Forex Trading Tools and Services

Currencies EUR/USD

EUR/USD Surges on Waning Trade War Risks and ECB Rate Cut Expectations

  • BY
  • February 5, 2025
  • 0 Comments

EUR/USD is trading above 1.0400 as the US Dollar drops on the back of dwindling fears of a full-blown trade war between the US and China. The investors are of the view that the extent of the trade war will remain restricted, thereby easing the risk premium on the Greenback. Meanwhile, the European Central Bank is expected to continue cutting interest rates, reinforcing market speculation about further policy easing. Even though the Euro underperformed against other major currencies, EUR/USD continues to gain as traders focus on upcoming US economic data, including the ADP Employment Change and ISM Services PMI. Technical indicators are showing cautionary signals; however, important resistance lies at 1.0500, while support stands close to 1.0177, so the pair is in a vulnerable recovery phase. KEY LOOKOUTS • US ADP Employment Change and ISM Services PMI for January would have implications on the Federal Reserve’s future monetary policy decisions. • The European Central Bank is expected to continue reducing interest rates, with traders pricing in three more rate cuts in upcoming policy meetings. • Market sentiment remains cautious as the US and China impose tariffs, though investors believe the trade war will not escalate further globally. • EUR/USD faces key resistance at 1.0500, while major support levels lie at 1.0177 and 1.0100, shaping the pair’s near-term price action. Investors are keeping a close eye on key developments affecting EUR/USD, such as US economic data releases due in the coming days, like the ADP Employment Change and ISM Services PMI, which may help guide the Federal Reserve’s policy course. On the other hand, the European Central Bank continues to cut interest rates, with the market awaiting more cuts given its confidence in inflation returning to target levels. Trade tensions between the US and China remain a problem, but the relatively narrow scope of the situation had pushed fears over a full-scale global trade war to the backburner, diminishing the risk premium on the US Dollar. In technical terms, EUR/USD remains vulnerable to a critical resistance level at 1.0500 and may find support at 1.0177 and 1.0100 to determine the next direction. EUR/USD continues to gain as fears of a trade war ease and ECB rate-cut expectations weigh on the US Dollar. Investors await key US economic data, including the ADP Employment Change and ISM Services PMI, which could influence the Fed’s policy stance. Meanwhile, technical resistance at 1.0500 and support at 1.0177 will shape the pair’s near-term direction. • The pair goes higher as the US Dollar weakens on the back of more alleviated trade war concerns and reduced risk premium. • US ADP Employment Change and ISM Services PMI would be out and could impact the Federal Reserve’s policy outlook. • Interest rate cuts are expected by the European Central Bank and monetary policy easing is already priced in the markets. • Investors believe that the trade war will not spread across the globe and see fears of an economic slowdown. • President Trump lets loose on the EU: Tariffs are in the cards. Adds to EUR’s unclear direction. • The level remains a strong barrier for EUR/USD, and a breach above can be seen as a further sign of bullish strength. • These levels become significant support downwards, and their breach can be used as a sign of renewed bearish pressure on the pair. It is now a fledging currency as EUR/USD surged above 1.0400 after a weak US Dollar amid slight improvements in the trade war concerns and eventually in wait of further interest rate cuts by the European Central Bank (ECB). Investors are keenly awaiting key US economic data, including ADP Employment Change and ISM Services PMI, which may provide direction to future policy decisions by the Federal Reserve. The US Dollar Index (DXY) has declined as market participants assume that the trade war between the US and China will remain limited in scope, reducing the Greenback’s risk premium. However, concerns persist about potential tariff threats from President Trump on the European Union, which could impact the Euro’s stability in the coming weeks. EUR/USD Daily Price Chart TradingView Prepared by ELLYANA On the technical front, EUR/USD faces significant resistance at the 1.0500 level, which, if breached, could signal further bullish momentum. Meanwhile, key support levels at 1.0177 and 1.0100 provide downside protection, with a break below these points potentially leading to renewed bearish pressure. The European Central Bank’s continued monetary easing stance has also weighed on the Euro, as traders anticipate further rate cuts to support economic stability. As investors find their way through these macroeconomic and geopolitical changes, EUR/USD continues to trade in a volatile range, waiting for more directional signals from upcoming economic data and policy decisions. TECHNICAL ANALYSIS EUR/USD is still in a cautious recovery mode, trading just below the 50-day Exponential Moving Average (EMA) at 1.0440, which indicates that the trend is still bearish. The pair is facing strong resistance at the psychological level of 1.0500, and a decisive break above this could trigger further bullish momentum. Meanwhile, the 14-day Relative Strength Index (RSI) oscillates within the neutral 40.00-60.00 range, suggesting a lack of strong directional bias. On the downside, key support levels are observed at 1.0177 and 1.0100, with a break below these levels potentially leading to increased bearish pressure. EUR/USD remains stuck in a trading range as the market fundamentals continue to be analyzed by traders and wait for the right trigger that will take the currency pair on its next major move. FORECAST If EUR/USD breaks above 1.0500, there is still potential for further gains. A continuation of the trend beyond this point could lead to a bullish surge to the psychological resistance at 1.0600. Positive Eurozone economic data in combination with a softer US Dollar, which is being traded down on expectation of the Federal Reserve to cut rates, may continue fueling buying. Moreover, if risk-on sentiments persist and concerns of trade tensions between US and China keep dwindling, investors may prefer the Euro, hence continuing to

Read More
Commodities Silver

Silver Price Forecast: XAG/USD Jumps to Three-Month Highs as Risk-Off Sentiment Increases, Global Trade Uncertainties Rise, Hits $32.38

  • BY
  • February 5, 2025
  • 0 Comments

Silver prices have increased to a three-month high of $32.38. Increasing risk-off sentiment due to global trade and economic uncertainties has been the cause of this surge. In the recent past, with China introducing fresh tariffs on US imports, the tensions between the US and China have raised the demand for the safe-haven assets, including Silver. Silver is also being catalysed further by the US Dollar technical pullback. In addition to major central banks, including the ECB, BoC, and PBoC, turning dovish, the threat of US Federal Reserve rate cuts will continue to make Silver an appealing asset. The market now awaits US Nonfarm Payrolls (NFP), which might dictate the Federal Reserve’s next move in terms of monetary policy and the future of Silver. KEY LOOKOUTS • Ongoing fresh tariffs from China over US imports further fuel market uncertainty, increasing demand for safe-haven Silver as concerns grow over global economics. • Technical pullbacks in the US Dollar, DXY, are a positive facilitator for Silver due to a weaker USD making the metal more desirable among investors. • Dovish monetary policies by major central banks, including a potential rate cut by the Fed, work to increase appeal for Silver as the non-yielding safe-haven asset. • The upcoming NFP report will be crucial in shaping the Fed’s interest rate decisions, potentially influencing Silver’s price direction. Silver prices continue to gain momentum as global economic uncertainties and trade tensions between the US and China drive demand for safe-haven assets. The weakening US Dollar, experiencing a technical pullback, has further supported Silver’s bullish trend, making it more attractive for investors. The dovish policies of major central banks, including the expected rate cuts from the Federal Reserve, have further increased the appeal of Silver as a non-yielding asset. Market participants now look forward to the US Nonfarm Payrolls (NFP) data, which may significantly influence the policy direction of the Federal Reserve and may further affect the price trajectory of Silver in the coming sessions. Silver prices are growing as the rest of the global trade tensions strengthen and a US Dollar weakening strengthens demand for a safe haven, while dovish central bank policies further increase attractiveness to Silver; investors await an upcoming US Nonfarm Payrolls data to seek direction. • XAG/USD hits $32.38 because of safe haven demand rising among global economic fears. • China takes new tariffs for US imports by imposing new fees, fueling risk-off risk and strengthening prices for Silver. • A technical pullback in the US Dollar (DXY) makes Silver more attractive to investors. • Rate cuts and easing policies from major central banks, including the Fed, ECB, and BoC, make Silver more attractive. • Markets expect at least two Fed rate cuts this year, which may push non-yielding assets like Silver higher. • The jobs report next week may affect Fed policy decisions and Silver’s price trend. • Investors continue to seek safe-haven assets such as Silver amid ongoing geopolitical and economic risks worldwide. Silver prices have moved to a three-month high of $32.38, influenced by growing global trade uncertainties and a risk-off market sentiment. The ongoing US-China trade tensions, with China imposing fresh tariffs on US imports, have increased demand for safe-haven assets like Silver. At present, the current technical pullback of the US Dollar has created more room to push Silver even higher. And with the recent dovish tones from the Fed, ECB, and other main central banks on interest rates cuts, the asset is gaining support as a no-yielding haven. XAG/USD Daily Price Chart TradingView Prepared by ELLYANA Market participants have been keenly observing the soon-to-be-reported US Nonfarm Payrolls that may be critically influential in affecting the Federal Reserve’s future policy on monetary money. A rather weak jobs report would make more probable Fed’s rate cuts further driving Silver upward, and, conversely, a strong jobs report could help limit the ascent. Widespread global growth concerns such as trade disruption, slowing down further, are enhancing demand for silver as a means of hedging against uncertainty. As investors balance these factors, Silver is well positioned for additional volatility in the coming sessions. TECHNICAL ANALYSIS Silver (XAG/USD) remains highly bullish, trading near its three-month high at $32.38. Here, major technical indicators indicate more upside to be seen in this metal, as it has already broken above the resistance of $32.00 and transformed the same into a key support area. The Relative Strength Index is still in the bullish zone but is approaching overbought levels, so a short-term consolidation may be expected before another leg higher. The 50-day and 200-day moving averages are in a sustained uptrend, as the price remains well above both. If Silver continues its uptrend, then $32.80 and $33.50 are the next resistance levels to watch, while a downside correction may find support at $31.80 and $31.50. Traders will be keeping a close eye on market sentiment and economic data for confirmation of the ongoing bullish trend. FORECAST Silver’s bullish momentum is strong as it trades near its three-month high of $32.38, with multiple factors supporting further gains. The weakening US Dollar, along with expectations of Federal Reserve rate cuts, is boosting investor interest in non-yielding assets like Silver. Besides geopolitical tensions- the US-China trade war, in particular and slow-down in world economies also promote safe haven. If silver sustains at this level and breaches above $32.00 then next on cards are the marks of $32.80 and $33.50. This might pull price up and surpass resistance toward a psychological $34.00 in case of affirmation of a dovish US Federal Reserve’s monetary policy posture within the forthcoming months. Silver’s strong uptrend may face the risk of taking profits and technical corrections. With the Relative Strength Index (RSI) closing in on the overbought territory, the pullback cannot be ruled out. If it fails to sustain above the support level of $32.00, it might face downward pressure with key supports at $31.80 and $31.50. A more robust US Nonfarm Payrolls (NFP) report or hawkish communications from the Federal Reserve

Read More
Commodities Gold

Gold hits record high on fears of US-China trade war and Fed rate cut speculations

  • BY
  • February 5, 2025
  • 0 Comments

Gold has reached a fresh all-time high of $2,862 on fears of an intensifying US-China trade war and growing expectations of further cuts in the Federal Reserve’s interest rates. Safe-haven demand continues to remain strong as investors react to China’s retaliatory tariffs against the US and signs of a weakening US labor market. This would further push down the US dollar, further propelling gold upwards, although President Trump’s delay in imposing tariffs on Canada and Mexico does take a bit off the edge from risk. With the breakout above $2,800 despite technical conditions that show overbought, traders still have plenty of room for a higher run-up. Today will be more on US economic releases such as ADP employment and ISM Services PMI while Friday’s NFP report is highly anticipated. KEY LOOKOUTS • Gold reached a high of $2,862 from US-China trade war fears and Federal Reserve rate cut expectations, solidifying high safe haven demand. • Potential Fed rate cuts and weaker US labor market data kept the USD under pressure, resulting in further bullish momentum for XAU/USD. • Uncertainty persisted following China’s retaliatory tariffs on US imports; otherwise, gold prices would have collapsed in the face of Trump’s temporary tariff relief for Canada and Mexico. • Investors will look at US ADP employment data, ISM Services PMI, and Friday’s Nonfarm Payrolls report for the immediate direction of the gold price. Gold has reached a record $2,862 as investors take shelter from increasing US-China trade war tensions and expectations of more Federal Reserve rate cuts. The softening US labor market, as marked by the decline in job openings, has continued to ignite rumors for further monetary relief, pressing down on the US currency and pushing up demand for the non-yielding yellow metal. While risk aversion remained slightly subdued after President Donald Trump delayed tariffs on Canada and Mexico, China’s retaliatory tariffs kept uncertainty elevated in the market. Traders now await key economic reports, including the US ADP employment data and ISM Services PMI, with Friday’s Nonfarm Payrolls report expected to influence gold’s short-term trajectory. Despite the overbought RSI signaling caution, technical support near $2,830 and $2,800 suggests potential buying opportunities, reinforcing the metal’s bullish momentum. Gold prices surged to a record high of $2,862 amid US-China trade war fears and Fed rate cut expectations. Weak US labor market data pressured the USD, boosting gold’s safe-haven appeal. Traders now await key economic reports, with technical support near $2,830 and $2,800 signaling potential buying opportunities. • Gold price hit an all-time peak of $2,862 amid escalating US-China trade war concerns and safe-haven demand. • The USD has come under pressure as the Fed has reduced its expectations on the fed rate cut, coupled with the slowdown in the US labor market. • China’s imposition of tariffs on imports from the US intensified trade tensions, which bolstered demand for gold as an investment against uncertainty. • A brief reprieve of US tariffs on Canada and Mexico eased risk concerns but failed to dent gold’s strong bullish sentiment. • Investors are keeping an eye on the US ADP employment report, ISM Services PMI, and Friday’s Nonfarm Payrolls for market-moving signals. • Overbought RSI calls for caution, but strong support near $2,830 and $2,800 indicates continued buying interest in gold. • The breakout above $2,800 confirms the upward trend of gold, and investors are looking for further gains amid ongoing economic uncertainties. Gold prices have touched fresh all-time highs at $2,862 as investors run to safety amid growing US-China trade war fears and expectations of further Federal Reserve rate cuts. Chinese retaliatory tariffs on US imports have recently heightened their concerns over economic instability in the global economy and are pushing up demand for this yellow metal as a safe haven. Moreover, softer US labor market indicators, such as the job openings, have created an expectation that the Fed might maintain its dovish stance with monetary policy easing. This, in turn, has exerted downward pressure on the US dollar, and therefore gold has further strengthened its bullish trend. Though Trump has offered some relief by temporarily suspending tariffs on Canada and Mexico, this hasn’t dented the appeal of gold in a risk-averse scenario. XAU/USD Daily Price Chart TradingView Prepared by ELLYANA Traders are now closely watching upcoming economic data, including the US ADP employment report and ISM Services PMI, for short-term market direction. However, the focus remains on Friday’s Nonfarm Payrolls (NFP) report, which could influence the Fed’s rate decision and, consequently, gold prices. From a technical perspective, the overbought RSI signals a potential pullback, but strong support near $2,830 and $2,800 suggests buying interest remains intact. The recent break above the $2,800 level further enhances the bullish direction, as traders expect more rise in the coming days due to uncertainty in world markets. TECHNICAL ANALYSIS Gold is now in a firm uptrend as it has taken out the main resistance level at $2,800. As such, its bullish trend remains intact. Meanwhile, the Relative Strength Index is overbought on both the daily and the hourly charts. There is strong support seen close to the areas of $2,830 and $2,800 that could work as a buying zone in case prices fall back. A strong move above $2,862 could open doors for further upsides toward $2,900 whereas breaks below $2,800 might trigger deeper retracement toward the $2,772 support zone. Traders must monitor price action at these important levels and soon-to-be released economic data to confirm the continuation of the trend. FORECAST The robust bullish momentum that gold has must be taken advantage of, given the persistence of geopolitical tensions and economic uncertainty. The US-China trade war rages on while expectations of a further cut by the Federal Reserve in interest rates continue to bolster the yellow metal’s safe-haven appeal. If gold manages to stay above that important $2,800 key support level, then the possibility of breaking through to a level around $2,900 increases. Further upside can also come in due to the softness in the labor market,

Read More