situation made this weekend tense. Israel resume its ground offensive in Gaza
strip. Unknown drones and missiles attacked U.S. Navy warship. Although nobody claimed
a responsibility for this attack, Houthi rebels have reportedly attacked three
commercial vessels in the area. U.S. Central Command believes that these attack
were “fully enabled by Iran” making Iran a step closer to military entanglement.
reaction was mixed. Gold prices rocketed by 3.3% to $2141, a new all0time high.
Bitcoin rallied by 5.0% to $41,790 per coin, the highest since April 2022. Oil
prices dropped by another 1.7% to two-week lows at $78.00 per barrel of Brent
crude. The United States is trying to push oil prices down with oil production on
record highs at 13.2 million barrels per day. OPEC+ is pushing prices up by
cutting production and orchestrating geopolitical tensions in the Middle East.
Thus, the pressure on oil prices increased despite “positive” news that should
support them this week. OPEC+ is unlikely to surrender that easy. So, any other
news that should leads to a further escalation of the Israel-Hamas conflict
should be expected.
of the Federal Reserve’s (Fed) Chair Jerome Powell last Friday comes in a new
light in this regard. Powell didn’t signal a possible end of the interest rate
hike cycle labeling such speculations “premature”. This is against Fed’s
Governor Christopher Waller words of possible interest rates cuts next spring
and slowing down inflation. Powell may look much further, as a possible rise of
oil prices may push inflation up again. The expansion of the Middle East
conflict may not guarantee Fed’s efforts to bring inflation down would be successful.
So, Powell could be scared by OPEC+ response.
500 broad market index has passed a possible reversal period and is looking up towards
4800-4900 points. On the other hand, Powel has not provided enough reasons for
a Christmas rally. So, investors have to find it somewhere else. The November U.S.
labour market data this Friday could become a such a breaking point. But before
the publication S&P 500 index is likely to orbit 4550 points. The
publication may push the index towards 4630-4650 points and further up to
4800-4900 points after Fed’s meeting next week.
the S&P 500 index has passed a potential reversal period and entered a
safer territory. The resistance moved to 4650 from the current 4550 points. The
nearest support is at 4530-4560 points, while the strong support is at 4350-4370
its move. The production is cut by additional 1 million bpd. This may result in
a 30% rise of crude prices in coming months. Meanwhile, prices are stagnating
below the resistance at $83.00-85.00 per barrel of Brent crude. The nearest
support is at $74.00-76.00 per barrel. This is where prices might go if they
fail to recover above the resistance.
are moving inside the mid-term upside formation with targets at $2000-2100 per
troy ounce that have already been met. Prices broke through the resistance at $2100 per ounce to $2141
level and rolled backed to $1060 per ounce. The nearest support is at $2000-2020
per ounce. Prices are rolling back pushed down by a technical weakness period
that will last by mid-January. So, opening long positions during this time
would be unlikely.
Greenback is hovering inside its primary correction targets at 1.08500-1.09500
against the Euro. Any further correction is largely associated with a Christmas
stock rally. In this scenario, the EURUSD may rise towards 1.12000-1.13000.
Alternatively, the Greenback could resume is strengthening towards the parity
with the single currency.