EURUSD
- Narrow Range for EUR/USD: EUR/USD is trading within a narrow range above 1.0900 in the European morning on Wednesday. The currency pair's movement is influenced by various factors affecting the US Dollar.
- USD Index Uptick: The USD Index (DXY) experienced a notable uptick, retesting the 103.20 region. This movement in the US Dollar is a response to higher-than-expected US inflation figures measured by the Consumer Price Index (CPI).
- Dollar's Recovery Factors: The Dollar's recovery is further supported by another positive session of US yields across various maturity periods. This upward movement in yields is mirrored by German 10-year bund yields, which advanced to the boundaries of 2.35%.
- Fundamental Dynamics: The market is currently witnessing a contrast between the comparatively sluggish fundamentals of the euro area and the resilient US economy. This contrast is contributing to the expectation of a stronger Dollar in the medium term.
- Central Bank Actions: Both the European Central Bank (ECB) and the Federal Reserve (Fed) are expected to potentially initiate their easing programs nearly simultaneously. The anticipation of central bank actions is a crucial factor shaping the currency dynamics.
| 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: EUR/USD is influenced by the interplay of factors such as the US Dollar's reaction to inflation data, yield movements in both the US and Germany, and the broader economic fundamentals of the euro area and the US. The expectation of central bank easing programs adds an additional layer of complexity to the currency pair's dynamics.
GBPUSD
- Modestly Flat Trading: GBP/USD is experiencing modestly flat trading conditions near 1.2800 in early Europe on Wednesday. This follows a rebound from the weekly low, indicating a period of consolidation for the currency pair.
- US Dollar Index Consolidation: The US Dollar Index (DXY), measuring the value of the Greenback against six major currencies, is consolidating in a tight range just below 103.00. The movement of the DXY is a crucial factor influencing GBP/USD dynamics.
- UK GDP Growth: The UK Gross Domestic Product (GDP) grew by 0.2% in January compared to the previous month. This growth comes after the UK reported a technical recession in the second half of 2023. Economic growth data has a significant impact on currency movements.
- Manufacturing Production: The monthly Manufacturing Production in the UK remained stagnant in January, aligning with expectations. This is a decrease from the 0.8% growth observed in December. Manufacturing data provides insights into the health of the industrial sector.
- BoE Interest Rate Expectations: There are rising expectations for the Bank of England (BoE) to consider interest rate cuts starting from August. This shift in expectations is attributed to cooling conditions in the labor market and easing inflation expectations.
| 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: GBP/USD is currently in a consolidation phase, with movements influenced by the US Dollar's behaviour, UK economic data (GDP and Manufacturing Production), and evolving expectations regarding the Bank of England's interest rate decisions. The prospect of interest rate cuts adds a layer of anticipation to the currency pair's dynamics.
GOLD
- Mild Positive Bias: Gold prices are exhibiting a mild positive bias during the first half of the European session on Tuesday. However, this positive momentum lacks strong follow-through, and gold remains in proximity to the weekly low, approximately around the $2,150 mark reached in the previous session.
- Technical Considerations: The Relative Strength Index (RSI) on the daily chart indicates overbought conditions. A clear break below this level could trigger technical selling, potentially pulling gold prices towards the next significant support near the $2,128 zone.
- Uncertainty Over Fed's Rate-Cut Path: The uncertainty surrounding the Federal Reserve's (Fed) approach to interest rate cuts is a crucial factor influencing gold traders. This uncertainty is likely affecting the willingness of traders to establish new directional positions in the gold market.
- US Consumer Inflation Data: The release of warmer-than-expected US consumer inflation data on Tuesday has fueled speculation. There are indications that the Fed might adhere to a "higher for longer" narrative in the near term, affecting market sentiment around gold.
- Cautious Trading Ahead of FOMC Meeting: Traders appear to be exercising caution and may prefer to stay on the sidelines in anticipation of the highly anticipated two-day Federal Open Market Committee (FOMC) meeting scheduled to commence next Tuesday.
Closing statement: Gold is experiencing a mild positive bias, but traders are cautious due to uncertainties related to the Fed's stance on interest rate cuts. Technical considerations, along with recent economic data, are influencing the precious metal's price movements. The upcoming FOMC meeting is expected to be a focal point for market participants.
CRUDE OIL
- Trading Range and Price Level: Crude oil is currently trading within the broader range established in the previous day's session. It manages to maintain its position above $78, indicating a level of stability in recent price movements.
- API Inventory Data: The American Petroleum Institute (API) released data on Tuesday revealing a notable reduction in US inventories. The report showed a shrinkage of 5.5 million barrels during the week ending March 8. This reduction in inventories has likely contributed to the current stability in crude oil prices.
- OPEC's Demand Forecast: The Organization of Petroleum Exporting Countries (OPEC) has maintained its forecast, stating that global oil demand is expected to increase by 2.25 million barrels per day in 2024. This positive demand outlook, coupled with potential supply shocks from conflicts in the Middle East, is acting as a supportive factor for crude oil prices.
- Upcoming US Inventory Data: Market participants are now awaiting the release of official US inventory data scheduled for later Wednesday. This data, along with the dynamics of the US Dollar, is anticipated to provide additional impetus to crude oil prices.
| SMA (20) | 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: Crude oil is currently navigating within the trading range established in the previous session, holding above $78. Positive cues from the API inventory data and OPEC's demand forecast contribute to the current stability. The upcoming release of official US inventory data is expected to play a role in shaping crude oil price dynamics, alongside movements in the US Dollar.
DAX
- Inflation Numbers Impact: Finalized inflation numbers from Germany on Tuesday drew attention from investors. The German annual inflation rate saw a decrease from 2.9% to 2.5% in February. These figures aligned with preliminary estimates, reinforcing expectations for a potential rate cut by the European Central Bank (ECB) in June.
- ECB Commentary Influence: ECB commentary played a significant role, with Francois Villeroy de Galhau expressing support for a June rate cut. The Governor of the Bank of France emphasized the risks of delaying interest rate cuts, providing support for DAX-listed stocks. This alignment with potential monetary policy easing positively influenced the market.
- US CPI Report Impact: Despite a hotter-than-expected US Consumer Price Index (CPI) Report on Tuesday, which showed an increase in the annual inflation rate from 3.1% to 3.2%, with the core inflation rate easing from 3.9% to 3.8%, the impact on riskier assets, including DAX-listed stocks, was limited.
- Upcoming Eurozone Industrial Production: Wednesday's focus will shift to industrial production numbers for the Eurozone. Economists forecast a decline of 2.6% in January following a 2.6% rise in December. This data will be closely watched for its potential impact on market sentiment and DAX performance.
- ECB Chatter Continues: Beyond economic indicators, ongoing ECB chatter remains crucial. ECB Executive Board members Kerstin af Jochnick and Piero Cipollone are scheduled to speak. Any indications of support for an ECB interest rate cut in June could further influence investor sentiment and appetite for DAX-listed stocks.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX is influenced by a mix of economic indicators and central bank commentary. Inflation figures from Germany, ECB commentary, and the recent US CPI Report are factors affecting market sentiment. With a focus on Eurozone industrial production and continued ECB chatter, the DAX's performance will likely be influenced by both domestic and international economic developments.