Sample Category Title

OECD’s latest economic outlook points to a cooling global economy over the next two years as higher effective tariff rates and persistent geopolitical uncertainty weigh on activity.

Global growth is projected to slow from 3.2% in 2025 to 2.9% in 2026 before recovering modestly to 3.1% in 2027. The US is expected to decelerate from 2.0% growth in 2025 to 1.7% in 2026, while the Eurozone will hover near 1.2%–1.4% through 2027. China’s growth is seen easing from 5.0% in 2025 to 4.3% by 2027 as structural and external pressures build.

Near-term momentum is expected to soften as global trade and investment absorb the impact of higher tariffs, weaker confidence, and ongoing policy uncertainty. OECD expects conditions to improve toward late 2026 as the drag from tariffs fades, financial conditions ease, and lower inflation supports demand.

Inflation is expected to continue moderating. Headline CPI across the G20 is projected to fall from 3.4% this year to 2.9% in 2026 and 2.5% in 2027. By mid-2027, inflation is expected to be back to target in most major economies, allowing central banks additional flexibility to support growth if needed.

Full OECD Economic Outlook here.

• Hassett’s chances of becoming Fed chair are growing, and the FOMC may cut rates to 3% in 2026.
• Europe is losing out to the US due to AI, while the BoJ’s rate hike is raising concerns.

Kevin Hassett’s growing chances of becoming Fed chair and weak manufacturing activity statistics have dragged down the US dollar. However, the rally in Treasury yields amid expectations of monetary policy tightening by the Bank of Japan has cooled the enthusiasm of EURUSD bulls. Investors fear that the repatriation of capital to the Land of the Rising Sun, as local assets become more attractive, will lead to a sell-off of US Treasury bonds.

The director of the National Economic Council is closest to Donald Trump and has the best chance of becoming Fed chair. Kalshi gives Kevin Hassett an 82% chance of winning. Kevin Warsh and Christopher Waller are estimated to have a 10% and 4% chance, respectively. As a result of the FOMC being flooded with doves, the risks of aggressive monetary expansion are increasing. The futures market gives a 74% and 45% probability that by the end of 2026, the federal funds rate will fall to 3.25% and 3%, respectively.

The US ISM manufacturing PMI published on Monday went below 50 for the ninth month in a row, indicating a decline in activity, which is a reminder of the negative impact of tariffs on the economy. The damage was less than expected due to large-scale investments in artificial intelligence technology. Europe is unable to compete with the United States in this area. The cost of electricity required for AI in the Old World is approximately twice as high as in the New World. Only a dramatic reduction in this gap could radically change the outlook and encourage EURUSD buyers.

The retreat of the main currency pair from two-week highs is attributed to the rally in 10-year US Treasury yields, which have risen above 4%. Investors fear that Japan, which holds $1.2 trillion in Treasuries, will begin to dump them as local assets become more attractive and capital repatriates to its home country. The growing likelihood of a rate hike by the Bank of Japan in December amid hawkish comments from Kazuo Ueda supports this. As a result, yields on 10-year Japanese bonds have soared to their highest level since 2008.

Rising US Treasury yields and renewed selling of cryptocurrencies have cooled demand in the S&P 500. The broad stock index took a step back after a five-day rally, but its outlook remains bullish. JP Morgan sees it rising to 7’500, while RBC Capital Markets forecasts growth to 7’750 by the end of 2026, driven by the strength of the US economy, corporate earnings, artificial intelligence, and further easing of the Fed’s monetary policy.

At the end of the year, seasonal factors could play in favour of the S&P 500. According to CFRA research, since 1990, the market has most often grown in December, while average returns have been second, and volatility has been the second lowest. After Thanksgiving, it tends to grow. That’s the good news. The bad news is that the scale of this growth is decelerating over time.

When the market is preparing for the Christmas rally and expecting a cut in the federal funds rate, it is difficult to stop the bulls. According to Bank of America, the Fed is expected to ease monetary policy once in 2025 and twice more in 2026. This forecast is based on changes in the composition of the FOMC, rather than the state of the US economy. Until now, the health of the economy has been supportive of the S&P 500. The state of the economy allows for lower rates, but does not yet raise fears of a recession.

Tariffs are putting pressure on GDP, as evidenced by the ninth consecutive month of decline in manufacturing activity. However, investments in artificial intelligence are helping to keep the economy afloat and supporting the S&P 500.

Concerns about an AI bubble led to a pullback in stocks in November. However, as soon as fears subsided, they made a sharp recovery, further supported by news from the technology sector. For example, news of NVIDIA’s $2 billion investment in chip development boosted the shares of software manufacturer Synopsys.

Eurozone headline inflation ticked up slightly in November, rising to 2.2% yoy from 2.1% and coming in just above expectations of 2.1%. Core CPI (ex energy, food, alcohol & tobacco) held unchanged at 2.4%, matching forecasts.

Looking at the details, services were the main driver of inflation, climbing to 3.5% from 3.4%. Food, alcohol and tobacco inflation stayed steady at 2.5%. Non-energy industrial goods were unchanged at 0.6%, and energy inflation remained negative at –0.5% but improved from –0.9%.

Labor-market data painted a slightly softer picture. Eurozone unemployment rose to 6.4% in October from 6.3%, missing expectations of 6.3%.

Full Eurozone CPI flash and unemployment release.

The EUR/USD pair retreated to 1.1612 on Tuesday, pulling back from a recent two-week high. The catalyst for the move was a significant repricing of US interest rate expectations following weak manufacturing data. The ISM Manufacturing Index confirmed a ninth consecutive month of contraction, with the pace of decline the fastest in four months.

This data solidified market expectations for a Federal Reserve rate cut. Futures markets now imply an 88% probability of a 25-basis-point reduction at next week's FOMC meeting.

In related news, President Donald Trump announced he has selected a candidate for the next Fed Chair. Media reports suggest the leading contender is Kevin Hassett, the current head of the White House National Economic Council.

Investor attention is now focused on an upcoming speech by current Chair Jerome Powell later today, which may offer further clues on the Fed's policy trajectory.

Technical Analysis: EUR/USD

H4 Chart:

On the H4 chart, EUR/USD continues to trade within an established ascending channel. The pair is currently testing a key resistance zone at 1.1655, where buying momentum has met significant selling pressure. A decisive breakout above this level would open the path towards the next major resistance at 1.1730.

The Stochastic Oscillator is rising from the middle zone, indicating sustained bullish momentum without overbought conditions. The MACD remains above its zero line, maintaining a stable, albeit weak, buy signal. Conversely, a break and close below the key support at 1.1545 would signal a deeper correction, likely targeting the lower boundary of the current range near 1.1468.

H1 Chart:

On the H1 chart, the pair is undergoing a correction after being rejected from local resistance at 1.1652. Buyers are currently defending the price above the middle Bollinger Band, suggesting short-term bullish control remains intact.

The Stochastic Oscillator is in overbought territory (above 80) and is turning down, pointing to a near-term corrective pullback. However, the MACD remains in positive territory, supporting the broader upward bias. This technical picture suggests a brief downward pause is likely, with a potential retest of support in the 1.1600–1.1585 zone. A successful hold above this area would increase the probability of a fresh upward impulse, targeting a renewed test of 1.1652 and an eventual push towards 1.1700.

Conclusion

EUR/USD remains confidently bid, supported by growing expectations of Fed easing. While a short-term technical correction is underway, the broader structure on both the H4 and H1 charts remains constructive. The key for continued upside is a successful defence of the 1.1600–1.1585 support zone. A break above 1.1655 would be a significant bullish confirmation, while a failure to hold support could trigger a deeper pullback towards 1.1545.

December is traditionally a favourable month for the S&P 500 (US SPX 500 mini on FXOpen):

→ Since the 1950s, December has ended higher in over 70% of years.

→ Average monthly gain is around +1.0%.

Will the index rise in 2025? Much depends on the Federal Reserve meeting on 10 December, as well as other factors, including geopolitical developments. Interest is also piqued by an upcoming statement from Trump at the White House (today, 22:00 GMT+3), though the topic remains undisclosed.

Technical Analysis of the S&P 500 Chart

Demand-side perspective:

→ The rebound from November’s low was aggressive, rising roughly +5% in 10 days.

→ Price climbed above the blue trendline that has acted as support since summer.

→ The recent dip (marked by the red trajectory) could be a temporary correction, forming a Bull Flag pattern.

Supply-side perspective:

→ The red trajectory has not yet been breached.

→ Recent price movements show a strong bearish Head and Shoulders pattern, along with signs of a Quasimodo formation, emerging around the attempt to break the upper boundary.

In the short term, the former resistance at 6785 may now act as support. Overall, the S&P 500 (US SPX 500 mini on FXOpen) is likely to adopt a wait-and-see stance, adjusting as economic news, delayed by the government shutdown, is released.

Trade global index CFDs with zero commission and tight spreads. Open your FXOpen account now or learn more about trading index CFDs with FXOpen.

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) 204.83; (P) 205.80; (R1) 206.40; More...

Intraday bias in GBP/JPY stays neutral and more consolidations could be seen below 207.18. Further rally is expected as long as 204.26 support holds. Above 207.18 will resume larger rise to retest 208.09 high. Firm break there will confirm long term up trend resumption. However, decisive break of 204.26 will bring deeper pullback to 55 D EMA (now at 202.81).

In the bigger picture, price actions from 208.09 (2024 high) are seen as a corrective pattern which might have completed at 184.35. Firm break of 208.09 high will resume the up trend from 123.94 (2020 low). Next target is 61.8% projection of 148.93 to 208.09 from 184.35 at 220.90. However, decisive break of 199.04 support will dampen this view and extend the corrective pattern with another fall.

Daily Pivots: (S1) 180.04; (P) 180.60; (R1) 181.07; More...

Intraday bias in EUR/JPY remains neutral as consolidations from 181.98 is still extending. While deeper retreat cannot be ruled out, downside should be contained by 178.80 resistance turned support to bring another rally. On the upside, break of 181.98 will target 100% projection of 161.06 to 173.87 from 171.09 at 183.90 next. However, firm break of 178.80 will argue that deeper correction is already underway towards 55 D EMA (now at 177.48).

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. Outlook will continue to stay bullish as long as 55 W EMA (now at 169.45) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.8766; (P) 0.8780; (R1) 0.8800; More…

Intraday bias in EUR/GBP stays neutral at this point. Considering bearish divergence condition in D MACD, sustained trading below 55 D EMA (now at 0.745) will solidify the case of bearish reversal. Deeper fall should then be seen to 0.8631 cluster (38.2% retracement of 0.8221 to 0.8663 at 0.8618). However, break of 0.8816 minor resistance will bring stronger rebound to retest 0.8863 high instead.

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 0.8600) 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.

Daily Pivots: (S1) 1.7709; (P) 1.7737; (R1) 1.7768; More...

For now, further fall remains in favor in EUR/AUD for 1.7627 support. Firm break there will argue that decline from 0.8160 is ready to resume through 1.7561 support next. On the upside, above 1.7794 minor resistance will turn intraday bias neutral again first.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern. Sustained break of 55 W EMA (now at 1.7426) will suggest that it's correcting the whole rally 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. Nevertheless, strong rebound from 55 W EMA will likely bring resumption of the up trend sooner.