EURUSD
- EUR/USD demonstrated significant strength on Wednesday, marking one of the pair's best days in 2024. It climbed towards the 1.0900 level and was on track to achieve a fourth consecutive week of gains, reflecting the euro's resilience against the US dollar.
- US Consumer Price Index (CPI) inflation eased to 0.3% month-on-month (MoM), below market expectations of a steady 0.4% print. This outcome fueled a broad-market risk rally as investors interpreted the data as increasing the likelihood of a rate cut from the Federal Reserve (Fed) in September.
- European final Gross Domestic Product (GDP) figures for the first quarter broadly met expectations, with Q1 GDP growth at 0.3% quarter-on-quarter (QoQ), in line with forecasts and consistent with the previous quarter's growth rate.
- The remainder of the week will feature mid-tier data releases from both the US and Europe. Market participants are eagerly awaiting further clues about the Fed's potential interest rate decisions in the third quarter.
- Today, attention will be focused on the US housing sector, with the release of monthly Building Permits and Housing Starts data. Additionally, investors will monitor other key indicators such as Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production for insights into the health of the US economy.
| 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: EUR/USD exhibited notable strength during Wednesday's trading session, advancing towards the 1.0900 level and heading for its fourth consecutive week of gains. The pair's performance was driven by easing US CPI inflation, which bolstered expectations of a Fed rate cut in September. European GDP figures remained in line with expectations, contributing to the euro's resilience. Looking ahead, market participants will closely monitor upcoming economic events, particularly those related to the US housing sector, for further guidance on the future direction of the currency pair.
GBPUSD
- The GBP/USD pair continued to rise, reaching near 1.2682 during Thursday's Asian session, indicating ongoing bullish momentum in the currency pair.
- Inflation in the United States eased slightly in April, with the Consumer Price Index (CPI) rising 3.4% year-on-year, compared to a 3.5% increase in March. This release from the US Bureau of Labor Statistics (BLS) on Wednesday contributed to market sentiment.
- The final reading of Retail Sales in the US for April showed no change from the previous reading of a 0.6% increase, falling short of the market expectation of a 0.4% rise. This data release added to the mixed economic signals coming from the US.
- Several Federal Reserve officials, including Barr, Harker, Mester, and Bostic, are scheduled to speak on Thursday. Market participants will closely watch their remarks for insights into the central bank's monetary policy stance.
- The UK employment data indicated that job market conditions deteriorated for the third consecutive month, with the Unemployment Rate rising. This development may weigh on the British pound's performance against the US dollar.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: GBP/USD extended its upward trajectory during Thursday's Asian session, reaching near 1.2682, driven by ongoing bullish momentum. US inflation data showed a slight easing in April, while Retail Sales figures fell short of market expectations. Additionally, market participants will closely monitor speeches from Federal Reserve officials for further guidance on monetary policy. Meanwhile, the UK employment data revealed a deterioration in job market conditions, potentially impacting the performance of the British pound against the US dollar.
GOLD
- Gold price gained traction on Thursday, driven by a weaker US Dollar, which typically boosts the appeal of the precious metal as an alternative investment.
- Technical indicators for gold advanced within positive levels, reaching fresh multi-week highs, indicating potential for further bullish continuation in the price.
- The recent Consumer Price Index (CPI) report revealed that inflation in the US slowed in April. This development led market participants to increase their expectations for rate cuts by the US Federal Reserve later this year.
- The Federal Reserve has maintained its benchmark interest rates unchanged since hiking them to a range of 5.25% - 5.50% in July 2023, longer than initially expected. This prolonged period of unchanged rates has fueled speculation about potential rate cuts.
- The Federal Reserve's Summary of Economic Projections (SEP) from their December meeting suggested policymakers were considering three potential rate hikes. However, the recent slowdown in inflation has prompted reassessment of these projections.
Closing statement: Gold price gained traction on Thursday amid a weaker US Dollar, with technical indicators showing signs of bullish continuation. The slowdown in US inflation data for April increased expectations for rate cuts by the Federal Reserve, which has maintained interest rates unchanged since July 2023. Market participants are closely monitoring the Fed's economic projections for insights into potential future rate hikes or cuts, shaping the outlook for gold prices in the near term.
CRUDE OIL
- West Texas Intermediate (WTI) crude oil price retraced its recent losses, trading around $78.45 per barrel during Wednesday's European session, indicating some recovery from previous declines.
- WTI crude oil remains bearish, trading below the 200-day Simple Moving Average (SMA) at around $80 per barrel, suggesting ongoing downward pressure on prices.
- The advance in crude oil prices can be attributed to the latest crude oil supply update from the American Petroleum Institute (API) released on Tuesday, which likely showed a decline in inventories.
- According to the Energy Information Administration (EIA), the week-on-week change in crude oil stocks fell faster than expected, indicating a decrease in oil inventories and potentially tightening supply.
- Broad-market risk appetite surged during the US market session after lower-than-expected US Consumer Price Index (CPI) inflation data raised hopes for Federal Reserve (Fed) rate cuts, which may have contributed to the increase in crude oil prices.
| 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: West Texas Intermediate (WTI) crude oil prices retraced recent losses, trading around $78.45 per barrel, amid ongoing bearish sentiment and technical weakness. The advance in prices was supported by a decline in crude oil inventories, as indicated by the Energy Information Administration (EIA), coupled with increased market optimism following lower-than-expected US inflation data, which raised expectations for Federal Reserve (Fed) rate cuts. However, crude oil prices remain influenced by supply dynamics and broader market sentiment, with investors closely monitoring inventory data and central bank policy decisions for further price direction.
DAX
- Economic data for the Eurozone attracted investor interest on Wednesday, with the second estimate showing that the Eurozone economy expanded by 0.3% in Q1, unchanged from the first estimate. This growth rate was an improvement compared to the previous quarter, indicating a gradual recovery.
- Industrial production in the Eurozone increased by 0.6% in March, slightly lower than the 1.0% rise in February but still above economists' expectations of a 0.5% increase. The positive trend in industrial production aligned with expectations of improving macroeconomic conditions in the region.
- The annual core inflation rate in the US declined from 3.8% to 3.6% in April, while the overall inflation rate fell from 3.5% to 3.4%. These softer inflation numbers fueled investor expectations of a September Federal Reserve (Fed) rate cut, contributing to increased buyer demand for DAX-listed stocks.
- The ECB Financial Stability Review, scheduled for Thursday, will warrant investor attention, with a focus on financial conditions and geopolitical risks. Investors will closely monitor the ECB's assessment of the stability of the financial system and any potential risks.
- Investors should also consider corporate earnings reports, with Siemens AG and Deutsche Telekom AG among the major companies releasing earnings on Thursday. Earnings results from these companies could impact investor sentiment and market direction.
| 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 saw positive momentum on Wednesday, supported by Eurozone economic data indicating stable growth and an increase in industrial production. Softening inflation figures in the US fueled investor expectations of a September Federal Reserve rate cut, driving buyer demand for DAX-listed stocks. Looking ahead, investors will closely monitor the ECB Financial Stability Review and corporate earnings releases for further insights into market trends and sentiment.