NZD/USD Weakens Below 0.5700 on Rbnz’s Dovish Stance

Natural gas broke resistance zone

Likely to rise to resistance level 4.400

Natural gas recently broke through the resistance zone at the intersection of the resistance trendline of the daily up channel from November and the resistance levels 3.800 and 4.000 (which have been reversing the price from December).

The breakout of this resistance zone accelerated the active impulse waves iii, 3, which belong to the medium-term impulse wave (3) from November.

Given the clear multi-month uptrend, Natural gas can be expected to rise to the next resistance level 4.400 (target price for the completion of the active impulse wave (3)).

Source: ACTIONFOREX

“We’re still in a bull cycle. The price would eventually go up, but the range seems broad. I personally think that the bull cycle could continue even with a -30% dip from ATH (e.g., 110K → 77K), as seen in past cycles.”

“A deeper correction could be multiple months or even a year away.”

BTC/USD comparison (screenshot). Source: CryptoQuant

Source: Cointelegraph

Above: GBPEUR at daily intervals. The exchange rate is at its highest level since January 02.

Above: UK CPI inflation is ticking higher again, confirming a sustained fall to 2.0% remains elusive.

Above: Services inflation is sticky and too high, unless it falls, the headline CPI rate of inflation won't fall to the 2.0% target.

Inflation Could Rise to 4.0%, Forcing a Pause at the Bank of England

Source: Poundsterlinglive

Source: TheGuardian

Gold jumps higher for a third straight day in a row and hits a new all-time high on Wednesday.

US President Donald Trump blamed Ukraine and committed again to several tariffs. 

Technically, Tuesday’s daily close above $2,910 worked, boosting the Gold price to a fresh all-time high.

Gold’s price (XAU/USD) sees its winning streak going forward this week and hits a fresh all-time high at above $2,945 during the European trading session on Wednesday. The up-move comes after United States (US) President Donald Trump’s harsh words on Ukraine overnight, just hours after first talks between the US and Russia officials raised concerns among traders if a peace deal is even in the cards. Meanwhile, President Trump confirmed again that 25% tariffs on automobile imports are coming, extending to pharmaceutical and semiconductor imports in addition. 

Meanwhile, the Federal Reserve (Fed) is set to release the Federal Open Market Committee (FOMC) Minutes for the January meeting. This could throw a spanner in the works for Gold, as several Fed officials have said in recent weeks that rates are reasonable where they are while some inflationary forces are enough for renewed concerns.

Daily digest market movers: Tariffs broadening

At 19:00 GMT, the Fed will release its January FOMC Minutes. 

Late Tuesday, US President Donald Trump pledged to impose tariffs on automobiles, semiconductors, and pharmaceutical imports of around 25%, Bloomberg confirmed. 

Turkish Gold miner Koza Altin aims to produce more than 40 tons of Gold in the next five years, the company says in an exchange filing after the market closed on Tuesday, Bloomberg reports.

The US 10-year benchmark is trading at the high of this week, near 4.56% at the time of writing. 

Technical Analysis: Fed to be reason for concern

Gold is playing a dangerous game on Wednesday after reaching a fresh all-time high above $2,945. With the Fed Minutes for the January meeting being released later in the day, risk is building for an event that might push Gold back lower. From a technical point of view, this could be considered a rejection at the all-time high and might see sellers drive prices further down. 

The daily Pivot Points have been reshuffled. The first support is seen at $2,921, which is the daily Pivot Point. It has already served as support during the Asian trading session. Should this level come under threat again, the S1 support at $2,906 could do its duty. 

On the upside, the R1 resistance at $2,951 is the first barrier. The R2 resistance at $2,966 is the next level to be reached before considering the $3,000 mark.

XAU/USD: Daily Chart

Source: FXSTREET

Australian Dollar (AUD) continued to trade near recent highs post-RBA cut yesterday. RBA cut its OCR by 25bps as expected, citing restrictive financial conditions 'which is weighing on demand and is helping to bring down underlying inflation'. The tone of the statement is somewhat balanced but still underscores our view that the rate-cutting cycle is likely to be a shallow one. AUD was last at 0.6360 levels, OCBC's FX analyst Christopher Wong notes.

Bullish momentum on daily chart intact

"RBA opined that 'the labour market has remained strong” and revised down unemployment rate to 4.2% from 4.4% previously anticipated. Labour cost growth has eased but remains high. At the press conference, Governor Bullock emphasised that the decision to cut rates 'do not imply that future rate cuts along the lines suggested by the market are coming' and later described market pricing as 'unrealistic'."

"She mentioned that the board will need more data that inflation is continuing to decline. RBA reiterated that they would highly prioritise 'sustainably returning inflation to target', and cautioned that 'disinflation could stall, and inflation would settle above the midpoint of target range'."

"Overall, we continue to view RBA rate cut cycle as shallow and is in a no-hurry-to-cut type of easing path. Bullish momentum on daily chart intact while RSI is near overbought conditions. 2-way trades likely. Resistance at 0.6370, 0.6420 (100-DMA). Support at 0.6310, 0.6280 (21-DMA)."

Source: FXSTREET