Weekly Forex Forecast XAUUSD
Gold’s value, represented by XAU/USD, saw a decline last week, with a small increase on Friday due to disappointing labor market data in the United States. Since late July, both Gold and the U.S. dollar and real rates have been on a downward trend, which has had a negative impact on precious metals. Despite this, it’s important to keep monitoring the market to make informed decisions.
According to the most recent update regarding US non-farm payrolls data, there has been a slight deviation from the previously anticipated figures. As a result, both Treasury yields and the value of the US Dollar have experienced a decline. However, it is important to note that there is still a possibility that the US Dollar may bounce back in the near future. Further analysis and monitoring of the market trends will be necessary to determine the future trajectory of the USD.
Upcoming US inflation reports to monitor this week – CPI & Initial Jobless Claims Reports
Gold (XAUUSD) Technical Analysis
Using the 1-day timeframe, it is imperative to note that the price of gold rebounded slightly from a significant level last Friday, yet it failed to hit its 50-day moving average of $1,945. It is crucial to keep a keen eye on this level as it now acts as a primary barrier. This area also serves as the previously broken support, which has the potential of becoming a resistance. Failure to surpass this level may result in the bears taking control of the market, causing a retest of support between $1,930 to $1925. Furthermore, in case the market weakens further, there is a possibility of prices reaching the next major support between 1906 and 1896.
However, if XAU/USD manages to break through its 50-day SMA, it could create bullish momentum, leading to an attack on the $1954 area and then $1972. Therefore, it is crucial to closely monitor these trends.
Weekly Forex Forecast USDJPY
Last week, the Bank of Japan (BoJ) made an unexpected adjustment to its Yield Curve Control (YCC) policy, despite previously indicating that no changes were planned. This mixed messaging and lack of clarity may cause market participants to remain vigilant for any potential FX intervention if the Yen continues to depreciate.
On August 4, 2023, the Bank of Japan intervened by purchasing Government Bonds as the USD/JPY approached the significant 145.00 mark and the 10-year yield reached 0.655%. As a result of this action, it is unlikely that there will be a significant increase in USD/JPY beyond recent highs, as JPY bulls are expected to defend these levels.
As we enter the upcoming week, there are fewer high-risk events compared to the previous three weeks. However, there are several medium-impact events to keep an eye on in Japan, including the BoJ summary of opinions and the Eco Watchers Survey. Market participants are particularly interested in the BoJ’s opinion and discussions regarding the recent YCC policy adjustment, as well as any potential changes to the policy direction in the future.
Upcoming YEN, US, and GBP reports to monitor this week
USDJPY Technical Analysis
The weekly candle for USD/JPY will undoubtedly end up as an inverted hammer candle, located below the resistance area near the 142.00 handle. The lengthy wick on the upper side is a clear indication that there is an immense amount of selling pressure at play, particularly as USDJPY approaches the psychological 145.00 area.
If we look at the daily timeframe, the trend appears to be bullish. However, we need to ensure that there is no daily candle close below the 139.37 mark (which was the swing low on July 28th) to confirm the trend. At the moment, the 50-day MA is providing support at a level of 141.28. If the price breaks below this level, it could lead to a retest of the key July 28th swing low at 139.37.
As previously mentioned, sellers are currently protecting the 145.00 level. Any attempt to reach this level is met with strong selling pressure, which is likely due to the FX intervention cloud that is affecting all Yen pairs. If USDJPY surpasses the 145.00 mark, it is expected that significant gains will be limited.
Weekly Forex Forecast AUDUSD
Last week, the Australian Dollar fluctuated initially but later dropped to its lowest point in two months due to the decline in risk assets following Fitch’s decision to downgrade US sovereign debt.
On Tuesday, the US was downgraded by the credit rating agency from AAA to AA+ for the first time in nearly 30 years.
Due to the resulting chaos, the AUD/USD plunged to a 2-month low of approximately 65 cents before stabilizing prior to the weekend.
Last week, some of Australia’s significant exports, including iron ore, copper, and wheat, faced challenges but managed to recover towards the end.
The RBA issued its Statement on Monetary Policy last Friday. Its main purpose was to reiterate the previous statement made by Governor Philip Lowe after the Monetary Policy decision earlier in the week, particularly for the markets.
During the recent meeting, the RBA decided to maintain the interest rates at 4.10%, which marks the second consecutive month with no changes. It seems that the interest rate market doesn’t expect any further increases during this cycle of tightening.
Upcoming AUD, US, and GBP reports to monitor this week
AUDUSD Technical Analysis
Recently, AUD/USD experienced a significant drop, resulting in a double top candle pattern. This fall led to the breaking of both the 50 Moving Average and 200 Moving Average last week. Although AUD/USD briefly broke the trend, it recovered back into the current bullish trend line.
However, the price still remains below the daily moving averages, which suggests that there may be more bearish momentum in the future. If the bullish trend line is broken, AUD/USD may fall to the next support area, which is around 0.62606 and 0.61793.
On the other hand, if the upward trend continues above the daily moving averages, AUD/USD may retest 0.69035 and 0.68817, leading to a bullish continuation towards 0.71595 and 0.71158.
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