Fundamental analysis GBPUSD, EURUSD, NZDUSD, AUDUSD, USDCAD, XAUUSD, Brent, WTI for 23.12.2021
In the run-up to Christmas the trading volume on the forex market decreased significantly. Many investors are taking a break, but the movement of major currency pairs is significant. Growth of the U.S. stock market indicates a surge of investors' interest in high-risk assets. The U.S. dollar as a major "safe-haven asset" is also losing ground amid declining concerns over the dangers of the new Omicron strain COVID-19. According to studies conducted in South Africa and the UK, the number of hospitalized citizens infected with Omicron is extremely low. At the same time at the end of this year it is becoming clear that the U.S. economy is strong enough, the statistics remain positive and the bold actions of the Fed point to the restoration of the dollar's position in the medium and long term.
U.S. GDP grew 2.3% in the third quarter, which is 2% better than the forecast. The U.S. secondary housing market has posted three consecutive months of positive growth. U.S. citizens are becoming less worried about high inflation, as evidenced by consumer confidence rising to 115.8 basis points in December.
EUR/USD is declining today after rising the day before. Inflation in the euro zone is much lower than in the US and the UK. Employers do not need to increase labor costs. At the same time the ECB, which has been extremely cautious so far, has announced a plan to cut QE for 2022. The pair is traded in the limited price range of 1.1250-1.1350, a break-down of which will indicate the pair's further trend.
The British currency has strengthened considerably this week. GDP slowed down in the third quarter but the annual data and the outlook for the next year remain positive. At the moment it is very important that the new strain is less dangerous than the delta, so Investizo expect the labor market to expand and economic activity to accelerate early next year. The next target for the GBP/USD is 1.3500.
AUD/USD and NZD/USD have traditionally strengthened amid rising risk appetite among market participants. Big economies of the Pacific zone are recovering very quickly after the lock-ups, especially it concerns Australia which, according to the central bank statements, is ready to consider options of phasing out asset purchases, which seemed impossible a few months ago. USD/CAD is weakening on oil prices recovery. Most investors took profits on long positions at 1.2900, which put pressure on the pair. To confirm the downtrend, it is necessary to overcome the strong support at 1.2800.
The oil market is positively greeted by good news from South African and British virologists about Omicron. Also Brent and WTI got support from a decline in major oil products inventories in the US, however it is worth noting that gasoline inventories have increased. In addition, due to rising gas prices the European industry is forced to look for alternative sources of energy among oil products.
XAU/USD reached the level of 1800 again and slowed down. The weakness of the dollar contributed to an increase in long gold positions. However, massive profit taking at the strong psychological levels and rising risk appetite might contribute to the reversal of the uptrend within a few days. Now it is very important to understand if the "bulls" will be able to maintain the current progress.