Olivia

Markets Stocks extended gains for a fourth consecutive session on Tuesday, with the S&P 500 touching the highest level Since January 2022 as Wall Street carefully examined another set of inflation data, seeking clues on when the Federal Reserve might initiate monetary policy easing. Despite the mixed US CPI inflation print, perhaps at the heart of the matter is a keen set of investors who are encouraged by the disinflationary trend and may have found contentment in some of the details of Tuesday’s report, suggesting that the Federal Reserve’s preferred measure of inflation will remain subdued from here on out. Hence, some anticipation may be getting baked into the S&P 500 rally extension of a less vigilant inflationary pushback from Chair Powell, but still pushing back against excessive market front-end rate cut pricing. The market would then intuitively return to the Waller Pivot narrative, where the Fed would then mechanically ease tangentially with the decline in inflation. Which in itself is not a bad outcome for stocks. Oil prices Oil prices experienced a significant decline of more than 3% on Tuesday. This drop followed the U.S. Consumer Price Index (CPI) report, which indicated that inflation remained persistent in November despite… Read More »Powell’s stance – A less vigilant inflationary pushback?

EUR/USD gained traction and rose toward 1.0800 early Tuesday.  The US Dollar struggles to find demand amid retreating US yields. Annual core inflation in the US is forecast to hold steady at 4% in November. Following a bearish start to the week, EUR/USD managed to find a foothold in the American trading hours and closed the day virtually unchanged on Monday. The pair gained traction and advanced toward 1.0800 early Tuesday amid retreating US yields but investors could refrain from betting on further US Dollar (USD) weakness ahead of the highly-anticipated November inflation report. In the absence of high-tier data releases, the relatively upbeat market mood made it difficult for the USD to continue to gather strength late Monday. Meanwhile, the high-yield at the latest 10-year US Treasury note auction came in at 4.29%, down from 4.51% in the previous auction, and caused US T-bond yields to edge lower, putting additional weight on the USD’s shoulders. Later in the day, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) data for November. On a yearly basis, the CPI is forecast to rise 3.1%, at a slightly softer pace than the 3.2% increase recorded in October. The… Read More »EUR/USD Forecast: Euro could find near-term direction after US CPI data

AUD/USD Current Price: 0.6567 A quiet start to a busy week that includes US CPI, FOMC, and Australian jobs. The AUD/USD is consolidating near the 20-DMA. Technical indicators offer no clear signs in the short term. The AUD/USD remains steady around 0.6560 as the week begins, which includes an FOMC meeting and the Australian jobs report. Price action is expected to pick up. In the short-term, the bias is mixed, with the US Dollar Index up but below the recent high of 104.30. Reserve Bank of Australia (RBA) Governor Michele Bullock will speak at the Australian Payment Network Summit in Sydney on Tuesday. In terms of economic data, the Westpac Consumer Confidence report is due, along with the National Australia Bank’s Business Confidence survey. On Thursday, the Australian employment report will be released. The US Dollar Index rose on Monday but remained below last week’s highs. A modest increase in US yields supported the Greenback. However, gains were limited as equity prices on Wall Street were posting gains. On Tuesday, the US Consumer Price Index (CPI) will be released, with a slowdown in the annual rate expected from 3.2% in October to 3.1% in November. These figures are unlikely to… Read More »AUD/USD Forecast: Stable ahead of US CPI and FOMC

A lackluster start to the week but there’s so much to come over the next few days which could determine how markets end the year and start 2024. The US will be front and center this week even as events also unfold elsewhere. The Fed decision on Wednesday is unlikely to be controversial but the forecasts, dot plot and press conference that accompany it may well be. Markets are very bullish in pricing in four interest rate cuts next year, the first likely coming in May, something the FOMC is unlikely to line up behind. The question is how much of a change we’ll see from the September projections and to what extent the committee will push back against the markets. That may well depend on what the CPI report tells us tomorrow. The November inflation reading is expected to fall to 3.1% at the headline level but remain at 4% on a core basis. A setback here following the stronger jobs report on Friday could encourage the FOMC to dig their heels in a little, warning of upside risks and even, the door still being open to further hikes. That would be a very late and sharp pivot or… Read More »All eyes on the central banks

XAU/USD Current price: 1,982.29 US Dollar extends its positive momentum, with XAU/USD trading at fresh December lows. Looming central banks’ decision and the US Consumer Price Index to set the market tone. XAU/USD bearish case became stronger after the pair pierced the $2,000 threshold. Spot Gold extends its slide on Monday, after losing the $2,000 threshold following the release of the United States (US) Nonfarm Payrolls (NFP) report last week. The US dollar surged after a stronger-than-anticipated report, although for the wrong reasons. Market participants did not buy the USD on the back of confidence in the Greenback’s strength but as a safe due to fresh concerns about the future of the monetary policy and how it could affect the economy. The US Federal Reserve (Fed) has left interest rates on hold in its last two meetings, claiming previous actions need time to take effect. But there is a non-spoken reason: higher rates come with an increased risk of an economic setback. Growth in the country has proved resilient, yet policymakers are well aware a soft-landing is around the corner. Inflation has eased sharply from the records achieved in mid-2022, but it is still above the central bank’s 2% goal.… Read More »Gold Price Forecast: XAU/USD poised to extend its slide

EUR/USD Current price: 1.0758 Market participants await a US inflation update and central banks’ announcements. Stock markets trade mixed, limiting demand for the US Dollar. EUR/USD aims south in a quiet start to the week, support at 1.0720. The EUR/USD pair trades uneventfully within familiar levels on Monday as caution reigns ahead of critical first-tier events. Investors await the US Consumer Price Index (CPI) release on Tuesday, with the United States (US) Federal Reserve (Fed) and the European Central Bank (ECB) announcing their monetary policy decisions later in the week. Market participants believe easing inflationary pressures and tepid growth will result in policymakers deciding to maintain interest rates on hold at their last 2023 meetings. The US Dollar is marginally up at the beginning of the week, helped by an uptick in government bond yields, although gains are limited. In the meantime, stock markets trade mixed, with most indexes holding into the green and preventing safe-haven assets from rallying further. Finally, an empty macroeconomic calendar exacerbates range trading ahead of Wall Street’s opening. EUR/USD short-term technical outlook The EUR/USD pair hovers around the 38.2% Fibonacci retracement of the 1.1275/1.0447 slump at 1.0761, with the risk skewed to the downside. The… Read More »EUR/USD Forecast: Pressure mounts ahead of first-tier events

EUR/USD stays on the back foot after closing the previous week in the red. Technical outlook suggests that sellers look to retain control. Investors could refrain from taking large positions ahead of this week’s important events. EUR/USD registered losses for the second consecutive week but managed to stabilize at around 1.0750 early Monday. The pair’s technical outlook shows that the bearish bias stays intact. Investors, however, could refrain from betting on an extended US Dollar (USD) rally ahead of this week’s key macroeconomic data releases and central bank meetings. The upbeat November jobs report from the US helped the USD hold its ground ahead of the weekend on Friday. Nonfarm Payrolls rose by 199,000, more than the market expectation for an increase of 180,000, and the Unemployment Rate edged lower to 3.7% from 3.9%. The benchmark 10-year US Treasury bond yield gained nearly 2% after the data and the USD Index rose above 104.00.  Early Monday, the cautious market stance allows the USD to stay resilient against its rivals. At the time of press, US stock index futures were down between 0.1% and 0.2% on the day. On Tuesday, the Consumer Price Index (CPI) data from the US will be watched closely… Read More »EUR/USD Forecast: Euro could struggle to rebound ahead of key macroeconomic events

Key highlights EUR/USD struggled near 1.1020 and started a fresh decline. It traded below a key bullish trend line with support at 1.0860 on the 4-hour chart. EUR/USD technical analysis Looking at the 4-hour chart, the pair settled below the 1.0880 support, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours). It traded below a key bullish trend line with support at 1.0860 on the same chart. There was a drop below the 61.8% Fib retracement level of the upward move from the 1.0656 swing low to the 1.1017 high. The pair is now consolidating above the 76.4% Fib retracement level of the upward move from the 1.0656 swing low to the 1.1017 high. If there is a downside break below the 1.0740 support, the pair could drop toward the 1.0700 level. The next major support is 1.0650, below which the bears might take control. On the upside, immediate resistance is near the 1.0820 level. The next key resistance is near the 1.0880 level. The main resistance is near 1.0920. A close above the 1.0920 zone could open the doors for more upsides. The next stop for the bulls might be 1.1000.

Markets As we approach the end of the year, this week holds particular significance for macro observers. The three major central banks, often referred to as the “Big 3” – the Federal Reserve, the European Central Bank (ECB), and the Bank of England (BoE) – are all scheduled to convene. The November Consumer Price Index (CPI) report in the United States also stands out as one of the final top-tier economic releases from the world’s largest economy. But as usual, most of the market attention bears down on the Federal Reserve meeting, where this time around, Jerome Powell is expected to face questions regarding the timeline for potential insurance cuts. Simultaneously, Christine Lagarde of the ECB may aim to temper speculation about aggressive rate cuts, with some speculating on cuts beginning as early as March or April. In the Eurozone, the notable speed at which inflation has receded has drawn the FX community’s attention, where EURO bears are prowling once again. Even Isabel Schnabel, not known for her dovish views, acknowledged as much about the falls in inflation. The precarious state of the European economy, particularly with Germany facing significant challenges, adds another layer of caution to the current economic… Read More »Central stage: The big three central banks in focus

Gold price is back under the $2,000 level, as sellers flex their muscles early Monday. US Dollar cheers a cautious mood, geopolitical risks, despite sluggish US Treasury bond yields. Gold price looks south, as the daily RSI flipped bearish after Friday’s breakdown. Gold price is testing a 10-day low of $1,995 set on Friday, seemingly vulnerable early Monday, as the Big Central Banks week kicks off. The United States Dollar (USD) is clinging to its recovery gains amid a cautious market environment and steady US Treasury bond yields. Gold price looks to US inflation data after Nonfarm Payrolls beat Investors trade with caution at the start of the week that comprises key event risks for Gold price, including the US Consumer Price Index (CPI) inflation data and the Federal Reserve (Fed) interest rate decision and the updated projections. The upcoming US events are critical to the market’s repricing of the Fed’s interest rate expectations next year, especially after Friday’s upbeat US Nonfarm Payrolls data helped dial back Fed rate cut expectations for March. The latest US labor market report showed that the economy added 199K jobs in November, as against a 150K increase in October and above expectations of +180K.… Read More »Gold Price Forecast: XAU/USD sellers set to extend control, as the Big week kicks off