EURUSD
- EUR/USD experienced a 0.1% decline, reaching 1.0777, ahead of ECB Vice President Luis de Guindos' upcoming speech in Madrid, which may provide guidance for traders.
- Market participants are eager for insights ahead of the European Central Bank's policy-setting meeting next week, although a rate hike by the central bank is widely anticipated.
- The U.S. dollar showed a slight increase in early European trade on Friday, recovering from previous session losses as investors sought safe-haven assets following weak Chinese inflation data.
- Recent data revealed a significant surge in the number of Americans filing new claims for unemployment benefits, reaching the highest level in over 1½ years.
- Traders will closely monitor the ECB Vice President's speech, the upcoming policy-setting meeting, and the impact of economic indicators on EUR/USD in the days ahead.
| SMA (20) | Falling |  |
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| RSI (14) | Neutral | |||
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: EUR/USD faced a slight decline as traders awaited ECB Vice President Luis de Guindos' speech, which is anticipated to offer guidance ahead of the central bank's policy-setting meeting next week. Meanwhile, the U.S. dollar rebounded after losses, driven by concerns over weak Chinese inflation data. Additionally, the surge in new unemployment claims in the U.S. added to market sentiment. Traders will closely watch these developments and economic indicators as they influence the direction of EUR/USD in the near term.
GBPUSD
- GBP/USD saw a slight increase, reaching 1.2562, hovering near a one-month high.
- The DXY, which measures the dollar against six other currencies, experienced a 0.1% rise to 103.358, recovering from significant losses in the previous session, where it recorded its largest daily decline in weeks.
- The rebound in the U.S. dollar followed weak employment data, which indicated a potential pause in the Federal Reserve's year-long rate-hiking cycle.
- However, the dollar remains down 0.6% for the week, on track for its worst week since mid-March.
- Traders will continue to monitor the performance of GBP/USD and the dollar's trajectory, considering the impact of economic indicators and the Federal Reserve's monetary policy decisions.
| SMA (20) | Slightly Rising |
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| RSI (14) | Neutral | |||
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD witnessed a slight upward movement, reaching near a one-month high, while the U.S. dollar recovered from significant losses driven by weak employment data. Despite the rebound, the dollar remains on track for its worst week since mid-March. Traders will closely follow the developments in GBP/USD and the dollar's performance as they navigate through market dynamics and the Federal Reserve's monetary policy decisions.
GOLD
- Gold and other metals showed stability on Friday, heading for a second consecutive week of gains, as the dollar retreated amid expectations of a pause in the Federal Reserve's rate hike cycle.
- On Thursday, gold experienced its strongest intraday gain in two weeks, reaching the upper end of a trading range observed since mid-May.
- Citigroup analysts predict that gold will average $1,965 per ounce in the near term, as they adopt a neutral stance on the price. Commerzbank assumes that the Fed will refrain from further rate hikes after the pause to prevent excessive tightening of credit conditions.
- The release of the latest consumer prices index for May, scheduled for Tuesday, holds significance as it coincides with the central bank officials' decision-making on interest rates and follows indications of a weakening labor market.
- Traders and investors will closely monitor gold and the broader metal markets, considering the impact of the dollar's retreat, the Fed's policy decisions, and economic indicators.
Closing statement: Gold and other metal markets displayed stability, poised for a second week of gains, as the dollar retreated amidst expectations of a pause in the Federal Reserve's rate hike cycle. Analysts project a neutral outlook for gold, with an anticipated average price of $1,965 per ounce. The upcoming release of the consumer prices index for May carries significance, preceding the central bank officials' decision on interest rates and reflecting concerns about the weakening labor market. Market participants will closely observe these developments, along with the dollar's performance, to navigate the dynamics of gold and the broader metal markets.
CRUDE OIL
- Crude oil prices continued to decline in Asian trade on Friday due to concerns about slowing economic growth, which is expected to negatively impact demand. Weak economic data from China added to the negative sentiment.
- Chinese consumer inflation contracted in May compared to the previous month, while factory gate inflation experienced its sharpest decline in seven years. This reflects limited spending and a slower post-COVID economic recovery in China.
- The combination of these readings, along with other weak economic indicators from China in recent weeks, has dampened expectations of a robust oil demand driven by a strong recovery in the country.
- Despite Saudi Arabia's recent production cuts, which should tighten the global oil supply, fears of weakening demand have outweighed these factors.
- As a result, crude oil prices are on track to experience a second consecutive week of losses.
| SMA (20) | Slightly Rising |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: Crude oil prices faced continued downward pressure in Asian trade as concerns over slowing economic growth and dismal economic data from China eroded market sentiment. The contraction in Chinese consumer inflation and the significant decline in factory gate inflation highlighted the limited spending and slower post-COVID economic recovery in the country, further dampening expectations of robust oil demand. Despite production cuts by Saudi Arabia aimed at tightening the global supply, fears of weakening demand have prevailed, leading crude oil prices towards a second consecutive week of losses.
DAX
- Germany stocks showed mixed results at the close on Thursday, with gains in the Food & Beverages, Transportation & Logistics, and Chemicals sectors, while losses were seen in the Construction, Telecoms, and Basic Resources sectors.
- European stock markets experienced a decline on Friday, as concerns about the Chinese economy's recovery from the COVID-19 pandemic overshadowed the positive sentiment from Wall Street's rally.
- The DAX index in Germany traded 0.28% lower, the CAC 40 in France fell 0.06%, and the FTSE 100 in the U.K. traded 0.3% lower.
- The European Central Bank is widely expected to raise interest rates next week, with a quarter-point increase fully priced for Thursday.
- ECB President Christine Lagarde stated on Monday that it was premature to declare a peak in core inflation, and a majority of economists surveyed by Reuters anticipate another 25 basis points rate hike in July.
| SMA (20) | Neutral |
| RSI (14) | Neutral |
| MACD (12, 26, 9) | Neutral |
Closing statement: Following a mixed performance in Germany stocks on Thursday, European stock markets declined on Friday due to concerns regarding the Chinese economy's recovery from the COVID-19 pandemic. The DAX index in Germany recorded a 0.28% drop, the CAC 40 in France fell 0.06%, and the FTSE 100 in the U.K. experienced a 0.3% decline. Anticipation of an interest rate increase by the European Central Bank next week, with a quarter-point rise fully priced for Thursday, has been the focus. ECB President Christine Lagarde's comments on core inflation and the expectations of economists for another rate hike in July have contributed to the market sentiment.