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Gold Price Forecast: XAU/USD rebounds as US yields turn to the downside
Gold Price Forecast: XAU/USD rebounds as US yields turn to the downside

Gold Price Forecast: XAU/USD rebounds as US yields turn to the downside

253398   August 31, 2022 23:56   FXStreet   Market News  

  • XAUUSD rises more than $10 from monthly lows.
  • US yields retreat after ADP data, DXY turns negative.
  • Stocks in Wall Street fail to hold to gains.

Gold prices are modestly down on Wednesday but off lows. During the American session, XAU/USD rebounded from the one-month low at $1709 and rose to $1723. It is hovering around $1720.

The rebound in gold is preventing a daily close under $1715 which would be a negative technical development suggesting more losses ahead, targeting $1700. Below the next level to watch is the July low at $1680. The immediate resistance on the upside is located at $1725; above the bearish pressure would ease.

Yields down

US yields are now falling on Wednesday. Following the August ADP employment report, the demand for Treasuries rose. The employment numbers came in below expectations with the private sector adding 132K jobs versus the 288K of market consensus. On Thursday the ISM Manufacturing is due and on Friday, the Non-farm payroll (consensus: 300K).

The US 10-year yield peaked at 3.16%, the highest level in two months and then pulled back to 3.10%; the 2-year yield retreat from the highest since 2007 at 3.49% to 3.43%. The decline in yields weakened the greenback, helping XAUUSD. The US Dollar Index falls 0.35% on Wednesday and is back under 108.50. The DXY continues to move sideways, holding between 108.00 and 109.00.

Despite the move lower in yields, the doors for a 75 basis points rate hike from the Federal Reserve are still open. Also, despite the rebound, the primary trend in XAU/USD is still bearish.

Technical levels

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Colombia National Jobless Rate fell from previous 11.3% to 11% in July
Colombia National Jobless Rate fell from previous 11.3% to 11% in July

Colombia National Jobless Rate fell from previous 11.3% to 11% in July

253397   August 31, 2022 23:49   FXStreet   Market News  

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.




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Canada: As the weather heated up, the economy was cooling down – CIBC
Canada: As the weather heated up, the economy was cooling down – CIBC

Canada: As the weather heated up, the economy was cooling down – CIBC

253396   August 31, 2022 23:45   FXStreet   Market News  

Data released on Wednesday showed a solid growth rate in Canada during the second quarter of 3.3%, however, it was below expectations of 4.5%. Analysts at CIBC point out the numbers were far from a disaster and continue to show solid growth. They expected a 75 basis point rate hike from the Bank of Canada next week. 

Key Quotes: 

“As the weather heated up, the Canadian economy was cooling down. While growth in Q2 as a whole was solid at an annualized +3.3%, and little changed from Q1’s pace, it was disappointing relative to consensus expectations (+4.4%) and was largely driven by an acceleration in early spring. The latest monthly GDP figures, including an advance estimate for a slight decline in July, have shown a broadly flat trend starting in May. While we still expect that the Bank of Canada will hike interest rates further to combat high inflationary pressures, a cooling economy supports our view that the peak will be lower than financial markets have been pricing in

“Today’s GDP figures were far from a disaster, and still show that the Canadian economy managed to achieve solid growth during a period of time that the US economy was contracting. However, somewhat cooler growth in Q2 and Q3 than the Bank of Canada recently forecasted should give policymakers comfort that inflation will start to ease more meaningfully later in the year without interest rates needing to move too far into restrictive territory.”

“We still forecast a 75bp hike from the Bank next week, that will take the overnight rate to 3.25% and into a range that policymakers think is restrictive (above 3%). However, we also expect a pause after that as the Bank reassess the impact of these restrictive rates on growth and inflation.”
 

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EUR/GBP rallies toward fourth straight day, hits monthly highs near 0.8650
EUR/GBP rallies toward fourth straight day, hits monthly highs near 0.8650

EUR/GBP rallies toward fourth straight day, hits monthly highs near 0.8650

253395   August 31, 2022 23:45   FXStreet   Market News  

  • Pound remains under pressure on negative UK economic outlook.
  • Euro keeps rising amid expectations of a 75 rate hike from the ECB.
  • EUR/GBP gains momentum after breaking key technical levels.

The EUR/GBP broke above 0.8605 and jumped to 0.8640, reaching the highest level since July 1. The cross remains near the top, with a strong bullish tone as EUR/USD breaks above 1.0050.

The euro is rising for the fourth consecutive day against the pound, accumulating a gain of more than 200 pips. The impressive rally can have more legs to go particularly if EUR/GBP holds above 0.8630. The next resistance stands at 0.8650 followed by 0.8670 and then 0.8720.

Inflation in EZ, fear in UK

Earlier on Wednesday, Eurozone inflation data showed a new record with the annual rate reaching 9.1% (above the 9% of market consensus). The numbers favored expectations of a “jumbo” rate hike of 75 basis points from the European Central Bank at next week’s meeting. Also, more ECB officials offered hawkish remarks. UK and EZ bond yields continue to rise ahead of rate hikes from central banks. European bonds are on track for their worst month ever.

In the UK, the negative economic outlook, the energy crisis and soaring inflation keep hitting the pound. The currency is about to post the biggest monthly drop versus the US dollar since October 2016.

Also weighing on GBP is the cautious tone across financial markets that usually affect the pound more than the euro. Wall Street is flat on Wednesday with main indices at the lowest level in a month while the FTSE 100 is about to end with a 0.70% decline.

Technical levels

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European equity close: Stock markets headed in the opposite direction of the euro
European equity close: Stock markets headed in the opposite direction of the euro

European equity close: Stock markets headed in the opposite direction of the euro

253394   August 31, 2022 23:40   Forexlive Latest News   Market News  

DAX daily

The euro is higher today on the prospects for 75 bps from the ECB next week (now fully priced in) but those rate hikes won’t help the eurozone economy or stock markets.

  • Stoxx 600 -1.0%
  • German DAX -0.9%
  • UK FTSE 100 -1.0%
  • French CAC -1.2%
  • Italy MIB -1.0%
  • Spain IBEX -0.7%

Yesterday’s bounce in the DAX faded hard and with the decline today, we’re back within striking distance of the weekly lows.

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USD/JPY remains subdued around 138.60s ahead of Friday’s US NFP
USD/JPY remains subdued around 138.60s ahead of Friday’s US NFP

USD/JPY remains subdued around 138.60s ahead of Friday’s US NFP

253393   August 31, 2022 23:09   FXStreet   Market News  

  • USD/JPY remains trading within a narrow range as traders brace for August’s US NFP.
  • The US ADP Employment change disappointed, but Chicago’s PMI exceeded estimates.
  • The BOJ would conduct purchasing operations of 10-year JGB notes in September, further confirming its dovish stance.

The USD/JPY is almost in the North American session, unable to crack a fresh YTD high, amidst a dismal sentiment, with US data led by the ADP report below estimates, while the Chicago PMI exceeds estimates. Today’s data, alongside Tuesday’s JOLTs report and consumer confidence, justifies additional tightening by the Fed.

The USD/JPY opened near the day’s highs, around 138.80, and struck a daily low at 138.26. However, buyers stepped and lifted the major towards its daily high at 138.90 before retreating toward current exchange rates. At the time of writing, the USD/JPY is trading at 138.62.

USD/JPY unfazed amid a lack of catalyst

The US ADP report for August showed that private hirings rose by 132K, less than the previous month’s 270K jobs. Worth noting that it’s the first release under a new survey format, so it should not be viewed as a prelude to Friday’s Nonfarm Payrolls report. According to Nela Richardson, ADP Chief Economist, “our data suggest a recent shift towards a more conservative hiring pace,” companies are at an inflection point. She added that hirings could shift from “supercharged job gains” to a more regular cycle.

Later, the Chicago PMI for August increased more than estimated, topping 52.2 vs. 52 expected by analysts.

Earlier, Cleveland’s Fed President Loretta Mester crossed newswires, reiterated her view of the Federal funds rate (FFR) being above 4% by 2023 and “hold it there.” She commented that she does not “anticipate the Fed cutting the FFR next year.”

In the meantime, the US Dollar Index tumbles 0.25% down at 108.547, while the US 10-year benchmark note rate is unchanged at 3.106%, a headwind for the USD/JPY.

Elsewhere, during the Asian session, Japanese retail sales exceeded estimates in July in tandem with consumer and industrial production. Meanwhile, the Bank of Japan (BoJ) announced that it would conduct purchasing operations of 10-year JGB notes, committed to its ultra-loose monetary policy stance.

USD/JPY Key Technical Levels

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Here is why heightened volatility may work against XRP price in September

Here is why heightened volatility may work against XRP price in September

253391   August 31, 2022 23:09   FXStreet   Market News  

  • XRP price delays recovery despite firmly holding onto support at $0.32.
  • Santiment’s Age Consumed on-chain metric foreshadows potentially high volatility as XRP finds a way out of this week’s murky waters.
  • Odds seem to favor bears, but bulls may carry the day if the Stochastic oscillator breaks above a key descending trend line.

XRP price recovery remains elusive despite firmly holding onto support at $0.32. A break above $0.34 appears to be a tall order for the bulls, hence the mundane price action at $0.33. The next few days will be important to the cross-border money remittance token, as observed from Santiment’s Age Consumed on-chain metric.

Previously dormant XRP tokens on the move

The Age Consumed metric by Santiment shows a massive move in previously idle XRP tokens. In addition to tracking token movement, this metric elucidates the number of XRPs changing addresses each day multiplied by the number of days since their last movement. Huge spikes in the metric such as the 890 billion tokens on August 29 point to an incoming volatility period.

Read more: XRP Price Prediction: This bearish continuation pattern could trigger a 70% crash

XRP price is expected to move significantly in the coming days. Traders must carefully examine technical and other fundamental factors to determine the direction XRP price will take.

XRP Age Consumed metric

XRP Age Consumed metric

The daily chart paints a grim picture with the help of the Stochastic oscillator, which is stuck in the oversold region (below 20.00). This means bulls must go the extra mile to reverse the downward trend.

 XRP/USD daily chart

XRP/USD daily chart

A sell signal from the Super Trend indicator affirms the possibility of XRP price carrying on with the downtrend. If this technical index holds above the seventh largest cryptocurrency, recovery to $0.40 is unlikely in the coming days – maybe weeks.

Read more: XRP price trap careless bulls before crashing to $0.28 as Ripple’s legal trouble continues

Key takeaways for XRP price 

According to the Age Consumed metric, heightened volatility will likely engulf XRP price in the first week of September. The international money transfer token must break above $0.34 to affirm its next climb to $0.40. On the downside, it is feared that declines below $0.32 will wipe out all the accrued gains since mid-June.

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Euro ramps up into the final London fix of the month
Euro ramps up into the final London fix of the month

Euro ramps up into the final London fix of the month

253390   August 31, 2022 23:02   Forexlive Latest News   Market News  

Euro demand into the London fix has been a staple over the past week or so and we’re seeing it again today. EUR/USD is at the highs of the day, up 45 pips to 1.0057. It traded as wlow as 0.9972 earlier but has been on the march higher since eurozone CPI data and more calls for 75 bps next week.

We start the new month tomorrow.

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United States EIA Crude Oil Stocks Change came in at -3.326M below forecasts (-1.483M) in August 26
United States EIA Crude Oil Stocks Change came in at -3.326M below forecasts (-1.483M) in August 26

United States EIA Crude Oil Stocks Change came in at -3.326M below forecasts (-1.483M) in August 26

253387   August 31, 2022 22:35   FXStreet   Market News  

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.




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US weekly crude oil inventories -3326K vs -1483K expected
US weekly crude oil inventories -3326K vs -1483K expected

US weekly crude oil inventories -3326K vs -1483K expected

253386   August 31, 2022 22:33   Forexlive Latest News   Market News  

  • Prior was -3282K
  • Gasoline -1172K vs -1178K expected
  • Distillates +111K vs +960K expected
  • Refinery utilization -1.1% vs -0.4% expected
  • Implied gasoline demand m vs 8.43m last week
  • SPR draw of 3.1m vs 8.1m prior

Here’s what the API reported late yesterday:

  • Crude +593K
  • Gasoline -3414K
  • Distillates -1726K
  • Cushing -599K

WTI crude oil was down $1.43 to $90.66 ahead of the data after trading as low as $88.45. The initial reaction was a 20-cent rise higher.

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US weekly oil inventory data up next. Is the implied gasoline demand mystery solved?
US weekly oil inventory data up next. Is the implied gasoline demand mystery solved?

US weekly oil inventory data up next. Is the implied gasoline demand mystery solved?

253385   August 31, 2022 22:29   Forexlive Latest News   Market News  

Weekly oil inventory data is coming up shortly. Eyes continue to be on the strangely low gasoline demand numbers but HFI Reserach may have figured out what’s pushed the numbers to unbelievably low levels. They think the culprit is customs data. The EIA uses it to model gasoline imports/exports and it’s skewed the data and the model.

“The issue here is that if product exports are overstated, then it inherently lowers the “implied” demand domestically. That’s the reason why when EIA understates exports, implied demand jumps and vice versa,” HFI writes.

As for today’s data, the consensus is a draw of 1438k barrels. Here’s what the API reported late yesterday.

  • Crude +593K
  • Gasoline -3414K
  • Distillates -1726K
  • Cushing -599K

I’m closely watching the diesel market as Europe replaces natural gas with it.

CIBC chart

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AVAX price prediction: $22 by Friday, plain and simple

AVAX price prediction: $22 by Friday, plain and simple

253383   August 31, 2022 22:21   FXStreet   Market News  

  • Avalanche price action performs a  technical bounce on Monday during its trading session.
  • On the back of that bounce, AVAX price rallies higher.
  • Backed by the RSI, the bulls have plenty of room to go with not much standing in their way.

Avalanche (AVAX) price is set to jump 10% to 20% on the back of an entry at a simple technical element. On the back of that entry, price action already jumped higher and has printed 17% gains. It could even potentially book 33% if all the stars align. Backed up by the Relative Strength Index (RSI), bulls have plenty of room to push price action higher, with a profit target at either $22.00 or $23.30, bearing 10% to 20% gains from where AVAX price is currently residing.

AVAX bulls preparing for a pop above $22

Avalanche price is already up 2% for the day and 17% overall for the week after bulls used the drop in sentiment to enter on the bounce off a technical pivot level. In this case, bulls entered the test and bounced off the monthly S1. On Tuesday, bulls tried to pump up the price action but were cut short in their attempt as equity markets dropped near the US closing bell. Luckily AVAX price was still able to eke out gains, keeping bulls sticking to their positions and now setting them up for a rally by Friday, that could see AVAX hitting an important level.

AVAX price will likely first hit the $22 marker, a pivotal historical level that intersects with the green ascending trendline that acted as backbone for the summer rally. This level might be a challenge as bulls will want to cash in. Profit-booking will go along with a fade in price action, with the risk of a rejection and price action dropping back to $17.63. Should bulls be able to refrain from taking too much profit, expect to see a breakthrough to $23.30 and the 55-day Simple Moving Average (SMA). 

AVAX/USD Daily chart

AVAX/USD Daily chart

As mentioned in the above paragraph, a rejection against $22 could trigger a big fade or even a pull-back towards the monthly S1 level that triggered the initial jump. Additionally, bears could use that momentum to break the support of the monthly S1 and try to spiral price action towards $14.56. From the point of rejection against $22 towards that $14.56 lower level, that would mean a 33% loss in price value.

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