EURUSD
- The EUR/USD maintains its positive trend for the fourth consecutive day, hovering near 1.0765 during early Monday trading, supported by recent US employment data.
- US job growth slowed more than expected in April according to data from the US Bureau of Labor Statistics (BLS), prompting a subdued market sentiment towards the US dollar.
- Wage inflation, measured by the change in Average Hourly Earnings, declined to 3.9% year-on-year, while the Unemployment Rate edged up to 3.9% in April from 3.8% in March.
- Economic analysts suggest that the prospect of the ECB deviating from the Federal Reserve (Fed) on interest rate cuts could negatively impact the Eurozone, potentially leading to selling pressure on the Euro against the US dollar.
- Market participants await the release of the HCOB Purchasing Managers’ Index (PMI) data from Germany and the Eurozone, as well as the Eurozone Producer Price Index (PPI), for further insights into the economic landscape.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: EUR/USD continues its positive streak, supported by weaker-than-expected US job growth in April. Despite declining wage inflation and a slight uptick in the Unemployment Rate, concerns about the ECB potentially diverging from the Fed on interest rate cuts may weigh on the Eurozone economy and exert selling pressure on the Euro against the US dollar. Traders are awaiting the release of PMI data from Germany and the Eurozone, along with the Eurozone Producer Price Index, for further clarity on economic conditions.
GBPUSD
- GBP/USD maintains its upward trend for the fourth consecutive day, trading around 1.2500 during Asian trading hours on Monday.
- The US Nonfarm Payrolls report released on Friday showed that the US economy added 175,000 jobs in April, falling short of the estimated 243,000 and signaling a notable slowdown from the previous month's addition of 315,000 jobs.
- Market expectations have shifted, with the Federal Reserve now anticipated to implement its first interest rate cut in September, a change from earlier projections suggesting November.
- Conversely, the Bank of England (BoE) is expected to keep interest rates unchanged at 5.25% during its upcoming meeting on Thursday.
- BoE Governor Andrew Bailey expressed optimism in April regarding UK inflation, indicating that it is on track to meet the 2% target.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: GBP/USD continues its upward trajectory, supported by weaker-than-expected US job growth in April. With the Federal Reserve now expected to implement its first interest rate cut in September, market sentiment towards the US dollar may remain subdued. Meanwhile, the Bank of England is anticipated to maintain interest rates unchanged at 5.25% during its upcoming meeting. BoE Governor Andrew Bailey's optimism regarding UK inflation further bolsters the outlook for the Pound.
GOLD
- Gold price (XAU/USD) reverses its two-day decline, gaining ground during the early European session on Monday. Weaker-than-expected US employment reports have increased the likelihood of a September rate cut by the US Federal Reserve (Fed), providing support for gold prices.
- On Friday, the US ISM Services PMI fell into contractionary territory, dropping from 51.4 in March to 49.4 in April, below the market forecast of 52.0, further bolstering expectations of Fed rate cuts.
- Despite this, easing concerns about geopolitical tensions in the Middle East, particularly the Iran-Israel conflict, and a risk-on environment may dampen demand for safe-haven assets like gold, limiting its upside potential.
- Gold traders will closely monitor speeches by Fed officials, including Thomas Barkin and John Williams, scheduled for Monday. Any dovish remarks from these officials could provide additional support to XAU/USD.
Closing statement: Gold prices rebounded during the early European session on Monday, supported by weaker-than-expected US employment reports, which increased expectations of a September rate cut by the US Federal Reserve. However, easing geopolitical tensions in the Middle East and a risk-on sentiment may pose challenges to gold's upside potential. Traders will closely watch speeches by Fed officials for further guidance on the future trajectory of gold prices.
CRUDE OIL
- West Texas Intermediate (WTI) crude oil price rebounds from its recent losses, trading around $78.60 per barrel during the Asian session on Monday.
- Oil prices saw an uptick after Saudi Arabia increased its June crude prices for various regions, signaling expectations of robust demand during the summer season. Additionally, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are likely to maintain current oil production levels for another three months, which supports oil prices amid concerns about supply.
- Geopolitical tensions also contributed to the rise in oil prices, as concerns about the failure of a Gaza ceasefire deal emerged.
- Furthermore, lower-than-expected US jobs data renewed hopes for Federal Reserve interest rate cuts this year, potentially boosting oil demand.
| SMA (20) | Slightly Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: Crude oil prices rebounded during the Asian session on Monday, supported by Saudi Arabia's increase in June crude prices and expectations of sustained production levels by OPEC+. Geopolitical tensions and renewed hopes for Federal Reserve interest rate cuts also influenced the upward trajectory of oil prices. Traders will continue to monitor supply and demand dynamics, as well as geopolitical developments, for further direction in crude oil markets.
DAX
- Unemployment figures for the Eurozone released on Friday remained unchanged at 6.5% in March, fueling investor expectations of a June ECB rate cut.
- Strong earnings results from French banks Societe Generale and Credit Agricole boosted buyer demand for DAX-listed bank stocks.
- Disappointing US economic indicators, including the US Jobs Report and the ISM Services PMI, fueled investor expectations of a September Fed rate cut.
- Finalized Services PMI numbers for Germany and the Eurozone on Monday will draw investor attention, providing insights into the economic health of the region.
- Corporate earnings, including those from BioNTech, will also be significant for investor sentiment and market direction.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Neutral |
Closing statement: The DAX experienced mixed influences last week, with unemployment figures for the Eurozone and strong earnings from French banks driving investor sentiment. Disappointing US economic indicators raised expectations of a September Fed rate cut, impacting market dynamics. Investors focus now shifts to finalized Services PMI numbers for Germany and the Eurozone, along with corporate earnings releases, for further insight into economic trends and market direction.