The year-end period was generally quiet, with no major economic releases and New Year holidays keeping trading activity subdued. Low liquidity limited price movements, and most market action reflected position adjustments rather than strong directional views.

Gold was the most notable mover, falling early in the week and retracing part of its recent gains after a strong run higher. The Japanese yen continued to weaken, with no clear signs of intervention from Japanese authorities to slow the move.

The Federal Reserve released the minutes from its December policy meeting, which contained few surprises. Officials reiterated that future interest rate cuts will depend on incoming inflation and economic data, with markets currently pricing in around a 15% chance of a U.S. rate cut at the January meeting.

U.S. Stocks

Year-end profit taking pushed the Dow slightly lower, but price action remained range-bound with limited volatility. Range trading conditions are likely to continue through most of the week as markets look ahead to potential U.S. interest rate cuts as the next driver for gains. U.S. employment data could be key in determining the start of the next meaningful trend. Resistance is seen at 49,000 and 50,000, while support is located at 48,000, 47,500, 47,000, 46,500, and 46,000.

Japanese Stocks

Japanese stocks edged slightly lower in the final week of the year but still ended 2025 with a strong 28% gain, marking the third consecutive year of gains. With the yen likely to remain weak, the Nikkei outlook stays positive as long as prices hold above the 50,000 level. Resistance is seen at 51,000円, 51,500円, and 52,000円, while support is located at 49,000円, 48,000円, and 47,000円.

USD/JPY

USD/JPY resumed its uptrend last week as Japan's 10-year government bond yield pushed above 2%, keeping concerns about Japan's public finances in focus. Markets remain skeptical about the Japanese government's ability to curb yen weakness through intervention, supporting continued upside pressure. With price action likely to remain range-bound ahead of Friday's U.S. employment data, buying opportunities may emerge within the range. Resistance is seen at 158, 159, and 160, while support is located at 156, 155, and 154.5.

Gold

Gold fell sharply at the start of last week as profit taking followed the recent strong rally, with the move amplified by thin holiday trading conditions. Despite the size of the pullback, the decline remains modest relative to gold's recent gains and does not change the broader bullish outlook. Ongoing geopolitical risks and expectations of lower U.S. interest rates in the year ahead should continue to support demand, with buyers likely to re-emerge on dips. Resistance is seen at $4,400, $4,500, and $4,600, while support is located at $4,300, $4,275, $4,200, and $4,175.

Crude Oil

WTI crude ended the year quietly, with selling pressure continuing as markets remain concerned about oversupply and a slowing U.S. economy. While technical indicators suggest more sideways movement in the short term, the broader bias remains bearish as long as prices stay below $60. Resistance is seen at $60, $65, $66.50, $70, and $75, while support remains at $55 and $50.

Bitcoin

Bitcoin ended 2025 with a 7% loss, as recent declines reduced activity and led to a range-bound finish to the year. Prices saw a modest rebound last week as the market tested the $90,000 level, but momentum remains limited. While many traders remain bullish on Bitcoin in 2026, a sustained move is unlikely until price breaks out of the $85,000–$95,000 range. Until then, range trading remains the preferred approach. Resistance is seen at $95,000 and $100,000, while support is located at $85,000, $80,000, and $75,000.

This Week's Focus

Markets are returning from the holiday break, but the week is expected to start slowly as traders reassess conditions and position themselves for 2026. Liquidity is likely to remain thin early on, keeping price action subdued. The main focus will be Friday's U.S. employment data, which has the potential to trigger volatility. Gold, equities, and USD/JPY are expected to be the key markets to watch.

Source: ACTIONFOREX