Market outlook today

[Zerologic]

Gold prices are currently still moving above the $2400 price level, in uncertainty ahead of the release of the New York Manufacturing Index and Federal Reserve Chairman Jerome Powell's speech at the Economic Club of Washington DC.

Recently, the US was shocked by the news that the Trump campaign team experienced a shooting incident that caused his right ear to bleed and killed a spectator. The shooter was shot dead by the Secret Service.

Last week the price of gold drew a bearish candlestick with a long wick at the bottom of the candle, reflecting the price falling in the face of high buyer pressure so the wick is longer than the body of the candle.

Monday's economic schedule that may be of interest to investors is the New York Manufacturing Index which surveys 200 New York state manufacturers to measure the relative level of general business conditions, a value above 0.0 indicates the economy is improving, and below 0.0 indicates conditions are worse improvement.

Fed Chair Jerome Powell's speech at the Economic Club of Washington DC attracted investors' attention in hopes that audience questions would receive hawkish or dovish answers regarding interest rate policy.

 

[Zerologic]

USDCAD ahead of inflation data tries to continue the rise. Yesterday USDCAD drew a long body bullish candlestick with a slightly long shadow at the bottom of the candle and a short shadow at the top of the candle. The price crossed the middle band line from the downside reflecting a strong uptrend.

Referring to price history, USDCAD has been trading in the low range of 1.35894 to a high of 1.37909 since May 12. Sees the W1 candlestick shape, for five weeks USDCAD closed with a bearish candlestick even though the price moved in a range.

Earlier this week USDCAD tried to rise drawing a bullish candlestick, but investors may be anticipating today's important news CPI Canada US retail sales.

According to Forexfactory data, Canada's CPI is expected to be 0.1% from the previous data revision of 0.6%, while the medium CPI year after year is expected to be 2.7% from the previous data revision of 2.8%. If the actual data is greater than the forecast, good for CAD.

Prices are predicted to be more volatile because apart from the Canadian CPI data, US retail sales data excluding automobiles will also be released, which is expected to be 0.1% from the previous data revision of -0.1%, and retail sales Change in the total value of sales at the retail level is expected to be -0.3% from previous data revision 0.1%.

 

[Zerologic]

As expected, yesterday Gold hit a new all-time high of $2469. As seen from the bullish candlestick, the price of gold strengthened strongly and formed a long bullish candle with almost no shadow which reflects a strong upward trend.

Yesterday's gold movement fell due to US retail sales data which was higher than expected. Even though gold prices fell because US retail sales data was higher than expectations, this seemed only temporary and was a stepping stone for gold to soar higher.

As the long-awaited retail sales data showed the actual value at 0.4% from the estimated 0.1%, this reflects an increase in purchasing power so that market confidence in the Fed's interest rate cut increased. According to the CME's FedWatch Tool, the odds of a 25 basis point (bp) rate cut are 93.3%.

Apart from that, the US political situation ahead of the election became a public concern after Trump was shot. If the situation worsens it might have a good impact on gold because worried investors will prefer gold as a safe-haven asset.

Global geopolitical risks also provide impetus to the possibility of a long-term increase in gold prices.

There are currently no important economic timelines worth paying attention to regarding gold and the USD. The high price of gold technically allows for a retracement, but if global demand strengthens then gold could continue its bullish streak

 

[Zerologic]

Ahead of Australian job data, AUDUSD prices tend to be flat. AUDUSD's price yesterday drew a small body bearish candlestick with a longer wick at the top of the candle.

Yesterday's highest price was 0.67543 and the lowest was 0.67206. The price is now consolidating near the middle band line. Today there is an important economic schedule related to AUD and USD regarding job data.

According to Forexfactory Job Data Australia, Employment Change the previous month was 39.7k, expected at 19.9k. Meanwhile, the previous month's Unemployment Rate was 4.0% and is expected to increase to 4.1%.

Meanwhile, US job data, last month's Unemployment Rate of 222k, is expected to increase by 229k.

 

[Zerologic]

Yesterday the EURUSD price drew a bearish candle amid mixed US economic data.

Yesterday's EURUSD price reached its highest point at 1.09404 and its lowest point at 1.08932. Price draws a bearish long-body candle with almost no shadow indicating a strong decline. Visually, the price is again approaching the previous low.

Yesterday's US economic data showed mixed data, on the one hand, Jobless claims pushed the USD lower, because the actual data was greater than expected. On the other hand, the Philly Fed Manufacturing Index pushed the USD higher with actual data greater than expected. Meanwhile, the European economic data's Main Refinancing Rate showed that the data remained unchanged at 4.25%.

At the conference, President Christine Lagarde said that European domestic inflation remained high and wages were increasing at a high rate. He also highlighted wages, profits, and geopolitical factors as potential rising inflation risks.

 

[Zerologic]

Gold drops after record ATH, wary of psychological support. Last Friday, the price of gold fell sharply to a low of $2393 from an open of $2444, a high of $2445 and a close of $2400.

Friday's market mover, US data showed initial jobless claims were released higher than expectations, 243K vs 230K, while the manufacturing index from the Philadelphia Fed jumped to 13.9 from the previous 1.3.

Although geopolitical risks support gold, there is a decline in physical buying in Asia, which may "pause" the yellow metal for bulls.

On the other hand, Austan Goolsbee, President of the Chicago Fed, added Fed officials who welcomed the progress of cooling inflation. Goolsbee said it was very clear that inflation had fallen in the last 12-18 months and considered this to be the fastest rate of inflation ever seen.

Today's focus, there is no important economic data from the economic schedule that is related to the USD. However, traders need to follow market updates even though it is predicted that gold price movements may pause or consolidate.

 

[Zerologic]

The decline in Silver prices loosened near the lower band line. After last week Silver declined for 4 consecutive days, in last Monday's trading the price sought balance near the lower band line.

Silver draws almost an indecision candle like a Doji with short wicks on the top and bottom of the candle. The decline in silver prices may be due to declining Chinese demand due to the economic slowdown.

Apart, from yesterday there was no important news that caught traders' attention, which allows traders to wait for the next important event.

Joe Biden's exit from the 2024 election is hot news in the US which could change the American political map.

Today there are no important economic schedules from the economic calendar according to Forexfactory.

 

[Zerologic]

EURUSD fell drawing a long body bearish candlestick yesterday. It continued last week's decline after a lull on Monday.

The disinflation process in the Eurozone is quite encouraging, allowing the ECB to lower interest rates in September. ECB Vice President Luis de Guindos said September was a much more comfortable month to decide than July.

EURUSD price yesterday formed a high of 1.08962, and a low of 1.08434, there was only a small shadow on the top and bottom of the candle.

Today investors will probably focus on inflation data. PMI data from Germany and France which may influence the value of the Euro.

French Flash Manufacturing PMI data is expected to be 45.8 from the previous 45.4. Meanwhile, the German Flash Manufacturing PMI is expected to be 44.1 from the previous 43.5.

 

[Zerologic]

USDJPY extends losses further on hawkish sentiment surrounding BoJ's policy stance ahead of next week's meeting.

Japan's Manufacturing PMI fell to 49.2 in July from 50.0. On the other hand, the Services PMI jumped to 53.9 from 49.4 previously.

The US manufacturing PMI also contracted, amounting to 49.5 from the previous 51.6, missing expectations of 51.7. Meanwhile, the services PMI rose to 56.0 from the previous 55.3, slightly higher than expectations of 51.7.

Even though the economic data for Japan and the US are somewhat similar, it seems that the difference in the higher Japanese services PMI data has contributed to the strengthening of the JPY.

Apart from these reasons, anticipation of the BoJ raising interest rates at its policy meeting next week, prompted short-sellers to exit their positions and support the JPY.

Meanwhile, the USD is challenged by the possibility of the Fed reducing interest rates next September. CME Group's FedWatch Tool data shows an increase in the probability value of 93.6% for the Fed's interest rate cut by 25 basis points at the September meeting.

Today investors are focused on the release of GDP news and US unemployment claims, which may have an impact on financial markets including the USDJPY pair.

 

[Zerologic]

USDCAD extended its advance reaching a high price level of 1.38478 before rebounding near 1.38224. USDCAD's bullish sentiment started in mid-July and still shows a strong rally until now.

Yesterday the Bank of Canada (BoC) again reduced interest rates by 25 basis points to 4.50%, this is the same as the analyst's expectations of 4.50% from the previous 4.75%. Further rate cuts are likely according to Commerzbank FX strategists.

According to Commerzbank FX strategist Michael Pfister, CAD will still be under pressure until the end of the year, because lowering interest rates will only provide a pause in profits in the real economic sector.

On the other hand, the strong US GDP is another reason that pressures CAD to weaken further. In the GDP Advanced report the US economic data grew at a high rate of 2.8%, double the previous release's 1.4%. Previously, economists predicted GDP growth of 2.0%. On the other hand, US Unemployment Claims data also fell by 235k from the previous 245k, further supporting the strengthening of the USD, previously economists predicted Unemployment Claims of 237K.

Today investors will focus on US Personal Consumption Expenditure (PCE) data or CPI, which is the Fed's most preferred tool for considering interest rate policy. Data for June showed the PCE value was 0.1% in line with economists' expectations.

Economists predict that PCE will rise 0.2% from the previous 0.1%, if the actual data is greater than forecast, it usually has a good impact on the USD.