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EUR/USD Forecast on December 23, 2025

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On Monday, the EUR/USD pair recorded its third rebound from the 38.2% Fibonacci retracement level at 1.1718 and began an upward move toward the resistance level of 1.1795–1.1802. A rebound from this zone would favor the U.S. currency and lead to a moderate decline toward the 1.1718 level. A consolidation above this zone would increase the likelihood of further growth toward the next retracement level at 0.0% – 1.1919.

The wave structure on the hourly chart remains straightforward. The last completed upward wave broke above the previous wave's peak, while the new downward wave failed to break the previous low. Thus, the trend officially remains "bullish." It would be hard to call it strong, but in recent weeks bulls have regained confidence and launched fresh attacks. The easing of the Fed's monetary policy supports further euro appreciation, and the ECB will not create any problems for the single currency in the near future.

There was no notable news background on Monday, yet bulls became active for unclear reasons. However, in my view, everything is unfolding in a logical manner. The "bullish" trend persists across all trading systems and indicators, and last week's news background will not support the U.S. dollar. Last week, an abundance of information from both the European Union and the United States made the market nervous and caused sharp swings. There was simply too much information, so not everyone was able to draw the correct conclusions immediately. However, the U.S. labor market showed no recovery, despite the Nonfarm Payrolls figure being higher than traders had expected. This indicator has a certain threshold below which almost any value can be considered negative. The labor market is slowing even when 50–100 thousand new jobs are created. Thus, the November figure of 60 thousand is not positive, even though it exceeded forecasts. At the same time, the unemployment rate jumped sharply to 4.6%. Taken together, the situation for the dollar did not improve.

On the 4-hour chart, the pair previously reversed in favor of the U.S. dollar after a "bearish" divergence formed on the CCI indicator. However, yesterday on the hourly chart a reversal occurred in favor of the European currency, meaning that on the 4-hour chart the growth process may also continue toward the 0.0% Fibonacci level at 1.1829. No emerging divergences are observed on any indicator today.

Commitments of Traders (COT) report:

During the latest reporting week, professional players opened 18,446 long positions and closed 11,889 short positions. Sentiment among the "Non-commercial" group remains bullish thanks to Donald Trump and his policies, and it continues to strengthen over time. The total number of long positions held by speculators now stands at 268,000, while short positions amount to 129,000. 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 are seeing the same picture again: bulls continue to build long positions. Donald Trump's policies remain the most significant factor for traders, as they generate numerous problems that will have long-term and structural consequences for the United States—for example, the deterioration of the labor market. Despite the signing of several important trade agreements, analysts fear a recession in the U.S. economy, as well as a loss of the Fed's independence under pressure from Trump and against the backdrop of Jerome Powell's expected resignation in May next year.

News calendar for the U.S. and the European Union:

• U.S. – Change in durable goods orders (13:30 UTC).
• U.S. – Change in GDP, second estimate for Q3 (13:30 UTC).
• U.S. – Change in industrial production (13:30 UTC).

On December 23, the economic calendar contains three noteworthy entries. The impact of the news background on market sentiment on Tuesday will be felt in the second half of the day.

EUR/USD forecast and trading advice:

Selling the pair is possible if prices rebound from the 1.1795–1.1802 level on the hourly chart, with a target at 1.1718. Long positions could be opened on a rebound from the 1.1718 level with targets at 1.1795–1.1802. Today, these trades can be kept open. If prices close above the 1.1795–1.1802 level, positions can be left open with targets at 1.1829 and 1.1919.

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

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

GBP/USD Forecast on December 23, 2025

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On the hourly chart, the GBP/USD pair on Monday continued its upward movement after rebounding from the 1.3352–1.3362 support level. During the day, prices consolidated above the 1.3437 and 1.3470 levels. Thus, the growth process may continue toward the next level at 1.3539. A consolidation of quotes below the 1.3437 level would once again work in favor of the U.S. dollar and return the pair to the sideways range of 1.3352–1.3437.

The wave situation has once again turned "bullish" after the completion of the sideways phase. The last completed downward wave did not break the previous low, while the new upward wave managed to break 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 had been in a tug-of-war for a week and remained in relative balance, but a week before the New Year the bulls launched a new offensive.

The news background on Monday was weak. UK GDP came in neutral relative to traders' expectations, but the bulls found reasons for a new attack. I would like to remind you that if we look at the global economic situation and take into account the status of the dollar as the "world's reserve currency," its decline should continue. Key labor market and unemployment reports last week showed no improvement. Along with these data, it became known that U.S. inflation is slowing, which to some extent gives the Fed more room to ease monetary policy. Thus, the market expects interest rate cuts to continue in 2026. And despite similar expectations regarding the Bank of England, the dollar remains under pressure, as it is a more significant currency for the global economy than the British pound. It should also be remembered that regardless of the news background, the "bullish" trend remains intact. This is clearly visible on the hourly, 4-hour, and daily charts.

On the 4-hour chart, the pair consolidated above the 100.0% corrective level at 1.3435. Thus, the upward movement may continue toward the next Fibonacci level at 127.2% – 1.3795. No emerging divergences are observed on any indicator today.

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 8,067, while the number of short positions rose by 3,402. The gap between the number of long and short positions is now effectively as follows: 60,000 versus 135,000. As we can see, bears have dominated since early December, but the pound appears 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 occasionally enjoys demand in the market, but I believe this is a temporary phenomenon. Donald Trump's policies have led to a sharp deterioration in the labor market, and the Fed is forced to ease monetary policy in order to halt the rise in unemployment and stimulate the creation of new jobs. For 2026, the FOMC does not plan aggressive 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 UK:

• U.S. – Change in durable goods orders (13:30 UTC).
• U.S. – Change in GDP (second estimate) for Q3 (13:30 UTC).
• U.S. – Change in industrial production (13:30 UTC).

On December 23, the economic calendar contains three entries that are of some interest. The impact of the news background on market sentiment on Tuesday may be present, but in the second half of the day.

GBP/USD forecast and trading advice:

Short positions can be opened if prices close below the 1.3437 level on the hourly chart, with targets at 1.3352–1.3362. I previously recommended opening long positions on a rebound from the 1.3352–1.3362 level with targets at 1.3425 and 1.3470. These targets have been reached. Today, these trades can be kept open with a target at 1.3539.

The Fibonacci grids are plotted from 1.3470 to 1.3010 on the hourly chart and from 1.3431 to 1.2104 on the 4-hour chart.

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

Member of the ECB Executive Board Isabel Schnabel Changed Her Mind

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Meanwhile, as the European currency continues its confident rise against the U.S. dollar, European Central Bank Executive Board member Isabel Schnabel said yesterday that she does not expect interest rates to be raised in the near future. Let me remind you that at the beginning of last week she held a radically different view, stating that she did not rule out an increase in borrowing costs.

Speaking after her recent comments—which prompted investors to increase bets on higher borrowing costs next year—Schnabel said that she had not spoken about the need to raise interest rates. "At the moment, no interest rate hikes are expected in the foreseeable future," she said in a podcast released on Monday. "Rates are likely to remain stable for quite a long time, unless some unforeseen events occur."

Such statements from senior ECB officials introduce a certain degree of confusion into currency markets. Investors and traders are trying to decipher what actually lies behind these contradictory signals. On the one hand, the strengthening of the euro suggests that the market sees potential for tighter monetary policy in the euro area. On the other hand, Schnabel's words indicate that the ECB may not be rushing to raise rates, fearing negative consequences for economic growth.

The disagreements within the ECB are likely related to differing views on the current economic situation. Some council members believe that inflation in the euro area is around the target level and that there is no urgent need to change rates. Others, concerned that the economy may slow, advocate a cautious approach by the ECB. In any case, such fluctuations in ECB rhetoric create additional volatility in the currency market. Traders have to constantly revise their forecasts and adapt to changing conditions. In this situation, the ability to analyze economic data and understand the motives guiding ECB representatives becomes particularly important.

Recently, many officials have made it clear that they are comfortable with the current level of interest rates, which they consider optimal, as inflation has returned to the 2% target and the economies of the 20 eurozone countries continue to grow, albeit slowly.

"I did not say that interest rates should be raised," Schnabel emphasized. "Rather, they should not be lowered again. This is a very important distinction."

As for the current technical picture of EUR/USD, buyers now need to think about how to take out the 1.1780 level. Only this will allow them to target a test of 1.1800. From there, it is possible to climb to 1.1830, but doing so without support from major players will be quite difficult. The most distant target would be the high at 1.1865. In the event of a decline in the trading instrument, only around the 1.1750 level do I expect any serious action from large buyers. If no one appears there, it would be better to wait for an update of the low at 1.1730 or to open long positions from 1.1705.

As for the current technical picture of GBP/USD, pound buyers need to take out the nearest resistance at 1.3490. Only this will allow them to target 1.3525, above which it will be quite difficult to break through. The most distant target would be the 1.3560 level. If the pair declines, bears will try to seize control of 1.3455. If they succeed, a breakout of this range will deal a serious blow to bullish positions and push GBP/USD toward the low at 1.3415, with the prospect of moving on to 1.3375.

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

Forex forecast 23/12/2025: EUR/USD, USD/JPY, GBP/USD, USDX, 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.

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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.

Market embarks on early Santa Claus rally

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Those who hesitated have missed out. Although the Christmas rally typically encompasses the last five trading days of the old year and the first two of the new year, the S&P 500 has already started to gain value. Investors do not want to miss this momentum and are buying stocks. In both 2023-2024 and 2024-2025, the broad market index experienced declines, and it has never closed in the red for three consecutive times during this period of the year.

S&P 500 Christmas Rally

Pessimists point to the high fundamental valuations of tech companies, questioning their ability to generate profits commensurate with substantial investments, while expressing concerns about a prolonged pause in the Federal Reserve's monetary expansion cycle.

Optimists, on the other hand, pay tribute to the technology giants, which have been instrumental in driving the S&P 500 up by 17% since the beginning of the year. They focus less on the timeline for rate cuts and more on their scale. If Donald Trump can fill the FOMC with dovish members, his dream of reducing borrowing costs to 1% could become a reality.

It seems that those with a half-full glass are prevailing. The S&P 500 is confidently moving towards a recovery of its upward trend. Investors have recalled the principle, "the trend is your friend, so trade with the trend," and they are buying American stocks. Furthermore, Wall Street analysts are more united than ever. The divergence between the highest forecast for the broad market index in 2026 at Oppenheimer, which stands at 8,000, and the lowest forecast at Stifel Nicolaus, which is 7,000, is only 16%. When the majority sways in one direction, the crowd is often right, even though the risks of sharp movements in the opposite direction are increasing.

Dynamics of S&P 500 Forecast Deviations

It's important to note that analysts typically exhibit caution. At the end of 2024, the consensus forecast among Wall Street experts predicted a 9% rally for the S&P 500 in 2025. However, it may turn out that the broad market index exceeds that forecast by double. Likewise, few anticipated a twofold gain in the US equity market for 2023-2024, which ultimately happened.

Low evaluations begin with the observation that the price-to-forward-earnings ratio for S&P 500 companies is at its highest level since the dot-com crisis. Meanwhile, doubts about the effectiveness of artificial intelligence technologies could trigger a significant decline in the broad market index. This would dampen the wealth effect and risk reverting the US economy into a recession, similar to what occurred in 2001.

High valuations are associated with expectations of GDP acceleration fueled by the One Big Beautiful Bill Act, increased corporate profits, and capital inflows from foreign investors.

From a technical viewpoint, the daily chart of the S&P 500 indicates a continued upward movement, with bulls currently in control. A breakout above the local high near the 6,900 level will allow for an increase in previously established long positions. Target levels for buyers are set at 6,990 and 7,100.

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

Stock market on December 23: S&P 500 and NASDAQ ease off growth momentum

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Last Friday, the stock indices closed with gains, with the S&P 500 up by 0.64%, the Nasdaq 100 gaining 0.52%, and the Dow Jones Industrial Average increasing by 0.47%.

Global stock markets continued to rise, strengthening for the fourth consecutive trading day amid expectations of a year-end rally. The MSCI All Country Index rose on Tuesday after setting a new closing high in the previous session. The Asia-Pacific stocks index climbed by 0.5%, while American stock futures displayed a less vigorous rally, remaining stable. In the commodities market, gold reached yet another historical high, marking the 50th day this year when it has set records. Silver also hit a new peak.

The Japanese yen has remained a focal point for currency traders, strengthening for the second day in a row and surpassing the 156 yen per dollar mark. This occurred after Finance Minister Satsuki Katayama stated in an interview that the country has "freedom of action" to take decisive measures against currency fluctuations. These comments served as a stern warning for speculators following the yen's weakening to 157.78 yen, even after the central bank raised interest rates last Friday.

Positive sentiment among equity investors has helped the S&P 500 index recoup December losses on Monday and paved the way for an eighth consecutive month of growth, marking the longest streak since 2018. Leaders in growth among major companies included Tesla Inc. and Nvidia Corp.

Following another successful year for the stock market, the key question is whether investors will maintain this positive sentiment in 2026. Positions in the stock market are increasing, while fund managers maintain record-low cash levels. Their expectations for further growth outweigh concerns about inflated valuations of technology companies.

Federal Reserve Chairman Stephen Miran stated that the central bank risks triggering a recession if it does not continue to lower interest rates next year, which has only fueled appetite for riskier assets.

Chinese stocks performed the worst in Asia after analysts at Citigroup Inc. downgraded their ratings, citing less favorable profit forecasts and disappointing macroeconomic outlooks.

Meanwhile, oil prices stabilized after four days of increases, amid reports that the US continues its blockade on oil supplies from Venezuela. Brent crude prices approached $62 per barrel after rising about 5% over the previous four sessions, while West Texas Intermediate crude was priced around $58. It is worth noting that the US has taken control of two Venezuelan tankers and is seeking to capture a third, all part of Washington's measures to pressure Nicolas Maduro's government.

From a technical perspective, the main task for buyers in the S&P 500 today will be to overcome the nearest resistance level of $6,874. Doing so would indicate growth and open the opportunity for a surge to a new level of $6,896. An equally critical task for bulls will be to establish control above the $6,905 mark to strengthen their positions. In the event of a downward movement amid declining risk appetite, buyers must assert themselves around $6,854. A break below this level could quickly push the trading instrument back to $6,837 and pave the way down to $6,819.

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

Gold Reaches Another Record High of $4,500

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According to recent data, gold reached a record high today. This comes amid renewed geopolitical tensions and the prospect of further US interest rate cuts. Silver has also reached a historical high.

Investors, seeking safety amid global uncertainty, are flocking to precious metals, which are traditionally considered a "safe haven." Additionally, expectations of a more accommodative monetary policy from the Federal Reserve are putting further pressure on the dollar, making gold and silver more attractive to holders of other currencies. The price increase in precious metals is fueled not only by short-term factors but also by long-term trends, including the rising national debt of many countries, ongoing inflation risks, and diversification of assets by central banks.

The spot price of gold rose by 1.2% and dipped just below $4,500 per ounce, continuing its ascent following the largest single-day jump in over a month. Traders anticipate that after three consecutive interest rate cuts, the Fed will again lower borrowing costs next year, doing so at least twice.

Gold's appeal as a safe-haven asset has also strengthened amid rising geopolitical tensions, particularly in Venezuela, where the US is blocking oil tankers, increasing pressure on President Nicolas Maduro's government.

It's worth noting that gold prices have increased by 70% this year and are set to deliver their best annual performance since 1979. This rapid growth has been supported by increased purchases from central banks and inflows into gold-backed exchange-traded funds (ETFs). According to the World Gold Council, the total assets in such funds have increased every month this year, except for May.

Aggressive measures by US President Donald Trump to reshape global trade, along with his threats to the Federal Reserve's independence, have fueled the bullish market.

As mentioned earlier, silver has also risen by 1.4%, approaching the $70 per ounce mark. The price of this white metal has increased by approximately 140% this year.

As for the current technical picture of gold, buyers need to reclaim the nearest resistance at $4,481. This will allow targeting $4,531, above which it will be quite challenging to break through. The furthest target will be the area of $4,591. If gold falls, bears will attempt to take control of $4,432. If successful, a breakout of this range will deliver a serious blow to the bulls' positions, pushing gold down to a low of $4,372 with the potential to reach $4,304.

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

USD/JPY: Simple Trading Tips for Beginner Traders on December 23. Analysis of Yesterday's Forex Trades

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Analysis of Trades and Trading Tips for the Japanese Yen

The test of the price at 157.32 coincided with the moment when the MACD indicator began to move downward from the zero mark, confirming the correct entry point for selling the dollar. As a result, the pair decreased by more than 30 pips.

After expectations of future monetary easing from the Federal Reserve increased, the dollar lost ground. This decline was particularly evident against the Japanese yen. Investors began shifting assets into other currencies as lower US interest rates are believed to diminish the dollar's attractiveness. However, caution is advised when selling the USD/JPY pair, as despite the Bank of Japan's tight policy, the future trajectory of interest rate increases remains uncertain.

Regarding the intra-day strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I plan to buy USD/JPY today if it reaches the entry point around 156.20 (green line on the chart), targeting a move to 156.59 (thicker green line on the chart). Around 156.59, I plan to exit my long positions and open a short position immediately on a bounce, targeting a movement of 30-35 pips in the opposite direction from this level. It is best to return to buying the pair on corrections and significant dips in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning its rise from it.
• Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 155.95 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. Growth can be expected towards the opposite levels of 156.20 and 156.59.

Sell Scenarios

• Scenario #1: I plan to sell USD/JPY today only after the 155.95 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 level of 155.65, where I plan to exit my short positions and open long positions immediately in the opposite direction, targeting a movement of 20-25 pips in the opposite direction from this level. It is better to sell as high as possible. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting its decline from it.
• Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of 156.20 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decline can be expected towards the opposite levels of 155.95 and 155.65.

Chart Annotations:

• Thin Green Line: Entry price where you can buy the trading instrument.
• Thick Green Line: Estimated price where you can set Take Profit or fix profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price where you can sell the trading instrument.
• Thick Red Line: Estimated price where you can set Take Profit or fix profits, as further decline below this level is unlikely.
• MACD Indicator: It is important to follow the overbought and oversold zones when entering the market.

Important Notes:

Beginner traders in the Forex market should make very cautious decisions regarding market entry. It is best to stay out of the market before major fundamental reports to avoid getting caught in sharp price 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, as presented above. Making spontaneous trading decisions based on the current market situation is initially 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 23. Analysis of Yesterday's Forex Trades

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Analysis of Trades and Trading Tips for the British Pound

The test of the price at 1.3439 occurred when the MACD indicator was beginning to move upward from the zero mark, which confirmed the correct entry point for buying the pound. As a result, the pair rose towards the target level of 1.3469.

The dollar lost considerable ground after the increased likelihood of further interest rate cuts from the Federal Reserve of the United States, along with positive data on UK GDP growth and investment. The market is now waiting for further signals from Fed officials to better assess the future trajectory of monetary policy. Any hints at a more aggressive rate cut could further weaken the US currency.

Today, due to the lack of fresh economic data from the UK, those betting on a decline in the pound's value will have no significant catalysts for activity. The British currency, having a good domestic guide following yesterday's data, may continue to rise against the dollar. However, without strong internal impulses for a significant upward movement, it is unlikely to materialize. In the prevailing circumstances, it is critically important for the pound to hold above the main support levels. Breaking these levels could initiate a new phase of sell-offs and lead to a decline in the exchange rate.

Regarding the intra-day strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenarios

• Scenario #1: Today, I plan to buy the pound if it reaches the entry point around 1.3494 (green line on the chart), with a target for growth to the level of 1.3520 (thicker green line on the chart). At 1.3520, I intend to exit my long positions and open a short position immediately on a bounce (targeting a 30-35-pip move in the opposite direction from this level). Expectations for a strong rise in the pound today are limited. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning its rise from it.
• Scenario #2: I also plan to buy the pound today if the price tests 1.3480 twice in a row while the MACD indicator is oversold. This will limit the pair's downward potential and lead to a market reversal upwards. Growth may be expected towards the opposite levels of 1.3494 and 1.3520.

Sell Scenarios

• Scenario #1: I plan to sell the pound today after the 1.3480 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 level of 1.3458, where I plan to exit my short positions and open long positions immediately in the opposite direction (targeting a movement of 20-25 pips in the opposite direction from this level). Sellers of the pound may manifest themselves within the framework of a correction. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting its decline from it.
• Scenario #2: I also plan to sell the pound today if there are two consecutive tests of 1.3494 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. Expect a decline towards the opposite levels of 1.3480 and 1.3458.

Chart Annotations:

• Thin Green Line: Entry price where you can buy the trading instrument.
• Thick Green Line: Estimated price where you can set Take Profit or fix profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price where you can sell the trading instrument.
• Thick Red Line: Estimated price where you can set Take Profit or fix profits, as further decline below this level is unlikely.
• MACD Indicator: It is important to follow the overbought and oversold zones when entering the market.

Important Notes:

Beginner traders in the Forex market should make very cautious decisions regarding market entry. It is best to stay out of the market before major fundamental reports to avoid getting caught in sharp price 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, as presented above. Making spontaneous trading decisions based on the current market situation is initially 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 23. Analysis of Yesterday's Forex Trades

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Analysis of Trades and Trading Tips for the Euro

The test of 1.1745 occurred when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the euro.

The euro continued to strengthen against the dollar, particularly amid the absence of U.S. reports. Investors refocused on the prospects of U.S. monetary policy, and the lack of current information only heightened concerns about the slowing pace of the U.S. economy, fueling expectations for a softer policy from the Federal Reserve.

Today, in the first half of the day, the likelihood that the German import price index will affect the euro's exchange rate is low. Although this indicator is somewhat important for assessing inflation, its impact on the currency market is usually short-lived. Currently, investors are paying more attention to signs of economic recovery in the region and the European Central Bank's plans. Any positive news in this area will support the euro.

Regarding the intra-day strategy, I will rely on the implementation of scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I will buy the euro today if prices reach around 1.1781 (the green line on the chart), with a target of 1.1805. At 1.1805, I plan to exit the market and sell the euro immediately on a bounce, targeting a 30-35-pip move from the entry point. Growth of the euro can only be expected after favorable news. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.
• Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of the price at 1.1769 while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. I can expect growth towards the opposite levels of 1.1781 and 1.1805.

Sell Scenarios

• Scenario #1: I plan to sell the euro once it reaches 1.1769 (the red line on the chart). The target will be the level of 1.1750, where I plan to exit the market and buy immediately in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Some pressure on the pair may be noticeable in the first half of the day. Important! Before selling, make sure the MACD indicator is below the zero mark and just starting to decline from it.
• Scenario #2: I also plan to sell the euro today if the price tests 1.1781 twice in a row while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. I can expect a decline towards the opposite levels of 1.1769 and 1.1750.

Chart Annotations:

• Thin Green Line: Entry price where you can buy the trading instrument.
• Thick Green Line: Estimated price where you can set Take Profit or fix profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price where you can sell the trading instrument.
• Thick Red Line: Estimated price where you can set Take Profit or fix profits, as further decline below this level is unlikely.
• MACD Indicator: It is important to follow the overbought and oversold zones when entering the market.

Important Notes:

Beginner traders in the Forex market should make very cautious decisions regarding market entry. It is best to stay out of the market before major fundamental reports to avoid getting caught in sharp price 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, as presented above. Making spontaneous trading decisions based on the current market situation is initially a losing strategy for intraday traders.

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

Cryptocurrency Trading Recommendations for December 23

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Bitcoin has failed to hold the $90,000 level and has fallen back to around $87,000, while trading within a sideways channel. Ethereum has also dropped below $3,000, reducing its near-term upside prospects.

Meanwhile, the struggling company Strategy, led by Michael Saylor, which has attracted significant attention, did not purchase BTC for the first time in a long while last week. However, it increased its reserves by $748 million, bringing them to $2.19 billion and 671,268 BTC. This suggests that the company is preparing for another major market downturn and is setting aside a buffer for such an event.

The increase in reserves signifies a strategic approach to risk management amid the volatility of the cryptocurrency market. While other companies may adopt a more aggressive buying strategy, Strategy has chosen to remain flexible and maintain sufficient funds for maneuvering in unfavorable market scenarios. It is interesting to note that the company may not only be anticipating a short-term price decline but also a longer period of instability known as "crypto winter". The increase in reserves can be interpreted as preparation for an extended period of reduced market activity, during which prices fluctuate within a wide range.

Strategy's actions also serve as a signal to other market participants. They demonstrate that even the most fervent supporters of cryptocurrencies acknowledge the need for risk management and are preparing for potential negative scenarios. This could affect market sentiment and lead to a more cautious approach to cryptocurrency investments.

As for the intra-day strategy in the cryptocurrency market, I will continue to act on major dips in Bitcoin and Ethereum, with the expectation of sustained long-term bullish market conditions, which have not disappeared.

For short-term trading, the strategy and conditions are outlined below.

Bitcoin

Buy Scenario

• Scenario #1: I will buy Bitcoin today upon reaching the entry point around $87,900, with a target of growth to $89,300. I will exit my positions around $89,300 and sell immediately on a bounce. Before buying on the breakout, make sure the 50-day moving average is below the current price, and the Awesome Oscillator is above zero.
• Scenario #2: I can buy Bitcoin from the lower boundary of $86,800 if there is no market reaction to its breakout back towards levels of $87,900 and $89,300.

Sell Scenario

• Scenario #1: I will sell Bitcoin today upon reaching the entry point around $86,800, with a target to decline to $85,700. I will exit my sales around $85,700 and buy immediately on a bounce. Before selling on the breakout, make sure the 50-day moving average is above the current price, and the Awesome Oscillator is below zero.
• Scenario #2: I can sell Bitcoin from the upper boundary of $87,900 if there is no market reaction to its breakout back towards levels of $86,800 and $85,700.

Ethereum

Buy Scenario

• Scenario #1: I will buy Ethereum today upon reaching the entry point around $2,977, with a target for growth to $3,018. I will exit my positions around $3,018 and sell immediately on a bounce. Before buying on a breakout, make sure the 50-day moving average is below the current price and the Awesome Oscillator is above zero.
• Scenario #2: I can buy Ethereum from the lower boundary of $2,942 if there is no market reaction to its breakout back towards levels of $2,977 and $3,018.

Sell Scenario

• Scenario #1: I will sell Ethereum today upon reaching the entry point around $2,942, with a target for a decline to $2,902. I will exit my sales around $2,902 and buy immediately on a bounce. Before selling on a breakout, make sure the 50-day moving average is above the current price and the Awesome Oscillator is below zero.
• Scenario #2: I can sell Ethereum from the upper boundary of $2,977 if there is no market reaction to its breakout back towards levels of $2,942 and $2,902.

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

GBP/USD: Plan for the European Session on December 23. The Pound is Unstoppable

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Yesterday, only one entry point into the market was formed. Let's take a look at the 5-minute chart and analyze what happened. In my morning forecast, I highlighted the level of 1.3402 and planned to make decisions based on it. The rise and breakout at 1.3402 occurred without a retest, so I was unable to get an entry point for long positions. In the afternoon, a false breakout at 1.3443 provided an excellent entry point to buy the pound, resulting in the pair rising by more than 30 pips.

For opening long positions on GBP/USD:

The pound reacted positively to the UK GDP data. The bullish market received support in the afternoon amid rising expectations for further US rate cuts. Today, there is no report from the UK, so sellers of the pound will have much less reason to be active. This is better for buyers. I expect to see their first signs already during a correction around the support level of 1.3452. A false breakout would be a good opportunity to open long positions with the aim of further growth towards the resistance level of 1.3490, where trading is currently taking place. A breakout and retest of this range from above will increase the chances of GBP/USD strengthening, triggering stop orders for sellers and providing an appropriate entry point for long positions, with the potential to reach 1.3525. The furthest target will be around 1.3567, where I plan to take profits. If GBP/USD declines and there is no buying at 1.3452, pressure on the pair will increase, leading to a move towards the next support level at 1.3411. Only a false breakout there would be a suitable condition for opening long positions. I plan to buy GBP/USD on a bounce from the 1.3374 low, targeting an intraday correction of 30-35 pips.

For opening short positions on GBP/USD:

Pound sellers have adopted a wait-and-see stance and are clearly in no hurry to reenter the market. If the pair continues to rise, bears can expect to act around the nearest resistance at 1.3490. A false breakout there will provide grounds for selling GBP/USD, targeting the support level of 1.3452, where slightly lower moving averages are located, favoring the bulls. A breakout and retest from below this range after weak data would deal a more significant blow to buyer positions, leading to stop orders being triggered and opening a path to 1.3411. The furthest target will be the 1.3374 area, where I will take profits. If GBP/USD continues to rise and bears remain inactive at 1.3490, buyers will continue to develop the trend, which could lead to a surge towards 1.3525. I also plan to open only short positions there on a false breakout. If there is no downward movement even there, I will sell GBP/USD immediately on a bounce from 1.3567, but only in anticipation of a downward correction of the pair by 30-35 pips during the day.

Recommendations for Further Reading:

Due to the shutdown in the US, fresh data on the Commitment of Traders (COT) is not being published. As soon as an updated report is prepared, we will publish it immediately. The latest relevant data is only as of December 9.

In the COT report (Commitment of Traders), there was an increase in both long and short positions. The last COT report indicates that long non-commercial positions rose by 8,067 to 60,319, while short non-commercial positions jumped by 3,402 to 135,834. As a result, the spread between long and short positions increased by 23,795.

Indicator Signals:

• Moving Averages: Trading is taking place above the 30-day and 50-day moving averages, indicating further growth for the pound.
• Note: The period and prices of the moving averages are considered by the author on the hourly H1 chart and differ from the general definition of classical daily moving averages on the daily D1 chart.
• Bollinger Bands: In the event of a decline, support will be provided by the indicator's lower boundary around 1.3425.

Description of Indicators:

• Moving Average (period 50): Indicates the current trend by smoothing volatility and noise; marked in yellow on the chart.
• Moving Average (period 30): Indicates the current trend by smoothing volatility and noise; marked in green on the chart.
• MACD Indicator (Moving Average Convergence/Divergence): Fast EMA - period 12; Slow EMA - period 26; SMA - period 9.
• Bollinger Bands: Period - 20.
• Non-Commercial Traders: Speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting certain requirements.
• Long Non-Commercial Positions: Represents the total long open position of non-commercial traders.
• Short Non-Commercial Positions: Represents the total short open position of non-commercial traders.
• Total Non-Commercial Net Position: The difference between the short and long positions of non-commercial traders.

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

EUR/USD: Plan for the European Session on December 23. The Euro Strongly Appreciates Against the Dollar

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Yesterday, several market entry points were established. Let's take a look at the 5-minute chart and analyze what happened. In my morning forecast, I highlighted the level of 1.1729 and planned to base my decisions on it. The rise and formation of a false breakout around 1.1729 provided an entry point to sell the euro, but it did not lead to a significant decline in the pair. In the afternoon, the breakout and retest of 1.1729 prompted euro purchases, driving the pair up by more than 30 pips.

For opening long positions on EUR/USD:

The absence of reports from the US helped the euro continue to rise against the dollar, as the probability of further interest rate cuts by the Federal Reserve significantly increased. In the first half of the day, there are no data points that could harm the euro's bullish trend. The only report of interest is the German import price index, but it is unlikely to change anything significantly. If EUR/USD experiences a slight decline, I expect to see the first signs of buyers around the support level at 1.1754, as seen in yesterday's activity. Only after a false breakout there can a long position be considered, targeting a recovery to around 1.1776, where trading is currently taking place. A breakout and retest of this range, similar to what I analyzed earlier, will confirm the decision to buy euros in anticipation of a larger jump towards 1.1801. The furthest target will be the high at 1.1840, where I will take profits. Testing this level will reinforce the bullish market for the euro. If EUR/USD declines and there is a lack of activity near 1.1754, pressure on the pair will increase, which could lead to a larger downward movement for the euro. In that case, bears will attempt to reach the next interesting level of 1.1729. Only a false breakout there would be a suitable condition to buy euros. Long positions can be opened immediately on a bounce from 1.1706, targeting an upward correction of 30-35 pips within the day.

For opening short positions on EUR/USD:

Sellers are not showing activity for now, and there are no significant reasons for them to do so. In the current conditions, it is better to act at the highest level possible. If EUR/USD continues to rise in the first half of the day amid the absence of important data, bears can only rely on the nearest resistance at 1.1776. A false breakout there will provide an entry point for short positions targeting the support level of 1.1754. A breakout and consolidation below this range, along with a retest from below, will present an additional opportunity to open short positions with a movement towards the area of 1.1729. The furthest target will be the 1.1706 area, where I will take profits. If EUR/USD moves higher along the trend and bears are not active around 1.1776, buyers will have a good opportunity to continue developing the bullish market. In that case, it is better to postpone short positions until the larger level of 1.1801 is reached. Selling there will only occur after a failed consolidation. I plan to open short positions immediately on a bounce from 1.1840, targeting a downward correction of 30-35 pips.

Recommendations for Further Reading:

Due to the shutdown in the US, fresh data on the Commitment of Traders (COT) is not being published. As soon as a current report is prepared, we will publish it immediately. The latest relevant data is only from December 9.

In the COT report (Commitment of Traders), there was an increase in long positions and a decrease in short positions. However, this data is not suitable for building a strategy, so it doesn't require special attention. The COT report indicates that long non-commercial positions rose by 18,446 to 268,118, while short non-commercial positions decreased by 11,889 to 129,330. As a result, the spread between long and short positions increased by 12,889.

Indicator Signals:

• Moving Averages: Trading is above the 30-day and 50-day moving averages, which indicates further growth for the euro.
• Note: The period and prices of moving averages are considered by the author on the hourly H1 chart and differ from the overall definition of classic daily moving averages on the daily D1 chart.
• Bollinger Bands: In the event of a decline, the indicator's lower boundary around 1.1735 will act as support.

Description of Indicators:

• Moving Average (period 50): Indicates the current trend by smoothing volatility and noise; marked in yellow on the chart.
• Moving Average (period 30): Indicates the current trend by smoothing volatility and noise; marked in green on the chart.
• MACD Indicator (Moving Average Convergence/Divergence): Fast EMA - period 12; Slow EMA - period 26; SMA - period 9.
• Bollinger Bands: Period - 20.
• Non-Commercial Traders: Speculators, such as individual traders, hedge funds, and large institutions, who use the futures market for speculative purposes and meet certain requirements.
• Long Non-Commercial Positions: Represents the total long open position of non-commercial traders.
• Short Non-Commercial Positions: Represents the total short open position of non-commercial traders.
• Total Non-Commercial Net Position: The difference between the short and long positions of non-commercial traders.

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

What to Pay Attention to on December 23? Analysis of Fundamental Events for Beginners

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Analysis of Macroeconomic Reports:

Several macroeconomic reports are scheduled for Tuesday, particularly in the United States. Reports on GDP (second estimate for the third quarter), industrial production, and durable goods orders will be released. Among this list, the GDP report is the least interesting, as the second estimate is objectively less significant than the first or third. However, the reports on industrial production and durable goods orders may provoke a market reaction. The event calendars for the UK and the Eurozone are empty today.

Analysis of Fundamental Events:

No fundamental events are planned for Tuesday. Overall, the market's current questions may be directed only at the Federal Reserve. The last meeting took place recently, but afterwards, data on the labor market, unemployment, and inflation were released in the US, which significantly impacts the Fed's monetary policy. Thus, we do not have an updated perspective from Jerome Powell or other members of the FOMC. However, as already mentioned, there are no scheduled remarks from Fed officials on Tuesday. With the holidays approaching, many politicians, officials, and staff are taking time off.

General Conclusions:

On the second trading day of the week, both currency pairs may continue their upward movements, but today's US macroeconomic backdrop could influence the dollar's movement. The EUR/USD pair may continue to rise following the formation of two buy signals in the 1.1745-1.1754 range. The GBP/USD pair may continue its upward move after breaking out of the sideways channel and generating a buy signal in the 1.3437-1.3446 area.

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 23? Simple Tips and Trade Analysis for Beginners

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Trade Analysis for Monday:

1H Chart of the GBP/USD Pair

The GBP/USD pair rose by 110 pips on Monday, easily leaving the weekly sideways channel of 1.3331-1.3437. We mentioned that the British pound would continue to rise, while the dollar would decline. The market is currently "thin," which makes it easier for large players to move the price in the desired direction during the holidays than at other times. Recall that last week, there was an abundance of macroeconomic reports and fundamental events, and the price remained in a sideways channel throughout that week. However, on the first day of the holiday period, the pound showed an increase of 100 pips, despite a lack of significant impact from the only report of the day – the GDP in the UK. This indicates that traders had nothing to react to yesterday. Nevertheless, the rise of the British currency continued into the night, further proving that the five-month downward correction has ended and the global uptrend for 2025 is resuming.

5M Chart of the GBP/USD Pair

On the 5-minute timeframe, one trade signal was generated on Monday. In the US trading session, the pair broke above the 1.3437-1.3446 range, allowing novice traders to open long positions. These trades remain relevant today, so profit may increase throughout the day.

How to Trade on Tuesday:

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

On Tuesday, novice traders can consider new long positions if the price bounces off the 1.3437-1.3446 area, targeting 1.3529. However, a corresponding buy signal was generated yesterday.

On the 5-minute timeframe, trading levels include 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, and 1.3574-1.3590. There are no significant events scheduled in the UK for Tuesday, while in the US, reports on industrial production, durable goods orders, and the third-quarter GDP in its second estimate will be published. This data is quite important, and no other events are scheduled this week. Therefore, during today's US trading session, the price may either accelerate its rise or sharply reverse downward.

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 23? Simple Tips and Trade Analysis for Beginners

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Trade Analysis for Monday:

1H Chart of the EUR/USD Pair

The EUR/USD currency pair unexpectedly began to rise on Monday. This was surprising on both fundamental and macroeconomic grounds, especially given that it is the start of the Christmas week. On Monday, there were no important events or reports scheduled in the Eurozone or the US; nevertheless, the European currency appreciated by 70 pips. For us, any increase in the EUR/USD pair is logically expected. Moreover, we warned that in the context of a "thin" market, volatile trend movements are even more likely than in recent weeks and months, making it easier to move the price. From a technical standpoint, the pair settled above two descending trend lines in the morning while maintaining the relevance of a long-term ascending trend line. Therefore, novice traders could have opened long positions at the very start of the movement. The pair is once again approaching the upper line of the sideways channel 1.1400-1.1830 on the daily timeframe and has every chance of breaking through this time. We consider it possible that the end of the six-month flat phase may coincide with Christmas and the New Year.

5M Chart of the EUR/USD Pair

On the 5-minute timeframe, two buy signals were generated on Monday. First, the pair broke above the area of 1.1745-1.1754 and then bounced off it from above. Thus, novice traders could open another long position if they missed the first opportunity, based on the signal from the hourly timeframe.

How to Trade on Tuesday:

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, which marks the upper boundary of the flat on the daily timeframe. This time, we may witness a breakout. The overall fundamental and macroeconomic background remains very weak for the US dollar; therefore, we expect the pair to rise in the medium term.

On Tuesday, novice traders can trade in the area of 1.1745-1.1754. Two buy signals have already been formed on Monday. In a "thin" market, the growth may continue on Tuesday. However, today there will also be macroeconomic events, so a market reaction should be expected—any kind of reaction.

On the 5-minute timeframe, levels to consider include 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 Tuesday, there are no important events or reports scheduled in the Eurozone, while the US will release reports on GDP, industrial production, and durable goods orders. These are quite important reports, so a market reaction to them should be anticipated.

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.

Despite the potential for a correction, XPD/USD still has the opportunity to continue its strengthening

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[XPD/USD]

Although there is an appearance of Bearish Divergence, but with the RSI(14) condition which is in the Neutral-Bullish level, along with the EMA(50) above the EMA(200), which indicates a Golden Cross condition, it suggests that the bias for XPD/USD remains in a strengthening condition today.

Key Levels

1. Resistance. 2 : 1927.35

2. Resistance. 1 : 1879.07

3. Pivot : 1822.99

4. Support. 1 : 1774.71

5. Support. 2 : 1718.63

Tactical Scenario:

Positive Reaction Zone: If the price of XPD/USD breaks out above 1822.99, there is potential to test the level at 1879.07.

Momentum Extension Bias: If 1879.07 is also exceeded, then there is potential for further strengthening up to 1927.35.

Invalidation Level / Bias Revision:

The upside bias weakens if the price of XPD/USD declines and closes below 1718.63.

Technical Summary:

EMA(50) : 1826.41

EMA(200): 1749.03

RSI(14) : 64.97 + Bearish Divergent

Economic News Release Agenda:

Tonight, when the U.S. market session opens, the following economic data will be released:

US - ADP Weekly Employment Change - Tentative

US - Prelim GDP q/q - 20:30 WIB

US - Core Durable Goods Orders m/m - 20:30 WIB

US - Durable Goods Orders m/m - 20:30 WIB

US - Prelim GDP Price Index q/q - 20:30 WIB

US - Capacity Utilization Rate - 21:15 WIB

US - Industrial Production m/m - 21:15 WIB

US - CB Consumer Confidence - 22:00 WIB

US - Richmond Manufacturing Index - 22:00 WIB

US - API Weekly Statistical Bulletin - 04:30 WIB

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

Natural Gas on Tuesday, December 23, 2025, has the potential to weaken.

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[Natural Gas]

Although the RSI(14) is in the Neutral-Bullish level, but with the the Death Cross condition between EMA(50) and EMA(200) indicates that Natural Gas has the potential to weaken toward its nearest support level today.

Key Levels

1. Resistance. 2 : 4.318

2. Resistance. 1 : 4.156

3. Pivot : 3.977

4. Support. 1 : 3.815

5. Support. 2 : 3.636

Tactical Scenario:

Pressure Zone: If the price of #NG breaks down below 3.815, it may continue to weaken down to 3.636.

Momentum Extension Bias: If 3.636 is broken, there is a potential for Natural Gas to test 3.474.

Invalidation Level / Bias Revision:

The downside bias is restrained if the price of Natural Gas unexpectedly strengthens and breaks above 4.318.

Technical Summary:

EMA(50) : 3.987

EMA(200): 4.023

RSI(14) : 50.84

Economic News Release Agenda:

Tonight, when the U.S. market session opens, the following economic data will be released:

US - ADP Weekly Employment Change - Tentative

US - Prelim GDP q/q - 20:30 WIB

US - Core Durable Goods Orders m/m - 20:30 WIB

US - Durable Goods Orders m/m - 20:30 WIB

US - Prelim GDP Price Index q/q - 20:30 WIB

US - Capacity Utilization Rate - 21:15 WIB

US - Industrial Production m/m - 21:15 WIB

US - CB Consumer Confidence - 22:00 WIB

US - Richmond Manufacturing Index - 22:00 WIB

US - API Weekly Statistical Bulletin - 04:30 WIB

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

Overview of the GBP/USD Pair. December 23. The British Pound Makes a New Push North

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The GBP/USD currency pair also traded higher on Monday, which few expected. However, in the article on EUR/USD, we already outlined our view on why both the euro and the pound might resume their global uptrends during the New Year holidays. To recap, any decline in either currency pair is an inherent correction. This correction has already lasted 6 months and has been prolonged. Therefore, even if the euro and pound rise simply without any news support, it would still be logical and expected.

On Monday, the only report published in the UK for the week generated little market interest. In principle, we had warned that expecting strong movement from the GDP report following a crazy week packed with neglected events was overconfident. Thus, it is clear that the GDP report was not the reason behind the rise of the pound and the euro. In any case, the third estimate aligned completely with forecasts, so there was nothing to react to. The British economy continues to grow weakly as before.

However, on the daily timeframe, the price spent about seven days just above the Senkou Span B line, but yesterday it made another attempt to rebound and resume the global uptrend. Recall that breaking above the Senkou Span B line, especially on the daily timeframe, is a very strong signal of a trend change. Therefore, we were previously expecting growth only from the British pound, and now we are even more so. From our perspective, it does not even matter that next year the Federal Reserve will be cutting the key rate alongside the Bank of England. The dollar has simply exhausted its reserves of luck. The end of September and all of October saw the dollar rise without any real grounds. Recall that in mid-September, the Fed resumed its monetary policy easing cycle, and on October 1, a "shutdown" began in America, with Donald Trump announcing new tariffs.

Thus, the dollar rose without cause, while the pound fell without sufficient reason. Therefore, the GBP/USD pair may rise even without support from local macroeconomic and fundamental backgrounds. As before, we expect the pair to hover around the peaks of the current year, namely around the 1.3800 level. And this upward movement will not end, as the global uptrend persists and Donald Trump's policy remains unchanged: "do everything to make the dollar cheaper."

This week, there will be only one interesting event today; the market can react to it, after which full-scale Christmas celebrations will begin. This does not mean that the market will be closed. It means that trading volumes will drop to a minimum. But in a "thin market," this may actually play into the hands of the current trend, which has long needed to resume.

The average volatility of the GBP/USD pair over the past five trading days is 93 pips. For the pound/dollar pair, this value is considered "average." On Tuesday, December 23, we expect movement within the range limited by levels 1.3363 and 1.3549. The upper channel of linear regression is directed downward, but only due to a technical correction on higher timeframes. The CCI indicator has entered the oversold area six times over the past months and has formed numerous "bullish" divergences, continually warning of a resumption of the upward trend. Last week, the indicator formed another bullish divergence, signaling a resumption of growth.

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 currency pair is attempting to resume its upward trend from 2025, and its long-term prospects remain unchanged. Donald Trump's policies will continue to pressure the dollar, so we do not expect the US currency to grow. Thus, long positions with targets at 1.3489 and 1.3550 remain relevant for the near future when the price is above the moving average. If the price is below the moving average line, we can consider small shorts with targets at 1.3306 and 1.3245 on technical grounds. From time to time, the US currency shows corrections (on a global scale), but for the trend to strengthen, it needs signs of an end to the trade war or other positive global factors.

Explanations for the Illustrations:

The linear regression channels help determine the current trend. If both are directed in the same way, then the trend is strong;

The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which to trade;

Murray levels – target levels for movements and corrections;

Volatility levels (red lines) – the probable price channel in which the pair will spend the next day based on current volatility readings;

The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is imminent.

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

Overview of the EUR/USD Pair. December 23. A Christmas Surprise from the Euro and Pound

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The EUR/USD currency pair traded quite actively on Monday, a day with a "holiday" status. We witnessed a rise in the European currency during the European trading session. It is worth noting (as shown in the illustration below) that market activity in recent months has been minimal, if not at a historic low. We remember times when the average volatility was around 30-40 pips. Now, it stands at 50. However, we want to remind you that the pair had previously bounced off the upper line of the sideways channel 1.1430-1.1800 on the daily timeframe, so from a technical perspective, a decline was much more likely. Nevertheless, the new week began on a positive note, and we would like to remind traders of two points.

Firstly, the market is currently "thin." This means that any major transaction can shift the price by a considerable distance, since the resistance on the other side is minimal. Secondly, any flat trend will eventually come to an end. We have mentioned several times over the past months that it will end quite unexpectedly, when no one is anticipating it. Let's be frank: who expected a strong movement last week? The number of macroeconomic and fundamental events was overwhelming, yet we did not see anything particularly interesting.

However, this does not change the prospects for the US dollar. The global fundamental backdrop for it remains negative. The pair could remain in a flat for another six months, but that does not rule out the possibility that the uptrend will eventually resume. Why not during the Christmas and New Year holidays? Who in the market expects the euro to rise above 1.1800 after six months of trials? That would be the Christmas or New Year's surprise. Meanwhile, most traders, enjoying their Olivier salad or roasted turkey, will later regret missing an excellent movement.

In any case, we discussed the advisability of purchasing the European currency earlier, around the level of 1.1500. At that time, the pair was near the lower boundary of the sideways channel, and it was a buying opportunity near the lower boundary. Now that the price has reached the upper boundary, it would be logical to sell, but we want to remind you that for the euro, any decline is merely a correction. The daily timeframe clearly shows that over the last six months, the dollar has been capable of only a 23.6% correction, according to Fibonacci. Therefore, selling the pair, expecting the flat to continue for several more months, is somewhat overconfident. We still only anticipate a price increase and do not see any reason for the dollar to appreciate in 2026. The Federal Reserve will continue to ease policy one way or another, while the European Central Bank may even begin tightening its monetary policy. Donald Trump's policies are unlikely to change, and they have inflicted a devastating blow to the dollar.

The average volatility of the EUR/USD currency pair over the last five trading days as of December 23 is 55 pips, which is considered "average." We expect the pair to trade between 1.1698 and 1.1808 on Tuesday. The upper channel of the linear regression is turning upward, but in fact, the flat trend continues on the daily timeframe. The CCI indicator entered the oversold area twice in October (!!!), but at the beginning of December, it visited the overbought area. A downward rollback is possible, which we are already observing.

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, with an upward trend maintained on all higher timeframes, while a flat trend has persisted on the daily timeframe for the sixth consecutive month. The global fundamental backdrop remains significant for the market and remains negative for the dollar. Over the last six months, the dollar has occasionally shown weak growth, but exclusively within the bounds of the sideways channel. It has no fundamental basis for long-term strengthening. When the price is below the moving average, one can consider small short positions with targets of 1.1698 and 1.1658 on purely technical grounds. Above the moving average line, long positions remain relevant with targets at 1.1808 and 1.1830 (the upper boundary of the flat on the daily timeframe), which have already been effectively reached. Now we need the flat to come to an end.

Explanations for the Illustrations:

The linear regression channels help identify the current trend. If both are directed in the same way, then the trend is strong;

The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction in which to trade;

Murray levels – target levels for movements and corrections;

Volatility levels (red lines) – the probable price channel in which the pair will spend the next day based on current volatility readings;

The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal in the opposite direction is imminent.

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

2026 Will Be a Continuation for the Dollar: Part 2

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It is important to specifically address the Federal Reserve's monetary policy. Market participants are currently in no doubt that its easing will continue. The pace and timing of this easing are uncertain. However, the November labor market and unemployment data showed only the very beginning of a recession. The inflation report indicated a slowdown, allowing the Fed to utilize additional "medicines" to address the labor market. These additional measures will be new rounds of monetary policy easing.

Certainly, not only the Fed's policy matters, but also those of the European Central Bank and the Bank of England. The British central bank also plans several rounds of easing, but the ECB is more inclined to tighten if inflation accelerates at some point. Therefore, while the U.S. currency will decline, the British pound will find it more challenging to rise against the dollar compared to the euro.

I don't want to discuss May just yet, as there are still five months until Jerome Powell's departure. However, I do not rule out the possibility that, at some point, Donald Trump may attempt to dismiss another FOMC member who is reluctant to vote for a rate cut. How will this new narrative of dismissals via Truth Social, which has yet to begin, conclude?

I also want to add that a weak dollar is beneficial for America. Previous administrations have overlooked this point, but Trump sees it as a key issue for weak exports. Consequently, U.S. authorities will be inclined to devalue the American currency or, at the very least, will not be inclined to support it. A Reuters survey showed that most economists lean toward the continuation of the dollar's decline next year.

Analysts also note that in 2026, many countries around the world may demonstrate stronger economic growth than the U.S. This will partially reduce interest in the American economy and, consequently, in the dollar as a conduit for investment in U.S. assets. At the same time, economists do not expect fantastic results from the U.S. economy. Many still forecast a downturn or even a recession. To some extent, the dollar supports the growth of the U.S. stock market, but this factor may only have a temporary impact. Overall, I do not see any compelling reasons for the market to buy U.S. currency at this time.

Wave Analysis for EUR/USD:

Based on my analysis of EUR/USD, I conclude that the instrument continues to develop an upward trend segment. Donald Trump's policies and the Federal Reserve's monetary policy remain significant factors in the long-term decline of the U.S. currency. The targets for the current trend segment could extend up to the 25th figure. The current upward wave collection is beginning to develop, and I hope we are currently witnessing the formation of an impulse wave collection, which is part of the global wave 5. In this case, we should expect growth with targets around 1.1825 and 1.1926, corresponding to 200.0% and 261.8% on the Fibonacci scale.

Wave Analysis for GBP/USD:

The wave structure for GBP/USD has changed. The downward corrective structure a-b-c-d-e in C at 4 appears to be complete, as does the entire wave 4. If this is indeed the case, I expect the main trend segment to resume construction, 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, which equates to 76.4% and 61.8% on the Fibonacci scale. These targets have been reached. Wave 3 or C continues its formation, and there is currently a fourth attempt to break the 1.3450 mark, which corresponds to 61.8% on the Fibonacci scale.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often lead to changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There can never be 100% certainty in market direction. 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.

USD: The Year 2026 Will Continue the Trends of 2025

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In 2025, the U.S. dollar lost about 9% against a major basket of currencies. To be honest, 9% is significant, but the dollar was fortunate that it did not end up in a much worse position. Against the euro, the decline was 15%, and against the British pound, it was 10%. In the second half of the current year, the market managed to stabilize the situation for the dollar somewhat, but what can be expected next year?

In my opinion, the depreciation of the U.S. currency will continue. I believe that the news background remains negative for the dollar, so the market will continue to sell. The year 2025 has shown us that we should not expect monthly crashes from what was once considered a "safe haven," but the dollar can no longer claim stability. Even central banks around the world have begun to reduce their dollar reserves, which speaks volumes.

The dollar is currently a politically unstable currency with an entirely uncertain future. In 2025, Donald Trump initiated a Global World War, and what the American president will come up with in 2026 is known only to him. However, Washington is already prepared to start a full-scale war against Venezuela, and in this case, the dollar is unlikely to act as a "safe-haven asset" for market participants. The trade war will continue in one form or another, as Trump views it as a means to eliminate the budget deficit. By February 1, America could face another shutdown, as Republicans and Democrats only agreed to funding until that date in November.

Democrats demand the removal of any cuts to healthcare and social programs from the budget, while Trump refuses to change anything in his "One Big, Beautiful Bill." Therefore, the budget has been patched together, but it is not a real solution to the problem. Consequently, we could see a new shutdown at the beginning of next year. Each subsequent shutdown under Trump sets a record for duration, so the prospects for February do not look promising.

Wave Analysis for EUR/USD:

Based on my analysis of EUR/USD, I conclude that the instrument continues to develop an upward trend segment. Donald Trump's policies and the Federal Reserve's monetary policy remain significant factors in the long-term decline of the U.S. currency. The targets for the current trend segment could extend up to the 25th figure. The current upward wave collection is beginning to develop, and I hope we are currently witnessing the formation of an impulse wave collection, which is part of the global wave 5. In this case, we should expect growth with targets around 1.1825 and 1.1926, corresponding to 200.0% and 261.8% on the Fibonacci scale.

Wave Analysis for GBP/USD:

The wave structure for GBP/USD has changed. The downward corrective structure a-b-c-d-e in C at 4 appears to be complete, as does the entire wave 4. If this is indeed the case, I expect the main trend segment to resume construction, 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, which equates to 76.4% and 61.8% on the Fibonacci scale. These targets have been reached. Wave 3 or C continues its formation, and there is currently a fourth attempt to break the 1.3450 mark, which corresponds to 61.8% on the Fibonacci scale.

Key Principles of My Analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often lead to changes.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There can never be 100% certainty in market direction. 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. The Dollar is Again in Disfavor: The Pair Remains Within the 17 Figure

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The EUR/USD pair was unable to break through the 1.1800 resistance level (the upper line of the Bollinger Bands indicator on the D1 timeframe) last week, after which sellers took the initiative, driving the price to the 17 figure base. However, they also could not enter the area of the 16 figure, let alone surpass the support level of 1.1690 (the upper boundary of the Kumo cloud on the same timeframe). Friday's trading closed at 1.1704.

Overall, the pair declined last week on fairly shaky grounds. The US Dollar Index strengthened its position for three days (Wednesday to Friday), but objective factors did not support this dynamic. A key role here was played by subjective assessments of market participants, most of whom viewed the situation as "half full" rather than "empty." For instance, despite the US unemployment rate rising to 4.6% in November, its highest level since September 2021, traders focused on employment figures that were slightly stronger than expected (+64,000 instead of +50,000).

Although this component of the report was in the "green zone," there are no grounds for optimism. Firstly, a 64,000 job increase already indicates a cooling of the US labor market. For example, in November 2024, 212,000 jobs were created in the United States (and 307,000 in December).

Secondly, existing BLS (Bureau of Labor Statistics) calculation models may overstate the job growth figures. According to Federal Reserve Chairman Jerome Powell, official data may be "too optimistic." He estimates that the exaggeration could be quite significant – approximately 50,000 to 60,000 jobs monthly. This is due to traditional counting methods not fully accounting for digitalization and automation, as well as structural changes in the labor market, particularly the dynamics of non-standard/part-time employment. For example, the BLS does not always correctly account for freelance work, temporary contracts, and employment on platforms such as Uber or Upwork. Considering all these discrepancies, the real picture may be much gloomier – according to some estimates, the United States is actually losing 15,000 to 20,000 jobs monthly since the spring of this year.

Thus, the November NFP report is not an ally of the greenback, as it contains no prerequisites for its growth.

The same can be said for the November CPI report, which was also published last week. It reflected a slowdown in the overall consumer price index to 2.7% year-on-year (after rising to 3.0% in October) and a slowdown in the core index to 2.6% (after rising to 3.0% in the previous month).

Despite the "tolerant" market reaction and discussions about technical factors (resulting from the consequences of the shutdown), the structure of the November CPI contains signs of a sustainable slowdown in inflation, especially in core and demand-sensitive components. For example, the services sector—especially housing, rent, and medical services—is highly correlated with domestic demand and wages. A slowdown in price growth here indicates that demand for goods and services within the economy is cooling. It is worth returning to the NFP report, which reflected a slowdown in the "wage" indicator. Hourly earnings showed very weak growth – only 0.1% month-on-month (the slowest growth rate since July 2024) and 3.5% year-on-year (the lowest value of the indicator since May 2021).

All this suggests that the market misinterpreted key releases from the past week in favor of the US dollar. At the moment, the labor market and inflation seemed to have strengthened the position of "moderate hawks" advocating a wait-and-see approach. However, in reality, the NFP and CPI reports have strengthened the position of "doves" advocating further monetary policy easing.

For this reason, the EUR/USD bears were unable to enter the 16-figure area, despite the downward price movement last week. For the same reason, the EUR/USD buyers have taken the initiative today amid overall dollar weakness. The information background for the greenback remains negative – conflicting CPI/NFP reports have failed to "redraw" the fundamental picture for the US currency. Therefore, long positions on downward price dips remain relevant.

From a technical perspective, the pair is positioned between the middle and upper lines of the Bollinger Bands indicator on the daily chart, and above all lines of the Ichimoku indicator, which has formed a bullish "Parade of Lines" signal. Corrective pullbacks should be used to open long positions with targets of 1.1750 (upper line of the Bollinger Bands on H4) and 1.1800 (upper line of the Bollinger Bands on D1).

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

The Euro Doesn't Need Upheavals

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Why focus only on the negatives? Let's talk about the positives! Following the European Central Bank's stance, the banks of Italy and France raised their GDP forecasts. Every member of the Governing Council is indicating a stronger eurozone economy than expected and noting that the ECB is in a comfortable position. The ECB has managed to tame inflation, which instills hope for a recovery in the upward trend in EUR/USD.

A Bloomberg insider report after the December ECB meeting noted that informed sources suggest the end of the monetary easing cycle. Unless there are any shocks, rates will remain unchanged. According to Governing Council member Gediminas Simkus, many view a 2% deposit rate as a neutral level—not stimulating but not holding back the economy either.

ECB Deposit Rate Forecasts

His colleague Pierre Wunsch pointed out that a strong euro and flows of cheap goods from China are having less impact on European inflation than previously thought. The monetary policy is in good shape. In fact, most Bloomberg experts believe that the monetary expansion cycle is over.

The Bank of Italy raised its GDP forecast for 2027 from 0.7% to 0.8%, citing that the economy is successfully resisting all prevailing headwinds. The Bank of France went even further, raising its GDP estimates not only for 2026 from 0.9% to 1.0%, but also for the current year from 0.7% to 0.9%. The economy shows resilience to both political turbulence and fiscal uncertainty.

France's GDP Forecasts

Thus, the euro looks to the future with optimism. Bulls in the EUR/USD market are betting on a stronger-than-expected economy in the currency bloc and the ECB's intention to end the cycle of monetary easing, possibly even transitioning to rate hikes.

The Federal Reserve is far behind the ECB in this regard. Inflation is not anchored, and GDP is growing rapidly, with expectations of a 3.2% expansion in the third quarter. The labor market is cooling. It is no surprise that some FOMC officials are discussing a prolonged hold on the federal funds rate at 3.75%, while others are ready to reduce it, citing that consumer prices tied to tariffs will slow in 2026 and that rising unemployment could become uncontrollable.

A pause in the Fed's monetary easing cycle plays into the U.S. dollar's favor. However, the divergence in monetary policy will manifest sooner or later. So why wait? Wouldn't it be easier to start buying EUR/USD at the market rate?

Technically, on the daily chart of the primary currency pair, the bounce from the dynamic support in the form of the moving average has allowed the bulls to regain control. A breakout of resistance at 1.176 will provide a foundation for forming long positions in EUR/USD.

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

The Pound Benefits from Broad Dollar Weakness

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The Bank of England lowered the interest rate last week by 0.25% to 3.75%, which aligned with forecasts. The votes were split 5-4, indicating a lack of consensus. The results of the meeting did not include new forecasts.

Following weak UK inflation data for November, there was a possibility that the number of votes for a rate cut would increase, suggesting the BoE was ready to shift toward a more dovish monetary policy. However, this did not happen; those voting against the cut pointed out to the Committee that wage growth remains too high, raising uncertainty about whether the current policy is restrictive and whether another inflation spike should be expected. The Committee remains divided, and the future trajectory of interest rates is unclear.

BoE Governor Bailey tried to remain neutral, with the general sentiment that further rate cuts will require additional signs of inflation slowing, suggesting the market is not expecting any automatic cuts. Everything will depend on incoming data. Given these considerations, it can be argued that the pound received support, as the December rate cut was priced in and another cut is now in serious doubt. Currently, the market expects one more rate cut next year—this time, the final one—bringing the rate down to 3.5%, but this is not expected to occur before April.

The intrigue here is that even with a significant decrease in inflation in November, two key indicators, namely wage growth and service prices, remain too high, increasing the likelihood of a "wage-price spiral" that will keep inflation above target levels. This conclusion seems evident, and the only question is how long this situation will persist.

Overall, neither the pound nor the dollar has strong reasons to strengthen. However, while the pound's situation is somewhat predictable, the dollar faces the risk of a more substantial decline. There may be an acceleration of capital outflows from U.S. assets, which could lead to a rapid economic downturn or even a stagflation shock. As long as the market does not revise its expectations, we will maintain a position wherein GBP/USD experiences weak bullish pressure.

Positioning for the pound is bearish, but short-term factors support a calculated price above the long-term average.

The pound has returned to the 1.3450/70 resistance zone, although in the previous review, we expressed doubts about whether it could reach it. Nevertheless, the overall weakness of the dollar played a role, and now the chances for the pound to continue rising appear stronger. We expect an attempt to break above 1.3470, with a further target of 1.3525, and if the upward momentum continues, we anticipate seeing GBP/USD near the resistance zone of 1.3620/40. Considering the thin market and reduced activity due to the holidays, the likelihood of rapid growth is low.

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