Daily Market Analysis

Latest Economic Insights

Key Headlines:

• The dollar rises to near 99.22 as the probability of a rate hike this week reaches around 86%–87%.
• US inflation remains elevated and reinforces expectations of Federal Reserve tightening.
• Gold is trading near $4,334 under pressure from higher yields and rate hike expectations.
• Brent crude is near $107.82 and West Texas near $103.22.
• The disruption of the Saudi East-West pipeline increases the risks of a shortage in global supplies.
• Bitcoin is trading near $76,700 with outflows continuing and the CLARITY Act awaited.

Fundamental Analysis

• The Dollar and Monetary Policy
  • The dollar index rose to near 99.22 on Monday, with the Federal Reserve meeting approaching and the probability of a rate increase of 25 basis points this week rising to around 86%–87%.
  • The support came after the recent US inflation data, as the consumer price index rose 0.4% on a monthly basis and 3.4% on an annual basis, while the producer price index rose 0.4% monthly and 5.4% annually, which confirmed the continuation of inflationary pressures.
  • The yield on two-year US Treasury bonds also held near 4.61% after rising strongly last week, which provided additional support to the dollar and returned pressure to non-yielding assets.
  • At the same time, the rise in oil prices above $100 represents an additional risk to inflation, and may make it difficult for the Federal Reserve to adopt a less hawkish stance during the coming months.

• Gold:
  • Gold traded near $4,334 per ounce after recording a third consecutive weekly loss, with the continuation of the pressure resulting from the rise in bond yields and growing expectations of a US rate hike.
  • Despite the continuation of the geopolitical risks and their role in supporting demand for safe havens, the effect of yields, the dollar and interest rate expectations remains the stronger factor ahead of the Federal Reserve’s decision on Wednesday.

• Oil:
  • Brent crude rose to around $107.82 per barrel, while West Texas Intermediate reached around $103.22, with concerns escalating over supplies after the temporary shutdown of the Saudi East-West pipeline.
  • A continuation of the pipeline’s disruption could threaten up to around 4% of global oil supplies, coinciding with the continued risks to vessel movement in the Strait of Hormuz and Bab el-Mandeb, which keeps the geopolitical risk premium elevated.

• Bitcoin
  • Bitcoin traded near $76,700 with the continuation of the pressure resulting from higher interest rate expectations and yields, coinciding with US Bitcoin funds recording four consecutive sessions of net outflows totalling around $463 million.
  • The market is awaiting the procedural vote in the Senate on the CLARITY Act, where the bill needs 60 votes to move to the discussion stage, while the return of positive flows to exchange-traded funds will be an important factor in restoring the upward momentum.

Today’s Economic Data (GMT+3 / KSA time)

• From Canada, Consumer Price Index (MoM) (August) 15:30
• From Canada, Median Consumer Price Index (YoY) (August) 15:30
• From Canada, Trimmed Consumer Price Index (YoY) (August) 1

GOLD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 4,321.11
• First scenario: Buy on a break above 4,350.93
• Targets: 4,373.32 then 4,397.82
• Alternative scenario: Sell on a break below 4,312.71
• Targets: 4,293.88 then 4,269.38
• Note: Gold is still under selling pressure and is trading below the main moving averages. A break above 4,350.93 supports an extension of the upward correction, while a break below 4,312.71 makes a resumption of the downward trend toward the next support levels more likely.

CRUDE OIL

• Trend: Bullish
• Timeframe: 30 minutes
• Current price: 100.91
• First scenario: Buy on a break above 101.67
• Targets: 102.81 then 103.90
• Alternative scenario: Sell on a break below 99.72
• Targets: 98.72 then 97.65
• Note: Oil is holding the bullish trend and is trading above the main moving averages. A break above 101.67 supports a resumption of the upward wave, while a break below 99.72 makes an extension of the downward correction toward the next support areas more likely.

EURUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 1.15515
• First scenario: Buy on a break above 1.15718
• Targets: 1.15842 then 1.16008
• Alternative scenario: Sell on a break below 1.15409
• Targets: 1.15290 then 1.15162
• Note: The euro is moving below the main moving averages with selling pressure continuing. A break above 1.15718 supports a shift in the movement toward an upward correction, while a break below 1.15409 makes a resumption of the decline toward the next support levels more likely.

GBPUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 1.34886
• First scenario: Buy on a break above 1.35073
• Targets: 1.35224 then 1.35378
• Alternative scenario: Sell on a break below 1.34803
• Targets: 1.34694 then 1.34573
• Note: The pound is still under selling pressure and is trading below the main moving averages. A break above 1.35073 supports an extension of the upward correction, while a break below 1.34803 restores selling pressure and opens the way for a continuation of the decline.

NAS 100

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 28,944.39
• First scenario: Buy on a break above 29,059.95
• Targets: 29,166.92 then 29,283.74
• Alternative scenario: Sell on a break below 28,875.51
• Targets: 28,764.84 then 28,648.03
• Note: The index is still under selling pressure and is trading below the main moving averages. A break above 29,059.95 supports an extension of the upward correction, while a break below 28,875.51 makes a resumption of the downward trend more likely.