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Daily Pivots: (S1) 1.3477; (P) 1.3502; (R1) 1.3527; More...

Intraday bias in GBP/USD stays neutral and more consolidations could be seen below 1.3533 temporary top. Deeper retreat cannot be ruled out. But further rally is expected as long as 1.3356 support holds. Above 1.3533 will resume the rally from 1.3008 to retest 1.3787 high.

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) 155.97; (P) 156.35; (R1) 156.95; More...

Intraday bias in USD/JPY remains neutral as consolidation continues below 157.88. With 154.33 support intact, outlook remains bullish. On the upside, 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.

Daily Pivots: (S1) 0.7868; (P) 0.7886; (R1) 0.7914; More….

Intraday bias in USD/CHF remains neutral and more consolidations would be seen above 0.78670 temporary low. While stronger recovery cannot be ruled out, further fall is expected as long as 0.7986 resistance holds. Break of 0.7860 will target 0.7828 low. Decisive break there will confirm larger down trend resumption.

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.

There is little on the economic calendar for the final week of the year, leaving Fed minutes from the December meeting as the lone focal point for markets during the New Year holiday stretch. The minutes are expected to shed light on the internal debate that produced a rare three-way split. Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid both voted to hold rates steady. At the opposite extreme, ultra-dove Governor Stephen Miran dissented in favor of a larger 50bp cut. The remaining policymakers backed the consensus move, delivering a 25bp reduction that lowered the target range to 3.50–3.75%.

The accompanying statement tweak was just as important as the vote itself. By implying a higher hurdle for additional cuts, the Fed effectively endorsed market pricing for a January hold, even as longer-term expectations remain unsettled. That uncertainty is evident in futures markets, where odds of a March cut hover around 50%.+

Meanwhile, the dot plot exposed just how divided the committee remains. Excluding Miran, policymakers were almost evenly split, with four projecting one cut in 2025 and seven seeing no cuts at all—including scenarios involving renewed tightening. At the same time, seven officials penciled in two or more cuts in 2026. This wide dispersion suggests it will take a meaningful shift in data to pull expectations decisively away from the median one-cut outlook.

With that backdrop, it is premature to draw firm conclusions, at least not before the December non-farm payrolls report on January 9, which is likely to be the next genuine catalyst for repricing Fed expectations.

Attention is also firmly on geopolitics. US President Donald Trump said talks with Ukrainian President Volodymyr Zelenskyy were “getting very close” to a peace agreement, though he acknowledged major unresolved issues, including the fate of the Donbas region. Security guarantees also remain another sticking point. Zelenskyy said agreement had been reached in principle, while Trump was more cautious, suggesting Europe would need to shoulder much of the responsibility with US backing. Zelenskyy later said he had requested security guarantees lasting up to 50 years and that any peace deal should be put to a referendum during a 60-day ceasefire.

In the currency markets, Yen is leading gains for the day so far, followed by Dollar and Euro. While Kiwi, Aussie, and Loonie lag, and Sterling and Swiss Franc trade near the middle of the pack.

In Europe, at the time of writing, FTSE is down -0.01%. DAX is down -0.10%. CAC is up 0.09%. UK 10-year yield is down -0.09 at 4.495. Germany 10-year yield is down -0.021 at 2.845. Earlier in Asia, Nikkei fell -0.44%. Hong Kong HSI fell -0.71%. Chian Shanghai SSE rose 0.04%. Singapore Strait Times fell -0.05%. Japan 10-year JGB yield rose 0.017 to 2.058.

BoJ opinions suggests series of hikes as neutral rate remains distant

The latest Summary of Opinions from the BoJ's December 18–19 meeting reinforced a clear tightening bias, with many policymakers arguing that the December rate hike should not mark the end of the cycle.

One opinion noted there was “still considerable distance” to neutral levels, explicitly calling for rate hikes at "intervals of a few months". Another linked Yen weakness and rising long-term yields partly to the policy rate being too low relative to inflation, suggesting delayed normalization risks exacerbating financial distortions.

Inflation concerns featured prominently throughout the discussion. Several members described recent price pressures as “sticky”. One opinion highlighted spring wage negotiations as a key test, arguing that a third consecutive year of target-consistent wage growth would confirm underlying inflation has reached 2%.

Still, not all voices favored an aggressive path. Some policymakers urged caution, citing uncertainty around the neutral rate and shifting global rate environments. They argued flexibility should take precedence over targeting a specific policy level.

At the meeting, the BoJ raised its policy rate to a 30-year high of 0.75%.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.7868; (P) 0.7886; (R1) 0.7914; More….

Intraday bias in USD/CHF remains neutral and more consolidations would be seen above 0.78670 temporary low. While stronger recovery cannot be ruled out, further fall is expected as long as 0.7986 resistance holds. Break of 0.7860 will target 0.7828 low. Decisive break there will confirm larger down trend resumption.

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.

As indicated by the S&P 500 index chart (US SPX 500 mini on FXOpen):

→ After breaking above the resistance line (shown in red) in the third week of December, the equity market formed an upward trend, consistent with the typical characteristics of the Santa Claus Rally.

→ At the opening of trading in the final week of the year, the market is showing downward momentum. The index has slipped towards the 6,920 area, reflecting the sentiment of remaining market participants ahead of key news releases: the FOMC meeting minutes on 30 December and US labour market data on 31 December.

Technical Analysis of the S&P 500 Chart

Price action analysis points to a lack of conviction among bulls. After breaking above the 11 December high near the 6,934 level, further progress was limited, with the price failing to show signs of firm consolidation at record highs.

At the same time, bears became more active, as evidenced by the long upper shadow (marked by the arrow). Their pressure proved effective, resulting in a break below the median line of the ascending channel.

It cannot be ruled out that bearish momentum will continue, pushing the S&P 500 index (US SPX 500 mini on FXOpen) down towards a support zone formed by:

→ the psychological 6,900 level and the 24 December low near 6,907;

→ the lower boundary of the Santa Claus Rally ascending channel.

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At first glance, the US economy’s sharp acceleration in Q3 - with GDP growth exceeding 4% year-on-year - appears to decisively counter narratives of an economic slowdown. Yet the muted reaction in bond markets tells a different story. Yields have barely budged, and the yield curve continues to flatten in a pattern consistent with a “bull steepening” environment.

It seems strong growth figures are being largely dismissed. This is not the first time in recent years that robust GDP data have failed to impress the market. The explanation lies in the composition of growth. A significant portion stemmed from distortions in foreign trade: after a surge in imports earlier this year - driven by front-loaded demand ahead of anticipated tariffs - a subsequent sharp decline mechanically boosted GDP in Q2 and Q3.

Furthermore, it is worth noting that nearly 50% of private consumption is attributed to the top 10% of households, highlighting the uneven nature of domestic demand.

When adjusted for these temporary and structural factors, underlying growth appears far more moderate - closer to 2–2.5%. Key indicators such as income, employment, and business investment outside select AI-related projects do not support an “overheated” economy. This helps explain sustained investor interest in gold, particularly with inflation metrics still hovering above the Federal Reserve’s target.

Technical Analysis: XAU/USD

H4 Chart:

On the H4 chart, XAU/USD completed a fifth-wave advance to 4,550 USD, followed by a downward impulse to 4,474 USD and a corrective bounce to 4,525 USD. The market is now forming another bearish impulse toward 4,422 USD. A subsequent corrective rebound to retest 4,474 USD from below is anticipated, before a potential decline toward 4,360 USD.

The MACD indicator supports this near-term bearish outlook, with its signal line at elevated levels above zero but beginning to turn lower.

H1 Chart:

On the H1 chart, the pair broke below 4,474 USD and has consolidated around this level. A resumption of the decline is expected toward 4,432 USD, where some profit-taking could prompt a corrective rebound back toward 4,474 USD. Once complete, downward momentum is likely to resume, targeting 4,404 USD.

The Stochastic oscillator aligns with this view, with its signal line below 50 and descending toward 20, reflecting persistent selling pressure.

Conclusion

Gold’s resilience in the face of ostensibly strong US growth figures underscores investor skepticism about the sustainability and breadth of the economic expansion. With underlying momentum appearing more modest and inflation still elevated, demand for gold as a hedge remains intact. Technically, the metal is undergoing a corrective phase, with near-term targets near 4,422–4,404 USD. A deeper pullback toward 4,360 USD cannot be ruled out, though such a move may ultimately present a buying opportunity given the supportive macro backdrop.

Christmas week turned out to be the worst for the US dollar since June. Falling Treasury yields and new S&P 500 records caused the USD index to retreat. The chances of the Fed easing monetary policy in March rose above 50% again, and there is active discussion in Forex about the new Fed chair. Historically, central bank chiefs have had a significant influence on the FOMC. Donald Trump's man could bring down interest rates and the greenback.

However, the Fed is not a one-man show. Decisions are made collectively based on incoming data. The longer the pause in the monetary expansion cycle lasts, the higher the chances of a correction in the EURUSD to an upward trend. In this case, the yield differential between US and German bonds will remain wide. Money will flow from Europe to the United States, strengthening the dollar.

In the medium term, monetary policy divergence and a narrowing gap in GDP growth could play in favour of the euro. Financial Times experts expect the eurozone economy to expand by 1.2% in 2026 and 1.4% in 2027. In 2025, it will grow by 1.4%, significantly more than the 0.9% forecast at the end of 2024. Faster economic growth in the currency bloc has been one of the key drivers of the EURUSD's 13.5% rally this year.

Another trump card for the euro has been the divergence in monetary policy. Financial Times experts believe that the ECB's deposit rate will remain at 2% until the end of 2026 and rise to 2.25% in 2027. The futures market expects two acts of monetary expansion from the Fed next year. The narrowing of the spread between US and German bond yields is a strong argument in favour of maintaining the upward trend in EURUSD.

Meanwhile, the number of yen bears is growing after the Bank of Japan failed to bring about a serious correction in USDJPY by raising the overnight rate in December. BNP Paribas forecasts the pair to rise to 160 by the end of 2026, while JP Morgan forecasts 164.

The strengthening of the greenback has caused gold to retreat from record highs. The precious metal is heading for its best annual performance since 1979. Since the beginning of the year, it has risen by more than 70%, partly due to capital inflows into ETFs. The reserves of the largest specialised exchange-traded fund, SPDR Gold Shares, have increased by more than 20%.

As the XAG/USD chart shows, earlier this morning the price of one ounce of silver reached above $83 for the first time. However, this move was followed by an abnormally sharp reversal to the downside.

Why Did the Silver Price Fall?

On 24 December, we not only outlined the fundamental backdrop but also highlighted that the market was vulnerable to sharp price movements due to reduced liquidity during the holiday period.

Now, as the ATR indicator has surged sharply higher—confirming our assumption—it is worth examining the key chart details that point to emerging bearish signals.

Technical Analysis of the XAG/USD Chart

The previously constructed ascending channel (highlighted in orange) has retained its slope, while the following developments occurred:

→ The silver price surge on 26 December (marked by the arrow), with a bullish gap, doubled the ascending channel.

→ At the open of today’s trading session, the price broke above the upper boundary with another bullish gap (marked by the second arrow).

It is important to note that:

→ The sharp surge in silver prices towards a historic high may have been driven by a shortage of seller liquidity at the opening of financial markets during the final week of the year.

→ The aggressive nature of the subsequent decline towards $75 appears to be a clear sign of a shift in market sentiment.

→ Wide candlesticks indicate heightened activity from so-called “smart money”.

Taking the above into account, we can assume that large long-position holders are actively locking in profits after silver prices have risen by approximately 160% since the beginning of 2025. If this hypothesis proves correct, a break below the lower boundary of the orange ascending channel may follow, potentially leading to further downside movement as early as the first days of 2026.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Daily Pivots: (S1) 1.1757; (P) 1.1777; (R1) 1.1792; More….

No change in EUR/USD's outlook and intraday bias stays neutral. Further rally is in favor as long as 1.1702 support holds. Break of 1.1807 will resume the rise from 1.1467 to retest 1.1917 high. However, firm break of 1.1702 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 1.1386) 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) 155.97; (P) 156.35; (R1) 156.95; More...

USD/JPY's consolidations from 157.88 is extending and intraday bias stays neutral. With 154.33 support intact, outlook remains bullish. On the upside, 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.