FOMC Statement, U.S. Pending Home Sales, Canada GDP

The EUR/USD pair concluded Tuesday's session with slight declines around the 1.08150 mark. The decrease in the major pair is attributed to risk-aversion and Germany's weaker-than-expected preliminary Gross Domestic Product (GDP) for Q2. Traders are exercising caution and choosing to stay on the sidelines in anticipation of the Federal Reserve (Fed) Interest Rate Decision scheduled for later today.

According to the first estimate data released on Tuesday, the German economy contracted by 0.1% QoQ in the second quarter. Simultaneously, the annual Gross Domestic Product (GDP) rate witnessed a 0.1% contraction in Q2.

On the other hand, the Eurozone economy demonstrated growth of 0.3% in the three months leading up to the end of June, exceeding the market consensus of a 0.2% quarterly increase.

Looking ahead, the Fed is anticipated to maintain interest rates during its two-day policy meeting on Wednesday. However, market expectations point to the US central bank commencing policy easing at the subsequent meeting in September due to inflation decelerating at a faster rate than estimated in June.

Gold prices experienced a gain of over 1% on Tuesday, driven by investor optimism surrounding the potential for the U.S. Federal Reserve to provide indications of interest rate cuts in September at the conclusion of its policy meeting this week.

The Fed is anticipated to maintain its current interest rates at the end of its two-day meeting on Wednesday but could potentially signal a forthcoming policy easing as early as September. Additionally, traders are eagerly anticipating the release of several key U.S. employment reports scheduled for this week, with the pivotal non-farm payrolls report set to be unveiled on Friday.

Oil prices experienced a decline, reaching a seven-week low on Tuesday, primarily due to concerns among investors regarding weakening demand from China, alongside the indication that OPEC+ is likely to proceed with plans to increase supplies.

Furthermore, according to a Reuters poll, it is anticipated that manufacturing activity in China, the largest importer of crude globally, may have contracted for the third consecutive month in July.

Moreover, we anticipate the release of the weekly U.S. oil storage data by the American Petroleum Institute (API) trade group later today, with the U.S. Energy Information Administration (EIA) scheduled to provide their update tomorrow.

The US 500 and US Tech 100 closed lower on Tuesday, weighed down by weak chip and megacap shares ahead of earnings from heavyweight tech companies this week, but the US 30 managed modest gains.

The Fed kicked off its two meeting that is expected to culminate in an unchanged decision on interest rates Wednesday. But following a string of data showing inflation, investors will be looking for Fed Chair Jerome Powell to lay the groundwork for a September rate cut.

Microsoft Corporation fell more than 3% in afterhours trade after its fourth-quarter cloud revenue growth missed Wall Street estimates.

Advanced Micro Devices Inc surged over 8% in aftermarket hours, while rival NVIDIA Corporation added 5.4% after AMD clocked stronger-than-expected earnings and forecast upbeat revenue for the current quarter, citing strong demand from AI.