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Trends in Forex and Precious Metals Markets


5 December 2023 Written by Sandro Pontedra  Finance Industry Expert Sandro Pontedra

This analysis provides a comprehensive overview of key economic data and market trends for Week 49, focusing on the EURUSD and XAUUSD pairs. These insights are crucial for understanding the dynamics driving the Forex and gold markets. Week 49 brings pivotal economic data that could shape the near-term outlook for EURUSD and XAUUSD. Traders and investors should closely monitor these developments, as they could lead to significant movements in the Forex and gold markets.

The combination of economic indicators, technical analysis, and geopolitical factors will play a critical role in determining market trajectories in the upcoming days.

Economic Data Influencing Market Trends

Several significant economic events are poised to impact the markets this week:

Tuesday:

Wednesday:

Thursday:

Friday:

EURUSD Analysis

The US Dollar's performance remains shaky post the cautious remarks from Federal Reserve Chair Jerome Powell. Powell's speech indicated a slowdown in the economy, hinting at a potential end to the rate-hike cycle. Market speculations, influenced by the Fedwatch tool, now see a possible rate cut by March, shifting from the previous June projection.

The US Dollar's performance remains shaky post the cautious remarks from Federal Reserve Chair Jerome Powell

The Euro dipped after recent eurozone inflation data, raising prospects of ECB rate reductions. Technically, EURUSD has hit resistance near $1.10, a significant barrier due to its psychological impact and historical relevance. The pair is now retesting support at the 23.6% Fibonacci retracement level, with further downside potential, particularly if the US dollar strengthens. Key support could be found around $1.073, aligning with the 50% Fibonacci level, Bollinger Bands, and moving average convergences.

Gold (XAUUSD) Market Movements

Gold prices experienced a notable surge, breaking past $2,100, driven by geopolitical tensions and a dovish Federal Reserve stance. The weakening US Dollar also contributed to this rally. Gold's break above key technical levels signified strong bullish momentum, though it has since retreated from the peak.

Gold prices experienced a notable surge, breaking past $2,100

Technically, the price is testing resistance at the Bollinger Bands upper limit, with the Stochastic oscillator indicating a pullback from overbought conditions. The bullish trend remains intact, as indicated by the 50-day moving average's position above the 100-day average. Should a correction occur, the first major support zone is anticipated around $2,000, a psychological threshold closely aligned with the 78.6% Fibonacci retracement on the weekly chart.

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