GBP/USD Price Analysis – July 24, 2024
Daily Price Outlook
Despite the upbeat PMI data, the GBP/USD currency pair failed to gain positive traction and remained under pressure around the 1.2904 level, hitting an intra-day low of 1.2876.
The downward rally can be attributed to high service sector inflation and concerns over the potential impact of the Bank of England's restrictive monetary policy.
Moreover, the renewed strength of the US dollar, supported by recent developments in the US presidential elections, was another key factor putting pressure on the GBP/USD pair.
In contrast, growing expectations that the Federal Reserve may begin a rate-cutting cycle in September could cap gains in the US dollar and help the GBP/USD pair limit its losses.
US Dollar Strengthens Amid Election Speculation and Economic Data
On the US front, the broad-based US dollar regained its bullish traction and edged higher near a weekly high at around 104.50.
This strength is partly due to investor interest ahead of the US presidential elections in November, with market experts predicting a win for Donald Trump despite the Democratic nomination of Vice President Kamala Harris.
Additionally, the US dollar's performance is influenced by the anticipation of significant upcoming economic data releases.
On the data front, investors are closely watching the preliminary US S&P Global PMI data for July, expected to show modest expansion in both manufacturing and services.
The main triggers for the US dollar this week will be the preliminary Q2 GDP and the Personal Consumption Expenditures Price Index (PCE) data, scheduled for Thursday and Friday. The US economy is projected to have grown by 1.9%, up from the previous 1.4%.
Investors are particularly interested in the core PCE inflation, the Federal Reserve’s preferred inflation measure, to gauge the timeline for potential interest rate cuts, which markets currently expect to begin in September.
Therefore the stronger US Dollar, buoyed by positive economic data and election developments, puts pressure on the GBP/USD pair. Despite the UK's upbeat PMI data, the pair may face downward pressure due to the contrasting economic outlooks and potential Fed rate cuts.
GBP/USD Pair Faces Pressure Amid BoE Rate Cut Speculation and High Service Sector Inflation
However, the decline in the GBP/USD pair is linked to growing speculation that the Bank of England (BoE) will begin cutting interest rates in August. Market experts believe the UK economy is struggling under the BoE's high interest rates, significantly impacting household spending.
This concern is highlighted by the faster-than-expected contraction in UK Retail Sales, a key measure of consumer spending, in June. Despite this, BoE officials are hesitant to endorse rate cuts due to persistently high service sector inflation, which grew steadily by 5.7% in June.
On the data front, the Composite PMI for July came in higher at 52.7, surpassing estimates of 52.6 and the previous release of 52.3, thanks to increased activities in both manufacturing and service sectors.
The Manufacturing PMI rose to 51.8 and the Services PMI to 52.4, both outperforming their previous readings.
Despite the upbeat PMI data, the GBP/USD pair faces pressure. The stronger US Dollar and speculation about Bank of England rate cuts amid high UK service inflation contribute to a potential downward trend for the GBP/USD pair.
GBP/USD - Technical Analysis
The GBP/USD pair is currently trading at $1.2884, reflecting the latest market movements. On the 4-hour chart, the key technical levels are crucial for understanding potential price action. The pivot point is set at $1.2901, serving as a central level around which the price may fluctuate.
Immediate resistance levels are identified at $1.2942, $1.2988, and $1.3033. These levels represent potential selling points where the market may face resistance if it attempts to rise.
On the downside, immediate support levels are marked at $1.2838, $1.2782, and $1.2735. These support levels are vital as they indicate potential areas where buying interest could emerge, preventing further declines.
The Relative Strength Index (RSI) is currently at 32, indicating that the market is nearing oversold conditions. This suggests that the GBP/USD pair may experience a bounce if buyers step in at lower levels.
The 50-day Exponential Moving Average (EMA) is at $1.2951, acting as a dynamic resistance level that traders should watch closely.
Given the current technical setup, the recommendation is to sell below $1.29072. The take profit level is set at $1.28381, providing a reasonable target for downside movements. A stop loss at $1.29510 is advised to manage risk, protecting against potential upward reversals.
In conclusion, the technical outlook for GBP/USD suggests a bearish sentiment below the pivot point of $1.2901.
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EUR/USD Price Analysis – July 24, 2024
GOLD Price Analysis – July 24, 2024
Daily Price Outlook
Gold prices (XAU/USD) continued their upward momentum, trading around $2,411.12 and reaching an intraday peak of $2,419.15. This rally is largely attributed to dovish expectations from the Federal Reserve, which have weakened the US dollar and boosted gold's appeal.
Meanwhile, the risk-off market sentiment has increased demand for gold as a safe-haven asset.
The US dollar has weakened amid growing anticipation of potential Fed rate cuts in September and recent political developments in the US, leading to dollar selling and further supporting gold prices.
Looking ahead, traders are expected to remain cautious, refraining from making aggressive bets until clearer signals emerge about the Federal Reserve's policy direction.
Consequently, market focus will shift to the upcoming Advance US Q2 GDP data and the US Personal Consumption Expenditures (PCE) Price Index, set for release on Thursday and Friday, respectively. Moreover, traders will keep an eye on the flash global PMIs for short-term market insights.
US Dollar Weakness and Economic Data Boost Gold Prices Amid Fed Rate-Cut Expectations
On the US front, the broad-based US dollar struggled to maintain its recent upward trend and lost its bullish traction, providing support for gold prices.
This decline was driven by growing expectations that the Federal Reserve may begin a rate-cutting cycle in September, along with recent US political developments. These factors have led to increased selling pressure on the US dollar, allowing gold to remain bullish.
On the data front, the Federal Reserve Bank of Richmond reported a deterioration in manufacturing activity for July, with the composite manufacturing index falling to -17 from -10 in June.
Additionally, the National Association of Realtors indicated a 5.4% decline in US existing home sales in June, reaching a seasonally adjusted annual rate of 3.89 million units, the lowest since December and below expectations.
These signs of economic weakness, including declining manufacturing activity and falling home sales, enhance the likelihood of a rate cut, as they could prompt the Federal Reserve to ease monetary policy.
Therefore, the US dollar's retreat from a two-week high, driven by rising expectations of a Federal Reserve rate-cutting cycle in September and recent US political developments, has bolstered gold prices by increasing demand for this safe-haven asset.
Gold Prices Boosted by China's Economic Slowdown and PBoC Rate Cut
On the other hand, gold prices could gain further traction due to sluggish economic activity in China and an unexpected rate cut by the People's Bank of China (PBoC), which have introduced broader market uncertainties.
These factors have increased the safe-haven appeal of gold, as investors seek refuge in stable assets amidst economic volatility. The PBoC's move to lower rates and China's economic slowdown could lead to heightened global market concerns, further driving demand for gold as a safe-haven asset.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2414.07, marking a 0.30% increase on the day. On the 4-hour chart, key technical levels indicate crucial points of potential resistance and support that traders should monitor closely. The pivot point is positioned at $2418.92, suggesting a central level around which the price may oscillate.
Immediate resistance levels are identified at $2435.02, $2453.93, and $2482.70. These levels represent potential selling points if the price attempts to move higher, where the market may encounter selling pressure.
Conversely, immediate support levels are found at $2391.97, $2370.70, and $2350.44. These levels are critical as they represent potential buying points where the price may find support, preventing further declines.
The Relative Strength Index (RSI) is currently at 49, indicating a neutral momentum in the market. This suggests that gold is neither overbought nor oversold, providing a balanced view for both buyers and sellers.
The 50-day Exponential Moving Average (EMA) stands at $2425.78, acting as a dynamic resistance level that traders should watch for potential price reactions.
Given the current market conditions, the recommendation is to sell below $2420. The take profit level is set at $2390, providing a reasonable downside target. A stop loss is advised at $2435 to manage risk, protecting against potential adverse price movements.
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GBP/USD Price Analysis – July 24, 2024
EUR/USD Price Analysis – July 24, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair struggled to gain positive traction, remaining under pressure around the 1.0845 level and hitting an intra-day low of 1.0825.
The downward trend can be attributed to the preliminary Eurozone Hamburg Commercial Bank (HCOB) PMI report for July, which showed an unexpected easing in composite numbers. This was driven by a slowdown in both manufacturing and services, putting pressure on the EUR/USD pair.
The weak economic activity in the Eurozone is expected to boost expectations of more rate cuts by the European Central Bank (ECB).
Furthermore, the renewed strength of the US dollar, supported by recent developments in the US presidential elections, was another key factor affecting the EUR/USD pair.
However, growing expectations that the Federal Reserve may begin a rate-cutting cycle in September could limit gains in the US dollar and help the EUR/USD pair mitigate its losses.
Eurozone Economic Weakness and ECB Rate Cut Expectations Pressure EUR/USD Pair
On the EUR front, the ECB is expected to cut interest rates two more times by the end of the year due to weak economic activity in the Eurozone. The preliminary Eurozone Hamburg Commercial Bank (HCOB) Purchasing Managers’ Index (PMI) report for July showed a slowdown in both manufacturing and services.
The HCOB Composite PMI decreased to 50.1, just above the 50 threshold that separates expansion from contraction, falling short of investor expectations of 51.1. Manufacturing contracted to 45.6, while services expanded at a slower pace of 51.9.
This in turn, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, noted that weak demand in Germany's manufacturing sector is dragging down overall private sector output.
In contrast, French service providers increased activity due to preparations for the Olympic Games.
Despite this, input prices in the services sector rose at a faster rate, and selling prices remained steady, offering no relief to ECB policymakers. Traders currently expect the ECB to deliver two more rate cuts this year, aligning with some ECB officials' views.
Therefore, the weak Eurozone economic data and expectations for additional ECB rate cuts pressure the EUR/USD pair. Despite increased activity in French services, the overall slowdown and rising input prices contribute to the euro's struggles against the stronger US dollar.
Strong US Dollar and Anticipated Fed Rate Cuts Impact EUR/USD Pair
On the US front, the broad-based US dollar managed to stop its bearish bias and regained its positive traction, edging higher near a weekly high of around 104.50.
This strength is due to investor interest ahead of the US presidential elections in November, with market experts predicting a win for Donald Trump despite the Democratic nomination of Vice President Kamala Harris. Additionally, the US dollar's performance is influenced by anticipation of significant upcoming economic data releases.
On the data front, investors are closely watching the preliminary US S&P Global PMI data for July, which is expected to show modest expansion in both manufacturing and services.
The main triggers for the US dollar this week will be the preliminary Q2 GDP and the Personal Consumption Expenditures (PCE) Price Index data, scheduled for release on Thursday and Friday, respectively. The US economy is projected to have grown by 1.9% in Q2, up from the previous 1.4%.
Investors are particularly focused on the core PCE inflation data, the Federal Reserve’s preferred measure of inflation, to assess the timeline for potential interest rate cuts. Markets currently anticipate these rate cuts to begin in September.
Therefore, the strong US dollar, driven by investor interest ahead of the presidential elections and anticipation of significant economic data releases, pressures the EUR/USD pair. However, potential Federal Reserve rate cuts in September may limit the pair's losses.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.0828, reflecting the latest market movements. The 4-hour chart highlights crucial technical levels that traders should monitor closely. The pivot point is positioned at $1.0847, serving as a central level around which price action is likely to oscillate.
Immediate resistance levels are identified at $1.0878, $1.0912, and $1.0949. These levels represent potential selling points where the market may encounter resistance if it attempts to rise.
On the downside, immediate support levels are found at $1.0806, $1.0777, and $1.0753. These levels are critical as they indicate potential areas where buying interest may emerge, preventing further declines.
The Relative Strength Index (RSI) is currently at 25, suggesting that the market is in oversold territory. This indicates a potential for a rebound if buyers step in at lower levels.
The 50-day Exponential Moving Average (EMA) stands at $1.0894, acting as a dynamic resistance level that traders should watch for potential price reactions.
Given the current technical setup, the recommendation is to sell below $1.08474. The take profit level is set at $1.08068, providing a reasonable downside target. A stop loss is advised at $1.08724 to manage risk, protecting against potential upward reversals.
In conclusion, the technical outlook for EUR/USD suggests a bearish sentiment below the pivot point of $1.0847.
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GOLD Price Analysis – July 24, 2024
USD/CAD Price Analysis – July 23, 2024
Daily Price Outlook
Despite a bearish US dollar and dovish Federal Reserve (Fed) expectations, the USD/CAD currency pair has continued its upward trend, trading around the 1.3763 level and reaching an intra-day high of 1.3773.
This upward movement is largely attributed to the recent slump in crude oil prices, which weakens the commodity-linked Canadian dollar and supports the USD/CAD pair. Conversely, selling pressure on the US dollar, driven by expectations of a possible Fed interest rate cut in September, has capped further gains in the USD/CAD pair.
Effects of Anticipated Fed Rate Cuts and Lower Treasury Yields on the USD/CAD Pair
On the US front, the broad-based US dollar has weakened recently due to expectations that the Federal Reserve will soon cut interest rates. Investors believe the Fed may start reducing rates in September, with possible additional cuts later in the year.
This has led to lower US Treasury bond yields, making bonds less attractive and putting pressure on the dollar.
The weaker US dollar, driven by anticipated Fed rate cuts and lower Treasury yields, has supported the USD/CAD pair, pushing it higher as the Canadian dollar weakens from falling oil prices.
Impact of Falling Crude Oil Prices on the USD/CAD Pair
On the other side, the recent drop in crude oil prices to a one-month low has weakened the Canadian dollar, benefiting the USD/CAD pair.
Oil prices were flat on Tuesday after a European Central Bank official suggested a possible rate cut in September, which offset some pressure from renewed hopes for a ceasefire in the Gaza conflict.
Therefore, the decline in oil prices over the previous sessions has further supported the USD/CAD pair by reducing the strength of the commodity-linked Loonie.
USD/CAD - Technical Analysis
The USD/CAD pair is trading at $1.37696, up 0.06% for the day. The 4-hour chart suggests a bullish trend, with the pivot point set at $1.3791. This level is crucial for determining the market's direction. If the price surpasses this pivot point, the bullish trend is likely to continue.
Immediate resistance is observed at $1.3791, followed by $1.3822 and $1.3851. These levels act as potential barriers to any upward movement. On the downside, immediate support is seen at $1.3713, with further support at $1.3674 and $1.3631, which could provide potential entry points for long positions if the price rebounds.
The Relative Strength Index (RSI) is at 74, indicating that USD/CAD is in overbought territory. This suggests that a correction could be imminent, although the overall trend remains bullish. The 50-day Exponential Moving Average (EMA) is at $1.3699, which supports the bullish outlook as long as the price remains above this level.
Given the technical indicators, the suggested trading strategy is to buy above $1.37556, with a take profit target at $1.37910 and a stop loss at $1.37275. This strategy aligns with the current bullish sentiment and key resistance and support levels.
In conclusion, USD/CAD's outlook remains bullish above the pivot point of $1.3791.
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GOLD Price Analysis – July 23, 2024
AUD/USD Price Analysis – July 23, 2024
Daily Price Outlook
Despite the risk-on market sentiment and potential rate hike from the RBA, the AUD/USD currency pair failed to halt its seventh consecutive session of decline and remained under pressure around the 0.6625 level, hitting an intraday low of 0.6621. This decline is attributed to the sharp drop in energy and metal prices.
Additionally, a weak outlook for the Chinese economy has led to copper prices hitting their lowest point in over three months and caused a decline in iron ore prices, further pressuring the Australian Dollar.
Conversely, the bearish US dollar, influenced by growing expectations of a Federal Reserve rate cut in September, has helped limit further losses in the AUD/USD pair. The Australian Dollar may receive some support from strong employment data, which suggest a tight labor market and raise the possibility of an interest rate hike from the RBA.
Investors are also awaiting Australian manufacturing and services PMI figures this week to assess the health of the economy.
Weak Chinese Economy and PBoC Rate Cuts Pressure AUD/USD Through Falling Commodity Prices
It is important to highlight that the weak outlook for the Chinese economy has driven copper prices to their lowest levels in over three months and caused a decline in iron ore prices, adding pressure to the Australian Dollar.
The People's Bank of China (PBoC) has reduced the one- and five-year loan prime rates by ten basis points, to 3.35% and 3.85%, respectively.
This adjustment could impact Australian markets due to their strong trade ties with China. Additionally, China's $715 billion hedge fund industry is bracing for stricter regulations next month, requiring higher asset thresholds and stricter investment and marketing rules, prompting some firms to seek more capital.
Therefore, the weak Chinese economic outlook and PBoC rate cuts could negatively impact the AUD/USD pair due to Australia's trade ties with China and pressure from falling commodity prices.
Strong Australian Employment Data and Potential RBA Rate Hike May Support AUD
Conversely, the Australian Dollar could receive support from robust employment data, which indicates a tight labor market and increases the likelihood of an interest rate hike from the Reserve Bank of Australia (RBA).
Investors are also looking forward to Australian manufacturing and services PMI figures this week to gauge the overall health of the economy.
Sean Langcake from Oxford Economics Australia observed that the current job growth reflects strong demand and ongoing cost pressures, suggesting that the RBA may keep rates steady. However, he noted that an August rate hike remains a possibility.
On the data front, the Australian Bureau of Statistics reported that Employment Change rose by 50,200 in June, well above the market forecast of 20,000. This strong job growth signals a robust labor market and could influence the Reserve Bank of Australia's interest rate decisions.
Therefore, the strong employment data and potential interest rate hike from the RBA could support the AUD, potentially strengthening the AUD/USD pair, especially if the upcoming PMI figures also show positive trends.
US Dollar Pressured by Fed Rate Cut Expectations and Market Reactions
On the US front, the decline in the AUD/USD pair may be short-lived due to the US Dollar facing pressure from expectations of a Federal Reserve rate cut in September. Fed Chair Jerome Powell and other officials have suggested that lower interest rates could be on the horizon due to recent progress on inflation.
Additionally, the market’s limited reaction to President Biden's withdrawal from the 2024 election is impacting the USD. Investors are increasingly focusing on potential benefits from Donald Trump's policies, despite concerns about higher inflation.
These shifts in investor sentiment and inflation expectations are likely to influence both currencies and impact the AUD/USD pair.
AUD/USD - Technical Analysis
The AUD/USD pair is trading at $0.66296, down 0.17% for the day. The 4-hour chart indicates a bearish trend, with the pivot point set at $0.6646. This level is crucial for determining the market's direction. If the price stays below this pivot point, the bearish trend is expected to continue.
Immediate resistance is found at $0.6670, followed by $0.6691 and $0.6716. These levels act as potential barriers to any upward movement. On the downside, immediate support is seen at $0.6621, with further support at $0.6602 and $0.6577, which could provide potential entry points for long positions if the price rebounds.
The Relative Strength Index (RSI) is at 19, indicating that the AUD/USD is in oversold territory. This suggests that a rebound could be imminent, although the overall trend remains bearish. The 50-day Exponential Moving Average (EMA) is at $0.6704, which supports the bearish outlook as long as the price remains below this level.
Given the technical indicators, the suggested trading strategy is to sell below $0.66453, with a take profit target at $0.66104 and a stop loss at $0.66691. This strategy aligns with the current bearish sentiment and key resistance and support levels.
In conclusion, AUD/USD's outlook remains bearish below the pivot point of $0.6646. Traders should monitor these key levels and technical indicators closely to adjust their strategies accordingly. A break above the pivot point could indicate a shift towards a bullish trend, while maintaining below it supports the bearish trend.
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GOLD Price Analysis – July 23, 2024
GOLD Price Analysis – July 23, 2024
Daily Price Outlook
Despite a weaker US dollar, gold prices (XAU/USD) struggled to maintain their previous bullish momentum, falling to around $2,393.56 and hitting an intra-day low of $2,388.38.
This decline was influenced by a positive shift in market sentiment following unexpected interest rate cuts by the People's Bank of China (PBoC).
Additionally, expectations that the Federal Reserve will begin lowering borrowing costs in September, with two more rate cuts anticipated by year-end, have further bolstered market sentiment. This outlook has exerted pressure on safe-haven assets like gold.
Looking ahead, traders are cautious about taking strong positions as they await key US economic data, including Existing Home Sales and the Richmond Manufacturing Index, for short-term trading opportunities.
The primary focus will be on Thursday’s Advance US Q2 GDP report and Friday’s US Personal Consumption Expenditures (PCE) Price Index. Additionally, investors will closely monitor this week’s flash PMIs, which are anticipated to offer clearer insights into global economic trends.
Effects of Fed Rate Cut Expectations and Political Developments on the US Dollar and Gold Prices
On the US front, the US dollar has weakened recently due to expectations that the Federal Reserve (Fed) will soon cut interest rates. Investors anticipate the Fed will begin reducing borrowing costs in September, with potential for two additional rate cuts by year-end.
This outlook has led to a decline in US Treasury bond yields, reducing the attractiveness of bonds and putting downward pressure on the dollar. Consequently, gold prices have been supported, as lower yields enhance gold's appeal compared to holding cash or bonds.
On the other hand, investors have shown limited reaction to US President Joe Biden’s withdrawal from the 2024 election, as they anticipate potential benefits for the US stock market from Donald Trump’s proposed policies.
However, a second Trump presidency could result in higher inflation, which would drive up US Treasury bond yields. Increased bond yields make gold less attractive to investors, who would prefer the higher returns from bonds.
Therefore, expectations of rising inflation and bond yields under Trump could lead to lower gold prices, as investors might shift their funds away from gold in favor of more profitable bonds.
Impact of People’s Bank of China Rate Cuts on Global Market Sentiment and Gold Prices
Moreover, global market sentiment has improved following unexpected interest rate cuts by the People's Bank of China (PBoC). The PBoC reduced key rates, including the one-year and five-year loan prime rates, by 0.1 percentage points each.
This move surprised investors, especially after a recent meeting did not offer immediate economic stimulus. The rate cuts have boosted global risk appetite, encouraging investment in riskier assets.
However, this shift has posed a challenge for gold, traditionally a safe-haven asset during times of uncertainty, leading to downward pressure on its prices.
Thus, the unexpected rate cuts by the People’s Bank of China have made investors more willing to take risks, which has reduced gold's attractiveness as a safe-haven asset.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2388.83, down 0.02%. The 4-hour chart analysis reveals crucial levels that could guide market participants. The pivot point stands at $2404.13, acting as a critical level for market direction.
Immediate resistance is seen at $2420.88, followed by $2436.35, and then $2454.06. These levels indicate potential barriers to upward movements. On the downside, immediate support is identified at $2384.48, with further support at $2369.02 and $2350.56. These levels are essential for traders to watch for potential rebounds or further declines.
The Relative Strength Index (RSI) is currently at 33, suggesting that gold might be in oversold territory, which could indicate a potential for a rebound. However, the 50-day Exponential Moving Average (EMA) is at $2415.98, reinforcing the bearish outlook below this level.
Given the technical setup, the recommended trading strategy is to sell below $2400, with a take profit target at $2373 and a stop loss at $2420. This strategy aligns with the current bearish trend, considering the resistance levels and the RSI indicator.
In summary, gold's technical outlook remains bearish below the $2404.13 pivot point. A break above this level could shift the sentiment to a more bullish stance, while maintaining below this level supports the bearish trend.
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USD/CAD Price Analysis – July 23, 2024
EUR/USD Price Analysis – July 22, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward trend, trading robustly around 1.0891 and reaching an intra-day peak of 1.0903.
This rally was bolstered by a weakening US dollar, which lost momentum due to recent US political developments and heightened expectations of a Federal Reserve rate cut cycle potentially beginning in September.
Additionally, the European Central Bank's decision to keep interest rates unchanged and refrain from signaling any imminent rate cuts at its upcoming meeting further supported the euro, contributing to the gains in the EUR/USD pair.
Moving ahead, investors are keeping an eye on German Retail Sales and the US Chicago Fed National Activity Index, both due later today. Meanwhile, they are watching for signals about the Federal Reserve's future actions, which will impact dollar prices.
Political Shifts and Fed Rate Cut Expectations Weaken the US Dollar, Supporting EUR/USD
On the US front, the broad-based US dollar starts the new week on a bearish note due to recent political developments. US President Joe Biden’s surprising decision to step down from the 2024 Presidential election raises the probability of Donald Trump becoming the next president.
This political shift, combined with expectations that the Federal Reserve might cut interest rates in September, has made investors more willing to take risks.
As a result, the US dollar, usually seen as a safe-haven asset, loses strength and supports the EUR/USD pair. Additionally, rising bets on a Federal Reserve rate cut in September and the weak US labor market exert selling pressure on the dollar.
However, the CME FedWatch Tool shows less than a 5% probability of a move at the July meeting, but a nearly full rate cut is expected in September. New York Fed President John Williams indicated a rate cut could be warranted in the coming months, but not in July.
ECB’s Steady Rate Policy and Cautious Outlook Boost EUR/USD
On the other hand, the upticks in the EUR/USD pair are further bolstered by the ECB left interest rates unchanged last week and gave no hints about rate cuts at its next meeting.
ECB President Christine Lagarde indicated that although inflation in the Eurozone is getting better, high rates need to be maintained for now. The likelihood of a rate cut in September has decreased from 73% to 65%.
This cautious approach by the ECB is expected to support the euro against the US dollar. In short, the euro benefits from the ECB’s decision to hold rates steady and its careful, data-based strategy.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.08846, reflecting a modest gain of 0.09%. On the 4-hour chart, the pivot point is situated at $1.0876, which acts as a crucial marker for market sentiment.
Immediate resistance is identified at $1.0904, with subsequent resistance levels at $1.0924 and $1.0948. On the downside, immediate support lies at $1.0861, followed by stronger support at $1.0844 and $1.0825.
Technical indicators provide a nuanced picture. The Relative Strength Index (RSI) is currently at 44, suggesting that the currency pair is in neutral territory. This indicates that there is no immediate overbought or oversold condition, leaving room for further price movements in either direction.
The 50-day Exponential Moving Average (EMA) stands at $1.0888, slightly above the current price, hinting at a potential bearish trend if the price remains below this level.
Given the technical setup, a cautious approach is advised. A sell entry is recommended below the pivot point at $1.08953.
The suggested take profit level is $1.08603, aligning with the immediate support level. To mitigate risk, a stop loss should be placed at $1.0920, just above the next resistance level, to guard against unexpected upward movements.
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GOLD Price Analysis – July 22, 2024
GBP/USD Price Analysis – July 22, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair maintained its upward trend and remained well-bid around the 1.2927 level, hitting an intra-day high of 1.2940.
The upward rally was supported by a bearish US dollar, which lost traction due to recent US political developments and rising expectations of a Federal Reserve rate-cut cycle starting in September.
On the other side, the diminishing probabilities of an August rate cut by the Bank of England have also played a significant role in underpinning the GBP/USD pair.
Looking forward, there are no major economic reports from the UK or US on Monday, so the GBP/USD pair will be influenced by changes in the US dollar. Market attention will focus on US political events, which will affect the broader risk sentiment and potentially boost the GBP/USD pair.
US Dollar Weakens on Political Shifts and Rate Cut Expectations, Boosting GBP/USD
On the US front, the broad-based US dollar starts the new week on a bearish note due to recent political developments. US President Joe Biden’s surprising decision to step down from the 2024 Presidential election raises the probability of Donald Trump becoming the next president.
This political shift, combined with expectations that the Federal Reserve might cut interest rates in September, has made investors more willing to take risks.
As a result, the US dollar, which is usually seen as a safe-haven asset, loses strength. This weakness in the dollar supports the GBP/USD pair, making the British pound stronger against the greenback.
GBP/USD Strengthens on Diminished Rate Cut Expectations and Strong UK Economic Data
On the other hand, the upticks in the GBP/USD pair are further bolstered by reduced chances of an interest rate cut by the Bank of England (BoE) in August. BoE Chief Economist Huw Pill mentioned earlier this month that more work is needed to control persistent inflation in the UK.
Meanwhile, UK consumer inflation rose by 2% year-on-year in June, slightly more than expected, following better-than-expected GDP growth of 0.4% in May. These factors have led investors to delay their expectations for a rate cut, supporting the British pound against the US dollar.
Therefore, the reduced probability of a Bank of England rate cut, combined with rising UK inflation and strong GDP growth, strengthens the GBP/USD pair by boosting investor confidence in the British pound.
GBP/USD - Technical Analysis
GBP/USD is currently trading at $1.29145, reflecting a slight increase of 0.05%. The 4-hour chart shows a pivot point at $1.2939, serving as a critical threshold for market movements.
Immediate resistance is pegged at $1.2972, with further resistance levels at $1.3010 and $1.3046. On the downside, immediate support is seen at $1.2875, followed by deeper support levels at $1.2834 and $1.2782.
The technical indicators reveal a cautious market sentiment. The Relative Strength Index (RSI) is at 39, indicating that the pair is approaching oversold territory. This could signal potential buying interest if the RSI continues to decline.
The 50-day Exponential Moving Average (EMA) stands at $1.2939, slightly above the current price, suggesting a bearish short-term outlook if the price remains below this level.
Given the technical configuration, a sell strategy is recommended below the pivot point of $1.29400.
The proposed take profit level is $1.28800, aligning with the immediate support zone, offering a target for potential downside movement. A stop loss should be set at $1.29800, just above the first resistance level, to mitigate risk against unexpected upward price shifts.
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GOLD Price Analysis – July 22, 2024
GOLD Price Analysis – July 22, 2024
Daily Price Outlook
Gold (XAU/USD) started the new week on a bullish note, halting its three-day downtrend. It gained positive momentum, climbing above the $2,400 level, with an intraday high of $2,412.
This rebound was primarily driven by a weaker US dollar, influenced by recent US political developments and rising expectations of a Federal Reserve rate-cut cycle starting in September.
Moreover, the ongoing concerns about slowing Chinese economic growth, persistent geopolitical risks from the prolonged Russia-Ukraine conflict, and long-lasting Middle East tensions have enhanced gold's appeal as a safe-haven asset.
Looking ahead, investors are keenly awaiting additional signals about the Federal Reserve's future actions, which will likely impact gold prices.
This week’s flash PMI report and the US Personal Consumption Expenditures (PCE) Price Index data, scheduled for release on Friday, are expected to offer further understanding regarding global economy and create short-term trading opportunities for gold.
US Dollar Weakens Amid Political Developments and Fed Rate Cut Expectations, Boosting Gold Prices
On the US front, the broad-based US dollar lost momentum and turned bearish after President Joe Biden announced he’s leaving the presidential race. Investors who expected Trump to win started changing their bets.
Now, Vice President Kamala Harris is seen as the top Democratic candidate, but former President Donald Trump is still the favorite in betting markets. On the other hand, market participants expect the Federal Reserve to cut interest rates in September, which has weakened the US dollar.
Therefore, the expected Federal Reserve rate cut and weakened US dollar have boosted gold's appeal as a safe-haven investment, leading to rising gold prices as investors seek stability.
Geopolitical Tensions and Weak Chinese Economic Growth Boost Gold Prices
On the economic front, China's economy grew by 4.7% year-on-year in the second quarter, missing expectations and slowing compared to earlier in the year. This weaker growth, coupled with sluggish consumer demand, is pushing up gold prices as investors seek safe havens amid global uncertainties.
The ongoing Russia-Ukraine war and Middle Eastern conflicts are also contributing to gold's appeal.
Recently, Israeli forces attacked the Nuseirat refugee camp 63 times in a week, resulting in 91 Palestinian deaths and 251 injuries.
Israeli Prime Minister Netanyahu is sending negotiators to resume talks on captives, with fighting continuing in Gaza, where the death toll stands at 38,983 and injuries at 89,727. Since the October 7 Hamas attacks, Israel has reported 1,139 deaths, with captives still held in Gaza.
Hence, the weaker economic growth in China and ongoing global conflicts, including the Russia-Ukraine war and Middle East tensions, have heightened gold's appeal as a safe-haven asset, driving up its prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2405.36, up a modest 0.03%. On the 4-hour chart, the pivot point is positioned at $2412.14, indicating a critical juncture for traders. Immediate resistance is seen at $2435.02, with further resistance levels at $2453.93 and $2482.70.
On the downside, immediate support is identified at $2393.69, followed by stronger support at $2370.70 and $2350.44.
Technical indicators suggest a mixed outlook. The Relative Strength Index (RSI) is currently at 36, indicating that gold is approaching oversold territory but is not there yet.
This could imply potential buying interest if the RSI continues to drop. The 50-day Exponential Moving Average (EMA) stands at $2421.99, which is above the current price, suggesting a bearish trend in the short term.
Given the technical setup, a sell entry is recommended below the pivot point at $2412. The suggested take profit level is $2381, aligning with support levels that could act as potential targets for a downward move.
A stop loss should be placed at $2435 to protect against upside risks, which coincides with the immediate resistance level.
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EUR/USD Price Analysis – July 19, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair continued its downward trend, settling around 1.0884 and hitting an intraday low of 1.0876.
This decline was driven by a strengthening US dollar, bolstered by growing speculation that the Republican Party might win the upcoming US Presidential elections.
Additionally, the EUR/USD pair's losses were exacerbated by comments from ECB official Villeroy, who suggested that two more rate cuts this year might be appropriate. This outlook weighed on the euro, further contributing to the pair's decline.
US Dollar Strengthens Amid Fed Rate Cut Speculation and Rising Unemployment, Potentially Impacting EUR/USD
On the US front, the broad-based US dollar is gaining strength even though investors anticipate that the Federal Reserve (Fed) might start cutting interest rates in September, as they believe inflation is moving closer to the 2% target.
Policymakers, however, are seeking more conclusive data before making a decision. The speculation around Fed rate cuts increased following June’s Consumer Price Index (CPI) report, which revealed a return to disinflation.
Both annual headline and core CPI slowed more than expected, with monthly headline inflation declining for the first time in over four years. Additionally, easing conditions in the US labor market have further bolstered expectations for rate cuts.
On the data front, the Unemployment Rate increased to 4.1% in June, the highest level since November 2021. Initial Jobless Claims for the week ending July 12 reached 243,000, surpassing both the expected 230,000 and the previous week’s 223,000. This rise in claims suggests more people are seeking unemployment benefits than anticipated.
Therefore, the bullish US dollar amid rising unemployment and expectations of Fed rate cuts could weigh on the EUR/USD pair, potentially causing the euro to depreciate against the dollar.
ECB's Uncertain Rate Cut Outlook and Lower Growth Projections May Weaken Euro
On the EUR front, the ECB kept interest rates unchanged on Thursday, with President Christine Lagarde avoiding any firm commitment to future rate cuts.
However, ECB policymaker Francois Villeroy de Galhau indicated that markets expect two more rate cuts this year, with possible policy tightening starting in September and continuing in December.
The ECB’s Survey of Professional Forecasters revealed that price pressures are expected to remain around 2.4%, returning to 2.0% by 2025. The growth target for 2025 was revised down to 0.7% from the previous estimate of 0.5%.
Therefore, the ECB's uncertain stance on rate cuts and lower growth projections may weaken the euro, potentially leading to a decline in the EUR/USD pair as market expectations shift.
EUR/USD - Technical Analysis
The EUR/USD is currently trading at $1.08864, reflecting a modest decline of 0.07%. The 4-hour chart indicates critical levels that traders should monitor closely. The pivot point is set at $1.0920, serving as a key indicator for potential price movements.
Immediate resistance is identified at $1.0909, with subsequent resistance levels at $1.0928 and $1.0948. On the downside, immediate support is at $1.0861, followed by $1.0844 and $1.0825.
Technical indicators suggest a cautious sentiment in the market. The Relative Strength Index (RSI) stands at 42, indicating a slight bearish tilt but not yet in oversold territory. The 50-day Exponential Moving Average (EMA) is positioned at $1.0880, just below the current price, acting as a potential support level.
Given the technical setup, traders might consider placing a buy order above the 50-day EMA at $1.08805 to capitalize on potential upward momentum.
The suggested trade setup includes an entry price above $1.08805, a take profit target at $1.09199, and a stop loss at $1.08598. This strategy aims to leverage a rebound while maintaining a controlled risk profile.
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GOLD Price Analysis – July 19, 2024