Is the decrease in the value of gold permanent?

[Z Forex]

The age of yellow metal in history

More than 5000 years have passed since the discovery of yellow metal. Its use as money began in ancient Egypt around 3200 BC. Thus, it played a role in the Gold Age trade, with bullion drawn to equal lengths at the mints. Today, gold still retains its commercial value and is the first choice of people who want to protect their savings.

Gold has been used as a medium of exchange for centuries. When we reach the 20th century, the direct use of gold as money has stopped, and today gold, which is an investment tool, is bought and sold with money.

Gold has been, is, and will be the greatest investment of all time due to its value retention, thousands of years of history, rarity, and other reasons. Gold is often seen as a safe haven investment and store of value.

Factors that affect the price of gold?

The most important factors that affect the price of yellow metal are the production factors. When gold miners produce more gold than the demand, the price will experience downward pressure due to the laws of the economy. Also, with the decrease in demand for gold production, the price of the yellow metal will rise. On the other hand, speculators, by interfering in the market, gold can create temporary imbalances that lead to rapid price changes.

Most of the time, buying gold is a defensive measure against inflation rate, currency depreciation, etc. Unlike many other goods, they are not consumed in most cases. Less than 10 percent of the gold is used for industrial purposes, and the rest is stored and sold later, either as bullion, coins, or jewelry.

Yellow metal rate changes

The most significant decline in gold prices in the past decade occurred between October 2012 and July 2013, nine months during which the metal lost more than a quarter of its value. The price continued in December 2015 before returning to a low of $1,054 per ounce. By October 2022, the price per ounce is $1,670.

Given that the total supply of gold is more or less constant. Basically, the classical theory that increasing and decreasing the supply of gold can affect the price is rejected. Therefore, speculators can make the most important impact. Investors estimate what governments and central banks are going to do and buy and sell it.

When the Federal Reserve announced in 2014 that it was ending its controversial stimulus program after the 2008 financial crisis, gold reached 1,053 by December 2015. While the second wave of concerns about the epidemic of the new type of corona virus (Covid-19) and the tension between the United States and China reached the highest rate of 2064 in August 2020. After that, it reached 2050 in March 2022 and experienced above 2000 dollars again. But with the start of the contractionary policies of most of the world's central banks to maintain the value of the currency, it has temporarily lost its attractiveness and has reached the rate of 1616.

It is impossible to reduce the value of gold forever.

Gold has fallen by more than 20% in the last few months. The strengthening of the US dollar has contributed to the downward movement of this commodity. The main reason for most analysts is the lack of a long-term upward outlook for gold and the increase in bond yields and the US dollar. In August 2022, the dollar index reached the highest level of 114.047 in 20 years and bond yields are increasing.

As the International Monetary Fund has predicted inflation in the United States to be 5.4% this year, 2% in 2023, 1.8% in 2024, 1.8% in 2025, and 1.9% in 2026, there is a possibility of curbing inflation and it is possible in the year In 2023, with the curbing of inflation and the reduction of bold American policies, the rate of the yellow metal will find an inverse state and will probably increase.

 

[Z Forex]

US2Y10 inversion increases, ECB will discuss balance sheet reduction in December meeting.

The market seem silence today. The Dollar Index is trading around 106.40 level. Yesterday, the U.S. October retail sales came in stronger than expected at %1.30 MoM vs previously at %0.00. The data pointed to resilient consumer spending, Thus, FED’s inflation fight takes some time so the released data keep the FED on the tightening trajectory more longer.

In addition, US 10Y yield continue to decrease and was last seen at %3.71 while US 2Y is hovering around %4.37. In other words, US2Y10Y inversion deepens to -66bps. Also, Kansas FED President Esther told the Wall Street Journal that he has not his 40 years with the FED seen a time of this kind of tightening that we didn’t get some painful outcomes. On the other hand, ECB Vice President Luis de Guindos said, “we will discuss about the reduction of our balance sheet,” at December meeting.

Furthermore, UK inflation came %11.10 YoY in October. It is the highest level since 1981 based on modelled data. Core CPI was unchanged at %6.5 YoY.

Today, Eurozone CPI will be followed closely. Also, FED Jefferson will speak.

EURUSD

The EURUSD is trying to push up 200DMA level, 1.0420, but the close came below that level. Also, the pair feel relieved after it became clear that the Russian missiles crossed into Polish territory because of Ukrainian air defense missile and that there is no indication of an intentional Russian attack

Technically, the momentum is mixed today due to the fact that DXY continue to firm at 106.40 level after US Oct retail sales came in stronger than expected. For the first resistance, 1.0425/35 region, around 200DMA, should be followed. Further bullish extension is likely to be slower since the risk sentiment is mixed in terms of geopolitical issues. Also, the daily RSI is near the overbought condition. Any pullback could meet support at 1.0280. The next support is seen at 1.0205. We look for consolidation between 1.0150 – 1.0590.

Support: 1.0280 – 1.0205– 1.0150

Resistance: 1.0430 – 1.0480 – 1.0590

GBPUSD

The pound touched a high of 1.2028 level but was limited its rising. Pound traders are waiting for the FED’s interest rate policy to take shape. Andrew Bailey from BOE explained that more rate hikes needed, but Rishi Sunak appears to be less supportive of this policy. The eyes focus on the upcoming medium-term fiscal plan from Chancellor Hunt on 17th November. Decisions on welfare, pension payments are also closely watched amongst others. In short, fiscal tightening may give way to weaken the pound.

On the daily chart of the sterling, above 1.1790 level the momentum will be positive. On the upside, the resistance at 1.2030, then at 1.2240. Yet, the daily stochastics is overbought conditions On the downside, the key support is still at 1.1790. If that level breaks down, the next support will be at 1.1710.

Support: 1.1790 – 1.1710 – 1.1615

Resistance: 1.1845 – 1.2030– 1.2240

XAUUSD

The yellow metal is decreasing today and was last seen around 1764 level. After the US retail came stronger and geopolitical tension decreased, gold price dropped and touched 1761 level. In addition, FED’s official continue to speak hawkish, but US Treasury yield softened. Today, US 10-year treasury yield is hovering around to %3.71 level while US 2-year treasury yield was last seen at %4.37. Additionally, the real yield for US10-year was last seen 120 bps.

Technically, below 1765 level, the sentiment for gold price is negative. Support is seen at 1753 level. More downside, the support is at 1745 level. On the upside, the resistance is at 1786 level. On the additional upwards, 1802 is seen as crucial resistance level.

Support: 1753– 1745 – 1734

Resistance: 1786 – 1802 – 1845

UKOIL

Brent price is hovering around 92.20 level. Yesterday, Poland was hit by a missile believed to be from Russian missiles. But NATO, led by Biden, said there was no sign that it belonged to Russia. The rise of black metal was limited by the reducing of war concerns after allegations that missiles could be launched from the Ukrainian air defense system came to the fore. NATO's statements related to Poland will be followed closely. Also, black metal demand concerns remain. China Covid cases are increasing day by day. The tighter supply outlook is intensifying as OPEC cuts production and the European Union decides to ban Russian crude oil flows from December. Black metal can find its direction thanks to new developments in these issues.

Technically, the momentum is negative for the black metal below 94.10 (21DMA). On the downside, 91.55 is seen as support level. If broken, the next level will be at 90.40. The main resistance is at 92.50 level. More upside, 94.10 will be seen the next resistance.

Support: 91.55 – 90.40 – 89.30

Resistance: 92.50 – 94.10 – 96.95

 

[Z Forex]

New Zealand increases the interest rate 75bps and DXY softens ahead of the FED minutes.

The Dollar Index softens and was last seen around 107.05 level. Still, risk off mood seems in the market because of rising Covid-19 infections in China. Today, the Reserve Bank of New Zealand (RBNZ) raised its official cash rate (OCR) by 75bps from %3.50 to 4.25% during the November meeting, the highest level since January 2009, in line with market consensus. This was the biggest rate hike in the central bank's history, as it continues efforts to curb high inflation ahead of a three-month break. Furthermore, the US Federal Reserve’s November meeting minutes will be published. We believe that the minutes will determine the market directions clearly. The hawkish will give way the Dollar Index to become strong.

EURUSD

The EURUSD is hovering around 1.0325 level in this morning. We have more hawkish ECB officials comment nowadays that helps the parity. Also, European gas crisis go away temporarily for this winter because the pipeline through Ukraine stays open. In other words, shortage problem about the gas in Europe is solved for now. Furthermore, the investors seek confirmation of FED’s 50bps rate hike in December.

Technically, the momentum is positive because DXY softens today. For the first resistance, 1.0400 (200DMA) should be followed. Further bearish extension is likely to be slower since the daily stochastics is turning lower in oversold condition. Any pullback could meet support at 1.0220. The next support is seen at 1.0130. We look for consolidation between 1.00 – 1.05

Support: 1.0220 – 1.0130 – 1.0000

Resistance: 1.0400 – 1.0480 – 1.0560

GBPUSD

The pound was seen around 1.1890 level. Since the Covid cases are on the increase in China, the market runs risk-off mode. The sterling is under pressure after UK Finance Minister Jeremy Hunt announced the spending cuts and tax hikes worth £55 billion. 50 bps increasing is waited from BOE on December meeting. Pound traders are waiting whether BOE hawkish. Today, Fed's November meeting minutes to be released. DXY value will be significant determiner on Pound against Dollar.

On the daily chart of the pound, above 1.1780 level the momentum will be positive. On the upside, the resistance at 1.1960, then at 1.2030. Also, the daily stochastics is turning back from overbought conditions. On the downside, the key support is still at 1.1780. If that level breaks down, the next support will be at 1.1640 (100DMA).

Support: 1.1780 – 1.1640 – 1.1595

Resistance: 1.1960 – 1.2030 – 1.2200

XAUUSD

The yellow metal is trading around 1736 level. FED officials ‘said FED continue to increase the interest rate to fight inflation. Also, a 75bps rate hike by RBNZ weakens gold prices. Furthermore, focus will be on the minutes of November FED meeting tonight. If the minutes comes hawkish, the gold prices will face sell off. Today, US 10-year treasury yield is trading around to %3.76 level while US 2-year treasury yield was last seen at %4.51. Additionally, the real yield for US10-year was last seen 122 bps.

Technically, below 1728/32 region, the sentiment for gold price is negative. Support is seen at 1728/32 region. More downside, the support is at 1722 level. On the upside, the resistance is at 1749/53 region. On the additional upwards, 1767 is seen as crucial resistance level.

Support: 1728/32 – 1722 – 1711

Resistance: 1749/53 – 1767 – 1776

UKOIL

Brent prices hover around 88.30 level. After the WSJ report that OPEC could increasing output and denied by Saudis, Black metal was limited falling. Also, U.S crude stocks announced falling bigger than expected by American Petroleum Institute (API). Covid-19 cases of China, which put pressure on Brent prices, are still on the table. Today, investors are waiting for the Fed's November meeting minutes to be released. Also, black metal followers are looking forward to OPEC's meeting on December 4. OPEC will decide on the production cut at this meeting.

Technically, the momentum is negative for the black metal below 92.05 (50DMA). On the downside, 87.35 is seen as support level. If broken, the next level will be at 84.40 (100WMA). The main resistance is at 89.90 level. More upside, 92.05 will be seen the next resistance.

Support: 87.35 – 84.40 – 82.35

Resistance: 89.90 – 92.05 – 93.10

 

[Z Forex]

With the dovish effects of the Fed, the rise of currencies against the dollar continues. China faces record covid-19 cases.



The dollar index capped its decline after the Fed's meeting minutes were released. While some FED members think they will face higher interest rates, the majority of the committee agrees that rate hikes could slowdown. The CME FedWatch Tool is priced 50bps rate hike in December meeting with the probability of 76%.

China announced the highest number of Covid-19 cases as of yesterday. Major cities began to be closed as part of quarantine measures. This situation has started to raise the fear of covid in the world again. While the market was trying to get away from the fear of recession, these data from China caused the focus on the possibility of recession again.

In addition, interest policy continues to be discussed on the Eurozone side. Member of the ECB's Executive Board Isabel Schnabel noted that they would need to raise interest rates further, probably into restrictive territory. European Central Bank’s October policy meeting revealed on Thursday indicated that a few members also voted for 50bps interest rate hike.

Meanwhile, markets evaluated the impact of the G7's proposed price cap on Russian oil in the range of $65-70 per barrel, higher than current prices for Urals. Analysts suggested that a high cap may have minimal effect on markets as it would likely not disrupt Russian flows.

The market is quiet today due to Thanksgiving. Future retail sales and GDP data from New Zealand and Germany will follow. However, the eyes of the market will be mostly the number of covid-19 cases coming from China.

EURUSD

Euro continues to rise with the FED minutes showing the dovish stance of the FED. The pair was last seen at 1.0420 level. It is trying to stay above the 200-day average. Minutes of the October meeting, released yesterday, showed that committee members feared inflation would set in. Despite the increased probability of 50-bps at the December meeting, the market is surprisingly considering a 75-bps rate hike.

Technically, the momentum is positive because DXY softens below 106.00 level. For the first resistance, 1.0480 should be followed. Further bearish extension is likely to be slower since the daily stochastics is overbought condition. Any pullback could meet support at 1.0395 (200DMA). The next support is seen at 1.0350. We look for consolidation between 1.00 – 1.05

Support: 1.0395 – 1.0350 – 1.0295

Resistance: 1.0480 – 1.0560 – 1.0615

GBPUSD

The pound reversed the highest level in three months at 1.2155. It’s hovering 1.2105 today. The FED committee appears quite a few dovish after the minutes released yesterday. The DXY value is to be followed closely to determine if the pound will reach its critical value of 1.2500. The British pound finds support with the decline in government bonds. This situation can be interpreted as a good sign for BOE's rate hike.

On the daily chart of the pound, above 1.2185 (200-DMA) level the momentum will be positive. On the upside, the resistance at 1.2185, then at 1.2285. The daily RSI (14) touched overbought conditions, too. On the downside, the key support is still at 1.2055. If that level breaks down, the next support will be at 1.1910.

Support: 1.2055 – 1.2005 – 1.1910

Resistance: 1.2190 – 1.2285 – 1.2400

XAUUSD

The yellow metal is trading around 1755 level. FED officials agreed it would likely soon be appropriate to slow the pace of interest rate hikes. Also, a 50bps rate hike priced by the investors for December meeting with the probability of %76. After FED minutes, US 10-year treasury yield was last seen around at %3.66 level while US 2-year treasury yield was at %4.43. Additionally, the real yield for US10-year came down at 111 bps.

Technically, above 1728/32 region, the sentiment for gold price is positive. Support is seen at 1747 region. More downside, the support is at 1725 level. On the upside, the resistance is at 1769 region. On the additional upwards, 1777 is seen as crucial resistance level.

Support: 1747 – 1725 – 1700
Resistance: 1769 – 1777 – 1799

UKOIL

Brent prices hovering around 85.50 level. Yesterday, Covid-19 cases came record-high level in China. Demanding concerns rising on Black metal. Despite FED committee appears dovish about interest rate policy. Russian supply concerns and OPEC’s cut production meeting on December 4 also to be reason for limited rising. Black metal investors will be following closely to see if developments related to declining demand and supply cuts will support the Fed's dovish outlook.

Technically, the momentum is negative for the black metal below 84.25. On the downside, 83.10 is seen as support level. If broken, the next level will be at 82.35. The main resistance is at 86.15 level. More upside, 88.00 will be seen the next resistance.

Support: 84.25 – 83.10 – 82.35

Resistance: 86.15 – 88.00 – 89.10

 

[Z Forex]

The DXY is gaining power. RBA raised the interest rate 25bps to %3.10.

The Dollar Index keeps its recent advance to above 105.35 level today. The index was supported by renewed concerns that the FED will hike interest rates following better-than-expected US services activity data. On the other hand, the market is still expecting the FED to deliver a more moderate 50bps rate hike at its December meeting following four straight 75 basis point increases, though questions on how long the central bank will need to tighten remain.

Furthermore, the Reserve Bank of Australia (RBA) increased interest rates further by 25bps to %3.10 as widely expected. The Board said they continue to raise interest rate according to incoming data and the outlook for inflation and job market. Hence, the size and timing of future rate hikes is not clear.

BoJ Governor Haruhiko Kuroda told the parliament, “The BoJ is seeking to sustainably and stably achieve its 2% inflation target accompanied by wage growth. Their view is that this will likely take more time.”

Today, we will follow Germany factory orders and UK PMI construction in European session. Later in the day, US and Canada will release trade balance.

EURUSD

The DXY is increasing after bullish US Service data. Thus, the pair is slipping down and trading around 1.0485 today. Yesterday, the major currency pair rallied to the highest levels since 28th June before reversing from 1.0594. Still, risk-on mood remains firm, but hawkish FED expectations is again on the agenda. On the contrary, more hawkish ECB gives way to remain supportive.

Technically, below 1.0520 level, the momentum is negative. Support remains around 1.0430. Any pullback could meet support at 1.0360/50 region (200DMA). The daily RSI is trading parallel to overbought condition level. On the upside, 1.0595 should be followed. Further bullish extension is likely to be slower since the risk sentiment is still mixed today.

Support: 1.0480 – 1.0430 – 1.0360/50

Resistance: 1.0520 – 1.0595 – 1.0665

GBPUSD

Cable’s rising stopped due to stronger-than-expected US PMI data yesterday. DXY’s falling reversed and risk appetite lower level. The pound is hovering around 1.2175 level. In fact, although Macro data from the British side supports the GBP against the Dollar, the rise in DXY is suppressing the rise in the pound. Cable’s traders are waiting BOE’s decision at the meeting on December 15. It is expected hawkish
interest rate policy from BOE. Also, FED’s meeting will come true on December 14. So, these meeting will be decisive for cable’s direction.

On the daily chart of the pound, below 1.2395 (50-WMA) level the momentum will be negative. The weekly stochastic is very above overbought condition. On the downside, the key support is still at 1.2140 (200DMNA). If that level breaks down, the next support will be at 1.1930. On the upside, the resistance at 1.2345, then at 1.2395.

Support: 1.2140 – 1.1930 – 1.1770

Resistance: 1.2345 – 1.2395 – 1.2520

XAUUSD

The yellow metal’s rising reversed. It is trading around 1770 level. Stronger than expected US PMI data affected to stopped rising gold’s prices. Market concerns that US interest rates will reach higher-than-expected levels grew and DXY's decline stopped. FED’s meeting will come true on December 14. A 50bps rate hike priced by the investors for December meeting with the probability of %79. Today, US 10-year treasury yield was last seen around at %3.59 level while US 2-year treasury yield was at %4.40. Additionally, the real yield for US10-year is increasing 96 bps.

Technically, below 1758 (21DMA) level, the sentiment for gold price is negative. Support is seen at 1744 level. More downside, the support is at 1726 level. On the upside, the resistance is at 1782 level. On the additional upwards, 1793 is seen as crucial resistance level.

Support: 1755 – 1744 – 1726

Resistance: 1782 – 1793 – 1810

UKOIL

Yesterday, US ISM Services PMI data came stronger than expected and caused selling pressure on Brent prices. Due to stronger macro data in US, interest rate level expectations rose and DXY’s falling stopped. So Black metal that rising with optimism for China restrictions on Covid-19 policy started falling and is hovering 83.00 level. Covid-19 policy in China and Eurozone’s price cap against Russian oil will be followed closely. Besides, it is wonder that will reach which interest rate level in US. Uncertainties on demand and FED’s interest rate policy according to inflation level in US will be decisive on Black metal’s prices.

Technically, the momentum is negative for the black metal below 85.10 (100WMA). On the downside, 82.50 is seen as support level. If broken, the next level will be at 79.00. The main resistance is at 83.70 level. More upside, 85.70 will be seen the next resistance.

Support: 82.50 – 79.00 – 77.750

Resistance: 83.70 – 85.70 – 88.15

 

[Z Forex]

US Indices Futures, precious metals, oil, and major currencies start positive to the week as the effect of weakness of the Dollar Index (DXY).



Economic data concerning inflation and producer price index will be announced in China on Wednesday and in the United States on Thursday. The overall sentiment among investors is optimistic at the moment. The market views China's decision to allow quarantine-free travel as the end of their zero-Covid- policy. In addition, the fact that China is adding to its gold reserves is causing the price of gold to rise.

The Consumer Price Index (CPI) for December will be released on Thursday and is expected to impact predictions on whether the Federal Reserve will increase interest rates by 0.25% or 0.50% in the beginning of the following month. According to Bloomberg data, economists expect the CPI to have increased 6.6% from the previous year in December, a decrease from the 7.1% increase seen in November.

Asian stocks experienced a surge on Monday due to optimism about the global economy, fueled by expectations that the US will not significantly increase interest rates and by China's decision to lift border restrictions.

Japan's stock market, represented by the Nikkei index, is closed on Monday for a holiday. However, futures for the index were being traded at a level of 26,215, compared to the previous closing level of 25,973 on Friday.

This week marks the start of earnings season for major banks in the United States. There is concern among analysts that overall earnings will not show any year over year (YoY) growth.


Investors will also pay attention to Unemployment Rate from Euro Area today.


EURUSD



Following the release of data showing slower growth in average hourly wages in the US on Friday, the Dollar Index declined as investors anticipated an improvement in US inflation data. The positive response to quarantine-free travel in China also contributed to a day of trading with a positive risk appetite.

Technically, 1.0710 is the nearest resistance. 1.0735 level may be aimed if the upward movement continues. On the downside, the 1.0605 level is as seen support. If it breaks downward, the next support level is at 1.0540.


Support: 1.0650 – 1.0605 – 1.0540

Resistance: 1.0710 – 1.0735 – 1.0790

 

[Z Forex]

Asian Markets were relatively stagnant and the US dollar stabilized as investors awaited a speech by Jerome Powell, Chairman of the Federal Reserve, for further information on the direction of US interest rates and the overall state of the economy.



The Dollar index (DXY) softens with the expectation that the FED could slow the pace of tightening. Yet, the Officials said that at least a 25bps rate hike is on the table for the February meeting. Mainly, they believe that a rate hike is needed to fight inflation.

Raphael Bostic, President of the Atlanta Federal Reserve, stated on Monday that the US central bank should increase interest rates above 5% by the beginning of Q2 and then maintain those rates for an extended period of time. Bostic emphasized that he does not believe in pivoting on monetary policy and thinks that the current approach should be allowed to have an effect.



On the other hand, the end of the zero-covid policy in China led the market to behave risk-on mood. This reopening news increases the hopes for demand recovery in China. Oil prices increased by 1% on Monday as investors believed that the reopening of China's economy from COVID-related restrictions would increase oil demand. In addition, China announced the re-opening of sea and land crossings with Hong Kong, which were closed three years ago.



Today, US 10-year treasury yield is hovering at 3.54%. The 2-10-year yield spread remains unchanged at -70bps. However, the real rate tightens to 103bps.



Finally, the central banks' officials have a speech during the day. First, the Bank of Japan Kuroda will be followed by the investors closely. Then, FED Powell’s speech may guide monetary policy decisions for the next meeting.



Jerome Powell, Chairman of the Federal Reserve, is expected to provide further insight into the trajectory of US interest rates and economic growth during a speech at a bank symposium in Sweden later in the day.


EURUSD

The Euro has risen to $1.0750s in the second week of January, returning to its seven-month high due to a weaker dollar. The falling gas prices in Europe are contributing to positive sentiment about the euro, and the unemployment rate for November came in at 6.50%. However, it is important to keep an eye on issues such as inflation and the ongoing situation between Russia and Ukraine, as they can have an impact on decisions made by the European Central Bank.

Technically, The 1.1495 - 0.9535 Fibonacci 61.8% retracement level is an important technical level for a currency pair. If this level goes beyond, it could indicate a potential continuation of a current trend. In the case of the euro, if it exceeds this level, it could potentially move towards the 1.0910/15 region. However, it is also important to note other factors such as economic data and geopolitical events that could also influence the currency's movement. On the downside, the 1.0710 level is as seen support. If it breaks downward, the strong support level is at 1.0590.


Support: 1.0710 – 1.0660 – 1.0590

Resistance: 1.0790 – 1.0825 – 1.0910

GBPUSD

The Pound hold their gains today. In December, the job market in the UK cooled again, which alleviated concerns about rising inflation. Despite an increase in consumer spending in the UK, it was not enough to keep pace with inflation.

Technically, the Pound is above 1.2120 (21-DMA). It is trying to rise above the trend line by taking support from the bottom of the channel. If it stays above that, it will target resistance zone (1.2220-1.2280). Supports and resistances that will be followed are shown below.

Support: 1.2120 – 1.2090 – 1.1955

Resistance: 1.2195 – 1.2220 – 1.2280

USDJPY

The yen remained unchanged in the market as investors waited for further developments and signals from the central bank on how they plan to address the issue.

Technically, Japanese Yen looks rejected from 21-DMA levels (134.75-133.90), and it re-entered to descending channel. If it breaks the 21-day average, upward pressure may increase with the strengthening bullish momentum. On the upside, the resistance is at 134.20 level. For the additional upwards, 134.50/75 is seen as crucial resistance level. Support is seen at 131.35 region. More downside, the support is at 130.50 level.


Support: 131.35– 130.50 – 130.00

Resistance: 134.20 – 134.50 – 134.75

XAUUSD

Gold prices were steady on Tuesday as investors awaited Federal Reserve Chair Jerome Powell's speech to gauge the central bank's outlook on inflation and monetary policy. Some investors expect Powell to signal a less aggressive approach to interest rate hikes, which could be positive for gold, a non-yielding asset. On the other hand, a hawkish outlook from Powell could weigh on gold prices as it would increase the opportunity cost of holding the metal. While 10-year US Treasury yield is trading around 3.54%, 2-year US Treasury is unchanged. In other words, 2-10 year US Treasury spread widens -70bps.In addition, the real rate yield for 10-year is near 103bps.

Technically, the 1863/59 area is a crucial support, If it breaks, 1825 region will be important. If it holds, the uptrend may gradually continue to the 1910 level.


Support: 1863 – 1859 – 1825

Resistance: 1880 – 1889 – 1910

XAGUSD

Silver seems to have lost its bullish momentum for now. It was benefiting from a weaker US dollar and investor expectations of a less aggressive rate hike trajectory from the Federal Reserve in the coming year.

Technically, Silver tries to back in the ascending channel and it got rejected yesterday. On the upside, the resistance is at the 24.10 level. For the additional upwards, 24.45 is seen as a crucial resistance level. Support is seen at the 23.50 level. More downside, the support is at 22.80.


Support: 23.50 – 23.20 – 22.80

Resistance: 23.90 – 24.10 – 24.45

UKOIL

Brent crude futures fell 79.35 a barrel, while US West Texas Intermediate (WTI) crude futures were down 74.37 a barrel. Higher interest rates could make borrowing more expensive, potentially slowing economic activity and curbing demand for oil. Analysts have cautioned that China's increasing demand for oil may not have a significant impact on raising global oil prices due to the ongoing economic downturn.



Technically, Brent Oil is trading below both the 21-50-day moving averages and the trend resistance. The downtrend which is seen in red color works as a support. Breaking down this level will push the price to the 78 levels. On the downside, the support may follow at the 76.50 level. On the upside, the resistance is at 80.75, for more upside 81.75 levels should be watching.

Support: 79.15 – 78.00 – 76.50

Resistance: 80.75 – 81.75 – 84.00

 

[Z Forex]

US Indices, the Dollar Index (DXY), Asian markets, major currencies, and precious metals are stable after the US CPI report shows that inflation has risen by 6.5% in line with expectations.

The rate of inflation slowed again in December 2022, after the Federal Reserve raised interest rates to the highest level in 15 years. The Consumer Price Index (CPI) for December showed a 6.5% increase in prices compared to the previous year and a 0.1% decline compared to the previous month, according to government data released on Thursday. This is in line with the consensus estimates compiled by Bloomberg.

The core Consumer Price Index (CPI) figures, which exclude the volatile components of food and energy, have increased by 5.7% compared to the previous year, and 0.3% compared to the previous month.

On Friday, US stock futures remained stable as investors waited for earnings reports from large banks while considering the recent inflation report and its impact on monetary policy. The futures contracts related to the major indexes were all close to even. In the previous day's trading, the Dow30 and Nasdaq100 both rose by 0.64%, and the S&P500 increased by 0.34%. These gains came after the December inflation report revealed that the annual headline and core inflation rates in the US dropped to 6.5% and 5.7%, respectively, supporting the idea of further declining inflationary pressure and making the case for a less aggressive tightening from the Federal Reserve.

Investors will pay attention to the upcoming quarterly results from major bank stocks, including JPMorgan Chase, Wells Fargo, Citigroup, and Bank of America, and Gross Domestic Product (GDP) data from the UK which will be released on Friday.

Today, United States 10-year treasury yield dropped to 3.46%. The 2-10-year yield spread is at -70 bps. However, the real rate is tightening to 101 bps.


EURUSD

The Euro continued to march higher in January to trade at $1.0867, the highest level since April last year, and benefitting from a softer dollar, as investors expect the Fed to slow the pace of rate increases after the US CPI report pointed to another slowdown in inflationary pressures. In Europe meanwhile, preliminary estimates showed price pressures eased more than expected, with the annual inflation rate in the Eurozone hitting a four-month low.

Technically, the pair made an upward breakout yesterday with a strong positive bar. If it stays above 1.08 levels, it could move towards the 1.0910/15 region, which also coincides with the ceiling of the ascending channel. On the downside, the 1.0800 level is as seen support. If it breaks downward, the strong support level is at 1.0630 (21-DMA).


Support: 1.0800 – 1.0735 – 1.0630

Resistance: 1.0890 – 1.0910 – 1.0930

GBPUSD

The Pound is trading around 1.2185. Investors are awaiting important economic data (UK GDP) that is set to be released on Friday. The central bank of the UK is expected to raise interest rates again to 4% next month, following nine consecutive rate hikes, as indications are that headline inflation is starting to decrease. While the markets are not sure about the extent to which interest rates will continue to rise after next month's hike, many believe that the bank rate will reach its peak of around 4.5% by the middle of this year. Investors are closely watching monthly GDP figures, as well as industrial output and trade balance data.

Technically, the Pound is trading above major daily moving averages (21-50-100). If it stays above that level, it will target the resistance range (1.2250-1.2340). As long as it stays above the 21-day moving average, Sterlin may moves higher. On the downside, the 1.2100 level is seen as support, the next support level is at 1.2000 (50-DMA).

Support: 1.2100 – 1.2000 – 1.1950

Resistance: 1.2250 – 1.2340 – 1.2445

USDJPY

The Japanese yen increased past 130 per dollar, reaching its strongest levels in more than seven months after data showed that US inflation decreased further in December. The yen also appreciated due to increasing speculation about the Bank of Japan's potential move away from its ultra-easy monetary policy.

Technically, in the previous days, Yen has returned to the descending channel and the selling pressure may increase as long as it gets rejected from the 21-day moving average and does not exceed it. On the downside, 128.30 is seen as crucial support level (23.6% Fibonacci). More downside, the support is at 127.50 level. Resistance is seen at 130.50 region. More upside, next resistance is at 131.30 level.


Support: 128.30– 127.50 – 126.60

Resistance: 129.90 – 130.50 – 131.30

XAUUSD

Gold prices keep increasing. Gold, which saw 1900 levels yesterday it was likely to record its fourth consecutive weekly gain as the data showed that US inflation decreased further in December, increasing the chances that the Federal Reserve will slow the pace of interest rate hikes. The annual inflation rate in the US dropped for the sixth consecutive month to 6.5% in December, which was in line with market predictions.

Technically, yesterday was a very volatile day for the markets and gold. After it saw 1900 levels, it made a correction to the 1890 level. The Golden Cross is a technical indicator that appears in the market when the short-term moving average (50-day) of an asset surpasses the long-term moving average (200-day). This is seen as a bullish signal, indicating that the asset's price is likely to continue to rise. This should be watching. On the upside, the 1900 area is a crucial support, If it breaks, the uptrend may gradually continue to the 1915 level. On the downside, 1890 level is seen as a support.

Support: 1890 – 1881 – 1869

Resistance: 1900 – 1906 – 1915

XAGUSD

The price of silver is staying above $23.70 per ounce. This is consistent with the overall trend of bullion assets performing well, as anticipation of less strict monetary policy and concerns about potential supply disruptions increase. The US inflation data released yesterday was in line with expectations. When the Dollar Index is stable after the CPI report, precious metals are trying to gain strength.

Technically, Silver tries to back into the ascending channel and it looks got rejected yesterday. Today, it is near 23.60 (21-DMA). On the upside, the resistance is at the 24.10 level. For the additional upwards, 24.55 is seen as a crucial resistance level. Support is seen at the 23.60 (21-DMA) level. More downside, the support is at 22.80.


Support: 23.20 – 22.80 – 22.50

Resistance: 24.10 – 24.30 – 24.55

UKOIL

Today, Brent crude oil futures were stable at around $83.5 per barrel after three consecutive days of increases. It was likely to increase by about 6% this week, supported by an improving outlook for demand in China and expectations for less aggressive interest rate hikes from the US Federal Reserve.



Technically, Brent Oil achieved to move above 21-DMA (83.05). Now, It is targeting to channel resistance level (85.90) .The downtrend which is seen in red color works as a support. It is trying to get strengthens to move higher. Breaking down 21-DMA level will push the price to the 82.00 levels. On the downside, the support may follow at the 81.50 level. On the upside, the resistance is at 83.40, for more upside 85.90 levels should be watching.

Support: 82.00 – 81.50 – 80.50

Resistance: 83.40 – 85.00 – 85.90

 

[Z Forex]

Currently, US stock index futures, major currencies, and precious metals are slightly lower, Asian markets have also seen a decline, and the US dollar index (DXY) is continuing to decrease.

On Tuesday, many currencies in Asia experienced a decline due to concerns of a worldwide economic downturn in 2022. The Yuan was one of the weakest currencies as data revealed that the Chinese economy had been greatly affected by the COVID-19 lockdowns.

The Chinese economy saw a significant decrease in growth in 2022 compared to the previous year, primarily due to the effects of intermittent lockdowns to combat COVID-19. However, in the last quarter of 2022, the economy performed better than anticipated, with industrial production and retail sales in December surpassing expectations as the country started to move away from its strict anti-COVID strategy.

Early morning, the futures for the Dow Jones, S&P 500, and Nasdaq100 all experienced a slight decrease. With the start of the earnings season, investors have shifted their attention to corporate financial reports. Last week on Friday, attention was on banks as investors analyzed statements about the possibility of a recession. On Tuesday, Goldman Sachs and Morgan Stanley will announce their earnings before the market opens, and United Airlines will report after the market closes.

Today, United States 10-year treasury yield increased to 3.54%. The 2-10-year yield spread is at -73 bps. However, the real rate widens to 118 bps.

Investors will keep a keen eye on any announcements from the World Economic Forum's gathering in Davos as well as high importance economic reports being released by Germany and the UK, including figures for Consumer Price Index, Unemployment Rate , and German ZEW Economic Sentiment.

EURUSD

The Euro is trading at a higher level than it has in the past several months, and the US dollar has been weakening. The European Central Bank's chief economist, Philip Lane, stated in an interview with the Financial Times that the bank needs to continue to increase interest rates to a point that starts to curb economic growth, but it remains uncertain at what level the peak in the interest rate cycle will occur. German CPI data will be followed by investors today.

From a technical analysis point of view, the pair has made an upward breakout last week with a strong positive bar. If it stays above 1.0800 levels, it could move towards the 1.0910/15 region, which also coincides with the upper boundary of the ascending channel. On the downside, the 1.0800 level is considered as support. If it breaks downward, the strong support level is at 1.0675 (21-day moving average).


Support: 1.0800 – 1.0735 – 1.0675

Resistance: 1.0890 – 1.0910 – 1.0930

USDJPY

The Japanese Yen weakened today ahead of the Bank of Japan's monetary policy announcement tomorrow. The Nikkei 225 stock index rose as the central bank's decision seems to be uncertain after a perceived tightening at its December meeting.

From a technical analysis perspective, the Japanese yen is currently within a downward trending channel. The reversal movement which started from the resistance zone of the channel, is now heading towards the support zone. The region between 127.25 and 126.70 is considered as a support level that can be monitored. Resistance is seen at the 129.90 region. On the upside, the next resistance level is at 130.50.

Support: 127.25– 126.70 – 125.15

Resistance: 129.90 – 130.50 – 131.30

XAUUSD

On Tuesday, gold prices slightly decreased as the dollar strengthened, but expectations of a slower pace of interest rate increases by the Federal Reserve limited further decline.

In the previous analysis, it was stated that the increase in the price of gold was strong, but it was far from the moving averages and that the price was likely to approach the 8-day moving average and a correction may occur. Today, it can be observed that gold's price is decreasing on the chart. The 1890 region, which is the 8-day moving average level, can act as support. For gold, the levels of 1905 and 1890 are considered as support levels. If the price falls below 1905, a correction to the 1890 level may occur. The level of 1928, which is currently acting as resistance, if it is surpassed, could lead to the potential resistance levels of 1950.

Support: 1905 – 1890 – 1877

Resistance: 1928 – 1937 – 1950

XAGUSD

Silver is currently trading around 24.07, after 3-days rally. The recent decrease in US inflation has led to speculation that the Federal Reserve may slow interest rate increases, which is causing investors to turn to silver and other precious metals as a safe haven.

From a technical analysis perspective, Silver appears to be gaining momentum to move to a higher trading range. Currently, it is trading above its 8-day and 21-day moving averages. If it consistently closes above the level of $24.50, it may see an upward movement in price. The $23.75 level, where the 8-day and 21-day moving averages intersect, can be considered a support level.


Support: 23.75 – 23.40 – 22.75

Resistance: 24.50 – 24.85 – 25.35

UKOIL

On Tuesday, oil prices remained stable as market participants waited for a series of economic data to be released this week to assess the risk of a recession. Attention is also turning to demand projections from various major industry organizations, starting with OPEC.



From a technical analysis perspective, Brent oil has succeeded in moving above its 21-day moving average (83.35). It is currently targeting the resistance level of the trading channel at $85.90. If it breaks above the downtrend line, it could potentially increase the upward momentum and continue to move higher. If it falls below the 21-day moving average, the price could drop to the $81.75 level. On the downside, the support level may be at $80.50. On the upside, the resistance level is at $85.90, and for further upside potential, the $87.30 level should also be monitored.

Support: 83.35 – 81.75 – 80.50

Resistance: 85.90 – 87.30 – 89.40

 

[Z Forex]

"Market Update: US Index Futures Up, Major Currencies Flat, Precious Metals Mixed, Asian Markets Increase and Oil Remain Unchanged, US Dollar Index Downs"



Asian stock market indices reached a new high on Thursday, with Hong Kong's shares making up for lost ground from the previous three days due to the Lunar New Year holiday, as trading resumed. There was not much activity in trading on Thursday as the stock market in Australia was closed for a holiday and many areas of Asia were not open for business due to the ongoing Lunar New Year holiday, including China.

The Nasdaq100 index, which mostly consists of technology stocks, fell by 2.3% at the beginning of trading but recovered to end the day down by only 0.3%. The S&P 500 index ended the day slightly down, less than 0.1%, while the Dow Jones Industrial Average index finished the day with a small gain of 0.3%

The Bureau of Economic Analysis is releasing a report on the growth of the economy during the fourth quarter. It is predicted that the GDP will have grown at a rate of 2.5%, which is a slower growth rate compared to the 3.2% increase seen in the third quarter.

The value of the U.S. dollar was weak, and it was close to its lowest point in nine months. The United States’ 10-year treasury yield is down to 3.44%. The 2-10-year yield spread is at -75 bps. However, the 10Y real rate tightens to 98 bps today.

In Today's trading session, investors will pay attention to US GDP, core Durable Goods Orders, Initial Jobless Claims, and New Home Sales.

EURUSD

In the latter part of January, the value of the euro increased and approached $1.09, which is the highest level in nine months. This was due to growing expectations for the European Central Bank (ECB) to implement more aggressive monetary policy tightening measures, while the market began to factor in a potential shift in the policy of the Federal Reserve (Fed). The ECB is believed to continue its strong stance and raise interest rates by 0.5% in both February and March.

The EUR/USD currency pair is currently showing an upward trend, with the 8-day moving average supporting this trend. It has the potential to continue rising and reach the upper boundary of the ascending channel. The Euro has recently reached its highest point in the last 9 months and is showing a bullish trend. The important resistance level to watch is 1.0930. If there is a correction, the support level is at 1.0845 (8-day moving average), and further drops may find support at the 21-day moving average at 1.0740.

Support: 1.0845 – 1.0740 – 1.0650

Resistance: 1.0930 – 1.0970 – 1.1040

GBPUSD

The British pound remains unchanged today. The release of the Producer Prices in the UK for December was closely watched. The Bank of England is focusing on inflation and wage growth as its key areas of concern. The BoE is determined to achieve its inflation target despite the challenging economic conditions. As wage growth is a major factor, the lower PPI numbers may not be sufficient to reduce the pressure on the BoE. An aggressive approach to raising interest rates would have a harmful effect on the UK economy.

From a technical analysis perspective, The British pound experienced a rebound yesterday after experiencing a two-day drop, recovering from the support level of the trend. However, it may face resistance at the 1.2445 level. If it stays above the 8-day moving average, it could continue to reach higher resistance levels. On the other hand, if it falls below this level, it could indicate a change in trend. In terms of support levels, there are levels at 1.2265 and 1.2180 that it could fall back to.

Support: 1.2265 – 1.2180 – 1.2070

Resistance: 1.2445 – 1.2585 – 1.2650

USDJPY

The Bank of Japan (BOJ) stated that it has no plans to change its monetary policy, including keeping the yield curve control unchanged, as indicated in a report published on Thursday, summarizing the opinions from its recent meeting.

From a technical analysis standpoint, the currency pair appears to have difficulty remaining above the 21-day moving average (indicated in yellow) for an extended period of time. Currently, the pair seems to be encountering resistance around 130.80/90 as it tries to break above these levels. The 130.80 level is currently acting as a barrier and the next level to pay attention to is 131.30. On the downside, the 129.00 and 127.75 levels are providing support.

Support: 129.00– 127.75 – 126.50

Resistance: 130.80 – 131.30 – 132.50

XAUUSD

The price of gold keeps moving higher as the yield and the value of the dollar continue to be negatively impacted. Investors are becoming increasingly optimistic that more central banks will be putting a hold on their interest rate increases in the near future, as indications grow that global inflation is slowing. However, the overall economic outlook is still uncertain and there may be some unexpected developments.

From a technical analysis perspective, yesterday the price of Gold was able to surpass the 1940 level. Currently, the price of gold is continuing to trend upward, with the 8-day moving average (1919) providing support for this trend. As long as the price remains above the 1940 level, the resistance levels of 1955 and 1970 will become key areas to watch. In the event of a reversal, the support levels will be found between 1930 and 1919.

Support: 1930 – 1919 – 1910

Resistance: 1955 – 1970 – 2000

XAGUSD

The price of silver fluctuated within a narrow range on Thursday as investors refrained from making large investments before the release of economic growth data from the United States this week. The outlook for silver remains positive as expectations grow that the Federal Reserve will be taking a slower approach to raising interest rates.

Technically, silver is currently at a support level within the trend that has been rising from the bottom in November 2022 to the present day. Silver prices continue to move in a horizontal trend. The 23.15-22.95 level is a significant support level for silver, and it is further reinforced by the 50-day moving average also being located at that level, making it a strong support level. There are nearby resistance levels at 23.75 and 24.20.

Support: 23.15 – 22.95 – 22.10

Resistance: 23.75 – 24.20 – 24.50

UKOIL

The price of oil remained unchanged on Thursday due to a smaller increase in U.S. oil inventory than anticipated. Investors are currently waiting for more information about factors that affect the oil supply, such as decisions made at a meeting of OPEC+ and the potential ban on Russian refined products by the European Union.



From a technical analysis point of view, Brent crude oil prices are attempting to maintain above the 8-day moving average. This average, which is currently at 86.50, can indicate the short-term trend direction. Furthermore, the upward trend can be confirmed by the 8-day moving average crossing over the 21-day moving average. The nearest support level is 84.90 and the resistance level is 88.15. The next resistance level to be aware of is 89.50.

Support: 84.90 – 83.50 – 82.10

Resistance: 88.15 – 89.50 – 91.40

 

[Z Forex]

"Market Update: US Index Futures Down, Major Currencies Mixed, Precious Metals Decrease, Asian Markets Increase and Oil Moves Higher, US Dollar Index Downs"



Data from the previous night indicated that the economy of the United States, which is the largest in the world, had a stronger growth rate during the last three months of the year than analysts had predicted. This news eased fears that the country was about to enter a period of economic decline. As a result, stock prices on the New York Stock Exchange increased significantly, and this trend also affected markets in Asia.

Another report indicated that the labor market is still tight, and this could cause the Federal Reserve to maintain higher interest rates for an extended period. This is because when the labor market is tight, it means that there are more job opportunities available than people are looking for work, which can lead to wage growth and inflation. The Fed will want to keep interest rates higher to keep inflation in check and prevent the economy from overheating.

During the evening trading on Thursday, The US Futures decreased. This happened even though major stock market indexes ended the regular trading session with gains, following the release of a positive Gross Domestic Product (GDP) report. Investors are still closely observing the release of a large number of companies’ earnings results.

On Friday, investors will pay close attention to several key economic indicators. These include the Core Personal Consumption Expenditures (PCE) price index. Additionally, they will be monitoring the data on personal income, personal spending, consumer sentiment as measured by the University of Michigan, and pending home sales. All these indicators are key to understanding the state of the economy and making decisions about investments.

The United States’ 10-year treasury yield went up to 3.52%. The 2-10-year yield spread is at -68 bps. However, the 10Y real rate widens to 100 bps today.

EURUSD

The European Central Bank is expected to raise interest rates by 50 basis points consecutively, as they continue to combat inflation. They predict that the deposit rate will be maintained at 3.25% for approximately a year before a decline in economic conditions prompts a series of quarter-point reductions, starting in June 2024.

The currency pair had a pause in its upward trend after six consecutive days of gains. The pair is currently trying to maintain its position above the 8-day moving average and is seeking support at the current levels. The 1.0850 level is identified as a support level, and if it is breached to the downside, the next support level is at 1.0765. For the upward trend to continue, the pair must break above the 1.0930 level.

Support: 1.0850 – 1.0765 – 1.0650

Resistance: 1.0930 – 1.0970 – 1.1040

GBPUSD

The value of the British pound dropped following the release of strong US economic growth data yesterday. The pound, like other major currencies, was impacted by the increase in the US dollar index (DXY). The US PCE data to be released today could also lead to fluctuations in the dollar index.

The British pound is trading near the resistance level. It may face difficulty breaking above the 1.2445 level. If it can stay above the 8-day moving average, it could continue to climb to higher resistance levels. However, if it falls below this level, it may signal a change in trend. As for support levels, there are levels at 1.2285 and 1.2180 that the pound could potentially fall back to. On the upside, the 1.2445 level is a key resistance.

Support: 1.2285 – 1.2180 – 1.2070

Resistance: 1.2445 – 1.2585 – 1.2650

USDJPY

The Japanese yen, which is the country's currency, increased by 0.20% in value against the US dollar. This happened because the economic data reinforced the belief among market participants that inflation is increasing at a faster pace than expected. As a result, it could prompt the Bank of Japan to rethink its current monetary policy of keeping interest rates low and providing large amounts of liquidity to the market, which is known as the ultra-easy policy.

From a technical analysis perspective, it appears that the currency pair is having trouble staying above its 21-day moving average (indicated in yellow) for a prolonged period. Currently, the pair seems to be facing resistance around 130.80/90 as it tries to break above these levels. The 130.80 level is currently acting as a barrier, and the next level to pay attention to is 131.30. On the downside, the 129.00 and 127.75 levels are providing support.

Support: 129.00– 127.75 – 126.50

Resistance: 130.80 – 131.30 – 132.50

XAUUSD

Gold prices dropped to around $1920 on Friday, moving further away from its nine-month high due to an unexpected strength of the American economy as per the fourth quarter GDP numbers. The US economy grew by 2.9% in the last quarter of the year, more than the predicted 2.6% growth. The Federal Reserve is likely to only raise interest rates by 25 basis points in its next meeting. Investors are now keeping an eye on the US PCE data, which is the Federal Reserve's measure of inflation, if it comes out lower than expected, it could help gold prices to rise.

From a technical analysis perspective, Gold was rejected from 1949 levels and retreated to the 1919 region. In the last 4 days, we see that it has bounced back from 1919. This region draws attention as strong support The resistance levels of 1935 and 1955 will become key areas to watch. In the event of a reversal, the support levels will be found between 1919 and 1908.

Support: 1919 – 1908 – 1896

Resistance: 1935 – 1955 – 1975

XAGUSD

The Consumer Price Index (CPI) is a widely used measure of inflation, however, the Federal Reserve (Fed) has its preferred measure of inflation, the Personal Consumption Expenditure (PCE) Index. This index is also crucial in determining the direction of gold prices in the short term.
From a technical analysis perspective, silver is currently at a support level within an upward trend that began in November 2022 and continues to the present. Silver prices are currently moving in a horizontal pattern. The 23.55-23.15 level is a significant support level for silver, which is further reinforced by the 50-day moving average also being located at that level, making it a strong support level. There are also nearby resistance levels at 24.20 and 24.50.

Support: 23.55 – 23.15 – 22.75

Resistance: 24.20 – 24.50 – 24.75

UKOIL

On Friday, the prices of oil increased for a second consecutive day, as the stronger-than-anticipated economic growth in the United States and the expectation of a fast rebound in Chinese demand for oil helped drive the prices up. This is because the number of COVID-19 cases and deaths in China has significantly decreased from the highest level seen last month.
From a technical analysis perspective, Brent crude oil prices are trying to hold above the 8-day moving average. Additionally, the upward trend could be confirmed by the 8-day moving average crossing above the 21-day moving average. The closest support level is 85.20, and the resistance level is 88.15. Another resistance level to keep an eye on is 89.50.

Support: 85.20 – 84.00 – 82.20

Resistance: 88.15 – 89.50 – 91.40

 

[Z Forex]

"Market Update: US Index Futures Up, Major Currencies Increase, Precious Metals Rise, Asian Markets Decrease, Oil Up and US Dollar Index Downs"



On Thursday, various Asian currencies experienced a significant increase, while the value of the dollar dropped to a new low of nine months. This happened despite the recent interest rate increase implemented by the Federal Reserve. Market analysts predict that the bank may eventually change its current stance as a result of the predicted slowdown in the economy of the United States.



The Federal Reserve hiked its interest rates by 25 basis points, resulting in an interest rate range of 4.50% to 4.75%. The central bank also acknowledged the recent slowdown in inflation and assessed the impact of its previous interest rate hikes on consumer prices in a released statement. The recent 25 bps hike is slower in pace compared to the previous 50 bps hike in December and 75 bps hikes in each meeting from June to November. Although the statement acknowledges the slight decrease in inflation and its contribution to global uncertainty, Fed Chair Jerome Powell has a more optimistic view, claiming that the decrease in inflation has started.



Oil prices regained some ground on Thursday, following a drop in the previous session, as a declining dollar boosted the appetite for risk assets and the decision by OPEC+ to maintain a reduction in production alleviated worries about oversupply.



Investors are paying close attention to the ECB and BoE’s interest rate decisions and accompanying press conferences taking place today, as well as another key report including US Initial Jobless Claims.



The United States’ 10-year treasury yield decreased to 3.42%. The 2-10-year yield spread is at -68 bps. However, the 10Y real rate tightens to 111 bps today.

EURUSD

The euro rose over 1.10 on Wednesday, near its highest level since April of the previous year, due to a weaker dollar and the Federal Reserve's expected reduction in the size of its interest rate increases, which appeared to indicate a more accommodative stance. At the same time, investors anticipate that the European Central Bank will maintain a more aggressive stance and raise interest rates by 0.50 basis points. However, the focus is mainly on the ECB's plans for its March meeting, with markets predicting another 0.50% hike. The Eurozone inflation rate slowed more than expected to 8.5% in January, the lowest since May, while the core rate remained at an all-time high of 5.2%.

Technically, the pair reached its highest point in 9 months, boosted by the Federal Reserve's interest rate decision and Fed Chair Powell's statements. The support levels are around 1.0985 and 1.0925, and resistance is seen at 1.1050.

Support: 1.0985 – 1.0925 – 1.0855

Resistance: 1.1050 – 1.1120 – 1.1180

GBPUSD

The British Pound's value is expected to be impacted by today's busy economic events. The focus will soon shift to the Bank of England's decision on interest rates, with market expectations for a 50-basis point increase.

Technically, the British Pound is moving towards 1.2445 resistance with support from the 8-day moving average. It had failed to pass this level in his previous attempts. Volatile movements can be seen after the Bank of England interest rate decision, which will be announced today. 1.2360 is seen as support, while 1.2445 is the most important resistance.

Support: 1.2360 – 1.2280 – 1.2195

Resistance: 1.2445 – 1.2585 – 1.2650

USDJPY

The Japanese yen strengthened against the US dollar, reaching levels not seen in eight months. This was due to the recent decision by the Federal Reserve to decrease the size of its interest rate hike and their assertion of progress in controlling inflation, leading to speculation that the tightening phase may be ending. The Bank of Japan's January meeting also showed that policymakers discussed their expectations for inflation and the potential for sustained wage growth while highlighting the importance of maintaining accommodative monetary policies.

Technically, the currency pair failed to cross above the 21-day moving average and was repelled, causing it to fall back. It is now approaching the upper boundary of the descending channel. The 130.80 level is currently presenting a challenge for the pair, with the next significant level being 131.30. On the support side, the pair has a 127.75 level.

Support: 127.75 – 126.50 – 125.00

Resistance: 130.80 – 131.30 – 132.50

XAUUSD

Gold prices hit a nine-month high on Thursday, following a significant increase the previous day, due to the Federal Reserve's plan to continue raising interest rates which weakened the dollar and raised concerns of a possible economic slowdown in the coming year. The continued rise in interest rates is expected to have a negative impact on worldwide economic growth. This, along with the perceived decline in the dollar, has made gold a desirable safe haven for investors.

Technically, Gold broke through important resistance levels and saw an increase, reaching 1960. The 1965 and 1975 levels are acting as resistances. On the downside, the 1949 and 1935 levels are expected to offer support.

Support: 1949 – 1935 – 1919

Resistance: 1965 – 1975 – 1987

XAGUSD

On Thursday, the price of silver increased due to concerns of an economic slowdown in the coming year, which were fueled by the Federal Reserve's intention to persist with raising interest rates. The increase in silver's value happened at the same time as a significant drop in the value of the dollar.

Technically, Silver reached the top of the horizontal channel. It has been struggling to pass the 24.30 level for a while. A breakout of this level can increase the upside momentum of silver and it may face bigger moves. On the downside, the support is the 8-day moving average of 23.85.

Support: 23.85 – 23.15 – 22.75

Resistance: 24.30 – 24.50 – 24.75

UKOIL

Oil prices bounced back on Thursday as a weaker dollar made it more affordable for commodity buyers. Market participants are now looking to central bank meetings in Europe and the UK for further guidance.



From a technical analysis perspective, Brent oil faced a decline, as it was unable to break past 88.70. The commodity, which is also below its 8-day moving average, is now heading back to the point where it previously broke from a downtrend for strength. The closest support level is 83.15, while the resistance level is 86.10. Another key resistance level to keep an eye on is 88.70.

Support: 83.15 – 81.50 – 80.65

Resistance: 86.10 – 88.70 – 91.90

 

[Z Forex]

"Market Update: US Index Futures Down, Major Currencies Mixed, Precious Metals Rise, Asian Markets Negative, Oil Up and US Dollar Index Increases"


The U.S. Index futures declined during Monday morning trading. During the previous week, the benchmark averages had a mixed performance due to positive economic reports leading to the anticipation of increased interest rates from the Federal Reserve. However, investors are still closely monitoring a hectic week of earnings announcements.


Significant news from the weekend, A U.S. military fighter aircraft shot down a supposed Chinese spy balloon off the coast of South Carolina on Saturday. This happened one week after the balloon entered U.S. airspace, leading to a publicly known espionage incident that worsened the relationship between the U.S. and China.

Asian stock markets declined on Monday due to concerns about the deterioration of relations between China and the US after a Chinese spy balloon was shot down. The markets also reevaluated their view on US monetary policy following strong employment data.


On Monday, the value of the Japanese yen dropped to its lowest point in over three weeks compared to the US dollar. This was due to a report indicating that Masayoshi Amamiya, a supporter of aggressive monetary policy, would become the next governor of the Bank of Japan.

The United States 10-year treasury yield increased to 3.54%. The 2-10-year yield spread is at -76 bps. However, the 10Y real rate tightens to 117 bps today.



EURUSD

The parity remained steady on Monday, due to worries about increasing interest rates and escalating tensions between the US and China, triggered by the shooting down of a suspected Chinese spy balloon by the US. Investors will be closely monitoring a speech by the President of the European Central Bank, Christine Lagarde. Investors will closely follow the retail sales data in the European region as an important economic indicator. If the data is positive, it may contribute to a slight improvement in the exchange rate.

From a technical perspective, the currency pair has broken below its 8-day and 21-day moving averages, and it appears to have shifted from an upward to a downward trend. These two developments have a negative impact on the pair. However, the 1.0750 level can be monitored as a potential support level, while the 1.0840 level can be watched as a nearby resistance level.

Support: 1.0750 – 1.0700 – 1.0660

Resistance: 1.0840 – 1.0880 – 1.0925

GBPUSD

Last week, the Bank of England took steps to mitigate persistent inflationary pressure by raising its interest rate by 50 basis points. This increases the rate to 4%, which is the highest it has been since the 2008 financial crisis. The British Pound may follow the downward trend, due to the robust employment data in the US released on Friday. The data increases the possibility for the Federal Reserve to continue raising interest rates to address inflation, causing concerns that the US, the largest economy in the world and a key contributor to growth, could experience a recession in the current year.

Technically, on Friday, the British Pound experienced a significant decline. Falling below the 8-day and 21-day moving averages, as well as the 50-day moving average, the Pound is now searching for support at the 1.2005 level. The next level of support can be found at the 200-day moving average at 1.1960. On the upside, the 1.2125 level may act as resistance.

Support: 1.2005 – 1.1960 – 1.1835

Resistance: 1.2125 – 1.2220 – 1.2275

USDJPY

On Monday, the Governor of the Bank of Japan, Haruhiko Kuroda, defended the 10-year stimulus plan he implemented. He stated that there was "no better way" to achieve the 2% inflation target in a sustained manner. Moreover, the Japanese yen fell to its lowest level in over three weeks against the US dollar following a report that Bank of Japan Deputy Governor Masayoshi Amamiya, who favors strong monetary policy, will become the next governor.

Technically, the currency pair broke through the 21-day moving average with a strong bar, after being unable to surpass it for some time. The 132.75 level, which coincides with the 50-day moving average, may serve as resistance. On the downside, the 130.80 level, which was previously a resistance point, may now provide support.

Support: 130.80 – 129.90 – 128.50

Resistance: 132.75 – 134.50 – 136.80

XAUUSD

Gold prices were slightly up on Monday after experiencing their largest decline in seven months the previous week. Attention has shifted to a meeting with Federal Reserve Chair Jerome Powell following the release of robust employment data in the U.S., which heightened worries about stricter monetary policies.

Gold experienced a significant drop towards the end of last week. After quickly falling below the 8-day and 21-day moving averages, it seems to have found support from the channel. The 1860 level can be monitored as potential support. If this level is breached, there is another support level in 1846. On the upside, the 1887 and 1906 levels are identified as potential resistance points.

Support: 1860 – 1846 – 1827

Resistance: 1887 – 1906 – 1920

XAGUSD

The price of silver experienced a sharp decline last week, similar to gold. The Federal Reserve's 25 basis point rate hike was in line with expectations, but silver's price fell due to unexpected job data released on Friday. This data fueled speculation that the Fed could continue raising interest rates, leading to a decrease in demand for metals.

Silver has recently broken away from a downward trend within a horizontal channel. Two key support levels to keep an eye on are 22.05 and 21.65. On the other hand, 23.15 and 23.60 may present resistance if silver attempts to rise.

Support: 22.05 – 21.65 – 21.00

Resistance: 23.15 – 23.60 – 24.30

UKOIL

On Monday, oil prices increased slightly, influenced by positive comments from the International Energy Agency regarding a recovery in demand from China. Despite this, the markets remained cautious as they continued to experience significant losses for the week due to concerns about tightening monetary policy in the US.



Brent oil is currently trading below its 8 and 21-day moving averages and moving towards a previous strong point where it broke away from a downward trend. The nearest support level is 78.50, and the resistance level is 82.30. It's important to keep an eye on the 83.95 level as it acts as a significant barrier. In case of a continued drop, 75.50 serves as a support level.

Support: 78.50 – 75.50 – 72.80

Resistance: 82.30 – 83.95 – 85.70

 

[Z Forex]

"Market Update: US Index Futures Up, Major Currencies Increase, Precious Metals Rise, Asian Markets Mixed, Oil Downs and US Dollar Index Decreases"



Federal Reserve Chairman Jerome Powell's remarks on Tuesday regarding the process of reducing inflation in the US economy had a significant impact on the markets. The market closed higher after a volatile trading session, as investors weighed in on Powell's comments on the length of time the central bank might need to control inflation.

Powell stated that 2023 will see "significant decreases in inflation," boosting investor confidence in a less aggressive monetary policy. This confidence had weakened following the release of the strong US jobs report last Friday. During an interview with David Rubenstein at the Economic Club of Washington, D.C., Powell emphasized that the reduction of inflation has begun, particularly in the goods sector, which accounts for 25% of the economy. He also warned that the process will not be smooth or quick and that the Fed may need to raise interest rates to achieve their inflation target.

When questioned about the better-than-anticipated December jobs report, Powell commented that the strong job market is why the Fed believes reducing inflation will take a considerable amount of time. He added that the robust labor market is positive and that inflation has started to decrease despite it.

In conclusion, Powell's remarks have provided insight into the Fed's approach to controlling inflation and have had a positive impact on the markets. Investors are now more confident in a less aggressive monetary policy and are optimistic about the future of the economy. The strong job market and the decrease in inflation, despite it, further reinforce this confidence.

The United States 10-year treasury yield increased to 3.65%. The 2-10-year yield spread is at -78 bps. However, the 10Y real rate tightens to 126 bps today.

EURUSD

The European Central Bank made changes to the rate limit for government deposits within the Eurosystem. This step is aimed at kickstarting their return to the market in a controlled manner and avoiding potential disruptions as the bank adjusts its monetary policy. The update to the rate ceiling is a part of the ECB's strategy to ensure a smooth transition and maintain stability in financial markets.

Technically, the pair under consideration found support from its 50-day moving average and currently appears to have reversed its trend. After reaching a low of 1.0669 yesterday, the pair has the potential to advance toward the resistance level set by the 8-day moving average at 1.0795.

Support: 1.0695 – 1.0670 – 1.0595

Resistance: 1.0795 – 1.0835 – 1.0925

GBPUSD

A recent survey by the Recruitment and Status Confederation showed that the growth of starting pay for permanent hires in Britain's job market has slowed down to its lowest point in nearly two years. This could be seen as a sign that the job market is cooling. The Bank of England is keeping a close eye on inflation in the job market and is thinking about when to end the interest rate hikes. The survey also revealed that employers are becoming more cautious and turning to temporary hires.

In the technical analysis of the British Pound, it has experienced a substantial decline over a period of three days. The Pound has fallen below its 8-day, 21-day, and 50-day moving averages and is now searching for support from the 200-day moving average at the 1.1950 level. However, the Pound may face resistance at the 1.2085 level.

Support: 1.1950 – 1.1855 – 1.1710

Resistance: 1.2085 – 1.2145– 1.2270

USDJPY

The Japanese Prime Minister acknowledged the significant effect this appointment will have on financial markets and stated that he is still in the process of deciding on a successor to the current governor, Haruhiko Kuroda, whose term will end in April. He emphasized the need for strong communication abilities and the ability to work well with central banks globally.

Technically, the currency pair in question broke above its 21-day moving average with a strong candle after having difficulty breaking through it for some time. Currently, the 132.50 level, which is in line with the 50-day moving average, acts as a resistance and the currency pair may face challenges in surpassing it. On the downside, the 130.80 level, which was a previous resistance point, may now provide support.

Support: 130.80 – 129.90 – 128.50

Resistance: 132.50 – 134.50 – 136.80

XAUUSD

On Wednesday, gold prices held steady despite mixed signals from the Federal Reserve regarding its monetary policy. Additionally, gold prices saw a slight rise over the past two days, bouncing back from a recent low near a one-month low point.

Technically, gold seems to have stabilized at a previously identified channel support. If this support level holds, gold may have the possibility of rebounding. Over the past three days, it has remained above the channel support with slight positive changes. The 8-day and 21-day moving averages will also play a crucial role in determining gold's short-term trend. Nevertheless, gold may encounter resistance at the 1882 level and then again at 1896 if it overcomes that hurdle.

Support: 1870 – 1860 – 1846

Resistance: 1882 – 1896 – 1912

XAGUSD

On Wednesday, silver prices rose to around 22.30, recovering from its one-month low. This was due to Federal Reserve Chair Jerome Powell's recent comments, which were seen as less stringent than what the market expected. Powell mentioned that additional interest rate hikes may be necessary and that the final rate could be higher if the job market remains robust. However, he also stated that disinflation has started.

Technically, silver has fallen from its horizontal channel. Currently, it appears to be finding support at the 22.10 level and may return to its prior levels. Another support level to be aware of is 21.65. Conversely, 22.95 and 23.15 may offer resistance if silver tries to increase in value.

Support: 22.10 – 21.65 – 21.00

Resistance: 22.95 – 23.15 – 23.60

​

UKOIL

Oil prices slightly declined on Wednesday after a strong increase the previous day, due to a combination of factors, including reduced concerns among market participants about interest rate hikes following comments from the head of the Federal Reserve and increased demand for oil in China.



Technically, yesterday, Brent crude saw a 3% increase, climbing above the 8-day and 21-day moving averages. Whether this upward trend will continue in this area is yet to be seen. The 82.70 level is close support to keep an eye on. If it continues to rise, Brent crude may encounter resistance at the 85.50 level.

Support: 82.70 – 77.15 – 75.25

Resistance: 85.50 – 88.35 – 91.50

 

[Z Forex]

"Market Update: US Index Futures Down, Major Currencies Decrease, Precious Metals Down, Asian Markets Sink, Oil Up, and US Dollar Index Rises"


On Friday, currencies in Asia declined as the sudden increase in U.S. Treasury yields caused concerns about an impending recession. Additionally, the value of the Chinese yuan was impacted by the recently released data indicating a modest increase in inflation following the easing of anti-COVID restrictions. The Consumer Price Index (CPI) of China increased by an annual rate of 2.1% in January. This is higher than the previous month's growth rate of 1.8%, but slightly below the expected 2.2%.

However, the market remains uncertain regarding the direction of monetary policy in the U.S. due to recent data indicating a slowdown in the job market. An increase in weekly jobless claims and a growing number of layoffs in the country are likely to limit the Federal Reserve's ability to continue raising interest rates.

Attention is now focused on the upcoming U.S. inflation data, which will be released next week and provide further insight into the state of the world's largest economy, as it grapples with a slowdown in activity.

The United States 10-year treasury yield increased to 3.66%. The 2-10-year yield spread is at -82 bps. However, the 10Y real rate widens to 118 bps today.

EURUSD

Fundamental Outlook: The release of the University of Michigan Consumer Sentiment Index for February in the United States is expected to have an impact on the EUR/USD exchange rate. This index measures consumers' outlook and expectations, taking into account their perceptions of their own financial situation, the near-term economic outlook, and their long-term economic outlook. This data will be closely monitored, as recent indications suggest a slowdown in inflation, which could boost consumer confidence.

Technical Analysis: Yesterday, the EUR/USD pair was supported by its 50-day moving average. The 8-day moving average currently stands at 1.0765. The pair attempted to surpass this level but was unsuccessful. Market participants will closely monitor the 1.0705 support level in case of a potential downside move.

Support: 1.0705 – 1.0670 – 1.0595

Resistance: 1.0765 – 1.0835 – 1.0925

GBPUSD

Fundamental Outlook: Investors are waiting for further statements from UK policymakers and the release of Britain's fourth-quarter GDP data, which is due on Friday. This data may offer additional insight into the central bank's future actions. In February, UK officials implemented the 10th consecutive interest rate hike, bringing the Bank Rate up to 4%, its highest level since 2008. However, the central bank has indicated that inflation may have reached its peak, suggesting that its tightening cycle might soon come to a close. Despite this, the Chief Economist of the Bank of England, Huw Pill, has stated that the bank is prepared to take additional measures to reach its inflation target.

Technical Analysis: The British pound has demonstrated signs of improvement, following a drop to its 200-day moving average. After a three-day upward trend, the 8-day moving average has been located at 1.2135, which may now act as resistance. Meanwhile, the 1.2075 level is serving as a support.

Support: 1.2075 – 1.2000 – 1.1950

Resistance: 1.2135 – 1.2190– 1.2260

USDJPY

Fundamental Outlook: Investors are currently keeping an eye on the Japanese government as it prepares to announce its choices for the next governor of the Bank of Japan.

Technical Analysis: The currency pair successfully broke above its 21-day moving average, marked by a strong performance, after facing challenges in doing so previously. The 132.35 level, which aligns with the 50-day moving average, serves as a form of resistance and could prove to be a hurdle for further upward movement. However, the 130.80 level, previously acting as resistance, may now provide support.

Support: 130.80 – 129.90 – 128.50

Resistance: 132.35 – 134.50 – 136.80

XAUUSD

Fundamental Outlook: The price of gold was essentially unchanged near a low point reached one month prior, affected by the upward trend in short-term yields. The metal was on track to continue its downward trend for a second consecutive week, as the market adjusted its outlook for future interest rate increases by the Federal Reserve.

Technical Analysis: Yesterday, Gold broke through the channel support previously discussed and reached its 8-day moving average. However, it was unable to sustain this level and instead reversed downward. The formation of a bearish flag pattern on the daily chart suggests that the decline may continue. Nonetheless, gold appears to have found support from its 50-day moving average at present. As long as the 1855 level remains intact, the market will closely monitor the 1862 and 1880 resistance levels above.

Support: 1855 – 1835 – 1810

Resistance: 1862 – 1880 – 1895

XAGUSD

Fundamental Outlook: Investors are now rethinking their predictions for future interest rate hikes by the Federal Reserve. While a potential recession in the U.S. is expected to have a positive impact on silver in the long run, the metal may face temporary challenges due to rising interest rates in the short term.

Technical Analysis: Yesterday, silver reached its 8-day moving average but was unable to maintain this level. The 21.60 level is considered an important support for silver, which is also below the 22.10 support level. The 200-day moving average, located at 21, serves as additional support. On the upward trajectory, the 8-day average level at 22.50 will be monitored.

Support: 21.60 – 21.00 – 20.75

Resistance: 22.50 – 22.85 – 23.15

UKOIL

Fundamental Outlook: On Friday, oil prices remained relatively unchanged due to increasing worries about a slowdown in the U.S. economy and a slow recovery in China. However, they were still on track for substantial weekly gains as short-term supply remained limited due to disruptions in Turkey.



Technical Analysis: Brent oil prices are currently rising above both their 8-day and 21-day moving averages, but the sustainability of this upward trend remains uncertain. The nearby support level at 82.70 will be closely monitored. If Brent crude continues to climb, it may encounter resistance at the 85.50 level. Market participants will closely observe the break of the previous downtrend.

Support: 82.70 – 80.85 – 77.25

Resistance: 85.50 – 88.35 – 91.50