DBG Markets: Market Report for Oct 7, 2024

Market Overview

GOLD - After an eventful week, we found that the upcoming rate cut is less likely to be 50 points after a better-than-expected turnout of the Non-farm Payrolls data. This caused GOLD to shift down before a massive rise, which then turned into another consolidated area. Why the consolidation despite the better data and not a continued drop？ The volume still takes into consideration the war in West Asia, causing prices to stagnate at these levels. We are currently trading between 2653.515 and the S&D zone around 2636.500. We expect further buying but are waiting to see where and how the prices will break out.

SILVER - Prices have met resistance at 32.518. With a long wick, prices are now seen making their way down to test 31.472. However, the S&D zone at 32.650 is something to note as a possible support. We see SILVER prices rising further with chances of a fall in the near term.

DXY - The Dollar is currently rising significantly after the very positive NFP data. It is expected that the dollar will increase further in times of crisis and global insecurity. As we have discussed, this will further strengthen the dollar. With that in mind, we may also find that expectations of rate hikes in the markets will make the dollar surge.

GBPUSD - From our previous reading of a strong Pound, we have changed our analysis to a weak Pound and see this as a potential sell all the way. It may not be in the immediate term, but the overall structure has already shifted after the last two drops.

AUDUSD - In the near term, the Aussie dollar is expected to fall further. But in the long term, we may find some good buys in this market. Hence the relatively weak reaction despite the Pounds larger fall. However, the single candle showing a large drop is not something to disregard. It is true, however, that we are seeing a break of structure toward the low and expect this market to continue doing so.

NZDUSD - The Kiwis reaction to the market will be more apparent as markets price in a rate cut expected this week. We are watching for this news and expect a larger drop for this currency on Wednesday at 9 AM. Until then, we may see this market consolidate further.

EURUSD - The Euro has dropped further and is expected to drop more. After breaking below 1.10090, we see the potential for a short correction or consolidation before a further decline.

USDJPY - The Yen is currently fluctuating after last week‘s trading. Japan’s PM announced that they will observe how this affects peoples lives before making a decision. In other words, they are currently waiting to see how the market will continue to progress from here. We are watching to see how it will turn out.

According to news outlets, Japanese authorities will monitor how rapid currency moves could potentially impact the economy and take action if necessary, Katsunobu Kato, the nation's newly appointed finance minister, said on Monday. Asked about the yen's volatile moves since Japanese premier Shigeru Ishiba took office, Kato said the weak yen has both merits and drawbacks.

"We'll have to see how rapid currency moves impact corporate activities and people's lives," he said, speaking to reporters in a group interview. "The government will consider what action should be taken while monitoring the impacts," the minister added.

USDCHF - The Franc is weakening against the dollar, which is beneficial to their businesses. However, given recent developments, we may find Franc strength against other currencies. In other words, while the possibility of a bullish Franc seems low, we see this as simply an upward swing in what will likely be a somewhat winding consolidation.

USDCAD - The CAD is rising toward 1.35762 as expected and is now on its way to complete another fall, indicating a major consolidation. As another asset that will benefit from rising oil prices, we see this market consolidating in the long run, similar to the Franc. Currently, it may rise further after a fall within this structure.