Market Analysis

XAUUSD

Forecast: Bullish Outlook

Fundamental Analysis:

Global central banks are shifting their focus away from the U.S. dollar and increasing their gold reserves. This adjustment comes in response to escalating geopolitical tensions and economic uncertainties. This week’s key events, including the U.S. Consumer Price Index (CPI) and retail sales figures, are anticipated to influence gold prices significantly. Additionally, developments in the Middle East, particularly the ongoing conflict between Iran and Israel, are drawing investor attention. Traditionally, gold is sought after during periods of geopolitical unrest. However, recent market trends suggest that conventional market dynamics may be weakening, making gold investments potentially risky even if Middle Eastern tensions escalate further.

Technical Analysis:

The daily chart for gold reveals a rebound in the Relative Strength Index (RSI) from below 50 last Tuesday to nearly 60 later in the week, indicating some resistance from sellers. On the upside, the initial resistance for gold lies between $2470 and $2480, marking the midpoint of an upward trend channel that began in mid-February. A further resistance level is at $2500, a significant psychological barrier. If gold maintains above $2500 and establishes it as support, the next target could be the upper boundary of the trend channel, approximately $2580. On the downside, immediate support is between $2410 and $2400, corresponding to the 20-day moving average and a psychological level. Should prices drop below this range, additional support levels are at $2370 (50-day moving average) and $2350 (100-day moving average).

EURUSD

Forecast: Expected to Rise

Fundamental Analysis:

The EUR/USD has halted its four-day decline and is currently trading around 1.0920 during Monday’s Asian trading hours. Market participants are awaiting the Eurozone’s Q2 GDP data, scheduled for release on Wednesday. The Euro, known for its sensitivity to risk factors, could face headwinds due to escalating geopolitical tensions in the Middle East. Recent statements from Israel’s Defense Minister, Yoav Gallant, to U.S. Defense Secretary Lloyd Austin indicated that Iran might be preparing for a significant military action against Israel. This potential move is reportedly a response to the assassination of Hamas leader Ismail Haniyeh in Tehran at the end of July, as noted by Axios journalist Barak Ravid.

Technical Analysis:

On the 4-hour chart, the Relative Strength Index (RSI) is hovering around 50, indicating a lack of strong momentum in either direction. The first support level on the downside is at $1.0900, a key psychological level. Below that, support is found at $1.0870, where the 100-period and 50-period Simple Moving Averages (SMAs) intersect with the 20-day SMA, followed by $1.0840, marked by the 200-period SMA. Should the EUR/USD rise above $1.0940, technical traders might be drawn in, with $1.0960 potentially acting as short-term resistance before reaching the $1.1000 level, which serves as both a psychological and significant technical barrier.

USDJPY

Forecast: Potential Decline

Fundamental Analysis:

The recent decline in the USD/JPY exchange rate might signal the beginning of a larger downtrend in yen carry trades. Historical data suggests that in comparable scenarios, the USD/JPY rate has dropped between 30% and 40%. The market was caught off guard by last week's significant yen fluctuations, which have heightened concerns about future exchange rate movements. Given the current trend, a more substantial decline in USD/JPY could be on the horizon, suggesting a favorable outlook for buying yen. Historically, such declines have coincided with potential drops in U.S. stocks by up to 20%, with the Federal Reserve possibly cutting rates by 75 basis points in September. Additionally, the market might anticipate the Bank of Japan to lower rates rather than increase them.

Technical Analysis:

The USD/JPY pair has shown a continued downward trend. Recent attempts by buyers to push the price above the weekly high of $147.89 have failed, causing the pair to fall below $147.00. The bearish momentum persists, despite the Relative Strength Index (RSI) approaching oversold levels. Should USD/JPY fall below $146.00, sellers are likely to target the low from August 8 at $145.44, followed by the August 7 low at $144.28. A break below these levels could lead to further declines towards the August 6 low at $143.61 and the recent low of $141.69.

Conversely, if the pair rises above $147.00, the next resistance level would be the weekly high at $147.89, with the potential to challenge $148.00.

BTCUSD

Prediction: Bearish

Fundamental Analysis:

Over the past month, from July 11, 2024, approximately 99,308 BTC, valued at $5.96 billion, were withdrawn from exchanges. Centralized exchanges currently hold 2,679,880 BTC, amounting to about $161 billion based on Bitcoin’s price as of Sunday, August 11. This is the lowest reserve level observed since November 19, 2018, during the Bitcoin bear market. Presently, Bitcoin’s price has dropped below $59,000 to $58,653, reflecting a 24-hour decline of 3.18%. The market remains highly volatile, so it’s crucial to manage risks carefully.

Technical Analysis:

Bitcoin (BTCUSD) is facing significant downward pressure and is testing the $60,326.70 level. If the price remains below this threshold, further declines could target the $56,160.00 region in the near term. Conversely, if Bitcoin manages to stay above $60,326.70, the outlook might improve, with potential upward targets at $63,330.00 and $65,483.00. Traders should stay vigilant for potential price movements.

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