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Market Fundamental Analysis by RoboForex

Gold (XAUUSD) is strengthening ahead of the nonfarm payrolls release

Gold price is steadily rising, with market participants focusing on today's US employment market data – nonfarm payrolls and the unemployment rate.

XAUUSD trading key points
  • Current trend: gold is steadily rising after reaching a daily resistance level at 2,368 USD
  • Market focus: today, market participants focus on US employment market data – nonfarm payrolls and the unemployment rate
  • Price dynamics: XAUUSD quotes are consolidating slightly below the 2,368 USD level during the European trading session
Fundamental analysis

Nonfarm payrolls are expected to increase by 190,000, while the unemployment rate is projected to remain unchanged at 4%.

Following the release of US employment market statistics, volatility in XAUUSD quotes may surge. Depending on the upcoming data, they might continue their growth to new local highs or correct downwards following their previous rise.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
Wage growth in Japan accelerates

The USDJPY rate is correcting on Monday amid the highest US employment rate since November 2021. The pair could not drop below the 160.20 support level.

USDJPY trading key points
  • Earnings in Japan reached their highest level since January
  • US job growth decreased to the lowest seen since November 2021
  • USDJPY price targets: 160.00, 159.30, and 158.70
Fundamental analysis

Earnings in Japan increased by 1.9% year-over-year in May 2024, marking the highest reading since January. However, the indicator is yet to catch up with inflation. As a result, real wages in the country continued to decrease for 26 consecutive months, preventing the BoJ from achieving the desired rise in prices and earnings and impeding the normalisation of monetary policy.

The revised Q3 data on US job growth may negatively impact the dollar-to-yen exchange rate. In June, the unemployment rate reached its highest level since November 2021. Traders expect the first Federal Reserve interest rate reduction in September, followed by further quarterly cuts to a final rate of 3.25-3.50%

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
USDCAD finds equilibrium, but the Canadian dollar remains strong

Investors in the USDCAD pair are assessing the latest statistics and forecasts. The Bank of Canada’s actions will determine further movements.

USDCAD trading key points
  • The market is considering Canada’s employment market statistics
  • The Bank of Canada may lower interest rates at every meeting until the end of 2024
  • USDCAD price targets: 1.3696, 1.3600, 1.3530, and 1.3473
Fundamental analysis

The Canadian dollar has stabilised against the US dollar after strengthening markedly in July. The USDCAD pair is hovering around 1.3635.

Investors were prompted to react to last week’s Canadian employment market statistics release. The unemployment rate rose 6.4% from 6.2% in June, with the economy losing approximately 1,400 jobs. Although this is not the largest possible loss, signs of economic weakness are increasing.

The USD’s depreciation also contributed to the previous drop in the USDCAD pair. The slowing US economy is causing widespread concern, intensifying the focus on interest rates. The likelihood of a Bank of Canada interest rate cut at its July meeting is estimated at 60%. If this occurs, it will mark the second consecutive meeting with a rate cut, with markets anticipating a total reduction of 55 basis points by the end of the year.

If the Bank of Canada lowers interest rates again on 24 July, the market will likely interpret this as a signal for further cuts at each subsequent meeting unless unforeseen events happen.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
CHF is under pressure: the SNB may lower the rate twice this year

The USDCHF rate declined on Wednesday, 10 July 2024. The pair reacted weakly to the Federal Reserve chair’s speech, and the current USDCHF exchange rate is 0.8971.

USDCHF trading key points
  • SNB is poised for two rate cuts this year
  • The Swiss regulator is clearly discontent with the rising national currency’s rate
  • USDCHF price target: 0.8930
Fundamental analysis

The USDCHF currency pair has closely approached the 0.8967 support level. Investors are analysing yesterday’s comments from Jerome Powell, stating that the Federal Reserve does not plan to lower interest rates until it is confident inflation is steadily moving towards 2%. However, Q1 data does not add to confidence.

On the other hand, traders expect the Swiss National Bank to cut rates twice this year to withstand the franc’s potential strengthening. Although the SNB clearly expressed its discontent with the strength of the national currency, a decline in the rate should be limited. On the upside, should inflation rise unexpectedly, the central bank is ready to intervene in the currency market situation if necessary.

Investors estimate the likelihood of another SNB rate cut in September at 50% as Switzerland’s recent consumer price index report fell short of expectations again. This may significantly support the US dollar against the franc.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
USDJPY is rising amid uncertainty about the BoJ’s actions

The USDJPY rate closely approached weekly highs on Thursday, 11 July 2024. The current USDJPY exchange rate is 161.68.

USDJPY trading key points
  • Uncertainty about the BoJ’s actions: traders awaiting a rate hike
  • Japan’s machinery orders: unexpected decrease of 3.2% in May
  • USDJPY price targets: 162.00 and 162.52
Fundamental analysis

Intrigue regarding the pace of monetary policy normalisation by the Bank of Japan remains. Markets anticipate that the BoJ may raise interest rates in late July in an attempt to curb the yen’s weakening. Analysts’ opinions vary, with some believing this will not be enough to halt USDJPY growth in the long term.

Japan’s Ministry of Finance officials reiterated their readiness for currency market interventions. Although they currently have a limited effect, they help to keep the yen weakening slowly and moderately.

Recent data showed an unexpected 3.2% (m/m) decline in Japan’s core machinery orders in May, indicating a potential economic slowdown. This is another signal favouring a further decline in the yen’s rate.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
Yen’s sharp strengthening: due to currency intervention or faith in the yen?

The USDJPY pair has declined, and investors continue to speculate whether this was driven by hidden financial intervention or unfavourable news from the US.

USDJPY trading key points
  • Thomson Reuters/Ipsos primary consumer sentiment index (PCSI) in Japan: previously at 37.69%, currently at 37.63%
  • Japan’s industrial production (m/m): previously at -0.9%, currently at 3.6%
  • CFTC JPY speculative net positions: previously at -184.2 thousand
  • USDJPY price targets: 159.70 and 157.22
Fundamental analysis

The USDJPY rate continues to decline today, 12 July 2024. The sharp strengthening of the yen has raised many questions with few answers. Some investors suggest the Bank of Japan has conducted hidden currency intervention, while others believe this was a reaction to US fundamental news. Either way, players who bet on a decline in the USDJPY pair generated profit. The primary consumer sentiment index (PCSI) data has already been released, showing that the index remained practically unchanged and probably had no impact on the quotes.

Despite a 0.9% fall in the previous month, industrial production in May increased by 3.6%, exceeding the expectations of a 2.8% rise and impacting the yen’s strengthening. By increasing industrial production, Japan may strengthen its currency without resorting to overt financial intervention.

A likely scenario for further yen strengthening could be the BoJ’s comprehensive approach, which would involve solving challenges with inflation and prices for consumer goods and services and covert currency intervention until it is officially announced.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
Elon Musk’s ambitious projects could elevate Tesla to a new level. Is it worth investing in its stock now?

Over the past 30 days, the yield on Tesla (NASDAQ: TSLA) shares has exceeded 48%. Elon Musk has grand plans for the company’s future.

Is it worth investing in Tesla stock now? What can prevent Musk from implementing his ambitious plans? Find out more in this article.

Tesla shares have experienced a prolonged decline since January 2024, with the price falling by more than 50% in four months. The price decline could be driven by Tesla’s refusal to pay compensation of approximately 55 billion USD to Elon Musk, who threatened to leave the company.

The situation changed radically on 13 June when the annual shareholder meeting approved this payment. Since that day, the stock price has significantly recovered, rising nearly 50% in just one month.

Tesla Inc revenue streams

Tesla Inc generates revenue through various sources reflecting the diversity of its products and services. The main ones are listed below:
  1. Automotive sales – this includes direct sales to consumers and rentals
  2. Regulatory credits – selling regulatory credits to other car makers who need them to comply with environmental standards
  3. Energy generation and storage – producing and selling solar energy systems and energy storage devices such as Powerwall (for domestic use), Powerpack (for commercial use), and Megapack (for large-scale energy storage)
  4. Services and others – service and repair centres, the Supercharger network, and insurance services for Tesla electric vehicle owners
  5. Software and autonomous driving – fees for advanced driver assistance systems (Autopilot), the full self-driving unit (FSD), and software updates
Tesla Inc Q1 2024 financial performance

Today is 15 July 2024, meaning that the second quarter of the year is over. However, Tesla will only release its Q2 report on 23 July, so we will now analyse Q1 2024 indicators. Below is the Q1 2024 financial performance data compared to Q1 2023.

Key data:
  • Total revenues – 21.30 billion USD (a 9% decrease)
  • Net profit – 1.10 billion USD (a 55% fall)
  • Earnings per share – 0.34 USD (a 53% decrease)
  • Operating margin – 5.5% (a fall of 592 basis points)
  • Capital expenditures – 2.77 billion USD (a 34% increase)
Tesla Inc promising business areas

In January 2024, the Delaware (US) court invalidated a compensation package worth 55 billion USD payable to Elon Musk for his role as Tesla’s CEO. Musk criticised this decision and threatened to leave the company unless he received the compensation. He later changed Tesla’s registration from Delaware to Texas. At the annual shareholder meeting in June 2024, Musk’s compensation package issue was raised again and was approved. Although the real reasons behind this decision can only be speculated upon, it is evident that shareholders are placing another bet on Elon Musk, expecting the company’s further growth under his leadership.

Robotaxi

Tesla is actively developing a robotaxi service, where autonomous cars provide transportation services without involving drivers. In the future, Tesla electric car owners will be able to add their vehicles to the robotaxi network when not in personal use and earn money by renting them out as taxis. Consumers will be able to order Tesla robotaxis by using a mobile app similar to Uber and Lyft taxi services.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
JPY loses ground after strengthening

Yen’s attempts to strengthen failed. The Japanese currency continues to lose ground against the US dollar.

USDJPY trading key points
  • Japan’s services PMI (m/m): previously at 2.2%, currently at -0.4%
  • US core retail sales index (m/m): previously at -0.1%, forecasted at 0.1%
  • US retail sales (m/m): previously at 0.1%, forecasted at -0.3%
  • USDJPY price targets: 155.00 and 154.55
Fundamental analysis

After attempting to strengthen against the US dollar, the yen begins to lose ground. Japan’s services PMI (m/m) was forecasted to be positive but decreased to -0.4%, affecting the USDJPY rate not in favour of the yen.

The US core retail sales index and retail sales are projected to rise slightly. After the release of actual data, this may help strengthen the US dollar against the yen. However, actual values could be worse than forecasted. In this case, the USDJPY rate may continue to decline as part of a corrective wave.

Hopes for the yen’s strengthening and stabilisation are fading away every day. Although currency intervention can save the yen, the Bank of Japan is not yet ready for it.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
China’s sluggish domestic demand and economic slowdown jeopardise oil prices

Brent crude oil prices fall on Wednesday, 17 July 2024, declining for the fourth consecutive trading session.

Brent trading key points
  • Declining demand in China: oil imports decreased to 46.45 million tons in June
  • A slowdown in China’s GDP growth: GDP growth rates in Q2 fell to 4.7%
  • Brent price targets: 85.90 and 87.72
Fundamental analysis

Recent data on China’s oil imports and GDP growth rates raised concerns in the global oil market. Oil imports to China, which is the world’s largest consumer of crude hydrocarbons, declined to 46.45 million tons in June, indicating sluggish domestic demand in the country. The slowdown in China’s GDP growth rates to 4.7% in Q2, below the 5.3% recorded in Q1, adds to pessimism.

The Chinese economy has traditionally been the driver of global economic activity and fuel demand. The weakening of these indicators could lead to oil oversupply in the market, which will negatively impact the prices. Although the Chinese authorities are taking action to stimulate the economy, it is not clear how quickly these measures will help revive fuel demand.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
Gold (XAUUSD) could reach new all-time highs amid US news

Gold continues to rise on Thursday, 18 July 2024, offsetting Wednesday’s correction.

XAUUSD trading key points
  • The Philadelphia Fed manufacturing index (US): previously at 1.3%, forecasted at 2.7%
  • A speech by US Federal Open Market Committee (FOMC) official Mary C. Daly
  • XAUUSD price targets: 2,434.84, 2,400.00, and 2,386.50
Fundamental analysis

This week’s economic data showed a slight increase, helping the precious metal strengthen its position against the US dollar. XAUUSD quotes are maintaining their upward trajectory.

US economic data, including the Philadelphia Fed manufacturing index, is scheduled for release today. The indicator is projected to rise to 2.7% but it is difficult to foresee what will come. Weaker-than-expected data may exert pressure on the US dollar and push gold prices further up.

A speech by US FOMC official Mary C. Daly last time negatively impacted the US dollar. Investors expect this speech to answer questions about future interest rate changes and inflation growth or slowdown rates. Any response from Mary C. Daly may trigger an immediate market reaction, potentially pushing the XAUUSD to new all-time highs.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 
Brent prices fall, driven by a sell-off of risky assets

Brent crude oil prices are dropping again. The market has experienced sales growth amid falling prices for risky assets and the US dollar strengthening.

Brent trading key points
  • Brent prices are falling due to pressure from the US dollar
  • China’s plenum did not outline measures to support the economy
  • Brent price targets: 85.00, 85.40, 86.90, and 88.00
Fundamental analysis

The commodity market was again under pressure, with a barrel of Brent crude oil falling to 84.73 USD on Friday.

Investors took a more cautious stance when assessing the global economic outlook, resulting in sales in stock and commodity market sales, which contributed to the growth of the US dollar. Statistics showing stronger-than-expected growth in July’s industrial production and increased jobless claims amid seasonality also bolstered the USD.

Commodity goods are generally believed to be less profitable to purchase amid USD growth.

Chinese news failed to support the oil sector. China’s third plenum ended yesterday without providing any guidelines on measures to revive the country’s economy. As China is the world’s largest oil consumer, positive signals from this side could support commodity prices.

Market analysis for other instruments can be found in the section on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.


Sincerely,
The RoboForex Team
 

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