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Daily Pivots: (S1) 1.3250; (P) 1.3303; (R1) 1.3405; More...

Intraday in GBP/USD stays on the upside for 1.3470 resistance. Fall from 1.3787 could have completed as a correction at 1.3008. Firm break of 1.3470 will pave the way to retest 1.3725/3787 resistance zone. For now, risk will stay on the upside as long as 1.3718 support holds, in case of retreat.

In the bigger picture, the break of 55 W EMA (now at 1.3184) is taken as the first sign that corrective rise from 1.0351 (2022 low) has completed. Decisive break of trend line support (now at 1.2760) will solidify this case and target 38.2% retracement of 1.0351 to 1.3787 at 1.2474 next. Meanwhile, in case of another rise, strong resistance should emerge below 1.4248 (2021 high) to cap upside to preserve the long term down trend.

Daily Pivots: (S1) 0.7978; (P) 0.8010; (R1) 0.8028; More…

Intraday bias in USD/CHF remains neutral at this point. Outlook is unchanged that price actions from 0.7828 low is seen as a corrective pattern. On the upside, above 0.8070 will indicate that pattern is still extending, and turn bias back to the upside for 0.8123 and above. On the downside, below 0.7995 will bring deeper fall back towards 0.7877 support.

In the bigger picture, 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 any case, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low).

Daily Pivots: (S1) 1.3934; (P) 1.3955; (R1) 1.3972; More...

Intraday bias in USD/CAD stays neutral for the moment, and further fall remains in favor. Break of 1.3936 will target 38.2% retracement of 1.3538 to 1.4139 at 1.3909. Sustained break there will indicate that whole rise from 1.3538 has completed. Deeper fall should then be seen to 61.8% retracement at 1.3768 next. On the upside, though, break of 1.4013 resistance will retain near term bullishness, and bring retest of 1.4139 high.

In the bigger picture, price actions from 1.4791 medium term top is likely just unfolding as a correction to up trend from 1.2005 (2021 low), with rise from 1.3538 as the second leg. A third leg should follow before up trend resumption. That is, range trading is set to extend for the medium term. For now, this will remain the favored case as long as 1.3886 support holds. However, firm break of 1.3886 will revive the case that fall from 1.4791 is indeed a larger scale correction.

Dollar attempted a mild recovery in Asia today, but the uptick lacked conviction and failed to alter the broader picture of USD underperformance. The greenback remains the weakest major this week, with selling pressure intensifying after Wednesday’s sharp drop in ADP employment that reinforced concerns about labor-market deterioration.

Expectations for a 25bps Fed cut next week are now effectively locked in, with market pricing hovering near certainty. Friday’s PCE inflation release could matter in theory, but it won't meaningfully shift expectations or dissuade the Fed from delivering the December cut. Instead, attention is turning to what comes next, with November’s NFP and CPI—both arriving after the FOMC—likely to guide the early-2026 policy path.

A key emerging theme is political uncertainty around the Fed. Reports indicate that Kevin Hassett, President Trump’s top economic adviser, is being seriously considered as Powell’s successor. Hassett is well known for advocating lower interest rates and has supported Trump’s broader tariff and stimulus policies, raising questions about how independent the Fed’s next leadership might be.

The Financial Times reported that major bond investors have already voiced concerns to the Treasury over Hassett’s potential appointment. Several warned he may push for broad-based rate cuts even if inflation remains above the 2% target—raising fears of a more politically influenced Fed and a return to pro-cyclical policy. With Trump confirming he will announce his nominee early next year, the issue could become a market driver soon. While no decisive reaction has emerged yet, the next few weeks will be key in determining whether these fears become more fully priced into yields and USD positioning.

In the meantime, Dollar remains at the bottom of the weekly performance table, followed at a distance by Loonie and Swiss Franc. At the other end of the spectrum, Aussie thanks to hawkish RBA commentary, with Sterling and Kiwi close behind. Yen and Euro are sitting mid-pack, reflecting a broadly risk-on market tone that is helping higher-beta currencies outperform.

In Asia, Nikkei rose 2.33%. Hong Kong HSI rose 0.21%. China Shanghai SSE fell -0.04%. Singapore Strait Times fell -0.45%. Japan 10-year JGB yield rose 0.034 to 1.928, breaking above 1.9% mark. Overnight, DOW rose 0.86%. S&P 500 rose 0.30%. NASDAQ rose 0.17%. 10-year yield fell -0.029 to 4.057.

BoJ’s Ueda: Neutral rate uncertainty keeps BoJ guessing how far to tighten

BoJ Governor Kazuo Ueda told lawmakers today that Japan’s neutral interest rate remains highly uncertain, describing it as a concept that can only be estimated within a “quite wide range.” He noted that the central bank is attempting to narrow that range and may disclose updated estimates once confidence improves.

Ueda added that the lack of clarity around the neutral rate means the BoJ must operate without a firm sense of how much tightening is ultimately appropriate. This ambiguity, he said, leaves uncertainty around “how far we should raise interest rates,” even as policymakers consider more conventional policy settings after years of ultra-accommodation. Current BoJ estimates place the nominal neutral rate between 1% and 2.5%.

His comments come days after signaling that the BoJ will weigh the “pros and cons” of a rate hike at the upcoming December meeting, a remark markets interpreted as the strongest indication yet that a move to 0.75% is under consideration.

NZD/USD in bullish reversal? 0.5799 resistance holds key

NZD/USD extended its rebound from 0.5580 this week as the pair capitalized on a softer US Dollar, driven by the sharp deterioration in ADP employment data. The weak labor reading reinforced expectations of a December Fed rate cut, prompting another wave of USD selling across major pairs and giving the Kiwi room to advance. Underlying support also stems from the RBNZ’s hawkish cut last week, where policymakers signaled that the easing cycle has likely ended.

Technically, NZD/USD’s break above the 55 D EMA signals that the three-wave corrective decline from 0.6119 has likely completed at 0.5580. Momentum has clearly shifted to the upside, and the structure argues that the pair may now be in the early stages of a broader rally.

The next key hurdle is the 0.5799 support-turned-resistance. Sustained break above this level would further confirm bullish reversal and strengthen the view that the rise from 0.5580 represents the third leg of the larger pattern from 0.5484 low earlier this year.

That would also open the door through 0.6119 resistance, even if the advance from 0.5484 proves to be only a corrective rally within the broader downtrend from the 0.7463 (2021 high).

03

AUD/USD Daily Report

Daily Pivots: (S1) 0.6569; (P) 0.6586; (R1) 0.6619; More...

AUD/USD's rally from 0.6420 accelerates higher today and the solid break of 0.6579 resistance adds to the case that whole correction from 0.6706 has completed at 0.6420. Intraday bias stays on the upside for retesting 0.6709 and then 0.6713 key fibonacci level. For now, risk will stay on the upside as long as 0.6537 support holds, in case of retreat.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. Outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Break of 0.6413 support will suggest rejection by 0.6713 and solidify this bearish case. Nevertheless, considering bullish convergence condition in W MACD, sustained break of 0.6713 will be a strong sign of bullish trend reversal, and pave the way to 0.6941 structural resistance for confirmation.

The US economy lost 32’000 jobs in November. And no, it’s not AI’s fault. Small companies with fewer than 50 employees shed 120’000 jobs last month, according to the latest ADP report. Those losses outweighed gains in bigger companies. Overall, 32’000 people lost their jobs — the fourth negative print in the last six months. On average, the big and beautiful US economy has added fewer than 20’000 jobs per month over the past six months — a level comfortably pointing at recession.

Add to that the big companies, like Apple and Microsoft, planning headcount reductions — this time citing AI — and you get a pretty… amazing picture for the financial markets.

The job losses will push the Federal Reserve (Fed) toward faster and deeper rate cuts. And if, on top of that, people slow their spending because they’re out of work and inflation eases, that would be the cherry on top.

Odd, but that’s exactly how markets process information.

Yesterday was a typical “bad news is good news” session. You could see the cheery mood across US assets: job losses sent the 2-year Treasury yield below 3.50%, the probability of a 25bp cut in December rose to 90%, and the S&P 500 traded at 6’862 — just 58 points, or less than 1%, below its all-time high.

Interestingly, technology stocks — normally more sensitive to yields because much of their valuation is based on future revenue discounted to today — barely moved. The Magnificent Seven stayed stoic. Microsoft was busy denying a report from The Information claiming it lowered growth targets for AI software sales after many salespeople missed their goals last fiscal year. Investors read it as: “They’re not selling enough AI products, their targets are being lowered, and all these investments could be garbage.” Microsoft shares closed 2.5% lower. Nvidia lost 1% despite news that it could get approval to sell chips to China — if China is still willing to buy, which is no longer guaranteed.

Tesla, on the other hand, gained more than 4% — for reasons I can’t fully explain. Tesla sales are crashing in Europe, the company warned that UK sales are weakening, and Michael Burry called Tesla “ridiculously overvalued.” I agree. Tesla has become a massive meme stock, with a PE ratio near 300: you buy the share for around $446.74 as per yesterday’s close and earn roughly $1.50 per share. Expensive, yes — but some people like it. Plus, there was some non-EV-friendly news: Trump lowered climate goals, which sent Stellantis up almost 8% in Milan. Go figure why Tesla rallied.

Overall, the US session was solid. And the Japanese session was excellent, as a sale of 30-year government bonds drew the strongest demand since 2019 — at the current multi-decade high yield, near 3.40%. Given that pressure in JGBs has been a major risk to global risk appetite — even more so since the Bank of Japan (BoJ) head on Monday hinted at a possible rate hike this month — the rally in JGBs helped lift the Nikkei by 2%.

US futures, however, look mixed despite the rally in Asia. Nasdaq futures are slightly negative at the time of writing. Perhaps Morgan Stanley’s news that it is considering offloading some data-center exposure didn’t help. According to their calculations, the big cloud companies will spend around $3 trillion on data centers through 2028, but their cash flow can fund only half. Oracle’s CDS — now a barometer of AI-related risk — spiked to a 16-year high, hinting that appetite is fading.

Investors are awaiting tomorrow’s PCE numbers, which could further clear the path for rate cuts beyond December. At this pace of economic deterioration, the Fed may have little choice but to cut further. The question is whether softening Fed expectations will revive tech risk appetite, or if the rally will shift to non-tech and smaller companies. The Russell 2000, for example, rallied nearly 2% yesterday on the back of the weak ADP report. Fading AI enthusiasm due to high valuations, combined with lower yields, could push funds toward these companies.

In FX, the US dollar slipped below its 50-DMA and is testing a major Fibonacci support — if broken, it could enter a medium-term bearish zone. The broadly softening USD, on rising dovish Fed expectations, lifted the EURUSD above its 100-DMA. Europeans are unlikely to move rates next year, as inflation is around 2% and risks are two-sided. In Switzerland, zero inflation and strong demand for the franc continue to worry the Swiss National Bank (SNB), which doesn’t want to cut rates below zero. If the Fed cuts enough to lift global risk appetite, it could reduce the rush to Swiss francs.

A Fed cut is also positive for European stocks: lower US yields lift equities, and a stronger euro enhances returns in USD terms.

Elsewhere, copper rallied more than 2% on COMEX, amid concerns that potential US tariffs could squeeze supply. Metals remain investor favorites as appetite for traditional currencies wanes.

As we head toward year-end: it’s time to explore non-tech, non-US pockets of the market. Emerging-market indices benefit when the dollar softens, and European indices have performed very well this year to close the valuation gap. There’s certainly more to take advantage of, though it’s less flashy than the US tech story.

In focus today

In the US, the Challenger report of November layoff and hiring announcements is due for release in the afternoon. While not usually a tier-1 market mover, it is one of the few timely data points on labour markets that will be available for the Fed before next week's meeting due to the delays caused by the government shutdown.

In Sweden, the preliminary inflation figures for November are released today. Our forecast is CPIF excluding energy at 2.8%, CPIF at 2.8%, and CPI at 0.8%. The monthly change in core inflation from October to November is estimated at -0.19, primarily attributed to Black Friday sales. Higher prices for electricity and petrol are expected to result in a monthly increase in CPIF of 0.25%.

Economic and market news

What happened overnight

In Japan, Bank of Japan Governor Kazuo Ueda flagged uncertainty about how far rates can be raised due to the difficulty of estimating the country's neutral interest rate, which is currently projected between 1% and 2.5%. Ueda also hinted at a potential rate hike to 0.75% later this month as the central bank evaluates the "pros and cons" of tightening monetary policy.

In China, government advisers expect Beijing to stick to its 5% GDP growth target for 2026 as policymakers seek to counter deflationary pressures, a property slump, and weak consumer demand. Fiscal and monetary stimulus, including bond issuance and subsidies, are likely to continue, while leaders aim to gradually shift towards a consumption-led economic model over the next five years.

What happened yesterday

In the US, private sector employment decreased by 32k in November, according to the ADP report (cons: +10k). The decline was driven by manufacturing job losses, while services employment remained more resilient, aligning with weaker forward-looking signals from PMI and ISM data. This supports expectations for a Fed rate cut next week, with EUR/USD ticking higher. Meanwhile, ISM services PMI rose to 52.6 in November (cons: 52.1, prev: 52.4). Positively for the Fed, the price index declined sharply, suggesting easing inflation pressures, though the PMI index sent a conflicting signal. Looking across the two surveys, it seems that service sector activity continues to grow at a decent pace.

US Secretary of Treasury Scott Bessent advocated that Federal Reserve regional bank presidents must have lived in their districts for at least three years. This is an interesting headline because it suggests the administration is preparing to get involved with the (re-)nominations of Regional Fed presidents, due in February. Regional Feds elect their own presidents, but the picks are subject to the approval of Fed governors, who are nominated by US president.

In the euro area, the final composite PMI for November was revised up to 52.8 (flash: 52.4), driven by an upward revision in services PMI to 53.6 (flash: 53.1), while manufacturing PMI was slightly lowered to 49.6 (flash: 49.7). According to the PMIs, the services sector is now growing at its fastest pace in two and a half years, highlighting resilience in the domestic economy and supporting expectations for unchanged policy rates from the ECB.

In the UK, PMIs fell to 51.2 (prior 52.2) but came in stronger than consensus expectations at 50.5. It reflected the seventh consecutive month of expansion in the UK's private sector activity, with the upside surprise sparking a strengthening of the GBP.

In Switzerland, November inflation came in lower than expected. Headline inflation dropped to 0.0% (cons: 0.1%, prior: 0.1%) and core inflation edged lower as well to 0.4% (cons: 0.5%, prior: 0.5%). The SNB is still expected to remain firmly on hold at the next meeting in December, keeping the policy rate at 0%. SNB members have reiterated that inflation below 0% would be tolerable for a short period of time. We expect the first course of action to be FX intervention before resorting to a cut into negative territory.

In Sweden, services PMI rose strongly to 59.1 in November (prev: 55.9), signalling robust growth in the sector. Business volumes saw a significant jump to 65.2 (prev: 55.3), while the employment index edged higher to 49.9 (prev: 47.8). Overall, the data adds to the recent positive signals from the Swedish economy.

In Poland, the central bank cut its main interest rate by 25bp to 4.00%, marking the sixth rate cut this year, following a sharper-than-expected drop in November inflation to 2.4% y/y (cons: 2.6%). The Monetary Policy Council highlighted risks from fiscal policy, wage dynamics, and global inflation but indicated future rate decisions would depend on incoming data.

The European Commission unveiled an "economic security doctrine" aimed at cutting over-reliance on Chinese metals and other single-source suppliers. The REsourceEU Action Plan seeks to diversify supply chains, accelerate trade measures, and prioritise support for businesses reducing foreign dependencies in critical sectors.

Equities: Equities pushed higher again yesterday, led by the US but notably not driven by mega-cap tech. Instead, gains were broad-based, with the VIX edging lower and min vol stocks underperforming. Small caps materially outperformed, marking another classic shift towards a slightly more constructive investor risk-optic. In our view, somewhat interesting given that macro data was generally solid, particularly in Europe, while the US delivered a disappointing ADP print, which remains our primary concern. In US yesterday, Dow +0.9%, S&P 500 +0.3%, Nasdaq +0.2%, Russell 2000 +1.9%. Asian equities trade higher this morning, predominantly supported by Japan on renewed expectations of a fiscal "bazooka" and a persistently accommodative global monetary backdrop ex-Japan. European equity futures are modestly firmer, whereas US futures are essentially flat.

FI and FX: GBP was the top performer during yesterday's session as final November PMIs came in a lot stronger than expected. CHF was largely unfazed by lower-than-expected November CPI. EUR/USD rose to the 1.1670 mark supported by weaker US data while EUR/SEK and EUR/NOK tracked lower during yesterday's session. US yields moved lower during yesterday's session, both in swap and Treasury space, dropping 2-3bp across the curve. In euro space, the moves were very limited with yields largely trading flat across curves and tenors.

Daily Pivots: (S1) 0.6569; (P) 0.6586; (R1) 0.6619; More...

AUD/USD's rally from 0.6420 accelerates higher today and the solid break of 0.6579 resistance adds to the case that whole correction from 0.6706 has completed at 0.6420. Intraday bias stays on the upside for retesting 0.6709 and then 0.6713 key fibonacci level. For now, risk will stay on the upside as long as 0.6537 support holds, in case of retreat.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. Outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Break of 0.6413 support will suggest rejection by 0.6713 and solidify this bearish case. Nevertheless, considering bullish convergence condition in W MACD, sustained break of 0.6713 will be a strong sign of bullish trend reversal, and pave the way to 0.6941 structural resistance for confirmation.

NZD/USD extended its rebound from 0.5580 this week as the pair capitalized on a softer US Dollar, driven by the sharp deterioration in ADP employment data. The weak labor reading reinforced expectations of a December Fed rate cut, prompting another wave of USD selling across major pairs and giving the Kiwi room to advance. Underlying support also stems from the RBNZ’s hawkish cut last week, where policymakers signaled that the easing cycle has likely ended.

Technically, NZD/USD’s break above the 55 D EMA signals that the three-wave corrective decline from 0.6119 has likely completed at 0.5580. Momentum has clearly shifted to the upside, and the structure argues that the pair may now be in the early stages of a broader rally.

The next key hurdle is the 0.5799 support-turned-resistance. Sustained break above this level would further confirm bullish reversal and strengthen the view that the rise from 0.5580 represents the third leg of the larger pattern from 0.5484 low earlier this year.

That would also open the door through 0.6119 resistance, even if the advance from 0.5484 proves to be only a corrective rally within the broader downtrend from the 0.7463 (2021 high).

BoJ Governor Kazuo Ueda told lawmakers today that Japan’s neutral interest rate remains highly uncertain, describing it as a concept that can only be estimated within a “quite wide range.” He noted that the central bank is attempting to narrow that range and may disclose updated estimates once confidence improves.

Ueda added that the lack of clarity around the neutral rate means the BoJ must operate without a firm sense of how much tightening is ultimately appropriate. This ambiguity, he said, leaves uncertainty around “how far we should raise interest rates,” even as policymakers consider more conventional policy settings after years of ultra-accommodation. Current BoJ estimates place the nominal neutral rate between 1% and 2.5%.

His comments come days after signaling that the BoJ will weigh the “pros and cons” of a rate hike at the upcoming December meeting, a remark markets interpreted as the strongest indication yet that a move to 0.75% is under consideration.

The rally in Silver from the 28 October low continues to unfold as a five‑wave impulse Elliott Wave sequence, though the structure remains incomplete. From that low, wave 1 advanced to 54.39, followed by a corrective pullback in wave 2 that concluded at 48.6. The metal then resumed its upward trajectory in wave 3, which itself subdivides into another five‑wave sequence of lesser degree. From the termination of wave 2, wave ((i)) reached 53.85, while the subsequent pullback in wave ((ii)) settled at 52.86.

Momentum strengthened as wave ((iii)) extended to 58.84, before wave ((iv)) corrected modestly to 56.55. The market should now push higher in wave ((v)), thereby completing the larger wave 3. The potential termination zone for wave 3 aligns with the 100% to 161.8% Fibonacci extension of wave 1, calculated at 57.8 to 63.4. This region has already been tested, suggesting that the cycle is mature and wave 3 may be approaching completion.

Once wave 3 concludes, a corrective phase in wave 4 should emerge, retracing the cycle from the 21 November low before the broader trend resumes upward. In the near term, as long as the pivotal support at 48.64 remains intact, pullbacks should attract buyers. These retracements may unfold in sequences of three, seven, or eleven swings, providing opportunities for renewed upside participation.

Silver (XAGUSD) 60-Minute Elliott Wave Chart From 12.4.2025

XAGUSD Elliott Wave Video:

https://www.youtube.com/watch?v=HiA1dZm31pk