EURUSD
- Current Trading: EUR/USD is trading sideways, hovering above the 1.0900 level in the early European session on Monday.
- Geopolitical Tensions: The Euro (EUR), being a risk-sensitive currency, could face challenges due to escalating geopolitical tensions in the Middle East.
- Upcoming US Data: On the US Dollar (USD) front, market participants are eyeing US producer inflation data set to be released on Tuesday, followed by consumer inflation figures on Wednesday. Traders are particularly looking for confirmation that inflation remains stable.
- Fed Interest Rate Expectations: Expectations for a potential interest rate cut by the Federal Reserve (Fed) in September could exert downward pressure on the USD, potentially providing support for the EUR/USD pair.
- Eurozone GDP Data: Traders are also awaiting the release of preliminary Gross Domestic Product (GDP) data for the Eurozone's second quarter on Wednesday, which could further influence the pair’s movement.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: EUR/USD remains relatively stable above 1.0900 but faces potential volatility from geopolitical tensions and upcoming US inflation data. Market expectations for a Fed rate cut in September could provide some support for the Euro, while Eurozone GDP figures may offer further directional cues later in the week.
GBPUSD
- Current Trading: GBP/USD is trading with modest gains, holding above the 1.2750 level during the European session on Monday.
- Geopolitical Concerns: Despite the gains, further upside remains limited as traders are closely monitoring updates on the escalating geopolitical tensions in the Middle East.
- Fed Insights: On Sunday, Federal Reserve Governor Michelle Bowman highlighted ongoing strength in the US labor market and expressed concerns about upside risks to inflation.
- BoE Insights: Meanwhile, Bank of England (BoE) policymaker Catherine Mann, in a podcast with the Financial Times, emphasized that UK wage growth remains a significant concern for inflation.
- Key Data Releases: The market is anticipating the release of monthly UK employment data and the US Producer Price Index (PPI) on Tuesday. This will be followed by crucial UK and US consumer inflation figures on Wednesday, which could significantly influence the pair's direction.
| SMA (20) | Slightly Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: GBP/USD shows modest gains above 1.2750, but the potential for further upside appears limited due to ongoing geopolitical concerns and caution ahead of key economic data. Traders will closely watch the upcoming UK and US inflation data for cues on the pair's next move.
GOLD
- Current Trading: Gold price (XAU/USD) attracts dip-buying near the $2,424 region on Monday, aiming to build on last week’s rebound from the 50-day Simple Moving Average (SMA) support.
- Geopolitical Influence: Tensions rise as Israel's Defense Minister Yoav Gallant warned the US of Iran's potential military preparations for a significant strike on Israel, which could provide support to gold prices due to its safe-haven appeal.
- Fed Speculation: The downside for gold might be limited by the increased expectations that the US Federal Reserve could lower interest rates by 50 basis points in September.
- Bowman’s statement: This expectation is tempered by Fed Governor Michelle Bowman’s caution during her Saturday speech, where she acknowledged progress on inflation but noted it remains above the Fed's 2% target.
- Market Sentiment: Investors are in a wait-and-see mode, hesitant to take strong positions ahead of Wednesday's crucial US Consumer Price Index (CPI) data, which could be a major determinant of gold’s next directional move.
Closing statement: Gold prices are stabilizing near $2,424, supported by geopolitical tensions and speculation of potential Fed rate cuts. However, the market remains cautious, with traders likely waiting for the upcoming US CPI data on Wednesday before committing to a decisive direction.
CRUDE OIL
- Current Trading: West Texas Intermediate (WTI) Oil prices are hovering around $77.20 per barrel during the Asian session on Monday.
- Geopolitical Influence: Tensions in the Middle East are influencing the market, with Israel preparing for a potential retaliatory strike by Iran following the assassination of Hamas leader Ismail Haniyeh in Tehran. This has led to heightened concerns about supply disruptions, supporting higher oil prices.
- Economic Data: Positive economic indicators from China and the United States also buoyed oil prices. China's Consumer Price Index (CPI) rose 0.5% year-on-year in July, exceeding expectations and signaling potential stronger demand in the world's largest oil importer.
- Fed Rate Cut Speculation: Expectations for a potential interest rate cut by the US Federal Reserve in September could support oil demand, as lower borrowing costs might stimulate economic activity in the US, driving up oil consumption.
- US Production Forecast: The US Department of Energy has revised its crude oil production forecast slightly downward for this year and next, with production from September onwards expected to be lower than previously anticipated, likely due to lower oil prices.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling |
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Closing statement: WTI oil prices remain elevated at $77.20, supported by Middle East tensions and robust economic data from China and the US. Market participants will continue to monitor geopolitical developments and potential Fed actions as key drivers for oil prices in the coming days.
DAX
- Market Movers: On Friday, Rheinmetall AG led the DAX, surging by 5.24% on the back of record orders, higher profits, and a positive outlook. In contrast, Daimler Truck Holding and Mercedes Benz Group saw modest declines of 0.42% and 0.40%, respectively.
- Inflation Trends: Germany’s annual inflation rate edged up from 2.2% in June to 2.3% in July, challenging investor expectations of multiple ECB rate cuts in 2024. The rise was driven primarily by services inflation, a key focus area for the European Central Bank (ECB).
- Wholesale Price Index: Germany's wholesale prices decreased by 0.1% year-on-year in July 2024, a slower decline compared to the 0.6% drop observed in June. The moderation in wholesale prices suggests a slight easing in overall price pressures.
- Expert Commentary: Ruth Brand, President of the Federal Statistical Office (Destatis), noted that while energy price declines are tempering the overall inflation rate, services continue to see above-average price increases, keeping upward pressure on inflation.
- Upcoming Earnings: Porsche is scheduled to release its earnings results on Monday. The report could influence the broader auto sector, particularly as the US session unfolds.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling |
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Closing statement: The DAX showed mixed performance, buoyed by Rheinmetall’s strong gains but weighed down by auto sector losses. As inflation in Germany inches higher, investor attention will likely focus on ECB policy signals and upcoming earnings reports, particularly from key players like Porsche.