Daily Market Analysis

 

 

Latest Economic and Fundamental Insights

 

The dollar index held around 100.4 on Monday, hovering near a 14-month low, after weak U.S. economic data bolstered expectations of further interest rate cuts by the Federal Reserve.

Gold dips but dovish Fed puts it on track for best quarter since 2016

-Last week, both the PCE and core PCE prices rose slightly by 0.1%, with the core index rising less than the 0.2% forecast.

Meanwhile, personal spending has declined, and income growth has slowed unexpectedly.

Fed Funds futures indicate markets are betting on a 54% chance of another 50 basis point rate cut in November.

The prospect of further rate cuts by the Federal Reserve, coupled with dovish expectations from global central banks, is boosting the appeal of holding non-yielding gold.

Moreover, additional monetary stimulus from China and the growing risk of a wider conflict in the Middle East are enhancing this appeal.

Gold rises on Fed rate cut, Middle East tensions

Gold rose in early Asian trading. The U.S. Federal Reserve’s larger-than-expected 50 basis point interest rate cut boosted the precious metal’s appeal.

Gold typically has an inverse relationship with interest rates, with lower interest rates enhancing the appeal of non-interest-bearing bullion.

-Apart from the interest rate cuts, rising geopolitical tensions in the Middle East also contributed to gold’s appeal, citing the recent outbreak of war between Israel and Hezbollah. Spot gold rose 0.2% to $2,664.02.

Asian stock markets were mostly higher on Monday as China announced more stimulus measures, although the Nikkei fell on concerns that Japan’s new prime minister favors normalizing interest rates.

Oil prices rise amid fears of Middle East conflict as Israel escalates attacks, with Brent crude trading at $72.00 and WTI at $68.00

Last week, Brent crude fell about 3%, while West Texas Intermediate crude fell about 5% as concerns about demand grew after fiscal stimulus from China, the world’s second-largest economy and largest oil importer, failed to reassure market confidence.

But prices were supported on Monday by the prospect of a widening conflict in the Middle East with Iran, a major producer and member of the Organization of the Petroleum Exporting Countries (OPEC), after Israel intensified its attacks on Hezbollah and Iranian-backed Houthi militias.

Oversupply is a major concern in oil markets, but markets are widely concerned about an escalation of the crisis in the Middle East that could lead to supply cuts from key producing regions, said Priyanka Sachdeva, senior market analyst at Philip Nova.

-Israel said it struck Houthi targets in Yemen on Sunday, widening its confrontation with Iran’s allies two days after Hezbollah leader Sayyed Hassan Nasrallah was killed in an escalating conflict in Lebanon.

– US Defense Secretary Lloyd Austin has given the military the green light to bolster its presence in the Middle East, and the Pentagon said Sunday that if Iran or its partners or proxies target American personnel or interests, Washington “will take all necessary action to defend our people.”

In the context of the decisive Israeli strike on Hezbollah, oil prices will remain driven by supply and demand dynamics, according to Tony Sycamore, market analyst at IG.

He said that in light of the end of OPEC+ voluntary supply cuts on December 1, West Texas Intermediate crude may test its 2021 lows in the range of $61 to $62 per barrel.

-Bitcoin price rose above the $66,000 level, and now Bitcoin is correcting the gains below the $65,500 level and may continue moving towards the $64,000 level.

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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: 2656.16

Scenario 1: Buy gold with a break and stability above 2663.31, targeting 2669.74 and 2676.87

Alternative scenario: Sell gold with a break and stability below 2651.93, targeting 2645.48 and then 2637.65

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: $68.71 per barrel

Scenario 1: Buy oil by breaking the $69.22 level, targeting $69.22 and then $70.26.

Alternative scenario: Sell oil with a break and stability by closing a candle below $68.55 levels, targeting $68.02 and then $67.44

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: 1.11618

Scenario 1: Buy EUR/USD by breaking 1.11744, targeting 1.11929 and then 1.12153.

Alternative scenario: Sell the EUR/USD with a break and stability with a candle closing below 1.11517, targeting 1.11357 and then 1.11144.

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: 1.33842

Scenario 1: Buy the pound dollar with a break and stability above the level of 1.34016, targeting the price of 1.34257 and then 1.34543.

Alternative scenario: Selling the pound dollar with a break and stability with a close below 1.33716, targeting 1.33475 and then 1.33253

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: 20165

Scenario 1: Buy Nasdaq with a break and hold with a close above 20263, targeting 20366 then 20485

Alternative scenario: Sell Nasdaq with break and hold with close below 20106 with target price 19982 then 19875

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

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Economic Calendar

 

(Times are in GMT+3)

-From Germany Consumer Price Index (YoY) & (MoM) (September) 11:00

From Germany German CPI (MoM) (September) 15:30

From the United States of America, Federal Reserve Chairman Powell speaks at 20:55

Fundamental Analysis

 

 

The dollar index held around 100.4 on Monday, hovering near a 14-month low, after weak U.S. economic data bolstered expectations of further interest rate cuts by the Federal Reserve.

The core personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, rose just 0.1% in August, missing expectations for a 0.2% gain, while the 2.7% annual increase was in line with estimates.

Personal income and spending also came in weaker than expected last month.

Meanwhile, the latest weekly jobless claims report pointed to resilience in the labor market.

Investors are now looking to this week’s September jobs report for further guidance.

Markets remain divided on whether the Fed will cut interest rates by 50 basis points in November or opt for a smaller 25 basis point cut.

The dollar also came under pressure from riskier currencies after China announced a series of stimulus measures last week, boosting expectations in the world’s second-largest economy.

Gold prices fell on Monday but remained hovering near a record high hit last week, putting bullion on track for its best quarter in more than eight years after a sharp U.S. interest rate cut and expectations of another big cut in November.

Oil prices rose on Monday, supported by mounting concerns about potential supply pressures from Middle East producers following increased Israeli attacks on Iranian-backed forces in the region.