EURUSD
- The EUR/USD currency pair displayed some signs of dip-buying interest on Wednesday, although there was a lack of strong bullish momentum.
- The EUR/USD pair continues to trade within a downtrend channel on the daily chart. Furthermore, it remains well below key simple moving averages (SMA), indicating a bearish bias in market sentiment.
- The final reading of the Eurozone Harmonized Index of Consumer Price Index (HICP) indicated a slight revision in the annual inflation rate. In August, it was revised from 5.3% down to 5.2%, while the Core HICP rate remained unchanged at 5.3%. These figures suggest persistently high inflation in the Eurozone.
- The outcome of the Federal Open Market Committee (FOMC) meeting scheduled for today is expected to have a significant impact on the market. The decision reached during this meeting could be a decisive factor for the direction of the US Dollar.
- The US Dollar Index (DXY) experienced a stall in its rally on Monday. However, it hasn't seen significant corrections, and the prevailing bias remains to the upside. This suggests a relatively strong US Dollar.
| SMA (20) | Falling |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The EUR/USD pair is currently showing signs of dip-buying, but overall market sentiment is bearish. The Eurozone's persistently high inflation and the pending FOMC meeting are likely to influence the currency pair's future movements, with market participants exercising caution ahead of the decision.
GBPUSD
- The GBP/USD currency pair faced renewed bearish pressure and dropped to its lowest level in nearly four months, falling below 1.2350.
- Data from the UK revealed that the annual Consumer Price Index (CPI) inflation rate had declined to 6.7%. This figure was below analysts' estimates of 7.1%, and it significantly impacted on the Pound Sterling.
- The Core CPI index, which excludes volatile food and energy items, recorded a year-on-year increase of 6.2% in the reported month. This was a notable deceleration compared to the 6.9% acceleration seen in July, and it fell short of expectations, which had predicted a 6.8% increase.
- On a monthly basis, the UK Consumer Price Index rebounded by 0.3% in August, compared to the 0.7% estimate and the 0.4% decline recorded in July.
- As the market looked ahead to the Bank of England (BoE) meeting, some analysts suggested that while they still expected a rate hike, the impact on the British Pound would depend on whether the BoE could convince the markets that they are prepared to take further action.
| 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: GBP/USD experienced renewed bearish pressure, driven by lower-than-expected UK inflation data. The upcoming BoE meeting is expected to be a crucial event, with market participants keen to assess the central bank's stance on monetary policy and its ability to address inflationary concerns.
GOLD
- Gold price has experienced a slight retreat from its recent two-week high at $1,937, currently trading near the $1,930 level. This movement is primarily attributed to buyers exercising caution in anticipation of the upcoming US Federal Reserve (Fed) interest rate decision, which could dictate the future trajectory of the precious metal.
- From a technical standpoint, gold price is closely hinged to the 50-Daily Moving Average (DMA), and it managed to close above this moving average on the previous day, despite a minor pullback.
- Later in the trading session, the US Dollar gained strength, largely due to a deterioration in market sentiment and rising US yields. This development contributed to a slight decline in gold prices.
- Traders are currently displaying risk aversion, a common sentiment seen prior to major central bank announcements. The caution is particularly evident ahead of the Fed policy announcement and Chairman Jerome Powell's press conference.
- Depending on the Fed's stance and any ambiguity expressed regarding future monetary policy, gold price could potentially see a renewed uptrend, with a target around the $1,950 level.
Closing statement: Gold price experienced a minor retreat from its recent highs as traders exercised caution ahead of the Fed's interest rate decision. The precious metal's future movement will likely be determined by the outcome of the Fed's announcement and Chairman Powell's statements regarding the central bank's policy direction.
CRUDE OIL
- Crude oil prices have seen a retreat from their recent 10-month highs as uncertainty prevails in the market ahead of the U.S. Federal Reserve's interest rate decision. Investors are unsure about the timing of peak interest rates and how these changes will impact energy demand.
- Crude oil is currently trading around the $89.50 mark. It experienced a loss of momentum after reaching its highest level since November 2022 at $93.75.
- There are reports that the Russian government is contemplating imposing export duties of $250 per metric ton on all types of oil products, significantly higher than current fees. This move is proposed from October 1 until June 2024 and aims to address fuel shortages.
- According to data, U.S. crude oil inventories have fallen by nearly 5.25 million barrels for the week ending September 15. This is in contrast to the previous reading, which indicated a rise of 1.174 million barrels, as reported by the American Petroleum Institute (API) on Wednesday.
- Oil traders are closely monitoring the release of the U.S. Energy Information Administration (EIA) Crude Oil Stocks data for the week ending September 15, which is expected to provide further insights into the state of crude oil inventories.
| SMA (20) | Rising |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: Crude oil prices have retreated from recent highs as market uncertainty prevails ahead of the Federal Reserve's interest rate decision. Factors like the potential Russian export duties and the continuous monitoring of U.S. crude oil inventories will influence crude oil's future direction in the market.
DAX
- Germany's DAX index experienced a decline after the close of trading on Tuesday. The losses were driven by sectors such as Transportation & Logistics, Construction, and Retail, which led the overall market lower.
- In recent trading sessions, the DAX remained below the trend line and the 20-day Simple Moving Average (SMA). These price movements sent bearish signals in the near term. However, it's worth noting that the DAX remained above the 200-day SMA, indicating a longer-term bullish sentiment.
- Germany's producer prices fell by 12.6% on a year-over-year basis in August. This decline in producer prices is seen as a positive sign for easing inflationary pressures in Europe's largest economy.
- Germany's producer price index, a critical gauge for inflation, has shown a consistent decline in the past year, following the surge in energy costs and supply chain disruptions caused by Russia's invasion of Ukraine in February 2022.
- The Organization for Economic Co-operation and Development (OECD) has revised the growth outlook for the Eurozone. It lowered the growth forecast for this year to 0.6%, down from 0.9% in June. However, it expects growth to pick up next year to 1.1%, although this is also a downgrade from the previous forecast of 1.5% in June. Germany's return to growth is anticipated to play a role in this recovery.
| SMA (20) | Neutral |
| RSI (14) | Neutral |
| MACD (12, 26, 9) | Neutral |
Closing statement: The DAX experienced a decline, driven by losses in specific sectors. While near-term indicators suggest bearishness, the DAX remains above the 200-day SMA, indicating a more positive long-term sentiment. Additionally, easing producer prices in Germany and the OECD's growth outlook adjustments for the Eurozone are factors influencing market dynamics.