EURUSD
- Current Price: EUR/USD stabilizes around 1.0880 after a four-day losing streak during Wednesday’s European session, reflecting some respite for the Euro.
- US Dollar Strength: The US Dollar Index (DXY) remains firm near its two-month high of 103.35, continuing to support the Greenback amid market expectations.
- Fed Outlook: On Tuesday, Raphael Bostic, President of the Federal Reserve Bank of Atlanta, indicated that he anticipates one more 25 basis point rate cut this year, which aligns with his previous forecast from the last Fed meeting.
- Eurozone Inflation: Traders are keenly awaiting the Harmonized Index of Consumer Prices (HICP) data from the Eurozone, due on Thursday. This data will provide vital insight ahead of the European Central Bank’s (ECB) monetary policy decision.
- ECB Events: The ECB’s Monetary Policy Statement and President Christine Lagarde’s speech during the post-meeting press conference will be critical in shaping expectations for the Euro’s trajectory and the future of ECB monetary policy.
| 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 faces a mixed outlook with steady USD strength and upcoming key data releases. Traders will likely remain cautious, awaiting the Eurozone HICP data and ECB's policy direction to determine the next move.
GBPUSD
- Bearish Momentum: GBP/USD remains under selling pressure during the European session, trading around 1.3000, reflecting weakness in the British Pound.
- UK Unemployment Rate: The UK’s ILO Unemployment Rate eased to 4.0% for the three months ending in August, down from July's 4.1%, as reported by the Office for National Statistics (ONS).
- Lower Inflation: UK inflation data revealed that annual CPI inflation declined to 1.7% in September, down from 2.2% in August, missing market expectations of 1.9%. This lower-than-expected inflation reading contributes to GBP softness.
- BoE Rate Cut Speculation: Growing market speculation that the Bank of England (BoE) could accelerate its rate-cutting cycle weighs further on the British Pound, acting as a bearish force for the GBP/USD pair.
- Technical Outlook: The current price action may still be classified as a bearish consolidation phase, especially after the recent pullback from the 1.3435 level — the highest since March 2022, touched last month.
| 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: The GBP/USD outlook remains tilted toward the downside amid lower UK inflation and increasing BoE rate cut speculation. Further bearish movement may follow as technical indicators suggest continued consolidation within a downtrend.
GOLD
- Gold's Positive Momentum: Gold price extends gains for the second consecutive day on Wednesday, reaching a one-and-a-half-week high around the $2,670 mark during the European session, maintaining a positive tone in four of the last five sessions.
- Weak US Manufacturing Data: The New York Federal Reserve's Empire State Manufacturing Index dropped to -11.9 in October, after surging to a 29-month high in September. This decline suggests worsening economic conditions, which provides some support for gold prices as investors seek safe-haven assets.
- Fed Rate Outlook: Comments from Fed officials add mixed signals. San Francisco Fed President Mary Daly mentioned that inflation control progress is significant, leaving room for one or two more rate cuts this year. On the other hand, Atlanta Fed President Raphael Bostic expressed optimism about the economy, downplaying recession fears while noting that inflation is heading toward the 2% target.
- Upcoming US and China Data: Traders will now focus on key US economic reports, including Monthly Retail Sales, Industrial Production, and Weekly Initial Jobless Claims. Additionally, China’s macroeconomic data, due later this week, could influence risk sentiment and the gold price trajectory.
Closing statement: Gold's near-term outlook remains positive, benefiting from weaker US economic data and Fed rate-cut expectations. However, market reaction to upcoming US and Chinese economic reports will be pivotal in determining the next move for XAU/USD.
CRUDE OIL
- WTI Price: West Texas Intermediate (WTI) crude oil prices remain under pressure during the European session on Wednesday, retreating after a modest bounce from a two-week low around $69.70.
- Middle East Conflict: While fears of conflict escalation in the Middle East persist, reports that Israel would refrain from targeting Iranian nuclear and oil sites have helped alleviate concerns about major supply disruptions, dampening any upward pressure on oil prices.
- Data from China: China's oil imports have fallen for the fifth consecutive month, raising concerns about weak demand from the world’s largest oil importer, further contributing to the bearish sentiment in crude markets.
- OPEC's Forecast: OPEC lowered its global oil demand growth forecast for 2024 and 2025, aligning its outlook with the International Energy Agency (IEA), marking the first time both organizations anticipate an oversupply in the market. This further validates the negative outlook for crude oil prices.
- Delayed API Data: The weekly oil inventory data from the American Petroleum Institute (API), typically released on Tuesday, has been moved to Wednesday due to the Columbus Day holiday.
| 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 oil prices remain under downward pressure due to weak demand signals from China, easing supply concerns in the Middle East, and OPEC’s revised demand outlook. Traders will keep an eye on the upcoming API data for additional direction, but the overall tone suggests further bearish momentum for crude oil.
DAX
- DAX’s New ATH: On Tuesday, the DAX slipped by 0.11%, partially reversing the previous session's 0.69% gain. The DAX reached an all-time high of 19,637 earlier in the day before retreating slightly.
- Sector and Stock Movements: Siemens Energy led the energy sector decline with a 4.01% drop, while Deutsche Bank fell by 2.57% following a block sale report. Tech stocks also saw losses, with Infineon Technologies and SAP down 1.84% and 0.83%, respectively, reacting to weak earnings from ASML.
- German Wholesale Prices: German wholesale prices painted a bleak picture of domestic demand, unexpectedly declining by 1.6% year-on-year in September after a 1.1% fall in August. This raises concerns over economic growth prospects.
- ECB Commentary in Focus: Investors will closely monitor European Central Bank (ECB) commentary on Wednesday, with insights into inflation, the economic outlook, and the rate path potentially influencing DAX-listed stocks.
- US Inflation Expectations: On Tuesday, US consumer inflation expectations remained unchanged at 3.0%, which may have contributed to the DAX’s slight losses. The stable inflation outlook could signal steady consumer spending, affecting 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 remains under pressure despite reaching an all-time high earlier in the session. Concerns about weak demand in Germany, negative sector performance, and inflation expectations weigh on investor sentiment. Focus will now shift to ECB commentary, which could shape the market’s direction in the near term.