The US Election Post-Effect is Over?
The US presidential campaign is over with Donald Trump triumphing over Kamala Harris. This may have long-term consequences for global economic and trade relations as the future US president promised to adopt import tariffs that may decelerate European and Chinese economies. However, the post-election effect on the financial markets seems to be over. At least, major currencies and other assets began an upside correction, which may lead to new trends in the financial markets.
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EUR/USD: Ahead of Friday’s PMIs
While traders and investors still have doubts on the economic progress in the Eurozone, EUR/USD managed to begin an upside correction. Manufacturing and services PMIs will be among the key fundamental indicators to watch this week. According to forecasts, we can expect mixed dynamics with a slight improvement in the German and French manufacturing sectors and a minor deceleration in the French service sector.
Also, the President of the European Central Bank Christine Lagarde will give her commentaries on Friday. Currently, market participants expect that the ECB is going to be more aggressive in cutting interest rates. However, traders and investors also focus on the Eurozone’s inflation data.
The EUR/USD hourly chart demonstrates some local downside momentum, which is likely to continue as the currency pair has broken below the SMA50, which may be one of the signals that the market sentiment is changing. The RSI indicator is going down, which also confirms the possibility of further downside movement. By breaking below 1.0520, EUR/USD will likely develop a downtrend targeting 1.0500 and lower.
GBP/USD: The UK Inflation Data in Focus
The US dollar steps back for a while, allowing the British pound to gain some positions. UK GDP data showed some slowdown last week, but market participants pay even more attention to the inflation data that will be released this week. According to forecasts, inflation in the United Kingdom is likely to accelerate, which means that the Bank of England may not have enough room to hike rates. Moreover, the new Labour budget is likely to stimulate inflation growth in 2025, which also places future interest rate hikes by the BoE under question.
GBP/USD fluctuates below the SMA50 on the hourly chart. The currency pair is under pressure due to fundamental reasons. The RSI indicator is below 70 and moves downward. If the downtrend is confirmed, GBP/USD will have to break below 1.2600 before traders can sell the currency pair.
USD/CAD: Market Participants Wait for CPI Figures
Traders and investors look closely at the Canadian CPI data to make their next decisions. The Bank of Canada is likely to continue its easing steps, but everything will depend on the inflation dynamics.
According to forecasts, monthly inflation is going to accelerate from -0.4% to 0.3%. If the inflation rate is going to grow, the Bank of Canada will have fewer opportunities to stimulate economic growth via cutting rates.
Technically speaking, USD/CAD has broken below the Simple Moving Average of 50, which means that we have a change in the price direction. Currently, the currency pair stays below the SMA50 indicating that sellers are in control. By breaking below 1.4000, the currency pair will likely continue its downtrend. On the upside, 1.4100 prevents USD/CAD from moving higher.
BTC/USD: A New Leg of Growth is On the Way
Bitcoin managed to establish new all-time highs after the presidential election in the United States. However, later the cryptocurrency moved downward as a downside correction took place.
Current support for Bitcoin is due to a wider adoption and larget interest for this asset. More companies and large institutions buy Bitcoin. Moreover, according to Donald Trump’s commentaries before the election, he will support crypto business, which makes Bitcoin and other cryptocurrencies more attractive to traders and investors.
Bitcoin is trading with no clear direction currently. However, the most popular cryptocurrency is likely to move higher as it is currently supported by market participants. The price is above the SMA50, which confirms the uptrend. The RSI indicator is neutral. On the upside, Bitcoin is limited by 93,000. If the currency pair manages to break above this level, the next targets will be at 94,000 and even 95,000. On the downside, 90,000 prevents the cryptocurrency from moving lower.
XAU/USD: Geopolitics Supports Gold
The latest Joe Biden commentaries related to geopolitics issues supported Gold. The precious metal is known for its safe-haven features and it is normal that Gold rises when something happens. Traders and investors weigh risks and the next price movements will be defined by the market sentiment and possible ways of conflict solution.
Gold price is above the SMA50, which means that the precious metal is in the uptrend currently. However, the RSI indicator is in the overbought area. Therefore, a correction is possible. By breaking below 2,600, gold can move downwards. On the upside, XAU/USD is restricted by 2670 from further growth.
