EURUSD
- EUR/USD experienced a 0.1% increase, reaching 1.1012 and marking a two-month peak, following a rise in German inflation for June. The inflation rate climbed to 6.4% from the previous month's 6.1%, interrupting the downward trend observed since the beginning of the year.
- While inflation rates have been declining in several European countries, with Spain even falling below the European Central Bank's 2% target, it remains a persistent issue in Germany.
- The U.S. dollar weakened and reached a two-month low during early European trading hours on Tuesday, as market expectations grew that the U.S. Federal Reserve is approaching the end of its tightening cycle.
- The anticipated 25 basis points interest rate hike later this month is already largely factored into the market, shifting the focus to Wednesday's release of the consumer price index for June. Analysts expect the index to reflect the slowest annual increase since March 2021.
| SMA (20) | Rising |
|
| |
| RSI (14) | Neutral | |||
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: EUR/USD witnessed a modest increase, reaching a two-month peak, fueled by rising German inflation figures. Although inflation remains a concern in Germany, it has been declining in several European countries. Meanwhile, the U.S. dollar faced weakness as market sentiment leaned towards the view that the U.S. Federal Reserve is approaching the end of its tightening cycle. Traders are now eagerly awaiting the consumer price index release for June, which is expected to reveal a slower annual increase. The upcoming data will likely have a significant impact on the future direction of the EUR/USD exchange rate.
GBPUSD
- GBP/USD experienced a significant rise of 0.24% to reach 1.2892, fueled by strong U.K. employment data. The latest report revealed a record 7.3% increase in average earnings for June, adding pressure on the Bank of England to continue its interest rate tightening measures, especially with U.K. inflation already at high levels within the G7 nations.
- Unexpectedly, the U.K. unemployment rate rose to 4.0% in May, indicating some signs of loosening in the labor market.
- Sterling reached a fresh 15-month high, approaching overbought levels on the daily graph, suggesting a strong bullish sentiment.
- The DXY, which tracks the U.S. dollar against a basket of other major currencies, traded 0.2% lower at 101.405, reaching levels last observed in mid-May.
| SMA (20) | Rising |
|
|
|
| RSI (14) | Slightly Rising |
|
||
| MACD (12, 26, 9) | Slightly Rising |
|
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
- Gold prices remained relatively unchanged in Asian trade on Tuesday, with investors eagerly awaiting additional signals on U.S. monetary policy and inflation. Meanwhile, copper saw a slight increase as market participants anticipated increased government spending in China, a major importer.
- The U.S. dollar has weakened following comments from several Federal Reserve officials on Monday, suggesting that while the central bank may still need to raise interest rates to address persistently high inflation, the end of its current tightening cycle is approaching.
- A robust inflation reading could lead to expectations of another rate hike later in the year, bolstering the dollar further. However, signs are emerging that the Fed's more than year-long streak of interest rate increases is drawing to a close.
- Gold traders are closely monitoring the forthcoming U.S. consumer price index inflation data, scheduled for release on Wednesday, to assess the extent of inflation easing throughout June.
Closing statement: Gold prices held steady in Asian trade as investors awaited further insights into U.S. monetary policy and inflation trends. The U.S. dollar has weakened as Federal Reserve officials suggest the conclusion of the current tightening cycle is nearing, despite the need for potential future rate hikes. Market participants are eagerly anticipating the upcoming U.S. consumer price index inflation data to better gauge the trajectory of inflation and its impact on gold prices.
CRUDE OIL
- Crude oil prices ticked higher on Tuesday, buoyed by supply cuts implemented by major oil exporters and optimistic expectations for increased demand in developing nations during the latter half of 2023.
- The forthcoming supply cuts by Saudi Arabia and Russia, set to take effect in August, provided support to benchmark prices. Additionally, the decline of the U.S. dollar to a two-month low contributed to the positive sentiment in the oil market.
- The International Energy Agency (IEA) remains steadfast in its belief that oil demand from China and other developing countries, coupled with recently announced supply reductions, will maintain a tight market in the second half of the year, despite a sluggish global economy.
- Weak inflation data from China, which indicated a potential contraction in consumer inflation, initially exerted pressure on oil markets. However, this reading raised hopes for additional emergency spending measures from Beijing aimed at bolstering the economy.
| SMA (20) | Slightly Rising |
|
|
| RSI (14) | Slightly Rising |
|
|
| MACD (12, 26, 9) | Rising |
|
|
Closing statement: Crude oil prices saw a modest uptick as supply cuts by major oil exporters, combined with expectations of heightened demand from developing countries, provided support to the market. The decline of the U.S. dollar and the International Energy Agency's optimistic outlook for oil demand in the second half of 2023 further contributed to the positive sentiment. However, weak inflation readings from China initially posed challenges, although they also raised hopes for additional economic stimulus measures.
DAX
- Germany stocks closed higher on Monday, driven by gains in the Food & Beverages, Technology, and Industrials sectors, which contributed to the overall positive performance of shares.
- European stock markets showed mostly upward movement on Tuesday, taking cues from the gains observed in Wall Street and Asian markets overnight.
- The DAX index in Germany experienced relatively stable trading, while the CAC 40 in France recorded a 0.48% increase. Conversely, the FTSE 100 in the U.K. saw a slight decline of 0.13%.
- German consumer price index (CPI) rose by 0.3% on a monthly basis in June, resulting in a year-on-year increase of 6.4%. This uptick in CPI marks a rise from the 6.1% growth observed in the previous month.
| SMA (20) | Slightly Falling |  | |
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Falling | |
|
Closing statement: Germany's DAX index exhibited a positive trend as gains in the Food & Beverages, Technology, and Industrials sectors propelled the market higher. European stock markets followed a similar trajectory, taking cues from the positive performance of global markets. Additionally, the rise in German CPI indicates an upward price pressure, potentially impacting market dynamics in the region.