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Skerdian Meta•Monday, December 30, 2024•3 min read
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This week is expected to be quiet again with New Year falling in the middle, however today we have Spanish CPI inflation for December which is expected to increase for the third month in December, showing an upward trend in Q4 of 2024.
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Last week was quiet as expected, and there were no major surprises such as spikes due to thin liquidity. Most currencies traded in a tight range, with only safe havens such as the JPY, CHF and Gold displaying some weakness. Early in the week, the Canadian GDP data was positive, while the US durable goods orders declined in November, however, they didn’t have much impact on the respective currencies.
US stock markets were bullish for most of the week, but they turned lower on Friday, losing around 1% in value, as the debt ceiling controversy resurfaces. Treasury Secretary Janet Yellen issued a stark warning to Congress today. She highlighted a critical timeframe for the debt ceiling that could significantly impact markets in the early months of 2025, which turned risk sentiment negative.
This Week’s Market Expectations
This week is expected to be similar to last week, with volatility remaining low as traders continue to be on holiday until next week, with most markets closed on Wednesday.
Upcoming Forex Calendar Events for the Week:
Monday
- Spain: Flash CPI y/y release, providing insight into inflation trends for December.
- United States:
- Chicago PMI: A key gauge of business conditions in the Chicago region.
- Pending Home Sales: Offers a glimpse into housing market activity and future sales trends.
Tuesday
- China:
- Manufacturing PMI: Measures factory activity and economic health in the manufacturing sector.
- Non-Manufacturing PMI: Tracks performance in the services sector.
- United States:
- S&P/CS Composite-20 HPI y/y: An annual comparison of home price trends in major metropolitan areas.
Wednesday
- Bank Holidays:
- Asia: New Year Bank Holiday.
- Europe: New Year Bank Holiday.
- United States: New Year Bank Holiday.
Thursday
- China:
- Caixin Manufacturing PMI: Focuses on smaller and export-oriented manufacturers.
- Eurozone:
- Final Manufacturing PMI: Confirms earlier estimates of manufacturing sector activity.
- United States:
- Unemployment Claims: Weekly data on the number of people filing for jobless benefits.
Friday
- United States:
- ISM Manufacturing PMI: Offers a comprehensive look at manufacturing sector conditions.
- ISM Manufacturing Prices: Monitors input cost trends in manufacturing, reflecting inflationary pressures.
Last there was some volatility in the markets during the first two days, with the USD making a bullish move against safe havens, while risk currencies traded in a range. As a result, we didn’t open many trades in forex during the week, but had several winning trades in stock markets, which were bullish for most of the week.
The 100 Daily SMA Turns Into Resistance for Gold
The gold and cryptocurrency markets continue to exhibit significant volatility, driven by shifting expectations around monetary policy. Last week, gold prices dropped by $100 after failing to breach the $2,725 resistance level. This bearish trend was fueled by robust U.S. services PMI data and anticipated Federal Reserve rate cuts. Gold also fell below the 100-day SMA, which has since acted as a resistance point, rejecting attempts to climb higher, including on Friday, further confirming the downward trajectory.
XAU/USD – Daily Chart
GBP/USD Rejected by the 20 Daily SMA
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The GBP/USD exchange rate also faced intense downward pressure following meetings by the Federal Reserve and the Bank of England (BOE). After falling below 1.25, the pair briefly climbed above 1.26, recovering from November lows. However, concerns over the UK economy, highlighted by today’s official Q3 GDP data, kept the pound under strain. While positive UK data earlier in the week had bolstered the GBP, the Fed’s hawkish rate cut and the BOE’s dovish outlook caused the currency to shed nearly 2 cents, with additional losses below 1.25. Resistance from the 20-day SMA halted a short-lived recovery, rejecting further upward movement.
GBP/USD – H4 Chart
Cryptocurrency Update
The $100K Turns Into Resistance for Bitcoin
Bitcoin experienced a sharp rally early in the week, climbing to $108,000 ahead of the Federal Reserve’s FOMC decision. However, following a 25 basis point rate cut, Bitcoin dropped below $100,000, eventually retreating into the low $90,000s. Despite a brief recovery above $100,000 supported by a key level, selling pressure forced prices back under $95,000, turning $90,000 into a resistance zone.
BTC/USD – Daily chart
Ethereum Heads Toward $3,500 Again
Ethereum was equally volatile, rebounding from a dip below $3,000 to approach $4,000 midweek. Yet, after an initial rally on Monday, Ethereum struggled to sustain gains above $4,000. The decline deepened yesterday, with prices slipping below $3,500. Both gold and cryptocurrencies remain uncertain markets as traders respond to evolving economic conditions and monetary policy shifts.
ETH/USD – Daily chart
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank’s local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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Danh mục: News
