enDaily Analysis 18/04/2024
Latest Economic and Fundamental Insights
Dollar Index Edges Higher, Gold Gains on Iran Attack
The dollar index rose to around 106.3 on Friday, up for the second consecutive session and heading towards its highest level in over five months as investors reduced their bets on Federal Reserve rate cuts and began to consider the possibility of no cuts at all this year.
Minneapolis Fed President Neel Kashkari called for patience on rate cuts, saying the first move may not come until 2025.
New York Fed President John Williams also said that raising rates again is not his base case, but it is still possible due to inflation risks.
However, markets are betting that the Fed will cut rates for the first time in September.
Safe-haven gold rose as an Israeli attack on Iran raised concerns of a wider conflict.
Gold is on track for its fifth straight weekly gain. Sources say Israel has attacked Iran.
Analysts say gold is a geopolitical trade right now.
Platinum and palladium are on track for weekly losses.
“News of the Israeli attacks on Iran today ‘spiked interest in gold prices in the Middle East and is the only thing that has driven the price of gold higher for weeks now. The market is now waiting for more information on the nature of the attack and what the reason is behind it,” said two people familiar with the matter.
Three people familiar with the matter said Israel had attacked Iran, with Iranian state media reporting early on Friday that its forces had destroyed drones, days after Iran carried out a retaliatory drone strike on Israel.
Ultimately, even if geopolitical risks subside, China’s gold reserve accumulation is acting as a key driver. And this is a process that seems to have room to continue, favoring an upward bias for gold.
Meanwhile, Federal Reserve policymakers are huddled around the idea of keeping borrowing costs where they are perhaps until well into the year, given the slow and halting progress on inflation and the still-strong U.S. economy.
Asian stocks and bond yields fell on Friday while safe-haven currencies, gold and crude oil jumped after reports of a sharp escalation in hostilities in the Middle East.
The Chinese yuan falls to a 5-month low on renewed Middle East tensions.
Oil prices rise 3% on reports of Israeli strikes on Iran with Brent crude trading at $88.00 and West Texas Intermediate at $82.00.
Explosions were heard at an airport in the Iranian city of Isfahan, but the cause was not immediately clear, Iran’s state news agency Fars reported. CNN reported that several flights had been diverted over Iranian airspace.
“If these reports are true, then concerns about further escalation will increase, as will concerns about the possibility that we are getting closer to a situation where oil supply risks are leading to actual supply disruptions,” said Warren Patterson, head of commodities strategy at ING, in a note.
Patterson said the reports raised concerns that Israel was responding to a missile and drone attack by Iran late last week.
Bitcoin price shows bearish signals below the $63,000 resistance zone. BTC should remain above the $60,000 support zone to avoid a major drop.
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: bullish
Time interval: half an hour (30 minutes)
Current price: 2388.90
The first scenario: Buy gold at a break and hold above 2395.63, with a target price of 2402.06 and 2409.39. Alternative scenario: Sell gold at a break and hold below 2384.25, with a price target of 2377.80 and then 2370.45.
Comment: Trading above supports and averages suggests an upward trend
CRUDE OIL
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: $82.98 per barrel
The first scenario: Buying oil at a break and holding steady by closing the candle at the highest level at $83.38, targeting a price of $83.85, then 84.41. Alternative scenario: Selling oil at a break of $82.70, targeting a price of $82.18, then 81.60.
Comment: Trading above supports and averages suggests an upward trend
EURUSD
General trend: – Bearish
Time interval: half an hour (30 minutes)
Current price: 1.06447
The first scenario: sell the euro/dollar at a break of 1.06334, targeting a price of 1.06174, then 1.05961. Alternative scenario: buy the euro/dollar at a break of 1.06562, targeting a price of 1.06746, then 1.06971.
Comment: Trading below resistances and averages suggests a decline
GBPUSD
Trend: down
Time interval: half an hour (30 minutes)
Current price: 1.24348
The first scenario: selling the pound dollar at a fraction and holding below the level of 1.24149, targeting the price of 1.23952 then 1.23728. The alternative scenario: buying the pound dollar at a break and holding steady by closing above 1.24485, targeting the price of 1.24771 then 1.24993.
Comment: Trading below resistances and averages suggests a decline
NAS100
Trend: down
Time interval: half an hour (30 minutes)
Current price: 17449
The first scenario: sell the Nasdaq at a break and hold with a close below 17367, targeting the price of 17305 then 17235. Alternative scenario: buy the Nasdaq at a break and hold with a close above 17512, targeting the price of 17594 then 17657.
Comment: Trading below resistances and averages suggests a decline
Economic Calendar
(Times are in GMT+3)
No Economic Events Scheduled for Today
Fundamental Analysis
- Economy: New US data, including initial jobless claims and the Philadelphia Fed Manufacturing Index, continues to point to a resilient economy.
- Dollar: The dollar rose to multi-month highs against most major currencies, but retreated from its 34-year high against the yen after Bank of Japan Governor Kuroda said he might raise interest rates again.
- Gold: Gold prices surged on Friday as risk aversion swept through financial markets following media reports of explosions in Iran, raising concerns about a wider regional conflict and increasing the appeal of gold as a safe haven.
- Oil: Oil prices jumped three dollars a barrel on Friday in response to reports that Israeli missiles struck a site in Iran, raising concerns about potential disruptions to oil supplies in the Middle East.
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.
