EURUSD
- Trading Activity: The EUR/USD is trading under pressure below 1.0750, ending its three-day winning streak on Tuesday.
- German CPI Figures: Early Monday, the German Consumer Price Index (CPI) figures broadly missed expectations. The annualized German CPI eased to 2.2% in June, down from the previous 2.4% and below the forecast of 2.3%.
- US Data: On Monday, US data also fell short of expectations. The US ISM Manufacturing Purchasing Manager Index (PMI) figures declined in June, dropping to 48.5 from 48.7 and missing the forecast increase to 49.1.
- Upcoming European Data: A fresh batch of key European data is expected on Tuesday, including a series of speeches from European Central Bank (ECB) policymakers, with ECB President Christine Lagarde making another appearance.
- HICP Inflation Forecast: The EU Harmonized Index of Consumer Prices (HICP) inflation is expected to decrease slightly. Core EU HICP inflation is forecast to decline to 2.8% YoY from the previous 2.9%.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Falling |
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Closing statement: The EUR/USD faces pressure below 1.0750 due to disappointing German CPI and US PMI figures. Upcoming key European data and speeches from ECB policymakers, including ECB President Christine Lagarde, are expected to influence market sentiment. Additionally, slight declines in Pan-European HICP inflation are anticipated, which may impact the EUR/USD pair further.
GBPUSD
- Trading Activity: GBP/USD remains defensive near 1.2640, continuing its struggle early Tuesday.
- BoE Influence: The Bank of England's (BoE) dovish pause in June has lifted expectations for a rate cut at the August monetary policy meeting, undermining the British Pound (GBP).
- US ISM PMI Data: On Monday, the US ISM PMI indicated that the US manufacturing sector contracted for the third consecutive month in June.
- US Inflation and Borrowing Costs: Signs of subsiding inflation in the US suggest that the US central bank may begin lowering borrowing costs soon.
- Fed Chairman’s Appearance: On the US side, investors are looking forward to Tuesday’s appearance by Federal Reserve (Fed) Chairman Jerome Powell for further insights.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: GBP/USD remains under pressure near 1.2640 due to expectations of a BoE rate cut and contraction in the US manufacturing sector. Signs of easing inflation in the US may lead to lower borrowing costs, adding further dynamics to the pair. Investors are also keenly anticipating Federal Reserve Chairman Jerome Powell’s appearance for additional guidance.
GOLD
- Price Movement: On Monday, gold prices experienced a notable two-way price movement, initially trading with caution ahead of a significant week. The price took a hit as the US Dollar strengthened, despite mixed US ISM Manufacturing PMI data.
- Bond Yields and Profit-Taking: The recent gains in gold prices can be attributed to a retreat in US Treasury bond yields across the curve, as traders engaged in profit-taking ahead of critical US economic events.
- Rate Cut Expectations: Markets are currently pricing in a 64% chance of the Federal Reserve cutting interest rates in September and another cut in December, according to the CME Group’s FedWatch Tool.
- Fed Chair's Influence: Federal Reserve Chair Jerome Powell’s remarks during the Policy Panel at the European Central Bank (ECB) Forum in Sintra are anticipated to significantly influence gold price action.
- Cautious Trading: Gold buyers may adopt a cautious stance ahead of the key US JOLTs Job Openings data and Jerome Powell’s speech later in the day.
Closing statement: Gold prices witnessed significant movement on Monday, influenced by a stronger US Dollar and mixed economic data. The retreat in US Treasury bond yields and profit-taking contributed to recent gains. With market expectations leaning towards Fed rate cuts later in the year, traders are keenly awaiting insights from Fed Chair Jerome Powell and upcoming US economic data.
CRUDE OIL
- Current Trading: West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $83.50 on Tuesday.
- Geopolitical Tensions: Oil traders have increased long positions due to concerns that escalating tensions in Lebanon could spread and potentially disrupt global oil supplies.
- Weather Concerns: The Atlantic weather season remains a critical factor, with Hurricane Beryl currently barreling through the Caribbean as a Category 4 storm, raising fears of further supply disruptions.
- Demand Factors: Strong summer driving demand is expected to support WTI prices. Last week, the Energy Information Administration (EIA) reported that both output and demand for key petroleum products reached a four-month high in April.
- Economic Growth Impact: Conversely, the prospect of sustained higher interest rates in the United States could weigh on WTI prices by potentially slowing economic growth and reducing oil demand.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: WTI crude oil is trading robustly at around $83.50, buoyed by geopolitical tensions in Lebanon and ongoing concerns about the Atlantic hurricane season. Strong summer driving demand has also contributed to recent price increases, with EIA data indicating high output and demand levels. However, potential headwinds include the impact of higher interest rates in the US, which could dampen economic growth and, in turn, reduce oil demand.
DAX
- German Inflation Data: On Monday, German inflation approached the ECB target of 2%, dropping from 2.4% in May to 2.2% in June. This decline was more significant than economists' expectations, which forecasted a decrease to 2.3%.
- French Politics: French politics remain a focal point, as the far-right National Rally party won the first round of the French Elections, albeit by a smaller margin than anticipated. This outcome mitigates some concerns about political instability.
- ECB Rate Cut Bets: Rising bets on a Q3 2024 ECB rate cut could boost buyer demand for DAX-listed stocks. However, upcoming Eurozone inflation numbers on Tuesday could be crucial in shaping market expectations.
- ECB President's Statement: ECB President Christine Lagarde addressed inflation on Monday, stating, “It will take time for us to gather sufficient data to be certain that the risks of above-target inflation have passed.” Her comments underscore the cautious approach of the ECB towards future rate adjustments.
- Upcoming ECB Comments: Investors should pay close attention to comments from ECB officials. Reactions to the inflation report could significantly impact the market. ECB President Christine Lagarde is scheduled to speak on Tuesday, and her statements could provide further insights into the ECB's policy direction.
| SMA (20) | Slightly Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The DAX is influenced by several factors this week, including better-than-expected German inflation data and the outcomes of the first round of the French Elections. Rising bets on a Q3 2024 ECB rate cut could drive demand for DAX stocks, although the upcoming Eurozone inflation data will be pivotal. Investors should watch for further comments from ECB officials, particularly President Christine Lagarde, whose statements could provide important cues on future monetary policy.