As we approach Thursday, December 12, 2024, global financial markets are bracing for increased volatility, driven by major economic events and central bank decisions. The U.S. dollar remains in focus as traders digest inflation data and anticipate fresh signals from the Federal Reserve. Key attention will also be on the European Central Bank’s (ECB) interest rate decision, which could set the tone for EUR/USD movements.
In the Asia-Pacific region, Australian employment data and Japanese industrial production figures have shaped risk sentiment, influencing key currency pairs such as AUD/USD and USD/JPY. Meanwhile, oil price movements and Canadian wholesale sales have driven volatility in USD/CAD.
GBP/USD
The GBP/USD pair experienced a choppy session, consolidating near the 1.2759 level. Despite positive GDP and manufacturing production data from the UK, the pound struggled to sustain momentum, as traders turned their focus to U.S. inflation data and ECB updates.
Technicals in Focus
- MACD is hovering near the zero line, signaling indecision.
- RSI is at 50, reflecting a neutral stance.
- Stochastic Oscillator is in overbought territory, suggesting potential downside pressure.
Trading Strategy: Neutral to Sell
- Sell below 1.2740 with targets at 1.2700 and 1.2680, with stops above 1.2770.
- Alternatively, buy above 1.2780 with targets at 1.2810 and 1.2830, with stops below 1.2750.
AUD/USD
The AUD/USD pair continued its downtrend, closing near the 0.6362 level. Weak employment data from Australia and global risk aversion weighed on the pair, despite some attempts at recovery during intraday trading.
Technicals in Focus
- MACD shows bearish momentum, with widening histogram bars.
- RSI is below 40, indicating continued selling pressure.
- Stochastic Oscillator is in oversold territory, signaling potential for a rebound.
Trading Strategy: Neutral to Sell
- Sell below 0.6360 with targets at 0.6330 and 0.6300, with stops above 0.6390.
- Alternatively, buy above 0.6390 with targets at 0.6415 and 0.6440, with stops below 0.6360.
USD/JPY
The USD/JPY pair exhibited notable volatility, closing near the 152.00 level. Although Japanese industrial production rose, the yen remained under pressure amid stronger U.S. CPI data and a hawkish outlook for Federal Reserve policy.
Technicals in Focus
- MACD is in bullish territory but shows signs of weakening momentum.
- RSI is near 55, indicating mild bullish bias.
- Stochastic Oscillator is approaching overbought conditions, suggesting limited upside.
Trading Strategy: Neutral to Buy
- Buy above 152.20 with targets at 152.50 and 152.80, with stops below 151.80.
- Alternatively, sell below 151.80 with targets at 151.50 and 151.20, with stops above 152.10.
Market Outlook
Looking ahead, the ECB interest rate decision and accompanying press conference will be key market movers, with traders closely monitoring President Lagarde’s comments for insights on future policy direction. In the U.S., initial jobless claims and PPI data will further shape expectations for Federal Reserve action.
Overall, heightened volatility is expected across major currency pairs as traders react to central bank decisions and key economic releases. Stay alert for rapid price movements and adjust positions accordingly.