Market Analysis

XAUUSD

Prediction: Decrease

Fundamental Analysis:

On Wednesday, gold prices reversed earlier gains, falling by up to 0.9% following U.S. inflation data that indicated a slowdown in inflation for July. Despite this decline, gold remains near its all-time high, achieved last month. This year, gold has appreciated by 19%, largely driven by expectations of monetary easing and increased gold purchases by central banks. The U.S. dollar strengthened against other currencies after the inflation data was released, making gold more expensive for non-dollar holders. Additionally, the yield on the 10-year U.S. Treasury bond saw a notable rise.

Technical Analysis:

The daily chart for XAU/USD indicates that the pair remains within its typical range. Although it is trading higher, it has formed a lower high and a lower low, which are generally considered bearish signals. Technical indicators have slightly dipped but remain in positive territory, which reduces the likelihood of a significant drop. The pair is still trading above all its moving averages, with the 20-day SMA flattening out but positioned above the bullish 100 and 200-day SMAs. Overall, a steep decline seems improbable.

USDJPY

Prediction: Potential Increase

Fundamental Analysis:

This year's arbitrage trades have seen their gains erased, with broad bank indicators showing that 65%-75% of these positions have been unwound. The dollar's response has been somewhat anticipated, yet slightly underwhelming. A 100 basis point increase in U.S. short-term interest rates is substantial, making it difficult for the dollar to overlook. JPMorgan has adjusted its dollar forecasts downward, particularly for USD/JPY, now projecting $146 in Q4 2024 and $144 in Q2 2025, down from $147. Despite the U.S. job market showing signs of weakening, other economic indicators remain robust. Historically, the dollar often consolidates after significant rate movements.

Technical Analysis:

USD/JPY is currently trading around $147.40. On the daily chart, the pair is positioned just below the nine-day Exponential Moving Average (EMA), suggesting a short-term bearish trend. The 14-day Relative Strength Index (RSI) is slightly above 30, indicating a potential correction. Support may be found near the seven-month low of $141.69 from August 5, with further downside risk towards $140.25. On the upside, the pair might encounter resistance at the nine-day EMA around $147.53, followed by the 50-day EMA at $153.40.

EURUSD

Prediction: Decrease

Fundamental Analysis:

The EUR/USD pair has dropped below the $1.1000 mark, primarily influenced by stronger-than-expected US Retail Sales data. The jump to an 18-month high of 1.0% in July exceeded expectations and countered the previous month's negative trend, easing concerns about a potential US recession. Despite improving market sentiment, expectations for a significant rate cut by the Federal Reserve have diminished. The probability of a 50 basis point cut in September has dropped from 70% to 25%, while a 25 basis point cut remains likely.

These developments support a stronger US dollar, which adds downward pressure on the EUR/USD pair. The shift in Fed expectations, coupled with strong economic data, suggests the euro might struggle to gain against the dollar in the near term.

Technical Analysis:

Technically, EUR/USD shows potential for further decline. The daily chart reveals that the pair is trading above its key moving averages, with the 20-day SMA trending upwards near $1.0890. However, the significant distance between the 20 SMA and the 100 and 200 SMAs suggests that a sharp decline might be unlikely unless the $1.0950 support level is breached.

On the 4-hour chart, the pair exhibits a neutral-to-bullish outlook, though it remains slightly below the 20 SMA. Technical indicators are in positive territory but lack a clear directional bias, indicating that the pair might hover around its current levels or face mild downward pressure unless strong support or resistance levels are tested.

Conclusion: The combination of strong US economic data and reduced expectations for aggressive Fed rate cuts suggests that the EUR/USD pair may continue to face downward pressure. However, significant support around $1.0950 could limit the extent of the decline, making it crucial to monitor this level for further direction.

BTCUSD

Prediction: Decrease

Fundamental Analysis:

FXEmpire analyst Ibrahim Ajibade highlighted a significant transaction where the U.S. government moved 10,000 Bitcoin, valued at nearly $600 million, to a Coinbase Prime wallet. According to Arkham Intelligence, this Bitcoin was initially received by the government two weeks ago and has now been transferred to Coinbase Prime’s deposit wallet. This transfer is believed to be part of the $2 billion worth of Bitcoin seized by the U.S. Department of Justice from the Silk Road dark web marketplace. In early April, a wallet holding over 30,000 Bitcoin executed a similar test transaction to Coinbase Prime. Historically, such government-related transactions have had a notable impact on Bitcoin’s price. For instance, in March 2024, a similar transfer led to a 12% drop in Bitcoin’s value within 48 hours.

Technical Analysis:

The imminent expiration of crypto options may increase selling pressure on Bitcoin, potentially driving its price below another critical support level. Bitcoin options valued at $1.4 billion are set to expire on August 16 at 8 AM UTC. The "max pain" point for these options is at $60,000, meaning the majority of options contracts would be worthless if Bitcoin remains at this price. In the past 24 hours, Bitcoin has dipped to as low as $56,100. This indicates that unless Bitcoin recovers above $60,000, the expiration could lead to further downward price movements, as options expiration typically introduces additional volatility to the crypto market.

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