Market Analysis

XAUUSD

Outlook: Bullish

Fundamental Analysis:

Gold prices surged by over 1% in the North American market on Monday, driven by a decline in U.S. government bond yields. The ongoing conflict in the Middle East, with no signs of a ceasefire, has also bolstered gold’s appeal as a safe-haven asset. Ahead of crucial U.S. inflation data expected this week, the 10-year Treasury yield fell by 4 basis points to 3.902% on Monday. Additionally, Western nations issued a joint warning to Iran and its allies, urging them to refrain from actions that could exacerbate tensions in the Middle East. The region's situation appears increasingly unstable. Gold, often viewed as a safe investment during times of geopolitical and economic uncertainty, tends to perform well in low-interest-rate environments.

Technical Analysis:

Gold's upward momentum continued on Monday, bringing prices closer to the record high of $2,483. Should U.S. inflation come in lower than anticipated, gold may test this peak. The bullish momentum is supported by the Relative Strength Index (RSI), which remains above the midpoint, indicating a potential for further price increases. The immediate resistance level for gold lies at the record high of $2,483, with the next target being the psychological barrier of $2,500. On the downside, if gold prices fall below $2,450, the subsequent support levels are at $2,400 and the 50-day Simple Moving Average (SMA) at $2,373.

USDJPY

Forecast: Potential Decline

Fundamental Analysis:

On Monday, USD/JPY saw an increase of 0.36%, reaching 147.15. Makoto Sakurai, a former board member of the Bank of Japan, indicated that the central bank is unlikely to raise interest rates again this year due to the ongoing market turbulence from the recent rate hike and the slim chances of a swift recovery in Japan's economy. His remarks suggest that the Bank of Japan may remain cautious about further rate hikes, which has contributed to the yen's weakness. However, with the upcoming U.S. elections and the possibility of Federal Reserve rate cuts, market volatility could increase as the year progresses, reducing the likelihood of a return to carry trading.

Technical Analysis:

Despite a recent uptick that pushed USD/JPY above $148.00, reaching a six-day high of $148.22, the pair appears to be trending downward. The Relative Strength Index (RSI) continues to indicate bearish momentum, favoring sellers. If the USD/JPY dips below the August 9 low of $146.27, further declines could follow, with the next support levels at the August 8 low of $145.44 and the August 7 low of $144.28. Conversely, if the pair gains strength, it could target the August 12 high of $148.00. A continued rise might push it toward $149.77, with the potential to challenge the 200-day moving average (DMA) at $151.46.

BTCUSD

Prediction: Decrease

Fundamental Analysis:

Bitcoin has recently bounced back to the $59,500 mark, despite escalating concerns over the possibility of Iran launching a significant attack on Israel this week. This geopolitical tension has driven more capital towards traditional safe-haven assets like the U.S. dollar and gold. On the regulatory front, California Congressman Ro Khanna has disclosed that the Biden administration may soon unveil a comprehensive cryptocurrency regulation roadmap, which could have a positive impact on the market. Additionally, Bitcoin holders are becoming more active, as evidenced by Marathon Digital Holdings (MARA), a prominent U.S. mining company and major Bitcoin holder, planning to issue $2.5 billion in convertible senior notes due in 2031. This initiative, targeted at qualified institutional buyers, aims to raise capital for corporate investments and the acquisition of additional Bitcoin.

Technical Analysis:

Bitcoin bears are exerting pressure to push prices lower, yet bulls are stepping in to buy on dips, striving to maintain the price above the psychological barrier of $60,000. The volatility of Bitcoin is causing anxiety among traders. Over the weekend, Bitcoin dipped below its moving average, indicating that bears are still in the fight. The $55,724 level is a critical support to monitor. A break below this level could signal persistent negative market sentiment, with traders selling on rallies, potentially paving the way for a decline to $49,000. Conversely, if bulls manage to drive the price above the moving average, it would suggest that buyers are accumulating on dips, potentially propelling Bitcoin towards the $70,000 mark.

US Oil

Prediction: Increase

Fundamental Analysis: 

On Monday, U.S. WTI crude oil futures experienced a significant surge in prices, driven by the potential for rising tensions in the Middle East. The price for WTI crude oil scheduled for September delivery increased by $3.22, or 4.19%, reaching $80.06 per barrel—the highest closing since July 19. Similarly, Brent crude oil for October delivery rose by $2.64, or 3.3%, closing at $82.30 per barrel, marking its highest level since July 25. The critical factors in the upcoming days will be whether the situation can avoid further escalation and how much geopolitical risk premiums will influence oil prices. A deterioration in the Middle East could significantly threaten global oil supply, with traders particularly concerned about potential damage to oil infrastructure, which could severely limit supply and push prices higher.

Technical Analysis: 

Reports from OPEC and the IEA could trigger a market shift, especially with potential price movements near the 200-day Simple Moving Average (SMA) around $77.69. On the upside, bullish momentum has recaptured the crucial level near $75.27, now serving as support, allowing a move towards the 200-day SMA at $77.69. Additionally, two other key moving averages are nearby: the 55-day SMA at $78.55 and the 100-day SMA at $79.84. The Relative Strength Index (RSI) on the daily chart has rebounded, indicating potential for further downward price movement. On the downside, the first critical support level to monitor is at $72.00.

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