Olivia

USD/JPY and JPY cross pairs remain deeply overbought and a long way yet to drop. Long term targets to USD/JPY and JPY cross pairs as follows: USD/JPY : 146.07, 138.01, 133.26, 129.72. GBP/JPY: 181.06, 172.87, 168.89, 167.40. EUR/JPY: 157.78, 150.05, 145.89, 143.39. CAD/JPY: 107.74, 102.97, 100.21, 98.59. CHF/JPY: 164.20, 153.01, 146.39, 141.63. AUD/JPY: 95.49, 92.22, 90.78, 89.91. NZD/JPY: 88.58, 85.51, 83.98, 82.83. The topic of the Himino speech addressed the concept to overall changes in Japanese firms to Wages, Prices and the relationship to both in operation within CPI and the Japanese economy. While the Himino speech was an important supposition to monetary policy and the age old dilemma to wages and prices, Himino’s journey was a pure speculative venture to how the Wage / Price concept possibly leaves what he termed the frozen state. Then the further concepts on how to understand  and view wages and prices in relation to households, corporates and Japanese financial institutions. Himino then walks us through the 4 stages of developments to price increases and decreases, labor costs, purchase and selling prices and wages. As brilliant as the BOJ presented themselves since 2016, Himino loses the Wage / Price concept in stage 1 as… Read More »FX weekly — DXY and 14 currency pair levels and targets

A strong US labor market fueled demand for safety by the end of the week. The US Federal Reserve and the European Central Bank take centre stage. EUR/USD is poised to extend its slump in the upcoming days towards 1.0640. The US Dollar turned north this past week, partially losing its pace on Thursday, as speculative interest took a break ahead of the United States (US) employment figures scheduled for Friday. On the contrary, the Euro remained on the back foot as the economic future remains uncertain. As a result, EUR/USD retreated below the 1.0800 mark, edging sharply lower for a second consecutive week. The market mood was mostly sour throughout the week, further driving EUR/USD lower. Moody’s credit agency downgraded China’s A1 debt rating from stable to negative, citing the increasing risks to growth and the property sector crisis on Tuesday, pushing stock markets down and backing demand for the safe-haven USD. Data shows that the EU is not out of the woods In the last few months, European macroeconomic figures indicated that the Eurozone could suffer a steep recession in the near future, with growth-related gauges reflecting continued economic contraction. And indeed, there were no fresh good news… Read More »EUR/USD Weekly Forecast: US Dollar turns north as central banks’ decisions loom

Pound Sterling gave up control against the US Dollar, as GBP/USD corrected to a two-week low. A blockbuster week, with central banks’ 2023 finale set to rock the Pound Sterling. Downside appears limited for GBP/USD, as strong support aligns near 1.2450. The Pound Sterling snapped a three-week uptrend against the United States Dollar (USD), fuelling a GBP/USD correction to two-week lows below 1.2600. Traders gear up for a central bank bonanza week, which could lead to a spike in volatility for the pair. Pound Sterling gives into the US Dollar comeback GBP/USD reversed the previous week’s gains and lost almost 150 pips, as the US Dollar staged a solid comeback against its major counterparts. Weak US JOLTS Job Openings and ADP Employment Change data suggested loosening labor market conditions and affirmed increased expectations of the Federal Reserve (Fed) interest rate cut in March weighing heavily on the US Treasury bond yields. However, this failed to deter US Dollar bulls, as Australian, UK and the euro area peripheral bond yields fell relatively rapidly after traders ramped up rate-cut bets for other central banks. Markets priced in around an 85% chance that the European Central Bank (ECB) will cut interest rates at… Read More »GBP/USD Weekly Forecast: Pound Sterling braces for a Big week ahead

Gold reversed its direction after setting a record-top this week. The near-term technical outlook points to a loss of bullish momentum. Inflation data from the US and the Fed’s policy announcements could drive XAU/USD’s action. Following an impressive rally at the beginning of the week, Gold turned south and snapped a three-week winning streak. As market focus shifts to next week’s key data releases and central bank events, XAU/USD’s technical outlook points to a loss of bullish momentum. Gold price retreated sharply after setting a record-high Gold opened with a huge bullish gap and reached a new all-time-high near $2,150 in the early Asian session on Monday as markets reacted to escalating geopolitical tensions. After Yemen’s Houthi rebels hit three commercial ships in the Red Sea on Sunday, a US warship responded by shooting down three drones. Yemen’s Houthi movement acknowledged that they had targeted two Israeli ships, stating that they were responding to calls from Islamic nations to stand with the Palestinian people. This development revived fears over the Israel-Hamas conflict turning into a widespread crisis in the Middle East. Following the record-setting upsurge, profit-taking triggered a deep correction in XAU/USD and the pair closed in negative territory near… Read More »Gold Price Weekly Forecast: XAU/USD bulls turn hesitant ahead of US inflation data, Fed meeting

EUR/USD went into a consolidation phase below 1.0800 after posting gains on Thursday. Nonfarm Payrolls in the US are forecast to rise by 180K in November. A disappointing jobs report could weigh on the USD ahead of the weekend. EUR/USD benefited from broad-based US Dollar (USD) weakness on Thursday and registered daily gains for the first time since November 28. Early Friday, the pair holds steady slightly below 1.0800 as market participants refrain from taking large positions ahead of the US November jobs report. The positive shift seen in risk mood made it difficult for the USD to find demand in the second half of the day on Thursday and allowed EUR/USD to inch higher. 

Gold price is extending its range-play near $2,030 early  Friday. US Dollar is licking its wounds, as US Treasury bond yields cling to recovery gains. Gold price looks north on a weak US Nonfarm Payrolls report, as the daily chart leans bullish. Gold price is extending its range-play into the fourth straight trading day early Friday, as investors prefer to stay on the sidelines before the release of the all-important Nonfarm Payrolls data later in the day. US Nonfarm Payrolls could offer a fresh boost to Gold price Gold price is treading water, lacking any impetus, as traders refrain from placing any fresh directional bets on the United States Dollar (USD) in the lead-up to the critical US jobs data. The US Dollar is licking its wounds after falling hard in tandem with the USD/JPY pair. The Japanese Yen rallied over 500 pips against the US Dollar on Thursday, smashing USD/JPY to a new four-month low of 141.63 on hopes of a Bank of Japan’s (BoJ) policy pivot earlier than expected. Despite the US Dollar sell-off, Gold price failed to benefit, as the US Treasury bond yields rebounded firmly from multi-month lows, diminishing the appeal of the non-interest-bearing Gold price.  Markets… Read More »Gold Price Forecast: XAU/USD eyes acceptance above $2,050 on dismal US Nonfarm Payrolls data

AUD/USD Current Price: 0.6606 Improvement in risk appetite helped the rebound of AUD/USD.  US Dollar loses momentum and retreats amid lower Treasury yields ahead of NFP.  The pair stays above the key 20-day SMA, with further gains likely while above 0essential90. The AUD/USD rebounded from the 20-day Simple Moving Average (SMA) and two-week lows at 0.6525, reaching levels above 0.6600. The sharp rebound took place amid an improvement in market sentiment and on the back of a weaker US Dollar. Trade data from Australia showed a 0.4% increase in exports in October, with the annual rate improving from -11.9% to -14.3%; imports declined by 1.9%, with the annual rate at 2.4%. Chinese exports turned positive from a year ago for the first time since April, but imports were lower than a year ago, suggesting that weak domestic demand persists. The US Dollar weakened on Thursday and drove the AUD/USD pair to the upside. A decline in US Treasury Yields weighed on the Greenback. The momentum for the Greenback also faded, affected by an improvement in risk sentiment. Data from the US showed that Initial Jobless Claims rose to 220,000 in the week ending December 2, slightly below the expected 222,000,… Read More »AUD/USD Forecast: Aussie rebounds from the 20-day SMA

XAU/USD Current price: $2,023 Gold still faces bearish pressure despite lower Treasury yields. Market participants await more US labour market data. XAU/USD faces strong resistance at $2,040. Gold spot is moving sideways without a clear direction in the short term, as the upside faces resistance at $2,040 and lower Treasury yields limit the downside. The negative momentum from the retreats from all-time highs near $2,130 still shows signs of life. The sharp drop in XAUD/USD has caused damage, and the wounds are still visible. However, the positive aspect is that the price has so far avoided further losses, suggesting that consolidation could persist. On the fundamental front, the sideways moves reflect the market’s conviction that the Federal Reserve (Fed) won’t raise interest, and they foresee rate cuts in 2024, but after other central banks start loosening monetary policy. This could be negative for the US Dollar, but the fundamentals remains one of the strongest among G10 currencies considering GDP growth and the outlook. For Gold to resume the upside, some modest weakness in the US Dollar appears to be needed. Additionally, yields should continue to stay away from any significant rebound. This context should bring Gold back near record highs… Read More »Gold Price Forecast: XAU/USD offers no clear signs, recovery limited by $2,040

EUR/USD staged a rebound after testing 1.0760 support on Thursday. The pair could face stiff resistance at 1.0820. Weekly Initial Jobless Claims data from the US will be watched closely ahead of Friday’s jobs report. EUR/USD regained its traction and rose toward 1.0800 after falling to the 1.0750 area during the early hours of the European session on Thursday. Technical buyers could show interest in case the pair climbs above 1.0820. Despite the uninspiring employment-related data releases from the US on Wednesday, the US Dollar continued to outperform its rivals as investors opted to stay away from risk-sensitive assets. Employment in the US private sector rose by 103,000 in November and fell short of the market expectation of 130,000. Additionally, Unit Labor Costs declined by 1.2% in the third quarter, compared to the market expectation for a decrease of 0.9%. In the meantime, hawkish comments from Bank of Japan Governor Kazuo Ueda triggered a rally in the Japanese Yen (JPY) early Thursday. The sharp decline seen in the USD/JPY pair suggested that the JPY captured capital outflows out of the USD. Although this development helped EUR/USD edge higher, EUR/JPY also suffered heavy losses and limited EUR/USD’s upside. Later in the day, the US… Read More »EUR/USD Forecast: Euro holds above key 1.0760 technical level

The 10Y UST yield is closing in on the 4% mark as if a weak jobs report tomorrow was a given. But underlying is also a further slide of inflation expectations. The front end is lagging, however, and being already priced aggressively for cuts, it will probably need these to become more imminent to rally further. Rates continue to decline but the front end is lagging Market yields continued to drop with the 10y UST sinking to 4.11% and 10Y Bund to 2.2% yesterday. The driver was a weaker ADP private payrolls report, though some will point out that the correlation with the official payrolls data that is due tomorrow is actually negative. Possibly more relevant for the broader picture was the 5.2% figure for third-quarter productivity growth. It facilitated a 1.2% fall in unit labour costs, which is a positive impulse for a Fed still showing concern on inflation. Another supporting factor was a further decline in oil prices, which saw WTI fall below US$70/bbl. This picture of a reassessment of inflation as a driver does gel with a further slide in inflation swaps, in the US by more than 7bp in 2Y and close to 5bp in 10Y. In… Read More »Rates continue to decline but the front end is lagging