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EUR/USD registered its highest daily close since early February on Monday. The technical outlook suggests that the bullish bias remains intact. The pair could push higher once it stabilizes above 1.0860. EUR/USD extended its recovery at the beginning of the week and registered its highest daily close since early February at 1.0850 on Monday. The pair faces immediate resistance at 1.0860 and it could continue to push higher once this level turns into support. European Central Bank (ECB) President Christine Lagarde told the European Parliament on Monday that wage pressure in the Euro area were still strong and added that the restrictive policy stance was acting as a safeguard against a wage-price spiral. Lagarde’s remarks helped the Euro hold its ground during the American trading hours.

European and American stocks kicked off the week with a pause, as investors took a breather after sending major stock indices in these regions to record highs. The Stoxx 600, the S&P500 and Nasdaq 100 all retreated from an ATH level on Monday. MAMAA stocks were down around 1%, Amazon – which had it first day at Dow Jones Industrial index fell 0.15% whereas Nvidia managed to eke out a small gain. It feels like there is a moment of calm and silence in the aftermath of major tech earnings, investors will decide whether this rally deserves to continue higher straight away. The week brings some important economic data on the table. The US will release its latest growth and inflation updates this week. And favourable data – meaning resilient but not abnormally strong growth, coupled with softening inflation, would allow the market bulls to surf on the ‘goldilocks’ wave. If that’s the case, we could see the stock market rally continue, and to broaden to sectors other than the technology stocks. The equal weigh S&P500 index could make an attempt to catch up the technology-heavy S&P500. If not, if growth is resilient, but inflation ticks higher in a way… Read More »Calm before the data

Gold price bounces toward two-week highs of $2,041 early Tuesday. US Dollar sags with US Treasury bond yields, as key economic data awaited. Gold price teases a pennant breakout and Bull Cross on the 4H chart. Gold price is attempting another run toward the two-week highs of $2,041 reached on Friday, as the US Dollar keeps its downbeat tone intact amid renewed weakness in the US Treasury bond yields and ahead of the top-tier US economic data. Gold buyers take chance as US data looms A sense of caution prevails in Asian trading early Tuesday, as traders eagerly await a fresh batch of high-impact US economic data, including the Durable Goods Orders and Consumer Confidence, for a fresh signal on the timing of the US Federal Reserve (Fed) policy pivot. Markets are currently pricing in about an 80% chance of a no rate cut by the Fed in the May meeting while the probability that the Fed will begin lowering rates in June stands at 60%, down from about 70% seen last week. Hawkish commentaries from Fed policymakers continue to push back against rate cut expectations, helping the US Treasury bond yields find a floor On Friday, New York Fed… Read More »Gold Price Forecast: XAU/USD looks to test $2,050 ahead of key US data

AUD/USD reversed its multi-session positive streak on Monday. The 0.6600 region continues to cap the upside bias. Iron ore prices retreated to four-month lows on Chinese jitters. The upward momentum of the Australian dollar halted on Monday after eight consecutive sessions of gains vs. the US Dollar (USD). In fact, AUD/USD reversed its upward trend despite the continuation of the sell-off in the Greenback and exclusively in response to the marked drop in prices of the tonne of iron ore, which reached multi-month lows near $126.00 on the back of rising inventories and further uncertainty around the Chinese housing market. Price action in spot also followed the lacklustre performance of the US Dollar, as investors continued to assess the likelihood of the start of monetary easing by the Federal Reserve (Fed) around June or later. This evaluation gained momentum following the latest robust US inflation data, along with persistently hawkish comments from certain Fed officials. Despite the recent recovery of the pair, investors are expected to closely monitor developments in China, fluctuations in commodity prices (especially copper and iron ore), and movements in the Greenback. While additional stimulus measures in China could temporarily support a rebound, news indicating a more… Read More »AUD/USD Forecast: Decent resistance emerges around 0.6600

Outlook: This week the star of the show will be the PCE price index on Thursday. Bloomberg reports a consensus forecast of 2.8% y/y from 2.9% in January. Even though the m/may go up, with headline up 0.3% and core a bigger 0.4%. Today we get new home sales and the Dallas Fed manufacturing survey for Feb, neither a noteworthy market-mover. Before then (tomorrow), we get consumer confidence and on Friday, the ISM manufacturing PMI, generally considered a bit better than the other one (from S&P). The Reserve Bank of New Zealand is imagined by some to be in hiking mode—both TD and ANZ call for a hike this time (Wednesday) and another one at the May meeting. Two other banks are calling for a hold. A recent survey by the central banks showed consumers are not anchored to falling inflation and the 2-year outlook is for a rise to 3.2% from 3.0%. Let’s note once again that “expectations” are feelings, almost certainly not well informed, and feelings can be manipulated by strong words. It’s possible the RBNZ just shouts hawkishly. We get CPI from Australia on Wednesday, possibly a tiny rise that would justify a seemingly hawkish RBA tone. We… Read More »The week star of the show will be the PCE price index on Thursday

XAU/USD Current price: $2,027.49 US Treasury yields are on the rise, giving near-term support to the USD. Investors are waiting for the US Core Personal Consumption Expenditures Price Index. XAU/USD gains bearish traction in the near term, but not everything is lost for bulls. Spot gold trades with a soft tone in the American session, extending its early decline to fresh intraday lows. The bright metal opened the week with a mild bearish gap but quickly filled it to stabilize around $2,035. XAU/USD currently trades below the $2,030 mark, as the US Dollar benefits from an increased caution. Stock markets trade mixed, reflecting the wait-and-see mood. US indexes consolidate near record highs but fail to extend gains ahead of critical macroeconomic releases scheduled throughout the week. Attention centers around the US Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) favorite inflation gauge, after the unexpected uptick in the  January Consumer Price Index (CPI). Meanwhile, the USD is finding additional support in raising US Treasury bond yields, up following auctions. The 10-year note currently offers 4.299% after falling to 4.217% earlier in the day. XAU/USD short-term technical outlook The daily chart for XAU/USD  shows decreasing buying interest. The… Read More »Gold Price Forecast: XAU/USD under mild pressure near $2,030

EUR/USD Current price: 1.0853 Market participants await critical inflation figures for the United States and the Eurozone. European Central Bank President Christine Lagarde speaks about the ECB Annual Report. EUR/USD trades just below a Fibonacci resistance level with an increased upward momentum. The EUR/USD pair is marginally higher on Monday, trading in the 1.0850 price zone ahead of the United States (US) opening. The US Dollar is under selling pressure after struggling for direction on Friday, although major pairs remain within familiar levels. The market mood tumbled during Asian trading hours following news from late last week that Moody’s Investors Services removed credit rantings from several Chinese companies, spurring concerns about the country’s economic health. The sentiment improved partially in Europe, as most local indexes trade with gains, but investors remain cautious ahead of stellar inflation-related figures scheduled throughout the week. Next Thursday, the US will release the Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) favorite inflation gauge. Also these days, Europe and Germany will unveil the preliminary estimates of the February Harmonized Index of Consumer Prices (HICP), while China will publish the official NBS Producer Manager Indexes (PMIs). In the near term, the focus is… Read More »EUR/USD Forecast: Bulls maintain the pressure

Core PCE, the Federal Reserve’s preferred inflation gauge is the main event of the week. An update to US GDP in Q4 and January’s Durable Goods Orders provides hard data. The forward-looking ISM Manufacturing PMI has the last word of the week. The calendar shows February 29 only once every four years – and this one also features the Fed’s favorite inflation measure, the Core Personal Consumption Expenditures (PCE) Price Index. That is the week’s highlight, but there are several other market-moving events.   1) US Durable Goods Orders Tuesday, 13:30 GMT: How has investment kicked off in 2024? This report for January will shed some light. Various factors skew the headline figure, but the non-defense ex-aircraft one is “core of the core” and feeds into GDP calculations. Better data would boost the US Dollar and hurt Gold, but not necessarily hurt stocks. While rate hikes are adverse for shares, investment generally implies ongoing sales later on.   2) US GDP (second estimate) Wednesday, 13:30 GMT: The first release of growth data for the fourth quarter of 2023 showed a strong increase of 3.3% annualized. Any downgrade would provide some hope that the economy is not as hot as previously estimated, while… Read More »Five fundamentals for the week: Fed favorite PCE stands out as turbulent month ends

EUR/USD holds comfortably above 1.0800 to start the new week. The pair could face next resistance at 1.0860 once it stabilizes above 1.0830. New Home Sales for January will be the only data featured in the US economic docket on Monday. Despite Friday’s indecisive action, EUR/USD closed the previous week in positive territory. The pair continues to inch higher early Monday and the technical outlook suggests that the bullish bias remains intact. The US Dollar (USD) struggles to find demand in the European morning as US Treasury bond yields stretch lower. After losing nearly 2% on Friday, the benchmark 10-year US Treasury bond yield is already down another 1% on Monday, retreating toward 4.2%. Later in the day, the US Treasury will hold 5-year and 2-year note auctions. A pullback in high-yields in these auctions could put additional weight on the USD’s shoulders. In the meantime, US stock index futures are down between 0.2% and 0.3% in the European session. Following the previous week’s risk rally, a negative shift in market mood could help the USD stay resilient against its rivals. January New Home Sales will be the only data featured in the US economic docket, which is forecast to… Read More »EUR/USD Forecast: Euro keeps the bullish bias to start the week

Gold price corrects further from two-week highs of $2,041 early Monday. US Dollar rebounds amid risk-aversion, despite falling US Treasury bond yields. Gold price could see a pullback after closing the week above the key 50-day SMA at $2,033. Gold price is reversing a part of the previous week’s advance to two-week highs of $2,041 in Asian trading on Monday. Resurgent US Dollar demand and tepid risk sentiment are aiding the correction in Gold price. The downside in Gold price, however, could remain cushioned by the extended fall in the US US Treasury bond yields. Gold price stays defensive amid a quiet start to the week The US Dollar is drawing fresh haven demand, courtesy of fresh weakness in the Chinese stock markets, as geopolitical tensions resurface between China and Taiwan, as well as between Washington and Beijing. China’s Commerce Ministry said on Monday, “the US falsely claims that China has created ‘overcapacity’, which fully reflects the US side’s unilateralism and hegemonic behavior.” Separately, China’s authorities said that the Fujian Coast Guard is boosting patrols in waters near Taiwan’s Kinmen islands “to strengthen law enforcement inspections in key areas.” Investors also trade with caution ahead of a data-packed US calendar, with… Read More »Gold Price Forecast: XAU/USD yields a weekly close above $2,033, what next?