Crude Oil has been falling steadily lately with analysts citing the peace deals in the Middle East. That looks like noise to me and the majority of the selloff might have been more about the combination of the de-escalation between Israel and Iran, and fears of the Fed opening the door for more tightening as that would be a headwind for demand on a forward looking basis.

Yesterday, the Fed decided to keep a neutral stance with strong pushbacks against a rate hike from Fed Chair Powell. Moreover, the US ISM Manufacturing PMI missed slightly with generally positive commentary, so the fears about some big slowdown should be set aside for the moment. This morning, we got a report saying that OPEC+ could extend the volunatry output cuts beyond Q2. Overall, the global growth impulse should continue as long as the data remains supportive and the central banks are not intentioned to hike anytime soon.

Crude Oil Technical Analysis – Daily Timeframe

On the daily chart, we can see that the price is now bouncing right around the key support zone in the $79-80 range and the long term trendline. This is where the buyers are stepping in with a defined risk below the trendline to position for a rally into the $90 region. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and start targeting the lows around the $68 level.

Crude Oil Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have another downward trendline defining the current downward momentum. Now, if the price breaks above it and continues past the $80.30 swing level, we can expect the buyers to gain more conviction and increase the bullish bets into new highs.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

US-based employers announced 64,789 job cuts in April this year, which is just a little over 3% less than the year before. The sector with the most layoffs on the month was auto makers, primarily after Tesla’s announcement that it would slash 14,000 of its global workforce.

This article was written by Justin Low at www.forexlive.com.

For some context, the existing 2.2 mil bpd worth of oil production cuts are to run until June. Three sources cited in the report say that even though formal talks have yet to begin on the matter, an extension to the voluntary cuts are likely. But another source did say that OPEC+ is not yet leaning one way or the other.

This article was written by Justin Low at www.forexlive.com.

The
2024 Bitcoin halving, which crypto investors have been expecting for four
years, has been finalised. The reward per block has been reduced from 6.25 BTC
to 3.125 BTC. The next cut will occur in 2028, with the reward reduced to
1.5625 BTC. The ultimate 64th halving will occur around the year 2140, which
will mean that all 21 million coins have been mined, and the issuance of new
Bitcoins will cease. Once this happens, the miners will have to find other ways
to make money in the crypto world.

How does halving affect the
Bitcoin price?

At
the time of writing, the Bitcoin exchange rate is around $57,000. Many analysts
expect the halving to catalyse further BTC price growth in the long term.

Historically,
with each new cycle following a halving event, the price of Bitcoin reached a
new high. For example, in late 2013, about a year after the first halving,
Bitcoin reached the $1,200 mark. The next market cycle peaked at $20k per
Bitcoin in late 2017 and went up to $69k in late 2021 before collapsing again.
However, in the last six months, the value of BTC has already risen by about
140%. In comparison, over the same period, the price of Ethereum, the second
most crucial cryptocurrency, has only increased by 85%.

‚The
current situation is unique: Bitcoin, for the first time, exceeded the previous
high before halving, reaching $73,000 in March 2024′, said Kar Yong Ang, Octa
Broker financial analyst. He added that demand from the U.S. bitcoin ETFs
launched in January was a vital factor in that price rise.

At
the same time, miners‘ revenues will drop by exactly half. As a result, they
will have to spend twice as much time and twice as much electricity to get the
usual amount of cryptocurrency. And since energy is not cheap, the weakest
players are expected to leave the market. In other words, we expect a supply
shortage against the backdrop of increasing demand.

Conclusion

The
halving of Bitcoin is a milestone in the history of the major cryptocurrency,
which shows its limited issuance and inherent mechanisms to protect against
inflation. Many believe that Bitcoin, with its deflationary model, is well
positioned to become a reliable store of value in an unstable global economy,
much like traditional gold—but only digitally.

If
we draw historical parallels, Bitcoin should enter an intense growth phase
around the end of 2024, after which it should exceed $200,000. The current
conditions are very different from those observed in 2020 because the demand
for cryptocurrency is extremely high due to ETFs, and its deficit is already
felt today.

Octa

Octa is an
international broker that has been providing online trading services worldwide
since 2011. It offers commission-free access to financial markets and various
services already utilised by clients from 180 countries with more than 42
million trading accounts. Free educational webinars, articles, and analytical
tools they provide help clients reach their investment goals.

The company is involved in a comprehensive network
of charitable and humanitarian initiatives, including the improvement of
educational infrastructure and short-notice relief projects supporting local
communities.

Octa has also won more than 70 awards since its
foundation, including the ‚Best Educational Broker 2023‘ award from Global
Forex Awards and the ‚Best Global Broker Asia 2022‘ award from International
Business Magazine.

This article was written by FL Contributors at www.forexlive.com.

FOMC talk:

• Welcome to Fed day
• FOMC Preview – Watch out for these surprises
• Hawkish Fed or not? That will be the question

Headlines:

• Japan reportedly mulls tax breaks to boost yen repatriation
• UK April Nationwide house prices -0.4% vs +0.1% m/m expected
• US MBA mortgage applications w.e. 26 April -2.3% vs -2.7% prior

Markets:

• AUD leads, CHF lags on the day
• S&P 500 futures down 0.4%
• US 10-year yields down 0.5 bps to 4.682%
• Gold up 0.3% to $2,294.35
• WTI crude down 1.8% to $80.47
• Bitcoin down 4.7% to $57,792

It was a quiet session for the most part with European markets closed in observance of Labour Day.

Major currencies aren’t up to much with the dollar keeping steadier mostly, holding in smaller ranges on the day. All eyes are on the coming US data as well as the FOMC meeting later. The USD/JPY focus continues with the pair keeping just under the 158.00 mark throughout the session.

Meanwhile, equities remain fairly nervous after falling at the end of April trading yesterday. US futures are down with tech shares leading the declines again.

In other markets, gold is finding a temporary base just under $2,300 after yesterday’s plunge while oil is marked down to its lowest since March at $80.47 as geopolitical tensions fade. Bitcoin is one to watch as well as it comes under pressure amid a break below $60,000 on the day.

This article was written by Justin Low at www.forexlive.com.

• Prior -2.7%
• Market index 192.1 vs 196.7 prior
• Purchase index 141.7 vs 144.2 prior
• Refinance index 456.9 vs 472.7 prior
• 30-year mortgage rate 7.29% vs 7.24% prior

Mortgage applications continued to decline in the past week, with both purchases and refinancing activity also falling. It comes as the average rate of the most popular US home loan rises further by 5 bps to 7.29% – its highest since the end of November last year.

This article was written by Justin Low at www.forexlive.com.

The Israel retaliation really marked the top for Gold as the geopolitical risk faded and the market caught up with the rise in US real yields. The trend might be reversing and some key technical breaks are adding up to the chances of seeing a big correction to the downside. Looking ahead, the bears will need to see the strength in the US data continue as a quick deterioration will likely invalidate the bearish case.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that Gold fell below a key trendline recently, and after some consolidation, continued lower led by the market’s positioning into a hawkish Fed and the hot US Q1 ECI report yesterday. All else being equal, the natural target should stand around the next trendline near the previous all-time high at 2145 which can be reached if the US data continues to run hot.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the price broke the bearish flag to the downside increasing the bearish momentum as the sellers piled in more aggressively. Technically, the measured target stands around the 2220 level. From a risk management perspective, the sellers will have a better risk to reward setup around the 2320 level as we will find the downward trendline acting as resistance, although we will liekly need some weak US data releases or a dovish Fed to get there. A break above the trendline should see the buyers stepping in with more conviction while a break above the 2352 high will invalidate the bearish setup.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The European Session is dull today as we have the Labour Day’s Holiday. Things will get much more interesting in the US Session as we get some key US economic data and then we finish the day with the FOMC rate decision. Let’s break down the upcoming data releases and see what could be the likely market impact.

• US ADP 12:15 GMT (08:15 ET)

The US ADP is expected at 175K vs. 184K prior. Last month, the data surprised to the upside with the biggest increase in hiring in eight months. The worrying part was the change in annual pay which showed an unchanged 5.1% rate for job stayers and a big jump to 10.1% vs. 7.6% prior for job changers. The problem here is that a resilient labour market with rising wage growth could not only stop the disinflationary trend but even reverse it. This is something that the Fed will want to avoid. Therefore, watch out for the pay gains data today as an upside surprise could fuel another hawkish reaction from the market with more buying momentum for the USD across the board and more downside for bonds, stocks and gold.

• US ISM Manufacturing PMI 14:00 GMT (10:00 ET)

The US ISM Manufacturing PMI is expected
to tick lower to 50.1 vs. 50.3 prior. Last
month, the index jumped into expansion for
the first time after 16 consecutive months in contraction with generally upbeat
commentary. The latest S&P
Global US Manufacturing PMI returned back
into contraction after the Q1 2024 expansion. The commentary this time has
been pretty bleak with even mentions of strong layoff activity, although there
was also good news on the inflation front. The ISM report is generally
considered more important by the market, so it will be used to confirm or
deny the S&P Global result.

If the data surprises to the upside, it will likely trigger a hawkish reaction as the market will brush off completely some latent worries from the S&P Global survey and lead to more bids for the USD and offers for bonds, stocks and gold. Conversely, if the data surprises to the downside, the market might reverse some of the moves seen in the last few days.

• US Job Openings 14:00 GMT (10:00 ET)

The US Job Openings is expected at 8.680M
vs. 8.756M prior. This will be the first major US labour market report of
the week and, although it’s old (March data), it’s generally a market
moving release. The last
report we got a slight beat with negative
revisions to the prior readings highlighting a resilient although normalising
labour market. The market will also focus on the hiring and quit rates as they
both fell below the pre-pandemic trend lately. This report will be overshadowed by the ISM Manufacturing PMI but watch out for big surprises as they could exacerbate or even reverse the moves from the ISM release.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Investors are feeling nervous awaiting the Fed later in the day. But at the same time, don’t discount the impact from the US data later. There is the ADP employment change, ISM manufacturing PMI, and JOLTS job openings before the FOMC meeting comes in. Those will also play a role in driving market sentiment in the first half of US trading at least.

But if we are to see a more hawkish Fed take later in the day, risk trades could really be in for a world of hurt. For the S&P 500, a test of the 100-day moving average (red line) will be the first key level to watch in that scenario:

This article was written by Justin Low at www.forexlive.com.

The near-term pressure is back on for gold in trading today. The precious metal had been holding in a consolidative phase coming into this week, above the $2,300 mark. But amid a break of key near-term support today, we are seeing sellers pick up the momentum now. Here’s a look at the hourly chart:

Gold buyers did manage to hang on at the 100-hour moving average (red line) since the end of last week. But they were unable to force a breakthrough, as price action did not challenge the upper near-term limit of the 200-hour moving average (blue line). In turn, sellers are pushing price back down now and that sees the near-term bias turn more bearish.

So, are there any notable downside levels to watch from here?

The first one will be the $2,300 mark itself. That will be one to watch especially on the daily chart. Then, there is the 23 April low at $2,391 to contend with. However, I’d argue that a firm break below $2,300 will help to set off further downside momentum in gold in any case.

The 38.2 Fib retracement level at around $2,260 and then the $2,200 mark will be the next two key technical levels to watch. That is should the correction lower run much deeper on a break under $2,300. Those are the recognised risk levels to be mindful of.

As for the fundamental plays, the dollar is seeing some push and pull this week. But all eyes are now on the Fed tomorrow next. That will be the first key risk event for gold, before the US jobs report on Friday factors into play.

This article was written by Justin Low at www.forexlive.com.