

Market Analysis
EURUSD
Prediction: Potential Upside
Fundamental Analysis:
The EUR/USD pair is attempting to recover from recent declines, hovering around the 1.1090 mark in early Monday's Asian trading session. However, further upside may be capped due to recent eurozone inflation figures, which have strengthened the case for a possible rate cut by the European Central Bank (ECB) at its upcoming meeting on Thursday. With headline inflation nearing 2% and long-term projections remaining stable, the ECB is likely to consider additional monetary easing. Additionally, last week’s mixed GDP data has reinforced expectations of a dovish stance from the central bank.
On the U.S. side, economic indicators have created some ambiguity surrounding the likelihood of a significant rate cut by the Federal Reserve. The August Nonfarm Payrolls report showed an increase of 142,000, falling short of market forecasts, although the unemployment rate edged down to 4.2%. While the market still anticipates a 25 basis point cut, the odds of a more aggressive 50 basis point cut have slightly decreased to 29%. Comments from the Chicago Fed President have been seen as dovish, aligning with market expectations for some degree of policy easing.
Technical Analysis:
On the 4-hour chart, the Relative Strength Index (RSI) sits just below 70, indicating that EUR/USD may have further room to rise before hitting overbought conditions. The immediate resistance level is at 1.1160, followed by 1.1200, which marks the recent peak, and 1.1250, a notable level from July 2023.
On the downside, if EUR/USD dips below the 1.1100 support level—reinforced by the 100-period and 50-period Simple Moving Averages (SMAs) and the 23.6% Fibonacci retracement—it could flip this area into a resistance zone, triggering selling pressure. In such a scenario, the next significant supports lie at 1.1040 (the 38.2% Fibonacci retracement) and 1.1000, where the 200-period SMA and the 50% Fibonacci retracement converge.
XAUUSD
Forecast: Decline Expected
Fundamental Analysis:
Gold prices declined by over 0.80%, retreating to $2,493 after failing to reach the all-time high of $2,531, down from a recent high of $2,529. U.S. economic data has cast doubt on the likelihood of the Federal Reserve cutting interest rates by 50 or 25 basis points in September. While Nonfarm Payrolls for August missed expectations, they showed improvement compared to July, with a decrease in the unemployment rate and an increase in average hourly earnings. Market sentiment has shifted towards a 25 basis point rate cut, with odds at 73%, while the probability of a 50 basis point cut has dropped to 27%. Although some Fed officials have signaled support for easing, the dip in U.S. Treasury yields did not provide a boost for gold, and the U.S. Dollar Index slightly recovered to 101.22.
Technical Analysis:
Gold's long-term outlook remains positive, but short-term indicators suggest a potential downtrend. After hitting a peak above $2,520, XAU/USD reversed course and formed a "bearish engulfing" candlestick pattern, signaling possible further losses. Momentum appears to be shifting bearish, as the Relative Strength Index (RSI) nears a break below neutral. A drop below the August 22 low of $2,470 could lead to further declines, with support levels around $2,435 to $2,431. On the other hand, if prices manage to rise above $2,500, resistance can be expected at the year-to-date high of $2,531. Should this level be breached, targets would extend to $2,550 and possibly $2,600.
GBPUSD
Prediction: Uptrend Likely
Fundamental Analysis:
During the Asian session on Monday, the GBP/USD pair saw renewed buying interest, moving back towards the mid-1.3100s. Despite this, several factors may restrain further upward movement. Recent U.S. employment data has shown signs of a slowing labor market, which has heightened concerns about the U.S. economy. This has led to increased demand for the safe-haven U.S. Dollar, putting pressure on GBP/USD.
In the UK, a recent recruiter survey highlights a cooling labor market, marked by a significant drop in job placements and slower wage growth. This trend supports the possibility of future interest rate cuts by the Bank of England, which could dampen bullish sentiment for the British Pound. Market participants are awaiting upcoming UK jobs data, while fluctuations in the U.S. Dollar will also impact GBP/USD.
Technical Analysis:
The Relative Strength Index (RSI) on the 4-hour chart has dipped below 60, suggesting a loss of bullish momentum. Immediate support is located at 1.3130, aligning with the Fibonacci 23.6% retracement level from the recent uptrend. A break below this support could lead to a test of 1.3100, where the 100-period Simple Moving Average is situated, and further to 1.3040, corresponding to the 38.2% Fibonacci retracement.
On the upside, the initial resistance level is at 1.3200. Should GBP/USD surpass this level, the next resistance targets are 1.3260 (the recent high) and then 1.3300 (a significant static level).
USDJPY
Forecast: Bearish
Fundamental Analysis:
USD/JPY begins the week with a positive momentum, maintaining recovery gains just below the 143.00 level. This comes after a late rebound in the U.S. Dollar on Friday and a downward revision of Japan's Q2 GDP. Despite these factors, the pair’s potential gains may be capped by divergent expectations for the Bank of Japan and Federal Reserve’s policies. Market focus will shift to the upcoming U.S. CPI data due later this week.
On Friday, USD/JPY declined by 0.30% as the dollar weakened further following disappointing Nonfarm Payrolls data, which reported only 142,000 new jobs in August compared to the expected 160,000. Although the unemployment rate decreased to 4.2% and average hourly earnings rose by 3.8% year-on-year, surpassing predictions, concerns about a slowing economy have fueled speculation of a potential larger rate cut by the Fed in September.
Technical Analysis:
The bearish outlook for USD/JPY is supported by the Relative Strength Index (RSI) nearing the oversold threshold of 30, indicating potential downward momentum that may lead to a correction. Additionally, the Moving Average Convergence Divergence (MACD) displays increasing red bars, reflecting sustained bearish sentiment. The pair has faced four consecutive sessions of losses, though a potential upward correction could occur soon.
Disclaimer
Derivative investments involve significant risks and may result in the loss of the capital you invest. You are advised to carefully read and study the legality of the company, products, and trading rules before deciding to invest your money. Be responsible and accountable in your trading.
RISK WARNING IN TRADING
Transactions via margin involve products that use leverage mechanisms, carry high risks, and are certainly not suitable for all investors. THERE IS NO GUARANTEE OF PROFIT on your investment, so be wary of those who guarantee profits in trading. You are advised not to use funds if you are not prepared to incur losses. Before deciding to trade, ensure that you understand the risks involved and also consider your experience.