Sample Category Title

Oil prices have been tumbling without stopping in a stable but continuous downtrend.

A positive development that encourages cuts by reducing inflation expectations for consumers, but with prices back to January 2021 levels, producers are pressured to decrease investment in technology and rig development.

For example, US Shale is known to be profitable at around $70 per barrel.

As pressure mounts, producers can be squeezed out of the Market, which can then result in a too-short supply in the future, potentially raising future prices in the energy commodity.

Falling Inventories and Falling Oil Prices – Source: LSEG, published by Ian Harnett

Following a mid-October trough, better-looking Chinese demand led to a rebound in prices to $60 in mid-November; however, prices have since fallen rapidly.

Current factors for the fall in Oil include:

• The current OPEC+ high supply is known to hurt demand, as intra-organizational dynamics point to some members wanting to restrain margins to capture market share.
• The Market could also be pricing a reopening of the Venezuelan Oil Market to OECD markets if pressure on Maduro from the Trump Administration increases.
  • We are still far from this, but the rising tensions between Washington and Caracas are surely getting priced into the Market. In case you did not know, Venezuela sits on the largest proven Oil reserves in the world, even surpassing Saudi Arabia, the world's largest producer.
• Traders are also pricing a ceasefire between Russia and Ukraine, which could lead to more supply, leading to the current substantial fall.

World's Proven Oil Reserves by Country – Source: GIS

Caveat on the Russia-Ukraine ceasefire acting as bearish force

Throughout this conflict, there has been many mentions of Russian supply to the West being reduced, but to sponsor their war, Russians have found ways.

Finding new buyers is one: by offering cheap oil and flooding the Markets, there is still large interest for Russian Oil – China and India, the two largest Oil consumers being the biggest buyers (without counting some EU countries still dependent on the imports)

Shadow Fleets are also common, with Tankers from Turkey allowing to transport and sell sanctioned Oil to Western buyers under legal names – Discover the Sanctions Paradox

My contrarian view is one of a Russia-Ukraine conflict ending which could actually be a bullish catalyst for Oil prices, as illegal, cheaper oil would be less available and a reopening of traditional Markets to Russia could add to the competitive bidding. That could result in a sell-the-rumour, buy-the-news reaction.

But it's just a theory.

In any case, let's dive into a multi-timeframe analysis of WTI Oil to spot if Oil trading at 2025 presents a technical opportunity or a trap.

US Oil (WTI) Multi-timeframe Technical Analysis

Daily Chart

US Oil (WTI) Daily Chart, December 16, 2025 – Source: TradingView

Oil has broken below its short-term Channel mentioned in our preceding Analysis, strongly reacting to the 50-Day Moving Average.

The MA stands out as the key Technical Indicator for the Oil trend, providing very strong entry points throughout the descent.

As a matter of fact, any long-term technical reversal would be valid only on a weekly close above the 50-Day MA.

With no sign of divergence and a consistent fall, technicals are signalling that the downtrend is stable and is not showing signs of weakness.

Nevertheless, some reversal signs could be emerging on shorter timeframes.

Let's dive into it.

4H Chart and Technical Levels

US Oil (WTI) 4H Chart, December 16, 2025 – Source: TradingView

A reversal could be near, with the second wave of selling forming an exact measured move of the preceding selloff.

Coming in precisely at the lows of the Daily Channel seen on the higher timeframe, elements are adding into a potential reversal.

The price action is still mostly bearish, so to get confirmation of such a reversal, traders will need to see a bullish candle which closes at least above the preceding 4H candle ($55.65).

Levels to place on your WTI charts:

Resistance Levels

• Key September Resistance $65 to $66
• May range Resistance $63 to $64
• $60.90 Past Week highs
• $58.265 short-timeframe pivot level
• May Range lows support $59.00 to $60.50 (Broken, now Major Pivot)

Support Levels

• $55 to $56.50 2025 Support and Channel lows (testing)
• Session lows $55.00
• 2019 mini support $53 to $54
• Mid-2019 Main support $51 to $52.50

1H Chart

US Oil (WTI) 1H Chart, December 16, 2025 – Source: TradingView

The selloff is very strong and may not reverse suddenly.

Keep an eye on whether the session closes below $55.00 which acts as the key level for further action.

A weekly close would confirm a further breakdown.

Failing to break the lows however may lead to some consolidation. As said on the 4H timeframe, any reversal would require an initial sign of reversal (strong bull candle).

Safe Trades!

GBPAUD: ⬆️ Buy

• GBPAUD reversed from support area
• Likely to rise to resistance level 2.0400

GBPAUD currency pair recently reversed up from the support area between the round support level 2.000 (which has been reversing the price from October, as can be seen below), lower daily Bollinger Band and the support trendline of the down channel from July.

The upward reversal from this support area started the active short-term impulse wave 3 of the intermediate impulse wave (3) from November.

Given the strength of the support level 2.000 and the bearish Australian dollar sentiment seen today, GBPAUD cryptocurrency can be expected to rise to the next resistance level 2.0400.

Summary

Bank of Japan (BoJ) policymakers are set to raise rates 25 bps this week, a now consensus view but a stance we took well before financial markets fully priced tighter BoJ monetary policy. Markets fully digesting a BoJ December rate hike likely means the Japanese yen will fall short of hitting our YE-2025 USDJPY target; however, no element of surprise also means emerging market currencies should be more protected and not experience much post-hike volatility, a different dynamic relative to last year's BoJ August hike that injected volatility across many high-yielding emerging currencies as the yen funded carry trade unwound.

Looking ahead, even before we hear from BoJ policymakers on the outlook for monetary policy, we are adjusting our BoJ forecast profile to now include another 25 bps rate hike in Q3-2026. Financial markets are priced for the BoJ to deliver a rate hike closer to the end of next year, which puts our updated BoJ outlook moderately out of consensus on the more hawkish side. Our revised view leads us to believe the yen may be more resilient in H2-2026 than we originally forecast on diverging paths for BoJ-Fed monetary policy.

Bank of Japan Preview

Bank of Japan (BoJ) policymakers will make their final monetary policy decision of 2025 at the end of this week, and we—alongside the broader consensus—expect a 25 bps rate hike to be delivered. We have been steadfast in our view that the BoJ would raise rates this week, a forecast we highlighted in our 2026 Annual Economic Outlook well before financial markets fully priced a December rate hike. Our rationale for a hike came down to our assessment of underlying economic fundamentals in Japan which—despite political preference for easier monetary policy after Prime Minister Takaichi's election earlier this year—we felt were consistent with tighter BoJ monetary policy. Since we published our year ahead outlook, economic fundamentals, in our view, have become more consistent with higher interest rates. This conviction stems from wage hikes that are above the current pace of inflation, fiscal stimulus deployed by the Takaichi administration and leading indicators that suggest activity is still firm. Adding to our conviction is a Japanese yen that has broadly remained on the defensive and has not participated in the dollar depreciation trend as much as peer G10 currencies.

Going forward, we do not believe that Japanese economic conditions are set to change all that materially. Meaning, we expect the Japanese economy to remain supported, and while GDP growth will not be all that exciting in 2026, we expect activity to continue to be consistent with an economy that can digest higher interest rates. On inflation, headline CPI may slip back toward the BoJ's target next year; however, wage hikes, fiscal stimulus and the lagged effect of U.S. imposed tariffs keep the balance of risk tilted to the upside. Taken together, resilient growth and upside risks to inflation, we are revising our Bank of Japan forecast profile to now include another 25 bps rate hike to be delivered Q3-2026 (Figure 1). As of now, financial markets are priced for additional BoJ tightening in Q4-2026, leaving our view moderately out of consensus and more hawkish relative to peer economists. Similar to the upcoming December hike, local political dynamics will remain the biggest hurdle to additional tightening. But if local economic conditions evolve as we expect in 2026, we have our doubts that political preference or interference will prevent BoJ policymakers from taking the BoJ Target Rate to 1.00% by the end of next year.

Should the BoJ move ahead with a hike this week, the yen may not strengthen the way we outlined in our 2026 outlook, at least not in the near-term. When we published our 2026 outlook, our BoJ December hike forecast was very much out of consensus, and we believed the rate hike would be more of a surprise that would prompt a sharp JPY rally headed into the end of the year. But as mentioned, with a hike almost fully priced, near-term upside for the Japanese yen is likely limited. Or said another way, for JPY to strengthen in line with our forecast, an exogenous catalyst would need to materialize. Rather than a USDJPY move lower toward our original Q4-2025 target of JPY152.00, USDJPY is likely to hover around current levels through the end of this year. Also, with financial markets expecting a BoJ December rate hike, volatility across emerging market currencies, similar to what unfolded after the BoJ raised interest rates in August 2024, is unlikely. Carry positions funded by Japanese yen have been scaled back as other funding currencies (i.e., CHF) have become associated with less hawkish central banks, and in turn, have become more popular alternatives. Positioning data suggests leveraged funds are also net long JPY, additional evidence that EM currencies should be more protected in the upcoming BoJ hike. More medium-term, the Japanese yen could be more resilient than we initially expected. An earlier rate hike in 2026 than markets are pricing should be supportive of the yen, especially when considering USDJPY has been disconnected from U.S. Treasury and Japanese Government Bond yield differentials over the back half of 2025 (Figure 2). We still believe the U.S. dollar will be in rebound mode when the BoJ delivers its hike in 2026, but against a backdrop of major central banks keeping monetary policy settings on hold by H2-2026, BoJ rate hikes should prevent USDJPY from rising as much as initially expected over the back half of next year.

WTI crude extended its selloff sharply today, breaking to the lowest level since early 2021 and deepening one of its worst annual performances in years. The US benchmark is now down roughly 22% for the year, marking its weakest showing since 2018. With downside momentum accelerating, WTI might be targeting 50 psychological level if selloff persists in the coming days.

A key catalyst behind this week’s intensified selling has been rising optimism around a peace agreement in Ukraine. Reports earlier in the week suggested US officials believe a deal to end the war is close, with roughly 90% of issues between Ukraine and Russia said to be resolved. That prospect has revived expectations of eventual normalization in energy flows.

However, significant hurdles remain. Any final agreement still hinges on territorial disputes between Kyiv and Moscow, as well as firm security guarantees. While President Volodymyr Zelenskyy has agreed to abandon Ukraine’s goal of joining NATO, he continues to push for Article Five–like security protections from the US and Europe, a demand that remains unresolved.

Beyond geopolitics, oil markets have been under sustained pressure from supply-side developments. OPEC+ members have ramped up production aggressively this year after years of coordinated output cuts, adding to concerns that global supply is now running ahead of demand at a time when growth momentum remains uneven.

Technically, the break of 55.20 low suggests that WTI's long term down trend is resuming. Immediate focus is now on 61.8% projection of 66.70 to 56.44 from 60.50 at 54.15. Decisive break there would pave the way to 100% projection at 50.24. Outlook will stay bearish as long as 57.13 support turned resistance holds, in case of recovery.

Markets

European PMIs were nothing but the amuse-bouche ahead of the more important US economic update, if only because they don’t fuel further speculation for rate hikes per se but simply confirm the ECB’s rates status quo for longer. The stoic FX and FI income reaction was testament with EUR/USD hovering directionless just north of the recently conquered 1.1747 (minor) resistance level. European rates trade a tad higher at the long end (30-yr swap closing in on the 2023 12-yr high). The overall PMI came in below expectations by falling to 51.9 from 52.8. The December reading nevertheless marks a one-year long expansion (>50), the first in the post-pandemic era. Services grew slightly slower (52.6) while manufacturing contracted faster (49.2). New orders, though slower than in November, rose for a fifth month but export business decreased at the fastest rate since March. Employment grew enough in services to offset staff reduction in manufacturing. Companies noted a marked rise in input costs in both sectors but that doesn’t translate so far into output inflation, labeled “modest” by the PMI owners. Manufacturers’ optimism for the future reached its highest since February 2022 (German stimulus approval?) while services companies hit a seven-month low. The UK version surprised to the upside and, combined with a slightly less worse than feared labour market report, pushes GBP higher to EUR/GBP 0.876.

Going into the much-anticipated payrolls, ADP’s weekly update of the job market signaled momentum building in the second half of November (and as previous weak prints drop out of the equation). Hiring picked up to 16 250 jobs per week in the four weeks ending November 29 after four weeks of job losses. Next week’s reading could be strong as well with 4-week MA moving beyond the dire Nov 8 week. Turning to the official labour market data, October employment tanked by 105k, driven by the government sector (-157k). Not all losses were recouped for in November, and even though the +64k was a bit more than the 50k expected it was extremely thinly-based with one sector (health, social assistance) accounting for virtually all of the job creation. Employment for August and September was revised down by a combined 33k. The unemployment rate rose from 4.4% in September to 4.6% in November, low still but a 4-yr high and taking the US economy a step closer in triggering the Sahm recession rule (0.376 vs 0.5 trigger). The rise in the participation rate (62.5%) may offset some of the unemployment rate concerns. The BLS noted that the response rate was lower than usual, muddying the underlying trends. The caveat comes on top of Fed chair Powell last week saying the payrolls reports since April may end up having overestimated employment by an average 60k per month when the final benchmark revisions happens early next year. These statistical quirks complicate the market conclusion, especially with additional noise coming from the ADP, the solid (core) retail sales (control group +0.8%) and decent yet lower-than-last-month US PMIs. Front end yields dropped up to 5 bps in a kneejerk reaction but soon pared losses. Fed bets for a January cut remain largely unchanged at 25%. Long maturities are stable. EUR/USD is eager to test the 1.18 big figure. DXY fell towards 98. US equities open slightly lower.

News & Views

UK PMIs signaled accelerating economic output growth in December, led by the sharpest rise in new business for 14 months. The UK composite output index improved to 52.1 from 51.2. Both services activity (52.1 from 51.3) and manufacturing output (51.8 from 50.3, highest in 15 months) contributed. Growth was still subdued compared to long-run trends. The rise in orders mainly came from services. This also helped backlogs of works to have increased from the first time since February 2023. Despite better output and new orders, staffing levels continued to decline at a solid pace, often attributed to intense cost pressures. Especially input prices in the services sector reaccelerated. S&P commented that the report ‘brought welcome news on faster economic growth at the end of the year, with businesses buoyed in part by the post-Budget lifting of uncertainty’. S&P sees current PMI as consistent with growth accelerating to 0.2% in December, but still only expects quarterly growth in Q4 at 0.1%. Today’s report probably won’t change the assessment of the BoE at Thursday’s policy meeting, expected to result in 25 bps lower rates to 3.75%. Better than/less worse than expected PMI’s & labour market data publish morning are (slightly) lifting UK yields. Sterling rebounds from near EUR/GBP 0.8795 to 0.876.

US PMI readings eased across the board in December, signaling that the "recent economic growth spurt is losing momentum". PMI Manufacturing slipped from 52.2 to 51.8, while PMI Services fell more sharply from 54.1 to 52.9. PMI Composite dropped from 54.2 to 53.0.

S&P Global said the data remains consistent with annualized GDP growth of around 2.5% in the fourth quarter, but noted that momentum has now slowed for a second consecutive month. New sales growth weakened notably ahead of the holiday season,. The slowdown was broad-based, with services seeing near-stalling inflows of new work and manufacturing recording its first decline in factory orders in a year.

At the same time, cost pressures intensified. Firms reported a sharp pickup in inflation to the highest level since November 2022, feeding through to one of the steepest increases in selling prices in three years. Businesses also trimmed hiring and grew more cautious about the outlook, citing tariffs as a renewed source of price pressure that is now spilling beyond manufacturing into services, broadening affordability concerns.

Full US PMI flash release here.

The Non-Farm Payrolls finally released, relatively on time, and came at a small beat on expectations (64K vs 40K expected) while the Unemployment rate grew from 4.4% to 4.6%.

With downward revisions to the September data (-33K) and a -105K report for October, the labor picture is indeed softening as was highlighted by Fed's Williams throughout a few rounds of interviews yesterday.

But for now, things are not looking scary: The January 28th Meeting is priced only at 25% of a 25 bps cut and odds for cuts modestly rose for later meetings.

Market Reactions

Market Outlook 30M Charts for S&P 500, Oil, 10-Year Bonds, Gold, Bitcoin and the USD. December 16 – Source: TradingView

Even without extra odds for rate cuts in 2026, the US Dollar is struggling quite a lot, breaking its past day support and going towards new lows.

The Dollar Index is testing the 98.00 handle, key for mid-term momentum.

You can also witness Oil falling back to its 2025 lows but attempting a shy rebound from key levels.

Metals on the other hand, are loving the NFP report and bouncing from their relative highs consolidation.

Gold is trading between $4,250 to $4,350 and attempting to break its small-resistance, Silver is roughly doing the same but Platinum is breaking higher this morning.

Stocks are opening timidly also, gapping lower at the open but not by a wide margin.

A detailed analysis for US Indexes is coming up soon in the morning session.

A shy open in Stocks. US Indexes Daily Chart Outlook – December 15, 2025 – Source: TradingView

Safe Trades!

Non-farm employment rose 64k in November, slightly ahead of the consensus forecast in Bloomberg (50k). November's reading marked an uptick in hiring from October (also reported this morning), where job growth fell by 105k. However, October's figures were weighed down by a sharp drop in federal hiring (-162k), reflecting those workers who opted into the deferred federal worker resignation program initiated by the Trump administration earlier this year. Many of those employees remained on the payroll through September.

• Importantly, the 43-day government shutdown had no impact on federal hiring figures for November, as furloughed workers eventually received backpay once the government reopened.
• Both the August (-4k to -26k) and September (119k to 108k) payroll figures were revised lower.
• Smoothing through the volatility, job gains averaged 22k per-month through the three-months ending in November, little changed since April.

Private payrolls rose 69k in November – slightly higher than the 52k reported in October – with job gains concentrated in health care & social assistance (+64k) and construction (+28k). Transportation & warehousing (-17.7k), leisure & hospitality (-12k) and manufacturing (-5k) all shed jobs last month as did the federal government (-6k).

Because of the government shutdown, household survey figures were not collected for October. The Bureau of Labor Statistics noted that the lack of October data required an adjustment to the statistical weighting process. In addition, the survey response rate was lower than usual. This resulted in "slightly higher than usual" standard errors on November's estimates.

• Relative to September, the labor force increased by 323k, which was more than the 96k increase in household employment. This resulted in the unemployment rate rising 12.5 basis points to a new cycle high of 4.6%. The labor force participation rate rose another tick to 62.5%, or the highest level since April.

Average hourly earnings rose 0.1% month-on-month (m/m) – down from 0.4% m/m in October. On a year-ago basis, wage growth slowed to a new cycle low of 3.5%.

Key Implications

There's a lot to digest in this morning's release. The takeaway is that the labor market remains on a relatively soft footing, with employers showing little appetite to hire, but are also reluctant to fire. That said, labor demand has cooled more than supply in recent months, which is what's behind the steady upward drift in the unemployment rate.

However, at last week's press conference, Chair Powell warned that we would need to look at the next few months of data "with a skeptical eye" as collection rates and methodological adjustments could impact the quality of the October/November releases. From that perspective, last month's uptick in the unemployment rate appears less dire, particularly when balanced against private sector job growth that looks to be stabilizing. The market reaction was relatively muted post-release, with Fed futures still not fully pricing in the next quarter-point cut until June.

Daily Pivots: (S1) 1.3748; (P) 1.3768; (R1) 1.3789; More...

USD/CAD's fall from 1.4139 resumed after brief consolidations and intraday bias is back on the downside. Sustained trading below 61.8% retracement of 1.3538 to 1.4139 at 1.3768 will argue that whole fall form 1.4791 might be ready to resume. Retest of 1.3538 low should be seen next. On the upside, above 1.3787 minor resistance will turn intraday bias neutral again.

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.