Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

The dollar index rose above 101.7 on Thursday, hovering near a three-week high after the latest U.S. consumer inflation report boosted expectations the Federal Reserve will opt for a smaller interest rate cut at its meeting next week.

Gold steady amid expectations of slight US interest rate cut

-The monthly core CPI unexpectedly rose 0.3%, while investors had expected a 0.2% increase.

Meanwhile, the headline annual inflation rate slowed more than expected to 2.5%, and the core rate remained steady at 3.2%, as expected.

Markets now see an 85% chance of a 25 basis point rate cut at next week’s Fed meeting, up from about 70% before the release, according to the CME FedWatch tool.

-Less restrictive monetary policy benefits gold by reducing the opportunity cost of holding non-interest-bearing gold assets.

Investors are now focusing on the US producer price index and initial jobless claims reports due later in the day for more details.

-Another source of uncertainty stems from the US elections and how their results may change the course of political decisions and the relationship between the world’s two largest economies. In addition, we have a geopolitical crisis in the Middle East and Eastern Europe.

According to the World Gold Council, gold investors appear to have gone over the top and are now hedging their bets by piling into gold. “In this uncertain environment, it is no surprise that investors are turning to the gold options market to hedge against or speculate on these binary outcomes,” the World Gold Council wrote.

Historical data also supports the hypothesis that rising gold prices often signal an imminent shift in interest rate policy or a risky market event, as the World Gold Council has highlighted. But today we are facing both.

Given the increasing uncertainty, it makes sense that investors are focusing more on the near-term outlook and therefore choosing to hedge their positions. According to the World Gold Council, this trend is likely to continue as investors continue to view gold as a hedge against immediate event risks while also being seen as a beneficiary of lower interest rates.

Asian stocks rose on Thursday, tracking a technology-led rally on Wall Street, while the dollar held onto gains after U.S. core inflation surprised markets slightly on the positive side, dampening hopes of a big interest rate cut by the Federal Reserve next week.

Oil prices rise due to fears of the impact of the hurricane in the United States, with Brent crude trading at $71.00 and West Texas crude at $67.00.

“Both WTI and Brent crude appear to have found some ground amid concerns over disruption to U.S. oil supplies.”

The region accounts for about 15% of US oil production, and any disruptions in production would likely lead to supply cuts in the near term.

But with the storm expected to eventually dissipate after making landfall, the oil market’s attention has once again turned to falling demand.

U.S. oil inventories rose broadly last week as crude imports grew and exports fell, the U.S. Energy Information Administration said on Wednesday.

The data also showed that gasoline demand fell to its lowest level since May, while distillate demand fell as refinery runs also declined. The United States is the world’s largest oil consumer.

-Bitcoin price started to rise nicely above the $57,500 resistance level. Bitcoin is now showing positive signs and may target a move towards $60,000.

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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: 2520.38

Scenario 1: Buy gold with a break and stability above 2525.09, targeting 2531.52 and 2538.64

Alternative scenario: Sell gold with a break and stability below 2513.70 with a target price of 2507.26 and then 2499.42

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

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CRUDE OIL

 

Trend: Down (break not confirmed)

Interval: Half an hour (30 minutes)

Current price: $67.57 per barrel

Scenario 1: Sell oil by breaking the $67.20 level, targeting $66.68 and then $66.09.

Alternative scenario: Buy oil with a break and hold with a candle closing above $67.88, targeting $68.35 and then $68.91

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

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EURUSD

 

General trend: Down

Interval: Half an hour (30 minutes)

Current price: 1.10186

First scenario: Sell the EUR/USD by breaking 1.10056, targeting 1.09896 and then 1.09683.

Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.10284, targeting 1.10468 and then 1.10963.

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

 

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GBPUSD

 

Trend: Down

Interval: Half an hour (30 minutes)

Current price: 1.30513

Scenario 1: Buy the pound dollar with a break and stability above the level of 1.30594, targeting the price of 1.30840 and then 1.31127

Alternative scenario: Selling the GBP/USD with a break and stability with a close below 1.30299, targeting 1.30059 and then 1.29837

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

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NAS100

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: 19314

Scenario 1: Buy Nasdaq with a break and hold with a close above 19392, targeting 19495 then 19613

Alternative scenario: Sell Nasdaq with break and hold with close below 19235 with target price 19111 then 19003

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

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Economic Calendar

 

(Times are in GMT+3)

-From Europe Borrowing interest rate (September) 15:15
-From Europe ECB interest rate decision (September) 15:15
-From USA Unemployment claims rate 15:30
-From USA Producer price index (monthly) (August) 15:30
-From USA Producer price index (yearly) (August) 15:30

ECB Press Conference 15:45

 

Fundamental Analysis

 

 

The dollar index rose above 101.7 on Thursday, hovering near a three-week high after the latest U.S. consumer inflation report boosted expectations the Federal Reserve will opt for a smaller interest rate cut at its meeting next week.

Data showed that core inflation in the United States rose more than expected in August, while the annual headline inflation rate slowed for a fifth straight month.

Markets now see an 86% chance that the Fed will cut rates by 25 basis points at its next meeting, with only a 14% chance of a larger 50 basis point cut, according to CME’s FedWatch tool.

Investors are now looking to US producer inflation data on Thursday for further guidance.

On the political front, the presidential debate increased the chances of a victory for Kamala Harris, which put pressure on the dollar, which was supported by expectations of more tariffs and increased fiscal spending under a possible Trump presidency.

Gold held steady near $2,510 an ounce on Thursday as markets continued to assess the latest U.S. consumer inflation data and raised bets on a smaller rate cut by the Federal Reserve next week.

Oil prices rose in Asian trading on Thursday, driven by concerns that Hurricane Francine could affect production in the United States, the world’s largest crude producer, although concerns about falling demand capped gains.