EURUSD
- EUR/USD Price: The EUR/USD pair continues to drift lower for the second consecutive day, dropping below the 1.0890 mark. This places it near the lowest level since August 8, reflecting ongoing bearish sentiment.
- ECB Rate Cut Expectations: The European Central Bank (ECB) is set to announce its policy decision on Thursday, with markets widely anticipating a third rate cut in this easing cycle. The move comes amid growing concerns over sluggish economic growth across the Eurozone, adding selling pressure to the Euro.
- USD Strength: The US Dollar Index (DXY) remains near a two-month high, buoyed by expectations of less aggressive policy easing from the Federal Reserve. This firming outlook has supported the USD, further weighing on the EUR/USD pair.
- EU Data: Traders are focused on Tuesday’s economic releases, including Germany's ZEW Economic Sentiment Index and Eurozone Industrial Production figures, which will provide insight into the Eurozone’s economic outlook.
- US Data: Later in the day, US economic indicators such as the Empire State Manufacturing Index and speeches by influential Federal Open Market Committee (FOMC) members will likely influence USD demand.
| SMA (20) | Slightly Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: EUR/USD remains under pressure, with the upcoming ECB rate decision and US economic data likely to dictate short-term direction. A dovish ECB stance or strong US data could push the pair further toward recent lows.
GBPUSD
- GBP/USD Weakness: The GBP/USD pair remains on the back foot, trading below the 1.3050 level early Tuesday, reflecting continued negative sentiment toward the British Pound.
- UK Labor Market Data: The UK ILO Unemployment Rate dropped to 4% in the three months to August, while Employment Change increased by 373K. However, these positive labour market figures failed to provide support for the Pound Sterling, likely due to broader concerns about the economic outlook and upcoming data releases.
- Key UK CPI Data: The focus this week is on UK CPI inflation figures set for release on Wednesday. Headline YoY CPI inflation is expected to ease to 1.9%, down from the previous 2.2%. This anticipated drop could influence market expectations around the Bank of England's monetary policy path.
- US Data Focus: Meaningful US economic data isn’t expected until Thursday’s Retail Sales report, which is forecast to rise by 0.3% MoM for September.
- UK Data: Cable traders are also preparing for Thursday’s Bank of England Monetary Policy Report Hearings for additional guidance.
| SMA (20) | Slightly Rising |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: GBP/USD may remain under pressure if UK inflation continues to decline and expectations for aggressive rate cuts by the Bank of England grow. US retail sales data could also provide directional cues later in the week.
GOLD
- Gold Under Pressure: The price of gold continues to trade with a negative bias for the second consecutive day on Tuesday, influenced by a mix of bearish factors.
- China’s Economic Worries: Persisting concerns over China’s economic outlook are dampening global risk sentiment. The latest Chinese export data revealed that exports grew at the slowest pace in five months in September, further contributing to the negative tone in gold markets.
- Fed Rate Cut Expectations Shift: Traders are dialing back expectations of a significant interest rate cut by the Federal Reserve in November. This shift is a response to rising US Treasury bond yields, which had been fueled by speculation of deeper rate cuts but are now reversing due to less aggressive monetary policy outlooks.
- US Dollar Strength: The US Dollar extended last week’s gains, reaching a two-month high against a basket of major currencies. Fed officials, including Governor Christopher Waller and Minneapolis Fed President Neel Kashkari, have both urged caution on further rate cuts, suggesting the Fed may maintain a restrictive stance based on current economic data.
Closing statement: Gold prices may remain under pressure as stronger US dollar momentum and fading hopes for larger Fed rate cuts reduce the metal's appeal. China’s ongoing economic concerns further add to the downside risk.
CRUDE OIL
- WTI Oil Price: West Texas Intermediate (WTI) crude oil continues its downward trend for the third consecutive session, trading around $71.00 per barrel during European hours on Tuesday.
- Geopolitical Developments: Oil prices are under pressure after reports suggested that Israel might refrain from targeting Iranian oil infrastructure, alleviating concerns about potential supply disruptions in the Middle East.
- OPEC Monthly Report: Crude oil took a sharp 5% dive on Monday following the release of OPEC’s Monthly Market Report. The report revised down the global oil demand growth outlook for 2024 and 2025, signaling potential weakness in future demand.
- OPEC+ Production Dynamics: Speculation around Saudi Arabia increasing oil production has added further pressure to oil prices. OPEC+ producers have been exceeding voluntary production cuts, reportedly overproducing by 800,000 barrels per day, which weakens efforts to stabilize prices.
- Fed Watch: Focus now shifts to upcoming speeches from Federal Reserve policymakers, which could influence US dollar dynamics and impact oil prices, as traders await full market participation later in the US session.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Rising |
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Closing statement: WTI crude prices may continue to face downward pressure as easing geopolitical risks and concerns over OPEC+ production dynamics weigh on the market. The oil outlook remains bearish unless fresh cues from Fed policymakers or unexpected supply disruptions arise.
DAX
- Market Movers: Defense-related stocks performed well, with Rheinmetall AG rallying 2.20% following Leonardo’s announcement of plans to finalize a joint venture with the company. Tech stocks also extended their gains, with Infineon Technologies and SAP advancing by 2.07% and 1.41%, respectively.
- China News: Market sentiment was buoyed by fresh stimulus measures from China’s Ministry of Finance announced on Saturday, which helped offset concerns over weaker economic data.
- German Data: Investors will closely watch Tuesday’s release of wholesale prices and ZEW Economic Sentiment figures from Germany, which are expected to provide more insights into the country’s economic health.
- US Fed Rate Cut Expectations: Optimism surrounding potential Federal Reserve rate cuts in November and December, along with hopes for a soft landing in the US economy, supported demand for riskier assets like DAX-listed stocks.
- US Data: Investors should also pay attention to US consumer inflation expectations and the NY Empire State Manufacturing Index, which could influence global market sentiment.
| 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 may continue to benefit from positive sentiment driven by China’s stimulus measures and hopes for US Fed rate cuts, but the focus on upcoming German economic data and US market indicators could impact short-term market direction.