enDaily Analysis 20/09/2024
Latest Economic and Fundamental Insights
The dollar index held around 100.6 on Friday, hovering near a 14-month low and facing pressure from a rally in risk assets after the Federal Reserve’s massive interest rate cut raised the prospect of a soft landing for the U.S. economy.
Gold stabilizes at record levels of nearly $2,600
The US Federal Reserve implemented its first interest rate cut since early 2020 on Wednesday, with an unexpected 50 basis point reduction.
Federal Reserve officials also expect the benchmark interest rate to be cut by another half percentage point by the end of the year.
This move is expected to enhance the attractiveness of gold by reducing the alternative cost of holding non-yielding assets.
Meanwhile, the People’s Bank of China unexpectedly kept its benchmark lending rate unchanged, while the Bank of England also kept its benchmark interest rate at 5%.
The Bank of Japan is expected to keep interest rates steady after a surprise hike in July.
Meanwhile, gold’s appeal as a safe haven has been boosted by rising tensions in the Middle East, with Israel advancing towards the Lebanese border, raising concerns about a wider conflict.
Gold is likely to remain supported by uncertainty in the Middle East that is reinforcing the precious metal’s role as a safe haven, while expectations of a rate cut by the US Federal Reserve support its positive outlook.
Asian stocks extended gains on Friday, helped by a sharp U.S. interest rate cut, while the yen rose after the Bank of Japan kept interest rates steady and remained upbeat on the economy.
Oil prices are heading towards ending the week higher after the US interest rate cut, with Brent crude trading at $74.00 and West Texas Intermediate at $70.00.
Benchmark indexes have begun to recover after falling to their lowest levels in nearly three years on Sept. 10, and have posted gains in five of the seven sessions since then.
Prices pared some gains on Friday, after rising more than 1 percent on Thursday following the U.S. Federal Reserve’s decision to cut interest rates by half a percentage point on Wednesday. Rate cuts typically boost economic activity and energy demand, but some saw them as a sign of weakness in the U.S. labor market.
“Prices have been under pressure in recent months amid concerns about weak demand, with tight monetary policies stifling economic activity,” analysts at ANZ Research said in a note.
ANZ said that “the easing of monetary policy helped to strengthen expectations that the US economy will avoid a slowdown.”
Prices were also supported by a drop in US crude inventories, which fell to their lowest level in a year last week.
Bitcoin price gained momentum above the $61,500 resistance level. Bitcoin even surpassed the $63,300 level and is now consolidating its gains above the $62,500 level.
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: 2599.64
Scenario 1: Buy gold with a break and stability above 2601.40, targeting 2607.83 and 2614.96
Alternative scenario: Sell gold with a break and stability below 2590.02 with a target price of 2583.57 and then 2575.74
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: $70.94 per barrel
Scenario 1: Buy oil by breaking the $71.25 level, targeting $71.72 and then $72.29.
Alternative scenario: Sell oil with a break and stability by closing a candle below the $70.58 levels, targeting $70.05 and then $69.47.
Comment: Trading above the supports and averages suggests an upward trend.
EURUSD
General trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.11749
Scenario 1: Buy EUR/USD by breaking 1.11807, targeting 1.11992 and then 1.12216.
Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.11580, targeting 1.11420 and then 1.11207
Comment: Trading above the supports and averages suggests an upward trend.
GBPUSD
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.33288
Scenario 1: Buy the pound dollar with a break and stability above the level of 1.33372, targeting the price of 1.33613 and then 1.33899.
Alternative scenario: Sell the pound dollar with a break and stability with a close below 1.33072, targeting 1.32831 and then 1.32609.
Comment: Trading above the supports and averages suggests an upward trend.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 20043
Scenario 1: Buy Nasdaq with a break and hold with a close above 20108, targeting 20211 then 20329
Alternative scenario: Sell Nasdaq with break and hold with close below 19952 with target price 19827 then 19719
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
-Bank of Japan interest rate decision 6:00
-Speech by the Governor of the Bank of Canada 15:15
Fundamental Analysis
The dollar index held around 100.6 on Friday, hovering near a 14-month low and facing pressure from a rally in risk assets after the Federal Reserve’s massive interest rate cut raised the prospect of a soft landing for the U.S. economy.
On Wednesday, the US Federal Reserve cut interest rates by 50 basis points, its first cut in four years.
The central bank indicated its confidence that inflation is moving sustainably toward 2% and moved to prevent a slowdown in the labor market.
Meanwhile, Federal Reserve Chairman Jerome Powell said the central bank is in no rush to ease policy and that half-percentage-point cuts are not “the new pace.” The dollar also weakened on concerns that other major central banks may ease policy less aggressively than the Fed.
The Bank of England kept its policy steady this week, while the People’s Bank of China unexpectedly left its key lending rates unchanged.
The Bank of Japan is also expected to keep interest rates unchanged and signal future rate hikes on Friday.
Gold held steady around $2,590 an ounce on Friday, trading at record highs, as markets continued to assess monetary policy decisions from major central banks amid support for safe-haven assets driven by rising geopolitical risks.
Oil prices, which fell on Friday, were on track to close the week higher for a second straight week after a major U.S. interest rate cut and a drop in global inventories.
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