Daily market analysis by zForex, 10.01.2024 - Euro Weakness, Yen Slide, Gold Rallies. The EUR/USD pair remains under pressure as it struggles to gain momentum, currently hovering around 1.1135-1.1140.
Traders are focused on upcoming Eurozone inflation data, which could shape expectations for the European Central Bank's next moves. Meanwhile, the yen continues to weaken against the dollar following Fed Chair Jerome Powell's comments, indicating a cautious approach to U.S. rate cuts.
Rising geopolitical tensions in the Middle East have boosted gold prices, while the GBP/USD pair faces downward pressure due to a stronger dollar and comments from the Bank of England. Silver breaks above $31.35, resuming its bullish momentum after a two-day losing streak. Investors are keeping an eye on key support and resistance levels across these assets to gauge future market direction.
Time (GMT) | Event | Asset | Survey | Previous |
09:00 | EU CPI (YoY) (Sep) | EUR | 1.8% | 2.2% |
13:45 | S&P Global US Manufacturing PMI (Sep) | USD | 47.0 | 47.9 |
14:00 | ISM Manufacturing PMI (Sep) | USD | 47.6 | 47.2 |
14:00 | ISM Manufacturing Prices (Sep) | USD | 53.5 | 54.0 |
14:00 | JOLTs Job Openings (Aug) | USD | 7.640M | 7.673M |
The EUR/USD pair is struggling to gain traction after retreating from a 14-month peak just above 1.1200. Currently trading around 1.1135-1.1140, it remains largely unchanged as traders await Eurozone inflation data. The flash Consumer Price Index (CPI) for September is expected to show a drop below the European Central Bank's (ECB) 2% target, particularly following a decline in Germany's CPI to its lowest level since February 2021. A weaker Eurozone CPI would bolster expectations for a 25 basis point rate cut at the ECB's upcoming meeting, while a stronger reading may have limited impact due to modest USD strength. Federal Reserve Chair Jerome Powell's recent hawkish remarks indicate only two more 25 basis point cuts this year if the economy performs as expected, prompting a reassessment of aggressive easing by the Fed. Additionally, rising geopolitical tensions in the Middle East are supporting the safe-haven USD. Later in the North American session, traders will focus on the US ISM Manufacturing PMI and JOLTS Job Openings data, along with speeches from influential FOMC members, which may impact USD demand and provide direction for the EUR/USD pair. However, repeated failures to hold above the 1.1200 mark suggest caution for bullish traders.
In the pair, the first support level is at 1.1100. If this level is breached, the next supports to watch will be 1.1050 and 1.0990. On the upside, the first resistance is at 1.1160; if this level is surpassed, the next targets will be 1.1200 and 1.1250.
| R1: 1.1160 | S1: 1.1100 |
| R2: 1.200 | S2: 1.1050 |
| R3: 1.250 | S3: 1.0990 |
The Japanese yen weakened to around 144 per dollar on Tuesday, marking a decline for the second consecutive session. This drop followed Federal Reserve Chair Jerome Powell's remarks, which dampened expectations for aggressive U.S. rate cuts. Powell indicated that the Fed is likely to implement more modest 25 basis point reductions in its remaining meetings this year and emphasized that there is “no preset course” for monetary policy. Additionally, the yen faced pressure from comments by former defense minister Shigeru Ishiba, who recently took the leadership of Japan’s ruling party. He stated that Japan should maintain accommodative policies due to the current economic climate. On the economic data front, Japan’s unemployment rate improved to 2.5% in August, down from 2.7% in July, exceeding market expectations of 2.6%. Moreover, the Bank of Japan’s quarterly Tankan survey revealed that sentiment among major manufacturers reached a two-year high in the third quarter, highlighting a positive outlook in that sector despite the yen's depreciation.
From a technical perspective, the first resistance level is at 144.60. If this level is surpassed, the next targets will be 146.30 and 147.15. On the downside, the initial support is at 143.15; if this level is breached, the next support to watch will be 141.75 and 140.40.
| R1: 144.60 | S1: 143.15 |
| R2: 146.30 | S2: 141.75 |
| R3: 147.15 | S3: 140.40 |
Gold prices climbed toward $2,640 per ounce on Tuesday after experiencing two consecutive days of decline, driven by increased geopolitical risks in the Middle East that heightened demand for safe-haven assets. Tensions escalated following Israel's killing of Hezbollah's leader, which led to reports of Lebanese troops withdrawing from the border with Israel as an invasion seemed imminent. However, gains were capped by recent comments from Fed Chair Powell, who clarified that the recent significant interest rate cut should not signal aggressive future actions. He indicated that any additional cuts are likely to be smaller, around a quarter percentage point. Currently, the likelihood of another 50-basis-point rate cut in November is at 37%, down from over 50% the prior week. Investors are also awaiting more economic data, including the jobs report, JOLTS, and the ISM manufacturing and services PMIs.
Technically the first support level is at 2,650. If this level is breached, the next supports to watch will be 2,630 and 2,600. On the upside, the initial resistance is at 2,665; if this level is surpassed, the next targets will be 2,685 and 2,700.
| R1: 2655 | S1: 2630 |
| R2: 2665 | S2: 2590 |
| R3: 2685 | S3: 2550 |
The GBP/USD pair is struggling to gain traction around 1.3370 during Tuesday's Asian session, impacted by less dovish comments from Federal Reserve (Fed) Chair Jerome Powell, which have strengthened the dollar. Investors are now focused on the upcoming US ISM Manufacturing Purchasing Managers Index (PMI) data, as well as speeches from Fed officials Raphael Bostic and Lisa Cook. On the UK front, Bank of England (BoE) policymaker Megan Greene highlighted the risk of renewed inflation from a consumption-driven recovery but noted that further interest rate cuts are likely, as prices are “moving in the right direction.” Despite this, traders have recently reduced their expectations for a BoE rate cut in November.
For GBP/USD, the initial support lies at 1.3350, followed by 1.3300 and 1.3250 below. On the upside, the first resistance is at 1.3400, with subsequent levels at 1.3430 and 1.3450 if the pair breaks above this resistance.
| R1: 1.3400 | S1: 1.3350 |
| R2: 1.3430 | S2: 1.3300 |
| R3: 1.3450 | S3: 1.3250 |
Silver (XAG/USD) is seeing positive momentum during Tuesday's Asian session, recovering from a multi-day low of around $30.90-$30.85 reached the previous day. The white metal is currently trading around $31.35, up 0.60% for the day, marking a break from a two-day losing streak.
From the technical perspective, the first resistance level to watch is 31.80. If silver breaks above this level, the next resistance levels to watch will be 32.30 and 32.70, respectively. On the downside, the initial support level is at 31.35, with subsequent support levels at 31.10 and 30.60.
| R1: 31.80 | S1: 31.35 |
| R2: 32.30 | S2: 31.10 |
| R3: 32.70 | S3: 30.60 |
The EUR/USD pair continued its decline, dropping to a three-week low as Eurozone inflation softened and expectations of an ECB rate cut grew.
Detail Markets Weighed by Strong U.S. Labor Data and Geopolitical Tensions (10.03.2024)The EUR/USD pair experienced selling pressure, dropping to a three-week low as investors reassessed their expectations for Fed rate cuts following strong U.S. labor market data and hawkish comments from Fed Chair Powell. Meanwhile, the euro is under pressure due to falling inflation in the Eurozone and increasing speculation that the ECB may lower rates.
Detail
US Manufacturing PMI Hits Lowest Point Since JuneUS manufacturing contracted further in September as output and new orders dropped amid weak demand and political uncertainty.
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