Today's analysis: XAUUSD Likely to Decline Amid Fed Rate Cut Speculation

Product:XAU/USD

Prediction: Decrease

Fundamental Analysis:

The XAU/USD could not keep up its rebound and is moving within a narrow range. Over the past week and a half, gold has stayed in a familiar trading range. Traders want to know when the Federal Reserve might start cutting interest rates before making new bets. On Tuesday, weaker U.S. retail sales data suggested that American consumers are showing signs of weakness. This has increased the bets that the Federal Reserve will cut rates for the first time in September and again in December. After U.S. Treasury yields fell overnight, the dollar is still on the defensive, giving some support to gold.

Technical Analysis:

Buyers need to wait for XAU/USD to rise above the 50-day SMA, currently resistance at $2,344-$2,345. If successful, gold might reach the $2,360-$2,362 supply zone, then $2,387-$2,388, and possibly $2,400. On the downside, the $2,300 level could limit immediate drops, with additional support at $2,285. A fall below this level might continue the recent decline from record highs, potentially lowering gold to the next support area around $2,254-$2,253. This movement reflects traders' caution as they await clearer signals on interest rate cuts from the Federal Reserve.

Product: EUR/USD

Prediction: Increase

Fundamental Analysis:

The EUR/USD exchange rate remains stable, but ongoing political risks and financial worries are putting pressure on the euro. Because of this, EUR/USD lacks the momentum for a significant rebound. The European Commission will announce which countries will face excessive financial loss procedures, likely impacting European market sentiment. Italy and Poland have already said they will be on the list, and media reports suggest five more countries, including France, will face similar actions.

Technical Analysis:

The EUR/USD exchange rate is currently struggling to rise above $1.0750 because of resistance at the 200-hour EMA of $1.0767. However, the daily price patterns suggest it might go up to the 200-day EMA near 1.0800. The first level of support is at $1.0667, followed by another at $1.0649. The Relative Strength Index (RSI) has increased to 52, indicating there's still some potential for the market to increase.

Product: USD/JPY

Prediction: Increase

Fundamental Analysis:

The USD/JPY pair is trading near a seven-week high around $158.00 in Wednesday's European session. The rally has paused due to uncertainty about the Federal Reserve's interest rate decisions and the upcoming release of Japan's National Consumer Price Index (CPI) data for May, which will be published on Friday. This week's key factor for the Japanese Yen will be the National CPI data. The annual National CPI, excluding fresh food, is expected to rise to 2.6% from the previous 2.2%.

Technical Analysis:

The Relative Strength Index (RSI) is still positive, helping buyers. The first important level they need to break is the June 17 high of $158.25. If they succeed, the next targets are the April 26 high of $158.44 and then the highest point this year at $160.32. On the other hand, if the USD/JPY falls below $157.00, sellers will aim for the first support level at $156.16, followed by $155.52.

Product: US Oil

Prediction: Increase

Fundamental Analysis:

Due to a U.S. holiday, the market is relatively quiet. Weak U.S. retail sales data has increased expectations that the Federal Reserve will cut interest rates this year, causing the dollar index to fall and supporting oil prices. A Ukrainian drone attack set fire to an oil terminal at a major Russian port. Israel's Foreign Minister, warned that a full-scale war is near. These events have raised concerns that regional conflicts could disrupt oil supplies from major producers.

Technical Analysis:

WTI US Crude Oil has paused its upward move after reaching $72.45. It has finished in the positive for seven out of the last eleven trading days and has moved above the 200-day Exponential Moving Average (EMA) at $78.84. However, if the buying strength weakens, the price could fall back below the 200-day EMA, leading to another decline and dropping below a downward trendline from 2024's high of around $87.00 per barrel.

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