Following Governor Ueda’s deliberately ambiguous guidance on 9 December, USDJPY has declined for a third consecutive session.

The Reuters poll conducted 2–9 December shows that most economists expect the Bank of Japan (BoJ) to raise its policy rate by 25 bp to 0.75% at the December meeting and to lift borrowing costs to at least 1% by end-September 2026.

According to sources, the BoJ is set to deliver its first rate hike since January at the December meeting. The government led by Prime Minister Sanae Takaichi is expected to tolerate the move, given upside inflation risks and a weak yen. 90% of economists surveyed (63 of 70) now forecast that the BoJ will raise the short-term policy rate from 0.50% to 0.75% next week, a sharp increase from 53% in last month’s poll. Just over two-thirds of respondents (37 of 54) expect the policy rate to reach at least 1.00% by end-September 2026.

Scepticism that the BoJ will deliver a 1.00% policy rate—or anything higher—is containing JPY appreciation. Despite recent BoJ guidance pointing to a December hike, upside pressure on the yen has remained modest and USDJPY is still trading above 155.00.

Until the Bank issues a decisively hawkish signal and commits to pushing the real policy rate further into positive territory, investors are unlikely to build meaningful long-JPY exposure.

An intraday break below the 156.00 support shelf opens the door to a deeper pullback. Daily oscillators, however, are still in bullish territory, so initial demand is expected in the 155.00–154.68 demand zone, which is the lower bound of the recent range. A daily close below 154.35 would flip the short-term bias to bearish.

Conversely, a sustained bullish rebound in USDJPY through the 156.00 handle would likely lift the spot price toward the 156.60–156.65 supply zone and ultimately to the 157.00 area—the two-week high printed on Tuesday. Follow-through buying should then pave the way for a further extension higher.

Trade Direction: Buy

Entry Price: 155.20

Target Price: 160.82

Stop Loss: 153.60

Valid Until: 27 December, 2025, 23:55:00

Support: 155.15/154.67/154.33

Resistance Levels: 156.19/156.95/157.91

During Thursday’s European session, gold rebounded moderately after touching around 4,204, but overall remained within a downward trend. The US dollar was supported by dip-buying and partially recovered the losses seen after Wednesday’s Fed decision, although it continued to hover near its lowest level since October 24. The dollar’s stabilization did not help gold extend its upward move or refresh its weekly high.

As widely expected, the Fed lowered the federal funds target range by 25 basis points at Wednesday’s policy meeting and indicated that only one additional rate cut is expected in 2026. However, after Chair Powell delivered relatively dovish signals, some investors continued to bet on the possibility of two additional cuts in 2026.

Powell stated at the press conference that the US labor market faces significant downside risks and that the Fed has no intention of using policy to further restrain job growth. This remark pushed the dollar to a fresh seven-week low and drove gold to a new weekly high on Thursday.

However, Powell refrained from providing guidance on the timing of the next rate cut and emphasized that the path for further easing would be more challenging. Additionally, two hawkish committee members opposed the current rate cut, which heightened concerns about next year’s easing pace and put pressure on non-yielding gold.

Meanwhile, improved risk appetite also prompted some safe-haven money to exit precious metals. However, the slow progress in Russia–Ukraine ceasefire negotiations means related geopolitical risks remain, which may discourage traders from building large short positions and could cushion gold prices.

Gold prices retreated from the upper boundary of the two-week trading range on Thursday, reminding bullish traders to remain cautious. It also suggests that the tug-of-war between bulls and bears will continue to dominate trading before the weekend. Oscillators on the daily chart indicate that if the price falls further below the 4,200 level, it may offer buying opportunities and find solid support near the lower boundary of the triangle consolidation. However, a sustained break below this area could open the door to additional downside.

Trade Direction: Buy

Entry Price: 4195

Target Price: 4350

Stop Loss: 4150

Valid Until: December 27, 2025 23:55:00

Support: 4192 / 4185 / 4170

Resistance: 4225 / 4240 / 4259

BoE rate-cut expectations are weighing on GBPUSD. With CPI momentum easing, the market now prices an about 88% probability of a 25 bp reduction next week.

Meanwhile, Chancellor Rachel Reeves on 10 Dec condemned the pre-budget leak of key tax measures as "damaging". An 13 Nov FT report that she would shelve a planned income-tax rise moved Gilt yields sharply higher. Testifying to the Treasury Select Committee, Reeves said the disclosure was not from an authorised briefing and called the story "partial and inaccurate". Opposition MPs accuse her of talking down the economy to justify tax rises needed to fund higher welfare spending pledged by the Labour party. Reeves rejected claims she misrepresented the OBR's downward revision to productivity, noting that while higher inflation boosts nominal receipts, it erodes the real purchasing power of those revenues.

Early Thursday, the FOMC cut the target range by 25 bp to 3.50%-3.75%, in line with consensus. The DXY sold off on the release, sending GBPUSD to the 1.3390 handle. This marks the third 2024 easing, adopted 9–3.

Dissent split two-ways: two voters favored holding the rate, one preferred a 50 bp cut, exposing a sharp internal divide on the outlook and policy path.

The post-meeting statement notes that activity is "expanding at a solid pace" but concedes job gains have slowed and the unemployment rate has moved higher. At the same time, the prior characterization of the labor market as "strong" or the jobless rate as "low" was dropped. Inflation has eased from its early-year highs but remains "somewhat elevated." Uncertainty around the outlook has risen, with downside risks to employment having increased.

To keep reserve balances ample, the FOMC announced a short-dated Treasury purchase program, set to begin 12 Dec at an initial pace of around $40 bn. The Committee reiterated that any future adjustments will be data-dependent, conditional on the evolving outlook and balance of risks, with no preset course.

At the post-meeting press conference, Chair Powell elaborated that the 175 bp of cuts since September have brought the policy rate into the broad neutral range, giving the FOMC a "watch-and-see" vantage point. He stressed that "rate hikes are in no one's baseline," dispelling fears of an imminent policy reversal.

On the 4-hour chart, GBPUSD has printed a record high, yet the MACD histogram is shrinking and RSI peaks are successively lower, which is a classic bearish divergence that flags a correction. Bollinger bands are widening with price riding the upper band. the SMA stack is fanning upward, so the macro up-trend remains intact. Immediate resistance sits at the psychological 1.40 handle and the prior swing-high at 1.347. RSI reads 63, still in bullish territory, favouring buy-the-dip tactics.

On the weekly chart, price is compressing beneath the Bollinger mid-line. The MACD fast-slow lines has retreat to the zero-axis but has not yet crossed bullish. A golden-cross there would open a high-probability move toward the upper Bollinger band and the previous high. Failure would send price back to the EMA200. RSI is 54 and rolling over, signalling neutral-to-cautious sentiment. Strategy. Therefore, traders are advised to look for a short-term fade lower, then flip long on confirmation.

Trade Direction: Sell

Entry Price: 1.337

Target Price: 1.29

Stop Loss: 1.35

Support: 1.3/1.29/1.28

Resistance Levels: 1.34/1.342/1.35

At today's meeting, the Federal Reserve lowered the federal funds rate by 25 basis points to a range of 3.50%–3.75%, and simultaneously announced the resumption of technical purchases of short-term Treasury securities to manage year-end liquidity. Following this, the Fed's statement and dot plot generally conveyed a message of "rate cuts proceeding cautiously, with possible pauses in the future." As a result, the market initially sold off the dollar in the short term, but quickly began to digest the implication that "this rate cut does not signal long-term easing." Consequently, USD/JPY showed an initial dip followed by stabilization and even a renewed upside push. The impact of this decision is not one-dimensional. While the 25-basis-point rate cut did reduce the immediate yield advantage of the dollar on a nominal level, more importantly, the Fed did not commit to further rapid cuts in its statement or in the Chair's remarks. Moreover, the updated dot plot indicates that the tightening cycle has not come to a complete end. Therefore, markets have priced in the probability of "limited rate cuts and potential pause going forward." In other words, while short-term rates were lowered, medium- and short-term yields did not collapse. After an initial pullback, the dollar may find support due to a "slower-than-expected pace of rate cuts."

Meanwhile, Japan's interest rate policy has not responded in kind—if the Bank of Japan maintains a relatively accommodative stance and the yield differential between Japanese and U.S. bonds remains intact, the fundamental bullish logic for USD/JPY stays valid. Additionally, the Fed's move to resume purchases of short-term Treasuries helps ease technical tensions in money markets, which can suppress extreme volatility toward year-end and provide a practical window for initiating long positions on pullbacks.

Based on the daily chart, USD/JPY has shown a clear uptrend recently. Despite yesterday's bearish close, as of the European session today, the exchange rate is still oscillating around the 23.6% Fibonacci retracement level at 155.91. If today's closing price holds above 155.91, the likelihood of USD/JPY continuing its earlier uptrend will increase significantly.

Simultaneously, a long lower shadow bullish candle has formed on the 4-hour chart, creating a bullish engulfing pattern, further reinforcing the pair's upward momentum.

Trading direction: Buy

Entry price: 156.00

Target price: 160.10

Stop loss: 155.40

Valid Until: December 25, 2025, 23:00:00

Support: 155.48/154.34

Resistance: 157.89/160.00

Recent financial market concerns over Japan’s economic outlook have intensified, particularly regarding the risk of a negative feedback loop driven by monetary policy lagging, rising inflation, and a weakening yen. According to Hiroyuki Seki, Head of Global Markets at Mitsubishi UFJ Financial Group, market expectations of a December rate hike by the Bank of Japan (BOJ) have risen to 90%. However, the more crucial factor is whether the central bank can signal a firm future policy trajectory. If expectations for tightening are not reinforced and the government increases fiscal expenditure amid inflationary pressures, the yen could depreciate further, raising import costs and sustaining inflationary pressures. Despite the narrowing interest rate differential between Japan and the US, the yen remains weak around 155 per U.S. dollar. Market concerns also stem from Prime Minister Sanae Takaichi’s renewed inflationary stance, which might constrain the BOJ’s tightening measures. Hiroyuki Seki emphasizes the need for Japan to escape a prolonged period of ultra-low real interest rates, with the BOJ implementing a steady normalization of monetary policy to avoid vicious cycles of depreciation and inflation resulting from insufficient tightening. He forecasts that if a December rate increase occurs as expected, subsequent hikes of 25 basis points approximately every six months could bring the terminal rate to 1.25% to 1.5% by mid-2027, with upside risks if inflation becomes more sticky. The BOJ previously estimated the nominal neutral interest rate to be between 1% and 2.5%. In the bond market, Mitsubishi UFJ suggests that after benchmark 10-year yields surpass 1.65%, there is room for re-entry. If yields exceed 2%, the pace of accumulation would accelerate. Currently, the risk exposure is low, and the portfolio remains well-positioned to adapt.

The Federal Reserve has entered a policy observation period following a distinctly hawkish rate cut driven by internal dissent. The Federal Open Market Committee (FOMC) unanimously voted 9-to-3 to cut interest rates by 25 basis points to a target range of 3.50%–3.75%, marking the third rate reduction since 2025. However, the dot plot indicates a markedly narrowed future easing outlook: the majority of policymakers project only one more rate cut in 2026, with a subsequent pause probable. This decision occurs amid persistent inflation above the target, slowing employment growth, an increase in the unemployment rate to 4.4%, and incomplete data due to a government shutdown. Additionally, tariff hikes have exerted further upward pressure on prices, causing inflation to rebound to 2.8% since the start of the year. While economic activity continues to show moderate expansion, outlook uncertainty remains. The latest projections suggest that the Fed anticipates economic growth reaching 2.3% in 2026, with inflation easing to approximately 2.4% by year-end and the unemployment rate holding steady at 4.4%. Post-meeting market reactions reflect interpretations of a "moderate rate cut with a dovish tone," with U.S. equities rising, the dollar weakening, and Treasury yields declining. The FOMC statement emphasizes that economic growth remains modest, labor market softening coincides with elevated inflation, and reaffirms its dual mandate to maximize employment and maintain a 2% inflation rate, indicating ongoing reliance on incoming data to guide future policy adjustments.

In the 1D timeframe, the Bollinger Bands are converging and narrowing, with SMAs leveling off, signaling a potential trend reversal. Yesterday's formation of a bearish engulfing pattern indicates short-term bearish momentum; however, as long as prices remain above 156, there is a high likelihood of re-challenging the 158 or 160 resistance levels. Following the MACD death cross, the MACD line and signal line are retracing towards the zero-axis, but still at some distance, suggesting that the correction phase is not yet complete. The RSI stands at 56, reflecting a relatively strong bullish market sentiment. Resistance levels are near the upper Bollinger Band and key psychological thresholds at 157.7 and 160. In the 1W timeframe, Bollinger Bands are expanding upward, with SMAs diverging, indicating an ongoing bullish trend. After the MACD formed a golden cross, the MACD line and signal line moved above the zero-axis, and EMA 12 is oscillating upwards, signaling strong upward momentum. The RSI is at 66, with market participants predominantly displaying buying bias. It is recommended to go long at the lows in the short term.

Trading Direction: Buy

Entry Price: 154.7

Target Price: 158.8

Stop Loss: 152.5

Support: 154.7, 153.2, 150

Resistance: 157, 158.8, 160

EUR/NZD today (11/12/2025) is trading around 2.0125, up slightly 0.1% but still in a short-term downtrend. The euro is supported by the ECB holding the deposit rate at 2.00%, with Eurozone inflation stable at 2.2% and 2025 growth forecast upgraded to 1.2%. In contrast, the NZD remains under pressure after the RBNZ aggressively cut the OCR to 2.25% with room for further easing, as New Zealand’s economy stays weak and inflation rapidly cools toward 2%. Result: narrowing interest-rate differential favours the NZD over the medium term, keeping EUR/NZD biased mildly lower, with year-end 2025 forecasts around 1.99–2.02. Short-term outlook remains bearish; watch the ECB meeting on 18 December.

EUR/NZD is currently trading around a major bottom zone at 2.01060. This level has triggered strong bullish reactions in the past.

We can consider BUY orders with a low risk-to-reward ratio, targeting 2.02160 first or further up to 2.03080.

Since this is a bottom-fishing setup without full confirmation yet, there is a risk of a breakdown. If price breaks below 2.01060, wait for the next support-turned-resistance zone at 2.00290 before considering new entries.

TRADING DIRECTION: BUY

Entry: 2.01060

Stop Loss: 2.00700

Take Profit: 2.02070 (primary), extendable to 2.03080

Support: 2.00700 / 2.00250

Resistance: 2.02150 / 2.03080