during the day as the pair consolidates near critical levels. The 4-hour chart indicates a cautious market sentiment, with the price testing immediate support at $1.02579.
This support is crucial to preventing further downside, as a break below this level could expose the pair to deeper retracements toward $1.02109 and $1.01664.
On the upside, the pair faces immediate resistance at $1.03929, followed by $1.04582 and $1.05136. A breakout above $1.03929 could spark bullish momentum, potentially targeting the higher resistance levels.
However, with the price currently below the 50-day EMA at $1.03769, bearish sentiment remains dominant in the near term.
The Relative Strength Index (RSI) stands at 41, reflecting subdued momentum and hinting at potential oversold conditions.
Traders may focus on the pivot point at $1.03453, which acts as a key level for determining the next directional bias.A sustained move below this pivot could solidify the bearish trend, making short positions favorable.
For intraday trading, selling below $1.03461 with a target of $1.02586 appears prudent, while a stop-loss at $1.03944 safeguards against unexpected reversals.
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- GOLD Price Analysis – Jan 06, 2025
GOLD Price Analysis – Jan 06, 2025
Daily Price Outlook
Gold price (XAU/USD) failed to stop its bearish trend and remained well offered around 29.55 level, hitting the intra-day low of 29.41 level.
However, the reason for its downward trend can be attributed to the bullish US dollar, which gained traction in the wake of the Federal Reserve's (Fed) hawkish signal that there would be fewer rate cuts in 2025.
Moreover, the upticks in the US dollar were further bolstered by the optimism over US President-elect Donald Trump's expansionary policies.
On the other hand, the geopolitical risks from the protracted Russia-Ukraine war and tensions in the Middle East, along with concerns about Trump's tariff plans, should limit losses for the safe-haven Gold price.
Traders now look forward to the release of the final US Services PMI and Factory Orders data for some impetus later during the North American session.
Meanwhile, the stronger-than-expected Caixin China Services PMI signals economic growth, supporting risk appetite and reducing demand for safe-haven assets like gold.
Meanwhile, the disappointing Manufacturing PMI adds uncertainty, but overall, gold remains under pressure from global economic optimism.
US Dollar Strength and Economic Resilience Weigh on Gold Prices Amid Geopolitical Tensions
On the US front, the broad-based US dollar has been flashing green as it remains close to a two-year high. This strength is driven by the Federal Reserve's (Fed) recent hawkish signals, suggesting fewer rate cuts in 2025.
Additionally, optimism about US President-elect Donald Trump's expansionary policies continues to support the dollar. As a result, the strong dollar is putting pressure on gold, which struggles to perform well when the dollar is rising.
On the data front, the US economy showed signs of resilience with the ISM Manufacturing PMI improving to 49.3 in December, better than the market expectation of 48.4.
This positive data, alongside lower-than-expected Initial Jobless Claims for the week ending December 27, suggests that the economy is doing better than anticipated.
Richmond Fed President Thomas Barkin also emphasized that the Fed should maintain restrictive policy rates until inflation moves closer to the 2% target. These factors combined are helping to support the US dollar.
Apart from this, the ongoing escalating geopolitical tensions, such as the ongoing Russia-Ukraine conflict and concerns in the Middle East, continue to support the US dollar as a safe-haven currency.
The uncertainty caused by these events, along with caution about President-elect Trump's economic policies, is keeping the dollar strong.
Traders remain cautious about future rate cuts due to persistent inflationary pressures, with fewer expected in 2025. This combination of factors is likely to keep the US dollar strong in the near term, further weighing on gold prices.
Therefore, the strength of the US dollar, driven by the Fed's hawkish stance, positive economic data, and geopolitical tensions, is putting downward pressure on gold.
China's Economic Growth and Its Potential Impact on Gold Prices
On the China front, the Caixin China Services Purchasing Managers' Index (PMI) rose to 52.2 in December, up from 51.5 in November, showing the fastest growth in the services sector since May. This exceeded market expectations of 51.7, suggesting strong performance in the services industry.
However, the Caixin Manufacturing PMI dropped unexpectedly to 50.5 in December, down from 51.5 in November, which fell short of market forecasts. This highlights mixed signals in China’s economic recovery, with the services sector performing well, but manufacturing facing challenges.
In addition, the Shanghai Stock Exchange has committed to further opening up capital markets during a meeting with foreign institutions.
This move aims to attract more foreign investment into China, supporting economic growth. Despite some challenges, China’s economy remains resilient, supported by solid fundamentals that help it navigate a complex global environment.
Looking ahead, the People's Bank of China (PBoC) is expected to cut interest rates at an appropriate time this year, which could help stimulate further growth.
The National Development and Reform Commission (NDRC) expressed confidence in continuing the recovery in 2025, with plans to increase funding through ultra-long treasury bonds to support key programs. These efforts are expected to maintain steady consumption growth in China throughout the year.
Therefore, the positive growth in China’s services sector and plans for economic support could strengthen investor confidence, leading to a potential rise in demand for gold as a safe-haven asset. However, any rate cuts from China’s central bank may also weigh on gold's appeal.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,631.54, down 0.31% on the day, struggling to maintain momentum as the US dollar and Treasury yields remain elevated.
The immediate pivot point at $2,639.26 acts as a critical resistance level, with further upside capped by $2,662.22, $2,675.23, and $2,692.86.
Conversely, key support levels are positioned at $2,621.73, $2,605.08, and $2,583.91, where buyers may step in.
The RSI currently reads 46, reflecting neutral momentum but leaning towards bearish sentiment. The 50 EMA at $2,626.94 underscores near-term resistance, aligning with the pivot point.
Gold’s inability to decisively break above $2,639 suggests sellers are retaining control, with a potential move toward $2,614 if the downward trend persists.
From a technical perspective, the broader outlook remains bearish below $2,639, with the descending trendline and weakening RSI pressuring further declines.
A break below $2,621 could accelerate selling toward $2,605 and $2,583, marking critical downside targets. However, a bullish recovery would require a sustained push above $2,662 to invalidate the current bearish setup.
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- GBP/USD Price Analysis – Jan 06, 2025
GBP/USD Price Analysis – Jan 06, 2025
Daily Price Outlook
During the European trading session, the GBP/USD currency pair has been gaining momentum, holding steady around the 1.2472 mark and reaching an intraday high of 1.2492.
The recent upward movement can largely be attributed to the ongoing recovery in the British Pound (GBP), as traders remain cautious about the US Dollar’s (USD) potential strength. Despite this, the upside for GBP/USD might be limited due to the hawkish stance from the Federal Reserve (Fed).
Federal Reserve has already reduced interest rates by one percentage point since September 2024 and is expected to slow down further rate cuts this year.
This continues to provide support for the USD. Investors will be keeping an eye on the upcoming speech from Fed Governor Lisa Cook later today, as her comments may offer more insights into the central bank's rate decisions moving forward.
Meanwhile, the Pound faces additional pressure from growing dovish expectations surrounding the Bank of England (BoE). The markets are now pricing in a 60 basis point interest rate cut by the BoE this year, up from 53 bps just a week ago.
These factors are weighing on the GBP, potentially limiting the scope for further recovery. As the day progresses, market participants will be closely watching both central banks for any updates that could shift the outlook for the GBP/USD pair.
BoE's Dovish Outlook and Its Impact on the Pound Sterling (GBP)
On the GBP front, the rising expectations for a more dovish stance from the Bank of England (BoE) could put pressure on the British Pound (GBP).
The market is now expecting nearly 60 basis points (bps) of interest rate cuts from the BoE this year, up from 53 bps in late December. This suggests that investors are becoming more cautious about the BoE's ability to support the Pound in the coming months.
Matthew Ryan, head of market strategy at Ebury, mentioned that BoE policymakers seem to be divided on the future path for UK interest rates.
This division reflects the complex situation in the UK economy. While consumer demand remains fragile, other factors, like the government's Autumn Budget and potential tariff proposals from Trump, are adding inflationary pressure, making it harder to find a clear direction.
These mixed signals from the BoE make the outlook for the Pound uncertain. While weaker consumer demand suggests a need for lower interest rates, inflationary concerns might prevent the central bank from acting too quickly.
As a result, the GBP could face challenges if investors continue to price in a slower pace of rate cuts or even potential rate cuts later this year.
GBP/USD – Technical Analysis
GBP/USD is trading at $1.24409, up 0.19% for the day as the pair shows signs of consolidation near its pivot point at $1.24787.
The 4-hour chart reflects cautious optimism, but the broader trend remains under pressure as the price trades below the 50-day EMA at $1.25095, signaling bearish momentum in the near term.
Immediate support is located at $1.24089, which is critical for maintaining stability. A break below this level could drive the pair lower toward $1.23494 and $1.23014, signaling deeper retracements.
Conversely, resistance stands at $1.25601, with additional barriers at $1.26142 and $1.26639. A breakout above $1.25601 could trigger a bullish move, but such a scenario remains contingent on a sustained push above the pivot point.
The Relative Strength Index (RSI) at 44 indicates weak momentum, leaning slightly toward bearish sentiment. This aligns with the broader technical outlook, suggesting that selling opportunities below the pivot may yield better risk-reward dynamics.
For intraday traders, selling below $1.24785, with a target of $1.24097, appears prudent, while a stop-loss at $1.25126 limits potential losses in case of a reversal.
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EUR/USD Price Analysis – Jan 03, 2025
Daily Price Outlook
During the European trading session, the EUR/USD currency pair started the 2025 trading year with a sharp decline, dropping by 0.8% and reaching the 1.0250 level, marking its lowest point since November 2022, a nearly 26-month low.
The drop was driven by disappointing European Manufacturing Purchasing Managers Index (PMI) data, which came in below expectations.
This added to the pressure on the euro, as traders were already feeling uneasy after dovish comments from European Central Bank (ECB) policymaker Yannis Stournaras later in the day.
On the flip side, the US dollar continued its upward momentum, climbing to a fresh multi-year high of 109.56 following the release of the latest US Jobless Claims data.
The combination of weaker economic data from Europe and a stronger dollar kept the EUR/USD pair firmly on the back foot, with traders closely monitoring upcoming developments for any signs of a reversal.
EUR/USD Under Pressure Amid Weaker European Data, Dovish ECB Outlook, and Rising Petrol Prices
On the EUR front, the European Manufacturing Purchasing Managers Index (PMI) data missed expectations on Thursday, further adding to the pressure on the euro.
This was followed by a dovish comment from European Central Bank (ECB) policymaker Yannis Stournaras, who stated that the ECB plans to gradually lower interest rates through 2025. He suggested that rates could be around 2% later this year, which signals a more cautious approach from the ECB.
With the Federal Reserve expected to reduce interest rates more slowly than initially anticipated in 2025, the interest rate gap between the Euro and the US dollar is likely to grow, putting additional downward pressure on EUR/USD throughout the year.
This has led some analysts to predict that the euro could reach parity with the dollar in the near future.
In addition, the Pan-European PMI data showed a slight decline in December, coming in at 45.1, just below the expected 45.2.
While the data wasn’t a huge market mover, it highlighted the growing chance that the ECB may speed up its rate cuts to help the struggling European economy.
At the same time, rising petrol prices, reaching two-year highs, are adding to the challenges in Europe. Together, these factors are making it difficult for the euro to gain strength, keeping the pressure on EUR/USD in the long term.
Therefore, the combination of weaker European economic data, dovish ECB signals, and rising petrol prices is likely to keep the EUR/USD pair under pressure.
As interest rate differentials widen, the euro could continue to struggle, possibly pushing EUR/USD towards parity with the dollar.
EUR/USD – Technical Analysis
EUR/USD is trading at 1.0281, down 0.21% as bearish sentiment prevails, with the pair slipping below its pivot point at 1.02977.Immediate resistance is positioned at 1.03399, followed by higher levels at 1.03708 and 1.04122.
On the downside, support is found at 1.01664 and extends to 1.01308, underscoring critical zones for potential rebounds.
The RSI is at 30, signaling oversold conditions, which could attract short-term buyers, though caution is advised as bearish momentum remains dominant.
The pair is trading well below its 50-day EMA at 1.03862, reinforcing the bearish trend and suggesting a challenge to sustain any recovery above key resistance levels.
For a bullish reversal, EUR/USD needs to reclaim the pivot point at 1.02977, which could target the first resistance at 1.03399.
However, failure to hold support at 1.01664 may trigger further declines, exposing the pair to lower levels at 1.01308 or below.
Market participants should monitor price action near the pivot and RSI for signs of a rebound or continued downward pressure.
The current technical setup favors a cautious approach as EUR/USD hovers near critical thresholds.
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S&P500 (SPX) Price Analysis – Jan 03, 2025
Daily Price Outlook
The S&P 500 index is currently facing significant losses, dropping to the 5,868 level and hitting an intra-day low of 5,829.
This downturn marks a sharp shift from its previous bullish performance and has raised concerns among investors.
The bearish trend can be attributed to a combination of factors, including geopolitical tensions, economic data, and uncertainty surrounding future Federal Reserve policies.
Geopolitical Instability Driving Bearish Performance in the S&P 500
However, the major reason behind the bearish performance of the S&P 500 is the ongoing geopolitical instability, particularly the escalating tensions in the Middle East and the ongoing Russia-Ukraine conflict.
These events are creating uncertainty, leading investors to shift their focus toward safe-haven assets like gold and the US dollar. As global risks rise, market sentiment tends to sour, causing stocks in broad indices like the S&P 500 to face significant declines.
These geopolitical risks are not only creating volatility in specific sectors but also clouding the global economic outlook.
The uncertainty surrounding these events makes it difficult for investors to gauge the future direction of the market, resulting in heightened caution and risk aversion.
As a result, investors are pulling back from riskier assets, contributing to the bearish movement of the S&P 500.
US Economic Uncertainty and Strong Dollar Contributing to S&P 500's Bearish Outlook
In addition to geopolitical tensions, there are growing concerns about the state of the US economy. The Federal Reserve's recent projections have raised alarm bells, as they indicate fewer rate cuts in 2025 due to ongoing inflationary pressures.
This uncertainty surrounding future monetary policy has led to a cautious approach among investors. When inflation remains persistent, the central bank may opt for a more aggressive stance on interest rates, which could further weigh on stocks.
Furthermore, positive job data, such as the recent lower-than-expected Jobless Claims report, has led to a stronger US dollar, which, while good for the greenback, is exerting downward pressure on assets like the S&P 500.
As the dollar strengthens, it puts a strain on the global demand for US-based assets, which is another contributing factor to the index’s bearish performance.
S&P 500 – Technical Analysis
The S&P 500 (SPX) is trading at 5868.56, down 0.22%, as it struggles to recover above its pivot point of 5933.60.
The index remains under bearish pressure, with immediate resistance levels at 6011.99 and 6099.55.
On the downside, critical support levels are at 5770.88, 5696.90, and 5617.62, which may help stabilize the index if selling pressure persists.
Technical indicators suggest cautious sentiment. The RSI at 38 indicates oversold conditions, potentially attracting short-term buyers, though a sustained reversal remains uncertain. The 50-day EMA at 5970.89 acts as a key resistance level, reflecting the ongoing downward bias.
A move above the immediate support at 5770.88 could shift the outlook toward consolidation.
However, for a decisive shift to bullish momentum, the SPX must break and sustain above the pivot point at 5933.60. Failure to hold support at 5770.88 may lead to extended losses toward 5696.90 or lower.
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- GOLD Price Analysis – Jan 03, 2025
GOLD Price Analysis – Jan 03, 2025
Daily Price Outlook
Gold prices (XAU/USD) sustained their bullish trend and are still flashing green around the 2,665 level, marking their fourth consecutive session of gains.
This steady upward momentum has been a highlight of 2024, with gold soaring over 27%, its best annual performance since 2010. The ongoing rally is largely driven by strong demand for safe-haven assets, especially with the ongoing geopolitical tensions in the Middle East and the long-standing Russia-Ukraine conflict.
On the flip side, the US Dollar Index (DXY) has climbed to a fresh multi-year high of 109.56, boosted by the latest Jobless Claims data from the United States.
This rise in the USD has somewhat capped gold's further gains, as the dollar's strength puts pressure on other assets, including precious metals. Despite this, gold continues to hold its ground, driven by its appeal as a safe haven in uncertain times.
US Dollar Strengthens Amid Positive Job Data and Geopolitical Tensions, Posing Pressure on Gold Prices
On the US front, the broad-based US dollar managed to recover some ground and turned bullish as the US Dollar Index (DXY) climbed to a fresh multi-year high of 109.56.
This move followed better-than-expected Initial Jobless Claims data for the week ending December 27.
The number of individuals filing for unemployment benefits for the first time was 211K, lower than the expected 222K and the previous figure of 220K. However, the index eased slightly to around 109.20 at the time of writing.
Traders remain cautious about potential economic policies under President-elect Trump, particularly concerns about higher tariffs and the rising cost of living.
The Federal Reserve's recent projections also added to the unease, indicating fewer rate cuts in 2025 due to ongoing inflation.
At the same time, geopolitical tensions, especially in the Middle East and the ongoing Russia-Ukraine war, continue to support the USD, a traditional safe-haven currency.
Analysts pointed out that the greenback is benefiting from growing economic concerns in other parts of the world amid these geopolitical risks.
The strengthening US dollar, driven by positive job data and geopolitical tensions, may put pressure on gold prices.
As the dollar rises, gold becomes more expensive for holders of other currencies, potentially limiting further gains in the precious metal.
China's Economic Recovery and Potential Rate Cut May Boost Gold Prices
On the other hand, gold prices found support from news that the People's Bank of China (PBoC) may cut interest rates this year.
This move is expected to stimulate economic growth in China, a key factor for global demand, including gold.
As a major consumer of gold, any recovery in China’s economy tends to boost gold prices, especially if there’s increased demand for the precious metal.
Traders are keeping a close eye on this development, as lower interest rates could lead to more liquidity in the market, potentially pushing gold prices higher.
Moreover, China’s National Development and Reform Commission (NDRC) expressed confidence in the country’s economic recovery for 2025, with plans to increase funding through ultra-long treasury bonds to support key growth programs.
This comes alongside positive manufacturing data from China, showing that supply and demand are expanding, and new orders continue to rise.
This improved economic outlook could support gold as a store of value, with investors seeking safety in the precious metal amid global uncertainties.
President Xi Jinping also reaffirmed his focus on economic growth, promising more proactive policies in 2025, which may further strengthen gold’s appeal.
Therefore, the potential interest rate cut by the People’s Bank of China and the country’s positive economic outlook could boost gold prices.
As China’s economy recovers and demand for gold increases, investors may turn to gold as a safe-haven asset.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,654.42, down 0.15%, reflecting mild bearish pressure as it consolidates below the pivot point at $2,663.01.
The 4-hour chart suggests a cautious outlook, with immediate resistance positioned at $2,676.29, followed by $2,692.86 and $2,707.37.
On the downside, key support levels are found at $2,639.26, $2,621.73, and $2,605.08, acting as critical safety nets for potential pullbacks.
The 50-day Exponential Moving Average (EMA) at $2,627.19 reinforces the bearish sentiment as Gold trades above this level but struggles to maintain upward momentum.
The Relative Strength Index (RSI) at 64 signals moderate bullish bias but warns of nearing overbought territory, limiting aggressive buying activity.
A sustained move below the pivot point at $2,663.01 could invite selling pressure, targeting the immediate support at $2,639.26.
Conversely, a break above $2,676.29 may shift sentiment towards bullishness, potentially aiming for $2,692.86.
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GOLD Price Analysis – Jan 02, 2025
Daily Price Outlook
Gold prices (XAU/USD) continue to climb, staying strong around $2,641 after touching an intra-day high of $2,621.
This bullish momentum is fueled by a mix of factors, including the US adopting looser monetary policies, ongoing geopolitical conflicts, and record-breaking gold purchases by central banks.
Meanwhile, the ongoing Middle East tensions and the Russia-Ukraine war are keeping investors drawn to gold, a reliable safe-haven asset during uncertain times.
Looking ahead, the trend seems likely to continue, especially with a World Gold Council survey hinting that central banks could ramp up their gold buying in 2025, further driving demand.
Impact of a Strong US Dollar and Federal Reserve Policy on Gold Prices
On the US front, the US Dollar Index (DXY), which measures the dollar’s value against six major currencies, has surged to multi-year highs, trading around 108.50. This strength is fueled by the Federal Reserve's hawkish stance on monetary policy.
The Fed has hinted at a cautious approach to rate cuts in 2025 due to persistent inflationary pressures and uncertainties tied to the anticipated economic policies of the incoming Trump administration.
This strong dollar presents challenges for gold prices as it typically dampens demand for the metal by making it more expensive for international buyers.
However, inflation concerns and geopolitical tensions, such as conflicts in the Middle East and Russia-Ukraine, continue to support gold as a safe-haven asset.
Moreover, a World Gold Council survey suggests that central banks may increase their gold purchases in 2025, which could offset the pressure from a stronger dollar and provide further support for gold prices in the long term.
Therefore, the strong US dollar, driven by the Fed's hawkish policy, may put pressure on gold prices by making it costlier for foreign buyers.
However, ongoing inflation concerns, geopolitical tensions, and increased central bank gold purchases could still support gold's demand.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,634.10, marking a 0.38% gain in the last session as bullish momentum persists. On the 4-hour chart, the pivot point at $2,639.79 serves as a critical level. Immediate resistance is positioned at $2,651.73, followed by $2,665.31.
On the downside, support levels are observed at $2,610.53, $2,593.70, and $2,577.23. A break above $2,639.79 could signal continued upside, while failure to sustain this level may invite selling pressure.
Technical indicators reflect a positive bias. The RSI at 67 approaches overbought territory, hinting at strong bullish sentiment but cautioning against possible consolidation.
Gold trades above its 50 EMA at $2,621.94, reinforcing short-term upward momentum. However, the 200 EMA at $2,639.79 aligns closely with the pivot point, underscoring its significance as a decisive threshold.
The immediate outlook suggests that a move above $2,651.73 could attract further buying, targeting $2,665.31. Conversely, a failure to hold above $2,639.79 may lead to a test of the $2,610.53 support level, potentially extending to $2,593.70. Traders are advised to monitor volume and RSI levels for clearer directional cues.
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AUD/USD Price Analysis – Jan 02, 2025
USD/JPY Price Analysis – Jan 02, 2025
Daily Price Outlook
The USD/JPY pair has been showing signs of weakness in recent session, trading below 157.20 level.
One of the main reasons behind this downward trend is the shifting market expectations regarding the Federal Reserve's (Fed) interest rate decisions.
Earlier, the market believed that the Fed might continue to cut interest rates, which weakened the US dollar (USD) and provided some strength to the Japanese yen (JPY).
However, the current situation is different. There is a growing expectation that the Fed might take a more cautious approach with rate cuts in the future, leading to a mixed outlook for the USD/JPY pair.
In addition to this, market participants are also closely watching global economic developments, particularly in the US.
The slowing down of global growth and geopolitical tensions may weigh on market sentiment, affecting the performance of both the USD and JPY.
Despite the Fed's more hawkish stance, the pair's movement remains subdued, indicating a delicate balance between the two currencies.
US Dollar Strengthens Against Japanese Yen Amid Fed's Cautious Rate Cut Approach
On the US front, the broad-based US dollar has been gaining strength recently, which has provided support to the USD/JPY pair.
The recent bet on fewer interest rate cuts by the Federal Reserve this year has driven the USD higher against the Japanese yen.
The Federal Reserve's cautious approach to rate cuts has kept the US dollar elevated, despite some concerns about inflation and economic growth.
The anticipation of the US keeping interest rates higher for longer is a key factor in strengthening the USD.
Furthermore, the possibility of inflationary pressures stemming from proposals such as tariffs could also keep the Fed from making aggressive cuts in rates.
This higher interest rate difference between the US and Japan continues to provide support for the USD/JPY pair, driving the pair toward levels around 157.30.
Japanese Yen Faces Pressure Amid Gradual Economic Recovery and BOJ's Accommodative Policies
On the other side, the Japanese yen is facing pressure due to Japan’s ongoing economic situation. Recently, Bank of Japan (BOJ) Governor Kazuo Ueda mentioned that Japan is moving closer to achieving its 2% inflation target.
This has led to optimism in the market about Japan’s economic recovery. However, the progress toward this inflation target is still gradual, and the BOJ’s policies remain accommodative.
As a result, the JPY is finding it difficult to gain significant strength against the USD. The Japanese authorities are closely monitoring the exchange rate movements, with verbal interventions from officials like Finance Minister Katsunobu Kato, who has suggested that Japan may take measures to combat excessive currency movements. Such interventions aim to limit the yen’s losses, but their effectiveness remains to be seen.
USD/JPY – Technical Analysis
USD/JPY is trading at 156.743, down 0.36% in the last session, reflecting continued selling pressure. On the 4-hour chart, the pivot point is positioned at 157.401, serving as a critical level for directional movement.
Immediate resistance is noted at 158.065, followed by stronger hurdles at 158.742 and 159.672. On the downside, key support levels are seen at 155.965, 155.004, and 154.152, offering protection against deeper declines.
The Relative Strength Index (RSI) at 40 signals bearish momentum but suggests the pair is approaching oversold territory, which may limit further downside in the short term. The 50 EMA at 157.404 indicates that USD/JPY is trading below its short-term trend, reinforcing a bearish outlook.
A break below the immediate support at 155.965 could accelerate selling pressure toward 155.004. Conversely, a move above the pivot point at 157.401 may attract buyers, targeting resistance at 158.065.
Overall, the pair’s trajectory remains influenced by technical levels, with a cautious approach advised near the pivot. Traders should watch for decisive moves either above 157.401 for bullish momentum or below 155.965 for further declines.
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GOLD Price Analysis – Jan 02, 2025
AUD/USD Price Analysis – Jan 02, 2025
Daily Price Outlook
Despite the downbeat Chinese Manufacturing PMI putting pressure on the Aussie Dollar, the AUD/USD currency pair managed to maintain its upward trend, staying well-supported around the 0.6215 level and even reaching an intra-day high of 0.6223.
However, the reason behind this rise can be traced back to the Reserve Bank of Australia's (RBA) comments.
The RBA board suggested that if future economic data aligns with or falls below expectations, it would strengthen confidence in inflation and create the right conditions to begin easing policy restrictions.
On the other hand, stronger-than-expected data might mean that restrictive policies need to stay in place longer.
RBA Governor Michele Bullock also pointed out that the continued strength of the labor market has made the RBA slower than other countries in beginning its monetary easing cycle.
Weaker Chinese Manufacturing PMI Puts Pressure on AUD/USD Amid Global Economic Uncertainty
On the data front, China's Caixin Manufacturing PMI unexpectedly dropped to 50.5 in December, down from 51.5 in November.
The market had expected a reading of 51.7 for the month. Despite the decline, the data still indicates expansion, with manufacturers' output and demand continuing to grow.
The output gauge stayed in expansion for the 14th straight month, and new orders increased for the third consecutive month.
However, growth in both output and new orders slowed compared to November, as production and sales of investment goods fell, and exports were weaker due to ongoing uncertainties in the global economy and trade.
In addition to the Caixin PMI data, China's official Manufacturing PMI, released by the National Bureau of Statistics (NBS), also showed a slowdown, easing to 50.1 in December from 50.3 in November.
This missed market expectations of 50.3. On a positive note, the Non-Manufacturing PMI rose to 52.2, higher than the 50.0 in November and the forecast of 50.2.
Overall, while manufacturing growth slowed, the non-manufacturing sector showed stronger performance, pointing to mixed economic conditions in China as it faces challenges from both domestic and international factors.
Therefore, the weaker-than-expected Chinese Manufacturing PMI data signals economic challenges, which could dampen demand for commodities and impact Australia's export-driven economy.
As a result, the AUD/USD pair may face downward pressure, reflecting concerns about slowing global growth.
US Dollar Strengthens Amid Fed's Hawkish Stance and Global Uncertainties
On the US front, the US Dollar Index (DXY) has surged to multi-year highs, trading around 108.50. This rise is largely due to the US Federal Reserve’s hawkish stance on interest rates.
The Fed has signaled that it may take a more cautious approach to rate cuts in 2025, which has strengthened the US Dollar.
The shift in policy comes as the market anticipates economic strategies from the incoming Trump administration, which creates uncertainty about future policy changes.
In addition to the Fed's stance, rising geopolitical tensions in the Middle East and the ongoing Russia-Ukraine war are expected to support the US Dollar in the short term.
As a safe-haven currency, the USD tends to strengthen during times of global instability. Traders are also cautious about President-elect Trump’s economic policies, particularly the possibility of higher tariffs, which could increase the cost of living.
These concerns, along with the Fed’s recent projections indicating fewer rate cuts in 2025, suggest that the US Dollar will continue to hold its strength due to ongoing inflationary pressures and global uncertainties.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.62044, up 0.24% in the last session, showing a modest recovery from recent lows. The 4-hour chart positions the pivot point at $0.62433, serving as a key level for traders.
Immediate resistance is seen at $0.62755, followed by $0.63058 and $0.63393, highlighting potential upside targets. On the downside, key support levels are positioned at $0.61845, $0.61496, and $0.61208, providing safety nets against selling pressure.
The Relative Strength Index (RSI) at 46 suggests a neutral stance, signaling room for directional moves. The 50 EMA at $0.62185 reinforces a short-term bearish bias as the price remains below this level.
A sustained move below the $0.62203 entry point may trigger additional selling, with a potential target at $0.61693. Conversely, a break above $0.62433 could open the door to a recovery, targeting the $0.62755 resistance zone.
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GOLD Price Analysis – Jan 02, 2025
GOLD Price Analysis – Jan 01, 2025
Daily Price Outlook
Gold (XAU/USD) entered 2025 with bullish momentum after its exceptional performance in 2024. The precious metal gained more than 26% throughout the year, marking its highest annual increase since 2010.
This surge was driven by a combination of factors, including strong demand from central banks, persistent geopolitical instability, and loose global monetary policies. These trends pushed gold to new heights, with the price hitting an all-time record of $2,790.15 on October 31, 2024.
Gold to Remain Supported in 2025 Amid US Dollar Pressure and Geopolitical Risks
Despite a stronger US Dollar and slower Fed rate cuts, gold is expected to remain supported in 2025. The Federal Reserve's cautious stance on rate cuts and uncertainty surrounding economic strategies under the incoming Trump administration are putting pressure on the US Dollar.
However, gold has benefited from rising geopolitical risks, central bank demand, and global monetary easing in 2024. Analysts predict that gold could reach $3,000 per ounce due to continued demand from central banks and the gradual impact of Fed rate cuts.
China's Mixed Economic Data Boosts Gold's Safe-Haven Appeal
On the other hand, China's official Non-Manufacturing PMI showed improvement in December, rising to 52.2 from 50.0 in November, surpassing expectations.
This indicates stronger growth in services and other non-manufacturing sectors, which could be a sign of economic recovery despite the manufacturing slowdown.
However, the official Manufacturing PMI slipped slightly to 50.1, down from 50.3 in November, reflecting weaker performance in the manufacturing sector, although still above the 50.0 mark that separates expansion from contraction.
Meanwhile, home prices in China showed a slight increase in December, with new home prices rising by 0.37% from the previous month. On a year-on-year basis, prices rose by 2.68%, higher than November's growth of 2.40%.
This indicates that the property market is stabilizing, helped by government measures to support homebuying, such as cutting mortgage rates and reducing down payments.
Despite the challenges faced by the property sector, these efforts suggest that China is working to revive the market after a tough period following the debt crisis in 2021.
The mixed economic data from China, including weaker manufacturing and improving services, may increase uncertainty, potentially supporting gold. Gold often benefits from economic slowdowns or instability, as investors seek safe-haven assets during periods of market volatility.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,624.26, marking a modest 0.71% gain, as cautious optimism prevails in the precious metals market.
On the 4-hour chart, the pivot point at $2,626.95 is pivotal for defining short-term momentum. Immediate resistance stands at $2,638.91, followed by $2,651.73 and $2,665.31.
On the downside, immediate support lies at $2,593.70, with deeper levels at $2,577.23 and $2,561.89, providing crucial stability if bearish sentiment intensifies.
Gold's technical indicators offer mixed signals. The RSI is at 58, indicating moderate bullish momentum, while the price holds above the 50 EMA at $2,620.66, suggesting near-term strength.
However, the market faces resistance near $2,638.91, making this a critical threshold for further upward movement.
A sustained break above this level could open the path toward higher resistance zones, while failure to breach may reinforce a consolidation or bearish retracement.
Traders should monitor the $2,626.95 pivot point closely, as a decisive move below this level could trigger bearish sentiment, with potential targets at $2,605 and $2,593.70.
Conversely, a break above $2,638.91 would likely attract buyers, setting the stage for further gains.
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EUR/USD Price Analysis – Jan 01, 2025