EURUSD
- EUR/USD Downtrend: The EUR/USD pair extends its losses for the second consecutive day, trading around 1.0730 during the Asian session on Friday.
- Technical Indicators: The 14-day Relative Strength Index (RSI) is positioned below the 50 level, indicating a bearish bias for the EUR/USD pair.
- Market Sentiment and FOMC Evaluation: Market participants are evaluating the recent FOMC meeting alongside rising expectations for an interest rate cut in December, as indicated by the Committee on Wednesday.
- Fed's Stance on Job Market: Chairman Jerome Powell emphasized during his press conference that the Fed does not intend to let the job market collapse as a strategy to reduce inflation.
- Upcoming Influences: Investors are looking for more cues from ECB President Christine Lagarde’s speech and the preliminary US Michigan Consumer Sentiment report for June.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: The EUR/USD pair is experiencing a continued downtrend, supported by technical indicators suggesting bearish momentum. Market sentiment is shaped by the recent FOMC meeting and rising expectations for a potential interest rate cut in December. Fed Chairman Powell's reassurance about not collapsing the job market to control inflation adds a layer of complexity. Investors are now turning their attention to upcoming statements from ECB President Christine Lagarde and the preliminary US Michigan Consumer Sentiment report for further direction.
GBPUSD
- GBP/USD Negative Bias: GBP/USD trades with a negative bias for the second straight day on Friday, managing to stay above the previous day's swing low.
- Fed Interest Rate Signal: The US Fed signaled it will cut its key interest rate just once by 25 basis points toward the end of 2024, despite easing inflation, according to the dot plot.
- US Producer Price Index: The US Producer Price Index (PPI) rose 2.2% YoY in May, slightly below the 2.3% increase in April (revised from 2.2%).
- Weekly Initial Jobless Claims: The weekly Initial Jobless Claims for the week ending June 6 increased by 242K from the previous week's reading of 229K, surpassing the market consensus of 225K.
- Upcoming Events: Later today, the preliminary US Michigan Consumer Sentiment report and a speech by Federal Reserve Bank of Chicago President Austan Goolsbee are due.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD continues to trade with a negative bias for the second consecutive day, holding above the previous day's swing low. The market remains cautious as the US Fed signals a single interest rate cut toward the end of 2024, despite easing inflation. Economic data such as the US PPI and higher-than-expected weekly jobless claims contribute to the current sentiment. Investors are looking ahead to the preliminary US Michigan Consumer Sentiment report and a speech by Fed Bank of Chicago President Austan Goolsbee for further direction.
GOLD
- Gold Price Consolidation: Gold price is trading near the $2,300 level in Asian trades on Friday, consolidating the previous decline, but remains on track to book the first weekly gain in four weeks.
- Fed Rate Cut Projections: The revised Summary of Economic Projections (dot-plot) indicated policymakers expect to cut rates only once in 2024, against the previous projection of three rate cuts in March forecasts and down from two rate cuts widely anticipated.
- Soft US PPI Data: The US Producer Price Index (PPI) for final demand unexpectedly dropped 0.2% last month after a 0.5% rise in April, but this data failed to deter US Dollar buyers.
- Upcoming Economic Data: Market attention now turns to the University of Michigan (UoM) preliminary Consumer Sentiment and Inflation Expectations data due later today for fresh cues on the Fed’s policy outlook and its impact on the US Dollar, which will eventually influence gold price action.
- Fed Policymakers' Speeches: Market participants will closely scrutinize speeches from Fed policymakers, as the end-of-the-week flows will likely remain in play and affect the gold price movement.
Closing statement: XAU/USD is stabilizing near the $2,300 level, poised to record its first weekly gain in four weeks despite recent declines. The revised Fed dot-plot now projects only one rate cut in 2024, down from earlier projections. Soft US PPI data hasn't deterred USD buyers, and upcoming data on US consumer sentiment and inflation expectations will be crucial for market direction. Additionally, speeches from Fed policymakers will be closely watched, potentially influencing gold price movements as the week concludes.
CRUDE OIL
- WTI Oil Price Movement: West Texas Intermediate (WTI) Oil price inches higher to near $77.80 per barrel during the Asian session on Friday.
- Optimistic Demand Forecasts: This rise in crude oil prices is mostly attributed to optimistic forecasts regarding crude demand for the remainder of the year.
- EIA Demand Growth Forecast: Earlier in the week, the EIA increased its 2024 world oil demand growth forecast to 1.10 million barrels per day (bpd) from the previous estimate of 900,000 bpd, as reported by Reuters.
- Russia's Production Exceeding Quotas: Russia's energy ministry announced on Thursday that its oil production in May surpassed the quotas agreed upon by the OPEC+ alliance.
- Corrective Measures for Overproduction: The Russian ministry acknowledged overproduction and stated that corrective measures would be implemented in June to achieve targeted production levels, according to Reuters.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: WTI crude oil prices have moved higher, nearing $77.80 per barrel, driven by optimistic demand forecasts for the rest of the year. The EIA's increased demand growth forecast to 1.10 million bpd for 2024 has bolstered market sentiment. Despite Russia's oil production exceeding OPEC+ quotas in May, the ministry's commitment to corrective measures in June aims to stabilize production levels. These factors collectively support the upward momentum in crude oil prices.
DAX
- German Wholesale Price Trends: German wholesale price trends signaled an improving demand environment. Wholesale prices declined 0.7% year-on-year in May after a fall of 1.8% in April. Furthermore, wholesale prices increased by 0.1% month-on-month after advancing by 0.4% in April.
- Eurozone Industrial Production: Industrial production numbers for the Eurozone had a limited impact on the DAX. Industrial production unexpectedly fell by 0.1% in April after an increase of 0.5% in March.
- Upcoming Trade Data: On Friday, trade data for the Eurozone will warrant investor attention. Economists forecast the trade surplus to narrow from €24.1 billion to €20.0 billion in April.
- ECB and Political Considerations: Beyond the numbers, ECB chatter, French politics, and updates from the EU Commission on China EV tariffs also need consideration.
- ECB Speakers: ECB President Christine Lagarde and Chief Economist Philip Lane are on the calendar to speak, as well as ECB Executive Board members Luis de Guindos and Isabel Schnabel.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: The DAX is influenced by several factors, including improving German wholesale price trends and mixed industrial production data from the Eurozone. Investors are closely watching the upcoming Eurozone trade data, with expectations of a narrowed trade surplus. Additionally, political developments in France and updates on China EV tariffs from the EU Commission are significant. ECB President Christine Lagarde and other key ECB members' speeches will also be pivotal in shaping market sentiment.