GOLD Price Analysis – Sep 10, 2024
Daily Price Outlook
Gold (XAU/USD) is struggling to maintain its upward momentum, dipping slightly below $2,500 as a stronger US dollar weighs on the market.
The dollar's boost comes as expectations for a 50 basis point rate cut from the Federal Reserve begin to fade.
However, gold remains resilient above the $2,500 level in early European trading, with investors adopting a wait-and-see approach ahead of key US inflation data later this week.
Moving ahead, the upcoming Consumer Price Index (CPI) report on Wednesday and the Producer Price Index (PPI) on Thursday are expected to be pivotal in shaping the Fed’s rate policy outlook, which could provide clearer direction for gold prices, especially given its appeal as a non-interest-bearing asset.
Gold Pressured by Stronger US Dollar and Reduced Fed Rate Cut Expectations
On the US front, the broad-based US dollar is climbing back toward its monthly high, as reduced expectations for a larger rate cut by the Federal Reserve in September support its strength.
The stable performance in global equity markets is also putting pressure on gold prices, which typically serve as a safe-haven asset.
Last Friday's mixed US employment data lowered the chances of a 50-basis point rate cut, boosting the US dollar and acting as a headwind for gold.
Currently, traders see a 71% chance of a 25-basis-point cut and only a 29% chance of a larger 50-basis-point cut at the next Fed meeting on September 17-18, according to CME Group's FedWatch tool.
Investors are now awaiting key US inflation reports this week, with the August Consumer Price Index (CPI) set for release on Wednesday and the Producer Price Index (PPI) on Thursday. These figures are expected to influence the Fed’s upcoming rate cut decision.
Meanwhile, New York Fed President John Williams noted that inflation remains stable, suggesting the Fed could move toward a more neutral stance.
Fed Governor Christopher Waller also supported reducing rates to maintain economic growth, while Chicago Fed President Austan Goolsbee said policymakers are aligning with market expectations for a policy shift.
This news is putting downward pressure on gold, as a stronger US dollar and reduced expectations for a larger Fed rate cut decrease demand for the non-yielding asset. Investors are cautious, awaiting key inflation data that could further influence gold prices.
Escalating Gaza Conflict May Boost Gold Demand as Safe-Haven Asset
On the geopolitical front, Israel launched an airstrike on a tented camp near Khan Younis in southern Gaza, killing at least 40 people and injuring 60 others.
Israel claims it targeted a Hamas command center, but Hamas has called this a "clear lie." The strike is part of Israel's ongoing military actions in Gaza, which have resulted in over 40,988 deaths and 94,825 injuries in the territory.
Meanwhile, the UN's polio vaccination campaign in northern Gaza faces uncertainty after Israeli soldiers detained UN staff at gunpoint, and bulldozers damaged UN vehicles, according to UNRWA chief Philippe Lazzarini.
The vaccination campaign was set to start on Tuesday, but its status is now unclear. In Israel, at least 1,139 people were killed in the October 7 Hamas-led attacks, and more than 200 were taken hostage.
Therefore, the escalating violence in Gaza may drive investors toward safe-haven assets like gold due to heightened geopolitical uncertainty.
As conflict intensifies, gold could see increased demand as a secure investment option amid global instability and risk aversion.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,503.72, down 0.18% in the 4-hour timeframe, as it consolidates near a critical support level.
The pivot point sits at $2,500.09, which acts as a key psychological threshold. The market appears indecisive with the Relative Strength Index (RSI) holding steady at 51, indicating neutral momentum.
On the upside, immediate resistance lies at $2,511.75, followed by the next resistance levels at $2,529.29 and $2,540.41.
Breaking above these levels could signal a bullish continuation, with $2,540.41 serving as a significant hurdle to clear.
Conversely, immediate support is found at $2,491.58, followed by stronger support at $2,478.37 and $2,466.90. A break below $2,491 could trigger further selling pressure, driving the metal towards lower support levels.
The 50-day Exponential Moving Average (EMA) at $2,502.7480 is closely aligned with the current price, suggesting that gold is testing its near-term trend.
The market outlook remains cautiously bullish above the $2,500 pivot point. A break below this key support could shift momentum to the downside, while holding above it keeps the bullish trend intact.
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USD/CAD Price Analysis – Sep 10, 2024
EUR/USD Price Analysis – Sep 09, 2024
Daily Price Outlook
The EUR/USD pair is under pressure, trading below 1.1050 as investors brace for the European Central Bank (ECB) policy decision this Thursday.
The ECB is expected to cut its key borrowing rates by 25 basis points (bps) for the second time in its current policy-easing cycle, which started in June.
With Eurozone inflation continuing to decline—Harmonized Index of Consumer Prices (HICP) fell to 2.2% in August—further monetary easing appears almost certain.
Germany's technical recession, which saw its economy contract in the second quarter, adds to the mounting challenges.
ECB policymakers, including board member Piero Cipollone, have expressed concerns about the German economy's weakness and the risk of overly restrictive monetary policy, leading to the consensus for further rate cuts by year-end.
Weak Economic Sentiment and Worsening Investor Confidence
The Eurozone’s economic outlook remains bleak. Recent data showed that Sentix Investor Confidence dropped from -13.9 in August to -15.4 in September, reflecting growing pessimism about the region's economic health.
The German economy’s slowdown continues to drag down sentiment across the Eurozone, limiting the prospects for any meaningful recovery in the near term.
Subdued demand from domestic and international markets is further weakening the Euro, with EUR/USD failing to break key resistance levels as a result.
The Eurozone’s poor economic prospects, combined with lower inflation and weak investor confidence, have kept the Euro in a downward spiral against its peers.
US Dollar Strength After Nonfarm Payroll Data
Meanwhile, the US Dollar has strengthened, supported by a mixed US Nonfarm Payrolls (NFP) report for August.
While new payrolls were fewer than expected at 142K, the Unemployment Rate dropped as anticipated to 4.2%, and Average Hourly Earnings grew faster than projected at 0.4%.
The US Dollar Index (DXY), which tracks the USD against six major currencies, rose to near 101.50, helping push EUR/USD further below 1.1050.
The Federal Reserve (Fed) is now less likely to cut interest rates aggressively, with FedWatch Tool indicating a 27% probability of a 50-bps rate cut in September.
The market’s focus is now on the upcoming US Consumer Price Index (CPI) data due on Wednesday, which could introduce more volatility for EUR/USD.
EUR/USD - Technical Analysis
The EUR/USD pair is currently trading at $1.10660, edging down by 0.06% as the market faces continued pressure. A weak Euro is struggling to find its footing, with the pair trading just below the pivot point at $1.1084.
With the 50-day Exponential Moving Average (EMA) sitting slightly lower at $1.1082, the pair remains technically bearish, unable to gather the strength needed for an upward breakout.
The RSI indicator stands at 41, reflecting neutral but leaning towards oversold conditions, further reinforcing a bearish sentiment in the short term.
Immediate resistance looms at $1.1121, followed by higher ceilings at $1.1154 and $1.1193. Without a decisive break above these levels, the Euro may continue to encounter selling pressure, particularly if broader economic concerns such as inflation in the Eurozone continue to cast a shadow over investor sentiment.
On the downside, immediate support can be found at $1.1034, with key levels further below at $1.1000 and $1.0969.
If the pair breaches the $1.1034 mark, it could quickly descend toward the psychologically significant $1.1000 level, which serves as a key defensive barrier. A breakdown below this threshold would likely trigger further declines, exposing the $1.0969 support.
The recommended strategy is to sell positions below $1.10836, with a target profit set at $1.10323. To protect against upside risk, a stop-loss should be placed at $1.11141, just above immediate resistance.
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GBP/USD Price Analysis – Sep 09, 2024
GOLD Price Analysis – Sep 09, 2024
Daily Price Outlook
After briefly retesting its all-time highs on Friday, Gold (XAU/USD) pulled back to $2,490 per troy ounce on Monday.
The initial rise came after the US Nonfarm Payrolls (NFP) report showed that fewer jobs were added in August than expected, signaling a potential slowdown in the labor market.
This fueled speculation that the Federal Reserve (Fed) might implement a larger 0.50% rate cut in September. Lower interest rates typically benefit Gold, as they reduce the opportunity cost of holding non-yielding assets like the precious metal.
However, the gains were short-lived. Further analysis of the NFP report revealed a drop in the Unemployment Rate to 4.2%, along with a stronger-than-expected rise in wage growth at 0.4%, which softened expectations of aggressive rate cuts.
As a result, the likelihood of a 0.50% rate cut dropped from 40% to 30%, causing Gold to fall back below $2,500.
Gold’s Outlook Shaped by Mixed Economic Signals
Despite the recent pullback, Gold remains supported by ongoing concerns about the US economy.
Fed Governor Christopher Waller expressed support for starting rate cuts soon to maintain economic momentum, citing signs of a "softening" but not "deteriorating" labor market. Waller also kept the door open for a non-standard 0.50% reduction.
This week, the focus shifts to upcoming US Consumer Price Index (CPI) and Producer Price Index (PPI) data, which could further influence expectations for the Fed’s next move.
While inflation data typically plays a crucial role in rate decisions, analysts like Jim Reid of Deutsche Bank suggest that employment data may currently carry more weight.
Geopolitical Risks Add to Gold’s Appeal
On the geopolitical front, tensions in the Middle East and Ukraine continue to provide support for Gold as a safe-haven asset.
The deteriorating ceasefire prospects between Israel and Hamas and escalating violence, along with Russia’s advance in Ukraine, increase uncertainty.
Countries like Poland have been increasing their Gold reserves, reflecting a growing demand for the precious metal amid geopolitical instability.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,490.23, up 0.06%, but remains in a bearish territory. The pivot point for the day stands at $2,500.43, with the metal currently unable to break through this resistance.
The immediate resistance level lies at $2,511.12, followed by more substantial hurdles at $2,527.08 and $2,540.41. The 50-day Exponential Moving Average (EMA) also aligns closely with the pivot point, reinforcing the overhead resistance at $2,500.53.
On the downside, immediate support is observed at $2,482.48, with further support levels at $2,472.08 and $2,462.04, suggesting that any breach of these could push the metal into a steeper decline.
Technical indicators signal a bearish outlook, with the Relative Strength Index (RSI) at 38, indicating that selling pressure still dominates.
As the RSI remains below 50, it suggests that the market sentiment is tilted toward more downside risk in the near term. If Gold fails to break above the $2,500 pivot point, bears could push the price down to test the $2,482.48 support level.
The strategy for traders remains cautious, with a sell order advised below the $2,500 mark. Traders eyeing the downside could aim for a take-profit level at $2,477, with a stop-loss set around $2,510 to limit potential losses if the price rebounds.
The next few trading sessions will be pivotal as Gold’s direction depends heavily on whether it can break through the $2,500 resistance or slide below key support levels.
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GBP/USD Price Analysis – Sep 09, 2024
GBP/USD Price Analysis – Sep 09, 2024
Daily Price Outlook
The Pound Sterling (GBP) dropped below 1.3100 against the US Dollar on Monday, marking a fresh two-week low.
The GBP/USD pair faced selling pressure as the US Dollar Index (DXY) rose to 101.40, driven by diminishing expectations for aggressive rate cuts from the Federal Reserve (Fed).
The recent Nonfarm Payrolls (NFP) report showed mixed signals for the labor market, which tempered market hopes for a 50-basis-point rate cut in September.
According to the CME FedWatch Tool, the probability of such a cut has fallen to 27%, down from 41% before the release of August’s labor data.
While the report showed slower job growth, the Unemployment Rate ticked lower, and wage growth accelerated at 0.4%—strong enough to keep recession fears at bay.
This has bolstered the US Dollar, as the Fed is now less likely to ease aggressively, putting pressure on the Pound.
UK Employment Data in Focus
The focus for GBP/USD traders is now shifting to the UK labor market data set to be released on Tuesday. The report will provide critical insights into the Bank of England’s (BoE) future interest rate decisions.
According to estimates, the Unemployment Rate is expected to fall slightly to 4.1% from 4.2%, while Average Earnings Including Bonuses are forecast to soften to 4.1%, down from 4.5%.
The labor data could influence market speculation about the BoE’s next move, particularly if wage growth continues to decelerate.
Slower wage growth would ease inflationary pressures, especially in the services sector, potentially encouraging the BoE to consider further rate cuts to support the economy.
Additionally, a report from KPMG and the Recruitment and Employment Confederation (REC) showed that permanent job placements in the UK dropped at their fastest pace in five months, signaling a cooling labor market.
Pay growth for new hires also slowed, hitting a five-month low—one of the weakest readings since early 2021.
What to Expect from CPI Data
Looking ahead, the US Consumer Price Index (CPI) data for August, due on Wednesday, is expected to provide fresh cues on the Fed’s rate outlook.
The CPI is forecast to show 0.2% growth for both headline and core inflation, while annual headline inflation is expected to slow to 2.6%, down from 2.9% in July.
This inflation data will be crucial in shaping market expectations for Fed policy in the coming months. If inflation continues to cool, it could support the case for more moderate rate cuts, limiting further upside for the US Dollar.
GBP/USD - Technical Analysis
The GBP/USD pair is currently trading at $1.31052, inching up by a modest 0.01%. However, the technical landscape suggests a bearish bias in the short term.
Immediate price action remains capped below the pivot point at $1.3142, with resistance stacking higher at $1.3188, $1.3227, and $1.3266.
As market sentiment weakens, the pair is struggling to gain momentum, particularly with a Relative Strength Index (RSI) of 39, indicating oversold conditions that could signal a potential continuation of downward movement.
The 50-day Exponential Moving Average (EMA) at $1.3154 reinforces the notion that the pair is facing resistance from broader market pressures.
A failure to close above this level in recent sessions has further solidified a bearish outlook, leaving the door open for potential tests of lower support levels.
On the downside, immediate support stands at $1.3089, with further levels at $1.3052 and $1.3011 providing a stronger safety net for potential declines.
Should the pair breach the immediate support at $1.3089, a swift move toward $1.3052 is highly probable, with a potential extended drop toward $1.3011 if bearish momentum intensifies.
Given the technical setup, the recommended strategy is to consider short positions below the pivot point at $1.31413. The target for taking profit is at $1.30520, with a stop-loss placed above immediate resistance at $1.31878, to mitigate potential upside risk.
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EUR/USD Price Analysis – Sep 09, 2024
EUR/USD Price Analysis – Sep 06, 2024
Daily Price Outlook
During the European trading session on Friday, the EUR/USD extended its winning streak for the third consecutive session, reaching a fresh weekly high of 1.1121. This rise was primarily driven by a weakening US Dollar (USD).
The US Dollar Index (DXY), which measures the Greenback’s strength against six major currencies, fell below the key support level of 101.00.
The decline in the USD's appeal followed disappointing US labor market data, including July's JOLTS Job Openings and August's ADP Employment report, which heightened concerns about deteriorating labor market conditions.
USD Weakness and Fed Rate Cut Speculation Boost EUR/USD Ahead of NFP Data
On the US front, the broad-based US dollar bearish bias is pushing the EUR/USD higher. The US Dollar Index (DXY), which measures the USD against six major currencies, has fallen below the key support level of 101.00.
This decline follows weak US labor market data, including July's JOLTS Job Openings and August's ADP Employment report, showing the lowest job vacancies and payroll additions in over three years.
Despite August's ISM Services PMI data being better than expected, it hasn’t been enough to support the USD. This has led to increased market speculation that the Federal Reserve might cut interest rates more aggressively.
Investors are now focusing on the upcoming US Nonfarm Payrolls (NFP) data for August, set to be released at 12:30 GMT. The report is expected to show an increase in job hires to 160K from July's 114K and a decrease in the unemployment rate to 4.2% from 4.3%.
Additionally, wage growth is anticipated to accelerate, with Average Hourly Earnings expected to rise by 3.7% year-on-year and by 0.3% month-on-month. These figures will be crucial for understanding future interest rate decisions.
Therefore, the USD's weakness and speculation of aggressive Fed rate cuts are driving the EUR/USD higher. If the upcoming NFP data confirms weak labor market conditions and slower wage growth, the EUR/USD could continue to rise as market expectations shift.
Eurozone Data and ECB Rate Cuts Strain Euro, But USD Weakness Drives EUR/USD Higher
On the EUR front, European economic data has not provided much support for the Euro. July's EU Retail Sales data came in worse than expected, showing a decline of 0.1% year-on-year, instead of the anticipated increase to 0.1%. This follows a revised contraction of 0.4% in the previous period, indicating ongoing economic challenges in the Eurozone.
Additionally, the European Central Bank (ECB) is expected to cut interest rates twice more this year. This outlook could further weigh on the Euro, as lower interest rates might reduce the currency's appeal to investors. Despite these challenges, the Euro is still benefiting from the weakness in the US Dollar, driving the EUR/USD pair higher.
EUR/USD - Technical Analysis
EUR/USD is trading at $1.11182, up 0.07%, showing signs of strength as the pair edges higher within a tight range. The 4-hour chart indicates bullish momentum, as the euro holds above its key support levels.
The pair is currently eyeing the pivot point at $1.11537, which will be crucial in determining the next leg of the move. A break above this level could see EUR/USD test immediate resistance at $1.11932, with further gains pushing towards $1.12302.
However, a failure to breach the pivot could open the door for a retracement, with immediate support found at $1.10717 and deeper support at $1.10337 and $1.09995.
The 50-day Exponential Moving Average (EMA) at $1.10920 is acting as a key dynamic support, reinforcing the bullish bias as long as the price remains above this level.
The Relative Strength Index (RSI) is sitting at 65, indicating moderately bullish momentum but nearing overbought territory. A break above 70 could signal further gains, but traders should remain cautious of a potential correction if the RSI starts to roll over.
Given the current technical setup, traders may consider entering long positions above $1.11011, with a take-profit target at $1.11549 and a stop-loss at $1.10716. The technical outlook remains positive as long as the pair holds above the 50-day EMA and the pivot point is respected.
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- GOLD Price Analysis – Sep 06, 2024
GOLD Price Analysis – Sep 06, 2024
Daily Price Outlook
Gold price (XAU/USD) extended its rebound to around $2,510 but remains below recent highs, as traders adopt a cautious stance ahead of the crucial US Nonfarm Payrolls (NFP) report, set to be released at 12:30 GMT.
The metal's upward movement is largely driven by weaker-than-expected US private payrolls data released on Thursday, which showed slower job growth despite a marginal fall in unemployment claims.
This has pressured the US Dollar (USD) as markets anticipate the NFP to play a critical role in shaping future US interest rate expectations. Additionally, concerns about a stagnant jobs market further enhance gold's safe-haven appeal.
Gold Price Boosted by Weaker US Employment Data and Rate Cut Speculations
On the US front, the broad-based US dollar weakened as Gold recovered following the release of disappointing ADP Employment Change data. The report revealed that the private sector added only 99,000 new jobs in August, falling short of the previous month’s 111,000 (revised down from 122,000) and economists’ 145,000 estimate.
Although US Initial Jobless Claims showed a drop to 227,000, from the revised 232,000 and an expected 230,000, it didn’t fully counteract the negative sentiment from the ADP data, painting a picture of a slowing labor market.
This data, along with recent weak JOLTS jobs figures, has increased speculation that the Federal Reserve may cut interest rates more significantly at their September 18 meeting. Lower interest rates make holding Gold more attractive by reducing the opportunity cost of the non-yielding asset.
Friday’s Nonfarm Payrolls (NFP) report will be crucial in determining whether the Fed opts for a 0.50% cut or a standard 0.25% cut. Currently, the market sees a 40% chance of a 0.50% cut, and weaker NFP data could increase this probability, potentially boosting Gold’s price.
Therefore, the weaker ADP data and ongoing labor market concerns heighten expectations for a significant Federal Reserve rate cut, boosting Gold's appeal. If Friday's NFP data confirms a slowdown, it could increase the likelihood of a 0.50% cut, driving Gold prices higher.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,519.03, up 0.09% in the 4-hour timeframe, as traders navigate mixed signals in the broader market.
The price is testing key technical levels, with the immediate resistance at $2,540.41 and the pivot point holding firm at $2,527.08. Should gold break above this level, bullish momentum could push it towards the next resistance targets of $2,553.16.
On the downside, immediate support sits at $2,499.42, with deeper supports at $2,482.48 and $2,472.08. A drop below $2,499.42 may signal increased selling pressure, potentially driving the price toward these lower support levels.
The 50-day Exponential Moving Average (EMA) of $2,506.28 is currently acting as a solid floor, reinforcing the bullish outlook as long as prices remain above it.
The Relative Strength Index (RSI) is at 59, signaling neutral to slightly bullish momentum. However, a break above 60 on the RSI would further confirm stronger upward movement, while a dip below 50 could shift the outlook to bearish.
Given the technical setup, traders might consider buying above $2,500, with a take-profit target of $2,520 and a stop-loss at $2,490. The technical picture suggests that gold’s next move will likely depend on its ability to break above the $2,527 pivot point or hold support near $2,499.42.
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S&P500 (SPX) Price Analysis – Sep 06, 2024
Daily Price Outlook
The S&P 500 index has recently shown a subdued performance, struggling to dtop its downward momentum around the 5,503.41 level and hitting an intra-day low of 5,480.54.
This downturn has been influenced by disappointing ADP Employment Change data, reflecting uncertainty in market sentiment. The market remains on edge as investors await more clarity on economic indicators and Fed policy decisions while navigating the complexities of ongoing global conflicts.
Fed Rate Cut Expectations and Economic Data Impact on S&P 500
On the US front, the Federal Reserve's monetary policy outlook, combined with recent economic data, has been a crucial factor affecting the S&P 500. The CME FedWatch tool indicates that investors are anticipating a 59% chance of a 25 basis point rate cut and a 41% chance of a 50 basis point rate cut in September.
This expectation stems from the recent disappointing ADP Employment Change report, which showed a smaller-than-expected increase in private sector employment, with a rise of 99,000 in August compared to the consensus estimate of 145,000.
The weaker employment data, coupled with the anticipated US Non-Farm Payroll (NFP) report, which is expected to show a rise of 160,000 in August, has heightened speculation about potential Fed rate cuts. The Unemployment Rate is projected to decline slightly to 4.2%.
If the US employment data (NFP) falls short of expectations, the Federal Reserve might consider a 50 basis point rate cut instead of a smaller cut. This larger cut could lead to a weaker US Dollar because lower interest rates generally decrease the value of a currency.
As a result, a weaker US Dollar might impact the S&P 500's performance by affecting the value of investments and investor sentiment.
Impact of Gaza Conflict on Global Markets and the S&P 500 Index
On the geopolitical front, the situation in Gaza has become increasingly dire. UN spokesman Stephane Dujarric reported that over one million people in central and southern Gaza did not receive food rations in August, highlighting a "beyond catastrophic" humanitarian crisis.
Gaza’s Health Ministry has also noted that the Israeli military is blocking the entry of medical teams needed for a crucial polio vaccination campaign in southern Gaza.
Meanwhile, the increasing tensions remain high as Hamas accuses Israeli Prime Minister Benjamin Netanyahu of sabotaging a ceasefire deal by not withdrawing forces from Gaza’s border with Egypt.
The conflict has resulted in significant casualties, with at least 40,878 people killed and 94,454 wounded in Israel’s military actions against Gaza. Conversely, Hamas-led attacks on October 7 have claimed the lives of at least 1,139 people in Israel.
Therefore, the escalating Gaza conflict can create global uncertainty, leading to risk-averse behavior among investors. This heightened geopolitical tension may dampen investor sentiment and contribute to increased volatility in the S&P 500 index.
S&P 500 - Technical Analysis
The S&P 500 (SPX) is trading at $5,503.42, down 0.30%, with bearish momentum dominating the 4-hour chart. The index has been pressured by a broader market pullback, failing to break above key resistance at $5,572.63, the current pivot point.
A move above this level could trigger a bullish reversal, pushing prices toward immediate resistance at $5,641.79 and potentially extending gains to $5,699.82.
On the downside, immediate support rests at $5,441.61, with further downside risk towards $5,381.03 and $5,320.76 if selling pressure intensifies. The 50-day Exponential Moving Average (EMA) stands at $5,484.02, acting as a critical support zone.
A decisive break below this EMA could indicate deeper market weakness and open the door for additional declines.
The Relative Strength Index (RSI) currently sits at 42, reflecting mildly bearish sentiment. If the RSI slips below 40, it could signal a stronger selling wave, while a rebound above 50 would indicate renewed buying interest. For now, the technical landscape suggests caution, as the S&P 500 struggles to maintain upward momentum.
Given this setup, traders may consider an entry above $5,465, with a take-profit target at $5,575 and a stop-loss at $5,400. A breakout above the pivot point at $5,572.63 would confirm a bullish shift, but continued weakness below the 50-day EMA could lead to further downside risks.
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- GOLD Price Analysis – Sep 06, 2024
GOLD Price Analysis – Sep 05, 2024
Daily Price Outlook
Gold (XAU/USD) extended its bullish rally, reaching an intraday high of $2,506. This upward trend can be attributed to weaker-than-expected U.S. job data, which boosted safe-haven demand for gold.
The prospect of falling interest rates in the U.S. also supports gold prices, as lower rates reduce the opportunity cost of holding a non-interest-bearing asset. Despite this positive backdrop, traders are exercising caution, avoiding aggressive bullish bets ahead of the critical U.S. Nonfarm Payrolls (NFP) report scheduled for Friday.
Apart from this, investors will keep their eyes on Thursday’s U.S. economic releases, including the ADP private sector employment report, Weekly Jobless Claims, and the ISM Services PMI. These reports are anticipated to offer short-term trading opportunities and further insights into market direction.
Weaker US Job Data and Fed Rate Cut Speculations Drive Gold Prices Up
On the US front, the broad-based US dollar struggled as recent economic reports suggested the Federal Reserve (Fed) might opt for more aggressive interest rate cuts in September.
On the data front, the latest labor market report showed job openings fell to 7.673 million in July, the lowest since January 2021, and June’s figures were revised lower. This decline, coupled with the Fed’s Beige Book indicating reduced economic activity in most regions, has raised speculation about a shift in Fed policy.
Gold prices saw a recovery due to the weaker US job data, as this increased demand for the safe-haven asset. Meanwhile, the lower interest rates would reduce the opportunity cost of holding gold.
However, the chance of the Fed cutting rates by 0.50% in September has jumped to 45% from around 31% before the data. With upcoming ADP Employment Change and Jobless Claims reports, and the critical US Nonfarm Payrolls (NFP) due on Friday, any further weak employment figures could strengthen the case for a larger rate cut.
Escalation in Israeli-Palestinian Conflict Boosts Demand for Gold
On the geopolitical front, tensions remain high as Israeli forces shot and killed a 16-year-old Palestinian boy in the Far’a refugee camp. According to Wafa news agency, soldiers fired multiple bullets at the child, abused him, and prevented ambulance crews from reaching him.
In response, Hamas has accused Israeli Prime Minister Benjamin Netanyahu of obstructing a ceasefire deal by refusing to withdraw forces from Gaza’s Philadelphi Corridor.
Consequently, the situation in Gaza continues to escalate, with recent Israeli bombardments killing at least 18 Palestinians. Palestinian officials report that around 4,000 residents have been forced to flee their homes in east Jenin under gunpoint, and the UN has criticized Israel for using "war-like tactics" against civilians in the West Bank.
Hence, the conflict has resulted in a severe humanitarian crisis, with over 40,000 people killed and nearly 95,000 wounded in Gaza. In contrast, at least 1,139 people were killed in Israel due to Hamas-led attacks on October 7.
Therefore, the escalation in the Israeli-Palestinian conflict, with increased casualties and ongoing violence, heightens geopolitical uncertainty. This typically boosts demand for safe-haven assets like gold, leading to potential price increases as investors seek stability.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is showing signs of strength as it attempts to break through key resistance levels. The price is now trading above the pivotal $2,500 mark, which acts as both psychological and technical resistance. This level coincides with the 50-day Exponential Moving Average (EMA) at $2,506.32, signaling that bullish momentum is building. Should the price continue to hold above this level, we could see a test of the next resistance at $2,520, followed by $2,527.
The Relative Strength Index (RSI) at 54.62 suggests that momentum is in the buyers' favor but not yet overbought, leaving room for more upward movement. On the support side, $2,490 remains critical, and a drop below this level could shift the momentum back to the bears, driving the price toward the next support at $2,482.
From a technical perspective, the gold market has broken out of a descending channel, suggesting further upward potential. However, if the price fails to sustain above $2,500, it could lead to renewed selling pressure.
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GBP/USD Price Analysis – Sep 05, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair maintained its upward trend and performed strongly around 1.3168, reaching an intra-day high of 1.3172.
The British pound strengthened as the positive UK economic outlook boosted market expectations that the Bank of England's (BoE) policy-easing cycle might be shallower this year compared to other central banks.
Meanwhile, the US dollar weakened due to weaker-than-expected U.S. job data, which increased the likelihood of a significant interest rate cut by the Federal Reserve. This also supported the GBP/USD pair.
Looking ahead, traders are being careful as they wait for the important US Nonfarm Payrolls (NFP) report on Friday. Before that, they'll also pay attention to Thursday's US economic updates, including job reports from the ADP, Weekly Jobless Claims, and the ISM Services PMI.
GBP/USD Strengthens on Positive UK Economic Outlook and Fewer BoE Rate Cut Expectations
On the BoE front, the British Pound is gaining strength as the positive UK economic outlook suggests that the Bank of England’s (BoE) interest rate cuts may be less aggressive compared to other central banks.
The latest S&P Global/CIPS PMI data shows the UK economy grew at a faster pace in August, with both the manufacturing and services sectors expanding significantly. This marks the strongest growth since April, raising hopes for a more stable economic environment.
Financial markets now expect the BoE to cut interest rates just once this year. The central bank, which began shifting to a more neutral policy in August, is expected to keep rates steady at 5% this month, with a possible cut in November or December.
Meanwhile, the Pound's value will be influenced by market sentiment and speculation on rate cuts, especially as key UK economic reports are absent. Next week, investors will turn their attention to employment data for July and monthly GDP figures.
This news has boosted the GBP/USD pair, as expectations of fewer BoE rate cuts support the British Pound. Strong UK economic data strengthens the Pound, while market sentiment and upcoming employment and GDP reports could drive further movement.
GBP/USD Rises as Weak US Job Data Fuels Fed Rate Cut Expectations
On the US front, the broad-based US Dollar (USD) weakened as weak Job Openings data for July put pressure on the currency. The latest report showed that US job vacancies fell to 7.67 million, the lowest in over three-and-a-half years.
This signals a slowing job market, raising expectations that the Federal Reserve (Fed) may start cutting interest rates more aggressively. Market speculation now suggests a 41% chance that the Fed could reduce rates by 50 basis points in its September meeting, up from 34% a week ago.
Looking ahead, the US Nonfarm Payrolls (NFP) report for August, due on Friday, will be a key event that could impact the USD. In Thursday’s North American session, important data like the ADP Employment Change, ISM Services PMI, and Initial Jobless Claims will be in focus.
Therefore, this news has strengthened the GBP/USD pair, with the Pound rising above 1.3150 as the weaker US Dollar faces pressure from soft US job data. Increased expectations of Fed rate cuts further support the Pound's gains against the Dollar.
GBP/USD - Technical Analysis
The British Pound is facing downside pressure against the U.S. Dollar as it struggles below the key resistance level of $1.31673, which is reinforced by the 50-day Exponential Moving Average (EMA). GBP/USD has formed a lower high at $1.31880, signaling potential weakness.
The immediate support at $1.30891 is being closely watched, as a break below this level could trigger further downside towards $1.30523. The pair is currently in a consolidation phase, with the RSI at 45.15, which indicates there’s room for the price to slide lower before reaching oversold territory.
The descending trendline from previous highs continues to act as resistance near $1.31673, and any failure to break above this could attract sellers. A confirmed bearish break below $1.30891 might lead to a retest of the psychological level at $1.30111. Meanwhile, bulls should be cautious as any upside movement remains capped by resistance near the $1.31880 zone.
The pair remains bearish below the pivot point at $1.31517, with a possible downside target at $1.30891. A failure to hold above $1.31517 suggests potential weakness in the short term.
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EUR/USD Price Analysis – Sep 05, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its upward momentum, trading around 1.1096 and reaching an intra-day high of 1.1109. This movement comes as investors closely monitor US economic data, which has influenced the pair's performance.
Despite a surprising 0.1% decline in annual Eurozone Retail Sales for July—contrary to expectations for growth—the Euro (EUR) remains robust against major currencies. Notably, monthly Retail Sales did rise by 0.1%, meeting forecasts.
Moreover, EUR/USD gains were bolstered by weaker-than-expected US JOLTS Job Openings data for July. This disappointing data has increased market expectations for a more aggressive policy-easing cycle by the Federal Reserve (Fed). As a result, the US dollar has weakened, further supporting the recent strength of the EUR/USD pair.
Euro Remains Strong Despite Weaker Eurozone Data and Growth Concerns
Despite a 0.1% decline in annual Eurozone Retail Sales for July, the Euro (EUR) remains strong. Retail Sales data, which reflects consumer spending, was expected to grow but instead fell slightly. However, the monthly Retail Sales increased by 0.1%, as predicted.
This mixed data has led to speculation that the European Central Bank (ECB) may lower interest rates soon. The ECB began easing in June but paused in July, and there’s anticipation of further cuts due to concerns about slow economic growth and easing inflation.
Additionally, worries about Eurozone economic performance have increased. The final HCOB PMI report showed slower growth in economic activity, with a reading of 51.0, down from 51.2. This slowdown is due to weaker growth in services and ongoing contraction in manufacturing. ECB member François Villeroy de Galhau suggested that these economic issues might prompt the ECB to cut interest rates in September.
Therefore, the news of weaker Eurozone Retail Sales and slower growth intensifies speculation that the ECB will cut interest rates. This speculation, combined with easing inflationary pressures, supports the Euro (EUR), contributing to the EUR/USD pair’s strength.
EUR/USD Recovery Driven by Weaker US Job Data and Upcoming Economic Reports
On the US front, the EUR/USD pair has extended its recovery. This rebound followed weaker-than-expected US JOLTS Job Openings data for July, which has fueled speculation that the Federal Reserve (Fed) might start a significant policy-easing cycle soon.
The disappointing JOLTS data, showing job vacancies at 7.67 million compared to the revised 7.91 million in June and below the 8.1 million estimate, raised concerns about the labor market and led to a drop in the US Dollar (USD). The US Dollar Index (DXY) has declined further to around 101.20 as a result.
Looking ahead, the USD’s movement will be influenced by the upcoming ADP Employment Change and ISM Services Purchasing Managers Index (PMI) data for August. The ADP data, due at 12:15 GMT, is expected to show a rise in private sector payrolls to 145K from 122K in July. The ISM Services PMI, set for release at 14:00 GMT, is projected to decline slightly to 51.1 from 51.4.
Stronger data in these reports could reduce expectations for aggressive Fed rate cuts, while weaker results could reinforce them, impacting the USD’s strength and, consequently, the EUR/USD pair.
EUR/USD - Technical Analysis
EUR/USD is showing signs of consolidation after breaking out of a descending channel. The pair is currently hovering near the 1.10690 support level, which coincides with the pivot point for today.
If the price manages to stay above this level, it could trigger further upward momentum towards the immediate resistance at 1.11005. Above this, the next resistance stands at 1.11228, followed by a potential move to 1.11892 if bullish momentum continues.
The RSI at 55.77 indicates that the market still has room to the upside, with momentum building slowly. However, traders should remain cautious if the price slips below the support level of 1.10690, as this could expose the pair to a move down towards 1.10395, and possibly further to 1.09995. A break above the 50-day EMA at 1.10991 will serve as an additional bullish confirmation.
Overall, the EUR/USD pair is showing potential for gains as long as it remains above the key support of 1.10690. A bullish breakout above the 50-EMA could drive further upward movement, while a failure to hold support might bring in selling pressure.
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