Forex

EUR/USD and AUD/USD are heading into their strongest month, hinting at rally potential after November drops.

With a jam-packed calendar this week, including, ISM Manufacturing and Services PMIs, the closely watched JOLTS Job Openings report, and the monthly Non-Farm Payrolls report to come, traders are bracing for volatility. These data points are expected to influence the USD/JPY forecast, especially with both the Fed and BoJ policy decisions looming in December.

We may have seen an important swing low on the yen looking at the change of speculative market positioning. And that could see a much deeper pullback on USD/JPY.

AUD/USD has done a poor job of tracking its seasonality overall this year so far. And given it’s taking its directional cue from China while any pullback on the USD may be limited, I'm not hanging my hat on a particularly strong December for AUD/USD.

A bullish breakout in US bonds has sent USD/JPY tumbling below 150, with payrolls now poised to decide whether the yen’s surge gains momentum or fizzles out. Could this be the pivotal moment for bond markets and the Fed's rate path?

We will maintain our bearish EUR/USD forecast for the time being. This pair remains rooted in a bear trend, not just because of the threats of tariffs in 2025, but more so because of weakness in the eurozone economy and therefore the potential for more ECB rate cuts than from the Fed in the US, where even a December rate cut is not fully priced in, let alone cuts in 2025, after Trump’s election victory.

USD/JPY is tumbling, breaking through its 200-day moving average after Tokyo’s inflation data shocked to the upside. With US Treasury yields losing steam and thin markets amplifying moves, traders are eyeing a deeper downside flush. Could the yen’s resurgence have more room to run?

USD/JPY bulls are on the back foot as US bond yields retreat, triggering a key technical break. With Scott Bessent’s bold fiscal plan easing fears and Fed rate cut bets fading, the pair now skews firmly to the downside.

The consensus is 50bp, market pricing leans towards 75bp. Whatever the RBNZ decide to do today, it comes down to whether they will signal further cuts, as to whether NZD/USD continues to depreciate or bounce on a "sell the rumour, buy the fact" reaction.

While parity is just a number in theory, it often carries significant psychological and economic weight - see what it might take to drive to EUR/USD to 1.00!

The slight cooling of the so-called "Trump Trade," i.e., with a strong dollar cooling as we have seen thus far in the week (except against CAD and CNH that were hit by Trump’s tariff threat overnight), may not last long. But today, the euro is finding itself on the front foot amid the relief bounce that commenced from end of last week from severely technical oversold levels. While the recovery may end up lasting for a while, the EUR/USD outlook remains modestly bearish.

True to his campaign promise, Trump is playing hardball with tariffs. But will he deliver, or is this simply a classic Trump-bargaining chip? Regardless, AUD/USD is getting caught up in the headlines.

Trump’s tariff threats send shockwaves through markets, driving the USD higher as trade-reliant currencies plunge. USD/CAD breaks to pandemic highs, while AUD and NZD reel from fears of escalating protectionism.

The slight cooling of the so-called "Trump Trade," characterised by a strong dollar (and a Bitcoin rally), may not last very long. For now, though, traders are adjusting their expectations somewhat and scaling back hopes for aggressive tax cuts and tariff hikes. It is far too early for us to drop out bearish EUR/USD forecast.

GBPUSD, EURJPY: Inflation indicators between the eurozone and the Japanese economy are due this week, following the jump in UK’s inflation rates next week, adding reversal potential to the dollar’s rally ahead of Trump’s presidency.

While traders pushed net-long exposure to the USD to a 20-week high, there is also been a notable pickup of long yen bets. They're also piling into EUR/USD shorts, which is why I continue to suspect USD/JPY and EUR/USD may converge and move lower.