Today market outlook

[Zerologic]

Gold prices are stable at market opening.

Gold price activity did not experience significant fluctuations on Monday, although it rose slightly, the movement was still within the previous price range of low volatility.

This can be seen on M15 where the flat BB line with narrow band spacing reflects the gold price space within the $2425 floor and $2434 ceiling.

The absence of a gap at market opening may also be due to the absence of a trigger for an increase in gold prices on Saturday and Sunday.

However, expectations of the Fed cutting interest rates may provide positive sentiment for gold. However, it seems that investors are divided in the conclusion that the Fed will reduce interest rates by 50 basis points and some conclude that the reduction will only be 25 basis points.

Data from the FedWatch tool probability interest rates will fall by 25 basis points to 85.1%, interest rates will fall by 50 basis points to 7.6% and interest rates will remain unchanged at 7.3%.

Today there is no high-impact news on the economic calendar schedule, normal price movements are predicted based on technical analysis.

 

[Zerologic]

Ahead of the CPI data, AUDUSD is stable near the 200 MA

AUDUSD drew a bullish candlestick with a small shadow on the top candle yesterday. The price formed a low of 0.65647 and a high of 0.66046 with a close price of 0.65850. The price moved slightly below the 200 MA, drawing a flat channel with a slight upward channel.

Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser spoke at the Economic Society of Australia Business Lunch event in Brisbane on Monday with several quotes, predicting huge economic uncertainty, inflation remaining high due to weaker supply and a tight labor market, there the risk of unemployment increases more rapidly. Household consumption increases in line with real income.

The market reaction to the quote brought AUDUSD to trade up drawing a bull's candle.

Today investors are waiting for important news that might get a market response. The Australian Wage Price Index is forecast to rise 0.9% from the previous 0.8%. This economic indicator measures changes in the prices companies and governments pay for labor. Actual value greater than the forecast is usually good for a currency.

Next, investors focus on US inflation data, PPI, which is also an important economic indicator used by the Fed to consider changes in interest rates. Core PPI is predicted to fall 0.2% from the previous 0.4%. This data measures changes in prices of finished goods and services sold by producers, excluding food and energy.

 

[Zerologic]

NZDUSD bounces ahead of RBNZ's Official Cash Rate

An interesting phenomenon occurred in the NZDUSD pair. The price of this currency pair soars drawing a bull candlestick with a long body small shadow on the top of the candle. Yesterday the price formed a low of 0.60112 and a high of 0.60811 close at 0.60636.

The increase in NZDUSD prices reaching the MA 200 line which draws a flat channel indicates that the long-term trend tends to be neutral.

The surge in NZDUSD prices extended the previous increase after ending the consolidation stage near the middle band line.

Today the RBNZ will officially announce the cash rate. The policy interest rate is now 5.50%, the highest since 2008.

Nine of 23 Bloomberg analysts surveyed predicted the RBNZ would begin a rate cut cycle, while markets were pricing in a 60% chance of a 25 basis point cut. Meanwhile, the forecast by Forexfactory is expected to keep interest rates unchanged at 5.50%.

Today, besides waiting for the RBNZ cash rate, investors are also waiting for US inflation data, CPI which is expected to rise 0.2% from the previous 0.1%.

 

[Zerologic]

AUDUSD is consolidating near MA 200

AUDUSD price yesterday drew a long-body bearish candlestick with a shadow on the top candle.

AUDUSD price fell to the initial track near the MA 200 and middle band line which is the mean value of price deviation.

One of the reasons for the decline in AUDUSD prices was weaker commodity prices on Wednesday. Apart from that, yesterday's US inflation data slightly supported the strengthening of the USD.

Meanwhile, the RBA maintained its benchmark interest rate at 4.35% due to its cautious stance not to rush into easing its policy. Core CPI is projected to reach the midpoint of the 2-3% range by the end of 2026.

RBA Governor Michele Bullock stated that an interest rate cut would not happen and he did not hesitate to raise interest rates if necessary to control inflation, reflecting a hawkish stance because inflation remains high.

Today investors are waiting for Australian Employment Change and Unemployment Rate data. Expected Employment Change of 20.2k is lower than the previous 50.2k and the Unemployment Rate is predicted to be the same as the previous data of 4.1%.

Apart from that, other important news is US retail sales and Unemployment Claims which are also of concern to investors.

 

[Zerologic]

EURCHF extends gains near 200 MA

Yesterday EURCHF rose drawing a long-body bullish candlestick with almost no shadow with a high of 0.95806 and a low of 0.95167 closing at 0.95726. The price breaks the middle band line rising slightly below the MA 200 and MA 50.

The 50 MA is drawing a slight descending channel trying to cross from the upside of the 200 MA which is drawing a flat channel.

Switzerland's CPI in July showed a 0.2% decrease compared to the previous month reaching 107.5 points with inflation +1.3% compared to the same month the previous year.

Currently, the SNB interest rate is 1.25% valid from 21 June 2024. The CHF currency is often considered one of the safe-haven currencies because of its long-term economic stability. Switzerland also has a long history of hard assets including gold reserves.

While the ECB rate is currently 4.25% effective from 12 June, the euro area annual inflation rate was 2.5% in June 2024, down from 2.6% in May.

EURCHF started an upward reversal on August 5 after a long downtrend wave.

 

[Zerologic]

Gold prices hit a new all-time high

Gold prices were unstoppable after breaking through the resistance zone in the Bollinger band range, thus forming a new all-time high at $2509.

Geopolitical risks and China's recovery could be the reason for the soaring gold prices in addition to waning fears of a US recession after better-than-expected US data.

According to the CME FedWatch tool, 75.5% expect the Fed's interest rate to fall by 25 bps, and 24.5% expect a 50 bps rate cut in September.

US economic data released last week has reduced fears of a recession. Higher-than-expected retail sales and lower jobless claims faded recession fears.

This week several important news will be released in the economic calendar schedule which may be of concern to the market, FOMC meeting minutes, and some other important economic data on August 22.

 

[Zerologic]

USDCAD extends declines earlier this week.

USDCAD yesterday drew a bearish candlestick continuing the previous decline. The price formed a long body bearish candlestick with a slight shadow on the top candle with a high price of 1.36840 and a low of 1.36327.

On the Weekly time frame, USDCAD declines for three consecutive weeks with the first week reflecting extreme declines.

The Bank Of Canada's interest rate is now at 4.50%, but market consensus expects the central bank to cut rates 25 bps from 4.50% to 4.25% at its September meeting.

Meanwhile, the market hopes that the Fed will cut interest rates at the end of the year, which is estimated in September the Fed will cut interest rates by 25 bps, from 4.50% to 4.25%.

Today investors are focused on Canadian inflation data, the Consumer Price Index which is forecast at 0.4% from previous data -0.1%.

 

[Zerologic]

EURCHF plummeted after a retest near MA 50.

EURCHF yesterday drew a long body bearish candlestick with almost no shadow. The price fell from a high of 0.95657 to a low of 0.94842 and back to near the middle band line.

The SnB rate is currently 1.25% while the ECB rate is 4.25%. Traders sometimes use high interest rate differences to carry out trade strategies.

CHF is a safe-haven currency because Switzerland has political stability and low inflation and this was proven when the global instability of the 2008 financial crisis occurred, investors switched to CHF and pushed its value higher.

Factors influencing the EURCHF value include ECB and SNB monetary policy, GDP, Employment change, industrial production, CPI, etc.

Other pairs that are positively correlated with EURCHF include CADCHF and USDCHF. Meanwhile, pairs with negative correlations such as CHFJPY, and CHFSGD.

 

[Zerologic]

GBPUSD extends its winning streak this week.

Yesterday GBPUSD drew a bullish candlestick continuing the previous bullish trend. Price formed a high of 1.31186, a low of 1.30101, and closed at 1.30830.

The market seems increasingly confident that the Fed will cut interest rates in September. Data from the FedWatch tool now shows 64% believe the Fed will cut interest rates by 25 bps and 36% believe the Fed will cut interest rates by 50 bps.

At the FOMC in July, Fed officials decided to keep the benchmark interest rate stable, with a tendency for some officials to start easing.

The main source for investors looking for clues about a rate cut is Fed Chair Jerome Powell's statement at the Jackson Hole Symposium on Thursday-Saturday which predated Powell's statement on Friday.

On the other hand, market expectations for a reduction in BoE interest rates have also increased. The UK Consumer Price Index (CPI) report for July showed core inflation slowed by 3.3% from the forecast of 3.4%.

Today investors focus on news that may have a high impact on currencies, Flash Manufacturing PMI and Flash Services PMI UK and US.

UK Manufacturing PMI is forecast at 52.1, the same as the previous release, and services PMI is forecast at 52.8 from the prior release of 52.5.

US Manufacturing PMI is forecast at 49.5 from the previous release of 49.6 and services PMI is forecast at 54.0 from the prior release of 55.0. Meanwhile, US unemployment claims are predicted to increase by 232k from the prior release of 227k.

 

[Zerologic]

Gold prices fell in the middle of the Jackson Hole Symposium

Gold price yesterday recorded a decline at a low of $2470 from a high of $2514 by drawing a bearish candlestick with a shadow at the bottom of the candle. The decline in gold prices answered the previous candlestick's indecision.

US Manufacturing PMI data released yesterday showed the actual value of 48.0 lower than the forecast of 49.5. However, the US Services manufacturing PMI showed actual data of 55.2, higher than the forecast of 54.0. The actual data is also higher than the previous data release of 55.0. The same US unemployment claims were expected to be 232k higher than the last release data of 228k.

Weak US data signals an imminent US interest rate cut and continues to support Gold in general. The Fed is expected to cut interest rates in September. According to the CME group's FedWatch tool, expectations for a 25 bps rate cut rose 75%, while a 50 bps cut was 25%. A higher cut rate might support gold as a non-yielding asset.

Today investors may will wait for Jerome Powell's speech as head of the central bank which controls short-term interest rates and monetary policy to see the statement as hawkish or dovish.

 

[Zerologic]

NZDUSD managed to pass the high on June drawing a new high at 0.62359.

NZDUSD price fluctuations appear to have started a bullish sentiment journey since the beginning of the first week of August. NZDUSD's bullish sentiment appears unstoppable despite weaker New Zealand economic data. New Zealand retail sales showed actual data -1.2% lower than expected -1.0%, even much lower than the previous revision of 0.4%.

It seems that New Zealand's weak economic data was offset by Powell's dovish speech. In his Jackson Hole speech, Powell stated that the size and timing of interest rate cuts would depend on data, adopting a stance like the European Central Bank (ECB). He added that he believes inflation is on a sustainable path to return to 2% and inflation risks have reduced.

According to CME Group's FedWatch tool, 63.5% of investors believe the Fed will cut interest rates by 0.25%, and 36.5% believe it will cut by 0.50%.

The RBNZ interest rate is now 5.25%, this central bank has cut the previous interest rate to 5.50%, thus further suppressing the performance of the NZDUSD, which is also called KIWI by traders.

Today's economic calendar schedule does not show any high-impact news data, but some that may be of concern is US Durable Goods Orders data.

 

[Zerologic]

EURUSD corrected after surging last week.

EURUSD yesterday had difficulty extending its rising, stalling at the price range of 1.12000. Yesterday's price drew a bearish candlestick half the body of the previous candlestick indicating a possible retracement.

Speculation of the Fed cutting interest rates in September is getting stronger because Powell's dovish speech last Friday assured the public that it will cut interest rates because of indicators that convinced the 2% inflation target can be achieved. However, investors this week are waiting for US core PCE inflation data and Eurozone CPI for August.

Apart from the Fed possibly cutting interest rates in September, the European Central Bank (ECB) is also predicted to cut interest rates again at its September meeting. For further guidance on interest rate policy, investors will focus on inflation data from Germany and the European zone.

Another factor that investors are paying attention to is the US core Personal Consumption Expenditure (PCE) Price Index for July, which will be published on Friday.

Today's economic news that may get the attention of traders is US Consumer Confidence which surveyed 3,000 households which asked respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation.

 

[Zerologic]

EURCHF extends decline below the middle band line.

For two consecutive weeks, we have seen EURCHF decline more dominantly than increase. Day by day, lower lows are formed.

A pair often called Euro-Swiss, the Euro is the official currency of 19 European countries from the 28 members of the European Union. Meanwhile, the Swiss Franc is a reserve currency which is one of the safe-haven currencies.

The Swiss Franc exchange rate is influenced by many factors, especially the monetary policy of the European Central Bank and Swiss National Bank which controls the money supply in the market. Apart from interest rates, other factors that influence the Swiss Franc exchange rate are the trade balance, inflation data, gold, oil, and coal are also important factors for the Swiss Franc.

With high price volatility in up-and-down trends, this pair is often used for swing trading even though it is less popular for scalping.

As a safe-haven currency, the Swiss Franc can move thousands of pips when the SNB intervenes in the currency. However, this event rarely occurred after 2015.

Today's news is the focus of EURCHF traders on German and Spanish inflation data, which may affect the conversion of the Euro currency and its implications for EURCHF.

 

[Zerologic]

AUDUSD is consolidating near the resistance zone

Yesterday the AUDUSD price drew a bearish candlestick with rather long shadows on the top and bottom of the candle, within three days the price moved in the range of 0.67612 to 0.68125. Although the current price is higher than the previous high in July, the consolidation movement indicates a fading uptrend.

Australian CPI data released yesterday showed actual data of 3.5%, higher than the forecast of 3.4%, but lower than the previous revision of 3.8%. Market speculation regarding this inflation data predicts that the RBA will keep the Official Cash Rate (OCR) interest rate unchanged at 4.35%. On the other hand, the Fed is predicted to cut interest rates in September, which could have an impact on the AUD

On the other hand, Australian construction data showed 0.1% lower than the expected 0.8% but higher than the previous revision of -2.0%.

Investors will probably wait more for US PCE data which will be released on Friday which is expected to be 0.2% the same as the previous revision. However, today several important news releases that need to be concerned are US GDP data and Unemployment Claims. Prelim GDP is forecast at 2.8%, the same as the previous revision, while Unemployment Claims is forecast at 232k, the same as the previous revision.

 

[Zerologic]

Gold moves in the range of $2470-$2531 waiting for the Fed's interest rate policy

Gold prices move more in ranges after reaching an all-time high of $2531.41 on August 20. Gold price movements move up and down in market ranges.

Yesterday the price drew a bullish candlestick from a bearish one from a low of $2493 and a high of $2528.

Investors may still wait for the Fed's monetary policy cut in interest rates predicted in September. According to FedWatch from the CME group, there is a 67% chance that the Fed will cut interest rates by 0.25% and a 33% chance that the Fed will cut interest rates by 0.50%.

Yesterday's rise in gold prices may have been driven more by Chinese demand after data from the World Gold Council (WGC) on Tuesday showed China's net gold imports rose 17% in July.

US GDP data rose 3.0% higher than the forecast of 2.8% with the previous revision of 2.8%. On the other hand, Unemployment Claims 231k was somewhat smaller than the forecast of 232k with the previous revision of 233k. In theory, this is good for USD strengthening.

Today investors will focus on Personal Consumption Expenditures (PCE) data, which is the Fed's most preferred inflation data, which is forecast at 0.2% from the previous revision of 0.2%.

 

[Zerologic]

EURUSD plunged last week, is September a continuation or reversal?

Last weekend the EURUSD price drew a bearish candlestick extending the previous decline and reaching the middle band line.

If we go to the weekly TF, the price area is now at the low of the previous candlestick, which is a possible support zone.

in the previous week USD seems to have managed to gain some composure as US economic data is supportive and investors continue to assess the prospect of lower interest rates in September amid a strong economy.

US economic data released last week, annual Gross Domestic Product (GDP) growth for the second quarter was 3%, higher than the previous forecast of 2.8%. Unemployment Claims and Personal Consumption Expenditure/PCE are in line with market expectations.

This week investors will focus on several important news, JOLTS Job Openings data, ADP Non-Farm Employment Change, Unemployment Claims, and Non-Farm Employment Change which are high-impact news.

However, in today's economic calendar schedule, some economic news should be concerning including PMI manufacturing data for several European countries such as German, French, and Spanish.

 

[Zerologic]

EURGBP is consolidating near the support zone

EURGBP price volatility looks high referring to the Bollinger band indicator, the wide spacing of the upper and lower bands indicates high market volatility.

The EURGBP price wave is quite interesting, since August the price has started to move up from the low range of 0.84125, to reach the high level of 0.86185. The highest price was formed at 0.86238 on August 8.

Then the price gradually decreased back to a low point at the price of 0.83984 on August 30. Earlier this week the EURGBP consolidation movement drew a bullish candlestick with a shadow on the top candle.

Going to the W1 time frame, this zone is a support zone based on previous price history which may be an important level for possible trend reversal or continuation.

From a fundamental perspective, the ECB is predicted to reduce its main lending interest rate next month due to lower inflation as expected. Meanwhile, the BOE predicts a slower policy easing cycle. . The BoE is expected to cut interest rates once again this year.

See today's economic calendar schedule, traders will probably focus on US ISM manufacturing PMI data which is forecast at 47.5 from the previous revision of 46.8. However, whether this news release will have an impact on EURGBP is not yet clear.

 

[Zerologic]

Gold bounces at low $2423, downside potential still exists

Yesterday the gold price drew a bearish candlestick with a long shadow at the bottom of the candle. The price has crossed the middle band line from the upside and bounced to around $2492 near the middle band line. The middle band line is often a consolidation zone of price deviations.

Yesterday's release of ISM Manufacturing PMI data showed that the actual data was 47.2, slightly lower than the expected 47.5, but higher than the previous revision of 46.8. Meanwhile, ISM Manufacturing Prices showed actual data of 54.0, higher than expected 52.1 and the previous revision of 52.9.

Market players still seem to be hoping for new clues about what the Fed will do this month, even though news that the Fed will cut interest rates has been circulating for a long time.

According to the FedWtach Tool from CME Group, forecasts for interest rate cuts are between 5%-5.25% at 62.0% and 4.75%-5% cuts at 38%.

Today's important data that will be released and may be of concern to investors is US jobs data, Job Openings and Labor Turnover Survey (JOLTS), which is predicted to fall by 8.09M from the previous revision of 8.18M.

On the other hand, investors will wait for US NFP data which will be released on Friday which is expected to provide a clear picture of what the Fed will do.

 

[Zerologic]

 

[Zerologic]

GBPUSD has the potential to continue the bullish trend

Yesterday GBPUSD drew an almost shadowless bullish candlestick with a medium candlestick body. GBPUSD's rise continued the previous day of the week after GBPUSD fell from resistance 1.32653 to a low of 1.30869 in a week.

Yesterday's ADP Non-Farm Employment Change data showed the actual data of 99k was much lower than the expected 144k, even lower than the previous revision of 111k. This data raises concerns that the US could be heading into a recession.

The ADP report is usually used to estimate market expectations for the NFP report that will be released today, but this has a weak track record of accuracy.

On the other hand, Unemployment Claims fell 227k from the expected 231k with the previous revision of 232k. This data supports the currency and reduces recession fears.

Meanwhile, PMI services data was 51.5 compared to the expected 51.3 and the previous revision of 51.4, this shows an expansion above 5.0.

On the other hand, predictions of the FED cutting interest rates have increased. According to the FedWatch tool from CME Group, the forecast for the Fed cutting interest rates by 0.25% is 59.0% and the forecast for cutting 0.50% is up 41.0%.

Today's NFP is expected to rise to 164k from the previous revision of 114k. Differences in actual data that are too large can affect USD volatility.