As the financial landscape is shaped by various macroeconomic factors, trading activities were subdued on December 26 due to the Christmas holiday in both Europe and the United StatesDespite the quiet market, certain key economic indicators required the attention of insightful investorsNotably, the initial jobless claims report in the United States was anticipated, following previous data suggesting that the number of claims was entering a period of volatility, hinting at significant fluctuations aheadMoreover, the geopolitical atmosphere remained highly complex and tense, contributing to market uncertainties.

In the financial markets, the US dollar exhibited resilience on Tuesday, positioning itself close to two-year highs and reflecting a cumulative increase of over 7% since SeptemberThis upswing is attributed to optimistic US economic growth forecasts and inflation rates that have widened interest rate differentials

Caution exhibited by the Federal Reserve regarding rate cuts has bolstered US Treasury yields to a seven-month peak, diminishing the allure of goldThe trajectory of gold prices seems precarious if both the dollar and US Treasury yields maintain their strengthFurthermore, while trading resumed in US markets, many European nations remained closed, limiting trading activities and participation.

The dollar index displayed an upward trend on Tuesday, reaching a high of 108.276 and a low of 108.014 before closing at 108.135. During the day, the dollar exhibited some price volatility, with morning trading indicating a surge followed by a sustained range-up movement throughout the session that concluded with a bullish candlestickAnalyzing the weekly charts, the 105.10 level appears to serve as a critical pivot point, weeding out bullish and bearish sentimentsHolding above this level suggests a prevailing bullish outlook

On the daily charts, the key level of 107.20 highlights a delineation between momentum trendsCurrent prices are situated above this support level on both the weekly and daily frames, leaning towards a bullish sentiment for the momentIn the short term, the price is anticipated to oscillate within the 107.55-108.50 range, with 108 serving as a significant pivot pointA bullish stance prevails above 108, but any fall below this threshold could trigger a broader corrective actionWith trading remaining light during the holidays, more clarity may emerge once the festive period concludes.

In regards to the dollar index movement, it is currently trending within the 107.55-108.50 bracket with 108 being a substantial threshold.

Meanwhile, the gold market showed signs of fluctuating upward movement throughout the day, with prices peaking at 2621.33 and dipping to 2609.95 before closing at 2616.57. The early trading session demonstrated a sustained increase in prices, yet the European trading hours introduced some downward pressure that halted the upward momentum around the 2608 level

Following a period of consolidation, the price recovered overnight, concluding with a slight bullish candlestickGiven the ongoing struggle to break above the weekly resistance level of 2664 and the daily resistance of 2642, the overall market sentiment remains bearishIt is vital to monitor the monthly closures to assess if negative momentum stretches further; a bearish monthly close could bring about continued downward pressureIn the near term, traders should keep an eye on the 2608 support levelAny price movements within this vicinity should be treated with caution, anticipating potential upwards moves to re-evaluate resistance zones.

Short-term strategies for trading gold suggest holding positions in the 2618-2619 range while ensuring a stop-loss of $10, with targets aimed at 2632-2642. Conversely, for the 2642-2643 range, short positions can be taken with the same stop-loss of $10 and anticipated targets around 2630, 2620, and 2610.

Turning our focus to the Euro-Dollar exchange rate, trading on Tuesday revealed a downward trend characterized by price fluctuations

alefox

The pair reached a low of 1.0383 and a high of 1.0409, before ultimately closing at 1.0395. Throughout the day, the early trading period showed a definitive downward pressure that continued to resist upward price movements near the key four-hour resistance level of 1.0410, ultimately closing the day with a bearish candlestick patternTechnical analysis indicates that the Euro-Dollar pair remains under the influence of significant weekly resistance at 1.0690 and daily resistance at 1.0460. This overall bearish momentum suggests a lack of conviction for upward movements, whether in mid-term or short-term trading.

From a short-term perspective, the four-hour chart suggests a stagnation around Tuesday's high, with recent trading confined to the range of 1.0340 to 1.0460. Unless the pair breaks through this range, a trading strategy focused on range-bound activity appears prudent