Euro/Dollar in Consolidation
At the end of the week, investors prefer to conserve their energy. The Euro/Dollar remains stable around 1.0281 on Friday.
The daily chart for the EUR/USD pair suggests the formation of a consolidation zone within the range of 1.0265-1.0300. A downward breakout would open up opportunities for selling towards 1.0250, while an upward breakout would allow for a rise to 1.0315.
Investors are now pricing in the possibility of two interest rate cuts this year due to the weakening core inflation data in the U.S. for December. Thursday's figures showed that U.S. retail sales rose in December, indicating strong consumer demand and reinforcing the view that the Federal Reserve will be cautious in its approach to rate cuts this year. Last month, the Fed projected two rate decreases in 2025.
However, Fed Governor Christopher Waller stated on Thursday that three or four rate cuts are still possible if economic data continues to weaken.
Currently, markets are pricing in a reduction of 41 basis points by the end of this year.
Brent Oil Hits Pause
The commodity market has retraced its gains and returned to a "sideways" trend. The price of Brent crude oil is holding around $81.65 per barrel on Friday. Technically, Brent on the daily timeframe maintains a trajectory towards $82-83.00. Oil is still on track for its fourth consecutive week of gains, despite the pause.
The overnight price drop was triggered by speculation that President-elect Trump may ease sanctions on Russian energy exports as part of diplomatic efforts to resolve tensions between Russia and Ukraine. Reports of a ceasefire in the Middle East also contributed to a decrease in the geopolitical risk premium.
Expectations for additional rate cuts by the Federal Reserve could stimulate economic activity, potentially leading to increased demand for energy resources.
As Trump's inauguration approaches, traders are preparing for potential changes in policy, including tariffs on Canadian oil and measures to increase production in the U.S.
U.S. Premarket: Growth Paused, but It Will Return
American exchanges are on pause. The U.S. stock market has slightly declined. The futures for the S&P 500 index are trending downward in the premarket on Friday. On the daily chart, the possibility of returning to 6000 points for the S&P 500 remains high.
The decline was led by technology stocks, with significant losses for major players like Tesla (-3.4%), Nvidia (-2%), and Apple (-4%). Nevertheless, eight out of eleven sectors of the S&P closed in the green, with utilities, real estate, and industrials driving the growth.
Morgan Stanley's shares rose by 4% following the release of strong Q4 results. Bank of America’s shares fell by 1%, despite the bank exceeding expectations in both profit and revenue.
Bitcoin Rises to $101,400
The cryptocurrency market has finally moved upward. The BTC price has strengthened to $101,430.
For the flagship cryptocurrency, the external environment remains objectively favorable. Since the market has successfully surpassed $101,000, it could easily reach the resistance at $102,000. The next growth target is $105,000.
Here are the news items currently being monitored in the market:
- The likely U.S. Treasury Secretary opposed CBDCs;
- VanEck submitted an application to launch the Onchain Economy ETF;
- XRP reached a seven-year high on several major exchanges;
- Biden called AI the main technology and threat;
- Bitwise reported interest from one government in Bitcoin.
The market capitalization of digital assets has approached $3.58 trillion. The shares are as follows: BTC — 56.3%, ETH — 11.4%.