EUR/USD Price Analysis – Dec 30, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair struggled to hold onto its modest gains and edged lower around the 1.0415 level, hitting an intraday low of 1.0409.
This downward move can largely be attributed to a combination of factors, including the thin trading volume due to year-end liquidity, which is common during the holiday season.
Moreover, the Euro has also faced bearish pressure in the final months of 2024, with a near 5.5% decline against the US Dollar (USD) as the European Central Bank (ECB) stuck to its dovish stance on interest rates, disappointing investors who had hoped for a more aggressive approach to combat inflation.
Meanwhile, the concerns over the Eurozone’s economic health have been mounting, particularly with the threat of tariff hikes under US President-elect Donald Trump. These tariffs are expected to negatively impact the Eurozone’s export-driven economy.
US Dollar Strength and Its Impact on EUR/USD Amid Economic Data and Fed Expectations
On the US front, the broad-based US dollar has been gaining strength, consolidating near a four-day support level as trading volume remains thin during the year-end period.
The Greenback is on track to close the year near its highest level, with higher Treasury yields providing a strong boost.
US bond yields have been rising recently as investors expect the policies under President-elect Trump, like higher tariffs and tax cuts, to drive economic growth and inflation.
The Fed has already signaled fewer interest rate cuts for 2025 in its latest projections, with Federal Fund rates expected to be around 3.9% by the end of the year.
After a hawkish rate cut in December, Goldman Sachs predicts the Fed will cut rates again in March, with two more cuts expected in June and September.
This week, investors are focused on the US ISM Manufacturing Purchasing Managers’ Index (PMI) data for December, due on Friday. The PMI is expected to drop slightly to 48.3 from 48.4, indicating that manufacturing output is slowing down at a slightly faster pace.
Therefore, the strengthening US dollar, driven by higher Treasury yields and Fed policy expectations, puts downward pressure on the EUR/USD pair.
ECB’s Dovish Policy and US Tariff Concerns Weigh on the Euro
On the EUR front, the EUR/USD currency pair is set to close the year with a nearly 5.5% decline against the US Dollar, largely due to the European Central Bank’s (ECB) dovish stance on interest rates.
The Euro has been especially weak in the last three months of 2024, as market participants are concerned about the Eurozone’s economic growth.
This worry is compounded by the incoming tariff hikes from US President-elect Donald Trump, which are expected to negatively impact the Eurozone’s export sector.
The ECB has already lowered its Deposit Facility rate by 100 basis points to 3% this year, and it’s expected to cut it further to 2% by the middle of 2025.
This would indicate that the ECB plans to lower its key borrowing rates by 25 basis points at each meeting during the first half of next year.
Many ECB officials are concerned about inflation falling below their target of 2%, particularly with the political uncertainty in Germany and potential trade tensions with the US.
Therefore, the ECB's dovish stance and anticipated rate cuts, combined with concerns over Eurozone growth and US trade tensions, are likely to weaken the Euro further.
As a result, EUR/USD is expected to remain under pressure, potentially leading to continued declines.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04223, up 0.03% in the latest session, reflecting mild bullish sentiment as the pair hovers just below its pivot point at $1.04430. This level serves as a critical juncture for directional movement.
A sustained move below the pivot suggests bearish momentum, with immediate support at $1.03843 and further downside targets at $1.03430 and $1.03003.
Resistance levels are clustered at $1.04753, $1.05029, and $1.05453, forming a significant barrier for any upward movement.
The Relative Strength Index (RSI) at 54 indicates neutral to slightly bullish momentum, with no signs of overbought conditions. Meanwhile, the pair is trading slightly above the 50 EMA, which sits at $1.04117, signaling modest support for short-term gains.
The 4-hour chart reveals consolidation near the pivot point, suggesting indecision among traders. A sell strategy below $1.04427 with a target of $1.03836 and a stop loss at $1.04752 aligns with current technical trends.
However, a decisive breakout above $1.04430 could pave the way for testing the resistance at $1.04753. Market participants should remain vigilant as the pair navigates this critical zone, with key U.S. data releases likely to shape sentiment.
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EUR/USD Price Analysis – Dec 27, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair gained some slight bullish traction, holding around the 1.0432 level.
However, the outlook for the Euro (EUR) remains weak, with market expectations that the European Central Bank (ECB) will continue its gradual interest rate cuts well into the first half of 2025.
As a result, the pair has been struggling to find clear direction, moving within a narrow range near 1.0400. Thin trading volumes, due to the Christmas holiday, have also contributed to the lack of significant movement in the pair.
On the other hand, the US Dollar (USD) has seen a small uptick, fueled by expectations that the Federal Reserve (Fed) will continue its gradual approach to policy easing, especially after inflation showed some signs of rebounding over the past few months.
With both central banks likely to follow divergent paths, EUR/USD remains stuck in this indecisive pattern as traders await clearer signals for the next move.
Euro Outlook Weighed Down by ECB Rate Cuts, Limiting EUR/USD Upside Potential
On the EUR front, the shared currency is struggling as the overall outlook for the Euro (EUR) remains negative. The European Central Bank (ECB) is expected to continue cutting interest rates at the current pace until mid-2025.
The ECB has already lowered its Deposit Facility rate by 100 basis points (bps) this year and is anticipated to reduce it by another 100 bps in the coming year. This is due to inflation in the Eurozone being more under control, although it is still above the ECB's target of 2%.
ECB President Christine Lagarde expressed confidence that inflation is moving in the right direction, saying that they are "very close" to achieving their 2% medium-term target.
However, she emphasized the need to remain cautious about inflation in the services sector. Recent comments from ECB officials suggest that they are aligned with market expectations of further rate cuts, aiming to bring the benchmark deposit rate down to 2%, which they consider a neutral level.
This cautious approach is meant to prevent inflation from falling too far below the target, which could pose risks to the economy.
Therefore, the ECB's continued interest rate cuts and cautious stance on inflation are likely to keep the Euro (EUR) under pressure, leading to limited upside potential for the EUR/USD pair. As a result, the pair may struggle to break higher levels.
US Dollar Strengthens Amid Gradual Fed Easing Expectations and Positive Job Data
On the US front, the broad-based US Dollar has been showing strength, trading higher as the market anticipates a gradual policy easing by the Federal Reserve (Fed).
Despite the slight rebound in inflation over the past three months, expectations for a slowdown in the Fed's interest rate cuts have kept the USD steady.
Recently, the Fed’s updated dot plot suggested two rate cuts in 2025, a revision from the four cuts previously expected. This has helped keep the USD in positive territory, as markets expect the economy to show solid growth under President-elect Donald Trump’s administration.
On the economic front, the latest data has been slightly better than expected. For the week ending December 20, initial jobless claims dropped unexpectedly to 219K, lower than the 220K recorded previously and better than the expected 224K.
Despite the positive job market data, analysts at BCA Research predict that the Fed will eventually cut rates by more than 50 basis points (bps) next year due to expectations that inflation will remain below the Fed’s 2% target and the unemployment rate will rise higher than forecasted. These factors suggest a more cautious outlook for the economy moving forward.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.04100, down 0.10% in the last session, as the pair remains under pressure near its pivot point at $1.04430.
Immediate resistance is located at $1.05029, with further resistance levels at $1.05453 and $1.05972. To confirm a bullish recovery, the pair must break and sustain above these levels.
However, the current bias suggests more downside risks. Immediate support lies at $1.03430, with subsequent levels at $1.03033 and $1.02722.
A break below $1.04424 could signal additional selling pressure, targeting $1.03626 in the short term. If bearish momentum persists, the pair may test deeper support levels at $1.03033 or even $1.02722.
Conversely, a recovery above $1.05029 would neutralize the bearish bias, paving the way for a potential upside toward $1.05453.
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- GOLD Price Analysis – Dec 27, 2024
GOLD Price Analysis – Dec 27, 2024
Daily Price Outlook
Gold prices (XAU/USD) extended their bearish trend, trading under pressure around the 2,629 level and reaching an intraday low of 2,628.
The decline can be attributed to a strengthening US Dollar (USD), bolstered by rising expectations of fewer interest rate cuts by the US Federal Reserve (Fed).
In its December meeting, the Fed reduced rates by a quarter point and revised its 2025 outlook, projecting only two rate cuts instead of the previously anticipated four. Despite the bearish momentum, ongoing geopolitical tensions continue to provide some support for the precious metal's value.
Impact of Stronger US Dollar and Fed's Hawkish Outlook on Gold Prices
On the US front, the broad-based US Dollar (USD) is gaining strength due to growing expectations that the Federal Reserve (Fed) will cut interest rates less aggressively.
During its December meeting, the Fed reduced rates by a modest quarter point and revised its 2025 forecast, now projecting just two rate cuts instead of the previously expected four. This hawkish outlook has provided strong support to the USD, making it more attractive to investors and putting pressure on gold prices.
The US Dollar Index (DXY), which tracks the value of the USD against six major currencies, is currently trading above 108.00, just below its highest level since November 2022.
However, the potential for further upside in the USD could be limited, as 2-year and 10-year yields on US Treasury bonds remain relatively low at 4.32% and 4.57%, respectively.
This could cap the Greenback’s strength and offer some support to gold, which remains sensitive to moves in the USD and interest rates.
Therefore, the strengthening US Dollar, driven by a more hawkish Fed outlook, pressures gold prices as investors favor the USD.
However, subdued US Treasury yields may limit further USD gains, providing some support for gold, which remains sensitive to currency moves.
GOLD (XAU/USD) – Technical Analysis
Gold is trading at $2,635.20, up 0.04% on the day, reflecting continued consolidation around its pivot point of $2,632.02.
The 4-hour chart highlights a cautiously bullish tone as the price remains supported above the 50-day EMA at $2,620, with the Relative Strength Index (RSI) at 60, indicating moderate bullish momentum.
Immediate resistance is positioned at $2,650.06, followed by key levels at $2,664.89 and $2,678.42. A break above $2,650.06 could signal further upside, with the potential to test the upper resistance zones.
Conversely, immediate support lies at $2,607.94, with deeper safety nets at $2,593.70 and $2,577.23 if bearish momentum re-emerges.
Gold’s recent price action indicates a stable upward trend, supported by the 50-day EMA. The technical setup suggests buying opportunities above $2,632, targeting $2,650, while a break below $2,620 could trigger bearish sentiment.
Traders should monitor resistance levels closely, as a decisive move above $2,650 may strengthen the bullish outlook.
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S&P500 (SPX) Price Analysis – Dec 27, 2024
Daily Price Outlook
The S&P 500 index is trading at 6,037, down slightly on the day, and touching an intraday low of 6,007. The downward momentum reflects growing concerns among investors, driven by a mix of factors including economic uncertainty, Federal Reserve policies, and geopolitical risks.
Recent data indicates that U.S. consumer spending rose by 0.4% in November, reflecting strong demand for goods and services. The labor market also showed resilience, with employers adding 227,000 jobs in November, rebounding from slower growth in the prior month.
However, corporate profits have experienced fluctuations, with a decrease to $3,128.50 billion in the third quarter from $3,141.56 billion in the second quarter. These mixed signals contribute to investor uncertainty in equity markets.
Federal Reserve’s Monetary Policy Adds to Bearish Tone
The Federal Reserve's recent decision to cut interest rates by a quarter point, coupled with its projections for only two additional rate cuts in 2025, has introduced uncertainty into the markets.
This cautious stance has led to increased borrowing costs for businesses, potentially squeezing profits and dampening investor enthusiasm.
Consequently, investors are becoming more selective, favoring defensive sectors over growth stocks, which has contributed to the downward pressure on the S&P 500 index.
Following the Fed's announcement, the S&P 500 experienced a significant decline, marking its worst performance on a Fed decision day since 2001. The index fell nearly 3%, reflecting investor concerns about the slower pace of rate cuts and the potential impact on corporate earnings.
Geopolitical Tensions Weigh on S&P 500 Performance
On the geopolitical front, the tensions continue to significantly influence the performance of the S&P 500 index. Escalating conflicts in Eastern Europe and the Middle East have heightened risk aversion among investors. These uncertainties have raised concerns about potential disruptions to global trade, leading to a shift in capital toward safe-haven assets such as the US Dollar.
This shift has resulted in reduced appetite for equities, including the S&P 500, contributing to its downward trend.
Furthermore, the fears of energy supply disruptions, particularly in regions affected by geopolitical instability, have further weighed on market sentiment. As concerns grow over the potential for higher energy prices and broader economic implications, investors remain cautious.
The heightened geopolitical risks, coupled with ongoing economic uncertainties, have caused volatility in the S&P 500, making it more susceptible to declines as investors seek safer investment options.
Looking ahead, geopolitical risks are expected to remain a significant factor in shaping market sentiment and investor behavior, continuing to exert pressure on equity markets, including the S&P 500 index.
S&P 500 – Technical Analysis
The S&P 500 index is trading at 6037.58, down slightly by 0.04%, reflecting a cautious tone near the pivot point at 6047.03. On the 4-hour chart, the index shows signs of consolidation above the 50-day EMA at 6020.59, with the RSI at 58 indicating moderate bullish momentum, though strength appears to be fading.
Immediate resistance is seen at 6092.04, followed by 6140.58 and 6192.73. A sustained move above these levels would signal renewed bullish momentum and potential for further gains. On the downside, support lies at 5982.79, with deeper levels at 5906.16 and 5841.25.
A break below 6045 could trigger additional selling pressure, pushing the index toward 5980 and possibly lower. Alternatively, holding above the pivot at 6047.03 could reignite upward momentum, with bulls targeting resistance at 6092.04. Traders should watch these levels closely, as a breakout will provide clarity on the next trend.
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USD/JPY Price Analysis – Dec 26, 2024
Daily Price Outlook
During the European trading session, the USD/JPY pair remains on an upward trend, trading near multi-month highs around 157.55 level, driven by a combination of factors.
However, the Federal Reserve's hawkish stance has been a key driver, as it continues to signal a commitment to maintaining elevated interest rates to combat inflation.
This has widened the US-Japan interest rate differential, favoring the higher-yielding USD over the Japanese Yen (JPY). In addition, strong US economic indicators, including robust Treasury yields, have further bolstered the demand for the greenback.
Another factor is the Bank of Japan's (BoJ) cautious approach to tightening monetary policy. Despite recent inflation data from Japan showing resilience, the BoJ has reiterated its gradual stance on rate hikes.
Governor Kazuo Ueda has emphasized the need for more data on wage growth before committing to aggressive rate adjustments. This uncertainty surrounding the BoJ's actions has made the JPY less attractive to investors.
The broader market sentiment also leans in favor of the USD/JPY pair. A generally positive risk tone has reduced demand for safe-haven assets like the JPY. Meanwhile, the US Dollar has maintained its strength, even shrugging off slightly weaker US consumer confidence data.
BoJ's Dovish Policies Keep JPY Struggling
On the BOJ front, the BoJ's cautious monetary policies are weighing heavily on the Japanese Yen. Minutes from the central bank's October meeting highlighted a deliberate and measured approach to rate hikes, potentially extending into late fiscal 2025.
While there is speculation about a possible rate increase in January or March, markets remain doubtful about any immediate action.
Japan's Finance Minister, Katsunobu Kato, has raised concerns about recent currency volatility and hinted at potential interventions.
However, such warnings have done little to provide a sustained boost to the Yen, as investors remain focused on the growing divergence between US and Japanese interest rates.
Geopolitical Risks and Intervention Concerns
Despite the bullish momentum of the USD/JPY pair, fears of Japanese authorities intervening in the currency markets have capped the pair's upside potential. Additionally, geopolitical uncertainties and trade war fears create a mixed outlook for the JPY.
While these factors have kept some traders cautious, the overall trend for the USD/JPY pair remains upward, supported by the Fed's firm stance and the BoJ's slow-paced policy shifts.
USD/JPY – Technical Analysis
The USD/JPY is trading at 157.361, up 0.04%, reflecting a slight upward momentum. The pair remains above the pivot point at 156.932, signaling bullish potential if it maintains this level.
Immediate resistance lies at 157.923, with higher targets at 158.742 and 159.672 if the bullish trend continues. On the downside, immediate support is located at 155.965, with subsequent levels at 155.004 and 154.152, which could be tested if the pair reverses lower.
The Relative Strength Index (RSI) stands at 65, indicating strong bullish momentum but nearing overbought territory.
The 50-day Exponential Moving Average (EMA) at 156.769 supports the upward trend, serving as a key dynamic support level. Traders should watch for a decisive move above the immediate resistance at 157.923 to confirm further gains.
The pair’s price action suggests a positive bias, but caution is warranted as the RSI nears overbought levels. Holding above the pivot at 156.932 reinforces bullish momentum, with the potential to challenge higher resistance zones.
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- AUD/USD Price Analysis – Dec 26, 2024
AUD/USD Price Analysis – Dec 26, 2024
Daily Price Outlook
During the European trading session, the AUD/USD pair struggled for the second day in a row on Thursday, weighed down by a stronger US Dollar and the Reserve Bank of Australia's (RBA) December meeting minutes.
The US Dollar bounced back after a steep decline, as Federal Reserve officials hinted at fewer rate cuts next year, pointing to a slowdown in easing inflation. This recovery pushed the dollar close to a two-year high, putting pressure on the Aussie and other Asian currencies.
US Economic Data and Fed's Stance Strengthen US Dollar, Weighing on AUD/USD Pair
On the US front, the broad-based US Dollar rebounded after a sharp sell-off, as Federal Reserve officials signaled fewer interest rate cuts next year due to a slowdown in the disinflation process. However, soft US PCE data have kept inflation concerns in check, leading to a mixed economic outlook.
According to the CME FedWatch tool, markets now expect a nearly 93% chance that the Federal Reserve will keep interest rates unchanged in January, maintaining the current range of 4.25%-4.50%.
US Durable Goods Orders for November came in weaker than expected, falling by 1.1% compared to the forecasted 0.4% drop. This follows an upward revision in October, which saw a 0.8% increase, up from an initial 0.2% gain.
Meanwhile, US Consumer Confidence dropped 8.1 points in December to 104.7, signaling that the earlier rebound in consumer confidence was not sustained.
Concerns over President-elect Trump’s economic policies, particularly around tariffs, have added to household worries about rising living costs.
These concerns were further reflected in the Federal Open Market Committee's projections, which suggested fewer rate cuts in 2025 due to persistent inflation pressures.
Cleveland Fed President Beth Hammack noted that she prefers to keep interest rates steady until there is more evidence of inflation heading back to the Fed’s 2% target.
Meanwhile, Chicago Fed President Austan Goolsbee revised his forecast for 2025, expecting fewer rate cuts than previously anticipated.
US core PCE inflation rose 2.8% year-over-year, slower than expected, while monthly inflation grew by just 0.1%, showing moderate price increases. This mixed data adds to the pressure on the AUD/USD pair.
Therefore, the mixed US economic data, along with expectations for fewer rate cuts, strengthens the US Dollar, putting downward pressure on the AUD/USD pair.
The market's uncertainty about inflation and interest rates further intensifies bearish sentiment for the Aussie Dollar.
AUD/USD – Technical Analysis
The AUD/USD is trading at $0.62369, up 0.07% in the last session, reflecting cautious market sentiment. The pair remains below the pivot point of $0.62511, signaling potential bearish pressure unless it breaks above this level.
Immediate resistance lies at $0.63068, followed by $0.63420 and $0.63812, which could act as key upside targets if the bullish momentum strengthens. On the downside, support is located at $0.62004, with additional levels at $0.61565 and $0.61090, which could be tested if selling pressure intensifies.
Technical indicators paint a mixed picture. The RSI is at 48, reflecting a neutral sentiment with a slight bearish inclination.
The 50-day Exponential Moving Average (EMA) at $0.62391 is near the current price, providing a dynamic resistance level that aligns with the broader downward bias. A failure to reclaim $0.62511 could result in a deeper pullback toward $0.62004 or lower.
The pair’s price action is likely to hinge on the $0.62511 pivot point. A sustained move above this level would indicate recovery potential, targeting $0.63068, while a rejection may confirm further downside. Traders may consider a sell limit order at $0.62518, targeting $0.62008, with a stop loss at $0.62853 to manage risk effectively.
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- GOLD Price Analysis – Dec 26, 2024
GOLD Price Analysis – Dec 26, 2024
Daily Price Outlook
Gold prices saw a slight increase in European trading session on Thursday, supported by a weaker US dollar. This came as markets resumed trading after the Christmas holiday.
Investors remained cautious, especially following the US Federal Reserve's recent hawkish stance on interest rates, which has caused some uncertainty in the market. Meanwhile, the market experienced lower trading volumes due to the holiday-shortened week, with fewer traders making significant moves.
US Dollar Strength and Its Impact on Gold Prices
On the US front, the broad-based US dollar was slightly weaker in early trading, yet it remained close to a two-year high. The dollar's strength had been bolstered by the Federal Reserve’s recent decision to maintain high interest rates.
When the Fed raises rates, it makes the US dollar more attractive to investors, as they can earn higher returns on dollar-based assets. This puts pressure on gold prices, as a stronger dollar makes gold more expensive for buyers using other currencies.
Geopolitical Tensions Support Gold as a Safe Haven
Gold is often viewed as a safe-haven asset, especially during times of uncertainty. Geopolitical tensions in the Middle East, including ongoing conflicts between Hamas and Israel, have also played a role in boosting gold prices.
Notably, the two sides accused each other of blocking a potential ceasefire deal, which added to global instability. As a result, investors often turn to gold as a protective asset, driving up its demand and pushing prices higher.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,626.63, up 0.37% in the last session, reflecting bullish momentum. The price has surpassed the pivot point at $2,620.48, signaling potential strength as it approaches the immediate resistance at $2,633.23.
A successful breakout above this level could propel the price toward the next resistance zones at $2,650.09 and $2,664.89. However, if the price fails to hold above $2,620.48, immediate support is observed at $2,608.45, followed by $2,588.62 and $2,573.39.
Technical indicators support a bullish outlook. The RSI is at 58, indicating moderate upward momentum without reaching overbought levels.
Meanwhile, the 50-day Exponential Moving Average (EMA) at $2,614.11 acts as a strong support level, aligning with the current price action. This setup suggests continued bullish bias if gold maintains levels above $2,620.
Traders should monitor the price behavior near $2,633.23. A break above could trigger additional buying interest, targeting $2,650.09, while failure to sustain above $2,620 might lead to a consolidation phase or slight pullback.
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GOLD Price Analysis – Dec 25, 2024
Daily Price Outlook
Gold prices have remained resilient around $2,611 during the European trading session, despite the growing strength of the US Dollar. The metal finds support from a cautious outlook on US interest rates, with investors recalibrating their expectations for 2025.
The Federal Reserve’s guidance for slower rate cuts next year has been a key factor driving market sentiment. Amid this, gold has managed to hold its ground as traders navigate a mixed economic landscape shaped by inflation concerns and geopolitical uncertainty.
US Dollar Strengthens, But Gold Holds Ground
The US Dollar has rebounded following a sharp sell-off, largely due to the Federal Reserve’s more conservative stance on rate cuts. While the Fed has adjusted its rate-cut expectations for 2025, signaling that only two rate cuts are likely next year, the broader outlook for the dollar remains firm.
The US Dollar Index (DXY) has stayed above 108.00, supported by the Fed’s projection for a more gradual approach to easing, with the federal funds rate expected to reach 3.9% by the end of 2025.
For gold, this strengthening dollar hasn’t led to major declines. Gold tends to have an inverse relationship with the US Dollar, but the precious metal’s resilience can be attributed to investors seeking a safe haven amid inflationary pressures and uncertain global economic conditions. As the Fed manages inflation slowly, traders are adjusting their positions with gold as a protective asset.
Fed's Slower Rate Cuts Create a Stable Environment
The Fed's decision to reduce the pace of rate cuts reflects ongoing inflation concerns and uncertainties surrounding the future direction of US economic policies.
The latest data points to a slower-than-expected disinflation process, while broader economic forecasts remain cautious. As a result, market participants have adjusted their expectations, resulting in a more stable environment for gold.
At the same time, soft US economic data, including weaker-than-expected durable goods orders and a decline in the US Consumer Confidence Index, has tempered inflation worries, further supporting gold prices.
Investors will continue to keep a close eye on the Fed’s moves, particularly its stance on inflation and interest rates.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is currently trading at $2,616.87, up by 0.16%, and consolidating within a narrow range. The price is hovering just above the pivot point of $2,610.27, indicating potential bullish movement if the price breaks above this level.
Immediate resistance is at $2,633.24, followed by $2,651.64 and $2,664.89, marking key upside targets for a continuation of the bullish trend. On the downside, support is located at $2,588.03, with further levels at $2,573.39 and $2,556.29, providing potential buffers against a bearish reversal.
The 50-day Exponential Moving Average (EMA) at $2,612.15 is also supporting the price, reinforcing the potential for upward movement.
The Relative Strength Index (RSI) is at 50, signaling neutral momentum, with no clear trend direction. This suggests that gold is currently in a consolidation phase, and the market will likely remain range-bound until a decisive breakout occurs.
Traders should focus on the pivot point and the resistance levels to determine whether a bullish or bearish trend will emerge.
In conclusion, if gold maintains momentum above $2,610.27, it could target higher levels, with the immediate focus on $2,633.24. However, a failure to hold above the key support at $2,588.03 could trigger a retracement toward the lower support zones.
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- EUR/USD Price Analysis – Dec 25, 2024
EUR/USD Price Analysis – Dec 25, 2024
Daily Price Outlook
The EUR/USD currency pair is currently trading at 1.03912, reflecting a slight decline of 0.13%. This downward movement comes as the US Dollar (USD) continues to exert pressure on the Euro, with market volatility subdued due to the holiday season.
The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, is hovering just above the key 108.00 level, maintaining a steady range.
As traders prepare for a quiet market in the coming days, the broader outlook for the USD remains firmly positive, supported by the Federal Reserve's monetary policies and expectations of fewer interest rate cuts in 2025.
US Dollar Outlook: Fed's Slower Rate Cuts Boost Dollar
The Federal Reserve's recent guidance has significantly influenced the USD's strength. The central bank has indicated that it will slow the pace of interest rate cuts in 2025, with only two rate reductions planned, down from the previous projection of four.
As the Fed seeks to balance inflation control with economic growth, analysts, including those at UBS, predict that the Fed will deliver two 25-basis point cuts in the middle of the year.
The more gradual easing is due to persistently high inflation and a labor market that has shown more resilience than expected. This dovish approach has strengthened the US Dollar, which remains firm even as the global economic landscape shows signs of slowing.
EUR/USD: ECB's Dovish Stance Keeps Euro Under Pressure
The Euro continues to face headwinds, primarily due to the European Central Bank's (ECB) cautious stance on inflation and growth. ECB President Christine Lagarde recently indicated that the bank is nearing its inflation target of 2%, but warned that the services sector remains a point of concern.
With Eurozone inflation easing to 2.2%, services inflation remains elevated at 3.9%. This has raised concerns about the pace of monetary tightening in the region. Traders are betting on potential rate cuts by the ECB, with expectations for a 25-basis point reduction in each of the next four policy meetings.
GOLD (XAU/USD) – Technical Analysis
The EUR/USD is trading at 1.03912, showing a slight decline of 0.13% as it continues to face downward pressure. The pair is holding just below the critical pivot point at 1.04042, with immediate resistance at 1.04480, followed by 1.04973 and 1.05649.
These resistance levels are key for any potential bullish reversal, but the current trend remains bearish as the price is unable to break above the pivot point.
On the downside, immediate support is found at 1.03430, with further support levels at 1.03033 and 1.02722. The 50-day Exponential Moving Average (EMA) at 1.03957 is in close proximity, adding to the consolidation near the current price.
The RSI is at 44, indicating bearish momentum, with no signs of oversold conditions yet, suggesting that the price could continue its downward trajectory if it fails to hold above the support levels.
The market remains cautious, with volatility driven by economic data and geopolitical events. If EUR/USD fails to break above 1.04042, further downside could lead to a retest of the lower support levels.
However, a break above the immediate resistance at 1.04480 could shift the market sentiment, but this seems unlikely unless there is a significant shift in the underlying fundamentals.
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GBP/USD Price Analysis – Dec 25, 2024
Daily Price Outlook
The GBP/USD pair saw a modest uptick, reaching 1.2550, amidst light trading volume this week due to the approaching Christmas holidays. The market has been consolidating, showing little movement as traders adjust to the seasonal slowdown.
Meanwhile, the US Dollar Index (DXY) remains largely flat, holding above 108.00, as investors await fresh economic data. Despite the holiday lull, the broader outlook for the US Dollar continues to be bullish, supported by expectations of a more gradual pace of rate cuts by the Federal Reserve.
Fed's Cautious Approach to Rate Cuts Supports USD
The US Dollar has remained resilient, largely due to the Federal Reserve's recent shift towards a more cautious approach to interest rate cuts.
The Fed's officials have signaled that fewer cuts will be implemented next year, reflecting a slower-than-expected disinflation process and ongoing uncertainty regarding President-elect Donald Trump's economic policies.
According to the latest projections, the federal funds rate could fall to 3.9% by the end of 2025, with only two rate cuts anticipated next year. This shift in expectations supports the US Dollar, as markets recalibrate for a more measured approach from the central bank.
Economic Data to Impact GBP/USD
The upcoming economic data will likely drive volatility in the GBP/USD pair. On Thursday, the US will release Initial Jobless Claims, with economists expecting a slight decline to 218K from the previous 220K.
This could impact the US Dollar as traders assess labor market conditions. Additionally, the Nonfarm Payrolls report for December, due in early January, will be a key focal point for investors. Strong employment data could further solidify the Fed's cautious stance on rate cuts, providing continued support for the US Dollar.
GBP/USD – Technical Analysis
The GBP/USD is currently trading at 1.25296, showing a modest 0.01% decline. The pair is hovering just below the critical pivot point of 1.25653, with immediate resistance at 1.26586 and further resistance at 1.27292 and 1.27819.
These resistance levels will need to be breached for any potential bullish movement, but the overall sentiment remains bearish.
Immediate support is found at 1.24764, followed by 1.24237 and 1.23771. The 50-day Exponential Moving Average (EMA) sits at 1.25511, signaling a neutral-to-bearish trend in the short term.
The Relative Strength Index (RSI) at 45 reflects a neutral to slightly bearish momentum, with no clear signs of a reversal at this point.
The market is looking for direction, and a breach below 1.24764 could trigger further declines toward the next support levels.
On the flip side, if GBP/USD manages to break above the immediate resistance at 1.25653, it could pave the way for a rally toward 1.26586, though this would require a significant shift in sentiment.
Overall, the market remains cautious, with volatility driven by global economic and geopolitical factors.
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