Fundamental & Technical Analysis by Coach Mark RoboAcademy during 5 – 9 August 2024

Hello everyone, welcome to the weekly analysis of currency pairs EUR/USD, GBP/USD, and XAU/USD for the second week of August, from 5 – 9 August 2024, 2024.

EUR/USD, “Euro vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting EUR/USD This Week:

European Economic Data:

• GDP Growth Rate: Recent data indicates that economic growth in the Eurozone is steady but slow. The European Central Bank (ECB) may be cautious, focusing on supporting growth while managing inflation.
• Inflation Data (CPI): Inflation remains slightly above the ECB’s target, which impacts their monetary policy decisions. Any signals of tightening or easing from the ECB will affect the EUR.
• Unemployment Rate: The unemployment rate is relatively stable but varies across regions. The economic health of major countries such as Germany and France will be closely monitored.

U.S. Economic Data:

• Federal Reserve (Fed) Policy: Recent Fed comments suggest pausing interest rate hikes if economic data supports it, which could put pressure on the USD if the market perceives it as a dovish stance.
• Economic Data: Upcoming key reports include the U.S. employment report and CPI data. Strong job growth or higher-than-expected inflation could strengthen the USD, while weak data might weaken it.
• Geopolitical Tensions: Increased geopolitical tensions may lead to a flight to safe-haven assets, which benefits the USD.

Technical Analysis

The current price is forming a minor uptrend and closed with a green candlestick last Friday. The U.S. economic data was not very strong, which has been a factor pushing EUR prices higher. 

Recommendation: Wait for a pullback and then follow with a buy. The price might adjust to the Fibo 0.618 level, around 1.08697. Observe the price action; if it confirms a buy signal, enter the trade immediately.

GBP/USD, “Great Britain Pound vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting GBP/USD This Week:

U.K. Economic Data:

• GDP Growth Rate: The economic growth in the UK is trending slowly, which might lead the Bank of England (BoE) to consider supporting the economy while managing inflation.
• Inflation Data (CPI): Inflation in the UK remains slightly above the BoE’s target, impacting monetary policy decisions. Adjustments in BoE’s monetary policy will affect the GBP.
• Unemployment Rate: The unemployment rate is relatively stable but there is still uncertainty in the labor market, which could impact the economy in the long term.

U.S. Economic Data:

• Federal Reserve (Fed) Policy: Recent Fed comments suggest the possibility of pausing interest rate hikes if economic data supports it, which could put pressure on the USD if the market perceives it as a dovish stance.
• Economic Data: Upcoming key reports include the U.S. employment report and CPI data. Strong job growth or higher-than-expected inflation could strengthen the USD, while weak data might weaken it.
• Geopolitical Tensions: Increased geopolitical tensions may lead to a flight to safe-haven assets, benefiting the USD.

Technical Analysis

On Thursday, August 1, the price confirmed a strong bearish candlestick. On Friday, August 2, following disappointing U.S. economic data, the price briefly adjusted upwards. However, from a technical perspective, the price could move in either direction. It’s advisable to wait for a clear signal on which direction to trade. Currently, the chart shows a gradual decline. You might consider looking for a selling opportunity. If the price cannot stay above the Fibo 50 level – 1.28272, it could be a sign that the price may continue to decline.

XAU/USD, “Gold vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting XAU/USD This Week:

U.S. Economic Data:

• Federal Reserve (Fed) Policy: Recent Fed comments suggest the possibility of pausing interest rate hikes if economic data supports it, which could weaken the USD and potentially strengthen gold (XAU) prices.
• Economic Data: Upcoming key reports include the U.S. employment report and CPI data. Strong job growth or higher-than-expected inflation could strengthen the USD and lead to a decrease in gold prices, while weaker data might drive gold prices higher.
• Geopolitical Tensions: Increased geopolitical tensions often lead to higher demand for gold as a safe-haven asset, which can strengthen XAU.

Technical Analysis

On Friday, August 2, the closing price saw significant volatility throughout the day, both before and after the release of economic data. The price tested a high of 2477 but was unable to sustain it and adjusted downward. Considering several factors, such as weak U.S. economic data and ongoing geopolitical conflicts in the Middle East, there could be potential for gold prices to test an all-time high (ATH).

Recommendation: Look for a pullback and enter a buy position when a clear price action signal appears. However, be cautious as the price may test lower levels, potentially down to 2400, or if more severe, to the liquidity zone around 2350.

Disclaimer: This article is solely an analysis from the coach at RoboAcademy and is not intended as investment advice in any way. Investing is risky. Investors should study the information before making investment decisions.