XAU/USD: Strong Buy – Focus Currency and Technical Analysis (1-Hour Chart) October 22, 2024
EUR/USD: Buy
The EUR/USD is slightly rising, recovering from a significant decline the previous day. With few major economic indicators released at the start of the week, investors are discussing the possibility of further monetary easing by the Federal Reserve (Fed) and the European Central Bank (ECB). Last week, the ECB lowered rates by 0.25%, but did not indicate that this would mark the beginning of continuous rate cuts. The market is anticipating an 85% probability of a 0.25% rate cut at the November Fed meeting. Meanwhile, Germany’s Producer Price Index (PPI) for September came in below expectations, reinforcing the view that authorities will maintain a “dovish” stance. Today, attention is on remarks from ECB President Lagarde and Fed President Harker, as well as the release of the Richmond Fed Manufacturing Index.
GBP/USD: Sell
The GBP/USD is rising, recovering from the previous day’s decline. It is again testing the significant level of 1.3000, displaying unstable movements in the very short term. The pound is supported by last week’s UK economic data. September retail sales increased by 3.9% year-on-year, exceeding expectations of 3.2%. On a monthly basis, there was a 0.3% increase, better than the forecast of -0.3%. Meanwhile, in the U.S., both building permits and housing starts for September decreased. Business activity data for the UK will be released this Thursday, with slight adjustments expected in the manufacturing and services PMIs.
NZD/USD: Sell
The NZD/USD has actively risen after the previous day’s decline, recovering from its lowest level since August 16. New Zealand’s trade data for September showed an increase in exports and a decrease in imports, leading to a reduction in the trade deficit. Previously, the NZ dollar faced temporary pressure following the People’s Bank of China’s unexpectedly large rate cut, raising concerns about the outlook for the Chinese economy and government measures. On the other hand, U.S. retail sales increased by 0.4% in September, exceeding expectations.
USD/JPY: Sell
The USD/JPY is showing unstable movements around 150.90, close to the highs seen since July 31. Market activity is subdued as investors await remarks from Fed officials. Analysts are confident that a 0.25% rate cut will occur in November, but the outlook for December’s meeting could change depending on the outcome of the U.S. presidential election. If Trump wins, the Fed’s monetary policy may tighten, and trade tensions could escalate. In Japan, the nationwide Consumer Price Index (CPI) for September slowed to 2.5%, with the core CPI also declining to 2.1%. In the U.S., both building permits and housing starts for September decreased.
XAU/USD: Strong Buy
Gold prices are moderately rising, continuing a short-term upward trend. The price is currently testing the 2735.00 level, close to the previous day’s highs. Geopolitical tensions in the Middle East and Eastern Europe are supporting prices. Additionally, attention is focused on the U.S. presidential election on November 5, where significant policy changes are anticipated if Trump wins. Investors are expecting further monetary easing from major central banks, including the Fed. According to the CME Group’s FedWatch tool, there is about an 85% probability of a 0.25% rate cut in November. Last week, the ECB also lowered rates by 0.25%, but did not provide a specific outlook for future monetary policy. U.S. retail sales increased by 0.4% in September, providing some support for the dollar.
