EURUSD
- Narrow Range for EUR/USD: EUR/USD is trading within a narrow range below 1.0750 during Thursday's European morning session, indicating limited volatility in the currency pair.
- US Dollar Strength: The US Dollar has strengthened, contributing to EUR/USD's current levels. This uptick in the Dollar is attributed to the rise in US yields across various timeframes, reaching multi-week highs following the release of higher-than-expected US inflation figures for March, as measured by the Consumer Price Index (CPI).
- Reduced Bets for June Rate Cut: The stronger US economic data has led to a significant reduction in expectations for a rate cut by the Federal Reserve (Fed) in June. The probability of such an event, as tracked by the CEM Group's FedWatch Tool, is currently around 20%.
- Shift in Fed's Easing Cycle Projection: With the reduced likelihood of a June rate cut, there is a perceptible shift in market perception regarding the timing of the Fed's easing cycle. It is now anticipated that the Fed may initiate its easing measures later than initially projected, possibly in the fourth quarter of the year.
- Speculation Surrounding ECB's Monetary Policy: There is speculation in the market that the European Central Bank (ECB) may consider initiating interest rate reductions during the summer months, potentially impacting EUR/USD dynamics in the future.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: EUR/USD is trading within a narrow range amid strengthening US Dollar and reduced expectations for a June rate cut by the Federal Reserve. Market sentiment suggests a shift in perception regarding the Fed's easing cycle, while speculation surrounding potential ECB policy changes adds further uncertainty to EUR/USD movements in the near term.
GBPUSD
- Recovery Mode for GBP/USD: GBP/USD maintains its recovery mode below 1.2550 during early European trading on Thursday, indicating ongoing resilience in the currency pair.
- Technical Analysis: From a technical standpoint, GBP/USD has experienced significant movement, dropping below the 200 Daily Moving Average, signaling potential shifts in market sentiment.
- US Inflation Data: The highlight of the day was the release of US inflation data, which exceeded expectations. The Consumer Price Index (CPI) rose by 0.4% on a monthly basis and 3.5% on an annual basis, surpassing previous figures and indicating higher-than-anticipated inflationary pressures.
- Fed Policy Outlook: The latest Federal Open Market Committee (FOMC) Minutes revealed that policymakers are cautious about committing to policy easing until they are more confident that inflation is decelerating. This cautious stance may influence GBP/USD dynamics moving forward.
- Upcoming Economic Data: Investors are awaiting the release of the US March Producer Price Index (PPI) and weekly Initial Jobless Claims on Thursday. Additionally, market participants are gearing up for the release of UK monthly Gross Domestic Product (GDP) numbers later in the week, which could provide further insights into economic performance and impact GBP/USD trading.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: GBP/USD continues its recovery mode amid significant technical movements and anticipation of key economic data releases. The currency pair faces influences from US inflation data and Fed policy outlook, while upcoming economic indicators from both the US and UK will likely shape GBP/USD movements in the near term.
GOLD
- Recovery in Gold Price: Gold price is experiencing a partial recovery from the previous day's losses, bouncing towards $2,350 during Asian trading on Thursday, indicating renewed investor interest in the precious metal. US CPI Data: The US Consumer Price Index (CPI) for March exceeded expectations, with a 0.4% month-over-month increase and a 3.5% annual growth, contributing to higher inflationary pressures than anticipated. This data has tempered expectations for Federal Reserve rate cuts in June.
- Impact on Fed Rate Cuts: The hotter-than-expected US CPI data has reduced market expectations for Federal Reserve rate cuts in June, with the probability of a rate cut dropping to 18%, compared to around 52% before the release of the data.
- Geopolitical Tensions: Escalating geopolitical tensions in the Middle East have provided support to the late rebound in gold price, reinforcing its safe-haven status in uncertain times.
- Upcoming Risks: Risks to the Gold price rebound may emerge with the release of US Producer Price Index (PPI) data and the European Central Bank (ECB) policy announcements. While the ECB is expected to maintain borrowing costs at current levels, market focus will be on any signals regarding potential rate cuts in June.
Closing statement: Gold price is rebounding amid renewed investor interest, supported by hotter-than-expected US CPI data and geopolitical tensions. However, risks to the rebound exist with upcoming US PPI data and ECB policy announcements, which could influence gold price movements in the near term. Investors will closely monitor these developments for potential impacts on XAU/USD dynamics.
CRUDE OIL
- WTI Crude Oil Prices: WTI crude oil prices are struggling to gain momentum despite a recent bounce from the $84.00 mark, hovering near a one-week low and trading within a narrow range. This indicates a lack of strong bullish sentiment in the market.
- Geopolitical Tensions: Concerns about potential escalation in the Middle East are emerging due to a possible Iranian retaliation following a suspected Israeli strike on its embassy in Syria. The ongoing conflict raises fears of disruptions to oil supply routes in the region, adding uncertainty to the oil market.
- US Oil Inventory Build: Official data from the Energy Information Administration revealed a significant increase in US oil inventories, with a build of 5.8 million barrels for the week ending April 5. This surplus in supply may further weigh on oil prices, as higher inventories typically indicate weaker demand or oversupply conditions.
- Upcoming Economic Data: Traders are awaiting the release of key economic indicators from the US, including the Weekly Initial Jobless Claims and the Producer Price Index (PPI). These data points will provide insights into the health of the US economy and could influence market sentiment and oil price movements.
| 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: In summary, WTI crude oil prices are facing resistance despite recent attempts to bounce back, geopolitical tensions in the Middle East pose risks to oil supply, and a significant increase in US oil inventories adds pressure to prices. Traders are closely monitoring economic data releases for further direction in the oil market.
DAX
- US CPI Report Impact: The US Consumer Price Index (CPI) Report released on Wednesday garnered investor attention as the US annual inflation rate accelerated to 3.5% in March, with core inflation remaining steady at 3.8%. This data initially led to investor angst, sending the DAX below 18,000 for the first time since March 20.
- DAX Rebound: Despite initial downward pressure, the DAX rebounded as investors shifted their focus to the upcoming European Central Bank (ECB) monetary policy decision. The index regained ground, reflecting investor resilience in the face of market volatility.
- ECB Monetary Policy Decision: The ECB is set to take center stage on Thursday, with economists expecting interest rates to remain unchanged at 4.5%. However, investor speculation has increased regarding a potential rate cut in June, raising questions about the ECB's timing compared to the Federal Reserve.
- US Producer Prices: Thursday will also see investor attention directed towards US producer prices, with higher-than-expected producer prices potentially influencing bets on a Federal Reserve rate cut in 2024.
- FOMC Member Chatter: Beyond economic data, investor focus will be on speeches from Federal Open Market Committee (FOMC) members, including Raphael Bostic, Susan Cook, and John Williams. Their insights on inflation and the timing of interest rate cuts could impact market sentiment and DAX movements.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: the DAX experienced initial volatility in response to the US CPI Report but rebounded as investor attention turned to the ECB monetary policy decision. Speculation regarding ECB rate cuts, US producer prices, and FOMC member speeches will continue to shape investor sentiment and influence DAX movements in the coming days. Investors will closely monitor these developments for potential impacts on the DAX index.