EURUSD
- USD Index (DXY) Correction: The recent upward momentum in the Greenback experienced a sudden halt on Wednesday, leading to a meaningful correction to the 103.40 region when tracked by the USD Index (DXY). This correction was prompted by the bearish message conveyed by Federal Reserve Chairman Powell during his press conference following the Fed's decision to leave interest rates unchanged on Wednesday.
- Fed's Monetary Policy Outlook: The Federal Reserve signaled its intention to reduce interest rates until inflation reaches the 2% target. Notably, the Fed expects one rate cut in 2025 and has revised its median outlook for the Fed funds rate by the end of 2026 to 3.1%, up from the previous estimate of 2.9%.
- Chair Powell's Dovish Tone: During his press conference, Chair Powell adopted a dovish tone despite praising the economy's progress. He highlighted robust consumer demand and the ongoing recovery in the supply chain, signaling the Fed's commitment to accommodative monetary policy measures
- Market Outlook: The correction in the USD Index and Chair Powell's dovish remarks underscore the relatively sluggish fundamentals of the euro area compared to the resilient US economy. This reinforces expectations of a stronger Dollar in the medium term, particularly as both the European Central Bank (ECB) and the Federal Reserve potentially implement their easing measures almost simultaneously.
| SMA (20) | Rising |
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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 experienced fluctuations amid a correction in the USD Index driven by Chairman Powell's dovish remarks during the Federal Reserve's press conference. The Fed's commitment to accommodative monetary policy measures and its revised outlook for interest rates have reinforced expectations of a stronger Dollar relative to the Euro in the medium term.
GBPUSD
- Current Trading Position: GBP/USD is trading near the 1.2800 level, maintaining positive momentum during the early European session on Thursday. This upward movement is supported by a weaker US Dollar (USD) following Federal Reserve (Fed) Chair Powell's dovish press conference.
- Impact of Powell's Remarks: The rebound in the GBP/USD pair is largely attributed to the dovish tone struck by Fed Chairman Jerome Powell during the press conference. While Powell did not specify the timing of rate cuts, he hinted at expectations for interest rate reductions before the end of the year.
- Upcoming Events: Investors are eagerly awaiting the Bank of England (BoE) interest rate decision scheduled for Thursday, along with the release of the preliminary US S&P Global PMI for March.
- Rate Outlook: The BoE is widely expected to maintain its interest rates unchanged at 5.25% during Thursday's decision. Additionally, the CPI inflation data for February could influence the Bank of England's stance on potential interest rate cuts in the coming months.
- Market outlook: The GBP/USD pair is experiencing positive momentum amid a weaker US Dollar following dovish remarks from Fed Chairman Jerome Powell. Investors are closely monitoring upcoming events, including the Bank of England's interest rate decision and US PMI data, which could provide further direction to the currency pair. While the BoE is expected to hold rates unchanged, inflation data might influence future rate decisions.
| SMA (20) | Rising |
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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 maintains positive momentum near the 1.2800 level, supported by a weaker US Dollar in response to Powell's dovish remarks. The currency pair's trajectory will likely be influenced by the outcome of the Bank of England's interest rate decision and US PMI data, with inflation figures also playing a significant role in shaping future rate decisions.
GOLD
- Current Trading Position: Gold price (XAU/USD) has retreated from a fresh record high reached earlier on Thursday, but it is still holding above the $2,200 mark as the European session approaches.
- Impact of Fed's Projections: The Federal Reserve (Fed) projected a 75-basis point rate cut by the end of 2024 during its Wednesday meeting. This has kept the US Dollar (USD) depressed near a one-week trough, supporting gold prices for the second consecutive day.
- Influence of Risk-on Environment: Despite the supportive factors, the prevailing risk-on sentiment in the markets, evidenced by the continued bullish run-in global equity markets, is capping the upside potential for gold. Additionally, slightly overbought conditions on the daily chart are also contributing to this dynamic.
- Fundamental Backdrop: Despite the recent pullback, the fundamental backdrop suggests that the path of least resistance for XAU/USD remains to the upside. This implies that caution is warranted before taking any significant short positions in the near term.
- Upcoming Events: Traders are now turning their attention to the release of flash Purchasing Managers' Index (PMI) data for insights into global economic health. This data release could provide further impetus to the precious metal.
Closing statement: XAU/USD is currently holding above $2,200 despite a retreat from its recent record high. The outlook remains cautiously bullish, with the Fed's rate cut projections and global economic data releases influencing market sentiment. Traders should exercise caution and monitor key economic indicators for further guidance on gold prices.
CRUDE OIL
- Current Trading Position: West Texas Intermediate (WTI) US Crude Oil prices have attracted some dip-buying during the Asian session on Thursday, reversing a portion of the losses incurred in the previous session.
- Impact of Fed's Outlook: The Federal Reserve (Fed) maintained its outlook for three interest rate cuts this year at the conclusion of its March policy meeting on Wednesday. This stance is perceived as undermining the US Dollar (USD), which benefits USD-denominated commodities, including Crude Oil prices.
- Supply-Demand Dynamics: A larger-than-expected decline in US crude inventories, coupled with the potential for supply shocks stemming from geopolitical disruptions in Russia and the Middle East, suggests that the path of least resistance for Oil prices is to the upside.
- Upcoming Events: Market participants are now turning their attention to the release of flash Purchasing Managers' Index (PMI) data for insights into global economic health, which directly impacts fuel demand and consequently Crude Oil prices.
- Market Outlook: The fundamental backdrop appears to favor bullish sentiment, with the Fed's stance on interest rates, supply-side factors, and economic data releases influencing market dynamics. As a result, any significant corrective declines in Oil prices may be viewed as buying opportunities and are expected to remain limited.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: WTI Crude Oil prices have reversed some of the losses experienced in the previous session, buoyed by the Fed's outlook on interest rates and supply-demand dynamics. With geopolitical tensions and economic data releases on the horizon, the overall market sentiment remains bullish. Traders should monitor key indicators for further insights into Oil price movements.
DAX
- Producer Price Index (PPI) Data: On Wednesday, German producer prices recorded a decline of 4.1% year-on-year in February, following a 4.4% decrease in January. Economists had anticipated a 3.8% decline. Month-on-month, producer prices fell by 0.4%, contrasting with a 0.2% rise in January.
- Eurozone Consumer Confidence: Later in the session, Eurozone consumer confidence figures surpassed expectations. The Eurozone Consumer Confidence Indicator rose from -15.5 to -14.9 in March, beating forecasts of -15.0.
- ECB Commentary: Market sentiment was further bolstered by the European Central Bank (ECB) commentary supporting expectations of a June ECB rate cut. ECB President Christine Lagarde discussed the possibility of rate cuts in June, stating, "By June, we will have a new set of projections that will confirm whether the inflation path we foresaw in our March forecast remains valid."
- Upcoming Events: On Thursday, preliminary private sector Purchasing Managers' Index (PMI) data for Germany and the Eurozone will be released, warranting investor attention. A less significant contraction across the German and Eurozone private sectors could drive demand for DAX-listed stocks.
- Market Focus: In addition to economic indicators, investors will closely monitor the ECB Economic Bulletin and any further commentary from ECB officials for insights into future monetary 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 DAX experienced varied market influences, including PPI data, Eurozone consumer confidence, and ECB commentary. With upcoming releases of PMI data and continued focus on ECB communications, investors are attentive to signals regarding future economic conditions and potential monetary policy adjustments.