Market Analysis & Technical Outlook (4-Hour Chart) – December 18, 2024
EUR/USD: Strong Sell
EUR/USD is trading around 1.0515, showing slight upward movement while maintaining its bullish trend since December 12. Market participants are focused on this week’s key events.
European Factors:
- ECB President Christine Lagarde’s speech is scheduled at 10:30 (GMT+2) today, with attention on insights regarding the Eurozone’s economic outlook.
- December Eurozone PMI releases:
- Manufacturing PMI (forecast: 45.0 points).
- Services PMI (forecast: 49.4 points).
- October Eurozone industrial production improved to -1.2% YoY (forecast: -1.9%), indicating stagnation.
US Factors:
- Markets are focusing on the FOMC meeting (December 17–18). A 25bps rate cut to 4.50% is already priced in.
GBP/USD: Sell
GBP/USD is trading near 1.2765, attempting to recover from last week’s sharp decline.
UK Factors:
- October GDP showed a contraction of -0.1% (forecast: +0.1%), raising concerns of a recession.
- PMI releases scheduled for 11:30 (GMT+2):
- Services PMI (forecast: 51.0 points).
- Manufacturing PMI (forecast: 48.1 points).
- The BOE meeting on Thursday at 14:00 (GMT+2) is expected to leave rates unchanged at 4.75%.
US Factors:
- Dollar movement, influenced by FOMC rate cut expectations, may also impact GBP/USD.
NZD/USD: Sell
NZD/USD is recovering, trading near 0.5780.
New Zealand Factors:
- The Business NZ PSI (Services Index) rose from 46.2 to 49.5, still below the neutral 50.0 level.
- Q3 GDP release on Thursday (forecast: -0.4% YoY).
China Factors:
- China’s November retail sales grew by +3.0% YoY (forecast: +4.6%), reflecting a slowdown, indirectly pressuring the NZD.
USD/JPY: Strong Buy
USD/JPY is trading around 153.65, maintaining a stable bullish trend.
Japanese Factors:
- October machinery orders rose by +5.6% YoY (forecast: +0.7%), showing strong results.
- The BOJ meeting on December 19 is expected to keep rates unchanged at 0.25%, but any forward guidance for 2025 could drive yen movements.
US Factors:
- Market focus remains on the FOMC’s expected 25bps rate cut.
XAU/USD: Strong Buy
Gold is trading near 2655.00, slightly declining but holding around December 9 lows.
Gold Price Drivers:
- Expectations of an FOMC rate cut are supporting gold prices.
- Uncertainty surrounding US economic policies under President Trump could boost gold demand.
Key Data Today:
- US December PMI releases:
- Manufacturing PMI (forecast: 49.7 points).
- Services PMI (forecast: 56.1 points).
This Week’s Focus Points
- FOMC Meeting (Dec 17–18): The post-rate cut policy outlook is critical.
- ECB and BOE Meetings: Key policy decisions impacting Eurozone and UK economic sentiment.
- New Zealand GDP: Growth slowdown could influence rate cut expectations.
With significant central bank meetings and economic data on the horizon, markets are expected to react strongly, leading to heightened volatility this week.
