REGISTER
LOGIN
Weekly Outlook | Low Liquidity Might Cause Erratic Market Moves
Updated Updated Tue, 2024 December 31 01:55
Important events this week:
The final days of 2024 don’t offer important data as market participants still celebrate the festive season. In general, caution should be applied, as single unforeseeable events might move markets. Liquidity remains thin and stock markets show signs of a potential correction. The year has offered substantial returns in the equities sector and profit taking might just be overdue. With Trump taking over the White House in the US in particular the first quarter of 2025 might offer an increase in volatility.
– CN Purchasing Managers’ Index Production- The PMI data from China has been able to gear up steam. With the figure now staying above the 50- level, the positive momentum might be due to continue in the coming weeks. Yet the big unknown in regards to Trump’s trade policies might offer substantial headwinds to markets. Should the incoming US President implement new tariffs, the Chinese economy might be hurt sharply. Despite the demand of their own population, the economy relies on exports. The data might not move markets much but offer insights into the general state of the economy. The index will be published on Tuesday, 31 December at 02:30 CET.
– US unemployment claims- The weekly claims have been hovering around the 220k figure for a while without a major change in the trend on the horizon. However, a deviation from this number might cause markets to act volatile. Especially the quieter time of the year cold offer volatility in the EURUSD currency pair.
The reign of the Dollar has been ongoing and slight weakness of the Greenback has been used by traders to add fresh long positions. This might indicate that the weakness of the currency pair might continue. The psychological resistance level at 1.0500 could offer further negative momentum, should the price attempt to run to the upside again. A major change in the trend might only be seen if the market can break the current resistance area. The figure will be published on Thursday, 02 January at 14:30 CET.
– US ISM Manufacturing PMI – The ISM data has seen a slight positive change in direction early December. Yet, the figure remains below the 50- level, which would in general indicate a contraction. Another positive reading might cause the Dollar to pick up momentum again. In this case the NZDUSD currency pair could weaken further.
Another extension to the downside seams feasible, which could cause the market to move towards the support level at 0.5500. Vice versa the upside should be capped at the 0.5800 resistance level as the weekly chart shows. A weaker reading might hence offer fresh entries into new short positions of the currency pair. The figure will be published on Friday, 03 January at 16:30 CET.
