EURUSD
- Loss of Momentum Below 1.0900: The EUR/USD pair experienced a loss of momentum, trading below the key psychological level of 1.0900 during the early European session on Friday. This indicates a weakening stance for the euro against the US dollar.
- Impact of US Economic Data: Higher US Producer Prices, combined with indications of a persistently tight labor market as reflected in the weekly Initial Claims data, have bolstered the US dollar. Additionally, smaller-than-expected Retail Sales figures for February suggest a cooling down of consumer spending, further strengthening the case for a Federal Reserve rate cut in the summer.
- ECB Commentary Influence: Comments from European Central Bank (ECB) board members have also influenced market sentiment. Board member Knot expressed support for an initial rate cut in June, followed by additional cuts in September and December. However, there was no news from his colleagues Muller and Lane, with Muller indicating the need for more information before considering rate cuts, and Lane emphasizing the importance of avoiding calendar guidance.
- Divergent Views within the ECB: There appears to be a divergence of views within the ECB, with some members advocating for rate cuts sooner rather than later. Member Stournaras, for example, has advocated for two rate cuts prior to the summer recess, reflecting a more hawkish perspective compared to other members.
| 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: The EUR/USD pair is facing downward pressure, influenced by stronger economic data from the US and divergent views within the ECB regarding the timing and extent of potential rate cuts. As investors assess incoming data and central bank commentary, the EUR/USD pair may continue to experience volatility in the near term.
GBPUSD
- Trading Below 1.2750: GBP/USD is currently trading below the 1.2750 level, hovering around one-week lows during the early European session on Friday. This indicates a bearish sentiment for the pound against the US dollar.
- Fading June Fed Rate Cut Expectations: GBP/USD is weighed down by diminishing expectations of a rate cut by the Federal Reserve in June.
- Strong US Dollar: The US dollar has strengthened, partly driven by robust US Producer Price Index (PPI) data.
- US Retail Sales: Although US Retail Sales missed estimates of 0.8%, they improved by 0.6% month-on-month (MoM) after a sharp decline in January. This data could have justified a rate cut by the Federal Reserve, but it was offset by reacceleration in the Producer Price Index (PPI), indicating inflationary pressures.
- Labor Market Strength: Initial Jobless Claims for the last week dipped from 210K to 209K, coming in below estimates of 218K, suggesting continued tightness in the labor market.
- UK GDP Growth: The latest Gross Domestic Product (GDP) figures for the UK revealed that the economy exited from a recession, growing by 0.2% MoM in January. This positive economic data has pushed back expectations for a Bank of England rate cut from June to August.
| 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 is facing downward pressure due to fading expectations of a June Fed rate cut, a strong US dollar, and mixed US economic data. However, positive UK GDP figures have delayed expectations for a Bank of England rate cut, adding some support to the pound. As investors digest incoming data and central bank actions, GBP/USD may continue to experience volatility in the near term.
GOLD
- Consolidating Weekly Losses: Gold price is currently consolidating near $2,170 early on Friday, reflecting weekly losses. This consolidation comes amid sour risk sentiment, which is keeping the US Dollar supported.
- Rebound Reversal: Gold experienced a reversal in its previous rebound and registered significant losses on Thursday. This decline followed a shift in market sentiment as traders began to reduce their expectations for a June interest rate cut by the Federal Reserve.
- Hotter-Than-Expected PPI Report: The trigger for this shift was a hotter-than-expected Producer Price Index (PPI) inflation report, which suggested increased inflationary pressures. Consequently, traders adjusted their bets on the timing of a potential Fed rate cut.
- Adjusted Rate Cut Expectations: Traders have reduced the likelihood of a rate cut at the Fed's June meeting to 62%, down from approximately 75% recorded last Friday, according to the CME Group’s Fed Watch Tool.
- Upcoming Focus: The next significant event for gold price is the release of preliminary University of Michigan (UoM) Consumer Sentiment and Inflation Expectations data. This data release could provide further insights into consumer sentiment and inflation expectations, influencing market sentiment towards gold.
- Traders' Caution and Focus: XAU/USD traders are exercising caution and refraining from initiating fresh positional bets. The market's attention is now shifting towards next week’s US Federal Reserve monetary policy announcements, which are expected to provide further clarity on the central bank's stance and potential policy adjustments.
Closing statement: Gold price is currently consolidating weekly losses amid sour risk sentiment and firmness in the US Dollar. Thursday's reversal in gold's rebound followed a shift in market sentiment driven by a hotter-than-expected Producer Price Index (PPI) report, leading traders to adjust their expectations for a June Fed rate cut. With upcoming data releases and the US Federal Reserve's monetary policy announcements next week, XAU/USD traders are exercising caution and closely monitoring developments for potential trading opportunities.
CRUDE OIL
- Narrow Range Trading: West Texas Intermediate (WTI) US Crude Oil prices are currently trading within a narrow range, hovering just around $81 per barrel during the Asian session on Friday.
- Impact of US PPI Data: The recent release of the US Producer Price Index (PPI) data revealed higher-than-expected inflationary pressures. This suggests that the Federal Reserve (Fed) might maintain its stance of keeping interest rates elevated for a longer period to combat inflation.
- US Crude Stockpile Data: According to the Energy Information Administration (EIA) report released on Wednesday, US crude stockpiles unexpectedly decreased by approximately 1.5 million barrels in the week ending March 8. This unexpected decline in inventories has contributed to the firmness in crude oil prices.
- Geopolitical Tensions: On Wednesday, Ukraine carried out one of its most serious drone attacks against Russia's energy sector, resulting in a fire at Rosneft's largest refinery. This incident has heightened geopolitical tensions in the region and added to market uncertainty.
- IEA's Revised Outlook: The International Energy Agency (IEA) has raised its outlook on oil demand growth for 2024 for the fourth time since November. This upward revision is attributed to supply disruptions caused by Houthi attacks in the Red Sea region.
| 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: WTI US Crude Oil prices are currently trading within a narrow range around $81 per barrel. The market sentiment has been influenced by the hotter-than-expected US Producer Price Index (PPI) data, which suggests a potential continuation of the Fed's higher-for-longer interest rate strategy to address inflationary pressures. Additionally, unexpected declines in US crude stockpiles and geopolitical tensions stemming from Ukrainian drone attacks on Russia's energy infrastructure have contributed to market uncertainty. The International Energy Agency's revised outlook on oil demand growth has further supported crude oil prices amid ongoing supply disruptions.
DAX
- New Record High: The DAX index achieved a new record high during early trading on Thursday, marking an extension of its rally. This surge has widened the gap between the index and the 50-day simple moving average (SMA).
- Bullish Signals: The DAX index has maintained a position well above both the 50-day and 200-day Exponential Moving Averages (EMAs), signaling bullish sentiment in the market. A potential breakout above the all-time high would likely prompt bullish momentum, targeting the 18,200 level.
- DAX Volatility Index: The DAX volatility index, which measures the implied volatility of DAX options, saw a modest increase of 1.82% to reach 12.86. This indicates a slight uptick in market uncertainty and volatility expectations.
- Upcoming Factors to Consider: Investors should monitor corporate earnings reports for their potential impact on market sentiment and DAX performance. Also, any commentary or announcements from the European Central Bank (ECB) could influence investor sentiment and DAX movement. Events on the US economic calendar also warrant consideration, as they may provide insights into the global macroeconomic environment and impact DAX trends.
- Near-Term Outlook: ECB and Fed Influence: Short-term trends for the DAX index are likely to be influenced by developments related to the ECB and the Federal Reserve (Fed), particularly any policy decisions or statements made by these central banks. Additionally, investors should track economic indicators for any signs of significant changes in the global macroeconomic landscape, as these could impact market sentiment and DAX performance.
| 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 index has reached a new record high, signalling continued bullish momentum in the market. Investors should keep a close watch on corporate earnings, ECB commentary, and events on the US economic calendar for potential influences on DAX movement. Additionally, monitoring volatility levels and staying attuned to developments related to central bank policies will be crucial for assessing near-term trends in the DAX index.