Market Analysis

EURUSD

Prediction: Bullish

Fundamental Analysis: 

The EUR/USD pair experienced a pullback on Thursday as the US dollar gained traction, driven by anticipation surrounding Fed Chair Powell's upcoming speech at Jackson Hole. The dollar rebounded from recent lows, supported by higher US yields and a decline in risk appetite following the FOMC minutes, which hinted at a possible rate cut in September. Additionally, mixed PMI data from the Eurozone and the ECB's report contributed to the EUR/USD pair's retreat. Despite potential policy adjustments from the Fed, the narrowing policy gap between the Fed and the ECB may support the EUR/USD pair. However, the anticipated strength of the US economy might cap any significant dollar weakness.

Technical Analysis: 

The EUR/USD pair is likely to test its 2024 high at 1.1174, with potential resistance levels at 1.1200 and the 2023 peak of 1.1275. On the downside, the pair could target the weekly low of 1.0881, the 200-day SMA at 1.0846, and further support at the weekly low of 1.0777. Additional support levels include the June low of 1.0666 and the May low of 1.0649.

The overall uptrend should persist as long as the pair stays above the key 200-day SMA. The four-hour chart indicates a slight slowdown in the upward momentum, with initial resistance at 1.1174 and 1.1275. Support levels to watch are the 55-SMA at 1.1028, 1.0949, and 1.0881. The RSI has retreated to around 56, suggesting a possible consolidation phase.

XAUUSD

Prediction: Bullish Outlook

Fundamental Analysis: 

Gold prices rose during the Asian session, extending the rebound from the previous week’s low, as the US dollar remained weak. The precious metal found support from ongoing concerns about a potential US recession and geopolitical uncertainties. However, gains were capped as market participants awaited comments from Fed Chair Powell.

Gold experienced renewed selling pressure, dipping back below $2,500 per ounce. This decline coincided with a rebound in the US dollar index, which had previously fallen below the significant 101.00 level. Additionally, rising US yields, in response to dovish FOMC minutes, put further pressure on gold prices.

The FOMC minutes hinted at a possible rate cut in September, but Powell's upcoming speech may provide clarity on its potential scale. A substantial 50 basis point cut could weaken the US dollar and allow gold to challenge recent highs. Despite this, the US dollar's performance will remain a key factor, potentially limiting substantial declines in gold prices.

Technical Analysis: 

On the daily chart, gold is trading above its moving averages, with the bullish 55-day Simple Moving Average situated around $2,390. Although technical indicators like the RSI and Momentum have retreated from recent peaks, the Average Directional Index suggests a stable trend.

In the short term, the 4-hour chart indicates a corrective decline in progress. Gold is encountering support at the 100-SMA around $2,452, followed by $2,432, where the 200-SMA is positioned at $2,428. A sustained drop below this support zone could lead to a deeper retracement towards $2,379 and potentially $2,364.

Overall, while the longer-term trend for gold remains bullish, the current corrective phase may persist in the near term. Monitoring the $2,432-$2,428 support area will be crucial in determining the next movement of gold prices.

GBPUSD

Forecast: Potential Upside

Fundamental Analysis: 

The British pound hit a 13-month peak at 1.3130 on Thursday but retreated to approximately 1.3090 due to softened market sentiment. Despite this pullback, GBP/USD has continued its upward trend, trading near 1.2900 on Friday. Recent strong US economic data, including a drop in jobless claims and robust retail sales, provided support for the US dollar, causing GBP/USD to fall towards 1.2800. Nevertheless, the pair recovered as risk appetite returned. While upcoming US data might be overshadowed by broader market sentiment, a positive start on Wall Street could put pressure on the US dollar, potentially allowing GBP/USD to advance further.

Technical Analysis: 

The GBP/USD is currently encountering immediate resistance at 1.2900, which aligns with the Fibonacci 61.8% retracement of the recent downtrend. Additional resistance levels are found at 1.2950 (Fibonacci 78.6% retracement) and the psychological barrier of 1.3000. On the downside, the primary support is located at 1.2850-1.2840, which coincides with the Fibonacci 50% retracement and the 200-period Simple Moving Average. If this level is breached, further support may be found at 1.2800, where the 100-period SMA and the Fibonacci 38.2% retracement converge, followed by 1.2760 at the Fibonacci 23.6% retracement. These technical levels indicate a likely consolidation range for GBP/USD in the near term, with bullish prospects aimed at surpassing 1.3130, while bearish pressure might target the 1.2800 support zone.

USDJPY

Prediction: Decline Expected

Fundamental Analysis: 

The Japanese Yen (JPY) has strengthened significantly against the US Dollar (USD) during Friday's Asian session, with the USD/JPY pair facing substantial selling pressure and approaching the 145.00 level. This appreciation of the JPY is attributed to recent domestic inflation data and Bank of Japan (BoJ) Governor Ueda's indication of a potential interest rate hike. Japan's second-quarter GDP growth also exceeded expectations, reinforcing the possibility of a near-term rate increase by the BoJ. The Japanese government anticipates a gradual economic recovery, supported by rising wages and income, and will work closely with the BoJ to implement adaptive macroeconomic policies.

Conversely, the USD/JPY pair received some support from the stronger US Dollar, driven by higher Treasury yields. However, the potential for further gains in the Greenback may be limited by growing expectations of at least a 25 basis point rate cut by the US Federal Reserve in September, following the moderate US Consumer Price Index data.

Technical Analysis: 

The USD/JPY pair remains confined within a trading range, struggling to surpass the previous high of 146.90. While sellers currently dominate, buyers are beginning to gain momentum. For the bulls to regain control, the pair must break above the Tenkan-Sen level at 146.92, which could pave the way for resistance at 147.00 and the cycle high of 149.39. Conversely, a decline below 144.45 may indicate a continuation of the downtrend, potentially leading to a test of the 141.69 swing low.

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