What's Moving Markets Today

Market Overview

Despite expectations of a rate cut this Thursday, the dollar gained strength as analysts anticipate the Federal Reserve may not meet these expectations, a trend continuing from the Trump administration.

On December 17, 2024, global stock markets showed mixed results. In the U.S., the Dow Jones fell 0.3% to 43,717.48, marking an eighth consecutive day of losses. The S&P 500 rose 0.4% to 6,074.08, and the Nasdaq Composite gained 1.2% to 20,173.89, driven by strong tech performance despite Nvidia's 3.4% drop.

European markets struggled, with the FTSE 100 down 0.5%, Germany's DAX declining 0.5%, and France's CAC 40 falling 0.7%, amid concerns over economic growth and inflation.

In Asia, Chinese shares declined, with the Shanghai Composite down 0.2% and Hong Kong's Hang Seng Index falling 0.9%, while the Nikkei 225 remained flat.

Overall, investor sentiment is mixed, influenced by strong U.S. tech results, inflation concerns in Europe and Asia, and upcoming central bank meetings that may impact market dynamics.

Market Analysis

GOLD - Gold prices remain consolidated but have seen slight losses against the dollar despite widespread expectations of a rate cut. November U.S. retail sales came in better than expected, adding to the hesitation in the gold market. Many traders anticipate a stronger dollar in the coming days, leading to reduced enthusiasm for gold buying. Technical indicators show increased selling momentum, with the RSI printing overbought levels and the MACD crossing lower, signaling potential for continued selling.

SILVER - Silver prices are consolidating, hovering near 30.6675. While the metal has enough momentum to attempt another swing low, the RSI also shows overbought levels, indicating stronger selling pressure. The MACD is similarly aligned with increased selling momentum, though price action suggests a possible upward turn if buyers re-enter the market.

DXY - Markets anticipate a 25-basis-point interest rate cut from the Federal Reserve at its upcoming meeting, with a 97% probability according to the CME's FedWatch tool. Marvin Loh from State Street mentioned that while the dollar could face pushback due to its strong performance this year, it may remain robust due to U.S. exceptionalism and ongoing global market challenges.

Theres also speculation that the Fed might not deliver the expected rate cut, contributing to the dollar's strength. Technical analysis indicates the dollar is consolidating above 106.8, showing bullish momentum despite some overbought signals from the RSI, suggesting continued buying strength.

GBPUSD - The pound gained against the dollar in yesterdays trading, supported by unexpectedly strong UK employment data, which reported a rise of 0.3K compared to the anticipated 28.2K. However, price action remains limited until it reaches the previous swing high. MACD movement is flat, while the RSI indicates sufficient strength to maintain buying pressure. Nevertheless, there is potential for a bearish continuation after a few more price prints.

AUDUSD - The Australian dollar is under pressure, dropping below 0.63407 amid rising geopolitical tensions in Israel and Ukraine, which have made risk-sensitive assets less appealing. The MACD and RSI both signal increased selling volume and momentum, suggesting a continuation of the bearish trend.

NZDUSD - The New Zealand dollar continued its bearish trend following yesterday's trading session, with technical divergence supporting increased selling momentum. Both the MACD and RSI confirm a strong bearish run, and further downside is expected.

EURUSD - The euro is consolidating between the 1.04672 range and relevant resistance levels. MACD readings show bearish momentum, while the RSI indicates continued selling after a slight adjustment from oversold conditions. While a minor upside retracement is possible, overall price action suggests a continuation of the downward trend. The euro also weakened following data showing a worsening business climate in Germany, although investor sentiment showed some improvement.

USDJPY - The yen recovered some losses after prices dipped slightly above 153.868. The RSI indicates oversold conditions, signaling potential upside momentum, although the MACD remains aligned with continued selling pressure. A shift in overall price momentum suggests further yen strength could develop if the market breaks below previous swing lows.

USDCHF - The Swiss franc is showing increased buying momentum, with the RSI signaling oversold levels. While the MACD has recently crossed lower, current price action points to a possible end to the pullback, with upward momentum resuming after prices breached 0.89431.

USDCAD - The Canadian dollar continues to weaken, with prices reaching 1.44440. Both the MACD and RSI indicate a healthy upward trend, and there appears to be little resistance to further gains in the current environment.