EURUSD
- EUR/USD Slight Pullback: The EUR/USD pair traded around 1.1080 during the European session on Tuesday, following a slight pullback from an eight-month high of 1.1087. The recent high reflects ongoing bullish sentiment in the market, though the pair faces potential consolidation.
- Fedspeak: Minneapolis Fed President Neel Kashkari indicated on Monday that it might be appropriate to discuss potential US interest rate cuts in September. His comments, reported by Reuters, are based on growing concerns about a weakening US labor market, adding weight to expectations of a dovish shift from the Fed.
- Jackson Hol Symposium: The Jackson Hole Economic Symposium begins on Thursday, kicking off a multi-day event that will gather central bankers and economists from around the world. Market participants are particularly focused on Fed Chair Jerome Powell's speech on Friday, which could provide crucial insights into the Fed's future policy direction.
- Eurozone Business Activity and Consumer Price Data: In the Eurozone, traders await key data on business activity and consumer prices that could influence the European Central Bank's (ECB) policy decision in September. The market will scrutinize these indicators to gauge the ECB’s potential response to inflationary pressures and economic growth concerns.
- HICP Data Release: The Harmonized Index of Consumer Prices (HICP) for the European Monetary Union will be released on Tuesday. This data is expected to shed light on inflation trends across the Eurozone and could be a significant factor in shaping the ECB's upcoming policy decisions.
| 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 remains near its eight-month highs, driven by dovish hints from Fed officials and anticipation surrounding upcoming economic events, particularly the Jackson Hole Symposium and key Eurozone data releases. The pair's future direction will likely be influenced by Fed Chair Jerome Powell’s speech and the latest Eurozone inflation figures, making these events critical for traders to watch.
GBPUSD
- Current Trading: The GBP/USD pair trades lower near 1.2980 during the early European session on Tuesday, ending its three-day winning streak. The decline follows a period of bullish momentum driven by positive sentiment and market positioning.
- UK Data and Rate Outlook: Recent UK inflation and employment reports have provided support for the Bank of England (BoE) to maintain the interest rate steady at 5.0% at its upcoming September meeting. The data suggests that inflationary pressures may be easing, reducing the urgency for further rate hikes.
- IBOSS Chief Economist Analysis: IBOSS Chief Economist Rupert Thompson commented that the BoE is most likely to leave rates unchanged at the September meeting, with the next potential rate cut possibly delayed until November. This outlook aligns with the current market consensus, reflecting expectations of a more cautious approach by the BoE.
- Chicago Fed President's Commentary: On the US side, Chicago Fed President Austan Goolsbee stated on Sunday that the US economy does not show signs of overheating, emphasizing that Fed officials should be cautious about maintaining a restrictive policy longer than necessary. This dovish tone may influence the GBP/USD dynamics, as market participants anticipate potential shifts in US monetary policy.
- Fedspeak: Later Tuesday, investors will closely monitor speeches from Fed officials Raphael Bostic and Michael Barr for further insights into the Fed’s policy outlook. Their comments could provide additional direction for the GBP/USD pair as traders assess the likelihood of future rate cuts.
| SMA (20) | Slightly 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 has softened near 1.2980, halting its recent upward momentum as traders digest mixed signals from both the BoE and the Fed. The pair's direction will likely hinge on upcoming Fed speeches and further economic data, with the potential for more volatility as markets weigh the prospects of rate adjustments from both central banks.
GOLD
- Gold Still Near All-Time Highs: Gold price remains stable at approximately $2,500 early Tuesday, maintaining a tight range near the all-time highs of $2,510. The precious metal continues to attract interest as traders keep an eye on global developments and central bank actions.
- Geopolitical Info: Geopolitical risks in the Middle East have diminished after reports indicated that Israeli Prime Minister Benjamin Netanyahu accepted a "bridging proposal" from Washington aimed at overcoming disagreements that had stalled a ceasefire deal in Gaza. This news has reduced the immediate safe-haven demand for gold.
- Sparse US Economic Data and PBOC's Rate Decision: With a data-light US economic calendar on Tuesday, gold prices remain largely unchanged. The market is digesting the People’s Bank of China (PBOC) decision to keep rates unchanged, which has had a limited impact on gold as traders await more significant events later in the week.
- Fed Rate Cut Expectations: Market participants are currently fully pricing in a 25 basis points (bps) rate cut by the Federal Reserve next month, with the chances of a 50-bps cut now off the table. This dovish outlook for US monetary policy is providing some support to gold prices, keeping them elevated.
- Caution Prevails: Traders are adopting a cautious stance, refraining from placing new bets on gold ahead of the release of the US Federal Reserve July meeting minutes and a speech by Fed Chairman Jerome Powell later this week. These events are expected to provide more clarity on the Fed's future policy direction, which could significantly influence gold's next move.
Closing statement: XAU/USD holds its ground around $2,500, with traders eyeing the upcoming Fed minutes and Powell's speech for potential cues on the future path of US monetary policy. The easing geopolitical tensions in the Middle East and the market's focus on the Fed's rate outlook suggest that gold may remain range-bound in the near term, but further catalysts could lead to volatility as the week progresses.
CRUDE OIL
- Price Decline: West Texas Intermediate (WTI) US crude Oil prices continue their downward trend for the third consecutive day on Tuesday, marking a decline for the fifth time in the past six days. During the Asian session, WTI prices dropped to their lowest level in nearly two weeks.
- Ceasefire Talks: Geopolitical tensions appear to be calming after US Secretary of State Antony Blinken announced that Israeli Prime Minister Benjamin Netanyahu had accepted a bridging proposal aimed at resolving disagreements that were blocking a ceasefire deal. This development has reduced immediate concerns over supply disruptions in the region.
- China’s Weak Fuel Demand: Chinese refineries have significantly reduced their crude processing rates in response to weak fuel demand, contributing to the downward pressure on crude prices. This reduction in demand from one of the world's largest oil consumers has impacted the overall market sentiment.
- US Dollar Weakness: The ongoing selling bias surrounding the US Dollar (USD), which recently dropped to a fresh multi-month low amid expectations of an imminent start to the Federal Reserve's (Fed) rate-cutting cycle, provides some support to crude oil prices. A weaker dollar generally makes commodities like oil cheaper for holders of other currencies.
- Caution Ahead: Traders are exercising caution, refraining from making aggressive directional bets ahead of key events this week. The FOMC minutes set to be released on Wednesday and Fed Chair Jerome Powell's speech on Friday are highly anticipated, as they could provide significant insights into the future of US monetary policy.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: WTI crude oil continues its slide, reaching a near two-week low as easing geopolitical tensions in the Middle East and reduced Chinese crude demand weigh on prices. However, the weaker US Dollar and anticipation of upcoming Fed communications might offer some support, suggesting that crude oil could remain under pressure with potential for volatility later in the week.
DAX
- Market Movers: Zalando SE emerged as the top performer on the DAX, rallying 3.02% as investor sentiment was buoyed by expectations of potential rate cuts from both the European Central Bank (ECB) and the Federal Reserve (Fed).
- Industrial Producer Prices Decline: Producer prices of industrial products in Germany were 0.8% lower in July 2024 compared to the same month last year. However, prices edged up 0.2% from June 2024, indicating some month-on-month price stability, according to data from the Federal Statistical Office (Destatis).
- Wage Growth and Inflation Data: The Eurozone's finalized inflation figures and wage growth data are key factors that could influence the ECB's future rate decisions. The annual inflation rate rose slightly to 2.6% in July from 2.5% in June. Economists also expect wage growth to have increased by 4.3% in Q2 2024, though this marks a slowdown from the 4.69% growth observed in Q1 2024.
- US Leading Economic Index (LEI): The US Conference Board Leading Economic Index (LEI) fell by 0.6% in July, following a 0.2% decline in June. This suggests a potential slowdown in US economic growth, which could influence global market sentiment and, in turn, impact DAX performance.
- FOMC Member Commentary: On Tuesday, investors should closely monitor commentary from FOMC members. Their views on the economic outlook, labor market conditions, and the future of the Fed's rate path may significantly influence buyer demand for DAX-listed stocks.
| 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 showed resilience, with Zalando SE leading gains as rate cut expectations provided a boost. However, ongoing economic data from both the Eurozone and the US will be critical in shaping the direction of the DAX, particularly as investors weigh the implications of inflation, wage growth, and potential changes in monetary policy.