Markets holding ground
US equities managed to close the day slightly higher yesterday, including Nasdaq and SPX, while Dow Jones closed the day lower by 45 points only, although the US Senate passed a stoppage spending bill to avert a shutdown.
US jobless claims at the highest in 13 weeks
More clues are coming in almost daily that the US economy is cooling down, which keeps the Federal Reserve away from raising rates.
US Jobless Claims increased for the fourth consecutive week, rising to the highest level in 13 weeks, at 231K up from 218K last week. Continuing Claims also spiked to the highest level since November 2021.
Fed Fund Futures
The Fed Fund Futures keep shifting further towards an earlier rate cut. After the inflation data, the Fed Fund Futures shifted the first rate cut from September to June, while after Retail Sales, PPI, and the Jobless Claims, it also shifted a bit further towards May of next year, with a probability of 80%.
This might be one of the most important factors to keep an eye on over the next few months; the earlier the rate cut, the more the trends will be solid.
DXY holding over 104.0
The US Dollar Index has been holding above 104.0 for the past three trading days, while technical indicators remain bearish on most time frames, keeping the bearish outlook unchanged.
A short-term bounce is highly possible after the recent decline. However, any upside retracement is likely to remain limited to below 105.50.
On the downside view, a break through 104.0 would clear the way for further declines, possibly towards 103.40.
| S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| 103.20 | 103.75 | 104.05 | 104.30 | 104.60 | 104.85 | 105.40 |
Brent crude below $78
Brent Crude declined below $78 reaching the lowest level since July, slipping into the bear market, as it has fallen more than 20% from September’s high. The recent decline comes on signs of healthy supplies and rising stockpiles offset attempts by OPEC+ leaders Saudi Arabia and Russia to keep declines in check.
In the coming weeks, it might not be surprising if OPEC+ decides to intervene verbally in order to ensure that Brent ends up in a $80-to-$100 range in 2024.
The next key support for Brent crude stands at $76, which is likely to hold and may open a new opportunity for bulls for the next two weeks.
| S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| 69.26 | 73.83 | 75.62 | 78.40 | 80.19 | 82.97 | 87.54 |
Gold near $1990 resistance
Gold recovered some of its declines, reaching as high as $1987 during yesterday’s trading, on soft economic data, which keeps optimism about the end of the Federal Reserve’s most aggressive hiking campaign in decades at an end.
Despite the current rally, it needs a little bit more time to be confirmed as a continuation of its bullish trend. A break above $1990 is needed on the weekly chart.
If so, another attempt to retest the $2000 resistance area is highly likely, while any downside retracement is likely to remain limited between $1950 and $1930 for now.
| S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| 1912.18 | 1943.66 | 1962.28 | 1975.14 | 1993.76 | 2006.62 | 2038.10 |
Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.
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