EURUSD
- EUR/USD rose by 0.38% to 1.0797 following the confirmation of German consumer prices at 6.1% on a yearly basis for May.
- Despite the decrease from the prior month's rate of 7.2%, this is unlikely to deter the European Central Bank from raising interest rates by 25 basis points on Thursday.
- The EUR/USD pair has been stabilizing around the 20-day Simple Moving Average near the 1.0750 zone, indicating a period of consolidation.
- Overall, the pair maintains a bullish bias, suggesting a positive outlook.
- In early European trade on Tuesday, the U.S. dollar retreated, supported by improved risk sentiment due to China's short-term lending rate cut. However, uncertainty looms ahead of the upcoming U.S. inflation data and the Federal Reserve policy meeting.
| SMA (20) | Slightly Falling |  | ||
| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The EUR/USD pair experienced a modest increase driven by German consumer prices, while market participants remain cautious ahead of key events, including the ECB's interest rate decision and the release of U.S. inflation data.
GBPUSD
- GBP/USD registered a 0.46% increase, reaching 1.2565, as Bank of England officials expressed the possibility of further interest rate hikes if inflation remains elevated.
- In a published column, Bank of England policymaker Jonathan Haskel emphasized the importance of addressing inflation risks and stated that additional interest rate increases cannot be ruled out.
- The DXY, which measures the dollar against six other currencies, experienced a 0.33% decline to 103.289, reaching levels last observed in mid-May.
- Market focus now shifts to the upcoming release of U.S. consumer prices, anticipated to indicate a slight cooling of inflation in May. This data could provide the Federal Reserve with room to potentially pause its aggressive rate-hike cycle when announcing its interest rate decision on Wednesday.
- Traders and investors await further developments in the GBP/USD pair, taking into account central bank comments and the outcome of U.S. consumer price data.
| SMA (20) | Neutral | |||
| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD showed an upward trend driven by remarks from Bank of England officials regarding potential future interest rate hikes. Attention now turns to the release of U.S. consumer prices, which could impact the Federal Reserve's decision-making process regarding interest rates.
GOLD
- Gold prices experienced a slight increase on Tuesday but remained within a narrow trading range as traders adopted a cautious stance ahead of significant U.S. inflation data and major central bank meetings scheduled for this week.
- Analysts anticipate a 4.1% year-on-year rise in U.S. consumer prices for May, indicating a slowdown compared to the 4.9% growth observed in April. Core prices, which exclude volatile food and energy components, are expected to rise 5.3% for the year, down from 5.5%.
- Despite the anticipated slowdown, inflation levels remain above the Federal Reserve's 2% annual target. With a robust U.S. labour market and the possibility of any unexpected hawkish surprises, investors maintained caution.
- Considering the projected global economic slowdown throughout the year, there is potential for renewed safe-haven demand for gold in the second half of 2023.
- Traders and investors closely monitor gold prices, paying attention to U.S. inflation data and central bank meetings, as these factors are expected to influence market sentiment and future trends in XAU/USD.
Closing statement: Gold prices showed a slight increase within a tight trading range as market participants awaited key U.S. inflation data and major central bank meetings. The outlook for gold remains influenced by inflation trends, global economic conditions, and safe-haven demand expectations for the second half of 2023.
CRUDE OIL
- Crude oil prices experienced a recovery on Tuesday, bouncing back from significant losses in the previous session. However, market sentiment remained cautious ahead of key U.S. inflation data and the conclusion of the Federal Reserve meeting.
- The anticipation of rising interest rates has been weighing on economic activity, which in turn has dampened oil and fuel demand. This sentiment has contributed to substantial sell-offs in crude oil markets this year.
- Even if the Federal Reserve decides to pause its rate hike cycle, it is expected that U.S. rates will remain elevated for an extended period in 2023, exerting pressure on economic activity. Additionally, the strength of the U.S. dollar, coupled with higher U.S. interest rates, is anticipated to negatively impact crude oil markets.
- Concerns over sluggish demand, deteriorating economic conditions, and the potential increase in oil supply driven by Iran have significantly offset the positive impact of Saudi Arabia's production cut, resulting in crude markets facing their worst loss in nearly two weeks.
- Market participants closely monitor crude oil prices, keeping a keen eye on U.S. inflation data, the Federal Reserve's decision, and the overall demand-supply dynamics, as these factors play a crucial role in shaping the future trajectory of crude oil markets.
| SMA (20) | Slightly Falling | |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Slightly Falling | |
Closing statement: Crude oil prices rebounded on Tuesday after facing substantial losses, although market participants remained cautious ahead of upcoming U.S. inflation data and the conclusion of the Federal Reserve meeting. Factors such as rising interest rates, economic conditions, dollar strength, and supply concerns continue to influence crude oil markets.
DAX
- European stock markets showed positive momentum on Tuesday, supported by China's rate cut and ahead of important U.S. inflation data and the commencement of the Federal Reserve's policy-setting meeting.
- The DAX index in Germany started the day with gains but later traded mostly flat. Meanwhile, the CAC 40 in France experienced a 0.56% increase, and the FTSE 100 in the U.K. traded without significant changes.
- China's central bank decision to cut a short-term lending rate aims to assist in the recovery of the country's economy after the challenges posed by the COVID-19 pandemic. China is a crucial regional growth driver and a major export market for many large European companies.
- This rate cut news has provided a boost to European equities as investors anticipate a flurry of economic data, including the German ZEW economic sentiment index, in preparation for the Federal Reserve's two-day policy-setting meeting.
- Market participants will closely monitor the economic indicators and the outcome of the Federal Reserve meeting, as they will have a significant impact on the direction and sentiment of European stock markets.
| SMA (20) | Neutral | |
| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: European stock markets traded higher on Tuesday, buoyed by China's rate cut and in anticipation of key economic data releases, including the German ZEW economic sentiment index. Investors are keenly focused on the outcome of the Federal Reserve's policy-setting meeting, which will provide further direction for the markets.