EURUSD
- Soft Trading: EUR/USD is trading with a softer tone around 1.0770 during Asian trading hours on Monday, reflecting a cautious market sentiment.
- Inflation Expectations: A notable increase in consumer inflation expectations has led to speculation that the Federal Reserve might delay rate hikes, potentially influencing the USD's strength against the Euro.
- Fed's Stance: Dallas Fed President Lorie Logan mentioned that there are upside risks to inflation, suggesting that it may be premature to consider interest rate cuts at this time.
- US CPI Data: The final reading of the US Consumer Price Index (CPI) for April, scheduled for Wednesday, will be closely monitored. Expectations point to a YoY increase of 3.4%, which could impact Fed policy decisions and, consequently, EUR/USD movement.
- ECB Rate Cut Expectations: Market anticipation for an ECB interest rate cut on June 6 persists, despite uncertainties surrounding the rate path beyond that date.
| SMA (20) | Slightly 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 maintains a cautious stance amid softer trading, driven by heightened inflation expectations influencing Fed rate hike projections. While Fed officials express concerns about inflation risks, upcoming US CPI data and expectations of an ECB rate cut on June 6 add further uncertainty to the currency pair's outlook. Traders should remain vigilant and monitor economic indicators and central bank communications for potential market shifts.
GBPUSD
- Upward Movement: GBP/USD edges higher, reaching near 1.2530 during the Asian session on Monday, possibly reflecting improved risk appetite in the market.
- Strong UK GDP Figures: The Pound Sterling received a boost from higher-than-expected UK Gross Domestic Product (GDP) figures released on Friday, contributing to the pair's upward momentum.
- BoE Rate Cut Speculation: BoE Governor Andrew Bailey indicated that a rate cut next month was a possibility, but he emphasized the need to wait for further data on inflation, activity, and the labor market before making a decision.
- Weakness in USD: The US Dollar encountered challenges following the release of the University of Michigan Consumer Sentiment Index, which dropped to a six-month low of 67.4 in May, falling short of market expectations.
- Fed's Stance: Minneapolis Fed President Neel Kashkari expressed a cautious stance, stating that he's in a "wait-and-see mode" and highlighting a "high" bar for concluding that higher rates are necessary to address inflation.
| SMA (20) | Slightly Falling |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Rising |
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Closing statement: GBP/USD demonstrates upward movement amid improved risk appetite and support from strong UK GDP figures. Speculation about a potential rate cut by the Bank of England adds uncertainty to the pair's outlook, while weakness in the US Dollar following disappointing consumer sentiment data contributes to its gains. Traders should closely monitor central bank communications and economic indicators for further insights into the direction of GBP/USD.
GOLD
- Loss of Momentum: Gold price loses its recovery momentum during the Asian session on Monday, signaling a pause or reversal in its recent upward movement.
- Impact of Fed Remarks: Hawkish remarks from the Federal Reserve and speculation that the Fed might delay its easing plans have strengthened the US Dollar (USD) and pressured the USD-denominated gold lower.
- Geopolitical Concerns: Renewed geopolitical concerns provide some support to gold's value on the market, potentially offsetting downward pressure from other factors.
- Fed Speeches: Gold traders are monitoring speeches from Fed officials Jefferson and Mester on Monday, as their remarks could offer insights into the central bank's policy stance.
- Economic Data Ahead: Traders will focus on key US economic data releases later in the week, including the Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Sales reports. Stronger-than-expected data may reduce expectations for a Fed rate cut, potentially leading to selling pressure on XAU/USD.
Closing statement: Gold price faces a loss of recovery momentum amid hawkish Fed remarks and speculation about delayed easing plans, which strengthen the US Dollar. However, renewed geopolitical concerns offer some support to gold's value. Traders are closely monitoring Fed speeches and upcoming US economic data releases for further direction on XAU/USD, with stronger-than-expected data potentially dampening hopes for a Fed rate cut and exerting selling pressure on the pair.
CRUDE OIL
- Mild Losses: Crude oil prices experienced mild losses from the prior week, partly attributed to weak readings on US consumer confidence, which may dampen demand outlook.
- Production Cut Speculation: Recent losses in crude were limited by speculation surrounding sustained production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies, potentially extending beyond an end-June deadline.
- Chinese Inflation Data: Chinese inflation data for April indicated a sustained recovery in consumer price index (CPI) inflation due to constant monetary support from Beijing, supporting consumer spending.
- Weak Business Activity: However, Chinese producer price index (PPI) inflation continued to shrink for a 19th consecutive month, signaling ongoing weakness in factory and business activity in the world's largest crude importer.
- Flat Oil Imports: China's oil imports in April slightly decreased from the prior month and remained largely flat compared to the same period last year, reflecting a sluggish post-COVID economic recovery in the country.
| 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: Crude oil prices saw mild losses amid concerns about weak US consumer confidence, although speculation surrounding sustained production cuts by OPEC+ limited the extent of the decline. Chinese inflation data showed a mixed picture, with a recovery in consumer price index inflation but continued weakness in producer price index inflation, reflecting sluggish business activity. Flat oil imports in China further underscored the challenges facing the world's largest crude importer amid a slow post-COVID economic recovery.
DAX
- ECB Meeting Minutes: The ECB monetary policy meeting minutes released on Friday confirmed investor expectations of a June interest rate cut, boosting demand for DAX-listed stocks.
- Impact of Inflation Expectations: Later in the Friday session, Michigan Inflation Expectation numbers and hawkish Fed commentary led to a pullback from the intraday high, affecting market sentiment.
- Continued Focus on ECB Commentary: On Monday, investors remain focused on ECB commentary, particularly regarding forward guidance beyond June. ECB Executive Board members Piero Cipollone and Claudia Buch are scheduled to speak, potentially influencing market sentiment.
- Potential for Interest Rate Cuts: Support for multiple ECB interest rate cuts could drive further demand for DAX-listed stocks, depending on the tone of the commentary from ECB officials.
- Impact of Chinese Economic Data: Economic data from China released over the weekend, particularly consumer prices signaling an improving demand environment, will likely set the tone for the Monday session, potentially impacting investor sentiment globally.
| 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 saw fluctuations driven by ECB meeting minutes confirming expectations of a June interest rate cut, followed by a pullback influenced by inflation expectations and hawkish Fed commentary. Investor focus remains on ECB commentary and forward guidance, with potential interest rate cuts viewed as drivers for buyer demand. Additionally, Chinese economic data will play a crucial role in setting the tone for the Monday session, particularly regarding consumer prices and demand trends.