enDaily Analysis 16/10/2024
Latest Economic and Fundamental Insights
The dollar index held steady around 103.2 on Wednesday, hovering near its highest level in more than two months amid strong expectations that the Federal Reserve will be more cautious in cutting interest rates further.
Gold holds gains as fresh signals awaited
Gold gained some momentum on Tuesday after the U.S. dollar and Treasury yields retreated slightly following weak manufacturing data.
-New York’s Empire State Manufacturing Index unexpectedly fell in October, hitting a five-month low, suggesting a contraction in business activity in New York after showing growth in September.
Investors now look to US retail sales data on Thursday and Federal Reserve Governor Wall Street’s speech on Friday for further guidance.
-Currently, markets are pricing in a 98% chance of a 25 basis point Fed funds rate cut in November.
Elsewhere, rising tensions in the Middle East could help maintain gold’s upward momentum.
Gold steady ahead of key US economic data, Fed official speech
Gold is trading steady in early Asian trade ahead of key U.S. economic data this week such as September retail sales on Thursday and a speech by Federal Reserve Chairman Wall Street on Friday. These events are likely to provide valuable insights into the U.S. central bank’s upcoming monetary policy decisions,
Any major changes to the Fed’s future interest rate path could impact market sentiment as well as the non-interest-bearing precious metal.
Asian stocks fell on Wednesday after a disappointing outlook from Europe’s biggest technology company ASML and concerns about the future of the chip industry dragged down corporate shares, while expectations that the Federal Reserve will take a modest interest rate cut supported the dollar.
Oil stabilizes after sharp drop, as uncertainty persists in the Middle East, with Brent crude trading at $74.00 and WTI at $70.00.
Oil prices fell more than 4 percent to their lowest in nearly two weeks on Tuesday on a weaker demand outlook and after a media report that Israel would not strike Iranian nuclear and oil sites eased fears of supply disruption.
However, concerns about an escalation in the conflict between Israel and the Iranian-backed Hezbollah militant group remain, with the United States saying on Tuesday that it opposes the scope of Israeli airstrikes in Beirut over the past few weeks.
“After the recent pullback in prices, we may expect some room for price stability in the near term, as market participants reassess further developments on the geopolitical front,” said Yip Jun Rong, market strategist at IG.
“We are also waiting for more clarity on China’s fiscal policy, and the lack of detail seems to cast some doubt on the ultimate impact on oil demand expectations,” Yip said.
BEIJING, Feb 11 (Reuters) – China may raise an additional 6 trillion yuan ($850 billion) in special treasury bonds over three years to stimulate the flagging economy, local media reported, although that failed to revive sentiment in the country’s stock market.
On the oil demand front, both the Organization of the Petroleum Exporting Countries and the International Energy Agency this week lowered their forecasts for global oil demand growth in 2024, with China responsible for the bulk of the forecast cuts.
-For now, the market will be awaiting the latest U.S. oil inventory data, with the American Petroleum Institute due to release its weekly report later Wednesday and the Energy Information Administration data on Thursday. The reports will come a day later than usual following a federal holiday.
Analysts polled by Reuters expected crude inventories to rise by about 1.8 million barrels in the week ending October 11.
-Bitcoin price started rising again above the $65,500 resistance area. Bitcoin price is now stabilizing and may break above the $68,000 resistance level to continue rising.
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: 2676.10 Scenario 1: Buy gold with a break and stability above 2678.83 with a target price of 2685.26 and 2692.39
Alternative scenario: Sell gold with a break and stability below 2667.45 with a target price of 2661.00 and then 2653.16
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $70.20 per barrel Scenario 1: Buy oil by breaking $70.57 with a target price of $71.04 then $71.61
Alternative scenario: Sell oil with a break and stability by closing a candle below $69.90 levels, targeting $69.37 and then $68.79
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.08805 Scenario 1: Sell EUR/USD by breaking 1.08718, targeting 1.08559 and then 1.08346
Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.08999, targeting 1.09130 and then 1.09355.
Comment: Trading below the resistances and averages suggests a decline.
GBPUSD
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.29943 Scenario 1: Sell the pound dollar with a break and stability below the level of 1.29834, targeting the price of 1.29539 and then 1.29371
Alternative scenario: Buy GBP/USD with a break and hold at a buy close of 1.30134 with a target price of 1.30375 then 1.30661
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 20379 Scenario 1: Buy Nasdaq with a break and hold with a close above 20484 with a target price of 20588 then 20706
Alternative scenario: Sell Nasdaq with break and hold with close below 20328 with target price 20203 then 20096
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
-From UK Consumer Price Index (YoY) (September) 9:00
Fundamental Analysis
The dollar index held steady around 103.2 on Wednesday, hovering near its highest level in more than two months amid strong expectations that the Federal Reserve will be more cautious in cutting interest rates further.
Atlanta Federal Reserve President Raphael Bousik said late Tuesday that he expects another 25 basis point rate cut this year despite median expectations of an additional 50 basis point cut.
However, the central bank stressed that its approach to easing monetary policy will be guided by evolving economic conditions.
Meanwhile, data released Tuesday showed that New York’s Empire State Manufacturing Index fell to -11.9 in October, its lowest level in five months.
Data coming this week on retail sales, industrial production and the Philadelphia Fed manufacturing index will provide further insights into the strength of the U.S. consumer and manufacturing sector. The dollar remained near recent highs against most major currencies, and continued to rise against the New Zealand and Australian dollars.
Gold held steady around $2,665 an ounce on Wednesday, holding onto gains from the previous session as investors awaited further cues to assess the Federal Reserve’s monetary policy direction.
Oil prices rose in early trade on Wednesday amid uncertainty over what might happen next in the Middle East conflict, after demand concerns pushed the market to its lowest since early October in the previous session.
Risk Disclaimer
Any information/articles/materials/content provided by WRC1 or displayed on its website is intended to be used solely for educational purposes only and does not constitute investment advice or a consultation on how the client should trade.
Although WRC1 has taken care to ensure that the content of such information is accurate, - it cannot be held responsible for any omission/error/miscalculation and cannot guarantee the accuracy of any material or any information contained herein.
Therefore, any reliance you place on such material is strictly at your own risk. Please note that the responsibility for using or relying on such material rests with the client and WRC1 accepts no liability for any loss or damage, including without limitation, any loss of profit which may arise directly or indirectly from the use of or reliance on such information.
Risk Warning: FX/CFDs are complex instruments and carry a high risk of losing money quickly due to leverage. You should consider whether you understand how FX/CFDs work and whether you can afford to take the high risk of losing your money.
You should make sure that, depending on your country of residence, you are allowed to trade with WRC1 products. Please ensure that you are familiar with the company’s risk disclosure.
