EURUSD
- EUR/USD Price: EUR/USD trades below 1.0500 on Monday, recovering from its two- year low of 1.0332. The pair's rebound is supported by US Dollar weakness following Donald Trump's announcement of Scott Bessent as his Treasury Secretary nominee.
- Diverging PMI Data: The S&P Global US Composite PMI rose to 55.3 in November, marking the strongest private sector activity growth since April 2022. In contrast, Eurozone PMI data highlighted significant weakness, with the HCOB Flash Eurozone Composite PMI dropping to 48.1, signalling a sharp contraction in economic activity.
- Eurozone Economic Weakness: The dismal Eurozone PMI results have amplified concerns about the region's economic fragility, pressuring the Euro. The data also suggests a challenging outlook for business activity as economic conditions remain subdued.
- ECB Rate Cut Expectations: Market expectations for a 50-bps rate cut by the European Central Bank have risen significantly, now exceeding 50%, compared to less than 20% before the PMI release. This anticipated policy shift could further weigh on the Euro in the near term.
- US Dollar Trends: The US Dollar faces headwinds despite strong economic data, as markets assess potential policy direction under Scott Bessent's anticipated leadership at the US Treasury Department. This dynamic provides temporary relief to the EUR/USD pair.
| 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: While the EUR/USD has staged a short-term recovery, diverging economic conditions and rising ECB rate-cut expectations continue to weigh on the Euro. The pair remains vulnerable to further downside risks if Eurozone economic data continues to underperform.
GBPUSD
- GBP/USD Rebounds: GBP/USD trades near 1.2600 on Monday, opening with a bullish gap. The pair is supported by reduced expectations of a December rate cut by the Bank of England (BoE), following last week's data indicating stronger underlying price growth in the UK.
- BoE Policy Outlook: The British Pound remains buoyant as markets scale back bets on a near-term BoE rate cut. Recent inflation data underscores persistent price pressures, lending support to the central bank's cautious approach to monetary easing.
- Limited Data: UK economic releases are sparse early in the week, with the focus on Deputy Governor Clare Lombardelli’s speech and the Confederation of British Industry (CBI) Distributive Trades survey. These events may provide further clues about the BoE's policy direction.
- US Dollar Weakness: The US Dollar Index (DXY) retreats from its two-year high as traders book profits, offering GBP/USD some upward momentum. However, market optimism about Donald Trump's proposed fiscal expansion could limit the USD's downside, posing a potential cap on the pair's gains.
- Market Sentiment: Expectations of inflationary pressure from US fiscal policies have kept the Fed cautious about aggressive rate cuts, supporting the USD and adding complexity to GBP/USD's trajectory.
| 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: GBP/USD enjoys short-term support from BoE policy expectations and USD softness. However, the pair faces headwinds from robust US economic fundamentals, which could limit upside potential. Traders should monitor key speeches and data for further direction.
GOLD
- Gold Retreats: XAU/USD reversed course on Monday, pulling back from a nearly three-week high around $2,721–2,722. This marks the end of a five-day rally as profit- taking and improved risk sentiment dampened demand for the haven asset.
- Treasury Appointment: President-elect Donald Trump's nomination of Scott Bessent as Treasury Secretary reassured markets. Known for his fiscal conservatism and Wall Street expertise, Bessent’s appointment bolstered confidence in US fiscal stability, putting downward pressure on gold prices.
- Easing Geopolitical Tensions: Improved geopolitical sentiment, particularly easing tensions between Israel and Lebanon, contributed to the decline in gold's appeal as a safe-haven asset. However, ongoing concerns surrounding the Russia-Ukraine conflict continue to offer underlying support.
- US Economic Data: With a lack of significant US economic events on Monday, gold markets are focusing on Wednesday's US inflation data. Investors are exercising caution ahead of this critical release, especially during the shortened Thanksgiving trading week.
- Profit-Taking: Gold buyers appeared to lock in gains as geopolitical uncertainty and initial concerns about the Trump administration eased. This profit-taking added to the downtick in XAU/USD, highlighting sensitivity to market sentiment shifts.
Closing statement: Gold’s recent pullback is driven by improving risk sentiment and profit-taking after its sustained rally. However, geopolitical developments and US inflation data later this week could reignite volatility. Traders should watch these drivers closely to assess XAU/USD's next direction.
CRUDE OIL
- WTI Pauses: West Texas Intermediate (WTI) crude oil holds steady around $70.60 per barrel during Monday's European session. The pause follows a two-day rally fueled by geopolitical tensions and improving global demand dynamics.
- Geopolitical Tensions: Oil prices gained last week after Ukraine’s attacks on Russia using US and British weaponry led to escalated responses, including Russia's use of hypersonic missiles. Additionally, Iran's activation of advanced uranium enrichment measures in reaction to a UN resolution added further geopolitical uncertainty.
- Demand in China and India: Crude oil demand from major importers, China and India, provided significant support. China’s November imports rose as lower prices spurred stockpiling, while Indian refiners increased throughput by 3% year-over-year, signaling sustained demand resilience in key markets.
- OPEC+ Meeting: OPEC+ announced its upcoming December 1 meeting would likely be held online instead of in Vienna. Market watchers expect the group to maintain current production levels and delay plans for production increases to the second quarter of 2025, given ongoing demand and price uncertainties.
- Global Risks: While demand signals remain positive, market caution persists due to geopolitical risks and mixed global economic indicators. Oil investors await clearer cues from upcoming OPEC+ announcements and broader market developments.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling |
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Closing statement: WTI crude prices are finding equilibrium amidst geopolitical pressures and improved demand fundamentals. Traders should monitor OPEC+ actions and geopolitical developments closely, as these factors will likely shape oil’s near-term trajectory.
DAX
- DAX Gains: The DAX rose 0.92% on Friday, building on Thursday’s 0.74% gain. Easing geopolitical tensions, optimism over potential ECB rate cuts, and positive sentiment surrounding the US economy fueled demand for DAX-listed stocks.
- Market Movers: Zalando SE surged 6.36%, benefiting from expectations of aggressive ECB rate cuts, which could boost disposable income and private consumption. Adidas also advanced, gaining 1.56%, reflecting broader optimism in consumer-linked sectors.
- Weak Services PMI: Germany's Services PMI dropped unexpectedly from 51.6 in October to 49.4 in November, signaling a contraction in the sector. While the Manufacturing PMI showed a slight improvement, it remained below the critical 50 threshold, highlighting persistent economic challenges.
- Sluggish GDP Growth: Finalized GDP data revealed that Germany's economy grew just 0.1% quarter-on-quarter in Q3 2024, revised down from the preliminary estimate of 0.2%. The slow growth underscores ongoing structural weaknesses and sluggish demand in Europe’s largest economy.
- Ifo Index: The upcoming release of Germany’s Ifo Business Climate Index will be pivotal for market sentiment. Economists anticipate a drop from 86.5 in October to 86.0 in November, reflecting declining confidence among German businesses in light of weak PMI data and tepid growth.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The DAX’s rally is driven by optimism over ECB policy shifts and easing geopolitical risks, though underlying economic weakness persists. Investors should closely watch the Germany’s Ifo Business Climate Index and ECB commentary for further direction, particularly regarding monetary policy adjustments.