EURUSD
- EUR/USD Price: The EUR/USD is experiencing a slight pullback on Friday, trading around 1.1160 after rallying in the previous session. This comes as robust US economic data supports the US Dollar.
- US GDP: The US Gross Domestic Product (GDP) grew at a solid rate of 3.0% in the second quarter, according to the BEA, affirming the resilience of the US economy.
- Jobless Claims: Initial Jobless Claims came in at 218K for the week ending September 20, suggesting a stable labour market.
- US PCE Data: The US Dollar is gaining ground as traders exercise caution ahead of the release of the US Personal Consumption Expenditures (PCE) Price Index for August, a crucial indicator for the Federal Reserve's inflation outlook.
- ECB Speakers: Meanwhile, ECB Chief Economist Philip Lane and Board Member Piero Cipollone are set to speak at separate events, potentially influencing the Euro’s direction.
| 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 could face further downside pressure if the upcoming US PCE data strengthens the case for tighter US monetary policy. Alternatively, any dovish signals from ECB speakers could see the Euro weaken further, with a potential drop toward the 1.1100 support zone.
GBPUSD
- GBP/USD Price: The GBP/USD pair is experiencing a modest decline during Friday’s European session, retreating from its highest level since March 2022 at 1.3435 reached on Thursday.
- BoE vs. Fed Rate Outlook: Expectations that the Bank of England (BoE) will pursue a slower rate-cutting cycle compared to the US Federal Reserve (Fed) should continue to provide underlying support for the British Pound (GBP), capping significant losses in the pair.
- US Data: Strong US Durable Goods Orders and Initial Jobless Claims exceeding expectations have further boosted the USD, reinforcing the Fed’s current stance on policy.
- Cook’s Speech: Fed Governor Lisa Cook expressed support for last week’s 50 basis point (bps) rate cut, citing downside risks to employment, which has created some mixed signals for the USD.
- Lack of UK Data: With a light UK data docket for the rest of the week, GBP/USD traders are likely to stay on the sidelines until GBP-centric data releases next week.
| 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 GBP/USD could remain range-bound in the near term, with the 1.3400 region acting as a pivot. A break below 1.3350 could open the door for further downside toward the 1.3300 mark. Conversely, a sustained move above 1.3435 would signal a potential run-up to 1.3500.
GOLD
- Gold Price: Gold price is currently consolidating near its record high of $2,686, as buyers take a pause after an impressive weekly rally.
- USD Recovery: The Gold rally is being checked by a resurgent US Dollar (USD), driven by waning expectations of an outsized Fed rate cut at the next meeting.
- Fed Remarks and Chinese Stimulus: Despite the USD rebound, dovish comments from Fed Governor Lisa Cook and a risk-on mood following new Chinese stimulus measures are supporting Gold, limiting any sharp pullbacks.
- Core PCE Price Index: The upcoming release of the Fed’s preferred inflation gauge—the core PCE Price Index—will be pivotal in shaping near-term expectations for a November rate cut and the next leg of Gold’s move.
- Fedspeak: Additionally, a speech by Fed Governor Michelle Bowman later in the day could add to the potential volatility in XAU/USD.
Closing statement: The Gold price could remain in a holding pattern until the release of the core PCE data. A positive surprise could see gold testing the $2,700 level, while a weaker print could trigger a retracement towards $2,650 as the USD strengthens.
CRUDE OIL
- WTI Oil Price: West Texas Intermediate (WTI) is trading around $67.70 on Friday, pressured by supply concerns and demand uncertainties.
- Saudi Arabia’s Production Strategy: Reports indicate Saudi Arabia is abandoning its $100/barrel target, preparing to increase production, which could lead to a prolonged period of low oil prices and further weigh on WTI.
- Libya’s Production: The expectation of rising oil output in Libya after political factions reached an agreement to appoint a new central bank governor is contributing to selling pressure on the WTI price.
- Chinese Stimulus: However, the downside may be limited by fresh stimulus from China, the world’s largest crude importer, which could support oil demand.
- Geopolitical Tensions: The US and its allies’ calls for a ceasefire in the Middle East might reduce geopolitical risk premiums, but the uncertainty remains.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The WTI price may continue to be weighed down by production increases and diminished demand expectations, with $65 serving as the next key support. However, China’s stimulus measures could act as a buffer, preventing deeper declines in the short term.
DAX
- Auto Stocks Gains: DAX-listed auto stocks surged following stimulus measures from Beijing. Notably, BMW gained 3.81%, Mercedes-Benz rose by 3.27%, and Daimler Truck advanced 2.97%, driving the DAX higher.
- Consumer Sentiment: The GfK Consumer Climate Index increased modestly from -21.9 in September to -21.2 in October, reflecting a tentative improvement in consumer sentiment despite persistent economic concerns.
- German Employment Data: Investors will turn their attention to Germany’s unemployment rate for September on Friday. Economists forecast the rate will hold steady at 6.0%, indicating potential labor market stability.
- ECB Rate Cut Speculation: Rising expectations for a Q4 ECB interest rate cut remain a key market driver. ECB Chief Economist Philip Lane’s remarks will be closely watched for any monetary policy clues.
- US Data: A drop in US Initial Jobless Claims boosted bets on a soft US landing, further lifting risk appetite for DAX stocks.
