Forex Market News Update 26th August,2024

Forex Market News Update: Key Trends and Highlights (August 26, 2024)

Welcome to this week’s Forex Market News Update! In this edition, we’re diving into the latest developments that are shaping the forex and cryptocurrency markets. From the significant rise of Ethereum ETFs and the resurgence of altcoins to crucial updates on major currency pairs and stock market movements, we’ve got all the essential insights you need to stay ahead. Join us as we explore how these trends impact your trading strategies and what to watch for in the coming days.

Cryptocurrency Buzz

1. Spot Ethereum ETFs Make Waves
   The newly launched spot Ethereum ETFs on US exchanges have hit it big, attracting over $2 billion in net inflows in just a month. This makes them some of the most successful ETF launches ever.
2. Kamala Harris Supports Crypto Regulation
   US election candidate Kamala Harris has voiced support for regulations that could boost the digital asset industry, including cryptocurrencies. This endorsement could bring positive changes to the regulatory landscape for digital assets.
3. Altcoins Experience a Comeback
   Altcoins are rallying, partly thanks to Donald Trump’s comments about potentially offering Elon Musk a position in his administration if elected. Musk’s tweets about DOGE have also sparked renewed interest in the altcoin market.
4. AAVE’s Stellar Performance
   AAVE has been on a tear, up over 50% in just two weeks after a brief consolidation. This reflects strong bullish momentum in the altcoin space.
5. Bitcoin’s Cautious Accumulation
   Bitcoin is currently in a phase of cautious accumulation. Traders are staying alert, watching for any signs that might indicate the next big move in the market.

Forex Market Overview

1. US Dollar Weakness
   The US dollar has extended its losses following a downgrade in US jobs data, suggesting a weaker jobs market than previously thought. This has influenced the dollar’s performance against other currencies.
2. FOMC Meeting Minutes Reveal Fed’s Plans
   Recent FOMC meeting minutes show some Federal Reserve members pushing for a rate cut at the next meeting. This has caught many off guard and has impacted market expectations for future monetary policy.
3. Dovish Remarks from Fed Chair Powell
   At the Jackson Hole conference, Fed Chair Jerome Powell hinted at possible rate cuts in September. His comments on progress toward the 2% inflation target and a cooling labor market have led to expectations of more aggressive rate cuts.
4. Eurozone CPI Boosts Euro
   The euro has strengthened due to a higher-than-expected Consumer Price Index (CPI) in the eurozone and the ongoing weakness of the US dollar. This data suggests less likelihood of a rate cut by the European Central Bank (ECB).
5. GBP/USD Hits Multi-Year High
   The GBP/USD pair has reached its highest level since July 2023, driven by strong UK PMI data. The British pound is gaining momentum, reflecting positive economic signals from the UK.

Stock Market Performance

1. US Stock Market Rebounds
   The US stock market is bouncing back, with the S&P 500 recovering recent losses. The NASDAQ is also making strides, with traders hoping Nvidia’s upcoming earnings report will provide a boost.
2. Rate Cut Expectations
   There’s growing anticipation for a September rate cut by the Fed following Powell’s dovish remarks. Some market participants are even speculating about a faster pace of rate cuts.

Commodities Market Update

1. Oil Prices Decline
   US oil prices have continued to drop due to concerns about a possible economic slowdown and increased US crude oil inventories. Additionally, speculation about an Israel-Hamas ceasefire has also influenced oil prices.
2. Gold Hits New Highs
   Gold prices have reached record levels, driven by expectations of Fed rate cuts and increased demand for safe-haven assets due to ongoing geopolitical tensions.

Currency Pair Analysis

1. EUR/USD
   The EUR/USD pair has surged past $1.118, bolstered by a weaker US dollar and a stronger eurozone CPI. Key support levels are at 1.1132 and 1.1164, while resistance is at 1.1275. The bullish trend is likely to continue unless the price drops below these support levels.
2. GBP/USD
   The GBP/USD pair is trading at its highest point since March 2022, thanks to robust UK PMI data and dovish comments from the Bank of England. Support levels are at 1.3175 and 1.3137, with resistance at 1.3306. The bullish momentum is strong as long as the price remains above the support levels.
3. USD/JPY
   The USD/JPY pair has fallen to a three-week low as the Japanese yen gains strength against the US dollar. Key support levels are at 142.69, with resistance at 144.44 and 145.24. The bearish trend is expected to persist unless the price breaks above these resistance levels.
4. XAU/USD (Gold)
   Gold prices are testing resistance at 2520, supported by expectations of rate cuts and safe-haven demand. Support levels include 2503 and 2494. The bullish trend is strong as long as gold stays above these support levels, with potential for new highs if resistance is broken.

Global Market Snapshot

• S&P 500: 5,634.61 (+1.15%)
• Dow Jones: 41,175.08 (+1.14%)
• DAX: 18,633.10 (+0.76%)
• FTSE 100: 8,327.78 (+0.48%)
• USD Index: 100.68 (−0.82%)

Key Economic Events

• German Ifo Business Climate (m/m): 11:00 GMT+6
• US Durable Goods Orders (m/m): 15:30 GMT+6

Stay tuned for the latest updates and adjust your strategies accordingly. Keep an eye on key economic indicators and central bank policies to navigate the forex market effectively.

Written by Rana Das, CEO of Forex Wave Expert