Last week, several key economic indicators showed a decline globally. In the United States, durable goods orders fell by varying percentages, with a contraction of 1.1%, while core durable goods orders decreased by 0.1%. The unemployment claims index dropped to 219,000, and the consumer confidence index decreased to 104.7 points. In the UK, GDP contracted by 0.0% on a quarterly basis, while Canada’s GDP grew by 0.3% on a monthly basis. In Japan, retail sales increased by 2.8% year-on-year, while industrial production fell by 2.3%. Additionally, the Tokyo Consumer Price Index showed a year-on-year growth of 2.4%.
Market Analysis
USD/JPY Pair
The USD/JPY pair continues its upward trend, reaching 158.08 on Thursday, December 26, 2024, marking its highest level since July 17, 2024. It is currently stabilizing around the 158.00 level. The pair has risen by 13% since the low of September 16, 2024, when it was at 139.57, reaching its peak on December 26, 2024. It has also increased by about 12% year-to-date. Factors putting pressure on the Japanese yen include the widening gap between Japanese and US government bond yields, the strength of the US dollar, and cautious remarks by Bank of Japan Governor Kazuo Ueda. The Relative Strength Index (RSI) is currently at 68 points, indicating bullish momentum for the USD/JPY pair.
Gold
Gold prices have been trading sideways for two months between $2,500 and $2,700 per ounce, with no clear direction. Factors supporting gold prices include, but are not limited to, inflation in the US, geopolitical tensions between Russia and Ukraine, and continued gold purchases by central banks in the coming period. On the other hand, factors pressuring gold prices include the strength of the US dollar. The RSI for gold is currently around 46 points, suggesting negative momentum for the yellow metal.
CAC40 Index
The CAC40 index has been trading sideways since the beginning of November this year, between 7,100 and 7,500 points, without a clear upward or downward trend. The index has declined by about 3% since the beginning of the year. The RSI for the CAC40 is currently at 52 points, indicating positive momentum. Meanwhile, the MACD indicator shows a downward crossover between the blue MACD line and the orange signal line, providing negative momentum for the CAC40.
Key Events This Week
Markets are anticipating several important economic indicators and data releases this week:
- Today, the Existing Home Sales index will be released in the US.
- On Tuesday, the Manufacturing and Non-Manufacturing PMI indices will be released in China.
- On Thursday, markets will be watching the Caixin Manufacturing PMI in China, as well as the Manufacturing PMI indices for Australia, the Eurozone, the UK, and the US, in addition to the Unemployment Claims and the Manufacturing PMI from the Institute for Supply Management (ISM) in the US.
- Finally, on Friday, the Services PMI and Non-Manufacturing PMI from ISM in the US will be released.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
