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US Core PCE Inflation Set to Edge Higher as Markets Anticipate Fed Rate Cut

US Core PCE Inflation Set to Edge Higher as Markets Anticipate Fed Rate Cut Overview: PCE Inflation and the Federal Reserve’s Next Move The United States (US) Bureau of Economic Analysis (BEA) is poised to release the core Personal Consumption Expenditures (PCE) Price Index on Friday at 12:30 GMT. As the Federal Reserve’s (Fed) preferred inflation gauge, the core PCE Index plays a crucial role in shaping market expectations and influencing the US Dollar (USD) trajectory. Markets are closely watching this data release, as it could set the tone ahead of next week’s Nonfarm Payrolls report. Expected Data and Market Implications The core PCE Price Index is expected to rise by 0.2% month-on-month (MoM) in July, maintaining the same pace as in June. On a year-on-year (YoY) basis, core PCE is projected to grow by 2.7%, while the headline PCE inflation is anticipated to tick higher to 2.6% during the same period. This inflation measure excludes volatile food and energy prices, provides a clearer picture of underlying inflation trends and is closely monitored by both the Fed and market participants. Earlier this month, data from the Bureau of Labor Statistics (BLS) revealed that the US Consumer Price Index (CPI) increased by 2.9% YoY in July, with core CPI rising by 3.2% YoY—a slight deceleration from June’s 3.3% increase. These figures, combined with the anticipated PCE data, will heavily influence the Fed’s decisions regarding interest rates. Market Sentiment and Potential Impact on the US Dollar Markets have already fully priced in a rate cut by the Fed in September, with the majority expecting a 25 basis points (bps) reduction. However, if the PCE inflation data comes in hotter than expected, it could challenge these expectations, offering a potential lifeline to the US Dollar, which has been trading near yearly lows against its major rivals. A stronger-than-anticipated PCE reading might dampen hopes for aggressive rate cuts this year, leading to a possible rally in the USD. Conversely, if the core PCE figures show a slower-than-expected increase, the USD could face further downward pressure, potentially leading to a fresh leg higher in the EUR/USD pair. The EUR/USD has been on an uptrend, reaching its highest level in thirteen months, hovering near 1.1200. The initial market reaction to the PCE report may be muted, as traders might prefer to reassess their positions on the last trading day of the week while awaiting next week’s critical US employment data. Technical Analysis: EUR/USD Outlook From a technical standpoint, the EUR/USD pair remains in a bullish trend, provided it stays above the key support level of 1.1107 on a daily closing basis. This level represents the 23.6% Fibonacci Retracement of the August rally, which saw the pair rise from 1.0775 to the 13-month high of 1.1202. The 14-day Relative Strength Index (RSI) continues to trade well above 50, signaling ongoing bullish momentum. To challenge the next psychological resistance level at 1.1250, the EUR/USD pair would need to close above the 13-month high of 1.1202 daily. However, a sustained break below the 1.1107 support could expose the pair to further downside risks, with the next support level aligned at the 38.2% Fibonacci Retracement at 1.1045. Navigating Market Uncertainty As markets brace for the upcoming core PCE inflation data, the potential outcomes present a complex landscape for traders. A hotter-than-expected PCE reading could provide a much-needed boost to the US Dollar, potentially reversing some of its recent losses. On the other hand, weaker-than-expected data might reinforce expectations of a more dovish Fed, leading to further gains for the EUR/USD pair. With the Nonfarm Payrolls report on the horizon, traders will likely approach the PCE data cautiously, understanding that the Fed’s policy direction remains in flux. As the market digests these critical economic indicators, the interplay between inflation expectations, Fed policy, and technical levels will continue to drive currency movements in the days ahead.

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Analysis Currencies Market Forecasts USD/JPY

Japanese Yen Holds Minor Gains Ahead of US PCE Data

Japanese Yen Holds Minor Gains Ahead of US PCE Data Tokyo Inflation Strengthens BoJ’s Hawkish Stance The Japanese Yen (JPY) has shown resilience, appreciating against the US Dollar (USD) following the release of Tokyo’s Consumer Price Index (CPI) data. The increase in Tokyo’s inflation rate has reinforced the Bank of Japan’s (BoJ) hawkish stance on monetary policy, offering support to the JPY and exerting downward pressure on the USD/JPY currency pair. This development comes as markets eagerly await the upcoming US Personal Consumption Expenditure (PCE) Price Index, which could provide further clues on the direction of US interest rates. Tokyo CPI Rises, Boosting Yen In August, Tokyo’s Consumer Price Index (CPI) climbed to 2.6% year-on-year, up from 2.2% in July. The Core CPI, which excludes volatile food prices, also saw an increase, rising to 1.6% YoY in August from 1.5% in July. These figures indicate a steady rise in inflation within Japan’s capital, a trend that strengthens the BoJ’s resolve to maintain its current monetary policy outlook. The Japanese Yen’s gains against the USD can be attributed to this uptick in inflation, as it increases the likelihood that the BoJ will maintain or even tighten its policy to curb inflationary pressures. Japan’s Unemployment Rate Rises In contrast to the rising inflation, Japan’s Unemployment Rate unexpectedly increased to 2.7% in July, up from 2.5% in June and surpassing market expectations. This marks the highest jobless rate since August 2023. While this rise in unemployment could have been seen as a negative indicator for the Japanese economy, it did little to offset the Yen’s strength driven by inflationary concerns. The combination of rising inflation and higher unemployment presents a mixed economic picture, but for now, the focus remains on inflation as the key driver for the BoJ’s policy decisions. US Dollar Holds Steady Amid Strong Economic Data Resilience of the USD Despite the Yen’s strength, the US Dollar has managed to hold its ground, buoyed by stronger-than-expected economic data released on Thursday. The USD/JPY pair, although retracing some of its recent gains, remains underpinned by the USD’s resilience. The US economic indicators, particularly those related to employment and economic growth, have painted a relatively strong picture, which has helped the USD maintain its recent gains against the JPY. US Economic Indicators Boost Dollar On Thursday, the US reported that its Gross Domestic Product (GDP) grew at an annualized rate of 3.0% in the second quarter, surpassing both the expected and previous growth rate of 2.8%. Additionally, Initial Jobless Claims fell to 231,000 for the week ending August 23, slightly below expectations. These figures suggest a robust US economy, which has supported the USD even as it faces pressure from the strengthening Yen. Federal Reserve’s Potential Rate Cut However, the future of the USD remains uncertain, as dovish remarks from the Federal Reserve have introduced the possibility of a rate cut. Raphael Bostic, President of the Federal Reserve Bank of Atlanta, hinted that it might be time to consider a rate cut due to cooling inflation and a rising unemployment rate. Nevertheless, Bostic emphasized the need to wait for confirmation from upcoming economic data before making any decisions. The anticipation of these data releases, including the US PCE Price Index, adds to the uncertainty surrounding the USD’s future trajectory. Market Sentiment and Technical Analysis Market Movers: Anticipation Builds for US PCE Data The market is now looking ahead to the release of July’s US Personal Consumption Expenditure (PCE) Price Index, scheduled for later in the North American session. The PCE data is closely watched as it provides insights into inflationary pressures within the US economy and could influence the Federal Reserve’s next move on interest rates. According to the CME FedWatch Tool, markets are fully pricing in at least a 25 basis point (bps) rate cut by the Fed at its September meeting. This expectation is contributing to a cautious market sentiment, with investors closely monitoring the data for any signs that could alter the Fed’s policy direction. Insights from BoJ and Japan’s Finance Minister On the Japanese side, Bank of Japan (BoJ) Governor Kazuo Ueda has reiterated that he is not considering selling long-term Japanese government bonds (JGBs) as a tool for adjusting interest rates. He mentioned that any reduction in JGB purchases would constitute a minor adjustment to the BoJ’s balance sheet. Meanwhile, Japan’s Finance Minister Shunichi Suzuki commented on the complexity of foreign exchange rates, noting that they are influenced by a variety of factors, including monetary policies, interest rate differentials, geopolitical risks, and market sentiment. These remarks underscore the intricate dynamics that affect the USD/JPY pair, with multiple variables at play. Technical Analysis: USD/JPY Navigates Key Levels USD/JPY Trades Below 145.00 As of Friday, the USD/JPY pair is trading around 144.80, just below the 145.00 level. Technical analysis indicates that the pair is positioned above the downtrend line, suggesting a weakening bearish bias. However, the 14-day Relative Strength Index (RSI) remains above 30, confirming the ongoing bearish trend. The pair’s ability to break above or below key technical levels will likely determine its near-term direction. Support and Resistance Levels On the downside, the USD/JPY pair could test the immediate downtrend line around the 144.50 level. A break below this level could push the pair toward the seven-month low of 141.69, recorded on August 5, with the next support level at 140.25. Conversely, if the pair manages to move above the nine-day Exponential Moving Average (EMA) around 145.15, it could open the door to test the resistance area near 154.50. A Market in Flux The interplay between rising Tokyo inflation, a resilient US Dollar, and the anticipation of critical economic data creates a dynamic and uncertain environment for the USD/JPY pair. As investors await the release of the US PCE Price Index and monitor the Federal Reserve’s potential policy moves, the market remains poised for potential volatility. The technical levels highlighted in the analysis will be crucial in determining the pair’s next move, with both upside and downside risks

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Crypto Crypto News Ethereum News Technical Analysis

Ethereum ETFs Outpace Bitcoin, While BitNance Emerges as a New Alternative

Ethereum ETFs Outpace Bitcoin, While BitNance Emerges as a New Alternative As Ethereum ETFs continue to gain traction and Bitcoin ETFs lose some of their initial momentum, investors are increasingly looking toward new and emerging tokens. The launch of Ethereum ETFs has been a significant development in the cryptocurrency space, marking a shift in investor interest and behavior. Ethereum ETFs Gaining Ground We are now a month into the launch of Ethereum ETFs, and the current data indicates that Ethereum is gradually making headway in the ETF market. While Bitcoin still maintains a dominant position with $49 billion in assets under management, Ethereum ETFs have managed to secure around $7 billion. Although this is a significant difference, the growth of Ethereum ETFs suggests a potential shift in investor sentiment. Bitcoin’s Decline and Market Sentiment Despite the strong push for Bitcoin ETFs, BTC’s price has seen a decline in the past 24 hours, dropping to $59,377 at the time of reporting. This downward trend is causing some investors to explore alternative opportunities in the crypto space. The decline in Bitcoin’s price, despite its large market share, reflects the volatile nature of the cryptocurrency market and highlights the growing interest in other digital assets. Enter BitNance: A New Low-Supply Token Amidst the shifting landscape, a new player has emerged in the form of BitNance (BTN), a low-supply token that operates on the BNB Smart Chain (BSC). BitNance is a store-of-value token with a total supply of 10 million tokens. Of this supply, 5.6 million tokens have been allocated for its presale, 2.75 million are reserved for centralized exchanges, and the remaining tokens will be used as initial liquidity on the listing day. Presale and Expected Market Performance The current presale price for BitNance tokens is set at $0.357, with forecasts suggesting the price could rise to $0.465 once the token is listed on exchanges. This presale offers early investors and adopters a unique opportunity to potentially boost their earnings before the token becomes available to the general public. BitNance’s Conservative Supply Strategy Unlike some projects that explore dynamic supply mechanisms to navigate market fluctuations, BitNance has adopted a more conservative approach by limiting its supply to less than 11 million coins. This strategy is reminiscent of Bitcoin’s original whitepaper design, which aimed to establish long-term stability despite the market’s notorious volatility. As a result, several analysts have drawn comparisons between BitNance and Bitcoin, dubbing BTN the “Bitcoin on Binance Blockchain.” Decentralization and Store of Value The comparison to Bitcoin extends beyond just the supply strategy. Like Bitcoin, BitNance is built on a fully decentralized network, allowing investors to trade and transact without the oversight of a central authority. The founders of BitNance have even renounced control over the contracts, reinforcing the project’s commitment to decentralization. Additionally, BitNance aims to serve as both a cryptocurrency and a store of value, positioning itself as a hedge against inflation—a role that Bitcoin has traditionally filled. BitNance’s Growing Popularity and Future Potential BitNance’s presale has already seen considerable success, with 60,000 tokens sold. This growing interest has put the new coin on the radar of analysts and investors alike. The BitNance team has also hinted at the possibility of introducing a crypto product that uses BTN as the native coin during the final days of the presale, adding to the excitement surrounding the project. The Hype and the Risks While the BitNance project is undoubtedly generating buzz, it is important to approach new projects, particularly those with low supply like BTN, with caution. The volatility of the cryptocurrency market is well-known, and new tokens can be especially susceptible to dramatic price swings. Investors must exercise due diligence and carefully consider the risks before investing in BitNance or any other emerging cryptocurrency. Is BitNance Worth the Hype? The rise of Ethereum ETFs and the emergence of tokens like BitNance reflect the evolving landscape of the cryptocurrency market. As Ethereum begins to carve out its own space in the ETF market and Bitcoin faces declining momentum, new tokens like BitNance are offering alternative investment opportunities. However, while the potential for significant returns exists, the inherent risks in investing in new and low-supply tokens cannot be overlooked. Only time will tell if BitNance lives up to the current hype and establishes itself as a valuable player in the crypto space. Investors should remain vigilant and make informed decisions as they navigate this dynamic and rapidly changing market.

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Commodities Gold Market Forecasts

Gold Prices Rise Amid Nvidia Earnings Disappointment and Revived China Demand

Gold Prices Rise Amid Nvidia Earnings Disappointment and Revived China Demand Gold prices have recently experienced an uptick as markets digest disappointing earnings from tech giant Nvidia and renewed demand from China. The precious metal (XAU/USD) gained approximately half a percent on Thursday, trading around the $2,510 range. This increase is primarily driven by safe-haven inflows as investor sentiment turned slightly negative. Despite Nvidia’s Q2 earnings exceeding expectations, the figures failed to justify the stock’s high valuation, leading to cautious reactions in the market. Nvidia Earnings Become a Macro Event Nvidia’s earnings have evolved into a broader macroeconomic event due to the company’s significant influence within the tech sector. Although the earnings beat estimates, the stock’s valuation is seen as stretched, contributing to a more subdued market response. However, European stocks have begun to recover following a shaky start, indicating a potential shift in overall market sentiment. Revival in Chinese Demand Supports Gold Adding to the upward momentum of gold is the revival of demand from China. Data from the World Gold Council (WGC) earlier this week showed a 17% increase in China’s net gold imports in July, marking the first monthly rise since March. This resurgence in demand from one of the world’s largest gold consumers has provided a solid foundation for the metal’s recent price gains. Gold Benefits from a Weaker US Dollar Gold has also benefited from a weakening US Dollar, a currency to which it is typically negatively correlated. The US Dollar Index (DXY) has been pulling back, trading in the 100.90 range on Thursday, down from a peak of 101.18 reached the previous day. This decline in the dollar has made gold more attractive to investors as a hedge against currency depreciation. Market Focus on US Economic Data Market participants are closely monitoring upcoming US economic data, including Jobless Claims and Gross Domestic Product (GDP) figures, for further insights into the future direction of US interest rates. The jobless claims data is particularly significant, especially after Federal Reserve Chairman Jerome Powell highlighted risks to the labor market from maintaining high-interest rates during his Jackson Hole speech. The GDP data, a revision of the Q2 estimate, is expected to remain steady at 2.8%. Weaker-than-expected data could push gold prices higher, as it would indicate that the Fed may need to lower interest rates sooner than previously anticipated. Interest Rates and Gold’s Appeal Lower interest rates tend to enhance gold’s appeal, as it is a non-interest-bearing asset. Although markets have already priced in a rate cut from the Fed at their September 18 meeting, the size of the cut remains uncertain. According to the CME FedWatch tool, there is a 34.5% probability of a 0.50% “mega cut,” a figure that has remained relatively stable over the past day. December 2024 Fed Rate Cut Speculation The December 2024 Chicago Board of Trade (CBOT) fed funds futures contract, another indicator of future interest rate trends, is pricing in a total of 100 basis points, or 1.00%, in Fed rate cuts by the end of the year. With only three scheduled Fed meetings remaining in 2024, this pricing implies that at least one of these meetings could result in a 0.50% rate cut. Friday’s PCE Inflation Data: A Crucial Indicator Friday could be a pivotal day for gold, as the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, is set to be released. Economists expect core PCE inflation to rise to 2.7% in July from 2.6% in June on a year-over-year basis. A higher-than-expected inflation reading could weaken gold, as it would suggest that the Fed needs to maintain elevated interest rates for a longer period. Conversely, a lower-than-expected result would likely boost gold prices, as it would indicate a potential easing of monetary policy. Risks to Gold: Overcrowded Long Positions Despite the bullish factors supporting gold, there are risks to the current price levels. Daniel Ghali, Senior Commodity Strategist at TD Securities, has warned of extreme long positioning in gold, suggesting that the trade may be overcrowded. “Downside risks are now more potent. The ship is crowded. It has scarcely been as crowded as it is today. Do you have a slot secured on the lifeboat?” Ghali remarked, highlighting the potential for a sharp pullback in prices. Tactical Short Position by TD Securities In a follow-up note on Thursday, TD Securities announced they are entering a tactical short position in gold, with an entry point at $2,533, a target of $2,300, and a stop loss at $2,675. This move reflects their view that the risks of a downside correction have increased, despite the metal’s recent strength. Technical Analysis: Gold’s Mini-Range Consolidation From a technical analysis perspective, gold (XAU/USD) is currently consolidating within a mini-range between $2,500 and $2,531, extending above its previous range. While the short-term trend could be seen as sideways, the medium and long-term trends remain bullish, suggesting that the odds still favor an eventual breakout to the upside. Potential Breakout Targets The breakout from the prior range, which resembles an incomplete triangle pattern, occurred on August 14 and generated an upside target of approximately $2,550. This target is based on the principles of technical analysis, specifically by applying the 0.618 Fibonacci ratio to the range’s height and extrapolating it higher. A break above the August 20 all-time high of $2,531 would confirm a continuation toward the $2,550 target. Conversely, a daily close below $2,470 would negate the upside target and suggest that gold might enter a short-term downtrend. Outlook for Gold As the market navigates these complex dynamics, the outlook for gold remains closely tied to broader macroeconomic developments and investor sentiment. The interplay between rising demand, fluctuating interest rate expectations, and technical factors will likely continue to drive the action of precious metals prices in the coming days.

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Analysis Currencies Technical Analysis USD/JPY

Japanese Yen Gains Momentum as BoJ Hawkish Outlook Contrasts with Fed’s Dovish Stance

Japanese Yen Gains Momentum as BoJ Hawkish Outlook Contrasts with Fed’s Dovish Stance The Japanese Yen (JPY) has been strengthening for the second consecutive day, driven by a series of hawkish remarks from Bank of Japan (BoJ) Governor Kazuo Ueda. This contrasts the dovish tone set by Federal Reserve (Fed) Chair Jerome Powell, creating a divergence in policy outlooks that has led to a depreciation of the US Dollar (USD) against the Yen. BoJ’s Hawkish Shift The appreciation of the Yen began after BoJ Governor Ueda made a significant speech in the Japanese Parliament on Friday. Ueda indicated that the central bank is open to raising interest rates further if economic projections align with expectations. This statement comes on the heels of July’s National Consumer Price Index (CPI) inflation data, which remained at its highest level since February, underscoring the BoJ’s hawkish stance. Japan’s National CPI increased by 2.8% year-on-year in July, marking the third consecutive month at this level and reinforcing the BoJ’s commitment to its inflation-targeting policy. Additionally, the National CPI excluding Fresh Food rose by 2.7%, the highest reading since February, in line with market expectations. This persistent inflationary pressure has added weight to Ueda’s comments, suggesting that the BoJ may need to adjust its monetary policy further to keep inflation under control. In his address to Parliament, Ueda emphasized that the BoJ is “not considering selling long-term Japanese government bonds (JGBs) as a tool for adjusting interest rates.” He clarified that any reduction in JGB purchases would only account for about 7-8% of the balance sheet, a relatively modest decrease. Ueda added that if the economy aligns with their projections, there could be a phase where they might adjust interest rates slightly further, signaling a potential shift in the BoJ’s policy approach. USD/JPY Daily Price Chart Source: TradingView, prepared by Richard Miles US Dollar Under Pressure Meanwhile, the US Dollar has been losing ground, largely due to rising expectations of a rate cut by the Federal Reserve. Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium hinted at a potential shift in policy, with Powell stating, “The time has come for policy to adjust.” Although Powell did not specify the timing or size of potential rate cuts, his comments have fueled speculation that the Fed may lower interest rates as early as September. Traders are now anticipating a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting, with the CME FedWatch Tool indicating that markets are fully pricing in this possibility. The dovish tone set by Powell has been further reinforced by remarks from other Fed officials. For instance, Philadelphia Fed President Patrick Harker emphasized the need for the US central bank to lower interest rates gradually, while Chicago Fed President Austan Goolsbee noted that monetary policy is currently at its most restrictive, with the Fed now focusing on achieving its employment mandate. This divergence in policy outlooks between the BoJ and the Fed has created a challenging environment for the USD/JPY pair. As the Yen strengthens on the back of the BoJ’s hawkish stance, the US Dollar is under pressure due to rising expectations of a Fed rate cut, leading to a decline in the USD/JPY exchange rate. Technical Analysis: USD/JPY The USD/JPY pair has been trading around 143.90, reflecting the impact of these contrasting policy signals. A technical analysis of the daily chart shows that the pair is positioned below a downtrend line, indicating a bearish bias. The 14-day Relative Strength Index (RSI) remains slightly above 30, which suggests that the bearish trend may continue, but there is still some room for a potential rebound. On the downside, the USD/JPY pair could find support around the seven-month low of 141.69, recorded on August 5. A break below this level could open the door for further declines toward the throwback support level at 140.25, a key area that could determine the next phase of the bearish trend. In terms of resistance, the USD/JPY pair faces immediate barriers at the downtrend line around the psychological level of 145.00. A breakthrough above this level could lead the pair to test the nine-day Exponential Moving Average (EMA) at 145.74. If the pair manages to clear this resistance, it could explore the region around the throwback-turned-resistance at the 154.50 level, although this scenario appears less likely given the current market conditions. Market Sentiment and Future Outlook The current market sentiment reflects a cautious approach by traders as they weigh the implications of the BoJ’s hawkish stance against the Fed’s dovish outlook. The contrasting approaches of the two central banks have created uncertainty, with traders closely monitoring upcoming economic data and policy announcements to gauge the future direction of the USD/JPY pair. Bloomberg reported that Philadelphia Fed President Patrick Harker reiterated the need for the Fed to lower interest rates gradually, signaling a cautious approach to policy adjustments. Reuters also highlighted comments from Chicago Fed President Austan Goolsbee, who noted that the Fed’s monetary policy is currently at its most restrictive, suggesting that any future rate cuts will be carefully considered. The US Composite PMI, which edged down to 54.1 in August from 54.3 in July, remains above market expectations of 53.5, indicating continued expansion in US business activity. However, the FOMC Minutes for July’s policy meeting revealed that most Fed officials agreed that a rate cut is likely at the upcoming September meeting, provided that inflation continues to cool. As the Yen continues to gain ground and the US Dollar faces headwinds, traders will be closely watching the next moves by both the BoJ and the Fed. The outcome of these central bank decisions will likely determine the future direction of the USD/JPY pair and set the tone for global currency markets in the coming months.

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Analysis Currencies Market Forecasts News

Forex Today: US Dollar Struggles to Regain Support After Last Week’s Selloff

Forex Today: US Dollar Struggles to Regain Support After Last Week’s Selloff On Monday, August 26, the US Dollar (USD) holds steady against its major counterparts, attempting to recover from the substantial losses it incurred last week. Market participants are keenly watching for key economic data releases, including the IFO sentiment data from Germany, as well as Durable Goods Orders for July and the Dallas Fed Manufacturing Business Index for August from the United States, which are expected later in the day. USD Under Pressure After Powell’s Dovish Remarks The USD faced significant selling pressure on Friday following a dovish speech by Federal Reserve (Fed) Chairman Jerome Powell at the annual Jackson Hole Economic Symposium. Powell emphasized the need for an adjustment in monetary policy, signaling a potential shift in the Fed’s approach. “We will do everything we can to support a strong labor market as we make further progress toward price stability,” Powell remarked, suggesting that the Fed might be preparing for a less aggressive stance in the near future. In response to Powell’s comments, the USD Index dropped 0.8% on Friday, contributing to a 1.7% loss for the week. The benchmark 10-year US Treasury bond yield also fell nearly 1.5%, reflecting market expectations of a more accommodative monetary policy. Early Monday, the 10-year yield remained in negative territory, trading below 3.8%, while the USD Index hovered around 100.70, fluctuating within a tight range. Geopolitical Tensions Add to Market Uncertainty Adding to the market’s cautious tone, geopolitical tensions flared over the weekend as Reuters reported that Hezbollah launched hundreds of rockets and drones at Israel on Sunday. In response, Israel’s military conducted pre-emptive strikes across southern Lebanon to thwart what it described as a large-scale attack by Hezbollah. This escalation of violence has contributed to a risk-off sentiment in the market, with US stock index futures trading marginally lower in the European morning on Monday. EUR/USD and GBP/USD Show Strength Amid USD Weakness The EUR/USD pair gained bullish momentum ahead of the weekend, reaching its highest level in over a year at 1.1200. The pair is now in a consolidation phase, trading at around 1.1180 early Monday. The Euro’s strength has been bolstered by positive economic data and a weakening US Dollar, although traders remain cautious ahead of the release of Germany’s IFO sentiment data, which could influence the pair’s direction. Similarly, the GBP/USD pair extended its rally on Friday, rising above 1.3200 for the first time since March 2022. The British Pound has benefited from the broader weakness of the USD and optimism surrounding the UK’s economic outlook. However, the pair has retreated slightly in the European morning, trading just below 1.3200 as traders take profits and reassess the market’s direction in light of upcoming US economic data. USD/JPY Continues to Decline The USD/JPY pair remains under bearish pressure at the start of the week, following a more than 1% decline on Friday. The pair is trading deep in the red, below 144.00, reflecting the ongoing strength of the Japanese Yen. Earlier in the day, data from Japan showed that the Leading Economic Index edged higher to 109.0 in June from 108.6 in May, indicating a slight improvement in Japan’s economic outlook. This positive data has further supported the Yen, contributing to the USD/JPY pair’s continued decline. Gold Surges Amid Market Uncertainty In the commodities market, Gold surged higher on Friday, closing the week above $2,500 per ounce. The precious metal has continued its upward trajectory in the European morning, closing in on $2,520. Gold’s rally has been driven by a combination of factors, including the weakening USD, lower US Treasury yields, and heightened geopolitical tensions, which have increased demand for safe-haven assets. Looking Ahead As the week progresses, market participants will closely monitor several key economic data releases that could impact the USD’s direction. The IFO sentiment data from Germany will provide insights into the health of the Eurozone’s largest economy, while US Durable Goods Orders and the Dallas Fed Manufacturing Business Index will offer clues about the strength of the US economy. The USD’s ability to regain support will largely depend on the outcomes of these data releases, as well as any further commentary from Fed officials that could provide additional clarity on the central bank’s policy direction. In the meantime, the USD is likely to remain under pressure, with traders exercising caution in the face of ongoing geopolitical risks and economic uncertainty.

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Analysis Crypto Ethereum Technical Analysis

Ethereum Resilience A Price Surge Amid Jump Trading Sell-Off ETF Inflows and a Looming Death Cross

Ethereum Resilience A Price Surge Amid Jump Trading Sell-Off ETF Inflows and a Looming Death Cross Ethereum has recently shown impressive resilience, with its price continuing to recover despite significant selling pressure from major trading firms and bearish technical indicators. On Wednesday, Ethereum’s price reached a high of $2,753, marking its highest point since August 4 and a notable 30% increase from its lowest point this month. This recovery comes even as Jump Trading, a significant player in the crypto market, resumed offloading substantial amounts of Ether, raising questions about the factors driving Ethereum’s price resurgence. Jump Trading’s Sell-Off and Its Impact Jump Trading, a well-known trading firm in the cryptocurrency space, has been actively selling its Ether holdings over the past few weeks. According to data from LookOnChain, Jump Trading recently claimed 17,049 Ether tokens, valued at approximately $46.4 million, from the staking platform Lido and promptly sold them. This sell-off followed a broader trend observed over recent weeks, contributing to Ethereum’s sharp decline during the market’s “Black Monday,” when the cryptocurrency saw a more severe drop compared to Bitcoin and other digital assets. Despite this selling pressure, Ethereum’s price has rebounded alongside other major cryptocurrencies, including Bitcoin, which also experienced a significant recovery, rising to $61,000. The combined market capitalization of all cryptocurrencies increased to $2.15 trillion, reflecting a broader recovery in the market. Ethereum’s ability to rise in the face of substantial sell-offs suggests underlying strength and confidence among investors. Jump Trading’s Remaining Holdings Even after significant liquidations, Jump Trading still holds a substantial amount of Ether and related assets. Data from Arkham Intelligence reveals that the firm retains 24,919 Ether tokens, 28,735 staked Ether (stETH) tokens, and 675 wrapped Ether (wETH) coins. In total, Jump Trading’s holdings are valued at over $423 million. The firm’s continued possession of these assets indicates that while they are selling, they still maintain a significant stake in Ethereum, which may signal a level of confidence in the cryptocurrency’s long-term potential. Spot Ethereum ETFs Drive Inflows A key factor contributing to Ethereum’s recent price surge is the renewed interest in spot Ethereum Exchange-Traded Funds (ETFs). According to data from SoSoValue, spot Ether ETFs recorded net inflows of over $24.3 million, suggesting that investors are increasingly returning to these financial instruments as a means of gaining exposure to Ethereum. BlackRock’s Ethereum ETF has been a major beneficiary of this trend, with assets under management reaching $843 million following an influx of $49.1 million. If the current trend continues, BlackRock’s Ethereum ETF could surpass the $1 billion mark soon, further solidifying its position in the market. Other funds, such as Fidelity’s FETH, also saw positive inflows, accumulating $5.4 million in assets, while Invesco’s QETH fund reached $813,000. However, not all ETFs have shared in this success. Some funds, such as those managed by Bitwise, VanEck, and Franklin Templeton, reported no inflows on Tuesday. Grayscale’s Ethereum Trust, despite its long-standing presence in the market, saw significant outflows, with over $31 million withdrawn. Despite these challenges, Grayscale’s trust still manages $981 million in assets, bolstered by its competitive fee structure. Technical Risks: The Death Cross While Ethereum’s price recovery has been impressive, there are still significant risks on the horizon. One of the most concerning technical indicators is the formation of a “death cross” on Ethereum’s daily chart. This pattern occurs when the 50-day Simple Moving Average (SMA) crosses below the 200-day SMA, which happened on August 7. Historically, this pattern is considered a bearish signal and often precedes further downside in an asset’s price. For Ethereum to confirm its upward momentum and negate the bearish implications of the death cross, it needs to overcome a crucial resistance level at $2,833. This level has served as a significant price point in recent months, marking the lowest swing in April, May, and July. It is also the neckline of a slanted triple-top pattern, making it a pivotal area for determining future price direction. Conversely, if Ethereum fails to maintain its current momentum and drops below last week’s low of $2,114, it would indicate that bears have regained control, potentially leading to further declines. Such a scenario would confirm the death cross as a harbinger of more downside risk, putting Ethereum’s recent gains at risk. Ethereum’s recent price performance highlights the complex dynamics at play in the cryptocurrency market. Despite significant selling pressure from Jump Trading and the formation of a bearish death cross pattern, Ethereum has managed to rally, buoyed by strong inflows into spot Ethereum ETFs and broader market recovery. However, the path ahead remains uncertain, with key resistance levels and technical indicators suggesting that the coming weeks will be critical in determining Ethereum’s next move. Investors will need to keep a close eye on these developments as Ethereum navigates the challenges and opportunities that lie ahead.

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Analysis Analyst Picks Crypto News News

Changpeng Zhao Transition to a Halfway House What It Means for Binance and the Crypto World

Changpeng Zhao Transition to a Halfway House What It Means for Binance and the Crypto World Changpeng Zhao, widely known as CZ, the former CEO of Binance, has been at the center of one of the most significant legal battles in the crypto industry. Recently, Zhao was transferred from a prison facility to a halfway house managed by the Residential Reentry Management (RRM) office in Long Beach, California. This move has sparked a wave of speculation and rumors across the crypto community, with many questioning whether Zhao has been released from custody. However, despite these rumors, the truth is that Zhao remains under strict supervision as he continues to serve his sentence. The Move to a Halfway HouseThe transfer of Zhao to a halfway house is a standard procedure for inmates nearing the end of their sentences. The RRM Long Beach facility is designed to help individuals transition back into society by providing them with a structured and supervised environment. This move does not signify Zhao’s release from custody; rather, it reflects a shift in the conditions of his confinement as he approaches his scheduled release date. Crypto Community ReactionsCrypto Twitter, a platform known for its rapid dissemination of news and speculation, was abuzz with the false notion that Zhao had been released from all forms of custody. The rumors quickly gained traction, with some even suggesting that Zhao might return to the helm of Binance. However, these speculations were quickly debunked. Federal inmate trackers were updated to show that Zhao is indeed at the RRM Long Beach facility, confirming that he remains under custody, albeit in a different setting. Legal Context and SentencingChangpeng Zhao’s legal troubles began when he pleaded guilty to violating U.S. anti-money laundering laws. These charges led to a significant legal resolution in late May, where Zhao stepped down as CEO of Binance. The resolution also included a hefty $4.3 billion fine imposed on Binance, with Zhao personally agreeing to pay an additional $50 million fine. As part of the settlement with the U.S. government, Zhao has been barred from managing Binance for three years, marking a significant shift in the leadership of one of the world’s largest cryptocurrency exchanges. Zhao’s sentence, which he began serving in late May, is set to conclude on September 29. Until then, he remains under strict supervision, with the transition to the halfway house serving as a step toward reintegration into society. The halfway house environment is less restrictive than a prison but still requires Zhao to adhere to a strict set of rules and regulations. The Impact on BinanceZhao’s legal troubles and subsequent stepping down as CEO have undoubtedly impacted Binance. As the face of the exchange, Zhao’s leadership was instrumental in propelling Binance to the forefront of the crypto world. His absence has raised questions about the future direction of the company, particularly in the face of ongoing regulatory scrutiny. The $4.3 billion fine imposed on Binance is one of the largest penalties ever levied against a cryptocurrency exchange. This fine, coupled with the legal restrictions placed on Zhao, has forced Binance to rethink its strategies and operations. The exchange has been under intense scrutiny from regulators worldwide, with concerns about its compliance with anti-money laundering laws being a primary focus. The new lawsuit filed by crypto traders accusing Binance of enabling money laundering through insufficient regulatory practices adds another layer of complexity to the company’s challenges. While Binance has maintained that it is committed to complying with all relevant regulations, the legal battles it faces suggest that the exchange will need to make significant changes to regain the trust of both regulators and users. Zhao’s FutureAs one of the wealthiest figures in the crypto industry, Zhao’s fall from grace has been swift and significant. The legal restrictions placed on him, including the three-year ban from managing Binance, mean that Zhao will be unable to return to his previous role in the company for the foreseeable future. However, given his influence and resources, it is unlikely that Zhao will entirely disappear from the crypto scene. The transition to a halfway house marks a new phase in Zhao’s journey, one that will likely see him focusing on rebuilding his reputation and navigating the post-sentence landscape. Whether he will return to a leadership role in the crypto industry remains to be seen. Still, his case serves as a stark reminder of the challenges and risks associated with operating in the rapidly evolving cryptocurrency world. Changpeng Zhao’s move to a halfway house has sparked a flurry of speculation and rumors, but the reality is that he remains under custody, continuing to serve his sentence for violating U.S. anti-money laundering laws. As Binance faces ongoing legal challenges and regulatory scrutiny, the crypto world will be watching closely to see how Zhao’s situation unfolds and what it means for the future of one of the largest cryptocurrency exchanges.

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Commodities Gold Market Forecasts

Gold Rallies Off Key Support as Powells Jackson Hole Speech Looms

Gold Rallies Off Key Support as Powells Jackson Hole Speech Looms Gold (XAU/USD) has rebounded strongly after finding critical support near the $2,470 level, positioning itself above $2,490 on Friday. This recovery comes as traders and investors anticipate a significant speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium, which could heavily influence the future of U.S. monetary policy and, by extension, the direction of gold prices. The precious metal’s resurgence is underpinned by a weaker U.S. Dollar (USD) and declining U.S. Treasury yields, both of which typically bolster gold as a non-interest-bearing asset. Market Dynamics: Gold Supported by a Weaker Dollar and Mixed Economic Data Gold’s recent rally can be largely attributed to its inverse relationship with the U.S. Dollar. As the USD weakens, gold typically strengthens, as the precious metal becomes more attractive to holders of other currencies. The current downturn in the dollar is partly due to declining long-term U.S. Treasury yields, which signal market expectations of future interest rate cuts by the Federal Reserve. While short-term yields, such as the 3-month U.S. Treasury note, have seen a slight uptick, the broader yield curve’s downward trend indicates that the market is pricing in lower rates ahead, a scenario that historically benefits gold. The backdrop for gold’s movements also includes a mixed bag of U.S. economic data. On Thursday, gold experienced a drop of over 1.0%, partially due to reduced expectations of a large rate cut by the Fed in September. According to the CME FedWatch tool, the probability of a 0.50% rate cut has decreased from the mid-30% range to the mid-20% range. This recalibration is influenced by a combination of mixed Purchasing Manager Index (PMI) data and jobless claims figures, as well as cautious comments from some Fed officials. The preliminary S&P Global Composite PMI for August fell slightly to 54.1 from 54.3 in July, which was better than the expected decline to 53.5. Within this, the Manufacturing PMI dropped significantly to 48.0 from 49.6, falling into contraction territory, while the Services PMI rose to 55.2 from 55.0, defying forecasts of a decline to 54.0. Meanwhile, jobless claims data painted a mixed picture. Initial jobless claims increased to 232,000, slightly above expectations, but continuing claims were marginally lower than anticipated, although still higher than previous levels. XAU/USD Daily Price Chart Source: TradingView, prepared by Richard Miles Powell’s Speech: A Crucial Moment for Gold’s Outlook The primary focus of market participants now is Powell’s upcoming speech at the Jackson Hole Symposium, a key event that could provide significant clues about the Fed’s future monetary policy. Powell is widely expected to confirm the market’s expectations of a rate cut at the September 18 meeting. Should he signal a more aggressive easing stance, it could provide a further boost to gold prices, as lower interest rates generally reduce the opportunity cost of holding non-yielding assets like gold. Conversely, if Powell strikes a more hawkish tone or downplays the likelihood of significant rate cuts, gold could face renewed selling pressure. The precious metal’s recent volatility underscores the delicate balance in the market’s expectations, with any shift in sentiment potentially leading to sharp moves in gold prices. Technical Analysis: Gold’s Uptrend Intact, but Reversal Risks Emerge From a technical perspective, gold’s recent pullback to $2,470 represents a key test of support at the top of its previous trading range. The metal’s subsequent bounce suggests that this level is holding as strong support, allowing gold to continue its upward trajectory. Despite the recent pullback, the short-term trend remains bullish, with gold’s ability to stay above this support level reinforcing the “trend is your friend” mantra that favors long positions over short ones. Gold’s breakout from its previous range on August 14 generated an upside target near $2,550, calculated using the 0.618 Fibonacci ratio of the range’s height. This target represents the minimum expectation for a follow-through move based on standard principles of technical analysis. As long as gold remains above the $2,470 support level, this target remains in play, with the overall outlook for the metal continuing to be positive. However, the risks of a near-term reversal have increased, particularly if gold fails to maintain its position above key support levels. A break back inside the previous range, confirmed by a close below $2,470 (the low of August 22), would negate the upside target and cast doubt on the short-term uptrend. Such a move could signal a shift in market sentiment, potentially leading to further downside for gold. Nevertheless, the broader outlook for gold remains bullish on medium and long-term timeframes. The metal continues to trade in a broad uptrend, supported by ongoing economic uncertainty, geopolitical risks, and expectations of a more dovish Fed policy. As such, any near-term weakness in gold may be viewed as a buying opportunity by long-term investors who remain confident in the metal’s ability to serve as a hedge against economic instability and inflation. Awaiting Powell’s Verdict As the market awaits Powell’s speech at the Jackson Hole Symposium, gold is positioned at a critical juncture. The speech has the potential to either reinforce the metal’s recent gains or trigger a fresh round of volatility. Investors should remain cautious, keeping an eye on both the technical levels and the broader economic indicators that could influence the Fed’s next move. Whether gold continues its ascent towards $2,550 or faces a pullback will likely hinge on the signals coming from Jackson Hole, making this a pivotal moment for the precious metal.

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Analysis EUR/USD Technical Analysis

EUR/USD Holds Key Support as Markets Await Powell’s Jackson Hole Speech for Rate Guidance

The EUR/USD currency pair shows resilience as it holds steady above the key support level of 1.1100, with the US Dollar (USD) exhibiting weakness ahead of Federal Reserve Chair Jerome Powell’s highly anticipated speech at the Jackson Hole Symposium. EUR/USD Holds Key Support as Markets Await Powell’s Jackson Hole Speech for Rate Guidance. This speech, scheduled for 14:00 GMT, has traders and investors on edge as they await fresh guidance on interest rates for September and the outlook for the remainder of the year. EUR/USD Movement and Market Sentiment In the European session on Friday, EUR/USD managed to recover slightly, reaching near 1.1120. This follows a corrective move from a fresh year-to-date high of 1.1174 on Thursday. The pair’s rise comes as the US Dollar resumes its recent trend of weakening, despite a brief recovery earlier in the week. Traders remain cautious ahead of Powell’s speech, with many looking for clues on the Federal Reserve’s future monetary policy direction. The US Dollar Index (DXY), which measures the USD’s value against a basket of six major currencies, has dropped to around 101.30. This decline comes after a recovery from a more-than-seven-month low of 101.00 to nearly 101.60 on Thursday. The USD’s bounce earlier in the week was driven by the flash US S&P Global PMI report for August, which indicated stronger-than-expected business activity, particularly in the services sector, while the manufacturing sector continued to contract. EUR/USD Daily Price Chart Source: TradingView, prepared by Richard Miles Powell’s Speech and Market Expectations All eyes are on Jerome Powell’s speech at the Jackson Hole Symposium, as market participants eagerly await any indications regarding the future path of interest rates and the broader US economic outlook. According to the minutes from the Federal Open Market Committee (FOMC) meeting held on July 30-31, a “vast majority” of officials believe that if economic data continues to align with expectations, it may be appropriate to ease monetary policy at the next meeting. This has fueled speculation about the potential size of interest rate cuts in September. The possibility of a “soft landing” for the US economy is also a key focus for investors. Recent data, such as the July Nonfarm Payrolls (NFP) report, which showed a slowdown in labor demand and an increase in the unemployment rate to 4.3%, has heightened fears of a potential recession. Despite this, there is cautious optimism that inflationary pressures are on track to return to the Federal Reserve’s 2% target. While Powell is not expected to lay out a predetermined path for interest rates, many analysts anticipate that he may signal that rate cuts are likely in September, particularly given the dual mandate of managing inflation and employment risks. EUR/USD Market Movers and Technical Outlook The EUR/USD’s slight recovery from the 1.1100 support level reflects investor confidence in the Euro, despite the broader underperformance of the currency against other major peers. This underperformance is largely attributed to growing expectations that the European Central Bank (ECB) will cut interest rates again in September. Such expectations are supported by ongoing uncertainty surrounding the Eurozone’s economic outlook and signs of easing wage pressures. The flash Eurozone HCOB PMI report for August, released on Thursday, showed a rise to 51.2, exceeding expectations and indicating that overall business activity is expanding. However, the positive PMI data is believed to be temporary, driven by strong demand related to the upcoming Olympic Games in Paris, rather than indicative of a broader, sustained recovery. Consequently, uncertainty about the Eurozone’s economic performance in the coming months remains high. In particular, Germany, the Eurozone’s largest economy, continues to face significant challenges. The PMI data highlighted a sharp decline in business activity, primarily due to a substantial drop in foreign demand, with no signs of recovery on the horizon. This has led to calls for additional stimulus measures to boost demand. Adding to the case for ECB rate cuts is the sharp decline in Q2 Negotiated Wage Rates, which grew at a slower pace of 3.55% compared to 4.74% in the first quarter. This deceleration in wage growth has eased concerns about persistent inflation, making it more likely that the ECB will opt for further rate cuts. ING economists noted that the ECB has been hesitant to cut rates while wage growth remained elevated, but the latest data may alleviate some of these concerns. From a technical perspective, EUR/USD remains supported above the 1.1100 level, with investors closely monitoring Powell’s upcoming speech. The currency pair has maintained a bullish outlook, following a breakout from a channel formation on the daily chart. All short-to-long-term Exponential Moving Averages (EMAs) are trending higher, reinforcing the strong uptrend. The 14-day Relative Strength Index (RSI) is currently in the bullish range of 60.00-80.00, indicating strong upside momentum, though it is approaching overbought levels. Should EUR/USD decisively break above the December 28, 2023, high at 1.1140, Euro bulls could target the next round-level resistance at 1.1200. On the downside, the 1.1100 level remains a crucial support zone, with a break below this level potentially signaling a shift in sentiment. In summary, the EUR/USD is navigating a complex landscape of economic data and central bank expectations, with Powell’s speech likely to set the tone for the coming weeks. Investors are bracing for potential volatility, as the market digests new information and reassesses the outlook for both the Euro and the US Dollar.

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