The USD prepares to end its third week in the reds

In the FX market, the USD seems about to end the week in the reds for a third time in a row in a sign of wider weakness. The market’s expectations for the Fed to continue easing its monetary policy in the coming year, albeit at a slower pace, tend to weigh on the USD. Characteristically, the market currently and as per Fed Funds Futures seems to expect the bank to cut rates twice in the coming year, despite Fed policymakers signalling with their new dot plot only one rate cut in 2026. Please note that today, a number of Fed policymakers are scheduled to make statements and should they highlight the scenario of an extended pause in the rate-cutting cycle, or even the need for rates to remain unchanged, we may see the USD getting some support. Especially, we note Chicago Fed President Goolsbee, who in the Fed’s last meeting opposed the decision to cut rates and was in favour of the bank remaining on hold. It should be noted that the continuous weakening of the USD allowed for gold’s price to gain some ground after a week and a half of indecisiveness yet in the metal’s market, we highlight the rally of silver’s price, which seems to be more promising, albeit may have reached overbought levels and may be ripe for a correction lower. AS for US stock markets, the slump of Oracle’s share price was a painful reminder of the scenario of a possible bubble existing in the US equity markets, especially among tech companies, as investments in AI may take longer to boost profitability. The market worries are intensified as the tech sector is highly leveraged, increasing the risk factor. Back in the FX market, we note the unexpected drop of the UK’s GDP rate into the negatives for October, which tends to darken the outlook for the UK economy and could weigh on the sterling.

AUD/USD remains just above the 0.6620 (S1) support line. The price action seems to be testing the upward trendline showing the limitations of the pair’s upward movement since the 25th of November and we intend to maintain a bullish outlook for the pair as along as the prementioned upward trendline remains intact. Supporting our bullish outlook is the RSI indicator which remains just below the reading of 70, implying a strong bullish market sentiment. Should the bulls maintain control over the pair’s direction, we may see AUD/USD aiming for the 0.6800 (R1) resistance line. Should the bears take charge of the pair’s direction we may see the pair reversing course breaking initially the prementioned upward trendline in a first signal of an interruption of the upward movement, continue to break also the 0.6620 (S1) support line, thus paving the way for the 0.6375 (S2) support level.

Gold’s price was finally able to break the 4245 (S1) resistance line, now turned to support. As the precious metal’s price was able to break the upper boundary of its past sideways motion we switch our bias for a sideways motion in favour of a bullish outlook and intend to keep it as long as the upward trendline guiding gold’s price remains intact. Please note that the RSI indicator has reached the reading of 70, implying a strong bullish market sentiment for gold’s price which could support the continuance of its upward motion, yet the price action of gold has reached the upper Bollinger band which may slow down the bulls or even cause a correction lower. Should the bulls maintain control we may see gold’s price aiming if not breaching the 4380 (R1) resistance line that marks a record high level for the bullion. Should the bears take over we may see gold’s price sinking below the 4245 (S1) support line and starting to aim for the 4050 (S2) support base.

その他の注目材料

Today, we get Germany’s final HICP rate for November, the UK’s GDP preliminary rates for October, the UK’s manufacturing output rate for October, Sweden’s unemployment rate for November and France’s final HICP rate for November. In Monday’s Asian session we note Japan’s Tankan manufacturing index figure for Q4, the UK’s House Price Right Move rate for December, China’s urban investment rate, industrial output retail sales rate and unemployment rate all for November.