enDaily Analysis 07/11/2024
Latest Economic and Fundamental Insights
Dollar holds gains ahead of Fed decision
The dollar index held above 105 on Thursday, trading near a four-month high as investors awaited the Federal Reserve’s latest policy decision.
Gold stabilizes after sharp decline
-The Trump presidency has also prompted traders to dump gold positions as a safe haven, as markets anticipate interest rate hikes by the Federal Reserve, which reduces gold’s appeal.
This comes at a time when the newly elected US president was adopting policies in his election campaign that focused on reducing illegal immigration, raising tariffs, cutting taxes, and removing regulatory restrictions, which fueled expectations of a larger deficit and inflation.
Meanwhile, attention is now focused on the Federal Reserve’s upcoming monetary policy announcement later today, with a 25 basis point rate cut expected.
Gold rises amid possible technical correction
Gold prices rose in early Asian trading in a possible technical correction after gold futures fell 2.7% overnight in the previous month. Gold prices fell on Wednesday as Treasury yields and the dollar rose after Trump won the US presidential election.
These market moves may reflect expectations of a return to high inflation in the long term, given Trump’s economic policies.
-This suggests that the Federal Reserve may be “less accommodative” with interest rate cuts over the next year or so, which could put downward pressure on gold prices.
Asia-Pacific stock markets were mixed on Thursday as investors assessed the fallout from Donald Trump’s presidency, while also watching monetary policy decisions from the U.S. Federal Reserve and other major central banks later in the day.
Oil prices rise as investors await the repercussions of the US elections, with Brent crude trading at $75.00 and West Texas Intermediate at $71.00.
Concerns about a Trump presidency weighing on oil supplies from Iran and Venezuela, as well as an approaching storm, “more than offset the impact of a stronger U.S. dollar after the election and… higher-than-expected U.S. inventories,” Tony Sycamore, a market analyst at IG, wrote in a note.
Trump’s election initially sparked a sell-off that sent oil prices down more than $2 as the US dollar rose to its highest level since September 2022. But front-month contracts pared losses to settle at 61 cents for Brent and 30 cents for WTI by the end of Wednesday’s session.
“Historically, Trump’s policies have been pro-business, which is likely to support overall economic growth and fuel demand. However, any intervention in the Fed’s accommodative policies could lead to further challenges for the oil market,” said Priyanka Sachdeva, senior market analyst at Philip Nova.
“With the dollar at a four-month high, oil appears to be facing massive headwinds in the wake of the US election results.”
Sachdeva said the upside in oil markets may be limited to the short to medium term as OPEC is expected to increase its supply capacity in January, while historical trends do not suggest that sanctions will prevent India and China from continuing to buy oil from Russia or Iran.
-Donald Trump is expected to reimpose his “maximum pressure” policy of sanctions on Iranian oil, which could cut supplies by as much as 1 million barrels per day, according to Energy Aspect estimates.
– Trump also imposed tougher sanctions on Venezuelan oil in his first term, measures that the Biden administration briefly rolled back but later reimposed.
-Bitcoin price is gaining momentum above the $74,000 level. Bitcoin is trading in a bullish zone and could rise further above the resistance area at $76,500.
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: 2655.79
Scenario 1: Buy gold with a break and stability above 2662.59, targeting 2669.02 and 2676.15
Alternative scenario: Sell gold with a break and stability below 2651.21 with a target price of 2644.76 and then 2636.92
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: $71.76 per barrel
Scenario 1: Buy oil by breaking the $72.05 level, targeting $72.51 and then $73.028.
Alternative scenario: Sell oil with a break and stability by closing a candle below the $71.37 levels, targeting $70.85 and then $70.26.
Comment: Trading above the supports and averages suggests an upward trend.
EURUSD
General trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.07369
Scenario 1: Sell EUR/USD after breaking 1.07276, targeting 1.07117 and then 1.06904.
Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.07504, targeting 1.07688 and then 1.07913.
Comment: Trading below the resistances and averages suggests a decline.
GBPUSD
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.29195
Scenario 1: Selling the pound dollar with a break and stability below the 1.29053 level, targeting the price of 1.28813 and then 1.28591
Alternative scenario: Buy the pound dollar with a break and hold with a close above 1.29353, targeting 1.29594 and then 1.29880.
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 20911
Scenario 1: Buy Nasdaq with a break and hold to close above 20974 with a target price of 21078 then 21196
Alternative scenario: Sell Nasdaq with break and hold with close below 20817 with target price 20693 then 20586
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
-From Britain Bank of England interest rate decision (November) 16:30
-From the United States Unemployment claims rate 16:30
-Federal Open Market Committee report 10:00
-Federal Bank interest rate decision 10:00
-Federal Reserve press conference 10:30
Fundamental Analysis
The dollar index held above 105 on Thursday, trading near a four-month high as investors awaited the Federal Reserve’s latest policy decision.
The Federal Reserve is widely expected to cut interest rates by 25 basis points later today, with traders also seeking guidance on whether further rate cuts will follow in December.
The dollar rose about 2% on Wednesday after Republican Donald Trump’s decisive victory in the US presidential election.
Republicans also regained control of the Senate, which could pave the way for major legislative changes, although control of the House of Representatives remains uncertain.
Trump’s policies—focused on curbing illegal immigration, raising tariffs, cutting taxes, and deregulating—are seen as potential drivers of growth and inflation.
The prospect of increased government spending and rising debt has supported the dollar and lifted Treasury yields.
The dollar held onto recent gains, trading at multi-month highs against other major currencies.
Gold held around $2,650 an ounce on Thursday, after falling more than 3% to a three-week low in the previous session, pressured by a stronger dollar after Donald Trump won the U.S. presidency.
Oil prices rose on Thursday after a sell-off sparked by the U.S. presidential election, as risks to oil supplies from a Trump presidency and a hurricane brewing in the Gulf Coast outweighed a strong U.S. dollar and rising inventories.
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