Forex Market Update: Gold Hits Record Highs and Dollar Faces Pressure Amid Rate Cut Speculations

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Gold Market Dynamics: Rally and Technical Analysis

Gold has been the highlight in recent trading sessions, with remarkable gains pushing it into uncharted territory. On Tuesday, gold prices soared to a new record high of $3,659, continuing the momentum from Monday's 1.5% rise, which saw it break past the psychological $3,600 barrier. This surge aligns with technical predictions and bullish market sentiments, as gold also marked a new intraday high of $3,655. Factors such as high Fed rate cut odds, the upcoming CPI data, and strong safe-haven flows are driving gold's price, with targets set around $3,879 by late September. Despite concerns of being overbought, the precious metal's trend remains robustly bullish, with key resistance now eyed at $3,674.

USD Currency Pairs: USD/INR and Major Pair Analysis

The USD/INR pair has shown significant movement with the Indian Rupee advancing as the U.S. Dollar retests a six-week low, influenced by broader dollar weakness and speculation of an upcoming Fed rate cut. This sentiment is echoed in other major USD pairs such as GBP/USD and EUR/USD. The GBP/USD pair remains bullish, maintaining levels above $1.3557, while the EUR/USD pair has seen a bullish breakout, now approaching the $1.1780 resistance. This comes amid growing concerns about a cooling US labor market, which reinforces the rate cut expectations and puts additional pressure on the dollar.

Impact of Global Events on Forex

The recent political turmoil in France, where the government collapsed after losing a confidence vote, has also influenced market sentiments, particularly impacting safe-haven assets like gold. Such geopolitical events often lead to increased volatility in the forex markets, highlighting the interconnectedness of global economic and political dynamics.