Daily Market Analysis

 

 

 

Latest Economic and Fundamental Insights

 

The dollar index fell below 105 for the third day in a row. Investors are waiting for the latest US consumer price inflation report to be released, which could significantly impact expectations for interest rates.

Gold prices are holding steady as the release of US inflation data takes center stage. The US CPI data is due out at 3:30 PM Mecca time.

Meanwhile, platinum has reached its highest point in a year.

Federal Reserve Chair Jerome Powell expects inflation to decrease. Data is expected to show that core CPI rose 0.3% on a monthly basis in April, down from 0.4% the previous month.

Gold is currently being driven by data. “If CPI starts to slightly decrease, that would be positive for gold because it’s in a great position to benefit from that trend given its resilience at this stage,” said Kyle Rodda, market analyst at Capital.com.

However, he also noted, “If CPI comes in hotter than expected, it will shake all the markets and confidence in the potential for rate cuts.”

The lackluster jobs report from last week and the weaker-than-expected US jobs report for April have raised expectations for a rate cut by September, according to Fedwatch.

Bullion is known as a hedge against inflation, but rising interest rates increase the opportunity cost of holding gold, which does not yield a return.

Federal Reserve Chair Jerome Powell said on Tuesday that he expects US inflation to continue to decrease in 2024 and indicated that the central bank is unlikely to need to raise interest rates again.

However, data released on Tuesday showed that US producer prices rose more than expected in April.

The Chinese yuan is rising, and a report on a housing rescue is overshadowing new US tariffs.

In other news, GameStop shares jumped 75% after the surprise return of Roaring Kitty. China’s central bank decided to hold key interest rates steady.

Oil prices are rising amid expectations of falling US inventories and focus on the CPI data. Brent crude is trading at $82.00 per barrel, and West Texas Intermediate is at $78.00 per barrel.

US crude oil inventories fell by 3.104 million barrels in the week ended May 10, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories fell by 1.269 million barrels, while distillate inventories rose by 673,000 barrels.

The US government is scheduled to release inventory data later on Wednesday and is also expected to show a decline in crude inventories as refiners ramp up their operations to meet rising demand for fuel as the peak summer driving season approaches.

Bitcoin is holding key support at $60,000. The price of Bitcoin could start another rally and move towards the resistance zone at $63,500.

Bitcoin failed to break above the $65,500 resistance level and is now moving lower with some bearish signals showing below $63,500.

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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

 

Overall Trend: Bullish

Timeframe: 30 minutes

Current Price: 2357.05

Scenario 1: Buy gold if it breaks and holds above 2363.16, targeting 2369.59 and 2376.72.

Alternative Scenario: Sell gold if it breaks and holds below 2351.78, targeting 2345.33 and then 2339.11.

Comment: Trading above supports and moving averages suggests a higher probability of an upward trend.

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CRUDE OIL

 

Trend: Bullish

Timeframe: 30 minutes

Current Price: $78.18 per barrel

Scenario 1: Buy oil if it breaks and closes above $78.58, targeting $79.05 and then $79.61.

Alternative Scenario: Sell oil if it breaks below $77.90, targeting $77.38 and then $76.80.

Comment: Trading above supports and moving averages suggests a higher probability of an upward trend.

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EURUSD

 

Overall Trend: Bullish

Timeframe: 30 minutes

Current Price: 1.08251

Scenario 1: Buy EUR/USD if it breaks and closes above 1.08376, targeting 1.08561 and then 1.08785.

Alternative Scenario: Sell EUR/USD if it breaks and closes below 1.08149, targeting 1.07989 and then 1.07776.

Comment: Trading above supports and moving averages suggests a higher probability of an upward trend.

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GBPUSD

 

Trend: Bullish

Timeframe: 30 minutes

Current Price: 1.25900

Scenario 1: Buy GBP/USD if it breaks and holds above 1.26082, targeting 1.26368 and then 1.26589.

Alternative Scenario: Sell GBP/USD if it breaks and closes below 1.25746, targeting 1.25549 and then 1.25325.

Comment: Trading above supports and moving averages suggests a higher probability of an upward trend.

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NAS100

 

Trend: Bullish

Timeframe: 30 minutes

Current Price: 18412

Scenario 1: Buy Nasdaq if it breaks and closes above 18475, targeting 18544 and then 18641.

Alternative Scenario: Sell Nasdaq if it breaks and closes below 18373, targeting 18316 and then 18265.

Comment: Trading above supports and moving averages suggests a higher probability of an upward trend.

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Economic Calendar

 

(Times are in GMT+3)

• From Europe GDP (annual) (Q1) 12:00
• From USA Core CPI (excluding food and energy) (monthly) (April) 15:30
• From the United States of America Core Retail Sales (MoM) (April) 15:30
• From USA CPI (monthly) (April) 15:30
• From USA CPI (annual) (April) 15:30
• From the United States of America Retail Sales Index (monthly) (April) 15:30

 

Fundamental Analysis

 

 

The dollar index fell below 105 on Wednesday, marking its third consecutive day of decline. Investors are eagerly awaiting the release of the latest US consumer price index (CPI) report, which could significantly impact expectations for interest rates.

Core CPI data, expected on Wednesday, is forecast to show a 0.3% increase on a monthly basis in April, which would be a slowdown from the 0.4% increase seen in March.

The dollar faced pressure on Tuesday as traders remained unfazed by hotter-than-expected producer price inflation data for April. This comes despite a sharp downward revision to the March reading.

Fed Chair Jerome Powell also commented on Tuesday, stating that “these producer price index readings were higher than I think anyone expected.” He went on to say that policymakers “need to be patient and let restrictive policy do its work.”

The odds of a Federal Reserve rate cut initially dipped but then bounced back to roughly the same level as before the PPI release. Currently, the chances of a rate cut sit at 65% for September and 78% for November.

The dollar weakened across the board, but the most significant declines were seen against the Australian and New Zealand dollars.

Gold prices held steady on Wednesday as investors focused on the critical upcoming US inflation reading. This data point could provide vital clues about the path of Federal Reserve rate cuts.

Oil prices rose on Wednesday, fueled by expectations of increased demand. This rise coincided with a weakening US dollar and a report showing a decline in US crude and gasoline inventories. Additionally, the release of the inflation data could point towards a more supportive economic outlook for oil prices.