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USDJPY keeps firm tone in holiday-thinned trading on Thursday and pressuring last Friday’s peak at 157.92 (the highest since mid-July).

The pair is on track for the fourth consecutive weekly gain and for over 5% monthly advance in December.

Hawkish signals from Fed on expectations that inflation will remain elevated for some time and continue to obstruct plans for rate cuts, as well as wide gap between Fed and BoJ monetary policies, continue to support the pair.

Near term price action has established above broken Fibo barrier at 156.67 (76.4% retracement of 161.98/139.57 correction) which now offers solid support, followed by rising daily Tenkan-sen (155.19) and key supports at 153.62/40 (daily cloud top / daily Kijun-sen / broken Fibo 61.8%).

Strong bullish momentum and multiple golden crosses on daily chart support bullish near-term outlook, with thick rising daily Ichimoku cloud underpinning the action.

However, initial warning from overbought conditions should be considered, while traders continue to closely watch the action from Bank of Japan after they have sent a signal in a shape of verbal intervention, with markets expect that the authorities may act somewhere above 160 mark, similar to intervention in July.

Res: 155.95; 156.95; 157.61; 158.00.
Sup: 157.00; 156.55; 155.88; 155.19.

Forbes analysts predict 2025 will be a pivotal year for Bitcoin, solidifying its position as a global financial asset. Their key forecasts include:

→ Regulatory Shifts: A change in SEC policies is expected to foster growth in the cryptocurrency sector, driving the cryptocurrency market capitalisation from approximately $3.3 trillion to $8 trillion.

→ Strategic Reserves: One of the leading G7 or BRICS nations will adopt Bitcoin as a strategic reserve asset. Analysts likely hint at the United States, where Trump is reportedly considering the creation of a Bitcoin strategic reserve.

→ DeFi Expansion: Bitcoin-based DeFi is expected to flourish, supported by second-layer networks like Stacks. This could expand the total value locked (TVL) in the DeFi ecosystem to $24 billion.

→ New Crypto Funds: After the successful launch of Bitcoin ETFs, more funds may emerge, including those centered on staking.

→ Corporate Adoption: Major companies like Apple or Google, part of the Magnificent Seven, might add Bitcoin to their reserves as accounting standards improve.

While Forbes analysts refrain from making direct price predictions for 2025, their optimistic perspective suggests BTC/USD is likely to sustain its long-term growth trajectory.
Short-Еerm Сoncerns

In the short term, Bitcoin faces challenges. According to the BTC/USD chart today, the price dropped below $96,000 after failing to stay above the key psychological level of $100,000.

This decline reinforces bearish momentum, as the price has moved into the lower half of the ascending channel formed following Trump’s election victory. Bulls are struggling to regain control and push the price back into the upper half of this channel.

If the trend persists, BTC/USD price could test the lower boundary of the blue channel in 2024, increasing the risk of a bearish breakout.

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EURJPY, Daily

In the Daily timeframe, EURJPY broke the trend line after a short-term decline and is consolidating at an important resistance. On the Alligator, the lips crossed the jaw, indicating the possibility of further upside.

• We can consider buying EURJPY on consolidation above 163.500 with a target to 166.500;

US initial jobless claims fell -1k to 219k in the week ending December 21, slightly higher than expectation of 218k. Four-week moving average of initial claims rose 1k to 227k.

Continuing claims rose 46k to 1910k in the week ending December 14, highest since November 3, 2021. Four-week moving average of continuing claims rose 3k to 1881k.

Full US jobless claims release here.

Key Highlights

• Ethereum found support near $3,100 and corrected some losses.
• ETH traded below a key bullish trend line with support at $3,680 on the daily chart.
• Bitcoin price must settle above $100,000 to start a fresh increase.
• XRP could gain bullish momentum if it clears the $2.50 resistance.

Ethereum Technical Analysis

Ethereum declined heavily from $4,100 like Bitcoin. ETH traded below the $3,500 and $3,350 support levels before the bulls appeared near $3,100.

Looking at the daily chart, the price remained well above the 100-day simple moving average (red) and the 200-day simple moving average (green). A low was formed at $3,092 and the price recently started a recovery wave.

There was a move above the 23.6% Fib retracement level of the downward move from the $4,105 swing high to the $3,092 low. Immediate resistance is near the $3,600 level.

The 50% Fib retracement level of the downward move from the $4,105 swing high to the $3,092 low is also near $3,600. The next major resistance is near the $3,720 level. A daily close above the $3,720 resistance zone could start another steady increase.

In the stated case, the price may perhaps rise toward the $3,880 level. The next stop for the bulls may perhaps be to $4,000 or a new all-time high.

On the downside, Ethereum might find support near the $3,220 level. The next major support is $3,150, below which the price could slide toward $3,100. Any more losses might call for a move toward the $3,000 level.

Looking at Bitcoin, there was a steady increase above the $95,000 level, and the price might continue to rise toward the $105,000 level.

Economic Releases

• US Initial Jobless Claims - Forecast 218K, versus 220K previous.

• GBPUSD finds strong support in 1.2480 region
• But upside momentum struggles to take off

GBPUSD has managed to hold above the 1.2500 mark this week following last week’s post-Fed tumble that pulled the pair to the lowest since May, hitting 1.2474. The slide reinforced the medium-term downtrend line as a strong resistance wall, but now the bulls face additional barriers.

Any recovery attempt would first need to overcome the 61.8% Fibonacci retracement of the November-December upleg at 1.2610 and then battle the 20-day simple moving average (SMA) at 1.2663 before cracking the descending trendline.

However, a successful break above it would strengthen the short-term bullish bias, while switching the bearish outlook in the medium term to a more neutral one. It would also clear the path towards the December peak of 1.2810, which is where the 200-day SMA is currently converging.

In the bigger picture, the bulls would ideally need to aim for the 100-day SMA at 1.2943 as well for the long-term uptrend to stand any chance of being restored.

But given the weak positive momentum, further downside cannot be ruled out in the near term. The RSI is only slightly pointing upwards and remains below 50, while the stochastic oscillator has some way to go before reaching neutral levels.

Should the bears retake control, the 1.2480 support area is likely to be tested again before attention turns to the 1.2400 handle that lies slightly below the 123.6% Fibonacci extension.

To sum up, there is a greater possibility of GBPUSD resuming its medium-term downtrend than reviving its long-term uptrend over the next few sessions.

Forex trading is slowing down as the holidays approach, offering a pause after significant movements driven by various news events, including central bank decisions.

Notably, NZD/USD reached its lowest level since October 2022 at the end of last week.

The decline in NZD/USD has been influenced by two main factors:

1. The dollar gained momentum following the Federal Reserve's decision to lower the interest rate by 0.25% and its forward guidance for 2025.

2. According to Reuters:

→ New Zealand's economy contracted much more sharply than expected in the second and third quarters.

→ Market participants anticipate that the Reserve Bank of New Zealand may lower interest rates by 0.5% in February.

Technical analysis of the NZD/USD 4-hour chart depicts a bearish outlook:

• The 0.58 level, which served as support in November, turned into resistance in December.
• The price is currently hovering near the lower boundary of a descending channel that has been in place since October.
• The RSI indicator signals that the market is approaching oversold conditions.

While bears may attempt to extend the downtrend by pushing the price below last week’s low, this could create a divergence pattern on the RSI indicator, offering hope for a potential bullish reversal.

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The Australian dollar has posted slight losses on Tuesday. In the European session, AUD/USD is trading at 0.6247, down 0.18% at the time of writing.

RBA minutes hint at rate cut

The Reserve Bank of Australia minutes from the December meeting were significant although they didn’t have much impact on the Australian dollar. The minutes signaled that the RBA is increasingly confident that inflation is moving sustainably towards the Bank’s target range of 2% to 3%, but it was still early to conclude that the inflation battle had been won. Board members noted that the labor market remains tight and consumption has improved, factors which support the Bank maintaining rates.

At the December meeting, the RBA held the cash rate at 4.35% for the ninth consecutive time. The rate statement said that board members were more confident that inflation was declining and did not mention the possibility of a rate hike as it had in the previous meeting.

Will this guarded optimism translate into a rate cut in February? Let’s keep in mind Governor Bullock’s comment after the meeting, in which she said that the February rate decision would be data-dependent. The RBA would like to start the New Year with a rate cut, but it has been an outlier among the major central banks which are in the midst of an easing cycle. Bullock & Co. will be willing to press the rate trigger only if inflation moves lower as expected or key economic indicators such as job growth point lower.

In the US, data published on Tuesday indicated that durable goods orders and consumer confidence declined, but the Australian dollar couldn’t take advantage. The US economy is in solid shape and that has been reflected in the broad strength of the US dollar. Since October 1, the Australian dollar has plunged 9.8% against the greenback.

AUD/USD Technical

• AUD/USD is testing support at 0.6244. Below, there is support at 0.6224
• 0.6270 and 0.6290 are the next resistance lines