Market Analysis

XAUUSD

Prediction: Bullish Trend Ahead

Fundamental Analysis: 

Gold continues to benefit from heightened geopolitical tensions in the Middle East and declining consumer confidence in the U.S. These factors have bolstered gold’s role as a safe-haven asset, driving prices up by nearly $30 to new record levels. On Tuesday, gold reached an all-time high in North American markets, propelled by weakening U.S. Treasury yields and a depreciating dollar. The ongoing conflict in the Middle East, with Israeli airstrikes targeting Hezbollah positions in southern Lebanon and escalating fears of a wider regional conflict, has further boosted demand for gold. In 2024, gold prices have surged by 28%, reflecting its growing appeal amidst uncertainty.

Technical Analysis: 

Gold's technical outlook remains bullish, with prices poised to reach new highs, though the recent surge appears somewhat overstretched. Traders are focusing on the $2,700 mark as the next major resistance level. Momentum continues to favor buyers, but caution is advised as the Relative Strength Index (RSI) signals overbought conditions, raising the possibility of a pullback. If upward momentum persists, gold could test $2,675, followed by $2,700, with further targets at $2,750 and $2,800. However, a dip below $2,650 could lead to a retest of the September 18 high at $2,600, with key support around the September 18 low of $2,546.

USDJPY

Prediction: Decrease

Fundamental Analysis:

On Tuesday, September 24, Kazuo Ueda, the Governor of the Bank of Japan, indicated that the central bank is in no rush to adjust interest rates and can afford to carefully monitor financial markets and global economic trends before making policy decisions. This approach suggests that a rate hike may not be imminent. Ueda emphasized the importance of reviewing October’s service price data, much of which will be available in November, to assess whether inflation is approaching the Bank of Japan's 2% target—a critical condition for any future rate increases. His remarks signal a shift in focus away from inflation risks toward concerns about the potential impact of global economic slowdowns and yen appreciation on Japan’s export-driven economy. While Japan is just beginning its rate hike cycle, other central banks are starting to ease their policies after tightening rates to counter inflation.

Technical Analysis:

The USD/JPY pair remains in a downward trend, having tested the $144.00 resistance level over the past few days without success. On Tuesday, selling pressure increased, as reflected by the Relative Strength Index (RSI) momentum shifting towards bearish sentiment. The pair's position below the 200-day moving average indicates further downside risk, with the next key support levels at $141.73 (the low from September 20) and $139.58 (the low from September 16). On the upside, a move past $143.44 could see USD/JPY retest the $144.00 mark, and further gains may occur if it exceeds the recent high of $144.68.

EURUSD

Prediction: Likely to Increase

Fundamental Analysis:

The German IFO Business Climate Index dropped unexpectedly to 85.4 in September, down from 86.6 in August. Both the assessment of the current economic situation and future expectations deteriorated, with the Current Situation Index falling to 84.4 and expectations matching forecasts at 86.3. This suggests growing concerns about the health of Germany's economy. On the other side of the Atlantic, the US Dollar weakened as the US CB Consumer Confidence fell sharply to 98.7, compared to a revised figure of 105.6 in August. The Present Situation Index also dropped significantly, while the Expectations Index slipped to 81.7. These disappointing data points have heightened speculation that the Federal Reserve might cut interest rates by 50 basis points in November. While this has boosted stock markets, it has put pressure on the USD, creating favorable conditions for a potential EUR/USD rally.

Technical Analysis:

The EUR/USD pair is attempting to extend its upward movement, although momentum remains cautious. The daily chart shows the pair trading above the 20-day Simple Moving Average (SMA), providing solid support around 1.1090. Both the 100-day SMA and the 200-day SMA are trending upward, with the 100 SMA slightly outpacing the 200 SMA, reinforcing the bullish outlook. Despite this, technical indicators are not showing strong momentum, as they remain below recent highs and hover near the middle of their ranges. Immediate support is located at 1.1120 and 1.1090, while the resistance levels to watch are at 1.1200 and 1.1250. A break above these resistance levels could signal a stronger continuation of the uptrend.

BTCUSD

Prediction: Increase

Fundamental Analysis:

Traders are attempting to drive the price above the current resistance level, targeting a two-month high exceeding $66,000. Achieving this goal requires an increase in spot trading volume or the opening of more futures contracts, as additional leveraged buyers are needed to overcome the substantial sell wall at $65,000. Furthermore, the Bank of New York Mellon is moving closer to providing custody services for Bitcoin and Ethereum to ETF clients, following a review that allows these assets to be treated as non-liabilities on their balance sheet. This service is expected to launch soon, potentially easing investor access to Bitcoin. Additionally, BlackRock has received approval for its Bitcoin ETF plan, with clearer regulations anticipated post-U.S. presidential election. These developments are enhancing institutional adoption and boosting investor confidence in Bitcoin's long-term prospects.

Technical Analysis:

Currently, Bitcoin is trading within a narrow consolidation range, with $63,875 identified as a crucial level for buyers. The 50-period EMA at $63,072 serves as a robust dynamic support, reinforcing the bullish trend. On the upside, immediate resistance is observed at $64,400. A breakthrough at this level could lead to subsequent resistance points at $65,300 and $66,060. Bitcoin's recent consistent climb above the upward trendline suggests that the market is gearing up for additional gains to surpass these resistance levels. On the downside, immediate support is located at $63,072, followed by $62,600 and $62,379. The RSI stands at 52, indicating neutral momentum with a slight bullish inclination. If it crosses above 60, it would signal a stronger upward momentum. As long as the price remains above the 50-period EMA at $63,072, the outlook remains bullish.

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