enDaily Analysis 13/12/2024
Latest Economic and Fundamental Insights
-Dollar heads for strong weekly gains
The dollar index rose above 107 on Friday, putting it on track for a 1% gain for the week, its best weekly performance in a month.
-Gold recovers a little
U.S. factory-gate prices rose more than expected in November, raising concerns that inflation could remain persistently above the Federal Reserve’s target into next year.
However, initial jobless claims unexpectedly rose to their highest level in nearly two months, far exceeding expectations, highlighting the risks of a weak labor market.
Markets still largely expect the Fed to raise interest rates by 25 basis points next week, and they also expect further rate cuts next year, although uncertainty remains about the extent of those cuts.
Meanwhile, dovish measures by other major central banks had little impact on gold prices.
The Swiss National Bank cut interest rates by 50 basis points, the European Central Bank by 25 basis points, the Bank of Canada by 50 basis points, and the Bank of Japan hinted at postponing further increases.
-Throughout the week, the yellow metal is poised to make its first advance in three weeks.
-Gold steady; could be negatively impacted by possible easing of tensions in the Middle East
Gold is steady in early Asian morning trading, but could be weighed down by the prospect of easing tensions in the Middle East, which could reduce the safe-haven appeal of the precious metal.
Arab mediators said Hamas had acceded to two key Israeli demands for a ceasefire in Gaza, raising hopes that a deal could be reached that could free some of the hostages within days.
-Last night’s US producer price index report was also hotter than expected, which could slow the pace of interest rate cuts by the Federal Reserve and reduce appetite for the non-interest-bearing precious metal.
Asian stocks fell on Friday as a strong dollar weighed on risk sentiment, while long-term U.S. Treasury yields were set for their biggest weekly rise in a year as expectations of a 2025 U.S. rate cut receded.
Oil is on track for its first weekly gain in three weeks, with Brent trading at $73.00 and WTI at $69.00.
Brent and WTI crude rose more than 3% this week.
EU imposes new sanctions on Russia, US considers more
-Chinese stimulus expected to support demand
-IEA expects supply surplus in 2025
The two benchmarks are heading for a weekly gain of more than 3 percent, with prices supported by concerns about supply disruptions due to tightening sanctions on Russia and Iran and hopes that Chinese stimulus measures may lift demand in the world’s second-largest oil consumer.
The recent stabilization came after oil defended a key technical level at $71, said IG market strategist Yip Junrong.
“But there has not yet been much conviction to stimulate a stronger price recovery,” he added.
Chinese data this week showed crude imports grew on an annual basis for the first time in seven months in November, driven by lower prices and stockpiling.
“We have seen some recovery in refinery margins since the September lows, but we don’t think that justifies the crude import volumes in November in any way,” said Warren Patterson, head of commodity research at ING.
Crude oil imports by the world’s largest importer are expected to remain high until early 2025 as refiners opt to boost supplies from the world’s largest exporter, Saudi Arabia, due to low prices, while independent refiners rush to use up their quotas.
The International Energy Agency said in its monthly oil market report that it raised its forecast for global oil demand growth in 2025 to 1.1 million barrels per day from 990,000 barrels per day last month, thanks to recent stimulus measures taken by China.
-However, the agency forecast a surplus next year, when non-OPEC+ countries are set to increase supply by about 1.5 million barrels per day, led by Argentina, Brazil, Canada, Guyana and the United States.
-“I think given the outlook for a fairly comfortable balance, there’s no reason (for prices) to break out of that range at the moment,” said ING’s Patterson.
Three of Canada’s largest oil producers expect output to rise in 2025. Based on record U.S. production, Goldman Sachs expects shale oil production in the Lower 48 to grow by about 600,000 barrels per day in 2025, although growth could slow if Brent crude falls below $70 a barrel.
Bitcoin price struggled to break above the resistance area at $102,000. Bitcoin is correcting gains and could test the support area at $97,500.
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: 2683.82
Scenario 1: Buy gold with a break and stability above 2691.24, targeting 2697.67 and then 2704.80
Alternative scenario: Sell gold with a break and stability below 2679.86 with a target price of 2673.41 and 2665.58
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: $69.93 per barrel
Scenario 1: Buy oil with a break and stability by closing a candle above the $70.26 levels, targeting $70.73 and then $71.29.
Alternative scenario: Sell oil by breaking $69.58 with a target price of $69.19 then $68.47
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.04603
Scenario 1: Sell EUR/USD after breaking 1.04483, targeting 1.04323 and then 1.04110.
Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.04710, targeting 1.04895 and then 1.05119.
Comment: Trading below the resistances and averages suggests a decline.
GBPUSD
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.26260
Scenario 1: Selling the pound dollar with a break and stability below the level of 1.26142, targeting the price of 1.25902 and then 1.25680
Alternative scenario: Buy the pound dollar with a break and hold with a close above 1.26443, targeting 1.26683 and then 1.26970.
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 21737
Scenario 1: Buy Nasdaq with a break and hold with a close above 21835, targeting 21939 then 22057
Alternative scenario: Sell Nasdaq with break and hold with close below 21678 with target price 21554 then 21447
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
-UK GDP (MoM) (Oct) 10:00
-From Spain Core CPI (excluding food and energy) (YoY) (November) 11:00
Fundamental Analysis
The dollar index rose above 107 on Friday, putting it on track for a 1% gain for the week, its best weekly performance in a month.
The gains come as markets have already priced in a 25 basis point rate cut by the Federal Reserve next week, although the outlook for 2025 remains uncertain.
Data released on Thursday showed that the headline producer price index rose more than expected, while the core index slowed in line with expectations.
Additionally, initial jobless claims unexpectedly rose to a nearly two-month high of 242,000, well above expectations of 220,000. Markets are now pricing in a 96% chance that the Fed will cut interest rates by a quarter point at its meeting next week.
The dollar also rose against the euro and the Swiss franc following interest rate cuts by the European Central Bank and the Swiss National Bank on Thursday.
Gold rose above $2,680 on Friday, recovering slightly from a more than 1% decline in the previous session, as investors continued to assess the latest economic data.
Oil prices steadied on Friday, heading for their first weekly rise since late November, as supply concerns deepened due to additional sanctions on Iran and Russia, while expectations of a surplus weighed on markets.
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