Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

The dollar index held steady around 103.7 on Thursday, hovering near a four-month low as traders piled bets that the Federal Reserve will cut interest rates several times this year.

Gold prices rise on optimism over US interest rate cut

Analysts point to slowing activity, Fed survey says Fed’s Barkin says contraction appears to be widening

Ryan McIntyre, senior portfolio manager at Sprott Asset Management, said lower interest rates and the US election are two immediate factors likely to push gold above $2,500, as gold tends to benefit from economic and geopolitical uncertainty.

“Gold holdings in ETFs appear to have bottomed out in May and are now starting to rise again… There could be a new wave of demand for gold through this channel, especially from financial advisors and financial institutions.”

Low interest rates make non-yielding gold bullion more attractive.

Federal Reserve Governor Christopher Waller and New York Fed President John Williams signaled a narrowing of the horizon toward looser monetary policy. Separately, Richmond Fed President Thomas Barkin said he was “very encouraged” by the broadening of the declines in inflation.

Markets are expecting a 25 basis point rate cut at the Federal Reserve’s September meeting, according to CME’s FedWatch tool.

A Federal Reserve survey showed that economic activity in the United States expanded at a slight to modest pace from late May through early July, with businesses expecting slower growth going forward.

“Over the next six to 12 months, regardless of who wins the (US) election, we expect gold to rise to $2,700 to $3,000 and silver to $38,” Citi Research said.

He added that investors may want to hedge against stock and currency risks as a potential global trade war approaches, especially between the United States and China, which could boost precious metals prices.

Asian stocks fell on Thursday, led by chip stocks, as investors fretted over the potential for escalating trade tensions between the United States and China, while the yen remained firm after rising to a six-week high following suspected interventions by Tokyo.

Oil continues to gain after a sharp decline in US stocks, with Brent crude trading at $85.00 and West Texas Intermediate at $81.00.

According to data from the US Energy Information Administration, US crude inventories fell by 4.87 million barrels in the week ending July 12, marking the third consecutive week of decline and exceeding market expectations of a decline of 0.8 million barrels.

This represents the longest period of stock reduction since September.

-Moreover, recent dovish comments by several Federal Reserve officials have increased optimism about interest rate cuts in the US, with traders now pricing in a 98% chance of a rate cut in September.

Lower interest rates could boost economic activity and increase demand for oil.

Geopolitical tensions also supported oil prices, as reports showed that a Liberian-flagged tanker was attacked by Houthi rebels in Yemen in the Red Sea.

Bitcoin price struggled to extend its gains above the $66,000 resistance level. Bitcoin price is consolidating and maintaining its gains above the $63,500 area.

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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: 2471.49

Scenario 1: Buy gold with a break and stability above 2474.01, targeting 2480.44 and 2487.57

Alternative scenario: Sell gold with a break and stability below 2462.63, targeting 2456.63 and then 2449.95

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: $82.02 per barrel

Scenario 1: Buy oil with a break and stability by closing a candle above the $82.12 levels, targeting $82.59 and then $83.15.

Alternative scenario: Sell oil by breaking $81.44 with a target price of $80.92 then $80.34

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

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EURUSD

 

General trend: Upward

Interval: Half an hour (30 minutes)

Current price: 1.09283

Scenario 1: Buy EUR/USD by breaking 1.09457, targeting 1.09641 and then 1.09866.

Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.09229, targeting 1.09069 and then 1.08856.

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

 

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GBPUSD

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: 1.29876

Scenario 1: Buy the pound dollar with a break and stability above the 1.30141 level, targeting the price of 1.30427 and then 1.30648.

Alternative scenario: Sell the GBP/USD with a break and stability with a close below 1.29805, targeting 1.29607 and then 1.29383.

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

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NAS100

 

Trend: Down

Interval: Half an hour (30 minutes)

Current price: 20111

Scenario 1: Selling the Nasdaq with a break and stability with a close below 20036, targeting a price of 19979 then 19928

Alternative scenario: Buy Nasdaq breakout and hold with close above 20137 price 20207 then 20287

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

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Economic Calendar

 

(Times are in GMT+3)

From Europe ECB Interest Rate Decision (July) 15:15
– From Europe Borrowing Rate (July) 15:15

From the United States of America unemployment claims rates 15:30

From USA Philadelphia Fed Manufacturing Index 15:30
– From Europe European Central Bank Press Conference 15:45

 

Fundamental Analysis

 

 

The dollar index held steady around 103.7 on Thursday, hovering near a four-month low as traders piled bets that the Federal Reserve will cut interest rates several times this year.

A group of Federal Reserve officials issued dovish statements this week, with Fed Chairman Jerome Powell saying recent data “adds some confidence” that inflation will return to target and that the central bank will not wait until inflation hits 2% before cutting interest rates.

Markets now expect the Fed to begin easing monetary policy in September, with total cuts of more than 60 basis points this year.

Investors are now looking ahead to weekly U.S. jobless claims data on Thursday to gauge the health of the labor market.

Traders are also awaiting the European Central Bank’s monetary policy decision later today, when the bank is expected to keep interest rates steady.

Meanwhile, the dollar continued its losses against the yen, which analysts attributed to further intervention by Japanese authorities.

Gold prices rose on Thursday, trading near a record high hit in the previous session, as growing expectations of a U.S. interest rate cut in September boosted demand for non-yielding bullion.

U.S. West Texas Intermediate (WTI) crude futures rose above $83 a barrel on Thursday, extending gains from the previous session, driven by a larger-than-expected draw in U.S. crude inventories.