Olivia

EUR/USD stabilized above 1.0950 following Tuesday’s sharp decline. Near-term technical outlook suggests that the pair remains bearish. US economic docket will feature key data releases on Wednesday. EUR/USD declined sharply on Tuesday and touched its lowest level in nearly two weeks at 1.0938 as the US Dollar (USD) staged a decisive correction following the poor performance seen in the last couple of weeks of 2023. Early Wednesday, the pair holds steady at around 1.0950. In the absence of high-tier data releases, the USD benefited from souring market mood and the steady recovery seen in the US Treasury bond yields on Tuesday. The US Dollar Index, which lost about 2% in December, gained nearly 1% on the first trading day of 2024. In the second half of the day, the US economic docket will feature the ISM Manufacturing PMI data for December and JOLTS Job Openings report for November. Investors expect the ISM Manufacturing PMI to edge higher to 47.1 from 46.7 in November. A reading above 50 could provide a boost to the USD with the immediate reaction. On the other hand, a noticeable decline in the number of job openings could hurt the USD.  Later in the American session,… Read More »EUR/USD Forecast: Euro not out of the woods yet, eyes on US data

Good Morning! Dollar Index is rising as expected and could test 102.50 while Euro could fall to 1.0950-1.09. EURJPY looks bearish towards 155/154 while USDJPY has risen back and could test 143 now, contrary to our expectations of seeing a fall towards 140-138. USDCNY is rising towards our mentioned targets of 7.15/16. Aussie is headed towards 0.6750/0.67 while Pound is near its immediate support of 1.26 which needs to produce a bounce else could be vulnerable to fall towards 1.24. USDRUB rose sharply yesterday but seems to be falling from 91 now. USDINR rose slightly past our expected resistance of 83.30 but later it eventually came down. The 83.35-83.20 range could hold for the day. EURINR has risen above 91 and could test 91.50 soon before pausing. The US Treasury and the German yields are witnessing a corrective rise in line with our expectation. Both the yields can rise further from here in the coming days. The 10Yr GoI can move up to test its resistance before turning down again to resume the downtrend. The 5Yr GoI on the other hand is stuck in a narrow range within its broader downtrend. Dow Jones has scope to test its immediate resistance… Read More »Morning briefing: Euro could fall to 1.0950-1.0900

The Federal Reserve’s meeting minutes from the dovish December decision are of high interest early in 2024. Officials may wish to emphasize hawkish messages after markets ran with the Fed’s dovish message of upcoming rate cuts. Any US Dollar strength or stock retreat may prove short-lived in the current festive mood. It is still cold out there – that will likely be the Federal Reserve (Fed) message as 2024 kicks off and the festive lights are removed from the streets. Nevertheless, any chill coming from the world’s most powerful central bank will likely be short-lived.  Here is a preview for the Federal Open Market Committee (FOMC) Meeting Minutes, due on Wednesday, at 19:00 GMT. Markets got carried away by dovish pivot Three rate cuts in 2024 – that was the message from the Federal Reserve’s “dot plot” on December 13. Chair Jerome Powell and his colleagues left rates unchanged and signaled more decreases in borrowing costs than previously anticipated. By slashing rate forecasts rather than increasing them, the Fed marked a turnaround in policy and signaled a victory over inflation.  Markets loved it – but perhaps too much –, pricing four to five cuts in 2024, with the first one… Read More »FOMC Meeting Minutes Preview: Fed to temporary cool markets with hawkish chill

Gold price rebounds, as the US Dollar eases early Wednesday.   The US Treasury bond yields pause its uptrend amid souring sentiment. Gold price remains on track to test $2,100 but acceptance above $2,085 holds the key. Gold price is attempting a bounce above $2,060 early Wednesday, replicating the move seen in Asia on Tuesday, The US Dollar (USD) is unable to hold its previous uptick even though markets appear risk averse. All eyes on the Federal Reserve Minutes and US jobs data Amidst ongoing geopolitical conflict in the Middle East and simmering tensions between China and Taiwan, risk sentiment remains in a weak spot in Asian trading on Wednesday, allowing the traditional safe-haven, Gold price, to stage a modest rebound from near $2,060 region. Investors also stay cautious, as they keenly await the Minutes of the US Federal Reserve’s (Fed) December meeting and the JOLTS Job Openings data, which could throw fresh light on the prospects of interest rate cuts later this year. Tsunami warnings and multiple high-magnitude earthquakes in Japan also keep investors on edge, although the natural disaster has had limited market impact so far. Despite the souring sentiment, the US Dollar is pulling back from multi-day highs, tracking the sluggish… Read More »Gold Price Forecast: XAU/USD set to retest key $2,085 level ahead of Fed Minutes

Markets U.S. stocks slid on the first significant trading day of the new year, signalling a downbeat start to 2024 after a winning year that left the S&P 500 shy of a new record high. The recent rally in stocks stalled on Friday, following two months of gains that contributed to gangbuster performance in the key U.S. benchmarks. The S&P 500, in particular, notched its ninth consecutive weekly win, marking the longest streak since 2004, and is approaching its all-time closing high of 4,796.56. Tech stocks declined after Barclays analysts downgraded their rating on Apple’s stock, expressing concerns about demand for new iPhones. This downgrade contributed to a 1.7% fall in Apple shares as tech stocks slid. Economic updates expected later in the week, mainly the December jobs report due on Friday, could further challenge the ongoing rally. Investors are closely watching the report for its potential to influence the Federal Reserve’s reaction function. The prevailing bets on fast and furious interest rate cuts in 2024 have been a critical factor buoying stocks in recent weeks. Tech stocks, with their rich valuations, are susceptible to the slightest economic wobble or shift higher in yields, and it’s not like everyone was… Read More »Tech shares wobble to start the year

AUD/USD Current Price: 0.6763 Growth-related figures showed major economies are still struggling to recover. The US Dollar advanced throughout the second half of the day amid a souring market mood. AUD/USD maintains the bearish tone ahead of the Asian opening, support at 0.6730. The AUD/USD pair pierced the 0.6800 threshold on Tuesday, heading into the new day trading in the 0.6770 price zone. The US Dollar lost some ground at the beginning of the day but changed course during European trading hours, preserving its strength through the American session, as Wall Street traded with a soft tone while government bonds also lost ground. Growth-related data released these days indicated major economies are still struggling to recover. China released the December NBS Manufacturing PMI on Sunday, which unexpectedly contracted to 49. At the same time, the NBS Non-Manufacturing PMI printed at 50.4, improving from 50.2 in November but missing expectations of 50.5. Meanwhile, similar data from Europe and America was released throughout the day, cooling expectations for soon-to-come rate cuts among major economies. There are no macroeconomic figures scheduled for the upcoming Asian session, focusing on US data, as the country will publish the December ISM Manufacturing PMI, November JOLTS Job… Read More »AUD/USD Forecast: Bears add pressure, break through 0.6700 on the table

An exceptional end to the year has left markets with a lot to live up to in 2024, with huge rate cuts and a soft landing now among the things investors have priced in. The fantasy scenario for central bankers across the globe over the last couple of years is now a very real possibility but it’s also far from guaranteed, despite how markets are now positioned. With so much now to live up to, investors may start asking themselves whether evaluations have become a little stretched. Everyone will naturally look to read too much into the first trading session of the year, even the week as a whole, but after an unusually strong end to the year that’s probably not the best idea. If markets slightly pare gains in the first quarter I don’t think that necessarily spells trouble for the year, especially if we see a couple of hiccups in the data. We’ve been spoiled over the last couple of months and while that may continue and see investors price in even more rate cuts this year on the belief central banks have overdone it, it may also not be so kind. The first test of the new… Read More »Traders eye the US jobs report after an exceptional end to 2023

EUR/USD Current price: 1.0955 EU manufacturing output remained in contraction territory at the end of 2023. The focus this week falls on European inflation and American employment figures. EUR/USD reaches oversold conditions in the near term, maintains the bearish tone. The EUR/USD pair keeps retreating from the December peak at 1.1139, accelerating its slide through the 1.1000 threshold ahead of the United States (US) opening. The US Dollar gathers momentum in thin market conditions as market players return to their desks ahead of first-tier data that could set the tone for the rest of the month. On the one hand, the Eurozone will release inflation updates, while on the other, the US will unveil employment-related figures ahead of the December Nonfarm Payrolls report (NFP), scheduled for next Friday. Meanwhile, the macroeconomic calendar showed that “the Eurozone manufacturing sector remained stuck in contraction at the end of 2023, with output continuing to fall and factory job losses extending into a seventh successive month,” according to the S&P Global/Hamburg Commercial Bank monthly report. The December Manufacturing PMI was confirmed at 44.4, slightly better than the previous 44.2. The German index was reported at 43.3. The American session will bring the US figure,… Read More »EUR/USD Forecast: Bears take advantage of thin market conditions

EUR/USD fluctuates below 1.1050 on the first trading day of 2024. The near-term technical outlook points to a build-up of bearish momentum. The economic calendar will offer several high-tier data releases this week. EUR/USD stays on the back foot and trades modestly lower on the day below 1.1050 in the first European session of 2024. The near-term technical outlook suggests that the pair could extend its downward correction. Investors, however, could refrain from taking large positions ahead of this week’s important macroeconomic data releases. EUR/USD rose more than 1% in December and registered gains for the second consecutive month as the US Dollar (USD) struggled to find demand, with investors anticipating a Federal Reserve (Fed) rate cut as early as March. On the other hand, European Central Bank (ECB) policymakers made it clear that it was too early for them to think about a policy pivot. Later in the session, S&P Global will release revisions to December Manufacturing PMI for Germany, the Euro area and the US.  On Wednesday, ISM Manufacturing PMI and JOLTS Job Openings data will be featured in the US economic docket. Later in the day, the Fed will release the minutes of the December policy meeting.… Read More »EUR/USD Forecast: Euro could extend correction ahead of key data

Gold price kicks off 2024 in the green after booking the best year in three in 2023. The US Dollar tracks the US Treasury bond yields higher, as the mood remains mixed. Gold price looks to take out $2,100 as the daily technical setup remains in favor of buyers. Gold price has started off the first trading day of 2024 on the front foot, having eked out a 14% annual gain in 2023. Gold price is finding fresh demand early Tuesday, despite an uptick in the US Dollar (USD) and the US Treasury bond yields.   Gold price looks to top-tier US jobs data for fresh impetus Lingering Middle-East geopolitical risks keep investors on the edge starting out a new year, keeping the sentiment around the traditional safe-haven Gold underpinned. Citing accounts by American, Maersk, and Houthi officials, Reuters reported on Tuesday that US helicopters repelled an attack on Sunday by Iran-backed Houthi militants on a Maersk container vessel in the Red Sea, sinking three Houthi ships and killing 10 militants. Markets remain wary that this strife combined with the ongoing Israel-Gaza conflict could translate into a wider regional discord, scurrying for safety in havens such as Gold, the US… Read More »Gold Price Forecast: XAU/USD firms up at the onset of 2024, looks to US jobs data