The financial markets are relatively steady as the holiday shortened week starts. Nikkei was sold off deeper in early trading in reaction to the selloff in US stocks last Friday. But sentiments quickly recovered and Nikkei is trading just down -0.3% at the time of writing. WTI crude oil stays soft and is trading around 34.5 while gold is struggling in tight range below 1070. In the currency markets, major pairs and crosses are staying in Friday’s range in lackluster trading. Overall, Canadian dollar remains the weakest major currency this month as dragged down by sell-off in oil, followed by sterling. Swiss franc and euro are the strongest despite ECB easing. Meanwhile, dollar is mixed even though Fed finally lifted interest rates last week.

The markets would likely be rater quiet this week on Christmas holiday. Main focus will be US durable goods, personal income and spending, new home sales and jobless claims. UK and US will release Q3 GDP final but won’t trigger much reactions. Other data to be watched include Canada GDP and retail sales, Japan CP, New Zealand trade balance, Swiss KOF. Here are some highlights for the week:

  • Monday: German PPI; Eurozone consumer confidence
  • Tuesday: UK Gfk consumer sentiment, public sector net borrowing; German Gfk consumer sentiment; US GDP final, existing home sales, house price index
  • Wednesday: New Zealand trade balance; Swiss KOF; UK GDP final; Canada GDP, retail sales; US durable goods, personal income and spending, new home sales
  • Thursday: US jobless claims
  • Friday: Japan CPI, unemployment, household spending, housing starts

Last week’s strong rebound in dollar index suggests that pull back from 100.51 has completed at 97.19 already. Further rise is mildly in favor to 100.51 resistance. But after all, momentum is no strong enough to warrant up trend resumption yet. Thus, we’d be cautious on strong resistance from 100.39/51 to bring reversal to extend the consolidation pattern from 100.39. Break of 97.19 will target 92.61 support.

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.4869; (P) 1.4909; (R1) 1.4933; More

A temporary low is formed at 1.4864 and intraday bias is turned neutral first. Overall, near term outlook will stay bearish as long as 1.5239 resistance holds. Fall from 1.5929 is still expected to continue and below 1.4864 will target a test on 1.4565 low. Nonetheless, break of 1.5239 will indicate that fall from 1.5929 is finished and will turn near term outlook bullish.

In the bigger picture, medium term fall from 1.7190 should have completed at 1.4565. Momentum of the rebound from 1.4565 was relatively weak and the structure is somewhat. Hence, we’d treat price actions from 1.4565 as developing into a consolidation/correction pattern only. Fall from 1.7190 is viewed as resuming the longer term down trend from 2.1161 and would target 1.3503 and below later.

Economic Indicators Update

GMT Ccy Events Actual Consensus Previous Revised
4:30 JPY All Industry Activity Index M/M Oct 1.00% 0.80% -0.20%
5:00 JPY BoJ Monthly Report
7:00 EUR German PPI M/M Nov -0.20% -0.40%
7:00 EUR German PPI Y/Y Nov -2.50% -2.30%
11:00 GBP CBI Reported Sales Dec 20 7
15:00 EUR Eurozone Consumer Confidence Dec A -5.7 -5.9

This article originally appeared at Action Forex.