Markets Awaiting FED Guidance and Economic Data (07.23.2024)

Check our daily analysis for support and resistance levels of the stated trading instruments. Find valuable insights about Gold, EUR/USD, USD/JPY, and GBP/USD. Stay ahead of market trends with our expert commentary and detailed chart analysis. 

Gold steadied around $2,400 per ounce on Tuesday after a four-session decline, with traders watching upcoming US economic data to gauge the Fed's stance on interest rates. Key indicators include the Q2 GDP estimate, personal spending and income figures, and the June PCE price index. Recent reports showing a drop in US headline inflation to 3% and core inflation to 3.3% have strengthened expectations for Fed rate cuts starting in September, now priced at 94%. Investors are also analyzing President Biden's decision to end his reelection campaign and endorse Vice President Harris.

The Japanese yen strengthened beyond 157 per dollar for the second consecutive session amid anticipation of a BOJ rate hike. Senior ruling party official Toshimitsu Motegi called for clearer BOJ communication on policy normalization. Prime Minister Kishida emphasized that policy normalization would bolster Japan's growth. The yen surged approximately 2% over two weeks, possibly influenced by suspected government intervention, supported by BOJ data indicating purchases of nearly 6 trillion yen on July 11-12. Recent data also revealed that Japan sold around $22 billion in US Treasuries in May to strengthen reserves for potential market operations

The dollar index stabilized around 104.2 as investors evaluated the evolving US political landscape after President Biden withdrew from the reelection race and endorsed Vice President Harris. Despite former President Trump's lead, market participants are reducing reliance on the "Trump trade." The Federal Reserve is anticipated to start rate cuts in September amidst subdued inflation, with expectations for two more reductions by year-end. Investors are focusing on upcoming US economic releases, including PMIs, GDP figures, and the PCE price index report. The dollar traded rangebound against most major currencies but gained against the Chinese yuan, Australian dollar, and New Zealand dollar after an unexpected PBoC rate cut.

EUR/USD Tests Resistance at 1.0900 Amid Uptrend

The pair started the day on a positive note, with the first resistance seen at 1.0900. Above this level, subsequent resistances to monitor are 1.0950 and 1.1000. On the downside, the initial support is at 1.0875, followed by 1.0845 and 1.0810 if it breaks below.

USD/JPY Faces Initial Support at 155.40

The first support level for USD/JPY will be 155.40. If this level is breached and maintained below, the next supports to watch will be 155.00 and 154.50. On the upside, the first resistance is at 157.00, and if this level is surpassed, the next targets will be 158.00 and 159.00.

Gold Starts Downward; Resistance at 2,430 and Support at 2,385

Gold started the day with a downward movement, with the first resistance level at 2,430. If this level is surpassed, the next targets will be 2,475 and 2,500. On the downside, the first support is at 2,385, and if this level is broken, the next supports to watch will be 2,355 and 2,315.

GBP/USD Testing Support at 1.2860; Potential Resistance at 1.2940 and Beyond

In GBP/USD, the first support is at 1.2860, followed by 1.2820 and 1.2760 below that level. On the upside, the initial resistance is at 1.2940, with further levels at 1.3000 and 1.3050 if the pair moves above that resistance.