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3 December 2024,06:00
Daily Market Analysis
3 December 2024, 06:00
*The dollar continued to strengthen as the dollar was bolstered by the upbeat PMI readings yesterday.
*The ceasefire deal violation between Israel and Hezbollah may stimulate safe-haven gold.
*BTC faced selling pressure as the BTC dominance reading continued to slide.
Market Summary
The dollar posted modest gains yesterday, bolstered by President-elect Trump’s remarks threatening BRICS and stronger-than-expected U.S. PMI data, which supported the greenback. However, the dollar faces key challenges ahead, including Wednesday’s job data, the Fed’s Beige Book, and Friday’s Nonfarm Payroll report. In contrast, weaker-than-expected PMI readings in the UK and Eurozone weighed on the pound and the euro, dampening their performance.
In the commodity market, gold remains under pressure from the strengthening dollar. However, escalating geopolitical tensions in the Middle East—amid reports of Israeli airstrikes in Lebanon and retaliatory actions by Hezbollah—could renew demand for the safe-haven asset. Oil prices, meanwhile, remain subdued as traders focus on Thursday’s OPEC+ meeting, where an extension of supply cuts is widely anticipated.
In the cryptocurrency market, Bitcoin faced selling pressure as its dominance waned, while altcoins saw notable gains, continuing their recent upward momentum.
Current rate hike bets on 18th December Fed interest rate decision:
Source: CME Fedwatch Tool
0 bps (40.4%) VS -25 bps (59.6%)
Market Movements
DOLLAR_INDX, H4
The Dollar Index rebounded, supported by President-elect Donald Trump’s threats to impose 100% import tariffs on BRICS nations unless they abandon plans for a joint currency or alternatives to the US Dollar for international trade. The BRICS alliance, comprising Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the UAE, has been exploring de-dollarization to reduce dependence on the US Dollar as a reserve currency.
The Dollar Index is trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 52, suggesting the index might extend its gains since the RSI stays above the midline.
Resistance level: 106.85, 108.05
Support level: 105.80, 104.45
Gold prices rebounded amid renewed concerns over trade uncertainties after President-elect Donald Trump announced additional tariffs on BRICS nations. With the inclusion of major economies such as China, the proposed tariffs heighten fears of retaliatory actions, which could lead to increased market volatility. Additionally, US Treasury yields dipped, further bolstering gold’s appeal as a safe-haven asset. Moving forward, geopolitical developments and Trump’s trade policies will likely drive gold price movements.
Gold prices are trading higher while currently testing the resistance level. MACD has illustrated diminishing bearish momentum, while RSI is at 50, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline.
Resistance level: 2650.00, 2705.00
Support level: 2610.00, 2550.00
The GBP/USD pair tumbled to its recent low of 1.2620, pressured by multiple bearish factors. The UK PMI readings, released yesterday, fell below the 50-mark, signaling economic contraction and weighing heavily on the pound. Meanwhile, the dollar gained support from stronger-than-expected U.S. PMI data and bold remarks from President-elect Donald Trump, further intensifying downward pressure on the pair.
The GBP/USD continues to slide from its recent peak near the 1.2750 mark; a break below the 1.2620 mark may be a trend reversal signal for the pair. The RSI has slid to below the 50 level while the MACD has a deadly cross on the above, suggesting that the bullish momentum is easing.
Resistance level:1.2700, 1.2790
Support level: 1.2620, 1.2505
The EUR/USD pair appears to be easing from its recent downtrend, following pressure from heightened political instability in France. Concerns over opposition efforts to unseat the government and contentious budget debates have weighed heavily on the euro. Additionally, lackluster Eurozone PMI data, which failed to exceed market expectations, pushed the pair toward recent lows. From a technical perspective, a break below the short-term support level at 1.0470 could signal further bearish momentum for the pair.
After the pair broke below its uptrend support level, the pair declined by nearly 1%, suggesting a bearish bias for the pair. The RSI has slid to below the 50 level while the MACD is on the brink of breaking below the zero line, suggesting a bearish momentum is forming.
Resistance level: 1.0520, 1.0610
Support level: 1.0440, 1.0325
The Japanese yen has been trading with a strong bullish bias since mid-November, bolstered by growing market expectations of a potential rate hike by the Bank of Japan (BoJ) in December. The upcoming interest rate decision, set for December 19, has gained attention as recent job and inflation data have reinforced the likelihood of a policy shift. These factors have positioned the yen as one of the strongest-performing currencies in the market.
The USD/JPY pair is now testing its critical support level at the 149.50 mark; a break below such a level shall be a bearish signal for the pair. The RSI has been kept below the 50 level while the MACD is flowing at the bottom, suggesting that the pair remain trading with bearish momentum.
Resistance level: 151.75, 154.20
Support level: 149.50, 146.40
Nasdaq reached record highs, driven by strong performance in tech stocks. Intel Corporation (NASDAQ: INTC) reversed gains to close below the flatline following CEO Pat Gelsinger’s resignation amid criticism of his handling of the company’s AI strategy. In contrast, Super Micro Computer Inc (NASDAQ: SMCI) saw a surge of more than 28%, buoyed by a clean audit report and optimism surrounding its AI server growth. Tesla Inc (NASDAQ: TSLA) climbed over 3%, supported by an upgrade from Roth MTM and expectations of favorable outcomes from CEO Elon Musk’s relationship with Trump.
Nasdaq is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 65, suggesting the index might extend its gains since the RSI stays above the midline.
Resistance level: 21170.00, 21955.00
Support level: 20395.00, 19860.00
Oil prices remained steady as optimism over stronger demand stemming from a rise in Chinese factory activity was offset by concerns that the Federal Reserve may hold off on cutting interest rates at its December meeting. A private survey showed China’s manufacturing expanded at its fastest pace in five months, signaling recovery in industrial activity. However, last week’s over 3% drop in crude prices was driven by easing supply concerns from the Israel-Hezbollah conflict and forecasts of a potential oil surplus in 2025, even as OPEC+ continues its production cuts.
Oil prices are trading lower while currently testing the support level. However, MACD has illustrated diminishing bearish momentum, while RSI is at 45, suggesting the commodity might experience technical correction since the RSI rebounded sharply from oversold territory.
Resistance level: 69.60, 71.30
Support level: 68.00, 66.85
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4 December 2024, 04:41 Oil Jumps Ahead of OPEC Meeting
3 December 2024, 06:00 Upbeat U.S. PMI Boost Dollar
2 December 2024, 06:02 Dollar Gain as Trump Warns BRICS
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