EURUSD
- A resurgence in the US Dollar has driven the EUR/USD pair lower, retreating from weekly highs above 1.0630 to levels near 1.0520.
- Technical indicators on the daily chart have turned bearish. Additionally, the price has fallen below the 20-day Simple Moving Average (SMA), indicating a potential shift in momentum favoring the US Dollar.
- US economic data continues to favor the US Dollar, and the accompanying higher Treasury yields have added to the downward pressure on the EUR/USD pair. This has contributed to the recent decline.
- The European Central Bank (ECB) released the minutes of its September meeting, revealing that "a solid majority of members" supported a 25-basis points interest rate hike. However, the document did not significantly impact the Euro.
- On Friday, Eurostat is set to release Industrial Production data for August. Additionally, ECB President Lagarde will participate in a panel discussion at the annual meeting of the World Bank and the International Monetary Fund. These events can influence the EUR/USD pair's direction.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The EUR/USD pair has encountered pressure due to a stronger US Dollar, as indicated by technical indicators and fundamental factors. Further developments, including upcoming data releases and speeches, are likely to guide the pair's movements.
GBPUSD
- GBP/USD has retraced recent losses and is trading higher around the psychological level of 1.2200.
- The US Bureau of Labor Statistics (BLS) released data indicating that the US CPI exceeded expectations in September, with annual figures consistently rising at a rate of 3.7%, slightly surpassing the estimated 3.6%. This indicates strong inflationary pressures.
- Despite a modest increase of 209K in Initial Jobless Claims for the week ending October 6, this figure was slightly below the forecast of 210K, suggesting a subtle easing in jobless claims.
- Upbeat economic data from the US has led to discussions about the trajectory of the Federal Reserve's (Fed) monetary policy. The strong CPI figures might raise expectations of further interest rate hikes to combat inflation.
- On the other hand, UK economic data failed to boost confidence in the Pound Sterling (GBP) on Thursday. Manufacturing and Industrial Production figures fell short of expectations, with Manufacturing Production declining by 0.8% in August, missing the forecast of a 0.4% decline. This was a reversal from the previous month's 1.2% dip.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The GBP/USD pair is experiencing a rebound after recent losses, but the strong US CPI data and subdued UK economic data have added uncertainty to the exchange rate's direction. Speculation about the Fed's monetary policy will likely continue to influence this pair.
GOLD
- Gold experienced an intraday turnaround, retreating from the $1,885 region, which marked a more than two-week high. It settled near the lower end of its daily trading range on Thursday.
- In the United States, consumer prices rose more than expected in September. This data has raised expectations that the Federal Reserve will maintain higher interest rates for an extended period.
- The US inflation data has reinforced the Federal Reserve's narrative of "higher rates for longer." This strengthened the US Dollar and caused US Treasury bond yields to rise from their recent two-week lows.
- Boston Fed President Susan Collins commented on the latest inflation report, highlighting the uneven progress in restoring price stability. She reiterated her view that the central bank might need to raise rates again to combat inflation.
- The probability of a rate hike by the Federal Reserve in December spiked to 38%, according to the CME FedWatch tool. This is compared to approximately 28% before the inflation report. Currently, markets are pricing in a 30% chance of a final Fed rate hike in December.
Closing statement: Gold faced selling pressure as strong US consumer price data increased the likelihood of the Federal Reserve maintaining higher interest rates. The precious metal retreated from its recent highs, and its future performance may be influenced by the Fed's monetary policy decisions and any further developments on the inflation front.
CRUDE OIL
- West Texas Intermediate (WTI) Crude Oil prices are struggling to make significant gains on Friday. They have been oscillating in a narrow range, hovering around the mid-$83.00s during the Asian trading session.
- Despite the lack of strong upward momentum, Crude Oil has managed to stay above the weekly low recorded on Thursday. It is drawing support from ongoing supply concerns in a market that is already characterized as tight.
- The United States has taken a tougher stance against Russia, imposing sanctions on two shipping companies for carrying Russian oil that was purchased at a price exceeding the $60/barrel price cap imposed by G7 countries last year.
- OPEC has maintained its forecast for growth in global oil demand. It cited indications of a resilient world economy in the current year and anticipated further demand recovery in China.
- The International Energy Agency (IEA), in its monthly oil market report, has increased its global oil demand growth forecast for 2023 to 2.3 million barrels per day (bpd) from the previous estimate of 2.2 million bpd. However, it has downgraded the forecast for the following year to 880,000 bpd from 1 million bpd.
- Concerns about potential supply disruptions due to the Israel-Palestinian conflict have receded. This development is likely to limit the upside for Crude Oil prices.
| SMA (20) | Falling |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Falling |
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Closing statement: WTI Crude Oil prices are currently showing limited upward momentum. They are supported by ongoing supply concerns and optimistic demand forecasts, although the threat of supply disruptions has diminished. Ongoing geopolitical and economic factors will likely continue to influence Crude Oil's price direction.
DAX
- On Thursday, the DAX faced a decline of 0.23%. This reversal of the 0.24% gain recorded on the previous day pushed the DAX to close the day at 15,425.
- During the trading session, the DAX experienced mixed factors influencing its performance. While the release of the European Central Bank (ECB) minutes garnered investor attention, it was the US Consumer Price Index (CPI) Report that significantly impacted the DAX's movement. A US CPI report indicating higher inflation than expected increased the likelihood of a Federal Reserve (Fed) interest rate hike. This raised concerns among investors about demand for riskier assets, which negatively affected the DAX.
- In the next session, Eurozone industrial production figures are expected to be a focal point for investors. Economists anticipate that industrial production will increase by 0.1% in August, compared to a decline of 1.1% in July. These figures could provide insight into the economic activity within the Eurozone.
- Following the release of the ECB's monetary policy meeting minutes, ECB President Christine Lagarde may offer further guidance on interest rate goals. Her participation in the IMF/World Bank Annual Meetings is an important platform for potential insights into the ECB's policy direction.
- The DAX continues to face challenges related to the German economy's negative outlook. These challenges exist alongside the ECB's plans to maintain higher interest rates for an extended period.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX experienced a decline on Thursday influenced by both domestic and international factors. Upcoming Eurozone industrial production data and ECB President Lagarde's statements may provide further guidance on the DAX's direction, while the negative outlook for the German economy remains a prominent concern for investors. The DAX's performance will likely be sensitive to both global economic conditions and central bank policies.