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How to Trade the GBP/USD Currency Pair on January 2? Simple Tips and Trade Review for Beginners

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Trade review for Wednesday:

1H chart of the GBP/USD pair

The GBP/USD pair traded on Wednesday in a manner similar to EUR/USD. Movements were chaotic and mixed, but volatility remained relatively low. The macroeconomic and fundamental backdrop was absent, and the technical picture is currently quite contradictory. We believe the holiday period should not be taken into account, since the market trades somewhat erratically at that time. The overall picture remains unchanged — an upward trend across all timeframes. Therefore, we expect the first macroeconomic data of the new year to arrive next week, at the end of the holidays. The market may begin to move more deliberately as early as Monday, providing clear trading signals and profits. The pound's prospects remain much more attractive than the dollar's.

5M chart of the GBP/USD pair

On the 5-minute timeframe, the pound generated several trade signals on Wednesday. Was it worth trading them on December 31 before the market close? Naturally, the signals were not the best, and volatility has been disappointing for weeks and months. During the holiday week, it became even lower. We believe it is more reasonable to start trading in earnest on Monday, January 5.

How to trade on Friday:

On the hourly timeframe, GBP/USD closed below the trendline, so formally, technical analysis points to a new decline of the pound at the start of the year. However, there are no global reasons for medium-term dollar strength, so we expect movement only to the north. Overall, we also expect the resumption of the 2025 global uptrend for the pair, which could take it to the 1.4000 mark within the next couple of months.

On Friday, beginner traders can consider new long positions if the price rebounds from the 1.3437–1.3446 area, with a target of 1.3529–1.3543. Short positions become relevant if the price closes below the 1.3437–1.3446 area, with a target of 1.3319–1.3331.

On the 5-minute timeframe, you can trade using the levels 1.2913, 1.2980–1.2993, 1.3043, 1.3096–1.3107, 1.3203–1.3212, 1.3259–1.3267, 1.3319–1.3331, 1.3437–1.3446, 1.3529–1.3543, 1.3574–1.3590. No significant events are scheduled in the UK or the US for Friday, and market volatility may remain weak. The market has not fully recovered from the holidays.

Main rules of the trading system:

1. Signal strength is judged by the time required for the signal (rebound or breakout) to form. The less time required, the stronger the signal.
2. If two or more trades near a level were opened on false signals, then all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened during the period between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
5. On the hourly timeframe, MACD signals should be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (5 to 20 pips), they should be considered an area of support or resistance.
7. After a 20-pip move in the correct direction, set Stop Loss to breakeven.

What is on the chart:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that display the current tendency and show the preferred trading direction.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can strongly affect the currency pair's movement. Therefore, during their release, it is recommended to trade as cautiously as possible or exit the market to avoid a sharp reversal of price against the prior move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and sound money management are the keys to long-term success in trading.

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

How to Trade the EUR/USD Pair on January 2? Simple Tips and Trade Review for Beginners

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Trade review for Wednesday:

1H chart of the EUR/USD pair

The EUR/USD currency pair showed nervous, mixed movements on Wednesday, but recall that it was December 31. That says it all. For obvious reasons, there were no macroeconomic or fundamental events that day in either the US or the Eurozone; the market closed in the evening and reopened only last night, then closed again in the evening for the weekend. Essentially, the holidays are over, but the holidays continue. Formally, the price this week breached the ascending trendline, but we do not treat this as a trend change. EUR/USD continues to trade near the upper boundary of the sideways channel on the daily timeframe, between 1.1400 and 1.1830. Very soon (when the market fully "recovers" from the holidays), we expect a new test of this area. Next week, traders will begin receiving macroeconomic data, so moves may become stronger and more attractive.

5M chart of the EUR/USD pair

On the 5-minute timeframe, two sell trade signals were formed on Wednesday in the form of two rebounds from the 1.1745–1.1755 area. Beginner traders could have reasonably traded those signals if they had wished to open trades several hours before market close and before the New Year. Last night, the pair broke through the 1.1745–1.1755 area, which is a buy signal. However, moves today may again be very weak, so we do not expect strong euro growth.

How to trade on Friday:

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

On Friday, beginner traders can trade from the 1.1745–1.1754 area. A close above this area allows opening long positions with a target of 1.1808. A close below this area allows opening shorts with a target of 1.1666.

On the 5-minute timeframe, consider the levels 1.1354–1.1363, 1.1413, 1.1455–1.1474, 1.1527–1.1531, 1.1550, 1.1584–1.1591, 1.1655–1.1666, 1.1745–1.1754, 1.1808, 1.1851, 1.1908, 1.1970–1.1988. No important events or releases are scheduled in the EU or the US for Friday. Thus, we may again face very weak moves today.

Main rules of the trading system:

1. Signal strength is assessed by the time required for the signal (rebound or breakout) to form. The less time required, the stronger the signal.
2. If two or more trades near a level were opened on false signals, then all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
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, MACD signals should be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are too close to each other (from 5 to 20 pips), they should be considered as an area of support or resistance.
7. After the price moves 15 pips in the correct direction, set the stop loss to breakeven.

What is on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit levels can be placed near them.

Red lines — channels or trendlines that display the current tendency and show the preferred trading direction.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always included in the news calendar) can significantly affect the movement of the currency pair. Therefore, during their release, one should trade as cautiously as possible or exit the market to avoid a sharp reversal of price against the prior move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and sound money management are the keys to long-term success in trading.

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

Trading Recommendations and Trade Review for GBP/USD on January 2. The Pound Rebounded and Is Ready to Rise

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Analysis GBP/USD 5M

The GBP/USD currency pair formed important signals even on the hourly timeframe on Wednesday. Recall that in the fundamental articles, we spoke about important technical signals for both the euro and the pound on higher timeframes. As we can see, important signals were also formed on the lower timeframes. In particular, the pound rebounded on Friday from the Senkou Span B line, a strong support level for the price. Earlier, the pair broke the ascending trendline, but we believe that a trend change to a downtrend did not occur. At present, the price remains above the Ichimoku indicator lines, so the upward trend persists. This week, there are no major reports or events in either the UK or the US, and the market will resume trading in full on Monday.

In general, the pound continues to "look" upward. Already next week, important US labor market and unemployment data will be published, so the dollar may again come under pressure. However, it was under pressure throughout 2025. In 2026, little is likely to change fundamentally, as global fundamental factors remain the same.

On the 5?minute timeframe on Friday several trade signals were formed, but we do not even see the point in considering them. It is unlikely that anyone opened positions on December 31 in the face of a complete information vacuum.

COT report

COT reports for the pound show that, in recent years, commercial traders' sentiment has fluctuated. The red and blue lines showing the net positions of commercial and non?commercial traders constantly cross and, in most cases, remain close to zero. At present, the lines are moving apart, but the dominant players are now non?commercial traders with sales. Speculators are increasingly selling the pound, but, as we already said, it does not matter how low the demand for the British currency is. For the US dollar, it is often even lower.

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

In 2025, the pound rose significantly, but one should understand that the reason is one: Donald Trump's policy. As soon as this reason is neutralized, the dollar may begin to rise, but nobody knows when.

Analysis GBP/USD 1H

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

For January 2, we highlight the following important levels: 1.2863, 1.2981–1.2987, 1.3042–1.3050, 1.3096–1.3115, 1.3201–1.3212, 1.3307, 1.3369–1.3377, 1.3437, 1.3533–1.3548, 1.3584. The Senkou Span B (1.3421) and Kijun?sen (1.3464) lines can also be sources of signals. It is recommended to move the stop loss to breakeven when the price moves 20 pips in the correct direction. Ichimoku indicator lines may shift during the day, which should be taken into account when determining trading signals.

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

Trading recommendations:

Today, traders can consider selling if the price closes below the critical line, with targets at 1.3437 and Senkou Span B. Long positions are already relevant since the price closed above the Kijun?sen line, with a target of 1.3533–1.3548.

Explanations for illustrations:

• Support and resistance price levels (resistance/support) — thick red lines near which movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines — Ichimoku indicator lines transferred to the hourly timeframe from the 4?hour. They are strong lines.
• Extremum levels — thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow lines — trend lines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts — the size of the net position of each trader category.

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

Trading Recommendations and Trade Review for EUR/USD on January 2. Holidays Are Over

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Analysis EUR/USD 5M

The EUR/USD currency pair traded with minimal volatility on Wednesday, as expected, given it was December 31. It is difficult to even guess who opened trades on December 31, especially in the second half of the day, so the whole day takes on a rather formal, thoroughly holiday feel. Nevertheless, it should be noted that EUR/USD closed on the hourly timeframe below the ascending trendline and below the Ichimoku indicator lines. We believe holiday moves should not be treated too seriously. Today, the price may already close above the Kijun-sen and Senkou Span B lines, indicating the resumption of the uptrend. The macroeconomic and fundamental backdrop was absent, and news will begin to arrive for traders on Monday, January 5.

On the 5-minute timeframe on Friday, one sell trade signal was formed. During the US session, a few hours before market close, the price rebounded from below from the 1.1750–1.1760 area and the Kijun-sen line. After that, the pair moved about 20 pips in the desired direction, which could have been earned if someone opened positions a few hours before the New Year.

COT report

The latest COT report is dated December 16. The illustration above clearly shows that the net position of non?commercial traders was bullish for a long time; bears barely moved into dominance at the end of 2024 but very quickly lost it. Since Trump took office for a second time as US president, only the dollar has been falling. We cannot say that the decline of the US currency will continue with 100% probability, but current world developments point to that scenario. The red and blue lines are diverging, indicating the bulls' strong dominance.

We still do not see any fundamental factors for the strengthening of the euro, while there are plenty of factors for the decline of the US currency. The global downtrend still persists, but what does it matter where the price moved over the past 17 years? Over the last three years, only the European currency has been rising, and that is also a trend.

The placement of the red and blue indicator lines continues to indicate the preservation and strengthening of the bullish tendency. During the last reporting week, the number of longs among the Non?commercial group increased by 8,900, and the number of shorts by 2,700. Accordingly, the net position for the week grew by 6,200 contracts.

Analysis EUR/USD 1H

On the hourly timeframe, EUR/USD remains in an upward trend. The upper line of the sideways channel 1.1400–1.1830 was tested twice, so in the near term, we may observe a technical decline, as the daily timeframe flat remains. However, in the last days of the outgoing year we observed a downward correction, and in the new year bullish pressure may intensify. We expect euro growth to resume despite the breach of the trendline.

For January 2 we highlight the following trading levels — 1.1234, 1.1274, 1.1362, 1.1426, 1.1542, 1.1604–1.1615, 1.1657–1.1666, 1.1750–1.1760, 1.1846–1.1857, 1.1922, 1.1971–1.1988, as well as the Senkou Span B line (1.1755) and the Kijun-sen (1.1762). Ichimoku indicator lines may shift during the day, which should be taken into account when determining trading signals. Do not forget to move the Stop Loss to breakeven if the price has moved 15 pips in the correct direction. This will protect against possible losses if the signal turns out to be false.

No important events or releases are scheduled in the EU or the US for Friday. Movements may again be weak and non?trending during the day.

Trading recommendations:

On Friday, traders can trade from the 1.1750–1.1760 area. A rebound in price from it would make short positions relevant, with a target zone of 1.1657–1.1666. A close above it would allow opening longs with a target of 1.1810–1.1830.

Explanations for illustrations:

• Support and resistance price levels (resistance/support) — thick red lines near which movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines — Ichimoku indicator lines transferred to the hourly timeframe from the 4?hour. They are strong lines.
• Extremum levels — thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow lines — trend lines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts — the size of the net position of each trader category.

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

Overview of the GBP/USD Pair. January 2. Double "Bullish" Signal for the Pound

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The GBP/USD currency pair traded quite actively on Wednesday for New Year's Day. Volatility reached as high as 74 pips, which is, of course, a bit low for the British currency but still significantly higher than for the euro. For most of the day, the pound declined, suggesting a correction was in the offing. But by the end of the day, month, and year, it nevertheless moved back up. Not just "moved back," but "rebounded," which is in itself very important.

In the EUR/USD article, we mentioned an important technical buy signal. For GBP/USD, there were two such signals. The mere fact that buy signals formed on both currency pairs already says a lot. It is no secret that the euro and the pound most often trade in the same direction. Therefore, two identical signals increase the probability that they will work out.

For the pound, the CCI indicator also formed another "bullish" divergence. The seventh or eighth such divergence in recent months, visible even on the 4-hour chart, although this entire period does not even fit on the illustration. Another bullish divergence on an uptrend is a signal of trend continuation. In addition, the CCI entered the oversold area, which is also a buy signal. Thus, on December 31, three buy signals were generated across the euro and the pound in a single day.

This brings us back to the sharp rebound upward on Friday. Such candles are usually reversal patterns and actually indicate liquidity being taken out. Simply put, the price fell to levels where large pending buy orders were placed. The orders triggered — the price shot up. Therefore, we believe that we will already see growth in the pair today, and next week, accompanied by macroeconomic data on the labor market, unemployment, and US business activity, the dollar may well continue to fall.

Recall that, in the medium term, the uptrend remains despite a prolonged, fairly strong correction. The price has crossed the Senkou Span B and Kijun-sen on the daily timeframe, which is another signal of an upward trend. Thus, again, everything indicates that the pound will rise and the dollar will fall.

The average volatility of the GBP/USD pair over the last five trading days is 58 pips. For the pound/dollar, this value is "medium-low." On Friday, January 2, we therefore expect movement inside a range bounded by 1.3396 and 1.3510. The higher linear regression channel has turned upward, indicating trend recovery. The CCI entered oversold territory 6 times in recent months and formed numerous bullish divergences, repeatedly signaling a resumption of the uptrend.

Nearest support levels:

S1 – 1.3428

S2 – 1.3367

S3 – 1.3306

Nearest resistance levels:

R1 – 1.3489

R2 – 1.3550

Trading recommendations:

The GBP/USD pair is attempting to resume the 2025 uptrend, and its long-term prospects have not changed. Donald Trump's policies will continue to put pressure on the dollar, so we do not expect the US currency to appreciate. Thus, long positions with a target of 1.3550 remain relevant for the near term while the price is above the moving average. A price below the moving average allows consideration of small short positions on technical grounds, with targets at 1.3396 and 1.3367. 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 global positive factors.

Explanations for illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is strong.
• The moving average line (settings 20, 0, smoothed) indicates the short-term trend and the direction in which trading should currently proceed.
• Murrey levels are target levels for moves and corrections.
• Volatility levels (red lines) indicate the likely price channel the pair will trade in over the next 24 hours, based on current volatility indicators.
• The CCI indicator — its move into the oversold area (below -250) or into the overbought area (above +250) indicates that a trend reversal to the opposite direction is imminent.

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

Overview of the EUR/USD Pair. January 2. The Euro May Begin to Rise Already in the First Days of 2026

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On Wednesday, December 31, the EUR/USD currency pair continued a weak downward movement with total volatility of 39 pips. Many analysts feared that during the New Year and Christmas holidays, the market could deliver strong moves due to its own "thinness." However, those fears were unfounded. Traders behaved as holidays dictate — that is, practically not at all. Over the last five trading days, the average volatility is 37 pips, which aptly reflects the holiday status of these days.

Although the holidays are over, we consider Friday a holiday as well. Think about it: this week had three working days immediately after Christmas, then New Year's Day, then a day off, then Friday, and two more days off. Why should the market force events on a Friday that is frankly torn out of the general flow if it can wait until Monday? With the new week, macroeconomic data and the fundamental backdrop will return to the market. Therefore, we do not expect any sharp or strong moves today.

We must note several important technical factors. Lately, we have regularly stated that the uptrend remains intact in the medium term. It also persists on the 4-hour timeframe, despite the close below the moving average. But pay attention to the CCI indicator. It has once again formed a "bullish" divergence, which, on an uptrend, means nothing other than a warning about the resumption of the trend. Of course, the correction could be stronger than it is now, but even then, one should expect at least a slight upward price rebound.

On Monday, the U.S. will begin publishing important data on the labor market, unemployment, and ISM business activity. We do not want to heap ashes on the dollar's head in advance, but who now believes these reports will show strong figures? Of course, dollar growth could be supported by weak figures that come in above forecasts. However, in any case, everyone on the market understands that the U.S. labor market remains in a stupor, so the dollar is unlikely to receive support from these reports.

In this case, a technical signal for a new dollar decline may coincide with the macroeconomic backdrop. As before, we expect only a rise in EUR/USD and the end of the six-month flat in the 1.1400–1.1830 range.

The average volatility of the EUR/USD pair over the last five trading days as of January 1 is 37 pips, which is considered "low." We expect the pair to trade between 1.1700 and 1.1774 on Friday. The higher linear regression channel is turning upward, but the flat on the daily timeframe persists. The CCI entered the oversold area twice in October (!!!), but in early December, it visited the overbought area. We have already seen a slight pullback.

Nearest support levels:

S1 – 1.1719

S2 – 1.1658

S3 – 1.1597

Nearest resistance levels:

R1 – 1.1780

R2 – 1.1841

Trading recommendations:

The EUR/USD pair has closed below the moving average, but an uptrend remains on all higher timeframes, while the daily timeframe has been flat for the sixth month in a row. The global fundamental backdrop remains highly significant for the market and negative for the dollar. Over the past six months, the dollar has occasionally shown weak gains, but exclusively within a sideways channel. It has no fundamental basis for long-term strengthening. With the price below the moving average, one can consider small short positions on purely technical grounds with targets at 1.1700 and 1.1658. Above the moving average, long positions remain relevant with a target of 1.1830 (the upper line of the flat on the daily timeframe), which has already effectively been worked out. Now the flat needs to end.

Explanations for illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is strong.
• The moving average line (settings 20, 0, smoothed) indicates the short-term trend and the direction in which trading should currently proceed.
• Murrey levels are target levels for moves and corrections.
• Volatility levels (red lines) indicate the likely price channel the pair will trade in over the next 24 hours, based on current volatility indicators.
• The CCI indicator — its move into the oversold area (below -250) or into the overbought area (above +250) indicates that a trend reversal to the opposite direction is imminent.

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

Trading Signals for GOLD for January 1-4, 2026: buy above $4,272 (200 EMA - rebound)

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Gold is trading around $4,318 within a downtrend channel formed since December 29. Gold is under bearish pressure, so we could expect it to continue falling in the coming days until it reaches strong support around $4,272.

If gold rebounds around $4,270 in the coming days, it could be seen as an opportunity to open long positions with a target at $4,375.

A sharp break below the 200 EMA and below the support formed since December 11 could enable a fall towards the 7/8 Murray located at $4,218. The instrument could eventually reach the psychological level of $4,000.

If the bullish force prevails and gold consolidates above $4,375, we could expect it to reach $4,437 in the coming days and, finally, return to the +1/8 Murray located at $4,531.

The Eagle indicator is showing signs of overselling, so it is likely that gold will continue to fall until it finds good support. From that level, a strong technical rebound could follow.

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

Trading Signals for EUR/USD for January 1-4, 2026: sell below 1.1760 (21 SMA - 4/8 Murray)

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EUR/USD is trading around 1.1745 after a technical rebound when it reached a low of around 1.1718.

On the H4 chart, we can see that the euro has been under strong downward pressure since December 23. If EUR/USD reaches the top of the downtrend channel around 1.1763, it could resume its downward cycle, and we expect it to reach the 200 EMA around 1.1692 in the coming days.

If there is a break above the downtrend channel and the euro consolidates above 1.1760, we could expect it to return to its high around 1.1804 and could even reach the 6/8 Murray around 1.1840.

A sharp break below 4/8 Murray could accelerate a downward movement, and EUR/USD could reach the 2/8 Murray around 1.1596 in the short term.

The Eagle indicator is showing positive signals, so we believe that the EUR/USD pair could continue to trade above 1.1700 in the coming days.

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

Trading Signals for BITCOIN for January 1-4, 2026: buy above $87,500 (21 SMA - 2/8 Murray)

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Bitcoin is trading at $87,841, above the 2/8 Murray and the 21 SMA. BTC has been consolidating since mid-December. An upward momentum is likely to occur in the coming hours until the price reaches $89,643, where the 200 EMA is located and which also coincides with the top of the downtrend channel formed since December 7.

If the bullish force prevails in the coming hours and Bitcoin consolidates above $89,643, we could look for opportunities to buy with targets at about $93,750 around the 3/8 Murray.

On the contrary, in case of a sharp break below $87,500, there could be a bearish acceleration, and Bitcoin could reach the 1/8 Murray around $81,250.

Given that Bitcoin is consolidating above $87,500 as long as the price remains above the 2/8 Murray, there is a likelihood of reaching $90,000. A break above the 200 EMA could favor an upward movement. Hence, BTC could reach the psychological level of $100,000 in the medium term.

The symmetrical triangle pattern could give us a signal for a strong movement in the coming days, so we must be alert to a break below $87,500 or above $89,500.

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

Trading Signals for ETHEREUM for January 1-4, 2026: buy above $2,960 (21 SMA - 2/8 Murray)

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Ethereum is trading around $2,980 above the 21 SMA and within a downtrend channel formed since early December. On the H4 chart, we can see a consolidation of Ether, and a sharp break above the 200 EMA around $3,034 is likely to occur.

On the H4 chart, we can see the formation of a symmetrical triangle. Therefore, if ETH/USD consolidates above the psychological level of $3,000 in the coming days, we could expect it to reach the 3/8 of the Murray level at $3,437.

Conversely, if ETH/USD falls below the symmetrical triangle pattern, we could expect a drop towards the 1/8 Murray at $2,875. Finally, the instrument could reach the bottom of the downtrend channel around $2,590.

The Eagle indicator is showing positive signals, so we should expect confirmation above $3,000 to buy or below $2,930 to sell.

Our outlook remains negative, so we will look for opportunities to sell if Ether falls below $2,950.

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

The euro sets the winning point

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

EuroStoxx 600 performance

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

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

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

Dynamics of LNG supplies to Europe

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

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

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

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EUR/USD Analysis on December 31, 2025

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

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

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

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

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

General Conclusions

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

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

The main principles of my analysis:

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

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

GBP/USD Analysis on December 31, 2025

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

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

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

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

General conclusions

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

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

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

The main principles of my analysis:

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

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

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

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

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

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

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

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

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

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

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

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

EUR/USD Forecast and Trading Advice:

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

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

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

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

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

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

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

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

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

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

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

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

GBP/USD Forecast and Trading Advice:

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

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

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

EUR/USD. Analysis and Forecast

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

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

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

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

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

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

EUR/USD Forecast on December 31, 2025

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

The wave situation on the hourly chart remains simple. The last completed upward wave failed to break the peak of the previous wave, and the new downward wave has not yet broken the previous low. Thus, the trend officially remains "bullish." It would be hard to call it strong, but in recent weeks the bulls regained confidence, and then the holidays began. Easing of the Fed's monetary policy will put pressure on the dollar in 2026, while the ECB will not create any problems for the euro. The "bullish" trend will end if the pair consolidates below the 1.1718 level and the last three lows.

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

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

Commitments of Traders (COT) Report:

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

For thirty-three consecutive weeks, large players were getting rid of short positions and increasing long ones. Then the "shutdown" began, and now we are seeing the same picture: bulls continue to build long positions. Donald Trump's policies remain the most significant factor for traders, as they cause numerous problems that will have a long-term and structural impact on America—for example, deterioration of the labor market. Traders fear a loss of the Fed's independence in 2026 under pressure from Trump and amid Jerome Powell's resignation in May.

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

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

EUR/USD Forecast and Trading Advice:

Selling the pair was possible on a rebound from the 1.1795–1.1802 level on the hourly chart with a target of 1.1718. These trades can be kept open today. A close below 1.1718 will allow holding the trades with a target of 1.1656. Buy trades can be opened on a rebound from the 1.1718 level with a target of 1.1795.

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

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

GBP/USD Forecast on December 31, 2025

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

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

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

On the 4-hour chart, the pair consolidated above the 100.0% corrective level at 1.3435, which allows expectations of continued growth toward the next Fibonacci level of 127.2% at 1.3795. A "bearish" divergence has formed on the CCI indicator, which caused a reversal in favor of the U.S. dollar and a small decline toward the support zone of 1.3369–1.3435. A rebound of quotes from the 1.3435 level would allow expectations of renewed growth in the pound.

Commitments of Traders (COT) Report:

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

In my view, the pound still looks less "dangerous" than the dollar. In the short term, the U.S. currency may enjoy demand in the market from time to time, but not in the long term. Donald Trump's policies have led to a sharp deterioration in the labor market, and the Fed is forced to pursue monetary easing in order to stop the rise in unemployment and stimulate job creation. For 2026, the FOMC does not plan significant monetary easing, but at the moment no one can be sure that the Fed's stance will not shift to a more "dovish" one during the year.

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

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

GBP/USD Forecast and Trading Advice:

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

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

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

Recommendations for Trading on the Cryptocurrency Market for December 31

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

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

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

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

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

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

Bitcoin

Scenario for buying

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

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

Scenario for selling

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

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

Ethereum

Scenario for buying

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

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

Scenario for selling

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

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

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

South Korea plans to take up issue of stablecoins

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

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

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

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

Trading recommendations

Bitcoin technicals

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

Ethereum technicals

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

What's on the chart

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

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

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

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

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Trade review and tips for trading the Japanese yen

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

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

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

Buy scenarios

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

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

Sell scenarios

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

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

What is on the chart:

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

Important

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

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

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

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

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Trade review and tips for trading the British pound

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

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

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

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

Buy Scenarios

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

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

Sell Scenarios

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

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

What is on the chart:

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

Important

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

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

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

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

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Trade review and tips for trading the euro

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

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

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

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

Buy scenarios

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

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

Sell scenarios

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

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

What is on the chart:

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

Important

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

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

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

Intraday Strategies for Beginner Traders on December 31

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

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

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

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

Momentum Strategy (breakout):

For EUR/USD

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

For GBP/USD

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

For USD/JPY

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

Mean Reversion Strategy (pullback):

For EUR/USD

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

For GBP/USD

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

For AUD/USD

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

For USD/CAD

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

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

Market weary of Magnificent Seven stocks

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

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

Performance of the top S&P 500 companies

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

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

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

Market expectations for the federal funds rate

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

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

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

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