DXY (US Dollar Index):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 106.57

Supporting reasons: Identified as a pullback support, indicating a potential area where buying pressures could intensify.

1st support: 105.43
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 107.58
Supporting reasons: Identified as a swing high resistance that aligns with the 161.8% Fibonacci extension, 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: 1.0529

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

1st support: 1.0430

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

1st resistance: 1.0605
Supporting reasons:  Identified as an overlap resistance close to the 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 159.24

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

1st support: 157.64

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

1st resistance: 162.11
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

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: 0.8268
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 0.8229

Supporting reasons: Aligns with the 127.2% Fibonacci extension, indicating a potential level where price could find support once more.

1st resistance: 0.8310
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 continue its bearish movement toward the 1st support level. Additionally, it has broken below the ascending trendline, indicating increased bearish momentum in the market.

Pivot: 1.2718

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

1st support: 1.2613

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

1st resistance: 1.2833
Supporting reasons: Identified as an overlap resistance close to 61.8% Fibonacci retracement and the 78.6% Fibonacci projection, indicating a strong level of resistance.

GBP/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 193.17

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

1st support: 191.24
Supporting reasons: Identified as a pullback support, indicating a key level where price could find support once more.

1st resistance: 195.64
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.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 0.8810

Supporting reasons: Identified as a pullback support, indicating a potential area where buying pressures could intensify.

1st support: 0.8807

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

1st resistance: 0.8957
Supporting reasons: Identified as a swing high resistance, 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: 153.41
Supporting reasons: Identified as a pullback resistance close to the 61.8% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 151.86
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 154.66
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 1.4186

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

1st support: 1.4140
Supporting reasons: Identified as an overlap support, indicating a key level where price could find support once more.

1st resistance: 1.4237
Supporting reasons: Identified as a resistance that aligns with a 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 0.6405

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

1st support: 0.6310
Supporting reasons: Identified as support that aligns with the 127.2% Fibonacci extension, suggesting a key support area where price could find support once again.

1st resistance: 0.6461
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 0.5807

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

1st support: 0.5747
Supporting reasons: Identified as a support level that aligns with the 127.2% Fibonacci extension, suggesting a key support area where price could find support once more.

1st resistance: 0.5836
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could make a bearish reversal off the pivot and fall toward the 1st support

Pivot: 44,526.51

Supporting reasons: The identified overlap resistance suggests a potential area where selling pressures could intensify. Additionally, the price trading below the red Ichimoku Cloud furthers the strength of the bearish momentum.

1st support: 43,346.114

Supporting reasons: Identified as an overlap support that aligns with a 78.6% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 44,099.35

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

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 20,399.50
Supporting reasons: Identified as a swing-high resistance that aligns with a 61.8% Fibonacci projection, indicating a potential area where selling pressures could intensify.

1st support: 19,688.27

Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, indicating a key level where price could find support.

1st resistance: 20,900.35
Supporting reasons: Identified as a resistance that aligns with a 78.6% Fibonacci projection, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 6,068.05

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

1st support: 6,027.07

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 more.

1st resistance: 6,099.30
Supporting reasons: Identified as a swing-high resistance that aligns with 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 toward the 1st support 

Pivot: 100,320.32

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

1st support: 93,573.17
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 102,934.34
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.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 3,946.82

Supporting reasons: Identified as an overlap resistance that aligns with a 78.6% Fibonacci retracement, indicating a potential area where selling pressures have intensified.

1st support: 3,739.73
Supporting reasons: Identified as a pullback support close to a 50% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 4,096.59
Supporting reasons:  Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 69.18
Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 67.82
Supporting reasons: Identified as an overlap support, indicating a key level where price could find support.

1st resistance: 70.59
Supporting reasons: Identified as a 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 continuation toward the 1st support 

Pivot: 2712.99
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 2665.57

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

1st resistance: 2758.65

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

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The post Friday 13th December 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 13 December 2024

What happened in the U.S. session?

The European Central Bank (ECB) announced a 25 basis point reduction in its key interest rates, bringing the deposit facility rate to 3%. This decision marked the ECB’s fourth rate cut of the year, aimed at addressing subdued economic growth and aligning inflation with the bank’s 2% target.

The euro exhibited a slight decline following the announcement, trading at approximately $1.0485, down from $1.049 prior to the decision. This modest movement reflected market expectations of the rate cut and the ECB’s cautious outlook on future economic conditions.

The dollar index remained largely unchanged at around 106.580, as U.S. Treasury yields provided support.

What does it mean for the Asia Session?

The European Central Bank’s (ECB) 25 basis point rate cut on December 12, 2024, is anticipated to have a limited impact on the Asian forex markets during the session on December 13. The euro experienced a slight decline against the U.S. dollar following the announcement, reflecting market expectations. Asian currencies, such as the Japanese yen, may see minimal fluctuations against the euro, given the modest movement in the EUR/USD pair.

 Investors in the Asian session are likely to focus on regional economic indicators and central bank policies, with the ECB’s decision playing a secondary role in influencing currency valuations.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

In the absence of major economic news, the U.S. Dollar Index (DXY) is likely to experience limited volatility, with movements primarily influenced by technical factors and market sentiment –  the support and resistance levels for today.

Support: 106.57

Resistance: 107.04

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to lower the Federal Funds Rate target range by 25 basis points to 4.50% to 4.75% on 7th November.
• 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.
• 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 17 to 18 December 2024.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

In the absence of major economic news, XAUUSD is likely to experience limited volatility, with movements primarily influenced by technical factors and market sentiment –  the support and resistance levels for today.

Support: 2,665.57

Resistance: 2,712.99

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

When there’s no major news, the Australian Dollar (AUD) is expected to follow broader market sentiment, reacting to changes in commodity prices and shifts in global risk appetite – these are the support and resistance levels for today.

Support: 0.6309

Resistance: 0.6404

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10th 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

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

There’s no major news, The New Zealand dollar (NZD) exchange rate is approximately 0.574, with forecasts suggesting a range between 0.565 and 0.583. these are the support and resistance levels for today.

Support: 0.5740

Resistance: 0.5807

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

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The Japanese Yen (JPY) is influenced by factors such as U.S. Treasury yields, Federal Reserve policies, and domestic economic indicators. Today, the USD/JPY exchange rate is approximately 152.29.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 31st October, by a unanimous 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.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• While the effects of a 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.
• Comparing the projections with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rates are more or less unchanged. The projected year-on-year rate of increase in the CPI (all items less fresh food) for fiscal 2025 is somewhat lower due to factors such as the recent decline in crude oil and other resource prices.
• 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 19 December 2024.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

There’s no major news, The euro (EUR) exchange rate is approximately 1.0494. these are the support and resistance levels for today.

Support: 1.0430

Resistance: 1.0529

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17th October 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

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

There’s no major news, The Swiss Franc (CHF) exchange rate is approximately 0.8797. these are the support and resistance levels for today.

Support: 0.8881

Resistance: 0.8957

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 Bullish

The Pound (GBP)

Key news events today

GDP m/m  (7:00 am GMT)

What can we expect from GBP today?

The UK’s Gross Domestic Product (GDP) monthly estimate for October 2024 is scheduled for release on December 13, 2024, at 7:00 am GMT. This data will provide insights into the country’s economic performance and could influence the British Pound (GBP).

Key Considerations:

Market Expectations: Analysts anticipate a modest GDP growth for October, following a 0.1% contraction in September. If the actual figures align with or exceed expectations, the GBP may strengthen. Conversely, weaker-than-expected data could exert downward pressure on the currency.

Central Bank Policies: The Bank of England’s (BoE) monetary policy decisions are influenced by economic indicators like GDP. Positive GDP growth may reduce the likelihood of interest rate cuts, supporting the GBP. In contrast, disappointing GDP figures could prompt the BoE to consider easing policies, potentially weakening the currency.

Global Market Sentiment: External factors, such as global economic conditions and geopolitical developments, also impact the GBP.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to reduce the Bank Rate by 25 basis points, to 4.75% on 7th November 2024 – one member preferred to maintain the Bank rate at 5.0%.
• 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.
• Twelve-month CPI inflation fell to 1.7% in September but is expected to increase to around 2.5% by the end of the year as weakness in energy prices falls out of the annual comparison; services consumer price inflation has declined to 4.9%.
• CPI inflation is expected to increase to around 2.75% by the second half of 2025 as weakness in energy prices falls out of the annual comparison, revealing more clearly the continuing persistence of domestic inflationary pressures.
• The MPC’s latest projections for activity and inflation are also set out in the accompanying November Report; this forecast is based on the second case where CPI inflation is projected to fall back to around the 2% target in the medium term as a margin of slack emerges later in the forecast period that acts against second-round effects in domestic prices and wages.
• GDP had grown by 0.5% in 2024 Q2, 0.2% weaker than had been expected in the August Report, and 0.1% weaker than the earlier outturn had indicated at the time of the MPC’s previous meeting. Through the second half of 2024, GDP was projected to grow at a somewhat slower rate than in Q2 – headline GDP growth is expected to fall back to its recent underlying pace of around 0.25% per quarter over the second half of this year.
• The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time, relative to the August projections, while the Budget is provisionally expected to boost CPI inflation by just under 0.5% at the peak.
• Annual private sector regular average weekly earnings growth has continued to fall but remained elevated at 4.8% in the three months to August; the MPC judges that the labour market continues to loosen, although it appears relatively tight by historical standards.
• Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate but 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.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 19 December 2024.

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?

The Canadian Dollar (CAD) is influenced by factors such as commodity prices, interest rate differentials, and global economic conditions. Today,  the USD/CAD exchange rate is approximately 1.4181 – these are the support and resistance levels for today.

Support: 1.4187

Resistance:  1.4231

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 Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

 Oil prices have experienced slight declines due to forecasts of a supply surplus in 2025. Brent crude futures decreased by 8 cents to $73.33 per barrel, while West Texas Intermediate (WTI) crude fell by 7 cents to $69.95 per barrel while short-term factors indicate slight declines in oil prices, the overall market remains influenced by a complex interplay of supply forecasts, demand expectations, and geopolitical decisions.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 13 December 2024 first appeared on IC Markets | Official Blog.

US Markets Drop After Strong Data – Nasdaq Down 0.65%

US stocks fell in trading yesterday after a stronger-than-expected Producer Price Index (PPI) print increased expectations of a more hawkish tilt to next week’s anticipated rate cut from the Federal Reserve. The Dow dropped 0.53%, the S&P 500 fell 0.54%, and the Nasdaq lost 0.66% by the close of the session. Treasury yields rose following the data, with the 2-year yield adding 3.7 basis points to reach 4.190% and the 10-year yield gaining 5.7 basis points to climb to 4.328%. Oil prices closed near flat, with Brent crude dipping 0.19% to $73.36 and WTI down 0.38% at $70.02. Gold prices suffered a significant drop as profit-taking flows hit the market after reaching a five-week high, closing 1.37% lower at $2,680.86.

Dollar Remains Firm Ahead of Fed Cut

The dollar gained further ground over the past trading week, despite markets locking in expectations of a 25-basis-point cut from the Federal Reserve next week. The probability of the Fed reducing the base interest rate by 25 basis points now stands at 96%, although markets are not expecting a follow-up cut in the first meeting of 2025 as attention shifts towards the start of the Trump administration. The DXY is now 1.5% higher than its December low, and foreign exchange markets anticipate further strength in the greenback as the year-end approaches. With little on the economic calendar today, traders are expected to continue buying the dollar on any dips, a pattern likely to persist into the middle of next week when the Federal Reserve announces its decision.

Quiet Trading Day Expected to Close Out the Week

A calmer trading session is anticipated today, with little on the macroeconomic calendar to disrupt market flows. The Asian session is expected to open on a weaker footing following a poor day on Wall Street, and this sentiment is likely to carry over into the European session. UK markets may see some activity early in the London trading day with the release of the latest UK GDP data, where a modest 0.1% month-on-month increase is expected. In contrast, the US session has no significant events scheduled, and further profit-taking flows could emerge as investors look ahead to next week’s pivotal Federal Reserve meeting.

The post General Market Analysis – 13/12/24 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 13/12/2024 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 1.27%, Shanghai Composite up 0.75%, Hang Seng up 1.73% ASX down 0.28%
• Commodities : Gold at $2748.35 (-0.24%), Silver at $33.04 (0.28%), Brent Oil at $73.6 (0.46%), WTI Oil at $70.4 (0.49%)
• Rates : US 10-year yield at 4.284, UK 10-year yield at 4.3180, Germany 10-year yield at 2.130

News & Data:

• (USD) Core CPI m/m 0.3% vs 0.3% expected
• (USD) CPI m/m 0.3% vs 0.3% expected
• (USD) CPI y/y 2.7% vs 2.7% expected
• (CAD) Overnight Rate 3.25% vs 3.25% expected

Markets Update:

Asia-Pacific markets mostly rose on Wednesday, following Wall Street’s rally where the Nasdaq Composite hit record highs after U.S. inflation data aligned with expectations.

In Australia, the unemployment rate dropped to an eight-month low of 3.9% in November, beating economists’ predictions of a rise to 4.2%. However, Australia’s S&P/ASX 200 dipped 0.28% to close at 8,330.3.

Japan’s Nikkei 225 climbed 1.3%, while the Topix rose 1%. South Korea’s Kospi gained 0.9%, and the small-cap Kosdaq added 0.4%, as investors monitored the political situation in the country. South Korean President Yoon Suk Yeol stated he would not resign despite growing opposition following his brief martial law declaration.

China’s CSI 300 increased 0.9%, while Hong Kong’s Hang Seng rose 1.2% as investors awaited industrial production data for the third quarter.

In the U.S., Wednesday’s inflation report spurred optimism for a potential Federal Reserve rate cut next week. The Nasdaq surged 1.77% to close at a record 20,034.89. The S&P 500 rose 0.82% to 6,084.19, while the Dow Jones Industrial Average fell 0.22% to 44,148.56.

Tech stocks led gains, with Nvidia up over 3% and Tesla advancing nearly 6%, reflecting broader strength among major companies. The data-driven rally highlighted investor confidence amid favorable economic signals.

Upcoming Events: 

• 01:15 PM GMT – EUR Main Refinancing Rate
• 01:30 PM GMT – USD Core PPI m/m
• 01:30 PM GMT – USD PPI m/m
• 01:30 PM GMT – USD Unemployment Claims

The post Thursday 12th December 2024: Asia-Pacific Markets Rally Amid Positive Economic Signals first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 12 December 2024

What happened in the Asia session?

After slowing noticeably in October with only 15.9K jobs being added to the Australian economy, employment change jumped by 35.6K in November beating the market estimate of 26.0K while the unemployment rate edged lower from 4.1% to 3.9%. However, October’s figures were revised lower to 12.1K but that did not stop the Aussie from surging past 0.6400 and hit 0.6418 by midday Asia. This currency pair should continue to remain elevated as the day progresses.

What does it mean for the Europe & US sessions?

The Swiss National Bank (SNB) is poised to make its fourth consecutive rate cut of this year with another 25-basis point reduction, bringing the policy rate down to 0.75%. With headline and core inflation firmly anchored below the SNB’s target of 2% for almost a year and a half, this central bank is set to make further reductions in 2025. SNB Chairman Martin Schlegel’s press conference will begin half an hour after the policy announcement which could create further headwinds for the franc and potentially lift USD/CHF higher.

The European Central Bank (ECB) is widely expected to make its third successive rate cut at its final monetary policy meeting of this year with market consensus pointing to a 25-basis point reduction; this would bring the main refinancing rate down to 3.15%. After which, ECB President Christine Lagarde will commence her press conference where she could shed further light on the deliberations that took place amongst board members and also on the outlook for future monetary policy action. The Euro will most certainly face higher volatility after midday in Europe.

The Dollar Index (DXY)

Key news events today

PPI (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from DXY today?

The Producer Price Index (PPI) – which measures wholesale inflation – has accelerated in recent months, especially for the core reading. With November’s forecast pointing to another month of higher prices, the dollar could receive a strong boost later today.  After drifting under the 220K-level since mid-November, unemployment claims unexpectedly edged higher last week with a reading 224K. This week’s estimate of 221K points to a somewhat elevated reading which is higher than the 4-week average of 217K. Higher claims – a sign of labour market weakness – could cause the dollar to come under pressure. Whatever the outcome, traders should brace themselves for higher volatility before the start of the U.S. trading hours.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to lower the Federal Funds Rate target range by 25 basis points to 4.50% to 4.75% on 7th November.
• 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.
• 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 17 to 18 December 2024.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

PPI (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from Gold today?

The Producer Price Index (PPI) – which measures wholesale inflation – has accelerated in recent months, especially for the core reading. With November’s forecast pointing to another month of higher prices, the dollar could receive a strong boost later today.  After drifting under the 220K-level since mid-November, unemployment claims unexpectedly edged higher last week with a reading 224K. This week’s estimate of 221K points to a somewhat elevated reading which is higher than the 4-week average of 217K. Higher claims – a sign of labour market weakness – could cause the dollar to come under pressure. Whatever the outcome, traders should brace themselves for higher volatility for gold before the start of the U.S. trading hours.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

Labour Force Report (12:30 am GMT)

What can we expect from AUD today?

After slowing noticeably in October with only 15.9K jobs being added to the Australian economy, employment change jumped by 35.6K in November beating the market estimate of 26.0K while the unemployment rate edged lower from 4.1% to 3.9%. However, October’s figures were revised lower to 12.1K but that did not stop the Aussie from surging past 0.6400 and hit 0.6418 by midday Asia. This currency pair should continue to remain elevated as the day progresses.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10th 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

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi fell for the second successive day as it hit a low of 0.5760 on Wednesday. This currency pair stabilized around this level to retrace higher at the beginning of Thursday’s Asia session to hover around 0.5790 – these are the support and resistance levels for today.

Support: 0.5750

Resistance: 0.5830

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

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The yen continued to depreciate on Wednesday driving USD/JPY strongly towards the 153-level. This currency pair hit an overnight high of 152.84 before dipping under 152.50 as Asian markets came online – these are the support and resistance levels for today.

Support: 150.60

Resistance: 153.50

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 31st October, by a unanimous 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.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• While the effects of a 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.
• Comparing the projections with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rates are more or less unchanged. The projected year-on-year rate of increase in the CPI (all items less fresh food) for fiscal 2025 is somewhat lower due to factors such as the recent decline in crude oil and other resource prices.
• 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 19 December 2024.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

ECB Monetary Policy Statement (1:15 pm GMT)

ECB Press Conference (1:45 pm GMT)

What can we expect from EUR today?

The European Central Bank (ECB) is widely expected to make its third successive rate cut at its final monetary policy meeting of this year with market consensus pointing to a 25-basis point reduction; this would bring the main refinancing rate down to 3.15%. After which, ECB President Christine Lagarde will commence her press conference where she could shed further light on the deliberations that took place amongst board members and also on the outlook for future monetary policy action. The Euro will most certainly face higher volatility after midday in Europe.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17th October to mark the second 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 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• 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 Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

SNB Monetary Policy Statement (8:30 am GMT)

SNB Press Conference (9:00 am GMT)

What can we expect from CHF today?

The Swiss National Bank (SNB) is poised to make its fourth consecutive rate cut of this year with another 25-basis point reduction, bringing the policy rate down to 0.75%. With headline and core inflation firmly anchored below the SNB’s target of 2% for almost a year and a half, this central bank is set to make further reductions in 2025. SNB Chairman Martin Schlegel’s press conference will begin half an hour after the policy announcement which could create further headwinds for the franc and potentially lift USD/CHF higher.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Despite a strengthening dollar, the pound has shown strong resilience this week with Cable keeping its head above the 1.2700-level. This currency pair climbed above 1.2750 as Asian markets came online and it should continue to edge higher as the day progresses – these are the support and resistance levels for today.

Support: 1.2715

Resistance: 1.2865

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to reduce the Bank Rate by 25 basis points, to 4.75% on 7th November 2024 – one member preferred to maintain the Bank rate at 5.0%.
• 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.
• Twelve-month CPI inflation fell to 1.7% in September but is expected to increase to around 2.5% by the end of the year as weakness in energy prices falls out of the annual comparison; services consumer price inflation has declined to 4.9%.
• CPI inflation is expected to increase to around 2.75% by the second half of 2025 as weakness in energy prices falls out of the annual comparison, revealing more clearly the continuing persistence of domestic inflationary pressures.
• The MPC’s latest projections for activity and inflation are also set out in the accompanying November Report; this forecast is based on the second case where CPI inflation is projected to fall back to around the 2% target in the medium term as a margin of slack emerges later in the forecast period that acts against second-round effects in domestic prices and wages.
• GDP had grown by 0.5% in 2024 Q2, 0.2% weaker than had been expected in the August Report, and 0.1% weaker than the earlier outturn had indicated at the time of the MPC’s previous meeting. Through the second half of 2024, GDP was projected to grow at a somewhat slower rate than in Q2 – headline GDP growth is expected to fall back to its recent underlying pace of around 0.25% per quarter over the second half of this year.
• The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time, relative to the August projections, while the Budget is provisionally expected to boost CPI inflation by just under 0.5% at the peak.
• Annual private sector regular average weekly earnings growth has continued to fall but remained elevated at 4.8% in the three months to August; the MPC judges that the labour market continues to loosen, although it appears relatively tight by historical standards.
• Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate but 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.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 19 December 2024.

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?

As widely expected, the Bank of Canada (BoC) moved ahead with its fifth consecutive rate cut by reducing the overnight rate by 50 basis points (bps), bringing it down to 3.25%. This latest policy action also marked the second successive reduction of 50 bps as the Canadian economy grew by an annualized 1% in the third quarter, below the central bank’s projections, while growth in the fourth quarter also poses the risk of missing forecasts.

However, policymakers suggested that there will not be any further aggressive rate cuts next year, and officials also dropped the statement that borrowing costs are due to be lowered should their base case hold. These unexpected remarks strengthened the Loonie causing USD/CAD to reverse off Wednesday’s peak of 1.4196 and plunge as low as 1.4119. This currency pair stabilized around 1.4150 at the beginning of Thursday’s Asia session but overhead pressures are likely to build – these are the support and resistance levels for today.

Support: 1.4200

Resistance: 1.4080

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 Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Oil prices jumped more than 2.5% overnight after the European Union agreed to an additional round of sanctions threatening Russian oil flows that could tighten global crude supplies. In addition, the EIA crude oil inventories experienced a larger-than-anticipated drawdown for the third consecutive week as 1.4M barrels of crude were removed from storage versus the estimate of 1.0M barrels. WTI oil surged to a high of $70.53 per barrel on Wednesday before easing slightly as Asian markets came online – this benchmark is expected to remain elevated.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Europe Fundamental Forecast | 12 December 2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 106.57

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

1st support: 105.30
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once more.

1st resistance: 107.57
Supporting reasons: Identified as a swing high resistance that aligns with the 161.8% Fibonacci extension, 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: 1.0529

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

1st support: 1.0430

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

1st resistance: 1.0605
Supporting reasons:  Identified as an overlap resistance close to the 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

EUR/JPY:

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: 159.24

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

1st support: 157.64

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

1st resistance: 162.11
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

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: 0.8268
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 0.8229

Supporting reasons: Aligns with the 127.2% Fibonacci extension, indicating a potential level where price could find support once more.

1st resistance: 0.8310
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation toward the 1st resistance. Additionally, the price is above the ascending trendline, indicating bullish momentum in the market.

Pivot: 1.2718

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

1st support: 1.2613

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

1st resistance: 1.2833
Supporting reasons: Identified as an overlap resistance close to 61.8% Fibonacci retracement and the 78.6% Fibonacci projection, indicating a strong level of resistance.

GBP/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

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

Pivot: 192.33

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: 190.16
Supporting reasons: Identified as a pullback support, indicating a key level where price could find support once more.

1st resistance: 195.64
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.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 0.8855

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

1st support: 0.8796
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 0.8917
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

USD/JPY:

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: 151.09

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

1st support: 149.55
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 153.41
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.

USD/CAD:

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: 1.4178

Supporting reasons: Identified as a swing-high resistance, indicating an area where selling pressures have intensified. The presence of a bearish RSI divergence adds further strength to the bearish movement.

1st support: 1.4089
Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement, indicating a key level where price could find support once more.

1st resistance: 1.4231
Supporting reasons: Identified as a resistance that aligns with a 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 0.6423

Supporting reasons: Identified as a pullback resistance that aligns with a confluence of Fibonacci levels i.e. the 38.2% and 61.8% retracements, indicating a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of this resistance zone.

1st support: 0.6346
Supporting reasons: Identified as a swing-low support, suggesting a key support area where price could find support once again.

1st resistance: 0.6466
Supporting reasons: Identified as a swing-high resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 0.5809

Supporting reasons: Identified as a pullback resistance that aligns with a 38.2% retracement Fibonacci, indicating a potential area where selling pressures could intensify. 

1st support: 0.5769
Supporting reasons: Identified as a swing-low support, suggesting a key support area where price could find support once more.

1st resistance: 0.5836
Supporting reasons: Identified as an overlap resistance that aligns with 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement. The presence of the red Ichimoku Cloud adds further significance to the strength of this resistance zone.

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 44,082.42

Supporting reasons: Identified as an overlap support that aligns with a confluence of Fibonacci levels i.e. a 50% retracement and a 61.8% projection, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 43,819.07

Supporting reasons: Identified as an overlap support that aligns with a confluence of Fibonacci levels i.e. a 61.8% retracement and a 78.6% projection, indicating a potential level where price could find support once again.

1st resistance: 44,527.60

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

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 20,399.50
Supporting reasons: Identified as a swing-high resistance that aligns with a 61.8% Fibonacci projection, indicating a potential area where selling pressures could intensify.

1st support: 19,688.27

Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, indicating a key level where price could find support.

1st resistance: 20,900.35
Supporting reasons: Identified as a resistance that aligns with a 78.6% Fibonacci projection, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 6,026.60

Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 5,968.70

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

1st resistance: 6,099.30
Supporting reasons: Identified as a swing-high resistance that aligns with the all-time high, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 98,093.04

Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 91,732.90
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 102,934.34
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.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 3,860.50

Supporting reasons: Identified as an overlap resistance that aligns with a 61.8% Fibonacci retracement, indicating a potential area where selling pressures have intensified.

1st support: 3,528.21
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 4,034.95
Supporting reasons:  Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 69.77
Supporting reasons: Identified as a pullback support that aligns with a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 69.16
Supporting reasons: Identified as a pullback support that aligns with a 38.2% Fibonacci retracement, indicating a key level where price could find support.

1st resistance: 71.49
Supporting reasons: Identified as a swing-high resistance that aligns close to a 127.2% Fibonacci extension, 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: 2712.99
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 2665.57

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

1st resistance: 2758.65

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

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The post Thursday 12th December 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 12 December 2024

What happened in the U.S. session?

Both headline and core consumer inflation in the U.S. matched their respective estimates in November, with headline CPI rising from 2.6% to 2.7% YoY while the core remained unchanged at 3.3% YoY. This marked the second consecutive month of acceleration for headline CPI, coming off the low of 2.4% in September as categories such as food, shelter, and transportation continued to see elevated prices. Headline CPI continues to drift further away from the Federal Reserve’s target of 2% while the core remains stubbornly sticky. 

Prior to the release of the latest inflation data, the dollar index (DXY) was sliding lower towards 106.40 but it promptly reversed to rise rapidly and hit an overnight high of 106.79. Demand for the greenback has picked up in a meaningful manner causing this index to register four consecutive trading days of higher gains.

What does it mean for the Asia Session?

After growing steadily since April, employment change slowed noticeably in October with only 15.9K jobs being added to the Australian economy while the unemployment rate remained unchanged at 4.1%. November’s forecast of 26.0K points to a decent rebound in jobs growth but still falls short of the 12-month average of 36.3K. In addition, the unemployment rate is expected to edge higher to 4.2%. Should the latest report point to a ‘softer’ labour market, the Aussie will likely face further headwinds during this session.

The Dollar Index (DXY)

Key news events today

PPI (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from DXY today?

The Producer Price Index (PPI) – which measures wholesale inflation – has accelerated in recent months, especially for the core reading. With November’s forecast pointing to another month of higher prices, the dollar could receive a strong boost later today.  After drifting under the 220K-level since mid-November, unemployment claims unexpectedly edged higher last week with a reading 224K. This week’s estimate of 221K points to a somewhat elevated reading which is higher than the 4-week average of 217K. Higher claims – a sign of labour market weakness – could cause the dollar to come under pressure. Whatever the outcome, traders should brace themselves for higher volatility before the start of the U.S. trading hours.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted unanimously to lower the Federal Funds Rate target range by 25 basis points to 4.50% to 4.75% on 7th November.
• 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.
• 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 17 to 18 December 2024.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

PPI (1:30 pm GMT)

Unemployment Claims (1:30 pm GMT)

What can we expect from Gold today?

The Producer Price Index (PPI) – which measures wholesale inflation – has accelerated in recent months, especially for the core reading. With November’s forecast pointing to another month of higher prices, the dollar could receive a strong boost later today.  After drifting under the 220K-level since mid-November, unemployment claims unexpectedly edged higher last week with a reading 224K. This week’s estimate of 221K points to a somewhat elevated reading which is higher than the 4-week average of 217K. Higher claims – a sign of labour market weakness – could cause the dollar to come under pressure. Whatever the outcome, traders should brace themselves for higher volatility for gold before the start of the U.S. trading hours.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

Labour Force Report (12:30 am GMT)

What can we expect from AUD today?

After growing steadily since April, employment change slowed noticeably in October with only 15.9K jobs being added to the Australian economy while the unemployment rate remained unchanged at 4.1%. November’s forecast of 26.0K points to a decent rebound in jobs growth but still falls short of the 12-month average of 36.3K. In addition, the unemployment rate is expected to edge higher to 4.2%. Should the latest report point to a ‘softer’ labour market, the Aussie will likely face further headwinds during the Asia session.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10th 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

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi fell for the second successive day as it hit a low of 0.5760 on Wednesday. This currency pair stabilized around this level to retrace higher at the beginning of Thursday’s Asia session to hover around 0.5790 – these are the support and resistance levels for today.

Support: 0.5750

Resistance: 0.5830

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

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The yen continued to depreciate on Wednesday driving USD/JPY strongly towards the 153-level. This currency pair hit an overnight high of 152.84 before dipping under 152.50 as Asian markets came online – these are the support and resistance levels for today.

Support: 150.60

Resistance: 153.50

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 31st October, by a unanimous 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.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• While the effects of a 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.
• Comparing the projections with those presented in the previous Outlook for Economic Activity and Prices (Outlook Report), the projected real GDP growth rates are more or less unchanged. The projected year-on-year rate of increase in the CPI (all items less fresh food) for fiscal 2025 is somewhat lower due to factors such as the recent decline in crude oil and other resource prices.
• 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 19 December 2024.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

ECB Monetary Policy Statement (1:15 pm GMT)

ECB Press Conference (1:45 pm GMT)

What can we expect from EUR today?

The European Central Bank (ECB) is widely expected to make its third successive rate cut at its final monetary policy meeting of this year with market consensus pointing to a 25-basis point reduction; this would bring the main refinancing rate down to 3.15%. After which, ECB President Christine Lagarde will commence her press conference where she could shed further light on the deliberations that took place amongst board members and also on the outlook for future monetary policy action. The Euro will most certainly face higher volatility after midday in Europe.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 17th October to mark the second 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 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• 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 Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

SNB Monetary Policy Statement (8:30 am GMT)

SNB Press Conference (9:00 am GMT)

What can we expect from CHF today?

The Swiss National Bank (SNB) is poised to make its fourth consecutive rate cut of this year with another 25-basis point reduction, bringing the policy rate down to 0.75%. With headline and core inflation firmly anchored below the SNB’s target of 2% for almost a year and a half, this central bank is set to make further reductions in 2025. SNB Chairman Martin Schlegel’s press conference will begin half an hour after the policy announcement which could create further headwinds for the franc and potentially lift USD/CHF higher.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• The next meeting is on 12 December 2024.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Despite a strengthening dollar, the pound has shown strong resilience this week with Cable keeping its head above the 1.2700-level. This currency pair climbed above 1.2750 as Asian markets came online and it should continue to edge higher as the day progresses – these are the support and resistance levels for today.

Support: 1.2715

Resistance: 1.2865

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to reduce the Bank Rate by 25 basis points, to 4.75% on 7th November 2024 – one member preferred to maintain the Bank rate at 5.0%.
• 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.
• Twelve-month CPI inflation fell to 1.7% in September but is expected to increase to around 2.5% by the end of the year as weakness in energy prices falls out of the annual comparison; services consumer price inflation has declined to 4.9%.
• CPI inflation is expected to increase to around 2.75% by the second half of 2025 as weakness in energy prices falls out of the annual comparison, revealing more clearly the continuing persistence of domestic inflationary pressures.
• The MPC’s latest projections for activity and inflation are also set out in the accompanying November Report; this forecast is based on the second case where CPI inflation is projected to fall back to around the 2% target in the medium term as a margin of slack emerges later in the forecast period that acts against second-round effects in domestic prices and wages.
• GDP had grown by 0.5% in 2024 Q2, 0.2% weaker than had been expected in the August Report, and 0.1% weaker than the earlier outturn had indicated at the time of the MPC’s previous meeting. Through the second half of 2024, GDP was projected to grow at a somewhat slower rate than in Q2 – headline GDP growth is expected to fall back to its recent underlying pace of around 0.25% per quarter over the second half of this year.
• The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time, relative to the August projections, while the Budget is provisionally expected to boost CPI inflation by just under 0.5% at the peak.
• Annual private sector regular average weekly earnings growth has continued to fall but remained elevated at 4.8% in the three months to August; the MPC judges that the labour market continues to loosen, although it appears relatively tight by historical standards.
• Based on the evolving evidence, a gradual approach to removing policy restraint remains appropriate but 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.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 19 December 2024.

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?

As widely expected, the Bank of Canada (BoC) moved ahead with its fifth consecutive rate cut by reducing the overnight rate by 50 basis points (bps), bringing it down to 3.25%. This latest policy action also marked the second successive reduction of 50 bps as the Canadian economy grew by an annualized 1% in the third quarter, below the central bank’s projections, while growth in the fourth quarter also poses the risk of missing forecasts.

However, policymakers suggested that there will not be any further aggressive rate cuts next year, and officials also dropped the statement that borrowing costs are due to be lowered should their base case hold. These unexpected remarks strengthened the Loonie causing USD/CAD to reverse off Wednesday’s peak of 1.4196 and plunge as low as 1.4119. This currency pair stabilized around 1.4150 at the beginning of Thursday’s Asia session but overhead pressures are likely to build – these are the support and resistance levels for today.

Support: 1.4200

Resistance: 1.4080

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 Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Oil prices jumped more than 2.5% overnight after the European Union agreed to an additional round of sanctions threatening Russian oil flows that could tighten global crude supplies. In addition, the EIA crude oil inventories experienced a larger-than-anticipated drawdown for the third consecutive week as 1.4M barrels of crude were removed from storage versus the estimate of 1.0M barrels. WTI oil surged to a high of $70.53 per barrel on Wednesday before easing slightly as Asian markets came online – this benchmark is expected to remain elevated.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 12 December 2024 first appeared on IC Markets | Official Blog.

The Swiss National Bank is widely expected to cut its key policy rate by a further 25 basis points later today, and Swiss Franc traders are preparing for currency movements as the market adjusts to the latest update. Some market analysts believe that a larger rate cut would be appropriate, given weak inflation data. However, with the rate already at 1%, the majority feel it would be prudent to preserve additional room for further cuts in 2025.

The expectation is for forward guidance from the bank to remain dovish. Analysts will closely monitor both the statement and updates during the press conference to assess the extent of easing anticipated in 2025, with many speculating that rates could return to zero. USD/CHF is currently positioned in the middle of its recent ranges, but traders expect one of the levels to be tested in the coming days. A more dovish stance than expected would likely lead to a swift test of topside resistance just above 0.8900, whereas a less dovish tone could see the pair drop towards trendline support, currently around 0.8760.

Resistance 2: 0.8957 – November High

Resistance 1: 0.8927 – Trendline Resistance

Support 1: 0.8760 – Trendline Support

Support 2: 0.8734 – December Low

The post Trade the USDCHF on the Swiss National Bank Rate Decision first appeared on IC Markets | Official Blog.

US Tech Rallies After Inflation Numbers – Nasdaq up 1.8%

US Tech Stocks surged higher in trading yesterday with the Nasdaq notching up another record high after inflation data came in on expectations, all but locking in a rate cut from the Fed next week. The Nasdaq powered to a new high, closing up 1.76% on the day, followed by the S&P which added 0.82% whilst the Dow lost ground, falling 0.22% by the close. The greenback continued to push higher, the DXY adding another 0.27% to close at 106.65, following US treasury yields which after an initial post data dip, rallied well, the 2-year finishing up 1 basis point at 4.153% and the benchmark 10-year gaining 4.7 basis points to 4.273%. Oil prices jumped higher after the EU announced further sanctions against Russian oil, Brent gaining 1.87% to $73.54 and WTI rising 2.46% to $70.28. Gold also continued its recent recovery as geopolitical concerns pushed it higher, closing the day up 0.91% at $2,718.19.

FX Traders Prepare for More Rate Cuts

With the exception of the resilient RBA, central banks are embracing interest rate easing cycles with gusto in the current environment and FX traders are preparing for more moves in currencies in the days and weeks ahead. The Bank of Canada has already delivered a 50-point cut this week and today we are expecting 25-points from both the Swiss National Bank and the European Central Bank with the Federal Reserve highly likely to follow suit next week after last night’s CPI data drop. With these cuts now largely priced in to currency levels, the volatility is likely to come with any change in guidance from the respective central banks in their statements and press conferences – as occurred with the RBA earlier in the week – and traders feel that updates in the next few days could set fresh trends as we move into the new year.

Hectic Trading Day Ahead for Markets

There is a raft of data and central bank calls scheduled in the sessions ahead today which should see volatility remain high. The Asian session kicks off with the focus squarely on Australian markets with the latest employment data due out early in the day, expectation is for 26k new jobs to have been added in November and the unemployment rate to grind up to 4.2%. The European session has major central bank calls from both the Swiss National Bank and the European Central Bank with cuts expected from both and the New York session see’s more inflation data released in the form of the PPI numbers as well as the weekly unemployment claims data release. All of the above have the propensity to push their respective markets hard and traders are expecting little respite as we progress through the day.

The post General Market Analysis – 12/12/24 first appeared on IC Markets | Official Blog.

Dear Trader,

Please find our updated trading schedule for the Christmas, Boxing Day and New Year’s Day  holidays below.

Liquidity over the holidays is expected to be particularly thin so please take the necessary precautions to ensure you are not affected by increased volatility, spreads and intermittent pricing.

We will have staff to assist you throughout the holiday period whenever the market is open. Please be aware that deposits and withdrawals will be delayed when there is a bank holiday. Online funding methods such as credit/debit card, PayPal, Neteller, Skrill etc. will still be processed instantly.

We would like to take this opportunity to thank you for your business over the last year. 2024 has been a year of growth and change for IC Trading as we endeavor to bring you the best trading conditions and client experience possible.

We wish for an enjoyable holiday season and a prosperous 2025 for you and your family.

All times mentioned below are Platform time( GMT +2)

MT4

Forex & Crypto:

Precious Metals:

Spot Energies:

Indices:

Energy Futures :

Soft Commodities Futures:

Indices Futures:

Bonds Futures:

Equities:

cTrader

Forex & Crypto:

Precious Metals:

Spot Energies:

Indices:

Kind regards,

IC Markets Global.

The post Holiday Trading Schedule Dec 2024– Jan 2025 first appeared on IC Markets | Official Blog.

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