Market Analysis

XAUUSD

Prediction: Decrease

Fundamental Analysis:

Gold prices are climbing amid heightened investor demand for safe-haven assets due to the combined uncertainties of the U.S. presidential election and ongoing conflict in the Middle East. Spot gold has risen by nearly $20, reaching a new all-time high. Despite the strength of the U.S. dollar and higher Treasury yields, gold continues to rise as geopolitical tensions and the upcoming U.S. election create a risk-averse environment. Gold’s safe-haven appeal remains strong during times of uncertainty. On October 17, Israeli media reported the death of Hamas leader Yahya Sinwar, killed by Israeli forces. Following this, Prime Minister Netanyahu reaffirmed Israel’s commitment to ongoing military operations.

Technical Analysis:

Gold is currently on a strong upward trajectory. In the short term, price action could push spot gold towards the key psychological level of $2700 per ounce, supported by increasing momentum as indicated by the Relative Strength Index (RSI). The first resistance point is set at $2696 per ounce, the current year’s high. Should this level be breached, gold may move towards $2700, followed by $2750 and $2800. On the downside, a drop below the October 4 high of $2670 could lead to a fall towards $2650. A further decline might see support at $2600, with the 50-day Simple Moving Average (SMA) standing at $2561 per ounce. The overall trend remains bullish, and a close above $2685.50 would suggest further gains towards $2700 or $2720 in the coming sessions.

USDJPY

Prediction: Bullish Momentum Expected

Fundamental Analysis: 

The USD/JPY has surged to the significant psychological level of 150, renewing concerns about potential Japanese intervention. The pair briefly climbed by 0.3%, hitting 150.077, the highest level since August 1. After a two-week decline, the yen weakened further as traders adjusted their strategies to reflect the narrowing yield gap between Japan and the US. The outlook for the yen has shifted, particularly following comments from Japan's new Prime Minister, Shigeru Ishiba, who initially suggested that Japan was not ready for a rate hike but later confirmed his alignment with the Bank of Japan. Meanwhile, strong economic data from the US has fueled expectations that the Federal Reserve may delay any significant monetary easing, putting additional pressure on the yen. The currency's volatility has drawn attention from both businesses and households, requiring close government monitoring.

Technical Analysis: 

The USD/JPY is maintaining an upward trend and is approaching a key resistance level at the top of the Ichimoku Cloud. Technical indicators suggest that the pair remains in an uptrend, though it needs to break above this resistance to confirm further gains. The RSI has exceeded its previous three peaks, indicating growing buying momentum. Should the USD/JPY continue its rise, buyers will likely target the 100-day moving average (DMA) at 150.85. Beyond that, the next resistance levels are the Kumo top and 200-DMA at 151.32, followed by 152.00. On the downside, initial support lies at 150.00, with further support at 149.00, 148.84, and the 50-DMA at 145.50.

EURUSD

Forecast: Downward Momentum Continues

Fundamental Analysis: 

The EUR/USD remains under pressure following a 0.25% interest rate cut by the European Central Bank (ECB) last Thursday. The pair has declined by more than 3.5% since hitting a high of just over $1.1200 in late September. The ECB’s move was widely anticipated, with the Deposit Facility Rate lowered to 3.25% and the Main Refinancing Rate reduced to 3.4%. Weak inflation data has added to the Euro's challenges, as the final Harmonized Index of Consumer Prices (HICP) for September came in at 1.7% year-on-year, falling short of the 1.8% forecast.

Technical Analysis: 

EUR/USD has been subjected to sustained selling pressure, dropping below both the 50-day EMA at $1.0996 and the 200-day EMA at $1.0904, indicating a strong bearish trend. Currently trading around $1.0828, near multi-week lows, the pair risks further declines if it breaks the key support level at $1.0800, with the next target at $1.0750. The pronounced downward movement, coupled with the pair distancing itself from key moving averages, highlights the dominant bearish sentiment in the market.

BTCUSD

Prediction: Uptrend

Fundamental Analysis: 

Bitcoin recently surpassed $67,000, marking its highest market dominance level since 2021. Meanwhile, geopolitical tensions escalated as Israel announced the elimination of a Hamas leader and vowed to continue military actions. In the U.S., retail sales data outperformed expectations, reducing the likelihood of significant interest rate cuts. These positive macroeconomic factors have contributed to Bitcoin’s bullish momentum, propelling it to fresh all-time highs this week. After a volatile start to October, Bitcoin has been steadily climbing since October 3. Over the past two weeks, it has gained 16%, recording the highest opening price in the last 80 days. Bitcoin’s market dominance has surged to 58.85%, a level not seen since 2021, indicating that capital is shifting from altcoins into Bitcoin. Typically, rising Bitcoin dominance signals reduced interest in altcoins, which could negatively impact their prices.

Technical Analysis: 

Bitcoin is showing strong breakout potential above $70,000, supported by two critical technical indicators on the daily chart. Over the past week, its price has risen 16.18%, moving from $58,000 to around $67,400. This upward momentum has pushed Bitcoin above a key pivot level, with immediate resistance at $68,900. If this resistance is breached, Bitcoin could swiftly reach $70,000 or higher. However, traders should be cautious, as the stochastic RSI indicates an overbought condition with a reading above 98, suggesting potential short-term pullbacks or consolidation. As long as Bitcoin remains above the pivotal support at $60,784, the bullish outlook is intact, allowing for further upside. On the downside, key support at $64,000 should be monitored, as a break below this level could shift momentum in favor of the bears.

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