Mon, Apr 15, 2024

XAUUSD Analysis

XAUUSD Gold price has broken the Descending channel in upside

Gold was downgraded to Neutral by UBS, which predicted that prices would reach $1950 this year. The US economy is recovering, and the US dollar is strengthening after plunging.

The shifting environment has increased nominal and real US yields, strengthening the dollar and eroding gold’s short-term appeal. All the same, we do not believe that short-term challenges undermine the gold portfolio case. We have downgraded the precious metal to neutral in our global strategy and slightly lowered our year-end Gold forecast to $1,950 as US recession risks have now diminished and the dollar has strengthened again.  We continue to advise investors to diversify their USD holdings widely and include gold in their portfolios.

XAGUSD Analysis

XAGUSD Silver Price is moving in an Ascending channel and the market has rebounded from the higher low area of the channel

XAGUSD Silver Price is moving in an Ascending channel and the market has rebounded from the higher low area of the channel

Inflation estimates for the next five and ten years fell to 2.26% and 2.35%, respectively, which caused the US dollar to weaken on the final day. The US dollar is disappointed because the rate hike is not anticipated in the next few months.

The market’s recent distaste for the US Dollar can be attributed to US inflation expectations, which propelled the currency to a multi-day high. Nevertheless, the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data show that inflation expectations are declining, at the very least ending a two-day winning streak, and retreating from the weekly peak. Note that according to the calculations mentioned above, the 5-year and 10-year inflation expectations fall to 2.26% and 2.35% at the latest. This, in turn, fuels speculation that the Federal Reserve’s cycle of hawkish monetary policy may be ending sooner rather than later. The policymakers preparing speeches for the annual Jackson Hole Symposium, which takes place over two days, will be supported by the same dovish Fed bias. The US Dollar is also negatively impacted by the disappointing August PMI and US-China optimism prints, in addition to the probable weakness in the US inflation indicators. Next, the weekly Jobless Claims, the Chicago Fed National Activity Index, the US Durable Goods Orders, and the Kansas Fed Manufacturing Activity will all be featured on the calendar.

USDCHF Analysis

USDCHF is moving in the Descending channel and the market has reached the lower high area of the channel

USDCHF is moving in the Descending channel and the market has reached the lower high area of the channel

According to Swiss Customs reports, the country’s trade balance in July was 3129 million, as opposed to the expected 4300 million. The country’s exports decreased to 16.7% while its imports fell by 12.5%.

Thursday’s early Asian session sees the USDCHF pair losing ground and slipping to 0.8775. A measure of the value of the US dollar relative to six other major currencies, the US Dollar Index (DXY), falls to 103.35 from a two-month high of 103.98. Ahead of Thursday’s Jackson Hole Symposium and the release of US economic data, markets become cautious. There was a slow expansion of business activity in the United States in August. The preliminary S&P Global Composite PMI dropped from 52.0 to 50.4, which was below the 52.0 market expectation. This decline is the biggest since November 2022. The S&P Global Manufacturing PMI decreased to 47 from 49 in the previous month, and the Services PMI decreased to 51 from 52.4. The data caused the Greenback to weaken generally, which in turn caused the USDCHF pair to decline. On Thursday, the Jackson Hole Symposium may provide clues regarding future monetary policy. The market is pricing in 88% of cases that the Federal Reserve (Fed) will pause interest rates at its September meeting, according to the CME Fed Watch Tool.

Regarding the Swiss franc, the trade balance of Switzerland decreased to 3,129 million versus the market estimate of 4,300 million. In July, however, exports decreased by 16.7%. According to a Tuesday report from the Swiss Federal Customs Administration, imports decreased by 12.5% during that same period. Nonetheless, growing apprehensions regarding China’s declining economic circumstances ought to restrain market optimism and that of risk-averse investors. This could therefore work against the USDCHF pair and favour Switzerland, a long-standing safe-haven. The USDCHF pair is still vulnerable to fluctuations in the USD price due to the absence of any economic data from Switzerland that could move the market. The US weekly Jobless Claims and Durable Goods Orders, which are due later in the day, will be watched closely by market participants. In addition, the Jackson Hole Symposium is going to be a highly anticipated event in advance of Friday’s speech by Federal Reserve (Fed) Chairman Jerome Powell. The happenings will be crucial in figuring out the pair’s next move.

EURUSD Analysis

EURUSD is moving in an Ascending channel and the market has reached the higher low area of the channel

EURUSD is moving in an Ascending channel and the market has reached the higher low area of the channel

Germany’s composite PMI came in at 44.7 from 48.3 expected and 48.5 in July, while the Eurozone composite PMI came in at 47 from 48.5 expected. Due to the US publishing negative domestic data figures this week, euro pairs increased in value relative to the US dollar.

For the second day in a row, the EURUSD pair continues to rise; as of this writing on Thursday during the Asian session, it was trading at 1.0870. Despite the negative PMI data from Germany and the Eurozone released on Wednesday, the pair has demonstrated resilience. This has caused investors to become cautious as they search for more signs about the inflation outlook. The preliminary HCOB Composite PMI for the Eurozone for August showed a decrease of 47, as opposed to the anticipated 48.5 from the prior 48.6. Meanwhile, the German Composite PMI dropped to 44.7 from 48.5 in July, below the 48.3 market consensus. However, on Wednesday, the US released preliminary PMI data that was lower than anticipated. August’s S&P Global Composite PMI fell to 50.4 from the previous 52, below the predicted level of stability. The US Dollar USD correction was strengthened by the downward pressure that soft economic data from the US put on US Treasury yields.

EURCHF Analysis

EURCHF is moving in the Descending channel and the market has reached the lower low area of the channel

EURCHF is moving in the Descending channel and the market has reached the lower low area of the channel

Given the moderate GDP and inflation data released the week before, investors had assumed that the European Central Bank ECB would keep interest rates unchanged at the next monetary policy meeting. Disappointing US economic data, however, is pushing the EURUSD higher as it lessens the chance of a September interest rate hike by the US Federal Reserve Fed. As of this writing, the US Dollar Index DXY, which gauges how the USD performs in relation to the six major currencies, is trading at roughly 103.40. At the Jackson Hole symposium on Friday, investors are anticipating speeches from ECB President Christine Lagarde and Fed Chair Jerome Powell. These speeches could offer insights into the financial and economic sectors and help to shape potential strategies in response to the current inflationary outlook. It is probable that market participants will also keep an eye on the Gross Domestic Product GDP of the Eurozone and the US Initial Jobless Claims. These datasets might be useful in giving traders of the EURUSD pair new signals.

GBPCAD Analysis

GBPCAD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel

GBPCAD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel

UK Purchasing manager index numbers came at downbeat data making GBP Down against JPY.UK Manufacturing PMI dropped to 42.5 for August from 45.3 previous reading.

The UK S&P Global/CIPS Manufacturing PMI preliminary readings for August fell to 42.5 from 45.3 against 45.0 market expectations. The Services PMI, on the other hand, also saw a slight decline to 48.7 from 50.8 predicted and 51.5 recorded in July. In light of this, the S&P Global/CIPS Composite PMI for Britain decreased to 47.9 for the aforementioned month from 50.8 the previous month and 50.3, as predicted by analysts.

NZDUSD Analysis

NZDUSD is moving in the Descending channel and the market has fallen from the lower high area of the channel

NZDUSD is moving in the Descending channel and the market has fallen from the lower high area of the channel

The New Zealand Dollar may exhibit a downtrend over the long term, per MUFG’s analysis. China’s slowing growth is having an impact on NZ exports and economic growth, according to RBNZ Chief Economist Conway; hence, the OCR rate may be lower than anticipated soon.

As of now this month, the Australian and New Zealand dollars have both dropped significantly against the US dollar, falling by about -4.1%, making the Kiwi the second worst performing G10 currency. MUFG Bank economists assess the outlook for the NZD. Chief Economist Paul Conway of the Reserve Bank of New Zealand has expressed concern about the sharp decline in the value of the kiwi, saying that they will continue to be mindful of it. According to him, the recent depreciation is a reflection of less risk aversion and interest rate differentials.

Along with other currencies linked to commodities, the New Zealand Dollar has underperformed this month. The loss of growth momentum in China has received more attention. We would lower the OCR sooner than we have signalled, said Conway, Chief Economist at RBNZ, if there was a more significant slowdown in China than the RBNZ expects, hurting exports and growth. All things considered, the events should support the recent bearish trend on the Kiwi.

CHFJPY Analysis

CHFJPY is moving in the Box pattern and the market has rebounded from the horizontal support area of the pattern

CHFJPY is moving in the Box pattern and the market has rebounded from the horizontal support area of the pattern

According to Hiromi Yamaji, CEO of Japan Exchange Group, the Japanese economy suffers from the weaker yen. The weaker yen means higher import costs.

Japan Exchange Group Inc.’s CEO, Hiromi Yamaji, berated the declining value of the softer yen while pointing out its diminishing advantages. The head of Japan’s stock exchanges reportedly stated late on Wednesday that the Yen is too weak and its benefits for Japanese stocks are diminishing while negative economic side effects are starting to show, according to Bloomberg. The weaker Yen has a detrimental economic impact on Japan’s import bill, according to Yamaji. Hiromi Yamaji of Japan continued, It is no longer such a big tailwind for manufacturers like automakers, which have factories all over the world.

AUDCAD Analysis

AUDCAD is moving in the Descending channel and the market has reached the lower high area of the channel

AUDCAD is moving in the Descending channel and the market has reached the lower high area of the channel

The manufacturing PMI dropped to 49.4 from 49.6 expected, the service PMI to 46.7 from 47.9 expected, and the Australian Global Composite PMI to 47.1 from 48.2 in July. Weak domestic data has led to a weakening of the Australian dollar in the market.

The Australian S&P Global Composite PMI’s initial reading dropped from 48.2 in July to 47.1 on Wednesday. Meanwhile, the PMI for Manufacturing fell to 49.4 from the previous month’s 49.6 expected and PMI for Services fell to 46.7 from the previous month’s 47.9 expected and PMI. Additionally, the Loan Prime Rate (LPR) of the People’s Bank of China (PBoC) was cut for a year by a less significant amount than expected, from 3.55% to 3.45%. This puts some pressure on the Australian as a result. Investors will be watching the news stories about China’s economic problems because they could affect the Australian dollar, which is a good indicator of China’s economic future.

The EU free trade agreement will be finalised in the coming weeks, according to Australian Trade Minister Dan Tehan. The last time talks stopped was in July. By signing this free trade agreement, if it is successful, the EU will have access to minerals with Australia.

Australia’s Trade Minister Dan Tehan stated on Thursday that he was hopeful of discussions with the EU commissioner for trade in the coming weeks in reference to the possibility of an agreement on trade between the EU and Australia. Better access to essential minerals for Europe would result from an EU free trade agreement. After negotiations stalled in July, I anticipate a better offer for an EU free trade agreement.

CADCHF Analysis

CADCHF is moving in the Box pattern and the market has rebounded from the Horizontal support area of the pattern

CADCHF is moving in the Box pattern and the market has rebounded from the Horizontal support area of the pattern

Canada’s June month retail sales were 0.10% MoM, compared to a forecast of 0.0%; retail sales excluding autos were -0.80%, compared to -0.30% in the prior data. Because of the weaker domestic data, the Canadian dollar is marginally weaker than counter pairs.

The heavy draw of oil inventories, as per the weekly stockpile data from the US Energy Information Administration (EIA), contrasts with the market’s fears of lesser energy demand due to the latest downbeat PMIs to trouble the oil traders. The Loonie pair illustrates the cautious mood of the market ahead of a slew of US data and the start of a two-day annual Jackson Hole Symposium. In contrast to the market consensus of 0.0%, Canada’s retail sales for June showed 0.1% MoM revised growth. Meanwhile, retail sales excluding autos fell to -0.8% from -0.3% previous figures (revised) and 0.3% market


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