enDaily Analysis 16/07/2024
Latest Economic and Fundamental Insights
The dollar index rose above 104.3 on Tuesday, gaining for a second straight session as investors continued to assess the outlook for U.S. monetary policy in light of the latest comments from the Federal Reserve chairman.
Gold rises as investors grow more optimistic about U.S. rate cuts
-US retail sales data due at 15:30 Mecca time, gold hits two-month high on Monday
“Powell continued to lay the groundwork for future monetary policy easing. Markets are now fully pricing in a September rate cut, which should keep gold sentiment well supported in the run-up,” said IG market strategist Yip Jun Rong. (FedWatch)
Powell said on Monday that the three U.S. inflation readings in the second quarter of this year “add some confidence” that the pace of price increases is returning to the Fed’s target in a sustainable way, comments that suggest a shift to lower interest rates may not be far off.
-When interest rates fall, non-yielding bullion usually becomes more attractive.
Investors are awaiting US retail sales data due at 15:30 Mecca time on Tuesday and comments from Federal Reserve Governors Christopher Waller and Adriana Kogler later this week for further guidance.
A weak retail sales report could support gold prices amid dovish Fed bets, while a breakout to a fresh high would mark a continuation of gold’s broader uptrend, potentially leaving $2,600 in check after that, Yip said.
Elsewhere, India’s platinum imports for four weeks from mid-June exceeded the 2023 total as bullion traders exploited a loophole by registering bars containing about 90% gold as platinum to avoid higher customs duties, government and industry officials told Reuters.
Asian stocks fell on Tuesday as investors pondered the possibility of a Trump victory and what it might mean for China, while the dollar rose for a second straight day even as hawkish Federal Reserve comments fueled bets for more U.S. interest rate cuts this year.
Oil prices were also pressured by the rising dollar after a failed assassination attempt on former US President Donald Trump increased his chances of winning the election, with Brent crude trading at $84.00 and West Texas Intermediate at $80.00.
China’s oil imports fell on a monthly and year-on-year basis in June to 46.45 million tonnes amid weak domestic demand, data showed on Monday.
Investors are now awaiting the results of the third plenary session amid hopes that Chinese authorities will introduce new stimulus measures to boost the economy.
Meanwhile, Federal Reserve Chairman Jerome Powell expressed confidence in the inflation outlook and said the central bank would not wait until inflation hits 2% before cutting interest rates.
-Bitcoin price is up more than 10% and broke the $64,000 resistance level. Bitcoin is showing positive signs and may try to move above $65,000.
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: 2429.68
Scenario 1: Buy gold with a break and stability above 2434.25, targeting 2440.68 and 2447.81
Alternative scenario: Sell gold with a break and stability below 2422.87, targeting 2416.42 and then 2410.19
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: $80.37 per barrel
Scenario 1: Buy oil with a break and stability by closing a candle above the $80.91 levels, targeting $81.38 and then $81.94.
Alternative scenario: Sell oil by breaking $80.23 with a target price of $79.71 then $79.12
Comment: Trading above the supports and averages suggests an upward trend.
EURUSD
General trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.08861
Scenario 1: Buy EUR/USD by breaking 1.09025, targeting 1.09210 and then 1.09435.
Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.08798, targeting 1.08638 and then 1.08425.
Comment: Trading above the supports and averages suggests an upward trend.
GBPUSD
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.29564
Scenario 1: Buy the pound dollar with a break and stability above the level of 1.29789, targeting the price of 1.30075 and then 1.30296.
Alternative scenario: Sell GBP/USD with a break and stability with a close below 1.29453, targeting 1.29255 and then 1.29031
Comment: Trading above the supports and averages suggests an upward trend.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 20628
Scenario 1: Buy Nasdaq with a break and hold to close above 20688 with a target price of 20758 then 20838
Alternative scenario: Sell Nasdaq with break and hold with close below 20587 price 20530 then 20479
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
From USA Core Retail Sales (MoM) (June) 15:30
From USA Retail Sales (MoM) (June) 15:30
From Canada Consumer Price Index (YoY) (June) 15:30
Fundamental Analysis
The dollar index rose above 104.3 on Tuesday, gaining for a second straight session as investors continued to assess the outlook for U.S. monetary policy in light of the latest comments from the Federal Reserve chairman.
Federal Reserve Chairman Jerome Powell said Monday that recent data “adds some confidence” that inflation is returning to target and that the central bank will not wait until inflation hits 2% before cutting interest rates.
Markets have almost fully priced in the September rate cut, with two more cuts expected before the end of the year.
Meanwhile, the dollar found support from safe-haven demand following a failed assassination attempt on former US President Donald Trump.
The prospect of a second Trump presidency has also boosted the dollar and Treasury yields, as his policies are seen as inflationary due to tax cuts, tighter immigration and higher import tariffs.
The dollar gained across the board, with the heaviest buying activity seen against the New Zealand dollar and the yen.
Gold prices rose slightly on Tuesday after comments from Federal Reserve Chairman Jerome Powell strengthened the case for an interest rate cut in September, while investors awaited more U.S. economic data for further cues on monetary policy.
West Texas Intermediate (WTI) crude futures fell toward $81.5 a barrel on Tuesday, falling for a third straight session as uncertainty over demand in China, the world’s biggest oil consumer, and a stronger dollar weighed on oil prices.
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