EURUSD
- Current Market Status: The EUR/USD pair is consolidating near 1.1010 during the early European session on Thursday after retreating slightly from a fresh seven-month high. The pair's recent movements reflect a balance between positive Eurozone data and easing inflationary pressures in the US.
- Eurozone GDP Growth: The Eurozone Gross Domestic Product (GDP) for Q2 met market expectations, which provided a boost to the Euro against the US Dollar. However, the upward momentum may be limited, as ING economist Bert Colijn cautioned that "recent numbers casting doubt about service sector strength" have weakened expectations for GDP growth in the latter part of the year.
- US Inflation and EUR/USD Impact: Across the Atlantic, signs of cooling inflation in the US are weighing on the US Dollar, which has created a supportive environment for the EUR/USD pair. The US headline CPI inflation decreased to 2.9% YoY in July, down from 3% in June, reinforcing the narrative that the Federal Reserve might ease its monetary tightening.
- Upcoming US Data Releases: Traders are keenly awaiting the release of key US economic data later Thursday, which includes Retail Sales, Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production.
| SMA (20) | Rising |
|
|
| RSI (14) | Rising |
|
|
| MACD (12, 26, 9) | Rising |
|
|
Closing statement: : The EUR/USD pair is holding steady near recent highs, supported by solid Eurozone GDP figures and signs of cooling US inflation. However, the pair's future trajectory will hinge on upcoming US economic data releases, which could either reinforce the Euro's strength or provide a rebound opportunity for the Dollar. Traders should remain vigilant as these data points are released, as they could introduce significant volatility into the market.
GBPUSD
- Current Market Status: The GBP/USD pair pulled back on Wednesday, declining below 1.2850 as inflation data showed easing price pressures on both sides of the Atlantic. The pair's decline reflects mixed economic signals from the UK and the US, with inflation and growth figures providing key inputs for market sentiment.
- US Inflation Data: The US Consumer Price Index (CPI) inflation rate came in at 2.9% YoY in July, slightly below the anticipated 3.0%. Similarly, the Core CPI inflation decreased to 3.2% annually, down from 3.3% in the previous month. These softer- than-expected inflation figures have contributed to the US Dollar's mixed performance.
- UK Inflation: In the UK, the CPI rose on a yearly basis in July but failed to meet market expectations, printing at 2.2% YoY versus the expected 2.3%. This is still an increase from the previous 2.0%. Meanwhile, Core CPI inflation eased to 3.3%, down from the previous 3.5%.
- GDP numbers: The UK economy expanded 0.6% QoQ in the three months to June, slightly down from 0.7% growth in Q1 2024, while YoY GDP growth matched expectations at 0.9%.
- Upcoming US Data Releases: Investors will be closely watching Thursday’s US macroeconomic data releases, including monthly Retail Sales, Weekly Initial Jobless Claims, the Empire State Manufacturing Index, and the Philly Fed Manufacturing Index.
| SMA (20) | Slightly Falling |
|
| RSI (14) | Slightly Rising |
|
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: The GBP/USD pair has softened below the 1.2850 mark as both UK and US inflation figures showed signs of easing, leading to reduced market expectations for aggressive monetary tightening by the Bank of England and the Federal Reserve. The pair’s future direction will likely hinge on upcoming US economic data, which could either reinforce the current downward momentum or provide a catalyst for a rebound. Traders should monitor these releases closely, as they are likely to influence market sentiment and volatility in the coming sessions.
GOLD
- Current Market Position: Gold price has stabilized above the $2,450 psychological level and is poised to challenge the $2,470 key resistance, signaling resilience despite mixed economic data from the US.
- US Inflation Data: The annual US inflation rate slowed for the fourth consecutive month to 2.9% YoY in July 2024, the lowest since March 2021, down from 3.0% in June and below the forecasted 3.0%. However, the monthly CPI rebounded by 0.2% in July after a 0.1% drop in June, indicating persistent inflationary pressures.
- Federal Reserve Interest Rate Outlook: These inflation indicators have raised uncertainties about the US Federal Reserve's (Fed) upcoming policy decisions. The likelihood of a 50 basis points (bps) rate cut in September has decreased to 36% from 50% before the inflation data release, according to the CME Group’s FedWatch Tool. This change in market sentiment is keeping gold traders cautious.
- Upcoming US Economic Data: Traders are now focusing on today’s key US Retail Sales and Initial Jobless Claims data, which are expected to offer fresh insights into the Fed’s potential rate cut trajectory. These figures will be crucial in determining the next move for gold prices, as they could either strengthen or weaken the case for a significant rate cut in September.
- Geopolitical Factors: Gold continues to find support from ongoing Middle East geopolitical tensions, which have added a risk premium to the safe-haven asset. These tensions could keep gold prices elevated, providing a buffer against downside risks from potential shifts in Fed policy.
Closing statement: Gold prices are holding firm above $2,450 as traders digest mixed signals from US inflation data and weigh the Fed's potential actions in September. The metal remains supported by geopolitical tensions in the Middle East, while upcoming US economic data releases are expected to provide further direction. A break above the $2,470 resistance level could signal further bullish momentum, while downside risks persist if economic data diminishes the likelihood of aggressive Fed rate cuts. Traders should stay alert to these key developments as they could drive significant volatility in XAU/USD.
CRUDE OIL
- Current Market Position: West Texas Intermediate (WTI) Oil extends its losing streak for the third consecutive session, trading around $77.10 during the Asian session on Thursday. The recent decline highlights persistent bearish sentiment in the oil market.
- Geopolitical Factors: Crude Oil prices are depreciating as supply fears related to geopolitical tensions in the Middle East ease. On Wednesday, reports emerged that US President Joe Biden suggested Iran might avoid attacking Israel if a cease-fire is achieved in Gaza. Although new cease-fire talks are set to begin on Thursday in Qatar, Hamas has indicated it will not participate in the negotiations. This potential de- escalation has helped alleviate some of the supply concerns that previously supported oil prices.
- US Oil Inventories: The Energy Information Administration (EIA) reported an unexpected increase in US Oil inventories, which rose by 1.357 million barrels for the week ending August 9. This build-up in crude stocks has added further pressure on WTI prices, as it suggests weaker-than-expected demand in the US.
- Jet Fuel Demand: There are growing concerns that demand for jet fuel may soften due to reduced consumer spending, which could negatively impact travel budgets. As travel demand is a key driver of oil consumption, any significant reduction in jet fuel usage could weigh heavily on Crude Oil prices in the coming months.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Rising |
| |
| MACD (12, 26, 9) | Slightly Rising |
|
Closing statement: WTI Crude Oil prices are under pressure, extending their losses amid easing geopolitical concerns and a surprise build in US Oil inventories. The potential for softer jet fuel demand due to economic pressures further adds to the bearish outlook for oil. Traders should monitor the ongoing cease-fire talks and US inventory levels, as these factors could continue to influence market sentiment and price movements in the near term.
DAX
- Market Overview: Germany's stock market experienced gains after the close on Wednesday, with notable advancements in sectors such as Food & Beverages, Insurance, and Transportation & Logistics. These gains propelled the DAX index higher, reflecting improved investor sentiment.
- DAX Outlook: The DAX is expected to continue its recovery on Thursday, potentially approaching the 18,000-point mark. This would signify a remarkable rebound, with the index recovering approximately 1,000 points from its lowest level since mid-February, when it dipped to nearly 17,000 points at the start of the previous week.
- Global Influences: Positive price and inflation data from the US over the past two days have contributed to a calmer market mood and have supported stock markets worldwide. Investors are increasingly optimistic that the Federal Reserve (Fed) may soon reduce interest rates, providing a further boost to global equities, including the DAX.
- German Market Context: The overall data from overseas stock markets remains positive on Thursday, suggesting continued momentum in global equities. Meanwhile, the reporting season in Germany is nearly concluded, offering little new domestic data to influence the market.
- Upcoming Economic Indicators: US Initial Jobless Claims and Retail Sales data, set to be released on Thursday, could significantly impact market sentiment. An unexpected rise in jobless claims or a decline in retail sales could heighten fears of a potential US economic downturn, potentially affecting global markets, including the DAX.
| SMA (20) | Slightly Falling |
| |
| RSI (14) | Rising |
|
|
| MACD (12, 26, 9) | Falling |
|
|
The DAX shows signs of a robust recovery, with expectations to approach the 18,000-point mark soon. Supported by positive global data and investor optimism around potential Fed rate cuts, the German index may continue its upward trajectory. However, upcoming US economic indicators could introduce volatility, and market participants should remain vigilant.