Key Currencies and Technical Analysis (4-Hour Chart) – December 11, 2024
Market Overview
EUR/USD – Strong Sell
EUR/USD is trading near 1.0520 as investors remain cautious ahead of the US inflation data release.
Key Economic Indicators (US, November):
- CPI YoY: +2.7% (previous: +2.6%).
- CPI MoM: +0.3% (previous: +0.2%).
- Core CPI YoY: +3.3%.
- Core CPI MoM: +0.3%.
Outlook:
- Data will influence the Fed’s potential 25bp rate cut at its December 17–18 meeting, currently priced at a 90% probability (CME FedWatch Tool).
- German Inflation Data:
- Monthly CPI: -0.2%.
- Annual CPI: +2.2%.
ECB Meeting (December 14):
- Expected 25bp rate cut to 3.15%.
- ECB President Lagarde’s press conference (17:15 GMT+2) will provide insights into future monetary policy direction.
GBP/USD – Neutral
GBP/USD is trading around 1.2765, holding near post-NFP highs.
Key Economic Indicators:
- US CPI:
- Core CPI YoY: +3.3%; MoM: +0.3%.
- Headline CPI YoY: +2.7%; MoM: +0.3%.
- US Budget Balance (21:00 GMT+2):
- Forecast deficit: -$35.3 billion (previous: -$25.7 billion).
Upcoming UK Data (Friday):
- GDP (October): +0.1% MoM (previous: -0.1%).
- Industrial Production:
- MoM: +0.3% (previous: -0.5%).
- YoY: +0.2% (previous: -1.8%).
AUD/USD – Strong Sell
AUD/USD remains weak near 0.6370, close to its lowest levels since August 5.
RBA Policy Update:
- Rate held at 4.35%.
- Inflation risks are seen as diminishing, with a 70% chance of a February rate cut.
Key Economic Data:
- Australian Employment Report (tomorrow):
- Employment Change: +25,000 (previous: +15,900).
- Unemployment Rate: 4.2% (previous: 4.1%).
USD/JPY – Strong Buy
USD/JPY is trading near 151.55, with slight retracement ahead of the US CPI release.
Japanese Economic Data:
- BSI Large Manufacturers’ Sentiment Index (Q4): +6.3 (previous: +4.5).
- Domestic Corporate Goods Price Index (November): +3.7% YoY (forecast: +3.4%).
Outlook:
The US CPI release and the Fed’s monetary policy stance will likely dictate USD/JPY’s direction.
XAU/USD – Strong Buy
XAU/USD trades near 2690.00, maintaining its highest levels since November 25.
Supportive Factors:
- Global Rate Cut Expectations:
- ECB and SNB are expected to lower rates.
- Fed rate cut probability for December is at 90%.
- Geopolitical Risks:
- Instability in the Middle East following regime changes in Syria.
- China’s Gold Reserves:
- The People’s Bank of China added 160,000 ounces of gold to its reserves in November.
Weekly Overview
This week’s market focus is on critical inflation data and central bank decisions. The US CPI and Fed’s rate expectations remain central themes, influencing EUR/USD, USD/JPY, and gold prices.
Trading Focus:
- Monitor inflation releases and Fed commentary for market shifts.
- Stay alert to ECB and RBA developments for currency-specific trends.
Adopt a cautious but strategic approach to capitalize on key market moves!
