Market Analysis

XAUUSD

Prediction: Decline Expected

Fundamental Analysis: 

During the European and US trading sessions on Monday, October 15, gold prices saw a sharp decline of nearly $23 from their daily peak. US media reports indicated that Israel may avoid striking Iran's oil infrastructure, which helped ease tensions in the Middle East. As a result, the demand for gold as a safe-haven asset diminished. Gold, which had reached a high of $2,666 per ounce, pulled back as the US dollar strengthened. While geopolitical factors will continue to play a role in gold’s movements, the reduced concern over Middle Eastern tensions contributed to the selloff. Security meetings in Israel are ongoing to discuss responses to attacks from Iran and Hezbollah on Tel Aviv. Reports indicate that Prime Minister Benjamin Netanyahu is inclined to target Iran’s military assets rather than its oil or nuclear sites, further alleviating market fears and driving down gold prices.

Technical Analysis: 

Despite the recent drop in gold prices from around $2,660 to $2,650, the broader upward trend remains intact. Momentum indicators like the Relative Strength Index (RSI) still reflect a bullish outlook, although a slight dip in the RSI suggests growing selling pressure. Should gold remain below the $2,650 mark, further declines could follow, with key support at $2,600. A breach of this level would likely see gold testing the 50-day Simple Moving Average (SMA) around $2,550. On the upside, a break above the October 4 high of $2,670 could lead to a challenge of the yearly high at $2,685, with potential to reach $2,700 next.

USDJPY

Prediction: Uptrend Likely

Fundamental Analysis: 

The Japanese Yen (JPY) experienced a slight rebound against the US Dollar (USD) during Tuesday's Asian session, recovering some of the previous day's losses near the 150.00 level—its lowest point since early August. However, the potential for significant JPY appreciation remains constrained due to uncertainty over the Bank of Japan's (BoJ) interest rate policies. In addition, a risk-on market sentiment could reduce the appeal of the Yen as a safe-haven currency. Expectations of a large interest rate cut by the Federal Reserve in November have also faded, leading to rising US Treasury yields and supporting the USD, which remains near a two-month high.

Technical Analysis: 

From a technical perspective, any further downside for USD/JPY is expected to attract buying interest around the $149.00 level, which could serve as a strong support near the $148.55-$148.50 range. A break below this key zone could lead to a more pronounced decline, with potential support near the $148.00 level and possibly last week’s low around $147.35-$147.30. Conversely, if the pair holds above the $150.00 level, it may encourage bullish momentum. Sustained buying pressure above $151.00 would indicate a potential bottom, setting the stage for further gains in the short term.

EURUSD

Forecast: Increase

Fundamental Analysis:

EUR/USD started the week with further declines, reaching a fresh ten-week low on Monday. The Euro weakened by 0.25% against the US Dollar, approaching the 200-day Exponential Moving Average (EMA), weighed down by a strong USD and a softening Euro. Investors are anticipating the European Central Bank (ECB) Lending Survey, due on Tuesday, for insights into the state of the banking sector. Later in the week, Thursday's release of final European inflation data (HICP) may have a limited market impact. Additionally, there are growing expectations that the ECB could cut interest rates by 25 basis points. In the US, Thursday’s Retail Sales report is projected to show a 0.3% rise for September.

Technical Analysis:

EUR/USD remains under heavy bearish pressure, with the pair slipping toward the 200-day EMA near the $1.0900 level. Since peaking above $1.1200 in late September, the currency pair has dropped nearly 3%, closing lower in nine of the last 13 sessions. The outlook remains bearish as long as the price stays below the 50-day EMA. Although the 200-day EMA at $1.0906 may provide some short-term support, the broader trend suggests further downside risk. On the upside, resistance is found at the 55-day Simple Moving Average (SMA) at $1.1038, followed by the September high at $1.1214 and the 2023 peak at $1.1275.

BTCUSD

Prediction: Decrease

Fundamental Analysis: 

October has historically been Bitcoin’s most bullish month, and a rally on October 14th has pushed the monthly gain to 4%, fueling optimism that the worst might be behind us. Analysts predict that if Bitcoin surpasses the crucial $70,000 resistance level, its momentum could intensify. CoinShares’ latest report on digital asset fund flows revealed an inflow of $419 million into Bitcoin investment products at the beginning of the week. James Butterfill, CoinShares' head of research, noted that these inflows are largely driven by the U.S. election rather than monetary policy expectations.

Technical Analysis: 

Bitcoin is currently in a strong uptrend, having convincingly broken past the $65,000 resistance level. This indicates that buyers have regained control and may soon attempt to breach the next resistance at $66,500. Over the weekend, sellers tried to push the price below the 20-day moving average of $62,500, but buyers stepped in, triggering a sharp rebound. While resistance at $66,500 remains a hurdle, if buyers maintain the price above $65,000, a breakout could occur, potentially pushing the price up toward the $70,000 mark. Sellers are expected to fiercely defend the $70,000 to $73,777 range. For bears to regain momentum, they would need to drive the price back below key moving averages, possibly targeting the $60,000 support level.

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