During Tuesday's Asian session, the AUDUSD extended gains to 0.6600, continually forming higher highs and higher lows. Optimistic comments from RBA Governor Michele Bullock and a comprehensive decline in the US dollar supported the asset.

The latest data from Australia showed a slight increase in the Westpac Consumer Confidence Index, rising by 2.7% month-on-month to 82.1 in December. Despite the increase in consumer confidence, Westpac's analysis still describes this sentiment as "still very weak" and emphasizes that "consumers remain far from upbeat."

RBA Governor Michele Bullock expressed confidence, stating, "Don't think we are falling behind in the inflation fight." Bullock emphasized a cautious approach, closely monitoring data, and underscored the RBA's commitment to maintaining employment growth. The central bank's goal is to prevent inflation expectations from "getting out of control."

Market observations suggest that recent consumer confidence survey results indicate a higher threshold for further tightening policies, echoing the central bank's emphasis on "slowing growth" and the "particularly soft household sector."

However, it is crucial to note the central bank's stance on inflation. The RBA has stated a "very low tolerance for any upside surprises" in inflation rates, making the upcoming inflation data and the detailed quarterly report scheduled for release at the end of January critical for the February policy decision.

The Federal Open Market Committee (FOMC) began its two-day monetary policy meeting on Tuesday, with the market widely expecting no change in interest rates during the last meeting of the year. Market participants will closely watch the statement for signals of possible rate adjustments next year. On Tuesday, investors will also focus on the US November Consumer Price Index (CPI) report, providing insights into the potential monetary policy path.

The AUDUSD has been in a downtrend throughout the year, and the current trend is in a correction phase. As 2023 is coming to an end, this retracement is approaching the 50% Fibonacci retracement level of the year's high and low, with a potential target at the 0.6800 level to seek higher premiums.

The AUDUSD rebounded today, continually forming higher lows and higher highs, but it remains within the range below 0.6689.

Currently, the asset tends to maintain a neutral stance in intraday trading, with moderate downside risks. Breaking below the 0.6524 level will confirm the rejection of the upward structure and restore the decline from the short-term peak at 0.6689 to 0.6500 and below. However, if the lows continue to rise and break above 0.6689, it will restore the uptrend initiated from the bottom at the 0.6269 level and aim for a further test of the average of this year's high and low at 0.6715. Further gains may extend to the 0.6800 level.

From a larger perspective, we have not confirmed the completion of the downtrend starting from 0.8006. The price action starting from 0.6169 (2022 low) may be just a midterm corrective pattern, with the downtrend from 0.7156 being the second phase. Currently, range trading should be between 0.6169 and 0.7156 (2023 high) before further development.

Overall, the long-term outlook for the AUDUSD remains unclear. Although confirmation of the current trend will come with another correction, a decisive break above 0.6689 is needed to dispel these doubts. The recommended trading strategy is to buy on dips.

Trading Direction: Long

Entry Price: 0.6573

Target Price: 0.6795

Stop Loss: 0.6500

Valid Until: 2023-12-26 23:55:00

Support: 0.6550, 0.6525, 0.6521

Resistance: 0.6620, 0.6676, 0.6690

During Tuesday's (December 12th) Asian session, WTI crude oil oscillated slightly, and it is currently trading at 71.6 dollars/bbl. Yesterday, the oil price fluctuated in a narrow range, dropping to 70.5 in the Asian session, then pulling up to 71.5 before the U.S. session, and finally closing higher. In general, the overall movements were complicated yesterday. The market seems to have entered a short-term equilibrium phase. Although the oil price has appreciated for 3 consecutive days, the oil bulls are still not optimistic. The market remains cautious about the upcoming trend. It's really hard to choose a direction at a turning point, so we need to be patient at this time. Yesterday, oil prices once fell to the lower area of our suggested trading range, and investors went long at 70.5 would earn a profit of 1 dollar. In the short term, oil prices may stop declining and rebound, but without huge momentum. We may not see a clear direction until the end of this year. However, I still expect a bullish trend in oil prices in the first quarter of next year with a target of over $80. Before that, we expect bears to push oil prices lower to the range of 65-67 after meeting resistance. Then the technical bottom will be stronger, and investors will be more confident to go long at that time. In the short term, we should not expect a clear one-way trend, and investors could buy low and sell high during the range today. When everything is ready, we can catch the opportunity to trade in a steady market.

News: Affected by the storm, Russia's December crude oil loading at the Black Sea Novorossiisk port declined from the initial planned 2.14 million tons to 1.72 million tons. Russian Deputy Prime Minister Novak stated that if the market situation requires, major oil producers in OPEC+ will be ready to make a decision.

Today's focus: Investors should focus on tonight's U.S. CPI and API crude oil inventories. More importantly, we should monitor Thursday's retail sales data as well as the Fed's rate decision on early Thursday morning when the dot plot will be shown. 

Oil prices maintained complex movements during the last trading session. It closed the daily chart with a doji star after a wide range of oscillations and achieved 3-day growth. Moreover, a morning star pattern has shown, and the MACD tends to form a golden cross in the oversold area in the daily chart, implying oil prices may extend the appreciation. At the same time, the MACD golden cross in the 4H chart is widening, and Bollinger Bands also are expanding. Thus, oil prices may reach a new high today. If crossing above 72.5, WTI crude oil may climb up to 73.8. However, if WTI crude oil is suppressed by 72.5, it may return to the support at 70.5. Today, WTI oil price is expected to fluctuate in the range from 70.5 to 73.8, in which we can buy low and sell high in a short term.

Trading direction: Long

Entry price: 70.500

Target price: 73.800

Stop loss: 70.000

Support: 70.500/67.000

Resistance: 72.500/74.500

During the Asian session on Tuesday (December 12), spot gold rose slightly and is currently trading around $1985. Yesterday, gold prices rebounded weakly in the Asian session, only rising to $2008 before fluctuating downward below $2000. In the U.S. session, gold prices extended the decline to the $1976 level and finally closed slightly above $1980. Gold was weak throughout the day as the market's deviated expectations were corrected. Yesterday, the profit margin of going short was $20, but going long at low suffered a small loss of $5. The overall profit was acceptable. Today, the U.S. CPI data will be released. Inflation is expected to be lower as crude oil prices have been declining recently. What's more critical is the Fed's interest rate decision to be published in the early hours of Thursday as well as the latest dot plot, which will play a decisive role in the future interest rate path. The market is pricing in a larger-than-expected rate cut next year. As the U.S. economic data has shown clear signs of a slowdown since November, perhaps the Fed will be more dovish. However, it may not release a dovish signal to make the market expect excessive rate cuts. At present, the probability of an interest rate cut in March next year has dropped significantly, but regardless of what kind of decision and dot plot are published, the market will price in again. Trading before a trend is formed is one trading logic, and the trend will not end in a day. For gold prices, we should focus on the first support near the 1965 level, and further support near 1935. If gold falls deep into this area, no matter what kind of dot plot appears, next year's trading is destined to follow the logic of interest rate cuts. Then, gold prices may have fall enough. It will be a good opportunity to gradually build up long positions.

Data: Nonfarm payrolls rose by 199,000 in November, beating expectations of 180,000. The unemployment rate fell from 3.9% to 3.7% and the labor force participation rate rose to 62.8%, indicating that the job market remains strong.  

Today, investors need to pay attention to the US CPI tonight, Thursday's retail sales data, and the Fed's interest rate decision in the early hours of Thursday morning, which will include economic forecasts and dot plots.  

Gold prices fell in a weak pattern in the Asian session last trading day, and came under pressure at the 2008 level. In the American session, gold prices fell sharply, once falling to 1976, and finally closed a full bear candle. Yesterday gold prices returned to the first support in the 1986-1990 area as shown in the chart below, but obviously, there are no signs of a rebound. Next, the second support area will be the 1935-1942 zone, which is the bottom of the local double-bottom pattern, where the strength is more reliable. However, before the gold price reaches this position, it is still difficult to change the weakness and bears will remain prevailing. The price in the 1-hour chart is still hovering in the oversold area and has formed a golden cross, so an hourly rebound is possible today. Initial resistance can be seen in the 1986-1990 area, and further resistance may be at the 2000-2009 area. Today, investors should continue to make range trading, and the reference range is 1965-2000 where you can buy low and sell high.

Trading Direction: Long

Entry Price: 1965

Target Price: 2000

Stop Loss: 1960

Support: 1965.000/1950.000

Resistance: 1986.000/2009.000

The New Zealand Dollar (NZD) faces a challenging week ahead as it loses momentum in its pursuit of fresh multi-month highs against both the Pound and U.S. Dollar. The earlier anticipated strength has faded, posing a setback for the Kiwi amidst a busy global FX landscape. The GBP/NZD pair's downside momentum wanes, raising the possibility of a return to the October-November trend zone. Meanwhile, NZD/USD experiences a cooling off after a robust rally, prompted by overbought conditions and a rebound in the U.S. Dollar following a strong jobs report.

In our previous Week Ahead analysis, we expected the NZD to maintain pressure on the Pound and U.S. Dollar, driven by strong momentum as the best-performing currency in the preceding month and week. However, the Kiwi's failure to sustain this momentum suggests a missed opportunity to reach new highs.

The GBP/NZD pair, which was anticipated to test the crucial 2.0266 support zone, may now veer back into the October-November trend zone above 2.0583 and 2.0775. The Pound faces a busy week with significant data releases and a Bank of England decision, influencing the direction of GBP/NZD.

The NZD/USD pair experiences a correction after becoming overbought, with the RSI surpassing 70. Despite the recent strength driven by softer U.S. data and expectations of Federal Reserve rate cuts in 2024, a strong U.S. jobs report prompts a Dollar rebound, limiting the NZD's gains. The market will closely monitor the Federal Reserve policy meeting, with any pushback from the Fed likely to strengthen the USD and weaken the NZD.

Domestically, New Zealand's GDP release on Wednesday will be a key highlight, expected to show a 0.2% quarter-on-quarter growth in the third quarter. A stronger-than-expected GDP figure could provide a boost to the Kiwi, aligning with market expectations for reduced interest rate cuts in 2024.

The technical analysis of the GBP/NZD pair suggests a lack of strength, with a keen eye on the 2.055 resistance area. Traders anticipate a bearish reaction, aiming for a decline to the 2.048 level.

In summary, the New Zealand Dollar navigates through lost opportunities and global headwinds, with key factors such as the GBP/NZD pair's trend, USD strength, and domestic GDP data shaping its trajectory in the week ahead. Investors should stay vigilant in a landscape where market dynamics are influenced by both domestic and international factors.

ENTRY PRICE : 2.0500

STOP LOSS : 2.0600

TAKE PROFIT : 2.0200

EXP : 25/12/23

The Japanese yen has experienced a sharp decline, falling below the critical 145 per dollar threshold, driven by shifting investor sentiments regarding potential interest rate hikes from the Bank of Japan (BOJ). Amidst conflicting signals from the central bank and the backdrop of stronger-than-expected US jobs data, the yen's recent surge to four-month highs has been reversed. This article delves into the factors contributing to the yen's depreciation, including insights from BOJ officials and the impact of global economic trends, offering a comprehensive analysis for financial enthusiasts.

In a surprising turn of events, the Japanese yen has witnessed a rapid decline, slipping below the crucial 145 per dollar mark. This abrupt shift in fortune comes on the heels of heightened speculation and uncertainty surrounding the Bank of Japan's upcoming monetary policy decision, set to take place next week.

Investors, who had initially bet on potential interest rate hikes from the Bank of Japan, are now reconsidering their positions. Bloomberg reports suggest that BOJ officials are not in a rush to implement policy tightening unless concrete evidence of substantial wage growth supporting sustainable inflation emerges. This cautious approach has left investors questioning the timing and severity of any future policy adjustments.

The recent surge in the yen, reaching four-month highs of approximately 141.7 per dollar, was triggered by comments from Bank of Japan Governor Kazuo Ueda. He hinted at the possibility of the central bank abandoning its negative interest-rate policy earlier than anticipated. However, this optimism proved short-lived as market dynamics quickly shifted.

Adding to the yen's woes is the stronger-than-expected US jobs data, which has bolstered the US dollar. This unexpected resilience in the American job market has countered the prevailing narrative that the Federal Reserve might consider cutting rates as early as March 2024. The resulting boost to the greenback has further exacerbated the yen's depreciation against the dollar.

Meanwhile, the GBPJPY currency pair has exhibited a noteworthy response to these developments. Bouncing from support levels, the pair has already moved more than 1% today correcting back to the previous resistance whic h is also in confluence with the 61’8% fibonacci rtracement zone  We are now closely monitoring the price action in this zone, with an eye on potential short positions if rejection signals emerge.

As the Japanese yen navigates through a period of volatility, market participants eagerly await the Bank of Japan's monetary policy decision for clarity on the future direction of the currency. The delicate balance between domestic economic considerations and global market shifts underscores the challenges faced by central banks in maintaining stability amidst uncertainty. In the coming days, the yen's trajectory will likely remain closely tied to the nuanced signals emanating from the Bank of Japan and the broader international economic landscape.

ENTRY PRICE  :183.500

STOP LOSS : 185.500

TAKE PROFIT : 180.00

EXP : 25/12/23

The Pound to Canadian Dollar (GBPCAD) faces a challenging week as it retraces from a robust November rally, with key resistance at 1.73. The Federal Reserve's midweek decision looms large for the Canadian Dollar (CAD), influenced by U.S. data and potential dovish tones. Meanwhile, Pound Sterling (GBP) contends with a flurry of UK economic data releases, a Bank of England policy meeting, and the possibility of rate cut discussions. Traders brace for heightened market volatility, exploring the potential impact on GBPCAD trends in the wake of central bank decisions and economic indicators.

The Pound to Canadian Dollar exchange rate (GBPCAD) is witnessing a cooldown after its impressive November surge, signaling a potential shift in momentum. As the pair failed to breach the significant resistance at 1.73, it suggests market participants had strategically placed sell orders, underscoring the predictability inherent in foreign exchange markets.

The recent pullback in GBPCAD aligns with the correction of overbought conditions following November's strong rally. The Relative Strength Index (RSI) touching overbought levels prompted a retracement, allowing market conditions to reset. Additionally, the breach of the upward-sloping trend line raises concerns about further downside in the near term.

This week, the Canadian Dollar faces a pivotal event with the Federal Reserve's decision, a factor highly reflexive to U.S. data and monetary policy. The CAD's correlation with the USD suggests that any dovish tones from the Fed could trigger weakness in the CAD, particularly against the EUR and GBP.

According to analysts, this week will be relatively quiet for Canadian economic data. Instead, the CAD is anticipated to be influenced by its high beta to global growth, low beta to the broad dollar, and short-term sensitivity to oil prices. Any shifts in expectations regarding Federal Reserve rate cuts in 2024 could impact the USD-CAD dynamics, with a potential for USD advances benefiting the CAD.

In contrast, the Pound Sterling faces a data-heavy week, characterized by the Bank of England's policy meeting and releases of wage, GDP, and PMI data. The GBP's reaction to economic indicators is anticipated to be asymmetric, with a stronger response to disappointments due to the recent robust performance of the Pound.

The UK wage data on Tuesday is expected to show a decline in average earnings (total pay) to 7.5% for October, down from 7.9% previously. Wednesday brings the release of UK GDP figures for October, with a consensus estimate of 0.2% month-on-month, up from -0.1% in September. The Bank of England's interest rate decision on Thursday is not expected to result in a rate change, but market attention will focus on guidance regarding potential rate cuts.

The Bank of England has been cautious about market expectations for rate cuts in 2024, and any hawkish forward guidance in their communication could provide support for the Pound. Analysts suggest that maintaining restrictive rates for a prolonged period may be a key focus in the Bank's messaging, aiming to influence real-time bond yields and lending rates.

As GBP's short-term trend weakens and CAD braces for the Fed decision, the currency market is poised for heightened volatility. Traders are advised to monitor key support levels, potential central bank shifts, and economic indicators, as they navigate the evolving landscape of the Pound to Canadian Dollar exchange rate in the week ahead.

The GBPCAD was previously following the upward trend indicated by the rising support line. However, a verified breakout has occurred, leading to a shift in sentiment towards a bearish stance. Anticipating a continued downward movement, we now hold a bearish bias and recommend selling positions.

ENTRY PRICE : 1.70500

STOP LOSS : 1.7200

TAKE PROFIT : 1.64500