AUD/USD Price Analysis – Dec 26, 2024
Daily Price Outlook
During the European trading session, the AUD/USD pair struggled for the second day in a row on Thursday, weighed down by a stronger US Dollar and the Reserve Bank of Australia's (RBA) December meeting minutes.
The US Dollar bounced back after a steep decline, as Federal Reserve officials hinted at fewer rate cuts next year, pointing to a slowdown in easing inflation. This recovery pushed the dollar close to a two-year high, putting pressure on the Aussie and other Asian currencies.
US Economic Data and Fed's Stance Strengthen US Dollar, Weighing on AUD/USD Pair
On the US front, the broad-based US Dollar rebounded after a sharp sell-off, as Federal Reserve officials signaled fewer interest rate cuts next year due to a slowdown in the disinflation process. However, soft US PCE data have kept inflation concerns in check, leading to a mixed economic outlook.
According to the CME FedWatch tool, markets now expect a nearly 93% chance that the Federal Reserve will keep interest rates unchanged in January, maintaining the current range of 4.25%-4.50%.
US Durable Goods Orders for November came in weaker than expected, falling by 1.1% compared to the forecasted 0.4% drop. This follows an upward revision in October, which saw a 0.8% increase, up from an initial 0.2% gain.
Meanwhile, US Consumer Confidence dropped 8.1 points in December to 104.7, signaling that the earlier rebound in consumer confidence was not sustained.
Concerns over President-elect Trump’s economic policies, particularly around tariffs, have added to household worries about rising living costs.
These concerns were further reflected in the Federal Open Market Committee's projections, which suggested fewer rate cuts in 2025 due to persistent inflation pressures.
Cleveland Fed President Beth Hammack noted that she prefers to keep interest rates steady until there is more evidence of inflation heading back to the Fed’s 2% target.
Meanwhile, Chicago Fed President Austan Goolsbee revised his forecast for 2025, expecting fewer rate cuts than previously anticipated.
US core PCE inflation rose 2.8% year-over-year, slower than expected, while monthly inflation grew by just 0.1%, showing moderate price increases. This mixed data adds to the pressure on the AUD/USD pair.
Therefore, the mixed US economic data, along with expectations for fewer rate cuts, strengthens the US Dollar, putting downward pressure on the AUD/USD pair.
The market's uncertainty about inflation and interest rates further intensifies bearish sentiment for the Aussie Dollar.
AUD/USD – Technical Analysis
The AUD/USD is trading at $0.62369, up 0.07% in the last session, reflecting cautious market sentiment. The pair remains below the pivot point of $0.62511, signaling potential bearish pressure unless it breaks above this level.
Immediate resistance lies at $0.63068, followed by $0.63420 and $0.63812, which could act as key upside targets if the bullish momentum strengthens. On the downside, support is located at $0.62004, with additional levels at $0.61565 and $0.61090, which could be tested if selling pressure intensifies.
Technical indicators paint a mixed picture. The RSI is at 48, reflecting a neutral sentiment with a slight bearish inclination.
The 50-day Exponential Moving Average (EMA) at $0.62391 is near the current price, providing a dynamic resistance level that aligns with the broader downward bias. A failure to reclaim $0.62511 could result in a deeper pullback toward $0.62004 or lower.
The pair’s price action is likely to hinge on the $0.62511 pivot point. A sustained move above this level would indicate recovery potential, targeting $0.63068, while a rejection may confirm further downside. Traders may consider a sell limit order at $0.62518, targeting $0.62008, with a stop loss at $0.62853 to manage risk effectively.
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USD/JPY Price Analysis – Dec 26, 2024
Daily Price Outlook
During the European trading session, the USD/JPY pair remains on an upward trend, trading near multi-month highs around 157.55 level, driven by a combination of factors.
However, the Federal Reserve's hawkish stance has been a key driver, as it continues to signal a commitment to maintaining elevated interest rates to combat inflation.
This has widened the US-Japan interest rate differential, favoring the higher-yielding USD over the Japanese Yen (JPY). In addition, strong US economic indicators, including robust Treasury yields, have further bolstered the demand for the greenback.
Another factor is the Bank of Japan's (BoJ) cautious approach to tightening monetary policy. Despite recent inflation data from Japan showing resilience, the BoJ has reiterated its gradual stance on rate hikes.
Governor Kazuo Ueda has emphasized the need for more data on wage growth before committing to aggressive rate adjustments. This uncertainty surrounding the BoJ's actions has made the JPY less attractive to investors.
The broader market sentiment also leans in favor of the USD/JPY pair. A generally positive risk tone has reduced demand for safe-haven assets like the JPY. Meanwhile, the US Dollar has maintained its strength, even shrugging off slightly weaker US consumer confidence data.
BoJ's Dovish Policies Keep JPY Struggling
On the BOJ front, the BoJ's cautious monetary policies are weighing heavily on the Japanese Yen. Minutes from the central bank's October meeting highlighted a deliberate and measured approach to rate hikes, potentially extending into late fiscal 2025.
While there is speculation about a possible rate increase in January or March, markets remain doubtful about any immediate action.
Japan's Finance Minister, Katsunobu Kato, has raised concerns about recent currency volatility and hinted at potential interventions.
However, such warnings have done little to provide a sustained boost to the Yen, as investors remain focused on the growing divergence between US and Japanese interest rates.
Geopolitical Risks and Intervention Concerns
Despite the bullish momentum of the USD/JPY pair, fears of Japanese authorities intervening in the currency markets have capped the pair's upside potential. Additionally, geopolitical uncertainties and trade war fears create a mixed outlook for the JPY.
While these factors have kept some traders cautious, the overall trend for the USD/JPY pair remains upward, supported by the Fed's firm stance and the BoJ's slow-paced policy shifts.
USD/JPY – Technical Analysis
The USD/JPY is trading at 157.361, up 0.04%, reflecting a slight upward momentum. The pair remains above the pivot point at 156.932, signaling bullish potential if it maintains this level.
Immediate resistance lies at 157.923, with higher targets at 158.742 and 159.672 if the bullish trend continues. On the downside, immediate support is located at 155.965, with subsequent levels at 155.004 and 154.152, which could be tested if the pair reverses lower.
The Relative Strength Index (RSI) stands at 65, indicating strong bullish momentum but nearing overbought territory.
The 50-day Exponential Moving Average (EMA) at 156.769 supports the upward trend, serving as a key dynamic support level. Traders should watch for a decisive move above the immediate resistance at 157.923 to confirm further gains.
The pair’s price action suggests a positive bias, but caution is warranted as the RSI nears overbought levels. Holding above the pivot at 156.932 reinforces bullish momentum, with the potential to challenge higher resistance zones.
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EUR/USD Price Analysis – Dec 25, 2024
Daily Price Outlook
The EUR/USD currency pair is currently trading at 1.03912, reflecting a slight decline of 0.13%. This downward movement comes as the US Dollar (USD) continues to exert pressure on the Euro, with market volatility subdued due to the holiday season.
The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, is hovering just above the key 108.00 level, maintaining a steady range.
As traders prepare for a quiet market in the coming days, the broader outlook for the USD remains firmly positive, supported by the Federal Reserve's monetary policies and expectations of fewer interest rate cuts in 2025.
US Dollar Outlook: Fed's Slower Rate Cuts Boost Dollar
The Federal Reserve's recent guidance has significantly influenced the USD's strength. The central bank has indicated that it will slow the pace of interest rate cuts in 2025, with only two rate reductions planned, down from the previous projection of four.
As the Fed seeks to balance inflation control with economic growth, analysts, including those at UBS, predict that the Fed will deliver two 25-basis point cuts in the middle of the year.
The more gradual easing is due to persistently high inflation and a labor market that has shown more resilience than expected. This dovish approach has strengthened the US Dollar, which remains firm even as the global economic landscape shows signs of slowing.
EUR/USD: ECB's Dovish Stance Keeps Euro Under Pressure
The Euro continues to face headwinds, primarily due to the European Central Bank's (ECB) cautious stance on inflation and growth. ECB President Christine Lagarde recently indicated that the bank is nearing its inflation target of 2%, but warned that the services sector remains a point of concern.
With Eurozone inflation easing to 2.2%, services inflation remains elevated at 3.9%. This has raised concerns about the pace of monetary tightening in the region. Traders are betting on potential rate cuts by the ECB, with expectations for a 25-basis point reduction in each of the next four policy meetings.
GOLD (XAU/USD) – Technical Analysis
The EUR/USD is trading at 1.03912, showing a slight decline of 0.13% as it continues to face downward pressure. The pair is holding just below the critical pivot point at 1.04042, with immediate resistance at 1.04480, followed by 1.04973 and 1.05649.
These resistance levels are key for any potential bullish reversal, but the current trend remains bearish as the price is unable to break above the pivot point.
On the downside, immediate support is found at 1.03430, with further support levels at 1.03033 and 1.02722. The 50-day Exponential Moving Average (EMA) at 1.03957 is in close proximity, adding to the consolidation near the current price.
The RSI is at 44, indicating bearish momentum, with no signs of oversold conditions yet, suggesting that the price could continue its downward trajectory if it fails to hold above the support levels.
The market remains cautious, with volatility driven by economic data and geopolitical events. If EUR/USD fails to break above 1.04042, further downside could lead to a retest of the lower support levels.
However, a break above the immediate resistance at 1.04480 could shift the market sentiment, but this seems unlikely unless there is a significant shift in the underlying fundamentals.
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GOLD Price Analysis – Dec 25, 2024
Daily Price Outlook
Gold prices have remained resilient around $2,611 during the European trading session, despite the growing strength of the US Dollar. The metal finds support from a cautious outlook on US interest rates, with investors recalibrating their expectations for 2025.
The Federal Reserve’s guidance for slower rate cuts next year has been a key factor driving market sentiment. Amid this, gold has managed to hold its ground as traders navigate a mixed economic landscape shaped by inflation concerns and geopolitical uncertainty.
US Dollar Strengthens, But Gold Holds Ground
The US Dollar has rebounded following a sharp sell-off, largely due to the Federal Reserve’s more conservative stance on rate cuts. While the Fed has adjusted its rate-cut expectations for 2025, signaling that only two rate cuts are likely next year, the broader outlook for the dollar remains firm.
The US Dollar Index (DXY) has stayed above 108.00, supported by the Fed’s projection for a more gradual approach to easing, with the federal funds rate expected to reach 3.9% by the end of 2025.
For gold, this strengthening dollar hasn’t led to major declines. Gold tends to have an inverse relationship with the US Dollar, but the precious metal’s resilience can be attributed to investors seeking a safe haven amid inflationary pressures and uncertain global economic conditions. As the Fed manages inflation slowly, traders are adjusting their positions with gold as a protective asset.
Fed's Slower Rate Cuts Create a Stable Environment
The Fed's decision to reduce the pace of rate cuts reflects ongoing inflation concerns and uncertainties surrounding the future direction of US economic policies.
The latest data points to a slower-than-expected disinflation process, while broader economic forecasts remain cautious. As a result, market participants have adjusted their expectations, resulting in a more stable environment for gold.
At the same time, soft US economic data, including weaker-than-expected durable goods orders and a decline in the US Consumer Confidence Index, has tempered inflation worries, further supporting gold prices.
Investors will continue to keep a close eye on the Fed’s moves, particularly its stance on inflation and interest rates.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is currently trading at $2,616.87, up by 0.16%, and consolidating within a narrow range. The price is hovering just above the pivot point of $2,610.27, indicating potential bullish movement if the price breaks above this level.
Immediate resistance is at $2,633.24, followed by $2,651.64 and $2,664.89, marking key upside targets for a continuation of the bullish trend. On the downside, support is located at $2,588.03, with further levels at $2,573.39 and $2,556.29, providing potential buffers against a bearish reversal.
The 50-day Exponential Moving Average (EMA) at $2,612.15 is also supporting the price, reinforcing the potential for upward movement.
The Relative Strength Index (RSI) is at 50, signaling neutral momentum, with no clear trend direction. This suggests that gold is currently in a consolidation phase, and the market will likely remain range-bound until a decisive breakout occurs.
Traders should focus on the pivot point and the resistance levels to determine whether a bullish or bearish trend will emerge.
In conclusion, if gold maintains momentum above $2,610.27, it could target higher levels, with the immediate focus on $2,633.24. However, a failure to hold above the key support at $2,588.03 could trigger a retracement toward the lower support zones.
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GBP/USD Price Analysis – Dec 25, 2024
Daily Price Outlook
The GBP/USD pair saw a modest uptick, reaching 1.2550, amidst light trading volume this week due to the approaching Christmas holidays. The market has been consolidating, showing little movement as traders adjust to the seasonal slowdown.
Meanwhile, the US Dollar Index (DXY) remains largely flat, holding above 108.00, as investors await fresh economic data. Despite the holiday lull, the broader outlook for the US Dollar continues to be bullish, supported by expectations of a more gradual pace of rate cuts by the Federal Reserve.
Fed's Cautious Approach to Rate Cuts Supports USD
The US Dollar has remained resilient, largely due to the Federal Reserve's recent shift towards a more cautious approach to interest rate cuts.
The Fed's officials have signaled that fewer cuts will be implemented next year, reflecting a slower-than-expected disinflation process and ongoing uncertainty regarding President-elect Donald Trump's economic policies.
According to the latest projections, the federal funds rate could fall to 3.9% by the end of 2025, with only two rate cuts anticipated next year. This shift in expectations supports the US Dollar, as markets recalibrate for a more measured approach from the central bank.
Economic Data to Impact GBP/USD
The upcoming economic data will likely drive volatility in the GBP/USD pair. On Thursday, the US will release Initial Jobless Claims, with economists expecting a slight decline to 218K from the previous 220K.
This could impact the US Dollar as traders assess labor market conditions. Additionally, the Nonfarm Payrolls report for December, due in early January, will be a key focal point for investors. Strong employment data could further solidify the Fed's cautious stance on rate cuts, providing continued support for the US Dollar.
GBP/USD – Technical Analysis
The GBP/USD is currently trading at 1.25296, showing a modest 0.01% decline. The pair is hovering just below the critical pivot point of 1.25653, with immediate resistance at 1.26586 and further resistance at 1.27292 and 1.27819.
These resistance levels will need to be breached for any potential bullish movement, but the overall sentiment remains bearish.
Immediate support is found at 1.24764, followed by 1.24237 and 1.23771. The 50-day Exponential Moving Average (EMA) sits at 1.25511, signaling a neutral-to-bearish trend in the short term.
The Relative Strength Index (RSI) at 45 reflects a neutral to slightly bearish momentum, with no clear signs of a reversal at this point.
The market is looking for direction, and a breach below 1.24764 could trigger further declines toward the next support levels.
On the flip side, if GBP/USD manages to break above the immediate resistance at 1.25653, it could pave the way for a rally toward 1.26586, though this would require a significant shift in sentiment.
Overall, the market remains cautious, with volatility driven by global economic and geopolitical factors.
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GOLD Price Analysis – Dec 24, 2024
Daily Price Outlook
Gold (XAU/USD) has managed to defy the strong US dollar, maintaining its upward trend around the 2,618 level on the day.
This resilience is largely due to rising geopolitical tensions and concerns about a potential trade war, which have pushed investors toward gold as a safe-haven asset.
In addition, recent statements from the Federal Reserve indicating a slower pace of interest rate cuts in 2025 have bolstered the US dollar, keeping it near a two-year high.
This strengthening of the dollar is likely to support US bond yields, which in turn could limit further upside for gold.
Looking ahead, gold is supported by external uncertainties, the continued strength of the US dollar and the Fed's cautious stance on rate cuts may prevent significant gains for gold in the short term.
Investors should stay alert to shifts in both the geopolitical landscape and US monetary policy, as these will play a key role in determining gold's next move.
Mixed Economic Outlook and Strong US Dollar Weigh on Gold's Upside Potential
On the US front, the broad-based US dollar has been flashing green after a sharp sell-off, following signals from the Federal Reserve (Fed) that fewer interest rate cuts are expected next year.
This comes amid a slowdown in the disinflation process. However, the latest soft US PCE data have eased inflation concerns, creating a mixed outlook for the economy.
Markets now expect a nearly 93% chance that the Fed will keep rates unchanged at 4.25%–4.50% in January.
Despite this, US Durable Goods Orders for November fell more than expected, dropping by 1.1%, much worse than the projected 0.4% decline.
Meanwhile, the US Consumer Confidence Index also dropped in December, falling by 8.1 points to 104.7, showing that optimism among households has weakened.
Concerns over President-elect Trump’s economic policies, particularly the potential rise in living costs due to tariffs, have contributed to this dip.
Furthermore, the Fed’s projections suggest fewer rate cuts in 2025, reflecting caution due to ongoing inflation pressures.
Cleveland Fed President Beth Hammack indicated that rates should remain steady until inflation shows signs of returning to the 2% target.
Chicago Fed President Austan Goolsbee also revised his 2025 rate cut projection, now expecting fewer reductions.
Therefore, the mixed economic outlook, with fewer rate cuts expected and concerns over inflation, may limit gold's upside potential. A strong US dollar and steady interest rates reduce gold's appeal as a safe-haven asset, potentially capping its price growth.
Geopolitical Tensions Drive Investors Towards Gold as a Safe-Haven Asset
On the geopolitical front, tensions remain high as the Israel Defense Forces (IDF) reported that sirens were sounded in central and southern Israel after intercepting a projectile fired from Yemen.
This comes as Israeli forces continue their attacks in the northern Gaza region, which has been under siege. The situation in Gaza remains critical, with ongoing military actions causing widespread concern.
Meanwhile, in Ukraine, Russian forces have captured two villages and are making steady progress in the Donetsk area. The conflict between Russia and Ukraine continues to escalate, with Russia strengthening its hold on key regions. In response to the situation,
US President-elect Donald Trump has urged Ukrainian President Volodymyr Zelenskyy to focus on securing peace and stability, reflecting ongoing international efforts to address the war’s impact. These developments add further uncertainty to global markets, as geopolitical tensions remain a major concern.
Hence, the ongoing geopolitical tensions in Israel and Ukraine could drive more investors towards gold as a safe-haven asset. As conflicts escalate, the demand for gold may increase, potentially pushing its price higher as investors seek stability amidst uncertainty.
GOLD (XAU/USD) – Technical Analysis
Gold prices have maintained upward momentum, trading at $2,620.17, bolstered by safe-haven demand amid geopolitical tensions and economic uncertainty.
The pivot point lies at $2,609.49, which has been a critical level for determining short-term direction. Immediate resistance is seen at $2,633.23, followed by $2,651.64 and $2,670.44, with higher targets forming in case of continued bullish pressure.
On the downside, immediate support is at $2,588.03, with further key support levels at $2,573.39 and $2,556.29.
The 50-day Exponential Moving Average (EMA) sits at $2,615.77, reinforcing the current support level near $2,610. The Relative Strength Index (RSI) is at 53, indicating a neutral market stance, with a slight bullish bias.
A break above $2,633.23 would open the door to further gains, potentially targeting the next resistance at $2,651.64. Conversely, if gold fails to hold above $2,610, it could test lower support levels, with $2,588.03 acting as a critical point of defense.
Traders should remain cautious with thin holiday liquidity, as it can amplify market moves. A sustained breach above $2,610 is likely to sustain upward momentum, while a failure to maintain support could lead to a retracement toward lower levels.
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USD/CAD Price Analysis – Dec 24, 2024
Daily Price Outlook
During the European trading session on Tuesday, the USD/CAD pair saw some upward movement, climbing to an intraday high of 1.4400 after starting around 1.4396.
This increase can mainly be traced back to the US dollar, which gained momentum following comments from Federal Reserve policymakers suggesting fewer interest rate cuts next year due to a slowdown in disinflation.
However, the situation isn't all straightforward. Soft US PCE data have eased some of the inflation concerns, leaving a mixed outlook for the economy.
On the other hand, Canada’s economy showed stronger-than-expected GDP growth, while the Raw Material Price Index unexpectedly dropped, which could lend some support to the Canadian dollar. This positive economic data might help the CAD, potentially leading to a weaker USD/CAD pair in the short term.
US Economic Data and Consumer Confidence Point to Mixed Outlook for the Economy
On the US front, the broad-based US dollar saw support as Federal Reserve officials suggested there might be fewer interest rate cuts next year. This was due to a slowdown in the disinflation process, which keeps inflation concerns lingering.
Hon for October, which showed a 0.8% increase, much higher than the initial 0.2% reported. This data reflects some challenges in the US economy and could affect future economic expectations.
Meanwhile, consumer confidence also took a hit. The US Consumer Confidence Index fell by 8.1 points in December, dropping to 104.7. This decline shows that the recent rise in confidence was not sustained, with many households concerned about President-elect Trump's economic policies.
Nearly half of those surveyed feared that tariffs could raise the cost of living. These worries, along with the Federal Reserve's cautious stance on interest rate cuts in 2025 due to inflation, contribute to a more uncertain outlook for the US economy.
Canada's Mixed Economic Data Signals Potential Slowdown Ahead
On the CAD front, Canada’s GDP rose by 0.3% in October, which was better than the expected 0.1% decline. This unexpected growth shows some strength in the Canadian economy.
However, the Raw Material Price Index dropped by 0.5% in November, a sharp fall from October's 4.0% increase. This was also much lower than the anticipated 0.6% rise.
Looking ahead, Canada’s economy is expected to shrink slightly by 0.1% in November. This would mark the first monthly contraction of the year, which aligns with the Bank of Canada’s recent warnings about slower growth.
The central bank had also revised its growth forecasts downwards, reflecting concerns about weaker economic conditions.
These mixed data points suggest that while Canada’s economy showed some positive signs, there are still challenges ahead, and growth may slow in the coming months.
USD/CAD – Technical Analysis
The USD/CAD pair remains under modest downward pressure, trading at $1.43750, a slight decrease of 0.01%.
The key pivot point for this pair is at $1.43872, which will be critical in determining the next move. Immediate resistance is located at $1.44635, with subsequent resistance levels at $1.45197 and $1.45741.
On the downside, immediate support is found at $1.43228, followed by $1.42559 and $1.41957.
The 50-day Exponential Moving Average (EMA) is at $1.43833, very close to the current price, signaling a consolidation phase.
The Relative Strength Index (RSI) at 47 suggests neutral market sentiment, with neither bulls nor bears having a clear advantage.
A sustained break above $1.43872 could push the price toward higher resistance levels, whereas a failure to hold above immediate support at $1.43228 may lead to further declines towards the next key support at $1.42559.
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AUD/USD Price Analysis – Dec 24, 2024
Daily Price Outlook
During the European trading session, the AUD/USD pair continued its downward slide, staying under pressure near the 0.6237 level and even hitting an intra-day low of 0.6224.
This drop can largely be attributed to the release of the Reserve Bank of Australia’s (RBA) Meeting Minutes for its December policy meeting.
The minutes suggested that the RBA might start cutting rates in February, which has weighed on the Australian dollar.
On top of that, trading activity remained light ahead of the Christmas holiday, adding to the subdued market mood.
Meanwhile, the US dollar made a strong comeback after a sharp sell-off, as Federal Reserve officials hinted at fewer rate cuts next year due to a slower-than-expected decline in inflation.
The rebound in the US dollar played a key role in supporting the downward trend of the AUD/USD pair.
RBA’s Cautious Stance and Strong US Dollar Weigh on AUD/USD
On the AUD front, the release of the Reserve Bank of Australia's (RBA) Meeting Minutes for December’s policy meeting caused the Australian Dollar to weaken against the US Dollar for the second day in a row.
The minutes revealed that the RBA board is now more confident about inflation compared to earlier meetings but acknowledged ongoing risks.
They stressed the importance of keeping monetary policy tight until there’s more certainty that inflation is under control. Meanwhile, trading activity is expected to remain quiet as markets slow down ahead of the Christmas holiday.
The RBA also mentioned that if upcoming data matches or falls below expectations, it could build confidence in inflation trends and support easing policy. However, stronger-than-expected data may require keeping policy restrictive for a longer period.
Governor Michele Bullock pointed to the strong labor market as a key reason why the RBA has taken a slower approach to monetary easing compared to other countries. This cautious stance reflects the need to balance economic growth while managing inflation effectively.
Therefore, the cautious stance of the RBA and the possibility of prolonged restrictive policies, combined with the US Dollar's strength, has pressured the AUD/USD pair. This led to the Australian Dollar weakening for a second consecutive day, reflecting bearish sentiment.
Mixed US Economic Data and Fed's Cautious Stance Weigh on AUD/USD
On the US front, the broad-based US Dollar remained firm as Federal Reserve (Fed) policymakers signaled fewer interest rate cuts next year due to slowing disinflation.
However, soft US PCE inflation data eased some concerns, presenting a mixed economic outlook. The core PCE inflation, the Fed’s preferred measure, rose 2.8% year-over-year, slightly below expectations of 2.9%. Monthly core inflation increased by 0.1%, less than the 0.2% forecast.
According to the CME FedWatch tool, markets see a 93% chance of the Fed holding interest rates steady in January within the 4.25%–4.50% range. Weak US Durable Goods Orders for November, which fell by 1.1% versus the expected 0.4% drop, further signaled economic challenges.
Meanwhile, US Consumer Confidence declined sharply in December, with the index dropping by 8.1 points to 104.7, reflecting uncertainty about the economy.
Concerns about tariffs and inflationary pressures were highlighted, with households expressing worries over the impact of President-elect Trump’s policies.
Fed officials, including Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee, also hinted at a cautious approach to rate changes, emphasizing the need to monitor inflation closely.
These developments underline the mixed sentiment in the US economy, balancing inflation concerns with weakening economic indicators.
Consequently, the mixed economic outlook in the US, with soft inflation data and weaker consumer confidence, may have limited the US Dollar's strength. However, the Fed's cautious stance on interest rate cuts could still support the US Dollar, putting pressure on the AUD/USD pair.
AUD/USD – Technical Analysis
The AUD/USD pair remains under pressure, trading at $0.62451, a slight decline of 0.03%. The pair is currently hovering near the pivot point of $0.62762, which will play a crucial role in determining the short-term trend.
Immediate resistance is found at $0.63375, with additional resistance levels at $0.63899 and $0.64509. On the downside, immediate support is located at $0.61761, with further critical support at $0.61232 and $0.60746.
The 50-day Exponential Moving Average (EMA) stands at $0.62502, closely aligned with the current price, suggesting consolidation in this range. The Relative Strength Index (RSI) at 49 indicates neutral momentum, with no clear bias toward either direction.
A break above the $0.62762 pivot point could see the pair testing higher resistance levels, while a failure to hold above support may trigger further downside movement, with the next support target at $0.61761.
Traders should be cautious as market volatility remains heightened, particularly during the holiday season with reduced liquidity. A sustained break above $0.62762 could shift the bias towards the upside, while a dip below $0.61761 might lead to further declines toward $0.61232.
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GOLD Price Analysis – Dec 23, 2024
Daily Price Outlook
Gold prices (XAU/USD) have had a quiet start to the week, moving slowly around $2,627, with a trading range between $2,617.59 and $2,629.30. This sluggishness comes as the US Dollar (USD) remains strong, just below its two-year peak, putting pressure on gold.
At the same time, global geopolitical uncertainties, like the ongoing Russia-Ukraine conflict and tensions in the Middle East, continue to drive demand for gold as a safe-haven asset.
The Federal Reserve's recent stance, signaling slower rate cuts in 2025, has kept US Treasury yields high, which dampens gold’s potential for major gains. On top of that, a positive mood in global stock markets is capping any significant rise in gold prices.
As the week progresses, traders are closely watching the release of the Conference Board's Consumer Confidence Index, hoping it will offer more clarity on the gold market’s short-term direction.
US Dollar Weakens on Softer Inflation Data, Supporting Gold Prices Amid Stable Economic Growth
On the US front, the broad-based US Dollar (USD) remain subdued after the release of the Personal Consumption Expenditures (PCE) Price Index data on Friday.
The softer inflation numbers for November have raised expectations that the Federal Reserve (Fed) will continue easing its policies in 2025.
According to the CME FedWatch tool, there is now a more than 90% chance that the Fed will keep interest rates unchanged at 4.25%-4.50% in January.
The core PCE inflation, which is the Fed’s preferred inflation measure, rose by 2.8% year-over-year, slightly below the expected 2.9%.
Monthly core inflation also grew by just 0.1%, less than the anticipated 0.2%, signaling a slowdown in inflationary pressures.
In addition to the PCE data, other economic indicators also had an impact. The US GDP grew by 3.1% in the third quarter, beating expectations and showing stronger-than-expected economic growth.
Initial Jobless Claims fell to 220,000, better than the forecast of 230,000, indicating a stable labor market.
Despite these positive figures, inflation remains a key concern, with the yearly change in the PCE Price Index rising to 2.4%.
The Fed's recent signal to slow down rate cuts in 2025 caused US Treasury yields to reach their highest level in over six months, adding pressure to the USD.
Therefore, the softer inflation data and the Fed’s likely decision to keep rates unchanged support gold prices by reducing the likelihood of aggressive rate hikes.
However, higher Treasury yields and stable economic growth may limit gold’s potential for significant gains.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,630.70, up 0.27% as it consolidates gains following a steady recovery. The price action remains supported by the $2,620.64 pivot point, while the 50 EMA at $2,622.84 provides dynamic support, reinforcing the bullish sentiment.
The immediate resistance lies at $2,642.56, aligning with the first target for short-term buyers. A breakout above this level could propel gold toward the next resistance at $2,658.33, with a further push targeting $2,674.87.
On the downside, immediate support rests at $2,607.53, with additional layers at $2,593.83 and $2,583.93 providing a safety net for bulls.
The RSI at 60 indicates moderate bullish momentum, but the market requires a decisive move above $2,642.56 to maintain the uptrend.
The broader outlook is cautiously optimistic as geopolitical risks and USD fluctuations continue to shape market sentiment.
Traders are eyeing the upcoming resistance zones, as breaking through these levels could spark accelerated gains.
On the flip side, a breach below $2,620.64 may trigger a pullback, with downside risks increasing if prices dip below the $2,607.53 support.
Gold's technical setup favors buying opportunities above $2,626, with a take-profit target of $2,642 and a stop-loss at $2,614.
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GBP/USD Price Analysis – Dec 23, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair started the week on a quiet note, moving in a narrow range just above the mid-1.2500s.
However, the US Dollar had pulled back from a two-year high last Friday, following the release of the Personal Consumption Expenditure (PCE) Price Index for November. The report showed signs of inflation easing, but also highlighted ongoing economic struggles.
However, there are still factors working in favor of the USD. The Federal Reserve's recent hawkish stance continues to support the greenback, as markets anticipate further tightening. This keeps the safe-haven USD in demand, limiting any significant gains for the GBP.
On the other hand, the British Pound faces its own challenges. The Bank of England's (BoE) recent decision to leave interest rates unchanged, along with a more dovish outlook, has created a sense of caution in the markets.
The BoE’s split vote shows a lack of consensus among policymakers, which leaves traders hesitant to make aggressive bullish bets on the GBP.
As a result, the pair's movement remains restrained, with neither the USD nor GBP dominating the direction in the early hours of the week.
USD Remains Supported by Hawkish Fed and Global Tensions, Capping GBP/USD Gains
On the US front, the broad-based US Dollar (USD) eased from its two-year high on Friday after the November Personal Consumption Expenditure (PCE) Price Index hinted at slowing inflation and ongoing economic challenges.
This has kept USD buyers cautious, giving some support to the GBP/USD pair. However, the Federal Reserve’s (Fed) hawkish outlook still favors the USD.
While the Fed recently lowered interest rates by 25 basis points (bps), it signaled a slower pace of rate cuts in 2025.
This, along with strong US Treasury yields and global tensions from the Russia-Ukraine conflict and Middle East unrest, could attract USD buyers and limit the GBP/USD pair's gains.
Traders now await key events for further direction, including the Bank of England’s (BoE) Quarterly Bulletin and the US Consumer Confidence Index later today.
The market mood remains cautious, as the BoE’s less aggressive stance on interest rates and global uncertainties weigh on the British Pound.
Given the mixed signals from both currencies, it’s wise to wait for clear and sustained buying interest before confirming whether the GBP/USD pair has hit a bottom in the short term.
GBP/USD Under Pressure Amid BoE's Dovish Tone and Economic Downgrade
On the GBP front, the British Pound faces pressure after the Bank of England (BoE) decided to keep interest rates unchanged last week.
The decision revealed a split vote among policymakers, with three members of the Monetary Policy Committee (MPC) voting to cut rates. This lack of agreement has added to the uncertainty surrounding the BoE's future policy direction.
Moreover, the central bank downgraded its economic forecast for the final quarter of 2024, signaling potential challenges ahead for the UK economy.
These developments make traders cautious about betting on strong gains for the GBP. The BoE's dovish tone, combined with concerns about slower growth, is likely to limit the upside for the GBP/USD pair.
This cautious outlook keeps the GBP/USD pair under pressure, with further movements likely dependent on broader market factors and key economic data.
GBP/USD – Technical Analysis
GBP/USD is trading at $1.25689, up 0.04%, as the pair consolidates below the $1.26021 pivot point, reflecting a cautious tone.
The pair faces immediate resistance at $1.26620, with higher barriers at $1.27292 and $1.27819, signaling a challenging path for bulls amid a neutral market sentiment.
The 50 EMA at $1.26110 hovers above the current price, adding to downward pressure, while the RSI at 50 highlights indecision in momentum.
On the downside, immediate support lies at $1.25375, with additional levels at $1.24764 and $1.24237, reinforcing a bearish bias if these levels are breached.
The broader trend remains under pressure as the pair struggles to maintain gains above the pivot. The technical setup favors sellers, with the current price action suggesting a potential downside toward the $1.25029 take-profit target, especially if the pair fails to overcome the $1.26021 pivot point.
However, a decisive break above $1.26620 could shift momentum, opening the door to further gains.
Sell-limit orders below $1.25819 are preferred, with a target of $1.25029 and a stop-loss at $1.26415. Key resistance above $1.26620 needs monitoring for a potential reversal.
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