The economic events from last week showed mixed results across different countries. In the United States, the Manufacturing PMI fell to 48.3, lower than the expectations (49.4) and previous reading (49.7), indicating a contraction in the industrial sector. In contrast, the Services PMI rose to 58.5, exceeding expectations (55.7) and marking the highest level since March 2022, reflecting strong performance in the services sector. Retail sales increased by 0.7% month-over-month, surpassing expectations (0.6%), while GDP growth in Q3 was 3.1%, higher than expectations (2.8%). In the Eurozone, the Manufacturing PMI dropped to 45.2, lower than expectations (45.3), but in line with the previous reading. On the other hand, the Services PMI showed growth at 51.4, surpassing both expectations and the previous reading (49.5). The annual Consumer Price Index (CPI) in the Eurozone increased by 2.2%, lower than expectations (2.3%) but higher than the previous reading (2.0%). In the UK, the Bank of England decided to keep interest rates at 4.75%, while the Manufacturing PMI dropped to 47.3, and the Services PMI rose to 51.4. Income growth rose by 5.2%, and the unemployment rate decreased to 4.3%. In Canada, the annual CPI grew by 1.9%, below expectations (2.0%). In Australia, the Manufacturing PMI dropped to 48.2, while the Services PMI rose to 50.4. In China, the Fixed Asset Investment Index decreased to 3.3%, lower than expectations (3.5%), while industrial production grew by 5.4% year-over-year, outperforming the previous reading (5.3%) but matching expectations. Retail sales fell by 3.0% year-over-year, lower than expectations (4.6%) and the previous reading (4.8%). The unemployment rate remained stable at 5.0%. In Japan, the Bank of Japan decided to keep interest rates at 0.25%, while the Manufacturing PMI dropped to 49.5, and exports rose by 3.8%, surpassing expectations (2.8%).
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Market Analysis
NZD/USD Pair:
The bearish trend for the NZD/USD pair appears to be dominant in the coming period, as it has dropped by around 12% from its peak on September 30, 2024, at 0.6391, to a low of 0.5608 on December 18. It has also declined by about 11% year-to-date due to the weakness of the New Zealand economy and the strength of the US economy.
The Relative Strength Index (RSI) is currently at 31, indicating bearish momentum for the NZD/USD pair.
The MACD shows a bearish crossover between the blue MACD line and the orange SIGNAL LINE, providing negative momentum for the NZD/USD pair.
Bitcoin:
Bitcoin, the largest cryptocurrency by market capitalization (currently valued at $1.9 trillion), has declined, currently trading around $96,000 after reaching an all-time high of $108,364 on December 17, 2024. Bitcoin has risen by approximately 125% year-to-date.
Notably, Bitcoin ranks sixth among the largest financial assets by market capitalization, behind Apple ($3.85 trillion), Nvidia ($3.30 trillion), Microsoft ($3.25 trillion), Amazon ($2.37 trillion), and Alphabet ($2.35 trillion).
However, several factors continue to support Bitcoin’s price, such as the potential impact from Trump, upcoming US interest rate cuts, increased investor risk appetite, and the fear of missing out on further gains.
The RSI currently stands at 45, indicating bearish momentum for Bitcoin.
The MACD shows a bearish crossover between the blue MACD line and the orange SIGNAL LINE, providing negative momentum for Bitcoin.
Crude Oil:
Crude oil prices have been trading between $70 and $75 per barrel for the past two months, currently hovering around $73. It seems that a sideways trend will continue in this phase, given the prevailing market uncertainty driven by several mixed factors keeping prices within this range.
The RSI for crude oil hovers around the 50-point level, indicating neutrality, with no clear directional trend for oil prices.
S&P 500 Index:
The S&P 500 index has risen by about 25% year-to-date. The index is currently trading below the 20-day moving average (gray) at 6,021 points, but above the 50-day moving average (blue) at 5,927 points. The 200-day moving average at 5,527 points remains a strategic support level. Any downward break of this support could lead to further bearish movement for the S&P 500 index.
The RSI currently stands at 45, indicating bearish momentum for the S&P 500 index.
The MACD shows a bearish crossover between the blue MACD line and the orange SIGNAL LINE, providing negative momentum for the S&P 500 index.
Key Events This Week
Markets are anticipating several important economic indicators and data releases this week:
- Today, the GDP data for the UK and Canada will be released, along with the Consumer Confidence Index in the United States.
- On Tuesday, the markets are waiting for the Building Permits, Durable Goods Orders, and New Home Sales data from the United States.
- On Thursday, the markets will focus on the Unemployment Claims and US Crude Oil Inventories data.
- Finally, on Friday, the Tokyo Consumer Price Index will be released for Japan.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
