Weekly Market Analysis: 14 - 18 December 2020

Weekly market analysis 14 - 18 December 2020 will discuss things that can affect the market during the week such as, the US Dollar currency weakened in the Asian session early this week, the cause of which is that the United States Federal Reserve is predicted to increase the number of purchases of long-term Treasurys to dampen the increase in yields when it lowered its policy on Friday last week. The greenback is also under pressure due to investor expectations that the US Central Bank will again maintain its benchmark interest rate at the lowest level for quite a long time at their last meeting agenda at the end of 2020. Increasing hopes that the UK & European Union (EU) will soon reach a post-Brexit trade agreement. This hope arose after both parties agreed to extend the negotiation talks even though they had previously determined a time limited, namely next week. Negotiators for both parties will "work extra" in the next few days to try to reach an agreement before the deadline at the end of this year to prevent a bad separation between the UK & EU, even though it has passed the previously determined deadline. Some market players believe that the pound is more vulnerable to selling than the euro, predicting that the pound's rally will not last long. Negotiations between the two sides have yet to narrow their differences on a number of issues, including fishing rights. But there is a risk that they will not reach an agreement before the deadline.

1. Important Data/High Impact on Weekly Market Analysis 14 - 18 December 2020

1.1 French Flash Service PMI (EUR)

Wednesday, 15:15 WIB. This data shows the level of the index based on the level of purchasing managers surveyed at the industry level in the services sector in the country of France. A reading above 50.0 indicates industry expansion, while a reading below 50.0 indicates contraction. There are two versions of this report released about a week apart - Flash and Final. The Flash release, first reported in March 2008, is the earliest and tends to have the biggest impact.

1.2 German Flash Manufacturing PMI & German Final Service PMI (EUR)

Wednesday, 15:30 WIB. This data shows the level of the index based on the level of purchasing managers surveyed at the level of the German manufacturing industry. A reading above 50.0 indicates industrial expansion, while a reading below 50.0 indicates contraction. There are 2 versions of this report released about a week apart - Flash and Final. The Flash release, first reported in March 2008, is the earliest and tends to have the greatest impact on the market.

1.3 Core Retail Sales & Retail Sales (USD)

Wednesday, 8:30 p.m. WIB. This data reflects the change in the value of total retail sales, excluding auto sales. Although auto sales account for about 20% of total retail sales, they tend to be highly volatile and distort underlying trends. Therefore, the core data is considered a better measure of spending trends. Retail Sales is the change in the value of total retail sales. This data is released monthly, about 13 days after the end of the month. It is the earliest and broadest look at important consumer spending data.

1.4 Flash Manufacturing PMI (USD)

Wednesday, 21:45 WIB. This data depicts the level of the index based on the level of managers surveyed at the manufacturing industry level in America. If the data is released above 50.0 indicates industrial expansion, but if the release is below 50.0 indicates contraction. There are 2 versions of this report released about a week - Flash and Final. The Flash release, first reported in May 2012, is the earliest and tends to have the biggest impact.

1.5 FOMC Economic Projections & FOMC Statment (USD)

Thursday, 02:00 WIB. This data is of concern to market players, because when the US Central Bank meets and issues its policies it will have a major impact on the market in all pairs. For Economic Projections This report includes the FOMC's projections for inflation and economic growth over the next 2 years and, more importantly, details of each FOMC member's interest rate forecasts. Usually this FOMC meeting only changes the statement slightly in each release. These changes are the focus of market players.

1.6 FOMC Press Conference (USD)

Thursday, 2:30 p.m. WIB. The press conference lasts about 1 hour and consists of 2 sessions. The first session is a prepared statement to be read, the second session is open to questions from the press. The questions often lead to unscripted answers that create great market volatility. The press conference is webcast live on the Fed's Ustream channel in real-time.

1.7 GDP q/q (NZD)

Thursday, 04:45 WIB. This data is the state revenue and expenditure, where the change in value is adjusted for inflation of all goods and services produced by a country's economy. This data is released every 3 months, approximately 75 days after the quarter ends.

1.8 Employment Change & Unemploymnet Rate (AUD)

Thursday, 07:30 WIB. This data is a picture of the number of employment levels and unemployment levels in each month. Released approximately 15 days after the end of the month. Why is this data so important, because job creation is an important leading indicator of people's spending power, which is the majority of all economic activity.

1.9 SNB Monetary Policy Assessment & SNB Press Conference (CHF)

Thursday, 15:30 WIB. This data is the main tool used by the Swiss National Bank (SNB) Governing Board to inform investors about monetary policy. It contains the results of their decisions on interest rates and comments on the economic conditions that influenced their decisions. Most importantly, it projects the economic outlook and offers clues about the outcomes of future interest rate decisions.

1.10 MPC Official Bank Rate Votes, Monetary Policy Summary & Official Bank Rate (GBP)

Thursday, 19:00 WIB. The votes here are reported in the format 'X-X-X' - the first number is how many members of the Monetary Policy Committee (MPC) voted to raise rates, the second number is how many voted to lower rates, and the third is how many voted to hold rates. The BOE MPC minutes contain the interest rate vote for each MPC member during the last meeting. The breakdown of the votes provides insight into which members changed their stance on interest rates and how close the committee is to enacting a future interest rate change.

1.11 Monetary Policy Statement (JPY)

Friday, Tentative (can be any time/usually before 12:00 WIB). Scheduled 8 times a year. Releases intentionally do not provide exact time of release, said as 'Tentative' until statement is issued. First released in July 2008. Initially the frequency of releases was around 14 times per year to 8 times per year starting in January 2016. This is one of the main tools used by the BOJ to provide investors with information about monetary policy. It contains the results of their decisions on asset purchases and comments on economic conditions that influenced their decisions. Most importantly, it projects the economic outlook and offers clues about future voting outcomes.

2. Technical Review According to Weekly Market Analysis 14 - 18 December 2020

2.1 EUR/USD

2.2 USDCHF

2.3 GBPUSD

2.4 USDJPY

2.5 Gold

2.6 AUDUSD

2.7 Oil

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