As we head into Monday, December 23, 2024, global markets are preparing for a session characterized by reduced liquidity due to the holiday season and the anticipated data releases. The U.S. dollar remains in focus following mixed economic signals, while the pound and yen reflect reactions to last week’s major central bank decisions.
In the currency markets, the USD/JPY pair exhibited a corrective bounce after recent declines, reflecting cautious sentiment. The AUD/USD pair faced significant downward pressure amid subdued global risk appetite, while USD/CAD showed heightened volatility as oil prices and GDP data influenced the Canadian dollar.
USD/JPY
Technicals in Focus
The USD/JPY pair attempted a recovery, closing near the 156.42 level after finding support earlier in the session. The pair’s movement reflects mixed market sentiment following the BoJ’s monetary policy outlook. Technically, the MACD is near the zero line, showing reduced bearish momentum, while the Stochastic Oscillator indicates an oversold condition, suggesting potential for a further rebound. The RSI remains neutral, reinforcing the corrective nature of the movement.
Trading Strategy: Neutral to Buy
- Buy above 156.50-156.80 with targets at 157.20-157.50 and 157.90, with a stop loss below 156.20.
- Alternatively, sell below 156.20, targeting 155.80-155.50, with stops above 156.80.
AUD/USD
Technicals in Focus
The AUD/USD pair experienced heavy selling pressure, closing around 0.6249 after failing to sustain its recovery. The movement was driven by weaker risk sentiment amid subdued liquidity. The MACD is pointing downward, showing increased bearish momentum, while the Stochastic Oscillator indicates oversold conditions, suggesting the possibility of a short-term corrective bounce. RSI remains below neutral, reflecting bearish dominance.
Trading Strategy: Neutral to Sell
- Sell below 0.6250-0.6220, targeting 0.6190-0.6170, with a stop loss above 0.6275.
- Alternatively, buy above 0.6275, targeting 0.6300-0.6330, with stops below 0.6220.
USD/CAD
Technicals in Focus
The USD/CAD pair exhibited sharp fluctuations, closing near 1.4369. Canadian GDP data and volatile oil prices played a pivotal role in the pair’s movement. On the technical front, the MACD shows decreasing bullish momentum, while the Stochastic Oscillator is entering overbought territory, indicating a potential correction. RSI remains neutral to overbought, reflecting the current consolidation phase.
Trading Strategy: Neutral to Sell
- Sell below 1.4365-1.4340, targeting 1.4310-1.4280, with a stop loss above 1.4390.
- Alternatively, buy above 1.4390, targeting 1.4420-1.4450, with stops below 1.4340.
Market Outlook
Looking ahead, market activity is expected to remain subdued due to the approaching Christmas holiday, with limited trading sessions across major financial hubs. Traders will closely monitor the U.S. Goods Trade Balance and Durable Goods Orders for November, scheduled for release on Tuesday, December 24, 2024, for additional cues on the dollar’s trajectory. The Japanese yen and Australian dollar will be influenced by developments in risk sentiment and oil markets.
The market will likely experience low volatility for the remainder of the week as liquidity thins. However, significant deviations from forecasted data could still spark localized reactions in the currency markets.Bottom of Form