Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

The dollar index held above 103 on Tuesday, hovering near its highest level in more than two months amid bets that the Federal Reserve will take a more dovish approach to cutting interest rates in the coming months.

Gold steady amid rising geopolitical risks

Reports indicated that China conducted large-scale exercises around Taiwan, deployed a record number of military aircraft, and announced for the first time the deployment of the Coast Guard to surround the island.

Meanwhile, violence in the Middle East continued to escalate. Meanwhile, markets are awaiting further signals on the path of interest rates at the Federal Reserve, including retail sales reports and speeches by several Fed officials.

– Investors have recently lowered their expectations for the size of further U.S. interest rate cuts as monthly jobs reports and consumer inflation data beat expectations, although higher weekly jobless claims and slower producer inflation provided a counterpoint.

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

Gold steady on geopolitical tensions in Asia

-Gold is steady at the start of the Asian session, supported by geopolitical tensions in the region. China on Monday carried out a day of “round-the-clock” drills around Taiwan, sending a record number of military aircraft and saying for the first time that it had deployed its coast guard to surround the island.

-Tensions between China and Taiwan are a major factor driving current demand for gold, especially as tensions in the Middle East continue to escalate.

Asian stocks defy Wall Street rally, oil extends losses

Asian stocks fell on Tuesday, in contrast to a strong close on Wall Street and investor optimism about corporate earnings, while the dollar held near a two-month high, supported by bets on a smaller U.S. interest rate cut next month.

Oil falls as demand outlook weakens, Iran supply disruption fears ease, Brent trades at $74.00, WTI at $70.00

-Brent and WTI crude lose more than $2 a barrel, Israeli PM Netanyahu says he is ready not to strike Iranian oil targets, OPEC cuts its forecast for global oil demand growth

Both benchmarks fell about 2% on Monday. They have fallen about $4 so far this week, nearly erasing the cumulative gains made in the seven sessions through last Friday when investors worried about supply risks as Israel planned to respond to a missile attack from Iran.

Israeli Prime Minister Benjamin Netanyahu told the United States that Israel is prepared to strike Iranian military targets but not nuclear or oil targets, The Washington Post reported late Monday.

“Weak demand has prompted traders to withdraw the ‘war premium’ from prices,” said Priyanka Sachdeva, senior market analyst at Philip Nova.

“However, geopolitical factors continue to support oil prices at this level. Without geopolitics in the equation, oil would have fallen further, perhaps even below $70 per barrel given the current narrative of weak demand.”

OPEC on Monday cut its forecast for global oil demand growth in 2024, with China accounting for the bulk of the reduction. Chinese demand is now expected to grow by 580,000 barrels per day this year, down from 650,000 barrels per day.

OPEC also lowered its forecast for global oil demand growth next year to 1.64 million barrels per day from 1.74 million barrels per day.

China’s crude oil imports in September fell from a year earlier, customs data showed, as factories curbed purchases due to weak domestic fuel demand and tighter export margins.

Independent market analyst Tina Teng said that while the demand outlook remains weak due to record high US production and weak Chinese demand, “oil has retreated from the rally caused by tensions in the Middle East, where the market may have overreacted.”

In the Middle East, Israel expanded its targets in its war against Hezbollah militants in Lebanon on Monday, killing at least 21 people in an airstrike in the north.

-Bitcoin price started rising again above the $64,500 resistance area. Bitcoin is now trying to consolidate its position and may face difficulty to surpass the $66,400 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: 2646.14 Scenario 1: Buy gold with a break and stability above 2650.50 with a target price of 2655.41 and 2662.54

Alternative scenario: Sell gold with a break and stability below 2637.60, targeting 2631.15 and then 2623.31

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: $70.56 per barrel Scenario 1: Buy oil by breaking $70.89 with a target price of $71.36 then $71.92

Alternative scenario: Sell oil with a break and stability by closing a candle below the $70.21 levels, targeting $69.69 and then $69.10.

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: 1.08942 Scenario 1: Sell EUR/USD by breaking 1.08819, targeting 1.08659 and then 1.08446

Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.09046, targeting 1.09231 and then 1.09455.

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

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GBPUSD

 

Trend: Down

Time interval: half an hour (30 minutes)

Current price: 1.30522 Scenario 1: Sell the pound dollar with a break and stability below the level of 1.30324, targeting the price of 1.30084 and then 1.29862

Alternative scenario: Buy GBP/USD with a break and hold at a buy close of 1.30625 with a target price of 1.30865 then 1.31152

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: 20610 Scenario 1: Buy Nasdaq with a break and hold with a close above 20690 with a target price of 20794 then 20912

Alternative scenario: Sell Nasdaq with a break and hold with a close below 20534 with a target price of 20409 then 20302

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

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Economic Calendar

 

(Times are in GMT+3)

-From Canada Consumer Price Index (YoY) (September) 15:30

Fundamental Analysis

 

 

The dollar index held above 103 on Tuesday, hovering near its highest level in more than two months amid bets that the Federal Reserve will take a more dovish approach to cutting interest rates in the coming months.

The latest US economic data showed that the labour market remains resilient, while consumer inflation came in stronger than expected in September.

Federal Reserve Governor Christopher Waller on Monday also called for “more caution” about further rate cuts amid strong data.

Markets are currently pricing in an 87% chance of a more modest 25 basis point rate cut in November, while discounting any chance of another half-percentage point cut.

Investors now look forward to more Fed comments from Daly, Bousik and Kugler on Tuesday, as well as the latest inflation expectations data from the Fed.