2024-02-02 13:56

US Dollar and Gold Analysis US dollar rallies after US NFPs beat expectations by a wide margin. Gold slides as US rate cut expectations are pushed back. The latest US NFP release showed the US jobs market in rude health with 353k new jobs created in January compared to forecasts of 180k. Last month’s headline figure was also revised higher to 333k from 216k. The closely watched unemployment rate remained steady at 3.7%. The US dollar was on the backfoot going into the Jobs Report as recent demand for US Treasuries sent their yields tumbling. Renewed US regional banking fears – shares in New York Community Bancorp slumped by around 40% on Wednesday – drove haven demand, leaving the greenback vulnerable to the downside. New York Community Bancorp Daily Price The US dollar index jumped around 50 ticks after the release hit the screens, reversing all of today’s earlier losses. The greenback remains rangebound, for now, but may soon test the 103.83/85 double highs seen over the last couple of weeks. US rate cut expectations pared post-release with less than a 20% chance now seen of a cut in March – from 35% before the release – while May expectations are now 77% compared to a high 80s earlier. US Dollar Index Daily Chart Gold’s recent grind higher was quickly reversed after the 13:30 release. Gold tagged $2,065/oz. yesterday, before paring gains. Gold currently trades at $2,033/oz. and is sitting on a prior level of horizontal support and both the 20- and 5-day simple moving averages. A break below here bring $2,009/oz. back into play. Gold Daily Price Chart Chart via TradingView Retail trader data show 53.45% of traders are net-long with the ratio of traders long to short at 1.15 to 1.The number of traders net-long is 4.72% lower than yesterday and 13.51% lower than last week, while the number of traders net-short is 19.02% higher than yesterday and 19.14% higher than last week. See how daily and weekly changes in IG Retail Trader data can affect sentiment and price action. What is your view on Gold – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/us-dollar-jumps-after-nfps-smash-estimates-us-dollar-rallies-gold-slumps-20240202.html

2024-02-02 09:12

Oil (Brent, WTI) Analysis OPEC+ maintains voluntary output cuts Brent crude oil on track for large weekly loss WTI eyes channel support with key level holding as resistance The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library OPEC+ Maintains Voluntary Output Cuts OPEC+ has maintained its output cuts and will meet again in March to decide on output levels for Q2, according to two OPEC sources quoted by Reuters. The announcement comes at a time when oil prices have dropped lower since the spike high on the 29th of January around $84. Increased production from non-OPEC, oil producing nations has, in part, offset the effect of OPEC’s output cuts. The US has been at the forefront of the efforts to increase oil supply and in 2023 achieved record oil output levels however, supply growth in the US is anticipated to drop to 300,000 barrels per day (bpd) from 800,000 bpd last year. Brent Crude Oil on Track for Weekly Loss UK oil is set for a sizeable loss this week after opening the week to mark the swing high. Since then, the Fed and Bank of England voted to keep interest rates at restrictive levels, which constrains economic activity. Speaking of economic activity, sentiment around China and its mixed economic recovery took a hit this week as the manufacturing sector contracted for a fourth straight month. The local Chinese index, the SSE Composite Index took a massive hit this week and today in particular, falling 8.75% on the week and sliding as much as 4.7% to mark the daily low. Brent is supported by the 50-day simple moving average (SMA) after crashing below the 200 day SMA with ease earlier in the week. The next level of support appears around $77 with resistance back at the 200 SMA. Brent Crude Daily Chart Source: TradingView, prepared by Richard Snow Oil is a market intrinsically linked to underlying determinants of supply and demand. Read up on the essentials here: WTI oil has also dropped substantially this week and, like Brent crude oil, is supported by the 50 day SMA. In the event bears can take prices lower considering the unconvincing Chinese growth story, channel support would come into focus at $72.50/$72.00. Resistance remains at the 200 SMA which coincides with the significant long-term level of $77.40. WTI Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/brent-wti-update-oil-on-track-for-sizeable-weekly-loss-20240202.html

2024-02-01 21:45

GOLD PRICE OUTLOOK The U.S. nonfarm payrolls survey will steal the limelight on Friday A weak jobs report should be bullish for gold prices, while strong data should be negative for the precious metal This article scrutinizes gold’s technical outlook in the near term Most Read: US Dollar Forecast: Technical Analysis on USD/CAD, AUD/USD and NZD/USD The Federal Reserve concluded earlier this week its first meeting of 2024, voting to maintain its policy settings unchanged. The FOMC also abandoned its tightening bias, but indicated it will not rush to cut borrowing costs. Chairman Powell went a step further by acknowledging that officials may not yet be confident enough to remove restriction at their next gathering. Although the possibility of a rate cut in March has diminished, the situation could change again if incoming information shows that activity is starting roll over. In the grand scheme of things, a weaker economy could prompt policymakers to reconsider their stance; after all, data dependency has been the guiding principle for the central bank recently. Given the present state of events, the January U.S. employment report will assume greater importance and carry added weight. That said, Wall Street projections suggest U.S. employers added 180,000 workers last month, though a softer outcome should come as no surprise following a subdued ADP reading and rising jobless claims for the period in question. Eager to gain insights into gold's future path? Discover the answers in our complimentary quarterly trading guide. Request a copy now! UPCOMING US JOBS REPORT If nonfarm payrolls figures prove lackluster and fall well short of expectations, a March rate cut might be back on the table. Under these circumstances, we could observe a sharp retracement in U.S. Treasury yields and the U.S. dollar. This scenario is likely to foster a constructive environment for gold in the near term. On the other hand, if NFP numbers beat consensus estimates by a wide margin, there’s potential for further reduction of dovish wagers on the Federal Reserve’s monetary policy outlook. In this scenario, bond yields and the greenback could accelerate to the upside, weighing on the precious metals complex. In this context, bullion could find itself in a precarious position in February. Wondering how retail positioning can shape gold prices? Our sentiment guide provides the answers you are looking for—don't miss out, get the guide now! GOLD PRICE TECHNICAL ANALYSIS Gold climbed on Thursday, pushing past the $2,050 barrier and coming within a hair's breadth of breaking $2,065, a key ceiling. With the bulls reasserting control, this resistance could soon be overcome. If that scenario plays out, a rally toward $2,085 is possible. On further strength, the focus will turn to $2,150. Conversely, if buying interest fades and XAU/USD pivots lower, it's vital for traders to watch the $2,050 level for bearish activity. If this area fails to offer support, a drop toward the 50-day simple moving average may unfold, followed by a possible retest of $2,005. Below this floor, all eyes will be on $1,990. GOLD PRICE TECHNICAL CHART Gold Chart Created Using TradingView https://www.dailyfx.com/news/gold-price-forecast-us-jobs-data-to-shape-near-term-trend-setup-on-xau-usd-20240201.html

2024-02-01 14:00

Dow Jones, Nasdaq 100, Hang Seng Analysis and Charts Dow retreats from record highs The index has fallen back from all-time highs and is currently testing trendline support from the mid-January low.In the short term, a break of support could test the area around 37,840, which was the late December high. Below this comes the 37,100 area that marked the low at the beginning of January. A close back above 38,500 would put the price on course to hit new record highs. DowJones Daily Chart Nasdaq 100 drops following Fed decision Further weakness in the wake of the Fed decision comes following losses earlier in the week after Alphabet and Microsoft earnings.Trendline support from early January comes into play around 17,150, and a break of this would then target the 16,630 area, which formed support in mid-January. The 50-day simple moving average (SMA) could also form support once more. A rebound above 17,400 puts the price on course to target the previous highs. Nasdaq100 Daily Chart Hang Seng heads lower Despite various new items around state support for the stock market, and a recent cut to bank reserve ratios, the Hang Seng continues to head lower.The most recent rebound carried the price back above 16,000, but then it has faltered below the 50-day SMA. Continued losses now target the late January low at 14,778. Below this lies the 14,581 low of October 2022. A short-term rebound could target 16,000 once more, and then towards the 16,300 zone that marked resistance last week and earlier in January. Hang Seng Daily Chart https://www.dailyfx.com/news/dow-nasdaq-100-fall-after-fed-decision-while-hang-seng-decline-continues-20240201.html

2024-02-01 12:41

BoE Stands Pat (Vote Split: 2 Hike, 6 Hold, 1 Cut) BoE keeps rates unchanged – MPC casts first vote for a rate cut but two hawks hold firm, voting for another hike BoE forecast sees inflation fast approaching target only to turn higher until 2026 – dampening optimism GBP, 2-year Gilt yield and the FTSE perk up after the announcement MPC Casts First Vote to Cut but Two Hawks Hold Firm on Another Hike The BoE held the UK benchmark rate steady but interestingly enough the Monetary Policy Committee, the bank’s decision-making body, appears more divided than before. Six members voted to maintain rates as is but two held out for another hike; and the well-known dovish member, Swati Dhingra voted in favour of a first rate cut for the Bank of England. Resurgent Inflation Forecast Taps the Brakes on Rate Cut Expectations One of the most interesting revelations of the monetary policy report was the forecast for inflation to drop to target in Q2 this year, which implies phenomenal progress when compared to the November figures which estimated only reaching the 2% target at the end of 2025. This you would think is great news if the Bank of England didn’t expect inflation to re-emerge, remaining above target until the end of 2026. One of the more closely observed indicators of the Bank’s medium-term inflation outlook is the 2-year CPI forecast which rose notably to 2.3% from November’s estimate of 1.9% - further highlighting the risk of sticky inflation. The Three Conditions for Rate Cuts Make Progress The Bank of England has often referred to the labour market, private wage growth and general services inflation when responding to the likelihood of interest rate cuts. The end of year dip in services inflation is expected to rise to 6.6% before falling towards 5% in Q2. Wage growth however, is expected to continue to make progress, dropping to 4% and the end of this year compared to the November forecast of 4.25%. The Bank anticipates that unemployment will ease but at a slower pace than anticipated. Sterling, 2-Year Gilt Yield and the FTSE Perk up After the Announcement Sterling picked up a bid on the news as markets eased expectations of rate cuts. The 2-year Gilt yield rose in kind, while the FTSE 100 also partook in the post-MPC advance. Multi asset reaction to the news Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/boe-kept-rates-unchanged-but-drastic-inflation-outlook-delays-cuts-20240201.html

2024-02-01 10:40

EUR/USD Analysis and Charts EUR/USD has been hit by a post-Fed bout of Dollar Strength The US Central Bank pushed back early rate-cut bets Eurozone inflation suggests there won’t be any early move from the ECB either The Euro continued to wilt against the United States Dollar on Thursday as the Federal Reserve’s commentary from the previous session gives the latter broad strength. A slight fall in Eurozone headline inflation had little impact on the pair, perhaps because the core rate topped forecasts. The US central bank left borrowing costs alone, as had been universally expected. However, while its next move is still thought likely to be a rate cut, Chair Jerome Powell’s words after the decision left the markets pretty sure that no such move is coming at the Fed’s next policy call, slated for March. Indeed, May is now thought a more likely bet. The US economy has proven more resilient than expected to higher interest rates, and the Fed will want to be certain that inflation has been tamed before it acts. The prospect of US rates on hold for longer at their current, 23-year highs naturally offers the Dollar support across the board. Eurozone consumer price inflation for January came in at 2.8% on the year according to data released on Thursday. That was exactly as expected and a tick below December’s rate. However, the ‘core’ measure, which strips out the effects of food, fuel, alcohol, and tobacco, was 3.3%. That was just above the 3.2% expected. Overall, the data suggest that market pricing of an April interest rate cut from the European Central Bank might be optimistic even with inflation relaxing in both France and Germany. EUR/USD Technical Analysis EUR/USD Chart Compiled Using TradingView The last two days’ falls have seen EUR/USD slide beneath its 200-day moving average. While this shouldn’t be underestimated as a bearish signal, it’s worth bearing in mind that the move has come as a ‘Dollar strength’ story, rather than a ‘Euro weakness’ one, and maybe a little less impactful for that. However the Euro is now back into a trading range last seen in early December. The Centre of that range is 1.07961, the third Fibonacci retracement of the rise up to late December’s highs from the lows of October 3. There’s likely support at 1.07254, the range base from December 8, ahead of further retracement support at 1.07154. A fall below that would leave the region below 1.05 vulnerable once again. Bulls need to retake and hold the current range top at 1.08487 if they’re going to mount a convincing fightback. IG’s sentiment indicator finds traders bearish at current levels, if not overwhelmingly so. The uncommitted may be well advised to see if weakness endures into the week’s close before taking a position. --By David Cottle for DailyFX https://www.dailyfx.com/news/eur-usd-battered-by-fed-stays-down-despite-small-core-hicp-beat-20240201.html