EURUSD
- Current Price: The EUR/USD is oscillating below 1.1200 during the early European session on Monday, indicating a cautious start to the week as traders evaluate the monetary policy outlook.
- US Inflation Data: On Friday, the US Core PCE Price Index for August increased by 0.1% MoM, falling short of the expected 0.2% rise, raising expectations for gradual Fed rate cuts.
- Fedspeak: St. Louis Fed President Alberto Musalem reiterated rate cutting view, suggesting incremental rate cuts after a larger reduction in September.
- Eurozone Rate Cut Speculation: Weaker-than-expected inflation data from France and Spain have fuelled speculation that the ECB could consider another rate cut in October, putting downward pressure on the Euro.
- German Economic Data: Traders will monitor German economic releases closely, especially the preliminary CPI data for September, which could shape the near-term outlook for the Euro.
| 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 risks if the German CPI data underwhelms, potentially testing support around 1.1100. Conversely, a stronger-than-expected reading could provide a boost toward 1.1200.
GBPUSD
- Current Price: The GBP/USD pair is holding positive ground around the 1.3400 level during the early European session on Monday, reflecting a stable start to the week as traders digest recent economic data.
- US Inflation: The US headline PCE Price Index rose by 2.2% YoY in August, edging closer to the Fed’s 2% target, which strengthens the case for gradual Fed rate cuts and offers support to the Pound Sterling.
- BoE Rate Cut Expectations: The GBP’s upside remains intact, underpinned by expectations that the Bank of England's rate-cutting cycle will be slower than the US, given the sticky inflation outlook and a cautious monetary stance.
- UK GDP Revision: The UK Q2 GDP was revised down to a 0.5% growth rate from the initial 0.6%, suggesting a slightly weaker economic backdrop, but this has limited impact on the GBP sentiment for now.
- Powell's Speech: All eyes are on Fed Chair Jerome Powell’s speech later today, which could provide fresh insights into the Fed’s rate path, driving the GBP/USD’s next direction.
GOLD
- Current Price: The gold price continues to trade near $2,650 in European markets on Monday, maintaining its corrective downside from recent highs.
- Geopolitical Tensions: Gold remains in the red, even with the renewed geopolitical escalation in the Middle East and the announcement of additional stimulus from China, suggesting traders may be prioritizing other factors.
- Powell's Silence on Policy: In his remarks at the US Treasury Market Conference last Thursday, Fed Chair Jerome Powell did not discuss the economic or monetary policy outlook, leaving traders looking for clues on future rate cuts in today’s upcoming speech.
- Mixed Impact of Chinese Stimulus: While Chinese stimulus has supported gold prices, the optimism was tempered by disappointing PMI data for September. The official Manufacturing PMI came in at 49.8, just above the 49.5 forecast but still signaling contraction.
- Powell's Speech: Traders remain cautious, refraining from placing fresh directional bets ahead of Powell’s speech later today, which could shift sentiment depending on his monetary policy tone.
Closing statement: The XAU/USD could experience increased volatility following Powell's speech. A dovish tone could trigger a rebound above $2,670, while a hawkish stance may drive gold lower toward $2,630 in the near term.
CRUDE OIL
- Current Price: West Texas Intermediate (WTI) is steady around $68.80 per barrel during Monday’s European trading hours, reflecting mixed sentiment in the market.
- Middle East Supply Concerns: Crude oil prices may find support amid rising supply disruption concerns from the Middle East. The latest escalation includes Israel’s intensified attacks on Iranian-backed militant groups such as Hezbollah and the Houthis, increasing fears of further regional instability.
- Impact of Mixed Chinese Data: The recent Manufacturing PMI data from China—the world’s largest oil importer—came in mixed, putting downward pressure on oil prices as it signals uncertainty over future demand growth.
- Focus on Chinese Stimulus: Oil traders are monitoring the impact of China’s monetary measures to stimulate its economy. Last week, the Chinese government injected over CNY 1 trillion into its state banks to revive economic activity, which could potentially boost energy demand.
- OPEC+ Production Plans: The upside for crude prices could be limited by Saudi Arabia’s intention to increase production later this year, coupled with OPEC+’s plan to raise output by 180,000 barrels per day in December.
| 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: Crude oil may see upward momentum if Middle East tensions escalate further, pushing prices above the $70.00 mark. Conversely, the potential output increase from Saudi Arabia and OPEC+ could lead to a retracement back toward $67.50 if geopolitical risks ease.
DAX
- Positive Close on Friday: German stocks finished higher on Friday, driven by gains in Technology, Chemicals, and Pharmaceuticals & Healthcare sectors, signaling renewed optimism in these industries.
- Lackluster Impact of Rate Cuts: The impact of European Central Bank (ECB) rate cuts has yet to translate into noticeable economic improvements. This sentiment was reinforced by the ifo Business Climate Index, which declined again in September, highlighting continued economic stagnation in Germany.
- China's Stimulus Uncertainty: While China’s stimulus measures have been met with enthusiasm, the effectiveness of these actions remains to be seen. European export stocks have priced in stronger demand from China, which could become a catalyst for further gains if the measures prove successful.
- US Data: The US Personal Income and Outlays Report on Friday further supported expectations for a 50-basis point Fed rate cut in November. The PCE Price Index came in at 2.2% year-on-year in August, down from 2.5% in July, suggesting a softening inflation outlook.
- Central Bank Commentary: Investors should remain vigilant to central bank commentary and economic releases. Fed Chair Powell’s upcoming speech in Nashville, Tennessee, will be closely watched for guidance on future policy actions.
| 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: DAX could experience upside potential if China’s economic recovery gains traction, lifting sentiment in export-oriented sectors. However, continued weakness in German business confidence and ECB policy uncertainty may limit gains. A break above 19,500 could indicate a bullish continuation, while 19,250 remains a key support level to watch.