Market Analysis
GOLD
GOLD prices fell to a low but rebounded towards the end of yesterday’s trading session. As of now, prices are continuing to report gains. In contrast, the U.S. economy is showing signs of a slowdown, with multiple data points suggesting contraction in the labor market. The MACD and RSI both indicate increasing bearish momentum, with the RSI approaching oversold territory. Meanwhile, the 200-day EMA is sloping downward, reinforcing the bearish bias. Given these factors, there is a strong probability that gold may resume its downtrend in the coming days.
SILVER
SILVER prices are currently reaching new lows, confirming a full transition to bearish price action. This shift is supported by consecutive bearish gains on the MACD and an RSI reading that indicates overbought conditions in the context of a downtrend—suggesting continued selling momentum. Prices are likely to be rejected at the 200-day EMA, which reinforces the case for further downside.
DXY (U.S. Dollar Index)
USD (U.S. Dollar) is showing strength, yet fundamental data continues to highlight weaknesses in the U.S. economy:
- JOLTS job openings dropped to 7.19M (vs. 7.49M expected)
- ADP Non-Farm Employment fell to 62K from last month’s 147K
- Advance GDP showed a decline of -0.3%
- Core PCE Price Index remained flat at 0%
- Unemployment claims rose to 241K (vs. 224K expected)
- Employment Cost Index was unchanged
- Manufacturing PMI grew to 48.7 (still below last month’s 49)
- Construction spending declined
- Vehicle sales rose above expectations but remained below last month’s figure
These indicators collectively paint a picture of a slowing economy. While the dollar maintains short-term strength, this data significantly raises the odds of an upcoming Fed rate cut. All eyes will be on Friday’s NFP report, which could heavily influence future Fed policy and the dollar’s direction. Depending on the outcome, we could see a continuation of the bullish trend or a reversal.
GBP/USD
GBP/USD (The Pound) has turned decisively bearish, with price action breaching the 200-day EMA and breaking below prior support. The MACD reflects steady bearish strength, and the RSI also signals growing downside momentum. While prices may revisit the EMA200 for a short-term retest, the broader expectation is for continued selling pressure.
AUD/USD
AUD/USD (The Aussie Dollar) remains in a consolidation phase, awaiting clearer developments on both economic data and trade relations between the U.S. and China. Current price action respects the broader bullish structure, and the Aussie stands to benefit from improved trade sentiment. Until a clear breakout from the consolidation zone occurs, we maintain a neutral stance on direction.
NZD/USD
NZD/USD (The Kiwi) has been in a bearish trend, but is currently holding above the 200-day EMA and the key support level at 0.58984. A decisive break in either direction is needed before committing to a trade bias. That said, bearish setups remain favorable unless support levels are convincingly held.
EUR/USD
EUR/USD (The Euro) is seeing increased bearish momentum, confirmed by volume and movement in both MACD and RSI. A clean break below the lower boundary of the current consolidation zone would likely open the door for further downside. This remains a strong possibility under current conditions.
USD/JPY
USD/JPY (The Yen) is cooling off as the dollar finds renewed strength. Despite growing expectations that the Bank of Japan may raise rates, market sentiment is currently favoring the dollar, buoyed by easing trade tensions across Asia. This regional optimism adds further support to the greenback’s momentum.
USD/CHF
USD/CHF (The Franc) is weakening, though price action remains choppy as it edges higher. The key resistance at 0.833313 continues to cap upward movement. Should price fail to break above this level, a phase of consolidation may persist. That said, the broader bias remains bullish as long as prices stay above key moving averages.
USD/CAD
USD/CAD (The Loonie) remains range-bound, showing signs of consolidation. Technicals suggest a lack of directional clarity at this stage. We advise holding off on any directional bias until a clean breakout materializes.
COT Reports Analysis
- AUD – WEAK (5/5)
- GBP – STRONG (5/5)
- CAD – STRONG (1/5)
- EUR – WEAK (1/5)
- JPY – STRONG (5/5)
- CHF – WEAK (2/5)
- USD – MIXED
- NZD – STRONG (1/5)
- GOLD – STRONG (2/5)
- SILVER – STRONG (3/5)
Final Thoughts
The market continues to show mixed signals as both commodities and currencies experience fluctuations. Gold and silver are facing bearish pressure, while the U.S. Dollar remains strong despite signs of a slowing economy. Currency pairs like GBP/USD and EUR/USD are also showing downside momentum, while others like AUD/USD and USD/JPY are in a more neutral consolidation phase.
As we move into the week, it is crucial to monitor the upcoming economic reports, especially the NFP data, which could significantly influence market direction. Traders should stay agile, as the current data can easily shift the momentum in the forex market.
