Dow Jones, US Dollar, Gold, Japanese Yen, PCE, Bank of Japan

Market volatility remained the focus this past week. On Wall Street, the Dow Jones, S&P 500 and Nasdaq 100 fell about 1.8%, 2.3% and 2.9%, respectively. Things were not looking much better in Europe. The DAX 40 and FTSE 100 sank roughly 3.3% and 1.5%, respectively. In the Asia-Pacific region, the Nikkei 225 and Hang Seng Index dropped 1.7% and 2.3%, respectively.

This was despite a softer US inflation report for November. The focus remained on central banks instead. The Federal Reserve delivered a 50-basis point rate hike and continued to stress that more work needs to be done on fighting price pressures. Meanwhile, the European Central Bank surprised markets with a more aggressive hawkish tone.

The latter meant a relatively solid week for the Euro. Unsurprisingly, risk aversion meant that the sentiment-linked Australian and New Zealand Dollars underperformed. Gold ended relatively flat as a cautiously stronger US Dollar was offset by softening Treasury yields. Despite the deterioration in risk appetite, crude oil prices managed to push higher.

Economic event risk notably cools off as we approach the end of 2022. PCE core, which is the Fed’s preferred inflation gauge, will cross the wires in the week ahead. A softer outcome could underscore a less-hawkish Fed. Meanwhile, the Bank of Japan interest rate decision is due for USD/JPY. What else is in store for markets in the week ahead?

How Markets Performed – Week of 12/12

Fundamental Forecasts:

S&P 500, Nasdaq, Dow Jones Forecast for the Week Ahead – Fundamental

Bears made a noticeable re-appearance this week with a steely focus on 2023 price action, but will bears make a push into the end of the year or wait for the 2023 open?

British Pound Forecast – GBP Pummeled by BoE Rate Split and Strikes

The British Pound is under pressure going into the weekend after yesterday’s BoE rate hike indecision left traders unimpressed

Australian Dollar Outlook: US Dollar Roars Back to Life

The Australian Dollar got dusted after the US Dollar regained its ascendency amid central bankers re-iterating their hawkish stance after a series of hikes. Will AUD/USD go lower?

Dollar Outlook Still Carries Important Event Risk and Technical Pressure

Holiday trading conditions may start for the Dollar and broader markets in the coming week, but the range of important event risk may actually turn thin liquidity into charged volatility. With the debate around a pivot in fundamental and technical bearing for this benchmark, traders should keep a wary eye on this market.

Gold Price Outlook for the Week Ahead: XAU/USD Remains Bearish Biased, Where to?

While gold prices were left mostly flat last week, the fundamental landscape arguably remains bearish. This is as XAU/USD shows increasing technical signs of an impending bearish reversal.

Technical Forecasts:

Dollar Outlook Still Carries Important Event Risk and Technical Pressure

The Dollar was in something of a precarious technical position heading into the high-level event risk of last week. Now as we move into a period that typically sees a drop in liquidity through year end, the ‘majors’ like EURUSD are still unclear about their bearing.

S&P 500, Nasdaq, Dow Jones Technical Forecast for the Week Ahead

The S&P 500, Nasdaq and Dow all produced bearish engulfing formations after failed breakouts last week. Can bears push into year-end, or will that have to wait as a 2023 theme?

EUR/USD Technical Outlook: Upward Momentum Intact

Upward momentum in the Euro remains intact against the US dollar after the European Central Bank (ECB) indicated a much higher rise in rates than anticipated by markets. What is the outlook and the key levels to watch?

British Pound Technical Forecasts – GBP/USD, EUR/GBP, GBP/JPY

The British Pound has been rattled by a range of central bank policy decisions this week. What’s the outlook for Sterling next week?

— Article Body Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com

— Individual Articles Composed by DailyFX Team Members

To contact Daniel, follow him on Twitter:@ddubrovskyFX