Daily Price Outlook

The EUR/USD currency pair managed to halt its previous losing streak and garnered some buying interest during the Asian session on Friday, reversing a significant portion of the prior day's decline, which had taken it to the 1.0685 region, a three-month low. However, this upward movement was largely fueled by the mild weakness in the US dollar. On the contrary, the potential for the Federal Reserve to continue raising interest rates could limit the substantial gains for the Euro (EUR) against the US dollar.

USD Retreats Amid Profit-Taking and Rate Hike Expectations

The broad-based US dollar has retreated from recent highs as investors take profits ahead of China's inflation data and the G20 leaders summit. This decline is driven by lower US Treasury bond yields and a steadier stock market, reducing demand for the safe-haven US dollar. However, the dollar may not fall significantly because the Federal Reserve (Fed) plans to keep raising interest rates, which supports bond yields. Strong US jobless claims and positive economic data indicate a robust US economy, reinforcing the Fed's rate hike strategy.

This suggests the EUR/USD pair could experience some upward pressure due to the weaker US dollar stemming from improved market sentiment. Still, potential rate hikes by the Federal Reserve could limit significant gains for the Euro (EUR) against the US dollar (USD).

Mixed Signals from ECB and Upcoming Data

On the flip side, European Central Bank (ECB) officials have given mixed signals regarding future interest rate increases. While Slovak policymaker Peter Kazimir supports a rate hike in September due to high inflation, ECB Governing Council member Ignazio Visco believes the ECB is nearing a point where it should stop raising rates. This uncertainty could discourage traders from making strong bullish bets on the Euro (EUR) and may limit significant gains for the EUR/USD pair, as the lack of clarity from the ECB affects market sentiment and expectations for the Euro's performance against the US dollar.

Looking forward, traders will pay attention to German CPI data and French Industrial Production figures for market direction. No significant US economic data is expected, so the US dollar's fate depends on bond yields and overall market sentiment. The EUR/USD pair is likely to continue its eight-week losing streak, with a downward trend expected due to uncertainty ahead of the important ECB meeting next week.

EUR/USD - Technical Analysis

The EUR/USD currency pair has firmly established support at the 1.0700 threshold, currently exhibiting a mild upward tendency, influenced by positive stochastic readings. There's potential for the pair to approach and test the pivotal 1.0785 resistance level before anticipated retracement.

The descending channel remains a dominant force in dictating the primary bearish trajectory, with the EMA50 consistently reinforcing this movement. The overarching bearish outlook remains intact for the foreseeable future unless the currency manages to breach and sustain above the 1.0785 mark. It's worth noting that our subsequent significant objective is pegged at 1.0635.

Today's trading range is projected between the support at 1.0635 and resistance at 1.0785.

Daily Price Outlook

Gold prices (XAU/USD) have continued their upward momentum, bouncing back from a recent one-week low of approximately $1,915. They have surged by over 0.30% in the current trading day and are currently hovering around the $1,925-$1,926 range. However, the upward rally could be associated with the growing concerns regarding a potential global economic downturn and the deteriorating relations between the United States and China, which have prompted some investors towards the gold.

Gold Gains Amid Global Economic Worries and US-China Tensions

It is worth noting that China's recent ban on officials using iPhones for work and US Secretary of Commerce Gina Raimondo's stance that tariffs on China won't change until a Treasury review are adding to the unease. These factors are making investors cautious, and driving up demand for gold as a safe-haven asset, leading to its price increase.

It should be noted that the ongoing uncertainty surrounding China's economic conditions, as well as downward revision of Japan's second-quarter GDP growth, has fueled worries about the possibility of a more global economic slowdown. As a result, investors are increasingly turning to gold as a safe-haven asset in the midst of these uncertainties.

Weaker US Dollar Boosts Gold Amid Fed's Hawkish Stance

Moreover, the slightly weaker US Dollar is providing an additional boost to the Gold price. As we mentioned earlier, investors are increasingly seeking safe havens, resulting in a drop in US Treasury bond yields. Consequently, traders are scaling back their bullish positions on the USD, particularly following its recent climb to the highest level since March 9. Hence, the softer Dollar typically drives up demand for commodities priced in USD, such as gold.

However, there is a growing consensus that the Federal Reserve (Fed) will maintain its hawkish stance, keeping interest rates elevated for an extended period. This anticipation could potentially put a cap on the upward momentum for XAU/USD.

Looking ahead, investors will remain cautious as they await China's inflation data and the upcoming G20 leaders summit this weekend. In the meantime, the overall market sentiment will continue to play a crucial role in influencing Gold's short-term movements.

GOLD(XAU/USD) - Technical Analysis

The gold price began today's trading on a notably positive note, breaking free from the recent intraday bearish constraints. It is now on course to achieve anticipated gains in the forthcoming sessions. Key milestones include surpassing the $1,929 mark, which would signify a trajectory towards $1,945.20 as the next primary target.

Thus, a bullish outlook is forecasted for today, bolstered by optimistic stochastic indicators. It's crucial to note that maintaining above the $1,929 level is pivotal for this bullish wave. Failure to do so could counteract this positive trend and result in a price pullback.

Today's anticipated trading range lies between a support of $1,915 and a resistance of $1,945.

Daily Price Outlook

During the Asian trading session on Thursday, the USD/JPY currency pair continued its upward movement, reaching levels not seen since November 2022, trading within the range of 147.80 to 147.85. This uptrend is primarily attributed to the strength of the US dollar, which is currently near its highest point in six months. However, the driving factor behind this strength is the growing anticipation of further interest rate hikes by the Federal Reserve.

On the other side, there are concerns about potential currency intervention by Japanese authorities, and overall market sentiment remains cautious. This caution is leading investors to seek the safety of the Japanese yen (JPY), acting as a safe-haven currency. As a result, the substantial advances in the USD/JPY pair are somewhat limited.

Strong US Economic Data Boosts USD/JPY Pair

The broad-based US dollar is gaining traction and remained strong, reaching a six-month peak following the release of encouraging US economic data. This robust performance is notably boosting the USD/JPY pair. The US Institute for Supply Management (ISM) Services Purchasing Managers' Index (PMI) for August exceeded even the most optimistic predictions, surging to 54.5, marking the highest level since February. A deeper look into the report reveals an increase in new orders and businesses reporting higher prices, indicative of a resilient US economy and persistent inflation pressures.

These developments have boosted the prospect of the Federal Reserve (Fed) implementing an interest rate hike in November. Hence, the expectation that the Fed will maintain higher rates for an extended period is underpinning elevated US Treasury bond yields and providing further support to the US dollar and contributes to the USDJPY pair gains.

JPY Underperforms Due to BoJ's Dovish Stance and Intervention Fears

Across the ocean, the Japanese Yen (JPY) is struggling due to the Bank of Japan's (BoJ) persistent commitment to loose monetary policies, which discourages bullish positions on the USD/JPY pair. There's also concern that Japanese authorities might intervene in the forex markets to strengthen the JPY. Japan's top currency diplomat, Masato Kanda, issued a warning about the JPY's depreciation and the possibility of measures against speculative activities.

This, along with a cautious equity market sentiment, boosts the JPY's safe-haven appeal and limits USD/JPY pair gains. In the meantime, investors seems worried about rising borrowing costs and a slowdown in China, reducing appetite for riskier assets.

USD/JPY - Technical Analysis

The USD/JPY pair encountered a brief downtrend, touching the 147.00 barrier, before regaining momentum in an attempt to continue its anticipated bullish trajectory in both the intraday and short-term scopes.

The positive forecast remains grounded, bolstered by the EMA50 which underpins the price. It's essential to note that a breach of the 146.55 level might instigate a temporary bearish correction before the price ascends once more.

For today, the projected trading spectrum is demarcated between the support at 147.00 and the resistance at 148.40

Daily Price Outlook

Gold price (XAU/USD) managed to stop its three-day losing streak and gained some fresh traction on Thursday. However, this uptick can be attributed to a combination of factors, including a generally pessimistic sentiment in the stock markets, concerns about China's economic situation, and ongoing trade tensions. As of now, the XAU/USD pair is hovering just below the $1,920 mark, posting a modest gain of nearly 0.15% for the day.

It's worth noting that the equity markets are showing signs of weakness, prompting investors to seek refuge in safe-haven assets such as gold. Moreover, worries about the worsening economic situation in China and the ongoing trade disputes between the United States and China are lending support to the XAU/USD pair. On the other hand, there are expectations of more interest rate hikes by the Federal Reserve, which could boost the value of the US dollar and potentially limit the upside for gold.

Gold Gains Support Amidst China Concerns and Trade Tensions

As we mentioned above, the ongoing concerns about China's worsening economic conditions and long-lasting US-China trade tensions are having a noticeable impact on investor sentiment. This is evident in the overall weaker performance of equity markets. These factors, in turn, are bolstering the safe-haven appeal of precious metals like gold. Furthermore, the subdued performance of the US Dollar is offering additional support to the price of gold. However, it's important to note that despite these factors, a significant upward move in gold prices remains relatively inaccessible at this point.

US Economic Strength and Fed Rate Hike Expectations Impacting XAU/USD

On the flip side, the outlook for the US economy appears to be influencing the trajectory of the US dollar and, consequently, the performance of the XAU/USD pair. The Institute for Supply Management (ISM) reported a surprising acceleration in business activity within the US services sector for August, with the non-manufacturing PMI rising from 52.7 in July to 54.5 last month, marking its highest level since February.

Moreover, the report revealed an increase in new orders, indicating strength in the US economy, and a higher Prices Paid sub-component, hinting at lingering inflation pressures. These developments have raised the probability of another 25 basis points Fed rate hike by year-end, causing the yield on the 10-year US government bond to approach its August 23 peak and pushing the USD to its highest level since March 9. These factors are expected to limit any significant correction in the US dollar and cap potential gains for XAU/USD.

GOLD(XAU/USD) - Technical Analysis

Gold prices have distinctly retraced, approaching the anticipated primary target level at $1,913.15. Current indicators suggest an ongoing decline, potentially reaching the vicinity of $1,890.00, especially after surpassing the preceding benchmark.

Given this backdrop, we project a bearish trajectory in the near future, further underscored by the downward pressure exerted by the EMA50. It's imperative to highlight, however, that any breach above the $1,929.00 mark could halt the anticipated downtrend and prompt an intraday price recovery attempt.

Today's projected trading range lies between a support at $1,900.00 and a resistance at $1,930.00.

Daily Price Outlook

The EUR/USD currency pair is on a downward trend and recently hit an intraday low around 1.0718. However, the decline is mainly due to disappointing Eurozone data, causing EUR/USD to drop by 0.14% to 1.0709 level. It is worth noting that the shared currency is under pressure because the European Central Bank (ECB) is in a silent period before its upcoming monetary policy meeting, creating uncertainty.

Furthermore, concerns about a Eurozone recession contrast with the more positive outlook for the US economy, fueled by discussions of a softer landing. These contrasting economic situations are causing the major currency pair (EUR/USD) to remain weak, with traders closely watching for important economic data like Germany's Industrial Production numbers for July and the final Eurozone Gross Domestic Product (GDP) figures for the second quarter (Q2) to get a better sense of the economic trends in these regions.

Eurozone's Q2 2023 GDP Growth Falls Short of Expectations

According to the final estimate by Eurostat, the Eurozone's economy grew less than anticipated in the second quarter of 2023. The Gross Domestic Product (GDP) for the region expanded by just 0.1% in the quarter ending June, compared to the initial estimate of 0.3% and market expectations of the same figure. On an annual basis, the Eurozone's GDP grew by 0.5%, lower than the initially estimated 0.6% and below market expectations of a 0.6% increase. Hence, this disappointing economic data has put additional selling pressure on the Euro, causing the EUR/USD currency pair to drop by 0.14% to a trading rate of 1.0709.

German Industrial Production Declines in July, Weighs on Euro

Elsewhere, official data revealed that German Industrial Production in July fell more than anticipated, signaling further challenges in the country's manufacturing sector. Industrial output in Germany, a key player in the Eurozone, declined by 0.8% on a month-on-month basis, according to figures adjusted for seasonal and calendar effects, compared to the expected -0.5% and the previous month's -1.4%.

On an annual basis, Germany's Industrial Production decreased by 2.1% in July, in contrast to a 1.5% drop in June. Therefore, these weak industrial numbers have left the Euro vulnerable against the US Dollar, with the EUR/USD currency pair slipping by by 0.14%.

US Dollar Gains Strength on Positive Economic Indicators and Global Concerns

Across the ocean, the US Dollar found support from a surprisingly positive ISM Services PMI. This, along with optimistic statements from the Federal Reserve about the US economy's strength, made people more comfortable with the idea of higher interest rates and a smooth economic transition, as suggested by the Fed's Beige Book. Furthermore, the ongoing tensions between the US and China over trade and Taiwan, plus worries about weaker economies in other major countries, boosted the demand for the US Dollar. This weighing on the EUR/USD pair.

EUR/USD - Technical Analysis

The EUR/USD pair continues its bearish trajectory, approaching our primary forecasted level at 1.0700. As the market opened, the currency exhibited a lateral movement, signaling an anticipation of further bearish momentum to guide the price towards its subsequent target at 1.0635.

The descending channel remains a dominant factor in steering the anticipated bearish movement, further bolstered by the consistent influence of the EMA50. It's crucial to underscore that sustaining this bearish course hinges on the price maintaining below the thresholds of 1.0785 and 1.0815.

Today's trading parameters are projected to span from a support level at 1.0635 to a resistance level at 1.0785.

Daily Price Outlook

The AUD/USD currency pair has found support around the mid-0.6300s for the second day in a row and is recovering slightly from its lowest point since November 2022, which it reached this Wednesday. However, it's struggling to break above the 0.6400 level during the early European session. The pair strives to rebound from its year-to-date low, but its upward momentum remains limited. However, the slightly improved Australian GDP provides some relief as demand for the US dollar remains subdued. However, concerns loom over China's economic outlook, restraining any substantial gains, with traders awaiting the US ISM Services PMI for clearer market direction.

USD Pauses, Australian GDP Boosts AUD/USD

However, the US Dollar is taking a breather after its recent climb to a six-month high. This pause, combined with a positive Australian GDP report, is prompting some short-covering in the AUD/USD currency pair. It is worth noting that the Australian Bureau of Statistics revealed that the economy grew by 0.4% from April to June, slightly exceeding the expected 0.3% and surpassing the previous quarter's 0.2% growth. On an annual basis, it came in at 2.1%, just below the 2.3% seen in the first quarter. This better-than-expected economic performance in Australia is contributing to the Aussie dollar's recovery against the US dollar.

AUD/USD Faces Challenges Amid China Worries and US-China Trade Tensions

Meanwhile, the AUD/USD pair is struggling to gain bullish momentum due to concerns about China's worsening economic situation. Furthermore, the ongoing trade tensions between the US and China are capping the gains of the Australian Dollar, which is often seen as a proxy for China's economic performance. In the latest news, US Secretary of Commerce Gina Raimondo mentioned that she doesn't anticipate any changes to the tariffs imposed on China by the previous US administration until the current review by the US Treasury is completed.

Therefore, these factors, combined with the expectation that the Reserve Bank of Australia (RBA) will not raise interest rates further, are weighing on the Australian Dollar.

RBA Holds Steady, Fed Rate Expectations Favor USD

Furthermore, the Australian central bank has maintained its Official Cash Rate at 4.10% for the third consecutive month, signaling a pause in its policy tightening. In contrast, the market anticipates a 25 basis point rate hike by the Federal Reserve (Fed) in 2023, bolstering US Treasury bond yields and the US dollar. Moving on, traders await the US ISM Services PMI release in the early North American session and monitor US bond yields, which will influence the US dollar and create short-term trading prospects.

AUD/USD - Technical Analysis

The AUD/USD pair concluded its trading below the 0.6400 mark yesterday, reinforcing the anticipated bearish trajectory for both intraday and short-term periods, with a clear path towards our target of 0.6300.

The enduring influence of the bearish flag pattern underscores the projected decline, complemented by the downward pressure exerted by the EMA50. It's pivotal to highlight that any surge beyond 0.6400 could disrupt this bearish outlook, prompting the price to initiate a recovery phase.

For today's trading, we project a range bracketed by a 0.6310 support level and a 0.6410 resistance threshold, with prevailing sentiment tilting bearish.

Daily Price Outlook

The EUR/USD currency pair improved its position on Wednesday, moving away from the recent low of around 1.0700. In the previous session, the US Dollar had reached a six-month high near 105.00 against the Euro. However, the USD faced some selling pressure and slipped to a range of 104.80-104.70. Hence, the US Dollar's decline from its six-month high against the Euro on Wednesday led to an improvement in the EUR/USD currency pair. Despite rising US yields, the Euro gained ground, suggesting increased demand for the Euro relative to the US Dollar, resulting in a higher EUR/USD exchange rate.

ECB Council Member's Rate Hike Perspective and Market Reaction

Klaas Knot, a member of the European Central Bank (ECB) Governing Council, suggested in a Bloomberg interview that people who don't expect an interest rate increase next week might be underestimating the possibility of it happening. However, he clarified that it's not guaranteed, just a chance. Knot also stressed that reaching the 2% inflation target by the end of 2025 is the minimum goal. Despite potential economic slowdown, inflation projections are expected to remain similar to those in June. The market response has been muted, and the Euro is trading modestly higher against the US Dollar, hovering between 1.0730 and 1.0725.

Eurozone Retail Sales and Euro Performance

Eurostat's official data for July showed a 0.2% drop in retail sales in the Eurozone, compared to a 0.2% increase in June, falling short of the expected -0.2%. Yearly retail sales declined by 1.0% in July, matching the previous month's -1.0% and slightly beating expectations of -1.2%. Surprisingly, the Euro's performance remained relatively stable, trading at 1.0733, marking a modest 0.11% daily increase, despite the disappointing retail sales figures.

Recent Global Economic Trends

Apart from this, German Factory Orders suffered a significant setback in July, with a year-on-year decline of -11.7%, far worse than the expected -4.0% and a sharp contrast to the previously revised figure of 7.6%. The monthly figures didn't fare any better, dropping by -10.5% compared to the earlier 3.3%. These disappointing indicators align with the downbeat Eurozone Producer Price Index for July and ECB's inflation concerns.

In contrast, the United States saw more positive news, with Factory Orders, excluding transport, increasing by 0.8% despite an overall drop of -2.1% month-on-month in July. Strong shipments and rising inventories also contributed. Moreover, support from Federal Reserve Governor Christopher Waller for a hawkish monetary policy and Cleveland Federal Reserve President Loretta Mester's rejection of rate cuts strengthened the US Dollar.

Furthermore, concerns about more stimulus for China's struggling real estate sector boosted property shares, shifting market sentiment and offering some support to the EUR/USD pair.

EUR/USD - Technical Analysis

The EUR/USD pair currently displays a modest bullish inclination, influenced by the positive momentum indicated by the stochastic. This could lead to interim intraday appreciations before resuming a downward trajectory.

At present, the predominant bearish trend remains intact, exemplified by the descending channel visible on the chart and augmented by the downward pressure from the EMA50. We anticipate that a breach of the 1.0700 mark would pave the way for an ascent towards 1.0635.

Conversely, it's imperative to highlight that surpassing the 1.0785, followed by the 1.0825 thresholds, would disrupt the bearish narrative, prompting the price to embark on short-term recovery efforts. Today's trading is anticipated to oscillate between a support at 1.0640 and a resistance at 1.0790, with the dominant sentiment leaning bearish.

Daily Price Outlook

Gold price (XAU/USD) has extended its recent downtrend, marking a third consecutive day of negative performance after touching a nearly one-month high in the $1,952-$1,953 range last week. During the Asian trading session, XAU/USD slipped to a low not seen in over a week but has failed to sustain significant follow-through, currently hovering near the $1,925 mark with a marginal decline of less than 0.10% for the day. However, the decline is primarily attributed to the prevailing hawkish expectations surrounding the Federal Reserve, which are bolstering US bond yields and thereby supporting the US dollar, thus contributing to the decline in gold prices. Nevertheless, a cautious market sentiment may deter traders from aggressively pursuing bearish positions.

Fed's Rate Outlook and Dollar Strength Impacting Gold

It's important to note that the Federal Reserve is expected to keep interest rates higher for a while, which makes the US Dollar stronger and pushes down Gold prices. This also means that US Treasury bond yields stay high, giving more strength to the Dollar and making Gold less attractive. Even though the Fed might pause rate hikes in September, there's still a chance of one more increase later in the year. This maintains high US Treasury bond yields, supporting the Dollar and putting pressure on Gold. However, Gold is finding some support as a safe-haven asset due to concerns about China's slowing services sector affecting global markets.

China's Economic Concerns and US-China Trade Tensions Impacting Gold

Besides this, there's growing concern about China's slowing services sector, with a recent private survey revealing its slowest growth in eight months. Thus, this raises worries about the weakening Chinese economy and makes riskier investments less attractive. In the meantime, the ongoing trade tensions between the US and China could also boost interest in Gold as a safe-haven asset. US Secretary of Commerce Gina Raimondo mentioned that the current tariffs on China won't change until a US Treasury review is completed.

So, it's wise to wait for stronger selling pressure before assuming Gold's recent rebound from its March low has ended and taking aggressive bearish positions on XAU/USD. Traders are now watching the US ISM Services PMI release for potential impact on the USD and Gold's direction.

GOLD(XAU/USD) - Technical Analysis

The price of gold remains on a declining course, approaching the pivotal support mark set at $1,923. This threshold mirrors the broken neckline of the clear double bottom pattern illustrated on the chart, acting as a barrier to further price drops.

The lingering effects of the recently culminated double top pattern are palpable, enhancing the prospects of the gold price declining past the noted support, steering towards our chief target at $1,913.15. As a result, our forecast is inclined towards a bearish trend in the near term. Importantly, if there's a breach of the $1,929 level, it might trigger a price reversal, ushering in a brief recovery with potential intraday upswings aiming for $1,945.20.

For today's trading, we anticipate a range bordered by the $1,913 support and $1,940 resistance, maintaining a bearish stance.

Daily Price Outlook

Gold price (XAU/USD) failed to stop its losing streak and dropped for the second straight day on Tuesday. The XAU/USD is currently trading just below the $1,940 level, down less than 0.10% for the day. The combination of factors is contributing to this downward pressure on gold. However, the optimism over more stimulus from China continues to weigh on the safe-haven metal. In the meantime, the Fed is expected to maintain higher interest rates for an extended period. This policy stance supports elevated US Treasury bond yields, which, in turn, provide some strength to the US Dollar (USD). Consequently, this strength in the USD acts as a deterrent for gold, given that gold is a non-yielding asset.

Gold Price Outlook Amidst Fed Policy and Labor Market Dynamics

Despite indications of an improved US labor market, the Federal Reserve is anticipated to persist with its policy of maintaining higher interest rates for an extended period. In fact, some market analysts are even contemplating the possibility of a 25 basis point rate hike by year-end. This situation supports elevated US Treasury bond yields and strengthens the US Dollar while putting downward pressure on non-yielding Gold prices.

At the same time, the central bank is likely to maintain interest rates at their current levels during its September meeting. This decision is primarily attributed to the mixed nature of the US job data, where a better-than-expected Non-Farm Payrolls (NFP) figure was offset by a downward revision of the previous month's data and an unexpected uptick in the unemployment rate. Besides, Average Hourly Earnings declined from 4.4% to 4.3% annually, signaling a minor weakening in the labor market. This restrained room for the Fed to raise rates further keeps USD bulls cautious and lends support to Gold priced in US Dollars.

Therefore, it's prudent to wait for sustained selling to confirm whether the recent recovery from the $1,885 level, the lowest since March 13, has concluded and whether aggressive bearish bets on XAU/USD are justified.

China's Stimulus Measures and Positive Risk Sentiment Impact Gold

Furthermore, optimism about China's potential stimulus measures to bolster its economic recovery weakens demand for the safe-haven XAU/USD. China recently injected more US dollars into its economy and eased mortgage rules to aid the property sector, with Country Garden Holdings postponing some payments. China's National Development and Reform Commission (NDRC) plans to create a department to support the private economy, boosting investor confidence. However, the downside for Gold prices appears limited due to expectations that the Federal Reserve is approaching the end of its interest rate hike cycle.

GOLD(XAU/USD) - Technical Analysis

The gold price faced resistance at the $1,945.20 threshold, subsequently pivoting to a bearish trajectory and descending past the $1,938.50 marker. This sets the stage for anticipated downward dynamics in ensuing sessions. This movement is underscored by the manifestation of a double top formation, indicating bearish objectives, initially targeting the $1,929.00 mark. A breach here could set sights on a primary target at $1,913.15.

Given this context, a bearish inclination is projected for today. However, it's crucial to note that a successful move beyond $1,945.20 could reinvigorate the bullish trend, steering the precious metal toward $1,960.00 as a subsequent focal point. The anticipated trading band for today spans a support level of $1,920.00 and a resistance at $1,945.00.

Daily Price Outlook

The USD/JPY currency pair continued its upward trajectory for the third consecutive day on Tuesday, maintaining its positive stance. During the early European session, the pair surged above the mid-146.00s, presently hovering near 146.72, marking a 0.16% gain for the day. Several key factors contributed to this upward momentum. Firstly, Japanese Household Spending witnessed a significant decline, which weighed on the Japanese yen's strength, thereby bolstering the US dollar's position.

Secondly, the mixed US employment data created a sense of uncertainty regarding the Federal Reserve's tightening policy, causing market participants to revise their expectations. Thirdly, upbeat manufacturing PMI data added to the dollar's strength, further supporting the USD/JPY pair.

Investors are now anticipating coming economic releases, including US Factory Orders, US ISM Services PMI, and Japanese Gross Domestic Product (GDP), which may provide additional insights into the currency pair's future movements.

Positive Impact of Weak Japanese Household Spending on USD/JPY Pair

According to recent data, Japanese household spending experienced its sharpest decline in almost two and a half years, with a 5.0% year-on-year drop in July, surpassing the expected 2.5% decrease. This marked the sixth consecutive month of decline. Meanwhile, Japanese Monetary Base data for August showed a 1.2% year-on-year increase, a shift from the previous 1.3% drop.

However, the Bank of Japan (BOJ) is maintaining its loose monetary policy and moving away from yield curve control, with BOJ Board member Toyoaki Nakamura emphasizing the need for more time before considering monetary tightening. However, the divergence in monetary policies between the US and Japan may limit potential downsides for the USD/JPY pair.

Japanese Finance Minister Shunichi Suzuki mentioned that while sudden currency fluctuations are undesirable, there is no current sign of market intervention to support the weakening yen, although they will closely monitor currency movements. Hence, Japan's weak household spending and the BOJ's loose monetary policy have positively impacted the USD/JPY currency pair, contributing to its ongoing rise, supported by policy divergence and a lack of yen-supportive interventions.

Impact on USD/JPY Pair Amid Mixed Economic Data

Apart from this, the mixed US economic data from last week has led to expectations of a more cautious stance from the Federal Reserve (Fed), which is affecting the USD/JPY pair. The CME FedWatch Tool indicates a 93% likelihood that interest rates will remain unchanged in September, with a 38% chance of a rate hike in November.

However, August's Nonfarm Payrolls exceeded expectations at 187K, but the Unemployment Rate dropped to 3.8%. US Manufacturing PMI also outperformed predictions at 47.6. Today, the US dollar's gains are limited as Wall Street observes Labor Day.

USD/JPY - Technical Analysis

The USD/JPY pair has opened today's trading session on an upbeat note, successfully surpassing the 146.55 mark and making endeavors to consolidate above this level. This movement suggests a potential cessation of the recent bearish correction, with the pair positioning to realign with its prevailing bullish trajectory. The anticipated upward targets are set initially at 147.55, progressing to 148.40 as a subsequent focal point.

The EMA50 underpins the pair, bolstering the bullish perspective. This optimistic outlook will persist unless there's a decline below the 146.55 level, further intensified by a drop beneath the 145.95 threshold. For the day, the trading range is projected between a support at 146.10 and resistance at 147.60.