Oil Prices Volatile Amidst Economic Factors and Production Cut Decisions

market news summary

Morgan Stanley believes that the United States will avoid the expected widespread economic recession, supported by the flexibility of the labor market, which can withstand interest rate hikes by the Federal Reserve this year.

They added: There is a clear slowdown in the labor market, however, the job gains rate has been very strong, and we believe that contributes to spending flexibility. European indices declined at the end of Tuesday’s session, as investors awaited the release of corporate earnings results. At the end of the session, the STOXX600 index rose by less than 0.1% to reach 461 points, while the German DAX declined by 0.26% to reach 16,039 points. The UK’s FTSE dropped by about 0.1% to 7,519 points, and the French CAC declined by 0.23% to 7,369 points.

Dollar Index (USDX)

The dollar index rose by 0.1% as investors closely monitored the minutes of the Federal Open Market Committee meeting, which will provide insights into the expected monetary tightening moves. On the other hand, markets are awaiting the non-farm payroll data, unemployment rates, and wage rates, which will indicate the position and strength of the U.S. economy.

Pivot point: 102.65

Resistance level	Support level
102.80	102.50
103.10	102.25
103.35	102.00

Spot Gold (XAUUSD)

Gold prices rose on Tuesday, July 4th, amid light trading due to the U.S. Independence Day holiday. However, the rise of the dollar limited the gains at a time when traders await further economic data later in the week for indications of the Federal Reserve’s future interest rate hike plans.

Spot gold prices rose by 0.2% to reach $1,925.56 per ounce, and similarly, U.S. gold futures rose by a similar percentage to $1,932.30.

Pivot point: 1925

Resistance level	Support level
1930	1920
1936	1914
1941	1909

Dow Jones Index (DJ30ft – US30)

Expectations for the S&P 500 index are being raised for the upcoming period, as markets predict it to reach its all-time high by the end of this year.

The S&P 500 index concluded the first half of the current year with a rise of approximately 15.9%, marking its best first-half performance since 2019. Additionally, the 30-stock Dow Jones index had modest gains of 3.8%.

Pivot point: 34610

Resistance level	Support level
34715	34520
34800	34380
34905	34065

US Crude (USOUSD)

Oil prices rose at the close of trading on Tuesday, July 4th, as the market evaluated the impact of Russia and Saudi Arabia’s decision to cut production next month, amid weak global economic prospects.

Saudi Arabia decided to extend the voluntary production cut of around one million barrels per day, which it began implementing this month, for an additional month. Meanwhile, Russia decided to reduce its crude oil exports by 500,000 barrels per day in August. Algeria also decided to increase its voluntary production cut by 20,000 barrels per day next month.

Pivot point: 70.70

Resistance level	Support level
71.60	70.15
72.20	69.30
73.05	68.69

Risk Warning

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