EURUSD
- Consolidation Above 1.0850: EUR/USD consolidates its weekly gains above the 1.0850 mark in the early European session on Friday.
- Impact on USD Index: The USD Index (DXY) has dropped to multi-week lows near 104.00, influenced by lower-than-expected US inflation figures measured by the Consumer Price Index (CPI).
- Fed Officials' Comments - Alberto Musalem: The Federal Reserve Bank of St. Louis President stated that the recent consumer price data indicates inflation is moving in the right direction.
- Mary Daly: The President of the San Francisco Federal Reserve Bank expressed relief over cooler inflation readings and anticipates further easing in price pressures and the labor market, justifying potential interest rate cuts.
- ECB Rate Cut Speculation: The European Central Bank (ECB) is considering further rate cuts beyond the summer, with market expectations leaning towards two additional cuts by the end of the year.
| SMA (20) | Slightly 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 remains supported above 1.0850 as weaker US inflation figures and dovish remarks from Fed officials weigh on the US Dollar. Additionally, market speculation about further ECB rate cuts could influence the pair's direction in the coming months.
GBPUSD
- Seesawing Near 1.2900: The GBP/USD pair fluctuates between slight gains and losses around the 1.2900 mark during the European session on Friday, staying close to the one-year peak reached the previous day.
- Lower US CPI Inflation: In June, US CPI inflation was lower than expected, with the annualized headline CPI dropping to 3.0% YoY from the previous 3.3%.
- US Initial Jobless Claims: For the week ending July 5, US Initial Jobless Claims decreased to 222K, down from the revised 239K of the prior week.
- Fed Rate Hike Expectations: The accelerated cooling of US CPI inflation has shifted market expectations, now suggesting the possibility of three quarter-point rate cuts from the Federal Reserve (Fed) in 2024.
- Focus on US PPI Data: With US CPI data released, attention turns to Friday’s US Producer Price Index (PPI) wholesale inflation print, which could impact rate-cut expectations.
| 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 hovers around 1.2900, influenced by softer US inflation data and declining jobless claims. Market speculation leans towards multiple Fed rate cuts in 2024, which supports the pair's upward trajectory. However, upcoming US PPI data could affect these expectations and potentially alter the pair's direction.
GOLD
- Testing $2,400 Threshold: Gold price is reversing to test the $2,400 level early Friday, pulling back slightly from a two-month high of $2,425 set on Thursday.
- Fed Rate Cut Expectations: A September interest rate cut by the US Federal Reserve (Fed) is almost certain following the softer-than-expected June US Consumer Price Index (CPI) data released on Thursday.
- Lower Core CPI Inflation: The annual core CPI inflation dropped to 3.3%, below the market consensus of 3.4%. On a monthly basis, the headline CPI fell by 0.1%, while core CPI rose by 0.1%.
- Japanese Yen Surge: The Japanese Yen surged significantly as the US CPI data gloom coincided with Japan’s forex market intervention, causing USD/JPY to drop over 300 pips within an hour.
- Upcoming Data: Traders will remain cautious ahead of the US Producer Price Index (PPI) inflation report and the preliminary Michigan Consumer Sentiment and Inflation Expectations, which could trigger fresh selling around the US Dollar.
Closing statement: Gold remains near the $2,400 level amid strong expectations of a Fed rate cut in September and recent US CPI data showing weaker inflation. However, upcoming PPI and consumer sentiment data could influence the US Dollar and, in turn, gold prices, potentially leading to further volatility.
CRUDE OIL
- Current Price: West Texas Intermediate (WTI) Oil trades around $83.10 per barrel during European hours on Friday.
- Fed Inflation Target: Federal Reserve Bank of Chicago President Austan Goolsbee stated on Thursday that the US economy appears to be on track to achieve 2% inflation.
- IEA Report on Demand: The International Energy Agency (IEA) noted in its monthly report that global oil demand in the second quarter increased by 710,000 barrels per day (bpd) year-on-year, the smallest quarterly rise in over a year.
- US Gasoline Demand: According to government data cited by Reuters, US gasoline demand hit 9.4 million bpd in the week ending July 5, the highest level for the Independence Day holiday week since 2019.
- Jet Fuel Demand: On a four-week average basis, jet fuel demand was at its strongest since January 2020. This robust fuel demand has led US refineries to ramp up activity and draw from crude oil stockpiles, thereby supporting prices.
| 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: WTI Oil prices remain firm around $83.10 per barrel, supported by robust US fuel demand and refinery activity. However, the modest rise in global oil demand as reported by the IEA could temper bullish sentiment. The market will continue to monitor US economic indicators and Federal Reserve comments for further direction.
DAX
- Inflation Rate: The German annual inflation rate decreased from 2.4% in May to 2.2% in June. Softer inflation trends could prompt the European Central Bank (ECB) to cut interest rates.
- ECB Rate Cut Expectations: A recent Reuters poll indicated that 80% of economists expect the ECB to cut deposit rates in September and December.
- Wholesale Price Index: Germany's June wholesale price index fell by 0.3% compared to a previous increase of 0.1% month-over-month, according to data from Destatis.
- Economic Growth Projection: In April, the International Monetary Fund (IMF) projected the German economy to expand by 0.2% in 2024. Weak growth could limit the ability of firms to pass costs on to buyers.
- US CPI Report: Thursday’s US Consumer Price Index (CPI) report drew investor interest amidst rising bets on a September Federal Reserve (Fed) rate cut.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX remains influenced by Germany's falling inflation and weak growth outlook, which support expectations for ECB rate cuts. Investor focus is also on the potential for a Fed rate cut in September following softer US inflation data. This combination of factors suggests a cautious yet potentially positive outlook for the DAX in the near term.