ATFX Market Outlook 18th December 2024

ATFX Market Outlook 18th December 2024

Market Awaits Fed's Final Decision: Hawkish Rate Cuts and Dot Plot Projection Take Center Stage

Opinion Today:

U.S. retail sales data exceeded expectations, indicating economic and consumption strength. Next, markets prepared for the Federal Reserve's interest rate decisions. On Tuesday, U.S. stocks fell, with the Dow Jones down for the ninth straight session. The S&P 500 and Nasdaq declined by 0.39% and 0.3%, respectively.

Retail sales increased more than expected in November, showcasing economic resilience. The U.S. dollar rose 0.17% against major currencies to 106.97, with an intraday high of 107.08. The euro fell 0.24%, the yen rose 0.42% to 153.52, and the pound increased 0.21% to 1.2708 against the dollar.

Gold prices fell 0.26% to $2,645.54 per ounce due to a stronger dollar and rising bond yields as investors focused on the Federal Reserve's upcoming policy meeting. After negative economic news from Germany and China's economic growth, oil prices dipped about 1% to a one-week low amid demand concerns.

On Thursday morning, GMT +8, during the Wednesday afternoon US trading session, the Federal Reserve announced a likely 25-basis-point cut to its interest rate, lowering its range between 4.25% to 4.50%. The Fed will release the latest interest rate dot plot and economic forecasts, which could impact financial market fluctuations.

Key Data:

15:00 GB CPI YoY NOV ***

17:00 ECB’s Lane Speaks ** 

18:00 EU CPI MoM Final NOV *** 

21:30 US Current Account Q3 and Housing Starts NOV ** 

23:30 US Crude Inventories ** 

Tomorrow

03:00 Fed Interest Rate Decision ***

03:30 Fed Press Conference *** 

11:00 BoJ Interest Rate Decision *** 

14:30 BoJ Press Conference *** 

20:00 BoE Interest Rate Decision *** 

21:30 US GDP & Core PCE Prices Final Q3 ***

21:30 US Initial Jobless Claims *** 

EUR/USD

1.0524/1.0534 Resistance1.0462/1.0450 Support

The euro's two-day gains against the U.S. dollar ended yesterday as the dollar strengthened due to upbeat US retail sales data. After briefly reaching the key moving average resistance, the euro faced further resistance around 1.0530. As a result, the short-term outlook suggests adjustments, with attention to the Federal Reserve's decision.

GBP/USD

1.2774/1.2812 Resistance1.2649/1.2609 Support

Sterling gained for the second consecutive day against the dollar, supported by stronger-than-expected UK wage growth data for the three months to October. The exchange rate exceeded the 10-day moving average, which needs to be broken for further upward momentum above 1.2700 and potentially reaching 1.2800. However, the short-term outlook suggests adjustments, with attention to the Federal Reserve's decision. 

USD/JPY

154.38/154.76 Resistance152.74/152.34 Support

After six days, the US dollar against the yen stopped rising yesterday, as the market took profits before the Federal Reserve and Bank of Japan's decisions. The 154.30 resistance level remains intact, and the exchange rate has fallen below 154. Stabilising around 153 is crucial to maintaining high-range trading and seeking a rebound, awaiting the Federal Reserve's decision. 

USD/CAD

1.4349/1.4379 Resistance1.4278/1.4255 Support

Canada's inflation rate fell to 1.9% in November, potentially enabling the Bank of Canada to cut interest rates further. The pair must hold steady after exceeding the 1.4300 mark, as the Federal Reserve's decision may still yield a high gain.

U.S Crude Oil Futures (January)

70.33/70.86 Resistance69.16/68.64 Support

A ceasefire agreement in Gaza may be reached soon. Meanwhile, crude oil prices fell for the second consecutive day on Tuesday, dropping over 2% before recovering some losses. The major moving averages were tested, and support rebounded, holding near $69.20. Eyes are now on the Federal Reserve's upcoming guidance.

Spot Gold

2669/2683 Resistance2630/2613 SupportSpot Silver30.94/31.16 Resistance30.23/30.01 Support

The stronger U.S. dollar and high U.S. bond yields caused spot gold prices to fluctuate downward overnight, dropping by $20 to a new one-week low before slightly recovering. This week, gold prices showed narrow consolidation, with the daily moving average between $2,655 and $2,662, limiting upside potential. Since the November 14 low, the upward trend line has eased some downward pressure, prompting speculation on whether another Fed rate cut could help gold prices break out of this range.

US30

43765/44016 Resistance43266/42950 Support

U.S. stocks fell again on Tuesday, with the Dow Jones Industrial Average experiencing its longest losing streak since February 1978, dropping for nine straight days. It hit its lowest level since November 20, approaching a previous low. Key support is near 42940, and the Fed's stance on interest rate cuts will be crucial in determining if the Dow can stop its decline.

NAS100

22141/22244 Resistance21814/21713 Support

Large technology stocks showed mixed results overnight. While Nvidia weakened, Tesla reached new highs. The Nasdaq closed slightly lower, reflecting a cautious wait-and-see approach ahead of the Federal Reserve's decision. Although interest rate cuts are expected, a hawkish stance remains possible. Still, the Nasdaq held above the 22,000 mark, indicating potential for further gains.

BTC (Bitcoin)

108101/109413 Resistance103656/101952 Support

On Tuesday, the U.S. dollar strengthened after retail sales rose 0.7% in November, as markets anticipated a 25-basis-point interest rate cut from the Federal Reserve. Bitcoin reached a record high of $108,135, while altcoins like Solana gained 4% before slightly retracting. Investors await FOMC's midnight decision, which will likely impact the Fed rates cut path and the cryptocurrency market.

Enjoy trading! The content is for reference only. Please ensure that you understand the risk.

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