enDaily Analysis 19/06/2024
Latest Economic and Fundamental Insights
-The dollar index stabilized around 105.3 on Wednesday after falling for two consecutive sessions, with trading volumes expected to remain weak as most investors in the United States were out of the country on vacation.
-Gold rises as bets on a Federal interest rate cut become more attractive
-More US economic weakness raises gold prices and weak retail sales in the US in May were expected
-Data released Tuesday showed that US retail sales barely rose in May, suggesting that economic activity remained lackluster in the second quarter.
“Weaker Treasury yields overnight and weak moves around the US dollar after the disappointing US retail sales reading appear to provide room for some relief in the yellow metal,” said Rong, market strategist at IG.
-While US policymakers have guided for only one rate cut through 2024, market rate expectations are leaning more cautious, which appears to find confirmation from the pockets of economic weakness presented. Further economic weakness may lead to an increase in gold prices.”
-Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
-With recent data showing moderation in the labor market and price pressures, the Federal Reserve is looking for further confirmation that inflation is calming.
-The market’s focus is now on Thursday’s weekly jobless claims data and Friday’s PMIs.
Gold prices entered a correction phase after hitting a record high of $2,449.89 on May 20.
On June 7, data showed that China’s central bank temporarily halted purchases of gold for its reserves in May after 18 months of purchases, pushing bullion to its biggest daily decline since November 2020.
Tim Waterer, chief market analyst, said: “Central banks’ purchases of gold stopped in May, and any continuation of this trend poses a risk to the pace of upward momentum in the price of gold.”
Asian stocks rose to their highest level in a month on Wednesday, supported by a rise in technology stocks, while the dollar stabilized after weak US retail sales data reinforced expectations of the Federal Reserve (US central bank) cutting interest rates later this year.
Oil is stable amid war tensions and a sudden increase in US crude inventories, with Brent crude trading at $85.00 and West Texas Intermediate crude at $80.00.
Both benchmarks rose more than a dollar in the previous session after a Ukrainian drone strike led to a fire at an oil terminal in a major Russian port, according to Russian officials and a Ukrainian intelligence source.
In the Middle East, Israeli Foreign Minister Israel Katz warned of an imminent “all-out war” with Lebanese Hezbollah, even as the United States tried to avoid a broader conflict between Israel and the Iranian-backed Hezbollah.
The escalating war in the region raises the possibility of disruption of crude oil supplies from major producers.
-Bitcoin price continued its losses and was trading below the $64,500 level. BTC is correcting losses, but the bears are still in control and aiming for more losses.
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: bearish
Time interval: half an hour (30 minutes)
Current price: 2329.93
The first scenario: selling gold at a fraction and holding below 2322.62, with a target price of 2316.17 and 2309.94.
Alternative scenario: Buy gold at a break and hold above 2334.00, targeting the price of 2340.43 and then 2347.56.
Comment: Trading below resistances and averages suggests a decline
CRUDE OIL
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: $80.56 per barrel
The first scenario: Buying oil at a break and holding steady by closing the candle at the highest level at $80.94, targeting a price of $81.41, then 81.98. Alternative scenario: Selling oil at a break of $80.26, targeting a price of $79.74, then 79.16.
Comment: Trading above supports and averages suggests an upward trend
EURUSD
General trend: bearish
Time interval: half an hour (30 minutes)
Current price: 1.07408
The first scenario: selling the euro/dollar at a break of 1.07265, targeting a price of 1.07105, then 1.06892.
Alternative scenario: Buy the Euro/Dollar at a break and hold steady by closing the candle above 1.07492, targeting the price of 1.07677 then 1.07901.
Comment: Trading below resistances and averages suggests a decline
GBPUSD
Trend: down
Time interval: half an hour (30 minutes)
Current price: 1.27195
The first scenario: selling the pound dollar at a break and holding below the level of 1.26946, targeting the price of 1.26748 then 1.26524.
Alternative scenario: Buy the pound dollar at a break and hold firm by closing above 1.27282, targeting the price of 1.27568 then 1.27789.
Comment: Trading below resistances and averages suggests a decline
NAS100
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: 20223
The first scenario: Buy the Nasdaq at a break and hold steady with a close above 20232, targeting the price of 20302 then 20382.
Alternative scenario: sell Nasdaq at a break and hold firm by closing below 20131, price of 20074, then 20023.
Comment: Trading above supports and averages suggests an upward trend
Economic Calendar
(Times are in GMT+3)
Holiday in the United States – National Independence Day
Fundamental Analysis
The dollar index settled around 105.3 on Wednesday after falling for two straight sessions, with trading volumes expected to remain weak as most investors in the United States were out of the country on vacation.
On Tuesday, the dollar came under pressure as weaker-than-expected US retail sales data reinforced bets that the Federal Reserve will be forced to cut interest rates soon.
Retail sales rose less than expected in May, while the previous month’s numbers were revised much lower, indicating a slowdown in economic activity in the second quarter.
Markets now see there is about a two-thirds chance that the Fed will start easing policy in September, with interest rates expected to be cut roughly twice this year.
Investors are also looking ahead to the Bank of England’s policy decision later this week, as it is expected to keep interest rates steady before delivering its first rate cut in August.
Gold prices rose on Wednesday after weak US retail sales data reinforced expectations that the Federal Reserve will cut interest rates this year.
Oil prices stabilized during trading on Wednesday, as the market was affected by concerns about the escalation of the conflict in Europe and the Middle East along with demand concerns in the wake of an unexpected increase in US crude inventories.
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