Daily Analysis

[Zforex]

Daily Analysis Provided by zForex - 06.25.2024​

Investors Cautiously Await Key Economic Data as Geopolitical Tensions Simmer​

The dollar index remained below 105.5 on Tuesday, reflecting a 0.3% decline from the previous session, as investors awaited the upcoming US PCE inflation data and comments from the Federal Reserve to gain insights into future interest rate decisions. This anticipation comes with preparations for the first US presidential debate between Joe Biden and Donald Trump scheduled for Thursday. Last week, the dollar reached a near two-month high, contrasting with other major central banks that have started easing their rates earlier due to the Fed's cautious stance on rate cuts.
The euro experienced a slight decline of 0.1% to $1.0725, influenced by political unrest in France following President Emmanuel Macron's unexpected decision to call a snap election earlier in the month. Despite this, the euro has mostly maintained its position within the $1.07-1.08 range throughout the year. Upcoming inflation data from Germany and France, along with the initial round of the French election on Sunday, are expected to be significant for the euro's performance.
The Japanese yen continued to strengthen for the second consecutive session, with the USD/JPY pair nearing the 160.00 level, a point that previously triggered substantial yen-buying interventions by Japanese authorities. Japan's Corporate Service Price Index showed a slight deceleration in growth, increasing by 2.5% in May compared to 2.7% in April. Investors are now focusing on additional domestic economic reports, including retail sales and unemployment data for May, as well as Tokyo's inflation figures for June.
Gold prices saw a decrease on Tuesday, while the market's attention is fixed on the forthcoming key US inflation data, which could clarify the Federal Reserve's position on interest rate adjustments. Oil prices remained stable after a 1% increase in the previous session, driven by expectations of stronger demand during the summer and ongoing geopolitical tensions in Eastern Europe and the Middle East. However, gains were limited due to cautious investor sentiment ahead of the PCE data release and concerns over the demand outlook in China. Additionally, ongoing conflicts, such as Ukrainian missile strikes on Russian oil infrastructure and the escalating conflict between Israel and Hezbollah, continue to support oil prices.

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[Zforex]

EUR/USD Analysis Provided by zForex - 06.25.2024​

EUR/USD Reversal Validates with Potential Breakout Above 1.0730​

EUR/USD: The pair's reversal pattern has been confirmed, with the price reaching the 1.0730 resistance area. A potential breakout above this level could propel the price toward the next target at 1.0780.

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Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0780	1.0750	1.0730	1.0680	1.0665	1.0610

 

[Zforex]

Gold Analysis Provided by zForex - 06.25.2024​

Gold Exhibits Head and Shoulders Pattern, Signaling Potential Reversal​

The price of gold is displaying a head and shoulders pattern on its daily chart, suggesting a potential reversal. However, further confirmation from fundamental analysis is necessary. In the short term, the price is exhibiting uncertain movements, with the next support at the 2332 level. If the price falls below this, the subsequent support is at 2320.

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Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
2395	2375	2362	2346	2332	2320

 

[Zforex]

Daily Analysis Provided by zForex - 06.26.2024​

Inflation Surges, Rate Hikes, and Political Pressures Shake Up Forex Markets​

In May, Australian inflation surged to a six-month high, leading traders to consider the possibility of a rate hike, which subsequently boosted the Australian dollar. The probability of an increase by September is now seen as just over 50% by short-term interest rate markets.
In the United States, expectations are mounting that upcoming data will show a deceleration in the annual growth of the Federal Reserve's preferred core personal consumption expenditure (PCE) index to 2.6% in May, marking the lowest rate in more than three years. This slowdown could potentially open the door to future rate cuts. However, Fed Governors Lisa Cook and Michelle Bowman have indicated a cautious approach, underscoring that policy decisions will remain data-dependent.
Japan's Vice Finance Minister Masato Kanda reaffirmed the government's readiness to act should excessive fluctuations in the yen adversely affect the national economy. Despite these statements, the impact on the yen was minimal, largely due to the Bank of Japan's reluctance to outline a plan for reducing bond purchases, a stark contrast to the Federal Reserve's hawkish stance. This suggests that the USD/JPY pair might continue to rise.
The euro is currently facing pressure ahead of the first round of the French legislative elections, where the far-right National Rally party is expected to make significant gains. This political uncertainty is affecting the stability of the euro.
Meanwhile, recent hawkish comments from influential Federal Reserve officials suggest that the US central bank is not likely to begin reducing interest rates soon, given the ongoing resilience of the US economy. This has led to a modest increase in US Treasury bond yields, which supports the US dollar and puts downward pressure on gold, which does not yield interest. Despite this, the possibility of a rate cut in September remains, influenced by weaker consumer and producer prices in May. Geopolitical tensions in the Middle East and the ongoing conflict between Russia and Ukraine also support the price of gold as a safe-haven asset. US final first-quarter GDP figures are expected on Thursday, and the PCE Price Index on Friday.
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[Zforex]

EUR/USD Analysis Provided by zForex - 06.26.2024​

EURUSD Tests Support, Eyes Further Dip to 1.0665​

The EURUSD pair has returned to a price range after hitting the resistance area at 1.0730 and is now near the support level of around 1.0680. If it breaks below this level, the price may move towards the next target at 1.0665.

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Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0780	1.0750	1.0730	1.0680	1.0665	1.0610

 

[Zforex]

Gold Analysis Provided by zForex - 06.26.2024​

Gold Awaits Confirmation for Potential Reversal​

The price of gold is displaying a head and shoulders pattern on its daily chart, suggesting a potential reversal. However, further confirmation from fundamental analysis is necessary. In the short term, the price is exhibiting uncertain movements, with the next support at the 2332 level. If the price falls below this, the subsequent support is at 2320.

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Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
2395	2375	2362	2346	2332	2320