Today's analysis: USD/JPY Eases Below 157.50 Amid Yen Gains and Treasury Yield Impact

Product: XAU/USD

Prediction: Increase

Fundamental Analysis: 

The gold price has experienced a three-day losing streak, falling to around $2,410 per ounce. This is due to a combination of factors, including a modest weakening of the US dollar and speculation around the upcoming US presidential election. The potential for a “Trump trade” resurgence and a Republican victory has boosted the US dollar and yields on Treasury bonds, making gold a less attractive investment. Additionally, the expectation of a Federal Reserve rate hike in September has further undermined the appeal of the non-yielding gold asset. Overall, the gold price is facing selling pressure from these various market developments.

Technical Analysis: 

The gold price has continued its downward slide, falling to around $2,410 in Friday's European trading session. This comes after the precious metal failed to sustain above the crucial $2,450 level. Despite the recent decline, the near-term outlook for gold remains firm, as the short to long-term exponential moving averages are still sloping upwards. The rising trendline from the February 14th low of $1,984.30 is expected to provide major support for the gold bulls. While the 14-day Relative Strength Index has dropped to 58, indicating a loss of upside momentum, the overall upward bias for gold appears to remain intact.  

Product:EUR/USD

Prediction: Increase

Fundamental Analysis: 

The EUR/USD pair has defended its gains below the 1.0900 level during the Asian trading session on Monday. This is despite a general risk-averse sentiment, as the US dollar has weakened. The focus now remains on updates from the US political landscape as well as medium-level economic data from the EU and US for any fresh trading impulse.

The US dollar regained some momentum on Thursday, lifting the US Dollar Index back above the 104.00 mark, supported by a bounce in US yields. This came after the EUR/USD pair had set aside two consecutive sessions of gains, following a dovish stance from the ECB and a marginal uptick in German 10-year bund yields.

Technical Analysis: 

The EUR/USD pair is expected to face its next upward resistance at 1.0948, followed by the March high of 1.0981 and the psychological 1.1000 level. If the bears retake control, the pair may target the 200-day SMA of 1.0810 before sliding to the June low of 1.0666 and the May low of 1.0649, potentially reaching the 2024 bottom of 1.0601.

Looking at the larger picture, further gains appear likely if the important 200-day SMA is convincingly surpassed. In the near term, the 4-hour chart shows some loss of upside momentum, with the initial resistance at 1.0948, 1.0981, and 1.1000, and support at the 55-SMA of 1.0872, the 200-SMA of 1.0793, and 1.0709. The relative strength index has dropped to around 47.

Product: USD/JPY

Prediction: Increase

Fundamental Analysis: 

The USD/JPY pair is easing below 157.50 in Asian trading on Friday, with the Japanese Yen gaining ground on warnings from the authorities. However, broad US Dollar strength and higher US Treasury bond yields are keeping the pair afloat ahead of Fedspeak.

The Japanese Yen had recently strengthened against the US Dollar after suspected intervention by Japanese authorities, driving the USD/JPY pair to a one-month low. Traders remain alert to the possibility of further interventions, with officials warning they will respond to “excessive” currency market moves.

The US Dollar is receiving support from a slight improvement in US Treasury yields, but its upside may be limited due to the high likelihood of a rate cut by the Federal Reserve in September.

Technical Analysis: 

The USD/JPY pair is trading around 156.30 on Thursday, with the daily chart analysis showing the pair below its 9-day Exponential Moving Average (EMA), suggesting downward momentum in the short term. The 14-day Relative Strength Index (RSI) is also below the 50 level, confirming a bearish bias. Key support for the pair is around June's low at 154.55, and a break below this level could lead to further declines towards May's low at 151.86.

On the upside, immediate resistance is observed around the 9-day EMA at 158.27. A breakthrough above this level could potentially push the USD/JPY pair to revisit the pullback resistance around the psychological level of 162.00.

Product:GBP/USD

Prediction: Increase

Fundamental Analysis: 

The GBP/USD pair continues to decline towards 1.2900 in the American session on Friday, weighed down by disappointing UK Retail Sales data and a recovery in the US Dollar (USD) amid a souring market mood.

After closing negatively on Thursday, the pair remains under bearish pressure as the USD benefits from the risk-averse sentiment, with Wall Street's main indexes turning south. The UK's weaker-than-expected Retail Sales data for June further weighs on the Pound Sterling.

Ahead of the weekend, the economic calendar lacks high-impact data releases, suggesting that the risk perception will likely continue to drive the GBP/USD's movement. Investors will also monitor comments from Federal Reserve officials before the Fed's blackout period begins.

Technical Analysis: 

The GBP/USD pair has dropped below the lower limit of the ascending regression channel it has been in since early July. Additionally, the Relative Strength Index (RSI) indicator on the 4-hour chart has fallen below 40, suggesting a buildup of bearish pressure.

On the downside, the immediate support for the pair is at 1.2900, followed by 1.2875 and 1.2820-1.2830, which is the 100-period Simple Moving Average on the 4-hour chart and the Fibonacci 50% retracement.

On the upside, the first resistance is at 1.2930, the 50-period SMA, followed by 1.2960, the lower limit of the ascending channel, and the psychological level of 1.3000.

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