Key Support Retest May Ignite the Next Bullish Expansion

Manuel

Central Bank

Economic

Summary:

This specific price zone is attracting significant interest because it represents a classic support-resistance flip.

BUY GBPUSD

EXP

PENDING

1.34540

Entry Price

1.35600

1.34100

1.34583 -0.00092 -0.07%

Pips

PENDING

1.34100

Exit Price

1.34540

Entry Price

1.35600

The U.S. Bureau of Economic Analysis reported that the domestic 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 strong 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 core PCE prices climbing 2.8%.

Despite this vigorous growth, the manufacturing sector exhibited signs of cooling. Durable Goods Orders fell by 2.2% in October, reversing a prior gain of 0.7%. Excluding defense, orders 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. In contrast, the housing market showed unexpected strength; data from the National Association of Realtors revealed that Pending Home Sales rose by 3.3% in November, marking their highest level since early 2023.

The Federal Reserve reduced the federal funds rate by 25 basis points (bps) at its December meeting, bringing the target range to 3.50%–3.75%. This marks a cumulative reduction of 75 bps in 2025 as the central bank navigates a cooling labor market and persistent inflation. According to the CME FedWatch Tool, markets are now pricing in an accelerated easing cycle, with traders anticipating at least two additional cuts by the end of September 2026.

Market participants anticipate that the Bank of England (BoE) will adopt a cautious approach toward monetary easing throughout 2026. In its most recent meeting, the institution cut interest rates by 25 basis points, bringing the rate to 3.75%, while making it clear that any further adjustments would be implemented progressively.

This moderate stance is closely linked to the fact that inflation in the United Kingdom remains uncomfortably elevated. Although the headline index retreated to 3.2% in November from its September peak of 3.8%, it remains significantly above the central bank’s 2% target. BoE Governor Andrew Bailey recently suggested that the room for maneuver regarding further cuts may narrow as the policy stance approaches neutral levels. Consequently, future decisions will be heavily contingent on the evolution of macroeconomic data.

Looking toward 2026, the BoE’s trajectory will be strictly tied to the performance of the British labor market and Gross Domestic Product (GDP). Throughout 2025, employment demand remained soft as many firms chose to halt hiring to offset the increase in social security contributions—a structural factor that could continue to hinder overall economic growth. Key Support Retest May Ignite the Next Bullish Expansion_1

Key Support Retest May Ignite the Next Bullish Expansion_1

Technical Analysis

The GBP/USD pair recently retraced to the 200-period Moving Average (MA), currently situated at 1.3452. This specific price zone is attracting significant interest because it represents a classic support-resistance flip; a level that previously functioned as a ceiling is now being tested as a technical floor.

The fact that this area is holding suggests that the prevailing bullish trend still possesses sufficient underlying strength to continue. On the 1-hour chart, the 100-period MA is located at 1.3500. When this level was breached to the downside, it effectively triggered the corrective move toward the 200-period MA. If this support holds firm, we could witness a renewed impulse toward the 1.3560 zone, which aligns with the 0.50 Fibonacci expansion. In technical terms, this means the next bullish leg could achieve a magnitude equal to 50% of the primary impulse.

Meanwhile, the Relative Strength Index (RSI) is rapidly approaching oversold territory, this condition could exert upward pressure, as the combination of key interest zones and momentum indicators suggest that the bullish trend remains the primary force. Notably, the RSI has shed significant levels even though the price has not made an equivalently large move to the downside, indicating exhaustion in the bearish momentum and granting bulls an opportunity to reclaim control. However, a forceful break below the current support level would clear the path for a deeper correction, putting the overall bullish trend in doubt.

Trading Recommendations

Trading direction: Buy

Entry price: 1.3454

Target price: 1.3400

Stop loss: 1.3560

Validity: Jan 09, 2025 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Eva Chen

Commodity

Summary:

Gold prices maintained their rebound amid expectations of a Federal Reserve rate cut and inflows of safe-haven capital.

BUY XAUUSD

Close Time

CLOSED

4371.24

Entry Price

4465.00

4300.00

4283.32 -55.79 -1.29%

712.4

Pips

Loss

4300.00

4299.47

Exit Price

4371.24

Entry Price

4465.00

Fundamentals

Since December, the precious metals market has undergone a significant shift in sentiment amid intense volatility. After hitting a record high last weekend, gold prices retreated sharply on Monday, with spot gold briefly dipping to around US$4,300. With year-end holidays approaching, overall market liquidity has tightened noticeably. Concentrated profit-taking by previously accumulated long positions amplified the technical correction following months of substantial gains. Concurrently, a mild rebound in the U.S. dollar exerted short-term downward pressure on gold prices.

The adjustment in silver has been more pronounced. Last week, driven by silver's sustained strong rally, market attention rapidly intensified. Rumors of a “short squeeze” and margin calls briefly fueled the final surge on Friday. However, as sentiment gradually cooled, silver prices swiftly reversed course, plunging over US$7 intraday—marking the largest single-day nominal decline in history. The precious metals market currently exhibits pronounced sentiment-driven characteristics, and gold was no exception. Affected by profit-taking, it experienced a daily decline of nearly 4%.

The precious metals market is currently navigating a relatively challenging trading environment. Overall market liquidity remains generally low, which tends to amplify price fluctuations abnormally: on one hand, hedge funds are reluctant to counter-trend interventions to hedge excessive moves amid insufficient liquidity; on the other hand, market makers are also actively reducing their participation, further weakening the market's buffering capacity. This structural characteristic makes short-term prices more susceptible to sharp spikes and plunges.

However, from a medium-to-long-term perspective, the macroeconomic underpinnings for gold remain solid. The market widely expects the Federal Reserve to maintain its accommodative monetary policy stance through next year and into 2026, with the outlook for a medium-term weakening of the U.S. dollar unchanged. Simultaneously, discussions surrounding central bank independence within the U.S. political landscape continue to amplify macroeconomic uncertainty, bolstering demand for safe-haven asset allocations. Against this backdrop, while gold and silver prices face near-term pressure from high-level adjustments and cooling sentiment, their downside potential is expected to be significantly constrained once the market completes its phase of consolidation.

Analyzing the Trading Logic of Gold in Low-Liquidity Environments_1

Technical Analysis

During European trading hours on Tuesday, gold prices held steady near US$4,350, maintaining their rebound momentum. This followed a 4.5% decline the previous session—the steepest single-day drop since October last year—after which prices recovered some losses. The Chicago Mercantile Exchange Group (CME Group), one of the world's largest commodity trading platforms, raised margin requirements for gold and silver futures, triggering widespread profit-taking and portfolio rebalancing.

Based on historical instances where institutional selling pushed prices below US$100, buying on dips would be a prudent move, with stop-loss orders placed at the previous low.

Trading Recommendations

Trading Direction: Buy

Entry Price: 4345

Target Price: 4465

Stop Loss: 4300

Valid Until: January 14, 2026 23:55:00

Support: 4350, 4345, 4314

Resistance: 4391, 4367, 4498

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Traders' Opinions

Summary:

Gold prices suffered their sharpest pullback in months after retreating more than 4% from record highs, but mounting geopolitical risks and a cautious market mood are helping the metal stabilize above key technical support near $4,300.

BUY XAUUSD

Close Time

CLOSED

4379.93

Entry Price

4555.00

4290.00

4283.32 -55.79 -1.29%

899.3

Pips

Loss

4290.00

4283.52

Exit Price

4379.93

Entry Price

4555.00

Gold prices (XAU/USD) are attempting to regain composure after suffering their steepest decline in months, underscoring how fragile sentiment has become at historically elevated price levels. The precious metal slid more than 4% from last week’s all-time high near $4,555, marking its weakest performance in recent months, as thin liquidity conditions amplified profit-taking during Monday’s session. By Tuesday, however, gold was showing tentative signs of stabilization, holding above the psychologically important $4,300 handle as geopolitical tensions resurfaced and investors reassessed downside risks.

The abrupt sell-off followed a powerful rally that had propelled gold to record territory, fuelled by expectations of easier global monetary conditions, persistent geopolitical uncertainty and strong demand for safe-haven assets. Yet the absence of deep liquidity, combined with overstretched technical conditions, left the market vulnerable to a sharp correction once momentum faltered. In my view, the magnitude of the pullback reflects not a fundamental shift against gold, but rather a classic reset after an overheated move.

Geopolitics remain a central pillar of support. Late Monday, Moscow announced it would reassess its position on peace negotiations with Ukraine after claiming that President Vladimir Putin’s residence had been targeted in an attack. The allegation, which Kyiv has denied, injected fresh uncertainty into an already fragile diplomatic backdrop and quickly dampened the cautious optimism that had emerged following last weekend’s meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskyy. Any setback to peace prospects tends to reinforce gold’s appeal as a hedge against geopolitical risk, particularly at a time when broader markets are already on edge.

Tensions are also simmering in Asia, where China extended its military drills around Taiwan for a second consecutive day. The exercises have kept investors alert to the risk of miscalculation in the South China Sea, a region critical to global trade and supply chains. Adding another layer of uncertainty, President Trump warned that the United States could launch a new round of attacks on Iran should Tehran resume its nuclear weapons programme. The combination of flashpoints across Eastern Europe, East Asia and the Middle East reinforces the notion that geopolitical risk premiums are far from priced out, even after gold’s recent retreat.

Beyond geopolitics, markets are increasingly focused on U.S. monetary policy signals. Later on Tuesday, the Federal Reserve is set to release the minutes of its December policy meeting. While no immediate policy change is expected, investors will scrutinize the language for clues on how comfortable policymakers are with easing financial conditions and how they assess inflation risks. Any hint of a more cautious or divided Fed could support the U.S. dollar in the near term, potentially capping gold’s rebound. Conversely, confirmation that the Fed remains inclined toward eventual rate cuts would likely underpin bullion, especially after the recent correction has eased valuation concerns.

Technical Analysis

From a technical perspective, gold’s structure has weakened but not collapsed. On the four-hour chart, XAU/USD was trading around $4,372 after rebounding from Monday’s lows near $4,300. The Moving Average Convergence Divergence (MACD) histogram remains below the zero line, signalling that bearish momentum is still present, but the steady contraction from deeply negative readings suggests that selling pressure is losing intensity. Meanwhile, the Relative Strength Index (RSI) stands at 38.93, still below the neutral 50 level but recovering from oversold territory, an early sign that downside momentum may be stabilizing.

The break below the ascending trendline drawn from mid-December lows, now intersecting around $4,450, represents a notable technical setback. This level, together with the December 22 and December 24 lows at $4,430 and $4,448 respectively, forms a dense resistance zone that is likely to challenge any near-term recovery attempts. As long as gold remains capped below this region, the path back to the record high near $4,555 appears difficult.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 4380

STOP LOSS: 4290

TAKE PROFIT: 4555

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Traders' Opinions

Summary:

WTI crude extends gains toward $58 as fading Ukraine peace hopes and renewed Middle East risks lift the geopolitical premium, though OPEC+ supply increases and inventory data may cap upside.

BUY WTI

EXP

TRADING

58.303

Entry Price

61.000

57.500

57.749 -0.104 -0.18%

0.0

Pips

Flat

57.500

Exit Price

58.303

Entry Price

61.000

West Texas Intermediate (WTI) US crude oil prices pushed higher on Tuesday, trading around $58.20 per barrel at the time of writing, up roughly 0.9% on the day, as markets reassessed geopolitical risks and their implications for global energy supply. The advance extends a broader short-term recovery in crude, driven less by demand optimism and more by a renewed sense of fragility in the global political landscape.

Oil markets are once again leaning into risk aversion, with expectations for a swift diplomatic resolution to the war in Ukraine continuing to erode. Recent US-led discussions have failed to deliver a meaningful breakthrough, particularly on the most contentious territorial issues, reinforcing the view that the conflict could remain a structural source of uncertainty for commodity markets well into the future. According to reporting by Reuters, Russia has accused Ukraine of launching a drone attack targeting a presidential residence inside Russian territory—an allegation Kyiv has firmly denied. Regardless of the veracity of the claims, the escalation in rhetoric underscores the increasingly brittle state of diplomacy and keeps investors wary of potential spillover effects on energy infrastructure, logistics, and trade routes.

This deterioration in the geopolitical backdrop has encouraged traders to reprice the probability of supply disruptions, lending near-term support to WTI and the broader oil complex. While Russian crude continues to find its way into global markets through alternative channels, any intensification of the conflict raises the risk of tighter enforcement, operational disruptions, or retaliatory measures that could reduce effective supply. In this context, oil’s rally appears less speculative and more insurance-driven, reflecting the market’s need to rebuild a geopolitical risk premium that had thinned during periods of relative calm.

Tensions are not confined to Eastern Europe. Fresh comments from US President Donald Trump have revived concerns over stability in the Middle East, after he warned of possible military action against Iran should certain strategic programs be restarted. The remarks, while hypothetical, are enough to remind markets how quickly sentiment can shift in a region that remains central to global oil supply. With key shipping lanes and major producers concentrated in the Middle East, even verbal escalations tend to amplify price sensitivity, reinforcing crude’s role as a geopolitical barometer.

That said, the upside in oil prices is not without constraints. Structural supply concerns continue to loom large, particularly as demand growth remains uneven across regions. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) has confirmed a modest production increase of 137,000 barrels per day starting in December, a move that signals confidence in market balance but also revives fears of oversupply should global consumption soften. For now, the increase is relatively small, yet it serves as a reminder that producers are gradually easing restraint, potentially limiting the longevity of any geopolitically driven rally.

Investors are also bracing for fresh signals from the US inventory cycle. Attention turns to the weekly crude oil stockpile report from the American Petroleum Institute (API) due later in the day, which could provide near-term direction. A larger-than-expected build would reinforce concerns about sluggish demand and cap gains, while a drawdown could validate the recent price rebound and encourage further buying interest.

Technical Analysis

From a technical perspective, crude oil’s latest advance appears constructive. Prices have registered strong intraday gains while holding firmly above the 50-period exponential moving average (EMA50), reinforcing the dominance of the short-term bullish trend. Trading continues to align with an ascending trend line, suggesting that buyers remain in control despite recent volatility. Importantly, the latest leg higher followed a cooling-off phase in momentum indicators, as overbought conditions on the Relative Strength Index were gradually unwound. The emergence of positive overlapping signals from momentum studies now points to renewed upside traction, increasing the probability of further gains as long as key support levels hold.

TRADE RECOMMENDATION

BUY WTI

ENTRY PRRICE: 58.30

STOP LOSS: 57.50

TAKE PROFIT: 61.00

Risk Warnings and Disclaimers

Add to Favorites

Eva Chen

Forex

Summary:

Canada's GDP contracted by 0.3% month-over-month due to manufacturing weakness, though economic conditions may strengthen in November. The Bank of Canada stated it stands ready to act again if necessary, whether to curb price increases or bolster the weak economy.

BUY USDCAD

EXP

TRADING

1.37043

Entry Price

1.39530

1.35700

1.37033 +0.00076 +0.06%

0.0

Pips

Flat

1.35700

Exit Price

1.37043

Entry Price

1.39530

Fundamentals

Canada's economy contracted in October, with real GDP falling 0.3% month-over-month, in line with expectations. The slowdown was widespread, with 11 out of 20 industrial sectors recording declines, highlighting the overall weakness in the economy.

The goods-producing sector was the main drag, falling 0.7% month-over-month with most components weakening. Manufacturing led the decline, heightening concerns that persistent external demand pressures and tightening financial conditions continue to weigh on Canada's industrial base. The service sector also dipped 0.2%, partly due to labor strikes disrupting production activities across multiple sectors.

Looking ahead, early signs suggest the economy will stabilize moderately. According to minutes released last Tuesday, the Bank of Canada's Governing Council unanimously agreed that it was difficult to predict whether the next interest rate move would be an increase or a decrease ahead of the December 10 rate decision. The seven-member rate-setting committee concluded that two key factors were the unpredictability of U.S. trade policy and the recent volatility in economic data.

At the December meeting, committee members agreed to maintain the interest rate at 2.25%, judging that this level is appropriate to keep inflation near the central bank's 2% target given the current economic outlook broadly aligning with expectations. The Bank of Canada stated it stands ready to act again if necessary, whether to curb price increases or bolster a weakening economy. Money markets predict the Bank of Canada's next move will be a 25-basis-point rate hike, potentially as early as October 2026.

The meeting minutes also indicate that the Management Committee views the 2026 review of the United States-Mexico-Canada Agreement as a “significant risk,” with the uncertainty surrounding its outcome potentially dampening business investment.

Manufacturing Drags Down the Economy; Bank of Canada Holds Rates Steady; CAD Caught between Internal and External Risks_1

Technical Analysis

The USDCAD is currently forming a bullish pattern, characterized by an exceptionally long final arm. As the pattern nears completion, price action has become notably extreme. Additionally, the 1.618XA extension has been tested, and the BC extension warrants close attention, particularly as it aligns with the lowest price within the PRZ. These factors collectively suggest an impending reversal. The near-term target is the starting point of the recent series of sell-offs.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.3679

Target Price: 1.3953

Stop Loss: 1.3570

Valid Until: January 14, 2026 23:55:00

Support: 1.3682, 1.3642, 1.3609

Resistance: 1.3806, 1.3872, 1.3953

Risk Warnings and Disclaimers

Add to Favorites

Tank

Commodity

Forex

Summary:

After the Chicago Mercantile Exchange (CME) decided to raise margin requirements for silver futures, silver prices have been under pressure. Leveraged traders were forced to cut their positions amid technically overbought prices. Analysts noted that the current correction reflects position liquidation rather than a weakening of underlying demand.

SELL XAGUSD

EXP

TRADING

74.439

Entry Price

60.000

86.000

70.825 -5.435 -7.13%

0.0

Pips

Flat

60.000

Exit Price

74.439

Entry Price

86.000

Fundamentals

Silver prices have faced headwinds following the Chicago Mercantile Exchange's (CME) decision to hike margin requirements for silver futures. Leveraged traders were compelled to reduce their holdings when prices were in technically overbought territory. Analysts pointed out that the ongoing correction is a result of position unwinding, rather than a decline in fundamental demand.

Despite short-term price fluctuations, structural supply constraints and robust industrial demand—particularly from the solar energy, electronics, and data center sectors—continue to underpin silver prices. Additionally, a surge in speculative demand from China has driven silver prices higher, with the premium on silver futures traded on the Shanghai Futures Exchange hitting an all-time high. These elevated premiums signal strong domestic demand in China, tightening global supply chains and echoing the earlier inventory shortages in London and New York vaults.

Safe-haven demand for silver remains strong amid lingering geopolitical risks. The prospect of an end to the Russia-Ukraine conflict was clouded again following the alleged attack on President Putin's official residence. In the Middle East, Saudi Arabia's air strikes on Yemen and Iran's declaration of "all-out war" against the US, Europe, and Israel have heightened fears of broader regional instability. Trump warned that the US would take further military action if Iran resumes its nuclear program.

Expectations of Fed rate cuts and political uncertainty have weighed on the US dollar. Currently, traders and investors are closely monitoring the Fed's moves, awaiting signals on when and how it will cut rates going forward. The market is pricing in at least two rate cuts in 2026, but most expect no major moves before June. The Fed itself projects just one rate cut next year, yet significant divisions within the central bank have left market participants highly uncertain about the next steps in US monetary policy.

In addition, traders are keeping a close eye on who President Donald Trump might nominate to succeed Jerome Powell as the next Fed Chair. Any news related to this appointment could further roil markets and trigger sharp swings in the US dollar, either upward or downward.

Looking ahead, traders will focus on US economic indicators, Fed rhetoric, and political developments. All these factors are likely to exert a significant impact on the US dollar's performance in early 2026. If the market gains greater clarity on the path of interest rates or the next Fed Chair, we may see considerable short-term volatility in the US dollar.

Technical Analysis

On the 1-hour chart, the Bollinger Bands have contracted, with moving averages flattening out. Prices are oscillating along the middle band. Following a bullish MACD crossover, the fast and slow lines have pulled back toward the zero line, indicating an imminent trend reversal. The RSI stands at 49, suggesting that market participants are adopting a wait-and-see stance. Immediate resistance is located near the upper Bollinger Band around the 77 level.

On the 4-hour chart, the Bollinger Bands have narrowed, with moving averages trading sideways. Prices have moved back above the EMA12. A sustained break above the EMA12 could see silver challenging the upper Bollinger Band. Conversely, a failure to hold above this level may trigger a pullback toward the EMA50 around 70 and the lower Bollinger Band near 67.5. The RSI is at 55, placing the market in a neutral zone. From a short-term perspective, lower highs have been forming, indicating a high probability of further correction.

Therefore, it is advisable to go short first, then long in the near term.

A Sharp Drop! Will Silver Keep Underperforming?_1

A Sharp Drop! Will Silver Keep Underperforming?_2

Trade Recommendations

Trade Direction: Sell

Entry Price: 75

Target Price: 60

Stop Loss: 86

Support: 65/60/56

Resistance Levels: 70/75/80

Risk Warnings and Disclaimers

Add to Favorites

Alan

Commodity

Summary:

Gold saw a sharp pullback yesterday, yet the overall uptrend remains intact. Traders are advised to wait for the end of the correction phase.

SELL XAUUSD

Close Time

CLOSED

4395.00

Entry Price

4295.00

4450.00

4283.32 -55.79 -1.29%

197.6

Pips

Profit

4295.00

4375.24

Exit Price

4395.00

Entry Price

4450.00

Fundamentals

Gold prices diverged at high levels during yesterday's session. In early trading, prices held firm at elevated levels, buoyed by sustained bets on the Fed's future rate-cut path as well as expectations of central bank and physical buying. However, gold subsequently retreated under the combined impact of exchange-level risk management moves and a short-term rebound in the US dollar.

The market's pricing of the Fed's 2026 rate cuts remains the core macro driver for gold: as long as the market expects the rate-cut cycle to persist, the decline in real interest rates will continue to boost gold's appeal. Conversely, any signal hinting at a slower pace of rate cuts will quickly curb gold prices.

Meanwhile, sudden changes in liquidity conditions and trading mechanisms amplified intraday volatility. The Chicago Mercantile Exchange (CME) recently raised margin requirements for precious metals futures to address extreme volatility. This move immediately squeezed leveraged capital and high-frequency positions after the market opened, triggering a rapid pullback in gold, silver and other precious metals futures. It was one of the direct triggers for yesterday's intraday decline.

In terms of capital flows: although gold ETFs have recorded continuous net inflows so far this year and central bank purchases remain robust (forming solid medium-to-long-term support), institutions were forced to adjust positions in the short term under the dual pressure of thin liquidity during the holiday window and margin hikes. This triggered a volume-light pullback, or a technical correction characterized by "rallying and then falling back". Monthly and quarterly flows of global gold ETFs still point to a solid bullish foundation, though short-term capital flows can reverse in an instant.

Technical Analysis

On the daily chart, gold opened higher but moved lower yesterday, with bears dominating intraday trading, leading to a single-day drop of over $200. Nevertheless, from the perspective of the overall trend, the moving average system still maintains a bullish alignment, indicating that the medium-to-long-term trend remains upward.

Gold Pullback May Not Be Over, Risk of a Double Bottom Test_2

On the 4-hour chart, affected by the sentiment of yesterday's sharp decline, gold is experiencing a weak rebound intraday. There is a possibility of a secondary downward test in the short term. Traders should watch the primary support zone around 4300-4290 below and the immediate resistance range of 4400-4415 above.