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Market News and Economic Events Update 04, Aug

  • Asia Central Banks Deploy Foreign Exchange Reserves to Lift Currencies - Bloomberg

Asia's emerging economies are drawing on their vast foreign exchange reserves to help prop up their ailing currencies against the US dollar rather than going all-out with interest-rate hikes. Meanwhile, the inversion of the Treasury yield curve deepened Wednesday as the market proved volatile once again.

  • Australia’s Trade Surplus Swells to Fresh Record in Boost to GDP

Australia’s trade surplus hit a fresh record high, driven by strong prices of key exports from grains to metals and gold, in a result that’s likely to boost second-quarter gross domestic product.

The surplus swelled to A$17.7 billion ($12.3 billion) in June, surpassing economists’ estimate of A$14 billion, Australian Bureau of Statistics data showed on Thursday. Exports jumped 5%, while imports rose 1% as more Australian holidaymakers traveled overseas. 

  • US Dollar climbs as Fed officials suggest more rate hikes to come

The dollar was on the front foot on Thursday, helped by several U.S. Federal Reserve officials pushing back against suggestions they will slow the pace of interest rate hikes, while the pound was flat ahead of a Bank of England meeting.

The dollar index, which measures the greenback against six peers, was steady in early trade at 106.39 having eked out small gains overnight. It is up around 0.5 per cent this week, reversing the trend of the previous two weeks.

  • Clarida Returns to Pimco After Fed Cleared Him in Trading Probe

Former Federal Reserve Vice Chair Richard Clarida will return to bond giant Pacific Investment Management Co. as global economic adviser following his exit from the central bank in January and the conclusion of an internal Fed probe into his personal trading, which found that he hadn’t broken any rules. 

At the Fed, Clarida -- who’s considered a pioneer in modern monetary economics -- worked closely with Chair Jerome Powell in devising the new framework for policy that was published in August 2020. 

Economic Events

IST TIME. | Source:

Latest Market News Highlight

  • Fed's bullard: Better bet is it will take a while for inflation to come down to 2%
  • The OPEC plus ministers didn’t vote yet… but it’s almost certain the 100k increase will be approved
  • Saudi Arabia reportedly warms to production increase at OPEC+ meeting- FT
  • Japan’s used car exports to Russia rise threefold despite sanctions
  • Volume of retail trade down by 1.2% in the euro area and by 1.3% in the EU
  • Industrial producer prices up by 1.1% in the euro area and by 1.3% in the EU
  • UK: Weakest service sector performance since February 2021 as inflationary pressures continue to dampen demand
  • U.S. Treasury yields move higher ahead of new economic data


XAU/USD Technical Outlook – Resume Uptrend

The XAUUSD pair is retreating from the mentioned high and after briefly surpassing a daily descendant trend line coming from a relevant high at $ 1,857.49 posted mid-June. Technically, the daily chart shows that indicators have lost their positive momentum and turned flat within positive levels while the metal continues advancing above the 20 SMA. Overall, the risk remains skewed to the upside, regardless of a potential setback.

The 4-hour chart shows that the XAUUSD remains above a mildly bearish 200 SMA, which provided intraday support, while the 20 SMA heads firmly higher just below it. Technical indicators, on the other hand, ease within positive levels, reflecting the latest slide but falling short of confirming another leg south.

Support levels: $1750 and $1735

Resistance levels: $1788 and $1800

XAU/USD Technical Outlook

On a four-hour scale, gold prices are establishing above the 38.2% Fibonacci retracement (which is placed from June 12 high at $1,879.26 to July 21 low at $1,680.91) at $1,756.21. An establishment above 38.6% Fibo retracement bolsters the upside potential.

The precious metal is facing hurdles in overstepping the 200-period Exponential Moving Average (EMA) at $1,763.19. Also, the 50-EMA at $1,738.51 is advancing higher, which adds to the upside filters.

The Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates a continuation of bullish momentum ahead.

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XAU/USD Technical Outlook target $1800

Gold price closed Thursday finally above the bearish 21-Daily Moving Average (DMA), now at $1,736, confirming a bullish reversal from yearly lows. The 14-day Relative Strength Index (RSI) is holding firmer above the midline, justifying the renewed upside in the metal.  

Bulls now look to recapture the horizontal trendline hurdle at $1,773 should the upswing extend. Further up, doors will open up for a test of the bearish 50 DMA at $1,797. Alternatively, the immediate support is seen at $1,750 psychological level, followed by the critical 21 DMA – previous resistance turned support.

Should the downside extend, gold sellers will aim for the strong demand area around the $1,715 region.

XAU/USD Technical Outlook

On an hourly chart, the gold price is gearing up for an upside break of the supply zone placed in a narrow range of $1,739-1,745. On short term chart a crossover represented by the 15-and 30-period Exponential Moving Averages (EMAs) at $1,726.00 has bolstered the odds of a bullish reversal. Adding to that, the Relative Strength Index (RSI) has shifted into the bullish range of 60-80.00, which signals more gains ahead.

On intra day chart near resistance level placed at $1740 if market cross this level gold prices move towards to the level of $1750. on the flip side $1730 react as a support level.

XAU/USD Technical outlook

Although 50-SMA restricts the immediate downside of the gold price to around $1,713, bearish MACD signals and the 100-SMA challenge the XAU/USD buyers unless crossing the $1,727 hurdle.

Even so, 50% and 61.8% Fibonacci retracements of July 04-21 fall, around $1,748 and $1,764 in that order, challenges the metal buyers before giving them control.

On the contrary, a clear downside of the 50-SMA support near $1,713 isn’t an open invitation to the gold sellers as a two-week-old horizontal support zone around $1,697-98 probes the metal’s additional south-run before directing the bears to the yearly low of $1,680.

It should be noted, however, that the metal’s weakness past $1,680 could make it vulnerable to test the 61.8% Fibonacci Expansion (FE) of July 04-22 moves, near $1,655.

XAU/USD Technical Outlook

The bearish 100-Simple Moving Average (SMA), now at $1,732 on the four-hour chart, continues to guard the upside. Meanwhile, bulls remain hopeful while trading above the mildly bullish 21 SMA at $1,717. The Relative Strength Index (RSI) is trading flat but still above the midline, suggesting that there remains room to the upside.

The bull cross confirmed on Monday, after the 21 SMA cross the 50 SMA for the upside, also adds credence to the potential move higher.    Acceptance above 100 SMA will call for a test of the $1,750 psychological level, above which the horizontal trendline resistance at $1,752 will be eyed.

On the flip side, if the 21 SMA caves in, the immediate support will be seen at the 50 SMA of $1,713. The next downside target is placed at $1,700. Further south, the 16-month troughs of 1,681 will be put under threat once again.

EUR/USD Technical Outlook

EUR/USD dropped below the 100-period SMA on the four-hour chart and the Relative Strength Index (RSI) indicator on the same chart fell below 50, pointing to a bearish shift in the near-term technical outlook. The pair is currently trading slightly below the 1.0170 resistance, where the Fibonacci 38.2% retracement of the latest downtrend is located. If that level stays intact, additional losses toward 1.0120 (50-period SMA), 1.0100 psychological level, Fibonacci 23.6% retracement) could be witnessed. A daily close below the latter could open the door for an extended slide toward parity.

Above 1.0170, 1.0200 (psychological level, 100-period SMA) forms the next resistance before 1.0220 (Fibonacci 50% retracement, 100-period SMA) and 1.0270 (Fibonacci 61.8% retracement). 

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