Daily market analysis

Forex Market Analysis: EUR/USD Surge & Gold Eyes Record 29 December 2023

December 29, 2023

Forex Daily Analysis 29 December 2023

CURRENCIES:

  • EUR/USD Breakout and Analysis:
    • Shift in interest rate expectations leads to a dovish direction.
    • Treasury yields and the U.S. dollar experience a significant decline.
    • EUR/USD rallies, surpassing crucial technical levels.
  • GBP/USD Surges Toward Resistance:
    • U.S. Treasury rates sharply drop from October cycle highs.
    • DXY index reaches a five-month low due to a plummeting U.S. dollar.
    • GBP/USD demonstrates a strong surge, approaching key resistance levels.
  • Gold Eyes Record Amid Technical Breakout:
    • Falling Treasury yields contribute to a decline in the U.S. dollar.
    • Gold prices break above a major resistance region.
    • Technical analysis suggests potential for additional gains in the near term.
  • Market Overview:
    • U.S. Treasury rates slide ahead of New Year’s holidays.
    • Thin markets witness accelerated declines in 2- and 10-year yields.
    • Overall, the market experiences a notable shift in sentiment and positioning.

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STOCK MARKET:

  • Stock Market Drifts Higher with S&P Near Record:
    • Wednesday sees a marginal uptick in stocks amid a shortened trading week.
    • S&P 500 approaches its all-time high close of 4,796.56 but falls short of setting a new record.
    • Dow Jones Industrial Average leads gains, rising by 0.3%, while Nasdaq Composite and S&P 500 also show modest increases.
  • Year-End Performance of Major Averages:
    • All three major averages have achieved double-digit gains for the year.
    • S&P 500 records a more than 24% increase, Dow Jones up over 13%, and Nasdaq leads with about 44% gains.
    • Investors anticipate an extension of two months of market gains, with the S&P 500 heading for its ninth consecutive week of increases.
  • Market Sentiment and Federal Reserve Expectations:
    • The recent surge in stocks correlates with increased expectations of a Federal Reserve interest rate cut in March.
    • Investors bet on falling inflation closer to the central bank’s 2% target, showing confidence in the economy avoiding a significant slowdown.
    • S&P 500’s impressive run over the past two months reflects positive sentiment and confidence in the market.
  • News Impact on Individual Stocks:
    • The New York Times Company sees a more than 2% rise after suing Microsoft and OpenAI for copyright infringement.
    • Apple successfully pauses a ban on the sales of Apple Watch Series 9 and Watch Ultra 2 in the US, impacting shares of medical technology firm Masimo, which falls over 4%.
    • Treasury yields remain near levels unseen since July, with the 10-year Treasury yield falling almost 10 basis points to 3.79% on Wednesday.

Styliana Charalambous
Market Analyst

My name is Styliana Charalambous, possessing a professional qualification as a Chartered Certified Accountant and a Bachelor’s Degree in Accounting and Finance. Highly motivated financial analyst with expertise in audit and investment strategies. I have several years of experience in the finance industry, as an audit supervisor at KPMG and the Head of Investment & Market Research in a multinational Fintech company.

Passionate about personal finance, investing, and creating finance content on social media. Lecturer in Accounting & Finance at Canterbury Christ Church University. I am the Founder and CEO of Selfmade Academy, an organization that helps thousands of students worldwide to plan for their financial future and make smart decisions about their money

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