The Week Ahead – To Cut or Not to Cut!

XAUUSD gearing up for another record

The recent weakness in the US Dollar provides some support for the yellow metal, as shown in the XAUUSD chart. This came after another failure swing at the recent record high as price action fell away from the 2480 area. Momentum has seemingly shifted away from the gold market due to the expectation that the Fed will only cut their rate by 25 basis points instead of 50 in their next meeting. On the flip side, the ongoing geopolitical fallout and economic uncertainty could boost the safe-haven flows. As highlighted in the XAUUSD chart, the price is bouncing towards 2500 with 2440 as critical support.

EURUSD breaches 1.10

The Euro advances as the pair hit a seven-month high, and the greenback remains on the back foot. With the latest CPI reading slowing for a fourth consecutive month to 2.9%, this managed to limit the aggression with the dollar. As the ECB is expected to maintain its gradual rate cutting, all eyes will be on the Fed in their September meeting to see if they have left it too late to change their monetary policy. The pair is on its way towards 1.1050 with 1.0900 as a fresh support.

NAS 100 on the comeback trail

Indices edged higher as investors gained confidence in signs of easing inflation after figures showed a breakthrough below 3%. The news has swept away recession fears and led to a rebound in stocks after last week’s sharp global sell-off. With a soft landing back on the table, the Fed will likely lower interest rates at their September meeting. The focus will now shift to how aggressively they will cut, with bets on a soft approach more likely. The index tests 19000 and 18600 is the first support.

Test your forex and CFD trading strategy with Orbex

OPEN LIVE ACCOUNT