EURUSD
- EUR/USD rose to 1.0778 as the European Central Bank is expected to raise interest rates by 25 basis points in their upcoming meeting.
- Doubts remain about the extent of future rate hikes by the ECB due to falling euro area inflation and the recent recessionary data.
- The U.S. dollar traded largely unchanged, near multi-week lows, as traders were cautious ahead of the Federal Reserve's policy-setting meeting.
- Market participants were hesitant to push the dollar weaker, considering the potential impact of elevated U.S. consumer prices on market sentiment.
- The ECB's interest rate decision and the U.S. consumer price data will be closely monitored for their influence on EUR/USD.
| SMA (20) | 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: As the week progresses, market participants will closely monitor the ECB's interest rate decision and the Federal Reserve's meeting, as these events are expected to have a significant impact on the EUR/USD exchange rate. The market will be particularly attentive to any indications from the ECB regarding the extent of future rate hikes, and the U.S. consumer price data will be closely watched to gauge its influence on market sentiment and potential implications for the U.S. dollar.
GBPUSD
- GBP/USD ended the week on a positive note, recording significant gains against several G7 currencies.
- This morning, GBP/USD rose 0.1% to 1.2575, approaching resistance levels observed in May 2022 and 2023.
- The DXY, which tracks the dollar against a basket of currencies, traded mostly flat today following a decline of nearly 0.5% last week, marking its worst weekly performance since mid-April.
- The dollar weakened last week in response to a surge in Americans filing new unemployment claims, raising expectations of the Federal Reserve pausing its year-long rate hiking cycle.
- Market focus will be on the upcoming two-day meeting of Federal Reserve officials, with expectations that the Fed may hold off on further rate hikes.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD closed the week with gains, driven by the weakness in the U.S. dollar amid concerns over rising unemployment claims and the possibility of the Federal Reserve pausing its rate hike cycle. Traders will closely monitor the outcome of the Fed's meeting for further guidance on the direction of GBP/USD.
GOLD
- Gold prices saw a slight increase on Monday, remaining within a tight trading range observed over the past three weeks, as market participants exercised caution ahead of upcoming U.S. consumer inflation data and the Federal Reserve meeting.
- Over the past three weeks, gold prices have been confined to a trading range between approximately $1,930 and $1,980 per ounce, with limited signals for a breakout due to uncertainty surrounding the economy and monetary policy.
- Gold received some support last week from soft labour data, which raised expectations that the Federal Reserve may refrain from implementing a rate hike at the conclusion of its two-day meeting on Wednesday.
- The upcoming inflation data, scheduled for release on Tuesday, is expected to play a role in the Fed's decision-making process, considering the central bank's objective of managing inflation during this rate hike cycle. Although inflation remains below the nearly 40-year highs witnessed in 2022, it still exceeds the Fed's 2% annual target.
Closing statement: Gold prices remained range bound as market participants awaited crucial U.S. consumer inflation data and the Federal Reserve meeting. The uncertainty surrounding the economy and monetary policy has limited significant price movements for gold, while expectations of the Fed's decision on interest rates and its assessment of inflation dynamics continue to influence market sentiment. Traders will closely monitor these upcoming events for further clarity on the direction of XAU/USD.
CRUDE OIL
- Crude oil prices fell in Asian trade, with WTI dropping to $68 per barrel following Iran's openness to a deal with the West over its nuclear program, albeit with certain conditions.
- Ayatollah Ali Khamenei stated that a potential deal would require the preservation of Iran's nuclear infrastructure, contradicting recent denials of an imminent interim nuclear agreement.
- Weak economic indicators from major crude consumers, the United States and China, have been pressuring oil prices in recent weeks, heightening concerns of diminished crude demand due to sluggish economic conditions.
- Chinese fuel demand has struggled to recover to pre-COVID levels, despite the easing of most restrictive measures earlier this year, signalling a potential deceleration in the country's economic rebound.
- It is crucial to closely monitor the progress of nuclear discussions and economic conditions, as they will significantly impact crude oil prices and market dynamics.
| SMA (20) | Slightly Falling | |
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| RSI (14) | Falling | |
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| MACD (12, 26, 9) | Neutral |
Closing statement: In conclusion, crude oil prices faced downward pressure in Asian trade, driven by Iran's conditional openness to a nuclear deal, disappointing economic indicators from major consumers, and subdued fuel demand in China. Ongoing developments in the nuclear negotiations and economic recovery efforts will play a pivotal role in shaping future trends in the crude oil market.
DAX
- European equities cautiously rose as investors focused on upcoming monetary decisions from major central banks, including the Federal Reserve, European Central Bank, and Bank of Japan.
- The European Central Bank is expected to implement a 25-basis point rate hike at its next meeting, but concerns over disappointing growth, a gloomier economic outlook, and dropping inflation weaken arguments for further rate hikes.
- The DAX index in Germany showed a 0.93% increase, while the CAC 40 in France saw a rise of 0.85%, and the FTSE 100 in the UK traded 0.21% higher.
- The DAX 40 recently surpassed the late May high at 16,080, driven by a stronger performance on Wall Street.
- Limited major earnings or economic data are expected, with investor focus primarily on the upcoming central bank decisions.
