Market Analysis
XAUUSD
Prediction: Increase
Fundamental Analysis:
Spot Gold maintains a bullish outlook as the week begins, building on Friday’s momentum and inching closer to the record high of $2,531.60 reached last week. The US Dollar is showing mixed performance across the FX market but remains generally weak following remarks by Federal Reserve (Fed) Chairman Jerome Powell at the Jackson Hole Symposium. Powell indicated that monetary policy adjustments are on the horizon, contingent on forthcoming economic data. Market participants are increasingly confident that the Fed will implement a rate cut during the upcoming September meeting.
Technical Analysis:
The daily chart for XAU/USD indicates that Gold is trading near Friday’s peak, with the potential to push higher. Although technical indicators have slightly diminished in upward momentum, they remain comfortably above their midlines, signaling continued bullish sentiment. Gold is also trading above all its moving averages, with the 20 Simple Moving Average (SMA) maintaining a strong upward trajectory around $2,458.75.
EURUSD
Forecast: Potential Decline
Fundamental Analysis:
After several weeks of upward momentum, EUR/USD encountered some selling pressure, pulling back slightly after reaching fresh highs just above 1.1200 earlier this week. This correction came amid a modest resurgence in demand for the US Dollar (USD). The USD rebounded from its recent 2024 lows around 100.50 (as of August 26), reflected in the US Dollar Index (DXY). The Greenback’s recovery was supported by a dip in risk appetite, following Friday’s strong performance driven by Chair Jerome Powell’s dovish comments at the Jackson Hole Symposium.
Technical Analysis:
On the upside, EUR/USD may challenge its 2024 peak of 1.1201 (recorded on August 26), followed by the 2023 high of 1.1275 (reached on July 18). On the downside, the pair's next target is the weekly low of 1.0881 (seen on August 8), followed by the critical 200-day SMA at 1.0848 and another weekly low of 1.0777 (from August 1). The broader uptrend remains intact as long as the pair stays above the 200-day SMA. However, the four-hour chart indicates a slight weakening in the bullish momentum. Initial resistance is at 1.1201, with further resistance at 1.1275. Support levels include 1.1098, followed by the 55-SMA at 1.1078, and then 1.0949. The relative strength index (RSI) has declined to around 62, signaling reduced bullish momentum.
AUDUSD
Prediction: Increase
Fundamental Analysis:
The Australian Dollar (AUD) is currently trading sideways against the US Dollar (USD) on Tuesday, maintaining a position just below the seven-month high of 0.6798, which was reached on Monday. The downside for the AUD/USD pair is expected to be limited, as traders anticipate diverging policy outlooks between the Reserve Bank of Australia (RBA) and the Federal Reserve. The latest RBA Minutes indicate that board members do not foresee a rate cut in the near future. Furthermore, RBA Governor Michele Bullock has stated that the Australian central bank remains prepared to raise rates again if necessary to combat inflation.
Technical Analysis:
On Friday, the AUD is trading near 0.6770 against the USD. The daily chart reveals that the AUD/USD pair has recently broken below an ascending channel, indicating a potential weakening of the bullish trend. Despite this, the 14-day Relative Strength Index (RSI) remains below the 70 threshold, supporting the continuation of the bullish momentum. The pair is currently testing immediate resistance at the seven-month high of 0.6798, with the next key resistance level at 0.6800, the lower boundary of the ascending channel. A successful break above this level could see the pair targeting the upper boundary of the ascending channel around 0.6940.
WTI
Prediction: Increase
Fundamental Analysis:
West Texas Intermediate (WTI), the benchmark for US crude oil, is currently trading around $76.15 on Monday. The price has edged higher due to growing expectations that the Federal Reserve (Fed) will cut interest rates in its upcoming September meeting. WTI has gained momentum following dovish remarks from Fed Chair Jerome Powell, who signaled that the US central bank might be ready to lower interest rates. Powell's comments at the Jackson Hole symposium on Friday suggested that the Fed is considering reducing the federal funds rate target at its September 17-18 meeting. A cut in interest rates typically supports WTI prices by lowering borrowing costs, which can stimulate economic activity and increase oil demand.
Technical Analysis:
WTI crude oil has seen a strong upward rally, surpassing the $76.86 level and reaching our anticipated extended target of $78.35. However, the price is encountering solid resistance at this level, which may lead to a potential pullback in the near term, targeting a test of the $76.86 level before resuming its upward movement. These levels are crucial as they determine the next trend direction, and the price needs to break through one of them to clearly establish its next move.
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