Daily Price Outlook

Despite the bearish trend in the US dollar, the GBP/USD currency pair continued its downward trajectory, reaching around 1.2720 on Wednesday. However, this decline can be attributed to the cautious sentiment prevailing ahead of a series of economic data releases from the United Kingdom (UK) on the same day. Notably, the UK Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Price Index for November are all set to be unveiled.

It should be noted that the monthly consumer inflation is anticipated to grow by 0.01%, a slight increase from the flat 0.0% recorded previously. However, the year-on-year report may indicate a moderation, with an expected ease to 4.4% compared to the previous reading of 4.6%.

BoE Policy and Rate Cut Anticipation Impact on GBP/USD Pair

It's worth noting that the Bank of England (BoE) recently decided to keep the policy rate steady at 5.25%, its highest in 15 years, during the December meeting. Despite a gloomy economic outlook and more relaxed job market conditions, market experts anticipate four upcoming rate cuts, beginning in June 2024. This expected path suggests a potential drop in the key rate from 5.25% to around 4.25% by the end of the next year.

Deputy Governor Sarah Breeden emphasized the importance of maintaining restrictive policy levels to control inflation pressures. She mentioned that while these aren't predictions, a high inflation scenario would be more costly. This aligns with Governor Andrew Bailey's stance on the need to keep policy restrictive.

Looking ahead, the UK is set to release Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Price Index for November. The monthly consumer inflation is expected to grow slightly, but the year-on-year report might show a decrease from the previous reading of 4.6% to 4.4%.

Therefore, the BoE's decision to maintain a high policy rate and the anticipation of future cuts may weigh on the GBP/USD pair.

US Dollar Recovery and Housing Data Impact on GBP/USD Pair

Moreover, the US Dollar Index (DXY) experienced a decline but is currently trading higher around 102.20 as it is making an effort to recover from recent losses amid a more cautious stance from the US Federal Reserve (Fed). The Fed's signals suggest a potential easing of monetary policy in early 2024.

On the economic front, US Housing Starts performed better than expected at 1.56 million, beating the consensus of 1.36 million. However, Building Permits dipped slightly to 1.46 million, just below the forecast of 1.47 million. Investors are keeping an eye on Wednesday's data, including Existing Home Sales Change and the CB Consumer Confidence survey.

Therefore, the US Dollar's recovery will likely pose downward pressure on the GBP/USD pair, impacting its strength. Meanwhile, the positive US housing data could provide support for the Dollar, potentially leading to a weaker GBP/USD pair.

GBP/USD - Technical Analysis

The GBP/USD pair on December 20 is illustrating the intricate dance between the British pound and the US dollar in the forex market. Currently, it stands at 1.27202, experiencing a slight decrease of 0.09%. This movement places the pair slightly above a significant pivot point at 1.2523. The pair faces immediate resistance at 1.2657, with subsequent levels at 1.2820 and 1.2954. On the flip side, support is found at 1.2359, followed by 1.2225 and 1.2086.

In the realm of technical indicators, the Relative Strength Index (RSI) is positioned at 58, indicating a moderately bullish sentiment, yet far from the overbought threshold. The Moving Average Convergence Divergence (MACD) shows a subtle positive value of 0.000080 against a signal of 0.002090, suggesting a potential for upward momentum, although the movement is not pronounced.

The 50-Day Exponential Moving Average (EMA) at 1.2710 is a crucial indicator, as the current price hovers around this mark. This positioning hints at a short-term bullish trend. From a chart pattern perspective, the GBP/USD pair appears to be maintaining a bullish stance above the 1.2710 level.

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Daily Price Outlook

Despite the Federal Reserve's (Fed) dovish stance, the Gold price (XAU/USD) failed to maintain its upward rally and lost some of its traction, hovering within a narrow trading range near the weekly high. However, the reason for its downward trend can be attributed to the modest US Dollar uptick and a risk-on sentiment across the global equity markets.

The Federal Reserve recently signaled that they are not planning to raise interest rates soon to fight inflation. This has kept the yields on US Treasury bonds low, which is good for gold prices. However, some Fed officials are saying that interest rates might not stay low for long. On the other hand, the US Dollar is slightly gaining value, and global stock markets are doing well. Therefore, this limits the rise in the price of gold, which is considered a safe investment.

Fed's Shifting Stance and its Impact on Gold Prices

It's worth noting that there is a growing belief that the Federal Reserve (Fed) will shift away from its strict approach early next year, and this is helping boost the price of Gold. Chicago Fed President Austan Goolsbee emphasized that the central bank isn't committing to lowering interest rates soon and shouldn't be pressured by market expectations.

Cleveland Fed President Loretta Mester pointed out that the financial markets might be getting ahead of themselves in predicting when interest rates will be cut next year. Despite this, the markets have already factored in a 60% chance of rate cuts starting in March 2024, totaling 140 basis points in reductions for the year. The yield on the 10-year US government bond remains below 4%, and the US Dollar is just above a recent low.

Therefore, the expectation of the Federal Reserve easing its strict stance has boosted gold prices. Market anticipation of rate cuts in 2024, coupled with a lower US Dollar and bond yields, contributes to gold's positive momentum.

Market Dynamics Impacting Gold Prices and Future Focus

Moreover, the risk-on sentiment in the market was seen as another key factor that cap further gains in the gold price. However, this risk-on trend is fueled by expectations of lower interest rates in the US, heightened stimulus efforts from China, and a more accommodative approach from the Bank of Japan. These factors limit the appeal of safe-haven assets like gold.

Moving ahead, traders are now keeping an eye on the US Consumer Confidence Index for potential market moves this Wednesday. However, the primary focus remains on Friday's release of the US PCE Price Index, which is expected to have a significant impact on market sentiment.

GOLD (XAU/USD) - Technical Analysis

As of December 20, the gold market presents a nuanced picture. The precious metal is trading at $2,040, marking a slight increase of 0.01%. This movement positions gold above its pivot point of $1,980, indicating a potential shift in market dynamics. Key resistance levels are set at $2,015, $2,054, and $2,089, while support levels are found at $1,939, $1,904, and $1,870.

The technical indicators offer a deeper insight into gold’s trajectory. The Relative Strength Index (RSI) stands at 62, suggesting a bullish sentiment but not in the overbought territory. This indicates room for further upward movement. The Moving Average Convergence Divergence (MACD) presents a value of 0.655 against a signal of 5.63, further pointing towards potential bullish momentum.

Notably, the 50-Day Exponential Moving Average (EMA) is at $2,034, with the current price slightly above this level, reinforcing a bullish outlook in the short term. The observed double-top pattern at the resistance of $2,042 is a critical point. A breakout above this level could propel gold towards $2,060 and potentially $2,085, signaling a robust upward trajectory.

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Daily Price Outlook

Despite the bearish bias of the US dollar, the EUR/USD currency pair was unable to break its previous-day losing streak. It experienced mild losses and continues to be held below the 1.1000 mark during the early European trading hours on Wednesday. However, the downward trend can be attributed to the downbeat Eurozone data. The Eurozone Harmonized Index of Consumer Prices (HICP) for November reported a -0.6% month-on-month (MoM) figure, compared to the previous -0.5%. This result was weaker than expected, raising concerns about economic health and potentially hindering the Euro's performance.

Eurozone Inflation Dynamics and ECB Meeting Highlights

It is worth noting that Eurozone inflation in November fell short of market expectations, primarily attributed to a decline in energy prices. The Harmonized Index of Consumer Prices (HICP) for November recorded a month-on-month decrease of -0.6%, slightly weaker than anticipated. The annual inflation rate stood at 2.4%, in line with analysts' predictions. However, examining core inflation (excluding food and energy prices), it registered at 3.6% year-on-year, marking the lowest figure since April 2022.

It should be noted that the European Central Bank (ECB) recently conducted a meeting and made it clear that they did not discuss the possibility of cutting interest rates. However, they did issue a caution regarding a potential spike in December inflation due to colder weather, which typically leads to increased energy demand and prices. This situation could constrain the strength of the Euro and present a challenge for the EUR/USD pair.

US Housing Data and Upcoming Economic Indicators in Europe and the US

Moreover, Building Permits in the US declined to 1.46 million in November, falling short of the expected 1.47 million, while Housing Starts rose to 1.56 million, surpassing the consensus of 1.36 million. The mixed US housing data with a decline in Building Permits and a rise in Housing Starts could influence the EUR/USD pair, potentially contributing to market volatility.

Looking forward, the focus in the market will be on several key economic indicators. In Germany, investors will be watching the Producer Price Index (PPI) for November. For the Eurozone, attention turns to October's Current Account and Construction Output. Additionally, investors will keep their eye on December's Consumer Confidence for the Eurozone. On the U.S. side, there will be the release of Existing Home Sales data.

EUR/USD - Technical Analysis

As of December 20, the EUR/USD pair is navigating a delicate balance in the forex market. Currently priced at 1.0969, it shows a modest decline of 0.1%. The pair finds itself fluctuating around significant technical levels, with a pivot point established at 1.0754. Resistance levels are observed at 1.0879, 1.1021, and 1.1146, while support is anchored at 1.0611, 1.0487, and 1.0362.

The technical indicators paint a mixed picture. The Relative Strength Index (RSI) at 65 leans towards a bullish sentiment but stops short of the overbought threshold, indicating potential room for growth. However, the Moving Average Convergence Divergence (MACD) shows a near-zero value of 0.00006 against a signal of 0.00263, suggesting a lack of strong momentum in either direction.

The 50-Day Exponential Moving Average (EMA) at 1.0957 slightly underpins the current price, reinforcing a short-term bullish trend. Nevertheless, a bearish engulfing candle pattern near 1.09770 signals potential bearish bias, indicating that the pair is likely to stay bearish below 1.1005.

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Daily Price Outlook

Despite the dovish remarks by the Bank of Canada (BoC) Governor Tiff Macklem and the modest US Dollar (USD) uptick, the USD/CAD currency pair failed to stop its losing streak and remained well offered around below the 1.3390 level. However, the reason for its downward trend could be attributed to the recent goodish recovery in Crude Oil prices, which tends to underpin the commodity-linked Loonie and contributes to the USD/CAD currency pair.

Bank of Canada's Rate Cut Hints and Market Impact

It's worth noting that the Bank of Canada's Governor, Tiff Macklem, recently hinted at the possibility of lowering interest rates in 2024. This news has softened the potential downsides in the USD/CAD pair. People in the market quickly reacted, expecting rate cuts to begin around April, with a total cut of at least 1% by the end of next year. This, in turn, is likely to support the USD/CAD pair. Although, the upticks were short-lived and temporary amid the recent recovery in Crude Oil prices, which usually benefits the Canadian Dollar linked to commodities.

US Dollar Outlook and Fed Presidents' Views on Rate Cuts

Furthermore, Chicago Federal Reserve (Fed) President Austan Goolsbee and Cleveland Fed President Loretta Mester recently disagreed with the market's predictions of early interest rate cuts. This follows New York Fed President John Williams's statement on Friday that it's too early to talk about rate cuts. Moreover, the geopolitical risks are boosting the USD's safe-haven status against the Canadian Dollar. Traders are cautious about making big bets on the USD/CAD pair and are waiting for the latest consumer inflation figures from Canada for clearer direction later in the North American session.

Thus, the mixed views from Fed officials on early rate cuts and geopolitical risks favoring the USD's safe-haven status against the Canadian Dollar are making USD/CAD traders cautious. They're awaiting Canada's consumer inflation figures for clearer direction.

USD/CAD - Technical Analysis

The USD/CAD pair on December 19th exhibits a subtle yet complex trading pattern in the forex market. Currently, it records a marginal decline of 0.05%, trading at 1.3393. This level of trading activity indicates a cautious market sentiment towards the currency pair.

Analyzing the 4-hour chart, the pivot point is established at 1.3180. The pair faces immediate resistance at 1.3277, with further resistance expected at 1.3450 and 1.3550. On the other hand, support levels are found at 1.3012, followed by 1.2847 and 1.2670. These key price levels will be critical in dictating the near-term trajectory of the USD/CAD pair.

The technical indicators provide a nuanced view of the pair's potential direction. The Relative Strength Index (RSI) stands at 38, suggesting a bearish sentiment as it falls below the neutral 50 threshold. However, the Moving Average Convergence Divergence (MACD) presents a value of 0.00062 against a signal line of -0.00373, hinting at possible upward momentum. This contrast in indicators underscores the current market uncertainty.

The 50-Day Exponential Moving Average (EMA) at 1.3391 closely aligns with the current trading price, indicating a balanced market outlook. Notably, the Loonie has entered an oversold zone, and the closing of candles over the $1.3350 level could pivot the pair towards a bullish bias today.

In conclusion, the overall trend for the USD/CAD pair appears to be bullish above the 1.3390 level. The short-term forecast suggests that the pair may test higher resistance levels in the upcoming sessions, particularly if it sustains above the critical EMA and support points. Investors and traders should closely monitor these technical indicators and key levels for insights into potential market shifts.

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Daily Price Outlook

Gold price (XAU/USD) failed to maintain its previous upward rally and edged lower on Tuesday. However, the reason for its downward trend could be attributed to the combination of factors including bullish US dollar and positive sentiment in global stock markets. It should be noted that the slew of influential Federal Reserve (Fed) officials recently tried to push back against market bets for early interest rate cuts in 2024. This is making the US Dollar stronger and putting pressure on gold.

It's worth noting that the Gold price is currently facing pressure due to a positive sentiment in global stock markets, making it less attractive as a safe-haven asset. However, geopolitical tensions remain a significant concern for the markets. Meanwhile, the fears of a potential economic slowdown, especially in China and the Eurozone, could support gold prices. Traders are also being cautious ahead of a key US inflation report scheduled for Friday.

Looking ahead, traders seems cautious to place any strong position before a key US inflation report scheduled for Friday. This report, known as the Core PCE Price Index, will give insights into the Federal Reserve's future decisions, impacting the demand for the US Dollar and influencing Gold prices.

Fed Officials Resist Rate Cut Expectations, Impacting Gold Prices and USD

As we mentioned above that Chicago Fed President Austan Goolsbee and Cleveland Fed President Loretta Mester are against the idea of lowering interest rates, which is different from what the market expects. Goolsbee is puzzled by how the market reacted to the recent FOMC meeting and wants to make it clear that the central bank is not planning to quickly cut rates. Mester thinks the financial markets might be predicting rate cuts too soon.

New York Fed President John Williams warned against predicting rate cuts too early last Friday, which stopped gold prices from going up too much. However, the market still thinks the Fed will start making things easier in the first half of 2024. This belief is making the US Dollar weaker and helping gold.

As a result, investors are closely watching the US Core PCE Price Index on Friday for insights into the Federal Reserve's upcoming policy decisions, considering the potential impact of these geopolitical factors on the market.

Geopolitical Tensions in the Middle East Boost Safe-Haven Appeal of Precious Metals

In contrast to this, the ongoing worries about conflicts in the Middle East were seen as one of the key factor that cap further losses in the safe-haven precious metal. Yemen's Houthi militants, supported by Iran, attacked with drones and missiles because of what Israel did in Gaza. In reply, the US formed a coalition and started Operation Prosperity Guardian to deal with the Houthi threat in the Red Sea.

GOLD (XAU/USD) - Technical Analysis

As of December 19, Gold's market performance illustrates a delicate balance in the investment landscape. The precious metal has seen a slight decrease of 0.25% in 2022, currently positioning itself just below the pivot point of $1,979. Despite this minor dip, the outlook for Gold remains cautiously optimistic.

In terms of resistance, the immediate level is at $2,014, with subsequent ceilings at $2,054 and $2,089. On the support side, Gold finds a cushion at $1,940, followed by lower levels at $1,904 and $1,869. These key price levels play a pivotal role in determining Gold’s short-term movements.

The technical indicators offer a mixed view. The Relative Strength Index (RSI) stands at 50, precisely at the threshold that separates bullish sentiment from bearish. This neutrality in the RSI indicates an evenly balanced market sentiment. The Moving Average Convergence Divergence (MACD) presents a reading of -1.2300 against a signal of 3.8190, suggesting that bearish momentum could be on the horizon, despite the current stable market conditions.

A notable observation is Gold's relationship with the 50-Day Exponential Moving Average (EMA), currently at $2,026.00. Trading below this level, Gold indicates a potential bearish trend in the short term. However, the market remains vigilant for any shifts that could push the metal above this significant moving average.

In conclusion, the overall trend for Gold appears bullish above the $2,015 mark, offering a glimpse of potential upward movement in the coming days. Investors are advised to closely monitor these key technical levels and indicators, as they will play a crucial role in shaping Gold's market trajectory in the near term.

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Daily Price Outlook

Despite the bullish trend in the US dollar and improved yields on US Treasury bonds, the AUD/USD currency pair has maintain its upward momentum, remaining well-bid around the $0.6715 level. However, this upward trajectory can be attributed to the recent release of the RBA meeting minutes. Furthermore, Australia's strong employment results and increasing incomes serve as indicators of economic resilience, offering some further support to the Australian Dollar and contributes to the AUD/USD pair gains.

Positive Outlook from RBA and Improved Economic Indicators

Australia's Reserve Bank (RBA) is hopeful about inflation getting better and wants it to keep going up. The RBA thinks it's crucial to wait for more information to understand the risks. They want to find the right balance between the possibility of inflation staying high for a long time and the risk of a slowdown in demand. According to RBA staff, they expect inflation to reach the upper range by 2025.

In economic news, Judo Bank's Composite PMI is better at 47.4, Manufacturing PMI is a bit higher at 47.8, and Services PMI increased to 47.6. Australia's Consumer Inflation Expectations for December went down to 4.5% from 4.9%. On a good note, Australian Trade Minister Don Farrell thinks China will remove tariffs on Australian wine, showing improved relations as China already lifted restrictions on most Australian exports.

Therefore, the positive outlook from Australia's Reserve Bank and improved economic indicators may strengthen the Australian Dollar (AUD). Additionally, the potential resolution of trade issues with China could positively impact the AUD/USD pair, leading to potential upward movement.

Potential Impact of US Economic Developments on AUD/USD Pair

The Federal Reserve (Fed) kept interest rates the same at 5.5% in December, just as people expected. However, there's talk about the possibility of lowering rates in the March meeting. Chicago Fed President Austan Goolsbee is open to the idea, and Atlanta Fed President Raphael Bostic thinks a rate cut might happen in Q3 2024, depending on how inflation goes.

On the data front, US S&P Global Services PMI went up to 51.3, but Manufacturing PMI dipped to 48.2. The US Dollar Index (DXY) is holding steady, waiting for news from the US economy. It might get a boost from better yields on US Treasury bonds. Investors are keeping an eye on Tuesday's Building Permits and Housing Starts in the US. On Wednesday, the People's Bank of China (PBoC) will reveal its Interest Rate Decision.

However, New York Fed President John Williams disagrees with the idea of a March rate cut. San Francisco Fed President Mary Daly says even with three rate cuts next year, the Fed will keep a somewhat restrictive stance. Deciding when policy changes might happen in the coming year is too early, according to Daly, as there's ongoing work, and it's not just about getting inflation to 2%.

Therefore, the potential for rate cuts and mixed economic indicators in the US may create uncertainty, impacting the AUD/USD pair. Positive developments, like improved US Treasury yields, could boost the US Dollar, potentially weakening the Australian Dollar against the USD.

AUD/USD - Technical Analysis

As of December 19, the Australian Dollar against the US Dollar (AUD/USD) presents an intriguing scenario in the foreign exchange market. The pair is witnessing a slight upturn, registering a 0.25% increase, with the current price hovering around 0.67226. This movement indicates a tentative bullish sentiment in the short-term outlook.

The technical landscape offers several key levels that traders are closely monitoring. The pivot point is established at 0.6587, serving as a baseline for the pair's movement. In terms of resistance, AUD/USD faces immediate challenges at 0.6658, with further resistance points at 0.6775 and 0.6846. Conversely, the support levels are positioned at 0.6470, 0.6399, and 0.6326, offering potential cushions for any downward trends.

The Relative Strength Index (RSI) is currently at 62, hovering above the neutral 50 mark, indicating a bullish market sentiment. This suggests that investors are showing a preference for the Australian Dollar over the US Dollar. The Moving Average Convergence Divergence (MACD) displays a reading of -0.00027 with a signal line at 0, implying a potential for both upward and downward momentum, adding a layer of uncertainty to the market's direction.

Notably, the 50-Day Exponential Moving Average (EMA) for AUD/USD stands at 0.6712. The pair trading slightly above this level suggests a short-term bullish trend, aligning with the overall market sentiment. Furthermore, the observed upward channel pattern supports the AUD/USD pair, indicating a continuation of the bullish momentum.

In conclusion, the AUD/USD pair displays a bullish trend above the 0.66822 level. The short-term forecast anticipates testing higher resistance levels in the coming days, especially if it sustains above the pivotal EMA and resistance points. However, traders should remain vigilant for any shifts in these technical indicators, which could signal a change in the market's direction.

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Daily Price Outlook

The GBP/USD currency pair extended its winning streak and remained well-bid around above the 1.2690 level. However, the upticks in the currency pair was supported by the Bank of England's (BoE) hawkish outlook, which tend to underpin GBP currency and contributes to the GBP/USD pair gains. Additionally, the upward rally could be attributed to the downtick in the US Dollar. Notably, the Federal Reserve (Fed) signaled an end to its monetary policy tightening cycle last Wednesday, with the "dot plot" indicating at least three 25 basis points (bps) rate cuts in 2024. This dovish stance has undermined the US Dollar (USD) and contributed to the gains in the GBP/USD pair.

BoE's Hawkish Stance and Positive UK Data Propel GBP, Favorable Conditions for GBP/USD Pair

It's important to note that the British Pound (GBP) is getting support from the Bank of England's (BoE) hawkish stance. They're indicating that they plan to keep monetary policy restrictive because key indicators of UK inflation are still high. Additionally, the recent flash UK PMIs released on Friday suggest that the economy is gaining momentum towards the end of the year. This is good news, as it helps the UK avoid a recession in the fourth quarter. The Pound is also benefiting from a relatively quiet US Dollar, creating a bullish environment for the GBP/USD pair.

Fed's Mixed Signals Impact USD and Boost GBP/USD Pair

Furthermore, the Federal Reserve (Fed) hinted that they're done tightening their monetary policy and even mentioned planning three rate cuts in 2024. However, a couple of important Fed officials disagreed, suggesting early rate cuts might not happen. This led to a short-covering rally for the US Dollar (USD) on Friday, bouncing back from its lowest point since July 31. But, despite this recovery, the USD didn't gain much ground due to the overall dovish stance of the Fed and the positive market sentiment, which tends to weaken the safe-haven appeal of the dollar and contributes to the GBP/USD pair gains.

GBP/USD - Technical Analysis

The GBP/USD pair, often seen as a barometer of global financial stability, has exhibited a modest upward trend in recent trading, registering a 0.14% increase to 1.26940. This movement, though slight, is significant in the context of broader market sentiments and geopolitical dynamics.

Currently, the pivot point for GBP/USD is identified at $1.2524, serving as a key indicator for future price movements. Immediate resistance levels are noted at $1.2660, $1.2816, and $1.2952, which could pose challenges to the pair's upward momentum. Conversely, support levels are established at $1.2364, $1.2228, and $1.2086, offering potential areas of rebound in case of a downward price movement.

The technical indicators for GBP/USD reveal a cautiously optimistic outlook. The Relative Strength Index (RSI) stands at 55, which leans towards a bullish sentiment but is not overwhelmingly strong. An RSI above 50 generally suggests a bullish market sentiment. The Moving Average Convergence Divergence (MACD) presents a more nuanced view, with a value of -0.00035 against a signal of 0.00334, hinting at potential downward pressure.

The 50-Day Exponential Moving Average (EMA) is currently at $1.2701, just above the current price, which could suggest a short-term bullish trend if the price remains above this level. However, the close proximity of the price to the 50 EMA warrants close observation for any potential shifts in trend.

In summary, the overall trend for GBP/USD appears bullish above the pivot point of $1.2524. The short-term forecast anticipates the pair to potentially test higher resistance levels in the coming days. However, given the mixed signals from the RSI and MACD, along with the close proximity to the 50 EMA, investors should remain vigilant for any sudden changes in market sentiment or price movements.

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Daily Price Outlook

Gold price (XAU/USD) prolonged its upward trend and edged higher 2,024 level. However, the reason for its upward rally could be attributed to the US Dollar downtick. It's important to note that the Federal Reserve (Fed) signaled an end to its monetary policy tightening cycle last Wednesday, with the "dot plot" indicating at least three 25 basis points (bps) rate cuts in 2024. Hence, this dovish stance undermined the US Dollar (USD) and contributed to the gains in the gold price.

Furthermore, concerns about geopolitical risks and fears of a deeper economic downturn, particularly in China and the Eurozone, were seen as another key factors that kept the gold price higher.

Federal Reserve Perspectives and Market Anticipation: Insights from Williams and Bostic

It is worth noting that New York Federal Reserve President John Williams recently spoke to CNBC, noting that the idea of cutting interest rates is not something being actively discussed right now. He emphasized that it's too early to speculate about such measures. Williams highlighted the unpredictable nature of economic data and stressed the need for the central bank to be ready to tighten policies if progress on inflation were to slow down.

Atlanta Fed President Raphael Bostic shared a similar view, stating that rate cuts aren't happening soon and could potentially occur in the third quarter of 2024. Despite these cautious statements, the financial markets are already anticipating a potential easing of Federal Reserve policies by the first half of 2024. This anticipation has contributed to the decline of the US Dollar and provided support to Gold prices.

Economic Concerns and Global Tensions Impacts on Gold

Furthermore, the recent flash PMI prints for Germany, released on Friday, revealed a decline in business activity in December. This raises concerns about a potential recession in the largest economy of the Eurozone. On another note, North Korea launched at least one ballistic missile on Monday, following a separate short-range missile launch on Sunday night.

Therefore, the decline in business activity in Germany and geopolitical tensions, such as North Korea's missile launches, contribute to global uncertainties, likely bolstering demand for safe-haven assets like gold.

Shifting to China, their state media, Xinhua, shared a government report stating that the economy is expected to face more favorable conditions and opportunities than challenges in 2024. Despite this, global uncertainties, including geopolitical risks and worries about economic downturns in China and the Eurozone, are boosting the demand for safe-haven assets like precious metals.

GOLD (XAU/USD) - Technical Analysis

As we approach the end of the year, Gold's market behavior presents a compelling story. In 2022, Gold has seen an overall uptick of 0.17%, reflecting a cautious optimism among investors. Currently, the pivot point for Gold is set at $1,981, marking a crucial juncture in its price trajectory.

Key resistance levels are identified at $2,015, $2,054, and $2,088, providing clear markers for potential bullish advances. On the flip side, immediate support lies at $1,939, with further support levels at $1,905 and $1,871, which could act as safety nets in case of a downward price movement.

The Relative Strength Index (RSI) for Gold stands at 52, indicating a mildly bullish sentiment. An RSI above 50 typically suggests a bullish market sentiment, albeit with caution as it is not significantly above the midline. The Moving Average Convergence Divergence (MACD) shows a value of -0.64 against a signal of 5.76, suggesting potential downward momentum. This could indicate a short-term bearish trend, warranting close observation.

The 50-Day Exponential Moving Average (EMA) is currently at $2,015, aligning with the first level of resistance. Gold's price action around this EMA is crucial; a sustained position above the 50 EMA could reinforce the bullish sentiment. The recent closure of a Doji candlestick pattern over the 50 EMA suggests a weakening of the downtrend and a potential shift towards buying.

In conclusion, the overall trend for Gold appears to be bullish, particularly if it sustains above the $2,015 mark. The short-term forecast anticipates Gold to test its resistance levels in the coming days. However, given the mixed signals from RSI and MACD, investors should remain vigilant for any shifts in market sentiment or price movements that deviate from this trajectory.

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Daily Price Outlook

Despite the weaker Eurozone data, the EUR/USD currency pair maintained its upward momentum and surged to gains near 1.0920 level. However, the reason for its upward rally can be attributed to the US dollar bearish bias. Notably, the Federal Reserve (Fed) signaled an end to its monetary policy tightening cycle last Wednesday, with the "dot plot" indicating at least three 25 basis points (bps) rate cuts in 2024. This dovish stance has undermined the US Dollar (USD) and contributed to the gains in the EUR/USD pair.

Challenges in Eurozone Business Activity Raise Recession Concerns

It's worth noting that Eurozone business activity unexpectedly declined in December, signaling that the economy is likely in a recession. The preliminary Eurozone HCOB Composite PMI fell to 47.0, below the market's expected 48.0 and November's 47.6. This marks the seventh consecutive month below the growth threshold of 50.

Furthermore, the Eurozone Manufacturing PMI dropped to 44.2, falling below expectations, and the Services PMI fell to 48.1, missing the estimated 49.0. This data suggests a probable contraction in the Eurozone economy in Q4, contrary to the European Central Bank's projections. Consequently, the Euro (EUR) faces selling pressure but it was short-lived.

Mixed Signals in US Economic Indicators and Fed's Dovish Stance

It should be noted that the S&P Global Composite PMI hit a promising five-month high at 51.0 in December, up from 50.7. However, the Manufacturing PMI dropped to its lowest in four months, slipping from 49.4 to 48.2. On a positive note, the Services PMI rose to 51.3 in December from 50.8 in November.

Moreover, the Federal Reserve (Fed) suggested they're done tightening monetary policy, planning three rate cuts in 2024. Yet, some key Fed officials disagreed, hinting that early rate cuts might not happen. This disagreement led to a short-covering rally for the US Dollar (USD) on Friday, recovering from its lowest point since July 31. Despite the rebound, the USD didn't gain much ground due to the Fed's overall dovish stance and positive market sentiment. This tends to weaken the dollar's safe-haven appeal, contributing to gains in the EUR/USD pair.

EUR/USD - Technical Analysis

The EUR/USD pair has shown a modest yet positive performance recently, registering a 0.15% increase to 1.09115. This movement reflects the ongoing adjustments in the forex market, where subtle shifts often speak volumes about underlying economic sentiments.

Currently, the pivot point for EUR/USD is situated at $1.0756, which acts as a critical indicator for future movements. The immediate resistance lies at $1.0881, with further barriers at $1.1024 and $1.1145. These levels will be crucial for traders to watch, as a breach of these could signify stronger bullish momentum. On the downside, immediate support is found at $1.0618, followed by $1.0484 and $1.0359, marking key levels where the bearish trend could find a halt.

The technical indicators present a mixed picture. The Relative Strength Index (RSI) stands at 56, indicating a slight bullish sentiment. An RSI above 50 often signifies positive momentum, yet it's not far enough from the midline to suggest a strong trend. Conversely, the Moving Average Convergence Divergence (MACD) values, with a MACD of -0.00064 and a signal line at 0.00296, imply a potential downward movement. This divergence calls for a careful analysis of forthcoming market changes.

The 50-Day Exponential Moving Average (EMA) at $1.0918 currently supports the EUR/USD uptrend. The recent Doji candlestick pattern close over the 50 EMA indicates a weakening downtrend and a possible shift towards buying.

In summary, the overall trend for EUR/USD appears bullish, especially if it sustains above $1.08960. The short-term forecast suggests that the pair may test higher resistance levels in the upcoming days. However, the mixed signals from RSI and MACD necessitate vigilant market observation, as these could indicate shifting trends or potential reversal points.

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Daily Price Outlook

The global market sentiment has maintained its upward trend and remained bullish as U.S. stocks opened strong on Friday, with the Dow Jones Industrial Average securing its second consecutive record high close. However, the surge was mainly driven by optimism surrounding the Federal Reserve's dovish pivot, suggesting a potential decrease in borrowing rates next year.

This positive momentum continued from Thursday, December 14, 2023, when the S&P 500 gained 0.3%, and the Dow notched another record high. Federal Reserve officials' comments hinting at potential interest rate cuts in the coming year have fueled this optimistic outlook, triggering market activity.

It should be noted that S&P 500 (.SPX) rose by 0.29%, stood at 4,719.55 points, staying just under 2% below its January 2022 record high. The Nasdaq Composite Index (.IXIC) increased by 0.19% to 14,761.56 points, while the Dow Jones Industrial Average (.DJI) climbed 0.43% to 37,248.35 points.

Fed's Policy Impact, Economic Outlook, and Retail Sales Surge

Investors are keeping a close eye on the recent developments in the financial market. The 10-year Treasury yields have fallen below 4%, marking the first time since early August. This shift comes in the wake of the Federal Reserve's decision to keep interest rates unchanged.

Federal Reserve Chair Jerome Powell has hinted that the era of significant tightening of monetary policy may be coming to an end. This decision is influenced by the unexpectedly rapid decline in inflation.

The market is responding positively to the prospect of lower rates. However, there are concerns about the overbought nature of the market. Despite these concerns, the unexpected growth in U.S. retail sales in November, as reported by the Commerce Department, has alleviated fears of a recession. This positive news is contributing to the overall optimistic sentiment in the market.

Therefore, the news of falling Treasury yields and the Fed's stance has boosted SPX sentiment, potentially driving higher stock prices amid eased recession fears and positive economic indicators.

S&P500 (SPX) - Technical Analysis

On December 15th, the S&P 500 index presents a complex technical landscape, reflecting the nuanced shifts occurring in the broader market. Currently at 4719.54, the index registers a modest uptick of 0.26%, navigating a territory rife with potential turning points.

A pivotal benchmark for the S&P 500 is set at $4,650, serving as a fulcrum for its future movements. The index faces a series of resistances at $4,690, $4,732, and $4,771. These levels are critical in determining whether the index can sustain its upward trajectory or if it will face retracement. Support levels are established at $4,627, $4,586, and $4,565, offering potential footholds in case of a downturn.

The technical indicators provide deeper insights into the index's current momentum. The Relative Strength Index (RSI) stands at an elevated 83, indicating an overbought condition that may signal a forthcoming pullback. The MACD, at 9.330, is significantly below its signal line of 44.910, suggesting a loss of bullish momentum. Moreover, the index’s current position above the 50-Day Exponential Moving Average (EMA) of $4,663 points to a short-term bullish trend.

However, the formation of a Doji candlestick pattern below the $4,720 level implies potential indecision among investors, hinting at a possible shift in market bias. This candlestick formation, coupled with the RSI and MACD readings, suggests that the market may be poised for a period of consolidation or reversal.

In conclusion, while the S&P 500 exhibits signs of a bullish run, the technical analysis indicates a potential shift to bearish territory below the $4,730 mark. In the short term, the market is expected to test these resistance levels, with the outcome likely to be influenced by investor sentiment and broader market dynamics.

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