Market Analysis
XAUUSD
Forecast: Upward Movement
Fundamental Analysis:
In April, China's central bank continued its streak of expanding gold reserves for the 18th consecutive month, contributing to the surge in the precious metal's value. The People’s Bank of China reported a 60,000 troy ounce increase in bullion holdings, totaling 1.87 tons and reaching a total of 2264.3 tons.
Gold (XAU/USD) experienced a slight setback on Tuesday after a strong performance on Monday, dipping approximately 0.4% to settle near $2,315. Despite recent fluctuations, gold has been in a consolidation phase over the past two weeks, with volatility decreasing, possibly indicating traders' anticipation of new catalysts before taking further action.
Technical Analysis:
From a technical standpoint, the market's consolidation phase is expected to persist until prices either break above resistance at $2,355 or breach support at $2,280. If resistance is surpassed, attention will shift to the $2,415 level, potentially sparking renewed interest in reaching the all-time high. Conversely, a break below support could trigger a decline toward a significant Fibonacci level at $2,260, with further downside pressure potentially targeting $2,225.
EURUSD
Forecast: Upward Movement
Fundamental Analysis:
The US Dollar gained strength following optimistic remarks from Minneapolis Fed President Neel Kashkari, suggesting a prolonged period of unchanged interest rates. Consequently, this weakened the EUR/USD pair. However, in the Eurozone, March's Retail Sales (MoM) showed a robust increase of 0.8%, bouncing back from February's revised decline of 0.3%. This surpassed expectations of a 0.6% rise. Moreover, Retail Sales (YoY) saw a 0.7% uptick, indicating the first positive growth in retail since September 2022. This points to an encouraging shift in consumer spending behavior.
Technical Analysis:
After encountering resistance at the critical 1.0790 level marked by its 50-day and 200-day simple moving averages, EUR/USD experienced a minor decline, approaching support at 1.0750. Maintaining this support level is crucial to prevent a deeper retracement. Failure to do so may trigger a move towards 1.0725, potentially extending to 1.0695.
GBPUSD
Predicted Increase in GBP/USD
Fundamental analysis
According to the fundamental analysis, it's anticipated that there won't be any changes in interest rates this month, with the Bank Rate likely to remain at 5.25%. Consequently, market attention will be directed towards the voting split among the Monetary Policy Committee members and the accompanying commentary. While there could be varying opinions among the committee members, it's improbable that anyone will advocate for higher rates.
Despite inflation in the UK persisting above the 2% target set by the government, it has been showing a downward trend. With monetary tightening measures already in place, albeit gradual, and the UK economy facing sluggish growth, further monetary tightening seems unlikely.
Technical Analysis:
From a technical standpoint, GBP/USD witnessed a decline, approaching the 1.2500 level. A clear breach below this level in the near future could intensify bearish sentiment, potentially leading to a test of support around 1.2430. Although there might be some stabilization around these levels followed by a rebound, a breakdown could signal a retreat towards the psychological support at 1.2300.
BTCUSD
Forecast: Upward Movement
Fundamental Analysis:
In a recent 13F-HR filing, Susquehanna International Group revealed a significant investment of over $1 billion in Bitcoin BTCUSD exchange-traded funds during the first quarter of 2024. This substantial move by a renowned quantitative trading firm has ignited excitement within the crypto market, particularly as Bitcoin options traders position themselves for a potential surge in September. Confidence in Bitcoin's trajectory is palpable in the derivatives market, where a notable portion of traders are betting on the cryptocurrency surpassing the $100,000 mark.
Technical Analysis:
Examining the 4-hour chart indicates that Bitcoin's price has retraced from its recent gains, seeking support around the $62,500 level. Upon consolidation within the $62,500 to $65,290 range, there is anticipation for a breakout towards $67,000 and possibly reaching all-time highs. Conversely, a failure to sustain above the critical $61,000 threshold may trigger a downward movement towards $56,500.
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