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Skerdian Meta•Sunday, January 12, 2025•3 min read
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Last week the employment data further solidified the bullish USD momentum after the strong employment reports, this week the CPI inflation and retail sales should extend the momentum.
Last week started with Services PMI data from Europe which showed a slight improvement in this sector, followed by a jump in inflation for December, but that didn’t help the Euro much, with EUR/USD ending the week near the lows above 1.02. But that’s also due to the USD strength, after a retreat on Monday, following rumours that Donald Trump would not impose heavy tariffs. Stock markets also ended the week lower, after Monday’s jump.
On Tuesday the ISM services and the JOLTS job openings gave the USD a lift, coming on the strong side, while on Wednesday the Unemployment Claims came on the low side. The FOMC minutes from the last meeting didn’t offer anything new. on Friday, the Canadian and US employment reports were strong again, with the NFP coming around 100K above expectations, while the Unemployment Rate ticked lower to 4.1%, which further helped the USD, showing that the employment sector is in good shape.
Today’s Market Expectations
This week the attention will be on the US retail sales and CPI and PPI inflation data for December, which can further solidify the bullish momentum in the USD or retrace it lower. However, we have the CPI inflation and GDP reports from the UK as well, and the employment data from Australia.
This Week’s Upcoming Forex Events:
- Monday:
- NY Fed Inflation Expectations report, providing insights into consumer sentiment about inflation trends.
- Tuesday:
- US NFIB Small Business Optimism Index, gauging the economic outlook among small business owners.
- US Producer Price Index (PPI), offering a measure of inflation at the wholesale level.
- Wednesday:
- UK Consumer Price Index (CPI), reflecting inflation changes in the UK economy.
- US Consumer Price Index (CPI), a key indicator of inflation and a market-moving event.
- Thursday:
- Japan PPI, an early indicator of inflation pressures in the Japanese economy.
- Australia Employment Report, detailing changes in job creation and unemployment.
- UK GDP data, giving insights into the growth trajectory of the UK economy.
- US Retail Sales, a critical measure of consumer spending.
- US Weekly Jobless Claims, highlighting labor market health.
- US Import Prices, shedding light on cost pressures from global trade.
- US NAHB Housing Market Index, assessing homebuilder sentiment.
- New Zealand Manufacturing PMI, measuring activity levels in the manufacturing sector.
- Friday:
- China Activity Data, including industrial production and retail sales, offering a snapshot of economic momentum.
- UK Retail Sales, reflecting consumer activity in the retail sector.
- US Housing Starts and Building Permits, indicating the health of the housing market.
- US Industrial Production and Capacity Utilization, assessing output efficiency in manufacturing and utilities.
Last week the USD started it on the back foot after the rumours for no tariffs, but on Tuesday the price action reversed and the USD resumed the larger uptrend, which made it easier for traders. We opened 28 trading signals in total, closing it with 20 winning forex signals and 8 losing ones.
Gold Consolidates Above the 50 Daily SMA
In December, gold experienced a sharp $100 decline after failing to break the key resistance level of $2,725. The 50-day SMA acted as resistance late last week, but buyers returned when the price dipped below the 100-day SMA. Despite a modest recovery, gold initially struggled to rise above the 50-day SMA. However, on Wednesday, buyers managed to push the price above this level, and by yesterday, gold had stabilized above the 50-day SMA.
XAU/USD – Daily Chart
GBP/USD Breaks Below 2024 Low
The GBP/USD pair saw a significant downturn in October, dropping below all key moving averages on the daily chart and losing over 12 cents overall. Yesterday, the pound extended its losses, falling more than a cent and closing below 1.23, marking a fresh low for 2024.
GBP/USD – Daily Chart
Cryptocurrency Update
Bitcoin Falls to the Support Zone Above $90K
Bitcoin exhibited substantial volatility in the cryptocurrency market. Early in the week, it traded near $108,000 before sharply falling following a 25-basis-point rate cut. Prices dropped below $100,000 and reached the low $90,000s. After bouncing off the 50-day SMA and recovering to $95,000, Bitcoin faced resistance near the 20-day SMA, pushing it back down to settle around $90,000. Attempts to reclaim $100,000 were unsuccessful, as the price slipped below this level again. However, the current support zone appears to be holding, potentially presenting a long opportunity for Bitcoin.
BTC/USD – Daily chart
Ethereum Approaches the $4,000 Level Again
Ethereum’s price movements were even more dramatic. It surged from $3,000 to nearly $4,000 midweek but then stalled and dropped below $3,500. Over the past two weeks, Ethereum managed to recover some of its losses, finding solid support around the 50-day SMA. Despite this recovery, renewed bearish sentiment caused Ethereum to slip below $3,500 again, and by yesterday, it had declined further to $3,200.
ETH/USD – Weekly Chart
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank’s local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
www.fxleaders.com