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Daily Pivots: (S1) 0.6622; (P) 0.6642; (R1) 0.6677; More...

Intraday bias in AUD/USD is back on the upside with break of 0.6685. Focus is now on 0.6707/13 resistance zone. Decisive break there will resume the whole rise from 0.5913 and target 61.8% projection of 0.5913 to 0.6706 from 0.6420 at 0.6910. For now, outlook will stay bullish as long as 0.6592 support holds, in case of retreat.

In the bigger picture, the break of multi-year falling trend line resistance suggests that rise from 0.5913 is possibly reversing whole down trend from 0.8006 (2021 high). Decisive break of 38.2% retracement of 0.8006 to 0.5913 at 0.6713 will solidify this case, and bring further rally to 61.8% retracement at 0.7206. On the downside, however, firm break of 0.6420 support will suggest rejection by 0.6713 and retain medium term bearishness.

Daily Pivots: (S1) 1.3721; (P) 1.3763; (R1) 1.3791; More...

USD/CAD's fall from 1.4139 resumes today and intraday bias is back on the downside for retesting 1.3538 low. Firm break there will extend the whole decline from 1.4791 to 1.3365 projection level. For now, risk will stay on the downside as long as 1.3804 resistance holds, in case of recovery.

In the bigger picture, current development suggests that price actions from 1.4791 is developing into a deeper, larger scale correction. In the less bearish case, it's just correcting the rise from 1.2005 (2021 low). But even so, break of 1.3538 will pave the way to 61.8% projection of 1.4791 to 1.3538 from 1.4139 at 1.3365. This will remain the favored case as long as 1.4139 resistance holds, in case of rebound.

US consumer confidence weakened further in December, with the Conference Board index falling from 92.9 to 89.1, below expectations of 91.7.

The pullback was driven by the sharp deterioration in current conditions. The Present Situation Index dropped -9.5 points to 116.8, signaling growing unease over labor market and business conditions. In contrast, Expectations Index held steady at 70.7, offering little reassurance as it remains firmly below the 80 threshold that historically signals recession risks.

Commenting on the data, Dana M. Peterson noted that confidence remains well below its January peak, with four of the five components of the headline index declining. The persistence of sub-80 readings in expectations for an eleventh straight month reinforces concerns that consumer sentiment continues to point toward a fragile economic outlook.

Full US consumer confidence release here.

Daily Pivots: (S1) 1.1722; (P) 1.1746; (R1) 1.1786; More….

EUR/USD is still bounded in range below 1.1803 and intraday bias stays neutral. On the upside, break of 1.1803 will extend the rally from 1.1467 to retest 1.1917 high. However, firm break of 55 D EMA (now at 1.1640) will turn bias back to the downside for 1.1467 support, to extend the corrective pattern form 1.19717 with another falling leg.

In the bigger picture, as long as 55 W EMA (now at 1.1385) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will carry larger bullish implication. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Daily Pivots: (S1) 1.3398; (P) 1.3438; (R1) 1.3502; More...

GBP/USD's rally from 1.3008 resumed by breaking through 1.3455 and intraday bias is back on the upside. Further rise should be seen to retest 1.3787 high. For now, risk will stay on the upside as long as 1.3356 support holds, in case of retreat.

In the bigger picture, current development suggests that fall from 1.3787 is merely a corrective move, and larger rise from 1.0351 (2022 low) is still in progress. Firm break of 1.3787 will target 1.4248 (2021 high) key structural resistance. This will remain the favored case as long as target 38.2% retracement of 1.0351 to 1.3787 at 1.2474 holds, in case of another fall.

Daily Pivots: (S1) 0.7904; (P) 0.7931; (R1) 0.7947; More….

USD/CHFs' decline accelerates after breaking through 0.7923 support and intraday bias is back on the downside. Decisive break of 0.7828 support will confirm larger up trend resumption. On the upside, above 0.7923 support turned resistance will turn intraday bias neutral first. But risk will stay on the downside as long as 0.7986 resistance holds.

In the bigger picture, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low). Long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382.

Canadian GDP contracted by 0.3% m/m in October, in line with Statistics Canada's advanced guidance and market expectations.

Compositionally, 11 of 20 industries registered a decline on the month. Goods industries (-0.7% m/m) reversed out last month's hefty gain, while the services sector contracted by a smaller 0.2% m/m.

On the goods side, the manufacturing sector (-1.5% m/m) contributed most to the GDP contraction, offsetting last month's expansion. A 0.6% m/m pullback in the mining, oil & gas sectors also contributed to monthly GDP decline. Meanwhile, the construction sector fell for a second consecutive month (-0.4% m/m).

On the services side, the education sector fell by 1.8% weighed down by the teachers strike in Alberta. Meanwhile, the transportation and warehousing sector (-1.1% m/m)  reversed out last month's gain. Wholesale and retail trade also fell by 0.9% m/m and 0.6% m/m, respectively.

Advanced guidance calls for a slight uptick in November GDP (0.1% m/m). Increases in the education, construction, and transportation sectors are expected to be partially offset by activity in the manufacturing and mining, oil & gas sector.

Key Implications

After an upside surprise to growth in the third quarter, today's GDP data together with November guidance indicate that fourth-quarter GDP growth is tracking roughly flat. Tariff-impacted industries showed some strain in October after gradually recovering in prior months. The expectation is that overall economic growth will remain subdued over the next quarter or two before gradually recovering over the medium-term.

The Bank of Canada (BoC) doesn't make its next policy decision until January 28th, and we don't think today's data moves them off of their current policy stance. The BoC has acknowledged that trade-related impacts on inflation and economic growth are becoming more clear, though that doesn't lower the level of uncertainty in coming quarters as Canada and the U.S. continue to work on hammering out a trade deal. All told, we maintain our view that the BoC has reached the end of their interest rate easing cycle.

After having been delayed by nearly two months because of the government shutdown, this morning the Bureau of Economic Analysis released its initial estimate of Q3 GDP (replacing both the advance and second estimates) and a preliminary reading of corporate profits (normally released with the second estimate of GDP).

The U.S. economy expanded by 4.3% quarter-on-quarter (q/q, annualized) in the third quarter – well above the consensus forecast of 3.2% – and a modest acceleration from Q2's 3.8%.

Consumer spending rose a healthy 3.5% q/q, following a smaller gain of 2.5% in Q2. Both goods (+3.1%) and services (+3.7%) spending was higher on the quarter.

Business investment rose 2.8% q/q, marking a deceleration from a very strong first half of the year. In terms of the breakdown, both equipment (+5.4%) and intellectual property products (+5.4%) were higher, while spending on structures (-6.3% q/q) declined for a seventh consecutive quarter.

Residential investment declined 5.1% q/q, as both homebuilding and sales activity remained subdued.

Government spending rose a 2.2%, with both federal (+2.9%) and state & local spending (+1.8%) higher on the quarter.

International trade had a smaller (but still meaningful) influence on Q3 GDP. Imports fell 4.7% q/q while exports rose 8.8% q/q, resulting in net exports adding 1.6 percentage points (pp) to growth. Meanwhile, inventory investment shaved 0.2pp.

Final sales to private domestic purchasers, a better gauge of underlying demand as it includes only household consumption and fixed investment rose to 3.0%, following a similar gain in Q2.

Real Gross Domestic Income (GDI) – an alternative measure of economic output – rose 2.4% after rising a similar 2.6% in Q2. Corporate profits rose 18% annualized or $166 billion after accounting for inventory valuation and capital consumption adjustments. Personal income was up 3.3%, as employee compensation rose 3.8%.

Key Implications

The U.S. economy maintained considerable momentum in the third quarter, despite headwinds. Consumer spending recorded another solid quarter, while capital expenditures continued to expand at healthy clip, aided by further investments in AI but also some broadening to more traditional forms of equipment spending.

As we round the corner to close out 2025, today's Q3 GDP data feels somewhat stale. We know Q4 got off to a very rocky start, as a record long six-week government shutdown resulted in over 650,000 federal employees being temporarily furloughed without pay. This will exert a meaningful drag on near-term activity, with Q4 growth likely to slow to a sub-1%. However, these effects should reverse in Q1-2026, with growth expected to rise closer to a "trend-like" 2% pace.

Daily Pivots: (S1) 156.59; (P) 157.15; (R1) 157.59; More...

USD/JPY's sharp decline today suggests rejection by 157.88 resistance, and intraday bias is turned neutral. Consolidations from 1.5788 is extending with another downleg. But further rally is expected as long as 154.33 support holds. Firm break of 158.85 key structural resistance will be an important medium term bullish sign. Next target will be 161.94 high. However, decisive break of 154.38 will turn bias to the downside for deeper correction.

In the bigger picture, corrective pattern from 161.94 (2024 high) could have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. Decisive break of 158.85 structural resistance will solidify this bullish case and target 161.94 for confirmation. On the downside, break of 150.90 resistance turned support will dampen this bullish view and extend the corrective range pattern with another falling leg.

Yen rebounded broadly today, but the move appears driven more by pre-holiday profit-taking than a genuine shift in trend. Position squaring into year-end has offered temporary relief after recent weakness, yet price action lacks the conviction typically associated with durable reversals. There was also some support from stepped-up verbal intervention by Japanese officials. Authorities delivered their strongest warnings yet against excessive currency moves, helping to slow speculative pressure even if the impact remained short-lived.

Japanese Finance Minister Satsuki Katayama said the recent yen declines “absolutely do not reflect fundamentals,” adding that the government stands ready to take appropriate action against excessive moves. She suggested the scale of the Yen’s fall pointed to speculative behavior. Additionally, she referred to Japan’s September agreement with the U.S. on exchange-rate policy as a framework for possible intervention.

Yen sentiment also drew modest support from Prime Minister Sanae Takaichi, who emphasized that Japan’s national debt remains “still high.” She rejected irresponsible bond issuance or tax cuts, highlighting an effort to support growth without undermining confidence in Japan’s public finances or yen-denominated assets.

However, fiscal concerns remain a structural drag. Former BoJ policymaker Seiji Adachi argued bluntly that Yen weakness persists despite narrowing Japan–U.S. rate differentials, suggesting BOJ policy is no longer the main driver. Instead, he said investors are increasingly demanding a higher premium for Japan’s fiscal risk. Those concerns are already visible in rising Japanese government bond yields. Adachi warned it will be difficult to erase market doubts over Japan’s finances after proactive fiscal policies were so strongly emphasized, adding that higher bond yields could become the biggest risk to Japan’s economy next year.

Meanwhile, Dollar traded broadly lower, extending a soft year-end tone. Mixed U.S. data offered little support, with markets largely shrugging off the upward revision to Q3 GDP while focusing on sluggish October durable goods orders. Dollar is now on track for its weakest annual performance in eight years, and some see scope for further downside. Risks appear asymmetric, with attention increasingly centered on labor market health, while inflation concerns have been partially overshadowed. Additional uncertainty surrounds the prospect of a more politically influenced Fed following the replacement of Jerome Powell, which could tilt policy toward deeper easing. Still, that picture could shift early next year with December non-farm payrolls.

For now, Kiwi and Aussie lead gains alongside Yen, while Dollar sits at the bottom, followed by Euro and Sterling, with Swiss Franc and Loonie holding the middle ground.

In Europe, at the time of writing, FTSE is down -0.11%. DA is up 0.02%. CAC is down -0.31%. UK 10-year yield is down -0.06 at 4.532. Germany 10-year yield is down -0.018 at 2.882. Earlier in Asia, Nikkei rose 0.02%. Hong Kong HSI fell -0.11%. China Shanghai SSE rose 0.07%. Singapore Strait Times rose 0.62%. Japan 10-year JGB yield fell -0.041 to 2.040.

US durable goods fall -2.2% mom as transport orders drag

US durable goods orders fell -2.2% mom to USD 307.4B in October, undershooting expectations for a -1.5% decline. The weakness was driven largely by transportation equipment, which dropped -6.5% to USD 103.9B after two consecutive monthly increases.

Beneath the surface, underlying demand appeared more resilient. Orders excluding transportation rose 0.2% mom to USD 203.5B, in line with forecasts, suggesting steadier business investment outside volatile categories. Orders excluding defense declined -1.5% mom to USD 286.5B.

Canada GDP shrinks -0.3% mom as manufacturing drags, November looks firmer

Canada’s economy contracted in October, with real GDP falling by -0.3% mom, in line with expectations. The slowdown was broad-based, with 11 of 20 industrial sectors posting declines, highlighting ongoing softness across the economy.

Goods-producing industries were the main drag, falling -0.7% on the month as most components weakened. Manufacturing led the decline, reinforcing concerns that external demand and tighter financial conditions continue to weigh on Canada’s industrial base. Services-producing industries also slipped by -0.2%, partly reflecting labor stoppages that disrupted activity in several areas.

Looking ahead, early indications point to modest stabilization. Advance data suggest real GDP by industry rose 0.1% mom in November, supported by gains in educational services, construction, and transportation and warehousing. These were partly offset by renewed weakness in mining, quarrying, oil and gas extraction, and manufacturing.

RBA minutes confirms 2026 hike risk, AUD/USD presses 0.67, eyes 0.72 next year

Australian Dollar surged broadly after minutes from the December policy meeting confirmed that the RBA had actively discussed the possibility of a rate hike in 2026. While officials stressed that such an outcome is far from assured, the acknowledgment alone was enough to reprice expectations and trigger a sharp AUD bid.

According to the minutes, board members debated whether a rise in the cash rate might need to be considered sometime next year following a recent pickup in inflation. Policymakers agreed that risks to inflation had tilted to the upside, but emphasized that it would take “a little longer” to judge whether price pressures would prove persistent rather than temporary.

The discussion also revealed internal disagreement over whether financial conditions remain sufficiently restrictive. Some members pointed to aggressive bank lending and ongoing strength in housing prices as signs that conditions may no longer be tight enough to restrain inflation effectively, adding weight to the upside risk narrative.

At the same time, the board agreed that labor market conditions remain somewhat tight, with the economy likely still operating in excess demand. Elevated capacity utilization was also flagged as evidence of ongoing supply constraints, reinforcing concern that inflation could prove more stubborn than previously assumed.

Markets reacted by pushing AUD higher across the board, with AUD/USD extending its rebound from 0.6420. Immediate focus has now shifted to a critical cluster resistance zone around 0.6706–0.6713, which includes 38.2% retracement of 0.8006 to 0.5913 at 0.6713.

Decisive break above this 0.6716/13 zone would mark a significant technical development. It would strengthen the case that AUD/USD is already reversing the entire downtrend from the 2021 high at 0.8006.

In that scenario, the next near-term target comes in at 61.8% projection of 0.5913 to 0.6706 from 0.6420 at 0.6910.

Beyond the near term, confirmation of a broader trend reversal would open scope for a move toward to 61.8% retracement of 0.8006 to 0.5913 at 0.7206 and above next year.

USD/JPY Daily Outlook

Daily Pivots: (S1) 156.59; (P) 157.15; (R1) 157.59; More...

USD/JPY's sharp decline today suggests rejection by 157.88 resistance, and intraday bias is turned neutral. Consolidations from 1.5788 is extending with another downleg. But further rally is expected as long as 154.33 support holds. Firm break of 158.85 key structural resistance will be an important medium term bullish sign. Next target will be 161.94 high. However, decisive break of 154.38 will turn bias to the downside for deeper correction.

In the bigger picture, corrective pattern from 161.94 (2024 high) could have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. Decisive break of 158.85 structural resistance will solidify this bullish case and target 161.94 for confirmation. On the downside, break of 150.90 resistance turned support will dampen this bullish view and extend the corrective range pattern with another falling leg.