The market is showing a tendency for stability as European trading commenced on Thursday (December 26, 2024). However, tonight’s trading session may experience increased volatility due to the upcoming release of US unemployment claims data at 20:30 WIB.
Forecasts from Trading Central indicate that for the week ending December 21, there are expected to be 223,000 claims, an increase from the previous week’s figure of 220,000.
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Additionally, the Santa Claus Rally in the United States, known for causing high volatility in stock indices, will also play a crucial role in market movements.
Comprehensive research and analysis concerning the Santa Claus Rally and its implications for Gold and currencies can be explored in our special article titled “Dual Effects of the ‘Trump Trade’ and the Santa Claus Rally on Financial Markets.”
GOLD
The Gold (XAUUSD) price managed to sustain gains as European trading began, hovering around a daily high of $2,629.46 per troy ounce.
Several economic indicators from the US, released since last Friday, largely fell below forecasts, including inflation based on the Personal Consumption Expenditure (PCE) index. Consequently, the sentiment surrounding Gold remains considerably positive. Furthermore, Gold typically flourishes during the Santa Claus Rally period.
In light of these developments, Gold may enjoy additional favorable sentiment if the unemployment claims data comes in higher than predicted. This could lead investors to become increasingly confident that the Federal Reserve might cut interest rates more than twice in the upcoming year.
OIL
Oil prices (CLS10) continue their upward trend as European trading commenced, reaching a daily high of $70.55 per barrel. This marks a $0.4 increase compared to Tuesday’s closing prices.
The rise in Oil prices follows reports that China plans to inject approximately 3 trillion yuan (equivalent to $411 billion) into its economy as part of additional stimulus measures in 2025.
This stimulus is anticipated to invigorate economic activity, potentially increasing Oil demand. Such positive sentiment will likely influence Oil’s movement during the US trading session tonight.
EURUSD
The EURUSD currency pair is trading sideways within the range of 1.03903 – 1.04098 at the beginning of European trading. This pair saw an opening price gap that was significantly higher than the closing price from Tuesday.
This movement suggests that the US dollar could face pressure throughout today’s trading. Along with some US economic data that has been released below forecast levels, the Santa Claus Rally period generally results in negative performance for the US dollar.
Hence, if unemployment claims data surpasses the forecast, the US dollar could experience even greater decline, which would be a positive sentiment for EURUSD.
GBPUSD
The trend of the GBPUSD pair mirrors that of the EURUSD, experiencing a gap up and likely moving sideways within the range of 1.25216 – 1.25611 at the onset of European trading.
Taking this into consideration, GBPUSD stands to gain positive sentiment if the unemployment claims data exceeds the forecast of 223,000 according to Trading Central.
USDJPY
USDJPY reversed course to rise to 157.475 during early European trading after hitting a low of 157.072 this morning.
Even with this upward shift, there’s still a chance USDJPY could be negatively impacted if unemployment claims exceed the forecast. This would bolster expectations that the Federal Reserve may cut interest rates more than twice next year.
Nasdaq
The Nasdaq index has slipped to 21,894 at the outset of European trading following a bout of profit-taking. Earlier in the morning, it reached 22,110, nearing its all-time high of 22,151 set on December 16. The Nasdaq’s movement has been highly volatile given that it is currently within the Santa Claus Rally period.
The Nasdaq typically performs well during this timeframe, and thus, this potential decline could trigger buying actions, especially if the US unemployment claims data comes in greater than the forecast.
