FOREX Fundamental analysis for EUR/USD on December 10, 2024
The Forex market is frozen in anticipation of key events: the publication of inflation data in the United States and the outcome of the meeting of the European Central Bank (ECB). The dollar is supported by increased demand for safe haven assets, which is facilitated by tense events in South Korea, Syria and France. The euro is kept afloat thanks to the policy of China, which has announced its intention to move from cautious monetary policy management to moderately stimulating measures. These expectations support interest in risky assets, restraining the fall of the EUR/USD pair.
The main factors of the EUR/USD downtrend
The main reason for the weakness of the euro is the economic and monetary differences between the United States and the Eurozone. After Donald Trump's election victory, these discrepancies have only deepened. The planned fiscal stimulus is accelerating the U.S. economy, while the European economy is facing challenges, including the impact of trade duties.
In a strong economy, inflation tends to remain high as well. This reduces the likelihood of aggressive easing of the Fed's policy. The market expects three Fed rate cuts in 2025 with a possible fourth, which will bring it to a range of 3.5–3.75% after the December meeting.
The situation in Europe
The situation is different in Europe. Despite the ECB's calls for a moderate easing of monetary policy, expectations are growing in the market for a sharp step — a possible reduction in the deposit rate by 50 bps. Bloomberg experts suggest that the regulator may reduce the rate by 25 bps at each meeting until mid-2025, which will reduce the cost of borrowing to 2%. More pessimistic forecasts from the derivatives markets suggest a rate cut to 1.75%, and Citi forecasts even 1.5%, expecting that the effects of US protectionism will begin to affect in the second half of the year.
Speculative positions and prospects of EUR/USD
Speculators' positions on the dollar and the euro differ significantly. Asset managers have significantly reduced bearish dollar bets, and hedge funds have increased net long positions to the highest since October. On the contrary, for the euro, there is a noticeable decrease in net bullish positions, which fell from the May peak of $64 billion to $23.4 billion, and forex hedging shows an increase in "short" positions to $8.5 billion.
Forecast and recommendations
In the current conditions, buyers of EUR/USD can only count on a short-term correction. To reverse the trend, a significant deterioration in the US economy or a sharp increase in European GDP is necessary, which is unlikely. The scenario of further deepening of discrepancies is more likely, which may lead to a decrease in the euro to $1.05, $1.03 and parity in one, three and six months.
EUR/USD Technical analysis
Yesterday, EUR/USD tested the support area 1.0537 - 1.0528. However, the support was withheld by the buyers. As a result of the failed attack by the bears, growth began and the pair achieved one of the buyers' goals near the 1.0579 level. The second target is the 1.0629 mark. Today we continue to hold long positions until the second goal is achieved.
If the pair breaks through the Target zone of 1.0636 - 1.0608 during trading, then the next target of the bulls will be the Golden Zone of 1.0709 - 1.0700.
USD/CHF analysis for December 17, 2024During Tuesday morning trading, the USD/CHF pair continues to strengthen, developing a bullish trend that began last week. Quotes have updated the maximum from November 22 at 0.8955, however, market participants prefer to act cautiously, waiting for the results of the final meeting of the US Federal Reserve this year, which will be held on Wednesday at 21:00 (GMT+2). According to analysts, the interest rate will be reduced by 25 basis points to 4.50%. This scenario is already embedded in market prices, so it is unlikely to put serious pressure on the US dollar. Investors, however, will focus on long-term interest rate forecasts for the next three years, as well as on the possible economic policy of Donald Trump, who will take office on January 20.At the same time, the franc is under pressure from the unexpected decision of the Swiss National Bank (SNB) to reduce the rate by 50 basis points — from 1.00% to 0.50%. This step turned out to be more aggressive than market expectations, where a decrease of only 25 points was predicted. In an accompanying statement, SNB representatives stressed their willingness to adjust monetary policy in the future in order to keep inflation within the target values. The regulator also does not rule out interventions in the foreign exchange market to stabilize the franc, which investors still consider as a reliable safe haven asset. Inflation forecasts have been adjusted downwards: the average consumer price index is expected to reach 1.1% in 2024 (previously 1.2%), 0.3% in 2025 (against the previous 0.6%) and 0.8% in 2026 (previously 0.7%). The expected GDP growth in Switzerland will be about 1.0% this year and 1.0–1.5% next year (against the previous forecast of 1.5%). Meanwhile, the current inflation rate remains one of the lowest in the Eurozone. In November, the indicator was 0.7% in annual terms. The producer and import price index also decreased: on a monthly basis from -0.3% to -0.6% against the forecast of 0.2%, and in annual terms — from -1.8% to -1.5%. The SNB's quarterly report for the fourth quarter is expected to be published tomorrow at 16:00 (GMT+2).USD/CHF Technical analysis for todayOn the daily chart, the Bollinger Indicator shows steady growth. The MACD indicator continues to grow and maintains a strong buy signal. At the same time, Stochastic reached the overbought zone, slowed down and moved to a horizontal position, indicating possible risks of a correction of the US dollar in the near future.Trading recommendationslong positions after a confident breakdown of the 0.8957 level up with a target of 0.9037. The stop loss is set at 0.8915.sales with a rebound from the 0.8957 level and a breakdown of the key support of 0.8900 down. The target is 0.8827. We put the stop loss at 0.8957. 
On Tuesday, USD/JPY is trading with versatile dynamics around the 154.20 mark, not far from the local highs on November 25. The volatility of currency pairs remains restrained, as market participants are awaiting the results of the two-day meeting of the US Federal Reserve, which will be announced tomorrow at 21:00 (GMT+2).According to the CME Group, the probability of a 25 basis point rate cut is estimated at 95.4%, despite the steady recovery of the American economy and inflation, which has stabilized around 3.0%. At the same time, traders are analyzing possible actions of the Bank of Japan, taking into account the impact of the economic policy of the new White House administration.If President Donald Trump fulfills his promises to impose 25% duties on imports from China, the Japanese regulator is likely to react by devaluing the yen. According to a Bloomberg study, 52% of analysts believe that the Bank of Japan will continue to adhere to a tough policy in January, and 44% expect a rate hike to 0.25% at the December 19 meeting. Some experts point to the role of wage dynamics, believing that it will determine the position of the regulator closer to the spring wage negotiations. Steady wage growth outpacing inflation is considered by the Bank of Japan as a key criterion for revising the rate.The latest economic data from Japan show positive changes. The volume of orders for engineering products in October increased by 5.6% year-on-year after falling by 4.8% a month earlier, which significantly exceeded experts' expectations (0.7%). On a monthly basis, the indicator strengthened by 2.1%, exceeding forecasts. In addition, the Jibun Bank manufacturing business activity index from S&P Global improved from 50.5 to 51.4 points in December, and the index in the service sector increased by 0.3% after a slight decline a month earlier.The Daily chart shows an attempt to reverse the uptrend. The Bollinger Band indicator is expanding, hinting at the possibility of continued growth, but in the short term, the asset may remain overbought. The MACD indicator holds a steady buy signal, and the Stochastic has frozen at the maximum levels.Trading recommendationslong positions after breaking up the level of 154.50 with a target mark of 155.50. We will set a stop loss at the level of 153.87.sales with a confident breakdown down to the level of 153.87. The target mark is 152.70. Stop loss at 154.50. 
FOREX Fundamental analysis for EUR/USD on December 17, 2024A strong economy invariably supports a strong currency — this time-tested principle continues to prove its relevance. The latest business activity data again highlights the superiority of the US economy over the Eurozone. While the aggregate PMI of the Euroblock countries is only approaching the critical mark of 50 points, the American indicator has soared to a maximum in almost three years. Such a difference in economic growth undermined the position of buyers of EUR/USD and completed another attempt to increase the main currency risk.At the beginning of 2024, it was expected that US GDP would begin to slow down under the pressure of the most stringent monetary policy of the Federal Reserve System (Fed) in the last 40 years. Forecasts ranged from 1% growth to the likelihood of a recession. However, the actual figures turned out to be much higher. The US economy grew by 2.8% in the third quarter, and in the fourth quarter, according to forecasts by the Federal Reserve Bank of Atlanta, it may reach 3.3%. These results reinforce the gap with the Eurozone, whose prospects look much more modest.As the economy grows, inflation tends to increase. Americans are spending more actively, anticipating a shortage of imported goods due to the tariffs imposed by Donald Trump. In Europe, the situation looks different. ECB President Christine Lagarde said that core inflation no longer poses a serious threat to price stabilization, and some members of the governing council, such as Isabelle Schnabel, argue that the CPI is under control. These factors allow the ECB to continue the cycle of rate cuts, which, according to some experts, may include up to five stages in 2025.At the same time, the Fed plans to act more cautiously. September forecasts indicated four rate cuts in 2025, but the regulator's management was concerned that such steps could be perceived by the market as a signal of weakness in the American economy. In fact, the US economy is showing resilience: the labor market is strengthening, GDP is growing, and inflation has reached 2.7%. This suggests that in December some FOMC members may vote against further easing of monetary policy.Thus, the gap in the approaches of the Fed and the ECB to monetary policy will grow. The Fed's more cautious policy, reinforced by the possible consequences of Trump's tariffs, reinforces the difference in rates between the US and the Eurozone. This creates conditions for further weakening of the euro. Against this background, the forecast of EUR/USD falling to 1.03 by March and achieving parity by June remains relevant. The recommendation is to sell.EUR/USD Technical analysisThe short-term upward trend of EUR/USD remains. At the moment, the pair is trading in a downward correction. Yesterday, the bears tested the key support of the 1.0491 - 1.0478 trend. The zone was held by the buyers. Therefore, today it is advantageous to consider long positions from the support area with the first target at 1.0553 and the second at about 1.0629.For EUR/USD sales, it is necessary to break through the minimum on December 13 and consolidate below. In this case, it will be possible to consider short positions with a target in the lower Target zone of 1.0353 - 1.0326. 
AUD/USD analysis on December 16, 2024On Monday, AUD/USD is moving in a sideways corridor near the 0.6375 mark, continuing to show a decline against the background of moderate activity of the US dollar. Although the dynamics of the pair has slowed down somewhat in recent days, the overall trend remains downward.Despite the "hawkish" approach of the Reserve Bank of Australia (RBA), which keeps the rate at 4.35%, the national currency is under pressure due to weak business activity data for December. The manufacturing sector continues to be in a contraction zone. Business activity in the industry fell from 49.4 to 48.2 points. The indicator has remained below the threshold of 50 points for the tenth month in a row. The service sector also slightly deteriorated, from 50.5 to 50.4 points. Nevertheless, the labor market data for November brought temporary relief - the employment rate rose to 35.6 thousand. (against the projected 25.0 thousand), full employment rose to 52.6 thousand, and the unemployment rate fell to 3.9% with a forecast of 4.2%. However, these data were not enough to strengthen the Australian dollar, especially in the absence of confidence in reducing inflation risks.The US dollar index remains stable and is trading at 106.50, in anticipation of the Fed meeting on December 18. According to the CME FedWatch Tool, the probability of a 25 basis point rate cut is estimated at 93.4%. Today's publication of business activity indices may bring short-term changes to the market - a slight decrease is expected in the manufacturing sector (from 49.7 to 49.4) and the service sector (from 56.1 to 55.7).AUD/USD Technical Analysis for todayOn the daily chart, the AUD/USD pair continues to adjust above the support of the "expanding formation" pattern with boundaries in the range of 0.7100–0.6300.- Indicators strengthen sales signals.- The fast EMA lines of the alligator indicator are directed downwards, remaining below the signal line.- The histogram of the Awesome Oscillator (AO) indicator is in the sales zone.Trading recommendations- Sale: when the level of 0.6350 breaks down and the price fixes below it. The target is 0.6240. The stop loss is 0.6400.- Buy: when breaking up the 0.6400 level and consolidating above. The target is 0.6530. The stop loss is 0.6350. 
USD/CAD analysis on December 16, 2024In Monday morning trading, USD/CAD stabilizes around 1.4220, which corresponds to the record highs of April 2020, updated at the end of last week. There is low volatility of currency pairs in the market, as traders prefer to refrain from transactions in anticipation of the outcome of the meeting of the US Federal Reserve System, which will be held on December 17-18. Most market participants are confident in reducing the rate by 25 basis points to 4.5% per annum and are closely monitoring possible comments from the regulator on further steps.Today at 16:45 (GMT+2), S&P Global is expected to publish business activity indices in the manufacturing and services sectors for December. It is assumed that the values will remain close to the previous indicators — 49.7 points for industry and 56.1 points for services. At 22:45 (GMT+2), the head of the Bank of Canada, Tiff Macklem, will speak, and tomorrow investors will study inflation data in Canada for November. It is expected that the monthly dynamics of consumer prices will slow down to 0.0%, and the annual indicator will remain at 2.0%. The base index is expected to maintain values of 0.4% on a monthly basis and 1.7% on an annual basis.USD/CAD Technical Analysis for todayOn the daily chart, the Bollinger indicator continues to expand, which indicates support for the uptrend. The MACD indicator shows a steady buy signal, as the histogram is above the signal line. Stochastic is approaching the overbought zone and indicates the probability of a downward correction in the short term.Trading recommendations- Buy: after the breakdown of the 1.4250 level, up with a target of 1.4350. The stop loss is 1.4200.- Sale: after the breakdown of the 1.4200 level down with a target of 1.4100. The stop loss is 1.4250. 
Since the start of trading, GBP/USD has been showing moderate growth, recovering from a significant drop at the end of last week, when the bears updated the lows on November 27. The main factor of pressure on the pound was the weak macroeconomic statistics of the United Kingdom.The country's October GDP shrank by 0.1% on a monthly basis, repeating the results of September, although analysts had expected growth of 0.1%. Treasury Secretary Rachel Reeves noted that these figures are disappointing, but stressed the long-term focus of the authorities on economic recovery. Industrial production decreased by 0.6% after falling by 0.5% in September, with a growth forecast of 0.3%. In annual terms, the dynamics improved — a decrease of 0.7% compared to the previous indicator of -1.8%. The manufacturing sector also recorded a decline of 0.6%, although this was better than the previous decline of 1.0%.The UK economy is experiencing difficulties due to tax increases provided for in the new budget. Nevertheless, experts believe that the Bank of England is likely to maintain the current rate level at the next meeting.On Friday, the Bank of England updated its inflation forecasts. The forecast for consumer price growth next year increased from 2.7% to 3.0%, which may affect the further monetary policy of the regulator. Today, traders are waiting for business activity data for December. In the services sector, the indicator is expected to grow to 51.0 points, and in the manufacturing sector — to 48.1 points.Tomorrow, market participants will analyze the labor market report for October–November. The growth rate of average wages, including bonuses, is expected to increase to 4.6%, and excluding bonuses to 5.0%. On Thursday, the Bank of England will publish a decision on the interest rate, which is expected to remain at 4.75%.American investors will focus on the results of the US Federal Reserve meeting on December 18. The rate is projected to decrease by 25 basis points to 4.50%.Technical analysis of GBP/USD for todayThe main forex indicators point to uncertainty. The Bollinger bands reflect the flat dynamics. The MACD indicator continues to decline. Stochastic is approaching the oversold zone, suggesting a possible short-term upward rebound.Trading recommendations- Buy after a confident breakout of the 1.2650 level with a target of 1.2730. We will set the stop loss at 1.2600.- Sale: In case of a rebound from the 1.2650 level down and a breakdown of 1.2600 with a target of 1.2500. The stop loss is at 1.2650. 
FOREX Fundamental analysis for EUR/USD on December 16, 2024The euro continues to resist the circumstances. Neither the political turmoil in Germany and France, nor the recession in the German economy, nor the reduction in rates by the European Central Bank could bring down the EUR/USD pair. It is staying afloat, despite the threat of a vote of no confidence in the government of Olaf Scholz and signals from the Fed about a possible pause in lowering rates. Will the euro be able to withstand new challenges?In the USA, the situation is developing according to a different scenario. The rise in inflation caused by Donald Trump's tariff ideas has become a significant factor. Consumers are rushing to make large purchases. A record number of Americans surveyed by the University of Michigan consider this a good time to shop. Similarly, a third of the study participants CreditCards.com they buy goods out of fear of tariffs.The result of consumer hype, according to the Federal Reserve Bank of Atlanta,. consumer prices rose to 2.7% in November and U.S. GDP accelerated to 3.3% in the fourth quarter. In such circumstances, the Fed is likely to reconsider its plans for 2025: instead of aggressively cutting rates, Bloomberg experts expect three cuts — in March, June and September, which will bring the rate to 3.25%.In Europe, on the contrary, there is a crisis. The German economy, being a key one for the Eurozone, is plunging into recession. According to the forecasts of the Bundesbank, German GDP will decrease by 0.2% in 2024, and only weak growth of 0.2% is expected in 2025. If Trump imposes 10% tariffs on European goods, the German economy could lose another 0.5%.The situation is aggravated by the political crises in Germany and France, which are withdrawing capital from Europe and slowing economic growth. Barclays notes that the only salvation for the Eurozone is the policy of the ECB. Lower rates weaken the euro, which helps exporters stay afloat.Amid the growth of the US economy and inflation, the Fed is likely to restrain further policy easing, which contributes to the strengthening of the dollar. Any attempts by the euro to adjust upwards can be used for sales.The current stability of the EUR/USD pair above the support level of 1.0455 gives the bears a new chance. On pullbacks from the resistance of 1.0525, 1.0585 or 1.0615, traders can increase short positions. The forex trading strategy remains the same: from short-term purchases to medium-term sales.EUR/USD Technical analysisLast Friday, EUR/USD buyers held key support for the short-term uptrend. Therefore, today it is possible to either hold long positions or consider new ones near the support area 1.0491 - 1.0478. The first target of buyers will be the 1.0553 level. The second target is the maximum on December 6 at 1.0629. If the pair manages to gain a foothold higher, the growth may continue to the "Golden Zone" of 1.0709 - 1.0700.To change the trend and sales, the bears need to update the minimum on December 13 and gain a foothold below. In this case, the sellers' target will be the lower Target zone 1.0353 - 1.0326. 
AUD/USD is showing modest growth, trying to regain positions after losses in recent days. At the moment, the pair is testing the 0.6370 level for the possibility of an upward breakout. The Australian dollar is supported by fresh employment data published the day before.According to the report, in November, employment growth in Australia amounted to 35.6 thousand instead of the expected 25.0 thousand, which is significantly higher than the October value of 12.1 thousand. Full-time employment increased by 52.6 thousand, while partial employment decreased by 17.0 thousand. The unemployment rate also fell from 4.1% to 3.9%, although analysts had predicted 4.2%. These results allow the Reserve Bank of Australia (RBA) to maintain its current monetary policy while anticipating further easing of inflation risks.At the same time, the US dollar strengthened against the background of the publication of data on industrial inflation for November. The core producer price index rose from 3.1% to 3.4% year-on-year, exceeding forecasts, although on a monthly basis the growth rate decreased to 0.2%. The broader indicator showed an acceleration to 3.0% year-on-year and to 0.4% month-on-month, which also supported the "green" dollar.Today, market activity may remain subdued while participants evaluate the results of the RBA meeting. The regulator again left the rate at 4.35%, for the ninth time in a row, while indicating that core inflation remains high. Despite this, the regulator signaled its readiness to gradually abandon the "hawkish" rhetoric. Core inflation slowed to 3.5% in September, but the RBA stresses that it will take time to return it to the target range of 2.0–3.0%. Australia's leading banks forecast a rate cut no earlier than May 2025, although some, such as Commonwealth Bank, expect this as early as February.Meanwhile, investors' attention is shifting to the upcoming US Federal Reserve meeting scheduled for December 17-18. According to the FedWatch Tool from CME Group, the probability of a 25 basis point rate cut is estimated at 90%.AUD/USD Technical Analysis for todayThe main forex indicators give mixed signals. The Bollinger Band indicator on the daily chart is expanding, indicating the possibility of further decline. The MACD indicator retains a weak sell signal, and Stochastic, having reached the level of 20, shows a tendency to reverse, which may indicate the likelihood of a short-term upward correction.Trading recommendations- short positions after the breakdown of the 0.6336 level down with a target of 0.6250. The recommended stop loss is 0.6372.- buy with a rebound from the 0.6336 level up, followed by a breakdown of the 0.6372 mark. The target is 0.6455, the stop loss is 0.6336.