As we head into Tuesday, December 3, 2024, global markets are poised for a session of heightened volatility driven by key economic data releases and geopolitical developments. The focus remains on major currencies such as the EUR, GBP, and AUD as traders evaluate recent economic indicators and prepare for upcoming central bank decisions. Notably, Eurozone GDP figures and U.S. PMI data are expected to shape sentiment in the forex market.
In the currency markets, the EUR/USD has been under pressure following weak economic data from the Eurozone, while the GBP/USD experienced sharp declines amid concerns about the UK economy. The AUD/USD has also shown significant weakness, largely influenced by risk sentiment and dovish expectations regarding Australian economic performance. Let’s delve into the technical analysis of these key pairs.
EUR/USD
Technicals in Focus
The EUR/USD pair faced downward pressure, trading near the 1.0490 level. The pair’s movements were primarily influenced by weaker-than-expected Eurozone Services PMI data, which raised concerns about the region’s economic trajectory. Upcoming GDP figures are expected to provide further clarity.
- MACD: Bearish momentum persists as the indicator remains below the zero line.
- Stochastic Oscillator: Approaching oversold territory, hinting at a potential short-term bounce.
- 14-day RSI: Neutral but trending lower, reflecting bearish sentiment.
Trading Strategy: Neutral to Sell
- Sell below 1.0480 with targets at 1.0450–1.0430 and stops above 1.0510.
- Alternatively, consider buying above 1.0510 with targets at 1.0540–1.0560 and stops below 1.0480.
GBP/USD
Technicals in Focus
The GBP/USD pair experienced sharp declines, trading around the 1.2645 level. Weak UK Construction PMI data coupled with concerns about future Bank of England (BoE) policy tightening added to bearish sentiment.
- MACD: Deep in bearish territory, indicating strong downward momentum.
- Stochastic Oscillator: Oversold, suggesting a potential corrective move upward.
- 14-day RSI: Below 30, emphasizing oversold conditions.
Trading Strategy: Neutral to Sell
- Sell below 1.2650 with targets at 1.2620–1.2590 and stops above 1.2680.
- Alternatively, buy above 1.2680 with targets at 1.2700–1.2730 and stops below 1.2650.
AUD/USD
Technicals in Focus
The AUD/USD pair showed significant weakness, trading near the 0.6469 level. Weak Australian retail sales data and a cautious Reserve Bank of Australia (RBA) outlook added pressure on the pair.
- MACD: Bearish momentum continues as the indicator trends downward.
- Stochastic Oscillator: Oversold, pointing to a potential near-term reversal.
- 14-day RSI: Neutral to oversold, reflecting the bearish dominance in the pair.
Trading Strategy: Neutral to Sell
- Sell below 0.6470 with targets at 0.6450–0.6430 and stops above 0.6490.
- Alternatively, buy above 0.6490 with targets at 0.6520–0.6540 and stops below 0.6470.
Market Outlook
Looking ahead, the focus will be on the release of key data such as Eurozone GDP and U.S. ISM Non-Manufacturing PMI. Both reports are likely to provide important insights into the health of the respective economies and influence central bank policy expectations. Additionally, Australian trade data and U.S. factory orders will also be closely monitored for their potential impact on risk sentiment and commodity-linked currencies like the AUD.
As we move through the session, traders should be prepared for heightened volatility, particularly as month-end flows and positioning continue to play a role in the forex markets.