Market Analysis

XAUUSD

Prediction: Decrease

Fundamental Analysis: 

Recent U.S. consumer inflation data exceeded expectations, leading to diminished market predictions for a 50 basis point rate cut by the Federal Reserve next month. Despite this, analysts note that the central bank is still expected to implement rate cuts. Following Thursday's Consumer Price Index (CPI) release, gold prices briefly dipped below $2,600 per ounce but soon stabilized. Although the U.S. economic calendar appears relatively light this week, attention will be on crucial consumer data, with economists keen to observe if U.S. consumer spending remains robust. Additionally, analysts highlight that gold continues to receive strong support as a safe-haven asset due to ongoing geopolitical tensions in the Middle East, which may further impact investment flows in the coming week.

Technical Analysis: 

The daily chart for gold reveals that the Relative Strength Index (RSI), which dropped to a neutral level of 50 earlier this week, is now trending upward toward 60. This indicates that gold prices still show a tendency toward a bullish trend after a recent technical correction. The midpoint of the upward channel established since June, located at $2,660, serves as short-term resistance. If this level is surpassed, the next targets for gold will be $2,675 (a static level), followed by $2,700-$2,710 (a round number and the upper edge of the channel). Conversely, if gold drops below $2,600-$2,590 and that level becomes a point of resistance, technical sellers may begin to emerge.

USDJPY

Prediction: Increase

Fundamental Analysis: 

The Japanese Yen (JPY) weakened against the US Dollar (USD) on Friday, reversing its recent recovery from the lowest levels seen since early August. This decline was influenced by comments from Japan's Prime Minister Shigeru Ishiba regarding monetary policy, alongside a drop in real wages for the first time in three months, reduced household spending, and a decrease in pressure from raw material costs. These developments have led to increased skepticism about the Bank of Japan’s (BoJ) intentions to raise interest rates, further putting downward pressure on the JPY. Meanwhile, the USD experienced a slight uptick, attracting buyers to the USD/JPY pair. Despite signs of a weakening labor market, expectations for a more aggressive interest rate cut from the Federal Reserve (Fed) have diminished.

Technical Analysis: 

From a technical standpoint, USD/JPY has broken above the 50-day Simple Moving Average (SMA) for the first time since mid-July and is currently holding above the 38.2% Fibonacci retracement level, indicating bullish momentum. Daily chart indicators are gaining strength without entering overbought territory, suggesting potential for further upside. Any pullbacks are likely to find support near the $148.00 level, which is a significant support zone. Should this level be breached, the pair may decline to 147.35 and subsequently to 147.00. On the upside, resistance is noted at 149.00, with the next targets set at 149.55-149.60, potentially advancing towards the 150.00 level and the 150.75-150.80 range.

EURUSD

Prediction: Bearish

Fundamental Analysis:

After reaching a low of $1.0900 last Thursday, the EUR/USD pair rebounded and closed the day unchanged. By Friday's European session, the pair had climbed to approximately $1.0950. The decline on Thursday was influenced by US inflation data; however, disappointing labor market figures prevented the US Dollar from sustaining its gains, enabling a recovery in the EUR/USD pair. Last week, the US economic calendar featured the Producer Price Index (PPI), with expectations for a core PPI increase of 0.2% in September, following a 0.3% rise in August. Should the core PPI exceed these expectations, it may limit any further gains for EUR/USD.

Technical Analysis:

The RSI on the 4-hour chart crossed above 40 on Friday, suggesting a decrease in bearish momentum. The $1.0950 level, coinciding with the 20-period SMA and the 61.8% Fibonacci retracement of the recent upward movement, serves as a critical pivot for EUR/USD. If this level is confirmed as support, the next potential resistance points are $1.1000 and $1.1050. Conversely, if $1.0950 acts as resistance, support levels may be found at $1.0900 (a significant round number), $1.0870, and $1.0800 (another notable round number).

BTCUSD

Prediction: Decrease

Fundamental Analysis:

According to a recent tweet from The Kobeissi Letter, the total money supply in the US, Eurozone, Japan, and China has reached an unprecedented $89.7 trillion, with an increase of $7.3 trillion over the past year. Historically, Bitcoin has shown a tendency to rise in correlation with the M2 money supply, typically with a delay of 75 to 90 days. Despite potential economic challenges, many analysts are optimistic about a strong rally for Bitcoin as 2024 approaches its end. Market analyst Joe Consorti indicates that this M2 trend could potentially drive Bitcoin's price to $90,000 by the end of 2024, a perspective that is further supported by data from CryptoQuant.

Technical Analysis:

From a technical standpoint, Bitcoin's price trajectory remains uncertain until it surpasses the $65,000 resistance level. Although the current price action is bullish, it is constrained by this significant resistance, which serves as a psychological barrier for traders. If Bitcoin cannot break through the $65,000 mark, it may face a bearish pullback. The initial major support level is identified at $61,591, with a stronger support zone at $59,434. Should buying momentum wane, these support levels will be critical in determining whether Bitcoin can sustain its upward movement or enter a more pronounced consolidation phase. If substantial buying activity persists and macroeconomic conditions remain favorable for risk assets, Bitcoin could experience another upward surge. A successful breach of the $65,000 resistance might pave the way for further gains, potentially reaching $70,000 or beyond.

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