XAU/USD Current price: $2,026.93 Odds for a Federal Reserve May rate cut continue to decrease, weighing down sentiment. The US Dollar eases alongside government bond yields, Wall Street trades with a soft tone. XAU/USD consolidates gains near $2,030, buyers may push further up. Spot Gold extends its upward route on Tuesday, posting gains for a fourth consecutive day. XAU/USD trades around $2,030, its highest in over a week. The US Dollar suffers from mounting speculation the Federal Reserve (Fed) will keep rates higher for longer, as officials have been anticipating. Investors bet against the Fed amid signs of a resilient United States (US) economy, but policymakers never stopped warning against such bets. The CME Group FedWatch Tool now shows market players are moving their bets towards June. The odds for a 25 basis points (bps) March rate cut had decreased to 34.4%, while June ones increased to 55.1%. The US Dollar is not the only one on the back foot. Wall Street also trades in the red, although losses remain contained amid earnings reports partially offsetting the dismal mood. Finally, it is worth adding government bond yields recovered ground, with lower yields adding to the broad USD weakness. XAU/USD short-term technical outlook The daily chart for the XAU/USD pair shows an increased bullish potential. The bright metal is trading above its 20 Simple Moving Average (SMA) for the first time in over a week. At the same time, the longer moving averages gain upward traction far below the current level, with the 100 SMA providing dynamic support at around $1,995.35. Finally, the Momentum indicator remains directionless, just below its 100 level, but the Relative Strength Index (RSI) indicator maintains its bullish slope at around 51, skewing the risk to the upside. In the near term, and according to the 4-hour chart, XAU/USD lost momentum but holds on to gains, limiting the risk of a steeper slide. The 20 SMA heads firmly north, far below the current level, reflecting the ongoing momentum,  while the longer moving averages remain directionless. XAU/USD hovers around a flat 200 SMA. Technical indicators, in the meantime, eased from near overbought readings, reflecting the ongoing retracement rather than suggesting an upcoming leg south. Support levels: 2,011.40 1,995.35 1,976.50 Resistance levels: 2,032.50 2,045.20 2,064.90 

EUR/USD Current price: 1.0804 Market players await a fresh directional catalyst after central banks' frenzy. A scarce macroeconomic calendar adds to the absence of fresh clues. EUR/USD struggles to extend gains beyond 1.0800 but bulls not giving up. The EUR/USD pair reached a fresh three-week high of 1.0809 mid-European session, as the US Dollar retained its broad weakness. Demand for the Euro, however, remains subdued, with the pair still confined to a well-limited intraday range. Speculative interest struggles to find directional clues after understanding central banks will take time to loosen the monetary policy. Global policymakers have entered a wait-and-see stance regarding monetary policy, although the reasons behind the decisions differ. On the one hand, the European Central Bank (ECB) paused tightening amid increased recessionary risks. The latest macroeconomic data somehow confirms the downturn in the Eurozone is still far from over. The ECB should hike rates further, but the economy won't stand it. On the other hand, the Federal Reserve (Fed) also stayed pat amid concerns that excessive tightening could affect growth. The big difference is that the United States' (US) economy proved to be in much better shape than the EU's, giving the Fed more time to assess its latest measures without risking economic progress. At the end of the day, both central banks did a good job cooling the market's expectations, leaving speculative interest clueless about the next significant catalyst. A strong US labor market and an uptick in the country's inflation in January surely add to the overall uncertainty. Meanwhile, the macroeconomic calendar has little to offer on Tuesday. The EU released the December Current Account, which posted a seasonally adjusted surplus of €31.9 billion, improving from the previous €22.5 billion. Additionally, Construction Output in the same period rose 0.8% MoM, up from 0.4% in November. The US will publish minor figures, including the Redbook Index and weekly crude oil stocks data. EUR/USD short-term technical outlook The daily chart for the EUR/USD pair shows buying interest reappeared, but it is still tepid. Technical indicators in the daily chart aim north but remain below their midlines and need to surpass them with momentum to confirm another leg north. At the same time, the pair is battling to overcome the 20 and 100 SMAs, both converging around the 1.0795 level. Finally, a flat 200 SMA provides resistance at around 1.0825. The 4-hour chart shows buyers defend the downside around a bullish 20 Simple Moving Average (SMA), currently at around 1.0770, while EUR/USD extended its advance above a still bearish 100 SMA. Technical indicators aim higher within positive levels, partially losing their early strength but still heading north. Bulls will likely insist if the pair breaches the aforementioned 1.0825 level, aiming to extend the rally towards the 1.0860 area. Support levels: 1.0770 1.0740 1.0695   Resistance levels: 1.0825 1.0860 1.0905 

The decline in negotiated wage growth from 4.7 to 4.5% year-on-year confirms expectations that wage growth is no longer accelerating. But it is too small to open the door to an ECB rate cut in March. With wage growth expected to trend down carefully from here, we expect modest ECB cuts starting in June. Wage growth is the number one worry for the ECB at the moment, as has been stressed by European Central Bank President Christine Lagarde time and again in recent speeches. While we anticipate that wage growth will moderate significantly over the course of 2024 on the back of abated inflation and weakened economic conditions, it must come as a relief in Frankfurt that negotiated wage growth fell from 4.7 to 4.5% in the fourth quarter. Sure, it's only a small tick down, but broadly in line with expectations that negotiated wage growth will start to trend down over the course of 2024. That also follows from the ECB's own wage tracker, which monitors wage growth agreed in collective bargaining agreements for the 12 months ahead. This has plateaued for some time now and most recent agreements have trended lower. We expect to see a more meaningful decline in nominal wage growth before the summer. Other measures of wage growth have already cautiously started to move down earlier, but negotiated wages make up the bulk of wage developments in the eurozone. Still, the fourth quarter drop is a small decline and therefore we don't expect the ECB to be particularly hasty in deciding on first-rate cuts. The June meeting – after another quarter of wage data is released – looks like a good moment for a first 0.25% rate cut to us. While nominal wage growth declined, today's release did mark the first quarter of real wage growth (so wage growth – inflation) since the start of the energy crisis in the eurozone. The deep fall of real wages has therefore only just bottomed out and for now, the rebound is not expected to be particularly strong. The expected declining trend of nominal wage growth over the course of 2024 makes the upside to consumption rather limited. Yet, elevated nominal wage growth does add to cost pressures for businesses and if recovering purchasing power leads to continued consumption, then this could result in a slower than hoped-for return to the 2% target for the ECB. While those concerns shouldn't be overdrawn in the current environment of lackluster economic activity, it is an important reason for us to expect the ECB to adjust monetary policy only carefully in 2024. We expect 0.75% of cuts in total for the year. Read the original analysis: Drop in Eurozone negotiated wage growth brings relief to ECB

EUR/USD continues to fluctuate in a narrow channel below 1.0800. The pair could start stretching lower in case risk mood sours. The US economic docket will not offer any high-impact data releases on Tuesday. EUR/USD failed to gather directional momentum and closed the first day of the week virtually unchanged as trading conditions remained thin due to the US Presidents' Day holiday. The pair continues to move sideways below 1.0800 early Tuesday.

Amidst a backdrop of rising risk appetite in the financial markets, last week witnessed record highs across major indices worldwide, despite looming concerns over potential inflation resurgence in the US. As global bond yields surged and Bitcoin reached two-year highs, investors grappled with evolving dynamics. This week, key events and themes are poised to shape market sentiment and asset trajectories. From Nvidia's pivotal earnings report to the release of critical PMI surveys, investors brace for a week of significant developments that will undoubtedly influence trading decisions and market trends. Highlights: Nvidia's earnings: A crucial test for bulls Thursday's PMI surveys: Gauge of economic momentum Technical trends and currency pairs 1. Nvidia's earnings: A crucial test for bulls The semiconductor behemoth Nvidia, whose market cap surpassed tech giants Alphabet/Google and Amazon last week, stands as a significant focal point. Positioned at the epicenter of the AI revolution, Nvidia trades at a substantial multiple, reflecting elevated market optimism. However, the continuation of its robust growth trajectory remains pivotal for sustaining investor enthusiasm. Traders eagerly await Nvidia's earnings report, with expectations set at $4.18 for EPS and $20.4B for revenue. Beyond financial metrics, attention will be keenly directed towards the company's guidance and outlook for the remainder of the fiscal year. Notably, the implied volatility on NVDA options suggests anticipation of a significant move, with investors bracing for a potential +/- 11% swing in response to earnings. Such volatility underscores the importance of Nvidia's performance in shaping market sentiment, especially given recent strong results from industry peers like AMD, SMCI, and TSMC. Earnings per share: Source: www.nasdaq.com/ 2. Thursday's PMI surveys: Gauge of economic momentum US PMI: As reported by Institute for Supply Management, in January 2024, the ISM Manufacturing PMI in the US rose to 49.1, its highest since October 2022, up from December's 47.1, exceeding the expected 47. Despite ongoing sector contraction, demand improved moderately, with stable output and favorable input conditions. Source: tradingeconomics.com UK PMI: The S&P Global reported that UK Manufacturing PMI for January 2024 was adjusted downward to 47, a decrease from the initial projection of 47.3. Both output and new orders sustained declines, leading to increased layoffs and diminished procurement and inventory levels. Manufacturers encountered supply chain difficulties stemming from the Red Sea crisis, necessitating the redirection of input shipments away from the Suez Canal. Despite these challenges, the situation in the manufacturing sector persisted. What about this week? Thursday's release of PMI surveys from the US, UK, and Eurozone emerges as a pivotal event for traders seeking insights into current economic dynamics. Widely regarded as leading indicators of on-the-ground economic activity, these surveys offer crucial guidance on whether January's momentum has translated into sustained growth in February. With market participants actively pricing out expectations of interest rate cuts by major central banks since the year's outset, the significance of robust PMI data cannot be overstated. A continuation of strong survey results may serve to forestall near-term bearish reversals, bolstering investor confidence in the resilience of economic recovery efforts amidst lingering uncertainties. United Kingdom Manufacturing PMI Forecast. Source: tradingeconomics.com The week ahead presents a confluence of events and themes that will likely shape market sentiment and asset trajectories. From Nvidia's earnings to the release of PMI surveys, investors remain vigilant amid evolving economic landscapes and shifting risk dynamics. As traders navigate these challenges, attention to key indicators and developments will be paramount in identifying emerging opportunities and mitigating potential risks. 3. Market analysis: Technical trends and currency pairs US Dollar Index The US Dollar Index revealed a candlestick that closed higher than its open last week, hinting at bullish activity. However, the formation of an outside bar and a bearish pin bar introduced uncertainty regarding its direction. Despite this, the weekly close exhibited a slight uptick compared to prices from 3 and 6 months ago, suggesting the potential emergence of a bullish long-term trend. Source: TradingView Transition: Nonetheless, caution prevails due to the absence of clear bullish momentum in the price action. NASDAQ 100 Index The NASDAQ 100 Index faced a decline last week following its initial surge to a new record high. Its closing price settled at the week's lowest point, indicating prevailing bearish sentiment. However, the overarching bullish trend in US stocks implies that this downturn may present a favorable buying opportunity. Source: TradingView Transition: Despite the ongoing retracement, the enduring bullish momentum in stocks is anticipated to endure. S&P 500 Index The S&P 500 Index concluded slightly lower last week post achieving a fresh record high early on. While it outperformed the NASDAQ 100, showcasing relative strength in non-technology stocks, it remains under some downward pressure. Source: TradingView Transition: Nonetheless, historical data and prevailing market conditions lend support to a bullish outlook for the S&P 500. Bitcoin Bitcoin recently witnessed a robust bullish breakout,...

Gold price pauses its three-day recovery rally amid cautious markets early Tuesday US Dollar ticks higher with US Treasury bond yields, as investors keep cheering bets of fewer Fed rate cuts.  Gold sellers return after facing rejection at the 21-day SMA near $2,025. RSI surrenders the 50 level.   Gold price is trading on the back foot below $2,020 early Tuesday, following a positive start to the week and logging a three-day recovery rally. The Gold price upside seems likely capped by a renewed uptick in the US Dollar and the US Treasury bond yields, as markets brace for a return of the American traders. Gold price looks to Wednesday's Fed Minutes for fresh impetus Risk sentiment remains in a weak spot so far this Tuesday, as investors fail to cheer a bigger-than-expected Loan Prime Rate (LPR) by the People's Bank of China (PBoC). The Chinese central bank left the one-year LPR unchanged but lowered the five-year mortgage lending rate by a record 25 basis points (bps) from 4.20% to 3.95%. However, a lack of fiscal policy support measures from China leaves markets unimpressed. Traders also digest the recent fading expectations of early and aggressive Federal Reserve (Fed) rate cuts, in the face of the previous week's hot US Consumer Price Index (CPI) and Producer Price Index (PPI) data. Markets began this year by pricing six Fed rate cuts, now expecting only three. Markets are currently pricing a 76% chance of a cut in June, according to the CME Group's Fed Watch Tool. A March Fed rate cut is almost fully priced out. A downbeat mood combined with delayed Fed rate cut bets continue to support the US Treasury bond yields and the US Dollar at the expense of the non-yielding Gold price. Gold price now looks forward to Wednesday's Fed Minutes and US S&P Global business PMI data on Thursday, in the absence of any high-impact US economic data releases on Tuesday. Also, of note remains the earnings result from the American tech-giant Nvidia on Wednesday, as it could have a significant impact on the market sentiment. In the meantime, some appearances from the Fed officials could help markets reverberate expectations of a delayed Fed policy pivot, influencing the value of the US Dollar and the Gold price. Gold price technical analysis: Daily chart Gold price faced rejection at the 21-day Simple Moving Average (SMA), now at $2,023, on a daily closing basis, reviving the selling interest. The 14-day Relative Strength Index (RSI) snapped its recovery mode and fell back below the midline, suggesting that a pullback toward the $2,000 threshold could be in the offing. That level could offer a strong support, as the upward-pointing 100-day SMA aligns there.   However, Gold sellers need to crack the previous day's low of $2,011 before testing rising trendline support at $2,005 and the 100-day SMA at $2,000. On the upsid, the immediate resistance at the 21-day SMA of $2,023 needs to be taken out in order to resume the recovery toward the 50-day SMA of $2,033. Acceptance above that level will create fresh buying opportunities in Gold price, targeting the February 7 high of $2,044 and the $2,050 psychological barrier.