Fundamental & Technical Analysis by Coach Mark RoboAcademy during 23 – 27 December 2024

Hello everyone, welcome to the weekly analysis of currency pairs EUR/USD, GBP/USD, and XAU/USD for the fourth week of December, from 23 – 27 December 2024.

EUR/USD, “Euro vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting EUR/USD This Week:

European and U.S. Economic Data:

• Germany IFO Business Climate Index (December 23): If the index exceeds expectations, it could positively impact the euro, reflecting confidence in Germany’s economy.
• U.S. Durable Goods Orders (December 23): If the data comes in better than expected, it may strengthen the U.S. dollar and pressure the EUR/USD pair.
• Partial Market Closure in Europe and the U.S. for Christmas Eve (December 24): Trading activity may be light, potentially leading to uncertain price movements.
• Market Closure for Christmas Day (December 25): No major economic events are scheduled.
• Partial Market Closure in Europe for Boxing Day (December 26): Market volatility may decrease; however, U.S. markets remain open.
• U.S. PCE Price Index (December 27): The Core PCE Price Index, a key inflation indicator for the Federal Reserve, could strengthen the U.S. dollar and pressure the euro if it comes in higher than expected.

Technical Analysis

Last week, the price retested the support level at 1.03350 and managed to hold, indicating a potential rebound towards the resistance level at 1.04600. If a clear Price Action signal appears on the Sell side near this resistance, it could present an opportunity to open a Sell order for another downward move.

However, trading this week, which marks the final stretch of the year, requires extra caution. The extended holiday period may result in low market liquidity, potentially causing limited price movement.

GBP/USD, “Great Britain Pound vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting GBP/USD This Week:

U.K. and U.S. Economic Data:

• U.K. CBI Realized Sales (December 23): This index reflects the sentiment of the U.K. retail sector. If the figure exceeds expectations, it could support the British pound.
• U.S. Durable Goods Orders (December 23): Strong data from the U.S. could strengthen the dollar and exert downward pressure on the British pound.
• Partial Market Closure in Europe and the U.S. for Christmas Eve (December 24): Volatility may decrease as trading volumes decline.
• Market Closure for Christmas Day (December 25): No major economic events are scheduled.
• U.K. Market Closure for Boxing Day (December 26): The U.K. financial market will remain inactive, and the pound is likely to experience little movement on this day.
• U.S. PCE Price Index (December 27): This inflation indicator, closely monitored by the Federal Reserve, could strengthen the dollar if the figure comes in high, putting pressure on the GBP/USD pair.

Technical Analysis

The price has tested the support level at 1.24800 and bounced upward, indicating a potential retest of the resistance zone around 1.26000. Observing the most recent candlestick in the TF Day timeframe last Friday, there is a noticeable lower wick, reflecting buying pressure towards the end of the session.

However, it may be prudent to wait for clearer signals before considering opening a Sell position again. Close monitoring of price behavior near the resistance level is advised. Additionally, caution is warranted this week due to multiple holidays, which may result in low market liquidity and less pronounced price movements.

XAU/USD, “Gold vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting XAU/USD This Week:

Economic Data Related to Gold:

• Germany IFO Business Climate Index (December 23): If the data reflects weakness in the European economy, investors might turn to gold as a safe-haven asset.
• U.S. Durable Goods Orders (December 23): Strong figures indicating U.S. economic growth could strengthen the dollar and pressure gold prices. Conversely, weaker-than-expected numbers could provide support for gold prices.
• Partial Market Closure for Christmas Eve (December 24): Lower trading volumes may lead to increased gold price volatility.
• Market Closure for Christmas (December 25): No major economic events are expected.
• Partial European Market Closure for Boxing Day (December 26): U.S. market activity may primarily influence gold prices.
• U.S. PCE Price Index (December 27): As a key inflation measure closely watched by the Federal Reserve, higher-than-expected figures could increase the likelihood of the Fed maintaining a hawkish monetary policy stance, strengthening the dollar and pressuring gold prices.

Technical Analysis

In the past week, prices experienced a sharp decline but managed to hold above the critical support level at 2580, followed by a rebound. Currently, the 2650 level is considered a key psychological resistance and could be used as a potential point to open Sell positions.

However, any decision should align with observed price behavior. Similar to trading other currency pairs during this period, extra caution is advised. With multiple holidays this week, market movements may lack clarity or could become highly volatile just before markets close for the holidays. Therefore, it is crucial to implement a robust risk management strategy, especially during the final weeks of the year.

Disclaimer: This article is solely an analysis from the coach at RoboAcademy and is not intended as investment advice in any way. Investing is risky. Investors should study the information before making investment decisions.