Fundamental & Technical Analysis by Coach Mark RoboAcademy during 4 – 8 November 2024

Hello everyone, welcome to the weekly analysis of currency pairs EUR/USD, GBP/USD, and XAU/USD for the second week of November, from 4 – 8 November 2024.

EUR/USD, “Euro vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting EUR/USD This Week:

European Economic Data:

• German Manufacturing PMI (4 November): This index is a key indicator of Germany’s economic health, the largest economy in Europe. If the index comes out higher than expected, it will positively impact the euro, reflecting economic growth. However, if it is lower than expected, the euro may face downward pressure.
• Eurozone Retail Sales (5 November): Retail sales reflect consumer confidence and purchasing power in the Eurozone. If retail sales exceed expectations, it will support the euro due to increased consumption. Conversely, if sales fall short, the euro may weaken against the U.S. dollar.
• German Services PMI (6 November): If Germany’s Services PMI exceeds expectations, it will boost confidence in the Eurozone economy and support the euro. However, if the figure is lower than expected, the euro may face negative pressure.
• Eurozone Services PMI (6 November): This index measures growth in the Eurozone’s services sector, playing a critical role in economic assessment. If the index is higher than expected, the euro is likely to strengthen. If it falls below expectations, the euro may weaken against the U.S. dollar.
• ECB Meeting (7 November): If the European Central Bank (ECB) signals a rate hike to curb inflation, the euro is likely to strengthen. However, if the ECB continues to focus on a dovish monetary policy, the euro may weaken against the U.S. dollar.

U.S. Economic Data:

• US Initial Jobless Claims (7 November): If U.S. jobless claims are higher than expected, the dollar may weaken, which would be positive for the euro against the U.S. dollar. However, if the data comes in better than expected, the dollar is likely to strengthen, potentially putting pressure on the euro.
• University of Michigan Consumer Sentiment Index (8 November): This index reflects U.S. consumer confidence, a key indicator of the economic outlook. If the index is higher than expected, the dollar may strengthen due to improved confidence in the U.S. economy, which could weaken the euro. Conversely, if the index falls short of expectations, the euro may benefit from a softer U.S. dollar.

Technical Analysis

The price has bounced up to test the Order Block on the weekly timeframe but has since been rejected and is now moving down again. It is expected to continue declining towards the support level at 1.07770 to test this zone again, which presents an opportunity to enter a short-sell position for quick profits. 

However, caution is advised; if the price reaches the support level, it may bounce back. If clear Buy signals appear in this support zone, it could also be a good opportunity to consider entering a Buy order.

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

Fundamental Analysis

Significant Economic Events Impacting GBP/USD This Week:

U.K. Economic Data:

• UK Manufacturing PMI (November 4): This index reflects the economic conditions of the UK manufacturing sector. If the index comes in higher than expected, the pound is likely to strengthen against the US dollar. Conversely, if it is lower than expected, the pound may weaken.
• UK GfK Consumer Confidence Index (November 5): This indicator reflects consumer confidence levels in the UK. A higher-than-expected index would be a positive signal for the pound, indicating increased consumer spending. However, if confidence decreases, the pound may face downward pressure.
• UK Services PMI (November 6): The services sector is a key part of the UK economy. If the Services PMI comes in above expectations, the pound is likely to appreciate. If it falls below expectations, the pound may weaken.
• BoE Meeting (November 7): This meeting is crucial for determining the direction of the pound. If the Bank of England (BoE) signals an interest rate hike, the pound may strengthen. Conversely, if the BoE maintains a loose monetary policy, the pound could weaken.

U.S. Economic Data:

• US Services PMI (November 6): This index is a crucial indicator reflecting the economic conditions in the US services sector. If the figures come in higher than expected, the dollar is likely to strengthen, which may pressure the pound to weaken. However, if the numbers are below expectations, the pound may gain support.
• US Initial Jobless Claims (November 7): This figure indicates the state of the labor market in the US. If the number of jobless claims comes in higher than anticipated, the dollar may weaken, which could lead to a strengthening of the pound. Conversely, if the number is lower than expected, the pound may face downward pressure.
• University of Michigan Consumer Sentiment Index (November 8): This index reflects the level of consumer confidence in the US. If the index comes in higher than expected, the dollar is likely to strengthen, which may put pressure on the pound to decline. However, if the figures are lower than expected, the pound may be supported by the dollar’s weakness.

Technical Analysis

The price continues to move as planned from last week, showing a consistent downward trend. Entering Sell positions remains a viable strategy, targeting a test of the support level at 1.28000. 

However, caution is advised, as there may be minor support levels in the smaller timeframes that could lead to a potential price bounce. Therefore, it’s important to closely monitor signals and adjust strategies according to the situation.

XAU/USD, “Gold vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting XAU/USD This Week:

Economic Data Related to Gold:

• U.S. Manufacturing PMI (November 4): This index signals the economic conditions in the U.S. If the numbers come in better than expected, it may pressure gold prices to decline, as investors may shift to riskier assets. However, if the figures are worse than expected, it could support gold prices as investors turn to safer assets.
• Eurozone Retail Sales (November 5): Retail sales reflect consumer confidence in the Eurozone. If retail sales decline, the euro may weaken, leading to a stronger dollar and putting pressure on gold prices.
• U.S. Services PMI (November 6): If the U.S. services PMI exceeds expectations, it will support the dollar and may pressure gold prices to fall. Conversely, if the figures are lower than expected, gold prices may gain support due to economic uncertainty and a shift towards safe-haven assets.
• U.S. Initial Jobless Claims (November 7): If the numbers are higher than anticipated, it will indicate poor conditions in the U.S. labor market, potentially supporting gold prices due to economic uncertainty. Conversely, if the figures are lower than expected, it may pressure gold prices due to a strengthening economy.
• Bank of England (BoE) Meeting (November 7): If the BoE signals a rate hike, it may lead to a weaker dollar, providing support for gold prices due to dollar depreciation.
• University of Michigan Consumer Sentiment Index (November 8): If U.S. consumer sentiment is higher than expected, the dollar may strengthen, putting pressure on gold prices. However, if sentiment declines, gold prices may gain support as investors turn to safe-haven assets.

Technical Analysis

The gold price closed negatively last Friday, despite the Non-Farm Payroll numbers being significantly lower than expected. Surprisingly, the dollar still strengthened, leading to the possibility that prices may test the support zone around 2722-2700, which could also serve as a potential buy area.

Overall, there are no clear signs of a downward trend, so a Buy on dip strategy is recommended. This means entering buy orders if the price pulls back or setting buy limits at the support levels on smaller timeframes to increase profit opportunities. However, caution is advised if gold prices experience a sharp decline that could sweep stop-loss orders.

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.