enDaily Analysis 27/08/2024
Latest Economic and Fundamental Insights
The dollar index held steady at around 100.9 on Tuesday after hitting a 13-month low in the previous session, supported by increased safe-haven demand amid heightened geopolitical risks in the Middle East. Israel and Hezbollah traded missile strikes over the weekend, raising concerns of a wider conflict in the region that could involve Iran.
Gold falls below 2,510
Last week, Federal Reserve Chairman Jerome Powell confirmed a September interest rate cut, indicating that the US central bank is prepared to start cutting rates as inflation approaches its 2% target, while also expressing concerns about the weakness in the labor market.
San Francisco Fed President Mary Daly echoed Powell’s dovish stance on Monday, saying it was “time to adjust policy.” Similarly, Richmond Fed President Barkin said that while he still sees risks of higher inflation, he supports “cutting” interest rates in response to a slowing labor market.
Moreover, the escalation of geopolitical tensions in the Middle East has increased the demand for safe-haven assets such as gold.
The rise comes after Powell said the Federal Reserve is prepared to start cutting U.S. interest rates as inflation slows to near its 2% target while turning to concerns about the health of the labor market.
“Labor market conditions are now less tight than they were before the pandemic in 2019 — a year in which inflation fell below 2%,” Powell said in his speech Friday at the Fed’s annual symposium in Jackson Hole, Wyoming. “The labor market seems unlikely to be a source of elevated inflationary pressures anytime soon. We neither seek nor welcome a further slowdown in labor market conditions.”
The dovish shift from the central bank was widely expected, although gold has benefited from the shift, although some expect further gains to be limited.
Asian stocks fell on Tuesday as investors pondered an imminent U.S. interest rate cut and awaited earnings from artificial intelligence darling Nvidia, while rising tensions in the Middle East and supply concerns curbed risk appetite and supported oil prices.
Oil halts gains after rally due to Libya outages and Middle East tensions, with Brent crude trading at $81.00 and WTI at $76.00
“Losses in oil prices may appear limited in today’s session, suggesting that prices are taking a breather after their sharp rise over the past few days,” said IG market strategist Yip Junrong.
“With oil prices rising in light of geopolitical risks in the Middle East and production shutdowns in Libya, market participants are now in a wait-and-see mode to assess further developments.”
Oil markets have risen sharply in the past three sessions, driven by expectations of a U.S. interest rate cut that could boost fuel demand, military attacks between Israel and Hezbollah in Lebanon over the weekend that threaten a wider Middle East conflict that could disrupt supplies from a key production region and potential shutdowns in Libya.
Over that period, WTI gained 7.6%, while Brent gained 7%.
-Bitcoin is entering a recovery phase, given its recent surge that has taken the asset’s price close to the $66,000 level. In particular, after briefly touching a 24-hour high of $64,893 earlier today, Bitcoin has pulled back slightly, now trading at $63,786, reflecting a slight decline of 0.2% over the past day.
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: 2514.63
Scenario 1: Buy gold with a break and stability above 2519.26, targeting 2525.69 and 2532.82
Alternative scenario: Sell gold with a break and stability below 2507.88 with a target price of 2501.43 and then 2493.60
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: $76.81 per barrel
Scenario 1: Buy oil by breaking the $77.07 level, targeting $77.54 and then $78.11.
Alternative scenario: Sell oil with a break and stability by closing a candle below the $76.39 levels, targeting $75.87 and then $75.29.
Comment: Trading above the supports and averages suggests an upward trend.
EURUSD
General trend: Upward
Interval: Half an hour (30 minutes)
Current price: 1.11672
First scenario: Buy the Euro-Dollar by breaking 1.11799, targeting 1.11983 and then 1.12208.
Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.11571, targeting 1.11411 and then 1.11198.
Comment: Trading above the supports and averages suggests an upward trend.
GBPUSD
Trend: Upward
Time interval: half an hour (30 minutes)
Current price: 1.32019
Scenario 1: Buy the pound dollar with a break and stability above the 1.32096 level, targeting the price of 1.32238 and then 1.32438.
Alternative scenario: Selling the pound dollar with a break and stability with a close below 1.31880, targeting 1.31738 and then 1.31560
Comment: Trading above the supports and averages suggests an upward trend.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 19598
Scenario 1: Buy Nasdaq with a break and hold to close above 19675 with a target price of 19780 then 19898
Alternative scenario: Sell Nasdaq with a break and hold with a close below 19520 with a target price of 19395 then 19288
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
-From USA CB Consumer Confidence Index (August) 17:00
Fundamental Analysis
Federal Reserve Chairman Jerome Powell said in his Jackson Hole speech on Friday that it was time to adjust policy amid growing risks to the labor market, while expressing confidence that inflation would return to the central bank’s 2% target.
Meanwhile, data released Monday showed that durable goods orders rose more than expected in July.
Markets are now looking ahead to the latest initial jobless claims and the Fed’s preferred personal consumption expenditures price index report later this week for further clarity on the path of interest rates.
Gold prices hit an all-time high mid-afternoon Monday as Treasury yields continued to weaken after Federal Reserve Chairman Jerome Powell said on Friday the central bank is ready to start cutting interest rates to support a weak labor market.
Oil prices snapped recent gains, retreating on Tuesday after rising more than 7% in the previous three sessions on supply concerns over fears of a wider conflict in the Middle East and the potential shutdown of Libyan oil fields.
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