EURUSD
- Current Movement: EUR/USD is on a gradual ascent toward 1.0870 in the European session on Thursday.
- Technical Analysis: The recent breakout through the 1.0800 confluence hurdle, which includes the 50-day, 100-day, and 200-day Simple Moving Averages (SMAs), favors bullish traders.
- US Dollar Pressure: Growing acceptance that the Federal Reserve (Fed) will start cutting interest rates in September keeps the US Dollar (USD) bulls on the defensive, lending support to the EUR/USD pair.
- ECB Insights: ECB governing council member Fabio Panetta stated on Tuesday that the ECB can continue to lower interest rates, noting that wage growth, a central driver of inflation, was “not warranted.”
- Market Bets: Traders are increasing their bets on an ECB rate cut this year, which might cap the cross’s upside in the near term.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: EUR/USD is showing a bullish trend with technical indicators supporting further gains. However, the prospect of ECB rate cuts and ongoing speculation about the Fed's monetary policy are key factors that could influence the pair's movement. While the current sentiment favours an upward trajectory, the potential for ECB action may limit significant gains in the near term.
GBPUSD
- Current Movement: GBP/USD extends gains toward 1.2900 in European trading on Thursday, staying firm amid sustained US Dollar weakness.
- UK Economic Growth: The UK economy grew more than expected in May after stagnating in April, with the GDP expanding at 0.4% MoM.
- BoE Rate Decision Uncertainty: The uncertainty surrounding the Bank of England's (BoE) decision to begin lowering its borrowing costs from the August meeting has risen.
- BoE Policymakers' Stance: Catherine Mann signals caution on rate cuts, warning of a potential resurgence in UK inflation and rapid increases in service prices.
- Jonathan Haskell: Expressed reluctance to cut interest rates, citing persistent inflationary pressures in the job market and uncertainty about how quickly these pressures will subside.
| 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: GBP/USD is displaying strength, buoyed by a weaker US Dollar and robust UK economic data. However, uncertainty regarding the Bank of England's interest rate decisions and concerns over inflationary pressures could influence the pair's future direction. While the short-term outlook remains positive, market participants should monitor upcoming BoE policy signals and economic data closely.
GOLD
- Current Movement: Gold rises as Federal Reserve (Fed) Chairman Jerome Powell sets a cautiously optimistic tone on his second day of testimony to lawmakers in Washington.
- Powell’s Testimony: During his second day of testimony to US lawmakers, Powell balanced cautious optimism about inflation coming down with minimal job losses—a "soft-landing"—while maintaining a data-dependent and vigilant approach to inflation.
- Impact on Gold: Powell's comments supported gold prices, as expectations of falling interest rates enhance Gold's attractiveness by reducing the opportunity cost of holding it.
- Central Bank Activity: Emerging data shows central banks globally are continuing to accumulate gold - Bank of India purchased nine tons of gold in June, National Bank of Poland acquired four tons of gold and Czech National Bank added two tons of gold to its reserves, as reported by TD Securities.
Closing statement: Gold (XAU/USD) is benefiting from dovish signals from the Federal Reserve and sustained central bank demand. As expectations grow for potential interest rate cuts, gold's appeal is likely to remain strong. Investors should continue to monitor central bank actions and upcoming Fed statements for further direction.
CRUDE OIL
- Current Movement: West Texas Intermediate (WTI) US crude oil prices are building on their overnight recovery, rising from around the $80.00 mark, a two-week low.
- OPEC Forecast: The Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for relatively strong growth in global oil demand for both this year and next.
- EIA Inventory Report: The US Energy Information Administration (EIA) reported a significant drop in crude inventories by 3.4 million barrels to 445.1 million barrels for the week ended July 5, far exceeding analysts' expectations.
- Fed Chairman's Testimony: Federal Reserve (Fed) Chair Jerome Powell, during his Congressional testimony, stated that the US is on a path to stable prices and continued low unemployment.
- Middle East Supply Concerns: Ongoing conflicts in the Middle East continue to raise concerns about supply disruptions, providing additional support to oil prices.
| 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: Crude oil (WTI) is gaining support from optimistic OPEC demand forecasts, substantial declines in US crude inventories, and geopolitical supply concerns. Combined with stable economic outlooks from the Fed, these factors suggest a potential upward trend in the near term. Investors should monitor further inventory data and geopolitical developments for continued guidance.
DAX
- Auto Stocks Performance: Auto stocks led gains on Wednesday, with BMW rallying 2.05% on strong first-half sales, Mercedes Benz Group gaining 1.27%, and Porsche advancing by 0.23%.
- Economic Indicators: There were no new economic indicators released from Germany or the Euro area on Wednesday.
- Germany's Inflation Rate: The inflation rate in Germany, measured by the consumer price index (CPI), rose by 2.2% in June 2024 compared to the same month last year.
- Fed Chair's Testimony: Fed Chair Jerome Powell reiterated on Wednesday that the US economy is progressing towards the Fed’s 2% inflation target. He also noted a cooling labor market, which has fueled speculation about a potential Fed rate cut in September.
- Upcoming US CPI Report: On Thursday, the US CPI Report could influence investor expectations regarding a September Fed rate cut. Economists forecast US core inflation to hold at 3.4% in June, with the annual inflation rate expected to decrease from 3.3% in May to 3.1% in June.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The DAX shows strength, particularly in auto stocks, amid stable inflation in Germany and positive signals from the US regarding a potential rate cut. Investors should keep an eye on the upcoming US CPI report, which could further impact market sentiment and expectations for future Fed policies.