EURUSD
- Pair Movement: EUR/USD is holding onto gains above 1.0800, reaching two-week highs, supported by a weakening US Dollar.
- Dollar Weakness: The pair's upward movement is attributed to the broad weakness in the US Dollar, as investors are selling the currency amid speculation that the Federal Reserve will delay rate cuts.
- Market Speculation: Investors are contemplating the possibility of an initial rate hike in the June meeting, influenced by the ongoing speculation that the Federal Reserve might defer rate cuts.
- FOMC Meeting Minutes: Traders are awaiting the Federal Open Market Committee (FOMC) Meeting Minutes, scheduled for release on Wednesday. These minutes are anticipated to provide insights into the central bank's considerations that led to dismissing a March rate cut.
- Macroeconomic Data: The macroeconomic calendar has seen relatively light activity. The EU's December Current Account reveals an improved surplus of €31.9 billion, compared to the previous €22.5 billion. Construction Output for the same period rose 0.8% MoM, up from 0.4% in November.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The EUR/USD pair maintains a strong position above 1.0800, benefiting from a weakened US Dollar. Investor focus remains on the upcoming FOMC Meeting Minutes, which could offer valuable insights into the Federal Reserve's stance on rate cuts. Additionally, positive EU economic indicators contribute to the pair's resilience.
GBPUSD
- Steady Upside: GBP/USD is maintaining its renewed upside trend, holding above 1.2600 in early European trading.
- Support from Comments: The pair is finding support from hawkish comments made by Bank of England (BoE) Governor Andrew Bailey, along with the sustained weakness in the US Dollar.
- BoE Testimony: BoE Governor Bailey, Deputy Governor Ben Broadbent, and MPC members Swati Dhingra and Megan Greene are scheduled to testify before the UK Treasury Select Committee, providing potential insights into the central bank's monetary policy outlook.
- Market Expectations: Goldman Sachs suggests a shift in expectations, anticipating the BoE to lower the policy rate in June rather than May, influencing market sentiment.
- Upcoming Focus: Attention now turns to the release of the Federal Reserve (Fed) Minutes and speeches from both BoE and Fed officials, which will likely guide future trading decisions.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: GBP/USD exhibits a steady upside movement above 1.2600, supported by hawkish BoE comments and ongoing weakness in the US Dollar. The upcoming BoE testimony and the shift in rate cut expectations add layers of complexity to the market dynamics, and investors await further guidance from the Fed Minutes and central bank speeches.
GOLD
- Multi-Day Highs: Gold price is positioned at multi-day highs, reaching near $2,030, marking a significant move after achieving a daily closing above the 21-day Simple Moving Average (SMA) at $2,023.
- US Dollar Influence: The recent decline in the US Dollar is a contributing factor, fueled by renewed concerns about a potential government shutdown in the United States unless a budget or spending stopgap is passed by March 1.
- Anticipation of Fed Minutes: Gold is capitalizing on the sustained weakness in the US Dollar and awaits the release of the Federal Reserve's (Fed) January meeting Minutes, seeking insights into the potential timing of the first-rate cut this year.
- Market Sentiment Drivers: With no high-impact US economic data releases on Tuesday, attention turns to the earnings results from tech giant Nvidia on Wednesday, which could significantly impact market sentiment.
- Scheduled Appearances: Scheduled appearances by Atlantic Fed President Raphael Bostic and Fed Governor Michelle Bowman later on Wednesday are expected to provide further insights, influencing considerations for gold traders.
Closing statement: Gold maintains multi-day highs, benefiting from a weakened US Dollar driven by concerns about a government shutdown. The focus now centers on the impending release of the Fed's Minutes and key earnings results, while scheduled appearances by Fed officials add an additional layer of influence on Gold's trajectory.
CRUDE OIL
- Current Trading Levels: Western Texas Intermediate (WTI), the US crude oil benchmark, is currently trading around $77.50 on Wednesday, reflecting the latest pricing dynamics.
- IEA's Demand Growth Revision: Last week, the International Energy Agency (IEA) revised downward its 2024 oil demand growth prediction. The IEA's expectation is now for global oil demand to grow by 1.22 million barrels per day (bpd) this year, significantly lower than OPEC's forecast of 2.25 million bpd.
- Geopolitical Tensions in the Middle East: The escalating geopolitical conflict in the Middle East is seen as a factor that could potentially lift crude oil prices and act as a mitigating factor against a significant downside.
- Data Monitoring: Oil traders are closely monitoring key indicators, including the EIA Crude Oil Stocks Change and API Weekly Crude Oil Stock, scheduled for release on Wednesday and Thursday, respectively. These data points provide insights into inventory levels and market dynamics.
- FOMC Minutes Impact: The market's attention is also directed toward the release of the FOMC Minutes on Wednesday, which is expected to offer insights into the potential path of interest rate cuts and the current policy stance of the US Federal Reserve (Fed).
| 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: WTI crude oil maintains its position around $77.50 amid multiple influencing factors. The downward revision in the IEA's demand growth forecast contrasts with potential geopolitical tensions in the Middle East, while market participants await crucial data releases and insights from the FOMC Minutes for a comprehensive understanding of the market direction.
DAX
- Chinese Economy Concerns Impact: Buyer demand for riskier assets faced a test on Tuesday due to concerns about the Chinese economy. The People's Bank of China (PBoC) implemented a 25-basis points reduction in the 5-year loan prime rate, but market focus remains on potential fiscal stimulus from Beijing to bolster economic resilience.
- Wage Growth Impact on ECB Rate Cut Bets: Negotiated wage growth numbers for the Eurozone have influenced market bets on an April ECB rate cut. Softer wage growth is seen as a factor that could impact consumer spending and potentially dampen demand-driven inflation.
- Upcoming Consumer Confidence Data: Wednesday's release of consumer confidence numbers for the Eurozone is anticipated to draw investor interest. Economists expect the Eurozone Consumer Confidence Index to increase from -16.1 to -15.6 in February.
- ECB Commentary Influence: Investors are advised to closely monitor ECB commentary. ECB Executive Board members Edouard Fernandez-Bollo and Anneli Tuominen are scheduled to speak on Wednesday, and their remarks could provide insights into the central bank's stance on monetary policy.
- Corporate Earnings Impact: Corporate earnings will play a crucial role in influencing market dynamics. Notable names like Fresenius SE are among the companies releasing earnings on Wednesday, and these reports could significantly impact investor sentiment.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: DAX faces challenges amid concerns about the Chinese economy, influencing risk appetite. Wage growth dynamics impact ECB rate cut expectations, while upcoming consumer confidence data, ECB commentary, and corporate earnings reports will be pivotal in shaping market trends in the coming sessions.