Charting the markets: 12/1/24
FTSE 100, CAC 40 and Russell 2000 remain under pressure following higher US inflation print, EUR/GBP slips while GBP/USD rises post UK GDP with USD/CNH staying side-lined as gold, oil and natural gas prices move higher.
(AI Video Summary)
Indices analysis
In this video, Axel Rudolph talks about different economic indicators and how they affect various markets. He starts off by discussing the UK GDP data, which showed a slight improvement, but a negative trend over the past three months indicates that the country might be heading towards a recession. The FTSE 100, a stock index in the UK, has recovered from previous losses, but there are signs that it could start falling again. However, if it breaks Thursday's high, it could lead to more gains.
Moving on to the French CAC 40, another stock index, it has been trading within a certain range and is trying to break through a resistance level. If it succeeds, it could mean more positive movement in the week ahead. In the US, the Russell 2000, which represents small-cap companies, is also trading sideways. For it to continue the upward trend, it needs to breakout above Thursday's high.
Forex analysis
Rudolph mentions that the euro has gotten weaker compared to the British pound, while the British pound has gotten stronger against the US dollar. This is because there's less expectation of a rate cut by the US Federal Reserve. As long as the British pound doesn't drop to recent lows, the upward trend remains intact.
Looking at the US dollar against the Chinese yuan, it has been trading sideways despite the weaker Chinese economic data. Rudolph believes that unless it goes above a certain level, the sideways movement will continue. Crude oil prices have gone up due to military action in the Gulf, which is supporting shipping lanes. If certain resistance levels are surpassed, there could be more room for growth.
Commodities analysis
Gold has tried to bounce back, but it's facing tough resistance around $2,070 to $2,088 per ounce. However, if it stays above recent lows, there's a higher chance of further upward movement. Finally, natural gas prices have increased due to colder weather, causing higher demand in Europe and the US. But when warmer weather returns, there could be a decline in prices.
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