enDaily Analysis 09/07/2024
Latest Economic and Fundamental Insights
The dollar index held steady around 105 on Tuesday as investors avoided making big bets ahead of Federal Reserve Chairman Jerome Powell’s testimony before Congress.
Gold rises after sharp decline in previous session as investors await Powell’s testimony
-US CPI and PPI data due later this week – Demand for physical gold is falling, but expected to rise by year-end – Platinum up more than 1%
The US dollar held near a multi-week low against its major peers, making gold cheaper for holders of other currencies.
Powell is scheduled to testify over two days before Congress, starting later today before the Senate, then before the House of Representatives on Wednesday.
“If Powell directly or indirectly signals that weakness is seeping into the U.S. economy, that would be positive for gold,” said Kelvin Wong, senior market analyst for Asia-Pacific at OANDA.
The jobs report released on Friday showed that the US labor market lost strength, with the unemployment rate rising to 4.1%.
Markets are pricing in a 77% chance of a rate cut in September and another in December, according to CME Group’s Fedwatch tool.
The appeal of non-yielding gold bullion tends to shine in a low interest rate environment.
-Wong said that weaker inflation readings could push gold prices to test the minor congestion resistance level at $2,410 in the near term.
Market participants are also awaiting the Consumer Price Index (CPI) and Producer Price Index (PPI) data for June, due on Thursday and Friday, respectively.
Demand for physical gold may have eased in the second quarter but is expected to pick up by the end of the year, analysts at Citigroup said in a note.
The report added that primary gold consumption growth is still trending positive for 2024 and could help push spot prices towards the $2,400-2,600 range in the second half as financial investors try to catch up.
Japan’s Nikkei average hit a record high on Tuesday, while investors elsewhere waited anxiously to see whether Federal Reserve Chairman Jerome Powell will support an interest rate cut after evidence emerged of a slowdown in the U.S. labor market.
Oil falls as supply concerns ease, with Brent trading at $85.00 and WTI at $81.00
The tropical storm that first made landfall in Texas as a Category 1 hurricane has been downgraded due to decreasing wind speeds and now appears set to dissipate without impacting domestic U.S. crude oil markets.
-Moreover, concerns about supply risks due to wildfires in Canada have eased, as they have not spread significantly towards Suncor’s infrastructure.
Meanwhile, investors are monitoring geopolitical developments in the Middle East amid the possibility of a ceasefire agreement between Israel and Hamas, which would reduce fears of escalating the conflict and disrupting oil supplies.
-Bitcoin price is consolidating above $55,000. Bitcoin price must settle above $58,500 and then $60,000 to start the recovery wave.
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: 2363.39
Scenario 1: Buy gold with a break and stability above 2371.44, targeting 2377.87 and 2384.99
Alternative scenario: Sell gold with a break and stability below 2360.05, targeting 2353.61 and then 2347.38
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $81.69 per barrel
Scenario 1: Sell oil with a break and stability by closing a candle below $81.25 levels, targeting $80.73 and then $80.15.
Alternative scenario: Buy oil by breaking $81.93 with a target price of $82.40 then $82.96
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.08275
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: 1.28070
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: 20720 Scenario 1: Buy Nasdaq with a break and hold with a close above 20776 with a target price of 20846 then 20926
Alternative scenario: Sell Nasdaq with break and hold with close below 20674 price 20617 then 20566
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
From the United States of America, Federal Reserve Chairman Powell’s testimony 17:00
Fundamental Analysis
The dollar index held steady around 105 on Tuesday as investors avoided making big bets ahead of Federal Reserve Chairman Jerome Powell’s testimony to Congress.
Markets are also bracing for key US inflation data this week that could shed light on the path of interest rates.
But the index remained close to its lowest level in more than three weeks after losing about 1% last week as weak US economic data reinforced expectations that the Federal Reserve will have to cut interest rates soon.
Data last week showed the U.S. unemployment rate rose to a 2-1/2-year high of 4.1%, services activity contracted unexpectedly and private employment growth was below expectations.
Markets now see a 76% chance of the Fed cutting rates in September, with a second rate cut in December also in play.
Elsewhere, investors continued to assess the impact of a potential political deadlock in France on currency markets, while awaiting the latest decision from the Reserve Bank of New Zealand this week.
Gold prices rose on Tuesday as the dollar remained weak, with investors awaiting testimony from Federal Reserve Chairman Jerome Powell and June inflation data to gauge the U.S. central bank’s next policy move.
West Texas Intermediate crude futures fell toward $82 a barrel on Tuesday, extending losses from the previous session, as widespread concerns about supply disruptions eased.
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