The August nonfarm payrolls report showed only 144,000 new jobs, which has largely confirmed that the Federal Reserve will cut interest rates this month, but it's unclear by how much. Markets had anticipated a rate cut in September, but traders are now leaning towards a more cautious 25 basis point cut, with further reductions possibly coming in November and December. Analysts expect three 25 basis point cuts by year-end but acknowledge a possibility of more aggressive action. Fed officials have signalled support for a September cut but have not committed to the size, leaving markets uncertain ahead of the Fed’s decision on September 18.
DOW JONES
US30USD (Daily). The 40,000 level remains a key psychological and liquidity zone where institutions decide to enter the market. Retail buyers and sellers are in "wait and see" mode to confirm either a reversal or a breakout at this level.
BITCOIN
September has historically been challenging for crypto, and the Crypto Fear & Greed Index shows high anxiety among investors. Bitcoin reached its 1-month low at around $53,600. The selloff was driven by concerns over the US economy and a broader market decline, exacerbated by weak manufacturing data and a cooldown in the labour market. The total crypto market cap dropped 30% from its 2024 peak. However, trading volumes increased in August.
BTCUSD (Daily). In 2024, Bitcoin reached a new all-time high of 73,000 but entered a bearish projection channel. Price respects the upper and lower bands, but is expected to approach 52,300, a key area where buyers are likely to accumulate.
OIL
US crude oil prices fell to their lowest level since June 2023. The decline is driven by OPEC+ delaying an output increase and concerns over global supply and demand. WTI dropped below $67 per barrel, down 8% for the week. OPEC+ postponed plans to raise production by 180,000 barrels per day until December, amid falling prices. This hike will add about 2.2 million barrels per day to the market through next year. Bank of America and Citi lowered their 2025 oil price forecasts to an average of $71 a barrel. Citi predicts will average in the $60s next year due to an anticipated market surplus.
WTIUSD (Daily). The price finally broke through the dynamic support level last week, around $71 per barrel. We believe that supply and demand factors will drive the price back to 71.00, where it will possibly face some resistance.
GOLD
Gold price fell on Friday as mixed US jobs data created uncertainty about the Federal Reserve's upcoming interest rate decision. Gold dropped 0.8% to $2,495 per ounce. The jobs report showed nonfarm payrolls rose by 142,000 in August, below expectations, while the unemployment rate fell slightly to 4.2%. This mixed data has left investors uncertain whether the Fed will cut rates by 25 or 50 basis points at its September 18 meeting. The chance of a 50-bp cut has increased to 41%, while a 25-bp cut is still more likely now. The upcoming US CPI report will be a key factor in the Fed’s decision.
XAUUSD (H4). The price correction to 2475.00 last week has made a strong demand zone. Buyers are likely to wait for this level before re-entering the market. Watch for selling opportunities in the green zone and buying opportunities in the yellow zone.
Fullerton Markets Research Team
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