DBG Markets: Market Report for Nov 08, 2024

Market Overview

The First Days of Trumps Presidency

The first days of Trumps presidency will be crucial, offering early indicators for both the U.S. and world economies. There is a great deal of speculation surrounding his proposed policies, particularly his approach to tax cuts and tariffs, which could significantly shape the market landscape. Although these policies were initially political promises, they now stand as actionable items on the agenda. Analysts widely expect an appreciation in the dollar alongside a strengthening of the U.S. economy, suggesting a potential shift in economic power and market stability.

FRIDAY NEWS

CAD employment data to be released later.

The FED cut rates as expected. However, it is widely anticipated that the FED will take a more cautious approach in the coming months for cutting their rates due to the uncertainty with Trump's presidency. According to the CME FED tool, there is a 71% chance that they will cut rates by 25 basis points, and a 29% chance for the FED to hold the rates.

GOLD - GOLD appears poised for continued lows, with a muted response following recent FED rate cuts, suggesting the market may have already priced in this move. After bouncing from 2643.644, we anticipate a continuation of the bearish trend, though a breakout above 2749.200 could indicate a shift to bullish momentum. Geopolitical uncertainties, particularly related to Iran and Trumps policies, might drive short-term demand for GOLD. However, in the long term, GOLD could decline as a stronger dollar pressures prices. Until tariffs take effect, further gains in GOLD are possible. The RSI currently shows high divergence, signaling a potential drop soon, while the MACD remains a strong buy, albeit with weakening momentum, supporting a bearish outlook.

SILVER - Similar to GOLD, as long as prices stay below 32.900, bearish sentiment dominates. Here, the RSI supports bearish momentum via divergence, but the MACD indicates ongoing bullish momentum.

DXY - The dollar is in a strong selling phase, though RSI and price action hint at further bullish potential, with the MACD showing a slowdown in selling pressure. We anticipate continued dollar strength but remain alert for potential gap fills before continuation.

GBPUSD - Following the rate cut announcement, the Pound rose, hinting at reduced likelihood of further cuts. The RSI divergence and the MACDs continued buying, despite slowing momentum in the histograms, suggest a potential near-term selloff.

AUDUSD - The Aussie dollar shows bullish continuation post-breakout from the previous high. However, a shift in RSI and an impending MACD crossover suggest a possible trend reversal, with selling pressure on the horizon.

NZDUSD - Likewise, the Kiwi could see more selling pressure, though bullish momentum may persist after breaking previous highs. A corrective pullback is possible, with RSI and a weakening MACD indicating potential downside.

EURUSD - The Euro remains bearish following recent declines, with both RSI and MACD histogram indicating a likely sell-off. BOE rate cuts may intensify this sentiment, especially following Trumps election.

USDJPY - The Yen signals ongoing weakness, showing bullish momentum in charts and RSI but maintaining a bearish MACD, though the histogram suggests a slight weakening.

USDCHF - The Franc continues to weaken against the dollar, although RSI has indicated a recent pullback. The MACD supports the bearish sentiment, though theres room for additional buying.

USDCAD - In the CAD market, a break below previous lows signals a possible bearish shift. Should prices rebound, a bullish continuation might ensue, with MACD and RSI displaying strong bullish momentum, though price action suggests potential selling remains.