Date - 12th, September, Thursday, 2024
01 - Key News Insights
Fed Rate Cut Outlook:
- A more aggressive Fed policy easing now seems less likely, resulting in a modest increase in US Treasury yields and boosting the US Dollar. The stronger dollar, nearing its monthly peak, puts pressure on gold as it makes the non-yielding metal less attractive to investors.
- US Inflation Insights: Underlying inflation in the US rose more than expected in August, signaling persistent price pressures. Headline inflation slowed for the fifth consecutive month, easing concerns about runaway inflation. Traders are awaiting the US producer inflation (PPI) data on Thursday for additional clarity on the rate outlook.
Fed Governor’s Remarks:
- Federal Reserve Rate Cut Outlook: Markets now assign an 86% probability of a 25 basis point (bps) rate cut at next week’s Fed meeting. A larger 50 bps cut is now seen as highly unlikely, with only a 14% chance.
Geopolitical Tensions:
- Political Influence; US Presidential Debate:
- The debate between Kamala Harris and Donald Trump raised the odds of a Harris victory.
- This increased pressure on the dollar, which has been bolstered by expectations of more tariffs and fiscal spending under a potential Trump administration.
The Dollar Index (DXY)
- DXY started the day with a gap-up opening, tested highs at fib level 0.0 (101.85). However, minor corrections are visible from intraday highs.
- The dollar index traded above 101.7 on Thursday, near a three-week high.
EUR/USD
- The European Central Bank is expected to cut key rates by 25 bps at the September policy meeting.
- ECB President Christine Lagarde’s presser and updated economic forecasts will be closely scrutinized for fresh policy cues.
- The ECB policy announcements are set to inject volatility around the EUR/USD pair.
GBP/USD
- The Pound Sterling edges slightly up against the US Dollar, but a decline in bets that the Fed will opt for a large rate cut keeps the downside bias afloat.
- Investors see the BoE leaving interest rates unchanged at 5% at its September meeting.
- Market participants await the US PPI report for August.
USD/JPY
- EUR/JPY builds on the overnight recovery from a one-month low amid a modest JPY weakness.
- An unexpected fall in Japan’s PPI, along with a positive risk tone, undermines the safe-haven JPY.
- Bets for another BoJ rate hike in 2024 should cap the cross ahead of the key ECB policy decision.
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 on the H4 chart, consolidating between 2532 and 2480. Multiple rejections at both resistance and support suggest sideways movement. A break above resistance could signal an upward move, while a breach of support may indicate a reversal.
Biasness: Gold remains sideways but dipped during the CPI data release. It is now nearing key resistance at 2530. If this level isn’t breached, prices could drop further, with potential selling down to the 2416 support level.
Key Levels: R1- 2530 R2- 2545
S1-2500 S2- 2490
Primary Driver of Gold: Gold price (XAU/USD) has trimmed some of its intraday gains but remains comfortably above the $2,500 psychological level during the early European session on Thursday.
Technical Analysis: The 12 EMA and 26 EMA are both bullish, indicating an uptrend, and the MACD signal line supports further downside. Candles are currently forming below both the EMAs.
Data Releases: Trader are waiting for initial jobless data for the day positive figure is expected so it might favor USD and weaken golds price.
Alternative Scenario: If gold price moves down or breaches the 2500 level then bearishness can be expected.
While writing the report, gold is trending at 2514.10
06 - Crude Oil
Overview: The major trend of Oil is bearish. Oil prices went up during Asian trading on Thursday because there are worries that Hurricane Francine might disrupt oil production in the U.S., which is the largest oil producer in the world. However, concerns about lower oil demand are limiting how much prices can rise.
Biasness: On the 1-hour chart, oil prices have recovered from the 66.00 level and have recently broken through the resistance at 67.50. This upward movement suggests that prices may continue to rise and could potentially reach the 69.00 level.
Key Levels: R1: 69.00 R2:69.50
S1: 67.50 S2: 67.00
Indicator: Oil prices are currently trading above the middle Bollinger Band at 67.50, indicating bullishness. Prices may break this level to test 69.00 level.
Data Release: Traders await Initial jobless claims today. If the data comes in more than expected(227k), it may negatively impact USD and oil prices may rise.
Alternative Scenario: If Oil breaches an immediate support mark of 67.50 and trade below the middle Bollinger band, then a short term bearish view can be expected.
While writing the report, Oil is trading at 68.40
07 - GBP USD
Overview: The primary trend on the daily chart is bearish. The prices on H1 chart are in the range of 1.3058 to 1.3010 which also serves as Resistance and support. As prices are moving in a range, it may test the support, therefore traders can go short till immediate support level
Biasness: GBP/USD is bouncing back from three-week lows, trading around 1.3050 on Thursday morning in Europe. The pair is supported by steady risk-taking in the market and a pause in the US Dollar’s rise after the CPI report. Attention is now on the upcoming US PPI inflation data.
Key Levels: R1: 1.3049 R2: 1.3058
S1: 1.3010 S2: 1.3001
Indicator: RSI is below 50 showing selling pressure. Traders can wait for the candles to go above or below the 9 EMA for further confirmation to go long or short.
Macro-Economic Factors: Traders are awaiting US PPI Data and initial jobless claims.
Alternative Scenario: Prices should break the resistance at 1.3058, and candles should start to form above 9 EMA then traders may go long from that level.
While writing the report, the pair is trending at 1.3047
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
