On December 23, Beijing time, in the early Asian trading on Monday, the US dollar index hovered around 107.77. Last Friday, the US dollar index fell from a two-year high, closing down 0.543% at 107.83, as the Fed's favorite inflation indicator cooled, which led to expectations of rate cuts, but it still rose for the third consecutive week. U.S. Treasury yields weakened across the board, with the two-year Treasury yield closing at 4.317% and the 10-year Treasury yield closing at 4.519%. Spot gold extended its gains after the release of the U.S. PCE data, once standing above the $2,630 mark, then fell back, and finally closed up 1.01% at $2,620.79 per ounce. Spot silver followed the rebound of gold and finally closed up 1.62% at $29.51 per ounce. Supported by the weakening dollar and Trump's threat to the EU to buy U.S. oil and gas, international crude oil fell more than 1% during the session before turning up. WTI crude oil finally closed up 0.38% at $69.48 per barrel; Brent crude oil closed up 0.47% at $72.65 per barrel.
US dollar index: As of press time, the US dollar index hovered around 107.77. The US dollar index has now fallen to near the 100-hour moving average. Friday's pullback brought the US dollar index closer to the oversold level of the 14-hour relative strength index (RSI). Technically, if the US dollar index closes below the 107.80 level, it will move towards the nearest support level of 107.10–107.30.
Euro: As of press time, EUR/USD hovered around 1.0431. EUR/USD rose last Friday, closing at 1.0430, up 0.65%. The upward movement of EUR/USD may be attributed to the decline of the US dollar after the release of the US (US) personal consumption expenditure price index (PCE) data. In addition, the approval of tax reforms by German lawmakers strengthened the euro as Germany is the largest economy in the eurozone. These reforms will increase households' disposable income, boost consumer demand and stimulate economic growth. Technically, the nearest resistance for EUR/USD is in the 1.0435–1.0450 range. A break above the 1.0450 level will push EUR/USD towards the 50MA of 1.0473.
GBP: As of press time, GBP/USD hovered around 1.2573. GBP/USD rose on Friday, closing at 1.2570, up 0.54%. UK retail sales rose slightly by 0.2% month-on-month in November. This was a rebound from a 0.7% drop in October, but below market expectations of 0.5%. Weak clothing sales (which fell to the lowest level since January 2022) and wet weather hampered retail sales growth. Year-on-year, retail sales rose by 0.5%, following a 2% decline in October, below market expectations of 0.8%. Technically, a successful test of the resistance level of 1.2575–1.2590 will open the way for a test of the 50MA1.2666.
In the Asian session on Monday, gold traded around 2619.91. The weaker-than-expected US personal consumption expenditures (PCE) price index data last Friday added to the selling pressure on the dollar, although gold is struggling to stay a long way from the one-month low hit last week. PCE inflation rose 0.1% in November, compared with expectations of 0.2%. The annual rate accelerated to 2.4% from 2.3% last month, still below the market consensus of 2.5%. Similarly, core PCE fell to 0.1% from 0.3% in October, while the annual inflation rate remained at 2.8%, while the market expected it to rise to 2.9%.
Technical side: Gold is making a corrective recovery from severely oversold levels. However, the broader trend remains bearish. The pair is struggling to find acceptance above $2,600, with the relative strength index (RSI) in the 4-hour chart remaining below the 50 threshold, highlighting bearish momentum. Immediate resistance is at the intraday high of $2,605, with the key resistance area challenging the bearish trend in the $2,625-2,630 area (November 28, December 2 lows). On the downside, support is around Wednesday's low of $2,580, followed by the November low of $2,540.
Crude oil traded around 69.57 in Asian trading on Monday. The Federal Reserve's monetary policy has played a key role in influencing oil price trends. The dollar surged to a near two-year high early last week, making crude oil more expensive for non-dollar holders, thereby amplifying the negative factors for crude oil. Although inflation data cooled over the weekend, triggering a small correction in the dollar, the Federal Reserve's cautious outlook for future rate cuts has heightened concerns about slowing economic growth.
Technical: Crude oil prices are likely to remain under pressure in the next trading week. A break below $68.69 could pave the way for further declines to $66.11 and $62.94. On the upside, resistance at $71.10 remains a key barrier. If prices break above that level, traders may target $74.00, although the upward momentum appears to be limited by weak demand signals and policy uncertainty.
① 15:00 UK third quarter GDP annual rate final value
② 15:00 UK third quarter current account
③ 17:00 Swiss December ZEW investor confidence index
④ 21:30 Canada October GDP monthly rate
⑤ 23:00 US December Conference Board consumer confidence index
⑥ 02:30 the next day Bank of Canada releases minutes of December monetary policy meeting