EURUSD
- EUR/USD traded flat at 1.1051, just below its one-year high of 1.1096, and is likely to advance further.
- The ECB is in focus on Thursday and is expected to tighten monetary policy by lifting interest rates for the seventh time, following the U.S. Federal Reserve's lead from Wednesday.
- The Fed raised interest rates by 25 basis points on Wednesday, as expected, and no longer anticipates further rate increases to control inflation.
- Italy's services sector grew for the fourth consecutive month in April, at the fastest rate since August 2021, due to rising confidence and continued growth in new business.
- Overall, the outlook for the EUR/USD pair remains positive, with market participants closely watching the ECB's decision on interest rates later in the session.
| SMA (1D) | Slighty Rising |
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| RSI (1D) | Slightly Falling |  | |
| MACD (1D) | Neutral |
Closing statement: Investors are looking forward to the ECB's decision on interest rates, as the euro continues to strengthen against the US dollar. The Fed's decision to hold off on further rate hikes has set the tone for the ECB to potentially follow suit. Positive data from Italy's services sector has added to the bullish sentiment for the EUR/USD pair. With market participants expecting further gains for the euro, it remains to be seen how the ECB's policy decision will impact the currency's trajectory.
GBPUSD
- GBP/USD traded at 1.2564, close to an 11-month high of 1.2594.
- The Bank of England is expected to tighten next week due to high inflation.
- The DXY traded 0.1% lower at 101.327, having dropped more than 0.6% in the previous session.
- The latest interest rate hike should mark the end of this hiking cycle as the Fed may rely on the impact of financial conditions from the recent banking crisis to deliver the final bit of tightening.
- Recent wage and CPI data both came in above expectations, suggesting another increase should be the base case for May.
GOLD
- Gold prices reached a new record high on Thursday after the Federal Reserve hiked interest rates but signalled a pause to its year-long tightening cycle.
- Fed Chair Jerome Powell's warning of cooling economic growth and tightening credit conditions boosted safe haven demand for gold.
- The US dollar retreated in early European trade, continuing the previous session's selloff after the Fed's latest interest rate hike.
- Despite the pause in the rate hike cycle, US inflation remains above the Fed's target range.
- Analysts predict that worsening economic conditions in the country could prompt the Fed to continue its pause in the rate hike cycle.
Closing statement: The Federal Reserve's recent decision to pause its interest rate hike cycle has provided a boost to gold prices, with the precious metal reaching a new record high. With concerns over slowing economic growth and tightening credit conditions, investors are turning to gold as a safe haven asset. While the pause in the rate hike cycle may provide some relief, the outlook for US inflation and economic conditions remains uncertain, and analysts will be closely watching for any further developments that could impact the gold market.
CRUDE OIL
- Crude oil prices rose in early Asian trade on Thursday, after falling to near 17-month lows due to fears of a potential U.S. recession that could severely crimp demand.
- Traders bought back into heavily discounted markets amid potential supply disruptions in Iran and Russia.
- A drone attack in Russia, which the Kremlin alleged was a Ukrainian attempt on President Vladimir Putin’s life, presented a potential escalation in the Russia-Ukraine war, after Moscow said it had a right to retaliate.
- Any further escalation in military tensions could disrupt Russian crude shipments, presenting a similar scenario as seen during 2022 when oil prices surged to near-record highs in the wake of the Russian invasion.
- Crude prices received support from a sharp drop in the dollar after the Fed signaled a potential end to its year-long rate hike cycle, contributing to a positive sentiment in the market.
| SMA (1D) | Slightly Falling | |
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| RSI (1D) | Slightly Rising |
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| MACD (1D) | Falling |
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Closing statement: Overall, crude oil prices rose on Thursday amid potential supply disruptions and a decline in the dollar, but fears of weakening economic growth and demand kept sentiment dim. Any further escalation in military tensions between Russia and Ukraine could disrupt crude shipments and lead to higher oil prices.
DAX
- European stock markets, including DAX, declined on Thursday as investors assessed quarterly corporate earnings ahead of the European Central Bank's monetary policy decision.
- The DAX index traded flat on the day, while the FTSE 100 in the UK fell by 0.11% and the CAC 40 in France declined by 0.29%.
- DAX experienced a bearish engulfing candle on the daily chart and broke the low of Friday's session, though it retraced back up. A break below the early March high at 15,720 and February high at 15,705 could add pressure to the downside.
- German services sector activity grew in April at the fastest pace in a year, as demand and new orders picked up, according to a business survey.
- The survey also showed significant growth in exports, which could be a positive sign for the German economy and the DAX index.
| SMA (1D) | Slightly Rising |
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| RSI (1D) | Slightly Falling | |
| MACD (1D) | Slightly Falling | |
Closing statement:Overall, the DAX index remained flat while European stock markets fell as investors assessed corporate earnings ahead of the ECB’s latest monetary policy decision. The latest business survey showed an increase in German services sector activity in April, which could potentially lead to growth in exports.