Daily Market Analysis

Latest Economic Insights

Key Headlines:

• The dollar steadies near 98.8 after the recent wave of declines halted.
• The rise in oil prices revives inflation concerns and supports expectations of a US rate hike.
• Markets are awaiting the decisions of the Federal Reserve, the European Central Bank and the Bank of Japan this month.
• Gold rises to near $4,400, benefiting from the weakness of the dollar.
• Brent crude is trading near $99 and West Texas near $94 at their highest levels in three months.
• Bitcoin faces important resistance with institutional accumulation continuing and the unrealised profits of the whales rising.

Fundamental Analysis

• The Dollar and Monetary Policy
  • The dollar index steadied near the 98.8 level on Wednesday, halting the recent wave of declines, with oil prices rising again and inflation-related concerns returning, which reinforced expectations of the possibility that the Federal Reserve will raise interest rates during its next meeting.
  • The weakness of the dollar in the recent period came driven to a large degree by the strong rise in the Japanese yen, alongside investors taking more cautious positions ahead of a series of major central bank decisions during this month.
  • Markets currently expect the Federal Reserve, the European Central Bank and the Bank of Japan all to move toward tightening monetary policy, with the probability of a US interest rate increase of 25 basis points remaining at around 60% following the jobs data that came in stronger than expected.
  • Investors are also awaiting the main US inflation data this week in order to obtain further evidence regarding the direction of prices and the extent of the Federal Reserve’s need to continue tightening.
  • At the same time, the dollar remained under pressure against the yen after US Treasury Secretary Scott Bessent warned traders against betting on further weakness in the Japanese currency.

• Gold:
  • Gold rose to near the $4,400 per ounce level on Wednesday, ending a wave of declines that had lasted two sessions, benefiting from the continued weakness of the dollar.
  • The decline in the US currency makes dollar-denominated gold more attractive to investors who use other currencies, which provided support for the metal despite the continuation of the pressures related to rate hike expectations.
  • On the other hand, the rise in oil prices remains a factor with a dual effect, since it supports gold as a means of hedging against inflation, but at the same time it strengthens the likelihood of monetary policy tightening, which could pressure demand for the metal, which generates no yield.
  • Gold’s movement over the coming days remains tied to a large degree to the US inflation data and the direction of bond yields and the dollar, in addition to developments in the conflict in the Middle East.

• Oil:
  • Brent crude rose to near $99 per barrel, while West Texas Intermediate moved near $94, recording its highest levels in around three months as hostilities escalated in the Middle East.
  • The rise came after US forces destroyed five Iranian oil tankers near Kharg Island in response to attempts to launch missile attacks on a US warship.
  • Tehran also announced that it had targeted two US vessels and eight oil tankers in the Gulf, and fired ballistic missiles toward Jordan, while issuing warnings to vessels in the Arabian Gulf and requesting the evacuation of tankers near the ports of Kuwait and Bahrain.
  • At the same time, Iran-backed Houthi militants targeted energy infrastructure in southern Saudi Arabia, including the Jazan refinery, which has a capacity of around 400 thousand barrels per day.
  • The disruption of shipping through the Strait of Hormuz also pushed Chinese refining companies to search for alternative supplies from Africa, Canada and Latin America, which lifted the prices of some crude grades outside the region.
  • Oil remains highly sensitive to any new developments in the Strait of Hormuz, since a continuation of the escalation could push prices to higher levels, while any diplomatic progress could reduce the risk premium.

• Bitcoin
  • Bitcoin is maintaining a relatively positive picture in terms of institutional demand, with the holdings of exchange-traded funds and the accumulations of large investors continuing to rise.
  • The data points to Binance’s reserves ranging between 685 thousand and 687 thousand Bitcoin, while net inflows to the platform over seven days amounted to around 593 Bitcoin, coinciding with a rise in stablecoin flows.
  • On the other hand, analyst Michaël van de Poppe considers that a fall below $78 thousand could open the way for a correction toward $74 thousand, while Arthur Hayes considers that Bitcoin may move past its all-time highs before the end of the year.
  • The short-term unrealised profits of the Bitcoin whales also reached around $9.07 billion on 4 September, the highest level since 2016, before falling by around 17% after the price retreated subsequently.
  • The average break-even price for the whales stands near $69 thousand, which makes this area one of the important levels in the event of a deeper correction, while the continuation of institutional flows and liquidity remains the main factor supporting any new upward wave.

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

• There is no important economic data listed on the markets today.

GOLD

• Trend: Sideways with a downward bias
• Timeframe: 30 minutes
• Current price: 4,406.35
• First scenario: Buy on a break above 4,432.90
• Targets: 4,450.40 then 4,485.54
• Alternative scenario: Sell on a break below 4,377.11
• Targets: 4,342.93 then 4,310.19
• Note: Gold is moving within a sideways range with selling pressure remaining in place below the main moving averages. A break above 4,432.90 improves the bullish picture and opens the way toward the higher levels, while a break below 4,377.11 makes a return of the decline and a continuation of selling pressure more likely.

CRUDE OIL

• Trend: Bullish
• Timeframe: 30 minutes
• Current price: 94.53
• First scenario: Buy on a break above 95.11
• Targets: 96.83 then 98.73
• Alternative scenario: Sell on a break below 92.98
• Targets: 91.13 then 89.36
• Note: Oil is holding a clear bullish trend and is trading above the moving averages with the formation of rising highs and lows continuing. A break above 95.11 supports an extension of the upward wave, while a break below 92.98 would be a signal that the price is entering a downward correction.

EURUSD

• Trend: Bullish
• Timeframe: 30 minutes
• Current price: 1.16430
• First scenario: Buy on a break above 1.16550
• Targets: 1.16829 then 1.17182
• Alternative scenario: Sell on a break below 1.16228
• Targets: 1.15885 then 1.15592
• Note: The euro is holding a bullish structure and is trading above the moving averages after a gradual upward wave. A break above 1.16550 confirms a continuation of the advance, while a break below 1.16228 weakens the positive momentum and opens the way for a downward correction.

GBPUSD

• Trend: Bullish
• Timeframe: 30 minutes
• Current price: 1.35656
• First scenario: Buy on a break above 1.35800
• Targets: 1.36129 then 1.36493
• Alternative scenario: Sell on a break below 1.35453
• Targets: 1.35083 then 1.34744
• Note: The pound is holding a bullish structure and is trading above the moving averages after a clear upward wave. A break above 1.35800 supports a continuation of the advance, while a break below 1.35453 weakens the positive scenario and opens the way for a deeper correction.

NAS 100

• Trend: Sideways with an upward bias
• Timeframe: 30 minutes
• Current price: 29,534.07
• First scenario: Buy on a break above approximately 29,700
• Targets: 29,846.71 then 29,971.91
• Alternative scenario: Sell on a break below 29,420.83
• Targets: 29,252.86 then 29,043.10
• Note: The index is currently moving within a sideways range after the previous upward wave, with the price remaining above the long-term moving average. A break above the 29,700 area supports a resumption of the advance, while a break below 29,420.83 makes a return of selling pressure more likely.