Daily Global Analysis By zForex

[Z Forex]

Gold Prices Jump on Rate Cut Hopes, Dollar Stumbles After Dovish Fed

Gold prices surged to over $2,310 per ounce on Monday, bouncing back from nearly a month-low last week. Traders are observing remarks from various Federal Reserve officials this week to estimate potential rate cuts, especially after disappointing US labor data for April. The data showed a slower job growth rate than expected, strengthening the likelihood of rate cuts later in the year. According to CME's FedWatch Tool, there's a 67% chance of a rate cut in September. Lower interest rates make holding gold more attractive since it doesn't yield interest. However, in India, demand for physical gold remained subdued last week despite price drops, as buyers are waiting for bigger price declines. Meanwhile, Chinese premiums dropped for the second consecutive week due to weak holiday demand.
On Monday, the dollar index stabilized above 105.00 as investors evaluated the Federal Reserve's monetary policy stance and awaited upcoming central bank statements. Last week, the index declined approximately 1% after the Fed kept interest rates unchanged, and Chair Powell reiterated the central bank's inclination towards easing despite inflation concerns. Additionally, April's job data revealed a lower-than-expected increase of 175,000 jobs, further supporting market expectations of rate cuts, with a November cut fully anticipated. The dollar also faced pressure from the yen's strong rally last week, amid suspicions that the Bank of Japan intervened heavily to bolster its currency, spending over 9 trillion yen in the process.
The Japanese yen weakened towards 154.00 per dollar, retracting some of its gains from last week due to a public holiday, though concerns about government intervention persist. Last week, the currency surged by up to 5.2% on suspicions of intervention, with Bank of Japan data indicating significant spending to support it. Analysts suggest this intervention only offers temporary respite as underlying market conditions remain unfavorable for the yen. The yen has faced downward pressure this year as the Bank of Japan maintains ultra-low interest rates despite higher rates abroad, prompting investors to borrow yen for investment in higher-yielding currencies. However, expectations of two rate cuts by the US Federal Reserve this year may ease pressure on the yen.
In April 2024, the Caixin China General Composite PMI rose slightly to 52.8 from 52.7 in March, marking the highest level since May 2023. This indicates the sixth straight month of growth in private sector activity, driven by strong performance in both manufacturing and services. New orders increased notably, but employment levels declined for the third consecutive month. Input and output prices remained low, mainly due to subdued manufacturing factory gate prices. Overall, sentiment remained steady. Dr. Wang Zhe of Caixin Insight Group emphasized the importance of effective policy implementation to sustain economic recovery and improve market confidence.

 

[Z Forex]

Gold Prices Jump on Rate Cut Hopes, Dollar Stumbles After Dovish Fed

Gold prices surged to over $2,310 per ounce on Monday, bouncing back from nearly a month-low last week. Traders are observing remarks from various Federal Reserve officials this week to estimate potential rate cuts, especially after disappointing US labor data for April. The data showed a slower job growth rate than expected, strengthening the likelihood of rate cuts later in the year. According to CME's FedWatch Tool, there's a 67% chance of a rate cut in September. Lower interest rates make holding gold more attractive since it doesn't yield interest. However, in India, demand for physical gold remained subdued last week despite price drops, as buyers are waiting for bigger price declines. Meanwhile, Chinese premiums dropped for the second consecutive week due to weak holiday demand.
On Monday, the dollar index stabilized above 105.00 as investors evaluated the Federal Reserve's monetary policy stance and awaited upcoming central bank statements. Last week, the index declined approximately 1% after the Fed kept interest rates unchanged, and Chair Powell reiterated the central bank's inclination towards easing despite inflation concerns. Additionally, April's job data revealed a lower-than-expected increase of 175,000 jobs, further supporting market expectations of rate cuts, with a November cut fully anticipated. The dollar also faced pressure from the yen's strong rally last week, amid suspicions that the Bank of Japan intervened heavily to bolster its currency, spending over 9 trillion yen in the process.
The Japanese yen weakened towards 154.00 per dollar, retracting some of its gains from last week due to a public holiday, though concerns about government intervention persist. Last week, the currency surged by up to 5.2% on suspicions of intervention, with Bank of Japan data indicating significant spending to support it. Analysts suggest this intervention only offers temporary respite as underlying market conditions remain unfavorable for the yen. The yen has faced downward pressure this year as the Bank of Japan maintains ultra-low interest rates despite higher rates abroad, prompting investors to borrow yen for investment in higher-yielding currencies. However, expectations of two rate cuts by the US Federal Reserve this year may ease pressure on the yen.
In April 2024, the Caixin China General Composite PMI rose slightly to 52.8 from 52.7 in March, marking the highest level since May 2023. This indicates the sixth straight month of growth in private sector activity, driven by strong performance in both manufacturing and services. New orders increased notably, but employment levels declined for the third consecutive month. Input and output prices remained low, mainly due to subdued manufacturing factory gate prices. Overall, sentiment remained steady. Dr. Wang Zhe of Caixin Insight Group emphasized the importance of effective policy implementation to sustain economic recovery and improve market confidence.

 

[Z Forex]

Dollar Index Stable, Gold Prices Surge, WTI Crude Slips, BoJ Adjusts Bond Purchases
On Monday, the dollar index stabilized around 105.3 as investors prepared for crucial US inflation figures scheduled for release this week, which could shape the Federal Reserve's monetary policy stance. Last week, the index saw marginal gains as Federal Reserve officials urged caution regarding interest rate reductions. Fed Governor Michelle Bowman expressed skepticism about rate cuts in 2024, while Dallas Fed President Lorie Logan suggested it's premature to consider such measures. Additionally, recent data indicated a rise in consumer inflation expectations, although a notable decline in US consumer confidence provided further indication of economic slowdown. Despite recent trends, the markets are still expecting a potential easing cycle that is expected to begin in September while watching April's inflation data for additional insights into the future trajectory of interest rates.
Gold prices neared $2,360 per ounce on Monday, reaching their highest point in three weeks, driven by anticipation of a Federal Reserve interest rate cut in response to disappointing US employment data. Last week, reports revealed a larger-than-expected increase in unemployment claims, indicating a slowdown in job growth. This has prompted investors to anticipate the Fed's easing measures starting in September. Traders are now focusing on the upcoming April CPI and PPI releases to gain further insight into the Fed's monetary policy direction, particularly in light of concerns expressed by several Fed officials regarding potential easing. Escalating tensions in the Middle East continues to strengthen gold's appeal as a safe-haven asset. On Sunday, Israel deployed tanks to eastern Jabalia in the northern Gaza Strip following significant aerial and ground attacks during the night.
On Monday, WTI crude futures slipped below $78 per barrel, continuing a decline from the previous session due to concerns about demand-side uncertainties. Oil prices experienced a drop of over 1% on Friday following indications from US Federal Reserve officials suggesting that interest rates may remain elevated for an extended period, potentially impacting growth and reducing fuel demand in the world's leading oil consumer. Friday's data also revealed a significant decline in US consumer confidence, further indicating a slowdown in the economy. Additionally, US gasoline and distillate inventories increased in the week preceding the summer driving season, signaling weak demand. Investors are now looking ahead to OPEC's upcoming policy meeting in early June, where the group is anticipated to extend supply cuts through the latter part of the year.
On Monday, the Bank of Japan (BoJ) conducted a routine bond purchase operation, offering to buy a smaller volume of government bonds compared to its previous operation on April 24. This decision aligns with the BoJ's strategy to gradually reduce its presence in Japan's debt market. The move is expected to exert upward pressure on Japanese bond yields, potentially narrowing the significant yield gap between Japan and the US, which has been detrimental to the yen's strength. Following the BoJ's announcement, yields for the 10-year benchmark maturity rose, leading to a partial recovery of the yen's earlier losses. Governor Kazuo Ueda had previously stated in March that the BoJ aims to prioritize short-term interest rates as its primary policy tool instead of relying heavily on bond purchase operations or increasing the central bank's debt holdings. A summary of the BoJ's April policy meeting, released last week, revealed that board members are observing the impact of the weak yen on inflation and are considering the possibility of accelerating interest rate hikes. This has led to speculation that the BoJ may raise rates sooner than anticipated and reduce its debt-buying activities accordingly.

 

[Z Forex]

Daily Analysis by zForex Research Team - 11.08.2024​

Global Markets React to the Fed Rate Cut Impact ​

Today, markets respond to the Federal Reserve’s recent 25-basis-point rate cut decision. It reflects a flexible approach, with Chair Jerome Powell highlighting a meeting-by-meeting policy stance, unaffected by the recent U.S. election outcome.

As expected, this rate adjustment has influenced currency values and commodity prices, with implications for future market movements. Let’s take a look at the roadmap for potential movements influenced by upcoming inflation data, trade policy shifts, and anticipated central bank actions in December.

 

[Z Forex]

GBP/USD Analysis by zForex Research Team - 11.08.2024​

BoE Cuts Rates to 4.75%, GBP/USD Holds Near 1.2970​

The GBP/USD pair is trading around 1.2970 following yesterday’s decision by the Bank of England to cut its Bank Rate by 25 basis points to 4.75%, as expected. This marks the second rate reduction in four years, following the start of the BoE’s easing cycle in August. Eight out of nine members of the Monetary Policy Committee (MPC) voted in favor of the cut, surpassing expectations of seven votes, with Catherine Mann being the only member to vote for a hold. The decision reflects signs of slowing price growth in the UK economy, as September’s inflation dropped to a more than three-year low of 1.7%. Additionally, services inflation, which typically reflects more persistent price pressures, fell to a two-year low of 4.9%, although it remains elevated. While the BoE expects inflation to continue moderating in the medium term, it anticipates that the Labour Party’s expansionary budget will push inflation up by 0.5 percentage points at its peak. The central bank now forecasts year-end inflation at 2.5% and 2.2% by 2026. The budget is also expected to boost GDP by 0.75% at its peak impact within a year.

On the downside, key support levels for the GBP/USD pair are at 1.2950, 1.2900, and 1.2840. On the upside, resistance levels to watch are at 1.3000, 1.3050, and 1.3100.

 

[Z Forex]

EUR/USD Analysis by zForex Research Team - 11.08.2024​

Fed’s 25-Point Cut Holds EUR/USD Near 1.0776​

The EUR/USD pair is trading around 1.0776 on Friday, while the dollar index remains steady at around 104.5 as investors digest the Federal Reserve’s latest interest rate decision. The Fed cut the federal funds rate by 25 basis points, as anticipated, with Chair Jerome Powell reiterating that the central bank is not following a predetermined course. He emphasized that future decisions would be made on a meeting basis and noted that the outcome of the upcoming election would not influence policy in the near term. Market expectations are for another quarter-point rate cut in December, although any unexpected inflation or labor market data could shift this outlook. There are fears that Trump’s proposed tariff hikes could reignite inflation, potentially preventing the Fed from continuing to lower rates. The dollar is poised to end the week with modest gains, as traders took profits following the post-election rally.

In the EUR/USD pair, the initial resistance level is at 1.0830, followed by 1.0875 and 1.0900 as subsequent resistance points. On the downside, the first support level is 1.0770, which aligns with the 200-day moving average. If this level is breached, the next support levels to watch will be 1.0700 and 1.0660.

 

[Z Forex]

Daily Analysis by zForex Research Team - 11.11.2024​

Market Focus Shifts to Key Inflation Data and Central Bank Signals ​

Investors await crucial U.S. inflation data and Fed signals amid a resilient dollar in a cautious trading environment.

The EUR/USD remains steady as political uncertainties and Trump’s policies add pressure, while the yen weakens following BoJ’s rate discussions and potential intervention warnings. Gold and silver face downward pressure from inflation concerns and the strong dollar, with further volatility expected. Meanwhile, GBP/USD holds steady as the Bank of England’s rate decisions approach, with traders watching upcoming U.K. economic data closely.

 

[Z Forex]

EUR/USD Analysis by zForex Research Team - 11.11.2024​

EUR/USD Holds Steady as Markets Eye U.S. Inflation and Fed Signals​

The EUR/USD traded around 1.0720 Monday, with the Dollar Index steady at 105 as investors awaited U.S. inflation data and Fed Chair Powell’s speech on Thursday for policy signals. Last week, the dollar saw volatility but rose overall, partly due to inflation concerns and Trump’s impact on the debt outlook. Despite a 25-basis-point Fed rate cut with limited guidance, the dollar remains strong, especially against the yuan, given China’s weak stimulus and inflation data.

For EUR/USD, resistance levels stand at 1.0780, 1.0830, and 1.0870, while support lies at 1.0680, with further levels at 1.0650 and 1.0600.

 

[Z Forex]

Gold Analysis by zForex Research Team - 11.11.2024​

Gold Slips as U.S. and China Inflation Data Add Pressure​

Gold slipped to around $2,670 per ounce on Monday, marking a second decline as markets await U.S. inflation data and Fed speeches for clues on rate policy. Last week, the Fed’s 25-basis-point rate cut suggested a slower pace of cuts amid inflation concerns tied to Trump’s policies. China’s inflation rate also hit a four-month low despite stimulus efforts.

For gold, support levels are $2,657, $2,635, and $2,600, while resistance is at $2,710, followed by $2,726 and $2,750.

 

[Z Forex]

Daily Analysis by zForex Research Team - 11.12.2024​

Dollar Surge Pressures Major Currencies and Metals​

The US dollar strengthened across markets as optimism about a potential second Trump presidency increased expectations for tax cuts, deregulation, and higher tariffs on China and the EU.

This drove the DXY to a four-month high and pressured major currencies like the euro, yen, and pound, with EUR/USD at 1.0630 and GBP/USD near 1.2820. Precious metals were also affected; gold fell to $2,600 per ounce, and silver dropped to $30.20 as investors moved to riskier assets. Key support and resistance levels remain in focus as markets await US inflation data and Fed signals.

 

[Z Forex]

Gold Analysis by zForex Research Team - 11.12.2024​

Dollar Strength Drags Gold Prices Lower​

Gold prices dropped to around $2,600 per ounce, marking the third session of losses and hitting a one-month low. The decline was driven by a stronger US dollar and waning demand for safe-haven assets. Investors continued to pivot toward riskier assets as they considered the potential economic impact of Donald Trump's election victory, particularly regarding fiscal policies and monetary strategies.

The prospect of tariffs being introduced early in Trump's presidency has raised inflation concerns, which in turn has led to expectations that the Federal Reserve may delay its easing plans into next year. As a result, the likelihood of a rate cut in December has decreased, falling from nearly 80% a week ago to around 65%. On the other hand, data from the World Gold Council reveals that holdings in Indian gold ETFs have surged, doubling over the past four years to a record 54.5 tonnes as of October 31st.

On the downside, the first support level for gold is at $2,600, followed by $2,550 and $2,500. On the upside, $2,615 serves as a key resistance level, with $2,655 and $2,685 as the next levels to monitor if this resistance is surpassed.

 

[Z Forex]

Silver Analysis by zForex Research Team - 11.12.2024​

Silver Dips as Risk Appetite Rises​

Silver is trading around $30.20, its lowest level in nearly two months, as a surge in risk sentiment dampened demand for the precious metal. This was compounded by weak fiscal support from China, the world's top consumer of silver. The prospect of expansionary fiscal policies in the US prompted investors to shift away from precious metals like silver and into riskier assets such as growth stocks and cryptocurrencies.

China chose to restructure its public debt in its latest fiscal measures instead of introducing new fiscal stimulus, diminishing previous expectations of industrial support. This decision has weighed on the outlook for industrial metals, including silver, which is heavily used in sectors like electrification and solar panels. Adding to the pressure, Chinese solar panel manufacturers have reportedly begun scaling back production, partly in response to concerns over higher tariffs on the sector that could result from Trump's election victory.

On the upside, the critical resistance levels to watch are 30.90, 31.65, and 32.00. On the downside, 29.85 remains a significant first support level. If this level is breached, the next support levels to monitor are 29.30 and 28.80, respectively.

 

[Z Forex]

Daily Analysis by zForex Research Team - 11.13.2024​

U.S. Inflation Data and Fed Signals Shape Markets​

The focus is on the cautious market sentiment as major currencies and metals respond to potential inflationary pressures from a possible second Trump term and key U.S. data releases.

With CPI, PPI, and retail sales reports on the horizon, as well as Fed Chair Powell's upcoming speech, traders are closely watching for signals that could shape the outlook for rate cuts. The EUR/USD remains near a one-year low, while the yen weakens and gold gains modestly amid evolving inflation expectations.

 

[Z Forex]

EUR/USD Analysis by zForex Research Team - 11.13.2024​

EUR/USD at 1.0610: Market Awaits CPI, PPI, and Fed Signals​

The EUR/USD traded around 1.0610 on Wednesday, while the dollar index held near a six-month high at 105.9, as investors awaited key U.S. economic data. The October CPI report, due soon, could shape expectations for Fed rate cuts, with additional attention on Thursday's PPI report, Friday's retail sales, and a speech from Fed Chair Powell. The dollar remains strong, fueled by "Trump trades" betting on inflationary policies under a possible second term, which could limit Fed rate cuts. Currently, markets see a 60% chance of a December rate cut, down from 84.4% last month. The euro has dropped to a one-year low.

EUR/USD resistance levels are 1.0650, 1.0700, and 1.0750; support is at 1.0590, with further levels at 1.0550 and 1.0500.

 

[Z Forex]

USD/JPY Analysis by zForex Research Team - 11.13.2024​

JPY Weakens as BOJ Policymakers Split on Rate Hikes​

The Japanese yen weakened toward 155 per dollar, hitting a three-month low as the U.S. dollar gained on "Trump trades" that anticipate inflationary policies limiting Fed rate cuts. Japan’s producer prices surged in October, marking the largest rise in 14 months and highlighting inflation pressures. Investors await Friday's Q3 GDP data for further economic insights. Meanwhile, Bank of Japan meeting minutes showed policymakers divided on future rate hikes, though the bank maintains a 1% rate target by late 2025.

For USD/JPY, support levels are at 154.50 (200-day moving average), 153.40, and 152.30, while resistance is at 155.30, 156.00, and 156.50.

 

[Z Forex]

Daily Analysis by zForex Research Team - 11.14.2024​

Markets Await U.S. Inflation Data and Fed Guidance ​

As the market reacts to U.S. inflation data and comments from Fed officials, major currencies and metals experience heightened volatility.

The dollar index climbs to a yearly high, supported by expectations of inflationary policies if Trump secures a second term, which could affect Fed rate decisions. Meanwhile, EUR/USD hovers near a one-year low, USD/JPY weakens further, and gold and silver face downward pressure due to rate cut speculations. Upcoming data, including PPI, retail sales, and Fed Chair Powell's remarks, will likely influence market direction in the days ahead.

 

[Z Forex]

Gold Analysis by zForex Research Team - 11.14.2024​

Gold Drops for Fifth Day as Fed Rate Cut Odds Shift​

Gold fell to around $2,560 per ounce on Thursday, marking its fifth consecutive loss and hitting an eight-week low as a stronger dollar pressured prices following the latest U.S. CPI data. Although the CPI met expectations, the three-month annualized core inflation rate rose slightly. Despite this, the market expects a December Fed rate cut, with an 80% probability, up from 60% before the report. Gold has lost over 4% since last Friday, weighed down by speculation that inflationary policies under a potential Trump presidency might prompt the Fed to hold off on further cuts. Investors now await today's PPI data and weekly jobless claims, with retail sales due Friday.

For gold, support levels are at $2,545, $2,520, and $2,500, while resistance is at $2,595, $2,625, and $2,660.

 

[Z Forex]

GBP/USD Analysis by zForex Research Team - 11.14.2024​

GBP/USD Drops on Inflation Fears and BoE Caution​

The British pound traded around 1.2690 on Thursday, a three-month low, pressured by a stronger U.S. dollar and expectations that Trump’s policies could drive inflation, limiting Fed rate cuts. In the UK, labor data aligned with the Bank of England’s cautious stance on rate cuts; regular pay rose 4.8% in the three months to September, and total pay growth, including bonuses, accelerated. However, the unemployment rate rose to 4.3%, with job vacancies at their lowest since May 2021. Last week, the Bank of England cut rates by 25 basis points and maintained a cautious outlook. Key UK Q3 GDP data is due later this week.

GBP/USD support levels are at 1.2685, 1.2650, and 1.2600, while resistance is at 1.2800, 1.2830, and 1.2880.

 

[Z Forex]

Daily Analysis by zForex Research Team - 11.15.2024​

UK GDP and US Retail Sales Data Shape Markets ​

The market's focus today will be on the UK GDP data, while in the US, attention will be on retail sales.

After Donald Trump's victory in the US presidential election, the EUR/USD pair is hovering near its lowest levels of 2024, while the DXY is trading at its 52-week high. Gold, on the other hand, has tested the 2530 levels again after about 3 months.

 

[Z Forex]

EUR/USD Analysis by zForex Research Team - 11.15.2024​

EUR/USD at 1.0540: Dollar Set for Strong Weekly Gain​

The Euro fell below $1.06, its lowest point since October 2023, as a strong dollar and concerns about trade tariffs following Trump's election victory weighed heavily on the currency. Political instability in Germany and expectations of a 25 bps ECB rate cut in December added to the pressure. Meanwhile, Germany’s ZEW Economic Sentiment Indicator fell to 7.4 in November, well below expectations. The dollar index stayed near 106.8 on Friday, on track for its strongest week in over a month, as investors scaled back expectations for Federal Reserve rate cuts.

Fed Chair Powell indicated no rush to cut rates, highlighting the strong economy, a strong job market, and ongoing inflation. As a result, market odds for a 0.25% rate cut at the Fed's December meeting dropped to around 59%, down from 82.5% the previous day.

EUR/USD resistance levels are 1.0560, 1.0615, and 1.0650; support is at 1.0500, with further levels at 1.0450 and 1.0400.