EURUSD Analysis
EURUSD is moving in the Box pattern and the market has rebounded from the support area of the pattern
Europa region German industrial production fell for several months in a row, which depreciated the value of the euro. Knot, an ECB member, stated that current interest rates are currently in a comfortable range.
The war in Israel has caused a risk-off sentiment in global financial markets, which has caused the euro to decline once more after a respectable upswing last week. As investors were drawn to the greenback by its appeal as a safe haven, it gained favour. In addition to adding to the EUR’s decline, weak Chinese spending during their Golden Week last week intensified growth worries in the area. German industrial production decreased more than anticipated this morning (see economic calendar below), but it improved slightly over the July print. All things considered, the outlook for the European economy is still dire, and this will continue to hurt the value of the local currency.
Following the Non-Farm Payroll print last Friday, Fed speakers will be in the spotlight later today. They may also make references to the US CPI report that is expected later this week. In a speech earlier today, the European Central Bank’s (ECB) Knot expressed his comfort with interest rates as they are, which is consistent with expectations that rates will remain unchanged until the October meeting.
Gold Analysis
XAUUSD Gold price is moving in the Descending channel and the market has rebounded from the lower low area of the channel
Commodity prices for gold and silver surge from lows due to the conflict between Israel and Hamas. concerns about the state of funds held in US dollars and gold because of haven assets.
Following an attack by the Palestinian Islamist militant group Hamas on Israel over the weekend, which has left over 700 people dead according to recent reports, violence broke out throughout the Middle East. Israel retaliated by attacking Hamas targets in the Gaza Strip, resulting in the reported deaths of over 400 people.
Despite widespread condemnation, the two’s protracted conflict shows no signs of ending, leaving markets susceptible to more bouts of volatility. In the early turnover, the US dollar has strengthened, oil is up 3% to 4%, and traditional safe-haven currencies like the Swiss Franc and the Japanese Yen are doing better.Gold has increased significantly as a result of the Middle East crisis, building on Friday’s post-NFP surge.
The headline NFP number exceeded expectations, and the Fed will have been happy to see that average hourly earnings decreased slightly in their ongoing battle against inflation. On Thursday, the US will release its most recent inflation report, which is predicted to show a decline in headline and core inflation.
Silver Analysis
XAGUSD Silver price is moving in the Descending channel and the market has rebounded from the lower low area of the channel
According to US military officer Brown, Iran should stay out of Israel’s war with Hamas. However, the report that Iran’s weapons were used in the Israeli attack is false; the Israeli military used Iran’s weapons.
Early on Tuesday, top US military official Charles Q. Brown begged Iran to refrain from interfering in an Israeli conflict. Brown claims that he does not want the disagreement to worsen. The US national security spokesperson, John Kirby, said late on Monday that there is no evidence of direct Iranian involvement.
Meanwhile, unconfirmed reports state that an Iranian weapons convoy crossing into Syria from Iraq was hit by an airstrike near al-Qaim/Bukamal. Israel is assumed to be the source of the airstrike.
USDJPY Analysis
USDJPY is moving in the rising wedge pattern and the market has rebounded from the higher low area of the pattern
The Core CPI estimate for the fiscal year 2023–2024 was increased by the Bank of Japan to 3.0% from 2.5 percent. JPY weakness has persisted in the market, and the Bank of Japan has not yet taken any action.
The Kyodo news agency reported on Tuesday that the Bank of Japan BoJ is thinking of increasing the core Consumer Price Index CPI estimate for the fiscal year FY 2023–2024 to almost 3% from the 2.5% forecast in July, citing some sources with knowledge of the matter.
USDCHF Analysis
USDCHF has broken the Box pattern in downside
The Swiss Regulator, FINMA, grants Banca General Private Bank permission to open branches within the borders of Switzerland. Fears of an Israel War led to an appreciation of the Swiss Franc.
Gian Maria Mossa, the chief executive of Italian private bank Banca Generali BGN.MI, stated on Monday that the bank is open to the possibility of purchasing family offices and small banks in Switzerland and Italy. According to Mossa in an interview with the Swiss daily Corriere del Ticino, Banca Generali, which is 50% owned by Assicurazioni Generali GASI.MI, the leading insurer in Italy, has been given the all-clear by the Swiss regulator FINMA to conduct banking operations in the nation.
The goal will always be organic growth, but we are open to acquisitions in Switzerland and Italy. In addition to trusts and family offices, we also examine small banks, Mossa stated. Banca Generali acquired a 9.8% share in Mainstreet Partners, a London-based ESG advisory and rating boutique, in February. According to a source close to the matter, it started exclusive talks last month to purchase 30% of IRTOP Consulting, a financial boutique that specialises in providing advice for capital markets in Italy. This confirms previous media reports. According to Mossa, Our position is to make acquisitions when there is a chance to create value, sustainability, transparency, and a suitable client base.
EURCHF Analysis
EURCHF is moving in the Descending channel and the market has reached the lower low area of the channel
Villeroy, a member of the ECB Governing Council, stated that additional rate increases are not anticipated, that the Israel War Conflict will not impact inflation, and that 2% inflation is anticipated by 2025.
Francois Villeroy de Galhau, President of the Bank of France and member of the Governing Council of the European Central Bank, stated on Tuesday that “at this stage further rate hikes not right thing to do.”Economic uncertainty will be exacerbated by events in Israel. Because of the Israeli situation, we are especially cautious about changes in the price of oil.
Despite the circumstances in Israel, there is a noticeable tendency for inflation to decline. We see no need to adjust our inflation forecasts for Israel at this time; it is still expected to hover around 2 percent by 2025. Right now, interest rates are at a good place.
GBPUSD Analysis
GBPUSD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
The GBPUSD may be influenced by the UK GDP data for August, industrial production this week, concerns about a slowing UK economy, and the Bank of England’s decision to hold rates.
Three days of straight gains in the GBPUSD pair are broken by risk aversion sparked by Israel and Hamas’s conflict following the latter’s attack over the weekend. While Wall Street is experiencing losses, the fear index, or Volatility Index , is rising by 5.28% to 18.41. Recently, Dallas Fed President Lorie Logan stated that while higher US yields might avoid another rate hike, her focus is on bringing down inflation while emphasising the need for restrictive policy. The most recent week’s US and UK data points to a decline in the value of GBPUSD. Monetary policy should remain tight due to the recent hot US Nonfarm Payrolls report. Analysts are becoming more concerned about a recession as the UK’s economic data indicates that the country’s economy is contracting. According to sources cited by Reuters, no further rate hikes by the BoE are anticipated.
Contrary to expectations, money market futures show that the Bank of England (BoE) is unlikely to raise its bank rate in December and February, with odds of 40% and 50%, respectively. The CME Fed Watch Tool in the US shows investors who are still dubious. Indeed, with odds of 51.97%, traders anticipate the US Federal Reserve (Fed) cutting rates for the first time by May 2024. Apart from this, economic data—such as the UK’s GDP figures for August, industrial production, trade balance, and manufacturing production—would serve as a signal for GBPUSD trades. The September Producer Price Index (PPI), the Consumer Price Index (CPI), the most recent Fed minutes, and consumer sentiment are all scheduled to appear on the US Front docket.
CADCHF Analysis
CADCHF is moving in the Descending channel and the market has reached the lower high area of the channel
Following the start of the conflict between Israel and Hamas, oil prices skyrocketed. The rising price of oil provides further support to the Canadian dollar.
The increase in oil prices, which may be related to the fighting taking place in the Gaza Strip. Even though Canada observed Monday as part of the national holiday for Thanksgiving, geopolitical tensions continue to exist, which raises the price of crude oil because of worries about Middle East stability.
Consequently, the Canadian Dollar , which is strongly correlated with oil prices, is receiving support. On Monday, Western Texas Intermediate oil saw its biggest gain in six months, rising to $86.01 per barrel. At the time of writing on Tuesday, it had retreated to $84.70.
AUDUSD Analysis
AUDUSD is moving in the Descending channel and the market has rebounded from the lower low area of the channel
The weekly average of Australian consumer confidence rose by 0.60 points, with a reading of 1.9 points. based on the findings of ANZ economists. Expectations for inflation dropped from 0.10 points to 5.1%, with the four-week average remaining at 5.2%.
Australia and New Zealand Banking Group economists highlight key findings from the Roy Morgan Australian Consumer Confidence data release. Consumer confidence increased by 1.9 points, while the four-week moving average increased by 0.6 point. Weekly inflation expectations fell 0.1 percentage point to 5.1%, while the four-week moving average remained at 5.2%. Current financial conditions increased by 3.2 points, pushing the index above 70 for the first time since April.Future financial conditions improved by 1.7 points. After two weeks of declines, current economic conditions increased by 1.0 point. Future economic conditions improved by 1.6 points.
NZDUSD Analysis
NZDUSD is moving in the box pattern and the market has reached the resistance area of the pattern
RBNZ Last month, rates remained unchanged, making the NZD Dollar weaker, but rising commodity prices benefit NZD exports to China. Further rate hikes are not on the RBNZ’s agenda. This week’s NZDUSD was primarily driven by US data.
Despite the strong US Nonfarm Payrolls data released on Friday, the US Dollar USD did not rise significantly on Monday, as US Treasury yields fell. By press time, the 10-year US Treasury bond yield was 4.64%. Furthermore, remarks made by Federal Reserve Fed officials overnight prompted investors to downplay the likelihood of additional rate hikes, causing US bond yields to fall further. As a result, this development is seen as weakening the US dollar and providing support for the NZDUSD pair. The US Dollar Index DXY is down for the fifth day in a row, trading around 106.00 at the time of writing. The conflict between Hamas and Israel proved to be short-lived, as evidenced by a positive turnaround in capital markets. This, in turn, reduces the USD’s safe-haven appeal and provides additional support to the NZDUSD pair. Investors will most likely be watching the minutes of the upcoming FOMC meeting, which is scheduled for Wednesday. The impact of this release on expectations for the Federal Reserve’s next policy move, which could influence demand for the Greenback, is being closely watched. This event has the potential to act as a new catalyst, guiding the Kiwi couple’s path.
On the other hand, the Reserve Bank of New Zealand RBNZ decided to keep the Official Cash Rate OCR at 5.5% in its monetary policy meeting on Wednesday, as predicted. As stated in the RBNZ statement, the central bank agreed that interest rates may need to be kept at a low level for an extended period of time. This stance almost certainly influenced the Kiwi pair’s performance. The final Food Price Index figures will be released on Thursday, followed by Business NZ’s Purchasing Manager Index PMI on Friday. Traders will be paying close attention to the US Core Producer Price Index PPI on Wednesday and the Consumer Price Index CPI on Thursday, as these events are critical in assessing inflationary trends and economic conditions in the US.
Don’t trade all the time, trade forex only at the confirmed trade setups.
Get Live Free Signals now: forexgdp.com/forex-signals/
