The New Zealand Dollar strengthened in early European trading on Thursday, stabilizing above the mid-0.5700s and briefly advancing toward the 0.5780 region—levels last seen nearly five months ago. The rebound reflects a broader recalibration in FX markets as traders weigh growing expectations of Federal Reserve rate cuts against a structurally more resilient policy stance from the Reserve Bank of New Zealand.

The US Dollar attempted a modest comeback after the People’s Bank of China set the daily USD/CNY midpoint higher than markets anticipated, signaling Beijing’s unease with excessive yuan weakness. Typically, a stronger fixing would offer the Greenback some breathing room, but the reaction proved limited and short-lived. Markets remain firmly anchored to the evolving US macro narrative, where softening labor data continues to reinforce the case for earlier and deeper Fed rate cuts.

This week's ADP report—a widely tracked proxy for private-sector hiring—showed an unexpected contraction in November employment. This surprise decline has amplified concerns that the US labor market, long considered the backbone of the US economic resilience, may be losing momentum more rapidly than anticipated. For Fed officials, who meet next week, the data adds pressure to pivot toward easier monetary policy sooner rather than later.

Traders are now pricing a meaningful probability of a rate cut as early as next week, with several more expected throughout next year. From a market psychology standpoint, sentiment toward the US Dollar remains firmly capped by falling Treasury yields, a moderating inflation trajectory, and weakening labor indicators.

Domestically, the New Zealand Dollar enjoyed an additional boost following a significant leadership change at the Reserve Bank of New Zealand. Anna Breman, formerly the Deputy Governor of Sweden’s Riksbank, has taken the helm as RBNZ Governor, replacing Adrian Orr.

Breman inherits an institution that has already moved into a late-cycle pause after delivering a rate cut in November and signaling the end of its easing phase. This stance stands in contrast to the Federal Reserve, which appears increasingly poised to shift into a full easing cycle next year. That divergence remains structurally supportive for the New Zealand Dollar, particularly given New Zealand’s relatively firmer inflation outlook and a labor market that has not deteriorated as sharply as its US counterpart.

While New Zealand’s economic calendar offers little additional guidance this week, global markets will pivot sharply toward Friday’s long-delayed US Personal Consumption Expenditures (PCE) Price Index—Washington’s preferred inflation gauge. Economists expect the report to show inflation cooling but still sticky above the Fed’s 2% target. A hotter-than-expected print could easily reignite US Dollar strength and challenge NZD/USD’s recent breakout, while a soft reading may accelerate bullish momentum.

From a technical perspective, NZD/USD has staged a decisive breakout above its multi-week descending channel, signaling a notable shift in market structure from bearish to bullish. Price action has established a consistent rhythm of higher highs and higher lows, supported by a clean break above the 50-day EMA—a key indicator watched by momentum traders.

The pair is currently undergoing a retest of the former channel resistance, now flipped into support near 0.5770–0.5780. A successful confirmation of this level would likely embolden buyers and open the path toward the next major resistance zone around 0.5990—a region that also aligns with a psychological round-number barrier and a prior supply zone visible on the daily chart.

Momentum indicators remain constructive, suggesting the market could sustain upward pressure as long as price holds above 0.5730. However, the upcoming US PCE release represents a potential volatility catalyst that could either validate the breakout or trigger a corrective pullback.

BUY NZDUSD

ENTRY PRICE: 0.57650

STOP LOSS: 0.5650

TAKE PROFIT: 0.5990

USD/JPY extended its decline on Thursday, sinking to fresh two-week lows as renewed expectations for a Federal Reserve rate cut, weaker US data, and political speculation weighing on the dollar overshadowed early support from the Bank of Japan.

The pair’s early Asian-session rebound stalled at 155.50, a level that has repeatedly capped upside attempts this week. The failure to break higher triggered renewed selling pressure during the European session, pushing USD/JPY through Monday’s low of 154.65 and briefly touching the 154.50 region—a level last seen two weeks ago.

The move reflects a broader shift in sentiment: the market has gradually unwound dollar-long positions, with investors increasingly convinced that the Federal Reserve will begin easing as early as next week. Even cautious remarks from the Bank of Japan were not enough to reverse the trend.

Bank of Japan Governor Kazuo Ueda offered a mild lift to the dollar earlier in the day, signalling that the BOJ remains committed to tightening policy in the coming months. Ueda reiterated that Japan is transitioning away from its ultra-loose monetary stance, though he admitted uncertainty regarding how far interest rates might eventually rise. Markets viewed his comments as supportive of gradual yen strength, but not forceful enough to materially shift the near-term policy divergence narrative.

What truly weighed on the dollar, however, was renewed pressure on the Federal Reserve’s credibility and trajectory. ADP employment data, released Wednesday, showed an unexpected contraction in private payrolls for November—adding to signs that the US labour market is beginning to cool more rapidly than anticipated. The sudden deterioration increased expectations that the Fed will deliver not just one cut, but potentially signal a broader easing cycle heading into Q1.

Traders are now watching Thursday’s US Jobless Claims, which could reinforce the growing case for easier policy. But the data may only serve as a prelude to the week’s main event: the long-delayed US Personal Consumption Expenditures (PCE) price index for September, scheduled for release Friday. With inflation softening and labour market conditions weakening, a dovish shift from the Fed appears increasingly likely.

Adding another layer of uncertainty, speculation surfaced in Washington that Kevin Hassett, former White House economic adviser under Donald Trump, may be under consideration to replace Jerome Powell when the Fed Chair’s term expires in May. According to a Financial Times report, Hassett would be expected to pursue a significantly more accommodative policy agenda aligned with Trump’s preference for low rates and cheap borrowing conditions.

That report rattled fixed-income markets—already sensitive to political interference in monetary policy—and intensified bearish pressure on the US Dollar. Bond investors expressed concern that a shift toward politically motivated easing could weaken the dollar’s structural support at a time when fiscal risks remain elevated.

From a technical perspective, USD/JPY is showing clear signs of a deeper bearish correction after repeated failures to sustain gains above the 155.50–156.00 resistance band. Momentum has shifted firmly toward the downside, with the H4 chart forming a succession of lower highs, indicating fading bullish pressure.

A decisive break below 154.50 would likely accelerate downside momentum, opening the door toward 152.80, which aligns with a significant Fibonacci and structural support zone. A deeper extension could target the 151.50 region—an area where buyers previously defended aggressively following April’s BOJ-related volatility.

For now, the bearish outlook remains intact as long as the pair trades below 156.50, a level that would need to be reclaimed to neutralize downside risk and restore bullish momentum.

SELL USDJPY

ENTRY PRICE: 154.80

STOP LOSS: 156.50

TAKE PROFIT: 151.50

During the European session on Thursday, gold prices remained below the 4,200 mark, staying defensive but without a clear bearish trend, and holding above the weekly low. The US dollar attempted a mild rebound after touching its lowest level since late October on Wednesday, which acted as a short-term headwind for gold. The World Gold Council maintained its view that gold may trade within a range next year, while strong upside potential cannot be ruled out.

The World Gold Council noted that gold delivered a remarkable performance in 2025, posting more than 50 new all-time highs and returning over 60%. This performance was supported by rising geopolitical and economic uncertainty, a weaker US dollar, and strong price momentum. Both investors and central banks increased their allocations to gold, seeking diversification and stability.

Looking ahead to 2026, geo-economic uncertainty will shape gold’s outlook. Gold prices generally reflect consensus macro expectations; if current conditions persist, gold may continue to trade within a range.

However, as this year's developments show, 2026 could again deliver surprises. If economic growth slows and interest rates fall further, gold could rise moderately. In a deeper global downturn—characterized by elevated risks—gold may perform strongly. Conversely, if policies implemented by the Trump administration prove successful, economic growth could accelerate, geopolitical risks could decline, interest rates could rise, and the dollar could strengthen, thereby pressuring gold prices lower.

Other factors—such as central bank demand and gold recycling trends—may also influence the market. Most importantly, in a persistently volatile environment, gold’s role as a source of diversification and stability remains critical.

Gold has repeatedly failed to break through the 4,245–4,250 zone, indicating that the previous trendline break remains influential, favoring the bears. However, signs of stabilization on the hourly chart suggest that downward momentum may be finding support.

Still, for bulls to push higher, continuous corrections within the uptrend are essential. First, gold must break above yesterday’s high at 4,242, and any pullback must remain above the intraday low at 4,174; otherwise, the corrective phase will be extended again. As a result, renewed volatility may emerge as bulls and bears compete for control.

On the positive side, the 4,245–4,250 area may continue to act as strong resistance toward 4,277–4,278. A break above this region could open a move toward the 4,300 psychological level. Sustained gains above that level would be viewed as a key bullish signal and pave the way for further upside in the near term.

Trade Direction: Buy

Entry Price: 4186

Target Price: 4350

Stop Loss: 4152

Valid Until: December 20, 2025 23:55:00

Support: 4188 / 4174 / 4164

Resistance Levels: 4208 / 4217 / 4241

GBPJPY strengthened for a second straight session on Thursday and retreated back below 207.00 during the European session. Spot prices are approaching the recent top, prompting cautious bullish positioning.

The recent rise in the pound was supported by the easing of UK budget uncertainty and a broadly weaker dollar. This in turn has been viewed as a positive factor for GBPJPY. However, slowing inflation and cooling labor market conditions have led markets to widely expect the Bank of England (BoE) to cut rates later this month, limiting aggressive GBP long bets.

In Japan, the yen continues to maintain relative strength, mainly supported by the BoJ’s hawkish stance, and this has capped further upside in GBPJPY. Three Japanese government sources reported that the BoJ is highly likely to raise rates in December, and the government is expected to tolerate the decision.

Sources indicated the BoJ appears ready to raise its policy rate from 0.5% to 0.75%, a signal echoed by Governor Kazuo Ueda in his speech on Monday. This would be the first hike since January.

One source stated: “If the BoJ wants to raise rates this month, they can go ahead. That is the government’s stance.” He added that a December hike is virtually certain.

Ueda said Monday that the BoJ would consider the “pros and cons” of a rate hike this month, suggesting a high likelihood of action at the December 18–19 meeting. His remarks drove market pricing to roughly an 80% probability of a December hike, although some participants are watching how dovish Prime Minister Sanae Takaichi’s administration might react. Market focus may shift toward how far the BoJ signals rates could ultimately rise, a topic on which Ueda remains deliberately vague.

GBPJPY resumed its upward intraday trajectory, once again breaking above the 207.00 level. The uptrend from 184.35 continues and is poised to retest the 208.09 high. A firm break above this resistance would confirm the resumption of the long-term bullish trend.

However, with a December BoJ rate hike almost certain, bullish conviction is limited. A break below the 205.17 support would turn the outlook bearish, potentially triggering a deeper correction toward the 55-day moving average (currently at 203.12).

Trade Direction: Sell

Entry Price: 206.85

Target Price: 203.12

Stop Loss: 208.50

Valid Until: December 21, 2025 23:55:00

Support: 206.26 / 205.46 / 205.21

Resistance Levels: 207.22 / 207.35 / 207.82

The Reserve Bank of New Zealand announced last week a 25 basis point reduction in the official cash rate to 2.25%. The central bank indicated that future monetary policy adjustments will be contingent on economic growth and inflation prospects, with analysts suggesting that the current easing cycle may be nearing an end. This could potentially strengthen the New Zealand dollar exchange rate. In her inaugural public appearance as the new Governor, Anna Breman clarified the bank's future policy priorities. During her address to the Parliamentary Finance and Expenditure Committee, she emphasized that the Reserve Bank remains committed to its core mandates: maintaining low and stable inflation, ensuring financial stability, and promoting a secure and efficient payments system. While acknowledging that economic growth and employment levels influence inflation dynamics, Anna Breman underscored that the primary tool of monetary policy—the official cash rate—is fundamentally aimed at controlling inflation. She highlighted that high inflation disproportionately impacts low-income households and, in the long term, could hinder healthy employment market development. Regarding the relationship between fiscal and monetary policy, she delineated responsibilities, stating that fiscal policy falls under the jurisdiction of the government, while the Reserve Bank's focus is on inflation targeting. The New Zealand economy is currently experiencing localized adjustments, characterized by a surplus in real estate supply and softening asking prices, shifting market dominance toward buyers. Meanwhile, the new Governor has explicitly prioritized inflation control, indicating that monetary policy in the near term is likely to retain a tightening bias to stabilize the macroeconomic environment.

The persistent weakening of the U.S. dollar index reflects market confidence in the Federal Reserves imminent interest rate cut cycle next week. According to the CME FedWatch Tool, the implied probability of a 25 basis point rate cut has risen to 89%. This dovish pricing continues to pressure the dollar, as investors adjust positions to accommodate a more accommodative monetary policy stance, impeding substantial rebound prospects. Concurrently, the unexpectedly sluggish ADP private payrolls report has further weighed on the dollar. Data indicates a decline of 32,000 private sector jobs in November—the largest drop since March 2023—significantly below market expectations of a 40,000 gain. This decline underscores increasing employment market pressures amid the Feds policy pivot, with small businesses bearing the brunt of layoffs. Companies with fewer than 50 employees shed a total of 120,000 jobs, including 74,000 layoffs from firms with 20 to 49 employees. Conversely, large enterprises with over 50 employees added 90,000 jobs, highlighting notable labor market segmentation. Signs of a weakening labor market are also reflected in wage data. A report published in collaboration with Stanford Digital Economy Lab reveals that turnover workers experienced a 6.3% increase in compensation, the lowest level since February 2021. Employees remaining in their current roles saw a wage growth of 4.4%. This data is derived from payroll records covering over 26 million private-sector employees in the U.S. Historically, economists have generally viewed the labor market as characterized by low hiring and low firing activity; however, recent layoffs and announced restructuring plans by major corporations such as Apple and Verizon Communications may contribute to rising unemployment rates.

In the 1M timeframe, the Bollinger Bands are narrowing, while SMAs are flattening, suggesting a potential trend reversal. Last month formed a doji candlestick pattern, followed this month by a bullish upward open, with a likely rebound toward the EMA50 at approximately 0.61. The MACD momentum shows weakening bearish divergence, and the RSI is at 44, reflecting prevailing bearish sentiment. However, the absence of lower lows suggests a bullish divergence, indicating a continuation of the upward correction. In the 4H timeframe, the Bollinger Bands are expanding upwards, with SMAs diverging upwards, and the MACD has formed a golden cross without the MACD line and signal line retracing near the zero-axis. This indicates a bullish trend, although the upward momentum is waning, leading to a short-term sideways consolidation. The RSI stands at 66, with market participants predominantly buying. If the price remains sustainably above 0.57, there is a high probability of a rally toward approximately 0.583. It is recommended to go long at the lows in the short term.

Trading Direction: Buy

Entry Price: 0.574

Target Price: 0.61

Stop Loss: 0.566

Support: 0.57, 0.566, 0.55

Resistance: 0.58, 0.583, 0.61

The market's focus is now squarely on next week's FOMC meeting and the incoming data slate. With a string of softening macro prints, the implied probability of a Fed cut has been repriced higher, dragging both the DXY and real 10-yr UST yields lower and thereby providing a structural tail-wind for gold. However, investors remain cautious amid the tug-of-war between rate-cut expectations and safe-haven demand, frequently taking profit after short-term gains and leaving gold prices whipsawing within a tight range.

ETF inflows and the continued bid from official-sector buyers (notably EM central banks) still form the medium-term demand floor, but fast-money positioning is hyper-sensitive to scheduled macro catalysts (NFP, PCE) as well as headline-driven geopol risk. Any print or headline that deviates from consensus can trigger an outsized volatility spike.

Moreover, global-rate complex and sovereign-bond flow dynamics are exerting cross-asset gravitational pull on precious-metal valuations. In the Asian session, a tail-less, exceptionally high bid-to-cover ratio at the 10-yr JGB reopening compressed the benchmark yield by around 4 bp. This regional duration richening, convolved with a softening DXY, is re-pricing the cross-currency carry of gold and amplifying physical uptake in yen terms. With the Fed in blackout, the market is warehousing delta risk into tomorrow's claims and core PCE releases, opting for a "tactical sideline" posture that is powering rapid risk-off/risk-on whipsaws between safe-haven bullion and cyclical beta.

At the macro level, the dominant fundamental narrative today is that dovish policy repricing supplies cyclical tailwinds, yet event-driven headline risk and systematic profit-taking are jointly imposing an asymmetric ceiling that frustrates the emergence of a sustained directional extension.

From the daily chart, price action has completed a textbook symmetrical-triangle breakout. The clearance of the 4245 structural high validates the pattern and projects the next measured-move objective to 4300.

Immediate short-term resistance is now the 4200–4241 band. A high-conviction, volume-confirmed breakout followed by a daily close above 4241 activates the 4300 extension. Support is watched at 4175–4160. Violation on a closing basis would open a mean-reversion probe toward the 4130–4100 liquidity pocket.

Technically, the simple-moving-average architecture remains in perfect bullish order, underpinning trend persistence. RSI is holding in the upper-neutral band, evidencing positive momentum divergence without extreme overbought conditions.

A thin-volume, news-driven spike into the 4241–4300 corridor would flag a bull-trap and elevate the probability of an intraday bullish-to-bearish reversal (technical give-back).

Trade Direction: Buy

Entry Price: 4190.00

Target Price: 4290.00

Stop Loss: 4150.00

Valid Until: December 18, 2025, 23:00:00

Support: 4175.05/4163.82

Resistance Levels: 4264.66/4300.00