EURUSD
- The EUR/USD currency pair is currently experiencing a period of consolidation with a slight negative bias. It is trading around the 1.0740 level, which is close to the psychological level of 1.0750.
- Investors are closely monitoring the upcoming policy meeting of the European Central Bank (ECB) scheduled for Thursday. There is a general expectation in the market that the ECB will adopt a dovish stance and keep interest rates unchanged.
- Although the market anticipates a dovish approach from the ECB, it's important to note that any unexpected or surprising actions or statements from the ECB during the meeting could still have the potential to unsettle the markets and introduce uncertainty regarding the future trajectory of the EUR/USD pair.
- The European Commission recently revised its growth forecast for 2023, lowering it from 1.1% to 0.8%. This downward revision is primarily attributed to Germany, which is expected to see a contraction of 0.4% in its economy. Weaker economic growth in the Eurozone can weigh on the euro's performance.
- The stronger economic position of the United States continues to provide support for the US dollar in the market, contributing to the pressure on the EUR/USD pair.
| 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: EUR/USD is currently consolidating with a slight negative bias as traders await the ECB policy meeting. While market expectations are dovish, any surprises during the meeting could lead to significant price movements. Additionally, economic challenges in the Eurozone and the relative strength of the US economy are influencing the pair's dynamics.
GBPUSD
- GBP/USD is currently holding steady above the 1.2500 level. This follows a consolidation phase after the pair retreated from 1.2550 earlier on Tuesday.
- Market sentiment for GBP/USD appears cautious as traders are awaiting the release of UK employment data. This data is expected to provide fresh insights into the Bank of England's (BoE) interest rate outlook.
- Recent data released on Tuesday showed that the UK's unemployment rate increased to 4.3% in July, up from 4.2% the previous month. However, the claimant count for August only rose by 900. These indicators suggest a potential weakening in the UK labor market.
- Despite the signs of a weaker labor market, average earnings continued to rise at a rate of 7.8%. This indicates that the BoE still needs to address wage-based inflationary pressures, which could impact its policy decisions.
- BoE policymaker Catherine Mann recently emphasized that it's too soon to stop raising interest rates. The central bank is widely anticipated to announce another 25-basis point rate hike in the near future.
| 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: GBP/USD is currently in a steady consolidation phase above 1.2500. Traders are closely monitoring UK employment data for clues about the BoE's monetary policy direction. Despite some signs of labour market weakness, wage-driven inflationary pressures may influence the BoE's decision to continue raising interest rates.
GOLD
- Gold prices are currently facing challenges in breaking above a significant falling trendline that has been in place since May. This trendline resistance appears to be a key technical level that gold is contending with.
- The US Dollar is displaying resilience and gaining ground after experiencing a notable decline, which was largely driven by profit-taking. This cautious sentiment is influencing gold's price dynamics.
- US Treasury bond yields continue to find support, driven by optimism regarding a "soft landing" for the US economy. This positive sentiment is contributing to the strength of the US Dollar.
- Market participants are exercising caution and refraining from making significant moves as they await the release of the Consumer Price Index (CPI) data from the United States, scheduled for Wednesday. This data is of great importance as it will have a significant impact on the interest rate outlook of the US Federal Reserve (Fed).
- The sentiment surrounding the Fed's policies and broader risk trends will remain key factors influencing the price action of gold. Any developments related to the Fed's stance on interest rates will be closely watched by traders.
Closing statement: Gold prices are currently encountering resistance at a crucial falling trendline. Caution prevails in the market as traders await the release of the US CPI data and monitor the Fed's sentiment and overall risk trends, all of which could significantly impact gold's price trajectory.
CRUDE OIL
- Crude oil prices experienced relatively stable trading in the Asian market session on Tuesday. This stability comes as market participants eagerly await the release of forecasts on supply and demand in the upcoming OPEC report, scheduled for later in the day.
- Prices for crude oil remain close to their 10-month highs, primarily due to the optimism surrounding recent supply cuts. Key producers like Saudi Arabia and Russia have implemented deeper-than-expected production cuts, bolstering expectations of reduced supply in the market.
- The OPEC report is expected to provide valuable insights into supply dynamics, particularly in light of the recent production cuts by major oil-producing nations. Forecasts related to demand will also be closely scrutinized, given concerns about a potential resurgence in inflation that could trigger additional interest rate hikes by major central banks.
- The OPEC report may include assessments of China's role in global oil demand. While China's oil imports have remained robust this year, there are growing concerns about the country's economic activity cooling, which could impact local fuel demand. As such, any data or forecasts related to China will be closely watched.
- In addition to the OPEC report, the International Energy Agency (IEA) is set to release its monthly report on Wednesday. This report will provide further insights into global oil supply and demand dynamics, potentially influencing oil prices.
- It's worth noting that a stronger US dollar can have a dampening effect on crude oil demand. A stronger dollar makes oil more expensive for international buyers, which can potentially reduce global oil consumption.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: Crude oil prices are holding near their 10-month highs as traders await the OPEC report for crucial supply and demand forecasts. The market is closely monitoring developments related to supply cuts, China's demand, and the impact of a stronger US dollar on oil prices. These factors will likely shape the direction of crude oil in the near term.
DAX
- The DAX, Germany's primary stock index, achieved a notable two-day winning streak on Monday, a significant turnaround from its performance in August when it faced challenges.
- One of the factors supporting the recent gains in the DAX is the release of inflation data from China. These numbers, which likely had a positive impact on global markets, contributed to the DAX's upward momentum.
- In the upcoming European session, investors will pay attention to German wholesale price data for August. A less significant decline in wholesale inflation could signal an increase in demand, which would be viewed as a positive sign.
- Another important factor for the DAX will be the release of the German and Eurozone ZEW Economic Sentiment numbers. Economists' forecasts suggest a potential decline in sentiment for both regions. The German ZEW Economic Sentiment Index is expected to fall from -12.3 to -15.0, while the Eurozone Index may decline from -5.5 to -6.2. These figures could influence buyer sentiment and market direction.
- The DAX's recent performance has been supported by reduced expectations of further interest rate hikes by both the European Central Bank (ECB) and the Federal Reserve (Fed). This has been viewed positively by investors.
- While the DAX has seen recent gains, investors remain watchful of upcoming events, particularly the US Consumer Price Index (CPI) Report. This report can have a significant impact on global financial markets, including the DAX, as it provides insights into inflation trends in the United States.
| SMA (20) | Neutral |
| RSI (14) | Neutral |
| MACD (12, 26, 9) | Neutral |
Closing statement: The DAX has experienced a two-day winning streak, partially due to positive factors such as China's inflation data and easing rate hike expectations. However, upcoming economic reports, including German wholesale prices and ZEW Economic Sentiment, will play a role in shaping market sentiment. Additionally, the US CPI Report is a critical event that investors are monitoring closely for its potential impact on the DAX and global markets.