Market Analysis

XAUUSD

Prediction: Upward Movement Expected

Fundamental Analysis:

Spot Gold remained in a consolidation phase during the first half of Monday, following the release of the US Nonfarm Payrolls (NFP) report last Friday. XAU/USD found some short-term demand as the week began, driven by concerns over escalating tensions in the Middle East, which affected overall market sentiment. However, the metal's momentum shifted downward in the US trading session, as strong US economic data bolstered the US Dollar, supporting expectations of a slower pace of interest rate reductions by the Federal Reserve.

Technical Analysis:

On the daily chart, XAU/USD is testing the lower boundary of a short-term wedge pattern but remains within it. The pair is trading above its key moving averages, with the 20-day Simple Moving Average (SMA) trending sharply upward, currently around $2,616. Meanwhile, the 100-day and 200-day SMAs continue their bullish trajectories, though both remain approximately $200 below the shorter-term average. The Momentum indicator has flattened within positive territory, while the Relative Strength Index (RSI) has started to decline from overbought levels, currently around 63, suggesting a correction but not yet signaling a deeper bearish move.

AUDUSD

Outlook: Downtrend Expected

Fundamental Analysis: 

Escalating tensions in the Middle East are amplifying market uncertainty, putting pressure on risk-sensitive currencies like the Australian Dollar. Rising oil prices, driven by the Israel-Iran conflict, could lead to significant capital outflows from economies heavily reliant on oil imports. Meanwhile, the US Dollar Index (DXY), which measures the dollar’s performance against six major currencies, holds steady around 102.00. Traders are now shifting focus to the US Nonfarm Payrolls (NFP) report, which could reshape expectations regarding the Federal Reserve’s upcoming monetary policy decisions. Current market sentiment leans towards a further 75 basis points (bps) rate cut by the Fed over the remaining two meetings of the year.

Technical Analysis: 

The AUD/USD pair continues to struggle near the key resistance level of 0.6850 during the European session on Friday. The Australian Dollar is expected to remain under pressure ahead of the release of the US September Nonfarm Payrolls data at 12:30 GMT, which could significantly impact the pair’s direction.

USDJPY

Prediction: Increase

Fundamental Analysis: 

Japan’s economy minister, Ryosei Akazawa, expressed concern on Tuesday about the recent decline in real wages, marking the first drop in three months. He emphasized that this is not favorable news and reiterated the government’s commitment to creating conditions where real wages can steadily increase. Meanwhile, the USD/JPY reversed its earlier dip in the Asian session near the 147.55 level, showing resilience after a modest pullback from its highest point since mid-August, recorded the previous day. Ongoing uncertainty surrounding potential rate hikes by the Bank of Japan (BoJ) is keeping JPY bulls cautious, especially with Japan’s snap election scheduled for October 27.

Technical Analysis: 

The USD/JPY pair retreated after reaching its highest point since August 16, in the 149.10-149.15 zone. This pullback extended through the European session on Monday, halting a three-day winning streak. The pair dropped to the 148.00 level, marking a fresh intraday low before recovering slightly. Despite the retreat, the market still shows signs of upward momentum.

ETHUSD

Prediction: Increase

Fundamental Analysis: 

Ethereum's network is set for a potential upgrade with the proposed EIP-7781 by Ben Adams, co-founder of Illyriad Games. This proposal aims to improve Ethereum’s throughput by 33% by reducing slot times from 12 seconds to 8 seconds. Slot times are intervals when validators can propose new blocks, so the reduced slot time would lower the latency for based rollups—a new type of rollup that uses the main chain for transaction sequencing instead of optimistic or ZK rollups. Additionally, the proposal could increase the number of blobs (a data structure for Layer 2 transactions introduced with the March Dencun update) from 6 to 8, or raise the gas limit from 30 million to 40 million.

Technical Analysis: 

Ethereum is currently trading around $2,450, showing slight gains on the day. The altcoin has seen nearly $57 million in liquidations over the last 24 hours, with $41.23 million from long positions and $15.75 million from shorts. ETH is consolidating within a key rectangle channel after facing resistance near the $2,500 psychological level, which resulted in a Doji candle on the 4-hour chart, indicating market indecision.

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