enDaily Analysis 04/09/2024
Latest Economic and Fundamental Insights
The dollar index held steady around 101.7 on Wednesday after hitting a two-week high in the previous session, supported by increased safe-haven demand after weak U.S. manufacturing data reignited recession fears.
Gold stabilizes above $2490
U.S. manufacturing activity fell more than expected in August, data from the Institute for Supply Management (ISM) showed, highlighting weakness in the sector and challenging the idea that the U.S. economy is still resilient in the face of higher borrowing costs.
Meanwhile, expectations of a shift towards a dovish policy have been tempered by a sharper-than-expected rise in producer prices.
Investors now await additional economic data, including the key jobs report later this week, which will provide insights into how the labor market has performed since the weak July report and the large downward revision to payrolls numbers for the year ending March 2024.
Markets still expect the Fed to cut interest rates by 100 basis points during its remaining three meetings this year, which would lower the opportunity cost of holding non-interest-bearing assets.
Economists polled by Reuters expect Friday’s nonfarm payrolls report to show an increase of 165,000 jobs in August, up from a gain of 114,000 in July. Before that, the focus will be on Wednesday’s job openings data and Thursday’s employment and jobless claims reports.
Asian stocks and global equity futures fell on Wednesday, led by a sharp decline in technology shares and as concerns over the global growth outlook prompted investors to dump riskier assets, while oil prices hit multi-month lows.
Oil continues to decline as the Libyan conflict and demand concerns ease, with Brent crude trading at $73.00 and West Texas Intermediate at $69.00.
Benchmark crude futures fell to their lowest levels since December amid signs of a deal to resolve a political dispute between rival factions in Libya that has cut production by about half and curbed exports.
“Selling continued in Asia amid expectations of a possible agreement to resolve the conflict in Libya,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
The market also remained under pressure due to concerns about weak fuel demand following weak economic indicators from China and the United States.
Libya’s two legislative bodies agreed Tuesday to jointly appoint a central bank governor, potentially calming a battle over oil revenues that sparked the conflict.
Libya’s oil exports from major ports were halted on Monday and production has fallen nationwide. Libya’s National Oil Corporation has declared force majeure on the El Feel oilfield as of September 2.
-Bitcoin price has started to decline again below the $57,200 area. Bitcoin is showing bearish signs and may soon test the $55,000 support area.
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
Interval: Half an hour (30 minutes)
Current price: 2487.08
Scenario 1: Buy gold with a break and stability above 2497.07, targeting 2503.50 and 2510.63
Alternative scenario: Sell gold with a break and stability below 2485.69, targeting 2479.24 and then 2471.41
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $69.45 per barrel
Scenario 1: Sell oil by breaking the $69.19 level, targeting $68.67 and then $68.08.
Alternative scenario: Buy oil with a break and stability by closing a candle above the $68.87 levels, targeting $70.43 and then $70.90.
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.10537
First scenario: Buy the Euro-Dollar by breaking 1.10645, targeting 1.10830 and then 1.11054.
Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.10418, targeting 1.10258 and then 1.10045.
Comment: Trading above the supports and averages suggests an upward trend.
GBPUSD
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.31120
Scenario 1: Selling the pound dollar with a break and stability below the 1.30986 level, targeting the price of 1.30745 and then 1.30524
Alternative scenario: Buy the pound dollar with a break and hold with a close above 1.31286, targeting 1.31527 and then 1.31813.
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 18903
Scenario 1: Buy Nasdaq with a break and hold to close above 18970 with a target price of 19072 then 19191
Alternative scenario: Sell Nasdaq with break and hold with close below 18813 with target price of 18688 then 18581
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
-From Canada, Bank of Canada interest rate decision 16:45
-From USA, Job Openings (JOLTs) (July) 17:00
Fundamental Analysis
The dollar index held steady around 101.7 on Wednesday after hitting a two-week high in the previous session, supported by increased safe-haven demand after weak U.S. manufacturing data reignited recession fears.
The Institute for Supply Management’s manufacturing purchasing managers’ index showed that factory activity contracted for the fifth straight month and at a slightly faster pace than expected.
Markets are now looking ahead to a series of US labor market reports due later this week that could influence the size of the Federal Reserve’s expected interest rate cut this month.
The latest weekly unemployment claims and monthly payroll reports will be carefully scrutinized.
Markets currently price in a 25 basis point rate cut at around 60%, compared to a 40% chance of a larger 50 basis point cut.
The dollar held onto recent gains against most major currencies, but lost some ground against the safe-haven yen.
Gold held above $2,490 an ounce on Wednesday, after falling in previous sessions, as investors assessed fresh economic data and its impact on the Federal Reserve’s interest rate outlook.
Oil prices fell on Wednesday, extending a more than 4% drop the previous day, amid expectations that a political dispute halting Libyan exports could be resolved and concerns about slowing global demand growth.
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