Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

The dollar index traded around 101.3 on Thursday after losing half a percentage point in the previous session, weighed down by growing expectations that the Federal Reserve will implement a large 50 basis point interest rate cut later this month due to weak data.

Gold steady as US jobs data nears

-JOLTS data on Wednesday showed a much larger-than-expected drop in job openings to their lowest level in 2021, reinforcing expectations of a slowing labor market and supporting speculation of a large 50 basis point rate cut by the Federal Reserve this month.

This, coupled with a sharp decline in US factory activity according to the ISM Purchasing Managers’ Index, has raised doubts about the US economy’s ability to withstand higher interest rates.

As a result, investors raised their expectations for a 125 basis point rate cut during the Fed’s three remaining meetings this year, up from last week’s consensus of 100 basis points.

Key US jobs data is due on Friday.

-Gold is steady in early Asian trading. The precious metal erased earlier gains amid further signs of a slowing labor market. They noted that U.S. job openings fell in July to their lowest level since the start of 2021.

The market will be watching key jobs data due on Friday for clues on the extent of the Federal Reserve’s rate cuts.

Asian stock markets struggled to regain their footing on Thursday after a sharp sell-off, while higher U.S. Treasury yields hurt the dollar and lifted the yen, as U.S. economic concerns raised the prospect of a major interest rate cut by the Federal Reserve.

Oil prices rise as OPEC+ may delay supply increases and US inventories fall, with Brent crude trading at $72.00 and WTI at $69.00

“The bearish sentiment in the oil markets seems to be easing after strong API data and news of OPEC+ reconsidering the production jump boosted hopes,” said Priyanka Sachdeva, senior market analyst at Philip Nova.

Four sources from the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, known as OPEC+, told Reuters on Wednesday that they are discussing delaying an increase in oil production due to start in October after prices fell.

Last week, OPEC+ was set to go ahead with raising its production by 180,000 barrels per day in October, as part of a plan to gradually unwind its latest 2.2 million barrels per day cuts.

But the potential end to the conflict that has halted Libyan exports and weakened Chinese demand has prompted the group to reconsider.

Prices also found support on Thursday after data from the American Petroleum Institute showed that U.S. crude oil and fuel inventories fell last week, according to market sources citing API figures on Wednesday.

-Bitcoin price started a recovery wave from the $55,600 area. Bitcoin is now struggling to surpass the $58,500 resistance level and may decline again.

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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.

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GOLD

 

General trend: Upward

Interval: Half an hour (30 minutes)

Current price: 2505.02

Scenario 1: Buy gold with a break and stability above 2507.04, targeting 2513.47 and 2520.60

Alternative scenario: Sell gold with a break and stability below 2495.66, targeting 2589.22 and then 2481.38

Comment: Trading above the supports and averages suggests an upward trend.

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CRUDE OIL

 

Trend: Down

Interval: Half an hour (30 minutes)

Current price: $68.98 per barrel

Scenario 1: Sell oil by breaking the $68.63 level, targeting $68.11 and then $67.52.

Alternative scenario: Buy oil with a break and hold with a candle closing above $69.31, targeting $69.78 and then $70.34

Comment: Trading below the resistances and averages suggests a decline.

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EURUSD

 

General trend: Upward

Interval: Half an hour (30 minutes)

Current price: 1.10827

Scenario 1: Buy EUR/USD by breaking 1.10923, targeting 1.11108 and then 1.11332

Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.10696, targeting 1.10536 and then 1.10323

Comment: Trading above the supports and averages suggests an upward trend.

 

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GBPUSD

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: 1.31520

Scenario 1: Buy the pound dollar with a break and stability above the level of 1.31659, targeting the price of 1.31899 and then 1.32186

Alternative scenario: Selling the pound dollar with a break and stability with a close below 1.31359, targeting 1.31118 and then 1.30896

Comment: Trading above the supports and averages suggests an upward trend.

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NAS100

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: 18931

Scenario 1: Buy Nasdaq with a break and hold to close above 18970 with a target price of 19073 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.

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Economic Calendar

 

(Times are in GMT+3)

-From the United States of America, ADP Non-Farm Private Sector Employment Change (Aug) 15:15

-From the United States of America, unemployment claims rates are 15:30.

-From the United States of America, the services purchasing managers’ index (August) 16:45

-From the United States of America, the Institute for Supply Management (ISM) Non-Manufacturing Purchasing Managers’ Index (August) 17:00

-From the United States of America, US crude oil inventories 18:00

 

Fundamental Analysis

 

 

The dollar index traded around 101.3 on Thursday after losing half a percentage point in the previous session, weighed down by growing expectations that the Federal Reserve will implement a large 50 basis point interest rate cut later this month due to weak data.

Markets also expect a total easing of about 125 basis points this year, up from 100 basis points last week.

The JOLTS report showed that job openings unexpectedly fell to their lowest level in more than three years in July, fueling market concerns about a weak labor market.

This has exacerbated a sharper-than-expected decline in domestic manufacturing activity, highlighted by the Institute for Supply Management’s Purchasing Managers’ Index, which has raised renewed fears of a recession.

Markets are now looking ahead to the latest weekly jobless claims data on Thursday and the monthly jobs report on Friday for further clarity on the labor market.

The dollar suffered losses against other major currencies, and was weaker against the yen.

Gold held steady near $2,500 an ounce on Thursday as investors awaited a key U.S. jobs report for more insight into the extent of the Federal Reserve’s interest rate cuts, which could reduce the opportunity cost of holding non-yielding bullion.

Oil prices rose slightly after falling to multi-month lows earlier on the prospect of major producers delaying planned output increases next month and a decline in U.S. inventories, although gains were limited by lingering demand concerns.