In the latest market session, the EUR and GBP have shown bearish tendencies amid pressures from the U.S. dollar, buoyed by anticipation of a Federal Reserve rate cut and expectations of a hawkish outlook from Jerome Powell. EUR’s decline is tempered by limited growth potential, with investors focusing on MACD levels to gauge buy and sell entry points. GBP rallied slightly after a BoE rate cut but faces downward pressure due to potential inflation from the recent UK budget. The JPY is stabilizing, though it recently slid after Trump’s election victory heightened dollar strength. Meanwhile, gold is bearish, with support levels attracting traders seeking opportunities around pivotal EMA zones.
EUR/USD Market Analysis
Current Trend: Bearish
- Recent Performance: EUR/USD has dropped sharply, primarily influenced by the strengthening USD following recent U.S. political events. The pair is weighed down by expectations of dovish Eurozone monetary policy adjustments and possible ECB rate cuts, while the Fed’s rate stance remains a critical driver.
- Key Influencers: The FOMC’s stance, European economic uncertainty, and a risk of tariffs under new U.S. leadership.
Support Levels: 1.0726, 1.0667, 1.0610
Resistance Levels: 1.0750, 1.0795, 1.0857
- Outlook: The bearish trend is expected to persist, especially if the FOMC signals a pause in rate cuts or expresses a hawkish outlook. The pair could test support at 1.0667. A dovish tone from the Fed could, however, offer a brief corrective move, pushing EUR/USD to 1.0795.
Scenarios:
- Bearish Scenario: Selling opportunities arise from around 1.0795 or after a breakdown below 1.0726. A deeper decline toward 1.0667 is likely if the trend holds.
- Bullish Scenario: A breakout above 1.0933, combined with a dovish Fed stance, may shift momentum, targeting a retracement toward 1.0857.
GBP/USD Market Analysis
Current Trend: Bearish
- Recent Performance: GBP/USD saw a rebound after the BoE rate cut, with a modest uptick following a corrective bounce. However, the pound’s outlook remains constrained due to expected rate cuts and fiscal policies impacting inflationary pressure.
- Key Influencers: BoE’s cautious rate-cut cycle, U.S. rate decisions, and budget-driven inflation projections in the UK.
Support Levels: 1.2870, 1.2848, 1.2733
Resistance Levels: 1.2919, 1.2950, 1.2982
- Outlook: The pair could maintain bearish momentum, particularly if the Fed signals limited rate cuts. GBP/USD may test support at 1.2848 and even 1.2733. However, a temporary recovery to 1.2982 is possible if the Fed softens its rate outlook.
Scenarios:
- Bearish Scenario: Sell opportunities are likely below 1.2888, with potential to fall toward 1.2841.
- Bullish Scenario: Breaking above 1.3044 could shift focus to the upside, although sustained upward movement depends on BoE policy adjustments.
USD/JPY Market Analysis
Current Trend: Bullish
- Recent Performance: USD/JPY surged as the dollar strengthened post-election. The pair’s rise is supported by increased U.S. yields and concerns around BoJ interventions if yen weakness persists.
- Key Influencers: U.S. interest rate outlook, BoJ’s potential intervention, and Japan’s wage growth and inflation pressures.
Support Levels: 152.65, 151.65
Resistance Levels: 153.90, 154.31, 155.20
- Outlook: USD/JPY remains on a bullish path with potential to test 155.20 if U.S. economic data and Fed policy remain supportive. However, pressure from Japan to stabilize the yen may cap gains or trigger temporary corrections.
Scenarios:
- Bullish Scenario: Buying opportunities remain above 153.90, aiming for 155.20.
- Bearish Scenario: A break below 151.65 could signal a bearish reversal, with potential to test deeper support near 150.
Gold (XAU/USD) Market Analysis
Current Trend: Bearish
- Recent Performance: Gold dropped sharply as safe-haven demand waned and investors speculated on Fed rate adjustments. This decline reflects reduced appeal for gold with anticipated Fed rate cuts likely to continue into 2025.
- Key Influencers: Fed rate trajectory, inflation expectations, and demand for safe-haven assets.
Support Levels: 2634, 2604
Resistance Levels: 2670, 2708, 2733
- Outlook: Gold may continue its decline to 2634 or lower if the dollar’s strength persists. However, a dovish shift by the Fed could provide some relief, potentially lifting gold toward 2708.
Scenarios:
- Bearish Scenario: Selling near resistance at 2670, targeting a further decline to 2634.
- Bullish Scenario: A sustained break above 2750 could suggest a reversal, with targets around 2800.
Summary of Key Forecasts:
Gold (XAU/USD): Bearish with risk to 2634, though a dovish Fed could trigger a recovery toward 2708.
EUR/USD: Remains bearish with downside likely to 1.0667 unless Fed dovishness sparks a correction.
GBP/USD: Bearish with potential support at 1.2733 if current U.K. and U.S. policies persist.
USD/JPY: Bullish momentum toward 155.20, though susceptible to interventions.
