EURUSD
- The EUR/USD is currently trading on a softer note, hovering around 1.0750 in European trading on Friday. This indicates a relative weakness in the euro against the US dollar. The softening of the EUR/USD is attributed to renewed demand for the US Dollar.
- Dovish comments from ECB policymakers are contributing to the downward pressure on EUR/USD. Dovish remarks often suggest a less aggressive stance on monetary policy or potential concerns about economic conditions, influencing currency values.
- The market is currently attentive to the upcoming ECB-speak, which refers to speeches or statements from officials of the European Central Bank. Additionally, US economic data will be closely watched, as it can significantly impact the direction of EUR/USD.
- The possibility of the Federal Reserve initiating a cycle of monetary easing in the coming months is mentioned. This view is supported by strong fundamentals and a tight labor market in the United States, factors that could contribute to a stronger US Dollar.
- Christine Lagarde, the President of the ECB, highlighted the bank's wage tracker indicating ongoing strong wage pressures. This information may provide insights into the ECB's considerations regarding inflation and monetary policy.
- The European Commission's Winter Forecast, revising projections for eurozone GDP growth in 2024 downward to 0.8% (from November’s 1.2%), indicates a more cautious outlook for economic expansion in the Eurozone. Economic forecasts can influence currency valuations.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling |
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Closing statement: The softening of EUR/USD is influenced by renewed US Dollar demand, dovish ECB comments, and shifting economic forecasts. Traders are closely monitoring ECB communications and US economic data for further cues on the future direction of the currency pair. The contrast between potential monetary easing in the US and any indications of economic challenges in the Eurozone will likely shape EUR/USD movements.
GBPUSD
- GBP/USD is experiencing fluctuations around the 1.2600 level in the early European session on Friday. This suggests indecision or a lack of clear directional momentum in the currency pair.
- UK Retail Sales rose by 3.4% on a monthly basis. Despite this positive economic indicator, it seems that the increase in Retail Sales did not provide significant support to Pound Sterling.
- US Retail Sales data for January shows a significant decline of -0.8% MoM, which is below both December’s figures and market estimates of -0.1%. The drop is attributed to decreased sales at auto dealerships and gasoline service stations, partly influenced by stormy weather.
- Unemployment claims for the week ending in February 10 rose by 212K. While this is an increase, it is less than what was forecasted and less than the prior reading of 220K. The improvement in unemployment claims might be seen as a positive aspect for the US economy.
- BoE Governor Megan Greene, considered a hawk in the Bank of England, expressed the view that she believes rates are going to be higher than before. She mentioned that she would consider changing her view if measures of wage growth ease. This indicates a hawkish stance on monetary policy.
- BoE Governor Catherine Mann commented on the weak growth in 2023, stating that she is not surprised by it. However, she also mentioned that the outlook for 2024 could be brighter.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: GBP/USD is currently marked by fluctuations around 1.2600, influenced by a mix of positive UK Retail Sales, mixed US Retail Sales, and unemployment claims data. BoE Governors' comments, especially the hawkish stance of Megan Greene, may also play a role in shaping market sentiment. Traders are likely monitoring these factors for cues on the future direction of GBP/USD.
GOLD
- Gold is currently trading just above $2,000, consolidating its rebound from the recent two-month lows of $1,984 set on Wednesday. This indicates a recovery in the price of gold after a brief decline.
- The market has reacted positively to Thursday’s weak US Retail Sales data for January. The weaker-than-expected retail sales data has brought back discussions about potential early rate cuts by the US Federal Reserve (Fed). This sentiment has led to profit-taking in the US Dollar, providing support to gold.
- The US Producer Price Index (PPI) is forecasted to rise at an annual pace of 0.6% in January, compared to a previous increase of 1.0%. The monthly PPI inflation is expected to rebound to 0.1% from the previous -0.2%.
- The UoM Preliminary Consumer Sentiment is anticipated to inch higher to 80.0 this month compared to January’s reading of 79.0.
- Investors are closely monitoring the upcoming US economic indicators, particularly the PPI and Consumer Sentiment data. Any surprises in these figures could influence market sentiment.
- Speeches from Federal Reserve officials will be scrutinized for insights into Fed rate cut expectations. The tone set by both economic data and Fed officials is likely to impact the gold market in the coming week.
Closing statement: Gold is currently consolidating above $2,000, with its recent rebound attributed to profit-taking in the US Dollar after weak US Retail Sales data reignited discussions about potential Fed rate cuts. The upcoming US economic indicators and Fed speeches will be critical in determining the direction of the gold market. Traders are attentively watching for cues on the future trajectory of both the US Dollar and gold prices.
CRUDE OIL
- Western Texas Intermediate (WTI), the US crude oil benchmark, is currently trading around $77.80 on Friday. This indicates a relatively high price level for WTI crude oil.
- WTI prices have edged higher following weaker-than-expected US Retail Sales data. The market perceives this as raising hope that the Federal Reserve (Fed) might initiate interest rate cuts in the coming months. The expectation of lower interest rates tends to support commodity prices, including oil.
- Rising geopolitical tension in the Middle East is noted as a potential factor that might boost WTI prices. Geopolitical issues in the region can disrupt crude oil supplies, leading to concerns about potential shortages.
- The International Energy Agency (IEA) expects that there will be an excess of crude oil in 2024. This suggests a potential oversupply situation, which, if realized, could put downward pressure on oil prices.
- Oil traders are keeping an eye on the US Producer Price Index (PPI) for January. This indicator can provide insights into inflationary pressures, which may impact the broader economic environment and, consequently, oil prices.
- Speeches from the Fed's Barr and Daly are scheduled. These speeches could provide cues regarding the Fed's stance on monetary policy, influencing the USD-denominated WTI price.
| SMA (20) | Slightly Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: WTI crude oil prices are currently influenced by a combination of factors, including the impact of weaker-than-expected US Retail Sales data, rising geopolitical tension in the Middle East, and the IEA's outlook on a potential crude oil excess in 2024. Oil traders are closely monitoring upcoming economic indicators and Fed speeches for further guidance on the future trajectory of oil prices.
DAX
- Eurozone trade data for December drew investor interest. The Eurozone trade surplus narrowed from €20.3 billion to €16.8 billion. A narrowing trade surplus can be indicative of changing economic conditions and trade dynamics.
- Inflation and growth forecasts influenced buyer demand for DAX-listed stocks. The European Commission released growth and inflation forecasts for 2024, with a projection of the eurozone economy growing by 0.8%, down from the previous estimate of 1.2%. These projections may impact investor sentiment and decisions related to DAX stocks.
- ECB President Lagarde did not dampen positive investor sentiment. She mentioned that inflation would continue to fall toward the target over 2024. This suggests a commitment to addressing inflation concerns, which can influence monetary policy decisions.
- German wholesale prices for January will be of interest to investors. The forecast indicates an expected decline of 2.5% year-over-year. Wholesale price trends can provide insights into economic activity and pricing dynamics within the German economy.
- Investors are advised to monitor ECB chatter, especially ECB Executive Board member Isabel Schnabel's scheduled speech. ECB commentary can provide additional insights into the central bank's perspective on economic conditions, inflation, and potential monetary policy decisions.
| SMA (20) | 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 DAX is influenced by a combination of factors, including trade data, inflation and growth forecasts, comments from ECB President Lagarde, and upcoming German wholesale price figures. Investors are closely monitoring economic indicators and central bank commentary for guidance on DAX-related investment decisions.