EURUSD
- The EUR/USD pair is currently trading near the key psychological level of 1.0600 during the Asian session, signaling a slight upward movement.
- Eurozone Composite PMI declined to 46.5 in October, down from 47.2 in September. This marks the sixth consecutive reading below 50, indicating a persistent economic slowdown in the Eurozone.
- In contrast, US S&P Global Composite PMI showed growth in October, rising from 50.2 to 51.0. Both the Services and Manufacturing PMIs increased, with the Manufacturing sector maintaining a level above the 50-point threshold for the last six months, reflecting a positive trend.
- Despite the weaker Eurozone data, EUR/USD is attempting to recover from previous losses, likely influenced by the more upbeat economic data from the United States.
- Traders will continue to monitor PMI data from both regions as it can impact market sentiment and the direction of the EUR/USD pair. The positive trend in the US Manufacturing PMI is a noteworthy development to watch.
| SMA (20) | Slightly Rising |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Rising |
|
|
Closing statement:In summary, the EUR/USD is showing a modest recovery from recent losses, despite weaker Eurozone PMI data. The positive shift in US Manufacturing PMI could be influencing the pair's movement, and future PMI releases will be closely observed by traders for further insights.
GBPUSD
- GBP/USD initially rose to near 1.2300 but lost its bullish momentum, settling around 1.2250. The pair turned flat on the day, indicating a pause in its upward movement.
- Despite the recent pullback, the technical outlook suggests that the bullish bias remains intact, which may be reassuring for traders.
- The ILO Unemployment Rate in the UK edged lower to 4.2% for the three months to August, down from 4.3%. This data is based on the UK's Office for National Statistics (ONS) report. Notably, the Employment Change exceeded market expectations, coming in at -82,000, better than the anticipated decrease of 198,000.
- The S&P/CIPS Composite PMI for the UK showed a slight improvement, rising to 48.6 in early October from 48.5 in September. However, this data suggests that the UK economy is still grappling with challenges such as the increased cost of living, higher interest rates, and falling exports.
- According to Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, the UK economy seems to be on the edge of recession in October. Factors contributing to this situation include rising living costs, higher interest rates, and declining exports.
| SMA (20) | Slightly Rising |
| |
| RSI (14) | Falling |
|
|
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: GBP/USD witnessed a temporary loss of bullish momentum, but the technical outlook remains positive. Positive employment data and a slight uptick in the PMI are contrasting with concerns about the UK economy nearing a recession, as noted by Chris Williamson.
GOLD
- Gold price experienced a recovery in Asian trading on Tuesday and continued this positive momentum into Wednesday. Buyers returned as the US Dollar's rebound paused and US Treasury bond yields remained sluggish.
- The recent steady retracement of the US Dollar has contributed to Gold's renewed upside. A weaker dollar tends to support the price of gold, which is considered a safe-haven asset.
- While Gold has seen gains, it's uncertain whether this upward movement can be sustained. The safe-haven appeal of the US Dollar may reassert itself if renewed risk-aversion, possibly triggered by Middle East tensions, comes into play.
- On Tuesday, the US Dollar staged a solid comeback. Positive data from the US, including strong S&P Global Manufacturing and Services PMI, and robust earnings results contributed to this resurgence.
- The US Dollar's turnaround led to a temporary sell-off in gold, pushing its price down to around $1,950. However, the subsequent correction in US Treasury bond yields helped Gold recover some ground, ending the day slightly lower at approximately $1,971.
Closing statement:In summary, gold price rebounded as the US Dollar paused its recent rally. The future trajectory of Gold is uncertain, as it depends on factors like the US Dollar's performance and potential triggers for risk-aversion, such as Middle East tensions.
CRUDE OIL
- WTI Crude Oil prices traded in a narrow range during the Asian session on Wednesday. This consolidation followed recent heavy losses that pushed prices to a one-week low.
- Global leaders intensified their efforts to contain the Middle East conflict, with the aim of facilitating humanitarian aid delivery. These efforts helped ease concerns about potential disruptions in the oil supply.
- Weak PMI data from the Euro Zone, released on Tuesday, raised concerns about a potential recession, which is expected to dampen fuel demand. This economic uncertainty can put downward pressure on Crude Oil prices.
- Data from the American Petroleum Institute (API) revealed a more than 2-million-barrel decline in US inventories for the week ending October 20. This suggests strong fuel demand in the US, even after the summer season has ended. Tightening global supplies are also supporting Crude Oil prices.
- Market participants are awaiting the official report from the Energy Information Administration (EIA), which is scheduled for later during the US session on Wednesday. This report is anticipated to provide fresh insights and potentially impact Oil prices.
| SMA (20) | Falling |
|
|
| RSI (14) | Falling |
|
|
| MACD (12, 26, 9) | Slightly Falling |
|
Closing statement: Crude Oil prices are consolidating after recent losses. Efforts to resolve the Middle East conflict have eased concerns about supply disruptions. However, fears of a potential recession in the Euro Zone and the upcoming EIA report will likely influence Oil prices in the near term.
DAX
- On Tuesday, the DAX index posted a gain of 0.54%, following a minor 0.02% increase on Monday. The day ended with the DAX at a level of 14,895.
- Preliminary private sector PMI data from Germany and the Eurozone on Tuesday had a notable impact on the DAX. The index initially moved into negative territory due to these figures.
- An unexpected contraction in the German services sector raised concerns about the possibility of a German recession. Furthermore, more significant contractions across the Eurozone private sector fueled expectations of a broader Eurozone recession.
- Economists are closely watching the German Ifo Business Climate Index today, with a forecast for it to rise from 85.7 to 85.9 in October. A positive improvement in business sentiment could offer support to DAX-listed stocks.
- In addition to economic indicators, corporate earnings also require consideration. On Wednesday, Deutsche Bank is set to release its earnings results, which can influence investor sentiment regarding DAX-listed companies.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Falling |
| |
| MACD (12, 26, 9) | Slightly Falling |
|
Closing statement: In summary, the DAX index showed a positive performance on Tuesday. However, concerns about recession, as indicated by PMI data, continue to impact market sentiment. Upcoming business sentiment data and corporate earnings reports, notably from Deutsche Bank, will be important factors to monitor in the coming days.