DBG Markets: Market Report for Oct 22, 2024

Market Overview

Will Israel Strike Now？ The tension between Israel and Iran is at its peak, and an attack may be imminent. When exactly？ We don't know, but the likelihood of an attack today, tonight, or this week is very high, especially following an assault on Netanyahu's home and his subsequent video statement. A leak detailing Israel's attack plans has been confirmed by multiple media outlets, exposing a potential airstrike by Israel‘s Air Force. While the exact targets are unclear, Iran suspects its nuclear facilities could be the main objective. Israel is preparing for war, but it remains uncertain whether public sentiment supports the ongoing conflict. Many citizens are urging the government to sign a ceasefire to recover hostages. Although Israel’s efforts against terrorist groups are widely praised, the people feel its time for a peace deal. Until any diplomatic success is achieved, the current hostilities will continue. This ongoing conflict implies several things for the market: Gold will likely remain consolidated or low until an attack, at which point sudden news will drive prices higher, alongside oil and silver. The scale of the attack will determine how much prices react. Investors are expected to flee risk-on assets, moving towards safe-haven investments like Gold. Regardless of when the attack occurs, Israel has already intensified its bombing campaigns in both Lebanon and Gaza.

GOLD - Prices dropped after peaking at around 2740.840. With the current price movement, we can see where the S&D zone for the possible next bottom will be. We wait for further buying but remain aware of the bottom that may extend. With that said, we continue to trade with caution but have high expectations for a GOLD buy.

SILVER - SILVER prices are stuck between two S&D zones at 34.025 and 33.503. Our expectations remain bullish for SILVER. This short drop is technical in nature. Our bullish bias remains, with further buying after breaking above the said structure. We wait for further price movement to secure our direction.

DXY - Compared to other currencies, the dollar is expected to perform better. With that in mind, we continue to wait to see how the dollar will break above 104.084.

GBPUSD - As we expected, the Pound has fallen below 1.29966 after failing to break the previous swing high. This will continue as prices show an increased chance of a rate cut for the Pound in this coming months meeting.

AUDUSD - The Aussie dollar will lag behind as markets price in less trading for risk-on assets. Currently, the market is expected to break the low under 0.66541, as anticipated.

NZDUSD - In line with our expectations, the market will continue to move lower from this point, showing continued selling momentum and pressure as markets price in further rate cuts in the coming months.

EURUSD - The Euro also falls in line with our expectations, as markets see increased chances of another rate cut by the ECB in the following months, up to March 2025. With this in mind, we expect the price to break below 1.08048.

USDJPY - The Yen is expected to break above 150.883, as current momentum still suggests a continuation of buying, as anticipated. The recovery of the dollar against the Yen follows the BOJs intervention.

USDCHF - The Franc remains consolidated, as expected, showing its strength compared to other currencies. This is due to heightened insecurity in West Asia, with investors looking for safer alternatives.

USDCAD - The CAD is currently seeing a continuation of weakness, as expected. Further buying is seen as prices come close to breaking 1.38402. Momentum for buying has not yet been broken.