enDaily Analysis 06/06/2024
Latest Economic and Fundamental Insights
The dollar index fell towards 104 on Thursday, hovering near its lowest levels in two months, as signs of weakness in the US labor market revived hopes for two interest rate cuts by the Federal Reserve this year, with the first step expected to occur in September.
Gold prices rose ahead of the release of US jobs data
-US private payrolls rose less than expected in May, while the previous month’s data was revised lower.
Investors are now awaiting non-farm payrolls data scheduled for release on Friday to gauge the health of the US economy and whether that will prevent the Federal Reserve from cutting interest rates in September.
The Fed will cut its key interest rate in September and again this year, according to a majority of forecasters in a Reuters poll that also showed there is significant risk in choosing just one or none at all.
Traders currently expect about a 70% chance of a rate cut in September, according to the CME FedWatch tool.
Low interest rates reduce the opportunity cost of holding non-yielding bullion.
At the same time, the European Central Bank was certain to cut interest rates from record levels and is likely to acknowledge that it has made progress in its battle against high inflation, while also stressing that the battle is far from over.
The Russian Ministry of Finance said it will reduce its purchases of foreign currency and gold next month, a move that would increase the country’s overall foreign exchange sales.
Asian stocks rose on Thursday amid growing expectations that the US Federal Reserve is likely to cut interest rates in September, while the euro advanced ahead of the European Central Bank’s policy meeting where a rate cut is widely expected.
-Oil rises thanks to expectations of a Federal interest rate cut, but the OPEC+ decision limits the gains, with Brent crude trading at $78.00 and West Texas Intermediate crude at $74.00.
-Nearly two-thirds of economists now expect interest rates to be cut in September, according to a Reuters poll. From May 31 to June 5, making up for the recent negative news about the show.
Lower interest rates reduce the cost of borrowing, which can stimulate economic activity and boost demand for oil.
However, the Fed’s interest rate path is not a foregone conclusion as US services sector activity, which accounts for the vast majority of the country’s economic output, returned to growth in May after contracting the previous month. This may weaken the justification for lowering interest rates.
-Bitcoin price started to rise well above the $70,500 resistance level. BTC is showing positive signs and may gain bullish momentum above the $72,000 resistance level 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: 2366.30
The first scenario: Buy gold at a break and hold above 2373.60, with a target price of 2380.20 and 2387.33.
Alternative scenario: sell gold at a break and hold below 2362.39, with a target price of 2355.94 and then 2349.72.
Comment: Trading above supports and averages suggests an upward trend
CRUDE OIL
Trend: bearish
Time interval: half an hour (30 minutes)
Current price: $74.25 per barrel
The first scenario: selling oil at a break and holding steady by closing the candle below the $73.82 level, targeting a price of $73.30, then 72.71. Alternative scenario: buying oil at a break of the $74.50 level, targeting a price of $74.97, then 75.53.
Comment: Trading below resistances and averages suggests a decline
EURUSD
General trend: bullish
Time interval: half an hour (30 minutes)
Current price: 1.08816 The first scenario: Buying Euro/Dollar at a break of 1.08898, targeting a price of 1.09082 then 1.09307
Alternative scenario: sell the euro/dollar at a break and hold firm by closing the candle below 1.08670, targeting the price of 1.08510 then 1.08297.
Comment: Trading above supports and averages suggests an upward trend
GBPUSD
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: 1.27929
The first scenario: Buying the pound dollar at a break and stability above the level of 1.28092, targeting the price of 1.28378, then 1.28599.
Alternative scenario: sell the pound/dollar at a break and hold firm by closing below 1.27756, targeting a price of 1.27558 then 1.27334.
Comment: Trading above supports and averages suggests an upward trend
NAS100
rend: bullish
Time interval: half an hour (30 minutes)
Current price: 19084
The first scenario: Buy the Nasdaq at a break and hold steady by closing above 19131, targeting the price of 19201 then 19281.
Alternative scenario: sell Nasdaq at a break and hold firm by closing below 19030, price 18973, then 18922.
Comment: Trading above supports and averages suggests an upward trend
Economic Calendar
(Times are in GMT+3)
-From Europe, the interest rate decision issued by the European Central Bank (June) 15:15
-From the United States of America, unemployment complaints rate index 15:30
-From the United States of America Services PMI (May) 16:45
-European Central Bank press conference 15:45
Fundamental Analysis
The dollar index fell towards 104 on Thursday, hovering near two-month lows, as signs of weakness in the US labor market revived hopes for two interest rate cuts by the Federal Reserve this year, with the first step expected to occur in September.
The ADP report showed that private companies added fewer jobs than expected, adding to signs of a weak labor market.
Meanwhile, ISM data showed that US service sector activity grew by the most in nine months during May, well above market expectations.
Investors are now looking to Friday’s expected monthly jobs report for further insights into the economy and the likely path of monetary policy.
Markets are also bracing for an expected interest rate cut from the European Central Bank later today, the first such move since 2019.
The dollar fell across the board, with selling activity most evident against the Australian dollar and the yen.
Gold prices rose on Thursday, building on the previous session’s gains as investors awaited US non-farm payrolls data that may determine whether interest rates will be cut earlier than expected this year.
Oil extended gains from the previous session on Thursday amid growing expectations that the Federal Reserve will cut interest rates in September, although prices were limited on the back of rising US inventories and an OPEC+ plan to increase supply.
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