enDaily Analysis 18/11/2024
Latest Economic and Fundamental Insights
-The dollar hovers near its highest levels in two years
The dollar index held steady at around 106.6 on Monday, trading near a two-year high amid expectations of fewer rate cuts from the Federal Reserve and bets on the U.S. economy outperforming under Trump.
Gold recovers after sharp weekly loss
-The latest data in the United States showed that retail sales rose more than expected in October, which confirms the economy’s resilience.
Comments from some Federal Reserve officials last week added to the uncertainty about the timing and extent of potential interest rate cuts.
However, markets are currently pricing in a 65% chance of a 25 basis point rate cut in December.
Investors are now focusing on comments from other Federal Reserve policymakers this week, seeking clearer guidance on the direction of US interest rates in the coming months.
On the geopolitical front, ongoing tensions in the Middle East and escalating conflict between Ukraine and Russia could drive safe-haven flows, providing additional support to gold.
Gold rises amid possible technical recovery
-Gold rose in early Asian trading in a possible technical recovery. Gold ended Friday’s trading with the biggest weekly price decline since the Covid lockdown in March 2020. Recently,
Federal Reserve Chairman Jerome Powell has said there is no rush to cut interest rates, citing the “remarkable” performance of the U.S. economy.
The shift in expectations of a Fed rate cut and the strength of the US dollar put pressure on the precious metal.
Stocks rise ahead of Nvidia results; BOJ’s Ueda offers few hints on interest rates
Global stocks started the week on a firmer footing ahead of a highly anticipated earnings release from Nvidia while a speech by the Bank of Japan chief left markets with no clue about the country’s interest rate outlook.
Oil finds support amid escalating conflict between Russia and Ukraine, with Brent crude trading at $71.00 and WTI at $67.00.
Over the weekend, Russia launched its largest airstrike on Ukraine in nearly three months, further crippling an already damaged power system.
Allies are reportedly encouraging Ukrainian President Volodymyr Zelensky to consider new strategies to engage Russian President Vladimir Putin in negotiations to end the conflict.
Meanwhile, concerns about weak demand in China, the world’s largest oil importer, contributed to the decline in market sentiment.
Moreover, prices were negatively affected by the strength of the US dollar, supported by expectations of a slowdown in the pace of interest rate cuts by the US Federal Reserve.
-The Biden administration has allowed Ukraine to use U.S.-made weapons to strike deep inside Russia, two U.S. officials and a source familiar with the decision said Sunday, in a major shift in Washington’s policy toward the Ukraine-Russia conflict.
There was no immediate reaction from the Kremlin, which warned that it would view any move to ease restrictions on Ukraine’s use of US weapons as a major escalation.
“Biden allowing Ukraine to hit Russian forces around Kursk with long-range missiles could see the geopolitical quest return to oil, as it represents an escalation of tensions there in response to North Korean forces entering the fray,” said Tony Sycamore, an analyst at IG Markets.
Russia launched its largest airstrike on Ukraine in nearly three months on Sunday, causing massive damage to Ukraine’s energy system.
In Russia, at least three refineries have been forced to halt processing or cut production due to heavy losses amid export restrictions, high crude prices and rising borrowing costs, according to five industry sources.
Brent and WTI crude fell more than 3% last week on weak data from China and after the International Energy Agency forecast that global oil supply will exceed demand by more than 1 million barrels per day in 2025 even if OPEC+ cuts remain in place.
-Bitcoin price witnessed a short-term correction below the $90,000 area. Bitcoin price is now rising again and bulls can now target a move above $94,000.
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: Down
Interval: Half an hour (30 minutes)
Current price: 2591.51
Scenario 1: Sell gold with a break and stability below 2585.13, targeting 2578.68 and 2570.85
Alternative scenario: Buy gold with a break and stability above 2596.51, targeting 2602.61 and then 2610.07
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $67.16 per barrel
Scenario 1: Sell oil with a break and stability by closing a candle below the $66.68 levels, targeting $66.16 and then $65.57.
Alternative scenario: Buy oil by breaking the $67.36 level, targeting $67.78 and then $67.39.
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.05373
Scenario 1: Sell the EUR/USD by breaking 1.05209, targeting 1.05050 and then 1.04837.
Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.05437, targeting 1.05621 and then 1.05846.
Comment: Trading below the resistances and averages suggests a decline.
GBPUSD
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.26283
Scenario 1: Selling the pound dollar with a break and stability below the 1.26184 level, targeting the price of 1.25944 and then 1.25722
Alternative scenario: Buy the pound dollar with a break and hold with a close above 1.26490, targeting 1.26725 and then 1.27012.
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 20635
Scenario 1: Buy Nasdaq with a break and hold with a close above 20673, targeting 20776 then 20894
Alternative scenario: Sell Nasdaq with a break and hold with a close below 20516 with a target price of 20392 then 20284
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
-From Europe CPI (YoY) (Oct) 13:00
-From Canada CPI (YoY) (Oct) 16:30
Fundamental Analysis
The dollar index held steady at around 106.6 on Monday, trading near a two-year high amid expectations of fewer interest rate cuts from the Federal Reserve and bets that the U.S. economy will outperform under Trump.
Last week, Federal Reserve Chairman Jerome Powell indicated that the central bank has no immediate plans to cut interest rates, citing a resilient economy, strong labor market and ongoing inflationary pressures.
Stronger-than-expected reports on retail sales and inflation helped support hawkish expectations for Federal Reserve policy.
While markets still expect a quarter-point rate cut in December, the outlook for rate cuts through late 2025 has been cut to 77 basis points, down from more than 100 basis points just a few weeks ago.
Meanwhile, investors are closely watching developments surrounding Donald Trump’s potential pick for Treasury Secretary.
Cantor Fitzgerald CEO Howard Lutnick and investor Scott Bessent are reportedly among the leading candidates for the position.
Gold rose to around $2,600 an ounce on Monday, recovering from its biggest weekly decline since 2021, as the U.S. dollar’s rally stalled.
Oil prices rose slightly on Monday after fighting between Russia and Ukraine escalated over the weekend, although concerns about fuel demand in China, the world’s second-largest consumer, and expectations of a global oil surplus weighed on markets.
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