EURUSD
- EUR/USD Momentum: The EUR/USD pair retreated to 1.1120 during the early European session on Wednesday, ending a three-day winning streak as market sentiment shifted.
- Rehn’s Commentary: Olli Rehn, a member of the European Central Bank (ECB), hinted at potential rate cuts in September due to increasing risks of economic weakness and negative growth in the euro area. This remark broke the recent silence from the ECB and introduced a cautious tone regarding the Eurozone's economic outlook.
- Bowman’s Commentary: Federal Reserve Governor Michelle Bowman expressed caution about altering the Fed’s current policy stance. On Tuesday, she highlighted ongoing upside risks to inflation, suggesting that the central bank may remain hesitant to make significant policy changes in the near term.
- Cautious Market Sentiment: A cautious mood in the markets, fueled by anticipation of the July Federal Open Market Committee (FOMC) Minutes to be released on Wednesday, provided some support for the US Dollar. Investors are closely watching for any signals about future policy direction.
- Key Events: Flash PMIs and Central Bank Speeches: Investors are keeping a close eye on the upcoming flash Purchasing Managers' Indexes (PMIs) from both sides of the Atlantic. Additionally, Fed Chair Jerome Powell's speech at Jackson Hole and Bank of Japan Governor Kazuo Ueda's testimony before Parliament are expected to provide further insights into global monetary policy trends.
| 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 faces a pullback as ECB rate cut hints and cautious Fed commentary weigh on sentiment. Investors will closely watch upcoming flash PMI data and central bank speeches, which are likely to provide crucial insights into the pair's near-term direction.
GBPUSD
- Current Trading: The GBP/USD pair paused its upward momentum, trading around 1.3020 during Wednesday's European session, following a four-day winning streak. This slight retreat comes as traders take a cautious approach ahead of key economic events.
- Technical Analysis: On the daily chart, the pair continues to trend upwards within an ascending channel pattern, indicating a bullish bias. This technical setup suggests that the pair may still have room to move higher, although market sentiment will play a crucial role in determining the next direction.
- Market Sentiment: Market sentiment remains positive, buoyed by expectations ahead of the release of key business activity survey results and the highly anticipated Jackson Hole Economic Symposium. Traders are closely watching these events for any potential shifts in economic outlook or central bank policy.
- UK PMI Figures Expectation: The UK Purchasing Managers Index (PMI) figures for August are expected to show a slight improvement. The Services PMI is forecasted to rise to 52.8 from 52.5, while the Manufacturing PMI is expected to hold steady at 52.1. These figures will be closely monitored as indicators of the UK's economic health.
- US PMI and Jackson Hole Symposium: The US PMI business activity survey results are scheduled for release on Thursday, alongside the kickoff of the annual Jackson Hole Symposium. The Symposium, which will run through the weekend, is expected to offer insights into the Federal Reserve's future policy direction, making it a key event for the markets.
| 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 faces a temporary pause in its upward trajectory as traders await crucial PMI data and the start of the Jackson Hole Symposium. The technical outlook remains bullish, but market sentiment and upcoming economic indicators will be pivotal in determining the pair's next move.
GOLD
- Gold Price: Gold price remains on the front foot, trading above $2,510 during Wednesday’s Asian session, consolidating after a surge to a new all-time high of $2,532. The precious metal continues to benefit from ongoing bullish momentum.
- Wall Street Indices: Wall Street indices snapped their longest rally of the year as investors opted for profit-taking ahead of the Federal Reserve's Minutes release later today. This pullback in equities hasn't negatively impacted gold, which remains resilient near its record highs.
- US Dollar: The US Dollar has been unable to capitalize on the prevailing risk-aversion, which has helped sustain the USD-denominated gold price. Speculation over an imminent Fed rate cut in September and lingering geopolitical risks in the Middle East continue to underpin gold's appeal as a safe haven.
- Fed Rate Cut: According to the CME Group’s FedWatch tool, markets are currently pricing in a 69.5% probability of a 25 basis points (bps) interest-rate cut at the Federal Reserve's September policy meeting, with a 30.5% chance of a 50-bps cut. These expectations are helping to maintain strong demand for gold.
- World Gold Council Report: The World Gold Council (WGC) reported strong buying interest from jewelry retailers and consumers, particularly after India's recent import tax cut on Gold. This move triggered a downtick in prices, fueling demand and contributing to the metal's robust performance.
Closing statement: The XAU/USD pair consolidates near record highs above $2,510, driven by expectations of a Fed rate cut and strong demand fuelled by India’s tax cut on gold imports. The metal's performance will remain closely tied to upcoming Fed Minutes and geopolitical developments, with the potential for further gains if market sentiment favors gold as a safe haven.
CRUDE OIL
- WTI Crude Oil Prices: West Texas Intermediate (WTI) US crude oil prices continue to trade with a mild negative bias below the $73.00 mark during Wednesday's European session. The commodity remains near the two-week low touched the previous day, reflecting subdued market sentiment.
- Middle East Situation: Concerns over potential supply disruptions from the Middle East have eased following US Secretary of State Antony Blinken's statement on Monday. He mentioned that Israeli Prime Minister Benjamin Netanyahu accepted a proposal aimed at resolving disagreements that were blocking a ceasefire deal in Gaza.
- API Reports: American Petroleum Institute (API) figures released on Tuesday indicated a rise in US crude oil stocks by 347,000 barrels for the week ending August 16. This increase suggests an oversupply situation in the world's largest oil-consuming nation, adding downward pressure to crude prices.
- USD Selling: The prevalent US Dollar (USD) selling bias, driven by growing expectations that the Federal Reserve (Fed) will begin its rate-cutting cycle in September, could lend some support to Crude Oil prices. This dynamic may help to limit further losses for the commodity.
- EIA Inventory Data: Traders are now eyeing the official inventory data from the US Energy Information Administration (EIA), which is scheduled for release later today. The report will be closely monitored for further insights into US crude oil stock levels and could influence short-term price movements.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: WTI crude oil trades under pressure below $73.00, weighed down by increased US stockpiles and easing Middle East supply concerns. However, a weaker USD and anticipation of EIA inventory data could offer some support, potentially limiting the downside risk. Traders will closely watch the upcoming data for further direction.
DAX
- DAX price: DAX closed down by 0.35% on Tuesday, ending its ten-session winning streak. The downturn was led by Siemens Energy, which contributed to a broad market retreat, signaling a cautious mood among investors.
- German Producer Prices: On Tuesday, German producer prices fell by 0.8% year-on-year in July, following a more significant decline of 1.6% in June. The less pronounced drop suggests an improving demand environment, providing a slight cushion for the German economy.
- Eurozone Inflation: The annual inflation rate for the Eurozone rose from 2.5% in June to 2.6% in July. This increase could potentially impact the European Central Bank’s (ECB) monetary policy decisions, as rising inflation might influence the ECB's rate path moving forward.
- US Labor Market and Fed: On Wednesday, the market's attention will pivot to the US labor market and the Federal Reserve (Fed) as the Jackson Hole Symposium approaches. This event is highly anticipated by investors seeking clues on the Fed's future policy direction.
- FOMC Meeting Minutes: Investors are also awaiting the release of the FOMC Meeting Minutes from the July 30-31 meeting, which will be published after the European market close. The minutes could provide critical insights into the Fed's outlook on interest rates and economic conditions.
| 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: DAX halted its impressive run, closing lower amid cautious trading led by Siemens Energy. With German producer prices showing signs of stabilization and Eurozone inflation ticking up, attention now shifts to the US labour market and Fed's upcoming moves. The release of FOMC Meeting Minutes later today will be crucial for setting the tone in the days ahead.