EURUSD
- Stabilization Above 1.0750: EUR/USD is looking to stabilize above 1.0750 in the European session on Tuesday.
- Support from US Dollar Pause: A pause in the US Dollar upsurge supports the pair as markets reassess the implications of Euro area political concerns.
- ECB Board Members' Caution: On Monday, ECB board members, including P. Kazimir, J. Nagel, and President C. Lagarde, urged caution in considering further interest rate cuts due to uncontrolled inflation and potential price pressures.
- Federal Reserve Outlook: The latest Nonfarm Payrolls numbers in May (+272K) hurt bets on anticipated interest rate hikes and now suggest the likelihood of such a move in November or December.
- Upcoming Economic Events: Looking ahead, the next big events for the pair will be the release of US inflation figures tracked by the CPI and the FOMC meeting, both due tomorrow.
| SMA (20) | Rising |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: EUR/USD is looking to stabilize above 1.0750 in the European session on Tuesday, supported by a pause in the US Dollar upsurge as markets reassess Euro area political concerns. On Monday, ECB board members, including P. Kazimir, J. Nagel, and President C. Lagarde, urged caution in considering further interest rate cuts due to uncontrolled inflation and potential price pressures. Regarding the Federal Reserve, the latest Nonfarm Payrolls numbers in May (+272K) hurt bets on anticipated interest rate hikes and now suggest the likelihood of such a move in November or December. Looking ahead, the next big events for the pair will be the release of US inflation figures tracked by the CPI and the FOMC meeting.
GBPUSD
- Holding Above 1.2700: GBP/USD retreats from session highs but manages to hold above 1.2700 in the European session on Tuesday.
- UK Employment Change: The data from the UK showed the Employment Change in the three months to April was -140,000, making it hard for the Pound Sterling to gather strength.
- UK Unemployment Rate: The United Kingdom’s (UK) ILO Unemployment Rate rose to 4.4% in the three months to April after reporting 4.3% in the previous period, data published by the Office for National Statistics (ONS) showed Tuesday.
- Jobless Benefits Claims: Additional details of the report showed that the number of people claiming jobless benefits rose by 50.4K in May.
- FedWatch Tool Insights: According to the CME FedWatch Tool, the probability of the Fed leaving the policy rate unchanged in September rose slightly above 50% after the May jobs report from 40% earlier in the week.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Rising |
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Closing statement: GBP/USD retreats from session highs but manages to hold above 1.2700 in the European session on Tuesday. The data from the UK showed the Employment Change in the three months to April was -140,000, making it hard for Pound Sterling to gather strength. Additionally, the United Kingdom’s (UK) ILO Unemployment Rate rose to 4.4% in the three months to April after reporting 4.3% in the previous period, data published by the Office for National Statistics (ONS) showed Tuesday. Further details of the report indicated that the number of people claiming jobless benefits rose by 50.4K in May. According to the CME FedWatch Tool, the probability of the Fed leaving the policy rate unchanged in September rose slightly above 50% after the May jobs report, up from 40% earlier in the week.
GOLD
- Gold Price Movement: Gold price is off the four-week troughs but trades with a modest downside bias early Tuesday, ranging around the $2,300 level.
- Political and Geopolitical Factors: Political uncertainty in Europe and geopolitical risks could limit deeper losses for gold.
- PBoC Activity: The People's Bank of China (PBoC) sharply reduced its buying activities in May, marking an end to its one-and-a-half-year-long buying spree and contributing to driving flows away from the gold price.
- US Nonfarm Payrolls Impact: The upbeat US Nonfarm Payrolls released on Friday fueled speculations that the Federal Reserve will keep rates higher for longer, acting as a key headwind for the non-yielding gold price.
- Awaiting US Inflation Figures and FOMC Decision: Traders might prefer to wait for this week's release of the latest US consumer inflation figures and the FOMC decision on Wednesday for cues about the timing when the Fed will begin cutting rates.
Closing statement: Gold price is off the four-week troughs but trades with a modest downside bias early Tuesday, battling the $2,300 level. Political uncertainty in Europe and geopolitical risks should limit deeper losses for gold. The People's Bank of China (PBoC) sharply reduced its buying activities in May, marking an end to its one-and-a-half-year-long buying spree and contributing to driving flows away from the gold price. The upbeat US Nonfarm Payrolls released on Friday fuelled speculations that the Federal Reserve will keep rates higher for longer, acting as a key headwind for the non-yielding gold price. Traders could prefer to wait for this week's release of the latest US consumer inflation figures and the FOMC decision on Wednesday for cues about the timing when the Fed will begin cutting rates.
CRUDE OIL
- Oil Price Movement: West Texas Intermediate (WTI) Oil price hovers around $77.70 per barrel during the Asian hours on Tuesday.
- Demand Expectations: Crude oil prices are bolstered by expectations of increased fuel demand this summer.
- Goldman Sachs Analysis: Goldman Sachs analysts indicated in a note that they anticipate strong summer transport demand will lead to a third-quarter oil market deficit of 1.3 million barrels per day (bpd).
- Federal Reserve's Stance: A strong US jobs report from the previous week has reinforced the Federal Reserve's hawkish stance on monetary policy. The Fed is expected to maintain higher borrowing costs for an extended period.
- OPEC+ Supply Concerns: Concerns over a potential oil supply surplus have increased as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) decided to gradually unwind voluntary cuts from eight member countries starting in October.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: West Texas Intermediate (WTI) Oil price hovers around $77.70 per barrel during the Asian hours on Tuesday. Crude oil prices are bolstered by expectations of increased fuel demand this summer. Goldman Sachs analysts indicated in a note that they anticipate strong summer transport demand will lead to a third-quarter Oil market deficit of 1.3 million barrels per day (bpd). However, a strong US jobs report from the previous week has reinforced the Federal Reserve's hawkish stance on monetary policy. The Fed is expected to maintain higher borrowing costs for an extended period. Additionally, concerns over a potential Oil supply surplus have increased as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) decided to gradually unwind voluntary cuts from eight member countries starting in October.
DAX
- Investor Sentiment: On Monday, investor hopes of a pickup in economic activity across the Eurozone waned. French President Emmanuel Macron responded to the European election results over the weekend, calling for a snap French General Election.
- Political Concerns: Concerns about a political shift to the far right impacted investor expectations of multiple 2024 ECB rate cuts. A change in the political landscape could force the ECB to hit the pause button on further interest rate cuts to assess the possible effects of a far-right victory in France.
- Lack of Economic Indicators: There were no economic indicators from Germany, the Eurozone, or the US to influence market risk sentiment.
- ECB Chief Economist Speech: ECB Chief Economist Philip Lane is on the calendar to speak today. After cutting interest rates on Thursday (June 6), investors should consider views on inflation, the economic outlook, and the ECB interest rate trajectory.
- Election Chatter: Investors should monitor French General Election chatter and possible influences on the ECB rate path.
| SMA (20) | Rising |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Falling |
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Closing statement: On Monday, investor hopes of a pickup in economic activity across the Eurozone waned. French President Emmanuel Macron responded to the European election results over the weekend, calling for a snap French General Election. Concerns about a political shift to the far right impacted investor expectations of multiple 2024 ECB rate cuts. A change in the political landscape could force the ECB to hit the pause button on further interest rate cuts to assess the possible effects of a far-right victory in France. There were no economic indicators from Germany, the Eurozone, or the US to influence market risk sentiment. ECB Chief Economist Philip Lane is on the calendar to speak today. After cutting interest rates on Thursday (June 6), investors should consider views on inflation, the economic outlook, and the ECB interest rate trajectory. Moreover, investors should monitor French General Election chatter and possible influences on the ECB rate path.