Daily Price Outlook

The GBP/USD currency pair failed to stop its losing streak and remained well offered around 1.2530 level on Wednesday. The GBP/USD pair had a lot of ups and downs in the last session due to job numbers in the UK and inflation figures in the US. According to the UK Office for National Statistics, the Claimant Count Change for November increased to 16.0K from the previous figure of 8.9K but fell short of the expected 20.3K.

Additionally, the Employment Change for October decreased to 50K from the previous 54K. Therefore, the GBP/USD faced slight pressure as the UK's Claimant Count Change and Employment Change data miss expectations, indicating economic challenges.

UK Economic Indicators Signal Challenges for GBP, Eyes on GDP and BoE Decision

It is worth noting that the UK Office for National Statistics reported an increase in November's Claimant Count Change to 16.0K from the previous 8.9K, but it fell short of the expected 20.3K. Additionally, Employment Change for October dropped to 50K from 54K.

Looking ahead, investors await Wednesday's data, expecting a 0.1% decline in October's monthly Gross Domestic Product (GDP) and Industrial Production. On Thursday, the Bank of England (BoE) is anticipated to maintain interest rates at 5.25%, with a potentially hawkish tone.

These figures suggest potential economic challenges, impacting the GBP. Traders will closely watch the upcoming GDP and BoE decisions for further insights into the UK's economic health and the currency's future direction.

Anticipation of US Economic Indicators and Fed Decision Sparks GBP/USD Volatility

Furthermore, market investors are awaiting the US Producer Price Index (PPI) and the Federal Reserve's (Fed) Interest Rate Decision in the upcoming North American session. The US Dollar (USD) saw a minor dip and recovery following the release of moderate Consumer Price Index (CPI) data in the United States (US).

On Tuesday, the US Bureau of Labor Statistics reported a 0.1% monthly and 3.1% yearly increase in the US Consumer Price Index (CPI) for November, aligning with expectations. The Core CPI also rose by 0.3% monthly and 4.0% yearly, meeting projected levels.

The Federal Open Market Committee (FOMC) is anticipated to maintain its current policy stance in the December meeting. Investors will closely watch for insights from Federal Reserve (Fed) Chair Jerome Powell on potential interest rate changes in the upcoming year. This could impact the US Dollar's performance as traders assess future monetary policy directions.

Therefore, the GBP/USD pair will likely experience volatility as investors eagerly await the US PPI and Fed's Interest Rate Decision.

GBP/USD - Technical Analysis

The GBP/USD pair on December 13th exhibits a slight downward trend, currently positioned at 1.25513, marking a decline of 0.1%. As market participants analyze the currency's movement within the context of global economic developments, the technical outlook presents a nuanced perspective.

In the current trading landscape, the pair is navigating through crucial technical levels. The pivot point is established at $1.2458, serving as a foundation for potential directional shifts. The currency pair confronts immediate resistance at $1.2595, with further hurdles at $1.2682 and $1.2813. On the downside, immediate support looms at $1.2370, followed by stronger levels at $1.2240 and $1.2104.

The technical indicators contribute to this complex picture. The Relative Strength Index (RSI) stands at 44, indicating a bearish sentiment as it remains below the critical 50 threshold. Meanwhile, the Moving Average Convergence Divergence (MACD) reveals a value of 0.00022, contrasting with its signal line at -0.00101, suggesting a potential shift in momentum.

Notably, the 50-Day Exponential Moving Average (EMA) is currently at $1.2556, with the GBP/USD trading just below this mark. This positioning of the EMA is acting as a significant resistance level at $1.2575. The formation of Doji and spinning top candles under this EMA level indicates a selling bias, particularly as the market awaits the outcome of the Federal Open Market Committee (FOMC) meeting.

In conclusion, the GBP/USD pair presents a bearish trend below the $1.2575 resistance level. This sentiment is underpinned by the currency's current positioning relative to key technical indicators and patterns. Traders are likely to maintain a cautious approach, particularly in light of the impending FOMC decision, which could influence short-term market dynamics.

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Daily Price Outlook

Despite the German ZEW Indicator surpassing expectations at 12.8, the EUR/USD currency pair failed to halt its downward trend and dipped to the 1.0790 level during early European trading hours on Wednesday. However, the primary reason for this downward movement can be attributed to modest strength in the US Dollar. Meanwhile, traders appear cautious about taking strong positions as the Federal Reserve (Fed) and the European Central Bank (ECB) are set to announce their decisions on monetary policy on Wednesday and Thursday, respectively.

US Inflation Stability and Fed Rate Expectations Impacting EUR/USD Dynamics

It's worth noting that the recent US inflation report largely aligned with expectations. In November, the Consumer Price Index (CPI) edged up by 0.1% from October, with the yearly rate showing a slight easing to 3.1%. The Core CPI, which excludes volatile items, saw a monthly increase of 0.3% and an annual rise of 4.0%, consistent with predictions.

Looking ahead, the market expects the Federal Reserve to keep interest rates between 5.25% and 5.5% in December. There's an 80% chance of a rate cut in May, and the market predicts further cuts totaling a full percentage point by year-end, according to the CME FedWatch Tool.

The US inflation report meeting expectations brings stability. It might influence the EUR/USD pair, with the market anticipating the Federal Reserve to maintain rates, potentially impacting the pair's dynamics.

ECB's Rate Decision and Positive Economic Sentiment Boost Euro Against Dollar

Moreover, the European Central Bank (ECB) is likely to keep interest rates steady in its December meeting, despite eurozone inflation nearing the 2.0% target. The ECB aims to delay expectations of a rate cut, emphasizing potential upward price risks, especially from rising wages. ECB President Christine Lagarde stressed the need for clear evidence that tight labor markets won't trigger inflation.

In recent news, the German ZEW Economic Sentiment improved, coming in at 12.8 compared to the previous 9.8, exceeding the expected 8.8. However, the Current Situation Index dipped to -77.1 from -79.8, below the anticipated -75.5. The Eurozone ZEW Economic Sentiment also rose to 23.0 from 13.8, surpassing the estimated 12.0.

Therefore, the ECB's decision to maintain interest rates and the positive German ZEW Economic Sentiment will support the Euro (EUR) against the US Dollar, potentially influencing the EUR/USD pair positively.

EUR/USD - Technical Analysis

On December 13th, the EUR/USD pair is exhibiting a subtle downward movement, currently trading at 1.07863, marking a 0.08% decline. This movement reflects the pair's response to broader market dynamics and impending economic decisions.

In the current trading session, the EUR/USD pair is navigating a critical juncture defined by significant technical levels. The pivot point is identified at $1.0690, offering a baseline for potential shifts in the currency's trajectory. On the upper side, the pair faces immediate resistance at $1.0792, followed by higher barriers at $1.0861 and $1.0967. Conversely, should the pair succumb to bearish pressures, it will encounter support at $1.0623, with subsequent levels at $1.0521 and $1.0417.

The technical indicators provide a deeper insight into the pair's current state. The Relative Strength Index (RSI) is positioned at 50, indicating a neutral market sentiment neither leaning towards overbought nor oversold conditions. The Moving Average Convergence Divergence (MACD) shows a value of 0.00063, slightly above its signal line at -0.00045, suggesting a potential, albeit uncertain, upward momentum.

Notably, the 50-Day Exponential Moving Average (EMA) at $1.0783 is acting as a significant resistance level. The presence of Doji and spinning top candles just under this EMA level hints at a selling bias among traders, especially as the market anticipates the Federal Open Market Committee (FOMC) meeting's outcome.

In conclusion, while the EUR/USD pair demonstrates a bearish tendency below the $1.0783 mark, the overall trend is somewhat indecisive. Traders and investors are likely to maintain a cautious stance, waiting for clearer signals from the upcoming FOMC decision, which could significantly influence the pair's short-term direction.

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Daily Price Outlook

The AUD/USD currency pair maintained its upward trend and has shown strength. However, this positive momentum can be attributed to the hawkish sentiment expressed by RBA Governor Michele Bullock. In her recent statements, Australia's chief policymaker, Bullock, emphasized the Reserve Bank of Australia's commitment to fostering a resilient labor market in the country. This stance has provided an additional boost to the AUD/USD pair.

Investors are closely monitoring the forthcoming release of the US Consumer Price Index (CPI) figures for November, scheduled for Tuesday, as they could significantly impact the trajectory of the pair. Market expectations indicate a potential easing of the annual US Consumer Price Index (CPI) to 3.1%, down slightly from the previous 3.2%, accompanied by a projected 0.1% increase in the monthly inflation figure. The US Core CPI is anticipated to maintain its stability at 4.0%. These figures are expected to play a pivotal role in shaping investor sentiment.

Consumer Confidence, RBA Decision, and China's Impact on the Australian Dollar

On the Australian front, the ANZ-Roy Morgan Australian Consumer Confidence weekly survey rose to 80.8, indicating increased optimism. Additionally, Westpac Consumer Confidence for December improved by 2.7% from the previous decline of 2.6%, reflecting a positive economic outlook.

Meanwhile, the Reserve Bank of Australia (RBA) recently left interest rates unchanged at the final meeting for the year. Governor Michele Bullock expressed confidence, emphasizing a cautious approach and the RBA's commitment to maintaining employment gains.

Moreover, China has recently removed restrictions on meat imports from Australia, a development that could potentially enhance overall sentiment. However, worries regarding deflationary pressures in China have triggered a selling trend for the Australian Dollar.

US Dollar Strength and FOMC Meeting:

In contrast to this, the US Dollar Index is holding its strength, buoyed by resilient US Treasury yields and robust employment figures in the United States. This strength in the Greenback is exerting downward pressure on the AUD/USD pair. A stronger US Dollar typically diminishes investor appetites and serves as a headwind for the pair.

The Federal Open Market Committee (FOMC) begins its two-day monetary policy meeting on Tuesday. While expectations lean towards no change in interest rates, investors will closely analyze the statement for signals about potential rate adjustments in the coming year.

AUD/USD - Technical Analysis

The AUD/USD pair, as of December 12, exhibits a notable upturn in the Forex market. Currently priced at 0.65902, the pair has experienced a 0.35% rise within a 24-hour period. Analyzing the 4-hour chart provides a clearer perspective on its short-term movements.

In terms of key price levels, the immediate resistance for the AUD/USD pair is at 0.6503. Surpassing this level could pave the way to the next resistance at 0.6599, followed by a further potential ceiling at 0.6668. On the flip side, support levels are observed at 0.6763, 0.6434, and 0.6340. These levels are crucial as they will dictate the pair's ability to maintain its current momentum or face a potential retracement.

From a technical standpoint, the Relative Strength Index (RSI) stands at 53, indicating a slightly bullish sentiment in the market. This level suggests that the currency pair is neither overbought nor oversold, but leans towards a bullish bias. The Moving Average Convergence Divergence (MACD) shows a value of 0.00014 with a signal line at -0.00055. The MACD line's position above the signal line hints at a potential upward momentum for the AUD/USD pair, supporting the bullish sentiment indicated by the RSI.

The 50-Day Exponential Moving Average (EMA) for the pair is currently at 0.6574. Given that the pair's price is hovering above the 50 EMA, it signifies a short-term bullish trend. Furthermore, the chart reveals an upward trendline providing support around 0.6550. A consistent close above this level could trigger further buying interest in the Australian Dollar.

In conclusion, the overall trend for the AUD/USD pair appears bullish, particularly if it maintains above the 0.6550 level. In the short term, we can expect the pair to potentially test higher resistance levels, particularly 0.6599, if the bullish momentum persists.

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During the European session on Tuesday, the USD/CAD currency pair is failed to stop its three-day losing streak and remained well offered around 1.3560 mark. However, this decline could be associated with the bearish US dollar. The US Dollar Index (DXY) turns negative following two days of gains. Additionally, crude oil prices are holding steady after a three-day winning streak. This stability could be supportive for the Canadian Dollar (CAD) and contributes to the declines in the USD/CAD pair. However, the positive sentiment in WTI prices is driven by confidence in the resilience of the US economy.

WTI Trades Bullish Amid Economic Resilience and Lingering Challenges

It is worth noting that West Texas Intermediate (WTI) is trading around $71.70 per barrel on Tuesday. The recent uptick in oil prices comes after last week's data release, indicating a certain resilience in the United States (US) economy.

However, there are potential challenges for crude oil prices including ongoing concerns about global demand, especially with weaker economic data from China, the world's largest oil importer, and other major economies, which could affect prices. In the meantime, worries persist about oversupply, despite efforts by OPEC+ members to cut production. These factors might put pressure on oil prices in the near term and may help the USD/CAD pair to limit its deeper losses.

USD Index Declines, FOMC Meeting Underway, and BoC Governor's Address Awaited

The US Dollar Index (DXY) is going down and staying below 104.00. This is happening despite stable US Treasury yields. The dollar got a temporary boost from good job numbers in the US. The Federal Open Market Committee (FOMC) is starting a two-day meeting on Tuesday. Most people expect that interest rates will remain unchanged. Investors will pay close attention to the FOMC statement for hints about possible rate changes next year.

Looking at Canada, it's important to note that Bank of Canada (BoC) Governor Tiff Macklem is scheduled to speak on Friday. People in the market will be paying close attention, hoping to gain insights or comments about how the Canadian economy is doing and any potential changes in monetary policy.

USD/CAD - Technical Analysis

As of December 12, the USD/CAD currency pair is exhibiting a minor downward trend in the Forex market, currently trading at 1.35585, a decrease of 0.12%. Analyzing the 4-hour chart provides a nuanced view of its short-term movements and potential pivot points.

In terms of key price levels, the USD/CAD pair faces immediate resistance at 1.3561. Overcoming this level could lead the pair to test further resistance at 1.3644 and potentially at 1.3701. Conversely, support levels are observed at 1.3781, 1.3504, and 1.3421. These levels will be critical in determining whether the pair can sustain its current momentum or if a reversal is imminent.

From a technical perspective, the Relative Strength Index (RSI) stands at 41, indicating a bearish sentiment in the market. This level suggests that the pair is neither in the overbought nor the oversold territory but leans towards a bearish inclination. The Moving Average Convergence Divergence (MACD) shows a value of -0.0004 with a signal line at 0.00014. The MACD line's position below the signal line hints at potential downward momentum for the USD/CAD pair, reinforcing the bearish sentiment indicated by the RSI.

The 50-Day Exponential Moving Average (EMA) for the pair is currently at 1.3576. Given that the pair's price is hovering below the 50 EMA, it signifies a short-term bearish trend. Furthermore, the chart reveals a downward channel keeping the USD/CAD pair bearish, especially below the 1.3570 support zone. A consistent close below this level could trigger further selling interest in the Canadian Dollar.

In conclusion, the overall trend for the USD/CAD pair appears bearish, particularly if it maintains below the critical 1.3570 level.

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Gold price (XAU/USD) managed to stop its downward trend and regained some positive traction around the $1,976 level on Tuesday. However, this positive movement was supported by geopolitical risks and a slight decline in the US dollar. Meanwhile, the uncertainty surrounding the timing of potential Fed rate cuts is providing additional boost to the gold price. Hence, the focus will remain glued to the FOMC policy decision, scheduled to be announced on Wednesday.

Fed Policy Impact on USD, Gold, and Investor Sentiment

It's worth noting that investors are awaiting the Federal Reserve's monetary policy statement, particularly the "dot plot," and comments from Fed Chair Jerome Powell. This will impact the US Dollar and play a role in shaping the future of Gold prices.

Despite upbeat US employment figures suggesting delayed interest-rate cuts, a New York Fed survey indicates a decrease in consumer inflation expectations. This has led to hopes that inflation will ease without causing a recession, causing investors to rethink their expectations for a Fed rate cut in March 2024.

However, market participants still anticipate potential rate cuts in early 2024, with a 40% chance in March and almost 75% in May, according to CME Group's FedWatch Tool. This uncertainty supports Gold prices, with attention now turning to the upcoming US consumer inflation data and the FOMC meeting results.

Geopolitical Tensions and Missile Launch by Houthi Rebels in Yemen Propel Gold's Safe-Haven Appeal

Moreover, a US defense official reported on Tuesday that Houthi rebels in Yemen, backed by Iran, fired a land-based cruise missile. This development is seen as giving a boost to the safe-haven appeal of Gold. Therefore, the ongoing geopolitical tensions further contribute to Gold's safe-haven status, sustaining a modest upward movement in its price throughout the day.

GOLD (XAU/USD) - Technical Analysis

In the recent analysis of the Gold market as of December 12, the asset displays a modest upward trend, with its price currently at $1,986, reflecting a 0.2% increase over the past 24 hours. This subtle yet notable movement points to a potential shift in market sentiment, as observed in the 4-hour chart timeframe. The immediate resistance for Gold is identified at $1,897, a crucial juncture for bulls to overcome to sustain the upward momentum. Further resistance levels are marked at $1,953 and $2,051, each representing significant hurdles for a bullish continuation.

On the support side, the immediate level is observed at $2,105, providing a safety net against any potential bearish reversal. The subsequent support levels at $1,796 and $1,694 will play pivotal roles in underpinning Gold’s value in the event of a downturn. These levels are crucial for traders to monitor, as they will likely influence the asset's short-term trajectory.

From a technical standpoint, the Relative Strength Index (RSI) stands at 33, indicating that Gold is nearing oversold territory. This suggests a possible inflection point where the market may witness a reversal, especially if this trend persists. The Moving Average Convergence Divergence (MACD) values, with a MACD line at -2.841 and a signal line at -13.005, hint at a weakening bearish momentum. This could potentially pave the way for a bullish reversal in the near future. Moreover, the current value of the 50-Day Exponential Moving Average (EMA) at $1,991, being below Gold's price, signifies a short-term bearish trend, but also indicates room for an upward correction.

The observed chart patterns, particularly the formation of Doji candles around the $1,976 support level, suggest chances of a bullish correction. This pattern implies that maintaining above this support level could signal the beginning of a bullish reversal for Gold.

In conclusion, the overall trend for Gold appears bullish, especially if it sustains above the critical $1,975 level. Looking forward, the asset is likely to test higher resistance levels, particularly if it remains above this key support.

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Despite the bullish trend in the US dollar, the EUR/USD currency pair started the new week on a positive note and maintained its position above the 1.0770 level. However, the reason for its upward momentum could be attributed to the announcement of the European Central Bank (ECB) keeping interest rates unchanged until inflation returns to the target level. It should be noted that the market had anticipated the ECB's decision to maintain rates at their current level until inflation meets the target.

On the other hand, the bullish trend of the US Dollar in response to stronger-than-expected US employment data was seen as a key factor that capped further gains in the EUR/USD pair.

Stable German Inflation and ECB Rate Expectations Impacting EUR/USD Outlook

It's important to highlight that the German inflation data, as gauged by the Harmonized Index of Consumer Prices (HICP), stood at 2.3%, in line with market forecasts. As in result, the European Central Bank (ECB) decided to keep interest rates steady until inflation gets back on track.

Market analysts anticipate the possibility of the ECB implementing interest rate cuts in March 2024. But, the general belief is that the ECB will keep rates as they are until inflation meets the target.

Hence, the prospect of the ECB maintaining interest rates until March 2024 will foster a consistent environment, potentially influencing a stable performance for the EUR/USD pair.

US Labor Market Boosts Sentiment, Eyes on CPI and Central Bank Meetings

Moreover, the US labor market showed improvement in November, surpassing expectations with 199K new jobs, a drop in unemployment from 3.9% to 3.7%, and steady average hourly earnings at 4.0% YoY. This positive data led to a notable rise in Treasury bond yields as investors speculated that the Federal Reserve might postpone rate cuts in 2024.

Therefore, the bullish trend in the US Dollar was seen as a key factor that restrained additional gains in the EUR/USD pair.

Looking ahead, the focus is on the Federal Open Market Committee (FOMC) and ECB meetings this week. Before these key events, market watchers will pay attention to the US Consumer Price Index (CPI) on Tuesday.

EUR/USD - Technical Analysis

In the currency markets, the EUR/USD pair has displayed a modest uptick, nudging slightly upward by 0.01% to trade at 1.07628. Despite this fractional increase, the pair's movement suggests a tentativeness among traders, highlighting the market's current cautious sentiment. The pair sits just above a pivotal point at $1.0695, attempting to sustain momentum and breach immediate resistance levels at $1.0791 and potentially challenge further ceilings at $1.0860 and $1.0962.

Underneath the current price, there's a buffer zone extending to supports at $1.0619, $1.0523, and $1.0418, which are ready to act as soft landings should there be a pullback. From a technical standpoint, the Relative Strength Index (RSI) hovers at 38, signaling that the pair is neither oversold nor overbought, yet teeters closer to the territory where buyers may find value.

The Moving Average Convergence Divergence (MACD) indicator presents a microscopic positive value at 0.00022, contrasting with its signal line at -0.00221, suggesting the potential for an upward trend has not yet gained conviction among investors. Concurrently, the 50-day Exponential Moving Average (EMA) at $1.0769 serves as a critical juncture; the pair's trading above this level could indicate a short-term bullish trend, while a consistent position below could confirm bearish inclinations.

The technical analysis is further enriched by the observation of an upward channel breakout at 1.0805, signaling a shift towards a downtrend, a pattern that traders will monitor closely for confirmation.

Conclusively, the EUR/USD pair's short-term outlook is delicately balanced, with a lean towards bearishness below the $1.0769 threshold. Market participants are poised for a potential test of upper resistance levels, but not without considering the broader economic context that could influence the currency's path in the coming days.

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Daily Price Outlook

Gold price (XAU/USD) failed to stop its downward rally and hit a two-week low on Friday. However, this decline was driven by the release of employment data from the United States, which exceeded expectations. Notably, the highly anticipated US jobs report showed overall strength and indicated a resilient economy.

Consequently, investors adjusted their expectations for a 25 basis points (bps) interest rate cut by the Federal Reserve (Fed) in March 2024. This shift led to an increase in US Treasury bond yields and the US Dollar (USD), exerting downward pressure on the gold price.

Although, the declines in the gold price could be short-lived as the geopolitical risks remain on the table. Meanwhile, traders seem hesitate to place any strong bets ahead of this week's key data and central bank event risks. In the meantime, the US consumer inflation figures are due on Tuesday, which will be followed by the crucial FOMC decision on Wednesday. Moreover, the Swiss National Bank (SNB), the Bank of England (BoE), and the European Central Bank (ECB) are all set to announce policy updates on Thursday.

Upbeat US Job Data Spurs Treasury Yield Rebound and Dollar Strength

It is worth noting that the 10-year US Treasury yield bounced back from a three-month low. This happened because of positive US job data, boosting the US Dollar and putting pressure on Gold prices.

It should be noted that the US Non-Farm Payrolls (NFP) report revealed that the economy added 199,000 new jobs in November, surpassing expectations of 180,000 and exceeding the previous month's 150,000 rise. Meanwhile, the Unemployment Rate also dropped from 3.9% to 3.7%, despite more people entering the job market.

Therefore, this data indicates a strong job market, leading traders to speculate that the Federal Reserve might not cut interest rates until May 2024.

Geopolitical Tensions Boost Gold Prices Amidst Middle East Escalation

Furthermore, US troops faced more attacks from Iran-backed militias in Iraq and Syria due to their support for Israel amid the ongoing conflict in Gaza. Meanwhile, the US embassy in Baghdad was shelled after an earlier rocket attack involving 14 rockets, raising concerns about a potential escalation in the Middle East.

Hence, the heightened geopolitical tensions, marked by attacks on US troops and the embassy, increased uncertainty, prompting investors to seek safe-haven assets like gold, likely leading to a rise in its price.

Looking forward, traders are now keeping a close eye on this week's US consumer inflation data and the Federal Reserve's interest rate projections. However, the upcoming week is also busy with monetary policy meetings from the Swiss National Bank (SNB), the Bank of England (BoE), and the European Central Bank (ECB) scheduled for Thursday.

GOLD (XAU/USD) - Technical Analysis

Gold's market trajectory has recently seen a shift, with prices retracting to a near $1,998 per ounce, indicating a potential easing of the bullish fervor that characterized the previous sessions. The delicate balance of market forces is reflected in the 4-hour chart where the precious metal teeters around a significant threshold, suggesting a state of indecision among traders.

The immediate pivot point stands at $2,000, a psychological barrier that gold prices are struggling to reclaim. Overhead, resistance levels at $2,024.58 and $2,039.12 loom large, signifying potential headwinds that may stall an ascent. Conversely, support levels at $1,967.78 and $1,944.67 present a foundation that could arrest any further decline.

Within this technical framework, the Relative Strength Index (RSI) presents a neutral reading at 50, indicating a market equilibrium where buyer and seller momentum are in a standoff. Compounding this is the Moving Average Convergence Divergence (MACD) which, residing at -3.133, signals a bearish divergence as it trails below the signal line at -8.030, hinting at possible downward price action ahead.

The market's sentiment hinges on the 50-day Exponential Moving Average (EMA) at $2,024.58, which currently acts as a ceiling capping gold's upward movement. A persistent trade below this average could potentially confirm a shift towards a bearish trend.

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During the Asian session on Monday, the GBP/USD currency pair maintained its upward rally, holding a strong position around 1.2551 level. Despite the ongoing strength of the US dollar, the GBP/USD pair showed strong recovery and gained its lost ground. However, this could be attributed to market expectations that the Bank of England (BoE) is poised to maintain borrowing costs at a 15-year high during its upcoming December meeting scheduled for Thursday. Hence, the probability of the BoE sustaining a 15-year high borrowing cost in December could bolster the GBP/USD pair.

Moving on, traders are now anticipating key events from both the FOMC and BoE meetings scheduled for this week. These impending events have the potential to induce market volatility.

Bank of England's Cautious Stance and Market Impact Ahead of December Meeting

It's worth noting that the Bank of England (BoE) is expected to maintain its borrowing costs at a 15-year high during its December meeting this Thursday. BoE governor Andrew Bailey highlighted last month that it's too early to consider rate cuts. Despite a dip in the Consumer Price Index from 6.7% in September to 4.6% in October, Bailey warned against complacency on inflation. Thus, the upcoming decision suggests the BoE's cautious approach, possibly impacting the market.

Investors will be closely monitoring any signals regarding the economic outlook and interest rates, factors that could influence the GBP/USD pair in the financial landscape.

Impact of Strong US Nonfarm Payrolls on GBP/USD Pair and Market Expectations

Furthermore, the US Nonfarm Payrolls outperformed expectations in November, with 199,000 new jobs added, beating October's 150,000 additions. The Unemployment Rate also dropped to 3.7% from 3.9%, while Average Hourly Earnings held steady at a 4.0% year-on-year rate. Federal Reserve Chair Jerome Powell recently cautioned that it's still too early to confidently say they've controlled inflation.

Powell said they are ready to make policies stricter if necessary. But, because of the good economic signs in the strong Nonfarm Payrolls report, investors think the Fed might delay rate cuts in 2024. This expectation could affect how the market behaves in the next few months.

Therefore, the robust US job report is likely to strengthen the US dollar, potentially influencing the GBP/USD pair as investors reevaluate their expectations for rate cuts.

GBP/USD - Technical Analysis

The British Pound (GBP) has witnessed a slight retreat against the US Dollar (USD), with a 0.10% downtick to the 1.25367 mark, underscoring a cautious sentiment in the market. The currency pair had previously demonstrated resilience, but the current dip suggests a pause in the bullish momentum that characterized the past trading sessions.

GBP/USD now hovers just below the pivot point of $1.2371, with the currency facing immediate resistance at $1.2458. A breach above could see it challenge the subsequent ceilings at $1.2592 and $1.2684. However, the pair is cushioned by support levels at $1.2236, with further downside protection at $1.2102 and $1.1972, which may offer buy-on-dips opportunities.

The Relative Strength Index (RSI) lingers at 33, teetering on the edge of oversold territory, which may signal an impending reversal or a consolidation phase. The Moving Average Convergence Divergence (MACD) hovers at -0.00025, slightly below the signal line at -0.00207, indicating a bearish sentiment that could suggest further pullbacks.

The 50-Day Exponential Moving Average (EMA) currently at $1.2556 serves as a key benchmark. The GBP/USD's position below this moving average is indicative of a potential short-term bearish trend, requiring close observation for a confirmed direction.

An upward channel breakout point at $1.2600 was identified, suggesting a shift towards a downtrend. Should the price remain below this key level, it could confirm the bearish outlook.

In conclusion, while the short-term trend for GBP/USD appears bearish below the $1.2565 threshold, the currency pair is at a critical juncture. Market participants may anticipate a test of resistance levels if the Pound gains momentum or a reinforcement of support levels should the current bearish pressure persist.

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During the early European session on Friday, the EUR/USD currency pair failed to halt its downward trend and lingered below the 1.0800 mark. Despite this, the Eurozone's prospects remain gloomy, and the markets anticipate the European Central Bank (ECB) to initiate interest rate cuts earlier than previously thought. The first move is now expected as soon as March 2024, putting pressure on the Euro (EUR).

Eurozone Economic Slowdown and ECB Rate Cut Speculations

It's worth noting that the Eurozone economy unexpectedly slowed in Q3 2023. The Gross Domestic Product (GDP) reported 0% YoY, worse than the expected 0.1%. On a quarterly basis, the growth contracted by 0.1%, meeting market forecasts. Last month, ECB board member Isabel Schnabel suggested rate hikes if inflation didn't hit the 2% target quickly. However, she shifted her stance after three low inflation readings. Now, markets are strongly betting on the ECB cutting interest rates earlier than expected, possibly as soon as March 2024. This shift is influenced by the recent economic slowdown and concerns about inflation staying below the target.

Therefore, the unexpected Eurozone economic slowdown and the probability of earlier ECB rate cuts have pressured the Euro. This has led to a decline in the EUR/USD pair as markets react to concerns about economic performance and monetary policy divergence.

US Labor Data and Employment Outlook

On the other side, data from the US Labor Department on Thursday showed that the number of Americans filing for unemployment benefits increased to 220K for the week ending December 1, slightly below the expected 222K. However, the ongoing unemployment claims dropped to 1.861 million from 1.925 million, beating the expected 1.919 million.

Therefore, the mixed US labor data may weaken the USD, providing a potential boost to the EUR/USD pair amid economic uncertainty.

Looking Ahead: Market Focus on US Employment Report

Looking ahead, investors are keeping a close eyes on the upcoming US employment report on Friday. Key indicators include Nonfarm Payrolls (NFP), Unemployment Rate, Average Hourly Earnings, and the University of Michigan’s Consumer Sentiment Index.

EUR/USD - Technical Analysis

In the current trading climate, the EUR/USD pair is showcasing a cautious stance, with a marginal downtick of 0.01%, stabilizing around the 1.07909 mark. This slight retraction reflects the pair's uncertainty ahead of key economic indicators that may sway the European currency’s valuation. The forex market, sensitive to such economic tides, is waiting for substantial triggers to define a clear direction.

The pair’s technical landscape is defined by a pivot point at $1.0727, which acts as a fulcrum for the currency's potential swings. Resistance levels are staged at $1.0801, $1.0910, and $1.0991, each representing a hurdle that could cap upward advances. Conversely, support levels at $1.0618, $1.0509, and $1.0397 provide a cushion against any downward pressures.

The Relative Strength Index (RSI) reads at 41, suggesting a lack of momentum in either direction, while the MACD’s slight positive divergence from its signal line may indicate an undercurrent of bullish sentiment. However, the current price hovers around the 50 EMA of $1.0791, depicting a market in equilibrium without a distinct bullish or bearish bias.

The technical setup hints at an upward channel breakout, which could signal a shift in momentum should the pair consolidate above the crucial $1.07924 level.

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The global market sentiment has recently shifted towards a positive trajectory following a brief downturn. However, this upswing can be attributed to gains in the technology sector and heightened anticipation surrounding the upcoming jobs report, which is poised to significantly influence market expectations in the near future.

It is worth noting that the S&P 500 rose by 0.80% to 4,585.59, and the Dow added 62.95 points, or 0.17%, reaching 36,117.38. The Nasdaq Composite led the way with a 1.37% gain, closing at 14,339.99, driven by a robust performance from technology stocks. Throughout the week, the Nasdaq has consistently outperformed, posting a 0.2% gain, while the Dow and S&P 500 are expected to conclude the week slightly lower by around 0.4% and 0.2%, respectively.

Market Concerns Amidst Mixed Job Market Data

However, this upward momentum follows concerns about a potential slowdown in the late 2023 rally, as the Dow and S&P 500 experienced their first three-day negative streaks since October. Investor attention this week has been centered on the job market amid mixed data releases. Thursday's weekly jobless claims, which came in below economist expectations, and a decline in continuing jobless claims provided some relief.

Private payrolls data released on Wednesday showed fewer job additions than anticipated, and October's job openings reached their lowest point since March 2021. The anticipation for Friday's official jobs report has intensified, with economists expecting the addition of 190,000 jobs in November. Investors are closely monitoring for signs of a slowing labor market, which would align with the Federal Reserve's decision to pause interest rate hikes.

Therefore, the disappointing job data and low job openings in October, combined with the heightened anticipation for the official jobs report, are impacting global market sentiment as investors closely watch for signs of a potential slowdown in the labor market, aligning with the Federal Reserve's cautious approach on interest rate hikes.

 S&P500 (SPX) - Technical Analysis

The S&P 500 remains a barometer for investor sentiment and economic expectations. On December 8th, the index exhibited a minor uptick in value, nudging up by a mere 0.05% to anchor at 4585.58. The market’s subtle shift in momentum is reflected in the chart's resistance levels, which lie at $4606 and extend upwards to $4694, with the ultimate test being the $4765 mark.

The index’s pivot point, the threshold between bullish and bearish sentiment, stands firm at $4585. Key support levels are drawn at $4491, $4425, and the more distant $4351, ready to offer a safety net should the index falter.

Technical indicators provide mixed signals. The Relative Strength Index (RSI) hovers around 65, indicating a market that is neither overextended nor retreating, suggesting a potential for further gains without immediate concern for a reversal.

Importantly, the 50-day Exponential Moving Average (EMA), not specified but typically a gauge for trend direction, could further inform the short-term market trajectory.

Market patterns reveal a range-bound behavior, with a clear resistance ceiling in sight. The implication here is that the S&P 500 is testing the waters, potentially gearing up for a decisive movement that could set the tone for the year-end market performance.

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