EURUSD
- EUR/USD Slight Decline: EUR/USD moved slightly lower on Friday, though there was minimal follow-through selling pressure, signalling limited downside momentum.
- Fed Rate Cut Sentiment: While several Federal Reserve officials lean towards a 25- basis-point rate cut next month, notable voices like FOMC Governor Michelle Bowman and Atlanta Fed President Raphael Bostic have expressed some hesitancy, indicating potential divergence in policy direction.
- ECB’s Cautious Stance: ECB President Christine Lagarde highlighted on Wednesday the bank's need for caution in future rate decisions, reiterating a data-dependent approach.
- Holzmann’s statement: ECB policymaker Robert Holzmann suggested a quarter-point rate cut in December is probable, though other ECB members offered varying opinions.
- Diverse ECB Perspectives on Rates: Bostjan Vasle voiced support for "measured" cuts, emphasizing the risks of undershooting the inflation target or stimulating growth too soon. Joachim Nagel also called for caution, emphasizing that the ECB should continue its inflation fight despite lower inflation in September.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: EUR/USD remains in a consolidation phase with mixed outlooks from both Fed and ECB officials shaping future rate expectations. Traders may continue to monitor policy commentary and economic data for directional cues amid policy uncertainty.
GBPUSD
- GBP/USD Price: The GBP/USD pair dips into the red, trading just above 1.2950 on Friday morning as bullish momentum wanes in response to weak UK data and stronger US indicators.
- Technical Correction: The pair is in a corrective phase following a notable rally that pushed prices close to the 1.3300 mark earlier in October. The current consolidation reflects investor caution amid shifting economic data.
- UK PMI: UK PMI figures released on Thursday underperformed, though Services and Manufacturing PMI components stayed above contractionary levels. The numbers underscore economic resilience but raise concerns about UK growth potential.
- US PMI: Strong US PMI data beat forecasts, stabilizing US Dollar performance and keeping GBP/USD capped near the 1.3000 mark. US Manufacturing PMI in October increased to 47.8, showcasing industrial resilience amid global pressures.
- US Data: With no significant UK data releases on Friday, traders will look to US Durable Goods Orders and 5-Year Consumer Inflation Expectations from the University of Michigan for fresh direction.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: The GBP/USD pair remains in a technical correction as markets digest recent PMI figures and anticipate US economic data releases. Sentiment hinges on US Dollar strength and investor response to evolving global economic indicators.
GOLD
- Gold Price: Gold price attracts sellers on Friday, moving lower as a modest USD uptick weigh on demand. Expectations for smaller Fed rate cuts support the USD, adding downside pressure to XAU/USD.
- US Corporate Earnings: Recent US earnings reports influence risk sentiment, affecting both the safe-haven USD and gold price. Strong corporate performance could shift investor interest away from gold in the near term.
- Political Risk: Market speculation favors a Trump victory in the upcoming US presidential election, with anticipated trade and fiscal policies potentially boosting inflation. Investors could see gold as an inflation hedge if these inflationary expectations rise.
- Middle East Tensions: Continued conflict in the Middle East—with Israel intensifying its military actions against Hezbollah in Lebanon and in Gaza—bolsters gold’s appeal as a safe-haven asset amid rising geopolitical risks.
- US Economic Data: The release of US Durable Goods Orders and Michigan Consumer Sentiment figures later today could impact expectations for Fed rate cuts and influence USD value, subsequently impacting XAU/USD sentiment.
Closing statement: Gold price remains vulnerable amid a strong USD and expectations of Fed rate decisions but could find support if Middle East tensions escalate or US political risks fuel inflationary expectations.
CRUDE OIL
- WTI Edges Higher: West Texas Intermediate (WTI) Crude Oil price shows modest recovery on Friday, trading around $70.40 per barrel after two consecutive days of losses.
- High Stockpiles: Crude is on track for a slight weekly gain, though further upward movement is limited by a larger-than-expected build in US crude stockpiles. Increased imports and an unexpected boost in gasoline inventories—due to refineries increasing production post-maintenance—have pressured prices.
- Geopolitical Development: Rising Middle East tensions and upcoming Gaza ceasefire discussions add a cautious tone to the market. Statements from US Secretary of State Antony Blinken and France’s call for a ceasefire reflect ongoing geopolitical risks. Oil traders remain wary, as further escalation could disrupt supply, while diplomatic actions may alleviate some immediate risks.
- Demand Concerns: Saudi Arabia reported its lowest oil export revenue in over three years, primarily due to sluggish global demand. This slowdown dampens the broader crude oil market outlook, especially if demand growth remains weak.
| SMA (20) | Slightly 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: Crude oil prices find support from geopolitical risks but face headwinds from high stockpiles and sluggish demand growth. Oil could see further movement based on Middle East developments and potential diplomatic outcomes in ceasefire talks.
DAX
- DAX Recovers: The DAX rose by 0.34% on Thursday, ending a three-day losing streak after a 0.23% drop the day prior. Stronger demand across key sectors, notably autos, contributed to this gain.
- Market Movers: Renault’s Q3 earnings beat estimates, which had a positive spillover effect on German automakers. Volkswagen surged by 2.13%, while Mercedes-Benz Group and BMW also advanced, gaining 1.44% and 1.22% respectively.
- Mixed Signals from Eurozone PMIs: Euro area PMIs saw modest improvement, with the Composite PMI edging up to 49.7 in October from 48.6 in September, still signaling a contraction. However, the HCOB Services PMI slipped unexpectedly from 51.4 to 51.2, underscoring persistent economic challenges.
- Upcoming Data: On Friday, the focus shifts to the German Ifo Business Climate Index, expected to tick up to 85.6 in October from 85.4 in September, potentially offering further insights into business sentiment and economic resilience.
- US Data: In the US, a decline in initial jobless claims and a small uptick in the S&P Global Services PMI reinforced expectations for a stable economic outlook, potentially affecting demand for risk assets.
