EURUSD
- Current Trading Range: The EUR/USD pair continues to trade below 1.0800 during the European morning session on Thursday.
- US Dollar Decline: The upside pressure on the pair is attributed to a decline in the US Dollar (USD), driven by increased speculations that the Federal Reserve (Fed) will reduce interest rates in 2024.
- ISM Services PMI: The US ISM Services PMI fell sharply to 48.8 in June, marking its steepest decline since April 2020.
- ADP Employment Report: The report showed that US private businesses added 150,000 workers to their payrolls in June, the lowest increase in five months.
- Eurozone Developments: On the Euro side, traders are anticipating increased volatility for the EUR as the second round of the French election runoff approaches on July 7.
| SMA (20) | 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 EUR/USD pair is currently navigating a volatile environment influenced by a weakening US Dollar due to expectations of future Fed rate cuts, disappointing US economic data, and looming political events in the Eurozone. Market participants will closely monitor the upcoming French election runoff and other key economic indicators to gauge the future direction of the EUR/USD pair.
GBPUSD
- Current Trading Range: GBP/USD is trading positively near 1.2750 in the early European session on Thursday.
- UK General Elections: The upcoming UK general elections might limit GBP movement ahead of the vote on Thursday, with the results potentially triggering volatility for the Pound Sterling (GBP) on Friday.
- US Dollar Pressure: The US Dollar (USD) came under modest selling pressure as the market mood improved during the American trading hours, following Federal Reserve Chairman Jerome Powell's comments on the policy outlook on Tuesday.
- Powell's Comments: Speaking at the ECB Forum on Central Banking, Powell acknowledged that the disinflation trend was showing signs of resuming.
- US Holiday: On Thursday, US markets will remain closed in observance of the July 4 holiday.
| 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 GBP/USD pair is currently trading on a positive note, influenced by improved market sentiment and recent comments from Fed Chairman Powell. However, the upcoming UK general elections could introduce volatility, making it essential for traders to stay informed about political developments and economic indicators to anticipate potential market movements.
GOLD
- Current Trading Level: Gold price is looking to extend the previous upsurge early Thursday, sitting at the highest level in over a week near $2,360.
- Fed Meeting Minutes: The Minutes from the Federal Reserve's June 11-12 monetary policy meeting, released on Wednesday, suggested that Fed officials were in a wait-and-see mode.
- Fed Officials' Statements: Federal Reserve Bank of Chicago President Austan Goolsbee stated on BBC Radio on Wednesday that bringing inflation back to 2% will take time and that more economic data are needed. On Tuesday, Fed Chair Jerome Powell said that the central bank is getting back on the disinflationary path, per Reuters.
- Market Reaction: Gold price continues to capitalize on dovish Fed expectations heading into the US Independence Day holiday.
- Liquidity and Upcoming Data: Moves are likely to be exaggerated by low liquidity and repositioning ahead of the all-important US Nonfarm Payrolls data due on Friday.
Closing statement: The gold price is experiencing an upward trend, driven by dovish signals from the Federal Reserve and expectations of continued disinflation. As the market anticipates the upcoming US Nonfarm Payrolls data, traders should be mindful of potential volatility due to low liquidity around the US Independence Day holiday. Keeping an eye on further economic indicators and Fed communications will be crucial for understanding the future trajectory of gold prices.
CRUDE OIL
- Current Trading Level: West Texas Intermediate (WTI) US crude oil prices ticked lower during the European session on Thursday.
- US Economic Data: The data released on Wednesday indicated signs of weakness in the labor market and some cooling in the economy.
- Global Economic Concerns: China's economic woes add to concerns about a slowdown in global economic growth. These factors are anticipated to dent long-term fuel demand, exerting downward pressure on crude oil prices.
- Supply Risks: Persistent supply risks stemming from ongoing conflicts in the Middle East should act as a tailwind for oil.
- Federal Reserve Outlook: Incoming softer US economic data reaffirms market bets that the Federal Reserve (Fed) will start cutting interest rates in September and lower borrowing costs again in December.
| 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 experiencing downward pressure due to signs of economic weakness in the US and ongoing economic challenges in China. These factors contribute to concerns about a slowdown in global economic growth and its impact on long-term fuel demand. However, persistent supply risks from the Middle East provide some support to prices. Market expectations of future Fed rate cuts may also influence the trading environment. Keeping an eye on economic indicators and geopolitical developments will be crucial for understanding the future trajectory of crude oil prices.
DAX
- Eurozone HCOB Services PMI: The PMI fell from 53.2 in May to 52.8 in June, slightly up from a preliminary 52.6.
- US Economic Indicators: Signals of a weakening US labor market could enable a September Federal Reserve rate cut.
- Stock Reactions: Auto, bank, and tech stocks reversed their losses from the Tuesday session. Investors responded positively to election-related news from France and economic indicators that support potential ECB and Fed rate cuts.
- German Factory Orders: Factory orders in Germany unexpectedly fell by 1.6% in May, as per official data from the Federal Statistics Office, indicating stagnation in the German manufacturing sector recovery.
- ECB Influence: The ECB Monetary Policy Meeting Minutes and comments from the ECB could impact buyer appetite for DAX-listed stocks.
| 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 navigating through mixed signals from economic indicators and geopolitical developments. The slight decline in the Eurozone Services PMI and unexpected drop in German factory orders highlight challenges within the Eurozone. However, signals of a weakening US labour market and potential rate cuts by the Fed and ECB have supported a reversal in losses for key sectors like auto, bank, and tech stocks. Investors will closely monitor upcoming ECB comments and policy meeting minutes to gauge future market direction and investment strategies.