The EURJPY pair reached the main target at 184.90, forming a strong barrier to begin forming bearish corrective waves, to settle near 183.75, announcing the beginning of gathering some gains in the current period trading.
Stochastic is approaching 20 level, to increase the negative pressure, which makes us prefer more corrective trading that might target 183.30 level, reaching key support at 182.80, while stepping above 184.10 again and providing positive close will reinforce the chances of forming new bullish waves, to repeat the pressure on the mentioned barrier.
The expected trading range for today is between 183.30 and 184.10
The EURJPY pair reached the main target at 184.90, forming a strong barrier to begin forming bearish corrective waves, to settle near 183.75, announcing the beginning of gathering some gains in the current period trading.
Stochastic is approaching 20 level, to increase the negative pressure, which makes us prefer more corrective trading that might target 183.30 level, reaching key support at 182.80, while stepping above 184.10 again and providing positive close will reinforce the chances of forming new bullish waves, to repeat the pressure on the mentioned barrier.
The expected trading range for today is between 183.30 and 184.10
Ultimately, this is a market that looks like it has somewhere to be, and that somewhere is much higher.
The Euro initially fell against the Japanese Yen in early trading on Monday, which would make a certain amount of sense considering just how explosive and bullish the candlestick was from Friday.
Traders would have taken some profit, but ultimately, this is a market that looks like it has somewhere to be, and that somewhere is much higher.
I had suspected that the Euro was going to reach the 185 Yen level sometime in the near future, but I didn’t expect it to happen as quickly as it did. That being said, this is the end of the year, and liquidity could end up being an issue, but that could also cause quite vicious moves in the currency markets as well. It doesn’t mean that it has to be stagnant.
MARKET LIQUIDITY AND BANK OF JAPAN IMPACT
Don’t be overly surprised if we get fireworks. There have been a few years in the last 20 years that I’ve been doing this and that we’ve seen massive moves, perhaps due to everybody being on the wrong side of a trade or, better yet, everybody being on the right side of the trade and taking their profit. Liquidity does strange things to the market when it’s disappearing, and we may see that here in a bit.
Clearly, there’s only one direction to trade this pair at the moment and probably going forward, and that’s to the upside. Despite the fact that the Bank of Japan has raised rates, the reality is that they are getting punished in the bond market, and Japan does not have the capacity to hold on to high rates for any significant amount of time because, quite frankly, they don’t have the demographics to do it.
They also have far too much debt. So this will continue to be a problem for the Japanese Yen, and I look at each dip as a buying opportunity. In fact, I don’t worry about the trend at all until we break below the 180 Yen level at the very minimum. So on a pullback and a bounce, I want to start buying on the right-hand side of the V, and so far, that seems to be playing out on the short-term chart.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
The GBPJPY pair ended its last bullish rally by hitting 211.60 level, to achieve the extra suggested target in the previous report, then begin gathering some gains by forming corrective decline and its stability near 210.50.
By the above image, we notice the stability of the price within the main bullish channel’s levels by forming extra support at 209.75 level, which might help to end the temporary negative pressures, to wait for gathering extra bullish momentum to renew the bullish attempts and reaching new bullish stations in the near period by its rally towards 211.95 reaching 212.55 resistance.
The expected trading range for today is between 209.75 and 211.60
The EURJPY pair reached the main target at 184.90, forming a strong barrier to begin forming bearish corrective waves, to settle near 183.75, announcing the beginning of gathering some gains in the current period trading.
Stochastic is approaching 20 level, to increase the negative pressure, which makes us prefer more corrective trading that might target 183.30 level, reaching key support at 182.80, while stepping above 184.10 again and providing positive close will reinforce the chances of forming new bullish waves, to repeat the pressure on the mentioned barrier.
The expected trading range for today is between 183.30 and 184.10
Copper price provided sideways trading, keeping its stability within the bullish track by its fluctuation near$5.5000 level, due to stochastic attempt to exit the overbought level, which makes us prefer more sideways trading until it gathers the required extra positive momentum for breaching the current barrier, to reach extra stations at $5.6300 and $5.7400.
While the failure of the breach might push the price to form some corrective waves, which forces it to suffer temporary losses by targeting the initial support at $5.1300.
The expected trading range for today is between $5.3100 and $5.6300
Trend forecast: Sideways until achieving the breach
The GBP/USD pair builds on the previous day’s strong move higher and gains positive traction for the second consecutive day on Tuesday. The momentum lifts spot prices to the highest level since early October, closer to the 1.3500 psychological mark, and is sponsored by a broadly weaker US Dollar (USD). Moreover, the technical setup backs the case for a further appreciating move for the currency pair.
The recent breakout through the 100-day Simple Moving Average (SMA) and a subsequent strength beyond the 61.8% Fibonacci retracement level of the September-November downfall, around the 1.3500 round figure, will be seen as a fresh trigger for bulls. Moreover, positive oscillators on the daily chart validate the near-term constructive outlook and suggest that the path of least resistance for the GBP/USD pair is to the upside amid the Bank of England’s (BoE) hawkish tilt.
The 100-day SMA has flattened in recent sessions and is starting to edge higher, with price holding above it and preserving a firm tone. The Moving Average Convergence Divergence (MACD) line stays in positive territory but has eased from prior highs, hinting at moderating upside momentum. A sustained break and acceptance above the 1.3500 mark could pave the way for a move beyond the 1.3600 mark, towards the 78.6% Fibo. retracement level, around the 1.3615 area.
If the pair retreats, the 100-day SMA, currently pegged around the 1.3370 region, would offer initial dynamic support to the GBP/USD pair. The Relative Strength Index (RSI) at 68 sits near overbought, signaling robust yet stretched momentum that could cap gains without fresh catalysts. A clear move above the 61.8% retracement would keep buyers in control, whereas failure to hold the break could see consolidation back toward the moving average.
(The technical analysis of this story was written with the help of an AI tool)
GBP/USD daily chart
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Silver price (XAG/USD) hit a fresh record high of $70.00 during the Asian hours on Tuesday, trading around $69.70 per troy ounce at the time of writing. Precious metals, including Silver receive support from safe-haven demand amid rising United States (US)–Venezuela tensions.
US President Donald Trump said on Monday that the US would keep and maybe sell the Oil it had seized off the coast of Venezuela in recent weeks. Trump added that the US would also keep the seized ships. Moreover, Ukraine continues strikes on Russian energy infrastructure, with the latest attack damaging two vessels and two piers and igniting a fire in a Black Sea coastal village.
The non-interest-bearing Silver attracts investors amid growing expectations that the Federal Reserve will continue easing policy, reinforced by President Donald Trump’s calls for lower borrowing costs.
Federal Reserve (Fed) Member of the Board of Governors Stephen Miran said in an interview on Bloomberg TV on Monday that the last few months have seen data consistent with his view of the world and that he doesn’t see a recession in the near term. Miran said that failing to ease policy would raise recession risks, adding that the need to dissent for a 50 basis points diminishes over time as rates are reduced.
Traders await the US Gross Domestic Product (GDP) Annualized for the third quarter due on Tuesday. The US economy is estimated to have expanded at an annual rate of 3.2% in Q3. It would be a slowdown from the 3.8% growth in Q2.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
The Japanese yen rebounded for the second consecutive day as investors reacted to the ongoing divergence between the Federal Reserve and the Bank of Japan (BoJ). The USDJPY exchange rate retreated to a low of 156.30, down sharply from the year-to-date high of 157.83. It has also formed a risky chart pattern pointing to more downside in the near term.
The daily timeframe chart shows that the USDJPY exchange rate has pulled back in the past two consecutive days. This retreat happened after the pair formed a double-top pattern at 157.83 with a neckline at 154.37.
A double-top pattern is one of the most common bearish reversal chart patterns in technical analysis.
A closer look shows that the pair has formed a bearish divergence pattern as the MACDA and the Relative Strength Index (RSI) continued to move downwards. A bearish divergence happens when these oscillators drop when a currency pair is in an uptrend.
Therefore, a combination of a double-top pattern and a bearish divergence means that the USDJPY pair will continue falling, with the next key target being at 154.45, the neckline of this pattern. A move below that price will point to more downside, potentially to the psychological level at 150.
BoJ and Fes divergence
The Japanese yen rose for the second consecutive day after Japan’s Finance Minister, Satsuki Katayama, said that the government was prepared to take bold actions if it moves out of line with its fundamentals.
His statement came a few days after the Bank of Japan (BoJ) delivered its interest rate decision, which was in line with expectations.
The bank hiked interest rates by 0.25% and delivered a muted forward guidance, with analysts expecting the bank to deliver one or two hikes next year. It is doing that since inflation has remained at an elevated level in the past few months. A report released on Friday showed that inflation rose to 3.0%.
The BoJ has taken other hawkish policies that have pushed bond yields to the highest level in years. For example, it is considering selling ETFs worth over $500 billion and had already ended its quantitative tightening policy.
The Federal Reserve has taken the opposite approach as it embraced a dovish tone. It slashed interest rates for the third consecutive meeting this month and some Fed officials are hinting of more cuts in the coming meetings.
In a statement on Monday, Governor Stephen Miran warned that the Federal Reserve risked a recession without cutting interest rates. He said:
“The unemployment rate has poked up potentially above where people thought it was going to go. And so we’ve had data that should push people into a dovish direction.”
The most recent data showed that the unemployment rate rose to 4.6% in November, reflecting the number of government employees who took Donald Trump’s early retirement offers. Another report showed that US inflation cooledin November.
However, James Williams, the head of the New York Federal Reserve, warned that there was no urgency to cut interest rates again, recommending a continued pause.
Looking ahead, the US will publish some important data later on Tuesday. The key numbers to watch that may move the USDJPY exchange rate will be the upcoming US consumer confidence report, GDP, industrial, and manufacturing numbers.
Gold (XAU/USD) is seen building on the previous day’s strong rally of over 2% and continues scaling new all-time highs for the second consecutive day on Tuesday. The commodity climbs closer to the $4,500 psychological mark during the Asian session and remains well supported by a combination of factors. Comments from US Treasury Secretary Scott Bessent add to the uncertainty around the Federal Reserve’s (Fed) long-term policy credibility. This, along with dovish Fed expectations, exerts some follow-through pressure on the US Dollar (USD) and underpins the bullion. Adding to this, persistent geopolitical uncertainties benefit the precious metal’s safe-haven status and contribute to the strong move up.
Speaking on a podcast, Bessent opened the door to a rethink of the Fed’s inflation framework and said that he favours the idea of an inflation range rather than a fixed-point target. Bessent further suggested the new Fed chair could consider scrapping the dot plot — a move that would mark a significant shift in how the central bank communicates its policy outlook. This comes on top of expectations that the new Fed chair will slash interest rates regardless of the economic fundamentals. In fact, traders are still pricing in a greater chance of two more rate cuts by the US central bank, which drags the USD lower for the second straight day and further drives flows towards the non-yielding yellow metal.
US President Donald Trump had ordered a blockade of sanctioned oil tankers entering or leaving Venezuela to tighten the economic screws on President Nicolás Maduro. The US seized a large tanker on December 10 and intercepted a second vessel over the weekend, and was also pursuing a third tanker. This raises the risk of a further escalation of tensions in the region. Apart from this, US Vice President JD Vance said that he doesn’t have confidence that there will be a peaceful solution to a nearly four-year-old Russia-Ukraine war. Moreover, the possibility of another Israeli strike against Iran keeps geopolitical risks in play and turns out to be another factor that contributes to the XAU/USD pair’s strong positive momentum.
Meanwhile, the aforementioned supportive fundamental backdrop, to a larger extent, offsets a generally positive tone around the equity markets, suggesting that the path of least resistance for Gold remains to the upside. Traders now look to the US economic docket – featuring the delayed release of the Q3 GDP report and Durable Goods Orders later during the North American session. Apart from this, comments from influential FOMC members could drive the USD demand and produce short-term trading opportunities around the XAU/USD pair amid the year-end thin liquidity. However, extremely overbought conditions on short-term charts warrant caution for bulls before positioning for further appreciation.
Gold daily chart
Technical outlook
The overnight breakout through the $4,375-4,380 hurdle (the previous all-time peak) and a subsequent move beyond the $4,400 mark was seen as a fresh trigger for the XAU/USD bulls. The 50-day Simple Moving Average (SMA) climbs steadily, further underscoring a firm uptrend. Price holds above the SMA, currently pegged around the $4,160 area, which should act as dynamic support. The Moving Average Convergence Divergence (MACD) line extends above the Signal line and sits in positive territory, suggesting strengthening bullish momentum. However, the Relative Strength Index (RSI) stands at 81 (overbought), which could cap gains and prompt a near-term pause.
Momentum remains strong as the uptrend is supported by the rising SMA, while the positive MACD tone reinforces buyers’ control. With the RSI stretched, a consolidation or shallow pullback could unfold, and a slide toward the rising average would not disrupt the broader bullish bias. A sustained close above support would keep the upside path intact, while any cooling of momentum would likely translate into range trading rather than a trend reversal.
(The technical analysis of this story was written with the help of an AI tool)
