Let’s dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don’t pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear. Economic growth in the US and China, the world’s top two economies, shows signs of stuttering. China’s recovery is losing steam, impacting Germany’s hopes for an easy exit from its downturn. A slowdown in Europe’s largest economy spells trouble for the rest of the region, which narrowly avoided a recession earlier this year. Inflation remains uncomfortably high, prompting central banks to consider further interest rate hikes. These developments have the potential to weigh on consumer spending and business investment. Buckle up, folks, as we navigate these uncertain times and keep a close eye on their impact on forex markets. Stay informed and trade wisely!
US Dollar – Daily Timeframe
The US Dollar on the daily timeframe has finally given the first signs of rejection from the supply zone, as highlighted above. The additional confluence from the resistance trendline and the descending array of the moving averages seems to lend even more credence to the possibility of a bearish price action on the US Dollar chart.
Analyst’s Expectations:
- Direction: Bearish
- Target: 102.75
- Invalidation: 104.71
XAUUSD – Daily Timeframe
More often than not, Gold tends to correlate inversely to the price of the US Dollar. Based on that fact, we can naturally expect a bullish price action from Gold. Now, let’s combine that with the available confluences we can see from the chart above:
The 100-Day moving average support
The support trendline of the rising channel
The bullish array of the moving averages
Overall, the stars seem readily aligned in favor of bullish price action.
Analyst’s Expectations:
- Direction: Bearish
- Target: 2016.52
- Invalidation: 1949.95
EURUSD – Daily Timeframe
Similar to the case of Gold, bearish price action on the US Dollar usually implies a bullish price action on EURUSD. Considering, however, the confluences based on the support trendline of the rising channel, the pivot zone as highlighted, the support trendline of the wedge pattern, and finally, the bullish array of the moving averages, I believe we should be seeing some bullish price action on EURUSD shortly.
Analyst’s Expectations:
- Direction: Bullish
- Target: 1.08554
- Invalidation: 1.06524
GBPUSD – Daily Timeframe
By now, I’m sure you can already guess my sentiment regarding the direction of GBPUSD. If your guess was ‘bullish,’ you are right! The confluences I have for this sentiment aside from the correlation with the US Dollar price action include; the support trendline, the bullish array of the moving averages, and the rejection from the 100-Day moving average support.
Analyst’s Expectations:
- Direction: Bullish
- Target: 1.25942
- Invalidation: 1.23275
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
