EUR/USD Bears in Control – Is Parity on the Horizon?
XAU/USD
Prediction: Increase
Gold prices continue their upward momentum, trading near record highs due to increased safe-haven demand following U.S. President Donald Trump's new tariff decision. The primary trend remains bullish; however, investors should watch price reactions at key resistance levels.
FUNDAMENTAL ANALYSIS
Monetary Policy and Fed Impact:
The Fed is likely to keep interest rates unchanged in the near term, with market expectations of a total 45 basis points cut in 2025.
U.S. Treasury yields have fallen to their lowest levels in over a month, weakening the USD and supporting gold prices.
Inflation and Market Drivers:
A 25% tariff on all steel and aluminum imports into the U.S. has raised inflation concerns and economic uncertainty, boosting gold demand. U.S. labor data indicates that the unemployment rate remains at 4%, with a stable job market, but not strong enough to shift monetary policy direction.
Geopolitical and Market Sentiment:
U.S.-China trade tensions escalate as Trump announces new tariffs, increasing safe-haven demand.
The People's Bank of China (PBoC) continued to buy gold in January 2025, marking the third consecutive month of gold reserve expansion, signaling confidence in the precious metal.
The Bank of England (BoE) has just cut interest rates with a more dovish stance than expected, providing additional support for gold prices.
TECHNICAL ANALYSIS
Key Resistance Levels
● $2,882/oz: Previous all-time high; breaking above could lead to $2,886/oz.
● $2,900/oz: Significant psychological resistance; a breakout could trigger stronger upside momentum.
Key Support Levels
● $2,850/oz: Closest support level, a potential buying zone.
● $2,827/oz: If breached, prices may drop toward $2,793/oz.
● $2,793/oz: Major support level; if gold dips further, this will be a strong buying zone.
RSI: 65.17 on the H4 chart, nearing the overbought zone, indicating a potential minor correction before continuing higher.
EMA level: Prices remain above the EMA 34, EMA 89, and EMA 200, reinforcing the bullish trend.
Price Action:
● If prices break above $2,886/oz with strong buying momentum, the uptrend could continue toward $2,900/oz.
● If a correction occurs, the $2,850 - $2,827/oz range will serve as a crucial support area for buying opportunities.
Trading Volume: High, confirming the uptrend but also indicating potential volatility if profit-taking occurs.
The primary trend for gold remains bullish, supported by macroeconomic factors and safe haven inflows. However, close monitoring of market reactions at the $2,886 - $2,900 zone, as well as USD movements and Fed policy decisions, is essential for an optimal trading strategy.
EUR/USD
Prediction: Decrease
The EUR/USD pair remains in a downtrend as prices stay below key EMAs on the H4 chart. The decline is supported by the strengthening USD, driven by stable U.S. Treasury yields and expectations that the Fed will maintain tight monetary policy for an extended period. However, the RSI is approaching the oversold zone, which may lead to a short-term technical rebound.
FUNDAMENTAL ANALYSIS
Monetary Policy and Fed Impact:
Fed Interest Rates: The market is pricing in the likelihood of the Fed keeping rates unchanged for an extended period, with a potential 25-basis-point rate cut in July.
Bond Yields: U.S. Treasury yields remain stable, supporting the USD's strength and pressuring EUR/USD.
Impact of U.S. Employment Data: If U.S. labor market data exceeds expectations, the USD could strengthen further, pushing EUR/USD lower.
ECB Monetary Policy:
The ECB maintains high interest rates, but may consider easing policy if the Eurozone economy weakens, reducing the Euro’s attractiveness relative to the USD.
Eurozone inflation is gradually declining, increasing the possibility of an earlier-than-expected ECB rate cut, adding further pressure on the EUR.
Impact from Other Currencies:
The Japanese Yen is strengthening as the BOJ may continue raising interest rates, reducing the EUR’s appeal for Japanese investors.
The Bank of England (BoE) may cut interest rates, indirectly influencing overall market sentiment in the currency markets.
The PBoC is maintaining a stable Chinese Yuan, helping stabilize Asian currency markets but having little direct impact on EUR/USD.
Macroeconomic and Trade Risks:
Geopolitical Tensions: If conflicts in the Middle East or Europe escalate, safe-haven flows may favor the USD, further pressuring EUR/USD.
Slowing Global Economic Growth reduces demand for risk assets, supporting the USD and driving EUR/USD lower.
TECHNICAL ANALYSIS
Key Resistance Levels
● 1.03398 (Recently broken and now a key resistance level)
● 1.03749 (EMA 89)
● 1.04326 - 1.04500 (Bearish Order Block zone, strong selling pressure)
● 1.05001 (Major resistance level)
Key Support Levels
● 1.02896 (Currently being tested; if broken, further downside is expected)
● 1.02221 (Next support, confluence zone with previous price action)
● 1.01766 (Deeper support, likely if the bearish trend continues)
RSI: 36.58 on the H4 chart, indicating the price is nearing the oversold zone, which may lead to a short-term rebound.
EMA Trends:EMA 34 and EMA 89 are sloping downward, reflecting strong selling pressure.
EMA 200 remains above the current price, acting as a dynamic resistance level.
Price Action: The main trend remains bearish, so selling at key resistance zones is preferred, especially when price reacts to the EMA 200 or Bearish Order Block.
EUR/USD remains in a downtrend, driven by USD strength and the Fed’s monetary policy stance. However, the RSI approaching the oversold zone suggests a possible short-term bounce before further declines. Traders should closely monitor macroeconomic factors and price action to optimize their trading strategy.
BTC/USD
Prediction: Decrease
Bitcoin continues to maintain a downtrend on the H4 timeframe, with price trading below key EMAs, particularly the EMA 200. Selling pressure remains dominant due to cautious market sentiment and the overall weakness of risk assets. However, the RSI is approaching the oversold zone, which may lead to a short-term technical rebound before further declines.
FUNDAMENTAL ANALYSIS
Monetary Policy and Fed Impact:
Fed Interest Rates: The market is pricing in the likelihood of the Fed keeping rates unchanged for an extended period, with a potential 25-basis-point rate cut in July. This keeps the USD strong, exerting downward pressure on Bitcoin.
U.S. Treasury Yields: Remaining stable at high levels, making safe-haven assets more attractive compared to BTC.
U.S. Economic Data: If U.S. inflation or labor market data exceed expectations, the USD may strengthen further, leading to additional weakness in Bitcoin.
Market Sentiment and Crypto Inflows:
Crypto Fear & Greed Index has dropped to 43, reflecting cautious investor sentiment. Michael Saylor hints at new BTC purchases, which could provide short-term price support. Crypto investment funds are waiting for clearer signals before re-entering the market.
Macroeconomic and Trade Risks:
Geopolitical Tensions: If global instability escalates, capital may flow into the USD instead of Bitcoin, pushing BTC/USD lower.
U.S. Tariff Policies: Potential trade tariffs could impact broader market sentiment, indirectly affecting Bitcoin.
TECHNICAL ANALYSIS
Key Resistance Levels
● $97,665 - $99,198: Crucial resistance zones; if the price rebounds, these levels must be tested before any significant recovery.
● $102,216: A stronger resistance level, aligning with a Bearish Order Block on the H4 timeframe.
Key Support Levels
● $96,014: The nearest support level.
● $90,437: A critical support zone; if it fails, selling pressure may drive the price down to $89,164.
● $89,164: A major support level; losing this could accelerate the bearish trend.
EMA: EMA 34 & EMA 89: Both are sloping downward, indicating strong selling pressure. EMA
200: Positioned above the current price, acting as a key dynamic resistance level.
RSI: 42.89, reflecting strong bearish momentum. If RSI drops below 40, selling pressure may intensify.
Price Action:
● If BTC breaks $97,665, it may retest $99,198 and the EMA 200.
● If BTC loses support at $90,437, it could drop further toward $89,164.
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