EURUSD
- The EUR/USD sustained its bearish momentum on Tuesday, with losses amounting to 0.43%. The pair hit a new monthly low at 1.0832, potentially signaling an extension of its decline towards the 200-day Moving Average situated around 1.0795.
- In response to the euro's weakness, the dollar saw an uptick. The US Dollar Index (DXY), measuring the dollar's value against six major currencies, posted a gain of 0.26% at 103.591.
- The National Association of Realtors (NAR) released data indicating a 2.2% decrease in Existing Home Sales for July, adding to the mix of market influences.
- The Richmond Fed revealed its Manufacturing Index for August, aligning with expectations by dropping 7 points. Interestingly, its Services Index surpassed estimates, reaching a positive value of 4.
- The upcoming release of S&P Global's PMIs on Wednesday could play a pivotal role in dictating the near-term direction of EUR/USD, potentially adding more clarity to the prevailing market trends.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: This update sheds light on the continued bearish movement of the EUR/USD, resulting in new monthly lows. The strengthening dollar and its impact on the pair, along with notable economic data releases, set the stage for the next market moves. The release of S&P Global PMIs is anticipated to be a key factor in shaping the near-term trajectory of EUR/USD.
GBPUSD
- GBP/USD exhibits a positive tone in the European morning on Wednesday, hovering around the 1.2750 mark.
- The pair's technical landscape indicates a budding bullish momentum. However, potential buyers of the Pound Sterling might prefer to wait until GBP/USD clears the hurdle at 1.2830 before considering additional long positions.
- In a parallel development, the UK's FTSE 100 Index commenced the trading session in the green, demonstrating a 0.36% rise so far. This suggests that risk sentiment is playing a dominant role in financial markets on the given day.
- S&P Global's preliminary August Manufacturing and Services PMI surveys for the UK, scheduled for today, are anticipated to offer insights into the current economic conditions and trends.
- On the US side, the economic agenda for the day features a mix of events, including speeches by Fed officials, the release of S&P Global PMIs, data on Durable Goods Orders, and New Home Sales.
| SMA (20) | Slightly Falling |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: This analysis underscores the positive momentum exhibited by GBP/USD in the European morning, positioning it around the 1.2750 level. Technical factors, along with the behaviour of the FTSE 100 Index, add depth to the overall picture. As the day progresses, attention will be drawn to the release of S&P Global PMIs for the UK and a host of key economic events on the US front, all of which could contribute to shaping the currency pair's movements.
GOLD
- Gold prices managed a slight upward movement on Wednesday, benefiting from a dollar and Treasury yield retreat, although the upcoming Jackson Hole Symposium held market attention.
- The US Dollar (USD) displayed resilience, supported by the benchmark 10-year US Treasury bond yield's ascent to levels not seen since November 2007, surpassing 4.35%.
- Richmond Fed President Thomas Barkin's recent comments highlighted that the rise in yields doesn't necessarily signal "inappropriate" market tightening measures.
- Barkin underscored that if elevated inflation persists and the economy maintains its robust performance, this could strengthen the case for additional tightening actions.
- Market focus now pivots to Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium scheduled for Friday. This event is highly anticipated and could offer insights into the central bank's policy stance.
Closing statement: This update outlines the modest upward movement observed in gold prices on Wednesday, largely attributed to the dollar's step back and the Treasury yield's dip. The USD's strength, propelled by rising yields, has been underpinned by remarks from Richmond Fed President Barkin, who emphasized the nuanced nature of yield shifts. All eyes are now fixed on the upcoming Jackson Hole Symposium, where Jerome Powell's speech could deliver crucial signals on the Fed's outlook and potential policy actions.
CRUDE OIL
- Crude oil prices experienced a minor drop during Asian trade on Wednesday. Traders grappled with the interplay between sluggish demand signals from China, the potential for further U.S. rate hikes, and the backdrop of supply tightness.
- Attention is fixed on the upcoming annual meeting in Jackson Hole, Wyoming, where Federal Reserve officials and central bank policymakers, including the ECB, BoE, and BoJ, will gather. Market participants eagerly await any indications about future interest rate directions.
- Investors appear to be treading cautiously, refraining from major position changes ahead of the Jackson Hole symposium. The event is pivotal, as it's expected to shed light on the future actions of the U.S. Federal Reserve.
- U.S. crude inventories continued to decline, registering a drop of approximately 2.4 million barrels in the week ending on August 18, as reported by sources citing American Petroleum Institute data on Tuesday.
- The Energy Information Administration, the statistical body of the U.S. energy department, is set to release its weekly report, providing further insights into the state of the crude oil market.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: This update highlights a modest increase in crude oil prices in general, influenced by a delicate equilibrium between factors such as China's demand indicators, U.S. rate hike prospects, and supply tightness. The imminent Jackson Hole symposium holds immense significance, with market participants keen on discerning insights about the future course of interest rates. The anticipation surrounding the symposium has led to cautious trading in the oil market. Additionally, U.S. crude inventories continue to decline, contributing to the overall market dynamics.
DAX
- German DAX futures demonstrated a 0.38% uptick, while French CAC 40 futures saw a 0.59% rise and UK FTSE 100 futures advanced by 0.36%. This was buoyed by the prior day's gains in the U.S. and a bullish Asian session, offering an initial boost to the European markets.
- Despite a positive start, rising government bond yields contributed to a retreat from the session high for the DAX. Monday's gains from the U.S. and favorable Asian trading sentiment initially provided momentum.
- Infineon, one of the leading performers, recorded a 2.71% gain. This movement was supported by a positive run in tech stocks after the NASDAQ's rally on Monday.
- Reports suggest that the German Vice Chancellor has recommended enhanced scrutiny of foreign direct investments from China. This proposal, if implemented, could reshape the landscape for investment flows.
- Market sentiment will be influenced by preliminary private sector PMI figures for France, Germany, and the broader Eurozone. These indicators are poised to shape the risk appetite in the market.
| SMA (20) | Slightly 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: This update underscores the positive trend in DAX futures, following gains in the U.S. and a strong Asian session. However, the DAX's trajectory was influenced by the impact of rising government bond yields. The tech sector remained a focal point, with Infineon leading the gains. An interesting development is the proposal for tightened investment screening of foreign direct investments from China. Looking ahead, market sentiment will be swayed by the preliminary PMI data from key Eurozone countries, setting the tone for risk appetite.