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Market Analysis

XAUUSD Prices Poised for Consolidation Amid Dollar Strength
Dupoin · 83.9K Views

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XAUUSD

 

Predicted Movement: Downward

 

Fundamental Analysis:

 

Recent statements from Federal Reserve officials suggest a cautious approach towards interest rate adjustments. This attitude has bolstered the US dollar slightly while dampening the price of gold. The potential strengthening of the US dollar could further pressure gold prices as it may lead to inflation stabilizing around the targeted 2%, paving the way for policy normalization. Additionally, the lack of progress in resolving tensions between Israel and Palestine has provided some support to gold prices, albeit limited.


Technical Analysis:

 

Gold prices have remained range-bound between $2,280 and $2,330 for an extended period, reflecting market uncertainty. Currently, the metal is hovering near the 20-day Exponential Moving Average (EMA) of $2,314.60, indicating a likelihood of consolidation ahead. The Relative Strength Index (RSI) over the past 14 periods has been fluctuating between 40.00 and 60.00, pointing towards decreased volatility in the near term.

 

 

EURUSD

 

EURUSD Outlook: Bullish

 

Fundamental Analysis:

 

European benchmark stock indices have surged to record highs on the back of robust and sustained corporate profits, bolstering market sentiment. In a significant move, the Swedish central bank has opted for a 0.25% reduction in its main interest rate, the first such cut in eight years. This decision has spurred confidence in the Euro, particularly against other major currencies. Notably, the STOXX 600 index has climbed by 0.49%, while the German DAX30, French CAC40, and UK's FTSE 100 indices have also seen notable gains, rising by 0.48%, 0.84%, and 0.34% respectively. With the European Central Bank poised as the frontrunner among major central banks to initiate interest rate adjustments, investors are increasingly bullish on the Euro's prospects.

 

Technical Analysis:

 

The EUR/USD pair is currently positioned with a pivot point at $1.07382. Resistance levels are identified at $1.07778, $1.08124, and $1.08533, indicating potential upward momentum. Conversely, immediate support is observed at $1.06951, with additional backing at $1.06512 and $1.06119, suggesting a relatively stable downside. Notably, the 50-day Simple Moving Average (SMA) rests near the pivot point at $1.07338, providing additional reinforcement, while the 200-day Moving Average (MA) hovers slightly higher at $1.07462, indicating continued bullish sentiment.

 

 

USDJPY


Predicted: Bullish Momentum for USDJPY


Fundamental Analysis:


Despite warnings from Japanese authorities about potential intervention to bolster the yen, the currency continued its decline. During discussions with Japanese Prime Minister Fumio Kishida, Bank of Japan Governor Kazuo Ueda emphasized the seriousness of the yen's depreciation. Ueda hinted at potential monetary policy measures if the currency's decline significantly impacts prices.

 

Technical Analysis:


Recent movements in the USD/JPY pair indicate an upward trend within a defined channel, observable on the 4-hour chart. There's a notable attempt to breach the resistance level within this upward channel. The 14-period RSI is approaching the overbought territory at 70%, suggesting sufficient bullish momentum for an attempt at breaking the resistance. However, failure to breach this level might lead to a retracement towards lower support levels.

 

 

 

USOIL


Forecast: Upward Trend


Fundamental Analysis:


Recent weekly data from the U.S. Energy Information Administration (EIA) indicates a notable decline in U.S. oil inventories, signaling a tightening of the market supply. This reduction, surpassing market expectations with a decrease of 1.36 million barrels last week, has spurred an uptick in oil prices. WTI crude oil has surged back above the $78 per barrel mark.


Technical Analysis:


In the short term, there's potential for a sustained upward momentum, particularly following the significant downturn witnessed last week, which necessitates technical adjustments. As such, for day traders, initiating long positions around the $79.5 level, with a target range of approximately $80, could be advantageous. Emphasizing buying on downward corrections while considering short positions on upward rebounds could be a prudent strategy. Key short-term resistance levels to monitor lie in the $79.6-$80 range, with short-term support levels hovering around $77-$76.5.

 

 

 

 

 

Disclaimer

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