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Products: All EU & UK Share CFDs
Modification: Remove the “minimum” handling fees.
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The above data is for reference only, please refer to the MT4/MT5 software for specific data.
Effective Date: Sep. 05, 2022
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US stocks ends at the lowest level in a month, as fresh data pointed to resilience in household and labour demand, affirming the Federal Reserve’s resolve to continue to be aggressive in its fight against inflation. Three regional Fed presidents, in separate remarks on Tuesday, reiterated Chair Jerome Powell’s intention to bring down inflation. A reading on job openings Tuesday added to signs that the labour market remains tight and wage pressures persist. Jobless claims will air Thursday before Friday’s August payroll report. Moreover, the Fed this week is also set to step up the unwinding of its near-$9 trillion balance sheet. Other risks range from China’s economic slowdown to an energy crisis that threatens to tip Europe into recession undermining the market mood.
The benchmarks, both S&P500 and Nasdaq100 slid on Tuesday and finished the session at their lowest level in a month. All eleven sectors of S&P500 stayed in negative territory, as Energy and Materials performed the worst among all groups, which dropped by 3.36% and 1.71% respectively for the day. The Dow Jone Industrial Average fell 1%, Nasdaq 100 tumbled with a 1.1% loss, and the MSCI world index also decreased 1% on Tuesday.
Main Pairs Movement
The US dollar was little changed on Tuesday, as the market priced the huge interest rate hikes by U.S. Federal Reserve and the European Central Bank (ECB). The DXY index edged lower and touched a daily low level below 108.3 in the first half of Tuesday, then regained bullish momentum and surged to a daily high level above 109.1 following the announcement of Consumer confidence readings. However, the greenback then weighted by heavy selling pressure, dropped and oscillated in a range from 108.6 to 108.9.
The GBP/USD dropped with a 0.45% loss daily for the day, as the data this week so far has kept the hawkish sentiment going. The cables dropped dramatically and touched a daily low below 1.1626 following the surprised US CB Consumer Confidence, then little corrected and wandered to a level around 1.1660. Meanwhile, EUR/USD tumbled with a huge loss to a level around 0.9983, then corrected to a level above 1.001. The pair advanced with a 0.18% gain on daily basis on Tuesday, after upbeat statistics from Germany, as well as hawkish comments from the European Central Bank (ECB) policymakers.
Gold dropped with 0.75% losses for the day, drifting back closer to a one-month low. The aggressive Fed rate hikes bets drive flows away from the yellow metal, XAU/USD tumbled and oscillated around $1,724 marks after the US consumer reading.
Technical Analysis
EUR/USD (4-Hour Chart)
The EUR/USD pair edged higher on Tuesday, failing to extend its intra-day rebound and retreated from daily highs that touched in the European session after the release of upbeat US data. The pair is now trading at 1.0002, posting a 0.09% gain daily. EUR/USD stays in the positive territory amid renewed US dollar weakness, but the higher US yields and improving economic data have both provided support to the safe-haven greenback and exerted some bearish pressure on the EUR/USD pair. The US CB Consumer Confidence Index improves to 103.2 in August, which came in better than expected and helped the greenback gather strength against its rivals. For the Euro, the German Annual CPI inflation rises to 7.9% in August, which is higher than the market expectation of 7.8% and showed that inflation in Germany continued to rise.
For the technical aspect, the RSI indicator is 56 as of writing, suggesting a bullish tilt in the near term as the RSI on the four-hour chart climbed above 50. As for the Bollinger Bands, the price regained some upside traction and rose higher toward the upper band, therefore the upside momentum should persist. In conclusion, we think the market will be slightly bullish as the pair is heading to test the 1.0033 resistance. A breakthrough at that level should lead to additional gains toward the next resistance at 1.0089.
Resistance: 1.0033, 1.0089, 1.0171
Support: 0.9991, 0.9917
GBP/USD (4-Hour Chart)
The GBP/USD pair declined on Tuesday, coming under bearish pressure and dropped to a daily low below 1.1640 level in the early US trading session amid growing worries about a deeper global economic downturn. At the time of writing, the cable stays in negative territory with a 0.50% loss for the day. The expectations that the Fed will continue to tighten its monetary policy at a faster pace and a possible 75 bps rate hike move at the upcoming policy meeting both continued to act as a tailwind for the US dollar. The market focus now remains on the US jobs report (NFP) that will release on Friday. For the British pound, the currency might remains under pressure as the Bank of England had predicted earlier this month that the UK economy will enter a prolonged recession from Q4 of 2022.
For the technical aspect, the RSI indicator is 35 as of writing, suggesting that the downside is preserving strength as the RSI dropped sharply toward 30. As for the Bollinger Bands, the price witnessed fresh selling and declined toward the lower band, therefore a persistent selling interest can be expected. In conclusion, we think the market will be bearish as the pair is testing the 1.1655 support. Sustained weakness below that critical support should lead to a steeper decline toward a two-year low set near the 1.1500 area.
Resistance: 1.1738, 1.1780, 1.1853
Support: 1.1655, 1.1476
XAU/USD (4-Hour Chart)
Gold struggled to capitalize on yesterday’s gain from the $1,720 level and met with a fresh supply on Tuesday. The steady intraday decline extended through the US session and dragged the XAU/USD to the one-month low at the $1,720 level. Despite modest US dollar weakness and a further decline in the US Treasury bond yields, gold price struggles to advance as firming expectations for a 75 bps Fed rate hike at the September meeting. Hawkish comments from Fed Chair Jerome Powell on Friday reaffirmed these bets, which also weights on the gold price.
For the technical aspect, the RSI indicator is 36 as of writing, declining from mid-line on the trade of the day, which suggests that the persistent bearish mode could be expected. As for the Bollinger Bands, gold price sustained pressure from the downward moving average and declined to the lower bound, showing the downward traction influence on the gold price. In conclusion, we think the market is still under bearish pressure as the price couldn’t capitalize on the previous day’s bounce and closed at a lower high at the $1,740 level on the 4H chart. The price hovers around the $1,720 level as of writing, which is close to the support region at the $1,714 level. If the price closes below, it may head to test the pivotal support region at the $1,685 level, which is at a multi-year low and acts as key support for gold investors.
US stocks declined on Monday, as a realization that interest rates are likely to remain elevated for an extended period continued to force a repricing across assets. Powell’s speech during the Jackson Hole symposium underscored that expectations for any reversal of Fed tightening next year were unlikely unless inflation reverted toward the central bank’s long-term target. The latest consumer price reading in the US put inflation above 8%, which is far away from the target, of 2%. Fed chairs also warned of the potential for economic pain for households and businesses as the central bank continues to be aggressive.
The benchmarks, both S&P500 and Dow Jones Industrial Average slid a second day, adding to the rout that started Friday when Jerome Powell made it clear the Fed is willing to let the economy suffer as it fights inflation. Nine out of eleven sectors in the S&P500 stayed in negative territory, as Information Technology got the worst performance among all groups, dropping 1.28% for the day. While the Energy sector surged with a 1.54% gain on daily basis. The Nasdaq 100 fell 1%, Dow Jones Industrial Average slipped 0.6%, and the MSCI world index fell 2.3% on Monday.
Main Pairs Movement:
The US dollar was little changed down on Monday. The DXY index extended upbeat tractions lifted by Federal Reserve Chair Jerome Powell’s hawkish comments and refreshed a 20-year high level above 109.4 in the first half of Monday. Then, as the expectations for the England Central Bank rate hiked, the US greenback was kept in check and dropped to a level below 108.6 during the UK trading session.
The GBP/USD declined with a 0.30% loss daily for the day, as investors are awaiting ISM’s national manufacturing reading and US Nonfarm Payroll for August, which are released on Thursday and Friday respectively. The cables extended bearish momentum caused by Powell’s hawkish comment and fell to a level below 1.166, then rebounded to a daily high level above 1.174. Meanwhile, EUR/USD surged to a nearly 1.003 level as ECB rate hiking expectations. The pair advanced by 0.31% on Monday.
The gold was little changed down for the day, as market participants reflected on the Jackson Hole symposium. XAU/USD plunged to a level below $1,722 marks at the beginning of the Asia trading session, then witnessed fresh transactions during the middle of the UK trading session and touched a daily high above $1,745 marks. The yellow metal is going to brace for the period of high volatility, with incoming data that could reignite fears of a worldwide recession.
Technical Analysis
EUR/USD (4-Hour Chart)
The EUR/USD pair rebounded on Monday, staging a goodish recovery and climbed toward the 1.002 level heading into the US session despite the risk-averse market environment today. The pair is now trading at 0.9989, posting a 0.25% gain daily. EUR/USD stays in the positive territory amid the pullback witnessed in the US dollar, as some profit-taking on the first day of the week has dragged the US dollar down from a fresh 20-year peak near the 109.5 mark. However, the rising bets for a more aggressive policy tightening by the Fed should limit the losses for the greenback, as the hawkish remarks by Fed Chair Jerome Powell, last Friday has reaffirmed a 75 bps Fed rate hike in the September meeting. For the Euro, the hawkish comments from the European Central Bank (ECB) policymakers at Jackson Hole have provided some support to the shared currency.
For the technical aspect, the RSI indicator is 52 as of writing, suggesting that the pair is losing its bullish strength as the RSI started to decline toward 50. As for the Bollinger Bands, the price failed to preserve its upside traction and witnessed some selling, therefore a continuation of a downside trend can be expected. In conclusion, we think the market will be slightly bearish as long as the 1.0007 resistance line holds. But a break above that level could favour the bulls and confirm the bullish bias in the near term.
Resistance: 1.0007, 1.0033, 1.0089
Support: 0.9961, 0.9917
GBP/USD (4-Hour Chart)
The GBP/USD pair edged lower on Monday, failing to extend its rebound and retreated to the 1.171 level to surrender most of its daily gains amid the negative shift witnessed in risk sentiment in the second half of the day. At the time of writing, the cable stays in negative territory with a 0.20% loss for the day. The further rise in the US Treasury bond yields and aggressive Fed rate hike bets both acted as a tailwind for the safe-haven greenback and exerted bearish pressure on the GBP/USD pair. Markets are currently pricing in a greater chance of a 75 bps Fed rate hike in the September meeting. For the British pound, the UK markets will remain closed due to the Summer Bank Holiday on Monday, causing the absence of any fundamental catalyst for the cable.
For the technical aspect, the RSI indicator is 40 as of writing, suggesting that the downside is more favoured as the RSI stays below the mid-line. As for the Bollinger Bands, the price regained upside traction and climbed toward the moving average, therefore the bullish momentum should persist. In conclusion, we think the market will be slightly bullish as long as the 1.1655 support line holds. On the upside, the pair could shake off the bearish pressure and make an upward correction if it breaks above the 1.1775 resistance.
Resistance: 1.1775, 1.1830, 1.1854
Support: 1.1655
XAU/USD (4-Hour Chart)
Gold remains under pressure for the second day on Monday and drops to over a one-month low, around the $1,720 level during the early part of the European session. After that, gold catches some upside traction and recovers from a one-month low. The price reversed an intraday dip and surged to the $1,740 level in the US session.
Besides the hawkish comments from Fed Chair Jerome Powell last Friday, it should be noted that The European Central Bank is prepared to at least repeat the half-point increase in interest rates it delivered last month, with an even bigger move not to be excluded, which is the message from ECB officials who joined the Federal Reserve’s annual Jackson Hole symposium. Gold investors should notice that gold prices may brace for a period of high volatility as the worldwide central bank’s hawkish policy.
For the technical aspect, the RSI indicator is 44 as of writing, below the midline, suggesting that the price remains in bearish mode. As for the Bollinger Bands, the gold price hovers between the moving average and lower bound. Besides moving average is slightly downward as of writing. Therefore, downward traction could be expected. In conclusion, we think the market is still under bearish pressure as the price closed a lower low at $1,720 level on the 4H chart and technical analysis favours bearish momentum as well.
The US Non-farm Employment Change in the labour data is a primary focus this week, as the Fed’s speech at the 2022 Jackson Hole Symposium on 25-27 August may influence policymakers’ decisions.
The US will release data this week on job openings, consumer confidence, and manufacturing activity in the service sector.
Germany and Switzerland will also release consumer price index data.
Image source: forexfactory.com
German Prelim CPI m/m | 30 August 2022
The German Consumer Price Index (CPI) rose 0.90% in July over the previous month, according to a preliminary estimate from the Federal Statistical Office of Germany. The increase was primarily due to higher energy prices. Analysts expect the German Prelim CPI to rise by 0.3% in April.
US CB Consumer Confidence | 30 August 2022
The US Consumer Confidence Index declined to 95.7 in July 2022 from 98.4, as the US economy showed signs of slowing growth. The index will likely rebound to 98 by September 2022 if US consumers’ perception of their job security stabilizes and they feel confident about their income potential.
US JOLTS Job Openings | 30 August 2022
Job openings in the US fell to 10.7 million in June 2022 to the lowest point in nine months, according to data from the Job Openings and Labor Turnover Survey or JOLTS. The decline was driven by a drop in openings for construction and mining workers.
As US economic conditions continue to improve, we can expect to see more jobs in the future.
US ADP Non-Farm Employment Change | 31 August 2022
Private businesses in the US added an estimated 128,000 payrolls in May, down from a revised 223,000 in April—marking the lowest monthly total since the job losses of 2020. Economists expect that private employers will create 200,000 jobs in June, pushing the average for the second quarter to 216,000.
Swiss Consumer Price Index | 1 September 2022
Switzerland’s Consumer Price Index remained unchanged in July from the previous month. Analysts expect the index to decrease slightly in August and dip into negative territory by 0.1%. The Swiss National Bank is expected to keep its interest rate unchanged at 0% for the time being, as inflation remains below its target range. The country’s economy is expected to grow in the second half of 2022, albeit slower than previously anticipated.
US ISM Manufacturing PMI | 1 September 2022
The ISM Manufacturing PMI decreased to 52.8 in July from 53 in June. It is widely expected that the index will continue its downward trend in August. The slowdown in economic growth and trade tensions between the US and China are likely to continue weighing on manufacturing activity in the country. The ISM Manufacturing PMI is expected to decrease slightly in August but will remain at a relatively high level of 51.8.
US Non-Farm Employment Change | 2 September 2022
US average hourly earnings increased by 0.5% in July. The US economy added 528,000 jobs, and the unemployment rate decreased to 3.5%, the lowest since February 2020. Analysts expect average hourly earnings to rise by 0.3%, with 300,000 additional jobs and an unemployment rate of 3.5%.
US stocks tumbled on Friday, as Jerome Powell gave a clear message that rates will likely stay high for some time, throwing cold water on the idea of a Federal Reserve pivot that could jeopardize its war against inflation. Moreover, the Fed chief reiterated that another ”unusually large” hike could be appropriate next month, though he stopped short of committing to one, adding that the decision will depend on incoming data. Overall, traders should expect more volatility and tougher conditions for equities with the Fed going to remain aggressive at the expense of growth.
The benchmarks, both S&P500 and Dow Jones Industrial Average plunged on Friday, as S&P500 saw its worst day since mid-June. All eleven sectors stayed in negative territory, as Information Technology performed the worst among all groups, dropping with a 4.28% loss daily, and six out of eleven sectors declined by more than 3% for the day. The Dow Jones Industrial Average fell 3%, the Nasdaq 100 tumbled with a 4.1% loss, and the MSCI world index decreased 2.5% for the day.
Main Pairs Movement
The US dollar rallied on Friday, following Federal Reserve Chair Jerome Powell adopting a hawkish tone to battling inflation. The DXY index dropped to a level below 107.8 ahead of the US trading session, then regained bullish momentum after Fed chief Jerome Powell’s hawkish talk, surged from 107.6 to a daily high level of 108.8.
The GBP/USD dropped with a 0.74% loss daily on Friday, as Fed Chair Jerome Powell delivered a hawkish speech at the Jackson Hole Symposium. The cables witnessed fresh transactions during the UK trading session and touched a level above 1.188, then tumbled to a level below 1.174 following the Federal Reserve Chief Jerome Powell took the stand. Meanwhile, EUR/USD fell to a level below 0.997, with a strong greenback across the board and an unchanged pessimistic economic future in the Europe zone. The pair was a little changed for the day.
Gold tumbled on Friday, as Fed Chair keeps a hawkish tone, and said higher interest rates will persist for some time, which heavily weighted XAU/USD. XAU/USD confronted selling pressure during the UK session and further declined to a daily low of $1,735 after Jerome Powell’s hawkish speech.
Technical Analysis
EUR/USD (4-Hour Chart)
The EUR/USD pair surged on Friday, extending its rally that started in the European session and refreshed its daily high near the 1.007 mark amid the emergence of some US dollar selling. The pair is now trading at 1.0067, posting a 0.92% gain daily. EUR/USD stays in the positive territory amid renewed US dollar weakness, as the softer-than-expected US PCE inflation data exerted bearish pressure on the greenback and provided support to the EUR/USD pair. On top of that, US Federal Reserve President Jerome Powell is delivering his speech about the economic outlook at the Jackson Hole Economic Symposium, a hawkish stance will play a key role and help determine the next leg of a directional move for the EUR/USD pair. For the Euro, the concerns about an extreme energy crisis in Europe have escalated amid the embargo on Russian energy imports. The Nord Stream 1 pipeline will remain shut for the last three days of August.
For the technical aspect, the RSI indicator is 62 as of writing, suggesting that the upside is preserving strength as the RSI keeps heading north. As for the Bollinger Bands, the price climbed higher and moved out of the upper band, therefore a strong trend continuation can be expected. In conclusion, we think the market will be bullish as the pair is heading to test the 1.0082 resistance line.
Resistance: 1.0082, 1.0171, 1.0188
Support: 0.9991, 0.9960, 0.9924
GBP/USD (4-Hour Chart)
The GBP/USD pair edged lower on Thursday, failing to preserve its bullish momentum. They retreated to the 1.182 area after the highly-anticipated speech from Fed Chair Jerome Powell at the Jackson Hole Symposium. At the time of writing, the cable stays in negative territory with a 0.36% loss for the day. The hawkish remarks on the policy outlook from Fed Chair Jerome Powell have underpinned the safe-haven greenback, as he said that higher interest rates would persist for some time. Moreover, the market now seeing greater odds of a 75 basis point rate hike, which rose back to 60% after the speech. The University of Michigan Consumer Sentiment also came in at 58.2 in August, which is better than expected. For the British pound, the bleak outlook for the UK economy continues to act as a headwind for the currency and weigh on the GBP/USD pair.
For the technical aspect, the RSI indicator is 42 as of writing, suggesting the GBP/USD pair’s downside bias as the RSI started to drop sharply toward 40. As for the Bollinger Bands, the price witnessed fresh selling and crossed below the moving average, therefore the downside traction should persist. In conclusion, we think the market will be bearish as long as the 1.1849 resistance line holds. On the downside, a break below 1.1780 could open the door for additional losses.
Resistance: 1.1849, 1.1922, 1.1980
Support: 1.1780, 1.1763
XAU/USD (4-Hour Chart)
Gold plunged to the $1,730 level after having advanced above the $1,750 level during the American trading hours on Friday as Fed Chair Jerome Powell reiterated his hawkish stance and helped the US dollar to rise strongly again.
Federal Reserve Chair Jerome Powell signalled the U.S. central bank is likely to keep raising interest rates and leave them elevated for a while to stamp out inflation, and he pushed back against any idea that the Fed would soon reverse course. “Restoring price stability will likely require maintaining a restrictive policy stance for some time,” Powell said Friday in remarks at the Kansas City Fed’s annual policy forum in Jackson Hole, Wyoming. “The historical record cautions strongly against prematurely loosening policy.” The comments of Powell were taken as “hawkish”. After all the dust settled, gold price turned south and plunged below the $1,740 level snapping its winning streaks and erasing all its weekly gains.
For the technical aspect, the RSI indicator is 34 as of writing, below the midline, suggesting that the following bearish trend could be expected as RSI slumped from above 50. As for the Bollinger Bands, the price dropped sharply across the moving average from its formerly upward trend, which is a typical pattern of turning weak, suggesting a downside momentum. In conclusion, we think the market will be bearish as fundamental and technical aspects both favour downside traction. If the price closes below $1,730, it might head to test the next support region at the $1,714 level.
US stocks rallied on Thursday, as traders awaited Jerome Powell’s keynote for clues on how much further the Federal Reserve will pump the brakes on the economy to bring inflation back under control. Investors were mostly unfazed by hawkish comments from Fed officials gathering for the annual conference in Jackson Hole, Wyoming. The Fed’s chair is widely expected to restate his resolve to keep tightening policy to fight inflationary spirals. Besides, traders will also be watching out for any signals about the pace of the Fed’s balance-sheet runoff, quantitative tightening, which gets up to full speed in September at a monthly clip of up to $95 billion.
The benchmarks, both S&P500 and Dow Jones Industrial Average advanced on Thursday, following the lowest trading day of 2022 for US equities, and volume was once again below average. All eleven sectors of S&P500 stayed in positive territory, as Material and Communication Service performed the best among all groups, rising by 2.26% and 2.06% on daily basis for the day. Benefit from mega-caps like Apple Inc. and Amazon.com Inc. jumped, Nasdaq 100 rallied with a 1.7% gain. The Dow Jones Industrial Average rose 1%, and the MSCI world index increased 1.3% on Thursday.
Main Pairs Movement
US dollar slid on Thursday, as investors awaited Federal Reserve Chairman Jerome Powell’s speech on Friday for further clues about the pace of the U.S. central bank’s rate hikes. The DXY index extended bearish momentum and dropped to a level around 108.0 in the first half on Thursday, then witnessed fresh upbeat transactions and oscillated from 108.4 to 108.6 level in the late UK trading session.
The GBP/USD was little changed up on Thursday, although the US greenback turned a little weak, a gloomy economic outlook in the UK weighed heavily on the cables. The pair climbed t a daily high level above 1.186 during the middle UK trading session, then slipped and volatile in a range from 1.800 to 1.845. Meanwhile, EUR/USD observed upbeat tractions in the first half of Thursday, then faced heavy selling pressure to wander between 0.995 and 0.998. The pair was little changed for the day.
Gold surged with a 0.43% gain on daily basis, as the FX domain turned volatile ahead of Jackson Hole Economic Symposium. The yellow metal edged higher to touch a daily high of $1,765 marks in the first half of Thursday, then corrected to around $1,757 marks.
Technical Analysis
EUR/USD (4-Hour Chart)
The EUR/USD pair advanced on Thursday, preserving its bullish strength and touched a daily high above the 1.003 mark in the early European session amid the better market mood. The pair is now trading at 0.9986, posting a 0.25% gain daily. EUR/USD stays in the positive territory amid a weaker US dollar across the board, as traders prefer to wait for a more hawkish message from Fed Chair Jerome Powell at the Jackson Hole Symposium on Friday. The less-hawkish comments from the Philadelphia Fed President Patrick Harker also acted as a headwind for the safe-haven greenback and underpinned the EUR/USD pair, as he said that a 50 basis points rate hike would still be a substantial move. But the expectations for further policy tightening by the US central bank should limit the losses for the US dollar. For the Euro, the German Final GDP came at 0.1% QoQ in Q2, which was better than expected and provide some support to the shared currency.
For the technical aspect, the RSI indicator is 43 as of writing, suggesting that the downside is more favoured as the RSI stays below the mid-line. As for the Bollinger Bands, the price failed to climb higher and dropped toward the moving average, therefore the downside traction should persist. In conclusion, we think the market will be bearish as long as the 1.007 resistance line holds. Technical indicators also turned lower and the RSI is within negative levels.
Resistance: 1.0007, 1.0089, 1.0172
Support: 0.9924
GBP/USD (4-Hour Chart)
The GBP/USD pair edged higher on Thursday, struggling to capitalize on its intraday gains and retreated from a daily high near the 1.1860 level that touched in the early European session amid the recovery witnessed in the US dollar. At the time of writing, the cable stays in positive territory with a 0.05% gain for the day. The US Weekly Initial Jobless Claims declined to 243K in the week ending August 20, which came in better-than-expected and reaffirms bets for a further policy tightening by the Fed. The market focus now shifts to Fed Chair Jerome Powell’s appearance at the Jackson Hole Symposium on Friday, as his comments could provide clues about the possibility of a 75 bps Fed rate hike move at the September meeting. For the British pound, the currency is likely to remain under pressure as the bleak outlook for the UK economy overshadows expectations for a 50 bps rate hike by the BoE next month.
For the technical aspect, the RSI indicator is 43 as of writing, suggesting that the risk is skewed to the downside as the RSI started to decline. As for the Bollinger Bands, the price preserved its downside traction and dropped toward the moving average, therefore the bearish strength should persist. In conclusion, we think the market will be bearish as long as the 1.1849 resistance line holds. On the downside, a break below 1.1780 could underpin the GBP/USD pair’s downside bias.
Resistance: 1.1849, 1.1922, 1.2050
Support: 1.1780, 1.1763
XAU/USD (4-Hour Chart)
Gold price refreshed a weekly high near the $1,760 level ahead of Thursday’s European session, forming a three-day uptrend. The price advance for a weaker dollar and stimulus news from China, as investors await rate guidance from the Jackson Hole Symposium.
Per Bloomberg, the State Council, China’s Cabinet, outlined a 19-point policy package on Wednesday, including another 300 billion yuan that state policy banks can invest in infrastructure projects, on top of the 300 billion yuan already announced at the end of June. Local governments will be allocated 500 billion yuan of special bonds from previously unused quotas. As China is one of the largest buyers of gold in the world, positive news from China often favours the gold price.
For the technical aspect, the RSI indicator is 56 as of writing, above the midline, showing some momentum to the upside. As for the Bollinger Bands, the price edges higher with an up-bending moving average, maintaining slightly below the upper bound, suggesting that the upside traction could be expected. Besides, the price has advanced to above the $1,757 level, and now testing it as a support region on the 4H chart. In conclusion, we think the market started to show some bullish traction, but the trend after still mainly depends on the message from Fed Chair Jerome Powell at the Jackson Hole Symposium on Friday. Therefore, it might not be that much price action before the event.
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Please note the specific adjustments as follows:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
The US stocks little rallied on Wednesday, stock traders remained hesitant to make any huge wagers ahead of Jerome Powell’s speech on Friday, which may provide clues on how hawkish the Federal Reserve will be in the face of mounting economic challenges. In the run-up to the all-important Jackson Hole annual conference that will be attended by policymakers around the world, investors had to digest more hawkish talk, as it’s probably that Fed officials need to tighten and bring inflation back under control. Besides, economic data have been mixed at best, US pending home sales fell to the lowest since the start of the pandemic, underlining the delicate task policymakers face in bringing down high inflation without sparking a recession.
The benchmarks, both S&P500 and Dow Jones Industrial Average notched a small gain on Wednesday, with its swing capped within 1% for the second day in a row. All eleven sectors in S&P500 stayed in positive territory, as the Energy sector performed the best among all groups, which rose 1.20% for the day. It’s worth noting that Tesla Inc. pared most of its rally ahead of a split-adjusted basis on Aug.25, which caused the Nasdaq to little moved upward with a 0.3% gain on daily basis. The Dow Jone Industrial Average rose 0.2%, and the MSCI world index was little changed on Wednesday.
Main Pairs Movement
The US dollar was little changed on Wednesday, as investors put into sideways for a Friday speech by the Federal Reserve chairman for fresh clues on how aggressive the central bank will be in its battle against inflation. The DXY index slowly climbed up to a daily high level above 109, then witnessed huge selling transactions and fell to a level below 108.4 during the US trading session.
The GBP/USD declined with a 0.31% loss daily for the day, as investors were cautious ahead of Jackson Hole Symposium. The cables were weighed in the first half of Wednesday, then observed upbeat traction at the beginning of the US trading session and touched a daily high level of around 1.188. Meantime, EUR/USD touched a level of nearly 1.000. The pair was little changed down on Wednesday.
Gold advanced with a 0.17% upward for the day, as a two-day uptrend. XAU/USD surged during the US trading session and oscillate in a range from $1,744 to $1,756 marks. WTI and Brent oil surged on Wednesday, rising by 1.23% and 1.55% on daily basis respectively.
Technical Analysis
EUR/USD (4-Hour Chart)
The EUR/USD pair advanced on Wednesday, regained upside momentum and climbed toward the 1.000 mark to recover all of its daily losses during the US session amid the emergence of fresh selling around the US dollar. The pair is now trading at 0.9981, posting a 0.12% gain daily. EUR/USD stays in the positive territory amid renewed US dollar weakness, as the rising US Treasury bond yields and upbeat US economic data failed to lift the greenback higher. The US Durable Goods Orders excluding defence increased by 1.2% and Pending Home Sales data also fell less than expected, providing some support to the greenback during the European session. Investors are waiting for a more hawkish message from Fed Chair Jerome Powell at the Jackson Hole symposium on Friday. For the Euro, the concerns about the energy crisis remained amid the three-day unscheduled cut-off of energy supplies for maintenance of the Nord Stream 1 pipeline.
For the technical aspect, the RSI indicator is 40 as of writing, suggesting that the pair is regaining upside momentum as the RSI started to rise toward the mid-line. As for the Bollinger Bands, the price witnessed fresh buying and rose toward the moving average, therefore a continuation of upside traction can be expected. In conclusion, we think the market will be slightly bullish as the pair is heading to test the 0.9979 resistance.
Resistance: 0.9979, 1.0038, 1.0089
Support: 0.9924
GBP/USD (4-Hour Chart)
The GBP/USD pair edged lower on Wednesday, failing to preserve its upside traction and retreated to the 1.1795 level during the US trading session amid fresh buying witnessed in the US dollar. At the time of writing, the cable stays in negative territory with a 0.32% loss for the day. The slightly upbeat market mood and mostly upbeat US economic data both underpinned the greenback and exerted bearish pressure on the GBP/USD pair. The current market pricing indicates an equal possibility of a 50 bps rate hike or a supersized 75 bps move at the September FOMC policy meeting, as Minneapolis Fed President Neel Kashkari said that inflation is too high and emphasized the need to tighten monetary policy. For the British pound, despite further rate hikes by the Bank of England, the currency might remain under pressure amid higher energy prices.
For the technical aspect, the RSI indicator is 39 as of writing, suggesting that the downside is more favoured as the RSI stays below the mid-line. As for the Bollinger Bands, the price lost its upside strength and crossed below the moving average, therefore the downside traction should persist. In conclusion, we think the market will be bearish as the pair is testing the 1.1780 support. The level 1.1763 will be a crucial support to watch during the GBP/USD pair’s further weakness.
Resistance: 1.1849, 1.1922, 1.1980
Support: 1.1780, 1.1763
XAU/USD (4-Hour Chart)
Gold turned to rise in the US session and advanced to above $1,750 amid renewed selling pressure around the US dollar. However, the benchmark 10-year US Treasury yield is still up nearly 2%, limiting the upside for gold price.
For the technical aspect, the RSI indicator is 50 as of writing, maintaining steady compared to yesterday, showing no strong momentum to the upside or the downside. As for the Bollinger Bands, the price consolidates between the moving average and upper bound. This along with the flat-lining moving average suggests that the price still has no clear traction. In conclusion, we think the market is still waiting for a key signal to determine the next direction. To the upside, the gold price should advance above resistance at the $1,750 level first. On the downside, if the price closes negative below the $1,730 level, it might head to test the next support at the $1,714 level.
That said, traders might refrain from placing aggressive bets ahead of the key event risks – the Jackson Hole symposium on Friday. All eyes are now on Friday’s Jackson Hole symposium, which would determine the near-term direction of the US dollar and influence the performance of gold prices. For more price actions, eye on tier 1 economic figures from the US.
Insights 
VT 
