EURUSD
- The Euro is currently undergoing its lengthiest consecutive losing streak against the US Dollar in six years, spanning 6 weeks. If this trend continues, it could mark the longest such streak since 2014. The Euro has declined by around -1.9% this month, potentially leading to its worst monthly performance since May.
- EUR/USD is hovering around a robust support level marked by the 200-day moving average. This level coincides with the lower boundary of an upward-sloping channel and is slightly above the May low of 1.0630.
- European Central Bank President Christine Lagarde recently advocated for a strategy of maintaining higher interest rates for an extended period. This approach aims to achieve the central bank's primary goal of bringing inflation back in line with its 2% target.
- The US Dollar Index (DXY), which gauges the dollar's value against a basket of currencies, is currently testing a critical resistance level. This follows Federal Reserve Chair Jerome Powell's indications of potential further monetary tightening.
- The upcoming focus lies on pivotal US economic indicators, including manufacturing and services activity, core Personal Consumption Expenditures (PCE), and employment data. These releases are expected to provide insights into the health of the US economy and potential implications for the USD.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: In summary, the Euro's current losing streak against the US Dollar is its longest in several years. Technical support, coupled with ECB President Lagarde's perspective and USD strength, shapes the current dynamics. Attention will shift to upcoming US data releases, which could further impact EUR/USD dynamics.
GBPUSD
- GBP/USD is making gains above the 1.2600 level, initiating the new week on an upward trajectory.
- The pair is benefiting from a slight retreat of the US Dollar, a movement prompted by China's policy support measures that have increased risk appetite in the market.
- Hawkish comments from Bank of England's Deputy Governor Broadbent are providing support to the Pound and acting as a favorable factor for the GBP/USD pair.
- The US Dollar is maintaining its strength against other currencies, following the cautionary stance of US Federal Reserve Chair Jerome Powell. Powell's remarks about potential further tightening of monetary policy to tackle inflation and bring it to the 2% target are driving the dollar's recent performance.
- The trading environment is expected to be relatively light due to the UK Summer Bank holiday, which could contribute to maintaining the current market dynamics.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: GBP/USD is starting the week on a positive note, benefitting from a retreat of the US Dollar, positive remarks from the Bank of England, and ongoing USD dynamics. However, trading activity might be subdued due to the UK Summer Bank holiday.
GOLD
- Gold prices exhibited little movement on Monday as the market absorbed the Federal Reserve's hawkish yet reaffirming stance, amidst a week filled with significant economic data releases.
- At the annual Jackson Hole Economic Policy Symposium, US Federal Reserve Chair Jerome Powell maintained a slightly hawkish tone. He emphasized the potential for additional rate hikes due to persistent inflation.
- Powell acknowledged the recent easing of price pressures and highlighted the Fed's cautious approach to further tightening. He indicated that the potential for above-average growth could pose risks to inflation progress, warranting further tightening.
- Philadelphia Fed President Patrick Harker and Boston Fed President Susan Collins offered differing opinions, suggesting that the Fed might have already done enough in terms of tightening policy, hinting at the possibility of unchanged interest rates for the rest of the year.
- Policymakers dismissed worries about rising US yields and deemed it premature to discuss the potential for rate cuts, further contributing to the complex narrative around gold's movement.
Closing statement: Gold prices experienced minimal changes on Monday as the market reacted to the Federal Reserve's mixed messaging. The Jackson Hole Symposium and ongoing economic data releases will likely continue to influence the market sentiment for gold throughout the week.
CRUDE OIL
- Crude oil prices saw a slight decline on Monday as concerns lingered regarding China's economic growth and potential U.S. interest rate hikes that might impact fuel demand.
- Crude initially gained in early Asian trade, prompted by China's decision to reduce stamp duty on stock trading to bolster struggling markets, momentarily boosting prices.
- Investors are eagerly awaiting China's manufacturing purchasing managers' index (PMI) data later this week, expected to provide further insights into the challenging economic landscape of the world's second-largest economy.
- Energy companies in the United States reduced the number of active oil rigs for the ninth consecutive month in August, according to Baker Hughes' report, underscoring ongoing challenges in the energy sector.
- Tropical Storm Idalia has formed in the Caribbean and could potentially intensify into a hurricane, possibly affecting Florida. While it's anticipated to bypass major oil and gas areas in the Gulf, some disruptions, such as brief power outages, could occur.
| SMA (20) | Slightly Falling |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Falling |
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Closing statement: In summary, crude oil prices showed a slight downward trend on Monday, influenced by apprehensions about China's economic condition, potential U.S. interest rate actions, and the ongoing dynamics of supply and demand. The upcoming China PMI data and the impact of Tropical Storm Idalia remain focal points for the crude oil market.
DAX
- The DAX index recorded a slight gain of 0.07% on Friday. This partially offset the 0.68% loss experienced on Thursday, resulting in a weekly gain of 0.37%, closing the week at 15,632.
- Eurozone inflation retreated to a 5.3% annual rate in July. Despite the decline, this rate remains significantly above the European Central Bank's target of 2%.
- The German economy encountered stagnation in the second quarter, as indicated by the German Ifo Business Climate Index. The index fell notably from 87.4 to 85.7 in August, suggesting potentially worsening economic conditions.
- The overall sentiment aligned with the latest private sector PMI survey, reflecting deteriorating conditions. In August, the German Business Expectations Index dropped from 83.6 to 82.6. This decline in business expectations was contrary to economists' forecasts for an improvement.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Neutral |
Closing statement: In summary, the DAX index witnessed a modest Friday gain, recovering slightly from Thursday's losses. Eurozone inflation trends, coupled with challenges in the German economy and business sentiment, added complexity to the market landscape during the week.
