2023-12-25 06:00

Market Week Ahead: Gold Pops, US Dollar Drops, GBP/USD and EIR/USD Rally The US dollar continues its move as traders price in an aggressive series of rate cuts next year. US Treasury yields are falling, leaving the US dollar at risk against a range of other currencies. Thursday’s US GDP figures missed expectations, as did Friday’s core PCE readings. Both of these releases underpinned the US dollar move lower. US Q3 GDP Revised Lower Dragging the Dollar Index Along, Gold Rises US PCE Price Index Declines Adding Further Pressure on the DXY as Gold Rises to $2,070/oz. US Dollar Index with Bearish Pennant Formation Gold picked up after both US data releases and touched $2,070/oz. on Friday before giving back some gains. A weaker US dollar and lower US Treasury yields boost gold’s allure and a fresh attempt at the December 4th spike high at $2,147/oz. is on the cards in early 2024. Retail trader data shows 59.65% of traders are net-long with the ratio of traders long to short at 1.48 to 1.The number of traders net-long is 6.22% lower than yesterday and 1.59% higher than last week, while the number of traders net-short is 2.46% higher than yesterday and 5.68% higher than last week. See what daily and weekly sentiment changes mean for gold’s outlook. US equity markets continue to ride the risk-on move and ended Friday a fraction below recent multi-year highs. Sentiment remains positive in the equity space and a fresh push higher by arrange of indices is seen when trading return at the start of January. Chart of the Week – 2-Year Gilt Yields – Good News for UK Mortgages Technical and Fundamental Forecasts – w/c December 25th British Pound Forecast: GBP/USD Pushing Higher Despite Growing Rate Cut Calls Global government bond yields are competing in a race to the bottom as central bankers prime the markets for a series of interest rate cuts in 2024. Euro Weekly Forecast: EUR/USD, EUR/JPY Face a Slow Week in the Absence of Data and Thin Liquidity EUR/USD breached the psychological 1.1000 level before the weekend, but thoughts of further gains may not materialize until the New Year is in swing. Gold Weekly Forecast: XAU/USD Propelled by Softer US Inflation Outlook Gold prices extend their upside rally ahead of the last trading week of 2023 which isn’t expected to provide too much in terms of volatility. XAU/USD looks to hold above $2050. US Dollar on Thin Ice, Setups on EUR/USD, USD/JPY, GBP/USD for Final Days of 2023 This article zooms in on the technical outlook for EUR/USD, USD/JPY, and GBP/USD, analyzing essential price thresholds to monitor in the final trading sessions of 2023. Learn How to Trade Forex with DailyFX https://www.dailyfx.com/news/market-week-ahead-gold-pops-us-dollar-drops-gbp-usd-and-eur-usd-rally-20231225.html

2023-12-24 08:00

US DOLLAR FORECAST – EUR/USD, USD/JPY, GBP/USD The U.S. dollar sinks to its lowest level since July, with the DXY index closing the week at 101.70 No major events are expected in the week ahead, but that does not mean that volatility will be low, as thin liquidity conditions could amplify market moves This article zooms in on the technical outlook for EUR/USD, USD/JPY, and GBP/USD, analyzing essential price thresholds to monitor in the final trading sessions of 2023 Most Read: US Dollar in Freefall Heading into 2024. What Now for EUR/USD, GBP/USD, Gold? The U.S. dollar, as measured by the DXY index, dropped for the second consecutive week, closing at its lowest level since late July (101.70) in a low-volume environment ahead of the Christmas festivities and the final trading days of 2023. Taking recent losses into account, the DXY index has fallen by about 4.21% in the fourth quarter and by roughly 1.75% in December, pressured by the significant pullback in government bond yields, which have corrected sharply lower from their cycle’s highs established in late October. The Fed’s pivot has reinforced ongoing market trends, exacerbating the downward shift in the Treasury curve and the greenback’s retreat. To elaborate, the FOMC adopted a dovish position at its last meeting, admitting that it had begun talks of rate cuts and signaling 75 basis points of easing in 2024. The following chart shows the magnitude of the shift in the Treasury curve over the last two months or so. US TREASURY CURVE DOWNWARD SHIFT Source: TradingView Looking ahead to the last week of 2023, there are no impactful releases on the calendar that might substantially alter current trends. This could result in the consolidation of recent moves, namely the weakening of the U.S. dollar and falling yields. Nevertheless, the absence of high-impact events on the calendar doesn’t guarantee low volatility and steady markets. Reduced liquidity conditions, characteristic of the holiday period, can sometimes amplify price swings, as seemingly routine or moderate-sized trades can upset the delicate balance between supply and demand, with few traders on their desks to absorb buy and sell orders. Therefore, caution is strongly advised. Refine your trading skills and stay one step ahead. Obtain the EUR/USD forecast for a comprehensive breakdown of the pair’s fundamental and technical outlook! EUR/USD TECHNICAL ANALYSIS Following recent gains, the EUR/USD now confronts a pivotal resistance zone between 1.1000 and 1.1025. If this ceiling is taken out decisively in the coming days, we could see a rally towards 1.1085. On further strength, the focus shifts to 1.1140, which corresponds to the upper limit of a rising channel in play since September. On the flip side, if buyers’ efforts to drive prices higher fail and ultimately result in a downturn off current levels, initial support becomes visible at 1.0830, near the 200-day simple moving average. The pair is likely to bottom out in this area before resuming its advance, but in the event of a breakdown, a slump towards 1.0770 could be in the cards. EUR/USD TECHNICAL CHART EUR/USD Chart Created Using TradingView USD/JPY TECHNICAL ANALYSIS USD/JPY ticked up on Friday but failed to reclaim its 200-day simple moving average. If the pair remains below this indicator in the coming days, selling pressure could start building momentum, setting the stage for an eventual decline towards the December lows at 140.95. This floor must be protected at all costs; failure to do so could spark a retracement towards trendline support at 139.50. Conversely, if buyers regain the upper hand and propel USD/JPY above its 200-day SMA, resistance appears at 144.80. Surmounting this obstacle will prove challenging for the bullish camp, but a successful breakout could create the right conditions for an ascent toward the 146.00 handle. A continued display of strength could embolden the bulls to aim for 147.20. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView Want to understand how retail positioning can impact GBP/USD’s journey in the near term? Request our sentiment guide to discover the effect of crowd behavior on FX market trends! GBP/USD TECHNICAL ANALYSIS GBP/USD inched up heading into the weekend but hit a roadblock at cluster resistance stretching from 1.2727 to1.2769, where a crucial Fibonacci level converges with a downtrend line extended from the 2023 peak. Reinforcing bullish momentum requires clearing this technical hurdle; with a successful breakout likely paving the way for a move towards 1.2800, followed by 1.3000. On the other hand, if sellers stage a comeback and initiate a bearish reversal, trendline support is located around the 1.2600 area. This dynamic floor may offer stability during a pullback, but a push below it could usher in a retest of the 200-day simple moving average hovering slightly above the 1.2500 handle. Further weakness could redirect attention to 1.2455. GBP/USD TECHNICAL CHART GBP/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-on-thin-ice-setups-on-eur-usd-usd-jpy-gbp-usd-for-final-days-of-2023-20231224.html

2023-12-23 19:58

GOLD OUTLOOK & ANALYSIS Core PCE data keeps pressure on USD as gold soars. Jobless claims data in focus next week. Can gold bulls hold on above $2050? XAU/USD FUNDAMENTAL FORECAST Gold prices finally breached the $2050 level after threatening since mid-December after US PCE deflator readings missed forecasts. The core metric (Fed’s preferred inflation gauge) dropped to levels last seen in April 2021 and the first negative MoM print in over 3 years. Implied Fed funds futures below now prices in almost 160bps of cumulative rate cuts in 2024 with the first cut becoming more convincing in Q1. That being said, Durable goods orders and Michigan consumer sentiment have improved significantly and shows the resilience of the US economy in the current restrictive monetary policy environment. Jobless claims data continues to resist doves and will be closely monitored next week. IMPLIED FED FUNDS FUTURES Source: Refinitiv Source: DailyFX TECHNICAL ANALYSIS GOLD PRICE DAILY CHART Chart prepared by Warren Venketas, TradingView The daily XAU/USD chart above sees bulls looking to retest the overbought zone on the Relative Strength Index (RSI). As mentioned above, with minimal volatility expected over the coming week, prices may remain around current levels. Resistance levels: 2150.00 2081.82 Support levels: 2048.79 2000.00 GOLD IG CLIENT SENTIMENT: BULLISH IGCS shows retail traders are currently net LONG on GOLD, with 60% of traders currently holding long positions. https://www.dailyfx.com/news/forex-gold-weekly-forecast-xau-usd-propelled-by-softer-us-inflation-outlook-wv-20231223.html

2023-12-22 17:25

US DOLLAR OUTLOOK– EUR/USD, GBP/USD, GOLD PRICES The U.S. dollar, as measured by the DXY index, falls to its weakest point in nearly five months With U.S. bond yields on a downward trajectory and market exuberance on full display on Wall Street, further losses could be in stored for the greenback heading into the last week of 2023 This article examines the technical profile for EUR/USD, GBP/USD and gold, analyzing major price thresholds that could be relevant for the retail crowd Most Read: US Dollar Sinks, Holds on For Dear Life, Setups on Gold, EUR/USD, GBP/USD The U.S. dollar, as measured by the DXY index, softened on Friday, hitting its weakest level in nearly five months at one point during the regular U.S. trading session, following encouraging data on consumer prices. For context, November core PCE, the Fed’s favorite inflation gauge, clocked in at 0.1% m-o-m, bringing the annual rate to 3.2% from 3.4%, one-tenth of a percent below consensus estimates - a sign that the trend continues to move in the right direction. US ECONOMIC DATA Factoring in the latest losses, the DXY index has fallen 4.1% in the fourth quarter and 1.8% in December, driven by the slump in government bond yields from the cycle’s highs. Focusing on more recent price action, the Fed’s pivot last week has been the main source of U.S. dollar weakness over the past few days. Although the FOMC maintained the status quo at its last monetary policy meeting of the year, it admitted that it has begun to discuss rate cuts and signaled that it would slash borrowing costs several times by 2024. The U.S. central bank’s dovish stance, which caught many investors off guard, has sparked a major downward correction in Treasury rates across the curve, pushing the 2-year note below 4.35% at some point this week - a notable retreat from its peak of 5.25% less than two months ago. The 10-year yield has also plummeted, trading beneath 3.9% on Friday after almost topping 5% in late October. With U.S. yields skewed to the downside and market exuberance on full display on Wall Street, the U.S. dollar could deepen its near-term retracement. This could result in further upward momentum for gold, EUR/USD, and GBP/USD leading up to 2024, yet caution is warranted, with certain markets approaching potential overbought levels. How long will the U.S. dollar’s downward correction last? Get all the answers in our quarterly outlook! EUR/USD TECHNICAL ANALYSIS After recent gains, EUR/USD has arrived at the doorsteps of an important resistance that stretches from 1.1000 to 1.1025. If buyers can break through this ceiling in the near term, there's potential for an upward thrust toward 1.1085. Further strength might shift attention to 1.1140, which represents the upper boundary of an ascending channel in play since September. On the other hand, if the pair gets rejected from technical resistance and reverses to the downside, primary support appears near 1.0830, around the 200-day simple moving average. This area might provide stability during a pullback before a turnaround, but a decisive drop below it could be ominous, potentially exposing channel support at 1.0770. Stay ahead of the curve and improve your trading prowess! Request the EUR/USD forecast for a comprehensive analysis of the pair’s underlying bias EUR/USD TECHNICAL CHART EUR/USD Chart Created Using TradingView Interested in learning how retail positioning can shape GBP/USD’s path? Our sentiment guide explains the role of crowd mentality in FX market dynamics. Get the free guide now! GBP/USD TECHNICAL ANALYSIS GBP/USD accelerated higher heading into the weekend, threatening to break above cluster resistance, which spans from 1.2727 to 1.2760, where a key Fibonacci threshold aligns with a downtrend line extended off the 2023 peak. Whether buyers will be able to muster the strength to push prices beyond this barrier remains to be seen, but in the event of a breakout, all eyes will be on 1.2840, followed by 1.3000. Conversely, if sellers mount a resurgence and trigger a selloff during the last week of the year, the first defensive line against a pullback lies at 1.2600. Drawing from recent historical patterns, this floor might ward off a bearish assault, but a breach could send cable reeling towards the 200-day simple moving average near 1.2500. On further losses, the focus would shift to 1.2455. GBP/USD TECHNICAL CHART GBP/USD Chart Created Using TradingView GOLD PRICE TECHNICAL ANALYSIS Gold pushed past resistance on Friday, climbing above the $2,050 level but halted before breaching the $2,070-$2,075 threshold. Technical historical cues suggest XAU/USD could be rejected lower from this region, but a clean and clear breakout might invigorate bullish sentiment, enticing new buyers into the market and setting the stage for a retest of the all-time high at $2,150. On the flip side, if buyers start heading for the exits and prices begin to trend to the downside, initial support appears at $2,050, followed by $2,010. Maintaining this last floor is vital for the bulls; a failure might revive bearish momentum, creating conditions for a drop towards $1,990. Below this area, the spotlight could be on $1,975. GOLD PRICE TECHNICAL CHART Gold Price Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-in-freefall-heading-into-2024-what-now-for-eur-usd-gbp-usd-gold-20231222.html

2023-12-22 14:02

US Core PCE Key Points: Core PCE Price Index YoY(NOV) Actual 3.2% Vs 3.5% Previous. PCE Price Index YoY(NOV) Actual 2.6% Vs 2.9% Previous (Revised Down). The Data Today Will Only Further Fuel the Fire Regarding Rate Cuts in 2024. To Learn More AboutPrice Action,Chart PatternsandMoving Averages, Check out theDailyFX Education Section. MOST READ: USD/JPY Price Forecast: USD/JPY May Struggle to Find Acceptance Below the 142.00 mark The PCE prices MoM declined in November coming in at -0.1%following last month’s flat reading. The COREPCE price index MoMcame in at 0.1% down from the 0.2% print from last month in what will be a welcome print for the US Federal Reserve. The annual CORE PCE rate cooled to 3.2% from 3.5%, afresh low since mid-2021. Meanwhile, annual core PCE inflation which excludes food and energy, slowed to 3.5% from 3.7%, a fresh low since mid-2021. Meanwhile, monthly core PCE inflation which excludes food and energy and is preferred Fed inflation measure, was steady at 0.1%, after a downwardly revised reading in October. Personal incomeincreased $81.6 billion (0.4 percent at a monthly rate) in November, according to estimates released today by the Bureau of Economic Analysis From the preceding month, thePCE price indexfor November decreased 0.1 percent. Prices for goods decreased 0.7 percent and prices for services increased 0.2 percent. Food prices decreased 0.1 percent and energy prices decreased 2.7 percent. Excluding food and energy, the PCE price index increased 0.1 percent. Source: US Bureau of Economic Analysis IMPLICATIONS FOR THE US ECONOMY The US GDP data added a further feather in the ca for market participants punting for 150bps of rate cuts in 2024. Today’s data will only add fuel to that fire as the PCE inflation remains the Fed's preferred inflation metric. The November figures showed again inflationary pressures continue to moderate at a slow pace. The Federal Reserve predicts PCE inflation to be 2.8%, and core PCE inflation at 3.2% in 2023, both decreasing to 2.4% in the following year. MARKET REACTION Following the data release the dollar index extended its slide with Gold proving to be a beneficiary. Gold prices spiked to an immediate high around the $2066-$2068/OZ area before some pullback. Earlier in the week I had discussed how a potential breakout may require a catalyst and US data over the last two days have finally provided a shot in the arm. Immediate resistance above the $2068 area rests in the $1978-$1983 area and this could prove a sticky point if we do arrive there later today. Key Levels to Keep an Eye On: Resistance levels: 2078 2100 2125 Support levels: 2050 2041 2030 Gold (XAU/USD) Daily Chart- December 22, 2023 Source: TradingView, prepared by Zain Vawda https://www.dailyfx.com/news/us-pce-price-index-declines-adding-further-pressure-on-the-dxy-as-gold-rises-to-2070-oz-20231222.html

2023-12-22 12:00

EUR/USD Forecast - Prices, Charts, and Analysis EUR/USD back above 1.1000. US core PCE is the last data event of the year. Learn how to trade the most active fx-pair with our complimentary guide Most Read: US Dollar (DXY) Latest: Markets Ignore Fed Rate Pushback, GBP/USD and EUR/USD The Euro continues this week’s move higher against a weakening US dollar and is touching levels last seen over four months ago. The single currency is higher against a range of currencies this week as markets pare back elevated rate cut expectations. In comparison, the US dollar keeps moving lower with the US dollar index back at levels last seen at the end of July. US Treasury yields are also pressing against multi-month lows as traders front-run a series of US rate cuts next year. According to the latest CME predictions, the Fed is set to cut rates by 25 basis points at seven FOMC meetings next year. US Dollar Index Daily Chart with Bearish Pennant Breakout Later today the November US core PCE data will be released, the last heavyweight data event before the market closes down for the festive break. Core PCE y/y is seen falling from 3.5% to 3.3%. A reading below forecast could see the US dollar tumble further. The daily EUR/USD chart retains a positive outlook and may test the 1.1075-1.1095 area when the markets return back to normal at the start of next year. All three simple moving averages are supportive and while the CCI indicator suggests the pair are overbought, the reading is not in extreme territory yet. A continuation of the recent multi-week series of higher lows and higher highs looks likely. EUR/USD Daily Chart Chart Using TradingView IG retail trader data shows 34.53% of traders are net-long with the ratio of traders short to long at 1.90 to 1.The number of traders net-long is 16.38% lower than yesterday and 0.80% lower from last week, while the number of traders net-short is 18.51% higher than yesterday and 10.53% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise. What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/euro-eur-posts-a-fresh-multi-month-high-ahead-of-us-inflation-report-20231222.html