EURUSD
- EUR/USD continued to trade above 1.0750, maintaining a narrow trading band for the second consecutive day on Tuesday. The pair's movements were likely influenced by the anticipation of upcoming economic events and central bank decisions.
- On Tuesday, market attention turns to the ZEW survey, with an expected deterioration in both the Eurozone and German Economic Sentiment Index for December. The ZEW survey results could provide insights into the economic outlook and sentiment in the Eurozone.
- The primary focus for EUR/USD traders is the European Central Bank (ECB) meeting scheduled for Thursday. Market expectations are for no change in interest rates during this meeting. Traders await guidance and commentary from ECB officials regarding monetary policy and economic conditions in the Eurozone.
- In the US, attention is on the Consumer Price Index (CPI) data releasing today. Projections indicate a 0.1% month-on-month inflation increase in November, with the Core CPI expected to be at 0.3%. The annual CPI is projected at 3.1%, slightly lower than the 3.2% recorded in October.
- The Federal Open Market Committee (FOMC) meeting begins on Tuesday, and the announcement is set for Wednesday. While no surprises are expected, the focus is on new economic projections and any shifts in the Fed's monetary policy stance.
| SMA (20) | Rising |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: EUR/USD exhibited a consolidative trend around 1.0750 during the week, with market participants closely monitoring economic indicators, central bank meetings, and inflation data. The ECB meeting and the US CPI release are key events shaping the currency pair's trajectory, with an emphasis on any shifts in policy outlooks.
GBPUSD
- GBP/USD showed signs of recovery, approaching the 1.2600 level in early European trading on Tuesday. The currency pair attempted to regain ground after facing challenges amid a cautious market mood at the beginning of the week.
- The USD held its ground as a cautious market sentiment prevailed. The global market mood often influences the performance of major currency pairs, and in this case, it restrained the GBP/USD from making substantial gains.
- Key economic data from the United Kingdom was released, indicating that the ILO Unemployment Rate held steady at 4.2% in the three months to October. This data provided insights into the labor market conditions in the UK during the specified period.
- Additional details from the report highlighted that the number of people claiming jobless benefits increased by 16K in November, surpassing the October figure of 8.9K. Despite the increase, the actual number beat the estimated rise of 20.3K.
- Traders are preparing for significant events in the latter part of the week, with both the Federal Reserve and the Bank of England scheduled to release their monetary policy decisions. These decisions could have a substantial impact on GBP/USD, depending on the policies and guidance provided by the central banks.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: GBP/USD experienced a recovery phase early in the week, driven by a mix of economic data and anticipation of central bank decisions. The steady UK ILO Unemployment Rate and the increase in jobless benefits claimants provided context for the currency pair's movements. Traders are closely monitoring central bank decisions as potential catalysts for further GBP/USD dynamics.
GOLD
- The focus in the Gold (XAU/USD) market revolves around the upcoming release of the US Consumer Price Index (CPI). Forecasts indicate an anticipated annual rise of 3.1% in November, slightly lower than the previous increase of 3.2%. The Core CPI, excluding volatile food and energy prices, is expected to remain steady at 4.0% year-on-year.
- On a monthly basis, the headline US CPI is projected to rise by 0.1%, while the Core CPI is expected to show a 0.3% increase in November. These figures are being closely monitored by market participants for insights into the inflationary pressures within the US economy.
- The Gold market is sensitive to the potential outcomes of the US CPI data. A hotter-than-expected CPI could trigger fresh buying interest around the US Dollar and push up US Treasury bond yields. This scenario would suggest that the Federal Reserve might maintain higher interest rates for a more extended period to curb inflation, countering market expectations of an early rate cut, possibly as soon as March.
- Conversely, a sharp slowdown in the pace of CPI acceleration in the US could reinforce expectations of a Fed rate cut, weighing on the US Dollar and bond yields. This dynamic could act as a supportive factor for Gold, a traditional hedge against inflation and economic uncertainties.
- The underlying strength in the US Dollar, influenced by receding expectations of a March Fed rate cut, was noted. The strong US Nonfarm Payrolls (NFP) print contributed to this sentiment, influencing the broader market perception regarding the Federal Reserve's monetary policy stance.
Closing statement: The Gold market's attention is centred on the US CPI data, with expectations and reactions tied to the potential impact on the US Dollar and Treasury bond yields. The outcome of the CPI release is anticipated to shape investor sentiment and influence Gold's trajectory, considering its role as a safe-haven asset and its sensitivity to inflation dynamics.
CRUDE OIL
- West Texas Intermediate (WTI) crude oil prices were in focus as they attempted to extend gains for the fourth consecutive session. The market sentiment was influenced by multiple factors, including key economic data and geopolitical tensions.
- Traders are keeping a close eye on the upcoming release of the US Consumer Price Index (CPI) data for November. The CPI figures are expected to provide insights into inflationary pressures in the US, influencing market expectations regarding the Federal Reserve's monetary policy decisions.
- The anticipation for the Federal Open Market Committee (FOMC) policy decision on Wednesday is a significant factor. Market expectations are for no change in policy rate adjustments. The Fed's stance on interest rates could impact the US Dollar, subsequently influencing oil prices.
- The situation in the Red Sea added to the overall market uncertainty. Iran-backed Houthis threatened to disrupt shipping, contributing to geopolitical tensions. Such geopolitical concerns often have the potential to impact oil prices due to the threat to global oil supply routes.
- Challenges in the oil market persisted due to ongoing concerns about global demand. Weak economic data from China, the largest oil importer, and other major economies raised questions about the strength of oil demand in the face of economic headwinds.
- The growth in US shale oil operations continued to exceed expectations, presenting a potential source of increased oil supply. Additionally, gains across other non-OPEC (Organization of the Petroleum Exporting Countries) producers were noted to be unexpectedly large, adding to the overall supply dynamics.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The Crude Oil market was influenced by a combination of economic data, geopolitical tensions, and supply dynamics. Traders are closely monitoring the US CPI data and the Federal Reserve's decisions for cues on future market trends. Geopolitical risks and concerns about global demand remained key considerations for oil market participants.
DAX
- The DAX, Germany's leading stock index, achieved a new All-Time High on Monday, signaling positive momentum in the equity market. This occurred despite a weak macroeconomic backdrop characterized by mixed economic indicators.
- While survey-based reports suggested an improving economic environment, indicators such as factory orders, industrial production, and trade data presented a gloomier picture. This discrepancy highlighted the challenges in assessing the true health of the German and Eurozone economies.
- Monday saw no significant economic indicators from the euro area that could directly influence investor sentiment. The absence of key data might have led investors to rely on broader market trends and global factors.
- On Monday, attention was drawn to US Consumer Inflation Expectations, which showed consumers projecting softer inflation. This information could have implications for global markets, including European equities.
- Tuesday is expected to bring ZEW Economic Sentiment numbers for both Germany and the Eurozone. Investors are likely to closely scrutinize these figures for insights into the economic outlook. However, the impact on the European Central Bank's (ECB) interest rate trajectory is considered limited.
- In addition to economic indicators, investors are advised to monitor commentary from the European Central Bank (ECB). ECB Executive Board member Elizabeth McCaul is scheduled to speak, and any hints or insights into the ECB's policy direction could influence market sentiment.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX's attainment of a new All-Time High showcased the resilience of the equity market amid economic uncertainties. Investors are navigating through mixed economic signals and await key indicators and central bank commentary for a clearer understanding of the market's trajectory.