enDaily Analysis 18/12/2024
Latest Economic and Fundamental Insights
Dollar steady ahead of Fed decision
The dollar index was largely unchanged at around 106.9 on Wednesday as caution prevailed ahead of an expected interest rate cut by the Federal Reserve later in the day.
Gold steady ahead of Fed decision
While the Federal Reserve is widely expected to cut interest rates by 25 basis points, traders are focusing on clues about the outlook for interest rates next year, amid uncertainty about how the Trump administration’s upcoming policies will affect the path of interest rates.
Meanwhile, stronger-than-expected U.S. retail sales data showed a 0.7% increase in November, fueling speculation that the Federal Reserve may slow the pace of its policy easing.
However, the precious metal has risen more than 28% this year, putting it on track for its biggest annual gain since 2010, driven by U.S. monetary easing, safe-haven demand and sustained buying by central banks.
Elsewhere, India’s gold imports surged to a record high in November after customs duties were cut, with annual demand from the key consumer expected to rise 7% in 2024, the second highest since 2015.
Gold prices may continue to rise until 2025
-Even after a stunning 2024, gold prices may have more room to run. George Milling Stanley and other strategists say central bank gold buying is set to remain strong,
-Which helps offset the negative impact of the strong dollar on the precious metal. Consumer demand is increasing from India and China, and State Street Global Advisors believes that more investors will seek gold due to expected interest rate cuts and concerns about geopolitical tensions.
They add that the easing of monetary policy and the possibility that the Trump administration’s fiscal policies will raise the deficit and stoke inflation will reduce the opportunity cost of buying gold compared to buying US dollars or Treasury bonds.
State Street Global Advisors sees gold at $2,600 to $2,900 an ounce in 2025, with a potential to rise to $3,100. Gold was last priced at around $2,645.
Stock markets paused while the dollar rose on Wednesday as investors made last-minute adjustments to their portfolios in the countdown to the final batch of central bank meetings this year, while news of a possible merger between Nissan and Honda sent auto stocks higher.
-Oil is stable and the market awaits the interest rate decision by the Federal Reserve, with Brent crude trading at $73.00 and West Texas crude at $69.00.
Analysts said the market is awaiting clues on interest rate moves in 2025 following the Federal Open Market Committee meeting, which ends later on Wednesday.
“Additional sanctions from the West may limit some losses in today’s session, but the cautious tone remains in place in the run-up to the FOMC meeting,” said IG market strategist Yip Junrong.
“Looking ahead, oil prices are likely to remain rangebound, with subdued price action expected to continue through the end of the year,” Yeap added.
The Federal Reserve is widely expected to cut interest rates on Wednesday for the third time since the start of its monetary easing cycle.
“There are doubts about the outlook for a rate cut in 2025, especially with Trump planning to return on January 20,” said Priyanka Sachdeva, senior market analyst at Philip Nova.
“There is a prevailing narrative that Trump’s policies could lead to inflation, which coupled with concerns about potential interference in the independence of the Federal Reserve, is prompting oil investors to remain cautious,” she added.
Low interest rates lower borrowing costs, which should boost economic growth and demand for oil.
Meanwhile, the European Union on Tuesday adopted its 15th package of sanctions against Russia over its invasion of Ukraine, adding 33 more ships from Russia’s shadow fleet used to transport crude oil or petroleum products. Britain also imposed sanctions on 20 ships for transporting illicit Russian oil.
-Bitcoin price started rising again above the $106,000 resistance area. Bitcoin was trading at a new all-time high above $108,000 and is currently correcting gains.
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
Time interval: half an hour (30 minutes)
Current price: 2644.84
Scenario 1: Buy gold with a break and stability above 2651.65, targeting 2658.08 and then 2665.21
Alternative scenario: Sell gold with a break and stability below 2640.27 with a target price of 2633.82 and 2625.98
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: $69.89 per barrel
Scenario 1: Buy oil with a break and stability by closing a candle above the $70.08 levels, targeting $70.55 and then $71.11.
Alternative scenario: Sell oil by breaking $69.40 with a target price of $68.88 then $68.29
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.05059
Scenario 1: Sell EUR/USD after breaking 1.04893, targeting 1.04733 and then 1.04520.
Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.05120, targeting 1.05305 and then 1.05529.
Comment: Trading below the resistances and averages suggests a decline.
GBPUSD
Trend: Down
Time interval: half an hour (30 minutes)
Current price: 1.26955
Scenario 1: Selling the pound/dollar with a break and stability below the 1.26835 level, targeting the price of 1.26595 and then 1.26373
Alternative scenario: Buy the pound dollar with a break and hold with a close above 1.27135, targeting 1.27376 and then 1.27663.
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Upward
Time interval: half an hour (30 minutes)
Current price: 22331
Scenario 1: Buy Nasdaq with a break and hold with a close above 22442, targeting 22545 then 22663
Alternative scenario: Sell Nasdaq with a break and hold with a close below 22322 with a target price of 22160 then 22053
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
-From UK Consumer Price Index (YoY) (November) 10:00
-From Europe Consumer Price Index (YoY) (November) 13:00
-US crude oil inventory 18:30
-From USA Core Retail Sales (MoM) (November) 16:30
-From the United States of America, the Federal Open Market Committee’s economic forecasts 22:00
-Federal Open Market Committee Report 22:00
-The interest rate decision issued by the US Federal Reserve 22:00
-Federal Reserve Press Conference 22:30
Fundamental Analysis
The dollar index was largely unchanged at around 106.9 on Wednesday as caution prevailed ahead of an expected interest rate cut by the Federal Reserve later in the day.
Markets are pricing in a 97% chance of a quarter-point rate cut, with traders focusing on updated economic forecasts and Fed Chair Jerome Powell’s comments after the meeting.
Speculation is also growing that the Federal Reserve may signal smaller rate cuts in 2025 than previously, with some traders expecting a pause as early as January.
On the data front, U.S. retail sales beat expectations in November, driven by resilient consumer spending, while industrial production unexpectedly fell for a third straight month.
Additionally, investors are bracing for the latest monetary policy decisions from the Bank of England and the Bank of Japan this week.
Gold held steady near $2,650 an ounce on Wednesday, remaining in a tight trading range ahead of the Federal Reserve’s monetary policy announcement later in the day.
Oil prices traded in a narrow range early on Wednesday as investors remained cautious ahead of an expected interest rate cut by the U.S. Federal Reserve, while weighing the potential impact of tougher sanctions on Russia on supplies.
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