Market Analysis

XAUUSD

Prediction: Decrease

Fundamental Analysis:

Gold prices are currently holding above $2,350 in early Asian trading, despite a recent dip to two-week lows. This dip followed a stronger-than-expected Q2 2024 US GDP report, which cast doubt on the Federal Reserve's plans for rate cuts this year. The core PCE inflation rate fell to 2.9% from 3.7% in the previous quarter, and jobless claims also decreased.

Despite the strong GDP data, markets still anticipate a Fed rate cut in September due to ongoing disinflation. Although gold initially dropped on the GDP news, it rebounded on the softer core PCE reading. Additional factors influencing gold include concerns over China's economic slowdown and a weaker USD/JPY. Investors are now looking to the June core PCE data for more insight into gold's short-term prospects.

Technical Analysis:

Gold prices remain under pressure early Friday, with the 14-day Relative Strength Index (RSI) below 50, indicating bearish sentiment. Sellers are focusing on the key 50-day moving average at $2,360, which must be breached for a new downtrend towards the 100-day moving average at $2,324.

However, buyers might find support at the $2,350 psychological level. On the upside, immediate resistance levels are at the 21-day moving average at $2,387 and the $2,400 mark. Further recovery could aim for resistance zones at $2,412 and $2,425.

The market is currently experiencing a tug-of-war between bulls and bears, leaving the overall short-term outlook uncertain.

EURUSD

Prediction: Increase

Fundamental Analysis:

On Thursday, the EUR/USD pair moved within a well-established range as the market processed mixed US economic data. Anticipation for a Federal Reserve rate cut in September remains strong, though the uncertain data adds complexity to the outlook. The euro saw some recovery, supported by weak US and German bond yields. The US dollar lacked a clear direction, offsetting losses against the Japanese yen. The potential for policy divergence between the Fed and ECB, both expected to lower rates, could lead to near-term weakness in the EUR/USD. Additionally, investors are keeping an eye on the upcoming developments in the US political landscape.

Technical Analysis:

Key support for EUR/USD is found at the 200-day moving average of 1.0818, followed by the June low of 1.0666 and the May low of 1.0649. If the May low is breached, the pair could decline to the 2024 bottom of 1.0601.

On the upside, resistance levels are at the July high of 1.0948, the March peak of 1.0981, and the critical 1.1000 mark. The pair is expected to maintain a positive bias as long as it stays above the 200-day moving average.

In the short term, initial resistance is at the 55-SMA of 1.0886, with support at 1.0825, the 200-SMA at 1.0794, and 1.0709. The RSI has decreased to around 44.

USDJPY

Prediction: Decrease

Fundamental Analysis:

USD/JPY is rebounding towards 154.00 after dipping to near 153.40 following the release of Tokyo CPI data. The pair remains volatile due to the divergence in policies between the Bank of Japan (BoJ) and the Federal Reserve, causing market repositioning ahead of the upcoming US PCE inflation data. The Japanese Yen has been on an upward trend against the US Dollar for four consecutive sessions, approaching a 12-week high. This trend is likely driven by traders unwinding carry trades in anticipation of the BoJ's policy meeting, where a rate hike and tapering of bond purchases are expected. Meanwhile, the US Dollar could regain strength as recent US PMI data indicated robust private-sector activity, providing the Fed with more room to maintain its restrictive policy. Investors will be closely monitoring the forthcoming US GDP and PCE data.

Technical Analysis:

The USD/JPY pair is currently trading around 153.50. A breach below a descending channel on the daily chart indicates a strengthening dovish bias. The 14-day RSI is below 30, suggesting the pair is oversold and may experience a short-term rebound. Significant support can be found at May's low of 151.86, with additional support at the psychological level of 151.00. On the upside, the pair may test the lower boundary of the descending channel around 154.00. A return to the channel could weaken the bearish bias, leading to resistance at the 9-day EMA of 155.90 and the upper channel boundary at 156.80.

GBPUSD

Prediction: Decrease

Fundamental Analysis:

The GBP/USD pair continues to exhibit a bearish trend, trading below 1.2900 during the American session. The US Dollar is gaining strength due to a risk-averse market sentiment and stronger-than-expected US GDP data, pushing the pair lower. Investor concerns are rising over a bleak economic outlook, as the People's Bank of China unexpectedly eased its policy for the second time this week. This has caused a drop in the UK's FTSE 100 Index and losses in US stock futures. The upcoming US GDP and Initial Jobless Claims data will be key focuses. While a weaker-than-expected GDP report could limit the US Dollar's gains, the GBP/USD upside is likely to remain restricted if Wall Street's main indexes continue to fall.

Technical Analysis:

GBP/USD is currently holding just above 1.2850, where support is provided by the Fibonacci 38.2% retracement level and the 100-period SMA. If this support fails, the pair could target 1.2830 (Fibonacci 50% retracement) and the 1.2800-1.2790 area (psychological level, 200-period SMA). On the upside, 1.2900 (20-period SMA, psychological level, static level) serves as immediate resistance, followed by 1.2940-1.2950 (Fibonacci 23.6% retracement, 50-period SMA). The current price action indicates a consolidation phase, with the pair finding support at key technical levels while encountering resistance at the moving averages and Fibonacci retracement levels.

Disclaimer

Derivative investments involve significant risks and may result in the loss of the capital you invest. You are advised to carefully read and study the legality of the company, products, and trading rules before deciding to invest your money. Be responsible and accountable in your trading.

RISK WARNING IN TRADING

Transactions via margin involve products that use leverage mechanisms, carry high risks, and are certainly not suitable for all investors. THERE IS NO GUARANTEE OF PROFIT on your investment, so be wary of those who guarantee profits in trading. You are advised not to use funds if you are not prepared to incur losses. Before deciding to trade, ensure that you understand the risks involved and also consider your experience.