Reminder
As the markets have officially resumed, it is expected that trading volume will take a few days to return to normal levels. The market activity will likely pick up during the second or third week of January, coinciding with the inauguration of President Donald Trump. However, unless unexpected events arise or key data releases significantly deviate from expectations, there will likely be a period of cautious trading. General market expectations could change rapidly due to sudden geopolitical events or other unexpected news outside of the usual data cycles. It’s important to remain vigilant and flexible, as the market sentiment could shift quickly depending on how these external factors unfold.
Candlestick patterns are particularly crucial during these periods of market uncertainty. Recognizing and analyzing these patterns can offer traders clearer entry point strategies, helping them navigate fluctuating trends effectively.
Thus, even though the market is resuming, it’s wise to approach with caution in the short term, awaiting the confirmation of trends and the return of stability in trading volume.
Market Overview
The upcoming week is expected to be pivotal for the markets, as several key financial data releases are scheduled to shape market expectations. Starting on Tuesday, the US will report the ISM Services PMI and JOLTS Job Openings data for December, followed by ADP Non-Farm Payrolls (NFP) and Unemployment Claims on Wednesday. Thursday’s release of the FOMC meeting minutes will provide insight into the Federal Reserve’s 2025 policy expectations, while Friday brings critical data, including NFP, the Unemployment Rate, and earnings reports.
Alongside the US data, global forex patterns will also focus on key data from Europe and other regions. German Preliminary CPI is set for today, Swiss CPI on Tuesday, and Australian CPI on Wednesday. On Friday, Canadian employment numbers will be released. These reports are expected to trigger significant market movements as they provide a clearer picture of global economic conditions.
The geopolitical landscape, particularly with Trump’s upcoming inauguration on January 20, is expected to further influence market sentiment. The financial world is preparing for major price movements as markets adjust to the potential implications of a Trump administration and the resulting shifts in fiscal policies. As economic data flows in, increased buying pressure in gold is anticipated, potentially coupled with a rise in the US dollar. The Euro and the Pound are likely to see notable weakness, while the Japanese Yen will remain uncertain, with its movement contingent on economic policy decisions from the Bank of Japan.
Integrating auto trade alerts into portfolio allocation strategies can provide an edge for traders, ensuring they remain aligned with evolving market dynamics and capitalizing on opportunities as they arise.
Market Analysis
GOLD
Gold’s price action last Friday showed weakness after failing to break the key level of $2,670.882. While the market is currently showing signs of bearish momentum, there remains a higher likelihood of price moving upward due to the proximity of the previous swing low. However, the Relative Strength Index (RSI) suggests bearish continuation with increased selling pressure indicated by the MACD.
SILVER
Given the current market conditions, it is likely that silver prices will continue to the downside, testing the lower boundary of this range. The MACD is showing increased selling momentum and volume, although the RSI hints at potential buying strength. Despite the divergence in the RSI, the overall price action suggests that silver may continue to face downward pressure.
DXY (US Dollar Index)
The US dollar, after a period of sustained growth, its rise has begun to show signs of slowing. The MACD is indicating lighter selling volume, while the RSI shows the market is approaching oversold conditions, suggesting the potential for a continuation in the upward direction.
GBPUSD
The British Pound has shown strength recently, with buying momentum continuing from a brief pause in the dollar’s rise. The RSI and MACD both reflect increased volume and momentum in favor of the pound, but overall price action still remains some distance away from signaling a clear shift in momentum.
AUDUSD
The Australian Dollar continues to struggle, even in the face of a weaker dollar. Prices remain largely stagnant between key levels, suggesting a lack of direction.
NZDUSD
Similarly, the New Zealand Dollar faces heightened selling pressure, with price action stuck within a consolidation zone.
EURUSD
The Euro is anticipated to continue its weakness, particularly as the year progresses. Current price action suggests a temporary pullback before the Euro tests the 1.03311 level, where it is expected to continue its downward movement.
USDJPY
The Japanese Yen remains under pressure due to the Bank of Japan’s hesitancy to raise interest rates.
USDCHF
The Swiss Franc is currently experiencing increased buying, with price action respecting the bullish momentum.
USDCAD
The Canadian Dollar is still consolidating at the 1.44440 level.
