The money market has already priced in the ECB's expectation of a 25 basis point rate cut in February 2026, and the euro remains below 10%. Signals indicating the imminent end of the ECB's easing cycle may help curb further euro depreciation. Currently, the euro's exchange rate is influenced by two primary factors: on one side, recent statements from ECB policymakers have provided short-term market reassurance. Executive Board member Isabel Schnabel recently clarified in an interview that, although she anticipates the next policy move will involve an interest rate hike, this is unlikely to occur "in the foreseeable future." Her comments continue the ECB's recent tone of policy patience, easing concerns about premature tightening and offering some support to the euro. On the other side, policy uncertainty emanating from the U.S. exerts an opposing pressure. Recently, President Trump's tariff remarks have heightened market safe-haven flows, bolstering the dollar's status as a safe-haven asset and indirectly restraining the euro's upward potential. Additionally, unresolved geopolitical risks, such as the Russia-Ukraine situation, remain potential external threats to the Eurozone. France's fiscal dynamics warrant particular attention. Reports suggest that France's 2025 budget may be deferred for review until next year. This technical postponement could temporarily ease pressure on French government bonds and somewhat alleviate broader pressures within the European fixed income markets. However, in the long term, it does not address the fundamental divergence between fiscal discipline and economic growth within the Eurozone. Data shows that Germany's import prices increased by 0.5% month-on-month, exceeding the forecasted 0.1%, with a smaller-than-expected annual decline, implying that imported inflationary pressures may not be easing as quickly as anticipated, adding complexity to the ECB's policy outlook.

On December 23, preliminary data released by the U.S. Bureau of Economic Analysis (BEA) indicated that the real GDP growth rate for the third quarter expanded at an annualized quarterly rate of 4.3%, exceeding the forecast of 3.3% and the previous quarter's 3.8%. The core Personal Consumption Expenditures (PCE) Price Index advanced at an annualized quarterly rate of 2.9%, matching expectations and up from 2.6%. These figures reflect a robust expansion driven by strong consumer and corporate spending, coupled with a more stable trade environment, marking the fastest growth pace in two years. This delayed economic report highlights the economy's resilience amid the reversal of tariffs implemented during the Trump administration. Due to a record-long government shutdown, the BEA canceled the initial GDP estimate scheduled for release at the end of October. Typically, the agency releases three quarterly growth estimates, with minor adjustments as data is finalized; however, this quarter will see only two updates due to the shutdown. While economists anticipate that the government shutdown may exert downward pressure on fourth-quarter growth, market sentiment remains cautiously optimistic about the outlook through 2026. Analysts project that with household receipts of tax refunds and a potential Supreme Court ruling anticipated to overturn President Trump's extensive global tariff policies, the economy is expected to experience a moderate rebound next year. Robust economic data aligns with the Federal Reserve's latest outlook. Fed Chair Jerome Powell emphasized that accommodative fiscal policies, expenditures on artificial intelligence data centers, and sustained household consumption are the primary drivers for the central bank's forecast of accelerated economic growth in the coming year. However, some officials remain hesitant to pursue further significant reductions in borrowing costs, citing persistent inflation above the Fed's 2% target. The report indicates that the favored inflation indicator, the core Personal Consumption Expenditures (PCE) Price Index—excluding food and energy—rose by 2.9% in the third quarter. Due to the government shutdown, the Bureau of Economic Analysis has yet to reschedule the release dates for October and November PCE data. Based on current inflation and growth trends, policymakers now expect only one cut in interest rates in 2026 after three consecutive rate reductions earlier this year.

In the 1D timeframe, Bollinger Bands for EURUSD are expanding upward with the bands opening higher, and the SMAs are diverging upward. After the MACD generates a golden cross signal, the price has surged strongly along the upper Bollinger Band, indicating an ongoing bullish trend. However, in the short term, approaching the 1.18 psychological level has increased selling pressure, suggesting a potential pullback to the EMA12 support at around 1.173 before another upward move. The RSI is currently at 69, reflecting strong bullish market sentiment. Resistance levels are identified near the psychological 1.18 mark and previous highs at approximately 1.192. In the 1W timeframe, the Bollinger Bands are narrowing, with the EMA12 flattening and the MACD's MACD line and signal line reverting toward zero-axis, signaling a potential trend reversal. The MACD is approaching a golden cross; if confirmed, the price is likely to break through 1.20. The RSI stands at 61, indicating an optimistic market outlook. As long as the price remains above the EMA12 in the short term, the bullish trend is expected to persist. It is recommended to go long at the lows in the short term.

Trading Direction: Buy

Entry Price: 1.174

Target Price: 1.2

Stop Loss: 1.15

Support: 1.166, 1.16, 1.15

Resistance: 1.18, 1.192, 1.2

Recent surge in global risk factors—localized geopolitical tensions, de-globalization debates, and concerns over rebalancing the U.S. dollar system—has led to a significant increase in risk aversion, prompting investors and central banks to augment holdings of physical commodities and ETFs; concurrently, market expectations of continued Federal Reserve rate cuts over the coming months have reduced the opportunity cost of holding non-yielding assets, thereby enhancing the appeal of precious metals. The World Gold Council and mainstream media have documented ongoing net inflows into gold ETFs and central bank purchases since the beginning of the year. These "physical demand plus liquidity factors" provide fundamental support for the sustained rally of gold prices after breaking through technical resistance.

In the 1D timeframe, gold exhibited a strong breakout above the 4500.00 level today, initially reaching a high of 4525.79. However, during the Asian trading session, a retracement was observed, indicating selling pressure near the 4525.00-4540.00 resistance zone. The Relative Strength Index (RSI) signals overbought conditions, suggesting an increased risk of short-term correction.

Currently, a decisive breakout above the recent resistance zone of 4525.00-4540.00 could open further upward potential, with the next target likely around the Fibonacci 0.786 extension at 4718.00. Key support levels are identified at 4420.00-4400.00; should this support be breached, a pullback toward 4300.00-4250.00 is possible.

Trading Direction: Sell

Entry Price: 4495.00

Target Price: 4390.00

Stop Loss: 4550.00

Valid Until: January 7, 2026 23:00:00

Support: 4420.00, 4380.00

Resistance: 4525.00, 4540.00

During Friday’s European session, Gediminas Šimkus, European Central Bank (ECB) policymaker and Governor of the Bank of Lithuania, noted that risks to both inflation and economic growth have increasingly tilted to the downside.

These comments follow last week’s decision where the ECB maintained its key interest rates for the fourth consecutive meeting. The Deposit Facility remains at 2.00%, the Main Refinancing Operations rate at 2.15%, and the Marginal Lending Facility at 2.40%, a move that aligned perfectly with market consensus. In its policy statement, the ECB Governing Council reaffirmed its commitment to stabilizing inflation at the 2% medium-term target through a data-dependent, meeting-by-meeting strategy. During the post-meeting press conference, President Christine Lagarde clarified that neither rate hikes nor cuts were discussed, emphasizing that the bank remains cautious and cannot provide explicit forward guidance amidst the current climate of global trade uncertainty.

Market sentiment was further shaped by the release of the Reserve Bank of Australia (RBA) December meeting minutes. The records reveal that board members are losing confidence in whether the current monetary policy settings remain sufficiently restrictive. Evidence suggests that inflationary pressures may prove more persistent than previously anticipated, prompting a shift in the central bank’s internal dialogue.

The RBA underscored a strictly data-dependent approach moving forward, noting that several key inflation indicators will be released before the February meeting. Policymakers discussed the potential necessity of a rate hike at some point in 2026, stressing that more time is required to adequately assess the structural persistence of price pressures. Current market pricing reflects this cautious stance; while 30-day Interbank Cash Rate futures imply a low probability of an immediate hike, expectations for a more restrictive policy further down the line remain intact. Furthermore, Australian consumer inflation expectations rose to 4.7% in December from a three-month low of 4.5%, reinforcing the RBA’s hawkish bias.

The EUR/AUD pair is currently developing a classic Inverse Head and Shoulders pattern, a technical formation typically signaling a trend reversal from bearish to bullish. This structure is identified by a critical support zone and a subsequent lower peak (the "head"). As the price approaches the right "shoulder," the pair is testing a crucial support level at 1.7585. This specific price point has triggered significant bullish rebounds on multiple occasions in the past, adding significant technical weight to the potential for a new upward impulse from this zone.

From a momentum perspective, the Relative Strength Index (RSI) has declined to the 31 level, rapidly approaching oversold territory following a period of strong downward pressure. Meanwhile, the 100 and 200-period Moving Averages (MAs) are currently situated at 1.7647 and 1.7717, respectively. These averages are hovering just above the current price action; a decisive break and close above these levels could serve as a catalyst, accelerating the bullish momentum toward higher targets.

However, traders should exercise caution: a breakdown below the local low of 1.7480 would effectively dissolve the Inverse Head and Shoulders pattern. In such a scenario, the bullish setup would be invalidated, leaving the pair exposed to a new bearish leg and further downside expansion.

Trading direction: Buy

Entry price: 1.7580

Target price: 1.7788

Stop loss: 1.7480

Validity: Dec 31, 2025 15:00:00

CADJPY is currently trading near 114.29, with today’s intra-day range roughly between 112.84 and 114.46. The pair bounced back from the lower end of this range earlier in the session, suggesting that buyers are defending major intraday support.

The broader macro context shows the Japanese yen remaining structurally weak, even after recent intervention warnings from Japanese authorities and short-term strength in other crosses; this sustained yen weakness favors higher CADJPY on a short-term basis. Meanwhile, the Canadian dollar has steadied on mixed domestic data and modest improvements in oil prices, which help maintain CAD demand relative to JPY.

Sentiment for CADJPY is still skewed toward risk-on FX behavior, largely due to yen depreciation and relative CAD resilience. Yen weakness has been driven by the Bank of Japan’s cautious guidance higher rates but no clear hawkish path which makes carry trades (borrowing cheap yen to invest in higher-yielding currencies like CAD) attractive in the short run.

Despite official warnings about intervention to arrest excessive yen moves, traders remain willing to maintain long positions against JPY unless a clear shift in policy or intervention materializes; this creates an environment where rallies can persist into technical zones where buyers feed off price momentum rather than fresh fundamentals.

On the M15 timeframe, price structure shows recent demand near the lower range support (around 112.84–113.00), with subsequent candles reclaiming and stabilizing above the mid-band (20-period SMA) of Bollinger Bands a bullish sign indicating that the short-term average is serving as support rather than resistance. Continued higher closes above the mid-band suggest that the path of least resistance remains upward.

The Ichimoku (9,26,52) indicator on M15 is tilted positively as price action hovers around or above the cloud after pullbacks, with the trend generally favouring upside when the Tenkan Sen (conversion line) remains above the Kijun Sen (base line) and supports higher price levels.Stochastic (5,3,3) readings on M15 reflect resets near neutral after dips, with upward crossovers typically occurring as price rebounds a pattern that reinforces short-term bullish momentum if buyers continue to defend intraday support around 113.0–113.5.

Entry: 113.90

Take Profit: 115.30

Stop Loss: 112.65

The U.S. Bureau of Economic Analysis reported that the economy expanded at a robust annualized rate of 4.3% in the third quarter. This figure significantly outperformed market expectations of 3.3% and surpassed the previous estimate of 3.8%. Accompanying this growth, inflation metrics within the Gross Domestic Product (GDP) report remained firm: the GDP Price Index rose by 3.7%, while Personal Consumption Expenditures (PCE) increased by 2.9%, with PCE Prices climbing 2.8%.

Despite strong growth, the manufacturing sector showed signs of cooling. Durable Goods Orders fell by 2.2% in October, reversing a prior gain of 0.7%. Orders excluding defense dropped by 1.5%, and while orders excluding transportation saw a marginal 0.2% increase, overall Industrial Production slipped by 0.1% month-over-month.

The divergence among Federal Reserve officials continues to shape market sentiment. Fed Governor Stephen Miran remarked on Monday that recent data should steer policy in a more "dovish direction," warning that failing to ease policy could heighten recessionary risks. Conversely, Cleveland Fed President Beth Hammack told The Wall Street Journal on Sunday that she sees no immediate need for rate cuts, citing persistent inflationary threats and suggesting that rates could hold within the 3.50%–3.75% range through the spring. Adding to the debate, National Economic Council Director Kevin Hassett noted on Tuesday that the Fed is moving too slowly in reducing rates despite evidence of faster-than-expected economic growth.

In Switzerland, the Swiss National Bank (SNB) reiterated its unchanged policy stance. In its Q4 Quarterly Bulletin, the institution confirmed it maintained its policy rate at 0%, viewing medium-term inflationary pressures as largely contained. The SNB considers the current setting appropriate to support economic activity while ensuring price stability. This assessment aligns with the latest Swiss ZEW Survey for December, which fell to 6.2 from 12.2. While this decline in sentiment points to a more cautious economic outlook, it is not deemed severe enough to force the central bank into immediate monetary tightening.

The USD/CHF pair is currently testing a pivotal support level at 0.7874, a zone that has successfully triggered bullish rebounds on three separate occasions. Specifically, the price found firm buyers at this level on October 16th and November 14th. The failure of the bears to decisively break this floor increases the statistical probability of a bullish recovery from this region.

Technical indicators further support a potential reversal. The Relative Strength Index (RSI) has plunged to the 25 level, signaling extreme oversold conditions that typically attract value buyers. On the upside, the 100 and 200-period Moving Averages (MAs) are positioned at 0.7985 and 0.8004, respectively. These averages are converging near a critical resistance level at 0.7983.

This area is of particular interest as it represents a massive confluence zone, housing both the 0.50 and 0.618 Fibonacci retracement levels.

This cluster of technical indicators is expected to act as a significant "price magnet," drawing any potential bullish impulse toward the 0.7983 target. However, a decisive close below the 0.7874 support would invalidate this bullish setup and open the door for a deeper correction.

Trading direction: Buy

Entry price: 0.7873

Target price: 0.7983

Stop loss: 0.7830

Validity: Dec 31, 2025 15:00:00

Gold prices have surged recently, with prices trading around $4,490–$4,510/oz as of the latest market prints breaking the key psychological $4,500 level for the first time and setting fresh all-time highs. This rally is powered by heightened safe-haven demand amid geopolitical tensions and expectations of further U.S. rate cuts, which reduce the opportunity cost of holding non-yielding assets like gold.

On the M15 timeframe, BTCUSD’s tight price action around these peak levels shows wavering upward momentum: repeated tests near the highs without extensions often indicate that participants are hesitant to chase, creating fertile ground for short-term bearish counter moves. The concentrated price behavior near all-time highs suggests exhaustion rather than structural breakdown which is a classic sell-the-rally setup on lower timeframes.

Sentiment remains strongly bullish on a macro level, as investors have flocked to gold throughout 2025, pushing prices up more than 70% year-to-date. Central bank buying, monetary easing expectations, and persistent geopolitical risk narratives have underpinned this rally.

However, such extreme rallies often coincide with sentiment saturation: when an asset climbs into record territory, the marginal buyer becomes scarcer and profit-taking becomes more prevalent than fresh allocation. On M15, this dynamic manifests as shorter candles, higher wicks, and rapid rejection at peaks behavior typical ahead of corrective pullbacks rather than continuous breakouts.

On M15, price has extended well above the mid-band toward the upper band with historically thin holiday liquidity. Extended excursions beyond the upper band from overbought conditions often precede mean reversion toward the mid-band or even lower. With bands already wide, the likelihood of squeeze or pullback increases if short-term support weakens.

Ichimoku (9,26,52): The cloud is now acting as dynamic support below price, but the premium location far above recent value zones suggests buyers may struggle to absorb more risk at these heights. Stalled or flattening Tenkan/Kijun lines near the all-time highs would signal waning short-term bullish momentum and raise the probability of corrective rotations.

Stoch (5,3,3): On the M15 chart, Stoch oscillators are extended toward overbought and can turn downward before price does a leading sign that momentum is exhausted at extremum levels. A downward cross from these zones is a classic technical trigger for short entries before deeper pullbacks unfold.

Entry: $4,510

Take Profit: $4,455

Stop Loss: $4,530