EURUSD
- Despite an overall risk-averse market and in contrast to a weaker US dollar, the EUR/USD rose on Thursday, heading towards its highest daily close in over a week.
- The EUR/USD appeared to be capped just below the psychologically significant mark of 1.0600 during the early European session on Friday.
- The next significant event in focus is the European Central Bank (ECB) meeting scheduled for the upcoming week. Market expectations are for key interest rates to remain unchanged for the first time since June of the previous year.
- Economic data from the United States, released on Thursday, presented a mixed picture. While Initial Jobless Claims dropped below 200,000, a positive sign, Continuing Claims rose to 1.734 million, reaching their highest level since July. Additionally, Existing Home Sales fell to 3.96 million, marking the lowest level in 13 years. Furthermore, the Philly Fed Manufacturing Index was reported at -9 in October, falling below the market consensus of -6.6. These figures collectively did not favor the US dollar.
- As for Friday, no key reports were scheduled, indicating that the day's performance might be driven by existing market conditions.
| SMA (20) | Falling |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement:In summary, the EUR/USD demonstrated strength on Thursday, despite market risk aversion and a weaker US dollar. The pair faces resistance around the 1.0600 mark, and market attention is directed toward the upcoming ECB meeting. Mixed US economic data provided some support for the EUR/USD, while Friday had no significant events on its economic calendar.
GBPUSD
- On Friday, the GBP/USD retreated from recent gains as risk-off sentiment prevailed, with the pair trading lower around 1.2110 during the Asian session.
- In the preceding session, the pair had found support from a weakened US dollar (USD), which followed comments made by Federal Reserve (Fed) Chairman Jerome Powell.
- The United Kingdom's Retail Sales data released in the morning indicated a 0.9% drop over the month in September, in contrast to an expected -0.1% and the 0.4% recorded in August.
- Annual Retail Sales in the UK decreased by 1.0% in September, compared to expectations of 0%, and August's 1.3% decline.
- Core Retail Sales in the reported month dropped 1.2%, falling short of the 0% expected, but slightly better than the -1.3% recorded previously.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Neutral |
Closing statement: on Friday, the GBP/USD faced pressure as risk-off sentiment dominated, leading to trading lower around 1.2110 during the Asian session. In the previous session, the pair had gained some ground due to a weaker US dollar following comments from Fed Chairman Jerome Powell. Additionally, disappointing UK Retail Sales data added to the downward pressure on the GBP/USD, indicating some challenges for the UK economy.
GOLD
- Gold price is currently positioned at its highest level since July, near $1,980, maintaining its ongoing bullish momentum as of early Friday.
- Gold's rise is underpinned by the escalation of geopolitical tensions between Gaza and Israel, making it a preferred safe-haven asset. This rally in gold is occurring despite the ongoing surge in US Treasury bond yields.
- Federal Reserve Chair Jerome Powell recently hinted at his preference for the central bank to maintain unchanged interest rates in the near term. He emphasized that inflation remains a risk. This stance aligns with the broader discussions within the Fed, indicating a commitment to steady rates if inflation continues to slow and the economy does not exhibit further strengthening.
- Gold traders will remain vigilant about developments in the ongoing Middle East conflict, which is one of the key drivers for gold's recent gains. Additionally, the flow of trading activity at the end of the week could influence gold price action.
- While the US economic calendar is data-light on Friday, speeches from Fed officials Patrick Harker and Loretta Mester will be closely watched for fresh insights into the Fed's policy outlook. These speeches are particularly relevant as the central bank enters its 'blackout period' starting from Saturday, where Fed officials typically refrain from making policy-related comments.
Closing statement:Gold (XAU/USD) is on an upward trajectory, touching its highest level since July, largely driven by escalating geopolitical tensions and supportive comments from Federal Reserve Chair Jerome Powell. The ongoing Middle East conflict remains a focal point for gold traders, and upcoming speeches by Fed officials could provide further guidance on the precious metal's price movement.
CRUDE OIL
- Western Texas Intermediate (WTI) crude oil price has been on a winning streak for the fourth consecutive day, with the price trading higher around $89.30 per barrel during the Asian session on Friday.
- The recent surge in oil prices is primarily attributed to concerns that the Israel-Gaza conflict may escalate further across the Middle East. This escalation could potentially disrupt supplies from one of the world's leading oil production regions.
- Contributing to the bullish backdrop for oil prices is the low inventory levels in the United States (US). The US government has initiated plans to refill the country's Strategic Petroleum Reserve (SPR), which is a key component of the support.
- The US government's move involves purchasing 6 million barrels of crude oil for delivery to the SPR in December and January. This effort aims to replenish the emergency stockpile, as announced by the US Department of Energy on Thursday.
- Sources within OPEC+ have communicated to Reuters that any recovery in production from Venezuela is expected to be gradual. This gradual recovery minimizes the need for swift adjustments in the policies of the OPEC+ group.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement:In summary, Western Texas Intermediate (WTI) crude oil has experienced a four-day winning streak, driven by concerns over the potential escalation of the Israel-Gaza conflict and low inventory levels in the United States. The US government's initiative to refill the Strategic Petroleum Reserve further supports oil prices. Additionally, the expectation of a gradual production recovery in Venezuela has implications for OPEC+ policies.
DAX
- On Thursday, the DAX experienced a decline of 0.33%, following a substantial 1.03% slide on Wednesday, closing the day at 15,045.
- Germany's Producer Price Inflation dropped to -0.20% in September from 0.30% in August of 2023. Notably, Producer Prices decreased by 14.70% in September 2023 when compared to the same month in the previous year.
- The monthly decline in producer prices has raised concerns about the potential of a German recession. This decrease in producer prices is indicative of a weak demand environment, which can have broader economic implications.
- On the calendar for Friday, ECB Executive Board member Elizabeth McCaul is scheduled to speak. Her remarks could provide insights into the central bank's stance on further interest rate hikes, influencing the buyer appetite for DAX-listed stocks.
- As an overarching consideration, investors are urged to closely monitor news updates regarding the Middle East. Any escalation in the conflict in that region could significantly impact market risk appetite.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: the DAX faced consecutive declines, reflecting concerns about weakening demand as indicated by a drop in producer prices. Attention is also directed towards an ECB executive's remarks regarding interest rate policies, with implications for DAX-listed stocks. Additionally, the situation in the Middle East remains a critical factor impacting market sentiment.