enDaily Analysis 08/07/2024
Latest Economic and Fundamental Insights
The dollar index held below 105 on Monday after losing about 1% last week, weighed down by weak U.S. economic data that reinforced the Federal Reserve’s hawkish outlook on monetary policy.
Gold retreats from May peak on profit-taking
-US unemployment rate rises to 4.1%, People’s Bank of China refrains from buying gold for second month, Fed Chairman Powell’s testimony, US inflation data this week
Data on Friday showed the unemployment rate hit a two-and-a-half-year high of 4.1%, indicating a weak labor market in the United States.
“We took a little bit of a profit this morning because we saw a big rally on Friday night after the payrolls data,” said Kyle Rodda, a financial markets analyst.
Markets are pricing in a 78% chance of the Fed cutting rates in September, according to the CME’s Fedwatch tool. Traders are also pricing in a second rate cut in December.
Low interest rates reduce the opportunity cost of holding non-yielding bullion.
Markets are focused this week on Federal Reserve Chairman Jerome Powell’s semi-annual testimony to Congress, comments from a series of Fed officials, and U.S. inflation data.
Matt Simpson, senior analyst at City Index, said the weak US inflation report and a dovish tone from Powell when he testifies look like the perfect catalysts for gold to think of new highs.
Elsewhere, China’s central bank, the world’s largest gold consumer, refrained from buying gold to boost its reserves for a second straight month in June.
“China may have halted its gold purchases, but overall demand remains strong. This is likely to keep gold on bullish watchlists and tempt bulls on any dips,” Simpson said.
Asian stocks rose on Monday as investors grew more confident about a U.S. interest rate cut in September, while the euro faced political uncertainty after French elections pointed to a hung parliament.
Oil falls as Gaza talks ease supply disruptions, Storm Beryl in spotlight, Brent at $86.00, WTI at $82.00
-Major Texas oil and gas ports shut down Sunday, Iranian voters elect moderate Masoud Pezeshkian as president, and French elections will leave parliament divided
Talks are currently underway on a US ceasefire plan to end the nine-month war in Gaza, mediated by Qatar and Egypt.
“If anything concrete comes out of the ceasefire talks, it will take some of the geopolitical bid out of the market for now,” said Tony Sycamore, an analyst at Sydney-based IG.
The ports of Corpus Christi, Houston, Galveston, Freeport and Texas City were closed Sunday in preparation for Tropical Storm Beryl, which could strengthen into a Category 2 hurricane after it makes landfall on the central Texas coast between Galveston and Corpus Christi later Monday.
-Bitcoin price failed to start a recovery wave above the $58,500 resistance area. Bitcoin started declining again and may extend its losses below $54,000.
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: 2385.39
Scenario 1: Buy gold with a break and stability above 2389.89, targeting 2396.32 and 2403.48
Alternative scenario: Sell gold with a break and stability below 2378.51 with a target price of 2372.06 and then 2365.83
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $82.15 per barrel
Scenario 1: Sell oil with a break and stability by closing a candle below $81.85 levels, targeting $81.32 and then $80.74
Alternative scenario: Buy oil by breaking $82.52 with a target price of $82.99 then $83.56
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.08189
Scenario 1: Buy EUR/USD by breaking 1.08358, targeting 1.08542 and then 1.08767
Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.08130, targeting 1.07970 and then 1.07757.
Comment: Trading above the supports and averages suggests an upward trend.
GBPUSD
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.28068
Scenario 1: Buy the pound dollar with a break and stability above the 1.28281 level, targeting the price of 1.28567 and then 1.28789.
Alternative scenario: Selling the pound dollar with a break and stability with a close below 1.27945, targeting 1.27748 and then 1.27524
Comment: Trading above the supports and averages suggests an upward trend.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 20600
Scenario 1: Buy Nasdaq with a break and hold with a close above 20643, targeting 20712 then 20793
Alternative scenario: Sell Nasdaq with break and hold with close below 20541 price 20484 then 20433
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
There are no important economic events scheduled for today.
Fundamental Analysis
The dollar index held below 105 on Monday after losing about 1% last week, weighed down by weak U.S. economic data that reinforced the Federal Reserve’s hawkish monetary policy outlook.
The U.S. unemployment rate rose to a 2-1/2-year high of 4.1% in June, data showed on Friday, adding to signs of a slowing labor market.
Previous data also pointed to weaker U.S. private sector employment and services activity. Markets now expect the Fed to cut rates in September by 76%, with a second rate cut in December also in the cards.
Investors are now looking ahead to key US inflation data this week, as well as fresh comments from Federal Reserve officials to further guide interest rate expectations.
The dollar held onto recent losses against most major currencies, but gained some ground against the euro after election results in France pointed to a hung parliament.
Gold prices fell on Monday, as investors booked profits after the metal hit its highest level in more than a month in the previous session on growing bets on a U.S. interest rate cut in September.
Oil prices fell on Monday after four weeks of gains, as the prospect of a ceasefire in Gaza eased geopolitical tensions in the Middle East, while investors assessed the possibility of disruption to U.S. energy supplies from Tropical Storm Beryl.
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