EURUSD
- Current Trading: EUR/USD remains firm above 1.0800, snapping a two-day losing streak in European trading on Wednesday.
- ECB Rate Cut Hints: Recent comments from ECB Vice President Luis de Guindos suggest a potential rate cut by the ECB in September.
- German Economic Data: Germany’s flash inflation rate saw the CPI rise more than expected by 2.3% in the year to July, while the flash GDP growth rate in Germany surprised to the downside with the economy now seen contracting by 0.1% QoQ and YoY.
- Eurozone Growth: In the broader euro bloc, the flash GDP growth rate exceeded estimates, with the economy expected to expand by 0.3% QoQ and 0.6% YoY in Q2.
- US Economic Indicators: In the US, the Conference Board's Consumer Confidence index improved to 100.3 in July, while JOLTs job openings receded to 8.140 million in June from 8.230 million.
| 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: EUR/USD shows resilience above the 1.0800 mark amid mixed economic data from Germany and the Eurozone. ECB's hints at a potential rate cut in September and solid US consumer confidence provide a nuanced outlook for traders. The performance of the pair will likely hinge on further economic developments and central bank decisions.
GBPUSD
- Current Trading: GBP/USD retraces recent losses, trading around 1.2830 during European hours on Wednesday.
- Technical Analysis: Technical analysis of the daily chart indicates the pair is positioned in the narrow section of a descending channel, suggesting a consolidation phase or a potential reversal.
- Federal Reserve Outlook: The Fed is expected to hold interest rates steady at its July monetary policy meeting on Wednesday. The US central bank has maintained its benchmark funds rate in a range of 5.25%-5.50% since July 2023.
- Fed Chair Remarks: Market players will keep an eye on remarks from Chair Jerome Powell for more cues on the future path of policy rates.
- Bank of England Speculations: On the GBP side, investors are pricing in a potential rate cut by the BoE on Thursday, which has dragged the Pound Sterling (GBP) lower against the USD.
| SMA (20) | 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 shows signs of recovery around the 1.2830 mark amid technical indications of a consolidation phase. Market focus remains on the Federal Reserve's rate decision and Chair Powell's comments for future policy direction. Meanwhile, speculation about a BoE rate cut continues to impact the pair's performance, adding to the cautious sentiment among traders.
GOLD
- Current Trading: Gold price (XAU/USD) is stretching higher around $2,420 on Wednesday, reversing the intraday dip to the $2,400 neighborhood.
- Geopolitical Tensions: The Israeli attack on Lebanon's capital in retaliation for a rocket strike in the Golan Heights on Saturday has raised the risk of further escalation in Middle Eastern geopolitical tensions.
- USD Momentum: The USD received a minor lift from upbeat US macro data, though this momentum quickly faded amid bets for an imminent start of the Federal Reserve's rate-cutting cycle in September.
- Market Caution: Bulls might refrain from placing aggressive bets and prefer to wait for more cues about the Federal Reserve's (Fed) rate-cut path.
- China's Economic Data: The National Bureau of Statistics (NBS) reported that business activity in China's manufacturing sector contracted for the third straight month in July, with growth in the services sector remaining tepid.
Closing statement: Gold prices are rising around $2,420, supported by escalating geopolitical tensions in the Middle East and fading momentum in the USD. Market participants remain cautious, awaiting clearer signals regarding the Federal Reserve's rate-cut path. Meanwhile, weak economic data from China adds to the complex global economic landscape influencing gold trading dynamics.
CRUDE OIL
- Current Trading: West Texas Intermediate (WTI) US crude oil prices tick higher during the Asian session on Wednesday, moving away from the lowest level since June 6.
- Geopolitical Tensions: Israel's retaliation attack in response to the Golan Heights incident on Saturday has raised the risk of a wider conflict in the Middle East.
- US Crude Inventories: The American Petroleum Institute (API) reported on Tuesday that US crude oil inventories fell by 4.495 million barrels for the week ending July 26, indicating tight conditions in the world’s largest fuel consumer.
- Chinese Demand Concerns: Concerns about slowing demand in the world’s top oil importer resurfaced following the release of rather unimpressive official Chinese PMI prints for July.
- Venezuelan Elections: The controversial outcome of the presidential elections in Venezuela has not yet led to any significant price reaction in the oil market.
| SMA (20) | Slightly Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: WTI crude oil prices are ticking higher, supported by reduced US crude inventories and escalating geopolitical tensions in the Middle East. However, concerns over slowing demand in China and the lack of a significant market reaction to Venezuela's presidential elections add complexity to the oil market dynamics.
DAX
- Economic Contraction: The German economy contracted by 0.1% quarter-on-quarter in Q2 2024 amid increasing concerns about the broader Euro area economy. The unexpected economic contraction could pressure the ECB to consider multiple 2024 rate cuts to bolster the Euro area economy.
- Euro Area GDP Growth: In Q2 2024, seasonally adjusted GDP increased by 0.3% in both the euro area and the EU, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat.
- German Inflation: Inflation in Germany rose unexpectedly in July, according to preliminary figures released on Tuesday. New data from the federal statistics agency Destatis showed that consumer prices were up 2.3% from a year ago.
- FOMC Interest Rate Decision: Later in the session on Wednesday, the FOMC interest rate decision and press conference will draw investor interest. Economists expect the Fed to hold interest rates at 5.50%, putting the press conference in the spotlight.
- Fed Chair Powell's Remarks: Fed Chair Powell’s stance on inflation, the labor market, and the timing of Fed rate cuts will be critical. Concerns about the labor market and a declaration of victory in the inflation battle could signal September and December rate cuts.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Neutral |
Closing statement: The DAX is reacting to mixed economic signals, with Germany's unexpected GDP contraction and rising inflation adding pressure on the ECB for potential rate cuts. Meanwhile, investor focus shifts to the upcoming FOMC meeting, where Fed Chair Powell's comments on inflation and rate cuts will be closely monitored, potentially influencing market sentiment and future monetary policy decisions.