Early fears in European fixed income markets spread to the United States markets yesterday, leading to some risk aversion and some gains in the US dollar. With Treasury rates significantly lower than last month, there were concerns about a tail risk in the $69 billion auction. However, those fears were unfounded, as the auction saw strong bidding just before the deadline and again after a 0.6 basis point stop through.
This outcome validated the lower yield range and supported the Fed’s aggressive monetary stance. As a result, dollar sellers returned with renewed energy, pushing the dollar down by 15-25 pips and boosting gold into positive territory. Earlier, economic data had played a minimal role in market movements. The focus was on the consumer confidence survey and other upcoming reports, but there were no major surprises.
Today’s Market Expectations
The Australian Monthly CPI is expected to increase to 3.4% year-on-year, up from the previous 3.8%. Despite this, the Reserve Bank of Australia (RBA) continues to hold a hawkish stance, even as the market anticipates at least one interest rate cut before the year’s end.
We also have the Nvidia earnings today. Analysts predict that Nvidia will report earnings per share (EPS) of $0.63 on revenues of $28.35 billion. The tech giant is expected to provide guidance for Q3 with an EPS of $0.69 and revenue of $31.18 billion. For the full year, Nvidia projects an EPS of around $2.70 and total sales of $120.14 billion. Analysts expect a strong earnings report, driven by sustained demand for AI technologies, though concerns about potential supply chain delays persist. Oppenheimer forecasts strong Q2 results and a positive Q3 outlook, supported by growth in Nvidia’s data center segment.
Yesterday we had a great day with forex signals, ending up with a full table of winning forex signals. The price action was slow again, but most markets were directional, so they were relatively easier to trade. We opened 9 trading signals, 7 of which closed by the end of the day, all of which reached the take profit targets.
Gold Keeps Returning Above $2,520
Gold reached a new high of $2,531 earlier this week but then sharply declined to $2,470 after a $60 drop on Thursday. This pullback followed positive U.S. economic data, including a revival in home sales that reversed the previous month’s downturn and a Services PMI that soared above 55 points, indicating robust growth in the services sector. Despite these positive economic signals, Fed Chairman Jerome Powell’s dovish stance sent gold back above $2,500. Buyers regained control on Wednesday, pushing the price up to $2,526.
XAU/USD – Daily chart
AUD/USD Reaches July’s High
The Australian dollar has shown unexpected strength this month, with the AUD/USD pair rising 4.5 cents from its early-August low, where it fell below 0.6350, marking the year’s lowest level. The pair quickly rebounded, gaining more than 400 pips and surpassing the upper boundary of its previous range near 0.67. It reached its highest level of the year yesterday, approaching 0.68, before taking a pause as investors awaited Australia’s July CPI inflation report.
AUD/USD – Daily Chart
Cryptocurrency Update
Bitcoin Starts to Reverse Lower at the 200 Daily SMA
Bitcoin has rebounded from its early-August drop, with buyers gradually pushing the price past $62,000 and recently nearing $65,000. However, Bitcoin faces resistance from the 100-day and 200-day simple moving averages (SMAs), which are crucial hurdles to overcome and it reversed lower this week after forming an upside-down pin, which is a bearish reversing signal after the climb.
BTC/USD – Daily chart
Ethereum Remains Subdued by the 20 Daily SMA
Ethereum has been in a downtrend since March, characterized by lower highs, suggesting the possibility of further declines in August. After dropping from $3,830 to below $3,000, Ethereum briefly climbed above the 50-day SMA in June, but persistent selling led to another downturn. The price dipped below the 200-day SMA before recovering above $2,600. Currently, buyers are testing the 20-day SMA, setting the stage for a potential battle between bulls and bears to determine the market’s direction.
ETH/USD – Daily chart
