Top Trades for 2025: USD/JPY, Bitcoin Poised for Trump

Return of the Carry Trade?

This year saw a massive unwind of the carry trade with USD/JPY plunging more than 13.8% in a spectacular ten-week sell-off. The decline was widely telegraphed as the death of a multi-year uptrend in the U.S. Dollar as the entire yearly advance was erased. Yet, just eight-weeks later USD/JPY had rallied 12.3% off the lows with a V-shaped recovery taking price into major resistance into the close of the year.

Japanese Yen Price Chart- USD/JPY Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView

The sharp defense and recovery of key support at the 61.8% retracement of the 2023 advance / 2024 yearly open at 140.49-141 keeps 2021 advance viable heading into the start of the year. Key resistance is eyed at the 78.6% retracement of the July decline / July weekly breakdown close at 157.17/89- note that a 2020 parallel converges on this zone and a break / weekly close above is needed to mark resumption of the broader uptrend towards the 1190 high / 2024 high-week close (HWC) at 160.40/73 and the yearly high at 161.95- both levels of interest for possible topside exhaustion / price inflection IF reached.

Weekly support rests at 152 and is backed closely by the 2022 high-close / 2023 HWC at 148.73-149.60. Broader bearish invalidation is set to the 61.8% retracement of the September advance at 146.59- a break / close below this threshold would suggest a more significant high is in place / a larger trend reversal is underway toward the 2024 low-week close (LWC) at 143.90 and the yearly lows.

Bottom line: The USD/JPY recovery off the yearly lows is testing uptrend resistance into the close of the year. From at trading standpoint, losses should be limited to 152 IF USD/JPY is heading higher on this stretch with a close above 157.89 needed to fuel the next leg higher in price.

Crypto Resurgence to Gather Pace

A regulatory cloud has hung over the Bitcoin for the past four-years as traders weighted the potential for increased scrutiny on the maturing market. The crypto world may now be poised for a renaissance as a new ‘crypto-friendly’ administration assumes power.

Bitcoin Price Chart- BTC/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; Bitcoin on TradingView

For Bitcoin, the impact was immediate with BTC/USD breaking to fresh record highs the day after the U.S. elections. The subsequent rally extended more than 118% off the August low before exhausting in late December into uptrend resistance. An outside weekly-reversal just ahead of Christmas threatens some near-term weakness within the broader uptrend.

Initial weekly support rests with the 23.6% retracement the 2022 rally at 86,443 and is backed closely by the 100% extension of the 2019 advance at 81,183. Broader bullish invalidation is now raised to the 2021 swing-high / March high-close (HC) at 69,000-71,285- losses below this threshold would suggest a more significant high was registered / a larger trend reversal is underway.

Weekly resistance is eyed with the 100% extension of the March channel breakout at 107,892 and is backed 121,772-123,754- a region defined by the 1.618% and 1.272% extensions. Note that the upper parallel of the ascending pitchfork we’ve been tracking off the 2022 lows also converges on this threshold and further highlights the technical significance of this zone- look for a larger reaction there IF reached with a breach / close above needed to fuel the next move towards he 1.618% extension at 143,931.

Bottom line: The Bitcoin rally is responding to uptrend resistance into the close of the year. From a trading standpoint, losses should be limited to 69,000 IF price is heading higher on this stretch with a close above the upper parallel ultimately needed to fuel the next major leg of the advance.

Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.