The euro extended its recent advance against the US dollar at the start of the new week, with EUR/USD trading firmly above the 1.1750 handle as the US session approached on Monday. The pair hovered just below last week’s peak at 1.1762, underscoring the market’s increasingly constructive stance toward the single currency after a run of upbeat Eurozone data and persistent softness in the greenback.

The immediate catalyst for the move came from a stronger-than-expected Eurozone industrial production report, which helped lift broader risk sentiment and reinforced the narrative that parts of the euro area economy may be stabilising after a prolonged period of weakness. According to data released by Eurostat, industrial output in the bloc rose by 0.8% month-on-month in November, a sharp acceleration from October’s modest 0.2% increase and well above market expectations for a near-flat 0.1% gain. On an annual basis, production expanded by 2%, up from a revised 1.2% in October, providing a rare upside surprise in a dataset that has frequently disappointed investors over the past year.

The data offered some reassurance that easing inflation, improving real incomes and looser financial conditions are beginning to filter through to the real economy, particularly in manufacturing-heavy economies. While one month does not make a trend, the strength of the release was sufficient to support the euro at a time when positioning had already turned more favourable.

From a broader perspective, EUR/USD has been consolidating gains after rallying nearly 2% over the past three weeks. The pair’s recovery has been driven as much by US dollar weakness as by euro-specific factors. Markets have continued to price in a higher probability of additional interest rate cuts by the US Federal Reserve in 2025, especially as recent US data has pointed to cooling inflation pressures and a gradual slowdown in labour market momentum. Adding to the dollar’s headwinds are persistent political and institutional uncertainties, including growing speculation that Fed Chair Jerome Powell could eventually be replaced by a more dovish successor, a scenario that investors see as limiting the upside potential for US yields over the medium term.

That said, caution remains a defining feature of market behaviour. Traders appear reluctant to take aggressive directional bets ahead of a dense run of high-impact macroeconomic releases later this week. The focus will be squarely on the long-delayed US Nonfarm Payrolls reports for October and November, due on Tuesday, which are expected to provide clearer insight into the true state of the US labour market after months of data distortions. This will be followed on Thursday by the November US Consumer Price Index, a key input for Fed policy expectations.

Thursday also brings a European Central Bank policy decision, adding another layer of complexity for EUR/USD traders. While no immediate policy change is expected from the ECB, investors will scrutinise President Christine Lagarde’s guidance for clues on the timing and pace of potential rate cuts in 2025. Any hint that the ECB is less inclined to ease aggressively than the Fed could further support the euro, while a dovish tilt could cap recent gains.

From a technical standpoint, the near-term outlook for EUR/USD remains constructive despite some intraday consolidation. The pair continues to trade above its 50-period exponential moving average (EMA50), a dynamic support that has helped underpin the recovery. Price action is also aligned with a minor ascending trendline, suggesting that bullish momentum is still intact.

Importantly, the pair has repeatedly found buyers on pullbacks near the 1.17198 support zone, highlighting strong demand at lower levels. This behaviour points to a market that is increasingly comfortable accumulating euros on dips rather than chasing the dollar higher. A sustained break and daily close above 1.17629 would confirm a continuation of the bullish trend and open the door toward a test of the psychologically significant 1.1900 level.

Momentum indicators favour the upside, with the formation of higher lows reinforcing the case for further gains as long as key support holds. While upcoming US and Eurozone events could inject volatility, the balance of risks in the near term appears skewed toward further euro strength, provided EUR/USD remains above the 1.1720 area.

BUY EURUSD

ENTRY PRICE: 1.1760

STOP LOSS: 1.1620

TAKE PROFIT: 1.1900

The US dollar continued to lose altitude against the Canadian dollar at the start of the week, leaving USD/CAD trading precariously close to its lowest levels in nearly three months as investors reassess the long-term US interest-rate outlook and position ahead of key inflation data from Canada.

During late Asian trading on Monday, the pair hovered around the 1.3750 area, a level that has increasingly acted as a pressure point for the Greenback. The inability of USD/CAD to stage a meaningful rebound reflects broader weakness in the US dollar, which has struggled to attract buyers as markets price in a more accommodative Federal Reserve policy path extending into 2026.

The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, remained subdued near an eight-week low of 98.13 set late last week. Sentiment toward the dollar has been weighed down by a combination of softening US labour-market signals and growing political pressure on the Fed to ease policy more aggressively.

According to the CME FedWatch Tool, traders now see a 64.3% probability that the Federal Reserve will cut interest rates at least twice by the end of 2026. While the Fed’s most recent dot plot still suggests a policy rate of around 3.4% by 2026—implying just one additional cut from the current 3.50%–3.75% range—markets appear increasingly skeptical that policymakers will be able to maintain restrictive settings for that long if economic momentum continues to cool.

Expectations of a more dovish Fed have been reinforced by persistent political commentary from President Donald Trump, who has repeatedly argued that US interest rates remain too high. Last week, White House spokeswoman Karoline Leavitt said the president welcomed the recent 25-basis-point rate cut but believes further easing is warranted. While the Fed remains institutionally independent, investors are clearly factoring in the political backdrop as a potential source of long-term pressure on US yields.

The next major test for US rate expectations comes with the release of November’s Nonfarm Payrolls report on Tuesday. Any further evidence of labour-market softening—particularly weaker job creation or slowing wage growth—would likely reinforce expectations for additional rate cuts and deepen the dollar’s downside, especially against currencies backed by relatively steady central banks.

In contrast, the Canadian dollar has found solid footing in recent sessions, supported by growing confidence that the Bank of Canada is nearing the end of its easing cycle. In its latest policy statement, the BoC struck a notably balanced tone, reiterating that the current policy rate is “about the right level” to keep inflation close to the 2% target, provided economic conditions evolve in line with forecasts.

That message has helped anchor Canadian yields and provided a tailwind for the loonie, particularly against a US dollar facing structural headwinds from declining rate differentials. Market participants now see little urgency for the BoC to cut rates further in the near term, a stance that stands in sharp contrast to the increasingly dovish expectations surrounding the Fed.

Attention on Monday shifts to Canada’s November Consumer Price Index, due at 13:30 GMT. Headline inflation is expected to rise to 2.4% year-on-year from 2.2% in October, a move that, if confirmed, would strengthen the argument for the BoC to remain on hold. A firmer inflation print could provide additional support for the Canadian dollar and increase pressure on USD/CAD to break below key technical levels.

From a technical perspective, USD/CAD remains entrenched in a broader bearish trend. The pair declined in its most recent intraday trading session and is now probing the critical support zone around 1.3755. Price action continues to trade below the 50-period exponential moving average (EMA50), reinforcing the dominance of sellers and confirming the persistence of downward momentum.

The broader structure remains negative, with the pair tracking along a steep descending trendline that has capped upside attempts in recent weeks. However, momentum indicators are beginning to flash early warning signs. The Relative Strength Index (RSI) has rebounded modestly from oversold territory, suggesting that while the trend remains bearish, downside momentum may temporarily lose intensity.

This divergence raises the risk of short-term consolidation or a corrective bounce, particularly if Canadian CPI fails to surprise to the upside or if US data stabilizes. Still, unless USD/CAD can reclaim territory above the 1.3850–1.3900 zone, rallies are likely to be viewed as selling opportunities rather than the start of a broader reversal.

SELL USDCAD

ENTRY PRICE: 1.3755

STOP LOSS: 1.3860

TAKE PROFIT: 1.3550

Last week, Japan's macroeconomic data and policy developments exhibited complex but generally normalized trends: despite wage increases being insufficient to offset inflationary pressures, economic growth experienced a brief slowdown, and the government intensified investment incentives, with the central bank approaching a neutral interest rate zone. Market consensus anticipates that the Bank of Japan will raise interest rates at the December meeting and continue to tighten monetary policy gradually. Recent statistics indicate that in October, real wages declined by 0.7% year-on-year, even though nominal wages rose by 2.6%. However, this growth was still insufficient to offset a 3.4% increase in consumer prices, leading to a tenth consecutive month of decreased real purchasing power. Regular salaries, overtime pay, and special allowances all saw increases, yet persistent inflationary pressures continued to erode real income. Additionally, despite a tightening labor market and corporate plans to implement further wage hikes in spring 2026, current wage growth remains inadequate to fully counteract rising costs. Economically, Japan’s Q3 GDP was revised downward from an initial estimate of 1.8% to a contraction of 2.3% annually, marking the fastest decline in two years. Capital expenditure was adjusted from growth to decline; private consumption showed slight improvement, but overall demand remains subdued. Nonetheless, economists generally view this contraction as temporary, expecting a return to growth in the following quarter driven by moderate consumption rebound. On the external front, since September, the U.S. has implemented a 15% tariff on imports from Japan, creating additional pressure on exports. Policy-wise, wage and inflation trends remain focal points for market attention. A Reuters survey projects that Japan’s core CPI for November will increase by 3.0% year-on-year, remaining above the central bank’s 2% target for three and a half consecutive years, with food inflation easing somewhat amid rising energy costs. Due to sustained high prices and negative real borrowing costs, sources widely expect the Bank of Japan to raise short-term interest rates from 0.5% to 0.75% at its December 18–19 meeting. Post-meeting, the bank is anticipated to commit to future policy adjustments responsive to economic reactions to previous rate hikes, opting not to rely on an as-yet uncertain neutral interest rate as a clear policy benchmark.

The U.S. dollar struggles to attract substantive buying interest as market sentiment remains dovish ahead of the Federal Reserve, with the dollar lingering near the two-month lows reached last Thursday. Despite the Fed's cautious stance on further rate cuts, traders anticipate two more easing cycles next year. Meanwhile, U.S. President Trump announced a narrowed pool of candidates vying to succeed Jerome Powell as Fed Chair, expressing hope that the nominee will pursue a rate-cutting policy. The prospect of a Trump-led Fed Chair generating fears among dollar bulls has limited the USDJPY currency pair's momentum. Traders also appear cautious ahead of key U.S. macroeconomic data scheduled for this week, including Tuesday’s October non-farm payroll report and Thursday’s latest inflation figures. At the same time, divergent economic outlooks for Japan and the U.S. may continue to underpin the lower-yielding yen.

In the 1D timeframe, the Bollinger Bands are converging and tightening, with SMAs leveling off, indicating a potential shift in trend. Yesterday’s candlestick pattern formed a Bearish Engulfing, suggesting short-term bearish momentum; however, if prices sustain above the 155 level, there is a high probability of testing resistance at 158 or 160. Following a MACD death cross, the MACD line and signal line are retracing toward the zero-axis, but still remain somewhat apart, indicating that the consolidation phase has not been conclusively completed. The RSI reading is at 47, reflecting a predominantly cautious market sentiment. Resistance levels are identified near the upper Bollinger Band and psychological key levels at 157.4 and 160. Market offers clarity primarily around these levels. In the 4H timeframe, Bollinger Bands are diverging downward, with SMAs trending lower, confirming the prevailing downside bias. Following a MACD death cross, the MACD line and signal line dipped below zero-axis, and prices are oscillating along the EMA12, displaying a strong bearish momentum. RSI stands at 37, indicating that traders are primarily selling. Nonetheless, price action around the EMA200 suggests potential for a rebound. In the short term, it is recommended to go short before going long.

Trading Direction: Buy

Entry Price: 155

Target Price: 158.8

Stop Loss: 152.5

Support: 154.7, 153.2, 150

Resistance: 157, 158.8, 160

Holdings in SPDR Gold Shares, the world's largest gold ETF, increased by 2.29 tons last Friday to 1,053.12 tons, reflecting institutional investors' continued allocation to gold amid policy and geopolitical uncertainties. Analysts at Commerzbank noted that although the next FOMC meeting might pause rate cuts, expectations for further easing remain, and the actual magnitude of cuts could exceed current market pricing — especially with a potential leadership change at the Fed in May next year, leaving room for imagination about policy shifts and thus supporting gold prices. On the geopolitical front, the situation in Ukraine continues to provide safe-haven support. Ukrainian President Zelensky acknowledged that any peace plan requires compromise from all sides, while the U.S. and Europe have adopted a cautious stance on Ukraine's NATO membership, shifting toward offering security guarantees in exchange for Ukrainian concessions. Meanwhile, the U.S. and Ukrainian delegations will continue consultations on the peace process soon. On another front, the EU has agreed to freeze Russian central bank assets held in Europe; Russia's central bank has sued Euroclear and warned the EU against using frozen funds, indicating ongoing financial confrontation and persistent safe-haven sentiment. Looking ahead, this week will bring a series of key data releases and events that could significantly affect market views on monetary policy and economic trends. Highlights include: 1. U.S. nonfarm payrolls for October and November, plus November retail sales data, will be released on Tuesday. 2. U.S. November CPI inflation data will be released on Thursday. In addition, the Bank of England and European Central Bank will announce interest rate decisions, and preliminary PMI figures for several Western countries will be released. As this is the last full trading week before the Christmas holiday, liquidity conditions may amplify price volatility. If economic data show sticky inflation or resilient labor markets, expectations for Fed rate cuts in 2026 may be recalibrated, possibly leading to revised scenarios of "fewer cuts or even a pause," which could trigger deeper technical corrections in gold. Investors should closely monitor interactions between data and policy signals and guard against heightened volatility risks.

According to CME FedWatch data, markets currently assign a ~76% probability that the Fed will keep rates unchanged in January 2026, compared with 70% before the December rate cut announcement. Hawkish remarks from Fed officials last week may boost the dollar and pressure USD-denominated commodities. Traders will watch speeches Monday evening by Fed Governor Stephen Miran and New York Fed President John Williams for further clues. Comments from multiple Fed officials on Friday disrupted market rate-cut expectations: Cleveland Fed President Mester (voting member in 2025) favored a more restrictive stance to strengthen inflation control; Chicago Fed President Goolsbee and Kansas City Fed President Schmid both dissented from this week's Fed rate cut decision, citing still-high inflation. These statements narrowed market expectations for the 2026 rate-cut path. Coupled with tightening year-end liquidity and the transition between years, volatility was further amplified, triggering short-term concentrated selling in gold and other assets. Although the latest Fed dot plot points to only one 25-basis-point cut in 2026, this expectation remains highly dependent on incoming data, and the policy path retains flexibility.

Based on the weekly chart, Bollinger Bands are expanding upward, with price oscillating along EMA12 and the upper band, indicating the short-term uptrend remains intact. The MACD shows a "kiss of angels," indicating that upward momentum has weakened slightly, but the trend persists, with potential for pullbacks at any time. RSI stands at 76, reflecting strong bullish sentiment, while resistance levels are at 4400 and 4500. Moving to the daily chart, price is rising strongly along the upper Bollinger Upper Band, likely to challenge previous highs and round-number levels near 4381 and 4400. MACD's upward histogram has weakened, but the "kiss of angels" signal appears, typically marking continuation of the rally. Meanwhile, staying at 73, the RSI indicates overbought territory, yet higher lows suggest underlying strength. Thus, it is recommended to buy at lows.

Trading direction: Buy

Entry price: 4288

Target price: 4400

Stop loss: 4100

Support: 4200/4100/3800

Resistance: 4380/4500/5000

Recently, Ethereum has been fluctuating within the 3,000-3,150 range, with short-term price movements driven by a combination of capital flows and macroeconomic news. Data indicates that last week, Ethereum spot ETF funds experienced net inflows, with institutional buying continuing to exert marginal influence, as leading products from BlackRock, Fidelity, and others saw significant capital injections, reflecting sustained accumulation pressure on the spot market.Meanwhile, market sentiment remains "cautiously optimistic"—investors, amidst a slowdown in the Federal Reserve's rate cuts but an overarching dovish stance, are seeking risk exposure, yet concerns over liquidity and profitability continue to restrain momentum in chasing higher prices. The Fed's recent policy measures—including a recent rate cut and the resumption of short-term Treasury purchases—have temporarily lowered nominal yields and increased overall market liquidity. This environment generally supports a long-term positive outlook for digital assets. However, cautious rhetoric from the Fed Chair and officials in their statements has tempered market expectations of a swift bullish turn, resulting in Ethereum experiencing initial gains followed by declines or rapid reversals within message-driven trading windows.

In the 4H timeframe, intraday ETH has rebounded from local lows and is trading within the 3,100-3,150 range. The primary resistance level is identified at 3,450-3,500, aligning with previous highs and psychological round numbers. A high-volume breakout and sustained price action above this zone could target the next resistance at 3,700-3,800. Support levels are positioned at 3,050-3,000; a breakdown below this range might lead to a pullback toward 2,800-2,700.

In terms of technical indicators, recent candlestick patterns have surpassed the MA144 and tested it multiple times without falling below, indicating a gradual accumulation of bullish momentum. This trend suggests increasing potential for short-term upward movement.

Trading Direction: Buy

Entry Price: 3130

Target Price: 3700

Stop Loss: 2900

Valid Until: December 29, 2025 23:00:00

Support: 3025, 2908

Resistance: 3448, 3700

Driven by the Fed's dovish stance, gold prices extended their upward momentum for a fourth consecutive trading session, breaching the $4,300 threshold and reaching a new high since October 21 during the first half of Friday's European trading session.

Following Fed Chair Jerome Powell's expression of concerns about the labor market on Wednesday, the dovish-leaning Fed should generally be constructive for risk assets. Wall Street is increasingly pricing in two or more rate cuts by the Fed in 2026.

Furthermore, gold staged a record-breaking rally in 2025, with its value doubling in less than two years. We believe that the primary catalysts driving gold's price appreciation—including central bank gold accumulation, Fed rate cuts, dollar weakness, concerns regarding Fed independence, and ETF inflows—remain fully intact, while the global macroeconomic backdrop continues to be broadly constructive for the precious metal.

According to the World Gold Council, global gold demand in the third quarter of this year also reached a record high of 1,313 metric tonnes. This surge was driven by robust investment demand, including purchases through exchange-traded funds (ETFs), gold bars and coins, as well as significant net purchases by central banks worldwide.

The robust overnight rally confirms gold’s breakout from the two-week consolidation range. Moreover, oscillators on the daily chart remain deep in positive territory, propelling Friday’s move into the $4,300 handle.

However, as institutional positions initiated at $4,345 approach profit-taking levels, a pullback is imperative. The first downside target is the $4,286 zone, where fresh basing is expected. Whether price can subsequently challenge all-time highs will depend on the resilience of that support band.

Additionally, it should be noted that—due to the asynchronous gold-silver ratio—the unfinished record-high trajectory in the silver market could continue to exert upward pressure on gold prices. Meanwhile, any short positioning predicated on a pronounced retracement in gold requires a confirmed cyclical top. Such a top has yet to manifest, warranting caution against large-scale shorting.

Trade Direction: Sell

Entry Price: 4350

Target Price: 4286

Stop Loss: 4389

Valid Until: 28 December, 2025, 23:55:00

Support: 4285/4259/4247

Resistance Levels: 4345/4358/4380