EURUSD
- The EUR/USD has seen a notable rebound, breaking a streak of six consecutive daily declines, which culminated in the pair reaching a new year-to-date low near the 1.0600 level.
- Regarding the European Central Bank (ECB), board member Holzmann emphasized the divergence in inflation dynamics between Europe and the US. He suggested that it would be prudent to wait until June before considering any potential interest rate cuts, highlighting the cautious approach of the ECB.
- This sentiment was echoed by ECB's Cipollone, who noted a rapid decline in inflation but expressed optimism about a return to the 2% inflation path next year, with the target expected to be achieved by mid-2025. These remarks underscore the ECB's commitment to achieving its inflation target over the medium term.
- Meanwhile, ECB policymaker Bostjan Vasle suggested that the deposit rate should be lowered to 3% by the end of the year from its current record high of 4%, contingent upon the expected continuation of disinflationary pressures.
- On the other side of the Atlantic, Federal Reserve Chair Powell, speaking at an event hosted by The Wilson Center in Washington on Tuesday, conveyed that recent economic data have not increased the Fed's confidence. He indicated that it may take longer than anticipated for the Fed to gain the necessary confidence to make decisions regarding monetary policy adjustments.
| 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: Overall, the dynamics surrounding EUR/USD are influenced by comments from ECB officials emphasizing the need for caution regarding interest rate cuts, along with statements from the Fed suggesting a more patient approach to monetary policy adjustments.
GBPUSD
- GBP/USD continues to advance, extending its recovery gains toward the 1.2500 level in the European morning on Thursday.
- The Office for National Statistics (ONS) in the UK reported on Wednesday that inflation, measured by the Consumer Price Index (CPI), decreased to 3.2% in March from 3.4% in February. This decline in inflation may alleviate some pressure on the Bank of England (BoE) regarding potential interest rate adjustments.
- Meanwhile, the US Dollar is struggling to attract demand, contributing to the upward movement of GBP/USD. Improved market sentiment midweek is also supporting the pair, with the UK's FTSE 100 Index rising more than 0.5% and US stock index futures showing gains between 0.2% and 0.4%.
- With no significant high-tier data releases from the US, GBP/USD could maintain its upward momentum if risk-on sentiment continues to dominate financial markets.
| 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: Investors will closely monitor developments related to the Iran-Israel conflict. Israel is expected to convene a cabinet meeting to decide on its response to Iran's retaliatory attack over the weekend, which could impact market sentiment and consequently influence the direction of GBP/USD.
GOLD
- Gold price is making another attempt to surpass the $2,400 level as it seeks to reclaim lost ground amid looming geopolitical risks. Furthermore, there has been profit-taking in the market on long positions in the US Dollar, following a rally triggered by hawkish comments from US Federal Reserve (Fed) Chair Jerome Powell on Tuesday. This profit-taking has contributed to the upward pressure on gold prices.
- Geopolitical tensions between Israel and Iran have escalated, leading to increased safe-haven flows into US government bonds. As a result, US Treasury bond yields have declined, which has further supported the demand for gold as a safe-haven asset.
- Cleveland Fed President Loretta Mester stated early Thursday that she anticipates a shift towards eased monetary policy and hinted at a possible rate cut if the labor market deteriorates. Such dovish remarks from a Fed official could weaken the US Dollar and bolster the appeal of gold.
- Traders in the gold market will also be closely monitoring the release of US weekly Jobless Claims and housing data, which could provide additional incentives and insights into the state of the US economy, influencing gold price movements.
Closing statement: In conclusion, gold price continues to exhibit resilience as it attempts to surpass the $2,400 level amid ongoing geopolitical tensions and profit-taking in the US Dollar. The escalation of tensions between Israel and Iran has fuelled safe-haven demand for gold, while dovish remarks from a Fed official have further supported the precious metal. Traders will closely monitor upcoming US economic data releases for further insights into the market dynamics.
CRUDE OIL
- Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $83.00 on Thursday.
- US crude oil stocks rose for a fourth straight week. Crude oil stockpiles in the United States for the week ending April 12 rose by 2.735 million barrels from a build of 5.841 million barrels in the previous week.
- Furthermore, several Fed officials delivered hawkish comments, which provided support to the US Dollar (USD) and dragged the USD-denominated WTI prices lower.
- The risk of escalation in the Middle East appears to be limited for the time being. However, oil traders will keep an eye on Israel, and their response.
- Additionally, the US is threatening to reimpose the ban on Venezuelan Oil if President Maduro fails to meet his commitment to fair elections this year.
| SMA (20) | Rising |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The WTI crude oil market continues to face downward pressure amid rising US crude oil inventories and hawkish comments from Fed officials. While geopolitical tensions remain a concern, particularly regarding the situation in the Middle East, traders are closely monitoring developments to gauge potential supply disruptions. Moreover, the threat of reimposing the ban on Venezuelan oil adds another layer of uncertainty to the market.
DAX
- Finalized Eurozone inflation numbers suggest a potential June ECB rate cut, as the annual core inflation rate softened from 3.1% to 2.9%, and the overall inflation rate decreased from 2.6% to 2.4%.
- Despite the inflation data, ECB member forward guidance on interest rates continues to fuel expectations of a June rate cut, prompting investors to adjust their strategies accordingly.
- Investors are advised to pay attention to ECB commentary, particularly from Executive Board member Luis de Guindos, as increasing support for a July rate cut could influence buyer demand for DAX-listed stocks.
- Additionally, comments from ECB President Christine Lagarde and Executive Board member Piero Cipollone at the G20 meeting may provide insights into future monetary policy decisions.
- Earnings reports from major companies like L’Oreal, Danone, and Sartorius AG will also be significant for investors, as they may impact market sentiment and stock performance in the DAX index.
| SMA (20) | Rising |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: The finalized Eurozone inflation numbers and forward guidance from ECB members have heightened expectations of a June rate cut, influencing investor sentiment toward DAX-listed stocks. As attention shifts to ECB commentary and the G20 meeting, along with earnings reports from key companies, market participants will closely monitor developments that could impact the performance of the DAX index.