• Steady at the base of a 1.2734-1.2750 range - occasional FX Matching flow

• Fin Min Reeves to push for UK/EU reset at the finance ministers' meeting

• Reducing UK's trade barriers with the EU will improve the growth of both

• Demand for UK workers crashes after the tough budget, REC survey

• Techs - neutral daily momentum studies, 21-day Bollinger bands contract

• 5, 10 & 21-DMAs conflict - neutral daily setup, weeklies still bearish

• Last week's 1.2619 low, then the 1.2475 November trend low initial supports

• Friday's 1.2810 top then 1.2841, 0.382% September/November fall resistance

• A close above 1.2841 would end the September-November downtrend

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• AUD/USD up 0.1% in cautious Asia as traders brace for RBA rate decision Tue

• Central bank expected to hold rates at 4.35%, may soften hawkish stance

• 25 bps cut fully priced in for April with a 55% chance of a Feb easing

• Fallout out from developments in Syria and S.Korea cap Aussie rallies

• China disinflation adds to negative AUD sentiment; China CWEC meeting eyed

• Lower U.S. yields on Fed Dec rate cut expectations limit downside

• Major support base at 0.6340-0.6360, loss opens ratchet to 0.6271, 2023 low

• Resistance 0.6420-25, 0.6440-0.6450; Asia range 0.6386-0.6403

• For more click on FXBUZ

• USD/JPY -0.1% as developments in Syria and South Korea lift safe-haven JPY

• Asian shares slide as South Korea martial law fallout deepens

• Syrian rebels topple Assad who flees to Russia in Middle East shakeup

• USD undermined by lower U.S. yields as Fed Dec rate cut expectations rise

• Fed seen poised to cut rates this month, debate 2025 pause

• Japan revises Q3 GDP higher on capex, exports; domestic demand picks up

• May lift expectations of Dec rate hike as BOJ holds cards close to its chest

• Support 149.40-50, 149.00, 148.65, resistance 150.65-75, 151.20

• Asia range 149.70-150.10

• For more click on FXBUZ

• Steady in early Asia after closing off 0.2% with the U.S. dollar up 0.2%

• Trump calls for immediate Ukraine ceasefire, Kyiv and Moscow cite conditions

• Eurozone productivity growth remained weak in Q3, and will likely continue

• ECB will cut 25bp to 3% Thursday - statement, press conference tone is key

• Charts - daily momentum studies climb as 21-day Bollinger bands contract

• 5, 10 & 21-DMAs coil, weekly moving averages fall - a neutral setup

• Daily technical signals converge, which often precedes a breakout

• 1.0668. 0.382% of the Sep/Nov fall is now pivotal resistance

• Last week's 1.0461 base and the November 1.0331 low are initial supports

• 1.0550 946 mln, and 1.0600 1.237 BLN close strikes for December 6th

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• USD/JPY starts the week on a cautious note after closing unchanged on Friday

• Weighed down by lower U.S. yields as Fed Dec rate cut expectations rise

• U.S. labor market remained strong but continued to cool in November

• Fed seen poised to cut rates this month, debate 2025 pause

• U.S. CPI report key this week; developments in Syria and S.Korea eyed

• ANALYSIS- BOJ is holding cards close to its chest on December rate hike

• Japan Q3 GDP and current account data due Mon; Fri range 149.38-150.68

• Support 149.40-50, 1490,00, 148.65, resistance 150.65-75, 151.20

• For more click on FXBUZ

• AUD/USD offered in early Asia after closing 0.95^ lower on Friday

• Undermined by shifting RBA rate expectations; odds of an early rate cut rise

• RBA expected to hold rates at 4.35% Tue but may soften hawkish stance

• Feb rate cut chances climb to 55%, April easing completely priced in

• Fallout out from developments in Syria and S.Korea weigh on Aussie

• Lower U.S. yields on Fed Dec rate cut expectations limit downside

• U.S. and China inflation data, China CEWC meeting also key this week

• Major support base at 0.6340-0.6360, loss opens ratchet to 0.6271, 2023 low

• Resistance 0.6420-25, 0.6440-0.6450; Fri range 0.6373-0.6455

• For more click on FXBUZ

Repeat with no changes

• EUR net spec short increases to 57,489 contracts by Tuesday from short of 56,009 the previous week

• JPY net spec position shifts to long of 2,334 contracts vs previous short of 22,633

• GBP net spec long diminishes to 19,326 contracts vs 21,634 previously

• AUD net spec long dips to 21,401 vs previous long of 31,776

• MXN long rises to 4,184 from previous 3,458 contracts

• CAD short increases to 159,346 from short of 154,002 the week before

• GBP (-0.2%) rebound peters out at crucial hurdles. Range = 1.2721-1.2811

• First test of 200-week/day MA at 1.2814-22 keeps a lid on GBP

• U.S. payrolls supports a Fed Dec cut (85%)

• Minimal room for further dovish repricing is a headwind for GBP/USD

• Eyes on U.S. CPI as Fed officials open door to Jan skip

• Fed's Hammack "Fed at or near time to slow pace of rate cuts"

• Support sits at 1.27, 1.2665 (Aug low) and 1.25

For more click on FXBUZ

• USD/JPY forms a doji near the 149.98 cloud top after trading 149.38-150.69 EBS range on Friday

• Pair tested lower amid sliding Trsy 2-year yields after the US jobs report showed an uptick in unemployment

• Yen futures volume spike was largest since Nov. 1, though below Oct. levels

• Lower Trsy yields, oil weigh on pair though lacks downard momentum as vols and skews ease

• Support is near 149.10 ahead of 100-DMA and weekly cloud bottom at 148.75-76

• Resistance is at 55-DMA of 150.65, the Feb. 13 and Oct. 21 highs at 150.88, Nov. 6 low of 151.30 and 200-DMA at 151.99

• Crosses are mostly lower with AUD/JPY down 1% and testing its lower Bollinger

• Data next week includes US CPI and Japan Q4 Tankan, corp prices

For more click on FXBUZ

Synopsis:

MUFG anticipates the EUR could see near-term strength in December due to limited fresh catalysts for further weakness, though seasonal patterns suggest potential reversal early in 2025.

Key Points:

• Recent EUR/USD Decline:

  • EUR/USD has dropped roughly 8 big figures since trading near 1.1200 pre-US election, driven by Trump’s victory and anticipated trade and fiscal policies.
  • Markets now await new triggers for another leg lower.

• Seasonal Dynamics:

  • Historically, the EUR has shown a tendency to strengthen in December, only to reverse gains between January and March.
  • MUFG’s quantitative analysis, however, finds this December outperformance lacks statistical significance.

• Potential Catalysts for EUR Weakness:

  • The ECB signals or implements a larger 50bps rate cut.
  • The Fed skips a rate cut this month, maintaining current policy rates.
  • President-elect Trump escalates rhetoric on EU trade tariffs.

Conclusion:

While EUR/USD may stabilize or strengthen slightly in December due to stretched short positioning and lack of immediate bearish triggers, MUFG expects this to be temporary. Renewed weakness is likely between January and March, driven by further monetary divergence and potential trade tensions.

Sterling enjoyed a brief jump after the U.S. payrolls report showed a rise in the unemployment rate that supported the case for a rate cut at the Fed’s final policy meeting of the year, but lack of follow-through gains underpinned the view that alternatives to the dollar are lacking.

Add to that the fact that Fed officials appear to be setting the stage for a possible rate pause in Q1 and the environment remains conducive to dollar strength.

Consequently, with GBP/USD stalling ahead of resistance at the 200-day moving average at 1.2821, focus is once again the 1.27 handle.

UK news flow remains light and with little uncertainty over the Bank of England’s policy outlook in the short run as officials stick to the gradual easing script, the dollar side of the equation should continue to drive the action.

For now, range trading appears to be the name of the game and thus it may take until the release of the latest U.S. CPI report to provide a clearer sense of direction.

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Synopsis:

Morgan Stanley shares a tactically bullish stance on the USD, citing strong US data and trade policy risks. The EUR faces headwinds from weak domestic growth and tariff-related risks, while the GBP benefits from fiscal-driven growth and high rate differentials.

Key Points:

• USD:

  • View: Bullish.
  • Rationale: Strong US data and potential repricing of trade policy risks support continued strength in the USD.
  • Skew: Bullish.

• EUR:

  • View: Neutral with a bearish skew.
  • Rationale: Weak domestic growth, tariff-related risk premium, and declining rates compared to peers weigh on the EUR.
  • Skew: Bearish.

• GBP:

  • View: Neutral with a bullish skew.
  • Rationale: Fiscal-driven growth and persistent inflation keep the BoE on a gradual easing path. High front-end rate differentials remain supportive for GBP.
  • Skew: Bullish.

Conclusion:

Morgan Stanley expects the USD to maintain its upward momentum due to robust data and trade policy repricing. The EUR faces challenges from growth and rate differentials, while the GBP is poised for gains supported by fiscal resilience and attractive rate differentials.

The latest jobs data out of Canada should embolden the well-owned bearish Canadian dollar trade.

The headline employment increase beat expectations at 50.5k, but a sizeable increase in Canada's unemployment rate to 6.8% from 6.5% cements the case for another 50bp rate cut (now a 70% chance), opening the door for USD/CAD to retest recent highs just under 1.42.

Since the beginning of the year, the unemployment rate has risen from 5.7% to 6.8%, a level last seen in September 2021.
The speed of the move will be somewhat alarming for BoC policymakers, particularly with Canada being among the more sensitive economies to high interest rates.

As a result, downside momentum in the Loonie is likely to gather pace in the lead up to next week’s BoC policy decision.

Elsewhere, with the threat of tariffs from President-elect Donald Trump, rebounds in CAD are likely to be short and shallow as we head towards the Jan.
20 presidential inauguration.

For more click on FXBUZ

Synopsis:

ANZ recommends two medium-term trades for 2025 based on growth differentials, monetary policy divergence, and trade sensitivity. They expect EUR/GBP to weaken as the eurozone lags the UK in growth and the ECB eases more aggressively. Similarly, GBP/NZD is forecast to rise, supported by stronger UK growth compared to New Zealand.

Key Points:

• Sell EUR/GBP on Rallies Above 0.84:

  • Target: 0.80 by year-end 2025.
  • Growth Differential: UK GDP is forecast at 1.5% y/y versus 1.3% y/y for the euro area in 2025.
  • Monetary Policy: The BoE is expected to end 2025 with rates at 3.5%, while the ECB is forecast at 1.5%, making the trade carry positive.
  • Trade Sensitivity: The UK is less exposed to tariffs than the eurozone, with 60% of UK exports in services as of September.

• Buy GBP/NZD Below 2.13:

  • Target: Exits around 2.16–2.18.
  • Recent Performance: GBP/NZD appreciated from 2.00 to a high of 2.19 in 2024.
  • Growth Differential: UK GDP is forecast at 1.5% y/y versus 0.8% y/y for New Zealand in 2025.
  • Monetary Policy: Both the BoE and RBNZ are expected to end 2025 with rates at 3.5%, but the UK’s stronger growth favors GBP.

Conclusion:

ANZ expects EUR/GBP to decline amid weaker eurozone growth and a more aggressive ECB easing cycle, while GBP/NZD is poised for gains as UK growth outpaces New Zealand. These trades align with structural and macroeconomic dynamics, offering medium-term opportunities for 2025.

The Swiss franc could see solid demand in December, as usual.
USD/CHF has fallen in 17 of the past 24 Decembers, notably the December 2008 drop of 12%, according to EBS prices.

While USD/CHF's trend in December points to a market that has a tendency to fall, seasonal trends should not be considered in isolation, but when combined with other factors, they can be a useful tool.

Last month USD/CHF gains faltered well ahead of the 0.9023 Fibo, a 76.4% retrace of the 0.9223 to 0.8375 (2024) drop, and spot has been weak in November so far.
Fourteen-month is negative, reinforcing the underlying bearish market structure.

A head and shoulders reversal pattern has formed on the daily chart, with USD/CHF's Thursday close under the neckline near 0.8800, adding to the downside risk.
There is scope for spot to drop towards the 0.8600 level which is near the head and shoulders measured objective, especially if there is a bout of risk aversion.
The Swiss franc usually serves as refuge during market worries.

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• Payrolls likely to add volatility into EUR/USD: options could contain

• Option expiries for the New York cut include very large deals

• EUR 12.4 billion between 1.0450 and 1.0655: EUR 1.4 bln 1.0650-55s

• Next week sees large deals from Tuesday through Friday

• Tues EUR 6.36 bln, Wed EUR 3.9 bln, Thurs EUR4.85 bln and EUR 16.4 bln Frid

• The strikes running from 1.0375 through 1.0600

  For more click on FXBUZ

• EUR/GBP was due a correction following a sharp seven day decline

• Thursday's modest bounce eased some of the over sold condition

• Bearish confirmation on most studies but slow stochs are still stretched

• Early Friday and potential for a bearish resumption

• Wednesday's 0.8270 low the initial support point

• We lean bearish and will look for better entry levels to the short side

• EUR/GBP Trader TGM2343

  For more click on FXBUZ

• Thurs slide erased all of our long play gains

• USD/CAD hit a 1.4011 low, a pip above our entry level

• Modest early Friday gains keeping the trade alive

• Fourteen day momentum has flipped back to positive and RSI is rising

• Need to see a climb above 1.4083, Dec. 4 high to put bull run back in play

• Weeklies bullish but legacy of last wk's long upper shadow still being felt

• USD/CAD Trading Page TGM2345

  For more click on FXBUZ

• EUR/USD's mid-Nov failure under 1.0402 Fibo, shows the m-term bias on upside

• 1.0402 Fibo is a 50% retrace of the 0.9528-1.1276 (2022-2023) rise

• However, it failed to sustain last week's break above 1.0563 Fibo: bearish

• 1.0563 Fibo is a 38.2% retrace of the 1.0937 to 1.0332 November (EBS) drop

• We remain short at 1.0500 in anticipation for eventual losses to 1.0350

• EUR/USD Trader TGM2334. Previous update nL2N3N6079

• Could EUR/USD rise for the eighth December in a row? nL2N3N60BY

• German Oct industrial output slumped 1% when expected to rise 1.2%

• Outcome was below the -0.9% to +2.2% range of 29 forecasts

• Industrial production was -4.75% yy in Oct - weakest since July

• EUR/USD has bounced 1.0332 to 1.0597 following steep drop from 1.1214

• The rebound has alleviated an oversold situation

• Peak 20-day Bollingers at 1.0654 is likely limit for the recovery

• Trump's big tariff plan could support USD next year nL5N3N40SW

• GBP bull run stalling at the daily kijun line, 1.2761

• We are long from 1.2640 for 1.2810 with a trailing stop at 1.2675

• Target is just ahead of the 200-day moving average, 1.2821

• The 10-day moving average provides support at 1.2680

• key support and potential reversal point at 1.2619, Dec. 2 low

• Long lower weekly candle shadow backs up last week's bullish candle signal

• Friday action corrective but will look for signs of a stronger pullback

• GBP/USD trader TGM2338

  For more click on FXBUZ

• 0.1% lower in a 1.0566-1.0588 range, as the safe-haven USD weighed

• Russia's Lavrov ready to use any means in the Ukraine conflict

• German IP, trades, EZ revised GDP have a modest impact - US jobs will be key

• France's Macron says he will appoint a new prime minister in the coming days

• Life goes on in France - EZ credit markets will be the barometer for EUR

• ECB to cut rates by 25 bps on Dec 12 - four more cuts expected in 2025

• Charts - daily momentum studies climb as 21-day Bollinger bands contract

• 5, 10 & 21-DMAs coil, weekly moving averages fall - a modest bearish setup

• The 1.0610 range top since mid-Nov is the pivotal resistance for next week

• This week's 1.0461 base and the November 1.0331 low are initial supports

• 1.0550 946 mln, and 1.0600 1.237 BLN close strikes for December 6th

  For more click on FXBUZ

• -0.1% in a 1.2742-1.2760 range on Korea - Russia led safe-haven USD strength

• UK employers cut 2025 growth forecasts as tax hikes weigh on economy

• PM Starmer pledges measurable 'milestones' to rebuild UK after rocky start

• Without tier 1 UK data or BoE events, offshore factors led by US jobs lead

• Techs - daily momentum studies climb, 21-day Bollinger bands contract

• 5, 10 & 21-day moving averages coil - neutral daily setup, bearish weeklies

• This week's 1.2619 low, then the 1.2475 November trend low initial supports

• Thursday's 1.2770 top then 1.2841, 0.382% September/November fall resistance

• A close above 1.2841 would be a bullish signal for next week

For more click on FXBUZ