enDaily Analysis 11/07/2024
Latest Economic and Fundamental Insights
The dollar index held just below 105 on Thursday as traders remained on the sidelines ahead of a key U.S. inflation reading that could shed light on the Federal Reserve’s interest rate cut path.
Gold rises as traders prepare for US inflation data
-Powell: The Federal Reserve will cut interest rates when it is ready, and the US CPI report is due at 15:30 Mecca time, and spot gold may retest the support level at $2368 – Technical Analysis
-Marex analyst Edward Meyer said that any negative surprise in the CPI report could weaken the dollar and push gold prices to $2,400.
US Federal Reserve Governor Lisa Cook said on Wednesday that the US inflation rate is expected to continue to decline without another significant rise in the unemployment rate.
“I think gold is in a new pattern, in a higher trading range and we won’t see the old lows anymore,” Meyer said. “It could go to another record high this year if we get a geopolitical shock.”
Gold is considered a hedge against geopolitical turmoil, and the appeal of the non-profit-making metal tends to shine when interest rates are low.
Federal Reserve Chairman Jerome Powell said Wednesday that the U.S. central bank will make interest rate decisions “when and if” they are needed. On Tuesday, he told lawmakers that “more good data” would build the case for a rate cut.
Traders are currently pricing in a 46% chance that the Fed will cut rates by two notches by the end of its December meeting and a 73% chance of the first cut in September, according to CME Group’s FedWatch tool.
According to Reuters technical analyst Wang Tao, spot gold may retest support at $2,368 an ounce, as a drop below that could open the way to $2,353.
Stocks rose on Thursday, with markets from Tokyo to New York hitting record highs, as traders awaited U.S. data expected to show inflation is falling and pave the way for an interest rate cut in September.
Oil rises as US inventories fall, with Brent crude trading at $85.00 and WTI at $81.00
According to data from the US Energy Information Administration, US crude inventories fell by 3.444 million barrels in the week ending July 5, exceeding the expected decrease of 3.0 million barrels.
Gasoline stocks also fell more than expected.
-In addition, OPEC maintained its expectations of strong growth in global oil demand in 2024, especially in the summer.
The US Energy Information Administration expects global oil demand to reach 104.7 million barrels per day by 2025, slightly more than the expected supply of 104.6 million barrels per day, indicating a future deficit.
-Bitcoin price struggled to break above $59,500. Bitcoin price is moving lower and is now at risk of further declines towards $56,000.
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: 2378.56
Scenario 1: Buy gold with a break and stability above 2384.59, targeting 2391.87 and 2398.14
Alternative scenario: Sell gold with a break and stability below 2373.20 with a target price of 2366.76 and then 2360.53
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: $81.80 per barrel
Scenario 1: Buy oil with a break and stability by closing a candle above the $82.19 levels, targeting $82.66 and then $83.22.
Alternative scenario: Sell oil by breaking $81.51 with a target price of $80.99 then $80.41
Comment: Trading above the supports and averages suggests an upward trend.
EURUSD
General trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.08331 Scenario 1: Buy EUR/USD by breaking 1.08444, targeting 1.08628 and then 1.08853
Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.08216, targeting 1.08056 and then 1.07844.
Comment: Trading above the supports and averages suggests an upward trend.
GBPUSD
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.28572
Scenario 1: Buy the pound dollar with a break and stability above the 1.28760 level, targeting the price of 1.29046 and then 1.29267.
Alternative scenario: Sell GBP/USD with a break and stability with a close below 1.28424, targeting 1.28226 and then 1.28002
Comment: Trading above the supports and averages suggests an upward trend.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 20882
Scenario 1: Buy Nasdaq with a break and hold to close above 20925 with a target price of 20995 then 21075
Alternative scenario: Sell Nasdaq with break and hold with close below 20823 price 20766 then 20715
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
From USA Core CPI (excluding food and energy) (MoM) (June) 15:30
From USA Consumer Price Index (YoY) (June) 15:30
From USA Consumer Price Index (MoM) (June) 15:30
From the United States of America unemployment claims rates 15:30
Fundamental Analysis
The dollar index held just below 105 on Thursday as traders remained on the sidelines ahead of a key U.S. inflation reading that could shed light on the Federal Reserve’s interest rate cut path.
The June CPI report is expected to show a 0.1% increase in consumer prices compared to May, with the core CPI rising 0.2%.
Meanwhile, Federal Reserve Chairman Jerome Powell said on Wednesday that the central bank will not wait until inflation reaches 2% before cutting interest rates because it may already be too late, as inflation is likely to fall below 2%, which is undesirable.
However, Powell stressed that the Fed needs more data to support a sustained move toward 2% inflation before cutting interest rates.
Markets now see a 70% chance of the Fed cutting rates in September, with another cut priced in before the end of the year.
Meanwhile, the dollar remained under pressure against the pound after Bank of England officials indicated no interest rate cut in August.
Gold prices were steady on Thursday, as investors awaited U.S. inflation data due later in the day for more insight into the path of interest rates at the Federal Reserve.
U.S. crude oil futures rose to $82.7 a barrel on Thursday, gaining for a second straight session, driven by a larger-than-expected drawdown in U.S. crude inventories.
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