EURUSD
- Current Movement: The EUR/USD pair is recovering toward the 1.1100 level as the US Dollar weakens, driven by market expectations that the US Federal Reserve may implement a 50-basis point rate cut in September.
- Eurozone Data: The Eurozone's Producer Price Index (PPI) rose by 0.8% month-over-month in July, marking the largest increase since December 2022. This uptick signals growing price pressures within the Euro area, which could influence European Central Bank (ECB) policy considerations.
- Upcoming EU Data: The main economic data release from the Eurozone this week is the pan-European Retail Sales report for July, set to be published on Thursday. Analysts expect a slight recovery to 0.1% year-over-year, following a previous contraction of -0.3%. A better-than-expected result could provide some support to the Euro.
- US Labour Data: The US JOLTS Job Openings for July came in below expectations, with 7.673 million jobs added compared to the forecast of 8.1 million. This miss in the labour market adds to speculation that the Federal Reserve might soon shift to a more accommodative monetary stance.
- Key Event: Friday’s Nonfarm Payrolls (NFP) report will be crucial in shaping market expectations for the Fed's policy decisions in the upcoming months. As the last significant US labour data release before the Fed's September meeting, the NFP could provide key insight into the health of the US economy.
| 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: EUR/USD could see further gains if US data continues to disappoint, and expectations of a Fed rate cut solidify. However, Eurozone data, particularly the Retail Sales figures, will also play a role in determining the pair's short-term direction. A weaker Dollar combined with stabilizing Eurozone economic conditions could lift the pair above 1.1100 in the near term.
GBPUSD
- Current Movement: GBP/USD is trading with a slight upward bias around the mid-1.3100s during Thursday's European session. However, the pair remains below the weekly high reached earlier, indicating cautious market sentiment.
- UK Economic Data: The latest survey from the British Retail Consortium showed a 1.0% year-over-year increase in spending for August, marking the strongest growth since March. This uptick reflects a resilient consumer sector in the UK, which may support the Pound in the near term.
- US Labour Market Data: The Job Openings and Labor Turnover Survey (JOLTS) released on Wednesday revealed that job openings in the US fell to 7.673 million in July, the lowest level since January 2021. This decline adds to concerns about a potential slowdown in the US labour market.
- Fed Policy Expectations: Dovish comments from Federal Reserve officials have increased market speculation for a larger rate cut at the upcoming FOMC policy meeting on September 17-18. This has contributed to the recent softness in the US Dollar, providing some support to GBP/USD.
- Upcoming US Data: Investors are closely watching the US economic docket for Thursday, which includes the ADP report on private-sector employment, Weekly Initial Jobless Claims, and the ISM Services PMI. These reports will provide further insight into the health of the US economy and could influence the Fed's policy path.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD may see further upside if US economic data continues to disappoint, and the market solidifies expectations for a significant rate cut by the Fed in September. However, the pair’s movement could remain limited unless there is a clear catalyst, such as stronger UK data or more dovish signals from the Fed. Investors should also monitor upcoming US reports for potential volatility in the pair.
GOLD
- Current Movement: Gold price is gaining momentum, pushing toward a sustained break above the key $2,500 level during Thursday’s European session. Bullish sentiment is building as the yellow metal continues its ascent following a three-day decline earlier in the week.
- US Economic Data: The US ISM Manufacturing PMI released earlier this week fell short of expectations, further weakening the US Dollar. This was compounded by additional signs of a slowing labour market, with the latest JOLTS data revealing a decline in job openings to 7.673 million, the lowest since January 2021.
- Fed Commentary: Fed President Mary Daly made dovish remarks, stating that the “Fed needs to cut the policy rate because inflation is falling, and the economy is slowing.” This has raised market expectations for a significant rate cut, adding to the upward pressure on gold prices.
- Upcoming US Data: Friday's US Nonfarm Payrolls (NFP) and wage inflation data are critical for traders, as they will provide a clearer picture of the labor market and guide expectations on the size of the anticipated Fed rate cut. Until then, Thursday’s data releases, including the ADP private sector employment report, Weekly Jobless Claims, and ISM Services PMI, are likely to set the tone for gold market sentiment.
Closing statement: Gold is expected to remain bid above the $2,500 threshold as dovish Fed expectations continue to support the precious metal. The upcoming labour data, especially the NFP on Friday, will be crucial in determining whether gold can maintain this upward momentum. If the data further fuels speculation of an aggressive rate cut by the Fed, gold could rally further. Conversely, stronger-than-expected labour data might slow down the metal’s bullish advance. Traders should remain cautious and monitor these key data releases for potential volatility.
CRUDE OIL
- Current Movement: West Texas Intermediate (WTI) is trading around $69.50 on Thursday, marking its lowest price since mid-December 2023. The downward momentum continues amid a negative outlook for oil demand in the coming months, driven by various global factors.
- OPEC+ Discussions: OPEC+ is considering delaying the oil output increase initially scheduled for October. This comes in response to a potential rise in Libyan production, which could offset some of the supply constraints caused by the ongoing geopolitical conflicts in the country.
- China's Economic Outlook: Weak economic data from China has raised concerns over reduced oil demand from the world's largest crude importer. This, combined with slower global growth prospects, is weighing heavily on oil prices and contributing to the bearish sentiment in the market.
- US Crude Inventories: Despite the weak demand outlook, US crude oil inventories saw a significant drop last week. According to the American Petroleum Institute (API), crude oil stockpiles fell by 7.8 million barrels for the week ending August 30, providing a brief, albeit limited, cushion to the downside pressure on prices.
- Upcoming Data: Traders will be closely monitoring the release of the US ISM Services PMI and the weekly EIA Crude Oil stockpiles report, both due later Thursday. These reports could provide further insights into the state of the US economy and oil demand trends, potentially influencing short-term price action.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: WTI is likely to remain under pressure as global demand concerns, particularly from China, continue to dominate the market narrative. However, a potential delay in OPEC+ output increases and significant US inventory draws may offer some temporary support to prices. Traders will be watching the US data releases for further clues on the direction of the oil market. A stronger-than-expected ISM Services PMI could help stabilize prices, while additional declines in crude stockpiles might further limit the downside. Conversely, weak US economic data could extend WTI’s slide below the $69 mark.
DAX
- Market Movers: Infineon Technologies took a significant hit for the second consecutive session, dropping by 3.84%, as uncertainty surrounding the US economy weighed heavily on tech stocks. Additionally, auto stocks struggled amid concerns over declining demand, adding further pressure to the DAX.
- Services PMI Decline: On Wednesday, Germany's HCOB Services PMI fell from 52.5 in July to 51.2 in August. This dip has heightened fears of a potential recession in Germany, particularly given the country's reliance on its service sector for economic growth.
- Factory Orders Boost: In contrast to the negative PMI data, Germany's Factory Orders saw an unexpected 2.9% rise in July, according to the Federal Statistics Office. This suggests that the German manufacturing sector still maintains some recovery momentum, offering a glimmer of hope amid broader economic concerns.
- US Job Market Concerns: The JOLTs Job Openings Report on Wednesday raised fresh fears of a hard landing for the US economy. Job openings dropped from 7.910 million in June to 7.673 million in July, reinforcing worries about weakening labor market conditions, which could further impact global equities.
- Upcoming Data: On Thursday, all eyes will be on the US labour market and services sector reports. These data points could prove critical as they may offer further insight into the US economic outlook and labor conditions, which are key factors influencing global market sentiment, including the DAX.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX may face continued pressure in the short term due to the weak Services PMI data and ongoing concerns about the US economy. However, the unexpected rise in Factory Orders could provide some underlying support. Investors will closely watch upcoming US economic reports, particularly labour market and services data, which could shape sentiment. Should the US labour market show signs of further weakening, it could amplify global recession fears, adding to the bearish sentiment on the DAX. Conversely, positive US data may ease concerns and provide some relief to the index.