EUR/USD Price Analysis – Sep 13, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward momentum, climbing to 1.1101. This rise is attributed to the Euro (EUR) gaining strength after the European Central Bank (ECB) announced its monetary policy on Thursday.
ECB policymaker Madis Muller’s remarks about growing confidence in inflation control and a moderate economic recovery could boost the EUR. However, concerns over services inflation and temporary inflation spikes may temper gains.
Moreover, the US Dollar (USD) weakened following weaker-than-expected US Producer Price Index (PPI) data for August.
US Dollar Weakens as Fed Rate Cut Speculation Grows, Boosting EUR/USD
On the US front, the broad-based US dollar is facing significant selling pressure. This shift comes as market speculation grows that the Federal Reserve (Fed) might cut interest rates by 50 basis points (bps) at its upcoming meeting on Wednesday.
The probability of this rate cut, as shown by the CME FedWatch tool, has surged to 43% from just 14% following the release of the US Producer Price Index (PPI) data.
On the data front, the PPI report showed that producer inflation increased by 1.7% year-over-year in August, falling short of the expected 1.8% and down from 2.1% in July. Core producer inflation, excluding food and energy prices, rose by 2.4%, missing the forecast of 2.5%.
This slower rate of price increase suggests weak consumer spending, which often boosts expectations that the Fed might lower interest rates.
Hence, the weaker-than-expected US PPI data and growing speculation of a Fed rate cut have led to a stronger Euro (EUR) against the US Dollar (USD). This boosts the EUR/USD pair as traders anticipate a more dovish Fed stance.
EUR/USD Rebounds Despite Weaker Eurozone Industrial Data and Cautious ECB Rate Adjustments
On the EUR front, the Eurozone's industrial sector faced a deeper decline in July, with industrial output dropping by 0.3% month-over-month, matching expectations but worse than June's flat reading. Annually, industrial production fell by 2.2%, an improvement from June's 4.1% drop but still worse than the forecasted 2.7%.
Despite these weak numbers, ECB policymaker Madis Muller expressed growing confidence that inflation is heading in the right direction, though he noted concerns about services inflation and expected a moderate recovery for the Eurozone economy.
Following the European Central Bank (ECB) meeting, the EUR/USD pair rebounded to 1.1100. The ECB cut the deposit facility rate by 25 basis points to 3.50% and adjusted other rates to help support lending and the economy. Although the ECB lowered its growth forecasts for the Eurozone, it expects inflation to pick up again in the fourth quarter of 2024. The ECB did not signal another rate cut for its October meeting, maintaining a cautious approach based on economic data.
Consequently, the weaker Eurozone industrial data and ECB’s cautious rate adjustments initially pressured the EUR/USD pair. However, the EUR/USD rebounded to 1.1100, as the ECB's rate cut and inflation expectations supported the Euro, countering the negative impact.
EUR/USD- Technical Analysis
The EUR/USD pair is trading at $1.10846, up a modest 0.10%, as the currency pair hovers around key technical levels. The recent uptick in price signals bullish momentum, but caution is warranted with the Relative Strength Index (RSI) sitting at 63, nearing overbought territory.
This suggests potential limited upside in the near term, with market participants eyeing key resistance and support levels for further guidance.
The pivot point is located at $1.1090, which serves as a critical reference for intraday price movements. Immediate resistance is seen at $1.1121, followed by stronger levels at $1.1151 and $1.1185.
A decisive break above these levels could signal the continuation of the bullish trend, potentially triggering further gains toward the $1.12 mark. However, with the RSI approaching higher levels, the currency may face headwinds if buying pressure wanes.
On the downside, immediate support rests at $1.1066, with further support at $1.1041 and $1.1006.
The 50-day Exponential Moving Average (EMA), currently at $1.1058, aligns closely with the support zone, acting as a key level to watch for a potential retracement. Any sustained break below these levels could shift market sentiment towards a bearish outlook.
Strategically, selling below $1.1090 may be favorable, with a target of $1.1040. A stop-loss at $1.1120 would provide appropriate risk management, particularly as the pair tests its immediate resistance levels.
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S&P500 (SPX) Price Analysis – Sep 13, 2024
S&P500 (SPX) Price Analysis – Sep 13, 2024
Daily Price Outlook
The S&P 500 has recently made a strong comeback, reaching an intra-day high of 5,600.71, after a period of volatility and economic uncertainty. Over the past 24 hours, the index has gained considerable ground, thanks to several key factors that have boosted investor confidence and helped stabilize the market.
The major contributor to this positive shift is the rebound in technology stocks. After facing months of pressure and volatility, the tech sector has started to recover, driving much of the recent gains in the S&P 500.
However, the broader economic picture has also brightened, with recent data pointing to signs of stabilization. Positive trends in consumer spending and business investment have helped lift the overall outlook, making investors more optimistic about the economy’s direction.
This renewed confidence has fueled the S&P 500’s upward momentum, as more investors are willing to invest, believing the worst of the uncertainty may be behind us.
Economic Data and Fed Speculation Drive Market Movements and S&P 500 Performance
On the US economic front, the US Dollar has weakened following Thursday’s Producer Price Index (PPI) report, which revealed that inflation is cooling more than anticipated. This has led to speculation that the Federal Reserve might opt for a more substantial interest rate cut in September.
Investors are closely watching for any hints of a shift in the Fed's stance, hoping it could provide further support to the economy.
According to the CME Group’s FedWatch Tool, there's now a 40% chance that the Fed could cut rates by 50 basis points at its next meeting. This possibility has generated excitement in the markets.
Additionally, US Treasury bond yields have fallen to near their lowest levels of 2024, creating a more favorable environment for the S&P 500. As a result, investors are feeling more optimistic, seeing potential for further gains in both the stock market and precious metals.
On the data side, the latest numbers show that inflation in the US is easing. The annual headline Producer Price Index (PPI) rose by 1.7%, slightly below the expected 1.8%, while the core PPI, excluding food and energy, increased by 2.4%, just missing the 2.5% forecast. This cooling inflation suggests some relief from rising prices.
Meanwhile, the US Department of Labor reported that 230,000 people filed for unemployment benefits in the week ending September 7, a bit higher than recent numbers, signaling a mild softening in the labor market. These factors are shaping investor sentiment and influencing the S&P 500’s performance.
Impact of the US Presidential Debate on the S&P 500 Index
On the flip side, the recent US presidential debate between former President Donald Trump and Democratic nominee Kamala Harris has introduced some political uncertainty into the markets. With the debate highlighting key issues such as the economy, inflation, and future economic policies, it's made a significant impact on investor sentiment.
This political drama has contributed to the ongoing volatility of the S&P 500, as market participants keep a close eye on any developments that could sway future policy directions.
Kamala Harris’s win in the debate, as highlighted by a CNN poll, has shifted focus to potential changes if the Democratic ticket takes the upcoming election.
Investors are now closely scrutinizing the candidates' policy proposals, especially those related to taxation, regulation, and economic stimulus.
Harris’s strong performance has brought to light the possibility of significant policy shifts, which could have broad implications for various sectors and the overall market.
As a result, market participants are paying increased attention to how these potential changes might shape the economic landscape.
S&P 500 - Technical Analysis
The S&P 500 (SPX) is trading at $5,595.75, up 0.75% for the day, signaling continued bullish momentum as investors shrug off broader economic concerns. While the index has posted steady gains, technical indicators suggest a cautious yet optimistic outlook for the near term.
The Relative Strength Index (RSI) currently reads 59, reflecting neutral territory and leaving room for additional upside without entering overbought conditions.
The pivot point is positioned at $5,645.33, a critical level that traders will closely monitor for direction. Immediate resistance lies slightly below this at $5,641.79, with subsequent resistance levels at $5,699.82 and $5,766.23.
A break above these levels could pave the way for further gains, potentially pushing the index to fresh highs as bullish sentiment continues to support the market.
On the downside, immediate support is found at $5,518.48, with additional support at $5,441.61 and $5,381.03.
While the 50-day Exponential Moving Average (EMA) is trending upward, currently at $5,524.79, this provides a solid floor for the index should the market face any short-term volatility or profit-taking.
From a tactical perspective, a buy entry above $5,572 could be a strategic move, targeting the pivot point at $5,645.33 for profit-taking. A stop-loss at $5,520 offers prudent risk management, as it coincides closely with both the 50-day EMA and nearby support levels.
In summary, while bullish momentum remains intact, cautious optimism is warranted given the proximity to key resistance levels and neutral RSI readings.
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GOLD Price Analysis – Sep 13, 2024
AUD/USD Price Analysis – Sep 12, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair managed to halt its downward trend and regain some of its gains around the 0.6676 level, reaching an intra-day high of 0.6695.
These gains occurred despite the US dollar gaining momentum amid decreasing odds for a significant Fed rate cut.
The upward trend in the AUD/USD can be attributed to the risk-on market sentiment, which generally supports the Australian dollar and contributes to its gains.
On the other hand, news that China might cut interest rates on $5 trillion in mortgages to boost consumption has raised concerns about a slowdown in its economy.
This, combined with a slight strengthening of the US Dollar (USD), has led to a sharp decline in the Australian Dollar (AUD).
China's Potential Rate Cuts and USD Strength Impacting AUD
On the AUD front, reports suggest that China might cut interest rates on $5 trillion in mortgages this month to boost consumer spending. This has raised concerns about a slowdown in China's economy, which is the world's second-largest.
These worries have negatively impacted currencies from countries closely linked to China, such as the Australian Dollar (AUD).
Meanwhile, a slight strengthening of the US Dollar (USD) has contributed to the sharp drop in the AUD. The combination of fears about China's economic slowdown and the stronger USD has led to a significant decline in the AUD during the trading session.
Impact of US CPI Report and Fed Rate Cut Expectations on AUD/USD
On the US front, the latest Consumer Price Index (CPI) report showed that overall consumer prices are easing. However, the core CPI data, which excludes volatile items like food and energy, indicates that underlying inflation remains stubbornly high.
This has reduced expectations for a significant rate cut by the Federal Reserve (Fed) at their next meeting. As a result, US Treasury bond yields have risen, pushing the US Dollar closer to its monthly peak.
Despite this, investors believe that the Fed will start easing its policy and cut interest rates by 25 basis points at each of the remaining three meetings in 2024.
This belief, coupled with a positive market mood, has limited further gains for the US Dollar and provided some support for the Australian Dollar (AUD).
Traders are now waiting for the US Producer Price Index (PPI) report to provide new direction for the market.
Therefore, the easing US CPI and persistent core inflation have bolstered US Treasury yields and strengthened the US Dollar, pushing the AUD/USD pair lower. However, expectations of future Fed rate cuts and positive market sentiment have provided some support to the AUD.
AUD/USD - Technical Analysis
AUD/USD is trading at $0.66907, up by 0.25%, reflecting a moderate recovery as the pair attempts to gain traction within a largely subdued environment.
The currency pair is hovering above its 50-day Exponential Moving Average (EMA) at $0.6672, a crucial technical level that has served as dynamic support. This indicates that the bullish momentum could build further if the pair manages to break through immediate resistance levels.
Immediate resistance stands at $0.6720, aligning with the pivot point, which could be a key level for bullish traders.
A break above this resistance could lead AUD/USD toward $0.6751, followed by the next target at $0.6793, suggesting a broader upside potential. However, a failure to breach $0.6720 may limit gains and reinforce selling pressure.
On the downside, immediate support is located at $0.6635, and a move below this could push the pair toward $0.6610 and further down to $0.6580.
The RSI at 60 suggests a mild bullish bias, but it's not yet in overbought territory, signaling there’s room for upward movement.
Traders should be mindful of these key levels. A sustained move above the $0.6720 pivot point is critical for extending the bullish trajectory, while a fall below $0.6635 could signal a deeper correction.
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USD/JPY Price Analysis – Sep 12, 2024
GOLD Price Analysis – Sep 12, 2024
Daily Price Outlook
Gold (XAU/USD) has eased back slightly from its intraday highs but remains solidly above the crucial $2,500 mark in early European trading on Thursday.
The latest US Consumer Price Index (CPI) report, released on Wednesday, highlighted persistent underlying inflation, which has dampened expectations for a major interest rate cut by the Federal Reserve.
This has led to a modest increase in US Treasury bond yields and boosted the US Dollar, pushing it closer to its monthly peak. Consequently, the stronger dollar is putting some pressure on the gold market, which, unlike currencies, doesn’t offer any yield.
In addition to this, the positive sentiment in the equity markets is also weighing on gold, as investors shift away from safe-haven assets.
has further limited gold's gains. However, the downside for XAU/USD seems to be somewhat protected.
There’s increasing confidence that the Federal Reserve might start cutting rates in September, with expectations of a 25 basis point reduction at each of the remaining meetings this year.
This anticipation, combined with gold’s recent stable range, suggests that traders should be cautious about predicting its short-term direction. All eyes are now on the upcoming US Producer Price Index (PPI) report for new insights.
Impact of US CPI Report on Gold Prices and Market Expectations
On the US front, the broad-based US Dollar strengthened after the latest Consumer Price Index (CPI) report led investors to lower expectations of a larger 50-basis-point interest rate cut by the Federal Reserve next week.
The CME Group's FedWatch tool now shows an 87% chance of a smaller 25 bps rate cut at the next Fed meeting on September 17-18, compared to 71% before the CPI data.
Therefore, the reduced likelihood of a more aggressive policy easing has pushed up US Treasury bond yields and the US Dollar, which could weigh on gold prices since gold does not offer yields.
Traders are now awaiting the release of the US Producer Price Index (PPI) for further direction. However, any market reaction may be limited as the Fed is expected to start cutting rates soon.
The US Bureau of Labor Statistics reported that the headline CPI rose by 0.2% in August, with the yearly rate slowing more than expected from 2.9% to 2.5%, the smallest increase since February 2021.
Meanwhile, core CPI, which excludes food and energy prices, increased by 0.3% in August and by 3.2% over the past year, aligning with July's numbers and market forecasts.
This news is likely to pressure gold prices, as the stronger US Dollar and rising Treasury yields reduce gold's appeal as a non-yielding asset. However, expectations of future Federal Reserve rate cuts may help limit gold's downside.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is showing signs of modest recovery, trading at $2,517.66, up 0.25% during the 4-hour session.
The precious metal has been hovering above key support levels, benefiting from a weaker U.S. Dollar amid expectations of further dovish policy signals from the Federal Reserve.
Traders are eyeing the $2,529 pivot point, a critical resistance level that could signal further upside momentum if breached.
Immediate resistance sits at $2,529.29, which coincides with the 50-period Exponential Moving Average (EMA), currently at $2,508.80.
A break above this level could target the next resistance zones at $2,540.41 and $2,550.45. If the price manages to hold above these levels, a more bullish trend may develop, possibly pushing Gold toward the $2,560 mark in the near term.
On the downside, immediate support is located at $2,507.77, and failure to maintain this level could trigger a deeper pullback toward $2,498.09. The next key support rests at $2,485.65, where traders might anticipate stronger buying interest.
The Relative Strength Index (RSI), currently at 56, suggests that the market is in neutral territory, with neither overbought nor oversold conditions, leaving room for further movement in either direction.
For now, the overall technical outlook for Gold remains cautiously bullish, but traders should closely monitor price action around the $2,529 level. Should the precious metal fail to break above this key resistance, bearish momentum may build, prompting a retreat toward the $2,500 region.
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USD/JPY Price Analysis – Sep 12, 2024
USD/JPY Price Analysis – Sep 12, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair broke its two-day losing streak, trading around 142.90.
This recovery can be attributed to rising odds of a smaller interest rate cut by the Federal Reserve (Fed) in September, which has supported the US Dollar (USD).
The recent remarks by Bank of Japan (BoJ) board member Naoki Tamura, stating that there is "no preset idea on the pace of further rate hikes," kept the Japanese Yen (JPY) subdued.
Impact of BoJ’s Gradual Rate Hikes and USD Strength on USD/JPY:
The BoJ's gradual approach to rate hikes contrasts with the more aggressive policies of the US and Europe. While Tamura’s comments reinforced the notion of a slower tightening cycle in Japan, the exact timing of when rates will reach 1% remains dependent on Japan’s economic and price conditions.
Meanwhile, the USD gained strength due to diminishing expectations of a larger Fed rate cut, contributing to the USD/JPY rally.
US CPI Report and Fed Rate Cut Expectations Drive USD/JPY:
On the US front, the August Consumer Price Index (CPI) showed headline inflation dropping to a three-year low of 2.5% year-on-year. Despite this, core inflation remained steady, reducing the likelihood of a significant rate cut by the Fed.
According to the CME FedWatch Tool, the probability of a 50 basis point rate cut has sharply declined to 15%, with markets now fully anticipating a 25 bps cut at the September meeting.
This outlook has provided upward momentum for USD/JPY, as expectations of gradual monetary easing by the Fed bolster the USD against the Yen.
USD/JPY - Technical Analysis
USD/JPY is currently trading at 142.817, up by 0.32%, as the pair continues to strengthen alongside the U.S. Dollar.
On the 4-hour chart, the price remains above the 50-day Exponential Moving Average (EMA) at 142.61, which provides key support, keeping the bullish momentum intact.
The pair has shown some consolidation but maintains an overall upward trend, with potential for further gains if resistance levels are cleared.
Immediate resistance lies at 143.51. A break above this level could open the door for further upside, targeting higher resistance zones at 144.24 and 145.16.
The Relative Strength Index (RSI) is currently at 55, signaling moderate bullish momentum, leaving room for additional upward movement.
On the downside, immediate support is found at 141.69. If this level fails, the next support sits at 140.70, with a potential deeper pullback toward 139.78 if selling pressure intensifies.
A break below these levels could signal a bearish reversal, though the current uptrend is supported by the 50 EMA at 142.61.
In conclusion, USD/JPY maintains a bullish outlook as long as it stays above the pivot point at 142.36. Traders should watch for a break above 143.51, which could trigger further gains, while a fall below 141.69 could signal a near-term bearish shift.
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AUD/USD Price Analysis – Sep 12, 2024
GBP/USD Price Analysis – Sep 11, 2024
Daily Price Outlook
Despite weaker-than-expected UK economic data, the GBP/USD pair continued its upward momentum, holding steady around 1.3082 for the second day in a row on Wednesday.
The main driver behind this strength was a weakening US dollar, which has been under pressure from expectations of a dovish stance from the Federal Reserve.
Traders are adopting a cautious approach, choosing to stay on the sidelines and wait for the upcoming US consumer inflation figures before making any bold moves.
UK Economic Stagnation and Production Decline Raise Concerns for GBP Amid BoE Rate Cut Expectations
On the BOE front, the UK Office for National Statistics revealed that economic growth was stagnant in July, failing to meet expectations of a modest 0.2% increase. This marks the second consecutive month of flat growth.
Meanwhile, both UK Industrial and Manufacturing Production dropped unexpectedly during this period.
The slowdown in wage growth in the UK has further increased expectations for additional interest rate cuts by the Bank of England (BoE).
These disappointing figures put pressure on the British Pound (GBP) as investors anticipate that the BoE might lower rates to boost the economy. The combination of flat growth and shrinking production suggests a struggling economy, leading to a more cautious outlook for the GBP.
US Dollar Weakens Amid Dovish Fed Expectations; Upcoming CPI Report to Impact GBP/USD Performance
On the US front, the broad-based US dollar has experienced some selling after a three-day winning streak, partly due to expectations of a dovish Federal Reserve.
This shift provides support to the GBP/USD pair, helping it hold above 1.3110. Traders are currently cautious, opting to wait for the upcoming US consumer inflation figures before making any significant moves.
The US Consumer Price Index (CPI) report, set to be released soon, will be crucial in shaping market expectations for the Federal Reserve's decision on interest rates at their next meeting on September 17-18.
On the data front, the August US Consumer Price Index (CPI) is expected to rise by 0.2%, with the annual rate projected to slow from 2.9% to 2.6%, its lowest level since 2021.
The core CPI, which excludes food and energy, is also anticipated to increase by 0.2%, maintaining a year-over-year rate of 3.2%.
This report is likely to impact the demand for the US dollar and influence the performance of the GBP/USD pair.
GBP/USD- Technical Analysis
The GBP/USD pair is trading higher at $1.31025, marking a 0.22% gain on the day as sterling continues to benefit from positive sentiment surrounding the UK economy.
The currency pair has been trading above key support levels, reflecting cautious optimism ahead of key economic data releases later in the week.
Key technical levels reveal immediate resistance at $1.3101, with the next barrier at $1.3127. Should bullish momentum persist, the pair could push towards $1.3170, representing a significant psychological resistance level.
On the downside, immediate support is located at $1.3012, with further support at $1.2976 and $1.2941, which could trigger bearish momentum if breached.
Technical indicators are pointing to a neutral-to-bullish outlook. The Relative Strength Index (RSI) is at 53, signaling that the market is neither overbought nor oversold, leaving room for further gains.
Meanwhile, the 50-day EMA sits at $1.3120, just above current price action, indicating that a break above this moving average could confirm a more sustained upward trend.
From a strategic perspective, traders may look to buy above $1.30726, targeting the pivot point at $1.31279 for potential profits. A stop-loss at $1.30435 is advised to mitigate downside risks, particularly if the pair retraces towards its support levels.
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EUR/USD Price Analysis – Sep 11, 2024
GOLD Price Analysis – Sep 11, 2024
Daily Price Outlook
Gold prices (XAU/USD) continued their upward momentum on Wednesday, holding strong around the $2,521 mark and reaching an intraday high of $2,528.
The surge is likely driven by speculation of a possible Federal Reserve rate cut, which has weakened the US dollar and bolstered gold's appeal.
Meanwhile, the US Dollar is also weakening due to reactions to the Trump-Harris presidential debate, where many analysts saw Vice President Kamala Harris as the winner.
This has led to less confidence in former President Trump’s policies, which aimed to keep the US Dollar strong by imposing tariffs on countries that didn’t use it.
Meanwhile, ongoing market uncertainty is fueling safe-haven demand for gold, further supporting its rise.
However, traders are exercising caution ahead of the US Consumer Price Index (CPI) report, set to be released later in the day, which could influence market direction.
Impact of US Dollar Weakness and Fed Rate Cut Expectations on Gold Prices
On the US front, the US Dollar (USD) is weakening because traders think the Federal Reserve might cut interest rates soon.
This belief grew after recent data showed inflation is slowing down, which could lead the Fed to lower rates more than expected.
When interest rates drop, gold becomes more appealing since it doesn’t earn interest but its price usually goes up.
According to the CME FedWatch Tool, there's a 67% probability of a 25-basis-point rate cut at the Federal Reserve's next meeting on September 17-18.On the data front, the August US Consumer Price Index (CPI) is anticipated to rise by 0.2%, while the annual rate is expected to slow from 2.9% to 2.6%, marking its lowest level since 2021. The core CPI, which excludes food and energy, is also projected to increase by 0.2%, holding steady at 3.2% year-over-year. These inflation figures will be crucial in determining the Fed's future policy decisions.
Moreover, the US dollar is under pressure because of recent political developments.
In the Trump-Harris debate, many analysts favored Vice President Kamala Harris, reducing confidence in former President Trump’s policies designed to strengthen the USD through tariffs.
Therefore, the weakening US Dollar and anticipated Fed rate cuts make gold more attractive as a non-yielding asset.
Lower interest rates and reduced USD strength boost gold’s appeal, likely leading to higher gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) continues to demonstrate bullish momentum, currently trading at $2,520.76, up 0.15%.
The yellow metal has been supported by a weakening US dollar and expectations of dovish monetary policy from the Federal Reserve. Traders are closely watching inflation data, which could further reinforce safe-haven demand.
Key levels indicate that immediate resistance is at $2,529.29, closely followed by the next resistance at $2,540.41. Should prices push beyond this threshold, the next major target is $2,550.45.
On the downside, immediate support lies at $2,507.77, with further support at $2,498.09 and $2,485.65, levels that could prompt a sell-off if breached.
Technical indicators suggest a continued bullish outlook. The RSI stands at 65, signaling that Gold is approaching overbought conditions, but still has room to climb.
The 50-day EMA at $2,508.16 reinforces a strong support zone just above $2,507, further suggesting an upward trend as long as prices stay above this level.
In terms of strategy, traders may look to buy above $2,515 with a target price of $2,529, aiming to capture gains from short-term momentum. A stop-loss at $2,507 is advisable to manage downside risk, particularly if support levels are tested.
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EUR/USD Price Analysis – Sep 11, 2024
EUR/USD Price Analysis – Sep 11, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair is gaining traction and trading around the 1.1050 level, reaching an intra-day high of 1.1055. This uptick follows a dip in the US Dollar after the Trump-Harris presidential debate.
The pair is also buoyed by expectations that the US Federal Reserve might lower interest rates by 50 basis points (bps) at its upcoming meeting on September 17-18.
Hence, the significant cut could weaken the USD by reducing foreign capital inflows, which would benefit the EUR/USD pair.
However, the potential for further gains might be limited by economic concerns in the Eurozone, particularly Germany’s sluggish manufacturing sector, which is struggling due to increased foreign competition, especially in the automobile industry.
US Dollar Weakness and Fed Rate Cut Expectations Impacting EUR/USD
On the US front, the USD is weakening, pushing the EUR/USD pair up to the 1.1040s. This decline follows a debate where Vice President Kamala Harris was seen as performing better than Donald Trump, increasing her poll numbers.
As Harris gains support, Trump's policies to keep the USD strong seem less likely to succeed. Investors are also expecting the Federal Reserve to cut interest rates significantly at its meeting on September 17-18.
While a 25 basis point cut is expected, there’s a 30% chance of a 50 basis point cut, which would weaken the USD further and boost the EUR/USD pair.
Therefore, the impact of upcoming US Consumer Price Index (CPI) data for August on Fed rate-cut expectations is uncertain. Some analysts, like Ulricht Leutchmann from Commerzbank, believe the CPI figures are less crucial now as inflation is already low.
In contrast, Elias Haddad from Brown Brothers Harriman warns that higher-than-expected inflation could reduce the likelihood of a large rate cut and support the USD.
Economic Concerns and ECB Policy Impact on EUR/USD
On the EUR front, the upticks in the EUR/USD might be limited by economic concerns in the Eurozone. Germany, in particular, is experiencing a slowdown in manufacturing, especially in the key automobile sector, due to increased foreign competition. This economic weakness could dampen EUR/USD's gains.
The European Central Bank (ECB) is set to conclude its policy meeting on Thursday, with expectations for a 25 basis point cut in its deposit facility rate (DFR), lowering it from 3.75% to 3.50%.
This cut is aimed at stimulating economic growth. The ECB is also expected to reduce its main refinancing operations rate (MRO) to narrow the gap with the DFR, bringing the MRO down from 4.25% to 3.65%.
Despite these anticipated changes, there is a risk that the Euro could weaken after the announcement, particularly if the ECB revises its growth forecasts downward.
As Elias Haddad from Brown Brothers Harriman notes, a reduction in growth and inflation forecasts by the ECB could lead to a lower interest rate outlook for the Eurozone, negatively impacting the EUR/USD pair.
EUR/USD- Technical Analysis
The EUR/USD pair is currently trading at $1.10476, up by 0.26%, as the euro regains some strength amid continued market volatility.
Traders are closely monitoring the pair as it hovers just below key resistance levels, with near-term sentiment driven by U.S. inflation data and European economic reports.
Immediate resistance stands at $1.1085, with further targets at $1.1121 and $1.1154, suggesting that if bullish momentum persists, the pair could break through these levels.
On the downside, immediate support lies at $1.1018, with additional support seen at $1.0994 and $1.0969. A breach below these support levels could signal a deeper pullback in the near term.
Technical indicators are mixed, with the Relative Strength Index (RSI) at 46, indicating a slightly bearish bias but leaving room for a potential upward move.
The 50-day Exponential Moving Average (EMA) sits at $1.1063, just above the current price, suggesting a critical level to watch. A break above this EMA could confirm a more sustained bullish trend, whereas failure to surpass it may limit gains.
For traders, a potential buying opportunity exists above $1.10185, with a take-profit target set at $1.10757. Stop-loss orders should be placed around $1.09832 to limit downside risk, especially if the pair revisits its support levels.
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GBP/USD Price Analysis – Sep 11, 2024
AUD/USD Price Analysis – Sep 10, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair struggled to maintain its earlier gains and turned bearish around the 0.6655 level, hitting an intraday low of 0.6644.
This decline was primarily driven by a stronger US dollar, which gained momentum after recent labor data hinted at a reduced likelihood of a sharp Fed rate cut in September.
However, the pair managed to recover its intraday losses after the positive trade data from China. Looking ahead, the upcoming Consumer Price Index (CPI) report on Wednesday and the Producer Price Index (PPI) on Thursday will be crucial in shaping the Fed’s rate policy.
These reports could also influence gold prices, given its status as a non-interest-bearing asset.
Stronger US Dollar and Bearish AUD/USD Due to Fed Rate Cut Expectations and Mixed Labor Data
On the US front, the broad-based US dollar gained support as recent labor market data introduced uncertainty about a potential aggressive rate cut by the Federal Reserve (Fed) in September.
According to the CME FedWatch Tool, the market expects at least a 25 basis point rate cut by the Fed, but the chance of a larger 50 basis point cut has slightly decreased to 29.0%, down from 30.0% last week. This shift in expectations contributed to the bearish movement of the AUD/USD pair.
In recent US data, Nonfarm Payrolls (NFP) increased by 142,000 jobs in August, falling short of the 160,000 forecast but improving from July’s revised figure of 89,000.
The Unemployment Rate dropped to 4.2%, as expected, from 4.3% the previous month. Fed Bank of Chicago President Austan Goolsbee indicated that Fed officials are aligning with the market's sentiment about a potential policy rate adjustment.
FXStreet’s FedTracker rated Goolsbee’s comments as dovish, suggesting a lower likelihood of a drastic rate cut.
Therefore, the shift in expectations for a smaller Fed rate cut, combined with mixed US labor data, has led to a stronger US dollar and bearish movement in the AUD/USD pair. This is due to reduced rate cut speculation and improved US economic indicators.
AUD/USD Strengthens Amidst Chinese Trade Data and RBA Rate Cut Expectations
On the AUD front, the AUD/USD pair gained traction after China's Trade Balance data was released on Tuesday. RBC Capital Markets now anticipates the Reserve Bank of Australia (RBA) will cut rates in February 2025, earlier than previously forecasted for May 2025. Despite persistent inflation in Australia, the RBA doesn’t see the slower economic growth as a strong enough reason to lower rates this year.
Meanwhile, Australia's Westpac Consumer Confidence fell by 0.5% in September, reversing August’s 2.8% increase. Traders are closely watching China’s upcoming Trade Balance data due to the strong trade ties between Australia and China. Changes in China’s economic performance can significantly impact Australian markets.
China’s Consumer Price Index (CPI) rose by 0.6% year-on-year in August, a slight improvement from July but below expectations. Monthly CPI inflation increased by 0.4%, missing the forecast. China's Trade Balance showed a surplus of CNY 649.34 billion in August, up from the previous CNY 601.90 billion, with exports increasing by 8.4% year-on-year.
Therefore, the AUD/USD pair strengthened following China's Trade Balance data, while expectations of an earlier RBA rate cut in February 2025 and a drop in Australian consumer confidence influenced the pair. Positive Chinese trade data supported the AUD.
AUD/USD - Technical Analysis
The AUD/USD pair is currently trading at $0.66698, up 0.08% on the day, in a consolidative pattern following a minor bullish movement.
The immediate pivot point sits at $0.6701, which aligns with the 50-day Exponential Moving Average (EMA), acting as a key resistance level.
This suggests that the pair is trading near a crucial juncture, with potential for both upward and downward movement depending on market conditions.
On the upside, immediate resistance is at $0.6720, followed by $0.6751 and a more significant barrier at $0.6793. A break above $0.6720 could fuel further bullish momentum, targeting the higher resistance levels.
However, AUD/USD would need to overcome the key pivot point at $0.6701 to signal a shift toward a sustained upward trend.
On the downside, immediate support is seen at $0.6646, followed by more substantial support at $0.6610 and $0.6580. If the pair fails to maintain its position above $0.6646, bearish sentiment may deepen, with the next target likely at $0.6610.
The Relative Strength Index (RSI) is currently at 46, signaling neutral momentum with a slight bearish tilt, which could indicate limited upward potential unless fresh catalysts emerge.
For now, AUD/USD remains neutral to slightly bullish, with the $0.6701 pivot acting as a key battleground for both bulls and bears.
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USD/CAD Price Analysis – Sep 10, 2024
USD/CAD Price Analysis – Sep 10, 2024
Daily Price Outlook
During the Asian session on Tuesday, the USD/CAD pair saw some upward movement, trading around 1.3571, thanks to growing demand for the US dollar.
This boost came despite crude oil prices struggling to maintain recent gains and dropping to their lowest levels since June 2023. The decline in oil prices is largely attributed to concerns about a possible economic slowdown in China, the world's largest oil importer.
Besides this, the Canadian dollar is facing pressure due to expectations of further interest rate cuts by the Bank of Canada, following disappointing Canadian jobs data from Friday.
These combined factors are giving the USD/CAD pair a lift, as traders navigate the impact of fluctuating oil prices and central bank policies.
CAD Struggles with Low Oil Prices and Rate Cut Expectations
On the Canadian dollar front, crude oil prices are struggling to extend their recent rebound and have fallen to their lowest levels since June 2023. This setback is mainly due to growing concerns about a potential economic slowdown in China, the world's largest oil importer.
Recent data from China reveals that oil imports were flat in August, compared to a 6.6% increase the previous month. This stagnation suggests weaker domestic demand, which is heightening market anxiety and weighing on crude oil prices.
In addition to this, expectations for more interest rate cuts by the Bank of Canada (BoC) are also affecting the Canadian dollar.
These hopes have been strengthened by disappointing Canadian jobs data from last Friday, which has weakened the Loonie further. As a result, the USD/CAD currency pair is benefiting from this situation, with the US dollar gaining traction against its Canadian counterpart.
USD Gains Support Amid Adjusted Fed Rate Cut Expectations and Upcoming Economic Data
On the US front, the US Dollar (USD) is gaining strength due to decreased expectations for a substantial 50 basis points interest rate cut by the Federal Reserve (Fed) in September. This change in outlook comes after mixed results from the recent US Nonfarm Payrolls (NFP) report.
As a result, the USD/CAD pair is finding some support. However, investors are staying cautious and are waiting to hear from Bank of Canada Governor Tiff Macklem and review the upcoming US inflation data before making any major decisions.
Meanwhile, the crucial US Consumer Price Index (CPI) report is set to be released on Wednesday, followed by the Producer Price Index (PPI) on Thursday.
These reports are expected to shape market expectations about the Federal Reserve's potential interest rate cut later this month and influence demand for the USD. Additionally, movements in oil prices will also play a key role in determining the next direction for the USD/CAD pair.
USD/CAD - Technical Analysis
The USD/CAD pair is currently trading at $1.35635, up 0.04%, hovering near a key pivot point at $1.3598. The pair has shown slight bullish momentum, supported by a relatively strong U.S. dollar.
However, the USD/CAD remains at a critical juncture, with price action confined between immediate resistance and support levels.
Immediate resistance stands at $1.3615, followed by stronger barriers at $1.3640 and $1.3662. If USD/CAD manages to break above $1.3615, it could open the door for further gains, with the 50-day Exponential Moving Average (EMA) at $1.3534 providing near-term support. The bullish bias remains intact as long as the price stays above this EMA level.
On the downside, immediate support is found at $1.3548, with the next critical levels at $1.3509 and $1.3483. If the pair fails to maintain momentum above $1.3548, selling pressure could increase, pushing the price toward $1.3509.
The Relative Strength Index (RSI) is currently at 57, suggesting neutral to slightly bullish momentum, but a dip below $1.3548 could weaken sentiment.
For now, the USD/CAD appears to be balancing between bullish and bearish pressures, with the $1.3598 pivot point serving as a key indicator for the next directional move. Traders should monitor these levels closely to identify potential entry and exit points.
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AUD/USD Price Analysis – Sep 10, 2024