EURUSD
- EUR/USD Trading: EUR/USD continues to trade in a narrow range, holding above 1.0800 during Wednesday’s European session.
- Technical Outlook: The pair is trading below its 200-day Simple Moving Average (SMA) at around 1.0870, signalling a bearish bias with potential for further downside in the short term.
- US Fed Rate Cut Expectations: Markets are factoring in a 25-basis-point rate cut by the Fed in the coming month, although there is caution. FOMC members like Governor Michelle Bowman and Atlanta Fed President Raphael Bostic have voiced scepticism, with Bostic even suggesting a potential delay in a rate cut, adding uncertainty to the outlook for the US Dollar.
- ECB’s Rate Cuts: Within the ECB, views are divided. Robert Holzmann supports a quarter-point cut in December, while Bostjan Vasle calls for "measured" adjustments and warns against premature rate easing.
- Upcoming Economic Data: Key releases ahead include the US Q3 GDP growth rate and ADP employment data, along with Germany’s flash inflation figures. These indicators could drive sentiment for EUR/USD and influence expectations around Fed and ECB policies.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: EUR/USD remains range-bound below a critical technical level, with mixed signals from both the Fed and ECB fuelling a cautious outlook. Upcoming US and German economic data will likely shape near-term sentiment and influence policy rate expectations.
GBPUSD
- GBP/USD Price: GBP/USD is trading cautiously around the 1.3000 level in European markets on Wednesday. The 100-day Simple Moving Average (SMA) at 1.2970 remains a pivotal support level, with traders closely monitoring price action around this benchmark.
- US JOLTS Data: On Tuesday, the US Bureau of Labor Statistics (BLS) reported 7.443 million job openings in the Job Openings and Labor Turnover Survey (JOLTS), down from 7.861 million in August.
- Fed Expectations: With softer job market data, economists expect the Fed to cut interest rates by 25 basis points on November 7, with over 90% predicting an additional quarter-point cut in December.
- UK Autumn Budget: The UK government is preparing to deliver its first Labour Budget in nearly 15 years. Chancellor Rachel Reeves may announce £40 billion in tax hikes and spending cuts to address fiscal policy. The impact of this budget on investor sentiment toward the GBP will be a key focus for traders.
- Upcoming Data Releases: With major economic data releases scheduled, including the US ADP jobs report and Q3 advance GDP report later today, investors remain cautious. These releases will provide further insight into the US labor market and growth outlook, influencing the Fed’s rate path and GBP/USD sentiment.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: GBP/USD is on a cautious path ahead of critical UK and US economic developments. With technical support near 1.2970 and the UK’s budget on the horizon, traders are taking a wait-and-see approach, while upcoming US economic data is expected to shape expectations for Fed policy and market direction.
GOLD
- Record Highs: Gold extends its upward momentum on Wednesday, reaching a fresh record high in the European session. This surge builds on recent breakout momentum, highlighting robust demand for the precious metal amid heightened uncertainty.
- US Consumer Confidence Data: The Conference Board Consumer Confidence Index climbed to 108.7 in October, up from 99.2 in September. The Present Situation Index increased to 138.0, while the Expectations Index rose to 89.1, surpassing the recession indicator threshold of 80.
- US Job Data: Although encouraging, this optimism was moderated by softer job market indicators, with 7.44 million job openings in September per the JOLTS report from the Bureau of Labor Statistics.
- Safe-Haven Demand: Persistent geopolitical tensions in the Middle East and uncertainties surrounding the US presidential election continue to bolster gold’s appeal as a safe-haven asset. The demand for gold is likely to remain elevated as investors seek refuge from potential economic and political volatility.
- Upcoming US Data: Investors remain cautious as they await critical economic data, including Q3 GDP and Nonfarm Payrolls (NFP) on Friday. These releases will provide insights into the US economic outlook, potentially influencing the Federal Reserve’s monetary policy decisions and further impacting XAU/USD.
Closing statement: Gold maintains its bullish momentum, driven by safe-haven flows and recent breakout above key levels. With strong technical positioning and geopolitical risks underpinning demand, attention now turns to upcoming US economic indicators for additional direction. XAU/USD could see continued strength if US data signals further economic uncertainty or moderates Fed rate cut expectations.
CRUDE OIL
- Crude Price: WTI crude oil prices hover around $67.60 in Wednesday’s European session, stabilizing after two consecutive days of declines. The recent fluctuations reflect market sensitivity to geopolitical developments and supply-demand dynamics.
- US Crude Stockpiles: According to the American Petroleum Institute (API), US weekly crude stockpiles decreased by 0.573 million barrels for the week ending October 25. This decline contrasts with expectations of a 2.3-million-barrel build, signaling possible supply tightness and offering slight price support.
- Geopolitical News: Oil faced downward pressure on Tuesday amid reports suggesting that Israeli Prime Minister Benjamin Netanyahu may pursue a diplomatic resolution to the Lebanon conflict. This narrative, reported by an Axios journalist via Reuters, has eased some concerns about extended disruptions in the Middle East, alleviating part of the recent risk premium on oil prices.
- US Reserve Purchases: The US government’s plan to purchase up to 3 million barrels for the Strategic Petroleum Reserve (SPR), with delivery by May 2024, has bolstered WTI prices, providing potential demand-side support in the face of recent declines.
- OPEC+ Production Easing: Crude oil faces potential headwinds with OPEC+ set to ease production cuts in December, allowing for an increase of 180,000 barrels per day (bpd). This supply-side boost may weigh on prices unless balanced by stronger demand or additional supply disruptions.
| 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: WTI prices are navigating a complex landscape, with recent inventory data and SPR purchases offering support, while geopolitical developments and the looming OPEC+ production increase introduce downside risks. Near-term price action may hinge on Middle Eastern diplomatic outcomes and US inventory trends, with WTI remaining sensitive to broader market conditions.
DAX
- DAX Price: The DAX index retreated by 0.27% on Tuesday, giving back part of Monday’s 0.35% gain. This pullback reflects investor concerns over rising costs in key sectors, particularly as strikes impact German automakers.
- Auto Stocks: The auto sector faced extended losses on Tuesday, driven by investor worries about ongoing strikes affecting German car manufacturers. Notably, Volkswagen and Porsche declined by 3.20%, BMW dropped 1.62%, and Mercedes- Benz Group slid 0.84%. These losses highlight the sector’s sensitivity to labor disruptions and potential production slowdowns.
- German Consumer Confidence: Despite the dip in the DAX, Germany’s GfK Consumer Climate survey showed a positive shift in consumer confidence, rising from -21.0 in October to -18.3 for November. Increased income expectations and a higher willingness to buy suggest a potential boost to domestic demand, which may aid the German economy’s outlook.
- GDP for Germany and Eurozone: On Wednesday, the focus will shift to Q3 2024 GDP numbers for both Germany and the Eurozone. Economists predict Germany’s economy will contract by 0.1% for a second consecutive quarter, indicating a possible technical recession, while the Eurozone is expected to post modest growth of 0.2%, reflecting resilience amid regional challenges.
- US Economic Indicators: Investors are also eyeing Wednesday’s US ADP employment change and Q3 GDP numbers for direction. US employment growth is expected to ease to 115,000 jobs in October from 143,000 in September, while US GDP is forecast to expand by 3.0% in Q3 2024. These reports will influence global market sentiment and could affect DAX trading based on implications for US monetary policy.
| 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 DAX faces headwinds from challenges in the auto sector and potential economic contraction in Germany. However, improving consumer sentiment offers a silver lining, suggesting resilience in domestic demand. Upcoming GDP and employment data in Germany, the Eurozone, and the US will likely guide market sentiment, with DAX participants closely watching for signals of broader economic trends.