The focus of the week was the FOMC meeting. The U.S. Federal Reserve cut interest rates for the third meeting in a row, lowering the policy rate to 3.50%–3.75%. After the decision, Fed Chair Powell sounded more open to further rate cuts than markets expected. This supported U.S. stocks and gold and led to continued selling of the U.S. dollar.
In Japan, GDP data came in weaker than expected, highlighting slowing growth. However, comments from Bank of Japan Governor Ueda shifted market expectations. He said inflation is moving closer to the BOJ’s target, increasing expectations of an interest rate hike at this week’s BOJ meeting. At the same time, the 10-year Japanese government bond yield rose to around 1.95%, an important level for markets.
Toward the end of the week, technology stocks came under pressure, as concerns returned about high valuations in AI-related companies. While overall market sentiment remains positive, these worries could continue to create volatility in the tech sector.
Markets This Week
U.S. Stocks
The Dow dipped early in the week but rebounded strongly after the FOMC statement signaled a more accommodative stance toward further interest rate cuts in 2026. This pushed the index to new record highs. While technology stocks remain under pressure, the Dow continues to show strength, with the 10-day moving average trending higher and acting as support. As long as this uptrend remains intact, buying pullbacks remains the preferred strategy. Resistance is seen at 48,500 and 49,000, while support is located at 48,000, 47,500, 47,000, 46,500, and 46,000.
Japanese Stocks
The Nikkei 225 traded sideways last week as weak domestic economic data and rising expectations for an interest rate hike offset the positive impact of higher U.S. stock prices. The upcoming rate hike is largely priced in and is unlikely to trigger a sharp sell-off as seen in the past. However, with domestic growth under pressure and long-term Japanese interest rates continuing to rise, the risk of a move lower appears higher in the near term. 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
USD/JPY briefly moved higher on weak Japanese economic data ahead of the FOMC meeting, but finished the week close to unchanged. Fed Chair Powell’s comments increased expectations for further interest rate cuts, putting pressure on the U.S. dollar. Range trading is likely ahead of the BOJ meeting, which is the main focus of the week, offering near-term trading opportunities. Resistance is at 156, 157, and 158, while support is at 154, 153, and 152.
Gold
Gold remained well supported after Fed Chair Powell’s statement weakened the U.S. dollar and reinforced expectations for further U.S. interest rate cuts. Prices paused just below record highs from October as the market became slightly overbought in the short term. Despite this, the broader uptrend remains strong, and buying pullbacks toward the 10-day moving average continues to be the preferred strategy as gold targets new highs. Resistance is at $4,300, $4,350, $4,380, and $4,400, while support is seen at $4,200, $4,150, and $4,100.
Crude Oil
WTI struggled to hold above $60 last week as concerns over U.S. demand and rising inventories encouraged selling, despite the Federal Reserve’s interest rate cut. With these supply-demand pressures still in place, the market is likely to remain under pressure into 2025, and a retest of the yearly lows appears increasingly likely. Resistance is seen at $60, $65, $66.50, $70, and $75, while support remains at $55 and $50.
Bitcoin
Bitcoin tested resistance near $95,000, supported by expectations of lower U.S. interest rates. However, selling in technology stocks late in the week put pressure on prices, leaving Bitcoin to close near the middle of its recent range. With buyers cautious, range trading between $85,000 and $95,000 remains the preferred short-term strategy. Resistance is at $95,000 and $100,000, while support is at $85,000, $80,000, and $75,000.
This Weeks Focus Image
This Week’s Focus
- Monday: Japan Tanaka Index, China Industrial Production, E.U. Industrial Production, NY Empire State Manufacturing Index
- Tuesday: Japan au Jibun Bank Services PMI, U.K. Unemployment Rate, E.U. HCOB Eurozone Manufacturing PMI, U.K. S&P Global Manufacturing PMI, U.S. Non Farm Payroll, Retail Sales and S&P Global Manufacturing PMI
- Wednesday: Japan Trade Balance, U.K. CPI, E.U. CPI
- Thursday: U.K. BoE Interest Rate Decision, E.U. ECB Interest Rate Decision, U.S. CPI and Philadelphia Fed Manufacturing Index
- Friday: Japan National CPI and BoJ Interest Rate Decision, U.K. Retail Sales, U.S. Existing Home Sales and Michigan Consumer Sentiment
The final full trading week before the holiday season is set to be busy, with several major central bank meetings. The European Central Bank is expected to leave interest rates unchanged, while the Bank of England is expected to cut rates, and the Bank of Japan is widely expected to raise rates. In the U.S., delayed employment data will be released midweek, alongside retail sales and inflation data, which could influence near-term market sentiment. Inflation data from Europe and the UK will also be closely watched, as markets look for signals on interest rate expectations into 2026.
