USD/CAD Price Analysis – July 30, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair has failed to stop its downward trend and remained well-offered around the 1.3845 level, hitting the intra-day low of 1.3838.
However, this bearish trend can be attributed to the bearish US dollar, which lost ground on the back of cooling inflation that sparked discussions of the Fed implementing three rate cuts this year.
Meanwhile, the lower crude Oil prices exert downward pressure on the commodity-linked Canadian Dollar, limiting the downside of the USD/CAD pair.
US Dollar Weakness and Fed Rate Cut Expectations Impact USD/CAD
On the US front, the broad-based US dollar failed to halt its previous losses and remained bearish due to the dovish Fed stance. The Fed is expected to hold interest rates steady in its upcoming Wednesday meeting.
However, traders are forecasting a rate cut in September, with the CME FedWatch Tool showing a 100% probability of at least a 25 basis point reduction. Furthermore, the cooling inflation and easing labor market conditions in the US have heightened expectations for three rate cuts by the Fed this year.
On the data front, the US Personal Consumption Expenditures (PCE) Price Index increased by 2.5% year-over-year in June, slightly down from 2.6% in May, and in line with market expectations.
On a monthly basis, the PCE Index rose by 0.1% in June, following no change in May. Core PCE inflation, which excludes food and energy, also rose to 2.6% in June, matching the increase seen in May and surpassing the 2.5% forecast. Month-over-month, the core PCE Index climbed by 0.2% in June, up from 0.1% in May.
Therefore, the bearish US Dollar and expectations of a Fed rate cut in September, along with cooling inflation and easing labor market conditions, could put downward pressure on the USD/CAD pair.
Impact of Lower Crude Oil Prices on the USD/CAD Pair
On the other hand, gains in the USD/CAD pair may diminish as lower crude oil prices weigh on the commodity-linked Canadian dollar. Canada, the largest crude oil exporter to the US, is particularly affected by declining oil prices.
West Texas Intermediate (WTI) crude is trading around $75.40 per barrel, extending its losses for the third consecutive session.
This decline is driven by a weaker economic outlook in China and reduced supply concerns due to eased tensions in the Middle East. As a result, lower oil prices are limiting the upside potential of the USD/CAD pair by applying downward pressure on the Canadian dollar.
USD/CAD - Technical Analysis
USD/CAD is currently trading at $1.38452, reflecting a slight decline of 0.03%. The pivot point for this pair is set at $1.3819, a critical level that could determine the near-term direction. Immediate resistance is identified at $1.3866, followed by $1.3905 and $1.3946.
On the downside, immediate support is seen at $1.3781, with further support levels at $1.3745 and $1.3706.
The Relative Strength Index (RSI) is at 61, indicating a relatively strong bullish sentiment but approaching overbought conditions. This level suggests that while there is upward momentum, the pair could face selling pressure if it moves too much higher without consolidation.
The 50-day Exponential Moving Average (EMA) is positioned at $1.3780, which aligns closely with the immediate support level. This EMA serves as a significant indicator; a move below this could signal a shift to a bearish trend, whereas holding above it may reinforce bullish momentum.
Given the current technical landscape, a strategic entry point is recommended at $1.38190, targeting a take profit level of $1.38958. A stop loss should be set at $1.37792 to manage potential downside risks effectively.
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AUD/USD Price Analysis – July 30, 2024
GBP/USD Price Analysis – July 29, 2024
Daily Price Outlook
Despite the bearish US dollar and expectations of a September Fed rate cut, the GBP/USD currency pair failed to stop its losing streak and remained well offered around the 1.2839 level, hitting an intra-day low of 1.2807.
The downward trend can be attributed to the expectation that the Bank of England (BoE) will cut its interest rates by 25 basis points (bps) to 5%. This expectation undermined the GBP currency and contributed to the GBP/USD pair's losses.
Additionally, renewed strength in the US dollar, supported by uncertainty ahead of the Federal Reserve’s (Fed) monetary policy announcement, was another key factor putting pressure on the GBP/USD currency pair.
Looking ahead, traders are likely to remain cautious as they await the results of the two-day Federal Open Market Committee (FOMC) meeting, which concludes on Wednesday. This meeting, along with key US macroeconomic data, including the Nonfarm Payrolls (NFP) report at the start of the month, could provide new direction for the commodity.
BoE Rate Cut Anticipation and Service Sector Inflation Likely to Weaken GBP/USD
On the BoE front, the British currency weakens as the Bank of England prepares for its monetary policy meeting on Thursday. The BoE is expected to cut interest rates by 25 basis points to 5%, marking its first rate cut in over four years.
This decision comes after central banks shifted to restrictive policies to address inflated markets during the pandemic. Despite annual headline inflation returning to the target rate of 2%, high inflation in the service sector remains a concern.
Market experts worry that this rate cut might be challenging due to persistent service sector inflation.
Additionally, UK Prime Minister Keir Starmer's absolute majority has improved the economic outlook, with anticipated growth in manufacturing and services possibly leading to higher input prices. This could reignite price pressures and impact the currency further.
Therefore, the BoE's anticipated rate cut and persistent service sector inflation could weaken GBP/USD. Despite a positive economic outlook under Starmer, higher input prices may renew price pressures on the currency.
US Dollar Strength and Fed Rate Decision Pressure GBP/USD to Two-Week Low
On the US front, the broad-based US dollar regained traction and edged higher, pushing the Pound Sterling to a two-week low near 1.2810 against the US Dollar (USD). This comes as the market awaits the Federal Reserve's (Fed) monetary policy announcement on Wednesday.
The US Dollar Index (DXY) rose to 104.50 as investors brace for the Fed to maintain interest rates unchanged at 5.25%-5.50% for the eighth consecutive time.
Market watchers will closely examine Fed Chair Jerome Powell's statement and press conference for hints on potential rate cuts, as the Fed might acknowledge progress in reducing inflation and rising labor market risks.
Additionally, upcoming US economic data, including JOLTS Job Openings, ADP Employment Change, ISM Manufacturing PMI, and July’s Nonfarm Payrolls, will be scrutinized for further insights.
Therefore, the strengthening US dollar and the Federal Reserve's expected rate hold are pressuring the GBP/USD pair, pushing it to a two-week low as market participants anticipate future rate cuts.
GBP/USD - Technical Analysis
GBP/USD is currently trading at $1.28171, up 0.07% on a 4-hour chart. The pivot point is set at $1.2852, marking a significant level to watch. Immediate resistance levels are $1.2889, $1.2933, and $1.2987. On the downside, immediate support is at $1.2782, followed by $1.2757 and $1.2735.
The Relative Strength Index (RSI) is at 31, indicating that the pair is nearing oversold conditions. This could suggest a potential reversal or a period of consolidation before any significant movement.
The 50-day Exponential Moving Average (EMA) stands at $1.2920, which provides a higher resistance level. If GBP/USD moves above this EMA, it could signal a stronger bullish trend. Conversely, staying below this EMA suggests continued bearish pressure.
Given the current technical indicators, the outlook for GBP/USD remains cautious. The RSI indicates potential oversold conditions, which may lead to a temporary bounce or consolidation. However, traders should be prepared for further downside if key support levels are breached.
For traders, a strategic approach would be to consider selling below the pivot point of $1.2852, with a target take profit level at $1.2782. To manage risk, a stop loss should be placed at $1.2889. This setup aims to capitalize on the prevailing bearish sentiment while acknowledging the possibility of a short-term reversal due to the oversold RSI.
In conclusion, GBP/USD is under bearish pressure, with key levels dictating its next moves.
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EUR/USD Price Analysis – July 29, 2024
GOLD Price Analysis – July 29, 2024
Daily Price Outlook
Gold (XAU/USD) maintained its upward trend, holding firm around the $2,392.36 level and reaching an intraday high of $2,403.25. This rally was largely driven by concerns over escalating conflict in the Middle East, bolstering safe-haven assets such as gold.
Meanwhile, the bearish US dollar, pressured by expectations of a September Fed rate cut, was another key factor boosting gold prices.
Looking ahead, traders are likely to remain cautious as they await the results of the two-day Federal Open Market Committee (FOMC) meeting, concluding on Wednesday.
This meeting, coupled with key US macroeconomic data, including the Nonfarm Payrolls (NFP) report at the start of the month, could provide new direction for the commodity.
Modest Inflation Data Boosts Gold Prices Amid Weaker US Dollar and Lower Treasury Yields
On the US front, the broad-based US dollar continued to lose strength and remained depressed after the US Personal Consumption Expenditures (PCE) Price Index data released on Friday showed modest inflation growth in June.
This data increased expectations for the Federal Reserve to start cutting interest rates soon, leading to a decline in US Treasury bond yields and putting pressure on the US dollar.
On the data front, the US Commerce Department reported that the Personal Consumption Expenditures (PCE) Price Index rose by 0.1% in June, following no change in May. Over the past year, the PCE Price Index increased by 2.5%, down slightly from 2.6% in May, indicating easing price pressures.
Meanwhile, the core PCE Price Index, which excludes food and energy prices and is the Fed's preferred inflation measure, rose by 0.2% in June and held steady at 2.6% year-over-year. These figures matched consensus estimates and signaled a gradual reduction in inflation.
Therefore, the modest inflation growth indicated by the PCE Price Index data increased expectations for Federal Reserve rate cuts, weakening the US dollar and US Treasury bond yields, thus boosting gold prices as a safe-haven asset.
Geopolitical Tensions Boost Gold Prices Amidst Limited Upside from Global Equity Markets
Another factor boosting the gold price is the rising geopolitical tensions in the Middle East. The recent attack in the Golan Heights and ongoing conflict between Israeli forces and Hezbollah in Lebanon have increased demand for gold as a safe-haven asset. Additionally, the situation in Gaza, with large-scale evacuations and heavy fighting, is adding to gold’s appeal.
Despite this, the positive sentiment in global equity markets is limiting gold’s price gains, as investors are less focused on traditional safe-haven assets. Therefore, while gold is benefiting from geopolitical fears, its price is somewhat restrained.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,388.515, up 0.34% on a 4-hour chart. The pivot point stands at $2,400.94, which is a crucial level to monitor. Immediate resistance levels are $2,432.20, $2,451.44, and $2,475.48. On the downside, immediate support is at $2,370.88, followed by $2,353.65 and $2,337.62.
The Relative Strength Index (RSI) is at 47, indicating a neutral stance with no clear overbought or oversold signals. This suggests that the market could move in either direction depending on forthcoming market dynamics and data releases.
The 50-day Exponential Moving Average (EMA) is currently at $2,411.16, which provides a higher resistance level. If prices move above this EMA, it could signify a stronger bullish trend. Conversely, staying below this EMA reinforces a bearish outlook.
Given the current technical setup, traders should consider a cautious approach. Buying opportunities may present themselves above the pivot point of $2,400.94, with a potential take profit level at $2,432.20.
A stop loss should be set at $2,370.88 to manage downside risk. The RSI suggests neutrality, so traders should keep an eye on any significant movements that might indicate a clearer trend direction.
In summary, while gold is showing some bullish momentum, key resistance levels above and support levels below will be critical in determining the next significant price movements.
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EUR/USD Price Analysis – July 29, 2024
EUR/USD Price Analysis – July 29, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair extended its downward movement, hovering around 1.0833 and reaching an intra-day low of 1.0826. This decline is primarily driven by the renewed strength of the US dollar, which has gained traction amid uncertainty surrounding the Federal Reserve's upcoming monetary policy decision.
Meanwhile, the losses in the EUR/USD pair was further bolsoterd by the sluggish economic growth in the Eurozone, especially in Germany, and expectations of rate cuts by the European Central Bank (ECB). These elements have collectively exerted significant pressure on the EUR/USD pair.
Impact of US Dollar Strength and Fed Policy on EUR/USD Outlook
On the US front, the broad-based US dollar strengthened, with the US Dollar Index (DXY) climbing to around 104.50.
The Federal Reserve is anticipated to maintain interest rates at 5.25%-5.50%, and investors are closely monitoring the Fed's monetary policy statement and Chair Jerome Powell’s press conference for indications of potential rate cuts.
Market experts speculate that the Fed may signal rate cuts in September, given the progress in reducing inflation toward the 2% target and rising concerns about the labor market. Recent data reflects easing inflation worries, with the Q2 GDP Price Index falling to 2.3% from 3.1%.
Although the June core Personal Consumption Expenditures (PCE) Price Index edged up to 2.6%, expectations for rate cuts persist.
Therefore, the strengthening US dollar and potential Fed rate cuts are likely to pressure the EUR/USD pair further. As the US dollar gains strength and inflation concerns ease, the EUR/USD may continue its downward trend.
EUR/USD Decline Amid Eurozone Inflation Uncertainty and Fed Decision
On the EUR front, the major currency pair is declining due to uncertainty ahead of the Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) for July and the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.
The Eurozone inflation data will reveal if the market’s expectation of two more rate cuts by the European Central Bank (ECB) this year is justified.
Some ECB officials support these cuts due to a weak economy and the belief that inflation will drop to 2% next year. The expected annual inflation rates are 2.3% for overall prices and 2.8% for core prices.
Additionally, German Finance Minister Christian Lindner has introduced tax cuts to help boost spending and investment, as Germany is facing reduced demand and slower economic growth.
Therefore, the EUR/USD pair is falling as investors anticipate the Eurozone’s inflation data and the Fed’s policy decision. Uncertainty over ECB rate cuts and slower inflation, coupled with German tax relief measures, is contributing to the pair's decline.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.08369, up 0.04% on the 4-hour chart. The pivot point is set at $1.0836, a critical level for determining future price movements. Immediate resistance levels are $1.0877, $1.0912, and $1.0949. On the downside, immediate support is at $1.0806, followed by $1.0777 and $1.0753.
The Relative Strength Index (RSI) is at 40, suggesting a neutral market with no clear overbought or oversold signals. This indicates that the market could move in either direction, influenced by upcoming economic data and market dynamics.
The 50-day Exponential Moving Average (EMA) stands at $1.0878, acting as a higher resistance level. If prices move above this EMA, it could indicate a shift towards a bullish trend. Conversely, staying below this EMA would reinforce a bearish outlook.
Given the current technical indicators, a cautious approach is advisable. Selling opportunities might arise below the pivot point of $1.0836, with a potential take profit level at $1.07765. A stop loss should be placed at $1.08720 to manage risk. The RSI's neutral position means traders should watch for any significant moves that could signal a clearer trend direction.
In summary, while EUR/USD shows some potential for upward movement, key resistance and support levels will be crucial in determining the next significant price actions.
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GBP/USD Price Analysis – July 29, 2024
S&P500 (SPX) Price Analysis – July 26, 2024
Daily Price Outlook
The global market sentiment has lost momentum, with the S&P 500 index trading around 5,399.22 and hitting an intra-day low of 5,390.95. This decline stems from disappointing earnings reports from major tech companies like Alphabet and Tesla, which triggered widespread market sell-offs.
Meanwhile, the weak U.S. manufacturing data and lower-than-expected new home sales have heightened investor concerns, heightening the market's negative reaction.
Besides this, the economic slowdown in China, highlighted by disappointing GDP growth and an unexpected rate cut by the People's Bank of China (PBoC), has further pressured U.S. stocks as reduced business investment and consumer spending in China have added to market uncertainties.
Investor caution has also been influenced by upcoming U.S. core PCE data, contributing to increased volatility.
China's Economic Slowdown and Its Impact on the S&P 500 Index
On the China front, the Third Plenum's lackluster outcome, weaker-than-expected Q2 GDP growth, and an unexpected rate cut by the People’s Bank of China (PBoC) have signaled a slowdown in the world's second-largest economy, raising concerns about business investment and consumer spending.
Meanwhile, the PBoC cut its one-year policy loan rate by 20 basis points to 2.3%, the largest reduction since April 2020, after also lowering a key short-term rate. This move aims to support the slowing economy, with silver, a metal used in industries like renewable energy and electric vehicles, potentially being impacted by these economic shifts.
These developments in China have weighed heavily on the S&P 500 index, amplifying investor concerns about global economic stability.
The slowdown in China's economy and reduced business investment and consumer spending have increased market uncertainty, contributing to the index's recent declines and overall market volatility.
Impact of Core PCE Data and Fed Rate Cut Expectations on the S&P 500 Index
On the US front, Investor uncertainty has impacted the S&P 500 index as they await the core Personal Consumption Expenditure (PCE) price index data for May. The PCE, a crucial inflation gauge for the Federal Reserve, is projected to show a year-on-year decrease to 2.5% from 2.8%, with a monthly growth rate of 0.1%.
This data will influence expectations for potential Fed rate cuts, which are anticipated to begin in September.
Despite the US dollar facing challenges due to these rate-cut expectations, strong economic indicators, such as 2.8% GDP growth and lower unemployment claims, have mitigated market losses. However, lower inflation continues to pose a challenge to the dollar's strength.
Therefore, investor uncertainty ahead of the core PCE price index data for May has impacted the S&P 500 index. Meanwhile, the expectations of a Fed rate cut in September, combined with strong economic data, have limited market losses despite ongoing inflation concerns.
S&P 500 - Technical Analysis
The S&P 500 (SPX) is currently trading at $5399.23, marking a decline of 0.51%. The 4-hour chart highlights critical levels and indicators that shape the current market sentiment and potential future movements. The pivot point is set at $5429.65, serving as a key reference for traders.
On the upside, immediate resistance is noted at $5502.69, followed by $5577.16 and $5665.95. These resistance levels will be crucial for any bullish attempts to recover recent losses.
Conversely, immediate support is found at $5327.98, with further support levels at $5259.24 and $5190.50, which could be pivotal for any further downward pressure.
The Relative Strength Index (RSI) is currently at 33, indicating that the S&P 500 is approaching oversold territory. This suggests the possibility of a short-term rebound or consolidation before any significant directional move.
The 50-day Exponential Moving Average (EMA) is positioned at $5529.94, indicating that the current price is below this average, reinforcing a bearish sentiment. The 50 EMA often serves as a benchmark for medium-term trends and could act as a resistance level if the price attempts to rise.
In conclusion, the technical outlook for the S&P 500 remains bearish below the $5429.65 pivot point. Traders are advised to consider entry points for selling below $5430, with a take profit target of $5325 and a stop loss at $5500.
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EUR/USD Price Analysis – July 26, 2024
GOLD Price Analysis – July 26, 2024
Daily Price Outlook
Gold (XAU/USD) reversed its previous downward trend and gained momentum, climbing from 2,370.15 to an intraday high of 2,379.35. This uptick was largely driven by a weaker US dollar, fueled by expectations that the Federal Reserve might begin a rate-cut cycle in September.
The US Dollar (USD) fell short of a two-week high reached earlier in the week, which bolstered gold's attractiveness to investors. However, stronger-than-expected US GDP growth and slower inflation in Q2 2024 suggest a resilient economy, potentially diminishing gold's appeal as a safe-haven asset and limiting the extent of its gains.
Looking ahead, traders are closely monitoring the upcoming release of the US Personal Consumption Expenditures (PCE) Price Index this Friday for clues on the Federal Reserve's policy stance.
The PCE report is expected to impact USD demand and could potentially create new momentum for gold, which, as a non-yielding asset, often reacts to shifts in interest rate expectations and economic indicators.
US Economic Data and Federal Reserve Expectations Impact Gold
On the US front, the US dollar struggled to gain momentum and turned bearish amid expectations of an impending rate-cut cycle by the Federal Reserve. Markets have fully priced in a rate cut for September and anticipate two more reductions by the end of the year, which has kept the US Dollar on the back foot and supported gold prices.
Meanwhile, the strong US economic data, including 2.8% GDP growth and a decline in unemployment claims, help limit the US dollar's losses, though lower inflation still challenge its strength.
On the data front, the US economy expanded at a 2.8% annualized rate from April to June, up from 1.4% in the previous quarter and surpassing the anticipated 2% growth. The core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred measure of inflation, moderated to 2.9% from 3.7% in the previous quarter.
Additionally, the US Department of Labor reported a larger-than-expected decline in unemployment insurance claims, which fell to 235,000 for the week ending July 20.
This data could weigh on gold prices, as stronger economic growth and lower inflation decrease gold's appeal as a safe-haven asset. Additionally, the drop in unemployment claims suggests a strong job market, which could heighten expectations for higher interest rates and further reduce gold's attractiveness.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2369.020, up by 0.30%. The 4-hour chart reveals key technical levels and indicators suggesting the metal's future trajectory. The pivot point is positioned at $2379.70, acting as a critical marker for potential market movements.
On the upside, immediate resistance is noted at $2401.34, with further resistance levels at $2421.78 and $2451.44. These levels will be crucial for any bullish momentum. Conversely, immediate support is seen at $2357.25, followed by $2339.62 and $2319.18, which are pivotal for any downside movements.
The Relative Strength Index (RSI) stands at 33, indicating that gold is nearing oversold territory. This could imply a potential rebound or a consolidation phase before any significant move.
The 50-day Exponential Moving Average (EMA) is positioned at $2418.25, suggesting that the current price is below this average, reinforcing the bearish sentiment. This indicator often serves as a benchmark for medium-term trends and could act as resistance if the price attempts to rise.
In conclusion, the technical outlook for gold remains bearish below the $2379.70 pivot point. Traders are advised to consider entry points for selling below $2380, with a take profit target of $2350 and a stop loss at $2395.
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S&P500 (SPX) Price Analysis – July 26, 2024
EUR/USD Price Analysis – July 26, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair gained positive traction, turning bullish around the 1.0857 level and reaching an intra-day high of 1.0861.
This upward movement is primarily due to the weakening US dollar, which has been under pressure amid expectations for Federal Reserve (Fed) rate cuts later this year. Softer-than-expected US inflation figures have intensified these expectations, potentially leading to lower interest rates and further weakening the dollar.
However, the EUR/USD pair's gains may be limited by ongoing economic challenges in the Eurozone. Germany's PMI data recently showed contraction, and the European Central Bank (ECB) is anticipated to cut rates further, which could also put downward pressure on the Euro.
Additionally, the Euro faces headwinds from a significant tax relief package, impacting its overall value.
Weak German Economy and ECB Rate Cut Expectations Pressure EUR/USD Pair
On the EUR front, the Eurozone is facing a tough time as Germany, its largest economy, struggles with economic contraction. In July, the German Hamburg Commercial Bank (HCOB) Composite Purchasing Managers Index (PMI) fell to 48.7 from 50.4, signaling a decline in private sector activity.
Dr. Cyrus de la Rubia, HCOB’s Chief Economist, warned that Germany’s economy is shrinking, particularly due to a sharp drop in manufacturing output. This weak performance is affecting the Euro, compounded by expectations of two more rate cuts by the European Central Bank (ECB).
ECB officials are considering these cuts to boost the economy, especially as inflation is projected to hit 2% by 2025.
Meanwhile, Germany’s 30 billion euros tax relief plan shows the government’s concern over low demand. The upcoming Eurozone Harmonized Index of Consumer Prices (HICP) data will be crucial in determining the timing of future ECB rate cuts.
Therefore, the weak German economy and anticipated ECB rate cuts are likely to weaken the Euro. As Germany struggles with contraction and inflation expectations shift, the EUR/USD pair could see downward pressure, with the Euro losing ground against the US dollar.
Impact of US Inflation Data and Fed Rate Cut Speculation on EUR/USD Pair
On the US front, the broad-based US dollar has been losing its momentum as investors await the core Personal Consumption Expenditures (PCE) price index data for June, set for release at 12:30 GMT.
Economists forecast that inflation will ease slightly to 2.5% year-over-year in June from 2.6% previously, with a steady 0.1% monthly increase. This data will play a crucial role in shaping market expectations for Federal Reserve (Fed) rate cuts this year.
Currently, there is strong speculation that the Fed will cut rates in September. If inflation figures are softer than expected, it would likely support the case for these cuts, while stubbornly high inflation could weaken this expectation.
The US dollar has shown subdued performance as traders remain cautious, knowing that the Fed is expected to keep its key rates steady at 5.25%-5.50% during its July 31 meeting.
Therefore, the subdued US dollar and anticipated Fed rate cuts could benefit the EUR/USD pair. Softer inflation data might reinforce expectations for September rate cuts, potentially strengthening the Euro against the Dollar.
EUR/USD - Technical Analysis
The EUR/USD currency pair is currently trading at $1.08577, reflecting a modest increase of 0.12%. Analyzing the 4-hour chart, several key levels and technical indicators emerge, providing insight into potential price movements.
The pivot point is identified at $1.0836, serving as a crucial level that could determine the pair's next direction. Immediate resistance is observed at $1.0877, with subsequent resistance levels at $1.0912 and $1.0949. These levels represent potential barriers for any upward movement in the short term.
On the downside, immediate support is found at $1.0806, followed by $1.0777 and $1.0753. These support levels are critical in preventing further declines and could act as bounce points if the pair faces selling pressure.
The Relative Strength Index (RSI) stands at 48, suggesting a neutral market sentiment. An RSI near 50 indicates neither overbought nor oversold conditions, implying potential for movement in either direction based on market catalysts.
The 50-day Exponential Moving Average (EMA) is positioned at $1.0883, slightly above the current price. The proximity of the price to the 50 EMA suggests potential resistance if the pair attempts to climb higher. The 50 EMA is a commonly watched indicator that traders use to gauge medium-term trend direction.
In conclusion, the technical outlook for EUR/USD remains cautiously bullish above the pivot point of $1.0836. Traders are advised to consider buying above $1.08354, with a take profit target of $1.08869 and a stop loss at $1.08120.
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S&P500 (SPX) Price Analysis – July 26, 2024
USD/JPY Price Analysis – July 25, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair continued its bearish trend, trading under pressure at the 152.58 level as the Japanese Yen (JPY) rose to its highest level in 12 weeks against the US Dollar (USD).
This drop is mainly due to traders closing their carry trades before the Bank of Japan’s (BoJ) upcoming policy meeting.
However, the carry trades involve borrowing in low-interest currencies like the Yen and investing in higher-interest assets. With the BoJ likely to change its policy soon, traders are exiting these trades, which strengthens the Yen and weakens the USD/JPY pair.
In simple words, traders are adjusting their strategies ahead of expected changes from the BoJ, impacting the Yen and Dollar.
Japanese Yen Hits 12-Week High as Traders Anticipate BoJ Policy Shift
On Thursday, the Japanese Yen rose to a 12-week high of 151.93 against the US Dollar. This increase happened because traders are closing their carry trades before the Bank of Japan’s (BoJ) policy meeting next week. The BoJ is expected to raise interest rates and cut back on buying bonds, which would reduce economic support.
As a result, traders are selling off positions that benefit from low rates, boosting the Yen. This caused the USD/JPY pair to fall, showing that the Yen is gaining strength due to expectations of changes in Japan's monetary policy.
US Economic Data Increases Pressure on USD/JPY Amid Fed Policy Uncertainty
On the US front, the recent economic data is putting more pressure on the USD/JPY pair. The July Purchasing Managers' Index (PMI) shows strong growth in private-sector activity, which might allow the Federal Reserve (Fed) to keep its tight monetary policy. Despite this, the US Dollar is still struggling.
Investors are waiting for upcoming reports on US GDP and inflation to see if the Fed will change its policies. If these reports show slower inflation or economic growth, the Dollar could weaken even more, which would add to the downward trend in the USD/JPY pair.
USD/JPY - Technical Analysis
The USD/JPY pair declined by 0.97%, currently trading at $152.802, reflecting a bearish sentiment in the market. This drop brings the currency pair closer to significant technical levels, prompting traders to reassess their positions and strategies.
The pivot point at $154.011 is crucial for determining the next move. Immediate resistance is observed at $153.436, and breaking above this could drive the pair towards the next resistance levels of $154.551 and $155.596.
Conversely, immediate support is found at $151.695, with further support levels at $151.052 and $150.314, which are essential for maintaining the upward trend.
Technical indicators show mixed signals. The Relative Strength Index (RSI) is at 24, indicating that the USD/JPY is entering oversold territory. This suggests a potential for a reversal or a consolidation phase as the market adjusts to the oversold conditions.
The 50-day Exponential Moving Average (EMA) is at $156.607, highlighting a bearish trend as the current price is significantly below this level. A sustained move below the 50 EMA typically signals continued downward momentum, putting pressure on the USD/JPY.
In conclusion, traders should consider long positions above $152.250, targeting $154.000 for profit-taking, with a stop loss set at $151.000.
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AUD/USD Price Analysis – July 25, 2024
AUD/USD Price Analysis – July 25, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair failed to stop its downward trend and remained well offered around the 0.6527 level, hitting an intra-day low of 0.6519.
The downward rally can be attributed to the weak economic outlooks for China and Australia, which have dampened the Australian dollar and contributed to the AUD/USD pair's losses.
In contrast, the bearish US dollar, driven by increasing expectations that the Federal Reserve (Fed) will cut interest rates multiple times before the year's end, has helped the AUD/USD pair to limit its losses.
Australian Dollar Under Pressure from China’s Economic Slowdown and Weak Market Sentiment
On the AUD front, The Australian Dollar (AUD) is under pressure due to concerns about China's economic slowdown. China's recent decision to cut its Loan Prime Rate (LPR) by 10 basis points, coupled with a lack of strong growth measures, has raised fears about the country's economic health.
This is significant for Australia, as the AUD often mirrors China's economic conditions and Australia heavily depends on iron ore exports to China.
With global iron ore prices falling to a three-week low and anticipated declines in foreign investment in Australia, the AUD faces further challenges. Additionally, weak market sentiment before the US Q2 GDP report and nominal losses in S&P 500 futures compound the AUD's difficulties.
Impact of US Economic Data and Outlook on AUD/USD
On the US front, the US Dollar is falling but remains above the key support level of 104.00. However, the US economy is growing at a solid 2.0% annual rate, up from the previous 1.4%, although the GDP Price Index has slowed to 3.6% from 3.1%. This could lead to early rate cuts by the Federal Reserve.
It should be noted that the recent S&P Global PMI data for July is somewhat positive, suggesting that the economy is doing well with controlled inflation, though rising costs for materials and labor might impact prices and profit margins.
Despite the expectation of Fed rate cuts, gold prices are declining due to a stronger economic outlook and higher production costs.
The S&P Global Composite PMI improved to 55, showing overall growth, while the Manufacturing PMI fell to 49.5, indicating slower manufacturing, and the Services PMI rose to 56.0, reflecting stronger growth in services.
Therefore, the Australian Dollar (AUD) may weaken against the US Dollar (USD) as improved US economic data and a stronger outlook overshadow expectations of Fed rate cuts, impacting AUD/USD negatively.
AUD/USD - Technical Analysis
The Australian dollar (AUD/USD) declined by 0.48%, settling at $0.65453 in recent trading sessions. This downward movement places the currency pair in a delicate position as it hovers near significant technical levels. Traders and analysts are keenly observing these levels to gauge potential future movements.
The pivot point at $0.6517 is a critical marker for traders. Immediate resistance is seen at $0.6592. A break above this could push the AUD/USD towards the next resistance levels at $0.6636 and $0.6682.
On the downside, the immediate support lies at $0.6517. Further declines could find additional support at $0.6491 and $0.6465, which are vital for preventing a deeper sell-off.
Technical indicators offer a mixed outlook. The Relative Strength Index (RSI) is notably low at 19, suggesting that the AUD/USD is in oversold territory. This could imply a potential reversal or a consolidation phase in the near term as the market corrects the oversold conditions.
The 50-day Exponential Moving Average (EMA) stands at $0.6683, indicating a bearish trend as the current price remains well below this level. A sustained move below the 50 EMA often signals continued downward momentum, adding pressure on the AUD/USD.
In conclusion, the recommendation is to consider short positions below $0.65580, targeting $0.65166 for profit-taking with a stop loss set at $0.65828.
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GOLD Price Analysis – July 25, 2024
Daily Price Outlook
Gold prices (XAU/USD) failed to stop their previous session's downward rally and remained well offered around $2,375, hitting an intraday low of $2,365. This downward trend can be attributed to technical selling, as it experiences a predicted downward movement within its trading range.
Meanwhile, the slightly positive US S&P Global PMI data for July reduced fears of "stagflation" (a weak economy with high inflation), leading to a decline in gold prices as the improved economic outlook made gold less attractive as a safe-haven asset.
In contrast, increasing expectations that the Federal Reserve (Fed) will cut interest rates multiple times before the year's end helped gold prices limit their deeper losses. Looking ahead, traders are waiting for more US economic data to gauge future interest rates.
Key reports include the Q2 GDP growth data on Thursday and the PCE Price Index for June on Friday. These reports will provide insights into the economy and inflation.
Gold Prices Decline Amid Positive Economic Outlook and Rising Production Costs
On the US front, the recent S&P Global PMI data for July was slightly positive, easing worries about a weak economy with high inflation (stagflation). Chris Williamson from S&P Global described the situation as a "Goldilocks" scenario, where the economy is growing well and inflation is under control.
However, higher costs for materials, shipping, and labor could lead to increased prices or lower profit margins.
Despite expectations that the Federal Reserve will cut interest rates, gold prices are falling because the improved economic outlook and rising production costs are overshadowing these expectations.
On the data front, the preliminary S&P Global Composite PMI improved to 55 in July from 54.8 in June, showing overall economic growth.
However, the S&P Global Manufacturing PMI dropped to 49.5 from 51.6, indicating a slowdown in manufacturing, while the Services PMI rose to 56.0 from 55.3, reflecting stronger growth in services.
Despite a positive economic outlook and expectations of lower interest rates, Gold prices are falling. This is due to rising production costs and a slowdown in manufacturing overshadowing the benefits of rate cuts.
Gold Prices Set to Gain from Lower US Bond Yields, Reduced Import Tax in India, and Geopolitical Shifts
On the other hand, the unwinding of the "Trump trade" has lowered US bond yields, which benefits gold prices. Polls show Democrat Kamala Harris leading over former President Trump, potentially signaling a less inflationary economy if she wins.
Moreover, India's reduction of its gold import tax from 15% to 6% is expected to boost physical gold demand.
Furthermore, gold might benefit from geopolitical factors, especially if BRICS+ nations succeed in creating a gold-backed alternative to the US dollar as the world's reserve currency, reducing US influence through dollar-based sanctions.
Gold prices are likely to benefit from lower US bond yields, reduced Gold import tax in India, and potential geopolitical shifts if BRICS+ nations establish a Gold-backed reserve currency.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) experienced a modest decline of 0.92%, settling at $2,373.915 on the four-hour chart. This recent move sees the precious metal navigating key technical levels that traders are closely monitoring.
As the price action unfolds, it becomes essential to understand the pivotal areas of support and resistance that could influence the next directional shift.
The pivot point, currently at $2,379.70, serves as a crucial marker. Gold's immediate resistance stands at $2,401.34, a break above which could propel prices toward the next resistance levels of $2,421.78 and $2,451.44.
Conversely, the downside is guarded by immediate support at $2,357.25. Further declines may find stabilization at subsequent support levels of $2,339.62 and $2,319.18, which are critical for maintaining the bullish sentiment in the medium term.
Technical indicators present a mixed scenario. The Relative Strength Index (RSI) is positioned at 30, indicating that Gold might be entering oversold territory. This could suggest a potential reversal or a period of consolidation in the near term.
Additionally, the 50-day Exponential Moving Average (EMA) is at $2,424.48, highlighting a bearish trend as the current price remains below this average. Traders should remain cautious, as a sustained move below the 50 EMA often signals continued downward momentum.
In conclusion, traders are advised to consider short positions below $2,380, targeting $2,350 for profit-taking, with a stop loss set at $2,395.
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AUD/USD Price Analysis – July 25, 2024