Fxtm Two major events in the United States suddenly hit! The dollar is under pressure from doves, and the price of gold hovers around 1820

On Friday (October 6), the Asian market morning, the dollar index narrowly oscillated, currently trading around 106.40, safe-haven funds did not flow into precious metals, and gold continued to sell at $1,820.

On Friday (October 6), the Asian market morning, the U.S. dollar index narrowly oscillated, currently trading around 106.40, safe-haven funds did not flow into precious metals, gold continued to sell pressure at $1,820. The U.S. Treasury rout strengthened the view of suspending interest rate hikes, and San Francisco Federal Reserve President Mary Daly agreed that there is no need to make any hasty decisions on interest rates when the labor market shows signs of recovery.

Two dovish events in the United States: the rout of US Treasury bonds and the "pause in interest rate hikes" signal issued by Federal Reserve officials

The surge in US borrowing costs has bolstered investor confidence that the Federal Reserve has finished raising interest rates months after sharply raising rates in its historic fight against inflation. Treasury yields hit their highest in more than a decade this week, raising the cost of financing for businesses and consumers, which could slow the economy and drive down prices if the Fed does not take further action.

The latest senior official to endorse this view was Ms Daly, who on Thursday said the central bank did not need to "make any hasty decisions" on interest rates at a time when the labour market was showing signs of recovery. The economy cooled, price pressures eased and Treasury yields rose sharply. "If financial conditions, which have tightened significantly over the past 90 days, remain tight, then the need for us to take further action diminishes," she said in prepared remarks.

Mr. Daley, who does not become a voting member of the rate-setting FOMC until next year, added: "If we continue to see a cooling labour market and inflation returning to our target, we can keep interest rates stable and allow policy effects to continue."

She made her comments a day before the release of the U.S. non-farm payrolls report (NFP), which is expected to show a modest slowdown in hiring. Goldman Sachs' financial health index, which measures companies' borrowing costs, noted it had reached its highest level in a year. This week the yield on the benchmark 10-year Treasury touched August 2007 levels, or 4.9 percent. The yield on the 30-year Treasury also hit a near 16-year high, rising above 5 percent. On Thursday, yields retreated from their peak.

When prices fall, bond yields rise. Treasury yields rose after the market plunged after Fed officials adopted a "long-term higher" rate-setting approach in September, signalling support for another 25 basis points of interest rate hikes and sharply reducing expectations for future rate cuts.

However, investors now believe a fresh rally is unlikely. The futures market is pricing in a 25 basis point gain of about 30 percent in December, down from 40 percent on Friday and more than 50 percent two weeks ago. "The bond market clearly heard their long-term upside and has effectively tightened monetary policy," said Priya Misra, a portfolio manager at JPMorgan Asset Management. "The goal of monetary policy is to tighten financial conditions, and they just did that last week."

Misra said that offsets the need for further rate hikes this year, suggesting that with the federal funds rate at a 22-year high of 5.25-5 percent, the central bank has squeezed the economy sufficiently to withstand price pressures.

Mike Cudzil, a senior bond portfolio manager at PIMCO, added that the recent rise in Treasury yields "means the Fed needs to act less."

The bond sell-off occurred as the US Treasury increased borrowing in recent months to cover a widening budget deficit and offset falling tax revenues, boosting supply.

"If yields continue to grow at the rapid pace we've seen, the potential for problems and dysfunction increases," said Marc Gianninoni, chief U.S. economist at Barclays and a former Fed regional banker. He believes that could deter the central bank from taking further action, even though he still expects the Fed to raise interest rates again this year.

Dollar under pressure from doves, gold 1820 continues selling pressure

The dollar fell for a second day in a row, but the move was still seen as a correction, with no major change in fundamentals. U.S. economic data showed initial jobless claims remained near a monthly low, lower than expected, indicating that labor market conditions remain tight.

The key event that will determine the direction of the dollar on Friday will be the U.S. non-farm payrolls report (NFP), with the market expected to add 170,000 and the unemployment rate expected to fall from 3.8% to 3.7%. A positive report could strengthen the dollar's rally, while weak data, consistent with the "small non-farm" ADP data, could trigger a correction and rally in U.S. Treasury yields.

The dollar index fell for the second day in a row, falling below 106.50 and retreating further from its monthly high. The decline was driven by a decline in US Treasury yields, which fell to 4.71 per cent for the 10-year note and 5.02 per cent for the two-year note.

Bruce Powers, analyst at FXEmpire, said gold triggered the inside line and fell, but there was no overwhelming selling pressure as support emerged relatively quickly at the intraday low of $1,813, a new correction low but only $2 below the trend low of $1,815 two days ago.

Friday's price action continued the overall bearish pattern of lower daily highs and lower lows, and it is likely to see the lowest daily closing price of the pullback. However, the closing price will complete above the $1,815 low, which was stronger than it actually was. The price action over the past few days suggests that the bearish momentum has slowed as the Relative Strength Index (RSI) continues to become more oversold. The current reading is 19.27, while the RSI was last oversold in 2018.

As downward pressure remains and continues to dominate gold sentiment, a continuation of the bearish trend is likely to win out. A drop below Friday's low of $1,813 signals a continuation of the underlying bearish trend. Because as seen today, the initial trigger may not follow immediately or may reverse. Therefore, price action should be watched after the signal appears.

The next lower target area is between $1809 and $1787, which is based on the February volatility low of $1805. In addition, the measurement movement is completed at $1807. Other price levels within the potential support area are derived from Fibonacci levels, including the 61.8% Fibonacci retracement level at $1794.

Gold has fallen for 11 consecutive days and has not seen a noticeable rebound, which is a testament to the extent of selling pressure during the decline. It may also increase the opportunity to test the lower support area before the selling pressure is lifted. A fall below the swing low of $1,805 could cause greater panic in the gold market than it has so far. In addition, it could also weed out weak holders by triggering a stop loss located below that swing low. However, the recent sharp sell-off could bring about a sharp rebound once sentiment shifts from bearish to bullish.