enDaily Analysis 26/07/2024
Latest Economic and Fundamental Insights
The dollar index held steady around 104.3 on Friday after experiencing increased volatility in recent sessions, as traders prepared for the latest personal consumption expenditures price index report, the Federal Reserve’s preferred inflation gauge.
Gold rises ahead of US inflation data but heads for weekly loss
“The precious metal is currently experiencing a cooling off period before prices start rising in the last quarter of this year,” said Sugandha Sachdeva, founder of New Delhi-based SS Wealth Street Research.
“With near-term support at $2,280, we believe gold could reach $2,680 by the end of this year as we start to see interest rate cuts,” she said, adding that the US presidential election and US-China trade tensions were key catalysts that could lead to a significant price rally.
– Markets will focus on Friday on US personal consumption expenditures data for June – the Federal Reserve’s preferred measure of inflation. The PCE data is due at 1230 GMT.
Data on Thursday showed the U.S. economy grew at a faster-than-expected pace in the second quarter, but inflation pressures eased, keeping expectations for an interest rate cut in September intact.
The appeal of non-yielding gold bullion tends to shine in a low interest rate environment.
Net imports by China, the world’s biggest gold consumer, via Hong Kong fell 18 percent in June from the previous month, data showed, as a recent surge in gold prices weighed on demand for jewellery.
-On the geopolitical front, US Vice President Kamala Harris pressed Israeli Prime Minister Benjamin Netanyahu to help reach a ceasefire agreement in Gaza, adopting a tougher tone than that used by President Joe Biden.
The yen held near a 12-week high against the dollar on Friday while Asia-Pacific stock markets remained in negative territory a day after their worst session since mid-April.
Oil continues to gain on strong US GDP data, with Brent trading at $82.00 and WTI at $77.00
Data showed on Thursday that the US economy grew at an annual rate of 2.8%, exceeding expectations of 2.1%, indicating strong activity in the world’s largest oil consumer.
However, there are still ongoing concerns about lower oil imports and refining activity in China due to slowing economic growth.
-Moreover, progress in ceasefire negotiations between Israel and Hamas would reduce supply threats, as President Joe Biden and Israeli Prime Minister Benjamin Netanyahu reportedly met urgently on Thursday, making reaching a ceasefire agreement their top priority.
Oil is expected to decline throughout the week, recording its third consecutive weekly loss.
-Bitcoin price found support near the $63,500 area. Bitcoin price is now rising and showing positive signs above the $65,500 resistance area.
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
Interval: Half an hour (30 minutes)
Current price: 2366.26 Scenario 1: Buy gold with a break and stability above 2376.09 with a target price of 2382.52 and 2359.65
Alternative scenario: Sell gold with a break and stability below 2364.71 with a target price of 2358.26 and then 2352.04
Comment: Trading above the supports and averages suggests an upward trend.
CRUDE OIL
Trend: Down
Interval: Half an hour (30 minutes)
Current price: $77.96 per barrel
Scenario 1: Sell oil with a break and stability by closing a candle below the $77.69 levels, targeting $77.16 and then $76.58.
Alternative scenario: Buy oil by breaking the $78.36 level, targeting $78.83 and then $79.40.
Comment: Trading below the resistances and averages suggests a decline.
EURUSD
General trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.08521
Scenario 1: Sell the EUR/USD by breaking 1.08449, targeting 1.08290 and then 1.08077.
Alternative scenario: Buy the EUR/USD with a break and hold with a candle closing above 1.08677, targeting 1.08861 and then 1.09086.
Comment: Trading below the resistances and averages suggests a decline.
GBPUSD
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 1.28614
Scenario 1: Selling the pound dollar with a break and stability below the level of 1.28425, targeting the price of 1.28227 and then 1.28003
Alternative scenario: Buy the pound dollar with a break and hold with a close above 1.28860, targeting 1.29046 and then 1.29268
Comment: Trading below the resistances and averages suggests a decline.
NAS100
Trend: Down
Interval: Half an hour (30 minutes)
Current price: 19092
Scenario 1: Selling the Nasdaq with a break and stability with a close below 19044 with a target price of 18987 then 18936
Alternative scenario: Buy Nasdaq with break and hold with close above 19146 price 19215 then 19295
Comment: Trading below the resistances and averages suggests a decline.
Economic Calendar
(Times are in GMT+3)
-From USA Core PCE Price Index (YoY) (June) 15:30
-From USA Core PCE Price Index (MoM) (June) 15:30
-From Canada General Government Budget (YoY) (April) 18:00
Fundamental Analysis
The dollar index held steady around 104.3 on Friday after experiencing increased volatility in recent sessions, as traders prepared for the latest personal consumption expenditures price index report, the Federal Reserve’s preferred inflation gauge.
The U.S. economy expanded at a faster-than-expected 2.8% pace in the second quarter, led by accelerating consumer demand, but remained below the 2021-23 average of 3.1%, a preliminary reading showed on Thursday.
Price pressures also eased in the fourth quarter, while the latest initial jobless claims came in roughly in line with expectations.
Markets still price in a 100% chance of the Fed cutting rates in September, with at least one more cut expected before the end of the year.
The dollar was steady against most major currencies, but remained under pressure on the yen amid bets on a Bank of Japan interest rate hike next week.
Gold was on track for a weekly loss, even as prices steadied on Friday ahead of a key U.S. inflation reading that could offer further clues on when the Federal Reserve will cut interest rates.
West Texas Intermediate crude oil futures rose toward $78.5 a barrel on Friday, extending gains from the previous session, driven by better-than-expected U.S. economic data.
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