Markets speculate that Japanese authorities may intervene to curb further yen weakness, which could discourage aggressive short positioning against the yen. On the other hand, with markets expecting another Fed rate cut this month, the dollar is struggling to attract meaningful buying interest, potentially limiting upside room for USD/JPY. Recent Japanese economic data and policy signals present a complex picture: manufacturing remains weak, domestic demand stays resilient, and monetary policy may be shifting. In November, Japanese manufacturing activity remained in contraction but at a slower pace. The S&P Global Manufacturing PMI rose from 48.2 in October to 48.7, marking the slowest contraction in nearly three months. Midstream industries and investment goods sectors remain sluggish, while consumer goods show slight improvement. New orders have declined for two and a half years; companies largely attribute weak demand to a gloomy global economic environment, tighter client budgets, and insufficient capital investment. Demand shrinkage is particularly notable in the automotive and semiconductor sectors. Meanwhile, input cost inflation accelerated for the fourth consecutive month, driven mainly by higher labor costs and raw material prices, prompting firms to raise their selling prices. Despite near-term pressures, business confidence over the next 12 months has risen to a ten-month high, supported by recovering demand in electronics and transportation as well as expectations of new product launches. Against a backdrop of weak economic data alongside structural adjustments, the BoJ is considering a policy shift. Governor Kazuo Ueda noted that the central bank will assess the pros and cons of raising rates at its December policy meeting—the clearest signal yet of a possible hike. He said the Japanese economy is expected to rebound from the Q3 contraction, and the impact of U.S. tariffs is lower than previously feared. With tariff risks easing, the likelihood of achieving the BoJ's price and economic forecasts is increasing. Ueda stressed that Japan is now at a stage where wage growth trends must be tested, and wage growth will decisively influence the timing of rate hikes. Amid sustained high corporate profits, worsening labor shortages, and major business groups advocating pay raises, wage issues have become central to monetary policy discussions.

The dollar fell to a two-week low on Monday. The ISM reported that the U.S. manufacturing PMI dropped to 48.2 in November from 48.7 in October, below market expectations. Combined with recent weak U.S. data, it suggests growth in the world's largest economy is cooling. Dovish signals from Fed officials have fueled speculation of another rate cut this month. In fact, CME Group's FedWatch tool shows an almost 88% probability of a 25-basis-point cut at the Fed's December 9th–10th meeting. This stands in sharp contrast to the BoJ's hawkish stance and may restrain USD/JPY movements. Before the Fed's rate decision next week, investors will closely watch the release of the U.S. Personal Consumption Expenditures (PCE) Price Index—the Fed's preferred inflation gauge—for more clues about the future rate-cut path. However, due to the recent federal government shutdown, official employment reports have yet to be released, adding to market uncertainty.

Regarding the daily chart, the Bollinger Bands are expanding upward, moving averages are diverging higher, and the bullish trend remains intact. After stabilizing near the middle band, the price momentum shown by MACD weakens somewhat. RSI is at 56, indicating strong bullish sentiment. As long as price holds above the middle band, there is a high probability of testing the upper band and round-number resistance levels near 157.6 and 160. In the weekly chart, Bollinger Bands are also expanding upward, moving averages diverge higher, and MACD has formed a golden cross with both lines back above the zero line, signaling a return to bullish territory. RSI stands at 67, showing investors are predominantly in buy mode. If the weekly candlestick closes with a long lower shadow, the pair is likely to rise toward the previous high near 158.8. In the short term, investors should focus on buying the dips.

Trading direction: Buy

Entry price: 155.8

Target price: 158.8

Stop loss: 154

Support: 154.7/153.2/150

Resistance: 154.7/153.2/150

Gold prices have recently strengthened amid intertwined geopolitical risks and interest rate expectations, briefly surging to 4264.66 before retreating into a volatile range. A series of developments escalating tensions between China and Japan, including friction over the Diaoyu and Senkaku Islands and verbal confrontations at international forums, have elevated “regional geopolitical risks” on the trading agenda. As uncertainty intensifies, investors naturally rebuild their safe-haven positions, benefiting gold as a traditional safe-haven asset.

From a transmission logic perspective, Sino-Japanese tensions impact gold prices through three pathways: First, direct safe-haven premium, when regional conflict risks escalate, some multinational capital shifts positions from risk assets to gold and government bonds, driving up gold prices in the short term; Second, macroeconomic and trade shocks, if tensions disrupt trade or fuel concerns over global supply chains and growth, market expectations for the pace of Fed rate cuts may accelerate or intensify (risk withdrawal → central bank easing expectations), depressing real interest rates and supporting gold prices; Third, currency and capital flows, if the yen fluctuates due to war premiums and capital outflows, interactions between regional currencies and the dollar will indirectly influence cross-currency demand for gold. The combined effect of these three pathways significantly heightens gold's sensitivity during the current news.

On the 4-hour chart, gold recently broke out of a triangle consolidation pattern and continued its upward momentum. After breaking through the resistance level of 4245 to reach 4264.66, it began to pull back. Currently, gold has tested the 20-day moving average support with two consecutive downward-trending 4-hour candlesticks, both closing with lower shadows. This indicates an inability to break below effectively, signaling a significant strengthening of bullish momentum in the market. Concurrently, multiple moving averages within the system exhibit a bullish alignment pattern, suggesting strong continuity in gold's upward trend and further enhancing the likelihood of continued gains in the near term.

On the upside, the primary resistance level for gold is at 4264.66. If this level is broken, further upward space will open, potentially testing 4300.00 or even the previous historical high of 4381.44.

On the downside, if gold breaks below the key support at 4200.00 with increased volume, it could pull back toward 4140.00.

Trading direction: Buy

Entry price: 4215.00

Target price: 4360.00

Stop loss: 4190.00

Validity until: 2025-12-16 23:00:00

Support: 4200.00, 4173.47

Resistance: 4264.66, 4300.0

Eurozone economic data delivered a mixed picture, with German Retail Sales unexpectedly falling short of estimates in October. However, the German Harmonized Index of Consumer Prices (HICP) for November surprised to the upside, nearing the 3% threshold. In France, third-quarter Gross Domestic Product (GDP) aligned with both estimates and the preliminary reading, while Spain's HICP similarly exceeded the 3% mark.

A prior review of the European Central Bank (ECB) policy meeting minutes indicated that policymakers judged the economic and inflation outlook to be broadly consistent with the September baseline projection, albeit with high uncertainty remaining. Members agreed that maintaining interest rates unchanged remained appropriate, as recent data had not materially altered the medium-term assessment and the distribution of risks around inflation was generally balanced.

In the U.S, the ISM Manufacturing PMI softened to 48.2 in November from 48.7 in October, marking the ninth consecutive month the U.S. industrial sector has been in contraction territory and falling short of the 48.6 forecast. Breaking down the details, the Employment sub-index plunged deeper into contraction, slipping from 46 to 44, pointing to weakening labor market momentum. Furthermore, the New Orders Index fell to 47.4, signaling a third straight month of contracting demand. The only component showing resilience was the Prices Paid Index, which rose to 58.5, indicating continuous cost pressures for businesses.

Following the latest round of weaker U.S. economic data, traders have aggressively increased their bets on interest rate cuts in December, with the probability now standing at 87%, according to the CME FedWatch Tool. In political news, rumors have surfaced suggesting that White House National Economic Advisor Kevin Hassett could be named as the next Fed Chair. U.S. President Donald Trump confirmed he has made his choice but stated: "We will be announcing it."

U.S. inflation indicators showed signs of stabilization in September. The Producer Price Index (PPI) rose 2.7% year-over-year (YoY), suggesting that wholesale price pressures have leveled off. However, consumer activity appeared to weaken, with Retail Sales rising only 0.2% month-over-month (MoM) in September, a noticeable slowdown from the 0.6% increase in August. Compounding this, the Conference Board reported that household sentiment deteriorated significantly in November, with Consumer Confidence dropping 6.8 points to 88.7 from 95.5 in October.

The EUR/USD pair has encountered stiff resistance at the 1.1645 level, a point where it has faced strong bearish reactions on previous occasions. If this pattern of rejection repeats, a downward correction is highly probable. The failure to achieve a new higher high suggests that the underlying bearish trend may still be in control. This corrective move could initiate from the 1.1645 resistance, targeting the ascending trendline support, which converges near the 1.1511 support zone.

The 100-period and 200-period Moving Averages (MAs) are located at 1.1560 and 1.1585, respectively. A decisive close below these MA levels would accelerate the bearish impulse toward the trendline. The Relative Strength Index (RSI) is currently at 66; while not yet in the extreme overbought zone, it is high enough to warrant caution. This suggests that one final push to retest the 1.1645 resistance is possible before a full correction begins. However, a strong, decisive break and close above the 1.1645 resistance would invalidate the bearish setup, opening the path for a more sustained upward movement.

Trading direction: Sell

Entry price: 1.1637

Target price: 1.1520

Stop loss: 1.1675

Validity: Dec 12, 2025 15:00:00

The ISM Manufacturing PMI softened to 48.2 in November from 48.7 in October, marking the ninth consecutive month the U.S. industrial sector has been in contraction territory. This figure also fell short of the 48.6 forecast. Delving into the details, the Employment sub-index slipped further into contraction, decreasing from 46 to 44, pointing to weakening momentum in the labor market. Furthermore, the New Orders Index fell to 47.4, signaling a third straight month of contraction. The only component showing firmer footing was the Prices Paid Index, which rose to 58.5, indicating continuous cost pressures for businesses.

Following the latest round of weaker U.S. economic data, traders have aggressively increased their bets on interest rate cuts in December, with the probability now standing at 87%, according to the CME FedWatch Tool.

In political news, rumors have surfaced suggesting that White House National Economic Advisor Kevin Hassett could be named as the next Fed Chair, succeeding Jerome Powell. However, U.S. President Donald Trump stated on Sunday that he would not disclose his choice publicly but confirmed he had already made his decision, adding: "We will be announcing it."

U.S. inflation indicators showed signs of stabilization in September. The Producer Price Index (PPI) rose 2.7% year-over-year (YoY), aligning with forecasts and suggesting that wholesale price pressures have leveled off. The Core PPI offered slight relief, easing to 2.6% from 2.9%, falling below expectations.

However, consumer activity appeared to weaken. Retail Sales rose only 0.2% month-over-month (MoM) in September, a noticeable slowdown from the 0.6% increase in August, pointing toward softer consumption trends. Compounding this, the Conference Board reported that household sentiment deteriorated significantly in November, with Consumer Confidence dropping 6.8 points to 88.7 from 95.5 in October.

Higher-than-expected Australian inflation is moderating expectations for a rate cut by the Reserve Bank of Australia (RBA), a factor that could help limit losses for the AUD. RBA Governor Michelle Bullock emphasized the central bank's unanimous decision to hold the cash rate at 3.60% and confirmed that a rate cut was not discussed at the meeting.

Conversely, data released by RatingDog on Monday showed that China’s Manufacturing PMI unexpectedly fell to 49.9 in November from 50.6 in October. This figure fell below the market consensus of 50.5. As a reading below the 50 benchmark level suggests contraction, the unexpected result is weighing negatively on the Australian Dollar, given Australia’s strong trade ties with China.

The AUD/USD pair is currently developing a potential Head and Shoulders (H&S) pattern near the resistance level of 0.6563. This level served as the first shoulder on November 2nd. In the recent session, the price rallied to these same levels before reacting sharply downward, forming the second shoulder. The central peak (the "Head") of the pattern is located at the November maximum of 0.6580.

If the price fails to successfully close above the 0.6563 resistance level, it would favor the start of a bearish correction toward the 0.6493 zone, the next key support level. This support is technically fortified as it aligns perfectly with the 0.50% Fibonacci retracement level, acting as a strong price magnet for the pullback.

The 100-period and 200-period Moving Averages (MAs) on the 2-hour chart are clustered at 0.6494 and 0.6506, respectively. This MA cluster is strategically aligned near the Fibonacci retracement zone, further increasing its magnetic pull on the price. Additionally, the Relative Strength Index (RSI) has reached the 73 level, entering clear overbought territory. This condition suggests that momentum is stretched, and bears will be looking attentively at these levels to try and seize control of the movement.

Trading direction: Sell

Entry price: 0.6540

Target price: 0.6490

Stop loss: 0.6580

Validity: Dec 12, 2025 15:00:00

Gold began the new month on a robust footing, continuing a rally that has already positioned 2024 as one of the most extraordinary years in the metal’s modern history. XAU/USD advanced to its strongest level since October 21, lifted by a combination of risk-off sentiment and increasingly confident expectations that the Federal Reserve will cut interest rates at its December 9–10 policy meeting. At the time of writing, the metal trades around $4,260, marking a nearly 60% gain for the year and leaving it on track for its most impressive annual performance since 1979.

The surge reflects a convergence of powerful forces. Central banks have remained consistent net buyers, ETF inflows are accelerating, and geopolitical tensions show no signs of easing, reinforcing gold’s haven status. Markets, meanwhile, are firmly leaning into the idea that the Fed is prepared to loosen policy again next week. Softer US economic data and a notably dovish tone from policymakers have pushed rate-cut expectations to an 87% probability of a 25-basis-point reduction. For gold, the implications are straightforward: lower interest rates depress real yields and reduce the opportunity cost of holding a non-yielding asset, providing a strong macro backdrop that continues to feed the bid.

The macroeconomic narrative contributing to gold’s climb has only strengthened. US data last week signaled a cooling trend across multiple sectors, from consumer spending to manufacturing and labor markets. While the economy is far from contraction territory, the deceleration offers the Fed a comfortable excuse to proceed with additional easing. Risk sentiment has also deteriorated globally, with equity markets wobbling, bond yields stabilizing at lower levels, and geopolitical risks—from Middle Eastern conflicts to US-China trade frictions—fueling caution among investors. In this environment, gold has reasserted itself as a defensive anchor for portfolios.

Technically, gold’s chart structure remains unequivocally bullish. The metal cleared the key resistance level at $4,225, validating the broader upward trend and maintaining its position along a supportive rising minor trendline. Relative strength indicators are pushing into overbought territory, which typically warns of slowing momentum or near-term exhaustion, yet the market has shown little willingness to reverse meaningfully. Buyers remain firmly in control, even if short-term pullbacks may develop as part of a healthy trend continuation.

The primary zone traders are watching on the downside sits between $4,246 and $4,242. This remains the preferred buy-side region should the market retreat, as a pullback into this area followed by a bullish reversal on lower timeframes would preserve structure and offer an attractive re-entry point. The first region of overhead friction appears near $4,262, where intraday supply has historically triggered brief reactions. A clean break above this level would likely sustain bullish continuation toward the upper extension zone.

The next key region sits between $4,286 and $4,290, an area where extension levels converge and liquidity typically pools. This is where many traders anticipate late buyers to be trapped, making it a natural target for profit-taking on longs and a potential area for short-term reactionary pullbacks. While not a reversal zone in a broader sense, it is a region where volatility tends to increase sharply.

BUY GOLD

ENTRY PRICE: 4245

STOP LOSS: 4150

TAKE PROFIT: 4380

Data released last week showed that New Zealand’s third-quarter retail sales significantly exceeded expectations, rising 1.9% QoQ versus a consensus forecast of 0.6%. Excluding motor-vehicle sales, core retail sales still outperformed, up 1.2% QoQ against an expected 0.8%.

Statistics New Zealand noted that this was the largest quarterly increase in retail activity since late 2021, with broad-based gains across industries. Most sectors expanded in September.

Separately, the ANZ Business Confidence Index surged to an 11-year high of 67.1 from 58.1, while the survey’s Own Activity Outlook index jumped to 53.1 from 44.6—its strongest reading since 2014—indicating that the recovery is driven by a tangible improvement in real economic momentum rather than merely sentiment. ANZ stated that “signs of recovery are now visible,” with recent growth increasingly underpinned by actual economic activity.

Inflation signals, however, remain mixed. The share of firms planning to raise prices over the next three months rose from 44% to 51%, the highest since March. By contrast, the proportion expecting higher input costs edged down from 76% to 74%, while one-year-ahead inflation expectations stayed anchored at 2.7%. Taken together, these developments point to inflation pressures that are stabilising but still fall short of the disinflationary momentum that would prompt the RBNZ to initiate a fresh easing cycle.

Market outlook: The improvement in underlying fundamentals is reassuring and suggests the economic recovery is likely to persist. With the recovery under way and headline CPI sitting at the upper bound of the target band, we see no justification for further cuts to the Official Cash Rate “barring any unforeseen shocks”.

EURNZD maintains a robust upward structure on the 4-hour chart, currently quoted at 2.0283, with bulls still in control. The euro benefits from the ECB’s deferred rate-cut expectations, while the RBNZ’s latest easing has signaled limited room for further loosening, offering the Kiwi a near-term reprieve—though its underlying fundamentals remain fragile. Technically, the trend remains intact; as long as key support holds, price is well-positioned to retest the overhead resistance cluster.

Trade Direction: Buy

Entry Price: 2.0254

Target Price: 2.0863

Stop Loss: 2.0053

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

Support: 2.0271/2.0077/2.0004

Resistance Levels: 2.0680/2.0753/2.0850