EURUSD
- EUR/USD Traction: The EUR/USD pair regained positive traction on the last trading day of the week, halting its pullback from the one-year high touched on Wednesday.
- Impact of Euro Area Data: Mixed data from advanced PMIs in the euro area has curbed the pair’s upward momentum. The ECB Accounts revealed no immediate need for rate cuts last month, but a discussion might occur in September due to high rates impacting growth.
- ECB Insights: A recent survey indicated a sharp slowdown in the growth of negotiated salaries in Q2, a key factor in forecasting future inflation pressures.
- FOMC and Fed Perspectives: The FOMC Minutes suggest a rate cut in September, with Kansas City Fed Bank President Jeff Schmid and Boston Fed President Susan Collins indicating support for a rate decrease if economic data justifies it.
| 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: The EUR/USD may continue its upward movement if the ECB refrains from cutting rates and if Fed officials maintain a dovish stance. However, mixed euro area data could limit gains. Traders should watch for further signals from the ECB and Fed regarding future rate decisions.
GBPUSD
- Positive Momentum: The GBP/USD pair trades in positive territory for the seventh consecutive day, hovering near 1.3105 during the early European session on Friday.
- UK Economic Data: Preliminary UK Composite PMI data released on Thursday exceeded expectations, rising to 53.4 in August from 52.8 in July, which has boosted the British Pound.
- BoE Rate Expectations: Following the strong PMI data, markets are now pricing in less than a 30% chance of a Bank of England (BoE) rate cut in September, indicating investor confidence in the UK economy's resilience.
- US Dollar Weakness: Confidence that the US Federal Reserve will begin easing monetary policy at the September meeting continues to broadly undermine the US Dollar, supporting the GBP/USD pair.
- Jackson Hole Symposium: Attention is now focused on speeches by BoE Governor Andrew Bailey and Fed Chair Jerome Powell at the Jackson Hole Symposium on Friday, which may provide clearer guidance on the future path of interest rates.
| 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: The GBP/USD pair may continue its upward trajectory if the BoE maintains a hawkish stance and if Fed Chair Powell signals dovish intentions at Jackson Hole. However, any unexpected comments from these key central bank figures could lead to increased volatility. Traders should closely monitor the outcomes of the speeches for further clues on rate decisions.
GOLD
- Positive Rebound: Gold price is back in the green early Friday, building on Thursday's late rebound after a brief correction of about 1%.
- Thursday's Correction: The previous day's pullback in gold was driven by a strong rebound in the US Dollar from over one-year lows, following disappointing US S&P Global business PMIs and Jobless Claims data, which weighed on risk sentiment.
- USD/JPY Influence: Renewed selling pressure on the USD/JPY pair, triggered by Bank of Japan (BoJ) Governor Kazuo Ueda's hawkish comments before the parliament, has contributed to the ongoing weakness in the Greenback, providing support for the gold price.
- Fed Rate Cut Signals: Philadelphia Fed President Patrick Harker expressed his readiness to support a rate cut in September if the data aligns with his expectations, signaling a potential shift in monetary policy that could further weaken the US Dollar.
- Focus on Powell's Speech: All eyes are on Fed Chair Jerome Powell’s upcoming comments, which are crucial for determining the magnitude of the expected rate cuts and their impact on the US Dollar and gold price in the coming months.
Closing statement: The gold price could continue to recover if Fed Chair Powell’s comments at the Jackson Hole Symposium hint at a dovish shift in monetary policy. However, any indications of a less aggressive easing stance could limit the upside. Traders should remain attentive to Powell’s speech and any further developments in US economic data, as these will be key in driving short-term movements in the XAU/USD pair.
CRUDE OIL
- Limited Gains: West Texas Intermediate (WTI) US crude oil prices struggle to extend Thursday’s recovery from a two-week low, hovering in a narrow range just below the mid-$71.00s during Friday’s Asian session.
- Recession Concerns: A downward revision of the number of jobs added by US employers this year through March has reignited fears of a potential recession in the world's largest oil consumer, weighing on crude oil prices.
- China Slowdown Worries: Persistent concerns about an economic slowdown in China, the world's top oil importer, continue to exert downward pressure on oil prices.
- Supportive Factors: A significant drawdown in US crude inventories, reported by the government on Wednesday, and expectations of an interest rate cut by the Federal Reserve, which could boost economic activity, help to limit further losses in crude oil prices.
- Geopolitical Influence: Hopes for a ceasefire in Gaza contribute to capping the upside potential for crude oil, as reduced geopolitical risks typically lower the risk premium in oil prices.
| 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: Crude oil prices may remain under pressure due to ongoing concerns about economic slowdowns in both the US and China. However, the downside could be limited by positive factors such as the significant drawdown in US crude inventories and expectations of an interest rate cut by the Federal Reserve, which could boost demand. Traders should monitor developments in the US labour market, the Fed’s policy outlook, and geopolitical tensions in the Middle East for further cues on the direction of WTI prices.
DAX
- Bank Stocks Lead Gains: Bank stocks were the top performers in the DAX index, with Deutsche Bank surging by 4.00% and Commerzbank rising by 2.12%. The positive investor reaction was fueled by Deutsche Bank's settlement with plaintiffs over lawsuits related to the Postbank acquisition.
- Weak PMIs Fuel Rate Cut Speculation: Germany’s HCOB Services PMI fell from 52.5 in July to 51.4 in August, and the HCOB Manufacturing PMI declined from 49.1 to 48.5. The weakening economic data has reinforced expectations of a European Central Bank (ECB) rate cut in September.
- Slowing Wage Growth: Across the Eurozone, wage growth slowed from 4.74% in Q1 2024 to 3.55% in Q2 2024. This further fueled speculation about the potential for a rate cut from the ECB, as slower wage growth typically eases inflationary pressures.
- ECB Minutes Signal Rate Cut: The minutes from the ECB’s monetary policy meeting indicated that discussions around a rate cut could take place in September, raising hopes for a 25-basis point reduction.
- US Data Influence: In the US, initial jobless claims rose slightly from 228,000 in the week ending August 10 to 232,000 in the week ending August 17. Additionally, the S&P Global Services PMI improved marginally from 55.0 in July to 55.2 in August, reflecting resilient service sector activity.
| SMA (20) | Slightly Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX could see mixed movements in the near term as investors weigh the implications of the recent economic data and the likelihood of an ECB rate cut in September. However, weaker PMI readings and slowing wage growth may keep broader market gains in check. The upcoming ECB decision and further economic indicators will be crucial in determining the DAX's direction. Traders should also keep an eye on global economic data, particularly from the US, for additional market-moving insights.