EUR/USD Price Analysis – Dec 16, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair struggled to maintain its gains, slipping back below the key 1.0500 level. The pair fell to an intraday low of 1.0484, reflecting ongoing pressure.
The main factor behind this decline was the dovish stance of the European Central Bank (ECB). ECB President Christine Lagarde, along with several other policymakers, expressed support for further rate cuts and a gradual move towards a neutral rate around 2%.
Meanwhile, the US Dollar staged a rebound, pushing the US Dollar Index (DXY) close to the important 107.00 level.
This renewed strength in the Greenback, combined with uncertainty surrounding the Federal Reserve’s upcoming interest rate decision on Wednesday, kept the USD volatile, contributing to the EUR/USD’s downward pressure.
ECB Signals Further Rate Cuts and Mixed Economic Data Weigh on EUR/USD
On the EUR front, the European Central Bank (ECB) is signaling further policy easing. ECB President Christine Lagarde mentioned that they may cut interest rates more if the data shows that inflation is slowing down.
She also noted that inflation in services has dropped sharply. Additionally, ECB Vice President Luis de Guindos agreed that the bank would continue with its current approach for the time being, suggesting more rate cuts are likely.
Recently, the ECB reduced its Deposit Facility rate by 25 basis points to 3%, part of a total of 100 basis points in rate cuts this year.
With inflation in the Eurozone under control and concerns about economic risks, markets expect the ECB to cut rates by another 100 basis points by June 2025.
On the economic front, the latest data from the Eurozone showed some positive signs. The December Purchasing Managers' Index (PMI) was better than expected, rising to 49.5 from 48.3, suggesting that business activity in the region is slowing down less than before.
The Services PMI improved, expanding to 51.4, which was better than analysts predicted. However, the Manufacturing PMI remained in contraction at 45.2.
Meanwhile, the German and French PMIs also showed improvement, mainly due to better performance in the services sector, although they remained below the 50.0 threshold, signaling ongoing contraction.
In politics, French President Macron appointed Francois Bayrou as the new prime minister, replacing Michel Barnier, who lost a no-confidence vote.
Therefore, the ECB's signals for further rate cuts and the mixed economic data, including a slower pace of contraction in business activity, may put downward pressure on the EUR. This could lead to continued weakness in the EUR/USD pair, especially against a strong USD.
US Dollar Strength and Fed's Rate Cut Expectations Pressure EUR/USD
On the US front, the US Dollar (USD) has regained some strength, pushing the US Dollar Index (DXY) closer to the key resistance level of 107.00. This rebound has caused the EUR/USD pair to give up its earlier gains.
The USD is expected to stay volatile as investors await the Federal Reserve’s (Fed) interest rate decision on Wednesday. The Fed is widely expected to lower its key borrowing rates by 25 basis points, bringing them to 4.25%-4.50%.
Investors will closely examine the Fed’s Summary of Economic Projections, also known as the “dot plot,” which outlines where policymakers expect interest rates to go in the medium and long term.
However, the recent Bloomberg survey revealed that most economists expect the Fed’s outlook for 2025 to be less dovish, meaning they predict fewer interest rate cuts.
Economists anticipate the Fed will reduce rates three times next year, assuming progress in controlling inflation slows. However, there are growing concerns about inflation risks, especially with the potential impact of President-elect Donald Trump's policies, such as new tariffs and tax cuts.
Today, investors will also pay attention to the S&P Global PMI report for December, which will provide further insights into the US economy’s performance.
Therefore, the US Dollar's strength and expectations of a 25 basis point rate cut by the Fed could pressure the EUR/USD pair, especially if the Fed's outlook signals fewer rate cuts in 2025. The pair may face further downward pressure as a result.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.05188, up 0.19%, as the pair extends its recovery above the pivot point of $1.05032. The immediate resistance level lies at $1.05480, a critical threshold for short-term buyers.
A break above this level could see the euro challenging higher resistance at $1.05914 and potentially $1.06294, driven by renewed bullish momentum and improving sentiment.
On the downside, immediate support is at $1.04525, followed by stronger safety nets at $1.04204 and $1.03858. The pair remains supported near the 50 EMA at $1.05031, highlighting stability around the pivot zone.
Traders should watch this level closely, as a sustained position above it suggests further upside potential, while a breach below could shift focus to the support zones.
The Relative Strength Index (RSI) stands at 54, reflecting neutral momentum and signaling room for further gains if buyers take control.
A cautious bullish tone persists as long as the EUR/USD pair holds above the pivot point. The buy limit entry near $1.05037, targeting $1.05491, aligns well with the current technical structure, with a stop loss placed at $1.04699 for risk management.
In conclusion, while market conditions remain delicate, the EUR/USD appears poised for upward movement above $1.05032, with near-term targets pointing to $1.05480 and beyond.
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EUR/USD Price Analysis – Dec 13, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its bullish momentum, staying well-supported around the 1.0492 level and reaching an intra-day high of 1.0496. The upward rally can be attributed to the bearish US dollar, which reversed its earlier gains.
Despite strong expectations that the Federal Reserve (Fed) will adopt a slightly hawkish stance after cutting its key interest rates by 25 basis points (bps) to 4.25%-4.50% in Wednesday's policy meeting, the US dollar continued to lose ground.
Meanwhile, comments from European Central Bank (ECB) officials after the blackout period, signaling a dovish outlook on interest rates, failed to drag down the EUR/USD pair.
US Dollar Weakens Despite Hawkish Fed Expectations, Supporting EUR/USD
On the US front, the broad-based US dollar failed to extend its bullish trend and edged lower on the day as it faced selling pressure above the 107.00 level.
Despite strong expectations that the Federal Reserve (Fed) will maintain a slightly hawkish stance after cutting its key interest rates by 25 basis points (bps) to 4.25%-4.50% in the recent policy meeting, the Greenback continued to lose ground.
According to the CME FedWatch tool, traders have priced in a 25-bps rate cut for Wednesday but expect rates to remain unchanged at 4.25%-4.50% in the January policy meeting.
Analysts from Macquarie pointed out that the slowdown in US disinflation, a lower-than-expected unemployment rate, and strong US financial markets are contributing to the Fed's more hawkish outlook.
Adding to the hawkish sentiment, a faster-than-expected rise in the US Producer Price Index (PPI) data for November reinforced expectations of a more aggressive Fed stance.
The PPI report showed that both the annual headline and core PPI (excluding food and energy) increased by 3% and 3.4%, respectively.
Therefore, the US dollar's weakness and expectations of a more hawkish Fed stance have supported the EUR/USD pair, allowing it to remain bullish. The Greenback's decline, despite strong economic data, has helped the Euro maintain its strength against the dollar.
EUR/USD Resilient Despite Dovish ECB Outlook and Economic Concerns
On the EUR front, the shared currency continued to rise toward 1.0500, despite dovish remarks from European Central Bank (ECB) officials after the blackout period.
ECB policymakers, including Bank of France Governor François Villeroy de Galhau, Latvian central bank Governor Mārtiņš Kazāks, and Bank of Estonia Governor Madis Müller, have supported further interest rate cuts, which is generally negative for the Euro.
Furthermore, ECB President Christine Lagarde's comments on Thursday signaled that more rate cuts could be on the way.
The ECB recently reduced its Deposit Facility rate by 25 basis points to 3%, citing a weak Eurozone economic outlook.
Lagarde highlighted the slowdown in exports and weak business investment, suggesting the need for more policy easing.
She pointed out that manufacturing in the Eurozone is still contracting, and growth in services is slowing, while businesses are holding back on investments due to weak demand and an uncertain future.
Some ECB officials even supported a larger rate cut of 50 basis points, signaling concern over economic growth.
The ECB's new economic projections forecast the Eurozone economy to grow only 0.7% in 2024 and 1.1% in 2025, both lower than previously expected. Despite these concerns, the Euro remained resilient against the US dollar.
Despite dovish ECB comments and concerns over Eurozone growth, the EUR/USD pair remained resilient, supported by a weaker US dollar.
The Euro's strength continued as traders priced in the possibility of further rate cuts, but with limited bearish impact.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04554, down 0.11%, reflecting a bearish tone on the 4-hour chart. Prices hover below the pivot point at $1.04794, signaling sustained selling pressure.
Immediate resistance is at $1.05218, followed by $1.05622 and $1.05973. On the downside, support levels are positioned at $1.04270, with further barriers at $1.03987 and $1.03667, providing targets for bearish continuation.
The 50 EMA at $1.05172 confirms short-term downward momentum, with prices consistently trading below this level.
The RSI at 36 indicates bearish sentiment, nearing oversold territory, which may limit the scope for further immediate declines.
A Sell Limit entry at $1.04791 targets $1.04385, with a Stop Loss at $1.05104 to manage risk. A breach of $1.04270 would open the path to $1.03987, reinforcing the bearish trend.
Conversely, a recovery above $1.04794 could shift the tone, with resistance at $1.05218 acting as a key test for buyers.
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S&P500 (SPX) Price Analysis – Dec 13, 2024
Daily Price Outlook
The S&P 500 has been facing some bearish pressure, dropping around 6,051 level, despite a positive economic outlook in the U.S. However, the major factor contributing to the decline is the escalating geopolitical tensions in the Middle East.
This uncertainty has raised concerns about global stability, leading to safe-haven demand, particularly for precious metals like gold. In the meantime, the recent Israeli strike, which resulted in numerous casualties in Gaza, has only intensified these concerns, spurring more cautious sentiment in the equity markets.
At the same time, the U.S. dollar has been benefiting from its role as a global safe-haven asset. The US dollar's strength is providing some support to U.S. equities, limiting further declines in the S&P 500.
Whereas, the Producer Price Index (PPI) was slightly higher than expected, the overall economic picture, including the PCE report, still points to inflation cooling in key areas. This suggests the Federal Reserve may not be as aggressive with rate hikes, which could also help mitigate the bearish sentiment in the stock market.
Geopolitical Risks and Their Impact on the S&P 500 Index
On the geopolitical front, the ongoing geopolitical tensions, particularly in the Middle East, have also played a major role in the recent struggles of the S&P 500.
The ongoing conflict in Gaza, with Israeli airstrikes causing significant casualties, has escalated concerns about the broader implications of instability in the region.
Investors often seek safe-haven assets like gold or U.S. Treasuries during periods of geopolitical turmoil, and such events can lead to increased volatility in equity markets.
For the S&P 500, the rise in geopolitical risks often results in risk-off behavior from investors, leading to a sell-off in stocks.
The uncertainty surrounding the situation in the Middle East adds to the already fragile sentiment caused by inflationary concerns and rising interest rates.
In times of such instability, equity markets like the S&P 500 tend to underperform as investors shift towards safer, more stable assets. This heightened uncertainty further exacerbates the pressure on the index, contributing to its overall bearish trend in the current market environment.
S&P 500 – Technical Analysis
The SPX500 trades at 6,051.25, down 0.54% on the 4-hour chart, reflecting cautious market sentiment. Prices hover near the pivot point at 6,053.16, which acts as a critical level for maintaining stability.
Immediate resistance is seen at 6,093.09, followed by 6,127.09 and 6,165.62. On the downside, immediate support lies at 6,028.71, with additional levels at 5,984.87 and 5,950.90, offering safety nets for bearish pressure.
The 50 EMA at 6,048.99 aligns closely with current levels, suggesting the index is testing short-term equilibrium.
The Relative Strength Index (RSI) at 45 highlights neutral momentum, tilting slightly bearish, which could limit significant upside unless buying interest revives.
A Buy Limit entry at 6,028 targets 6,092, with a Stop Loss at 5,990 to manage downside risks. A break above 6,093.09 would signal renewed bullish momentum, paving the way for higher targets, while failure to hold the pivot point could prompt a decline toward 5,984.87.
Traders should monitor global risk sentiment and economic data releases, as they are likely to influence near-term trends.
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- GOLD Price Analysis – Dec 13, 2024
GOLD Price Analysis – Dec 13, 2024
Daily Price Outlook
Despite the strong US dollar, gold prices (XAU/USD) have continued to rise, reaching around the 2,692 level. This rally is driven by growing geopolitical tensions, such as the ongoing Russia-Ukraine conflict and escalating issues in the Middle East, which are prompting investors to seek the safety of gold.
Besides this, the concerns over US President-elect Donald Trump's potential tariff plans are further boosting gold's appeal as a reliable investment during uncertain times.
Moreover, the Federal Reserve is expected to cut rates for the third consecutive time at its December meeting, providing additional support for gold. However, the potential for further gains may be limited, as the Fed is likely to be cautious with more cuts, given that inflation remains above the 2% target.
Meanwhile, rising US Treasury yields are helping to keep the dollar strong, which could cap gold’s upward movement. As a result, traders are likely to adopt a wait-and-see approach ahead of next week's crucial FOMC meeting.
Impact of US Inflation Data and Fed Rate Cut Expectations on Gold Prices
On the US front, the broad-based US dollar extended its upward rally and remained bullish as a result of the hotter-than-expected US Producer Price Index (PPI) report released on Thursday.
The US PPI increased by 0.4% month-over-month (MoM) in November, marking the largest gain since June. This came after an upward revision of the October PPI, which had risen by 0.3%. The November reading was higher than the expected 0.2% increase, which helped boost the US dollar.
Looking ahead, the US Federal Reserve's interest rate decision will be the main focus next week. Traders are anticipating a 25 basis point rate cut on December 18, according to the CME FedWatch Tool.
In addition, the US Consumer Price Index (CPI) rose to 2.7% year-over-year (YoY) in November, up from 2.6% in October.
In the meantime, the headline CPI showed a 0.3% MoM increase, which was in line with market expectations.
The core CPI, excluding food and energy prices, climbed 3.3% YoY and increased 0.3% MoM, also in line with forecasts. These inflation figures are likely to influence the Fed's next move on interest rates.
Therefore, the stronger US dollar, driven by higher-than-expected inflation data, may put pressure on gold prices, as a stronger dollar makes gold more expensive for foreign buyers. Additionally, expectations of a Fed rate cut could limit gold’s upward momentum.
Impact of China's Economic Outlook and Middle East Tensions on Gold Prices
On the other hand, China's positive economic outlook, with President Xi Jinping expressing confidence in meeting this year's targets, could support global growth, indirectly benefiting gold. China's Trade Balance (CNY) rose to CNY 692.8 billion in November, up from CNY 679.1 billion in October.
Exports grew by 1.5% year-over-year, while imports increased by 1.2% YoY, signaling a recovery in trade. Despite the slower pace compared to previous months, these positive figures show resilience in China's economy, which could help stabilize market sentiment.
Meanwhile, escalating tensions in the Middle East, including an Israeli airstrike that killed at least 30 Palestinians in Gaza, are driving safe-haven demand.
As geopolitical instability increases, investors often turn to gold as a secure asset, leading to higher demand for the precious metal.
This combination of China's economic strength and the rising global uncertainties could push gold prices higher as investors seek safety amidst market volatility.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) trades at $2,682.67, edging up 0.07% on the 4-hour chart. Prices remain supported by the pivot point at $2,679.33, with immediate resistance at $2,701.96. Further upside could target $2,719.88 and $2,732.71 if bullish momentum strengthens.
On the downside, immediate support is at $2,661.04, followed by $2,647.09 and $2,627.43, levels traders should monitor closely for potential breakdowns.
The 50 EMA at $2,686.62 indicates a neutral-to-bearish short-term trend, with gold trading slightly below this key average. Meanwhile, the Relative Strength Index (RSI) at 45 reflects balanced momentum but leans toward bearish sentiment, suggesting limited upside unless buyers regain control.
Gold’s current setup suggests cautious optimism, with a Buy Limit entry near $2,682 targeting $2,700, while a Stop Loss at $2,672 safeguards against downside risks.
A sustained move above $2,701.96 could confirm a broader bullish breakout, while failure to hold the pivot at $2,679.33 may lead to retests of lower support levels.
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USD/JPY Price Analysis – Dec 12, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair struggled to gain any significant momentum, staying sluggish around the 152.44 mark and dipping to an intraday low of 151.95.
This decline comes despite an overall positive sentiment in equity markets and reports suggesting that the Bank of Japan (BoJ) is likely to keep rates steady in its upcoming meeting.
The downward trend is linked to a modest weakness in the US dollar, which lost its earlier traction even after strong US economic data.
Although, the latest US inflation report wasn’t enough to convince markets that the Federal Reserve will avoid cutting interest rates at its upcoming December meeting.
Traders are now almost certain of a 25-basis-point rate cut on December 18, with the CME FedWatch Tool showing a 99% probability.
Market participants are shifting their attention to the US November Producer Price Index (PPI), expected later on Thursday, for fresh insights.
BoJ Policy Uncertainty and US Dollar Strength Weigh on USD/JPY
On the BoJ front, investors remain doubtful about the Bank of Japan’s willingness to tighten its monetary policy further, which is weighing on the Japanese Yen (JPY).
Reports from Reuters suggest that the BoJ is likely to keep interest rates steady at its upcoming policy meeting, though it remains open to a hike depending on economic data and market conditions.
Mixed signals from BoJ officials show no rush to tighten policy, keeping traders cautious about placing big bets on the Yen.
Japan's economy is growing moderately, with rising wages and inflation staying above the BoJ’s 2% target, suggesting conditions may support future hikes.
However, with the Federal Reserve’s decision on a likely rate cut just hours before the BoJ meeting, traders are hesitant to take strong positions.
On the other side, the US dollar is finding some support from higher US Treasury yields, boosted by expectations that the Fed will take a cautious approach to further rate cuts.
The recent US Consumer Price Index (CPI) data showed inflation picking up slightly, with the core CPI rising 3.3% year-over-year in November.
However, progress toward the Fed’s 2% inflation target seems to have stalled, raising uncertainty about future rate decisions.
The US Producer Price Index (PPI) and Weekly Initial Jobless Claims, due later on Thursday, are expected to provide fresh market direction.
These factors, combined with a positive tone in equity markets, are keeping the USD/JPY pair steady despite the JPY's recent weakness.
USD/JPY – Technical Analysis
The USD/JPY pair is trading at 152.523, up 0.04%, reflecting modest upward momentum on the 4-hour chart. The pair is finding support near the pivot point at 151.960, a critical level that traders are monitoring for potential direction.
Immediate resistance is located at 152.749, followed by key levels at 153.605 and 154.558, suggesting room for bullish continuation if the pair can maintain momentum.
On the downside, immediate support lies at 150.994, with deeper levels at 149.836 and 148.883 providing a safety net in case of a pullback.
The 50-day Exponential Moving Average (EMA) at 151.279 underpins short-term bullish sentiment, reinforcing the ongoing upward trend.
The Relative Strength Index (RSI) at 59 indicates neutral-to-bullish momentum, suggesting the pair has room to rise before entering overbought territory.
Traders may consider a buy limit entry at 152.125, targeting 153.600 with a stop loss at 151.500 to manage downside risk.
The technical setup suggests a cautiously bullish outlook for USD/JPY, supported by a broader risk-on sentiment in the markets.
A decisive move above the 152.749 resistance could pave the way for further gains, while holding above the pivot will be crucial to maintaining positive momentum.
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GOLD Price Analysis – Dec 12, 2024
Daily Price Outlook
Gold price (XAU/USD) failed to stop its early-day bearish rally and remained under pressure around the 2,716 level, eventually dropping to an intra-day low of 2,700.
This decline is mainly driven by the stronger US dollar (USD) following the release of the upbeat US inflation data on Wednesday.
Despite this, the inflation report doesn’t seem to be enough to stop the Federal Reserve (Fed) from cutting rates at its meeting next week.
Traders are now pricing in a nearly 99% chance of a 25 basis point rate cut on December 18, according to the CME FedWatch Tool.
The focus now shifts to the US November Producer Price Index (PPI), set to be released later on Thursday, for further market direction.
Strong US Dollar and Economic Data Weigh on Gold Prices
On the US front, the broad-based US dollar gained strong bullish traction after the release of key economic data. On the data front, the seasonally adjusted Employment Change showed an increase of 35,600 jobs in November, pushing the total number of employed people to 14.54 million.
This was well above the previous month’s increase of 12,100 and also exceeded expectations of 25,000.
At the same time, the Unemployment Rate fell to 3.9%, marking the lowest level since March, and came in below market estimates of 4.2%. These positive employment figures supported the US dollar.
Meanwhile, the US Consumer Price Index (CPI) rose to 2.7% year-over-year in November, slightly up from 2.6% in October. The headline CPI showed a 0.3% month-over-month increase, matching market expectations.
The core CPI, which excludes food and energy prices, climbed 3.3% year-over-year, with a 0.3% month-over-month rise.
Despite these inflation figures, the market believes the Federal Reserve will still proceed with rate cuts in its December meeting.
Traders are currently pricing in a 99% chance of a 25 basis point rate reduction on December 18, according to the CME FedWatch Tool.
Turning to China, President Xi Jinping expressed confidence in achieving China’s economic targets, stating that the country remains a key driver of global growth. He also highlighted that there are no winners in trade or tariff wars.
In November, China’s Trade Balance rose to CNY 692.8 billion, up from CNY 679.1 billion the previous month.
Exports grew by 1.5% year-over-year, a slowdown compared to the 11.2% increase in October, while imports saw a slight recovery with a 1.2% increase.
Therefore, the strong US dollar and positive economic data, including low unemployment and CPI readings, put downward pressure on gold prices.
Market expectations of a Fed rate cut further fueled the dollar’s strength, leading to gold's inability to extend its gains.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,716.48, down slightly by 0.06% as it consolidates within a tight range on the 4-hour chart. Despite the recent dip, the price remains supported by the pivot point at $2,709.80, a crucial level for maintaining bullish momentum.
Immediate resistance is observed at $2,719.88, followed by $2,732.71 and $2,745.77. A breakout above these levels could signal a stronger upward trend, targeting higher levels in the near term.
On the downside, support is visible at $2,699.27, followed by deeper levels at $2,685.98 and $2,675.44. The 50-day Exponential Moving Average (EMA) at $2,674.10 offers robust technical support, reinforcing the broader uptrend.
The Relative Strength Index (RSI) stands at 50.48, reflecting neutral momentum with potential for upside. However, the RSI nearing oversold territory suggests that a bullish reversal may be imminent if support levels hold.
The current setup highlights an opportunity to enter long positions above $2,709, with a target of $2,732 and a stop loss at $2,700 to manage downside risks.
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- AUD/USD Price Analysis – Dec 12, 2024
AUD/USD Price Analysis – Dec 12, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair kept its upward momentum, staying strong around the 0.6418 level and reaching a peak of 0.6430.
The Australian dollar remained supported by mixed domestic employment data, with the seasonally adjusted Employment Change showing a rise of 35,600 jobs in November.
This pushed the total number of employed people to 14,535,500, far exceeding the previous figure of 12,100 and the expected 25,000.
Additionally, the Unemployment Rate dropped to 3.9%, the lowest since March, better than the anticipated 4.2%. However, the Australian dollar faced some headwinds as the US dollar strengthened after the release of the US inflation data.
The Consumer Price Index (CPI) in the US rose to 2.7% year-over-year in November, up from 2.6% in October. On top of that, concerns over China’s economic response to potential US tariff hikes added more downward pressure on the AUD.
Impact of Mixed Economic Data and US-China Tensions on the AUD/USD Pair
On the China front, the Australian dollar faced downward pressure as China, a key trading partner of Australia, considered letting its currency, the Chinese Yuan, weaken in response to expected US tariff hikes.
This news added uncertainty, as markets feared the impact of new trade tensions between the US and China.
On Tuesday, Chinese President Xi Jinping expressed confidence in achieving China’s economic targets, stating that China would continue to drive global economic growth. He also warned that there would be no winners in tariff or trade wars.
In terms of economic data, China’s Trade Balance improved in November, reaching CNY 692.8 billion, up from CNY 679.1 billion the previous month.
Exports grew by 1.5% year-over-year, although this was a slowdown compared to October’s 11.2% growth. Imports also rose by 1.2%, recovering from a previous decline of 3.7%.
However, weak consumer price data from China showed a 0.6% drop in November, signaling challenges in the economic recovery and fueling expectations of additional fiscal and monetary stimulus in China.
Back in Australia, the AUD found support from mixed domestic employment data. The seasonally adjusted Employment Change rose by 35,600 in November, bringing the total number of employed people to 14,535,500.
This exceeded both the previous figure of 12,100 and the market’s expectation of 25,000. Additionally, the Unemployment Rate dropped to 3.9%, its lowest level since March, well below the expected 4.2%.
The Reserve Bank of Australia (RBA) kept the official cash rate unchanged at 4.35% in its December meeting, noting that while inflation risks have eased, they still require attention.
Australia's GDP growth for the third quarter was slower than expected, with a 0.3% rise, leading to speculation that the RBA may cut rates in April 2024.
Therefore, the mixed economic data from Australia, along with concerns over China's economic situation, provided support to the AUD.
However, the uncertainty surrounding US-China trade tensions and weak GDP growth led to downward pressure, limiting significant gains in the AUD/USD pair.
AUD/USD – Technical Analysis
The AUD/USD pair is trading at $0.64180, up 0.77%, reflecting a continuation of its bullish momentum on the 4-hour chart. The pair is supported by a strong pivot point at $0.64153, which serves as a critical level for further upside potential.
Immediate resistance is seen at $0.64719, followed by key levels at $0.65030 and $0.65267. A sustained move above these levels could open the door to further gains, targeting higher levels in the short term.
On the downside, immediate support lies at $0.63773, with additional support levels at $0.63460 and $0.63174 offering a safety net against pullbacks. The 50-day Exponential Moving Average (EMA) at $0.63993 is acting as a strong technical base, reinforcing the current uptrend.
The Relative Strength Index (RSI) stands at 63, indicating bullish momentum, though nearing overbought territory. This suggests potential for continued gains, albeit with caution as the pair approaches overextension.
Traders may consider entering long positions above $0.64156, with a target at $0.64576 and a stop loss at $0.63941 to manage downside risks.
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GBP/USD Price Analysis – Dec 11, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair struggled to halt its bearish trend and stayed under pressure around 1.2725, hitting an intraday low of 1.2713.
The decline was mainly driven by the stronger US Dollar, which gained support ahead of the release of the US Consumer Price Index (CPI) data for November, scheduled at 13:30 GMT.
Investors are keenly watching this report as it could influence expectations for the Federal Reserve’s future interest rate decisions.
Meanwhile, the British Pound faced additional challenges due to a lack of significant economic events in the UK. With a relatively quiet economic calendar, the focus has shifted to the Bank of England’s upcoming policy meeting on December 19.
Market participants are speculating on whether the BoE will maintain its current stance or take further action on interest rates.
Until then, the Pound is likely to remain under pressure, especially as it struggles to find clear direction against major currencies like the Euro and US Dollar.
US Dollar Strengthened by CPI Data and Fed Rate Cut Expectations, Impact on GBP/USD
On the US front, the broad-based US dollar maintained its upward trend as investors awaited the release of the November Consumer Price Index (CPI) data, scheduled for 13:30 GMT.
The inflation report is expected to show that the annual headline CPI increased slightly to 2.7% from the previous 2.6%.
The core CPI, which excludes food and energy prices, is forecasted to rise steadily by 3.3%. On a monthly basis, both the headline and core CPI are expected to grow by 0.3%.
This inflation data is unlikely to change the Federal Reserve's interest rate plans for the meeting on December 18, unless the numbers differ significantly from expectations.
According to a recent Reuters poll, 90% of economists believe the Fed will cut interest rates by 25 basis points next week.
The poll also suggests that most economists expect the Fed to pause any further rate cuts starting in January 2025, assuming that US President-elect Donald Trump's policies, such as higher import tariffs and tax cuts, could lead to higher inflation.
Therefore, the expected CPI data and the Fed's likely interest rate cut may support the US dollar, potentially keeping the GBP/USD pair under pressure. If inflation figures align with expectations, the pair could remain in a consolidative range until further clarity.
BoE Rate Decision and Economic Data to Drive Market Sentiment
On the GBP front, the Pound Sterling is struggling to find direction against other major currencies due to a quiet UK economic calendar.
As a result, the British currency's movement will largely depend on market expectations for the Bank of England’s (BoE) interest rate decision on December 19.
Traders expect the BoE to keep interest rates unchanged at 4.75% next week as inflationary pressures persist.
However, upcoming economic data, such as the UK’s employment report for the three months ending in October and the November Consumer Price Index (CPI), could influence the BoE's future rate decisions.
At the same time, concerns about the UK labor market could lead the BoE to adopt a more cautious stance.
A recent survey showed that employment growth expectations for the next year have dropped to a four-year low.
Later this week, investors will focus on the UK’s monthly Gross Domestic Product (GDP) and Industrial Production data for October.
These reports will provide a clearer picture of the UK economy’s health, with expectations of a recovery in both factory output and GDP after a decline in September. These indicators could further shape expectations for the BoE’s policy direction.
GBP/USD – Technical Analysis
The GBP/USD pair is trading at $1.27680, reflecting a 0.6% gain on the day and signaling moderate bullish momentum on the 4-hour chart. The pivot point at $1.27356 serves as a critical level, with prices attempting to hold above it.
Immediate resistance is situated at $1.27986, followed by $1.28322 and $1.28665. On the downside, immediate support lies at $1.26955, with additional support levels at $1.26546 and $1.26169.
Technical indicators provide mixed signals. The RSI is at 53, indicating a balanced market sentiment, neither overbought nor oversold. The 50 EMA, positioned at $1.27529, aligns with current price action, reinforcing the bullish bias as long as prices remain above this level.
A sustained move above $1.27986 could propel GBP/USD toward the next resistance at $1.28322, signaling continued buying interest.
Traders may consider a buy-limit strategy at $1.27362, targeting $1.27979, with a stop-loss at $1.26958. This approach capitalizes on the bullish trend while managing downside risk in the event of a reversal.
However, a break below the pivot point could invalidate this outlook, opening the door for further declines toward $1.26955 or lower support levels.
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EUR/USD Price Analysis – Dec 11, 2024
Daily Price Outlook
During the European trading session on Wednesday, the EUR/USD currency pair continued to struggle, unable to break its bearish bias and remained under pressure near the 1.0495 level, dipping to an intra-day low of 1.0487.
This downward trend can be largely attributed to a combination of factors including the growing expectation that the European Central Bank (ECB) will lower its Deposit Facility rate by 25 basis points to 3% in its policy meeting on Thursday.
This move is seen as a response to economic challenges in the Eurozone, making the Euro less attractive to investors.
On the other hand, the US Dollar is gaining strength, supported by strong anticipation of the US Consumer Price Index (CPI) data for November, set to be released later in the day.
This has contributed to the US Dollar's ongoing rally, marking its fourth consecutive day of gains. The US Dollar Index (DXY), which measures the Greenback’s performance against a basket of other major currencies, rose above the 106.50 mark, adding further pressure on EUR/USD.
EUR/USD Weakened by ECB Rate Cut Expectations and Economic Concerns
On the EUR front, the major currency pair is weakening due to growing expectations that the European Central Bank (ECB) will cut its Deposit Facility rate by 25 basis points to 3% in its upcoming meeting on Thursday.
This would be the third consecutive rate cut and the fourth this year. Traders are anticipating this move as the ECB believes inflation is under control, but economic activity in the Eurozone is struggling.
Many ECB officials are also concerned that inflation might fall short of their target, partly due to possible tariffs from US President-elect Donald Trump and weak domestic demand.
As the market expects a rate cut, investors will pay close attention to ECB President Christine Lagarde’s comments after the decision.
Her words may provide hints about future interest rates. With political issues in Germany and France, along with concerns over Trump’s tariffs affecting European exports, Lagarde may take a more cautious approach. This uncertainty around the ECB’s actions is putting more pressure on the EUR/USD pair.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.05270, holding steady despite subdued momentum on the 4-hour chart. The pivot point at $1.05392 serves as a key level for determining near-term direction.
Immediate resistance is positioned at $1.05685, with further barriers at $1.05973 and $1.06321. On the downside, immediate support lies at $1.04978, with subsequent levels at $1.04602 and $1.04270.
Technical indicators highlight a cautious sentiment. The RSI is at 42, signaling weak momentum, while the 50 EMA at $1.05537 suggests a bearish bias as prices remain below this key moving average.
A break below $1.05384 could intensify selling pressure, exposing the pair to potential declines toward $1.04978. Conversely, a recovery above $1.05685 would shift sentiment, opening the path to test $1.05973.
For traders, the recommended strategy is to enter short positions below $1.05384, targeting $1.04978, with a stop-loss set at $1.05697. This setup aligns with the prevailing bearish trend while managing downside risk effectively.
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- GOLD Price Analysis – Dec 11, 2024
GOLD Price Analysis – Dec 11, 2024
Daily Price Outlook
Gold prices (XAU/USD) struggled to maintain upward momentum near $2,680 and slid to an intra-day low of $2,675, pressured by a stronger US dollar.
Traders are now awaiting the release of the US November Consumer Price Index (CPI) data, expected later in the North American session, for further market cues.
Meanwhile, geopolitical tensions, such as the ongoing Russia-Ukraine war and unrest in the Middle East, continue to bolster gold’s status as a safe-haven asset.
Furthermore, concerns about potential tariff policies under President-elect Donald Trump are adding to market uncertainty, further supporting gold’s appeal as a hedge.
Stronger US Dollar and Economic Data Pressure Gold Amid CPI and Fed Decision Uncertainty
On the US front, the broad-based US dollar has gained strength ahead of the release of November's Consumer Price Index (CPI) data, due later in the North American session.
Analysts expect inflation to rise to 2.7% year-over-year (YoY) in November, slightly up from 2.6% in October.
Core CPI, which excludes food and energy, is predicted to remain steady at a 3.3% YoY increase.
If inflation shows signs of slowing, it could reduce the chances of a Federal Reserve (Fed) rate cut, providing additional support to the US dollar.
Market participants are closely watching the Fed’s next move, with traders currently estimating an 85.8% likelihood of a 25-basis-point rate cut on December 18, according to the CME FedWatch Tool.
Adding to the dollar’s momentum, the US November Non-Farm Payrolls (NFP) report showed a strong 227,000 job gain, surpassing expectations, along with steady wage growth of 0.4% month-over-month.
These solid labor market indicators add complexity to the Fed’s decision-making as inflation data becomes a key focus.
Therefore, the stronger US dollar and robust economic data weigh on gold prices, as they reduce gold's appeal as a safe-haven asset.
However, uncertainty surrounding the upcoming CPI data and Fed decisions could keep gold supported amid market volatility.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) trades at $2,695.49, up 0.05%, holding its position within a steady upward trend on the 4-hour chart. The immediate pivot point at $2,676.07 underscores a critical threshold for maintaining bullish momentum.
Resistance levels are marked at $2,704.36 and $2,719.93, with a break above these thresholds paving the way for continued gains.
On the downside, immediate support lies at $2,656.82, followed by deeper support zones at $2,643.45 and $2,627.40, which could be tested if selling pressure intensifies.
The RSI at 66 indicates mildly overbought conditions, suggesting the potential for short-term consolidation before a renewed move higher. The 50 EMA at $2,656.89 reinforces the bullish outlook, acting as a strong support level.
From a strategic perspective, traders may consider entering long positions above $2,680, with a target of $2,703 and a stop-loss at $2,669. This setup balances risk and reward, capitalizing on sustained buying momentum within the channel.
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