Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

-Dollar heads for strong weekly gains

The dollar index fell to around 106.8 on Monday, but remained near three-week highs ahead of the Federal Reserve’s latest policy decision this week.

Gold rises, eyes on Fed meeting

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.

The Federal Reserve is widely expected to cut interest rates by another 25 basis points at its final meeting of the year.

This would enhance the attractiveness of gold by reducing the opportunity cost of holding non-yielding assets.

Moreover, the ongoing geopolitical tensions in the Middle East, especially after Israel carried out air and ground attacks on Gaza, supported gold’s status as a safe haven.

Meanwhile, the World Gold Council forecast a slowdown in the precious metal’s growth next year, citing factors such as central bank actions, geopolitical tensions, and economic conditions in key markets such as the United States, China, and India.

-Gold rises slightly; Fed meeting in the spotlight

Gold rose in early Asian trading. Investors are focused on the Federal Reserve meeting this week, and while the market is expecting a 25 basis point interest rate cut,

“The Fed’s economic projections and the dot chart could provide further clarity on the outlook for monetary policy through 2025,” Elizondia says. Gold faces a challenging medium-term outlook with price movements closely tied to monetary policy expectations and their impact on bond yields.

Asian stock markets were cautious on Monday as higher bond yields challenged equity valuations, especially for the high-priced technology sector, in a week packed with central bank meetings and key economic data.

Oil retreats from multi-week highs as investors await Fed rate cut, Brent trades at $74.00, WTI at $70.00

“After last week’s +6% rise, with crude trading towards the top of the recent range, we are likely to see some mild profit taking,” said Tony Sycamore, market analyst at IG.

“It is also likely that many trading books at banks and funds closed at the end of last week and reduced their appetite for positions during the holiday season.”

He added that oil prices received support from new sanctions imposed by the European Union on Russian oil last week and expectations of tightening sanctions on Iranian supplies.

The United States is considering additional sanctions on “dark fleet” oil tankers and will not rule out sanctions on Chinese banks as it seeks to squeeze Russia’s oil revenues and access to foreign supplies to fuel its war in Ukraine, Treasury Secretary Janet Yellen told Reuters on Friday.

-New U.S. sanctions on entities trading in Iranian oil have already pushed crude prices for China to their highest levels in years, and the incoming Trump administration is expected to ratchet up the pressure on Iran.

Sycamore said oil prices were also supported by key interest rate cuts by central banks in Canada, Europe and Switzerland last week and expectations that the Federal Reserve will cut rates this week.

The Federal Reserve is expected to cut interest rates by a quarter percentage point at its December 17-18 meeting, which will also provide an updated look at how much additional rate cuts Fed officials believe they will continue to make in 2025 and possibly into 2026.

-Bitcoin price started to rise again above the $100,000 resistance area. Bitcoin price rose by about 5% and is trading at an all-time high above $106,400.

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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

Interval: Half an hour (30 minutes)

Current price: 2652.77

Scenario 1: Buy gold with a break and stability above 2658.02, targeting 2664.45 and then 2671.58

Alternative scenario: Sell gold with a break and stability below 2646.64 with a target price of 2640.19 and 2632.36

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: $70.46 per barrel

Scenario 1: Buy oil with a break and stability by closing a candle above the $70.88 levels, targeting $71.35 and then $71.92.

Alternative scenario: Sell oil by breaking the $70.20 level, targeting $69.68 and then $69.10

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

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EURUSD

 

General trend: Down

Interval: Half an hour (30 minutes)

Current price: 1.05144

Scenario 1: Sell the EUR/USD by breaking 1.05070, targeting 1.04910 and then 1.04697.

Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.05297, targeting 1.05482 and then 1.05707.

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: 1.26342

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.

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NAS100

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: 21803

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.

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Economic Calendar

 

(Times are in GMT+3)

From USA Manufacturing PMI (December) 17:45

From USA Manufacturing PMI (December) 17:45

Bank of Canada Governor’s Speech 23:45

Fundamental Analysis

 

 

The dollar index fell to around 106.8 on Monday, but remained near three-week highs ahead of the Federal Reserve’s latest policy decision this week.

The central bank is widely expected to cut interest rates by 25 basis points on Wednesday, but traders will focus on the updated policy statement and forward guidance from Fed Chair Jerome Powell.

Markets expect the Fed to signal a more conservative pace of easing in 2025.

Traders currently expect a 93% chance the Fed will cut rates by a quarter-point this week, but they now expect officials to forgo a cut in January.

Meanwhile, concerns about the return of inflation under the incoming Trump administration kept markets on edge.

Investors are also looking ahead to monetary policy decisions from central banks in the UK, Japan and China this week.

Gold rose above $2,650 an ounce on Monday as investors awaited the Federal Reserve’s policy decision later this week, with focus on the central bank’s monetary policy outlook for 2025.

Oil futures retreated from multi-week highs as traders took profits as they awaited a Federal Reserve meeting later this week for a signal of further interest rate cuts.