Daily Market Analysis

Latest Economic Insights

• Key Headlines:
• The dollar steadies above 101 and is heading toward gains for a second consecutive week at its strongest levels in around two months.
• Markets are pricing a probability approaching 67% for a further US rate hike in October with the economic data remaining strong.
• Long-term US bond yields rise to historic levels and increase the pressure on gold.
• Gold is trading near $4,270 and is heading for a weekly loss exceeding 2%.
• Brent crude is trading near $105 and West Texas near $92 with an interim agreement between the United States and Iran awaited.
• Bitcoin faces important resistance near $84–85 thousand amid a clear rise in liquidations.

Fundamental Analysis

• The Dollar and Monetary Policy
  • The dollar index steadied above the 101 level on Friday after rising for four consecutive sessions, trading close to its strongest levels in around two months and heading toward achieving gains for a second consecutive week.
  • The dollar’s support came from the strength of the US economic data and the rise in oil prices, which revived concerns over the continuation of inflation and reinforced expectations that the Federal Reserve may need to continue tightening monetary policy after last week’s rate hike.
  • Markets currently point to a probability approaching 67% for a further rate hike in October, while John Williams affirmed that the Federal Reserve still has additional work to do to control inflation, and Anna Paulson indicated that some further tightening may be justified.
  • The labour market data also supported the dollar, after initial unemployment benefit claims fell unexpectedly to 197 thousand claims, the lowest level in two months, which reflects the continued resilience of the US labour market.
  • At the same time, the yields on 10-year and 30-year US Treasury bonds rose to their highest levels since 2007 and 2004 respectively, which reinforced the appeal of the dollar and pressured gold and assets that are sensitive to interest rates.

• Gold:
  • Gold traded near $4,270 per ounce on Friday and was on track to record a weekly loss exceeding 2%, affected by the strength of the dollar and the significant rise in Treasury yields.
  • The increase in the probabilities of a US rate hike in October also led to continued pressure on the metal, as high yields make income-generating assets more attractive compared with gold, which offers no periodic return.
  • On the other hand, gold may receive some support if oil prices continue to retreat as a result of progress in the US-Iranian talks, because a decline in energy could ease inflation concerns and reduce the need for further monetary tightening.

• Oil:
  • Brent crude traded near $105 per barrel, while West Texas Intermediate moved near $92, with the recent upward wave halting amid reports of US-Iranian talks to reach an interim agreement.
  • The reports point to efforts under Qatari mediation on the sidelines of the United Nations General Assembly meetings to reach an agreement that may allow the gradual reopening of the Strait of Hormuz in exchange for an easing of the US blockade on Iranian ports.
  • On the other hand, Iran is holding to maintaining its control over the Strait of Hormuz and is demanding an easing of the military pressure and the blockade, while Washington affirmed that it remains open to negotiations without abandoning its current position.
  • The geopolitical risks are still in place after the Houthis launched missiles toward Saudi cities including Yanbu and Taif, and therefore oil remains sensitive to any diplomatic progress or new military escalation.

• Bitcoin
  • Bitcoin is facing a main resistance area near $84–85 thousand, where supply from long-term holders is appearing, while the $83 thousand level remains important in determining the strength of the trend during the weekly close.
  • A weekly close above $83 thousand is viewed as a factor supporting the continuation of the upward momentum, while losing this area could increase the risks of a retreat toward $77 thousand.
  • On the other hand, if the price manages to move past the $84–85 thousand resistance and hold it, the area between $95 thousand and $97 thousand stands out as a potential next technical station.
  • The derivatives market witnessed elevated volatility, with around 81,461 traders liquidated over 24 hours for a total approaching $339.15 million, which confirms the market’s continued sensitivity to leverage and rapid price movements.

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

• From Canada, Government Budget Balance 18:00

GOLD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 4,279.15
• First scenario: Buy on a break above 4,294.66
• Targets: 4,326.43 then 4,361.58
• Alternative scenario: Sell on a break below 4,253.15
• Targets: 4,218.97 then 4,186.23
• Note: Gold is moving in a downward trend and is trading below the main moving averages. A break above 4,294.66 supports a shift in the movement toward an upward correction, while a break below 4,253.15 makes a continuation of the decline toward the next support levels more likely.

CRUDE OIL

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 93.95
• First scenario: Buy on a break above 95.05
• Targets: 96.76 then 98.67
• Alternative scenario: Sell on a break below 92.91
• Targets: 91.06 then 89.29
• Note: Oil is moving in a downward trend and is trading below the main moving averages. A break above 95.05 supports a shift in the movement toward an upward correction, while a break below 92.91 makes a continuation of the decline toward the next support levels more likely.

EURUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 1.13813
• First scenario: Buy on a break above 1.13930
• Targets: 1.14209 then 1.14562
• Alternative scenario: Sell on a break below 1.13608
• Targets: 1.13264 then 1.12971
• Note: The euro is moving in a clear downward trend and is trading below the main moving averages. A break above 1.13930 supports a shift in the movement toward an upward correction, while a break below 1.13608 makes a continuation of selling pressure toward the next support levels more likely.

GBPUSD

• Trend: Bearish
• Timeframe: 30 minutes
• Current price: 1.32235
• First scenario: Buy on a break above 1.32392
• Targets: 1.32722 then 1.33086
• Alternative scenario: Sell on a break below 1.32030
• Targets: 1.31676 then 1.31337
• Note: The pound is moving in a clear downward trend and is trading below the main moving averages. A break above 1.32392 supports a shift in the movement toward an upward correction, while a break below 1.32030 makes a continuation of selling pressure toward the next support levels more likely.

NAS 100

• Trend: Bullish
• Timeframe: 30 minutes
• Current price: 30,612.34
• First scenario: Buy on a break above 30,674.84
• Targets: 30,807.59 then 30,932.79
• Alternative scenario: Sell on a break below 30,368.15
• Targets: 30,243.41 then 30,033.64
• Note: The index is moving in an upward trend and is trading above the main moving averages. A break above 30,674.84 supports a continuation of the upward momentum toward the next resistance levels, while a break below 30,368.15 makes entry into a downward corrective move toward the next support levels more likely.