EURUSD
- EUR/USD may continue its decline for the third consecutive session, trading around 1.0740 during the Asian session on Thursday.
- The Federal Reserve reiterated its openness to adjusting interest rates while expressing concerns about inflation and potential risks to economic stability.
- Additionally, the central bank hinted at a slowdown in the pace of balance sheet reduction, with Chair Jerome Powell suggesting that the next policy move is unlikely to involve a rate hike.
- Federal Reserve Bank of Boston President Susan Collins emphasized the need for a period of moderation in the US economy to achieve the central bank's 2% inflation target, according to a Reuters report on Wednesday.
- Recent statements from ECB officials indicated an increasing possibility of the ECB starting its easing program in June, sparking speculation about three interest rate cuts (equivalent to 75 basis points) for the remainder of the year.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Rising |
|
|
Closing statement: EUR/USD faced downward pressure amid concerns about inflation and economic stability expressed by the Federal Reserve. The central bank's hints at a potential slowdown in balance sheet reduction and openness to rate adjustments contributed to market sentiment. Moreover, statements from ECB officials suggested a growing likelihood of easing measures, adding to speculation about interest rate cuts in the Eurozone.
GBPUSD
- GBP/USD continues its losing streak for the third consecutive session, trading around 1.2490 during the Asian session on Thursday.
- Thursday brings the Bank of England (BoE) interest rate decision, with expectations of maintaining the interest rate at 5.25%.
- Investor expectations regarding potential interest rate cuts by the Bank of England (BoE) have been delayed until September, amid concerns about strong wage growth in the United Kingdom (UK).
- The annual inflation rate in the UK dropped to 3.2% in March, down from 3.4% in February, slightly above the market expectation of 3.1%. This marked the lowest rate since September 2021.
- In the US, the Dollar (USD) is gaining ground due to expectations of the Federal Reserve (Fed) to maintain higher interest rates.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Falling |
| |
| MACD (12, 26, 9) | Rising |
|
|
Closing statement: GBP/USD faced continued downward pressure amid expectations of the Bank of England (BoE) maintaining its interest rate and delayed projections for potential rate cuts. Concerns about strong wage growth in the UK tempered expectations for monetary policy easing. Additionally, the US Dollar strengthened on expectations of the Federal Reserve (Fed) maintaining higher interest rates, contributing to the downward movement of the GBP/USD pair.
GOLD
- Gold price trades with a positive bias on Thursday amid the absence of top-tier economic data releases at mid-week. Speculative interest attempts to glean clues from Federal Reserve (Fed) officials' remarks, but so far, none have provided fresh insights that could spur directional price action.
- Conversely, the growth in global gold demand was primarily propelled by strong over-the-counter market investment, persistent central bank purchasing, and rising demand from Asian buyers, including China and India, according to the most recent report from the World Gold Council (WGC).
- The US weekly Initial Jobless Claims are due on Thursday.
- Additionally, San Francisco Fed President Mary Daly, who is in the dovish wing of the US central bank, is scheduled to speak later in the day. Dovish remarks from Fed officials might limit the downside of the gold price for the time being.
Closing statement: Gold price exhibited a positive bias amid a lack of significant economic data releases, with speculative interest seeking clues from Federal Reserve (Fed) officials' statements. Global gold demand remained robust, driven by various factors outlined in the latest World Gold Council (WGC) report. Market participants await the US weekly Initial Jobless Claims data and remarks from San Francisco Fed President Mary Daly, with dovish comments potentially providing support to the gold price.
CRUDE OIL
- Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $79.30 on Thursday. The oil is recovering losses after a surprise crude stock draw in the United States.
- The Energy Information Administration (EIA) reported on Wednesday that crude inventories for the week ending May 3 declined by 1.4 million barrels to 459.5 million barrels, following a build of 7.3 million barrels in the previous week. The United States anticipates that discussions on a Gaza ceasefire will bridge the gap between the two sides.
- Additionally, hawkish remarks from US Federal Reserve (Fed) officials indicating the intention to maintain higher rates for a longer period have bolstered the Greenback broadly, potentially capping the upside of USD-denominated oil.
- The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, known as OPEC+, are scheduled to meet on June 1 to discuss their production policy.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Falling |
|
|
Closing statement: WTI crude oil saw a recovery in prices following a surprise drawdown in US crude inventories reported by the Energy Information Administration (EIA). Discussions on a Gaza ceasefire and hawkish remarks from US Federal Reserve (Fed) officials regarding maintaining higher interest rates for a prolonged period influenced market sentiment. Attention now turns to the upcoming OPEC+ meeting scheduled for June 1, where discussions on production policy will likely impact oil prices.
DAX
- Economic data from Germany on Wednesday commanded investor attention, with industrial production declining by 0.4% in March following a 1.7% rise in February.
- Mixed corporate earnings results on Wednesday limited gains for the session, as companies like Munich Re, Siemens Energy AG, Fresenius SE, and Continental AG released their earnings reports.
- FOMC member discussions on Wednesday attracted investor interest amid growing uncertainty about the Federal Reserve's rate path.
- ECB commentary throughout the European session on Wednesday was also noteworthy, with ECB Vice President Luis de Guindos, Piero Cipollone, and Elizabeth McCaul scheduled to speak. Their views on the ECB rate path beyond June are important considerations.
- Later in the Thursday session, investor attention will shift to US jobless claims data. Following the softer-than-expected US Jobs Report, an increase in jobless claims could bolster investor expectations of a Fed rate cut in September.
| SMA (20) | Slightly Rising |
|
| RSI (14) | Slightly Rising |
|
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: The DAX index witnessed fluctuations driven by economic data releases and corporate earnings announcements. Investors will closely monitor these developments and data releases, along with corporate earnings reports, to gauge the trajectory of the DAX in the near term.