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EUR/USD consolidates gains above 1.1100 ahead of key events
EUR/USD stays in positive territory above 1.1100 in the second half of the day on Monday. The upbeat risk mood and growing expectations for a dovish Fed outcome this week weigh on the US Dollar and help the pair hold its ground.
GBP/USD extends rally to 1.3200 area
Following Friday's choppy action, GBP/USD gathers bullish momentum and trades at a fresh 10-day high near 1.3200. Ahead of the Fed's and the BoE's policy announcements, the US Dollar stays under pressure, allowing the pair to push higher.
Gold consolidates gains near fresh all-time highs
Gold trades in a narrow range above $2,580 after touching a new record-high near $2,590 earlier in the day. The benchmark 10-year US Treasury bond yield holds above 3.6% ahead of the Fed meeting and makes it difficult for XAU/USD to find direction.
Five Fundamentals for the week: Fed overtowers pivotal week for Gold, stocks and the US Dollar Premium
The Fed's first rate cut stands out as economic uncertainty mounts. US Retail Sales and Jobless Claims are of high interest. Rate decisions by central banks in the UK and Japan are also pivotal.
DEEPER DIVE
Eurozone: Towards structurally higher savings
The household savings rate in France has risen further, up from 17.6% of households’ gross disposable income (GDI) in Q1 2024 to 17.9% in Q2 2024, according to the INSEE, i.e. 1 point more in a year.
Faster route to ‘normality’
Over the summer, the focus of the Fed has shifted from a singular emphasis on curbing inflation to now discussing the risk of causing significant damage to the labour market.
From fear of inflation to fear of slowdown
We agree with markets that slowing US inflation over the summer has cleared the path for a faster "normalisation" of policy rates in the US. Especially the broader services price pressures have eased.
FXS Signals
Technical Confluences Detector
XAU/USD consolidates gains near fresh all-time highs Premium
Gold price reached a fresh record high of $2,589.50 a troy ounce on Monday, retreating just modestly from the level and now trading at around $2,582.00 in the American session. XAU/USD surged during Asian trading hours, helped by a resurgent Japanese Yen (JPY), which put pressure on the US Dollar against all major rivals.
The USD/JPY pair fell to its lowest in over a year as investors keep an eye on the interest rate difference between the United States (US) and Japan, as both central banks are meant to announce their monetary policies this week. The Federal Reserve (Fed) is widely anticipated to cut the benchmark interest rate by 25 basis points (bps) on Wednesday, while the Bank of Japan (BoJ) will likely move in the opposite direction on Friday. The US Dollar also fell in anticipation of the Fed’s announcement, as there is a chance the central bank will go for a larger rate cut.
CRYPTOCURRENCIES
Bitcoin extends correction below the $60,000 level
Bitcoin extends correction and erases Friday’s gains after being unable to hold above the psychologically important $60,000 level over the weekend. Since Saturday’s opening, BTC erased nearly 3% of its value and trades near $58,500 at the time of writing on Monday.
PEPE slides as whales lose interest, traders engage in profit-taking
PEPE (PEPE) posts losses for a third consecutive session on Monday as on-chain metrics show a sharp decline in large-volume transactions from whales and a spike in profit-taking in the last six days.
European crypto fund founder calls Tether $118 billion scam
Founder of Cyber Capital, Europe’s oldest crypto fund, criticized Tether for their reserves and said there has been no audit since 2021. In a tweet thread on X, Justin Bons supports his stance on the stablecoin firm with statistics.
XRP re-listing on Robinhood could fuel double-digit price rally, push XRP to $0.66
Ripple (XRP) is back on the commission-free exchange Robinhood per the official website of the platform. Users can currently watch XRP price chart, the altcoin is yet to be listed for trading.
STOCKS
Boeing misses out on Fed cut rally as workers strike for first time in 16 years Premium
The market has reached euphoria on Friday, but Boeing (BA) is the Dow Jones stock most left out of the rally. A major strike, the first in a decade and a half, has brought further uncertainty to the aeronautics company beset by a slew of internal issues.
Short squeeze, anyone?
One more day of S&P 500 gains extension almost to the neckline of Sunday discussed inverted H&S. Rate cut odds went up with discretionaries rallying on better than expected UoM consumer confidence and inflation expectations.
ECONOMIC CALENDAR
WEEKLY FORECAST
EUR/USD: Ladies and Gentlemen, here comes the Federal Reserve Premium
The EUR/USD pair reverted early losses and finished just below the 1.1100 mark, little changed for the week. The pair bottomed at 1.1001 mid-week, as the USD benefited from a risk-averse environment.
GBP/USD: Pound Sterling capitalizes on increasing odds of large Fed rate cut Premium
The Pound Sterling stalled its correction from over two-year highs against the USD and staged an impressive comeback, with the GBP/USD pair having tested the critical 1.3000 threshold.
US Dollar: Extra weakness should not be ruled out Premium
The pessimism around the US Dollar (USD) intensified in the latter part of the week, sending the US Dollar Index (DXY) back into negative territory for the second consecutive time on the weekly chart.
Gold: Bulls dominate as markets reassess odds of a large Fed rate cut Premium
Gold surged higher in the second half of the week and reached a new record high above $2,580, boosted by growing expectations for a large Fed rate cut at the upcoming policy meeting.
Bitcoin: On the road to $60,000
Bitcoin price retested and bounced off from the daily support level of $56,000 this week. US spot Bitcoin ETFs posted $140.7 million in inflows until Thursday and on-chain data supports a bullish outlook.
Week ahead – Fed to cut interest rates, BoE and BoJ to remain on hold
Investors are split between a 25 and 50bps Fed rate cut. BoE expected to stand pat, but resume cuts in November. BoJ to also stay on hold, focus to fall on future hike signals.
