Market Analysis

XAUUSD

Prediction: Upside Movement Expected

Fundamental Analysis: 

Gold prices continue to trend lower for the fourth consecutive day, hovering around $2,650 in early Asian trading on Monday. The recent strength of the US Dollar, buoyed by Friday's positive US Nonfarm Payrolls data, has exerted selling pressure on the precious metal. However, as investors reposition ahead of key upcoming data, the US Dollar has seen a slight pullback from its one-month high reached last Thursday, providing some support for gold. Additionally, ongoing geopolitical tensions in the Middle East contribute to gold's appeal as a safe-haven asset. These factors indicate that gold's bias remains upward, positioning it within reach of the recent all-time high.

Technical Analysis: 

Technically, the current range-bound movement in gold prices appears to be a bullish consolidation phase following the recent rally to record highs. Daily chart oscillators remain comfortably in positive territory, having eased from overbought conditions, which supports the bullish outlook. The immediate resistance is located around $2,672-$2,673, followed by the $2,685-$2,686 zone, near the all-time high. Should gold break above the $2,700 level, it could pave the way for further gains in the ongoing long-term uptrend.

EURUSD

Outlook: Potential Decline

Fundamental Analysis:

EUR/USD extended its losing streak for a fifth consecutive session on Thursday, slipping to its lowest point in three weeks, below the 1.1010 level. The pair is struggling to regain upward momentum early Friday, as traders remain cautious about betting against the US Dollar (USD) ahead of the crucial September labor market report. On Thursday, the US data revealed that the ISM Services PMI rose to 54.9 in September, up from 51.5 in August. This exceeded the market's forecast of 51.7, indicating stronger growth in the service sector, which bolstered the USD and prevented EUR/USD from recovering.

Technical Analysis:

On the technical front, the Relative Strength Index (RSI) on the 4-hour chart remains above 30, suggesting that EUR/USD still has room to fall before reaching oversold conditions. On the downside, 1.1000 serves as the next support, representing the 50% Fibonacci retracement of the latest uptrend. Further support can be found at 1.0940 (61.8% Fibonacci retracement) and 1.0900 (psychological level). In contrast, on the upside, initial resistance is located at 1.1040 (38.2% Fibonacci retracement), followed by 1.1100, where the 100-period and 200-period Simple Moving Averages (SMA) converge with the 23.6% Fibonacci retracement. The next key resistance lies at 1.1150 (static level).

USDJPY

Forecast: Potential Upside Ahead

Fundamental Analysis:

The Japanese Yen (JPY) has recently pulled back after gaining strength, influenced by remarks from Japan’s ministers. Prime Minister Shigeru Ishiba underscored that tackling deflation remains Japan's foremost economic objective, with sustainable economic growth as a foundation for fiscal stability. He also announced plans to develop an economic package aimed at mitigating the effects of rising costs on households. Moreover, Ishiba highlighted the need to fortify Japan’s partnerships with like-minded nations, while balancing diplomatic efforts with military strength in regional security policies.

Technical Analysis:

As of Friday, USD/JPY is trading around the 146.50 mark. On the daily chart, the pair appears poised to break above its ascending channel pattern, suggesting a continuation of the bullish momentum. The 14-day Relative Strength Index (RSI) remains above 50, supporting this upward bias. Resistance is seen near the upper boundary of the channel at 147.21, a level not reached since September 3. A successful breakout could pave the way for a test of the seven-week high at 149.40. On the downside, initial support lies at the nine-day Exponential Moving Average (EMA) around 144.97, followed by the lower channel boundary at 143.60. A break below this level may trigger a deeper pullback towards the 139.58 mark, the lowest level since June 2023.

BTCUSD

Prediction: Potential Increase

Fundamental Analysis: 

Bitcoin (BTC) experienced a drop of over 6% this week as tensions between Iran and Israel intensified, contributing to the broader sell-off. The decline was further exacerbated by decreasing institutional interest in Bitcoin ETFs, with outflows exceeding $280 million this week. Some analysts believe that if geopolitical conflicts worsen, Bitcoin could see further downward pressure, potentially dropping to $55,000. Despite this, technical indicators suggest that bulls are defending a key support level, which may limit further losses.

Technical Analysis: 

On the weekly chart, Bitcoin has faced resistance following three consecutive weeks of gains in September. The largest cryptocurrency by market cap has pulled back by more than 6% so far this week, testing a descending trendline that has been forming since late March. This trendline aligns with a crucial resistance zone around $65,800. If Bitcoin continues to weaken, it could revisit the next significant support near $55,400, which is close to its 50-week Exponential Moving Average (EMA) at $55,336.

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