EURUSD
- Softening Trend: The EUR/USD pair is trading with a softer tone, hovering around 1.0775 during the early European hours on Friday.
- Descending Trend Channel: Based on the daily chart analysis, EUR/USD has been moving within a descending trend channel since mid-December 2023, suggesting a bearish bias in the near term.
- Rise in US Jobless Claims: US Initial Jobless Claims increased to 231K for the week ending May 3, marking the highest number of new jobless benefits seekers week-on-week since last August. This data may indicate weakness in the US labor market.
- Uncertain Inflation Outlook: San Francisco Fed President Mary C. Daly expressed uncertainty regarding the inflation outlook, mentioning that recent declines in employment data pose low risks.
- US Consumer Sentiment Index: Investors await the release of the US Michigan Consumer Sentiment Index for May later on Friday, which is expected to decline from 77.2 in April to 76.0 in May, potentially impacting the direction of EUR/USD.
| 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: Despite trading on a softer note, the EUR/USD pair faces downward pressure as it continues to move within a descending trend channel. Rising US jobless claims and uncertainties surrounding the inflation outlook contribute to the cautious sentiment. Investors are closely monitoring the US Michigan Consumer Sentiment Index release for further insights into consumer sentiment trends, which could influence the pair's direction.
GBPUSD
- Modest Gains: GBP/USD registers modest gains, trading near 1.2535 on Friday, with the key 200-day Simple Moving Average at 1.2542 acting as an immediate resistance level.
- BoE's Monetary Policy: The Bank of England (BoE) maintained its borrowing costs at 5.25% for the sixth consecutive meeting on Thursday, signaling the possibility of interest rate cuts starting as early as next month as inflation trends positively.
- Possibility of Rate Cut: BoE Governor Andrew Bailey mentioned during the press conference that a rate cut next month was a possibility, but he emphasized the importance of waiting for inflation, activity, and labor market data before making a decision.
- Confidence in Rate Cuts: BoE Chief Economist Huw Pill expressed confidence in considering rate cuts over the next few meetings, although he highlighted the need for more evidence before making any decisions.
- Focus on Economic Data: Investors' attention on Friday will be on the release of the first reading of UK Gross Domestic Product for Q1 and the US Michigan Consumer Sentiment report, which could influence GBP/USD's movement.
| 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 experiences modest gains amid discussions surrounding potential interest rate cuts by the Bank of England. The central bank signals a willingness to consider rate cuts in the coming months, contingent upon inflation, economic activity, and labour market data. Attention shifts to key economic releases, including UK GDP for Q1 and the US Michigan Consumer Sentiment report, which may shape the currency pair's direction moving forward.
GOLD
- Momentum in Gold Price: Gold price gains momentum on Friday despite a modest rebound in the US Dollar, with buyers defending the $2,300 area, indicating renewed interest in the precious metal.
- US Initial Jobless Claims: The US Initial Jobless Claims for the week ended May 4 rose to 231K, surpassing market expectations and reflecting a slight deterioration in the labor market.
- Economic Data Impact: The uptick in jobless claims, coupled with April's underwhelming US Nonfarm Payrolls (NFP) report, suggests a potential slowdown in the US economy, supporting the demand for safe-haven assets like gold.
- Market Focus: Gold traders remain focused on the release of the first reading of the US Michigan Consumer Sentiment Index for May and speeches from Fed officials Bowman, Goolsbee, and Barr, which could provide insights into the central bank's policy outlook.
- Future Outlook: Attention turns to the upcoming US Consumer Price Index (CPI) report next week, which could influence market sentiment and gold prices.
Closing statement: XAU/USD experiences a resurgence in momentum, supported by buyers defending the $2,300 area despite a slight rebound in the US Dollar. Concerns over a cooling US economy, highlighted by higher-than-expected jobless claims and lacklustre NFP data, drive demand for gold as a safe-haven asset. Traders closely monitor upcoming economic releases and speeches from Fed officials for further insights into monetary policy direction, while the focus shifts to the US Consumer Price Index report next week, shaping the outlook for gold prices.
CRUDE OIL
- Optimism about Rising Demand: Crude oil edges higher amid optimism surrounding increased demand in China and the US, the world's largest crude-consuming nations, indicating a potential boost in consumption.
- China's Crude Oil Imports: China's crude oil imports rose by 5.45% in April compared to the same month last year, signaling a positive uptick in demand and consumption levels in the world's second-largest economy.
- Decline in US Oil Inventories: The decline in oil inventories in the US, dropping by 1.4 million barrels in the week ending May 3, according to the Energy Information Administration (EIA), contributes to the upward movement in crude oil prices.
- Geopolitical Tensions: Israeli forces intensify military actions near Rafah following President Joe Biden's remarks, raising concerns about escalating tensions in the Middle East, a region critical for oil production and transportation.
- Impact of US Dollar Strength: Despite positive factors, the stronger US Dollar, bolstered by the hawkish stance of the US Federal Reserve (Fed), may limit the upside potential of USD-denominated oil in the near term.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling |
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Closing statement: Crude oil prices experience upward momentum driven by optimism surrounding increased demand in major consuming nations like China and the US, coupled with a decline in US oil inventories. However, geopolitical tensions in the Middle East pose concerns for oil markets. Additionally, the strength of the US Dollar, supported by the hawkish stance of the Fed, may temper the upside potential of USD-denominated oil in the short term, warranting careful monitoring of both fundamental and geopolitical factors.
DAX
- China's Trade Data: Trade data from China for April attracted investor interest, with imports surging by 8.4% year-on-year and exports increasing by 1.5%, indicating robust trade activity and potential global economic recovery.
- Alignment with PMI Numbers: China's trade figures aligned with recent private sector Purchasing Managers' Index (PMI) numbers for April, where the Caixin Manufacturing PMI rose from 51.1 to 51.4, driven by strong overseas demand.
- Impact of US Initial Jobless Claims: US initial jobless claims data raised investor expectations of a September Fed rate cut, as claims increased from 209k to 231k in the week ending May 4, signaling potential labor market challenges.
- Focus on ECB Monetary Policy Meeting Minutes: Investors will closely watch the European Central Bank (ECB) monetary policy meeting minutes on Friday, seeking insights into post-June policy plans amid rising expectations of a June ECB rate cut.
- Continued Monitoring of ECB Chatter: ECB Executive Board members Frank Elderson and Piero Cipollone are scheduled to speak, and their comments on inflation, economic outlook, and potential interest rate cuts will be crucial for market sentiment.
| SMA (20) | Slightly Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: Trade data from China, coupled with robust PMI numbers, indicate positive momentum for global economic recovery, supporting investor sentiment. However, concerns about the impact of rising US initial jobless claims on the labour market and expectations of ECB rate cuts add uncertainty to market dynamics. Investors should remain vigilant and monitor ECB communications closely for insights into future policy decisions.