EUR/USD (Euro/US Dollar) – Strong Buy EUR/USD is attempting to reach 1.0800 following a sharp decline the previous day. Investors are awaiting the release of the US July labor market report. The forecast suggests a decrease in non-farm payrolls from 206,000 to 175,000, with average hourly earnings expected to fall from 3.9% year-over-year to 3.7%. In the Eurozone, the consumer price index (CPI) has risen from 2.5% to 2.6% year-over-year, with the core CPI reaching 2.9%. This has tempered expectations for an ECB rate cut but raised concerns about the timing of achieving the inflation target.
GBP/USD (British Pound/US Dollar) – Strong Buy GBP/USD is attempting a breakdown at 1.2720 following the Bank of England’s decision to cut interest rates. The BOE has lowered the rate from 5.25% to 5.00% in response to significant weakening in inflation. Governor Andrew Bailey has stated that the BOE will proceed cautiously to avoid rapid rate cuts. Inflation is expected to accelerate from 2.0% to 2.75% in the next quarter.
AUD/USD (Australian Dollar/US Dollar) – Strong Buy AUD/USD is recovering from a sharp decline and is currently attempting a breakout at 0.6510. Australia’s producer price index (PPI) has risen by 4.8% year-over-year, with exports increasing by 1.7%. However, China’s Caixin manufacturing PMI for July has dropped from 51.8 points to 49.8 points, putting pressure on the pair. Attention is now on the US labor market’s final report on Friday.
USD/JPY (US Dollar/Yen) – Buy USD/JPY is stable around 149.15, nearing the March 15 low. The Bank of Japan has raised interest rates to 0.25% and plans to implement quantitative tightening. Meanwhile, the US Federal Reserve has held rates at 5.50% but hinted at a possible rate cut in the September meeting.
XAU/USD (Gold/US Dollar) – Sell Gold prices are developing a short-term bullish trend, attempting a breakout at 2460.00. Market participants are awaiting the final US labor market report. The forecast indicates a decrease in non-farm payrolls from 206,000 to 175,000, with average hourly earnings expected to fall from 3.9% year-over-year to 3.7%. The Bank of England has cut interest rates to 5.00% and adopted a dovish stance.
