EURUSD
- The EUR/USD remains under pressure, hovering around 1.0845, following its significant decline the previous day. The failure to maintain levels above 1.0900 suggests a weakening of the bullish momentum for the pair.
- The currency pair's near-term direction appears uncertain as traders anticipate the release of high-impact US employment data scheduled for early Friday. The outcome of the Nonfarm Payrolls (NFP) report is likely to dictate the pair's movement.
- European Central Bank (ECB) policymaker Robert Holzmann's statements regarding interest rates have influenced market sentiment. He suggested that interest rates have not yet reached their peak and that one or two more rate hikes are possible, which could impact the Euro's performance.
- Eurozone inflation data did not yield any surprises, and German retail sales unexpectedly declined in July. Investors are now eyeing the final August Manufacturing Purchasing Managers' Index (PMI) data from the Eurozone, which could provide further insights into the region's economic health.
- While the US Dollar gained against its primary European counterparts, it exhibited weakness in the Dollar Index (DXY). US consumer inflation figures did not have a significant impact on the market.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Neutral |
Closing statement: EUR/USD faces an uncertain outlook, with its near-term direction hinging on the outcome of the US NFP report. Additionally, ECB policymaker comments and Eurozone economic data are contributing factors to the pair's dynamics. Traders are closely monitoring these developments to gauge the Euro's performance against the US Dollar.
GBPUSD
- GBP/USD advanced to a weekly high of 1.2747 on Wednesday but has since undergone a technical correction, retreating towards the 1.2700 level early on Thursday.
- The second estimate of annualized second-quarter Gross Domestic Product (GDP) growth in the US was revised lower to 2.1% from the initial 2.4%, according to the US Bureau of Economic Analysis. Additionally, the ADP reported that private sector employment in August increased by 177,000, falling short of the market's forecast of 195,000.
- Huw Pill, Chief Economist at the Bank of England (BoE), commented on the policy outlook. While expressing concern about inflation, he stated a preference for maintaining interest rates at their current levels for a longer duration.
- The technical perspective for GBP/USD appears to favor a bullish inclination, although there is an ongoing correction. Traders are awaiting key data releases from the US, which could influence the pair's trajectory.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Neutral |
Closing statement: GBP/USD experienced a correction following a recent move to a weekly high. US economic data, particularly GDP growth and employment figures, have contributed to market dynamics. The Bank of England's Chief Economist's comments have also influenced investor sentiment. The pair's technical outlook suggests potential for further bullish movement, and upcoming US data releases will be closely monitored.
GOLD
- XAU/USD is currently trading just below the $1,940 level and has remained relatively stable throughout the day. Traders are cautiously awaiting the release of the highly anticipated monthly employment data from the United States (US) before making significant directional decisions.
- The Non-Farm Payrolls (NFP) report is scheduled for release during the early North American session. This report carries significant weight in shaping expectations regarding the Federal Reserve's (Fed) future policy actions.
- The Fed's next policy moves are closely tied to the performance of the labor market and inflation trends. Positive signs in the labor market, coupled with persistent inflation, could provide the Fed with more room and motivation to maintain higher interest rates.
- Gold may still exhibit strength in the remainder of the year, particularly if global economic conditions deteriorate despite the current high interest rate environment. Recent US GDP data indicated a cooling of the world's largest economy, despite avoiding a recession in the first half of the year.
- The expectation that the Fed will maintain higher interest rates for an extended period is contributing to the stabilization of US Treasury bond yields after a recent pullback from multi-year highs.
Closing statement: XAU/USD has been relatively stable around the $1,940 mark as traders await the NFP report's release. The outcome of this report could significantly influence both gold prices and expectations regarding the Fed's monetary policy direction. Gold's performance in the coming months will likely be closely tied to global economic conditions and inflation trends.
CRUDE OIL
- Crude oil prices have remained stable at three-week highs in Asian trading on Friday. The market's focus is primarily on supply dynamics, which are helping to counterbalance concerns about slowing economic growth.
- Russia's Deputy Prime Minister Alexander Novak announced a new agreement with OPEC+ (Organization of Petroleum Exporting Countries and allies) to further reduce oil supplies. Details of these production cuts are expected to be outlined in the coming week. This agreement adds to ongoing supply cuts by Russia and Saudi Arabia.
- The cumulative impact of production cuts by Russia and Saudi Arabia, along with potential additional cuts, is creating a tighter supply outlook for the remainder of the year. This expectation of reduced supply is supporting higher oil prices.
- The relative weakness in the US dollar, which experienced a three-week low earlier in the week, is also contributing to the upward pressure on oil prices. A weaker dollar tends to make commodities like oil more attractive to international buyers.
- Markets are now awaiting further cues on the US economy and potential interest rate moves. Additionally, economic signals from China, the world's largest oil importer, are also closely monitored for their impact on oil prices.
| SMA (20) | Slightly Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: Crude oil prices are holding steady at three-week highs due to a combination of factors, including deeper production cuts by major oil-producing nations like Russia and Saudi Arabia. These cuts are contributing to a more favourable supply outlook, which is helping to counterbalance concerns about economic growth. Additionally, the relative weakness in the US dollar is providing support to oil prices. The future direction of oil prices will depend on ongoing supply dynamics and economic developments in key markets.
DAX
- The DAX index experienced a correction after rallying earlier in the week to test the 50-day Moving Average (MA). This correction coincided with a strengthening euro and rising expectations of a fresh interest rate hike by the European Central Bank (ECB) in September.
- If the index reverses back below the 15,700 level, it could suggest that sellers are gaining momentum. This may lead to a retest of support levels at 15,500 or potentially even the 200-day MA, which would be seen as a significant bearish development.
- In yesterday’s trading session, Germany's stocks saw gains, with notable contributions from the Retail, Financial Services, and Food & Beverages sectors, which led the overall index higher.
- Germany reported an increase in unemployment numbers for August, surpassing expectations. The Federal Labor Office noted that the number of people out of work rose by 18,000 in seasonally adjusted terms, reaching 2.63 million. This exceeded analysts' forecasts, which had predicted an increase of 10,000.
- The German economy, the largest in Europe, remained stagnant in the second quarter. This lack of growth indicates a continued struggle to recover from a previous recession and highlights Germany's position as one of the weakest major economies globally.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX index experienced a correction after testing the 50-day MA, primarily influenced by a stronger euro and expectations of a forthcoming ECB interest rate hike. The index's future trajectory will depend on how it manages key support levels and external factors such as economic data and central bank policies. The recent rise in unemployment and economic stagnation in Germany raise concerns about the country's economic health.