Daily Market Analysis from Investizo.com

Fundamental analysis of EUR/USD
EUR/USD started the week with a decline to $1.09750 amid disappointing German retail sales data and mixed Eurozone economic data.
In terms of Eurozone data, Monday saw the release of July's harmonized consumer price index, which rose 5.5% year-on-year, as well as a flash GDP figure of 0.3% QoQ and 0.6% YoY. Despite a 1.6% y/y increase in German retail sales in June, the monthly figure fell to -0.8%. The ECB, raising interest rates, added 25 basis points to 4.25%, suggesting a pause in interest rate hikes in September as signs of weakening inflation and recession fears emerge. The media's interpretation of today's PMI, especially its sub-components - prices, employment and new orders - could affect market sentiment.



read more

Fundamental analysis of USD/JPY
The USD/JPY pair is correcting after a slight decline and is trading at 143.340 as Japanese authorities took steps to defend the currency. This reaction is the result of cautious optimism in the markets and a weaker US dollar amid upcoming US economic data and changes in the dynamics of bond yields. 

The Bank of Japan expanded the ceiling on the allowed rate on 10-year Japanese government bonds from 0.5% to 1.0%. The move pushed JGB yields to their highest levels in a decade, and to control the volatility of the Japanese yen, the BOJ announced unscheduled purchases of 5- and 10-year bonds. Japanese Governor Hirokazu Matsuno expressed confidence in the BOJ's strategy and remained vigilant against currency fluctuations.

Read more

Fundamental analysis of XAU/USD
XAU/USD is currently in swing territory, trading at 1937.00 as traders ponder the potential impact of U.S. labor market trends and upcoming inflation data on the direction of U.S. monetary policy. While a weaker dollar and lower bond yields have supported the precious metal, the way forward remains unclear.


Current market conditions have been driven primarily by slowing US job growth, which has weakened the dollar and bond yields, and contributed to gold's rally last Friday. The U.S. jobs report for July showed slower than expected job growth, indicating that the labor market may be stabilizing. This suggested that the recent Fed rate hike could be the last in an ongoing tightening cycle. However, strong wage growth and a declining unemployment rate suggest that the labor market remains tight, providing an opportunity to assess the Fed's future interest rate decisions. In light of these mixed signals from the labor market, attention now turns to the upcoming consumer price index (CPI) data due on Wednesday. This data will be key in determining whether further rate hikes are needed to curb inflation. If interest rates rise, gold, traditionally a hedge against inflation, could lose its appeal.

Read more

Fundamental analysis of GBP/USD

The GBP/USD pair is trading around 1.26900, recovering from a one and a half month low as traders await the release of important economic data from the UK and the US. This small rally comes despite a cautious atmosphere in global markets and uncertainty surrounding major risk events. 





Read more

Fundamental analysis of GBP/USD

Against the backdrop of a busy economic calendar, the GBP/USD pair is showing notable fluctuations. UK retail sales data for July showed a stronger-than-expected decline of 1.2%. On a year-on-year basis, retail sales fell 3.2%, contrasting with June's 1.6% decline, with core retail sales reflecting a similar downward trend. A number of factors, including rainy weather, higher cost of living and rising food prices, contributed to these low sales numbers. Lower retail sales may reduce the need for the Bank of England to tightly manage inflation. Rising interest rates and the current inflationary environment have led to lower consumer spending, which may ease demand-driven inflationary pressures. The UK Consumer Price Index (CPI) fell 0.4% for the month, ahead of market expectations. The core CPI, which excludes volatile components such as oil and food, presents a worrying picture of lingering inflation in the UK, which could prompt the Bank of England to raise rates further.



Read more

Fundamental analysis of XAU/USD

After stabilizing around the key level of 1900.00, gold prices rebounded slightly to trade at 1903.50. This shift was driven by a decline in the US Dollar Index from a two-month high and a temporary slowdown in US Treasury yields, which recently hit a 16-year high. This allowed for some recovery to take place.




Read more

Fundamental analysis of EUR/USD
The EUR/USD pair continues to decline, trading at 1.07730. This behavior of the pair was influenced by such factors as the expectation of Fed Chairman Powell's speech and disappointing US economic indicators.
On Friday, data on the German economy takes center stage, focusing on the country's GDP and business climate index. After disappointing PMI data for August, market participants are preparing for potentially gloomier news. Germany's economy is forecast to contract by 0.2% year-on-year in the second quarter and remain flat in the next quarter. Notably, a quarterly contraction could have a significant impact on the market, which would also make the European Central Bank cautious. The business climate index is forecast to fall to 86.7 from a previous reading of 87.3, although this data could be overshadowed by GDP figures. While the focus remains on the state of the German economy, investors will be keeping a close eye on ECB statements, particularly the speech by its president Christine Lagarde, which is scheduled for today. Recent poor PMI results in the eurozone have cooled expectations for an ECB rate hike in September. Any hawkish remarks could revive buying interest.




Read more