EURUSD
- Rebound to 1.0940: The EUR/USD pair rebounded to around 1.0940, snapping a two- day losing streak during the European trading hours on Thursday.
- Selling Interest: On Wednesday, the EUR/USD encountered further selling interest, adding to Tuesday’s pullback and revisiting the key 1.0900 level. This was due to the US Dollar’s (USD) continued weekly recovery and a generally positive tone in global stock markets.
- ECB Policymaker Statement: European Central Bank policymaker Olli Rehn stated on Wednesday that the ECB could continue cutting interest rates if there is confidence among policymakers that the inflation trend is slowing in the near future.
- ECB President's Remarks: ECB President Christine Lagarde mentioned during a press conference that the question of any move in September is still open.
- US Jobless Claims Data: Later in the day, the weekly US Jobless Claims data will provide new insights into the country’s labor market situation, potentially influencing market sentiment.
| SMA (20) | Rising |
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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 shows resilience by rebounding near 1.0940, ending a two-day losing streak. This recovery comes amid a backdrop of continued USD strength and positive global stock market sentiment. Key comments from ECB policymakers suggest potential rate cuts if inflation trends are favourable, adding a layer of uncertainty to the pair's movement. Traders will closely watch the upcoming US Jobless Claims data for further clues on labour market conditions and potential impacts on the USD, which could drive the next directional move for EUR/USD.
GBPUSD
- Breaking the Losing Streak: GBP/USD breaks its three-day losing streak, trading around 1.2700 during the European session on Thursday.
- Weaker US Dollar Influence: The upside can be attributed to the weaker US Dollar, as the US Federal Reserve is widely anticipated to implement a more aggressive rate cut beginning in September.
- Risk Aversion Impact: On the GBP front, increased risk aversion linked to escalating Middle East tensions could lead traders to shy away from risk-sensitive currencies like the Pound.
- BoE Rate Cut Expectations: The potential upside of the British Pound may be restrained by heightened expectations of the Bank of England delivering a 25-basis point rate cut at its August meeting.
- UK Housing Data: The Royal Institution of Chartered Surveyors (RICS) released housing data for the United Kingdom (UK). The RICS Housing Price Balance posted a reading of -19% in July, compared to the previous reading of -17%, marking the lowest since December last year.
| SMA (20) | Rising |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: GBP/USD has managed to break its three-day losing streak, trading around 1.2700, largely supported by a weaker US Dollar amidst expectations of aggressive Fed rate cuts starting in September. However, the ongoing Middle East tensions and risk aversion may temper the Pound's gains. Additionally, anticipation of a rate cut by the Bank of England in August and negative UK housing data could further limit the upside potential for GBP/USD. The pair's movement will likely remain sensitive to developments in global risk sentiment and central bank policy expectations.
GOLD
- Gold Price Movement: Gold price is attempting a tepid bounce while remaining below $2,400 early Thursday, pausing a five-day losing streak.
- Market Sentiment and Geopolitical Tensions: Despite a cautious market mood amid resurfacing Middle East geopolitical tensions, the US Dollar remains broadly subdued.
- CNN news: According to CNN News, citing two sources familiar with the matter, Hezbollah appears increasingly set to act against Israel independently of an expected Iranian response to the recent killing of two terror leaders.
- US Federal Reserve Speculation: Markets are speculating over aggressive easing measures by the US Federal Reserve (Fed) this year, as risks of an economic slowdown persist, contributing to a downbeat tone around the US Dollar.
- Consolidation Phase: In the absence of any relevant Outlook: Traders will closely monitor developments surrounding the potential Iranian attack on Israel. Such an event could provide additional support to the rebound in gold prices.
Closing statement: Gold prices are attempting a recovery after a five-day losing streak, hovering below $2,400. The subdued US Dollar, despite cautious market sentiment amid Middle East geopolitical tensions, suggests ongoing speculation about the Fed's potential aggressive easing measures due to economic slowdown risks. Traders are advised to stay alert to geopolitical developments, particularly regarding the potential Iranian attack on Israel, which could significantly impact gold prices in the near term.
CRUDE OIL
- End of Losing Streak: West Texas Intermediate (WTI) crude oil ends a four-day losing streak, trading around $75.10 per barrel on Wednesday.
- Supply Concerns: Oil prices are getting support from rising concerns about supply constraints due to ongoing geopolitical tensions in the Middle East.
- Chinese Trade Data: Chinese trade data showed that daily crude oil imports in July fell to their lowest level since September 2022, affecting the world’s largest crude importer.
- API Report: The American Petroleum Institute (API) reported an increase of 0.18 million barrels in the Weekly Crude Oil Stock for the week ending August 2, falling short of the expected 0.85 million barrels.
- EIA Estimates: On Tuesday, Reuters reported that the Energy Information Administration (EIA) estimates global oil inventories decreased by approximately 400,000 barrels per day (bpd) in the first half of 2024.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: Crude oil prices have rebounded, breaking a four-day losing streak due to escalating geopolitical tensions in the Middle East, which have raised concerns about supply constraints. While Chinese crude oil imports have hit their lowest level since September 2022, the recent API report showing lower-than-expected inventory increases has supported the price recovery. Additionally, EIA estimates indicating a decrease in global oil inventories suggest tightening supply, which may continue to influence crude oil prices positively in the near term. Traders will likely keep a close watch on geopolitical developments and further inventory data to gauge future price movements.
DAX
- Stock Movements: Continental AG surged by 6.84% after beating Q2 earnings forecasts. Commerzbank bucked the positive trend, sliding by 3.72% after reporting higher-than-expected loan loss provisions in Q2.
- German Industrial Production and Trade Data: Industrial production increased by 1.4% in June after a 3.1% slide in May. However, German exports fell by 3.4% in June, indicating a waning demand environment.
- Manufacturing PMI: The HCOB Manufacturing PMI fell from 43.5 in June to 43.2 in July, suggesting that the uptick in factory orders and industrial production could be short-lived.
- Upcoming Earnings Reports: On Thursday, Siemens AG, Rheinmetall AG, Deutsche Telekom, Allianz, and Munich Re Group will release their earnings reports. The results and forward guidance from these companies are expected to influence DAX trends ahead of the US session.
- Jobless Claims: Continuing jobless claims data, expected on Thursday, will draw investor interest. Economists forecast a decline from 1,877k in the week ending July 20 to 1,870k in the week ending July 27.
| 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: The DAX experienced mixed performances, with Continental AG's strong earnings driving its share price higher, while Commerzbank faced pressure due to increased loan loss provisions. German industrial production showed signs of recovery in June, but declining exports and a dip in the Manufacturing PMI suggest that this may be temporary. Upcoming earnings reports from major companies like Siemens AG and Deutsche Telekom, along with US jobless claims data, will be pivotal in shaping the DAX's near-term direction. Given these mixed signals, the DAX is likely to exhibit volatility as investors digest these developments and their implications for the broader economy.