Daily Price Outlook

Despite the bearish US dollar, the GBP/USD currency pair failed to stop its downward trend and dropped to the 1.2717 level. However, the reason for its decline could be attributed to deepening fears of a recession in the United Kingdom's economy. According to the latest estimates, the British economy contracted by 0.1% in the July-September period. According to the latest projections from the BoE, the economy is expected to remain stagnant in the last quarter of this year.

Meanwhile, the upbeat Retail Sales data for November, driven by robust sales at non-food retail stores, failed to give some relief to the Pound Sterling. Apart from this, the US dollar trades near a five-month low around 101.46 as a more-than-anticipated decline in the core Personal Consumption Expenditure price index (PCE) for November has prompted bets in favor of early rate cuts by the Fed. This was seen as one of the key factors that could help the GBP/USD pair limit its deeper losses.

Pound Sterling's Resilience Amid Economic Factors and Rate Cut Speculations

It is worth noting that the GBP was holding its ground against the US Dollar, thanks to easing price pressures in the US, sparking expectations of early rate cuts by the Federal Reserve in 2024. However, the Pound's resilience was fueled by positive Retail Sales data for November, driven by strong sales in non-food retail stores during Black Friday.

However, the upticks were short-lived as the GBP/USD pair lost momentum due to concerns about a UK recession. The UK Office for National Statistics revised its Q3 2023 economic contraction to 0.1%, contrary to earlier expectations of stagnation.

The Bank of England expects a slow Q4, and there's talk about possible interest rate cuts by 2024. Chancellor Jeremy Hunt suggests lowering rates to control inflation and boost growth. But, the Bank of England officials are careful and feel it's too soon for rate cuts, even though prices are dropping.

Barclays believes the Bank of England might cut rates in May, earlier than expected in August, because they're worried about a UK recession and the Chancellor's different approach to rate cuts for economic help.

Impact on GBP/USD Pair Amid Weaker US Dollar and Expected Fed Rate Cuts

Besides this, the market is expected to be quiet this shortened holiday week. The US Dollar Index (DXY) is around a five-month low at 101.46 because the core Personal Consumption Expenditure price index (PCE) for November dropped more than expected. This has led to predictions of early rate cuts by the Fed. The monthly US core PCE data only grew by 0.1%, missing the expected 0.2% growth, and the yearly inflation slowed to 3.2%, below the expected 3.3%.

Therefore, the weaker US Dollar, driven by lower-than-expected core PCE growth, could benefit the GBP/USD pair. With heightened expectations of early Fed rate cuts, the Pound may see strength against the US Dollar.

GBP/USD - Technical Analysis 

In the intricate financial tapestry of the forex market, the GBP/USD pair continues to be a focal point for traders. On December 27, this pair has shown a slight uptick, trading at 1.27297, marking a marginal increase of 0.05%. This subtle movement indicates the ongoing cautious sentiment in the currency market.

The GBP/USD pair's current pivot point is set at $1.2731, forming a critical juncture for future price movements. The pair faces immediate resistance levels at $1.2762, $1.2794, and $1.2832. Concurrently, support levels are firmly established at $1.2681, $1.2646, and $1.2613. These price points are crucial for traders as they navigate through the short-term fluctuations of this currency pair.

From a technical analysis standpoint, the Relative Strength Index (RSI) for GBP/USD is currently at 59, indicating a moderately bullish sentiment. This suggests that buyers have a slight edge over sellers in the market. Additionally, the pair is trading above its 50-Day Exponential Moving Average (EMA) of $1.2682, further confirming the short-term bullish trend. This positioning above the EMA suggests potential for continued upward movement in the pair.

In summary, the overall trend for GBP/USD appears to be bullish, especially above the 50 EMA mark. In the short term, it is anticipated that the pair may test its resistance levels. Traders considering entering the GBP/USD market might look at a buy limit of 1.2724, with a take-profit target of 1.2794 and a stop loss at 1.2678.

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Daily Price Outlook

The EUR/USD pair failed to stop its downward trend and remained well offered around below the 1.1040 level. However, the reason for its sluggish movement could be attributed to the lack of any major data. Meanwhile, the downward trend was further bolstered by the European Central Bank (ECB) left its benchmark interest rates unchanged at its last meeting of the year. In contrast to this, the bearish US dollar, pressured by the dovish fed stance, was seen as one of the key factor that cap further losses in EUR/USD pair.

Federal Reserve's Inflation Data and Rate Cut Signals: Potential Impact on EUR/USD Pair

It is important to mention that the Federal Reserve's preferred measure of inflation, the Core Personal Consumption Expenditures Price Index (PCE), went up by 3.2% compared to last year, slightly below the expected 3.3%. Looking at the monthly changes, the Core PCE increased by 0.1%, falling short of the expected 0.2%.

At the recent December meeting, the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged and hinted at the possibility of three rate cuts in 2024. This suggests that the Fed is closely monitoring economic conditions and considering adjustments in the coming year.

Therefore, this news of the Federal Reserve maintaining interest rates and indicating potential rate cuts in 2024 could influence the EUR/USD pair by affecting the overall sentiment and dynamics in the currency market.

ECB's Cautious Approach and Optimistic Statements: Potential Support for the Euro and EUR/USD Pair

Furthermore, the European Central Bank (ECB) wrapped up the year by keeping its benchmark interest rates unchanged in the latest meeting. ECB President Christine Lagarde made it clear that the ECB's decisions hinge on data, not influenced by market trends or time pressures.

Adding to this, ECB Vice President Luis de Guindos mentioned that it's too early to consider easing monetary policy. He also expressed confidence that the Eurozone won't experience a technical recession. These more optimistic statements from the ECB could potentially boost the Euro (EUR) and limit the downside for the EUR/USD pair. In simpler terms, the ECB is taking a cautious approach, considering economic data rather than rushing into policy changes, and this stance might support the Euro in the currency market.

Therefore, the ECB's decision to maintain interest rates, coupled with optimistic statements, will likely bolster the Euro (EUR) and mitigate downward pressure on the EUR/USD pair, supporting the Euro in currency markets.

EUR/USD - Technical Analysis 

In the realm of forex trading, the EUR/USD pair remains a critical focus for investors. On December 27, this currency pair exhibits a subtle yet positive change, trading at 1.10447, marking a slight increase of 0.02%. The currency pair's stability is noteworthy, especially considering the current global economic landscape.

The technical analysis of EUR/USD reveals that the pair's pivot point is currently at $1.1044. Investors are closely monitoring resistance levels at $1.1061, $1.1106, and $1.1152. On the support side, key levels are at $1.0981, $1.0937, and $1.0891. These price points are significant for traders as they navigate the forex market's fluctuations.

The Relative Strength Index (RSI) for EUR/USD is at 66, hovering in the bullish sentiment territory without reaching overbought conditions. This suggests a moderately strong buying interest in the market. Furthermore, the pair's price is above the 50-Day Exponential Moving Average (EMA) of $1.0967, reinforcing a short-term bullish trend. This positioning above the EMA is a positive sign for potential upward momentum.

In terms of chart patterns, an upward trendline is supporting the ongoing uptrend in EUR/USD. This pattern indicates a potential continuation of bullish momentum in the short term.

Overall, the trend for EUR/USD appears to be bullish, particularly above the current EMA level. In the short term, it is anticipated that the pair may test its resistance levels. Traders considering entry into the EUR/USD market might contemplate a buy limit at 1.10272, with a take-profit target at 1.10830 and a stop loss at 1.09733.

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Daily Price Outlook

Despite the bearish US dollar and higher crude oil prices, the USD/CAD currency pair prolonged its upward trend and remained well bid around above 1.3260 due to the ongoing signs of economic slowdown in Canadian economy. It is worth noting that the Canadian Dollar is facing challenges in attracting buyers due to ongoing signs of an economic slowdown. The latest economic data reveals that the monthly Gross Domestic Product (GDP) of Canada has shown no growth for the fourth consecutive reporting period, remaining flat at 0.0% in October. This follows a downward revision of September's GDP from 0.1% to flat.

Impact of Weaker-than-Expected US Inflation on Fed Rate Hike Expectations

Apart from this, the recent data on US spending suggests that inflation is not as high as expected. This has led people to think that the Federal Reserve might lower interest rates more often and by a larger amount in 2024. The key inflation measure, called the Core PCE Price Index, was 3.2% for the year through November, a bit lower than the predicted 3.3% and down from October.

Investors are now betting that the Federal Reserve will make bigger interest rate cuts next year than the Fed itself has predicted. Money markets indicate potential cuts of over 160 basis points through 2024, compared to the Fed's forecast of 75 basis points by the end of next December.

Therefore, the softer-than-expected US inflation may weaken the USD against the CAD, as it fuels expectations of more frequent Fed rate hikes in 2024.

Geopolitical Tensions and Fed Rate Cut Expectations Drive WTI Crude Oil Prices

WTI Crude oil prices edged up on Tuesday due to heightened geopolitical tensions in the Middle East and optimism about potential interest rate cuts by the U.S. Federal Reserve. Investors are optimistic that rate cuts will spur global economic growth and increase demand for oil. The recent rebound in oil prices is also attributed to concerns about conflict in the Red Sea.

However, the announcement of the resumption of shipping routes by Maersk has eased some supply worries. Furthermore, the expectations of Fed interest rate cuts in response to lower-than-targeted inflation have further supported oil prices, creating a positive outlook for the market.

Therefore, the higher crude oil prices tend to boost the Canadian dollar and may limit some of the gains of the USD/CAD pair.

USD/CAD - Technical Analysis 

In the fluctuating world of forex trading, the USD/CAD pair presents a nuanced picture as it navigates through various economic pressures and market sentiments. As of December 26, the pair is trading at 1.32527, marking a slight decrease of 0.12%. This movement reflects the ongoing tug-of-war between the US and Canadian economies and their respective monetary policies.

The pair's pivot point is set at 1.3111, acting as a critical marker in its price movement. The immediate resistance is found at 1.3189, with further resistance levels at 1.3296 and 1.3378. These points represent potential barriers that the pair might face in its upward journey.

On the downside, the immediate support level lies at 1.2996, followed by subsequent supports at 1.2889 and 1.2778. These levels are essential in determining the pair's stability and potential rebound during a downturn.

The Relative Strength Index (RSI) for USD/CAD is currently at 28, indicating that the pair might be in oversold territory. This suggests a potential rebound or stabilization in the near future.

The Moving Average Convergence Divergence (MACD) stands at -0.00021, just below its signal of -0.00364, hinting at a bearish sentiment in the short term.

Furthermore, the pair's current price is below its 50-Day Exponential Moving Average (EMA) of 1.3274, confirming the bearish trend.

The USD/CAD pair shows a breakout from the upward channel, suggesting a shift in momentum that could lead to a buying trend if sustained.

The overall trend for USD/CAD is currently bearish, below the 1.32900 mark. However, there is potential for change if the pair tests and breaks through the resistance levels in the coming days.

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Daily Price Outlook

Gold price (XAU/USD) maintained its upward trend and gained some further traction around 2,065 level. However, the reason for its upward trend could be attributed to the ongoing bets for an early rate cut by the Federal Reserve. Meanwhile, the US bond yields and the USD dropped near a five-month low, lending some additional support to the gold price. Moving on, Investors were still digesting data released on Friday that showed U.S. prices fell in November for the first time in more than 3-1/2 years, underscoring the economy's durability.

Federal Reserve's Policy Shift Sparks Surge in Gold Prices Amid Rate Cut Expectations

It's important to note that the Federal Reserve recently shifted its approach to interest rates, bringing relief to gold price. It should be noted that the Fed hinted at the end of rate hikes and the possibility of future cuts. Analysts from Citi highlighted this as a significant move to ease financial conditions. The shift is driven by concerns about a slowing economy and lower core inflation.

Now, the market is predicting a 75% chance of a 25 basis points rate cut in March, compared to just 21% in November. Investors are also factoring in more than 150 basis points of rate cuts next year.

Therefore, the recent shift in the Federal Reserve's stance on interest rates has buoyed gold prices, pushing them to a near three-week high. The anticipation of an early rate cut, with a 75% likelihood in March, has fueled positive sentiment among investors towards gold.

Economic Shift Sparks Expectations of Central Bank Rate Cuts, Boosting Gold Prices

Moreover, a sharp drop in UK inflation in November, hitting its lowest point in over two years, has sparked optimism about the Bank of England possibly lowering interest rates in the first half of 2024. The trend continues in the Eurozone, where recent data indicates softer inflation, raising the possibility of the European Central Bank making rate cuts sooner than expected.

These developments highlight a broader economic shift, with central banks considering measures to stimulate growth amidst concerns about slowing inflation. Investors are closely watching these indicators for insights into the future direction of monetary policy.

Therefore, the decline in UK inflation and softer Eurozone inflation data has fueled expectations of central banks, like the Bank of England and the European Central Bank, considering rate cuts. This has positively impacted gold prices as investors tend to invest in gold amid economic uncertainties.

GOLD (XAU/USD) - Technical Analysis 

As the year draws to a close, Gold (XAU/USD) continues to command attention in the financial markets, especially amid evolving global economic conditions. Currently trading at $2,064, Gold has seen a modest increase of 0.54%, maintaining its position as a key asset in the volatile landscape of commodities trading.

The pivotal point for Gold stands at $2,024, serving as a foundation for its current valuation. Resistance levels are staged at $2,047, $2,078, and a more distant $2,101, marking potential ceilings in the asset's upward journey. On the flip side, support levels at $1,991, $1,966, and $1,945 offer critical thresholds that could stabilize any bearish trends.

The Relative Strength Index (RSI) hovers around 67, indicating a strong bullish sentiment without veering into the overbought territory. This suggests room for further upward movement in Gold prices. The Moving Average Convergence Divergence (MACD) stands at 1.55, notably above its signal of 8.60, reinforcing the bullish momentum.

Additionally, Gold's price is presently above its 50-Day Exponential Moving Average (EMA) of $2,055, signaling a short-term bullish trend. This aligns with the general market sentiment, suggesting that Gold's current rally may have more room to grow.

A notable pattern in Gold's chart is the downward trendline extending resistance at $2,070. A decisive break above this level could open the door to new highs, suggesting the potential for a continued bullish trend.

In conclusion, Gold's overall trend remains bearish below the $2,070 mark, with a possible shift to bullish above this threshold. In the short term, the market will closely watch for Gold's interaction with the $2,070 resistance, which could be a determining factor in its trajectory as we head into the new year.

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The AUD/USD currency pair maintained its upward trend and gained some further traction around the 0.6808 level. However, the reason for its upward trend could be attributed to the upbeat market sentiment, which tends to boost riskier assets like the Australian dollar and contributes to the gains in the AUD/USD pair. In the meantime, the bearish US dollar, pressured by bets for an early rate cut by the Federal Reserve, was seen as another key factor that kept the AUD/USD pair higher. The US bond yields and the USD dropped near a five-month low, lending additional support to the gold price.

Fed's Monetary Policy Impact: Potential Rate Cut and Effects on Currency Markets

It's worth noting that the latest US economic report for 2023 had some interesting insights. In November, the Core PCE Price Index, a measure of inflation, rose by 0.1%, slightly below the expected 0.2%. Additionally, Durable Goods Orders saw a 5.5% increase, showing strength in the manufacturing sector. The University of Michigan Consumer Sentiment Index also rose to 69.7 in December.

Surprisingly, the market didn't react much, indicating a steady economy and inflation close to the Federal Reserve's target. This led to increased expectations of easing measures, with US Treasury yields holding steady. The US Dollar index dropped, hitting its lowest level since July at 101.42, benefiting the Australian Dollar.

The Fed's hint at the end of rate hikes and the possibility of future cuts has eased financial conditions, with a 75% chance of a 25 basis points rate cut in March. This shift has not only impacted currency markets but also boosted AUD/USD pair prices.

RBA Hawkish Stance Drives AUD/USD Pair to Impressive 2% Weekly Rally

Another factor that has been boosting the AUD/USD pair was the Aussie's impressive performance, currently on track for a nearly 2% weekly rally. This upward momentum was notably fueled by the hawkish Reserve Bank of Australia (RBA) minutes released earlier this week. The minutes served to underscore the divergence between the RBA's more hawkish stance and the dovish outlook of the Federal Reserve, providing a fresh and significant impulse to the currency pair.

AUD/USD - Technical Analysis 

As we approach the end of the year, the Australian Dollar (AUD) against the US Dollar (USD) stands as a testament to the dynamic nature of global currency markets. The AUD/USD pair is currently trading at 0.68150, marking an increase of 0.22%. This upward trend reflects the resilience of the Australian economy and the influence of international market forces.

The pair's pivotal point rests at 0.6719, a crucial benchmark in determining its short-term trajectory. Resistance levels are staged at 0.6775, 0.6853, and 0.6906, indicating potential barriers in the upward journey of AUD/USD.

Conversely, support levels at 0.6636 and 0.6582 will play significant roles in providing a safety net against any downturns. The double appearance of 0.6582 as a support level underscores its importance as a strong foundational point for the currency pair.

The Relative Strength Index (RSI) is at 65, suggesting a bullish sentiment without reaching the overbought territory, signaling room for further appreciation in AUD/USD. The Moving Average Convergence Divergence (MACD) stands at 0.000030, marginally above its signal of 0.002480, reinforcing the bullish outlook.

Furthermore, the AUD/USD pair is trading above its 50-Day Exponential Moving Average (EMA) of 0.6799, confirming the bullish trend in the short term.

The AUD/USD pair's chart patterns have yet to be clearly defined, leaving room for various interpretations. However, the overall market sentiment leans towards a bullish trend.

In conclusion, the AUD/USD pair's overall trend is bullish above the 0.6784 mark, hinting at potential challenges to resistance levels in the near future. This bullish trend is expected to continue, with the pair likely to test higher resistance levels.

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Gold price (XAU/USD) has sustained its upward momentum, staying robust above the $2,050 mark. This surge is in response to the US Bureau of Economic Analysis reporting softer-than-expected core Personal Consumption Expenditure (PCE) price index for November. The monthly core PCE index grew slower than anticipated at 0.1%, compared to the expected 0.2%. On an annual basis, inflation slowed to 3.2%, slightly below the consensus of 3.3%.

The Federal Reserve's projection of a 3.2% PCE inflation rate by the end of 2023 has further influenced market sentiment. With the Fed's interest rate at a 22-year high, investors are keenly anticipating potential rate cuts, especially as US inflation eases, driving XAU/USD briefly above $2,070.

Gold Surges Above $2,060 on Softer US Inflation and Rate Cut Anticipation

It's worth noting that the price of gold has surged past the critical $2,060 resistance level following a softer-than-expected US core PCE inflation report. The annual US core PCE data, at 3.2%, aligns with the Fed's projections from its recent Summary of Projections. If the inflation report continues to decline more than expected, it could delay expectations of a prolonged restrictive policy, bringing the possibility of a rate cut into focus.

Investors are now anticipating the Fed's first rate cut in March, followed by another in May. Fed Chairman Jerome Powell's comments on avoiding high interest rates have contributed to these expectations. Despite some policymakers trying to downplay the possibility of rate cuts, the US Dollar faced pressure due to a slight downgrade in the Q3 GDP estimate, indicating potential challenges in the labor market and price stability. Nevertheless, the US economy's resilience stands out compared to other G7 economies.

Therefore, the news of a potential rate cut and economic challenges pressured the US Dollar, boosting gold as a safe-haven asset.

GOLD (XAU/USD) - Technical Analysis 

As the market enters the festive period, Gold (XAU/USD) has witnessed a notable uptick, currently trading at $2,053, marking a 0.36% increase. This resurgence reflects a growing appetite among investors for safe-haven assets amidst global economic uncertainties.

The key pivot point for Gold stands at $2,013, with immediate resistance observed at $2,056. Should this bullish momentum continue, we may see the precious metal test subsequent resistance levels at $2,089 and $2,130. Conversely, immediate support lies at $1,979, followed by stronger levels at $1,937 and $1,903, which could serve as buffers against potential retracements.

The Relative Strength Index (RSI) is currently at 60, indicating a bullish sentiment without venturing into overbought territory. This suggests that there is room for upward movement, but caution is warranted as market dynamics can shift rapidly.

Meanwhile, the Moving Average Convergence Divergence (MACD) shows a value of 1.25 with a signal line at 7.55, hinting at possible bullish momentum in the near term. This is further corroborated by the price's position relative to the 50-Day Exponential Moving Average (EMA), which currently stands at $2,051. Being above the 50 EMA underlines a short-term bullish trend for Gold.

A key technical pattern observed is the triple top breakout at $2,045, a bullish signal that could propel Gold towards $2,088 or potentially higher. This breakout indicates a strong buying interest at higher levels, suggesting a consolidation of the bullish trend.

In conclusion, the overall trend for Gold appears bullish, especially if it maintains above the $2,045 threshold. In the short term, we can anticipate Gold to challenge resistance levels, particularly around $2,056 and potentially higher, depending on market sentiments and macroeconomic factors.

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The EUR/USD currency pair experienced a consistent upward trajectory, reaching its peak in 18 weeks at 1.1040. However, the reason for its upward trend could be attributed to the bearish US dollar, which was being prssure by the lower-than-expected US inflation figures led investors to anticipate additional rate cuts from the Federal Reserve in 2024.

Impacts of US Economic Indicators on EUR/USD Pair

It's important to highlight that the US Personal Consumption Expenditure (PCE) Price Index, a measure of inflation, didn't meet expectations. The Core Annualized PCE Price Index for the year until November was 3.2%, below the predicted 3.3%, and even lower than October's 3.4%. This has led money markets to expect the Federal Reserve (Fed) to cut interest rates more quickly in 2024.

Investors predict a faster rate of cuts, around 160 basis points, compared to the Fed's projection of 75 basis points by the end of 2024. However, the US Durable Goods Orders beat expectations at 5.4% for November, suggesting the economy might be stronger than anticipated, potentially affecting the extent of future rate cuts.

Therefore, the softer-than-expected US inflation and anticipation of faster rate cuts by the Fed weakened the US Dollar, benefiting the EUR/USD pair. Positive Durable Goods Orders signaled potential economic strength, influencing market sentiment.

ECB's Cautious Stance and Optimism Impacting EUR/USD Dynamics

Moreover, on Thursday, the Vice President of the European Central Bank (ECB), Luis de Guindos, expressed that it's too early to consider easing monetary policy. He assured that the ECB doesn't foresee a technical recession in the Eurozone. De Guindos also mentioned that a fiscal reform deal within the EU would be welcomed as it could reduce market uncertainty.

Meanwhile, ECB Governing Council member Martins Kazaks, on Wednesday, suggested that maintaining current interest rates is necessary for some time. However, he hinted that the first rate cut might happen later than what investors are currently expecting, possibly around mid-2024.

Therefore, the ECB's cautious stance and optimism about avoiding a recession in the Eurozone may strengthen the Euro.

EUR/USD - Technical Analysis 

As Christmas day unfolds, the EUR/USD pair is showing a modest uptick, currently trading at 1.10146, marking a slight increase of 0.02%. This movement comes amidst a complex backdrop of economic uncertainties and shifting market sentiments.

The primary pivot point for the pair is established at $1.0882. Looking ahead, immediate resistance is observed at $1.1020. Should the Euro maintain its upward trajectory, further resistance could be encountered at $1.1143 and $1.1291. On the downside, immediate support lies at $1.0754, with additional safety nets at $1.0606 and $1.0482.

The Relative Strength Index (RSI) stands at 64, indicating a bullish sentiment that is not yet in the overbought territory. This suggests there could be room for further upward movement, although caution is always advised in such volatile markets.

The Moving Average Convergence Divergence (MACD) shows a value of 0.00020 with a signal line at 0.00247. This alignment hints at potential bullish momentum in the near term, suggesting the Euro might continue its upward trend against the Dollar.

Furthermore, an ascending triangle breakout at 1.09901 indicates a buying trend for the EUR/USD pair. This pattern, often associated with bullish momentum, suggests a continuation of the upward trend, provided the pair maintains its stance above this breakout point.

In conclusion, the overall trend for the EUR/USD pair appears to be bullish, especially if it remains above the 1.09901 threshold. In the short term, the pair is likely to test the immediate resistance levels, with a potential to push towards higher resistances depending on the prevailing market conditions and economic data releases.

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The GBP/USD currency pair has maintained its upward momentum, reaching the 1.2700 level. This surge can be attributed to the positive Retail Sales report in November from the UK, surpassing expectations. Simultaneously, the weakened US dollar, influenced by the dovish stance of the Federal Reserve, has further bolstered the GBP/USD pair. These factors together are pushing the GBP/USD pair up, showing a connection between the strong UK retail sector and the cautious approach of the US Federal Reserve, which is making the US dollar weaker.

UK Retail Sales Resilience Amidst GDP Variations and Impact on GBP/USD Pair

It's worth noting that UK Retail Sales had a strong month in November, growing by 1.3% compared to the expected 0.4%. This rebounded from October, where sales were flat at 0.0%. The yearly figures also exceeded predictions, showing a 0.1% increase instead of the expected -1.3%, recovering from the previous -2.5% (slightly revised from -2.7%).

Despite a less-than-expected UK Gross Domestic Product (GDP) print, which came in at 0.3% instead of the anticipated 0.6%, Pound Sterling remained strong. The quarterly GDP declined by -0.1%, not meeting the expected 0.0% flat reading. However, the robust Retail Sales performance helped offset these GDP figures.

Therefore, the GBP/USD pair received a boost from the strong UK Retail Sales despite lower-than-expected GDP. The positive sales data outweighed economic concerns, contributing to the Pound Sterling's resilience against the US dollar.

Recent Economic Indicators and Their Impact on the GBP/USD Pair

Furthermore, the US Dollar experienced downward pressure, mainly attributed to a slowdown in inflation. The US Personal Consumption Expenditure (PCE) Price Index for November indicated a deceleration in inflation, with an annualized Core PCE inflation of 3.2%. This figure is slightly below the anticipated 3.3% and a bit lower than the revised previous rate of 3.4% (adjusted down from 3.5%).

US Durable Goods Orders for November exceeded expectations, indicating that the US economy might not be weakening as swiftly as some investors had feared. The substantial 5.4% increase surpassed the predicted 2.2%, bouncing back from the revised previous figure of -5.1% (adjusted from -5.4%).

Therefore, the GBP/USD pair gained from a weakened US Dollar, with slowing inflation and Durable Goods Orders surpassing expectations, signifying a robust US economy. This bolstered the Pound, leading to its strength against the US dollar.

GBP/USD - Technical Analysis 

On this Christmas Day, the GBP/USD pair is exhibiting a slight upward movement, currently trading at 1.26983, a modest increase of 0.06%. This subtle yet positive shift reflects cautious optimism in the market, amidst global economic uncertainties and holiday trading conditions.

The pivot point for the pair is set at $1.2523, serving as a key juncture for future price movements. The immediate resistance is identified at $1.2647, followed by further resistance levels at $1.2813 and $1.2951. On the downside, the support levels are placed at $1.2363, $1.2225, and $1.2088, which could provide crucial buffers against any potential declines.

The Relative Strength Index (RSI) for GBP/USD stands at 53, suggesting a slight bullish bias but not excessively so, indicating that the pair could have more room for upward movement.

The Moving Average Convergence Divergence (MACD) displays a value of 0.000340, with the signal line at 0.000800. This configuration points to a potential bullish momentum, albeit with a degree of caution, as market conditions remain fluid.

The 50-Day Exponential Moving Average (EMA) for the pair is at $1.2694, aligning closely with the current price, suggesting that the pair is maintaining a short-term bullish trend.

A key observation in the chart pattern is the overall upward channel, which supports a buying trend in GBP/USD. This pattern indicates a steady but gradual ascent, providing a favorable environment for potential bullish momentum.

In conclusion, the overall trend for GBP/USD appears bullish, particularly if the pair sustains above the 1.2630 level. In the short term, the pair is likely to test the immediate resistance levels, with the potential to push towards higher resistances, depending on the broader market sentiment and economic developments.

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Daily Price Outlook

The EUR/USD currency pair extended its upward rally and remained well bid above the 1.1000 level. However, the upticks were primarily driven by the weaker US Dollar (USD) and the hawkish stance of the European Central Bank, lifting the EUR/USD pair. Investors await November’s US Core Personal Consumption Expenditure Price Index (Core PCE) on Friday, projected to rise 0.2% MoM and 3.3% YoY.

ECB's Cautious Stance Favors Euro Amid Global Uncertainties

It is worth noting that the European Central Bank (ECB) Vice President, Luis de Guindos, mentioned on Thursday that it's too early to consider easing monetary policies. He assured that the ECB doesn't anticipate a technical recession in the Eurozone and expressed a positive stance on an EU fiscal reform deal, believing it would ease market uncertainties.

On a similar note, Martins Kazaks, a member of the ECB Governing Council, stated that maintaining current interest rates is necessary for a while. However, he suggested that the first rate cut might happen later than what investors are currently expecting, possibly not until around mid-2024.

Therefore, this news suggests a cautious approach by the ECB, supporting the Euro against the US Dollar.

Fed's Cautious Stance and Weaker US GDP Propel EUR/USD Pair

Moreover, the Federal Reserve (Fed) has taken a more cautious approach, hinting at possible 75 basis points (bps) in rate cuts in the latter part of 2024. On the economic front, the US Bureau of Economic Analysis (BEA) reported on Thursday that the country's Gross Domestic Product (GDP) in Q3 expanded by 4.9%, slightly below the market's 5.2% expectation.

Hence, this less-than-stellar US data, coupled with the Fed's expectation of three rate cuts, puts downward pressure on the US Dollar. This, in turn, provides support for the Euro against the Dollar (USD), benefiting the EUR/USD currency pair.

EUR/USD - Technical Analysis

On December 22, the EUR/USD pair presents a nuanced technical landscape as it trades slightly down by 0.09% at 1.1002. This subtle decline comes amid a complex interplay of economic factors and market sentiments. The pair is currently navigating a crucial juncture, with a pivot point set at $1.0765. On the upside, it encounters immediate resistance at $1.0885, with further barriers at $1.1025 and $1.1151. Conversely, the currency pair finds support at $1.0619, followed by lower levels at $1.0493 and $1.0366, which will be vital in cushioning any downward movement.

The Relative Strength Index (RSI) for EUR/USD stands at 64, suggesting a predominantly bullish market sentiment but still shy of overbought territory. This implies there might be some room left for upward momentum before any potential pullback. In contrast, the Moving Average Convergence Divergence (MACD) is at a modest 0.00017, just above its signal line at 0.00223, indicating that while there is potential for upward momentum, it might be limited.

A key observation in the chart patterns is the presence of a triple top pattern with resistance extending at $1.1006. This pattern usually signifies a critical resistance level, and its breach could pave the way for a bullish breakout. Currently, the EUR/USD pair is trading just above the 50-Day Exponential Moving Average (EMA) of $1.0984, reinforcing a short-term bullish bias. However, the triple top pattern's resistance level is crucial and needs to be closely monitored.

Given these technical indicators, the immediate outlook for EUR/USD is cautiously bullish, especially if it manages to break out above the $1.1008 mark. Such a breakout could lead the pair to test higher resistance levels in the short term. Conversely, failure to breach this critical resistance might see the pair retreating towards its support levels.

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Daily Price Outlook

Gold price (XAU/USD) maintained its upward trend and surged to a near three-week high around above the $2,050 level. However, the reason for its upward trend could be attributed to the ongoing bets for an early rate cut by the Federal Reserve, which typically leads to a decrease in the value of the U.S. dollar, making gold more attractive to investors as a hedge against inflation, thereby positively affecting gold prices. It should be noted that the US bond yields and the USD hit near a multi-month low, providing extra support to the gold price.

Looking forward, investors are unsure when the US central bank will cut interest rates in 2024. So, the focus is on the US Core Personal Consumption Expenditure (PCE) Price Index, influencing the Fed's decisions and impacting gold prices. Despite uncertainties, XAU/USD appears set for a second consecutive weekly gain.

Gold Prices Surge on Anticipated Fed Policy Shift and Global Rate-Cutting Trends

It is worth noting that the gold prices reached their highest since December 4 due to expectations of a change in the Federal Reserve's policy. Despite Fed officials pushing back on quick rate cuts, investors remain unconvinced. Notably, the CME Group's FedWatch Tool suggests a higher chance of a rate cut by March 2024, with 150 bps of cuts by year-end. Economic data shows a 4.9% growth in the US economy in Q3, slightly below the previous 5.2% estimate. Jobless claims rose but remain historically low. With low Treasury bond yields and a weaker dollar, a global rate-cutting trend could favor gold and bullish traders.

Therefore, this news suggests a positive impact on gold prices, driven by expectations of Fed policy changes, economic data, and global rate-cutting trends favoring bullish sentiments in the gold market.

Prospect of Bank of England and ECB Rate Cuts Boost Gold Prices Amid Economic Uncertainties

Furthermore, the major drop in UK inflation in November, the lowest in over two years, sparks hopes for Bank of England rate cuts in early 2024. Similarly, soft inflation data from the Eurozone hints at potential earlier rate cuts by the European Central Bank. Therefore, the prospect of rate cuts by the Bank of England and the European Central Bank could positively influence gold prices amid economic uncertainties.

GOLD (XAU/USD) - Technical Analysis 

Gold's market presence on December 22 showcases a slight uptick, with prices climbing by 0.23% to reach $2,050. This upward movement positions gold near its pivot point at $1,980, confronting immediate resistance at $2,012, followed by higher challenges at $2,054 and $2,091. On the flip side, support levels are identified at $1,940, $1,905, and $1,871, which could play a crucial role in gold's price direction.

From a technical standpoint, the Relative Strength Index (RSI) currently hovers at 67. This figure, while below the overbought threshold of 70, suggests that gold is experiencing a bullish sentiment without veering into extreme territory. The Moving Average Convergence Divergence (MACD) stands at 0.82 against a signal of 5.65, further implying potential upward momentum.

Moreover, gold's price trajectory is above the 50-Day Exponential Moving Average (EMA) of $2,042, underscoring a short-term bullish trend. The chart analysis reveals a downward trendline breakout at the $2,044 mark, coupled with a triple top pattern breakout at the same level. These technical indicators collectively signal a strengthening bullish trend for gold.

In light of these observations, the overall outlook for gold remains bullish, especially if it sustains above the $2,045 threshold. In the short term, market participants can expect gold to test its immediate resistance levels. A successful breach of these barriers could pave the way for further gains, while a failure to do so may result in a pullback towards the lower support levels. Investors and traders should keep a close watch on these key levels for cues on gold's short-term directional bias.

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