Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

The dollar index rose toward 105.2 on Wednesday, rising for a third straight session after Federal Reserve Chairman Jerome Powell reiterated the central bank’s cautious approach to cutting interest rates.

Gold trades in a narrow range with focus on US inflation reading

-US CPI data for June due on Thursday;
global gold ETFs see second month of inflows in June, says World Gold Council

Federal Reserve Chairman Jerome Powell said in his Senate testimony that inflation has been improving in recent months and that “more good data would strengthen” the case for looser monetary policy. Powell is scheduled to speak to the House of Representatives later today.

“With the recent string of weaker US data, the case has been built around a September rate cut, but with the Fed chairman keen to see more good data, further progress in inflation will be needed to provide policymakers with more confidence to open the door to a rate cut,” said IG market strategist Yip Jun Rong.

Traders currently see a 73% chance of a rate cut in September, according to the CME Group’s FedWatch tool. The appeal of non-yielding gold tends to shine when interest rates are lower.

– June consumer price index data, due out on Thursday, is expected to show headline prices rising 0.1% on a monthly basis, while core prices rose 0.2%. That would mean annual gains of 3.1% and 3.4%, respectively.

“Any sudden spike in price pressures could challenge the Fed’s efforts to combat inflation, prompting calls for a delay in monetary policy easing. This could weigh on gold, potentially sending prices back towards the $2,300 support level,” Yip said.

-Global physically backed gold exchange-traded funds (ETFs) saw inflows for a second straight month in June due to additions to fund holdings listed in Europe and Asia, the World Gold Council said on Tuesday.

Asian shares rose to near two-year highs on Wednesday as bets grew on an imminent U.S. interest rate cut, while the New Zealand dollar weakened after its central bank signaled greater confidence that inflation was coming under control.

Oil falls as markets react to China data and calm supply concerns, with Brent trading at $84.00 and WTI at $80.00

Crude oil futures have lost about 3 percent in the past three sessions amid signs that the Texas energy industry has emerged relatively unscathed from Hurricane Beryl after it hit the region on Monday.

Oil and gas companies resumed some operations on Tuesday. Some ports have reopened and most producers and facilities have begun increasing output, although some facilities have been damaged and power has not yet been fully restored.

“Expectations of easing tensions in the Middle East and weaker-than-expected Chinese CPI data for June weighed on oil prices today,” said independent market analyst Tina Teng, referring to China’s June CPI data.

Consumer prices in the world’s second-largest economy rose for a fifth straight month in June, but came in below expectations, while producer prices continued to deflate.

-Bitcoin price is slowly moving upwards above the $56,500 level. Bitcoin may gain bullish momentum if it breaks the resistance area at $58,500.

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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: 2369.33

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.

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CRUDE OIL

 

Trend: Down

Interval: Half an hour (30 minutes)

Current price: $80.23 per barrel

Scenario 1: Sell oil with a break and stability by closing a candle below the $80.04 levels, targeting $79.52 and then $78.93.

Alternative scenario: Buy oil by breaking $80.72 with a target of $81.19 then $81.75

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

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EURUSD

 

General trend: Upward

Interval: Half an hour (30 minutes)

Current price: 1.08185

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.

 

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GBPUSD

 

Trend: Upward

Time interval: half an hour (30 minutes)

Current price: 1.27905

Scenario 1: Buy the pound dollar with a break and stability above the 1.28070 level, targeting the price of 1.28356 and then 1.28578.

Alternative scenario: Sell the pound dollar with a break and stability with a close below 1.27735, targeting 1.27537 and then 1.27313.

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

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NAS100

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: 20708

Scenario 1: Buy Nasdaq with a break and hold to 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.

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Economic Calendar

 

(Times are in GMT+3)

• From the United States of America, Federal Reserve Chairman Powell’s testimony – 17:00
• US crude oil inventories 17:30

 

Fundamental Analysis

 

 

The dollar index rose toward 105.2 on Wednesday, rising for a third straight session after Federal Reserve Chairman Jerome Powell reiterated the central bank’s cautious approach to cutting interest rates.

Powell said the Fed needs more data to support inflation moving sustainably toward 2% before cutting interest rates.

However, he warned that maintaining restrictive policy for a prolonged period could inadvertently weaken economic activity and employment.

Investors are now looking ahead to Powell’s appearance before the House of Representatives on Wednesday, as well as key US inflation figures later this week for further clues on the path of monetary policy.

Markets still price in a greater than 70% chance of the Fed cutting rates in September, with the second cut almost entirely priced in for December.

The dollar made some gains against most major currencies, but is moving cautiously against the New Zealand dollar ahead of the Reserve Bank of New Zealand’s monetary policy decision.

Gold traded in a tight price range on Wednesday as investors looked ahead to a key U.S. inflation reading that could shed more light on the Federal Reserve’s interest rate path.

Oil prices fell on Wednesday after inflation in China, the world’s biggest importer of crude, came in weaker than expected, while traders weighed growing chances of a ceasefire deal in Gaza as negotiations resumed later in the day.