EURUSD
- Current Trading: EUR/USD advances for the third consecutive day, trading around 1.0860 during the European session on Monday.
- US Inflation: Recent US inflation, measured by the change in the Personal Consumption Expenditures (PCE) Price Index, eased slightly from a year ago in June, paving the way for a potential interest rate cut by the Federal Reserve (Fed) in September.
- Fed Rate Cut Timing: Despite the softer US inflation in June, it is not sufficient for the Fed to start cutting interest rates at its August meeting on Wednesday.
- Analysts' Outlook: Morgan Stanley analysts noted that "considerable progress on inflation" will allow the Fed to get closer to rate cuts, expecting three cuts this year, beginning at the September Federal Open Market Committee (FOMC) meeting.
- ECB Outlook: The European Central Bank (ECB) left the interest rate unchanged last week, but weaker German IFO survey results and softer economic data are opening the door to another rate cut by the ECB.
| 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: EUR/USD is benefiting from easing US inflation, supporting expectations of a Fed rate cut in September. However, the ECB's potential for further rate cuts amidst weaker German data could limit the pair's upside. The outlook for EUR/USD remains cautiously bullish, with attention on upcoming Fed and ECB decisions.
GBPUSD
- Current Trading: GBP/USD is moving back and forth in a familiar range below 1.2900 in European trading on Monday.
- US Inflation Data: The US Personal Consumption Expenditures (PCE) inflation continued to slow in June, dropping from a 2.6% annual gain in May to 2.5% in June. On a monthly basis, the PCE figure increased by 0.1% in June, after remaining unchanged in May.
- Upcoming Monetary Policy Meetings: The Federal Reserve (Fed) and Bank of England (BoE) monetary policy meetings on Wednesday and Thursday will be closely watched events.
- Fed Rate Outlook: The US Fed might signal this week that interest rate cuts are on the way, although it is widely anticipated to hold steady until its next rate decision in September.
- BoE Rate Outlook: On the GBP side, the Bank of England might cut interest rates at its August meeting on Thursday, marking the first rate cut since 2020. The markets forecast 50% odds of a quarter-point rate cut on Thursday.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: GBP/USD remains in a range below 1.2900 as markets await crucial central bank meetings. The pair could see volatility based on the Fed's rate cut signals and the BoE's potential rate decision. The near-term direction will hinge on the outcomes and guidance from these policy meetings, with cautious optimism for GBP amid potential rate cuts.
GOLD
- Current Trading: Gold price is building on its previous recovery early Monday, having defended the key support at $2,360 on a weekly closing basis.
- Recent Performance: On Friday, Gold price staged an impressive rebound from near two-week lows of $2,353 after the Greenback turned south. The core PCE price index data, the Fed’s preferred inflation gauge, steadied at an annual pace of 2.6% in June, driving up optimism that the central bank will begin cutting rates in September.
- Geopolitical Influence: Over the weekend, fresh tensions in the Middle East sparked a flight to safety in the traditional safety net, gold price, reinforcing the buying interest in the yellow metal.
- Market Expectations: Gold markets remain expectant of the potential dovish policy outlook from the Fed and the Bank of England (BoE) later in the week.
- Upcoming Data: The key US macro data scheduled at the start of a new month, including the Nonfarm Payrolls (NFP) report, will also provide a fresh impetus to the commodity.
Closing statement: Gold prices are bolstered by geopolitical tensions and expectations of dovish central bank policies. The metal is well-supported above $2,360, with the market's focus on upcoming Fed and BoE meetings and key US economic data, which could drive further gains if dovish signals are confirmed.
CRUDE OIL
- Current Trading: West Texas Intermediate (WTI) US crude oil prices kick off the new week on a positive note and reverse a part of Friday's heavy losses back closer to the lowest level since June 10.
- Geopolitical Influence: A rocket strike in the Israeli-occupied Golan Heights on Saturday raised fears about an all-out war in Lebanon.
- Market Expectations: Investors now seem convinced that the US central bank will start lowering borrowing costs in September and cut interest rates two more times by the end of this year.
- Economic Concerns: Sluggish growth is showing in China, the world's top oil importer, and concerns about falling fuel demand, which, in turn, might cap the upside for the commodity.
- Upcoming Events: Traders might also prefer to wait for the outcome of a two-day FOMC monetary policy meeting on Wednesday, which will play a key role in influencing the USD price dynamics and provide some meaningful impetus to crude oil prices.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: WTI crude oil prices are attempting a rebound despite geopolitical tensions and economic concerns. The market's focus is on the upcoming FOMC meeting and potential US interest rate cuts, which could provide support. However, concerns over China's sluggish growth and fuel demand may limit significant gains.
DAX
- Market Performance: Germany stocks were higher after the close on Friday, as gains in the Retail, Consumer & Cyclical, and Food & Beverages sectors led shares higher.
- US Inflation Impact: On Friday, US inflation figures raised investor bets on multiple 2024 Fed rate cuts. The PCE Price Index increased 2.5% year-on-year in June after a 2.6% rise in May, supporting Fed rate cut bets.
- Technical Outlook: From a technical point of view, a DAX break above the 18,500 handle would support a move toward 18,750. A return to 18,750 could signal a move toward 19,000.
- Upcoming Data: German Q2 GDP numbers and retail sales, US economic data, and corporate earnings require consideration this week.
- Influencing Factors: Near-term DAX trends hinge on corporate earnings, Euro area inflation numbers, and the Fed interest rate decision.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Neutral |
Closing statement: DAX shows strength led by key sectors and technical indicators suggest potential for further gains. Market sentiment is bolstered by US inflation data supporting Fed rate cut bets. This week's focus includes German GDP, retail sales, and critical economic indicators, with corporate earnings and Fed decisions likely to drive near-term trends.