enDaily Analysis 10/12/2024
Latest Economic and Fundamental Insights
Dollar rises ahead of key inflation data
The dollar index held steady around 106.1 on Tuesday, after two straight sessions of gains, as investors awaited crucial inflation data later this week that could shape the Federal Reserve’s policy outlook.
Gold rises for the second session
China’s ruling Politburo on Monday announced plans to ease monetary policy for the first time in 14 years to stimulate the economy, boosting market sentiment across commodities.
-In addition, the Chinese central bank added gold to its reserves for the first time in seven months, which boosted demand for the precious metal.
Geopolitical tensions in the Middle East, particularly the fall of the Syrian government, added further support as investors sought safe-haven assets.
-The market’s focus now turns to US inflation reports due later this week, which could influence the Federal Reserve’s monetary policy outlook.
Gold steady on hopes for more stimulus in China
-Gold is steady in early Asian trading. On Monday, China’s top policymaking body pledged to implement a more proactive fiscal policy and adopt a “moderately easy” monetary policy next year.
There are hopes for more stimulus. The analyst says there are expectations that such measures could help boost consumer confidence to the point where demand for gold in China increases.
The rally comes as the rapid collapse of the Syrian government is fueling safe-haven buying. Syrian President Bashar al-Assad fled to Moscow over the weekend as rebel forces took control of Damascus, the country’s capital, just days after seizing Aleppo, Syria’s largest city.
Chinese stocks rose, commodities and the Australian dollar found support on Tuesday on Beijing’s fresh promises to cut interest rates and boost consumption, while global stocks were volatile ahead of a crucial U.S. inflation reading.
Oil prices fall but geopolitical risks and China’s policy stance limit losses, with Brent crude trading at $71.00 and WTI at $67.00.
Oil holds most of Monday’s gains amid Syria tensions, Chinese politics
-Syrian regime change increases risks to oil prices
China pledges to step up policy stimulus to spur growth in 2025
Markets await Chinese trade data and API data on US oil inventories
-Hiring in US oil fields indicates increased drilling activity
“The rising geopolitical tensions in the Middle East following the collapse of the Syrian government have added a small risk premium to crude oil prices,” ANZ Research said in a note.
Although Syria itself is not a major oil producer, it is strategically located and has strong ties with Russia and Iran, and regime change there could spark regional instability.
-Syria’s ousted Prime Minister Ali al-Assad said on Monday he had agreed to hand over power to the opposition-led Salvation Government, a day after the opposition took control of the capital Damascus and Assad fled to Russia.
The imminent transfer of power comes after 13 years of civil war and the end of more than 50 years of brutal rule by the Assad family.
Oil prices also received a boost in the previous session from reports that China will adopt an “appropriately easy” monetary policy next year, the first easing of its stance in about 14 years, to stimulate economic growth in the world’s largest oil importer.
Although China’s consumer inflation rate fell to a five-month low in November, it weighed on investor sentiment, but analysts expect crude oil prices to benefit from China’s fiscal stimulus in the future.
“I think this morning’s weakness will prove to be a good buying opportunity as we look for crude to move towards the top of its recent range around $72.50,” Tony Sycamore, an analyst at IG, said via email.
Markets are awaiting Chinese trade data for November on Tuesday and a report from the American Petroleum Institute later in the day showing U.S. crude oil and gasoline inventories last week.
U.S. crude oil and gasoline stocks were expected to have fallen last week, while distillate inventories were likely to have risen, a preliminary Reuters poll showed on Monday. Data from the Energy Information Administration is due on Wednesday.
-Bitcoin price started to decline again and is trading below the $98,000 support level. Bitcoin price has declined towards the $95,000 level and is currently correcting the losses.
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
Time interval: half an hour (30 minutes)
Current price: 2670.41
Scenario 1: Sell gold with a break and stability below 2665.05, targeting 2658.60 and then 2650.77
Alternative scenario: Buy gold with a break and stability above 2676.43 with a target price of 2682.86 and 2689.99
Comment: Trading below the resistances and averages suggests a decline.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $67.73 per barrel
Scenario 1: Sell oil by breaking the $67.72 level, targeting $67.03 and then $66.45.
Alternative scenario: Buy oil with a break and hold with a candle closing above $68.23, targeting $68.70 and then $69.26
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.05569
Scenario 1: Sell the EUR/USD by breaking 1.05617, targeting 1.05257 and then 1.05044.
Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.05644, targeting 1.05829 and then 1.06053.
Comment: Trading below the resistances and averages suggests a decline.
GBPUSD
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.27484
Scenario 1: Selling the pound/dollar with a break and stability below the 1.27294 level, targeting the price of 1.27053 and then 1.26832
Alternative scenario: Buy the pound dollar with a break and hold with a close above 1.27594, targeting 1.27835 and then 1.28121.
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 21468
Scenario 1: Buy Nasdaq with a break and hold to close above 21569 with a target price of 21673 then 21791
Alternative scenario: Sell Nasdaq with break and hold with close below 21412 with target price of 21288 then 21181
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
From China Trade Balance (USD) (November) 6:10
From Australia Reserve Bank of Australia Interest Rate Decision (December) 6:30
From Germany German CPI (MoM) (November) 10:00
Fundamental Analysis
The dollar index held steady around 106.1 on Tuesday, after two straight sessions of gains, as investors awaited crucial inflation data later this week that could shape the Federal Reserve’s policy outlook.
U.S. inflation expectations for the coming year rose to 3% in November from 2.9% in October, data showed on Monday, suggesting continued concerns about persistent price pressures.
Moreover, data last week showed stronger-than-expected job growth in November, despite the unemployment rate rising to 4.2%.
Despite these mixed signals, markets are currently pricing in an 86% chance that the Fed will cut rates by 25 basis points this month, although the outlook for 2025 remains highly uncertain.
Investors are also awaiting monetary policy decisions from central banks in Australia, Canada and Switzerland this week, which could add further volatility to global markets.
Gold rose above $2,660 an ounce on Tuesday, extending gains for a second straight session, supported by a shift in Chinese policy and geopolitical risks in the Middle East.
Oil prices fell slightly on Tuesday, holding onto most of their gains from the previous session as rising geopolitical risks after the fall of Syrian President Bashar al-Assad and China’s pledge to increase policy stimulus kept prices steady.
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