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

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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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 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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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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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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The global market sentiment has continued its upward trend, gaining further traction on Friday as the S&P 500 bounced back from its recent dip. The Dow Jones Industrial Average surged, gaining 322.35 points, or 0.87%, reaching 37,404.35. Simultaneously, the Nasdaq Composite showed strength with a 1.26% increase to 14,963.87.

The S&P 500's positive movement was widespread, with over 450 names rising in the index. Micron Technology took the lead, jumping 8.6% after exceeding quarterly expectations and providing optimistic guidance for the current quarter. Salesforce also contributed to the Dow's gains, rising 2.7% following an upgrade from Morgan Stanley.

However, the market rebound comes after a brief downturn, where both the Dow and Nasdaq experienced their worst sessions since October, snapping nine-day winning streaks. The S&P 500 similarly posted its worst day since September.

Fed's Influence on S&P 500 and Global Interest Rate Trends

As mentioned earlier, the S&P 500 is bouncing back, thanks to hopes that the Federal Reserve might change its approach. Though the Fed has tried to cool expectations of speedy interest rate cuts in the next year, investors seem unconvinced. The CME Group's FedWatch Tool suggests a higher chance of a Fed rate cut by March 2024, with a predicted total of 150 basis points in cuts by year-end.

According to the latest info, the US economy grew by 4.9% in Q3, a bit less than the first estimate of 5.2%. Jobless claims went up to 205,000 but are still impressively low. The 10-year US Treasury bond yield is hanging around its lowest point since July. Meanwhile, the US Dollar is making a comeback. All these signs suggest a possible global trend of cutting interest rates, which could be good news for the S&P 500 and make things cozy for optimistic traders.

Global Monetary Policy Developments and Potential Impact on S&P 500

Furthermore, the recent drop in UK inflation, the lowest in two years, has sparked expectations that the Bank of England might cut rates in early 2024. Similarly, softer inflation data from the Eurozone indicates a potential for earlier rate cuts by the European Central Bank. Additionally, the US Core Personal Consumption Expenditure (PCE) Price Index could provide insights into the Federal Reserve's policy outlook. These developments suggest a global trend toward easing monetary policies.

Therefore, the potential rate cuts by major central banks, including the Bank of England and the European Central Bank, may positively impact the S&P 500 as investors anticipate favorable conditions for economic recovery and market growth.

S&P500 (SPX): Technical Analysis

On December 22, the S&P 500 Index exhibited a notable surge, rising by 1.03% to 4,746.76. This upward trajectory indicates a renewed vigor in the market, as the index surpasses its pivot point at $4,632. Looking ahead, the S&P 500 faces immediate resistance at $4,685, followed by further barriers at $4,772 and $4,826. On the downside, support levels are established at $4,545, $4,489, and $4,435, which will be crucial in the event of any retracement.

The technical indicators paint a complex picture for the S&P 500. The Relative Strength Index (RSI) stands at 65, hovering near the upper threshold of bullish sentiment but not yet indicating overbought conditions. This suggests that there is still some room for upward movement. However, the Moving Average Convergence Divergence (MACD) presents a contrasting scenario with a value of -2.87 against a signal of 45.17, hinting at potential bearish pressure.

Furthermore, the index's price action remains above the 50-Day Exponential Moving Average (EMA) of $4,731, typically a sign of a bullish short-term trend. Despite this, a bearish engulfing pattern observed on the daily timeframe, particularly below the $4,750 level, suggests a potential downtrend in the S&P 500.

Given these mixed signals, the overall outlook for the S&P 500 appears cautiously bearish, especially if it remains below the critical $4,775 level. In the short term, investors and traders should anticipate the index testing its immediate resistance levels. A successful breach of these could indicate a shift towards bullish momentum. Conversely, failure to overcome these levels might lead to a pullback towards lower support zones.

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The USD/JPY currency pair has struggled to stop its downward trajectory and continues to face selling pressure, hovering around the 143.00 level. However, this persistent decline can be attributed to a combination of factors, including a weakened US dollar, a more cautious risk sentiment in the market, and an upward adjustment of Japan's growth forecasts. These elements support the safe-haven appeal of the Japanese yen, contributing to the ongoing bearish trend in the USD/JPY pair.

Japanese Yen Strength Amidst Equities Weakness and BoJ's Ultra-Dovish Stance

It's important to highlight that the safe-haven Japanese Yen (JPY) is gaining strength due to a generally weaker tone in equity markets. This boost comes after the Japanese government increased its economic growth estimates. However, the Bank of Japan (BoJ) maintaining an ultra-dovish stance limits further JPY gains.

Meanwhile, the recent Wall Street slump also contributes to the USD/JPY pair facing pressure. Japan's Cabinet Office raised economic growth projections for fiscal 2023/24 to 1.6%, and for 2024/25 to 1.3%. Despite these positive signs, the BoJ's commitment to a loose monetary policy, which tend to undermine the JPY currency and may help the USD/JPY pair to limit its deeper losses.

Factors Influencing US Dollar Strength Amidst Federal Reserve Uncertainty and Positive Economic Data

Furthermore, the US Dollar is getting some support due to uncertainty about when the Federal Reserve will start easing, especially after positive US economic data on Wednesday. Despite talk from influential Fed officials downplaying a shift from their hawkish stance, the US Consumer Confidence Index saw a significant rise in December.

Surprisingly, Existing Home Sales in November went up by 0.8%, breaking a five-month decline trend. Investors are still anticipating a potential early interest rate cut in 2024, leading to lower US bond yields and limiting the strength of the Greenback. The focus now shifts to key economic indicators, including the final US Q3 GDP, Weekly Jobless Claims, and the Philly Fed Manufacturing Index.

Therefore, the uncertainty around the Federal Reserve's easing timeline and positive US economic data provide some support for the US Dollar. This, coupled with the potential for an early interest rate cut, may limit USD/JPY pair strength.

USD/JPY - Technical Analysis

The USD/JPY currency pair is presenting a subdued performance, recently dipping below the 143.00 psychological mark, and now trades at 142.939. This represents a modest retreat of 0.06% within a 24-hour window as observed in the 4-hour chart. Currently, the pair is grappling with a downward pressure that has nudged it beneath the 50-day Exponential Moving Average (EMA) pivot point of 143.827, potentially signaling a bearish shift in momentum.

Resistances lie overhead at 143.171 and a more pronounced one at 143.827, which coincides with the 50 EMA, followed by a stronger barrier at 144.936. To the downside, immediate support emerges at 141.009, with a further safety net at 138.977. The Relative Strength Index (RSI), a gauge of market sentiment, underscores this bearish inclination, registering at 44.69, below the neutral threshold of 50.

This technical configuration suggests the pair may be poised for further declines, with the current slip below the key EMA level reinforcing this outlook. Market participants are now closely monitoring these dynamics, with the potential for continued downward movement if bearish sentiment persists. Conversely, a recovery above the EMA could invalidate this bearish scenario, putting the aforementioned resistance levels back into play. In summary, the USD/JPY is at a technical crossroads, with its near-term trajectory hinging on its ability to either sustain below or recover above the 50-day EMA.

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Despite the bullish US dollar, the AUD/USD currency pair extended its upward trend, staying well bid around the 0.6732 level. The upward rally could be attributed to the RBA meeting minutes, which revealed that the central bank is considering further tightening amid encouraging signs of falling inflation. Traders appear cautious, refraining from placing strong bids as they await key economic indicators such as US weekly Jobless Claims, Q3 GDP, and the Philly Fed Manufacturing Survey.

Positive US Economic Indicators and Potential Impact on Currency Markets

It's worth noting that recently released US data, particularly on Wednesday, exceeded market expectations, signaling positive trends in the economic landscape. In November, US Existing Home Sales reached an annual rate of 3.82 million, surpassing the market consensus of 3.77 million. This marks a significant improvement in the housing market.

Moreover, in December, the Consumer Confidence Index from the Conference Board showed substantial growth, marking the most significant increase since early 2021. The index rose from 101.0 to 110.07, signaling a surge in consumer confidence. This positive shift suggests an optimistic outlook among consumers regarding economic conditions.

Hence, the positive US economic indicators have the potential to bolster the USD, which could, in turn, impact the AUD/USD. Traders might witness heightened demand for the USD as a result of improved economic sentiment.

RBA's Optimistic Stance and Potential Tightening: Impact on AUD/USD Pair and Factors Driving Uncertainty

Moreover, the Reserve Bank of Australia (RBA) has signaled a more positive stance in its recent minutes, leaning towards potential tightening. This shift is prompted by promising signs of decreasing inflationary pressures in the overall economy. The RBA, however, emphasizes that any decisions will hinge on incoming data and a careful evaluation of evolving risks. This cautious approach ensures a responsive strategy aligned with the dynamic economic landscape.

Therefore, the RBA's positive tone and potential tightening may initially bolster the AUD/USD pair. However, the impact will depend on future economic data and risk assessments, introducing an element of uncertainty for traders.

AUD/USD - Technical Analysis

The Australian Dollar has been on a steady incline against the US Dollar, with the AUD/USD pair recently trading at around 0.6752, a slight uptick of 0.09% as noted in the 4-hour chart. The currency duo has shown resilience, bouncing from a support level that had previously dipped to 0.65462, signaling a potential shift in momentum.

From a technical standpoint, the pair is buoyed by the 50-day Exponential Moving Average (EMA) at 0.66909, which has been instrumental in supporting the upward price movement. The Relative Strength Index (RSI), currently at 59.30, corroborates this bullish trend, suggesting that the pair has not yet reached overbought conditions and may have room to climb. Looking ahead, resistance levels at 0.67829 and 0.68251 await, with a more significant hurdle at 0.68996. Support, should the pair retreat, rests at 0.66806, with further support at 0.66180.

The current technical outlook for AUD/USD suggests a continuation of the bullish trend, underpinned by solid moving average support and a RSI that points to sustained upward potential. Investors and traders will be watching these resistance markers closely, as their breach could pave the way for further gains, while any pullback could test the resilience of underlying support levels.

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Gold price (XAU/USD) has maintained its upward trajectory, holding strength around the 2,034 level. However, this positive movement is attributed to dovish expectations from the Federal Reserve (Fed), which have placed USD bulls on the defensive and provided substantial support to the precious metal. Concurrently, a softer risk tone in the market has further bolstered the safe-haven appeal of XAU/USD, particularly in anticipation of upcoming US macro releases.

Moving ahead, the focus is fixed on the upcoming release of the US Core Personal Consumption Expenditure (PCE) Price Index scheduled for Friday. This economic indicator holds significant influence over the Fed's future policy decisions, subsequently shaping the short-term path for this non-yielding commodity. Investors are observing these developments as they navigate the dynamic landscape of gold trading.

Impact of Fed's Policy Outlook on Dollar and Gold Markets

It is worth noting that the sentiment is gaining ground, suggesting that the US central bank is poised to transition from its firm stance early next year. This anticipated shift is anticipated to have a pronounced impact on the US Dollar, with a concurrent positive effect on Gold prices. In the meantime, the ongoing market trends signal an increasing probability of the Federal Reserve implementing interest rate cuts, with expectations leaning towards a potential move around March 2024.

Moreover, the dovish outlook from the Federal Reserve is exerting downward pressure on the yield of the 10-year US government bond, driving it to its lowest point since July. This downturn is leaving US Dollar bulls in a defensive position. Notwithstanding various attempts by several Fed officials to downplay the notion of swift rate cuts, the Conference Board's US Consumer Confidence Index surged to a five-month high in December.

US existing home sales defied expectations by unexpectedly rising by 0.8% in November, breaking a five-month streak of declines. These unexpected positive indicators underscore the complex dynamics influencing the market, introducing additional nuances to the overall economic narrative.

US Stock Market Shift, GDP Figures, and Key Economic Indicators

It's worth noting the sudden shift in US stock markets overnight, favoring the safe-haven precious metal and supporting its rise. Traders are now eagerly awaiting the final US GDP numbers, expected to reveal a 5.2% annualized growth in the third quarter, showcasing the strength of the largest global economy. Thursday's economic schedule includes the release of Weekly Initial Jobless Claims data and the Philly Fed Manufacturing Index during the US session.

However, the spotlight remains on Friday's Core PCE Price Index, a key factor influencing the Fed's future rate decisions and likely to stir up volatility in the markets. Investors are closely monitoring these indicators for insights into the economic landscape and potential market movements.

GOLD (XAU/USD) - Technical Analysis

In the recent sessions, Gold's technical picture has presented a nuanced narrative, with the precious metal navigating a delicate balance between bullish momentum and the specter of a bearish reversal. Currently, Gold spot prices (XAU/USD) are trading just above $2,037, marking a slight ascent from the previous day's valuation.

The persistence of buyers is evident, yet their momentum is challenged by a notable resistance near the $2,044 level—a ceiling that has proven resilient on multiple occasions, forming a triple top pattern on the 4-hourly timeframe. This pattern is typically indicative of a potential downturn, suggesting that Gold's upside may be curtailed without significant buying pressure.

The market's ambivalence is further reflected in the Relative Strength Index (RSI), which at a value of 57.91, indicates a market neither overextended in its reach nor retreating in caution. Meanwhile, the positioning above the 50-day Exponential Moving Average (EMA), with a current value of $2,025.774, supports the short-term bullish trend. However, the EMA also underscores the need for vigilance as Gold teeters at this pivotal juncture.

With traders eyeing the immediate resistance point, a decisive break above could invalidate the bearish implications of the triple top and propel prices towards the next resistance levels at $2,065 and potentially $2,088.

Conversely, should the pattern hold, a retest of the immediate support around $2,018 and possibly lower supports could ensue. As the market stands at the crossroads, the anticipation builds for a directional breakout, casting the upcoming sessions in a critical light for those tracking the lustrous metal's trajectory.

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