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EUR/USD: Diverging Economic Realities Point to Further WeaknessEUR/USD: Diverging Economic Realities Point to Further Weakness The EUR/USD currency pair faces mounting pressure as economic data and central bank commentary from both sides of the Atlantic paint contrasting pictures. With the year-end approaching, traders are navigating through a mix of historical trends, updated macroeconomic indicators, and shifting monetary policy expectations. --- Eurozone: Fragility Persists Industrial and Consumer Weakness Germany's 1.5% MoM decline in industrial orders, though marginally better than expected, reflects ongoing struggles in Europe's largest economy. Additionally, retail sales in the Eurozone fell by 0.5% MoM, highlighting a weak consumer spending environment that continues to drag on growth prospects. PMI and GDP Concerns The Composite PMI edged up slightly to 48.3, but contraction persists, underscoring the broader economic challenges in the region. Italy's downward revision of GDP forecasts further dampens sentiment, increasing the likelihood of more accommodative measures from the European Central Bank (ECB). ECB's Dovish Tilt ECB policymakers, including Robert Holzmann, have signaled a potential rate cut in December, reflecting a shift towards easing amid the Eurozone's persistent economic struggles. However, political instability, such as France's no-confidence vote against President Macron, adds another layer of uncertainty to the region's economic outlook. --- United States: Resilience Amid Inflation Challenges Economic and Labor Market Data The U.S. economy continues to show signs of resilience. Durable goods orders rose 0.3% and construction spending increased by 0.4%, aligning with expectations. Despite a slight drop in the ISM Services PMI to 52.1, the economy remains in expansion mode. The labor market also remains a pillar of strength: - Nonfarm Payrolls: 227k (forecast: 220k, previous: 12k, revised: 36k). - Unemployment Rate: 4.2% (forecast: 4.1%, previous: 4.1%). - Average Earnings YoY: 4.0% (forecast: 3.9%, previous: 4.0%). While layoffs have ticked up slightly, strong payroll growth and stable wages suggest continued labor market robustness, albeit with signs of gradual cooling. Fed's Monetary Policy Path Fed officials, including John Williams and Mary Daly, have hinted at potential rate cuts in 2024, but progress on inflation appears to have stalled, as noted by Fed Governor Michelle Bowman. Market sentiment is shifting rapidly—traders now see an 85% probability of a Fed rate cut this month, up from 67% before the November jobs report. Short-term interest-rate futures have surged, reflecting growing expectations of a dovish pivot. However, the Fed remains cautious, balancing inflationary risks with economic stability. --- Inflation and Consumer Sentiment The University of Michigan's latest data reinforces the U.S. economy's resilience: - 1-Year Inflation Expectations: 2.9% (forecast: 2.7%, previous: 2.6%). - Consumer Sentiment Prelim: 74.0 (forecast: 73.2, previous: 71.8). Elevated inflation expectations and improving consumer sentiment contrast with the Eurozone's gloomy outlook, further strengthening the dollar's appeal. --- EUR/USD Outlook: Bearish Bias Remains Intact Despite historical trends that favor the euro in December, the current economic backdrop presents significant challenges for sustained appreciation. Weak Eurozone data and a dovish ECB stand in stark contrast to the U.S. economy's relative stability and the Fed's measured approach. Key Factors Driving EUR/USD: 1. Diverging Data: Strong U.S. labor and inflation figures versus weak Eurozone performance. 2. Monetary Policy: Fed's cautious flexibility versus ECB's dovish signals. 3. Sentiment Shift: Rising probability of U.S. rate cuts but with a stronger baseline economy. While seasonal trends may provide temporary relief for the euro, the broader trajectory points downward. Traders should focus on macroeconomic developments and central bank guidance as the primary drivers for the pair in the coming weeks. The euro's path to recovery remains steep, with the U.S. dollar maintaining the upper hand in the current environment.
Short
by InvestMate
Comprehensive Market Recap – December 6, 2024Comprehensive Market Recap – December 6, 2024 Today’s financial markets delivered a complex mix of optimism, geopolitical tension, and robust economic data, offering plenty for investors to analyze. Here's a deep dive into the day’s major events and their implications: --- Equities and Indices: Record Highs Amid Resilience - S&P 500 Hits Milestone: The S&P 500 registered its 57th record-high close of the year, underscoring persistent strength in U.S. equities. Solid labor market data, coupled with easing inflation concerns, fueled confidence. Market-on-close (MOC) imbalances revealed a $25 million inflow for the S&P, while Nasdaq attracted a robust $165 million. - Nasdaq Leadership Continues: The "Magnificent Seven" stocks drove $195 million in MOC inflows, reinforcing the narrative of tech dominance in market performance. - HSBC's Bold Prediction: HSBC announced an ambitious target of 6,700 for the S&P 500 by the end of 2025, signaling long-term confidence in the U.S. economy despite near-term uncertainties. --- Energy Sector: Declining Prices Amid Mixed Sentiment - Crude Oil Declines: Brent Crude settled at $71.20 per barrel (-1.35%), while WTI Crude dropped to $67.20 (-1.61%). The Saudi Energy Minister’s comments about weak Q1 demand and stockpiling concerns contributed to bearish sentiment. - Natural Gas Steady: NYMEX Natural Gas January futures settled at $3.076/MMBtu, maintaining relative stability amidst expectations of mild winter weather. - Chevron’s Optimism: Despite current price weakness, Chevron’s CEO projected record U.S. oil production in 2025, reflecting long-term confidence in energy fundamentals. --- Forex and Fixed Income: Dollar Strength and Rate Cut Expectations - Strong Dollar Performance: The U.S. Dollar Index strengthened, bolstered by robust labor market data and improved consumer sentiment. - Labor Data Surprises: U.S. nonfarm payrolls exceeded forecasts, reporting 227,000 jobs added in November (forecast: 220,000). The unemployment rate remained steady at 4.2%, while average hourly earnings grew 0.4% MoM (forecast: 0.3%), signaling continued wage growth. - Canadian Dollar Volatility: Canada’s labor market outperformed expectations with 50.5k jobs added, yet the unemployment rate rose to 6.8%. This fueled speculation that the Bank of Canada will cut rates by 50 bps in its next meeting. --- Crypto Markets: Growing Confidence - Record Inflows: The cryptocurrency market saw an unprecedented four-week inflow of $11 billion, indicating heightened investor confidence. Today’s Crypto Fear and Greed Index stood at 72/100 (“Greed”), suggesting bullish sentiment across the market. - Regulatory Scrutiny: The Consumer Financial Protection Bureau (CFPB) imposed supervisory authority over Google Pay, reflecting growing regulatory oversight of digital payment and crypto-adjacent platforms. --- Central Bank Commentary: The Pivot Debate Intensifies - Federal Reserve: - Fed officials maintained a cautious tone, emphasizing the importance of incoming data. Fed’s Daly and Goolsbee hinted at slower rate adjustments moving forward, citing balanced labor market conditions and improving inflation trends. - Daly highlighted that inflation is nearing the Fed’s 2% target, while Goolsbee noted that interest rates are likely to be significantly lower in a year’s time. - Bank of England: - BoE’s Dhingra raised concerns about the restrictive nature of the current monetary policy, arguing for easing measures to prevent further damage to supply capacity and investment. - Reserve Bank of Australia: - Economists unanimously expect the RBA to hold rates steady at 4.35% in its December meeting, deferring any cuts to Q2 2025. --- Macroeconomic Indicators: Mixed Signals Across Regions United States: - Consumer Credit Boom: U.S. consumer credit surged to $19.239 billion in October (forecast: $10 billion), reflecting robust household spending and economic activity. - University of Michigan Survey: December’s preliminary data showed improved consumer sentiment (74 actual vs. 73.2 forecast), though long-term inflation expectations held at 3.1%. Eurozone: - *Steady Growth: Revised Q3 GDP figures confirmed 0.4% QoQ growth, while employment improved by 0.2%. However, German industrial production disappointed, falling -1.0% MoM in October (forecast: +1.0%). - Sanctions Deadlock: EU envoys failed to reach consensus on the 15th package of sanctions against Russia, reflecting geopolitical tensions. Asia-Pacific: - China Stimulus Hopes: Chinese equities rose on expectations of fiscal stimulus after Xinhua reported room for increased fiscal deficits in 2024. - Japanese Labor Market: Japan’s October household spending rebounded 2.9% MoM but remained weak on a YoY basis (-1.3%). Wage growth was steady at 2.6%, supporting domestic demand. --- Geopolitical Developments: Rising Tensions and Diplomacy - Middle East: Geopolitical risks escalated as reports emerged of heightened U.S. fighter activity in Syria and Israeli operations near the Lebanon-Syria border. - *Iran’s Nuclear Ambitions: The IAEA confirmed Iran’s plans to significantly increase uranium enrichment to 60% purity, a move condemned by the German Foreign Ministry as a “grave escalatory step.” - TikTok Ban Battle: TikTok's CEO announced intentions to seek U.S. Supreme Court intervention to block a ban, adding to geopolitical and regulatory tensions surrounding Chinese technology companies. --- Sector Highlights: Corporate Moves and Industry Trends - Tech Innovation in Defense: Palantir's partnership with Anduril underscores the increasing role of artificial intelligence in modern defense strategies. This announcement fueled optimism in the tech sector. - *French Political Uncertainty: Fitch Ratings highlighted deepening political and budgetary uncertainty in France following government instability, signaling potential fiscal risks. - Mercosur-EU Deal: The EU’s agreement with Mercosur is set to save European businesses €4 billion annually, highlighting progress in global trade negotiations. --- Key Takeaways and Market Outlook 1. Optimism Balanced with Caution: Strong U.S. labor data and innovation in key sectors bolster market confidence, but central banks remain cautious about the pace of easing amid persistent inflation risks. 2. Geopolitical Risk Looms: Escalating tensions in the Middle East and concerns over Iran’s nuclear ambitions may weigh on energy markets and global stability. 3. Sectoral Shifts: Technology and green energy continue to dominate investor focus, with defense and AI playing critical roles in corporate strategies. Today’s market activity highlights the delicate balance between robust economic fundamentals and underlying risks. As global markets navigate these dynamics, investors should stay vigilant for potential shifts in policy, geopolitics, and macroeconomic conditions.
by InvestMate
1
EUR/USD: Diverging Economic Realities Point to Further WeaknessEUR/USD: Diverging Economic Realities Point to Further Weakness The EUR/USD currency pair faces mounting pressure as economic data and central bank commentary from both sides of the Atlantic paint contrasting pictures. With the year-end approaching, traders are navigating through a mix of historical trends, updated macroeconomic indicators, and shifting monetary policy expectations. --- Eurozone: Fragility Persists Industrial and Consumer Weakness Germany's 1.5% MoM decline in industrial orders, though marginally better than expected, reflects ongoing struggles in Europe's largest economy. Additionally, retail sales in the Eurozone fell by 0.5% MoM, highlighting a weak consumer spending environment that continues to drag on growth prospects. PMI and GDP Concerns The Composite PMI edged up slightly to 48.3, but contraction persists, underscoring the broader economic challenges in the region. Italy's downward revision of GDP forecasts further dampens sentiment, increasing the likelihood of more accommodative measures from the European Central Bank (ECB). ECB's Dovish Tilt ECB policymakers, including Robert Holzmann, have signaled a potential rate cut in December, reflecting a shift towards easing amid the Eurozone's persistent economic struggles. However, political instability, such as France's no-confidence vote against President Macron, adds another layer of uncertainty to the region's economic outlook. --- United States: Resilience Amid Inflation Challenges Economic and Labor Market Data The U.S. economy continues to show signs of resilience. Durable goods orders rose 0.3% and construction spending increased by 0.4%, aligning with expectations. Despite a slight drop in the ISM Services PMI to 52.1, the economy remains in expansion mode. The labor market also remains a pillar of strength : - Nonfarm Payrolls: 227k (forecast: 220k, previous: 12k, revised: 36k). - Unemployment Rate: 4.2% (forecast: 4.1%, previous: 4.1%). - Average Earnings YoY: 4.0% (forecast: 3.9%, previous: 4.0%). While layoffs have ticked up slightly, strong payroll growth and stable wages suggest continued labor market robustness, albeit with signs of gradual cooling. Fed's Monetary Policy Path Fed officials, including John Williams and Mary Daly, have hinted at potential rate cuts in 2024, but progress on inflation appears to have stalled, as noted by Fed Governor Michelle Bowman. Market sentiment is shifting rapidly—traders now see an 85% probability of a Fed rate cut this month, up from 67% before the November jobs report. Short-term interest-rate futures have surged, reflecting growing expectations of a dovish pivot. However, the Fed remains cautious, balancing inflationary risks with economic stability. --- Inflation and Consumer Sentiment The University of Michigan's latest data reinforces the U.S. economy's resilience: - 1-Year Inflation Expectations: 2.9% (forecast: 2.7%, previous: 2.6%). - Consumer Sentiment Prelim: 74.0 (forecast: 73.2, previous: 71.8). Elevated inflation expectations and improving consumer sentiment contrast with the Eurozone's gloomy outlook, further strengthening the dollar's appeal. --- EUR/USD Outlook: Bearish Bias Remains Intact Despite historical trends that favor the euro in December, the current economic backdrop presents significant challenges for sustained appreciation. Weak Eurozone data and a dovish ECB stand in stark contrast to the U.S. economy's relative stability and the Fed's measured approach. Key Factors Driving EUR/USD: 1. Diverging Data: Strong U.S. labor and inflation figures versus weak Eurozone performance. 2. Monetary Policy: Fed's cautious flexibility versus ECB's dovish signals. 3. Sentiment Shift: Rising probability of U.S. rate cuts but with a stronger baseline economy. While seasonal trends may provide temporary relief for the euro, the broader trajectory points downward. Traders should focus on macroeconomic developments and central bank guidance as the primary drivers for the pair in the coming weeks. The euro's path to recovery remains steep, with the U.S. dollar maintaining the upper hand in the current environment.
Short
by InvestMate
Euro rally ends, Eurozone GDP expected to accelerateThe euro is steady on Friday after jumping 0.7%  a day earlier. In the European session, EUR/USD is trading at 1.0581, down 0.06% at the time of writing. The eurozone wraps up the week with the GDP and job growth reports and the market is expecting an improvement.  Third-quarter GDP is expected to improve to 0.4% q/q from o.2% in the second quarter. Job growth if forecast to tick upwards to 0.2% q/q, up from 0.1% in Q2. In France, the political chaos continues. A no-confidence vote passed this week and has left the country without a functioning government. Prime Minister Michel Barnier resigned on Thursday after just three months in office. President Emmanuel Macron said he will name a new prime minister shortly but the political crisis could push up French interest rates and the country's large debt. Germany, once the powerful locomotive of the eurozone, has faltered badly and has hampered growth in the eurozone. This week's German manufacturing data was dismal. The Manufacturing PMI remains mired in contraction and was unchanged at 43.0 in November. Factory orders for October declined by 1.5% after a 7.2% gain a month earlier. On Friday, industrial production fell 1% in October, after a 2% decline in September and shy of the market estimate of 1.2%. The German Services PMI slipped into contraction in November and there is political instability, as the coalition German government collapsed in November. A snap election has been scheduled for Feb. 23, 2025. The US wraps up the week with the nonfarm payroll report. With inflation largely contained, the employment growth is once again a key release can move the US dollar. The November report is expected to rise to a respectable 200 thousand, after a weak gain of 12 thousand in October, which was driven downwards by hurricanes and work stoppages at Boeing. EUR/USD faces resistance at 1.0615 and 1.0644 1.0562 and 1.0533 are providing support
by OANDA
65 Consecutive Wins: The Definitive No-Repaint Trading SystemLets see if we can keep the Undefeated Wining Streak on todays NFP on EURUSD. 🚀 For traders tired of subjective methods and lagging indicators, this objective approach has achieved 65 consecutive winning setups! 💡 This idea highlights how replacing traditional tools with data-driven strategies, non-linear logic, and systematic trade management can transform trading performance. By analyzing live market conditions and applying precise execution principles, this complete and definitive strategy eliminates the pitfalls of emotional trading and hindsight bias. 📊 Key Focus: ✔️ Master liquidity dynamics. ✔️ Align with market flows. ✔️ Apply an objective, rule-based system for consistent results. 🎥 Curious to know more? Explore my profile for deeper insights and watch the trade-by-trade backtest video for full transparency. This isn’t about shortcuts—it’s about empowering traders with practical tools for success! ⚡ Versatility in Action: This system adapts to scalping, intraday, or swing trading. The 65 consecutive wins were backtested on a EURUSD swing chart layout. 📌 Disclaimer: All strategies should be tested and tailored to individual needs. This content is for educational purposes only and does not constitute financial advice.
Short
by BullTradingAM
4
idea on a NFP EUR/USD stays defensive below 1.0600 in the European session on Friday. The US Dollar holds ground due to profit-taking and a softer risk tone. Traders refrain from placing fresh bets on the pair ahead of the critical US Nonfarm Payrolls data release.US Nonfarm Payrolls are set to jump by 200K in November after rising by just 12K in October. The United States Bureau of Labor Statistics will publish the labor data on Friday at 13:30 GMT. US jobs data is critical to gauging future Fed rate cuts and the US Dollar price direction.
by EZIO-FX
EUR/USD Remains Cautious: Traders Await US Payrolls DataThe EUR/USD currency pair remains cautious as it trades below the 1.0600 level during the European session on Friday, just shy of a previous resistance zone. The US Dollar is maintaining its stability, supported by profit-taking and a subdued risk appetite among investors. Market participants are hesitant to commit to new positions ahead of the pivotal US Nonfarm Payrolls report, which includes key indicators such as Average Hourly Earnings, Non-Farm Employment Change, and the Unemployment Rate. The day's events are significant and will likely influence the direction of the DXY index as we approach the new week. From a technical perspective, the price remains under the 1.0600 resistance level. The latest Commitment of Traders (COT) report indicates a shift in retailer positioning towards a bullish sentiment, while non-commercial traders continue to display a bearish outlook. Currently, we are refraining from taking any positions. However, we maintain a bearish bias and anticipate a potential decline that could retest the 1.0400 zone or even extend lower. ✅ Please share your thoughts about EUR/USD in the comments section below and HIT LIKE if you appreciate my analysis. Don't forget to FOLLOW ME; you will help us a lot with this small contribution.
Short
by FOREXN1
1