EURUSD
- The EUR/USD is currently in a bearish consolidation phase and is trading within a narrow range near six-month lows, around the 1.0550 level during the European session on Wednesday.
- Despite weaker-than-expected US economic data on Tuesday, which included New Home Sales falling to 675,000 in August (below the market consensus of 700,000) and a decline in the CB Consumer Confidence from 108.7 to 103, the US Dollar (USD) didn't see a significant impact. This suggests that the USD remains resilient in the face of negative economic data.
- Equity prices on Wall Street experienced declines, with the Dow Jones falling by 1.15% and the Nasdaq dropping by 1.54%. The deteriorating market sentiment further fueled the rally of the US Dollar. Market sentiment and risk appetite appear to be significant drivers of the USD's movement.
- The market is awaiting the release of the Durable Goods Orders report from the US. This report will provide insights into the demand for long-lasting goods and could influence USD movement.
- Market participants will closely monitor German and Spanish inflation data on Thursday, which can impact the Euro. Additionally, on Friday, the US will release the Core Personal Consumption Expenditure (PCE) Index, a key inflation indicator. These reports will be important for traders as they assess economic conditions and policy implications.
| 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: EUR/USD is currently in a bearish consolidation phase near six-month lows. The resilience of the USD despite weaker US economic data and its sensitivity to market sentiment are notable. Key upcoming reports, including Durable Goods Orders and inflation data from Germany, Spain, and the US, will be closely watched as they have the potential to influence the currency pair's direction.
GBPUSD
- GBP/USD is currently consolidating its downward movement, trading near the 1.2150 level during the early European trading hours on Wednesday.
- The pair remains in a technically oversold condition. However, despite this oversold status, investors might be hesitant to bet on a steady upward correction in the current risk-averse market environment.
- UK's FTSE 100 Index opened flat on Tuesday, while US stock index futures are trading significantly lower during the European session. If Wall Street's main indexes open lower, the US Dollar (USD) is likely to remain resilient against its rivals. This suggests that market sentiment and risk aversion are playing a crucial role in the GBP/USD movement.
- The GBP/USD pair is expected to face more losses due to the pause in the rate-tightening cycle by the Bank of England (BoE). This pause raises concerns about consumer inflation expectations. The BoE's unexpected decision to pause its aggressive rate cycle reflects concerns about the UK's economic situation and adds uncertainty to the inflation outlook.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: GBP/USD is currently consolidating near the 1.2150 level. While the pair is technically oversold, the risk-averse market environment and potential for further losses due to the BoE's rate-tightening pause are factors to consider. Market sentiment, especially in US stock indexes, is likely to influence the pair's movement.
GOLD
- Gold price is currently displaying resilience just below the $1,900 mark during the Asian session on Wednesday. However, it's struggling to make a significant recovery from a level that was over a one-month low, as recorded in the previous session.
- Gold price might find some support from the record-high premiums in the Chinese physical bullion market. According to Bloomberg, the bullion market in China has seen a surge in activity this month.
- On Tuesday, the US Dollar benefited from risk aversion as investors considered the prospects of higher borrowing costs and their potential impact on global economic growth. Several US Federal Reserve (Fed) policymakers have expressed support for the "higher for longer" interest rate view, indicating that US rates may need to go higher and be maintained at elevated levels to cool economic activity.
- The market's focus is now turning toward the release of US Durable Goods Orders data. Additionally, investors will closely monitor statements from Federal Reserve officials (Fedspeak) for fresh insights and trading cues in the Gold market.
Closing statement: Gold price is currently showing resilience below the $1,900 level but faces challenges in making a significant recovery. Factors such as Chinese bullion market activity, US Dollar strength, and upcoming economic data and Fed statements will likely influence its near-term trajectory.
CRUDE OIL
- Western Texas Intermediate (WTI), the US crude oil benchmark, is currently trading around $91.25. It has regained some of its recent losses, driven by expectations of a tightening supply, which outweigh concerns about an uncertain economic outlook potentially dampening demand.
- The recent Federal Reserve (Fed) decision to keep interest rates steady and make hawkish comments last week has contributed to capping the upside for WTI prices. The "higher-for-longer" interest rate narrative in the US has influenced the oil market.
- The recent uptick in the US Dollar (USD) has also played a role in putting downward pressure on oil prices. A stronger dollar makes oil more expensive for holders of other currencies, potentially reducing global demand.
- According to the American Petroleum Institute (API) data, US crude oil inventories increased by 1.586 million barrels for the week ending September 22. This marks a notable shift from the previous reading, which showed a substantial drop of 5.25 million barrels.
- Oil traders will be closely watching for cues from the US Energy Information Administration (EIA) weekly Crude Oil Stock data for the week ending September 22. This data will provide further insights into the supply dynamics in the US crude oil market.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: WTI crude oil prices are recovering after a recent dip, primarily driven by expectations of a tightening supply. However, the impact of the Fed's hawkish stance and the strength of the US Dollar are factors to watch, and the upcoming EIA data will be closely monitored for additional market insights.
DAX
- On Tuesday, the DAX experienced a decline of 0.97%. This came after a 0.98% loss on Monday, resulting in the DAX closing at 15,256.
- ECB President Christine Lagarde has been discussing the issue of elevated inflation and the necessity of keeping interest rates at higher levels to control inflation. Such discussions have implications for the market, especially concerning the future trajectory of monetary policy.
- The ECB's forward guidance on monetary policy is a crucial factor for investors. Hawkish signals from the ECB about future policy decisions can put pressure on riskier assets. ECB Executive Board member Andrea Enria is scheduled to speak, and her remarks will be closely monitored for any hints about the central bank's policy direction.
- The German GfK consumer-sentiment index's prediction for October indicates a two-month decline. It's expected to reach minus 26.5, slightly below the minus 26.0 forecast by economists. This shift toward more cautious consumer sentiment reflects concerns about the uncertain economic landscape and rising living costs.
| SMA (20) | Slightly 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: The DAX faced consecutive days of losses, influenced by discussions about inflation and monetary policy by the ECB. As the ECB's stance on interest rates and inflation remains in focus, any further guidance or remarks from ECB officials will continue to impact the DAX. Additionally, consumer sentiment data suggests a cautious outlook among German consumers, which can have implications for economic growth and market sentiment.