Today market outlook

[Zeologic]

Gold soared amid US economic data.

Yesterday gold prices extended their gains amid mixed US economic data. The price of gold rises drawing a body bull's candle with a slight shadow on the top and bottom of the candle. The bullish candlestick formed a low of 2403 and a high of 2450.

Data released yesterday, ADP Non-Farm Employment Change, showed that the actual data was 122k, smaller than the forecast of 147k with the previous revision being 155k. There is a difference between the actual data and the forecast of 25k, which shows an unfavorable value for the USD. ADP (Automatic Data Processing, Inc.) is economic data that measures the estimated change in the number of workers in the previous month, excluding the agricultural and government industries.

Meanwhile, the Employment Cost Index data shows that the actual data is 0.9% smaller than the expected 1.0% from the previous data revision of 1.2%. This economic data is considered important because It is a leading indicator of consumer inflation - when companies pay more for labor, the higher costs are usually passed on to consumers.

In other economic data, Chicago PMI showed actual data of 45.2, slightly greater than the expected 44.8 with the previous data revision of 47.4.

Pending Home Sales data shows actual data of 4.8% greater than expected 1.4% with previous data revision of -1.9%. This data measures changes in the number of contract homes that will be sold but are still waiting for the transaction to close.

Meanwhile, the Fed still left interest rates unchanged at 5.50%, even though Powell said he would cut interest rates once this year, predicted in September. According to the FedWatch tool from CME, the probability of the Fed cutting interest rates in September rose to 90.5%.

Today investors are still waiting for other inflation data, Unemployment Claims, and Manufacturing PMI.
 

[Zeologic]

AUDUSD continues to fall amid the Fed's decision to keep interest rates unchanged at 5.50%.

AUDUSD draws a long body bearish candlestick with small shadows on the top and bottom of the candle. Price formed a high of 0.65595 and a low of 0.64883.

Yesterday's US economic data saw the Fed keep interest rates unchanged at 5.50%, although the Fed may cut interest rates at the end of the year.

While unemployment claims increased by 249k from the previous 235k, analysts expected 136k, much less than expected meaning less good for USD.

Manufacturing PMI data was mixed, Final Manufacturing PMI 49.6 was slightly higher than the previous 49.5, still indicating contraction. ISM Manufacturing PMI 46.8 was lower than the previous 48.5, less supportive of USD strengthening>

ISM Manufacturing PMI showed 52.9 slightly higher than the previous 52.1, there was an increase in prices paid on goods and services.

The decline in AUDUSD was also influenced by the PBoC's recent rate cut weakening the Chinese yuan, which harmed the Australian dollar due to Australia's economic relations with China

The RBA is also expected to maintain interest rates at 4.35% at its upcoming meeting as recently published inflation figures in Australia have reduced the likelihood of further tightening.

Today investors will focus on NFP data which is forecast at 176k with previous data revised to 206k. The Unemployment rate data is predicted to be 4.1% from the previous revision of 4.1% too.

 

[Zeologic]

USDCHF extends losses due to increased demand for safe-haven currencies.

Last week, USDCHF drew a long body bearish candlestick indicating a sharp decline extending the previous decline. USDHF has tended to move downwards since May, reflecting increased demand for the Swiss Frank currency, which is one of the safe-haven currencies.

On D1 last week at market close, USDCHF formed a bearish long-body candle reflecting strong bearishness.

USD/CHF continued its losing streak after the release of Swiss Consumer Price Index data on Friday which showed an increase of 1.3% in line with expectations for consistency in July.

CPI data also matched expectations, falling -0.2% from the previous 0.0%.

On the other hand, US economic data which weakened the USD also encouraged strengthening the Franc Swiss. The NFP data was 114k which was much smaller than the expected 176k with the previous revision of 179k. Meanwhile, the Unemployment Rate data was 4.3%, up from the expected 4.1% from the previous revision of 4.1%.

Today the market is focusing on ISM Services PMI data which is expected to rise to 51.4 from the previous revision of 48.8.

 

[Zeologic]

Profit-taking brought gold down to $2364.

After the previous day, gold drew an indecision candle where the price formed a small body bearish candlestick with long shadows on the top and bottom of the candle. However, yesterday the price of gold fell sharply from a high of $2458 to a low of $2364.

However, this profit-taking action met resistance from buyers so the price drew a long body bearish candlestick and a long shadow at the bottom of the candle.

Yesterday US economic data, ISM Services PMI showed a value of 51.4 somewhat higher than the expected 51.1 with the previous data revision of 48.8. This economic data is one of the drivers for the USD to strengthen.

Gold should take support from widespread geopolitical risks in the Middle East, where attacks on Israel are now besieged on several fronts by Iran, Yemen, and Lebanon. Reportedly, Israel's ally, America, asked Jordan for permission to use its airspace to prevent attacks by Israel's enemies.

However, the gold price phenomenon is quite interesting, because there are other factors that investors consider.

China, which is the largest importer of gold, is also experiencing a vulnerable phase due to poor domestic demand. Caixin Manufacturing PMI surprisingly contracted in July to 49.8.

Meanwhile, slowing US economic growth has also triggered market changes. The July Nonfarm Payrolls (NFP) report showed that labor demand slowed significantly. The Unemployment Rate jumped to 4.3% versus expectations and the previous release of 4.1%.

However, according to the Fedwatch tool, there is a decline in confidence that the Fed will cut interest rates. This tool estimates the Fed rate in bps 475-500 at the level of 73.5% while the estimate of 500-525 is only 26.5%. The Fed will probably cut interest rates in September, which is predicted to be a reduction of 50 bps.
 

[Zeologic]

AUDUSD gets little RBA interest rate support.

Yesterday AUDUSD drew a bullish candlestick with rather long shadows on the top and bottom candle indicating the market is fluctuating. Price formed a high of 0.065412 and a low of 0.64717, open at 0.64955 and close at 0.65191.

Previously, AUDUSD price volatility showed the price falling at the low on August 5 at 0.63485 and drawing a Pin bar pattern indicating that in a bearish market, there was buyer pressure trying to take over the market direction.

At its meeting yesterday, the RBA still maintained interest rates at 4.35% for the seventh time today. The market seems not to respond much to the RBA interest rate as expected. Australia's still high inflation is the reason RBA Governor Bullock maintains high interest rates.

The RBA projections that inflation will not fall within the target range of 1-3% in the second quarter and forecasts an increase to 3.8%. The potentially restrictive RBA may support AUDUSD in the long term compared to the Fed which may cut interest rates at the end of the year and is expected in September.

Furthermore, the RBA Governor saw a decline in shares due to a weak reaction to the US employment report on Friday and fears of a recession in the US. The Australian dollar staggered, falling up to 2.4%, and tried to recover on Tuesday.

Today there is no high-impact news in the economic calendar, but investors may focus on RBA Assistant Governor (Economic) Sarah Hunter to see potential hawkishness or dovishness. New Zealand's high-impact news on employment and unemployment data may have an impact on NZD despite its slight correlation with the Australian dollar.

 

[Zeologic]

NZDUSD gains amid supportive New Zealand job data economic news.

NZDUSD price extended its increase yesterday drawing a long-body bullish candlestick with a rather long shadow on the top candle. The price reached a new high of 0.60245 on the support of New Zealand jobs data.

Yesterday, the release of Employment Change data showed a value of 0.4%, higher than expected -0.2% with the previous data revision of -0.3%. This change in the number of workers provides an indication of an increase in job creation, which is a leading economic indicator that reflects the majority of the entire economy.

On the other hand, the data released for the Unemployment Rate was 4.6% compared to the expected 4.7% with a revision of the previous data of 4.4%. Even though it is down compared to previous data, it is higher than analyst predictions. The number of unemployed is an important signal of overall economic health that correlates with consumer spending, although it is a lagging economic indicator.

These two economic indicators include high-impact news and yesterday NZDUSD formed a low of 0.50458 and a high of 0.60245 closing at a bullish candle at 0.59923. NZDUSD had fallen on August 5 at a low of 0.58493 but the whipsaw brought the price up to a close by drawing a bearish candlestick with a long wick small body. After that, prices tend to extend their increase.

Today the economic data that investors may pay attention to is Inflation Expectations, the previous data showed 2.33%. The Reserve Bank of New Zealand expects that the inflation target in the future will materialize into real inflation, so this could be related to interest rate policy.

 

[Zeologic]

Gold surged amid better US jobless claims data.

An interesting event happened with gold yesterday. After gradating since gold's sharp decline on August 5, gold prices are back to soar after successfully crossing $2400.

Gold price drew a long-body bullish candlestick with almost no shadow forming a high of $2427 and a low of $2378.

According to analysts, this precious metal soared because encouraging data from the United States (US) provided relief to financial markets, thereby weighing on demand for the US Dollar.

US jobless claims data showed actual data of 233k from the expected 241k with a revision of previous data of 250k. Decreasing unemployment claims indicates overall economic improvement.

With improving economic conditions enabling the inflation target to be achieved so that the public confidence index rises, the Fed will cut interest rates in September.

Meanwhile, geopolitical risks still support gold as a safe-haven asset.

Next, investors will focus on Fed officials who allow dovish or hawkish statements.

Today there is no important economic schedule related to USD, but there is news that may have a high impact on CAD regarding job data.

[Zeologic]

Gold prices are stable at market opening.

Gold price activity on Monday did not experience significant fluctuations, although it rose slightly, the movement was still within the previous price range with low volatility.

This can be seen on the M15 where the flat BB line with narrow band spacing reflects the gold price space within the lower limit of $2425 and the upper limit of $2434.

The absence of a gap at market opening may also be due to the absence of a trigger for an increase in gold prices on Saturday and Sunday.

However, expectations of the Fed's interest rate cut might provide positive sentiment for gold. However, it seems that investors are divided in the conclusion that the Fed will reduce interest rates by 50 basis points and some conclude that the reduction will only be 25 basis points.

Data from the FedWatch tool suggests interest rates will fall 25 basis points to 85.1%, interest rates will fall 50 basis points to 7.6% and interest rates will remain unchanged at 7.3%.

Today there is no high-impact news on the economic calendar schedule, normal price movements are predicted based on technical analysis.

 

[Zeologic]

Ahead of the CPI data, AUDUSD is stable near the 200 MA

AUDUSD drew a bullish candlestick with a small shadow on the top candle yesterday. The price formed a low of 0.65647 and a high of 0.66046 with a close price of 0.65850. The price moved slightly below the 200 MA, drawing a flat channel with a slight upward channel.

Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser spoke at the Economic Society of Australia Business Lunch event in Brisbane on Monday with several quotes, predicting huge economic uncertainty, inflation remaining high due to weaker supply and a tight labor market, there the risk of unemployment increases more rapidly. Household consumption increases in line with real income.

The market reaction to the quote brought AUDUSD to trade up drawing a bull's candle.

Today investors are waiting for important news that might get a market response. The Australian Wage Price Index is forecast to rise 0.9% from the previous 0.8%. This economic indicator measures changes in the prices companies and governments pay for labor. Actual value greater than the forecast is usually good for a currency.

Next, investors focus on US inflation data, PPI, which is also an important economic indicator used by the Fed to consider changes in interest rates. Core PPI is predicted to fall 0.2% from the previous 0.4%. This data measures changes in prices of finished goods and services sold by producers, excluding food and energy.

 

[Zeologic]

NZDUSD bounces ahead of RBNZ's Official Cash Rate

An interesting phenomenon occurred in the NZDUSD pair. The price of this currency pair soars drawing a bull candlestick with a long body small shadow on the top of the candle. Yesterday the price formed a low of 0.60112 and a high of 0.60811 close at 0.60636.

The increase in NZDUSD prices reaching the MA 200 line which draws a flat channel indicates that the long-term trend tends to be neutral.

The surge in NZDUSD prices extended the previous increase after ending the consolidation stage near the middle band line.

Today the RBNZ will officially announce the cash rate. The policy interest rate is now 5.50%, the highest since 2008.

Nine of 23 Bloomberg analysts surveyed predicted the RBNZ would begin a rate cut cycle, while markets were pricing in a 60% chance of a 25 basis point cut. Meanwhile, the forecast by Forexfactory is expected to keep interest rates unchanged at 5.50%.

Today, besides waiting for the RBNZ cash rate, investors are also waiting for US inflation data, CPI which is expected to rise 0.2% from the previous 0.1%.

 

[Zeologic]

AUDUSD is consolidating near MA 200

Yesterday, the AUDUSD price drew a long-body bearish candlestick with a shadow on the top candle.

AUDUSD price fell to the initial track near the MA 200 and middle band line which is the mean value of price deviation.

One of the reasons for the decline in AUDUSD prices was weaker commodity prices on Wednesday. Additionally, yesterday's US inflation data slightly supported the strengthening of the USD.

Meanwhile, the RBA maintained its benchmark interest rate at 4.35% due to its cautious stance not to rush into easing its policy. Core CPI is projected to reach the midpoint of the 2-3% range by the end of 2026.

RBA Governor Michele Bullock stated that an interest rate cut would not happen and he did not hesitate to raise interest rates if necessary to control inflation, reflecting a hawkish stance because inflation remains high.

Today investors are waiting for Australian Employment Change and Unemployment Rate data. Expected Employment Change of 20.2k is lower than the previous 50.2k and the Unemployment Rate is predicted to be the same as the previous data of 4.1%.

Apart from that, other important news is US retail sales and Unemployment Claims which are also of concern to investors.

[Zeologic]

EURCHF extends gains near 200 MA

Yesterday EURCHF rose drawing a long-body bullish candlestick with almost no shadow with a high of 0.95806 and a low of 0.95167 closing at 0.95726. The price breaks the middle band line rising slightly below the MA 200 and MA 50.

The 50 MA is drawing a slight descending channel trying to cross from the upside of the 200 MA which is drawing a flat channel.

Switzerland's CPI in July showed a 0.2% decrease compared to the previous month reaching 107.5 points with inflation +1.3% compared to the same month the previous year.

Currently, the SNB interest rate is 1.25% valid from 21 June 2024. The CHF currency is often considered one of the safe-haven currencies because of its long-term economic stability. Switzerland also has a long history of hard assets including gold reserves.

While the ECB rate is currently 4.25% effective from 12 June, the euro area annual inflation rate was 2.5% in June 2024, down from 2.6% in May.

EURCHF started an upward reversal on August 5 after a long downtrend wave.

[Zeologic]

Gold prices hit a new all-time high

Gold prices were unstoppable after breaking through the resistance zone in the Bollinger band range, thus forming a new all-time high at $2509.

Geopolitical risks and China's recovery could be the reason for the soaring gold prices in addition to waning fears of a US recession after better-than-expected US data.

According to the CME FedWatch tool, 75.5% expect the Fed's interest rate to fall by 25 bps, and 24.5% expect a 50 bps rate cut in September.

US economic data released last week has reduced fears of a recession. Higher-than-expected retail sales and lower jobless claims faded recession fears.

This week several important news will be released in the economic calendar schedule which may be of concern to the market, FOMC meeting minutes, and some other important economic data on August 22.
 

[Zeologic]

USDCAD extends declines earlier this week.

USDCAD yesterday drew a bearish candlestick continuing the previous decline. The price formed a long body bearish candlestick with a slight shadow on the top candle with a high price of 1.36840 and a low of 1.36327.

On the Weekly time frame, USDCAD declines for three consecutive weeks with the first week reflecting extreme declines.

The Bank Of Canada's interest rate is now at 4.50%, but market consensus expects the central bank to cut rates 25 bps from 4.50% to 4.25% at its September meeting.

Meanwhile, the market hopes that the Fed will cut interest rates at the end of the year, which is estimated in September the Fed will cut interest rates by 25 bps, from 4.50% to 4.25%.

Today investors are focused on Canadian inflation data, the Consumer Price Index which is forecast at 0.4% from previous data -0.1%.

[Zeologic]

EURCHF plummeted after a retest near MA 50.

EURCHF yesterday drew a long body bearish candlestick with almost no shadow. The price fell from a high of 0.95657 to a low of 0.94842 and back to near the middle band line.

The SnB rate is currently 1.25% while the ECB rate is 4.25%. Traders sometimes use high interest rate differences to carry out trade strategies.

CHF is a safe-haven currency because Switzerland has political stability and low inflation and this was proven when the global instability of the 2008 financial crisis occurred, investors switched to CHF and pushed its value higher.

Factors influencing the EURCHF value include ECB and SNB monetary policy, GDP, Employment change, industrial production, CPI, etc.

Other pairs that are positively correlated with EURCHF include CADCHF and USDCHF. Meanwhile, pairs with negative correlations such as CHFJPY, and CHFSGD.

[gacer23]

Gold’s rise aligns with weaker US economic indicators. ADP Non-Farm Employment Change and Employment Cost Index both underperformed, suggesting potential inflation concerns. While Chicago PMI showed a slight improvement, it didn’t counterbalance the broader trends.

For a different kind of pricing analysis, like KFC Preise, fluctuations in economic data can influence consumer spending and price adjustments in various sectors.

Edited August 21 by gacer23

[Zeologic]

GBPUSD extends its winning streak this week.

Yesterday GBPUSD drew a bullish candlestick continuing the previous bullish trend. Price formed a high of 1.31186, a low of 1.30101, and closed at 1.30830.

The market seems increasingly confident that the Fed will cut interest rates in September. Data from the FedWatch tool now shows 64% believe the Fed will cut interest rates by 25 bps and 36% believe the Fed will cut interest rates by 50 bps.

At the FOMC in July, Fed officials decided to keep the benchmark interest rate stable, with a tendency for some officials to start easing.

The main source for investors looking for clues about a rate cut is Fed Chair Jerome Powell's statement at the Jackson Hole Symposium on Thursday-Saturday which predated Powell's statement on Friday.

On the other hand, market expectations for a reduction in BoE interest rates have also increased. The UK Consumer Price Index (CPI) report for July showed core inflation slowed by 3.3% from the forecast of 3.4%.

Today investors focus on news that may have a high impact on currencies, Flash Manufacturing PMI and Flash Services PMI UK and US.

UK Manufacturing PMI is forecast at 52.1, the same as the previous release, and services PMI is forecast at 52.8 from the prior release of 52.5.

US Manufacturing PMI is forecast at 49.5 from the previous release of 49.6 and services PMI is forecast at 54.0 from the prior release of 55.0. Meanwhile, US unemployment claims are predicted to increase by 232k from the prior release of 227k.

[Zeologic]

Gold prices fell in the middle of the Jackson Hole Symposium

Gold price yesterday recorded a decline at a low of $2470 from a high of $2514 by drawing a bearish candlestick with a shadow at the bottom of the candle. The decline in gold prices answered the previous candlestick's indecision.

US Manufacturing PMI data released yesterday showed the actual value of 48.0 lower than the forecast of 49.5. However, the US Services manufacturing PMI showed actual data of 55.2, higher than the forecast of 54.0. The actual data is also higher than the previous data release of 55.0. The same US unemployment claims were expected to be 232k higher than the previous data release of 228k.

Weak US data signals an imminent US interest rate cut and continues to support Gold in general. The Fed is expected to cut interest rates in September. According to the CME group's FedWatch tool, expectations for a 25 bps rate cut rose 75%, while a 50 bps cut was 25%. A higher cut rate might support gold as a non-yielding asset.

Today investors may will wait for Jerome Powell's speech as head of the central bank which controls short-term interest rates and monetary policy to see the statement as hawkish or dovish.

[Zeologic]

NZDUSD managed to pass the high on June drawing a new high at 0.62359.

NZDUSD price fluctuations appear to have started a bullish sentiment journey since the beginning of the first week of August. NZDUSD's bullish sentiment appears unstoppable despite weaker New Zealand economic data. New Zealand retail sales showed actual data -1.2% lower than expected -1.0%, even much lower than the previous revision of 0.4%.

It seems that New Zealand's weak economic data was offset by Powell's dovish speech. In his Jackson Hole speech, Powell stated that the size and timing of interest rate cuts would depend on data, adopting a stance like the European Central Bank (ECB). He added that he believes inflation is on a sustainable path to return to 2% and inflation risks have reduced.

According to CME Group's FedWatch tool, 63.5% of investors believe the Fed will cut interest rates by 0.25%, and 36.5% believe it will cut by 0.50%.

The RBNZ interest rate is now 5.25%, this central bank has cut the previous interest rate to 5.50%, thus further suppressing the performance of the NZDUSD, which is also called KIWI by traders.

Today's economic calendar schedule does not show any high-impact news data, but some that may be of concern is US Durable Goods Orders data.

[Zeologic]

EURUSD corrected after surging last week.

EURUSD yesterday had difficulty extending its rising, stalling at the price range of 1.12000. Yesterday's price drew a bearish candlestick half the body of the previous candlestick indicating a possible retracement.

Speculation of the Fed cutting interest rates in September is getting stronger because Powell's dovish speech last Friday assured the public that it will cut interest rates because of indicators that convinced the 2% inflation target can be achieved. However, investors this week are waiting for US core PCE inflation data and Eurozone CPI for August.

Apart from the Fed possibly cutting interest rates in September, the European Central Bank (ECB) is also predicted to cut interest rates again at its September meeting. For further guidance on interest rate policy, investors will focus on inflation data from Germany and the European zone.

Another factor that investors are paying attention to is the US core Personal Consumption Expenditure (PCE) Price Index for July, which will be published on Friday.

Today's economic news that may get the attention of traders is US Consumer Confidence which surveyed 3,000 households which asked respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation.