Date - 10th, October, Thursday, 2024
01 - Key News Insights
Fed Meeting Minutes Reveal Division:
- FOMC minutes revealed a divide among policymakers on whether to cut rates by 50 bps or 25 bps.
- Some members favor caution due to the lack of clear signs of easing inflation, despite the labor market’s resilience.
Rate Cut Expectations:
- Markets currently price in an 83% probability of a more modest 25 basis point rate cut in November, following last week’s strong US jobs report, further dampening hopes for aggressive rate cuts.
Geopolitical Tensions:
- Despite the pressure from rising US Treasury yields and a strong dollar, gold’s safe-haven appeal remains supported by concerns over escalating violence in the Middle East.
Fed Minutes Show Division:
- The minutes from the Federal Reserve’s September meeting revealed a split among policymakers over the pace of rate cuts. However, they ultimately agreed on a 50 bps reduction to balance inflation concerns with labor market risks.
Rate Cut Expectations Adjusted:
- Following last week’s strong US jobs report, traders have reduced their expectations for aggressive rate cuts. Markets now assign an 83% probability of a 25 bps cut in November, with little chance of a larger 50 bps cut.
The Dollar Index (DXY)
- The dollar index remained around 102.9 on Thursday, its highest level in nearly two months.
- Investors awaited the September CPI report, which could impact the Federal Reserve’s November rate decision.
- The dollar maintained gains against most major currencies but pulled back slightly versus the New Zealand dollar, likely due to a technical correction.
EUR/USD
- EUR/USD struggles to attract any meaningful buyers amid a bullish USD.
- The overall situation appears to strongly support bearish traders, suggesting that prices may go down.
- Investors are waiting for the US CPI report to come out before making new investments.
GBP/USD
- GBP/USD is rising slightly as the US dollar remains stable, but the increase looks like it may be capped.
- Expectations for more aggressive policy easing from the Bank of England are putting pressure on the GBP, especially with a strong US dollar.
- Bulls appear hesitant as they wait for Thursday’s release of the US consumer inflation figures.
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 after hitting an all-time high, Prices become bearish and continuously falling currently prices at 2615 and breach the previous support and tested the lower trend line of the bearish channel so may be price will gain the strength soon if price bounce back above the 2630.
Biasness: Gold price bounces off a multi-week low amid subdued USD price action on Thursday. Bets for a regular 25 bps Fed rate cut in November should keep a lid on the XAU/USD. Investors now look to the release of the US CPI report for a fresh directional impetus.
Key Levels: R1-2630 R2- 2650
S1-2600 S2- 2590
Technical Analysis: RSI is below 50 approaching bearishness and 50 day moving avg suggesting bearishness if RSI above 50 so bullishness could be expected.
Data Releases: US CPI and initial job claims data is due for the day with 30 year note auction and federal budget balance so market could be volatile.
Alternative Scenario: If gold price moves down or breaches the immediate support level at 2600 then bearishness can be expected.
While writing the report, gold is trending at 2615
06 - Crude Oil
Overview: Oil prices went up on Thursday because fuel demand increased as a big storm hit Florida. There are also worries about possible supply problems in the Middle East due to rising tensions between Israel and Iran, which produces a lot of oil.
Biasness: Crude oil prices are rising. On the 1-hour chart, prices have bounced back from the 72.00 level. If oil goes above 74.50, it could continue to rise even more.
Key Levels: R1: 74.50 R2:75.00
S1: 72.00 S2: 71.50
Indicator: Crude oil prices are currently above the middle Bollinger band at 73.60, indicating strength in the market. Prices might rise further to test the upper Bollinger band at 74.50.
Data Release: Traders are looking forward to the release of initial jobless claims and Consumer Price Index (CPI) data today.
Alternative Scenario: If Oil breaches an immediate support level of 72.00, and trade below the middle Bollinger band then prices may fall.
While writing the report, Oil is trading at 74.00
07 - GBP USD
Overview: The primary trend on the daily chart is bullish making higher highs and lower lows. The H1 chart shows the market consolidating within a range between 1.3105 and 1.3058, which now acts as resistance and support levels. Traders should remain cautious as the market is consolidated. Traders may go long till resistance.
Biasness: GBP/USD trades below 1.3100 in European trading on Tuesday, stalling its recovery from multi-week lows. A modest USD downtick lends support to the pair but China’s economic woes-led dour mood checks gains. BoE- and Fed-speak are in focus.
Key Levels: R1: 1.3105 R2: 1.3135
S1: 1.3058 S2: 1.3032
Indicator: RSI is approaching buying zone.
Macro-Economic Factors: Traders are awaiting US CPI data and initial jobless claims data.
Alternative Scenario: Prices should break the support at 1.3058 and candles should be formed below 9 EMA then traders can go short.
While writing the report, the pair is trending at 1.3077
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
