Markets ready to get back to fuller form

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The door is now open for the next major upside extension towards the 2018 high at 1.4377. Setbacks should be well supported above 1.2500 on a monthly close basis.

• R2 1.2614 – 20 December high – Strong
• R1 1.2500 – Psychological –Medium
• S1 1.2352 –  2 January low – Medium
• S2 1.2300 – 22 April/2024 low – Strong

GBPUSD – fundamental overview

The latest mortgage approvals data out of the UK showed a dip, though this was shrugged off. Most of the price action we've seen of late is profit taking on long US Dollar exposure after a big run for the Buck. Dealers also cite plenty of demand for the Pound from medium and longer term players. Key standouts on Monday’s calendar come from German, Eurozone and UK PMI reads, German inflation, Canada and US PMI reads, and US factory orders.

USDJPY – technical overview

The market is looking to resume the longer-term uptrend after an intense correction in 2024. A higher low is ideally sought out above 140.00 in favor of a bullish continuation. The October monthly close back above 150.00 strengthens the case for longer-term uptrend resumption.

• R2 159.45 – 12 July high – Strong
• R1 158.09 – 26 December high – Medium
• S1 156.02– 31 December low – Strong
• S2 154.43 – 19 December low – Medium

USDJPY – fundamental overview

BOJ Governor Ueda was on the wires saying the central bank would increase interest rates if economic conditions continued to improve, with the timing dependent on the economy and inflation. There hasn't been much reaction in the Yen which is confined to tight consolidation. Key standouts on Monday’s calendar come from German, Eurozone and UK PMI reads, German inflation, Canada and US PMI reads, and US factory orders.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. A monthly close back above 0.7000 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6400 – Figure – Medium
• R2 0.6340 – 18 December high – Medium
• S1 0.6179 – 31 December 2024 low – Medium
• S2 0.6170 – 2022 Low – Strong

AUDUSD – fundamental overview

The Australian Dollar is enjoying a small recovery rally helped along by the latest economic data out of Australia and China. Aussie PMI reads and China services PMI reads came out better than expected. Key standouts on Monday’s calendar come from German, Eurozone and UK PMI reads, German inflation, Canada and US PMI reads, and US factory orders.

USDCAD – technical overview

A sustained hold above 1.3000 over the past several months signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4500-1.5000 area, exposing a retest of the 2020 high just ahead of 1.4700. Setbacks should be very well supported ahead of 1.3500.

• R2 1.4500 – Psychological – Strong
• R1 1.4468 – 19 December/2024 high – Medium
• S1 1.4335– 20 December low – Medium
• S2 1.4304 – 18 December low – Strong

USDCAD – fundamental overview

Trading conditions will thin out dramatically between now and year end on account of the holiday season. Expect bigger picture themes to dictate direction and flow. Key standouts on Monday’s calendar come from German, Eurozone and UK PMI reads, German inflation, Canada and US PMI reads, and US factory orders.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5500 will intensify bearish price action.

• R2 0.5759 – 18 December high – Strong
• R1 0.5673 – 20 December high – Medium
• S1 0.5587 – 2 January/2025 low – Medium
• S2 0.5512 – 2022 Low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar is enjoying a small recovery rally helped along by the latest economic data out of China. China services PMI reads came out better than expected. Key standouts on Monday’s calendar come from German, Eurozone and UK PMI reads, German inflation, Canada and US PMI reads, and US factory orders.

US SPX 500 – technical overview

The longer term uptrend remains intact and dips continue to be exceptionally well supported. Critical support comes in at 5679, with only a break back below this level to compromise the structure and open the door for a more significant corrective decline. Until then, the focus remains on a continued push to fresh record highs.

• R2 6200 – Round Number – Strong
• R1 6112 – 16 December/Record high – Medium
• S1 5817 – 20 December low – Medium
• S2 5697 – 4 November low – Strong

US SPX 500 – fundamental overview

Investors are feeling better about a soft landing in the US economy. Moreover, there has been a fresh wave of market optimism in anticipation of a market bullish Trump presidency. It will however be important to keep an eye on inflation, bigger picture economic data and the latest shift in the Fed dot plot. Any of these variables are capable of easily ruffling some feathers and we've already seen a little of this in the aftermath of the latest Fed decision.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and this next major upside extension into the 3000 area. Setbacks should now be well supported above 2500 on a monthly close basis.

• R2 2791 – 31 October/Record high – Strong
• R1 2727 – 12 December high – Medium
• S1 2537 – 14 November low – Medium
• S2 2500 – Round Number – Strong

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported over the coming months.