Forex Signals Brief December 10: RBA Leaves Interest Rates Unchanged at 4.35% but Signals the Shift
Today the main forex even is behind us, after the Reserve Bank of Australia left interest rates unchanged at 4.35% again as expected.
Yesterday started with some soft inflation figures from China, with the CPI consumer inflation falling to 0.2% while the PPI producer inflation remains in a deeply negative territory. That kept the sentiment soft, with US stock markets ending the day lower while European stocks closed with mixed results, with the French CAC 40 being the big winner despite the troubles in French politics.
That was due to Chinese authorities announcing further stimulus measures to help the economy, improving the sentiment for commodity dollars immensely, which surged nearly 1 cent higher. However, markets were suspicious after the Chinese stimulus disappointed in October and risk assets retreated lower in the US session.
Today’s Market Expectations
The Reserve Bank of Australia (RBA) held its cash rate at 4.35%, signaling cautious optimism about easing inflation but acknowledging persistent uncertainties in the domestic and global economic outlook. While monetary policy remains restrictive, the board emphasized its data-driven approach and commitment to managing risks as it navigates a mixed economic environment.
In the European session, we have the monthly German Final CPI for November, which is expected to remain unchanged at -0.2%. The Italian Industrial Production for October is expected to show yet another decline, after the contraction in the last several months, highlighting the difficulties in the Eurozone economy.
Yesterday the volatility increased after the announcement from Chinese authorities for more monetary stimulus to come, while the PBOC will resume the Gold purchases. Yesterday we had eight closed trading signals, some carried from last week, seven of which being winning forex signals, with just a loser in Dow Jones.
Gold Continues the Consolidation Between MAs
Gold prices surged $40 to reach $2,676 as the People’s Bank of China (PBOC) resumed gold purchases after a hiatus, briefly breaking above the 50-day Simple Moving Average (SMA) before retreating below it by the close of trading. This marks a significant recovery following a $100 drop earlier this year when China halted purchases after gold prices surpassed $2,400/oz. With renewed demand, the PBOC is now buying gold at prices exceeding $2,600/oz, signaling robust interest.
XAU/USD – Daily Chart
AUD/USD Can’t Hold Above 0.65
The AUD/USD pair has been under bearish pressure since October, fueled by concerns over Australia’s economic slowdown. Weak Q3 GDP data indicated a slowing economy, with year-over-year growth at 0.8%, below forecasts. After breaking below the 0.65 level, the pair entered a consolidation phase but continued to decline, approaching critical support at 0.6350, the lowest point for 2024. Despite stronger-than-expected retail sales and hawkish comments from Reserve Bank of Australia Governor Michele Bullock, bearish sentiment persists.
AUD/USD – Daily Chart
Cryptocurrency Update
Bitcoin Retreats Below 100K Again
Bitcoin crossed the $100,000 mark for the first time, closing above $102,000 in early European trading. This historic moment has sparked a wave of bullish momentum, with analysts projecting ambitious price targets of $120,000, however buyers will have to keep the price above $100K for that. Former President Trump’s cryptic remark, “You’re welcome,” in response to this milestone was interpreted by many as an implied endorsement, providing a psychological boost to the market.
BTC/USD – Daily chart
Ethereum Heads for $3,500
Ethereum mirrored Bitcoin’s volatility, initially dropping below $3,000 before staging a robust recovery. It now trades above $3,500, nearing the $4,000 mark. This surge underscores the overall strength of the cryptocurrency market, with Ethereum surpassing its 50-day SMA. Rising adoption and optimism about future price increases continue to drive investor confidence, fueling Ethereum’s rally.
ETH/USD – Daily chart
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