enDaily Analysis 23/05/2024
Latest Economic and Fundamental Insights
-The dollar index settled around 104.9 on Thursday after advancing to its highest levels in a week in the previous session, supported by the hawkish tone of the minutes of the Federal Reserve’s latest policy meeting.
-Gold prices fell after the minutes of the hawkish Federal Reserve meeting
Analysts say gold will drift back to $2,355 if the dollar continues its upward momentum
-Fed meeting minutes reflect discussion of the possibility of further rises
While the policy response for now will “include maintaining” the US central bank’s benchmark interest rate at its current level, the minutes released on Wednesday also reflect discussions about possible further rises.
One analyst said, “Gold was shocked after the Federal Reserve minutes reminded investors that interest rate cuts are far from imminent.”
Bullion is known as an inflation hedge, but rising interest rates increase the opportunity cost of holding non-yielding gold.
“There is a chance that gold will drift back to support levels around the $2,355 area if the dollar continues its upward momentum,” Waterer said, adding that the medium-to-long-term outlook still looks constructive for gold, but this largely depends. The next price movement should be lower, not higher, than the Fed.
Traders’ bets have indicated growing doubts that the Fed will cut rates more than once in 2024, currently forecasting a 73% chance of a rate cut by November. (Fedwatch)
India’s gold imports in 2024 could fall by about a fifth from the previous year as record high prices spur retail consumers to replace old jewelery with new goods, the head of an industry body told Reuters.
-Inflation in Canada rose by 2.7% in April, rising at the slowest pace in three years
-: Tesla stock prices rise by 6% thanks to the Semi Truck update, and the shares retreat from deep annual losses.
Several Asian stock indices fell on Thursday as markets digested the effects of policymakers in major economies who favor a patient approach to monetary easing amid sticky inflation.
Oil prices fell due to fears of a rise in US interest rates, with Brent crude trading at $81.00 and West Texas Intermediate crude at $76.00.
Minutes of the Federal Reserve’s latest policy meeting released on Wednesday showed that the US central bank’s response to flat inflation “will include maintaining” the interest rate for now but also reflects discussion of the possibility of further increases.
“Several participants indicated a desire to tighten policy further if inflation risks materialize in a way that makes such action appropriate,” the Fed meeting minutes said.
-High interest rates increase borrowing costs, reducing funds that could boost economic growth and demand for oil.
-Bitcoin price started a downward correction below the $70,000 level. BTC is now testing the $68,800 support and may attempt a new rally.
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: bullish
Time interval: half an hour (30 minutes)
Current price: 2363.16
The first scenario: Buy gold at a break and hold above 2365.40, with a target price of 2371.83 and 2378.96.
Alternative scenario: sell gold at a break and hold below 2354.02, with a target price of 2347.57 and then 2341.35.
Comment: Trading above supports and averages suggests an upward trend
CRUDE OIL
Trend: Bearish
Time interval: half an hour (30 minutes)
Current price: $77.06 per barrel
The first scenario: selling oil at a break and holding steady by closing the candle below the $76.57 level, targeting a price of $76.05, then 75.47. Alternative scenario: buying oil at a break of the $77.25 level, targeting a price of $77.72, then 78.29.
Comment: Trading below resistances and averages suggests a decline
EURUSD
General trend: bullish
Time interval: half an hour (30 minutes)
Current price: 1.08262
The first scenario: Buying Eurodollars at a break of 1.08384, targeting a price of 1.08569, then 1.08794.
Alternative scenario: sell the euro/dollar at a break and hold firm by closing the candle below 1.08157, targeting the price of 1.07997 then 1.07784.
Comment: Trading above supports and averages suggests an upward trend
GBPUSD
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: 1.27266
The first scenario: Buy the pound dollar at a break and hold at the highest level of 1.27421, targeting the price of 1.27707, then 1.27929.
Alternative scenario: sell the pound dollar at a break and hold firm by closing below 1.27085, targeting the price of 1.26888 then 1.26664.
Comment: Trading above supports and averages suggests an upward trend
NAS100
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: 18949
The first scenario: Buy the Nasdaq at a break and hold steady by closing above 19002, targeting the price of 19071 then 19152.
Alternative scenario: sell Nasdaq at a break and hold firm by closing below 18900, price 18843 then 18792
Comment: Trading above supports and averages suggests an upward trend
Economic Calendar
(Times are in GMT+3)
From USA Existing Home Sales (April) 17:00
From the United States of America, service and industrial purchasing managers 16:45
From USA New Home Sales 17:00
From the United States of America, initial unemployment claims 15:30
Fundamental Analysis
The dollar index settled around 104.9 on Thursday after advancing to a one-week high in the previous session, supported by the hawkish tone of the minutes of the Federal Reserve’s latest policy meeting.
The minutes revealed participants’ concerns about stubborn inflation, which affected sentiment around interest rate cuts.
Some members also indicated their willingness to tighten policy further if inflation accelerates again.
The odds of a rate cut in September and November have now fallen slightly to around 61% and 72% respectively.
Thursday’s US weekly jobless claims and May’s preliminary PMI numbers will be closely watched for further guidance.
The dollar maintained its gains against most major currencies, but fell against the Australian and New Zealand dollars.
The US currency also fell further against the British pound amid hotter-than-expected inflation data in the UK.
Gold prices fell for a third straight session on Thursday after minutes from the Federal Reserve’s latest meeting indicated some officials were leaning toward raising interest rates.
Oil prices fell for a fourth straight day on Thursday amid concerns that US borrowing costs could rise again if inflation rises, a move that could hurt oil demand.
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