Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

The dollar index traded around 103 on Monday, hovering near a two-month high amid strong expectations that the Federal Reserve will not make further massive interest rate cuts at its remaining meetings this year.

Gold steady as investors await Fed outlook

Data showed that U.S. producer prices remained stable in September, while jobless claims rose, casting doubt on the ability of the U.S. labor market to withstand tighter interest rates.

However, headline inflation slowed less than expected, while core inflation rose more than expected.

-Currently, the odds of a 25 basis point Fed rate cut in November are 87%.

Investors are now looking ahead to additional economic data, including retail sales reports and speeches from several Federal Reserve officials for further guidance.

Meanwhile, rising geopolitical risks in the Middle East continued to boost gold’s appeal as a safe haven.

Gold fell in early Asian trading amid a possible technical correction after the precious metal rose for a fifth straight week on Friday.

However, based on a macro framework that includes bond yields and corporate spreads, gold is entering a friendly environment of low yields, volatile spreads and continued high correlations between stocks and bonds, the World Gold Council said in its commentary. Against the backdrop of high correlations between stocks and bonds and changing macroeconomic phases, the World Gold Council says gold’s outlook offers investors diversification and a hedge against portfolio risk.

Global stocks rose on Friday, lifted by U.S. bank earnings, and were on track for a weekly gain while U.S. Treasury yields mostly fell after inflation and consumer confidence reports boosted expectations for the Federal Reserve’s rate-cutting path.

Oil prices fall by more than a dollar on fears of deflation in China, with Brent crude trading at $78.00 and West Texas Intermediate at $74.00.

Negative news from China outweighed market concerns about a possible Israeli response to Iran’s October 1 missile attack that could disrupt oil production, despite the US warning Israel against targeting Iranian energy infrastructure.

– Deflationary pressures in China worsened in September, according to official data released Saturday, and a news conference held the same day left investors wondering about the overall size of the stimulus package to revive the struggling economy.

The data showed that the consumer price index rose 0.4%, which was less than expected, and the producer price index fell at the fastest pace in six months, down 2.8% on an annual basis, according to the National Bureau of Statistics.

“The Chinese finance ministry’s briefing on Saturday proved to be a failure,” IG market analyst Tony Sycamore said in a note. “The fiscal measures needed to remove downside risks to growth and lift sentiment among Chinese consumers were conspicuously absent.”

Beijing said on Saturday it would step up debt issuance but did not give a dollar figure.
Crude oil prices rose 1 percent on the week on Friday as investors weighed the potential for supply disruptions in the Middle East and the impact of Hurricane Milton on fuel demand in Florida.

The United States on Friday expanded sanctions on Iran in response to its attack on Israel on October 1, targeting its “ghost fleet” that transports illicit oil supplies across the world.

-Bitcoin price started rising again above the $62,000 resistance area. Bitcoin is now witnessing a consolidation and may target further gains above $63,000

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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: 2658.32 Scenario 1: Buy gold with a break and stability above 2663.05 with a target price of 2669.48 and 2676.61

Alternative scenario: Sell gold with a break and stability below 2651.67, targeting 2645.22 and then 2637.38

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

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CRUDE OIL

 

Trend: Upward

Time interval: Half an hour (30 minutes)

Current price: $73.91 per barrel Scenario 1: Buy oil by breaking the $74.40 level, targeting $74.85 and then $75.41

Alternative scenario: Sell oil with a break and stability by closing a candle below the $73.70 levels, targeting $73.18 and then $72.59.

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: 1.09301

Scenario 1: Sell EUR/USD by breaking 1.08134, targeting 1.08974 and then 1.08761

Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.09361, targeting 1.09546 and then 1.09770.

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: 1.30689 Scenario 1: Sell the pound dollar with a break and stability below the level of 1.30478, targeting the price of 1.30238 and then 1.30016

Alternative scenario: Buy GBP/USD with a break and hold at a buy close of 1.30779 with a target price of 1.31019 then 1.31306

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: 20432 Scenario 1: Buy Nasdaq with a break and hold with a close above 20521 with a target price of 20624 then 20742

Alternative scenario: Sell Nasdaq with break and hold with close below 20364 with target price 20239 then 20132

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

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Economic Calendar

 

(Times are in GMT+3)

-Canada Holiday – Thanksgiving
-Japan Holiday – National Sports Day

Fundamental Analysis

 

 

Those views have evolved after the latest monthly jobs report and consumer inflation data came in stronger than expected, although higher weekly jobless claims and slower producer inflation have provided a counter-argument.
Markets are now pricing in an 87% chance of a more modest 25 basis point rate cut in November, while discounting any chance of another half-point cut.

Investors are now looking ahead to new retail sales and jobless claims data this week, as well as comments from Federal Reserve Governor Christopher Waller later today.

The dollar rose against major currencies, posting notable gains against the yuan after disappointing Chinese stimulus announcements over the weekend.

Gold held steady around $2,655 an ounce on Monday after rising 1% in the previous session, as markets continued to assess the Federal Reserve’s interest rate outlook in the wake of recent inflation reports.

Oil prices fell more than $1 a barrel, losing more than 1.5% in early trading on Monday, after disappointing Chinese inflation data and a lack of clarity on Beijing’s economic stimulus plans raised concerns about demand.