Forex Markets 9th May 2024

CURRENCIES:

Gold Price Analysis (XAU/USD):

• Sentiment: Bearish
• Recent Trends: Gold prices have fallen for two consecutive sessions, nearly erasing the gains made in Monday’s rally. The market has been trading sideways for the past two weeks, indicating uncertainty among traders.
• Key Levels:
  • Resistance: $2,355, with a breakout potentially leading to $2,415.
  • Support: $2,280, with a breach possibly driving prices down to $2,260 and potentially $2,225.

USD/JPY Analysis:

• Recent Performance: Prices have risen, breaking through resistance at 154.65.
• Potential Scenarios:
  • Bullish: Prices could climb toward 158.00 and may test the 160.00 level, although intervention by Tokyo could reverse any gains.
  • Bearish: If prices decline, support could be found at 154.65 and 153.15, with further potential drops toward 152.00.

EUR/USD Forecast:

• Current Performance: The pair saw a slight decline, threatening a key support level.
• Critical Support: 1.0750. A decisive breach could lead to a pullback toward 1.0725 and 1.0695.
• Resistance Levels:
  • Immediate Resistance: 1.0790, followed by 1.0820, in line with the medium-term downtrend.
  • Further Gains: Prices could advance toward 1.0865, representing the 50% Fibonacci retracement of the 2023 drop.

STOCK MARKET:

• Inflation Concerns: Addressed the extended timeline needed to bring inflation down to target levels.
• Current Economic Policies: Emphasizes flexibility, without a predetermined path, to adapt to economic changes.
• Supply Chain and Economic Growth: Improvements in supply chains have helped curb inflation, but further economic growth will be needed to lower demand and inflation.
• Recent Fed Statements:
  • John Williams (New York Fed President): Supports keeping policy steady to maintain stability.
  • Neel Kashkari (Minneapolis Fed President): Suggests rates may stay high longer than expected, but is open to further hikes if inflation nears 3%.
• Recent Fed Decisions:
  • Interest Rates: Maintained at 5.25%-5.50%, the highest in 23 years.
  • Monetary Policy Impact: Described as “moderately restrictive,” balancing the risks between early rate cuts and continued restrictions.
• Economic Observations and Forecasts:
  • Inflation Trends: Inflation rates stagnated over the first three months of the year after previous declines.
  • Future Rate Adjustments: No cuts expected until there is sustainable progress toward a 2% inflation rate.
• Collins’ Economic Outlook:
  • Labor Market and Wage Growth: Keeping an eye on wage increases that are not inflationary and a balanced job market.
  • Productivity Insights: Recent productivity gains may be temporary, not long-term trends.

CRYPTOCURRENCIES:

• Bitcoin: Slight change at $62,341
• Ether: Increased 1.71% to $3,000

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