EURUSD
- EUR/USD continues to lose ground, trading around 1.0865 during the Asian hours on Friday.
- From a technical standpoint on a daily chart, analysis indicates a sideways trend for the pair as it continues to lie within a symmetrical triangle. This suggests consolidation with potential breakout opportunities in either direction.
- ECB policymakers have been cautious in recent appearances. However, ECB Governing Council member and Governor of the Latvian central bank Martins Kazaks announced on Thursday that a June rate cut is definitely on the table. This dovish stance has implications for the Euro's strength.
- Federal Reserve (Fed) officials continue to dominate investor focus, with multiple policymakers from the US central bank giving soundbites on Thursday. Their comments are critical as they influence market expectations for US monetary policy.
- Several central bankers are expected to make appearances on Friday, including ECB’s Luis de Guindos and the Fed’s Neel Kashkari, Christopher Waller, and Mary Daly. Their speeches will be closely watched for insights into future monetary policy directions, impacting the EUR/USD pair.
| 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 EUR/USD pair continues to lose ground, trading around 1.0865 during the Asian hours on Friday. Technically, the pair remains in a sideways trend within a symmetrical triangle, suggesting potential breakout opportunities. ECB policymaker Martins Kazaks' recent comment about a possible June rate cut has introduced a dovish tone, affecting the Euro. Meanwhile, Fed officials' comments continue to be a focal point for investors, influencing expectations for US monetary policy. With speeches from several central bankers, including ECB’s Luis de Guindos and multiple Fed officials, slated for Friday, market participants will be keenly watching for further insights that could drive the pair's movement to round out the trading week.
GBPUSD
- The GBP/USD pair posts modest losses near 1.2660 during the Asian session on Friday.
- On Thursday, Fed Bank of Atlanta President Raphael Bostic cautioned about the need for patience with interest rates, indicating ongoing pricing pressure in the US economy.
- Cleveland Fed President Loretta Mester added that it might take longer than expected to gain confidence about the path of inflation, advocating for a prolonged restrictive stance.
- The number of Americans filing new claims for jobless benefits rose by 222K for the week ending May 11, according to the US Department of Labor.
- BoE policymaker Megan Greene stated that the BoE wants more data on price pressures easing before it starts the easing policy, suggesting a cautious approach to future rate cuts.
| 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 GBP/USD pair posts modest losses near 1.2660 during the Asian session on Friday. Comments from Fed officials about ongoing pricing pressures and a cautious stance on interest rates weighed on the pair, while a rise in US jobless claims provided mixed signals. BoE's Megan Greene indicated that the BoE seeks more evidence of easing price pressures before considering policy changes, adding to the cautious sentiment.
GOLD
- The gold (XAU/USD) is trading with a bearish bias on Friday after retreating from the nearly $2,400 barrier.
- The bullish move of precious metals in the previous sessions was bolstered by the softer-than-expected US inflation data in April, which triggered hope for rate cuts from the US Federal Reserve (Fed).
- The cautious approach from Fed officials on Thursday to keep borrowing costs high for longer suggested that the US central bank is not in a rush to cut interest rates this year.
- Housing Starts rose by 5.7% MoM to 1.36 million in April, while Building Permits dropped by 3% MoM in April to 1.44 million.
- In the absence of top-tier economic data from the US docket, market participants will monitor Fedspeak, which might offer some hints about the future path of the Fed’s monetary policy. The Fed’s Kashkari, Waller, and Daly are set to speak later on Friday.
Closing statement: The gold price trades with a bearish bias on Friday after retreating from the nearly $2,400 barrier. Previous sessions' gains were driven by softer-than-expected US inflation data, raising hopes for Fed rate cuts. However, cautious remarks from Fed officials about maintaining high borrowing costs tempered those expectations. US housing data showed mixed results, with Housing Starts rising but Building Permits falling. Market participants will now focus on upcoming speeches from Fed officials for further clues on monetary policy.
CRUDE OIL
- Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $79.15 on Friday.
- The recent US CPI inflation report showed that US inflation eased slightly in April, prompting expectations of interest rate cuts from the US Fed in September.
- A decline in oil inventories lifted oil prices. Crude inventories in the US for the week ending May 3 fell by 2.5 million barrels to 457 million barrels.
- On Thursday, Israel's tanks moved into Jabalia in northern Gaza and pummeled Rafah in the south without advancing, according to Reuters. Ceasefire negotiations mediated by Qatar and Egypt are at a stalemate, with Israel refusing.
- Oil traders will closely monitor developments surrounding the renewed geopolitical tensions in the Middle East. Any escalating geopolitical risks might raise concerns about oil supply disruptions, lifting WTI 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: WTI crude oil is trading around $79.15 on Friday. Recent US CPI inflation data suggested a slight easing in inflation for April, raising expectations of Fed rate cuts in September. A significant decline in US crude inventories also supported oil prices. Meanwhile, geopolitical tensions in the Middle East, particularly involving Israel and Gaza, are being closely watched by traders, as any escalation could impact oil supply and drive prices higher.
DAX
- On Thursday, ECB commentary garnered investor attention. Amidst rising bets on a June ECB rate cut, uncertainty about post-June policy goals lingered.
- ECB member Martins Kazaks fueled uncertainty by tempering investor expectations of multiple 2024 ECB rate cuts, warning that the ECB is in no hurry to cut interest rates.
- Corporate earnings affected buyer demand for DAX-listed stocks, with Siemens AG and Deutsche Telekom AG releasing their results on Thursday.
- Economic data from China will likely set the tone for the Friday session. Weaker-than-expected retail sales figures overshadowed an upswing in industrial production, testing buyer demand for riskier assets.
- Finalized Eurozone inflation numbers also warrant investor attention. According to preliminary numbers, the annual inflation rate remained at 2.4% in April, unchanged from March.
| 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: DAX investors focused on ECB commentary and corporate earnings, with Martins Kazaks' remarks adding to the uncertainty about rate cuts. Economic data from China and finalized Eurozone inflation numbers are likely to influence Friday's session, as investors assess the impact on buyer demand for DAX-listed stocks.