EURUSD
- The EUR/USD pair experienced upward momentum on Tuesday despite positive US data and rising Treasury yields. It reached a high of 1.0595 before retracing and paring back some of its gains.
- Positive signs emanated from the ZEW survey, particularly in the Eurozone, where the Sentiment Index improved in October, rising to 2.3 from -8.9. This exceeded market expectations and hinted at a more optimistic outlook for the region.
- Looking ahead, the European Central Bank (ECB) will hold its monetary policy meetings next week. The ECB is anticipated to keep rates unchanged for the first time since June 2022.
- Tuesday featured upbeat US economic data, including Retail Sales, which rose 0.7% in September compared to an expected 0.3%, and Industrial Production, which reached 0.3% against an anticipated 0%. Although these figures briefly boosted the US Dollar, its momentum was short-lived.
- The United States published the NY Empire State Manufacturing Index, which showed a decline from 1.9 in September to -4.6 in the current month, indicating a contraction in the manufacturing sector in the New York region.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement:In summary, the EUR/USD pair exhibited fluctuations on Tuesday, with the ZEW survey highlighting improved sentiment in the Eurozone. Upcoming attention is directed toward the ECB's monetary policy meetings and key US economic data, which will play a role in shaping the pair's future movements.
GBPUSD
- The GBP/USD pair is trading in higher territory during the Asian session on Wednesday after facing pressure from upbeat US economic data in the previous session.
- Official data released by the Office for National Statistics (ONS) revealed that the United Kingdom's (UK) Consumer Price Index (CPI) rose at an annual rate of 6.7% in September, matching the figure from August. These results exceeded market expectations of a 6.5% increase.
- The Core CPI index, which excludes volatile food and energy items, accelerated by 6.1% year-on-year in September, compared to a 6.2% increase seen in August. Market consensus was at 6.0%
- The UK's CPI data is closely watched as it offers cues on the Bank of England's (BoE) policy direction and has the potential to increase volatility in Pound Sterling.
- Richmond Fed President Thomas Barkin noted that the current policy is already considered restrictive, adding to the economic sentiment mix.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: the GBP/USD pair is showing positive momentum as the UK's CPI data, exceeding expectations, is influencing the pair. The impact of this data on the BoE's policy decisions and additional remarks from policymakers will be key factors to monitor in the coming sessions.
GOLD
- The Gold price achieved a fresh four-week high of $1,943 early on Wednesday but then entered a phase of consolidation in an upward trend.
- Richmond Fed President Barkin expressed uncertainty regarding the approaching FOMC monetary policy meeting in November. He emphasized that the US central bank cannot rely solely on longer-term higher bond yields to tighten monetary conditions.
- Cautious sentiments have been expressed by numerous Federal Reserve (Fed) officials, reflecting the central bank's prudent approach. There's hesitancy to tighten monetary policy against the backdrop of the current economic landscape.
- In the upcoming American trading session, the market will be focused on a flurry of Fed officials' remarks before the Fed’s Beige Book, which will offer fresh hints on the central bank’s policy path.
- Fedspeak, combined with mid-tier US economic data and corporate earnings results, will be significant drivers for gold traders. Additionally, ongoing Middle East tensions will continue to capture attention.
Closing statement:Gold (XAU/USD) is experiencing a phase of consolidation near a four-week high. Federal Reserve officials' cautious tone suggests a prudent approach to monetary policy, making upcoming Fedspeak and economic data releases important for guiding gold's price action. Geopolitical tensions also remain a key factor to watch.
CRUDE OIL
- Western Texas Intermediate (WTI) oil is currently trading around $87.25 on Wednesday. Oil prices are surging due to escalating tensions in the Middle East, which have raised concerns about potential disruptions in oil supply.
- China's Gross Domestic Product (GDP) for the third quarter (Q3) recorded a 1.3% quarter-on-quarter (QoQ) growth, up from the previous reading of 0.8% expansion. This stronger-than-expected economic recovery in the world's second-largest economy is contributing to the strength in oil prices.
- The American Petroleum Institute (API) reported a significant decrease in US crude oil inventories, with a drop of nearly 4.383 million barrels for the week ending October 13, contrasting with the previous reading of a 12.93 million barrel rise.
- Oil traders are eagerly awaiting the weekly EIA Crude Oil stockpiles report scheduled for release on Wednesday, which could provide further insights into the US oil market.
- Federal Reserve speakers scheduled for this week, including Waller, Williams, Bowman, and Fed Chair Powell, might offer hints about future monetary policy paths. These events could have a substantial impact on the USD-denominated WTI price.
| SMA (20) | Falling |
|
|
| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: In summary, WTI crude oil is witnessing a price surge due to Middle East tensions and is supported by robust economic data from China. The significant drop in US crude oil inventories, along with upcoming reports, will be closely monitored by oil traders. Furthermore, the influence of Federal Reserve speakers on USD-denominated oil prices is an essential factor to consider.
DAX
- The DAX Index recorded a modest gain of 0.09% on Tuesday, closing at 15,252. This followed a positive session on Monday.
- German and Eurozone ZEW Economic Sentiment figures brought a positive surprise to the markets on Tuesday. Sentiment towards the German and Eurozone economies significantly improved in October. The German ZEW Economic Sentiment Index increased from -11.4 to -1.1.
- Ongoing concerns about the Middle East conflict and sentiment regarding Fed interest rate goals will be crucial in testing buyer appetite for DAX-listed stocks.
- The final Eurozone inflation figures are set to be released. Any upward revisions to preliminary inflation figures may exert pressure on the DAX, especially if it leads to heightened expectations of a more hawkish European Central Bank (ECB) policy. .
- With inflation in the spotlight, the scheduled speech by ECB President Christine Lagarde holds importance. A hawkish response from Lagarde to the inflation figures could potentially spook investors and impact the DAX.
| SMA (20) | Falling |
|
|
| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: the DAX Index showed a slight gain on Tuesday, with positive surprises in ZEW Economic Sentiment figures. Ongoing geopolitical concerns and the sentiment surrounding Fed interest rate goals remain influential factors. The Eurozone inflation figures and Christine Lagarde's speech are upcoming events that could sway investor sentiment and the DAX's performance.