The US CPI report yesterday came in line with
expectations and sealed the 25 bps cut next week with the probabilities
standing around 97%. The Nasdaq rallied strongly as there were fears of
potentially higher than expected data and the hedges into the CPI release got
unwound.

Overall, the market’s
pricing remains largely unchanged around three rate cuts by the end of 2025. We
will likely need stronger evidence of inflation re-accelerating to price out
the remaining rate cuts. For now, the conditions for further upside remain in
place.

In fact, Trump’s policies should
be a positive driver for growth in 2025 and with the Fed remaining in an easing
cycle, growth should remain positive and might even accelerate as seen already recently
by the Atlanta Fed GDPNow indicator.

The risk in 2025 will be
inflation and the Fed’s reaction function. Right now, the Fed’s reaction
function is that a strong economy would warrant a slower pace in the easing
cycle and not a tightening. That should still be supportive for the stock
market.

If the Fed’s reaction
function were to change to a potential tightening, then that will likely
trigger a big correction in the stock market on expected economic slowdown. For
now, we remain in a “buy the dip” environment.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq extended the rally into a new all-time high following the
US CPI release. From a risk management perspective, the buyers will have a much
better risk to reward setup around the major trendline. The sellers, on the other hand, will
want to see the price breaking lower to target a drop into the 20381 level.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor trendline defining the current bullish momentum on
this timeframe. If we get a pullback into it, we can expect the buyers to lean
on the trendline to position for new highs, while the sellers will look for a break
lower to position for a break below the major trendline.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we have
the recent high that might act as support if the bullish momentum remains strong.
The buyers will likely step in around the support to target new highs, while
the sellers will look for a break lower to position for a drop into the trendline.
A hot US PPI today might provide a pullback, while soft figures should trigger
another rally. The red lines define the average daily range for today.

Upcoming Catalysts

Today we get the latest US jobless claims figures and the US PPI report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The crypto market is flexing its muscles today, showing a strong rebound that’s got traders buzzing! Bitcoin (BTC) is leading the way, up 1.65% to $98,259.15—just shy of that magical $100K mark. Ethereum (ETH) isn’t slouching either, climbing 2.37% to $3,716.60, while Solana (SOL) is stealing the show with a massive 5.31% pump to $225.11. Let’s break it down 👇:

💥 What’s Fueling This Rally?

1. The Short Squeeze Effect:
   • Did someone say short squeeze? Yup, big-time shorts are getting liquidated, especially on BTC ($6.96M in just the last 4 hours!). This forced buying pressure is helping push prices higher across the board. 🔥
   • XRP also saw $2.59M in short liquidations, helping it jump a whopping 7.46% today. Watch out—those XRP bulls are on fire! 🔥

2. Regulatory Optimism:

   • The crypto world is buzzing with hope for more friendly policies under a new U.S. administration. Ripple’s XRP is leading this charge, with traders betting on smoother waters ahead for crypto regulations. 🌊

3. Big Players Are Back:

   • Institutions like MicroStrategy are doubling down, with their latest massive Bitcoin buy signaling they’re in it for the long haul. This is confidence-building for everyone, from whales to weekend traders. 🐋➡️🐟

4. Altcoins Are Shining:

   • Solana’s ecosystem upgrades are paying off big time. It’s up 5.31% and doesn’t look like it’s slowing down. Even Dogecoin (DOGE) is wagging its tail, rising 2.25%—guess the memecoin magic is alive! 🐶✨

🔎 Liquidations: The Secret Sauce

Those pesky short-sellers just got rekt! 🚨 The stats show significant liquidation volumes, particularly for BTC, ETH, and XRP shorts. And when shorts get crushed, prices tend to pump hard. It’s like rocket fuel for the bulls. 🚀

🌟 Why Should You Care?

• Bitcoin is on the edge of greatness: It’s flirting with $100K, and if it breaks through, the FOMO wave could be huge. 🌊
• Ethereum is gaining steam: Eyes are on $3,750 as the next hurdle for ETH.
• Solana’s killing it: If you’ve been sleeping on SOL, today might be your wake-up call. ☀️

📈 What’s Next?

• Keep an eye on BTC: If it breaks $100K, all bets are off—it could go parabolic. 📡 With that, the ForexLive.com AI makes an interesting point for traders about considering to take partial or full profit taking if Bitcoin futures gets near $100,565.
• ETH’s $3,750 resistance: Can it push higher, or will it take a breather? 🤔
• Watch for more short squeezes: With liquidation volumes this high, we might not be done with these quick pumps. 🚀

Final Thoughts 🤑

Today’s turnaround is a reminder that crypto is never boring. Whether you’re trading or just holding, the market’s momentum is tilting in favor of the bulls. Let’s see if this energy can carry us through the week. Don’t forget—always zoom out and trade smart! 🚀📈

So, what’s your next move? Let us know in the comments or share your trades! 👇 Alwys invest/trade crypto at your own risk only and visit ForexLive.com for additional views.

This article was written by Itai Levitan at www.forexlive.com.

The US Dollar continues to
consolidate around the highs although it’s stronger against the commodity
currencies. In the bigger picture, the market reached the peak in the repricing
of interest rates expectations, and it will need stronger reasons to price out
the remaining rate cuts for 2025.

In fact, despite lots of
strong US data, the market’s pricing remaining largely unchanged around three
rate cuts by the end of 2025. The focus is now on the US CPI report. It looks
like the Fed really wants to cut next week before pausing for some months. So,
we might need an upside surprise in the core inflation numbers to force them to
change plans.

Even if the Fed decides to
cut next week despite a hot CPI, the market will likely scale back further the
rate cuts expectations for 2025 and that could trigger some risk aversion with
the US Dollar rallying across the board. The best scenario would be a soft
report given the overstretched long positions in the greenback. In such a case,
we can expect the US Dollar to selloff across the board.

On the NZD side, the RBNZ cut interest rates by 50 bps as expected
recently. We haven’t got any fresh New Zealand data in the meantime, but the
market increased the chances for a 50 bps cut in February to 57% with a total
of 104 bps of easing by the end of next year.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD sold off all the way to the 2023 low around the 0.5773 level.
This is where we can expect the buyers to step in with a defined risk below the
level to position for a rally back into the 0.6050 level. The sellers, on the
other hand, will want to see the price breaking lower to increase the bearish
bets into new lows.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, there’s
not much we can add here as the buyers will look for a rally from this level
and the sellers will look for a break. From a risk management perspective, the
sellers will have a better risk to reward setup around the trendline although we will likely need a soft
US CPI report today to trigger a rally into the trendline.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor downward trendline defining the current bearish
momentum on this timeframe. The sellers will likely continue to lean on it to
position for new lows, while the buyers will look for a break higher to
increase the bullish bets into the major trendline. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we get the US CPI report. Tomorrow, we have the US Jobless Claims and
the US PPI.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The US Dollar continues to
consolidate around the highs although it’s stronger against the commodity
currencies. In the bigger picture, the market reached the peak in the repricing
of interest rates expectations, and it will need stronger reasons to price out
the remaining rate cuts for 2025.

In fact, despite lots of
strong US data, the market’s pricing remaining largely unchanged around three
rate cuts by the end of 2025. The focus is now on the US CPI report. It looks
like the Fed really wants to cut next week before pausing for some months. So,
we might need an upside surprise in the core inflation numbers to force them to
change plans.

Even if the Fed decides to
cut next week despite a hot CPI, the market will likely scale back further the
rate cuts expectations for 2025 and that could trigger some risk aversion with
the US Dollar rallying across the board. The best scenario would be a soft
report given the overstretched long positions in the greenback. In such a case,
we can expect the US Dollar to selloff across the board.

On the GBP side, the last UK CPI report came in higher than expected. The BoE’s
members sounded a bit less dovish recently and although BoE’s Governor Bailey expects four rate cuts by the end
of 2025, the market thinks otherwise seeing three rate cuts as the most likely
scenario for now.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD managed to break above the major downward trendline. The bullish momentum might now increase
but it will need support from a benign US CPI today as a hot report will likely
boost the USD. The sellers will want to see the price breaking below the major
upward trendline to position for a drop into the 1.23 handle next.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor upward trendline defining the current bullish
momentum. We have also a strong support
zone around the 1.2715 level which should give the buyers a strong technical
level where to lean on with a defined risk below the support. The sellers, on
the other hand, will want to see the price breaking lower to position for a
drop into the major upward trendline.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the US CPI report today should decide where we
go next. A break above the counter-trendline around the 1.2780 level should
increase the bullish momentum. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we get the US CPI report. Tomorrow, we have the US Jobless Claims and
the US PPI. Finally, on Friday we conclude the week with the UK GDP.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

It is being reported that the US trade representative’s office will later today announce a doubling of tariff on Chinese solar wafers and polysilicon to 50%, with tungsten products also to be slapped with a 25% levy. This as part of Biden’s final efforts to protect US manufacturing from China’s cleantech industry.

The new tariffs are said to go into effect on 1 January, just a little less than three weeks before Trump officially takes office.

For some background, the solar wafers and polysilicon are primarily used in solar cell manufacturing while tungsten can be used in a variety of things but is arguably targeted as part of weaponry and chip making processes. All in all, it’s yet another area in which US is targeting China as part of the tech war between the two countries.

The full report by the FT can be found here (may be gated).

This article was written by Justin Low at www.forexlive.com.

The US Dollar continues to
consolidate around the highs although it’s stronger against the commodity
currencies. In the bigger picture, the market reached the peak in the repricing
of interest rates expectations, and it will need stronger reasons to price out
the remaining rate cuts for 2025.

In fact, despite lots of
strong US data, the market’s pricing remaining largely unchanged around three
rate cuts by the end of 2025. The focus is now on the US CPI report. It looks like the Fed really wants to cut next week before pausing
for some months. So, we might need an upside surprise in the core inflation
numbers to force them to change plans.

Even if the Fed decides to
cut next week despite a hot CPI, the market will likely scale back further the
rate cuts expectations for 2025 and that could trigger some risk aversion with
the US Dollar rallying across the board. The best scenario would be a soft
report given the overstretched long positions in the greenback. In such a case,
we can expect the US Dollar to selloff across the board.

On the EUR side, tomorrow the
ECB is expected to cut interest rates by 25 bps bringing the policy rate to
3.00%. The market’s pricing has been very aggressive lately due to a series of
weaker than expected economic releases, but the majority of ECB’s officials
pushed back against a 50 bps cut in December. After this week’s cut, the market
sees five more in 2025 which could turn out to be too much if things pick up
next year.

EURUSD Technical
Analysis – Daily Timeframe

On the daily chart, we can
see that EURUSD continues to consolidate between the 1.06 resistance
and the 1.05 support. From a risk management perspective, the sellers will have
a better risk to reward setup around the trendline to position for a drop into new
lows. The buyers, on the other hand, will want to see a break higher to
increase the bullish bets into the 1.09 handle next.

EURUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action that’s been going on for a few
weeks as the market reached the peak in the repricing of rate cuts for the Fed.
We have an interesting zone around the 1.0550 level that’s been acting as kind
of a barometer with the price above it being more bullish and below it being
more bearish. Overall though, we continue to trade in a range and the US CPI
report today should finally get us out of it.

EURUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a downward trendline defining the current bearish momentum.
The sellers will likely continue to lean on it to position for new lows, while
the buyers will look for a break higher to target the major trendline. The red
lines define the average daily range for today.

Upcoming
Catalysts

Today we get the US CPI report. Tomorrow, we have the ECB rate decision, the
US Jobless Claims and the US PPI.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior was 93.7

The NFIB Small Business Optimism Index rose by eight points in November
to 101.7, after 34 months of remaining below the 50-year average of 98.
This is the highest reading since June 2021. Of the 10 Optimism Index
components, nine increased, none decreased, and one was unchanged.
Following last month’s record high of 110, the Uncertainty Index
declined 12 points in November to 98.

NFIB Chief Economist Bill Dunkelberg: “The election results signal a major shift in economic policy,
leading to a surge in optimism among small business owners. Main Street
also became more certain about future business conditions following the
election, breaking a nearly three-year streak of record high
uncertainty. Owners are particularly hopeful for tax and regulation
policies that favor strong economic growth as well as relief from
inflationary pressures. In addition, small business owners are eager to
expand their operations.”

This is a huge jump and just another sign that the US economy is picking up steam. The inflation risk and Fed’s policy will be the main focus in 2025.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The US Dollar continues to
consolidate around the highs although it’s stronger against the commodity
currencies. In the bigger picture, the market reached the peak in the repricing
of interest rates expectations, and it will need stronger reasons to price out
the remaining rate cuts for 2025.

In fact, despite lots of
strong US data, the market’s pricing remaining largely unchanged around three
rate cuts by the end of 2025. The focus is now on the US CPI report due
tomorrow. It looks like the Fed really wants to cut next week before pausing for
some months. So, we might need an upside surprise in the core inflation numbers
to force them to change plans.

Even if the Fed decides to
cut next week despite a hot CPI, the market will likely scale back further the
rate cuts expectations for 2025 and that could trigger some risk aversion with
the US Dollar rallying across the board. The best scenario would be a soft
report given the overstretched long positions in the greenback. In such a case,
we can expect the US Dollar to selloff across the board.

On the CAD side, the BoC this
week is expected to cut interest rates by 50 bps bringing the policy rate to
3.25%. The market’s expectations kept on swinging back and forth between 25 and
50 bps in the past weeks as we got a higher than expected CPI report that strengthened the probabilities
for a 25 bps cut, but then a weaker than expected GDP report brought back the chances to
basically a 50-50 scenario. The soft labour market
report on Friday
though sealed the case for a 50 bps cut.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD rallied back to the highs as the market increased the chances for
a 50 bps cut for the BoC following the latest Canadian employment report. From
a risk management perspective, the buyers will have a better risk to reward
setup around the trendline.
The sellers, on the other hand, will likely step in around these levels to
position for a pullback into the trendline.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a nice support zone around the 1.41 handle. If the price were
to pull back into it, we can expect the buyers to step in with a defined risk
below the support to position for a rally into new highs. The sellers, on the
other hand, will look for a break lower to increase the bearish bets into the
trendline.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers will likely lean on it to keep targeting new highs, while the
sellers will look for a break lower to position for a drop into the 1.41
support. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we have the US CPI report and the BoC rate decision. On Thursday, we get
the latest US Jobless Claims figures and the US PPI.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The pair might be trading a little higher today, up 0.2% to 151.50 but it’s not really saying all too much. Looking at the chart above, the most recent bounce comes amid a defense of the 100-day moving average (red line). And since then, buyers have slowly gathered more conviction but nothing outstanding as of yet. The key upside level to watch now is the 200-day moving average (blue line), seen at 151.97 currently.

Put together, they outline more of a ping pong range for the pair. The bond market is also seeing some offers this week, so that is helping with the slight bounce. 10-year Treasury yields are up to 4.21% now, with the low last week touching 4.12%. But again, it’s not anything too striking.

All else being equal, traders will be looking to the US CPI report tomorrow to potentially settle the score. That being said, there is a case where we might not learn much from the inflation data.

The odds of a Fed rate cut next week are at ~85% now and barring any major surprises, Powell & co. are likely to deliver one final cut before pausing early next year.

The bigger question will be how much of any stickier price pressures from the latest report here will translate to the outlook for next year. The consideration will have to be alongside Trump tariffs as well, so there’s that.

But in the more immediate term i.e. for next week, it shouldn’t likely change the outcome for the Fed. But we’ll see how the market reacts. It wouldn’t be the first time the Fed gets bullied into a decision one week before a FOMC meeting.

This article was written by Justin Low at www.forexlive.com.

The US Dollar continues to
consolidate around the highs although it’s stronger against the commodity
currencies. In the bigger picture, the market reached the peak in the repricing
of interest rates expectations, and it will need stronger reasons to price out
the remaining rate cuts for 2025.

In fact, despite lots of
strong US data, the market’s pricing remaining largely unchanged around three
rate cuts by the end of 2025. The focus is now on the US CPI report due
tomorrow. It looks like the Fed really wants to cut next week before pausing
for some months. So, we might need an upside surprise in the core inflation
numbers to force them to change plans.

Even if the Fed decides to
cut next week despite a hot CPI, the market will likely scale back further the
rate cuts expectations for 2025 and that could trigger some risk aversion with
the US Dollar rallying across the board. The best scenario would be a soft
report given the overstretched long positions in the greenback. In such a case,
we can expect the US Dollar to selloff across the board.

On the CHF side, the market
is pricing in a 63% probability of a 50 bps cut for the SNB this week.
Inflation has been much lower than the central bank’s forecasts and the
strength in the Swiss Franc didn’t help either.

The new SNB’s Chairman
Schlegel seems more resolute than his predecessor as he flagged
negative rates if
needed to dampen the appetite for the safe-haven franc, so the central bank
might go for a 50 bps cut this time around.

USDCHF
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCHF broke below the upward trendline that was defining the bullish
momentum on this timeframe. We can expect the sellers to pile in around these
levels to position for a drop into new lows. The buyers, on the other hand,
will want to see the price rising back above the trendline to target new highs.

USDCHF Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a strong support
turned resistance around the 0.88 handle with a downward trendline defining
the bearish momentum on this timeframe. We can expect the sellers to step in
both at the resistance and the trendline in case the resistance gets breached.
The buyers, on the other hand, will pile in at every break higher.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the consolidation below the resistance. The sellers will
continue to step in here to target a drop into new lows, while the buyers will
look for a break higher for a rally into the trendline. The red lines define the
average daily range for today.

Upcoming
Catalysts

Tomorrow we get the US CPI report, which is also going to be the main event of
the week. On Thursday, we have the SNB rate decision, the US Jobless Claims and
the US PPI.

This article was written by Giuseppe Dellamotta at www.forexlive.com.