EURUSD
- EUR/USD Movement: The EUR/USD pair surged to its year-to-date highs, approaching 1.1050 during early European trading on Monday. This rally reflects a continued bullish trend, driven by favorable market sentiment towards the Euro.
- US Economic Data: Recent US economic data have played a significant role in this upward movement. Retail Sales figures exceeded expectations, while both the Producer Price Index (PPI) and Consumer Price Index (CPI) indicated that inflation is easing.
- Daly’s Commentary: Comments from key Federal Reserve officials have further influenced the EUR/USD dynamics. San Francisco Fed President Mary Daly highlighted the need for a gradual reduction in interest rates, signaling a more cautious approach from the US central bank.
- Goolsbee’s Commentary: Chicago Fed President Austan Goolsbee cautioned against maintaining a restrictive monetary policy for too long, hinting at potential rate cuts soon.
- Goolsbee’s Commentary: Chicago Fed President Austan Goolsbee cautioned against maintaining a restrictive monetary policy for too long, hinting at potential rate cuts soon.
| 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 is benefiting from a combination of easing US inflation and cautious rhetoric from the Federal Reserve, which are weighing on the US Dollar. Meanwhile, the Euro gains additional support from the ECB's hesitance to signal imminent rate cuts. Going forward, the pair could continue to test higher levels if the current trends persist, particularly if the ECB remains ambiguous on its rate path and the Fed continues to signal a dovish stance.
GBPUSD
- GBP/USD Momentum: The GBP/USD pair extended last week’s breakout momentum, reaching a one-month peak around mid-1.2900s during the European session on Monday. This rally signifies continued strength in the British Pound and hints at sustained bullish sentiment among traders.
- Technical Trigger: The strong move up is largely supported by a recent bounce from the 200-day Simple Moving Average (SMA), a key technical level. This bounce is likely acting as a fresh trigger for bullish traders, reinforcing the positive outlook for GBP/USD.
- UK Macro Data: The British Pound (GBP) gains additional support from last week’s relatively stronger UK macroeconomic data. The data points to a resilient UK economy, which may have diminished expectations for another Bank of England (BoE) interest rate cut in September, boosting investor confidence in the Pound.
- Risk-On Environment: The risk-on environment in the markets is also contributing to GBP/USD’s upward momentum by holding back demand for the safe-haven US Dollar. This dynamic further favors the British Pound, as traders avoid bullish bets on the Greenback.
- Upcoming Focus: Traders will closely monitor the release of the FOMC meeting minutes on Wednesday, followed by flash global PMIs on Thursday.
| SMA (20) | Slightly Falling |
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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 is currently enjoying robust bullish momentum, driven by strong technical support, resilient UK economic data, and a favourable risk-on market environment. As traders look ahead to key upcoming events, including the FOMC meeting minutes and global PMIs, the pair may continue to climb, especially if the risk sentiment remains positive and UK data continues to impress.
GOLD
- Gold Price All-Time Highs: The Gold price is battling the $2,500 level early Monday, having refreshed all-time highs at $2,510. This marks a significant milestone as the precious metal continues to attract strong demand amidst market uncertainties.
- Weekly Surge: Gold witnessed a steep rise during the second half of Friday’s trading session, with the price gaining as much as 3% on the week. This surge underscores the growing investor interest in Gold as a safe-haven asset.
- Dovish Fed Comments: Dovish comments from Chicago Fed President Austan Goolsbee played a key role in supporting gold’s rise. Goolsbee cautioned that keeping the restrictive policy in place longer than necessary could be detrimental, which fueled speculation of a more dovish approach from the Federal Reserve, thereby boosting gold prices.
- Geopolitical Tensions and Technical Outlook: Renewed geopolitical tensions have kept gold's retracement limited, as investors continue to seek safety in the precious metal. Additionally, technical indicators on the daily time frame suggest that more upside is likely in the near term, further supporting the bullish outlook for gold.
- Profit-Taking and Upcoming Fed Events: Despite the bullish momentum, gold traders are taking profits, repositioning ahead of key events this week, including the US Federal Reserve Minutes of the July meeting and Chairman Jerome Powell’s speech.
Closing statement: Gold price continues to exhibit strong bullish momentum, hitting fresh all-time highs and benefiting from both dovish Fed comments and renewed geopolitical tensions. While some traders are taking profits ahead of critical Fed events later this week, the technical outlook remains favourable, suggesting that XAU/USD could see further gains in the near term, especially if dovish expectations for Fed policy persist.
CRUDE OIL
- Current Price: West Texas Intermediate (WTI) Oil prices remain steady around $75.10 per barrel during the European session on Monday. The market is experiencing mixed influences that keep the prices within a narrow range.
- Weaker Chinese Demand Concerns: Crude Oil prices are under downward pressure due to concerns over weaker demand from China, the world’s top Oil importer. Recent data showed China's Industrial Production grew by 5.1% year-on-year in July, which was below the expected 5.2% and a slowdown from the previous month’s 5.3% growth. This has raised concerns about the sustainability of China’s demand for Oil, contributing to the bearish sentiment.
- Geopolitical Tensions Support Oil Prices: On the other hand, rising geopolitical tensions in the Middle East are providing support to Oil prices. The Hamas’s rejection of a ceasefire deal on Sunday has escalated concerns about potential supply disruptions in the region, which could lead to an increase in Oil prices.
- Fed Rate Cut Expectations: The potential downside for Oil is likely to be limited by rising expectations of an interest rate cut by the Federal Reserve (Fed) starting in September.
- Fedspeak: Federal Reserve Bank of San Francisco President Mary Daly emphasized on Sunday that the US central bank should take a gradual approach to reducing borrowing costs, as reported by the Financial Times. This dovish stance from the Fed could weaken the US Dollar, providing additional support for Oil prices.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Rising |
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Closing statement: Crude Oil prices are currently navigating a complex environment of weak Chinese demand, Middle East geopolitical tensions, and potential Fed rate cuts. While concerns about China’s economic slowdown are applying downward pressure, geopolitical risks and expectations of a more accommodative Fed policy are likely to provide a cushion, keeping WTI Oil prices relatively stable with a potential for modest appreciation in the near term.
DAX
- Market Movers: Bayer shares skyrocketed by 10.35%, topping the DAX index, as investors reacted positively to a favorable court ruling in the US regarding its Roundup weed killer. The legal victory boosted investor confidence, leading to a significant rally in the stock.
- Auto Stocks Gain: Auto stocks were among the notable gainers, with Mercedes-Benz Group rising by 0.84% and Daimler Truck Holding advancing by 0.74%. The increase in these stocks reflects growing optimism that the Federal Reserve will cut interest rates, which could prevent a downturn in demand, especially in the economically sensitive automotive sector.
- US Market Sentiment: On Friday, the Michigan Consumer Sentiment Index rose from 66.4 in July to 67.8 in August, bolstering expectations that the US economy could achieve a soft landing without slipping into recession. This positive sentiment has eased fears of a significant slowdown, further supporting European markets, including the DAX.
- Upcoming Influences: Looking ahead to Monday, the US Conference Board Leading Index is anticipated to influence market risk sentiment. Economists predict a 0.3% decline in July, following a 0.2% decrease in June. The release of this data will be closely watched by investors as it could provide further insights into the trajectory of the US economy.
- FOMC Commentary: Investors should also pay attention to FOMC member commentary, especially as the Jackson Hole Symposium approaches. FOMC voting member Christopher Waller is scheduled to speak, and his comments could offer clues about the Fed’s future monetary policy direction.
| SMA (20) | Slightly Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX is currently riding a wave of optimism driven by Bayer's legal victory, gains in auto stocks, and positive US consumer sentiment, all of which have eased fears of an economic downturn. As the week progresses, market participants will be closely monitoring US economic indicators and FOMC commentary for further cues, which could determine the next directional move for the DAX.