Focus on gold.

Fundamentally speaking, the US released retail sales in July increased by 0.7% mom. The figure for June was also revised up to 0.3% from 0.2%, suggesting the U.S. economy continued to expand in 3Q and avoid recession. Consequently, inflation stays still in the short run.  With demand remaining resilient and labor market tightening, curbing inflation has become a tricky problem for the FED. We believe gold is heading for a bounce.

Technically speaking, the gold daily has come to a key support zone – the 240-day moving average .

(Gold daily cycle, Ultima Markets MT4)

The 240-day moving average has been a supportive position for gold since 2022. The gold price made small fluctuations in the supportive zone during the past week, nevertheless, the stochastic oscillator signaled a golden cross yesterday.

(Gold in 1- hour period, Ultima Markets MT4)

In 1-hour period, the gold price went down again after stepping back on the 65 – period moving average yesterday, but it did not fall below the previous low. Looking at the overall structure, the gold price has a probability of forming a bottom structure. After the price breaks through the previous suppressed position, please make sure if the ATR combination indicator shows an effective breakthrough.

(Gold in 1- hour cycle, Ultima Markets MT4)

According to the pivot indicator in Ultima Markets MT4, the central price is 1902.54,

Bullish above 1902.54, the first target is 1909.10, and the second target 1917.99.

Bearish below 1902.54, the first target is 1893.94, and the second target 1887.37.

Disclaimer Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.

Focus on EUR/USD.

Fundamentally speaking, although Fed’s rate hike coming to an end, the U.S. dollar index continues to rise. According to data released by the CFTC last week, the short positions fell to the lowest level in eight weeks. Short-covering is fueling a rebound in the U.S. dollar index as hedge funds continue to trim their short positions.

(US 10 -Year Treasury Yield vs EU 10 -Year Treasury Yield)

During the tightening monetary cycle, the spread of long-term bonds between the United States and Europe drives arbitrage funds to buy dollar and sell euro. In the short term, the spread deliveries adjustments to the exchange rate.

Technically speaking, the EUR/USD daily cycle completed a breakout of last Friday’s low yesterday. The market has a high probability of ushering in a downward trend in the next two days.

(EUR/USD daily cycle, Ultima Markets MT4)

The exchange rate fell below multiple moving averages and was blocked by the 61.8% golden ratio Fibonacci retracement position yesterday. Today there is a certain probability of stepping back on the moving average or consolidating prices, but if today’s market continues to fall below yesterday’s low, the euro will remain weak against the dollar.

(EUR/USD daily cycle, Ultima Markets MT4 )

From the perspective of daily structure, there are two key support positions below the level, 1.0836 is the potential target, and 1.0639 is the extremely critical long-short boundary. If all supportive levels are crushed, a deep correction will come along.

(EUR/USD in 4 -hour cycle, Ultima Markets MT4)

In 4- hour cycle, bull and bear are in entanglement. The Stochastic Oscillator displays a golden cross to indicate the bull, but the exchange rate maintains a downward trend. It means that the decline is not firm enough, and the rebound is still strong.

(EUR/USD in 1- hour cycle, Ultima Markets MT4)

In 1- hour cycle, the price still has the probability of stepping back on the moving average and resistance level. If Stochastic Oscillator shows a dead cross later on, please look for short trading opportunities.

According to the pivot indicator in Ultima Markets MT4, the central price is 1.09147,

Bullish above 1.09147, the first target is 1.09537, and the second target 1.09993.

Bearish below 1.09147, the first target is 1.08680, and the second target 1.08284.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.

Focus on EUR/USD.

On fundamentals, last week PMI figures in the euro zone reconfirmed the pressure on the European economy, with the manufacturing sector recording 42.7 in July, the lowest manufacturing PMI since 2020. The PMI for the services sector was revised down to 50.9 in July, the lowest up to date. In this context, the market’s expectation for the end of the ECB interest rate hike has fallen from the high of 3.95% in July to the current 3.8%. Investors can wait for the market to digest the interest rate difference between Europe and the United States, and then pay attention to the impact of more economic data on the future.

Technically speaking, in EUR/USD daily cycle, the short-term moving averages formed by the 15-day and 21-day suppressed the rise of the exchange rate in the short run. Although it fell below Monday’s low yesterday, there are still bullish opportunities.

(EUR/USD daily cycle, Ultima Markets MT4)

The stochastic oscillator formed a golden cross gesture last week, and there is a bullish potential, but it can only be clarified after the suppression of the short-term moving averages reverses.

(EUR/USD 4 -hour cycle, Ultima Markets MT4)

In the 4- hour cycle, the exchange rate doesn’t form an effective long structure, and still needs to wait for the confirmation of moving averages and price actions. It is necessary to watch out for any bearish strike in the short term.

(EUR/USD 1 -hour cycle, Ultima Markets MT4)

According to the pivot indicator, the central price of the day is 1.09612,

Bullish above 1.09612, the first target is 1.09956, and the second target 1.10437.

Bearish below 1.09612, the first target is 1.09140, and the second target 1.08813.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.

Focus on GBP/AUD today.

On fundamentals, there is no notable financial data due today. The difference in monetary policy between the UK and Australia will control the currency exchange rate in the short run.

(Blue vs Black, BoE rate vs RBA rate)

The BoE raised its benchmark interest rate by 25 bps to the highest level of 5.25% since 2008. At the same time, the RBA’s is currently set at 4.1%. The interest rate differential means room for arbitrage. AUD is deemed as a commodity currency, inherently vulnerable to commodity prices. The market is positive about RBA rate hikes, resulting in a bullish view of AUD.

Technically speaking, the GBP/AUD daily cycle structure presents a potential Wolf Wave structure. However, the current price action structure does not show a clear bearish structure.

(GBP/AUD daily cycle, Ultima Markets MT4)

The daily price action has room to rise — support is found on the 33-day moving average. The exchange rate fluctuated on the 5-day moving average for three days and stopped falling with three lower shadows. Still, we need to be alert. The stochastic oscillator has been entangled, and the upper resistance line is not far away. The market may reverse at any time.

(GBP/AUD 1 -hour cycle, Ultima Markets MT4)

On the hourly chart, GBP/AUD has formed a clear rectangular range after three days of swinging. Yesterday’s breakthrough suggested that bulls are more dominant in the short run. However, judging from the ATR combination indicators, it is doubtful whether the market breakthrough is effective. From a technical standpoint, GBP/AUD looks bullish, however, the sentiment may quickly change.

(GBP/AUD 1- hour cycle, Ultima Markets MT4)

According to the pivot indicator in Ultima Markets MT4, the central price of the day is 1.94141,

Bullish above 1.94141, the first target is 1.94943, and the second is 1.95451.

Bearish below 1.94141, the first target is 1.93626, and the second is 1.92806.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.

Focus on GBP/AUD today.

On Fundamentals, BoE raised its benchmark interest rate by 25 bps yesterday, reaching the highest level since 2008. Rising interest rates mean higher borrowing costs, meaning more pressure on many homeowners. The UK continues to be on the edge of recession. Separately, RBA’s monetary report suggests suspending interest rate hikes, however, leaves room for another 15-bps raise.

BoE’s monetary policy was significantly more hawkish than RBA’s, resulting in an appreciation of GBP/AUD since February 2023. However, BoE’s policy no longer brought bullish sentiment on the pound but worries on the British outlook. At present , the market is certian on the future peak interest rate of the RBA, which will lead to a potential bullishness on the Australian dollar .

Technically speaking, the GBP/AUD daily cycle presents a potential Wolf Wave structure, but the price action structure does not display a clear bearish signal at moment.

(GBP/AUD daily cycle, Ultima Markets MT4)

The Stochastic Oscillator shows no dead cross on the daily cycle. Please be aware of GBP/JPY’s next bullish trend.

(4-hour GBP/AUD cycle, Ultima Markets MT4 )

The 4-hour Elliott Wave structure of GBP/AUD suggests that it may be in a double-saw-tooth rebound phase. After the market confirms the bearish trend, it is possible to pave a sharp downward path.

(1-hour GBP/AUD cycle, Ultima Markets MT4)

On 1-hour cycle of GBP/AUD, a turning point emerged. The exchange rate fell rapidly and was close to the previous breakthrough price. On August 2, the price action formed a potential head-and-shoulders structure. If it falls below the 1.9338 neckline, the probability of going bearish will increase.

(1- hour GBP/AUD cycle, Ultima Markets MT4)

According to the pivot indicator in Ultima Markets MT4 , the central price of the day is 1.94039 ,

Bullish above 1.94039, the first target is 1.94667, and the second is 1.95328.

Bearish below 1.94039, the first target is 1.93373, and the second is 1.92745.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.

Focus on GBP/USD today.

Fundamentally speaking, the BoE and Fed are heading for a showdown now, and this is the only factor that affect the exchange rate between the two. First, the BoE tightening policy has not yet been clarified, While the Fed’s rate hike has come to an end. Second, although the probability of the Fed’s raising rates in 2023 has decreased, any positive economic data may trigger Fed’s move again, resulting in an elevated USD.

Before the BoE’s MPC meeting and the US’s nonfarm payrolls due this week, the GBP/USD is dominated by market sentiment in the short run. It is necessary to alert of any technical breakthrough.

Technically speaking, the GBP/USD daily cycle is about to approach the 65- day moving average, and the stochastic oscillator has also entered the oversold zone.

(GBP/USD daily cycle, Ultima Markets MT4)

It is still too early to say that the bear is gone for GBP, so you must stay alert.

(GBP/USD 4 -hour cycle, Ultima Markets MT4)

In the 4- hour period, the exchange rate has fallen to the upward trend line, while the stochastic oscillator indicator shown divergence signals. As a result, a short-term rebound is expected.

(GBP/USD in 1- hour period, Ultima Markets MT4)

In 1- hour period, the price action shows a clear Wolfe wave pattern. Point 3 is below point 1, as point 4 retreats to the price range between point 2 and point 3, and point 5 rebounds upward after falling to the line connecting point 1 and point 3. In the short term, GBP/USD has a certain chance of rebounding. The first target looks at the level of point 4, and the second target looks at  line connecting point 1 and point 4 .

(GBP/USD in 1- hour period, Ultima Markets MT4)

According to the pivot indicator in Ultima Markets MT4, the central price is 1.27864,

Bullish above 1.27864, the first target is 1.28311, and the second target 1.28866.

Bearish below 1.27864, the first target is 1.27314, and the second target 1.26863.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.

Focus on USD/JPY

On fundamentals, last Friday, BoJ revealed its monetary policy. The interest rate was unchanged as expected, however, the YCC curve surprised the market. Although BoJ has made a flexible adjustment on YCC, the targeted yield has not floated accordingly. The market describes BoJ as dovish and expects monetary easing policies to exist for some time in the future. In the short term, the yen is still in a depreciation trend while the market taking in the news.

On technical , the USD/JPY daily rebounded at the key support level last Friday, leaving a long lower shadow.

(USD/JPY daily, Ultima Markets MT4)

USD/JPY’s breaking the previous high before the interest rate decision implies a reverse move. Before it hits 144, the probability of extending the downward trend is relatively small.

(USD/JPY in 4 -hour period, Ultima Markets MT4)

In 4-hour period, the exchange rate rises to the upper edge of the upward channel. In terms of wave structure, the 5th wave structure can be ensured. It is not yet confirmed that the long-term cycle has made a reversal twist.

(USD/JPY in 1- hour period, Ultima Markets MT4)

In 1- hour cycle, the 65- week moving average often appeared as a support position in the trend. After the exchange rose and fell back yesterday, adjustment structure emerged. The Stochastic Oscillator was also in a weakening phase. It is expected to find support at the 65 -week moving average or the Fibonacci retracement position around 23.6%.

(USD/JPY in 1hr period, Ultima Markets MT4)

According to the pivot indicator in Ultima Markets MT4, the central price is 141.975,

Bullish above 141.975 is, the first target is 143.252, and the second target 143.974.

Bearish below 141.975, the first target is 141.264, and the second target 139.975.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.