Forex Today: End Of Year Stock Rally Continues -

Forex Today: End Of Year Stock Rally Continues

Dec 28, 2023Jeremy ParkinsonFinance0

The year-end risk-on rally continues to strongly drive markets, with most stock markets performing well and some major indices such as the Nasdaq 100 Index making new record highs. The benchmark US S&P 500 Index is also very close to a new all-time high price. Markets are firmly in risk-on mode making this a great time for traders to be in the market if they are respecting long-term trends. The bullish environment is caused partly by a weaker US Dollar and partly by a more dovish expectation of the Fed’s rate cuts in 2024.

In the Forex market, every single major currency has reached new long-term highs against the US Dollar, with the US Dollar Index continuing to fall to new 5-month lows. The EUR/USD stands out as the most historically reliable trending currency pair, so trend traders will be very interested in being long here following the bullish breakout beyond the big round number at $1.1000. USD/CHF also stands out as its price is now approaching the multi-year low price last seen in the SNB crash of 2015. There is no doubt the US Dollar is strongly moving the Forex market, making it an excellent time to trade.

Since the Tokyo open earlier today, the Japanese Yen has been the strongest major currency while the US Dollar has been the weakest, putting the USD/JPY currency pair in focus. The Yen’s relative strength is due partly to comments from the Bank of Japan Governor Kazuo Ueda hinting at the first rate hike since 2007 will be made in the spring while not ruling the option of a hike in January.

A few commodities are also reaching notable highs against the US Dollar and in general:

Gold made its highest ever New York close yesterday and is not far from its record high made a few weeks ago.

Iron Ore futures are trading at a new 10-month high price.

Cocoa futures are also very well established within a strong long-term bullish trend.

Crude Oil has stopped rising after reaching a new 2-week high, due the USA is stating that it will put together a military operation to fully reopen the Red Sea to shipping traffic.

Bitcoin is continuing to fail whenever it tests highs, making price action suggestive of at least a medium-term bearish reversal.

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