Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

The dollar index traded around 102.5 on Wednesday, hovering near a seven-week high as investors awaited minutes from the Federal Reserve’s latest meeting for fresh insights on the path of monetary policy.

Gold hovers at its lowest level in more than two weeks

This came after better-than-expected US jobs data eased concerns about a slowing labor market.

Markets are currently pricing in an 89% chance that the Fed will cut interest rates by a modest 25 basis points in November.

Investors now await the minutes of the Federal Open Market Committee meeting later today, followed by the key CPI data on Wednesday and the PPI figures on Friday for further signals on monetary policy.

Gold prices also came under pressure after a briefing from China, one of the biggest consumers, on Tuesday, which provided few details on additional stimulus measures.

However, gold’s safe-haven appeal remains supported by fears of a wider conflict in the Middle East.

Gold rises as markets weigh Fed rate cut expectations

Gold prices rose in early Asian trade amid a possible technical correction. Precious metals faced downward pressure on Tuesday as markets continued to digest signs of strong economic growth in the United States that could temper expectations of a rate cut by the Federal Reserve.

-The selling has caused prices to fall below the recent consolidation level at $2,624. Spot gold rose 0.1% but is still below the previous consolidation level at $2,622.27 per ounce.

Oil prices stabilize after falling due to the possibility of a ceasefire between Israel and Hezbollah, with Brent crude trading at $77.00 and West Texas Intermediate at $73.00.

Prices fell more than 4% in the previous session due to the possibility of a ceasefire between Hezbollah and Israel, but markets remain wary of a possible Israeli attack on Iranian oil infrastructure.

“The daily dilemma of ‘Middle East headlines’ moving like a pendulum between ‘ceasefire talks’ and ‘further escalation in attacks’ has been distracting investors from reality,” Priyanka Sachdeva, senior market analyst at Philip Nova, said in an email. “Oil markets are in the throes of ‘buy the rumor’ sentiment and sidelining the real fundamentals that should matter.”

Tuesday’s sell-off followed a rally that began after Iran fired a barrage of missiles at Israel on Oct. 1, leading to an 8% weekly gain on Friday, the biggest in more than a year.

Hezbollah officials appeared on Tuesday to back away from a Gaza truce as a condition for a ceasefire in Lebanon. Hezbollah deputy leader Naim Qassem said he supported attempts to secure a truce in a televised speech, the first time an end to the war in Gaza has not been mentioned as a precondition.

On the demand side, data showed U.S. crude oil inventories rose by about 11 million barrels last week, much more than analysts polled by Reuters had expected, according to market sources citing figures from the American Petroleum Institute on Tuesday. But fuel inventories fell.

Weak demand continued to support the baseline outlook. The U.S. Energy Information Administration on Tuesday cut its forecast for global oil demand growth in 2024 by 20,000 barrels per day to 103.1 million barrels per day due to weak industrial production and manufacturing growth in the United States and China.

Concerns that Beijing has not taken more stimulus measures to boost the Chinese economy also limited gains in the oil market. Officials offered few new details at a news conference on Tuesday.

-Bitcoin price corrected its gains and tested the $61,850 area. Bitcoin is consolidating and could target a fresh high above the $62,500 resistance level.

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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: 2615.23 Scenario 1: Buy gold with a break and stability above 2624.08 with a target price of 2630.34 and 2637.63

Alternative scenario: Sell gold with a break and stability below 2612.69 with a target price of 2606.25 and then 2598.41

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

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CRUDE OIL

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: $73.35 per barrel Scenario 1: Buy oil by breaking $73.88 with a target price of $74.35 then $74.92

Alternative scenario: Sell oil with a break and stability by closing a candle below the $73.21 levels, targeting $72.68 and then $72.10.

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

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EURUSD

 

General trend: Down

Interval: Half an hour (30 minutes)

Current price: 1.09664 Scenario 1: Sell EUR/USD by breaking 1.09582, targeting 1.09422 and then 1.09209

Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.09809, targeting 1.09994 and then 1.10218.

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

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GBPUSD

 

Trend: Down

Time interval: half an hour (30 minutes)

Current price: 1.30841 Scenario 1: Sell the pound dollar with a break and stability below the level of 1.30740, targeting the price of 1.30499 and then 1.30277

Alternative scenario: Buy GBP/USD with a break and hold at a buy close of 1.31035 with a target price of 1.31280 then 1.31567

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

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NAS100

 

Trend: Upward

Time interval: half an hour (30 minutes)

Current price: 20223 Scenario 1: Buy Nasdaq with a break and hold with a close above 20299 with a target price of 20402 then 20520

Alternative scenario: Sell Nasdaq with break and hold with close below 20144 with target price 20017 then 19910

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

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Economic Calendar

 

(Times are in GMT+3)

-RBA Interest Rate Decision 4:00
-US Crude Oil Inventory 17:30

Fundamental Analysis

 

 

The dollar index traded around 102.5 on Wednesday, hovering near a seven-week high as investors awaited minutes from the Federal Reserve’s latest meeting for fresh insights on the path of monetary policy.

Markets are also looking ahead to the September CPI report on Thursday, which could influence the path of interest rate cuts the Federal Reserve intends to take.

Last week, a stronger-than-expected US jobs report prompted traders to discount any chances of another large interest rate cut of around 50 basis points in November.

Markets now see an 85% chance of a more modest cut of about 25 basis points, and a 15% chance of no policy change.

The US dollar was steady against most major currencies, but rose further against the New Zealand dollar after the Reserve Bank of New Zealand cut interest rates by 50 basis points, its second straight rate cut amid falling inflation and weak economic activity.

Gold held steady around $2,620 an ounce on Wednesday, hovering near its lowest level in more than two weeks, amid continued strength in the U.S. dollar as markets scaled back expectations for a deeper interest rate cut by the Federal Reserve.

Oil prices steadied in Asian trading on Wednesday as traders assessed developments in the Middle East conflict against a continued bearish outlook for demand.