Markets widely expect the European Central Bank (ECB) to have halted rate cuts, which could support the euro in the near term. ECB President Christine Lagarde reiterated that the current monetary policy stance is appropriate. Meanwhile, ECB policymakers François Villeroy de Galhau and Gediminas Šimkus stated there is no reason for immediate rate cuts or hikes, as the current stance is considered "good." Lagarde noted that, given the resilience shown by the Eurozone economy amid external trade pressures, the new projections to be released by the ECB next week might revise growth forecasts upward. Speaking at an event hosted by the Financial Times on the 10th, she pointed out that the Eurozone has withstood U.S. tariff measures better than expected. She emphasized that the EU has not retaliated against these measures, the euro exchange rate remains stable, and the labor market stays robust. Based on this, following the previous upward revision, she expects growth forecasts could be raised again at the December policy meeting to reflect the positive momentum. Besides, as hawkish remarks from policymakers increase, money markets are rapidly reassessing the ECB's policy path. Traders no longer expect any rate cuts next year; current market pricing shows the probability of a 25-basis-point hike next year rises from 30% on Tuesday to 40%. Swap market data also indicates traders see a 50% chance of a rate hike by the end of 2026, while completely ruling out any cuts. This fundamental shift reflects growing policymaker confidence that borrowing costs can remain unchanged or even rise in the foreseeable future. The shift is pushing global bond yields higher and signals investors' view that the ECB's focus is shifting from stimulating the economy to consolidating inflation control achievements and adapting to economic recovery.

The Fed concluded its two-day meeting on Wednesday, deciding to cut rates by 25 basis points — the third rate cut this year. Fed officials were divided over lowering rates to the 3.50%–3.75% range, with both supporters and opponents expressing dissent. Traders viewed Fed Chair Jerome Powell's speech as less hawkish than expected, creating some selling pressure on the USD/EUR exchange rate. In addition, concerns about the Fed's independence under President Trump have intensified, potentially adding downward pressure on the dollar. Wall Street still sees White House economic adviser Kevin Hassett as the most likely candidate for the next Fed chair. Moreover, analysts believe Hassett could push for further rate cuts. Traders will closely watch speeches by Fed officials later in the day, including Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee. Any hawkish comments from Fed officials could help limit the dollar's decline in the short term.

Based on the four-hour chart, Bollinger Bands and moving averages are diverging upward. After the MACD formed a golden cross signal, EUR/USD has been rising strongly along the Bollinger Upper Band, indicating the bullish trend remains intact. RSI stands at 69, showing strong bullish sentiment, and the price is likely to test round-number levels and recent highs around 1.18 and 1.192. Regarding the weekly chart, Bollinger Bands are narrowing, the EMA12 is flattening, and the MACD and signal lines are near the zero axis. All these suggest that a trend reversal could occur at any time. If the MACD forms a golden cross, the price will likely break above 1.20. RSI is at 60, reflecting optimistic market sentiment; as long as EUR/USD does not fall effectively below EMA12, the bullish trend will persist. In the short term, buying at lows is recommended.

Trading direction: Buy

Entry price: 1.166

Target price: 1.2

Stop loss: 1.15

Support: 1.166/1.16/1.15

Resistance: 1.18/1.192/1.2

The Canadian dollar benefits from the Bank of Canada's (BOC) hawkish signals, indicating the end of the rate-cutting cycle. BOC Governor Tiff Macklem stated on Wednesday that the current interest rate level is appropriate and supportive of economic growth through structural transformation. This stance diverges sharply from that of the Federal Reserve and underscores the negative outlook for the USDCAD currency pair. Meanwhile, crude oil prices plummeted to their lowest levels since October 21, potentially curbing further gains in the commodity-linked Canadian dollar and helping to limit its depreciation. Data released on Thursday showed that Canada recorded a trade surplus of CAD153 million in September, significantly surpassing market expectations of a trade deficit. This marked Canada's first monthly trade surplus since January 2025 and elevated the U.S.-Canada trade balance to its highest level of the year. Statistics Canada reported a 6.3% increase in total exports for the month, reaching CAD64.23 billion, reversing August’s 3.2% decline. Out of 11 major product categories, 9 experienced export growth, with metal and non-metal mineral products, as well as aircraft and transportation equipment and parts, each increasing by over 20%. In physical terms, September exports grew by 4.1%, while imports declined by 4.1%, totaling CAD64.08 billion.

U.S. Department of Labor data indicates that initial unemployment claims increased by 44,000 to a total of 236,000 last week, marking the largest single-week rise since July 2021. Despite the uptick, the four-week moving average slightly rose to 216,750, suggesting that the labor market remains broadly stable. Analysts interpret this spike as primarily driven by seasonal fluctuations typical at year-end rather than a sign of significant weakness in employment conditions. Recent layoffs have not notably impacted initial claims, partly because affected employees may still be receiving severance benefits or have found alternative employment. The Federal Reserve has recently cut interest rates by 25 basis points, lowering the target range to 3.50%–3.75%, and acknowledges downside risks to the labor market, though employment remains resilient. The third-quarter trade deficit narrowed to US$52.8 billion, the lowest since 2020, driven partly by export growth. The Atlanta Fed projects annualized GDP growth of 3.5% for the third quarter, despite delays in official statistics due to Congressional shutdowns. Looking ahead, the Federal Reserve maintains an optimistic outlook for the U.S. economy through 2026, expecting economic growth to rise to 2.3%, inflation to decline to 2.4%, and the unemployment rate to stabilize around 4.4%. Chair Powell indicated that productivity gains related to artificial intelligence will support economic resilience in the future. Despite ongoing concerns over inflation and housing affordability, the Fed hints at a potential pause in rate cuts in the near term, maintaining a cautious monetary policy stance.

In the 1D timeframe, the price has broken below the EMA200 and is moving along the lower Bollinger Band, indicating a high probability of further decline towards the previous low around 1.373. Following a MACD death cross, both the MACD line and signal line have fallen below the zero-axis, signaling a transition into a bearish trend. The RSI is at 28, entering oversold territory, suggesting the short-term downtrend is ongoing. In the 1M timeframe, Bollinger Bands are converging narrowly, and SMAs are tightening. After the MACD death cross, the MACD line and signal line are attempting to re-cross the zero-axis but remain some distance away, implying the correction phase is still in progress. Support levels are identified near the EMA50 and the lower Bollinger Band at approximately 1.362 and 1.32, respectively. The RSI stands at 49, reflecting a market in a state of neutrality awaiting further direction. Therefore, it is recommended to go short before going long.

Trading Direction: Buy

Entry Price: 1.37

Target Price: 1.42

Stop Loss: 1.357

Support: 1.373, 1.37, 1.357

Resistance: 1.414, 1.42, 1.44

Attention in Switzerland is now focused on the Swiss National Bank (SNB) interest rate decision scheduled for announcement on Thursday. Markets are widely anticipating that the SNB will maintain its policy rate unchanged at 0.00%.

Inflation in Switzerland has eased toward the lower bound of the SNB's 0–2% target range. Despite this, policymakers have repeatedly indicated that the threshold for reverting to negative interest rates remains very high. The central bank also expects inflation to pick up slightly in the coming quarters, reinforcing expectations for a stable policy stance in the near term.

The Federal Reserve (Fed) cut interest rates by 25 basis points (bps) on Wednesday amid a period of elevated prices, as inflation approaches the 3% mark. Crucially, the central bank heavily implied a pause in its easing cycle, with Chair Jerome Powell reiterating that they are now in a "wait-and-see" mode and that rates currently sit in the upper range of neutrality estimates.

Powell acknowledged the inherent tension between the central bank's dual mandate. He stressed that the Fed is "well positioned" to "wait and see" how the economy evolves, having already eased policy by 75 bps this year. Powell concluded that after 175 bps of cuts, "we've moved our policy back to a level that is certainly not strongly restrictive right now," adding, "I think it is in a neutral range."

Following the rate cut announcement, markets are currently pricing in almost a 78% probability that the Fed will keep interest rates stable next month, up from 70% just before the rate cut announcement, according to the CME FedWatch tool.

Recent U.S. labor data presented a mixed picture. Initial jobless claims for the week ending December 6th rose to 236K, a considerable increase from the upwardly revised 192K the previous week, according to the Department of Labor. In contrast, continuing claims for the week ending November 29th fell to 1.838 million from 1.937 million, suggesting some stabilization in long-term unemployment. Separately, the U.S. goods and services trade balance narrowed to $-\$52.8$ billion in September, an improvement from $-\$59.3$ billion in August and better than expected.

The USD/CHF pair has recently experienced a sharp bearish impulse, reaching a local minimum of 0.7924. However, just below this point lies a significant historical support zone defined by strong candle shadows. This zone, ranging from 0.7873 to 0.7893, is where the price staged major bullish rebounds in both mid-October and mid-November. It is highly likely that the price may spike down to these levels once more to trigger liquidity before finding sustained bullish momentum.

The Relative Strength Index (RSI) on the 4-hour chart has dropped dramatically to the 20 level, entering clear and extreme oversold territory. This condition suggests that bulls could re-enter the market at any moment. Furthermore, the 100-period and 200-period Moving Averages (MAs) are situated at 0.8041 and 0.8026, respectively, while a critical local resistance level resides around 0.7995. This resistance level is anticipated to attract any potential upward correction.

Trading direction: Buy

Entry price: 0.7905

Target price: 0.7995

Stop loss: 0.7860

Validity: Dec 23, 2025 15:00:00

The Australian Bureau of Statistics (ABS) reported that the Unemployment Rate held steady at 4.3% in November, defying the consensus estimate for an increase to 4.4%. However, this stability was offset by a decline in the number of employed persons, which fell by 21.3K during the reported month. This was a drop from the 41.1K gain in October and missed the forecast of 20K, suggesting underlying weakness in the labor market.

Australian Dollar bulls remain supported by a sharp change in rate expectations. Traders no longer anticipate additional rate cuts from the Reserve Bank of Australia (RBA). Instead, the central bank may signal that its monetary policy easing cycle is complete, given persistent inflationary pressures. In the third quarter, the Consumer Price Index (CPI) surged to 3.2% year-over-year (YoY), up from 2.1% in the second quarter, confirming that inflation remains firmly entrenched. Expectations are firmly aligned with the RBA maintaining its policy rate unchanged at 3.6%. Some markets are even pricing in a rate hike as early as 2026, encouraged by strong household spending which increased by 1.3% in October.

On Wednesday, the Federal Reserve (Fed) cut interest rates by 25 basis points (bps) amid a period of elevated prices, as inflation approaches the 3% mark. However, the central bank heavily implied a pause in its easing cycle, with Chair Jerome Powell reiterating that they are in a "wait-and-see" mode and that rates are now in the upper range of neutrality.

Powell acknowledged the inherent tension between the central bank's dual mandate. He stressed that the Fed is "well positioned" to "wait and see" how the economy evolves, having already eased policy by 75 bps this year. Powell concluded that after 175 bps of cuts, "we've moved our policy back to a level that is certainly not strongly restrictive right now," adding, "I think it is in a neutral range."

Recent U.S. labor data presented a mixed picture. Initial jobless claims for the week ending December 6th rose to 236K, a considerable increase from the upwardly revised 192K the previous week, according to the Department of Labor. In contrast, continuing claims for the week ending November 29th fell to 1.838 million from 1.937 million, suggesting some stabilization in long-term unemployment. Separately, the U.S. goods and services trade balance narrowed to $-\$52.8$ billion in September, an improvement from $-\$59.3$ billion in August and better than expected.

The AUD/USD pair recently surged in a strong upward impulse following the Fed's rate cut, touching the 0.6685 level—a high not seen since September 17th. On that past occasion, the price reacted sharply downward, initiating a move that bottomed out at the local support of 0.6420. This historical rejection suggests that the pair may be establishing a broad trading range where price movement oscillates between these boundaries.

The confluence of the 100-period and 200-period Moving Averages (MAs) on the 12-hour chart, located tightly at 0.6537 and 0.6539 respectively, has provided sideways guidance since late September, adding pressure for the price to remain range-bound. Crucially, the Relative Strength Index (RSI) reached a local high of 76 on the 12-hour timeframe , entering clearly overbought territory. This high-timeframe reading suggests that the underlying momentum is exhausted. The convergence of historical resistance and extreme oversold conditions is likely to compel AUD/USD into a bearish correction, potentially driving the price back toward the 0.50 Fibonacci retracement zone, around 0.6555.

Trading direction: Sell

Entry price: 0.6686

Target price: 0.6555

Stop loss: 0.6725

Validity: Dec 23, 2025 15:00:00

Earlier this week the US Federal Reserve cut interest rates by 25 bps to a 3.50%–3.75% range, and though markets expected the move, Fed Chair Jerome Powell’s commentary hinted at an extended period without further hikes, dampening the greenback. This drove the dollar lower against the Swiss franc and other majors.

At the same time, the Swiss National Bank (SNB) kept its policy rate at 0%, and the Swiss franc drew strength on global risk aversion and safe-haven demand. As a result, USD/CHF retreated from levels near 0.8000 toward approximately 0.7950–0.7980 as CHF gains traction.

Despite this decline, there are foundational forces that could support a rebound in USD/CHF. Firstly, markets are now pricing a potential pause in easing after the recent Fed cut, which could lend support to the dollar if upcoming US data surprises to the upside. Secondly, the SNB’s commitment to holding the policy rate through 2026 suggests limited downward pressure from Swiss monetary policy alone, and at times the franc can weaken if the global market shifts back towards risk assets.

Investor sentiment toward USD/CHF remains cautious but not uniformly bearish. The broad dollar weakness of recent days has encouraged CHF strength, especially given the franc’s safe-haven status. However, sentiment may be shifting slightly as markets absorb the full impact of the Fed decision and consider that the cycle of consecutive cuts may be nearing a pause, if not a bottom. This dynamic tends to create short-term rebounds in the dollar when data show resilience, or when risk sentiment improves. With the franc’s safe-haven status potentially losing some immediate appeal amidst easing expectations for further rate cuts, USD/CHF could find demand at support. On short timeframes, traders are watching the 0.7950–0.7980 zone; if this holds and USD buyers step in, sentiment could flip toward cautious bullishness, especially into intraday dips.

USD/CHF price is currently trading near the lower region of the intra-day range. Recent candlesticks have probed below the 0.8000 psychological level, with daily trading data showing the rate has fluctuated between approximately 0.7924 and 0.8002. This suggests the market is finding interest around the lower Bollinger band of the short-term volatility envelope. The mid-band often lies near 0.7980–0.7990, and if price finds support around this area and rejects lower levels, a move back toward the mid or upper band becomes feasible.

Under Ichimoku (9,26,52) rules on M15, price trading near or slightly below the Kijun-sen and Tenkan-sen can indicate a compressed, oversold dynamic where mean reversion is likely once downward momentum hits exhaustion. If price then crosses above the Tenkan, a short-term BUY bias is confirmed. Stochastic (5,3,3) on M15 will be crucial: a bullish crossover from the oversold region (below ~20) signals a return of short-term buying momentum. A confluence of rejected lower wicks, a bullish stochastic trigger, and price stabilising above the lower Bollinger band strengthens the case for a reversal.

Entry: 0.7960–0.7970

Take Profit: 0.8015

Stop Loss: 0.7920

GBP/USD recently climbed toward 1.3400+ on the back of broad USD weakness following the Federal Reserve’s December rate cut and softer guidance, which initially pressured the greenback lower. However, price action appears to be stalling just under psychological resistance after several attempts to clear higher levels. Markets are now heavily focused on UK growth indicators and speculation around the BoE’s next move, with a Reuters poll showing a BoE rate cut widely expected at their upcoming meeting as inflation eases and economic growth slows.

Meanwhile the US dollar, though weaker post-Fed, may regain traction if macro data surprises to the upside or if risk sentiment shifts back toward safe-haven demand. Recent trading ranges show GBP/USD dancing around 1.3350 – 1.3439.The combination of an impending BoE cut and a potentially resilient USD sets a context where sterling’s recent gains may be retraced rather than extended.

Investor sentiment toward GBP/USD is mixed and leaning cautious. Although the pound has recently strengthened and hit multi-week highs, analysts and forecasts point to mounting UK economic concerns particularly slowing labour data, weak growth signals, and the looming probability of BoE easing.

This has weakened longer-term bullish conviction and increased scrutiny on the pair’s ability to sustain higher levels. Meanwhile, the recent Fed rate cut, although dovish in headline terms, was accompanied by commentary hinting at a more data-dependent outlook, which could support the USD if upcoming US data surprises positively.

Furthermore, nearly half of UK firms report high GBP volatility impacting operations, which reflects broader market discomfort with sterling’s rally and may contribute to bearish positioning.

In this environment, short-term traders may treat current peaks as corrective, positioning more aggressively on breaks back down rather than chasing further upside.

GBP/USD appears to be running into resistance near the upper Bollinger band after a series of marginal rallies into the 1.3400–1.3430 zone. Price failing to consistently close above this upper band suggests that bulls may be struggling to sustain momentum, with potential for a mean reversion back toward the mid-band around the 1.3360–1.3370 area. Ichimoku (9,26,52) on M15 would likely reflect price approaching or slightly above the Kumo cloud with Tenkan-sen and Kijun-sen flattening, indicating a loss of short-term bullish acceleration and a setup where downward pressure could emerge if price crosses back below those lines. A Stochastic (5,3,3) reading that has been in overbought territory or showing a bearish crossover near resistance would further confirm weakening upward momentum and increase the probability of a short-term dip. Together, these signals on the M15 chart imply that a push lower toward support zones is a technically reasonable expectation if bearish confirmation appears near current levels.

Entry: 1.3395

Take Profit: 1.3320

Stop Loss: 1.3445