enDaily Analysis 04/07/2024
Latest Economic and Fundamental Insights
The dollar index held steady around 105.3 on Thursday after hitting a three-week low in the previous session, weighed down by weak U.S. economic data that boosted bets on a Federal Reserve interest rate cut this year.
Gold rises after weak data fuels bets on U.S. rate cut
-US non-farm payrolls report due on Friday, gold could hit $2,400 if NFP data confirms economic cracks
-US nonfarm payrolls report due Friday
US economic data released on Wednesday, including weakness in the services sector and ADP employment reports, showed the economy slowing. A separate report showed an increase in initial applications for unemployment benefits in the United States last week.
Traders are now awaiting the US non-farm payrolls data, due out on Friday.
“The weaker-than-expected ISM services report was the gift that Fed supporters were waiting for ahead of the nonfarm payrolls report,” said Matt Simpson, senior analyst at City Index. “We could see a move to $2,400 if the nonfarm payrolls report confirms the economic cracks we are seeing elsewhere.”
“I doubt we will see the US Dollar Index retest the 106 level anytime soon, so we expect traders to look to dollar bounces and buy gold on dips.”
Markets are now pricing in a 74% chance of the Fed cutting rates at its September meeting, according to the CME FedWatch tool.
Low interest rates lower the opportunity cost of holding non-yielding gold.
Meanwhile, Federal Reserve officials acknowledged at their latest meeting that the U.S. economy appears to be slowing, but still advised a wait-and-see approach before committing to cutting interest rates, according to minutes of the June 11-12 meeting.
Spot gold could test the support zone between $2,346 and $2,352 an ounce, Reuters technical analyst Wang Tao said, with a break below that likely to lead to a drop to the $2,329-$2,340 range.
Asian shares hit 27-month highs on Thursday after weaker U.S. data narrowed the chances of a September interest rate cut there, boosting bonds and commodities while weighing on the dollar.
Oil falls on concerns over weak demand outlook and slowing US economy, with Brent crude trading at $86.00 and WTI at $82.00
“Geopolitics and weather remain upside risks, but the underlying strength of the physical market appears to be weakening,” Citigroup analysts said in a note to clients, adding that physical markets are trading post-September summer cargoes when demand may be weakened in part by hurricane risks.
-US crude shipments to Europe fell to a two-year low in June as European buyers snapped up cheaper oil from the region and West Africa, although some recovery in purchases in July and August could still occur.
-Bitcoin has dropped at the time of writing, erasing its weekend gains and approaching $60,000. If bears continue to press and increase their short positions, the chances of the coin slipping below the psychological figure and $56,800 remain high.
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: Upward
Time interval: half an hour (30 minutes)
Current price: 2354.98
Scenario 1: Buy gold with a break and stability above 2364.20, targeting 2370.63 and 2377.76
Alternative scenario: Sell gold with a break and stability below 2352.81 with a target price of 2346.37 and then 2340.14
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Upward
rend: Upward
Interval: Half an hour (30 minutes)
Current price: $82.80 per barrel
Scenario 1: Buy oil with a break and stability by closing a candle above the $83.29 levels, targeting $83.76 and then $84.33.
Alternative scenario: Sell oil by breaking $82.61 with a target price of $82.09 then $81.51
Comment: Trading above the supports and averages suggests an upward trend.
EURUSD
General trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.07875
Scenario 1: Buy EUR/USD by breaking 1.08030, targeting 1.08214 and then 1.08439.
Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.07803, targeting 1.07643 and then 1.07430.
Comment: Trading above the supports and averages suggests an upward trend.
GBPUSD
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.27459
Scenario 1: Buy the pound dollar with a break and stability above the level of 1.27628, targeting the price of 1.27914 and then 1.28135.
Alternative scenario: Sell the pound dollar with a break and stability with a close below 1.27292, targeting 1.27094 and then 1.26870.
Comment: Trading above the supports and averages suggests an upward trend.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 20403
Scenario 1: Buy Nasdaq with a break and hold with a close above 20461, targeting 20531 then 20611
Alternative scenario: Sell Nasdaq with break and hold with close below 20360 price 20303 then 20252
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
From USA Independence Day Closure Holiday
Fundamental Analysis
The dollar index held steady around 105.3 on Thursday after hitting a three-week low in the previous session, weighed down by weak U.S. economic data that boosted bets on a Federal Reserve interest rate cut this year.
U.S. services activity unexpectedly contracted in June, while private sector employment growth was below expectations in a sign of a slowing economy, data showed on Wednesday.
Meanwhile, minutes from the Fed’s June policy meeting revealed that members were divided on how long they should hold the benchmark interest rate steady, while agreeing that there should be no rush to cut rates.
Investors are now looking ahead to Friday’s nonfarm payrolls report for further insights into the labor market.
Markets now see a 68% chance of the Fed cutting rates in September, a big increase from 56% a week ago.
The dollar fell against major currencies, but remained near a 38-year high against the yen.
Gold prices rose on Thursday after weaker-than-expected U.S. economic data fueled hopes the Federal Reserve will cut interest rates in September.
Oil prices fell in Asia on Thursday as investors turned cautious amid expectations of weaker demand after weaker-than-expected U.S. employment and business data suggested the economy of the world’s biggest oil consumer may be slowing.
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