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Daily Pivots: (S1) 195.79; (P) 196.55; (R1) 197.34; More...

Intraday bias in GBP/JPY remains neutral at this point. As noted before, corrective pattern from 180.00 is extending with another rising leg. Further rise is expected as long as 194.04 support holds. On the upside, above 1999.79 will will target channel resistance (now at 203.19).

In the bigger picture, price actions from 208.09 are seen as a correction to whole rally from 123.94 (2020 low). The range of consolidation should be set between 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09. However, decisive break of 175.94 will argue that deeper correction is underway.

Daily Pivots: (S1) 162.42; (P) 163.04; (R1) 163.73; More...

Intraday bias in EUR/JPY stays on the upside for the moment. Corrective pattern from 154.04 is extending with another rising leg. Further rise should be seen to 166.67 resistance next. For now, risk will stay on the upside as long as 159.79 support holds, in case of retreat.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). The range of consolidation should have been set between 38.2% retracement of 114.42 to 175.41 at 152.11 and 175.41 high. However, decisive break of 152.11 would argue that deeper correction is underway.

Daily Pivots: (S1) 0.8276; (P) 0.8294; (R1) 0.8318; More...

Intraday bias in EUR/GBP stays neutral for the moment and more consolidations would be seen.. On the upside, break of 0.8326 resistance will indicate short term bottoming, at 0.8221, ahead of 0.8201 key support, on bullish convergence condition in 4H MACD. Intraday bias will be turned back to the upside for 0.8446 structural resistance next.

In the bigger picture, focus is now on whether 0.8201 key support (2022 low) is strong enough to complete the whole down trend from 0.9267 (2022 high). In any case, medium term outlook will be neutral at best until decisive break of 0.8624 key resistance. Otherwise, risk will stay on the downside even in case of strong rebound.

Daily Pivots: (S1) 1.6627; (P) 1.6661; (R1) 1.6717; More...

Intraday bias in EUR/AUD remains neutral as consolidations continue below 1.6712. Deeper retreat could be seen, but downside should be contained by 55 4H EMA (now at 1.6553. On the upside, break of 1.6712 will resume the rally from 1.5693 to retest 1.7180 high next.

In the bigger picture, EUR/AUD is holding on to 1.5996 key support despite brief breach. Larger up trend from 1.4281 (2022 low) is still in favor to resume through 1.7180 at a later stage. Nevertheless, sustained break of 1.5995 will indicate that such up trend has completed and deeper decline would be seen.

Daily Pivots: (S1) 0.9289; (P) 0.9311; (R1) 0.9336; More....

Intraday bias in EUR/CHF is turned neutral first with a temporary low formed at 0.9284. But outlook is unchanged that corrective rebound from 0.9204 should have completed with three waves up to 0.9417 already. Another fall is in favor and below 0.9284 will target 0.9254 support first. Break there will bring retest of 0.9204 low.

In the bigger picture, a medium term bottom is probably in place at 0.9204. More consolidations would be seen above there with risk of stronger rebound to 38.2% retracement of 0.9928 to 0.9204 at 0.9481. But outlook will remain bearish as long as 0.9481 holds and another fall through 0.9204 to resume larger down trend is in favor.

Last week was chaotic. The Federal Reserve’s (Fed) hawkish 25bp cut, the hint from the dot plot that there would be only two rate cuts next year instead of four – because the US economy is too strong to continue the cuts as previously predicted - and the US debt limit shenanigans even before Trump took office gave a negative jolt to the US stock markets. But happily, things got better from Friday on as a set of US PCE data came in softer than expected, and got some investors hoping that maybe – but just maybe – the Fed’s got too hawkish on inflation. Second, the US averted a government shutdown and politicians disregarded Trump / Musk’s demand for suspending the debt limit. The US government will continue to run until mid March, then we will see what happens to that debt limit under the Trump administration. My best guess is that the US will regularly continue to push the debt limit higher – or Trump will scrap something that didn’t make sense anyway. In practice, nothing will change. The US debt will continue to grow, and as per inflation, I think that those who got their hopes up with one set of inflation data will be disappointed.

As a result, the US yields should continue to push higher regardless of how dovish the Fed tries to be. Note that the US 10-year yield advanced up to 100bp since the Fed started cutting the interest rates – and cut 100bp in three meetings. At least half of the cuts were unnecessary, and that’s why, not only did yields continue climbing as the Fed cut rates, but the possibility of a further rise in the 10-year yield toward 5% remains on the table—and that’s not necessarily good news for risk assets.

But anyway, Friday’s session saw a certain relief – at least in the US – because the mood in Europe was not great at all after Novo Nordisk slumped more than 20% at the open as their latest weight loss drug made patients lose less weight than the company had predicted. But across the Atlantic, the S&P500 rebounded more than 1% on Friday, while Nasdaq added 0.85%. The US yields were little changed but the US dollar retreated from more than 2-year highs.

In the absence of major economic data, this Xmas-shortened week could see a further rebound in the US equities – no one wants to miss the Santa rally – and a further retreat in the US dollar in favour of its major counterparts. Yet, beyond tactical trades based on last week’s softer-than-expected PCE measures, the story remains unchanged. The core PCE in the US has been moving up since the summer dip and settled at 2.8% for the second consecutive month, and – I can never repeat this enough but – Trump’s pro-growth policies, tariffs, mass deportations hint that the US inflation risks are tilted toward the upside.

As such, the US Dollar pullbacks could be interesting opportunities to buy the dips. The EURUSD could see resistance between 1.05/1.0545 area – a psychological level and the minor 23.6% Fibonacci retracement on September to December rally. Cable should see limited upside potential within 1.27/1.2720 area. The USDJPY’s way is cleared for a further advance to 160, until the yen bears get scared that the Japanese authorities will intervene directly in the FX markets to stop bleeding. The Bank of Japan (BoJ) will unlikely to make any changes to their policy until March, April next year. This is when the policymakers think that they will have a clearer view on the potential and the impact of Trump’s international policies. In Canada, the Loonie takes a breather on the back of a broadly softer US dollar but the political shenanigans keep the risks tilted toward the upside in the USDCAD as calls for Trudeau to step down are mounting. And finally, the AUDUSD forms support near the 62 cents level. The pair is oversold, but buying the Aussie looks similar to try to catch a falling knife since September.

In commodities, US crude is better bid above the 50-DMA – few cents below the $70pb level – but without a strong conviction to extend this rebound, the price rallies will likely see resistance into the 100-DMA – near $71.40pb and declining – and into $72.85pb, the major 38.2% Fibonacci retracement on late summer slump that should distinguish between the negative trend since then, and a medium term bullish reversal. The ongoing narrative of weak – and weakening - global demand and ample global supply should maintain oil prices in the bearish consolidation zone for now, with however a limited downside potential near the $67pb level.

In precious metals, gold is better bid this morning. Lately, the yellow metal has been pressured by the rising US yields that increase the opportunity cost of holding the non-interest-bearing gold - but an accelerated selloff in global equities could drive capital into the safe-haven metal regardless of the upswing in yields.

Daily Pivots: (S1) 1.0365; (P) 1.0407; (R1) 1.0470; More....

Intraday bias in EUR/USD remains neutral first and more consolidations could be seen. 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.

Daily Pivots: (S1) 155.64; (P) 156.78; (R1) 157.61; More...

Intraday bias in USD/JPY remains neutral as consolidations continues below 157.91 temporary top. Deeper pull back cannot be ruled out, but outlook will stay bullish as long as 153.15 support holds. On the upside, break of 157.91 will resume the rally from 139.57 to 61.8% projection of 139.57 to 156.74 from 148.64 at 159.25 next.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low). The range of medium term consolidation should be set between 38.2% retracement of 102.58 to 161.94 at 139.26 and 161.94. Nevertheless, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 1.2491; (P) 1.2553; (R1) 1.2630; More...

Intraday bias in GBP/USD remains neutral and more consolidations would be seen above 1.2474 temporary low. Outlook will stay bearish as long as 1.2810 resistance holds. On the downside, break of 1.2474 will resume the fall from 1.3433 to 1.2298 cluster support zone.

In the bigger picture, price actions from 1.3433 medium term are seen as correcting whole up trend from 1.0351 (2022 low). Deeper decline could be seen to 38.2% retracement of 1.0351 to 1.3433 at 1.2256, which is close to 1.2298 structural support. But strong support is expected there to bring rebound to extend the corrective pattern.

Daily Pivots: (S1) 0.8898; (P) 0.8946; (R1) 0.8979; More…

USD/CHF is staying in consolidation below 0.9020 temporary top and intraday bias stays neutral. While deeper pull back might be seen, downside should be contained above 0.8735 support to bring another rally. Above 0.9020 will resume the rise from 0.8374 and target 61.8% projection of 0.8374 to 0.8956 from 0.8735 at 0.9095.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with rise from 0.8374 as the third leg. Overall outlook will continue to stay bearish as long as 0.9223 resistance holds. Break of 0.8332 low is in favor at a later stage when the consolidation completes.