Markets were calm last week with no major surprises. Fed Chair Powell did not discuss the economy or monetary policy, so traders didn’t get any new signals on inflation or interest rates. Even so, equities continued their recovery as risk appetite improved, although trading volumes stayed light.
U.S. data was slightly positive. The ISM Manufacturing PMI beat expectations, consumer sentiment improved, and the Core PCE Price Index was close to forecasts, showing inflation is easing. Talks to end the war in Ukraine continued but had little effect on markets.
The U.S. dollar weakened as investors expect the Federal Reserve to cut interest rates this week. In Japan, the 10-year bond yield continued to rise, which the market is watching carefully, though it has not caused major issues yet. Bitcoin stayed under pressure, and gold remained quiet.
Markets This Week
U.S. Stocks
The recovery in the Dow continued last week, with no negative news to disrupt the recent buying ahead of this week’s Federal Reserve meeting. The 10-day moving average is pointing higher, and the uptrend is expected to continue unless the Fed surprises the market with a statement that lowers expectations for interest rate cuts in 2026. Resistance levels are at 48,000, 48,500, and 49,000, while support is seen at 47,000, 46,500, 46,000, and 45,000.
Japanese Stocks
Japanese stocks rose marginally last week, following the gains in U.S. markets. However, the advance was limited as expectations for a Bank of Japan interest rate hike increased after comments from Governor Kazuo Ueda. The Nikkei is likely to continue trading sideways around the 50,000円 level, offering range-trading opportunities, with slightly more downside risk if the yen continues to strengthen. Resistance is at 51,000円, 51,500円, and 52,000円, while support is at 49,000円, 48,000円, and 47,000円.
USD/JPY
The yen strengthened last week, continuing to reverse some of the gains seen since Takaichi became Prime Minister, as expectations for a Japanese interest rate hike next week increased. The market is finding support ahead of 154, so some buying may return this week, though there is downside risk if the Federal Reserve surprises markets by signaling faster-than-expected interest rate cuts for 2026. Resistance is at 156, 157, and 158, while support is at 154, 153, and 152.
Gold
Gold remained strong, supported by expectations of lower U.S. interest rates and continued safe-haven demand. Resistance at the upper Bollinger Band limited gains as traders waited for the Federal Reserve meeting. The metal is finding support at the 10-day moving average and looks likely to continue higher in the current environment. Resistance is at $4,250, $4,350, and $4,380, while support is at $4,150, $4,100, and $4,050.
Crude Oil
Hopes that lower U.S. interest rates will support demand, along with uncertainty around the Ukraine–Russia conflict, helped WTI move higher and push back above $60. The recent downward trend has now been broken, so a range-trading approach between $58 and $62 looks more suitable this week. Resistance remains at $65, $66.50, $70, and $75, while support is at $55 and $50.
Bitcoin
Bitcoin traded sideways last week as the market showed diverging views on its long-term outlook after the drop from record highs back below $100,000. The 10-day moving average is now pointing sideways, so a range-trading strategy remains the best approach in the short term. Resistance is at $95,000 and $100,000, while support is at $85,000, $80,000, and $75,000.
This Week’s Focus
- Monday: Japan GDP, China Trade Balance, U.S Factory Orders
- Tuesday: Australia RBA Interest Rate Decision, Japan BOJ Gov Ueda Speaks
- Wednesday: U.S. Fed Interest Rate Decision
- Thursday: Australia Unemployment Rate, U.S. Trade Balance
- Friday: U.K. GDP
The focus this week will be the U.S. Federal Reserve’s interest rate decision, where the market expects a 0.25% rate cut. The statement that follows will be especially important, as traders look for clues on the timing of further cuts in 2026 and how the Fed views the economy and inflation trends. Apart from the Fed meeting, there are few major data releases, and the market is gradually shifting its attention toward the start of the holiday season.
