

Market Analysis
EURUSD
Prediction: Uptrend Anticipated
Fundamental Analysis:
The Euro has been gaining ground against the US Dollar for four consecutive days, reaching a yearly high of 1.1170. This momentum is largely attributed to the weakening US Dollar, as investors anticipate the Federal Reserve (Fed) may start reducing interest rates in September. The prospect of rate cuts from both the Fed and the European Central Bank (ECB) could provide further support for the Euro. However, in the longer term, the US economy is expected to outperform Europe's, which could cap the Euro's potential gains. Key events to watch this week include the release of flash PMIs, a speech by Fed Chair Jerome Powell at Jackson Hole, and testimony from Bank of Japan Governor Kazuo Ueda.
Technical Analysis:
The Euro (EUR) is expected to maintain its upward trajectory against the US Dollar (USD), with targets set at the 2024 high of 1.1173, the 1.1200 level, and possibly the 2023 peak of 1.1275. However, a drop below the critical 200-day moving average at 1.0845 could challenge the bullish outlook. Immediate support levels are found at 1.1005 (55-SMA), followed by 1.0949 and 1.0881. Technical indicators show a strong positive bias, with the Relative Strength Index (RSI) currently above 83.
XAUUSD
Forecast: Likely to Rise
Fundamental Analysis:
XAU/USD is maintaining its position above $2,500, hovering near record highs, despite a somewhat subdued market sentiment. Investors are closely watching the Federal Open Market Committee (FOMC) minutes for further insights, as these are expected to reinforce the likelihood of a rate cut by the Federal Reserve in September. The Fed's recent dovish tilt, with a greater emphasis on employment rather than inflation, has weakened the US Dollar, providing support for gold prices. Additionally, a downward revision in Nonfarm Payrolls revealed that the US economy added 818,000 fewer jobs than initially reported, bolstering the case for a rate cut.
Technical Analysis:
Gold prices continue to trade above all key moving averages, indicating a prevailing bullish trend. The 20-day Simple Moving Average (SMA) stands at $2,440, with the 100-day and 200-day SMAs also on an upward trajectory. Although technical indicators are not showing a strong directional bias, they remain above their midlines, suggesting that a significant downward correction is unlikely. However, if the FOMC minutes prompt a break below the $2,500 level, a more substantial short-term correction could ensue.
GBPUSD
Prediction: Potential Upside
Fundamental Analysis:
The GBP has been gaining strength against the USD, recently reaching a 13-month high above the 1.3100 mark. This upward movement has been influenced by a weakening US Dollar, which initially saw a boost from positive economic indicators, such as a drop in jobless claims and a rise in retail sales. However, the renewed risk appetite in the markets has led to a softer US Dollar, contributing to the GBP/USD pair's ascent. In the latter part of the day, the pair is likely to be swayed by broader risk sentiment, with the performance of US stock markets being a critical factor.
Technical Analysis:
The British Pound is expected to encounter resistance against the US Dollar at levels of 1.3120, 1.3220, and 1.3400, which correspond to Fibonacci retracement levels from the recent downtrend. On the downside, support is anticipated around 1.2850-1.2840, 1.2800, and 1.2760, with these levels also aligning with Fibonacci retracement points and key moving averages.
USDJPY
Forecast: Bearish Outlook Amid Mixed Economic Signals
Fundamental Analysis:
The Japanese Yen gained strength against the US Dollar on Thursday, largely due to Japan's stronger-than-expected GDP growth figures. This development has fueled speculation that the Bank of Japan may consider an interest rate hike. However, the USD/JPY pair has found some support from a robust US Dollar, buoyed by rising Treasury yields. Despite this, the upward momentum of the US Dollar could be constrained by the anticipated rate cut from the US Federal Reserve, expected in September. While a 25 basis point cut is the most likely scenario, there is still a possibility of a more aggressive 50 basis point cut, adding uncertainty to the market.
Technical Analysis:
The USD/JPY pair is currently trading around 145.60. Technical indicators point to a short-term bearish trend, as the price remains below the 9-day EMA, and the RSI hovers just above 30, suggesting room for further downside correction. Key support levels are identified at 141.69 (a seven-month low) and 140.25. On the upside, resistance levels are positioned at 147.53 (9-day EMA), 153.40 (50-day EMA), and 154.50. While the pair may trend lower in the short term, a break above these resistance levels could trigger upward movement.
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