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4 December 2024,04:41
Daily Market Analysis
4 December 2024, 04:41
*The U.S. dollar traded sideways ahead of the ADP Nonfarm Employment change data.
*The French political issue is easing and shall provide buoyancy for the euro.
*Oil jumped in the last session ahead of the OPEC+ meeting with the speculation of an extension for oil production cut.
Market Summary
The U.S. dollar held steady in the last session, with the dollar index (DXY) hovering near the 106.45 resistance level. The JOLTs job openings data exceeded market expectations at 7.744 million, yet investors adopted a cautious stance ahead of Friday’s critical Nonfarm Payrolls (NFP) report.
Meanwhile, the euro recorded modest gains as political uncertainty in France eased, with market sentiment suggesting the crisis is nearing resolution. In contrast, the Australian dollar faced significant pressure during the Sydney session after disappointing GDP figures raised speculation of an accelerated monetary policy shift by the Reserve Bank of Australia (RBA).
In the commodity market, gold traded sideways, constrained by a lack of clear catalysts. However, oil prices surged sharply as markets anticipated the December 5 OPEC+ meeting. The world’s largest oil cartel is expected to extend supply cuts into the first quarter of 2024, a move likely to bolster crude prices further.
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 remained flat but saw a slight rebound following the release of the US jobs report. Data from the Department of Labor revealed that JOLTs Job Openings rose significantly to 7.744M, surpassing market expectations of 7.510M and the previous reading of 7.372M. This stronger-than-expected data highlights resilience in the US labor market, just days before the November Nonfarm Payrolls report on Friday.
The Dollar Index is trading higher following the prior rebound from the support level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 51, suggesting the index might experience technical correction since the RSI retraced from overbought territory.
Resistance level: 106.85, 108.05
Support level: 105.80, 104.45
Gold prices remained flat, consolidating within a narrow range as investors maintained a cautious outlook amid mixed market sentiment. Renewed tensions in the Middle East, particularly Israel’s ongoing strikes against Hezbollah despite the ceasefire agreement, have fueled safe-haven demand for gold. However, this bullish momentum was capped by the stronger-than-expected US job openings data, which bolstered the dollar and curbed gold’s appeal.
Gold prices are trading flat while currently testing the resistance level. MACD has illustrated diminishing bullish momentum, while RSI is at 48, suggesting the commodity might edge lower since the RSI stays below the midline.
Resistance level: 2650.00, 2705.00
Support level: 2610.00, 2550.00
The GBP/USD pair is trading near its next resistance level, exhibiting lower volatility in recent sessions. Both the Pound Sterling and the U.S. dollar lack clear catalysts, leaving the pair directionless for the time being. However, attention will shift to the upcoming U.S. ADP Nonfarm Employment Change data due later today. This report is expected to offer insights into the strength of the U.S. labour market and could provide a directional cue for the dollar, with potential implications for the pair’s movement. Traders should remain vigilant for any significant surprises in the data.
The GBP/USD was trading sideways lately, giving the pair a neutral signal. However, the RSI is easing toward the 50 level while the MACD is heading below the zero line, suggesting that the bullish momentum is diminishing.
Resistance level:1.2700, 1.2790
Support level: 1.2620, 1.2505
The EUR/USD pair is experiencing improved sentiment as concerns over French political instability, which previously weighed on the euro, are subsiding. Market participants are optimistic that the French parliament will soon resolve its budget debate, potentially bolstering confidence in the euro. Meanwhile, traders should keep a close watch on the European Central Bank (ECB) President’s speech scheduled for later today.
The pair gained in yesterday’s session but was quickly erased, suggesting that the selling pressure is overwhelming with the pair. The RSI is gradually moving lower while the MACD is flowing closely to the zero line, suggesting the pair’s bearish momentum is forming.
Resistance level: 1.0520, 1.0610
Support level: 1.0440, 1.0325
The Australian dollar sank to a four-month low against the U.S. dollar in today’s session following the release of disappointing Australian GDP data. The weaker-than-expected growth figures have fueled market speculation that the Reserve Bank of Australia (RBA) may be approaching a shift in its monetary policy stance, further pressuring the currency. Adding to the bearish sentiment, concerns over a potential trade war between China and the United States have intensified after Donald Trump’s election as U.S. President. Given Australia’s heavy reliance on Chinese trade, these tensions have weighed on the Australian dollar, which continues to trade on a softer note.
The AUD/USD pair has reached its multiple-month low, suggesting a bearish bias for the pair. The RSI was kept below the 50 level, while the MACD failed to break above the zero line, suggesting that the bearish momentum remains intact with the pair.
Resistance level: 0.6500, 0.6550
Support level: 0.6420, 0.6340
The Nasdaq surged to new record highs for the second consecutive day, buoyed by anticipation of upcoming speeches from Fed Chair Jerome Powell and the Nonfarm Payrolls report. With limited market catalysts, the bullish momentum in US equities was largely attributed to technical rebounds. Investor optimism about the US economic outlook and potential future policies under President-elect Donald Trump also supported market sentiment.
Nasdaq is trading higher following the prior breakout above the previous resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 69, suggesting the index might enter overbought territory.
Resistance level: 21375.00, 21700.00
Support level: 20970.00, 20320.00
BTC has established an asymmetric triangle pattern and continues to trade within this formation, signaling indecision in the market. A breakout on either side of the triangle will likely determine BTC’s next significant price movement. However, BTC dominance in the cryptocurrency market has dropped over 10% from its recent peak, indicating that market focus is shifting toward altcoins. This decline in dominance suggests potential selling pressure on BTC as capital flows diversify into other digital assets.
BTC is now trading in a neutral direction; a break of either side of the asymmetric triangle pattern will be a signal for the BTC’s upcoming price movement. However, the RSI is hovering close to the 50 level while the MACD forms a bearish divergence, suggesting a bearish bias for BTC.
Resistance level: 96700.00, 101,900.00
Support level: 92250.00, 88500.00
Crude oil prices rebounded amid renewed Middle East tensions, despite an announced ceasefire deal. Israel threatened to attack Lebanon if the truce with Hezbollah collapses. Strikes against alleged Hezbollah fighters continued, raising fears of further escalation. Meanwhile, top Lebanese officials called on the US and France to urge Israel to uphold the ceasefire. Additional support for oil prices comes from the anticipation that OPEC+ will extend supply cuts at its meeting on Thursday.
Oil prices are trading higher following the prior breakout above the previous resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 61, suggesting the commodity might extend its gains since the RSI stays above the midline.
Resistance level: 71.30, 72.55
Support level: 69.60, 68.00
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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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