US markets staged a last minute recovery yesterday. Throughout the entire trading session, the markets declined sharply, with the Dow declining by more than 500 points. Before the markets closed, the markets recovered and the Dow, S&P, and Nasdaq ended the day higher by 1.15%, 0.86%, and 0.40% respectively. The session was therefore a continuation of the Santa rally that started on Wednesday when the Dow gained by more than 1000 points. As a result, Asian markets traded higher with the Shanghai and Hang Seng gaining by 0.40% and 0.15% respectively.
The Japanese yen climbed slightly against the USD after important data from Japan. In November, the industrial production contracted by minus 1.1%, which was better than the consensus estimate of minus 1.7%. Tokyo CPI rose by an annualized rate of 0.3%, which was lower than November’s 0.8%. The unemployment rate rose to 2.5%, which was higher than the expected 2.4%. Retail sales in November rose by 1.4%, which was worse than the expected 2.2%.
The euro rose against the USD ahead of key data from Europe. Spain will release its CPI, HICP, and GDP numbers. The CPI is expected to rise by 1.5%, which will be lower than the expected 1.7%. The Q3 GDP is expected to grow by 2.5%, which will be similar to the previous number while the HICP is expected to rise by 1.6%. Meanwhile, Germany’s CPI is expected to fall to 1.9%, from November’s 2.3%. Later today, the US will release the new and pending home sales data while the EIA is expected to release the crude oil inventories.
EUR\USD
The EUR\USD pair rose sharply ahead of key economic data from Europe. This week, the price has moved from a low of 1.1340 to the current high of 1.1467. The price is above the 25-day and 50-day simple moving average. The RSI has moved from the oversold level of 30 to the current high of 65. The pair will likely continue to move higher, potentially to the important resistance level of 1.1500.
USD\CAD
The USD\CAD pair moved to the highest level this year. The pair is now trading along the 1.3620 level. The new upward trend started on September when the pair reached a low of 1.2780. On the daily chart, the pair’s momentum indicator has continued to remain above the 100 level. The price is also above all the major moving averages while the RSI has remained above the 70 level.
XAU\USD
XAU\USD continued the upward momentum and reached a high of 1277. On the hourly chart, the price is above the 50-day and 100-day simple moving average while the RSI has continued to remain below the overbought level of 70. At the same time, the momentum indicator has been declining. The pair will likely continue moving higher as market risks increase.
