Your Economic Rundown

Market Overview

Further rate cut anticipations may push the dollar down, as traders eye another jumbo cut this coming November. Traders are now pricing in a 59% chance of a 50-basis point cut at the Fed‘s Nov. 7 meeting, up from 37% a week ago, and a 41% chance of a 25-basis point reduction, according to the CME Group’s FedWatch Tool.

However, in recent trading, the U.S. dollar rallied against a basket of major currencies, including the euro, as data showed sales of new U.S. single-family homes fell less than expected in August.

It is also important to keep in mind the war happening in the Middle East, as this could shift market rate expectations. Further rate declines, despite lower supply and increased demand, could create dire conditions. With that in mind, we continue to monitor the market closely, aiming to hit our targets.

In Australia, CPI y/y is currently at 2.7%, in line with analysts' expectations. However, near-term rate cuts are unlikely, limiting the downward movement of the Aussie dollar. The outlook for the Australian economy is uncertain, with contrasting indicators and the Reserve Bank of Australias aggressive stance on inflation. Markets now anticipate a modest interest rate cut of only 0.25% in 2024, marking a shift from previous expectations of more significant easing.

Market Analysis

GOLD - Gold has remained stagnant within the zones we‘ve drawn and is currently consolidating. We’re waiting for further breaks. However, market expectations of additional rate cuts and escalating tensions in the Middle East will likely put upward pressure on gold, explaining the persistent support zone at 2653.515.

SILVER - Silver is trading around 31.472 and is poised to continue its upward momentum. Current market conditions suggest the potential for more buying.

DXY - The dollar‘s bounce has shown significant strength growth, though there’s still room before the wick fill is complete. We expect further selling pressure soon, but until key data releases later on, we may see some delayed market movement. Depending on what comes out, we could see some buying before October trading begins.

GBPUSD - In recent moves, the Pound has lost considerable strength against the dollar, falling below key zones. Were awaiting further price action to give us a clearer direction, but expectations still lean toward a Pound buy.

AUDUSD - The Aussie dollar is expected to continue its rise after breaking above the S&D zone. Were waiting for further price action to confirm a more secure movement.

NZDUSD - The Kiwi shows some selling pressure after the dollar's sudden strength gain. Well wait for more trading before deciding on the market's direction, though market expectations lean towards further buying, with the possibility of selling.

EURUSD - The Euro is holding support at 1.11386 and is poised to break above once more. With that in mind, we anticipate further buying opportunities for the Euro.

USDJPY - The Yen continues to weaken and is pushing up. We see potential for the Yen to test 145.196. While we await more price action for confirmation, current momentum appears bullish.

USDCHF - The Franc weakened after yesterday‘s bounce. However, it’s just pips away from filling the previous wick. We still have the wick trade open and are looking for the next chance to sell, but were waiting for more confirmation for a secure trade.

USDCAD - The CAD has returned to test 1.34803. Given the current price action, bearish momentum is strong, and were looking into further selling opportunities in this market.