EURUSD
- EUR/USD ended its four-day winning streak, trading around 1.0760 during the Asian hours on Tuesday, as the US dollar regained some strength.
- The euro found support from higher-than-expected Eurozone Purchasing Managers Index (PMI) data released on Monday, signaling robust economic activity in the region.
- European Central Bank (ECB) Chief Economist Philip R. Lane's remarks on Monday raised the likelihood of a first interest-rate cut in June, as recent Eurozone data increased his confidence in inflation returning to the 2% goal.
- April's Eurozone Services PMI showed the strongest growth in nearly a year, surpassing initial estimates, further bolstering the euro's resilience.
- Retail Sales data scheduled for release later on Tuesday will offer insights into the short-term performance of the retail sector, potentially influencing the euro's movement.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: EUR/USD experienced a pause in its upward momentum as the US dollar regained strength, following higher-than-expected Eurozone PMI data and comments from ECB Chief Economist Philip R. Lane suggesting a possible interest-rate cut in June. The euro remained resilient, supported by robust economic indicators, including strong Services PMI data. Investors focus now shifts to upcoming Retail Sales data, which could provide further clues about the euro's short-term trajectory.
GBPUSD
- GBP/USD faced pressure as Bloomberg reported Richmond Federal Reserve (Fed) President Thomas Barkin's remarks on Monday, suggesting that elevated interest rates could slow US economic growth and bring inflation closer to the central bank's target.
- New York Fed President John Williams also weighed in, indicating that while rate cuts were anticipated, current monetary policy was considered favorable. Fed Bank of Minneapolis President Neel Kashkari is scheduled to speak later in the day.
- Investor expectations for US Federal Reserve rate cuts increased following weaker-than-expected US employment data in April, driving speculation about potential monetary policy adjustments.
- The upcoming Bank of England (BoE) interest rate decision on Thursday will be closely watched, although no rate change is expected at this time.
- Dovish comments from BoE Governor Andrew Bailey and Deputy Governor Dave Ramsden in April raised speculation that the BoE's easing cycle might align more closely with the European Central Bank (ECB) than with the Fed.
| SMA (20) | 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 faced downward pressure amid remarks from US Federal Reserve officials suggesting potential interest rate cuts to support economic growth and address inflation concerns. Investor anticipation of rate cuts was heightened following weaker US employment data in April. The focus now shifts to the Bank of England's interest rate decision, with dovish comments from BoE officials fuelling speculation about the alignment of the BoE's monetary policy with that of the European Central Bank.
GOLD
- XAU/USD faces resistance near the 20 Simple Moving Average (SMA) on the daily chart, currently trading around $2,320.00, indicating a key technical level to watch. The US Dollar weakened in the first half of the day, but trading activity remained thin due to holidays in Japan and the United Kingdom, contributing to subdued market conditions.
- XAU/USD gained ground following mixed comments from Federal Reserve (Fed) officials. Richmond Fed President Thomas Barkin highlighted disappointing inflation, suggesting that the Fed's policy goals are not yet achieved.
- Federal Reserve Bank of New York President John C. Williams struck a dovish tone, indicating an eventual rate cut and emphasizing the importance of economic data in the Fed's decision-making process.
- With a limited macroeconomic calendar in the United States (US) this week, market sentiment may be influenced by speeches from multiple Fed officials, following last week's moderately hawkish monetary policy announcement.
Closing statement: XAU/USD encountered resistance near the 20 Simple Moving Average (SMA) while trading around $2,320.00, with the US Dollar weakening amid thin trading conditions due to holidays in key markets. Mixed comments from Federal Reserve officials, including observations on disappointing inflation and dovish remarks on future rate cuts, influenced gold prices. Market sentiment may be guided by speeches from multiple Fed officials in the absence of significant economic data releases in the United States (US) this week.
CRUDE OIL
- Oil prices saw a slight increase following Israel's strike on Rafah in Gaza, amid ongoing negotiations for a ceasefire, contributing to market uncertainty.
- The conflict in the Middle East raised concerns about potential disruptions in crude oil supplies, supporting oil prices as investors monitored geopolitical developments. Analyst forecasts suggested a decline in crude oil and product stockpiles in the United States (US) last week, according to a Reuters poll conducted on Monday.
- US President Joe Biden's energy adviser, Amos Hochstein, reassured that the US Strategic Petroleum Reserve (SPR) holds ample oil supply to address any supply-related concerns, with careful monitoring of market conditions for potential utilization.
- Despite President Biden's directive for the largest-ever sale of 180 million barrels from the SPR after Russia's 2022 invasion of Ukraine, the reserve remains near 40-year lows, highlighting ongoing supply pressures.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: Oil prices experienced a slight increase amid ongoing negotiations for a ceasefire in the Middle East following Israel's strike on Rafah in Gaza, contributing to market uncertainty. Concerns about potential supply disruptions supported prices, while analyst forecasts indicated a decline in US crude oil and product stockpiles. US President Biden's energy adviser reassured the market about the ample oil supply in the Strategic Petroleum Reserve (SPR), despite its near 40-year lows, underscoring ongoing supply pressures.
DAX
- German service sector activity attracted investor interest, with the German HCOB Services PMI rising from 50.1 to 53.2 in April, albeit revised down from a preliminary 53.2. The Eurozone HCOB Services PMI also contributed positively, increasing from 51.5 to 53.3.
- The PMI numbers coincided with market-friendly ECB commentary, as ECB Chief Economist Philip Lane expressed expectations of inflation returning to the 2% target by mid-2025.
- Germany's factory orders declined by 0.4% on a monthly basis in March, following a 0.8% contraction in February, according to data from Germany's Destatis.
- Germany's March trade balance remained steady at €22.3 billion, slightly exceeding expectations of €22.2 billion, with exports up 0.9% and imports up 0.3% compared to February.
- Corporate earnings reports from companies such as Ferrari, Unicredit, Siemens Healthineers, Deutsche Post, Infineon Technologies, and Zalando SE will also be influential, adding to the broader market sentiment.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: German service sector activity and positive ECB commentary buoyed investor sentiment in the DAX, with PMI numbers indicating growth and expectations of inflation returning to target. However, declines in factory orders and steady trade balances tempered some optimism. Attention remains on corporate earnings reports from key companies like Ferrari and Siemens Healthineers, adding to market dynamics.