EUR/USD Price Analysis – Jan 03, 2024
Daily Price Outlook
The EUR/USD currency pair failed to stop its downward trend and remained well-offered around 1.0940 level. However, the downward trend was mainly driven by the stronger US dollar, which was being backed by the increase in bond yields. In the meantime, the increased odds of rate cuts from the European Central Bank (ECB) was seen as another key factor that kept the EUR/USD pair under pressure.
Impact of US Manufacturing Decline and Fed's Dovish Stance on EUR/USD Pair
On Tuesday, the US S&P Global Manufacturing PMI for December decreased to 47.9 from the previous 48.2, falling below the expected 48.2. This suggests a slowdown in the manufacturing sector. During its last meeting in 2023, the Federal Reserve (Fed) conveyed a cautious message. It is anticipated that the Fed will initiate a series of rate cuts, beginning with a quarter-point cut in March, followed by similar cuts in May and June. However, there is widespread anticipation for this week's US labor data to gain further insights into what lies ahead.
Therefore, the decline in the US Manufacturing PMI and the dovish stance of the Federal Reserve could lead to a weaker US dollar. This may result in a positive impact on the EUR/USD pair, favoring the Euro.
ECB Rate Cut Expectations and Federal Reserve's Delay Impact
Furthermore, there is an increasing likelihood of the European Central Bank (ECB) cutting rates to stimulate the economy, while the Federal Reserve may postpone rate changes. This exerts downward pressure on the Euro (EUR) and poses a challenge for EUR/USD. Investors anticipate six rate cuts from the ECB in 2024.
On Tuesday, ECB policymaker Pablo Hernandez de Cos emphasized the high uncertainty in economic data, indicating that the timing of the ECB's policy shift depends on data. He also predicted a continued decrease in inflation in the Eurozone. These factors collectively contribute to potential challenges for the Euro against the US Dollar.
Therefore, the increased likelihood of ECB rate cuts, contrasted with the Federal Reserve's potential delay, creates downward pressure on the Euro. This poses challenges for the EUR/USD pair, favoring a stronger US Dollar.
EUR/USD - Technical Analysis
The EUR/USD pair shows modest upward momentum on January 3, with a slight gain of 0.06%, trading at 1.09578. The currency pair's movement is marked by key technical levels. Resistance is anticipated at 1.1003, 1.1050, and 1.1129, while support could be found at 1.0891, 1.0824, and 1.0740.
The Relative Strength Index (RSI) is at 35, hinting at a bearish sentiment but not deeply into oversold territory. The currency pair currently trades close to its 50-Day Exponential Moving Average (EMA) of 1.100, suggesting the possibility of short-term bearish trends. A recent upward channel breakout around $1.1050 led to a brief sell-off, finding support at $1.0936.
Related News
- GOLD Price Analysis – Jan 03, 2024
USD/CAD Price Analysis – Jan 02, 2024
Daily Price Outlook
During the early hours of the European session, the USD/CAD currency pair managed to halt its downward rally and gained traction around the 1.3250 level. The upward trend can be attributed to the recovery in US Treasury bond yields, assisting the US Dollar (USD) in attracting buyers for the third consecutive day. This, in turn, is viewed as a key factor providing support to the USD/CAD pair.
Meanwhile, the upticks in crude oil prices were seen as one of the key factor that underpinned the commodity-linked Loonie and cap further upside in the USD/CAD pair. Furthermore, the dovish expectations regarding the Federal Reserve (Fed) may prevent aggressive bets from USD bulls and could potentially cap the major currency pair.
Anticipated Interest Rate Cut and Economic Outlook: Impact of US Core PCE Price Index Drop
It's worth noting that investors are strongly leaning towards the idea that the US central bank might cut interest rates by March. This belief is backed by a larger-than-expected drop in the US Core Personal Consumption Expenditure (PCE) Price Index, which is the Federal Reserve's preferred measure of inflation.
Despite the robust performance of the US economy, the current situation paves the way for a gradual economic slowdown in 2024, providing the central bank with flexibility to adjust its policies earlier. The increase in US bond yields is also strengthening the US dollar, playing a role in the gains observed in the USD/CAD pair.
Canadian Dollar Dynamics: Oil Price Influence, Interest Rate Speculations, and Global Economic Factors
Moreover, the Canadian Dollar gets a boost as oil prices rise. In the meantime, the head of Canada's central bank, Tiff Macklem, hinted that they might lower interest rates in 2024. This means the Canadian Dollar relies on both oil prices and people's sentiments towards the US dollar. However, the Canadian Dollar is affected by oil and the US dollar, but it's important to be careful due to economic uncertainty.
Therefore, the potential lowering of interest rates in 2024, coupled with economic uncertainty, creates caution in assuming a continued rise of the USD/CAD pair from its recent low, emphasizing the impact of global economic factors.
USD/CAD - Technical Analysis
The USD/CAD pair showed a marginal increase on Tuesday, trading at 1.32566, up by a mere 0.03%. The currency pair is navigating around a pivot point of 1.3199. Key resistance levels are identified at 1.3232, 1.3288, and 1.3322, while supports are found at 1.3143, 1.3107, and 1.3073, offering a clear framework for potential price movements.
The Relative Strength Index (RSI) is positioned at 53, suggesting a slightly bullish sentiment. The Moving Average Convergence Divergence (MACD) is marginally positive at 0.001, indicating a potential for upward momentum. The pair is currently trading just below the 50-Day Exponential Moving Average (EMA) of 1.3238, a factor that may influence its short-term trajectory.
Considering the technical analysis, the overall trend for USD/CAD appears to be cautiously bullish. A strategic approach could involve a sell limit at 1.33732, with a take profit target at 1.31427 and a stop loss at 1.35216, while keeping an eye on the mentioned technical levels for future direction.
Related News
- GOLD Price Analysis – Jan 02, 2024
AUD/USD Price Analysis – Jan 02, 2024
Daily Price Outlook
Despite the bearish US dollar, the AUD/USD currency pair managed to halt its downward rally and recovered ground near 0.6830 on Tuesday. The reason for its upward trend could be attributed to the risk-on market sentiment and robust inflation and housing prices. The recent meeting minutes highlighted that the Reserve Bank of Australia (RBA) wants to check more data before deciding on future interest rates. The expectation that the RBA won't cut rates in the upcoming February meeting supports the Australian Dollar (AUD).
Strong China Manufacturing PMI Lifts AUD/USD, Reflecting Market Optimism
It's worth noting that China's Caixin Manufacturing Purchasing Managers Index (PMI) rose to 50.8 in December, surpassing expectations of 50.4 and the previous 50.7. This positive manufacturing data could boost the Aussie Dollar (AUD) due to strong trade ties with China. The report highlights increased output and new orders, especially in consumer goods. As a result, the AUD/USD reacted positively, bouncing from session lows of 0.6806 to 0.6817, up 0.08% on the day. This indicates the market's response to China's encouraging manufacturing performance.
US Economic Slowdown and Fed Rate Cut Speculations Drive AUD/USD Pair Gains
In addition, the US Dollar Index (DXY) is gaining, but it faces challenges from recent dips in US labor data, Core PCE Inflation, and GDP Annualized. The Chicago Purchasing Managers Index, released by ISM-Chicago, shows easing business conditions in December across Illinois, Indiana, and Michigan. These indicators suggest a slowdown in the US economy in the fourth quarter, hinting at a potential soft landing. This supports the idea of Fed rate cuts in 2024, putting downward pressure on the USD and contributing to gains in the AUD/USD pair.
Therefore, the news of a potential slowdown in the US economy and the possibility of Fed rate cuts in 2024 has led to downward pressure on the US Dollar (USD), contributing to gains in the AUD/USD pair.
The AUD/USD pair has shown a modest upward movement on Tuesday, trading at 0.6815, reflecting a slight gain of 0.04%. The pair is currently hovering around a pivot point of 0.6771. Looking ahead, key resistance levels are identified at 0.6822, 0.6861, and 0.6910, while immediate support can be found at 0.6732, followed by stronger supports at 0.6683 and 0.6634.
From a technical standpoint, the Relative Strength Index (RSI) sits at a neutral 50, indicating an equilibrium between buyers and sellers. The Moving Average Convergence Divergence (MACD) is almost flat at -0.0006, suggesting a lack of clear directional momentum. Notably, the pair is trading slightly below its 50-Day Exponential Moving Average (EMA) of 0.6819, though the upward trendline support around 0.6793 and recent closing above the 50 EMA suggest potential for an uptrend.
In conclusion, the AUD/USD pair presents a cautiously optimistic scenario. Traders might consider a buy limit at 0.67986, targeting a take profit at 0.68526, with a stop loss placed at 0.67590, while closely monitoring these technical indicators and chart patterns for further market direction.
Related News
- GOLD Price Analysis – Jan 02, 2024
GOLD Price Analysis – Jan 02, 2024
Daily Price Outlook
Gold price (XAU/USD) maintained its upward trend and started the new year on a positive note around the 2,075 level. However, the reason for its upward trend could be attributed to the growing acceptance that the Federal Reserve (Fed) will soon start cutting interest rates, as early as March, along with geopolitical risks and concerns about the weak economic recovery in China.
In contrast to this, the ongoing US dollar recovery from a five-month low touched last week, bolstered by a further rise in US Treasury bond yields, might keep a lid on any further gains for the Gold price.
Moving ahead, traders appear hesitant to take strong positions as they await the FOMC minutes on Wednesday. Market participants also seem reluctant amidst relatively thin trading volumes, possibly preferring to wait for the FOMC minutes before placing directional bets. The upcoming busy US economic schedule for the beginning of the month is anticipated to bring important macro releases, which could potentially influence the precious metal.
Gold's Strong Performance in 2023 and Positive Outlook for 2024
It's important to mention that gold had a strong 13% annual increase in 2023, making it the best year since 2020. The positive trend is expected to continue, thanks to hopes that the Federal Reserve may potentially ease its policy in March. There is an 85% chance of a rate cut in March, according to CME's FedWatch tool.
Therefore, the news of a strong 13% annual increase in gold prices in 2023, coupled with the potential Federal Reserve policy easing in March, may further boost gold prices, driven by increased investor confidence.
Apart from this, gold is also gaining support as a safe haven due to geopolitical tensions in Ukraine, the Middle East, and China's economic challenges. In the meantime, the recent US actions against the Iran-backed Houthi group and China's struggling manufacturing sector enhance the metal's appeal. Investors are monitoring key events, including the FOMC minutes, NFP report, and other economic releases this week.
GOLD (XAU/USD) - Technical Analysis
Gold exhibits a promising trend at the start of the year, trading at $2,069, up by 0.32%. The current movement positions the precious metal near its pivot point of $2,069. Bullish sentiments are evident, with immediate resistance levels set at $2,083, $2,103, and $2,118. Support levels are found at $2,048, $2,033, and $2,012, offering potential cushions against price drops.
The Relative Strength Index (RSI) stands at 53, indicating a slightly bullish momentum, while the Moving Average Convergence Divergence (MACD) at -2.0 lags behind its signal line at 2.6, hinting at potential bearish pressure. However, the price of gold remains above its 50-Day Exponential Moving Average (EMA) of $2,060, supporting the bullish trend. The observed double bottom pattern and the 50 EMA reinforce gold's stability around $2,060.
In conclusion, the overall trend for gold appears cautiously optimistic. Traders might consider a buy limit at 2065, aiming for a take profit at 2085, with a stop loss set at 2050, carefully observing the mentioned support and resistance levels for any shifts in the market.
Related News
- USD/CAD Price Analysis – Jan 02, 2024
GOLD Price Analysis – Jan 01, 2024
Daily Price Outlook
Gold price (XAU/USD) has failed to stop its downward trend and remained well offered around the $2,063.00 level. However, the reason for its downward rally could be attributed to the recovery of the US Dollar and Treasury yields. Notably, the 10-year US Treasury yields have rebounded to near 3.90%, and the US Dollar Index (DXY) has climbed to near 101.35.
In contrast to this, the losses in the gold price could be short-lived as the more people are betting that the Federal Reserve (Fed) will cut interest rates early. This belief is driven by improvements in the job market and a clear decrease in inflation. This puts pressure on the US Dollar, making gold, which is priced in dollars, more attractive.
Anticipated Federal Reserve Interest Rate Cut and Its Impact on Gold Prices
Gold prices are anticipated to rise at the beginning of 2024, driven by expectations of the Federal Reserve lowering interest rates from March onwards. Investors are thinking that the Fed might cut interest rates by 25 basis points in 2024. According to the CME Fedwatch tool, there is a 73% probability of this, with a 72% likelihood of further rate cuts in May. The decrease in inflation to approximately 2% reinforces the prevailing belief that the Federal Reserve will opt for rate cuts to prevent conditions from becoming excessively restrictive.
If the US keeps its strict money policies for a long time, it could affect how things look for the economy, especially with more people filing for unemployment than expected, as reported by the US Department of Labor for the week ending December 22. The Federal Reserve (Fed), even though inflation is slowing down, and the job market is not doing great, is keeping interest rates the same. This is a tricky situation for the Fed because they want to balance things carefully.
Therefore, the expected decrease in interest rates by the Federal Reserve may contribute to a rise in gold prices. Investors anticipate this trend due to factors like the rebounding US Dollar and Treasury yields.
GOLD (XAU/USD) - Technical Analysis
Gold's performance at the start of the new year presents a mixed technical outlook. The precious metal, currently priced at $2,062, has witnessed a marginal decline of 0.11%. On the weekly chart, a pivot point is established at $2,024, marking a significant level for potential price movements. The immediate resistance levels are set at $2,049, $2,077, and $2,102, posing as key barriers for any upward trend. Conversely, support levels are identified at $1,993, $1,966, and $1,944, offering crucial fallback points in case of price retracements.
The Relative Strength Index (RSI), at 48, indicates a neutral market sentiment, suggesting that gold is neither overbought nor oversold. This leaves room for potential movement in either direction. The Moving Average Convergence Divergence (MACD) stands at -2.7, below its signal line at 3.0, hinting at potential downward momentum. However, the gold price is currently hovering around its 50-Day Exponential Moving Average (EMA) of $2,067, indicating a potential for short-term bullish behavior.
From a chart pattern perspective, the asset shows a tendency towards consolidation, with no clear trend emerging in the immediate term. The technical indicators, coupled with the current economic backdrop, suggest a cautious approach to gold trading in the near future. Investors and traders should watch these key levels and indicators closely, as they will likely play a pivotal role in determining gold's market trajectory in the coming days.
Related News
EUR/USD Price Analysis – Jan 01, 2024
Daily Price Outlook
The EUR/USD currency pair continued its upward trend, remaining bullish on the first day of the new year. However, the upticks in the EUR/USD pair were supported by mild losses in the US Dollar during a holiday session. The pair maintains its broader bullish bias, with downside attempts limited well above 1.1000, and it is on track to close the year with a 3.3% advance, breaking a two-year decline streak. However, the Federal Reserve's (Fed) dovish stance has initiated a risk rally, causing the US Dollar to decline and contributing to the EUR/USD pair gains.
Economic Slowdown in the US Fuels Speculation of 2024 Fed Rate Cuts and Strengthens Euro Against Weakening Dollar
It's crucial to emphasize that recent data from the US indicates an economic slowdown. Notably, Jobless Claims surged by 118K in mid-December, surpassing the expected 110K. Meanwhile, Pending Home Sales in November remained stagnant, falling short of the anticipated 1% increase. These figures support the perspective that the US economy is gradually decelerating in Q4, potentially heading for a soft landing. This has spurred speculation about the Federal Reserve implementing rate cuts in 2024, with futures markets indicating an 85% probability of cuts in March and a total of 150 basis points throughout the year, according to the CME Group FedWatch Tool.
Therefore, the news of a slowing US economy and potential Fed rate cuts in 2024 has likely weakened the USD. This could result in a positive impact on the EUR/USD pair, leading to a potential strengthening of the Euro against the US Dollar.
Euro Strengthens Amid Steady Inflation in Spain, ECB Caution, and US Dollar's Decline
On the other side, the consumer prices in Spain held steady at a 3.3% yearly rate, indicating persistent inflation in some countries. This supports the European Central Bank's (ECB) cautious approach and strengthens the Euro. Despite the Euro standing firm, the US Dollar remains close to a five-month low due to declining US yields. Notably, the Spanish Consumer Prices Index remained unchanged in December, maintaining a 3.3% annual growth. In addition to this, Austrian Central Bank Governor and ECB member Robert Holzmann remarked on Thursday that a rate cut in 2024 is not guaranteed, providing additional support to the Euro.
Therefore, the steady inflation in Spain and the ECB's cautious stance support the Euro, potentially exerting upward pressure on the EUR/USD pair. Meanwhile, the US Dollar's proximity to a five-month low may further contribute to a stronger Euro.
EUR/USD - Technical Analysis
The EUR/USD pair begins the new year with subtle movements, indicating a cautious approach by traders. As of January 1, the pair is trading at 1.10375, marking a slight decrease of 0.23%. The currency pair, a barometer for transatlantic economic health, is navigating through crucial technical junctures that will shape its trajectory in the upcoming sessions.
On the weekly chart, the pivot point is established at $1.0982, a critical level for future directional movements. The EUR/USD faces immediate resistance at $1.1074, followed by higher barriers at $1.1131 and $1.1221. These levels serve as potential ceilings for the pair's upward movement. Conversely, support levels are set at $1.0925, $1.0833, and $1.0778, which could provide cushions against downward price pressures.
The Relative Strength Index (RSI) stands at 46, signifying a neutral to slightly bearish sentiment in the market. The Moving Average Convergence Divergence (MACD) is at -0.0009, indicating a potential for downward momentum, as it is below its signal line at 0.0012. Additionally, the pair is trading below its 50-Day Exponential Moving Average (EMA) of $1.1061, reinforcing a short-term bearish outlook.
However, the observed chart patterns, including a symmetrical triangle, suggest potential for either a breakout or a continuation of the current trend, depending on market dynamics and economic indicators in the coming days.
Related News
GBP/USD Price Analysis – Jan 01, 2024
Daily Price Outlook
The GBP/USD currency pair has been going up, reaching levels above 1.2731. However, this rise is mainly because investors are becoming more confident about the global economy, with concerns about a recession easing. Central banks in the Western countries are expected to slow down their efforts to increase interest rates, making assets tied to risk more attractive.
The British Pound has performed well against the US Dollar, partly because the Bank of England (BoE) is likely to be slower in reducing interest rates compared to other major central banks. However, economic conditions in the United Kingdom are worsening, with the economy facing a technical recession due to weak demand. To prevent further economic contraction, the BoE may start cutting interest rates sooner, potentially impacting the outlook for the Pound Sterling.
Pound Sterling Challenges Amid Global Economic Uncertainty and Central Bank Dynamics
It is worth noting that the British Pound Sterling is experiencing an uptick owing to heightened market risk appetite. Investors are optimistic about the Pound's performance, anticipating the absence of a global recession and benefiting from reduced price pressures. The demand for risky assets is on the rise as investors foresee early rate cuts by the US Federal Reserve. While the foreign exchange market might remain calm towards the year-end, the upcoming release of the S&P Global PMI next week could inject some excitement.
Therefore, the Pound Sterling is rising with higher risk appetite, driven by optimism and reduced global recession fears. Investors anticipate US Federal Reserve rate cuts, but GBP/USD impact hinges on the Bank of England's decisions amid inflation and economic indicators.
Fed's Rate Cut Expectations and Key Economic Indicators
Furthermore, the US Dollar Index (DXY) is struggling to recover due to ongoing expectations of rate cuts by the Federal Reserve (Fed). Currently hovering around 101.40, the index may retreat to its five-month low near 100.60. The past two months have seen a sharp decline in the USD Index, as the Fed shifts from a prolonged higher interest-rate stance to potential rate cuts, aiming to avoid economic strain.
Therefore, the GBP/USD pair is likely to benefit from the US Dollar Index's struggle to recover, given ongoing expectations of Federal Reserve rate cuts. The Pound may see upward momentum against the weakening US Dollar.
Looking ahead, investors are keeping their eye on the ISM Manufacturing PMI and December Employment data next week. These indicators will guide expectations for the Fed's actions in its first 2024 monetary policy meeting on January 31.
GBP/USD - Technical Analysis
As we step into the new year, the GBP/USD pair exhibits a relatively stable stance in the forex market. Trading at 1.27314, the pair has seen a marginal increase of 0.01%. The British Pound's performance against the US Dollar offers a glimpse into the intricate dynamics of the forex market, reflecting broader economic sentiments and policy shifts.
The weekly technical outlook places the pivot point for GBP/USD at $1.2621, a crucial level that could determine the direction of the pair's movement in the upcoming sessions. Resistance levels are identified at $1.2692, $1.2772, and $1.2841. These thresholds will likely serve as key points where the pair's upward trajectory could face challenges. On the flip side, support levels are marked at $1.2539, $1.2474, and $1.2398, providing potential areas of stability in the event of a downward trend.
The Relative Strength Index (RSI) stands at 49, hovering near the neutral midpoint and suggesting a balanced market sentiment without strong bullish or bearish bias. The Moving Average Convergence Divergence (MACD) is marginally negative at -0.0006, indicating potential for a downward shift but without significant bearish momentum. Furthermore, the GBP/USD pair trades just below its 50-Day Exponential Moving Average (EMA) of $1.2742, adding to the cautious outlook.
A noteworthy chart pattern is the symmetrical triangle formation, implying a period of consolidation. This pattern indicates that a breakout could be imminent, setting the stage for either an upward or downward trend depending on market dynamics and upcoming economic data.
Related News
S&P500 (SPX) Price Analysis – Dec 29, 2023
Daily Price Outlook
On Thursday, the S&P 500 slightly increased, nearly reaching its record closing high from January 3, 2022. This minimal gain came despite early advances in the session, marking one of the final trading days of 2023. The Dow Jones Industrial Average saw modest growth, achieving a second consecutive record-high close, while the Nasdaq Composite ended slightly lower. All three indices are set for substantial gains on a monthly, quarterly, and annual basis.
Market strategist Ryan Detrick from Carson Group in Omaha commented on the remarkable end-of-year rally, attributing part of it to the Federal Reserve's policy shift in mid-December. He reflected on the journey from last year's bear market, emphasizing the market's resilience and potential for recovery.
Had the S&P 500 exceeded its previous all-time high, it would have marked the official entry into a bull market since its trough in October 2022. Detrick speculated that reaching new highs could indicate robust economic prospects for 2024.
Data released earlier, including jobless claims and pending home sales, depicted a softening yet sturdy economy. This data has reinforced market expectations of an impending rate cut by the Federal Reserve, potentially achieving a "soft landing" without a recession. Financial markets are currently pricing in a 74.1% probability of a 25 basis point rate cut by the Fed in March, as per the CME's FedWatch tool.
The Dow Jones Industrial Average rose 53.58 points (0.14%) to 37,710.1, while the S&P 500 gained 1.77 points (0.04%) to 4,783.35. The Nasdaq Composite slightly declined by 4.04 points (0.03%) to 15,095.14.
Utilities led gains in the S&P 500 sectors, while energy shares declined due to lower crude prices. U.S.-listed shares of Chinese firms like Alibaba and JD.Com saw increases, while CytoSorbents and Boeing faced setbacks.
The market's slight movements come amid global shares inching higher, influenced by rate cut expectations. The MSCI world equity index recorded a minor gain, while European shares hovered near a 23-month high, projecting an annual increase of about 12.5%.
Wells Fargo's Scott Wren cautioned that while the current rally might set record highs for the S&P 500, meaningful gains could be challenging in early 2024 as the economy slows. The unemployment data indicates a cooling labor market, aligning with predictions of swift rate cuts by the Fed.
Goldman Sachs analysts anticipate the Fed to initiate a series of rate cuts starting in March, continuing until the funds rate reaches 3.25-3.5% in 2025 Q3. This forecast includes five cuts in 2024 and three additional cuts in 2025.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.4%, mainly driven by Chinese stock gains, contributing to a 7.4% increase this quarter.
S&P500 (SPX): Technical Analysis
The S&P 500 Index (SPX) is currently demonstrating a stable performance, with a slight increase of 0.04%, trading at 4783 during the Asian session. This modest growth reflects the cautious sentiment prevailing in the market as investors navigate through varying economic signals.
Key price levels for the SPX include a pivot point at $4,794, indicating a critical juncture for potential market direction shifts. Resistance levels are set at $4,853, $4,915, and $4,981, each representing a hurdle that bulls must overcome to drive the index higher. Conversely, support levels at $4,694, $4,612, and $4,539 provide a safety net against bearish downturns.
The Relative Strength Index (RSI) stands at a high 73, suggesting the market is approaching overbought conditions. Such a high RSI often signals caution among traders, as it may indicate a potential pullback or consolidation in the near future. However, the SPX is comfortably trading above its 50-Day Exponential Moving Average (EMA) of $4,560, reinforcing a short-term bullish trend.
A notable chart pattern is the presence of a Doji candle under the 4795 level, which typically indicates indecision among investors and could weaken the upward trend. This pattern suggests that market participants are evaluating various factors, including economic data and global market trends, before committing to a clear directional move.
In conclusion, the current technical outlook for the S&P 500 is cautiously bearish below the $4795 level. Investors should closely monitor this pivot point and the aforementioned technical indicators, as they may provide valuable insights into the index's potential movements in the coming days.
Related News
EUR/USD Price Analysis – Dec 29, 2023
Daily Price Outlook
In Friday's Asian trading session, the EUR/USD currency pair exhibited a modest upward trend, reaching around 1.1070, marking a 0.04% increase for the day. This change comes after a slight pullback from its recent high of 1.1139. The fluctuations in this major currency pair are largely shaped by the differing monetary policy approaches of the European Central Bank (ECB) and the Federal Reserve (Fed).
Euro Boosted by ECB's Firm Stance
The Euro has gained some traction thanks to the ECB's hawkish outlook. ECB officials have maintained a stance against market expectations of easing monetary policy. Their commitment to making data-driven decisions, independent of external pressures, has bolstered the Euro, contributing to the pair's recent upswing.
Fed's Softening Outlook Influences Market
In contrast, the Fed's more dovish remarks have influenced market sentiments in the opposite direction. Investors are increasingly betting on the US central bank cutting interest rates as early as the coming year. This sentiment is evident in the CME FedWatch Tool, which shows over an 87% likelihood of a rate cut by March, indicating a major shift in expectations.
Mixed US Economic Indicators
The US economic landscape presents a complex picture, with recent data showing mixed signals. Initial Jobless Claims for the week ending December 23 rose to 218,000, surpassing expectations and previous figures. Meanwhile, November's US Pending Home Sales did not meet the anticipated 1.0% increase, staying flat and adding to the mixed economic narrative.
Subdued Market Activity as Year Ends
As 2023 winds down, a quieter market is anticipated for the year's final trading day. Key indicators that investors will watch include Spain’s preliminary Consumer Price Index (CPI) for December and the US Chicago PMI for the same month. These data points could provide crucial insights for currency traders and set the tone for early 2024.
EUR/USD - Technical Analysis
In the realm of foreign exchange markets, the EUR/USD pair presents an intriguing scenario as it stabilizes above a crucial upward channel's support, currently trading around 1.1064. Despite losing 0.39% on Thursday, the pair exhibits resilience on Friday, suggesting a potential shift in momentum.
The EUR/USD pair is operating within a distinct framework of key technical levels. The pivotal point for the pair is set at $1.1060, with immediate resistance lying ahead at $1.1129, followed by further barriers at $1.1174 and $1.1230. These levels mark potential turning points for the currency pair. On the downside, the immediate support is observed at $1.1006, with additional supports at $1.0941 and $1.0891, providing significant thresholds that could influence the pair's movement.
Technical indicators add depth to this analysis. The Relative Strength Index (RSI) stands at 54, indicating a moderately bullish sentiment. This suggests that the pair might have enough momentum to pursue an upward trajectory. Further supporting this bullish outlook is the fact that EUR/USD trades above its 50-Day Exponential Moving Average (EMA) of $1.1011, typically a sign of a short-term bullish trend.
Chart patterns reveal a compelling story. An upward channel is currently in play, indicating a supportive trend for the pair. Additionally, the closing of a tweezer's bottom candlestick pattern above $1.1059 signals potential buying interest. This pattern is often seen as a bullish reversal indicator, suggesting that the pair might be poised for an upward movement.
In conclusion, the overall trend for EUR/USD appears cautiously bullish, particularly if it sustains above the key level of $1.10584. Traders might consider a buy entry above this level, targeting a potential take profit at 1.1141 while maintaining a stop loss at 1.09753. This forecast points towards a potential upward movement in the short term, but as always in the forex market, vigilance and attention to changing market dynamics are key.
Related News
GOLD Price Analysis – Dec 29, 2023
Daily Price Outlook
In the latest market update, Gold (XAU/USD) has seen a slight pullback in its value during Friday's early Asian trading hours, hovering around $2,065 after recently peaking at $2,088. This modest decline in gold prices can be attributed to a strengthening US Dollar (USD) and an uptick in the yields of US Treasury bonds, two critical factors that traditionally exert downward pressure on the metal. Despite this, the possibility of a rate cut by the Federal Reserve (Fed) in March 2024 seems to be providing a floor for gold's price.
US Dollar Index and Treasury Yield Dynamics
The US Dollar Index (DXY), which tracks the performance of the USD against a basket of major currencies, has seen a noticeable recovery, rising from 100.85 to 101.20. This rebound comes after reaching its lowest point since July. In tandem, the yield on the benchmark 10-year US Treasury note has crept up, stabilizing near 3.85%. These developments have contributed to the recent fluctuations in gold’s market price.
Inflation Trends and US Economic Outlook
Recent US economic indicators have delivered a varied picture. The core Personal Consumption Expenditures (PCE) Price Index, a key inflation metric closely monitored by the Fed, rose by 3.2% year-over-year in November, showing signs of inflation cooling. This, along with the strong growth of the US economy and low unemployment figures, strengthens the hypothesis that the Fed may pause its interest rate hikes and potentially shift towards cutting rates soon.
US Labor and Housing Market Data
The latest US labor market data revealed an increase in Initial Jobless Claims to 218,000 for the week ending December 23, higher than the predicted 210,000. Continuing Claims also saw an uptick, reaching 1.875 million, the highest in the last month, suggesting some changes in the job market dynamics. Moreover, November's Pending Home Sales figures did not achieve the anticipated 1% growth, remaining unchanged.
Focus on Chicago PMI
The market's focus is now shifting towards the upcoming release of the Chicago PMI for December. This indicator is considered significant for gauging economic health, although it may not incite substantial market movement given the holiday season and the winding down of trading activities as the year comes to a close.
In conclusion, while the US Dollar's resurgence and rising Treasury yields present challenges for gold, the overall market sentiment remains cautiously optimistic, with the potential for a Fed rate cut providing underlying support for gold prices.
GOLD (XAU/USD) - Technical Analysis
The recent technical chart for gold illustrates a market at a crossroads. Currently, gold trades at $2,069.65, experiencing a slight 24-hour movement down by 0.07%. The chart showcases a pivotal moment, with the metal hovering around a key pivot point at $2,069.20, according to the 4-hour timeframe analysis.
The immediate resistance levels for gold are placed at $2,088, $2,108, and $2,122. Should the price ascend past these, it would signal increased bullish momentum. Support levels are drawn at $2,055, $2,039, and $2,018, which gold must hold to prevent a bearish downturn. A notable feature on the chart is the upward trendline, which has been supporting the price movement, signifying a robust bullish trend. This trendline, combined with the pivot point, creates a significant threshold that could dictate the short-term direction of the market.
The Relative Strength Index (RSI) is currently at 53.82, which leans towards a bullish sentiment but still remains below the overbought threshold, suggesting there is room for upward movement without immediate concerns of a reversal due to overbuying. The 50-Day Exponential Moving Average (EMA) stands at $2,054.292, slightly below the current price, reinforcing the bullish outlook as the price remains above this critical moving average.
The Moving Average Convergence Divergence (MACD) indicator presents a more nuanced picture with a current value of 0.016, slightly above the signal line. This indicates potential upward momentum, although the proximity of the two lines calls for caution.
Analyzing the chart patterns, there is a visible symmetrical triangle, a pattern that typically suggests a continuation of the current trend, which, in this case, is upward. The implication of this pattern is that if gold can sustain its position above the upward trendline, it could potentially test the resistance levels identified.
In conclusion, the current technical outlook for gold is cautiously optimistic. The metal's price action around the pivot point and the adherence to the upward trendline will be pivotal in determining its short-term trajectory. If gold maintains its stance above the 50 EMA and respects the trendline support, we may expect it to challenge the immediate resistance levels. Conversely, a drop below could see gold testing its foundational supports.