EURUSD
- Current Trading: The EUR/USD pair is consolidating gains around 1.0740 during the early European session on Wednesday.
- Eurozone Inflation Data: Data released on Tuesday indicated that the annual inflation rate in the Eurozone cooled down in June, aligning with market expectations. This suggests that inflationary pressures in the Eurozone are easing.
- Fedspeak Influence: Remarks from Federal Reserve (Fed) officials helped to bolster investor sentiment during Tuesday’s US market session. Key policymakers expressed confidence in recent improvements in US inflation data, providing support to the USD.
- US Job Openings: The US JOLTS Job Openings for May slightly increased, rising to 8.14 million from the forecasted steady print of 7.91 million. This indicates a robust labor market, contributing to positive sentiment for the USD.
- Upcoming Data: Wednesday’s European market session will feature the final Producer Price Index (PPI) and HCOB Purchasing Managers Index (PMI) figures. During the US trading window, the ISM Services PMI figure and the latest ADP Employment Change numbers will be released, offering a preliminary look at Friday’s upcoming US Nonfarm Payrolls (NFP) jobs data.
| 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: The EUR/USD is currently consolidating around 1.0740, with the pair being influenced by recent data and upcoming economic indicators. Eurozone inflation data has cooled in line with expectations, while positive Fedspeak and US job openings data have supported the USD. Traders should keep an eye on Wednesday’s European PPI and PMI figures, as well as the US ISM Services PMI and ADP Employment Change numbers, which will provide further direction ahead of Friday’s crucial NFP report.
GBPUSD
- Current Trading: GBP/USD lacks firm intraday direction on Wednesday amid mixed fundamental cues, currently trading near 1.2640.
- Bank of England Influence: The Bank of England's (BoE) dovish pause in June, which lifted bets for a rate cut in August, continues to act as a headwind for the British Pound (GBP). This dovish stance is causing some uncertainty among investors.
- UK General Elections: Anxiety surrounding the upcoming UK general elections on Thursday is also weighing on the GBP. Political uncertainty often impacts currency markets as investors adopt a cautious approach.
- US Labor Market Signs: Signs of extending slack within the US labor market are beginning to appear. This gives rate-cut-hungry financial markets reason to hope that the Fed might be pushed towards a rate trim sooner rather than later.
- Upcoming US Data: The US ADP Employment Change being announced today is forecast to rise slightly to 160K from the previous 152K. Additionally, June’s ISM Services PMI is expected to cool further to 52.5 MoM from the previous 53.8.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling |
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Closing statement: The GBP/USD is trading without a clear direction amid mixed signals from fundamental factors. The BoE's dovish stance and upcoming UK general elections create headwinds for the GBP, while signs of slack in the US labour market and upcoming US data releases add to the uncertainty. Traders are likely to wait for more definitive cues regarding the Fed's rate-cut path before making significant moves.
GOLD
- Current Trading: Gold price is trading around a flatline near $2,330 early Wednesday.
- China's Economic Concerns: Weaker-than-expected China’s Caixin Services PMI rekindles economic growth concerns, negatively impacting sentiment around Asian stocks. This can lead to increased safe-haven demand for gold.
- Fed's Stance on Inflation: Fed Chair Powell acknowledged the recent inflation data, which indicates a disinflationary trend. However, he emphasized the need to see more consistent data before being confident enough to start cutting interest rates.
- Central Bank Gold Purchases: The latest World Gold Council (WGC) report showed a net purchase of 10 tons of gold by central banks in May. The National Bank of Poland was the biggest purchaser, adding 10 tons of gold to its reserves, indicating ongoing central bank demand for gold.
- Upcoming Fed Minutes: The next significant event for gold prices is the release of the Minutes from the Fed’s June 11-12 policy meeting. These minutes could provide more insights into the central bank’s rate and inflation outlook, potentially impacting the value of the US Dollar and gold prices.
Closing statement: Gold prices are steady around $2,330 amid mixed global economic signals. Concerns about China's economic growth and Fed's cautious stance on rate cuts support gold, while central bank purchases provide additional demand. Traders will closely watch the upcoming Fed meeting minutes for further direction on US monetary policy, which could significantly impact gold prices and the US Dollar.
CRUDE OIL
- Current Trading: West Texas Intermediate (WTI) US crude oil prices are oscillating in a narrow band during the European session on Wednesday, lacking firm intraday direction.
- API Report: The American Petroleum Institute (API) reported its steepest week-on-week decline in US Weekly Crude Oil Stocks in nearly two years, noting a significant drop of -9.163 million barrels. This decrease in inventory supports oil prices by indicating tighter supply.
- Geopolitical Concerns: Investors remain worried that escalating conflicts in the Middle East could disrupt supplies from key oil-producing countries. This geopolitical tension acts as a tailwind for crude oil prices by potentially tightening global supply.
- Hurricane Season Impact: The strong start to the hurricane season in the US is another key factor supporting oil prices. Hurricanes can disrupt production and logistics in the Gulf of Mexico, a crucial region for US oil production.
- Global Economic Concerns: Despite the supportive factors, concerns over a slowdown in global economic growth are holding back bullish sentiment. These worries might cap the upside for crude oil prices as slower economic growth could reduce demand for oil.
| 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 prices are trading without a clear direction amid mixed signals. While a significant drop in US crude oil stocks and geopolitical tensions support prices, concerns over global economic growth are tempering bullish bets. The strong start to the US hurricane season adds another layer of uncertainty to the supply outlook. Traders will continue to monitor geopolitical developments and economic indicators to gauge the future direction of oil prices.
DAX
- Inflation Data: Eurozone inflation remains stubbornly high, with the annual core inflation rate at 2.9% in June. This persistent inflation aligns with comments from ECB President Christine Lagarde, who emphasized the need for more data before considering rate cuts.
- ECB Comments: The inflation figures support ECB President Christine Lagarde's cautious stance on rate cuts, as she seeks additional data points to ensure that inflation risks have subsided.
- US Labor Market Data: Better-than-expected labor market data from the US later in the European session tested buyer demand for DAX-listed stocks. Despite this, comments from Fed Chair Powell helped cushion the downside.
- Market Reaction: Tech, auto, and bank stocks reversed their gains from Monday due to concerns over the French election run-off and persistent inflation in the Eurozone.
- Upcoming Data: Today, the finalized Services PMIs for Germany and the Eurozone will be in focus. Revisions to preliminary figures could attract significant attention from the ECB and potentially influence market movements.
| 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 index is currently navigating a complex landscape characterized by persistent Eurozone inflation, cautious ECB commentary, and mixed signals from US labour market data. Market participants will closely monitor upcoming finalized Services PMIs for further insights into the economic health of Germany and the Eurozone, which could influence the ECB's policy decisions and impact DAX-listed stocks.