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The euro sets the winning point

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2025 turned out to be a spectacular year for the euro. The ECB managed to bring inflation under control, the eurozone economy adapted to U.S. tariffs much faster than expected, gas prices collapsed by 50% from their annual highs, and European stock indices posted their best performance since 2021. Capital inflows and a decline in geopolitical risk premiums became just as powerful drivers of the EUR/USD rally as the divergence in monetary policy and the narrowing economic gap between the currency bloc and the United States.

EuroStoxx 600 performance

The euro has gained more than 13% against the U.S. dollar since the start of the year—and not only because the Fed continues to cut rates while the ECB has put an end to its monetary expansion cycle.

Donald Trump's return to power resulted in a thaw in relations between the United States and Russia. This increased the likelihood of an end to the armed conflict in Ukraine and fueled demand for Eastern European currencies. Remarkably, seven of the eight best-performing currencies of 2025 among the three dozen tracked by Bloomberg came from the Old World: the Russian ruble, Hungarian forint, Swedish and Czech krona, euro, Polish zloty, and Swiss franc. The only outsider among them was the main winner of the trade wars—the Mexican peso.

If in 2022–2023 Europe was groaning under the energy crisis, by 2025 it had adapted to the new conditions. Gas inventories remain low, but prices are falling on expectations of record-high LNG supplies to the Old World. Just as Russia managed to circumvent Western sanctions, Europe has adapted to a significant reduction in energy imports from the East.

Dynamics of LNG supplies to Europe

EUR/USD is also supported by the potential acceleration of the eurozone economy thanks to Germany's fiscal stimulus and increased EU defense spending. The relevant bills were passed back in the spring, but the effects of their implementation are expected in 2026. The fate of the major currency pair will depend on whether the U.S. economy can compete with Europe's.

I would not say that the United States is heading toward disaster because of cooling labor market conditions. While Germany was ramping up infrastructure investment, the U.S. was increasing capital spending on artificial intelligence technologies. According to the Atlanta Fed's leading indicator, U.S. GDP is expected to grow by 3% in the fourth quarter. The impressive dynamics of the indicator from April to September became a catalyst for the rebound of the USD index from its 3.5-year lows. Why couldn't American exceptionalism make a comeback? And that would be a completely different story for the dollar and the entire Forex market.

From a technical standpoint, on the daily chart EUR/USD has moved below fair value at 1.175. This level now acts as key resistance. Short positions opened from this level should be held and periodically increased.

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EUR/USD Analysis on December 31, 2025

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The wave count on the 4-hour chart for EUR/USD has a fairly clear, albeit rather complex, structure. There is no talk of canceling the upward trend segment that began in January 2025, but the wave structure starting from July 1 has taken on a complex and extended form. In my view, the instrument has completed the formation of corrective wave 4, which took on a very non-standard shape. Within this wave, we observed exclusively corrective structures, so there is no doubt about the corrective nature of this wave.

In my opinion, the construction of the upward trend segment has not been completed, and its targets extend as far as the 25th level. The series of waves a–b–c–d–e appears complete; therefore, over the coming weeks I expect the formation of a new upward wave sequence. We have seen the presumed waves 1 and 2, and the instrument is now in the process of forming wave 3 or c, which took on a five-wave form and, consequently, has been completed. In the coming days, a decline in quotes can be expected, which is exactly what we are currently observing.

The EUR/USD pair declined by 10 basis points during Wednesday, having lost another 25 the day before. As we can see, there is downward movement, but it is very weak and holiday-related. Therefore, no conclusions should be drawn from such minimal price fluctuations. Since the U.S. currency has been rising slightly over the past few days, many economists have immediately begun looking for reasons for this move. In my opinion, a 30-point move is not even worth trying to explain, especially when the news background is absent. The only more or less interesting event this week was the release of the FOMC minutes, which became available on Tuesday evening.

Naturally, analysts unanimously rushed to label the report as "hawkish." However, I would like to point out that the report was released late in the evening, while demand for the U.S. currency had been increasing before its publication, not after. In any case, the Fed meeting took place three weeks ago, and immediately afterward the FOMC's stance was already 100% clear. Therefore, the meeting minutes did not bring any new information to the market. Explaining the dollar's rise during the New Year week by the FOMC minutes is simply wishful thinking.

In reality, everything is much simpler. The pair built a five-wave upward structure and then moved on to forming a downward wave sequence or a single wave. I have said many times that higher-degree waves are important, but trading can also be based on individual five-wave and three-wave structures. We saw three waves up, with the third wave consisting of five waves. A correction naturally suggests itself, and the FOMC minutes have absolutely nothing to do with the decline in EUR/USD.

General Conclusions

Based on the EUR/USD analysis, I conclude that the pair continues to build an upward trend segment. Donald Trump's policies and the Federal Reserve's monetary policy remain significant factors weighing on the U.S. currency in the long term. The targets of the current trend segment may extend as far as the 25th figure. The current upward wave sequence may not be complete, but three waves have already been formed. If it continues to develop, growth can be expected with targets around 1.1825 and 1.1926, which correspond to the 200.0% and 261.8% Fibonacci levels. However, in the near term, a corrective wave or wave sequence may be forming.

On a smaller timeframe, the entire upward trend segment is visible. The wave count is not entirely standard, as the corrective waves differ in size. For example, the higher-degree wave 2 is smaller than the internal wave 2 within wave 3. However, this also happens. Let me remind you that it is best to identify clear and understandable structures on charts rather than strictly tying analysis to every single wave. At present, the upward structure raises no doubts.

The main principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often signal changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is no and never can be 100% certainty about the direction of movement. Do not forget to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

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

GBP/USD Analysis on December 31, 2025

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For the GBP/USD pair, the wave count continues to indicate the formation of an upward segment of the trend, but over the past six months it has taken on a complex corrective form. The trend segment that began on July 1 can be considered wave 4, or any global corrective wave, since it clearly has a corrective rather than an impulsive internal structure. The same applies to its internal sub-waves. The downward wave structure that began on September 17 has taken on a five-wave form (a–b–c–d–e) and has been completed. The instrument is now in the process of forming a new upward wave sequence.

Of course, any wave structure can become more complex at any moment and take on a more extended form. Even the presumed wave 4 could still develop into a five-wave structure, in which case we would observe a correction for several more months. However, at present there is a strong chance that an upward wave sequence is being formed. If this is indeed the case, then the first two waves of this segment have already been completed, and we are now observing the formation of wave 3 or c, which may also already be completed.

The GBP/USD pair has declined by several dozen basis points over the past few days, but overall it is still ending the year at fairly high levels. There are only about 350 points left to the 2025 highs of the instrument. This week, there were no important news releases or events; the market celebrated Christmas and is preparing for New Year's celebrations. Trading will close today, and the market will reopen only on Friday. However, on Friday the market may show a complete lack of interest in trading, as there will be no news at all and the market will effectively be open for just one day.

Based on all of the above, I believe that a resumption of full-fledged trading should be expected on Monday, January 5. The current wave count of the most recent upward trend segment does not look as convincing as that of EUR/USD, but it is precisely the EUR/USD pair that allows us to assume that the construction of wave 3 or c has been completed. If this is indeed the case, then we are likely to see at least the formation of wave 4, and at most a new downward wave sequence. In any case, a decline in the instrument should be expected in the near future regardless of the news background. The news background next week will largely determine whether this move turns out to be wave 4 or an entire wave sequence with further complication of the corrective structure that began 5–6 months ago.

General conclusions

The wave picture of the GBP/USD pair has changed. The downward corrective structure a–b–c–d–e within wave C of wave 4 appears complete, as does wave 4 as a whole. If this is indeed the case, I expect the main trend segment to resume its development with initial targets around the 38th and 40th levels.

In the short term, I expected the formation of wave 3 or c with targets around the 1.3280 and 1.3360 levels, which correspond to the 76.4% and 61.8% Fibonacci levels. These targets have been reached. Wave 3 or c is presumably complete, so I now expect a corrective wave, while the news background next week will determine the further direction of movement.

The higher-timeframe wave count looks almost ideal, even though wave 4 moved beyond the high of wave 1. However, I would like to remind you that ideal wave counts exist only in textbooks. In practice, everything is much more complicated. At the moment, I see no reason to consider alternative scenarios to the upward trend segment.

The main principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often signal changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is no and never can be 100% certainty about the direction of movement. Do not forget to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

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

EUR/USD. Smart Money. Bears Show Strength Ahead of the New Year

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The EUR/USD pair rebounded from the "bullish" imbalance zone 9 and resumed its growth, simultaneously forming another "bullish" imbalance. Thus, traders have recently received a third consecutive "bullish" signal, and already today or on Friday they may receive a fourth. At present, buy positions from imbalances 3 and 8 are showing profits of about 200 points. Traders can decide for themselves what to do with them next: wait for greater profits or close the trades. Personally, I expect further growth from the European currency and currently do not observe a single sign of a trend change to "bearish."

Last week, there was a liquidity grab from the swing of December 16, which served as the basis for the start of the decline. The decline has been very weak so far, and a liquidity grab is not a pattern—it cannot be used to open trades or draw long-term conclusions. The decline in the pair may already be completed this week, as "bullish" imbalance 10 is also a support zone for the price.

The chart picture continues to signal "bullish" dominance. The "bullish" trend remains intact; a reaction to "bullish" imbalance 3 has been received, a reaction to "bullish" imbalance 8 has been received, and a reaction to "bullish" imbalance 9 has been received. Despite the fairly prolonged decline in the European currency, the dollar has still failed to break the "bullish" trend. It had five months to do so and achieved no result. If "bearish" patterns or signs of a breakdown of the "bullish" trend appear, the strategy can be adjusted. But at the moment, nothing points to this.

The news background on Wednesday was absent, and trader activity ahead of the New Year and after Christmas remains minimal.

The bulls have had plenty of reasons for a new offensive for three months already, and all of them remain relevant. These include the "dovish" (in any case) outlook for FOMC monetary policy, Donald Trump's overall policy (which has not changed recently), the confrontation between the U.S. and China (where only a temporary truce has been reached), protests against Trump (which have swept across America three times this year already), weakness in the labor market, bleak prospects for the U.S. economy (recession), and the government shutdown (which lasted a month and a half but was clearly not factored in by traders). Thus, in my view, further growth of the pair will be entirely natural.

One should also not lose sight of Trump's trade war and his pressure on the FOMC. Recently, new tariffs have been introduced rarely, and Trump himself has stopped criticizing the Fed. But personally, I believe this is just another "temporary calm." In recent months, the FOMC has been easing monetary policy, which is why there has been no new wave of criticism from Trump. However, this does not mean that these factors no longer create problems for the dollar.

I still do not believe in a "bearish" trend. The news background remains extremely difficult to interpret in favor of the dollar, which is why I do not attempt to do so. The blue line shows the price level below which the "bullish" trend can be considered completed. Bears would need to push the price down by about 400 points to reach it, and I consider this task unachievable under the current news background and circumstances. The nearest growth target for the European currency remains the "bearish" imbalance of 1.1976–1.2092 on the weekly chart, which was formed back in June 2021.

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

On January 2, the economic calendar contains no noteworthy events. The influence of the news background on market sentiment on Friday will be absent.

EUR/USD Forecast and Trading Advice:

In my opinion, the pair may be in the final stage of the "bullish" trend. Despite the fact that the news background remains on the side of the bulls, it has been the bears who have attacked more often in recent months. Still, I do not currently see any realistic reasons for the start of a "bearish" trend.

From imbalances 1, 2, 4, and 5, traders had opportunities to buy the euro. In all cases, we saw a certain amount of growth. Opportunities to open new trend-following buy positions arose when a reaction was received from "bullish" imbalance 3, then after the reaction from imbalance 8, and later after the rebound from imbalance 9. This week, a reaction to "bullish" imbalance 10 may be received. The growth target for the euro remains the 1.1976 level. Buy positions can be kept open with stop losses moved to break-even, or managed at traders' discretion.

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

GBP/USD. Smart Money. The Pound Is Also Preparing for a "Bullish" Signal

.The GBP/USD pair rebounded from the "bullish" imbalance 11 and resumed its growth, as I had warned. At the moment, buy positions are showing a profit of about 350 points, and traders can decide for themselves what to do with them next. In my view, the "bullish" trend has not ended; the offensive that began in the first ten days of November is not yet complete. There is not a single workable "bearish" pattern in the pound that could be expected to trigger a bearish attack. On the contrary, another "bullish" pattern has appeared, which may become a support for a new bullish offensive—most likely next year.

Last week, another "bullish" imbalance 12 was formed, and today the price has worked it off. Thus, today or on Friday the price may react to it, and traders may receive a new "bullish" signal. I would like to note that the "imbalance" pattern usually consists of three candles, but in our case it can be considered to consist of four. Let me remind you that an imbalance is a "price slippage." On the chart, it is clearly visible that it took two daily candles, which the price literally flew through. Above the pound, there are practically no significant resistance zones. Thus, there are no "bearish" patterns, no reactions to bearish patterns, and no liquidity grabs from bullish swings.

The current chart picture is as follows. The "bullish" trend in the pound can be considered complete, but the "bullish" trend in the euro is not. Thus, the European currency can pull the pound upward for as long as necessary. Bulls pushed off from bullish imbalance 1, bullish imbalance 10, and bullish imbalance 11 twice. A large number of buy signals were formed. A new support zone—imbalance 12—has formed below. Thus, I still expect growth toward the yearly highs, around the 1.3765 level.

On Wednesday, the news background was absent. At the beginning of the new year, new graphical buy signals may appear, which will allow traders to open buy positions again.

In the United States, the overall news background remains such that nothing but a decline in the dollar can be expected in the long term. The situation in the U.S. remains quite difficult. The government shutdown lasted a month and a half, and Democrats and Republicans agreed on funding only until the end of January. There has been no U.S. labor market data for a month and a half, and the latest figures can hardly be considered positive for the dollar. The last three FOMC meetings ended with "dovish" decisions, and the latest labor market data allows for a fourth consecutive easing of monetary policy in January. In my view, the bulls have everything they need to continue a new offensive and return to the yearly highs.

A "bearish" trend would require a strong and stable positive news background for the U.S. currency, which is difficult to expect under Donald Trump. Moreover, the U.S. president himself does not need a strong dollar, as the trade balance would remain in deficit in that case. Therefore, I still do not believe in a bearish trend for the pound, despite the fairly strong decline in September and October. Too many risk factors remain hanging like dead weight over the dollar. On what basis do the bears intend to push the pound further down if a bearish trend is supposedly forming now? I cannot answer this question, so I do not believe that the dollar's decline will continue. If new bearish patterns appear, a potential decline in the pound sterling can be reconsidered.

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

On January 2, the economic calendar contains no noteworthy events. The influence of the news background on market sentiment on Friday will be absent.

GBP/USD Forecast and Trading Advice:

For the pound, the picture remains favorable for traders. Three "bullish" patterns have already played out, signals have been formed, and traders can maintain buy positions. I see no informational grounds for a strong decline in the pound in the near future.

A resumption of the "bullish" trend could have been expected already from imbalance zone 1. At the moment, the pound has reacted to imbalance 1, imbalance 10, and imbalance 11. As a target for potential growth, I am considering the 1.3725 level, but the pound may rise much higher—albeit next year. If "bearish" patterns form, the trading strategy may need to be reconsidered, but this week it is more likely that another "bullish" signal will be received from imbalance 12.

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

EUR/USD. Analysis and Forecast

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Despite attempts by the EUR/USD pair to recover, it remains under pressure amid moderate strengthening of the U.S. dollar following the release of the minutes from the Federal Reserve's December monetary policy meeting. Despite short-term fluctuations, the euro is still maintaining a trajectory of solid annual growth—around 14%—supported by a noticeable divergence between the ECB's and the Fed's stances on future interest rates.

The dynamics of the U.S. currency are largely shaped by the inconsistent trade policy of Donald Trump's administration and signs of slowing economic growth in the United States. The FOMC minutes published on Tuesday once again highlighted disagreements among committee members. In particular, the interest rate was cut by only 25 basis points, which turned out to be more modest than market expectations. At the same time, the Fed tied further policy easing to a sustained decline in inflation, casting doubt on the timing of the next interest rate cut. Against this backdrop, the dollar received short-term support.

From a macroeconomic perspective, investors' attention is now focused on the upcoming U.S. data on initial jobless claims. At the same time, market activity is likely to remain limited due to seasonal factors—most trading venues will be closed on Thursday for the New Year, and Japanese markets will not reopen until the end of the week.

From a technical standpoint, the pair remains positive, as oscillators on the daily chart are in positive territory. The pair has found solid support at the 20-day SMA, currently located at 1.1725. Resistance is now at the 1.1760 level, above which the pair would accelerate toward the round level of 1.1800.

According to current data, the euro is showing the strongest gains against the New Zealand dollar, while remaining stable against most other currencies.

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

EUR/USD Forecast on December 31, 2025

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On Tuesday, the EUR/USD pair continued a very weak decline toward the 38.2% corrective level at 1.1718 after four rebounds from the resistance zone of 1.1795–1.1802. A rebound in quotes from the 1.1718 level would work in favor of the European currency and a return of the pair to the 1.1795–1.1802 level. Consolidation of the pair below 1.1718 would increase the likelihood of continued decline toward the next corrective level of 50.0% at 1.1656.

The wave situation on the hourly chart remains simple. The last completed upward wave failed to break the peak of the previous wave, and the new downward wave has not yet broken 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, while the ECB will not create any problems for the euro. The "bullish" trend will end if the pair consolidates below the 1.1718 level and the last three lows.

On Tuesday, the news background in the U.S. and the European Union remained absent, and both the previous week and the current week are more festive than working ones. Ahead of the New Year, bullish traders stopped attacking and gave the bears a chance to show themselves. Of course, few people want to trade during the New Year, which is why we are seeing a weak decline—simply to avoid standing still. Most likely, this situation in the market will persist until next year. As early as next week, economic data will begin to arrive, the market will be saturated with holidays, and it will be ready for real trading. In my opinion, we may see a new bullish offensive already at the beginning of next year.

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

Commitments of Traders (COT) Report:

During the last reporting week, professional players opened 8,884 long positions and 2,769 short positions. Sentiment in 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 is more than a twofold advantage for the bulls.

For thirty-three consecutive weeks, large players were getting rid of short positions and increasing long ones. Then the "shutdown" began, and now we are seeing the same picture: bulls continue to build long positions. Donald Trump's policies remain the most significant factor for traders, as they cause numerous problems that will have a long-term and structural impact on America—for example, 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 31, the economic calendar contains no events. The influence of the news background on market sentiment on Wednesday 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. A close below 1.1718 will allow holding the trades with a target of 1.1656. Buy trades can be opened on a rebound from the 1.1718 level with a target of 1.1795.

Fibonacci grids are built 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 31, 2025

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On the hourly chart, the GBP/USD pair on Tuesday completed another rebound from the resistance level of 1.3526–1.3539, reversed in favor of the U.S. dollar, and showed a fairly strong decline with consolidation below the 100.0% Fibonacci level at 1.3470. Thus, the decline may continue toward the 1.3437 level; however, in the support zone of 1.3437–1.3470, a reversal in favor of the British pound may follow, with growth back toward the resistance zone of 1.3526–1.3539.

The wave situation remains "bullish." The most recent completed upward wave broke the previous high, while the new downward wave has not yet been able to break the previous low. The news background for the pound has been weak in recent weeks, but the information background in the United States also leaves much to be desired. Bulls and bears spent a week in a tug-of-war and were in relative balance, but a week before the New Year, the bulls launched a new offensive that has not yet been completed.

The news background on Tuesday was virtually absent, but in the evening the minutes of the December FOMC meeting were published, which some traders had pinned certain hopes on. I would like to note right away that the rise of the U.S. dollar began a couple of hours before the start of the U.S. trading session. The Federal Reserve minutes were published nine hours later. Thus, this document could not have had any influence on trader sentiment during the day. Nevertheless, the minutes once again showed a split of opinions within the FOMC committee. The document states that the decision to cut the interest rate was made with a "dovish" majority of six votes, but even among the "doves," doubts about the correctness of such a decision were very noticeable. I remind you that as of December 10, the latest reports on the U.S. labor market, unemployment, and inflation had not yet been published—reports on which the Fed usually bases its decisions. Therefore, the doubts of many FOMC members are quite understandable. One way or another, the minutes were released at a time when the dollar's rise had already ended.

On the 4-hour chart, the pair consolidated above the 100.0% corrective level at 1.3435, which allows 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 caused a reversal in favor of the U.S. dollar and a small decline toward the support zone of 1.3369–1.3435. A rebound of quotes from the 1.3435 level would allow expectations of renewed growth in the pound.

Commitments of Traders (COT) Report:

Sentiment among the "Non-commercial" category of traders became more "bullish" over the last reporting week. The number of long positions held by speculators increased by 1,649 units, while the number of short positions decreased by 25,368. The gap between the number of long and short positions is currently essentially as follows: 61 thousand versus 110 thousand. As we can see, bears dominate in December, but the pound seems to have already exhausted its downward potential. At the same time, the situation with euro contracts is exactly the opposite. I still do not believe in a "bearish" trend for the pound.

In my view, the pound still looks less "dangerous" than the dollar. In the short term, the U.S. currency may enjoy demand in the market from time to time, but not in the long term. Donald Trump's policies have led to a sharp deterioration in the labor market, and the Fed is forced to pursue monetary easing in order to stop the rise in unemployment and stimulate job creation. For 2026, the FOMC does not plan significant monetary easing, but at the moment 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 UK:

On December 31, the economic calendar contains no entries. The influence of the news background on market sentiment on Wednesday will be absent.

GBP/USD Forecast and Trading Advice:

Selling the pair was possible after a rebound from the 1.3526–1.3539 level on the hourly chart with a target of 1.3470. The target was reached. I would not rush into new sell positions until there is a close below the 1.3437 level. I recommended buying on a rebound from the 1.3437–1.3470 level with a target of 1.3533–1.3539. The target was achieved. New buy positions are recommended after another rebound from the 1.3437–1.3470 level.

Fibonacci grids are built 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.

Recommendations for Trading on the Cryptocurrency Market for December 31

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The Bitcoin price returned to around $89,000, but then pulled back slightly. Given the end of the year, significant changes in the cryptocurrency market are unlikely in the coming days. Ether also remains below $3,000.

Among the positive factors at the beginning of the next year are whales accumulating BTC on the spot market and the fact that long-term holders stopped selling Bitcoin in December. The futures market is the only concern, as it has become the arena for speculative retail activity, the so-called crowd. Obviously, until the majority of speculators are liquidated, the market is unlikely to rise significantly.

The situation is exacerbated by high leverage on futures, which tempts inexperienced traders with the possibility of quick enrichment. This creates fertile ground for sharp fluctuations and so-called "liquidation cascades," in which mass position closures from margin calls trigger further price declines, sweeping everyone along. The history of the crypto market is full of examples. Large players will likely use this volatility to their advantage, knocking out weak hands and accumulating assets at more favorable prices.

In the current circumstances, the most reasonable strategy for long-term investors may be to wait patiently and gradually increase positions on the spot market during corrections. A focus on accumulating assets rather than speculative trading will help avoid significant losses and capitalize on future market growth.

As for the intraday strategy in the crypto market, I will continue to act on large Bitcoin and Ether drawdowns, assuming the long-term bull market continues.

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

Bitcoin

Scenario for buying

Scenario No. 1: I will buy Bitcoin today upon reaching an entry point around $88,800 with a target to rise to $89,800. Around $89,800, I will exit purchases and sell immediately on the rebound. Before buying on a breakout, make sure that the 50-day moving average is below the current price and that the Awesome Oscillator is in the zone above zero.

Scenario No. 2: Bitcoin can be bought at the lower boundary of $88,100 if there is no market reaction to its downside breakout, targeting levels of $88,800 and $89,800.

Scenario for selling

Scenario No. 1: I will sell Bitcoin today upon reaching an entry point around $88,100, with a target price of $87,200. Around $87,200, I will exit sales and buy immediately on the rebound. Before selling on a breakout, make sure that the 50-day moving average is above the current price and that the Awesome Oscillator is in the zone below zero.

Scenario No. 2: Bitcoin can be sold from the upper boundary of $88,800 if there is no market reaction to its breakout to the upside, targeting levels of $88,100 and $87,200.

Ethereum

Scenario for buying

Scenario No. 1: I will buy Ether today upon reaching an entry point around $2,987 with a target to rise to $3,031. Around $3,031, I will exit purchases and sell immediately on the rebound. Before buying on a breakout, make sure that the 50-day moving average is below the current price and that the Awesome Oscillator is in the zone above zero.

Scenario No. 2: Ether can be bought at the lower boundary of $2,965 if there is no market reaction to its downside breakout, targeting levels of $2,987 and $3,031.

Scenario for selling

Scenario No. 1: I will sell Ether today upon reaching an entry point around $2,965 with a target fall to $2,921. Around $2,921 I will exit sales and buy immediately on the rebound. Before selling on a breakout, make sure that the 50-day moving average is above the current price and that the Awesome Oscillator is in the zone below zero.

Scenario No. 2: Ether can be sold from the upper boundary of $2,987 if there is no market reaction to its breakout to the upside, targeting levels of $2,965 and $2,921.

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

South Korea plans to take up the issue of stablecoins

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While Bitcoin and Ethereum are preparing to finish the year without any major swings within the range they traded almost all of December, South Korea is expected to introduce strict requirements for stablecoin issuers.

According to media reports, consideration of the matter has been postponed until next year. Authorities still cannot agree on which organizations should be allowed to issue these assets. According to a Yonhap report, a bill proposed by the Financial Services Commission, titled the "Foundations of Digital Assets," would require stablecoin issuers to hold reserve assets in bank deposits or government bonds. The proposal would also oblige issuers to transfer 100% of their outstanding reserve assets to custodians such as banks. With this measure, South Korea aims to prevent the spread of risks from a stablecoin issuer's bankruptcy to investors.

Discussions concern not only reserve structures but also the types of institutions that would be permitted to issue stablecoins. Options under consideration include allowing only banks to issue them or permitting other financial institutions that meet certain criteria. Experts say strict requirements for stablecoin issuers in South Korea are driven by a desire to protect investors and ensure financial system stability in light of crypto-market shocks caused by the collapse of some algorithmic stablecoins.

Tight stablecoin regulation could significantly affect South Korea's crypto market. On one hand, it could boost confidence in digital assets and encourage wider adoption among institutional investors. On the other hand, strict constraints could stifle innovation and limit competition, potentially reducing interest in the crypto market.

The proposal also provides that digital asset service providers would be required to disclose information, comply with service terms and advertising standards comparable to those applied in traditional finance. In addition, in case of hacks or system failures, providers could be held liable for damages regardless of fault, similar to existing rules for online retailers.

Trading recommendations

Bitcoin technicals

Buyers are currently targeting a return to $89,630, which opens a direct path to $91,300 and then $93,200. The farthest target is the high near $95,000; breaking that would signal attempts to return to a bull market. In case of a decline, buyers are expected at $87,400. A drop below that area could quickly push BTC toward $85,500. The farthest downside target is $83,500.

Ethereum technicals

A clear hold above $2,997 opens a direct path to $3,105. The farthest target is the high near $3,233; surpassing it would indicate strengthening bullish sentiment and renewed buyer interest. In case of a decline, buyers are expected at $2,887. A drop below that area could quickly push ETH toward $2,763. The farthest downside target is $2,684.

What's on the chart

• The red lines represent support and resistance levels, where price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.

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

USD/JPY: Simple Trading Tips for Beginner Traders on December 31. Review of Yesterday's Forex Trades

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Trade review and tips for trading the Japanese yen

The test of the price at 155.98 coincided with the moment when the MACD indicator was just beginning to move up from the zero mark, confirming the correct entry point for buying the dollar. As a result, the pair rose by more than 40 pips.

Yesterday's encouraging readings on U.S. house price growth and the Chicago PMI provided substantial support to the U.S. dollar. Even the dovish tone of the December FOMC minutes did not dent market confidence in the U.S. economy's stability. The currency market reacted immediately, with the U.S. dollar strengthening against the Japanese yen. Investors revised their forecasts, believing that strong economic data could prompt the Federal Reserve to act more cautiously and keep rates unchanged in the near term. However, it should be borne in mind that the impact of such macro data on currency markets may be temporary. Long-term trends are shaped by more important reports such as inflation and labor market data. Therefore, despite the positive reaction to yesterday's figures, it is necessary to continue closely monitoring current events and the Bank of Japan's behavior and future statements.

For the intraday strategy, I will primarily rely on implementing Scenarios #1 and #2.

Buy scenarios

Scenario #1: I plan to buy USD/JPY today when the entry point around 156.66 (green line on the chart) is reached, targeting a rise to 156.89 (thicker green line on the chart). Around 156.89, I will exit longs and open shorts in the opposite direction (aiming for a 30–35-pip move back from that level). It is best to return to buying the pair on corrections and significant pullbacks. Important! Before buying, ensure the MACD indicator is above zero and has just begun to rise.

Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of 156.50 while the MACD is in the oversold area. This will limit the pair's downside potential and trigger a reversal up. Expect a rise toward 156.66 and 156.89.

Sell scenarios

Scenario #1: I plan to sell USD/JPY today only after the 156.50 level is broken (red line on the chart), which should trigger a rapid decline in the pair. The key target for sellers will be 156.25, where I will exit shorts and immediately open longs in the opposite direction (aiming for a 20–25-pip reversal from that level). It is better to sell as high as possible. Important! Before selling, ensure the MACD indicator is below zero and has just begun to decline.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of 156.66 while the MACD is in the overbought area. This will limit the pair's upside potential and produce a reversal down. Expect declines to 156.50 and 156.25.

What is on the chart:

• Thin green line – entry price at which you can buy the instrument;
• Thick green line – approximate price where you can set Take Profit or lock in profits, since further rise above this level is unlikely;
• Thin red line – entry price at which you can sell the instrument;
• Thick red line – approximate price where you can set Take Profit or lock in profits, since further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important

Beginner forex traders must be very cautious when making entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

Remember that for successful trading, you need a clear trading plan like the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

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

GBP/USD: Simple Trading Tips for Beginner Traders on December 31. Review of Yesterday's Forex Trades

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Trade review and tips for trading the British pound

The test of the price at 1.3506 occurred when the MACD indicator was just beginning to move down from the zero mark, confirming the correct entry point for selling the pound. As a result, the pair fell by 30 pips.

Strong readings in the U.S. house price index and the Chicago PMI yesterday provided robust support to the U.S. dollar against the British pound. The published data reinforced investors' confidence in the resilience of the U.S. economy, despite ongoing debate about a possible slowdown in economic growth. The house price index, which showed unexpectedly strong growth, indicated persistent demand for real estate, an important gauge of overall economic health. The Chicago PMI, reflecting improved business activity in the region's manufacturing sector, confirmed that U.S. industry continues to adapt to changing conditions and shows signs of recovery.

Given the absence of key fundamental data for the UK today, the focus shifts entirely to technical analysis. This means market participants will closely monitor price action, chart patterns, and support and resistance levels to forecast the pound's next moves. In such conditions, short-term strategies and the ability to react quickly to shifts in market sentiment become particularly important. Traders using technical analysis will rely on indicators such as RSI, MACD, and the Stochastic Oscillator to identify potential entry and exit points. However, it should not be forgotten that even the best technical analysis cannot entirely eliminate the impact of unexpected news or geopolitical developments. At any moment, information may emerge that dramatically changes market dynamics and invalidates prior forecasts.

For the intraday strategy, I will primarily rely on implementing Scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy the pound today at an entry point around 1.3469 (green line on the chart), targeting a rise to 1.3495 (thicker green line on the chart). Around 1.3495, I will exit long positions and open short positions in the opposite direction (aiming for a 30–35-pip move back from that level). A strong rise in the pound today is unlikely. Important! Before buying, ensure the MACD indicator is above zero and just beginning to rise.

Scenario #2: I also plan to buy the pound today if two consecutive tests of 1.3451 occur while the MACD indicator is in the oversold area. This will limit the pair's downside potential and trigger a reversal up. Expect a rise toward 1.3469 and 1.3495.

Sell Scenarios

Scenario #1: I plan to sell the pound today after the 1.3451 level is broken (red line on the chart), which should trigger a rapid decline in the pair. The sellers' key target will be 1.3421, where I will exit shorts and immediately open longs in the opposite direction (aiming for a 20–25-pip reversal from that level). Pound sellers may reappear as part of a correction. Important! Before selling, ensure the MACD indicator is below zero and is just beginning to fall from it.

Scenario #2: I also plan to sell the pound today if there are two consecutive tests of 1.3469 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and cause a reversal down. Expect declines to 1.3451 and 1.3421.

What is on the chart:

• Thin green line – entry price at which you can buy the instrument;
• Thick green line – approximate price where you can set Take Profit or lock in profits, since further rise above this level is unlikely;
• Thin red line – entry price at which you can sell the instrument;
• Thick red line – approximate price where you can set Take Profit or lock in profits, since further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important

Beginner forex traders must be very cautious when making entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

Remember that for successful trading, you need a clear trading plan like the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

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

EUR/USD: Simple Trading Tips for Beginner Traders on December 31. Review of Yesterday's Forex Trades

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Trade review and tips for trading the euro

The test of the price at 1.1769 occurred when the MACD indicator was beginning to move down from the zero mark, confirming the correct entry point for selling the euro. As a result, the pair fell by 20 pips.

Undoubtedly, the strengthening of the US dollar, supported by positive reports on rising house prices and the Chicago business activity index, had a significant impact on current currency market trends. However, year-end timing, persistent uncertainty about the pace of US economic growth, geopolitical tensions, and potential shifts in central bank strategies could again put pressure on the US currency next year. Yesterday's minutes from the December Federal Reserve meeting showed that policymakers are not abandoning the idea of further rate cuts, which will continue to weigh on the dollar in the medium term.

Today, the euro will likely remain under pressure, since no economic data for the Eurozone is scheduled in the first half of the day. In the absence of fresh figures reflecting the region's economy, investors will have to rely on the already set trajectory. The lack of reports may further strengthen the dollar at year-end.

For the intraday strategy, I will mostly rely on the implementation of Scenarios #1 and #2.

Buy scenarios

Scenario #1: Today, I plan to buy the euro if the price reaches around 1.1750 (green line on the chart), targeting a rise to 1.1771. At 1.1771, I plan to exit the market and also sell the euro in the opposite direction, aiming for a 30–35-pip move from the entry point. Expect euro gains only as part of a minor correction. Important: before buying, make sure the MACD is above zero and has just started to rise.

Scenario #2: I also plan to buy the euro if there are two consecutive tests of 1.1733 while the MACD is in the oversold area. This will limit the pair's downside potential and trigger a reversal up. Expect a rise toward 1.1750 and 1.1771.

Sell scenarios

Scenario #1: I plan to sell the euro once it reaches 1.1733 (the red line on the chart). The target will be 1.1714, where I will exit short positions and immediately buy in the opposite direction (aiming for a 20–25-pip reversal from that level). Some downward pressure on the pair may be noticeable in the first half of the day. Important: before selling, make sure the MACD is below zero and has just begun to decline.

Scenario #2: I also plan to sell the euro if there are two consecutive tests of 1.1750 while the MACD is in the overbought area. This will limit the pair's upside potential and produce a reversal down. Expect a decline to 1.1733 and 1.1714.

What is on the chart:

• Thin green line – entry price at which you can buy the instrument;
• Thick green line – approximate price where you can set Take Profit or lock in profits, since further rise above this level is unlikely;
• Thin red line – entry price at which you can sell the instrument;
• Thick red line – approximate price where you can set Take Profit or lock in profits, since further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important

Beginner forex traders must be very cautious when making entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

Remember that for successful trading, you need a clear trading plan like the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

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

Intraday Strategies for Beginner Traders on December 31

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The euro, the pound, and the Japanese yen have weakened sharply against the U.S. dollar.

Support for the U.S. dollar provided by strong readings in the U.S. house price index and the Chicago PMI is undoubtedly an important factor affecting the current dynamics of the currency market. However, the key point will be the Federal Reserve's reaction to these data. If the Fed sees these figures as confirmation of the resilience of economic growth and inflation, it may return to a cautious policy stance, thereby supporting the dollar. On the other hand, the data are not so strong as to draw conclusions on their own, so the committee's stance is unlikely to change on that basis alone.

Today, pressure on the euro and the pound may persist, since there is no statistical data in the first half of the day. The lack of fresh economic information leaves traders reliant on external factors and prior data. Also, bear in mind that today is December 31, and a few participants are likely to want to intervene significantly in the market. In any case, sharp moves in either direction cannot be ruled out, as any unforeseen events can force traders to act.

If the data match economists' expectations, it is better to act using the Mean Reversion strategy. If the data turn out to be much higher or lower than economists' expectations, the Momentum strategy is preferable.

Momentum Strategy (breakout):

For EUR/USD

• Buying on a breakout of 1.1754 may lead to a rise in the euro toward 1.1779 and 1.1807;
• Sell on a breakout of 1.1729 may lead to a drop in the euro toward 1.1706 and 1.1684;

For GBP/USD

• Buying on a breakout of 1.3471 may lead to a rise in the pound toward 1.3500 and 1.3531;
• Sell on a breakout of 1.3445 may lead to a drop in the pound toward 1.3411 and 1.3374;

For USD/JPY

• Buying on a breakout of 156.68 may lead to a rise in the dollar toward 157.05 and 157.40;
• Sell on a breakout of 156.45 may lead to a dollar sell-off toward 155.99 and 155.67;

Mean Reversion Strategy (pullback):

For EUR/USD

• Look for short positions after a failed breakout above 1.1754 on a return below that level;
• Look for long positions after a failed breakout below 1.1730 on a return to that level;

For GBP/USD

• Look for shorts after a failed breakout above 1.3471 on a return below that level;
• Look for longs after a failed breakout above 1.3449 on a return to that level;

For AUD/USD

• Look for shorts after a failed breakout above 0.6704 on a return below that level;
• Look for longs after a failed breakout above 0.6686 on a return to that level;

For USD/CAD

• Look for shorts after a failed breakout above 1.3712 on a return below that level;
• Look for longs after a failed breakout above 1.3688 on a return to that level.

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

Market weary of Magnificent Seven stocks

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Strong corporate profits can make up for many sins. Neither Donald Trump's policy uncertainty, nor the largest tariffs since the 1930s, nor the split within the Federal Reserve prevented the S&P 500 from posting a third consecutive double-digit annual gain — this time 17%. Credit goes to impressive corporate results; their undervaluation allowed the broad index to prosper. It's no surprise that Wall Street analysts are raising earnings forecasts for 2026.

The past year was marked by the fading glory of the Magnificent Seven. Because of high market concentration, those companies continued to move the S&P 500, but their influence gradually diminished. NVIDIA's 40% share gain is impressive at first glance, but it ranks only 71st. Data-storage stocks outpaced it by a wide margin.

Performance of the top S&P 500 companies

At the year's end, there was active rotation. Investors trimmed positions in tech giants and bought banks and other firms poised to benefit from sustained economic growth and slowing inflation. The main drivers were inflated fundamental valuations and doubts about AI's ability to generate returns commensurate with the investments.

That is not to say the Magnificent Seven's dominance is entirely over. For example, cuts to Tesla's fourth-quarter vehicle-sales forecasts weighed on both the company's shares and the S&P 500. Sales are expected to fall 8% in 2025, from 1.79 million to 1.64 million — the second consecutive annual decline.

Negative news from Tesla, coupled with the Fed split, prevented the broad index from resuming a Christmas rally. History shows that after such a rally, the S&P 500 rises in January by an average of 1.4% and by an average of 10.4% over the following 12 months.

Market expectations for the federal funds rate

According to the minutes of the December FOMC meeting, 6 of the Committee's 19 members disagreed with the decision to cut the federal funds rate by 25 basis points to 3.75%. Some of those who supported the Fed's decision had doubts and might not have backed it otherwise. It was suggested that easing monetary policy sent the wrong signal — namely, that the central bank was no longer putting inflation control first.

The split within the Federal Reserve increases the likelihood of a prolonged pause in the cycle of monetary easing. Not great news for stocks. Their reluctance to move decisively in either direction is driven by low trader activity: trading volumes in recent days are 40–44% below 20-day averages.

Technically, the S&P 500 shows a combination of a doji bar and an inside bar on the daily chart. Traders should consider a strategy of placing pending buy orders for the broad index at 6,925 and sell orders at 6,885.

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

How to Trade the GBP/USD Currency Pair on December 31? Simple Tips and Trade Analysis for Beginners

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Trade review for Tuesday:

1H chart of GBP/USD

The GBP/USD pair showed a relatively strong downward move on Tuesday by holiday-period standards and settled below the ascending trend line. It is hard to call Tuesday's volatility high, but it was still higher than over the several days prior. The macroeconomic and fundamental backdrop remained absent. Thus, on December 31, one could say the uptrend has shifted to a downtrend; we would prefer to wait until the holidays end before drawing such conclusions. Yesterday, there were no particular reasons for the dollar to rise. But it can also not fall constantly. We treat such moves as random.

5M chart of GBP/USD

On the 5-minute timeframe, the British pound gave traders a present on December 30. During the European session, the price rebounded precisely from the 1.3529 level, thereby producing a sell signal. A few hours later, the pair fell to 1.3446 and hit it with a 2-pip error. Beginner traders could have taken this signal and earned about 60 pips, which is a brilliant result during the New Year holidays.

How to trade on Wednesday:

On the hourly timeframe, the GBP/USD pair has settled below the trend line, so formally, technical analysis points to further decline of the British currency at the start of the next year. However, there are no global reasons for medium-term dollar strength, so we expect movement only to the north. Overall, we expect the resumption of the global 2025 uptrend, which could take the pair to 1.4000 within the next couple of months.

On Wednesday, beginner traders may consider new long positions if the price bounces from the 1.3437–1.3446 area, with targets at 1.3529–1.3543. Short positions will become relevant on a settlement below the 1.3437–1.3446 area, with targets at 1.3319–1.3331.

On the 5-minute timeframe, you can trade the following levels now: 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. No significant events are scheduled in the UK or the US on Wednesday, and market volatility may remain weak. In the US, a report on initial jobless claims will be released today, but it is a secondary indicator. Trade today only using technicals.

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 31? Simple Tips and Trade Analysis for Beginners

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Trade review for Tuesday:

1H chart of EUR/USD

The EUR/USD currency pair continued to trade in holiday mode on Tuesday. Over the past several days, the euro slid down, and yesterday it settled below the ascending trend line. How should one treat such a move? On one hand, it cannot be called a "flat" — the price is moving down rather than sideways. On the other hand, volatility is not just low; it is minimal. On the other hand, the upward trend is broken, and a reasonably strong sell signal has been generated. We believe that all Christmas and New Year trading days can be, to some extent, excluded from the general stream of quotes. What can traders expect after the sell signal formed on December 31? Twenty to thirty pips down? Those can, of course, be captured on the 5-minute timeframe, but one should remember that the main market condition indicator is volatility. If there are no movements in the market, no signal will bring profit.

5M chart of EUR/USD

On the 5-minute timeframe on Tuesday, no trading signals formed; the macro and fundamental background was absent, and the overall daily volatility amounted to 36 pips. A sell signal was formed overnight because the price settled below the area 1.1745–1.1754. Thus, beginner traders can open short positions aiming for a profit of 20–30 pips if they wish to trade on December 31.

How to trade on Wednesday:

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

On Wednesday, beginner traders can trade from the area 1.1745–1.1754. A consolidation above this area will again make long positions relevant with a target of 1.1808. A consolidation below this area allows opening short positions with a target of 1.1666.

On the 5-minute timeframe, consider the levels 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, 1.1970–1.1988. No important events or releases are scheduled in the Eurozone or the U.S. for Wednesday. Therefore, 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.

Trading Signals for EUR/USD for December 30-31, 2025: sell below 1.1768 (21 SMA - 5/8 Murray)

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EUR/USD is trading around 1.1740 below the 21SMA and within the downtrend channel formed since December 22. The H4 chart shows that the euro has downside potential and could reach the 4/8 Murray around 1.1718.

If the euro reaches a support zone around the bottom of the downtrend channel located at 1.1725 or around 4/8 Murray, it could be seen as an opportunity to open long positions.

The euro is expected to continue its decline in the coming days and could reach the 200 EMA around 1.1691 and could even reach the 2/8 Murray around 1.1596.

A technical rebound and consolidation above the December 18 low could give the euro a chance to resume its bullish cycle, and we could expect it to reach 5/8 Murray at 1.1779. EUR/USD could even reach 6/8 Murray at 1.1840.

Our trading plan for the next few hours is to sell the euro below 1.1768 with targets at 1.1718 and 1.1691.

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

Trading Signals for GOLD for December 30-31, 2025: buy above $4,325 (21 SMA - 0/8 Murray)

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Gold is trading around $4,357, below the 8/8 Murray and within the upward trend channel formed since December 10. The H4 chart shows consolidation above $4,325.

Technically, gold is under bearish pressure and is likely to continue its negative cycle in the coming days. We expect it to reach the 200 EMA around 4,269 and then finally reach the 7/8 Murray level around $4,218.

If gold consolidates within the uptrend channel in the coming hours and if the price remains above $4,315, the outlook could be positive, and we could expect it to reach $4,375. Finally, it could reach the 21 SMA around $4,434.

Gold has left a double top pattern formation when it reached the $4,550 levels, which gave gold a strong technical correction. Looking at the facts, it is likely that the bearish sequence will continue in the coming days until the instrument reaches the psychological level of $4,000.

The Eagle indicator is approaching oversold levels, but gold could still be at risk of further declines in the coming days, so we should be cautious and could sell in the event of a pullback below the 0/8 Murray or below the 21 SMA.

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

Trading Signals for ETHEREUM for December 30-31, 2025: buy above $2,950 (21 SMA - 200 EMA)

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Ethereum has been consolidating above $2,900 over the last few days. As shown on the H4 chart, ETH/USD managed to gain momentum and is showing positive signs, trading above $2,955. The 21 SMA is located in this area, adding to the positive outlook as it is within the uptrend channel formed since December 15.

If Ethereum maintains its price above $2,950 in the coming hours, the outlook could be positive, and we could look for opportunities to open long positions, with targets at $3,039 and finally at the 2/8 Murray at $3,125.

A sharp break above 2/8 Murray could accelerate the upward movement of the ETH/USD pair, potentially reaching the top of the uptrend channel around $3,200 and ultimately reaching the 3/8 Murray at around $3,375.

If the 200 EMA located around $3,039 acts as a barrier, as it did on December 28, we could expect ETH to resume its bearish cycle. In this case, it could decisively break its trend channel formed since December 15, and we could expect a drop towards the psychological level of $2,500.

The Eagle indicator is showing a positive signal, so as long as the price trades within the uptrend channel, it will be seen as an opportunity to open long positions.

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

Trading Signals for BITCOIN for December 30-31, 2025: buy above $87,500 (21 SMA - 2/8 Murray)

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Bitcoin is trading around $88,635 within the uptrend channel formed since December 18, above the 2/8 Murray and the 21 SMA with a slightly bullish bias but showing signs of a technical reversal.

If Bitcoin consolidates above $87,500 in the coming hours, it is expected to continue its bullish cycle and could reach the 200 EMA around $89,818 and finally reach the top of the uptrend channel around $92,350.

A sharp break above the uptrend channel could allow Bitcoin to accumulate a more sustained recovery, and we could expect it to reach Murray's 3/8 around $93,750. Eventually, Bitcoin is expected to reach the psychological level of $100,000 in the coming weeks.

Conversely, if Bitcoin consolidates below $87,500, the outlook could be negative, and it could quickly reach 1/8 of Murray around $81,250.

The Eagle indicator is approaching overbought levels, so we must be careful if the price is hovering around $92,000, as a technical correction could occur below this zone.

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

Overview of the GBP/USD pair. December 31. Trump prevents the dollar from rising

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The GBP/USD currency pair traded within a narrow range on Tuesday. The pound has not often been flat lately, but a holiday week is a holiday week. Since December 23, the price has been between 1.3474 and 1.3533 and is not going to leave this range until the New Year bells ring. Thus, we do not expect strong, trending moves either today or on Friday.

An upward trend for the British pound remains, clearly visible on the 4-hour, daily, and even weekly timeframes. Many analysts now doubt the pound's ability to continue rising in 2026. We want to reassure them a little. First, remember that we are not opposed to a downtrend or any strengthening of the US currency. If the trend (local or global) begins to change, and factors supporting the dollar appear, we will be the first to point out that dollar strength should be expected. However, the point is that the trend is not changing, and there are no growth factors for the dollar.

With great stretching, one could attribute the Bank of England's potential monetary easing in 2026 as a factor favoring the dollar. However, recall that in the second half of 2025, the dollar clearly rose more than it deserved. We have repeatedly noted that the pound was falling this autumn with or without reason. Therefore, we consider such a sharp decline in the pair to be illogical and unfair.

Now, the price has settled above the Senkou Span B line on the daily timeframe, and the EUR/USD pair is acting as a support for the pound. Explanation: The euro and the pound historically show a high degree of correlation. A drop in the euro is very rarely not accompanied by a decline in the pound, and vice versa. Since the euro is on the verge of breaking out of its sideways channel and resuming an uptrend, it is extremely hard to imagine a pound decline in 2026. The pound also has its own growth drivers. In the second half of the year, we saw a classic three-wave correction, which is therefore most likely complete. Although the BoE intends to continue monetary easing, it is still not a competitor to the Federal Reserve.

We remind you that Fed policy is much more important than BoE policy. The dollar remains the world reserve currency, so the fate of the "safe haven" and the "safest asset" depends on the Fed's stance and policy. In recent years, the dollar has been losing its "safe" status, and the global trend could have changed back in 2022, when the pound dropped almost to price parity with the dollar. No trend is eternal. With the arrival of Donald Trump, who absolutely does not need an expensive dollar, the probability of the US currency's decline has sharply increased.

What do we have in the end? GBP/USD has been in an uptrend for three years, and Trump is doing everything to ensure the dollar continues to fall.

The average volatility of GBP/USD over the last 5 trading days is 57 pips. For the pound/dollar pair, this value is "medium-low." On Wednesday, December 31, we therefore expect movement inside the range bounded by 1.3423 and 1.3537. The higher linear regression channel has turned up, indicating trend recovery. The CCI indicator entered the oversold area 6 times over recent months and formed numerous "bullish" divergences, which repeatedly warned of a resumption of the uptrend.

Nearest support levels:

S1 – 1.3428

S2 – 1.3367

S3 – 1.3306

Nearest resistance levels:

R1 – 1.3489

R2 – 1.3550

Trading recommendations:

The GBP/USD pair is attempting to resume the 2025 uptrend, and its long-term prospects remain unchanged. Trump's policy will continue to put pressure on the dollar, so we do not expect the dollar to strengthen. Thus, long positions with a target of 1.3550 remain relevant for the near term while the price is above the moving average. A price located below the moving average line suggests considering small shorts with targets of 1.3428 and 1.3367 on technical grounds. From time to time, the US currency shows corrections (in the global context), but for the trend to strengthen, it needs signs of an end to the trade war or other global positive factors.

Explanations for the illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same way, the trend is currently strong;
• The moving average line (settings 20,0, smoothed) defines the short-term tendency and the direction in which one should currently trade;
• Murray levels are target levels for moves and corrections;
• Volatility levels (red lines) are the probable price channel in which the pair will spend the next 24 hours, based on current volatility readings;
• The CCI indicator — its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.

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

Overview of the EUR/USD pair. December 31. Happy upcoming New Year!

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The EUR/USD currency pair continued to trade in a festive mode on Tuesday. There is virtually no movement in the market; the fundamental and macroeconomic background is absent, and the market will close today. Thursday is a holiday. Thus, the current week truly qualifies as a "holiday" week. It is not surprising that traders are in no hurry to open new trades and are thinking more about Olivier salad and champagne than about the prospects for the EUR/USD pair until the end of the year.

We fully support this option, because rest is also necessary. The year was eventful; everyone earned a rest. Fears about a "thin" market and "wild moves" over the New Year holidays did not materialize, which is also very good. We are even somewhat surprised that some analysts are trying to analyze the current "convulsions" in the market and offer forecasts. The market is currently in total flatness. On the daily timeframe, it has persisted for 6 months, and it is worth noting that a flat is not an accidental event. A flat is a period of time when market makers accumulate positions for a new trend or distribute their positions before a trend change.

Thus, a flat is an excellent time for opening new positions. We said that a reversal upward should be expected around the 1.1400 level. The price failed to reach 1.1400, but still reversed around it. It has now been trading for several weeks near the upper boundary of the sideways channel 1.1400–1.1830, so we almost do not doubt that a breakout will occur at the beginning of the new year.

On the lower timeframes, also a flat. In fact, one could even say it began on December 12. Recall that during the week of December 15–19, a considerable amount of important information was published in the US, and important central bank meetings were held in the EU and the UK. And all that information proved unworthy of action by traders. Since December 23, we have observed another flat between the levels 1.1750 and 1.1809. Thus, there is essentially nothing to analyze. At the end of the year, the market clearly does not wish to force events.

As for the prospects of the EUR/USD pair, our position remains unchanged — the dollar will fall in 2026 as well. There are no fundamental reasons for its growth in the medium term. Throughout the entire second half of 2025, the dollar was unable to correct against the euro by more than 23.6%. Even that correction was possible thanks to the flat. The European Central Bank does not plan a single round of monetary policy easing next year, while the Fed will almost certainly cut the key rate, and possibly more than once. In addition, do not discount the "Trump factor", weakness of the US labor market, falling inflation in the US, and the change of the Fed chair in May. All these factors will push the dollar to a new decline.

The average volatility of the EUR/USD pair over the last five trading days as of December 31 is 39 pips and is characterized as "low." We expect the pair to move between 1.1728 and 1.1806 on Wednesday. The higher linear regression channel is turning up, but the flat on the daily timeframe persists. The CCI indicator entered the oversold area twice in October (!!!), but in early December, it visited the overbought area. We have already seen a slight pullback.

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 above the moving average line; on all higher timeframes, the uptrend is intact, while on the daily timeframe, the flat continues for the sixth month in a row. The global fundamental background still matters greatly for the market, and it remains negative for the dollar. Over the past six months, the dollar has occasionally shown weak growth, but exclusively within the sideways channel. It has no fundamental basis for long-term strengthening. With the price located below the moving average, one can consider small short positions targeting 1.1728 on purely technical grounds. Above the moving average, long positions remain relevant with a target of 1.1830 (the upper line of the flat on the daily TF), which has already effectively been worked out. Now the flat needs to end.

Explanations for the illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same way, the trend is currently strong;
• The moving average line (settings 20,0, smoothed) defines the short-term tendency and the direction in which one should currently trade;
• Murray levels are target levels for moves and corrections;
• Volatility levels (red lines) are the probable price channel in which the pair will spend the next 24 hours, based on current volatility readings;
• The CCI indicator — its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.

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

Trading Recommendations and Trade Analysis for GBP/USD on December 31. The Pound Ends the Year with a Decline

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Analysis GBP/USD 5M

The GBP/USD currency pair continued to move on Tuesday, with minimal volatility and no macroeconomic or fundamental background. Therefore, traders had neither grounds nor desire to open positions. The technical picture has not changed, and there is no news to analyze.

An upward trend persists on the hourly timeframe despite the trendline being broken. The pair failed to settle below the critical line. Thus, technically, the pound's upward movement can resume at any moment. It is unlikely to resume this week, however, as the events calendar is empty and the New Year holidays continue worldwide. Nevertheless, the pair's medium-term prospects are clear. Even if the price breaks the Kijun-sen line, it will at most lead to a decline to the Senkou Span B line. Recall that any flat tends to fall out of the overall trend. In other words, a trendline break inside a flat is not a signal of a trend change.

On the 5-minute timeframe, one trading signal was generated on Tuesday, but it produced no profit. During the American session, the pair settled below the critical line for an hour but could not continue the decline.

COT Report

COT reports for the British pound show that commercial traders' sentiment has been changing constantly in recent years. The red and blue lines representing net positions of commercial and non-commercial traders frequently cross and are usually close to zero. Currently, the lines are diverging, but the dominant players are now non-commercial traders with short positions. Speculators increasingly sell the pound, but, as noted, it does not matter how low the demand for the pound is. Demand for the US dollar is often even lower.

The dollar continues to decline due to Donald Trump's policies, as seen clearly 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, cut rates over the next 12 months. Demand for the dollar will fall. 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 the reason was one: Donald Trump's policy. Once this cause is neutralized, the dollar may start to strengthen, but when that will happen is unknown.

Analysis GBP/USD 1H

On the hourly timeframe, the GBP/USD pair continues to form an upward trend, but the market is currently in a holiday pause and is flat. We believe that the pound's mid-term rise will continue regardless of the local macroeconomic and fundamental background. The trend for the pound remains upward on almost all timeframes. However, until January 5, we are unlikely to see interesting market moves.

For December 31, 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, 1.3584. The Senkou Span B line (1.3421) and Kijun-sen (1.3474) may also be sources of signals. It is recommended to move the stop loss to breakeven after the price moves 20 pips in the intended direction. Ichimoku lines may shift during the day and should be considered when determining signals.

No important events or reports are scheduled in the UK or the US on Wednesday. The pair will continue to trade very weakly, and the possible direction can only be determined by technical factors.

Trading Recommendations:

Today, traders may consider selling if the price settles below the critical line with targets at 1.3437 and the Senkou Span B line. Long positions become relevant on a bounce from the Kijun-sen line with targets at 1.3533–1.3548.

Explanations of the 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 – Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour. 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 – the size of the net position of each category of traders.

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

Trading Recommendations and Trade Analysis for EUR/USD on December 31. Euro Slips Down

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Analysis EUR/USD 5M

The EUR/USD currency pair traded with minimal volatility on Tuesday. The Christmas and New Year holidays are ongoing worldwide, so there is virtually no movement in the FX market. The macroeconomic and fundamental backdrop is absent. Therefore, strong trend moves are unlikely before year-end. This week, the Eurozone and US event calendars are empty.

Technically, an upward tendency persists on the hourly timeframe despite the trendline being broken. The trendline was breached, but the price failed to settle below the 1.1750–1.1760 area and the critical line. Thus, the upward trend remains. However, stronger and more interesting moves can be expected only next week, once the market has thoroughly enjoyed the holidays and weekends.

On the 5-minute timeframe, one trading signal was generated on Tuesday; you can judge its quality yourself. The price bounced off the 1.1750–1.1760 area only to fail to move up even one pip. Formally, there was no bounce. Perhaps it will occur today, but even a 20–30-pip move in the desired direction is hard to count on now.

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; bears briefly moved into a zone of superiority at the end of 2024 but very quickly lost it. Since Trump took office for a second time as US president, only the dollar has been falling. We cannot say with 100% probability that the dollar's decline will continue, but current world developments point toward this scenario. The red and blue lines are diverging, indicating powerful bullish dominance.

We still see no fundamental factors supporting the euro's strengthening, while there remain sufficient factors for the dollar's decline. The global downtrend for the dollar persists, but what does the past 17 years' price action matter now? Over the past three years, only the euro has been rising, and that is also a trend.

The positions of the indicator's red and blue lines continue to indicate the preservation and strengthening of a bullish trend. Over the last reporting week, the number of longs in the "Non-commercial" group rose by 8,900 and shorts by 2,700. Accordingly, the net position increased by 6,200 contracts over the week.

Analysis EUR/USD 1H

On the hourly timeframe, the EUR/USD pair maintains an upward trend. The upper line of the sideways channel 1.1400–1.1830 has been tested twice, so in the near term, we may see a technical decline, as the flat persists on the daily timeframe. However, the 1.1750–1.1760 area prevents the pair from falling below it, and the market currently lacks the strength for moves greater than 30 pips per day.

For December 31, we highlight the following trading 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 Senkou Span B (1.1710) and Kijun-sen (1.1755). Ichimoku indicator lines may shift throughout the day and should be considered when determining trading signals. Remember to move the stop loss to breakeven if the price moves 15 pips in the correct direction. This will protect against potential losses if the signal proves false.

No important events or releases are scheduled in the Eurozone or the US on Wednesday. Movements may again be weak and non-trending during the day.

Trading Recommendations:

On Wednesday, traders can trade from the 1.1750–1.1760 area. A bounce from this area will make long positions relevant with targets in the 1.1800–1.1830 area. A consolidation below it will lead to a decline targeting the Senkou Span B line. But current volatility may be insufficient even for a minimal move.

Explanations of the 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 – Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour. 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 – the size of the net position of each category of traders.

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