Hot Economic Data Day

GOLD -Last week‘s trading caused GOLD to rise, although some gains were lost during Friday’s market close. However, we can see a strong support level at 2431.705 holding prices up and possibly giving it enough momentum to increase due to rising tensions in the Middle East and uncertainty in the US economy. With investors shifting their focus to securing their wealth, GOLD demand will rise, causing the difference in price to soar as we assume the purchase of GOLD assets will rise in number.

SILVER -SILVER prices are currently held between 29.018 and 27.725. However, we assume continued demand for this metal to come into the market soon as rising escalations of an all-out war will cause demand for silver to rise to be used for weaponry. Soon, we will see an increased focus on military might across countries in the world. If it has done so in the past, it will only be more evident in the days to come.

DXY - As we expected, the dollar has broken through 104.084 after a prolonged period of consolidation from last week. Currently, we expect a stronger fall in price for this currency and see the dollar finding difficulties in gaining back the strength it lost. With that said, we still see the economy stronger than other countries; however, the looming fears of an upcoming recession do hit the dollar negatively.

GBPUSD - The Pound is currently at 1.27256, showing a slight recovery against the dollar after its fall from last week. However, it can be said that the overall trend in price from last week does highlight the pound‘s weakness, telling us that both economies are experiencing difficulties. What’s more, the UK is close to Israel, making worries of an all-out war in the Middle East a cause for worry. This is the same for the entirety of Europe, causing the EUR also to possibly experience a slowdown.

AUDUSD -The market with the Aussie dollar is holding still. The Aussie dollar and the Kiwi are also likely to be somewhat volatile ahead of a policy meeting at the Reserve Bank of Australia on Tuesday where a hold is widely expected and kiwi jobs data on Wednesday which is likely to show a sharp rise in the jobless rate. Market participants expect Australia's central bank (RBA) to conclude its two-day meeting by keeping interest rates at 4.35% for a sixth consecutive meeting. The focus will therefore be on updated economic forecasts and whether a hike was considered.

Favorable inflation data and a shift in global rate expectations have seen markets give up rate hike bets. Instead, swaps imply a 75% probability of a first cut in November. “Whilst the (RBA) Board will have welcomed the latest inflation data, there is no need to deviate from the recent script. Indeed it is too early to shift tone,” said Gareth Aird, head of Australian economics at the Commonwealth Bank of Australia.

“The risk clearly sits with interest rate relief not arriving until H1 25. But we believe the data will continue to evolve in a way that sees the RBA cut the cash rate in November.”

This pushback in the RBA cut in rates from the supposed August expectation may influence the Aussie dollar's strength. With that said, we may see a rise or a fall in price. All eyes on Tuesday.

NZDUSD - The Kiwi has gained considerably against the dollar after last weeks trading, stopping prices between 0.59796 and 0.59400. This market consolidation has not shifted our market expectations of a weaker Kiwi. However, recent developments in the US economy and the Middle East, may not give investors enough reason to look into this market, causing its liquidity to be lower—moving prices sideways and slowly. Although the more immediate term does tell a stronger Kiwi against the dollar as the RBNZ rate cut was called later than FED cut expectations.

“High-frequency indicators suggest that the risks are skewed to a weaker labor market than the RBNZ assumed,” said Jarrod Kerr, chief economist at Kiwibank. “If the labor market release plays to our forecasts, or even softer, then we will likely see the RBNZ double down its dovish tilt in August.”

The Reserve Bank of New Zealand (RBNZ) meets on Aug. 14 and swaps indicate a 35% chance it will cut interest rates. A first easing is fully priced in for October.

EURUSD -As explained in the Pound chart, tensions in the Middle East have caused investors to worry for Europe as they are close to the said conflicts. In what manner will they be inflicted by said conflict？ I remain unsure, but we continue to keep a watchful eye on developments and the reaction of global leaders to said conflict to ascertain a more directive approach to said markets. However, we do expect a weaker Euro despite an upcoming weakness in the dollar.

USDJPY - Away from the tensions in the Middle East, the Yen provides a more immediate solution with acceptable growth as their economy shifts toward an expansionary approach to boost investments and economic growth. However, while others still remain unsure regarding the overall effect of the said shift in policies, the currency strength is showing as it gains considerably against the dollar, trading under 146.512. With that said, we expect further strength to come into the Yen until further notice.

USDCHF - Alongside the Yen, the Franc also stands as a safer alternative—highlighted by the evident growth in market supply for said market, with prices falling under 0.87041. We expect the market to fall further with expectations of a possible demand zone to be shown tomorrow.

USDCAD -Despite the CAD weakness, the price has shown stability, trading on 1.38402. However, we can also see that the price has stagnated slightly above the previous high. As weve mentioned in the last analysis, we think that CAD strength will come soon as reality sets in for the majority of the traders and businesses—with demand for oil and gas increasing. Supply routes will be disrupted and there will be concerns increasing for supply.

COT Reports Analysis

CAD - WEAK (5/5)

CHF - STRONG (1/5)

GBP - WEAK (1/5)

JPY - STRONG (3/5)

EUR - WEAK (2/5)

AUD - WEAK (5/5)

NZD - WEAK (5/5)

USD - WEAK (1/5)

SILVER - STRONG (3/5)

GOLD - STRONG (3/5)