Daily Market Analysis By zForex

Gold Eyes Support at 2368

In gold the first support is at 2368, with subsequent levels at 2345 and 2320 below that. Above, the initial resistance is at 2395, followed by 2405 and 2430 if this level is surpassed.


US Inflation Data Boosts Gold Prices, Traders Eye Fed Rate Cut

On Friday, gold dipped below $2,410 per ounce after a nearly 2% increase in the previous session but remains poised for its third consecutive weekly gain. Softer-than-expected US inflation figures, with headline inflation easing to a one-year low of 3% in June and annual core inflation dropping to a three-year low of 3.3%, boosted expectations for a Federal Reserve interest rate cut. Traders now see a 93% probability of a September rate cut, up from 73% earlier in the week. San Francisco Fed President Mary Daly supports rate cuts, while Chicago Fed President Austan Goolsbee remains optimistic about achieving 2% inflation.

The dollar index hovered around 104.5 on Friday, poised for a second weekly decline, as subdued US inflation and recent Fed statements solidified expectations of a September rate cut. The index dropped sharply to 104.08 on Thursday after reports showed US annual inflation fell to 3% in June, a one-year low, missing expectations of 3.1%. Market sentiment now reflects over a 90% probability of a September rate cut, up from around 70% earlier in the week. Investors await US producer inflation data for further insights. The dollar faced pressure from a strengthening yen amidst suspected Japanese intervention.

The Japanese yen hovered around 159 per dollar on Friday, showing volatility after a significant rebound in the previous session due to suspected intervention amidst cooler-than-expected US inflation data. The yen surged by 2.6% to 157.42 per dollar on Thursday, reportedly spurred by official purchases to support the currency after it fell to 38-year lows. Reports indicated that the Bank of Japan (BOJ) conducted rate checks with banks on the euro-yen cross, raising concerns of additional intervention. Senior currency diplomat Masato Kanda declined to confirm government involvement in the yen’s rally. Investors focus on the BOJ’s late July policy meeting, expecting plans for tapering bond purchases and potentially raising interest rates.

EUR/USD Faces Initial Resistance at 1.0865

In the EUR/USD pair, the initial resistance will be at 1.0865, followed by 1.0900 and 1.0950 if this level is surpassed. On the downside, the first support is at 1.0850, with subsequent supports at 1.0810 and 1.0780 below that.

Gold Testing Key Support at 2395

In gold the first support is at 2395, with subsequent levels at 2365 and 2340 below that. Above, the initial resistance is at 2405, followed by 2430 and 2470 if this level is surpassed.


Market Outlook: Gold Soars to $2,430 with Fed Rate Cuts Nearly Priced In

Gold surged to approximately $2,430 an ounce on Tuesday, nearing new all-time highs. This follows Fed Chair Powell’s comments that strengthened expectations for imminent interest rate cuts. Powell noted that recent data “add somewhat to confidence” that inflation is moving toward the target. Investors are focused on US retail sales data and further Fed comments for guidance on monetary policy. Markets have nearly fully priced in a September rate cut, with two more reductions expected by year-end. However, gold could face pressure from a rising dollar and increasing Treasury yields.

The New Zealand dollar fell to around $0.605, nearing a two-week low, as investors await Q2 inflation data. Economists forecast consumer inflation slowed to 3.5% from 4%, the lowest in three years. The RBNZ maintained the cash rate at 5.5% last week but suggested policy could become less restrictive if inflation continues to decline, increasing the likelihood of an August rate cut. The Kiwi also faced pressure from a slight rise in the US dollar.

The dollar index rose above 104.3 on Tuesday, marking its second consecutive session of gains. Powell’s comments that inflation is moving toward the target and the Fed won’t wait for 2% before cutting rates boosted the dollar. Markets have nearly fully priced in a September rate cut, with two more expected by year-end. The dollar also received safe-haven demand after a failed assassination attempt on former President Trump. The dollar appreciated against all major currencies, with the most significant gains against the Kiwi and yen.

EUR/USD Eyes Resistance at 1.0895 and Beyond

If the EUR/USD pair cannot hold above 1.0900, the first resistance level will be 1.0895. If it maintains above this level, the next resistances to watch will be 1.0920 and 1.0950. On the downside, the first support is at 1.0870, and if this level is broken, the next supports to monitor will be 1.0830 and the 200-day moving average at 1.0800.


Pound Extends Gains: Eyeing Resistance at 1.3000

With the stronger-than-expected growth data, the pound continues its upward trend, with the first resistance level at 1.3000. If this level is breached and maintained, the next resistance levels to watch will be 1.3085 and 1.3150. On the downside, the first support is at 1.2920, and if this level is broken, the next supports to monitor are 1.2860 and 1.2820.


Yen Stabilizes, Dollar Under Pressure, and Gold Hits Record High

The Japanese yen stabilized around 158.4, remaining close to its strongest levels in a month with concerns that authorities might intervene again to support the currency. Last week, the yen gained about 2% following the US inflation data, with Bank of Japan reports indicating that the government may have spent nearly 6 trillion yen on interventions on Thursday and Friday. On the monetary policy front, the BoJ is expected to announce plans to taper bond purchases and potentially raise interest rates at its upcoming meeting later this month. Additionally, the Reuters Tankan survey revealed that business sentiment among large manufacturers in Japan improved to a seven-month high in July, although confidence among non-manufacturers declined due to an uncertain economic outlook.

The dollar index remained around 104.2 on Wednesday, close to its lowest levels since April, pressured by expectations that the Federal Reserve may start cutting rates as early as September. On Tuesday, data revealed that US retail sales were unchanged in June, with a decline in auto sales balanced by increased activity in other sectors. Earlier this week, Fed Chair Jerome Powell noted that recent data “add somewhat to confidence” that inflation is on track to return to target and emphasized that the central bank won’t wait until inflation hits 2% to cut rates. Fed’s Beige Book on Wednesday, as well as housing starts and building permits data for June are awaited. The markets are almost certain that the Fed will implement a quarter-point rate cut in September, with two more reductions anticipated by the year’s end. Additionally, the dollar has found some support from what analysts are calling the “Trump Trade” following a failed assassination attempt on the US presidential candidate.

Gold surged above $2,470 per ounce on Wednesday, hitting a new record high. Fed Chair Jerome Powell indicated on Monday that June’s low inflation increased confidence in achieving the price growth target and stated that the central bank will not wait for inflation to reach 2% before initiating rate cuts. This sentiment was supported by Fed Governor Adriana Kugler on Tuesday, who expressed cautious optimism about inflation moving toward the target rate. Markets are fully expecting a rate cut at the Fed’s September meeting, with CME’s FedWatch Tool indicating traders are leaning toward three 25 basis point cuts rather than two this year. Additionally, expectations that other major central banks in Europe and Asia will also implement rate cuts have increased demand for precious metals in those regions.

EUR/USD: Resistance at 1.0920 and Support at 1.0890

The first resistance level for the pair is 1.0920, and if this level is breached, the next levels to watch will be 1.0950 and 1.1000. On the downside, the first support is at 1.0890, and if this level is broken, the next support to monitor will be 1.0860 and 1.0830.


Gold Rises with Resistance at 2,482

Gold started the day upward, with the first resistance level at 2,482. If this level is surpassed, the next targets will be 2,500 and 2,520. On the downside, the first support is at 2,460, and if this level is broken, the next supports to watch will be 2,445 and 2,430.


Market Outlook: Fed Officials Reinforce Rate Cut Confidence, Boosting Market Optimism

Gold remained steady near $2,460 per ounce on Thursday, close to record highs amid optimism for a Fed rate cut in September. Fed Governor Waller and Fed Chair Powell reinforced confidence in an imminent rate cut, citing June’s lower-than-expected inflation. Markets show a 98% chance of a September rate cut, with expectations for three 25 basis point cuts this year, according to CME’s FedWatch Tool.

The dollar index remained around 103.7 on Thursday, near a four-month low as traders bet on multiple Fed rate cuts this year. Dovish comments from Fed officials, including Powell, increased confidence in rate cuts before inflation hits 2%. Markets expect over 60 basis points of reductions this year. Investors are focused on US jobless claims data and the European Central Bank’s policy decision.

The Australian dollar steadied around $0.673, halting its decline after stronger-than-expected June job figures, despite a rise in the unemployment rate to 4.1%. The Reserve Bank of Australia is expected to maintain rates in August, but inflationary pressures and a tight labor market could prompt another hike. The Aussie gained support from a weaker US dollar amid Fed rate cut expectations.

USD/JPY Eyes Resistance at 156.90 Amidst Strong Uptrend

Since breaking the rising channel from around 140.00, the first support level for USD/JPY will be 155.60. If this level is breached and maintained below, the next supports to watch will be 154.80 and 153.90. On the upside, the first resistance is at 156.90, and if this level is surpassed, the next targets will be 157.30 and 158.00.


Gold’s Upward Movement Faces First Support at $2,460

Gold started the day with an upward movement, with the first resistance level at 2,482. If this level is surpassed, the next targets will be 2,500 and 2,520. On the downside, the first support is at 2,460, and if this level is broken, the next supports to watch will be 2,445 and 2,430.