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U.S. Treasury & Dollar Continue To Strengthen As Gold Value Increases

1. Forex Market Insight  


With rising inflation expectations weighing on the relative attractiveness of U.S. Treasury bonds, yields have generally risen. However, the U.S. bond yields are climbing faster as traders bet the Fed will act faster than other global central banks. In addition, rate differentials are tilting toward the dollar, weakening low-yielders and putting pressure on economies with large borrowing needs. In return, this move has put significant upward pressure on the euro and the pound.

Technical Analysis: 

(EUR/USD 1-hour chart) 

Execution Insight: 

Today, we pay attention to the direction of the breakout of the 1.1663 to 1.1725 range. If it breaks through the 1.1725-line upwards, then pay attention to the suppression of the 1.1753 and 1.1786 positions. If it falls below the 1.1663-line, pay attention to the support of the 1.1622-line.

GBP Intraday Trend Analysis 

Fundamental Analysis: 

Traders are betting that the Fed will move faster than other global central banks. Against this background, rate differentials are tilting toward the dollar, driving down low-yielding currencies and putting pressure on economies with large borrowing needs.

Technical Analysis: 

(GBP/USD 1-hour chart) 

Execution Insight: 

Today, the pound pays attention to the 1.3574-line. If it is below the 1.3574-line, it will maintain a bearish trend. At that time, focus on the support of the 1.3409-line below and the suppression of the 1.3669-line above.

2. Precious Metals Market Insight



Fundamental Analysis: 

Gold prices fell more than 1% on Tuesday, 28th September 2021, hitting a seven-week low as the dollar strengthened and the U.S. Treasury yields surged after the market expected the Fed to raise interest rates sooner than expected.

The dot plot of the Federal Open Market Committee (FOMC) members showed that the federal funds rate will rise sooner than previously expected. The overall increase in U.S. Treasury yields continued to negatively impact gold as it increased the opportunity cost of holding non-yielding gold.

The benchmark of the U.S. Treasury yields rose back above 1.5%, the highest in more than three months, as the market began to digest expectations of higher inflation ahead. Some investors see gold as a hedge against the possibility of rising inflation due to stimulus measures. However, the rising U.S. Treasury yields have partially eroded the appeal of this non-yielding commodity.

Technical Analysis: 

(Gold 1-hour chart) 

Trading Strategies: 

Gold pays attention to the 1756-line today. If the price of gold breaks above the 1756-line it could possibly open up a further upside space. At that time, pay attention to the suppression of the 1768 and 1782 positions. If the gold price is below the 1756-line, it will maintain in the shock range.

3. Commodities Market Insight 

WTI Crude Oil 

Fundamental Analysis: 

Yesterday, the November contract for Brent crude oil fell by $1.31, or 1.65%, to close at $8.22/barrel, after rising to $80.75/barrel for the first time in nearly three years. The U.S. oil fell by $1.12, or 1.48%, to close at $74.33 per barrel, after hitting a record high of $76.67 since July.

The five-day-long rally lost its momentum as oil prices retreated, dragged down by the plunge in U.S. stocks. Data released by API showed that crude oil inventories unexpectedly increased by 4.127 million barrels and gasoline inventories increased by 3.555 million barrels in the week ended September 24, putting oil prices under pressure again.

Technical Analysis: 

(Crude oil 1-hour chart) 

Trading Strategies: 

On oil prices today, pay attention to the support of the lower Bollinger Band, and focus on the suppression of the two positions at 75.04 and 75.69 on the upper end. Once the strength drops below the lower Bollinger Band, it will open up a further downside potential. At that time, focus on the 72.30-line of support.

While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision. 

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