enDaily Analysis 22/10/2024
Latest Economic and Fundamental Insights
The dollar index hit an 11-week high around 103.8 on Friday and was on track for a third straight weekly gain, supported by strong U.S. economic data and the so-called “Trump deal.” Data released on Thursday showed U.S. retail sales grew more than expected in September while the latest weekly jobless claims came in below expectations.
Gold exceeds $2700
The European Central Bank cut interest rates for the third time this year, lowering its deposit rate to 3.25% as expected, and said the deflationary process was “on track.” Gold also found support from rising tensions in the Middle East, after the Israeli military confirmed on Thursday that Yahya Sinwar, a top Hamas leader and a key target, had been killed in fighting, raising fears of a regional escalation.
Moreover, bullion prices rose as investors shifted away from riskier assets due to disappointing fiscal measures in China due to the ongoing property crisis and uncertainty surrounding the US presidential election.
However, strong economic data from the US limited gold’s upward momentum by strengthening the case for a less dovish stance from the Federal Reserve.
Gold rises amid rising geopolitical tensions in the Middle East
Gold rose in early Asian trading amid rising geopolitical tensions in the Middle East, which usually leads to demand for the precious metal as a safe-haven asset.
The price of gold is supported by “interest rate cuts by the US Federal Reserve and high levels of geopolitical tensions.”
“Now neutral to bullish” on gold for Q4 and Q1 and expects the price to trade in the $2,500-$2,800 range in the coming months. Spot gold was up 0.6% at $2,707.35 an ounce after earlier touching a record high of $2,708.09 an ounce
– Chinese shares rose on Friday after the central bank formally launched a swap facility aimed at boosting the stock market, although stocks elsewhere in Asia were mixed in the wake of data confirming a slowdown in the world’s second-largest economy.
Oil steady but on track for biggest weekly loss in over a month, with Brent trading at $77.00 and WTI at $73.00
U.S. crude oil futures rose on Thursday for the first time in five sessions after data from the U.S. Energy Information Administration showed that U.S. crude, gasoline and distillate inventories fell last week.
Brent and West Texas Intermediate are set to fall about 6% this week, their biggest weekly declines since Sept. 2, after OPEC and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025 and concerns eased about a possible Israeli retaliatory attack on Iran that could disrupt Tehran’s oil exports.
– While oil prices remained lower on Friday, there were signs of near-term stability after the market priced in fading geopolitical risks over the past week, said Yip Junrong, market strategist at IG.
“The recent surge in stronger-than-expected U.S. economic data provides further comfort on growth risks, but market participants are also watching for any recovery in demand from China, given the recent stimulus rollout,” he said in an email.
U.S. retail sales rose slightly more than expected in September, as investors continue to price in a 92% chance of the Federal Reserve cutting interest rates in November.
Meanwhile, third-quarter economic growth in China, the world’s largest oil importer, was at its slowest pace since early 2023, although September consumption and industrial production figures beat expectations.
U.S. crude oil futures rose on Thursday for the first time in five sessions after data from the U.S. Energy Information Administration showed that U.S. crude, gasoline and distillate inventories fell last week.
Brent and West Texas Intermediate are set to fall about 6% this week, their biggest weekly declines since Sept. 2, after OPEC and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025 and concerns eased about a possible Israeli retaliatory attack on Iran that could disrupt Tehran’s oil exports.
– While oil prices remained lower on Friday, there were signs of near-term stability after the market priced in fading geopolitical risks over the past week, said Yip Junrong, market strategist at IG.
“The recent surge in stronger-than-expected U.S. economic data provides further comfort on growth risks, but market participants are also watching for any recovery in demand from China, given the recent stimulus rollout,” he said in an email.
U.S. retail sales rose slightly more than expected in September, as investors continue to price in a 92% chance of the Federal Reserve cutting interest rates in November.
Meanwhile, third-quarter economic growth in China, the world’s largest oil importer, was at its slowest pace since early 2023, although September consumption and industrial production figures beat expectations.
-Bitcoin price is holding gains above the $67,000 resistance area. Bitcoin is now consolidating its gains and targeting further gains above the $68,350 resistance level.
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: 2713.81
Scenario 1: Buy gold with a break and stability above 2717.65, targeting 2724.08 and 2731.20
Alternative scenario: Sell gold with a break and stability below 2706.26 with a target price of 2699.82 and then 2691.98
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $70.39 per barrel
Scenario 1: Buy oil by breaking the $70.78 level, targeting $71.25 and then $71.82.
Alternative scenario: Sell oil with a break and stability by closing a candle below the $70.14 levels, targeting $69.58 and then $69.00.
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.08416
First scenario: Sell the EUR/USD by breaking 1.08268, targeting 1.08108 and then 1.07895.
Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.08495, targeting 1.08679 and then 1.08904.
Comment: Trading below the resistances and averages suggests a decline.
GBPUSD
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.30292
Scenario 1: Selling the pound dollar with a break and stability below the 1.30085 level, targeting the price of 1.29845 and then 1.29623
Alternative scenario: Buy GBP/USD with a break and hold at a buy close of 1.30386 with a target price of 1.30626 then 1.30913
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Upward
Interval: Half an hour (30 minutes)
Current price: 20406
Scenario 1: Buy Nasdaq with a break and hold with a close above 20493, targeting 20597 then 20715
Alternative scenario: Sell Nasdaq with break and hold with close below 20337 with target price of 20212 then 20105
Comment: Trading above the supports and averages suggests an upward trend.
Economic Calendar
(Times are in GMT+3)
There is no important economic data today.
Fundamental Analysis
The dollar index hit an 11-week high around 103.8 on Friday and was on track for a third straight weekly gain, supported by strong U.S. economic data and the so-called “Trump deal.” Data released on Thursday showed U.S. retail sales grew more than expected in September while the latest weekly jobless claims came in below expectations.
The dollar also found demand from the rising odds of Trump winning the upcoming election, as his policies on tariffs, taxes and immigration are seen as inflationary, which could prevent the central bank from cutting interest rates further.
Investors are now looking ahead to U.S. housing starts and building permits data on Friday, as well as fresh comments from Federal Reserve officials.
Externally, the dollar benefited from the euro’s weakness after the European Central Bank cut borrowing costs by 25 basis points for the third time this year.
Gold jumped above $2,700 an ounce on Friday, hitting a new record high, driven by global demand for safe-haven assets and expectations of further interest rate cuts by major central banks.
Crude oil futures steadied on Friday after strong U.S. retail sales data, but Chinese economic indicators remained mixed and prices were set for their biggest weekly loss in more than a month on demand concerns.
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