Market Analysis
XAUUSD
Prediction: Decrease
Fundamental Analysis:
On the daily chart, XAUUSD has seen a downward correction, dropping below 2,400 after reaching an all-time high of 2,483 USD. This decline is likely due to profit-taking by investors and a temporary strengthening of the US dollar against other currencies. Despite this, the potential for XAUUSD growth remains, as the US dollar is expected to face pressure from an anticipated interest rate reduction. Additionally, gold's role as a safe-haven asset means that escalating geopolitical tensions in the Middle East could positively influence gold prices.
Technical Analysis:
Currently, XAUUSD is trading just below the 2,400 level, with bulls attempting to drive the price higher after the recent correction. The overall trend remains upward. The key support area is now between 2,453-2,463 USD. In the short term, if bears break through this support, the downward correction could extend to potentially reach 2,300 USD. On the other hand, if bulls succeed in pushing the price above 2,400 USD, XAUUSD could rise to the 2,417 resistance level and beyond.
NIKKEI
Prediction: Decrease
Fundamental Analysis:
Japanese stocks have seen a significant decline, with the JP 225 index experiencing its largest drop since 1987. The market has been hit by extensive sell-offs due to the yen's sharp appreciation, which has adversely impacted exporters, and a Bank of Japan interest rate hike that has negatively affected the real estate sector. Both non-residents and residents have been reducing their investments concurrently. Non-residents are optimizing their portfolios by purchasing US national debt at current yields, while residents are offloading exporters' shares due to the yen's strengthening. Consequently, the JP 225 stock index has faced a substantial fall. As the primary factors driving the sell-offs persist, the downtrend is expected to continue in the medium term. The forecast for the JP 225 for next week remains negative.
Technical Analysis:
The JP 225 stock index plummeted by 12% before correcting by 10% from its lows during Tuesday’s trading session, indicating high market volatility. A consistent downtrend has formed in the JP 225 index. Following such a sharp decline, a sideways channel could now emerge, with the potential to break below its lower boundary.
Key levels to monitor in the JP 225 price forecast include:
Resistance level: 39,295.0 – if the price breaks above this level, it could rise to 41,580.0
Support level: 37,345.0 – the price has already breached this support level, opening the possibility for a drop to 28,510.0
USDJPY
Prediction: Decrease
Fundamental Analysis:
On Wednesday, the USD/JPY pair experienced a sharp upward movement as traders took profits following a significant decline over the past few days, driven by heightened risk aversion that increased demand for the safe-haven yen. The Japanese currency achieved an impressive 8.5% rally against the US dollar throughout July and early August, bolstered by recent interventions and a rate hike from the Bank of Japan (BOJ). Additionally, a strong shift towards safe assets propelled the yen to an eight-month high. Today’s comments from a BOJ official revealed an unexpected change in policy outlook, negatively impacting sentiment and adding pressure on the yen.
Technical Analysis:
The near-term outlook has positive signals, marked by a false breakout into the weekly cloud, a long-tailed weekly Doji, and the formation of a bear trap. However, daily indicators predominantly display a bearish configuration, with moving averages positioned above the price and momentum in negative territory, necessitating caution. A rise above the daily Tenkan-sen (148.45) is required to mitigate the current downside risk, while a break above the 149.36/150.00 pivots would signal a potential reversal.
AUDUSD
Prediction: Uptrend Expected
Fundamental Analysis:
On Thursday, the Australian Dollar (AUD) is showing a positive trend against the US Dollar (USD). This follows the Reserve Bank of Australia's (RBA) decision to keep the cash rate steady at 4.35% on Tuesday, reflecting a hawkish stance. RBA Governor Michele Bullock has also signaled that inflation remains elevated, suggesting that a rate cut is not imminent. However, recent inflation data for Australia’s second quarter has tempered expectations for further rate hikes, which may limit the Australian Dollar's gains. Market forecasts now indicate a potential RBA rate cut in November, a change from previous predictions of a cut in April next year.
Technical Analysis:
Currently trading around 0.6530, the AUD/USD pair is showing signs of consolidation above a descending channel, which suggests a reduction in the bearish trend. The 14-day Relative Strength Index (RSI) is climbing from the oversold 30 level, hinting at possible further gains. Key support is anticipated near the upper boundary of the descending channel at around 0.6470. A drop below this level could put downward pressure on the pair, potentially targeting the lower boundary of the channel at approximately 0.6420. On the resistance side, the nine-day Exponential Moving Average (EMA) at 0.6535 is the immediate hurdle, with additional resistance at 0.6575, where previous support has turned into resistance. A successful breach above this resistance could drive the AUD/USD pair towards a six-month peak of 0.6798.
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