The EUR/USD pair is trading near 1.1600 amid mixed macroeconomic data from both the US and the eurozone.
Possible technical scenarios:
As we can see on the daily chart, EUR/USD remains in a downtrend, with a bullish double-bottom reversal pattern forming and a neckline at 1.1655 marked with a dotted line. From this area, the price could either decline and pull back toward support at 1.1494 to form a third bottom (a potential triple-bottom reversal pattern), or break out the neckline and move immediately toward resistance at 1.1788.
Fundamental drivers of volatility:
The US dollar gained some support following a global bond selloff that pushed Treasury yields higher, despite a weak ISM manufacturing report showing the ninth straight month of contraction. Markets continue to anticipate a Federal Reserve rate cut in December, limiting the dollar’s upside potential. Even so, the short-term stabilization of the DXY is preventing EUR/USD from holding above recent highs.
On Tuesday, market attention shifted to eurozone inflation and labor market data. The preliminary Harmonized Index of Consumer Prices (HICP) for November exceeded expectations, rising to 2.2% y/y, while core inflation increased only to 2.4%, slightly below forecasts. Both measures declined month-on-month, providing no reason for markets to expect a shift in the ECB’s cautious policy stance and leaving the euro without notable growth catalysts.
Signs of weakening in European manufacturing added pressure: the eurozone manufacturing PMI was revised downward to 49.6, signaling slower business activity. Meanwhile, the unemployment rate is expected to remain at 6.3%, confirming subdued labor market dynamics. Overall, these mixed signals are keeping EUR/USD confined to a narrow range and contributing to calmer trading conditions following the inflation release.
Intraday technical picture:
The 4H chart shows that it remains unclear whether the pair will manage to break out 1.1655, marked with a dotted line, upward from below. It makes sense to wait for confirmation of one of the two scenarios outlined on the daily timeframe before determining further direction.
The GBP/USD pair remains under pressure as the market increasingly prices in a more accommodative UK rate trajectory while reassessing signals from the Federal Reserve.
Possible technical scenarios:
As evidenced by the daily chart, GBP/USD has reversed downward from the resistance of the sideways range between 1.3010 and 1.3279 (the two dotted lines). From this area, the pair has enough room to continue moving toward the lower boundary of the range.
Fundamental drivers of volatility:
Prime Minister Keir Starmer’s comments following the autumn budget strengthened expectations for lower UK interest rates. He emphasized that reducing inflation and borrowing costs is essential for boosting investment. With tax increases totaling £26 billion planned by 2029–30, the government is prioritizing fiscal consolidation — a stance that, in the market’s view, opens the door to earlier Bank of England easing.
These expectations are supported by a series of weak macroeconomic indicators, including falling inflation and a softening labor market. Traders are nearly certain that the Bank of England will cut rates in December, responding to weakening employment data and easing price pressures.
This view stands in contrast to the more cautious tone of MPC member Megan Green, who indicated she would support a rate cut only if labor market conditions and consumer activity deteriorate further. The divergence between market expectations and the Bank of England’s official messaging continues to limit the pound’s ability to recover.
The dollar also adds pressure to the pair. Despite a weaker US manufacturing PMI reading (48.2 in November vs. a forecast of 48.6), markets remain confident in a December Fed rate cut. Futures now assign an 87% probability to another 0.25% reduction, reflecting expectations of further economic cooling.
Intraday technical picture:
Given the unfolding situation on the 4H chart, the pair still has sufficient room to decline toward the lower boundary of the 1.3010–1.3279 sideways range (between the two dotted lines).
The USD/JPY pair is trading near 156 yen per dollar as markets anticipate a likely rate hike by the Bank of Japan in January.
Possible technical scenarios:
Judging by the look of things on the daily chart, Monday’s decline in USD/JPY has almost completely reversed during today’s session. If a bullish engulfing pattern forms, the pair could recover toward the 155.03–156.71 range.
Fundamental drivers of volatility:
BoJ Governor Kazuo Ueda’s statement that the central bank is prepared to resume rate hikes as early as this month triggered the yen’s strongest intraday surge in weeks, briefly pushing the pair down to 154.67. The government bond market reacted sharply as well: rate-hike expectations are now almost fully priced into the short end of the curve, accelerating the rise in long-term JGB yields and contributing to a sell-off in global bond markets.
Notably, the government did not issue any statements softening Ueda’s remarks, reinforcing the perception that the central bank has received political approval to proceed with policy tightening.
That being said, investors remain skeptical that a December rate hike would reverse the yen’s longer-term weakening trend, which has persisted since early October following Sanae Takaichi’s victory in the LDP leadership election. Despite the rising probability of policy tightening, market participants still consider the possibility of renewed currency intervention if downward pressure on the yen returns. Finance Minister Katayama’s comment that policy tools lie within the Bank of Japan’s mandate further underscored that responsibility for stabilizing the exchange rate currently rests with the central bank.
Meanwhile, pressure on the US dollar remains limited. Although markets expect the Fed to cut rates in December, the US currency is holding relatively firm due to safe-haven demand and continued volatility in global bond markets
Intraday technical picture:
According to the 4H chart, the local trend remains downward. After a short-term correction within the 155.03–156.71 sideways range, the price may return to its decline.
The USD/CAD pair is attempting to hold above 1.4000 on Tuesday, as falling oil prices and a cautious market tone continue to support the US dollar.
Possible technical scenarios:
USD/CAD on the daily chart has returned to its upward trend. That being said, early signs of a bearish reversal pattern — either a head-and-shoulders formation or a double top — are emerging. This means the trend could break in the relatively near future, sending the price lower toward 1.3861 and 1.3744. Still, if no reversal develops now, the pair could climb again toward resistance at 1.4108.
Fundamental drivers of volatility:
Declining oil prices — a key export for Canada — are weighing on the Canadian dollar and helping support the US dollar. Commodity prices fell by nearly a dollar after rising to $59.85, following news that US Special Envoy Steve Witkoff was heading to Moscow for talks on ending the war in Ukraine. The market interprets this as temporarily reducing the geopolitical risk premium in oil. Softer commodity demand continues to support USD/CAD, even as expectations for near-term Fed easing remain partially priced in.
Meanwhile, the Canadian economy is showing stronger resilience. Robust GDP data released late last week prompted investors to reassess the likelihood of a Bank of Canada rate cut at the next meeting. This strengthened the CAD and limited USD/CAD’s upward momentum from its November highs, as markets now see a lower chance of immediate policy easing and view the economy as stable enough to maintain current rates.
In contrast, the US backdrop remains weaker: the manufacturing sector contracted for the ninth straight month, and declines in new orders and employment reinforce the case for additional Fed rate cuts. Markets now estimate nearly a 90% probability of a December cut and expect several more reductions in 2025.
Intraday technical picture:
From the look of things on the 4H chart, the pair’s next short-term move will depend on whether it can overcome resistance at 1.4013. If this ends up being successful, it would allow the recovery to extend toward 1.4108.
Gold prices declined on Tuesday, pressured by rising US Treasury yields and profit-taking after the precious metal reached a six-week high the day before.
Possible technical scenarios:
As we can see on the daily chart, gold is testing resistance at 4209.95. If the price fails to overcome this level, it could retreat toward the $4,000 per ounce support zone.
Fundamental drivers of volatility:
The increase in 10-year Treasury yields, following a broader sell-off in government bonds across Japan and Europe, has reduced gold’s appeal and cooled buying interest. Additional downward pressure came from partial profit-taking: over the past two weeks, gold surged sharply from $4,000 to $4,250 per ounce, leaving the market susceptible to a moderate correction.
The US macro backdrop remains mixed. The manufacturing sector contracted for the ninth consecutive month, reinforcing expectations of imminent monetary easing by the Federal Reserve. Markets now price an approximately 87% probability of a December rate cut, with investor focus shifting to ADP employment data and the delayed PCE release — both of which could influence the Fed’s decision-making. The prospect of lower interest rates continues to be a key medium-term driver for gold.
Political uncertainty is adding another layer of volatility: markets are awaiting President Donald Trump’s decision on the next Fed chair, with media reports suggesting that White House adviser Kevin Hassett — a supporter of lower rates — is a leading candidate. Such an appointment could strengthen expectations for looser monetary policy and provide additional support for gold in the future.
Intraday technical picture:
Given the current developments on the 4H chart, it remains unclear which side of the 4209.95 level the price will settle on. If the previous breakout turns out to be false, a decline toward the $4,000 per ounce level becomes highly likely.
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