EURUSD
- The EUR/USD pair is currently trading in a narrow band around the range of 1.0695– 1.0755 during the early European session on Tuesday. This suggests a period of consolidation or indecision in the market.
- Traders are exercising caution and refraining from taking strong positions, likely due to the anticipation of key economic data releases. Such data releases can trigger significant volatility in the foreign exchange market.
- The Eurozone's GDP for the third quarter (Q3) is scheduled to be released in the European session on Tuesday. The market expects a contraction of 0.1% in the quarterly growth number, with an estimated expansion of 0.1% in the annual growth number. Positive economic data from the Eurozone could provide support to the Euro against the US Dollar.
- On the US front, the market is awaiting the release of the US Consumer Price Index (CPI) later in the day. CPI is a crucial economic indicator, and its results can significantly influence market sentiment, especially if the data deviates from expectations.
| SMA (20) | Slightly 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:In summary, the EUR/USD pair is currently in a consolidation phase, with traders exercising caution ahead of key economic data releases. The Eurozone GDP figures and the US CPI are expected to be the primary drivers of market movement. Positive Eurozone economic data could support the Euro against the US Dollar, while the US CPI figures will be closely watched for their impact on the overall market sentiment.
GBPUSD
- The GBP/USD pair has experienced upward movement, approaching the 1.2300 level during the early European morning on Tuesday. This indicates a positive sentiment or buying interest in the British Pound (GBP) against the US Dollar (USD).
- The Claimant Count Change for Britain was reported at 17.8K in September. This data point reflects changes in the number of people claiming unemployment-related benefits, providing insights into the labor market's health.
- The UK's Office for National Statistics (ONS) released data indicating that the ILO Unemployment Rate remained steady at 4.2% in the three months to September. Additionally, wage inflation, including bonuses, declined to 7.9% from the previous figure of 8.2%.
- There has been a notable political reshuffle in the UK, with Prime Minister Rishi Sunak making changes to the cabinet. Home Secretary Suella Braverman was sacked, and James Cleverly was appointed as the new Home Secretary, while former Prime Minister David Cameron was named the new Foreign Secretary.
- Despite hawkish comments from Federal Reserve (Fed) Chairman Jerome Powell last week, markets are still pricing in a more than 80% probability that the Fed will leave the policy rate unchanged in December. This suggests that market participants are not fully aligning with the hawkish sentiment expressed by Powell.
| SMA (20) | Slightly 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: The GBP/USD pair has shown positive movement, possibly influenced by UK labour market data and political developments. Market expectations regarding the Fed's policy rate in December, despite Powell's hawkish comments, are also noted as a factor.
GOLD
- Gold price is currently trading around $1,945, and there is an anticipation of key movements based on upcoming economic data, particularly the US Consumer Price Index (CPI).
- The immediate resistance level for gold is identified at $1,950, and the initial support level is expected to emerge at $1,935. These levels are crucial for traders and investors to gauge potential price movements.
- Policymakers globally continue to express hawkish sentiments, signaling a commitment to tighter monetary policies. This is aimed at tempering speculation about the end of the tightening cycle and the possibility of rate cuts in 2024.
- Inflation remains a significant concern, with policymakers noting that current inflation levels are above what is considered comfortable. There is a high risk of a further increase in price pressures.
- The labor markets are described as mostly tight. This condition does not favor the argument for the economy slowing enough to alleviate inflationary pressures.
- Investors are awaiting clearer clues from the United States as the country is scheduled to publish October inflation figures. This data, particularly the US Consumer Price Index (CPI), is expected to provide insights into the inflationary environment and could influence gold prices.
Closing statement: Gold prices are currently under the influence of global policymakers' hawkish stance and concerns about inflation. The upcoming US inflation figures are anticipated to be a crucial factor in determining the future direction of gold prices, with specific technical levels identified for reference.
CRUDE OIL
- Western Texas Intermediate (WTI), the US crude oil benchmark, is currently trading around $78.30. There has been a halt in the two-day winning streak as investors await the release of the US inflation data scheduled for later on Tuesday.
- Traders are closely monitoring the US Consumer Price Index (CPI) for October, as it is expected to provide hints about the trajectory of the Federal Reserve's monetary policy. Higher interest rates, which may result from the Fed's actions based on inflation data, can increase borrowing costs, potentially slowing the economy and diminishing oil demand.
- The OPEC (Organization of the Petroleum Exporting Countries) monthly report indicates that oil demand remains robust. OPEC revised up its 2023 forecast for global oil demand growth.
- The cartel also increased its demand forecast for the current year and maintained the outlook for 2024. The strong demand is attributed, in part, to China's robust economic activity following the easing of anti-COVID measures in 2023.
- Russia and Saudi Arabia, key oil exporters, have confirmed their commitment to maintaining voluntary oil output cuts until the end of 2023. This decision is influenced by concerns regarding economic growth and demand, factors that continue to exert pressure on crude oil markets.
| SMA (20) | Neutral | |
| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The recent dynamics in the crude oil market are influenced by the anticipation of US inflation data and its potential impact on the Federal Reserve's monetary policy. Additionally, the OPEC report signals strong global oil demand, with voluntary output cuts by major oil-producing countries aimed at supporting market stability amid economic growth and demand uncertainties.
DAX
- On Monday, there was a surge in demand for riskier assets, including equities, driven by hopes of improving relations between the United States and China. The anticipation centers around a meeting between US President Joe Biden and China Premier Xi Jinping scheduled for Wednesday at the Asian-Pacific Economic Cooperation Summit.
- The German auto sector experienced substantial gains amid the optimistic outlook for US-China relations. Notably, Volkswagen saw a rise of 1.35%, while BMW, Porsche, and Mercedes Benz Group also ended the session with positive momentum, gaining 1.01%, 0.80%, and 0.19%, respectively.
- There were no significant economic indicators for Germany or the Eurozone on Monday that could influence buyer demand in the equity market.
- On Tuesday, investor interest is expected to be focused on the release of Q3 GDP numbers for the Eurozone. Additionally, ZEW Economic Sentiment figures for both Germany and the Eurozone will be scrutinized. An improving economic outlook might serve as a cushion against potential downside.
- As GDP numbers take the spotlight, investors are advised to monitor commentary from the European Central Bank (ECB). ECB Chief Economist Philip Lane is scheduled to speak, and his remarks, particularly references to inflation and the outlook for interest rates, are likely to be closely considered by market participants.
| 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:In summary, the DAX's recent performance is influenced by geopolitical considerations, particularly the expectations around the US-China meeting, and positive developments in the German auto sector. As economic data, including GDP figures, and ECB commentary are on the agenda, they are expected to guide investor sentiment in the near term.