On December 24th, the US dollar index slightly declined, and improved risk appetite weighed on the US dollar and safe haven currencies; After years of negotiations between the UK and the European Union to finally reach a trade agreement, the pound took most of its gains against the US dollar in afternoon trading in New York as investors had digested the Brexit agreement and profited. Spot gold rose by over $10 at one point, reaching a daily high of $1883.56 per ounce, as investors remained optimistic about the US stimulus plan. Driven by buying in the late trading session, oil prices and the stock market rose together.

01

gold

On Wednesday (December 23), COMEX February gold futures settled 0.4% higher at $1878.10 per ounce. The weakening of the US dollar helped stop the previous trend of three consecutive trading days of decline in gold prices. After a series of economic data was announced ahead of schedule due to holidays, the US dollar weakened, providing support for gold prices. At the close of the gold futures market, the US dollar index fell 0.3%.

Given factors such as the government's expected aggressive spending plans, ultra-low bond yields, and high stock market values, gold bulls remain optimistic about the outlook for gold prices in 2021. Overall, as long as the real interest rate remains negative, which is likely to continue throughout next year, we remain optimistic about the long-term prospects of gold, said Hussein Sayed, Chief Market Strategist at FXTM.

Christmas Eve US gold futures will close early at 2:45 am on the 25th.

On the daily line, the three tracks of the Bollinger Belt tend to flatten out, with the MA5 moving average and MA10 moving average forks easing and closing. The K-line intersects between the upper and middle tracks of the Bollinger Belt, and the MACD fast and slow line forks gradually crossing the zero axis. The red kinetic energy slightly decreases, while the KDJ three tracks close with a dead fork. The daily gold performance is relatively high, and the kinetic energy is somewhat weakened; On the 4-hour chart, the Bollinger Belt's three tracks move slightly downwards, with the MA5 moving average and MA10 moving average crossing gold. The K-line intersects near the Bollinger Mid track, and the dead cross above the MACD Fast Slow Line's 0 axis closes significantly. The gold short line is expected to further rise.

Overall, intraday operations have mostly fallen lower. The initial resistance above is around 1882, and the further resistance is around 1890; The initial support below is at 1875, and further support is at 1865.

02

crude oil

On Wednesday (December 23), WTI February crude oil futures closed up $1.10, or 2.34%, at $48.12 per barrel; Brent February crude oil futures closed up $1.12, or 2.23%, at $51.20 per barrel. The decline of US crude oil inventory injected optimism into the market that is suffering from the aggravating impact of the COVID-19 epidemic.

The US stock market rose as investors shrugged off the latest twists and turns surrounding the US pandemic rescue plan, and the UK and EU reached a framework for a post Brexit trade agreement.

The US government report shows that US crude oil inventories have dropped to their lowest level since the end of November, and exports have increased for the second consecutive week. Rebecca Babin, a senior stock trader at CIBC Private Wealth Management, said that the sentiment in the crude oil market has shifted from selling on highs to buying on dips. The trend of the US dollar and the shift in market sentiment towards buying risky assets remain the main drivers of trading behavior.

Futures will close early at 2:45 am on the 25th.

Looking at the US crude oil market online, the Bollinger Belt closed up on three tracks, while the MA5 moving average and MA10 moving average closed at a golden cross. The K-line traded near the MA5 moving average between the Bollinger mid and upper tracks, and the dead cross above the MACD fast and slow line 0 axis eased downward. The overall performance of the daily market was relatively high, and the upward movement could be weakened; On the 4-hour chart, the Bollinger Belt's three tracks gradually closed down, the MA5/MA10 moving average gold cross went up, the K-line was traded between the Bollinger's middle and upper tracks, the MACD fast slow line's gold cross went up below the 0 axis, and the KDJ three track gold cross went up. The overall performance of oil prices in the short term was relatively high.

Overall, in short-term operations, the main trend is to fall back much lower, with initial resistance above around 48.5 and further resistance at 49.5; The initial support below is around 47.5, and further support is at 46.0.

03

American Finger

The US dollar index fell 0.04% to 90.32; This week, the US dollar index rose 0.44%, marking its largest weekly gain since mid November. The currency market also seems to have shrugged off criticism from US President Trump of the fiscal rescue plan approved by Congress earlier, which could lead to a stalemate in the bill. Republicans and Democrats in the US House of Representatives on Thursday blocked efforts to revise the $2.3 trillion COVID-19 aid measure and the government spending package, which raised doubts about the future of the bill. President Trump had previously requested extensive amendments to the bill.

04

Pound beauty

On Thursday, the UK finally reached a trade agreement with the European Union. Seven days later, the UK will withdraw from one of the world's largest trading bodies, marking the most significant global transformation since the fall of the British Empire. The pound briefly rose to $1.3619 against the US dollar, rising 0.50% in late trading to $1.3560. Kristen Macleod, the joint head of global foreign exchange sales at Barclays, said that the news "encountered profit taking in sterling as the market generally reduced risk positions, which is not surprising as the Christmas holiday approaches. Andreas Steno Larsen, Chief Global Foreign Exchange and Interest Rate Strategist at Nordea, said that to our current knowledge, this trade agreement is only sufficient to avoid a cliff situation and prevent goods from queuing up at the border, but it is not a broad-based trade agreement that includes services. Therefore, this is a fair situation for the UK, but it may also be the case, which is why the pound did not truly celebrate the agreement.

05

other

The US dollar weakened against currencies with higher risk appetite, with the Australian dollar rising 0.21% to 0.7591; The New Zealand dollar rose 0.13% to 0.7106 against the US dollar.

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