ATFX Market Outlook 13th December 2024

ATFX Market Outlook 13th December 2024

Gold Test Peaks: Market Awaits Three Major Central Bank Rate Cut Decision Next Week

Opinion Today:

U.S. producer prices rose the most in five months in November, but service sector inflation slowed. After an unexpected rise in initial jobless claims last week, traders estimated that the probability of the Federal Reserve cutting interest rates next week was about 97%. U.S. stocks retreated on Thursday as investors took stock of key economic indicators ahead of next week's Federal Reserve meeting.

The Dow extended lost 0.53%, the S&P 500 fell 0.54%, and the Nasdaq lost 0.66% after reaching a high. The U.S. dollar index continued to rise, once breaking through the 107 mark and rising 0.375% to 106.95 at the end of the day; the euro fell 0.2% against the U.S. dollar at the end of New York, at 1.0473; the U.S. dollar rose 0.11% against the Japanese yen to 152.61; and the pound fell 0.6% against the U.S. dollar to 1.2674. 

Gold prices fell more than 1% as investors took profits after briefly hitting a five-week high early in the session and closed positions ahead of next week's Federal Reserve meeting. Spot gold lost 1.2% at $2,684.15 per ounce. Oil prices edged lower, weighed down by forecasts of sufficient supply in the oil market but supported by rising expectations for an interest rate cut by the Federal Reserve. U.S. crude oil futures fell $0.27, or 0.38%, to $70.02.

After the recent decisions by the Swiss National Bank (SNB) and the European Central Bank (ECB), market sentiment has become more optimistic. Investors project the Eurozone's industrial output to decline by -0.1% for October, an improvement from the previous -2% decline. If this forecast holds, it could ease pressure on the ECB and encourage buying the euro and Swiss franc, potentially boosting the British pound (GBP). Investors are also eyeing three significant central bank decisions next week.

Key Data:

12:30 JP Industrial Production OCT ** 

15:00 GB Trade Balance OCT ** 

18:00 EU Industrial Production OCT ** 

21:30 US Export & Import Prices NOV ** 

Key Data and Events Ahead Next Week:

FOMC, BoJ and BoE Interest Rate Decision 

US, UK and Canada Retail Sales NOV 

Canada, UK, Eurozone and Japan CPI NOV  

US Core PCE Price Index NOV

EUR/USD

1.0503/1.0527 Resistance1.0454/1.0423 Support

The ECB cut interest rates 25 basis points on Thursday and hinted at the possibility of further reductions due to a risky economic outlook. It also removed the reference to maintaining restrictive interest rates, suggesting more policy easing may follow. Consequently, the euro faced a five-day losing streak against the U.S. dollar, hitting its lowest level this month. We're watching for signs that the short-term downward pressure is easing while remaining cautious of support levels below 1.0450.

GBP/USD

1.2734/1.2774 Resistance1.2609/1.2571 Support

The euro's influence caused the GBP/USD pair to drop sharply yesterday, marking its largest drop in two weeks. It encountered resistance at last week's high and has fallen below the 10-day moving average. Currently, it is trying to hold the 20-day moving average for support. Watch the 1.2600 range; a failure to maintain this level may lead to further declines.

USD/JPY

153.23/153.60 Resistance152.34/151.96 Support

The USD/JPY pair has risen for four consecutive days and reached a new high not seen since November 27. With the 20-day moving average now acting as support at 152.20, investors should watch for further movement toward 153 or higher. The market is awaiting the Bank of Japan's decision on interest rates next week, which could temporarily limit further gains despite a low hike probability.

USD/CAD

1.4255/1.4278 Resistance1.4177/1.4148 Support

The US dollar experienced its largest gain against the Canadian dollar this week, reaching a new high since April 2020 as it crossed the 1.4200 mark. Watch for resistance at the previous high of 1.4265, as the pair may adjust before breaking through, and closely monitor the trendline resistance from the late November highs.

U.S Crude Oil Futures (January)

70.46/70.87 Resistance69.54/69.12 Support

Crude oil prices dipped slightly on Thursday due to forecasts of ample supply, falling to $68.76 before recovering some losses. Currently, prices are around $70, which is crucial for maintaining bullish interest. A failure to hold this level may lead to a test of moving average support near $69.

Spot Gold

2700/2713 Resistance2670/2656 SupportSpot Silver31.37/31.58 Resistance30.72/30.45 Support

Recent U.S. data indicates that the Federal Reserve will likely cut interest rates by 25 basis points next week. Meanwhile, spot gold has dropped below $2,700 due to profit-taking and a rising U.S. dollar, approaching $2,680. Notably, the $2,675 mark has served as support for two days, so watch for a potential short-term rebound.

US30

44254/44481 Resistance43713/43532 Support

All three major U.S. stock indexes closed lower on Thursday, with the Dow dropping for the sixth consecutive day to its lowest level since November 22. It's moving further from its 20-day moving average, with resistance near 44260. Support is expected around 43,700.

NAS100

21818/21919 Resistance21515/21386 Support

The Nasdaq dropped from its historic high on Thursday as some investors took profits ahead of the Federal Reserve's upcoming policy meeting. However, low overnight volatility helped contain the decline. A rebound is still possible, but watching for rising trendline resistance since early November is essential.

BTC (Bitcoin)

101943/103656 Resistance97868/96502 Support

On Thursday, Bitcoin (BTC) rebounded to $102,549, driven by optimism over potential Federal Reserve interest-rate cuts. Recent data showed a 2.7% annual inflation rate, leading traders to expect a 99% chance of a quarter-point rate cut at the Fed's next meeting. On the technical side, Bitcoin traded below $100K in Friday's Asia trading session. If it can hold the $97K support level, it could retest above $100K and test a new high.

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