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21 November 2024,05:27
Daily Market Analysis
21 November 2024, 05:27
*Russia-Ukraine tension deteriorated and pushed gold higher in the last session.
*The U.S. dollar regains strength ahead of the Initial Jobless Claims due today.
*BTC continues to break record highs and is not far from the $100,000 mark.
Market Summary
The financial market’s focus remains locked on escalating tensions in Eastern Europe after Ukraine launched long-range British missiles into Russian territory, significantly heightening geopolitical risks. This development has intensified demand for safe-haven assets, with gold rallying over 3% since the start of the week. Analysts expect the bullish momentum in gold prices to persist as relations between the two nations further deteriorate.
Meanwhile, in the U.S. stock market, sentiment soured following Nvidia’s disappointing earnings report, which fell below market expectations. The news dragged down the tech-heavy Nasdaq index, exacerbated by the broader geopolitical uncertainty.
In the forex market, the U.S. dollar regained strength after a temporary pullback driven by profit-taking. Renewed optimism stems from expectations of a more measured pace of Federal Reserve rate cuts. Markets are now eyeing the U.S. job data due today, which could offer key insights into the Fed’s December interest rate decision.
In the crypto market, Bitcoin (BTC) continues its meteoric rise, breaking all-time highs and nearing the $95,000 mark. Optimism surged following reports that Trump’s social media company plans to acquire a crypto trading firm, signalling potential mainstream adoption and further growth in the digital asset space.
Current rate hike bets on 18th December Fed interest rate decision:
Source: CME Fedwatch Tool
0 bps (32.2%) VS -25 bps (67.8%)
Market Movements
DOLLAR_INDX, H4
The Dollar Index remained flat as the market absorbed the effects of the U.S. Presidential election. While economic data due later this week may influence the dollar’s trajectory, geopolitical uncertainties, including the escalating Russia-Ukraine war, could provide near-term support for the safe-haven greenback. Investors remain cautious, balancing economic indicators against geopolitical risks.
The Dollar Index is trading flat while currently testing the support level. MACD has illustrated diminishing bearish momentum. However, RSI is at 48, suggesting the index might extend its losses after breakout since the RSI stays below the midline.
Resistance level: 107.00, 107.80
Support level: 106.05, 105.15
Gold prices extended gains as escalating tensions in the Russia-Ukraine war drove investors toward safe-haven assets. Ukraine’s use of long-range missiles to strike Russian military targets marked a significant shift in the conflict, prompting Moscow to escalate its nuclear rhetoric. North Korean troops bolstering Russian forces and President Zelenskiy’s calls for additional Western military aid have further intensified the situation. These developments, alongside Putin’s resistance to diplomatic talks, have heightened global uncertainty, bolstering gold’s appeal as a hedge against geopolitical risks.
Gold prices are trading higher following the prior breakout above the previous resistance level. MACD has illustrated diminishing bullish momentum. However, RSI is at 64, suggesting the commodity might extend its gains since the RSI stays above the midline.
Resistance level: 2660.00, 2710.00
Support level: 2605.00, 2555.00
The GBP/USD pair has reached its previous high and is now testing a short-term resistance level near the 1.2710 mark. If the pair successfully breaks above this level, it would indicate a bullish signal, potentially paving the way for further gains. The UK’s CPI reading, scheduled for release today, is anticipated to show an increase compared to the prior month. A higher-than-expected CPI could boost the Pound, supporting its strength and adding momentum to the pair’s upward trajectory.
GBP/USD has rebounded from its recent low level and is trading in a higher-high price pattern, suggesting a potential trend reversal for the pair. The RSI is ticking higher while the MACD is moving toward the zero line from below, suggesting that the bearish momentum is easing.
Resistance level: 1.2800, 1.2950
Support level: 1.2615, 1.2474
The EUR/USD pair is showing signs of a potential trend reversal as it rebounds from recent lows, now attempting to break through its next resistance level. The recent Eurozone CPI reading aligned with market expectations, hitting the ECB’s 2% target, which has supported the euro’s strength. Should the U.S. dollar continue to ease in the upcoming sessions, the pair could maintain a bullish trend, supported by both technical momentum and eurozone fundamentals.
EUR/USD has rebounded; a break above its next resistance level at 1.0610 may be a bullish signal for the pair. The RSI is edging higher while the MACD is about to break above the zero line, suggesting the bearish momentum is vanishing.
Resistance level: 1.0680, 1.0785
Support level: 1.0525, 1.0440
The AUD/USD pair is extending its rally from recent lows, approaching a potential breakout above its next resistance level at 0.6550. This upward momentum is bolstered by hawkish RBA meeting minutes released yesterday, reinforcing the Australian central bank’s commitment to its current monetary tightening path, which has strengthened the Aussie dollar. Additionally, the pair is benefiting from a softer U.S. dollar, providing further support for an upward move.
The pair has gained by more than 1% from its recent low level this week, suggesting a bullish bias. The RSI has broken above the 50 level while the MACD is on the brink of breaking above the zero line, suggesting that the bullish momentum is forming.
Resistance level: 0.6550, 0.6610
Support level: 0.6500, 0.6420
US equity market closed higher, underpinned by Nvidia’s (NASDAQ: NVDA) 4% surge ahead of its earnings report. As a bellwether for AI demand, Nvidia’s performance is expected to set the tone for tech stocks in the coming days. However, broader market gains were capped by investor concerns over rising geopolitical tensions. The ongoing Russia-Ukraine conflict, coupled with Putin’s heightened nuclear threat, limited risk appetite despite the tech-driven rally.
Nasdaq is trading higher following the prior rebound from the support level. MACD has illustrated diminishing bearish momentum, while RSI is at 51, suggesting the index might extend its gains since the RSI stays above the midline.
Resistance level: 21105.00, 21955.00
Support level: 20395.00, 19860.00
Oil prices edged higher as traders weighed the restart of production at Norway’s Johan Sverdrup oilfield against escalating geopolitical tensions. Russia’s updated nuclear doctrine, which lowers the threshold for a nuclear response to conventional attacks, has added to market jitters. Ukraine’s strikes on Russia’s oil infrastructure, enabled by American long-range missiles, could further disrupt Moscow’s output. These risks, combined with OPEC’s production strategies, are keeping oil prices supported despite near-term supply stabilization.
Oil prices are trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 58, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline.
Resistance level: 69.90, 72.60
Support level: 66.90, 65.55
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21 November 2024, 05:27 Gold Extends its Gain as Geopolitical Tension Heighten
20 November 2024, 05:29 Gold Gain on Russia-Ukraine Tension
19 November 2024, 05:44 Oil Rally on Russia-Ukraine Heighten Tension
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