enDaily Analysis 02/04/2024
Latest Economic and Fundamental Insights
The dollar index steadied around 105.0 on Tuesday, holding near its highest levels since mid-February as traders looked ahead to key US economic indicators due this week including the jobs report, JOLTS and the ISM services PMI to gauge the health of the economy.
Gold holds firm as softer Treasury yields boost appeal
• US 10-year Treasury yields fell, lifting gold
• US manufacturing sector grew for first time in 1-1/2 years in March, with output rebounding sharply and new orders surging, but factory employment remained weak and input prices rose
• New York Fed said on Monday that underlying inflation pressures softened in February
• Surveys and data showed factory activity in many Asian economies weakened in March, but there were some brighter signs in China and South Korea
• Australia’s central bank plans to change the way it provides liquidity to the banking system, moving to a system that provides ample liquidity through regular money market operations
• Traders are pricing in a 57% chance the Fed will start cutting rates in June, according to the CME Group’s FedWatch tool. Lower interest rates reduce the opportunity cost of holding the bullion
• Stocks retreat as upbeat mood on rate cuts fades
• Tesla’s shock 30% Q1 drop wipes $40 billion off Elon Musk’s net worth
• Fed Chair Jerome Powell said on Friday that inflation data released that day “was what we expected” and that you “won’t see us overreacting,” suggesting the U.S. central bank is content to remain in a wait-and-see mode
Asian shares rise, dollar steadies, keeping yen near 152 per dollar, which has traders worried about potential intervention, as expectations that the Federal Reserve was on the verge of cutting interest rates have faded.
Oil gains on upbeat manufacturing data, rising Middle East tensions; Brent crude trades at $87.00, WTI at $83.00
• Manufacturing activity in China and the United States expanded in March for the first time in six and a half months respectively, which markets took as a sign of rising demand for oil. China is the world’s largest importer of crude oil, while the United States is the largest consumer
• In the Middle East, an Israeli strike on the Iranian embassy in Syria killed seven military advisers, including three senior commanders, in an escalation of the nearly half-year-old conflict that has raised concerns about further tangible impacts on oil supplies
• Bitcoin price started another decline from the $70,000 resistance zone. Bitcoin fell by more than 5% and there was a move below the $67,500 support level
Smart technical reports
How they work
A likely scenario is proposed for today, and the probability of this scenario being achieved, according to technical analysis, may be between 60% and 75%.
If the first scenario fails, the probability of the second scenario being achieved will be between 60% and 75% certain.
The first scenario fails when the price reaches the level of the alternative scenario condition, and the alternative scenario is immediately activated and the prediction from the first scenario is cancelled.
These reports are not considered a substitute for the trader’s decision, but rather they are a tool to assist the follower in making his own decisions, as a reference based on the origins of classical technical analysis.
GOLD
General trend: bullish
Time interval: half an hour (30 minutes)
Current price: 2256.70
The first scenario: Buy gold at a break and hold above 2261.09, with a target price of 2267.02 and 2274.90. Alternative scenario: Sell gold at a break and hold below 2249.71, with a price target of 2243.26 and then 2235.90.
Comment: Trading above supports and averages suggests an upward trend
CRUDE OIL
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: $83.65 per barrel
The first scenario: Buying oil at a break and holding steady by closing the candle at the highest level at $83.84, targeting a price of $84.31, then 84.87. Alternative scenario: Selling oil at a break of $83.16, targeting a price of $82.64, then 82.06.
Comment: Trading above supports and averages suggests an upward trend
EURUSD
General trend: – Bearish
Time interval: half an hour (30 minutes)
Current price: 1.07322
The first scenario: sell the euro/dollar at a break of 1.07246, targeting a price of 1.07086, then 1.06873. Alternative scenario: buy the euro/dollar at a break of 1.07473, targeting a price of 1.07658, then 1.07882.
Comment: Trading below resistances and averages suggests a decline
GBPUSD
Trend: down
Time interval: half an hour (30 minutes)
Current price: 1.25433
The first scenario: selling the pound dollar at a break and holding below the level of 1.25353, targeting the price of 1.25156 then 1.24932. The alternative scenario: buying the pound dollar at a break and holding steady by closing above 1.25689, targeting the price of 1.25975 then 1.26197.
Comment: Trading below resistances and averages suggests a decline 1.25975
NAS100
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: 18479
The first scenario: Buying Nasdaq at a break and holding steady with a close above 18512, targeting the price of 18551 then 18598. Alternative scenario: Selling Nasdaq at a break and holding steady with a close below 18453, targeting a price of 18411 then 18368.
Comment: Trading above supports and averages suggests an upward trend
Economic Calendar
(Times are in GMT+3)
- China releases its Consumer Price Index (CPI) for both monthly and annual figures for March at 11:00.
- Germany releases its monthly Consumer Price Index for March at 15:00.
- The United States releases its Job Openings and Labor Turnover Survey (JOLTS) data for February at 17:00.
Fundamental Analysis
The dollar index steadied around 105.0 on Tuesday, holding near its highest levels since mid-February as traders looked ahead to key US economic indicators due this week including the jobs report, JOLTS and the ISM services PMI to gauge the health of the economy.
Meanwhile, Fed Chair Powell is scheduled to speak on Wednesday, following his comments last Friday that suggested it would be inappropriate to cut rates until officials are confident that inflation is under control.
Based on new data, the ISM manufacturing PMI signaled the first expansion in the manufacturing sector in a year and a half.
Traders are currently pricing in a roughly 61.3% chance that the Fed will cut the federal funds rate by at least 25 basis points in June.
Gold prices steadied on Tuesday, supported by lower US Treasury yields, after touching a record high in the previous session on rising expectations that the Fed will cut rates for the first time in June.
Oil prices rose in early Asian trading on Tuesday, supported by signs of improving demand and rising Middle East tensions that lifted US futures to a five-month high in the previous session.
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