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Markets were broadly quiet today as holiday conditions dominated trading, with liquidity thinning further after a major technical issue at the Chicago Mercantile Exchange brought several platforms to a halt. The CME said trading had come to a standstill due to a cooling problem at one of its data centers. The outage affected Globex futures and options, EBS foreign-exchange trading and BMD markets, with the exchange warning that price adjustments may take time to filter through once systems fully recover.

In currencies, the Dollar attempted another modest rebound but once again struggled to build momentum. With little fresh data and most investors already looking ahead to next week’s U.S. releases—including ISM manufacturing and services—there was no catalyst to drive a meaningful shift. Many traders may simply prefer to wait even longer for the December 10 FOMC decision before committing to larger directional positions.

As a result, the weekly performance picture remains unchanged. Dollar is still the weakest performer of the week, followed by Yen and Swiss Franc. At the top end, Kiwi continues to lead, supported by a hawkish RBNZ stance, while Aussie and Sterling follow. Euro and Loonie sit squarely in the middle.

In Europe, at the time of writing, FTSE is up 0.27%. DAX is up 0.18%. CAC is up 0.25%. UK 10-year yield is down -0.02 at 4.436. Germany 10-year yield is flat at 2.685. Earlier in Asia, Nikkei rose 0.17%. Hong Kong HSI fell -0.34%. China Shanghai SSE rose 0.34%. Singapore Strait Times rose 0.32%. Japan 10-year JGB yield rose 0.005 to 1.807.

ECB survey shows slight rise in 12-month inflation expectations to 2.8%

The ECB Consumer Expectations Survey for October showed a small uptick in near-term inflation expectations, with the median 12-month outlook rising to 2.8% from 2.7% in September.

Longer-term expectations remained stable, with the three-year horizon unchanged at 2.5% and the five-year measure anchored at 2.2%. Inflation uncertainty was likewise steady, indicating consumers do not see a significant shift in the underlying trend.

On the economic front, consumers grew slightly more optimistic about growth. Expectations for GDP over the next 12 months improved to -1.1%, up from -1.2% previously. However, labor-market expectations worsened. Consumers now expect the unemployment rate to reach 11.0% in 12 months, up from 10.7% in September.

Swiss KOF barometer edges up to 101.7 on stronger demand

Switzerland’s KOF Economic Barometer ticked higher in November, rising from 101.5 to 101.7 and signaling modest improvement in the near-term economic outlook.

KOF noted that the improvement is concentrated on the demand side. Indicator bundles tied to foreign demand and private consumption strengthened, suggesting both external orders and household activity are on firmer footing.

On the production side, however, parts of the economy remain under pressure. Indicators for financial and insurance services, as well as construction, deteriorated, revealing a mixed underlying picture.

Swiss GDP contracts -0.5% in Q3, pharma and chemicals lead decline

Swiss GDP fell -0.5% qoq in Q3, marking a sharp reversal driven almost entirely by the chemical and pharmaceutical sector. After strong momentum earlier in the year, the industry saw output plunge -7.9%, erasing prior gains and dragging the broader economy into contraction.

Authorities noted that the downturn reflects recent volatility in foreign trade. Earlier quarters saw a surge in pharma exports, partly driven by front-loading ahead of U.S. trade-policy changes. Those temporary boosts have now unwound, resulting in a "compensatory decline" that weighed heavily on Q3 activity.

Tokyo core CPI holds at 2.8% in November, inflation pressures still firm

In Japan, Tokyo’s inflation profile showed little moderation in November, with both core CPI and core-core CPI staying at 2.8% yoy. The readings came in slightly firmer than expected, while headline CPI eased just one-tenth to 2.7%. The stability of these measures indicates that underlying inflation momentum remains intact.

Much of the price momentum came from food, where sharp gains continued. The cost of rice surged 38.5% yoy, coffee beans rose 63.4%, and chocolate jumped 32.5%, reflecting broad price pressures across essential and discretionary categories.

Meanwhile, goods inflation climbed 4.0% yoy. Services inflation eased only marginally to 1.5% from 1.6%.

Japan industrial production surges 1.4% mom in October on auto rebound, but fluctuation to continue

Japan’s industrial production rose 1.4% mom in October, sharply beating expectations of a -0.6% decline. The rebound was driven primarily by a 6.6% jump in motor vehicle output, a sector benefiting from the U.S. tariff rate on Japanese cars being reduced to 15% from 27.5% in mid-September. The improvement highlights how quickly Japanese automakers responded once tariff uncertainty eased.

However, the forward outlook remains soft. Based on its manufacturer survey, METI expects output to fall -1.2% in November and contract a further -2.0% in December. Despite October’s upside surprise, the ministry kept its overall assessment unchanged, saying industrial production “fluctuates indecisively” amid continued uncertainty at home and abroad.

Retail sales also surprised to the upside, rising 1.7% yoy versus expectations of 0.8%. The strength suggests domestic demand remains more resilient than many feared, even as the industrial sector continues to face uneven momentum.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1578; (P) 1.1596; (R1) 1.1615; More…

Intraday bias in EUR/USD remains neutral for the moment, as range trading continues. Further decline is expected with 1.1655 resistance intact. 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 1.1328) 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) 1.1578; (P) 1.1596; (R1) 1.1615; More…

Intraday bias in EUR/USD remains neutral for the moment, as range trading continues. Further decline is expected with 1.1655 resistance intact. 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 1.1328) 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) 1.3210; (P) 1.3240; (R1) 1.3270; More...

Intraday bias in GBP/USD is turned neutral with current retreat. On the upside, break of 1.3267 will resume the rebound from 1.3308. Sustained trading above 55 D EMA 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) 0.8027; (P) 0.8048; (R1) 0.8069; More…

Intraday bias in USD/CHF remains neutral for the moment. Outlook is unchanged that current 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).

Daily Pivots: (S1) 155.85; (P) 156.17; (R1) 156.63; More...

No change in USD/JPY's outlook as consolidations continue below 157.88. Intraday bias stays neutral at this point. Downside should be contained by 154.47 resistance turned support. On the upside, break of 157.88 will resume the whole rally from 139.87. Next target is 158.86 structural resistance, and then 161.94 high. However, firm break of 154.47 will bring deeper correction to 55 D EMA (now at 152.63).

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has 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.

Market Overview

The crypto market cap corrected by 0.4% to $3.10T, pausing the cautious rebound from last Friday. Yet we can’t talk about the rebound running out of steam, as there was strong growth the day before. But we do not see any increase in optimism, as just about one in seven coins has gained in the last 24 hours, compared to a decline for most.

The sentiment index rose to 25, the threshold for exiting the territory of extreme fear, despite the latest round of weakness. The index’s dynamics are likely to attract buyers who were eager to enter the market but were waiting for a discount after the highs were set in early October.

Bitcoin has fallen below $ 91K, stabilising near the 61.8% Fibonacci retracement level of the decline since November 11th. The area near $90K was significant for the market about a year ago, serving as support for the correction after the growth momentum in early November. There is some risk that it will now act as resistance, reinforcing the bearish signal of a possible end to the rebound. A rise above $95K would signal a victory for the bulls and a return to a bull market, while a decline below $87K could open the way to $80K, driving the market into a depression.

News Background

Kronos Research describes the current dynamics as a classic rebound from oversold conditions. The market has cleared out excess long positions, creating room for growth, according to Presto Research.

Futures and options data point to a return of bullish sentiment. The market is ‘ready for growth’ after speculative longs were closed over the past two weeks, according to GSR.

According to CryptoQuant, in November, the Binance crypto exchange increased its stablecoin reserves to a record $51.1 billion. The growth of this indicator can be seen as a positive factor for the crypto market.

The potential exclusion of Strategy from the S&P 500 index and continued outflows from spot crypto ETFs could bring back bearish sentiment and trigger sell-offs, warns QCP Capital.

Bolivia will include cryptocurrencies and stablecoins in its national financial system to modernise it. Cryptocurrencies will be allowed to be used as a means of payment, savings accounts, credit products and loans. The authorities’ decision is a result of the country’s challenging economic situation.

The ECB Consumer Expectations Survey for October showed a small uptick in near-term inflation expectations, with the median 12-month outlook rising to 2.8% from 2.7% in September.

Longer-term expectations remained stable, with the three-year horizon unchanged at 2.5% and the five-year measure anchored at 2.2%. Inflation uncertainty was likewise steady, indicating consumers do not see a significant shift in the underlying trend.

On the economic front, consumers grew slightly more optimistic about growth. Expectations for GDP over the next 12 months improved to -1.1%, up from -1.2% previously. However, labor-market expectations worsened. Consumers now expect the unemployment rate to reach 11.0% in 12 months, up from 10.7% in September.

Full ECB Consumer Expectations Survey here.

The GBP/USD pair is edging higher, trading around 1.3239, following a pause in its five-day rally. While the pair has returned to positive territory, investor focus has shifted to the underlying health of the UK economy and the credibility of the newly announced budget measures.

The fundamental headwinds for sterling remain significant. Weak growth prospects, stubbornly low productivity, and persistent inflationary pressures continue to cap the currency's long-term potential.

The UK government bond market experienced a short-lived rally after Chancellor Rachel Reeves unveiled a larger-than-expected fiscal reserve and reaffirmed her commitment to strict spending control. Thirty-year gilt yields initially fell by over 10 basis points but subsequently pared these losses.

A key concern for investors is the government's fiscal trajectory. By postponing most of its proposed tax measures until after 2029 – beyond the current parliamentary cycle – the government has raised questions about its fiscal credibility. This long-dated approach leaves the pound vulnerable to future weakness, as the necessary budgetary tightening remains a distant and uncertain prospect.

Technical Analysis: GBP/USD

H4 Chart:

On the H4 chart, GBP/USD has completed a growth wave to 1.3265 and is now likely to form a consolidation range below this peak. A decisive decline and break below the 1.3210 support would trigger a corrective move towards 1.3152. Following the completion of this correction, we would anticipate the formation of a new growth structure, initially targeting a return to 1.3215. A sustained break above this level would then open the path for a more significant advance towards 1.3295. The MACD indicator supports this view of an impending pullback. Its signal line is at elevated levels above zero and has diverged bearishly from its histogram, suggesting the recent upward momentum is waning.

H1 Chart:

On the H1 chart, the pair formed a downward impulse to 1.3210, followed by a rebound to 1.3254. These two levels now define the boundaries of a consolidation range. We expect a downward breakout from this range, triggering a decline towards the 1.3160 target. This near-term bearish bias is confirmed by the Stochastic oscillator. Its signal line is below 50 and is trending downward towards 20, indicating that short-term selling momentum is building.

Conclusion

While GBP/USD is managing to hold onto recent gains, the rally appears to be on shaky ground. Fundamental doubts about the UK's fiscal and economic outlook are colliding with technical signals that suggest a near-term correction is likely. The key level to watch is 1.3210; a break below this support would signal a deeper pullback towards 1.3160, potentially offering a more attractive level from which to reassess the long-term directional bias. For any sustained bullish move to develop, a decisive break above 1.3295 would be required.

The ATR indicator is sitting near its lowest readings and is trending downward. This may reflect not only reduced trading activity over the Thanksgiving period in the US, but also uncertainty among currency traders who are weighing the many factors influencing USD/JPY at the moment.

On one hand, the US dollar is being pressured by expectations of a Federal Reserve rate cut, with Fed officials delivering notably dovish comments this week.

On the other hand, the yen’s valuation is being shaped by:

→ the economic stimulus package from Prime Minister Sanae Takaichi;

→ expectations of Bank of Japan intervention to support the weakening yen;

→ geopolitical tensions between China and Japan.

Technical Analysis of USD/JPY

The chart supports the view that the market is balanced.

Using the ascending channel that began forming after USD/JPY broke above the psychological 150 level, we can see that the pair has moved into the lower half of the channel, while the median line has shifted from acting as support to working as resistance (as shown by the arrows).

At present, USD/JPY is compressing into a triangle formed by:

→ the lower boundary — the line dividing the lower half of the channel into quarters;

→ the upper boundary — the descending trendline drawn through last week’s lower highs.

A breakout from this triangle may be sudden and tricky, so the current fall in volatility should not lull USD/JPY traders into complacency. It is entirely possible that after repeated verbal warnings, the Bank of Japan could proceed with direct intervention — an action that would almost certainly break the existing upward channel.

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Switzerland’s KOF Economic Barometer ticked higher in November, rising from 101.5 to 101.7 and signaling modest improvement in the near-term economic outlook.

KOF noted that the improvement is concentrated on the demand side. Indicator bundles tied to foreign demand and private consumption strengthened, suggesting both external orders and household activity are on firmer footing.

On the production side, however, parts of the economy remain under pressure. Indicators for financial and insurance services, as well as construction, deteriorated, revealing a mixed underlying picture.

Full Swiss KOF release here.