Bullish Pressure Is Not Sustainable

Central Bank

Forex

Summary:

On Wednesday in Europe, the U.S. Dollar Index (USDX) is exhibiting a moderate downward trend around 106.85. Market speculation regarding a more cautious stance from the Federal Reserve on interest rate cuts may provide some support for U.S. Treasury yields and the U.S. dollar.

SELL USDX

Close Time

CLOSED

107.390

Entry Price

104.600

108.100

107.570 -0.540 -0.50%

71.0

Pips

Loss

104.600

108.100

Exit Price

107.390

Entry Price

108.100

Fundamentals

The focus today is the FOMC interest rate decision, with the market widely anticipating a 25 basis point cut, bringing the federal funds rate down to a range of 4.25-4.50%. The likelihood of any alternative outcome appears negligible, thus all attention is directed towards the statements from Federal Reserve Chairman Powell and the latest economic forecasts. It is expected that the Fed will signal a slowdown in the pace of easing by 2025, aligning with signs of economic recovery and persistent inflation.

Today's new projections raise three critical questions.

First, there is concern regarding the potential for a pause in rate hikes in January. The market assigns an 84% probability to the likelihood of no change in rates at the next meeting, and any voting discrepancies within the FOMC may indicate how far policymakers are from pausing the easing cycle.

Second, attention will shift towards the easing trajectory anticipated for 2025. The Fed's previous forecasts and dot plot indicate that the median interest rate is expected to reach 3.4% by the end of next year. Currently, the market estimates a 33% probability that rates will decline to a range of 3.75-4.00% by December 2025. A significant upward revision in the Fed's median forecast would reflect a sustained cautious stance on inflation, aligning with a more contractionary monetary policy than previously anticipated.

Third, the neutral interest rate will undergo rigorous scrutiny. Earlier projections for long-term rates were set at 2.9%, slightly above the 2.8% forecast from June. Approaching or exceeding the 3% mark could carry substantial psychological implications, suggesting that baseline expectations for economic growth and inflation stability in a post-tightening policy environment would be elevated.

From a market reaction perspective, a "hawkish rate cut" from the Fed could simultaneously boost the 10-year Treasury yield and the USDX. However, today's decision alone may not suffice to break through the current trading range.

For the USDX, it is essential to surpass the resistance level of 108.07 to confirm potential bullish momentum, which may require the 10-year yield to exceed 4.505%. These breakthroughs could hinge on the clarity of the new government's fiscal and trade policies.

Trading Recommendations

Due to market expectations that U.S. interest rates will remain elevated, the U.S. dollar maintains an overall bullish momentum on the daily chart, contributing to a more optimistic outlook. Meanwhile, in shorter time frames, bulls are exerting pressure towards a recovery peak.

However, given that the time frames remain excessively "crowded," the market will encounter significant resistance in its ascent, with 107.50 serving as a formidable barrier that bulls are likely to struggle to surpass.

Trading Recommendations

Trading Direction: Sell

Entry Price: 107.39

Target Price: 104.60

Stop Loss: 108.10

Valid until: January 2, 2025 23:55:00

Support: 106.32, 106.00, 105.75, 105.37

Resistance: 106.86, 107.02, 107.41, 108.00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Australian Dollar (AUD) extends its losses against the US Dollar (USD) as market caution builds ahead of a key decision by the US Federal Reserve.

SELL AUDUSD

Close Time

CLOSED

0.63150

Entry Price

0.62100

0.63700

0.62483 +0.00129 +0.21%

12.3

Pips

Profit

0.62100

0.63027

Exit Price

0.63150

Entry Price

0.63700

The Australian Dollar (AUD) continued its downward trajectory against the US Dollar (USD) on Wednesday, marking its second consecutive day of losses. This decline reflects heightened caution among traders ahead of the highly anticipated US Federal Reserve (Fed) policy decision. The market is now almost fully pricing in a 25 basis point rate cut by the US central bank during its meeting later today, placing further pressure on the AUD as investors shift their attention toward the potential ripple effects of the Fed's actions on global financial markets.

As the market braces for the Fed's policy decision, attention is also turning to domestic factors impacting the Australian Dollar. Specifically, traders are increasingly betting on an earlier-than-expected interest rate cut by the Reserve Bank of Australia (RBA). The central bank has come under scrutiny amid concerns that Australia’s economic growth is slowing faster than anticipated. Recent market signals point to a possible rate cut as early as mid-2025, with some market participants even speculating that February 2025 could see the first cut. This speculation weighs heavily on the Aussie, adding to the broader risk-off sentiment in global markets.

The expectation that the RBA will deliver rate cuts in response to mounting economic pressures has been fueled by disappointing domestic data and global uncertainties. National Australia Bank (NAB) has maintained its forecast for the first rate cut in May 2025, though it acknowledged that earlier cuts remain a possibility depending on evolving economic conditions. NAB’s latest report indicated that Australia's unemployment rate is expected to peak at 4.3% before gradually easing, signaling a potential softening of labor market conditions. Inflation, which has remained above the RBA’s target, is projected to ease only slowly, with the trimmed mean inflation expected to come in at 0.6% quarter-on-quarter in Q4 2024, and gradually decline to 2.7% by late 2025.

Amid these developments, the AUD has struggled to find support, particularly as global market sentiment remains cautious ahead of the Fed’s decision. The USD remains solid, underpinned by the Fed's tightening cycle and a robust set of economic data from the United States. On Tuesday, the US Census Bureau reported a 0.7% month-on-month increase in retail sales for November, surpassing expectations and indicating continued resilience in the US economy. Additionally, the Retail Sales Control Group, which excludes volatile items such as autos and gas, rose by 0.4%, further underscoring the strength of US consumer spending.

These data points, coupled with the ongoing expectation that the Fed will implement a quarter-point rate cut, have bolstered the USD and weighed on the AUD. The Federal Reserve’s decision is expected to be followed closely by traders, particularly as they await remarks from Fed Chair Jerome Powell and the release of the Summary of Economic Projections (the dot plot), which will offer clues about future rate hikes or cuts.

On the Australian side, consumer sentiment has also shown signs of deterioration. Westpac’s Consumer Confidence Index fell by 2% to 92.8 points in December, reversing two months of positive momentum. This marks a worrying shift in sentiment, as higher interest rates and rising living costs continue to put pressure on Australian households.

Adding to the bearish outlook for the AUD is the growing risk from Australia’s key trading partner, China. Reuters reported that Chinese authorities have set a growth target of around 5% for 2025, maintaining the same target as the previous year. However, this target comes against a backdrop of increasing pressure on the Chinese economy. Data released from China on Tuesday revealed a mixed economic picture, with retail sales growing at a slower-than-expected 3.0% in November, compared to the expected 4.6%, while industrial production showed a stronger-than-anticipated rise of 5.4%.

The slower pace of retail sales growth and continued sluggishness in domestic demand highlight the broader structural challenges China faces, which have far-reaching implications for global trade and commodity markets. As China is Australia’s largest trading partner, any weakness in Chinese economic growth or a potential slowdown in demand for Australian exports could further undermine the Australian Dollar. Furthermore, the State Administration of Foreign Exchange (SAFE) in China reported a record $45.7 billion net outflow from China’s capital markets in November, signaling concerns over the health of the Chinese economy.

The Australian Dollar’s struggles are also compounded by ongoing concerns about broader global risks, including the potential impact of new tariffs on exports to the US. Despite these risks, Chinese authorities have pledged to focus on boosting consumption in an effort to stabilize the economy, but the lack of concrete details on fiscal support has left markets skeptical. This uncertainty adds to the downward pressure on the AUD, as traders seek safer assets in light of potential global economic headwinds.

Technical Analysis

On the technical side, the AUD/USD pair remains firmly in a bearish trend. The exchange rate is currently hovering around 0.6330, having recently broken yearly lows. Analysis of the daily chart shows that the pair is confined within a descending channel pattern, which reinforces the negative outlook. The 14-day Relative Strength Index (RSI) remains just above the 30 level, suggesting that bearish momentum is still in play. However, should the RSI fall below 30, it could signal an oversold condition, paving the way for a potential corrective bounce.

From a technical perspective, the Australian Dollar appears poised to test the 0.6300 level, with further declines likely if the support at that level gives way. The next key target for bears is seen at 0.6210, as the price remains pressured by the negative trendline and the EMA50, which continues to reinforce the bearish bias. A break above 0.6420 would be necessary to negate the bearish outlook and signal a potential bullish reversal on the shorter-term charts.

TRADE RECOMMENDATION

SELL AUDUSD

ENTRY PRICE: 0.6315

STOP LOSS: 0.63700

TAKE PROFIT: 0.6210

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The GBP/JPY pair has edged lower below the 195.00 mark in the wake of the latest UK inflation data, which showed an uptick in price pressures that align with expectations of the Bank of England (BoE) holding interest rates steady this week.

SELL GBPJPY

Close Time

CLOSED

195.000

Entry Price

190.000

197.000

196.400 -0.357 -0.18%

200.0

Pips

Loss

190.000

197.006

Exit Price

195.000

Entry Price

197.000

The British pound has been under modest pressure, retreating from the 195.00 psychological barrier against the Japanese yen in Wednesday’s European session. This decline came after the release of the United Kingdom's (UK) inflation figures for November, which showed that price pressures grew in line with expectations but were not high enough to prompt a shift in the Bank of England's (BoE) policy stance.

The UK's annual Consumer Price Index (CPI) recorded a rise of 2.6% year-on-year in November, a significant increase from October’s 2.3%. While this represents a marked acceleration in inflation, it was in line with market expectations and did not surpass the BoE's tolerance for price growth. On a month-on-month basis, headline CPI increased by just 0.1%, below the 0.4% rise seen in the prior month. The core CPI, which strips out volatile food and energy prices, rose by 3.5% on an annual basis, surpassing October’s 3.3% but still coming in below expectations of 3.6%.

These inflation figures reinforce the view that the BoE is likely to maintain its policy rate at 4.75% during its upcoming meeting on Thursday. As market expectations indicate, eight members of the BoE’s Monetary Policy Committee (MPC) are expected to vote for keeping interest rates unchanged, while the remaining member, Swati Dhingra, is anticipated to advocate for a rate cut of 25 basis points, bringing the borrowing rate down to 4.50%. The BoE’s continued hold on rates would be a cautious approach in light of mixed inflation signals and the ongoing impact of its previous tightening cycle.

While UK inflation data may offer some clarity regarding the BoE’s likely inaction, the movement in GBP/JPY has been influenced by broader market dynamics. Investors are also looking ahead to the Bank of Japan’s (BoJ) policy decision scheduled for Thursday. As with the BoE, the BoJ is expected to keep its policy rate unchanged at 0.25%, maintaining its ultra-loose monetary policy stance. This is likely to provide stability for the Japanese yen in the near term, as the market remains uncertain about any potential shifts in BoJ policy in the coming year.

Attention will remain on BoJ Governor Kazuo Ueda’s press conference following the meeting, where investors will closely monitor any signals regarding the central bank's future policy trajectory. The BoJ has refrained from tightening monetary policy, and markets are looking for hints about whether the BoJ may raise interest rates in 2025 in response to the potential inflationary pressures coming from global trade dynamics, especially with the expected tariff hikes by U.S. President-elect Donald Trump. The prospect of such policy shifts could affect the Japanese yen’s direction in the longer term.

Technical Analysis

From a technical standpoint, the GBP/JPY pair has recently surrendered to the resistance at the 195.85 level, which is proving to be a significant barrier for the pair. This has resulted in the formation of correctional bearish trades, which is consistent with previous expectations. As of now, the pair is trading near the 194.80 level, confirming that a downward trend is developing.

The ongoing negative momentum indicated by the stochastic oscillator suggests that the current bearish trend may persist. Should the pair continue to move lower, the next target would be the 190.00 support level, a break of which would likely trigger further declines. Such a move could pave the way for a more substantial negative wave, targeting the 192.90 level in the coming days.

In terms of intraday trading, the expected range for GBP/JPY today is between 193.50 and 195.40, with the bearish trend forecasted to persist for now.

TRADE RECOMMENDATION

SELL GBPJPY

ENTRY PRICE: 195.00

STOP LOSS: 197.00

TAKE PROFIT: 190.00

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The New Zealand Dollar (NZD) continues its downward trajectory, trading around 0.5740 against the US Dollar (USD) early Wednesday, driven by market caution ahead of the US Federal Reserve's interest rate decision.

SELL NZDUSD

Close Time

CLOSED

0.57300

Entry Price

0.56000

0.58000

0.56488 +0.00194 +0.34%

11.6

Pips

Profit

0.56000

0.57184

Exit Price

0.57300

Entry Price

0.58000

The New Zealand Dollar (NZD) continues to slide as market participants express growing caution in anticipation of the Federal Reserve's (Fed) decision on interest rates later today. This is the second consecutive day of losses for the NZD/USD pair, which is hovering near 0.5740 in early European trading. This persistent weakness can largely be attributed to heightened risk aversion in the market, as traders brace for potential changes in US monetary policy and evaluate external pressures on the New Zealand economy.

The US Dollar, while traditionally a safe-haven asset during periods of uncertainty, has not seen significant strength despite the prevailing market caution. This is largely because expectations are mounting that the Fed will announce a 25 basis point rate cut during its December meeting. The CME FedWatch Tool, which tracks market expectations for future rate hikes or cuts, now indicates an almost 100% probability of such a move. This shift in market sentiment has left traders focused on the broader economic narrative, particularly the potential impact on US economic growth and inflation.

The Fed’s decision will be closely scrutinized, and traders are particularly eager to hear from Fed Chair Jerome Powell during the press conference that follows the meeting. His commentary, along with the release of the Summary of Economic Projections (often referred to as the “dot plot”), will provide key insights into the central bank’s outlook on the economy and future monetary policy. Given that market conditions are already pricing in a cut, any deviation from this expectation could lead to sharp market reactions, especially in the currency space.

On the other side of the equation, the NZD is also facing significant challenges stemming from the broader global economic environment. One of the most pressing concerns for the New Zealand currency is the economic health of its largest trading partner, China. Weak economic data out of China has sparked fresh worries over the country's economic recovery and the implications this has for New Zealand's export-driven economy. The November retail sales data from China, which missed market expectations, has added to the strain on global growth prospects. This comes at a time when Chinese President Xi Jinping has emphasized the need to bolster household consumption as a key pillar of the nation's economic strategy. However, the latest figures suggest that achieving this goal may take longer than expected, particularly as domestic demand continues to underperform.

The interplay between China’s economic performance and New Zealand's export sector is a critical factor for the NZD. Any further signs of weakness from China could prompt a reassessment of growth prospects for New Zealand and, by extension, a further depreciation of the Kiwi Dollar. This downside pressure is compounded by ongoing concerns about the broader global economic slowdown, which is increasingly becoming a narrative for many economies heavily reliant on international trade.

Looking ahead, the market will also be paying close attention to domestic economic data from New Zealand. On Thursday, New Zealand's third-quarter Gross Domestic Product (GDP) data will be released, and the consensus expectation is for a contraction of 0.4% quarter-over-quarter. This contraction could raise questions about the resilience of the New Zealand economy and further weigh on the NZD. A weak GDP print would underscore the challenges facing the country and add to the broader sense of economic uncertainty that has already gripped the currency markets.

However, it's not all negative news for New Zealand. A recent survey from Westpac showed that consumer confidence in the country improved to a three-year high in the fourth quarter, rising to 97.5 from 90.8 in the previous quarter. While this is a positive development, it is important to note that the index still remains below its long-term average, suggesting that while sentiment has improved, New Zealanders may still harbor reservations about the overall economic outlook. This mixed sentiment may help cushion the NZD to some extent, but it is unlikely to be enough to reverse the prevailing bearish trend unless supported by a stronger global economic recovery or a shift in monetary policy expectations.

Technical Analysis

From a technical perspective, the NZD/USD pair remains entrenched in a bearish trend, with the recent move towards the 0.5740 level aligning with previous expectations of downward pressure. The price action appears to be following a defined bearish channel, with the pair now targeting further negative objectives in the near term, potentially reaching the 0.5600 level. Traders should remain cautious, as the market appears to have a firm bearish bias, especially in light of the factors outlined above.

However, the bearish outlook could face a temporary interruption if the pair breaks above the 0.5825 resistance level. Such a move could trigger some short-term bullish correction, offering brief relief to the New Zealand Dollar before the overarching bearish trend resumes. For now, though, the prevailing sentiment remains negative, with traders likely to continue favoring the downside unless new economic data or Fed commentary suggests a shift in the macroeconomic landscape.

The expected trading range for today is between support at 0.5690 and resistance at 0.5780. Should the market test the lower end of this range, a further extension of the bearish move is likely. Conversely, any break above the 0.5825 resistance level could prompt a short-term reversal, though this should be viewed as a potential opportunity for traders to re-enter the market on the short side once the bullish correction is exhausted.

TRADE RECOMMENDATION

SELL NZDUSD

ENTRY PRICE: 0.5730

STOP LOSS: 0.5800

TAKE PROFIT: 0.5600

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

OPEC+ extends production cuts, but Kazakhstan, the largest oil producer in Central Asia, still plans to increase production. Meanwhile, Trump vows to boost domestic oil reforms post-inauguration, escalating supply concerns.

SELL WTI

EXP

TRADING

70.106

Entry Price

65.800

71.600

69.447 +0.305 +0.44%

0.0

Pips

Flat

65.800

Exit Price

70.106

Entry Price

71.600

Fundamentals

Supply Side:

Amidst ongoing OPEC+ production cuts, Saudi Arabia is extending cuts for three months to support prices. Yet, Kazakhstan, a significant Central Asian oil producer, aims to hike 2025 oil output to 97.2 million tons. Mexico's oil platforms returning to operation add to supply expectations.

Moreover, incoming President Trump pledges to spur domestic oil and gas development reforms immediately upon taking office on January 20th, intensifying oversupply pressure in a saturated market.

Demand Side:

Retail sales data from Asia's largest oil consumer fueled demand concerns, alongside EIA downgrading future oil demand forecasts. Chinese retail sales grew 3% YoY in November, below the 4.6% expectation, a slowdown from October's 4.8%.

At the same time, the market attention shifts to the pace of Fed rate cuts next year. Once Trump assumes power, the Fed's easing steps might slow, curtailing oil demand recovery prospects.

Technical Analysis

Heading to $65 with Short-term Bearishness _1

Based on the 4-hour chart, WTI crude oil trades within the 71.00-61.00 range, with declining highs, signaling weak bullish momentum. Market sentiment leans bearish, potentially forming a head and shoulders top pattern.

Now, should WTI weaken below 70.10 with a bearish close, the right shoulder will be formed. When it breaks through the neckline at 68.80, the initial support will be at 66.80. Falling past 66.80, the asset might touch 65.00.

Trading Recommendations

Trading direction: Sell

Entry price: 70.10

Target price: 65.80

Stop loss: 71.60

Valid Until: January 1st 2025, 23:00:00

Support: 68.76/67.52/66.51

Resistance: 70.29/70.94/71.36

Risk Warnings and Disclaimers

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Manuel

Economic

Central Bank

Summary:

The Relative Strength Index (RSI) has dropped to 32, approaching oversold territory, and is accompanied by divergence at current levels, previous lows saw higher RSI readings, suggesting weakening bearish momentum.

BUY XAUUSD

Close Time

CLOSED

2623.96

Entry Price

2720.00

2590.00

2623.41 +28.97 +1.12%

339.6

Pips

Loss

2590.00

2589.99

Exit Price

2623.96

Entry Price

2720.00

The United States reported stronger-than-expected November Retail Sales, which rose by 0.7%, surpassing the forecasted 0.5%. However, this positive result failed to provide significant momentum for the U.S. dollar. On the downside, the Capacity Utilization Rate dropped to 76.8% in November, missing the estimated 77.3%. Industrial Production also contracted by 0.1% during the same period, falling short of the expected 0.3% growth, reflecting persistent challenges in the sector.

November's decline in industrial output signals continued contraction, underscoring the sluggish recovery in U.S. manufacturing. Additionally, the NAHB Housing Market Index for December is set to be released at 15:00 GMT, with expectations of a marginal increase to 47 from 46 in the previous month, signaling cautious optimism in the housing sector.

The yield on the U.S. 10-year Treasury note currently trades at 4.38%, retreating from a three-week high of 4.43%, highlighting reduced market risk appetite as investors anticipate the Federal Reserve's upcoming policy decision.

Attention now shifts firmly to the Federal Reserve, which is widely expected to lower its benchmark interest rate by 25 basis points (bps) when it announces its monetary policy decision on Wednesday. Alongside this, the Fed will release its Summary of Economic Projections (SEP), providing updates on key forecasts for growth, inflation, employment, and its anticipated rate trajectory. The FedWatch tool from CME indicates a 99% probability of this rate cut, which has been largely priced into the market. Furthermore, speculation about rate cuts totaling 100 bps by 2025 continues to drive market sentiment.

While lower interest rates generally support gold prices by reducing the opportunity cost of holding non-yielding assets, the U.S. dollar’s relative stability has limited the metal's upward potential. Despite easing Treasury yields, gold remains under pressure as market participants weigh the implications of potential policy shifts and economic uncertainties.

Speculation is also rising that fiscal expansion policies under the upcoming U.S. administration could trigger higher inflation, potentially influencing Federal Open Market Committee (FOMC) members to adjust their projections. Buying From Channel Lows Ahead of the Fed's Decision_1

Buying From Channel Lows Ahead of the Fed's Decision_1

Technical Analysis

Gold appears to be trading within a lateral channel, defined by resistance around $2,721, a level reached on two separate occasions—November 24 and December 11. Support is marked by the November 25 low of $2,605, followed by a slightly higher low of $2,612 on December 8, signaling bullish resilience as no new lows have been formed.

The Relative Strength Index (RSI) has dropped to 32, approaching oversold territory, and is accompanied by divergence at current levels. Previous lows saw higher RSI readings, suggesting weakening bearish momentum. Meanwhile, the 100- and 200-period moving averages hover just above $2,654, reinforcing the potential for continued range-bound movements and providing a pivot for possible rebounds.

A sustained break below $2,605 would invalidate this setup, opening the door to further declines. Conversely, a rebound from current levels could aim for the $2,721 resistance zone once again. For now, traders should monitor these key levels closely, as they are likely to shape gold's next significant move.

Trading Recommendations

Trading direction: Buy

Entry price: 2624

Target price: 2720

Stop loss: 2590

Validity: Dec 27, 2024 15:00:00

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

The market was pressured by the recovery of the AUD thanks to positive economic data in Australia and a stable monetary policy outlook from the Reserve Bank of Australia (RBA). Meanwhile, the EUR remained under pressure from the dovish policy decisions of the European Central Bank (ECB)...

SELL EURAUD

Close Time

CLOSED

1.65560

Entry Price

1.65000

1.65900

1.66779 +0.00693 +0.42%

34.0

Pips

Loss

1.65000

1.65900

Exit Price

1.65560

Entry Price

1.65900

On December 18, 2024, the EUR/AUD exchange rate was trading at 1.6556, down slightly from the previous session. The AUD was supported by positive factors, including strong labor data and higher prices for iron ore - Australia's main export - over the past week. On the contrary, the EUR was under pressure after the ECB decided to keep interest rates low and signaled continued loose monetary policy to stimulate the Eurozone economy.

Recent data shows that the Australian economy remains stable with the unemployment rate falling to 3.9%, lower than the forecast of 4.1%. This reinforces confidence in the Australian economic outlook and increases the attractiveness of the AUD compared to the EUR.

Market psychology

Current market sentiment is biased towards the AUD as investors value Australia’s economic stability over the uncertainties in the Eurozone. Investors have reacted positively to Australian employment data and expectations that the RBA will keep interest rates on hold in the near term, rather than cutting them as some had previously predicted.

Meanwhile, the EUR continues to be under pressure from internal factors such as slow economic growth and inflation below the ECB's target. With the ECB maintaining a dovish stance, capital is gradually shifting from the EUR to higher-yielding assets such as the AUD.

Technical analysis

EUR/AUD Drops Sharply: Will the Downtrend Continue?_1

On the H1 chart, the EUR/AUD pair is hovering below the Ichimoku cloud – a negative signal that suggests the downtrend is still dominant in the short term.

Price is below the Ichimoku cloud, confirming the bearish trend. The future cloud is also tilted to the negative with a clear downward slope.

The price is currently hovering near the middle of the Bollinger Bands but has yet to break above the resistance zone at 1.6575. The Bollinger Bands have not widened significantly, suggesting that price volatility may remain moderate.

The Stochastic indicator (5,3,3) has left the overbought zone and is crossing below the signal line, signaling the possibility of further downward correction in the short term.

If the price fails to break above the resistance zone at 1.6575, the downtrend will continue with the first target being the support zone at 1.6500 – where the MA50 line on the H1 timeframe converges.

Trading Recommendations

Based on technical and fundamental analysis, EUR/AUD is in a clear downtrend with the pressure from the recovery of AUD and the pressure from the ECB's dovish monetary policy on EUR. If the exchange rate fails to break the resistance zone at 1.6575, the downtrend is likely to continue in the short term.

Entry: Sell at current levels around 1.6556 or when price retests strong resistance at 1.6575.

Take Profit: Set profit target at nearest support zone at 1.6500 or deeper at 1.6450 if selling pressure increases.

Stop Loss: Place stop loss above the key resistance at 1.6590 to protect capital in case price breaks to the upside.

Risk Warnings and Disclaimers

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Bullish Pressure Is Not Sustainable

Fundamentals

Trading Recommendations

Trading Recommendations

Australian Dollar Faces Continued Pressure Amid Market Caution and Fed Expectations

Technical Analysis

GBP/JPY Edges Lower Ahead of BoE Decision and BoJ Policy Meeting

NZD/USD Faces Persistent Weakness Amid Market Caution and Fed Rate Cut Speculation

Technical Analysis

Heading to $65 with Short-term Bearishness

Fundamentals

Technical Analysis

Trading Recommendations

Buying From Channel Lows Ahead of the Fed's Decision

Technical Analysis

EUR/AUD Drops Sharply: Will the Downtrend Continue?

Market psychology

Technical analysis

Trading Recommendations

Risk Disclosure