Market Overview
This week is packed with major economic events, leading to increased volatility:
Tuesday: Australian cash rate announcement, BOE Governor Bailey’s speech, and Canadian CPI data.
Wednesday: Australian Wage Price Index release, New Zealand cash rate decision, British CPI data, and a speech from former U.S. President Trump.
Thursday: FOMC meeting minutes, Australian jobs data, and U.S. unemployment data.
Friday: A highly eventful day, featuring RBA Governor Bullock’s speech, British retail sales, Flash Manufacturing & Services PMI (U.K. & Europe), Canadian Core Retail Sales, a speech from BOC Governor Macklem, and U.S. Manufacturing & Services PMI.
Given the packed schedule, expect high volatility. Stay alert and adjust trades accordingly.
Market Analysis
Gold
Gold remains consolidated near all-time highs with little movement from the previous session. No significant changes are observed in this market. Fed Governor Michelle Bowman emphasized that she needs stronger evidence of inflation declining before considering rate cuts, particularly given the uncertainty surrounding the Trump administration’s potential policy shifts. Quantitative forex models suggest that gold remains a preferred hedge against economic uncertainty.
Silver
Silver has moved as expected, with price action consolidating around the EMA200 and previous swing low. RSI and MACD are providing no clear direction at the moment, but if gold continues its upward momentum, silver is likely to follow. Compounding forex profits through silver investments remains a viable strategy.
DXY
The dollar saw little performance yesterday, but the MACD is picking up volume while the RSI indicates increased buying pressure. This suggests the potential for a bullish continuation toward the EMA200. Fed Governor Christopher Waller suggested a pause in rate cuts unless inflation follows a similar trend to 2024. Michelle Bowman reinforced the need for patience before lowering rates, while Philadelphia Fed President Patrick Harker supported holding rates steady amid a strong economy. Traders are now looking ahead to the FOMC minutes release and Trump’s speech on Wednesday for further policy direction. Regulated MetaTrader platforms provide insights into how DXY movement impacts forex markets.
GBPUSD
The pound has been gaining bullish momentum, with the MACD preparing to shift and the RSI reflecting extreme bullish sentiment after bouncing from oversold conditions. Market expectations remain bullish, although resistance at 1.26163 remains a key level to watch.
AUDUSD
The Australian dollar saw little movement yesterday due to low trading volume, but signs of recovery are emerging, as indicated by the MACD. The current sell-off appears oversold, with 0.63407 acting as a key support level. Forex scalping automation may be beneficial for traders navigating short-term fluctuations in the Aussie dollar.
NZDUSD
The Kiwi is showing increased selling momentum, reflected in price action and the MACD. However, RSI is at extreme oversold levels, which could signal a potential reversal. If selling momentum continues, RSI may normalize soon, but overall, price action remains bullish unless the market crashes below the EMA200 and 0.56869.
EURUSD
The euro remains in consolidation above 1.04672, with no changes in market outlook until further price action provides more clarity.
USDJPY
The yen is rebounding, testing the previous lower swing high and the EMA200, driven by renewed dollar strength as traders anticipate inflationary pressures this year. The RSI is signaling potential selling pressure with overbought readings, while the MACD shows low but gradually increasing volume. Despite this rally, overall price action remains bearish. Hedging with multiple currencies can be a risk management strategy for traders involved in USDJPY trades.
USDCHF
The Swiss franc reversed expectations, gaining strength as price rebounded above 0.90054. Recent Fed comments have fueled renewed bullish sentiment for the dollar, but with RSI calling overbought conditions, the MACD shifting back toward selling, and price action still bearish, a confirmed downtrend needs further validation.
USDCAD
The Canadian dollar remains supported at 1.41774 with minimal reaction to recent developments, leaving market expectations unchanged.
COT Reports Analysis
AUD – WEAK (4/5)
GBP – WEAK (2/5)
CAD – WEAK (4/5)
EUR – WEAK (5/5)
JPY – STRONG (5/5)
CHF – WEAK (4/5)
USD – STRONG (5/5)
NZD – WEAK (5/5)
GOLD – STRONG (4/5)
SILVER – STRONG (4/5)
By leveraging quantitative forex models, traders can enhance their decision-making process and optimize trading efficiency. Additionally, compounding forex profits remains a strategic approach in fluctuating markets, helping traders maximize their returns while mitigating risks. Incorporating forex scalping automation and executing trades on regulated MetaTrader platforms can further provide an edge in this dynamic forex landscape. Moreover, employing hedging with multiple currencies can serve as a risk management technique to protect against market fluctuations.
Stay tuned for further updates on market trends and technical insights!