The British monthly GDP is announced on Friday at 09:00 MT time.
Markets ahead of Christmas
- The UK and the EU negotiators are working to finalize the historic Brexit trade deal. An announcement is expected today, which will drive the pound up. Actually, the GBP has already started rallying upwards. Check out GBP/USD and EUR/GBP.
- The USD was pressed down by the Brexit hopes and by the US stimulus package impasse. After the US Congress passed a coronavirus-relief bill, US President Donald Trump refused to sign it. He insists that the $600 payment should be $2 000. House Democrats supported that idea.
- Pfizer and BioNTech will double the deliveries of their Covid-19 vaccine to the US. Scientists seem to agree that the vaccines will be efficient against the new coronavirus strain as well, improving the market sentiment.
- UK Prime Minister Boris Johnson imposed stricter restrictions in the country because of the new virus strain, which is quickly spreading.
EUR/USD is trading in an ascending channel. If it jumps above the high of December 22 at 1.2240, the way up towards the high of December 17 at 1.2270 will be clear. On the flip side, if the pair drops below the lower trendline of 1.2175, it may fall to the next support of 1.2150.
The British pound is edging higher on hopes for a soon Brexit agreement. The way up to the high of December 17 of 1.3610 is clear now. If it manages to break it, the next barrier will be at 1.3700. In the opposite scenario, the move below the support zone of 1.3460-1.3435 will drive the pair to the 200-period moving average of 1.3350.
XAU/USD is trading in a descending channel in the long term, but in an ascending one in the short-term. The price is supported by the 50-period moving average from the downside. The doors are open towards the high of December 17 at $1 890. The breakout of this level will drive gold to $1 900. Support levels are at the recent lows of $1 860 and $1 850.
EUR/GBP has approached the key support at the 200-period moving average of 0.9000. It’s unlikely to cross it by the first attempt as the pair has failed to break it several times this month. Therefore, the pullback to the upside is expected. If EUR/GBP finally crosses this level, the way down to the low of December 1 at 0.895 will be clear. Once the Brexit agreement is announced, the GBP should skyrocket and EUR/GBP should drop.
The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
The US unemployment claims are out on Thursday at 15:30 MT time.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.