enDaily Analysis 05/04/2024
Latest Economic and Fundamental Insights
The dollar index rose above 104.3 on Friday, recouping some of its losses earlier in the week as Federal Reserve officials cast doubt on the timing of potential rate cuts, while investors await the key US jobs report.
Gold pauses near record high ahead of US jobs data
- Gold hit an all-time high of $2,305.04 an ounce on Thursday
- Non-farm payrolls report due at 15:30 Mecca time
- Silver and platinum on track for weekly gains
The decline in the US dollar, investors’ expectations that the Fed will cut rates this year, economic uncertainty, and rising tensions in the Middle East have been a driving force for markets and even more so for gold.
The metal is on track for its third straight weekly gain, up 2.3% so far, also driven by strong buying from central banks and demand from momentum funds.
Fed Chair Jerome Powell reiterated that the US central bank has time to deliberate on its first rate cut, given the strength of the economy and recent high inflation readings.
- Traders currently price in a nearly 65% chance of the Fed cutting rates in June, according to the CME FedWatch tool. Lower interest rates reduce the opportunity cost of holding bullion.
Middle East tensions spook markets
- European stocks are set for a shaky start on Friday, with futures pointing to the biggest one-day percentage drop in months, weighed down by rising tensions in the Middle East.
- Asian stocks fell on Friday as hawkish comments from some Fed officials and rising geopolitical tensions dampened risk appetite, while traders also remained cautious ahead of US jobs data due later in the day.
Dollar steadies, yen hits two-week high ahead of key US jobs data
Oil on track for second weekly gain on geopolitical tensions, supply concerns
- Brent crude futures trade at $91.00 a barrel, and West Texas Intermediate crude at $86.00 a barrel
- Oil prices look set for further gains in the short term, as a more positive economic backdrop joins persistent supply shortages and rising geopolitical risks. Brent’s target price is $95 per barrel.
- Both June Brent and May West Texas Intermediate crude futures have risen for the past four days and closed on Wednesday at their highest since late October.
- Brent and WTI are on track to gain more than 4% this week, rising for a second straight week, after Iran, OPEC’s third-largest producer, vowed to avenge Israel for an attack that killed senior Iranian military personnel.
Bitcoin price attempts a recovery wave above the $66,500 resistance level. BTC needs to break above the $70,000 resistance level to continue its upward movement in the near term.
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: 2279.53
The first scenario: Buy gold at a break and hold above 2284.98, with a target price of 2291.41 and 2298.80. Alternative scenario: Sell gold at a break and hold below 2273.60, with a price target of 2267.16 and then 2259.80.
Comment: Trading above supports and averages suggests an upward trend
CRUDE OIL
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: $86.44 per barrel
The first scenario: Buying oil at a break and holding steady by closing the candle at the highest level at $86.69, targeting a price of $87.16, then 87.73. Alternative scenario: Selling oil at a break of $86.02, targeting a price of $85.49, then 84.91.
Comment: Trading above supports and averages suggests an upward trend
EURUSD
General trend: – Bearish
Time interval: half an hour (30 minutes)
Current price: 1.08327
The first scenario: sell the euro/dollar at a break of 1.08192, targeting a price of 1.08032, then 1.07819. Alternative scenario: buy the euro/dollar at a break of 1.08419, targeting a price of 1.08604, then 1.08828.
Comment: Trading below resistances and averages suggests a decline
GBPUSD
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: 1.26242
The first scenario: Buy the pound dollar at a break and hold at the highest level of 1.26448, targeting a price of 1.26734 then 1.26955. Alternative scenario: sell the pound dollar at a break and hold at a close below 1.26112, targeting a price of 1.25915 then 1.25691.
Comment: Trading above supports and averages suggests an upward trend
NAS100
Trend: down
Time interval: half an hour (30 minutes)
Current price: 18113
The first scenario: Selling the Nasdaq at a break and holding steady with a close below 18086, targeting the price of 18044 then 18001. The alternative scenario: Buying the Nasdaq at a break and holding steady with a close above 18145, targeting the price of 18185 then 18231.
Comment: Trading below resistances and averages suggests a decline
Economic Calendar
(Times are in GMT+3)
– From China: Qingming Festival holiday closure
– From the United States: Average hourly earnings (monthly) (March) 15:30
– From the United States: Private sector employment report (March) 15:30
– From the United States: Unemployment rate (March) 15:30
Fundamental Analysis
Federal Reserve Bank of Minneapolis President Neel Kashkari said on Thursday that if inflation remains stable, there may be no need to cut rates this year.
Federal Reserve Chair Jerome Powell also said on Wednesday that the central bank needs more evidence that inflation is moving sustainably toward its 2% target before cutting rates.
However, markets continued to bet that the Fed will start easing monetary policy this year.
Investors are now looking ahead to the jobs data on Friday, as well as inflation readings next week, which could affect the central bank’s decision in May and June.
The dollar rebounded across the board but fell against the Japanese yen amid fears of intervention.
Gold’s five-session record rally, which put the metal on track for its third straight weekly gain, paused on Friday as the market’s focus shifted to US non-farm payrolls data that could provide more clues on the path of Fed monetary policy.
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