DBG Markets: Market Report for Nov 07, 2024

Market Overview

The U.S. Economy Comeback

With Trump‘s victory, market forecasts suggest increased trading on bullish equities and the Dollar, paired with a likely sell-off in precious metals and energy. His policies are expected to impact multiple countries through tariffs, while the dollar’s rise is linked to a more productive economy backed by corporate tax cuts and expansion in the energy sector.

Higher tariffs are also anticipated to bolster domestic employment. Challenges are expected during the implementation phase, but if his policies proceed as outlined, markets could adjust smoothly, supporting a favorable economic climate with ample trading volatility. Crypto, the Dollar, and precious metals like GOLD and SILVER are projected to see strong market trends.

What are the Rate cuts？

The Fed is expected to cut interest rates by 25 basis points later in the day, and the market focus will be on any clues that the U.S. central bank could skip a cut in December. According to CME FEDWATCH, there is a 97.5% that rates will be seeing a cut.

Ahead of the Fed, the Bank of England is likely to cut interest rates the second time since 2020 but the big question for investors is whether it sends a signal about its subsequent moves after the government's inflation-raising budget.

GOLD - GOLD shows weakness following Trumps announcement as markets anticipate a stronger Dollar. The long-awaited drop in GOLD is approaching 2653.515, with selling expected to continue, though we may see a potential rise this evening as the FED prepares for a 25 basis points rate cut.

SILVER - SILVER prices have also dropped significantly. With the current administration, there is an increased likelihood of continued declines in price momentum, confirmed by a low MACD cross. However, an RSI divergence suggests a possible buy opportunity based on current price action.

DXY - The Dollar has gapped up significantly and continues its upward movement, failing to reach previous lows. A possible drop may occur to fill the gap after the rate cut announcement, but we anticipate continued Dollar strength as Trump enacts his promised policies.

GBPUSD - Pound movements indicate range trading with a potential for a rate cut later. Following the Pounds rate cut, we expect a drop before the Dollar's cut. RSI and MACD indicate this price favorably, with the MACD showing a cross.

AUDUSD - The Aussie Dollar currently demonstrates strength. The RSI indicates a buying trend, and the MACD has crossed upward, though further research is needed to assess its fundamental reaction to U.S. policy.

NZDUSD - The Kiwi shows potential for a bullish continuation, supported by MACD and RSI, although price action has yet to confirm this shift as another rate cut is anticipated.

EURUSD - Euro has dropped sharply, as anticipated penalties could impact its currency and stock markets under Trumps administration. Although both MACD and RSI hint at a possible buying momentum, the current shift in market momentum aligns with price action.

USDJPY - The Yen shows continued weakness against the Dollar, with buying momentum likely to persist. However, short-term pullbacks may occur due to election-related volatility, as suggested by a MACD cross and RSI divergence.

USDCHF - The Franc displays weakness with price increases, though a pullback is likely before a continued rise. Despite the indication of market momentum for further gains, MACD and RSI signal an imminent pullback.

USDCAD - Canada faces notable impacts under Trump‘s administration, and we expect further weakness for the CAD. This outlook aligns with current market momentum, MACD, and RSI, and we’ll continue monitoring as trading progresses.