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The National Institute of Economic and Social Research (NIESR) forecasts 0.2% GDP growth for the UK in Q3, driven by resilience in the services and construction sectors. This comes despite today’s data showing no growth in July, marking a weaker-than-expected start to the quarter.

Hailey Low, Associate Economist at NIESR, commented on the latest GDP figures, stating, “While today’s figures came in slightly weaker compared to the upbeat performance we have seen over the first half of the year, the strong start to 2024 will likely extend into the second half of the year.”

However, NIESR has noted signs of a slowdown in the final months of 2024. "High-frequency indicators are signaling a relative slowdown in momentum for the remainder of the year," Low added. Attention is now focused on the government's upcoming Autumn Statement, where policies aimed at sustaining long-term growth will be highly anticipated.

Full UK NIESR release here.

• In the past four weeks, Gold (XAU/USD) has traded in a tight range environment below US$2,532 key intermediate range resistance.
• Positive momentum reading and a major bearish breakdown seen in the 10-year US Treasury real yield may trigger a bullish breakout in Gold (XAU/USD).
• Watch the key medium-term support at US$2,435 for Gold (XAU/USD).

Since our last publication, the price actions of Gold (XAU/USD) have managed to stage a rebound above the US$2,353 bullish reversal level and resumed its impulsive upmove sequence to print a recent fresh all-time level of US$2,352 on 20 August.

Considering the upcoming key US inflation data release later today, where the core inflation rate for August is expected to show signs of a deceleration trend continuation of the inflationary conditions in the US, coming in at 3.2% y/y, a similar pace to 3.2% recorded in July, which was a three-month low.

Through the lens of technical analysis, several positive elements have emerged that may support a potential bullish breakout for Gold (XAU/USD) after four weeks of tight-range trading.

10-year US Treasury real yield has staged a major bearish breakdown

Fig 1: US 10-YR Treasury real yield major & medium-term trends as of 11 Sep 2024 (Source: TradingView, click to enlarge chart)

The 10-year US Treasury real yield is measured by subtracting the 10-year breakeven inflation rate derived from 10-year US Treasury Inflation-Protected Securities (TIPS) from the nominal 10-year US Treasury yield.

If the 10-year US Treasury real yield is trending downwards, it implies that the long-term real opportunity cost of holding Gold (XAU/USD) is reduced as Gold is a non-income bearing asset, and vice versa when the 10-year US Treasury real yield trends upwards (see Fig 1).

Right now, the 10-year US Treasury real yield has just breached below major support at 1.62% (in place since late December 2023) which suggests that Gold (XAU/USD) has become more valuable as its associated long-term opportunity costs may be further reduced given the next medium-term support of the 10-year US Treasury real yield rests at 1.38%.

Hence, it may propel more demand for Gold (XAU/USD) which in turn is likely to drive up its price.

Medium-term momentum remains positive for Gold

Fig 2: Gold (XAU/USD)  major & medium-term trends as of 11 Sep 2024 (Source: TradingView, click to enlarge chart)

The price actions of Gold (XAU/USD) have continued to oscillate within its medium-term ascending channel in place since the 6 October 2023 low of US$1,810 and are supported by a rising 50-day moving average that is also confluences closely with its key medium-term pivotal support at US$2,435.

In addition, the daily RSI momentum indicator has continued to display a series of “higher lows” above its 50 level and has not reached an overbought condition.

These positive technical elements suggest that upside momentum may be building up for a potential bullish breakout for Gold XAU/USD, a clearance above US$2,532 may see the next medium-term resistance zone coming in at US2,640/715 in the first step (see Fig 2).

On the other hand, a break below US$2,435 negates the bullish scenario to kick start a potential multi-week corrective decline sequence within its medium-term and major uptrend phases to expose the next support at US$2,359, and below it sees an increased risk for an extension of the corrective decline towards the US$2,285 long-term pivotal support (also close to the 200-day moving average).

USDJPY fell to the lowest in 8 ½ months on Wednesday (140.70) following probe through pivotal support at 141.68 (Aug 5 spike low).

Subsequent bounce came from oversold conditions on daily chart, with partial profit taking to lift the price and position for fresh push lower.

Close below 141.68 is needed to confirm bearish continuation signal and open way for attack at next key levels: 140.48 (Fibo 61.8% of 127.22/161.95), 140.25 (Dec 28 low) and 140.00 (psychological), loss of which to risk deeper fall.

Upticks should be ideally capped under 142.50/143.00 zone to keep larger bears intact and provide better levels to re-enter larger downtrend.

Falling 10DMA (143.98) and broken Fibo 50% (144.58) mark upper pivots, violation of which would sideline bears.

Daily studies maintain strong negative momentum, with MA’s in full bearish configuration and converged 55/200DMA’s about to for a Death-cross and reinforce bearish signal.

Res: 141.55; 141.76; 142.50; 143.90.
Sup: 140.48; 140.25; 140.00; 138.60.

USD/JPY is finally topping out this year at our 162-164 resistance area, where we called the end of a big ending diagonal on the daily chart. Notice that the price is now falling sharply and impulsively through the lower trendline support and straight, all the way down to the starting point of the wedge pattern, which we see it as ongoing first leg (A) of a minimum larger three-wave A-B-C reversal down.

What's even more important is that we can see an impulsive decline in progress, with pair now trading at new lows,so it s sfifht wave, ideally an ending diagonal that can be slowly coming to an end; ideally, this moth we will see a bottom in 138-140 area.

AUD/USD declined below the 0.6720 and 0.6700 support levels. NZD/USD is also moving lower and might struggle to recover above 0.6200.

Important Takeaways for AUD/USD and NZD/USD Analysis Today

• The Aussie Dollar started a fresh decline from well above the 0.6700 level against the US Dollar.
• There is a connecting bearish trend line forming with resistance at 0.6660 on the hourly chart of AUD/USD at FXOpen.
• NZD/USD declined steadily from the 0.6255 resistance zone.
• There is a key bearish trend line forming with resistance at 0.6155 on the hourly chart of NZD/USD at FXOpen.

AUD/USD Technical Analysis

On the hourly chart of AUD/USD at FXOpen, the pair struggled to clear the 0.6765 zone. The Aussie Dollar started a fresh decline below the 0.6720 support against the US Dollar.

The pair even settled below 0.6700 and the 50-hour simple moving average. There was a clear move below 0.6670. A low was formed at 0.6640 and the pair is now consolidating losses. On the upside, an immediate resistance is near the 0.6660 level.

There is also a connecting bearish trend line with resistance at 0.6660. The next major resistance is near the 23.6% Fib retracement level of the downward move from the 0.6767 swing high to the 0.6641 low at 0.6670, above which the price could rise toward 0.6700.

Any more gains might send the pair toward the 61.8% Fib retracement level of the downward move from the 0.6767 swing high to the 0.6641 low at 0.6720. A close above the 0.6720 level could start another steady increase in the near term.

The next major resistance on the AUD/USD chart could be 0.6765. On the downside, initial support is near the 0.6640 zone. The next support sits at 0.6620. If there is a downside break below 0.6620, the pair could extend its decline. The next support could be 0.6550. Any more losses might send the pair toward the 0.6500 support.

NZD/USD Technical Analysis

On the hourly chart of NZD/USD on FXOpen, the pair also followed a similar pattern and declined from the 0.6255 zone. The New Zealand Dollar gained bearish momentum and traded below 0.6205 against the US Dollar.

The pair settled below the 0.6190 level and the 50-hour simple moving average. Finally, it tested the 0.6125 zone and is currently attempting a minor recovery wave. There was a move above the 23.6% Fib retracement level of the downward move from the 0.6254 swing high to the 0.6124 low.

Immediate resistance on the upside is near 0.6150. There is also a key bearish trend line forming with resistance at 0.6155 and the 23.6% Fib retracement level of the downward move from the 0.6254 swing high to the 0.6124 low.

The next resistance is the 50% Fib retracement level of the downward move from the 0.6254 swing high to the 0.6124 low at 0.6190. If there is a move above 0.6190, the pair could rise toward 0.6240.

Any more gains might open the doors for a move toward the 0.6280 resistance zone in the coming days. On the downside, immediate support on the NZD/USD chart is near the 0.6125 level.

The next major support is near the 0.6080 zone. If there is a downside break below 0.6080, the pair could extend its decline toward the 0.6050 level. The next key support is near 0.6000.

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The USD/JPY chart shows the rate has fallen below its 5 August low.

This decline was influenced by comments from Bank of Japan representative Junko Nakagawa, who stated that the bank would continue raising interest rates if inflation keeps decreasing.

“Given that real interest rates are currently very low, we will adjust the level of monetary support to ensure the sustainable and stable achievement of our 2% inflation target,” she said.

Technical analysis of the USD/JPY chart shows:

→ Since early August, the price movement has fit within a descending channel (shown in red).

The price has fallen to the median of this channel, which continues to show signs of support (indicated by arrows).

Bearish dominance is evident as:

→ The 143.7 level has shifted from support to resistance, as previously happened with the 149 level.

→ The price is below the Resistance 1 trendline.

It’s worth noting that at 15:30 today, the US Consumer Price Index will be released, which is likely to cause increased market volatility.

As a result, bears may attempt to push the rate down to the psychological level of 140 yen per dollar as early as today.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Market picture

The cryptocurrency market lost 0.5% in the last 24 hours, falling to $1.99 trillion. As expected, the market failed to consolidate above the $2 trillion level due to the indecisiveness of major players ahead of the US inflation data. Selling has been prevalent since the start of the day, confirming the tactic of quick profit-taking.

Bitcoin is trading around $56.5K, having failed to break through the $58K mark twice since the start of the day on Tuesday. Bitcoin is densely populated by institutional investors, for whom macroeconomics and sentiment in traditional financial markets are the main short-term drivers.

Interestingly, the introduction of ETFs has not yet had a positive impact on momentum. BTCUSD has been in a downtrend since March, while ETHUSD has been actively sold since the end of May. This is more a result of profit-taking by long-term investors after reaching an important milestone in the global adoption of cryptocurrencies rather than a negative effect of the presence of funds and corporates among the buyers. This process will not crash the market, but it has already broken the trend of 4-year cycles of strong growth during bitcoin’s halving years.

News background

According to QCP Capital, implied volatility in bitcoin options remains elevated due to the Trump-Harris debate and US consumer inflation data. Options market participants tend to be predominantly bearish into October.

Since August, USDT volume on cryptocurrency exchanges has been growing rapidly, which could potentially boost cryptocurrency prices, CryptoQuant noted. Previously, from March to July, the dynamics did not show significant fluctuations in turbulence.

According to journalist Colin Wu, total trading volume on the largest centralised exchanges increased by 30% in August. Turnover on the largest cryptocurrency platforms increased by 32%.

SEC recoveries in cryptocurrency-related enforcement actions increased 30-fold to a record $4.7 billion in 2024, largely due to a $4.47 billion settlement with Terraform Labs.

Japan-based Metaplanet announced the purchase of an additional 38,464 BTC ($2 million) at an average price of $54.786. Metaplanet’s reserves approached 400 BTC, with an average coin purchase price of around $66K over the period.

DOGS held the largest Meme Token Issue and Distribution (TGE) in the history of the crypto industry, leading to a surge in activity on the TON network. The DOGS meme token has 4.5 million unique holders.

Total commissions on the Solana network fell to a six-month low due to Pump. fun’s declining popularity.

• Gold looks for a bullish breakout above rectangle
• Bullish sentiment dominates; stability cannot be ruled out
• US CPI inflation figures due for release at 12:30 GMT

Gold rapidly approached the upper band of its three-week-old tight range at 2,530, increasing the possibility of entering unexplored territory.

The ball is still on the bulls’ court according to the technical indicators in the four-hour chart. The RSI is making a new higher high above its 50 neutral mark and the MACD is progressing within the positive area, though its near its previous peak, and the stochastic oscillator is fluctuating within the overbought region, keeping some skepticism in place.

Should the long-term uptrend resume above 2,530, the precious metal could ascend towards the resistance line at 2,565. Then, a decisive move higher could face a psychological test near the 2,600 level, a break of which could bring the 2,650 zone next into view.

In the event of a downside reversal, the 2,495 region, which encapsulates the 23.6% Fibonacci retracement of the July-August upleg, could act as support, preventing a drop towards the 200-day SMA and the lower band of the rectangle pattern at 2,470. The 38.2% Fibonacci mark is within this neighborhood. Therefore, a clear violation of this base might upset traders, forcing a rapid correction towards the 50% Fibonacci of 2,440 and the August 15 low of 2,332.

Overall, gold is trying once again to break free from its short-term horizontal path and reach new record highs, with the technical signals backing the current bullish attempt. 

• USDJPY confirms the bearish structure
• Next support at 140.20
• Momentum oscillators keep moving negative

USDJPY tumbled to a fresh nine-month low of 140.70 earlier today, boosting the bearish structure that started at the beginning of July. If the market ends the day below the 141.60 strong barrier, then the focus will shift to the 140.20 support, taken from the lows in December 2023. Steeper declines could pave the way for a test of the July 2023 trough at 137.20.

On the other hand, a rebound from 141.60 could add some optimism about an upside correction, hitting the 143.40 resistance ahead of the 20-day SMA at 144.80. Rising further, the area within 146.45-147.15, which encapsulates the 23.6% Fibonacci retracement level of the downward wave from 161.94 to 141.60, may pause the upside move.

Technically, the MACD oscillator dives beneath its trigger line in the negative territory, while the RSI points down, approaching the oversold zone.

In summary, USDJPY plunged to a lower low today, indicating a bearish scenario. Only a decisive jump above the 200-day SMA at 151.00 may switch the outlook to neutral. 

Gold price rose for the third consecutive day and came ticks ahead of new all-time high in early Wednesday’s trading.

Markets await the release of US August CPI report to complete the picture ahead of Fed policy meeting next week.

If Aug numbers come in line with expectations or better, it will signal that inflation remains in a downward trajectory and heading towards Fed’s 2% target, implying that 25 basis points cut will be likely scenario.

Markets widely expect the Fed to opt for three 0.25% rate cuts by the end of the year, though more aggressive action cannot be completely ruled out, amid recent weaker than expected US economic data which sparked fresh recession fears.

Overall, the yellow metal is expected to remain well supported by expected policy easing, as well as rising geopolitical tensions, which continue to fuel safe-haven demand.

Investors were not impressed by the US Presidential debate and prefer to stick to economic data rather than political promises.

Firmly bullish technical studies on daily chart are expected to contribute to positive outlook.

Although bulls will likely face increased headwinds at record high zone, eventual break above the top of multi-week consolidation range is seen as likely scenario.

Violation of $2431 peak will expose targets at $2554 and $2568 (Fibo projections) and round-figure barrier at $2600, which many analysts see as target for this year.

Near-term action is expected to remain biased higher while the price stays above psychological $2500 support, also the mid-point of the recent $2531/$2470 range.

Res: 2531; 2554; 2568; 2600.
Sup: 2514; 2507; 2500; 2480.