XAU/USD: Strong Buy – Focus Currency and Technical Analysis (1-Hour Chart) October 21, 2024
EUR/USD: Sell
The EUR/USD is showing mixed movements around 1.0860. The market is concerned about potential changes in U.S. monetary policy if Donald Trump wins the upcoming presidential election in November. The market is factoring in persistently high borrowing costs and a new “trade war,” with the European Central Bank (ECB) possibly taking additional actions. Last week, the ECB lowered rates by 25 basis points to 3.40%, indicating issues with the pace of economic growth in the Eurozone. Meanwhile, U.S. retail sales for September increased by 0.4%, surpassing expectations.
GBP/USD: Sell
The GBP/USD is trading sideways around 1.3040, maintaining the upward momentum from last weekend while awaiting new developments. September retail sales in the UK increased by 3.9% year-on-year, exceeding expectations. However, the Rightmove House Price Index showed only a 1.0% year-on-year increase in October, contributing to further easing of inflation risks. Tomorrow, an official from the Bank of England is scheduled to speak, potentially supporting further rate cuts.
AUD/USD: Strong Sell
The AUD/USD is showing mixed movements around 0.6700. Concerns about the pace of economic growth in China have increased following the People’s Bank of China’s 25 basis point rate cut. On the other hand, Australia’s employment data for September showed a significant increase of 64,100 jobs, greatly exceeding expectations and supporting the AUD.
USD/JPY: Buy
The USD/JPY is showing a slight decline, trading around 149.20. Traders are awaiting new information, focusing on tomorrow’s Richmond Fed Manufacturing Index release and remarks from Fed President Harker. The market is pricing in an 85%+ probability of a 25 basis point rate cut at the November Fed meeting. Additionally, Japan’s Tokyo CPI data will be released on Friday, which could increase pressure for further monetary tightening.
XAU/USD: Strong Buy
Gold prices are stabilizing around 2725.00. Uncertainty surrounding the results of the November U.S. presidential election is increasing demand for gold. If Donald Trump wins, expectations include stronger tariff policies and a slowdown in the pace of rate cuts. Meanwhile, the probability of a 25 basis point rate cut by the Fed in November is also over 85%. Last week, U.S. retail sales for September increased by 0.4%, exceeding expectations.
