The global financial markets are currently reacting to the potential for a dovish Fed policy shift. This could weaken the US Dollar and strengthen other currencies, particularly those with central banks on hold or considering rate cuts. Gold and Bitcoin are also benefiting from this environment. Oil prices remain stable despite concerns about Chinese demand, while the New Zealand Dollar faces headwinds from a weak domestic economy.
Foreign Exchange (Forex)
- EUR/USD: The Euro is likely to continue its upward trend in the near term. Bullish sentiment is supported by a weaker US dollar and dovish expectations from the Federal Reserve. Resistance levels at 1.0925 can be tested, with a potential breakout leading to further gains. Support lies at 1.0875.
- GBP/USD: The Pound is also in a bullish zone, supported by positive UK economic data and a strong new government. Resistance is at 1.2981, with a break above indicating further upside potential. Support is at 1.2878.
- USD/JPY: The US dollar is facing headwinds from a potential rate cut by the Federal Reserve. The downtrend is likely to continue, with support at 157.52 potentially tested. Resistance is at 158.34.
- AUD/USD: The AUD/USD is currently in a corrective wave within a larger downtrend. It might experience a brief dip initially but is expected to turn bullish overall in the coming week. The support zone (0.6710/0.6660) is crucial. A confirmed signal of a reversal there could trigger buying opportunities.
- USD/CAD: The USD/CAD is in a downtrend but has been consolidating recently. Expect a continuation of this sideways movement early in the week, followed by a potential reversal and downward price movement in the latter half. Increased volatility is likely due to upcoming news releases. Sell cautiously near support (1.3460/1.3410).
- USD/CHF: The USD/CHF uptrend has stalled as it enters a corrective phase. The price may nudge higher towards resistance (0.9030/0.9080) initially, but a reversal and continuation of the downtrend is expected later this week. Look for selling opportunities after confirmation near support (0.8840/0.8790).
Commodities:
- Gold (XAU/USD): Gold prices are expected to remain bullish due to lower interest rates and a weaker dollar. A breakout above the resistance level of 2415 could lead to further gains. Support is at 2395.
- Oil (Brent Crude): Oil prices face headwinds from concerns about slowing Chinese demand. However, a triple bottom pattern on the daily timeframe suggests potential bullishness. Support is at 85.25, with resistance at 86.21. Inventory data this week could be a key driver.
Cryptocurrency:
- Bitcoin (BTC/USD): Bitcoin is experiencing a surge due to increased investor confidence and ETF inflows. The positive momentum could continue, with potential resistance at 87.90 and even 90.00. Support is at 86.21.
Key Events to Watch This Week:
- Federal Reserve Chairman Jerome Powell’s Speech: His comments on inflation and interest rates could impact the USD and other currencies.
- Empire Manufacturing Index: This data could provide clues about the health of the US manufacturing sector.
- US Retail Sales Data: This data could impact expectations for a Federal Reserve rate cut.
- ECB Meeting: The ECB’s decision on interest rates could impact the EUR and other currencies.
- US retail sales data for June.
- Developments in the US presidential election
- Chinese economic data, especially GDP growth and oil demand
Categories: Market News
