Olivia

EUR/USD edged lower early Friday after posting small gains on Thursday. An upbeat December jobs report from the US could weigh on the pair ahead of the weekend. 1.0920 aligns as key near-term technical support for the pair. EUR/USD gained traction during the European trading hours on Thursday but struggled to extend its rebound in the second half of the day as rising US Treasury bond yields supported the US Dollar (USD). The pair stays on the back foot and trades in negative territory below 1.0950 as the market focus shifts to December jobs report from the US.

Good Morning! The Dollar Index is holding below 102.72 and could dip to 102 or slightly lower before resuming a rise towards 103. Euro has bounced well from 1.09 and could rise towards 1.10 before pausing. EURJPY and USDJPY are bullish to 160 and 146 respectively. USDCNY rose above 7.17 but has dipped back from there. Unless it sustains rise past 7.17, it looks bearish for a fall back to 7.14/12. Aussie is near its support of 0.67 from where a bounce towards 0.675-0.68 is expected. Pound continues to trade within 1.26-1.28 region. USDRUB has declined from resistance at 92.60 and could now fall back towards 90-89. The range of 83.35-83.20/15 could hold in USDINR for now. EURINR has held the support at 90.80 and risen back. It could see a further rise towards 91.5 before possibly pausing. Important data releases to watch today are US NFP data and the US Avg Hourly Earnings. The US Treasury yields have risen back sharply. A break above their immediate resistances can see an extended corrective rise going forward. The US NFP and the Unemployment data release today is important to watch. The German yields are moving up towards their resistances in line… Read More »Morning briefing: Euro could rise towards 1.1000 before pausing

AUD/USD lost further ground on Thursday despite directionless dollar. Auspicious Caixin figures failed to lend support to the Aussie dollar. The loss of the 0.6700 region should open the door to extra losses. The selling pressure remained unabated around the Aussie dollar for yet another session on Thursday, this time prompting AUD/USD to put the 0.6700 support to the test. In fact, the pair failed to regain balance in spite of auspicious prints from the Chinese services sector, as per the Caixin PMI for the month of December, while the vacillating price action surrounding the greenback did nothing to lend some much-needed oxygen to the high-beta currency. Also contributing to the bearishness around the pair emerged another negative session in the commodity complex in spite of the recovery to multi-month tops of iron ore prices, which approached the $145.00 region per tonne. At present, the Australian dollar is expected to be influenced by several key factors in the upcoming weeks. These factors include the actions of the Fed and the potential for interest rate cuts, potentially as early as Q2, with March being a possibility. Additionally, the performance and recovery of the Chinese economy in the post-pandemic era will also… Read More »AUD/USD Forecast: Near-term rebound hinges on US Payrolls

XAU/USD Current price: 2,044.10 A stronger than anticipated US ADP survey hints at a firmer Nonfarm Payrolls report. FOMC Meeting Minutes put mild pressure on the US Dollar late on Wednesday. XAU/USD is comfortable at around $2,040, lacks directional strength. XAU/USD trades little changed in the $2,040 area on Thursday, trimming early gains in the American session. The US Dollar came under mild pressure late Wednesday, pressured by mixed United States (US) data and the FOMC Meeting Minutes. The Federal Reserve (Fed) met in mid-December, and Chair Jerome Powell said policymakers put rate cuts on the table. Still, the Minutes provide no clues on when the Fed plans to proceed but only mention it’s possible in 2024. Meanwhile, the US published the ADP survey on private job creation. The report showed 164K new positions were added, much more than the 115K anticipated by market players. The document also showed that the labor market is very much “aligned with pre-pandemic hiring,” somehow signaling a more stable situation. On Friday, the US will publish the monthly Nonfarm Payrolls (NFP) report, which is expected to show the economy added 170K new jobs in September. XAU/USD short-term technical outlook The daily chart for XAU/USD… Read More »Gold Price Forecast: XAU/USD holds ground around $2,040

OK – now the minutes are out!  And they appear to be quite clear. Some traders stamp their feet – I say – ‘stop the whining’: 5 – 7 cuts were always an unreasonable narrative – 1 or 2 maybe, maybe. 2023 underperformers are leading the way higher in 2024!  And the 2023 outperformers are leading the way lower in 2024. (I know it’s early…relax – I’m just having fun!) Oil UP – rising tensions in the region are starting to boil. The VIX is up 15% in 2 days…. Capisce? Try the Spaghetti Arrabiatta. Oh WOW!!!  Would you look at that!  The FOMC mins came out (as expected) at 2 pm yesterday and guess what happened?  Just guess what they said…Go on…. make a guess…. “Officials reaffirmed that it would be appropriate for policy to REMAIN AT A RESTRICTIVE STANCE FOR SOME TIME UNTIL INFLATION WAS CLEARLY MOVING DOWN SUSTAINABLY*.  The committee expressed a willingness to cut the benchmark lending rate in 2024 should that trend continue, though they gave NO INDICATION easing could begin as soon as March, as futures traders expect.”  (*Capitals are for emphasis – I’m not yelling! LOL)  And if that is not enough –… Read More »The Fed makes it clear, there is no timetable

EUR/USD rebounded modestly after testing 1.0900 on Wednesday. German inflation and employment-related data from the US will be watched closely. Near-term technical outlook doesn’t yet point to a build-up of recovery momentum. EUR/USD staged a technical correction and stabilized below 1.0950 early Thursday after testing 1.0900 on Wednesday. The pair’s technical outlook is yet to point to an extended recovery as investors remain cautious while waiting for key macroeconomic data releases. The US Dollar (USD) benefited from the cautious market stance mid-week and continued to outperform the Euro. Meanwhile, the relatively hawkish tone seen in the minutes of the Federal Reserve’s (Fed) December meeting minutes helped the currency hold its ground later in the American session.

Summary The U.S. economy remains the largest economy in the world. But, will the U.S. be able to maintain that status forever? In our view, the answer is no. We believe China is on a path to eventually overtake the U.S. and become the world’s largest economy. However, China’s structural challenges and vulnerabilities combined with tense geopolitical relations are taking a greater toll on the economy than we previously expected and earlier than originally anticipated. So, while China’s rise to the world’s largest economy is inevitable, reaching the top of the economic throne will likely take longer than we previously estimated. China’s Rise To The World’s Largest Economy Is Delayed Over the years, we have expressed a pessimistic outlook toward China’s economy in multiple forums. Most recently, we highlighted the challenges that China faces in our 2024 International Economic Outlook publication. Our 2024 outlook mentions the fact that China has severe demographic problems, specifically a shrinking overall population as well as a dwindling labor force. In addition, we commented on how China’s ongoing real estate crisis, deflation, elevated corporate sector debt and softening consumer demand are likely to contribute to a sharp slowdown in growth prospects. Tack on an unclear… Read More »China’s rise to the world’s largest economy is delayed

Summary December marked the 14th month of contraction for ISM manufacturing, at least it was a slightly milder pace of contraction. Production is back above 50 and November’s jump in prices proved to be the anomaly we suspected it would be. Labor prospects remain dim.   Download the Full Report!

XAU/USD Current price: 2,031.70 Encouraging US data fueled demand for an already strong US Dollar. The FOMC Meeting Minutes could shed light on potential rate cuts. XAU/USD pressures daily lows with a strong bearish momentum, aims for $2,000. XAU/USD extended its slide on Wednesday, trading near an intraday low of $2,031.20 mid US-afternoon. The US Dollar maintained its positive momentum for most of the day, reaching fresh weekly highs against most major rivals. XAU/USD trades at levels that were last seen on December 21, ahead of the release of the Federal Open Market Committee (FOMC) Meeting Minutes. Good news in the United States (US) fueled the USD rally after Wall Street’s opening, as the ISM Manufacturing PMI improved by more than anticipated in December, hitting 47.4 after posting 46.7 in November. Additionally, the US Bureau of Labor Statistics (BLS) reported that the number of job openings on the last business day of November stood at 8.8 million little changed from the previous monthly reading. A cooling labour market will help the Federal Reserve (Fed) to stay on the pivot path. Fresh clues on what the central bank may be into will come mid-US afternoon with the FOMC Minutes. The document… Read More »Gold Price Forecast: XAU/USD accelerates its decline ahead of FOMC Meeting Minutes

EUR/USD Current price: 1.0920 Market participants keep buying the US Dollar ahead of key employment and growth figures. The German Unemployment Rate was confirmed at 5.9% in December. EUR/USD trades near the 1.0900 level and aims to break below it. The EUR/USD pair stayed on the back foot throughout the first half of Wednesday, although the slide was moderated. The pair bottomed at 1.0915  during European trading hours and maintains the sour tone heading into Wall Street’s opening, as investors are cautiously awaiting first-tier figures. So far, the macroeconomic calendar offered the December German Unemployment Rate, which was confirmed at 5.9%, unchanged from the previous month. Additionally, the United States (US) published MBA Mortgage Applications for the week ended December 29, which plunged 10.7%. However, the decline is irrelevant, considering it occurred during the winter holidays. After the American opening, the focus will be on the US ISM Manufacturing PMI, foreseen in December at 47.1, improving from 46.7 in November but still within contraction levels. At the same time, the country will release November JOLTS Job Openings, relevant ahead of the Nonfarm Payrolls (NFP) report on Friday. Finally, in the US afternoon, the focus will shift to the Federal Open… Read More »EUR/USD Forecast: Bears maintain the pressure ahead of critical US data