Forex Signals Brief December 9: More Rate Cuts from SNB and ECB to Come This Week
Traders will be focused on the RBA, SNB, and ECB meetings this week, but the US CPI inflation report will also attract attention on Wednesday and add to the volatility.
Last week the attention was on the employment data from the US, which leaned on the softy side, consolidating a 25 bps FED rate cut this month, as FOMC members confirmed. The ISM services activity also took a dive, helping to keep the USD on the back foot, until Friday, when the NFP jobs report jumped above expectations, giving the USD a boost before the weekend.
The AUD broke below the range last week after a weak GDP reading from Australia for Q3, however all commodity dollars ended the week down. Crude Oil also closed the week at the bottom of the range above $67 after climbing above $70 early in the week, but then reversing lower despite the OPEC cartel postponing the output hike further.
This Week’s Market Expectations
Tomorrow the Reserve Bank of Australia will be the fist of the major central banks to hold its meeting this week. Although markets are not expecting a move from them yet, considering the chair Bullock recent rhetoric, they might offer some volatility for AUD pairs, if they signal a dovish move in the statement.
This Week’s Forex Events
Monday
- China CPI: Inflation data to gauge consumer price trends in China, crucial for understanding domestic demand and potential global spillovers.
Tuesday
- RBA Policy Decision: Focus on interest rate guidance amid slowing growth and inflationary pressures in Australia.
Wednesday
- Japan PPI: Data on producer prices, critical for assessing inflation trends in Japan’s industrial sector.
- US CPI: Inflation data likely to influence the Federal Reserve’s policy trajectory.
- BoC Policy Decision: Decision from the Bank of Canada on interest rates, with a focus on balancing inflation control and economic growth.
Thursday
- Australia Labour Market Report: Employment data, crucial for assessing the health of the Australian economy and its labor market dynamics.
- SNB Policy Decision: Swiss National Bank’s rate decision, with implications for CHF stability and inflation management.
- ECB Policy Decision: European Central Bank’s stance on interest rates amidst softening growth and stubborn inflation.
- US PPI: Producer Price Index data to evaluate wholesale inflation trends.
- US Jobless Claims: Weekly data on initial unemployment claims, an indicator of labor market health.
Friday
- UK GDP: Data on the UK’s economic growth, offering insights into recovery momentum and recession risks.
Last week the USD was on the retreat, but so were the commodity dollars, so we remained short on NZD/USD and AUD/USD. while being long on USD/CAD, with several long term signals in these forex pairs, all of which closed in profit. in total, we opened 20 trading signals, ending the week with 13 winning forex signals and 7 losing ones.
Gold Continues the Consolidation Between MAs
Gold prices dropped sharply by more than $250 amid strong downward pressure in the commodities sector. This decline was accompanied by a strengthening U.S. dollar, which gained momentum after comments by former President Donald Trump. The stronger dollar, combined with reduced global demand for gold, led to a fall to $2,632 per ounce for gold. But the 100 SMA (green) held as support and XAU rebounded higher. Although it remains stuck in a tight range between 2 MAs now.
XAU/USD – Daily Chart
The 200 SMA Turns Into Support for GBP/USD
In the forex market, the GBP/USD pair faced notable volatility last month, briefly dipping below the critical 1.25 level amid persistent selling pressure. However, the pair recovered strongly, gaining 2.5 cents to end the week at 1.2749. Despite this recovery, the 200-day Simple Moving Average (SMA) acted as strong resistance, rejecting further upward movement at that level. Fresh buying momentum today pushed the pair above the 200-day SMA, which has ow turned into support, signaling a potential shift in market sentiment.
GBP/USD – Daily Chart
Cryptocurrency Update
Bitcoin Consolidating Around 100K
In the cryptocurrency market, Bitcoin made history by breaking the $100,000 barrier for the first time. Closing above $102,000 during early European trading, Bitcoin’s bullish momentum pointed to the start of a robust bull market. Former President Trump’s cryptic comment, “You’re welcome,” in response to Bitcoin’s milestone, was interpreted by many as an implicit endorsement, providing a psychological boost to the market. Analysts are now projecting ambitious price targets of $120,000, $150,000, or even $200,000 as Bitcoin continues to surge.
BTC/USD – Daily chart
Ethereum Reaches $4,000
Ethereum mirrored Bitcoin’s volatility, initially falling below $3,000 before staging a strong recovery to trade above $3,500 and approach $4,000. Ethereum’s ability to surpass its 50-day SMA highlights the overall strength of the cryptocurrency market. This rally reflects growing investor confidence in digital assets, driven by increasing adoption and optimism for future price gains.
ETH/USD – Daily chart
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