EURUSD
- The EUR/USD pair is struggling to gain momentum and is currently holding ground above the 1.0900 level.
- Market participants are eagerly awaiting key Eurozone economic data. Specifically, the Eurozone Gross Domestic Product (GDP) for Q2 and the Harmonized Index of Consumer Prices (HICP) for July are scheduled for release later in the week. Forecasts for Eurozone growth indicate that the GDP is expected to remain at 0.3% on a quarterly basis and 0.6% on a yearly basis.
- The Harmonized Index of Consumer Prices (HICP) MoM (month-over-month) figure is expected to stay at -0.1%. HICP is a key measure of inflation in the Eurozone, and any changes in this figure can impact monetary policy decisions by the European Central Bank (ECB).
- In the US, retail sales data for July exceeded expectations, showing a 0.7% increase compared to the expected 0.4%. This positive economic indicator initially boosted the US dollar. On the other hand, the NY Empire State Manufacturing Index for August fell to -19, below the market consensus of -1. This indicates a contraction in manufacturing activity in the New York region, which could have contributed to the dollar's mixed performance after the US economic figures were released.
- Following the release of US economic figures, the EUR/USD pair experienced fluctuations. It initially peaked at 1.0953 but then gradually declined as the dollar regained strength, pushing the pair back towards the 1.0900 level.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Rising |
|
|
| MACD (12, 26, 9) | Slightly Falling |
|
Closing statement: The EUR/USD pair is currently consolidating above the 1.0900 level, with traders eagerly awaiting key Eurozone economic data. Forecasts suggest that Eurozone growth remains stable, while the HICP figure is expected to stay negative. In the US, retail sales exceeded expectations, but the NY Empire State Manufacturing Index indicated a contraction. These mixed economic indicators contributed to fluctuations in the EUR/USD pair's price movement.
GBPUSD
- In the UK, annual consumer price inflation slowed to 6.8% in July, according to data from the Office for National Statistics. This indicates that the rate at which prices of goods and services are increasing has moderated compared to previous periods.
- The Bank of England (BoE) had previously stated its expectation that inflation in July would fall to 6.8%. This suggests that the actual figure met the central bank's projections.
- The BoE is particularly focused on core inflation, which excludes the volatile prices of food and energy. Additionally, consumer services prices are also under close scrutiny. Core inflation remained at 6.9% in July, the same as the previous month's reading. This level is slightly higher than the expectations of 6.8% from a Reuters poll.
- Following the release of the inflation data, the GBP/USD pair managed to hold onto small daily gains above the psychological level of 1.2700. This level is significant as it can act as a support or resistance level, and its breach or hold can indicate potential further price movements.
| SMA (20) | Falling |
|
|
| RSI (14) | Slightly Rising |
|
|
| MACD (12, 26, 9) | Neutral |
Closing statement: The UK's annual consumer price inflation slowed to 6.8% in July, meeting the Bank of England's earlier expectations. Core inflation, which excludes volatile components, remained at 6.9%. After the release of the inflation data, the GBP/USD pair maintained small daily gains above the important psychological level of 1.2700. This data has implications for the Bank of England's monetary policy decisions and can influence further movements in the GBP/USD pair.
GOLD
- Gold prices remained relatively unchanged on Wednesday and were on the verge of declining below crucial support levels. This suggests a lack of significant bullish momentum for gold at that time.
- There were concerns in the market about a potential economic slowdown in China. This can impact global economic sentiment and contribute to risk aversion, which often prompts investors to seek safe-haven assets like gold.
- The release of U.S. retail sales data on Tuesday indicated that consumer spending in the United States remained robust. This could potentially contribute to inflationary pressures in the coming months, as strong consumer demand can lead to higher prices.
- The combination of anticipated inflation and the likelihood of rising interest rates can boost the U.S. dollar. As a result, investors might shift towards the dollar, which could put downward pressure on gold prices, as gold is priced in dollars.
- The U.S. Federal Reserve (Fed) had signaled the possibility of further rate hikes if inflation remains elevated. Even if the Fed decides not to increase rates, it still indicated a plan to keep rates at relatively high levels until at least mid-2024. This situation might present a challenging environment for non-yielding assets like gold, as higher interest rates can make other investments more attractive.
Closing statement: Gold prices remained flat and were close to breaking below key support levels due to concerns about a potential Chinese economic slowdown and the impact of rising interest rates. The release of robust U.S. retail sales data contributed to expectations of further inflation and potentially higher interest rates, leading to dollar strength. This combination of factors might have contributed to gold's lack of significant bullish momentum at that time.
CRUDE OIL
- Crude oil prices experienced a slight decline in Asian trading on Wednesday, indicating a lack of strong upward momentum.
- The market seemed to overlook signs of a larger-than-expected draw in U.S. inventories and instead focused on concerns about the economic conditions in China. Weak economic indicators from China, a major oil consumer, had been contributing to worries about a potential slowdown in oil demand.
- The mention of rising interest rates indicates that investors were factoring in the potential influence of monetary policy decisions on crude oil prices. Rising interest rates can strengthen the U.S. dollar, making dollar-denominated commodities like oil relatively more expensive for holders of other currencies, which might dampen demand.
- Despite the recent decline, the analysis mentioned that tighter oil supplies, largely due to significant supply cuts from major oil-producing countries like Saudi Arabia and Russia, were expected to provide some support to crude prices for the rest of 2023.
- EIA inventory data due later today is forecast to show a 2.3-million-barrel draw.
| SMA (20) | Rising |
|
| |
| RSI (14) | Falling |
|
|
|
| MACD (12, 26, 9) | Falling |
|
|
Closing statement: Crude oil prices showed a slight decline as concerns over worsening Chinese economic conditions, the potential impact of rising interest rates, and the dollar's strength appeared to outweigh the positive influence of larger-than-expected draws in U.S. oil inventories. The market sentiment during this period seemed cautious, and the ongoing supply cuts by major oil-producing countries were expected to provide some support to oil prices for the remainder of 2023.
DAX
- The analysis suggests that the DAX experienced a bearish sentiment on Tuesday, as indicated by the losses in various sectors, particularly Construction, Utilities, and Chemicals.
- The DAX index fell by 0.86% during the trading session, indicating a downward movement in stock prices.
- The German ZEW Survey's Expectation Index stood at -12.3 in July, better than the expected -14.9, but the Current Situation Index tumbled to -71.3, worse than the market consensus of -63.0.
- The ZEW Economic Sentiment figures for Germany and the Eurozone have sparked optimism for a positive shift in the macroeconomic landscape.
- The investors are considering the Federal Open Market Committee (FOMC) meeting minutes today and this suggests that the market sentiment is influenced by global macroeconomic factors, including the monetary policy decisions of major central banks like the U.S. Federal Reserve.
| SMA (20) | Slightly Falling |
|
| RSI (14) | Neutral | |
| MACD (12, 26, 9) | Slightly Falling |
|
Closing statement: The DAX experienced a bearish trading day, with losses in various sectors contributing to a decline in the index. While ZEW Economic Sentiment numbers for Germany showed an improved outlook, the analysis also highlighted challenges reflected in the Current Situation Index. The Eurozone economy and global events such as the FOMC meeting minutes were likely impacting the market sentiment during that period.