2024-07-03 11:00

Gold Price, Analysis, and Chart Gold prices ticked higher in Europe and Asia Geopolitics continue to underpin the market The near-term uptrend is under some pressure Gold prices rose on Wednesday as the latest speech from Federal Reserve Chair Jerome Powell fed hopes that the next interest-rate move will be a cut, even if the timing remains uncertain. Speaking on Tuesday Powell said efforts to reduce price pressures had gone well, putting the United States on a ‘deflationary path.’ However, he said the Fed needs more proof. At present the markets think the central bank will have seen enough by September to start cutting rates. But it’s far from sure. Still, the prospect of a move offers gold support. Lower yields help assets like gold which lack intrinsic yield of their own. Beyond monetary policy, bulls can point to many supporting factors for the market. Geopolitical hotspots, from conflict in Ukraine and Gaza through to the crowded, uncertain global election procession are both playing their part. The latter has already produced shocks in France. It may do so this week in the United Kingdom. Then there’s sustained central bank gold buying and ongoing signs of firm Asian investment demand. Still, the market has handed back few of its hefty 2024 gains, and the prospect of weaker inflation across developed economies may leave gold prices more vulnerable. Plenty of speculative buying in both the physical and paper gold markets seen in the last two years will have been on the back of gold’s perceived role as an inflation hedge. The coming session offers US Purchasing Managers index numbers and the release of minutes from the Fed’s last policy meeting as likely market movers. Gold Prices Technical Analysis Daily Chart Compiled UsingTradingView Gold has had an astonishing run this year, hitting an all-time high of $2,450 at the start of May. Now progress has slowed. Of course, prices haven’t fallen far and the uptrend from last October’s lows remains both in place and, importantly, completely unthreatened. However, the nearer-term trendline from mid-March is very much in focus. It has already given way once, but the market very quickly traded back above it, if not by much. That line now offers the market near-term support just above an important retracement prop at £2,301.45. A durable slide below that might not find much solid ground ahead of the $2,200 region which was the base of the sharp, speculative climb seen in April. Of course, this market can still consolidate much further below that all-time high and still remain above any number of longer-term uptrends. But it also has the feel of a market that still looks a little frothy after such sharp rises. In short, the bulls probably have more to prove at this point, and traders should be wary of the clear prospect of some deeper falls. --By David Cottle for DailyFX https://www.dailyfx.com/news/gold-prices-gain-as-fed-s-powell-keeps-rate-cut-hopes-alive-20240703.html

2024-07-03 08:15

Euro (EUR/USD) Analysis and Charts French bond yields remain near multi-month highs Euro on hold ahead of high impact events The Eurozone economy continued to grow at the end of the second quarter, although momentum was lost as the expansion cooled to a three-month low, according to the latest HCOB Eurozone Composite PMI. The latest survey data highlighted a cooling of price pressures across the euro area. Rates of increase in input costs and output prices cooled to five- and eight-month lows, respectively, but remained above the pre-pandemic trends. Commenting on the PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank (HCOB), said: “Growth in the Eurozone can be attributed fully to the service sector. While the manufacturing sector weakened considerably in June, activity growth in the services sector continued to be nearly as robust as the month before. Considering the upward revision versus the preliminary flash PMI figures, the chances are good that service providers will remain the decisive force keeping overall economic growth in positive territory over the rest of the year." Euro traders are waiting for the outcome of the second round of the French election this Sunday. The National Rally (RN) continues to lead the polls but remains unlikely to get the 289 seats needed for an absolute majority. At the start of the week, the RN party was seen securing 280 seats and this seems unlikely to change as various centrists and left-wing parties band together to stop an RN majority. This would lead to a very uneasy alliance that would see French government bond yields move ever higher. French 10-year Bond Yield Euro traders will also be on guard for Friday’s US Jobs Report (NFPs), a known market mover and driver of short-term volatility. A multi-month sequence of lower highs and lower lows remains in place and for this pattern to continue, EUR/USD needs to trade below 1.0600. Short-term resistance is seen at 1.0800 with support at 1.0665. EUR/USD Daily Price Chart All charts using TradingView Retail trader data show 50.44% of traders are net-long with the ratio of traders long to short at 1.02 to 1.The number of traders net-long is 4.57% lower than yesterday and 17.19% lower than last week, while the number of traders net-short is 8.71% higher than yesterday and 16.30% higher than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse higher despite the fact traders remain net-long. What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/euro-eur-usd-nudges-higher-ahead-of-us-nfps-and-the-french-election-outcome-20240703.html

2024-07-02 11:00

British Pound (GBP/USD) Analysis and Charts GBP/USD is down but paring losses The market is looking first to Jerome Powell who is speaking later The Bank of England left rates alone last month but is expected to cut soon The British Pound was weaker against the United States Dollar on Tuesday but overall continues the sideways trading which has dogged it since the Bank of England’s June policy meeting. That resulted in no change to interest rates, but inflation seems to be relaxing quite markedly now and the market won’t be surprised to see borrowing costs fall in August. This prospect is naturally keeping a lid on any upside for Sterling across the board and not just against the Dollar. However, this week’s focus is likely to be on the ‘USD’ side of GBP/USD, with Federal Reserve Chair Jerome Powell due to speak later in the day, and minutes from the last rate-setting meet due for release on Wednesday. These will set the scene for Friday’s blockbuster – the official non-farm payrolls report. For its part the Dollar has seen a modest bounce as markets continue to fret the uncertainties attendant on a possible second Presidency for Donald Trump, with the prospect of increased tariffs should he return giving benchmark bond yields a boost and hurting risk appetite. Still, the market remains reasonably confident that the Fed will start cutting its own interest rate in September, and, although it’s likely to proceed cautiously from there, the prospect also keeps Dollar bulls in check. For now Sterling is on the back foot, although it has pared some of the losses seen earlier Tuesday in Asia. The UK’s General Election will take place on Thursday, but it seems to be having little effect on the currency, with victory for the opposition Labour Party in the price. GBP/USD Technical Analysis GBP/USD Daily Chart Compiled Using TradingView While GBP/USD is clearly struggling with a downtrend in place since mid-June, trading ranges have clearly narrowed into a new month and retracement support at 1.26212 seems to be the limit of bearish ambition in the short-term. The pair is now trading around both its 50- and 100-day moving averages, with a solid rise above those levels likely to see more consolidation. Still, Sterling bulls will have their work cut out to get back to the highs above 1.26972 which dominated trade between May and mid-June. A return to those levels would be positive for the Pound but doesn’t look likely. Below those levels the resumption of that downtrend will remain the most likely course for Sterling this week, even if falls are not deep. While this week’s big US events are likely to see some trading opportunities on GBP/USD, they’re unlikely to produce enduring moves unless they alter current interest-rate views. --By David Cottle for DailyFX https://www.dailyfx.com/news/british-pound-gbp-slips-but-ranges-hold-into-major-us-news-flow-20240702.html

2024-07-02 08:11

Gold (XAU/USD) Latest Charts and Analysis Gold remains rangebound despite longer-dated US Treasury yields moving higher. Fed chair Powell speaks at the ECB Forum on Central Banking later today. Gold has traded within a defined range over the past three months with neither buyers nor sellers able to gain the upper hand. Volatility has dropped to a multi-week low, while one technical indicator (CCI) shows the precious metal neither overbought nor oversold. The recent bout of US dollar strength, underpinned by a move higher in longer-dated US Treasury yields, may soon weigh on the precious metal and test range support. Since gold is typically priced in US dollars, a stronger greenback makes gold more expensive for investors using other currencies, potentially reducing demand. The US dollar index (DXY) is now probing levels last seen at the start of May. US Dollar Index (DXY) Daily Chart This year’s ECB Forum on Central Banking starts in Sintra, Portugal, bringing together various global central bank governors, academics, and financial market representatives. On the Policy Panel today, beginning at 14:30 UK, is Fed chair Jerome Powell and markets will be listening to see if he gives any clues about the health of the US economy and monetary policy moving forward. ECB Forum on Central Banking in 2024 This week also sees the release of a raft of US jobs reports and data, starting with the latest Jobs Openings and Labor Turnover Survey (JOLTs) at 15:00UK today. Job openings fell to 8.059 million in April, the lowest level since February 2021. Job openings are expected to fall further in today’s report to 7.90 million. Tomorrow sees the release of the latest ADP employment numbers and the weekly initial jobless claims, before the main event of this week, Non-Farm Payrolls are released on Friday at 13:30 UK. The US jobs data and chair Powell’s appearance at Sintra will be the main driver of any price action in gold this week. The precious metal is testing both the 20- and 50-day simple moving averages and a break below would bring range support into focus. Gold Daily Price Chart Charts via TradingView IG retail trader data show 58.77% of traders are net-long with the ratio of traders long to short at 1.43 to 1.The number of traders net-long is 0.41% lower than yesterday and 4.86% lower than last week, while the number of traders net-short is 4.48% higher than yesterday and 5.72% higher than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long. What is your view on Gold and Silver – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/gold-xau-usd-latest-will-fed-chair-powell-break-the-precious-metal-s-range-20240702.html

2024-07-01 15:10

US Dollar (DXY) Back to Flat on the Day After German Inflation and US ISM Data US dollar index driven by Euro moves. ISM report shows ongoing weakness in the US manufacturing sector. Economic activity in the US manufacturing sector contracted in June for the third straight month, and the 19th time in the last 20 months, according to the latest ISM manufacturing report. According to Timothy Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee, “Demand remains subdued, as companies demonstrate an unwillingness to invest in capital and inventory due to current monetary policy and other conditions. Production execution was down compared to the previous month, likely causing revenue declines, putting pressure on profitability. Suppliers continue to have capacity, with lead times improving and shortages not as severe.” Attention now turns to the monthly US Jobs Report on Friday (July 5th). US financial markets are closed on Thursday to celebrate July 4th, so the NFP data may not get the same amount of attention it usually commands as traders may look to extend their Independence Day holiday. The US Dollar Index picked up a very small bid after the data but the greenback’s price action today is being driven by the Euro after the first round of the French elections on Sunday. The Euro accounts for nearly 58% of the US dollar index. The Euro opened the week higher after the results of the first round of voting suggested that the French right-wing party RN would not get an overall majority in the second round of voting. The Euro then gave back some early gains as the latest German inflation release showed price pressures easing by slightly more than expected. The DXY remains pointing higher and looks set to re-test the recent double high around 106.15. US Dollar Index Daily Chart What are your views on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/us-dollar-dxy-back-to-flat-on-the-day-after-german-inflation-and-us-ism-data-20240701.html

2024-07-01 11:00

Oil benchmarks rose by more than 5% in June They’ve started July with further gains Still, the WTI market remains well within its broader long-term range Get your hands on the new Oil outlook for Q2 with exclusive insights into key market catalysts that should be on every trader's radar: Crude oil prices started July with some gains on Monday, as hopes for strong northen-hemisphere summer demand and ongoing output cuts put a floor under the market even after a strong month of gains. Both the United States’ West Texas Intermediate and international bellwether Brent added more than 5% through June. These gains came despite enduring worries about the health of the global real economy and, by extension, energy demand, and a serious reining-in of interest-rate cut expectations in the US. So, what was behind their vigor? Well, the Organization of Petroleum Exporting Countries and its allies agreed last month to extend price-boosting production cuts into 2025. This led some analysts to forecast severe pressure on supply and a drawdown of stockpiles in this year’s third quarter. This factor is clearly still supporting the market, even as supply from sources outside so-called ‘OPEC plus’ countries continue to weaken that groups’ grip on prices. Sadly, conflicts between Russia and Ukraine and Israel and Hamas and its proxies continue to keep upward pressure on oil prices, as do political uncertainties. Many major countries will see key votes in the year’s second half, culminating of course with the US. France already has the process under way. Near-term trading cues will include Monday’s look at US manufacturing from the Institute for Supply Management. However, this is likely to be a mere warm-up act in the current, monetary policy obsessed environment for Federal Reserve Chair Jerome Powell, who will speak on Tuesday. Last week ended with a snapshot from the Energy Information Administration which showed both production and demand for major petroleum products had his four-month high in April. There isn’t another OPEC ministerial meeting on the sked next year, which will leave the market reliant on the group’s monthly reports. US Crude Oil Technical Analysis Daily Chart Compiled Using TradingView Prices have nosed above psychological resistance at $82, continuing the run of gains which have seen them rise by close to $10 since the beginning of June. That rise has taken the market above the downtrend line from the peaks of mid-June 2022, where it remains. Focus now is on the broad range top from November last year, at $83.22. This range has been broken above since, but it tends to be traded back into quite quickly when it is. However, for now the market seems to be settling into a shorter-term range between 80.45 and $82.20. The direction in which this range breaks will likely be important for near-term direction, so keep an eye on that as July gets going. Are you new to commodities trading? The team at DailyFX has produced a comprehensive guide to help you understand the key fundamentals of the oil market and accelerate your learning: --By David Cottle For DailyFX https://www.dailyfx.com/news/us-crude-oil-starts-july-with-gains-as-markets-look-to-increased-summer-demand-20240701.html