EURUSD
- The EUR/USD is holding slight gains above 1.1100, experiencing a pullback from multi-month highs during European trading on Thursday. The pair's overall trend remains upward.
- The upward momentum in the EUR/USD is supported by the expected dovish stance from the Federal Reserve (Fed) regarding the trajectory of interest rates. The US Dollar Index (DXY) has fallen below 101.00, marking its lowest level in five months.
- Wednesday saw no major reports influencing the market. However, on Thursday, attention is directed towards the US weekly Jobless Claims report, which could have an impact on the currency pair.
- The US Dollar Index (DXY), a measure of the dollar's value against a basket of major currencies, has dipped below 101.00. This suggests broad-based weakness in the US Dollar, contributing to the strength of EUR/USD.
- As 2023 comes to an end, the market is relatively calm, and the subdued performance of the US Dollar continues. Traders are likely to closely watch US employment data in the upcoming week as markets return to normal functioning.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: EUR/USD is currently benefiting from a weakened US Dollar, driven by expectations of a dovish Fed stance. The pair's performance is also influenced by the broader market sentiment, and upcoming US employment data will be crucial for further insights as the new year begins.
GBPUSD
- GBP/USD is recording modest gains above the 1.2800 level during the early European trading hours on Thursday. The pair is holding onto its positive momentum.
- The primary driver behind the positive performance of GBP/USD is the ongoing weakness in the US Dollar. The increased expectations of a dovish shift in the Federal Reserve's stance are contributing to the overall decline in the USD.
- On the other side, the Bank of England (BoE) has indicated that rate cuts are not imminent in the UK. This divergence in central bank stances is influencing the currency pair dynamics.
- The holiday season has led to thin trading conditions, impacting market movements. GBP/USD is likely to be influenced by broader risk sentiment until the New Year.
- Later on Thursday, the market will pay attention to the release of US Initial weekly Jobless Claims, Trade Balance, and November Pending Home Sales. These economic indicators could introduce additional volatility to the currency pair.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Neutral |
Closing statement: GBP/USD is experiencing slight gains amid the prevailing weakness in the US Dollar and the BoE's indication that rate cuts are not imminent. The thin trading conditions associated with the holiday season may contribute to fluctuations, and the upcoming US economic data will be closely monitored for further insights.
GOLD
- Gold prices are advancing, approaching the $2,100 level as the US Dollar continues to show weakness in early European trading on Thursday.
- The ongoing weakness in the US Dollar is a key driver behind the positive momentum in Gold. The Dollar's decline is contributing to the appeal of the precious metal.
- The potential for Federal Reserve rate cuts in Q1 2024 is fostering an improved risk appetite, providing support to Gold. Markets are currently pricing in a high probability of rate cuts starting in March 2024, with significant basis points of cuts expected for the next year.
- Investors are now turning their attention to mid-tier US Jobless Claims data and a seven-year bond auction scheduled for later on Wednesday. Positive outcomes from these events could provide further upside momentum for Gold.
- Traders in the Gold market are exercising caution due to the potential for exaggerated moves amid thin liquidity conditions associated with the pre-New Year period.
Closing statement: Gold prices are on the rise, benefitting from the continued weakness in the US Dollar and improved risk appetite driven by expectations of Fed rate cuts. The focus now shifts to US Jobless Claims data, and cautious trading is advised given the thin liquidity conditions in the pre-New Year period.
CRUDE OIL
- Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $74.00 on Thursday.
- WTI prices are experiencing a recovery, supported by the softer US Dollar (USD). The decline in the USD is providing some support to USD-denominated commodities, including oil.
- Market participants are closely monitoring developments in the Red Sea following a drone attack on an oil tanker. Fears of shipping disruption in the region are contributing to the overall sentiment in the oil market.
- The American Petroleum Institute's (API) weekly report on Wednesday revealed that US crude oil inventories increased by 1.837 million barrels for the week ending December 23. This followed the previous reading of a 0.939 million barrels gain.
- Oil traders are awaiting the release of the EIA Crude Oil Stocks Change report on Thursday. Additionally, key US economic indicators, including Initial weekly Jobless Claims, Trade Balance for November, and Pending Home Sales, are expected to impact oil market dynamics.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: WTI crude oil prices are staging a recovery, supported by the weaker US Dollar and concerns about potential shipping disruptions in the Red Sea. Attention is now on the upcoming EIA Crude Oil Stocks Change report and other US economic indicators, which could influence the oil market.
DAX
- On Wednesday, industrial profit numbers from China had a positive impact on the markets, driving demand for riskier assets. Industrial profits in China increased by 29.5% year-over-year in November.
- Economic indicators from the US on Wednesday raised expectations of a Fed rate cut in Q1 2024. The Richmond Fed Manufacturing Index declined from -5 to -11, while the Services Index fell from 1 to 0 in December.
- Later in the European session, investors are closely watching the US jobless claims data. Softer labor market conditions could support bets on a Q1 2024 Fed rate cut.
- Housing sector data is also in focus as economists view it as a leading indicator for the US economy. Improving conditions in the housing market could support bets on a soft landing for the economy.
- Near-term trends in the DAX are influenced by expectations regarding the timing of rate cuts by the ECB and the Fed. Rising bets on a January Fed rate cut could potentially support a DAX return to the 17,000 handle. However, this is contingent on ongoing support from US economic indicators for a soft landing.
| SMA (20) | Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: The DAX is influenced by both global and regional factors, with China's industrial profits and US economic indicators playing a significant role. The timing of rate cuts by central banks remains a key factor influencing market sentiment and DAX movements.