The market showed relative stability at the start of the European trading session on Monday (December 23, 2024), but significant movements are anticipated later in the evening. Recently released core inflation data based on the Personal Consumption Expenditures (PCE) index from the United States has exerted negative sentiment on the US dollar.
This data has sparked speculation that the Federal Reserve might lower interest rates more than twice in the coming year, putting pressure on the dollar. Nonetheless, there is potential for a dollar rebound, especially with consumer sentiment data set to be released tonight at 22:00 WIB. According to Trading Central’s forecast, this month’s consumer sentiment is expected to be 112.4, up from 111.7 in the previous month.
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GOLD
As anticipated, the price of Gold (XAUUSD) has risen at the start of the European session to $2,633.31 per troy ounce. Compared to Friday’s closing, Gold has increased by over $10 or 100 pips.
Gold’s sharp rise last Friday was driven by market expectations that the Federal Reserve may cut interest rates more than twice next year.
However, the upward momentum of Gold appears to be waning, and if the consumer sentiment data exceeds forecasts, Gold may face downward pressure.
OIL
Oil prices (CLS10) have increased at the beginning of the European session, reaching a daily high of $69.43 per barrel. This reflects an increase of $0.39 compared to Friday’s closing.
The prospect of the Federal Reserve possibly making more than two rate cuts next year has allowed Oil prices to break a four-day losing streak. If rates are cut aggressively, it could lead to higher demand for Oil.
However, should the consumer sentiment data exceed forecasts, the US dollar might strengthen once more, which could weigh negatively on Oil prices.
EURUSD
The EURUSD pair has declined to 1.04073 after previously rising to 1.04455. This movement indicates a weakening of the euro due to expectations that the European Central Bank (ECB) may also aggressively cut rates next year.
Further pressure on EURUSD could materialize tonight if consumer sentiment data is released higher than anticipated.
GBPUSD
The GBPUSD pair has managed to maintain its strength at the start of the European session, hovering near the daily high of 1.25880. Compared to Friday’s close, GBPUSD has risen by 234 points (23.4 pips).
Similar to EURUSD, this currency pair may experience renewed pressure if consumer sentiment data exceeds forecasts.
USDJPY
USDJPY has risen in the early European session, reaching a daily high of 156.335 after a decline of nearly 100 pips last Friday.
Today’s increase in USDJPY suggests that the US dollar remains robust, and it could gain additional positive sentiment if consumer sentiment data surpasses forecasts.
Nasdaq
The Nasdaq has increased in the early session, hitting a daily high of 21,740. Compared to Friday’s close, the index has risen by 188 points. Nasdaq volatility has been very high following the PCE inflation data release last Friday.
This evening’s US consumer sentiment data has the potential to further increase Nasdaq volatility, with actual data higher than forecasts potentially leading to negative sentiment.
