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

Product: XAU/USD

Prediction: Increase

Fundamental Analysis: 

During the New York trading session and early Thursday in Asia, spot gold dropped nearly $40, falling below $2,400. On Wednesday, spot gold briefly rose above $2,430 due to a weaker dollar and expectations of a Fed rate cut in September. However, it lost all gains due to profit-taking by traders and rising U.S. Treasury yields, closing down 0.51% at $2,396.86. Gold then fell sharply below $2,400. The U.S. 10-year Treasury yield increased by two basis points to 4.274%, which is unfavourable for gold. Traders are now awaiting the U.S. Q2 GDP data on Thursday and the PCE price index on Friday, the Fed's preferred inflation measure.

Technical Analysis: 

The RSI is still bullish, but it's flattening, indicating buyers and sellers lack direction. On the downside, if gold falls below the July 22 low of $2,384, a deeper correction is possible. The next support level is the 50-day Simple Moving Average (SMA) at $2,359. If sellers push gold below the 100-day moving average at $2,315, it could drop further to $2,300. Gold needs to break above Wednesday's high of $2,430. If it does, the next resistance is $2,450, then the all-time high of $2,483 per ounce, and finally targeting $2,500.

Product: EUR/USD

Prediction:Decrease

Fundamental Analysis: 

EUR/USD fell to new lows near $1.0820, close to the important 200-day Simple Moving Average (SMA). However, it later recovered to around 1.0850, helped by small gains in German 10-year bund yields. The euro also weakened due to disappointing Manufacturing and Services PMI data from Germany and the eurozone in July. This data showed that business activity in the region is struggling to improve.

Technical Analysis: 

For EUR/USD, the next key support level is the 200-day Simple Moving Average (SMA) at $1.0816, followed by the June low of $1.0666. If it breaks the May low of $1.0649, it might drop further to the 2024 low of $1.0601. On the upside, the first resistance is the July high of $1.0948, followed by the March high of $1.0981, and the important $1.1000 level. Overall, the positive outlook remains if the pair stays above the 200-day SMA.

Product: USD/JPY

Prediction: Decrease

Fundamental Analysis: 

On Thursday, during the early Asian session, the USD/JPY pair is under selling pressure around $153, its lowest in three months. The expectation that the Bank of Japan (BoJ) will cut interest rates next week is giving some support to the Japanese Yen (JPY). The focus on Thursday will be on the advanced US Gross Domestic Product (GDP) for the second quarter. Factors from the US, such as a mixed S&P Purchasing Managers Index (PMI) for July and a dovish stance from the Federal Reserve (Fed), are likely to add selling pressure on the USD.

Technical Analysis: 

The USD/JPY pair is turning bearish, suggesting it might test lower prices. Sellers have the advantage, indicated by the Relative Strength Index (RSI), which could become oversold if the pair continues to fall. The first support level is the May 3 low at $151.86. If it drops below this, the next target is the October 21, 2022, peak at $151.94, which has now become support. On the other hand, if buyers want to regain control, they need to push the pair back up to $156.00.

Product: BTC/USD

Prediction: Decrease

Fundamental Analysis: 

All funds have been distributed to the creditors of the once-largest crypto exchange, Mt. Gox. However, this hasn't increased Bitcoin's volatility, suggesting that the recipients are not in a hurry to sell, contrary to some analysts' expectations. Similarly, the launch of the Ether Spot ETF didn't create much excitement for Ether, indicating that the market is in a wait-and-see mode. On a positive note, the Ether Spot ETF saw a net inflow of $106.6 million on its first day, even though Grayscale's newly converted Ether Trust Fund experienced an outflow of $485 million.

Technical Analysis: 

Bitcoin has been consolidating for a while, showing that buyers and sellers are unsure about the next move. The longer the range, the stronger the trigger needed for a breakout. Bitcoin is still trading sideways between $56,552 and $73,777, suggesting buying at support and selling near resistance. The 20-day Simple Moving Average (SMA) at $61,887 is trending upward, and the Relative Strength Index (RSI) is positive, favouring buyers in the short term. Buyers will try to push the price up to $73,777 but might face strong resistance at $70,000 and $72,000. On the downside, if support at $65,000 breaks, Bitcoin might fall to the moving averages. This is a key support level for buyers to defend, as breaking it could open the door to $60,000.

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