The Australian dollar advanced to a multi-week high near 0.6600 on Wednesday, as traders looked past a softer-than-expected GDP headline and instead focused on the underlying strength of private investment and household consumption. The latest figures, while modest on the surface, effectively reinforced the Reserve Bank of Australia’s case for remaining on hold — a stance that stands in stark contrast to expectations for significant policy easing from the U.S. Federal Reserve next year.

Australia’s economy expanded 0.4% in the third quarter, slowing from 0.7% in Q2 and falling short of both market forecasts (0.7%) and the RBA’s own 0.5% projection. On an annual basis, GDP rose 2.1%, broadly aligned with the central bank’s estimate for year-end growth around 2%, suggesting the economy retains enough underlying momentum to keep inflationary pressures from fading too quickly.

Yet the headline disappointment masked a sturdier story beneath the surface. The largest drag came from inventory destocking, which shaved 0.5 percentage points off growth — a temporary factor rather than a signal of weakening demand. Stripping this out reveals a surprisingly solid performance in private domestic demand, the area the RBA watches most closely for inflation persistence.

Private investment added 0.5 percentage points to GDP, fueled by large-scale data center expansions and continued corporate capital expenditure. Household consumption also contributed positively, adding 0.3 percentage points, driven primarily by essential spending rather than discretionary splurges. In other words, Australian consumers are cautious but not collapsing, and businesses continue to deploy capital with confidence despite tighter financial conditions.

This divergence in domestic and external pressures gives policymakers little reason to shift their current bias. Markets seem to agree — the swaps curve continues to price additional tightening risks in Australia over the next year, even as traders expect the Fed to deliver up to 100 basis points of cuts. For currency markets, that creates a widening one-year implied policy rate differential squarely in the Australian dollar’s favor.

Analysts at Brown Brothers Harriman (BBH) argue that this gap provides material upside for AUD/USD, potentially pushing the pair toward 0.6700 in the months ahead if U.S. yields continue to decline while Australian rates stay anchored at elevated levels. For now, traders appear comfortable leaning into that narrative, with the Aussie’s latest surge suggesting growing conviction that policy spreads matter more than soft patches in headline growth.

From a technical standpoint, AUD/USD continues to reinforce its bullish bias, with price action preparing to challenge the immediate resistance level at 0.6580. The pair is finding dynamic support from the 50-day EMA, which has acted as a springboard for intraday rallies, while relative strength indicators are flashing constructive signals despite extended readings.

Momentum remains firmly tilted to the upside, shaped by a minor but persistent bullish wave on the short-term time frame. The strong and broadening volume profile around recent gains underscores buyers’ commitment, suggesting that a clean break above 0.6580 could open the door for a retest of the psychological 0.6700 handle — a level increasingly aligned with the macro narrative of widening policy divergence.

BUY AUDUSD

ENTRY PRICE: 0.6590

STOP LOSS: 0.6530

TAKE PROFIT: 0.6700

Beijing's recent verbal and trade counter-measures, which triggered by Tokyo's Taiwan-strait statements and the ensuing diplomatic spat, have already hit China-exposed sectors such as inbound tourism and retail. Investors fear that an escalation could undermine Japan's export and tourism receipts, eroding JPY fundamentals.

Historically, regional geopolitical stress has supported safe-haven demand for the yen. This episode, however, is more nuanced. A knee-jerk "risk-off" bid for JPY is possible if the market treats the clash as a localized security threat. However, any sustained hit to growth, corporate earnings or fiscal credibility would likely spark capital outflows and push USDJPY higher.

Positioning is therefore caught between these two scenarios. Flows are also being shaped by Japan's latest fiscal-stimulus package and the rise in JGB yields, turning the fiscal trajectory and the widening rate differential into fresh variables for JPY strength.

From the daily chart, USDJPY broke out of the triangular consolidation zone and once rallied to test the 158.00 handle, but failed to sustain a break. That triggered a pullback to the 154.70 support confluence, which coincides with the SMA20 and forms a reinforced support cluster. Monday's long lower shadow and Tuesday's follow-through bullish close have strengthened near-term upside momentum.

For now, the immediate resistance to watch is 156.17. A decisive break on rising volume would open room for a retest of 158.00. Conversely, if the pair remains capped below 156.17 and turns lower, expect another probe of the 154.70 support.

Trade Direction: Buy

Entry Price: 155.70

Target Price: 160.10

Stop Loss: 154.60

Valid Until: December 17, 2025, 23:00:00

Support: 155.50/154.70

Resistance Levels: 158.86/160.00

This week, the Canadian dollar will be influenced by November's labor market data, which is scheduled for release on Friday. The consensus forecasts the national unemployment rate to rise from 6.9% in October to 7%. Meanwhile, the overall labor force is expected to remain unchanged. The Canadian government plans to implement capacity enhancement measures for the Trans Mountain pipeline prior to divesting its equity stake. Energy Minister Tim Hodgson stated that the federal government will only consider the sale after maximizing the pipeline's throughput through related optimization initiatives over the coming years. The Trans Mountain pipeline was acquired by the government in 2018 to support its expansion project, which ultimately cost approximately CAD 34 billion and was officially commissioned last year, increasing crude oil transportation capacity from 300,000 to 890,000 barrels per day. Former Prime Minister Trudeau repeatedly expressed that the government does not intend to hold the pipeline long-term, with plans to ultimately privatize it and gift some equity stakes to Indigenous communities along the route. Currently, Prime Minister Mark Carney's administration prefers to initiate the sale process after resolving pipeline toll disputes and completing several capacity optimization projects. Hodgson noted that these high-value "bottleneck removal" measures could boost the pipeline's total capacity to approximately 1.25 million barrels per day. Additionally, Vancouver's Fraser Ports are dredging the channel to increase vessel loading capacity, thereby maximizing the asset value for taxpayers. Currently, the tolling dispute is projected to be resolved by late 2026 or early 2027. Regarding Indigenous equity ownership, the Carney government has not yet clarified whether it will adopt the previous administration's approach. However, the latest memorandum of understanding with Alberta stipulates that future pipeline projects to the British Columbia coast must incorporate Indigenous joint ownership and be supported by federal loan guarantees.

On Tuesday, U.S. President Donald Trump indicated that he has narrowed down the Federal Reserve's potential Chairmanship candidates to a single individual, with an announcement expected in early 2026. During his remarks, he mentioned White House Adviser Hassett by name. According to Reuters, Trump stated, "I believe a potential Federal Reserve Chair has emerged. May I say that? It's a potential. I can tell you, he's a respected person. Thank you, Kevin." Simultaneously, investors are closely monitoring the upcoming November releases of U.S. ADP employment change figures and the ISM Services PMI data, which are scheduled for the North American trading session. Given that most officials, including Jerome Powell, have warned of downside risks in the labor market, U.S. private sector employment figures are expected to significantly influence market expectations regarding the Federal Reserve's monetary policy trajectory. Major investment banks have substantially increased their forecasts for a December rate cut. Institutions such as Bank of America Global Research, J.P. Morgan, and Goldman Sachs project a 25 basis point reduction, while Morgan Stanley and Standard Chartered maintain their previous forecasts. The CME FedWatch tool indicates that the market-implied probability of a rate cut has risen to 89.2%, reflecting heightened investor concern over labor market weakness and recent dovish signals from Federal Reserve officials.

In the 1D timeframe, the Bollinger Bands are narrowing, indicating decreasing volatility. The short-term EMA12 has reversed downward, with prices oscillating between the EMA50 and the lower Bollinger Band. The MACD momentum is weakening; the MACD line and signal line have produced a death cross, suggesting a high probability of price decline toward the EMA200, around 1.392. The RSI stands at 42, reflecting strong market bearish sentiment and suggesting the short-term correction is ongoing. In the 4H timeframe, the Bollinger Bands are expanding downward. Following the MACD golden cross, the MACD line and signal line are retracing toward the zero-axis; however, they still remain some distance apart, indicating the correction has not yet concluded. Support levels are identified at the lower Bollinger Band and key round numbers, specifically around 1.394 and 1.39. The RSI is at 36, entering oversold territory. Therefore, it is recommended to go short at the highs.

Trading Direction: Sell

Entry Price: 1.399

Target Price: 1.386

Stop Loss: 1.41

Support: 1.393, 1.39, 1.386

Resistance: 1.414, 1.42, 1.44

Since the start of the year, silver prices have surged by over 99%. In October, constrained silver supply drove prices to $50 per ounce. Analysts at the time attributed this to a temporary shift in metal holdings. Last spring, due to tariff concerns, large amounts of silver flowed into the U.S., causing a shortage in London. According to Bloomberg, the amount of freely circulating silver (silver not locked in ETFs or other funds) plummeted from a high of 850 million ounces to just 200 million ounces — a drop of 75%. Metals Focus estimated that the silver supply at one point fell as low as 150 million ounces. Unprecedented silver demand in India pushed the market to the brink of collapse. As gold prices repeatedly hit new highs, Indians turned to silver, further intensifying pressure on London's silver supply. Eventually, as metal flowed back from New York to London, the market adjusted and pressure eased. However, after a brief pullback, silver prices resumed their upward trend. According to an analyst at ANZ Group, recent sell-offs in London's stock market have caused global supply shortages, and the impact of this shortage is still ongoing. The problem is not that London lacks enough silver, but that there is not enough silver anywhere. Bloomberg reports that recent inflows of silver into London have worsened supply tightness elsewhere. Silver inventories in warehouses related to the Shanghai Futures Exchange have fallen to their lowest level in nearly a decade. Meanwhile, silver lease rates have risen, reflecting strong demand and limited metal availability. This issue cannot be solved simply by moving metal from one warehouse to another. The crux is that demand has exceeded supply for years. Metals Focus reports that silver is on track for a fifth consecutive year of structural market deficit. After hitting record highs in 2024, industrial demand is expected to fall about 2% due to price pressures, leading to an overall demand decline of around 4%. Yet with the silver mine output flat, production remains insufficient to meet market needs. Metals Focus forecasts that gold demand this year will exceed supply by 95 million ounces. This would bring the cumulative market gap over the past five years to 820 million ounces, equivalent to the average annual output of mines in one year. Since 2010, the cumulative silver supply shortfall has exceeded 580 million ounces. Even with higher prices, mined supply is unlikely to grow quickly enough to close the gap. Silver mine output peaked in 2016 at 900 million ounces and has since declined by an average of 1.4% annually until last year. Output is projected to reach 814 million ounces in 2023. It appears we will have to rely on drawdowns in above-ground silver stocks to cover the deficit for at least the next few years. Expectations that the Federal Reserve will continue easing monetary policy are also boosting silver prices. The U.S. recently added silver to its list of strategic minerals, which could intensify demand pressures and supply shortages. The director of gold and silver at Metals Focus said, "There's definitely going to be far more tightness in the silver market.” Bloomberg notes that, due to fears of a sudden spike in U.S. metal prices, some traders are reluctant to ship metal out of the U.S., and if global markets tighten further, there is little hope for relief. There are also concerns that the U.S. may impose tariffs on silver to protect the domestic supply. These fundamental supply–demand dynamics should continue to support silver prices at least in the medium term.

According to the CME FedWatch tool, the probability of the Fed cutting rates by 25 basis points in December is as high as 89%, up from about 63% a month ago. Fed expectations dominate market movements. New York Fed President Williams stated that Fed policy is still "slightly restrictive," suggesting room to move toward neutral. Lower rate expectations reduce the relative return on U.S. assets, and when traders grow more confident in easing, the dollar index typically comes under pressure. Wall Street institutions are largely aligned in their forecasts. Bank of America currently leans toward a December cut, citing soaring unemployment, weak private-sector hiring, and Powell's reluctance to alter the dovish pricing stance. Such consensus tends to bolster market confidence and prompt investors to further unwind dollar positions. Fiscal uncertainty exacerbates dollar weakness. A $4.1 trillion tax reform plan, tariff uncertainties, and questions about Fed independence are dampening foreign investor appetite for U.S. assets, reducing the capital inflows that normally support the dollar.

As shown in the 1H chart, the Bollinger Bands are narrowing, and the moving averages are flattening. After being pressured by the upper band, silver is oscillating near the middle band. MACD shows a death cross, and upward momentum is gradually weakening — a sign of bearish divergence indicating further declines. RSI is at 47, signaling market hesitation. Support lies near EMA50 and the Bollinger lower Band at approximately 57.3 and 56.5, respectively. Regarding the 4-hour chart, Bollinger Bands are expanding upward, moving averages are diverging upward, and the bullish trend remains intact. However, a large bearish candle has pulled the price back to EMA12. If this level is breached, the trend could reverse. MACD shows a death cross as well, while the RSI is at 61. However, successive highs are getting lower, potentially signaling a turning point. Selling at highs is recommended.

Trading direction: Sell

Entry price: 58

Target price: 50

Stop loss: 60

Support: 55/53/50

Resistance: 59/60/65

Bank of Japan (BoJ) Governor Kazuo Ueda reiterated on Monday that the Japanese central bank remains on track to raise interest rates, provided that prices and the broader economy continue to develop as anticipated. Ueda added that the probability of the BoJ's base-case scenario for growth and inflation is gradually increasing. This potential for tightening, however, is offset by domestic concerns. Rising Japanese Government Bond (JGB) yields are actively increasing the country's debt servicing costs, effectively limiting the BoJ’s capacity for aggressive tightening and posing a structural obstacle for the Yen (JPY).

U.S. economic data released on Monday painted a softer picture for the manufacturing sector. The ISM Manufacturing Purchasing Managers' Index (PMI) fell to 48.2 in November from 48.7, missing the forecast and marking the ninth consecutive month of contraction. The underlying details were equally concerning: the New Orders Index fell to 47.4, extending its losing streak, while the Employment Index dropped to 44, suggesting ongoing momentum loss in the labor market. The only area of resilience was the Prices Paid Index, which ticked up to 58.5, signaling persistent cost pressures.

Following the consistently weaker U.S. economic data, market participants have aggressively increased their bets on Fed interest rate cuts. Traders are now pricing in an 87% probability of a 0.25% rate cut at the Federal Reserve's meeting next week, a sharp acceleration from 63% just one month ago, according to the CME FedWatch Tool. Adding fuel to the dovish speculation is an unconfirmed report suggesting that former White House Economic Advisor, Kevin Hassett, has emerged as the favored candidate to be the next Fed Chair. Hassett is seen as an ally who supports U.S. President Donald Trump's call for a faster and deeper reduction in interest rates to stimulate the economy. U.S. Treasury yields remain firm, with the 10-year Treasury yield sitting at 4.086%, while real yields hold stable at 1.856%.

In geopolitical news, Russian President Vladimir Putin met with U.S. President Donald Trump's special envoy, Steve Witkoff, and son-in-law, Jared Kushner, in the Kremlin for talks on a possible resolution to the conflict in Europe. Just before the meeting, Putin issued a warning that Europe would face a swift defeat if it entered into a war with Russia, and he dismissed European counter-proposals on Ukraine as being "absolutely unacceptable" to Russia. Trump has repeatedly voiced his desire to end the conflict, but his efforts to date have yet to secure a peace deal.

The USD/JPY pair is clearly positioned within a prevailing downtrend, evidenced by a defined bearish trendline and the failure to print new higher highs. This suggests that the downward trajectory could continue. The price has recently retested the confluence zone created by the bearish trendline and the 100-period Moving Average (MA), which sits at 155.91. The 200-period MA is positioned slightly higher at 156.27. This critical confluence zone offers a high-probability opportunity for entering short (sell) positions, with a target set near the recent local low of 154.80, the next key support level.

The Relative Strength Index (RSI) is currently at the neutral 47 level, having recently fallen from a high of 70 (overbought territory). Crucially, the clearest technical signal is a bearish divergence on the RSI compared to the previous touch of the trendline. This divergence signals that buying strength is exhausted, potentially opening the door for a decisive move to the downside. Conversely, a strong break and close above the bearish trendline would invalidate the current short setup and suggest that further gains are likely.

Trading direction: Sell

Entry price: 155.75

Target price: 154.80

Stop loss: 156.40

Validity: Dec 12, 2025 15:00:00

The latest figures from the Eurozone painted a mixed but relatively stable inflation picture for November. The Harmonized Index of Consumer Prices (HICP) rose 2.2% year-over-year (YoY), coming in fractionally above the consensus of 2.1% and matching the pace seen in October. The Core HICP, which excludes volatile components, increased by 2.4% YoY, just missing the 2.5% forecast and remaining unchanged from the October rate.

On a monthly basis, Core HICP fell by 0.5% in November, reversing the 0.3% increase recorded in October. The headline HICP decreased by 0.3% in November, compared to an increase of 0.2% in October. These inflation data points bolstered the case for the European Central Bank (ECB) to maintain its current policy stance, reinforcing market expectations that interest rates will remain steady as inflation stays slightly above the ECB’s 2% medium-term target. With policymakers signaling little urgency to adjust policy, attention now focuses on the ECB’s next rate decision, scheduled for December 18th. ECB Governing Council member Joachim Nagel recently commented that the Eurozone had "practically reached" its inflation objective and that the rate would continue to fluctuate around this level in the near future.

Meanwhile, the U.S. economic data released on Monday painted a softer picture for the manufacturing sector. The ISM Manufacturing Purchasing Managers' Index (PMI) fell to 48.2 in November from 48.7, missing the 48.6 forecast and marking the ninth consecutive month of contraction. The underlying details were equally soft. The New Orders Index fell to 47.4 from 49.4, extending its recent string of losses, while the Employment Index dropped to 44 from 46. The only firm spot came from the Prices Paid Index, which remained in expansion, ticking up to 58.5 from 58.

Following the consistently weaker U.S. economic data, market participants have aggressively increased their bets on interest rate cuts. Traders are now pricing in an 87% probability of a 0.25% rate cut at the Federal Reserve's meeting next week, a sharp increase from 63% just one month ago, according to the CME FedWatch Tool. U.S. Treasury yields remain firm, with the 10-year Treasury yield sitting at 4.086%. U.S. real yields, which correlate inversely with gold prices, are stable at 1.856%.

In geopolitical news, Russian President Vladimir Putin met with U.S. President Donald Trump's special envoy, Steve Witkoff, and son-in-law, Jared Kushner, in the Kremlin for talks on a possible resolution to the conflict in Europe. Just before the meeting, Putin issued a warning that Europe would face a swift defeat if it entered into a war with Russia, and he dismissed European counter-proposals on Ukraine as being "absolutely unacceptable" to Russia. Trump has repeatedly voiced his desire to end the conflict, but his efforts to date have yet to secure a peace deal.

The EUR/USD pair appears to have broken out of a bearish channel that had been in place since October 1st, originating from 1.1778 and finding a local low at 1.1469 on November 5th. Following this local low, the price initiated a strong recovery that was initially rejected by the channel's upper boundary. However, a subsequent attempt resulted in a decisive breakout to the upside.

Crucially, on a recent pullback, the price retested the bearish trendline—now acting as support—and rebounded strongly, confirming the flip of resistance into support. This change in technical dynamic strongly suggests a bullish breakout that could propel the price toward the next significant resistance level at 1.1758.

The 100-period and 200-period Moving Averages (MAs) on the 4-hour chart are tightly grouped at 1.1578 and 1.1584, respectively, sitting just below the upper channel line and the recent rebound point. This positioning indicates that the MAs are now acting as solid dynamic support. Furthermore, the Relative Strength Index (RSI) only reached a minimum of 48 during the recent pullback, failing to enter oversold territory even after the breakout. This suggests that the underlying momentum remains strong, signaling room for continued upside. Current purchases are favored from the 1.1604 zone. Conversely, a strong downward move that places the price back inside the bearish channel would invalidate the current bullish setup.

Trading direction: Buy

Entry price: 1.1630

Target price: 1.1758

Stop loss: 1.1540

Validity: Dec 12, 2025 15:00:00