EURUSD
- Election Outcome in France: EUR/USD stumbled on Monday after a muddled election outcome in France leaves policy guidance unclear for the Euro bloc.
- Current Gains: EUR/USD is posting small gains above 1.0800 in the early European session on Tuesday.
- Fed Chairman's Testimony: Federal Reserve (Fed) Chairman Jerome Powell is set to make the first of two appearances this week as the Fed head delivers the semiannual Monetary Policy Report to the US Senate Banking Committee.
- Upcoming US Inflation Data: Key US inflation data will be released later this week. The US Consumer Price Index (CPI) inflation is due on Thursday, and the Producer Price Index (PPI) wholesale inflation is slated for Friday.
- German Inflation Data: Final German inflation figures will be published during the Thursday European market session.
| 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 setback on Monday due to an unclear election outcome in France, impacting policy guidance for the Euro bloc. However, the pair is currently showing modest gains, trading above 1.0800 in the early European session on Tuesday. Attention is now focused on Federal Reserve Chairman Jerome Powell's upcoming testimony before the US Senate Banking Committee, which could provide crucial insights into the Fed's monetary policy stance. Later this week, key US inflation data, including the CPI and PPI, will be closely monitored, as these figures could significantly influence market sentiment.
GBPUSD
- Current Consolidation: GBP/USD is consolidating around 1.2800 early Tuesday, having tested multi-week highs on Monday.
- Fed Powell's Anticipated Stance: Fed Chairman Jerome Powell is expected to acknowledge some progress made on inflation today and will remain data-dependent for rate cuts.
- Strong Appeal of GBP/USD: The overall appeal of the GBP/USD is quite firm as market speculation for the Fed to begin reducing interest rates from the September meeting has deepened.
- NFP Report Influence: Expectations for early Fed rate cuts have been prompted by the US Nonfarm Payrolls report for June, which indicated that the labor market has lost momentum.
- Upcoming UK Economic Data: The United Kingdom's monthly Gross Domestic Product and factory data for May will be published on Thursday.
| SMA (20) | Slightly Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: GBP/USD is consolidating around the 1.2800-mark early Tuesday, having briefly reached multi-week highs on Monday. The pair's performance is bolstered by market speculation that the Federal Reserve might begin reducing interest rates from the September meeting, following indications of a slowing labour market in the June NFP report. Investors are also keenly awaiting Fed Chairman Jerome Powell's comments, where he is expected to highlight progress on inflation while emphasizing a data-dependent approach for future rate cuts.
GOLD
- Current Gold Price Movement: Gold price is attempting a tepid bounce while defending the $2,350 psychological support in European trading on Tuesday.
- Market Anticipation: Traders eagerly await US Federal Reserve (Fed) Chairman Jerome Powell’s congressional testimonies for fresh hints on the interest-rate cut timing.
- Rate Cut Expectations: Markets are pricing a 77% chance that the Fed will lower rates in September, according to the CME Group’s FedWatch Tool. Another cut is expected by December.
- Potential Impact of Powell's Testimony: Fed Chair Powell’s words could reinforce dovish Fed expectations, potentially lifting gold price to all-time highs beyond $2,400 at the expense of the US Dollar.
- Additional Influences: Several other Fed policymakers are also likely to speak on Tuesday, which could drive the gold price action amid a data-light US calendar.
Closing statement: Gold price is currently attempting a modest recovery, defending the crucial $2,350 psychological support level in European trading on Tuesday. Traders are focused on US Federal Reserve Chairman Jerome Powell’s upcoming congressional testimonies for insights on the timing of interest rate cuts. The market is pricing a 77% chance of a rate cut in September, with another reduction expected by December, according to the CME Group’s FedWatch Tool. Powell's comments could reinforce dovish expectations, potentially propelling gold prices to new all-time highs above $2,400.
CRUDE OIL
- Current Price Movement: WTI price loses ground due to ongoing discussions about a US ceasefire plan to end the Gaza war.
- Impact of Hurricane Beryl: Crude Oil prices faced pressure after Hurricane Beryl, which struck a key US Oil-producing hub in Texas, caused less damage than anticipated by markets.
- Saudi Exports to China: According to Reuters, Saudi crude oil exports to China are expected to rebound in August, with shipments reaching at least 44 million barrels, which will bolster demand.
- Ceasefire Negotiations: Looking ahead, crude oil prices might encounter further challenges as market participants await progress in ceasefire negotiations in the Middle East.
- Supply Drawdown Expectations: Crude Oil markets will be looking for a continuation of last week’s sharp supply drawdown after both the American Petroleum Institute (API) and the Energy Information Administration (EIA) both post huge week-on-week contractions in US Crude Oil supplies.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: WTI crude oil prices are experiencing downward pressure due to ongoing discussions regarding a US ceasefire plan to end the Gaza war. Additionally, the impact of Hurricane Beryl was less severe than markets anticipated, further weighing on prices. Despite this, crude oil prices might face additional challenges as traders await further progress in Middle East ceasefire negotiations. The market is also focused on the potential continuation of last week's significant supply drawdowns, following substantial week-on-week contractions reported by both the American Petroleum Institute (API) and the Energy Information Administration (EIA).
DAX
- Market Performance: Germany stocks were mixed after the close on Monday, as gains in the Insurance, Food & Beverages, and Transportation & Logistics sectors led shares higher while losses in the Construction, Retail, and Utilities sectors led shares lower.
- ECB Commentary: On Monday, ECB policymaker and Dutch central bank chief Klaas Knot said in an interview, "I don't see a case for another rate cut in July."
- Monetary Policy Debate: The debate about whether the European Central Bank (ECB) will deliver subsequent rate cuts is gaining traction. ECB officials are scheduled to meet on July 18.
- US Consumer Inflation Expectations: On Monday, US consumer inflation expectations attracted investor attention, falling from 3.2% to 3.0% in June.
- Fed Focus: On Tuesday, investor focus shifts to the testimony from Fed Chair Powell amidst rising hopes of a September Fed rate cut.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The DAX exhibited a mixed performance on Monday, influenced by sectoral gains in Insurance, Food & Beverages, and Transportation & Logistics, while sectors like Construction, Retail, and Utilities experienced losses. ECB policymaker Klaas Knot's statement indicating no case for a rate cut in July added to the ongoing debate about the ECB's monetary policy direction, with the next ECB meeting scheduled for July 18. As Tuesday approaches, market attention pivots towards the US Federal Reserve, with investors keenly awaiting Fed Chair Powell's testimony, which could signal a potential rate cut in September.