Sample Category Title

Daily Pivots: (S1) 0.6219; (P) 0.6247; (R1) 0.6278; More...

Intraday bias in AUD/USD remains neutral for sideway trading above 0.6198. Consolidations should be relatively brief as long as 0.6336 support turned resistance holds. Break of 0.6198 will resume the fall from 0.6941 to 0.6169 long term support, and then 138.2% projection of 0.6941 to 0.6511 from 0.6687 at 0.6074. Nevertheless, firm break of 0.6336 will bring stronger rebound lengthier correction before staging another decline.

In the bigger picture, price actions from 0.6169 (2022 low) are seen as a medium term consolidation to the down trend from 0.8006. Firm break of 0.6169 support will confirm down trend resumption for 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806 next. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6588) holds.

As markets wind down for the year-end holiday period, forex trading activity turns subdued, with limited momentum across major pairs. Dollar, while maintaining its position as the strongest currency of the month, is facing challenges in decisively breaking last month’s highs against European majors. However, the greenback still made some headway against Yen and commodity currencies

This week’s economic calendar is notably lighter, with the focus shifting to central bank minutes from BoJ, BoC, and RBA, alongside a handful of key data releases from the US, Canada, and Japan.

Technically, while EUR/USD failed to break through 1.0330 support on first attempt last week, it seems not giving up yet, with the recovery capped below falling 55 4H EMA. Another fall remains in favor through 1.0330 to 61.8% projection of 1.0936 to 10330 from 1.0629 at 1.0254. However, a significant breakout below this projection is likely to occur only after the New Year.

In Asia, Nikkei closed up 1.19%. Hong Kong HSI is up 0.70%. China Shanghai SSE is down -0.50%. Singapore Strait Times is up 0.88%. Japan 10-year JGB yield rose 0.011 to 1.067.

ECB’s Lagarde: Inflation target within reach, services inflation still stubborn

In an interview with the Financial Times, ECB President Christine Lagarde expressed optimism about nearing the inflation target.

She remarked that ECB is "very close" to declaring that inflation has been "sustainably" brought back to its 2% medium-term target.

The latest inflation reading of 2.2% reflects the success of ECB’s restrictive monetary policy. However, she highlighted persistent concerns in the services sector, where inflation remains high at 3.9%, describing it as "not budging much" despite showing slight signs of decline.

On the topic of US tariff threats, Lagarde emphasized the economic risks of retaliatory trade measures, stating, "Retaliation was a bad approach." She warned that tit-for-tat trade conflicts could harm the global economy.

Natural gas prices surge on winter demand and long-term power trends

Natural gas prices climbed to a nearly two-year high, driven by immediate weather-related demand and a bullish long-term outlook for global energy consumption.

In the short term, forecasts for below-average temperatures across the northern hemisphere—including North America, Europe, China, and Japan—are expected to significantly increase daily heating demand as these regions, which account for more than two-thirds of global gas consumption, enter their peak heating season. This has bolstered sentiment, with limited downside for prices likely until well into 2025.

Beyond the seasonal factors, the long-term outlook for natural gas remains robust. Rising electricity demand as the race for artificial intelligence accelerates, is projected to grow power consumption for such facilities by 10–15% annually through 2030, potentially accounting for up to 5% of global power demand by that time.

Natural gas is expected to play a pivotal role as a baseload energy source in this transition, given its current dominance in power generation. In the US, natural gas powers approximately 40–45% of electricity production, while globally, that share is closer to 25%. However, as more countries transition from coal to gas, the share of gas in electricity generation is anticipated to increase.

Technically, the break of 3.446 resistance last week was an important sign of underlying medium term momentum. Rise from 1.570 (Feb low) is now expected to continue to 161.8% projection of 1.570 to 3.024 from 1.852 at 4.204.

Nevertheless, momentum should target to wane above 4.204, and, in particular, as it approaches 38.2% retracement of 10.03 to 1.570 at 4.80.

Minutes and deliberations from BoC, BoJ and RBA highlight a holiday week

With the global markets winding down for the holiday season, the week ahead features a much lighter economic calendar. The spotlight will fall on central bank deliberations and meeting minutes from BoJ, BoC and RBA. A handful of key economic data releases from the US, Canada, and Japan will also attract attention as the year concludes.

For BoJ, Summary of Opinions for December, due on Friday, holds more weight than Tuesday’s October minutes, as markets seek clarity on the board’s discussions regarding a potential rate hike in January. The report will also provide insights into BoJ’s perspective on two critical issues: the uncertainty surrounding wage growth in 2025 and the risks posed by US trade policies. These considerations are likely to influence the pace and direction of Japan’s policy normalization, shaping expectations for the coming months.

BoC’s December meeting marked a turning point in its monetary policy stance, with a 50bps rate cut and a clear message that further easing would no longer be automatic. Policymakers indicated that decisions would now be taken on a meeting-by-meeting basis, reflecting a shift toward caution after substantial easing since June. The minutes will be analyzed for clues about how close the BoC is to a pause, the expected pace of additional cuts, and how deep further easing might go.

Meanwhile, RBA introduced a surprising dovish pivot at its December meeting. Growing confidence in the disinflationary trend led the board to omit language suggesting openness to further tightening. However, while this shift suggests the RBA is exploring a less restrictive path, it does not necessarily mean the first rate cut is imminent. Market participants will scrutinize the meeting minutes to understand the reasoning behind this "big pivot" and gauge what data RBA considers essential before moving toward easing.

On the data front, attention will turn to US consumer confidence and durable goods orders, Canada’s monthly GDP, and Tokyo CPI from Japan.

Here are some highlights for the week:

• Monday: Germany import prices; UK Q3 GDP Final; Swiss UBC economic expectations; Canada GDP, IPPI, RMPI; US consumer confidence; BoC summary of deliberations.
• Tuesday: BoJ minutes; RBA minutes; US durable goods orders, new home sales.
• Wednesday: Japan corporate services prices.
• Thursday: Japan housing starts, US jobless claims.
• Friday: Japan BoJ summary of opinions, Tokyo CPI, industrial production, retail sales, unemployment rate; US goods trade balance.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6219; (P) 0.6247; (R1) 0.6278; More...

Intraday bias in AUD/USD remains neutral for sideway trading above 0.6198. Consolidations should be relatively brief as long as 0.6336 support turned resistance holds. Break of 0.6198 will resume the fall from 0.6941 to 0.6169 long term support, and then 138.2% projection of 0.6941 to 0.6511 from 0.6687 at 0.6074. Nevertheless, firm break of 0.6336 will bring stronger rebound lengthier correction before staging another decline.

In the bigger picture, price actions from 0.6169 (2022 low) are seen as a medium term consolidation to the down trend from 0.8006. Firm break of 0.6169 support will confirm down trend resumption for 61.8% projection of 0.8006 to 0.6169 from 0.6941 at 0.5806 next. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.6588) holds.

Natural gas prices climbed to a nearly two-year high, driven by immediate weather-related demand and a bullish long-term outlook for global energy consumption.

In the short term, forecasts for below-average temperatures across the northern hemisphere—including North America, Europe, China, and Japan—are expected to significantly increase daily heating demand as these regions, which account for more than two-thirds of global gas consumption, enter their peak heating season. This has bolstered sentiment, with limited downside for prices likely until well into 2025.

Beyond the seasonal factors, the long-term outlook for natural gas remains robust. Rising electricity demand as the race for artificial intelligence accelerates, is projected to grow power consumption for such facilities by 10–15% annually through 2030, potentially accounting for up to 5% of global power demand by that time.

Natural gas is expected to play a pivotal role as a baseload energy source in this transition, given its current dominance in power generation. In the US, natural gas powers approximately 40–45% of electricity production, while globally, that share is closer to 25%. However, as more countries transition from coal to gas, the share of gas in electricity generation is anticipated to increase.

Technically, the break of 3.446 resistance last week was an important sign of underlying medium term momentum. Rise from 1.570 (Feb low) is now expected to continue to 161.8% projection of 1.570 to 3.024 from 1.852 at 4.204.

Nevertheless, momentum should target to wane above 4.204, and, in particular, as it approaches 38.2% retracement of 10.03 to 1.570 at 4.80.

In an interview with the Financial Times, ECB President Christine Lagarde expressed optimism about nearing the inflation target.

She remarked that ECB is "very close" to declaring that inflation has been "sustainably" brought back to its 2% medium-term target.

The latest inflation reading of 2.2% reflects the success of ECB’s restrictive monetary policy. However, she highlighted persistent concerns in the services sector, where inflation remains high at 3.9%, describing it as "not budging much" despite showing slight signs of decline.

On the topic of US tariff threats, Lagarde emphasized the economic risks of retaliatory trade measures, stating, "Retaliation was a bad approach." She warned that tit-for-tat trade conflicts could harm the global economy.

Key Highlights

• EUR/USD started a recovery wave from the 1.0350 zone.
• A key bearish trend line is forming with resistance near 1.0450 on the 4-hour chart.
• GBP/USD is facing hurdles near the 1.2650 and 1.2720 levels.
• Bitcoin and Ethereum gained bearish pace and declined below key support levels.

EUR/USD Technical Analysis

The Euro traded as low as 1.0343 before it started a recovery wave against the US Dollar. EUR/USD climbed above the 1.0380 and 1.0400 resistance levels.

Looking at the 4-hour chart, the pair even cleared the 23.6% Fib retracement level of the downward move from the 1.0629 swing high to the 1.0343 low. However, the pair is still below the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour).

There is also a key bearish trend line forming with resistance near 1.0450 on the same chart. The trend line is close to the 38.2% Fib retracement level of the downward move from the 1.0629 swing high to the 1.0343 low.

On the upside, the pair could face resistance near the 1.0450 level. The next major resistance is near the 1.0475 level. A close above the 1.0475 level could set the tone for another increase.

The next major resistance could be the 1.0520 level, above which the price could climb higher toward the 1.0580 resistance. On the downside, immediate support sits near the 1.0400 level.

The next key support sits near the 1.0380 level. Any more losses could send the pair toward the 1.0350 level. Any more losses might send the pair toward the 1.0300 level.

Looking at Bitcoin, the bears took control, and they succeeded in closing the price below the key support at $100,000.

Upcoming Economic Events:

• UK GDP for Q3 2016 (Preliminary) (QoQ) - Forecast +0.1%, versus +0.1% previous.
• UK GDP for Q3 2016 (Preliminary) (YoY) - Forecast +1%, versus +1% previous.

• EURCHF falling inside minor impulse wave 5
• Likely to fall to support level 0.9250

EURCHF currency pair continues to fall inside the minor impulse wave 5, which started earlier from the pivotal resistance level 0.9430 (standing well above the upper daily Bollinger Band), which has been reversing the price from the start of October.

The downward reversal from the resistance level 0.9430 created the daily Japanese candlesticks reversal pattern Bearish Engulfing.

Given the overriding daily downtrend and the strongly bullish Swiss franc sentiment seen today, EURCHF currency pair can be expected to fall to the next support level 0.9250, low of the earlier minor correction b.

USDCHF reversed from resistance zone
• Likely to fall to support level 0.8860

USDCHF currency pair recently reversed down from the strong resistance zone located between the round resistance level 0.90000 (which has been reversing the pair from the idle of last year) and the upper weekly Bollinger Band.

The resistance level 0.90000 was further strengthened by the 38.2% Fibonacci correction of the weekly downtrend from the end of 2022.

Given the strong multiyear downtrend and the overbought weekly Stochastic, USDCHF currency pair can be expected to fall to the next support level 0.8860.

The financial markets were jolted by Fed’s hawkish rate cut last week, sending ripples across stocks, bonds, currencies, precious metals, and even cryptocurrencies. Fed’s indication of prolonged restrictive monetary policy fueled risk aversion, pushing Dollar to end the week as the strongest performer in the currency markets, supported by surging yields and elevated Fed expectations.

Despite its dominance, the greenback's gains were capped by its inability to break through key near-term resistance against Euro, suggesting that further consolidation may be in store as the markets enter year-end holiday period. Dollar could take a breather before attempting another rally in the new year.

While European majors posted losses against Dollar, they demonstrated relative resilience against commodity currencies and Yen. British Pound initially showed relative strength against Euro and Swiss Franc but fell sharply after BoE’s dovish MPC vote. The 6-3 decision to hold rates unchanged included Alan Taylor joining known doves Swati Dhingra and Dave Ramsden in advocating for a cut, dragging Sterling lower.

Swiss Franc delivered a surprising recovery, ending the week as the second-best performer, reversing losses incurred after SNB’s 50bps rate cut earlier in the month. Euro, meanwhile, underperformed both the Franc and the Pound.

In the commodity currency bloc, New Zealand Dollar was the weakest, hammered by surprisingly dep Q3 GDP contraction that sparked expectations of a deeper RBNZ easing cycle, potentially lowering rates to 3.25%, well below the estimated neutral rate of 3.75%. Australian Dollar and Canadian Dollar also ended the week among the worst performers.

Japanese Yen fared slightly better than Kiwi but still ended as the second-weakest currency. The BoJ’s decision to hold rates steady without hinting at an imminent hike in January added to the selloff. Governor Kazuo Ueda cited concerns about domestic wage growth and the impact of US trade and fiscal policies. As usual, Yen was also pressured by surging US and European yields, amplifying its weakness.

Markets Reel as Fed Signals Prolonged Restrictive Policy

The US markets were rattled last week after Fed delivered a hawkish rate cut. The hawkish outlook has set a high bar for rate cuts in 2025, leaving markets in a precarious position as they digest the implications of prolonged restrictive policy. The impact reverberated through markets, sparking sharp movements across asset classes

All three major stock indexes ended the week significantly lower despite a modest recovery on Friday. DOW experienced its longest losing streak since the 1970s, including a single-day drop of over -1100 points midweek. Nevertheless, the medium-term uptrend remains intact for now, as the pullback has not yet signal a bearish trend reversal.

In the bond market, 10-year Treasury yield surged past the 4.5% level, resuming its rally from September’s low. With momentum firmly intact, yields appear poised to reach the next target of 4.73% resistance. The rise in yields, combined with risk aversion, fueled Dollar Index's rally through 108 resistance. However, Dollar gains were capped by the resilience of EUR/USD, leaving the greenback’s underlying momentum somewhat uneven.

Fed’s 25bps rate cut to 4.25–4.50%, though anticipated, was accompanied by updated projections that signaled a slower pace of easing in 2025. The median rate projection now stands at 3.9% by the end of 2025, implying just two additional rate cuts next year, sharply higher than September’s forecast of 3.4%.

Markets, however, were even more cautious, with Fed fund futures pricing in a 53% chance of only one rate cut in 2025 to 4.00–4.25%. A pause in January is nearly certain, with odds standing at 91.4%.

One of the most significant revelations was the Fed’s upward adjustment to its longer-term rate projections, which represent its estimate of the neutral rate. The median neutral rate edged up from 2.9% to 3.0%. More importantly, the central tendency was revised higher from 2.5-3.5% to a range of 2.8–3.6%.

Projections for end-of-year rates were also raised to 3.4% for 2026 and 3.1% for 2027, both from 2.9%, suggesting that interest rates may only begin entering the neutral zone by late 2026. Notably, the outlook indicates that rates may not turn accommodative throughout the entire projection horizon, indicating Fed’s inclination to keeping monetary policy moderately restrictive for much longer than previously anticipated.

S&P 500 Pauses Below Key Fib Level, Yields and Dollar Signal Further Gains

Technically, S&P 500's steep pull back confirms short term topping at 6099.97 after hitting 61.8% projection of 4103.78 to 5669.67 from 5119.26 at 6086.98. Consolidations should be seen in the near term below 6099.97. However, outlook will stay bullish as long as 5669.67 resistance turned support holds, which is close to medium term channel support. Another rise is expected at a later stage to 100% projection at 6685.15.

However, in the larger picture, there is risk of a deeper and lengthier correction considering that S&P 500 was close to 100% projection of 2191.86 to 4818.62 from 3491.58 at 6118.34. Firm break of 5669.67 will bring deeper fall back to 55 W EMA (now at 5401.91).

10-year yield's break of 4.505 resistance confirms resumption of rise from 3.603. The development further strengthen the case that corrective pattern from 4.997 has completed with three waves down to 3.603. Further rally is expected in the near term as long as 4.361 minor support holds. Next target is 61.8% projection of 3.603 to 4.505 from 4.126 at 4.683.

In the bigger picture, the rise from 3.603 is tentatively seen as resuming whole up trend from 0.398 (2020 low). Break of 4.737 resistance should solidify this medium term bullish case. 10-year yield could then rise through 4.997 (2023 high) to 38.2% projection of 0.398 to 4.997 from 3.603 at 5.359.

Dollar Index breached 108.07 resistance but failed to close above. Nevertheless, rise from 100.15 is tentatively seen as resuming. Further rally is expected as long as 106.69 support holds. Next target is 61.8% projection of 100.15 to 108.07 from 105.42 at 110.31.

In the bigger picture, current development suggests that rebound from 99.57 is the second leg of the sideway pattern from 114.77 (2022 high). Outlook will stay bullish as long as 55 W EMA (now at 104.21) holds. Next target is 161.8% projection of 99.57 to 10734 from 100.15 at 112.72.

Precious Metals Slide; Silver Faces Critical Support Zone

Precious metals endured a week of heavy losses, driven by Fed’s hawkish rate guidance for 2025. Silver bore the brunt of the selloff, posting its steepest weekly decline in more than five years, while Gold also faced pressure despite a late lift from softer-than-expected US PCE inflation data.

Additionally, Chinese demand provided some support for Gold, with premiums in Shanghai flipping above London for the first time in two months as buyers ramped up purchases ahead of Lunar New Year of Snake. However, this resurgence in demand was insufficient to counteract the broader bearish momentum in the market.

Technically, Silver's fall from 34.84 resumed through 29.64 support last week and it's now at an important support zone, with near term level of 61.8% projection from 34.84 to 29.64 from 32.30 at 29.08, and medium term level of 55 W EMA (now at 28.55) . Strong bounce from the current level, followed by sustained break of 55 D EMA (now at 30.90) will suggest that the correction has completed, and keep the up trend intact.

However considering bearish divergence condition in W MACD, decisive break of 28/29 support zone will raise the chance of medium term bearish reversal. Deeper fall should then be seen back to 26.12 resistance turned support (38.2% retracement of 11.67 to 34.84 at 25.98).

Gold has been relatively resilient after forming a medium term top at 2789.92 with limited pull back so far. Yet outlook is unchanged that it's now in correction to the up trend from 1810.26. Hence risk will stay on the downside for another decline. Break of 2536.67 will target 100% projection of 2789.92 to 2536.67 from 2725.96 at 2472.70 and possibly below.

But still strong support is expected from 38.2% retracement of 1810.26 to 2789.92 at 2415.68, which is to 55 W EMA (now at 2398.44), to contain downside to bring rebound.

Cryptocurrencies Hit Hard; Bitcoin Holds Key Support, Ethereum Faces Deeper Risks

Fed’s hawkish stance sent shockwaves through cryptocurrency markets, triggering steep declines across Bitcoin, Ethereum, and altcoins. The selloff led to over USD 1.2B in liquidations, marking one of the largest single-day wipeouts in recent months. Despite the turbulence, Bitcoin displayed relative resilience, maintaining much of its post-election gains, while Ethereum faced sharper losses.

Bitcoin was indeed relatively resilient despite the steep pullback , and still maintained most of the post US election gains. Technically, 108368 is a short term top for sure. But consolidations from there would be relatively brief as long as 55 D EMA (now at 91119) holds. Larger up trend should resume through 109368 sooner rather than later, to 138.2% projection of 15452 to 73812 from 49008 at 129661.

However, firm break of the 55 D EMA will indicate medium term topping, and risk deeper correction back to 73812 resistance turned support.

Ethereum's decline was much steeper, partly because of the strong rejection by 4092.55 key resistance. corrective pattern from could now be extending with fall from 4108.15 as the third leg. Sustained trading below 55 D EMA (now at 3399.07) will pave the way towards 2084.51 support again.

EUR/USD Weekly Outlook

EUR/USD tried to resume the fall from 1.1213 last week but failed to break through 1.0330 support and recovered. Initial bias is turned neutral this week first. While stronger recovery cannot be ruled out, outlook will remain bearish as long as 1.0629 resistance holds. Firm break of 1.0330 will confirm decline resumption and target 61.8% projection of 1.0936 to 10330 from 1.0629 at 1.0254, and then 100% projection at 1.0023.

In the bigger picture, focus stays on 50% retracement of 0.9534 (2022 low) to 1.1274 at 1.0404. Strong rebound from this level will keep price actions from 1.1273 (2023 high) as a medium term consolidation pattern only. However, sustained break of 1.0404 will raise the chance that whole up trend from 0.9534 has reversed. That would pave the way to 61.8% retracement at 1.0199 first. Firm break there will target 0.9534 low again.

In the long term picture, down trend from 1.6039 remains in force with EUR/USD staying well inside falling channel, and upside of rebound capped by 55 M EMA (now at 1.0979). Consolidation from 0.9534 could extend further and another rising leg might be seem. But as long as 1.1274 resistance holds, downside breakout would be mildly in favor.

EUR/USD tried to resume the fall from 1.1213 last week but failed to break through 1.0330 support and recovered. Initial bias is turned neutral this week first. While stronger recovery cannot be ruled out, outlook will remain bearish as long as 1.0629 resistance holds. Firm break of 1.0330 will confirm decline resumption and target 61.8% projection of 1.0936 to 10330 from 1.0629 at 1.0254, and then 100% projection at 1.0023.

In the bigger picture, focus stays on 50% retracement of 0.9534 (2022 low) to 1.1274 at 1.0404. Strong rebound from this level will keep price actions from 1.1273 (2023 high) as a medium term consolidation pattern only. However, sustained break of 1.0404 will raise the chance that whole up trend from 0.9534 has reversed. That would pave the way to 61.8% retracement at 1.0199 first. Firm break there will target 0.9534 low again.

In the long term picture, down trend from 1.6039 remains in force with EUR/USD staying well inside falling channel, and upside of rebound capped by 55 M EMA (now at 1.0979). Consolidation from 0.9534 could extend further and another rising leg might be seem. But as long as 1.1274 resistance holds, downside breakout would be mildly in favor.