EURUSD
- The EUR/USD broke out of a flag formation, indicating a bullish move in the market. The bulls are looking for strong follow-through buying to sustain the upward momentum.
- The Euro's upside potential is somewhat limited due to mixed commentary from the European Central Bank (ECB) ahead of the release of Eurozone Sentix data.
- The U.S. dollar showed some recovery in early European hours on Monday, rebounding from Friday's sharp losses following the weak payrolls release.
- The major risk event for the dollar this week is the June inflation report scheduled for Wednesday, which is expected to have a significant impact on the currency.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |  | ||
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: As the EUR/USD continues its bullish breakout, the market remains watchful for strong follow-through buying. However, mixed ECB commentary and the upcoming Eurozone Sentix data may impose limitations on the Euro's upward momentum. Meanwhile, the U.S. dollar seeks to recover from Friday's losses, with all eyes on the crucial June inflation report as a major risk event that could shape the currency's path. Stay tuned for further developments in the EUR/USD pair as market dynamics unfold throughout the day and week.
GBPUSD
- GBP/USD maintains an upward trend, characterized by a series of higher lows and higher highs since late September last year, indicating a bullish bias in the pair.
- The Bank of England's Governor, Bailey, is scheduled to deliver a speech at the Financial and Professional Services Dinner in London. His remarks may provide insights into the central bank's perspective and potential impact on the British pound.
- The U.S. dollar index (DXY) rebounded 0.1% to 102.365 after experiencing a decline of approximately 1% on Friday. The dollar's recovery is worth monitoring for its potential influence on GBP/USD.
- Throughout the week, multiple Federal Reserve officials, including Neel Kashkari, Loretta Mester, Mary Daly, and Christopher Waller, are expected to deliver speeches. These remarks could contribute to shaping market expectations and the broader sentiment surrounding the U.S. dollar.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling | |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: With GBP/USD continuing its upward trajectory, marked by higher lows and higher highs, the pair retains its bullish momentum. Market participants will keenly listen to Bank of England Governor Bailey's speech for potential insights into monetary policy. Meanwhile, the rebound of the U.S. dollar, as indicated by the DXY, may introduce some volatility to GBP/USD. Furthermore, a series of speeches by Federal Reserve officials throughout the week could offer further clarity on the future path of the U.S. dollar. Stay attentive to these developments as they unfold and impact GBP/USD in the coming days.
GOLD
- The Invesco survey reveals an increasing trend among countries repatriating gold reserves as a protective measure against potential sanctions, following examples such as those imposed on Russia by the West. This suggests a growing interest in gold as a safeguarding asset.
- A significant majority of sovereign wealth funds and central banks surveyed (85%) anticipate higher inflation in the coming decade compared to the previous one. This sentiment aligns with the current global economic landscape and reflects the potential impact on gold as an inflation hedge.
- The U.S. dollar weakened on Friday after the release of the monthly employment report, which indicated the smallest job gains in two-and-a-half years. This raises doubts about the extent to which the Federal Reserve will need to raise interest rates to effectively address inflationary pressures.
- Market focus now shifts to Wednesday's release of the consumer price index (CPI) for June. The CPI is expected to show a slower annual increase, potentially indicating a deceleration in inflation compared to previous months.
Closing statement: The repatriation of gold reserves by several countries serves as an indication of the perceived value and importance of gold as a protective asset amidst geopolitical uncertainties. The prevailing expectation of higher inflation in the coming decade further strengthens the case for gold's role as an inflation hedge. The recent weakening of the U.S. dollar following lacklustre job gains raises questions about the Federal Reserve's approach to interest rate hikes and its potential impact on the economy and inflation. Traders and investors will closely monitor the release of the consumer price index on Wednesday for insights into the pace of inflationary growth. These factors contribute to an evolving landscape for XAU/USD and underscore the significance of gold as a safe haven asset in times of economic uncertainty and potential inflationary pressures.
CRUDE OIL
- Crude oil prices experienced a slight dip in Asian trade as investors approached the upcoming economic data releases from major consumers, the United States and China, with caution. However, the expected crude supply cuts from Saudi Arabia and Russia helped to limit the losses.
- Oil traders are exercising caution ahead of the release of the U.S. Consumer Price Index (CPI) and China's array of economic data scheduled for later this week. These data points will likely influence market sentiment and provide insights into the state of the global economy.
- China's government data revealed that factory-gate prices in the country fell at the fastest pace in over seven years in June, signaling a slowdown in the economic recovery of the world's second-largest economy.
- Last week, oil benchmarks registered significant gains, surpassing their highest levels since May. This upward trend marked the second consecutive week of increases, driven by the commitment of major oil exporters Saudi Arabia and Russia to deepen supply cuts starting in August.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Falling | |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The cautious approach of oil traders reflects their anticipation of crucial economic data releases, particularly the U.S. CPI and China's economic indicators. These data points will shed light on the strength of global demand and economic recovery. China's factory-gate price decline, reaching a seven-year low, suggests a deceleration in its economic rebound. However, the oil market was buoyed last week by the commitment of Saudi Arabia and Russia to extend and deepen supply cuts, boosting market sentiment and driving prices higher. As the week progresses, market participants will closely monitor the economic data releases and supply dynamics to assess the trajectory of crude oil prices in the coming weeks.
DAX
- European stock markets experienced a decline on Monday, driven by concerns over weak Chinese inflation data, which raised questions about the strength of the world's second-largest economy.
- In Germany, stocks ended higher on Friday, with notable gains in the Chemicals, Retail, and Technology sectors contributing to the overall positive performance.
- Among the top performers on the DAX, BASF SE NA O.N. stood out with a significant rise of 5.06%, followed by Covestro AG, which gained 2.97%, and Commerzbank AG O.N. with an increase of 2.59% in late trade.
- On the other hand, Heidelberg cement AG O.N. emerged as one of the session's worst performers, experiencing a decline of 3.02%. Beiersdorf AG O.N. and Qiagen NV also faced losses, dropping by 1.48% and 1.16% respectively.
- In the morning session, the DAX index in Germany traded 0.13% higher, the CAC 40 in France rose 0.36%, while the FTSE 100 in the U.K. showed a mostly flat trading pattern.
| SMA (20) | Slightly Falling | | |
| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling | |
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Closing statement: European stock markets, including the DAX, faced downward pressure on Monday due to concerns arising from weak Chinese inflation data. However, positive performances in key sectors supported gains in Germany's stock market. BASF SE NA O.N., Covestro AG, and Commerzbank AG were among the notable gainers, while Heidelberg cement AG, Beiersdorf AG, and Qiagen NV encountered losses. As the trading day unfolds, market participants will closely monitor developments in global economic indicators and potential impacts on stock market performance.