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Forecast for major world currencies for first decade of 2026

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December 16 show that since mid-November, the aggregate position for the US dollar against major world currencies has been steadily worsening. This reflects the market's reevaluation of the outlook for both the Fed's rate movements and the US economy as a whole. There's no reason to believe this trend will change in the near future; all the negative factors that have pressured the dollar in recent weeks continue to exert their influence.

The Fed's interest rate forecast implies two cuts next year—in April and July. What happens afterward remains a mystery, and even these two reductions are not guaranteed. Everything is changing rapidly; recall the forecasts for the last meeting when, at the beginning of November, the markets were convinced that the Fed would maintain the rate, but by the end of November, that opinion had completely reversed.

There are too many factors increasing uncertainty. The state of the US labor market points to a decline in economic activity, while GDP growth for Q3, on the contrary, appears quite positive. ISM reports tend to show deterioration, yet the stock market remains near historical highs, primarily supported by hopes of growth in the technology sector. However, if doubts arise about AI prospects, the market could simply crash. A similar scenario unfolded in the early 2000s when technology sector companies were rapidly growing.

The US dollar appears stable, and its status as the world's primary currency remains unchallenged, but the record growth in gold (as well as silver and platinum) indicates that the financial system is experiencing a severe crisis of trust, while the dynamics of oil, copper, and aluminum—i.e., the commodities forming the basis of the real economy—look far worse.

The Fed's independence is at risk, and many changes could occur in the coming weeks, especially regarding the Fed's composition favoring rate-cutting policies. Trump intends to go all the way here, but inflation has yet to feel the pressure from new tariffs, and the situation could change at any moment.

President Trump himself adheres to a weak dollar policy, having repeatedly stated his preference for lowering the exchange rates of the yen and yuan, which he believes could improve the US trade balance.

Here's a brief forecast for the dynamics of major currencies in the first weeks of 2026:

EUR/USD

The ECB has concluded its rate-cutting cycle, and the latest meeting has revised GDP and core inflation forecasts upward. This general monetary policy approach suggests a resilient euro, which acts as a bullish factor for the euro in light of the Fed's rate forecasts.

Positioning remains bullish; in the second half of November, a trend towards increasing long speculative positions in euros emerged, and the latest CFTC reports indicate that this trend is strengthening.

The probability of a pullback to the support zone of 1.1690/1730 remains, but such a pullback can only have technical reasons as there are no fundamental grounds for a deep decline in EUR/USD. We expect movement towards 1.1919; additional adjustments could come from the publication of new data, with significant upcoming events including the ISM report in the US manufacturing sector on January 5, the Eurozone PMI on January 6, and Eurozone inflation and ISM in the services sector on January 7. Before the publication of this data, we anticipate low trading activity with a slow upward trend.

GBP/USD

The pound appears somewhat weaker than the euro, but its dynamics are likely to be similar. Although the Bank of England cut rates at the last meeting, the vote for a cut was minimal, and now markets expect only one reduction next year, which will keep the rate at a relatively high level of 3.5%. The primary factor here is the threat of persistently high inflation in the UK, which will remain above US levels for a long time, clearly restraining the Bank of England and providing support for the pound.

The short speculative position in the pound has been actively reducing in recent weeks, and we expect this trend to continue. The pound will seek resistance at 1.3620/40; rising would increase the likelihood of a technical correction, but it is unlikely to be deep, as support at 1.3370/90 appears robust. The first week of the new year will have little significant statistics for the pound, so the overall trading dynamic will largely be influenced by news from the US.

NZD/USD

New Zealand's economy has gone through a serious test, facing high inflation alongside negative GDP dynamics. The third quarter proved positive, and growth is also expected in the fourth quarter, with the RBNZ's policy looking quite predictable.

In November, the RBNZ cut rates to 2.25%, but inflation dynamics in recent months clearly favor a return to growth. As the economy recovers at the current rate, further cuts are unlikely, and furthermore, the RBNZ is expected to start raising rates in the second half of the upcoming year, making three increases by May 2027. Accordingly, the policies of the Fed and RBNZ will be oppositely directed, with the kiwi gaining an advantage due to changes in yield spreads.

Positioning for the kiwi remains bearish, and currently, there are almost no signs of a reversal. However, there are good grounds to assume that the next couple of CFTC reports will favor increased demand for NZD.

The NZD/USD pair has strengthened significantly since November 20, and we expect this growth to continue. A technical correction seems unlikely, and support at 0.5731 is unlikely to be reached, while an attempt to reach the technical level of 0.5910 appears more realistic. The next news from New Zealand that could support the kiwi is expected only on January 12 (the NZIER report for Q4, which may adjust GDP forecasts) and the inflation index for Q4 on January 20. If it shows sustained inflation levels, the kiwi may receive an additional bullish impulse. For now, we assume that trading in the first week of the year will be inactive with a slight upward shift.

AUD/USD

Unlike other major currencies, the Aussie may start the year quite actively. On January 1, the PMI report for the manufacturing sector will be published, followed on January 6 by the PMI report for the services sector and on January 7 by the monthly report on consumer inflation for November. Given that inflation has already risen from a low of 1.9% in June to 3.8% in October, the new report will be very significant for the further dynamics of the Aussie, as it will influence forecasts for the RBA's rates. The market currently assumes that the rate-cutting cycle has ended, and if November's inflation shows at least stability, the market will likely anticipate an earlier start to the rate-hiking cycle, which will automatically support the Australian dollar.

The last two CFTC reports showed a sharp increase in demand for AUD, with the calculated price rapidly rising, which is a clear sign of increasing bullish momentum.

The AUD/USD pair has reached a high not seen since October 2024, increasing the likelihood of a technical correction. We expect a decline below support at 0.6670/80 to be unlikely and to occur only if large players take profits ahead of the new year. In any case, a correction is not expected to be prolonged, as fundamental factors favor continued growth.

USD/CAD

Forecasts for the Bank of Canada's rate are currently unstable. The Bank views the current rate of 2.25% as close to neutral, but additional confirmations are needed for this opinion to solidify. The market remains cautious regarding the assumption that the Bank of Canada has ended its rate-cutting cycle, as it awaits the labor market report for December (due on January 9) and the inflation report (January 19). Currently, the Canadian dollar appears more convincing than its larger counterpart, but the situation is complicated by the fact that the Canadian economy depends more on the U.S. situation, given the deep mutual integration.

The calculated price suggests further declines in USD/CAD; the last two CFTC reports indicated increased demand for CAD, but additional confirmation is needed.

The rapid decline of USD/CAD in recent weeks raises the likelihood of a technical correction. We believe that the pair will not rise above 0.3800/20. For further declines, there are no particular reasons at present; new data are required. However, in the long term, we believe that an attempt to reach support at 0.3536 is more likely than a reversal upward.

USD/JPY

The yen remains the most enigmatic currency. Markets reacted with strengthening yen after the Bank of Japan, after months of deliberation, raised rates, but the movement quickly halted. The cause of this was a new wave of uncertainty following the release of inflation data from the Tokyo region, which showed a sharp slowdown in price growth from 2.7% y/y to 2.0%, with the core index excluding food slowing from 2.8% to 2.3%.

If this trend is confirmed at the national level, talks of another rate hike could be forgotten for a long time. The Bank of Japan will take time to analyze economic growth indicators, wait for the results of wage negotiations between unions and the government, and comment on the state of affairs in vague terms. Since the inflation report will not be published until January 22, there is unlikely to be a clear factor that could give the yen momentum before then.

The strong bullish bias for the yen has been completely eliminated, and speculative positioning is currently neutral. We see no reason to expect strong movements in either direction, as fundamental factors do not present a clear picture. From a technical perspective, a decline seems more likely, especially given the growing dissatisfaction from the US regarding a too-weak yen, but Japan cannot afford a stronger yen amid rising government debt interest payments and a clear economic crisis; thus, we have to refrain from providing a forecast for the yen for now.

The material has been provided by InstaForex Company - www.instaforex.com.

US Market News Digest for December 29

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Buy-and-hold strategy proves effective in 2025

The buy-and-hold strategy has once again demonstrated its viability in an unstable market. Despite trade tariffs, geopolitical risks, and investor doubts regarding the prospects of artificial intelligence, the S&P 500 index has increased by approximately 18% since the beginning of the year. This indicates that passive investors who maintained their positions achieved solid results without engaging in active trading.

Current trends confirm that holding stocks for the long term, particularly those purchased at the beginning of the year, remains an effective approach even amidst market turmoil. This scenario is especially appealing for investors focused on stability and minimizing emotional decision-making. Follow the link for more details.

US market recovers despite tariff risks and pessimism

Despite concerns surrounding the introduction of new tariffs and a slowdown in global trade, the US stock market has shown resilience. Since the April lows, the S&P 500 index has risen by approximately 43%, signaling a resurgence of investor interest and confirming the market's high liquidity.

The rise in prices demonstrates that even in the face of increased uncertainty, American stocks continue to attract capital. Investors have begun to ramp up their positions again, viewing corrections as opportunities for entry rather than reasons to exit the market. Current movements in the stock market present opportunities for trading stocks and indices, particularly through solutions offered by InstaForex. Follow the link for more details.

2026 forecasts indicate continued market growth

Experts anticipate that the US economy will grow by about 2% in 2026, potentially creating conditions for further increases in corporate profits. This scenario could support the continuation of the stock market rally, including the S&P 500 index.

Analysts believe that a more accommodative monetary policy from the Federal Reserve could serve as an additional supportive factor. Easing financial conditions typically favor stock assets and enhance investors' appetite for risk. Follow the link for more details.

Technical outlook confirms bullish momentum for S&P 500

From a technical analysis perspective, the S&P 500 index maintains a strong upward trend. Prices continue to move above key support levels, indicating the dominance of buyers in the market.

Analysts recommend focusing on buying towards the 7,000 and 7,100 levels. This market structure confirms the persistence of bullish momentum and potential for further growth. As a reminder, InstaForex offers opportunities for trading stocks, stock indices, and derivative instruments in a changing market environment. Follow the link for more details.

The material has been provided by InstaForex Company - www.instaforex.com.

Dollar throws boomerang

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The euro closes the year on a high note, like a leading runner already looking ahead to the next lap. In 2026, the regional currency will enjoy dual support from both revised upward expectations for eurozone economic growth and the narrowing of the interest rate gap between Europe and the US. According to a Financial Times survey, eurozone GDP is projected to grow by 1.2% in 2026 and 1.4% in 2027. For 2025, the consensus is 1.4%, significantly higher than the 0.9% that the market anticipated at the end of 2024. The acceleration in growth has become a long-awaited wind in the sails and one of the drivers behind the 13.5% rally in EUR/USD this year.

The second argument involves interest rates. The same FT experts expect the ECB's deposit rate to remain at 2% through the end of 2026 and rise to 2.25% in 2027. For the Fed, derivatives are pricing in two rate cuts next year. If the interest rate and yield differential between the US and Germany continues to narrow, the euro may maintain its upward momentum: as the elevation gap decreases, the ascent becomes easier, even if the road is still uphill.

Dynamics of EUR/USD and bond yield spreads

However, risks have not disappeared. Markets tend to interpret pressure from the White House on the Fed as a "bullish" factor for EUR/USD. Yet a bet on a "dovish" FOMC could backfire like a boomerang: attempts to accelerate easing may lead to rising Treasury yields.

The Federal Reserve controls the short end of the yield curve, but expectations of its actions shape bond yields—and thus the cost of servicing government debt. This is why the yield on 10-year securities is so critical in the Treasury's agenda: Scott Besant, upon taking office, discussed the goal of bringing it down to 3% as part of the "3-3-3" strategy. The other two "threes" pertained to oil and US economic growth.

The paradox is that discussions about overly aggressive rate cuts amid a strong economy could push yields not down, but up. Investors may start pricing in the risk of a repeat of the 1970s inflation saga, when, under political pressure, Fed Chairman Arthur Burns accelerated easing, which led to a spike in prices and subsequently a double recession.

The Treasury curve is the nervous system of the market: movements in it affect both the S&P 500 and the dollar. Rising yields increase the cost of capital for companies, compress margins, and can provoke a pullback in stocks—as if the business had its "oxygen price" raised. For the dollar, the effect is the opposite: higher yields enhance the attractiveness of American assets, prompting capital inflows into the US and supporting the USD index. Notably, during Christmas week, the dollar index posted its worst performance since June amid declining bond yields.

Technical analysis

Technically, the daily chart of EUR/USD shows a test of key support at the pivot level of 1.176. If the bears succeed in this endeavor, it will pave the way for short-term sales of the euro against the US dollar. Conversely, a rebound would provide grounds to increase previously established long positions.

The material has been provided by InstaForex Company - www.instaforex.com.

Gold benefits from competition

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Gold has struggled to stay above the record highs of $4,500 per ounce and has taken a step back due to the strengthening of the US dollar against major global currencies. Some investors chose to realize profits after an impressive increase of more than 70% in XAU/USD since the beginning of the year. This marks the second-best performance for the precious metal in history, the first being recorded in 1979 during a massive energy crisis and the accompanying inflation surge.

This time, supportive factors for gold include the easing of monetary policy by the Fed, geopolitical tensions, and central banks' diversification of reserves. The Federal Reserve cut the federal funds rate three times in 2025 and plans to do so a couple more times in 2026, as indicated by the futures market. The extensive monetary stimulus has weakened the dollar and put pressure on US Treasury yields. In such an environment, the precious metal feels right at home.

Dynamics of gold's share in reserves

An important driver supporting the bullish trend for XAU/USD has been the insatiable appetite of central banks. According to estimates from Goldman Sachs, they will purchase 70 tons of bullion monthly. This figure is close to the average of 66 tons over the past year and four times the amount purchased before 2022. Regulators from emerging markets are expected to continue showing particular activity. The fact that the share of gold in China's reserves is significantly lower than in the US or other developing countries encourages Beijing to increase demand.

Goldman Sachs believes that the combination of strong economic growth in the United States and the easing of the Fed's monetary policy creates favorable conditions for all commodity market assets. The precious metal will continue to benefit from heightened competition between central banks and specialized exchange-traded funds (ETFs). The firm estimates the share of ETFs in American investors' portfolios to be a modest 0.17%. An increase by 1 basis point is equivalent to a rise in XAU/USD by 1.4%.

Dynamics of gold stocks in central banks and ETFs

The intensifying competition between central banks and specialized ETFs for bullion risks is pushing gold prices above Goldman Sachs's previously announced forecast of $4,900 per ounce by the end of 2026.

Another advantage of the precious metal is geopolitics. Despite progress in negotiations between Washington and Kyiv, peace in Ukraine is still far off. The US blocking of tankers in Venezuela, along with American strikes in Syria and Nigeria, supports demand for gold as a safe-haven asset and maintains the upward trend for XAU/USD.

Technical analysis

Technically, the daily chart of gold shows a retreat from record highs. The pivot support level is around $4,447 per ounce. A confident breakout below this level would increase the risks of a pullback and provide grounds for short positions. Conversely, a rebound would be an opportunity to amplify previously opened long positions.

The material has been provided by InstaForex Company - www.instaforex.com.

Forex forecast 29/12/2025: EUR/USD, USD/JPY, GBP/USD, SP500, Oil, Gold and Bitcoin

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We introduce you to the daily updated section of Forex analytics where you will find reviews from forex experts, up-to-date monitoring of financial information as well as online forecasts of exchange rates of the US dollar, euro, ruble, bitcoin, and other currencies for today, tomorrow and this trading week.

Useful links:

My other articles are available in this section

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Important:

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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The material has been provided by InstaForex Company - www.instaforex.com.

Weekly Forecast Based on Simplified Wave Analysis for GBP/USD, AUD/USD, USD/CHF, EUR/JPY, EUR/GBP, and EUR/CHF — December

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GBP/USD

Brief Analysis:

The unfinished upward wave model on the chart of the British pound major pair dates back to the beginning of the current year. Since early November, after a correction formed from a strong support zone, prices have begun forming the start of the final part (C). Its structure does not yet appear complete at the time of analysis. Price is located near the upper boundary of a strong potential reversal zone.

Weekly Forecast:

During the coming week, completion of the sideways movement vector of the pound is expected. Pressure on the upper resistance boundary is possible. By the end of the week, a reversal formation and the beginning of a price decline can be expected, within an overall flat market environment. An increase in volatility is likely already next year.

Potential Reversal Zones

Resistance:

• 1.3510 / 1.3560

Support:

• 1.3350 / 1.3300

Recommendations:

• Buying: Limited potential; carry a high level of risk.
• Selling: Will become relevant after confirmed reversal signals appear near the resistance zone on your trading systems (TS).

AUD/USD

Brief Analysis:

On the chart of the Australian dollar major pair, the primary direction since April has been set by an uptrend. The latest unfinished segment began on November 21. From this point, the structure is forming the beginning of the final part (C). Price has reached the lower boundary of a potential reversal zone. No clear signs of an imminent reversal are yet observed on the chart.

Weekly Forecast:

In the first days of the coming week, continuation of the overall upward movement is expected. After contact with the calculated resistance zone, a change in direction and the beginning of a price decline toward the support boundaries can be anticipated.

Potential Reversal Zones

Resistance:

• 0.6730 / 0.6780

Support:

• 0.6640 / 0.6590

Recommendations:

• Buying: Possible with a small position size during individual sessions; risky.
• Selling: After confirmed reversal signals appear near resistance, they may be used in trading.

USD/CHF

Brief Analysis:

Since August, price movement on the Swiss franc chart has been governed by an upward extended flat algorithm. Within the wave structure, represented by a shifted/extended flat, the middle part (B) is nearing completion. Quotes are moving along the upper boundary of a wide potential reversal zone on the daily timeframe.

Weekly Forecast:

At the beginning of the current week, an overall flat movement vector is expected, with price moving along the calculated support. An increase in volatility, a reversal, and a change in direction can be expected toward the end of the week.

Potential Reversal Zones

Resistance:

• 0.8080 / 0.9080

Support:

• 0.7860 / 0.7810

Recommendations:

• Selling: There are no suitable market conditions for such trades.
• Buying: May be used in trading after confirmed reversal signals appear.

EUR/JPY

Brief Analysis:

The current wave structure of the EUR/JPY pair is upward, originating from late February. Over the past two months, a shifted flat has been forming covertly within it, which remains unfinished at the time of analysis. Over the last ten days, price has been within a potential reversal zone on the H1 timeframe.

Weekly Forecast:

In the coming days, continuation of the overall flat movement sentiment with an upward vector is expected. Near the calculated resistance, there is a high probability of a transition into sideways drift, forming conditions for a reversal. The beginning of a price decline is likely already next year.

Potential Reversal Zones

Resistance:

• 185.00 / 185.50

Support:

• 182.10 / 181.60

Recommendations:

• Buying: Risky, with limited potential.
• Selling: After appropriate confirmed signals from your trading systems appear near resistance, they may be used for trading this pair.

EUR/GBP

Brief Analysis:

In the EUR/GBP pair structure, the direction of short-term trends is set by the algorithm of a downward wave originating on April 11. Within the larger wave structure, this segment forms a counter corrective extended flat. The structure of this wave lacks its final part. No signs of an imminent trend change are observed on the chart.

Weekly Forecast:

In the first days of the coming week, completion of the upward movement vector is expected. Near the calculated resistance, conditions for a reversal are likely to form. A change in direction and a resumption of the downward movement can be expected already next year.

Potential Reversal Zones

Resistance:

• 0.8800 / 0.8850

Support:

• 0.8640 / 0.8590

Recommendations:

• Buying: Possible with a reduced position size within intraday trading.
• Selling: May be used after appropriate reversal signals appear near resistance on your trading systems (TS).

EUR/CHF

Brief Analysis:

On the EUR/CHF pair chart, the primary long-term direction in recent years has been defined by a bearish trend. The unfinished wave structure from November 14 is directed upward. Since December 8, the middle part (B) has been forming and remains unfinished. Quotes are located near the upper edge of a potential reversal zone on a higher timeframe.

Weekly Forecast:

In the coming days, growth of the pair and an attempt to pressure the support zone can be expected. A short-term break below its lower boundary cannot be ruled out. After that, formation of a reversal and the beginning of an upward movement can be anticipated, with the target at the calculated resistance.

Potential Reversal Zones

Resistance:

• 0.9400 / 0.9450

Support:

• 0.9270 / 0.9220

Recommendations:

• Selling: Have no potential and may lead to losses.
• Buying: May be used after appropriate confirmed reversal signals appear on your trading systems (TS).

Explanations:

In simplified wave analysis (SWA), all waves consist of three parts (A–B–C). On each timeframe, the latest unfinished wave is analyzed. Expected movements are shown with dashed lines.

Attention:

The wave algorithm does not take into account the duration of price movements over time.

The material has been provided by InstaForex Company - www.instaforex.com.

Weekly Forecast Based on Simplified Wave Analysis for EUR/USD, USD/JPY, GBP/JPY, USD/CAD, NZD/USD, and Gold — December 29th

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EUR/USD

Analysis:

When analyzing the euro market, the focus remains on the upward wave that began on August 26 of this year. From a strong potential reversal zone over the past month, prices have been forming a corrective extended flat. The correction structure lacks its final part (C), while the middle part (B) is nearing completion. Price is moving along the upper boundary of a powerful potential reversal zone.

Forecast:

In the coming week, the euro is expected to maintain a generally sideways price pattern. After a probable attempt to pressure the resistance zone in the early days, a change in direction and a decline in the pair's price toward the calculated support boundaries can be expected.

Potential Reversal Zones

Resistance:

• 1.1800 / 1.1850

Support:

• 1.1700 / 1.1650

Recommendations:

• Buying: Limited potential.
• Selling: Will become relevant after confirmed signals from your trading system (TS) appear near the resistance zone.

USD/JPY

Analysis:

On the chart of the main Japanese yen pair, an upward wave has been forming since early August. Counter to the main trend, a hidden correction has been developing since early October in the form of an extended/shifted flat. The structure lacks its final part (C). The downward movement from December 22 has reversal potential.

Forecast:

In the coming days, the yen price is expected to continue moving within a sideways range. A pullback toward the resistance zone is possible, with short-term pressure on its upper boundary. After that, a reversal formation and the beginning of a downward price movement can be expected.

Potential Reversal Zones

Resistance:

• 157.50 / 158.00

Support:

• 154.50 / 154.00

Recommendations:

• Buying: Possible with reduced position size; potential is limited by resistance.
• Selling: May become possible during individual sessions after appropriate signals appear near the resistance zone.

GBP/JPY

Analysis:

On the chart of the GBP/JPY pair, the upward wave that began in April has not yet been completed. Within its structure, the final part of the wave (C) is nearing completion. The pair's price is approaching the lower boundary of a higher-timeframe reversal zone. No ready signals of a trend change are currently observed on the chart.

Forecast:

During the coming week, the completion of the sideways sentiment is expected, with a decline in price down to the support boundaries. After that, a change in direction and the start of an upward movement in the pair can be anticipated.

Potential Reversal Zones

Resistance:

• 212.00 / 212.50

Support:

• 208.90 / 208.40

Recommendations:

• Buying: Can be used with reduced position size during individual sessions from the calculated support. Potential is limited by resistance levels.
• Selling: Will become relevant only after appropriate reversal signals appear near the calculated resistance.

USD/CAD

Analysis:

The direction of price movements on the Canadian dollar major has been defined by a downward wave trend since February. The final part (C) is forming within its structure. During this phase, the price has reached the upper boundary of another potential reversal zone.

Forecast:

Throughout the current week, continuation of the general sideways movement of the pair is expected. A downward vector is likely over the next couple of days. Price declines can be expected toward the support boundaries. A reversal formation and the start of price growth can be expected already next year.

Potential Reversal Zones

Resistance:

• 1.3800 / 1.3850

Support:

• 1.3610 / 1.3560

Recommendations:

• Selling: Have limited potential; it is more reasonable to reduce position size.
• Buying: After appropriate signals from your trading system appear near the calculated support, they may be used for trading.

NZD/USD

Brief Analysis:

Quotes of the New Zealand dollar major pair continue to fluctuate within the upward wave zigzag that began in early April. Within the structure, price movements since November 21 form the final part (C). Structural analysis indicates that the completion of its first part (A) is approaching.

Weekly Forecast:

In the early days of the coming week, continuation of the bearish movement is expected, up to its full completion near the calculated support. After that, a flat and short-term sideways movement is possible. Toward the end of the week, price growth can be expected, but not above resistance levels.

Potential Reversal Zones

Resistance:

• 0.5920 / 0.5970

Support:

• 0.5800 / 0.5750

Recommendations:

• Selling: Possible during individual sessions with reduced position size.
• Buying: Will become possible after confirmed reversal signals appear near the support area.

Gold

Analysis:

Gold price movements follow the algorithm of the dominant long-term uptrend of recent years. Since late October, prices have been pulling back, forming a correction of the last trend leg. Structural analysis indicates the formation of an extended/shifted flat. The middle part (B) is approaching the final phase of its development.

Forecast:

In the first days of the coming week, there is a high probability of continued sideways movement in gold. An upward vector is possible, with pressure on the resistance zone. After that, renewed activity, a change in direction, and another decline down to the support zone boundaries can be expected.

Potential Reversal Zones

Resistance:

• 4520.0 / 4540.0

Support:

• 4420.0 / 4400.0

Recommendations:

• Buying: Due to limited potential, they carry a high level of risk.
• Selling: After reversal signals appear near resistance on your trading system, they may be used for trading.

Explanations:

In simplified wave analysis (SWA), all waves consist of three parts (A–B–C). On each timeframe, the latest unfinished wave is analyzed. Expected movements are shown with dashed lines.

Attention:

The wave algorithm does not take into account the duration of instrument movements over time.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD Forecast on December 29, 2025

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On Friday, the EUR/USD pair made another rebound from the resistance level of 1.1795–1.1802, the fourth in a row. Thus, during the holiday period, the bulls did not have enough strength to break through this zone. A reversal in favor of the U.S. currency took place, and a decline toward the Fibonacci level of 38.2% at 1.1718 began. A consolidation of prices above the 1.1795–1.1802 level would favor the European currency and increase the likelihood of continued growth toward the next corrective level of 0.0% at 1.1919.

The wave picture on the hourly chart remains simple. The most recently completed upward wave broke the peak of the previous wave, while the most recent downward wave did not break the previous low. Thus, the trend officially remains "bullish." It would be hard to call it strong, but in recent weeks the bulls regained confidence, and then the holidays began. Easing of the Fed's monetary policy will put pressure on the dollar in 2026, and the ECB will not create any problems for the euro.

On Friday, the news background in the U.S. and the European Union was absent, and both the entire past week and the current week are more holiday-oriented than working ones. The only reports released during the past week were U.S. GDP, durable goods orders, and industrial production. In my view, the most important report was and remains GDP, as it reflects growth in the entire U.S. economy. However, traders reacted coolly to this report, despite growth of 4.3% against much more pessimistic forecasts. This report did not provide significant support to the dollar, and rightly so, because throughout December the U.S. released economic data that were painful to look at. "Dovish" sentiment in the market continues to grow; traders believe that in 2026 the Fed will cut interest rates far more than once, contrary to what Jerome Powell has been assuring. The U.S. economy is growing, but many other indicators are showing negative dynamics. The labor market remains the biggest concern. Unemployment is rising, and inflation opens the door for the FOMC to further ease monetary policy. In such a situation, even a GDP report will not help.

On the 4-hour chart, the pair has reversed in favor of the European currency and resumed growth toward the corrective level of 0.0% at 1.1829. A rebound from this level would favor the U.S. dollar and lead to some decline toward the support level of 1.1649–1.1680. A consolidation above 1.1829 would increase the likelihood of further euro growth. No emerging divergences are observed on any indicators today.

Commitments of Traders (COT) Report:

During the latest reporting week, professional traders opened 8,884 long positions and 2,769 short positions. Sentiment among the "Non-commercial" group remains bullish thanks to Donald Trump and his policies, and continues to strengthen over time. The total number of long positions held by speculators now stands at 277 thousand, while short positions amount to 132 thousand. This represents more than a twofold advantage for the bulls.

For thirty-three consecutive weeks, large players were reducing short positions and increasing long ones. Then the "shutdown" began, and now we see the same picture again: bulls continue to add long positions. Donald Trump's policies remain the most significant factor for traders, as they cause numerous problems that will have long-term and structural consequences for the United States, such as the deterioration of the labor market. Traders fear a loss of the Fed's independence in 2026 under pressure from Trump and amid Jerome Powell's resignation in May.

News Calendar for the U.S. and the Eurozone:

On December 29, the economic calendar contains no scheduled events. The influence of the news background on market sentiment on Monday will be absent.

EUR/USD Forecast and Trading Advice:

Selling the pair was possible on a rebound from the 1.1795–1.1802 level on the hourly chart, with a target of 1.1718. These trades can be kept open today. Buy trades can be opened upon a close above the 1.1795–1.1802 level, with a target of 1.1919.

Fibonacci grids are drawn from 1.1392–1.1919 on the hourly chart and from 1.1066–1.1829 on the 4-hour chart.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD Forecast on December 29, 2025

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On the hourly chart, the GBP/USD pair on Friday continued its sideways movement between the Fibonacci level of 100.0% at 1.3470 and the resistance level of 1.3533–1.3539. A rebound from either of these levels will generate a trading signal in the opposite direction. A consolidation of prices below 1.3470 will increase the likelihood of a continued decline. A close above the 1.3533–1.3539 level will allow the bulls to launch a new attack.

The wave structure has once again transformed into a "bullish" one after the completion of the sideways phase. The most recently completed downward wave failed to break the previous low, while the new upward wave managed to exceed the previous peak. The news background for the British pound has been weak in recent weeks, but the information backdrop in the United States also leaves much to be desired. Bulls and bears were engaged in a tug-of-war throughout the week and remained in relative balance, but in the week leading up to the New Year, the bulls moved on the offensive.

There was no news background on Friday, but December news from the United States allowed bullish traders to move into a new offensive. In honor of the holidays, their enthusiasm and activity have faded somewhat, but after the New Year the offensive may resume. At this time, it is already appropriate to talk about the coming year, since during the current week there will be more holidays than working days. Of course, the market will be open on December 31, but who will be opening trades on New Year's Day? Thus, I believe that the sideways movement will persist until the end of the year, but if trading signals appear, traders may well act on them. The news background will be absent not only today but throughout the entire current week. Only technical (chart) analysis can help traders make trading decisions.

On the 4-hour chart, the pair has consolidated above the 100.0% corrective level at 1.3435, which allows for expectations of continued growth toward the next Fibonacci level of 127.2% at 1.3795. A "bearish" divergence has formed on the CCI indicator, which may trigger a reversal in favor of the U.S. dollar and a return to the support level of 1.3369–1.3435. A rebound from the 1.3435 level would increase the chances of continued growth for the British pound.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" trader category became more "bullish" over the latest reporting week. The number of long positions held by speculators increased by 1,649, while the number of short positions decreased by 25,368. The gap between the number of long and short positions currently stands at approximately 61 thousand versus 110 thousand. As we can see, bears dominate in December, but the British pound appears to have already exhausted its downside potential. At the same time, the situation with euro currency contracts is exactly the opposite. I still do not believe in a "bearish" trend for the pound.

In my view, the British pound still looks less "dangerous" than the dollar. In the short term, the U.S. currency may enjoy occasional demand in the market, but not in the long term. Donald Trump's policies have led to a sharp decline in the labor market, and the Federal Reserve has been forced to ease monetary policy to halt rising unemployment and stimulate job creation. For 2026, the FOMC does not plan strong monetary easing, but at present no one can be sure that the Fed's stance will not shift to a more "dovish" one during the year.

News Calendar for the U.S. and the U.K.:

On December 29, the economic calendar contains no scheduled events. The influence of the news background on market sentiment on Monday will be absent.

GBP/USD Forecast and Trading Advice:

Selling the pair was possible on a rebound from the 1.3533–1.3539 zone on the hourly chart, with a target of 1.3470. Short positions can be kept open. If the 1.3470 level is broken, short trades can be held with targets at 1.3437 and 1.3362. I can recommend buying on a rebound from the 1.3437–1.3470 level with a target of 1.3533–1.3539.

Fibonacci grids are drawn from 1.3470–1.3010 on the hourly chart and from 1.3431–1.2104 on the 4-hour chart.

The material has been provided by InstaForex Company - www.instaforex.com.

Buy-and-hold strategy pays off as S&P 500 rallies

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Sometimes, doing nothing is better than doing something. The "buy and hold" strategy often yields better results than constantly revising an investment portfolio. This is evidenced by the outgoing year. Despite all the upheavals, holding stocks purchased at the start of January turned out to be an effective strategy. If foreign company stocks had been acquired, the returns would have been even higher. Overall, the S&P 500's 18% rise is a considerable success for passive investors.

Dynamics of Stock Indices

Major upheavals in 2025 included the White House tariffs, the resulting loss of confidence in American assets, and finally, doubts about artificial intelligence technologies. Import tariffs proved to be more extensive and damaging to the stock market than previously anticipated. The S&P 500 saw a significant drop in April. However, once the "TACO" strategy (Trump Always Chooses Out) was fully operational, bulls became unstoppable.

Indeed, the understanding that higher tariffs would no longer be imposed allowed investors to buy up almost every dip in the S&P 500. Pessimists believed that the highest import tariffs since the 1930s would undermine confidence in American assets and facilitate capital outflows from the US stock market. This did not happen. The US market remains the largest and most liquid in the world. The return of non-residents has been more than successful. Since reaching the April low, the S&P 500 has increased by 43%.

In the fall, doubts surfaced regarding the effectiveness of investing in artificial intelligence technologies. Massive investments failed to generate the level of returns that traders had anticipated. Additionally, rumors of a pause in the monetary expansion cycle began to circulate, depriving the S&P 500 of its safety cushion.

Weekly S&P 500 Dynamics

The pullback was not as deep as expected. The market quickly recovered, stabilized, and set records as the year closed. Consequently, the last full week of December proved to be the best for the S&P 500 in almost a month.

Investors are optimistic about the future. Bloomberg experts expect US economic growth of 2% in 2026, which will support corporate profits and help the S&P 500 extend its rally. This aligns with expectations for the continuation of the Federal Reserve's monetary expansion cycle, with a 51% chance of an interest rate cut in March.

Moreover, the new Fed chair is likely to do everything possible to expedite the easing of monetary policy. Donald Trump has no need for another central bank head.

From a technical standpoint, the daily chart of the S&P 500 shows that the upward trend is gaining momentum. The broad market index is moving away from dynamic support levels in the form of moving averages, indicating the strength of bulls. It makes sense to maintain a focus on buying, targeting the levels of 7,000 and 7,100.

The material has been provided by InstaForex Company - www.instaforex.com.

Stock market on December 29: S&P 500 and NASDAQ remain near one-year highs

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Yesterday, stock indices suffered slight losses. The S&P 500 fell by 0.03%, while the Nasdaq 100 decreased by 0.04%. The Dow Jones Industrial Average lost 0.02%.

As the year comes to a close, global stock markets have maintained growth, bolstered by a record surge driven by advancements in artificial intelligence, which helped the markets recover from the April downturn caused by concerns over Donald Trump's tariff policies. The MSCI All Country World Index, one of the broadest indicators of the stock market, remained stable after a 1.4% increase last week, approaching a new peak. The Asia-Pacific stocks index increased by 0.3% for the seventh consecutive day, driven primarily by gains in technology and mining stocks. Futures on US stock indices declined slightly after the S&P 500 finished trading on Friday close to its peak.

Silver surged sharply, surpassing $80 per ounce for the first time, driven by a speculative surge and ongoing supply-demand imbalances. Gold decreased after reaching a new high, while copper jumped by more than 6%, hitting record levels on the London Metal Exchange. In recent months, precious metals have become one of the most sought-after segments of the financial markets, boosted by increased purchasing volumes from central banks, inflows into exchange-traded funds, and three consecutive rate cuts by the Federal Reserve. Lower borrowing costs favor commodities that do not yield interest, prompting traders to bet on further rate reductions in 2026.

"We are witnessing a generational bubble playing out in silver," stated IG Australia. "Relentless industrial demand from solar panels, EVs, AI data centers and electronics, pushing against depleting inventories, has driven physical premiums to extremes."

Last week, the escalation of the situation in Venezuela, where the US is blocking oil tankers, along with Washington's strikes against ISIS in Nigeria, further increased the appeal of these metals as safe-haven assets.

In other markets, oil prices rose amid prospects of improving demand from China in 2026. However, a fifth consecutive monthly decline is expected in December, marking the longest streak of losses in over two years. Bitcoin increased by approximately 3%, while the dollar remained stable.

Regarding the technical outlook for the S&P 500, the main task for buyers today will be to overcome the nearest resistance level of $6,930. Doing so will signal growth and open the opportunity for a breakout to a new level of $6,949. Additionally, maintaining control above $6,963 will strengthen buyer positions. In the event of a downward movement amid declining risk appetite, buyers must assert themselves around $6,914. A break below this level could quickly push the trading instrument back to $6,896 and pave the way down to $6,883.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading Recommendations for the Cryptocurrency Market on December 29

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Bitcoin has returned to the $90,000 region today, but continues to struggle to surpass it. Ethereum has also climbed back to the $3,000 mark. However, whether this bullish momentum can be sustained at the beginning of the week is a complex question.

The pre-New Year rally in global markets has buoyed American stocks and precious metals to new record highs, while the cryptocurrency market and Bitcoin have remained sidelined. According to data, last week, capital flows on Wall Street confirm investor caution: approximately $500 million was withdrawn from American Bitcoin ETFs, amounting to about $4.3 billion over the last two months, alongside a drop in the total cryptocurrency market capitalization of over $1.2 trillion.

The current situation may represent only a temporary correction following a strong rally. Investors might be reassessing their portfolios in light of the year's end, locking in profits on more speculative assets and reallocating funds into more reliable instruments. In any case, the dynamics of capital flows in the coming months will be a key indicator of the cryptocurrency market's future.

Regarding intraday strategy in the cryptocurrency market, I will continue to base my actions on any significant pullbacks in Bitcoin and Ethereum in anticipation of the ongoing development of the bullish market in the long term, which has not faded away.

As for short-term trading, the strategy and conditions are described below.

Bitcoin

Buy Scenario

• Scenario No. 1: I plan to buy Bitcoin today upon reaching an entry point around $90,200, targeting a move to $91,200. Near $91,200, I will exit my purchases and sell immediately on the bounce. Before buying on the breakout, ensure that the 50-day moving average is below the current price and the Awesome Oscillator is in the positive zone.
• Scenario No. 2: I can buy Bitcoin from the lower boundary at $89,700 if there is no market reaction upon its breakout, targeting levels at $90,200 and $91,200.

Sell Scenario

• Scenario No. 1: I will sell Bitcoin today upon reaching an entry point around $89,700, targeting a drop to $88,900. Near $88,900, I will exit my sales and buy immediately on the bounce. Before selling on the breakout, ensure that the 50-day moving average is above the current price and the Awesome Oscillator is in the negative zone.
• Scenario No. 2: I can sell Bitcoin from the upper boundary at $90,200 if there is no market reaction upon its breakout, targeting levels at $89,700 and $88,900.

Ethereum

Buy Scenario

• Scenario No. 1: I plan to buy Ethereum today upon reaching an entry point around $3,050, targeting a move to $3,092. Near $3,092, I will exit my purchases and sell immediately on the bounce. Before buying on the breakout, ensure that the 50-day moving average is below the current price and the Awesome Oscillator is in the positive zone.
• Scenario No. 2: I can buy Ethereum from the lower boundary at $3,022 if there is no market reaction upon its breakout, targeting levels at $3,050 and $3,092.

Sell Scenario

• Scenario No. 1: I will sell Ethereum today upon reaching an entry point around $3,022, targeting a drop to $2,980. Near $2,980, I will exit my sales and buy immediately on the bounce. Before selling on the breakout, ensure that the 50-day moving average is above the current price and the Awesome Oscillator is in the negative zone.
• Scenario No. 2: I can sell Ethereum from the upper boundary at $3,050 if there is no market reaction upon its breakout, targeting levels at $3,022 and $2,980.

The material has been provided by InstaForex Company - www.instaforex.com.

USD/JPY: Simple Trading Tips for Beginner Traders on December 29. Analysis of Yesterday's Forex Transactions

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Analysis of Trades and Tips for Trading the Japanese Yen

The price test at 156.40 occurred at a moment when the MACD indicator was beginning to move up from the zero mark, confirming the correct entry point for buying dollars. As a result, the pair rose by more than 30 pips.

News about the decline in the Tokyo consumer price index and the sharp drop in Japan's industrial production continue to pressure the Japanese yen against the dollar. The overall increase in demand for the U.S. dollar across the currency market also led to a slight strengthening of the USD/JPY pair; however, further upward prospects for the trading instrument remain quite limited. Given that, in the near term, the Bank of Japan is likely to adopt a wait-and-see position, making the yen less attractive to investors seeking higher interest rates, the uncertainty surrounding the Bank of Japan's future policy will continue to exert downward pressure on the yen. The technical analysis of the USD/JPY pair indicates consolidation near current levels. A breakout above resistance could open the path for further growth, but the bearish scenario remains relevant, given fundamental factors and recent statements from authorities about the yen's low value, which keep USD/JPY from a new wave of growth. In the short term, moderate volatility is likely to persist, and traders will closely monitor news from Japan and the U.S. to determine the direction of the pair's movement.

Regarding the intraday strategy, I will primarily focus on the implementation of scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: I plan to buy USD/JPY today upon reaching an entry point around 156.40 (green line on the chart), targeting a move to 156.74 (thicker green line on the chart). Near 156.74, I intend to exit my long positions and sell back, expecting a movement of 30-35 pips in the opposite direction from the entry point. It's best to return to buying the pair during corrections and significant dips in USD/JPY. Important! Before buying on a breakout, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if there are two consecutive tests of the price 156.23 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect a rise to the opposite levels of 156.40 and 156.74.

Selling Scenarios

Scenario No. 1: I plan to sell USD/JPY today only after the 156.23 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 155.89 level, where I intend to exit my short positions and immediately buy back (expecting a 20-25-pip move in the opposite direction from that level). It is better to sell from as high a point as possible. Important! Before selling on the breakout, ensure that the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of the price 156.40 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline to the opposite levels of 156.23 and 155.89.

What is on the Chart:

• Thin Green Line – the entry price at which you can buy the trading instrument;
• Thick Green Line – the assumed price where you can set Take Profit or independently capture profits, as further growth above this level is unlikely;
• Thin Red Line – the entry price at which you can sell the trading instrument;
• Thick Red Line – the assumed price where you can set Take Profit or independently capture profits, as further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to follow the overbought and oversold zones.

Important Note:

Beginner Forex traders need to make decisions about entering the market very cautiously. Before major fundamental reports are released, it is best to remain out of the market to avoid getting caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD: Simple Trading Tips for Beginner Traders on December 29. Analysis of Yesterday's Forex Transactions

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Analysis of Trades and Tips for Trading the British Pound

The price test at 1.3502 coincided with a moment when the MACD indicator had just started to move up from the zero mark, confirming the correct entry point for buying the pound. As a result, the pair rose by 20 pips.

Today, there are no reports from the UK, so trading will remain within the sideways channel. The absence of macroeconomic data from the United Kingdom creates a vacuum that speculative sentiment and technical analysis fill. Investors and traders lack the opportunity to rely on fundamental indicators to assess the state of the British economy and make informed decisions. Instead, the market will focus on previously published data and overall sentiment regarding the global economy. Technical indicators such as support and resistance levels, moving averages, and oscillators are likely to play a more significant role than usual. Traders will attempt to identify patterns and trends to gain an advantage in the absence of fundamental information. However, it is essential to remember that technical analysis is not a guarantee of success, and risks remain high.

Regarding the intraday strategy, I will primarily focus on the implementation of scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: I plan to buy the pound today upon reaching an entry point around 1.3500 (green line on the chart), targeting a move to 1.3530 (thicker green line on the chart). Near 1.3530, I intend to exit my long positions and sell back, expecting a movement of 30-35 pips in the opposite direction from the entry point. It is unlikely to expect a strong rise in the pound today. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of the price 1.3483 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect a rise to the opposite levels of 1.3500 and 1.3530.

Selling Scenarios

Scenario No. 1: I plan to sell the pound today after the level at 1.3483 (red line on the chart) is reached, which will lead to a rapid decline in the pair. The key target for sellers will be the 1.3456 level, where I intend to exit my short positions and immediately buy back (expecting a 20-25-pip move in the opposite direction from that level). Pound sellers may manifest themselves during the correction. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of the price 1.3500 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline to the opposite levels of 1.3483 and 1.3456.

What is on the Chart:

• Thin Green Line – the entry price at which you can buy the trading instrument;
• Thick Green Line – the assumed price where you can set Take Profit or independently capture profits, as further growth above this level is unlikely;
• Thin Red Line – the entry price at which you can sell the trading instrument;
• Thick Red Line – the assumed price where you can set Take Profit or independently capture profits, as further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to follow the overbought and oversold zones.

Important Note:

Beginner Forex traders need to make decisions about entering the market very cautiously. Before major fundamental reports are released, it is best to remain out of the market to avoid getting caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD: Simple Trading Tips for Beginner Traders on December 29. Analysis of Yesterday's Forex Transactions

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Analysis of Trades and Tips for Trading the Euro

The price test at 1.1779 coincided with a period when the MACD indicator had moved significantly below the zero mark, confirming the correct entry point for selling euros. As a result, the pair declined by 15 pips.

The lack of reports in the lead-up to the New Year holidays is affecting the market. Many banks and major participants have already gone on holiday, reducing trading volumes and liquidity in the assets. In such a situation, even small spikes in volatility can pull the market in either direction. However, such movements typically reverse quickly.

This morning, the primary focus will be on the release of unemployment data in France. Any deviation of the actual values from the forecast can provoke brief but noticeable fluctuations in the euro's exchange rate relative to other currencies. However, the current "thin market" situation requires traders to exercise caution and adopt a measured risk-management approach. It is not advisable to enter large trades or bet on strong directional movements. Instead, one should concentrate on short-term speculation and respond quickly to any changes in market conditions.

For the intraday strategy, I will primarily rely on the implementation of scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: Today, I plan to buy euros upon reaching an entry point around 1.1770 (green line on the chart), targeting a move to 1.1808. Near 1.1808, I intend to exit my long positions and sell back, expecting a movement of 30-35 pips in the opposite direction from the entry point. Expecting the euro to rise can only be within the trend. Important! Before purchasing, ensure that the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy euros today if there are two consecutive tests of the price 1.1748 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect a rise to the opposite levels of 1.1770 and 1.1808.

Selling Scenarios

Scenario No. 1: I plan to sell euros if the price breaks the 1.1748 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 1.1711 level, where I intend to exit my short positions and immediately buy back (expecting a 20-25-pip move in the opposite direction from that level). Some pressure on the pair may be noticeable in the first half of the day. Important! Before selling on the breakout, ensure that the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell euros today if there are two consecutive tests of the price 1.1770 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline to the opposite levels of 1.1748 and 1.1711.

What is on the Chart:

• Thin Green Line – the entry price at which you can buy the trading instrument;
• Thick Green Line – the assumed price where you can set Take Profit or independently capture profits, as further growth above this level is unlikely;
• Thin Red Line – the entry price at which you can sell the trading instrument;
• Thick Red Line – the assumed price where you can set Take Profit or independently capture profits, as further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to follow the overbought and oversold zones.

Important Note:

Beginner Forex traders need to make decisions about entering the market very cautiously. Before major fundamental reports are released, it is best to remain out of the market to avoid getting caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.

The material has been provided by InstaForex Company - www.instaforex.com.

Intraday Strategies for Beginner Traders on December 29

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The euro has slightly declined, while the British pound has maintained its strength. The USD/JPY pair has also somewhat recovered after strong fluctuations.

The lack of reports in the lead-up to the New Year holidays is affecting the situation. Traders, deprived of the usual fuel in the form of economic indicators, are forced to rely on less reliable sources of information, such as market sentiment and speculative forecasts. This leads to increased uncertainty and, consequently, more pronounced fluctuations in currency rates. Many financial institutions and major market players are going on holiday, reducing trading volumes and liquidity. In such conditions, even minor volumes of operations can cause significant price changes.

Today, the only data expected in the first half of the day is the total number of unemployed in France. However, one should not underestimate their potential impact on European markets. In the absence of other important news, even local data can serve as a signal about the overall state of the Eurozone economy, especially given the heightened caution among traders. A surprise in either direction from expected values can lead to short-term but noticeable fluctuations in the euro exchange rate relative to other currencies.

In the afternoon, there will be relative calm in official reports. However, this does not mean the complete absence of market movements. Traders will closely monitor any unofficial comments from central bank representatives and financial regulators.

There are also no reports scheduled for the UK today, so significant movement in the GBP/USD pair is also unlikely.

If the data meets economists' expectations, it is best to operate based on the Mean Reversion strategy. If the data comes in significantly above or below the economists' expectations, the Momentum strategy is preferable.

Momentum Strategy (Breakout):

For the EUR/USD Pair

• Buy on breakout above 1.1781, targeting a rise to 1.1807 and 1.1840.
• Sell on a breakout below 1.1754, targeting a drop to 1.1730 and 1.1706.

For the GBP/USD Pair

• Buy on breakout above 1.3502, targeting a rise to 1.3531 and 1.3561.
• Sell on a breakout below 1.3471, targeting a drop to 1.3442 and 1.3411.

For the USD/JPY Pair

• Buy on breakout above 156.60, targeting a rise to 156.90 and 157.25.
• Sell on a breakout below 156.20, targeting a drop to 155.90 and 155.67.

Mean Reversion Strategy (Retracement):

For the EUR/USD Pair

• Look for sell opportunities after a failed breakout above 1.1790 on a return below this level.
• Look for buy opportunities after a failed breakout below 1.1745 on a return to this level.

For the GBP/USD Pair

• Look for sell opportunities after a failed breakout above 1.3514 on a return below this level.
• Look for buy opportunities after a failed breakout below 1.3479 on a return to this level.

For the AUD/USD Pair

• Look for sell opportunities after a failed breakout above 0.6733 on a return below this level.
• Look for buy opportunities after a failed breakout below 0.6715 on a return to this level.

For the USD/CAD Pair

• Look for sell opportunities after a failed breakout above 1.3677 on a return below this level.
• Look for buy opportunities after a failed breakout below 1.3653 on a return to this level.

The material has been provided by InstaForex Company - www.instaforex.com.

What to Pay Attention to on December 29? Analysis of Fundamental Events for Beginners

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Review of Macroeconomic Reports:

There are no macroeconomic reports scheduled for Monday. The holidays continue. At the beginning of last week, the market moved somewhat, but then it came to a complete standstill. This week, some activity may also be present on Monday and Tuesday, but by Wednesday, there will be a shortened trading day and New Year celebrations, with the market closing on Thursday, and Friday will be the last day of the holiday week. Therefore, we shouldn't expect an abundance of events and movements over the next five days.

Review of Fundamental Events:

No fundamental events are scheduled for Monday. Governments and central banks have gone on holiday due to Christmas and New Year, so news will start coming in next year. The first interesting events are planned for January 5.

General Conclusions:

During the first trading day of the New Year week, both currency pairs may trade sluggishly. Short-term trends for both currency pairs remain upward, while the market is fully engaged in holiday celebrations. The "thin market" factor may lead to trend movements, but this cannot be predicted. We would expect a low-volatility flat today.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (bounce or breakout). The less time it takes, the stronger the signal.
2. If two or more trades were opened near a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form a multitude of false signals or none at all. At the first signs of a flat, it is better to stop trading.
4. Trades are opened during the time between the start of the European session and mid-American session, after which all trades should be closed manually.
5. On the hourly timeframe, using signals from the MACD indicator, it is preferable to trade only when good volatility exists, and a trend is confirmed by a trend line or channel.
6. If two levels are too close to each other (5 to 20 pips), they should be viewed as an area of support or resistance.
7. After moving 15-20 pips in the right direction, a Stop Loss should be set to breakeven.

Chart Explanations:

• Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed near them.
• Red Lines: Channels or trend lines that reflect the current trend and indicate the preferred direction to trade.
• MACD Indicator (14, 22, 3): A histogram and signal line, a supplementary indicator that can also be used as a source of signals.

Important Note: Significant speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their release, it is advisable to trade cautiously or exit the market to avoid sharp reversals against the preceding movement.

Remember: For beginners trading in the Forex market, it is crucial to understand that not every trade can be profitable. Developing a clear strategy and implementing sound money management are keys to successful long-term trading.

The material has been provided by InstaForex Company - www.instaforex.com.

How to Trade the GBP/USD Currency Pair on December 29? Simple Tips and Trade Breakdown for Beginners

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Trade Analysis for Friday:

1-Hour Chart of the GBP/USD Pair

The GBP/USD pair moved similarly to the EUR/USD pair on Friday—there were virtually no movements, and volatility was minimal. This is not surprising, as the macroeconomic backdrop last week was only present on Tuesday, trading ended early on Wednesday, and Thursday was a holiday. We can expect a similar picture this week. The macroeconomic and fundamental backdrop is absent; Wednesday is a shortened trading day; Thursday is a holiday; and on Friday, the market will likely not trade. Therefore, some movements may be observed on Monday and Tuesday, but then it will be back to holiday mode. The upward trend for the British currency persists, so even in the short term, novice traders can expect growth, let alone in the long term. However, we anticipate a resumption of trend movements starting January 5, when macroeconomic information begins to flow in, and the market fully wraps up its Christmas and New Year festivities.

5-Minute Chart of the GBP/USD Pair

On the 5-minute timeframe, one trading signal for a sell was formed on Friday with a slight margin of error. The price bounced off the 1.3529 level during the U.S. trading session, then moved down by about 30 pips, which novice traders could have captured. Such a profit is a great result for the holiday season.

How to Trade on Monday:

On the hourly timeframe, the GBP/USD pair has completed its flat and has once again started moving upwards. We fully support this scenario, as discussed previously. There are no global grounds for medium-term dollar growth; therefore, we expect movement only to the upside. Overall, we anticipate the resumption of the global upward trend in 2025, which could push the pair to the 1.4000 mark in the next couple of months.

On Monday, novice traders can consider new long positions if the price breaks through the area of 1.3529-1.3543, targeting 1.3574-1.3590. Short positions will become relevant upon a new bounce from the region of 1.3529-1.3543, targeting 1.3437-1.3446.

On the 5-minute timeframe, trading opportunities can currently be identified at the following levels: 1.2913, 1.2980-1.2993, 1.3043, 1.3096-1.3107, 1.3203-1.3212, 1.3259-1.3267, 1.3319-1.3331, 1.3437-1.3446, 1.3529-1.3543, 1.3574-1.3590. On Monday, no significant events are scheduled in the UK or the US, and market volatility may remain weak. The market is currently "thin," making it easier for market makers to move prices than in regular times, but this does not automatically mean they want to do so.

Key Rules of the Trading System:

1. The strength of a signal is assessed by the time it takes to form the signal (bounce or breakout). The less time it takes, the stronger the signal.
2. If two or more trades were opened near any level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can create numerous false signals or none at all. In any case, it's better to stop trading at the first signs of a flat.
4. Trades are opened during the period between the start of the European session and the middle of the American session, after which all trades must be closed manually.
5. On the hourly timeframe, when trading based on signals from the MACD indicator, it is preferable to trade only when good volatility is present, and a trend is confirmed by a trend line or channel.
6. If two levels are positioned too closely to each other (5 to 20 points), they should be viewed as a support or resistance area.
7. After moving 20 pips in the right direction, set the Stop Loss to breakeven.

Chart Explanation:

• Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed near them.
• Red Lines: Channels or trend lines that reflect the current trend and indicate the preferred direction for trading.
• MACD Indicator (14, 22, 3): A histogram and signal line, a supplementary indicator that can also be used as a source of signals.

Important Note: Significant speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their release, it is advisable to trade cautiously or exit the market to avoid sharp reversals against the preceding movement.

Remember: For beginners trading in the Forex market, it is important to understand that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to long-term trading success.

The material has been provided by InstaForex Company - www.instaforex.com.

How to Trade the EUR/USD Currency Pair on December 29? Simple Tips and Trade Breakdown for Beginners

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Trade Analysis for Friday:

1-Hour Chart of the EUR/USD Pair

The EUR/USD currency pair showed minimal movement, down 35 pips on Friday. Nothing interesting happened during the day, either in the world, the Eurozone, or the U.S. The market is currently focused on two topics: the holidays and the ceasefire between Ukraine and Russia. However, the first factor significantly reduces the desire to trade, while the second is so tenuous that traders are hesitant to act on it. In any case, we believe there will be no strong movements this week, as the macroeconomic and fundamental backdrop is absent, with New Year's celebrated on Wednesday and Thursday a holiday. Thus, the current week again has a truncated status, with virtually no drivers for movement.

5-Minute Chart of the EUR/USD Pair

On the 5-minute timeframe, no trading signals were generated on Friday, as the price did not react to any levels or areas during the day. Therefore, novice traders had no grounds to open trades. This could be beneficial, as market volatility is extremely weak due to the holidays.

How to Trade on Monday:

On the hourly timeframe, the EUR/USD pair continues to form an upward trend. The price may soon test the 1.1800-1.1830 area, the upper boundary of the flat on the daily timeframe. It is quite possible that this time we may see a breakout from the six-month sideways channel. The overall fundamental and macroeconomic backdrop remains very weak for the U.S. dollar; we expect growth in the pair in the medium term.

On Monday, novice traders can trade from the area of 1.1745-1.1754. A bounce from this area will make long positions relevant, targeting 1.1808. A break below this area will allow for opening shorts with a target at 1.1666.

On the 5-minute timeframe, the following levels should be considered: 1.1354-1.1363, 1.1413, 1.1455-1.1474, 1.1527-1.1531, 1.1550, 1.1584-1.1591, 1.1655-1.1666, 1.1745-1.1754, 1.1808, 1.1851, 1.1908, and 1.1970-1.1988. On Monday, no significant events or reports are scheduled in either the Eurozone or the U.S. Thus, we can again expect very weak movements today.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (bounce or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened near any level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair may form numerous false signals or none at all. At the first signs of a flat, it is better to stop trading.
4. Trades are opened during the period between the beginning of the European session and the middle of the American session, after which all trades should be closed manually.
5. On the hourly timeframe, it is preferred to trade only when there is good volatility and a trend confirmed by the trend line or channel, using signals from the MACD indicator.
6. If two levels are too close to each other (5 to 20 pips), they should be viewed as a support or resistance area.
7. Upon moving 15 pips in the right direction, set the Stop Loss to breakeven.

Chart Explanations:

• Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed near them.
• Red Lines: Channels or trend lines that reflect the current trend and indicate the preferred direction for trading.
• MACD Indicator (14, 22, 3): A histogram and signal line; a supplementary indicator that can also be used as a source of signals.

Important Note: Significant speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their release, it is advisable to trade cautiously or exit the market to avoid sharp reversals against the preceding movement.

Remember: For beginners trading in the Forex market, it is important to understand that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to long-term trading success.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD Review: Week Preview. The Pound Can Open Champagne Calmly

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The GBP/USD currency pair showed ultra-weak volatility on Friday, but overall, the British pound is finishing the year in a very good position. Yes, it corrected significantly during the second half of 2025, even more so than the EUR/USD pair. However, in December, the British currency primarily rose and managed to surpass the Ichimoku cloud on the daily timeframe. Thus, the pound has everything it needs to continue its upward trend in 2026.

During the New Year week, both the UK and the U.S. have empty event calendars. In America, reports on jobless claims, manufacturing business activity (not ISM), and Chicago business activity will be released. In the UK, the manufacturing sector's business activity index will be published in its second estimate for December. None of the aforementioned data will attract much interest. December saw a large number of significant and impactful reports published in the U.S. and the UK, so the market now has a nearly complete picture of the state of the American and British economies. Now we need to await new data on key indicators: unemployment, inflation, and the labor market. These data will significantly influence the monetary policies of the Bank of England and the Federal Reserve, which continue to ease policy. We believe that the upward trend of 2025 will continue into 2026.

The average volatility of the GBP/USD pair over the last five trading days is 60 pips, which is considered "medium-low" for the pound-dollar pair. On Monday, December 29, we expect movement within the range limited by the levels of 1.3435 and 1.3555. The upper channel of the linear regression is downward-sloping, but this is solely due to technical corrections on the higher timeframes. The CCI indicator has entered oversold territory 6 times in recent months and has formed numerous "bullish" divergences, constantly signaling a resumption of the upward trend. Last week, the indicator formed another bullish divergence, again signaling a potential return to growth.

Nearest Support Levels:

• S1 – 1.3489
• S2 – 1.3428
• S3 – 1.3367

Nearest Resistance Levels:

• R1 – 1.3550

Trading Recommendations:

The GBP/USD pair is attempting to resume the upward trend of 2025, and its long-term prospects remain unchanged. Donald Trump's policies will continue to exert pressure on the dollar, so we do not expect the American currency to appreciate. Thus, long positions targeting 1.3550 and 1.3555 remain relevant in the near term as long as the price is above the moving average. If the price is below the moving average line, minor shorts can be considered with targets of 1.3367 and 1.3306 on technical grounds. Occasionally, the American currency shows corrections (in a global sense), but for trend strengthening, it needs signs of resolution in the trade war or other global positive factors.

Explanations to Illustrations:

• Linear Regression Channels help determine the current trend. If both are aligned in the same direction, the trend is strong.
• Moving Average Line (settings 20.0, smoothed) indicates the short-term trend and the direction in which trading should be conducted.
• Murray Levels – target levels for movements and corrections.
• Volatility Levels (red lines) indicate the probable price channel in which the pair will stay over the next day, based on current volatility indicators.
• CCI Indicator – its entry into oversold territory (below -250) or overbought territory (above +250) signifies an approaching trend reversal in the opposite direction.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading Recommendations and Analysis for EUR/USD on December 29. Euro Maintains Upward Bias

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Analysis of EUR/USD on 5-Minute Chart

The EUR/USD currency pair traded very weakly on Friday. This is not surprising, as Christmas and New Year celebrations are ongoing worldwide. With more holidays, traders had less motivation to open positions, and there was no macroeconomic or fundamental backdrop. Therefore, strong and trending movements are unlikely until the end of the year. This week, the economic calendar for the Eurozone and the U.S. is empty.

From a technical standpoint, the upward trend remains on the hourly timeframe, as evidenced by the trend line. We consider the primary task for the euro this week to stay above this trend line to continue rising at the start of the new year. The euro is also supported by the Ichimoku indicator lines. A bounce from the area of 1.1750-1.1760 today could provoke a slight rise in the pair.

On the 5-minute chart, no trading signals were formed on Friday, and the price remained predominantly sideways throughout the day. Traders had no grounds to open trading positions.

COT Report

The latest COT report is dated December 16. The illustration above clearly shows that the net position of non-commercial traders has been bullish for a long time, with bears struggling to gain supremacy at the end of 2024, but quickly losing it. Since Trump took office as president of the United States for a second time, only the dollar has been declining. While we cannot say with 100% certainty that the dollar's decline will continue, current global developments suggest this is a possibility. The red and blue lines are moving further apart, indicating a strong advantage for the bulls.

We still do not see any fundamental factors that would strengthen the euro, but there are plenty of factors supporting a decline in the dollar. The global downward trend remains intact, but what does it matter where the price has moved over the last 17 years? For the past three years, only the euro has been appreciating, which is also a trend.

The positioning of the red and blue lines in the indicator continues to signal the preservation and strengthening of the bullish trend. During the last reporting week, the number of long positions in the "Non-commercial" group increased by 8,900, while the number of short positions rose by 2,700. Accordingly, the net position increased by 6,200 contracts over the week.

Analysis of EUR/USD on the 1-Hour Timeframe

On the hourly timeframe, the EUR/USD pair continues to build a bullish trend. In fact, the upper boundary of the 1.1400-1.1830 range has been tested twice, so we might soon see a technical decline, as the flat persists on the daily timeframe. However, the area of 1.1750-1.1760 is preventing the pair from dropping lower, which means that bulls can make another attempt to break through the upper boundary of the range at any moment.

For December 29, we highlight the following important levels: 1.1234, 1.1274, 1.1362, 1.1426, 1.1542, 1.1604-1.1615, 1.1657-1.1666, 1.1750-1.1760, 1.1846-1.1857, 1.1922, 1.1971-1.1988, as well as the Senkou Span B line (1.1710) and Kijun-sen (1.1755). The Ichimoku indicator lines may shift during the day, which should be taken into account when determining trading signals. Don't forget to set a Stop Loss at breakeven if the price moves in the correct direction by 15 pips. This will protect against possible losses if the signal turns out to be false.

On Monday, no significant events or reports are scheduled in the Eurozone or the U.S. Movement may be weak during the day and trendless.

Trading Recommendations:

On Monday, traders may trade in the 1.1750-1.1760 range. A price bounce from this area will make long positions relevant, with a target in the 1.1800-1.1830 range. A break below this area will lead to a decline toward the Senkou Span B line.

Explanations to Illustrations:

• Support and Resistance Levels – Thick red lines, around which movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B Lines – Lines from the Ichimoku indicator, projected onto the hourly timeframe from a 4-hour timeframe. They are strong lines.
• Extreme Levels – Thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow Lines – Trend lines, trend channels, and any other technical patterns.
• Indicator 1 on COT Charts – Size of the net position of each category of traders.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD Review: Week Preview. Holidays Continue

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The EUR/USD currency pair did not show any interesting movements on Friday, and volatility during the holidays has dropped nearly to zero. However, we can forget about last week and shift our attention to the upcoming week, which also has a "holiday" status. One can immediately assume that the New Year week will likely follow a similar pattern to Christmas week. In the first 2-3 weeks, some market movements may occur, but Thursday is a holiday, and it is unlikely that anyone will want to trade on Friday right before and after the holidays. The economic calendar for both the Eurozone and the U.S. is empty.

Thus, throughout the week, trading (or not trading) will largely depend on technical factors. The only reports in the Eurozone will be published on Friday—the business activity indices for the services and manufacturing sectors for December. These data could have influenced market sentiment if they were at least the first estimates. However, they will be second estimates and therefore attract little interest. There are no other significant events planned.

As a result, volatility this week is likely to be weak. Even if the "thin market" concept works, predicting movements can only be done based on technical factors. It is important to remember that a key point for the EUR/USD pair remains the flat on the daily timeframe, and in our opinion, the likelihood of its ending during the New Year week is extremely low. However, anything is possible in the currency market. We previously stated that the market is driven by market makers, whose goal is to provide liquidity to other traders. Therefore, to succeed, market makers need to outmaneuver other market participants. If it is necessary to move the pair up or down during the New Year, that is entirely possible.

The average volatility of the EUR/USD pair over the last five trading days, as of December 29, is 44 pips and is classified as "low." We expect the pair to trade between 1.1727 and 1.1815 on Monday. The upper channel of the linear regression is turning upwards, but the flat continues on the daily timeframe. The CCI indicator entered oversold territory twice in October but moved to overbought territory at the beginning of December. We have already seen a small retracement.

Nearest Support Levels:

• S1 – 1.1719
• S2 – 1.1658
• S3 – 1.1597

Nearest Resistance Levels:

• R1 – 1.1780
• R2 – 1.1841

Trading Recommendations:

The EUR/USD pair is positioned above the moving average line, and the upward trend remains intact across all higher timeframes, while the flat continues for the sixth month on the daily timeframe. The global fundamental backdrop remains significantly negative for the dollar. Over the past six months, the dollar has shown weak growth at times, but exclusively within the sideways channel. It lacks a fundamental basis for long-term strengthening. If the price is below the moving average, small shorts can be considered, targeting 1.1727 on purely technical grounds. Long positions remain relevant above the moving average line, targeting 1.1829 and 1.1830 (the upper boundary of the flat on the daily timeframe), which have already been effectively targeted. Now we need the flat to conclude.

Explanations to Illustrations:

• Linear Regression Channels help determine the current trend. If both are aligned in the same direction, the trend is strong.
• Moving Average Line (settings 20.0, smoothed) indicates the short-term trend and the direction in which trading should be conducted.
• Murray Levels – target levels for movements and corrections.
• Volatility Levels (red lines) indicate the probable price channel in which the pair will stay over the next day, based on current volatility indicators.
• CCI Indicator – its entry into oversold territory (below -250) or overbought territory (above +250) signifies an approaching trend reversal in the opposite direction.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading Recommendations and Analysis for GBP/USD on December 29. Pound on Holiday

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Analysis of GBP/USD on 5-Minute Chart

The GBP/USD pair traded with minimal volatility on Friday. This is not surprising, as Christmas and New Year celebrations are ongoing worldwide. With more holidays, traders had less motivation to open positions, and there was no macroeconomic or fundamental backdrop. Thus, trading activity will likely shift to next week. Technical analysis remained unchanged, and there were no news events to analyze.

On the hourly timeframe, a new ascending trend is still evident, with a new trend line forming. Discussing the pound's prospects for this week seems unnecessary. The economic calendar is empty, and the pair's medium-term outlook is clear. Of course, this does not mean that downward corrections are impossible or that the British currency will appreciate throughout January. However, we have analyzed the overall fundamental picture numerous times. Therefore, we expect only declines from the U.S. dollar in 2026.

On the 5-minute timeframe, no trading signals were formed on Friday. The price was unable to hold either the critical line or the 1.3533-1.3548 range throughout the day. Overall volatility for the day was 50 pips.

COT Report

COT reports for the British pound indicate that commercial traders' sentiment has been changing consistently in recent years. The red and blue lines, which represent the net positions of commercial and non-commercial traders, frequently intersect and, in most cases, remain close to the zero mark. Currently, the lines are moving apart, but non-commercial traders dominate with short positions. Speculators are increasingly selling the pound, but, as we have mentioned, it does not matter how low the demand for the British currency is. The demand for the U.S. dollar is often even lower.

The dollar continues to decline due to Donald Trump's policies, as seen on the weekly timeframe (illustration above). The trade war will continue in one form or another for a long time. The Federal Reserve will, in any case, lower the rate in the next 12 months. Demand for the dollar will decrease one way or another. According to the latest COT report (dated December 16) for the British pound, the "Non-commercial" group opened 1,600 buy contracts and closed 25,400 sell contracts. Thus, the net position of non-commercial traders increased by 27,000 contracts over the week.

In 2025, the pound rose significantly, but it should be understood that there is only one reason: Trump's policies. Once this reason is neutralized, the dollar may start to appreciate, but when that will happen is anyone's guess.

Analysis of GBP/USD on the 1-Hour Timeframe

On the hourly timeframe, the GBP/USD pair continues to form a new upward trend, but the market is currently on a holiday pause. We believe that the British pound's growth in the medium-term perspective will continue regardless of the local macroeconomic and fundamental backdrop. The trend for the pound remains upward across almost all timeframes.

For December 29, we highlight the following important levels: 1.2863, 1.2981-1.2987, 1.3042-1.3050, 1.3096-1.3115, 1.3201-1.3212, 1.3307, 1.3369-1.3377, 1.3437, 1.3533-1.3548, and 1.3584. The Senkou Span B line (1.3369) and Kijun-sen (1.3444) may also serve as sources of signals. It is recommended to set the Stop Loss to breakeven upon a price movement of 20 pips in the correct direction. The lines of the Ichimoku indicator may shift during the day, which should be taken into account when determining trading signals.

On Monday, no significant events or reports are scheduled in the UK or the U.S. The upward movement may continue, but new buy signals are needed; however, flat movement and low volatility are more likely.

Trading Recommendations:

Today, traders may consider selling if the price bounces from the 1.3533-1.3548 area, targeting 1.3444. Long positions will become relevant upon the price stabilizing above the area of 1.3533-1.3548, targeting 1.3615, or upon a bounce from the critical line.

Explanations to Illustrations:

• Support and Resistance Levels – Thick red lines, around which movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B Lines – Lines from the Ichimoku indicator, projected onto the hourly timeframe from a 4-hour timeframe. They are strong lines.
• Extreme Levels – Thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow Lines – Trend lines, trend channels, and any other technical patterns.
• Indicator 1 on COT Charts – Size of the net position of each category of traders.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD: Week Preview. Pre-New Year Vibe, FOMC Minutes, and Unemployment Claims

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The upcoming week, which falls at the turn of the year, lacks important fundamental events. Nevertheless, in a "thin" market, even minor releases can trigger strong volatility. Therefore, every report and every release matter during the New Year period.

On Monday, data on pending home sales in the U.S. will be released. This report reflects the number of real estate transactions for which contracts have already been signed but not yet closed. It serves as a leading indicator of the American real estate market, as contracts are typically signed well in advance (usually 4-5 weeks) of the actual sale, which correlates with future housing sales data.

According to forecasts, pending home sales for November are expected to increase by only 0.9%, following an almost two percent (1.9%) increase in the previous month. The dollar will come under pressure only if the number unexpectedly falls into negative territory.

On Tuesday, December 30, the FOMC minutes—the protocol of the December Federal Reserve meeting—will be released. Recall that following this meeting, the central bank lowered the interest rate by 25 basis points, implementing the most anticipated scenario. However, the details of the December meeting were quite contradictory.

On one hand, the Federal Reserve did not explicitly announce further rate cuts at one of the upcoming meetings. The updated median forecast (dot plot) suggests only one 25-basis point rate cut in 2026. A similar forecast was communicated following the September meeting as well.

On the other hand, the rhetoric of Fed Chair Jerome Powell during the final press conference was relatively dovish—softer than expected. He emphasized the state of the U.S. labor market, acknowledging that it continues to cool. Powell also mentioned "significant downside risks" for employment. Regarding inflation, he did not dramatize the situation. He stated that inflation has slowed, although it remains "somewhat elevated" relative to the Fed's long-term target of 2%. Meanwhile, short-term inflation expectations have declined (compared to peak values earlier this year).

Overall, market participants interpreted the December meeting results as unfavorable for the dollar. The protocol from this meeting could either amplify or weaken the pressure on the greenback. If the minutes highlight concerns about rising inflation, dovish expectations will dissipate (including in the context of the March meeting), strengthening the dollar's position across markets. Conversely, if the Fed focuses on issues in the U.S. labor market (rising unemployment, slowing hiring, deteriorating supply-demand balance), the dollar will face additional pressure.

It is also important to note that the probability of a rate cut at the January meeting is only 17% (according to the CME FedWatch tool), while the likelihood of a rate cut in March is estimated at 52%. If the tone of the December meeting's minutes is dovish, the chances of a March rate cut could approach 60%, putting pressure on the dollar.

Additionally, on Tuesday, the housing price index for the 20 largest U.S. metropolitan areas, calculated by S&P/Case-Shiller, will be published. This is one of the key indicators of the real estate market's state, widely used for trend analysis. Since January of this year, the index has been showing a downward trend, dropping from 4.8% (January 2025) to 1.4% (September). According to preliminary forecasts, the index is anticipated to decline again in October, this time to 1.1%. For dollar bulls, this indicator must not fall into negative territory (especially if Pending Home Sales, released on Monday, also comes in below zero).

The most significant report on Wednesday will be the Unemployment Claims report. The increase in initial jobless claims has decreased for the second consecutive week, after a sharp spike to 237,000. This week, the indicator may again demonstrate a downward trend, decreasing to 213,000. If the figure aligns with expectations, market reaction will be weak—traders may even ignore the release altogether. Strong volatility is expected only if Unemployment Claims deviates significantly from the projected value—if it is above 220,000 or below 210,000.

On Wednesday, China will also release the manufacturing PMI index. According to forecasts, the indicator will remain in the contraction zone, although it will rise from 49.2 to 49.4. The non-manufacturing activity index is also expected to stay below the 50-point level (49.8). If both indicators exceed the 50.0 mark contrary to forecasts, risk appetite in the market will increase, leading buyers of EUR/USD to strengthen their positions.

Thursday is New Year's Day, so major trading venues worldwide will be closed. The currency market will be paused.

The economic calendar for Friday is also nearly empty. The only report of academic interest is the PMI indices (final data for December), which will be released in key Eurozone countries. However, if the final estimates align with the initial ones (which is most likely), traders will likely ignore this release.

Thus, the upcoming week does not promise to be informative—the most important macroeconomic reports will begin to come out starting January 5. However, amidst a "thin market," even secondary releases can provoke volatility. Attention will be on the FOMC minutes, Unemployment Claims, and U.S. housing market data.

The material has been provided by InstaForex Company - www.instaforex.com.

American Dollar: Preview of the Week

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The U.S. dollar will not save EUR/USD or GBP/USD. The U.S. will also be celebrating the New Year; the market will be closed on Thursday, there will be a shortened trading day on Wednesday, and only a few will be willing to open trades on Friday. Among the economic reports, there are the not particularly significant initial and continuing jobless claims report, the somewhat irrelevant Chicago Business Activity Index, and the purely formal FOMC meeting minutes.

Some analysts believe the FOMC minutes, known as the "minutes of the FOMC," are significant to market participants, but I remind you that they are released three weeks after the meeting. In the context of the December FOMC meeting, they hold no value because, right after the meeting, various reports on unemployment, the labor market, and inflation were released, which will determine the Federal Reserve's future decisions on monetary policy. Therefore, even without important economic data, the information about the FOMC meeting loses its relevance almost entirely after three weeks. Given the published data, this protocol has no significance whatsoever. The dollar will not be able to take control of the situation next week as it has done for much of the outgoing year.

Wave Structure of EUR/USD:

Based on the conducted analysis of EUR/USD, I conclude that the instrument continues to build the bullish segment of the trend. Donald Trump's policies and the Fed's monetary policy remain significant factors in the long-term decline of the American currency. The targets of the current trend segment may extend up to the 25th figure. The current upward wave pattern is developing, and we hope we are now witnessing the formation of an impulse wave set that is part of global wave 5. In this case, we should expect growth towards targets around 1.1825 and 1.1926, corresponding to 200.0% and 261.8% on the Fibonacci retracement.

Wave Structure of GBP/USD:

The wave structure of the GBP/USD instrument has changed. The downward corrective structure a-b-c-d-e in C of 4 appears to be complete, as does the entire wave 4. If this is indeed the case, I expect the primary trend segment to resume its development, with initial targets around the 38 and 40 levels.

In the short term, I anticipated the formation of wave 3 or c, with targets around 1.3280 and 1.3360, corresponding to 76.4% and 61.8% of the Fibonacci retracement. These targets have been reached. Wave 3 or c continues its formation, and currently, a fourth attempt to break the 1.3450 mark (equivalent to 61.8% on the Fibonacci retracement) is underway. Movement targets are 1.3550 and 1.3720.

Core Principles of My Analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often require adjustments.
2. If there is uncertainty about what is happening in the market, it is better not to enter it.
3. There is never 100% certainty in the direction of movement, and there never can be. Don't forget about protective stop-loss orders.
4. Wave analysis can be combined with other forms of analysis and trading strategies.

The material has been provided by InstaForex Company - www.instaforex.com.