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The AUD/USD chart reveals that since late October, the pair has been in a downtrend. This is largely driven by monetary policy differences: while the Federal Reserve has begun cutting interest rates, the Reserve Bank of Australia (RBA) has yet to initiate rate reductions.

Tomorrow, the RBA will announce its decision on interest rates. All 44 economists surveyed by Reuters expect the rate to remain at 4.35%, given persistently high core inflation (3.5%) and low unemployment.

Previously, experts forecasted rate cuts in the first quarter of 2025. However, most now anticipate reductions no earlier than the second quarter, as the RBA focuses on bringing inflation back to its 2–3% target range.

Meanwhile, the AUD/USD chart highlights that the price is sitting at a key support level (marked by a red line), which has already reversed the pair upward three times since the latter half of 2022 (indicated with arrows).

Tomorrow's crucial RBA decision is likely to strongly influence whether this support will manage to reverse the price upward for the fourth time. Monday's robust price action suggests that another upward reversal is possible.

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Investor sentiment in the Eurozone deteriorated sharply in December, with the Sentix Investor Confidence Index dropping to -17.5 from -12.8, significantly below expectations of -13.1. This marks the weakest reading since November 2023. Current Situation Index fell to -28.5, the lowest since November 2022, while Expectations Index slipped to -5.8 from -3.8. .

Germany remains a key drag, with its Current Situation Index sinking to -50.8, the lowest since June 2020, reflecting the persistence of recessionary pressures. The announcement of new Bundestag elections failed to inspire optimism, while France's ongoing government crisis has added another layer of economic uncertainty. Sentix highlighted that “the two largest countries in the Eurozone are dragging down the EU economy.”

ECB faces increasing pressure as investors expect stronger monetary support for the faltering economy. However, inflation concerns persist, with Sentix's inflation barometer holding at -12 points, signaling continued unease. This dual challenge highlights a conflict for ECB as it balances the need for economic stimulus with inflationary risks.

Full Eurozone Sentix release here.

Gold price is consolidating above the $2,600 support zone. Crude oil is showing bearish signs and might decline below $66.80.

Important Takeaways for Gold and Oil Prices Analysis Today

• Gold price started a recovery wave from the $2,610 zone against the US Dollar.
• A key bearish trend line is forming with resistance at $2,650 on the hourly chart of gold at FXOpen.
• Crude oil prices failed to clear the $70.00 region and started a fresh decline.
• There is a connecting bearish trend line forming with resistance at $67.50 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price found support near the $2,610 zone. The price remained in a bullish zone and started a recovery wave above $2,620.

There was a decent move above the 50-hour simple moving average and $2,635. The bulls pushed the price above the $2,640 zone. Finally, the price climbed as high as $2,650 before the bears appeared. The price is now consolidating below $2,650.

There was a move below the 23.6% Fib retracement level of the upward move from the $2,613 swing low to the $2,650 high, and the RSI is stable above 50.

Initial support on the downside is near $2,632. The first major support is near the $2,628 zone. It is near the 61.8% Fib retracement level of the upward move from the $2,613 swing low to the $2,650 high. If there is a downside break below the $2,628 support, the price might decline further.

In the stated case, the price might drop toward $2,612. Any more losses might push the price toward the $2,600 level. Immediate resistance is near the $2,650 level.

There is also a key bearish trend line forming with resistance at $2,650. The next major resistance is near the $2,655 level. An upside break above the $2,655 resistance could send Gold price toward $2,670. Any more gains may perhaps set the pace for an increase toward the $2,685 level.

Oil Price Technical Analysis

On the hourly chart of WTI Crude Oil at FXOpen, the price struggled to clear the $70.00 resistance zone against the US Dollar. The price started a fresh decline below the $68.80 support.

The price even dipped below the $67.80 level and the 50-hour simple moving average. The bulls are now active near the $66.80 level. A low was formed at $66.78 and the price is now consolidating losses. If there is a fresh increase, it could face resistance near the 23.6% Fib retracement level of the downward move from the $70.10 swing high to the $66.78 low.

There is also a connecting bearish trend line forming with resistance at $67.50. The first major resistance is near the $67.80 level, above which the price could rise and test the 61.8% Fib retracement level of the downward move from the $70.10 swing high to the $66.78 low at $68.80.

Any more gains might send the price toward the $69.60 level. Conversely, the price might continue to move down and revisit the $66.80 support. The next major support on the WTI crude oil chart is $66.00.

If there is a downside break, the price might decline toward $63.50. Any more losses may perhaps open the doors for a move toward the $61.20 support zone.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Daily Pivots: (S1) 190.36; (P) 191.42; (R1) 192.12; More...

Intraday bias in GBP/JPY remains neutral at this point. Recovery from 188.07 might extend higher. But outlook will stay bearish as long as 55 D EMA (now at 193.97) holds. On the downside, below 190.33 minor support will bring retest of 188.07 first. Break there will target 183.70 support next.

In the bigger picture, price actions from 208.09 are seen as a correction to whole rally from 123.94 (2020 low). The range of consolidation should be set between 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09. However, decisive break of 175.94 will argue that deeper correction is underway.

Daily Pivots: (S1) 157.92; (P) 158.75; (R1) 159.40; More...

Intraday bias in EUR/JPY stays neutral for the moment. While recovery from 156.16 could extend higher, outlook will stay bearish as long as 55 D EMA (now at 161.87) holds. On the downside, below 157.54 minor support will bring retest of 156.16 first. Break there will target 154.40 low next.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). The range of consolidation should have been set between 38.2% retracement of 114.42 to 175.41 at 152.11 and 175.41 high. However, decisive break of 152.11 would argue that deeper correction is underway.

Daily Pivots: (S1) 0.8282; (P) 0.8291; (R1) 0.8304; More...

Intraday bias in EUR/GBP remains neutral and more consolidations could be seen above 0.8259 support. On the downside, decisive break of 0.8259 will resume larger down trend to 0.8201 key support. On the upside, break of 0.8311 minor resistance will turn bias back to the upside for recovery. But still, outlook will stay bearish as long a 0.8446 resistance holds, and downside breakout is expected at a later stage.

In the bigger picture, down trend from 0.9267 (2022 high) is in progress. Next target is 0.8201 (2022 low), but strong support should be seen there to bring rebound. However, outlook will remain bearish as long as 0.8624 resistance holds even in case of strong rebound. Decisive break of 0.8201 will indicate long term bearish reversal.

Daily Pivots: (S1) 1.6433; (P) 1.6498; (R1) 1.6603; More...

Intraday bias in EUR/AUD is turned neutral first with current retreat. Some consolidations would be seen below 1.6559. But further rally is expected as long as 1.6305 resistance turned support holds. Above 1.6559 will resume the rise from 1.5963 to 1.6598 key resistance. Decisive break there will confirm that whole fall from 1.7180 has complete with three waves down to 1.5963, and target a test on 1.7180 next.

In the bigger picture, EUR/AUD is still holding on to 1.5996 key support despite brief breach. Larger up trend from 1.4281 (2022 low) is still in favor to resume through 1.7180 at a later stage. Nevertheless, sustained break of 1.5995 will indicate that such up trend has completed. Deeper decline would be seen to 61.8% retracement of 1.4281 to 1.7180 at 1.5388, even as a correction.

Daily Pivots: (S1) 0.9259; (P) 0.9289; (R1) 0.9317; More....

Intraday bias in EUR/CHF stays mildly on the downside at this point. Recovery fro 0.9204 could have completed after repeated rejection by falling 55 4H EMA. Deeper fall would be seen to retest 0.9204 low. Firm break of 0.9204/9 will indicate larger down trend resumption. Nevertheless, break of 0.9321 resistance will turn bias back to the upside to resume the rebound from 0.9204 instead, and that would be an early sign of bullish reversal for the near term.

In the bigger picture, outlook will now stay bearish as long as 0.9444 resistance holds. Decisive break of 0.9209 low will resume long term down trend to 61.8% projection of 0.9772 to 0.9209 from 0.9444 at 0.9096 next.

Markets

US November payrolls cemented the case for a 25 bps rate cut by the Fed. That scenario wasn’t completely discounted (70%) ahead of the numbers. While headline payrolls growth rebounded to 227k (with an additional 56k upward revision to September & October figures), the accompanying household survey made a more grim reading. With a 193k decline in the workforce, a 355k decline in employment, a rise in the unemployment rate from 4.1% to 4.2% and a decline in the participation rate from 62.6% to 62.5%. US Treasuries spiked lower on the headline number, but rapidly looked higher. The move topped out after the release of December University of Michigan consumer confidence. A fifth consecutive increase brings the index at 74 (best since April) with details showing short term inflation expectations (1y) rising from 2.6% to 2.9% and ending the decline from 3.3% in May. Longer-term inflation expectations were broadly stable (3.1% from 3.2%). Fed governor Bowman, who dissented at the September meeting in favour of a smaller 25 bps rate cut, reiterated that she wants to proceed cautiously and gradually in lowering the policy rate as underlying inflation remains uncomfortably above the 2% target. She thinks that the neutral rate moved higher with the current policy rate not being restrictive. The US yield curve eventually bull steepened with yields losing up to 4 bps at the front end of the curve. The US Treasuries’ outperformance vs German Bunds (yields up to 2 bps lower) didn’t help EUR/USD. A brief uptick above 1.06 was rapidly undone with the pair closing at 1.0568. After market close, rating agency Fitch raised the outlook on the Hungarian BBB rating from negative to stable. They cite an easing of policy uncertainty, prudent monetary easing, a moderation of inflation, the balanced primary fiscal position, an improvement in the current account and a projected fall in debt as key reasons. At EUR/HUF 413.50, the forint remains weak.

The fall of Syrian president al-Assad’s government is omnipresent this morning. If any, it triggers some minor safe haven flows at the start of the trading week given uncertainty over how the power vacuum will be solved and what it will mean for the wider region. Both the dollar and US Treasuries eke out small gains. Today’s eco calendar is empty, suggesting that risk sentiment will continue dominating broader markets. The agenda turns more interesting later this week with US CPI numbers (Wednesday) and central bank meetings in Australia (tomorrow), Canada (Wednesday), Switzerland and EMU (both Thursday).

News & Views

Chinese consumer inflation unexpectedly eased from 0.3% to 0.2% y/y in November. Slowing food prices were among the key forces weighing down on the numbers. The 0.9% m/m increase came after a +/- 2% jump over the past few months which reflected the impact of heavy rain in the summer on food production. Core inflation picked up for a second month straight, be it to a very low 0.3% y/y still. Producer prices eased 2.5%, extending the deflation streak in place since October 2022. It was, however, a smaller drop than in October (-2.9%) and than expected (-2.8%). The inflation numbers suggest the range of stimulus measures have yet to show a significant impact on the economy. They raise the stakes for Wednesday’s Central Economic Work Conference. The meeting behind closed doors will be to discuss next year’s growth target, probably the same as 2024’s (+/- 5%) and additional stimulus measures to get it done. China’s yuan loses marginal ground this morning towards USD/CNY 7.28.

Rating agency Fitch said that the French government collapse threatens the country’s necessary fiscal consolidation efforts. It said the recently ousted Barnier’s 5% target for next year is now “very unlikely”. The developments also put serious question marks to France’s medium-term plan to reduce the deficit over an EC-approved 7-year term. Fitch now expects fiscal gaps above 5% to lead to a steep rise in government debt towards 118.5% of GDP by 2028, adding that the lack of a “credible medium-term fiscal consolidation plan that would lead to a stabilization of debt in the medium term is one of the main downgrade sensitivities for France’s ratings.” The rating agency recently lowered France’s growth forecasts from 1.2% to 0.9% and noted that slowing growth could hamper the fiscal tightening. While France faces no serious financing challenges, Fitch says, the political crisis has raised its borrowing costs. If permanently, these will further compound the challenges.

Bashar al-Assad's regime fell over the weekend, Korean lawmakers prepare another impeachment attempt against their President who narrowly avoided removal after briefly imposing martial law last week, and France remains without a new presidential nominee.

As such, the US Dollar is stronger on safety demand and crude Oil is better bid on renewed political uncertainty in the Middle East. But the Syrian news will unlikely reverse the bearish oil trend. Although the Syrian uncertainty could temporarily hit their oil exports, the country exports less than 100K barrels per day, down from 600K in 2011. Therefore, developments in Syria would more likely than not bring more barrels to the market and add to the global supply in the coming months.

Data and central bank decisions

The latest economic data from China has failed to impress, as consumer deflation deepened last month. While the pace of deflation in producer prices slowed, it was not enough to draw conclusions about the effectiveness of China's recent stimulus measures.

Consequently, the data boosts the expectation that the Chinese government would announce more fiscal support this week when the officials meet at the Central Economic Work Conference. But given the government’s unwillingness to announce a massive fiscal stimulus package, the arm wrestle between the authorities—who speak of a big stimulus but fall short of naming a figure—and investors, who are determined to hear one, will continue. The CSI 300 is downbeat this Monday.

In the FX, the US dollar is better bid this morning, probably due to a certain appetite for safety in the middle of a global political jungle, but fundamentally, the Federal Reserve (Fed) news are soothing – and supportive of a softer US dollar if we filter out the safety inflows. Released last Friday, the US official jobs data sat near the sweetest possible spot for the Fed watchers. The NFP printed a strong 227K new nonfarm job additions last month, but was widely disregarded due to the disruptions from hurricanes and strikes of the month before. All eyes were on the unemployment number that came in slightly higher than expected. The data would be just perfect if the wages growth didn’t print a higher than expected number. The US dollar first fell than rebounded on the data but the Fed doves remained in a mood to bet for a Xmas rate cut from the Fed and buy more of the S&P500 and Nasdaq stocks. The US 2-year yield extended a decline, the S&P500 printed its 57th record high this week – meaning that the S&P500 printed a record high every four trading days so far this year – and Nasdaq 100 closed at a fresh record high as well. The Dow Jones continued to diverge negatively from its tech-heavy peers. The probability of a 25bp cut from the Fed in December shot up to 83% from around 70%.

This week’s CPI data will be the last piece of the puzzle before the Fed meets next week. The CPI number is expected to print a small uptick in November, but should not compromise a December Fed cut. January however will probably be a close call.

Elsewhere, the week will be packed with central bank decision. The European Central Bank (ECB), the Bank of Canada (BoC), the Reserve Bank of Australia (RBA) and the Swiss National Bank (SNB) will announce their latest policy verdict throughout this week and all – except the RBA – are expected to lower their rates. The BoC is expected to cut by 50bp while the SNB and the ECB are expected to announce a 25bp cut. Some investors are convinced that the ECB could announce more than a 25bp cut. Either it could go bigger with a 50bp cut, or cut by 25bp but shift their focus from inflation to economic growth. I believe that the second option is more plausible. If that’s the case, we should not see a significant selloff in the euro post-decision.