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Daily Pivots: (S1) 1.1485; (P) 1.1519; (R1) 1.1547; More…

Intraday bias in EUR/USD is turned neutral first with today's recovery and some consolidations could be seen above 1.1490. Nevertheless, risk will stay on the downside as long as 1.1655 resistance holds. Below 1.1490 and 1.1467 will resume the whole decline from 1.1917 high. Next targets are 1.1390, and then 38.2% retracement of 1.0176 to 1.1917 at 1.1252.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top is likely in place at 1.1917, just ahead of 1.2 key psychological level. As long as 55 W EMA (now at 1.1328) holds, the up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2000 will carry larger bullish implications. 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.

Dollar is trading on the back foot today as markets add to bets on a December Fed rate cut, extending the repricing that began late last week. The shift was triggered by New York Fed President John Williams, who surprised markets last Friday by saying he sees room for a further “near-term adjustment,” reversing the hawkish tone embedded after the FOMC minutes.

Known dove Governor Christopher Waller reinforced the message today, saying a December cut is “appropriate” given continued labor-market softening and easing inflation pressures. He did note that January could be less straightforward due to the flood of delayed data, but markets latched onto the December signal. Fed funds futures now imply more than a 75% chance of a 25bps move next month, putting Dollar on the defensive.

Yen, however, is even weaker, continuing to unwind Friday’s rebound. Traders remain unmoved by verbal intervention efforts, including remarks from Takuji Aida—an influential private-sector member of a key government panel—who told NHK that Japan has “excessive foreign reserves” and should actively tap them for Yen-buying intervention. Markets have heard similar warnings many times recently and continue to fade them.

Meanwhile, a new nationwide Yomiuri Shimbun poll shows strong public backing for Prime Minister Sanae Takaichi. Her cabinet’s approval rating stands at 72%, essentially unchanged from its launch, and 74% of respondents support her pledge for “responsible, active fiscal policy.” High public approval strengthens her political leverage.

That public support makes it even harder for BoJ to push back against Takaichi’s preference to delay rate hikes, even as wage momentum and inflation persistence argue for gradual normalization. Political constraints remain one of the key reasons Yen continues to trade heavy, with markets skeptical that BoJ can accelerate tightening while fiscal stimulus remains the dominant policy tool.

Across the currency markets today, Euro leads the majors, followed by Sterling and Swiss Franc. At the other end, Yen is the weakest performer, with Loonie and Dollar also lagging. Aussie and Kiwi sit in the middle of the pack.

In Europe, at the time of writing, FTSE is up 0.29%. DAX is up 0.75%. CAC is up 0.13%. UK 10-year yield is flat at 4.551. Germany 10-year yield is up 0.005 at 2.712. Earlier in Asia, Japan was on holiday. Hong Kong HSI rose 1.97%. China Shanghai SSE rose 0.05%. Singapore Strait Times rose 0.62%.

Fed’s Waller backs December cut, says January depends on data flood

Fed Governor Christopher Waller signaled clear support for a December rate cut, saying most private-sector and anecdotal data since the last FOMC meeting show little improvement in economic conditions. He noted that the labor market “is soft” and “continuing to weaken,” with inflation expected to ease, creating an environment where another cut next month is appropriate.

Waller said the January meeting presents more uncertainty, as the Fed will receive a “flood of data” that had been delayed by the government shutdown. If those releases align with recent trends—softening labor conditions and moderating inflation—then a case for another cut could be made. "But if it suddenly shows a rebound in inflation or jobs or the ⁠economy's taking off, then it might give concern,"‌" he added.

Beyond policy, Waller confirmed he met recently with Treasury Secretary Scott Bessent to discuss his potential nomination as the next Fed Chair, as the Trump administration moves to select a successor to Jerome Powell. Waller said the meeting went “great,” and argued that the administration is seeking someone with “merit, experience, and knows what they are doing,” adding, “I think I fit that.”

Powell’s term ends in May, leaving a narrow window for the White House to finalize its choice.

German Ifo falls to 88.1, firms see little prospect of near-term rebound

Germany’s business mood softened in November as the Ifo Business Climate Index edged down to 88.1 from 88.4, missing expectations of 88.5. The decline was driven mainly by weaker expectations, which dropped from 91.6 to 90.6. Assessment of current conditions improved slightly from 85.3 to 85.6.

Sector details remained broadly negative. Manufacturing slipped further from -12.1 to -12.5, reflecting sustained weakness in global demand and the lingering impact of U.S. tariff. Services eased from 2.9 to 2.6, hinting at a moderation in domestic resilience. Trade deteriorated from -20.4 to -21.4 and construction fell from -14.4 to -15.7. Together, these readings signal a still-fragile backdrop with limited catalysts for improvement heading into year-end.

Ifo noted that sentiment among German firms has deteriorated as companies grow more pessimistic about the medium-term outlook. While current conditions improved slightly, businesses “have little faith that a recovery is coming anytime soon.”

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1485; (P) 1.1519; (R1) 1.1547; More…

Intraday bias in EUR/USD is turned neutral first with today's recovery and some consolidations could be seen above 1.1490. Nevertheless, risk will stay on the downside as long as 1.1655 resistance holds. Below 1.1490 and 1.1467 will resume the whole decline from 1.1917 high. Next targets are 1.1390, and then 38.2% retracement of 1.0176 to 1.1917 at 1.1252.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top is likely in place at 1.1917, just ahead of 1.2 key psychological level. As long as 55 W EMA (now at 1.1328) holds, the up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2000 will carry larger bullish implications. 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.

Market Overview

The crypto market appears to have found a foothold last Friday, adding 5% to its lows and recovering to $2.94 trillion. At the same time, the market is now more than 9% lower than it was seven days ago. This is a timid rebound after a devastating collapse. But in this situation, we can see some green shoots for the near future.

The sentiment index rose to 19, remaining in the territory of extreme fear but breaking out of the narrow range where it had been trading for ten days since November 13th. All this looks like a good, but short-term signal to buy in anticipation of a rebound after excessive overselling.

Bitcoin rose to $88K at the start of the day, then corrected to $86K during European trading. The first cryptocurrency slipped to $80.5K on Friday but found buyers to form a rebound, leaning on a recovery in risk appetite in stocks as the chances of a rate cut in December shot to 75% from 28%. BTCUSD received active support in the same $75-85K range in March and April, so it may linger there for some time.

News Background

Outflows from spot Bitcoin ETFs in the US have continued for the fourth consecutive week. According to SoSoValue, net outflows from spot BTC ETFs reached $1.22 billion last week. Total outflows over the five weeks amount to $5.13 billion, bringing the total cumulative inflows since the approval of Bitcoin ETFs in January 2024 to $57.64 billion.

Outflows from spot Ethereum ETFs in the US have continued for the third consecutive week, and for five out of the last six weeks. Net outflows from ETH ETFs totalled $500.3 million, reducing the total inflow since the ETFs’ launch in July 2024 to $12.63 billion. Over the past five weeks, investors have withdrawn $2.28 billion from ETFs.

Inflows into the recently launched Solana spot ETFs in the US have continued for four consecutive weeks. Net inflows rose to $120.2 million last week. Total inflows since the SOL ETF launched on 28 October have increased to $510.3 million (+33.5% over the week).

Inflows into the recently launched spot XRP ETFs in the US have continued for six consecutive trading sessions. During this time, investors have invested $422.7 million in the funds.

The options market is not yet signalling that Bitcoin has bottomed out and is pointing to the risks of a more profound decline, Glassnode notes. The total volume of bets on put options has reached 67.6%.

The volume of realised losses on Bitcoin has reached levels last seen during the collapse of the FTX crypto exchange, Glassnode notes. Experts have called this a sign of capitulation — a cleansing of the market of ‘weak hands’.

The market is entering the final phase of seller exhaustion, according to Swissblock. Bitcoin will remain under pressure unless there is a significant recovery in institutional or retail demand, according to an EgyHash analyst.

Fed Governor Christopher Waller signaled clear support for a December rate cut, saying most private-sector and anecdotal data since the last FOMC meeting show little improvement in economic conditions. He noted that the labor market “is soft” and “continuing to weaken,” with inflation expected to ease, creating an environment where another cut next month is appropriate.

Waller said the January meeting presents more uncertainty, as the Fed will receive a “flood of data” that had been delayed by the government shutdown. If those releases align with recent trends—softening labor conditions and moderating inflation—then a case for another cut could be made. "But if it suddenly shows a rebound in inflation or jobs or the ⁠economy's taking off, then it might give concern,"‌" he added.

Beyond policy, Waller confirmed he met recently with Treasury Secretary Scott Bessent to discuss his potential nomination as the next Fed Chair, as the Trump administration moves to select a successor to Jerome Powell. Waller said the meeting went “great,” and argued that the administration is seeking someone with “merit, experience, and knows what they are doing,” adding, “I think I fit that.”

Powell’s term ends in May, leaving a narrow window for the White House to finalize its choice.

• The eurozone economy is stable, and Ukraine’s de-escalation is helping EURUSD.
• The Fed may still cut rates in December, and Japan has announced fiscal stimulus measures.

As ECB President Christine Lagarde said, Europe’s vulnerabilities are linked to a growth model focused on a world that is gradually disappearing. The Ukrainian military conflict and trade wars have worked against the euro. However, there are positive developments in both areas, allowing us to look to the future of the regional currency with optimism.

The latest statistics on European business activity indicate the eurozone’s resilience to tariffs, and there are signs of accelerating GDP growth in the final quarter of the year. In 2026, Germany’s fiscal stimulus and EU defence spending are expected to support the economy. The markets see the plan presented by the US and Russia as a step forward towards ending the war in Ukraine, which supports hopes for a recovery in the EURUSD uptrend.

The picture is different in the US. The lack of data makes it hard to be sure about the future. A leading indicator from the Federal Reserve Bank of Atlanta signals an acceleration in GDP from 3.8% to 4.2% in the third quarter. Experts at the Wall Street Journal say it will slow to 3%. However, due to the shutdown, high tariffs, and the White House’s anti-immigration policy, fourth-quarter figures may deteriorate sharply.

Unsurprisingly, New York Fed President John Williams argues that the federal funds rate could be cut in the near future. The futures market reacted by increasing the chances of monetary policy easing in December to 71% from a modest 28% after the publication of the minutes of the October FOMC meeting.

The return of the topic of rate cuts has dealt a blow to the dollar. EURUSD is rushing into battle, and even USDJPY has fallen below key support at 156.7. The principle of ‘buy the rumour, sell the fact’ has come to the aid of the bears. For a long time, the pair rose on expectations of fiscal stimulus from Sanae Takaichi. The stimulus package amounted to ¥17.7 trillion, which was more than the ¥14-15 trillion expected by investment banks. However, this figure was enough for investors to begin taking profits on their short yen positions.

The USD/JPY pair is trading firmly around 156.56 on Monday, keeping the Japanese yen in a deeply weak position. Markets remain on high alert as they assess a chorus of verbal interventions from Japanese officials aimed at stemming the decline of the national currency.

The warnings intensified on Sunday when Takuji Aida, an adviser to Prime Minister Sanae Takaichi, stated that Tokyo is prepared to intervene directly in the currency market if the yen's weakness begins to inflict significant harm on the economy.

This follows similar expressions of concern from Bank of Japan Governor Kazuo Ueda and Finance Minister Satsuki Katayama last week. Their comments have significantly heightened expectations of potential market intervention, with many analysts identifying the 160.00 level as a critical line in the sand, recalling that this zone prompted official action during previous episodes of yen weakness.

The yen's sell-off, which drove it to a ten-month low last week, was initially triggered by the new cabinet's substantial stimulus package. The plan raised alarms over Japan's fiscal health, while the administration's continued insistence on ultra-loose monetary policy has provided a fundamental backdrop for further currency depreciation.

Technical Analysis: USD/JPY

H4 Chart:

On the H4 chart, USD/JPY completed its first downward impulse to 156.19 and is now forming a consolidation range around 156.55. An upward breakout from this range is expected to trigger a corrective rally towards 157.15. Following this correction, we anticipate the resumption of the bearish move, initiating a new downward impulse with an initial target at 154.00. A break below this level would open the path for a deeper correction towards 153.30. This scenario is technically supported by the MACD indicator. Its signal line is above zero but is pointing decisively downward, suggesting that while the pair is correcting from overbought conditions, the underlying momentum is shifting bearish.

H1 Chart:

On the H1 chart, the pair completed a downward wave to 156.20. We are now observing a corrective phase for this move, with an initial target set at 157.13. Upon completion of this upward correction, we expect the next leg of the downtrend to develop, targeting 154.44. The Stochastic oscillator confirms this near-term view. Its signal line is above 50 and rising towards 80, indicating that short-term buying pressure is driving the correction before the larger bearish trend reasserts itself.

Conclusion

The yen remains caught between fundamental pressures from domestic policy and escalating verbal intervention from authorities. Technically, the USD/JPY pair is completing a corrective bounce within a newly established short-term downtrend. While a rise towards 157.15 is likely in the near term, this should be viewed as a corrective move within a broader bearish structure that targets a decline towards 154.00 and potentially 153.30. All eyes remain on the 160.00 level, widely viewed as the threshold for potential official intervention.

Germany’s business mood softened in November as the Ifo Business Climate Index edged down to 88.1 from 88.4, missing expectations of 88.5. The decline was driven mainly by weaker expectations, which dropped from 91.6 to 90.6. Assessment of current conditions improved slightly from 85.3 to 85.6.

Sector details remained broadly negative. Manufacturing slipped further from -12.1 to -12.5, reflecting sustained weakness in global demand and the lingering impact of U.S. tariff. Services eased from 2.9 to 2.6, hinting at a moderation in domestic resilience. Trade deteriorated from -20.4 to -21.4 and construction fell from -14.4 to -15.7. Together, these readings signal a still-fragile backdrop with limited catalysts for improvement heading into year-end.

Ifo noted that sentiment among German firms has deteriorated as companies grow more pessimistic about the medium-term outlook. While current conditions improved slightly, businesses “have little faith that a recovery is coming anytime soon.”

Full Germany's Ifo release here.

As the chart of the US Dollar Index (DXY) shows, today the value is sitting near an important resistance level around 100.20 points. We highlighted this level earlier — including in our analytical post from 10 November.

Fluctuations in the USD against other currencies are forming a configuration of two channels:

→ A blue bullish trajectory that began back in September. However, this resistance level appears to be a significant obstacle. Last week, the bulls attempted to push the DXY to a six-month high, but they failed to hold those gains.

→ A red alternative bearish trajectory, which may become more pronounced and relevant if the bears seize the initiative once it becomes clear that the bulls are running out of steam.

At the start of the week, the index is also moving within a narrowing triangle — the breakout direction may indicate the key trend into the year-end.

The balance between the two scenarios will largely depend on the fundamental backdrop, with traders mainly focusing on:

→ News related to the prospects of a Federal Reserve rate cut. Barclays analysts expect the Fed to cut rates in December.

→ A possible intervention by the Bank of Japan to support the weakened yen, which has come under pressure due to low domestic interest rates. Japan’s Finance Minister, Satsuki Katayama, reinforced this rhetoric last week.

→ The release of data — including US retail sales and producer prices — which were postponed due to the record-long government shutdown.

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GBP/USD is attempting a recovery wave from 1.3035. USD/CAD is showing positive signs and might aim for more gains above 1.4130.

Important Takeaways for GBP/USD and USD/CAD Analysis Today

• The British Pound started a recovery wave above 1.3050 and 1.3080.
• There is a key bearish trend line forming with resistance near 1.3110 on the hourly chart of GBP/USD at FXOpen.
• USD/CAD rallied above 1.4000 and 1.4050 before the bears appeared.
• There is a connecting bullish trend line forming with support at 1.4085 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a fresh decline from 1.3220 after a decent increase. The British pound fell below 1.3150, re-entering a short-term bearish zone against the US dollar.

The pair even traded below 1.3050 and the 50-hour simple moving average. Finally, the bulls appeared near 1.3035. A low was formed near 1.3037 and the pair is now attempting a short-term recovery wave.

There was a fresh upside above 1.3050 and the 23.6% Fib retracement level of the downward move from the 1.3215 swing high to the 1.3037 low. The pair is now showing positive signs above 1.3080. Immediate resistance is near a bearish trend line at 1.3110.

The first major hurdle for the bulls on the GBP/USD chart is 1.3125 and the 50% Fib retracement. A close above 1.3125 might spark a decent increase. The next stop for the bulls might be 1.3175. Any more gains could lead the pair toward 1.3215 in the near term.

Initial support sits near the 50-hour simple moving average at 1.3080. The next key area of interest might be 1.3035, below which there is a risk of another sharp decline. In the stated case, the pair could drop toward 1.2965.

USD/CAD Technical Analysis

On the hourly chart of USD/CAD at FXOpen, the pair formed a strong support base above the 1.3970 level. The US Dollar started a fresh increase above 1.4000 against the Canadian Dollar.

The pair cleared the 50-hour simple moving average and climbed above 1.4050. Finally, it tested the 1.4130 zone before the bears appeared. The pair traded below the 23.6% Fib retracement level of the upward move from the 1.3971 swing low to the 1.4130 high.

Initial support is near a connecting bullish trend line at 1.4085 and the 50-hour simple moving average. A downside break below the trend line might send the pair toward 1.4050.

The next major area on the USD/CAD chart could be the 76.4% Fib retracement at 1.4010. A close below 1.4010 could push the pair further lower. In the stated case, the bears might aim for a test of 1.3970.

On the upside, initial resistance sits near 1.4105. The main breakout zone could be 1.4130. A clear upside break above 1.4130 could start another steady increase. The next major stop for the bulls might be 1.4200. Any more gains could open the doors for a test of 1.4250.

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Markets

Dip buyers emerged on stock markets as key indices tested crucial support levels (combination of October lows & 100d moving average; both for the likes of EuroStoxx50 and S&P 500/Nasdaq). We must add that breathing space above those crucial levels remains extremely thin for the moment. One spark could suffice in flipping the balance again. Apart from technical consideration, Ukrainian peace talks (probably unacceptable at current terms, but starting point for negotiations), November US PMI’s (composite 55 from 54.8 vs 54.6 expected) and NY Fed Williams comments offered some comfort. Flash PMI’s signaled faster economic growth, but price pressures also intensified. Input costs rose at one of the fastest rates seen over the past three years, driving a re-acceleration of selling price inflation. Higher costs and prices were again commonly attributed to tariffs. The pace of job creation meanwhile remained only modest, principally due to cost concerns. The upturn was driven by the largest increase in new orders received by businesses since last December (and the second greatest gain since April 2022), indicating a second successive monthly improvement in demand growth. October and November survey data are consistent with the economy expanding at a 2.5% annualized rate in Q4, pointing to robust and resilient economic growth as we head into the year end. NY Fed Williams sees room for a rate cut in the near term, boosting December rate cut bets (our preferred scenario) again to 65%. The US yield curve showed a modest bull steepening with yields 2.5 bps to 1 bp lower on the day. The (trade-weighted) dollar’s attempt to take out first resistance failed, but the greenback keeps pushing against the 100.25-area this morning. EUR/USD currently changes hands at 1.1520 but is at risk of reverting back to the 1.1392 August bottom.

Risk sentiment on Asian stock markets is generally constructive this morning with Japanese markets closed for Labor Thanksgiving Day. Today’s eco calendar is thin with only German Ifo Business sentiment. Key themes in this holiday-shortened US week (Thanksgiving on Thursday) are the US-brokered peace talks in Ukraine (Thursday as a first deadline; gas prices drop to lowest level since May 2024 this morning), general risk sentiment, tomorrow’s eco data (retail sales & consumer confidence) and UK Chancellor Reeves’ budget on Wednesday. We also eye the faith of Belgian OLO’s vs French OAT’s this morning. Belgian PM De Wever announced a multi-year federal budget this morning, details of which are still unravelling. French lawmakers on the other hand have rejected a first draft of the 2026 budget.

News & Views

Rating Agency Moody’s on Friday upgraded Italy’s credit rating from Baa3 to Baa2 (stable outlook). The upgrade reflects a consistent track-record of political and policy stability which enhances the effectiveness of economic and fiscal reforms and investment implemented under the National Recovery and Resilience plan. The rating upgrade also points to the prospect of further policy actions supporting growth and fiscal consolidation beyond the plan’s deadline in August next year. With respect to the fiscal outlook, Moody’s indicates that tax collation has been improving, as tax revenue outpaced nominal GDP growth since 2021. In an environment of political and policy stability, the rating agency expect the government to be able to continue fiscal consolidation through revenue and expenditure measures. Rising primary surpluses are expected to support a gradual decline in the government debt ratio from 2027. Debt is expected to decline to just above 130% of GDP by 2034 from an estimated 136.5% for 2025. Even so, the agency still sees debt to remain high and debt affordability will gradually weaken as higher interest rates translate in higher refinancing costs.

According to the people familiar with the matter, the Reserve Bank of India (RBI) this morning intervened in the currency market. The action of the RBI came after a sharp decline of the Indian currency on Friday, pushing it to a new record low against the dollar near USD/INR 89.5. According to sources, the RBI sold dollars overseas and on the local market. The country’s trade deficit recently rose as exports to the US dropped sharply after the US imposed tariffs of 50% on the countries imports to the US. A further weakening of the rupee contains the risk of further capital outflows and over time raises inflationary risks via higher import prices.