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Daily Pivots: (S1) 0.8749; (P) 0.8761; (R1) 0.8774; More…

EUR/GBP recovered just ahead of 55 D EMA (now at 0.8451) and intraday bias is turned neutral first. Considering bearish divergence condition in D MACD, sustained trading below 55 D EMA 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) 1.7677; (P) 1.7719; (R1) 1.7749; More...

Intraday bias in EUR/AUD remains mildly on the downside at this point. Rebound from 1.7561 could have completed as a corrective move at 1.7976. Break of 1.7627 support will bring retest of 1.7561. On the upside, above 1.7794 minor resistance will turn bias neutral first. But risk will stay on the downside as long as 1.7976 holds, in case of recovery.

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.

Daily Pivots: (S1) 0.9306; (P) 0.9322; (R1) 0.9332; More....

EUR/CHF is extending consolidations below 0.9349 and intraday bias remains neutral. As noted before, fall from 0.9660 could have completed at 0.9178, on bullish convergence condition in D MACD. Above 0.9349 will resume the rise from 0.9178, and target 0.9452 resistance next. However, break of 0.9275 will turn bias back to the downside for 0.9178 low instead.

In the bigger picture, outlook remains bearish with EUR/CHF staying well inside long term falling channel after multiple rejection by 55 W EMA (now at 0.9371). Next target is 61.8% projection of 1.1149 to 0.9407 from 0.9928 at 0.8851. Break of 0.9452 resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will stay bearish in case of strong rebound.

Daily Pivots: (S1) 1.3928; (P) 1.3990; (R1) 1.4041; More...

USD/CAD's fall accelerates lower today, and considering bearish divergence condition in D MACD, break of 1.3920 support is the first sign of bearish reversal. Intraday bias is back on the downside, and decisive break of 38.2% retracement of 1.3538 to 1.4139 at 1.3909 will indicate that whole rise from 1.3538 has completed. Deeper fall should then be seen to 61.8% retracement at 1.3768 next. For now, risk will stay on the downside as long as 1.4129 resistance holds, in case of recovery.

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.

Daily Pivots: (S1) 0.6530; (P) 0.6545; (R1) 0.6568; More...

No change in AUD/USD's outlook. Intraday bias remains on the upside for 0.6579 resistance. Decisive break there should confirm that whole fall from 0.6706 has completed as a three wave correction. Stronger rally should then be seen back to retest 0.6706. On the downside, however, below 0.6483 minor support will turn intraday bias back to the downside for 0.6413 key support.

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.

Daily Pivots: (S1) 1.1568; (P) 1.1587; (R1) 1.1619; More…

Range trading continues in EUR/USD and intraday bias stays neutral. With 1.1655 resistance intact, further decline is still expected. On the downside, below 1.1490 and 1.1467 will resume the whole decline from 1.1917 high. Next targets are 1.1390, and then 38.2% retracement of 1.0176 to 1.1917 at 1.1252. However, decisive break of 1.1655 will argue that fall from 1.1917 has completed, and turn bias back to the upside for 1.1727 resistance and above.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top is likely in place at 1.1917, just ahead of 1.2 key psychological level. As long as 55 W EMA (now at 1.1345) holds, the up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2000 will carry larger bullish implications. 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) 1.3204; (P) 1.3229; (R1) 1.3258; More...

Intraday bias in GBP/USD remains neutral first. On the upside, break of 1.3267 will resume the rebound from 1.3308. Sustained trading above 55 D EMA (now at 1.3265) should confirm that fall from 1.3787 has completed as a correction. Further rise should then be seen to 1.3725/3787 resistance zone. Nevertheless, break of 1.3123 minor support will revive near term bearishness, and bring retest of 1.3008.

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) 0.8019; (P) 0.8046; (R1) 0.8064; More…

USD/CHF is staying in consolidations below 0.8101 and intraday bias stays neutral. Rise from 0.7877 is still seen as the third leg of the corrective pattern from 0.7828 low. Above 0.8101 will target 0.8123 resistance, and then 138.2% projection of 0.7828 to 0.8075 from 0.7877 at 0.8218. However, sustained break of 55 D EMA (now at 0.8015) will bring deeper fall back to 0.7877 support instead.

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).

Markets

US stock markets ended a low-volume, shortened after-Thanksgiving-trading session in the green with gains between 0.54-0.65% for the main indices. European equities overcame early weakness to finish 0.3% higher (EuroStoxx50). Last week’s moves, particularly in the US, called off the threat of equity markets turning into a sell-on-upticks pattern. US yields rose up to 2.8 bps with the belly of the curve underperforming the wings. The 10-yr tenor struggled around but eventually closed north of the 4% barrier. European rates traded listless. A mixed bag of national inflation numbers failed to inspire bond markets: the French and Italian November edition fell short of bar while Spain and Germany slightly topped it. It means tomorrow’s European figure (-0.3% m/m, 2.1% y/y) should come in close to expectations. Not that it matters for ECB policy. President Lagarde last Friday noted that interest rates at 2% are at the correct level. Her comments follow similar remarks coming from VP de Guindos earlier in the week. Lagarde struck a positive tone on the economy and won’t be surprised if growth, which already exceeded expectations, would “end up even higher by the end of the year”. A UK gilts (short-term, in our view) relief rally brought the likes of the 30-yr towards their end-October/November lows which, in turn, are the lowest levels since June of this year. UK Chancellor Reeves’ budget eased concerns for long-term bonds somewhat, mainly by installing a much bigger fiscal buffer and by a planned shift towards more short-dated debt, including a potential expansion to UK Treasury bills. But the “spend now, pay later” attitude will be coming back to haunt public finances. Sterling’s recovery seems to run into resistance around EUR/GBP 0.875 already with the pair this morning moving back north of the July high (0.8769). Cable (GBP/USD) trades above 1.32. Along with local stock markets, the euro gradually recovered against the USD on Friday. EUR/USD rebounded from intraday lows around 1.156 back to 1.16. The pair remains technically trapped though with little on the agenda today able to break the deadlock. The US manufacturing ISM is on tap. The services print is due Wednesday, along with the ADP job report. PCE deflators are up on Friday but the payrolls report remains missing as a consequence of the previous shutdown. The Japanese yen is performing strongly, pushing USD/JPY towards 155.6 and EUR/JPY to 180.45 following Ueda. The Bank of Japan governor in a speech seen as an advance notice for a rate hike said they’ll be considering all pro’s and cons for such a move in December, bombarding it to a live meeting. Ueda also warned about the risks of delaying a hike for too long. Short-term Japanese yields rise 4-5 bps with the 2-yr yield hitting 1% for the first time since 2008.

News & Views

Rating agency Moody’s confirmed the Hungarian credit rating at Baa2 with a negative outlook. Moody’s lowered its real GDP growth forecasts for this year and next from 1% and 2.8% to 0.5% and 2.3%. High dependence on the automotive sector and the German economy is negatively affecting exports, while the reduction in public investment spending against the backdrop of blocked EU funds is also weighing on growth. Because of wider deficits (5% of GDP in 2025 & 2026) and slower growth, Moody’s now projects a slight increase in the debt burden to around 74% of GDP in 2025 and 2026, from 73.5% in 2024. The negative outlook reflects downside risks related to the quality of Hungary's institutions and governance, which could lead to a substantial loss of committed EU funds, weakening the economy's growth prospects beyond what Moody’s currently expects. In turn, this could further weaken fiscal and debt metrics. In addition, given the still high reliance of Hungary on energy imports from Russia, a prolonged energy supply disruption would also be credit negative, although this risk has recently been mitigated by the one-year exemption on sanctions on Russian energy agreed with the US administration. The Hungarian forint is unmoved by the expected decision with EUR/HUF (382) holding near lowest levels since early 2024.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) confirmed at the 40th OPEC and non-OPEC Ministerial Meeting to pause production increases in Q1 2026 as stability primes regaining market share for the moment in a market leaning towards a global surplus. They also approved a mechanism to assess participating countries’ maximum sustainable production capacity to be used as reference for the 2027 production baselines for all countries. The next official OPEC meeting is scheduled for June 7, 2026. A Joint Ministerial Monitoring Committee meeting to closely review global oil market conditions, oil production levels and the level of conformity of countries will continue to be held every two months. Brent crude prices rise this morning on the decision, trading currently around $63.5/b from a $62/b closing level last week.

December is finally here. Last month ended on a positive note – with a solid reversal of the early-November losses on one single bet: that the Federal Reserve (Fed) would cut interest rates in December. US traders came back from their Thanksgiving break to a market paralysed by a tech issue on Friday, but the problem was quickly resolved, trading resumed and the S&P 500 closed both the week – and the month – just a few points below an ATH. The November dip only shaved about 5% off the index, and those losses have almost been fully recovered. European stocks outperformed thanks to their lower exposure to tech – the major driver of the recent rallies, but also a potential major driver of any future meltdown. Gold, Bitcoin, US Treasuries – everything rallied last week.

But worries persist that the Fed may be rushing toward a rate cut without solid data in hand, and that valuations have run ahead of themselves. Those concerns will only grow if the Fed cuts and the rally continues into year-end. The Q ratio, which measures the market value of a company or the overall stock market relative to the replacement cost of its assets, hit an ATH last month, as well. In plain English: we are living incredibly exciting times with AI – but also facing very expensive stock prices compared with the real, physical value of companies’ assets.

This week starts on a rather miserable note – perhaps the return from Thanksgiving is less cheerful than expected. Shoppers in the US spent almost $12bn during the shopping festival, up around 4%, but once you strip out the roughly 3% inflation rate, the real growth is modest – which is actually good news. It suggests that consumers are spending more carefully, price pressures may ease and the Fed could cut rates more confidently.

But risk appetite – judging from the price action in the Nikkei and Bitcoin – doesn’t look great. And one man is largely responsible for that: Kazuo Ueda, the head of the Bank of Japan (BoJ), who said today that the bank “will consider the pros and cons of raising the policy interest rate and make decisions as appropriate” and that “any hike would merely be an adjustment in the degree of easing.” In other words, they remain far behind the curve, and normalization is calling – even more loudly as Takaichi’s policy measures risk pushing Japan’s inflation even higher.

The result is a bloodbath in Japanese assets. The Nikkei is down nearly 2% this morning on rising bets that the BoJ will hike at the next meeting – despite soft PMI data. The Japanese 10-year yield is at a fresh multi-decade high near 1.87% this morning, which is very high relative to the 1.71% level often referenced as the point at which Japan’s era of “free liquidity” effectively ends. Around $3.4 trillion circulates in global markets from Japanese investors seeking higher returns abroad – capital that could simply be repatriated as domestic yields rise.

From an economist’s perspective, hiking interest rates – and counterbalancing Takaichi’s fiscal push – is exactly what the BoJ should be doing. This is why central banks exist: to offset politically motivated, growth-at-all-costs fiscal impulses. BUT if the BoJ hikes, Japanese yields will rise, and Japanese capital could leave a significant hole in the global financial system at a time when everyone is wondering whether we haven’t pushed the AI-driven rally too far.

This is why US 10-year yields jumped at the weekly open – that, and of course the ballooning US debt, which should theoretically push the Fed toward the same kind of thinking as their Japanese counterparts.

So, December could prove more challenging than many expected – especially for those who thought last month’s 5% dip was the long-awaited correction. With Fed funds futures pricing nearly a 90% chance of a 25bp cut, there isn’t much room left for additional dovish fuel.

On the contrary, incoming data could warn that a premature Fed rate cut that ignores inflation risks won’t be the answer. So pray: pray for this week’s PCE and inflation-expectations data to look soft enough to keep dovish expectations alive. Traders are also watching gold and the Swiss franc – both potential beneficiaries if the selloff deepens.

Potentially not helping sentiment: US crude is up more than 2% this morning as OPEC reiterated yesterday that they want to stabilise oil prices into next year, implying tighter control of output to address the supply glut that has weighed on prices – except during brief periods of geopolitical tension. And even those tensions haven’t been enough lately to bring buyers back, which shows how much oil is currently sloshing around the planet. As discussed in previous reports, OPEC alone can’t reverse the broader negative price dynamic, but it can help put a floor under the latest selloff. WTI is testing $60pb this morning, but prices need to climb above $65pb for the technicals to confirm an end to the bearish trend.