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EUR/USD Analysis on December 19, 2025

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

In my opinion, the formation 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, in the coming weeks I expect the formation of a new upward wave set. We have seen the presumed waves 1 and 2, and now the instrument is in the stage of forming wave 3 or C. I expected that within this wave the instrument would rise to the level of 1.1717, which corresponds to the 38.2% Fibonacci level; however, this wave is taking on a more extended form, which is actually very positive, as in this case it may turn out to be impulsive—and along with it, the entire upward wave set.

The EUR/USD exchange rate barely changed on Friday, just as it did throughout the entire current week. Let me remind you that on Monday EUR/USD opened at 1.1739. At the time of writing this review, the rate stands at 1.1730. I am sure that this is not the kind of movement most of my readers expected at the beginning of the week. There was an enormous amount of news this week, but judging by the market's reaction, part of it was deemed unimportant, part of it bland, part of it was "checked off for the sake of form," and part of it was not traded due to contradictory data.

Let me remind you that the key reports this week were the U.S. Nonfarm Payrolls and the unemployment rate, which showed quite surprising readings. We also cannot ignore the U.S. and UK inflation reports, at the very least. The U.S. labor market delivered very strange figures: unemployment rose in November, yet payroll growth in November exceeded market expectations. Inflation slowed in the U.S., and it also slowed in the UK. The ECB and the Bank of England meetings ended exactly as market participants expected. The Bank of England and the Fed effectively received a "green light" from inflation for further policy easing.

In my view, the narrowing of the monetary policy divergence between the ECB and the Fed in 2026 will play a key role in the further weakening of the U.S. dollar. The construction of the upward trend segment is not complete, which is evident on any higher-timeframe chart. Therefore, neither the news background nor the wave count provides grounds to expect a decline. Over the past six months, the market has been squeezed between the levels of 1.1490 and 1.1853, which correspond to the 127.2% and 161.8% Fibonacci levels (bottom chart). Essentially, this is a sideways range. When it is completed, I expect the upward trend segment to resume.

General Conclusions

Based on the analysis of EUR/USD, I conclude that the instrument continues to form an upward trend segment. Donald Trump's policies and the Federal Reserve's monetary policy remain significant factors contributing to the long-term decline of the U.S. dollar. The targets of the current trend segment may extend as far as the 25th figure. The current upward wave set is beginning to develop, and one would like to believe that we are now observing the formation of an impulsive wave set that is part of the global wave 5. In this case, growth should be expected with targets near 1.1825 and 1.1926, which correspond to the 200.0% and 261.8% Fibonacci levels.

On a smaller timeframe, the entire upward trend segment is visible. The wave count is not the most standard, as the corrective waves are of different sizes. For example, the higher-degree wave 2 is smaller than the internal wave 2 within wave 3. However, this also happens. Let me remind you that it is best to identify clear and understandable structures on charts rather than rigidly tying everything to each individual wave. At present, 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 cannot be 100% certainty about the direction of movement. Do not forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

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

GBP/USD Analysis on December 19, 2025

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

Of course, any wave structure can become more complex and extended at any moment. Even the presumed wave 4, which has already been forming for six months, could turn into a five-wave structure, in which case we would be observing a correction for several more months. However, at the current moment, the market has a good chance of forming an upward wave set. If this is indeed the case, then the first two waves of this segment have already been completed, and we are now observing the formation of wave 3 or C, which is taking on an impulsive form and gives hope for an impulsive nature of the current wave set.

The GBP/USD pair moved within a range of about 15 basis points on Friday. The news background today was indeed weak, especially compared with the scale of events and reports released during the week. However, I should note that even during the week the market was in no hurry to open positions. More precisely, we certainly saw some activity, but on any chart we can also see sideways movement. The market alternated between buying and selling, and in the end failed to decide what to do next.

As I have already said, the key reports were those on the U.S. labor market and unemployment, which can be classified more as a negative than a positive for the dollar. Meanwhile, the U.S. consumer price index effectively gave the Fed the green light for another round of monetary policy easing. I doubt that this round will take place as early as January, but inflation is declining to applause from the White House. Therefore, another interest rate cut would be quite logical.

However, inflation is also falling in the United Kingdom, and at a fairly rapid pace. Thus, the Bank of England also has the opportunity to continue easing policy next year. The question is: which of the two central banks will cut its rate more aggressively? In my view, demand for the U.S. currency will continue to decline in 2026, but for now we are still observing alternating corrective wave sets. There is a possibility that the latest upward segment is impulsive, but there is not much confidence in that. Wave 4 may well become even more extended. Unfortunately, the current week did not provide a clear answer to the question of who is currently in a more positive mood—the pound or the dollar.

General Conclusions

The wave picture for GBP/USD has changed. We continue to deal with an upward, impulsive trend segment, but its internal wave structure has become complex. The downward corrective structure a-b-c-d-e within C in wave 4 appears to be complete, as does wave 4 as a whole. If this is indeed the case, I expect the main trend segment to resume, with initial targets around the 38 and 40 levels.

In the short term, I expected the formation of wave 3 or C with targets near 1.3280 and 1.3360, corresponding to the 76.4% and 61.8% Fibonacci levels. These targets have been reached. Wave 3 or C is still continuing to form, but three unsuccessful attempts to break through the 1.3450 level, which corresponds to the 61.8% Fibonacci level, are cause for concern.

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

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 cannot be 100% certainty about the direction of movement. Do not forget about protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.

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

EUR/USD. Smart Money. The Market Flared Up Quickly and Faded Just as Fast

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The EUR/USD pair has started a corrective pullback and for the third consecutive day has been "assaulting" imbalance 9. Let me remind you that an imbalance zone is not only an area of interest for traders, but also, in a sense, a support zone. So far, however, we see neither a clear reaction to the imbalance nor its complete disregard. Trader activity is once again drifting toward zero. Thus, a new "bullish" signal that would allow traders to open new long positions may form, but I do not yet see a market reaction to the pattern. I would also remind you that I advised buying the euro from imbalance zones 3 and 8 as well, where "bullish" signals were also formed. As of now, those trades are showing a profit of about 170 points. If "bullish" imbalance 9 is not invalidated, traders may be able to count on significantly greater profits. However, each trader has the right to decide independently whether to keep an open long position.

The chart picture continues to signal "bullish" dominance. The "bullish" trend remains intact; a reaction to "bullish" imbalance 3 has been received, as has a reaction to "bullish" imbalance 8. Despite the fairly prolonged decline in the European currency, the dollar still failed to break the "bullish" trend. It had five months to do so—and achieved no result. Last week, a new "bullish" imbalance 9 was formed, which now acts as another area of interest and a support zone for the bulls. I would also like to remind once again that if "bearish" patterns appear or signs of a breakdown of the "bullish" trend emerge, the strategy can be adjusted. But at the moment, nothing points to that.

The news background on Friday was very weak, so I did not expect market activity. Indeed, there is no activity, and therefore no conclusions can be drawn. For now, one can only wait for a reaction to imbalance 9—or for its invalidation.

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

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

I still do not believe in a "bearish" trend. The news background remains extremely difficult to interpret in favor of the dollar, which is why I do not even try to do so. The blue line marks the price level below which the "bullish" trend could be considered complete. To reach it, the bears would need to push the price down by about 360 points, and they have been unable to cover a much shorter distance over the past few months. 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 Eurozone

On December 22, the economic calendar contains no entries of interest, and traders can already begin preparing for the New Year. The impact of the news background on market sentiment on Monday will be absent.

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 news background remains on the side of the bulls, it has been the bears who have attacked more often in recent months. Still, I do not currently see realistic reasons for the start of a "bearish" trend.

From imbalances 1, 2, 4, and 5, traders had opportunities to buy the euro. In all cases, we saw a certain degree of growth. Traders also had opportunities to open new trend-following long positions when a reaction to "bullish" imbalance 3 was received, as well as after the reaction to imbalance 8. The target for euro growth remains the 1.1976 level. Long positions can be kept open, with Stop Loss moved to breakeven. A new "bullish" imbalance 9 has also been formed, which may give traders a new "bullish" signal—but for now, there is no reaction.

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

GBP/USD. Smart Money. The Celebration Turned Out to Be Premature

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The GBP/USD pair completed a reversal in favor of the U.S. dollar and returned to the "bullish" imbalance 11 after liquidity was taken from the previous swing. And that's where all movement ended. The reaction to this pattern was seen last week, but there is nothing wrong with a second or even third execution of the same pattern. Let me remind you that imbalances can be filled by 50% or even 100%. Sometimes this requires several attempts. Thus, in the near future the price may bounce off the imbalance, push deeper into it, then reverse, take liquidity from the last "bearish" swing, and then reverse again. Only if the imbalance is invalidated will I consider a scenario of a serious decline or a "bearish" trend. For now, however, there is no reason for concern, as the price has been trading in a tight range for several days.

At the moment, the picture is as follows. The "bullish" trend in the British pound can be considered complete, but the "bullish" trend in the euro most certainly is not. Thus, the European currency may pull the pound higher, although the pound itself has been performing quite well in recent weeks. Bulls bounced off "bullish" imbalance 1, "bullish" imbalance 10, and "bullish" imbalance 11. A large number of buy signals were formed. The market is currently in a pause, even though the news background this week allowed for expectations of high trader activity. There are no "bearish" patterns above the market for the pound—there is nothing to stop further growth. The only thing worth noting is the taking of "bearish" liquidity, which may lead to a corrective pullback. However, a new "bullish" signal may form inside imbalance 11.

On Friday, the UK released a retail sales report that made traders yawn. I would note that price action this week has been fairly weak. I was expecting a much stronger market reaction to the large amount of information from the UK and the U.S. But traders reacted quite sluggishly to U.S. inflation, UK inflation, the ECB and Bank of England meetings, Nonfarm Payrolls, and the unemployment rate. Therefore, expecting the market to suddenly become active on retail sales data was na?ve.

In the U.S., the overall news background 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 only agreed on funding through 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 most recent labor market data allows for a fourth consecutive easing of monetary policy in January. In my view, the bulls have everything they need to launch a new offensive and return prices to the highs of the year.

A "bearish" trend would require a strong and stable positive news background for the U.S. dollar, which is hard 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. Therefore, I still do not believe in a "bearish" trend for the pound, despite the fairly strong decline that lasted two months. Too many risk factors remain hanging like dead weight on the dollar. The current "bullish" trend can be considered complete, as quotes fell below two lows (from May 12 and August 1), but what exactly are the bears going to use to push the pound further down? Precisely because I cannot give a clear answer to this question, I do not believe the decline will continue. If new "bearish" patterns appear, a potential decline in the pound sterling can be reconsidered.

News Calendar for the U.S. and the UK

United Kingdom:

• Change in GDP volumes in the third quarter (07:00 UTC).

On December 22, the economic calendar contains only one entry, which is of little interest. The impact of the news background on market sentiment on Monday may be extremely weak.

GBP/USD Forecast and Trading Advice

For the pound, the picture is starting to look more pleasing to the eye. Three "bullish" patterns have been worked out, signals have been formed, and traders can maintain buy positions. I see no informational grounds for a "bearish" trend in the near future.

A resumption of the "bullish" trend could have been expected as early as from imbalance zone 1. At this point, the pound has already reacted to imbalance 1, imbalance 10, and imbalance 11. As a target for potential growth, I am considering the 1.3725 level. If "bearish" patterns form, the trading strategy may need to be revised, but in the near term only a new "bullish" signal may appear—namely, liquidity taking and a second execution of the "bullish" imbalance 11.

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

USD/JPY: Tips for Beginner Traders on December 19th (U.S. Session)

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Trade Breakdown and Trading Tips for the Japanese Yen

The test of the 156.13 price level occurred when the MACD indicator was just beginning to move up from the zero line, which confirmed a correct entry point for buying the dollar. As a result, the pair rose by more than 60 points.

Comments from the head of the Bank of Japan regarding further interest rate hikes diverged from market expectations, which triggered this reaction. In the second half of the day, the key focus will be the release of U.S. existing home sales data, as well as the University of Michigan's consumer sentiment index and inflation expectations. These figures will serve as an important barometer of the state of the U.S. economy and consumer confidence. If existing home sales increase, the U.S. dollar is likely to continue rising.

The University of Michigan Consumer Sentiment Index will show how Americans assess the current economic environment and what they expect going forward. This index, along with inflation expectations data, is of significant importance to the Federal Reserve, which takes it into account when making monetary policy decisions. Elevated inflation expectations could prompt the Fed to adopt a more cautious stance, which would be positive for the dollar and negative for the yen.

As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY upon reaching the entry point around 157.49 (green line on the chart), targeting a rise to the 158.44 level (the thicker green line on the chart). Around 158.44, I plan to exit long positions and open sell positions in the opposite direction (targeting a 30–35 point move in the opposite direction from that level). Further gains in the pair can be expected in line with the prevailing trend.Important: Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the case of two consecutive tests of the 156.96 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 157.49 and 158.44.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after an update of the 156.96 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be the 156.30 level, where I plan to exit sell positions and immediately open buy positions in the opposite direction (targeting a 20–25 point move in the opposite direction from that level). Pressure on the pair is unlikely to return today. Important: Before selling, make sure the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 157.49 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 156.96 and 156.30 can be expected.

What's on the Chart:

• Thin green line – entry price at which the instrument can be bought;
• Thick green line – estimated price where Take Profit can be set or profits can be manually locked in, as further growth above this level is unlikely;
• Thin red line – entry price at which the instrument can be sold;
• Thick red line – estimated price where Take Profit can be set or profits can be manually locked in, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to focus on overbought and oversold zones.

Important: Beginner Forex traders must be extremely cautious when making market entry decisions. Ahead of major fundamental reports, it is best to stay out of the market to avoid being caught in sharp price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

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

GBP/USD: Tips for Beginner Traders on December 19th (U.S. Session)

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Trade Breakdown and Trading Tips for the British Pound

The test of the 1.3369 price level occurred when the MACD indicator was just beginning to move down from the zero line, which confirmed a correct entry point for selling the pound. However, the pair did not go on to post a major decline.

Despite the fact that UK retail sales fell by 0.1% in November this year, the pound barely reacted. Although the data came as an unpleasant surprise to the market, which had been expecting confirmation of resilient consumer demand.

In the second half of the day, the focus will shift to U.S. existing home sales data, as well as the consumer sentiment index and inflation expectations from the University of Michigan. These figures will serve as important indicators of the state of the U.S. economy and consumer confidence. Existing home sales are traditionally viewed as a leading indicator of economic activity. The University of Michigan Consumer Sentiment Index will provide insight into how Americans assess the current economic situation and what expectations they have for the future. If the figures come in worse than expected, this could lead to a decline in the U.S. dollar and a strengthening of the British pound.

As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy the pound upon reaching the entry point around 1.3392 (green line on the chart), targeting a rise to the 1.3414 level (the thicker green line on the chart). Around 1.3414, I plan to exit long positions and open sell positions in the opposite direction (targeting a 30–35 point move in the opposite direction from that level). Pound gains today can only be expected after weak U.S. data. Important: Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the pound today in the case of two consecutive tests of the 1.3372 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 1.3392 and 1.3414.

Sell Signal

Scenario No. 1: I plan to sell the pound today after an update of the 1.3372 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be the 1.3350 level, where I plan to exit sell positions and immediately open buy positions in the opposite direction (targeting a 20–25 point move in the opposite direction from that level). Pressure on the pound could return at any moment today. Important: Before selling, make sure the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2: I also plan to sell the pound today in the case of two consecutive tests of the 1.3392 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3372 and 1.3350 can be expected.

What's on the Chart:

• Thin green line – entry price at which the instrument can be bought;
• Thick green line – estimated price where Take Profit can be set or profits can be manually locked in, as further growth above this level is unlikely;
• Thin red line – entry price at which the instrument can be sold;
• Thick red line – estimated price where Take Profit can be set or profits can be manually locked in, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to focus on overbought and oversold zones.

Important: Beginner Forex traders must be extremely cautious when making market entry decisions. Ahead of major fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

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

EUR/USD: Tips for Beginner Traders on December 19th (U.S. Session)

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Trade Breakdown and Trading Tips for the European Currency

The price test of 1.1715 occurred at a moment when the MACD indicator was just beginning to move down from the zero line, which confirmed a correct entry point for selling the euro. As a result, the pair declined by 10 points.

German data had no impact on the pair's direction. Given that producer prices remained unchanged and the GfK report brought no surprises, this had no noticeable effect on the EUR/USD rate in the first half of the day. It is clear that a cautious sentiment currently prevails in the market.

Next, we are awaiting figures on existing home sales. This indicator serves as a kind of barometer of the economy's health. High sales volumes signal confidence among the population about the future, stable incomes, and favorable lending conditions. Low sales volumes, on the contrary, point to uncertainty, fear of economic shocks, and possibly rising mortgage rates. Considering that the Fed is cutting interest rates, this should lead to a revival in the existing home market.

After analyzing the housing market data, attention will shift to the University of Michigan Consumer Sentiment Index. This index is not just a dry number, but a reflection of the collective mood—an indicator of consumer optimism or pessimism. It is formed based on household surveys assessing the current state of personal finances, employment prospects, and overall economic expectations. A high index indicates a willingness to spend, which in turn stimulates economic growth. A low index, on the other hand, foreshadows weaker consumer activity and a possible slowdown. Finally, the day will conclude with data on inflation expectations.

As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, buying the euro is possible when the price reaches the level around 1.1726 (green line on the chart), with a target of growth toward 1.1749. At 1.1749, I plan to exit the market and also sell the euro in the opposite direction, targeting a move of 30–35 points from the entry point. Strong euro growth should only be expected after good U.S. data. Important: Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1705 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth can be expected toward the opposite levels of 1.1726 and 1.1749.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1705 level (red line on the chart). The target will be 1.1683, where I intend to exit the market and immediately buy in the opposite direction (targeting a 20–25 point move in the opposite direction from that level). Pressure on the pair may return today in the case of strong data. Important: Before selling, make sure the MACD indicator is below the zero line and is just beginning to move down from it.

Scenario No. 2: I also plan to sell the euro today in the case of two consecutive tests of the 1.1726 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.1705 and 1.1683 can be expected.

What's on the Chart:

• Thin green line – entry price at which the instrument can be bought;
• Thick green line – estimated price where Take Profit can be set or profits can be manually locked in, as further growth above this level is unlikely;
• Thin red line – entry price at which the instrument can be sold;
• Thick red line – estimated price where Take Profit can be set or profits can be manually locked in, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to pay attention to overbought and oversold zones.

Important: Beginner Forex traders need to be extremely cautious when making entry decisions. Before the release of major fundamental reports, it is best to stay out of the market to avoid being caught in sharp price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can very quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

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

USD/JPY. Analysis and Forecast

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Today, the pair showed a strong bullish impulse, breaking through two round levels at 156.00 and 157.00, as well as resistance at 157.20.

The yen extended its intraday losses after opening remarks by Bank of Japan Governor Kazuo Ueda at the press conference following the policy meeting. At the conclusion of the two-day meeting on Friday, the Bank of Japan decided to raise the short-term policy rate by 25 basis points to 0.75%, reaching a level considered the highest in three decades. This move had largely been priced in by the markets and did not trigger sharp fluctuations in the yen. In its accompanying statement, the Bank of Japan said it would continue to raise interest rates provided that prices and economic conditions evolve in line with its forecasts.

Central bank officials emphasized that the likelihood of the baseline scenario being realized has increased, but they offered no specific guidance on future policy steps. At the press conference, Governor Ueda noted that Japan's economy is showing moderate stability, though certain weaknesses remain. He added that the regulator will closely monitor the effects of the latest rate hike, and that the pace of monetary policy actions will depend on economic, price, and financial indicators.

Earlier today, Japan's Statistics Bureau reported that the year-on-year consumer price index rose by 2.9% in November, slightly slowing from 3.0% in the previous month. Additional data showed that core CPI, which excludes volatile fresh food prices, remained at 3.0%, in line with market expectations. Meanwhile, the core index excluding both energy and fresh food prices eased from 3.1% to 3.0% in November. Despite this, inflation in the country remains stable and well above the Bank of Japan's 2% target. At the same time, proponents of a stronger yen remain cautious and are waiting for additional signals that the Bank of Japan is ready to further tighten policy. In this context, Ueda's comments will play an important role, as they could significantly influence yen dynamics.

Developments in Japanese government bonds—issued by a country whose debt exceeds 250% of GDP, a record level—continue to unsettle markets and fuel concerns about the state of the nation's finances amid Prime Minister Sanae Takaichi's large-scale spending plans. This situation is likely to further weaken the yen.

From the United States, the Bureau of Labor Statistics reported that in November the inflation index rose by 2.7% year-on-year, slightly below the forecast of 3.1%. Core CPI, excluding food and energy prices, increased by 2.6%, also missing expectations. The data point to a possible slowdown in inflationary pressures, making the prospect of Federal Reserve rate cuts more realistic. Traders are pricing in rate cuts totaling 63 basis points in 2026. U.S. President Donald Trump has noted that the next Fed chair will be a candidate willing to support significant rate cuts.

This divergence in the monetary policies of the two countries should at least help slow the yen's decline.

From a technical perspective, as prices have surged through the round levels of 156.00 and 157.00 and resistance at 157.20, approaching the next resistance at 157.50, while daily chart oscillators remain positive and far from overbought territory, there is a very high probability that prices will reach the round 158.00 level in the near future.

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

Trading Signals for GOLD for December 19-22, 2025: buy above $4,321 (21 SMA - rebound)

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Gold is trading around $4,325, following consolidation over the last few hours above the 21 SMA. The bullish momentum is being exhausted.

According to the H4 chart, we can see that gold has been testing the downtrend channel, which means there is likely to be a technical rebound in the coming hours if the price consolidates above $4,320 (21 SMA).

With the price being above the 21 SMA, there is an opportunity to open long positions, which could push the instrument towards $4,342. Gold could even return to its high reached around the 8/8 Murray located at $4,375.

A decisive break and consolidation below $4,320 could be the start of a new bearish sequence. We could expect gold to reach 1/8 Murray around $4,218 in the coming days. The price could finally reach the 200 EMA around $4,182.

The Eagle indicator is showing a negative signal, so the odds are that gold will decisively break the downtrend channel. However, we must wait for confirmation before making a decision to sell.

Our outlook remains bullish as long as the price remains above $4,321. So, our trading plan could be to buy, anticipating the price to reach $4,375 in the coming hours.

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

Trading Signals for BITCOIN for December 19-22, 2025: sell below $88,500 (21 SMA - 2/8 Murray)

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Bitcoin is trading around $87,891 after a sharp drop to $84,323 yesterday during the US session. We are now seeing a recovery and consolidation above the 2/8 Murray and above the 21 SMA, indicating a possible breakout from the downtrend channel.

According to the H4 chart, we can see that Bitcoin has formed a double bottom pattern, which could indicate that Bitcoin could rebound to $93,750 in the future and even return to the psychological level of $100,000.

Meanwhile, we can see that the instrument is within the downtrend channel formed since December 8. So, if it reaches $88,700 and tries unsuccessfully to break this zone, it could be seen as an opportunity to open short positions.

On the contrary, if Bitcoin breaks decisively and consolidates above $89,250, it could be seen as a positive sign, and it could reach the 200 EMA around $91,550 in the short term or even reach 3/8 Murray around $93,750.

Given that Bitcoin has recovered rapidly in recent hours, a technical correction is likely. If the price returns below $87,500, it could be seen as a negative signal, and Bitcoin could once again reach the bottom of the downtrend channel around $82,500 and could even reach the 1/8 Murray around $81,250.

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

Trading Signals for EUR/USD for December 19-21, 2025: sell below 1.1737 (rebound - 4/8 Murray)

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EUR/USD is trading around 1.1711, below 4/8 Murray and below the 21 SMA, under some downward pressure, which indicates that it could continue its fall in the coming hours.

However, we can see on the H4 chart that the euro has found good support around 1.1700. This level could give EUR/USD a technical rebound, and the instrument could reach the top of the downtrend channel around 1.1737.

If the euro recovers in the coming hours, it could face strong resistance from the top of the downtrend channel and, in turn, the 21 SMA, which could be seen as an opportunity to enter short positions. The target could be around 1.1740, and at Murray's 3/8 located at 1.1657. The euro could even find good support around the 200 EMA located at 1.1635.

A sharp break of the downtrend channel formed since December 15 and a consolidation above 1.1740 could be seen as a positive sign for the euro. EUR/USD is expected to reach Murray's 5/8 at 1.1779 and even Murray's 6/8 at 1.1840.

The outlook remains negative for the euro, so any technical rebound that occurs in the coming hours could be seen as an opportunity to open short positions in anticipation of reaching the psychological level of 1.1500 in the coming days.

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

Trading Signals for Ethereum for December 19-21, 2025: buy above $2,906 (21 SMA - 1/8 Murray)

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Ethereum is trading around $2,954 within the downtrend channel formed since December 8 and is showing signs of recovery after finding good support around 1/8 of the Murray level. A double bottom pattern is in progress.

If the bullish force prevails, we could expect ETH/USD to break decisively through the downtrend channel in the coming hours.

If ETH consolidates above the psychological level of $3,000, then we could expect it to reach the 200 EMA around $3,134 and even return to the 3/8 Murray levels around $3,437.

On the other hand, if ETH/USD falls below $2,906, where the 21 SMA is located, there is a chance that the bearish cycle will resume. If this scenario occurs, the cryptocurrency could return to $2,812. If the instrument breaks below this level, it could reach the bottom of the uptrend channel around $2,690, and possibly lower, to reach the 0/8 Murray level around $2,500.

The Eagle indicator is showing a positive signal after a consolidation in the oversold zone. We could expect Ethereum to reach $3,437 in the coming days and it could even return to 3,750.

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

Level and Target Adjustments for the U.S. Session – December 19th

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Today, only the Australian dollar and the euro were traded using the Mean Reversion strategy. I traded the Japanese yen using the Momentum strategy.

As the data showed, German producer prices were unchanged compared with the previous month, which put slight pressure on the EUR/USD pair in the first half of the day. The impact of this factor on the currency market was limited, as traders continue to bet on a slowdown in price pressures in the region. The lack of growth in German producer prices may indicate easing inflation in the eurozone, which in turn could influence ECB decisions.

The pound also reacted with only a slight decline to weak UK retail sales data, which keeps the chances of a new upward wave in the pair during the U.S. session.

In the second half of the day, attention will turn to U.S. housing market data. The secondary (existing-home) sector also serves as an important indicator of overall economic well-being. Strong sales volumes point to consumer confidence in the future, stable financial conditions, and attractive lending terms, which could provide short-term support for the dollar. This will be followed by the consumer sentiment index published by the University of Michigan. This indicator is a barometer of consumer optimism or pessimism, based on household surveys. An increase in the index always supports gains in the U.S. dollar.

If the data are strong, I will rely on the Momentum strategy. If there is no market reaction to the data, I will continue to use the Mean Reversion strategy.

Momentum Strategy (Breakout) for the Second Half of the Day:

For EUR/USD

• Buy on a breakout above 1.1730, which could lead to a rise toward 1.1750 and 1.1775;
• Sell on a breakout below 1.1705, which could lead to a decline toward 1.1680 and 1.1640.

For GBP/USD

• Buy on a breakout above 1.3390, which could lead to a rise toward 1.3420 and 1.3455;
• Sell on a breakout below 1.3370, which could lead to a decline toward 1.3355 and 1.3312.

For USD/JPY

• Buy on a breakout above 157.32, which could lead to a rise toward 157.72 and 157.96;
• Sell on a breakout below 157.00, which could trigger selling toward 156.50 and 156.20.

Mean Reversion Strategy (Pullback) for the Second Half of the Day:

For EUR/USD

• I will look for sell opportunities after a failed breakout above 1.1727, on a return below this level;
• I will look for buy opportunities after a failed breakout below 1.1704, on a return back to this level.

For GBP/USD

• I will look for sell opportunities after a failed breakout above 1.3390, on a return below this level;
• I will look for buy opportunities after a failed breakout below 1.3360, on a return back to this level.

For AUD/USD

• I will look for sell opportunities after a failed breakout above 0.6619, on a return below this level;
• I will look for buy opportunities after a failed breakout below 0.6602, on a return back to this level.

For USD/CAD

• I will look for sell opportunities after a failed breakout above 1.3805, on a return below this level;
• I will look for buy opportunities after a failed breakout below 1.3781, on a return back to this level.

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

GBP/USD. Analysis and Forecast

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On the last trading day of the week, the GBP/USD pair is halting yesterday's correction from the area around 1.3440. However, it is still struggling to attract significant buying interest.

The pound is being supported by the Bank of England's recently adopted measures, which have boosted expectations regarding its future policy. Despite the split vote (5–4), the 25-basis-point rate cut to 3.75% is being perceived by the market as a signal of a dovish approach, especially after the unexpected drop in inflation earlier this week. These factors reduce pressure on monetary policy expectations in the UK and trigger a positive reaction from investors.

At the same time, U.S. data that came in below expectations provided support to the GBP/USD pair. The U.S. Bureau of Labor Statistics showed a slowdown in price growth: the headline index rose by 2.7% year-on-year, below the expected 3.1%. Core inflation, which excludes volatile components, was also below forecasts at 2.6%. This news reinforces expectations of further Federal Reserve rate cuts next year.

As a result, dovish Fed expectations are keeping dollar bulls on the defensive, thereby helping the currency pair hold above the key 200-day simple moving average (SMA). This, in turn, confirms the likelihood of further strengthening of the pair.

From a technical perspective, as long as prices remain above both the 100-day and 200-day SMAs, and oscillators on the daily chart remain positive and well away from overbought territory, the outlook for the pair remains constructive. For further upside, prices need to break above the round 1.3400 level, which would open the way toward important resistance in the 1.3440–1.3450 level. Support has been found at the 100-day SMA around 1.3361; a move below this level, as well as below the 200-day SMA, would accelerate a decline toward the round 1.3300 level.

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

EUR/USD Forecast on December 19, 2025

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On Thursday, the EUR/USD pair once again bounced off the 38.2% retracement level at 1.1718, posted a modest rise, and then returned to this level. I had expected a more confident move during the day given the news background. However, traders found nothing particularly important for themselves in the ECB and Bank of England meetings, nor in the U.S. inflation report. Today, another rebound from the 1.1718 level would again work in favor of the European currency and a modest rise toward the resistance level of 1.1795–1.1802. A firm consolidation of the pair below 1.1718 would increase the likelihood of a continued decline toward the support level of 1.1645–1.1656.

The wave structure on the hourly chart remains simple and clear. The last completed downward wave did not break the low of the previous wave, while the most recent upward wave broke the prior peak. Thus, the trend officially remains "bullish." It would be hard to call it strong, but in recent weeks the bulls have regained confidence and begun attacking with renewed vigor. The easing of the Fed's monetary policy supports further growth of the euro, and the ECB will not create any problems for the single currency in the near future.

As already noted, Thursday's news background was abundant for both the dollar and the euro. It is not the EUR/USD pair's fault that traders found no grounds for active trading. The ECB made no important decisions, did not announce changes to monetary policy at the start of 2026, and is generally satisfied with economic indicators. The inflation report showed a rather weak reading, which undoubtedly pleased one well-known person in the White House. Donald Trump can now claim that he was right about inflation. The consumer price index in the U.S. is slowing, and Trump's trade war has not led to strong and sustained price growth. However, many economists point out the inaccuracy of the November report. The U.S. Bureau of Statistics was unable to collect data for October, and in November various holiday sales began, so prices were artificially depressed. The inflation figure reacted to this temporary price decline and therefore cannot be considered fully representative. As a result, the market did not rush to conclusions about new FOMC monetary easing in January, and the FOMC itself will receive another inflation report before its next meeting, which should more accurately reflect the price situation in the U.S.

On the 4-hour chart, the pair reversed in favor of the U.S. dollar after the formation of a bullish divergence on the CCI indicator. Thus, the decline may continue for some time toward the support level of 1.1649–1.1680. A rebound of quotes from this level would favor the European currency and a resumption of growth toward the 0.0% retracement level at 1.1829.

Commitments of Traders (COT) Report:

During the latest reporting week, professional players opened 8,041 long positions and closed 17,377 short positions. COT reports have resumed publication after the shutdown, but the data being released are still outdated—covering October and November. The sentiment of the "Non-commercial" group remains bullish thanks to Donald Trump and continues to strengthen over time. The total number of long positions held by speculators now stands at 243 thousand, while short positions amount to 145 thousand.

For thirty-three consecutive weeks, large players have been shedding short positions and building up longs. Donald Trump's policies remain the most significant factor for traders, as they could cause numerous problems of a long-term and structural nature for the U.S. Despite the signing of several important trade agreements, analysts fear a recession in the U.S. economy, as well as a loss of the Fed's independence under pressure from Trump and amid Jerome Powell's expected resignation in May next year.

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

• Eurozone – German Consumer Confidence Index (07:00 UTC).
• United States – Existing home sales (15:00 UTC).
• United States – University of Michigan Consumer Sentiment Index (15:00 UTC).

On December 19, the economic calendar contains three entries of little interest. The impact of the news background on market sentiment on Friday may be very weak.

EUR/USD Forecast and Trading Advice:

Selling positions are possible if prices consolidate below the 1.1718 level on the hourly chart, with a target of 1.1656. Buy positions can be opened on a rebound from the 1.1718 level, with a target of 1.1795–1.1802.

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

GBP/USD Forecast on December 19, 2025

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On the hourly chart, the GBP/USD pair on Thursday bounced off the support level of 1.3352–1.3362, rose to the 1.3425 level, rebounded from it, and began a new decline toward 1.3352–1.3362. Another rebound of quotes from this zone would again work in favor of the pound and lead to some growth toward the 1.3425 and 1.3470 levels. A firm break below the zone would allow traders to expect a continuation of the decline toward the 1.3294 and 1.3240 levels.

The wave picture turned "bullish" several weeks ago, but this week it shifted back to "bearish." The last completed upward wave broke the previous peak by only a few points, while the most recent downward wave managed to break the previous low. The news background for the pound has been weak in recent weeks, and the bears have fully worked it off. At the same time, the U.S. news background also leaves much to be desired. This week, however, not the most positive data have again started coming out of the UK. That said, the U.S. did not please the dollar with strong statistics either.

Thursday's news background sparked a lot of debate and discussion in the market. The Bank of England made the expected decision to cut interest rates, which came as no surprise. At the same time, it remains unclear how the British central bank intends to act next year. Meanwhile, in the U.S., the November inflation report was released, showing a slowdown in price growth to 2.7% year-on-year. Such a figure could have convinced the market of the need for further monetary easing by the FOMC in January, but many economists immediately pointed out that no long-term conclusions should be drawn from the November inflation reading alone. In November, "Black Friday" took place worldwide—a discount day that has long ceased to be just one day. Discounts, sales, and promotions begin a week or even two before Black Friday. As a result, prices were artificially suppressed for at least half a month. The next inflation report for December may already show a renewed increase in the consumer price index. Thus, neither the bulls nor the bears were able to benefit from yesterday's events, although at first glance both seemed to allow no double interpretation.

On the 4-hour chart, the pair completed a third rebound from the 100.0% corrective level at 1.3435, reversed in favor of the U.S. dollar, and began a new decline toward the 1.3140 level. A firm consolidation above 1.3435 would allow expectations of further growth toward the Fibonacci level of 127.2% at 1.3795. No emerging divergences are observed today on any indicator.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" category of traders did not change over the last reporting week, although this reporting period was a month ago—dated November 18. The number of long positions held by speculators increased by 766, while the number of short positions decreased by 981. The gap between the number of long and short positions is now effectively as follows: 53 thousand versus 132 thousand. As we can see, bears dominated a month ago, but the situation may now be completely different. And for the euro, it was the opposite even a month ago. Thus, I do not believe that the market for the pound is currently "bearish."

In my view, the pound still looks less "dangerous" than the dollar. In the short term, the U.S. currency occasionally enjoys demand in the market, but I believe this is a temporary phenomenon. Donald Trump's policies have led to a sharp deterioration in the labor market, and the Fed is forced to ease monetary policy in order to curb rising unemployment and stimulate job creation. For 2026, the FOMC does not plan aggressive monetary easing, but at the moment no one can be sure of this, because labor market statistics are still lacking.

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

• United Kingdom – Change in retail sales volume (07:00 UTC).
• United States – Existing home sales (15:00 UTC).
• United States – University of Michigan Consumer Sentiment Index (15:00 UTC).

On December 19, the economic calendar contains only three events, each of which is less important than the data released earlier this week. The impact of the news background on market sentiment on Friday may be weak.

GBP/USD Forecast and Trading Advice:

Selling positions could be opened on a rebound from the 1.3425 level on the hourly chart with a target of 1.3352–1.3362. The target has been reached. New sell positions can be considered after a close below the 1.3352–1.3362 level with a target of 1.3294. Today, I recommend considering buy positions on a rebound from the 1.3352–1.3362 level with targets at 1.3425 and 1.3470.

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

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

Forex forecast 19/12/2025: EUR/USD, USD/JPY, GBP/USD, SP500, Oil, Gold and Bitcoin

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We introduce you to the daily updated section of Forex analytics where you will find reviews from forex experts, up-to-date monitoring of financial information as well as online forecasts of exchange rates of the US dollar, euro, ruble, bitcoin, and other currencies for today, tomorrow and this trading week.

Useful links:

My other articles are available in this section

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Important:

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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Bank of Japan raises rates, but yen struggles

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The Bank of Japan raised its key interest rate this morning from 0.50% to 0.75%, marking the highest level in 30 years. As a result, the yield on 10-year government bonds crossed 2% for the first time since 1999, leading to a sell-off in bonds.

The Bank of Japan adopted a relatively hawkish tone, indicating its readiness to continue tightening monetary policy as part of normalization efforts.

Meanwhile, data released just before the BoJ meeting showed that the Consumer Price Index (CPI) for November indicated that annual inflation remained nearly unchanged from October, decreasing from +3.0% to +2.9% for the core index, while the base index (excluding fresh food) remained at +3.0%. The preferred inflation indicator for the Bank of Japan (excluding fresh food and energy) fell from +3.1% to +3.0%.

Overall, the situation differs little from the previous month, and considering the persistently high inflation, the Bank of Japan finally made its long-awaited decision regarding rates, aiming to find a balanced solution. The BoJ also stated that real interest rates are expected to remain significantly negative, as inflation has been above the target level for 44 consecutive months.

The BoJ anticipates that core inflation will fall below the target by the middle of next year, which will help alleviate pressure on real wages, which have been declining for the past 10 months due to high inflation.

The rate hike comes amid economic challenges, as revised GDP data for the third quarter showed a year-on-year decline of 2.3%. However, the Bank of Japan hopes that corporate profits will remain high, enabling wage increases next year.

The decision to raise rates was necessary due to high inflation, and even economic issues could not prevent it from happening. Rising yields above historical norms, combined with a significant debt burden, will increase the cost of servicing that debt and could provoke a crisis, given that the debt-to-GDP ratio stands at nearly 230%. With GDP shrinking, this ratio will increase further, suggesting that Japan may be headed for challenging times.

The yen weakened slightly following the BoJ's decision, as it was expected and already priced in. The future path will depend on how the balance of interests is managed. Since Japan's government debt is largely domestic, a strengthening yen could complicate government operations. With the next rate hike unlikely before the middle of next year, representatives of the BoJ believe that the downward pressure on the yen will continue. At the same time, yields are rising, which could push the yen up. Amid a weakening dollar, the yen may begin to strengthen; however, this is unlikely to occur until there are signs of economic growth.

The expected price is close to neutral, with a weak bullish direction. We need to monitor how major players respond to changes in monetary policy.

Last week, we considered the priority scenario to be a decline in USD/JPY to the support level of 153.67, but the drop was weaker than expected, and after the BoJ's rate decision was announced, the pair moved higher instead. Investors may assume that the decision to raise rates will expedite Japan's slide into recession. We do not see long-term prospects for the dollar, at least in the coming months, and therefore expect that the growth will peak near the local maximum of 157.89. There is a risk that this level will be breached, which would shift resistance to 158.89. For stronger growth, additional reasons will be needed. In the medium term, we anticipate a reversal of USD/JPY to the downside.

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The ECB Is Ready to Completely Shut Down

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Yesterday, the euro barely reacted to news that the European Central Bank left interest rates unchanged for the fourth meeting in a row.

The deposit rate remained at 2%—exactly as many economists had forecast. Policymakers gave no guidance on their next steps, emphasizing that decisions will be made meeting by meeting, based on incoming data. They also said they are inclined to announce the end of the current interest-rate cutting cycle, which has lasted for more than a year and a half.

The ECB's decision was also accompanied by new forecasts pointing to more confident economic growth and a return of inflation to 2% in 2028. These projections inspire cautious optimism, suggesting that anti-inflation measures are nearing completion and that the eurozone economy will remain resilient to external shocks. However, it is important to note that forecasts are only an approximate assessment of the future, and many unpredictable factors could affect their realization. In particular, geopolitical tensions, energy price volatility, and changes in global supply chains represent potential risks that could derail the intended course.

"We once again confirmed that we are in a good position," ECB President Christine Lagarde told reporters in Frankfurt. "Today there was a unanimous decision on interest rates, which we decided to keep unchanged. But there was also unanimous agreement that all options must remain on the table."

Most ECB officials have already made it clear that no immediate action is required to achieve the inflation target. This should support demand for the euro, as it allows proponents of a tighter monetary policy to retain control and continue resisting further rate cuts.

As for inflation, officials signaled that they are prepared to tolerate price growth running below expectations for some time. Executive Board member Isabel Schnabel said this does not concern her too much if such deviations are minor. "In the near term, inflation should decline further—mainly because past energy price increases will drop out of the annual figures," Lagarde said. "After that, inflation should return to the target."

As noted above, the euro did not react at all to this news yesterday.

As for the current technical picture of EUR/USD, buyers now need to focus on breaking above the 1.1730 level. Only this would open the way for a test of 1.1750. From there, a move up to 1.1770 is possible, but achieving it without support from major players will be quite difficult. The most distant target is the 1.1805 high. In the event of a decline, I expect any serious action from large buyers only around the 1.1705 level. If no support appears there, it would be preferable to wait for a retest of the 1.1685 low or to open long positions from 1.1650.

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

The Bank of England Lowered Interest Rates

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The British pound would seemingly have been expected to collapse after the Bank of England cut interest rates yesterday. Instead, it rose—and quite solidly against the dollar. On Thursday, the committee voted 5–4 to lower interest rates to a nearly three-year low of 3.75%.

It is clear that the British regulator's direct hints that the pace and scale of future rate cuts are now in question influenced market sentiment. Yesterday's rate cut had already been priced in, but the policymakers' cautious stance had not. Governor Andrew Bailey warned of limited room for maneuver in 2026. The Monetary Policy Committee will have to make decisions in a more challenging environment.

The statement emphasized concerns about inflation and the need to maintain a cautious monetary policy should inflation accelerate. In effect, the rate cut was perceived as a one-off measure to support the economy rather than the continuation of a prolonged easing cycle. This, combined with inflation concerns, supported demand for the pound. Traders reacted by adjusting their expectations for rate cuts next year, focusing on the committee's cautious tone even after this week's sharper-than-expected drop in inflation data. Markets have already fully priced in a quarter-percentage-point cut in 2026.

The Monetary Policy Committee said that available data suggest borrowing costs will continue to decline next year as inflation risks ease. However, in new wording, it warned that decisions on future cuts would be made with careful consideration of a delicate balance as the central bank approaches the neutral interest rate—the level that neither stimulates nor restrains inflation.

"I think there is a case for continuing a more gradual easing," Bailey said in an interview. "Conditions will become more challenging, and I expect the pace of cuts to slow at some point."

The Bank of England now expects inflation to be closer to its 2% target by next spring, after consumer price growth unexpectedly fell to an eight-month low. The government budget scheduled for November 26 is also expected to reduce inflation in the short term. Nevertheless, some of those who supported Thursday's rate cut expressed caution, particularly given uncertainty about the precise end point of the easing cycle. Deputy Governors Sarah Breeden and Dave Ramsden, who have taken a dovish stance at recent meetings, suggested proceeding more carefully. Several officials also voiced concern about wage growth continuing at a pace incompatible with keeping inflation at the 2% target.

As for the current technical picture of GBP/USD, pound buyers need to take out the nearest resistance at 1.3400. Only then will a move toward 1.3425 be possible, above which a breakout would be quite difficult. The most distant target is the 1.3450 level. In the event of a decline, bears will try to seize control at 1.3360. If successful, a break of this range would deal a serious blow to bullish positions and push GBP/USD toward the 1.3340 low, with the prospect of a move to 1.3310.

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AI bubble to be main risk for the cryptocurrency market

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Following a recent interview with Galaxy Digital CEO Mike Novogratz, where he shared his forecasts—details of which I covered yesterday—there is another significant interview with Tether CEO Paolo Ardoino that deserves attention.

According to Ardoino, the AI bubble is the primary risk for Bitcoin in 2026. Given the strong correlation of BTC with traditional capital markets, this makes Bitcoin vulnerable to shocks from a potential burst in the AI bubble. The company believes that if sentiments around AI turn negative in 2026, it will trigger turmoil in the US stock market, resulting in Bitcoin dropping alongside it. However, regarding optimistic views, sharp corrections of BTC by 80%, as seen in 2022 or 2018, are not anticipated. The increasing institutional demand creates a more stable foundation for digital gold.

Nevertheless, not all experts share Tether's CEO's concerns regarding artificial intelligence. Some argue that even if there is a correction in the AI market, Bitcoin's long-term prospects remain positive. They explain this by noting that more institutional investors view BTC as a hedge against inflation and a protection against geopolitical risks. Furthermore, the acceptance of cryptocurrencies in various countries and the launch of ETFs continue to grow, providing additional support for Bitcoin's price.

A key factor influencing BTC's price in 2026 will also be regulatory policies, changes in interest rates by central banks, and inflation. All of this will continue to affect all markets, including the cryptocurrency market.

Trading recommendations:

In terms of the technical outlook for Bitcoin, buyers are currently targeting a return to the $87,600 level, which opens a direct path to $89,600, and from there, it would not be far to $92,300. The ultimate target will be around the peak at $95,000, and surpassing this level would indicate attempts to return to a bullish market. Should Bitcoin decline, I expect buyers at the $85,400 level. A return of the trading instrument below this area could quickly push BTC down to around $83,200, with the further target being the $81,200 region.

For Ethereum, clear consolidation above the $2,997 level opens a direct path to $3,105. The ultimate target will be around the peak at $3,233, and surpassing this level would indicate a strengthening of bullish market sentiments and renewed buyer interest. If Ethereum declines, I expect buyers at the $2,858 level. A drop below this area could swiftly send ETH down to around $2,763, with the further target being the $2,684 region.

What we see on the chart:

- Red lines indicate support and resistance levels where either a price slowdown or active growth is expected;

- Green lines indicate the 50-day moving average;

- Blue lines indicate the 100-day moving average;

- Light green lines indicate the 200-day moving average.

Typically, a crossover or price test of these moving averages either halts market momentum or sets a new directional impulse.

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

Market navigates inflation data

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The S&P 500 has successfully navigated the recent release of US inflation data, despite not capitalizing on the slowdown in consumer prices to 2.7% and the core index to 2.6%. Investors remain skeptical of the figures from the Bureau of Labor Statistics following the prolonged government shutdown. However, according to Wells Fargo, the disinflationary trend is ongoing, even if the latest statistics may exaggerate the extent of the CPI decline.

The US economy maintains a remarkable balance of resilience. It is not overheating enough to trigger rising inflation and provoke a tightening of the Federal Reserve's monetary policy. Consequently, a Goldilocks environment has been created for American stocks, allowing the S&P 500 to feel confident. Moreover, tensions surrounding geopolitical and trade risks are gradually easing. Investors are optimistic about an imminent peace in Eastern Europe and welcome the absence of escalations in tariff conflicts between the United States and China.

S&P 500 and Federal Funds Rate Dynamics

The S&P 500 is gaining strength from expectations surrounding the continuation of the Federal Reserve's monetary expansion cycle. Jerome Powell believes that the impact of tariffs on inflation will be relatively short-lived. Christopher Waller asserts that there will be no acceleration in prices in 2026, and John Williams, the president of the New York Fed, is encouraged by the muted effects of trade policy on inflation. The top officials of the FOMC are convinced that the labor market is the primary focus. It is no surprise that investors continue to anticipate a reduction in the federal funds rate.

When combined with positive forecasts for corporate profits and hopes surrounding artificial intelligence technology, this paints a bright future for the S&P 500. Optimists believe that there will be no bad news for the US stock market until year-end, as it has already weathered the test of American inflation. Thus, it is the perfect time to start thinking about the traditional Christmas rally.

S&P 500 and Moving Averages Dynamics

Despite the S&P 500's flirtation with the 50-day moving average, more than three-quarters of Bloomberg surveyed asset managers are positioning themselves for a more risky environment in 2026. Deutsche Bank, Morgan Stanley, and RBC Capital Markets are forecasting a rally of over 10% for the S&P 500 next year.

Certainly, risks have not evaporated. The economy could start to falter, and inflation may unexpectedly accelerate. A stagflationary environment would provide a compelling case for a significant retreat in stock markets. Concerns surrounding technology companies' abilities to generate adequate profits from their investments are also increasing. A rift may reemerge between China and the United States, while Russia's unwillingness to end the armed conflict in Ukraine could lead to a rise in geopolitical risks.

Technically, on the daily chart, bulls have found strength to push prices above the pivot level of 6,750, which acts as support. As long as prices remain above this level, it makes sense to focus on buying.

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

Gold Updates Level to $4372

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Gold and silver prices have remained near record highs after lower-than-expected inflation in the U.S. supported forecasts for further interest rate cuts. Platinum has approached its 17-year peak.

On Thursday, the spot price of gold reached approximately $4372 per ounce, signaling growth for the second consecutive week. According to data published on Thursday, the core Consumer Price Index in the U.S. increased at its slowest pace since early 2021, confirming the need for lowering borrowing costs—a factor that favors the price rise of non-yielding precious metals. Against this backdrop, investors are once again focusing on signals from the Federal Reserve regarding future monetary policy. Traders currently estimate the probability of a rate cut in January at around 25%. It is worth recalling that U.S. President Donald Trump is actively advocating for rate cuts next year and is seeking to install his loyalist, who shares his views, as the new Fed chairman.

Despite the current optimism, analysts warn of potential corrections in the precious metals market. Technical indicators are signaling overbought conditions, and a sudden shift in investor sentiment or a reassessment of economic forecasts could trigger price declines. Nevertheless, the long-term outlook for gold and silver remains positive, especially amid geopolitical tensions and concerns about slowing global economic growth. Platinum, for its part, is showing steady growth due to increased demand from the automotive industry.

Geopolitical tensions, particularly in Venezuela, have also heightened gold's appeal as a safe-haven asset. Trump has ordered the blockade of all sanctioned oil tankers, increasing pressure on Caracas amid the buildup of U.S. military presence in the region.

This year, precious metals have shown rapid growth, with both gold and silver poised to record their best annual performances since 1979. Silver has more than doubled in price, while gold has surged by about two-thirds, thanks to active central bank purchases and inflows into gold-backed exchange-traded funds.

Regarding the current technical picture for gold, buyers need to break through the nearest resistance at $4372. This would enable targets toward $4432, above which it would be quite challenging to break. The most distant target would be the area of $4481. In the event of a decline, bears will attempt to regain control over $4304. If successful, a breakout from this range could deal a severe blow to the bulls' positions and push gold down to a low of $4249, with the potential to reach $4186.

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

Stock market on December 19: S&P 500 and NASDAQ bounce back

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Yesterday, stock indices closed in positive territory. The S&P 500 increased by 0.79%, while the Nasdaq 100 gained 1.38%. The Dow Jones Industrial Average strengthened by 0.14%.

Asian stock markets followed Wall Street's lead, as the slowdown in US inflation reinforced the need for interest rate cuts by the Federal Reserve.

The euphoria that swept through US exchanges extended to the Asian region, where investors viewed the prospect of a more accommodative monetary policy from the Fed with optimism. Technology companies became the focal point, as their shares are traditionally sensitive to changes in interest rates. Lower rates translate to a reduced cost of capital for these firms, enabling them to invest more actively in new developments and expand their operations. Additionally, a rate cut positively influences overall economic activity, thereby increasing demand for products from technology companies. However, not all Asian markets reacted uniformly to the news. In some countries, concerns about sustainable economic growth and geopolitical tensions tempered investor enthusiasm.

The yield on 10-year Japanese bonds rose to multi-year highs after the Bank of Japan, as anticipated, increased borrowing costs. The MSCI Asia Pacific Index climbed by 0.7%, with significant contributions from tech giants such as SoftBank Group Corp. and Tencent Holdings Ltd. Positive sentiments were bolstered by an optimistic forecast from Micron Technology Inc., easing concerns regarding artificial intelligence spending and corporate valuations.

As noted earlier, US inflation data has strengthened risk appetite, despite caveats surrounding these figures related to the recent government shutdown. Given that inflation has significantly decreased compared to the previous month, it is evident that there may be room to continue lowering rates to support the labor market. If dovish rhetoric remains in favor, we are likely to witness a new wave of growth in the stock market.

In commodity markets, oil prices have dropped for the second time this week, despite tensions surrounding the US blockade of sanctioned tankers heading to Venezuela. Precious metals continue to be in demand, with platinum approaching $1,930 per ounce, marking its seventh consecutive day of growth and nearing its highest level since 2008.

Regarding the technical outlook for the S&P 500, the main task for buyers today will be to overcome the nearest resistance level of $6,784. Achieving this could signal further growth and open the opportunity for a surge to a new level of $6,801. An equally critical task for bulls will be to establish control above $6,819, which would strengthen their positions. In the event of a downward movement amid declining risk appetite, buyers must assert themselves around $6,769. A break below this level could quickly push the trading instrument back to $6,756 and pave the way down to $6,743.

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

USD/JPY: Simple Trading Tips for Beginner Traders on December 19. Review of Yesterday's Forex Trades

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Trade Review and Tips for Trading the Japanese Yen

The price test at 155.79 coincided with the MACD indicator just starting to move down from the zero mark, confirming the correct entry point for selling the dollar. As a result, the pair decreased by 40 pips.

Today, the Japanese yen weakened against the U.S. dollar after the Bank of Japan raised interest rates but provided no clear guidance on the timeline for future monetary policy tightening. Although the central bank, as expected, raised its benchmark interest rate to its highest level since 1995, the focus is now on Governor Kazuo Ueda's press conference. The market expects more definitive statements from Ueda regarding the central bank's plans for further monetary policy tightening. Investors hope to receive signals about how likely and when the BOJ intends to take the next steps toward raising interest rates. The absence of such signals will further disappoint traders and put pressure on the yen.

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

Buy Scenarios

• Scenario #1: I plan to buy USD/JPY today when it reaches the entry point around 156.13 (green line on the chart), with a target for growth to 156.59 (thicker green line on the chart). At approximately 156.59, I plan to exit my long positions and open short positions in the opposite direction (anticipating a movement of 30-35 pips back from the level). It is best to resume buying the pair on corrections and significant pullbacks in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from it.
• Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 155.82 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. A rise to opposing levels of 156.13 and 156.59 can be expected.

Sell Scenarios

• Scenario #1: I plan to sell USD/JPY today only after the 155.82 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 155.33 level, where I intend to exit my shorts and immediately buy in the opposite direction (anticipating a 20-25-pip reversal from that level). It is better to sell as high as possible. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.
• Scenario #2: I also plan to sell USD/JPY today if the price tests 156.13 twice in a row while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decline to opposing levels of 155.82 and 155.33 can be expected.

Chart Overview:

• Thin Green Line – entry price for buying the trading instrument;
• Thick Green Line – indicative price level for placing Take Profit or locking in profits, as further growth above this level is unlikely;
• Thin Red Line – entry price for selling the trading instrument;
• Thick Red Line – indicative price level for placing Take Profit or locking in profits, as further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to be guided by overbought and oversold zones.

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

Remember that successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.

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