EURUSD
- EUR/USD is consolidating above the 1.1050 level in the early European session on the last trading day of 2023.
- EUR/USD is consolidating above the 1.1050 level in the early European session on the last trading day of 2023.
- Pending Home Sales in the US remained flat in November, falling short of expectations for a 1% increase. While this data did not have a significant impact on the US Dollar or monetary policy expectations, the housing market's performance is closely monitored as a leading indicator.
- Today, the Chicago Purchasing Managers' Index (PMI) is expected to decline to 51 in December from 55.8 in November. A lower-than-expected reading could signal a potential slowdown in economic activity in the Chicago region.
- Additionally, data due today includes Spain's December preliminary Consumer Price Index (CPI). These figures will be closely watched as they provide the first glimpse of inflation in the Eurozone for December. Inflation data is critical for shaping expectations regarding monetary policy decisions by the European Central Bank (ECB).
| SMA (20) | 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 navigating key economic data, with a focus on the US labour market and housing sector. The Chicago PMI is expected to provide insights into regional economic activity. Moreover, Eurozone inflation figures will be pivotal for assessing the inflationary landscape in the Eurozone, influencing expectations around ECB monetary policy.
GBPUSD
- GBP/USD is trading positively, aiming for the 1.2800 level in the European morning on Friday.
- The US Dollar is consolidating its losing streak as the year comes to an end. Divergent policy outlooks between the Federal Reserve (Fed) and the Bank of England (BoE) are undermining the US Dollar. Thin trading conditions are likely to persist as the year concludes.
- The US Dollar's decline could be attributed to downbeat economic data. There was a higher-than-expected increase in Initial Jobless Claims and Pending Home Sales remained flat for November. These data points may have limited the advance of the Dollar. The US Dollar's decline could be attributed to downbeat economic data. There was a higher-than-expected increase in Initial Jobless Claims and Pending Home Sales remained flat for November. These data points may have limited the advance of the Dollar.
- The Chicago Purchasing Managers' Index for December is an additional data point to watch on Friday. This index provides insights into economic conditions in the Chicago area and contributes to the overall assessment of the US economy.
- Pound Sterling seems to have recovered, driven by market expectations that the Bank of England (BoE) may maintain a restrictive monetary policy stance. Notably, inflation in the United Kingdom (UK) is currently the highest among other Group of Seven (G7) economies.
| 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 influenced by the US Dollar's consolidation, driven by divergent central bank policies and recent downbeat economic data. The Chicago PMI will be closely monitored for further insights into the state of the US economy. The recovery of Pound Sterling is underpinned by expectations of a relatively hawkish stance from the Bank of England.
GOLD
- Gold price demonstrates strength as the US Dollar faces challenges amid improved market sentiment.
- Investor risk appetite is on the rise as softer US data reinforces expectations of a dovish stance from the Federal Reserve (Fed) in upcoming policy meetings.
- The US Pending Home Sales Index showed a decline of 5.2% from a year ago, according to monthly data from the National Association of Realtors. Additionally, the US Labor Department reported a rise of 12,000 in new state unemployment benefit claims to 218,000.
- Investors are bracing for end-of-the-year flows and refraining from placing fresh directional bets on gold price. Cautious trading is expected as the market approaches the extended New Year weekend.
- In the day ahead, risk sentiment, the US Dollar's price action, and profit-taking could significantly impact gold price. Traders are likely to adopt a more conservative approach as they move to the sidelines ahead of the extended New Year weekend.
Closing statement: Gold remains robust, driven by a weakened US Dollar and improved market sentiment. The impact of US economic data, especially the decline in Pending Home Sales and the rise in unemployment claims, is contributing to expectations of a dovish Fed. Cautious trading is anticipated as the market approaches the extended New Year weekend, with attention on risk sentiment and potential profit-taking.
CRUDE OIL
- Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $72.00 on Friday.
- Tensions in the Red Sea are starting to fade as logistical operations resume in the area. Earlier this month, major shipping companies suspended the use of the Red Sea and the Suez Canal due to attacks by Yemen's Houthi militant group targeting vessels.
- Data from the American Petroleum Institute (API) weekly report on Wednesday revealed that US crude oil inventories increased by 1.837 million barrels for the week ending December 23, compared to a 0.939 million barrels gain in the previous reading.
- The US Energy Information Administration (EIA) reported that crude inventories fell more than expected last week, dropping by 6.911 million barrels compared to market expectations for a 2.704 million barrels drop.
- Oil traders will closely monitor the Chicago Purchasing Managers' Index (PMI) for December, scheduled for release later on Friday. Amid the holiday season's light trading, risk sentiment is expected to continue influencing WTI price movement.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Rising |
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Closing statement: WTI crude oil is trading at around $72.00, with tensions in the Red Sea easing and logistical operations resuming. The recent API and EIA reports on crude inventories showed mixed data, contributing to market dynamics. Attention now turns to the Chicago PMI for December, and in the holiday season's light trading, risk sentiment is anticipated to play a significant role in influencing WTI prices.
DAX
- On Thursday, hawkish European Central Bank (ECB) commentary countered bets on a Q1 2024 Fed rate cut, impacting DAX-listed stocks.
- ECB Governing Council member Robert Holzmann poured cold water on discussions about rate cuts. Holzmann stated, “Even if the ECB is past an unprecedented series of ten consecutive rate increases, there is also for the year 2024 no guarantee of rate reductions. Monetary policy normalization is already showing its impact on slowing inflation, but it would still be premature to think about rate cuts.”
- On the same day, US jobless claims data reflected a robust US labor market, testing the appetite for riskier assets. Initial jobless claims increased from 206k to 218k in the week ending December 23.
- Later in the European session, Chicago Purchasing Managers' Index (PMI) numbers from the US will garner investor interest. Chicago is the third largest by gross metropolitan product (GMP), following Los Angeles and New York.
- Near-term trends for the DAX remain hinged on ECB commentary and the US economic calendar. Hawkish ECB forward guidance could counter rising bets on a Q1 2024 Fed rate cut.
| SMA (20) | Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: Hawkish comments from ECB Governing Council member Robert Holzmann influenced DAX-listed stocks, countering expectations of a Q1 2024 Fed rate cut. The US jobless claims data reflected a robust labour market, adding to the dynamics. The upcoming focus is on the Chicago PMI, and DAX trends continue to be influenced by ECB commentary and developments in the US economic calendar.