EURUSD
- The EUR/USD currency pair has experienced a modest recovery and is currently trading around 1.0725. This rebound follows a decline that saw the pair reach a low of 1.0697. The recovery is mainly attributed to downward pressure on the U.S. Dollar.
- U.S. Treasury Secretary Janet Yellen made statements indicating her growing confidence that the United States can control inflation without causing significant disruptions in the labor market. This sentiment might have contributed to the weakening of the U.S. Dollar.
- Market analysts believe that the European Central Bank (ECB) is likely to keep interest rates unchanged at its upcoming policy meeting, which is scheduled for Thursday. This expectation is a key factor influencing the Euro.
- Eurozone Gross Domestic Product (GDP) data for the second quarter (Q2) showed a growth rate of 0.1%, which is lower than the 0.3% growth in the previous quarter and fell short of the 0.3% estimate. This data might be contributing to a somewhat cautious outlook for the Eurozone economy.
- The focus is expected to shift to the upcoming ECB monetary policy meeting, scheduled for Thursday. This event could provide clearer direction for the EUR/USD currency pair, as decisions and statements made during the meeting can have a significant impact on the Euro's value relative to the U.S. Dollar.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The EUR/USD currency pair is currently experiencing a recovery, partly driven by Janet Yellen's comments on inflation and expectations of unchanged interest rates by the ECB. The Eurozone's recent GDP data and the upcoming ECB policy meeting are expected to be important factors influencing the pair's direction in the near term.
GBPUSD
- The performance of the British Pound (GBP) in the GBP/USD currency pair has been influenced by relatively dovish comments from officials of the Bank of England (BoE) in the past week. These comments have contributed to a weaker Pound.
- On the other hand, the U.S. Dollar (USD) has been supported by positive economic data, maintaining its strength against major currencies like the Pound. Strong economic indicators from the United States have bolstered the dollar's position.
- The British Chambers of Commerce (BCC) released a report indicating that the UK is expected to avoid a recession, but economic growth will likely be minimal. This assessment of the UK's economic conditions has played a role in tempering expectations for tightening by the Bank of England and has consequently weakened the Pound.
- Despite the recent data and dovish comments from BoE officials, there is still a likelihood of a 25-basis point interest rate hike by the BoE in September. Furthermore, additional rate hikes by the end of the year cannot be ruled out if inflation figures surprise to the upside. This anticipation of central bank policy decisions is affecting the Pound's performance.
- The focus of traders and investors is expected to shift to upcoming UK employment and GDP data, as well as the U.S. Consumer Price Index (CPI). These data releases are crucial in the run-up to the Bank of England and Federal Open Market Committee (FOMC) decisions scheduled for September 20 and 21, respectively.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The GBP/USD currency pair has been influenced by dovish BoE comments, strong U.S. economic data, and the UK's economic outlook. Anticipation of central bank decisions and upcoming economic data releases will likely continue to be key factors impacting the pair's performance in the near term.
GOLD
- The performance of gold (XAU) in the XAU/USD pair has been influenced by upbeat economic data coming from the United States. This data has lent support to the narrative of higher interest rates prevailing in the US for an extended period.
- According to the CME FedWatch Tool, markets have been pricing in the possibility of a 93% chance of a rate hold at the September meeting of the Federal Reserve (Fed) and a 43.5% chance of a rate hike at the November meeting. These expectations regarding interest rates are impacting the dynamics of the XAU/USD pair.
- Various Fed officials have made statements that contribute to the overall outlook. Fed Governor Christopher Waller mentioned that the Fed has room to raise interest rates, but it will depend on the data. This suggests a data-dependent approach by the Fed. Chicago Fed President Austan Goolsbee outlined the central bank's goal of achieving a "golden path," which represents a scenario where inflation falls without causing a recession. These comments offer insights into the Fed's mindset.
- Fed Boston President Susan Collins expressed concerns about adopting an overly restrictive monetary policy stance. She called for a patient and careful, but deliberate policy. This cautious approach is another factor influencing gold prices.
- On Wednesday, investors will be closely watching the release of the US Consumer Price Index (CPI) for August. The monthly figure is anticipated to increase by 0.5%, while the monthly core figure is expected to remain unchanged at 0.2%. This CPI data release will be a significant event for gold traders as it can provide fresh cues about the central bank's interest rate decisions.
Closing statement: The performance of gold in the XAU/USD pair is being influenced by the narrative of higher interest rates in the US, expectations regarding Fed policy decisions, and the cautious approach of Fed officials. The upcoming release of the US Consumer Price Index (CPI) will likely be closely monitored by traders for its potential impact on gold prices.
CRUDE OIL
- Crude oil prices recently experienced a significant rally, reaching near 10-month highs. However, on Monday, profit-taking activities were observed, leading to a temporary decline in prices. This pullback followed a robust price surge over the past month.
- Last week, oil prices saw a strong uptrend primarily due to announcements from major oil-producing nations, Saudi Arabia and Russia. These nations declared deeper-than-expected supply cuts for the remainder of the year. This news heightened expectations of market tightness, which, in turn, helped offset concerns about potential demand decreases caused by rising interest rates.
- The focus this week is on the release of monthly reports from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA). These reports provide insights into their respective forecasts for oil markets. Both OPEC and the IEA have consistently expected tighter supplies to drive oil prices higher in the current year. They have also emphasized that crude oil demand remains relatively strong, thanks to China's economic recovery.
- Recent data indicates that China's economy has been cooling off despite the earlier lifting of anti-COVID restrictions in the country. However, China's oil imports have remained stable, indicating continued demand for crude oil. This factor contributes to the overall outlook for oil prices.
| SMA (20) | Rising |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Rising |
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Closing statement: Crude oil prices experienced profit-taking after a significant rally, driven by deeper supply cuts by major oil-producing nations. The focus is now on reports from OPEC and the IEA, which are expected to provide insights into oil market forecasts. Additionally, the stability of China's oil imports continues to support crude oil prices amid concerns about the cooling Chinese economy and rising interest rates.
DAX
- European stock markets are expected to open with marginal gains on Monday. Investor sentiment appears cautious as they await the upcoming policy-setting meeting by the European Central Bank (ECB) scheduled later in the week.
- In the futures market, the DAX futures contract in Germany traded 0.4% higher, while CAC 40 futures in France saw a gain of 0.62%, and the FTSE 100 futures contract in the U.K. rose by 0.26%.
- Recent data from Destatis indicated that the German Harmonized Consumer Price Index (HICP) for August came in at 6.4% year-on-year, meeting market expectations. The core Consumer Price Index (CPI) remained steady at 6.1%. This data reflects persistently high inflation in Germany.
- The ECB is set to meet on Thursday, and there is a significant degree of uncertainty among investors regarding the meeting's outcome. This uncertainty stems from the confluence of elevated price pressures and data showing a sharp slowdown in economic activity within the Eurozone.
- Data released last week revealed that gross domestic product (GDP) in the eurozone grew by a mere 0.1% in the second quarter compared to the previous three months. This sluggish growth rate raises concerns about the region's economic health.
| SMA (20) | Neutral |
| RSI (14) | Neutral |
| MACD (12, 26, 9) | Neutral |
Closing statement: The DAX is expected to open with slight gains as investors approach the upcoming ECB meeting with caution. German inflation remains high, and the Eurozone's economic growth has slowed considerably. These factors contribute to the uncertainty surrounding the ECB's policy decisions.