enDaily Analysis 06/12/2024
Latest Economic and Fundamental Insights
Dollar faces pressure ahead of key jobs report
The dollar index remained below 106 on Friday, following a decline in the previous session, as investors prepared for a crucial jobs report that could influence the Federal Reserve’s decision on interest rates in December.
Gold falls for second session
Data showed that the number of Americans filing new applications for unemployment benefits rose last week, indicating a gradual slowdown in the labor market.
This comes ahead of the US non-farm payrolls report, due later on Friday, which is the next major data point before the Federal Reserve’s policymakers meet in mid-December.
The odds of a 25 basis point rate cut in December are 70%, which benefits gold by reducing the opportunity cost of holding non-interest-bearing assets.
Meanwhile, the World Gold Council reported that Chinese demand for gold jewelry has declined, but investment remains strong in 2024.
The fund also expects both sectors to stabilize, with demand for gold jewelry likely to improve, while investment growth may slow in 2025.
Gold rises slightly ahead of US jobs report
Gold prices rose in early Asian trading, ahead of the US non-farm payrolls report later today.
The data results could play a pivotal role in determining the future policy stance of the Federal Reserve and could lead to volatility in the gold market. Gold typically has an inverse relationship with interest rates,
-High interest rates discourage demand for the non-interest bearing metal.
Most Asian shares fell on Friday as political unrest in South Korea weighed on sentiment, while traders in a rising dollar waited anxiously to see whether U.S. jobs data would challenge or reinforce expectations for an interest rate cut this month.
Oil prices fall as OPEC+ supply cuts deepen and demand weakens, with Brent crude trading at $71.00 and WTI at $67.00
Over the week, Brent crude was on track to fall by more than 1%, while WTI crude maintained marginal gains of 0.1%.
The Organization of the Petroleum Exporting Countries and its allies on Thursday postponed the start of oil production increases by three months until April and extended the full lifting of cuts by a year until the end of 2026.
The group known as OPEC+, which accounts for about half of the world’s oil production, had planned to start easing cuts from October 2024, but slowing global demand – especially in China – and rising production elsewhere have forced it to postpone the plan several times.
“Despite a surprise draw in US crude inventories last week and OPEC+ extending plans to boost production until September 2026, oil prices have fallen further amid growing concerns about weak global demand and oversupply in the markets,” said Priyanka Sachdeva, senior market analyst at Philip Nova.
“With growing concerns about global oil demand in 2025, even the weakness of the US dollar in the past few sessions does not seem enough to repair the floor that oil prices have reached,” she said.
Analysts at energy-focused consultancy FGE said the latest extension puts OPEC+ production below previous expectations from major banks, which could provide some support to the market going forward.
However, concerns that supply will continue to outpace demand into next year have further weighed on prices.
Macquarie analysts expected Saudi oil production to remain in the 9 million barrels per day range in 2025, but they predicted that even with this supply discipline, the market would suffer from an oversupply of more than 1 million barrels per day.
“Looking ahead to next year, we expect a large surplus, as non-OPEC supply growth is expected to meet below-trend demand growth, reducing demand for OPEC supply and limiting the need to reverse voluntary OPEC+ cuts,” they said in a note to clients.
Bitcoin price fell sharply from its high of $104,015 and dropped below $95,000. Bitcoin is now recovering from its losses and facing hurdles near $99,000.
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: Down
Interval: Half an hour (30 minutes)
Current price: 2637.97
Scenario 1: Sell gold with a break and stability below 2633.29, targeting 2626.84 and then 2619.00
Alternative scenario: Buy gold with a break and stability above 2644.67 with a target price of 2651.10 and 2658.23
Comment: Trading below the resistances and averages suggests a decline.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $67.86 per barrel
Scenario 1: Sell oil by breaking the $67.57 level, targeting $67.05 and then $66.46.
Alternative scenario: Buy oil with a break and hold with a candle closing above $68.22, targeting $68.72 and then $69.28
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.05716
Scenario 1: Sell EUR/USD after breaking 1.05618, targeting 1.05459 and then 1.05246.
Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.08546, targeting 1.06030 and then 1.06255.
Comment: Trading below the resistances and averages suggests a decline.
GBPUSD
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.27493
Scenario 1: Selling the pound dollar with a break and stability below the level of 1.27349, targeting the price of 1.27086 and then 1.26864
Alternative scenario: Buy the pound dollar with a break and hold with a close above 1.27627, targeting 1.27867 and then 1.28154.
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 21432
Scenario 1: Buy Nasdaq with a break and hold to close above 21589 with a target price of 21692 then 21810
Alternative scenario: Sell Nasdaq with break and hold with close below 21432 with target price of 21307 then 21200
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
Europe GDP (YoY) (Q3) 13:00
From USA Average Hourly Wages Index (Monthly) (November) 16:30
From the United States of America Non-Farm Payrolls Report (November) 16:30
From the United States of America Unemployment Rate Index (November) 16:30
Fundamental Analysis
The dollar index held below 106 on Friday, following a decline in the previous session, as investors prepared for a crucial jobs report that could influence the Federal Reserve’s decision on interest rates in December.
November’s nonfarm payrolls report is expected to show a gain of 200,000 jobs, while weaker-than-expected data is expected to fuel speculation of an interest rate cut.
Meanwhile, data released on Thursday revealed that initial jobless claims rose more than expected, to 224,000, pointing to a possible slowdown in the labor market.
Markets currently price in a 71% chance of a 25 basis point rate cut this month, up from 66.5% a week ago.
While the dollar posted losses against most major currencies, it strengthened against the Australian dollar, driven by growing expectations of an early interest rate cut by the Reserve Bank of Australia.
For the week, the dollar index is expected to close relatively flat.
Gold fell toward $2,620 an ounce on Friday, falling for a second straight session and hitting its lowest in more than a week, as markets awaited fresh U.S. data for insights on the Federal Reserve’s monetary policy.
Oil prices fell slightly on Friday, with the focus on weak demand after the OPEC+ group postponed planned supply increases and extended deep production cuts until the end of 2026.
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