EURUSD
- European stock markets traded higher on Wednesday, as generally positive earnings from the banking sector boosted confidence ahead of the Federal Reserve policy meeting.
- The US central bank is widely expected to lift rates by a quarter point, and investors will be closely watching the press conference to gauge the likelihood of further cuts this year.
- Gains in European markets were limited as investors awaited the Fed's announcement on interest rates, with attention on Jerome Powell's views on the state of the financial system.
- EUR/USD rose 0.3% to 1.1030 in early European trade on Wednesday after falling slightly overnight, and not far below last week's one-year high of 1.1096.
- Markets are expecting rate cuts towards the end of the year, given the signs of a softening labor market, concerns about the health of the country's smaller banks, and uncertainty over the debt ceiling.
| SMA (1D) | Slighty Rising |
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| RSI (1D) | Rising |
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| MACD (1D) | Slightly Falling |  |
Closing statement: Overall, the European markets have been buoyed by generally positive earnings from the banking sector, but gains were limited as investors awaited the Federal Reserve's announcement on interest rates. The EUR/USD rose slightly on Wednesday ahead of the announcement, with investors closely watching for signals about the likelihood of further rate cuts this year.
GBPUSD
- GBPUSD has been trading in a narrow range between 1.2550 and 1.2350.
- The market is uncertain, and traders need to be cautious about getting overly exposed.
- The Federal Reserve and European Central Bank are releasing interest rate announcements over the next couple of days, which could lead to volatility in the US dollar and affect GBPUSD.
- The market has resistance at higher levels, but breaking above recent highs could lead to further gains for GBPUSD.
- Breaking below the 1.2350 level and the 50-Day EMA could lead to a drop towards the 200-Day EMA at 1.22, which is a widely followed indicator.
| SMA (1D) | Slightly Rising |
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| RSI (1D) | Slightly Rising |
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| MACD (1D) | Neutral |
Closing statement: Traders in the GBPUSD market should keep a close eye on central bank announcements and inflation in the UK, while being cautious of potential volatility in the US dollar. The narrow trading range and resistance levels indicate a potential for both gains and losses, and breaking key support levels could lead to further downside.
GOLD
- Gold prices remained steady in early Asian trade on Wednesday, supported by increased safe haven demand due to fears of a banking crisis and uncertainty over monetary policy ahead of a Federal Reserve rate decision.
- Gold rose sharply on Tuesday as U.S. bank stocks faced a flurry of selling, after the government-brokered takeover of First Republic Bank by JPMorgan Chase & Co sparked concerns that several other regional U.S. lenders were facing solvency issues.
- Regional bank stocks such as PacWest Bancorp and Western Alliance Bancorporation slumped between 15% and 30%, which also contributed to the demand for gold.
- Bullion demand was also supported by increased fears of a U.S. debt default, after Treasury Secretary Janet Yellen warned that the world’s largest economy potentially faces a June 1 deadline to meet its obligations.
- While the central bank is widely expected to hike interest rates, markets are uncertain over a potential pause in the Fed's year-long rate hike cycle. Gold and other non-yielding assets could see increased support if the Fed announces a pause.
Closing statement: Gold prices are likely to remain volatile in the near term as market participants weigh the impact of the ongoing banking crisis and the Fed's monetary policy decisions on the economy and inflation.
CRUDE OIL
- Oil prices extended losses on worries about the health of the US economy ahead of an expected Federal Reserve interest rate hike.
- Brent futures fell 1.4% to $74.25 a barrel, while West Texas Intermediate crude (WTI) dropped 1.6% to $70.51.
- The Fed is expected to raise interest rates by 25 basis points to combat inflation, which could slow economic growth and hit energy demand.
- Concerns about diesel demand in recent months have pushed down US heating oil futures to their lowest level since December 2021.
- Energy prices are also under pressure after data from China showed manufacturing activity fell unexpectedly in April.
| SMA (1D) | Slightly Falling | |
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| RSI (1D) | Falling | |
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| MACD (1D) | Falling |
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Closing statement: Oil prices have been under pressure due to concerns about the health of the US economy and the expected interest rate hike by the Federal Reserve. The energy demand could be hit if the Fed continues to hike rates. In addition, concerns about diesel demand and China's economic slowdown are also weighing on oil prices.
DAX
- European stock markets traded higher today, as generally positive earnings from the banking sector boosted confidence ahead of the conclusion of the crucial Federal Reserve policy meeting.
- At 03:55 ET (07:55 GMT), the DAX index in Germany traded 0.5% higher.
- The quarterly earnings season has given European investors something to digest as they wait for the latest policy news from the Federal Reserve, due later in the session.
- Worries about the health of the U.S. banking system in the wake of the weekend’s collapse of First Republic Bank (NYSE:FRC), the largest U.S. bank failure since the 2008 financial crisis, resulted in sharp losses on Tuesday.
- However, the tone in Europe is more optimistic, with the region’s banking sector looking much more healthy, with UniCredit, BNP Paribas, Lloyds, Lufthansa and more showing prominent rises in their stocks after first-quarter reports came out.
| SMA (1D) | Slightly Rising |
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| RSI (1D) | Slightly Rising |
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| MACD (1D) | Slightly Falling | |
Closing statement:Gains are limited Wednesday as the markets await an announcement on interest rates from the Federal Reserve and a subsequent press conference later in the session which will potentially affect the prices, and lead the trend by the end of the week. As for other events happening in Europe, the main economic release will be the March unemployment number for the euro zone, which is expected to stay at 6.6%. Traders will look for confirmation from the Energy Information Administration later in the session, but this generally supportive news has made little impression on a market fretting about the likely impact on economic activity, and thus crude demand, of another U.S. interest rate hike.