The US dollar ends the year on a strong note

The U.S. dollar ends the year on a strong note, hitting two-year highs at 108.45. The Fed expects a 50-point rate cut for the full year 2025 versus 4 cuts one quarter earlier, citing higher inflation forecasts and a stubbornly strong labour market. This fundamental change has given a new impetus to the dollar's rise that began in late September.

The fundamental reason is the change in the tone of the Fed's monetary policy. Two consecutive 25-point cuts followed a 50-point cut in the key rate in September. Recent comments suggest a pause in January. The difference between current expectations for the end of next year and what was priced six months ago exceeds 100 points. Meanwhile, the euro, pound, and yen have much more modest six-month changes in expectations. Until September, this difference was against the dollar, but now it is becoming the driving force behind it.

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USDCHF Wave Analysis 20 December 2024

- USDCHF reversed from resistance zone

- Likely to fall to support level 0.8860

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EURCHF Wave Analysis 20 December 2024

- EURCHF falling inside minor impulse wave 5

- Likely to fall to support level 0.9250

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🗓 Economic Calendar at 2024/12/23 (GMT)

07:00 🇬🇧 Gross Domestic Product — Exp: 0.1% | 1.0% Actual: 0.0% | 0.9%

13:30 🇨🇦 ⚡️ Gross Domestic Product — Exp: 0.2% | 1.6% Actual: 0.3% | 1.9%

13:30 🇺🇸 Durable Goods Orders — Exp: -0.3% | 0.3% Actual: -1.1% | -0.1%

15:00 🇺🇸 ⚡️ CB Consumer Confidence — Exp: 112.9 Actual: 104.7

15:00 🇺🇸 New Home Sales — Exp: 666K | 8.2% Actual: 664K | 5.9%

18:30 🇨🇦 Summary of Deliberations


[Updated in real time]

Bitcoin Fell Back to Local Support

The crypto market retreated last week and is in no hurry to recover, remaining at $3.31 trillion, roughly where it was 30 days ago. The sharp dip below $3.2 trillion was also quickly bought back, but a full-blown rebound is yet to be seen. Markets continue to digest the Fed's tougher tone, reinforced by the accumulated urge to lock in profits after a strong year.

The Crypto Market Sentiment Index is in neutral territory, compared to the shuttling between fear and extreme fear in US stocks.

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Dollar: Slowing Momentum, Same Direction

Stock market sentiment is moving out of the extreme fear zone it plunged into last week, and the dollar has paused its strengthening. Friday's CPI report came in slightly weaker than average forecasts, reducing the fear of future Fed monetary policy.

Traders probably assumed that the Fed had better information about recent inflationary trends, which caused the sell-off in US equities to accelerate and expand. However, Friday's data eased the pressure, allowing the indices (except for Russell2000) to begin to recoup losses. The dollar index took a step back, returning below 108, while EURUSD bounced above 1.04 and GBPUSD above 1.25.

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#Shorts

#Gold: A decline to 2500

US indices: has the bullish trend broken?

Formally, inflation figures and lower-than-forecast expectations helped the market to find ground for a rebound. However, the declines of the previous days may have broken the backbone of the bull market. A couple of technical signals indicate this.

Primarily, there is a series of 11 sessions of declines in the Dow Jones. This is one of the most sustained selloffs in the history of the index. The decline has not been particularly intense most of the time, except on 18 December when markets were pressured by a change in expectations from the Fed. This acceleration in the decline coincided with the index falling below its 50-day moving average, from which the index had been bouncing since August. On this indication, we can talk about the breaking of the medium-term uptrend, opening the way to the 200-day. It passes through 40800 and aims upwards to 41000 by the end of the year.

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USDJPY Wave Analysis 23 December 2024

- USDJPY reversed from key support level 156.35

- Likely to rise to resistance level 158.00

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🗓 Economic Calendar at 2024/12/24 (GMT)

00:30 🇦🇺 ⚡️ Monetary Policy Meeting Minutes


[Updated in real time]

Nasdaq 100 Wave Analysis 23 December 2024

- Nasdaq 100 reversed from strong support level 21000.00

- Likely to rise to resistance level 22000.00

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🗓 Economic Calendar at 2024/12/25 (GMT)

01:00 🇯🇵 ⚡️ BOJ Governor Kazuo Ueda Speaks


[Updated in real time]

🗓 Economic Calendar at 2024/12/26 (GMT)

13:30 🇺🇸 ⚡️ Unemployment Claims — Exp: 223K Actual: 219K

13:30 🇺🇸 Continuing Claims — Exp: 1875K Actual: 1910K


[Updated in real time]

AUDUSD Wave Analysis 26 December 2024

- AUDUSD reversed from resistance level 0.6270

- Likely to fall to support level 0.6200

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WTI Wave Analysis 26 December 2024

- WTI broke daily Triangle

- Likely to rise to resistance level 70.90

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🗓 Economic Calendar at 2024/12/27 (GMT)

13:30 🇺🇸 Goods Trade Balance — Exp: -101.3B Actual: -102.9B

18:00 🇺🇸 Crude Oil Inventories — Exp: -700K Actual: -4237K


[Updated in real time]