Bulls Positioned to Seize Control of EURNZD

Central Bank

Economic

Summary:

With the most recent low aligning with a significant support zone near 1.77512, this bounce from the support area suggests an increased likelihood of a reversal.

BUY EURNZD

Close Time

CLOSED

1.76388

Entry Price

1.80900

1.74100

1.84394 +0.00401 +0.22%

280.5

Pips

Profit

1.74100

1.79193

Exit Price

1.76388

Entry Price

1.80900

Fundamentals

The lower than expected inflation data from the Eurozone significantly contributed to the sharp decline in the region’s economic sentiment. The Harmonized Index of Consumer Prices (HICP) rose by 1.8% year-on-year in September, falling short of the 2.2% figure from the previous month and the 1.9% forecast. Core inflation also declined slightly, registering at 2.7% year-on-year, down from 2.8% in August, and below market expectations.

These numbers highlight that overall inflation has dropped below the European Central Bank's (ECB) 2.0% target, while core inflation is trending in that direction. This increases the likelihood of further rate cuts by the ECB, which in turn could lead to capital outflows and weaken the Euro.

Policymakers within the ECB who favor monetary easing are preparing to push for another interest rate cut next month, following a string of economic reports that have underperformed expectations. However, this initiative may encounter resistance from more conservative members of the governing council, according to reports from multiple sources.

Initially, ECB officials deemed a rate cut on October 17 unlikely after they had already reduced borrowing costs this month, citing subdued growth forecasts and expectations of a continued, albeit uneven, decline in inflation over the next year.

However, weak business activity in the Eurozone, combined with deteriorating German confidence data and a marked slowdown in wage growth, has empowered the "dovish" policymakers to advocate for further easing measures. This push is now seen as a real possibility in light of recent economic disappointments.

Last week, the Reserve Bank of New Zealand (RBNZ) held its Official Cash Rate (OCR) steady at 5.5%, marking the sixth consecutive meeting without a change. The decision reflects the central bank's efforts to curb inflation, which remains elevated despite some signs of easing. Near term pressures persist, driven by domestic factors and global influences such as rising oil prices. The RBNZ has indicated that it will maintain its restrictive stance until inflation is fully under control. However, markets are already factoring in the possibility of rate cuts later this year, depending on the trajectory of inflation.

The economic growth figures released this week painted a gloomy picture, with rising unemployment and soft consumer spending adding to the overall cautious outlook. Despite these indicators, inflationary pressures remain a priority for the central bank, which is wary of any premature loosening of policy.

Looking ahead, the RBNZ's monetary policy meeting is scheduled for next week, and markets have already priced in a high probability of a significant interest rate cut. Analysts from HSBC now expect the RBNZ to lower the OCR by 50 basis points in both October and November, revising their previous forecast of 25 basis point cuts each month. Bulls Positioned to Seize Control of EURNZD_1

Bulls Positioned to Seize Control of EURNZD_1

Technical Analysis

From a technical perspective, the EURNZD pair hit its yearly low for the second time on July 14, forming a potential double bottom as it revisited the price level last seen on December 20 of the previous year. Since then, the pair has not tested similar levels, with the most recent low aligning with a significant support zone near 1.77512. This bounce from the support area suggests an increased likelihood of a reversal.

The 100 period and 200 period moving averages are positioned just above the 1.7800 and 1.7850 levels, forming a tight range that could signal a period of consolidation. This setup increases the chances of a retracement from the lower end of the range. Fibonacci retracement levels of 0.50 and 0.618 lie within the resistance zone, with the 0.50 level near 1.8090, making this a key area to watch for potential upside targets.

Trading Recommendations

Trading direction: Buy

Entry price: 1.7642

Target price: 1.8090

Stop loss: 1.7410

Validity: Oct 13, 2024 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Eva Chen

Commodity

Economic

Summary:

Iran's missile strike against Israel has raised concerns over supply disruptions in the region, leading to an increase in oil prices. The sustainability of this price hike in the future will hinge on whether Israel retaliates against its military operations, infrastructure, or oil industry.

SELL WTI

Close Time

CLOSED

73.150

Entry Price

68.910

75.000

69.447 +0.305 +0.44%

185.0

Pips

Loss

68.910

75.012

Exit Price

73.150

Entry Price

75.000

Fundamentals

After a surge of 5% in international oil prices on Tuesday, the WTI crude oil futures for the near month increased by an additional 1.3% on Wednesday, reaching US$70.74 per barrel; meanwhile, Brent crude oil futures for the near month rose by 1.1%, totaling US$74.40 per barrel.

Iran's missile attacks on Israel have ignited concerns over potential supply disruptions in the region, further driving up oil prices. Ongoing conflicts could exert pressure on production in the area, raising global supply anxieties once again. The OPEC-JMMC meeting is currently taking place, which may provide insights into planned production adjustments in the region.

MARKET WATCH: Iran's missile strikes on Israel are challenging bearish sentiments regarding oil prices. However, the market has yet to fully account for the risks of further price increases resulting from attacks on Iranian oil facilities or a blockade of the Strait of Hormuz by Tehran. At the end of last month, due to fears of demand and overproduction, fund managers and hedge funds expressed their most pessimistic outlook on oil to date. OPEC+ is poised to restore greater production starting in December, while producers outside the alliance are also ramping up output, leading to significant volatility potential in the market.

We believe that the risk premium for crude oil will only rise when the market perceives a direct impact on energy infrastructure or flow due to escalating conflicts, or when Israeli attacks threaten critical infrastructure of regimes.

Additionally, the U.S. Energy Information Administration (EIA) will release its crude oil inventory report later today, which could influence trends in crude oil demand. A modest increase or decrease in inventory may reinforce investor confidence in sustained strong consumption, potentially driving crude oil prices higher. Conversely, a significant rise in inventory could indicate weakened purchasing power, resulting in a decline in crude oil prices.

Iran's Missile Attacks on Israel Test Bearish Outlook on Oil Prices_1

Technical Analysis

WTI crude oil experienced a significant increase in the last trading session, approaching a potential double bottom pattern in the 4H timeframe. The price is nearing the neckline around US$72.00, a break of which may confirm a subsequent reversal.

The upward structural pattern spans roughly between US$67.00 and US$72.00, suggesting that the ultimate upward trend could exhibit a similar magnitude. However, the 100 SMA remains below the 200 SMA, indicating that the path of least resistance is downward. Currently, the price is testing the dynamic pivot point of the 200 SMA.

If resistance remains intact, crude oil prices might retreat towards the recent low or even lower. Although the stochastic indicator has room to rise before reaching the overbought zone, the oscillators appear poised to soon reflect signs of bullish exhaustion.

The Relative Strength Index is still some distance from indicating overbought conditions, suggesting that prices may continue to rise along the stochastic indicator's rally. It is recommended to set the foundation.

Trading Recommendations

Trading Direction: Sell

Entry Price: 73.15

Target Price: 68.91

Stop Loss: 75.00

Deadline: October 17, 2024 23:55:00

Support: 70.31, 69.45, 68.92

Resistance: 72.19, 72.42, 73.69

Risk Warnings and Disclaimers

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Adam

Commodity

Summary:

On October 2, 2024, the price of gold (XAU/USD) was trading around $2,648/ounce, down from the resistance level of $2,660. The market is waiting for the US ADP employment report, which is expected to be the deciding factor in the next direction of gold...

SELL XAUUSD

Close Time

CLOSED

2643.00

Entry Price

2630.00

2660.00

2623.41 +28.97 +1.12%

170.0

Pips

Loss

2630.00

2660.01

Exit Price

2643.00

Entry Price

2660.00

Gold had a strong rally in late September, reaching a high of $2,685/ounce, but then corrected lower due to macroeconomic factors, including expectations of positive employment data from the US. This correction was consistent with a slight downtrend as gold failed to overcome strong resistance at $2,660.

Market psychology

Attention is now focused on the ADP report on the US labor market, due later in the day. This report could be a big determinant of the next trend of gold. If the jobs data exceeds expectations (120,000 jobs), gold could fall further due to pressure from a stronger USD. Conversely, if the data is weaker than expected, gold could receive support from safe-haven demand.

Investor sentiment is currently reflecting a slight bearish bias, with the majority of traders opting for short positions. According to data from exchanges, 60% of investors are holding short positions, while only 40% are holding long positions. This suggests that the market is somewhat inclined towards the possibility of gold continuing to correct lower, especially in the context of the US economic data released.

Detailed technical analysis

Gold is trading near the middle line of the Bollinger Bands, indicating bearish momentum as the price failed to sustain the upside momentum above $2,660. The Bollinger Bands are showing signs of a slight correction, with key support at $2,630 and further at $2,600 if the downtrend continues. Currently, the CCI indicator shows that gold is at a neutral level, with weak bullish signals. This means that selling pressure could increase if gold fails to hold the key support at $2,630. The 20 and 200 MAs are both showing a short-term bearish bias. In particular, the 200-day MA currently offers support at $2,640, and if gold breaks below this level, a deeper downside correction could occur with a further target at $2,594.

With the failure to break above the $2,660 resistance level, gold could continue to face bearish pressure in the short term. However, all eyes are now on the upcoming US economic data, which could provide a clearer indication of gold's next trend.

Trading Recommendations

Based on technical analysis and current market factors, a short-term sell strategy is proposed, with the forecast that gold may continue to correct downwards in the coming time.

Entry: $2644/ounce (currently or near support $2640).

Take Profit: $2630 (nearest support) and further $2600 if the downtrend continues.

Stop Loss: 2660 USD (break current resistance).

Risk factors include the upcoming ADP jobs report and rising geopolitical tensions in the Middle East, particularly conflicts between Israel and armed groups in the region.

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

WTI crude prices surged to $70.65 as geopolitical tensions in the Middle East, spurred by Iran's missile attacks on Israel, raised fears of supply disruptions.

BUY WTI

Close Time

CLOSED

72.001

Entry Price

78.000

70.600

69.447 +0.305 +0.44%

140.1

Pips

Loss

70.600

70.597

Exit Price

72.001

Entry Price

78.000

West Texas Intermediate (WTI) crude oil prices surged during Wednesday’s Asian session, reaching $70.65 per barrel as escalating geopolitical tensions in the Middle East heightened fears of supply disruptions. The spike in oil prices follows Iran's missile strikes on Israel, further fueling concerns about the stability of oil flows from the region. In addition to these geopolitical risks, the latest U.S. crude oil inventory data showed a smaller-than-expected decline, adding another layer of complexity to the market outlook.

Geopolitical Tensions Underpin WTI Price Surge

The primary driver of WTI's latest rally is the heightened risk of a broader conflict in the Middle East. Iran’s launch of over 200 ballistic missiles at Israel marked a significant escalation in regional tensions. Israeli Prime Minister Benjamin Netanyahu vowed to retaliate, raising fears of a potentially devastating conflict. Tehran, in turn, warned that any Israeli response could lead to "vast destruction," stoking concerns of a full-scale war. The situation has unnerved the market, particularly given Israel's veiled threats to target Iran’s oil infrastructure, a move that could severely disrupt global oil supplies.

The Middle East, especially the Persian Gulf region, remains a critical artery for global oil shipments. Any disruption in oil flows from Iran or other major producers in the region could have far-reaching consequences on the crude market. The prospect of war directly impacting oil facilities has rattled traders, pushing WTI prices higher as market participants brace for potential supply shocks.

U.S. Crude Inventories Fall Short of Expectations

Adding to the bullish momentum in WTI prices is the latest U.S. crude oil inventory data. According to the American Petroleum Institute (API), crude stockpiles in the U.S. declined by 1.5 million barrels in the week ending September 27. While the drop in inventories signals a tightening supply in the U.S., it fell short of market expectations. Analysts had anticipated a 2.1 million barrel draw, following the previous week’s decline of 4.339 million barrels.

Although the inventory report provided some support to crude prices, the smaller-than-expected draw has tempered enthusiasm. A more significant reduction would have likely sent WTI prices even higher. However, with the ongoing geopolitical concerns, the market is likely to remain sensitive to any supply-side developments, keeping prices elevated in the near term.

Fed Remarks Could Weigh on WTI

While geopolitical risks and supply concerns have provided strong support for crude oil prices, less dovish comments from Federal Reserve Chair Jerome Powell could act as a counterbalance. Powell indicated that while more rate cuts are likely on the horizon, the central bank is cautious about making swift changes to its monetary policy. This signals that the Fed may not rush into aggressive rate-cutting, which could slow economic growth and dampen oil demand.

Lower interest rates typically reduce the cost of borrowing, which in turn boosts demand for commodities like crude oil. However, Powell’s cautious tone suggests that the Fed may not ease monetary policy as aggressively as some market participants had hoped, potentially limiting upside potential for oil prices. Traders will be closely watching upcoming speeches from key Fed officials, including Thomas Barkin, Beth Hammack, Alberto Musalem, and Michelle Bowman, for any signs of a shift in the Fed’s stance. Hawkish comments from these officials could weigh on WTI, particularly if they signal a more conservative approach to future rate cuts.

Technical Analysis

From a technical perspective, the WTI price has breached the $71.95 level, a critical resistance point that, if maintained, reinforces the bullish outlook for the day. This breakout suggests that the bullish trend may continue, with the next target around $78.00, representing a key level of interest for traders looking to capitalize on the upward momentum.

However, the market remains highly sensitive to any developments that could shift the current bullish sentiment. If WTI fails to hold above $71.95, the price could come under negative pressure, potentially retesting the $70.44 level. This would mark a crucial juncture, as a failure to defend this support level could trigger further downside risk.

For the remainder of the day, the expected trading range is between $70.20 as the lower support and $73.20 as the upper resistance. The overall trend forecast remains bullish, but the market will need to maintain key levels to sustain this momentum.

TRADE RECOMMENDATION

BUY WTI

ENTRY PRICE:

Risk Warnings and Disclaimers

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Eva Chen

Forex

Economic

Summary:

Geopolitical tensions escalated, and the risk-averse sentiment boosted the U.S. dollar to outperform other currencies. GBPUSD rose slightly to 1.3300, but the technical outlook has not yet showed the recovery momentum.

BUY GBPUSD

Close Time

CLOSED

1.32888

Entry Price

1.36360

1.30700

1.25573 +0.00575 +0.46%

218.8

Pips

Loss

1.30700

1.30699

Exit Price

1.32888

Entry Price

1.36360

Fundamentals

Following the rise in opening prices this week, the U.S. dollar continued to strengthen on Tuesday, forcing the GBPUSD to decline. Escalating geopolitical tensions have heightened the market's risk-averse sentiment, propelling the dollar to outperform other currencies. Meanwhile, the report from the U.S. Bureau of Labor Statistics on Tuesday indicated that the number of job vacancies for August reached 8.04 million, surpassing July's 7.71 million and market expectations of 7.65 million, further bolstering the U.S. dollar.

The Automated Data Processing Company (ADP) is set to release its private sector employment report later today. Investors expect an increase of 120,000 jobs in the private sector, compared to an increase of 99,000 in August. Should the figures fall below 100,000, market participants may view Friday's non-farm payroll as unexpectedly disappointing, potentially placing downward pressure on the U.S. dollar. Conversely, if the data exceeds market expectations, it could help stabilize the U.S. dollar.

The next interest rate cut by the Federal Reserve will depend on the conditions of the labor market and inflation. Currently, core Personal Consumption Expenditures (PCE) are showing growth rates below 2% over three and six months. While wage inflation remains high, job growth is slowing. At this juncture, a more pronounced weakness in the labor market poses a greater risk to the economy than inflation.

The market is currently situated in an environment of moderately elevated inflation, capable of safely navigating this threshold; however, if the market sees a significant collapse in the labor market, it may pose a risk of recession. The Fed is actively striving to prevent such an occurrence.

Investors will also be closely monitoring headlines related to the crisis in the Middle East. Following Iran's launch of approximately 200 ballistic missiles, Israel has vowed to retaliate. Concurrently, the Israel Defense Forces have reinforced troop presence in Lebanon, resulting in the evacuation of 24 villages in southern Lebanon. The further escalation of geopolitical tensions may benefit the U.S. dollar through safe-haven capital flows, while long positions in the British pound (relative to other assets) could also outperform the broader market.

Technical Analysis

After a significant pullback on Tuesday, the GBPUSD reached 1.3302 on Wednesday, marking a 0.11% intraday increase; however, the Relative Strength Index in the 4H timeframe remains well below 50. Meanwhile, the oscillators' recent downward movement suggests that the market's downward correction has not yet concluded. Nonetheless, as long as the price stays above 1.3264, it will continue to test the resistance level at 1.3435, subsequently aiming for a high of 1.3636 seen in February 2022. Conversely, if it breaks the 20-day SMA, the market may move towards the 50-day SMA at 1.3060. A break below the psychological level of 1.3000 will challenge the mid-term upward trend line at 1.2910.

Overall, the GBPUSD has been in an upward trend since April, with only a drop below the 200-day SMA (currently around 1.2772) potentially shifting the outlook to a bearish stance. It is recommended to buy the dips.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.3220

Target Price: 1.3636

Stop Loss: 1.3070

Deadline: October 17, 2024 23:55:00

Support: 1.3264, 1.3223, 1.3151

Resistance: 1.3339, 1.3435, 1.3500

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

On October 2, 2024, the USD/JPY pair rose to 144.63 but is struggling at the resistance level of 144.53. Despite support from Japan's loose monetary policy and unclear signals from the Fed

SELL USDJPY

EXP

EXPIRED

144.630

Entry Price

143.600

145.380

156.302 -1.112 -0.71%

Pips

EXPIRED

143.600

146.718

Exit Price

144.630

Entry Price

145.380

The USD/JPY pair has gained significantly in recent sessions, thanks to the weakness of the Japanese Yen and signals from the US Federal Reserve (Fed). The Fed has signaled that it will not make aggressive interest rate cuts, while the Bank of Japan (BoJ) has maintained its accommodative monetary policy stance. This has created selling pressure on the Yen, causing USD/JPY to rise.

Despite positive signs from the Japanese economy, such as a strong manufacturing index, the Yen continues to weaken due to the government's caution on raising interest rates. Economic data from the US, such as the ADP labor report, may continue to influence the short-term trend of USD/JPY in the coming days.

Market psychology and economic factors

The current market sentiment shows uncertainty. Despite a slight recovery in the Yen due to some positive domestic economic data, investors are still concerned about the BoJ's policy. Meanwhile, factors such as US economic data and the global geopolitical situation continue to have a strong impact on the pair. Investors' anticipation of the results of upcoming economic reports from the US could change the market trend.

Detailed technical analysis

USD/JPY is hovering near the upper band of Bollinger Bands, indicating a potential downside correction. Strong resistance at 144.53 and 145.21 is creating strong selling pressure.

The Stochastic indicator is in the overbought zone (above 80), signaling that the market is likely to correct lower in the short term. This is a clear sign that traders need to be cautious if they want to open long positions at this point. Strong support levels are at 143.60 and 142.72. If USD/JPY fails to hold above these support levels, the downtrend could take the price to lower levels, such as 140.27 in the future.

Based on the technical analysis and current economic situation, a short-term sell strategy is recommended, especially when the USD/JPY pair is struggling at a strong resistance zone and technical indicators show bearish correction signals.

Trading Recommendations

Entry: 144.63 (near resistance).

Take Profit: 143.60 and 142.72 (major support levels).

Stop Loss: 145.38 (breaks strong resistance).

Risk Warnings and Disclaimers

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Alan

Commodity

Central Bank

Summary:

The impact of Iran's attack on Israel has pushed oil prices higher in the short term; China's crude oil consumption demand has decreased, and global crude oil demand has weakened, making it difficult to support a sustained upward trend in oil prices.

SELL WTI

Close Time

CLOSED

71.450

Entry Price

69.100

71.800

69.447 +0.305 +0.44%

35.0

Pips

Loss

69.100

71.801

Exit Price

71.450

Entry Price

71.800

Fundamentals

On October 1, WTI crude oil experienced a spike of nearly US$5 due to escalating tensions in the Middle East. This surge was primarily triggered by Iran's missile attack on Israel later that evening, which significantly heightened geopolitical tensions in the region. The market is concerned that oil supply from this area could be disrupted by the conflict, as Iranian oil production or export facilities may be at risk of damage, thereby raising fears of supply interruptions, a crucial factor driving up oil prices.

The Middle East is a key global oil supply region, and the increase in geopolitical risks tends to exert a substantial influence on oil prices. However, such factors primarily affect short-term price movements; the long-term trajectory of oil prices remains influenced by demand.

This year, the crude oil market demand has consistently fallen short of expectations, particularly with China traditionally playing a significant role as a key contributor to global oil consumption increases. There is a growing disparity in China's consumption trends compared to the same period last year. Against the backdrop of an earlier peak in Chinese oil consumption, the International Energy Agency has projected that oil demand is likely to experience sluggish growth for the foreseeable future, making it difficult to align with supply-side increases. In this scenario, maintaining elevated oil prices is unlikely, and a downward shift in price levels is a probable outcome.

Technical Analysis

In the 1D timeframe, the oil prices have yet to break through the critical resistance level of US$72.00, despite the recent events surrounding the Iranian attack on Israel. This indicates that there is significant resistance near the US$72.00 level, suggesting a lack of bullish momentum.

In the short-term trend, oil prices are currently consolidating at low levels without any clear directional movement. If prices confirm a downturn under the US$72.00 resistance, they may retrace to the lower boundary of the fluctuation range around US$65.00. If the oil prices effectively break above US$72.00, it would open up further upward potential; however, given the current oversupply in the crude oil market and weak demand, gains in oil prices seem challenging. The likelihood of an effective breakout above US$72.00 appears low. It is recommended to go short at the highs.

Trading Recommendations

Trading Direction: Sell

Entry Price: 71.40

Target Price: 69.10

Stop Loss: 71.80

Deadline: October 16, 2024 15:00:00

Support: 69.50, 69.00, 67.30

Resistance: 71.64, 72.19, 72.71

Risk Warnings and Disclaimers

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