AUD/USD breaks below the 0.6500 support on Monday. The stronger Dollar puts AUD under extra pressure. The RBA is widely expected to keep its OCR unchanged. The beginning of a new trading week saw relentless selling pressure on the Aussie dollar, pushing AUD/USD to the sub-0.6500 zone for the first time since mid-November. Furthermore, the pair declined for the second consecutive session and entered its sixth consecutive week of losses influenced by marked gains in the Greenback as market participants continued to digest Friday's US Nonfarm Payrolls (+353K jobs) and hawkish remarks from Chair Powell over the weekend. Also weighing on Australian currency emerged the lack of positive surprise from the release of the Chinese Services and Composite PMIS tracked by Caixin and published during early trade. In addition, the ongoing downward movement in spot convincingly breached the critical 200-day SMA (0.6573), indicating the potential for the bearish trend to persist, at least in the short term. There was also no reaction in AUD after the China Securities Regulatory Commission restated its commitment on Sunday to encourage the inflow of medium- and long-term funds into the market. Additionally, they pledged to take strong measures against illegal activities, including malicious short selling and insider trading, all amidst another attempt to address the decline in Chinese stocks. Back to the domestic scenario, the Reserve Bank of Australia's (RBA) seems to have the key to lend some near-term support to the Australian Dollar via a hawkish hold at its monetary policy meeting on February 6. However, consensus among investors remains firm and expects the central bank to keep its Official Cash Rate (OCR) unchanged at 4.35%. The latter view is propped up by the latest inflation data from Australia, revealing increased disinflationary pressures at the end of the previous year. Both the Inflation Rate and the RBA's Monthly CPI Indicator rose by significantly less than the initial estimates, at 4.1% in Q4 and 3.4% in December, respectively.      AUD/USD daily chart AUD/USD short-term technical outlook Further losses may cause the AUD/USD to retest its 2024 level of 0.6485 (February 5) ahead of the 2023 bottom of 0.6270 (October 26). The breach of the latter could prompt a test of the round level of 0.6200 to emerge on the horizon prior to the 2022 low of 0.6169 (October 13). On the positive side, there is a temporary resistance at the 55-day SMA of 0.6645. The breakout of this zone may motivate the pair to set sails for the December 2023 high of 0.6871 (December 28), before the July 2023 top of 0.6894 (July 14) and the June 2023 peak of 0.6899 (June 16), all just ahead of the key 0.7000 threshold. The 4-hour chart suggests further weakness in the short-term, opening the door to a drop to 0.6452 sooner rather than later. On the bullish side, 0.6624 is an immediate barrier ahead of the 200-SMA at 0.6671. The trespass of this zone signals a potential advance to 0.6728. The MACD retreats further in the negative zone and the RSI flirts with 35. View Live Chart for the AUD/USD

XAU/USD Current price: 2,023.15 Continued upward pressure in government bond yields underpins the US Dollar. Upbeat United States data further weighed on March rate cut odds. XAU/USD retreated further on broad US Dollar's strength, returned to its comfort zone. XAU/USD is under strong selling pressure on Monday amid broad US Dollar's strength. The Greenback extends the rally triggered last week by the United States (US) Federal Reserve (Fed) monetary policy decision and upbeat employment figures. On the one hand, Fed Chair Jerome Powell dismissed the odds for a March rate cut, spurring risk aversion. On the other hand, the Nonfarm Payrolls (NFP) report was much stronger than expected, further diminishing the chance of a soon-to-come rate cut. At the beginning of the new week, government bond yields resumed their advances, underpinning the US Dollar in a much quieter week regarding macroeconomic releases. At the time of writing, the 10-year Treasury note offers 4.16%, up roughly 14 basis points (bps), while the 2-year note yields 4.47%, up 10 bps from Friday's close. Meanwhile, stock markets changed course. After spending most of the day in the green, European indexes ended the day in the red. As per Wall Street, the three major indexes trade firmly in the red, with the Dow Jones Industrial Average being the worst performer, down roughly 1%. Finally, the USD got an additional boost from upbeat local data. The ISM Services Producer Manager Index (PMI) jumped to 53.4 in January from a downwardly revised 50.5 in December, above the expected 52. On a negative note, "The Prices Index registered 64 percent in January, a 7.3-percentage point increase from December's seasonally adjusted reading of 56.7 percent," a red flag on inflation, yet supportive of the delay in rate cuts. XAU/USD short-term technical outlook The daily chart for the XAU/USD pair now offers a neutral stance as it returned to the $2,020 price zone. In the mentioned chart, the pair is currently developing below a flat 20 Simple Moving Average (SMA), providing near-term resistance at $2,029.90. XAU/USD holds well above a bullish 100 SMA, limiting the longer-term bearish potential, although the Relative Strength Index (RSI) indicator heads firmly south at around 47, anticipating another leg lower. In the near term, and according to the 4-hour chart, the risk skews to the downside. Gold develops below all its moving averages, and the 20 SMA accelerated south, although still holding above directionless longer ones. Technical indicators, in the meantime, have bounced from near oversold readings, aiming north within negative levels, not enough to confirm an upcoming recovery. Support levels: 2,022.75 2,009.10 1,988.90 Resistance levels: 2,029.90 2,039.60 2,053.10

EUR/USD Current price: 1.0754 Contraction in business activity and new orders softened in the EU at the beginning of the year. The United States ISM Services PMI is foreseen to improve further in January. EUR/USD bearish case gains momentum as Treasury yields run higher. The EUR/USD pair extends its 2024 slump to fresh lows sub-1.0750 amid broad US Dollar demand. Treasury bond yields lead the way in an otherwise quiet week, and as market participants digest the latest central banks' decisions and the United States (US) employment situation. At the end of the previous week, the USD surged on the back risk aversion, triggered by robust employment figures that followed Federal Reserve (Fed) Chairman Jerome Powell's words cooling down expectations for a March rate cut. The US Dollar found extra legs on Monday on resurgent yields. Ahead of Wall Street's opening, the 10-year Treasury note offered as much as 4.10%, holding nearby, while the 2-year note peaked at 4.46%, now offering 4.44%. Meanwhile, stock markets trade with a positive tone, with most Asian and European indexes holding on to modest gains. Data-wise, the Hamburg Commercial Bank (HCOB) published the final Services Producer Manager Index (PMI) surveys for the Eurozone, with most figures suffering upward revisions but still indicating contraction in the sector. The German Services PMI fell for a fourth consecutive month, printing at 47.7, while the Composite PMI contracted to 47.0 from 47.4 in December. The EU report was a bit more encouraging, as it says: "Contractions in business activity and new orders softened, while growth expectations strengthened to a nine-month high." The EU Composite PMI surged to 47.9, a six-month high. Finally, the EU December Producer Price Index (PPI) contracted by 10.6% YoY and 0.8% MoM, indicating price pressures eased further. S&P Global will later publish the US Services PMI and the Composite PMI for January, while the country will release the official ISM Services PMI, the latter foreseen at 52, up from 50.6 in December. EUR/USD short-term technical outlook The EUR/USD pair trades near its slows, and technical readings in the daily chart show the risk remains skewed to the downside. The pair started the day at around a flat 100 Simple Moving Average (SMA) and could not recover above it. In the meantime, the 20 SMA keeps gaining downward traction above the longer ones. Finally, technical indicators hold within negative levels, with the Relative Strength Index (RSI) indicator at 35 and anticipating another leg lower. The 4-hour chart shows bears are not willing to give up. EUR/USD is developing below all its moving averages with firmly bearish slopes. Furthermore, technical indicators remain within negative levels, with the Momentum indicator stable but the RSI indicator nearing oversold readings. A continued decline is expected on a break through 1.0745, the immediate support level. Support levels: 1.0745 1.0710 1.0680 Resistance levels: 1.0790 1.0845 1.0890  

EUR/USD trades below 1.0800 to start the week. Near-term technical outlook suggests that the bearish bias remains intact. ISM will release Services PMI data for January later in the day. EUR/USD stays on the back foot and trades below 1.0800 in the European morning on Monday. The pair's technical outlook shows no signs of a potential rebound as the US Dollar (USD) preserves its strength. EUR/USD fell sharply in the second half of the day on Friday and closed the week in negative territory. After the data from the US showed that Nonfarm Payrolls rose by 353,000 in January, surpassing the market forecast of 180,000 by a wide margin, the USD registered big gains against its major rivals. According to the CME FedWatch Tool, the probability of a Federal Reserve (Fed) rate reduction in March is about 15%, down from 30% early Friday.

The first full week of February will deliver a quieter tone compared to last week. Monday's ISM Services PMI for January is the main macro driver in focus for the US, while in Asia Pac, the Reserve Bank of Australia's (RBA) rate decision takes to the front on Tuesday. Forget about March Last week's stage was set exclusively for the Fed, and the primary message was to forget March. While the FOMC left the target rate unchanged at 5.25%-5.50%, it opened the door to rate cuts but the Fed Chairman Jerome Powell almost explicitly pushed back against March's policy meeting, in line with Futures market pricing (24% probability priced in as of writing). Meanwhile, we have also seen a rate repricing for May's policy meeting following Friday's NFP beat, effectively nudging things in favour of a 25bp cut out to June (44bps) rather than May (22bps). Traders also welcomed a slew of US jobs data last week, including increased Job Openings (increased to a little more than 9 million in December 2023; however, with the upward revision of the previous number to 8.93 million, there was little change), weak ADP employment growth (107,000), as well as a -0.4-percentage point drop in the ISM Manufacturing PMI employment component from 47.5 to 47.1 and weekly jobless filings jumping to 224k from a slightly upwardly revised 215k print. On top of this, Friday witnessed a monster beat on the non-farm payrolls release; the US economy added 353,000 new jobs in January, surpassing all estimates and breezing through the 216,000 jump in December. The unemployment rate remained unchanged at 3.7%, and the year-on-year earnings surged to 4.5% (M/M rose 0.6%), smashing through all estimates and the prior (4.1%). Needless to say, it was a busy one for US labour data, with Friday's bumper NFP essentially helping seal the deal for a 'no cut' in March and feeding into the US economy's exceptionalism. This also presents a problem for the Fed to move on rates in H1, particularly given the strength of wage growth. Week ahead This week's ISM Services PMI print will essentially be the highlight event for the US, gracing the airwaves at 3:00 pm GMT. The market's median estimate is for an increase to 52.0, up from 50.6 in December 2023 (the estimate range is between 53.0 and 50.6). You may recall that the previous ISM Services release for December revealed narrowing growth, from 52.7 in November to 50.6. An important point to note from the previous release was the meaningful drop into contractionary territory for the ISM Services employment index from 50.7 to an eye-popping 43.3. Consequently, this will be a closely watched number this week. Consider digging into our week-ahead post for the Dollar Index, which is technically demonstrating scope for further outperformance. As for the RBA, no fireworks are expected here. The central bank, scheduled for 3:30 am GMT, is widely expected to hold its Cash Rate unchanged at 4.35% on 6 February for a second consecutive meeting (a 12-year high). According to the ASX 30-Day Interbank Cash Rate Futures, we're pretty much fully priced in for a no-change as of writing (95% probability). Alongside the rate decision, traders will receive the Rate Statement, the quarterly Statement of Monetary Policy (SoMP), which offers the central bank's view on economic conditions, together with an outlook on inflation and growth, as well as the Press Conference held by RBA Governor Michelle Bullock an hour after the rate decision. Therefore, there will be plenty of fresh data for traders to get their teeth into here. The AUD/USD was hammered lower on Friday, launching the currency pair to within a stone's throw from daily support. According to technical studies, further selling is possible this week. G10 FX (5-day change): Source: TradingView

Gold price nurses losses after Friday's stellar US NFP-led sell-off.   US Dollar, Treasury bond yields stay firm amid risk-aversion and Powell's pushback. Gold price remains a 'buy the dips' trade, as a strong support holds and daily RSI stays bullish. Gold price is licking its wounds above $2,030 in the Asian trading hours on Monday, having corrected sharply from monthly highs on Friday. The US Dollar (USD) stays supported alongside the US Treasury bond yields, following the blowout US Nonfarm Payrolls (NFP) report and Federal Reserve (Fed) Chair Jerome Powell's interview. Will Middle East geopolitical woes save Gold price? Friday's US labor market report showed that the US economy added a whopping 353K jobs in January, against the 180K expected. Meanwhile, the previous figure was sharply revised up to 333K. The data suggested unrelenting resilience in the US employment sector, killing hopes of early Fed interest rate cuts. The dialing back of Fed rate cuts for this year received a fresh thrust after Fed Chair Jerome Powell, in an interview aired early Monday, dismissed a rate cut next month while pushing back against the timing of the rate cuts. Powell said, "with economy strong, we feel we can approach rate cut timing question carefully. Confidence is rising, but want more confidence before taking 'very important step' of starting rate cuts." The US Dollar and the US Treasury bond yields cheer the pushback against early rate cut expectations by the Fed, keeping Gold price in a downside consolidative phase. The current market positioning suggests an 85% probability that the Fed will stand pat on interest rates next month while for May, the odds of a rate cut stand at about 65%. Despite the persisting conditions against the Gold price, the traditional safe haven could still find support from escalating geopolitical tensions between the West and the Middle East. Amidst the latest updates, US Central Command (USCENTCOM) confirmed on Monday that "on Feb. 4, at approximately 5:30 a.m. (Sanaa time), forces conducted a strike in self-defense against a Houthi land attack cruise missile." In retaliation, the Iran-backed Yemeni Houthi militant group pledged on Sunday to extend their military operations and threatened to respond to the latest set of strikes by the US and the UK over the weekend. If risk-aversion intensifies due to geopolitical tensions, Gold price could attempt a rebound but the safe-haven flows into the US Dollar could limit Gold buyers. Traders will also look forward to the ISM Services PMI and S&P Global final Services PMI data for fresh trading impetus on Gold price. Gold price technical analysis: Daily chart As observed on the daily chart, Gold price managed to close the week above the critical support in the $2,030-$2,035 region, despite a steep correction. That level is the confluence of the triangle resistance-turned-support, 21-day and 50-day Simple Moving Averages (SMA). Further, the 14-day Relative Strength Index (RSI) indicator remains above the 50 level, suggesting that a Gold price rebound could be in the offing. Therefore, Gold buyers remain hopeful so long as the abovementioned demand area between $2,030-$2,035 is held up. If the latter gives way, a fresh leg down could be seen, targeting the triangle support at $2,018. The next relevant cushion is seen at the $2,010 round figure, below which the $2,000 barrier will be a tough nut to crack for Gold sellers. On the upside, the immediate strong resistance is seen at the monthly top of $2,065. Further up, the $2,070 round figure could challenge bearish commitments, as Gold optimists aim for the $2,100 threshold.