EURUSD
- Consolidation Near 1.0850: The EUR/USD remains consolidated around 1.0850, with Tuesday's market lacking significant drivers to propel the pair in a decisive direction. The market is characterized by a cautious stance, awaiting key developments.
- Disappointing US Economic Data: US Durable Goods Orders for January fell beyond expectations, impacting the US dollar. Additionally, the December Housing Price Index (MoM) increased by only 0.1%, below both the forecasted and prior figures, contributing to the dollar's subdued performance.
- Steady German Consumer Confidence: The Gfk German Consumer Confidence Survey for March met expectations with a reading of -29, aligning closely with the February figure. This steady consumer sentiment in Germany reflects a stable outlook within the Eurozone's largest economy.
- Anticipation of US GDP Figures: Market attention is focused on the upcoming release of Gross Domestic Product (GDP) figures from the US on Wednesday, a key economic indicator that can significantly influence the direction of EUR/USD.
- Upcoming German Economic Data and US PCE Inflation: Traders are looking forward to German Retail Sales and Consumer Price Index (CPI) inflation data on Thursday. Furthermore, the US Personal Consumption Expenditure Price Index (PCE) inflation print will be closely monitored for insights into the US economic landscape.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: EUR/USD treads cautiously amid mixed US economic data, with attention turning to upcoming German economic indicators and crucial US GDP and inflation figures. The pair is poised for potential movements based on the outcome of these key events in the coming days.
GBPUSD
- Stable Trading Around 1.2680: GBP/USD cycled around 1.2680 on Tuesday as markets seek fresh cues from the Federal Reserve (Fed). Investors are gradually moving away from heightened expectations of rate cuts, contributing to a stable trading environment.
- Limited UK Data Impact: The UK data calendar is relatively thin for the week, prompting market participants to focus on crucial figures that could reshape rate cut expectations, particularly influenced by developments in the US.
- Anticipation of US Annualized GDP: US annualized GDP for the fourth quarter is scheduled for release on Wednesday, with expectations of a flat reading, holding steady at the previous 3.3% for the year ending in Q4. This data holds significance for shaping market sentiments.
- PCE as a Key Indicator: The Personal Consumption Expenditure (PCE), being the Fed’s favorite inflation measure, is anticipated to draw considerable attention. Investors are eager for signs within this indicator that might influence expectations of rate cuts from the US central bank.
- Challenges to Rate Trim Expectations: Despite speculation, challenges persist for those hoping for a Fed rate trim. A tight labor market, lingering concerns about the "last mile" on inflation, and the resilience of the domestic US economy against recessionary pressures weigh on trader expectations.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD maintains stability around 1.2680 as markets await insights from the Federal Reserve. With limited UK data impact, the focus shifts to key US figures, including annualized GDP and the PCE, influencing expectations regarding potential rate cuts by the Fed. Ongoing challenges in the US economy pose complexities for those anticipating a rate trim.
GOLD
- Repeating Asian Trading Pattern: Gold price is mirroring the price action observed during Tuesday’s Asian trading, showing signs of a comeback as bulls make another attempt to influence the market early Wednesday.
- Consolidation in a Range: Despite the recent uptick, the precious metal remains confined within a familiar range. Traders are closely watching for cues from the upcoming US Personal Consumption Expenditures (PCE) Price Index on Thursday, seeking insights into the potential rate-cut trajectory of the Federal Reserve (Fed).
- Fed's Stance and Recent Comments: The FOMC meeting minutes released last week, coupled with recent comments from Fed officials, indicate that the US central bank is not in a hurry to cut interest rates. This sentiment contributes to the current market dynamics.
- Concerns About Government Shutdown: US President Joe Biden has emphasized the urgency of finding a solution to prevent a potential government shutdown on March 1. The legislative logjam adds an element of uncertainty, impacting market sentiment.
- Focus on Preliminary US GDP Print: Traders are eagerly awaiting the release of the Preliminary US GDP print, expected to match the original estimates. The anticipated data is projected to reveal that the US economy expanded at a 3.3% annualized pace in Q4.
Closing statement: Gold price shows signs of resurgence, repeating patterns observed in Asian trading. Amidst consolidation, market attention is directed towards the upcoming US PCE Price Index for insights into the Fed's rate-cut trajectory. The central bank's current stance, coupled with concerns about a government shutdown, adds complexity to market dynamics. The eagerly awaited Preliminary US GDP print is anticipated to affirm Q4 economic expansion.
CRUDE OIL
- Decline After Consecutive Gains: West Texas Intermediate (WTI) oil prices experience a decline, retreating after two consecutive days of gains. The current trading hovers around $78.50 per barrel during the Asian session on Wednesday.
- Challenges from Higher Borrowing Costs: The oil market faces challenges attributed to higher borrowing costs, contributing to a dampening effect on global economic growth. This, in turn, is reducing overall demand for oil.
- Mixed Market Sentiment: Crude benchmarks initially received upward support following a Reuters report indicating that the Organization of the Petroleum Exporting Countries and allies (OPEC+) is contemplating extending voluntary oil output cuts into the second quarter. However, concerns about global economic growth persist.
- Geopolitical Supply Risks and US Market Strength: Persistent geopolitical supply risks in the Middle East, alongside indications of a stronger US physical market, are factors helping to counterbalance concerns about global oil demand.
- API Data and EIA Expectations: The American Petroleum Institute (API) revealed that Weekly Crude Oil Stock increased to 8.428 million barrels for the week ending February 23, up from the previous 7.168 million barrels. The market is now looking ahead to the upcoming US Energy Information Administration (EIA) report, expecting a decline in the Crude Oil Stocks Change on Wednesday.
| 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 oil prices retreat after recent gains, facing headwinds from higher borrowing costs impacting global economic growth. Mixed sentiment prevails, with initial support from OPEC+ considerations but ongoing concerns about demand. Geopolitical risks and a resilient US market, coupled with API data, shape the narrative as traders await the EIA report for further insights into crude oil stocks.
DAX
- German Consumer Confidence: Tuesday saw attention on German consumer confidence, with the German GfK Consumer Confidence Index rising from -29.6 to -29.0 for March. This uptick in sentiment reflects a modest improvement in consumer outlook.
- Tech Stocks Lead: Tech stocks emerged as front-runners, buoyed by enthusiasm surrounding artificial intelligence (AI) developments. Despite concerns about a potentially more hawkish ECB rate path in 2024, investors showed confidence in tech sectors.
- Eurozone Economic Sentiment: Wednesday brings a focus on economic sentiment figures for the Eurozone. Following the German consumer sentiment report, a significant uptick in consumer confidence could influence market expectations regarding a potential April ECB rate cut.
- ECB Commentary: Alongside economic data, investors are attentive to ECB commentary. ECB Executive Board member Elizabeth McCaul is scheduled to speak, providing insights into the central bank's perspective on economic conditions and monetary policy.
- US Economic Data: Later in Wednesday's session, the spotlight shifts to the US economy. Investors will closely watch the release of the second estimate of Q4 GDP numbers, which will offer crucial insights into the health and trajectory of the US economy.
| 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 a mixed trading session, with attention on German consumer confidence and tech stocks leading the market. Despite concerns about ECB rate paths, investor sentiment remained relatively positive. As economic sentiment figures for the Eurozone and US GDP data loom, investors brace for potential market-moving insights into global economic conditions.