Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

Dollar holds near two-year high

The dollar index held steady around 109.6 on Tuesday, staying close to a more than two-year high hit in the previous session.

-Gold rises on Trump policy uncertainty; US inflation data in focus

-The US Producer Price Index report is due out at 16:30 Mecca time and the Consumer Price Index data is due out on Wednesday.

-Gold acts as a hedge against inflation

Gold prices fell about 1 percent on Monday after strong U.S. jobs data last week boosted the dollar. A stronger dollar makes gold more expensive for buyers using other currencies.

The jobs report also reinforced the Federal Reserve’s cautious stance on cutting interest rates this year, while concerns grew that Trump’s tariff plans could stoke inflation.

“The reason gold has performed better during the current period of US dollar strength than it has historically can be attributed to inflationary concerns among investors… Gold has taken on the role of a hedge against inflation,” said Tim Waterer, chief market analyst at KCM Trade.

-A survey conducted by the Federal Reserve Bank of New York showed that American consumers’ expectations about the expected path of inflation were mixed last month.

– Bullion is used as a hedge against inflation, although higher interest rates reduce the appeal of non-yielding assets.
– As President-elect Donald Trump’s inauguration approaches, concerns are growing that his proposed tariffs and trade policies could stoke inflation and spark trade wars, boosting gold’s appeal as an inflation hedge.

The broader outlook for the precious metal also remains positive, supported by geopolitical uncertainty and continued central bank buying.

Investors are now awaiting the release of key US economic data this week, including producer and consumer inflation figures, along with retail sales and weekly jobless claims, which may provide further insights into the economy and the path of the Federal Reserve’s interest rates.

Oil prices remain near four-month highs as pressure on Russia over sanctions mounts, with
Brent trading at $80.00 and WTI at $77.00.

Prices fell after rising about 10% since the beginning of the year.

Markets await US data release this week

Sanctions could remove 700,000 to 800,000 barrels per day of Russian crude from the market.

“Headlines surrounding Russian oil sanctions have been the dominant driver of oil prices over the past week, and alongside resilient US economic data, tighter supply and demand dynamics have provided some momentum,” said IG Market Strategist Yip Jun Rong.

“Prices are taking a breather today. With prices rising rapidly and violently by about 10% since the beginning of the year, this is encouraging some profit taking as risks related to the upcoming US inflation data approach.”

-The US Producer Price Index is due out later today, with CPI data due on Wednesday.

-The stakes are high for Wednesday’s figures, as any rise in core inflation larger than the 0.2% forecast would threaten to close the door on further rate cuts by the Federal Reserve this year.

Low interest rates usually help stimulate economic growth, which may support demand for oil.

“The recent rally to a three-month high suggests an improvement in sentiment, but while broad-based downward pressures have eased for now, a stronger catalyst is still needed to fuel a broader, sustainable uptrend,” IG’s Yip added.

-Bitcoin price is trying to recover from the $89,200 area. Bitcoin price is rising and may face resistance near the $95,800 area.

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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.

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GOLD

 

General trend: Upward

Time interval: half an hour (30 minutes)

Current price: 2670.37

First scenario: Buy gold with a break and stability above 2677.20, targeting 2683.63 and 2690.76

Alternative scenario: Sell gold with a break and stability below 2665.82. Target price 2659.37 and then 2651.54

Comment: Trading above the supports and averages suggests an upward trend.

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CRUDE OIL

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: $76.88 per barrel

Scenario 1: Buy oil with a break and stability by closing a candle above the $77.39 levels, targeting $77.86 and then $78.43.

Alternative scenario: Sell oil by breaking the $76.71 level, targeting $76.19 and then $75.61

Comment: Trading above the supports and averages suggests an upward trend.

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EURUSD

 

General trend: Down

Interval: Half an hour (30 minutes)

Current price: 1.02597

Scenario 1: Sell EUR/USD after breaking 1.02455, targeting 1.02295 and then 1.02082

Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.02682, targeting 1.02867 and then 1.03091.

Comment: Trading below the resistances and averages suggests a decline.

GBPUSD

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Trend: Down

Interval: Half an hour (30 minutes)

Current price: 1.22148

Scenario 1: Selling the pound dollar with a break and stability below the 1.22038 level, targeting the price of 1.21797 and then 1.21575

Alternative scenario: Buy the pound dollar with a break and hold with a close above 1.22338, targeting 1.22579 and then 1.22865.

Comment: Trading below the resistances and averages suggests a decline.

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NAS100

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: 21036

Scenario 1: Buy Nasdaq with a break and hold with a close above 21101, targeting 21204 then 21323

Alternative scenario: Sell Nasdaq with a break and hold with a close below 20944 with a target price of 20820 then 20713

Comment: Trading above the supports and averages suggests an upward trend.

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Economic Calendar

 

(Times are in GMT+3)

-From USA Producer Price Index (MoM) (December) 16:30

-From USA Producer Price Index (YoY) (December) 16:30

Fundamental Analysis

 

 

The dollar index held steady around 109.6 on Tuesday, staying close to a more than two-year high hit in the previous session.

Continued signs of resilience in the U.S. economy have prompted traders to scale back expectations for a Federal Reserve rate cut this year.

Investors are also awaiting key inflation data this week, which could further influence interest rate expectations.

Markets are now pricing in just 29 basis points of monetary easing this year, a sharp drop from the 50 basis points expected earlier this month.

A quarter-point rate cut is now likely to be postponed until the second half of the year.

The dollar also found support from the Trump administration’s upcoming threats to impose tariffs, although reports have suggested that a gradual approach to tariffs may be adopted.

While the dollar held steady against most major currencies, it weakened slightly against the Australian and New Zealand dollars.

Gold rose above $2,670 an ounce on Tuesday in a possible technical recovery, after falling more than 1% in the previous session on a stronger U.S. dollar and higher Treasury yields.

Gold prices rose on Tuesday, supported by uncertainty surrounding US President-elect Donald Trump’s political plans and investor sentiment ahead of crucial US inflation data that will provide further insights into the path of Federal Reserve policy.