Market Analysis

EURUSD

 

Prediction: Decrease

 

Fundamental Analysis:

The EUR/USD pair rebounded to approximately 1.0740 in New York on Tuesday, buoyed by weaker-than-expected growth in US retail sales for May, which weighed on the US dollar. According to the US Census Bureau, retail sales increased by only 0.1%, missing the anticipated 0.2% growth. This data is seen as potentially pressuring the US dollar further, indicating a prolonged disinflationary trend. Consequently, the US dollar index slipped to around 105.30, with market sentiment now leaning towards expectations of two interest rate cuts by the Federal Reserve this year.

 

Technical Analysis:

EUR/USD is encountering resistance near 1.0740, where a descending trendline from a previous peak in December acts as a barrier. Potential support may emerge around 1.0670, close to an upward trendline and a key horizontal level. Long-term prospects have turned bearish as the price dipped below the 200-day moving average at 1.0800. The Relative Strength Index (RSI) has dropped below 40, suggesting possible bearish momentum if it holds at this level. This technical outlook indicates challenges for EUR/USD to break above immediate resistance, with potential support levels likely coming into play amid sustained downward pressure.

 

 

 

XAUUSD

 

Prediction: Likely Increase

 

Fundamental Analysis:

 

The price of gold (XAU/USD) has slightly decreased to approximately $2,310 amid prevailing positive market sentiment, which is dampening demand for safe-haven assets. Despite a recent survey indicating strong anticipated gold demand from central banks throughout 2024, the decline is influenced by optimistic market conditions. Stocks are achieving record highs, coupled with expectations of a potential US interest rate cut, which traditionally diminishes the appeal of non-yielding gold. Nevertheless, central banks continue to regard gold as a reliable long-term store of value and a hedge against inflation, suggesting robust future demand that may bolster gold prices.

 

Technical Analysis:

 

On the daily chart, the gold price is currently forming a bearish head-and-shoulders pattern. This pattern typically signals a reversal in trend, characterized by left and right "shoulders" with a central "head". The critical neckline support rests at $2,279. Additionally, the Relative Strength Index (RSI) indicates declining momentum, reinforcing the bearish outlook.

 

A confirmed break below the neckline would validate the head-and-shoulders pattern, potentially leading to further declines with targets at $2,171 and $2,106. Conversely, a rise above $2,345 would challenge the pattern's validity, potentially signaling a continuation of the upward trend, with an initial target at the previous peak of $2,450.

 

 

GBPUSD

 

Forecast: Increase

 

Fundamental Analysis:

 

Based on recent market movements, the British pound (GBP) has strengthened against a weakening US dollar (USD), driven by positive market sentiment that has put pressure on the USD. Investors are eagerly awaiting US retail sales data, expecting a slight increase, while also keeping an eye on indications of a potential Federal Reserve interest rate cut in September, which could further weaken the USD and support GBP/USD. Additionally, upcoming UK inflation figures will likely impact the exchange rate. Overall, market risk appetite and central bank policies are anticipated to be pivotal factors influencing GBP/USD in the near term.

 

Technical Analysis:

 

Technically, the GBP/USD pair has struggled to maintain a bullish trend, remaining below the lower boundary of an ascending regression channel. The Relative Strength Index (RSI) on the 4-hour chart is below 50, indicating a bearish sentiment. Key support levels are identified at 1.2640, 1.2600, and 1.2580, while resistance levels lie at 1.2700, 1.2720, and 1.2750. Despite a recent decline to 1.2656, GBP/USD has shown resilience but continues to trade below a previously broken support trendline, potentially signaling further downside. The RSI suggests ongoing selling pressure, with a break below 1.2700 possibly leading to declines towards 1.2656, 1.2643/34, and 1.2600. Conversely, a breach above 1.2720/30 could trigger an upward movement towards 1.2800.

 

 

 

AUDUSD

 

Prediction: Increase

 

Fundamental Analysis:

 

The AUD/USD pair has regained strength, surpassing 0.6600 due to improved risk sentiment, a weaker US Dollar, and a hawkish stance from the Reserve Bank of Australia (RBA). The US Dollar declined amid increased appetite for riskier assets, coupled with lower US yields. The RBA maintained rates at 4.35%, emphasizing concerns over persistent inflation and keeping the door open for future policy adjustments. While markets anticipate easing from the Federal Reserve by 2025, the RBA's cautious approach suggests potential for near-term hikes. Despite challenges from China's economic slowdown, the AUD/USD could see gains supported by contrasting monetary policies.

 

Technical Analysis:

 

On the 4-hour chart, the AUD/USD is currently encountering resistance from the 50, 100, and 200 Simple Moving Averages (SMAs), constraining further upward movement. However, a close above 0.6640 may trigger a breakout towards higher levels within the established range. The pair has been consolidating, signaling potential for a trend shift upon a decisive breakout. Given the previous bullish trend, an upside breakout is more probable. Targets include a conservative upside projection around 0.6770 and a downside target near 0.6521. Confirmation of a breakout would involve sustained price action beyond the range's boundaries, indicating potential volatility in the near term.

 

 

 

 

 

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