Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

The dollar index held its recent advance around 101 on Tuesday, supported by sharp weakness in the euro after disappointing September PMI reports for the euro zone, Germany and France.

Gold hovers at record levels

The US Federal Reserve’s aggressive rate cut continued to boost the precious metal’s appeal, along with indications that the Fed could implement another 50 basis point cut by the end of the year.

Atlanta Fed President Boucek noted that inflation and labor market slack have advanced faster than expected, suggesting a monetary policy normalization sooner than previously thought.

Traders are now awaiting the personal consumption expenditures report due out this week and additional speeches by several Federal Reserve officials to gauge the central bank’s next move.

Meanwhile, gold’s status as a safe haven has been boosted by heightened tensions in the Middle East, following Monday’s Israeli strikes on Lebanon, the deadliest since the 2006 Israel-Hezbollah war.

-Gold may rise on dovish Fed comments, Middle East tensions-

Gold is likely to trade higher after dovish comments from some Federal Reserve policymakers,

-Amid rising geopolitical tensions in the Middle East. Chicago Federal Reserve Bank President Austan Goolsbee said there are “a lot of cuts” coming over the next 12 months,

-While Fed Chairman Neel Kashkari indicated that the actual path will depend on incoming data. At the same time, he says that concerns about a wider conflict in the Middle East are boosting demand for gold as a safe haven.

-Support for spot gold is seen at $2565-2604 per ounce and resistance at $2695-2738 per ounce.

Asian stocks rose to their highest in more than two-and-a-half years on Tuesday, boosted by sweeping stimulus measures from China, while expectations of further U.S. interest rate cuts kept risk sentiment high and the dollar under pressure.

Oil prices rise on new Chinese stimulus and Middle East tensions, with Brent crude trading at $74.00 and WTI at $71.00.

U.S. crude oil and gold futures closed lower on Monday as demand concerns dominated investors’ minds after disappointing business activity in the euro zone and ongoing concerns about fuel consumption in China.

“WTI crude rose this morning after China moved to cut its key lending rates. The crude market has been looking very closely to the Chinese authorities to take further easing measures to combat the economic slowdown,” said Tony Sycamore, market analyst at IG.

“Today’s announcement will go some way to removing the downside risks to crude oil prices,” Sycamore added.

China’s central bank has announced sweeping monetary stimulus measures and support for the property market to revive an economy that is suffering from strong deflationary pressures.

-The central bank governor Pan Gongsheng said the bank will cut banks’ reserve requirement ratios by 50 basis points and continue to cut key interest rates, with further policy easing planned later this year.

In the Middle East, the Israeli military said it launched air strikes on Hezbollah positions in Lebanon on Monday, which Lebanese authorities said killed 492 people and sent tens of thousands fleeing for safety in the country’s bloodiest day in decades.

Israel and Hezbollah, an Iran-backed group based in Lebanon, exchanged fire after thousands of walkie-talkies used by Hezbollah members exploded last week. Israel was widely blamed for the attack.

-Bitcoin price rose above the $63,500 resistance level. Bitcoin tested the $64,800 area and is currently correcting gains.

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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: 2627.12

Scenario 1: Buy gold with a break and stability above 2635.20, targeting 2641.63 and 2648.76

Alternative scenario: Sell gold with a break and stability below 2623.82 with a target price of 2617.37 and then 2609.54

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: $71.03 per barrel

Scenario 1: Buy oil by breaking the $71.34 level, targeting $71.81 and then $72.38.

Alternative scenario: Sell oil with a break and stability by closing a candle below the $70.71 levels, targeting $70.14 and then $69.56.

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

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EURUSD

 

General trend: Upward

Interval: Half an hour (30 minutes)

Current price: 1.11140

Scenario 1: Buy EUR/USD by breaking 1.11233, targeting 1.11418 and then 1.11642.

Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.11006, targeting 1.10846 and then 1.10633.

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

 

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GBPUSD

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: 1.33549

Scenario 1: Buy the pound dollar with a break and stability above the 1.33730 level, targeting the price of 1.33970 and then 1.34257.

Alternative scenario: Sell GBP/USD with a break and stability with a close below 1.33429, targeting 1.33189 and then 1.32967

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

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NAS100

 

Trend: Upward

Interval: Half an hour (30 minutes)

Current price: 20107

Scenario 1: Buy Nasdaq with a break and hold with a close above 20169, targeting 20272 then 20390

Alternative scenario: Sell Nasdaq with break and hold with close below 20012 with target price 19887 then 19780

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

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Economic Calendar

 

(Times are in GMT+3)

• RBA Interest Rate Decision (September) 7:30

• From the USA CB Consumer Confidence Index (September) 17:00
• Speech by the Governor of the Bank of Canada 19:55
  

 

Fundamental Analysis

 

 

The dollar index held its recent advance around 101 on Tuesday, supported by sharp weakness in the euro after disappointing September PMI reports for the euro zone, Germany and France.

In contrast, data released on Monday showed that U.S. private sector activity remained robust as strong services activity outweighed a deeper contraction in manufacturing.

Meanwhile, Atlanta Fed President Boucek said “the progress on inflation and the easing of the labor market have come much more quickly” than previously thought, supporting the case for “normalizing monetary policy sooner.” Minneapolis Fed President Kashkari said he expected smaller steps overall unless data changes materially.

Markets are now looking ahead to the personal consumption expenditures report, the Fed’s preferred inflation gauge, due later this week to further guide interest rate expectations.

Gold traded near $2,630 an ounce on Tuesday, hovering around record levels, as prospects of less restrictive monetary policy and rising geopolitical risks amplified support for safe-haven assets.

Oil prices rose on Tuesday on news of fresh monetary stimulus from China, the world’s biggest crude importer, and concerns that rising tensions in the Middle East could hit supplies from the key producing region, while a major hurricane loomed over the United States, the world’s biggest crude producer.