GOLD Price Analysis – March 15, 2024
Daily Price Outlook
On Friday, Gold (XAU/USD) witnessed a rebound, nearly recouping losses from the prior day, as it approached the $2,150 mark. Despite this resurgence, gold's trading range has been consistent since the week's start, as the market awaits further clarity on the Federal Reserve's potential rate adjustments. The focus is squarely on the forthcoming FOMC policy meeting slated for the upcoming Tuesday.
Anticipation of Fed's Monetary Policy Stirs Market Speculation
Recent data revealing a spike in the US Producer Price Index (PPI) has sparked debates over the Fed's timing on interest rate modifications, suggesting potential delays. Nonetheless, market sentiment still leans towards an anticipated rate cut by the Fed in June, buoyed by a dip in US Treasury yields, offering some reprieve to gold's non-yielding nature. However, a slight rise in the US Dollar could temper significant gains for the metal.
Key Economic Indicators and Their Impact on Gold Prices
Investors are gearing up for the release of crucial US economic indicators, including the Empire State Manufacturing Index, Industrial Production, and the Prelim Michigan Consumer Sentiment Index. These data points, along with US bond yield movements, are expected to shape the dollar's trajectory, influencing gold's value. Moreover, global risk sentiment is likely to generate short-term trading avenues for gold, although XAU/USD appears on the verge of concluding a three-week ascension, deviating from a record high achieved the previous Friday.
Economic Data Highlights and Market Reactions
Thursday's announcement indicated a higher-than-anticipated rise in US producer prices for February, potentially prompting the Fed to sustain elevated interest rates, impacting gold prices negatively. The Labor Department's reports on Initial Jobless Claims and Retail Sales further nuanced market perspectives, emphasizing a consumer spending slowdown amidst inflationary pressures. Despite this, there's a 60% probability, as per the CME Group's FedWatch Tool, of a rate cut in June, offering some stability to gold prices. The geopolitical tension, marked by Russia's tactical movements, alongside the awaited US economic data and the upcoming FOMC meeting, remains crucial in determining gold's short-term direction.
GOLD (XAU/USD) - Technical Analysis
On March 15, Gold witnessed a slight increase in its value, ticking up by 0.22% to $2165.285, a move reflecting a nuanced investor approach towards the precious metal amidst fluctuating market conditions. Positioned just below a pivotal $2178 mark, the price dynamics suggest a crucial juncture where the future direction could be determined.
Resistance levels are closely watched at $2181, extending to $2200 and $2219, which could potentially cap gains if the bullish momentum sustains. Conversely, the metal finds its immediate support at $2141, with further layers at $2125 and $2111, essential for halting any downward pressures. The trading indicators offer a mixed yet slightly optimistic narrative; the Relative Strength Index (RSI) at 51 hints at a balanced market sentiment with a lean towards buying, while the 50-day Exponential Moving Average (EMA) at $2150 serves as a critical support level, underpinning the potential for an upward trajectory.
The current technical outlook posits a guarded yet positive scenario for gold, recommending a buying strategy above $2153 to capitalize on potential upticks towards the pivot level. A take-profit point is advised at $2178, aligning with near resistance, to secure gains from anticipated movements. Conversely, a stop-loss order at $2140 is prudent, safeguarding against unexpected market reversals.
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- EUR/USD Price Analysis – March 15, 2024
EUR/USD Price Analysis – March 15, 2024
Daily Price Outlook
The EUR/USD pair has experienced a notable retreat into the 1.0800 range, a departure from its recent stance in the 1.0900, largely influenced by recent U.S. economic indicators. These indicators have cast doubts on the Federal Reserve's (Fed) pace of interest rate reductions.
U.S. Economic Data Signals a Warmer Economy
The U.S. Producer Price Index (PPI) for February reported an unexpected 1.6% year-over-year increase, surpassing the anticipated 1.1% and January's revised 1.0% rise. This, coupled with lower-than-expected Initial Jobless Claims and a modest 0.6% increase in Retail Sales, underscores the persistent economic heat in the U.S., suggesting prolonged higher interest rates—a scenario that dampens EUR/USD prospects while buoying the U.S. Dollar due to its appeal for foreign capital inflow.
Diverse Views from ECB Policymakers on Interest Rate Cuts
A flurry of public appearances by European Central Bank (ECB) officials has revealed divergent opinions on the timing of interest rate reductions. While ECB President Christine Lagarde pinpointed June for a reevaluation of rates, comments from the Bank of France's Francois Villeroy de Galhau introduced the possibility of an April cut, indicating a split within the ECB between those favoring earlier versus summer rate cuts.
Subsequent remarks from ECB officials, including Robert Holzmann, Yannis Stournaras, Klaas Knot, and Vice-President Luis de Guindos, further highlight the debate over the ECB's rate cut timeline. Stournaras's support for a spring rate reduction and Knot's June prediction, alongside de Guindos's anticipation of decisive information by June, reflect the ongoing deliberation on ECB's monetary policy path.
EUR/USD - Technical Analysis
On March 15, the EUR/USD pair witnessed a subtle decrement, registering a 0.09% fall to conclude at 1.08734. This minor shift underscores the currency pair's current predicament as it grapples with sustaining momentum amidst the ebbs and flows of market sentiment. Nudging slightly below the pivotal point of 1.0902, the EUR/USD now teeters at a critical juncture, poised for either resurgence or further decline based on forthcoming market cues.
The set resistance levels at 1.0930, escalating to 1.0966 and further stretching to 1.1010, mark significant hurdles that must be overcome to signal a shift towards a bullish outlook. Conversely, the terrain below is scaffolded by immediate support at 1.0842, extending down to 1.0800 and 1.0762, which stand ready to arrest any additional dips, safeguarding the pair from deeper retractions.
The trading environment is punctuated by the Relative Strength Index (RSI) dipping to 30, a marker possibly indicating the pair's drift into oversold territory. This, coupled with the pair's brush against the 50-day Exponential Moving Average (EMA) at 1.0904, paints a nuanced picture of the tug-of-war between buyers and sellers. The confluence of these technical indicators, alongside the pair's price action relative to the pivot point, encapsulates the delicate balance steering EUR/USD's short-term trajectory.
In navigating this landscape, a prudent strategy emerges: initiating sells below 1.08993 with an objective to lock in gains at 1.08420, while placing a stop loss at 1.09333 to curtail potential losses.
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- GOLD Price Analysis – March 15, 2024
USD/JPY Price Analysis – March 14, 2024
Daily Price Outlook
The USD/JPY currency pair has been on an upward trend, finding support around the 147.85 level. The reason for its upward trend can be attributed to speculation surrounding the Bank of Japan's (BoJ) monetary policy stance. BoJ Governor Ueda's concerns over subdued consumption and the potential delay in rate hikes have strengthened demand for USD/JPY as investors favor higher-yielding assets.
Furthermore, diminishing expectations for a June rate cut by the Federal Reserve, amidst persistent inflation concerns, have boosted the US dollar against the Japanese yen. This shift supports the USD/JPY pair's upward trajectory, influenced by the evolving Fed policy outlook. The resilience of US Treasury yields, coupled with expectations of prolonged higher interest rates by the Fed, bolsters the bullish sentiment for the USD/JPY pair.
Market participants will focus on upcoming US Retail Sales data for February, as positive figures would indicate strong consumer spending, supporting expectations for unchanged Fed interest rates. This scenario could maintain the USD/JPY pair's upward momentum.
Concerns Over Spending and Deflation Impact BOJ Policy
On the BOJ front, Governor Ueda is worried that people aren't spending enough money, which is holding back economic growth. Even though the economy is improving slightly, the lack of spending remains a significant issue. Because of this, people speculate that the Bank of Japan might wait longer before raising interest rates. The Finance Minister also mentioned that Japan isn't ready to declare victory over deflation yet.
Therefore, the uncertainty surrounding the Bank of Japan's actions is leading to fluctuations in the USD/JPY pair. Markets remain uncertain about when the Bank will decide to raise interest rates, given subdued consumption and ongoing deflation concerns.
Focus on US Economic Data and Federal Reserve Policy
On the US front, the likelihood of the Federal Reserve lowering interest rates has decreased, as indicated by the CME Fedwatch tool. This shift occurred following the release of the inflation report for February. A reduced probability of a rate cut implies that the Federal Reserve may maintain higher interest rates for an extended period. This typically benefits the US dollar.
Investors are paying close attention to US economic data, especially the upcoming Retail Sales report. They want to get more clues about what the Federal Reserve might do with its monetary policy.
USD/JPY - Technical Analysis
On March 14, the USD/JPY pair edged higher, trading up by 0.13% at 147.94. This subtle yet significant move highlights the ongoing fluctuations and investor sentiment in the currency markets.
The pair is currently navigating through a critical technical landscape, with the pivot point set at 147.62. This level serves as a baseline for determining the near-term market direction. Resistance is observed at 148.20, 149.10, and 149.82, marking potential hurdles for upward movements. Conversely, support levels are established at 146.72, 145.89, and 144.76, offering cushions that could arrest any downward trends.
The technical indicators provide a balanced perspective. The Relative Strength Index (RSI) is at 53, suggesting a neutral market momentum with a slight tilt towards buying interest. Meanwhile, the 50-day Exponential Moving Average (EMA) at 148.23 closely aligns with the first resistance level, indicating a pivotal point for future price action. Given this setup, a cautiously bearish outlook emerges, recommending a selling strategy below 148.206, with a take-profit target at 146.722 and a stop loss at 148.880.
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- GOLD Price Analysis – March 14, 2024
GOLD Price Analysis – March 14, 2024
Daily Price Outlook
Despite increasing geopolitical tensions in the Middle East, the price of gold (XAU/USD) failed to extend its previous gains and turned bearish around below the $2,165 mark. This bearish trend can be attributed to the Fed's hawkish outlook, which tends to support the US dollar and contributing to gold's losses. The Federal Reserve might delay interest rate cuts due to high inflation in the US, as rising inflation often leads central banks to avoid lowering rates to prevent further inflationary pressure.
Apart from this, the current market mood favoring riskier investments has pushed down gold prices. Investors are opting for assets with higher potential returns rather than safer options like gold, causing its prices to drop. However, this trend might not last long. If tensions increase in the Middle East, demand for safe-haven assets like gold could rise again, leading to a rebound in its price. Additionally, uncertainty about the Federal Reserve's future interest rate decisions could also prevent gold prices from falling significantly lower.
Impact of High Inflation on the US Economy and Financial Markets
On the US front, the broad-based US dollar got stronger because people think the Federal Reserve might not cut interest rates soon. This is because a recent report showed that prices are going up in the US, meaning inflation is staying high. When inflation is high, the Fed might not want to lower interest rates because that could make inflation even higher. The expectation of delayed interest rate cuts by the Federal Reserve, due to high inflation, led to a stronger dollar and limited upward movement in gold prices.
On the data front, the latest US Consumer Price Index (CPI) report indicated a slight increase in inflation, with February's year-over-year rise at 3.2%, slightly higher than expected. The Core CPI, which excludes volatile food and energy prices, was also higher than anticipated at 3.8%. This suggests that inflation is going up, which can impact how much people can buy and the overall economy.
Impact of Risk-On Market Sentiment on Gold Prices
On the other hand, the risk-on-market sentiment has played a major role in undermining the safe-haven gold price as investors may prefer riskier assets over safe havens like gold, reducing its appeal and leading to price declines. However, the risk-on market sentiment was backed by the upbeat US inflation data and Fed's hawkish outlook, which positively impacts market sentiment by signaling confidence in the economy, leading to increased investment and a stronger dollar.
Geopolitical Tensions Drive Interest in Gold
On the geopolitical front, investors are expressing ongoing worries about the potential fallout from the prolonged conflicts between Russia and Ukraine, as well as the Israel-Hamas tension. These concerns are driving interest in precious metals like gold, which are traditionally seen as safe-haven assets during times of uncertainty. Russian President Vladimir Putin's recent remarks, suggesting readiness for a nuclear war if the US were to send troops to Ukraine, have escalated tensions further. Meanwhile, in the Middle East, Israeli attacks on locations including a UN aid distribution center in Rafah and Hezbollah fighters in the Bekaa Valley are exacerbating regional instability.
Therefore, the ongoing conflicts between Russia and Ukraine, along with tensions in the Middle East, are driving interest in gold as a safe-haven asset as geopolitical instability typically increases demand for gold, which could lead to an increase in its price.
GOLD (XAU/USD) - Technical Analysis
On March 14, gold experienced a slight decline, closing at $2,168.425, marking a 0.29% drop. This movement occurred amid mixed signals from technical indicators and key price levels that offer insights into potential future movements.
The pivot point for gold stands at $2,178, acting as a critical threshold for determining the metal's short-term direction. Resistance levels are mapped out at $2,197, $2,219, and $2,244, indicating potential points where upward momentum might face obstacles. Conversely, support levels are identified at $2,151, $2,131, and $2,111, which could provide floors for price dips.
Technical indicators present a nuanced view. The Relative Strength Index (RSI) at 54 suggests a neutral to slightly bullish sentiment among traders. Meanwhile, the 50-day Exponential Moving Average (EMA) at $2,146 supports an underlying upward trend. However, a double top formation near the $2,178 mark and a bearish engulfing candlestick pattern on the 4-hour timeframe signal caution, indicating possible selling pressure ahead.
Given these dynamics, the overall trend leans towards a cautious bearish outlook in the immediate term. Traders might consider a selling strategy below $2,177, targeting a take-profit level at $2,150, with a stop loss set at $2,196 to manage risk.
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- AUD/USD Price Analysis – March 14, 2024
AUD/USD Price Analysis – March 14, 2024
Daily Price Outlook
The AUD/USD currency pair remains under pressure amidst a combination of factors, including the performance of domestic equity markets, Australian economic indicators, and expectations regarding US monetary policy. Meanwhile, the decrease in the NAB Business Confidence Index exert some downward pressure on the AUD/USD pair, but the improvement in the NAB Business Conditions Index could offset this effect to some extent. Traders are closely monitoring developments in economic data releases, central bank announcements, and geopolitical events for further insights into the currency pair's direction.
Although, the losses in the AUD/USD currency pair could be short-lived as the Reserve Bank of Australia (RBA) continues to suggest it may need to raise rates even further. Philip Lowe's statement, along with Michelle Bullock's warning, suggesting potential interest rate increases, could bolster confidence in the Australian dollar, potentially leading to a positive impact on the AUD/USD pair.
Furthermore, the meeting between Wang Yi and Penny Wong could positively impact the AUD/USD pair if discussions lead to progress on economic cooperation, particularly the removal of trade barriers. However, sensitive issues like human rights and regional security could introduce uncertainty, affecting the currency pair negatively.
Australian Economic Data and Central Bank Commentary Impact on AUD/USD Pair
On the data front, Australia's NAB Business Confidence Index dipped to 0 in February, down from 1 in the prior month. This suggests a stall in business sentiment. However, there's a brighter note as the NAB Business Conditions Index rose to 10 from the revised reading of 7 (initially 6). This indicates improved business conditions, likely driven by factors such as economic recovery efforts and increased consumer spending. While the drop in confidence might raise concerns, the uptick in business conditions could provide some reassurance and potentially support economic growth moving forward.
It is worth noting that the Former RBA Governor Philip Lowe stated that there is a two-way risk on interest rates, indicating that rates could either rise or fall. This statement, coupled with current RBA Governor Michelle Bullock's warning that rates might need to increase, suggests a potential strengthening of the Australian dollar (AUD) against the US dollar (USD). If the RBA raises interest rates, it could attract foreign investors seeking higher returns, leading to an increased demand for the AUD. This increased demand could drive up the value of the AUD relative to the USD, making it more positive for the AUD/USD currency pair.
Prospects of Improved Trade Relations Between Australia and China Boost AUD/USD Pair
Another factor that could boost the AUD/USD pair was the upcoming meeting between Chinese Foreign Minister Wang Yi and Australia's Foreign Affairs Minister Penny Wong. The discussions are expected to include economic issues such as the removal of trade barriers, which could benefit both countries and contribute to increased trade activity.
This prospect of improved trade relations between Australia and China could positively impact the Australian dollar (AUD) due to increased demand for Australian exports, potentially strengthening the currency against the US dollar (USD). Additionally, positive outcomes from the meeting may instill confidence in the market, further supporting the AUD/USD pair.
US Dollar Strength and Economic Data Impact on AUD/USD Pair
On the US front, the bullish bias in the US dollar, backed by the hawkish Fed outlook, was seen as a key factor that could cap gains in the AUD/USD pair. Meanwhile, Yellen's cautious outlook on interest rates could bolster the US dollar against the Australian dollar (AUD), as it suggests potential for higher rates. This could attract investors to the USD, diminishing demand for the AUD and weakening the AUD/USD pair. Confidence in fiscal planning assumptions may also influence currency sentiment.
On the data front, US Consumer Price Index (CPI) figures for February showed a year-over-year increase of 3.2%, surpassing estimates and indicating rising inflation. The monthly index met expectations at 0.4%, signaling a consistent trend. Core CPI, excluding volatile food and energy prices, rose 3.8% year-over-year, slightly above expectations. However, the Monthly Budget Statement revealed a deficit of $296 billion in February, lower than expected but significantly higher than the previous month.
AUD/USD - Technical Analysis
On March 14, the AUD/USD pair slightly retreated, marking a 0.10% decrease to close at 0.66152. This movement reflects the pair's sensitivity to the latest economic data and shifts in market sentiment.
The technical landscape for AUD/USD is characterized by a mix of bullish and bearish signals. The pair's current position below the pivot point at 0.6658 suggests a cautious market outlook. Immediate resistance levels are located at 0.6668, 0.6698, and 0.6724, which could limit upward moves. On the downside, support is found at 0.6595, followed by 0.6573 and 0.6550, offering potential rebound points.
Technical indicators provide a nuanced view of the pair's future direction. The Relative Strength Index (RSI) stands at 55, indicating a slight bias towards buying pressure, while the 50-day Exponential Moving Average (EMA) at 0.6590 underscores a general uptrend. However, the presence of a double top formation near $0.6640 and a bearish engulfing candle on the 4-hour chart warn of possible selling activity ahead.
Considering these factors, the AUD/USD outlook suggests a cautiously optimistic trend with a recommendation for a buying strategy above 0.66035. Setting a take-profit at 0.66580 and a stop loss at 0.65733 could capitalize on the pair's current momentum while mitigating risks associated with potential downward corrections.
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- GOLD Price Analysis – March 14, 2024
GOLD Price Analysis – March 13, 2024
Daily Price Outlook
Despite the warmer US CPI report, indicating an increase in consumer prices, the price of gold (XAU/USD) continued to rise and remained steady above the $2,160 level. This upward trend was driven by the weakening US dollar, which did not strengthen even as US Treasury bond yields increased following the slightly higher-than-expected US consumer inflation for February. However, this lack of dollar strength could be attributed to the increasing belief among market participants that the Federal Reserve (Fed) will begin cutting interest rates at its June policy meeting.
In addition to this, the risk-off market sentiment, pressured by geopolitical risks, was seen as another key factor that provided support to the safe-haven gold. Meanwhile, cautious sentiment continue in the market ahead of the highly anticipated two-day FOMC monetary policy meeting starting next Tuesday. This keeps investors cautious, leading them to invest in gold as a safe-haven asset.
US Dollar Remains Weak Despite Inflation Report; Fed Rate Cut Speculation Grows
Despite the hot US inflation report, which fueled speculations that the Federal Reserve may delay interest rate cuts, the broad-based US dollar failed to gain much support and remained under pressure on the day. This is due to the growing acceptance that the Federal Reserve (Fed) will start cutting interest rates at the June policy meeting. According to the CME Group's FedWatch tool, there's about a 70% chance that the US central bank will lower interest rates at its June meeting, as per market expectations.
On the data front, the latest report on the US Consumer Price Index (CPI) shows a 3.2% year-over-year increase in February, slightly higher than the expected 3.1%. This indicates a slight uptick in inflation. Additionally, the annual Core CPI, which excludes volatile food and energy prices, came in at 3.8%, slightly above the anticipated 3.7%. These numbers suggest a continued upward trend in inflation, which could impact consumers' purchasing power and the overall economy.
Therefore, the impact of the US inflation report on the gold price was muted, as the dollar remained weak. In the meantime, the expectations of Fed rate cuts in June offset concerns about rising inflation, keeping gold attractive as a safe-haven asset. Moving on, policymakers need to closely monitor these developments to assess the need for any adjustments to monetary policy in order to maintain price stability and economic growth.
Geopolitical Developments Boost Gold's Safe-Haven Appeal
On the geopolitical front, the ongoing discussions to resolve the Israel-Hamas conflict showing no progress, which is creating uncertainty in the market. Also, Houthi rebels in Yemen, backed by Iran, plan to increase military actions during Ramadan in support of Palestinians and in response to Gaza. Furthermore, the US has conducted defensive strikes against Houthi targets following anti-ship missile attacks. These events are escalating global tension, prompting investors to seek safety in assets like gold.
Therefore, geopolitical tensions, including stalled talks in Gaza and Houthi escalations in Yemen, along with US strikes, bolster the safe-haven appeal of gold, attracting investors amid uncertainty.
GOLD (XAU/USD) - Technical Analysis
In today's market, gold prices exhibited a marginal decline of 0.01%, settling at $2159.745. The subtle movement in price points towards a cautious stance among investors, reflecting on broader market sentiments and economic indicators. The pivot point for today is set at $2198, suggesting a tentative balance in trader expectations.
Technical indicators for gold present a nuanced picture. The Relative Strength Index (RSI) stands at 49, hovering near the midpoint of the scale, which indicates a balanced field between buying and selling pressures. Meanwhile, the 50-day Exponential Moving Average (EMA) at 2139 underscores a potentially bullish undercurrent, as current prices flirt closely with this level.
The immediate resistance and support levels further delineate the battleground for gold's short-term trajectory. Resistance is first encountered at $2197, with subsequent ceilings at $2227 and $2252. Conversely, the asset finds immediate support at $2131, with additional safety nets at $2111 and $2090.
Conclusion: The overall trend leans towards bullish above the $2155 mark, encouraging a strategic entry point for buyers. A targeted take profit at $2197 and a stop loss set at $2132 are recommended to navigate the anticipated volatility.
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- EUR/USD Price Analysis – March 13, 2024
EUR/USD Price Analysis – March 13, 2024
Daily Price Outlook
Despite the dovish remarks from ECB members, the EUR/USD currency pair managed to regain strength and turned bullish around the 1.0930 level. However, the upticks in the pair can be attributed to the bearish US dollar, which is losing its traction in the wake of increasing bets that the Federal Reserve (Fed) will begin cutting interest rates at its June policy meeting. The US dollar initially gained some support from the warmer US CPI report, but it was short-lived.
On the flip side, the report of Germany's Harmonized Index of Consumer Prices meeting expectations is likely to have a neutral impact on the EUR currency, as it reflects stability in inflation levels, which was already anticipated by the market. Meanwhile, the comments from ECB members regarding potential interest rate cuts have the potential to weaken the EUR currency, as they suggest a dovish stance from the ECB in response to inflation concerns, which could lead to lower interest rates.
Looking forward, traders are cautious, awaiting cues from upcoming US Core Producer Price Index (PPI) and Retail Sales data scheduled for release on Thursday.
Impact of ECB Policy Expectations on the EUR/USD Pair
On the Euro front, recent developments suggest a mixed outlook. The German Harmonized Index of Consumer Prices remained steady at 2.7% year-over-year, meeting expectations. However, there are indications from ECB officials, including Governing Council member François Villeroy de Galhau, of a potential interest rate cut in the spring. This is in response to progress in addressing inflation concerns.
Bank of France Governor Robert Holzmann believes a rate cut is more likely in June, citing the need for confirmed projections amidst high uncertainty. Governor Pierre Wunsch of the National Bank of Belgium also emphasized the ECB's need to consider a rate cut, despite challenges posed by wage inflation and price rises for services.
Therefore, the mixed outlook, with potential interest rate cuts from the ECB, weaken the EUR as uncertainty surrounding inflation and differing views among officials could lead to downward pressure on the EUR/USD pair.
Impact of Fed Policy Expectations on the EUR/USD Pair
Despite reports of higher consumer prices, the US dollar is under pressure as investors increasingly believe the Federal Reserve will start cutting interest rates as early as June. This belief, coupled with a generally positive market sentiment, is weakening the US dollar. The latest US Consumer Price Index (CPI) report showed a slight increase in inflation, with February's year-over-year rise at 3.2%, slightly higher than expected. The Core CPI, which excludes volatile food and energy prices, was also higher than anticipated at 3.8%. These numbers suggest a continued rise in inflation, impacting consumer purchasing power and the overall economy.
Therefore, the weakening US dollar could strengthen the EUR/USD pair as investors anticipate Fed interest rate cuts, boosting the euro's value against the dollar amid positive market sentiment.
EUR/USD - Technical Analysis
In the current trading environment, the EUR/USD pair has shown a slight decline of 0.01%, positioning itself at 1.0921. This minor adjustment mirrors the broader market's cautious anticipation of economic indicators and geopolitical events, influencing investor sentiment towards the Euro against the US Dollar.
Technical analysis reveals that the pair is trading just above a critical pivot point at 1.0914, hinting at underlying support that might pave the way for potential upward movement. Immediate resistance levels are identified at 1.0979, 1.1043, and 1.1106, marking potential hurdles the pair might face in its ascent. Conversely, support is observed at lower thresholds of 1.0868, 1.0817, and 1.0762, serving as vital markers that could trigger a bearish trend if breached.
The Relative Strength Index (RSI) stands at 51, suggesting a relatively balanced market with a slight tilt towards buying pressure. The 50-day Exponential Moving Average (EMA) at 1.0899 further supports the notion of a bullish bias, provided the pair maintains its stance above this moving average.
Conclusion: The EUR/USD pair exhibits potential for a bullish trend, conditional on sustaining above the pivot point of 1.0914. An entry price for buying is recommended above 1.09146, targeting a take profit at 1.09772, with a stop loss placed at 1.08731 to mitigate risks associated with unforeseen market movements.
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- GBP/USD Price Analysis – March 13, 2024
GBP/USD Price Analysis – March 13, 2024
Daily Price Outlook
The GBP/USD currency pair maintained its previous day's winning streak, hitting an intraday high of $1.2800 mark. The upward movement was supported by delayed BoE rate cut bets, underpinning the GBP and lending support to the GBP/USD pair. Furthermore, the bearish US dollar, pressured by increasing bets that the Federal Reserve (Fed) will begin cutting interest rates at its June policy meeting, was seen as another key factor that kept the GBP/USD pair higher.
Impact of BoE Rate Expectations on GBP/USD Pair and Market Sentiment
On the UK front, the Bank of England (BoE) is expected to maintain higher interest rates for a longer period. This anticipation provided additional support to the GBP/USD currency pair, which had already been bolstered by bets against a BoE rate cut. Essentially, investors were betting that the BoE would delay any potential rate cuts, which strengthened the GBP against the US dollar.
Hence, the expectations of prolonged higher interest rates from the Bank of England (BoE) create a positive outlook for the GBP, as it signifies confidence in the UK economy, attracting foreign investment and strengthening the currency.
Impact of Fed Expectations on GBP/USD Pair and Market Sentiment
Despite reports of higher consumer inflation, the increasing bets that the Federal Reserve (Fed) will begin cutting interest rates as early as June are putting pressure on the US dollar. Additionally, a generally positive sentiment in the market is also weighing on the US dollar's strength.
On the US front, the broad-based US Dollar remained bearish and continuously lost ground despite the warmer US CPI report. On the data front, the latest report on the US Consumer Price Index (CPI) shows a 3.2% year-over-year increase in February, slightly higher than the expected 3.1%. This indicates a slight uptick in inflation. Additionally, the annual Core CPI, which excludes volatile food and energy prices, came in at 3.8%, slightly above the anticipated 3.7%. These numbers suggest a continued upward trend in inflation, which could impact consumers' purchasing power and the overall economy.
Despite the warmer US CPI report, the GBP/USD pair maintained its bullish momentum, supported by expectations of Fed interest rate cuts and a generally positive market sentiment, which weakened the US dollar. Moving ahead, traders are cautious ahead of the highly anticipated two-day FOMC monetary policy meeting starting next Tuesday.
GBP/USD - Technical Analysis
The GBP/USD pair experienced a nominal decrease of 0.01%, landing at 1.27795, indicating a market teetering on the brink of directional bias. This slight movement reflects the broader market's ongoing assessment of economic data releases and geopolitical developments, impacting the Sterling against the Dollar.
The currency pair hovers just below its pivot point at 1.2781, suggesting that it is at a critical juncture. Resistance levels at 1.2824, 1.2857, and 1.2893 delineate the potential challenges ahead for bullish momentum. Conversely, immediate support is established at 1.2747, with further cushions at 1.2713 and 1.2672, marking essential levels that could influence a bearish turn if the pair dips below these markers.
The Relative Strength Index (RSI) at 47 points towards a market equilibrium, with a slight inclination towards selling pressure. Meanwhile, the 50-day Exponential Moving Average (EMA) at 1.2760 supports a cautious bullish outlook, suggesting a potential for upside movement if the pair can consolidate above this average.
Conclusion: The GBP/USD's current positioning indicates a neutral to slightly bearish trend, with an opportunity for reversal should it maintain above 1.27526. An advisable strategy would be to enter a buy position above this threshold, targeting 1.28055 for profit-taking, while placing a stop loss at 1.27207 to mitigate potential losses.
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- GOLD Price Analysis – March 13, 2024
GOLD Price Analysis – March 12, 2024
Daily Price Outlook
Despite the bearish US dollar, the gold price (XAU/USD) failed to extend its previous nine-day upward rally and lost some of its traction around the $2,174 level. However, the reason for its downward trend can be attributed to the ongoing cautious sentiment in the market ahead of latest US consumer inflation figures. Investors are awaiting this data for more clues about the Federal Reserve's (Fed) rate-cut path before placing fresh directional bets. In contrast to this, the increasing acceptance that the US central bank will cut its key interest rate at the June policy meeting leads to a further decline in the US dollar, which may help the gold price to limit its losing streak.
Impact of Fed Comments and CPI Report on USD and Gold Prices
On the US front, the broad-based US dollar has been showing bearish performance, struggling to regain strength. This could be attributed to previously released mixed data, increasing speculation of a Fed rate cut in June. Powell suggested that rates might be lowered later in the year if inflation remains around 2%. On the previously released data front, a spike in the US unemployment rate suggested a possible change in the Federal Reserve's policy.
After a mixed US jobs report, more people expect the Federal Reserve to lower interest rates. This has caused the yield on the 10-year US government bond to drop to a five-week low near 4.0%. Traders now think there's a 70% chance of a rate cut by June, which is making people who support the US dollar more careful and is helping gold prices.
On the upcoming data front, the crucial US CPI report is expected to influence expectations about the Federal Reserve's rate cuts, boosting XAU/USD. The headline CPI is predicted to rise to 0.4% in February, with the yearly rate staying at 3.1%. Meanwhile, the Core CPI is forecasted to ease to a 3.7% YoY rate from the previous 3.9%.
However, Fed Chair Jerome Powell, in his recent testimony, indicated that high inflation might delay any rate cuts. If the upcoming US CPI data shows high inflation, the Fed may signal fewer rate cuts, leading to a drop in gold prices. Conversely, a lower CPI reading could suggest an early rate cut, boosting gold prices. This data is likely to create volatility and short-term trading opportunities for gold.
Therefore, the speculation of a Fed rate cut and comments from Powell have weakened the USD, boosting gold prices. Traders are now pricing in a 70% chance of a rate cut by June, supporting gold further.
Market Sentiment and Gold Price Stability Ahead of CPI Data
On the other hand, the risk-off market sentiment limited additional losses in gold prices. Investors awaited key U.S. Consumer Price Index data, expected to influence the Federal Reserve's interest rate cut plans in 2024. On the geopolitical front, there were reports of Israeli forces attacking people seeking aid in Gaza, causing injuries or deaths. Meanwhile, the World Health Organization provided aid to al-Shifa Hospital in Gaza, which is facing shortages. Furthermore, Israel also carried out strikes near Lebanon's Baalbek.
Hence, the geopolitical tensions, including Israeli attacks in Gaza and strikes near Lebanon, alongside restrictions at Al-Aqsa Mosque, heighten investor concerns, boosting the safe-haven appeal of gold.
GOLD (XAU/USD) - Technical Analysis
Gold's performance on March 12 exhibited a mild decline, with the price dropping to $2176.425, marking a 0.29% decrease. This subtle shift in value places the precious metal in a precarious position as it navigates the volatile markets. The four-hour chart indicates that the pivot point stands at $2196.42, suggesting a critical juncture for future price movements. Notably, gold seems to be grappling with resistance levels at $2227.22, $2251.98, and $2277.02, which could hinder its upward trajectory. Conversely, support levels at $2156.18, $2130.57, and $2111.27 provide a cushion, potentially halting further declines.
The Relative Strength Index (RSI) reads at 66, indicating that gold is teetering on the edge of the overbought zone. This positioning suggests caution, as prices could be prone to a reversal if investors decide to lock in profits. Moreover, the 50-day Exponential Moving Average (EMA) at $2132.845 reinforces the bullish undertone observed over recent sessions, yet the current price movement hints at potential selling pressure below the $2195 level.
Considering these dynamics, the overall trend for gold leans towards a cautious outlook. Investors are advised to consider a selling strategy below $2185, targeting a take profit at $2130, with a stop loss set at $2215. This approach aligns with the observed resistance and suggests that, despite gold's resilience, market sentiment may pivot towards bearish tendencies in the short term.
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AUD/USD Price Analysis – March 12, 2024
Daily Price Outlook
Despite the bearish US dollar, the AUD/USD currency pair was unable to halt its previous session's losing streak and is still showing sluggish performance around 0.6609. However, the sluggish bias could be attributed to the decrease in the NAB Business Confidence Index, suggesting weakened business sentiment. This could potentially impact the Australian dollar negatively due to reduced investor confidence. Furthermore, the risk-off market sentiment tends to undermine riskier assets like the Australian Dollar (AUD) and has contributed to the AUD/USD pair's losses.
In contrast, the increased trade surplus indicates a strong economy, but the slightly lower-than-expected GDP growth might temper the positive impact on the Australian dollar. Furthermore, the abolition of import tariffs is likely positive for the Australian dollar as it enhances trade efficiency, reduces business costs, and signals economic liberalization, boosting investor confidence in the currency. Meanwhile, the mixed data from China, with CPI beating expectations but PPI falling short, have a neutral impact on the Australian dollar as it reflects both positive and negative economic indicators from Australia's largest trading partner.
Impact of Australian Economic Data on AUD/USD Pair
On the data front, Australia's NAB Business Confidence Index dipped to 0 in February, down from 1 in the previous month, while the NAB Business Conditions Index improved to 10 from 7 (revised from 6). Meanwhile, the Australian Trade Balance surplus rose to $11,027 million in February, slightly below the market's expected increase to $11,500 million. GDP grew by 0.2% QoQ in Q4 2023, slightly below expectations of 0.3%, with YoY expansion at 1.5%, surpassing expectations of 1.4% but falling short of the previous 2.1% growth.
Moreover, Treasurer Jim Chalmers announced the government's plan to abolish nearly 500 import tariffs from July 1, 2024, aiming to streamline trade and save businesses over A$30 million annually in compliance costs.
Therefore, the mixed economic data, including the drop in business confidence and the slight GDP growth miss, weaken the Australian dollar (AUD) against the US dollar (USD). However, the tariff abolition announcement provide some support, potentially limiting the AUD/USD downside.
Impact of Chinese Economic Data on AUD/USD Pair
On the China front, China's Consumer Price Index (CPI) rebounded in February, rising by 0.7% year-over-year after a 0.8% decline in January, surpassing market expectations. Monthly CPI inflation also exceeded expectations, increasing by 1.0% compared to a 0.3% rise in January. However, the Producer Price Index (PPI) dropped by 2.7% year-over-year in February, a larger decline than the 2.5% seen in January and below market expectations.
Therefore, the mixed data from China, with CPI surpassing expectations but PPI weakening, could influence the AUD/USD pair. The CPI rebound might offer support to the Australian dollar (AUD) against the US dollar (USD), while concerns over deflationary pressures from the weaker PPI could weigh on sentiment.
Impact of US Economic Data and Geopolitical Tensions on AUD/USD Pair
On the US front, the weakening US dollar could support the AUD/USD pair as disappointing macro data fuels expectations of rate cuts. Federal Reserve Chair Jerome Powell hinted at potential rate reductions if inflation hovers around 2%, further dampening the dollar. Meanwhile, the upcoming US CPI report could intensify rate cut expectations, impacting dollar. Powell's remarks on inflation's influence on rate cuts add to market uncertainty, creating short-term trading opportunities for gold.
On the geopolitical front, ongoing tensions in the Middle East have created a risk-off market sentiment. This has negatively impacted riskier assets like the Australian Dollar (AUD), keeping the AUD/USD pair under pressure. However, the situation intensified with ongoing Israeli attacks on Gaza, resulting in a high number of casualties and injuries. This instability has contributed to a cautious market environment, affecting currencies like the Australian Dollar.
AUD/USD - Technical Analysis
The Australian Dollar against the US Dollar (AUD/USD) saw a minor uptick, registering a 0.03% increase to 0.66156. The currency pair's movement remains constrained, signaling a cautious approach among traders. A detailed look at the four-hour chart reveals a critical pivot point at 0.66162, which the AUD/USD hovers just below, indicating a delicate balance in market sentiment.
Resistance levels are outlined at 0.66506, 0.66856, and 0.67296, suggesting potential hurdles should the pair attempt an upward movement. Conversely, support is established at lower thresholds of 0.65733, 0.65348, and 0.64777, marking zones where declines may be arrested. The Relative Strength Index (RSI) at 57 denotes a neutral market condition, neither overbought nor oversold, supporting the potential for either direction.
Additionally, the 50-day Exponential Moving Average (EMA) at 0.65746, slightly below the current price, could offer a foundation for support. However, the presence of several Doji candles below the pivot point of 0.6616 hints at indecision and a potential tilt towards slight selling pressure.
Given these dynamics, the overall outlook suggests a cautious bearish sentiment for the AUD/USD pair. Traders might consider a selling strategy below the pivot point of 0.66161, targeting a take profit level at 0.65755, with a stop loss placed at 0.66357. This recommendation aligns with the observed technical patterns and the current stance of the market indicators.
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