EURUSD, GBPUSD, AUDUSD

·        EUR/USD resilient below 1.1000 as US retail sales awaited

·        UK CPI to fall but will GBP/USD extend rebound?

·        China’s GDP growth could rise; AUD/USD looks for pullback

US retail sales --> EUR/USD

Retail sales will be the main focus in the US, while the other releases will primarily consist of second-tier data. Although there has been a deceleration in US consumer spending following a rise throughout the summer, it is not expected to see a sudden and drastic decline. In November, there was a 0.3% month-on-month increase in retail sales. It is anticipated that the December data, which will be released on Wednesday, will exhibit a comparable growth rate for the month.

Technically, EURUSD is travelling beneath the 1.1000 psychological mark and the 20-day simple moving average (SMA) but the momentum is still bullish. The ascending trend line that has been drawn since the beginning of October is acting as major support for the bears around the 50- and the 200-day SMAs at 1.0885 and 1.0840 respectively. On the flipside, the 1.1000 round number and the 1.1150 high are the next resistances to look for.

UK CPI --> GBP/USD

The British pound has gained support because of the anticipation of fewer interest rate reductions compared to other central banks. The Bank of England is expected to reduce rates by a minimum of 100 bps, while the ECB and the Fed are projected to implement considerably more forceful cuts. The decline of inflation in the UK has been prolonged since its peak in 2022, but recent reports indicate a significant improvement in this pattern. In November, the UK's CPI decreased to a rate of 3.9% y/y. It is expected that in December, the CPI will have slightly decreased further to a rate of 3.8% y/y.

In FX markets, GBPUSD has been stubbornly pushing for some recovery without success, above the five-month high of 1.2825. A rally above it would open the way towards the 1.3000 round number ahead of 1.3140. If not, the short-term uptrend line around 1.2670 could provide another opportunity for a rebound before the focus turns to 1.2610 and the 50- and the 200-day SMAs at 1.2585 and 1.2540 respectively. 

China GDP --> AUD/USD

In 2023, the Chinese economy had multiple fluctuations due to the escalating property crisis. Investors were dissatisfied and surprised when authorities only provided targeted drip-feed measures instead of a large stimulus announcement, as they were expecting. Authorities were cautious due to the need for deleveraging. 

The GDP growth is expected to have accelerated in the last quarter of 2023, reaching a year-on-year rate of 5.3%, following a slowdown to 4.9% in the third quarter. A Q4 figure exceeding 5.0% y/y would guarantee the government's achievement of its annual growth objective of approximately 5.0%.

In charts, AUDUSD is facing discouraging technical signals, but it is holding above the medium-term ascending trend line, which is still looking promising. The bulls will have to rally above the 0.6870-0.6895 area to preserve buying confidence. Alternatively, a dive below the 200-day SMA at 0.6580 may switch the outlook to bearish.