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Market Analysis

EUR/USD Gains as US Dollar Demand Eases, But Faces Resistance Below 1.1200
Dupoin · 235.6K Views

Market Analysis Dupoin

XAUUSD

Prediction: Increase

Fundamental Analysis:

Gold (XAU/USD) has gained momentum, rising above $2,500 per troy ounce on Wednesday, driven by intensifying geopolitical tensions in the Middle East. Furthermore, remarks from US Federal Reserve (Fed) Chair Jerome Powell during the Jackson Hole symposium last week, indicating that the time may be ripe for reducing interest rates, have provided additional support for the precious metal. Lower interest rates decrease the opportunity cost of holding gold, a non-yielding asset, thus bolstering its appeal.

Technical Analysis:

Gold prices are trending higher today, although they remain below the upper boundary of a five-month-old ascending channel and near the record high. The broader bullish outlook for gold remains intact as it continues to trade above the crucial 100-day Exponential Moving Average (EMA) on the daily chart. The upward momentum is reinforced by the 14-day Relative Strength Index (RSI), which is positioned above the midline at around 64.70, indicating sustained bullish pressure in the near term. The key resistance for XAU/USD is seen at $2,530, where the all-time high coincides with the upper boundary of the trend channel. A decisive breakout above this level could pave the way toward the $2,600 psychological barrier.

EURUSD

Prediction: Upward Momentum Expected

Fundamental Analysis: 

The EUR/USD pair edged higher on Tuesday, supported by a continued easing in the broader market's demand for the US Dollar. After a modest retreat at the start of the trading week, renewed risk-on sentiment drove the Euro back to its recent highs. However, the pair remains constrained below the 1.1200 level, with Euro bulls struggling to push the pair decisively higher. During his appearance at the Jackson Hole Economic Symposium last Friday, Fed Chair Jerome Powell strongly hinted that the Federal Reserve is likely to begin a rate-cutting cycle on September 18, which has fueled further market enthusiasm.

Technical Analysis: 

EUR/USD is on track for its strongest monthly performance since November 2022, having risen over 3.1% in August alone. Although the pair experienced some technical exhaustion at the start of this week, it has recorded gains for four consecutive weeks and is trading well above the 200-day Exponential Moving Average (EMA) at 1.0832. However, despite this strong upward trend, the pair is vulnerable to a bearish correction. A lack of upward momentum could lead to a retracement towards the 50-day EMA at 1.0925.

USDJPY

Prediction: Increase

Fundamental Analysis:

The Japanese yen recently strengthened, appreciating by up to 0.7% against the US dollar. This gain followed remarks from Bank of Japan (BoJ) Governor Kazuo Ueda, hinting at potential interest rate hikes. The yen's rally was also supported by a recovery in Asian markets, particularly with Chinese stocks showing improved performance. Meanwhile, with the release of the FOMC minutes from July indicating a consensus among the committee members for a rate cut in September, today's update may not offer significant new insights. In this context, it's possible for the dollar to experience some relief and gain traction as we approach the weekend.

Technical Analysis:

Following a significant downtrend, USD/JPY has made an attempt at a pullback, which was triggered by a softer US CPI report and subsequent intervention by Japanese authorities to bolster the yen. Currently, the pair is trading lower as markets evaluate the next direction. If the Federal Reserve adopts a dovish stance while the BoJ moves forward with an additional rate hike in December, the pair could face further downside pressure towards the year's end. Key support levels are identified at the recent low of 141.70, followed by 140.25, a previous swing low from December. On the upside, resistance is seen at the recent high of 149.40.

BTCUSD

Prediction: Decrease

Fundamental Analysis: 

Recently, price breakouts in the crypto market, particularly for Bitcoin, have been short-lived. A notable example was Bitcoin’s brief rally to $65,000 on August 24. According to Glassnode data, traders are becoming more cautious, avoiding leverage in pursuit of larger gains. The August 27 edition of "The Week Onchain" newsletter highlighted that this cautious behavior reflects a reduced appetite for speculation, as evidenced by the neutral funding rates across many tokens. This suggests that spot markets may dominate in the near term.

Technical Analysis: 

Bitcoin is currently trending downward within a falling channel in the short term, indicating that investors are selling at progressively lower prices, signaling a negative outlook. The currency is trading within a rectangle formation, with support at 52,811 and resistance at 68,440. A decisive breakout from this range will determine the next direction. Currently, Bitcoin is situated between support at 61,400 and resistance at 64,000. A clear breach of either level will indicate the future direction. Volume patterns do not align well with price peaks and troughs, reinforcing the current trend. However, the RSI curve shows an upward trend, hinting at a potential upward reversal. Despite this, the overall technical outlook for Bitcoin remains negative in the short term.

 

 

 

 

 

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