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USD/CHF stayed in tight range above 0.7923 last week and outlook is unchanged. Overall, corrective pattern from 0.7828 could extend further. On the downside, below 0.7923 will target 0.7877 support. On the upside, though, break of 0.7990 support turned resistance will bring stronger rebound towards 0.8084.

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.

In the long term picture, price action from 0.7065 (2011 low) are seen as a corrective pattern to the multi-decade down trend from 1.8305 (2000 high). It's uncertain if the fall from 1.0342 is the second leg of the pattern, or resumption of the downtrend. But in either case, outlook will stay bearish as long as 0.8756 support turned resistance holds (2021 low). Retest of 0.7065 should be seen next.

AUD/USD gyrated lower last week as consolidations from 0.6685 continues but outlook is unchanged. Further rally is expected for now. Decisive break of 0.6706 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. However, sustained break of 55 D EMA (now at 0.6561) will extend the corrective pattern from 0.6706 with another falling leg back to 0.6420 support.

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.

In the long term picture, fall from 0.8006 is seen as the second leg of the corrective pattern from 0.5506 long term bottom (2020 low). Hence, in case of deeper decline, strong support should emerge above 0.5506 to contain downside to bring reversal. On the upside, firm break of 0.6941 will argue that the third leg has already started back to 0.8006 and above.

USD/CAD edged lower to 1.3728 last week but recovered after drawing support from 61.8% retracement of 1.3538 to 1.4139 at 1.3768. Initial bias stays neutral this week first. On the downside, sustained trading below 1.3768 will argue that whole decline form 1.4791 might be ready to resume, and bring retest of 1.3538 low next. However, break of 1.3870 resistance will indicate short term bottoming, and turn bias back to the upside for stronger rebound.

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.

In the long term picture, rising 55 M EMA (now at 1.3567) remains intact. Thus, up trend from 0.9056 (2007 low) should still be in progress. However, considering bearish divergence condition M MACD, sustained trading below 55 M EMA will argue that the up trend has completed with five waves up to 1.4791, and turn medium term outlook bearish for correction to 38.2% retracement of 0.9056 to 1.4791 at 1.2600.

GBP/JPY's up trend continued last week and there is no sign of topping yet. Initial bias stays on the upside this week for 61.8% projection of 184.35 to 205.30 from 199.04 at 211.98. Firm break there will target 100% projection at 219.99 next. Outlook will stay bullish as long as 206.74 support holds, in case of retreat.

In the bigger picture, up trend from 123.94 (2020 low) is in progress. Next target is 61.8% projection of 148.93 to 208.09 from 184.35 at 220.90. On the downside, break of 199.04 support is needed to indicate medium term topping. Otherwise, outlook will stay bullish even in case of deep pullback.

In the long term picture, up trend from 116.83 (2011 low) is resuming. Next target is 251.09 (2007 high). This will remain the favored case as long as 55 M EMA (now at 181.84) holds.

EUR/JPY's up trend continued last week and 4H MACD's break of falling trend line indicates upside re-acceleration. Initial bias stays on the upside this week for 186.31 long term projection level next. For now, outlook will stay bullish as long as 181.98 resistance turned support holds, in case of retreat.

In the bigger picture, up trend from 114.42 (2020 low) is in progress and should target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. Considering bearish divergence condition in D MACD, upside could be capped by 186.31 on first attempt. Still, outlook will stay bullish as long as 55 W EMA (now at 170.73) holds, even in case of deep pullback. Sustained break of 186.31 will pave the way to 100% projection at 205.81 next.

In the long term picture, up trend from 94.11 (2021 low) is in progress. Next target is 138.2% projection of 94.11 to 149.76 (2014 high) from 114.42 (2020 low) at 191.32. This will remain the favored case as long as 154.77 support holds.

EUR/GBP's recovery was limited below 0.8800 resistance last week and outlook is unchanged. Initial bias remains neutral this week and fall form 0.8863 short term top is in favor to continue. Break of 0.8720 will bring deeper fall to 0.8631 cluster support (38.2% retracement of 0.8221 to 0.8663 at 0.8618). However, on the upside, break of 0.8800 will argue that the fall has completed as a correction, and turn bias back to the upside for retesting 0.8863.

In the bigger picture, rise from 0.8221 medium term bottom is still seen as a corrective move. Upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Sustained trading below 55 W EMA (now at 0.8610) should confirm that this corrective bounce has completed. However, decisive break of 0.8867 will suggest that EUR/GBP is already reversing whole decline from 0.9267 (2022 high). That should pave the way back to 0.9267.

In the long term picture, price action from 0.9499 (2020 high) is seen as part of the long term range pattern from 0.9799 (2008 high). Range trading should continue between 0.8201 and 0.9499, until there is clear signal of imminent breakout.

EUR/AUD's strong rebound and breach of 55 D EMA (now at 1.7726) last week argues that fall from 1.8160 might have completed. But as a temporary top was formed at 1.7804, initial bias stays neutral first. On the upside, above 1.7804 will solidify this case and target 1.7976 resistance next. However, break of 1.7635 minor support will bring retest of 1.7477 low instead. Overall, corrective pattern from 1.8554 could extend further.

In the bigger picture, as long as 55 W EMA (now at 1.7468) holds, price actions from 1.8554 could still be a correction to rise from 1.5963 only. However, sustained break of the EMA will argue that it's already correcting the whole up trend from 1.4281 (2022 low). In this case, deeper decline would be seen to 38.2% retracement of 1.4281 to 1.8554 at 1.6922.

In the longer term picture, rise from 1.4281 is seen as the second leg of the pattern from 1.9799 (2020 high), which is part of the pattern from 2.1127 (2008 high). As long as 55 M EMA (now at 1.6585) holds, this second leg could still extend higher.

EUR/CHF gyrated lower last week and as fall from 0.9394 short term extended. Further decline is in favor this week. Sustained trading below 55 D EMA (now at 0.9317) will argue that rebound from 0.9178 has already completed. Deeper fall should then be seen back to retest this low. On the upside, however, break of 0.9366 resistance will resume the rebound through 0.9394 to 0.9452 structural resistance.

In the bigger picture, EUR/CHF has breached long term falling channel resistance as the rebound from 0.9278 extends. Considering bullish convergence condition in W MACD, sustained trading above 55 W EMA (now at 0.9317) will indicate medium term bottoming at 0.9178, and suggests that it's already in larger scale rebound. Further break of 0.9452 resistance will bring stronger medium term rally towards 0.9928 resistance next. Nevertheless, rejection by 55 W EMA will retain bearishness for another fall through 0.9178 at a later stage.

In the long term picture, overall long term down trend from 1.2004 (2018 high) is still in progress in EUR/CHF. Outlook will continue to stay bearish as long as falling 55 M EMA (now at 0.9785) holds.

Week in review

US stocks finished the week strong on Friday, recovering from a rocky start earlier in the week.

The rise was driven mostly by technology companies, which performed well enough to outweigh heavy losses in consumer stocks like Nike.

Big tech companies continued to gain value, following a surge of optimism sparked on Thursday when chipmaker Micron Technology released a very positive financial forecast. This renewed investor confidence in Artificial Intelligence (AI) stocks, which had recently been struggling due to worries that they were becoming too expensive.

Several specific companies saw major gains. Micron shares hit an all-time high, while Nvidia stock rose after news broke that the US government might allow the company to ship its advanced AI chips to China.

Oracle also saw its stock price jump after the owner of TikTok, ByteDance, signed a deal to hand over control of the app's U.S. operations to a group of investors that includes Oracle.

Source: LSEG

On the economic front, investors were relieved to see that consumer prices in November did not rise as much as feared. However, some experts warned that these numbers might be inaccurate because a 43-day government shutdown prevented the proper collection of data in October.

Despite this uncertainty, traders are betting that the Federal Reserve will cut interest rates at least twice next year, with a 20% chance that the first cut could happen as early as January.

The Bank of Japan (BoJ) hiked interest rates to 0.75%, the highest in three decades. This sets the stage for an interesting week ahead as Japanese traders will still be at their desks next week.

Wrapping Up 2025

Market participants may be looking forward to relax after a very chaotic year that began with Donald Trump returning to the White House.

Over the last twelve months, global politics have become unstable and a trade war has officially started. While the US dollar lost 9% of its value, gold prices had their best performance since 1979, and European weapons companies saw their value jump by 65%.

Global stock markets grew by $14 trillion, driven by an obsession with Artificial Intelligence and risky debt, even though government bond markets are nervous about budget issues.

At the same time, oil prices are near a ten-year low, Bitcoin has lost one-third of its value in the last three months, and cocoa is having its worst year ever.

After all this drama, it is definitely time for Market participants to take a break.

Source: LSEG

However, next week still brings some key events even if liquidity may prove thin. Let us take a look at what we can expect.

The Week Ahead - Shortened Week & Low Liquidity Environment

Even though the holiday season is approaching, the coming week will still be very busy for market participants. There are several major events to watch, ranging from the first report on how the US economy performed in the third quarter to new updates regarding the ongoing political conflict between the United States and Venezuela.

Asia Pacific Markets

In Japan, factory production is expected to drop, which will undo some of the progress made over the last two months. However, retail sales are still growing because people are earning higher wages. Experts believe that the data for November will not yet show any major damage caused by the recent decrease in tourists visiting from China.

After the Bank of Japan rate hike, on December 24, the BoJ will release minutes for its October meeting, at which it kept rates on hold shortly after new Prime Minister Sanae Takaichi took office. On December 25, BOJ Governor Kazuo Ueda will speak to Japan's business lobby, the Keidanren. He is expected to give clues on the path of interest rates during 2026.

Meanwhile, in China, most of the big economic reports for the year are already finished, so attention is turning to Saturday's decision on interest rates. I expect this to be uneventful, with the key lending rates likely remaining exactly where they are at 3.0% for one-year loans and 3.5% for five-year loans.

US Markets - Will GDP Data Validate the Fed Outlook?

Although the upcoming third-quarter economic growth report might not shake up the financial markets due to delays caused by the government shutdown, it raises some interesting questions.

If the report shows the economy grew by more than 3% for the second time in a row, many will wonder why the Federal Reserve cut interest rates three times in 2025. It seems unusual to cut rates when inflation is still higher than the 2% target, unemployment is low, and the stock market is at an all-time high.

The Federal Reserve defends these cuts as a safety measure to manage future risks. They argue that interest rates are still high enough to control the economy, and since recent taxes on imports didn't raise prices as much as feared, they are now more worried about protecting jobs.

Therefore, moving interest rates down toward 3% is seen as a smart move. The report is expected to show that investment in technology and spending by wealthy households are currently driving growth.

However, the economy is expected to slow down significantly to around 1% growth in the next quarter, largely due to the disruptions caused by the government shutdown.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Week - Silver (XAGUSD)

Silver has been on a tear with a breach of the $67/oz handle taking place on Friday.

This leaves Silver with a weekly gain of around the 8.5% mark and the rally just continues to gather pace.

It is very difficult to look at silver from a technical point of view given the lack of historical price action at these levels.

Optimism surrounding AI and electronics (where silver is used) contributes to the momentum while the soft US inflation data this week further fueled rate cut hopes for 2026.

Next to the upside the 70.00 handle may be a point to watch.

In terms of support, any pullback may find support at $64.50 (Previous breakout level) and $62.00.

Silver (XAG/USD) Four-Hour Chart, December 19, 2025

Source: TradingView.Com (click to enlarge)

Monday, Dec 22, 2025

Tuesday, Dec 23, 2025

Wednesday, Dec 24, 2025

Thursday, Dec 25, 2025

Friday, Dec 26, 2025

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