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Market Analysis

Spot Gold Dips Below $2,400 Amid Profit-Taking and Rising Treasury Yields
Dupoin · 150.4K Views

Market Analysis Dupoin

XAUUSD

Prediction: Increase

Fundamental Analysis:


In the New York trading session and early Thursday in Asia, spot gold experienced a significant drop, shedding nearly $40 and dipping below $2,400. On Wednesday, spot gold briefly surged above $2,430 due to a weaker dollar and market expectations of a Federal Reserve rate cut in September. However, these gains were quickly erased due to profit-taking and rising U.S. Treasury yields, resulting in a 0.51% decline, closing at $2,396.86. Subsequently, gold fell sharply below $2,400. The U.S. 10-year Treasury yield increased by two basis points to 4.274%, which typically pressures gold prices. Traders are now focusing on the U.S. Q2 GDP data due on Thursday and the PCE price index on Friday, which is the Federal Reserve's preferred inflation measure.

Technical Analysis:


The RSI remains bullish but is starting to flatten, indicating a lack of clear direction among buyers and sellers. If gold declines below the July 22 low of $2,384, a more substantial correction may occur. The next support level is the 50-day Simple Moving Average (SMA) at $2,359. Should sellers drive the price below the 100-day moving average at $2,315, gold could further drop to $2,300. For an upward movement, gold needs to break above Wednesday's high of $2,430. The subsequent resistance levels are $2,450, the all-time high of $2,483 per ounce, and ultimately targeting $2,500.

 

 

EURUSD

Prediction: Decrease

Fundamental Analysis:


EUR/USD has dropped to new lows near $1.0820, approaching the crucial 200-day Simple Moving Average (SMA). However, it has since rebounded to around $1.0850, aided by modest gains in German 10-year bund yields. The euro's weakness is also attributed to disappointing Manufacturing and Services PMI data from Germany and the eurozone in July, indicating ongoing struggles in business activity within the region.

 

Technical Analysis:

For EUR/USD, the next significant support level is the 200-day Simple Moving Average (SMA) at $1.0816, followed by the June low of $1.0666. If it breaches the May low of $1.0649, it could decline further to the 2024 low of $1.0601. On the upside, the initial resistance is the July high of $1.0948, followed by the March high of $1.0981, and the key $1.1000 level. Overall, the positive outlook persists as long as the pair remains above the 200-day SMA.

 

 

USDJPY

Prediction: Decrease

Fundamental Analysis:

During the early Asian session on Thursday, the USD/JPY pair is experiencing selling pressure around $153, its lowest point in three months. Anticipation of the Bank of Japan (BoJ) cutting interest rates next week is bolstering the Japanese Yen (JPY). The advanced US Gross Domestic Product (GDP) for the second quarter will be in focus on Thursday. Additionally, factors from the US, including a mixed S&P Purchasing Managers Index (PMI) for July and the Federal Reserve's (Fed) dovish stance, are likely to contribute to the selling pressure on the USD.


Technical Analysis:

The USD/JPY pair is showing bearish signs, indicating potential for lower prices. Sellers currently have the upper hand, as suggested by the Relative Strength Index (RSI), which might become oversold if the downward trend continues. The first support level is the May 3 low at $151.86. Should the pair fall below this level, the next target is the October 21, 2022, peak at $151.94, now acting as support. Conversely, for buyers to regain control, they need to drive the pair back up to $156.00.

 

 

BTCUSD

Prediction: Decrease

Fundamental Analysis:

The distribution of funds to the creditors of the former leading crypto exchange, Mt. Gox, has concluded. Despite initial concerns, this event has not heightened Bitcoin's volatility, indicating that recipients are not rushing to liquidate their holdings. Similarly, the launch of the Ether Spot ETF did not generate significant enthusiasm for Ether, reflecting a market in a cautious state. Positively, the Ether Spot ETF recorded a net inflow of $106.6 million on its first day, although Grayscale's newly converted Ether Trust Fund saw an outflow of $485 million.

Technical Analysis:

Bitcoin has been in a consolidation phase, reflecting uncertainty among buyers and sellers regarding its next movement. The extended range suggests that a strong catalyst is required for a breakout. Bitcoin is currently trading sideways between $56,552 and $73,777, indicating a strategy of buying at support levels and selling near resistance. The 20-day Simple Moving Average (SMA) at $61,887 is on an upward trend, and the Relative Strength Index (RSI) is positive, suggesting a short-term advantage for buyers. Buyers aim to push the price up to $73,777, but they may encounter significant resistance at $70,000 and $72,000. Conversely, if the support at $65,000 fails, Bitcoin could drop to the moving averages, a critical support level for buyers. A breach here could lead to a decline towards $60,000.

 

 

 

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