Dollar Index Support Spurs Gold Decline; Economic Indicators Spotlight

Dollar Index support prompts Gold to decline, with economic indicators in focus. Explore market trends and key events shaping finances.

The Dollar Index (DXY) experienced a rebound, finding support around 103.10. Consequently, this led to a subsequent climb, putting downward pressure on gold prices. As a result, the precious metal Gold slid towards $2,020/oz and could potentially re-test last week’s crucial support level of $2,000/oz by the end of the day.

Implications for Europe & US Sessions

In the upcoming sessions, market participants are closely anticipating the release of The Conference Board’s Leading Economic Index (LEI) for December. Notably, the LEI contracted by 3.5% between May and November 2023, underscoring the persisting challenges in the economic landscape. Furthermore, housing and labor market indicators exhibited weakness during this period. According to the December estimate, the LEI is poised for another month of decline, prompting the Board to forecast a short and shallow recession in the first half of 2024. Importantly, should there be a more significant-than-anticipated decline in the LEI, it may exert additional downward pressure on the dollar.

Dollar Index (DXY) Outlook

Key News Events Today

CB Leading Index (3:00 pm GMT)

Expectations

The Conference Board’s LEI release for December remains a focal point. Consequently, the contraction in LEI could significantly influence the dollar’s performance. Moreover, the Federal Funds Rate target range holding steady at 5.25% to 5.50% adds a layer of market scrutiny. Notably, the committee has scheduled the next meeting for January 30-31, 2024.

Next 24 Hours Bias: Medium Bearish

Gold (XAU) Analysis

Key News Events Today

CB Leading Index (3:00 pm GMT)

Expectations

Similarly, Gold’s trajectory is closely tied to the LEI release. Should there be a stronger-than-expected decline in LEI, it could exert downward pressure on the dollar, consequently potentially boosting gold prices. As a result, the overall bias for the next 24 hours leans towards Weak Bullish.

Next 24 Hours Bias: Weak, Bullish

The Australian Dollar (AUD) Update

Key News Events Today

No major news events.

Expectations

After declining over the past three weeks, the Australian Dollar demonstrated resilience and opened strongly today. Furthermore, the Reserve Bank of Australia (RBA) maintained the cash rate target at 4.35%, expressing concerns about high inflation. Looking ahead, the RBA has scheduled its next meeting for February 6, 2024. Additionally, the current bias is leaning towards Medium Bullish for the next 24 hours.

Next 24 Hours Bias: Medium Bullish

Dollar Index Support Spurs Gold Decline; Economic Indicators Spotlight

The Kiwi Dollar (NZD) Overview

Key News Events Today

No major news events.

Expectations

The New Zealand Dollar exhibited strength today, marking a rebound after a 3.3% decline in 2024. Furthermore, the Monetary Policy Committee kept the OCR unchanged at 5.50%, solidifying its stance. Consequently, the NZD’s bias for the next 24 hours is assessed as Medium Bullish, signaling a potential upward trajectory in the immediate market outlook.

Next 24 Hours Bias: Medium Bullish

The Japanese Yen (JPY) Assessment

Key News Events Today

No major news events.

Expectations

In the early months of 2024, the yen weakened considerably, consequently prompting a surge in the USD/JPY pair. Further reinforcing its commitment to Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control, the Bank of Japan has scheduled its next meeting for January 23, 2024, maintaining a Weak Bearish bias for 24 hours.

Next 24 Hours Bias: Weak Bearish

The Euro (EUR) Update

Key News Events Today

No major news events.

Expectations

The Euro faced a weakening trend at the beginning of 2024; however, recent momentum suggests a potential rebound. Despite this, the European Central Bank (ECB) kept key interest rates unchanged, expressing significant concerns about inflation. The next ECB meeting is scheduled for January 25, 2024, consequently indicating a Weak Bullish bias for the currency in the next 24 hours.

Next 24 Hours Bias: Weak, Bullish

The Swiss Franc (CHF) Outlook

Key News Events Today

No major news events.

Expectations

At the outset of 2024, the Swiss Franc experienced a weakening, concurrently coinciding with the gaining momentum of USD/CHF. Consequently, the Swiss National Bank (SNB) maintained the policy rate unchanged as we approached the next SNB meeting scheduled for March 21, 2024. An anticipated weak bullish bias will persist for the next 24 hours.

Next 24 Hours Bias: Weak, Bullish

The Pound (GBP) Report

Key News Events Today

No major news events.

Expectations

Despite demonstrating resilience, the Pound experienced a recent decline. Subsequently, the Bank of England’s Monetary Policy Committee voted to maintain the Official Bank Rate. Anticipating the future, the next meeting is scheduled for February 1, 2024, with a Medium Bullish bias for the next 24 hours.

Next 24 Hours Bias: Medium Bullish

The Canadian Dollar (CAD) Analysis

Key News Events Today:

No major news events.

Expectations

Amidst a more robust demand, the Canadian Dollar experienced a decline, subsequently leading to a tumble in USD/CAD. Simultaneously, as the Bank of Canada maintained the overnight rate at 5.0%, there are notable considerations for the upcoming market dynamics. Consequently, looking ahead to the next meeting scheduled for January 24, 2024, there is an anticipated medium bearish bias for the next 24 hours.

Next 24 Hours Bias: Medium Bearish

Oil Market Assessment

Key News Events Today:

No major news events.

Expectations

Despite the increased projections for global crude demand, oil prices are under pressure. This is primarily due to concerns about economic growth in China and other international economies. Moreover, geopolitical tensions may continue to exert influence on oil markets.

Next 24 Hours Bias: Medium Bearish

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