Market Focus

Wall Street’s three indexes rose strongly for the third consecutive trading day on Thursday, with the S&P 500 closing at a record high as investors become more assured of the economic impact of the Omicron coronavirus variant. The Asian stock market followed the US, but then closed lower as the market was light. On the other hand, the European markets closed lower amid light holiday trading on Friday, after the global stock markets rose due to signs that the Omicron variant might not disrupt the global economic recovery. In the shortened trading hours before Christmas, the Euro STOXX 50 index fell 0.1% to 4260.9. On Monday, investors should pay more attention to the pandemic situation after the holiday. If the number of infections surges, it may hurt the stock market.

Main Pairs Movement

After US data showed that the core PCE inflation rate in November was higher than expected, the US dollar index stabilized above 96.00 after falling in the first three days of this week. The major financial markets were closed on Christmas Eve on Friday, and the market was relatively flat.

The EUR/USD pair rose slightly during the European session, but then due to thin market liquidity, the exchange rate fell to 1.1300 in the US session on Thursday. Due to the Fed’s hawkish outlook, the upside of the EUR/USD pair will be limited.

GBP/USD gained bullish momentum this week due to some positive Brexit news and easing concerns about additional coronavirus-related restrictions in the UK. In this week, the pair has risen by about 100 pips and closed at around 1.3400.

Technical Analysis

AUDUSD (4- Hour Chart)

AUDUSD edged slightly lower on the holiday trading day, hovering above the 0.7227 level. From the technical perspective, the outlook of the currency pair remains bullish as it continues to trade within the ascending channel. The current support level acts as a critical level as it is the neckline of the W- formation on 4- hour chart. If the neckline can hold steadily, then AUDUSD is expected to keep up its bullish momentum, upsurging toward the next resistance at 0.7277. At the moment, the current state can be viewed as an adjustment for the overbought RSI. Bullish momentum remains and is supported by a strong positive MACD.

Resistance: 0.7277

Support: 0.7227, 0.7170, 0.7116

GBPUSD ( 4- Hour Chart)

GBPUSD seems to have gone into a consolidation phase amid thin holiday trading. From the technical aspect, GBPUSD is capped by the current resistance at 1.3425. The 4- hour outlook is bullish as it is trading steadily above the 20 and 50 SMAs, suggesting that bulls are taking control at the time of writing. However, the bulls seem to have temporarily paused at the resistance as the RSI has reached overbought territory, suggesting a pullback. The price action is expected to fall within the range from 1.3425- 1.3324 before the holiday ends.

Resistance: 1.3425, 1.3506, 1.3587

Support: 1.3324, 1.3163

BTCUSD (Daily Chart)

Bitcoin climbed above 50000, the highest level in more than two weeks, driven by wider positive sentiment in the markets. From a technical perspective, in the near- term, Bitcoin has finally risen above the midline of Bollinger Band, suggesting a reverse from bearish to bullish. At the same time, the RSI is still far away from the overbought territory, indicating that there is room for Bitcoin to extend further north. However, in the bigger picture, Bitcoin has not yet become upside as it has not climbed above the ascending trendline. On the upside, if Bitcoin can stand above 55103, then it will re-confirm its positive stance.

Resistance: 55103, 58000, 68991

Support: 46510, 39566