Top and Bottom Reversals Facilitate Alternating Market Uptrends

Commodity

Central Bank

Summary:

With the USD moving further higher, silver prices fell sharply to around US$28.20. Technical patterns suggest that the downside may be further extended.

BUY XAGUSD

Close Time

CLOSED

27.982

Entry Price

31.000

27.150

30.787 +0.725 +2.41%

38.3

Pips

Profit

27.150

28.365

Exit Price

27.982

Entry Price

31.000

Fundamentals

With the decline in commodity prices, silver has dropped over 5% in the past week. Gold prices are also showing bearish signs. Investors are closely monitoring a series of economic data set to be released this week, which could influence expectations regarding a potential interest rate cut by the Federal Reserve in September.

On Tuesday, the USD rose further, pushing silver prices down to around US$28.20. Nevertheless, silver bulls maintain an overall technical advantage as prices are in an upward trend in the 1D timeframe for September silver futures. The next upward price target for silver bulls is to close above the solid technical resistance level of US$31.00. The next downward price target for bears is to close below the strong support level of US$28.05.

The initial resistance level for short-term bulls is this week's high of US$28.67, followed by the neckline of the head and shoulders pattern at US$29.22. The next support level is this week's low of US$28.05, followed by US$27.76.

Top and Bottom Reversals Facilitate Alternating Market Uptrends_1

Technical Analysis

In the previous strategy, we said that with the slowdown in upward momentum, the silver prices would experience a pullback. After three days of trading, the market has shown the expected downward trend; currently, silver prices have fallen below the established neckline and are forming a bearish right shoulder of a "head and shoulders top" pattern. It is expected that this downward momentum will ease at the right shoulder of our expected "inverse head and shoulders" pattern, thereby laying the groundwork for another upward movement. Therefore, bulls may attempt to regain control and push prices back toward the US$30.00 level.

It's important to note that the realization of this scenario largely depends on the fundamentals (with U.S. labor market data set to be released on Friday - an event that could significantly impact silver prices) and structural reorganization. Additionally, a break below the left shoulder of the "inverse head and shoulders" pattern at US$27.32 would halt the bullish wave in the short term and lead prices to decline. The expected trading range for today is between the support level of US$27.76 and the resistance level of US$28.67.

Trading Recommendations

Trading Direction: Buy

Entry Price: 27.85

Target Price: 31.00

Stop Loss: 27.15

Deadline: 2024-09 - 18 23:55:00

Support: 28.17, 28.05, 27.72

Resistance: 28.67, 28.98, 29.22

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Peterson

Commodity

Central Bank

Summary:

Gold has entered a consolidation phase, and in the short term, it is expected to experience range-bound fluctuations. The subsequent market movement will depend on the outcome of the Federal Reserve's policy meeting.

BUY XAUUSD

Close Time

CLOSED

2476.07

Entry Price

2526.10

2450.00

2586.36 +27.22 +1.06%

373.5

Pips

Profit

2450.00

2513.42

Exit Price

2476.07

Entry Price

2526.10

Fundamentals

Currently, the market widely anticipates that the Federal Reserve will implement a rate cut during its monetary policy meeting on September 17-18. This would mark the first decrease in the current policy cycle, resulting in a reduced opportunity cost for holding gold, thereby enhancing its allure. At present, investors estimate a 69% likelihood of a 25 basis point rate cut and a 31% chance for a 50 basis point rate cut.

However, in recent weeks, the market has already priced in the possibility of a 25 basis point cut. If the Fed's action at the next policy meeting falls short of expectations, it might exert downward pressure on the performance of gold.

Technical Analysis

Wait for the Conclusion of the Consolidation as It Just Kicks Off_1

After breaking the previous resistance level of US$2,480 per ounce on August 16, gold has reached a new high of US$2,531.76 per ounce. Currently, the short-term support level appears to be at US$2,474.34 per ounce, while the resistance level is at US$2,528.80 per ounce.

In the 4H timeframe, gold is fluctuating within the range of US$2,474 to US$2,531. The price has tested the US$2,528.80 resistance level three consecutive times, with technical indicators indicating a downward bias below the midline, continuing to test the support level at US$2,474.34 to assess its strength.

Overall, if it declines toward the support level of US$2,474.34 per ounce and manages to hold, the short-term outlook remains bullish with a target toward the resistance level of US$2,528.80 per ounce. Moreover, it is expected that the market will continue to experience a range-bound fluctuation in the near term.

Trading Recommendations

Trading Direction: Buy

Entry Price: 2474.40

Target Price: 2526.10

Stop Loss: 2450.00

Deadline: 2024-09-16 15:00:00

Support: 2474.34, 2470.85

Resistance: 2508.28, 2512.59, 2528.80

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Traders' Opinions

Summary:

Gold prices remain just below $2,500 amid a calm market environment and reduced geopolitical risks.

SELL XAUUSD

Close Time

CLOSED

2495.00

Entry Price

2442.00

2508.00

2586.36 +27.22 +1.06%

107.8

Pips

Profit

2442.00

2484.22

Exit Price

2495.00

Entry Price

2508.00

Gold (XAU/USD) traded just below the $2,500 mark on Tuesday, reflecting a period of relative market calm that has yet to significantly boost demand for the precious metal. The stability in market conditions contrasts with the typical safe-haven appeal of gold, which usually gains traction during times of heightened uncertainty.

The US Dollar (USD), which generally moves inversely to gold, showed only modest gains on Tuesday. Traders appear to be holding their positions as they await crucial US labor market data set to be released later this week. This upcoming data is expected to be pivotal in shaping expectations about future Federal Reserve (Fed) actions, particularly concerning interest rate adjustments—a major influence on gold prices.

In the realm of geopolitical tensions, recent events in Israel have momentarily eased market concerns. Demonstrations in Tel Aviv calling for a ceasefire in Gaza, coupled with a general strike by Israeli workers, have somewhat reduced the immediate threat level in this volatile region. This easing of geopolitical risks has contributed to the overall calm in financial markets.

Gold traders are closely monitoring the forthcoming US employment data, which includes the ISM Manufacturing Employment Index, JOLTS Job Openings, ADP Employment Change, Jobless Claims, ISM Services Employment Index, and Nonfarm Payrolls (NFP). Fed Chairman Jerome Powell’s recent remarks at Jackson Hole have shifted focus from inflation to the fragile state of the labor market, suggesting increased downside risks to employment compared to inflation.

If the labor market data this week comes in weaker than expected, it could lead to a decline in the US Dollar while pushing gold prices higher. Market participants are currently debating whether the Fed will opt for a 50 basis point (bps) rate cut in September or settle for a more conservative 25 bps cut. While a 25 bps cut is widely anticipated, there is approximately a 30% probability, according to the CME FedWatch Tool, that the Fed may choose the larger cut.

A weaker-than-expected labor market report could increase the likelihood of a more substantial rate cut, providing a boost to gold prices. Lower interest rates enhance the attractiveness of gold as an investment, given that it does not yield interest, making it more appealing when other assets offer lower returns.

Technical Analysis

On the technical front, gold prices have recently broken below the $2,500 level, reinforcing a bearish outlook in the short term. The price action suggests a potential decline towards the initial support target at $2,483.40. A breach of this support level could pave the way for further losses, with the next significant target at $2,442.50.

The downward movement is also supported by gold trading below the 50-period Exponential Moving Average (EMA), which indicates the continuation of the bearish trend. Conversely, if gold prices manage to surpass the $2,506.00 level, it could signal a reversal of the bearish trend, leading to potential gains and a test of the $2,540.00 resistance level.

For today, the expected trading range for gold is between $2,475.00 on the downside and $2,510.00 on the upside. The prevailing trend remains bearish, with market participants keenly awaiting the upcoming labor market data to gauge the future direction of gold prices.

TRADE RECOMMENDATION

SELL GOLD

ENTRY PRICE: 2495

STOP LOSS: 2508

TALE PROFIT: 2442

Risk Warnings and Disclaimers

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Warren Takunda

Forex

Summary:

The Pound Sterling has weakened to near 1.3100 against the US Dollar as the Greenback holds gains ahead of crucial US economic data.

SELL GBPUSD

Close Time

CLOSED

1.31240

Entry Price

1.30000

1.31800

1.32814 +0.00699 +0.53%

56.0

Pips

Loss

1.30000

1.31802

Exit Price

1.31240

Entry Price

1.31800

The Pound Sterling (GBP) has exhibited subdued performance, hovering just above the crucial support level of 1.3100 against the US Dollar (USD) during Tuesday’s London trading session. The GBP/USD pair has edged lower as the Greenback consolidates near a nearly two-week high. Market participants are shifting their attention towards forthcoming US economic data, with the Nonfarm Payrolls (NFP) report for August emerging as a critical catalyst this week.

The US Dollar Index (DXY), which gauges the Greenback's strength against a basket of six major currencies, is stabilizing around 101.70. The market eagerly anticipates the release of the NFP data this Friday, which is expected to significantly influence speculation regarding the Federal Reserve’s (Fed) interest rate decisions. Currently, traders are divided on whether the Fed will opt for a gradual 25 basis point cut or a more aggressive 50 basis point reduction.

The heightened focus on labor market data comes in response to comments from Fed Chair Jerome Powell at the Jackson Hole Symposium. Powell emphasized that the central bank remains vigilant about job demand while being confident that inflation will continue to trend towards the Fed’s 2% target. This underscores the importance of upcoming labor market indicators, including the US JOLTS Job Openings data for July and the ADP Employment Change report for August, scheduled for release on Wednesday and Thursday, respectively.

On Tuesday, the US Dollar's performance will also be influenced by the S&P Global final estimate and the ISM Manufacturing Purchasing Managers Index (PMI) for August. Economists anticipate that the manufacturing sector's activity will show a slower contraction, with the ISM PMI expected to improve to 47.5 from July’s 46.8.

Despite the broader market dynamics, the Pound Sterling has struggled against most major currencies, except for those in the Asia-Pacific region, during European trading hours. The British currency’s underperformance comes even as the Bank of England (BoE) is anticipated to maintain its interest rate at 5% this month. Market speculation for a September rate cut remains weak, with traders more confident about potential cuts in November. This sentiment is partly driven by the UK’s persistent inflationary pressures, which are expected to remain elevated due to robust economic performance.

Comments from BoE Governor Andrew Bailey at the Jackson Hole Symposium highlighted a cautious approach towards rate cuts, emphasizing that the central bank will avoid rapid or excessive reductions. This caution aligns with the latest S&P Global/CIPS Manufacturing PMI data, which reported an expansion in the UK manufacturing sector to a 26-month high of 52.5 in August. This expansion reflects continued growth in output, new orders, and labor demand, with the investment goods sector standing out as a particularly strong performer.

Technical Analysis

From a technical standpoint, the GBP/USD pair is currently breaking below the 1.3124 level, reinforcing the expectation of a continued bearish trend. This movement is taking place within a bearish channel, suggesting that the pair could decline further with a target approaching 1.3036.

Maintaining the price below 1.3155 is crucial for sustaining the bearish outlook. A breach of this level could prompt a shift in trend, potentially leading to a bullish reversal on an intraday and short-term basis. For the current trading day, the anticipated range for GBP/USD is between 1.3050 support and 1.3195 resistance.

TRADE RECOMMENDATION

SELL GBPUSD

ENTRY PRICE: 1.3124

STOP LOSS: 1.3180

TAKE PROFIT: 1.300

Risk Warnings and Disclaimers

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Warren Takunda

Forex

Summary:

The Australian dollar has fallen sharply below the 0.6750 support level against the U.S. dollar, reflecting a risk-off sentiment and the strengthening greenback.

SELL AUDUSD

Close Time

CLOSED

0.67300

Entry Price

0.66100

0.68300

0.68113 +0.00497 +0.74%

3.7

Pips

Profit

0.66100

0.67263

Exit Price

0.67300

Entry Price

0.68300

In a notable decline, the Australian dollar has tumbled below the significant support level of 0.6750 against the U.S. dollar, as global risk aversion intensifies. The AUD/USD pair's steep drop on Tuesday's European trading session underscores growing investor caution and the strengthening of the U.S. dollar ahead of a pivotal week of economic data releases.

The U.S. dollar has shown resilience, with the U.S. Dollar Index (DXY), which measures the greenback against a basket of major currencies, approaching a two-week high near 102.00. This uptick in the dollar is driven by diminishing expectations for an aggressive Federal Reserve rate cut this month. Recent market sentiment has shifted as speculation about a 50 basis point rate cut by the Fed has waned, partly due to stronger-than-expected U.S. economic indicators. The revised estimate for the U.S. second-quarter Gross Domestic Product (GDP) growth has come in at 3%, surpassing the initial forecast of 2.8%, reflecting a more robust economic performance.

The shift in expectations is also evident in the futures markets, where S&P 500 futures have experienced notable declines during European trading hours. Investors are recalibrating their views on future monetary policy, with the Fed's interest rate trajectory now in focus. This week, all eyes will be on the U.S. Nonfarm Payrolls (NFP) report for August, scheduled for release on Friday, which is anticipated to provide further clues on the labor market's health and the Fed's potential policy moves. In the meantime, the U.S. ISM Manufacturing PMI for August, due for release at 14:00 GMT on Tuesday, is expected to show a slower contraction in manufacturing activity, with a forecasted PMI of 47.5 compared to July's 46.8.

On the Australian front, the bearish sentiment surrounding the Australian dollar is exacerbated by a global risk-off mood, which generally disfavors riskier assets. Domestic factors are also contributing to the weakness in the AUD. Investors are awaiting the release of Australia's Q2 GDP data on Wednesday, with forecasts suggesting a 0.3% growth rate, an improvement from the 0.1% growth recorded in the first quarter. This data will be crucial in shaping expectations for the Reserve Bank of Australia's (RBA) monetary policy.

Further impacting the AUD, investors will be closely watching Reserve Bank of Australia (RBA) Governor Michele Bullock's speech on Thursday. Any signals from Bullock regarding the potential for policy normalization or adjustments in the RBA’s stance will be closely scrutinized for insights into the future direction of Australian monetary policy.

Technical Analysis

From a technical standpoint, the AUD/USD pair has achieved the anticipated key level of 0.6728 and is currently finding solid support at this level. However, the outlook remains bearish, with potential for further declines. If the support at 0.6728 is breached, the pair could extend its downward movement towards additional targets at 0.6695 and subsequently 0.6610.

The prevailing bearish trend suggests that unless there is a significant rebound that breaks above current resistance levels, the AUD/USD pair will likely continue its downward trajectory. A failure to sustain above the 0.6728 support level could lead to further weakness. Conversely, if the pair fails to break below this support, a new bullish wave could develop, targeting higher resistance levels around 0.6800.

For today's trading session, the expected range for AUD/USD is between 0.6700 support and 0.6800 resistance. The overall trend forecast remains bearish, driven by both technical indicators and prevailing market conditions.

TRADE RECOMMENDATION

SELL AUDUSD

ENTRY PRICE: 0.67300

STOP LOSS: 0.68300

TAKE PROFIT: 0.6610

Risk Warnings and Disclaimers

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Winkelmann

Commodity

Summary:

Despite rising US dollar and Treasury yields and dropping gold prices, XAUUSD maintains its long-term bullish momentum. And traders should keep an eye on 2480.

BUY XAUUSD

Close Time

CLOSED

2484.99

Entry Price

2530.00

2465.00

2586.36 +27.22 +1.06%

201.1

Pips

Profit

2465.00

2505.10

Exit Price

2484.99

Entry Price

2530.00

Fundamentals

According to the GDP data, the US economy remains solid and the risk of a hard landing is low. Therefore, the Fed will not be too aggressive in cutting rates. The market has already priced in the expectation of a 25 bps rate cut in September, while the expectation of a 50 bps rate cut in September has cooled. Since last week, the dollar and US Treasury yields have rebounded, and gold prices have seen a correction.

Still, investors seem inclined to take long positions in gold. Gold prices are trying to hit record highs many times. In addition to the "rate cut trade", the risk of escalating geopolitical tensions attracts some safe-haven buying of gold. As the Fed's September meeting draws closer, this week's non-farm payrolls report will be at the top of the list. At that time, the magnitude of the rate cut will be clear. Overall, gold may pull back in the short term, but in the medium to long term, its uptrend remains unchanged.

Technical Analysis

Buy Low as Long-Term Bullish Momentum Remains Despite Pullbacks_1

Last week, gold maintained its gains as August ended. However, judging from the weekly chart, the trading volume and prices both fell. In the short term, gold is still in a weak oscillation pattern.

Buy Low as Long-Term Bullish Momentum Remains Despite Pullbacks_2

In the 4h chart, XAUUSD tried to hit 2530 several times, all of which failed. At the same time, gold lost the 2500 mark when correcting. It is expected to keep pulling back in the near term and may break below 2480 again. However, it remains bullish in the long term. Therefore, traders should not be overly bearish. As long as gold stays above 2480, it is still worth buying.

Traders are advised to go long after the price declines to around 2480. The target is near 2530, and the stop loss is below 2470.

Trading Recommendations

Trading Direction: Buy

Entry Price: 2485

Target Price: 2530

Stop Loss: 2465

Support: 2480/2470

Resistance: 2500/2530

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Economic

Summary:

Oil prices rose for the second consecutive day, driven by positive US economic data and worsening supply disruptions in Libya.

BUY WTI

Close Time

CLOSED

73.321

Entry Price

84.000

71.000

70.999 +1.939 +2.81%

232.1

Pips

Loss

71.000

Exit Price

73.321

Entry Price

84.000

Fundamentals

The upward revision of US GDP data provided some support for WTI crude, as increased consumer spending eased concerns about a global economic slowdown and bolstered the demand outlook for commodities. However, global crude oil benchmarks might still see their first monthly decline of the year, with recent price forecasts being lowered by Goldman Sachs and Morgan Stanley.

Additionally, the market remains under pressure from the potential return of some supply from OPEC+ in the fourth quarter. OPEC's unexpected move to restore part of the supply, as planned, now faces a new environment marked by growing macroeconomic concerns and looser fundamentals.

If OPEC aims to push oil prices higher, it may have no choice but to delay the gradual exit from voluntary production cuts. The closely watched crude oil time spread is showing signs of strengthening. The spread between the two closest Brent oil contracts widened before the contracts expired, recently exceeding $1 per barrel, nearly double the 56 cents per barrel a month ago.

Later today, investors might look to the US Core Personal Consumption Expenditure (PCE) Price Index for the next clue, which will impact Fed policy expectations for next month and the rest of the year. Strong data could dampen hopes of significant rate cuts by the Fed, potentially boosting the dollar and putting downward pressure on risk assets like crude oil.

On the other hand, weak inflation data could increase the likelihood of a 50-bps rate cut in September and further easing for the rest of the year, potentially pushing oil prices higher due to the prospect of lower borrowing costs.

Technical Analysis

After a strong surge in WTI crude prices yesterday, the market is currently in consolidation and still trading within its long-term descending triangle.

The 100 SMA is above the 200 SMA, indicating that the path of least resistance is upward, or that the support level is more likely to hold rather than break. The 200 SMA aligns with the bottom of the triangle near $75.00 to enhance its support strength.

Ongoing bullish pressure could push oil prices above the triangle’s top and rebound to the same height as the triangle's shape. Nevertheless, the stochastic oscillator is heading downward, reflecting a return of selling pressure with potential room to fall before reaching oversold territory.

The RSI is also declining, which could see prices drop as bearish pressure takes effect. The oscillators need more time to recover before signaling exhaustion of the bearish momentum.

Trading Recommendations

Trading Direction: Buy

Entry Price: 73.00

Target Price: 84.00

Stop Loss: 71.00

Valid Until: 2024-09 - 14 23:55:00

Support: 74.32, 73.34, 72.96

Resistance: 76.26, 77.22, 77.60

Risk Warnings and Disclaimers

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Top and Bottom Reversals Facilitate Alternating Market Uptrends

Fundamentals

Technical Analysis

Trading Recommendations

Wait for the Conclusion of the Consolidation as It Just Kicks Off

Fundamentals

Technical Analysis

Trading Recommendations

Gold Prices Hover Below $2,500 as Market Anticipates Key US Data

Pound Sterling Drops as US Dollar Remains Strong; Upcoming NFP Data in Spotlight

Australian Dollar Slumps as AUD/USD Falls Below Key Support Level Amid Risk-Off Sentiment

Buy Low as Long-Term Bullish Momentum Remains Despite Pullbacks

Fundamentals

Technical Analysis

Trading Recommendations

Path of Least Resistance is Upward

Fundamentals

Technical Analysis

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Risk Disclosure