The post Ex-Dividend 27/12/2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance.

Pivot: 107.58
Supporting reasons: Identified as a pullback support close to the 38.2% Fibonacci retracement. indicating a potential area where buying pressures could intensify. 

1st support: 106.58
Supporting reasons: Identified as a pullback support close to the 61.8% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 108.50
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation toward the 1st support.

Pivot: 1.0460
Supporting reasons: Identified as an overlap resistance close to the 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 1.0333

Supporting reasons: Identified as a swing low support, indicating a potential level where price could find support once more.

1st resistance: 1.0536
Supporting reasons:  Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance

Pivot: 162.47
Supporting reasons: Identified as an overlap support. indicating a potential area where buying pressures could intensify.

1st support: 160.34

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 164.92
Supporting reasons: Identified as an overlap resistance close to the 78.6% Fibonacci projection and 161.8% Fibonacci extension, indicating a strong level of resistance.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 0.8325
Supporting reasons: Identified as a swing high resistance, indicating a potential area where selling pressures could intensify

1st support: 0.82772

Supporting reasons:  Identified as an overlap support close to the 50% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 0.8369
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 1.2614
Supporting reasons: Identified as a pullback resistance close to the 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify

1st support: 1.2486

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 1.2720
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation toward the 1st resistance

Pivot: 195.84
Supporting reasons: Identified as an overlap support, indicating a potential area where buying pressures could intensify.

1st support: 193.26
Supporting reasons: Identified as an overlap support close to the 50% Fibonacci retracement, indicating a key level where price could find support once more.

1st resistance: 198.62
Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation toward the 1st support 

Pivot: 0.9011
Supporting reasons: Identified as a swing high resistance, indicating a potential area where selling pressures could intensify

1st support: 0.8905

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 0.9097
Supporting reasons: Identified as a swing high resistance close to the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 157.92
Supporting reasons: Identified as a swing high resistance, indicating a potential area where selling pressures could intensify

1st support: 155.73
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once again.

1st resistance: 159.33
Supporting reasons: Identified as an overlap resistance close to the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price has made a bullish reversal off the pivot and could potentially rise towards the 1st resistance.

Pivot: 1.4350

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 23.6% Fibonacci retracement, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 1.4194
Supporting reasons: Identified as a pullback support that aligns with a 50% Fibonacci retracement, indicating a key level where price could find support.

1st resistance: 1.4466
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.6265

Supporting reasons: Identified as a multi-swing high resistance that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify. 

1st support: 0.6201
Supporting reasons: Identified as a multi-swing-low support, suggesting a potential area where price could find support once more.

1st resistance: 0.6349
Supporting reasons: Identified as a pullback resistance that aligns close to 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.5661

Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area where selling pressures could intensify. The presence of a red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 0.5553
Supporting reasons: Identified as a multi-swing-low support, suggesting a key support area where price could find support once again.

1st resistance: 0.5741
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise towards the 1st resistance.

Pivot: 43,059.45

Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 42,084.74

Supporting reasons: Identified as a swing-low support, indicating a potential level where price could find support once again.

1st resistance: 43,828.07

Supporting reasons: Identified as an overlap resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could rise towards the pivot and potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 19,950.90
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 19,664.76

Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a key level where price could find support once more.

1st resistance: 20,197.50
Supporting reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 6,039.40

Supporting reasons: Identified as an overlap resistance that aligns close to a 78.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 5,984.70

Supporting reasons: Identified as an overlap support that aligns with a 23.6% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 6,099.60
Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 99,512.96

Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 93,456.20
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 103,693.98
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 3,528.21

Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 3,228.19
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 3,762.79
Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise toward the 1st resistance.

Pivot: 68.93
Supporting reasons: Identified as an overlap support close to the 61.8% Fibonacci retracement. indicating a potential area where buying pressures could intensify. 

1st support: 67.20
Supporting reasons: Identified as multi-swing low support, indicating a key level where price could find support.

1st resistance: 71.29
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop toward the 1st support 

Pivot: 2633.36
Supporting reasons: Identified as an overlap resistance close to the 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify

1st support: 2571.77

Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support.

1st resistance: 2673.59

Supporting reasons: Identified as a pullback resistance close to the 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

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The post Friday 27th December 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 27 December 2024

What happened in the U.S. session?

Unemployment claims in the U.S. decreased by 1,000 to 219,000, marking the lowest level in a month and indicating a cooling but still healthy labor market. Despite this decline, continuing claims—which reflect the number of individuals receiving unemployment benefits beyond the initial week—rose by 46,000 to 1.91 million, the highest level since November 2021. This increase suggests that unemployed individuals are facing longer periods without employment, with the average duration of unemployment in November reaching 23.7 weeks, the longest since April 2022.

These labor market trends are likely to influence the Federal Reserve’s monetary policy decisions. The recent data may encourage the Fed to maintain current interest rates in the near term, balancing concerns between a cooling labor market and stalled inflation 

Trading volumes were relatively light, as many traders were on holiday following Christmas and ahead of the New Year. Despite the reduced activity, the dollar index rose by 0.13% to 108.25

What does it mean for the Asia Session?

The mixed U.S. labor data, showing a decline in initial jobless claims but a rise in continuing claims, will likely influence the Asia session in forex markets. The U.S. dollar may see cautious optimism, strengthening against currencies like JPY and pressuring commodity-linked ones like AUD. Safe-haven assets, including JPY and gold, could attract demand as traders assess the Fed’s monetary policy stance. Expectations of steady U.S. interest rates may impact Asian markets, with commodity currencies and emerging markets showing moderate sensitivity. Risk appetite could wane, leading to cautious equity trading in Asia.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

With no major news, the U.S. Dollar Index (DXY) is expected to trade within a range, driven by technical levels and market sentiment –  the support and resistance levels for today.

Support: 107.58

Resistance: 108.50

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted by a majority to lower the Federal Funds Rate target range by 25 basis points to 4.25 to 4.50% on 18 December. Voting against the action was Beth M. Hammack, who preferred to maintain the target range at 4.5 to 4.75%.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• The Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs to 2% in the September projection) and 2025 (2.1% vs 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs 2.3%), 2025 (2.5% vs 2.1%), and 2026 (2.1% vs 2%).
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 28 to 29 January 2025.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

Gold (XAU/USD) is likely to trade in a range of $2,633 (support) to $2672 (resistance) today, with no major news influencing the market. The metal’s price will be guided by U.S. dollar movements, with a weaker DXY supporting gold and a stronger DXY applying pressure

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The AUD/USD is expected to see increased activity today as Australian banks reopen after the holiday closure. Key technical levels to watch are support at 0.6201 and resistance at 0.6265. The pair’s movement will depend on global risk sentiment, with positive sentiment likely boosting the AUD, while caution may pressure it

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10 December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wages growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• Sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment. To date, longer term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions, paying close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The next meeting is on 18 February 2025.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Expect the NZD/USD to trade between 0.5553 (support) and 0.5740 (resistance), with movements influenced by AUD activity, global risk sentiment, and DXY trends. Moderate volatility is likely due to holiday-season liquidity returning.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some services sectors have continued to grow.
• Consistent with feedback from business visits, high frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to further ease monetary policy restraint.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The Japanese Yen (JPY) is expected to trade within a range today, influenced by global risk sentiment and U.S. dollar movements.

For USD/JPY, key levels are support at 155.70 and resistance at 157.92. A risk-off environment may strengthen the JPY as a safe-haven asset, while risk-on sentiment could weaken it. 

The U.S. Dollar Index (DXY) will also play a critical role, with a stronger dollar pressuring the yen and a weaker dollar supporting it. Thin post-holiday liquidity may amplify volatility, and speculation about the Bank of Japan’s policy could keep traders cautious. Expect moderate activity within these technical levels.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 19 December, by a 8-1 majority vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderate increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a passthrough to consumer prices of cost increases led by the past rise in import prices have waned; inflation expectations have risen moderately.
• With regard to the CPI (all items less fresh food), while the effects of the pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 24 January 2025.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Expect EUR/USD to trade between 1.0333 (support) and 1.0460 (resistance), with increased activity as European banks reopen. Risk sentiment and DXY movements will drive intraday action, with moderate volatility likely due to returning liquidity

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 12 December to mark the third successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.15%, 3.40% and 3.00% respectively.
• The disinflation process is well on track and most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 30 January 2025.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

 Expect USD/CHF to trade within 0.8905(support) and 0.9011 (resistance), with increased activity due to returning liquidity. Movements will depend on risk sentiment, DXY trends, and any developments in global markets. Moderate volatility is likely.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking for the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector was again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was
• normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 1.5% for 2025.
• The SNB will continue to monitor the situation closely, and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 20 March 2025.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

The GBP/USD is expected to trade between support at 1.2486 and resistance at 1.2614 today as British banks reopen. Increased liquidity may lead to more pronounced moves. The pound’s direction will be influenced by global risk sentiment, with risk-on sentiment supporting GBP and risk-off sentiment favoring the USD. 

Movements in the U.S. Dollar Index (DXY) will also be crucial, with a weaker DXY supporting GBP/USD and a stronger DXY applying pressure. With no major UK-specific news, trading will focus on technical levels and external global cues, with moderate volatility likely

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6 to 3 to maintain the Bank Rate at 4.75% on 19 December 2024 – three members preferred to reduce the Bank rate by 25 basis points, bringing it down to 4.50%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Twelve-month CPI inflation had increased to 2.6% in November from 1.7% in September, slightly higher than previous expectations while services consumer price inflation had remained elevated, at 5.0%, while core goods price inflation had risen to 1.1%.
• Headline CPI inflation was slightly higher than previous expectations, owing in large part to stronger inflation in core goods and food, and is expected to continue to rise slightly in the near term.
• Most indicators of UK near-term activity have declined with Bank staff expecting GDP growth to be weaker at the end of the year than originally projected in the November Monetary Policy Report.
• Bank staff now expected zero GDP growth in 2024 Q4, weaker than the 0.3% that had been incorporated in the November Report, broadly consistent with the latest combined steer from business surveys and the available official data.
• The Committee now judges that the labour market is broadly in balance as annual private sector regular average weekly earnings growth picked up quite sharply in the three months to October but there remains significant uncertainty around developments in the labour market.
• Monetary policy has been guided by the need to squeeze remaining inflationary pressures out of the economy to achieve the 2% target both in a timely manner and on a lasting basis. Over recent quarters there has been progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly.
• The Committee continues to monitor closely the risks of inflation persistence and will assess the extent to which the evolving evidence is consistent with more constrained supply, which could sustain inflationary pressures, or with weaker demand, which could lead to the emergence of spare capacity in the economy and push down inflation; a gradual approach to removing monetary policy restraint remains appropriate.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 6 February 2025.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

USD/CAD is expected to trade between 1.4350 (support) and 1.4466 (resistance) today. Movements will be driven by oil price fluctuations, risk sentiment, and DXY trends, with increased liquidity adding to potential volatility.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.25% while continuing its policy of balance sheet normalization on 11 December; this marked the fifth consecutive meeting where rates were reduced.
• Canada’s economy grew by 1% in the third quarter, somewhat below the Bank’s October projection, and the fourth quarter also looks weaker than projected. Third-quarter GDP growth was pulled down by business investment, inventories and exports.
• The unemployment rate rose to 6.8% in November as employment continued to grow more slowly than the labour force while wage growth showed some signs of easing, but remains elevated relative to productivity.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• CPI inflation has been about 2% since the summer, and is expected to average close to the 2% target over the next couple of years. Since October, the upward pressure on inflation from shelter and the downward pressure from goods prices have both moderated as expected.
• Looking ahead, the GST holiday will temporarily lower inflation but that will be unwound once the GST break ends. In addition, the possibility the incoming US administration will impose new tariffs on Canadian exports to the United States has increased uncertainty and clouded the economic outlook
• With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, the Governing Council decided to reduce the policy rate by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The Governing Council has reduced the policy rate substantially since June and going forward, they will be evaluating the need for further reductions in the policy rate one decision at a time.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 29 January 2025.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Oil prices are expected to trade with increased activity today as markets reopen post-holidays. WTI Crude Oil is likely to trade between support at $68.90 and resistance at $71.30. Prices will be influenced by supply concerns, including OPEC+ production cuts, and demand sentiment driven by global economic conditions. Movements in the U.S. Dollar (DXY) may also impact oil, with a weaker USD supporting prices and a stronger USD applying pressure. Expect moderate volatility as liquidity returns to the market.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 27 December 2024 first appeared on IC Markets | Official Blog.

• China’s MIIT predicts a 5.7% y/y growth in industrial output for the January to December
• China’s industrial profits decline four straight months, but at a slower rate
• Japan finance minister Kato – alarmed by FX moves, driven by speculators
• South Korea says it has a North Korean soldier in custody
• China November Industrial profit Year to Date (YTD) -4.7% y/y (prior -4.3%)
• PBOC sets USD/ CNY reference rate for today at 7.1893 (vs. estimate at 7.2981)
• Japan inflation data and BoJ December summary raise expectations of a January rate hike
• BoJ December 2024 Summary of Opinions – ‘Gradual increase in CPI’
• Japan Retail sales for November: +2.8% y/y (expected +1.6%)
• Japan Industrial Production for November (preliminary): -2.3% m/m (expected -3.4%)
• Japan data: October Unemployment rate 2.5% (expected 2.5%)
• Tokyo area December inflation data: Headline 3.0% y/y (expected 2.9%)
• Catch up – OPEC+ does not have “the bandwidth to prop prices much higher”
• Catch up – World Bank raised its 2024 China growth forecast to 4.9%, from 4.8% previously
• Catch up – Further supportive measures in store for China housing sector in 2025
• Catch up – China revises up 2023 GDP by 2.7% from previous estimate
• Trade ideas thread Friday, 27 December, 2024, insightful charts, technical analysis, ideas

In
US time on Thursday USD/JPY traded to circa 158.09,
its
highest
since mid-July this
year. The pair pulled back toward 157.50 during the session here,
responding to:

• December
  inflation
  in Tokyo accelerated for a second month, the government temporarily
  phased out utility subsidies;
• the
  ‘Summary of opinions’ from the Bank of Japan December meeting
  (when the bank maintained its policy rate at 0.25%) showed the policy
  board members remaining optimistic in its assessment that the
  economy and inflation are moving in line with its projections –
  amidst caveats of course – supporting market expectations for a
  near-term rate hike, perhaps as soon as the January 23-24, 2025 meeting.

JPY
crosses slid also. EUR/JPY’s slide was cushioned somewhat by a
drift down a few points for EUR/USD. There were no fresh notable news items for the euro.

From
China
today
we had data showing that industrial
profits extended
their
decline to a fourth straight month, dropping 7.3%. The
flip side, if you prefer a brighter take, is that the fall was slower than the
10% drop in October. The YTD figure worsened, to -4.7% in
January-November from -4.3% in the January-October period.

Regional equities rose, following a lead from higher Wall Street.

This article was written by Eamonn Sheridan at www.forexlive.com.

China’s Ministry of Industry and Information Technology predicts a 5.7% year-on-year growth in industrial output for the January to December period.

Which seems optimistic based on the data today and prior for 2024:

• China’s industrial profits decline four straight months, but at a slower rate

More:

• is committed to ensuring steady growth in the industrial economy.

• plans
  to boost efforts to roll out large-scale equipment upgrades and
  encourage trade-in programs for consumer goods.
• aims to build a supply chain that is both self-reliant and easily
  manageable.
• intends to create a system to ensure a stable and reasonable level
  of investment in the manufacturing sector.

This article was written by Eamonn Sheridan at www.forexlive.com.

This in reference to the data from China earlier:

• China November Industrial profit Year to Date (YTD) -4.7% y/y (prior -4.3%)

The move month alone m/m was -7.3%, extending its decline to a fourth straight month. But, October was -10% ,so a slower pace of fall in November.

The data comes via China’s National Bureau of Statistics (NBS). These industrial profit figures account for firms generating annual revenues of at least 20 million yuan ($2.7 million).

China is the world’s second-largest economy. It continues to face challenges in its post-pandemic recovery, including

• weak consumer and business investment
• a prolonged housing market slump
• and new trade risks associated with the incoming U.S. administration
• weak domestic demand

Recent economic data revealed mixed signals: industrial output grew in November, but home prices fell at their slowest pace in 17 months. Meanwhile, state-owned firms saw profits decline 8.4%, foreign firms recorded a 0.8% drop, and private-sector companies experienced a 1% fall during the first 11 months.

To counter these challenges, China’s policymakers have pledged to enhance economic support, including raising the fiscal deficit, issuing more debt, and loosening monetary policy. Measures include plans for record $411 billion special treasury bonds in 2024 and increased fiscal support for consumers and social security programs.

***

I posted a few posts on info from China over the break earlier:

• Catch up – World Bank raised its 2024 China growth forecast to 4.9%, from 4.8% previously
• Catch up – Further supportive measures in store for China housing sector in 2025
• Catch up – China revises up 2023 GDP by 2.7% from previous estimate
• ICYMI: China’s top legislature set to convene annual session on 5 March next year

• Chinese People’s Political Consultative Conference (CPPCC) on March 4
• China’s National People’s Congress will be held March 5, 2025

• People’s Bank of China injects 300 bn yuan in a 1 year MLF at unchanged rate of 2.00%
• China has passed a law introducing a value added tax. Will take effect on January 1 2026 according to Xinhua …. another year away

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan finance minister Kato

• Decline to comment on the possibility of meeting the government’s target of achieving a primary budget surplus by next fiscal year.Recently seeing one-sided, sharp FX moves.Important for currencies to move in a stable manner reflecting fundamentals.Alarmed over FX moves, including those driven by speculators.Will take appropriate action against excessive moves.

Those words in bold are an escalation of verbal intervention.

USD/JPY back to its session lows and thereabouts:

This article was written by Eamonn Sheridan at www.forexlive.com.

South Korea’s intelligence agency says it has an injured North Korean soldier in custody.

No further details as yet.

As I said above, tensions on the Korean peninsula will, at the margin, be a yen positive (flight to safety/liquidity … so USD positive also). The moves used to be intense on such news that has dissipated.

This article was written by Eamonn Sheridan at www.forexlive.com.

Industrial profit Year to Date (YTD) -4.7% y/y

• prior -4.3%

For November alone a -7.3% y/y slump

• prior -10%

***

China’s industrial sector has experienced fluctuating profitability throughout 2024, influenced by various economic challenges and policy interventions, including but not limited to:

• insufficient effective demand
• declining industrial product prices (PPI deflation)

October month alone 2024:

• Industrial profits fell by 10% year-on-year, an improvement from the 27.1% drop observed in September. This hinted that recent stimulus measures may be positively impacting the industrial sector.

January-October 2024:

• Over the first ten months, industrial profits decreased by 4.3% year-on-year, slightly wider than the 3.5% drop recorded in the January-September period

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan Retail sales

more to come

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan Industrial Production for November 2024, preliminary reading

-2.3% m/m

• expected -3.4%, prior 2.8%

-2.8% y/y

• prior 1.4%

Japanese manufacturers expect dec output to be +2.1% m/m (vs. -0.5% expected previously)

• and January +1.3% m/m

**

Industrial Production released by the Ministry of Economy, Trade and Industry measures outputs of the Japanese factories and mines.

This article was written by Eamonn Sheridan at www.forexlive.com.

Jobless rate steady at 2.5%

• expected 2.5%, prior 2.5%

Job to applicant ratio steady also at 1.25%

• expectedd 1.25, prior 1.25%

Nothing to see here …

Inflation data out at the same time:

• Tokyo area December inflation data: Headline 3.0% y/y (expected 2.9%)

Still to come, the BoJ!

Economic calendar in Asia 27 December 2024 – Japan (Tokyo) inflation, BOJ meeting Summary

This article was written by Eamonn Sheridan at www.forexlive.com.