Market Analysis

XAUUSD

Prediction: Uptrend Expected

Fundamental Analysis: 

Gold prices (XAU/USD) are regaining some traction on Thursday after rebounding from the weekly lows in the sub-$2,500 per ounce range. The prospect of US interest rate cuts could boost demand for gold, as lower interest rates decrease the opportunity cost of holding this non-yielding asset. Furthermore, ongoing political uncertainty in the US, escalating geopolitical tensions in the Middle East, and global economic concerns are all contributing to the upward pressure on gold.

Technical Analysis: 

Gold prices are currently trading in positive territory. Although the metal remains constrained by the upper boundary of a five-month-old ascending channel and the all-time high, the overall outlook remains bullish. The price is comfortably above the 100-day Exponential Moving Average (EMA) on the daily chart, signaling strong upward momentum. Additionally, the 14-day Relative Strength Index (RSI) is positioned above the midline, near 61.00, suggesting there is still room for further gains.

EURUSD

Outlook: Anticipated Increase

Fundamental Analysis:

EUR/USD has recently pared back some of its earlier gains, retreating after reaching new highs for the year. This pullback is occurring against a backdrop of broad-market optimism, driven by expectations that the Federal Reserve (Fed) may cut interest rates in September, which is sustaining a strong risk appetite across markets. With minimal significant economic data due mid-week, traders are keenly awaiting Thursday's US Gross Domestic Product (GDP) update. However, market reaction may be muted, as the anticipated Q2 annualized GDP growth of around 2.8% has likely already been factored into prices.

Technical Analysis:

The EUR/USD pair is set to mark its strongest monthly performance since November 2022, having surged over 3.1% in August alone. Despite an early-week pullback due to technical exhaustion, the pair has rallied for four consecutive trading weeks, trading well above the 200-day Exponential Moving Average (EMA) at 1.0832. While the bullish trend remains robust, the pair faces the risk of a bearish correction. A lack of upward momentum could potentially drive the price back down toward the 50-day EMA, which currently stands at 1.0925.

USDJPY

Prediction: Increase

Fundamental Analysis: 

The EUR/USD pair pulled back slightly on Wednesday after reaching new yearly highs. This dip follows broad market expectations that the Federal Reserve (Fed) will implement rate cuts in September, which has kept overall market sentiment bullish. Although the economic calendar is relatively quiet in the middle of the week, the upcoming US Gross Domestic Product (GDP) figures on Thursday will be closely monitored. However, significant market movement is unlikely, as expectations for Q2 annualized GDP growth have been largely priced in at around 2.8%.

Technical Analysis: 

The EUR/USD is on track to achieve its strongest monthly performance since November 2022, with gains exceeding 3.1% in August alone. Despite a slight technical pullback earlier this week, the pair has risen for four consecutive weeks, trading comfortably above the 200-day Exponential Moving Average (EMA) at 1.0832. While the current bullish momentum is strong, the pair remains vulnerable to a bearish correction. If the upward momentum falters, the price could potentially drop back to the 50-day EMA at 1.0925.

WTI

Prediction: Decrease

Fundamental Analysis: 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $75.15 on Thursday. The WTI price is declining as concerns about slower economic growth in China weigh on the market. The potential risks to oil supply from the Middle East and Libya may provide some support and limit further losses. The slowdown in China's economy and oil demand is raising concerns about the health of the world's largest oil importer, putting downward pressure on WTI prices. According to Amarpreet Singh, an analyst at Barclays, "Demand in China remains weak, and there are no credible signs of a rebound in the second half of the year."

Technical Analysis: 

The price of crude oil has found solid support at the $75.00 level, which could lead to a rebound and a potential test of the key resistance at $76.86. These levels are critical for determining the next trend. The price needs to break through one of these levels to clarify the next direction, so caution is advised in upcoming trades as these levels will indicate future targets.

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