Market Analysis and Technical Analysis (4-Hour Chart) – December 17, 2024
EUR/USD – Strong Sell
Current Situation: EUR/USD remains range-bound around the 1.0500 level as investors await the results of the two-day Federal Reserve (FOMC) meeting.
Key Points:
- FOMC Expectations: A 25-basis-point rate cut (adjustment to 4.50%) is priced in with a 95.4% probability (CME FedWatch Tool).
- Eurozone Data:
- December Manufacturing PMI remains unchanged at 45.2.
- Services PMI rose to 51.4, beating expectations, signaling signs of recovery.
- Germany: Manufacturing PMI fell short of expectations (42.5 vs. forecast of 43.8), while Services PMI improved to 51.0.
GBP/USD – Strong Sell
Current Situation: GBP/USD trends downward around 1.2670. Despite stronger-than-expected UK labor market data, a stronger USD weighs on the pair.
Key Points:
- UK Labor Market:
- Average earnings (including bonuses) surged to 5.2% (forecast: 4.6%).
- Unemployment claims increased by only 0.3k (forecast: 28.2k).
- FOMC Expectations: USD dynamics are influenced by the Fed’s anticipated rate cut outlook.
- BOE Meeting: On Thursday, December 19, the Bank of England is expected to hold rates steady at 4.75%.
AUD/USD – Strong Sell
Current Situation: AUD/USD declines near 0.6345, hovering close to year-to-date lows.
Key Points:
- Australian Economic Data:
- Westpac Consumer Sentiment Index: Declined to -2.0% in December (previous: +5.3%).
- December Manufacturing PMI contracted to 48.2 (previous: 49.4).
- FOMC Meeting: Expectations for a 25-basis-point US rate cut continue to pressure AUD/USD.
USD/JPY – Strong Buy
Current Situation: USD/JPY trades around 154.20, showing a lack of clear direction.
Key Points:
- United States: Focus remains on the FOMC meeting and rate cuts. US Services PMI exceeded expectations at 58.5, providing support for the dollar.
- Japan:
- Machinery Orders (YoY): +5.6% (forecast: 0.7%).
- Manufacturing PMI: Improved to 51.4, signaling a positive outlook.
- BOJ: At its December 19 meeting, the Bank of Japan is expected to hold rates steady at 0.25%. Attention remains on hints of future rate hikes.
XAU/USD (Gold) – Buy
Current Situation: XAU/USD shows modest movements around 2655.00.
Key Points:
- FOMC Expectations: A 95.4% likelihood of rate cuts supports gold prices due to lower interest rates.
- US Economic Data:
- Manufacturing PMI: 48.3 (forecast: 49.4).
- Services PMI: 58.5 (forecast: 55.7).
Today’s Focus
- US Retail Sales: Forecast: +0.5%.
- Industrial Production: Forecast: +0.3%.
Future Outlook
- FOMC Meeting: Interest rate announcement and policy outlook expected on December 18.
- BOE & BOJ Meetings: Attention on monetary policy stances of respective central banks.
- Economic Data: US Retail Sales, Australian PMI, and Eurozone inflation data are expected to influence markets.
Summary: Ahead of the FOMC meeting, cautious trading persists across markets. Interest rate trends and macroeconomic indicators remain key drivers of market volatility.
