enDaily Analysis 28/05/2024
Latest Economic and Fundamental Insights
-The dollar index fell below 104.5 on Tuesday, falling for the third straight session, as investors braced for the US personal consumption expenditures price index report due later this week for clues about the path of the Federal Reserve’s monetary policy.
-Gold is stable as focus shifts to US inflation data
-US Personal Consumption Expenditure data is scheduled to be released on Friday
-Traders expect about a 62% chance of interest rate cuts by Vietnam’s central bank in November to halt local gold auctions.
“A very strong dollar picture supported by a change in US monetary policy stance as the Fed starts looking for clues to start raising interest rates instead of easing could pose a major risk as we could see more corrective movement in spot gold.”
Analysts added that in the short term, spot gold is still leaning more towards the positive side rather than the downside, and the $2,310 level is a key short-term support for this week.
The core personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation, is scheduled for release on Friday.
Fed meeting minutes released last week showed that the policy response, for now, will include keeping the benchmark interest rate at its current level but also reflects discussions about the potential for further hikes.
Traders’ bets have indicated growing doubts that the US central bank will cut interest rates more than once in 2024, and currently expects a roughly 62% chance of a rate cut by November according to the CME FedWatch tool. (Fedwatch)
Bullion is known as an inflation hedge, but rising interest rates increase the opportunity cost of holding non-yielding gold.
-The Chinese yuan declines as markets await global inflation data
German inflation data due on Wednesday and the broader euro zone reading on Friday will be watched for confirmation of the ECB’s expected interest rate cut next week and for clues on how quickly the central bank can come in for subsequent easing.
Oil rises thanks to expectations of demand for American fuel ahead of the OPEC+ meeting, with Brent crude trading at $82.00 and West Texas Intermediate crude at $77.00.
Oil prices rose more than 1 percent today, Monday, in quiet trading due to public holidays in Britain and the United States, after a pessimistic week characterized by the outlook for US interest rates in the face of stable inflation.
Some analysts said that expectations of strong demand for fuel with the start of the driving season and summer holidays in the United States provided support for prices.
-Bitcoin price rose above the $70,000 level. BTC is now holding gains above support and may be aiming for another rally in the near term.
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: bullish
Time interval: half an hour (30 minutes) Current price: 2344.55
The first scenario: Buy gold at a break and hold above 2349.54, with a target price of 2355.97 and 2363.10.
Alternative scenario: sell gold at a break and hold below 2338.16, with a target price of 2331.71 and then 2325.48.
Comment: Trading above supports and averages suggests an upward trend
CRUDE OIL
Trend: bearish
Time interval: half an hour (30 minutes)
Current price: $78.60 per barrel
The first scenario: Buying oil at a break and holding steady by closing the candle at the highest level at $78.94, targeting a price of $79.41, then 79.97. Alternative scenario: Buying oil at a break of $78.26, targeting a price of $77.74, then 77.16.
Comment: Trading above supports and averages suggests an upward trend
EURUSD
General trend: bullish
Time interval: half an hour (30 minutes)
Current price: 1.08767
The first scenario: Buying Eurodollars at a break of 1.08876, targeting a price of 1.09061, then 1.09285.
Alternative scenario: sell the euro/dollar at a break and hold firm by closing the candle below 1.08649, targeting the price of 1.08489 then 1.08276.
Comment: Trading above supports and averages suggests an upward trend
GBPUSD
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: 1.27756
The first scenario: Buying the pound dollar at a break and stability above the level of 1.27931, targeting the price of 1.28217, then 1.28439.
Alternative scenario: sell the pound/dollar at a break and hold firm by closing below 1.27596, targeting a price of 1.27398 then 1.27174.
Comment: Trading above supports and averages suggests an upward trend
NAS100
Trend: bullish
Time interval: half an hour (30 minutes)
Current price: 18914
The first scenario: Buy the Nasdaq at a break and hold steady with a close above 18973, targeting the price of 19043 then 19123.
Alternative scenario: sell Nasdaq at a break and hold steady by closing below 18872, price 18815, then 18764.
Comment: Trading above supports and averages suggests an upward trend
Economic Calendar
(Times are in GMT+3)
From the United States of America CB Consumer Confidence Index (May) 17:00
Fundamental Analysis
The dollar index fell below 104.5 on Tuesday, falling for the third straight session, as investors braced for the US personal consumption expenditures price index report due later this week for clues about the path of the Federal Reserve’s monetary policy.
The dollar rose last week, as strong US economic data weighed on sentiment about interest rate cuts.
Minutes from the Fed’s latest meeting also showed that some officials would be willing to tighten policy further if inflation rises again.
Since then, markets have fallen short of expectations for the start of the easing cycle from September to December this year.
Markets are also awaiting inflation numbers in Germany and the Eurozone this week which may boost expectations of an interest rate cut from the European Central Bank next week.
On Monday, European Central Bank officials indicated they may start cutting interest rates in June, while data showed German business sentiment stagnated in May.
The dollar fell across the board, with selling activity most evident against the Australian and New Zealand dollars.
Gold prices stabilized on Tuesday, with the dollar falling, while investors looked to key US inflation data that could provide clues about the extent to which the Federal Reserve (US central bank) can cut interest rates.
Oil prices rose in Asian trading on Tuesday, extending the previous session’s gains, supported by expectations of strong fuel demand from the United States during the summer, ahead of a production policy decision from OPEC+ at the June 2 meeting.
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