As we head into Tuesday, December 24, 2024, global markets are entering a holiday lull, with trading volumes expected to remain subdued due to Christmas celebrations across key economies. Nevertheless, recent economic data releases and technical movements provide valuable insights for traders navigating this quiet period.
In the currency markets, USD/JPY saw a steady climb as the U.S. dollar strengthened against the yen, bolstered by solid consumer confidence data. The AUD/USD pair displayed choppy movements, reflecting market sensitivity to mixed Australian data and U.S. indicators. Meanwhile, USD/CAD remained volatile, influenced by soft Canadian GDP figures and stabilizing oil prices.
USD/JPY
Technicals in Focus
The USD/JPY pair extended its rally, closing near 157.13, supported by better-than-expected U.S. CB Consumer Confidence figures of 104.7 (versus the forecast of 112.9). On the technical side, the MACD continues to trend upward, reflecting growing bullish momentum. The Stochastic Oscillator is approaching overbought territory, suggesting the possibility of near-term consolidation. The 14-day RSI stands at 65, indicating a bullish bias but nearing overbought levels.
Trading Strategy
- Buy above 157.10, targeting 157.50-157.80, with a stop loss below 156.80.
- Alternatively, sell below 156.80, targeting 156.50-156.20, with stops above 157.10.
AUD/USD
Technicals in Focus
The AUD/USD pair traded sideways, closing near 0.6243 after recovering from earlier lows. The movements reflected mixed sentiment, with Australian economic indicators failing to provide clear direction amidst the holiday slowdown. The MACD hovers near the zero line, indicating a lack of strong momentum. The Stochastic Oscillator shows the pair entering oversold territory, hinting at a potential short-term recovery. The 14-day RSI remains neutral at 49.
Trading Strategy
- Buy above 0.6240, targeting 0.6270-0.6290, with a stop loss below 0.6210.
- Alternatively, sell below 0.6210, targeting 0.6190-0.6170, with stops above 0.6240.
USD/CAD
Technicals in Focus
The USD/CAD pair experienced notable volatility, closing near 1.4379.
The pair’s movements were largely driven by a combination of soft Canadian GDP data (-0.1% MoM) and stabilizing oil prices, which capped significant downside for the Canadian dollar. On the technical side, the MACD indicates bearish momentum as it trends below the zero line. The Stochastic Oscillator has exited oversold territory, signaling potential upward corrections. The 14-day RSI remains neutral at 48, reflecting indecision.
Trading Strategy
- Sell below 1.4370, targeting 1.4340-1.4320, with a stop loss above 1.4400.
- Alternatively, buy above 1.4400, targeting 1.4430-1.4450, with stops below 1.4370.
Market Outlook
With Christmas celebrations underway in the U.S., Canada, the UK, and Australia, liquidity is expected to remain thin, limiting volatility in the markets. Key events to watch include U.S. durable goods orders and new home sales data, which could provide additional clues on the state of the U.S. economy. In Canada, oil price movements remain a focal point for the USD/CAD pair, while risk sentiment will likely influence the AUD/USD.
As traders navigate this quiet period, the focus remains on holiday-driven sentiment and light economic data. Expect markets to stabilize further as the year-end approaches, with positioning likely to dominate in the absence of significant catalysts.