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Market analysis
Date - 06th, November, Wednesday, 2024
01 - Key News Insights
Daily Digest
Daily Digest
BREAKING: US ELECTION RESULTS UPDATE
Donald Trump wins Georgia, leads in Pennsylvania, Wisconsin, Michigan- Republican Trump adds 17 seats, Democrat Harris was able to accumulate only a single more- Trump is moving faster towards the 270 milestone and Harris is leaving behind- Donald Trump wins Georgia, leads in Pennsylvania, Wisconsin, Michigan
Inflation Hedge Demand: Previously, speculation around a Trump presidency fueled demand for gold as a hedge against inflation, driven by his promise to increase trade tariffs, which could raise long-term inflation.
Fed’s Rate Cut Expectation: The Federal Reserve’s anticipated 25 basis-point rate cut, expected on Thursday, is seen as potentially supportive for gold by lowering the opportunity cost of holding non-interest-bearing assets.
Key Points
Election Influence on Gold: The U.S. election’s tight race has stirred uncertainty, impacting gold through dollar strength and inflation concerns.
Fed’s Rate Decision Impact: The upcoming rate cut could provide short-term support for gold, offsetting some pressure from a strong dollar by making gold relatively more attractive.
The Dollar Index (DXY)
Dollar rockets higher as election results come in favor of Trump.
DXY increased to a 14-week high of 105.25 while writing this report.
Over the past 4 weeks, the Dollar Index gained 2.08%, and in the last 12 months, it decreased 0.89%.
EUR/USD
EUR/USD continues to decline, holding near 1.0700, down nearly 1.50%, as markets focus on the U.S. presidential election outcome.
With polls closed in most states, including key battlegrounds, Republican nominee Donald Trump is leading, fueling market expectations.
Trump’s lead is supporting the U.S. dollar’s surge, contributing to the weakness in the euro.
GBP/USD
GBP/USD Weakens: The GBP/USD currency pair loses ground as market sentiment shifts due to increased support for Donald Trump in upcoming elections, which raises uncertainty around U.S. policies.
Trump Ahead in Polls: Prediction platforms show former President Donald Trump leading Vice President Kamala Harris, signaling a possible Republican victory that could influence market sentiment.
02 - Economic Calender
03 - Previous Day Performance
04 - Instructions/Guidelines for executing suggested trade
- Close your trades within 8-10 hours or before 6:30 PM UTC (midnight IST), regardless of profit/ loss.
- By chance, if you face losses in your “Primary Trade”, the “Alternative Call” is designed to recover those losses.
- That’s why, always place the “Alternative call” alongside the “Primary Call”.
- In case the “Alternative or Recovery Call” doesn’t get triggered the same day, a new call (or signal) will be provided the following day.
- Generally, the Global Market Outlook Report includes signals with a higher reward-to-risk ratio (from 2:1 and higher).
- Therefore, consider booking partial profits in steps as follows:
For example, if the reward is two times the risk (or 2:1), consider booking half (or 50%) of the profit when levels reach a 1:1 ratio, and maintain the remaining position.Then, when prices reach twice the risk (2:1), book the remaining 50% position.
To make this process seamless and smooth, consider placing two calls simultaneously with the same Stop-Loss (SL) and Entry-Level but different Target-Levels.
Note: These guidelines aim to optimize your trading strategy while managing risks effectively.
05 - Gold Analysis
Overview:. Gold’s primary trend is bullish, but in shorter time frame it has identified trend has changed with the head and shoulder pattern and currently prices at the support 2732-2700 which is also known as the neckline of the pattern and prices has taken correction and selling pressure could be seen.
Biasness: Gold price (XAU/USD) comes under intense selling pressure heading into the European session on Wednesday and dives to the $2,700 neighborhood, or a nearly three-week low in the last hour. Trump victory triggers sharp USD rally and prompting aggressive selling around the commodity.
Key Levels: R1- 2755 R2- 2770
S1-2732 S2- 2700
Technical Analysis: RSI at 50 approaching bearishness and 50 day moving avg also suggesting bearishness candles currently forming below the EMA and so sellers may plan for there entry.
Data Releases: 30 year bond auction is due for the day with the previous figure 4.39%
Alternative Scenario: If gold price moves down or breaches the immediate support level at 2732 then bearishness can be expected.
While writing the report, gold is trending at 2730
06 - Crude Oil
Overview: The major trend of Oil is bullish. On the 1-hour chart, oil dropped from the 73.00 level, which acted as a psychological resistance point. If oil breaks below the support level of 70.50, it could continue to decline further.
Biasness: Oil prices dropped by over 1% on Wednesday. This happened because the U.S. dollar strengthened as markets anticipated that Republican candidate Donald Trump might win the presidential election, though the results were still very close. Another factor in the price drop was a larger-than-expected increase in U.S. crude oil stocks.
Key Levels: R1: 72.00 R2:72.50
S1: 70.00 S2: 69.50
Indicator: Oil prices are currently trading below the middle Bollinger band at 71.90, indicating weakness. Prices may fall to test the 70.00 level.
Data Release: Traders are eyeing U.S. crude oil inventory data and election results. A larger-than-expected inventory increase (above 0.30 million barrels) could signal oversupply, likely pushing oil prices down due to anticipated excess supply over demand.
Alternative Scenario: If Oil breaches an immediate resistance mark of 72.00 and trade above the middle Bollinger band, then a short term bullish view can be expected.
While writing the report, Oil is trading at 70.70
07 - GBP USD
Overview: The primary trend on the daily chart is uptrend making higher highs and higher lows. On H4 chart, the prices has fall between at the support 1.2896 which also serves as support. Now the prices have hovering around support therefore traders may go short till next support.
Biasness: GBP/USD is trading with steep losses near 1.2850 in European trading on Wednesday. A potential Donald Trump presidency has revived the Trump trades, lifting the US Dollar across the board at the expense of the Pound Sterling.
Key Levels: R1: 1.2976 R2: 1.2998
S1: 1.2848 S2: 1.2887
Indicator: The prices are above the 50 EMA and RSI is weakening at 38 showing selling pressure.
Macro-Economic Factors: 30 year bond auction is due for the day with the previous figure 4.39%
Alternative Scenario: The prices should break the resistance at 1.2976 and candle should close above 50 EMA then traders can go long from the immediate resistance level.
While writing the report, the pair is trending at 1.2898
08 - Disclaimer
- CFD trading involves substantial risk, and potential losses may exceed the initial investment.
- Signals and analysis are based on historical data, technical analysis, and market trends.
- Past performance does not guarantee future results; market conditions can change rapidly.
- Consider your risk tolerance and financial situation before engaging in CFD trading.
- Signals are for informational purposes only and not financial advice.
- Each trader is responsible for their decisions; trade at your own risk.
- The report does not consider individual financial situations or risk tolerances.
- Consult with financial professionals if uncertain about the risks involved.
- By accessing this report, you acknowledge and accept the terms of this disclaimer.
Safe trading,
Market Investopedia Ltd
