The market remained relatively unchanged last week, despite Nvidia's earnings events, which have become a highlight of the current AI-driven bull run. Personal consumption expenditures (PCE) data came in line for July, but the FED's next decision is still expected to be a rate cut.
In turn, this situation has driven metals like gold and silver to higher levels. Spot gold has closed at highs, with a $3,500 all-time high from April in sight. Meanwhile, spot silver closed at $ 39.70, a multi-year high. Interest in these metals is growing, and silver's outperformance could signal the next phase in the current commodity bull market cycle.
The development of this commodity cycle will have a profound impact on commodity-based economies, such as Canada and Australia, but could also influence the politics of numerous African countries that possess significant reserves.
In the week ahead, Australian GDP data will reveal the current state of the country's economic growth. At the same time, Swiss inflation figures may clarify the potential for interest rates to become negative. The ever-important non-farm payroll will close the week for the US dollar, with a low-ball expectation of just 74,000 jobs added. This information could solidify the FED's next move.
Key News
- Tuesday: ISM Manufacturing PMI
- Wednesday: AUD - GDP, USD - Jolt Job Openings
Thursday: CHF - CPI, USD - Unemployment claims, ISM PMI - Friday: USD - Non-farm Payroll, Unemployment
Pairs In Focus
1. CHF JPY
This pair had one of the strongest bullish performances in the currency market year-to-date, but price action went sideways during the summer after a modest dip.
CHF JPY daily chart, Source: TradingView
The expectation is for the bullish run to continue, at least to retest the key 185.034 level, which is approximately 140 pips above the current market price. A key level to watch for reactions below is 183.100
2. EUR AUD
The euro had a stellar performance against the Australian dollar early in the year, before experiencing a modest dip and subsequently recovering. The broad, large picture move is still on the upside; however, there is a potential for a medium-term correction.
EUR AUD daily chart, Source: TradingView
The price has been hovering at a key level of 1.78655, indicating that a decisive close below could lead to a run toward support around 1.77.
Notes:
- AUD NZD: Broke through an important weekly level on 1.10405. The bullish surge could push the price to 1.11800.
- AUD CAD: Remains in an established range between 0.88750 and 0.90. The price has remained suppressed in the last few days, but the bullish bias is to the upside.
- AUD CHF: Trades between 23.6 and 38.2 fibonacci points. It has been building base for nearly 3 months.
- AUD JPY: Failed to break through the key level at 96.900 three times and then created a lower low. The short-term bias is to the downside as long as 96.900 holds.
- AUD SGD: Made a lower low before falling back in the range. The resistance above is at 0.84300.
- CAD JPY: Failed to meaningfully break out lower. The price is currently at a significant resistance level around 107.100.
- EUR/JPY: In a multi-week oscillation with the important level at 172.490 as a pivot point.
- EUR NZD: Made a fresh yearly high, rising above 2.0 for the second time this year. The subsequent pullback could remain in place for the short term.
- GBP AUD: After failing to establish a new multi-month high, the price broke back below the key level. The important support to watch out for is around 2.05.
- GBP JPY: Could not sustain a 200 level, but found support at 198.250, which is a key level currently in play.
- GBP NZD: Didn’t create a new intra-day yearly high, but it made the highest close at 2.31. The ongoing pullback is likely to persist for some time.
- NZD JPY: Broke support at 86.650, before retracing back. An important resistance to watch for is around 87.
Note: Any opinions expressed in this article are not to be considered investment advice and are solely those of the authors. Singapore Forex Club is not responsible for any financial decisions based on this article's contents. Readers may use this data for information and educational purposes only.
