enDaily Analysis 21/08/2024
Latest Economic and Fundamental Insights
The dollar index fell below 101.5 on Wednesday, falling to its lowest level this year as investors awaited updates from the Federal Reserve to gauge the timing and size of expected interest rate cuts.
Gold rises ahead of Fed minutes
Traders are also looking ahead to Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Symposium on Friday for further guidance.
Markets are currently expecting the US central bank to cut interest rates by 100 basis points in its three remaining decisions this year, amid slowing inflationary pressures and weak labor market conditions.
However, opinions are divided on whether the Fed will implement a 25 or 50 basis point cut at its September meeting, following strong retail sales data in July.
Moreover, geopolitical uncertainty and large global ETF inflows continued to support gold’s bullish trend.
Gold was steady in early Asian trading, after hitting a record high in the previous session, supported by expectations of an easing of Federal Reserve policy.
Markets will be looking for clues on potential monetary policy easing from Federal Reserve Chairman Jerome Powell’s speech in Jackson Hole on Friday.
Gold typically has an inverse relationship with interest rates, with higher interest rates making non-interest-bearing bullion less attractive to investors.
-Brent maintains its decline amid rising US inventories, with Brent crude trading at $77.00 and WTI at $72.00.
– Data from the American Petroleum Institute showed that U.S. crude oil inventories rose by 0.347 million barrels during the week ending August 20, defying market expectations for a decrease of 2.8 million barrels, marking only the second increase in the past eight weeks.
Moreover, markets continued to monitor progress in the Middle East after Israel agreed to a proposal to address differences holding up a ceasefire in Gaza, easing supply concerns.
But reaching an agreement between Israel and Hamas is still far from being reached.
-The weakness of the Chinese economy also continued to weigh on demand expectations.
Investors are closely watching the minutes of the Federal Open Market Committee meeting due later today for further clues on the Fed’s next policy move.
After showing lackluster price action below $60,000 over the past few days, Bitcoin has finally shown some momentum in the past 24 hours, rising more than 4% in price.
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: 2517.25
Scenario 1: Buy gold with a break and stability above 2521.98, targeting 2525.41 and 2535.53
Alternative scenario: Sell gold with a break and stability below 2510.59, targeting 2504.15 and then 2496.31
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $72.88 per barrel
Scenario 1: Sell oil with a break and stability by closing a candle below the $72.70 levels, targeting $72.18 and then $7159.
Alternative scenario: Buy oil by breaking the $73.38 level, targeting $73.85 and then $74.41.
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.11207
First scenario: Buy the Euro-Dollar by breaking 1.11326, targeting 1.11510 and then 1.11735.
Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.11098, targeting 1.10938 and then 1.09725
Comment: Trading above the supports and averages suggests an upward trend.
GBPUSD
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.30289
Scenario 1: Buy the pound dollar with a break and stability above the level of 1.30396, targeting the price of 1.30537 and then 1.30737
Alternative scenario: Sell GBP/USD with a break and stability with a close below 1.30179, targeting 1.30038 and then 1.29860
Comment: Trading above the supports and averages suggests an upward trend.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 19845
Scenario 1: Buy Nasdaq with a break and hold to close above 19901 with a target price of 20005 then 20123
Alternative scenario: Sell Nasdaq with a break and hold with a close below 19745 with a target price of 19620 then 19513
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
-US Crude Oil Inventory 17:00
-From USA FOMC Meeting Minutes 21:00
Fundamental Analysis
The dollar index fell below 101.5 on Wednesday, falling to its lowest level this year as investors awaited updates from the Federal Reserve to gauge the timing and size of expected interest rate cuts.
The latest Fed minutes are due later today, while Fed Chair Jerome Powell is set to speak at the Jackson Hole symposium on Friday.
Markets are currently pricing in about 100 basis points of total cuts this year, while remaining divided over whether the central bank will favor a 25 or 50 basis point cut in September.
In his latest comment, Minneapolis Federal Reserve President Neel Kashkari said on Monday that it is appropriate to consider cutting interest rates in September due to rising labor market risks.
The dollar fell to multi-month lows against most major currencies, and fell to a one-and-a-half-year low against the pound.
Gold edged up towards $2,520 an ounce on Wednesday, staying close to a record high hit in the previous session as investors awaited the latest minutes of the Federal Open Market Committee meeting due later in the day that could provide crucial insights into the direction of the U.S. Federal Reserve’s monetary policy.
Brent crude futures held near $77 a barrel on Wednesday after falling for three straight sessions, weighed down by an unexpected rise in U.S. crude inventories.
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