Should We Be Wary of the Calm Price Movements Ahead of the Year-End Market Rally?
24.12.2021
- Markets in major countries such as the U.S. and the U.K. are closed for the Christmas holiday
- No major economic indicators or statements by key figures are scheduled.
Yesterday, the three major U.S. stock indices all rose for the third consecutive day, creating a “risk-on” atmosphere characterized by rising stock prices, interest rates, and crude oil prices. Although U.S. new home sales for November, released yesterday, came in at 744,000 units—falling short of market expectations—they reached their highest level in seven months.Gold rose and traded in the $1,808 range, while the yield on the 10-year U.S. Treasury note climbed to 1.49%.
In the foreign exchange market, cross-yen pairs are generally rising; among them, GBP/JPY—which saw a particularly sharp increase—rose by about 150 pips from 152.20 to 153.71.From a technical perspective, GBP/JPY is showing momentum as it approaches the recent 4-hour high of 154.03. Since it has also firmly broken above the 200-period SMA on the daily chart, we need to carefully assess whether this will mark the start of an uptrend and lead to further gains.
Since markets in Europe and the U.S. will be closed today for the Christmas holiday, no major economic indicators are scheduled to be released, nor are any key officials expected to make statements. Furthermore, with the number of market participants expected to drop sharply, liquidity is likely to decline significantly. Rather than forcing trades, I plan to take a wait-and-see approach today to assess the market, anticipating price movements starting at the beginning of next week.
Author: Keisuke Sakurai
