EURUSD
- Current Movement of EUR/USD Pair: The EUR/USD pair is showing signs of upward movement during the Asian session on Wednesday. It appears to have rebounded from a two-day decline, reaching around the 1.0835 region after hitting nearly a two-week low in the previous session.
- Caution in Bullish Trades: Despite the uptick, the technical setup suggests caution for bullish trades, especially with the Federal Reserve's policy decision looming.
- Lack of Follow-Through Buying: There is a lack of follow-through buying in spot prices, indicating that traders are hesitant to make aggressive bets. Instead, they prefer to remain on the sidelines ahead of the highly anticipated two-day Federal Open Market Committee (FOMC) policy meeting scheduled for later in the day.
- Expectations for the Fed Decision: The Fed is widely expected to maintain interest rates at their current levels, which are historically high. However, there are expectations that the Fed might revise its projection for rate cuts in 2024, possibly reducing the number from three to two, given the persistently high inflation levels.
- Focus on "Dot Plot" and Powell's Remarks: Market focus will primarily be on the "dot plot," which illustrates the future rate path as envisioned by Fed officials. Alongside this, investors will closely scrutinize the remarks made by Fed Chair Jerome Powell during the press conference following the policy decision. Any cues regarding the future trajectory of interest rates could significantly impact the EUR/USD pair.
| 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 EUR/USD pair is experiencing some upward movement, rebounding from recent lows, but traders are exercising caution ahead of the Federal Reserve's policy decision. With expectations for the Fed to maintain interest rates but potentially adjust its rate-cut projections for 2024, the focus remains on the "dot plot" and Jerome Powell's comments for insights into the future rate path and potential market impacts.
GBPUSD
- Early Movement of GBP/USD Pair: GBP/USD underwent testing around the 1.2700 level during the early European session on Wednesday but managed to maintain its position above that threshold.
- UK CPI Inflation Data: Recent data from the UK revealed that the annual Consumer Price Index (CPI) inflation rate decreased to 3.4% in February from 4% in January. This figure came in below market expectations, which had anticipated a rate of 3.6%.
- Impact of Broad-Based USD Strength: The pair continues to face pressure from the overall strength of the US Dollar (USD) ahead of upcoming policy meetings by both the Federal Reserve (Fed) and the Bank of England (BoE).
- Focus on Bank of England (BoE) Meeting: Investors are keenly awaiting the outcome of the Bank of England's monetary policy meeting scheduled for Thursday, anticipating potential market-moving developments. It's widely expected that the BoE will maintain interest rates at their current levels.
- BoE Governor's Remarks: BoE Governor Andrew Bailey, following the February meeting, noted positive developments in inflation trends over recent months. However, he emphasized the need for further evidence that inflation is moving closer to the 2% target before considering any adjustments to interest rates.
| 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: GBP/USD faced testing around the 1.2700 level but held firm above it during the early European session. The pair remains influenced by the recent UK CPI inflation data, which fell below market expectations. With the focus now shifting to the upcoming Bank of England meeting and expectations of no change in interest rates, investors are closely monitoring any developments regarding inflation and central bank policy guidance.
GOLD
- Tuesday's Movement: On Tuesday, the price of Gold experienced a decline, initially rebounding before settling near $2,158 after falling as low as $2,148. This downturn was primarily attributed to renewed buying interest in the US Dollar.
- Continued Replication of Tuesday's Move: During the early Asian trading session on Wednesday, the price action of gold mirrors that of Tuesday, with buyers maintaining cautiousness following the late rebound.
- Awaiting Federal Reserve (Fed) Interest Rate Decision: The current market sentiment reflects a state of calmness as traders await the upcoming Federal Reserve (Fed) interest rate decision. This anticipation has led gold traders to adopt a sideline stance, refraining from initiating new positions on the precious metal.
- Market Expectations for Fed Rate Cut: Market participants are currently pricing in approximately a 60% probability of a rate cut by the Fed in June. However, uncertainties linger, especially considering the December Fed Dot Plot chart, which suggests three potential rate cuts. The Fed's outlook on interest rate adjustments will be closely scrutinized.
- Impact of Fed Chair Jerome Powell's Comments: Attention is also directed towards Fed Chair Jerome Powell's remarks during the post-policy meeting press conference. His comments have the potential to influence the value of the US Dollar and, consequently, the price of Gold, given Gold's status as a non-interest-bearing asset.
Closing statement: The Gold market witnessed a decline on Tuesday, followed by a tentative rebound, as traders await the Federal Reserve's interest rate decision. With market sentiment reflecting caution and uncertainties regarding the Fed's stance on rate adjustments, gold traders are exercising restraint until further clarity emerges from the central bank's announcements and subsequent remarks by Fed Chair Jerome Powell.
CRUDE OIL
- Wednesday's Movement: West Texas Intermediate (WTI) oil price experienced a slight decline, nearing $82.70 per barrel, during the Asian trading hours on Wednesday. This correction in Crude oil prices follows recent highs, as investors opt to book profits.
- Cautious Stance Ahead of Fed Decision: The market has adopted a cautious stance in anticipation of the upcoming interest rate decision by the US Federal Reserve. This sentiment has contributed to the moderation in Crude oil prices.
- Impact of Ukraine's Drone Strikes: Analysts have underscored the significance of Ukraine's drone strikes on Russian oil refineries, which represent approximately 10% of Russia's total oil processing capacity. These strikes have added a layer of geopolitical uncertainty to the Crude oil market dynamics.
- American Petroleum Institute (API) Report: The American Petroleum Institute released its Weekly Crude Oil Stock report for the week ending on March 15. The report indicated a decrease in crude oil stock by 1.519 million barrels, contrasting with expectations of an increase by 0.077 million barrels. This unexpected decline follows a previous decrease of 5.521 million barrels.
- Export Reductions by Iraq and Saudi Arabia: Iraq has announced its intention to reduce crude oil exports to 3.3 million barrels per day (bpd) in the coming months to comply with its OPEC+ quota. Additionally, Saudi Arabia has witnessed a consecutive monthly decline in crude exports, further impacting the global Crude oil supply dynamics.
| 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: Crude oil prices experienced a slight decline in Asian trading on Wednesday, with investors opting to secure profits amidst a cautious market sentiment ahead of the US Federal Reserve's interest rate decision. Geopolitical tensions, notably Ukraine's drone strikes on Russian oil refineries, and unexpected inventory dynamics, as highlighted by the API report, continue to influence Crude oil market dynamics alongside efforts by major oil-producing nations such as Iraq and Saudi Arabia to adjust their export strategies.
DAX
- Tuesday's Developments: The German ZEW Economic Sentiment Index experienced a notable increase, rising by 19.9 points to reach 31.7 in March. Similarly, the Eurozone Index surged from 25.0 to 33.5, surpassing economists' forecasts of 20.5 and 28.0, respectively. This improvement in investor sentiment toward both the German and Eurozone economies bolstered demand for DAX-listed stocks.
- ECB Commentary: Market sentiment was further uplifted by market-friendly commentary from the European Central Bank (ECB). ECB member Martins Kazaks expressed support for the current market pricing regarding potential ECB interest rate cuts, contributing to positive market sentiment.
- Wednesday's Agenda: Early in the European session on Wednesday, investor attention will be drawn to German producer prices. Economists anticipate a year-on-year decline of 3.8% in producer prices for February, following a 4.4% decrease in January. Later in the session, Eurozone consumer confidence numbers will be released, with economists expecting an improvement in the Consumer Confidence Index from -15.5 to -15.0.
- Upcoming Speeches: ECB President Christine Lagarde and Chief Economist Philip Lane are scheduled to deliver speeches, adding to the market's focus on ECB-related developments.
| 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 witnessed positive momentum on Tuesday, fuelled by better-than-expected economic sentiment indicators for Germany and the Eurozone. Market-friendly commentary from ECB member Martins Kazaks further supported investor sentiment. Looking ahead, market participants will closely monitor German producer prices and Eurozone consumer confidence data, alongside speeches by ECB officials, for further insights into the economic outlook and potential market trends.