Key Events:

• USDJPY is consolidating near the 150-mark
• Silver is rebounding from one-year support
• The US Dollar index is holding above its one-year resistance ahead of today’s NFP data
• Key market catalyst next week: US CPI data release on Wednesday

The Dollar’s pullback below the 108 zone, coupled with rising inflation figures in Japan, is shifting market sentiment. The latest Tokyo Core CPI has risen from 1.8% to 2.2%, boosting expectations for a potential BOJ rate hike on December 19th, just after the anticipated Fed rate cut on December 18th.

Another crucial factor is the “Trump effect” on the US Dollar, which is countering the bearish pressure from priced-in Fed rate cuts as we head into the December holidays. Demand for the US Dollar may increase alongside interest in precious metals, including silver. This dynamic is likely to keep a relatively bullish foundation for both assets unless key support levels are breached.

Technical Analysis: Quantifying Uncertainties

USDJPY Forecast: 3Day Time Frame – Log Scale

Source: Tradingview

USDJPY is currently testing key support at 148.60, with the next level to watch at 146.80 in the event of further downside. Deeper declines could retest levels 144 and 140.
The current technical setup, however, leans bullish:

• The 3-day RSI has rebounded from the neutral zone
• Price action is holding above the 20-period SMA following the November drop
• The 150-mark continues to serve as psychological support

If the 148.60 low holds firm, the next resistance is at 153.30, aligning with the lower boundary of the long-term trendline connecting consecutive lows from January 2023 to 2024. Longer-term resistance levels include 157 and 160, reflecting significant Yen weakness and potential BOJ intervention risks.

Silver Forecast: 3Day Time Frame – Log Scale

Source: Tradingview

Silver is in rebound mode, trading above the $29.80 support, which aligns with the trendline connecting consecutive higher lows over the past year. Resistance remains strong at $31.50.
Key technical indicators signal that the primary uptrend is intact:

• Silver continues to respect the lower channel boundary and May-November support levels
• The 3-day RSI is rebounding from the neutral zone

While gold has broken below the lower boundary of its primary uptrend following the US presidential election, silver remains resilient. Critical support levels are intact until convincingly breached.

Upside potential: Above $31.50, resistance levels to watch include $32.50, $35, $37, and $40

Downside Potential: Below $29.60, support levels lie at $27.80, $26.80, and $26.00

— Written by Razan Hilal, CMT – on X: @Rh_waves and Forex.com Youtube Channel

• EUR/USD fluctuates above 1.0550 after posting strong gains on Thursday.
• Investors await November Nonfarm Payrolls data from the US.
• Near-term technical outlook remains bullish, with next resistance aligning at 1.0600.

EUR/USD gathered bullish momentum and gained more than 0.7% on Thursday. Before testing 1.0600, however, the pair went into a consolidation phase and was last seen fluctuating at around 1.0570.

The US Dollar (USD) came under bearish pressure and helped EUR/USD push higher on Thursday after the US Department of Labor reported that the number of first-time applications for unemployment benefits rose to 224,000 in the week ending November 30 from 215,000 in the previous week.

Later in the day, November labor market data from the US will be scrutinized by investors. Following the 12,000 increase recorded in October, because of hurricanes and strikes, Nonfarm Payrolls (NFP) are forecast to rise by 200,000 in November.

According to the CME FedWatch Tool, markets are currently pricing in about a 70% probability of a 25 basis points (bps) Federal Reserve (Fed) rate cut in December. A disappointing NFP print of 150,000 or lower could confirm a rate reduction and further weigh on the USD. On the flip side, a reading above 200,000 could cause markets to refrain from pricing in a December cut and trigger a leg lower in EUR/USD.

Later in the American session, several Fed policymakers will be delivering speeches. Since the Fed’s blackout period will start on Saturday, these comments could also drive the USD’s valuation heading into the weekend.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the 4-hour chart retreated toward 60 early Friday, suggesting that the bullish bias remains intact, while EUR/USD stages a technical correction. On the upside, 1.0600 (Fibonacci 38.2% retracement of the latest downtrend) aligns as immediate resistance before 1.0650-1.0660 (200-period Simple Moving Average (SMA), Fibonacci 50% retracement) and 1.0730 (Fibonacci 61.8% retracement).

Looking south, first support could be spotted at 1.0520-1.0530 (100-period SMA, 50-period SMA, 20-period SMA, Fibonacci 23.6% retracement) ahead of 1.0500 (psychological level, static level) and 1.0440 (static level).

GBP/USD is trading at $1.27508, slightly down by 0.05% in the session, as it remains above the pivot point at $1.27389. This level aligns with near-term bullish sentiment, supported by an upward channel providing a foundation for further gains.

Immediate resistance stands at $1.27703, with subsequent targets at $1.27932 and $1.28143. On the downside, key support is found at $1.27136, followed by $1.26863 and $1.26600.

The 50-day EMA at $1.27058 and the 200-day EMA at $1.27018 underline a supportive zone, suggesting a bullish structure. A sustained move above $1.27389 could open the door to higher resistance levels.

Euro Declines as Factory Orders, Retail Sales Disappoint

The Euro faced pressure as mixed economic data raised concerns. German Factory Orders fell by 1.5%, better than the forecasted -2.0% but far below last month’s 7.2% surge.

French Industrial Production dipped by 0.1%, missing expectations of 0.2%, while Retail Sales across the Eurozone declined by 0.5%, underperforming the predicted -0.3%.

Meanwhile, German Industrial Production dropped 1.0%, countering a forecasted 1.0% gain. These figures underscore ongoing economic challenges, impacting sentiment around the Euro.

EUR/USD Technical Forecast

GBP/USD eases from multi-week high, trades with negative bias below mid-1.2700s

The GBP/USD pair oscillates in a range below mid-1.2700s during the Asian session on Friday and consolidates its recent gains registered over the past three days, to over a three-week high touched the previous day. Traders now seem reluctant to place aggressive bets and opt to wait for the release of the crucial US monthly employment details later today. 

The popularly known Nonfarm Payrolls (NFP) report will be looked upon for the interest rate outlook in the US and guide the Federal Reserve (Fed) policymakers on their next policy decision at the December meeting. This, in turn, will help determine the near-term trajectory for the US Dollar (USD) and provide some meaningful impetus to the GBP/USD pair. In the meantime, the recent decline in the US Treasury bond yields fails to assist the USD attract any meaningful buyers or recover from a multi-week low. Read more…

GBP/USD rallies on rate cut hopes, NFP Friday in the barrel

GBP/USD climbed on Tuesday, bolstered by Bank of England (BoE) Governor Andrew Bailey tipping his hand and revealing a path forward to further rate cuts in 2025. Broad-market investor sentiment remains on the high side, although a fresh round of key US Nonfarm Payrolls (NFM) jobs figures are looming just ahead on Friday.

BoE Governor Bailey noted earlier Thursday that he sees around four rate cuts in 2025, which briefly sent the Pound stumbling during the London market session, but GBP traders quickly recovered their footing and pushed Cable back into the high end for the day. The head of the UK central bank reiterated cautious talking points and reaffirmed a data-dependent stance, helping to keep market expectations on-balance that the BoE will leave rates unchanged on December 19. Read more…

Created on December 06, 2024

• The EUR/USD pair is one I always look at, as it can give you a bit of a “heads up” as to how the US dollar is moving.
• As a general rule, if you understand where the US dollar is going, you can often understand what happens with most major forex pairs.
• After all, major forex pairs have the “USD” as part of the equation.
• As the euro is the most widely traded currency against the greenback, it’s a good determinant of what could happen.

Technical Analysis

The technical analysis is fairly neutral at the moment, despite the fact that we have seen quite a bit of pushback near the 1.05 level. The 1.05 level is a large, round, psychologically significant figure, and therefore it will attract a lot of attention overall. With this, I think that we are just simply hanging around in trying to sort out where the market is going to go over the longer term. With this being the case, I think you will more likely than not have a lot of noise, as the Non-Farm Payroll announcement comes out on Friday, which will attract a lot of attention and also cause a certain amount of liquidity issues that will increase volatility.

If we were to break above the 1.06 level, then it opens up the possibility of a move to the 1.0750 level. A short-term pullback from here should see plenty of support near the 1.05 level, but if we were to break down below there, then it’s possible that the euro drops to 1.04, which is a small support level, which has been tested a couple of times. Anything below there become somewhat catastrophic for the euro, as traders will more likely than not end up running to the US dollar in multiple currencies, not just this one.

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Created on December 06, 2024

• The euro has rallied a little bit during the early hours on Thursday as we continue to see a lot of choppy behavior with the euro against the pound.
• The 0.8250 level is an area that has been rather significant support and ultimately, I think this area is something that you need to pay close attention to.
• Not only is it important right now, but it’s been important multiple times going back all the way to 2016.

We are on the precipice of perhaps falling apart or perhaps bouncing significantly. We’ll just have to wait and see if we do drop down below the 0.8250 level and even the 0.82 level then we have a situation where the market would really start to tank for the euro, you’d probably see the euro tanking against the US dollar as well i do think that’s a real possibility here so because of that I’m not willing to throw a huge position on to the upside.

IF We Break Higher

That being said, if we could recapture the 0.8350 level, then we may get a grind higher. That I don’t think would be a quick move, but it is a possibility. I mean, it’s something that we’ve seen previously, but the euro just looks really threatened right now. And if we do break down below the 0.82 area, you could see the market drop all the way down to the 0.76 level before it’s all said and done.

Obviously, this would be a huge move and would take quite a bit of time to get there. Ultimately, if that were to happen, I would also anticipate that the Euro would be doing better against the US dollar, and it could be a longer-term “buy on the dips” trend that a lot of people would be following. I don’t anticipate this happening, but it is something that you need to keep in the back of your mind.

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Created on December 06, 2024

• The British pound has rallied a bit during the early hours on Thursday as we are slamming into the crucial 1.2750 level.
• This is an area that’s been both support and resistance multiple times in the past, and simultaneously we are seeing the 50-day EMA at least attempt to break down below the 200-day EMA, kicking off the so-called death cross.
• However, Friday features a non-farm payroll announcement and that could throw any move into disarray.

It does look like we are seeing a little bit of pushback as we have broken above 1.2750 only to drop back down towards it again. So, it’ll be interesting to see how this plays out. I do think we are at a major inflection point right now. So, I am watching this pair with great interest.

Greenback Strength Must Be Watched Closely

The US dollar itself has been very strong for some time and perhaps we’re seeing a little bit of profit taking ahead of the jobs report, but what will matter to me is where we close on Friday. I think that will tell the tale for a lot of things. And in that environment, we could have a little bit of a binary trade, not a binary options trade, a binary trade, meaning we are either buyers or sellers based upon a specific event.

If we break significantly above the 1.2750 level after non-farm payroll and hang on to it, perhaps you could just say if we close above there on Friday, then it might end up being a fairly significant buying opportunity. However, if we see this GBP/USD pair fall apart, then it’s very likely that we could go looking to the 1.25 level. I think Friday is pretty big for this one. In fact, this might be a situation where this controls what happens over the next several months, but we will have to wait and see if that ends up being the case.

The USD/JPY rebounded off its overnight lows, with the big rally in Bitcoin and DAX helping to reduce the yen’s haven appeal somewhat. But the pressure remains amid speculation that the Bank of Japan will hike interest rates at its upcoming policy decision on December 19, while dollar traders are looking forward to the release of US non-farm payrolls report on Friday, inflation data next week and the Fed’s own interest rate decision on December 18. So, the USD/JPY outlook is subject to change significantly in the next two weeks.

Yen loses some momentum after BoJ rate hike speculation

In the last few weeks, the yen has been gaining momentum against most major currencies, especially commodity dollars, the euro and to a lesser degree the US dollar. Investors have been piling into the yen amid speculation that the Bank of Japan could raise interest rates at its final 2024 meeting later this month.

But overnight, the BOJ’s Toyoaki Nakamura delivered dovish-leaning remarks, calling for policy tightening to proceed at a cautious pace. Toyoaki also expressed doubt about the sustainability of wage growth.

In as far as the US dollar is concerned, well until last week, the dollar had been on the ascendency amid the Trump trade, but the further big gains in risk assets like cryptos and stocks have helped to ease the pressure on some of the risk-sensitive currencies like the GBP and EUR, and this has helped to weigh on the dollar somewhat. This week’s weaker-than-expected ISM services PMI has also helped to put some downward pressure on the dollar.

Attention turns to US jobs report to shape near-term USD/JPY outlook

This week’s US economic indicators have been mixed. While the ISM manufacturing PMI at 48.4 beat expectations and showed an improvement from 46.5 the previous month, the ISMs services PMI was sharply below forecasts at 52.1 vs. 56.0 last. The JOLTS report was quite good at 7.74 million vs. 7.51 million eyed. Yet the latest weekly claims figures, released a few moments ago, was weaker, showing an unexpected rise to 224K vs. 213K eyed.

As the Federal Reserve zeroes in on employment trends, any signs of weakness in labour market reports might cement a December rate cut, currently priced with a 74% probability. 

Thus, all eyes will be on the November jobs report, due Friday. This will be the headline event, before the focus turns to next week’s CPI report and the Fed’s decision the following week. After last month’s unexpectedly strong figures and the political shift from Trump’s re-election, expectations for aggressive Fed cuts in 2025 have waned. Whether the Fed decides to cut rates in the initial months of the new year could hinge on the next few employment reports, putting the focus on the NFP data on Friday.

Here is a list of key data highlights from the US on Friday, showing what is expected and what the previous readings were:

Technical USD/JPY outlook

Source: TradingView.com

The USD/JPY remains stuck inside a rock and a hard place. Resistance is provided in the range between 151.20 to 152.00, where prior support and 200-day moving average meet. Support is provided around the 149.40 to 150.00 range (shaded blue on the chart). A clean move outside this range is now needed to potentially trigger follow-up buying or selling in that direction. Given the recent bearish price action, the risks are tilted modestly towards a downside breakdown.

— Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

EUR/USD rises despite French government collapse

• PM Barnier loses a vote of no-confidence, as expected
• Eurozone retail sales fall -0.5% MoM
• EUR/USD trades caught between 1.0450 and 1.06

EUR/USD is rising despite the collapse of the French government. French lawmakers passed a no-confidence vote against PM Michel Barnier on Wednesday evening, throwing the country into more political uncertainty and a deeper crisis.

However, both the euro and the French CAC managed to move higher because the collapse of the French government was already priced in. Furthermore, contagion outside of French markets is fairly limited. The risk premium on holding French debt over German debt has risen to its highest level since 2012.

On the data front, eurozone retail sales were weaker than expected, falling -0.5% MoM in October after falling -0.3% in September. The data comes after weak PMI data yesterday showed the eurozone composite PMI fell to a 10-month low.

The ECB is expected to cut interest rates by 25 basis points next week, and the markets are also pricing in around 157 basis points worth of easing by the end of next year, significantly more than the level of easing expected from the Federal Reserve.

The US dollar is trading slightly lower versus its major peers after Federal Reserve chair Jerome Powell’s speech yesterday, where he continued support for a slower pace of rate reductions ahead but did nothing to deter from expectations of a December cut.

Attention now turns to US initial jobless claims and comments from fed Barkin.

EUR/USD forecast- technical analysis

After recovering from a low of 1.0330 EUR/USD is consolidating between 1.06 and 1.0450. To extend the bearish trend that has been in place since the end of September, sellers will look to break below 1.0450 to test 1.04 and 1.0330.

Meanwhile, a rise above 1.06 creates a higher high and support the pair towards 1.07

USD/JPY falls with BoJ rate hike bets in focus & ahead of jobless claims data

• BoJ chatter & safe haven flows support the yen
• US eases after post-Powell gains; jobless claims are up next
• USD/JPY falls towards 150.00

USD/JPY resumed its downtrend after rising in the previous session. It is strengthening as traders assess whether the BoJ will hike interest rates again later this month. Known dove policy maker Nakamura said he wasn’t opposed to rate hikes, which has helped to strengthen the currency.

BoJ will announce its rate decision on December 19th, and expectations of a hike have been growing following recent comments from Ueda. However, media reports have raised questions over whether the hike will actually happen.

The yen is also benefiting from concerns surrounding South Korea, where the won continues to trade around a 2 year low following a short-lived martial law decree.

The U.S. dollar gained yesterday, but it’s inching lower against its major peers today after Federal Reserve Jerome Powell highlighted the strength of the U.S. economy and signaled support for slower rate reductions. However, a December rate cut is still expected, with the market pricing in a 74% chance of a 25 basis point reduction.

Attention is now on US jobless claims, which come ahead of Friday’s non-farm payroll report. Expectations are for 215k jobs added, up from 213k. Non-farm payrolls are expected to show 200,000 jobs were added in November up from just 12,000 in October.

USD/JPY forecast – technical analysis

After falling from a peak of 156.75, USD/JPY fell below the 200 SMA before finding support at the 100 SMA at 148.65. The recovery failed to rise above 150.8, the 0.5% Fib retracement of the 162 high and 139 low.

Sellers supported by the RSI below 50 will look to extend the bearish trend below 148.65 towards 148.15 the 38.2% level and towards 145.00.

Should buyers retake 150.80 a move towards 153.85 and 157.10 could be on the cards.

EUR/USD rises despite French government collapse

• PM Barnier loses a vote of no-confidence, as expected
• Eurozone retail sales fall -0.5% MoM
• EUR/USD trades caught between 1.0450 and 1.06

EUR/USD is rising despite the collapse of the French government. French lawmakers passed a no-confidence vote against PM Michel Barnier on Wednesday evening, throwing the country into more political uncertainty and a deeper crisis.

However, both the euro and the French CAC managed to move higher because the collapse of the French government was already priced in. Furthermore, contagion outside of French markets is fairly limited. The risk premium on holding French debt over German debt has risen to its highest level since 2012.

On the data front, eurozone retail sales were weaker than expected, falling -0.5% MoM in October after falling -0.3% in September. The data comes after weak PMI data yesterday showed the eurozone composite PMI fell to a 10-month low.

The ECB is expected to cut interest rates by 25 basis points next week, and the markets are also pricing in around 157 basis points worth of easing by the end of next year, significantly more than the level of easing expected from the Federal Reserve.

The US dollar is trading slightly lower versus its major peers after Federal Reserve chair Jerome Powell’s speech yesterday, where he continued support for a slower pace of rate reductions ahead but did nothing to deter from expectations of a December cut.

Attention now turns to US initial jobless claims and comments from fed Barkin.

EUR/USD forecast- technical analysis

After recovering from a low of 1.0330 EUR/USD is consolidating between 1.06 and 1.0450. To extend the bearish trend that has been in place since the end of September, sellers will look to break below 1.0450 to test 1.04 and 1.0330.

Meanwhile, a rise above 1.06 creates a higher high and support the pair towards 1.07

USD/JPY falls with BoJ rate hike bets in focus & ahead of jobless claims data

• BoJ chatter & safe haven flows support the yen
• US eases after post-Powell gains; jobless claims are up next
• USD/JPY falls towards 150.00

USD/JPY resumed its downtrend after rising in the previous session. It is strengthening as traders assess whether the BoJ will hike interest rates again later this month. Known dove policy maker Nakamura said he wasn’t opposed to rate hikes, which has helped to strengthen the currency.

BoJ will announce its rate decision on December 19th, and expectations of a hike have been growing following recent comments from Ueda. However, media reports have raised questions over whether the hike will actually happen.

The yen is also benefiting from concerns surrounding South Korea, where the won continues to trade around a 2 year low following a short-lived martial law decree.

The U.S. dollar gained yesterday, but it’s inching lower against its major peers today after Federal Reserve Jerome Powell highlighted the strength of the U.S. economy and signaled support for slower rate reductions. However, a December rate cut is still expected, with the market pricing in a 74% chance of a 25 basis point reduction.

Attention is now on US jobless claims, which come ahead of Friday’s non-farm payroll report. Expectations are for 215k jobs added, up from 213k. Non-farm payrolls are expected to show 200,000 jobs were added in November up from just 12,000 in October.

USD/JPY forecast – technical analysis

After falling from a peak of 156.75, USD/JPY fell below the 200 SMA before finding support at the 100 SMA at 148.65. The recovery failed to rise above 150.8, the 0.5% Fib retracement of the 162 high and 139 low.

Sellers supported by the RSI below 50 will look to extend the bearish trend below 148.65 towards 148.15 the 38.2% level and towards 145.00.

Should buyers retake 150.80 a move towards 153.85 and 157.10 could be on the cards.