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GBP/USD. Weekly preview. From ship to ball

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The GBP/USD currency pair traded in both directions on Friday with reduced volatility. The average volatility over the past 1.5 months is 75 pips, which is relatively low. On Friday, volatility was even lower. However, the holidays are over, and traders will immediately be thrown into a whirlpool of events this week.

We should begin with the events in Venezuela that occurred on Saturday. Trump, "who always backs down," this time moved from words to deeds and ordered the bombing of Caracas and other Venezuelan cities. Recall that for two months the U.S. president had been demanding that Venezuelan president Nicolas Maduro resign, warning that otherwise the U.S. would be forced to intervene. Trump accuses Maduro of sheltering drug trafficking and terrorism, which harm America. During the special military operation, Maduro was captured by U.S. forces and deported to the United States, where he is to stand trial.

Frankly, it is difficult to say how the market will react to this event today, but the reaction may be quite strong. The dollar may well strengthen its position, but for how long? In the UK, there will be very few significant events and reports next week. But in the U.S.... The first working week of the month means that labor market and unemployment data will be published, on which traders currently base their trading primarily. However, in addition to these data, there will be other important reports that should not be ignored.

On Monday, the ISM manufacturing PMI will be published, which risks remaining below the "waterline" for December. On Wednesday, the JOLTS, ADP, and ISM services reports will be released. The JOLTs report is unlikely to provoke a strong market reaction because it broadly reflects the state of the U.S. labor market. The ADP report is slightly more important and is unlikely to show a strong reading (judging by forecasts), while the ISM services index may fall for December from 52.6 to 52.3 points.

On Friday, Nonfarm Payrolls and the unemployment rate for December will be published, along with the University of Michigan consumer sentiment index. The market expects that the number of jobs created outside the agricultural sector will be lower than in November, while the unemployment rate will remain unchanged at 4.6%. However, note that 60,000 new jobs is very little to call the U.S. labor market "recovering." Thus, during the current week, the dollar is more likely to fall than to rise. Overall, this is desirable because the technical picture still points to an uptrend, and with poor U.S. data, it will be much easier for both currency pairs to rise. At the same time, we remind you that forecasts are only forecasts, and actual report values often differ dramatically.

The average volatility of the GBP/USD pair over the last five trading days is 64 pips. For the pound/dollar, this value is "medium-low." On Monday, January 5, we therefore expect movement within a range of 1.3392 to 1.3520. The higher linear regression channel has turned upward, indicating a trend recovery. The CCI indicator entered the oversold area 6 times over recent months and formed numerous "bullish" divergences, which repeatedly warned traders of the continuation 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 pressure the U.S. economy, so we do not expect the U.S. currency to appreciate. Thus, long positions with a target of 1.3550 remain relevant in the near term while the price is above the moving average. A price below the moving average suggests considering small short positions on technical grounds, with targets at 1.3392 and 1.3367. From time to time, the U.S. currency shows corrections (in the global context), but for a 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) defines the short-term trend and the direction in which trading should currently be conducted;
• Murrey levels are target levels for moves and corrections;
• Volatility levels (red lines) are the likely price channel in which the pair will spend the next 24 hours based on current volatility indicators;
• The CCI indicator — its entry into the oversold area (below -250) or into the overbought area (above +250) indicates that a trend reversal to the opposite direction is approaching.

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

Overview of the EUR/USD pair. Weekly preview. Holidays are over, time to get to work

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The EUR/USD currency pair traded rather weakly on Friday, since 53 pips of volatility is small even for the euro. Essentially, on Friday, the market continued to rest and celebrate, but normal market functioning should be restored today. That said, this does not mean volatility will immediately jump. Recall that the market traded very reluctantly not only during the Christmas and New Year week. It has traded very sluggishly for several months in a row. However, this is not surprising, as a flat (sideways) market has persisted on the daily timeframe for six months, which explains traders' reluctance to open positions.

We also remind you that in December, there were a considerable number of important news items, events, and releases, yet the EUR/USD pair did not move much and remained flat. Therefore, price movements this week will primarily depend on traders themselves, not on the macroeconomic backdrop. The macroeconomic backdrop is only a trigger for traders. Whether to trade it and to what extent are up to the market.

Nevertheless, one should not ignore macroeconomic events. This week, the European Union will publish reports on inflation, business activity, and unemployment. We do not consider these reports important in the current circumstances, as the market remains entirely focused on U.S. labor-market reports, unemployment, and inflation. Traders currently have no questions for the European Central Bank. Inflation in the EU is steadily around 2%, the economy is growing at a moderate pace, and the ECB has no grounds to change the key rate in the near term. Therefore, the reaction to all EU data published may be extremely weak. Especially since important U.S. data will be released this week, and the market will primarily work through them.

We will discuss U.S. data further in the GBP/USD article, and here we will simply remind traders that, technically speaking, the pair can begin a decline to the 1.1400 level. Our sideways channel is bounded by 1.1400 and 1.1830. Since the pair failed to break 1.1830 over the past two weeks, a drop in the euro and, accordingly, a rise in the dollar may begin, for which no corresponding macroeconomic data are needed. Thus, the dollar may appreciate in the coming weeks even with bad news from across the ocean. And the news itself should not be twisted inside out to somehow explain another illogical market move.

However, there is another possible scenario. If U.S. data disappoint, the market may attempt anew to break above 1.1830. If successful, the flat will end, and we will see the long-awaited resumption of the 2025 uptrend.

The average volatility of the EUR/USD pair over the last five trading days as of January 5 is 41 pips, which is characterized as "low." We expect the pair to move between levels 1.1678 and 1.1760 on Monday. The higher linear regression channel is turning up, but the flat on the daily timeframe persists. The CCI entered the overbought area in early December, but we have already seen a slight pullback. Last week, a bullish divergence formed, indicating a resumption of the uptrend.

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 still matters greatly to the market, and it remains negative for the dollar. Over the last six months, the dollar has occasionally shown weak gains, but exclusively within the sideways channel. It lacks a 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 line, long positions remain relevant, with a target of 1.1830 (the upper line of the daily flat), which has already been effectively worked off. Now the flat needs to be finished.

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) defines the short-term trend and the direction in which trading should currently be conducted;
• Murrey levels are target levels for moves and corrections;
• Volatility levels (red lines) are the likely price channel in which the pair will spend the next 24 hours based on current volatility indicators;
• The CCI indicator — its entry into the oversold area (below -250) or into the overbought area (above +250) indicates that a trend reversal to the opposite direction is approaching.

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

Trading recommendations and trade review for GBP/USD on January 5. The pound does not want to head south following the euro

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Analysis GBP/USD 5M

The GBP/USD currency pair on Friday attempted to continue the downward move, but it could not close below the important Senkou Span B line. Thus, for the pound, despite the breach of the trendline, the trend remains up. The holidays are over, traders are returning to the market after a two-week break, and the event calendar is again filling with important data.

As we have already said, the current week may be relatively "stormy." The storm may begin already today due to Donald Trump's military operation in Venezuela, since an event of this scale is unlikely to go unnoticed by the markets. We note that the conflict between the US and Venezuela may not be limited to Maduro's arrest. Therefore, we are sure to see many more interesting developments around this event. In addition, important macroeconomic data will be published in the US this week, which will also affect GBP/USD. However, abstracting from all these events, above the Senkou Span B line, the pound sterling still has a good chance of continuing to rise against the US dollar.

On the 5-minute timeframe on Friday, the pair repeatedly changed direction, so many signals were formed. However, in the area of their formation, there were immediately two Ichimoku lines and the 1.3437 level. Thus, one could realistically trade only a rebound from 1.3437 (due to its high precision) or a close above the critical Kijun-sen line (since there is room to the upside).

COT report

COT reports for the pound show that, in recent years, commercial traders' sentiment has been changing frequently. The red and blue lines representing the net positions of commercial and non-commercial traders constantly cross and, in most cases, remain near zero. At present, the lines are diverging, but the dominant players are now non-commercial traders with short positions. Speculators increasingly sell the pound, but, as we have 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, and the Federal Reserve 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 23) for the British pound, the Non-commercial group opened 1,600 BUY contracts and closed 5,700 SELL contracts. Thus, the net position of non-commercial traders increased by 7,300 contracts over the week.

In 2025, the pound rose quite strongly, but one should understand that the reason is one: 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 despite the trendline breach. The pound's rise in the medium term will continue regardless of the local macroeconomic and fundamental backdrop. The trend for the pound remains upward on almost all timeframes. It is important for the bulls not to lose the Senkou Span B line and not to fall below it.

For January 5, 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.

On Monday, the UK calendar is empty, while the US will publish the important ISM manufacturing index. If this report is positive, the pair may attempt to close below the Senkou Span B and finally switch to a bearish stance. Otherwise, we will see a natural rise.

Trading recommendations:

Today, traders can consider shorts if the price closes below the Senkou Span B line with a target of 1.3369–1.3377. Long positions will be relevant if the price closes above the critical line with a target of 1.3533–1.3548 or in case of pronounced rebounds from the 1.3437 level or the Senkou Span B line.

Explanations for illustrations:

Price support and resistance 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 5. Holidays are over, the correction continues

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Analysis EUR/USD 5M

The EUR/USD currency pair traded rather weakly, with a downward bias, on Friday. Last week, the pair closed below the ascending trendline, below the Ichimoku indicator lines, and at the same time failed to overcome the 1.1800–1.1830 area, which serves as the upper boundary of the sideways channel on the daily timeframe. Thus, the pair's decline is quite natural on technical grounds. However, we do not yet believe in a prolonged fall of the pair. Many important reports will be published in the U.S. this week, and traders still need to understand how the dollar will react to America's military aggression against Venezuela and the capture of its president. Recall that a fall in the pair means a rise in the U.S. dollar, and it is currently extremely difficult for us to imagine on what basis it could rise this week.

From a technical standpoint, the American currency can indeed appreciate, since exiting the 1.1400–1.1830 sideways channel again failed, and the local trend has turned bearish. Because the flat persists, the dollar can rise under any fundamental and macroeconomic background. Although, of course, if data from across the ocean again prove weak, the downward correction may remain a correction and not turn into a trend.

On the 5-minute timeframe two trade signals were formed on Friday that traders could have worked on, remembering the low volatility. The price twice rebounded from the 1.1750–1.1762 area; in both cases the move south was about 25 pips. We understand this is small, but we cannot influence the strength of market moves, and we have been writing about low volatility for several months in a row. Traders must therefore be aware of this when opening any positions.

COT report

The latest COT report is dated December 23. 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 U.S. president, only the dollar has been falling. We cannot say that the decline of the American currency will continue with 100% probability, but current global developments suggest that scenario. The red and blue lines are moving apart from each other, which indicates the bulls' overwhelming dominance.

We still do not see any fundamental factors for the strengthening of the euro, while there remain sufficient factors for the decline of the American currency. The global downtrend persists, but what does it mean now, given that the price has moved over the past 17 years? Over the last three years only the euro has been rising, and that is a trend too.

The arrangement of the red and blue indicator lines continues to signal the preservation and strengthening of the bullish trend. During the last reporting week, the number of longs in the Non-commercial group increased by 16,200, and the number of shorts by 1,200. Accordingly, the net position for the week grew by another 15,000 contracts.

Analysis EUR/USD 1H

On the hourly timeframe, EUR/USD changed its trend to bearish. Effectively, the upper line of the 1.1400–1.1830 sideways channel was tested twice, and the price failed to leave this channel. This week, the market has to "digest" a lot of important information, so the movement can be anything. We, of course, support another rise of the euro, and the COT reports continue to signal that market-makers are accumulating long positions in the euro.

For January 5, we highlight the following levels for trading: 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 (1.1755) and Kijun-sen (1.1752) lines. 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 Eurozone on Monday, but the first important U.S. report this week — the ISM manufacturing index — will be released. Remembering the events in Venezuela, we may face a relatively volatile day.

Trading recommendations:

On Monday, traders can trade from the 1.1750–1.1760 area. A price rebound from it to the downside 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:

Price support and resistance 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.

EUR/USD. Weekly preview. ISM indices, Non-farms, and the

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The economic calendar for the coming week is packed with important events. The New Year period is behind us, and now important macroeconomic reports traditionally published at the beginning of each month await us. It is quite likely that by the end of the coming week, the EUR/USD pair will nevertheless leave the area of the 17th figure within which it has traded for the previous three weeks. The only question is which way the scales will tilt — toward sellers or buyers of the pair.

So, on Monday, the most important macroeconomic indicator in the U.S. — the ISM manufacturing index — will be published. In November, this indicator fell to 48.2, the lowest level since July this year. The downward dynamic has been recorded for the second month in a row. Key subindexes disappointed as well. In particular, the new orders index fell from 49.4 to 47.4 (this component has been falling for three months in a row, indicating weak demand), and the employment index — to 44.0 (after a decline to 46.0 in the previous month). In other words, the ISM manufacturing index reflected weak demand and shrinking employment.

According to preliminary forecasts, in December the indicator will show a minimal increase (from 48.2 to 48.4), but it will remain in contraction territory. The dollar will receive support only if, contrary to forecasts, the index exceeds the 50-point threshold. However, the probability of that scenario is extremely small. The opposite result is more likely. Most indirect signals (weak orders, falling employment, price pressure, weak exports) indicate that the ISM manufacturing index will be below its November level in December. In addition, regional manufacturing indices (FRB New York, FRB Philadelphia, FRB Richmond) in December moved into negative territory, reflecting continued contraction in U.S. industrial activity.

The ISM services PMI will be published two days later — on Wednesday, January 7. The indicator is expected to decline slightly — from 52.6 to 52.2 — while remaining in expansion territory. A more significant drop (toward the 50 threshold) or a sudden fall into contraction would exert severe pressure on the U.S. currency.

In addition to the ISM indices, EUR/USD traders will focus on the U.S. labor market. ADP and JOLTS reports will be released on Wednesday, and December Nonfarm Payrolls will be released on Friday.

According to preliminary forecasts, the ADP report will show a 50,000 increase in private-sector employment, after a 30,000 decline the previous month. Although this indicator does not always correlate with official data, it can trigger volatility in EUR/USD, especially if it prints negative again.

Also on Wednesday, we will learn the November JOLTS value (vacancies on the last business day of the month before last). In October, this indicator stood at 7.67 million, its highest level since May 2025. According to forecasts, the upward trend will continue in November — the indicator should be at 7.73 million. Although this is a lagging indicator, it can complement the overall picture of the U.S. labor market if it turns out to be in the "red zone."

However, the decisive role will be played by Non-farm Payrolls, which will be published on Friday, January 9. This release will be the first relatively "clean" U.S. labor market report after the recent shutdown. As is known, during the prolonged federal government suspension, the publication of official statistics was disrupted. In particular, the October employment report was not published separately and was combined with the November report. Some parameters of the release were distorted due to the lack of data collection during the shutdown. Therefore, the December NFP report is significant for EUR/USD traders in assessing the current state of the U.S. labor market.

According to preliminary forecasts, unemployment in December will fall slightly — from 4.6% (a multi-year high) to 4.5%. Nonfarm payrolls should increase by 55,000, after a 64,000 rise in November. Average hourly earnings growth is expected to remain at the previous month's level (3.5%).

Overall, this is a relatively weak result. Even if the report matches forecasts, the dollar will be under background pressure. But if unemployment rises again and the payroll increase is below the 55,000 mark, the greenback will weaken significantly across the market, amid strengthening "dovish" expectations about future Fed actions. I remind you that market participants currently view the chances of a March rate cut as 50/50 (according to CME FedWatch). Weak NFP data could tip the scales toward the "dovish" scenario.

It is also worth noting that on Monday, a market reaction to the Venezuelan events is expected. Briefly: on Saturday, the U.S. carried out a large military operation in Venezuela, as a result of which President Nicolas Maduro was captured and delivered to the United States.

In the short term (on Monday), the dollar may strengthen as a safe-haven asset amid a spike in geopolitical tension and uncertainty. However, over the medium term (i.e., during the week), everything will depend on how quickly and in what way global markets assess the consequences of the events in Venezuela. Much will also depend on states' reactions, the stability of oil supplies, and investors' risk appetite assessment. If the tension stabilizes (i.e., no further escalation steps by the U.S. or other countries follow), EUR/USD will return to its ordinary fundamental drivers.

From a technical point of view, on the daily chart, the pair is on the middle line of the Bollinger Bands, below the Tenkan-sen line, and above the Kumo cloud and the Kijun-sen line. All this suggests uncertainty, despite the prevailing bearish sentiment for the pair. Despite the southbound impulse, EUR/USD sellers failed to breach the lower boundary of the 1.1710–1.1800 range within which the pair has traded for the third consecutive week. Accordingly, the bears did not even approach the main support level at 1.1690 (the upper boundary of the Kumo cloud on D1). If the southbound impulse "traditionally" fades at the base of the 17th figure, it is reasonable to consider longs with a first target at 1.1760 (Tenkan-sen line on D1).

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

American dollar. Weekly preview

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The American news backdrop next week will again determine the fate of the EUR/USD and GBP/USD instruments. Analysis should begin with Saturday's invasion of Venezuelan territory by U.S. military forces, which ended with the capture of the country's president, Nicolas Maduro. Maduro is currently held at one of the American military bases and will soon be transferred to the United States for trial. Therefore, Monday may open with a gap on the FX market, and then traders' attention will shift to the more familiar economic backdrop — namely, the American, not the European or British.

The first week of any month is when the market adjusts its expectations regarding Federal Reserve monetary policy. During this period, labor market and unemployment statistics are released, which allow forecasting the U.S. central bank's future actions. I remind you that market participants currently expect further Fed easing but do not expect a new round of rate cuts at the meeting at the end of January. This is because Jerome Powell, at the last meeting, indicated the FOMC's intention to pause to understand how the steps already taken will affect economic processes.

The Fed has not abandoned further easing, but needs more time to analyze the data and the extent of the impact on unemployment and the labor market. Therefore, one can say that the decision on the rate at the next meeting is already made. However, I would not draw such conclusions without knowing how many new jobs were created in December and how the unemployment rate changed.

I remind you that a month earlier, economists expected unemployment to be at 4.4%, but it jumped to 4.6%. Nonfarm Payrolls in November were higher than market expectations, but it cannot be called unequivocally positive. In addition to Nonfarm Payrolls and unemployment, ISM business activity indexes for manufacturing and services, the ADP report, the JOLTS job openings report, and the consumer sentiment index will also be released in the U.S., and these can also influence market sentiment.

Based on all of the above, it is still too early to write off a Fed rate cut in January. It is premature to draw conclusions about the state of the labor market. Expecting a strong rally in the dollar on the basis of current considerations is pointless.

Wave picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward section of the trend. Trump's policies and the Fed's monetary policy remain significant factors in the long-term decline of the U.S. currency. Targets for the current trend section may extend up to the 25th figure. The current upward wave set may not be complete, but three waves have been constructed. If it develops further, one should expect growth with targets around 1.1825 and 1.1926, which correspond to 200.0% and 261.8% Fibonacci. But in the near term, a corrective wave or a set of waves may be forming.

Wave picture for GBP/USD:

The wave picture for GBP/USD has changed. The downward corrective structure a-b-c-d-e in C of 4 appears complete, as does the entire wave 4. If that is indeed the case, I expect the main trend section to resume with initial targets around the 38 and 40 figures.

In the short term, I expected wave 3 or c to form, with targets around 1.3280 and 1.3360, which correspond to the 76.4% and 61.8% Fibonacci levels. These targets have been reached. Wave 3 or c has presumably completed its formation, so in the near term, a downward wave or a set of waves may be observed.

Main principles of my analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often change.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is never and can never be 100% confidence in the direction of movement. Do not forget 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.

British pound. Weekly preview

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The fate of the British pound next week will likewise not be in the hands of the Brits themselves. There will be extremely few news items in the UK, and none that can be singled out as important from the full list of events. The market may continue building a corrective wave sequence, which remains the most plausible scenario for the first whole trading week of 2026. In my view, market participants will be inclined to sell, while the news flow (especially the American one) will either slow the decline of both instruments or accelerate it.

Obviously, all U.S. news (we still do not know how the market will react to Maduro's arrest and Trump's announcement to "help Cuba") cannot be purely positive or purely negative. Therefore, the direction of movement may change during the week. The current wave count for GBP/USD suggests a corrective wave sequence or even a new trend segment within wave 4, however the problem with corrective waves is precisely that it is extremely difficult to say where a given wave will end and what structure it will take.

From current levels, wave D in 4 may begin to form, with targets located below the 30?figure. A wave 4 within an upward wave sequence with the prospect of renewed growth may also start to develop. Therefore, it would be very helpful if next week's news flow had a clear bias and truly aided trading decisions.

Given all of the above, the first week of 2026 may prove rather difficult. The news flow may constantly change its character, and the market, it seems, has not yet decided how it intends to act in January.

Wave picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward section of the trend. Trump's policies and the Fed's monetary policy remain significant factors in the long-term decline of the U.S. currency. Targets for the current trend section may extend up to the 25th figure. The current upward wave set may not be complete, but three waves have been constructed. If it develops further, one should expect growth with targets around 1.1825 and 1.1926, which correspond to 200.0% and 261.8% Fibonacci. But in the near term, a corrective wave or a set of waves may be forming.

Wave picture for GBP/USD:

The wave picture for GBP/USD has changed. The downward corrective structure a-b-c-d-e in C of 4 appears complete, as does the entire wave 4. If that is indeed the case, I expect the main trend section to resume with initial targets around the 38 and 40 figures.

In the short term, I expected wave 3 or c to form, with targets around 1.3280 and 1.3360, which correspond to the 76.4% and 61.8% Fibonacci levels. These targets have been reached. Wave 3 or c has presumably completed its formation, so in the near term, a downward wave or a set of waves may be observed.

Main principles of my analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often change.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is never and can never be 100% confidence in the direction of movement. Do not forget 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.

Euro currency. Weekly preview

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The market is preparing to emerge from the "holidays." Donald Trump is helping it with that: at his order, the U.S. military carried out a special operation in Venezuela and captured its president, Nicolas Maduro, along with his wife. I will not hide that I did not expect the invasion to conclude so quickly; I allowed for the possibility that the new geopolitical conflict could last at least several weeks. However, the military operation was completed in a matter of hours. How the market will react to it on Monday night is not entirely clear, since the operation began and ended before the market opened. I still believe it will not go unnoticed.

However, traders would do better to shift their attention from Venezuela to the more pressing news flow. Next week will be very interesting in terms of news, and the key influence on currency rates will be economic data, not Maduro's arrest. Let's begin to sort it out. In Germany, over the next five days, reports on inflation, December business activity, retail trade, and unemployment will be released. In the European Union reports on December business activity, inflation, unemployment, producer prices and retail trade will be published. At first glance, there are many reports, and they are not trivial. However, in fact, the fate of the euro is not currently in the hands of the eurozone itself.

The market continues to make decisions based on the state of the U.S. labor market, inflation, and the prospects for Federal Reserve monetary policy. Certainly, market participants will not be able to ignore all other factors entirely. However, I remind you that in 2025 the key influencing factors were Donald Trump's policies and the Fed's policy (in relation to the Bank of England and the European Central Bank).

Therefore, the Fed's "dovish" prospects are a reason for the decline of the U.S. currency. The arrest of Maduro and all the consequences are a reason for the dollar's decline. Weak economic data are a reason for the dollar's decline. All other factors will remain in the shadows. The euro can rise without any effort, driven by strong economic reports or positive news from the EU. That is precisely why I say the fate of the euro is not in the hands of the euro.

Wave picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward section of the trend. Trump's policies and the Fed's monetary policy remain significant factors in the long-term decline of the U.S. currency. Targets for the current trend section may extend up to the 25th figure. The current upward wave set may not be complete, but three waves have been constructed. If it develops further, one should expect growth with targets around 1.1825 and 1.1926, which correspond to 200.0% and 261.8% Fibonacci. But in the near term, a corrective wave or a set of waves may be forming.

Wave picture for GBP/USD:

The wave picture for GBP/USD has changed. The downward corrective structure a-b-c-d-e in C of 4 appears complete, as does the entire wave 4. If that is indeed the case, I expect the main trend section to resume with initial targets around the 38 and 40 figures.

In the short term, I expected wave 3 or c to form, with targets around 1.3280 and 1.3360, which correspond to the 76.4% and 61.8% Fibonacci levels. These targets have been reached. Wave 3 or c has presumably completed its formation, so in the near term, a downward wave or a set of waves may be observed.

Main principles of my analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often change.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is never and can never be 100% confidence in the direction of movement. Do not forget 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.

Oil, the U.S. dollar, and financial consequences after Maduro's kidnapping. Part 2

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Venezuela possesses some of the largest proven oil reserves in the world, but its production has sharply declined in recent years due to sanctions and low investment. For the U.S., control over the political transition opens the possibility of restarting production under the management of or with the participation of American oil companies, which Trump explicitly stated when speaking about granting major American oil companies access to Venezuelan fields.

Maintaining a formal embargo while exercising de facto control over the regime can be used as a tool for selective access to Venezuelan oil for Washington and for pressure on competitors, including Russia and Iran, in the struggle for market share in heavy crude grades. In the medium term, the lifting of restrictions and the restoration of Venezuelan production could increase global supply and put downward pressure on oil prices, provided there is no simultaneous significant reduction in supplies from other regions.

Strengthening U.S. control over the flow of Venezuelan oil and its settlements typically implies consolidation of the dollar's role as the key settlement currency in commodity trade, especially if Washington ties the lifting of some sanctions to the use of American financial infrastructure. This increases demand for the dollar through a rise in dollar-denominated settlements and the servicing of debt and investment operations associated with restructuring Venezuela's oil sector.

On the other hand, a military operation and the rise in geopolitical risk typically increase the attractiveness of safe-haven assets, which markets often include the dollar and U.S. Treasuries, supporting the American currency in the short term. For countries dependent on oil imports, the combination of a geopolitical premium in energy prices and a stronger dollar creates pro?inflationary pressure and increases the costs of servicing external debt denominated in U.S. currency.

A potential shift of Venezuela from the camp of U.S. opponents into a zone of direct U.S. influence reduces the risk of dedollarization of the country's oil flows and limits room for alternative settlement schemes involving China or Russia. In the long term, this reinforces the "petrodollar" architecture, where control over key exporters and transport infrastructure supports global demand for the dollar as a reserve and settlement asset.

However, the scale of military escalation and its perception as a precedent for resolving resource conflicts by force may prompt some states — both importers and exporters — to accelerate reserve diversification and seek alternatives to the dollar, creating a dual effect: tactical strengthening of the dollar's position alongside a strategic increase in motivation for gradual diversification.

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

Trump in the U.S. speaks of the capture of Venezuelan President Maduro. Part 1

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U.S. President Donald Trump at a press conference at the Mar-a-Lago residence confirmed the conduct of a large-scale military operation against Venezuela and the arrest of President Nicolas Maduro together with his wife Cilia Flores, who, he said, will be taken to New York to face charges of narcoterrorism and related crimes in the Southern District of New York in the form of a conspiracy to possess machine guns and explosive devices against the United States. Against the backdrop of strikes on Caracas's military infrastructure and command centers, Washington announced its intention to temporarily oversee a transitional period of power in Venezuela, while simultaneously declaring the continuation of the oil embargo and prioritizing the interests of American energy companies.

According to open sources, strikes on targets in Caracas and several Venezuelan states were carried out at night, which led to widespread power outages and the disabling of a significant portion of the military infrastructure. The American side characterizes this action as one of the most effective demonstrations of military power and refers to joint actions by U.S. armed forces and law enforcement in the detention of Maduro.

Trump publicly emphasized that Maduro and Cilia Flores "will stand before American justice" and that the U.S. will "run Venezuela" until the completion of a "safe and fair transition period," which in effect amounts to an announcement of an external protectorate during the change of power. At the same time, he declared readiness for a second wave of strikes if necessary, signaling Washington's preparedness for further escalation in the region.

U.S. Attorney General Pamela Bondi reported that Maduro and Cilia Flores have been formally charged in the Southern District of New York, including conspiracy to commit narcoterrorism, smuggling cocaine into the U.S., and unlawful trafficking of heavy weaponry and explosive devices against the United States. These charges rely on an existing line of U.S. policy begun in 2020, when similar narcotics-trafficking and terrorist allegations were brought against Nicolas Maduro, and a reward was announced for information leading to his arrest.

The Venezuelan government issued a harsh official statement, characterizing U.S. actions as "gross military aggression" against a sovereign state and the population in Caracas and several key states. Caracas points to a clear violation of the UN Charter, in particular the principles of sovereignty, equality of states, and the prohibition on the use of force, and warns of a threat to international peace and security in Latin America and the Caribbean.

The Venezuelan side interprets the strikes as an attempt to seize control of the country's strategic resources by force, primarily oil and mineral wealth, and to break its political independence. According to authorities, President Nicolas Maduro ordered a review of all national defense plans, indicating a move toward a long-term confrontational agenda in relations with Washington.

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

How will Europe counter a strong euro?

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The new year had barely begun when Donald Trump declared war on Venezuela, and the American military delivered a crushing blow on Caracas and other cities. I am not sure the dollar will fall on Monday, but the likelihood of such a scenario is very high. As a consequence, other currencies will appreciate. In particular, the euro.

The problem of a strong/weak exchange rate is not new. Trump has good reason to want to weaken the dollar, because this can increase U.S. export volumes. It's simple — the weaker the U.S. dollar, the cheaper it is for other countries to buy American goods and raw materials. Therefore, virtually all export?oriented countries are interested in weakening their own currency.

There are various ways to weaken a currency. Imagine the central bank, like a madman, starts printing banknotes; more enter circulation, inflation rises, and as a result, the currency depreciates. This method of influencing the currency is called a "currency intervention," and it is tacitly prohibited, since other central banks could carry out retaliatory currency interventions, which would nullify all central banks' efforts. Not all currencies can depreciate simultaneously.

The only apparent way out of this situation is further monetary easing. A loose or "dovish" policy makes investments in EU bank deposits and securities unprofitable compared with similar instruments elsewhere. As a result, demand for the euro falls while demand for other currencies rises. Capital begins to flow from countries with low rates to countries with tighter monetary policy. But will the European Central Bank take such a step?

If rates are cut further, inflation may begin to accelerate. And the ECB spent several years bringing it back to the 2% target. The dilemma is no easy one, but a strong euro will inevitably strike the European economy. Germany's economy — the locomotive of the Eurozone — has long been creaking at the seams. At the same time, Trump's policies may continue to make investors reluctant to deal with the U.S. dollar. It seems that in 2026, alongside military conflicts and trade wars, a currency confrontation may also emerge.

Wave picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward section of the trend. Trump's policies and the Fed's monetary policy remain significant factors in the long-term decline of the US currency. Targets for the current trend section may extend up to the 25-figure level. The current upward wave set may not be complete, but three waves have been built. If it develops further, one should expect growth with targets around 1.1825 and 1.1926, which correspond to 200.0% and 261.8% Fibonacci. But in the near term, a corrective wave or a set of waves may be forming.

Wave picture for GBP/USD:

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

In the short term, I expected the formation of wave 3 or c, with targets around 1.3280 and 1.3360, which correspond to the 76.4% and 61.8% Fibonacci levels. These targets have been reached. Wave 3 or C has presumably completed its construction, so in the near term, a downward wave or a set of waves may be observed.

Main principles of my analysis:

1. Wave structures should be simple and understandable. Complex structures are difficult to trade and often change.
2. If there is no confidence in what is happening in the market, it is better not to enter it.
3. There is never and can never be 100% confidence in the direction of movement. Do not forget 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.

What does Trump want to achieve in Venezuela?

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The official version sounds like this. Venezuela remains one of the world leaders in the production and distribution of narcotics; the current Caracas regime facilitates this, and the majority of the drugs end up in the United States — a situation Donald Trump intends to put an end to. However, every coin has a reverse side.

Venezuelan President Nicolas Maduro stated that America is stoking a war in the region and demanded to sit down at the negotiating table. It is hard for me to imagine that Trump will begin negotiations with the Maduro regime, since in recent months, he has repeatedly demanded Maduro's resignation and a change of power in the country. Therefore, the White House leader has outlined his scenario for this conflict and is not prepared to negotiate with terrorists (in his view).

Maduro insists that the problem lies not in the distribution of drugs across US territory but in America imposing its will — something America "sins" by rather often under Trump. Maduro rejected any accusations that he is the leader of a terrorist organization distributing banned substances and said that Washington's true goal is to establish control over Venezuelan oil, natural resources, and gold.

Maduro also said his country is ready for negotiations both on drug trafficking and on investments in the Venezuelan oil industry (if America wants to enter that market). However, Trump's policy is known worldwide. It is ultimatums that must be complied with; otherwise, sanctions, tariffs, blockades, or (as in Venezuela's case) a military operation and air strikes will follow.

Based on the above, it is evident that Maduro wants to retain power in the country and negotiate with Washington. At the same time, Trump sees no reason to negotiate with the "head of a drug cartel" and demands Maduro's immediate departure from the presidency. The conflict may end very quickly if Maduro accepts Trump's demands, or it may drag on for many years.

Based on all of the above, I believe the dollar will be under pressure next week, regardless of US economic data, which may only create additional problems for the American currency. The dollar continues to be fired upon from all sides. In 2025, this was the trade war, Trump's pressure on the Federal Reserve, the FOMC's "dovish" monetary policy prospects, and uncertainty related to Donald Trump's policies. In 2026, this may be US military conflicts, a new escalation of the trade war, and Fed rate cuts.

Wave picture for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the instrument continues to build an upward section of the trend. Trump's policies and the Fed's monetary policy remain significant factors in the long-term decline of the US currency. Targets for the current trend section may extend up to the 25-figure level. The current upward wave set may not be complete, but three waves have been built. If it develops further, one should expect growth with targets around 1.1825 and 1.1926, which correspond to 200.0% and 261.8% Fibonacci. But in the near term, a corrective wave or a set of waves may be forming.

Wave picture for GBP/USD:

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

In the short term, I expected the formation of wave 3 or c, with targets around 1.3280 and 1.3360, which correspond to the 76.4% and 61.8% Fibonacci levels. These targets have been reached. Wave 3 or C has presumably completed its construction, so in the near term, a downward wave or a set of waves may be observed.

Main principles of my analysis:

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

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

USD/CHF. Analysis and Forecast

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Today, the USD/CHF pair came under pressure during the U.S. session. In recent months, the U.S. dollar has faced significant pressure amid market concerns related to Trump's trade policy, signs of an economic slowdown, and high inflation in the country. Unprecedented critical statements by President Donald Trump toward the Federal Reserve have also weighed on the dollar. Expectations of further easing in Fed monetary policy are limiting dollar strength.

The U.S. central bank cut rates by 25 basis points at its last two monetary policy meetings and is projecting two more cuts in 2026. In addition, Chairman Jerome Powell's term expires in May, and Trump is likely to appoint a more dovish policymaker to the position, with a decision on the candidate expected to be announced in the coming weeks. These circumstances reinforce expectations of a more aggressive monetary easing cycle.

Nevertheless, the latest U.S. macroeconomic indicators look fairly optimistic. For the first time in a long while, initial jobless claims fell by 16 thousand to 199 thousand in the week ending December 26, beating the revised figure from the previous week (215 thousand). An increase in real estate transactions has also been noted — the highest level in the past three years. Today's release of the U.S. manufacturing activity index (S&P Global Manufacturing PMI) confirmed a moderate slowdown in the sector. However, investors are awaiting the key December nonfarm payrolls report, the release of which has been postponed to next week, as it will provide a clearer picture of expectations regarding the Fed's interest rate path.

In Switzerland, the KOF Economic Barometer showed a surprising improvement, rising to 103.4 in December from 101.7 in the previous month — the highest reading in more than a year. This points to a potential strengthening of economic growth ahead. Despite the positive assessment, the KOF institute noted strong readings in the industrial and construction sectors, while also warning of signs of weakening in demand indicators.

From a technical perspective, oscillators on the daily chart are in negative territory. The 9-day EMA is below the 14-day EMA, which also confirms a bearish outlook for the USD/CHF pair. Resistance is located at the 14-day EMA around 0.7933, above which the next resistance lies at 0.7943. Solid support has been found at the round 0.7900 level.

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

The market does not believe in a new easing in January

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Pressure on the U.S. currency remains, and the market continues to expect very active measures from the Federal Reserve in 2026. At the very least, the current state of the U.S. labor market suggests that these expectations are not unfounded. The latest reports for November showed that the labor market may have stopped "cooling," but this is a highly debatable claim. Let me remind you that the Nonfarm Payrolls report is quite specific, and not all traders interpret it correctly.

It should be understood that the number of newly created jobs is not equal to the net increase in employment in the economy. Every month, hundreds of thousands of Americans lose their jobs, quit, companies close and open, new employees are hired, and so on. Nonfarm Payrolls only signals newly created jobs and does not take into account the number of layoffs and job losses. Consequently, even a high payrolls reading does not mean that the total number of workers in the U.S. has increased. If, over the same period, layoffs exceeded the number of newly created jobs, this represents a decline rather than a gain in the labor force.

It should also be understood that the Nonfarm Payrolls report does not account for, for example, the self-employed or freelancers. In recent decades, an entire profession of "blogger" has emerged, and it is obvious that all these people earn money but are not officially employed anywhere. The report does not take them into account. It also does not include self-employed freelancers who receive orders through relevant platforms and are likewise not counted. Therefore, overall, it can be said that the Nonfarm Payrolls report is not the most accurate measure of the labor market's condition, and its figures should be interpreted correctly.

In November, 60 thousand jobs were created in the United States, and this figure is negative. This is because, over the same period, layoffs were almost certainly far higher than 60 thousand. On average, 100–200 thousand workers lose their jobs in the U.S. every month, so the payrolls figure should be at least 100 thousand just to be considered neutral.

Based on all of the above, I cannot say that the U.S. labor market has begun to recover. The current situation will be clarified by the reports due next week, but the easing of the Fed's monetary policy should continue in 2026. In January, the market does not expect a new round of interest rate cuts, but more definitive conclusions can be drawn next week.

Wave picture for EUR/USD:

Based on the EUR/USD analysis conducted, 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 behind the long-term decline of the U.S. dollar. The targets of the current trend segment may extend as far as the 25th level. The current upward wave sequence may not be complete yet, but three waves have already been formed. If it develops further, growth should be expected with targets around 1.1825 and 1.1926, which correspond to the 200.0% and 261.8% Fibonacci levels. However, a corrective wave or a set of corrective waves may form in the near term.

Wave picture for GBP/USD:

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 the entire wave 4. If this is indeed the case, I expect the main trend segment to resume, 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 1.3280 and 1.3360, which correspond to the 76.4% and 61.8% Fibonacci levels. These targets have been reached. Wave 3 or c has presumably completed its formation, so in the near future a downward wave or a set of waves may develop.

Core 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 can never be 100% certainty about the direction of price movement. Do not forget to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of an

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

EUR/USD Analysis on January 2, 2025

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The wave pattern on the 4-hour chart for EUR/USD has been quite clear, albeit rather complex in recent months. There is no talk of canceling the upward trend segment that began in January of last year, but the wave structure starting from July 1, 2025 has taken on a complex and extended form. In my view, the instrument has completed the construction 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 to be complete; therefore, over the coming weeks I expect the formation of a new upward wave sequence. We saw the presumed waves 1 and 2, and the pair is now in the process of forming wave 3 or c, which took on a five-wave structure and, therefore, 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 on Friday, although intraday movements were quite active. However, they were not active enough to conclude that the holidays were over. Most likely, the market will get back to business on Monday, when the first reports of the year begin to be released. For now, market participants can, with a clear conscience, continue to rest, finish their Olivier salad, and drink the remaining champagne. There is no news background, so I do not link the movements of the New Year week to any events — simply because there are none.

In my view, the pair is currently moving strictly according to waves, which is clearly visible even to beginner traders. Any trader knows that a classic impulsive (trend) structure consists of five waves, while a classic corrective structure consists of three waves. Within the local wave 3 or c, we observed five waves; therefore, a decline should be expected in any case. If the upward wave sequence that began on November 5 is not completed and takes on a five-wave form, then after the correction we will see a new rise in quotes. Personally, I support this scenario. However, there is another one.

The upward wave sequence may be limited to three waves, which would make it another corrective segment — and such segments have, by and large, been alternating for about six months. Of course, much will depend on the news background next week, as next week will be the first working week of 2026, so U.S. reports on unemployment, nonfarm payrolls, wages, and business activity will be released. These reports may trigger reactions from both buyers and sellers, since U.S. economic data still has a strong influence on FOMC monetary policy.

General conclusions

Based on the EUR/USD analysis conducted, 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. dollar in the long term. The targets of the current trend segment may extend as far as the 25th level. The current upward wave sequence may not be complete yet, but three waves have already been formed. If it continues to develop, growth should be expected with targets near 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 a set of corrective waves may be forming.

On a smaller scale, the entire upward trend segment is visible. The wave count is not the most standard, as corrective waves vary in size. For example, the larger wave 2 is smaller than the internal wave 2 within wave 3. However, this can also happen. Let me remind you that it is best to identify clear and understandable structures on charts, rather than necessarily trying to label every single wave. At the moment, the upward structure raises no doubts.

Core 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 can never be 100% certainty about the direction of price 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.

AUD/USD. Analysis and Forecast

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After the Reserve Bank of Australia meeting on December 9, the rhetoric of Governor Michele Bullock became noticeably more hawkish. Both her statements and the published meeting minutes indicate that inflation has once again taken center stage, and the possibility of an additional interest rate hike was actively discussed as early as last month.

Consumer inflation in the country continues to accelerate: in October, the annual rate reached 3.8%, up from 3.6% in September and 3.2% in August. The November report will be released next week. Wage growth data also suggest that price pressures are intensifying. If this trend persists, the likelihood of an RBA rate hike will increase, supporting a strengthening of the Australian dollar.

At the same time, the situation in the United States is developing in the opposite direction. The Federal Reserve remains in the middle of a monetary easing cycle. Recent economic data, including jobless claims statistics, have been fairly positive. Nevertheless, political factors may add uncertainty: President Donald Trump is considering replacing Jerome Powell with a more dovish leader once his term ends in May.

Against the backdrop of New Year holidays in Japan and China, trading activity on Friday remains subdued. Market focus remains on the release of the U.S. manufacturing activity index (S&P Global Manufacturing PMI), the data from which matched expectations.

From a technical perspective, oscillators on the daily chart remain in positive territory, but prices failed to hold above the round 0.6700 level. Support is now provided by the 9-day EMA near 0.6680. If this level fails to hold, prices could accelerate their decline toward 0.6660.

However, if prices manage to break back above the round 0.6700 level, they would be poised to challenge the December high.

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

GBP/USD. Analysis and Forecast

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The pound started the European session on Friday by pulling back from the 1.3475 level and, at the time of writing, is trading slightly above 1.3440. Following a downward revision of the UK manufacturing PMI for December (S&P Global), the pound also declined, while remaining within the weekly range and above the 1.3400 threshold.

The manufacturing PMI data published today for the UK showed that growth momentum was weaker than expected. The final reading came in at 50.6 versus the preliminary 51.2. Despite the revision, the indicator remains above the 50.0 level that separates expansion from contraction, as well as above the November reading of 50.2, indicating continued, albeit moderate, expansion in the sector.

Attempts by the U.S. dollar to strengthen remain limited. The short-term trend for the pound remains downward after the December peak above 1.3530; however, the currency is holding on to most of the gains accumulated in November–December, having ended 2025 with an increase of more than 7%.

Over the past year, the dollar has been significantly undermined by U.S. President Donald Trump's inconsistent trade policy, signs of weakening economic growth, and political pressure on the Federal Reserve to accelerate interest rate cuts. In the medium term, exchange rate dynamics are determined by the divergence in monetary policy approaches between the U.S. and the UK.

The Bank of England cut its policy rate in December, a move that appears risky against the backdrop of persistent inflationary pressures and disagreements within the Monetary Policy Committee. This makes further policy easing unlikely. At the same time, the Federal Reserve expects at least two rate cuts in 2026, and if Jerome Powell is replaced by a more dovish chair, the probability of additional easing will increase. All else being equal, this configuration of factors may limit the potential for a recovery in the U.S. dollar in the coming months.

The reduced demand for the dollar is explained by a combination of factors: President Trump's inconsistent trade policy, signs of slowing economic growth, and political pressure on the Federal Reserve to further ease policy. In the medium term, the policy divergence between the Fed and the Bank of England remains the key driver of the pair's dynamics.

From a technical perspective, the pair has held above the 1.3440 level and above the 14-day EMA. The nearest resistance lies at 1.3480. A break above it would open the way toward the round 1.3500 level, on the path to the December high.

If the pair fails to hold above 1.3440, it may fall toward the round 1.3400 level, signaling a loss of bullish momentum. However, as long as oscillators on the daily chart remain in positive territory, the bulls remain in control.

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

EUR/USD. Smart Money. Bulls Are Walking on Thin Ice

.A week ago, the EUR/USD pair reversed in favor of the U.S. dollar and began a decline toward the most recent "bullish" imbalance 10. However, this imbalance was reached as early as December 29, produced almost no reaction, and the price has now slipped down to imbalance 9. Strictly speaking, it is still too early to sound the alarm. One should remember that the holidays are over, but the market has not yet fully recovered after the celebrations. Even imbalance 10 cannot be considered invalidated, since any imbalance is a three-candle formation that is deemed canceled only after its base is broken — in our case, the low of December 19. Thus, the bulls can still get out of the current situation without serious damage. But to do so, they need to stop celebrating and start trading.

Last week, there was a liquidity sweep from the swing high of December 16, which served as the basis for the start of the decline. The decline itself is still very weak, and a liquidity sweep is not a pattern — one cannot open trades or draw long-term conclusions based on it. The pair's decline may already be completed this week, since bullish imbalances 9 and 10 are support zones for price. The price may get a second reaction at imbalance 9, possibly combined with a liquidity sweep from the swing of December 19.

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 of 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 appear or bullish ones are invalidated, the strategy can be adjusted. But at the moment, nothing points to such a scenario.

There was no significant news background on Friday, and trader activity after the New Year remains minimal.

The bulls have had more than enough reasons for a new offensive for the past three months, and all of them remain relevant. These include the (in any case) dovish outlook for FOMC monetary policy, Donald Trump's overall policy (which has not changed recently), the U.S.–China confrontation (where only a temporary truce has been reached), protests against Trump (which have already swept across America three times this year), weakness in the labor market, the bleak outlook for the U.S. economy (recession), and the government shutdown (which lasted a month and a half but was clearly not priced in by traders). Thus, in my view, further growth of the pair would 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. However, I personally believe this is just another "temporary calm." In recent months, the FOMC has been easing monetary policy, which is why no new wave of criticism from Trump has emerged. But this does not mean these factors no longer create problems for the dollar.

I still do not believe in a bearish trend. The information background remains extremely difficult to interpret in favor of the dollar, which is why I do not even try to do so. The blue line marks the price level below which the bullish trend could be considered finished. To reach it, the bears would need to push the price down by about 400 pips, and I consider this task impossible under the current information background and circumstances. The nearest upside target for the European currency remains the bearish imbalance at 1.1976–1.2092 on the weekly chart, which was formed back in June 2021.

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

• U.S. – ISM Manufacturing PMI (15:00 UTC).

On January 5, the economic calendar contains one important event. The impact of the news background on market sentiment on Monday will be felt in the second half of the day.

EUR/USD forecast and trading advice:

In my view, the pair may be in the final stage of the bullish trend. Despite the fact that the information background remains on the bulls' side, bears have been attacking more frequently in recent months. Still, I do not see any realistic reasons for the start of a bearish trend at this time.

From imbalances 1, 2, 4, and 5, traders had opportunities to buy the euro. In all cases, we saw some degree of growth. Traders also had opportunities to open new trend-following long positions when a reaction to bullish imbalance 3 was received, after the reaction to imbalance 8, and then after the bounce from imbalance 9. This week, a reaction to bullish imbalance 10 may be received. The target for euro growth remains the 1.1976 level. Long positions can be kept open with stop losses moved to breakeven, or managed at traders' discretion.

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EUR/USD. Analysis and Forecast

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Today, Friday, the EUR/USD pair continues to decline from its December high. The weakening of the currency pair is driven by negative data on eurozone manufacturing activity, which has strengthened bearish sentiment toward the euro amid relatively quiet New Year trading conditions. Nevertheless, the EUR/USD rate remains close to the three-month high of 1.1808, reached just before the holidays.

Over the past year, the U.S. dollar has fallen by approximately 14% against the euro amid market concerns about the inconsistency of U.S. policy under Donald Trump, as well as signs of a slowdown in the U.S. economy and differences in monetary policy between the ECB and the Federal Reserve.

The latest final PMI data for Germany and the eurozone — the manufacturing Purchasing Managers' Index — point to a deterioration in the contribution of manufacturing activity to the region's gross domestic product. Today, attention should also be paid to the release of the final U.S. PMI data (S&P), which may bring fresh movement to the dollar's dynamics.

From a technical perspective, the pair has found support at the 20-day SMA, while oscillators on the daily chart remain in positive territory, confirming the bulls' ability to hold their ground. If prices fall below the 20-day SMA, the next support will be found at the round level of 1.1700. Below this level, the bias would shift in favor of the bears. Conversely, if prices manage to break above the 9-day EMA, followed by the 1.1760 level, a successful move through it would accelerate the advance toward the round level of 1.1800.

The table below shows the percentage change of the euro against major currencies today. The most notable strengthening of the euro was recorded against the Japanese yen.

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GBP/USD. Smart money

.The GBP/USD pair has returned to the "bullish" imbalance 12, and now both currency pairs (EUR/USD and GBP/USD) should be expected to react to bullish patterns. Thus, despite the decline in the pound's quotes over the past few days, the bullish trend remains intact, and the bulls continue to dominate the market. There is no talk of invalidating imbalance 12 at this stage, and corrective pullbacks can vary in size. I see nothing alarming even if the pound drops back to imbalance 11, sweeps liquidity from the swings of December 9 and December 17, and then starts a new upward move.

Last week, another bullish imbalance 12 was formed, and the price is currently working it off. Therefore, the price may react to it as early as today, 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 spanned two daily candles, which the price literally flew through to the upside. 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 could be considered completed, but the bullish trend in the euro is not. Therefore, the European currency can pull the pound upward for as long as necessary. The bulls have bounced off bullish imbalance 1, bullish imbalance 10, and bullish imbalance 11 twice. A large number of buy signals have been formed. A new support zone has formed below — imbalance 12. Thus, I still expect growth toward the yearly highs, around the 1.3765 level.

There was no significant news background on Friday. At the start of the new year, new chart-based buy signals may emerge, allowing traders to once again open long positions.

In the United States, the overall news backdrop remains such that, in the long term, nothing but a decline in the dollar can be expected. The situation in the U.S. remains quite challenging. 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.

For a bearish trend to form, the dollar would need a strong and stable positive news background, which is difficult to expect under Donald Trump. Moreover, the U.S. president himself does not need an expensive 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 continue to hang like dead weight on the dollar. What would allow the bears to push the pound further down if a bearish trend is supposedly forming now? I cannot answer this question, which is why I do not believe that the process of dollar decline will stop. If new bearish patterns appear, a potential decline in the pound sterling can be reconsidered.

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

• U.S. – ISM Manufacturing PMI (15:00 UTC).

On January 5, the economic calendar contains one entry that can be considered important and significant. The impact of the news background on market sentiment on Monday will be felt in the second half of the day.

GBP/USD forecast and trading advice:

The outlook for the pound remains favorable for traders. Three bullish patterns have been worked off, signals have been formed, and traders can continue to hold long positions. I see no informational grounds for a sharp decline in the pound in the near future.

The resumption of the bullish trend could have been expected as early as the imbalance 1 zone. At the moment, the pound has reacted to imbalance 1, imbalance 10, and imbalance 11. As a potential upward target, I am considering the 1.3725 level, although the pound may rise much higher. If bearish patterns form, the trading strategy may need to be revised, but this week it is more likely that another bullish signal will be generated from imbalance 12.

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EUR/USD. The pair under bearish control: is it worth entering short positions?

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The euro–dollar pair continues to trade within the 17th figure, showing contradictory price action inside the 1.1700–1.1800 level. During Thursday's Asian session, the pair surged sharply to 1.1766, reacting to fairly strong PMI growth data from China. However, at the start of the European session the pair reversed and fell just as sharply, updating the intraday low. In just a few hours, EUR/USD buyers lost all the ground they had gained.

That said, to confirm a downward trend, sellers need not only to break the intermediate support level at 1.1720 (the middle line of the Bollinger Bands indicator on the daily chart), but also to overcome the key price barrier at 1.1690 (the upper boundary of the Kumo cloud on the same timeframe). Only after the bears establish themselves below that level can one speak of the first signs of a trend reversal.

For the third consecutive week, the pair has been trading within the 17th figure, alternately bouncing off the boundaries of the aforementioned price channel. Market participants react impulsively to macroeconomic reports and other fundamental events, but as prices approach the edges of the range they take profits, thereby damping both upward and downward impulses.

Today's EUR/USD price action is a clear illustration of this behavior. Traders responded positively to the PMI reports released in China on the last day of 2025. The data came out in the green zone, which temporarily increased interest in risk assets on the market — including the euro.

Specifically, China's manufacturing PMI rose in December to 50.1, while most analysts had expected a reading of 49.4. First, the index has been rising for a second consecutive month, reflecting positive trends. Second, for the first time since March 2025, the indicator entered expansion territory, surpassing the key 50-point mark. Sub-indices also showed positive dynamics: for example, the production index rose to 51.7 (indicating a significant increase in activity), while the new orders index reached 50.8 (reflecting support for demand). On the other hand, sectoral unevenness remains evident. PMI growth was observed mainly among large companies, while small and medium-sized enterprises continue to face difficulties (especially small businesses). This may reflect easier access for large firms to credit, orders, and government support.

Nevertheless, the fact remains: China's PMI has crossed the critical 50-point threshold for the first time in many months, indicating that the country's manufacturing sector has begun to slow its decline and move into moderate growth.

Positive dynamics were also seen in the non-manufacturing activity index. In December, the indicator rose to 50.2 (versus a forecast of 49.8), after an unexpected drop into contraction territory in November. Notably, the main driver of activity growth was the construction sector — the business activity sub-index in this industry stood at 52.8. The services sector, however, lagged behind: the services business activity sub-index came in at 49.7 in December — still below the key 50.0 mark, though higher than the November reading.

Overall, December PMI data suggest that China's economy has reached a plateau and has begun a cautious recovery. However, it is still too early to talk about full-fledged and sustainable growth — the first months of the current year will be crucial for confirming the trend. The balance will either tilt toward the 50-point territory or slip back into contraction.

This mixed outcome provided only temporary support to EUR/USD buyers. By and large, today is the first full working day of the new year (although it is also the last trading day of the week), so traders are essentially re-evaluating releases that were published before the holidays.

For example, the minutes of the December Federal Reserve meeting turned out to be surprisingly hawkish. First, the document showed that Committee members remain deeply divided over the future course of monetary policy: some believe it is possible to continue easing if inflation keeps slowing, while others favor a pause in order to better assess the effects of steps already taken. Second, some of those who voted for a rate cut stated that the decision was made "on the margin" — under slightly different circumstances, they could have supported keeping rates unchanged.

In other words, the minutes reflected a cautious tone and emphasized the data-dependent nature of the central bank's future actions. After the publication of the minutes, dovish market expectations weakened: the probability of a rate cut at the January FOMC meeting now stands at 14%, and at the March meeting at 46%.

Still, despite the bearish sentiment currently dominating EUR/USD, entering short positions makes sense only if sellers confidently break below the 1.1690 support level (the upper boundary of the Kumo cloud on the daily chart). If the downward impulse fades in this price area, long positions will once again become relevant — with the first (and so far only) target at 1.1760 (the Tenkan-sen line on the daily chart).

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EUR/USD Forecast on January 2, 2025

.On Wednesday, the EUR/USD pair declined to the 38.2% corrective level at 1.1718, rebounded, and reversed in favor of the European currency. Thus, the growth process may continue toward the resistance level of 1.1795–1.1802. Today, another rebound from the 1.1718 level would again allow expectations of some growth in the pair, while a consolidation below 1.1718 would increase the likelihood of a decline toward the support level of 1.1645–1.1655 and lead to a breakdown of the "bullish" trend.

The wave situation on the hourly chart remains simple. The last completed upward wave failed to break the peak of the previous wave, while 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 Fed 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 Wednesday, the news background in the U.S. and the European Union was still absent, and the entire past week and the current week have been more festive than working weeks. Ahead of the New Year, bullish traders stopped attacking and gave bears the opportunity to take the initiative. However, the bears are also in no hurry to attack, preferring to wait until next week, when economic data will start coming in from the U.S. and the EU. I remind you that the key issues for traders remain the U.S. labor market, unemployment, and inflation. For bullish traders to continue their next offensive, these reports must continue to show weak readings. The FOMC has cut interest rates three times, but whether this will be enough to restore the labor market is still unclear. The U.S. dollar still cannot count on strong growth against the European currency, but the bulls also need new reasons to attack. Thus, in my view, it is necessary to wait for the next batch of statistics.

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

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 it is only strengthening over time. The total number of long positions held by speculators now stands at 277 thousand, while short positions amount to 132 thousand. This represents more than a twofold advantage for the bulls.

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

U.S. and Eurozone Economic Calendar:

On January 2, the economic events calendar contains no entries. The influence of the news background on market sentiment on Friday 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. The target was reached on Friday. A close below the 1.1718 level will allow new sell trades to be opened with a target of 1.1656. Buy trades could be opened on a rebound from the 1.1718 level with a target of 1.1795. Today, these trades can be kept open.

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

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GBP/USD Forecast on January 2, 2025

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On the hourly chart, the GBP/USD pair on Wednesday declined into the support level of 1.3437–1.3470, but so far has formed neither a rebound nor a breakout. Thus, a rebound of quotes from this zone would work in favor of the British pound and a resumption of growth toward the resistance level of 1.3526–1.3539. A consolidation of quotes below the 1.3437–1.3470 level would work in favor of the U.S. dollar and a continuation of the decline toward the support level of 1.3352–1.3362.

The wave situation remains "bullish." The last completed upward wave broke the previous peak, while the new downward wave has so far failed to break the previous low. The news background for the pound has been weak in recent weeks, but the information backdrop in the U.S. also leaves much to be desired. At the beginning of the new year, the bulls retreated slightly, but the trend remains intact, and traders are waiting for economic data.

The news background on Wednesday was essentially absent. However, on December 31, traders were unlikely to expect the release of important reports. Today is a half-holiday, but the market is gradually resuming operations, and by Monday trading may return to its usual rhythm. Already on Wednesday, trader activity began to increase, which indicates the end of the holiday period. Next week, inflation and unemployment reports will be released in the European Union, while in the U.S. there will be Nonfarm Payrolls, unemployment data, and ISM business activity indices. Thus, next week traders will have to determine who will dominate at the beginning of 2026. For the dollar, the key negative factor remains the "dovish" outlook for FOMC monetary policy. However, bullish traders will not attack forever based on this factor alone. New economic data are required to allow for new conclusions.

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

Commitments of Traders (COT) Report:

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

In my view, the British pound still looks less "dangerous" than the dollar. In the short term, the U.S. currency may occasionally enjoy demand in the market. But not in the long term. Donald Trump's policies led to a sharp deterioration in the labor market, and the Federal Reserve is forced to ease monetary policy to stop the rise in unemployment and stimulate job creation. For 2026, the FOMC does not plan strong 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.

U.S. and U.K. Economic Calendar:

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

GBP/USD Forecast and Trading Advice:

Selling the pair was possible on a rebound from the 1.3526–1.3539 zone on the hourly chart with a target of 1.3470. The target was reached. I would not rush into new sales 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 buys are recommended on another rebound from the 1.3437–1.3470 level.

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

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Trading Recommendations for Bitcoin (BTC) on January 2 According to the ICT System

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Bitcoin has been trading in another sideways range for three weeks and shows no intention of leaving it. During the holidays, volatility in the crypto market is minimal, and the market moves purely sideways. On the 4-hour timeframe, Bitcoin remains inside the sideways channel that began forming on December 1. Inside the range, trading opportunities can be sought only near its boundaries. Over the last three weeks, signals were received near the upper boundary — two deviations. When a deviation forms near the lower boundary, an upward move can be expected. However, recall that we are primarily interested in sell signals rather than buy signals, since the trend remains downward. Until Bitcoin exits the sideways channel, all internal patterns are irrelevant.

In a longer-term perspective (daily TF), we see a correction that may already be complete. However, one cannot be 100% certain about this because no sell signals have been received. The price only removed the liquidity for sale, but in the last month, it has traded more sideways than down or up. Thus, in the near term, trading is possible only from the boundaries of the sideways channel on the 4-hour TF.

On the weekly TF, Bitcoin must fall below $75,000 for the uptrend that began in 2022 to be officially considered finished. Only below $75,000 can one confidently state the "bullish" structure is broken. If that happens, the fall of Bitcoin could take several years.

Overall BTC/USD picture on 1D

On a daily TF, Bitcoin continues to form a downward trend, and the correction may be complete. The trend structure is identified as downward; the June bullish OB was worked out, the April bullish FVG was breached, and the $84,000 level (38.2% Fibonacci) — which we highlighted as a target — was reached. From here, Bitcoin can fall even to $60,000, where its last ascent began. In the previous round of decline, a small bearish FVG was formed, which currently serves as the only POI area for new sales. But Bitcoin has not yet worked off that pattern.

Overall BTC/USD picture on 4H

On the 4-hour TF, the technical picture also unambiguously indicates a downward trend, while the price remains in a sideways channel. The CHOCH line (trend break) that ran at $87,600 has been breached, meaning the short-term upward tendency is broken. However, inside the range, local trends do not matter. In the near term, traders can only trade from the boundaries of the sideways channel. From our point of view, sell signals are far more attractive than buy signals. Formally, two sell signals have already been formed. But that signal can already be considered worked out, since more than two weeks have passed since it was formed. On December 18, the price approached the lower line of the channel closely.

Trading recommendations for BTC/USD:

Bitcoin broke the upward structure on the daily TF and, for the first time in three years, began forming a full downward trend. The two nearest targets (the bullish OB in the $98,000–$102,700 area and the bullish FVG) have been worked out; now one should expect a fall to $70,800 (the 50.0% Fibonacci level of the three-year uptrend). Among the POI areas for selling, the only one to highlight is the nearest bearish FVG on the daily TF, located in the $96,800–$98,000 area, which Bitcoin has not yet reached. On the 4-hour TF, one can consider opening positions after new deviations form.

Explanations for illustrations:

CHOCH — change of trend structure (trend break).

Liquidity — liquidity, traders' Stop Losses, which market-makers use to accumulate their positions.

FVG — area of price inefficiency (Fair Value Gap). Price moves through such areas quickly, indicating the absence of one side in the market. Subsequently, the price tends to return and react to these areas.

IFVG — inverted Fair Value Gap. After returning to such an area, the price does not get a reaction but breaks impulsively, then tests it from the other side.

OB — Order Block. The candle is where a market-maker opened a position with the aim of taking liquidity to form their own position in the opposite direction.

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Trading Recommendations for Ether (Ethereum) on January 2 According to the ICT System

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Ether continues to trade with minimal price changes, as shown on any timeframe. The lull has lasted for several weeks in a row; the holidays have stretched on. However, this should not leave any traders in a stupor or in disappointment. A flat is an absolutely normal phenomenon. And when else would you expect a flat, if not during the holidays?

The most important thing is that the downside prospects remain. Thus, traders can expect a resumption of the decline. Recall that an excellent sell signal was formed for Ether in the form of the worked-off bearish FVG on the daily timeframe. Traders could open short positions on that signal; those positions are in profit, and there are no signals of a possible reversal upward. Positions can be left open or closed to take profit.

Overall, there is nothing more to add from a technical analysis standpoint. The market is turning down, but the reversal is not technical (the technical reversal happened long ago), but mental and psychological. After Bitcoin failed twice to break its ATHs, many began to understand that the uptrend was coming to an end and, in any case, could not last forever. Of course, many "experts" remain who continue to claim that the current decline is only a correction and that Bitcoin will reach new heights in 2026. That may happen. However, remind traders that many in 2025 also forecast growth to $200,000. Such forecasts should at least be halved.

Analysis ETH/USD 1D

On the daily timeframe, Ether continues to form a downward trend. In recent weeks, the price has been standing still, but earlier another bearish FVG was worked off, which gave a new sell signal. No new patterns have formed recently. The CHOCH line runs at $3,666 — the last Lower High. As long as the price remains below it, the downtrend persists. The upward correction may already be complete, since Ether reached its only unworked bearish FVG and received an unambiguous reaction confirmed on the lower timeframe. But now the market is in a Christmas/New Year pause.

Analysis ETH/USD 4H

On the 4-hour timeframe, the upward corrective trend is broken. The CHOCH line has been breached; therefore, the tendency for Ether is bearish on all timeframes. The last pattern on the 4-hour TF was a worked-off bullish FVG. Five reactions to the bullish FVG led to growth, but each time it was very weak. Recall that Ether's structure is bearish even on the 4-hour TF. Therefore, any rise is a correction. Several liquidity grabs strengthened the buy signal, but it can already be considered worked off.

Recommendations for trading ETH/USD:

A downward trend continues to form on the daily TF. The key sell pattern was and remains the bearish Order Block on the weekly TF. The movement provoked by this signal should be strong and prolonged. The correction in the crypto market may be complete. It is not certain that the trend will resume for Bitcoin/Ether from the bearish daily FVG, but that area was where opening short positions was reasonable. On the 4-hour TF, the cryptocurrency can at any moment begin a new leg down, but there are currently no sell signals or new bearish patterns. Decline targets — $2,717 and $2,618 — remain relevant. And these are only the nearest targets. Ether's downside potential is much greater.

Explanations for illustrations:

CHOCH — break of trend structure.

Liquidity — liquidity, traders' Stop Losses that market-makers use to accumulate their positions.

FVG — Fair Value Gap (area of price inefficiency). Price moves through such areas very quickly, indicating the absence of one side in the market. Subsequently, the price tends to return and react to such areas.

IFVG — Inverted Fair Value Gap. After returning to such an area, the price does not get a reaction but impulsively breaks through it and then tests it from the other side.

OB — Order Block. The candle on which a market-maker opened a position with the aim of taking liquidity to form their own position in the opposite direction.

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