EURUSD
- The EUR/USD pair has sustained a positive bias for the fifth consecutive day on Friday, presently hovering just below the critical 1.1000 psychological level. This marks a two- week high achieved in the prior session.
- The Euro's strength is derived from the supportive stance of the European Central Bank (ECB), which, on Thursday, reiterated the necessity to maintain higher interest rates for an extended period. This affirmation bolsters the confidence of Euro investors.
- ECB President Christine Lagarde provided clear communication, stating that there was no discussion "at all" regarding rate cuts. This clarity contributes to the positive sentiment surrounding the Euro.
- The repeated emphasis on holding interest rates higher for an extended duration continues to provide support to the shared currency, further contributing to its positive performance.
- In contrast, economic data from the United States revealed positive figures. Retail Sales for November increased by 0.3%, exceeding market expectations. Additionally, Initial Jobless Claims for the week ending December 8 rose by 202K, which was also above market expectations.
| SMA (20) | Slightly Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement:The EUR/USD pair's upward momentum is sustained by the ECB's supportive stance and clear communication, despite positive economic data from the United States. The coming week will likely see continued focus on central bank actions and economic indicators for further insights into the EUR/USD trajectory.
GBPUSD
- GBP/USD exhibited a bullish trend, surging to a 10-day high above the key level of 1.2600 on Thursday, reflecting robust buying momentum in the pair.
- The Bank of England (BoE) opted to maintain the benchmark interest rates at a 15- year high of 5.25%. This decision was in line with market expectations and signaled the central bank's commitment to its current policy stance.
- BoE Governor Andrew Bailey emphasized that there was still a considerable distance to cover in the UK economic recovery. He also underscored the BoE's commitment to closely monitoring data and taking appropriate actions to steer inflation back to the 2.0% target.
- The BoE's guidance provided a contrast to the more dovish tone from the Federal Reserve (Fed). This distinction favored the British Pound (GBP) and acted as a positive force driving the GBP/USD pair higher.
- The upcoming focus on Friday centers on growth data. S&P Global is set to release preliminary estimates of its December Purchasing Managers' Index (PMI) for both the United States and the United Kingdom. These figures will be closely watched for insights into economic activity.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD's ascent to a 10-day high was underpinned by the Bank of England's decision to maintain rates and Governor Bailey's comments. The pair's performance remains influenced by central bank dynamics, and upcoming PMI data could provide further cues for its trajectory.
GOLD
- Gold prices exhibited a consolidative pattern during the week, maintaining the gains accrued over the past two days. The precious metal aimed to hold its ground amid evolving market dynamics.
- The US Dollar faced downward pressure as a result of the US Federal Reserve's (Fed) dovish stance. Fed Chair Jerome Powell's affirmation of expectations for interest rate cuts in 2024 contributed to the weakening of the greenback, providing support to gold.
- The Bank of England (BoE) and the European Central Bank (ECB) delivered signals that left room for further policy tightening, emphasizing their commitment to keeping rates 'higher for longer.' This contrasted with the Fed's dovish pivot and had implications for gold's performance.
- The US Dollar found some relief from an unexpected rise in US Retail Sales data and a decline in Jobless Claims. Positive economic indicators provided temporary support to the Dollar.
- The forthcoming focus turns to global Purchasing Managers' Index (PMI) data, which is expected to provide fresh impetus for trading. End-of-the-week flows, and profit- taking are likely to be influenced by this data, especially as the week concludes after heightened volatility driven by central bank actions.
Closing statement: Gold's consolidation amid contrasting central bank signals, along with the Dollar's response to economic data, underscores the intricate balance in the market. Anticipation of global PMI data will likely steer end-of-week trading sentiments, contributing to the ongoing narrative of central bank-driven volatility.
CRUDE OIL
- West Texas Intermediate (WTI) crude oil prices registered their third consecutive session of improvement, driven by multiple factors influencing the energy market.
- The International Energy Agency (IEA) provided a bullish outlook on oil demand for 2024, forecasting a substantial increase of 1.1 million barrels per day (bpd). This positive demand projection contributed to the optimism surrounding crude oil prices.
- The US Dollar Index (DXY) witnessed a decline, nearing four-month lows. The dovish outlook on interest rates by the US Federal Reserve (Fed) contributed to the Dollar's weakness, potentially making oil more affordable for foreign buyers. The inverse relationship between the USD and oil prices played a role in supporting crude oil.
- According to a Reuters survey of economists and analysts, the average expectation for Brent crude in 2024 is $84.43 per barrel. This consensus reflects market sentiments regarding the future trajectory of crude oil prices.
- Positive developments in China's economic data have the potential to bolster crude oil prices. As the largest oil importer globally, any improvements in China's economic landscape typically correlate with increased demand for crude oil.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: WTI crude oil prices experienced a week marked by positive fundamentals, including a bullish outlook on global oil demand, the influence of a weaker US Dollar, and optimistic analyst expectations. The role of China's economic data in shaping future oil demand remained a crucial factor, adding a layer of complexity to the market's dynamics.
DAX
- On Thursday, the European Central Bank (ECB) decided to keep interest rates unchanged at 4.5%. However, the DAX, Germany's leading stock index, faced negative pressure as the ECB avoided discussions on rate cuts, leaving investors uncertain about the central bank's future monetary policy stance.
- Investor attention on Thursday was directed towards US retail sales and initial jobless claims. Better-than-expected numbers in these economic indicators alleviated concerns of a hard economic downturn, providing some relief to the markets.
- On Friday, private sector Purchasing Managers' Index (PMI) data for France, Germany, and the Eurozone will be key focal points. Continued improvement in these indices across the private sector would likely support a positive sentiment among investors, contributing to a stronger appetite for DAX-listed stocks.
- Later in the Friday session, US private sector PMI numbers will also be under consideration. A rise in service sector activity could enhance the appeal of riskier assets, including stocks on the DAX.
- The overall trends for the DAX are likely to hinge on the outcomes of the private sector PMIs. A scenario where there's an increase in service sector activity but easing price pressures could be beneficial for DAX-listed stocks.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement:The DAX faced headwinds following the ECB's decision to maintain unchanged interest rates and the absence of rate cut discussions. However, positive economic indicators, especially regarding retail sales and jobless claims in the US, provided some relief. The upcoming private sector PMIs, both in the Eurozone and the US, are anticipated to significantly influence the direction of the DAX.