Daily Market Analysis

Latest Economic Insights

• Key Headlines:
• The dollar steadies near 100.3 and close to its highest levels since late July, with the hawkish tone of Federal Reserve officials continuing.
• Remarks from Federal Reserve officials reinforce the probabilities of further interest rate increases to control inflation.
• Gold is trading near $4,350 under pressure from expectations of continued US monetary tightening.
• The decline in oil prices for four consecutive sessions eases part of the inflation concerns and relatively supports gold.
• Brent crude is trading near $101 and West Texas near $93 with energy flows improving and diplomatic efforts increasing.
• Bitcoin is witnessing strong volatility with widespread liquidations of positions and mixed flows into exchange-traded funds.

Fundamental Analysis

• The Dollar and Monetary Policy
  • The dollar index steadied near the 100.3 level on Tuesday and remained close to its highest levels since late July, supported by the continuation of hawkish remarks from Federal Reserve Board officials and growing expectations that the interest rate hike cycle has not yet ended.
  • Chicago Federal Reserve Bank President Austan Goolsbee said that the central bank cannot ignore repeated and persistent shocks on the supply side, while St. Louis Federal Reserve Bank President Alberto Musalem indicated that further interest rate increases may be necessary to return inflation to the target.
  • The Federal Reserve raised interest rates last week for the first time in three years and signalled the possibility of further tightening during the coming period, while markets are awaiting today the remarks of John Williams and Tom Barkin for additional signals regarding the interest rate path.
  • On the other hand, the decline in oil prices for four consecutive sessions helped ease some inflation concerns, with diplomatic efforts to end the conflict in the Middle East increasing and energy flows from the region continuing.

• Gold:
  • Gold traded near $4,350 per ounce on Tuesday, continuing the previous session’s losses with the continuation of the pressure resulting from the hawkish remarks of Federal Reserve officials and the probabilities of further interest rate increases.
  • On the other hand, the decline in oil prices provides some support for the metal, as it eases the risks of energy-related inflation and partially reduces the need for faster tightening of monetary policy.
  • Gold also continues to benefit over the broader term from central bank purchases, geopolitical risks, concerns related to fiscal sustainability and the decline in the value of currencies, but the direction of the dollar and yields remains the strongest factor in the short term.

• Oil:
  • Brent crude traded near $101 per barrel, while West Texas Intermediate moved near $93, with prices continuing to retreat amid receding concerns related to supplies and growing hopes of achieving diplomatic progress in the Middle East.
  • President Donald Trump said that he may be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly meetings, coinciding with expected talks with a number of Gulf state leaders.
  • At the same time, Saudi Arabia moved crude oil through the Strait of Hormuz at a rate approaching 2.9 million barrels per day during the past six days, while satellite images showed the presence of giant tankers with a total capacity of around 14 million barrels at Saudi export terminals, which helped ease concerns over supplies.

• Bitcoin
  • Bitcoin witnessed strong volatility with widespread liquidations of leveraged positions, as the value of Bitcoin-related liquidations over 24 hours ranged between around $360 million and $421 million, with the liquidation of short positions clearly dominating.
  • The price also moved past an important liquidation area for short positions between $82 thousand and $86 thousand during the 21 September session, which led to forced covering of short positions and contributed to accelerating the upward move during the session.
  • On the institutional side, Bitcoin funds recorded limited weekly net flows of around $6.1 million after strong swings between outflows and inflows, which indicates that institutional demand still exists but is less stable than in previous periods.
  • Bitcoin’s movement remains tied to a large degree to the direction of the dollar, bond yields and global liquidity, while the return of strong institutional flows will be an important factor in confirming the sustainability of the upward momentum.

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

• There is no important economic data listed for today.

GOLD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 4,341.28
• First scenario: Buy on a break above 4,363.47
• Targets: 4,383.22 then 4,418.37
• Alternative scenario: Sell on a break below 4,309.94
• Targets: 4,275.76 then 4,243.02
• Note: Gold is moving under selling pressure after losing the support area and the short moving averages. A break above 4,363.47 supports a shift in the movement toward an upward correction, while a break below 4,309.94 makes a continuation of the decline toward the next support levels more likely.

CRUDE OIL

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 95.08
• First scenario: Buy on a break above 96.08
• Targets: 97.80 then 99.70
• Alternative scenario: Sell on a break below 93.95
• Targets: 92.10 then 90.33
• Note: Oil is moving in a downward trend and is trading below the main moving averages despite the recent rebound. A break above 96.08 supports an extension of the upward correction, while a break below 93.95 makes a resumption of the decline toward the next support levels more likely.

EURUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 1.14707
• First scenario: Buy on a break above 1.14904
• Targets: 1.15183 then 1.15536
• Alternative scenario: Sell on a break below 1.14582
• Targets: 1.14239 then 1.13946
• Note: The euro is moving below the main moving averages with the general trend remaining under selling pressure. A break above 1.14904 supports a shift in the movement toward an upward correction, while a break below 1.14582 makes a resumption of the decline toward the next support levels more likely.

GBPUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 1.33805
• First scenario: Buy on a break above 1.33952
• Targets: 1.34281 then 1.34645
• Alternative scenario: Sell on a break below 1.33589
• Targets: 1.33235 then 1.32896
• Note: The pound is still under selling pressure and is trading below the main average. A break above 1.33952 supports an extension of the upward correction, while a break below 1.33589 restores selling pressure and opens the way for a continuation of the decline.

NAS 100

• Trend: Bullish
• Timeframe: 30 minutes
• Current price: 30,501.07
• First scenario: Buy on a break above 30,672.55
• Targets: 30,805.30 then 30,930.50
• Alternative scenario: Sell on a break below 30,379.42
• Targets: 30,211.46 then 30,001.69
• Note: The index is moving with strong upward momentum after a clear upward wave. A break above 30,672.55 supports a continuation of the advance toward the next resistance levels, while a break below 30,379.42 makes the start of a downward correction more likely.