

Market Analysis
XAUUSD
Prediction: Bullish
Fundamental Analysis:
Gold prices saw an uptick during Asian trading on Thursday, holding near all-time highs. This gain comes as the dollar's recent rebound has eased ahead of crucial inflation data expected to influence the outlook for interest rate adjustments. Safe haven demand has also supported gold prices, particularly in light of disappointing earnings from NVIDIA Corporation (NASDAQ: NVDA), which have unsettled global equity markets. The upcoming Personal Consumption Expenditures (PCE) price index data, which the Federal Reserve uses as its primary inflation measure, will be closely watched. This data is anticipated to impact expectations for potential interest rate cuts. Market speculation is divided between a 25 or 50 basis point cut in September, according to CME Fedwatch. The potential for lower interest rates has weakened the dollar and supported broader metal markets, although gold has shown the most significant gains.
Technical Analysis:
On the daily chart for the XAU/USD pair, bulls have regained momentum and are poised to test previous record highs. Technical indicators are trending upwards within positive ranges and are positioned below their weekly peaks, indicating potential for further gains. Gold is trading above all its moving averages, with the 20-day Simple Moving Average (SMA) gradually rising around $2,470. The 100 and 200 SMAs also maintain bullish trends but are situated well below the shorter-term average. The near-term risk appears tilted towards the upside, though momentum may be restrained. On the 4-hour chart, XAU/USD has rebounded above a flat 20 SMA, with the 100 and 200 SMAs continuing their upward trajectory below the current price level.
EURUSD
Forecast: Anticipated Increase
Fundamental Analysis:
Recent price action in the EUR/USD pair reflects a pullback accompanied by a broad rebound in US yields and German 10-year bund yields. This movement comes amid ongoing speculation about potential rate cuts by the Federal Reserve in the upcoming month. Investors are closely monitoring signals regarding the anticipated size of the Fed's likely interest rate reduction in September, following Fed Chair Jerome Powell's comments suggesting it might be time to adjust monetary policy. Powell indicated that, barring unexpected developments, the labor market is unlikely to exert significant upward pressure on inflation in the near term and emphasized that the Fed does not want to see further cooling in labor market conditions.
Technical Analysis:
On the technical front, the daily chart for XAU/USD reveals that bulls have regained control and are poised to test recent all-time highs. Technical indicators have turned positive and remain below their weekly peaks, indicating potential for further gains. Gold is trading above all its moving averages, with the bullish 20 Simple Moving Average (SMA) gradually rising around $2,470. The 100 and 200 SMAs maintain their bullish trajectories well below the shorter-term average. The near-term risk is skewed to the upside, though momentum appears constrained. On the 4-hour chart, XAU/USD has bounced back above a flat 20 SMA, while the 100 and 200 SMAs continue their upward trajectory below the current price level. Technical indicators are stable above their midlines but lack strong directional momentum.
USDJPY
Prediction: Decrease
Fundamental Analysis:
The Japanese Yen (JPY) has strengthened against the US Dollar (USD) following Thursday's data. Japan’s Gross Domestic Product (GDP) growth for the second quarter exceeded expectations, bolstering speculation of a possible interest rate hike by the Bank of Japan (BoJ) in the near term. Japanese Economy Minister Yoshitaka Shindo indicated that the economy is expected to recover gradually as wages and income levels improve. Shindo also mentioned that the government will work closely with the BoJ to implement flexible macroeconomic policies. Despite this, the USD/JPY pair has found support from a stronger US Dollar, driven by higher Treasury yields. However, potential gains for the USD may be limited by growing expectations of a 25 basis point rate cut by the US Federal Reserve (Fed) in September.
Technical Analysis:
The USD/JPY pair has shown signs of a pullback following a significant downtrend triggered by a softer US Consumer Price Index (CPI) print, which led to Japanese officials' intervention to support the yen. Currently, USD/JPY is trading lower as the market evaluates its next move. If the Fed adopts a more dovish stance while the BoJ proceeds with an additional rate hike in December, further weakness in the pair may be anticipated toward the end of the year. Key support levels are at the recent low of 141.70 and the previous swing low of 140.25 from December last year. Resistance is seen at the recent swing high of 149.40
SP500
Forecast: Decline Expected
Fundamental Analysis:
The S&P 500 experienced a significant pullback on Thursday, primarily due to Nvidia's negative impact on the tech sector. Despite this, stronger U.S. economic data alleviated some recession concerns, limiting further declines. As of 3:21 p.m. ET (1915 GMT), the Dow Jones Industrial Average had risen by 311 points (0.8%), the S&P 500 gained 0.1%, while the NASDAQ Composite fell by 0.1%. The U.S. GDP growth for Q2 surprised to the upside, expanding by 3% compared to the expected 2.8% and a notable increase from the 1.4% annualized growth in the previous quarter. Additionally, initial claims for unemployment benefits for the week ending August 24 were reported at 231,000, slightly below economists' forecast of 232,000.
Technical Analysis:
On the daily chart, the S&P 500 briefly dipped below the 5600 mark but managed to recover and close above it. This level remains crucial, serving as a key indicator of market sentiment. If the index maintains its position above this level, it could signal a bullish trend; conversely, falling below it may suggest a more bearish outlook.
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