Daily Market Analysis By zForex

[zForex]

US Treasury Secretary Janet Yellen is increasingly confident that the US can tame inflation without harming the labor market, citing the stabilization of inflation indicators and the absence of widespread layoffs.
Positive US economic data supports the idea of persistently higher interest rates. Markets currently anticipate a 93% likelihood of no rate change in September and a 43.5% chance of a rate hike in November, according to the CME FedWatch Tool. This could strengthen the US Dollar (USD) and constrain EUR/USD gains.
Fed Governor Christopher Waller suggests that there is room to raise interest rates but emphasizes that data will guide decisions. Fed Boston President Susan Collins highlights the risks of an overly restrictive monetary policy, advocating for a cautious yet deliberate approach. Chicago Fed President Austan Goolsbee outlines the central bank's aim to manage inflation without triggering a recession.
Regarding the euro, analysts anticipate the European Central Bank (ECB) will maintain interest rates at its upcoming policy meeting. Recent data reveals stable German Harmonized Consumer Price Index (HICP) figures and modest Eurozone GDP growth in Q2.
This week, the focus shifts to the US Consumer Price Index (CPI) for August and the ECB's policy decision, both influencing the EUR/USD pair's direction.
EURUSD corrected after touching the support level around 1.0680. The level of 1.0750 is now acting as resistance, hindering further advancement towards 1.0780, followed by 1.0850. However, the long, strong bearish trend remains intact.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0700	1.0650	1.0600

GBPUSD

The Pound Sterling (GBP) has made a strong recovery, with bearish market sentiment easing, although there is still a lingering sense of vulnerability. The GBP/USD pair has swiftly bounced back in anticipation of the United Kingdom's July Employment report, which will provide insights into the current labor market conditions. Investors will closely monitor wage growth momentum, as it continues to be a significant factor contributing to stubborn inflationary pressure.
The release of the UK's labor data will also assess the effectiveness of the Bank of England's (BoE) monetary policy tools in a high-inflation environment. Additionally, investors will be keenly interested in comments from BoE policymakers to gauge how close current interest rates are to their peak. Sluggish wage growth and limited recruitment levels are expected to alleviate some of the pressure on BoE policymakers.
GBP/USD is persisting in its bearish trend, heading towards the 1.2400 support level, where the 200-day moving average (200MA) and the descending channel's lower boundary are converging, creating a point of confluence. A temporary correction is happening but the big picture is still bearish for the pair.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3150	1.3000	1.2825	1.2450	1.2400	1.2300

JPYUSD

Comments made by Bank of Japan (BOJ) Governor Kazuo Ueda suggesting that the BOJ might gather sufficient data by the end of the year to determine the possibility of ending negative interest rates have strengthened the yen. Given that the currency is currently nearing a historic low on a trade-weighted basis, there is certainly room for further appreciation.
However, it's important to recognize that the yen's weakness stems not only from extremely low-interest rates but also from yield curve control measures and the substantial bond purchases necessary to maintain that control, which have exerted downward pressure on the yen.
While higher interest rates could support the yen, it's likely that interest rates in Japan will remain significantly lower than those in other major economies. To merely match Taiwan's interest rates, for instance, Japanese rates would need to increase by approximately 2%, and it's highly improbable that Japanese interest rates will rise to a level that alters the yen's status as the preferred funding currency.
If interest rates alone were to change, it might not be long before the yen resumes its long-term decline. Conversely, discontinuing bond purchases could trigger substantial shifts in portfolios, particularly in Japan, where investors wield considerable influence in global markets. Such changes could potentially establish a long-term low in the yen's value.
USDJPY coming back toward the 146.00 support level whereas the down parallel of the bullish trend helps support the price. The bullish long trend is still strong and the next level at 150 is the next target.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

XAUUSD

The price of gold is currently trading at approximately $1,930 per troy ounce, showing a rebound from the losses seen in the previous week. This recovery is attributed to a weakening US Dollar (USD), which reduces the likelihood of the US Federal Reserve (Fed) maintaining unchanged interest rates in the upcoming September meeting.
However, 10-year US Treasury bond yields have risen to 4.30%, an increase of 0.84% at the time of writing. Despite this, the US Dollar Index (DXY) is losing ground during the Asian session on Monday. The spot price for gold is around 104.60.
The Greenback is expected to remain resilient due to consistent positive economic data from the United States (US). Investors will closely watch the release of the August Consumer Price Index (CPI) data from the US on Wednesday, which could offer insights into the country's inflation situation.
Investors are also anticipating a 25 basis point (bps) interest rate hike by the Fed in either November or December, with expectations of sustained elevated interest rates. This hawkish stance could further support gold.
US Treasury Secretary Janet Yellen expressed confidence in the US's ability to control inflation without harming employment, while Chicago Fed Bank President Austan Goolsbee discussed the Fed's goal of achieving stable economic growth with decreasing inflation.
Additionally, gold may have been impacted by China's weaker-than-expected August Consumer Price Index (CPI) and the ongoing challenges faced by Chinese authorities in achieving their 5% GDP growth target for the year.
Gold found support at the 100MA on the 4-hour chart as the Dollar retraced back yesterday, but the general view is still bearish for gold. The next support level is at 1910, and a breakout of this support level will take the price toward 1900, followed by 1885.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1920	1942	1931	1910	1900	1885

DAX40

European stocks reached a one-week high on Monday, driven by data suggesting a stabilization in the Chinese economy. Traders are preparing for a busy week, focusing on the crucial US inflation report and the European Central Bank (ECB) policy meeting.
Italian stocks (FTSEMIB) led the gains among European markets, climbing 0.8%, while the UK's FTSE 100 rose 0.4%.
In the sector-specific focus, the mining index (.SXPP) surged by 2.4% as metal prices increased on the expectation of improved demand from China, a major consumer.
Positive inflation data and additional stimulus measures from Beijing contributed to the perception that China, the world's second-largest economy, was stabilizing.
Investors are eagerly anticipating Wednesday's US inflation data, which will influence global interest rates. Additionally, market participants foresee a 60% chance that the ECB will maintain its interest rates on Thursday, according to LSEG data.
Deutsche Bank strategists noted, "Our economists have nervously maintained their 3.75% terminal deposit rate forecast for many months, and therefore, they believe the ECB will stay on hold." However, they added that even if there's no hike this week, it shouldn't be interpreted as a signal of confidence that this is the last hike. European inflation remains uncertain, and GDP growth has been stagnant since last autumn.
Investors will closely follow commentary from ECB officials throughout the week to solidify their expectations regarding the central bank's interest rate path.
Regarding individual stocks, Covestro (1COV) rose 3.2% after the German chemicals firm engaged in discussions with suitor Abu Dhabi National Oil Company (ADNOC) regarding a takeover approach.

Vistry Group (VTY) was the top gainer among individual stocks, surging by 13.3%, following its announcement of merging its affordable-housing business 'Partnerships' with its Housebuilding operations.
Conversely, Alfa Laval (ALFA) declined by 2.6% after Citi downgraded the Swedish engineering group's rating to "Neutral" from "Buy," citing an expected slowdown in order growth affecting earnings.
Lastly, ratings agency Fitch will review Germany's long-term credit rating on Friday. Currently, Germany holds an 'AAA' rating with a stable outlook, making it Europe's largest economy.
DAX received support and experienced a rebound at the 15,500 level. The current price range encompasses support at 15,500 and resistance at 16,400. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

Asia's Stock Fluctuations, European Optimism, and Key Economic Events Ahead

Stocks in Asia fluctuated and Chinese shares were back in the red. Gains triggered by news on Country Garden Holdings Co. — which secured payment extension approval from its bondholders — were not enough to keep the positive sentiment going for long.
European stock markets are poised to open higher on Tuesday, extending the positive momentum from the previous session. This comes as we enter a busy week for economic data.
Taiwan Semiconductor Manufacturing Corp saw a 1.6% increase in its shares following a deal between Apple and Qualcomm. Qualcomm will supply 5G chips to Apple until at least 2026.
TSMC is a manufacturer of both Qualcomm's chips and Apple's chips, which power its devices.
Bank of Japan boss Kazuo Ueda's weekend comments that the end of stimulus is possible during 2023 is still reverberating in the local bond market, with the benchmark 10-year yield pushing to a new near-decade peak.
In the May to June period, the UK unemployment rate rose by 0.5 percentage points to 4.3%, in line with expectations.
The annual growth in employees' average total pay, including bonuses, reached 8.5%, influenced by one-off payments in June and July 2023 from the NHS and Civil Service.
Notably, annual growth in pay, excluding bonuses, remained stable at 7.8%, marking a record high. Overnight, BOE uber-hawk Catherine Mann warned it's too soon to stop raising rates.
Germany’s economic recovery is in the spotlight as well with the release of the ZEW survey, with sentiment likely weighed down by tighter monetary conditions.
The focus shifts to US inflation data, with the consumer price index figures scheduled for Wednesday and the producer price index for Thursday.
Additionally, China will release a plethora of data on Friday, encompassing house prices, industrial production, retail sales, and unemployment.

EURUSD

US Treasury Yields Surge as Fed Tightening Looms
The potential for the Federal Reserve (Fed) to tighten policies further is supporting higher US Treasury bond yields. This, combined with a cautious market sentiment, is boosting demand for the safe-haven USD.
The US central bank is expected to pause its rate-hike cycle during the upcoming monetary policy meeting on September 19-20. However, there is still the possibility of additional rate hikes later this year due to a resilient US economy and slow inflation reduction. The focus will be on the US CPI report released on Wednesday, which will offer insights into the Fed's future rate hike plans. If inflation remains stubborn, it could lead to a 25-bps increase in November, fueling the recent USD rally.
The European Central Bank (ECB) meeting is also eagerly awaited, with uncertainty about whether they will continue hiking interest rates or pause amid a challenging Eurozone economic outlook. Additionally, the German ZEW Economic Sentiment report and USD price movements on Tuesday will influence short-term trading opportunities.
Given this backdrop, the EUR/USD pair appears biased towards the downside. However, traders are likely to exercise caution ahead of key data and central bank events, hesitating to take aggressive positions until there is clarity on the continuation of the downtrend initiated from the 1.1275 region reached in July.
EURUSD, after yesterday's temporary correction, continues today in the bearish direction towards the last support in the 1.0650 region. Similarly, the DXY is also showing an inverse picture, moving towards the next resistance at 105.50.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0700	1.0650	1.0600

GBPUSD

GBP/USD Bears Persist as Fed Hints at Rate Halt
The US central bank is expected to halt rate hikes in September, but there's still a chance of one more 25 bps increase this year. Upbeat US macro data last week reinforced these expectations due to a resilient economy and lingering inflation. This hawkish outlook supports elevated US Treasury bond yields, boosting the safe-haven dollar and pressuring GBP/USD.
Worries about China's worsening economic conditions and rising borrowing costs are dampening investor appetite for riskier assets. USD bulls are cautious and awaiting Wednesday's US consumer inflation data, which will guide the Fed's future rate decisions, impacting the USD and GBP/USD.
The British Pound gained support from hawkish remarks by Bank of England's Catherine Mann, countering BoE Governor Andrew Bailey's warning about rising borrowing costs. Mixed UK jobs data had little impact, suggesting GBP/USD's recent decline from its YTD peak may not be over.
GBP/USD is persisting in its bearish trend, heading towards the 1.2400 support level, where the 200-day moving average (200MA) and the descending channel's lower boundary are converging, creating a point of confluence. A temporary correction is happening but the big picture is still bearish for the pair.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3150	1.3000	1.2825	1.2450	1.2400	1.2300

JPYUSD

Yen's Warning and Economic Concerns Impact USD/JPY
Kanda has issued a warning about the recent Japanese Yen (JPY) sell-off, hinting at potential actions if speculative currency market movements persist. This statement negatively impacted the USD/JPY pair.
A private survey revealed that China's service sector growth hit an eight-month low, raising concerns about the weakening Chinese economy, which could affect Japanese exports.
US Commerce Secretary Gina Raimondo expects no changes to US tariffs on China, pending a review by the US Trade Representative's Office. This could heighten trade tensions, dampening investor appetite for riskier assets and hindering significant corrective declines in the pair.
BoJ policymaker Hajime Takata reiterated the need for an accommodative monetary policy, given economic uncertainty, reinforcing market expectations.
The Federal Reserve's plan to maintain higher interest rates supports US Treasury bond yields, favoring the Greenback.
Upcoming US data releases, including the ISM Services PMI and S&P Global PMIs for August, will provide crucial insights into the US economic situation, potentially guiding the USD/JPY pair's direction.
USDJPY coming back toward the 146.00 support level whereas the down parallel of the bullish trend helps support the price. The bullish long trend is still strong and the next level at 150 is the next target.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

XAUUSD

Gold Prices Await US CPI Data with Fed's Interest Rate Outlook
The upcoming US Consumer Price Index (CPI) release carries significant weight as it guides the Federal Reserve's future interest rate decisions, following the expected pause in September. A robust CPI reading would reinforce market expectations of further Fed policy tightening, potentially pushing gold prices lower. It's important to note that markets have factored in the possibility of a 25 basis points rate increase by year-end.
Optimistic recent US macroeconomic data bolstered confidence in a resilient economy, supporting the Fed's stance on keeping interest rates elevated. This outlook has bolstered US Treasury bond yields and boosted the US Dollar's value, though the Greenback saw some profit-taking on Monday.
Additionally, a cautious sentiment lingers in equity markets, enhancing gold's safe-haven appeal. Concerns persist about China's economic conditions and rising borrowing costs, prompting some investors to seek refuge in gold.
Traders are exercising caution before the US CPI report and the European Central Bank (ECB) meeting later this week. These events will shape gold's direction, but uncertainty remains about the ECB's decision amid inflation and economic concerns in the Eurozone.
Investors should await strong buying signals before betting on gold's recovery from its recent low near $1,885. These upcoming data and central bank actions will dictate gold's next move.
Gold found support at the 100MA on the 4-hour chart as the dollar retraced back yesterday, but the general view is still bearish for gold. The next support is at 1910, and a breakout of this support level will take the price toward 1900, followed by 1885.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1920	1942	1931	1910	1900	1885

DAX40

European Markets Navigate Mixed Performances, Tech Stocks Shine
The European market has seen modest beginnings, with healthcare giants like Novartis (NOVN), Novo Nordisk (NOVO_B), AstraZeneca (AZN), and Roche (RO) mitigating losses incurred by Airbus (AIR) due to a rare manufacturing flaw in Pratt & Whitney engines that could ground hundreds of Airbus jets in the coming years. Irish packaging company Smurfit Kappa (SK3I) witnessed a 12% drop following its merger announcement with US peer Westrock (WRK).
The STOXX 600 remains relatively stable after recent gains, while the FTSE 100 is up 0.1%, taking advantage of a weaker pound as UK labor market data showed signs of softening. This eases pressure on the Bank of England to raise rates. Tech stocks rallied on Wall Street, notably Tesla (TSLA), driven by renewed AI enthusiasm, and UK chip designer ARM Holdings is set to go public with high investor demand.
However, the European tech sector lags, with the STOXX tech index (.SX8P) declining, largely due to a 1.5% drop in Germany's SAP (SAP) following Oracle's (ORCL) disappointing revenues.
European shares continue to rise, mirroring Asian and Wall Street gains driven by tech stocks and AI optimism. Futures for STOXX 50, DAX and FTSE 100 are all in positive territory. German wholesale prices decreased in August, offering relief to struggling manufacturers.
AstraZeneca (AZN) may face renewed scrutiny following CEO Pascal Soriot's speculated departure, which led to a 3% drop in shares. Primark owner ABF Foods (ABF) raised its full-year profit outlook, citing strong performance in its fast-fashion and food businesses.
DAX received support and experienced a rebound at the 15,500 level. The current price range encompasses support at 15,500 and resistance at 16,400. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

US Inflation Data and Upcoming ECB Meeting Drive Forex Market Sentiment
Today's US consumer inflation data release carries significant weight, impacting Federal Reserve (Fed) policy and the US Dollar (USD). Meanwhile, traders eagerly await the European Central Bank (ECB) meeting later this week, which will shape the market's next moves.
The belief that the Fed will maintain its hawkish stance bolsters US Treasury bond yields, driving USD strength and putting pressure on the EUR/USD pair. Positive US macro data and rising Crude Oil prices contribute to inflation concerns and the potential for further Fed policy tightening. Forecasts suggest a YoY increase in the headline US CPI to 3.6% in August, with Core CPI expected to rise 4.3% YoY.
Simultaneously, traders increasingly anticipate a quarter-point ECB interest-rate hike due to persistent regional inflation. A 70% probability of a rate increase has emerged, fueled by expectations of high inflation beyond 2024, strengthening the case for tighter ECB policy.
EURUSD is moving inside a small range from yesterday but the direction is bearish towards the last support in the 1.0650 region. Similarly, the DXY is also showing an inverse picture, moving towards the next resistance at 105.50.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0700	1.0650	1.0600

GBPUSD

British Pound Faces Headwinds Amid UK GDP Contraction and BoE Rate Hike Speculations
The British Pound (GBP) faces challenges as recent data reveals a sharp 0.5% contraction in the UK's Gross Domestic Product (GDP) for July, the steepest decline in seven months. This decline signals a loss of economic momentum, likely influenced by rising borrowing costs and renewed recession concerns. These factors, alongside cooling trends in the UK labor market, reinforce speculations of the Bank of England (BoE) nearing the end of its rate-hiking cycle.
Additionally, the US Dollar (USD) gains strength due to expectations of further Federal Reserve (Fed) policy tightening. Market sentiment leans toward the Fed maintaining a hawkish stance, supported by recent robust US data indicating economic resilience. Furthermore, the surging Crude Oil prices heighten inflation worries, potentially prompting the Fed to keep interest rates elevated. This bolsters US Treasury bond yields, assisting the USD's rise, though USD traders await US consumer inflation figures, with August's expected YoY CPI acceleration to 3.6% from the previous month's 3.2%.
GBP/USD is persisting in its bearish trend, heading towards the 1.2400 support level, where the 200-day moving average (200MA) and the descending channel's lower boundary are converging, creating a point of confluence. A temporary correction is happening but the big picture is still bearish for the pair.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3150	1.3000	1.2825	1.2450	1.2400	1.2300

JPYUSD

Market Resilience Prevails Despite BoJ Governor's Hawkish Remarks
The initial market response to Bank of Japan (BoJ) Governor Kazuo Ueda's hawkish remarks quickly subsided. Market participants believe the Japanese central bank will maintain the status quo until next summer. In a Yomiuri newspaper interview, Ueda mentioned the possibility of ending negative interest rates if the BoJ gains confidence in sustainable price and wage growth. However, Hiroshige Seko, Japan's ruling Liberal Democratic Party’s (LDP) Upper House secretary-general, expressed a preference for an ultra-loose monetary policy. Seko noted that Ueda mentioned an exit from the easy policy after achieving the 2% inflation target.
This alleviates concerns of an imminent shift in BoJ's dovish stance. This, coupled with some US Dollar (USD) buying, supports the USD/JPY pair. Expectations of further Federal Reserve (Fed) policy tightening keep US Treasury bond yields high and boost USD demand. The Fed is likely to pause rate hikes in September, though markets anticipate one more 25 bps increase in 2023. Upbeat US macro data released last week confirms a resilient economy, and lingering inflation allows the Fed to maintain higher interest rates.
Economists are estimating a 3.6% year-over-year increase in U.S. inflation, according to Dow Jones. This would represent an uptick from the previous month's reading of 3.2%. Additionally, the core consumer price index, which excludes food and energy costs, is expected to show a 4.3% rise in August, down slightly from the 4.7% gain observed in July.
USDJPY continues its bullish long trend still strong and the next level at 150 is the next target. Right now going back toward 148.00 last level waiting for today's data from the US to find more direction.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

XAUUSD

Gold Prices Retreat Amid Stronger US Dollar and Inflation Concerns
The gold price continues to decline for the second consecutive day, hovering near its monthly low. This drop is primarily attributed to increased US Dollar buying activity, diverting investment away from precious metals. The ongoing concerns about a potential recession are preventing more substantial losses for XAU/USD in anticipation of the upcoming US Consumer Price Index (CPI) release.
The surge in demand for the US Dollar, driven by recent price volatility, is a significant factor negatively impacting gold price. Expectations that the Federal Reserve will maintain its hawkish stance are boosting US Treasury bond yields, providing support for the US Dollar. Market participants are confident that the Fed will keep interest rates higher for an extended period, with some even pricing in the possibility of another 25-basis point rate increase by the end of the year.
Last week's positive US macroeconomic data, indicating a resilient economy, further reinforced these expectations. Additionally, the slower-than-expected decline in inflation levels supports the notion of future Fed policy tightening. Consequently, the focus is squarely on the upcoming release of the US Consumer Price Index (CPI), which will shape expectations regarding the Fed's future rate hikes and impact gold prices.
If the CPI data reveals persistent inflation, it could trigger a further rally in the US Dollar to a six-month high and continue to push gold prices lower. However, concerns about the deteriorating economic conditions in China and worries about rising borrowing costs are tempering investors' appetite for riskier assets, which may provide some support for the safe-haven XAU/USD.
Gold found support at the 1910 level, and a breakout of this support level will take the price toward 1900, followed by 1885.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1920	1942	1931	1910	1900	1885

DAX40

European Stock Markets React to Inflation Report and Central Bank Decisions
European stock markets declined on Wednesday amid anticipation of a pivotal US inflation report, impacting the Federal Reserve's policy direction. Investors reacted to the European Central Bank's recent rate decision. August U.S. consumer prices were expected to rise significantly, potentially influencing the Fed's interest rate decision. Concerns persisted over the Eurozone's inflation projection, possibly leading to a tenth rate hike. Market odds of a 25 basis point rate increase rose to nearly 75%. Inditex (ITX) saw a 2.3% stock decline despite strong half-year profit growth. In contrast, the UK's FTSE 100 (UK100) rose 0.1% due to financial stock gains. Shell (SHEL) climbed 0.8% as oil prices neared a 10-month high. Aviva (AV.) gained 3.2% after exiting the Singlife venture and selling its stake to Sumitomo Life. A weaker pound, driven by disappointing British economic data, favored FTSE 100. BP (BP.) shares remained flat after CEO Bernard Looney's abrupt resignation due to undisclosed personal relationships.
Investors are also awaiting industrial production data for the UK and the eurozone later in the day.
DAX received support and experienced a rebound at the 15,500 level. The current price range encompasses support at 15,500 and resistance at 16,400. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

U.S. Inflation Surges, European Central Bank Decision Awaited, and Arm's Debut on Wall Street.

Despite August's US inflation being higher than expected at 3.7% (compared to the anticipated 3.6%), most Asia-Pacific markets experienced gains. Meanwhile, European markets opened with a mixed outlook, with investors eagerly anticipating the European Central Bank's upcoming rate decision.
Shares of Arm, the British chip design company founded in 1990, will begin trading in New York on Thursday for the first time after being taken private by SoftBank in 2016. Shares of Japanese investment holding company Softbank slipped slightly on Thursday after subsidiary Arm priced its initial public offering at $51 per share.
In Australia, the unemployment rate remained stable at 3.7% in August, aligning with economist predictions. However, there is uncertainty surrounding the European Central Bank's decision, with economists split on whether it will maintain rates or opt for a 10th consecutive hike, potentially reaching 4%. Market expectations lean towards the latter, although concerns about the economic decline in the Eurozone could sway more dovish ECB members.
Demand for Japanese 20-year bonds at auction was the strongest since May 2020, soothing concerns about a potential normalizing of monetary policy by the Bank of Japan.
The U.S. August inflation data surpassed expectations, largely due to surging oil prices, with the gasoline index being the primary contributor to the monthly rise in the consumer price index (CPI).
The Federal Reserve is unlikely to adjust interest rates at its upcoming meeting on September 20, as markets have already priced in a more than 95% probability of no change. However, the November meeting, being the year's final one, might witness a rate increase if inflation remains elevated. Presently, the market anticipates a cautious stance from the Fed as it monitors inflation.



ECB's Crucial Decision and US Inflation Insights
The markets had been expecting a pause in the central bank's historic policy-tightening cycle in the wake of a darkening Eurozone economic outlook. That said, a Reuters report, suggesting that the ECB could revise its 2024 inflation forecast upwards, well past the 3% mark, ignited speculation about a potential rate hike. The European Commission, however, had marginally adjusted the inflation rate forecast from 2.8% to 2.9% for 2024, casting doubts on the aggressive inflation predictions. Hence, the pivotal ECB decision will play a key role in influencing the sentiment surrounding the shared currency and provide a fresh directional impetus to the EUR/USD.
The US inflation data for August came in higher than expected, mainly driven by the surge in oil prices. The gasoline index was the largest contributor to the monthly increase in the consumer price index (CPI), accounting for more than half of the rise.
The August inflation data may not alter the Federal Reserve’s decision to keep interest rates unchanged at its next meeting on September 20, as markets are already pricing in a more than 95% probability of no change. However, the November meeting, which is the last one of the year, may see a rate hike if inflation remains elevated. For now, the market is expecting a wait-and-see approach to inflation from the Fed.
EURUSD continued moving inside a tight range around the last support in the 1.0650 region. Similarly, the DXY is also showing continued being supported by the 104.50 and waiting for direction.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0940	1.0850	1.0780	1.0700	1.0650	1.0600

Challenges and Uncertainties Loom as GBP Faces BoE's Policy Tightening Dilemma
The British Pound (GBP) is facing challenges compared to other currencies due to reduced expectations regarding the Bank of England's (BoE) adoption of a more aggressive policy tightening strategy. This is primarily due to the recent 0.5% contraction in the UK's economy in July, its most significant decline in seven months, which has raised concerns about the possibility of a recession. Additionally, signs of a cooling labor market in the UK are increasing pressure on the BoE to pause its interest rate hikes.
Despite these concerns, the markets are still pricing in a higher likelihood of a 25-basis point rate increase at the upcoming BoE meeting on September 21. Furthermore, there is a 30% chance of another rate hike in November, while the first-rate cut is not expected until the second half of 2024. In contrast, the most recent US consumer inflation data, released on Wednesday, suggests that the Federal Reserve (Fed) will maintain its current interest rates at the next policy meeting. This has led to renewed selling of the US Dollar (USD) and is offering some support to the GBP/USD currency pair.
According to the US Bureau of Labor Statistics (BLS), the headline US Consumer Price Index (CPI) rose to 3.7% on an annual basis in August, up from 3.2% in July, slightly exceeding the expected 3.6% reading. However, the monthly CPI remained in line with forecasts, recording a 0.6% increase for the reported month. Meanwhile, the core CPI, which excludes volatile items like food and fuel, met expectations, rising at a year-over-year rate of 4.3%. Given these data outcomes, it is anticipated that the Fed will maintain its current monetary policy stance without making significant changes.
GBP/USD continues hovering around the 1.2450 level while there is more pressure on its bearish trend, heading towards the 1.2400 support level, where the 200-day moving average (200MA) and the descending channel's lower boundary are converging, creating a point of confluence.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2750	1.2650	1.2580	1.2450	1.2400	1.2300

BoJ's Monetary Policy Shift and Fed's Rate Dilemma Shape the Path Forward
The Japanese Yen (JPY) is currently supported by expectations of a change in the Bank of Japan's (BoJ) ultra-easy monetary policy. This development is significantly influencing the USD/JPY pair. Market sentiment suggests that the central bank might abandon its yield-curve control (YCC) policy and negative interest rates as early as this year, particularly following the hawkish remarks made by BoJ Governor Kazuo Ueda over the weekend.
In an interview with the Yomiuri newspaper, Ueda hinted that increasing interest rates is a possible course of action if the BoJ gains confidence in the sustainability of rising prices and wages. This announcement led to a selloff in Japanese government bonds (JGB) and drove up yields. The demand for Japanese 20-year bonds at auction reached its highest level since May 2020, alleviating concerns about the normalization of the BoJ's monetary policy.
Furthermore, uncertainty surrounding the Federal Reserve's (Fed) future rate-hike path has resulted in some selling of the US Dollar (USD), contributing to the downward pressure on the USD/JPY pair. The release of US consumer inflation figures on Wednesday confirmed the Fed's intention to maintain its current interest rates at the upcoming policy meeting. Nevertheless, persistent inflation keeps hopes alive for another rate hike by year-end.
USDJPY buying pressure continues while the level 147.7 continues playing as resistance. The most probable scenario is a continuation up toward the 15.00 region especially with today's PPI and Retail sales Data that may give more clues on Inflation pressure and direction in the US.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

CPI Surpasses Expectations, Fed's Dovish Signals, and USD's Rollercoaster Ride
The YoY CPI exceeded expectations, reaching 3.7% compared to an anticipated 3.6% for August. Core CPI also rose unexpectedly, from 0.2% to 0.3%. Despite this, the annual core inflation rate remained stable at 4.3%.
Yields and the dollar are coming back to their bullish stance after some correction yesterday as the Fed may keep rates at this level for longer and maybe a last hike in November if inflationary pressures continue.
CME FedWatch Tool indicates a likely Fed interest rate range of 5.25% to 5.50% for September, suggesting growing expectations of a more dovish Fed stance. While a September rate hike is unlikely, there's a 40% chance of a 25-bps increase in November, indicating cautious investor sentiment toward potential future monetary tightening.
The US Dollar Index (DXY), which measures USD performance against major currencies, is retreating from recent gains, trading around 104.60. Investors are focusing on upcoming US economic data, including Core Producer Price Index (PPI) and August Retail Sales figures, which could influence market sentiment.
Gold is breaking the support around the 1910 level and the next target could be around the 1885 level. Today's data will help gold find direction.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1950	1942	1931	1910	1900	1885

European Stocks Tread Cautiously Ahead of ECB Rate Decision

On Thursday, European stocks made slight gains, as investors remained cautious ahead of the European Central Bank's rate decision. The ECB is expected to raise interest rates for the tenth consecutive time, potentially pushing Europe's key interest rate to a record high. The likelihood of a 25-basis-point hike has risen to 65%, up from around 40% earlier in the week. This change in expectations followed a Reuters report on Tuesday indicating that the ECB might increase its inflation forecast for next year to over 3%. Additionally, investors are eagerly anticipating industrial production data for the UK and the eurozone later today.
The energy index (.SXEP) increased by 1%, mirroring a recovery in crude oil prices, while miners (.SXPP) gained 1.7% on stronger metal markets.
Neste (NESTE) saw a 3.1% increase in its stock price after Goldman Sachs upgraded the Finnish oil refiner and biofuels producer's rating to "buy."
China's commerce ministry warned that the European Commission's investigation into Chinese electric vehicles suspected of benefiting from state subsidies could have a "negative" impact on economic and trade relations.
On the downside, the STOXX Europe 600 auto index (.SXAP) fell by 1.1%, with Germany's Mercedes (MBG), BMW (BMW), Volkswagen (VOW), and France's Renault (RNO) declining between 1.1% and 1.9%.
DAX continues inside the range of 15500 and 16000. The wider price range encompasses support at 15,500 and resistance at 16,400. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16000	15550	15400	15200

 

[zForex]

ECB's Cautious Monetary Policy Spurs EUR/USD Dip:
Despite the European Central Bank (ECB) raising rates by 25 basis points (bps) last Thursday, the EUR/USD pair dipped, this drop is attributed to the ECB's cautious stance on monetary policy.
The market's response indicates investor wariness of the ECB's approach, suggesting a potential pause in the rate hike cycle. The ECB hints that the rate hikes may have peaked, citing expected inflation decline and Eurozone downside risks.
China's positive data, including Retail Sales and Industrial Production, bode well for the Eurozone, its significant trading partner.
The US Dollar Index (DXY), near a six-month high, underscores USD strength, backed by positive economic indicators like Initial Jobless Claims and Retail Sales.
Market focus shifts to the Eurozone's EcoFin Meeting and the US preliminary Michigan Consumer Sentiment Index for insights into sentiment and their impact on EUR/USD trading.
The EURUSD found support at the downward parallel of the current bearish long-term trend at 1.0640, which also coincides with a support level from May. A potential correction may occur, but when considering the DXY (US Dollar Index), it suggests that there are still some gains to be made before a possible comeback can be expected.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0940	1.0850	1.0780	1.0640	1.0600	1.0530

Dollar Retreats, but Bearish Sentiment Looms
The USD's profit-taking, retreating from recent highs, supports GBP/USD, thanks to optimism about Chinese stimulus and positive macro data. Lower US Treasury yields weaken the dollar, but expectations of the Federal Reserve maintaining a hawkish stance could limit USD declines.
The Fed is likely to pause its rate hikes soon, but the chance of a 25-basis point increase in November or December remains due to strong US economic data. Inflation and sustained higher interest rates may favor the USD. Reduced chances of aggressive tightening by the Bank of England could hinder the GBP/USD pair, given the UK's economic contraction and cooling labor market.
Traders await the BoE's Consumer Inflation Expectations survey, with US data like the Empire State Manufacturing Index and Preliminary Michigan Consumer Sentiment Index potentially impacting the GBP/USD pair. However, the fundamental backdrop seems bearish, with spot prices set to close lower for the second consecutive week.
GBP/USD found support around 1.2400 while also touching the lower boundary of the bearish channel. A possible correction may occur soon if the dollar starts to rebound after reaching historical levels.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2750	1.2650	1.2580	1.2450	1.2400	1.2300

USD Strength Persists as Markets Await Fed Meeting
The US Dollar Index (DXY) is near a high of 105.30, supported by robust US economic data. Investors await the University of Michigan Consumer Confidence survey before the upcoming Federal Open Market Committee (FOMC) meeting. Positive signs include August's 1.5% YoY growth in the Producer Price Index (PPI) and Retail Sales up 0.6% MoM. Weekly Initial Jobless Claims were at 220,000, reinforcing the US economy's resilience and August's inflation rebound.
Expectations for the Federal Reserve's monetary policy remain steady, with current interest rates likely to continue. The Fed's hawkish stance supports US bond yields and the USD. In contrast, the Bank of Japan (BoJ) remains cautious, emphasizing the need for wage and inflation improvements, leaving the Japanese Yen (JPY) vulnerable.
Japan's Machinery Orders fell 13% in July, failing to strengthen the JPY. Upcoming releases of the US Empire State Manufacturing Index, Industrial Production, and University of Michigan Consumer Confidence survey will offer insight into the Fed's potential interest rate decisions, crucial ahead of next week's Fed meeting.
USDJPY's buying pressure continues, while the level of 147.7 is acting as resistance. The most probable scenario is a continuation upwards towards the 150.00 region, especially with today's PPI and Retail Sales data, which may provide more clues about inflation pressure and the direction in the US.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

The gold price extended gains, trading near $1,920 per troy ounce in the early European session, supported by a slight US Dollar (USD) correction. Positive Chinese economic data, including a 4.6% YoY increase in retail sales and 4.5% growth in industrial production, boosted market optimism.
The USD retreated from its recent high of around 105.20 on the US Dollar Index (DXY), but a substantial decline is limited due to caution regarding the US Federal Reserve's hawkish monetary policy stance. US Treasury yields recovered, with the 10-year yield at 4.30%, potentially supporting the USD.
Recent positive US economic data, such as Initial Jobless Claims and Retail Sales figures, suggest a healthy economic environment influencing market sentiment.
The US preliminary Michigan Consumer Sentiment Index release will be closely monitored for a minor decline from 69.1 to 69.5 during the North American session.
Gold, after reaching the 1900 level, retraced back towards the 1920 range. The current trend remains bearish, and further selloffs are possible since the fundamentals are still not in favor of gold. If a new selloff begins, 1885 could serve as the next significant support level for gold.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1950	1942	1931	1910	1900	1885

European Stocks Rally on ECB Rate Hike and Positive Chinese Data
European stocks experienced a significant surge on Friday, building upon their positive momentum from the prior session. This upswing was primarily driven by optimism surrounding the European Central Bank's likelihood of reaching a peak in interest rates.
During the previous day, the central bank implemented its 10th consecutive rate hike, amounting to a 25-basis point increase. However, it also indicated its potential willingness to halt further tightening of monetary policy due to signs of receding inflation.
Additionally, investors responded positively to the strong Chinese economic data that surpassed expectations, showcasing substantial growth in both industrial activity and retail sales.
In the corporate realm, fashion conglomerate H&M reported quarterly sales that remained stagnant, falling short of the anticipated figures.
DAX continues inside the range of 15500 and 16000. The wider price range encompasses support at 15,500 and resistance at the 16,400 level. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16000	15550	15400	15200

 

[zForex]

EURUSD

EURUSD Stability Amidst Shifting Global Interest Rate Dynamics
The euro is stabilizing below the 1.07 level following a turbulent week marked by significant announcements and the European Central Bank's decision to raise interest rates by 25 basis points, albeit with a less aggressive tone. Speculation about further rate hikes from the ECB has dwindled, with attention now shifting towards when the first interest rate cut might occur.
Inflationary pressures, while showing some signs of easing, still remain uncomfortably high for the European Central Bank, making any rate reduction unlikely until year-end. Consequently, much of the focus has shifted to the upcoming United States Federal Reserve meeting, where decisions regarding further interest rate increases will be made.
The US economy has responded positively to higher interest rates, with limited impact on growth and a reduced risk of recession. However, there are concerns that continued rate hikes could increase uncertainty in the US banking sector, despite its current stability.
In the short term, these developments may exert pressure on the euro, which has faced scrutiny in recent weeks. Nonetheless, it is expected that the euro's resilience will soon reemerge.
The current agenda lacks significant events that could significantly impact the euro's stability.
The EURUSD found support at the downward parallel of the current bearish long-term trend at 1.0640, which also coincides with a support level from May. A potential correction may occur when considering the DXY (US Dollar Index), which suggests that a possible comeback can be expected especially when touching the 105.50 level is close.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0940	1.0850	1.0780	1.0640	1.0600	1.0530

GBPUSD

BoE Rate Hike Speculation in Light of Economic Indicators
Cross-currency traders are speculating that the Bank of England (BoE) will implement a 25 basis point interest rate hike during the upcoming Thursday meeting. This potential rate increase by the BoE is part of the central bank's strategy to combat inflationary pressures and stabilize the British economy.
The initial reading of the US Michigan Consumer Sentiment Index for September stands at 67.7, indicating a decrease from the previous figure of 69.5. This reading also falls below the anticipated value of 69.1 for the month.
BoE Governor Andrew Bailey has suggested that the central bank is nearing the conclusion of its series of interest rate hikes. This statement, along with concerns regarding a potential recession and signs of a cooling labor market in the UK, could intensify the pressure on the BoE to temporarily halt its rate-increasing efforts.
Selling pressures on GBP/USD persist, breaching the 1.2400 support level. The subsequent support level to monitor is at 1.2300. There is a potential for a dollar correction in the near future, and if this materializes, it could lead to a correction in the currency pair.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2750	1.2650	1.2580	1.2400	1.2300	1.2200

USDJPY

USD/JPY Range-bound Ahead of Key Central Bank Meetings
The USD/JPY pair hovers between 147.68 and 147.88, staying within a narrow trading range. Both the Federal Reserve (Fed) and the Bank of Japan (BoJ) are set to hold key meetings, adding to market caution.
In recent economic data, the Empire State Manufacturing Index for August improved to 1.9 from a previous reading of -19, exceeding expectations. Industrial Production also saw a rise of 0.4% MoM in August, outperforming market forecasts. However, the preliminary Consumer Sentiment Index for September declined from 69.1 to 67.7, and the five-year Consumer Inflation Expectation dropped to 2.7% from 3%.
The market expects the Fed to maintain interest rates during its upcoming meeting, with Fed Chairman Jerome Powell expected to make no significant policy changes in his press conference. However, a dovish stance from the Fed could weaken the US Dollar (USD) and pose challenges for the USD/JPY pair.
Turning to the Japanese Yen (JPY), all eyes are on the BoJ's policy meeting scheduled for Friday. There is growing speculation that the BoJ may be closer to departing from its ultra-loose monetary policy and negative interest rates. Nevertheless, BoJ policymakers have indicated that such a move won't happen until wage and inflation data meet expectations, leaving the JPY susceptible to fluctuations against other currencies.
Investors will closely monitor the Fed's interest rate decision on Wednesday, with expectations of no changes. Subsequently, attention will shift to the Bank of Japan (BoJ) on Friday.
USDJPY's buying pressure continues, while the level of 147.7 is acting as resistance. The most probable scenario is a continuation upwards towards the 150.00 region.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

XAUUSD

Gold Prices Rise on Market Caution and USD Weakness
The gold price rose for the third consecutive day on Monday, approaching the $1,930 supply zone in the Asian session. This upward movement is attributed to several factors.
Firstly, a more cautious risk sentiment in the market is boosting demand for safe-haven assets like gold. This is partly due to concerns about China's deteriorating economic conditions, which have been exacerbated by developments related to China Evergrande Group. The company's delay in restructuring its debt and the detention of some employees from its wealth management unit in Shenzhen have added to global risk aversion, prompting investors to seek refuge in gold.
Secondly, the US Dollar (USD) has weakened slightly, providing further support to the XAU/USD pair. However, the USD's downside is limited as traders await the upcoming Federal Open Market Committee (FOMC) policy meeting, which starts on Tuesday. While the Federal Reserve (Fed) is expected to keep interest rates unchanged, there is still speculation about a potential rate hike in November or December.
Thirdly, the outlook for elevated US Treasury bond yields, which benefit the USD, may constrain additional gains for gold, as traders await further guidance on the Fed's future rate-hike plans. Key factors to watch include the monetary policy statement and Fed Chair Jerome Powell's post-meeting press conference, which could influence the direction of the USD and, subsequently, gold.
Additionally, investors will be monitoring major central bank rate decisions from the Swiss National Bank (SNB), the Bank of England (BoE), and the Bank of Japan (BoJ) later in the week. Consumer inflation figures from Canada and the United Kingdom (UK) will also be scrutinized for potential trading opportunities involving gold.
On Friday, gold experienced a correction as it retraced toward the 1931 resistance level, coinciding with the upper boundary of the current bearish channel. The resurgence of the DXY and US yields could diminish gold's appeal, potentially leading to further selling pressure on the precious metal.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1950	1942	1931	1910	1900	1885

DAX40

European Stocks Dip Ahead of Central Bank Meetings
European stocks experienced a slight decline on Monday, following substantial gains last week. Investors were preparing for a busy week filled with global central bank meetings, including interest rate decisions from Norway, Sweden, Switzerland, the UK, and the United States.
The spotlight this week is on global central banks, especially after the European Central Bank (ECB) signaled the end of rate hikes last week. The Bank of England (BoE) is expected to raise rates for the 15th time later in the week, while the Federal Reserve appears poised for a more cautious stance.
Market sentiment remained cautious as Eurozone bond yields inched higher following hawkish remarks from some ECB officials after their rate decision.
ECB Governing Council member Yannis Stournaras stressed that governments must play their part in controlling consumer prices, given that borrowing costs have possibly reached their peak.
In stock-specific news, Nordic Semiconductor ASA (NOD) tumbled 13.2% after revising its revenue guidance for the third quarter, and Fingerprint Cards (FING_B) declined by 5.8%.
Societe Generale (GLE) saw a 6.3% drop after the third-largest bank in France projected minimal to no growth in annual sales over the upcoming years, as revealed in a highly anticipated strategic plan from its new CEO.
S4 Capital (SFOR), Martin Sorrell's advertising group, experienced a substantial 22% decrease as it lowered its annual forecast for the second time in as many months, citing client caution driven by recession fears.
DAX continues inside the range of 15500 and 16000. The wider price range encompasses support at 15,500 and resistance at 16,400. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16000	15550	15400	15200

 

[zForex]

Global Economic Snapshot: Market Movements, Central Bank Actions, and Inflation Concerns


The Nikkei share average in Japan experienced a drop of over 1%, but upon closer examination, it becomes apparent that more than half of this decline can be attributed to a small number of chips- and AI-related stocks with significant weightings. European markets began the day with lower openings on Tuesday, as investors kept an eye on the commencement of the US Federal Reserve's two-day monetary policy meeting.
Australia's central bank maintains the stance that inflation in the country is "too high," yet in its recent meeting, it chose to maintain its benchmark policy rate at 4.1%. Minutes from the Reserve Bank of Australia indicate that the board deliberated between raising rates by 25 basis points or leaving them unchanged. Ultimately, the argument for keeping the rate unchanged prevailed, with the RBA noting that "recent data aligns with inflation returning to target within a reasonable timeframe while keeping the cash rate at its current level." Despite positive developments from developers Country Garden Holdings Co. and Sunac China Holdings Ltd., sentiment in Asia remained subdued. Country Garden secured bondholder approval for the final batch of eight local notes it sought to extend repayments on, while Sunac received approval from creditors for its debt restructuring plan.
Crude oil prices have surged by roughly one-third since mid-June, thanks to collaboration between Saudi Arabia and Russia to limit supplies and boost prices. This puts additional pressure on central bankers worldwide as they work to combat rising prices. The Federal Reserve will set its policy on Wednesday, followed by the Bank of England on Thursday and the Bank of Japan on Friday. Given expectations that the Fed will maintain interest rates this week, traders will closely monitor the "dot plot" summary of economic forecasts. The key questions are whether policymakers will retain their projections for one more 25 basis-point rate hike by year-end and how much easing they are considering for 2024. In June, they had projected a one percentage point reduction.



Focus on 'Dot Plot' and ECB's Impact on EUR/USD
The Federal Reserve is set to maintain interest rates this week, with traders closely monitoring the "dot plot" summarizing economic forecasts. Key questions revolve around whether policymakers will uphold their projections for an additional 25 basis-point rate hike by year-end and the extent of easing they are contemplating for 2024. In June, they had foreseen a one percentage point reduction.
Last Thursday, the European Central Bank (ECB) raised interest rates by the expected 25 basis points, but this move led to a weakening of the Euro afterward. EUR/USD found support at 1.0630, and subsequently, the pair has been regaining ground, undergoing a corrective upward movement.
The market's current consensus suggests that the ECB won't raise rates further, shifting the focus to how long rates will remain at their present levels.
Today, the EU CPI data will shed light on the persistence of inflation and the extent to which oil prices have influenced overall prices.
EUR/USD found support at 1.0640, coinciding with the downward parallel of the ongoing bearish long-term trend and a support level dating back to May. The correction has begun, and the initial resistance level stands at 1.0700. When considering the US Dollar Index (DXY), it indicates the potential for a comeback, particularly if it approaches the 105.50 level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0940	1.0850	1.0780	1.0640	1.0600	1.0530

Sterling Faces Uncertainty Ahead of BoE Rate Decision and Inflation Data
The British Pound (GBP) is showing caution as the week begins, with investors feeling uncertain about the economic outlook in the UK. There's widespread anticipation of an upcoming interest rate increase from the Bank of England (BoE), and this decision is set to be announced on Thursday. The BoE finds itself unable to pause its policy-tightening efforts due to persistent inflationary pressures and strong wage growth momentum.
Before the BoE makes its interest rate decision, investors will be closely monitoring Wednesday's inflation data. The headline Consumer Price Index (CPI) is expected to rise, driven by increased energy prices resulting from the recent global oil price surge over the last four months. Core inflation remains relatively stable, primarily due to a higher labor cost index. There's uncertainty among market participants regarding whether UK Prime Minister Rishi Sunak will fulfill his commitment to reducing headline inflation to 5% by the end of the year. Sunak made this promise when headline inflation was in double digits back in January.
GBP/USD selling pressures continue breaking the 1.2400 support level. The next target will be the 1.2300. The dollar may make a possible correction soon and if this happens then the pair may correct.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2750	1.2650	1.2580	1.2400	1.2300	1.2200

BOJ Meeting in Focus as USD/JPY Hovers Near 10-Month High
The focus is currently on the yen (USDJPY), with the BOJ preparing to convene to discuss monetary policy this Friday. Last week, it reached a 10-month low of 147.95 per dollar, and as of Tuesday, it remained close to that level, staying flat at 147.63. The last time the yen was this weak was in the previous autumn when Japanese authorities took action to support it.
Expectations are that the BOJ will continue its policy of maintaining ultra-low interest rates and provide assurance that monetary stimulus will remain in place, at least for the time being. This is despite Governor Kazuo Ueda sparking speculation about a potential shift from the central bank's current policy stance.
USDJPY continues hovering around, the level of 147.7 and is also acting as resistance. The most probable scenario is a continuation upwards towards the 150.00 region.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

Gold Holds Near Two-Week High as US Dollar Retreats Ahead of Central Bank Meetings
Gold prices remained close to a two-week high on Tuesday as the US dollar retreated from its recent six-month peak. This comes ahead of this week's central bank meetings, which commence with the US Federal Reserve meeting later today.
The US dollar index (DXY) retreated from its highs of last week, making gold more affordable for international buyers, just ahead of important central bank policy decisions from the United States, Britain, and Japan this week.
Although the Federal Reserve is widely expected to maintain current interest rates when it announces its policy decision on Wednesday, the focus will be on its future rate outlook.
Low global inventories of gasoline and diesel pose a significant short-term risk to inflation targets, as noted by Langford.
The attractiveness of non-interest-bearing gold could diminish if the Federal Reserve continues to raise rates to combat inflation.
Gold experienced a correction as it retraced towards the 1931 resistance level, this level is challenging now where the price is testing the 1935 levels. The resurgence of the DXY and US yields could diminish gold's appeal, potentially leading to further selling pressure on the precious metal.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1950	1942	1931	1910	1900	1885

European Shares Show Modest Gains Due to Central Bank Awaitment
European shares experienced slight gains on Tuesday during volatile trading, as cautious investors awaited several central bank decisions scheduled for later in the week. However, Germany's DAX index underperformed compared to its regional counterparts due to weaknesses in industrial stocks.
Energy stocks (.SXEP) rose by 0.8% as crude oil prices surged on concerns about supply deficits.
In the financial sector, both insurance (.SXIP) and financial services (.SXFP) sectors climbed by 0.7% and 0.8%, respectively.
UBS also recorded a 0.5% increase after its CEO expressed optimism about the Swiss bank's momentum, particularly following its merger with former rival Credit Suisse earlier in the year. UBS manages a substantial $5.5 trillion in assets.
On the flip side, industrials (.SXNP) continued to decline for the second consecutive session, with Germany's Deutsche Post (DHL) experiencing a 2.6% drop. Rate-sensitive technology stocks (.SX8P) also decreased for the third consecutive session.
Investors remained cautious as they awaited interest rate decisions from major central banks, including the U.S. Federal Reserve on Wednesday, and the Bank of England, Swiss National Bank, Riksbank, and Norges Bank on Thursday. The European Central Bank (ECB) had already raised rates to a record level of 4% the previous week.
Furthermore, the euro area's benchmark 10-year Bund yield approached its highest levels in over 12 years on Tuesday after ECB officials reiterated their commitment to maintaining rates at the current levels for an extended period.
In the retail sector, Kingfisher (KGF) saw a significant 6% drop, ranking at the bottom of the STOXX 600, after the European home improvement retailer revised its annual profit forecast.
DAX continues inside the range of 15500 and 16000 for one month and a half. The wider price range encompasses support at 15,500 and resistance at 16,400. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16000	15550	15400	15200

 

[zForex]

Fed's Economic Forecast and Chair Powell's Insights in Upcoming Meeting
The Federal Reserve is expected to keep its current interest rates unchanged this Wednesday. Nevertheless, the market's primary focus will be on the central bank's revised economic forecast, particularly the "dot plot" illustrating the expected movements in the Fed funds rate. Chair Powell's subsequent press conference will offer investors valuable insights into the potential policy adjustments leading up to the November meeting and throughout 2024.
Several ECB members are scheduled to deliver speeches today, although they might not significantly influence current market pricing or sentiment before the FOMC meeting.
EUR/USD after finding support at the downward parallel of the ongoing bearish long-term trend and a support level dating back to May. The correction took the price toward the 1.07 area while waiting for today's FOMC meeting to find direction. The next resistance level will be at the 1.0750 level followed by the median line at 1.0800.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0940	1.0850	1.0750	1.0640	1.0600	1.0530

UK's Lower-than-Expected Inflation Rate May Influence Bank of England's Decision
In August, the United Kingdom experienced a 6.7% inflation rate, which was slightly lower than anticipated and showed a small decline from the previous month. This situation could potentially impact the Bank of England's decision to pause its tightening measures after its upcoming announcement. The likelihood of a quarter-point interest rate increase on Thursday has also decreased, now having a probability of less than 60% in the market, down from the previous 90% as indicated by swap pricing.
Investors widely expect that the central bank will maintain its current interest rates when it announces its latest policy decision on Wednesday. Additionally, the Federal Reserve will release its quarterly update on various economic indicators such as interest rates, gross domestic product, inflation, and unemployment.
Regarding GBP/USD, it continues to experience a selloff today following the release of CPI numbers, which approached the 1.2300 support level and the 61.80% Fibonacci level, with the next potential support at 1.2200. The resistance level is anticipated to be at 1.2450.

Resistance 3	Resistance 2	Resistance3	Support 3	Support 2	Support 3
1.2650	1.2580	1.2450	1.2400	1.2300	1.2200

USD/JPY Trading Flat Ahead of Fed and BoJ Meetings
The USD/JPY pair is trading flat around 147.83 as investors await key events. The Federal Reserve (Fed) is expected to keep interest rates unchanged at 5.25%-5.50% in its September meeting, with a 99% probability according to the CME Fedwatch Tool. This may impact the US Dollar.
US Treasury Secretary Janet Yellen noted the need for slower US growth to control inflation. Meanwhile, US Building Permits exceeded expectations, but Housing Starts dipped slightly. On the Japanese side, fears of FX intervention arise, with Japanese authorities expressing a sense of urgency. The Bank of Japan (BoJ) is expected to maintain its interest rate targets, with interest in any policy updates during its announcement.
Japanese trade data revealed a worse-than-expected Balance of Trade, while exports improved slightly, and imports increased.
Market participants are closely monitoring the Fed's decision and the upcoming BoJ announcement for trading opportunities in the USD/JPY pair. Please note that the article contains forward-looking statements and does not constitute investment advice.
USDJPY's buying pressure continues by breaking the 147.7 area and continuing toward the next big area of 150.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

Gold Prices Await Fed's Interest Rate Decision and FOMC Press Conference
Gold prices are hovering around $1,930 in Asian trading as investors adopt a wait-and-see approach in anticipation of the Federal Reserve's interest rate decision and FOMC Press Conference. These events could inject volatility into the market.
Simultaneously, the US dollar's value against major currencies remains steady near 105.10 after rebounding from a weekly low of 104.81. The yield on the US 10-year Treasury note has reached a 16-year high at 4.365%, which may limit the decline of the US Dollar (USD).
The Federal Reserve's two-day monetary policy meeting, scheduled for Wednesday, is expected to maintain interest rates in the 5.25% to 5.5% range, with a 99% probability of no change in September, according to the CME Fedwatch Tool. However, the likelihood of further rate hikes in November and December has decreased, as per the same source.
Fed Chairman Jerome Powell's Press Conference will provide insights into the 'dot plot' and inflation expectations. Rising interest rates can reduce the appeal of non-yielding assets, potentially impacting precious metals negatively.
Gold continues hovering around the 1931 resistance level. Depending on today's FOMC meeting gold may go up breaking the actual resistance toward its next target at the 1950 level or a selloff toward the 1900.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1950	1942	1931	1910	1900	1885

European Stocks Await Fed's Interest Rate Decision
European stocks experienced slight gains on Wednesday as investors awaited the US Federal Reserve's interest rate decision later in the day. British stocks, in particular, outperformed their regional counterparts due to surprising data from the UK indicating a more significant drop in inflation than expected for August.
Nonetheless, LVMH (MC) shares declined by 0.4% after being downgraded to a "hold" rating by Jefferies and receiving a price target reduction from Deutsche Bank. This development cooled investor sentiment towards the luxury brand, which has exposure to the Chinese market.
Jefferies also downgraded Kering (KER) and Moncler (MONC), causing their shares to fall by 0.8% and 0.9%, respectively.
Investors remained focused on the Federal Reserve's rate decision, with expectations that the US central bank would maintain its current interest rates.
The UK's export-oriented FTSE 100 (UK100) gained 0.6%, driven in part by a decline in the pound's value following the unexpected drop in British annual consumer price inflation (CPI) for August. This led investors to scale back their expectations of rate hikes by the Bank of England, just a day before its next policy announcement.
DAX continues inside the range of 15500 and 16000 for one month and a half. The wider price range encompasses support at 15,500 and resistance at 16,400. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16000	15550	15400	15200

 

[zForex]

EURUSD

EURUSD Recovers from Multi-Month Lows, But USD Index Nears Six-Month Highs
After initially dropping to fresh multi-month lows, the euro (EUR) managed to recover some of its losses against the US Dollar (USD), pushing the EURUSD pair back above the 1.0650 level at the start of the European trading session on Thursday.
The US Dollar continued its upward momentum, reaching new six-month highs near 105.70 according to the USD Index (DXY), just a few pips shy of the year-to-date peak around 105.90 seen on March 8.
The pair's pullback was influenced by corrections in short-term US yield curve segments, despite modest gains in intermediate and long-term yields. Meanwhile, 10-year bund yields approached recent highs near 2.75%.
EUR/USD retraced to the previous support level at 1.0630 following yesterday's market event. The dollar could persist in its ascent, even as the DXY hovers around its resistance level, potentially signaling a breakout. In the event of a breakout in EURUSD, the subsequent level to monitor resides at 1.0530.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0940	1.0850	1.0750	1.0640	1.0600	1.0530

GBPUSD

Bank of England Set to Hike Rates to 5.50% Amid Growing Economic Uncertainty
The Bank of England is widely anticipated to increase the bank rate by 25 basis points (bps) from 5.25% to 5.50% at 11:00 GMT, marking the highest level since 2007. The key question is whether this signals the end of aggressive rate hikes. The BoE might take a cue from the European Central Bank (ECB) and implement a cautious rate hike, acknowledging the growing risks of stagflation.
In Q2, the UK economy surprised with a 0.2% expansion, but economists remain pessimistic, citing delayed effects of higher rates. Unemployment rose to 4.3% in July, with 207K job losses, worsening conditions from June's 66K loss. However, average earnings (excluding bonuses) rose 7.8% YoY in July.
Given the slowing economy and weakening labor market, the BoE could hint at a pause post-hike. Governor Andrew Bailey hinted at nearing the end of the tightening cycle, but Catherine Mann advocated caution to prevent inflation overshooting.
Surprisingly, UK inflation eased, with CPI at 6.7% in August, below expectations. Services CPI also decreased to 6.8% YoY. This might influence the BoE's decision, with markets now pricing in a 57% chance of a rate hike pause, up from 20%. Goldman Sachs expects the BoE to maintain the rate at 5.25% and has revised its terminal rate forecast accordingly.
GBP/USD extended its decline toward the 1.2300 support level, in line with other major currencies, as the dollar gained strength following yesterday's meeting. The outcome of today's Bank of England (BOE) meeting will likely impact the future direction. The next support levels to watch are at 1.2200 and 1.2100, while resistance is anticipated at 1.2400.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2580	1.2450	1.2400	1.2300	1.2200	1.2100

USDJPY

USDJPY Nears Year-to-Date Highs but Faces Caution Ahead of Potential Intervention
The USDJPY pair recently reached a year-to-date peak of approximately 148.45 during the Asian trading session today. However, it has experienced a slight pullback, currently trading around 148.17, with only a minor decrease of less than 0.12% for the day, indicating potential for further appreciation.
This upward momentum is supported by the recent breakthrough of a strong horizontal barrier at 146.50-146.60 and the potential for a daily close above 148.50, which would trigger bullish sentiment. The overall positive outlook for the USDJPY pair is further reinforced by the Federal Reserve's hawkish stance, which continues to boost the US Dollar (USD).
Nonetheless, there is a note of caution due to comments by Japan's Chief Cabinet Secretary Hirokazu Matsuno, who has not ruled out intervention in response to foreign exchange movements, which could support the Japanese Yen (JPY) and limit gains in the USD/JPY pair. Additionally, speculations that the Bank of Japan (BoJ) may move away from its negative interest rate policy contribute to the strength of the JPY.
The bullish momentum of USDJPY remains strong, surpassing the current level at 148, and there is potential for further advancement toward 150. However, it is essential to remain mindful of the possibility of intervention, given our proximity to a historical level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

XAUUSD

Gold Prices React to Hawkish Fed Decision and Strengthening US Dollar
Gold is currently trading around $1,930 as investors shift their attention to upcoming US economic data following the Federal Reserve's decision to maintain interest rates at 5.5%. The Fed's hawkish stance on interest rates, including an expected rate hike in 2023 and revised projections for 2024, has bolstered the US Dollar (USD), with the US Dollar Index (DXY) hitting a six-month high of approximately 105.50.
Higher US Treasury yields, notably the 10-year US Treasury note reaching 4.43%, have contributed to the USD's strength and increased the opportunity cost of holding non-yield-bearing assets like gold. Federal Reserve Chair Jerome Powell reiterated the central bank's commitment to achieving its long-term inflation target of 2% but noted that future policy decisions would be data-driven.
Investors are closely monitoring upcoming US data releases, including Initial Jobless Claims, the Philadelphia Fed Manufacturing Survey, and Existing Home Sales figures, for insights into the US labor market, manufacturing sector, and real estate market.
Gold came back after the dollar and yields went high after the FOMC meeting. Gold's next support will be at 1910 the level followed by the 1900.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1950	1942	1931	1910	1900	1885

DAX40

European Stocks Dip After Fed's Hawkish Tone, Await Central Bank Decisions
On Thursday, European stocks experienced a decline, influenced by the previous night's losses on Wall Street following the US Federal Reserve's indication of maintaining higher interest rates for an extended period. This dip occurred just before rate announcements from several central banks, including the Swiss National Bank, Riksbank, Norges Bank, and the Bank of England.
Sectors related to commodities, such as mining (SXPP) and energy (SXEP), both declined by over 1%, primarily due to weakening metal and crude prices in response to a stronger US dollar.
The Federal Reserve, as widely anticipated, maintained its key interest rates unchanged on Wednesday but raised its economic forecasts, cautioning that the battle against inflation was ongoing. Consequently, the technology-heavy Nasdaq (IXIC) closed 1.5% lower.
Market attention is currently focused on the forthcoming monetary policy decisions from Switzerland, Sweden, Norway, and the UK later in the day. This comes in the wake of the European Central Bank (ECB) recently raising its key interest rate to a record high of 4%.
DAX inside the range of 15500 and 16000 for close to two months without a change. The wider price range encompasses support at 15,500 and resistance at 16,400. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16000	15550	15400	15200

 

[zForex]

EURUSD

US Fed Holds Rates Steady, Signals Hawkish Outlook for Inflation Control
The US Federal Reserve held interest rates steady on Wednesday but struck a hawkish tone, signaling that a further hike is on the cards later this year and that rates will likely stay elevated for a prolonged period as the central bank looks to exert sustained downward pressure on inflation.
Fed Chairman Jerome Powell reiterated that the top priority is restoring price stability and ensuring that inflation won’t rear its head again.
Data from the EU is waiting for today to assess the economic performance of PMIs of the region. The economic activity in the region is deteriorating month after month, and Lagarde mentioned the same thing in the last ECB meeting focusing on the service activity.
EUR/USD is at a solid support level fighting for a breakout. The pair seems more oriented to continue its bearish trend and break toward the next 1.0550 support and historical level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0940	1.0850	1.0750	1.0640	1.0600	1.0530

GBPUSD

Bank of England Pauses Rate Hikes with Lower-Than-Expected Inflation
The Bank of England has stopped its 14 consecutive interest rate hikes as new data reveals inflation is lower than anticipated. After raising rates since December 2021, bringing the primary policy rate to 5.25% in August from 0.1%, the bank voted 5-4 to maintain this rate at its September meeting. They noted signs of the monetary policy's impact on the labor market and the real economy. The bank also unanimously voted to reduce its government bond purchases by £100 billion over the next year to a total of £658 billion. The decision followed lower-than-expected UK inflation figures for August. Despite pausing, Bank of England Governor Andrew Bailey emphasized the need for vigilance. The move signals the bank's cautious approach to balancing inflation control with economic stability. UK GDP contracted by 0.5% in July, and some companies issued profit warnings. The US Federal Reserve also maintained interest rates but hinted at one more hike by year-end. Analysts are speculating whether this pause represents the peak of the interest rate cycle, with concerns about cooling wage growth and a possible recession in developed markets in 2024.
GBP/USD is under significant selloff pressures after yesterday's BoE meeting and breaking a significant level toward the next target of 1.2200, followed by the 1.2100 level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2580	1.2450	1.2400	1.2200	1.2100	1.2000

BoJ Governor Hints at Potential Policy Changes
BoJ Governor Kazuo Ueda, in a post-policy meeting press conference, hinted at potential changes, including ending yield curve control and adjusting the negative interest rate policy to reach a 2% inflation target. Ueda stressed that BoJ's policy-making process remains data-driven.
Inflation hasn't stabilized at 2%, and October's policy decision will factor in variables like government actions such as gasoline subsidies. BoJ stands ready for additional easing given economic uncertainty. Japan's National Consumer Price Index for August was 3.2%, slightly down from 3.3%. The National CPI ex-Fresh Food remained at 3.1%.
The US Dollar Index is around 105.40, influenced by surging US Treasury yields at 4.49% since 2007. Market watchers closely monitor data, including preliminary US S&P Global PMIs, for insights into the US economy. Recent data, like decreasing Initial Jobless Claims (201,000), initially boosted the US Dollar. However, the Philadelphia Fed Manufacturing Survey disappointed, and August's Existing Home Sales declined.
The Federal Reserve maintained interest rates within the range of 5.25% to 5.50%, reiterating its commitment to a 2% inflation target. Fed Chairman Jerome Powell emphasized the possibility of future rate hikes if they prove necessary.
USDJPY's bullish momentum continues stronger with the pair preparing to go beyond the 148.5 level and continue further toward 150 area. But always the probability of intervention should be taken into consideration as we are close to reaching a historical level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
151.50	149.00	148.00	147.30	146.50	146.00

XAUUSD

Gold Prices Inch Higher as Markets Digest Fed's Hawkish Stance
Gold prices rose slightly during the Asian session, bouncing back from the weekly low of $1,913-$1,914, marking the end of a three-day losing streak.
Despite this uptick, there isn't a clear catalyst for the move. The Federal Reserve's hawkish stance, with its readiness to raise interest rates until inflation reaches the 2% target, continues to support the US dollar, which could limit significant gains for gold. The Fed hinted at another 25-basis points rate hike by year-end, and the 'dot-plot' suggests a benchmark rate of 5.1% in 2024, implying fewer rate cuts in the coming year. Additionally, the US Labor Department reported a drop in new unemployment claims to an eight-month low, indicating a tight labor market. These factors enable the Fed to keep rates high, pushing yields in the US fixed-income market higher.
The rise in benchmark yields, with the 10-year treasury yield hitting a 16-year peak, is bolstering the US dollar and restraining gold's upward movement, given its status as a non-yielding asset.
As a result, it's wise to wait for more significant buying momentum before considering bullish positions in XAU/USD. Market participants are now awaiting the release of flash PMI data, which will provide insights into the global economy's health.
The downward pressure on gold is still present, and the price does not appear to have established a clear trend in the short term. The resistance level at the 1947 level and the support level at 1912 are key levels that the price needs to breach in order to determine its direction definitively.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1950	1942	1931	1910	1900	1885

DAX40
European Stocks Decline Following Central Bank Decisions and Economic Data
European stocks declined on Friday, heading for a weekly close marked by central bank decisions, as investors assessed the likelihood of enduring high borrowing costs. The pan-European STOXX 600 index slipped 0.3% by 0745 GMT, following a more than 1% drop in the previous session. The Bank of England (BOE), like the US Federal Reserve, kept rates steady but expressed that its work was not yet complete.
The STOXX 600 initially fell 0.7% but later recovered some losses as preliminary data revealed a slowdown in economic activity in France and Germany, raising hopes of a more accommodative policy stance from the European Central Bank (ECB).
AstraZeneca rose 2% after announcing positive results for its breast cancer drug in a late-stage trial. On the flip side, oil and gas group Vaar Energi fell 7.3% due to a stake sale by Norway's HitecVision. Adevinta saw an 18.4% surge in shares following a takeover proposal led by Permira and Blackstone. Meanwhile, Stellantis, the parent company of Chrysler, faced labor negotiations as a coordinated strike loomed.
Spain's GDP grew by 0.5% in the second quarter, with British retail sales rebounding in August. Investors awaited PMI data from the UK and EU.
DAX inside the range of 15500 and 16000 for close to two months without a change. The wider price range encompasses support at 15,500 and resistance at 16,400. In the short term, DAX went back toward the 15600 level after finding resistance at the 16000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16000	15550	15400	15200

 

[zForex]

The EUR/USD pair has rebounded to around 1.0590 during the Asian trading session on Tuesday, despite European Central Bank (ECB) President Christine Lagarde's comments about maintaining restrictive interest rates. Lagarde also noted expectations of "persistently high" inflation, creating a challenging balancing act for the ECB in addressing inflation without harming the Eurozone's uneven domestic economy.

The US Dollar Index (DXY) remains near 106.00, driven by cautious market sentiment and rising US Treasury yields, reaching 4.55% on the 10-year note, a level last seen in October 2007. The anticipation of sustained high interest rates is supported by the robust US economy and signals from the US Federal Reserve (Fed) for further rate hikes if needed.

Concerns of a federal government shutdown have arisen due to warnings from US President Joe Biden and a senior adviser, particularly regarding potential impacts on low-income women and children's food benefits. The possibility of budget cuts in the Republican-controlled House of Representatives adds uncertainty, as these cuts would require Senate approval.

Investors are closely monitoring key economic data releases on Friday, including the US Core Personal Consumption Expenditures (PCE) Price Index and the Eurozone's Core Harmonized Index of Consumer Prices (HICP), which could influence trading decisions in the EUR/USD pair.

EUR/USD broke the support level from the last week in a clear signal of the power of Dollar. Next target will be around the 1.0530 strong and historical level of support.

Resistance3	Resistance2	Resistance1	Support 1	Support 2	Support 3
1.0750	1.0700	1.0630	1.0600	1.0530	1.0400

Post automatically merged: Sep 26, 2023

The gold price continues its recent decline, falling below the $1,915 mark and hitting a one-week low on Tuesday. This drop is primarily attributed to the strong US Dollar, which has reached its highest level since December 2022 on Monday, exerting downward pressure on XAU/USD. Additionally, the Federal Reserve's hawkish stance, which was emphasized last week when they warned of persistent inflation and the possibility of another interest rate hike by year-end, contributes to the bearish sentiment for gold. Furthermore, most Fed policymakers now anticipate only two rate cuts in 2024, down from the previous projection of four.

Despite these factors, gold finds some support as investors turn cautious due to a weaker tone in equity markets, reflecting a broader risk-off sentiment. Concerns about the Fed maintaining higher rates for an extended period and worries about a housing market crisis in China deter investors from riskier assets and bolster XAU/USD. Nonetheless, a significant rebound in the price of gold remains unlikely as the consensus grows that the Federal Reserve will keep interest rates elevated.

The ongoing strength of US economic data and hawkish comments from influential Fed officials signal a persistent tightening of US monetary policy. Minneapolis Fed President Neel Kashkari even suggested that US rates may need to rise further and remain elevated for an extended period to cool down the economy. This has led to a prolonged selloff in the US fixed-income market, resulting in the yield on the two-year US government bond reaching a 17-year high. Additionally, the benchmark 10-year US Treasury note has surpassed the 4.50% threshold for the first time since 2006, reinforcing the strength of the US Dollar and confirming the bearish outlook for gold, which offers no yield.

Gold continues the selloff and come back going toward the next support at 1900 after an attempt to find a reversal way up. The yield are leading and taking all the attraction.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1950​	1942​	1931​	1910​	1900​	1885​

​

 

[zForex]

The EUR/USD pair is currently in a bearish consolidation phase, trading near 1.0555, its lowest level since March 16. The US Dollar (USD) remains strong, near a 10-month high, as the Federal Reserve (Fed) is expected to maintain higher interest rates, acting as a headwind for EUR/USD. The Fed adopted a more hawkish stance recently, warning of another interest rate hike this year.

Recent statements from Fed officials and the robust US economy support the USD, while global economic concerns and the European Central Bank's dovish rate decision weigh on the EUR/USD pair

The ECB downgraded its 2024 and 2025 CPI and GDP growth forecasts, suggesting fewer rate hikes. Speculations about a GDP contraction in the second half of the year indicate the ECB's policy tightening may have peaked.

Traders await the German GfK Consumer Climate Index and US Durable Goods Orders data. Later, attention shifts to the flash German CPI report, final US GDP figure, and Fed Chair Jerome Powell's speech, followed by the US Core PCE Price Index on Friday.

EUR/USD continue the selloff with the power of Dollar. Next target will be around the 1.0530 strong and historical level of support.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0750	1.0700	1.0630	1.0530	1.0400	1.0200

Today marks the sixth consecutive day of declining prices in the last seven days, pushing the commodity even lower, below the $1,900 mark. This is the lowest level it has reached since August 22, just as the European session begins.

The US Dollar (USD) is continuing its upward trend and has reached a new 10-month high. This surge follows the Federal Reserve's (Fed) hawkish signal that suggests interest rates will remain elevated for an extended period. This development is putting downward pressure on the price of Gold. Additionally, recent statements from Fed officials have increased expectations of at least one more interest rate hike by the end of the year. As a result, the yield on the 10-year US government bond, a benchmark, has reached its highest point since 2007. This situation is strengthening the USD and diverting investment away from Gold, which doesn't offer interest.

Despite a prevailing risk-averse environment, Gold is not receiving any significant support as a safe-haven asset. Recent data from the United States (US) released on Tuesday revealed that the Consumer Confidence Index from the Conference Board has dropped to a four-month low in September. This decline has raised concerns that consumers are feeling the strain of persistent high inflation and rising interest rates. In addition to this, worries about a real estate crisis in China, the world's second-largest economy, are dampening investors' appetite for riskier assets.

Gold experienced a significant drop, falling below the $1900 level and heading towards the $1885 support level. Yields are currently dominating and attracting all the attention.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1931​	1910​	1900​	1885​	1874​	1855​

 

[zForex]

During the early Asian session on Thursday, the EUR/USD pair dipped around 1.0500 due to a stronger US Dollar (USD), favorable US economic data, and higher Treasury yields. At present, EUR/USD is trading near 1.0512, up 0.09% for the day.

The US Dollar Index (DXY) has surged to 106.60, its highest since November, while the 10-year Treasury yield is at 4.618%, a level not seen since 2007.

Weak Eurozone economic data, including a drop in German Consumer Sentiment to -26.5 in October, adds to the Euro's woes. Spain and Germany will release preliminary September Consumer Price Index (CPI) figures, with Spanish inflation expected to rise and German inflation likely to fall. These inflation figures are vital for monetary policy expectations and market impact.

The USD strengthened after positive US Durable Goods Orders data in August and amidst concerns over higher interest rates versus potential US government shutdown risks. Traders await Fed Chair Jerome Powell's address for market cues.

Key releases include Spanish and German inflation data, Eurozone's Consumer and Business Confidence, US Jobless Claims, GDP revision, and Pending Home Sales. The focus turns to the US Core PCE Price Index on Friday, expected to ease from 4.2% to 3.9%, influencing the EUR/USD

EUR/USD went to its support zone and waiting for today Data to find more direction. Th general outlook is super bearish and the breakout of the actual support may lead to more selloff.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0750	1.0700	1.0630	1.0530	1.0400	1.0200

Thursday, the price of gold (XAU/USD) is facing downward pressure due to a stronger US Dollar (USD) and higher Treasury yields. Gold is currently trading at around $1,876, with a modest 0.11% gain for the day.

Simultaneously, the US Dollar Index (DXY), which measures the USD against other currencies, has surged above 106.65, its highest level since November. Furthermore, the 10-year Treasury yield is at 4.60%, its highest since 2007.

A positive turn came from the US Census Bureau's report on Wednesday, showing that Durable Goods Orders for August increased by 0.2% MoM, surpassing expectations of a 0.5% decline. This, along with other positive economic data, boosted the US Dollar and put pressure on gold.

Market sentiment is cautious, considering the possibility of a government shutdown in the US and expectations for higher interest rates. However, investors are also watching for Federal Reserve Chair Jerome Powell's speech, which could potentially influence the USD and gold prices.

Thursday will see the release of US weekly Jobless Claims, GDP revisions, Pending Home Sales data, and Friday will bring the Core Personal Consumption Expenditure Price Index. Traders will closely analyze these events for opportunities in the gold market.

Gold reached its 1875 support level continuing the make selloff direction. As Dollar and yields leading the market Gold will not have a chance to make a possible reversal up.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1931​	1910​	1900​	1885​	1874​	1855​

 

[zForex]

EURUSD

Euro Gains Strength as US Congress Averts Shutdown and Manufacturing PMI Awaited
EUR/USD showed early strength, climbing towards 1.0600 during the European morning following a tightly-ranging Asian session. Over the weekend, the US Congress approved a short-term funding bill, temporarily averting a government shutdown by extending the previous budget for 45 days, securing government funding through November 17. This development appears to have improved market sentiment on Monday. Presently, US stock index futures are surging between 0.5% and 0.8%. If US stocks gain momentum after the market opens, the US Dollar (USD) could lose its appeal as a safe haven, potentially paving the way for a sustained EUR/USD recovery.
The ISM Manufacturing PMI for September is expected to indicate ongoing contraction in US manufacturing economic activity. A reading above 50 could initially boost the USD.
Federal Reserve (Fed) Chairman Jerome Powell is slated to speak later today. Markets are pricing in a less than 60% chance of the Fed maintaining its policy rate this year. Powell, however, is unlikely to offer strong guidance ahead of Friday's jobs report.
Eurozone inflation for September plummeted to 4.3%, the lowest since October 2021, as per flash data. Notably, the European Central Bank had raised interest rates to a record level the previous month, but economists and investors now speculate that these rates may have peaked.
EUR/USD has found support at the 1.0500 level, awaiting direction from DXY, which has also found support after a correction, indicating a possible continuation upward for the dollar. The long-term view remains bearish for EUR/USD, and a breakout of the 1.0500 level will be the next awaited scenario if there is no change in the current macroeconomic readings.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0800	1.0700	1.0650	1.0500	1.0400	1.0320

GBPUSD

GBP/USD Under Selling Pressure as USD Strengthens
The GBP/USD pair is under selling pressure, holding at approximately 1.2180 as the USD gains strength. In August, the US Core PCE Price Index met expectations, rising by 3.9%, aligning with the prior figure of 4.3%. Attention now shifts to the US ISM Manufacturing PMI for September and an upcoming speech by Fed Chair Powell.
The US Bureau of Economic Analysis reported that the PCE Price Index increased by 3.5% YoY in August, meeting market expectations. Meanwhile, the Core PCE Price Index, a crucial inflation indicator for the Federal Reserve, also grew by 3.9%, as anticipated.
Federal Reserve officials, including John Williams and Thomas Barkin, have hinted at the Fed nearing the peak for the federal funds rate and emphasizing the need for a restrictive policy stance. Powell's upcoming speech may influence the USD's direction.
In the UK, BoE policymakers have discussed the possibility of rate adjustments, but market expectations lean toward the BoE maintaining its current monetary policy, which weighs on the GBP.
With no significant UK economic data this week, GBP/USD remains influenced by USD dynamics. Key events to watch include the US ISM Manufacturing PMI for September and Powell's speech. Later in the week, the US ADP Employment Change and ISM Services PMI for September will be released, with a focus on the US Nonfarm Payrolls report on Friday.
GBP/USD continues hovering around its support at 1.2200 right now. The bearish outlook persists, and if the dollar continues to rise, this could lead to further selloff in GBP/USD.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2500	1.2400	1.2290	1.2110	1.2000	1.1900

USDJPY

USD/JPY Near 11-Month High, Awaits US ISM PMI Ahead of Intervention Concerns
The USD/JPY pair currently trades at 149.70, slightly below its recent 11-month peak of 149.82 during early European trading on Monday. This dip is attributed to the strengthening US Dollar (USD), fueled by expectations of prolonged US monetary policy support. Investors closely monitor the impending US ISM PMI report while exercising caution due to potential currency interventions by Japanese authorities, which could dampen bullish sentiments.
The US Dollar's vigor is evident in the US Dollar Index (DXY), reaching 106.28, its highest since the previous November. Federal Reserve (Fed) officials' remarks suggest an approaching peak for the federal funds rate and a need for a restrictive policy stance for some time. August's inflation data met expectations, with the PCE Price Index up 3.5% YoY and the Core PCE Price Index up 3.9% YoY but falling short of monthly forecasts.
Investors eagerly await Fed Chair Jerome Powell's upcoming speech, as hawkish comments could further bolster the USD/JPY pair. However, concerns over FX intervention by Japan persist, particularly near the psychologically vital 150.00 level, where the Bank of Japan (BoJ) intervened last year.
Japanese Finance Minister Shunichi Suzuki and BoJ Governor Kazuo Ueda both express caution regarding currency movements, emphasizing the BoJ's commitment to its ultra-loose monetary policy. Market focus in the coming days will center on key US economic data releases, including the US ISM Manufacturing PMI, ADP Employment Change, and ISM Services PMI, with the US Nonfarm Payrolls report on Friday holding the potential to steer the USD/JPY pair decisively.
USDJPY's bullish momentum continues stronger with the pair close to touching the critical level at 150. The intervention possibility may lead to a selloff after touching these historical levels.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
155.00	152.70	151.50	148.00	146.50	146.00

Gold
Gold Extends Losses as US Dollar Gains Strength Despite Averted Shutdown
The gold price is on a six-day losing streak as the US Dollar seeks increased demand despite the United States avoiding a government shutdown. On Saturday, the US Congress passed a stopgap funding bill with strong Democratic support to prevent the fourth partial government shutdown in a decade.
China's business PMIs over the weekend were mixed, affecting investor sentiment during the Chinese Golden Week holiday with light trading. The Caixin/S&P Global manufacturing PMI fell to 50.6 in September from 51.0 the previous month, missing forecasts of 51.2. The services index also dropped to 50.2 in September compared to 51.8 in August, marking its lowest reading since December. However, official data from China's National Bureau of Statistics (NBS) showed a better-than-expected Manufacturing PMI at 50.2 and Non-Manufacturing PMI at 51.7 for September.
Furthermore, persistent hawkish rhetoric from the US Federal Reserve (Fed) and a strong US economy are keeping the US Dollar and US Treasury bond yields strong, while gold prices remain at seven-month lows.
Next, attention turns to crucial US job data, starting with JOLTS Job Openings on Tuesday, which will provide insights into the labor market as inflation cools down. In August, the Fed's preferred inflation measure, the Core Personal Consumption Expenditures (PCE) - Price Index, softened to 0.1% MoM and 3.9% YoY.
Meanwhile, investors will keep an eye on the US ISM Manufacturing PMI and a speech by Fed Chair Jerome Powell later in the day for hints on the economy and interest rate outlook, which could significantly impact the valuation of the US Dollar and the movement of gold prices.
Gold continues the selloff and goes further toward the 1800 next strong support level. Yields and the dollar continue up after some correction which may lead to more selloff on gold.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1900	1985	1874	1857	1833	1800

 

[zForex]

EUR/USD Decline Extends Over 100 Pips Amid Strong US Dollar and Global Uncertainty
The decline in EUR/USD exceeded 100 pips on Monday, resuming the downward trend that began during Friday's American session. The pair's weakness persisted despite a brief rebound.
The primary driver behind the EUR/USD decline remains the strong US Dollar, fueled by a combination of risk-off sentiment in global markets and rising yields. The US Dollar Index (DXY) has risen for six of the last seven days, currently hovering just below 107.00. Mixed results were seen on Wall Street after a relief rally due to the US lawmakers' agreement to avoid a government shutdown. Concurrently, US yields remained strong, with the 10-year yield reaching its highest point since 2007 at 4.70%. Federal Reserve officials' remarks about the economy's resilience further contributed to the dollar's strength.
US data exceeded expectations, with the ISM Manufacturing PMI at 49 in September, surpassing the market consensus of 47.7. Upcoming reports include the JOLTS report on Tuesday and the ADP report on Wednesday. The key labor market data, Nonfarm Payrolls, is scheduled for release on Friday. Weaker data could weaken the US Dollar, while stronger data would bolster the dollar's prospects, reinforcing expectations of a Fed rate hike.
In the Eurozone, the unemployment rate dropped as expected from 6.5% to 6.4% in August. The final reading of the Manufacturing PMI for the region remained at 43.4. No significant Eurozone data is expected on Tuesday.
EUR/USD continues the selloff direction, with increasing pressure from the strength of the dollar, pushing for a breakout below the current support area around the 1.0500 region. The next levels to watch for are 1.0400, followed by 1.0200.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0700	1.0650	1.0600	1.0500	1.0400	1.0200

GBPUSD

GBP/USD Near Recent Low Below 1.2100 as Bank of England Pauses Rate Hikes
The GBP/USD pair is trading near its recent low, below 1.2100, after the Bank of England surprised markets by pausing its interest rate hikes. This move, the first of its kind since December 2021, has weakened the British Pound (GBP) against the strong US Dollar (USD). The USD Index (DXY), which tracks the USD against other currencies, has reached its highest level since November 2022, thanks to the belief that the Federal Reserve will continue its hawkish stance and possibly raise rates again by the end of the year.
Moreover, concerns about rising borrowing costs and a generally weaker risk sentiment have boosted the USD's safe-haven status, putting pressure on the GBP/USD pair. There are no significant UK economic releases on the horizon, leaving the pair sensitive to USD dynamics, including the upcoming US JOLTS Job Openings data and the US NFP report due later in the week.
GBP/USD continues to experience selling pressure, finding support at the 1.2100 level. The bearish outlook persists and could potentially drive the price towards the historical level of 1.1800, a level not seen since March 23 of this year.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2400	1.2290	1.2200	1.2110	1.2000	1.1900

USD/JPY Approaches 11-Month Peak as BoJ Maintains Loose Monetary Policy
USD/JPY is trading just below its 11-month peak at 149.80 in early European trading. The Bank of Japan (BoJ) recently carried out an unscheduled bond purchase, reaffirming its commitment to a loose monetary policy to control rising yields in Japanese government bonds.
BoJ Governor Kazuo Ueda emphasized the central bank's readiness to implement further easing measures if necessary, clarifying misconceptions about a "quiet exit" from monetary easing.
The US Dollar Index (DXY) stands at 107.10, an 11-month high, driven by rising US Treasury yields, which have reached their highest level since 2007 at 4.68%. Concerns over the US Federal Reserve's interest rate trajectory are also boosting the USD's safe-haven appeal.
Market attention is on upcoming US employment data, including the ADP report on Wednesday and Nonfarm Payrolls on Friday.
USDJPY's bullish momentum continues stronger with the pair close to touching the critical level at 150. The intervention possibility may lead to a selloff after touching this historical level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
155.00	152.70	151.50	148.00	146.50	146.00

Gold Prices Extend 7-Day Decline to Reach 7-Month Low
Gold prices have continued their seven-day downward trend, hitting a low of $1,820, the lowest since March 9. This decline is primarily attributed to the Federal Reserve's hawkish stance on interest rates, which has driven US Treasury bond yields to historic highs and strengthened the US Dollar. Cleveland Fed President Loretta Mester's comments about inflation risks further solidified expectations of rate hikes, leading investors to favor the US Dollar over gold.
Despite a generally weaker risk sentiment in the market, which usually supports gold's safe status, the precious metal failed to find support. Mixed Chinese PMI data and the passage of a US stopgap funding bill had only a short-lived impact, as concerns about a deeper economic downturn dominated.
Gold continues the selloff and goes further toward the 1800 next strong support level. Yields and the dollar continue up after some correction which may lead to more selloff on gold.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1971	1950	1825	1800	1760	1725

 

[zForex]

EURUSD

The US Dollar Remains Strong with Positive Data and Cautious Market Sentiment
The US Dollar remains strong, supported by positive US data and cautious market sentiment. The EUR/USD pair hit multi-month lows due to the stronger US Dollar, buoyed by strong US labor market data. The Eurozone will report wholesale inflation and retail sales data, while the US awaits ADP employment figures.
The US JOLTS Job Opening report surpassed expectations, pushing the 10-year Treasury bond yield to 4.80%, reflecting a strong economy. More job data is expected in the coming days, which could further boost the dollar's rally.
The US Dollar's strength is also fueled by market expectations of prolonged higher interest rates from the Federal Reserve and deteriorating market sentiment.
Eurozone data to be released includes the Producer Price Index, Retail Sales, and final HICP PMIs for August. Market participants believe the European Central Bank has reached its terminal rate.
In the Eurozone, the unemployment rate dropped as expected from 6.5% to 6.4% in August. The final reading of the Manufacturing PMI for the region remained at 43.4. No significant Eurozone data is expected on Tuesday.
EUR/USD is still in the bearish direction, with increasing pressure from the strength of the dollar even if the price seems muted for yesterday and today. Pushing for a breakout below the current support area around the 1.0500 region. The next levels to watch for are 1.0400, followed by 1.0200.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0700	1.0650	1.0600	1.0500	1.0400	1.0200

GBPUSD
The GBP/USD Pair Remains Within a Narrow Range
The GBP/USD pair remains within a narrow range close to its lowest level since March, with several factors influencing its movement. The US Dollar (USD) is near a 10-month high due to expectations of more Fed rate hikes and rising US bond yields, making it a headwind for the GBP/USD pair. The Federal Reserve's hawkish stance, supported by several Fed officials advocating for at least one more rate hike by year-end, contributes to this USD strength. Additionally, strong economic data, such as the JOLTS report showing a surge in job openings, raises concerns about wage inflation and pushes US government bond yields higher.
The US fixed-income market's ongoing selloff also dampens investor appetite for riskier assets, further benefiting the USD. On the other hand, the Bank of England's surprising decision to keep rates unchanged in September continues to weigh on the British Pound (GBP), limiting any potential gains for the GBP/USD pair.
GBP/USD continues to experience selling pressure, finding support at the 1.2100 level. The bearish outlook persists and could potentially drive the price towards the historical level of 1.1800, a level not seen since March 23 of this year. The prices from yesterday and today show a neutral movement waiting for data.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2400	1.2290	1.2200	1.2110	1.2000	1.1900

USDJPY

Surge in Japanese and US Bond Yields Spurs USD/JPY Volatility and BOJ Speculations
On Wednesday, the 10-year Japanese Government Bond (JGB) yield reached 0.8%, its highest level since 2013. This has increased pressure on the Bank of Japan (BoJ) to manage its yield-curve cap and consider ending its negative interest rate policy. Concurrently, the US Treasury yield has risen alongside the strengthening US Dollar (USD), with the 10-year yield reaching 4.865%, its highest point since 2007.
Late Tuesday, the USD/JPY pair experienced a sharp decline of nearly 300 pips from the 150.00 level due to rumors of FX intervention by Japanese authorities. However, Japan's top currency diplomat, Masato Kanda, clarified on Wednesday that any intervention would target volatility rather than specific forex levels. He also noted that it's standard for authorities not to confirm whether they have intervened or not.
In other economic news, the number of job openings for August stood at 9.6 million, up from the previous revised figure of 8.9 million, according to the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday.
Additionally, speculations about Japanese authorities intervening in the FX market continue to capture traders' attention. The upcoming US Nonfarm Payrolls data on Friday will also be closely watched by traders for potential trading opportunities in the USD/JPY pair.
USDJPY volatility increased after touching the 15.00 level as expected and a movement of 300 pips was seen. The market will continue observing any possibility of BOJ intervention. 146.5 is the next support for the pair.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
155.00	152.70	151.50	148.00	146.50	146.00

GOLD

Gold Remains Under Pressure as Fed Hawkishness and Strong Dollar Persist
Gold (XAU/USD) continues to struggle and remains near a seven-month low due to several factors. The hawkish outlook from the Federal Reserve, rising US bond yields, and a strong US Dollar (USD) have all contributed to the metal's decline over the past two weeks. Investors are closely watching upcoming US economic reports, including the ADP report and ISM Services PMI, for potential trading opportunities, with a keen eye on the US NFP report on Friday.
Recent comments from Fed officials support the expectation of at least one more interest rate hike this year to combat inflation. The August JOLTS report revealed a significant increase in job openings, adding to concerns about wage inflation and the need for the Fed to continue tightening its monetary policy.
The persistent inflationary pressures might lead the Fed to maintain its hawkish stance and raise rates at its next meeting in November. This, along with political turmoil and looming recession risks, has created a risk-off environment that typically benefits safe-haven assets like gold.
Gold found support around the 1920 level where the down parallel of the down channel. A possible rebound may accrue after 7 consecutive losing days. The next resistance will be at the 1860 level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1971	1960	1825	1800	1760	1725

 

[zForex]

Euro Maintains 1.05 Level Following Dollar Correction
The euro is attempting to maintain the 1.05 level amid a mild correction phase following recent pressures. Yesterday's labor data, a precursor to the upcoming new jobs data, showed a significant pullback, acting as a catalyst and curbing the US dollar's strong momentum.
Meanwhile, US debt securities saw a slight decline in yields, but this isn't sufficient to trigger a significant shift in the current environment. President Lagarde's recent speech reiterated the importance of keeping key interest rates at their current levels to achieve the European Central Bank's inflation targets.
In the near future, we are not anticipating any major developments from the European Central Bank, as attention has shifted to the Federal Reserve's intentions. The exchange rate remains sensitive to the Fed's reasoning.
Today's focus remains on tomorrow's announcement of US unemployment and new jobs data, which traditionally generates intense volatility and can alter the exchange rate picture significantly if there are surprises.
Additionally, the market keeps a close eye on US weekly initial job claims, especially during the afternoon.
The recent strengthening of the dollar, driven by the divergent pace of the US economy, high US government debt yields, and international stock market turmoil, experienced a minor correction, as anticipated.
EUR/USD keeps the bearish outlook, and the actual correction is still limited and doesn’t confirm any reversal. Pushing for a breakout below the current support area around the 1.0500 region. The next levels to watch for are 1.0400, followed by 1.0200, and if a reversal is confirmed, the next resistance area will be at 1.0600.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0700	1.0650	1.0600	1.0500	1.0400	1.0200

Sterling's Recovery Halted by UK Economic Challenges
The British Pound (GBP) has been on the road to recovery thanks to increased demand for assets with higher risk, but its ability to strengthen further is limited. This limitation is due to the impending slowdown in the United Kingdom's economy, which is being impacted by factors such as fragile economic activities, potential inflationary shocks, and weakening demand.
Even though there has been an improvement in the UK Services PMI, economic data still indicates a contraction as it remains below the critical 50.0 threshold. The UK economy is struggling to mitigate the effects of rising interest rates by the Bank of England (BoE), increasing oil prices, and supply chain disruptions stemming from the Russia-Ukraine conflict.
GBP/USD is struggling to make a comeback as the dollar weakness is helping but the outlook is still bearish. The bearish outlook persists and could potentially drive the price towards the historical level of 1.1800, a level not seen since March 23 of this year. The price from yesterday and today shows a neutral movement waiting for data.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2400	1.2290	1.2200	1.2110	1.2000	1.1900

USD/JPY Faces Selling Pressure Amidst Speculation and Economic Data
The USD/JPY pair faced selling pressure and dropped below 148.00 during the Asian session, marking the second negative move in three days. Speculation about Japanese authorities intervening in the FX market and the practice of Gotobi payments contributed to this decline. The US Dollar retreated from an 11-month high and added to the downward pressure on USD/JPY due to disappointing US ADP data and a moderation in the US services sector, raising doubts about further Fed rate hikes. However, some caution is advised as Fed officials have supported further policy tightening, and markets expect higher rates, potentially supporting US bond yields and the Greenback. Investors are also awaiting the release of the NFP report on Friday. Weekly Initial Jobless Claims data and US bond yields may provide short-term trading opportunities.
USDJPY volatility increased after the touching the 15.00 level as expected and a movement of 300 pips was seen. The market will continue observing any possibility of BOJ intervention. 146.5 is the next support for the pair.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
155.00	152.70	151.50	148.00	146.50	146.00

Gold Price Waits for Clarity
Gold price struggles to gain momentum despite a weaker USD and lower US bond yields. Traders remain cautious ahead of the US NFP report on Friday.
The price of gold (XAU/USD) made a slight recovery attempt during the early European session but faced resistance near $1,830. This modest uptick followed a decline in 10-year US Treasury bond yields from a 16-year high, which led to a USD pullback. However, traders are hesitant to go bullish as they await clarity on the Federal Reserve's next move.
Recent economic reports have indicated a cooling US labor market and a moderation in the services sector, which may influence the Fed's rate hike decisions. Still, solid economic growth expectations for Q3 and comments from Fed officials hinting at further policy tightening have kept US bond yields elevated. This has limited the USD's decline and, consequently, capped gold's upside potential.
Traders are also staying on the sidelines ahead of the US NFP report on Friday, which will impact Fed rate hike expectations and USD demand. Additionally, the US Weekly Initial Jobless Claims data will be monitored for short-term opportunities later on Thursday.
From a technical standpoint, gold has been hovering around the 1820 area for the second day, awaiting direction that seems like it will not come until tomorrow after the NFP data. Additionally, a further selloff of the dollar and a rebound in yields could provide support.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1971	1960	1825	1800	1760	1725

 

[zForex]

EURUSD

The Focus on US Nonfarm Payrolls: September Expectations and Market Impact
US Nonfarm Payrolls for September are expected to increase by 170K, slightly lower than July's 187K. This data release is significant for the US economy and financial markets. It's anticipated to bring increased volatility to the US Dollar, especially when combined with Average Hourly Earnings data. The Unemployment Rate is also projected to dip slightly to 3.7% in September.
The recent unexpected rise in US job openings to 9.610 million in August has reinforced expectations of a Fed interest rate hike this quarter, reflecting a tight labor market. This supports the notion of the Fed continuing to tighten monetary policy.
Following the September policy meeting, some Fed policymakers endorsed the idea of "higher rates for longer" due to the US economy's resilience. This led to the US Dollar Index hitting an 11-month high above 107.00 and US Treasury bond yields nearing 16-year highs.
However, the odds of a November Fed rate hike decreased from 31% to 23% following disappointing US labor market data, resulting in a correction in the US Dollar and bond yields.
Nonfarm Payrolls play a pivotal role in the US jobs report, influencing Federal Reserve policy decisions by assessing progress towards full employment and 2% inflation. These figures tend to correlate positively with the US Dollar and have a negative correlation with gold prices due to the impact on interest rates and the strength of the USD. Nevertheless, market reactions can be unpredictable, influenced by other components of the jobs report in exceptional circumstances like major economic crises.
EUR/USD is currently in an accumulation phase, possibly awaiting a rebound today. If a reversal is confirmed, the next resistance area will be at 1.0600. In the event of a breakdown, the next support level will be at 1.0400.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0700	1.0650	1.0600	1.0500	1.0400	1.0200

GBPUSD

The Pound's Challenge During Economic Uncertainty
The Pound Sterling (GBP) is facing challenges as it hovers around 1.2196 due to uncertainty regarding the UK's economic outlook. September's PMI data indicated vulnerabilities in the UK economy, with firms hesitating to use their full capacity and reducing hiring due to higher interest rates imposed by the Bank of England (BoE), which have dampened demand.
Investors are not expecting a swift recovery in UK demand as the BoE plans to maintain higher interest rates for an extended period to ensure price stability. BoE Deputy Governor Ben Broadbent predicts that inflation will decrease to 2% within two years, as the restrictive monetary policy has negatively affected the labor market and economic prospects.
GBP/USD is experiencing a similar price accumulation, with direction pending confirmation from NFP data. The next resistance level to watch is at 1.2300, and the support level is at 1.0050.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2400	1.2300	1.2200	1.2110	1.2000	1.1900

USDJPY

USD/JPY Trading Higher with the Speculation on BoJ Policy Shift
USD/JPY is trading higher at 148.90, supported by a rebound in the US Dollar and improved US Treasury yields.
Former Fed Vice Chair Clarida anticipates the Bank of Japan (BoJ) adjusting its policy rate to 0% by early 2024, signaling a shift in the BoJ's approach under new leadership. Speculation about Japanese intervention in the foreign exchange market could continue to affect USD/JPY.
BoJ Governor Kazuo Ueda emphasizes the stimulative impact of the current policy framework.
US Treasury yields remain near multi-year highs, with the 10-year yield above 4.70%, amid caution due to the Fed's hawkish stance on interest rates. US Initial Jobless Claims rise to 207K, slightly surpassing expectations. US Challenger Job Cuts decreased significantly to 47.457K in September.
Upcoming US Nonfarm Payrolls and Average Hourly Earnings data may impact the USD and bond market volatility.
USDJPY continues hovering around the 150.00 area with a small correction. The pair wait for direction from today's data or an intervention from BOJ to help. The next support level is at 146.80 followed by 144.80.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
155.00	152.70	151.50	148.00	146.50	146.00

Gold Prices Consolidate Ahead of US Nonfarm Payrolls Report
Gold prices struggled to gain traction as they reached $1,825 on Friday, facing headwinds from expectations of more Fed rate hikes in 2023, rising US bond yields, and a strong USD. Traders are eagerly awaiting the release of the US Nonfarm Payrolls (NFP) report, which will likely provide a new direction for gold.
The NFP report is crucial for shaping expectations about the Fed's future rate-hike decisions. The Fed's hawkish stance, supported by robust US economic data, continues to push US bond yields higher, which, in turn, bolsters the US Dollar and limits gold's gains.
Market participants believe the Fed will maintain its hawkish stance due to strong economic data. If the NFP report shows further job growth, it could lead to higher wages and inflation, potentially prompting the Fed to keep rates elevated. This scenario would favor the USD and weigh on gold prices.
From a technical standpoint, the gold price action appears subdued, as it is consolidating in preparation for a potential reversal after reaching a significant historical level. The next resistance level is at 1860-50.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1971	1960	1825	1800	1760	1725

 

[zForex]

Middle East Geopolitical Turmoil Sparks Market Uncertainty and Oil Price Surge

European markets opened on a downturn on Monday, as investors evaluated the repercussions of recent Middle East geopolitical turmoil. This turmoil stemmed from a substantial attack by the Palestinian militant group Hamas on Israel over the weekend, resulting in hundreds of casualties. Consequently, oil prices surged by 4% overnight, while U.S. stock futures dipped early Monday. This escalation of violence introduced additional geopolitical risk to already fragile markets grappling with inflation and rising interest rates.
The Israeli-Palestinian conflict took a significant turn on Saturday when Hamas launched an unexpected invasion, catching Israel off guard. This sudden escalation in geopolitical tensions may lead to an immediate surge in oil prices, according to some experts. Additionally, it could contribute to further market volatility, which has been a cause for concern due to persistent inflation and elevated interest rates.
Despite the regional instability, analysts anticipate that its impact on financial markets will be short-lived. Notably, major stock indices in the Middle East, especially Israel's TA-35 stock index, experienced declines, with the latter witnessing its most substantial loss in over three years. However, it rebounded by 0.5% on Monday following a sharp 6.5% drop in the previous session.
Meanwhile, Metro Bank's shares saw a remarkable 20% increase as the UK lender secured a £925 million ($1.1 billion) financing package. This move involved Colombian financier Jaime Gilinski obtaining a controlling interest in the bank, offering much-needed relief to the institution after a tumultuous week.
In terms of upcoming events for the week, investors will closely monitor releases related to China's money supply and new yuan loans, speeches by central bank officials, and economic data releases from various countries.




EUR/USD Weakens with USD Strength and Central Bank Speculations
The euro weakened against the US Dollar, with EUR/USD dropping to around 1.0530 after three consecutive sessions of gains. This comes as the USD Index (DXY) regained strength, reaching 106.30 due to global risk-off sentiment at the start of the week.
Investors anticipate that the Federal Reserve (Fed) will maintain current interest rates for the rest of the year, while there is speculation about the European Central Bank (ECB) pausing its policy despite inflation surpassing its target and concerns about a potential recession or stagflation in Europe.
In Germany, Industrial Production contracted by 0.2% in August.
The euro's recent weakness is attributed to several factors, including the expectation of central bank actions and economic data. Strong economic data and a positive Trade Balance can boost the euro, while weak data can lead to its decline.
EUR/USD is currently in an accumulation phase, possibly awaiting a rebound. If a reversal is confirmed, the next resistance area will be at 1.0600. In the event of a breakdown, the next support level will be at 1.0400.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0700	1.0650	1.0600	1.0500	1.0400	1.0200

GBP/USD Faces Sell-Off Due to Israel-Hamas Conflict
The Pound Sterling (GBP) faced a sell-off due to the Israel-Hamas conflict, causing a drop in the GBP/USD pair. The Federal Reserve's expected interest rate hike and the Bank of England's reluctance to change interest rates to avoid a UK recession added to the negative sentiment.
The UK's economic prospects are weakening as inflation remains high, leading to reduced demand and labor demand. The Bank of England plans to maintain high-interest rates until inflation reaches 2%, contributing to the vulnerability of the situation.
In addition to the Israel-Hamas conflict, the global market mood has been downbeat.
Higher interest rates have negatively affected the UK's Manufacturing and Construction PMI, with the Construction PMI falling to 45.0 in September. Investors are also keeping an eye on the UK's Financial Policy Committee (FPC) meeting minutes and factor activity data for August.
GBP/USD is experiencing a similar price accumulation as the dollar will be dictating direction. The next resistance level to watch is at 1.2300, and the support level is at 1.0050.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2400	1.2300	1.2200	1.2110	1.2000	1.1900

USD/JPY Faces Challenges with Geopolitical Tensions
The USD/JPY pair had a challenging start to the week, opening with a bearish gap and struggling to maintain positive momentum. Geopolitical tensions in the Middle East favored the Japanese Yen (JPY), putting downward pressure on the pair. The US Dollar (USD) also underperformed, failing to provide support due to concerns about potential intervention.
Over the weekend, conflict escalated in the Middle East as Hamas initiated attacks on Israeli towns, leading to Israeli airstrikes and a declaration of war against Gaza. This negatively impacted global risk sentiment, causing investors to seek refuge in the JPY. The USD's lackluster performance further contributed to the USD/JPY's difficulties.
Although the US Non-Farm Payrolls (NFP) data for September showed strong job growth, wage growth remained moderate, which eased inflation concerns and limited enthusiasm for the USD against the JPY. Traders awaited the release of the FOMC monetary policy meeting minutes and US consumer inflation figures later in the week.
Speculation about Japanese intervention in the foreign exchange market to support the JPY acted as a ceiling on USD/JPY gains. While there were suggestions of possible intervention, some believed it unlikely given current economic fundamentals.
Given this mixed backdrop, caution was advised for traders, as the USD/JPY pair could remain in a consolidative phase in the absence of significant market-moving economic data on Monday.
USDJPY continues hovering around the 150.00 area with a minor correction. The next support level is at 146.80, followed by 144.80.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
155.00	152.70	151.50	148.00	146.50	146.00

Gold Prices Rally to $1,850
Gold prices have surged to around $1,850 per troy ounce, primarily due to increasing geopolitical tensions, notably the ongoing Palestine-Israel conflict. Investors turn to gold during such uncertainties. The US Dollar Index (DXY) has rebounded to 106.20, thanks to robust US Nonfarm Payrolls data, revealing a significant job increase of 336,000 in September, although Average Hourly Earnings slightly fell short of expectations at 0.2%, with an annual decrease of 4.2%.
US Treasury yields have risen, reaching 4.80%, reflecting expectations of prolonged higher interest rates by the Federal Reserve, nearing levels not seen since 2007.
Investors focus shifts to the upcoming International Monetary Fund (IMF) meeting, where strategies for stabilizing exchange rates and promoting development will be discussed. Additionally, the US Core Producer Price Index, expected later in the week, will provide crucial insights into inflation trends and the US economic landscape. These factors collectively shape the current global economic landscape, impacting various financial markets.
From a technical standpoint, gold worked as a safe haven and reached the 1850 area. The next resistance will be at the 1875 level while support will always be at 1810.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1985	1975	1850	18100	1760	1725

.

 

[zForex]

The Palestinian-Israeli War Had a Significant Impact on Global Financial Markets, Causing Them to Experience Turbulence And Uncertainty

Yesterday, the macroeconomic calendar in the market remained calm. However, the statements made by Federal Reserve (Fed) authorities Logan, Barr, and Jefferson were carefully monitored. Fed official Logan's comments on the rising bond yields attracted significant attention. Logan pointed out that the increasing U.S. bond yields might facilitate the process of tightening monetary policy, potentially eliminating the need for additional interest rate hikes by the Fed. Furthermore, Logan emphasized the current high levels of inflation, underscoring the influence of a robust labor market on inflation dynamics. He suggested that to reach the Fed's 2% inflation target, it is compulsory to maintain a course of tightening policies.

On the other hand, on Saturday, Hamas forces launched a surprise attack from the Gaza Strip into southern Israel, resulting in over 700 Israeli casualties, predominantly civilians. Around 260 people attending a music festival near Gaza's northern border were killed by Hamas militants. In retaliation, approximately 400 Palestinians lost their lives in Israeli counterattacks. Israel reclaimed control of areas previously held by Hamas and recaptured numerous territories. A protracted military operation in Gaza, potentially lasting for months, is anticipated.

Following the rise in tension in the Middle East, oil prices rose by up to 5%, and gained some of last week's losses. With the war risk returning to the markets, the barrel price of WTI crude oil exceeded 86 dollars. The price of Brent crude oil increased by 4% and found buyers at $88.30. It is worth reminding that Brent and WTI lost value last week due to the slowdown in global growth and the expectation of higher interest rates. Additionally, the yellow metal (gold), reacting with an increase to the possible war news, regained last week's losses and closed Monday at 1961 levels per ounce.

Today, in the U.S., the NFIB small business optimism data will be followed. It should be remembered that the August data was at 91.3 with a monthly decrease of 0.6 points.




EURUSD Responds to Dollar Index and Yields

Attention is still focused on the Middle East. Thus, the Dollar Index (DXY) had a positive start to the week. In other words, the Palestinian-Israeli war is affecting market sentiment.

Yesterday, the euro touched the lowest level of 1.0550 due to the recovery in the DXY. However, as the market stabilized and U.S. yields kept falling, the momentum turned in EUR’s favor and closed the day 1.0566 level.

Today, the parity is hovering around the 1.0562 level. On the upside, the parity could encounter resistance at the 1.0600 level. If that level is broken, we will follow 1.0650 as a firmer resistance.

If it moves downward, If the level is decisively broken, it could push the pair down to around 1.0500, and then possibly to 1.0450, which is close to last week's low at 1.0448.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0700	1.0650	1.0600	1.0500	1.0450	1.0380

Sterling Holds Steady Around 1.2200 with Limited DXY Demand

The British pound has maintained relative stability, hovering around the mid-1.2200 level. This stability can be attributed to a lack of significant demand for the US Dollar Index (DXY). In the previous trading session, the GBP exhibited a more confined trading range, fluctuating between 1.2166 and 1.2245. Notably, there seems to be a subtle upward momentum in play, albeit with a degree of caution.

Looking ahead to today's trading session, there is a possibility that the GBP may surpass the 1.2270 mark and potentially reach levels around 1.2305. However, it is less likely to breach the significant resistance point at 1.2350. For traders and investors, it's essential to keep an eye on the support levels, which currently stand at 1.2170, followed by 1.2105. These levels may provide guidance in assessing potential price movements and trading strategies in the ongoing forex market.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2350	1.2305	1.2270	1.2170	1.2105	1.2040

USD/JPY Pair Grapples with Volatility: Testing 150 Levels and Beyond

When the ultra-expansionary monetary policies of the Bank of Japan were added to the Fed interest rate, which was the highest in 22 years, the USD/JPY pair rose to 150 levels. The fear that the Central Bank of Japan would intervene, reduced the parity from 150 levels to 147.30 levels last week. Trying to regain its losses during the week, JPY closed last week at 149.20.

The pair experienced a decline on Monday, closing the day at 148.5 levels, because of the war-related news impacting the markets during the weekend. Even though the EUR and GBP depreciated following the war news, the strengthening of the JPY emphasized its status as a safe-haven currency in the market.

Still, the pair remains within a trading range possible between 147.05 and 150.15.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
150.15	149.55	149.20	148.20	147.50	147.05

Gold's Rally Following Middle East Conflict: Will It Sustain Momentum?

Gold's value has been on the decline for an extended period due to the persistently high-interest rates. The September Fed meeting, seen as 'hawkish' by the markets, triggered a swift drop in gold prices. Since September 25, gold had been consistently decreasing, but it found support at the 1810 level.

However, the recent Israeli-Palestinian conflict that erupted over the weekend has once again positioned gold as a safe-haven asset. Gold has not only recovered its losses from last week but has also risen to the 1863 level. Even with the war news, the U.S. 10-year bond interest rate index remains at its highest point in the last 16 years, despite some fluctuations.

Technically, a break of the 1883 (21-day moving average) level will increase the buyer appetite and the next resistance we follow at $1903 (50-day moving average). On the downside, the initial support can be found at yesterday's low of $1845, followed by the $1833 level, which would fill the gap.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1903​	1883​	1878​	1845​	1832​	1824​