Today’s Trade Ideas
Gold XAU/USD beat 2018 this week for our buy signal to hit the next target of 2029/30 and even reached 2051. The outlook remains positive so on a break above 2053 we are likely to retest the all-time high at 2069/2072. A daily close above here would be the next buy signal.
We dipped to support at 2045/40 yesterday and held above 2035 so bulls appear to remain in control this morning. However a break lower today risks a slide to to support at 2015/10. Longs need stops below 2005.
Silver XAG/USD traded sideways for 6 days and then beat the upper end of the range late on Friday for a buy signal targeting 2465/70, 2480/85, 2500 and my next target of 2520/25 (hit yesterday as predicted). A high for the day exactly at this target but further gains look like towards 2550/60 before the end of the week.
We should have support again at 2490/80 after we saw a low for the day exactly here. Longs need stops below 2470. A break lower risks a slide to a buying opportunity at 2420/10 and longs need stops below 2390.
We also caught a low for the day in EUR/USD but selling USD/JPY was more challenging.
The first sell order at 147.20/30 was stopped (and now we are trading below that level) and then we held 10 pips from 148.00 - you know my outlook for the pair is negative and has been for 2 weeks so I hope somehow you are still holding a short position.
I am sure you remember I have downside targets as far as 146.00 and even 140.00 is not out of the question.
GBP/USD buying opportunity unfortunately missed by 12 pips yesterday but I am sticking with that level today.
AUD/USD should have very strong support at 6590/80 in the short-term bull trend.
NZD/USD made a low for the day exactly at the buying opportunity at 6140/30.
Unfortunately, I made a mess of the GBP/JPY trade and got us in too early the pair has fallen back below the sell level. I am going to leave this and watch.
Treasury yields and Dollar movement
Treasury yields fell on Wednesday.
The dollar gained, reaching a 3-1/2 month low, with MSCI's global stock index barely rising.
US Equities performance
S&P 500 edged lower, Nasdaq dipped, while the Dow rose slightly.
Investors awaited a key inflation reading scheduled for early Thursday.
Commerce Department's GDP data
U.S. GDP rose at a 5.2% annualized rate in Q3, revised up from 4.9%.
Fastest expansion since Q4 2021, indicating an encouraging sign for the economy.
GDP report confirmed inflation trending lower, suggesting a potential "Goldilocks scenario."
Mixed messages from Federal Reserve officials
Fed officials on Wednesday provided mixed messages on monetary policy.
Fed Governor Christopher Waller suggested rate cuts could begin in months if inflation eases.
Fed Bank of Atlanta President Raphael Bostic expects U.S. growth to slow, anticipating easing inflation.
Richmond Federal Reserve Bank President Thomas Barkin is "skeptical" about inflation easing, considering another rate hike.
Dollar performance
Dollar climbed from its lowest level in over three months after four days of losses.
Greenback rose against most currencies except the Swiss franc and New Zealand dollar.
On track for its biggest monthly decline in a year due to expectations of Fed rate cuts by H1 2024.
US Gross Domestic Product (GDP) data
U.S. GDP increased at a 5.2% annualized rate in Q3, faster than the previously reported 4.9%.
Dollar extended gains supported by robust economic data.
Financial conditions and rate cut expectations
U.S. financial conditions are the loosest since early September, easing 100 basis points in a month.
U.S. rates futures markets are pricing in over 100 basis points of rate cuts in 2024, starting in May.
Two-year Treasury yield at its lowest since July, down nearly 40 basis points in the week.
Currency movements
Dollar Index rose 0.205%, euro down 0.16% to $1.0972.
Japanese Yen strengthened 0.15% versus the greenback, Sterling last trading at $1.2696, up 0.02%.
Oil prices
Oil prices rose more than $1 on the possibility of OPEC+ extending or deepening supply cuts.
Brent crude advanced by $1.42 to settle at $83.10, WTI crude gained $1.45 to settle at $77.86.
Gold prices
Spot gold reached a seven-month high of $2,051 an ounce.
Gold futures gained 0.28% to $2,045.70 an ounce.
Upcoming events
- Euro zone-wide inflation figure and the Fed's preferred measure of U.S. inflation (PCE) are due out on Thursday.