News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • #2020election polls continue to show Democratic nominee Joe Biden maintaining a strong lead #Trump Supreme Court nomination may throw a wrench into bipartisan stimulus talks #AUDUSD is trading at former resistance-turned-support. What happens if it breaks? https://www.dailyfx.com/forex/fundamental/article/special_report/2020/09/27/AUDUSD-Analysis-Ahead-of-Presidential-Debate-Supreme-Court-Nominee-Battle-.html
  • USD/MXN pushes higher as a long-awaited correction in the US Dollar gets underway. Get your #currencies update from @HathornSabin here: https://t.co/QMpun4KOgO https://t.co/KAYojshy0P
  • Emotions are often a key driving force behind #FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here:https://t.co/eILWbFgHRE https://t.co/KXMefr6a3r
  • Join analyst @DavidJSong at 6:30 PM ET/10:30 PM GMT for your weekly update on key news trading events. Register here: https://t.co/gBlrRpCc55 https://t.co/5FwNLSVYje
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EDT on DailyFX! https://t.co/lxd5fZnn4H
  • EUR/USD fell sharply last week and there are few signs yet that the selling is over. However, a bounce is likely before the decline resumes. Get your #currencies update from @MartinSEssex here: https://t.co/BxglKuKVhj https://t.co/8nJQXhUTHI
  • The week ahead has many systemic issues that take control of the markets, but scheduled data is heavily skewed to the Dollar. Here is my video for the week ahead: https://www.dailyfx.com/forex/video/daily_news_report/2020/09/26/SP-500-Break-Risk-and-Dollar-Charge-Sees-Accelerants-Next-Week.html?ref-author=Kicklighter&QPID=917719&CHID=9?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/PL3KZhn1HV
  • GBP turbulence persists as investors eye the next round of EU-UK Brexit negotiations. Cautious optimism signals a deal is near. Get your #currencies update from @PaulRobinsonFX here: https://t.co/WjU4oYpmf7 https://t.co/QJp3jpS3Ui
  • The AB=CD pattern is simple once you know how to spot it and draw the proper Fibonacci retracements. Make your trading strategy as simple as ABCD here: https://t.co/AKmlmaAZBS https://t.co/ukvZfr6BXf
  • BoE’s Tenreyro says evidence on negative rates are “encouraging” Meanwhile, STOXX Europe Banks Index resides at all time lows https://t.co/bBYcLrtXhj
USD Soars on Fed, Gold Price Cleared Support on Less Dovish Powell

USD Soars on Fed, Gold Price Cleared Support on Less Dovish Powell

2019-07-31 23:00:00
Daniel Dubrovsky, Analyst
Share:

Asia Pacific Market Open Talking Points

  • US Dollar, bond yields soar as Federal Reserve surprises less dovish and S&P 500 sinks
  • Anti-fiat gold prices fell, increasing risk of a top after rising support from June gave way
  • Asia Pacific markets may follow Wall Street lower as USD gains extend, AUD weakens

Not sure where gold is heading next? Check out the third quarter fundamental and technical forecast!

Fed Disappoints as Financial Markets Succumb to Risk Aversion

For the first time since 2008, the Federal Reserve has reduced benchmark lending rates in the world’s largest economy. Yet the US Dollar and government bond yields rallied, picking up pace as Chair Jerome Powell held his press conference after the 25 basis point rate cut. Based on his commentary and voting by policy setters, it was clear that the markets were left wanting more on a less-dovish central bank.

The most notable point that Mr Powell arguably made was that Wednesday’s action was not the beginning of a lengthy cutting cycle. This is even as the central bank pauses the unwinding of its balance sheet two months early on August 1. Rather, their actions had more to do with being preventative maintenance to sustain growth that is at risk to global uncertainties, trade wars and inflation undershooting estimates.

Equities took a hit, with the S&P 500 clearing a near-term rising support channel. This is also despite US-China trade talks concluding in Shanghai. Markets were unimpressed, as anticipated, when earlier today the two nations reported discussed topics such as agricultural trade and the US reported negotiations as “constructive”. Meanwhile, anti-fiat gold prices sunk as the appeal of non-interest-bearing assets faded.

Gold Technical Analysis

Taking a closer look at XAU/USD, the precious metal once again finds itself under the near-term rising support line from June. As mentioned in this week’s gold technical forecast, confirming further closes below this trend line opens the door to a top that has been in the making since the Bearish Engulfing candlestick earlier in July. The next area of support from here appears to be 1381.91, just under March 2014 highs.

To add to this bearish argument, the latest readings from IG Client Sentiment are offering a gold-bearish contrarian trading bias. To learn more about how to use sentiment in your own trading strategy, join me each week on Wednesday’s at 00:00 GMT as I uncover what IG Client Sentiment has to say about the prevailing trends in financial markets and follow me on Twitter here @ddubrovskyFX for timely updates!

XAU/USD – Chart of the Day

USD Soars on Fed, Gold Price Cleared Support on Less Dovish Powell

Chart Created in TradingView

Thursday’s Asia Pacific Trading Session

With that in mind, S&P 500 futures are pointing notably lower heading into Thursday’s Asia Pacific trading session. This may translate into further risk aversion which may benefit the anti-risk Japanese Yen and highly-liquid US Dollar. The pro-risk Australian Dollar is thus left vulnerable as it also eyes upcoming Caixin Chinese Manufacturing PMI data given the RBA’s data-dependent approach.

FX Trading Resources

--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES