In this article, we have covered the highlights of global market news about the XAG/USD, Bitcoin/Ethereum, Australian Dollar, and Canadian Dollar.
XAU/USD: Forecast for Gold and Silver Prices Not promising at all
With the USD rising, Gold (XAU/USD) has been falling for days. Given how the Dollar is now behaving (bullish), precious metals may face even more significant difficulties. There may be a little respite, but it seems that sellers will benefit for the time being.
To put the breakout from the channel back in play, Gold will need to demonstrate some tenacity here very soon and pivot back towards the most recent high at 1808 and soar over it. That being said, the channel line will quickly be tested as support; therefore, now would be a good moment for Gold to begin retracing its downward trend.
For the time being, keep an eye on how a countertrend move develops to see whether more weakening is anticipated. The assumption is that there will be additional weakening after a slight rebound and that significant support will be tested below 1680.
Currently, the 18.12 low (XAG/USD) is taking a beating, and it increasingly seems as if it will be reached and maybe surpassed. This price movement is indicative of a market that is beginning a new leg down rather than one that is just retracing.
Bitcoin/Ethereum Outlook: Fed Weighs Down on BTC/USD and ETH/USD
Cryptocurrency markets continue to be affected by the same fundamental forces that have been influencing markets since the invasion of Ukraine. Rate expectations have lately seemed to be the primary driver of market activity, with oil costs, soaring inflation, and depressed mood weighing on risk assets.
The publication of the FOMC minutes on August 17 indicated that the Federal Reserve would continue to pursue QT (quantitative tightening) by hiking rates aggressively until inflation has been subdued after being rejected by the $25,000 barrier level late last week. This increases the danger to the more significant crypto industry while bolstering the Dollar as a haven currency.
The launch of ETH 2.0, which would complete the switch to a proof of stake (PoS) network, is anticipated on September 15. Ethereum has completed its six-week uptrend and is heading toward its July low of $1,656 since the merger is expected to cut the energy required for processing transactions.
Australian Dollar Outlook Is Bearish Due to US Dollar Surge and China Problems
Over the previous week, the Australian Dollar fell more than 3% against the US Dollar, pushing the AUD/USD rate to its lowest point since July 21. Selling was prompted by a safe-haven-fueled US Dollar surge as Fed pivot expectations began to fade. Still, AUD declined relative to most of its major peers, including the British Pound, Euro, and Japanese Yen.
A July employment report provided conflicting information. Despite the 40,900 jobs lost in Australia last month, the country’s unemployment rate surprisingly decreased to 3.4%. In the second quarter, wages increased 2.6% from a year earlier, above the 2.7% Blomberg average but falling short of the 2.4% level. Updated purchasing managers’ indexes for the manufacturing and service sectors will be released next week.
Higher rates often help a currency. However, currency market participants are betting against the AUD. Net positioning on AUD decreased to -59,248 according to the CFTC’s Commitments of Traders (COT) report, which was published on Friday. Since early March, it has been the most significant net short position. For shorts, a new lower-low from July offers a tempting target.
CAD/JPY and USD/CAD Rates Outlook Technical Analysis of the Canadian Dollar
Across the board, the main currencies have enjoyed a favourable month for the Canadian Dollar. However, the two major CAD crosses are telling opposite tales: the CAD/JPY and the USD/CAD prices are rising. While the Bank of Canada still plans to raise interest rates, markets are pricing a less aggressive BOC by the end of 2022 than they were a month ago. Overall, this might mean that both the USD/CAD and CAD/JPY exchange rates will stay rangebound for the foreseeable future.
The CAD/JPY exchange rate has been trading sideways for over three months, with resistance and support between 107.50 and 101.50, respectively. With the pair above its daily 5-, 8-, 13-, and 21-EMA envelopes in consecutive bullish sequences, momentum continues to increase. Daily Slow Stochastics are once again in overbought territory, while daily MACD is on the brink of crossing over its signal line. A return to the highs set in June and July is possible, but the likelihood of a long-lasting uptrend is in danger from a more major risk-off move in the global equities markets.
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